Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend a Pilot Program That Increases Position and Exercise Limits for Equity Options and Options on the Nasdaq-100 Tracking Stock, 47089-47091 [E7-16526]
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Federal Register / Vol. 72, No. 162 / Wednesday, August 22, 2007 / Notices
obligations, and is incorporated in rules
of self-regulatory organization and,
through judicial and Commission
decisions, the antifraud provisions of
the federal securities laws.24
The duty of best execution requires
broker-dealers to execute customers’
trades at the most favorable terms
reasonably available under the
circumstances, i.e., at the best
reasonably available price.25 The duty
of best execution requires broker-dealers
to periodically assess the quality of
competing markets to assure that order
flow is directed to the markets
providing the most beneficial terms for
their customer orders.26 Broker-dealers
must examine their procedures for
seeking to obtain best execution in light
of market and technology changes and
modify those practices if necessary to
enable their customers to obtain the best
jlentini on PROD1PC65 with NOTICES
24 Order
Handling Rules Release, 61 FR at 48322.
See also Newton, 135 F.3d at 270. Failure to satisfy
the duty of best execution can constitute fraud
because a broker-dealer, in agreeing to execute a
customer’s order, makes an implied representation
that it will execute it in a manner that maximizes
the customer’s economic gain in the transaction.
See Newton, 135 F.3d at 273 (‘‘[T]he basis for the
duty of best execution is the mutual understanding
that the client is engaging in the trade—and
retaining the services of the broker as his agent—
solely for the purpose of maximizing his own
economic benefit, and that the broker receives her
compensation because she assists the client in
reaching that goal.’’); Marc N. Geman, Securities
Exchange Act Release No. 43963 (February 14,
2001) (citing Newton, but concluding that
respondent fulfilled his duty of best execution). See
also Payment for Order Flow, Securities Exchange
Act Release No. 34902 (October 27, 1994), 59 FR
55006, 55009 (November 2, 1994) (‘‘Payment for
Order Flow Final Rules’’). If the broker-dealer
intends not to act in a manner that maximizes the
customer’s benefit when he accepts the order and
does not disclose this to the customer, the brokerdealer’s implied representation is false. See Newton,
135 F.3d at 273–274.
25 Newton, 135 F.3d at 270. Newton also noted
certain factors relevant to best execution—order
size, trading characteristics of the security, speed of
execution, clearing costs, and the cost and difficulty
of executing an order in a particular market. Id. at
270 n. 2 (citing Payment for Order Flow, Securities
Exchange Act Release No. 33026 (October 6, 1993),
58 FR 52934, 52937–38 (October 13, 1993)
(Proposed Rules)). See In re E.F. Hutton & Co.
(‘‘Manning’’), Securities Exchange Act Release No.
25887 (July 6, 1988). See also Payment for Order
Flow Final Rules, 59 FR at 55008–55009.
26 Order Handling Rules Release, 61 FR at 48322–
48333 (‘‘In conducting the requisite evaluation of its
internal order handling procedures, a broker-dealer
must regularly and rigorously examine execution
quality likely to be obtained from different markets
or market makers trading a security.’’). See also
Newton, 135 F.3d at 271; Market 2000: An
Examination of Current Equity Market
Developments V–4 (SEC Division of Market
Regulation January 1994) (‘‘Without specific
instructions from a customer, however, a brokerdealer should periodically assess the quality of
competing markets to ensure that its order flow is
directed to markets providing the most
advantageous terms for the customer’s order.’’);
Payment for Order Flow Final Rules, 59 FR at
55009.
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16:26 Aug 21, 2007
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reasonably available prices.27 In doing
so, broker-dealers must take into
account price improvement
opportunities, and whether different
markets may be more suitable for
different types of orders or particular
securities.28
For these reasons, the Commission
believes that the proposal is consistent
with the requirements of Section 6(b)(5)
of the Act,29 and will not jeopardize
market integrity or the incentive for
market participants to post competitive
quotes.30
V. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,31 that the
proposed rule change (SR–Amex–2007–
75), as modified by Amendments No. 1
and 2, be, and hereby is, approved on
an accelerated basis.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.32
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–16468 Filed 8–21–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56262; File No. SR–Amex–
2007–86]
Self-Regulatory Organizations;
American Stock Exchange LLC; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change To Extend a
Pilot Program That Increases Position
and Exercise Limits for Equity Options
and Options on the Nasdaq-100
Tracking Stock
August 15, 2007.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
27 Order
Handling Rules, 61 FR at 48323.
Handling Rules, 61 FR at 48323. For
example, in connection with orders that are to be
executed at a market opening price, ‘‘[b]rokerdealers are subject to a best execution duty in
executing customer orders at the opening, and
should take into account the alternative methods in
determining how to obtain best execution for their
customer orders.’’ Disclosure of Order Execution
and Routing Practices, Securities Exchange Act
Release No. 43590 (November 17, 2000), 65 FR
75414, 75422 (December 1, 2000) (adopting new
Rules 11Ac1–5 and 11Ac1–6 under the Act and
noting that alternative methods offered by some
Nasdaq market centers for pre-open orders included
the mid-point of the spread or at the bid or offer).
29 15 U.S.C. 78f(b)(5).
30 Approval of this proposal is in no way an
endorsement of payment for order flow by the
Commission.
31 15 U.S.C. 78s(b)(2).
32 17 CFR 200.30–3(a)(12).
28 Order
PO 00000
Frm 00138
Fmt 4703
Sfmt 4703
47089
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on August 8,
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 Amex. The
Exchange has filed the proposal as a
‘‘non-controversial’’ rule change
pursuant to Section 19(b)(3)(A) of the
Act 3 and Rule 19b–4(f)(6) thereunder,4
which renders it 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 seeks a six-month
extension of its pilot program increasing
the standard position and exercise
limits for options on the QQQQ and
equity option classes traded on the
Exchange (‘‘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,
Amex 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 Exchange is requesting to extend
its current Pilot Program increasing the
standard position and exercise limits for
options on the QQQQ and equity option
classes traded on the Exchange for a
time period of six months from
September 1, 2007, through and
including March 1, 2008.
In March 2005, the Exchange
established the Pilot Program for a six1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
2 17
E:\FR\FM\22AUN1.SGM
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47090
Federal Register / Vol. 72, No. 162 / Wednesday, August 22, 2007 / Notices
month period.5 Under the Pilot
Program, position and exercise limits for
options on the QQQQ and equity
options classes traded on the Exchange
were increased to the following levels:
Current equity option contract limit 6
Pilot program equity option contract limit
13,500
22,500
31,500
60,000
75,000
25,000
50,000
75,000
200,000
250,000
Current QQQQ option contract limit
Pilot program QQQQ option contract limit
300,000
900,000
The standard position limits were last
increased on December 31, 1998.7 Since
that time there has been a steady
increase in the number of accounts that:
(a) Approach the position limit; (b)
exceed the position limit; and (c) are
granted an exemption to the standard
limit. Several member firms have
petitioned the options exchanges to
either eliminate position limits, or in
lieu of total elimination, increase the
current levels and expand the available
hedge exemptions. In addition, a
significant number of accounts that
maintain sizable positions are utilizing
the Pilot Program’s increased equity
option contract limits. Furthermore,
overall volume in the options market
has continually increased over the past
five years. The Exchange believes that
the increase in options volume and lack
of evidence of market manipulation
occurrences over the past twenty years
justifies the proposed increases in the
position and exercise limits.
The Exchange has not encountered
any problems or difficulties relating to
the Pilot Program since its inception.
The instant proposed rule change makes
no substantive change to the Pilot
Program other than to extend it for six
months through and including March 1,
2008.
jlentini on PROD1PC65 with NOTICES
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act 8 in general and furthers the
objective of Section 6(b)(5) of the Act 9
in particular, in that it is designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
5 See Securities Exchange Act Release No. 51316
(March 3, 2005), 70 FR 12251 (March 11, 2005) (SR–
Amex–2005–029). The Pilot Program was extended
four times and is due to expire on September 1,
2007. See Securities Exchange Act Release Nos.
55226 (February 1, 2007), 72 FR 6300 (February 9,
2007) (SR–Amex–2007–15); 54386 (August 30,
2006), 71 FR 52831 (September 7, 2006) (SR–Amex–
2006–75); 53349 (February 22, 2006), 71 FR 10571
(March 1, 2006) (SR–Amex–2006–07); and 52260
(August 15, 2005), 70 FR 48991 (August 22, 2005)
(SR–Amex–2005–082).
VerDate Aug<31>2005
16:26 Aug 21, 2007
Jkt 211001
equitable principles of trade, to foster
cooperation and coordination with
persons engaged in facilitating
transactions in securities, and to remove
impediments to and perfect the
mechanism of a free and open market
and a national market system.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange believes that the
proposed rule change would impose no
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 solicited
or received by the Exchange on this
proposal.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing rule change
does not: (1) Significantly affect the
protection of investors or the public
interest; (2) impose any significant
burden on competition; and (3) become
operative for 30 days from the date of
this filing, or such shorter time as the
Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 10 and Rule 19b–
4(f)(6) thereunder.11
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.12 However, Rule 19b–
6 Except
when the Pilot Program is in effect.
Securities Exchange Act Release No. 40875
(December 31, 1998), 64 FR
8 15 U.S.C. 78f(b).
9 15 U.S.C. 78f(b)(5).
10 15 U.S.C. 78s(b)(3)(A).
11 17 CFR 240.19b–4(f)(6).
12 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule
19b–4(f)(6)(iii) requires that a self-regulatory
organization submit to the Commission written
notice of its intent to file the proposed rule change,
7 See
PO 00000
Frm 00139
Fmt 4703
Sfmt 4703
4(f)(6)(iii) 13 permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange has requested that the
Commission waive the 30-day operative
delay. The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and in the public interest
because it will allow the Pilot Program
to continue uninterrupted. For this
reason, the Commission designates that
the proposed rule change become
operative immediately.14
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 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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
No. SR–Amex–2007–86 on the subject
line.
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. Amex has satisfied the five-day prefiling requirement.
13 Id.
14 For purposes only of waiving the operative
delay, the Commission has considered the proposed
rule’s impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
E:\FR\FM\22AUN1.SGM
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Federal Register / Vol. 72, No. 162 / Wednesday, August 22, 2007 / Notices
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 No.
SR–Amex–2007–86. 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 such filing will also be
available for inspection and copying at
the principal office of 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 No.
SR–Amex–2007–86 and should be
submitted on or before September 12,
2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.15
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–16526 Filed 8–21–07; 8:45 am]
jlentini on PROD1PC65 with NOTICES
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56273; File No. SR–Amex–
2007–91]
The text of the proposed rule change
is available on Exchange’s Web site
(https://www.amex.com), at Amex’s
principal office, and at the
Commission’s Public Reference Room.
August 16, 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 August
16, 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 Amex.
Amex filed the proposal as a ‘‘noncontroversial’’ rule change pursuant to
Section 19(b)(3)(A) of the Act 3 and Rule
19b–4(f)(6) thereunder,4 which renders
the proposal effective upon filing with
the Commission. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
Amex 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. Amex 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
Self-Regulatory Organizations;
American Stock Exchange LLC; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change to Add an
Additional Exemption to Rule 24–AEMI
Relating to Intermarket Sweep Orders
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Amex proposes to amend Rule 24–
AEMI to add an additional exemption to
its general rule against a member
executing a proprietary order while in
possession of a customer order which
could trade at the same price. The
exemption would permit a member
organization to send an intermarket
sweep order (‘‘ISOs’’) as principal under
Regulation NMS, provided that the
member organization yields its principal
execution to any open customer order
that is required to be protected by Rule
24–AEMI and is capable of being filled.
In addition, if the member organization
executed the ISO to facilitate a customer
order at a price inferior to one or more
protected quotations, that customer
must consent to not receiving the better
prices obtained by the ISO or the firm
must yield its principal execution to
that customer. The Exchange proposes
this change to better harmonize Rule
24–AEMI with recent changes to the
corresponding Rule 92 of the New York
Stock Exchange (‘‘NYSE’’).
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
1. Purpose
The Exchange proposes to amend
Rule 24–AEMI to add an exemption so
that a member organization can comply
with its Regulation NMS obligation
without also violating Rule 24–AEMI
when facilitating a customer order that
would otherwise require the firm to
either violate Rule 24–AEMI or trade
through protected quotations. Under the
current rule, if a member organization is
required to route an ISO as principal to
execute against the full displayed size of
any protected quotation in a security,
for example, when facilitating a
customer order at a price inferior to the
national best bid or offer or other
protected quotations and in compliance
with Rules 600(b)(30)(ii) and 611(b)(6)
of Regulation NMS,5 the ISO could
violate Rule 24–AEMI by trading ahead
of or along with an open customer
order.
The proposed exemption provides
that, when routing an ISO, the member
organization must yield its principal
execution to any open customer order
that is required to be protected by Rule
24–AEMI and is capable of accepting
the fill. As defined in Rule 24–AEMI(a),
a customer order that is required to be
protected is an open customer order that
is known to the member organization
before entry of the ISO. In addition, the
proposed exemption would require that,
if a firm executes an ISO to facilitate a
customer order at a price inferior to one
or more protected quotations, that
customer must consent to not receiving
the better price obtained by the ISO or
2 17
15 17
CFR 200.30–3(a)(12).
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16:26 Aug 21, 2007
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47091
PO 00000
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5 17 CFR 242.600(b)(30)(ii) and 17 CFR
242.611(b)(6).
Sfmt 4703
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]]>Agencies
[Federal Register Volume 72, Number 162 (Wednesday, August 22, 2007)]
[Notices]
[Pages 47089-47091]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-16526]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56262; File No. SR-Amex-2007-86]
Self-Regulatory Organizations; American Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Extend a Pilot Program That Increases Position and Exercise Limits for
Equity Options and Options on the Nasdaq-100 Tracking Stock
August 15, 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 August 8, 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 Amex. The
Exchange has filed the proposal as a ``non-controversial'' rule change
pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6)
thereunder,\4\ which renders it 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 seeks a six-month extension of its pilot program
increasing the standard position and exercise limits for options on the
QQQQ and equity option classes traded on the Exchange (``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, Amex 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 Exchange is requesting to extend its current Pilot Program
increasing the standard position and exercise limits for options on the
QQQQ and equity option classes traded on the Exchange for a time period
of six months from September 1, 2007, through and including March 1,
2008.
In March 2005, the Exchange established the Pilot Program for a
six-
[[Page 47090]]
month period.\5\ Under the Pilot Program, position and exercise limits
for options on the QQQQ and equity options classes traded on the
Exchange were increased to the following levels:
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 51316 (March 3,
2005), 70 FR 12251 (March 11, 2005) (SR-Amex-2005-029). The Pilot
Program was extended four times and is due to expire on September 1,
2007. See Securities Exchange Act Release Nos. 55226 (February 1,
2007), 72 FR 6300 (February 9, 2007) (SR-Amex-2007-15); 54386
(August 30, 2006), 71 FR 52831 (September 7, 2006) (SR-Amex-2006-
75); 53349 (February 22, 2006), 71 FR 10571 (March 1, 2006) (SR-
Amex-2006-07); and 52260 (August 15, 2005), 70 FR 48991 (August 22,
2005) (SR-Amex-2005-082).
\6\ Except when the Pilot Program is in effect.
------------------------------------------------------------------------
Current equity option contract Pilot program equity option
limit \6\ contract limit
------------------------------------------------------------------------
13,500 25,000
22,500 50,000
31,500 75,000
60,000 200,000
75,000 250,000
------------------------------------------------------------------------
CurrenPilot program QQQQ option contract
limit
------------------------------------------------------------------------
300,000 900,000
------------------------------------------------------------------------
The standard position limits were last increased on December 31,
1998.\7\ Since that time there has been a steady increase in the number
of accounts that: (a) Approach the position limit; (b) exceed the
position limit; and (c) are granted an exemption to the standard limit.
Several member firms have petitioned the options exchanges to either
eliminate position limits, or in lieu of total elimination, increase
the current levels and expand the available hedge exemptions. In
addition, a significant number of accounts that maintain sizable
positions are utilizing the Pilot Program's increased equity option
contract limits. Furthermore, overall volume in the options market has
continually increased over the past five years. The Exchange believes
that the increase in options volume and lack of evidence of market
manipulation occurrences over the past twenty years justifies the
proposed increases in the position and exercise limits.
---------------------------------------------------------------------------
\7\ See Securities Exchange Act Release No. 40875 (December 31,
1998), 64 FR
---------------------------------------------------------------------------
The Exchange has not encountered any problems or difficulties
relating to the Pilot Program since its inception. The instant proposed
rule change makes no substantive change to the Pilot Program other than
to extend it for six months through and including March 1, 2008.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \8\ in general and furthers the objective of Section
6(b)(5) of the Act \9\ in particular, in that it is designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in facilitating transactions in securities, and to
remove impediments to and perfect the mechanism of a free and open
market and a national market system.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes that the proposed rule change would impose no
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 solicited or received by the Exchange on
this proposal.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing rule change does not: (1) Significantly
affect the protection of investors or the public interest; (2) impose
any significant burden on competition; and (3) become operative for 30
days from the date of this filing, or such shorter time as the
Commission may designate, it has become effective pursuant to Section
19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6) thereunder.\11\
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 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.\12\
However, Rule 19b-4(f)(6)(iii) \13\ permits the Commission to designate
a shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange has requested that the
Commission waive the 30-day operative delay. The Commission believes
that waiving the 30-day operative delay is consistent with the
protection of investors and in the public interest because it will
allow the Pilot Program to continue uninterrupted. For this reason, the
Commission designates that the proposed rule change become operative
immediately.\14\
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\12\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires that a self-regulatory organization submit to
the Commission written 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. Amex has satisfied the five-day pre-filing
requirement.
\13\ Id.
\14\ For purposes only of waiving the operative delay, the
Commission has considered the proposed rule's impact on efficiency,
competition, and capital formation. See 15 U.S.C. 78c(f).
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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 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 (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File No. SR-Amex-2007-86 on the subject line.
[[Page 47091]]
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 No. SR-Amex-2007-86. 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 such filing will also be available for
inspection and copying at the principal office of 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 No. SR-Amex-2007-86 and should be
submitted on or before September 12, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-16526 Filed 8-21-07; 8:45 am]
BILLING CODE 8010-01-P
