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]

Download as PDF 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). VerDate Aug<31>2005 19:03 Feb 15, 2007 Jkt 211001 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 PO 00000 Frm 00116 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’’). E:\FR\FM\16FEN1.SGM 16FEN1 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). VerDate Aug<31>2005 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 Frm 00117 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 (http://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 (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 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 16FEN1 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 http:// 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: PO 00000 Frm 00118 Fmt 4703 Sfmt 4703 E:\FR\FM\16FEN1.SGM 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]


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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.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78f(b).
    \15\ 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

    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\
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78s(b)(3)(A).
    \17\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

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 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 (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

[[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