[Federal Register: April 2, 2007 (Volume 72, Number 62)]
[Notices]
[Page 15731-15732]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02ap07-115]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55539; File Nos. SR-Amex-2007-21; SR-BSE-2007-07; SR-
CBOE-2007-13; SR-ISE-2007-12; SR-NYSEArca-2007-28; SR-Phlx-2007-21]
Self-Regulatory Organizations; American Stock Exchange LLC and
Chicago Board Options Exchange, Incorporated: Notice of Filing and
Order Granting Accelerated Approval to Proposed Rule Changes; Boston
Stock Exchange, Inc.; International Securities Exchange, LLC; NYSE
Arca, Inc.; and Philadelphia Stock Exchange, Inc.: Notice of Filing and
Order Granting Accelerated Approval to a Proposed Rule Change, as
Amended, Relating to Linkage Orders
March 27, 2007.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on February 16, 2007, February 20, 2007, February 13, 2007, February 6,
2007, March 14, 2007, and March 14, 2007, the American Stock Exchange
LLC (``Amex''), the Boston Stock Exchange, Inc. (``BSE''), the Chicago
Board Options Exchange, Incorporated (``CBOE''), the International
Securities Exchange, LLC (``ISE''), NYSE Arca, Inc. (``NYSE Arca''),
and the Philadelphia Stock Exchange, Inc. (``Phlx'') (each, an
``Exchange'' and, collectively, the ``Exchanges''), respectively, filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule changes as described in Items I and II below. On March
12, 2007, March 13, 2007, March 19, 2007, and March 20, 2007, BSE, ISE,
NYSE Arca, and Phlx, respectively, filed Amendment No. 1 to their
proposed rule changes.\3\ On March 21, 2007, Phlx filed Amendment No. 2
to its proposed rule change.\4\ The Commission is publishing this
notice to solicit comments on the proposed rule changes, as amended,
from interested persons and is approving the proposed rule changes, as
amended, on an accelerated basis.
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\1\ 15 U.S.C. 78s(b)(l).
\2\ 17 CFR 240. 19b-4.
\3\ Amendment No. 1 effected technical corrections to the
proposed rule texts.
\4\ Amendment No. 2 effected a technical correction to the
proposed rule text.
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I. Self-Regulatory Organizations' Statement of the Terms of Substance
of the Proposed Rule Changes
The Exchanges propose to amend their respective rules pertaining to
the Intermarket Options Linkage (``Linkage'') to conform such rules to
Joint Amendment No. 22 \5\ of the Plan for the Purpose of Creating and
Operating an Intermarket Option Linkage (``Linkage Plan'').\6\ The text
of the proposed rule changes are available at the Exchanges' Web
sites,\7\ the Exchanges' principal offices, and at the Commission's
Public Reference Room.
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\5\ See Securities Exchange Act Release No. 55436 (March 8,
2007), 72 FR 12639 (March, 16, 2007) (File No. 4-429).
\6\ On July 28, 2000, the Commission approved a national market
system plan for the purpose of creating and operating the Linkage
proposed by Amex, CBOE, and ISE. See Securities Exchange Act Release
No. 43086 (July 28, 2000), 65 FR 48023 (August 4, 2000).
Subsequently, Phlx, Pacific Exchange, Inc. (n/k/a NYSE Arca, Inc.),
and BSE joined the Linkage Plan. See Securities Exchange Act Release
Nos. 43573 (November 16, 2000), 65 FR 70851 (November 28, 2000);
43574 (November 16, 2000), 65 FR 70850 (November 28, 2000); and
49198 (February 5, 2004), 69 FR 7029 (February 12, 2004).
\7\ See http://www.amex.com, http://www.bostonstock.com, http://www.cboe.com, http://www.iseoptions.com, http://www.nyse.com, and
http://www.phlx.com.
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II. Self-Regulatory Organizations' Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Changes
In its filing with the Commission, each Exchange included
statements concerning the purpose of, and basis for, its 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 III below. The Exchanges have prepared summaries, set
forth in Sections A, B, and C below, of the most significant aspects of
such statements.
A. Self-Regulatory Organizations' Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Changes
1. Purpose
The Exchanges propose to reduce certain ``turn-around'' times in
the Linkage to 5 seconds. Specifically, if a member \8\ of an Exchange
does not receive a response to its Linkage Order \9\ within 5 seconds,
that member would be able to reject any response purporting to be an
execution received thereafter. The member would also be able to trade
[[Page 15732]]
through the Exchange that failed to respond within 5 seconds.
Similarly, if a member of one Exchange responds to a Linkage Order more
than 5 seconds after receiving that order, and the Exchange that sent
the Linkage Order cancels such response, the member would be required
to cancel any purported trade resulting from that order. The Exchanges
state that, as they have become more automated, experience with Linkage
indicates that reducing the turn-around time to 5 seconds is expected
to facilitate speedy executions of orders while not adversely affecting
the ability of members to make markets on their Exchanges. The
Exchanges submitted the proposed rule changes in conjunction with Joint
Amendment No. 22 to the Linkage Plan.\10\
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\8\ The term ``member,'' as used herein, includes NYSE Arca OTP
Holders and OTP Firms and Boston Options Exchange (``BOX'') Options
Participants. See NYSE Arca Rules 1.1(q) and 1.1(r) and Chapter I,
Sec. 1(a)(40) of BOX Rules, respectively.
\9\ See Section 2(16) of the Linkage Plan. For the purposes of
these proposed rule changes only, references to ``Linkage Orders''
herein pertain to Principal Acting as Agent (``P/A'') Orders and
Principal Orders. See Section 2(16)(a) and (b) of the Linkage Plan,
respectively, for definitions of ``P/A Order'' and ``Principal
Order.''
\10\ 10 Joint Amendment No. 22 to the Linkage Plan became
summarily effective for a period not to exceed 120 days on March 8,
2007. See supra note 5.
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2. Statutory Basis
The Exchanges believe the proposed rule changes are consistent with
the Act and the rules and regulations under the Act applicable to
national securities exchanges and, in particular, the requirements of
Section 6(b) of the Act.\11\ Specifically, the Exchanges believe the
proposed rule changes are consistent with the requirements of Section
6(b)(5) of the Act \12\ that the rules of an exchange be designed to
prevent fraudulent and manipulative acts, 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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\11\ 11 15 U.S.C. 78f(b).
\12\ 2 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organizations' Statement on Burden on Competition
The Exchanges believe that the proposed rule changes would impose
no burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.
C. Self-Regulatory Organizations' Statement on Comments on the Proposed
Rule Changes Received From Members, Participants or Others
The Exchanges have neither solicited nor received comments on these
proposals.
III. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
changes are 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 Numbers SR-Amex-2007-21; SR-BSE-2007-07; SR-CBOE-2007-13; SR-ISE-
2007-12; SR-NYSEArca-2007-28; SR-Phlx-2007-21 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 Numbers SR-Amex-2007-21; SR-
BSE-2007-07; SR-CBOE-2007-13; SR-ISE-2007-12; SR-NYSEArca-2007-28; SR-
Phlx-2007-21. These file numbers 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 submissions, all subsequent
amendments, all written statements with respect to the proposed rule
changes that are filed with the Commission, and all written
communications relating to the proposed rule changes 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 filings also will be available for
inspection and copying at the principal offices of the Exchanges. 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 Numbers SR-Amex-2007-21; SR-BSE-2007-
07; SR-CBOE-2007-13; SR-ISE-2007-12; SR-NYSEArca-2007-28; SR-Phlx-2007-
21 and should be submitted on or before April 23, 2007.
IV. Commission's Findings and Order Granting Accelerated Approval of
Proposed Rule Changes
After careful consideration, the Commission finds that the proposed
rule changes, as amended, are consistent with the requirements of the
Act and the rules and regulations thereunder, applicable to national
securities exchanges.\13\ In particular, the Commission finds that the
proposals are consistent with the provisions of Section 6(b)(5) of the
Act \14\ in that they are 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. The Commission believes
that reducing the time required by an Exchange to respond to a Linkage
Order and reducing the amount of time a member sending a Linkage Order
must wait before trading through a nonresponsive Exchange should
facilitate the more timely execution of orders across the Exchanges.
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\13\ In approving this proposal, the Commission has considered
its impact on efficiency, competition, and capital formation. See
U.S.C. 78c(f).
\14\ 15 U.S.C. 78f(b)(5).
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The Commission also finds good cause, pursuant to Section 19(b)(2)
of the Act \15\ for approving the proposal prior to the thirtieth day
after the date of publication of the notice of the filing thereof in
the Federal Register. Granting accelerated approval would facilitate
the implementation of these changes in conjunction with the Joint
Amendment No. 22 to the Linkage Plan.\16\
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\15\ 15 U.S.C. 78s(b)(2).
\16\ See supra note 10.
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V. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule changes (SR-Amex-2007-21 and SR-CBOE-2007-13)
and proposed rule changes (SR-BSE-2007-07; SR-ISE-2007-12; SR-NYSEArca-
2007-28; and SR-Phlx-2007-21), as amended, are hereby approved on an
accelerated basis.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-5967 Filed 3-30-07; 8:45 am]
BILLING CODE 8010-01-P