[Federal Register: June 13, 2007 (Volume 72, Number 113)]
[Notices]
[Page 32695-32697]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13jn07-123]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55860; File No. SR-Phlx-2007-41]
Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to the Modification of Phlx Rule 185A
June 5, 2007.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given
that on May 25, 2007, the Philadelphia Stock Exchange, Inc. (``Phlx''
or ``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II, below, which Items have been prepared by the Phlx. The Exchange
filed the proposal as a ``non-controversial'' rule change pursuant to
Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\
which rendered the proposal effective upon filing with the Commission.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Phlx proposes to amend Phlx Rule 185A, which clarified the
entry, routing and other requirements of certain orders on XLE, the
Exchange's electronic equity trading system, prior to March 5, 2007,
the Trading Phase Date,\5\ to make certain provisions of the rule
applicable until the All Stocks Phase Date.\6\ The text of the proposed
rule change is available on Phlx's Web site, http://www.phlx.com, at
Phlx's principal office, and at the Commission's Public Reference Room.
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\5\ The Trading Phase Date was the ``[f]inal date for full
operation of Regulation NMS-compliant trading systems [by exchanges]
that intend[ed] to qualify their quotations for trade-through
protection under Rule 611 [during the roll-out of Regulation NMS].''
See Securities Exchange Act Release No. 55160 (January 24, 2007), 72
FR 4202 (January 30, 2007).
\6\ The All Stocks Phase Date is the date that full industry
compliance with Rules 610 and 611 of Regulation NMS, 17 CFR 242.610
and 611, begins. Currently, the All Stocks Phase Date is scheduled
to be August 20, 2007. See Securities Exchange Act Release No. 55160
(January 24, 2007), 72 FR 4202 (January 30, 2007). However, should
the Commission change the All Stocks Phase Date, the changes to Phlx
Rule 185A adopted in this proposed rule change will remain in effect
until that new date.
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II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Phlx 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. The Phlx has prepared summaries, set forth in Sections
A, B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the proposed rule change is to clarify the
obligation of XLE Participants when submitting certain XLE order types
before the All Stocks Phase Date. Phlx Rule 185A, Orders and Order
Execution--Temporary, was adopted in November 2006, to clarify the
entry, routing and other requirements of certain orders on XLE in the
period before the Trading Phase Date.\7\ Phlx Rule 185A was
subsequently amended twice.\8\ Each amendment addressed the period
before the Trading Phase Date.
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\7\ See Securities Exchange Act Release No. 54760 (November 15,
2006), 71 FR 67687 (November 22, 2006) (SR-Phlx-2006-76).
\8\ See Securities Exchange Act Release Nos. 55044 (January 5,
2007), 72 FR 1361 (January 11, 2007) (SR-Phlx-2006-92) and 54788
(November 20, 2006), 71 FR 68877 (November 28, 2006) (SR-Phlx-2006-
77).
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Phlx Rule 185A clarified the routing of orders from XLE to other
marketplaces,\9\ the entry of Intermarket Sweep Orders and IOC Cross
Orders marked by the XLE Participant entering the order as meeting the
requirement of an intermarket sweep order,\10\ the requirements for
certain IOC Cross Orders marked as Benchmark,\11\ and the requirements
for certain IOC Cross Orders marked as Qualified Continent Trades.\12\
At this time, Phlx proposes to delete the provisions of Phlx Rule 185A
that applied to routing and modify the remaining provisions of the rule
to make them applicable to the period prior to the All Stocks Phase
Date.
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\9\ See Phlx Rule 185A(a).
\10\ See Phlx Rule 185A(b).
\11\ See Phlx Rule 185A(c).
\12\ See Phlx Rule 185A(d).
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Specifically Phlx Rule 185A(a) is being modified to delete
provisions
[[Page 32696]]
regarding routing of orders on XLE since intermarket sweep orders have
been available at all venues to which XLE will route an order since the
Trading Phase Date. In its place, Phlx Rule 185A(a) will define the
term ``All Stocks Phase Date.'' Additionally, Phlx Rule 185A(b)-(d) are
being amended to substitute the term ``All Stocks Phase Date'' for
``Trading Phase Date'' as the provisions of these sections of the rule
will apply until the All Stocks Phase Date. At that time, Phlx will
delete Phlx Rule 185A from its rulebook as it will no longer have any
effect.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \13\ in general, and furthers the objectives of Section
6(b)(5) of the Act \14\ in particular, in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest.
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\13\ 15 U.S.C. 78f(b).
\14\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing rule (i) does not significantly affect the
protection of investors or the public interest; (ii) does not impose
any significant burden on competition; and (iii) by its terms, does not
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate if consistent with
the protection of investors and the public interest, provided that the
Exchange has given the Commission written notice of its intent to file
the proposed rule change at least five business days prior to the date
of filing of the proposed rule change or such shorter time as
designated by the Commission, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \15\ and Rule 19b-
4(f)(6) thereunder.\16\ As required under Rule 19b-4(f)(6)(iii) under
the Act,\17\ Phlx provided the Commission with written notice of its
intent to file the proposed rule change, along with a brief description
and text of the proposed rule change, prior to the date of the filing
of the proposed rule change.
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\15\ 15 U.S.C. 78s(b)(3)(A).
\16\ 17 CFR 240.19b-4(f)(6).
\17\ 17 CFR 240.19b-4(f)(6)(iii).
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A proposed rule change filed under Rule 19b-4(f)(6) under the Act
\18\ normally may not become operative prior to 30 days after the date
of filing. However, Rule 19b-4(f)(6)(iii) under the Act \19\ permits
the Commission to designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has requested that the Commission waive the 30-day operative delay,
which would make the rule change effective and operative upon filing.
In its filing, the Exchange stated its belief that waiver of the
operative delay would be consistent with the protection of investors
and the public interest because the amended temporary rule should
eliminate potential confusion relating to orders on XLE and clarify XLE
Participant obligations when submitting certain order types to the
Exchange.
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\18\ 17 CFR 240.19b-4(f)(6).
\19\ 17 CFR 240.19b-4(f)(6)(iii).
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The Commission believes that waiver of the 30-day operative delay
is consistent with the protection of investors and the public interest
because the proposed rule change clarifies the obligations of XLE
Participants when submitting certain order types to the Exchange before
the All Stocks Phase Date. In particular, the proposal amends the text
of Phlx Rule 185A, which had previously been applicable to the Trading
Phase Date, to reflect the applicability of those provisions which will
remain in effect until the All Stocks Phase Date. Once the All Stocks
Phase Date arrives, the applicable provisions of Phlx Rule 185 will be
operative and the Exchange will no longer need temporary Rule 185A.\20\
Accordingly, consistent with the protection of investors and the public
interest, the Commission designates the proposed rule change to be
operative upon filing with the Commission.\21\
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\20\ As the Exchange has made clear in its filing, it intends to
delete Phlx Rule 185A from its rulebook upon the All Stocks Phase
Date. Given the definitively limited application of the amended rule
and the specified removal date, the Exchange does not intend to file
a separate proposed rule change to remove the rule text from its
rulebook, but rather will remove the rule as specified.
\21\ For the purposes only of waiving the 30-day operative
delay, the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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.\22\
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\22\ See 15 U.S.C. 78s(b)(3)(C).
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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
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
); or Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-Phlx-2007-41 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-Phlx-2007-41. This file
number should be included on the subject line if e-mail 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 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. Copies of the filing
also will be available for inspection and copying at the principal
office of the Phlx. All comments received will be posted without
change; the Commission does
[[Page 32697]]
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 SR-Phlx-2007-41 and should be
submitted on or before July 5, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\23\
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\23\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-11368 Filed 6-12-07; 8:45 am]
BILLING CODE 8010-01-P