Date: July 12, 2006
To: The Securities and Exchange Commission
Nancy M. Morris, Secretary
From: John Lucchese
Chief Executive Officer, SunGard Global Execution Services LLC
Re: Comments on Proposed NYSE Pricing Fees File Number SR-NYSE-2006-46

To Whom It May Concern:

This document voices our strenuous objection to and deep concern about the New York Stock Exchange's (the "Exchange" or "NYSE") proposed transaction fee proposal which we received notice of on June 30, 2006. SunGard Global Execution Services (SGES), a subsidiary of SunGard Data Systems Inc. ("SunGard"), is an independent $2 floor brokerage firm and has been an NYSE member since 1997. SGES has willingly embraced the NYSE's technological evolution and led the advancement of technology on the NYSE floor by being one of the first firms to develop and deploy wireless broker hand-held computers on the floor in 1997. Our primary business is providing NYSE floor brokerage execution services to our clients. We employ 16 people, 11 of whom are located on the NYSE floor. Our clients include non-member broker dealers and institutional money managers. We also provide an electronic execution service ("Dot" execution service) to a number of clients; one of whom is a very large electronic trading broker dealer and SunGard-affiliated company.

Since 1997 SGES has paid the Exchange various monthly fees including fees for personnel, technology usage, booth space and transaction fees known as "600TC" fees. Our monthly 600TC fees are determined by paying the lower of two calculations one of which involves paying 2% of commissions received from our non-member clients less a credit for specialist bills paid. In 2005 SGES paid the NYSE approximately $129,000 in 600TC transaction fees, on trading volume of 8.2 billion shares. This equates to a rate of .00002 per share or .002 per hundred shares (1/5 of a cent per hundred shares). On June 30, 2006 we received notice from the NYSE stating that, effective August 1, 2006, this fee would increase to .00025 per share or .025 per hundred shares (two and a half cents per hundred shares). On our 2005 volume of 8.2 billion shares our annual NYSE transaction fee would rise to over $2 million per year compared to $129,000 under the current rate. This is an increase of $1,937,000 per year or 1,500 %.

We acknowledge that the Exchange's costs are increasing and that it has recently become a "for profit" entity. We further acknowledge that there has been 2% of commissions monthly transaction fee payment calculation which has been in effect since 1981. NYSE, however, cannot reasonably expect to correct what they perceive as a low transaction fee calculation in one fell swoop. Such a disproportional and sudden increase in these transaction fees places an undue and onerous burden on SGES and similarly situated member firms, which seriously jeopardizes the likelihood of SGES remaining in business.

Adding to the difficulty in coping with this issue, the NYSE proposes that the new pricing goes into effect in the middle of a budget year, with only 30 days notice. SGES' budget and the budgets of our clients have been set since January 1 or earlier, and it is unreasonable and unfair to spring a change of this magnitude on firms in the middle of a fiscal year.

The proposed NYSE pricing inexplicably still protects the largest member firms by maintaining a maximum payment "cap" on how high their fees can go. Retention of a maximum monthly cap, albeit raised to $750,000 per month from $600,000 per month, directly and specifically enhances the marginal cost structure and competitive position of the biggest firms, to the disadvantage of firms like SGES that are significantly below the cap. All volume over the arbitrary monthly cap will be essentially free for the largest members, who can pass those savings along to their customers in the form of "mini-caps". This will greatly motivate clients to execute through the largest firms who will exploit their artificially-capped / fixed costs over an even larger client base by distributing more "mini-caps". In fact, SGES has already had conversations about passing the new fees on to our clients which were received poorly. Our largest client who alone does 7.1 billion shares per year out of SGES' total 8.2 billion shares has threatened to take their business from SGES and give it to one of the largest firms who are "above the cap" and who would be able to provide a mini-cap to them. Taken together with the draconian fee increases proposed to the smaller firms, retention of the maximum monthly payment cap for the largest firms defines a fee structure that is not only grossly unfair to the smaller firms such as SGES but is also a blatantly anti-competitive practice. The clearly foreseeable outcome of the proposed fee structure will be to enhance the position of the largest firms at the direct expense of putting firms like SGES out of business; the promise of "mini-caps" will draw all the business to the largest firms. This is squarely in opposition to the tenets of the SEC's rule-making philosophy which is to stimulate competition and not permit actions which provide selective advantages to large firms while disadvantaging smaller firms.

We respectfully recommend the following in order to provide a fairer and more gradual approach:

First, we recommend a gradual elimination of the current 2% monthly transaction fee calculation formula, which could be phased in over a multi-year period. Phrased another way, we support a gradual increase in the calculation of monthly transaction fees payable to the NYSE which would allow member firms like SGES to adjust our business plans and meet with clients to discuss these cost increases and evaluate alternatives. It would also allow us to cope with coming market structure changes and competitive forces, and evolve our business model accordingly.

Second, the phase-in of such new pricing mechanics should also contain a "maximum yearly increase" clause, limiting the absolute "year-over-year" dollar percentage increase of any member firm. For example if the maximum yearly dollar percentage increase was 100% per year, SGES would pay the Exchange $258,000 in transaction fees in 2007 (double the current annual fee of $129,000) which would impact SGES' profitability significantly, but would allow us to remain in business; and would provide substantially more revenue to the NYSE.

Third, the first phase of the new transaction fee pricing should be effective January 1, 2007, which would allow all member firms, and our clients, to plan their yearly operating budgets accordingly.

Last, we recommend that there be NO maximum monthly payment cap. All member firms would have to pay transaction fees for incremental volume, eliminating the unfair advantage of "free incremental volume" over a fixed cap and providing a level playing field.

SGES believes that by offering clients and the investing public a choice of firms to execute through, the clients and investors benefit. SGES, through its floor operation and Dot service, provides valuable execution services to our clients. We provide these services under the strictest of professional standards, with reliable best execution performance a foremost priority and as a good corporate citizen of the NYSE membership and broader broker dealer community. We feel strongly that the NYSE proposal is unfair, unreasonable, anti-competitive and poorly-timed. We respectfully request that the SEC reject the proposal as submitted and to require the NYSE to put forth a more reasonable multi-year plan that gradually puts into place an equitable pricing model, does not disadvantage its smaller members, does not provide undue advantage to it's larger members and provides a reasonable notice period.

Respectfully submitted,

John Lucchese
Chief Executive Officer
SunGard Global Execution Services
55 Broadway
New York, NY 10006

John Lucchese CEO SunGard Global Execution Services LLC 55 Broadway New York, NY 10006 Tel 212.566.1600 Mobile 914.262.5589 Fax 212-344-8893


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