Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing of a Proposed Rule Change and Amendment No. 1 Thereto Relating to the Application of Certain Violations of the Minor Rule Violation Fine Plan to Registered Options Traders, Supplemental Registered Options Traders, and Remote Registered Options Traders, 48566-48567 [E6-13728]

Download as PDF 48566 Federal Register / Vol. 71, No. 161 / Monday, August 21, 2006 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54317; File No. SR–Amex– 2006–70] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing of a Proposed Rule Change and Amendment No. 1 Thereto Relating to the Application of Certain Violations of the Minor Rule Violation Fine Plan to Registered Options Traders, Supplemental Registered Options Traders, and Remote Registered Options Traders August 15, 2006. 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 31, 2006, the American Stock Exchange LLC (‘‘Amex’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which items have been prepared by Amex. On August 14, 2006, the Exchange filed Amendment No. 1 to the proposed rule change.3 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Amex Rule 590, which codifies the Exchange’s Minor Rule Violation Fine Plan, to include additional violations of certain rules applicable to Registered Options Traders (‘‘ROTs’’), Supplemental Registered Options Traders (‘‘SROTs’’), and Remote Registered Options Traders (‘‘RROTs’’). The text of the proposed rule change is available on Amex’s Web site at http://www.amex.com, at Amex’s principal office, and at the Commission’s Public Reference Room. 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 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 In Amendment No. 1, Amex provided a specific paragraph citation for the violation of Rule 958— ANTE (relating to the restriction on ROTs quoting outside their assigned option class), modified the description of this particular violation and similar violations under the SROT and RROT rules, and corrected an omission in the original proposed rule text. concerning the purpose of, and basis for, the proposed rule change, as amended, and discussed any comments it received on the proposal. The text of these statements may be examined at the places specified in Item IV 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 Exchange proposes to amend Amex Rule 590, the Minor Rule Violation Fine Plan, to include the violations of certain rules applicable to ROTs, SROTs, and RROTs. The Exchange’s Minor Rule Violation Fine Plan provides a simplified procedure for the resolution of minor rule violations. Codified in Amex Rule 590, the Minor Rule Violation Fine Plan has three distinct sections: Part 1 (‘‘General Rule Violations’’), which covers more substantive matters that, nonetheless, are deemed ‘‘minor’’ by the Commission and Amex; Part 2 (‘‘Floor Decorum’’), which covers Floor Decorum and operational matters; and Part 3 (‘‘Reporting Violations’’), which covers the late submission of routine reports. Part I of Rule 590 paragraph (g) applies to members, member organizations, approved persons, or employees of members or member organizations. In this regard, the Exchange proposes to amend Part 1 of Rule 590 to include additional violations of certain rules applicable to ROTs, SROTs, and RROTs. The proposal includes the addition of the failure to comply with ROT, SROT, and RROT quoting requirements, pursuant to Rules 958–ANTE (h)(iii), 993–ANTE (c)(ii), and 994–ANTE (c)(iv).4 Rule 958–ANTE (h)(iii) provides that if a ROT transacted 20% or more of his or her contract volume electronically, and not through open outcry, during any calendar quarter, then for the next quarter he or she would have an electronic quoting obligation. This analysis is performed separately for each ROT’s assigned option classes. The required percentage varies from 20% to 1 15 hsrobinson on PROD1PC72 with NOTICES 2 17 VerDate Aug<31>2005 17:53 Aug 18, 2006 Jkt 208001 4 The Exchange’s SROT and RROT programs were recently approved by the Commission on April 12, 2006 and April 13, 2006, respectively. See Securities Exchange Act Release No. 53635 (April 12, 2006), 71 FR 20144 (April 19, 2006) (order approving the SROT program); Securities Exchange Act Release No. 53652 (April 13, 2006), 71 FR 20422 (April 20, 2006) (order approving the RROT program). PO 00000 Frm 00038 Fmt 4703 Sfmt 4703 60% depending on the contract volume executed electronically on the Amex, in that option class, by all Amex market participants. Rules 993–ANTE (c)(ii) and 994–ANTE (c)(iv) require SROTs and RROTs to provide continuous twosided quotations in accordance with Rule 958–ANTE (c), in at least 60% of the series of their assigned classes. Furthermore, the Exchange proposes to include as a violation, the restriction on quoting outside assigned classes, as set forth in Rule 958–ANTE (a), Commentary .03 to Rule 993–ANTE, and 994–ANTE (c)(iii). Commentary .03 to Rule 993–ANTE provides that a SROT may act in a market-making capacity only in the option classes to which it is assigned, while Rule 994– ANTE (c)(iii) states that a RROT may not enter quotations electronically from outside the trading crowd in options classes in which it is not assigned as an RROT. 2. Statutory Basis The Exchange believes that the proposed rule change, as amended, is consistent with Section 6 of the Act 5 in general and furthers the objectives of Section 6(b)(5) 6 in particular in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and a national market system. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that proposed rule change would 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 solicited or received with respect to the proposed rule change. 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 5 15 6 15 E:\FR\FM\21AUN1.SGM U.S.C. 78f(b). U.S.C. 78f(b)(5). 21AUN1 Federal Register / Vol. 71, No. 161 / Monday, August 21, 2006 / Notices longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the Exchange consents, the Commission will: (A) By order approve such proposed rule change, or (B) Institute proceedings to determine whether the proposed rule change should be disapproved. be submitted on or before September 11, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.7 Nancy M. Morris, Secretary. [FR Doc. E6–13728 Filed 8–18–06; 8:45 am] BILLING CODE 8010–01–P IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments hsrobinson on PROD1PC72 with NOTICES • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–Amex–2006–70 on the subject line. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54315; File No. SR–ISE– 2006–43] Self-Regulatory Organizations; International Securities Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto Relating to Fee Changes August 14, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the Paper Comments ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on July 25, • Send paper comments in triplicate 2006, the International Securities to Nancy M. Morris, Secretary, Exchange, Inc. (‘‘ISE’’ or ‘‘Exchange’’) Securities and Exchange Commission, filed with the Securities and Exchange 100 F Street, NE., Washington, DC Commission (‘‘Commission’’) the 20549–1090. proposed rule change as described in All submissions should refer to File Items I, II, and III below, which Items Number SR–Amex–2006–70. This file have been prepared by the ISE. On number should be included on the subject line if e-mail is used. To help the August 10, 2006, ISE filed Amendment No. 1 to the proposed rule change.3 The Commission process and review your ISE has designated this proposal as one comments more efficiently, please use only one method. The Commission will establishing or changing a due, fee, or post all comments on the Commission’s other charge imposed by the ISE under Section 19(b)(3)(A)(ii) of the Act,4 and Internet Web site (http://www.sec.gov/ Rule 19b–4(f)(2) thereunder,5 which rules/sro.shtml). Copies of the renders the proposal effective upon submission, all subsequent filing with the Commission. The amendments, all written statements Commission is publishing this notice to with respect to the proposed rule solicit comments on the proposed rule change that are filed with the change, as amended, from interested Commission, and all written persons. communications relating to the proposed rule change between the I. Self-Regulatory Organization’s Commission and any person, other than Statement of the Terms of Substance of those that may be withheld from the the Proposed Rule Change public in accordance with the The ISE is proposing to amend its provisions of 5 U.S.C. 552, will be Schedule of Fees to establish fees for available for inspection and copying in transactions in options on nine the Commission’s Public Reference Room. Copies of such filing also will be 7 17 CFR 200.30–3(a)(12). available for inspection and copying at 1 15 U.S.C. 78s(b)(1). the principal office of Amex. All 2 17 CFR 240.19b–4. comments received will be posted 3 Amendment No. 1 revised the rule text without change; the Commission does contained in Exhibit 5 to conform it to the not edit personal identifying discussion contained in the Purpose section, which explains that a ten (10) cent per contract surcharge information from submissions. You applies only to IWB, IWD, XLV, XLU, and XLK and should submit only information that you wish to make available publicly. All not to all of the Premium Products that are the subject of this filing. submissions should refer to File 4 15 U.S.C. 78s(b)(3)(A)(ii). Number SR–Amex–2006–70 and should 5 17 CFR 240.19b–4(f)(2). VerDate Aug<31>2005 17:53 Aug 18, 2006 Jkt 208001 PO 00000 Frm 00039 Fmt 4703 Sfmt 4703 48567 Premium Products.6 The text of the proposed rule change, as amended, is available on the ISE’s Web site (http:// www.iseoptions.com/legal/ proposed_rule_changes.asp), at the principal office of the ISE, and at the Commission’s Public Reference Room. 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 ISE 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 IV below. The ISE 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 Exchange is proposing to amend its Schedule of Fees to establish fees for transactions in options on the following nine Premium Products: PowerShares Water Resources Portfolio (‘‘PHO’’),7 SPDR Homebuilders ETF (‘‘XHB’’),8 iShares FTSE/Xinhua China 25 Index Fund (‘‘FXI’’), iShares Dow Jones Select 6 ‘‘Premium Products’’ is defined in the ISE’s Schedule of Fees as the products enumerated therein. 7 PowerSharesTM and PHOTM are trademarks of PowerShares Capital Management LLC (‘‘PowerShares’’). The Palisades Water Index is a trademark of Hydrogen Ventures and has been licensed for use for certain purposes by PowerShares. All other trademarks and service marks are the property of their respective owners. The PHO is not sponsored, endorsed, sold or promoted by Hydrogen Ventures, and Hydrogen Ventures makes no representation regarding the advisability of investing in PHO. Hydrogen Ventures and PowerShares have not licensed or authorized ISE to: (i) Engage in the creation, listing, provision of a market for trading, marketing, and promotion of options on PHO; or (ii) use and refer to any of their trademarks or service marks in connection with the listing, provision of a market for trading, marketing, and promotion of options on PHO or with making disclosures concerning options on PHO under any applicable Federal or state laws, rules or regulations. Hydrogen Ventures and PowerShares do not sponsor, endorse, or promote such activity by ISE and are not affiliated in any manner with ISE. 8 ‘‘Standard & Poor’s,’’ ‘‘S&P,’’ ‘‘S&P 500,’’ ‘‘Standard & Poor’s 500’’ ‘‘Standard & Poor’s Depositary Receipts,’’ ‘‘SPDR,’’ are trademarks of The McGraw-Hill Companies, Inc. (‘‘McGrawHill’’), and have been licensed for use by State Street Bank and Trust in connection with the listing and trading of XHB on the American Stock Exchange. XHB is not sponsored, sold or endorsed by Standard & Poor’s, (‘‘S&P’’), a division of E:\FR\FM\21AUN1.SGM Continued 21AUN1

Agencies

[Federal Register Volume 71, Number 161 (Monday, August 21, 2006)]
[Notices]
[Pages 48566-48567]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-13728]



[[Page 48566]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54317; File No. SR-Amex-2006-70]


Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing of a Proposed Rule Change and Amendment No. 1 Thereto 
Relating to the Application of Certain Violations of the Minor Rule 
Violation Fine Plan to Registered Options Traders, Supplemental 
Registered Options Traders, and Remote Registered Options Traders

August 15, 2006.
    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 31, 2006, the American Stock Exchange LLC (``Amex'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which items have been prepared by Amex. On August 14, 
2006, the Exchange filed Amendment No. 1 to the proposed rule 
change.\3\ The Commission is publishing this notice to solicit comments 
on the proposed rule change, as amended, from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ In Amendment No. 1, Amex provided a specific paragraph 
citation for the violation of Rule 958--ANTE (relating to the 
restriction on ROTs quoting outside their assigned option class), 
modified the description of this particular violation and similar 
violations under the SROT and RROT rules, and corrected an omission 
in the original proposed rule text.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Amex Rule 590, which codifies the 
Exchange's Minor Rule Violation Fine Plan, to include additional 
violations of certain rules applicable to Registered Options Traders 
(``ROTs''), Supplemental Registered Options Traders (``SROTs''), and 
Remote Registered Options Traders (``RROTs'').
    The text of the proposed rule change is available on Amex's Web 
site at http://www.amex.com, at Amex's principal office, and at the 
Commission's Public Reference Room.

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, as 
amended, and discussed any comments it received on the proposal. The 
text of these statements may be examined at the places specified in 
Item IV 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 Exchange proposes to amend Amex Rule 590, the Minor Rule 
Violation Fine Plan, to include the violations of certain rules 
applicable to ROTs, SROTs, and RROTs.
    The Exchange's Minor Rule Violation Fine Plan provides a simplified 
procedure for the resolution of minor rule violations. Codified in Amex 
Rule 590, the Minor Rule Violation Fine Plan has three distinct 
sections: Part 1 (``General Rule Violations''), which covers more 
substantive matters that, nonetheless, are deemed ``minor'' by the 
Commission and Amex; Part 2 (``Floor Decorum''), which covers Floor 
Decorum and operational matters; and Part 3 (``Reporting Violations''), 
which covers the late submission of routine reports.
    Part I of Rule 590 paragraph (g) applies to members, member 
organizations, approved persons, or employees of members or member 
organizations. In this regard, the Exchange proposes to amend Part 1 of 
Rule 590 to include additional violations of certain rules applicable 
to ROTs, SROTs, and RROTs. The proposal includes the addition of the 
failure to comply with ROT, SROT, and RROT quoting requirements, 
pursuant to Rules 958-ANTE (h)(iii), 993-ANTE (c)(ii), and 994-ANTE 
(c)(iv).\4\
---------------------------------------------------------------------------

    \4\ The Exchange's SROT and RROT programs were recently approved 
by the Commission on April 12, 2006 and April 13, 2006, 
respectively. See Securities Exchange Act Release No. 53635 (April 
12, 2006), 71 FR 20144 (April 19, 2006) (order approving the SROT 
program); Securities Exchange Act Release No. 53652 (April 13, 
2006), 71 FR 20422 (April 20, 2006) (order approving the RROT 
program).
---------------------------------------------------------------------------

    Rule 958-ANTE (h)(iii) provides that if a ROT transacted 20% or 
more of his or her contract volume electronically, and not through open 
outcry, during any calendar quarter, then for the next quarter he or 
she would have an electronic quoting obligation. This analysis is 
performed separately for each ROT's assigned option classes. The 
required percentage varies from 20% to 60% depending on the contract 
volume executed electronically on the Amex, in that option class, by 
all Amex market participants. Rules 993-ANTE (c)(ii) and 994-ANTE 
(c)(iv) require SROTs and RROTs to provide continuous two-sided 
quotations in accordance with Rule 958-ANTE (c), in at least 60% of the 
series of their assigned classes.
    Furthermore, the Exchange proposes to include as a violation, the 
restriction on quoting outside assigned classes, as set forth in Rule 
958-ANTE (a), Commentary .03 to Rule 993-ANTE, and 994-ANTE (c)(iii). 
Commentary .03 to Rule 993-ANTE provides that a SROT may act in a 
market-making capacity only in the option classes to which it is 
assigned, while Rule 994-ANTE (c)(iii) states that a RROT may not enter 
quotations electronically from outside the trading crowd in options 
classes in which it is not assigned as an RROT.
2. Statutory Basis
    The Exchange believes that the proposed rule change, as amended, is 
consistent with Section 6 of the Act \5\ in general and furthers the 
objectives of Section 6(b)(5) \6\ in particular in that it is designed 
to prevent fraudulent and manipulative acts and practices, to promote 
just and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in facilitating transactions in 
securities, and to remove impediments to and perfect the mechanism of a 
free and open market and a national market system.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that proposed rule change would 
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 solicited or received with respect to the 
proposed rule change.

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

[[Page 48567]]

longer period to be appropriate and publishes its reasons for so 
finding or (ii) as to which the Exchange consents, the Commission will:
    (A) By order approve such proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change 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 
change, as amended, 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-Amex-2006-70 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-Amex-2006-70. 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 such 
filing also will be available for inspection and copying at the 
principal office of Amex. 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-Amex-2006-70 and should be submitted on or before September 11, 
2006.
---------------------------------------------------------------------------

    \7\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
Nancy M. Morris,
Secretary.
[FR Doc. E6-13728 Filed 8-18-06; 8:45 am]
BILLING CODE 8010-01-P