July 20, 2006
July 19, 2006
VIA EMAIL
Nancy M. Morris, Esq.
Secretary
United States Securities and Exchange Commission
Station Place
100 F Street, NE
Washington, DC 20549-9303
Re: File No. NYSE 2006-46 Proposal to revise equity transaction fees
Dear Ms. Morris:
Mckeon Bros LLC feels that is necessary to bring to your attention our strong objection to the NYSEs new proposed fee structure. We represent one of many independent firms that are being affected negatively by the new proposal.
The exchange has proposed to remove the existing 2% cap alternative. Mckeon Bros. LLC reaches this number each month and paid this since the inception of the company in 1997. This 2% cap allows us to compete with the very large brokerage houses. The transaction fees being capped out as a percentage of our commission revenue allows access for our customer base to the floor. McKeon Bros. LLCs projected fee increase is up 161% from last year, but does not take into account the five additional non-member clients that we have begun providing service for. Independents providing service to sell-side non-member clients are paid a sell side rate around an average of .30 cents a 100 shares. Our fee transaction costs should increase to over 200%. The feedback from our existing customers has been negative for this proposal as well.
We offer an important service to our customer base, and we feel that we have a right to provide that service without the unreasonable and inequitable distribution of fees. The NYSE has not quantified the reason for this increase within the rule proposal. The cost of doing business is already complicated enough between specialist billing, and a new technology and floor service fee structure that was put into place months ago.
Mckeon Bros. LLC respectfully asks you to reject this proposal until the impact of this new fee structure is understood from both the perspective of the floor community and the investing public.
Respectfully submitted,
William McKeon, President McKeon Brothers LLC
cc: Mr. Robert L.D. Colby, Acting Director
Ms. Heather Seidel, Senior Special Counsel
Division of Market Regulation
United States Securities and Exchange Commission