Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing of Proposed Rule Change Relating to Short Interest Reporting, 56427-56429 [E7-19487]
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Federal Register / Vol. 72, No. 191 / Wednesday, October 3, 2007 / Notices
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 the Exchange. 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–NYSEArca–2007–95 and
should be submitted on or before
October 24, 2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.12
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–19535 Filed 10–2–07; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56541; File No. SR–Phlx–
2007–63]
Self-Regulatory Organizations;
Philadelphia Stock Exchange, Inc.;
Notice of Filing of Proposed Rule
Change Relating to Short Interest
Reporting
rwilkins on PROD1PC63 with NOTICES
September 26, 2007.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1, and Rule 19b–4 2 thereunder,
notice is hereby given that on August
16, 2007, the Philadelphia Stock
Exchange, Inc. (‘‘Phlx’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’),
and on September 20, 2007 amended,
the proposed rule change as described
in Items I, II, and III below, which Items
have been substantially prepared by the
Phlx. The Commission is publishing
this notice to solicit comments on the
proposed rule change, as amended, from
interested persons.
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Phlx, pursuant to Section 19(b)(1)
of the Act 3 and Rule 19b–4 thereunder,4
proposes to make a technical
amendment to the text of Phlx Rule 786,
Supplementary Material .01, changing
the reference to Rule 200 of Regulation
SHO to Rule 200(a) of Regulation SHO.
In addition, Phlx proposes to add a new
Supplementary Material section to Rule
786 to amend the exceptions to the short
interest reporting requirement for
certain transactions.
The text of the amended Phlx Rule is
set forth below. Underlining indicates
additions; brackets indicate deletions.
*
*
*
*
*
Rule 786.
Periodic Reports
Member organizations shall submit, as
required by the Exchange, periodic
reports with respect to short positions in
securities.
Supplementary Material: * * *
.01 Short Positions—Member
organizations for which the Exchange is
the designated examining authority
(‘‘DEA’’) are required to report short
positions, including odd-lots, in each
stock or warrant traded on the
Exchange, and in each other stock or
warrant not traded on the Exchange for
which short positions are not otherwise
reported to another United States
securities exchange or association, using
such automated format and methods as
prescribed by the Exchange. Such
reports must include customer and
proprietary positions and must be made
at such times and covering such time
period as may be designated by the
Exchange. Member organizations whose
short positions have properly been
reported to, and are carried by, a nonmember clearing organization will be in
compliance with this rule if adequate
arrangements have been made providing
for the clearing organization to properly
report such positions to the Exchange or
to another United States securities
exchange or association.
• ‘‘Short’’ positions to be reported are
those resulting from ‘‘short’’ sales as
defined in Securities and Exchange
Commission Rule 200(a) of Regulation
SHO, but excluding sales that meet an
exception in .02 below[marked ‘‘sell
short exempt’’ pursuant to Rule 200(g)
of Regulation SHO]. Also, to be
excluded are ‘‘short’’ positions carried
for other members and member
organizations reporting for themselves.
12 17
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PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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56427
Only one report should be made for
each stock or warrant for which there is
a short position, if more than one
‘‘account’’ has a short position in the
same stock or warrant, the combined
aggregate should be reported.
Member organizations for which the
Exchange is not the DEA must report
short positions to its DEA if such DEA
has a requirement for such reports. If the
DEA does not have such a reporting
requirement, then such member
organization must comply with the
provisions of this rule.
.02 Exceptions
(a) Any sale by any person, for an
account in which he has an interest, if
such person owns the security sold and
intends to deliver such security as soon
as is possible without undue
inconvenience or expense.
(b) Any sale of a security covered by
a short sale rule on a national securities
exchange (except a sale to a stabilizing
bid complying with Rule 104 of
Regulation M) effected with the
approval of such exchange which is
necessary to equalize the price of such
security thereon with the current price
of such security on another national
securities exchange which is the
principal exchange market for such
security.
(c) Any sale of a security for a special
arbitrage account by a person who then
owns another security by virtue of which
he is, or presently will be, entitled to
acquire an equivalent number of
securities of the same class as the
securities sold; provided such sale, or
the purchase which such sale offsets, is
effected for the bona fide purpose of
profitting from a current difference
between the price of security sold and
the security owned and that such right
of acquisition was originally attached to
or represented by another security or
was issued to all the holders of any such
class of securities of the issuer.
(d) Any sale of a security registered
on, or admitted to unlisted trading
privileges on, a national securities
exchange effected for a special
international arbitrage account for the
bona fide purpose of profitting from a
current difference between the price of
such security on a securities market not
within or subject to the jurisdiction of
the United States and on a securities
market subject to the jurisdiction of the
United States; provided the seller at the
time of such sale knows or, by virtue of
information currently received, has
reasonable grounds to believe that an
offer enabling him to cover such sale is
then available to him such foreign
securities market and intends to accept
such offer immediately.
E:\FR\FM\03OCN1.SGM
03OCN1
56428
Federal Register / Vol. 72, No. 191 / Wednesday, October 3, 2007 / Notices
(e) Any sale by an underwriter, or any
member of a syndicate or group
participating in the distribution of a
security, in connection with an overallotment of securities, or any lay-off
sale by such a person in connection with
a distribution of securities through
rights or a standby underwriting
commitment.
*
*
*
*
*
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
Phlx 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 Phlx has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
rwilkins on PROD1PC63 with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of the proposed rule
change is to conform Phlx Rule 786 to
other proposed rule changes that other
self-regulatory organizations (‘‘SROs’’)
have filed and will soon file that will
implement uniform changes to the short
interest reporting requirements across
SROs. The purpose of this Amendment
No. 1, which replaces the original
proposed rule change in its entirety, is
to make clarifying changes to the
original proposed rule change.
First, Phlx proposes to make a
technical change to the text of Phlx Rule
786, Supplementary Material .01. Phlx
Rule 786, Supplementary Material .01
provides that, subject to certain limited
exceptions, short positions required to
be reported under the rule are those
resulting from short sales as the term is
defined in Rule 200 of Regulation SHO.
The term ‘‘short sale’’ is actually
defined in Rule 200(a) of Regulation
SHO.5 Therefore, Phlx is proposing to
amend the text of Phlx Rule 786,
Supplementary Material .01 to reference
Rule 200(a) of Regulation SHO, not Rule
200 of Regulation SHO to eliminate any
confusion.
Second, Phlx proposes to add
Supplementary Material .02, and
conforming language in Supplementary
Material .01, which adopts exceptions to
the short interest reporting requirement.
5 17
CFR 242.200(a).
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Currently, any transaction that is
marked ‘‘sell short exempt’’ is exempt
from the reporting requirement.
Beginning on July 6, 2007, the ‘‘short
exempt’’ marking requirement was
eliminated by the Commission.6
Therefore, beginning on July 6, 2007, all
transactions marked short will be
covered by Phlx’s reporting
requirement. However, other SROs are
modifying their short interest reporting
rules to exclude five specific
transactions, which were previously
contained in the now eliminated Rule
10a–1 under the Act.7 The proposed
change should conform Phlx’s reporting
requirement to those of other SROs and
increase uniformity for broker-dealers as
they comply with various rules across
SROs, which should reduce costs and
increase efficiency for those brokerdealers.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act 8 in general, and furthers the
objectives of Section 6(b)(5) of the Act 9
in particular, in that it is designed to
promote just and equitable principles of
trade, to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and, in general to protect
investors and the public interest.
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
Within 35 days of the date of
publication of this notice in the Federal
Register or within such longer period (i)
as the Commission may designate up to
90 days of such date if it finds such
longer period to be appropriate and
publishes its reasons for so finding or
(ii) as to which Phlx consents, the
6 See Securities Exchange Act Release No. 55970
(June 28, 2007), 72 FR 36348 (July 3, 2007).
7 See, e.g., Securities Exchange Act Release No.
56300 (August 22, 2007) (NYSEArca–2007–63), 72
FR 49342 (August 28, 2007).
8 15 U.S.C. 78f(b).
9 15 U.S.C. 78f(b)(5).
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Commission shall: (a) By order approve
such proposed rule change, or (b)
institute proceedings to determine
whether the proposed rule change
should be disapproved.
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
Number SR–Phlx–2007–63 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–2007–63. This file
number should be included on the
subject line if e-mail is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Room, 100 F Street, NE., Washington,
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m.
Copies of the filing also will be available
for inspection and copying at the
principal office of the 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–2007–63 and should
be submitted on or before October 24,
2007.
E:\FR\FM\03OCN1.SGM
03OCN1
Federal Register / Vol. 72, No. 191 / Wednesday, October 3, 2007 / Notices
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.10
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–19487 Filed 10–2–07; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56563; File No. SR–Phlx–
2007–62]
Self-Regulatory Organizations;
Philadelphia Stock Exchange, Inc.;
Order Granting Approval to a
Proposed Rule Change Relating to the
Extension and Expansion of a Pilot
Program To Quote Certain Option
Series in Increments of $0.01
September 27, 2007.
I. Introduction
On August 17, 2007, the Philadelphia
Stock Exchange, Inc. (‘‘Phlx’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’),1 and Rule 19b–4
thereunder,2 a proposed rule change to
extend and expand a pilot program to
quote certain options in smaller
increments (‘‘Pilot Program’’ or ‘‘Pilot’’).
The proposed rule change was
published for comment in the Federal
Register on August 24, 2007.3 The
Commission received one comment
letter on the proposed rule change.4
This order approves the proposed rule
change.
II. Description of the Proposal
Currently, the six options exchanges,
including the Phlx, participate in the
thirteen class Pilot Program,5 which is
scheduled to expire on September 27,
2007.6 The Exchange proposes to extend
10 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. 56284
(August 17, 2007), 72 FR 48722.
4 See letter to Nancy Morris, Secretary,
Commission, from John C. Nagel, Director &
Associate General Counsel, Citadel, dated
September 12, 2007 (‘‘Citadel Letter’’).
5 The thirteen option classes currently in the Pilot
are: Ishares Russell 2000 (IWM); NASDAQ–100
Index Tracking Stock (QQQQ); SemiConductor
Holders Trust (SMH); General Electric Company
(GE); Advanced Micro Devices, Inc. (AMD),
Microsoft Corporation (MSFT); Intel Corporation
(INTC); Caterpillar, Inc. (CAT); Whole Foods
Market, Inc. (WFMI); Texas Instruments, Inc. (TXN);
Flextronics International Ltd. (FLEX); Sun
Microsystems, Inc. (JAVA); and Agilent
Technologies, Inc. (A).
6 The Pilot Program began on January 26, 2007
and is currently set to expire on September 27,
rwilkins on PROD1PC63 with NOTICES
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and expand the Pilot Program to include
fifty additional classes, in two phases.
Phase One will begin on September
28, 2007 and will continue for six
months, until March 27, 2008. Phase
One will add the following twenty-two
options classes to the Pilot: SPDRs
(SPY); Apple, Inc. (AAPL); Altria Group
Inc. (MO); Dendreon Corp. (DNDN);
Amgen Inc. (AMGN); Yahoo! Inc.
(YHOO); QUALCOMM Inc. (QCOM);
General Motors Corporation (GM);
Energy Select Sector (XLE); DIAMONDS
Trust, Series 1 (DIA); Oil Services
HOLDRs (OIH); NYSE Euronext, Inc.
(NYX); Cisco Systems, Inc. (CSCO);
Financial Select Sector SPDR (XLF);
AT&T Inc. (T); Citigroup Inc. (C);
Amazon.com Inc. (AMZN); Motorola
Inc. (MOT); Research in Motion Ltd.
(RIMM); Freeport-McMoRan Copper &
Gold Inc. (FCX); ConocoPhillips (COP);
and Bristol-Myers Squibb Co. (BMY).
These twenty-two options classes are
among the most actively-traded,
multiply-listed options classes, and
account, together with the current
thirteen Pilot classes, for approximately
35% of total industry trading volume.7
Phase Two will begin on March 28,
2008, and will continue for one year,
until March 27, 2009. During the second
phase, the number of options classes
trading in pennies will again increase.
The Exchange proposes to add twentyeight more classes from among the most
actively-traded, multiply-listed options
classes.8
The minimum price variation for all
classes to be included in the Pilot
Program, except for the QQQQs, will
continue to be $0.01 for all quotations
in option series that are quoted at less
than $3 per contract and $0.05 for all
quotations in option series that are
quoted at $3 per contract or greater. The
QQQQs will continue to be quoted in
$0.01 increments for all options series.
During the extended and expanded
Pilot Program, the Phlx commits to
deliver four reports to the Commission.
Each report will analyze the impact of
penny pricing on market quality and
options system capacity. The first report
2007. See Securities Exchange Act Release No.
56141 (July 24, 2007), 72 FR 42216 (August 1, 2007)
(SR–Phlx–2007–53). See also Securities Exchange
Act Release No. 55153 (January 23, 2007), 72 FR
4553 (January 31, 2007) (SR–Phlx–2006–74)
(‘‘Original Pilot Program Approval Order’’). In its
filing, the Phlx proposed to extend the effective
date of conforming amendments to various
Exchange rules in order to be consistent with the
Pilot through March 27, 2009.
7 This volume is based on the Options Clearing
Corporation (‘‘OCC’’) year-to-date trading volume
data through July 16, 2007.
8 The Exchange has committed to file a proposed
rule change under Section 19(b)(3)(A) of the Act to
identify the options classes to be included in the
second expansion.
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56429
will analyze the penny pilot results
from May 1, 2007 through September
27, 2007; the second will analyze the
results from September 28, 2007
through January 31, 2008; the third will
analyze the results from February 1,
2008 through July 31, 2008; and the
fourth and final report will examine the
results from August 1, 2008 through
January 31, 2009. These reports will be
provided to the Commission within
thirty days of the conclusion of the
reporting period.
III. Discussion
After careful review of the proposal
and the comment letter, 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.9 In particular, the
Commission finds that the proposal is
consistent with Section 6(b)(5) of the
Act,10 which requires, among other
things, that the rules of an exchange be
designed to promote just and equitable
principles of trade, to remove
impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, to protect investors and the
public interest.
On June 28, 2005, the Pacific
Exchange (now known as NYSE Arca)
announced its intention to begin
quoting and trading all listed options in
penny increments.11 In June 2006, to
facilitate the orderly transition to
quoting a limited number of options in
penny increments, Chairman Cox sent a
letter to the six options exchanges
urging the exchanges that chose to begin
quoting in smaller increments to plan
for the implementation of a limited
penny pilot program to commence in
January 2007.12 All six of the options
exchanges submitted proposals to
permit quoting a limited number of
classes in smaller increments, and, in
January 2007, the Commission approved
those proposals to implement the
current Pilot Program.13 The exchanges
9 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).
10 15 U.S.C. 78f(b)(5).
11 PCX News Release, ‘‘Pacific Exchange to Trade
Options in Pennies,’’ June 28, 2005.
12 Commission Press Release 2006–91, ‘‘SEC
Chairman Cox Urges Options Exchanges to Start
Limited Penny Quoting,’’ June 7, 2006.
13 See Securities Exchange Act Release Nos.
55153 (January 23, 2007), 72 FR 4553 (January 31,
2007) (SR–Phlx–2006–74); 55162 (January 24,
2007), 72 FR 4738 (February 1, 2007) (Amex–2006–
106); 55155 (January 23, 2007), 72 FR 4741
(February 1, 2007) (SR–BSE–2006–49); 55154
(January 23, 2007), 72 FR 4743 (February 1, 2007)
E:\FR\FM\03OCN1.SGM
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]]>Agencies
[Federal Register Volume 72, Number 191 (Wednesday, October 3, 2007)]
[Notices]
[Pages 56427-56429]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-19487]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56541; File No. SR-Phlx-2007-63]
Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.;
Notice of Filing of Proposed Rule Change Relating to Short Interest
Reporting
September 26, 2007.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\, and Rule 19b-4 \2\ thereunder, notice is hereby given
that on August 16, 2007, the Philadelphia Stock Exchange, Inc.
(``Phlx'' or ``Exchange'') filed with the Securities and Exchange
Commission (``SEC'' or ``Commission''), and on September 20, 2007
amended, the proposed rule change as described in Items I, II, and III
below, which Items have been substantially prepared by the Phlx. 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.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Phlx, pursuant to Section 19(b)(1) of the Act \3\ and Rule 19b-
4 thereunder,\4\ proposes to make a technical amendment to the text of
Phlx Rule 786, Supplementary Material .01, changing the reference to
Rule 200 of Regulation SHO to Rule 200(a) of Regulation SHO. In
addition, Phlx proposes to add a new Supplementary Material section to
Rule 786 to amend the exceptions to the short interest reporting
requirement for certain transactions.
---------------------------------------------------------------------------
\3\ 15 U.S.C. 78s(b)(1).
\4\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
The text of the amended Phlx Rule is set forth below. Underlining
indicates additions; brackets indicate deletions.
* * * * *
Rule 786.
Periodic Reports
Member organizations shall submit, as required by the Exchange,
periodic reports with respect to short positions in securities.
Supplementary Material: * * *
.01 Short Positions--Member organizations for which the Exchange is
the designated examining authority (``DEA'') are required to report
short positions, including odd-lots, in each stock or warrant traded on
the Exchange, and in each other stock or warrant not traded on the
Exchange for which short positions are not otherwise reported to
another United States securities exchange or association, using such
automated format and methods as prescribed by the Exchange. Such
reports must include customer and proprietary positions and must be
made at such times and covering such time period as may be designated
by the Exchange. Member organizations whose short positions have
properly been reported to, and are carried by, a non-member clearing
organization will be in compliance with this rule if adequate
arrangements have been made providing for the clearing organization to
properly report such positions to the Exchange or to another United
States securities exchange or association.
``Short'' positions to be reported are those resulting
from ``short'' sales as defined in Securities and Exchange Commission
Rule 200(a) of Regulation SHO, but excluding sales that meet an
exception in .02 below[marked ``sell short exempt'' pursuant to Rule
200(g) of Regulation SHO]. Also, to be excluded are ``short'' positions
carried for other members and member organizations reporting for
themselves.
Only one report should be made for each stock or warrant for which
there is a short position, if more than one ``account'' has a short
position in the same stock or warrant, the combined aggregate should be
reported.
Member organizations for which the Exchange is not the DEA must
report short positions to its DEA if such DEA has a requirement for
such reports. If the DEA does not have such a reporting requirement,
then such member organization must comply with the provisions of this
rule.
.02 Exceptions
(a) Any sale by any person, for an account in which he has an
interest, if such person owns the security sold and intends to deliver
such security as soon as is possible without undue inconvenience or
expense.
(b) Any sale of a security covered by a short sale rule on a
national securities exchange (except a sale to a stabilizing bid
complying with Rule 104 of Regulation M) effected with the approval of
such exchange which is necessary to equalize the price of such security
thereon with the current price of such security on another national
securities exchange which is the principal exchange market for such
security.
(c) Any sale of a security for a special arbitrage account by a
person who then owns another security by virtue of which he is, or
presently will be, entitled to acquire an equivalent number of
securities of the same class as the securities sold; provided such
sale, or the purchase which such sale offsets, is effected for the bona
fide purpose of profitting from a current difference between the price
of security sold and the security owned and that such right of
acquisition was originally attached to or represented by another
security or was issued to all the holders of any such class of
securities of the issuer.
(d) Any sale of a security registered on, or admitted to unlisted
trading privileges on, a national securities exchange effected for a
special international arbitrage account for the bona fide purpose of
profitting from a current difference between the price of such security
on a securities market not within or subject to the jurisdiction of the
United States and on a securities market subject to the jurisdiction of
the United States; provided the seller at the time of such sale knows
or, by virtue of information currently received, has reasonable grounds
to believe that an offer enabling him to cover such sale is then
available to him such foreign securities market and intends to accept
such offer immediately.
[[Page 56428]]
(e) Any sale by an underwriter, or any member of a syndicate or
group participating in the distribution of a security, in connection
with an over-allotment of securities, or any lay-off sale by such a
person in connection with a distribution of securities through rights
or a standby underwriting commitment.
* * * * *
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 Phlx 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 Phlx 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 purpose of the proposed rule change is to conform Phlx Rule 786
to other proposed rule changes that other self-regulatory organizations
(``SROs'') have filed and will soon file that will implement uniform
changes to the short interest reporting requirements across SROs. The
purpose of this Amendment No. 1, which replaces the original proposed
rule change in its entirety, is to make clarifying changes to the
original proposed rule change.
First, Phlx proposes to make a technical change to the text of Phlx
Rule 786, Supplementary Material .01. Phlx Rule 786, Supplementary
Material .01 provides that, subject to certain limited exceptions,
short positions required to be reported under the rule are those
resulting from short sales as the term is defined in Rule 200 of
Regulation SHO. The term ``short sale'' is actually defined in Rule
200(a) of Regulation SHO.\5\ Therefore, Phlx is proposing to amend the
text of Phlx Rule 786, Supplementary Material .01 to reference Rule
200(a) of Regulation SHO, not Rule 200 of Regulation SHO to eliminate
any confusion.
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\5\ 17 CFR 242.200(a).
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Second, Phlx proposes to add Supplementary Material .02, and
conforming language in Supplementary Material .01, which adopts
exceptions to the short interest reporting requirement. Currently, any
transaction that is marked ``sell short exempt'' is exempt from the
reporting requirement. Beginning on July 6, 2007, the ``short exempt''
marking requirement was eliminated by the Commission.\6\ Therefore,
beginning on July 6, 2007, all transactions marked short will be
covered by Phlx's reporting requirement. However, other SROs are
modifying their short interest reporting rules to exclude five specific
transactions, which were previously contained in the now eliminated
Rule 10a-1 under the Act.\7\ The proposed change should conform Phlx's
reporting requirement to those of other SROs and increase uniformity
for broker-dealers as they comply with various rules across SROs, which
should reduce costs and increase efficiency for those broker-dealers.
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\6\ See Securities Exchange Act Release No. 55970 (June 28,
2007), 72 FR 36348 (July 3, 2007).
\7\ See, e.g., Securities Exchange Act Release No. 56300 (August
22, 2007) (NYSEArca-2007-63), 72 FR 49342 (August 28, 2007).
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \8\ in general, and furthers the objectives of Section
6(b)(5) of the Act \9\ in particular, in that it is designed to promote
just and equitable principles of trade, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general to protect investors and the public interest.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
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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
Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which Phlx consents, the Commission shall: (a) By order approve such
proposed rule change, or (b) institute proceedings to determine whether
the proposed rule change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-Phlx-2007-63 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-2007-63. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the 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-2007-63 and should be
submitted on or before October 24, 2007.
[[Page 56429]]
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-19487 Filed 10-2-07; 8:45 am]
BILLING CODE 8011-01-P
