Self-Regulatory Organizations; American Stock Exchange LLC: Notice of Filing and Order Granting Accelerated Approval to Proposed Rule Change, as Amended, Relating to Linkage Order; Boston Stock Exchange, Inc., Chicago Board Options Exchange, Incorporated; International Securities Exchange, LLC, NYSE Arca, Inc., and Philadelphia Stock Exchange, Inc.: Notice of Filing and Order Granting Accelerated Approval to a Proposed Rule Change Relating to Linkage Orders, 70354-70356 [E7-23923]

Download as PDF 70354 Federal Register / Vol. 72, No. 237 / Tuesday, December 11, 2007 / Notices respond to a Linkage Order and the amount of time a member sending a Linkage Order must wait before trading through a nonresponsive Participant should facilitate the more timely execution of orders across the options markets. In addition, the Commission finds that it is appropriate to summarily put into effect Joint Amendment No. 25 upon publication of this notice on a temporary basis for 120 days. The Commission believes that such action is appropriate in the public interest, for the protection of investors and the maintenance of fair and orderly markets, because it will facilitate implementation of the Joint Amendment No. 25 in conjunction with the recent expansion of the options penny quoting pilot program. Copies of such filings also will be available for inspection and copying at the principal offices of the Amex, BSE, CBOE, ISE, NYSE Arca, and 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 publicly available. All submissions should refer to File Number 4–429 and should be submitted on or before January 2, 2008. V. Conclusion It is therefore ordered, pursuant to Section 11A of the Act 10 and Rule 608(b)(4) thereunder,11 that Joint Amendment No. 25 is summarily put into effect until April 9, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–23920 Filed 12–10–07; 8:45 am] 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 4–429 on the subject line. pwalker on PROD1PC71 with NOTICES IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether proposed Joint Amendment No. 25 is consistent with the Act. Comments may be submitted by any of the following methods: SECURITIES AND EXCHANGE COMMISSION 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 4–429. 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. VerDate Aug<31>2005 19:12 Dec 10, 2007 Jkt 214001 BILLING CODE 8011–01–P [Release No. 34–56898; File Nos. SR–Amex– 2007–124; SR–BSE–2007–50; SR–CBOE– 2007–144; SR–ISE–2007–108; SR– NYSEArca–2007–116; SR–Phlx–2007–88] Self-Regulatory Organizations; American Stock Exchange LLC: Notice of Filing and Order Granting Accelerated Approval to Proposed Rule Change, as Amended, Relating to Linkage Order; Boston Stock Exchange, Inc., Chicago Board Options Exchange, Incorporated; International Securities Exchange, LLC, NYSE Arca, Inc., and Philadelphia Stock Exchange, Inc.: Notice of Filing and Order Granting Accelerated Approval to a Proposed Rule Change Relating to Linkage Orders December 5, 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 November 28, 2007, November 28, 2007, November 27, 2007, November 13, 2007, December 4, 2007, and November 27, 2007, the American Stock Exchange LLC (‘‘Amex’’), the Boston Stock Exchange, Inc. (‘‘BSE’’), the Chicago Board Options Exchange, Incorporated (‘‘CBOE’’); the 10 15 U.S.C. 78k–1. CFR 242.608(b)(4). 12 17 CFR 200.30–3(a)(29). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 11 17 PO 00000 Frm 00066 Fmt 4703 Sfmt 4703 International Securities Exchange, LLC (‘‘ISE’’), the NYSE Arca, Inc. (‘‘NYSE Arca’’), and the Philadelphia Stock Exchange, Inc. (‘‘Phlx’’) (each, an ‘‘Exchange’’ and, collectively, the ‘‘Exchanges’’), respectively, filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule changes as described in Items I and II below. On December 4, 2007, Amex filed Amendment No. 1 to its proposed rule change. The Commission is publishing this notice to solicit comments on the proposed rule changes from interested persons and is approving the proposed rule changes on an accelerated basis. I. Self-Regulatory Organizations’ Statement of the Terms of Substance of the Proposed Rule Changes The Exchanges propose to amend their respective rules pertaining to the Intermarket Options Linkage (‘‘Linkage’’) to conform such rules to Joint Amendment No. 25 3 of the Plan for the Purpose of Creating and Operating an Intermarket Option Linkage (‘‘Linkage Plan’’).4 The text of the proposed rule changes are available at the Exchanges’ Web sites,5 the Exchanges’ principal offices, and at the Commission’s Public Reference Room. II. Self-Regulatory Organizations’ Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Changes In its filing with the Commission, each Exchange included statements concerning the purpose of, and basis for, its proposed rule change and discussed any comments it received on the proposed rule change. The text of the statements may be examined at the places specified in Item III below. The Exchanges have prepared summaries, set forth in Sections A, B, and C, below, of the most significant aspects of such statements. 3 See Securities Exchange Act Release No. 56893 (December 4, 2007). 4 On July 28, 2000, the Commission approved a national market system plan for the purpose of creating and operating an intermarket options market linkage (‘‘Linkage’’) proposed by Amex, CBOE, and ISE. See Securities Exchange Act Release No. 43086 (July 28, 2000), 65 FR 48023 (August 4, 2000). Subsequently, Phlx, Pacific Exchange, Inc. (n/k/a NYSE Arca, Inc.), and BSE joined the Linkage Plan. See Securities Exchange Act Release Nos. 43573 (November 16, 2000), 65 FR 70851 (November 28, 2000); 43574 (November 16, 2000), 65 FR 70850 (November 28, 2000); and 49198 (February 5, 2004), 69 FR 7029 (February 12, 2004). 5 See https://www.amex.com, https:// www.bostonstock.com, https://www.cboe.com, https://www.iseoptions.com, https://www.nyse.com, and https://www.phlx.com. E:\FR\FM\11DEN1.SGM 11DEN1 Federal Register / Vol. 72, No. 237 / Tuesday, December 11, 2007 / Notices system, and, in general, to protect investors and the public interest. A. Self-Regulatory Organizations’ Statement for the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchanges propose to reduce certain ‘‘turn-around’’ times in the Linkage to 3 seconds. Specifically, if a member 6 of an Exchange does not receive a response to its Linkage Order 7 seconds, that member would be able to reject any response purporting to be an execution received thereafter. The member would also be able to trade through the Exchange that failed to respond within 3 seconds after receiving that order and, if the Exchange that sent the Linkage Order cancels such response, the member would be required to cancel any purported trade resulting from that order. The Exchanges state that, as they have become more automated, experience with Linkage indicates that reducing the turn-around time to 3 seconds is expected to facilitate speedy executions of orders while not adversely affecting the ability of members to make markets on their Exchanges. The Exchanges submitted the proposed rule changes in conjunction with Joint Amendment No. 25 to the Linkage Plan.8 2. Statutory Basis pwalker on PROD1PC71 with NOTICES The Exchanges believe the proposed rule changes are consistent with the Act and the rules and regulations under the Act applicable to national securities exchanges and, in particular, the requirements of Section 6(b) of the Act.9 Specifically, the Exchanges believe the proposed rule changes are consistent with the requirements of Section 6(b)(5) of the Act 10 that the rules of an exchange be designed to prevent fraudulent and manipulative acts, 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 6 The term ‘‘member,’’ as used herein, includes NYSE Arca OTP Holders and OTP Firms and Boston Options Exchange (‘‘BOX’’) Options Participants. See NYSE Arca Rules 1.1(q) and 1.1(r) and Chapter 1, Sec. 1(a)(40) of BOX Rules, respectively. 7 See Section 2(16) of the Linkage Plan. For the purposes of these proposed rule changes only, references to ‘‘Linkage Orders’’ herein pertain to Principal Acting as Agent (‘‘P/A’’) Order and Principal Orders. See Section 2(16)(a) and (b) of the Linkage Plan, respectively, for definitions of ‘‘P/A Order’’ and ‘‘Principal Order.’’ 8 Joint Amendment No. 25 to the Linkage Plan became summarily effective for a period not to exceed 120 days on December 4, 2007. See supra note 3. 9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(5). VerDate Aug<31>2005 19:12 Dec 10, 2007 Jkt 214001 B. Self-Regulatory Organizations’ Statement on Burden on Competition The Exchanges believe that the proposed rule changes would impose no burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organizations’ Statement on Comments on the Proposed Rule Changes Received From Members, Participants or Others The Exchanges have neither solicited nor received comments on these proposals. III. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule changes are 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 Numbers SR-Amex-2007–124; SR–BSE– 2007–50; SR–CBOE–2007–144; SR–ISE– 2007–108; SR-NYSEArca-2007–116; SRPhlx-2007–88 in 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 Numbers SR-Amex-2007–124; SR–BSE– 2007–50; SR–CBOE–2007–144; SR–ISE– 2007–108; SR-NYSEArca-2007–116; SRPhlx-2007–88. These file numbers 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 PO 00000 Frm 00067 Fmt 4703 Sfmt 4703 70355 available for inspection and copying in the Commission’s Public Reference Section, 100 F Street, NE., Washington, DC 20549–1090 on 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 Exchanges. 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 Numbers SR-Amex-2007–124; SR–BSE– 2007–50; SR–CBOE–2007–144; SR–ISE– 2007–108; SR-NYSEArca-2007–116; SRPhlx-2007–88 and should be submitted on or before January 2, 2008. IV. Commission’s Findings and Order Granting Accelerated Approval of Proposed Rule Changes After careful consideration, the Commission finds that the proposed rule changes are consistent with the requirements of the Act and the rules and regulations thereunder, applicable to national securities exchanges.11 In particular, the Commission finds that the proposals are consistent with the provisions of Section 6(b)(5) of the Act 12 in that they are 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. The Commission believes that reducing the time required by an Exchange to respond to a Linkage Order and reducing the amount of time a member sending a Linkage Order must wait before trading through a nonresponsive Exchange should facilitate the more timely execution of orders across the Exchanges. The Commission also finds good cause, pursuant to Section 19(b)(2) of the Act 13 for approving the proposal prior to the thirtieth day after the date of publication of the notice of the filing thereof in the Federal Register. Granting accelerated approval would facilitate the implementation of these changes in conjunction with the implementation of Joint Amendment No. 25 to the Linkage Plan.14 11 In approving these proposed rule changes, the Commission has considered their impact on efficiency, competition, and capital formation. See U.S.C. 78c(f). 12 15 U.S.C. 78f(b)(5). 13 15 U.S.C. 78s(b)(2). 14 See supra note 8. E:\FR\FM\11DEN1.SGM 11DEN1 70356 Federal Register / Vol. 72, No. 237 / Tuesday, December 11, 2007 / Notices V. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act, that the proposed rule change (SR-Amex-2007– 124), as amended, and proposed rule changes (SR–BSE–2007–50; SR–CBOE– 2007–144; SR–ISE–2007–108; SRNYSEArca-2007–116; SR-Phlx-2007–88) are hereby approved on an accelerated basis. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.15 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–23923 Filed 12–10–07; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56903; File No. SR–CBOE– 2007–68] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Approving Proposed Rule Change, as Modified by Amendment No. 1, Relating to StockOption Orders December 5, 2007. I. Introduction On June 20, 2007, the Chicago Board Options Exchange, Incorporated (‘‘CBOE’’ 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 proposal to amend its rules to provide for the electronic handling and execution of stock-option orders. The CBOE filed Amendment No. 1 to the proposal on October 19, 2007.3 The proposed rule change, as modified by Amendment No. 1, was published for comment in the Federal Register on October 31, 2007.4 The Commission received no comments regarding the proposed rule change, as amended. This order approves the proposed rule change, as modified by Amendment No. 1. II. Description of the Proposal Currently, stock-option orders 5 are handled manually on the CBOE and the 15 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 Amendment No. 1 replaces the original filing in its entirety. 4 See Securities Exchange Act Release No. 56701 (October 25, 2007), 72 FR 61694. 5 A stock-option order is an order to buy or sell a stated number of units of an underlying or a pwalker on PROD1PC71 with NOTICES 1 15 VerDate Aug<31>2005 19:12 Dec 10, 2007 Jkt 214001 options component is traded in open outcry. The CBOE proposes to amend CBOE Rule 6.53C, ‘‘Complex Orders on the Hybrid System,’’ to allow stockoption orders to be submitted to the Complex Order Book (‘‘COB’’) or executed via a Complex Order Auction (‘‘COA’’).6 The stock component of a stock-option order will be executed electronically on the CBOE’s electronic stock trading facility, the CBOE Stock Exchange (‘‘CBSX’’), consistent with CBSX’s order execution rules.7 A stockoption order will not be executed on the CBOE’s Hybrid System unless the stock leg is executable on CBSX at the price(s) necessary to achieve the desired net price.8 An electronic stock-option order accepted by the Hybrid System will be auctioned in a COA when the requirements for an auction are met. An unexecuted stock-option order also could be maintained in the COB or on a PAR workstation, either of which would monitor the marketability of the order, taking into account the CBSX market for the execution of the stock component of the order. Under the proposal, the CBOE proposes to process stock-option orders in a manner that is substantially similar to the way that the CBOE currently processes complex orders comprised solely of options. However, a stockoption order submitted to the COB would seek to trade first against other stock-option orders in the COB, and second against individual orders or quotes on the CBOE.9 Similarly, a stockoption order submitted to a COA would trade in the sequence set forth in CBOE Rule 6.53C(d)(v)(1)–(4), except that subparagraph (d)(v)(1), relating to individual orders and quotes residing in the EBook, would be applied last in sequence.10 The CBOE believes that related security coupled with either (a) the purchase or sale of option contract(s) on the opposite side of the market representing either the same number of units of the underlying or related security or the number of units of the underlying security necessary to create a delta neutral position or (b) the purchase or sale of an equal number of put and call option contracts, each having the same exercise price, expiration date and each representing the same number of units of stock as, and on the opposite side of the market from, the underlying security or related security portion of the order. See CBOE Rule 1.1(ii) and CBOE Rule 6.53C(a)(10). 6 See CBOE Rule 6.53C, Commentary .06 (c) and (d). 7 See CBOE Rule 6.53C, Commentary .06(a). 8 See CBOE Rule 6.53C, Commentary .06(a). 9 See CBOE Rule 6.53C, Commentary .06(c). In contrast, a complex order comprised solely of options would seek to execute first against orders and quotes in the EBook, if possible, and then against other complex orders in the COB. See CBOE Rule 6.53C(c)(ii). 10 See CBOE Rule 6.53C, Commentary .06(d). PO 00000 Frm 00068 Fmt 4703 Sfmt 4703 because a portion of a stock-option order would be executed on a different platform (CBSX), it is more practical to execute resting stock-option orders against other stock-option orders received by the Hybrid System before scanning for executions against the legs on the CBSX book and the Hybrid options book. The options leg of a stock-option order will not trade ahead of any public customer option resting on the Hybrid book. Specifically, the options leg of a stock-option order will not be executed on the Hybrid System at the CBOE’s best bid (offer) in a series if one or more public customer orders are resting on the electronic book at that price, unless the options leg trades with such public customer order(s).11 Accordingly, the CBOE notes that the proposal is consistent with CBOE Rule 6.45A(b)(iii), which provides the options leg of a stock-option order with priority over bids (offers) in the trading crowd at the same price, but not over public customer bids (offers) in the limit order book at the same price.12 III. Discussion After careful review, the Commission finds that the proposed rule change, as amended, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.13 In particular, the Commission finds that the proposal is consistent with section 6(b)(5) of the Act,14 which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices, 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 11 See CBOE Rule 6.53C, Commentary .06(b). CBOE provides the following example to illustrate how the Hybrid System would protect the priority of a resting public customer options order: a customer enters a stock-option order to buy 100 shares of XYZ (trading at around $40) and sell a 45 call with a net price of $39.00. A public customer order to sell the 45 call for $1 is resting on the Hybrid book. When executing the stock-option order against auction responses, the Hybrid System will not allow the options leg of the transaction to trade at $1 or higher, thereby preserving the resting limit order’s priority at that price. An execution could occur where the options leg prints at $0.99 and the stock trade prints at $39.99, in accordance with CBSX priority rules. This execution would meet the stock-option order’s limit price and would not violate priority on CBOE or CBSX. 13 In approving the 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). 14 15 U.S.C. 78f(b)(5). 12 The E:\FR\FM\11DEN1.SGM 11DEN1

Agencies

[Federal Register Volume 72, Number 237 (Tuesday, December 11, 2007)]
[Notices]
[Pages 70354-70356]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-23923]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56898; File Nos. SR-Amex-2007-124; SR-BSE-2007-50; SR-
CBOE-2007-144; SR-ISE-2007-108; SR-NYSEArca-2007-116; SR-Phlx-2007-88]


Self-Regulatory Organizations; American Stock Exchange LLC: 
Notice of Filing and Order Granting Accelerated Approval to Proposed 
Rule Change, as Amended, Relating to Linkage Order; Boston Stock 
Exchange, Inc., Chicago Board Options Exchange, Incorporated; 
International Securities Exchange, LLC, NYSE Arca, Inc., and 
Philadelphia Stock Exchange, Inc.: Notice of Filing and Order Granting 
Accelerated Approval to a Proposed Rule Change Relating to Linkage 
Orders

December 5, 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 November 28, 2007, November 28, 2007, November 27, 2007, November 
13, 2007, December 4, 2007, and November 27, 2007, the American Stock 
Exchange LLC (``Amex''), the Boston Stock Exchange, Inc. (``BSE''), the 
Chicago Board Options Exchange, Incorporated (``CBOE''); the 
International Securities Exchange, LLC (``ISE''), the NYSE Arca, Inc. 
(``NYSE Arca''), and the Philadelphia Stock Exchange, Inc. (``Phlx'') 
(each, an ``Exchange'' and, collectively, the ``Exchanges''), 
respectively, filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule changes as described in Items I and 
II below. On December 4, 2007, Amex filed Amendment No. 1 to its 
proposed rule change. The Commission is publishing this notice to 
solicit comments on the proposed rule changes from interested persons 
and is approving the proposed rule changes on an accelerated basis.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organizations' Statement of the Terms of Substance 
of the Proposed Rule Changes

    The Exchanges propose to amend their respective rules pertaining to 
the Intermarket Options Linkage (``Linkage'') to conform such rules to 
Joint Amendment No. 25 \3\ of the Plan for the Purpose of Creating and 
Operating an Intermarket Option Linkage (``Linkage Plan'').\4\ The text 
of the proposed rule changes are available at the Exchanges' Web 
sites,\5\ the Exchanges' principal offices, and at the Commission's 
Public Reference Room.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 56893 (December 4, 
2007).
    \4\ On July 28, 2000, the Commission approved a national market 
system plan for the purpose of creating and operating an intermarket 
options market linkage (``Linkage'') proposed by Amex, CBOE, and 
ISE. See Securities Exchange Act Release No. 43086 (July 28, 2000), 
65 FR 48023 (August 4, 2000). Subsequently, Phlx, Pacific Exchange, 
Inc. (n/k/a NYSE Arca, Inc.), and BSE joined the Linkage Plan. See 
Securities Exchange Act Release Nos. 43573 (November 16, 2000), 65 
FR 70851 (November 28, 2000); 43574 (November 16, 2000), 65 FR 70850 
(November 28, 2000); and 49198 (February 5, 2004), 69 FR 7029 
(February 12, 2004).
    \5\ See https://www.amex.com, https://www.bostonstock.com, https://
www.cboe.com, https://www.iseoptions.com, https://www.nyse.com, and 
https://www.phlx.com.
---------------------------------------------------------------------------

II. Self-Regulatory Organizations' Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Changes

    In its filing with the Commission, each Exchange included 
statements concerning the purpose of, and basis for, its proposed rule 
change and discussed any comments it received on the proposed rule 
change. The text of the statements may be examined at the places 
specified in Item III below. The Exchanges have prepared summaries, set 
forth in Sections A, B, and C, below, of the most significant aspects 
of such statements.

[[Page 70355]]

A. Self-Regulatory Organizations' Statement for the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchanges propose to reduce certain ``turn-around'' times in 
the Linkage to 3 seconds. Specifically, if a member \6\ of an Exchange 
does not receive a response to its Linkage Order \7\ seconds, that 
member would be able to reject any response purporting to be an 
execution received thereafter. The member would also be able to trade 
through the Exchange that failed to respond within 3 seconds after 
receiving that order and, if the Exchange that sent the Linkage Order 
cancels such response, the member would be required to cancel any 
purported trade resulting from that order. The Exchanges state that, as 
they have become more automated, experience with Linkage indicates that 
reducing the turn-around time to 3 seconds is expected to facilitate 
speedy executions of orders while not adversely affecting the ability 
of members to make markets on their Exchanges. The Exchanges submitted 
the proposed rule changes in conjunction with Joint Amendment No. 25 to 
the Linkage Plan.\8\
---------------------------------------------------------------------------

    \6\ The term ``member,'' as used herein, includes NYSE Arca OTP 
Holders and OTP Firms and Boston Options Exchange (``BOX'') Options 
Participants. See NYSE Arca Rules 1.1(q) and 1.1(r) and Chapter 1, 
Sec. 1(a)(40) of BOX Rules, respectively.
    \7\ See Section 2(16) of the Linkage Plan. For the purposes of 
these proposed rule changes only, references to ``Linkage Orders'' 
herein pertain to Principal Acting as Agent (``P/A'') Order and 
Principal Orders. See Section 2(16)(a) and (b) of the Linkage Plan, 
respectively, for definitions of ``P/A Order'' and ``Principal 
Order.''
    \8\ Joint Amendment No. 25 to the Linkage Plan became summarily 
effective for a period not to exceed 120 days on December 4, 2007. 
See supra note 3.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchanges believe the proposed rule changes are consistent with 
the Act and the rules and regulations under the Act applicable to 
national securities exchanges and, in particular, the requirements of 
Section 6(b) of the Act.\9\ Specifically, the Exchanges believe the 
proposed rule changes are consistent with the requirements of Section 
6(b)(5) of the Act \10\ that the rules of an exchange be designed to 
prevent fraudulent and manipulative acts, 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.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organizations' Statement on Burden on Competition

    The Exchanges believe that the proposed rule changes would impose 
no burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.

C. Self-Regulatory Organizations' Statement on Comments on the Proposed 
Rule Changes Received From Members, Participants or Others

    The Exchanges have neither solicited nor received comments on these 
proposals.

III. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
changes are 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 Numbers SR-Amex-2007-124; SR-BSE-2007-50; SR-CBOE-2007-144; SR-
ISE-2007-108; SR-NYSEArca-2007-116; SR-Phlx-2007-88 in 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 Numbers SR-Amex-2007-124; SR-BSE-
2007-50; SR-CBOE-2007-144; SR-ISE-2007-108; SR-NYSEArca-2007-116; SR-
Phlx-2007-88. These file numbers 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 Section, 100 F Street, NE., Washington, DC 20549-1090 on 
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 Exchanges. 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 Numbers SR-Amex-2007-124; SR-BSE-2007-50; SR-CBOE-2007-144; SR-
ISE-2007-108; SR-NYSEArca-2007-116; SR-Phlx-2007-88 and should be 
submitted on or before January 2, 2008.

IV. Commission's Findings and Order Granting Accelerated Approval of 
Proposed Rule Changes

    After careful consideration, the Commission finds that the proposed 
rule changes are consistent with the requirements of the Act and the 
rules and regulations thereunder, applicable to national securities 
exchanges.\11\ In particular, the Commission finds that the proposals 
are consistent with the provisions of Section 6(b)(5) of the Act \12\ 
in that they are 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. The Commission believes that 
reducing the time required by an Exchange to respond to a Linkage Order 
and reducing the amount of time a member sending a Linkage Order must 
wait before trading through a nonresponsive Exchange should facilitate 
the more timely execution of orders across the Exchanges.
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    \11\ In approving these proposed rule changes, the Commission 
has considered their impact on efficiency, competition, and capital 
formation. See U.S.C. 78c(f).
    \12\ 15 U.S.C. 78f(b)(5).
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    The Commission also finds good cause, pursuant to Section 19(b)(2) 
of the Act \13\ for approving the proposal prior to the thirtieth day 
after the date of publication of the notice of the filing thereof in 
the Federal Register. Granting accelerated approval would facilitate 
the implementation of these changes in conjunction with the 
implementation of Joint Amendment No. 25 to the Linkage Plan.\14\
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    \13\ 15 U.S.C. 78s(b)(2).
    \14\ See supra note 8.

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[[Page 70356]]

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (SR-Amex-2007-124), as amended, and 
proposed rule changes (SR-BSE-2007-50; SR-CBOE-2007-144; SR-ISE-2007-
108; SR-NYSEArca-2007-116; SR-Phlx-2007-88) are hereby approved on an 
accelerated basis.

    For the Commission, by the Division of Trading and Markets, 
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. E7-23923 Filed 12-10-07; 8:45 am]
BILLING CODE 8011-01-P
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