Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto Relating to Calculation and Dissemination of PHLX/KBW Bank Index Values, 7706-7708 [E7-2764]
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7706
Federal Register / Vol. 72, No. 32 / Friday, February 16, 2007 / Notices
sroberts on PROD1PC70 with NOTICES
10% Rule. In response, OCC amended
the filing so that the 10% Rule will be
eliminated and the new dollar threshold
implemented only for dividends
announced on and after February 1,
2009, so that the majority of existing
options contracts will not be affected.
Some commenters also argued that
elimination of the 10% Rule would lead
to symbol proliferation in that any
special dividend greater than $12.50 per
contract would trigger a contract
adjustment and a new symbol. The
Commission believes that any symbol
proliferation should be short lived as
the industry is planning to convert from
fractional strikes to decimal strikes in
November 2009 and that the benefits of
the change outweigh any burdens.
Of particular concern to the
Commission is the inequitable economic
impact of unanticipated special
dividends on market participants when
the 10% Rule is applied. The
Commission believes that OCC’s rule
change makes appropriate changes to
the way that OCC handles special
dividends to address this problem.
Those commenters that disagreed
with the adjustment methodology for
stock dividends, stock distributions, and
stock splits suggested changes that
would require major systems revisions.
The Commission believes that such
systems changes would be a tremendous
burden on the industry and the costs
would not outweigh any benefits.
Finally, it was argued that major
systems changes would need to be
undertaken and symbols changed to
somehow alert investors that an option
represents an adjusted contract. The
Commission is not persuaded by this
argument because the adjustment
methodology OCC is going to apply to
stock dividends, stock distributions, and
stock splits is the same adjustment
methodology it has used for over thirty
years for spin-offs, mergers, and
extraordinary cash dividends and
identification of these adjusted contracts
does not appear to have presented a
problem.
VI. Conclusion
On the basis of the foregoing, the
Commission finds that the proposed
rule change is consistent with the
requirements of the Act and in
particular Section 17A of the Act and
the rules and regulations thereunder.25
In approving the proposed rule change,
the Commission considered the
proposal’s impact on efficiency,
competition and capital formation.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act, that the
25 15
U.S.C. 78c(f).
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19:03 Feb 15, 2007
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proposed rule change (File No. SR–
FICC–2006–01), as modified by
Amendment No. 1, be and hereby is
approved.
For the Commission by the Division of
Market Regulation, pursuant to delegated
authority.26
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–2792 Filed 2–15–07; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55261; File No. SR–Phlx–
2007–01]
Self-Regulatory Organizations;
Philadelphia Stock Exchange, Inc.;
Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change and Amendment No. 1 Thereto
Relating to Calculation and
Dissemination of PHLX/KBW Bank
Index Values
February 8, 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 January
18, 2007, 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 and II below, which Items have
been substantially prepared by the Phlx.
On February 2, 2007, the Phlx filed
Amendment No. 1 to the proposed rule
change. The Phlx filed the proposed
rule change as a ‘‘non-controversial’’
rule change pursuant to Section
19(b)(3)(A) of the Act 3 and Rule 19b–
4(f)(6) thereunder,4 which renders the
proposal effective upon filing with the
Commission. The Commission is
publishing this notice to solicit
comments on the proposed rule change,
as amended, from interested persons.5
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Phlx proposes that Dow Jones &
Company, Inc. (‘‘Dow Jones’’) will
26 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
5 Certain additions and technical corrections were
made throughout the discussion of the proposed
rule change pursuant to conversations with Phlx
staff. Telephone conversation between Jurij
Trypupenko, Director and Counsel, Phlx, and Kate
Robbins, Attorney, Division of Market Regulation,
Commission, on February 5, 2007.
1 15
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Fmt 4703
Sfmt 4703
replace the Exchange as the party solely
responsible for the calculation and
dissemination of the current index
values 6 of the PHLX/KBW Bank Index
(‘‘Bank Index’’ or ‘‘Index’’).7
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 provide that Dow Jones,
rather than the Exchange, will calculate
and disseminate the current index
values of the Bank Index. No other
changes are proposed in respect of the
Index.
Options on the Bank Index, a narrowbased (industry) index, were originally
listed in 1992.8 The Commission’s
Approval Order regarding the Bank
Index and options on it contains the
following language about the calculation
of the underlying current index value:
Even though the Index will be maintained
by KBW, the Phlx represents that the
Exchange will be solely responsible for the
calculation of the Index and that the Index
value will be calculated and disseminated in
such a way that neither KBW nor any other
party will be in receipt of the Index value
prior to the public dissemination of the
6 Bridge Data, which merged into Reuters, at
various times has calculated and disseminated
relevant index values on behalf of the Exchange.
7 KBW is a registered broker-dealer that, among
other things, specializes in U.S. bank stocks and is
recognized as the ‘‘financial services industry
authority.’’ The Bank Index (BKX), also known as
the KBW Bank Index and as a sector index, is a
European-style modified-capitalization-weighted
index composed of 24 geographically dispersed
companies representing national money center
banks and leading regional institutions. KBW has
informed the Exchange that an independent third
party, Dow Jones, on behalf of KBW will calculate
and publicly disseminate the current values of the
Bank Index and will follow necessary procedures
such as publicly reporting the current underlying
index values at least once every 15 seconds during
the periods that options on the Bank Index are
traded.
8 See Securities Exchange Act Release No. 31145
(September 3, 1992), 57 FR 41531 (September 10,
1992) (SR–Phlx–91–27) (‘‘Approval Order’’).
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Federal Register / Vol. 72, No. 32 / Friday, February 16, 2007 / Notices
value. In this connection, the Phlx has made
arrangements for the Index to be calculated
by an independent third party, Bridge Data,
a vendor of financial information.9
In June 2006, the Exchange filed a
proposal that it would calculate and
disseminate the Bank Index values in
the event that Bridge Data was
temporarily unable to calculate and
disseminate the values due to technical
difficulties.10 The Exchange is
proposing in this filing that it (and any
third party on the Exchange’s behalf)
will cease calculating and disseminating
the Bank Index values and, in its place,
Dow Jones 11 will be solely responsible
for such calculation and
dissemination.12
The Exchange notes that the listing of
options on the Bank Index preceded the
adoption of the Exchange’s generic
index option listing standards in Phlx
Rule 1009A. This rule permits the
Exchange to list qualifying index
options pursuant to a form filing per
Rule 19b–4(e) under the Exchange Act
(instead of a rule filing as with the Bank
Index), and does not require a filing
regarding the identity of the entity
calculating or disseminating the current
index values, so long as such values are
publicly reported at least once every 15
seconds during the periods that the
index options are traded on the
Exchange.13
2. Statutory Basis
The Exchange believes that its
proposed rule change to make Dow
Jones responsible for calculating and
disseminating the Bank Index values is
consistent with Section 6(b) of the Act 14
in general, and furthers the objectives of
Section 6(b)(5) of the Act 15 in
sroberts on PROD1PC70 with NOTICES
9 Id.
10 See Securities Exchange Act Release No. 53933
(June 1, 2006), 71 FR 33330 (June 8, 2006) (SR–
Phlx–2006–29).
11 Dow Jones is an independent third party vis a
vis KBW, and KBW has informed the Exchange that
Dow Jones will publicly report the underlying
values of the Bank Index at least once every 15
seconds during the times that options on the Bank
Index are traded on the Exchange.,
12 Although Dow Jones will take over from Phlx
the responsibility to calculate and disseminate
current index values of four additional KBW
indexes, this is not part of the proposed filing
because such indexes were listed pursuant to Rule
19b–4(e).
13 Where an underlying index is maintained by a
broker-dealer, the index must be calculated by a
third party who is not a broker-dealer, and the
broker-dealer will have to erect a ‘‘Chinese Wall’’
around its personnel who have access to
information concerning changes in and adjustments
to the index. See Phlx Rule 1009A(b)(12).
14 15 U.S.C. 78f(b).
15 15 U.S.C. 78f(b)(5).
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19:43 Feb 15, 2007
Jkt 211001
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 to protect investors and the
public interest.
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
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 16 and Rule 19b–
4(f)(6) thereunder.17
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily abrogate
such rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.18
A proposed rule change filed under
Rule 19b–4(f)(6) normally may not
become operative prior to 30 days after
the date of filing.19 However, Rule 19b–
4(f)(6)(iii) 20 permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Phlx provided the Commission with
16 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
18 For purposes of calculating the 60-day period
within which the Commission may summarily
abrogate the proposed rule change under Section
19(b)(3)(C) of the Act, the Commission considers
the period to commence on February 2, 2007, the
date on which the Phlx submitted Amendment No.
1. See 15 U.S.C. 78s(b)(3)(C).
19 17 CFR 240.19b–4(f)(6)(iii).
20 Id.
17 17
PO 00000
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Fmt 4703
Sfmt 4703
7707
written notice of its intent to file this
proposed rule change at least five
business days prior to the date of filing
of the proposed rule change. In
addition, the Phlx has requested that the
Commission waive the 30-day operative
delay. The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest
because it will assure the continued
availability of the current Bank Index
values. For this reason, the Commission
designates the proposal to be effective
and operative upon filing with the
Commission.21
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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–Phlx–2007–01 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–Phlx–2007–01. 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 (https://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
21 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
E:\FR\FM\16FEN1.SGM
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7708
Federal Register / Vol. 72, No. 32 / Friday, February 16, 2007 / Notices
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–2007–01 and should
be submitted on or before March 9,
2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.22
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–2764 Filed 2–15–07; 8:45 am]
BILLING CODE 8010–01–P
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration # 10805 and # 10806]
Florida Disaster # FL–00020
U.S. Small Business
Administration.
ACTION: Notice.
sroberts on PROD1PC70 with NOTICES
AGENCY:
SUMMARY: This is a Notice of the
Presidential declaration of a major
disaster for the State of Florida (FEMA–
1680–DR), dated 02/08/2007.
Incident: Severe Storms, Tornadoes,
and Flooding.
Incident Period: 12/25/2006.
Effective Date: 02/08/2007.
Physical Loan Application Deadline
Date: 04/09/2007.
Economic Injury (EIDL) Loan
Application Deadline Date: 11/08/2007.
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
President’s major disaster declaration on
02/08/2007, applications for disaster
loans may be filed at the address listed
above or other locally announced
locations.
22 17
CFR 200.30–3(a)(12).
VerDate Aug<31>2005
19:03 Feb 15, 2007
Jkt 211001
This notice of receipt of Baby Trend’s
petition is published under 49 U.S.C.
30118 and 30120 and does not represent
any agency decision or other exercise of
judgment concerning the merits of the
petition.
Affected are a total of approximately
30,450 infant car seats produced
between June 21, 2006 and November
30, 2006. FMVSS No. 213, S5.1.2.1(b)
requires the following statements on
Percent child restraints: For recall information,
call the U.S. Government’s Vehicle
For Physical Damage:
Safety Hotline at 1–888–327–4236 (TTY:
Homeowners with Credit Avail1–800–424–9153), or go to https://
able Elsewhere ........................
6.000 www.NHTSA.gov.
Homeowners
without
Credit
The infant car seats do not have the
Available Elsewhere ................
3.000
markings required by S5.1.2.1(b). Baby
Businesses with Credit Available
Elsewhere ................................
8.000 Trend has corrected the problem that
caused these errors so that they will not
Other (Including Non-Profit Orgabe repeated in future production.
nizations) with Credit Available
Baby Trend believes that the
Elsewhere ................................
5.250
noncompliance is inconsequential to
Businesses And Non-Profit Organizations without Credit Availmotor vehicle safety and that no
able Elsewhere ........................
4.000 corrective action is warranted. Baby
For Economic Injury:
Trend states that the child restraint seats
Businesses & Small Agricultural
comply with the stringent dynamic
Cooperatives without Credit
performance requirements of FMVSS
Available Elsewhere ................
4.000
No. 213. Baby Trend does not believe
that a safety consequence exists for the
The number assigned to this disaster
technical labeling non-compliance.
for physical damage is 10805C and for
Further, they believe that given the
economic injury is 108060.
existing lag time, the use of older
(Catalog of Federal Domestic Assistance
information remains a viable means for
Numbers 59002 and 59008)
contacting the National Highway Traffic
Safety Administration (NHTSA).
Herbert L. Mitchell,
Although telephone exchanges have
Associate Administrator for Disaster
changed, NHTSA still forwards calls in
Assistance.
an integrated manner to provide
[FR Doc. E7–2755 Filed 2–15–07; 8:45 am]
consumer service to the general
BILLING CODE 8025–01–P
population. In addition, Baby Trend
states that the use of the internet,
DEPARTMENT OF TRANSPORTATION improvements to NHTSA’s websites,
and the implementation of the
integrated www.recall.gov website allow
National Highway Traffic Safety
consumers interested in contacting
Administration
NHTSA to do so more effectively than
[Docket No. NHTSA–2007–27111; Notice 1]
ever before.
Interested persons are invited to
Baby Trend, Inc., Receipt of Petition
submit written data, views, and
for Decision of Inconsequential
arguments on this petition. Comments
Noncompliance
must refer to the docket and notice
number cited at the beginning of this
Baby Trend, Inc. (Baby Trend) has
notice and be submitted by any of the
determined that certain infant car seats
following methods. Mail: Docket
that it produced in 2006 do not comply
Management Facility, U.S. Department
with S5.1.2.1(b) of 49 CFR 571.213,
of Transportation, Nassif Building,
Federal Motor Vehicle Safety Standard
Room PL–401, 400 Seventh Street, SW.,
(FMVSS) No. 213, ‘‘Child Restraint
Washington, DC, 20590–0001. Hand
Systems.’’ Baby Trend has filed an
Delivery: Room PL–401 on the plaza
appropriate report pursuant to 49 CFR
level of the Nassif Building, 400
Part 573, ‘‘Defect and Noncompliance
Seventh Street, SW., Washington, DC. It
Reports.’’
Pursuant to 49 U.S.C. 30118(d) and
is requested, but not required, that two
30120(h), Baby Trend has petitioned for copies of the comments be provided.
an exemption from the notification and
The Docket Section is open on
remedy requirements of 49 U.S.C.
weekdays from 10 a.m. to 5 p.m. except
Chapter 301 on the basis that this
Federal holidays. Comments may be
noncompliance is inconsequential to
submitted electronically by logging onto
motor vehicle safety.
the Docket Management System Web
The following areas have been
determined to be adversely affected by
the disaster:
Primary Counties (Physical Damage and
Economic Injury Loans): Volusia.
Contiguous Counties (Economic Injury
Loans Only): Florida: Brevard,
Flagler, Lake, Marion, Orange,
Putnam, Seminole.
The Interest Rates are:
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16FEN1
]]>Agencies
[Federal Register Volume 72, Number 32 (Friday, February 16, 2007)]
[Notices]
[Pages 7706-7708]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-2764]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55261; File No. SR-Phlx-2007-01]
Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
and Amendment No. 1 Thereto Relating to Calculation and Dissemination
of PHLX/KBW Bank Index Values
February 8, 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 January 18, 2007, 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 and
II below, which Items have been substantially prepared by the Phlx. On
February 2, 2007, the Phlx filed Amendment No. 1 to the proposed rule
change. The Phlx filed the proposed rule change as a ``non-
controversial'' rule change pursuant to Section 19(b)(3)(A) of the Act
\3\ and Rule 19b-4(f)(6) thereunder,\4\ which renders the proposal
effective upon filing with the Commission. The Commission is publishing
this notice to solicit comments on the proposed rule change, as
amended, from interested persons.\5\
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6).
\5\ Certain additions and technical corrections were made
throughout the discussion of the proposed rule change pursuant to
conversations with Phlx staff. Telephone conversation between Jurij
Trypupenko, Director and Counsel, Phlx, and Kate Robbins, Attorney,
Division of Market Regulation, Commission, on February 5, 2007.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Phlx proposes that Dow Jones & Company, Inc. (``Dow Jones'')
will replace the Exchange as the party solely responsible for the
calculation and dissemination of the current index values \6\ of the
PHLX/KBW Bank Index (``Bank Index'' or ``Index'').\7\
---------------------------------------------------------------------------
\6\ Bridge Data, which merged into Reuters, at various times has
calculated and disseminated relevant index values on behalf of the
Exchange.
\7\ KBW is a registered broker-dealer that, among other things,
specializes in U.S. bank stocks and is recognized as the ``financial
services industry authority.'' The Bank Index (BKX), also known as
the KBW Bank Index and as a sector index, is a European-style
modified-capitalization-weighted index composed of 24 geographically
dispersed companies representing national money center banks and
leading regional institutions. KBW has informed the Exchange that an
independent third party, Dow Jones, on behalf of KBW will calculate
and publicly disseminate the current values of the Bank Index and
will follow necessary procedures such as publicly reporting the
current underlying index values at least once every 15 seconds
during the periods that options on the Bank Index are traded.
---------------------------------------------------------------------------
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 provide that Dow
Jones, rather than the Exchange, will calculate and disseminate the
current index values of the Bank Index. No other changes are proposed
in respect of the Index.
Options on the Bank Index, a narrow-based (industry) index, were
originally listed in 1992.\8\ The Commission's Approval Order regarding
the Bank Index and options on it contains the following language about
the calculation of the underlying current index value:
---------------------------------------------------------------------------
\8\ See Securities Exchange Act Release No. 31145 (September 3,
1992), 57 FR 41531 (September 10, 1992) (SR-Phlx-91-27) (``Approval
Order'').
Even though the Index will be maintained by KBW, the Phlx
represents that the Exchange will be solely responsible for the
calculation of the Index and that the Index value will be calculated
and disseminated in such a way that neither KBW nor any other party
will be in receipt of the Index value prior to the public
dissemination of the
[[Page 7707]]
value. In this connection, the Phlx has made arrangements for the
Index to be calculated by an independent third party, Bridge Data, a
vendor of financial information.\9\
---------------------------------------------------------------------------
\9\ Id.
In June 2006, the Exchange filed a proposal that it would calculate and
disseminate the Bank Index values in the event that Bridge Data was
temporarily unable to calculate and disseminate the values due to
technical difficulties.\10\ The Exchange is proposing in this filing
that it (and any third party on the Exchange's behalf) will cease
calculating and disseminating the Bank Index values and, in its place,
Dow Jones \11\ will be solely responsible for such calculation and
dissemination.\12\
---------------------------------------------------------------------------
\10\ See Securities Exchange Act Release No. 53933 (June 1,
2006), 71 FR 33330 (June 8, 2006) (SR-Phlx-2006-29).
\11\ Dow Jones is an independent third party vis a vis KBW, and
KBW has informed the Exchange that Dow Jones will publicly report
the underlying values of the Bank Index at least once every 15
seconds during the times that options on the Bank Index are traded
on the Exchange.,
\12\ Although Dow Jones will take over from Phlx the
responsibility to calculate and disseminate current index values of
four additional KBW indexes, this is not part of the proposed filing
because such indexes were listed pursuant to Rule 19b-4(e).
---------------------------------------------------------------------------
The Exchange notes that the listing of options on the Bank Index
preceded the adoption of the Exchange's generic index option listing
standards in Phlx Rule 1009A. This rule permits the Exchange to list
qualifying index options pursuant to a form filing per Rule 19b-4(e)
under the Exchange Act (instead of a rule filing as with the Bank
Index), and does not require a filing regarding the identity of the
entity calculating or disseminating the current index values, so long
as such values are publicly reported at least once every 15 seconds
during the periods that the index options are traded on the
Exchange.\13\
---------------------------------------------------------------------------
\13\ Where an underlying index is maintained by a broker-dealer,
the index must be calculated by a third party who is not a broker-
dealer, and the broker-dealer will have to erect a ``Chinese Wall''
around its personnel who have access to information concerning
changes in and adjustments to the index. See Phlx Rule 1009A(b)(12).
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that its proposed rule change to make Dow
Jones responsible for calculating and disseminating the Bank Index
values is consistent with Section 6(b) of the Act \14\ in general, and
furthers the objectives of Section 6(b)(5) of the Act \15\ 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 to protect
investors and the public interest.
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\14\ 15 U.S.C. 78f(b).
\15\ 15 U.S.C. 78f(b)(5).
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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
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \16\ and Rule 19b-
4(f)(6) thereunder.\17\
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\16\ 15 U.S.C. 78s(b)(3)(A).
\17\ 17 CFR 240.19b-4(f)(6).
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.\18\
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\18\ For purposes of calculating the 60-day period within which
the Commission may summarily abrogate the proposed rule change under
Section 19(b)(3)(C) of the Act, the Commission considers the period
to commence on February 2, 2007, the date on which the Phlx
submitted Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).
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A proposed rule change filed under Rule 19b-4(f)(6) normally may
not become operative prior to 30 days after the date of filing.\19\
However, Rule 19b-4(f)(6)(iii) \20\ permits the Commission to designate
a shorter time if such action is consistent with the protection of
investors and the public interest. The Phlx provided the Commission
with written notice of its intent to file this proposed rule change at
least five business days prior to the date of filing of the proposed
rule change. In addition, the Phlx has requested that the Commission
waive the 30-day operative delay. The Commission believes that waiving
the 30-day operative delay is consistent with the protection of
investors and the public interest because it will assure the continued
availability of the current Bank Index values. For this reason, the
Commission designates the proposal to be effective and operative upon
filing with the Commission.\21\
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\19\ 17 CFR 240.19b-4(f)(6)(iii).
\20\ Id.
\21\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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 (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-Phlx-2007-01 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-Phlx-2007-01. 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 (https://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
[[Page 7708]]
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-2007-01 and should be submitted on or before March
9, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\22\
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\22\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-2764 Filed 2-15-07; 8:45 am]
BILLING CODE 8010-01-P
