Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Order Granting Approval to Proposed Rule Change, and Amendment No. 1 Thereto, Relating to Quoting Obligations, 63375-63376 [E6-18142]

Download as PDF Federal Register / Vol. 71, No. 209 / Monday, October 30, 2006 / Notices requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.7 In particular, the Commission believes that the proposal is consistent with the requirements of Section 6(b)(5) of the Act,8 which requires, among other things, that the rules of a national securities exchange be designed to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transaction in securities; 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 Commission notes that ISE’s proposal should permit EAMs to represent orders of ISE market makers without compromising the Exchange’s ability to surveil their trading activity. Thus the proposal should not impact the Exchange’s execution of its regulatory obligations. In addition, the proposed provision prohibiting an EAM from entering an order solicited from an ISE market maker into the Solicited Order Mechanism and the Price Improvement Mechanism in that ISE market maker’s assigned class would permit those two functionalities to remain mechanisms for exposing solicited transactions to the competition of the marketplace. IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,9 that the proposed rule change (File No. SR–ISE– 2004–17), as amended, is approved. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.10 Nancy M. Morris, Secretary. [FR Doc. E6–18079 Filed 10–27–06; 8:45 am] SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54648; File No. SR–Phlx– 2006–52] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Order Granting Approval to Proposed Rule Change, and Amendment No. 1 Thereto, Relating to Quoting Obligations October 24, 2006. I. Introduction On August 15, 2006, the Philadelphia Stock Exchange, Inc. (‘‘Phlx’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 a proposed rule change to amend Phlx Rule 1014, ‘‘Obligations and Restrictions Applicable to Specialists and Registered Options Traders,’’ by adopting Phlx Rule 1014(b)(ii)(D)(4), which would state that Streaming Quote Traders (‘‘SQTs’’),3 Remote Streaming Quote Traders (‘‘RSQTs’’),4 and SQTs and RSQTs that receive Directed Orders 5 (‘‘DSQTs’’ and ‘‘DRSQTs,’’ respectively) would be deemed not to be assigned in any option series until the time to expiration for such series is less than nine months. Accordingly, the market making obligations described in Phlx Rule 1014(b)(ii)(D) would not apply to SQTs, RSQTs, DSQTs, and DRSQTs respecting series with an expiration of nine months or greater. On September 8, 2006, the Exchange filed Amendment No. 1 to the proposed rule change.6 The proposed rule change, as amended, was published for comment in the Federal Register on September 19, 2006.7 The Commission received no comments regarding the proposal, as amended. This order approves the proposed rule change, as amended. II. Description of the Proposal Currently, SQTs and RSQTs that do not receive Directed Orders in a Streaming Quote Option 8 are BILLING CODE 8011–01–P 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Phlx Rule 1014(b)(ii)(A). 4 See Phlx Rule 1014(b)(ii)(B). 5 See Phlx Rule 1080(l)(i)(A). 6 Amendment No. 1 made a clarifying change to the proposed rule text, as well as two minor technical changes to the purpose section. 7 See Securities Exchange Act Release No. 54429 (September 12, 2006), 71 FR 54864. 8 A Streaming Quote Option is an option in which SQTs may generate and submit option quotations if such SQT is physically present on the Exchange floor, and RSQTs may generate and submit option sroberts on PROD1PC70 with NOTICES 2 17 7 In approving this proposed rule change, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 8 15 U.S.C. 78f(b)(5). 9 15 U.S.C. 78s(b)(2). 10 17 CFR 200.30–3(a)(12). VerDate Aug<31>2005 02:16 Oct 28, 2006 Jkt 211001 PO 00000 Frm 00097 Fmt 4703 Sfmt 4703 63375 responsible to quote continuous, twosided markets in not less than 60% of the series in each Streaming Quote Option in which such SQT or RSQT is assigned.9 A DSQT or DRSQT is responsible to quote continuous, two-sided markets in not less than 99% of the series listed on the Exchange in at least 60% of the options in which such DSQT or DRSQT is assigned.10 Whenever a DSQT or DRSQT enters a quotation in an option in which such DSQT or DRSQT is assigned, such DSQT or DRSQT must maintain continuous quotations for not less than 99% of the series of the option listed on the Exchange until the close of that trading day.11 To reduce the number of quotations submitted by SQTs, RSQTs, DSQTs and DRSQTs, the Phlx proposes to relax the quoting obligations that require quotes to be generated. Specifically, the Exchange proposes, on a six–month pilot basis, to permit SQTs, RSQTs, DSQTs and DRSQTs not to submit streaming quotations in options with a series of more than nine months until expiration, which are known as LEAPS (Long-term Equity Anticipation Securities), by deeming them not to be assigned in any option series until the time to expiration for such series is less than nine months. The effect of this is to relax their quoting obligations, and ultimately the number of quotes they are required to submit, because the quoting obligations in Phlx Rule 1014(b)(ii)(D)(1) apply only to those options in which they are assigned. Specialists, currently responsible to quote continuous, two-sided markets in not less than 99% of the series in each Streaming Quote Option in which such specialist is assigned,12 would still be required to quote LEAPS, so the Exchange would continue to disseminate a two-sided market in LEAPS. The Exchange proposes to effect the proposed rule change, as amended, on a six–month pilot basis, beginning on the date the Commission approves this proposed rule filing. III. Discussion The Commission finds that the proposed rule change, as amended, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national quotations from off the floor of the Exchange, electronically. See Phlx Rule 1080(k). Currently, all options trading on the Exchange are Streaming Quote options. 9 See Phlx Rule 1014(b)(ii)(D)(1). 10 See Phlx Rule 1014(b)(ii)(D)(1). 11 See Phlx Rule 1014(b)(ii)(D)(1). 12 See Phlx Rule 1014(b)(ii)(D)(2). E:\FR\FM\30OCN1.SGM 30OCN1 63376 Federal Register / Vol. 71, No. 209 / Monday, October 30, 2006 / Notices securities exchange.13 In particular, the Commission believes that the proposal, as amended, is consistent with Section 6(b)(5) of the Act,14 which requires 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 Commission believes that the proposal to relax the quoting requirements applicable to SQTs, RSQTs, DSQTs, and DRSQTs in LEAPS should reduce the number of options quotations required to be submitted on the Exchange and, therefore, should help to mitigate the Exchange’s quote message traffic and capacity. In addition, the Commission notes that this proposal is consistent with the approach in current Phlx Rule 1012, Commentary .03, which states that strike price interval, bid/ask differential and continuity rules will not apply to such long term option series until the time to expiration is less than nine months.15 IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,16 that the proposed rule change (SR–Phlx–2006– 52), as amended, is hereby approved on a six month pilot basis beginning on the date of this approval order. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.17 Nancy M. Morris, Secretary. [FR Doc. E6–18142 Filed 10–27–06; 8:45 am] Business Investment Act of 1958, as amended (‘‘the Act’’), in connection with the financing of a small concern, has sought an exemption under Section 312 of the Act and Section 107.730, Financings which Constitute Conflicts of Interest of the Small Business Administration (‘‘SBA’’) Rules and Regulations (13 CFR 107.730). Emergence Capital Partners SBIC, L.P. proposes to provide equity/debt security financing to Genius, Inc., One Waters Park Drive, Suite 200, San Mateo, CA 94403. The financing is contemplated for working capital and general corporate purposes. The financing is brought within the purview of § 107.730(a)(1) of the Regulations because Emergence Capital Partners, L.P. and Emergence Capital Associates, L.P., all Associates of Emergence Capital Partners SBIC, L.P., own more than ten percent of Genius, Inc., and therefore Genius, Inc. is considered an Associate of Emergence Capital Partners SBIC, L.P. as detailed in § 107.50 of the Regulations. Notice is hereby given that any interested person may submit written comments on the transaction to the Associate Administrator for Investment, U.S. Small Business Administration, 409 Third Street, S.W., Washington, DC 20416. 94040. The financing is contemplated for working capital and general corporate purposes. The financing is brought within the purview of § 107.730(a)(1) of the Regulations because Emergence Capital Partners, L.P. and Emergence Capital Associates, L.P., all Associates of Emergence Capital Partners SBIC, L.P., own more than ten percent of Goodmail Systems, Inc., and therefore Goodmail Systems, Inc. is considered an Associate of Emergence Capital Partners SBIC, L.P. as detailed in § 107.50 of the Regulations. Notice is hereby given that any interested person may submit written comments on the transaction to the Associate Administrator for Investment, U.S. Small Business Administration, 409 Third Street, SW., Washington, DC 20416. Dated: October 6, 2006. ´ Jaime Guzman-Fournier, Associate Administrator for Investment. AGENCY: [FR Doc. 06–8964 Filed 10–27–06; 8:45 am] BILLING CODE 8025–01–M BILLING CODE 8011–01–P SMALL BUSINESS ADMINISTRATION SMALL BUSINESS ADMINISTRATION Emergence Capital Partners SBIC, L.P., License No. 09/79–0454; Notice Seeking Exemption Under Section 312 of the Small Business Investment Act, Conflicts of Interest sroberts on PROD1PC70 with NOTICES Notice is hereby given that Emergence Capital Partners SBIC, L.P., 160 Bovet Road, Suite 300, San Mateo, CA 94402, a Federal Licensee under the Small 13 In approving this proposed rule change, as amended, the Commission notes that it has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 14 15 U.S.C. 78f(b)(5). 15 See Securities Exchange Act Release No. 29103 (April 18, 1991), 56 FR 19132 (April 25, 1991) (order approving SR–Phlx–91–18). 16 15 U.S.C. 78s(b)(2). 17 17 CFR 200.30–3(a)(12). 17 17 CFR 200.30–3(a)(12). VerDate Aug<31>2005 02:16 Oct 28, 2006 Jkt 211001 [License No. 09/79–0454] Emergence Capital Partners SBIC, L.P.; Notice Seeking Exemption Under Section 312 of the Small Business Investment Act, Conflicts of Interest Notice is hereby given that Emergence Capital Partners SBIC, L.P., 160 Bovet Road, Suite 300, San Mateo, CA 94402, a Federal Licensee under the Small Business Investment Act of 1958, as amended (‘‘the Act’’), in connection with the financing of a small concern, has sought an exemption under Section 312 of the Act and Section 107.730, Financings which Constitute Conflicts of Interest of the Small Business Administration (‘‘SBA’’) Rules and Regulations (13 CFR 107.730). Emergence Capital Partners SBIC, L.P. proposes to provide equity/debt security financing to Goodmail Systems, Inc., 2465 Latham Street, Mountain View, CA PO 00000 Frm 00098 Fmt 4703 Sfmt 4703 Dated: October 6, 2006. ´ Jaime Guzman-Fournier, Associate Administrator for Investment. [FR Doc. 06–8966 Filed 10–27–06; 8:45 am] BILLING CODE 8025–01–M SMALL BUSINESS ADMINISTRATION [Disaster Declaration # 10648 and # 10649] Alaska Disaster # AK–00006 U.S. Small Business Administration. ACTION: Notice. SUMMARY: This is a notice of an Administrative declaration of a disaster for the State of Alaska dated 10/19/ 2006. Incident: Severe Flooding, Landslides & Mudslides. Incident Period: 8/15/2006 through 8/ 25/2006. Effective Date: 10/19/2006. Physical Loan Application Deadline Date: 12/18/2006. Economic Injury (EIDL) Loan Application Deadline Date: 7/19/2007. ADDRESSES: Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155. FOR FURTHER INFORMATION CONTACT: A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street, SW., Suite 6050, Washington, DC 20416. SUPPLEMENTARY INFORMATION: Notice is hereby given that as a result of the Administrator’s disaster declaration, applications for disaster loans may be filed at the address listed above or other locally announced locations. E:\FR\FM\30OCN1.SGM 30OCN1

Agencies

[Federal Register Volume 71, Number 209 (Monday, October 30, 2006)]
[Notices]
[Pages 63375-63376]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-18142]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54648; File No. SR-Phlx-2006-52]


Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; 
Order Granting Approval to Proposed Rule Change, and Amendment No. 1 
Thereto, Relating to Quoting Obligations

 October 24, 2006.

I. Introduction

    On August 15, 2006, the Philadelphia Stock Exchange, Inc. (``Phlx'' 
or ``Exchange'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to amend Phlx Rule 1014, ``Obligations and 
Restrictions Applicable to Specialists and Registered Options 
Traders,'' by adopting Phlx Rule 1014(b)(ii)(D)(4), which would state 
that Streaming Quote Traders (``SQTs''),\3\ Remote Streaming Quote 
Traders (``RSQTs''),\4\ and SQTs and RSQTs that receive Directed Orders 
\5\ (``DSQTs'' and ``DRSQTs,'' respectively) would be deemed not to be 
assigned in any option series until the time to expiration for such 
series is less than nine months. Accordingly, the market making 
obligations described in Phlx Rule 1014(b)(ii)(D) would not apply to 
SQTs, RSQTs, DSQTs, and DRSQTs respecting series with an expiration of 
nine months or greater. On September 8, 2006, the Exchange filed 
Amendment No. 1 to the proposed rule change.\6\ The proposed rule 
change, as amended, was published for comment in the Federal Register 
on September 19, 2006.\7\ The Commission received no comments regarding 
the proposal, as amended. This order approves the proposed rule change, 
as amended.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Phlx Rule 1014(b)(ii)(A).
    \4\ See Phlx Rule 1014(b)(ii)(B).
    \5\ See Phlx Rule 1080(l)(i)(A).
    \6\ Amendment No. 1 made a clarifying change to the proposed 
rule text, as well as two minor technical changes to the purpose 
section.
    \7\ See Securities Exchange Act Release No. 54429 (September 12, 
2006), 71 FR 54864.
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II. Description of the Proposal

    Currently, SQTs and RSQTs that do not receive Directed Orders in a 
Streaming Quote Option \8\ are responsible to quote continuous, two-
sided markets in not less than 60% of the series in each Streaming 
Quote Option in which such SQT or RSQT is assigned.\9\
---------------------------------------------------------------------------

    \8\ A Streaming Quote Option is an option in which SQTs may 
generate and submit option quotations if such SQT is physically 
present on the Exchange floor, and RSQTs may generate and submit 
option quotations from off the floor of the Exchange, 
electronically. See Phlx Rule 1080(k). Currently, all options 
trading on the Exchange are Streaming Quote options.
    \9\ See Phlx Rule 1014(b)(ii)(D)(1).
---------------------------------------------------------------------------

    A DSQT or DRSQT is responsible to quote continuous, two-sided 
markets in not less than 99% of the series listed on the Exchange in at 
least 60% of the options in which such DSQT or DRSQT is assigned.\10\ 
Whenever a DSQT or DRSQT enters a quotation in an option in which such 
DSQT or DRSQT is assigned, such DSQT or DRSQT must maintain continuous 
quotations for not less than 99% of the series of the option listed on 
the Exchange until the close of that trading day.\11\
---------------------------------------------------------------------------

    \10\ See Phlx Rule 1014(b)(ii)(D)(1).
    \11\ See Phlx Rule 1014(b)(ii)(D)(1).
---------------------------------------------------------------------------

    To reduce the number of quotations submitted by SQTs, RSQTs, DSQTs 
and DRSQTs, the Phlx proposes to relax the quoting obligations that 
require quotes to be generated. Specifically, the Exchange proposes, on 
a six-month pilot basis, to permit SQTs, RSQTs, DSQTs and DRSQTs not to 
submit streaming quotations in options with a series of more than nine 
months until expiration, which are known as LEAPS (Long-term Equity 
Anticipation Securities), by deeming them not to be assigned in any 
option series until the time to expiration for such series is less than 
nine months. The effect of this is to relax their quoting obligations, 
and ultimately the number of quotes they are required to submit, 
because the quoting obligations in Phlx Rule 1014(b)(ii)(D)(1) apply 
only to those options in which they are assigned.
    Specialists, currently responsible to quote continuous, two-sided 
markets in not less than 99% of the series in each Streaming Quote 
Option in which such specialist is assigned,\12\ would still be 
required to quote LEAPS, so the Exchange would continue to disseminate 
a two-sided market in LEAPS.
---------------------------------------------------------------------------

    \12\ See Phlx Rule 1014(b)(ii)(D)(2).
---------------------------------------------------------------------------

    The Exchange proposes to effect the proposed rule change, as 
amended, on a six-month pilot basis, beginning on the date the 
Commission approves this proposed rule filing.

III. Discussion

    The Commission finds that the proposed rule change, as amended, is 
consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national

[[Page 63376]]

securities exchange.\13\ In particular, the Commission believes that 
the proposal, as amended, is consistent with Section 6(b)(5) of the 
Act,\14\ which requires 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.
---------------------------------------------------------------------------

    \13\ In approving this proposed rule change, as amended, the 
Commission notes that it has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
    \14\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission believes that the proposal to relax the quoting 
requirements applicable to SQTs, RSQTs, DSQTs, and DRSQTs in LEAPS 
should reduce the number of options quotations required to be submitted 
on the Exchange and, therefore, should help to mitigate the Exchange's 
quote message traffic and capacity. In addition, the Commission notes 
that this proposal is consistent with the approach in current Phlx Rule 
1012, Commentary .03, which states that strike price interval, bid/ask 
differential and continuity rules will not apply to such long term 
option series until the time to expiration is less than nine 
months.\15\
---------------------------------------------------------------------------

    \15\ See Securities Exchange Act Release No. 29103 (April 18, 
1991), 56 FR 19132 (April 25, 1991) (order approving SR-Phlx-91-18).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\16\ that the proposed rule change (SR-Phlx-2006-52), as amended, 
is hereby approved on a six month pilot basis beginning on the date of 
this approval order.
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    \16\ 15 U.S.C. 78s(b)(2).
    \17\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E6-18142 Filed 10-27-06; 8:45 am]
BILLING CODE 8011-01-P