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]

Download as PDF 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. VerDate Aug<31>2005 16:26 Aug 21, 2007 Jkt 211001 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 http:// 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 22AUN1 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 (http://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 22AUN1 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 (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 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 (http://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). VerDate Aug<31>2005 16:26 Aug 21, 2007 Jkt 211001 47091 PO 00000 Frm 00140 Fmt 4703 5 17 CFR 242.600(b)(30)(ii) and 17 CFR 242.611(b)(6). Sfmt 4703 E:\FR\FM\22AUN1.SGM 22AUN1

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]


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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).
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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 http://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).
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

    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 (http://
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 (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 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\
---------------------------------------------------------------------------

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

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-16526 Filed 8-21-07; 8:45 am]
BILLING CODE 8010-01-P