

[Federal Register: January 17, 2008 (Volume 73, Number 12)]
[Notices]               
[Page 3304-3305]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17ja08-106]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57136; File No. SR-NYSEArca-2006-82]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting 
Approval of Proposed Rule Changes Relating to Amendments to NYSE Arca 
Equities Rules 2.16 and 4.5 Relating to Certain ETP Holder 
Administrative Procedures

January 11, 2008.

I. Introduction

    On November 7, 2006, NYSE Arca, Inc. (``NYSE Arca'' or the 
``Exchange''), through its wholly owned subsidiary NYSE Arca Equities, 
Inc. (``NYSE Arca Equities'' or the ``Corporation''), filed with the 
Securities and Exchange Commission (``Commission'' or ``SEC''), 
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposal to 
amend its Rules 2.16 and 4.5 relating to certain ETP Holder 
administrative procedures. The proposed rule change was published for 
comment in the Federal Register on July 18, 2007.\3\ The Commission 
received no comments

[[Page 3305]]

regarding the proposal. This order approves the proposed rule changes.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 56057 (Jul. 12, 
2007), 72 FR 39477.
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II. Description of the Proposal

    NYSE Arca Equities Rule 2.16 currently provides that all Equity 
Trading Permit (``ETP'') Holders \4\ must file their formation 
documents with the Corporation. The Exchange proposes to amend NYSE 
Arca Equities Rule 2.16 in order to provide that only those ETP Holders 
for which the Exchange is the Designated Examining Authority must 
submit such formation documents to the Corporation.
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    \4\ See NYSE Arca Equities Rule 1.1(n).
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    NYSE Arca Equities Rule 4.5(b) currently requires ETP Holders that 
carry or clear accounts for customers to file two manually signed 
copies of Part II of SEC Form X-17A-5 with the Corporation on a 
quarterly basis. The Exchange proposes to amend NYSE Arca Equities Rule 
4.5(b) to provide that such reports shall be filed electronically with 
the Corporation, rather than manually, and that the ETP Holder shall 
maintain original copies of such reports with manual signatures in 
accordance with NYSE Arca Equities Rule 2.24.\5\
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    \5\ NYSE Arca Equities Rule 2.24 provides that each ETP Holder 
must make, keep current and preserve such books and records as the 
Exchange may prescribe and as may be prescribed by the Securities 
Exchange Act of 1934 (the ``Exchange Act'') and the rules and 
regulations thereunder (including any interpretation relating 
thereto) as though such ETP Holders were brokers or dealers 
registered with the SEC pursuant to Section 15 of the Exchange Act.
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    NYSE Arca Equities Rule 4.5(c) currently requires ETP Holders that 
do not carry or clear accounts for customers to file two manually 
signed copies of Part IIA of SEC Form X-17A-5 with the Corporation on a 
quarterly basis. The Exchange proposes to amend NYSE Arca Equities Rule 
4.5(c) to provide that such reports shall be filed electronically with 
the Corporation, rather than manually, and that the ETP Holder shall 
maintain original copies of such reports with manual signatures in 
accordance with NYSE Arca Equities Rule 2.24.\6\
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    \6\ Id.
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    Finally, the Exchange proposes to amend paragraphs (b) and (c) of 
NYSE Arca Equities Rule 4.5 to codify procedural changes that have been 
implemented by the Exchange and to be consistent with guidance that has 
been provided previously to ETP Holders.

III. Discussion

    After careful review and based on the Exchange's representations, 
the Commission finds that the proposed rule changes are consistent with 
the requirements of the Act and the rules and regulations applicable to 
a national securities exchange.\7\ In particular, the Commission finds 
that the proposed rule changes are consistent with Section 6(b)(5) \8\ 
which requires, among other things, that the rules of a national 
securities exchange be designed to prevent fraudulent and manipulative 
acts and practices, to promote just and equitable principles of trade, 
to foster cooperation and coordination with persons engaged in 
facilitating transactions in securities, and to remove impediments to 
and perfect the mechanism of a free and open market and a national 
market system.
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    \7\ In approving this proposed rule change, the Commission notes 
that it has considered the proposed rule's impact on efficiency, 
competition, and capital formation. See 15 U.S.C. 78c(f).
    \8\ 15 U.S.C. 78f(b)(5).
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    The Commission believes it is reasonable and consistent with the 
Act for the Exchange to amend NYSE Arca Equities Rules 2.16 and 4.5(b) 
and (c) in order to simplify the administrative procedures that ETP 
Holders must follow, given the fact that the Exchange believes that 
such amendments will not compromise the Exchange's ability to regulate 
its ETP Holders.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\9\ that the proposed rule change (SR-NYSEArca-2006-82), as 
amended, be, and hereby is, approved.
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    \9\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-737 Filed 1-16-08; 8:45 am]

BILLING CODE 8011-01-P
