Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d-2; Order Approving and Declaring Effective a Plan for the Allocation of Regulatory Responsibilities Among the American Stock Exchange LLC, the Boston Stock Exchange, Inc., the Chicago Board Options Exchange, Incorporated, the International Securities Exchange, LLC, Financial Industry Regulatory Authority, Inc., NYSE Arca, Inc., and the Philadelphia Stock Exchange, Inc., 71723-71725 [E7-24467]
Download as PDF
<![CDATA[
Federal Register / Vol. 72, No. 242 / Tuesday, December 18, 2007 / Notices
yshivers on PROD1PC62 with NOTICES
information and assuring the reliability
and integrity of that information.
According to OPRA, these increases
reflect the costs of continuing
enhancements to and upgrades of the
OPRA system and related exchange
systems since the time these fees were
last adjusted in order to enable OPRA,
its participant exchanges, and its
vendors to handle a greater volume of
market information as a result of the
continuing expansion of listed options
trading and to provide a greater degree
of redundancy and security in the OPRA
system. Past and projected expansion of
options trading reflects such factors as
an increase in the number of exchanges
that trade options and in the number of
options classes and series traded on
each exchange, and actual and
anticipated growth in the number of
quotes on account of the ongoing
implementation of quoting in penny
intervals. The fee increases also take
into account the loss of revenue on
account of the elimination of separate
fees for access to OPRA’s FCO Service.7
OPRA estimates that the overall effect of
the proposed increases in professional
subscriber fees would be to increase
revenues derived from these fees by
approximately 5% in each of the three
years covered by the proposal, before
giving effect to the elimination of the
FCO access fee upon the
discontinuation of OPRA’s separate FCO
Service.
The text of the proposed amendment
to the OPRA Plan is available at OPRA,
the Commission’s Public Reference
Room, and https://opradata.com.
II. Implementation of the OPRA Plan
Amendment
Pursuant to paragraph (b)(3)(i) of Rule
608 under the Act, 8 OPRA designated
this amendment as establishing or
changing a fee or other charge collected
on behalf of all of the OPRA participants
in connection with access to, or use of,
OPRA facilities, thereby qualifying for
effectiveness upon filing. In order to
give persons subject to these fees
advance notice of the changes, the first
of these fee changes is not proposed to
be implemented until January 1, 2008.
The Commission may summarily
abrogate the amendment within sixty
days of its filing and require refiling and
approval of the amendment by
Commission order pursuant to Rule
608(b)(2) under the Act 9 if it appears to
the Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors
7 See
id.
CFR 242.608(b)(3)(i).
9 17 CFR 242.608(b)(2).
8 17
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16:20 Dec 17, 2007
Jkt 211001
and the maintenance of fair and orderly
markets, to remove impediments to, and
perfect the mechanisms of, a national
market system, or otherwise in
furtherance of the purposes of the Act. 10
III. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed OPRA
Plan amendment is consistent with the
Act. Comments may be submitted by
any of the following methods:
Electronic Comments:
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
No. SR–OPRA–2007–04 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–OPRA–2007–04. 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 plan
amendment that are filed with the
Commission, and all written
communications relating to the
proposed plan amendment 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 also will be
available for inspection and copying at
the principal office of OPRA. All
comments received will be posted
without change; the Commission does
not edit personal identifying
10 For
purposes of calculating the 60-day period
within which the Commission may summarily
abrogate the proposed rule change pursuant to Rule
608(b)(3) under the Act, the Commission considers
the period to commence on December 11, 2007, the
date on which OPRA submitted the second revised
Exhibit I. See 17 CFR 242.608(b)(3).
PO 00000
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Fmt 4703
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71723
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to File
Number SR–OPRA–2007–04 and should
be submitted on or before January 8,
2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–24485 Filed 12–17–07; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56941; File No. 4–551]
Program for Allocation of Regulatory
Responsibilities Pursuant to Rule 17d–
2; Order Approving and Declaring
Effective a Plan for the Allocation of
Regulatory Responsibilities Among the
American Stock Exchange LLC, the
Boston Stock Exchange, Inc., the
Chicago Board Options Exchange,
Incorporated, the International
Securities Exchange, LLC, Financial
Industry Regulatory Authority, Inc.,
NYSE Arca, Inc., and the Philadelphia
Stock Exchange, Inc.
December 11, 2007
On October 30, 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’’), Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’), NYSE Arca,
Inc. (‘‘NYSE Arca’’), and the
Philadelphia Stock Exchange, Inc.
(‘‘Phlx’’) (collectively, ‘‘Participants’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 17(d) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
17d–2 thereunder,2 a proposed plan for
the allocation of regulatory
responsibilities (‘‘Plan’’).3 The Plan was
published for comment on November 9,
2007.4 The Commission received no
comments on the Plan. This order
approves and declares effective the
Plan.
11 17
CFR 200.30–3(a)(29).
U.S.C. 78q(d).
2 17 CFR 240.17d–2.
3 See infra Section II (describing the proposed
Plan).
4 See Securities Exchange Act Release No. 56731
(November 1, 2007), 72 FR 63637 (File No. 4–551)
(‘‘Notice’’).
1 15
E:\FR\FM\18DEN1.SGM
18DEN1
71724
Federal Register / Vol. 72, No. 242 / Tuesday, December 18, 2007 / Notices
I. Introduction
Section 19(g)(1) of the Act,5 among
other things, requires every selfregulatory organization (‘‘SRO’’)
registered as either a national securities
exchange or registered securities
association to examine for, and enforce
compliance by, its members and persons
associated with its members with the
Act, the rules and regulations
thereunder, and the SRO’s own rules,
unless the SRO is relieved of this
responsibility pursuant to Section
17(d) 6 or Section 19(g)(2) 7 of the Act.
Without this relief, the statutory
obligation of each individual SRO could
result in a pattern of multiple
examinations of broker-dealers that
maintain memberships in more than one
SRO (‘‘common members’’). Such
regulatory duplication would add
unnecessary expenses for common
members and their SROs.
Section 17(d)(1) of the Act 8 was
intended, in part, to eliminate
unnecessary multiple examinations and
regulatory duplication.9 With respect to
a common member, Section 17(d)(1)
authorizes the Commission, by rule or
order, to relieve an SRO of the
responsibility to receive regulatory
reports, to examine for and enforce
compliance with applicable statutes,
rules, and regulations, or to perform
other specified regulatory functions.
To implement Section 17(d)(1), the
Commission adopted two rules: Rule
17d–1 and Rule 17d–2 under the Act.10
Rule 17d–1 authorizes the Commission
to name a single SRO as the designated
examining authority (‘‘DEA’’) to
examine common members for
compliance with the financial
responsibility requirements imposed by
the Act, or by Commission or SRO
rules.11 When an SRO has been named
as a common member’s DEA, all other
SROs to which the common member
belongs are relieved of the responsibility
to examine the firm for compliance with
the applicable financial responsibility
rules. On its face, Rule 17d–1 deals only
with an SRO’s obligations to enforce
member compliance with financial
responsibility requirements. Rule 17d–1
does not relieve an SRO from its
obligation to examine a common
5 15
U.S.C. 78s(g)(1).
U.S.C. 78q(d).
7 15 U.S.C. 78s(g)(2).
8 15 U.S.C. 78q(d)(1).
9 See Securities Act Amendments of 1975, Report
of the Senate Committee on Banking, Housing, and
Urban Affairs to Accompany S. 249, S. Rep. No. 94–
75, 94th Cong., 1st Session 32 (1975).
10 17 CFR 240.17d–1 and 17 CFR 240.17d–2,
respectively.
11 See Securities Exchange Act Release No. 12352
(April 20, 1976), 41 FR 18808 (May 7, 1976).
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6 15
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Jkt 214001
member for compliance with its own
rules and provisions of the federal
securities laws governing matters other
than financial responsibility, including
sales practices and trading activities and
practices.
To address regulatory duplication in
these and other areas, the Commission
adopted Rule 17d–2 under the Act.12
Rule 17d–2 permits SROs to propose
joint plans for the allocation of
regulatory responsibilities with respect
to their common members. Under
paragraph (c) of Rule 17d–2, the
Commission may declare such a plan
effective if, after providing for notice
and comment, it determines that the
plan is necessary or appropriate in the
public interest and for the protection of
investors, to foster cooperation and
coordination among the SROs, to
remove impediments to, and foster the
development of, a national market
system and a national clearance and
settlement system, and is in conformity
with the factors set forth in Section
17(d) of the Act. Commission approval
of a plan filed pursuant to Rule 17d–2
relieves an SRO of those regulatory
responsibilities allocated by the plan to
another SRO.
II. The Plan
The Plan is intended to reduce
regulatory duplication for common
members by allocating regulatory
responsibility for certain options-related
market surveillance matters among the
Participants.13 Under the Plan, a
Participant will serve as the Designated
Options Surveillance Regulator
(‘‘DOSR’’) for each common member
assigned to it and will assume
regulatory responsibility with respect to
that common member’s compliance
with applicable common rules for
certain accounts. As proposed, the Plan
currently is limited to the review of
expiring exercise declarations pursuant
to the common rules listed in proposed
Exhibit A to the Plan. When an SRO has
been named as a common member’s
DOSR, all other SROs to which the
common member belongs will be
12 See Securities Exchange Act Release No. 12935
(October 28, 1976), 41 FR 49091 (November 8,
1976).
13 The proposed plan is wholly separate from the
multiparty options agreement made pursuant to
Rule 17d–2 by and among Amex, BSE, CBOE, ISE,
NASD (n/k/a FINRA), NYSE, NYSE Arca, and Phlx
involving the allocation of regulatory
responsibilities with respect to common members
for compliance with common rules relating to the
conduct of broker-dealers of accounts for listed
options or index warrants entered into on December
1, 2006, and as may be amended from time to time.
See Securities Exchange Act Release Nos. 55145
(January 22, 2007), 72 FR 3882 (January 26, 2007)
(File No. S7–966) and 55532 (March 26, 2007), 72
FR 15729 (April 2, 2007) (File No. S7–966).
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Frm 00110
Fmt 4703
Sfmt 4703
relieved of regulatory responsibility for
that common member, pursuant to the
terms of the Plan, with respect to the
applicable common rules specified in
Exhibit A to the Plan. The full text of
the proposed Plan and Exhibit A thereto
can be found in the Notice.
III. Discussion
The Commission finds that the
proposed Plan is consistent with the
factors set forth in Section 17(d) of the
Act 14 and Rule 17d–2(c) thereunder 15
in that the proposed Plan is necessary
or appropriate in the public interest and
for the protection of investors, fosters
cooperation and coordination among
SROs, and removes impediments to and
fosters the development of a national
market system. In particular, the
Commission believes that the proposed
Plan is an achievement in cooperation
among the Participants and should
reduce regulatory duplication by
allocating to the DOSR the
responsibility for certain options-related
market surveillance matters that would
otherwise be performed by multiple
Participants. Accordingly, the proposed
Plan promotes efficiency by reducing
costs to common members.
Furthermore, because the Participants
will coordinate their regulatory
functions in accordance with the Plan,
the Plan should promote investor
protection.
The Commission notes that the Plan
will be administered by a committee
known as the Options Surveillance
Group (the ‘‘OSG’’). The Commission
further notes that, under the Plan, the
Participants will allocate among
themselves certain regulatory
responsibilities relating to compliance
by their common members with such
options rules of the Participants as the
Participants shall determine are
substantially similar and shall approve
from time to time, insofar as such rules
relate to market surveillance
(collectively, the ‘‘Common Rules’’).
The Common Rules covered by the Plan
are specifically listed in Exhibit A to the
Plan, as may be amended by the
Participants from time to time upon
unanimous written agreement by the
Participants. The Commission notes that
each year, or more frequently if required
by changes in the rules of a Participant,
each Participant will submit to the other
Participants, through the Chair of the
OSG, an updated list of Common Rules
for review, and each Participant will
confirm in writing to the Chair of the
OSG whether that Participant’s rules
listed in Exhibit A continue to qualify
14 15
15 17
E:\FR\FM\18DEN1.SGM
U.S.C. 78q(d).
CFR 240.17d–2(c).
18DEN1
Federal Register / Vol. 72, No. 242 / Tuesday, December 18, 2007 / Notices
as Common Rules under the Plan. In
reviewing the list of Common Rules, the
Participants may add additional rules
that qualify as Common Rules, will
delete rules that are no longer identical
or substantially similar to the Common
Rules, and will confirm that the
remaining rules included on Exhibit A
continue to qualify as Common Rules.
The Commission notes that all
amendments to the Plan, excluding
certain changes to Exhibits A and B,
must be filed with and approved by the
Commission.16
In addition, no less frequently than
every two years, the OSG will allocate
common members that conduct an
options business among the
Participants, and the Participant to
which a common member is allocated
will serve as the DOSR for that common
member. The Plan also permits the
Participants, subject to notice, to
terminate the Plan or cancel their
participation in the Plan. The
Commission notes that a cancelling
Participant will retain its regulatory
responsibilities under the Plan until
such time as the Commission has
approved the cancellation or
termination of the Plan.
The Commission also notes that the
proposed Plan is wholly separate from
the multiparty options agreement made
pursuant to Rule 17d–2 by and among
Amex, BSE, CBOE, ISE, NASD (n/k/a
FINRA), NYSE, NYSE Arca, and Phlx
involving the allocation of regulatory
responsibilities with respect to common
members for compliance with common
rules relating to the conduct of brokerdealers of accounts for listed options or
index warrants entered into on
December 1, 2006, and as may be
amended from time to time.17
IV. Conclusion
This Order gives effect to the Plan
filed with the Commission in File No.
4–551. The Participants shall notify all
members affected by the Plan of their
rights and obligations under the Plan.
It is therefore ordered, pursuant to
Section 17(d) of the Act,18 that the Plan
in File No. 4–551 by and between
yshivers on PROD1PC62 with NOTICES
16 With
respect to this proposed Plan, the
Participants may include an additional rule in the
list of Common Rules on Exhibit A without having
to file an amendment to the Plan with the
Commission, as long as such rules of each
Participant that are to be included in Exhibit A
meet the definition of Common Rules contained in
the Plan and are otherwise consistent with the
allocation of regulatory responsibility pursuant to
the terms of the Plan.
17 See Securities Exchange Act Release Nos.
55145 (January 22, 2007), 72 FR 3882 (January 26,
2007) (File No. S7–966) (notice) and 55532 (March
26, 2007), 72 FR 15729 (April 2, 2007) (File No. S7–
966) (order).
18 15 U.S.C. 78q(d).
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15:19 Dec 17, 2007
Jkt 214001
Amex, BSE, CBOE, ISE, FINRA, NYSE
Arca, and Phlx, filed pursuant to Rule
17d–2 under the Act,19 is hereby
approved and declared effective.
It is further ordered that those SRO
Participants that are not the DOSR as to
a particular common member are
relieved of those regulatory
responsibilities allocated to the common
member’s DOSR under the Plan.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.20
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–24467 Filed 12–17–07; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[File No. 500–1]
In the Matter of: Avitech Life Sciences,
Inc.; Order of Suspension of Trading
December 14, 2007.
It appears to the Securities and
Exchange Commission that the market
for the securities of Avitech
LifeSciences, Inc. (‘‘Avitech,’’ trading
symbol AVLF), may be reacting to
manipulative forces or deceptive
practices and that there is insufficient
current public information about the
issuer upon which an informed
investment decision may be made,
particularly concerning (1) the identity
of and prior securities fraud judgments
against persons who appear to be
involved in the offer and sale of Avitech
shares; (2) the financial performance
and business prospects of Avitech; and
(3) offerings to foreign investors and any
restrictions on the resale of shares.
The Commission is of the opinion that
the public interest and the protection of
investors require a suspension of trading
in the securities of the above-listed
company.
Therefore, it is ordered, pursuant to
section 12(k) of the Securities Exchange
Act of 1934, that trading in the abovelisted company is suspended for the
period of 9:30 a.m. EST, December 14,
2007 through 11:59 p.m. EST, on
December 28, 2007.
By the Commission.
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. 07–6095 Filed 12–14–07; 12:26 pm]
BILLING CODE 8011–01–P
19 17
20 17
PO 00000
CFR 240.17d–2.
CFR 200.30–3(a)(34).
Frm 00111
Fmt 4703
Sfmt 4703
71725
SECURITIES AND EXCHANGE
COMMISSION
[File No. 500–1]
In the Matter of: Green Machine
Development Corp.; Order of
Suspension of Trading
December 14, 2007.
It appears to the Securities and
Exchange Commission that the market
for the securities of Green Machine
Development Corp. (‘‘Green Machine,’’
trading symbol GMVP), may be reacting
to manipulative forces or deceptive
practices and that there is insufficient
current public information about the
issuer upon which an informed
investment decision may be made,
particularly concerning (1) the identity
of and prior securities fraud judgments
against persons who appear to be
involved in the offer and sale of Green
Machine shares; (2) the financial
performance and business prospects of
Green Machine; and (3) offerings to
foreign investors and any restrictions on
the resale of shares.
The Commission is of the opinion that
the public interest and the protection of
investors require a suspension of trading
in the securities of the above-listed
company.
Therefore, it is ordered, pursuant to
section 12(k) of the Securities Exchange
Act of 1934, that trading in the abovelisted company is suspended for the
period of 9:30 a.m. EST, December 14,
2007 through 11:59 p.m. EST, on
December 28, 2007.
By the Commission.
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. 07–6096 Filed 12–14–07; 12:26 pm]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[File No. 500–1]
In the Matter of: Xiiva Holdings Inc.;
Order of Suspension of Trading
December 14, 2007.
It appears to the Securities and
Exchange Commission that the market
for the securities of Xiiva Holdings, Inc.
(‘‘Xiiva,’’ trading symbol XIVAF), may
be reacting to manipulative forces or
deceptive practices and that there is
insufficient current public information
about the issuer upon which an
informed investment decision may be
made, particularly concerning (1) the
identity of and prior securities fraud
judgments against persons who appear
to be involved in the offer and sale of
E:\FR\FM\18DEN1.SGM
18DEN1
]]>Agencies
[Federal Register Volume 72, Number 242 (Tuesday, December 18, 2007)]
[Notices]
[Pages 71723-71725]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-24467]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56941; File No. 4-551]
Program for Allocation of Regulatory Responsibilities Pursuant to
Rule 17d-2; Order Approving and Declaring Effective a Plan for the
Allocation of Regulatory Responsibilities Among the American Stock
Exchange LLC, the Boston Stock Exchange, Inc., the Chicago Board
Options Exchange, Incorporated, the International Securities Exchange,
LLC, Financial Industry Regulatory Authority, Inc., NYSE Arca, Inc.,
and the Philadelphia Stock Exchange, Inc.
December 11, 2007
On October 30, 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''), Financial Industry Regulatory Authority, Inc.
(``FINRA''), NYSE Arca, Inc. (``NYSE Arca''), and the Philadelphia
Stock Exchange, Inc. (``Phlx'') (collectively, ``Participants'') filed
with the Securities and Exchange Commission (``Commission''), pursuant
to Section 17(d) of the Securities Exchange Act of 1934 (``Act'') \1\
and Rule 17d-2 thereunder,\2\ a proposed plan for the allocation of
regulatory responsibilities (``Plan'').\3\ The Plan was published for
comment on November 9, 2007.\4\ The Commission received no comments on
the Plan. This order approves and declares effective the Plan.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78q(d).
\2\ 17 CFR 240.17d-2.
\3\ See infra Section II (describing the proposed Plan).
\4\ See Securities Exchange Act Release No. 56731 (November 1,
2007), 72 FR 63637 (File No. 4-551) (``Notice'').
---------------------------------------------------------------------------
[[Page 71724]]
I. Introduction
Section 19(g)(1) of the Act,\5\ among other things, requires every
self-regulatory organization (``SRO'') registered as either a national
securities exchange or registered securities association to examine
for, and enforce compliance by, its members and persons associated with
its members with the Act, the rules and regulations thereunder, and the
SRO's own rules, unless the SRO is relieved of this responsibility
pursuant to Section 17(d) \6\ or Section 19(g)(2) \7\ of the Act.
Without this relief, the statutory obligation of each individual SRO
could result in a pattern of multiple examinations of broker-dealers
that maintain memberships in more than one SRO (``common members'').
Such regulatory duplication would add unnecessary expenses for common
members and their SROs.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78s(g)(1).
\6\ 15 U.S.C. 78q(d).
\7\ 15 U.S.C. 78s(g)(2).
---------------------------------------------------------------------------
Section 17(d)(1) of the Act \8\ was intended, in part, to eliminate
unnecessary multiple examinations and regulatory duplication.\9\ With
respect to a common member, Section 17(d)(1) authorizes the Commission,
by rule or order, to relieve an SRO of the responsibility to receive
regulatory reports, to examine for and enforce compliance with
applicable statutes, rules, and regulations, or to perform other
specified regulatory functions.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78q(d)(1).
\9\ See Securities Act Amendments of 1975, Report of the Senate
Committee on Banking, Housing, and Urban Affairs to Accompany S.
249, S. Rep. No. 94-75, 94th Cong., 1st Session 32 (1975).
---------------------------------------------------------------------------
To implement Section 17(d)(1), the Commission adopted two rules:
Rule 17d-1 and Rule 17d-2 under the Act.\10\ Rule 17d-1 authorizes the
Commission to name a single SRO as the designated examining authority
(``DEA'') to examine common members for compliance with the financial
responsibility requirements imposed by the Act, or by Commission or SRO
rules.\11\ When an SRO has been named as a common member's DEA, all
other SROs to which the common member belongs are relieved of the
responsibility to examine the firm for compliance with the applicable
financial responsibility rules. On its face, Rule 17d-1 deals only with
an SRO's obligations to enforce member compliance with financial
responsibility requirements. Rule 17d-1 does not relieve an SRO from
its obligation to examine a common member for compliance with its own
rules and provisions of the federal securities laws governing matters
other than financial responsibility, including sales practices and
trading activities and practices.
---------------------------------------------------------------------------
\10\ 17 CFR 240.17d-1 and 17 CFR 240.17d-2, respectively.
\11\ See Securities Exchange Act Release No. 12352 (April 20,
1976), 41 FR 18808 (May 7, 1976).
---------------------------------------------------------------------------
To address regulatory duplication in these and other areas, the
Commission adopted Rule 17d-2 under the Act.\12\ Rule 17d-2 permits
SROs to propose joint plans for the allocation of regulatory
responsibilities with respect to their common members. Under paragraph
(c) of Rule 17d-2, the Commission may declare such a plan effective if,
after providing for notice and comment, it determines that the plan is
necessary or appropriate in the public interest and for the protection
of investors, to foster cooperation and coordination among the SROs, to
remove impediments to, and foster the development of, a national market
system and a national clearance and settlement system, and is in
conformity with the factors set forth in Section 17(d) of the Act.
Commission approval of a plan filed pursuant to Rule 17d-2 relieves an
SRO of those regulatory responsibilities allocated by the plan to
another SRO.
---------------------------------------------------------------------------
\12\ See Securities Exchange Act Release No. 12935 (October 28,
1976), 41 FR 49091 (November 8, 1976).
---------------------------------------------------------------------------
II. The Plan
The Plan is intended to reduce regulatory duplication for common
members by allocating regulatory responsibility for certain options-
related market surveillance matters among the Participants.\13\ Under
the Plan, a Participant will serve as the Designated Options
Surveillance Regulator (``DOSR'') for each common member assigned to it
and will assume regulatory responsibility with respect to that common
member's compliance with applicable common rules for certain accounts.
As proposed, the Plan currently is limited to the review of expiring
exercise declarations pursuant to the common rules listed in proposed
Exhibit A to the Plan. When an SRO has been named as a common member's
DOSR, all other SROs to which the common member belongs will be
relieved of regulatory responsibility for that common member, pursuant
to the terms of the Plan, with respect to the applicable common rules
specified in Exhibit A to the Plan. The full text of the proposed Plan
and Exhibit A thereto can be found in the Notice.
---------------------------------------------------------------------------
\13\ The proposed plan is wholly separate from the multiparty
options agreement made pursuant to Rule 17d-2 by and among Amex,
BSE, CBOE, ISE, NASD (n/k/a FINRA), NYSE, NYSE Arca, and Phlx
involving the allocation of regulatory responsibilities with respect
to common members for compliance with common rules relating to the
conduct of broker-dealers of accounts for listed options or index
warrants entered into on December 1, 2006, and as may be amended
from time to time. See Securities Exchange Act Release Nos. 55145
(January 22, 2007), 72 FR 3882 (January 26, 2007) (File No. S7-966)
and 55532 (March 26, 2007), 72 FR 15729 (April 2, 2007) (File No.
S7-966).
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III. Discussion
The Commission finds that the proposed Plan is consistent with the
factors set forth in Section 17(d) of the Act \14\ and Rule 17d-2(c)
thereunder \15\ in that the proposed Plan is necessary or appropriate
in the public interest and for the protection of investors, fosters
cooperation and coordination among SROs, and removes impediments to and
fosters the development of a national market system. In particular, the
Commission believes that the proposed Plan is an achievement in
cooperation among the Participants and should reduce regulatory
duplication by allocating to the DOSR the responsibility for certain
options-related market surveillance matters that would otherwise be
performed by multiple Participants. Accordingly, the proposed Plan
promotes efficiency by reducing costs to common members. Furthermore,
because the Participants will coordinate their regulatory functions in
accordance with the Plan, the Plan should promote investor protection.
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\14\ 15 U.S.C. 78q(d).
\15\ 17 CFR 240.17d-2(c).
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The Commission notes that the Plan will be administered by a
committee known as the Options Surveillance Group (the ``OSG''). The
Commission further notes that, under the Plan, the Participants will
allocate among themselves certain regulatory responsibilities relating
to compliance by their common members with such options rules of the
Participants as the Participants shall determine are substantially
similar and shall approve from time to time, insofar as such rules
relate to market surveillance (collectively, the ``Common Rules''). The
Common Rules covered by the Plan are specifically listed in Exhibit A
to the Plan, as may be amended by the Participants from time to time
upon unanimous written agreement by the Participants. The Commission
notes that each year, or more frequently if required by changes in the
rules of a Participant, each Participant will submit to the other
Participants, through the Chair of the OSG, an updated list of Common
Rules for review, and each Participant will confirm in writing to the
Chair of the OSG whether that Participant's rules listed in Exhibit A
continue to qualify
[[Page 71725]]
as Common Rules under the Plan. In reviewing the list of Common Rules,
the Participants may add additional rules that qualify as Common Rules,
will delete rules that are no longer identical or substantially similar
to the Common Rules, and will confirm that the remaining rules included
on Exhibit A continue to qualify as Common Rules. The Commission notes
that all amendments to the Plan, excluding certain changes to Exhibits
A and B, must be filed with and approved by the Commission.\16\
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\16\ With respect to this proposed Plan, the Participants may
include an additional rule in the list of Common Rules on Exhibit A
without having to file an amendment to the Plan with the Commission,
as long as such rules of each Participant that are to be included in
Exhibit A meet the definition of Common Rules contained in the Plan
and are otherwise consistent with the allocation of regulatory
responsibility pursuant to the terms of the Plan.
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In addition, no less frequently than every two years, the OSG will
allocate common members that conduct an options business among the
Participants, and the Participant to which a common member is allocated
will serve as the DOSR for that common member. The Plan also permits
the Participants, subject to notice, to terminate the Plan or cancel
their participation in the Plan. The Commission notes that a cancelling
Participant will retain its regulatory responsibilities under the Plan
until such time as the Commission has approved the cancellation or
termination of the Plan.
The Commission also notes that the proposed Plan is wholly separate
from the multiparty options agreement made pursuant to Rule 17d-2 by
and among Amex, BSE, CBOE, ISE, NASD (n/k/a FINRA), NYSE, NYSE Arca,
and Phlx involving the allocation of regulatory responsibilities with
respect to common members for compliance with common rules relating to
the conduct of broker-dealers of accounts for listed options or index
warrants entered into on December 1, 2006, and as may be amended from
time to time.\17\
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\17\ See Securities Exchange Act Release Nos. 55145 (January 22,
2007), 72 FR 3882 (January 26, 2007) (File No. S7-966) (notice) and
55532 (March 26, 2007), 72 FR 15729 (April 2, 2007) (File No. S7-
966) (order).
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IV. Conclusion
This Order gives effect to the Plan filed with the Commission in
File No. 4-551. The Participants shall notify all members affected by
the Plan of their rights and obligations under the Plan.
It is therefore ordered, pursuant to Section 17(d) of the Act,\18\
that the Plan in File No. 4-551 by and between Amex, BSE, CBOE, ISE,
FINRA, NYSE Arca, and Phlx, filed pursuant to Rule 17d-2 under the
Act,\19\ is hereby approved and declared effective.
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\18\ 15 U.S.C. 78q(d).
\19\ 17 CFR 240.17d-2.
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It is further ordered that those SRO Participants that are not the
DOSR as to a particular common member are relieved of those regulatory
responsibilities allocated to the common member's DOSR under the Plan.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
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\20\ 17 CFR 200.30-3(a)(34).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-24467 Filed 12-17-07; 8:45 am]
BILLING CODE 8011-01-P
