Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto To Adopt a Monthly Fee for Stock Execution Clerks That Handle Stand-Alone Equity Orders, 45855-45856 [E7-15935]

Download as PDF Federal Register / Vol. 72, No. 157 / Wednesday, August 15, 2007 / Notices in the event the value of the underlying gold is no longer calculated or available as required. The Commission further believes that the trading rules and procedures to which the Shares will be subject pursuant to this proposal are consistent with the Act. The Exchange has represented that any securities listed pursuant to this proposal will be deemed equity securities, and subject to existing Exchange rules governing the trading of equity securities. In support of this proposal, the Exchange has made the following representations: (1) The Exchange’s surveillance procedures are adequate to address any concerns associated with the trading of the Shares. (2) The Exchange would inform its members in an Information Bulletin of the special characteristics and risks associated with trading the Shares, including suitability recommendation requirements. (3) The Exchange would require its members to deliver a prospectus to investors purchasing Shares prior to or concurrently with confirmation of a transaction in such Shares and will note this prospectus delivery requirement in the Information Bulletin. This approval order is based on the Exchange’s representations. The Commission finds good cause for approving this proposal before the thirtieth day after the publication of notice thereof in the Federal Register. As noted above, the Commission previously approved the original listing and trading of the Shares on NYSE and the trading of the Shares pursuant to UTP on the Exchange.39 The Commission presently is not aware of any regulatory issue that should cause it to revisit those findings or would preclude the listing and trading of the Shares on the Exchange. Accelerating approval of this proposed rule change would allow the Shares to be listed on the Exchange without undue delay and continuously traded without interruption, to the benefit of investors. ebenthall on PROD1PC69 with NOTICES V. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,40 that the proposed rule change (SR–NYSEArca– 2007–76), as modified by Amendment No. 1 thereto, be, and it hereby is, approved on an accelerated basis. 39 See supra notes 5 and 6. U.S.C. 78s(b)(2). 41 17 CFR 200.30–3(a)(12). 40 15 VerDate Aug<31>2005 15:00 Aug 14, 2007 Jkt 211001 45855 For the Commission, by the Division of Market Regulation, pursuant to delegated authority.41 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–15937 Filed 8–14–07; 8:45 am] Fee, as the $500.00 monthly fee will encompass the $25.00 Trading Floor Personnel Registration Fee. The text of the proposed rule change is available at http://www.phlx.com, the Phlx, and the Commission’s Public Reference Room. BILLING CODE 8010–01–P II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56221; File No. SR–Phlx– 2007–48] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto To Adopt a Monthly Fee for Stock Execution Clerks That Handle StandAlone Equity Orders August 8, 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on June 28, 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 Phlx. On August 7, 2007, Phlx amended the proposed rule change.3 The Exchange filed the proposal pursuant to Section 19(b)(3)(A)(ii) of the Act 4 and Rule 19b–4(f)(2) 5 thereunder, as establishing or changing a due, fee, or other charge applicable to a member, which renders the proposed rule change effective upon filing with the Commission.6 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 Phlx proposes to adopt a monthly fee of $500.00 for stock execution clerks that handle stand-alone equity orders, such as to hedge traders’ options positions. Those stock execution clerks who are assessed the $500.00 monthly fee will no longer pay the $25.00 Trading Floor Personnel Registration 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Amendment No. 1. 4 15 U.S.C. 78s(b)(3)(A)(ii). 5 17 CFR 240.19b–4(f)(2). 6 For purposes of calculating the 60-day abrogation period, the Commission considers the period to have commenced on August 7, 2007, the date the Exchange filed Amendment No. 1. 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 A stock execution clerk is currently defined in Exchange Rule 1090 as any clerk other than a specialist clerk on the Exchange trading floor who functions as an intermediary in a transaction (i) Consummated on the Exchange; (ii) entered verbally for execution other than on the Exchange; or (iii) entered into a third party system designed to execute transactions other than on the Exchange.7 All stock execution clerks must register as such with the Exchange.8 Generally, ‘‘stock execution’’ refers to the service used by options traders to hedge their options trades with the underlying stock. Although stock execution today is often done electronically, stock execution clerks provide a service to Exchange members on the options floor by accepting orders for the purchase and sale of securities underlying options transactions. Once such orders are accepted, the stock execution clerk forwards such orders to the appropriate marketplace for execution. The transactions executed are typically hedging transactions in underlying stocks for Exchange specialists and Registered Options Traders. The transaction may be contingent on an options transaction 9 or 2 17 PO 00000 Frm 00133 Fmt 4703 Sfmt 4703 7 See Exchange Rule 1090, Commentary .01(a). Exchange Rule 620(b). 9 A contingency order is a limit or market order to buy or sell that is contingent upon a condition being satisfied while the order is at the post. For certain options contingency orders, the contingency 8 See E:\FR\FM\15AUN1.SGM Continued 15AUN1 45856 Federal Register / Vol. 72, No. 157 / Wednesday, August 15, 2007 / Notices may stand independently (‘‘stand-alone equity orders’’). The purpose of this proposal is to assess fees commensurate with the activities of stock execution clerks that handle stand-alone equity orders (i.e. orders that are not contingent on an options transaction). For those stock execution clerks that handle orders that are contingent on an options transaction, i.e. orders that are packaged with an options trade, the Exchange currently assesses charges associated with those contingency orders, such as options floor brokerage assessment and option transaction charges. The Exchange, however, does not assess fees in connection with stand-alone equity orders, which may be handled by a variety of intermediaries and which may be executed on different equity markets. The Exchange believes it is appropriate to charge a fee for stock execution clerks performing this function on the options floor because such clerks and such businesses generally are not subject to fees for doing business from the Exchange’s options floor. 2. Statutory Basis The Exchange believes that its proposal to amend its schedule of fees is consistent with Section 6(b) of the Act 10 in general, and furthers the objectives of Section 6(b)(4) of the Act 11 in particular, in that it is an equitable allocation of reasonable fees and other charges among Exchange members. The Exchange believes that it is equitable and reasonable to charge a fee for stock execution clerks that handle stand-alone equity orders because such clerks are generally not subject to Exchange fees for doing business from the Exchange’s options floor. The Exchange believes that the $500.00 monthly fee, which encompasses the $25.00 Trading Floor Personnel Registration Fee, is a reasonable amount to charge stock execution clerks for the ability to perform this service on the options floor. In addition, the monies received as a result of the $500 monthly fee should help raise revenue for the Exchange. ebenthall on PROD1PC69 with NOTICES 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. involves buying or selling the underlying security (generally called ‘‘stock’’ in this proposal). See Exchange Rule 1066(c). 10 15 U.S.C. 78f(b). 11 15 U.S.C. 78f(b)(4). VerDate Aug<31>2005 15:00 Aug 14, 2007 Jkt 211001 C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others A written comment was received by the Exchange.12 III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change has become effective upon filing with the Commission pursuant to Section 19(b)(3)(A)(ii) of the Act 13 and Rule 19b–4(f)(2) thereunder,14 in that the proposed rule change establishes or changes a member due, fee, or other charge imposed by the self-regulatory organization. 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. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–Phlx-2007–48 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 12 A written comment in the form of an e-mail message from Larry Johnson at Wedbush Morgan Securities was sent to Kevin Kennedy (an Exchange employee) on May 29, 2007. In the e-mail message, Mr. Johnson stated, in part, that the $500 fee was ‘‘in no way an impediment for us.’’ This written comment was received in connection with various discussions between Exchange staff and Wedbush, which related in part to what types of activity (including stock execution business) would be allowed on the Exchange’s options floor due to the fact that the Exchange was closing its physical equity trading floor and migrating to XLE, the Exchange’s new equity trading system. The Exchange was addressing this issue, in general, in order to notify former equity floor members who may have been considering establishing some form of operation on the Exchange’s options trading floor and possibly connecting to XLE. 13 15 U.S.C. 78s(b)(3)(A)(ii). 14 17 CFR 240.19b–4(f)(2). PO 00000 Frm 00134 Fmt 4703 Sfmt 4703 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–Phlx-2007–48. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than 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 such 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-2007–48 and should be submitted on or before September 5, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.15 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–15935 Filed 8–14–07; 8:45 am] BILLING CODE 8010–01–P SMALL BUSINESS ADMINISTRATION Reporting and Recordkeeping Requirements Under OMB Review Small Business Administration. Notice of reporting requirements submitted for OMB review. AGENCY: ACTION: SUMMARY: Under the provisions of the Paperwork Reduction Act (44 U.S.C. Chapter 35), agencies are required to submit proposed reporting and recordkeeping requirements to OMB for review and approval, and to publish a notice in the Federal Register notifying 15 17 E:\FR\FM\15AUN1.SGM CFR 200.30–3(a)(12). 15AUN1

Agencies

[Federal Register Volume 72, Number 157 (Wednesday, August 15, 2007)]
[Notices]
[Pages 45855-45856]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-15935]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56221; File No. SR-Phlx-2007-48]


Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
and Amendment No. 1 Thereto To Adopt a Monthly Fee for Stock Execution 
Clerks That Handle Stand-Alone Equity Orders

August 8, 2007.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on June 28, 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 Phlx. On 
August 7, 2007, Phlx amended the proposed rule change.\3\ The Exchange 
filed the proposal pursuant to Section 19(b)(3)(A)(ii) of the Act \4\ 
and Rule 19b-4(f)(2) \5\ thereunder, as establishing or changing a due, 
fee, or other charge applicable to a member, which renders the proposed 
rule change effective upon filing with the Commission.\6\ 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\ See Amendment No. 1.
    \4\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \5\ 17 CFR 240.19b-4(f)(2).
    \6\ For purposes of calculating the 60-day abrogation period, 
the Commission considers the period to have commenced on August 7, 
2007, the date the Exchange filed Amendment No. 1.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Phlx proposes to adopt a monthly fee of $500.00 for stock execution 
clerks that handle stand-alone equity orders, such as to hedge traders' 
options positions. Those stock execution clerks who are assessed the 
$500.00 monthly fee will no longer pay the $25.00 Trading Floor 
Personnel Registration Fee, as the $500.00 monthly fee will encompass 
the $25.00 Trading Floor Personnel Registration Fee. The text of the 
proposed rule change is available at http://www.phlx.com, the Phlx, and 
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
    A stock execution clerk is currently defined in Exchange Rule 1090 
as any clerk other than a specialist clerk on the Exchange trading 
floor who functions as an intermediary in a transaction (i) Consummated 
on the Exchange; (ii) entered verbally for execution other than on the 
Exchange; or (iii) entered into a third party system designed to 
execute transactions other than on the Exchange.\7\ All stock execution 
clerks must register as such with the Exchange.\8\
---------------------------------------------------------------------------

    \7\ See Exchange Rule 1090, Commentary .01(a).
    \8\ See Exchange Rule 620(b).
---------------------------------------------------------------------------

    Generally, ``stock execution'' refers to the service used by 
options traders to hedge their options trades with the underlying 
stock. Although stock execution today is often done electronically, 
stock execution clerks provide a service to Exchange members on the 
options floor by accepting orders for the purchase and sale of 
securities underlying options transactions. Once such orders are 
accepted, the stock execution clerk forwards such orders to the 
appropriate marketplace for execution. The transactions executed are 
typically hedging transactions in underlying stocks for Exchange 
specialists and Registered Options Traders. The transaction may be 
contingent on an options transaction \9\ or

[[Page 45856]]

may stand independently (``stand-alone equity orders'').
---------------------------------------------------------------------------

    \9\ A contingency order is a limit or market order to buy or 
sell that is contingent upon a condition being satisfied while the 
order is at the post. For certain options contingency orders, the 
contingency involves buying or selling the underlying security 
(generally called ``stock'' in this proposal). See Exchange Rule 
1066(c).
---------------------------------------------------------------------------

    The purpose of this proposal is to assess fees commensurate with 
the activities of stock execution clerks that handle stand-alone equity 
orders (i.e. orders that are not contingent on an options transaction). 
For those stock execution clerks that handle orders that are contingent 
on an options transaction, i.e. orders that are packaged with an 
options trade, the Exchange currently assesses charges associated with 
those contingency orders, such as options floor brokerage assessment 
and option transaction charges. The Exchange, however, does not assess 
fees in connection with stand-alone equity orders, which may be handled 
by a variety of intermediaries and which may be executed on different 
equity markets. The Exchange believes it is appropriate to charge a fee 
for stock execution clerks performing this function on the options 
floor because such clerks and such businesses generally are not subject 
to fees for doing business from the Exchange's options floor.
2. Statutory Basis
    The Exchange believes that its proposal to amend its schedule of 
fees is consistent with Section 6(b) of the Act \10\ in general, and 
furthers the objectives of Section 6(b)(4) of the Act \11\ in 
particular, in that it is an equitable allocation of reasonable fees 
and other charges among Exchange members. The Exchange believes that it 
is equitable and reasonable to charge a fee for stock execution clerks 
that handle stand-alone equity orders because such clerks are generally 
not subject to Exchange fees for doing business from the Exchange's 
options floor. The Exchange believes that the $500.00 monthly fee, 
which encompasses the $25.00 Trading Floor Personnel Registration Fee, 
is a reasonable amount to charge stock execution clerks for the ability 
to perform this service on the options floor. In addition, the monies 
received as a result of the $500 monthly fee should help raise revenue 
for the Exchange.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b).
    \11\ 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 by the Exchange.\12\
---------------------------------------------------------------------------

    \12\ A written comment in the form of an e-mail message from 
Larry Johnson at Wedbush Morgan Securities was sent to Kevin Kennedy 
(an Exchange employee) on May 29, 2007. In the e-mail message, Mr. 
Johnson stated, in part, that the $500 fee was ``in no way an 
impediment for us.'' This written comment was received in connection 
with various discussions between Exchange staff and Wedbush, which 
related in part to what types of activity (including stock execution 
business) would be allowed on the Exchange's options floor due to 
the fact that the Exchange was closing its physical equity trading 
floor and migrating to XLE, the Exchange's new equity trading 
system. The Exchange was addressing this issue, in general, in order 
to notify former equity floor members who may have been considering 
establishing some form of operation on the Exchange's options 
trading floor and possibly connecting to XLE.
---------------------------------------------------------------------------

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing proposed rule change has become effective upon filing 
with the Commission pursuant to Section 19(b)(3)(A)(ii) of the Act \13\ 
and Rule 19b-4(f)(2) thereunder,\14\ in that the proposed rule change 
establishes or changes a member due, fee, or other charge imposed by 
the self-regulatory organization. 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\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \14\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-Phlx-2007-48 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-2007-48. This file 
number should be included on the subject line if e-mail is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than 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 such 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-2007-48 and should be 
submitted on or before September 5, 2007.
---------------------------------------------------------------------------

    \15\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\15\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-15935 Filed 8-14-07; 8:45 am]
BILLING CODE 8010-01-P