Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Extending the Dividend, Merger, and Short Stock Interest Strategies Fee Cap Program, 9828-9830 [E7-3763]

Download as PDF 9828 Federal Register / Vol. 72, No. 42 / Monday, March 5, 2007 / Notices applicable to each series of CDOs. OCC would have discretion to reduce the requirement to something less than 100% if research, analysis, and experience suggest that a lower percentage is sufficient. Initially, long positions in CDOs will be valued at zero and will provide no offset against margin requirements on the shorts. Again, based on research, analysis, and experience, OCC may determine to give some value to the longs. Ultimately, CDOs will be incorporated into the STANS system and valued and will be margined on a risk basis. OCC does not propose to accept escrow deposits in lieu of clearing margin for binary options. Therefore, Rule 1506 states that Rule 610, which otherwise would permit such deposits, does not apply to binary options. erjones on PRODPC74 with NOTICES 7. Acceleration of Expiration Date—Rule 1507 This provision permits OCC to accelerate the expiration date of a binary option when the value of the underlying interest has become fixed (e.g., where a stock underlying a binary option has been converted by a merger into the right to receive a fixed amount of cash). If the value of the underlying interest does not meet the specified criterion for automatic exercise, it will expire unexercised. Otherwise, it will be automatically exercised. The proposed changes to OCC’s ByLaws and Rules are consistent with the purposes and requirements of Section 17A of the Act, as amended, because they are designed to promote the prompt and accurate clearance and settlement of transactions in, including exercises of, credit default options and other binary options, and to foster cooperation and coordination with persons engaged in the clearance and settlement of such transactions, to remove impediments to and perfect the mechanism of a national system for the prompt and accurate clearance and settlement of such transactions, and, in general, to protect investors and the public interest. They accomplish these purposes by applying substantially the same rules and procedures to binary options and specifically CDOs as OCC applies to similar transactions in other cash-settled options. Other than as described in this Item II, the proposed rule change is not inconsistent with the existing rules of OCC, including rules proposed to be amended. (B) Self-Regulatory Organization’s Statement on Burden on Competition OCC does not believe that the proposed rule change would impose any burden on competition. VerDate Aug<31>2005 15:17 Mar 02, 2007 Jkt 211001 (C) Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were not and are not intended to be solicited with respect to the proposed rule change, and none have been received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within thirty-five 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 ninety 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 self-regulatory organization consents, the Commission will: (A) By order approve such proposed rule change or (B) Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments 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 Section, 100 F Street, NE., Washington, DC 20549. The text of the proposed rule change is available at OCC, the Commission’s Public Reference Room, and http://www.theocc.com/ publications/rules/proposed_changes/ sr_occ_07_01.pdf. 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–OCC– 2007–01 and should be submitted on or before March 26, 2007. For the Commission by the Division of Market Regulation, pursuant to delegated authority.7 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–3773 Filed 3–2–07; 8:45 am] 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: BILLING CODE 8010–01–P Electronic Comments Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Extending the Dividend, Merger, and Short Stock Interest Strategies Fee Cap Program • 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–OCC–2007–01 on the subject line. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–55358; File No. SR–Phlx– 2007–14] February 27, 2007. Paper Comments Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 • Send paper comments in triplicate (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 to Nancy M. Morris, Secretary, notice is hereby given that on February Securities and Exchange Commission, 21, 2007, the Philadelphia Stock 100 F Street, NE., Washington, DC Exchange, Inc. (‘‘Phlx’’ or ‘‘Exchange’’) 20549–1090. filed with the Securities and Exchange All submissions should refer to File Commission (‘‘Commission’’) the Number SR–OCC–2007–01. This file proposed rule change as described in number should be included on the Items I, II, and III below, which Items subject line if e-mail is used. To help the have been substantially prepared by the Commission process and review your Exchange. Phlx has designated this comments more efficiently, please use proposal as one establishing or changing only one method. The Commission will a due, fee, or other charge imposed by post all comments on the Commission’s a self-regulatory organization pursuant Internet Web site (http://www.sec.gov/ to Section 19(b)(3)(A)(ii) of the Act 3 and rules/sro.shtml). Copies of the Rule 19b–4(f)(2) thereunder,4 which submission, all subsequent amendments, all written statements 7 17 CFR 200.30–3(a)(12). with respect to the proposed rule 1 15 U.S.C. 78s(b)(1). change that are filed with the 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(ii). Commission, and all written 4 17 CFR 240.19b–4(f)(2). communications relating to the PO 00000 Frm 00104 Fmt 4703 Sfmt 4703 E:\FR\FM\05MRN1.SGM 05MRN1 Federal Register / Vol. 72, No. 42 / Monday, March 5, 2007 / Notices renders the proposal effective upon filing with the Commission. 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 Phlx proposes to extend for a period of one year, until March 1, 2008, the pilot programs for: (1) The $1,000 and $25,000 fee caps on equity option transaction and comparison charges on dividend,5 merger,6 and short stock interest 7 strategies; and (2) the license fee of $0.05 per contract side imposed on dividend and short stock interest strategies, as described below. The current fee caps and $0.05 per contract side license fee are in effect as a pilot program that is scheduled to expire on March 1, 2007.8 Other than extending the pilot program for an additional oneyear period until March 1, 2008, no other changes to the Exchange’s current dividend, merger and short stock interest strategy program, which includes the $0.05 per contract side license fee, are being proposed at this time. The text of the proposed rule change is available on the Exchange’s Web site (http://www.phlx.com/exchange/ phlx_rule_fil.html), at the Exchange’s principal office, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed erjones on PRODPC74 with NOTICES 5 For purposes of this proposal, the Exchange defines a ‘‘dividend strategy’’ as transactions done to achieve a dividend arbitrage involving the purchase, sale, and exercise of in-the-money options of the same class, executed prior to the date on which the underlying stock goes ex-dividend. See, e.g., Securities Exchange Act Release No. 54174 (July 19, 2006), 71 FR 42156 (July 25, 2006) (SR–Phlx–2006–40). 6 For purposes of this proposal, the Exchange defines a ‘‘merger strategy’’ as transactions done to achieve a merger arbitrage involving the purchase, sale and exercise of options of the same class and expiration date, executed prior to the date on which shareholders of record are required to elect their respective form of consideration, i.e., cash or stock. Id. 7 For purposes of this proposal, the Exchange defines a ‘‘short stock interest strategy’’ as transactions done to achieve a short stock interest arbitrage involving the purchase, sale and exercise of in-the-money options of the same class. Id. 8 See Securities Exchange Act Release Nos. 54381 (August 29, 2006), 71 FR 52598 (September 6, 2006) (SR–Phlx–2006–50) and 54424 (September 11, 2006), 71 FR 54699 (September 18, 2006) (SR–Phlx– 2006–55). VerDate Aug<31>2005 15:17 Mar 02, 2007 Jkt 211001 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 Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Currently, the Exchange imposes a fee cap on equity option transaction and comparison charges on dividend, merger, and short stock interest strategies executed on the same trading day in the same options class. Specifically, Registered Options Trader (‘‘ROT’’) and specialist net equity option transaction and comparison charges are capped at $1,000 for dividend, merger, and short stock interest strategies executed on the same trading day in the same options class.9 In addition, there is a $25,000 per member organization fee cap on equity option transaction and comparison charges incurred in one month for dividend, merger, and short stock interest strategies combined. The $1,000 and $25,000 fee caps are implemented after any applicable rebates are applied to ROT and specialist equity option transaction and comparison charges occurring as part of a dividend, merger, or short stock interest strategy.10 In addition, the Exchange assesses a license fee of $0.05 per contract side for dividend and short stock interest strategies in connection with certain products that carry license fees, if applicable.11 The applicable license fee is assessed on every transaction and is not subject to the $1,000 or $25,000 fee caps described above, nor does it count towards reaching the $1,000 or $25,000 fee caps. The Exchange represents that the purpose of extending the pilot program for the fee caps on equity option transaction and comparison charges on dividend, merger, and short stock interest strategies and the $0.05 per contract fee imposed on dividend and short stock interest strategies until March 1, 2008 is to continue to attract 9 See Securities Exchange Act Release No. 54424 (September 11, 2006), 71 FR 54699 (September 18, 2006) (SR–Phlx–2006–55). 10 Currently, the Exchange rebates $0.08 per contract side for ROT executions and $0.07 per contract side for trades occurring as part of a dividend, merger, or short stock interest strategy. 11 For a complete list of these product symbols, see the Exchange’s $60,000 Firm-Related Equity Option and Index Option Cap Fee Schedule. PO 00000 Frm 00105 Fmt 4703 Sfmt 4703 9829 additional liquidity to the Exchange and to remain competitive with other options exchanges in connection with these types of options strategies. In addition, the Exchange also represents that the purpose of extending the pilot is to recoup the license fees owed in connection with the trading of products that carry license fees. Even with the assessment of the $0.05 license fee per contract side, the Exchange believes that the fee caps and rebates should continue to encourage specialists and ROTs to provide liquidity for these types of options strategies. This proposal is scheduled to become effective for trades settling on or after March 1, 2007 and will remain in effect as a pilot program until March 1, 2008. 2. Statutory Basis The Exchange believes that its proposal to amend its schedule of fees is consistent with Section 6(b) of the Act,12 in general, and furthers the objectives of Section 6(b)(4) of the Act,13 in particular, in that it is an equitable allocation of reasonable fees and other charges among Exchange members. 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 The foregoing proposed rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act 14 and Rule 19b–4(f)(2) thereunder 15 because it establishes or changes a due, fee, or other charge imposed by the Exchange. 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. 12 15 U.S.C. 78f(b). U.S.C. 78f(b)(4). 14 15 U.S.C. 78s(b)(3)(A)(ii). 15 17 CFR 19b–4(f)(2). 13 15 E:\FR\FM\05MRN1.SGM 05MRN1 9830 Federal Register / Vol. 72, No. 42 / Monday, March 5, 2007 / 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: For the Commission, by the Division of Market Regulation, pursuant to delegated authority.16 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–3763 Filed 3–2–07; 8:45 am] BILLING CODE 8010–01–P SMALL BUSINESS ADMINISTRATION Emergence Capital Partners SBIC, L.P. License No. 09/79–0454; Notice Seeking Exemption Under Section 312 of the Small Business Investment Act, Conflicts of Interest Notice is hereby given that Emergence Capital Partners SBIC, L.P., 160 Bovet Road, Suite 300, San Mateo, CA 94402, • Send paper comments in triplicate a Federal Licensee under the Small to Nancy M. Morris, Secretary, Business Investment Act of 1958, as Securities and Exchange Commission, amended (‘‘the Act’’), in connection Station Place, 100 F Street, NE., with the financing of a small concern, Washington, DC 20549–1090. has sought an exemption under Section 312 of the Act and Section 107.730, All submissions should refer to File Financings Which Constitute Conflicts Number SR–Phlx–2007–14. This file of Interest of the Small Business number should be included on the subject line if e-mail is used. To help the Administration (‘‘SBA’’) Rules and Regulations (13 CFR 107.730). Commission process and review your Emergence Capital Partners SBIC, L.P. comments more efficiently, please use only one method. The Commission will proposes to provide equity/debt security financing to Intacct Corporation post all comments on the Commissions (‘‘Intacct’’), 125 S. Market Street, Suite Internet Web site (http://www.sec.gov/ 600, San Jose, CA 95113. The financing rules/sro.shtml). Copies of the is contemplated to bridge the company’s submission, all subsequent operations until either the round of amendments, all written statements equity is raised or a sale occurs. with respect to the proposed rule change that are filed with the The financing is brought within the Commission, and all written purview of § 107.730(a)(1) of the communications relating to the Regulations because Emergence Capital proposed rule change between the Partners, L.P. and Emergence Capital Commission and any person, other than Associates, L.P., all Associates of those that may be withheld from the Emergence Capital Partners SBIC, L.P., public in accordance with the own more than ten percent of Intacct, provisions of 5 U.S.C. 552, will be and therefore Intacct is considered an available for inspection and copying in Associate of Emergence Capital Partners the Commission’s Public Reference SBIC, L.P. as detailed in § 107.50 of the Room. Copies of the filing also will be Regulations. available for inspection and copying at Notice is hereby given that any the principal office of Phlx. All interested person may submit written comments received will be posted comments on the transaction to the without change; the Commission does Associate Administrator for Investment, not edit personal identifying U.S. Small Business Administration, information from submissions. You 409 Third Street, SW., Washington, DC should submit only information that 20416. you wish to make available publicly. All Dated: January 11, 2007. submissions should refer to File ´ Jaime Guzman-Fournier, Number SR–Phlx–2007–14 and should be submitted on or before March 26, Associate Administrator for Investment . 2007. [FR Doc. E7–3785 Filed 3–2–07; 8:45 am] erjones on PRODPC74 with NOTICES Paper Comments BILLING CODE 8025–01–P 16 17 VerDate Aug<31>2005 15:17 Mar 02, 2007 Jkt 211001 PO 00000 CFR 200.30–3(a)(12). Frm 00106 Fmt 4703 [Disaster Declaration # 10818] Pennsylvania Disaster # PA–00009 Sfmt 4703 Small Business Administration. Notice. AGENCY: ACTION: 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–2007–14 on the subject line. SMALL BUSINESS ADMINISTRATION SUMMARY: This is a Notice of the Presidential declaration of a major disaster for Public Assistance Only for the Commonwealth of Pennsylvania (FEMA–1684–DR), dated 02/23/2007. Incident: Severe Storms and Flooding. Incident Period: 11/16/2006 through 11/17/2006. Effective Date: 02/23/2007. Physical Loan Application Deadline Date: 04/24/2007. 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 02/23/2007, Private Non-Profit organizations that provide essential services of a governmental nature may file disaster loan applications at the address listed above or other locally announced locations. The following areas have been determined to be adversely affected by the disaster: Primary Counties: Bradford, Lackawanna, Luzerne, Sullivan, Susquehanna, Wayne, Wyoming. The Interest Rates are: Percent Other (Including Non-Profit Organizations) With Credit Available Elsewhere ................................. Businesses And Non-Profit Organizations Without Credit Available Elsewhere ......................... 5.250 4.000 The number assigned to this disaster for physical damage is 10818. (Catalog of Federal Domestic Assistance Number 59008.) Herbert L. Mitchell, Associate Administrator for Disaster Assistance. [FR Doc. E7–3783 Filed 3–2–07; 8:45 am] BILLING CODE 8025–01–P E:\FR\FM\05MRN1.SGM 05MRN1

Agencies

[Federal Register Volume 72, Number 42 (Monday, March 5, 2007)]
[Notices]
[Pages 9828-9830]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-3763]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55358; File No. SR-Phlx-2007-14]


Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Extending the Dividend, Merger, and Short Stock Interest Strategies Fee 
Cap Program

February 27, 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 February 21, 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, II, 
and III below, which Items have been substantially prepared by the 
Exchange. Phlx has designated this proposal as one establishing or 
changing a due, fee, or other charge imposed by a self-regulatory 
organization pursuant to Section 19(b)(3)(A)(ii) of the Act \3\ and 
Rule 19b-4(f)(2) thereunder,\4\ which

[[Page 9829]]

renders the proposal effective upon filing with the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Phlx proposes to extend for a period of one year, until March 1, 
2008, the pilot programs for: (1) The $1,000 and $25,000 fee caps on 
equity option transaction and comparison charges on dividend,\5\ 
merger,\6\ and short stock interest \7\ strategies; and (2) the license 
fee of $0.05 per contract side imposed on dividend and short stock 
interest strategies, as described below. The current fee caps and $0.05 
per contract side license fee are in effect as a pilot program that is 
scheduled to expire on March 1, 2007.\8\ Other than extending the pilot 
program for an additional one-year period until March 1, 2008, no other 
changes to the Exchange's current dividend, merger and short stock 
interest strategy program, which includes the $0.05 per contract side 
license fee, are being proposed at this time.
---------------------------------------------------------------------------

    \5\ For purposes of this proposal, the Exchange defines a 
``dividend strategy'' as transactions done to achieve a dividend 
arbitrage involving the purchase, sale, and exercise of in-the-money 
options of the same class, executed prior to the date on which the 
underlying stock goes ex-dividend. See, e.g., Securities Exchange 
Act Release No. 54174 (July 19, 2006), 71 FR 42156 (July 25, 2006) 
(SR-Phlx-2006-40).
    \6\ For purposes of this proposal, the Exchange defines a 
``merger strategy'' as transactions done to achieve a merger 
arbitrage involving the purchase, sale and exercise of options of 
the same class and expiration date, executed prior to the date on 
which shareholders of record are required to elect their respective 
form of consideration, i.e., cash or stock. Id.
    \7\ For purposes of this proposal, the Exchange defines a 
``short stock interest strategy'' as transactions done to achieve a 
short stock interest arbitrage involving the purchase, sale and 
exercise of in-the-money options of the same class. Id.
    \8\ See Securities Exchange Act Release Nos. 54381 (August 29, 
2006), 71 FR 52598 (September 6, 2006) (SR-Phlx-2006-50) and 54424 
(September 11, 2006), 71 FR 54699 (September 18, 2006) (SR-Phlx-
2006-55).
---------------------------------------------------------------------------

    The text of the proposed rule change is available on the Exchange's 
Web site (http://www.phlx.com/exchange/phlx_rule_fil.html), at the 
Exchange's principal office, and at the Commission's Public Reference 
Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of, and basis for, the proposed rule change 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 Exchange has prepared summaries, set forth in 
Sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Currently, the Exchange imposes a fee cap on equity option 
transaction and comparison charges on dividend, merger, and short stock 
interest strategies executed on the same trading day in the same 
options class. Specifically, Registered Options Trader (``ROT'') and 
specialist net equity option transaction and comparison charges are 
capped at $1,000 for dividend, merger, and short stock interest 
strategies executed on the same trading day in the same options 
class.\9\ In addition, there is a $25,000 per member organization fee 
cap on equity option transaction and comparison charges incurred in one 
month for dividend, merger, and short stock interest strategies 
combined. The $1,000 and $25,000 fee caps are implemented after any 
applicable rebates are applied to ROT and specialist equity option 
transaction and comparison charges occurring as part of a dividend, 
merger, or short stock interest strategy.\10\
---------------------------------------------------------------------------

    \9\ See Securities Exchange Act Release No. 54424 (September 11, 
2006), 71 FR 54699 (September 18, 2006) (SR-Phlx-2006-55).
    \10\ Currently, the Exchange rebates $0.08 per contract side for 
ROT executions and $0.07 per contract side for trades occurring as 
part of a dividend, merger, or short stock interest strategy.
---------------------------------------------------------------------------

    In addition, the Exchange assesses a license fee of $0.05 per 
contract side for dividend and short stock interest strategies in 
connection with certain products that carry license fees, if 
applicable.\11\ The applicable license fee is assessed on every 
transaction and is not subject to the $1,000 or $25,000 fee caps 
described above, nor does it count towards reaching the $1,000 or 
$25,000 fee caps.
---------------------------------------------------------------------------

    \11\ For a complete list of these product symbols, see the 
Exchange's $60,000 Firm-Related Equity Option and Index Option Cap 
Fee Schedule.
---------------------------------------------------------------------------

    The Exchange represents that the purpose of extending the pilot 
program for the fee caps on equity option transaction and comparison 
charges on dividend, merger, and short stock interest strategies and 
the $0.05 per contract fee imposed on dividend and short stock interest 
strategies until March 1, 2008 is to continue to attract additional 
liquidity to the Exchange and to remain competitive with other options 
exchanges in connection with these types of options strategies. In 
addition, the Exchange also represents that the purpose of extending 
the pilot is to recoup the license fees owed in connection with the 
trading of products that carry license fees. Even with the assessment 
of the $0.05 license fee per contract side, the Exchange believes that 
the fee caps and rebates should continue to encourage specialists and 
ROTs to provide liquidity for these types of options strategies.
    This proposal is scheduled to become effective for trades settling 
on or after March 1, 2007 and will remain in effect as a pilot program 
until March 1, 2008.
2. Statutory Basis
    The Exchange believes that its proposal to amend its schedule of 
fees is consistent with Section 6(b) of the Act,\12\ in general, and 
furthers the objectives of Section 6(b)(4) of the Act,\13\ in 
particular, in that it is an equitable allocation of reasonable fees 
and other charges among Exchange members.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

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

    The foregoing proposed rule change has become effective pursuant to 
Section 19(b)(3)(A)(ii) of the Act \14\ and Rule 19b-4(f)(2) thereunder 
\15\ because it establishes or changes a due, fee, or other charge 
imposed by the Exchange. 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.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \15\ 17 CFR 19b-4(f)(2).

---------------------------------------------------------------------------

[[Page 9830]]

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-2007-14 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-2007-14. 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 Commissions 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 the filing also will be 
available for inspection and copying at the principal office of 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-2007-14 
and should be submitted on or before March 26, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\16\
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-3763 Filed 3-2-07; 8:45 am]
BILLING CODE 8010-01-P