[Federal Register: August 3, 2007 (Volume 72, Number 149)]
[Notices]
[Page 43312-43314]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03au07-112]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56166; File No. SR-Phlx-2007-52]
Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.;
Notice of Filing and Order Granting Accelerated Approval of Proposed
Rule Change Relating to Transaction Charges Applicable to Linkage ``P''
and ``P/A'' Orders
July 30, 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 July 19, 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 substantially prepared by the Exchange.
This order provides notice of the proposed rule change and approves the
proposed rule change on an accelerated basis.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Phlx proposes to extend, for a one-year period, a pilot
relating to transaction fees applicable to the execution of Principal
Acting as Agent
[[Page 43313]]
Orders (``P/A Orders'') \3\ and Principal Orders (``P Orders'') \4\
sent to the Exchange via the Intermarket Option Linkage (``Linkage'')
under the Plan for the Purpose of Creating and Operating an Intermarket
Option Linkage (the ``Plan'').\5\ The Exchange proposes to extend the
pilot through July 31, 2008. The text of the proposed rule change is
available at the Exchange, the Commission's Public Reference Room, and
http://www.phlx.com.
---------------------------------------------------------------------------
\3\ A P/A Order is an order for the principal account of a
specialist reflecting the terms of a related unexecuted Public
Customer order for which the specialist is acting as agent. See
Exchange Rule 1083(k)(i).
\4\ A P Order is an order for the principal account of an
Eligible Market Maker and is not a P/A Order. See Exchange Rule
1083(k)(ii).
\5\ See Securities Exchange Act Release Nos. 44482 (June 27,
2001), 66 FR 35470 (July 5, 2001) (amendment to Plan to conform the
Plan to the requirements of Securities Exchange Act Rule 11Ac1-7);
43573 (November 16, 2000), 65 FR 70851 (November 28, 2000) (order
approving an amendment to the Plan to add Phlx as a Participant);
and 43086 (July 28, 2000), 65 FR 48023 (August 4, 2000) (order
approving the Plan).
---------------------------------------------------------------------------
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 Exchange 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 III 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 extend the current
pilot program for one year, through July 31, 2008.\6\
---------------------------------------------------------------------------
\6\ The Exchange filed a separate proposed rule change to
extend, for a one-year period through July 31, 2008, the Exchange's
current pilot program relating to an option transaction charge
credit of $0.21 per contract for Exchange options specialist units
that incur Phlx option transaction charges when a customer order is
delivered to the limit order book via the Exchange's Options Floor
Broker Management System and is then sent to an away market and
executed via Linkage under the Plan. This separate proposal will be
in effect for the same time period as fees for Linkage P Orders and
P/A Orders. See Securities Exchange Act Release No. 56101 (July 19,
2007), 72 FR 40920 (July 25, 2007) (SR-Phlx-2007-50).
---------------------------------------------------------------------------
The Exchange currently charges $0.25 per option contract for P
Orders sent to the Exchange via Linkage under the Plan. The Exchange
currently charges $0.15 per option contract for P/A Orders.
By extending the current pilot program, the Exchange should remain
competitive with other exchanges that charge fees for P Orders and P/A
Orders.\7\ Consistent with current practice, the Exchange will charge
the clearing member organization of the sender of P Orders and P/A
Orders. Also, consistent with current practice, the Exchange will not
charge for the execution of Satisfaction Orders sent through Linkage.
---------------------------------------------------------------------------
\7\ See Securities Exchange Act Release Nos. 54204 (July 25,
2006), 71 FR 43548 (August 1, 2006) (SR-ISE-2006-38); 54225 (July
27, 2006), 71 FR 44056 (August 3, 2006) (SR-BSE-2006-26); 54272
(August 3, 2006), 71 FR 45865 (August 10, 2006) (SR-CBOE-2006-59);
54230 (July 27, 2006), 71 FR 44757 (August 7, 2006) (SR-NYSEArca-
2006-41).
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that its proposal is consistent with section
6(b) of the Act \8\ in general, and furthers the objectives of section
6(b)(4) of the Act \9\ in particular, in that it is an equitable
allocation of reasonable fees among Exchange members.\10\
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(4).
\10\ The Exchange clarified that Section 6(b)(4) of the Act
requires equitable allocation of reasonable fees among Exchange
members and issuers and other persons using its facilities. See
Telephone conversation between Richard Rudolph, Vice President and
Counsel, Phlx to Ronesha A. Butler, Special Counsel, Division of
Market Regulation, Commission, dated July 27, 2007.
---------------------------------------------------------------------------
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. 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-2007-52 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-2007-52. 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, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of the Exchange. 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-2007-52 and should be
submitted on or before August 24, 2007.
IV. Commission's Findings and Order Granting Accelerated Approval of
the Proposed Rule Change
After careful consideration, the Commission finds that the proposed
rule change is consistent with the requirements of the Act and the
rules and regulations thereunder applicable to a national securities
exchange,\11\ and, in particular, the requirements of section 6(b) of
the Act \12\ and the rules and regulations thereunder. The
[[Page 43314]]
Commission finds that the proposed rule change is consistent with
section 6(b)(4) of the Act,\13\ which requires that the rules of the
Exchange provide for the equitable allocation of reasonable dues, fees,
and other charges among its members and other persons using its
facilities. The Commission believes that the extension of the Linkage
fee pilot until July 31, 2008 will give the Exchange and the Commission
further opportunity to evaluate whether such fees are appropriate.
---------------------------------------------------------------------------
\11\ In approving this rule change, the Commission notes that it
has considered the proposal's impact on efficiency, competition, and
capital formation. See 15 U.S.C. 78c(f).
\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
The Commission also finds good cause for approving the proposed
rule change prior to the 30th day after the date of publication of the
notice of filing thereof in the Federal Register. The Commission
believes that granting accelerated approval of the proposed rule change
will preserve the Exchange's existing pilot program for Linkage fees
without interruption as the Exchange and the Commission continue
considering the appropriateness of Linkage fees. Therefore, the
Commission finds good cause, consistent with section 19(b)(2) of the
Exchange Act,\14\ to approve the proposed rule change on an accelerated
basis.
---------------------------------------------------------------------------
\14\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------
V. Conclusion
It is therefore ordered, pursuant to section 19(b)(2) of the
Act,\15\ that the proposed rule change (SR-Phlx-2007-52), be and it
hereby is, approved on an accelerated basis.
---------------------------------------------------------------------------
\15\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\16\
---------------------------------------------------------------------------
\16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Nancy M. Morris,
Secretary. 6
[FR Doc. E7-15094 Filed 8-2-07; 8:45 am]
BILLING CODE 8010-01-P