[Federal Register Volume 72, Number 242 (Tuesday, December 18, 2007)]
[Notices]
[Page 71729]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-24465]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56938; File No. SR-Phlx-2007-63]
Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.;
Order Granting Approval of a Proposed Rule Change Relating to Short
Interest Reporting
December 10, 2007.
I. Introduction
On August 16, 2007, the Philadelphia Stock Exchange, Inc.
(``Phlx'') filed with the Securities and Exchange Commission
(``Commission'') proposed rule change SR-Phlx-2007-63 pursuant to
Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'').\1\
On September 20, 2007, Phlx amended the proposed rule change.\2\ Notice
of the proposal was published in the Federal Register on October 3,
2007.\3\ No comment letters were received. For the reasons discussed
below, the Commission is granting approval of the proposed rule change.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ Amendment No. 1, which replaced the original proposed rule
change in its entirety, made clarifying changes to the original
proposed rule change.
\3\ Securities Exchange Act Release No. 56541 (September 26,
2007), 72 FR 56427 (October 3, 2007) (Phlx-2007-63).
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II. Description
The proposed rule change conforms Phlx Rule 786 to rule changes
made by other self-regulatory organizations (``SROs'') to implement
uniform changes to the short interest reporting requirements across
SROs.
First, Phlx is making a technical change to the text of Phlx Rule
786, Supplementary Material .01. Supplementary Material .01 provides
that, subject to certain limited exceptions, short positions required
to be reported under the rule are those resulting from short sales as
the term is defined in Rule 200 of Regulation SHO. The term ``short
sale'' is actually defined in Rule 200(a) of Regulation SHO.\4\
Therefore, Phlx is amending the text of Supplementary Material .01 to
reference Regulation SHO Rule 200(a), instead of Rule 200, in order to
eliminate any confusion.
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\4\ 17 CFR 242.200(a).
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Second, Phlx is adding a new section, Supplementary Material .02,
to Phlx Rule 786. The new language adopts exceptions to the short
interest reporting requirement. Phlx is also adding conforming language
relating to the new section to Rule 786, Supplementary Material .01.
Currently, any transaction that is marked ``sell short exempt'' is
exempt from the reporting requirement. Beginning on July 6, 2007, the
``short exempt'' marking requirement was eliminated by the
Commission.\5\ Therefore, beginning on July 6, 2007, all transactions
marked short will be covered by Phlx's reporting requirement. However,
other SROs have modified their short interest reporting rules to
exclude five specific transactions that were previously contained in
the now eliminated Rule 10a-1 under the Act.\6\ The rule change is
designed to conform Phlx's reporting requirement to those of other SROs
and increase uniformity for broker-dealers as they comply with various
rules across SROs, which should reduce costs and increase efficiency
for those broker-dealers.
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\5\ See Securities Exchange Act Release No. 55970 (June 28,
2007), 72 FR 36348 (July 3, 2007).
\6\ See, e.g., Securities Exchange Act Release No. 56300 (August
22, 2007), 72 FR 49342 (August 28, 2007) (NYSEArca-2007-63).
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III. Discussion
Section 6(b)(5) of the Act \7\ requires, among other things, that
the rules of an exchange be 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. The rule change is
designed to conform Phlx's reporting requirement to those of other SROs
and increase uniformity for broker-dealers as they comply with various
rules across SROs, which should reduce costs and increase efficiency
for those broker-dealers. Accordingly, because the rule change will
lead to greater uniformity in SRO rules, the Commission finds that the
rule change meets the requirements of Section 6(b)(5) of the Act
because 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.
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\7\ 15 U.S.C. 78f(b)(5).
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IV. Conclusion
On the basis of the foregoing, the Commission finds that the rule
change is consistent with the requirements of the Act, in particular
Section 6(b) of the Act \8\ and the rules and regulations
thereunder.\9\
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\8\ 15 U.S.C. 78f(b).
\9\ In approving the proposed rule change, the Commission
considered the proposal's impact on efficiency, competition and
capital formation. 15 U.S.C. 78c(f).
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It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule change (File No. SR-Phlx-2007-63) be and hereby
is approved.
For the Commission by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-24465 Filed 12-17-07; 8:45 am]
BILLING CODE 8011-01-P