[Federal Register Volume 71, Number 149 (Thursday, August 3, 2006)]
[Notices]
[Pages 44070-44071]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-12522]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-54233; File No. SR-Phlx-2006-44]
Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.;
Notice of Filing and Order Granting Accelerated Approval of Proposed
Rule Change To Extend the Linkage Fee Pilot Program
July 27, 2006.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on July 17, 2006, 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 Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons and is approving the
proposal on an accelerated basis for a pilot period through July 31,
2007.
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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 extend, for a one-year period, a pilot
relating to transaction fees applicable to the execution of Principal
Acting as Agent 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, 2007. The text of the proposed
rule change is available on the Phlx's Web site at (http://www.phlx.com), at the Exchange's Office of the Secretary, and at the
Commission's Public Reference Room.
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\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 Phlx
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 Phlx 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 to
the Requirements of Securities Exchange Act Rule 11Ac1-7); 43573
(November 16, 2000), 65 FR 70851 (November 28, 2000) (Notice of Phlx
Joining the Plan); and 43086 (July 28, 2000), 65 FR 48023 (August 4,
2000) (Approval of the Plan).
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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 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 Exchange 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, 2007. 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 and P/A
Orders.\6\
[[Page 44071]]
Consistent with current practice, the Exchange will charge the clearing
member organization of the sender of P and P/A Orders. Also, the
Exchange will not charge for the execution of Satisfaction Orders sent
through Linkage.
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\6\ See Securities Exchange Act Release Nos. 52168 (July 29,
2005), 70 FR 45454 (August 5, 2005) (SR-ISE-2005-32); 52147 (July
28, 2005), 70 FR 44706 (August 3, 2005) (SR-BSE-2005-25); 52151
(July 28, 2005), 70 FR 44713 (August 3, 2005) (SR-PCX-2005-86);
52073 (July 20, 2005), 70 FR 43474 (July 27, 2005) (SR-CBOE-2005-
54). See also Securities Exchange Act Release No. 54064 (June 28,
2006), 71 FR 38438 (July 6, 2006) (SR-CBOE-2006-59).
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2. Statutory Basis
The Exchange believes that the proposal is consistent with Section
6(b) of the Act,\7\ in general, and Section 6(b)(4) of the Act,\8\ in
particular, in that the proposed rule change provides for the equitable
allocation of reasonable dues, fees and other charges among its members
and other persons using its facilities.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes that the proposed rule change does not 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
The Exchange has neither solicited nor received comments on the
proposed rule change.
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 [email protected]. Please include
File Number SR-Phlx-2006-44 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-Phlx-2006-44. 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 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-2006-44 and should be submitted on or before August
24, 2006.
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,\9\ and, in particular, the requirements of Section 6(b) of
the Act \10\ and the rules and regulations thereunder. The Commission
finds that the proposed rule change is consistent with Section 6(b)(4)
of the Act,\11\ 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, 2007 will give the Exchange and the Commission further
opportunity to evaluate whether such fees are appropriate.
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\9\ In approving this proposal, the Commission has considered
the proposed rule's impact on efficiency, competition, and capital
formation. 15 U.S.C. 78c(f).
\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(4).
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The Commission finds good cause, pursuant to Section 19(b)(2) of
the Act,\12\ for approving the proposed rule change prior to the
thirtieth day after publication of notice 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 further considers the appropriateness of Linkage fees.
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\12\ 15 U.S.C. 78s(b)(2).
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V. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\13\ that the proposed rule change (SR-Phlx-2006-44) is hereby
approved on an accelerated basis for a pilot period to expire on July
31, 2007.
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\13\ Id.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. E6-12522 Filed 8-2-06; 8:45 am]
BILLING CODE 8010-01-P