[Federal Register Volume 72, Number 192 (Thursday, October 4, 2007)]
[Notices]
[Pages 56814-56815]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-19558]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56555; File Nos. SR-Amex-2007-65; SR-BSE-2007-45; SR-
CBOE-2007-64; SR-ISE-2007-44; SR-NYSEArca-2007-65]
Self-Regulatory Organizations; American Stock Exchange LLC;
Boston Stock Exchange, Inc; Chicago Board Options Exchange,
Incorporated and International Securities Exchange, LLC: Notice of
Filing of Proposed Rule Changes Relating to the Definition of a Complex
Trade; NYSE Arca, Inc.: Notice of Filing of Proposed Rule Change and
Amendment No. 1 Thereto Relating to the Definition of a Complex Trade
September 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 June 27, 2007, September 13, 2007, June 12, 2007, June 1, 2007, and
July 6, 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''), and NYSE Arca, Inc. (``NYSE Arca'') (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, II and III below, which Items have
been substantially prepared by the Exchanges. On July 11, 2007, NYSE
Arca filed Amendment No. 1 to its proposed rule change.\3\ The
Commission is publishing this notice to solicit comments on the
proposed rule changes, as amended, from interested persons.
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\1\ 15 U.S.C. 78s(b)(l).
\2\ 17 CFR 240. 19b-4.
\3\ Amendment No. 1 to SR-NYSEArca-2007-65 effected technical
corrections to the proposed rule change.
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I. Self-Regulatory Organizations' Statement of the Terms of Substance
of the Proposed Rule Changes
The Exchanges propose to amend the definition of ``complex trade''
set forth in their respective rules pertaining to the Intermarket
Options Linkage (``Linkage'') to include stock-option trades. The text
of the proposed rule changes is available at the Exchanges' Web
sites,\4\ the Exchanges' principal offices, and at the Commission's
Public Reference Room.
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\4\ See http://www.amex.com, http://www.bostonstock.com, http://www.cboe.com, http://www.ise.com, and http://www.nyse.com.
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II. Self-Regulatory Organizations' Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Changes
In their filings with the Commission, each Exchange included
statements concerning the purpose of, and basis for, their proposed
rule changes and discussed any comments they received on the proposed
rule changes. The text of these statements may be examined at the
places specified in Item IV 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
Under Section 8(c)(iii)(G) of the Plan for the Purpose of Creating
and Operating an Intermarket Option Linkage (``Linkage Plan''),\5\ the
Linkage
[[Page 56815]]
Plan participants (``Participants'') may amend the definition of the
term ``complex trade'' from time to time. The Participants have agreed
to update the definition of ``complex trade'' to extend the associated
trade-through liability exemption to cover certain stock-option trades.
Accordingly, each of the Exchanges has submitted a proposal that would
amend each of the Exchange's definition of ``complex trade,'' set forth
in the Exchange's respective rules pertaining to the Linkage, to
include the execution of a stock option order to buy or sell a stated
number of units of an underlying stock or a security convertible into
the underlying stock (``convertible security'') coupled with the
purchase or sale of option contract(s) on the opposite side of the
market representing either (A) The same number of units of the
underlying stock or convertible security, or (B) the number of units of
the underlying stock or convertible security necessary to create a
delta neutral position, but in no case in a ratio greater than 8 option
contracts per unit of trading of the underlying stock or convertible
security established for that series by the Options Clearing
Corporation.\6\
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\5\ 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).
\6\ The Exchanges propose to amend their respective rules that
define ``complex trade'' for Linkage purposes, namely Amex Rule
940(b)(3), Boston Options Exchange Rule Chapter XII, Section 1(c),
CBOE Rule 6.80(4), ISE Rule 1900(3), and NYSEArca Rule 6.92(a)(4).
The Phlx has filed a proposed rule change with the Commission to
amend its definitions of ``synthetic option'' and ``complex trade''
to conform such definitions with the related ``stock option'' and
``complex trade'' definitions of the Exchanges. See SR-Phlx-2007-40.
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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.\7\ Specifically, the Exchanges believe the
proposed rule changes are consistent with the requirements of Section
6(b)(5) of the Act,\8\ which provides that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices, 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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\7\ 15 U.S.C. 78f(b).
\8\ 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. 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 the self-regulatory organizations consent, the Commission will:
(A) By order approve such proposed rule changes, or
(B) Institute proceedings to determine whether the proposed rule
changes 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
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 [email protected]. Please include
File Numbers SR-Amex-2007-65; SR-BSE-2007-45; SR-CBOE-2007-64; SR-ISE-
2007-44; and SR-NYSEArca-2007-65 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-2007-65; SR-BSE-
2007-45; SR-CBOE-2007-64; SR-ISE-2007-44; and SR-NYSEArca-2007-65.
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, 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 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-2007-65; SR-BSE-2007-
45; SR-CBOE-2007-64; SR-ISE-2007-44; and SR-NYSEArca-2007-65 and should
be submitted on or before October 25, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-19558 Filed 10-3-07; 8:45 am]
BILLING CODE 8011-01-P