Self-Regulatory Organizations; New York Stock Exchange LLC; Order Granting Approval of Proposed Rule Change as Modified by Amendment No. 1 Thereto Relating to Rule 103B (“Specialist Stock Allocation”), 53615-53616 [E7-18391]

Download as PDF Federal Register / Vol. 72, No. 181 / Wednesday, September 19, 2007 / Notices subparagraph (f)(2) of Rule 19b–4 thereunder 8 because it establishes or changes a due, fee, or other charge applicable only to a member imposed by the self-regulatory organization. Accordingly, the proposal is effective upon Commission receipt of the filing. 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: Copies of the filing also will be available for inspection and copying at the principal office of Nasdaq. 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–NASDAQ–2007–075 and should be submitted on or before October 10, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.9 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–18390 Filed 9–18–07; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION rwilkins on PROD1PC63 with NOTICES Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–NASDAQ–2007–075 on the subject line. [Release No. 34–56392; File No. SR–NYSE– 2007–42] 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–NASDAQ–2007–075. 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. September 12, 2007. 8 17 CFR 240.19b–4(f)(2). VerDate Aug<31>2005 16:58 Sep 18, 2007 Jkt 211001 Self-Regulatory Organizations; New York Stock Exchange LLC; Order Granting Approval of Proposed Rule Change as Modified by Amendment No. 1 Thereto Relating to Rule 103B (‘‘Specialist Stock Allocation’’) On April 20, 2007, the New York Stock Exchange LLC (‘‘NYSE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934, as amended (‘‘Act’’),1 and Rule 19b–4 thereunder,2 a proposed rule change to amend NYSE Rule 103B (‘‘Specialist Stock Allocation’’). On July 20, 2007, NYSE filed Amendment No. 1 to the proposed rule change. The proposed rule change, as modified by Amendment No. 1, was published for comment in the Federal Register on August 8, 2007.3 The Commission received no comments on the proposal. This order approves the proposed rule change, as modified by Amendment No. 1. The Exchange proposes to permit member organizations to establish policies and procedures to isolate the activities of the member organization that trade ETFs in a specialist capacity while at the same time registered as a specialist in any of an ETF’s component securities. At a minimum, these policies 9 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 56183 (August 2, 2007), 72 FR 44601 (‘‘Notice’’). 1 15 PO 00000 Frm 00094 Fmt 4703 Sfmt 4703 53615 and procedures would have to include information barriers preventing the flow of non-public information between a member organization’s ETF specialist and the member organization’s specialist in an associated component security. Further, the trading of an ETF and its underlying component securities by the same specialist firm would be pre-conditioned on the review of the Exchange’s Division of Member Firm Regulation for the adequacy of the firm’s information barriers.4 Thereafter, the Exchange would periodically evaluate the integrity of information barriers for breaches and weaknesses to ensure that they are adequately designed. In addition, the Exchange will periodically assess its surveillance and examination procedures to determine whether they are adequate in preventing manipulative or improper trading. The Exchange explained that the current rule requiring organizational separation was originally implemented, at least in part, to address the issue of ‘‘wash sales’’ in the context of ETF and component securities.5 The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.6 In particular, the Commission believes that the proposal is consistent with Section 6(b)(5) of the Act,7 which require that the rules of an exchange be designed to promote just and equitable principles of trade, remove impediments to, and perfect the mechanism of, a free and open market and a national market system, and, in general, protect investors and the public interest. This proposal should eliminate certain redundancies and expenses that result from the current rule requiring organizational separation while ensuring that the relevant activities and information of member organizations that trade ETFs and any of an ETF’s component securities in a specialist capacity remain isolated and confidential. It is therefore ordered, pursuant to Section 19(b)(2) of the Act,8 that the proposed rule change (File No. SR– NYSE–2007–42), as modified by 4 See, for example, comparable provisions of NYSE Information Memo 91–22 (June 21, 1991), the NASD/NYSE Joint Memo on Chinese Wall Policies and Procedures for procedural structures to assure the effective containment of trading information. 5 See Securities Exchange Act Release No. 44272 (May 7, 2001), 66 FR 26898 (May 15, 2001) (SR– NYSE–2001–07). 6 In approving this proposed rule change, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 7 15 U.S.C. 78f(b)(5). 8 15 U.S.C. 78s(b)(2). E:\FR\FM\19SEN1.SGM 19SEN1 53616 Federal Register / Vol. 72, No. 181 / Wednesday, September 19, 2007 / Notices Amendment No. 1, be, and hereby is, approved. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.9 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–18391 Filed 9–18–07; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56437; File No. SR–Phlx– 2007–65] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto Relating to U.S. Dollar-Settled Foreign Currency Option Charges September 13, 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 30, 2007, the Philadelphia Stock Exchange, Inc. (‘‘Phlx’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II and III below, which Items have been substantially prepared by the Exchange. On September 11, 2007, the Phlx submitted Amendment No. 1 to the proposed rule change.3 The Phlx has designated this proposal as one changing a due, fee, or other charge under Section 19(b)(3)(A)(ii) of the Act 4 and Rule 19b–4(f)(2) thereunder,5 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. rwilkins on PROD1PC63 with NOTICES I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Phlx proposes to: (1) Eliminate the $0.04 per contract customer option comparison charge for U.S. dollarsettled foreign currency option transactions; (2) adopt a separate fee schedule for U.S. dollar-settled foreign currency option charges; and (3) make technical changes to the current 9 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 In Amendment No. 1, the Exchange made nonsubstantive typographical corrections to the filing. 4 15 U.S.C. 78s(b)(3)(A)(ii). 5 17 CFR 240.19b–4(f)(2). VerDate Aug<31>2005 16:58 Sep 18, 2007 Jkt 211001 Summary of Index Option and U.S. Dollar-Settled Foreign Currency Option Charges fee schedule to update the fee schedule accordingly. This proposal is scheduled to become operative for transactions settling on or after September 4, 2007. The text of the proposed rule change is available on the Exchange’s Web site at www.Phlx.com, at the Phlx, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange intends to update its fees applicable to U.S. dollar-settled foreign currency options in order to attract business and streamline the Exchange’s fee schedule. The Exchange proposes to eliminate the $0.04 per contract comparison charge for transactions in U.S. dollarsettled foreign currency options applicable to customers. Currently, the comparison charge consists of either a $0.03 per contract charge for Registered Option Traders or a $0.04 per contract charge for Firm (Proprietary and Customer Executions). At this time, the Exchange proposes to eliminate the $0.04 per contract customer comparison charge. The $0.03 per contract charge for Registered Option Traders and the $0.04 per contract for Firm (Proprietary) will continue to apply. The Exchange believes that the elimination of the customer comparison charge may attract additional order flow to the Exchange. Currently, the Exchange charges fees for transactions in U.S. dollar-settled foreign currency options in the same manner that it charges for index options so therefore, the index option and U.S. dollar-settled foreign currency options are set forth on the same fee schedule. At this time, the Exchange proposes to separate out the fee schedule for the U.S. dollar-settled foreign currency PO 00000 Frm 00095 Fmt 4703 Sfmt 4703 options and to make technical changes to the current Summary of Index Option and U.S. Dollar-Settled Foreign Currency Option Charges fee schedule to update the fee schedule accordingly. The purpose of this proposal is to set forth the U.S. dollar-settled foreign currency option charges in a fee schedule separate from the index option fee schedule to more readily identify the fees for these products and to simplify the Exchange’s fee schedule. No new index options fees are being adopted pursuant to this proposal. In addition, because this proposal merely deletes the $0.04 per contract comparison charge in connection with U.S. dollar-settled foreign currency option transactions, no new U.S. dollarsettled foreign currency option fees are being adopted pursuant to this proposal. 2. Statutory Basis The Exchange believes that its proposal to amend its schedule of dues, fees and charges is consistent with Section 6(b) of the Act,6 in general, and furthers the objectives of Section 6(b)(4) of the Act,7 in particular, in that it is an equitable allocation of reasonable dues, fees and other charges among Exchange members and issuers and other persons using its facilities.8 The Exchange believes that eliminating the comparison charge for customers is equitable because customer transactions should benefit from reduced fees, which may in turn attract additional customer business to the Exchange for this relatively new product. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change has been designated as a fee change 6 15 U.S.C. 78f(b). U.S.C. 78f(b)(4). 8 For purposes of calculating the 60-day period within which the Commission may summarily abrogate the proposed rule change under Section 19(b)(3)(C) of the Act, the Commission considers the period to commence on September 11, 2007, the date on which the Phlx filed Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C). 7 15 E:\FR\FM\19SEN1.SGM 19SEN1

Agencies

[Federal Register Volume 72, Number 181 (Wednesday, September 19, 2007)]
[Notices]
[Pages 53615-53616]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-18391]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56392; File No. SR-NYSE-2007-42]


Self-Regulatory Organizations; New York Stock Exchange LLC; Order 
Granting Approval of Proposed Rule Change as Modified by Amendment No. 
1 Thereto Relating to Rule 103B (``Specialist Stock Allocation'')

 September 12, 2007.
    On April 20, 2007, the New York Stock Exchange LLC (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934, as amended (``Act''),\1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change to amend NYSE Rule 103B 
(``Specialist Stock Allocation''). On July 20, 2007, NYSE filed 
Amendment No. 1 to the proposed rule change. The proposed rule change, 
as modified by Amendment No. 1, was published for comment in the 
Federal Register on August 8, 2007.\3\ The Commission received no 
comments on the proposal. This order approves the proposed rule change, 
as modified by Amendment No. 1.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 56183 (August 2, 
2007), 72 FR 44601 (``Notice'').
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    The Exchange proposes to permit member organizations to establish 
policies and procedures to isolate the activities of the member 
organization that trade ETFs in a specialist capacity while at the same 
time registered as a specialist in any of an ETF's component 
securities. At a minimum, these policies and procedures would have to 
include information barriers preventing the flow of non-public 
information between a member organization's ETF specialist and the 
member organization's specialist in an associated component security. 
Further, the trading of an ETF and its underlying component securities 
by the same specialist firm would be pre-conditioned on the review of 
the Exchange's Division of Member Firm Regulation for the adequacy of 
the firm's information barriers.\4\ Thereafter, the Exchange would 
periodically evaluate the integrity of information barriers for 
breaches and weaknesses to ensure that they are adequately designed. In 
addition, the Exchange will periodically assess its surveillance and 
examination procedures to determine whether they are adequate in 
preventing manipulative or improper trading. The Exchange explained 
that the current rule requiring organizational separation was 
originally implemented, at least in part, to address the issue of 
``wash sales'' in the context of ETF and component securities.\5\
---------------------------------------------------------------------------

    \4\ See, for example, comparable provisions of NYSE Information 
Memo 91-22 (June 21, 1991), the NASD/NYSE Joint Memo on Chinese Wall 
Policies and Procedures for procedural structures to assure the 
effective containment of trading information.
    \5\ See Securities Exchange Act Release No. 44272 (May 7, 2001), 
66 FR 26898 (May 15, 2001) (SR-NYSE-2001-07).
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    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange.\6\ In 
particular, the Commission believes that the proposal is consistent 
with Section 6(b)(5) of the Act,\7\ which require that the rules of an 
exchange be designed to promote just and equitable principles of trade, 
remove impediments to, and perfect the mechanism of, a free and open 
market and a national market system, and, in general, protect investors 
and the public interest. This proposal should eliminate certain 
redundancies and expenses that result from the current rule requiring 
organizational separation while ensuring that the relevant activities 
and information of member organizations that trade ETFs and any of an 
ETF's component securities in a specialist capacity remain isolated and 
confidential.
---------------------------------------------------------------------------

    \6\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \7\ 15 U.S.C. 78f(b)(5).
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    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\8\ that the proposed rule change (File No. SR-NYSE-2007-42), as 
modified by

[[Page 53616]]

Amendment No. 1, be, and hereby is, approved.
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    \8\ 15 U.S.C. 78s(b)(2).
    \9\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-18391 Filed 9-18-07; 8:45 am]
BILLING CODE 8010-01-P
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