[Federal Register: August 21, 2007 (Volume 72, Number 161)]
[Notices]
[Page 46697-46698]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21au07-120]
[[Page 46697]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56249; File No. SR-Phlx-2007-27]
Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.;
Notice of Filing of Proposed Rule Change Relating to the
Standardization of Rules for Equity, Index and ETF Options
August 14, 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 March 21, 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, II,
and III, below, which Items have been substantially prepared by the
Phlx. On July 25, 2007, the Exchange filed Amendment No. 1 to the
proposed rule change. The Commission is publishing this notice to
solicit comments on the proposed rule change, as amended, from
interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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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 1014(c)(i)(A) relating to
quote spread parameters (bid/ask differentials) and Phlx Rule
1014(g)(i)(B) relating to purchase or sale priority for orders of 100
contracts or more, to standardize the rules such that they would apply
equally to options on equities, options on exchange-traded fund
(``ETF'') shares, and index options.
The text of the proposed rule change is available on Phlx's Web
site at (http://www.Phlx.com/exchange/phlx-rule-fil.hlm), at the
Exchange's Office of the Secretary and the Commission's Public
Reference Room.
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 amend the above-
mentioned rules so that they would apply equally to options on
equities, options on ETFs, and index options. Currently, Phlx's rules
concerning bid/ask differentials and split-price priority in open
outcry apply either exclusively to equity and ETF options, or apply
differently to equity and ETF options versus index options. In order to
standardize the applicability of Phlx's rules to all options traded on
Phlx, the following rule changes are proposed:
Bid/Ask Differentials
Currently, Phlx Rule 1014(c)(i)(A) includes only language
concerning equity options. In order to clarify the applicability of the
rule to all options traded on the Exchange, including index options,
and options on ETFs, the proposal would specifically list index options
and options on ETFs in the rule.
Purchase or Sale Priority for Orders of 100 Contracts or More
Phlx Rule 1014(g)(i)(B) currently affords priority in open outcry
to a member that purchases (sells) 50 or more option contracts of a
particular series at a particular price or prices, at the next lower
(higher) price, up to the equivalent number of option contracts of the
same series that he purchased (sold) at the higher (lower) price or
prices. The rule currently applies only to transactions in equity
options (including options overlying ETFs).
The proposed amendment would delete the limitation of applicability
to equity and ETF options from the rule; the rule would therefore apply
to all options traded on the Exchange, including index options.
The Exchange believes that the standardization of these rules
should obviate any potential confusion among customers and Exchange
members concerning their applicability.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \3\ in general, and furthers the objectives of Section
6(b)(5) of the Act \4\ 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,
by adopting standardized rules that apply to all options traded on the
Exchange.
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\3\ 15 U.S.C. 78f(b).
\4\ 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 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
Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which Phlx consents, the Commission shall: (a) By order approve such
proposed rule change, or (b) institute proceedings to determine whether
the proposed rule change should be disapproved.
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-2007-27 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities andExchange Commission, 100 F Street, NE,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-Phlx-2007-27. 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
[[Page 46698]]
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, 100 F Street, NE, Washington, DC 20549, on official
business days between the hours of 10 a.m. and 3 p.m.. 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 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-2007-27 and should be submitted on or before
September 11, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\5\
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\5\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-16392 Filed 8-20-07; 8:45 am]
BILLING CODE 8010-01-P