[Federal Register Volume 70, Number 107 (Monday, June 6, 2005)]
[Notices]
[Pages 32853-32854]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-2872]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-51755; File No. 4-208]
Intermarket Trading System; Notice of Filing of the Twenty First
Amendment to the ITS Plan Relating to the Recognition of the Automatic
Generation of Outgoing ITS Commitments
May 27, 2005.
Pursuant to Section 11A of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 11Aa3-2 thereunder,\2\ notice is hereby given
that on April 27, 2005, the Intermarket Trading System Operating
Committee (``ITSOC'') submitted to the Securities and Exchange
Commission (``Commission'') a proposed amendment (``Twenty First
Amendment'') to the restated ITS Plan.\3\ The purpose of the proposed
amendment is to recognize the automatic generation of outgoing ITS
commitments in circumstances where members in the Participants' markets
send such commitments contemporaneously with trading at inferior
prices, disseminating a locking bid/offer in their own market, or a
block trade.
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\1\ 15 U.S.C. 78k-1.
\2\ 17 CFR 240.11Aa3-2.
\3\ The ITS Plan is a National Market System (``NMS'') plan,
which was designed to facilitate intermarket trading in exchange-
listed equity securities based on current quotation information
emanating from the linked markets. See Securities Exchange Act
Release No. 19456 (January 27, 1983), 48 FR 4938 (February 3, 1983).
The ITS Participants include the American Stock Exchange LLC
(``Amex''), the Boston Stock Exchange, Inc. (``BSE''); the Chicago
Board Options Exchange, Inc. (``CBOE''); the Chicago Stock Exchange
(``CHX''), Inc., the Cincinnati Stock Exchange, Inc. (``CSE''), the
National Association of Securities Dealers, Inc. (``NASD''), the New
York Stock Exchange, Inc. (``NYSE''), the Pacific Exchange, Inc.
(``PCX''), and the Philadelphia Stock Exchange, Inc. (``Phlx'')
(``Participants'').
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I. Description of the Proposed Amendment
The ITSOC proposes to amend the restated ITS Plan to recognize the
automatic generation of outgoing ITS commitments in circumstances where
members in the Participants' markets send such commitments
contemporaneously with trading at inferior prices, disseminating a
locking bid/offer in their own market, or a block trade.
The ITSOC proposes to amend the restated ITS Plan to add a new
paragraph (G) to section 6(a)(ii). Proposed new language is italicized.
(G) Description Applicable to Contemporaneous Automatic Formatting and
Sending Commitments
Notwithstanding the descriptions set forth in section 6(a)(ii)(A),
(B), (D) and (F) above, a Participant (and, in the case of the NASD,
ITS/CAES Market Makers) may automatically format and automatically send
a commitment to trade to one or more other Participants, under the
following circumstances: Each such commitment is sent contemporaneously
with: (i) One or more transactions on the market of the sending
Participant that, absent the commitment(s), would be considered an
Exchange trade-through(s) or a third market participating market center
trade-through(s) (both as defined in Exhibit B); (ii) the dissemination
by the sending Participant of a locking bid (offer) (as defined in
Exhibit B); or (iii) a block trade (as defined in Exhibit C). The term
``one or more transactions on the market of the sending Participant''
used in clause (i) in the preceding
[[Page 32854]]
sentence means, in addition to the transaction that would be priced
lower than superior priced bid(s) or higher than superior priced
offer(s) of another Participant(s), those one or more transactions
priced at such superior priced bid(s) or offer(s).
The ITSOC provided the following example that demonstrates the
functioning of clause (i) in subsection G, utilizing the CHX as the
sending Participant:
a. CHX Receives Order: Buy 2000 at-the-market. Member handling
execution of order determines to complete order at 45.56, necessitating
satisfaction of superior priced offers on other Participant markets.
NBBO: N--45.50, 45.53; B--5x2.
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Mkt Bid Offer Size
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B...................................... 45.30 45.53 1x2
T...................................... 45.30 45.54 3x3
N...................................... 45.50 45.55 5x5
X...................................... 45.25 45.59 2x5
P...................................... 45.20 45.60 1x1
M...................................... 45.40 45.65 1x1
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b. CHX Executions: Customer buying/member selling as principal 2000
shares: 200 at 45.53; 300 at 45.54; 500 at 45.55; 1000 at 45.56.
c. CHX Computer Generated Commitments: Member buying to partially
off-set sales on CHX: M to B--Buy--200 at 45.53; M to T--Buy--300 at
45.54; M to N--Buy--500 at 45.55.
A. Governing or Constituent Documents
Not applicable.
B. Implementation of Amendment
The Participants have manifested their approval of the proposed
amendment to the Plan by means of their execution of the proposed
amendments. The proposed amendment would become effective upon the
Commission's approval of the amendment.
C. Development and Implementation Phases
Not applicable.
D. Analysis of Impact on Competition
The Participants believe that the proposed amendment does not
impose any burden on competition.
E. Written Understanding or Agreements relating to Interpretation of,
or Participation in, Plan
Not applicable.
F. Approval by Sponsors in Accordance with Plan
Under section 4(c) of the restated ITS Plan, the requisite approval
of the amendment is achieved by execution of the amendment on behalf of
each ITS Participant and by Commission approval. The amendment is so
executed.
G. Description of Operation of Facility Contemplated by the Proposed
Amendment
Not applicable.
II. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed Plan
amendment 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 [email protected]. Please include
File No. 4-208 on the subject line.
Paper Comments:
Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW.,
Washington, DC 20549-0609.
All submissions should refer to File No. 4-208. 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 Plan amendment that are filed
with the Commission, and all written communications relating to the
proposed Plan amendment 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 such
filing also will be available for inspection and copying at the
principal office of the ITS. 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 No. 4-208 and should be submitted on or before June 27, 2005.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\4\
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\4\ 17 CFR 200.30-3(a)(27).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-2872 Filed 6-3-05; 8:45 am]
BILLING CODE 8010-01-P