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SECURITIES AND EXCHANGE COMMISSION
Securities and Exchange Commission
DOCUMENT ID: [Release No. 34-56894; File No. SR-NYSE-2007-107]
NOTICE: NOTICES
ACTION: Self-regulatory organizations; proposed rule changes:
SUBJECT CATEGORY: Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to the Exchange's NYSE BondsSM System and Trade Execution Fees
DOCUMENT SUMMARY: December 4, 2007.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b4 thereunder,\2\ notice is hereby given that
on November 27, 2007, the New York Stock Exchange LLC (``NYSE'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been substantially prepared by the
NYSE. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b4.
I. SelfRegulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
The Exchange proposes to implement a fourmonth pilot program, effective December 1, 2007, that will issue liquidity providers a $20 credit for certain bond trades executed on the NYSE BondsSM system (``NYSE Bonds'') with an execution size of less than 20 bonds. This pilot program will terminate on the close of business March 31, 2008, and will apply to all orders. The text of the proposed rule change is available at the Exchange's principal office, in the Commission's Public Reference Room, and at http://www.nyse.com. II. SelfRegulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, NYSE included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. NYSE has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. SelfRegulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to implement a fourmonth pilot program pursuant to which it will issue liquidity providers a $20 credit for every execution on NYSE Bonds that is less than 20 bonds. This pilot program will commence on December 1, 2007 and will terminate at the close of business March 31, 2008.
A liquidity provider is one who posts liquidity to the system. During the course of clearing their bond trades, liquidity providers absorb clearing costs. To offset these clearing costs, liquidity providers may increase the offer price or decrease the bid price of the bond. In doing so, the best execution of a bond order may be compromised as clearing costs increase with smaller orders.
Accordingly, the Exchange proposes that liquidity providers be issued a $20 credit for executions of bond orders with an execution size of less than 20 bonds. For a liquidity provider to be eligible to receive this $20 credit, the original order posted by the liquidity provider must be for 20 bonds or more. For example, if a liquidity provider posts an order for 100 bonds and a contra side order comes in for 50 bonds, the liquidity provider will not receive a $20 credit. However, if a contra side order comes in for 10 bonds against the liquidity provider's original posted order of 100 bonds, the liquidity provider will receive a credit of $20 for that execution from the Exchange.
NYSE Bonds, which was implemented in March 2007, will continue to update its functionality to provide competitive bond trading for customers. The Exchange believes that this $20 credit will incentivize the liquidity provider to display the best price available on NYSE Bonds.
2. Statutory Basis
NYSE believes that the proposed rule change is consistent with the
provisions of Section 6 of the Act,\3\ in general, and furthers the
objectives of Section 6(b)(4) of the Act \4\ in particular, in that it
is designed to provide for the equitable allocation of reasonable dues,
fees, and other charges among its members and other persons using its facilities.
\3\ 15 U.S.C. 78f.
\4\ 15 U.S.C. 78f(b)(4).
B. SelfRegulatory Organization's Statement on Burden on Competition
NYSE does not believe that the proposed rule change will impose any
burden on competition that is not necessary or appropriate in furtherance of purposes of the Act.
C. SelfRegulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others
Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action
Because the foregoing rule change establishes or changes a due,
fee, or other charge imposed by the Exchange, it has become effective
pursuant to Section 19(b)(3)(A) of the Act \5\ and subparagraph (f)(2)
of Rule 19b4 thereunder.\6\ At any time within 60 days of the filing
of the proposed rule change, the Commission may summarily abrogate such
rule change if it appears to the Commission that such action is
necessary or appropriate in the public interest, for the protection of
investors, or otherwise in furtherance of the purposes of the Act. \5\ 15 U.S.C. 78s(b)(3)(A).
\6\ 17 CFR 240.19b4(f)(2).
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of the following methods:
Electronic Comments
Paper Comments
All submissions should refer to File Number SRNYSE2007107. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's
[[Page 70363]]
Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of NYSE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SRNYSE2007107 and should be submitted on or before January 2, 2008.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.7
\7\ 17 CFR 200.303(a)(12).
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E723921 Filed 121007; 8:45 am]
BILLING CODE 801101P
SUMMARY: New York Stock Exchange LLC,
DOCUMENT BODY 2: December 4, 2007.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b4 thereunder,\2\ notice is hereby given that
on November 27, 2007, the New York Stock Exchange LLC (``NYSE'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been substantially prepared by the
NYSE. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b4.
I. SelfRegulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
The Exchange proposes to implement a fourmonth pilot program, effective December 1, 2007, that will issue liquidity providers a $20 credit for certain bond trades executed on the NYSE BondsSM system (``NYSE Bonds'') with an execution size of less than 20 bonds. This pilot program will terminate on the close of business March 31, 2008, and will apply to all orders. The text of the proposed rule change is available at the Exchange's principal office, in the Commission's Public Reference Room, and at http://www.nyse.com. II. SelfRegulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, NYSE included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. NYSE has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. SelfRegulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to implement a fourmonth pilot program pursuant to which it will issue liquidity providers a $20 credit for every execution on NYSE Bonds that is less than 20 bonds. This pilot program will commence on December 1, 2007 and will terminate at the close of business March 31, 2008.
A liquidity provider is one who posts liquidity to the system. During the course of clearing their bond trades, liquidity providers absorb clearing costs. To offset these clearing costs, liquidity providers may increase the offer price or decrease the bid price of the bond. In doing so, the best execution of a bond order may be compromised as clearing costs increase with smaller orders.
Accordingly, the Exchange proposes that liquidity providers be issued a $20 credit for executions of bond orders with an execution size of less than 20 bonds. For a liquidity provider to be eligible to receive this $20 credit, the original order posted by the liquidity provider must be for 20 bonds or more. For example, if a liquidity provider posts an order for 100 bonds and a contra side order comes in for 50 bonds, the liquidity provider will not receive a $20 credit. However, if a contra side order comes in for 10 bonds against the liquidity provider's original posted order of 100 bonds, the liquidity provider will receive a credit of $20 for that execution from the Exchange.
NYSE Bonds, which was implemented in March 2007, will continue to update its functionality to provide competitive bond trading for customers. The Exchange believes that this $20 credit will incentivize the liquidity provider to display the best price available on NYSE Bonds.
2. Statutory Basis
NYSE believes that the proposed rule change is consistent with the
provisions of Section 6 of the Act,\3\ in general, and furthers the
objectives of Section 6(b)(4) of the Act \4\ in particular, in that it
is designed to provide for the equitable allocation of reasonable dues,
fees, and other charges among its members and other persons using its facilities.
\3\ 15 U.S.C. 78f.
\4\ 15 U.S.C. 78f(b)(4).
B. SelfRegulatory Organization's Statement on Burden on Competition
NYSE does not believe that the proposed rule change will impose any
burden on competition that is not necessary or appropriate in furtherance of purposes of the Act.
C. SelfRegulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others
Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action
Because the foregoing rule change establishes or changes a due,
fee, or other charge imposed by the Exchange, it has become effective
pursuant to Section 19(b)(3)(A) of the Act \5\ and subparagraph (f)(2)
of Rule 19b4 thereunder.\6\ At any time within 60 days of the filing
of the proposed rule change, the Commission may summarily abrogate such
rule change if it appears to the Commission that such action is
necessary or appropriate in the public interest, for the protection of
investors, or otherwise in furtherance of the purposes of the Act. \5\ 15 U.S.C. 78s(b)(3)(A).
\6\ 17 CFR 240.19b4(f)(2).
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of the following methods:
Electronic Comments
Paper Comments
All submissions should refer to File Number SRNYSE2007107. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's
[[Page 70363]]
Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of NYSE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SRNYSE2007107 and should be submitted on or before January 2, 2008.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.7
\7\ 17 CFR 200.303(a)(12).
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E723921 Filed 121007; 8:45 am]
BILLING CODE 801101P
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