Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing of Proposed Rule Change Relating to Listing Standards for Basket Linked Notes, 4552-4553 [E7-1506]

Download as PDF 4552 Federal Register / Vol. 72, No. 20 / Wednesday, January 31, 2007 / Notices 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: SECURITIES AND EXCHANGE COMMISSION Electronic Comments Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing of Proposed Rule Change Relating to Listing Standards for Basket Linked Notes • 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–CBOE–2007–07 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. mstockstill on PROD1PC62 with NOTICES All submissions should refer to File Number SR–CBOE–2007–07. 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 the CBOE. 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–CBOE–2007–07 and should be submitted on or before February 21, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.16 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–1509 Filed 1–30–07; 8:45 am] [Release No. 34–55173; File No. SR–Phlx– 2006–85] January 25, 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 December 12, 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, II, and III below, which Items have been prepared by the Phlx. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Phlx proposes to amend Phlx Rule 803—Criteria for Listing—Tier 1, regarding listing standards for Basket Linked Notes (‘‘BLNs’’). The text of the proposed rule change is available on Phlx’s Web site at http://www.phlx.com, at Phlx’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 Phlx 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 Phlx 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 conform Phlx’s listing standards for Basket Linked Notes, specifically Phlx Rule 803(k), to that of other exchanges. Phlx Rule 803 provides listing standards for Basket Linked BILLING CODE 8011–01–P 1 15 16 17 CFR 200.30–3(a)(12). VerDate Aug<31>2005 15:08 Jan 30, 2007 2 17 Jkt 211001 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00076 Fmt 4703 Sfmt 4703 Notes, which are income instruments whose values are linked to the performance of highly capitalized, actively traded common stock. Specifically, BLNs are non-convertible debt of an issuer, whose value is based, at least in part, on the value of another issuer’s common stock or nonconvertible preferred stock. Phlx Rule 803(k) details Phlx’s listing standards for BLNs. Specifically, Phlx Rule 803(k)(3) currently requires, among other things, that securities linked to BLNs either: (i) Have a minimum market capitalization of $3 billion and during the 12 months preceding listing are shown to have traded at least 2.5 million shares; (ii) have a minimum market capitalization of $1.5 billion and during the 12 months preceding listing are shown to have traded at least 10 million shares; or (iii) have a minimum market capitalization of $500 million and during the 12 months preceding listing are shown to have traded at least 15 million shares. On December 7, 2000, the Commission granted authority to the Phlx to list and trade notes linked to more than one equity security.3 Each of the underlying securities of a BLN is required to meet the standards for linked securities set forth in Phlx Rule 803(k). However, the 2000 Order limited the basket of underlying securities that may to be linked to a BLN to no more than twenty. At this time, Phlx proposes to increase the number of underlying securities that may be linked to a BLN from no more than 20 to no more than thirty.4 The Phlx believes that expanding the basket of equity securities that may be linked to a BLN will enhance competition and benefit investors and the marketplace through additional product choices and alternatives. The Phlx also believes that there would be no investor protection concerns with expanding the number of equity securities that may be linked to a BLN from more than one common stock to up to thirty common stocks. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act 5 in general, and furthers the objectives of Section 6(b)(5) of the Act 6 3 See Securities Exchange Act Release No. 43690 (December 7, 2000), 65 FR 78523 (December 15, 2000) (SR–Phlx–2000–90) (‘‘2000 Order’’). 4 This is identical to the listing standard of the American Stock Exchange (Amex Company Guide Section 107B); see Securities Exchange Act Release No. 47055 (December 19, 2002), 67 FR 79669 (December 30, 2002) (SR–Amex–2002–110). 5 15 U.S.C. 78f(b). 6 15 U.S.C. 78f(b)(5). E:\FR\FM\31JAN1.SGM 31JAN1 Federal Register / Vol. 72, No. 20 / Wednesday, January 31, 2007 / Notices in particular, in that 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, and is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will 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 either solicited or received. 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 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. The Commission is considering granting accelerated approval of the proposed rule change at the end of a 15day comment period.7 mstockstill on PROD1PC62 with NOTICES IV. 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 rulecomments@sec.gov. Please include File No. SR–Phlx–2006–85 on the subject line. 7 Phlx has requested accelerated approval of this proposed rule change prior to the 30th day after the date of publication of the notice of the filing thereof. VerDate Aug<31>2005 15:08 Jan 30, 2007 Jkt 211001 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. 4553 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–55153; File No. SR–Phlx– 2006–74] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Order Granting Approval to Proposed All submissions should refer to File Rule Change as Modified by Number SR–Phlx–2006–85. This file Amendment Nos. 1 and 2 Thereto, number should be included on the subject line if e-mail is used. To help the Relating to a Pilot Program To Quote Options in Penny Increments Commission process and review your comments more efficiently, please use January 23, 2007. only one method. The Commission will I. Introduction post all comments on the Commission’s On November 13, 2006, the Internet Web site (http://www.sec.gov/ Philadelphia Stock Exchange, Inc. rules/sro.shtml). Copies of the (‘‘Phlx’’ or ‘‘Exchange’’) filed with the submission, all subsequent Securities and Exchange Commission amendments, all written statements (‘‘Commission’’), pursuant to Section with respect to the proposed rule 19(b)(1) of the Securities Exchange Act change that are filed with the of 1934 (‘‘Act’’),1 and Rule 19b–4 Commission, and all written thereunder,2 a proposed rule change to communications relating to the amend various Exchange rules to permit proposed rule change between the certain option classes to be quoted in Commission and any person, other than pennies on a pilot basis. On November those that may be withheld from the 22, 2006, the Exchange filed public in accordance with the Amendment No. 1 to the proposed rule provisions of 5 U.S.C. 552, will be change. The Exchange filed Amendment available for inspection and copying in No. 2 to the proposed rule change on the Commission’s Public Reference December 5, 2006. The proposed rule Room. Copies of such filing also will be change, as modified by Amendment available for inspection and copying at Nos. 1 and 2, was published for the principal office of the Phlx. All comment in the Federal Register on comments received will be posted December 13, 2006.3 The Commission received no comment letters on the without change; the Commission does proposed rule change. This order not edit personal identifying approves the proposed rule change as information from submissions. You modified by Amendment Nos. 1 and 2. should submit only information that you wish to make available publicly. All II. Description of the Proposal submissions should refer to File A. Scope of the Penny Pilot Program Number SR–Phlx–2006–85 and should Phlx proposes to amend its rules to be submitted on or before February 15, permit certain option classes to be 2007. quoted in pennies during a six-month For the Commission, by the Division of pilot (‘‘Penny Pilot Program’’), which Market Regulation, pursuant to delegated would commence on January 26, 2007. authority.8 Specifically, proposed Phlx Rule Florence E. Harmon, 1034(a)(i)(B) would set forth the Deputy Secretary. parameters of the Penny Pilot Program. [FR Doc. E7–1506 Filed 1–30–07; 8:45 am] Currently, all six options exchanges, including Phlx, quote options in nickel BILLING CODE 8011–01–P and dime increments. The minimum price variation for quotations in options series that are quoted at less than $3 per contract is $0.05 and the minimum price variation for quotations in options series that are quoted at $3 per contract or greater is $0.10. Under the Penny Pilot Program, beginning on January 26, 2007, market participants would be able to begin quoting in penny increments in certain series of option classes. 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 54886 (December 6, 2006), 71 FR 74979. 2 17 8 17 PO 00000 CFR 200.30–3(a)(12). Frm 00077 Fmt 4703 Sfmt 4703 E:\FR\FM\31JAN1.SGM 31JAN1

Agencies

[Federal Register Volume 72, Number 20 (Wednesday, January 31, 2007)]
[Notices]
[Pages 4552-4553]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-1506]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55173; File No. SR-Phlx-2006-85]


Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; 
Notice of Filing of Proposed Rule Change Relating to Listing Standards 
for Basket Linked Notes

January 25, 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 December 12, 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, II, 
and III below, which Items have been prepared by the Phlx. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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

    The Phlx proposes to amend Phlx Rule 803--Criteria for Listing--
Tier 1, regarding listing standards for Basket Linked Notes (``BLNs''). 
The text of the proposed rule change is available on Phlx's Web site at 
http://www.phlx.com, at Phlx'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 Phlx 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 Phlx 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 conform Phlx's 
listing standards for Basket Linked Notes, specifically Phlx Rule 
803(k), to that of other exchanges. Phlx Rule 803 provides listing 
standards for Basket Linked Notes, which are income instruments whose 
values are linked to the performance of highly capitalized, actively 
traded common stock. Specifically, BLNs are non-convertible debt of an 
issuer, whose value is based, at least in part, on the value of another 
issuer's common stock or non-convertible preferred stock.
    Phlx Rule 803(k) details Phlx's listing standards for BLNs. 
Specifically, Phlx Rule 803(k)(3) currently requires, among other 
things, that securities linked to BLNs either: (i) Have a minimum 
market capitalization of $3 billion and during the 12 months preceding 
listing are shown to have traded at least 2.5 million shares; (ii) have 
a minimum market capitalization of $1.5 billion and during the 12 
months preceding listing are shown to have traded at least 10 million 
shares; or (iii) have a minimum market capitalization of $500 million 
and during the 12 months preceding listing are shown to have traded at 
least 15 million shares.
    On December 7, 2000, the Commission granted authority to the Phlx 
to list and trade notes linked to more than one equity security.\3\ 
Each of the underlying securities of a BLN is required to meet the 
standards for linked securities set forth in Phlx Rule 803(k). However, 
the 2000 Order limited the basket of underlying securities that may to 
be linked to a BLN to no more than twenty. At this time, Phlx proposes 
to increase the number of underlying securities that may be linked to a 
BLN from no more than 20 to no more than thirty.\4\
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 43690 (December 7, 
2000), 65 FR 78523 (December 15, 2000) (SR-Phlx-2000-90) (``2000 
Order'').
    \4\ This is identical to the listing standard of the American 
Stock Exchange (Amex Company Guide Section 107B); see Securities 
Exchange Act Release No. 47055 (December 19, 2002), 67 FR 79669 
(December 30, 2002) (SR-Amex-2002-110).
---------------------------------------------------------------------------

    The Phlx believes that expanding the basket of equity securities 
that may be linked to a BLN will enhance competition and benefit 
investors and the marketplace through additional product choices and 
alternatives. The Phlx also believes that there would be no investor 
protection concerns with expanding the number of equity securities that 
may be linked to a BLN from more than one common stock to up to thirty 
common stocks.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \5\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \6\

[[Page 4553]]

in particular, in that 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, and is not designed to 
permit unfair discrimination between customers, issuers, brokers, or 
dealers.
---------------------------------------------------------------------------

    \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 the proposed rule change will 
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 either solicited or received.

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 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.
    The Commission is considering granting accelerated approval of the 
proposed rule change at the end of a 15-day comment period.\7\
---------------------------------------------------------------------------

    \7\ Phlx has requested accelerated approval of this proposed 
rule change prior to the 30th day after the date of publication of 
the notice of the filing thereof.
---------------------------------------------------------------------------

IV. 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 rule-comments@sec.gov. Please include 
File No. SR-Phlx-2006-85 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-2006-85. 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 the Phlx. 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-2006-85 and should be submitted on or before 
February 15, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-1506 Filed 1-30-07; 8:45 am]
BILLING CODE 8011-01-P