Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Port Fees as Modified by Amendment No. 1, 10287-10288 [E7-3916]
Download as PDF
<![CDATA[
Federal Register / Vol. 72, No. 44 / Wednesday, March 7, 2007 / Notices
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.12
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–3883 Filed 3–5–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
Release No. 34–55371; File No. SR–
Phlx–2007–06]
Self-Regulatory Organizations;
Philadelphia Stock Exchange, Inc.;
Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change Relating to Port Fees as
Modified by Amendment No. 1
February 28, 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
26, 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
Phlx. On February 28, 2007, the
Exchange submitted Amendment No. 1
to the proposed rule change. The
Exchange has designated this proposal
as one establishing or changing a due,
fee or other charge imposed by the
Exchange under Section 19(b)(3)(A),3
and Rule 19b–4(f)(2) 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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Phlx proposes to implement a fee
for connecting into the Exchange’s
system to enter quotes (‘‘SQF 5 port
fee’’). The SQF port fee would operate
as follows: for the first 5 active SQF
ports,6 a member organization would be
12 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)(2).
5 SQF stands for specialized quote feed and is a
proprietary quoting system that allows specialists,
streaming quote traders and remote streaming quote
traders to connect and send quotes into Phlx XL,
by-passing the Exchange’s Auto-Quote System. See
Exchange Rule 1080, commentary .01(b).
6 Active ports refer to ports that receive inbound
quotes at any time within that month.
sroberts on PROD1PC70 with NOTICES
1 15
VerDate Aug<31>2005
18:25 Mar 06, 2007
Jkt 211001
charged $250 per port per month and,
for each additional active SQF port
(over the first 5 active SQF ports), the
member organization would be charged
$1,000 per port per month.
Additionally, the same member
organization would be credited $0.02
per side for every option contract
executed on the Phlx in that same
month (excluding executions resulting
from dividend, merger and short stock
interest strategies) 7 up to the amount of
the SQF port fees when the member
organization or one of its employees is
designated as a specialist, streaming
quote trader (‘‘SQT’’) or remote
streaming quote trader (‘‘RSQT’’) and
the transaction is billed according to the
specialist or Registered Option Trader
(‘‘ROT’’) transaction and/or comparison
rates.8 The SQF port fee and
corresponding credit would be applied
per member organization.
The SQF port fee (assessed monthly)
became effective February 1, 2007 and
the corresponding $0.02 credit (assessed
per side per executed contract) became
effective for trades settling on or after
February 1, 2007.
The text of the proposed rule change
is available at https://www.Phlx.com, at
the Phlx, and at the Commission’s
Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Phlx included statements concerning
the purpose of and basis for the
proposed rule change and discussed any
comments it received on the proposed
rule change. The text of these statements
may be examined at the places specified
in Item IV below. The Phlx has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of the SQF port fee and
corresponding credit is to encourage
more efficient quoting, which should, in
turn, promote a more efficient use of
SQF ports. The Exchange believes that
using fewer ports should assist in
addressing the current and growing
7 See e.g., Securities Exchange Act Release No.
54424 (September 11, 2006), 71 FR 54699
(September 18, 2006) (SR–Phlx–2006–55).
8 SQTs and RSQTs are assessed fees pursuant to
the ROT rates as SQTs and RSQTs are deemed to
be ROTs. See Exchange Rule 1014(b)(ii)(A) and (B).
PO 00000
Frm 00176
Fmt 4703
Sfmt 4703
10287
quoting and efficiency issues. The
number of ports correlates to quoting
efficiency, in that more efficient quoting
uses fewer ports and fewer ports means
the Exchange’s systems are being used
to process the same number of quotes
more quickly. The credit should also
encourage member organizations to
send more business to the Exchange.
More efficient quoting should, in turn,
result in more executions on the Phlx,
for which the member organization will
receive a credit up to the amount of any
SQF port fees that are incurred.
2. Statutory Basis
The Exchange believes that its
proposal to amend its schedule of fees
is consistent with Section 6(b) of the
Act 9 in general, and furthers the
objectives of Section 6(b)(4) of the Act 10
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 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
A written comment was received
requesting that the Exchange grant an
extension regarding the implementation
date for the port fee.11
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
9 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4).
11 In an email dated January 17, 2007, a member
requested that the date of implementation for the
port fee be delayed. In August 2006, the Exchange
distributed a memorandum, which notified
members/member organizations of the Exchange’s
intention to adopt an SQF port fee in order to
provide such members/member organizations with
the opportunity to change their port arrangements
before the SQF port fee took effect. Originally, the
Exchange anticipated that the port fee would
become effective on November 1, 2006. The
Exchange, however, delayed the implementation
date until February 1, 2007 to allow members/
member organizations additional time to change
their port arrangements. The Exchange believes that
sufficient notice was given to members/member
organizations regarding the proposed port fee,
which includes the August 2006 memorandum and
a delay in the implementation date from November
1, 2006 until February 1, 2007. Therefore, the
Exchange believes that a further delay in the
implementation date as requested was not
warranted.
10 15
E:\FR\FM\07MRN1.SGM
07MRN1
10288
Federal Register / Vol. 72, No. 44 / Wednesday, March 7, 2007 / Notices
19(b)(3)(A)(ii) of the Act 12 and
subparagraph (f)(2) of Rule 19b–4
thereunder,13 since it establishes or
changes a due, fee or other charge
imposed by the Exchange.
At any time within 60 days of the
filing of such 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 the furtherance of the
purposes of the Act.14
the Commission’s Public Reference
Room. Copies of the 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–2007–06 and should
be submitted on or before March 27,
2007.
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.15
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E7–3916 Filed 3–6–07; 8:45 am]
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–2007–06 on the
subject line.
SECURITIES AND EXCHANGE
COMMISSION
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–2007–06. 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
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
sroberts on PROD1PC70 with NOTICES
12 15
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
14 For purposes of calculating the 60-day period
within which the Commission may summarily
abrogate the proposed rule change, the Commission
considers the period to commence on February 28,
2007, the date on which the Exchange filed
Amendment No. 1.
13 17
VerDate Aug<31>2005
18:25 Mar 06, 2007
Jkt 211001
BILLING CODE 8010–01–P
[Release No. 34–55375; File No. SR–Phlx–
2006–31]
Self-Regulatory Organizations;
Philadelphia Stock Exchange, Inc.;
Order Approving Proposed Rule
Change as Modified by Amendment
Nos. 1, 2, and 3 Thereto Relating to
Electronically Submitted Limit Orders
February 28, 2007.
I. Introduction
On May 5, 2006, the Philadelphia
Stock Exchange, Inc. (‘‘Phlx’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’),1 and Rule 19b–4
thereunder,2 a proposed rule change to
offer an additional mechanism for
participants on the Exchange’s
electronic trading platform for options,
Phlx XL, to trade against orders and
electronic quotations. On December 8,
2006, the Exchange filed Amendment
No. 1 to the proposed rule change. The
Exchange filed Amendment No. 2 to the
proposed rule change on January 11,
2007. The proposed rule change, as
modified by Amendment Nos. 1 and 2,
was published for comment in the
Federal Register on January 24, 2007.3
The Exchange filed Amendment No. 3
on February 28, 2007.4 The Commission
15 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 55121
(January 18, 2007), 72 FR 3186.
4 Amendment No. 3 made minor clarifying
changes to Commentary .04 to Phlx Rule 1080.
1 15
PO 00000
Frm 00177
Fmt 4703
Sfmt 4703
received no comment letters on the
proposed rule change. This order
approves the proposed rule change as
modified by Amendment Nos. 1, 2, and
3.
II. Description of the Proposal
The purpose of the proposed rule
change is to offer an additional
mechanism for participants on the
Exchange’s electronic trading platform
for options, Phlx XL,5 to trade against
orders and electronic quotations.
Specifically, the proposal permits SQTs
and RSQTs to enter Immediate or
Cancel (‘‘IOC’’) 6 orders electronically
and expands the types of orders that
non-SQT ROTs and specialists may
enter for their proprietary accounts to
include electronically entered IOC
orders. The proposal also changes the
minimum order size for a ROT Limit
Order from ten contracts to one contract
if such contract is designated IOC.
The Exchange further proposes to
amend Commentary .02 and .03 of Phlx
Rule 1082 to reduce the one-second
‘‘counting period’’ to 1⁄4 of one second
during which SQTs, RSQTs and/or
specialists may eliminate the locked or
crossed markets caused by their
electronic quotations. Any unresolved
locked or crossed markets remaining
after the counting period are
automatically executed.
III. Discussion
After careful review of the proposal,
the Commission finds that the proposed
rule change, as modified by Amendment
Nos. 1, 2, and 3, is consistent with the
requirements of the Act and the rules
and regulations thereunder applicable to
a national securities exchange.7 In
particular, the Commission finds that
the proposal is consistent with Section
6(b)(5) of the Act,8 which requires,
among other things, that the rules of an
exchange be designed to promote just
and equitable principles of trade, to
remove impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, to protect investors and the
public interest.
The Commission believes that the
Phlx’s proposal to expand the order
types that SQTs, RSQTs, non-SQT ROTs
5 See Securities Exchange Act Release No. 50100
(July 27, 2004), 69 FR 46612 (August 3, 2004) (SR–
Phlx–2003–59).
6 An immediate-or-cancel order is an order that is
to be executed in whole or in part as soon as such
order is submitted. Any portion not so executed is
to be treated as cancelled.
7 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
8 15 U.S.C. 78f(b)(5).
E:\FR\FM\07MRN1.SGM
07MRN1
]]>Agencies
[Federal Register Volume 72, Number 44 (Wednesday, March 7, 2007)]
[Notices]
[Pages 10287-10288]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-3916]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Release No. 34-55371; File No. SR-Phlx-2007-06]
Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to Port Fees as Modified by Amendment No. 1
February 28, 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 26, 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
Phlx. On February 28, 2007, the Exchange submitted Amendment No. 1 to
the proposed rule change. The Exchange has designated this proposal as
one establishing or changing a due, fee or other charge imposed by the
Exchange under Section 19(b)(3)(A),\3\ and Rule 19b-4(f)(2)
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.
---------------------------------------------------------------------------
\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)(2).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Phlx proposes to implement a fee for connecting into the
Exchange's system to enter quotes (``SQF \5\ port fee''). The SQF port
fee would operate as follows: for the first 5 active SQF ports,\6\ a
member organization would be charged $250 per port per month and, for
each additional active SQF port (over the first 5 active SQF ports),
the member organization would be charged $1,000 per port per month.
Additionally, the same member organization would be credited $0.02 per
side for every option contract executed on the Phlx in that same month
(excluding executions resulting from dividend, merger and short stock
interest strategies) \7\ up to the amount of the SQF port fees when the
member organization or one of its employees is designated as a
specialist, streaming quote trader (``SQT'') or remote streaming quote
trader (``RSQT'') and the transaction is billed according to the
specialist or Registered Option Trader (``ROT'') transaction and/or
comparison rates.\8\ The SQF port fee and corresponding credit would be
applied per member organization.
---------------------------------------------------------------------------
\5\ SQF stands for specialized quote feed and is a proprietary
quoting system that allows specialists, streaming quote traders and
remote streaming quote traders to connect and send quotes into Phlx
XL, by-passing the Exchange's Auto-Quote System. See Exchange Rule
1080, commentary .01(b).
\6\ Active ports refer to ports that receive inbound quotes at
any time within that month.
\7\ See e.g., Securities Exchange Act Release No. 54424
(September 11, 2006), 71 FR 54699 (September 18, 2006) (SR-Phlx-
2006-55).
\8\ SQTs and RSQTs are assessed fees pursuant to the ROT rates
as SQTs and RSQTs are deemed to be ROTs. See Exchange Rule
1014(b)(ii)(A) and (B).
---------------------------------------------------------------------------
The SQF port fee (assessed monthly) became effective February 1,
2007 and the corresponding $0.02 credit (assessed per side per executed
contract) became effective for trades settling on or after February 1,
2007.
The text of the proposed rule change is available at https://
www.Phlx.com, at the Phlx, and at the Commission's Public Reference
Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Phlx included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Phlx has prepared summaries, set forth in sections
A, B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the SQF port fee and corresponding credit is to
encourage more efficient quoting, which should, in turn, promote a more
efficient use of SQF ports. The Exchange believes that using fewer
ports should assist in addressing the current and growing quoting and
efficiency issues. The number of ports correlates to quoting
efficiency, in that more efficient quoting uses fewer ports and fewer
ports means the Exchange's systems are being used to process the same
number of quotes more quickly. The credit should also encourage member
organizations to send more business to the Exchange. More efficient
quoting should, in turn, result in more executions on the Phlx, for
which the member organization will receive a credit up to the amount of
any SQF port fees that are incurred.
2. Statutory Basis
The Exchange believes that its proposal to amend its schedule of
fees is consistent with Section 6(b) of the Act \9\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \10\ in
particular, in that it is an equitable allocation of reasonable fees
and other charges among Exchange members.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78f(b).
\10\ 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 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
A written comment was received requesting that the Exchange grant
an extension regarding the implementation date for the port fee.\11\
---------------------------------------------------------------------------
\11\ In an email dated January 17, 2007, a member requested that
the date of implementation for the port fee be delayed. In August
2006, the Exchange distributed a memorandum, which notified members/
member organizations of the Exchange's intention to adopt an SQF
port fee in order to provide such members/member organizations with
the opportunity to change their port arrangements before the SQF
port fee took effect. Originally, the Exchange anticipated that the
port fee would become effective on November 1, 2006. The Exchange,
however, delayed the implementation date until February 1, 2007 to
allow members/member organizations additional time to change their
port arrangements. The Exchange believes that sufficient notice was
given to members/member organizations regarding the proposed port
fee, which includes the August 2006 memorandum and a delay in the
implementation date from November 1, 2006 until February 1, 2007.
Therefore, the Exchange believes that a further delay in the
implementation date as requested was not warranted.
---------------------------------------------------------------------------
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
[[Page 10288]]
19(b)(3)(A)(ii) of the Act \12\ and subparagraph (f)(2) of Rule 19b-4
thereunder,\13\ since it establishes or changes a due, fee or other
charge imposed by the Exchange.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78s(b)(3)(A)(ii).
\13\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
At any time within 60 days of the filing of such 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 the furtherance of the purposes of the Act.\14\
---------------------------------------------------------------------------
\14\ For purposes of calculating the 60-day period within which
the Commission may summarily abrogate the proposed rule change, the
Commission considers the period to commence on February 28, 2007,
the date on which the Exchange filed Amendment No. 1.
---------------------------------------------------------------------------
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-2007-06 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-2007-06. 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 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 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-2007-06 and should be submitted on or before March 27, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\15\
---------------------------------------------------------------------------
\15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E7-3916 Filed 3-6-07; 8:45 am]
BILLING CODE 8010-01-P
