Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change as Modified by Amendment No. 1 Thereto Relating to an Extension of the Penny Quoting Pilot Program, 43300-43302 [E7-15059]
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43300
Federal Register / Vol. 72, No. 149 / Friday, August 3, 2007 / Notices
mstockstill on PROD1PC66 with NOTICES
director at the time of the director’s
permanent disability or death.
5. Applicant’s officers and employees,
including employee directors, are
eligible or have been eligible to receive
options under applicant’s 1996
Employee Stock Option Plan (the ‘‘1996
Employee Plan’’), which expired on
May 21, 2006, and the 2006 Employee
Stock Option Plan (the ‘‘2006 Employee
Plan’’, and, together with the 1996
Employee Plan, the ‘‘Employee Plans’’).
Eligible Directors are not eligible to
receive stock options under the
Employee Plans. The remaining
2,061,304 shares of applicant’s common
stock subject to issuance to officers and
employees under the Employee Plans
represent 11.78% of the 17,502,515
shares of applicant’s common stock
outstanding as of June 30, 2007. Eligible
Directors are eligible or have been
eligible to participate in applicant’s
Director Plans under which 175,749
shares of applicant’s common stock
remain for issuance, representing 1.00%
of shares of applicant’s common stock
outstanding as of June 30, 2007. The
100,000 shares of applicant’s common
stock that may be issued to Eligible
Directors under the 2006 Director Plan
represent 0.57% of shares of applicant’s
common stock outstanding as of June
30, 2007. Therefore, the maximum
number of applicant’s voting securities
that would result from the exercise of all
outstanding options issued and all
options issuable to directors, officers,
and employees under the Director Plans
and the Employee Plans would be
2,237,053 shares of applicant’s common
stock, or approximately 12.78% of
shares of applicant’s common stock
outstanding as of June 30, 2007.
Applicant has no outstanding warrants,
options, or rights to purchase its voting
securities, other than the options
granted or to be granted to its directors,
officers, and employees under the
Director Plans and the Employee Plans.
Applicant’s Legal Analysis
1. Section 63(3) of the Act permits a
BDC to sell its common stock at a price
below current net asset value upon the
exercise of any option issued in
accordance with section 61(a)(3).
Section 61(a)(3)(B) provides, in
pertinent part, that a BDC may issue to
its non-employee directors options to
purchase its voting securities pursuant
to an executive compensation plan,
provided that: (a) The options expire by
their terms within ten years; (b) the
exercise price of the options is not less
than the current market value of the
underlying securities at the date of the
issuance of the options, or if no market
exists, the current net asset value of the
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18:17 Aug 02, 2007
Jkt 211001
voting securities; (c) the proposal to
issue the options is authorized by the
BDC’s shareholders, and is approved by
order of the Commission upon
application; (d) the options are not
transferable except for disposition by
gift, will or intestacy; (e) no investment
adviser of the BDC receives any
compensation described in section
205(a)(1) of the Investment Advisers Act
of 1940, except to the extent permitted
by clause (b)(1) or (b)(2) of that section;
and (f) the BDC does not have a profitsharing plan as described in section
57(n) of the Act.
2. In addition, section 61(a)(3)
provides that the amount of the BDC’s
voting securities that would result from
the exercise of all outstanding warrants,
options, and rights at the time of
issuance may not exceed 25% of the
BDC’s outstanding voting securities,
except that if the amount of voting
securities that would result from the
exercise of all outstanding warrants,
options, and rights issued to the BDC’s
directors, officers, and employees
pursuant to an executive compensation
plan would exceed 15% of the BDC’s
outstanding voting securities, then the
total amount of voting securities that
would result from the exercise of all
outstanding warrants, options, and
rights at the time of issuance will not
exceed 20% of the outstanding voting
securities of the BDC.
3. Applicant represents that its
proposal to grant certain stock options
to Eligible Directors under the 2006
Director Plan meets all the requirements
of section 61(a)(3)(B). Applicant states
that the Board is actively involved in
the oversight of applicant’s affairs and
that it relies extensively on the
judgment and experience of its Board. In
addition to their duties as Board
members generally, applicant states that
the Eligible Directors provide guidance
and advice on financial and operational
issues, credit and loan policies, asset
valuation and strategic direction, as well
as serving on committees. Applicant
believes that the availability of options
under the 2006 Director Plan will
provide significant at-risk incentives to
Eligible Directors to remain on the
Board and devote their best efforts to
ensure applicant’s success. Applicant
states that the options will provide a
means for the Eligible Directors to
increase their ownership interests in
applicant, thereby ensuring close
identification of their interests with
those of applicant and its stockholders.
Applicant asserts that by providing
incentives such as options, applicant
will be better able to maintain
continuity in the Board’s membership
and to attract and retain the highly
PO 00000
Frm 00079
Fmt 4703
Sfmt 4703
experienced, successful and motivated
business and professional people who
are critical to applicant’s success as a
BDC.
4. Applicant states that the maximum
amount of voting securities that would
result from the exercise of all
outstanding options issued or issuable
to the directors, officers, and employees
under the Director Plans and Employee
Plans would be 2,237,053 shares of
applicant’s common stock, or
approximately 12.78% of applicant’s
shares of common stock outstanding as
of June 30, 2007, which is below the
percentage limitations in the Act.
Applicant asserts that, given the
relatively small amount of common
stock issuable to Eligible Directors upon
their exercise of options under the 2006
Director Plan, the exercise of such
options would not, absent extraordinary
circumstances, have a substantial
dilutive effect on the net asset value of
applicant’s common stock.
For the Commission, by the Division of
Investment Management, pursuant to
delegated authority.
Nancy M. Morris,
Secretary.
[FR Doc. E7–15058 Filed 8–2–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56159; File No. SR–Amex–
2007–76]
Self-Regulatory Organizations;
American Stock Exchange LLC; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change as Modified
by Amendment No. 1 Thereto Relating
to an Extension of the Penny Quoting
Pilot Program
July 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 July 25,
2007, the American Stock Exchange LLC
(‘‘Amex’’ 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 Amex. On
July 27, 2007, the Exchange filed
Amendment No. 1 to the proposal. The
Exchange filed the proposal as a ‘‘noncontroversial’’ proposed rule change
pursuant to section 19(b)(3)(A) of the
1 15
2 17
E:\FR\FM\03AUN1.SGM
U.S.C. 78s(b)(1).
CFR 240.19b–4.
03AUN1
Federal Register / Vol. 72, No. 149 / Friday, August 3, 2007 / Notices
Act 3 and Rule 19b–4(f)(6) thereunder,4
which rendered 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
The Exchange proposes to extend
through September 27, 2007 the current
pilot program that permits quoting of a
limited number of options classes in
pennies (the ‘‘Penny Quoting Pilot
Program’’). The text of the proposed rule
change is available at Amex, the
Commission’s Public Reference Room,
and https://www.amex.com.
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.
mstockstill on PROD1PC66 with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Amex is proposing to extend the
current Penny Quoting Pilot Program
through September 27, 2007. The
Exchange believes that an extension of
the Penny Quoting Pilot Program is
appropriate for the purpose of further
studying the effects of penny quoting. In
this manner, a measured and deliberate
expansion of the Penny Quoting Pilot
Program, if warranted, can be better
implemented by the options exchanges.
As approved by the Commission, the
current Penny Quoting Penny Quoting
Pilot Program consists of thirteen (13)
options classes.5 The quoting
requirements in connection with the
Penny Quoting Pilot Program provide
for: (i) A minimum price variation
(‘‘MPV’’) of $0.01 for options with
premiums of up to $3; or (ii) a MPV of
$0.05 for options with premiums of $3
or greater, except for QQQQ options
3 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
5 See Securities Exchange Act Release No. 55162
(January 24, 2007), 72 FR 4738 (February 1, 2007).
which trade at an MPV of $0.01 for all
premiums. As required by the
Commission’s approval order, the Amex
previously filed its pilot report (the
‘‘Amex Pilot Report’’) comparing
quotation and trading activity in the
three (3) months prior to the Penny
Quoting Pilot Program to the first three
(3) months of the Penny Quoting Pilot
Program.
As part of the Penny Quoting Pilot
Program, the Exchange also
implemented a quote mitigation strategy
due to concerns regarding system
capacity. The Exchange believes that the
quote mitigation strategies in place
since the introduction of the Penny
Quoting Pilot Program have been
effective. Therefore, in this filing, the
Exchange is also proposing to extend
the effectiveness of the quote mitigation
strategies through September 27, 2007.
The Amex Pilot Report made the
following findings: (1) Spreads
narrowed meaningfully in all series in
the Pilot classes with the greatest effect
occurring in the lowest premium
options; (2) Quoted size at the top of the
book decreased sharply in all series and
the most in the series with $.01 MPVs;
(3) Volume growth, while difficult to
accurately analyze, was largely limited
to 2 of the 13 Pilot classes; (4) Quote
traffic grew at very significant rates; and
(5) Only 3 of the 13 Pilot classes
achieved the ‘‘most beneficial results’’
of tighter spreads and higher volume
and all 3 were ‘‘index-based’’ products
(SMH, QQQQ, and IWM). The Exchange
believes that an extension of the Penny
Quoting Pilot Program is warranted so
that the Commission and the options
exchanges may better study and
understand the effects of penny quoting.
Based on the experience to date, the
Exchange believes that an extension of
the Penny Quoting Pilot Program
through September 27, 2007 is
appropriate.
2. Statutory Basis
The Exchange believes that its
proposed rule change is consistent with
section 6(b) of the Act 6 in general, and
furthers the objectives of section 6(b)(5)
of the Act,7 in particular, in that it is
designed prevent fraudulent and
manipulative acts and practices, 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.
4 17
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6 15
7 15
PO 00000
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
Frm 00080
Fmt 4703
43301
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 by the Exchange.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The proposed rule change has become
effective pursuant to section 19(b)(3)(A)
of the Act 8 and Rule 19b–4(f)(6)
thereunder,9 because the foregoing
proposed rule 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 if consistent with the
protection of investors and the public
interest.
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.10 However, Rule 19b–
4(f)(6)(iii) permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest.11 The
Exchange has requested that the
Commission waive the 5-day pre-filing
requirement and the 30-day operative
delay. The Commission believes that
waiving the 5-day pre-filing requirement
and the 30-day operative delay is
consistent with the protection of
investors and the public interest
because such waiver will ensure
continuity of the Exchange’s rules and
will allow the Penny Quoting Pilot
Program to remain in effect without
interruption. For these reasons, the
Commission designates the proposal to
be operative upon filing with the
Commission.12
8 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
10 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule
19b–4(f)(6)(iii) requires the self-regulatory
organization to give the Commission notice of its
intent to file the proposed rule change, along with
a brief description and text of the proposed rule
change, at least five business days prior to the date
of filing of the proposed rule change, or such
shorter time as designated by the Commission.
11 17 CFR 240.19b–4(f)(6)(iii).
12 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
9 17
Continued
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03AUN1
43302
Federal Register / Vol. 72, No. 149 / Friday, August 3, 2007 / Notices
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.13
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
Copies of the filing also will be available
for inspection and copying at the
principal office of the Amex. 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–Amex–2007–76 and should
be submitted on orbefore August 24,
2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.14
Nancy M. Morris,
Secretary.
[FR Doc. E7–15059 Filed 8–2–07; 8:45 am]
• 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–Amex–2007–76 on the
subject line.
BILLING CODE 8010–01–P
Paper Comments
Self-Regulatory Organizations; Boston
Stock Exchange, Inc.; Notice of Filing
and Order Granting Accelerated
Approval of Proposed Rule Change as
Modified by Amendment No. 1 To
Extend the Linkage Fee Pilot Program
mstockstill on PROD1PC66 with NOTICES
• 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–Amex–2007–76. 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, 100 F Street, NE., Washington,
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m.
proposed rule’s impact on efficiency, competition,
and capital formation. 15 U.S.C. 78c(f).
13 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 July 27, 2007, the date
on which Amex submitted Amendment No. 1. See
15 U.S.C. 78s(b)(3)(C).
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18:17 Aug 02, 2007
Jkt 211001
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56167; File No. SR–BSE–
2007–33]
July 30, 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 July 9,
2007, Boston Stock Exchange, Inc.
(‘‘BSE’’ 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 Exchange.
On July 25, 2007, the Exchange filed
Amendment No. 1 to the proposed rule
change. This order provides notice of
the proposed rule change, as modified
by Amendment No. 1, and approves the
proposed rule change, as amended, on
an accelerated basis.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The BSE proposes to amend the Fee
Schedule of the Boston Options
Exchange (‘‘BOX’’), the options trading
facility of the BSE, to extend until July
31, 2008, the current pilot program
applicable to the options intermarket
linkage (‘‘Linkage’’) fees and to make
some technical changes to the Fee
14 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
PO 00000
Frm 00081
Fmt 4703
Sfmt 4703
Schedule. The text of the proposed rule
change is available at the Exchange, the
Commission’s Public Reference Room,
and https://www.bostonstock.com.
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 III 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
The Exchange’s fees for Principal
(‘‘P’’) and Principal Acting as Agent
(‘‘P/A’’) Orders 3 executed on BOX
currently operate under a pilot program
scheduled to expire on July 31, 2007.4
The BSE proposes to extend the current
pilot program for such Linkage fees
through July 31, 2008. Because all
Linkage Orders received by BOX are for
the account of a market maker on
another exchange, Linkage fees that are
applicable to P Orders and P/A Orders
are the same as fees applicable to market
makers on other exchanges that submit
orders to BOX outside of Linkage. The
side of a BOX trade opposite a P Order
or P/A Order would be billed normally
as any other BOX trade. Consistent with
the Plan for the Purpose of Creating and
Operating Linkage, no fees will be
charged to a party sending a Satisfaction
Order to BOX. Rather, a fee will be
3 Under Chapter XII, Section 1(j) of the BOX
Rules, a ‘‘Linkage Order’’ means an Immediate or
Cancel order routed through Linkage. There are
three types of Linkage Orders:
(i) ‘‘P/A Order,’’ which is an order for the
principal account of a Market Maker (or equivalent
entity on another Participant Exchange that is
authorized to represent Public Customer orders),
reflecting the terms of a related unexecuted Public
Customer order for which the Market Maker is
acting as agent;
(ii) ‘‘P Order,’’ which is an order for the principal
account of a market maker (or equivalent entity on
another Participant Exchange) and is not a P/A
Order; and
(iii) ‘‘Satisfaction Order,’’ which is an order sent
through Linkage to notify a Participant Exchange of
a Trade-Through and to seek satisfaction of the
liability arising from that Trade-Through.
4 See Securities Exchange Act Release No. 54225
(July 27, 2006), 71 FR 44056 (August 3, 2006) (SR–
BSE 2006–26).
E:\FR\FM\03AUN1.SGM
03AUN1
]]>Agencies
[Federal Register Volume 72, Number 149 (Friday, August 3, 2007)]
[Notices]
[Pages 43300-43302]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-15059]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56159; File No. SR-Amex-2007-76]
Self-Regulatory Organizations; American Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change as
Modified by Amendment No. 1 Thereto Relating to an Extension of the
Penny Quoting Pilot Program
July 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 July 25, 2007, the American Stock Exchange LLC (``Amex'' 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 Amex. On
July 27, 2007, the Exchange filed Amendment No. 1 to the proposal. The
Exchange filed the proposal as a ``non-controversial'' proposed rule
change pursuant to section 19(b)(3)(A) of the
[[Page 43301]]
Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ which rendered 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).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to extend through September 27, 2007 the
current pilot program that permits quoting of a limited number of
options classes in pennies (the ``Penny Quoting Pilot Program''). The
text of the proposed rule change is available at Amex, the Commission's
Public Reference Room, and https://www.amex.com.
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
The Amex is proposing to extend the current Penny Quoting Pilot
Program through September 27, 2007. The Exchange believes that an
extension of the Penny Quoting Pilot Program is appropriate for the
purpose of further studying the effects of penny quoting. In this
manner, a measured and deliberate expansion of the Penny Quoting Pilot
Program, if warranted, can be better implemented by the options
exchanges.
As approved by the Commission, the current Penny Quoting Penny
Quoting Pilot Program consists of thirteen (13) options classes.\5\ The
quoting requirements in connection with the Penny Quoting Pilot Program
provide for: (i) A minimum price variation (``MPV'') of $0.01 for
options with premiums of up to $3; or (ii) a MPV of $0.05 for options
with premiums of $3 or greater, except for QQQQ options which trade at
an MPV of $0.01 for all premiums. As required by the Commission's
approval order, the Amex previously filed its pilot report (the ``Amex
Pilot Report'') comparing quotation and trading activity in the three
(3) months prior to the Penny Quoting Pilot Program to the first three
(3) months of the Penny Quoting Pilot Program.
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 55162 (January 24,
2007), 72 FR 4738 (February 1, 2007).
---------------------------------------------------------------------------
As part of the Penny Quoting Pilot Program, the Exchange also
implemented a quote mitigation strategy due to concerns regarding
system capacity. The Exchange believes that the quote mitigation
strategies in place since the introduction of the Penny Quoting Pilot
Program have been effective. Therefore, in this filing, the Exchange is
also proposing to extend the effectiveness of the quote mitigation
strategies through September 27, 2007.
The Amex Pilot Report made the following findings: (1) Spreads
narrowed meaningfully in all series in the Pilot classes with the
greatest effect occurring in the lowest premium options; (2) Quoted
size at the top of the book decreased sharply in all series and the
most in the series with $.01 MPVs; (3) Volume growth, while difficult
to accurately analyze, was largely limited to 2 of the 13 Pilot
classes; (4) Quote traffic grew at very significant rates; and (5) Only
3 of the 13 Pilot classes achieved the ``most beneficial results'' of
tighter spreads and higher volume and all 3 were ``index-based''
products (SMH, QQQQ, and IWM). The Exchange believes that an extension
of the Penny Quoting Pilot Program is warranted so that the Commission
and the options exchanges may better study and understand the effects
of penny quoting.
Based on the experience to date, the Exchange believes that an
extension of the Penny Quoting Pilot Program through September 27, 2007
is appropriate.
2. Statutory Basis
The Exchange believes that its proposed rule change is consistent
with section 6(b) of the Act \6\ in general, and furthers the
objectives of section 6(b)(5) of the Act,\7\ in particular, in that it
is designed prevent fraudulent and manipulative acts and practices, 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.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f(b).
\7\ 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 by the
Exchange.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The proposed rule change has become effective pursuant to section
19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(6) thereunder,\9\ because
the foregoing proposed rule 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 if consistent with the protection of investors
and the public interest.
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) normally may
not become operative prior to 30-days after the date of filing.\10\
However, Rule 19b-4(f)(6)(iii) permits the Commission to designate a
shorter time if such action is consistent with the protection of
investors and the public interest.\11\ The Exchange has requested that
the Commission waive the 5-day pre-filing requirement and the 30-day
operative delay. The Commission believes that waiving the 5-day pre-
filing requirement and the 30-day operative delay is consistent with
the protection of investors and the public interest because such waiver
will ensure continuity of the Exchange's rules and will allow the Penny
Quoting Pilot Program to remain in effect without interruption. For
these reasons, the Commission designates the proposal to be operative
upon filing with the Commission.\12\
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\10\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires the self-regulatory organization to give the
Commission notice of its intent to file the proposed rule change,
along with a brief description and text of the proposed rule change,
at least five business days prior to the date of filing of the
proposed rule change, or such shorter time as designated by the
Commission.
\11\ 17 CFR 240.19b-4(f)(6)(iii).
\12\ 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. 15 U.S.C. 78c(f).
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[[Page 43302]]
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.\13\
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\13\ 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 July 27, 2007, the date on which Amex submitted
Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-Amex-2007-76 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-Amex-2007-76. 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, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Amex. 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-Amex-2007-76 and should be
submitted on or before August 24, 2007.
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\14\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\14\
Nancy M. Morris,
Secretary.
[FR Doc. E7-15059 Filed 8-2-07; 8:45 am]
BILLING CODE 8010-01-P
