Self-Regulatory Organizations; American Stock Exchange LLC; Order Approving Proposed Rule Change as Modified by Amendment No. 1 Related to Amending Complex Orders Procedures, 4292-4293 [E8-1177]

Download as PDF 4292 Federal Register / Vol. 73, No. 16 / Thursday, January 24, 2008 / Notices information unless it displays a currently valid control number. Please direct general comments regarding the above information to the following persons: (i) Desk Officer for the Securities and Exchange Commission, Office of Management and Budget, Room 10102, New Executive Office Building, Washington, DC 20503 or e-mail to: Alexander_T._Hunt@omb.eop.gov; and (ii) R. Corey Booth, Director/Chief Information Officer, Securities and Exchange Commission, C/O Shirley Martinson, 6432 General Green Way, Alexandria, VA 22312; or send an email to: PRA_Mailbox@sec.gov. Comments must be submitted to OMB within 30 days of this notice. Dated: January 14, 2008. Florence E. Harmon, Deputy Secretary. [FR Doc. E8–1159 Filed 1–23–08; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Proposed Collection; Comment Request Upon Written Request, Copies Available From: U.S. Securities and Exchange Commission, Office of Investor Education and Advocacy, Washington, DC 20549–0213. jlentini on PROD1PC65 with NOTICES Extension: Rule 101: OMB Control No. 3235– 0464; SEC File No. 270–408. Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), the Securities and Exchange Commission (‘‘Commission’’) is soliciting comments on the collection of information summarized below. The Commission plans to submit this existing collection of information to the Office of Management and Budget for extension and approval. • (Rule 101 of Regulation M (17 CFR 242.101)—Activities by Distribution Participants Rule 101 prohibits distribution participants from purchasing activities at specified times during a distribution of securities. Persons otherwise covered by these rules may seek to use several applicable exceptions such as a calculation of the average daily trading volume of the securities in distribution, the maintenance of policies regarding information barriers between their affiliates, and the maintenance of a written policy regarding general compliance with Regulation M for de minimus transactions. VerDate Aug<31>2005 20:35 Jan 23, 2008 Jkt 214001 There are approximately 1,634 respondents per year that require an aggregate total of 31,355 hours to comply with this rule. Each respondent makes an estimated 1 annual response. Each response takes approximately 19.19 hours to complete. Thus, the total compliance burden per year is 31,355 burden hours. The total compliance cost for the respondents is approximately $1,763,718.75, resulting in a cost of compliance for the respondent per response of approximately $1,079.39 (i.e., $1,763,718.75/1,634 responses). Written comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission’s estimates of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication. Comments should be directed to: R. Corey Booth, Director/Chief Information Officer, Securities and Exchange Commission, c/o Shirley Martinson, 6432 General Green Way, Alexandria, Virginia 22312 or send an email to: PRA_Mailbox@sec.gov. Comments must be submitted within 60 days of this notice. Dated: January 17, 2008. Nancy M. Morris, Secretary. [FR Doc. E8–1179 Filed 1–23–08; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–57160; File No. SR–Amex– 2007–20] Self-Regulatory Organizations; American Stock Exchange LLC; Order Approving Proposed Rule Change as Modified by Amendment No. 1 Related to Amending Complex Orders Procedures January 16, 2008. I. Introduction On February 15, 2007, the American Stock Exchange LLC (‘‘Amex’’ or ‘‘Exchange’’) filed with the Securities PO 00000 Frm 00121 Fmt 4703 Sfmt 4703 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 amend complex orders procedures to allow the adjustment of the options leg of the order if market conditions prevent the execution of the non-option leg at the price agreed upon. On November 28, 2007, Amex filed Amendment No. 1 to the proposed rule change. The proposed rule change was published for comment in the Federal Register on December 12, 2007.3 The Commission received no comment letters regarding the proposal. This order approves the proposed rule change, as modified by Amendment No. 1. II. Description The Exchange proposes to amend Rule 953–ANTE (b)(ii) to provide that if the stock leg or security futures leg of the order cannot be executed at the price agreed upon due to market conditions, the price of a trade representing the execution of the options leg of the transaction may be adjusted to be consistent with the net debit or credit price of the original order, if market conditions in any of the non-Exchange markets prevent the execution of the non-option leg at the price agreed upon. In addition, the Commission notes that Amex has represented that the repricing of the options leg must be consistent with Amex’s priority and parity rules. If the transaction does not satisfy the Exchange’s priority and parity rules by the end of the trading day, then the transaction would be cancelled. III. Discussion The Commission has carefully reviewed the proposed rule change and the Commission finds that the proposed rule change is consistent with the requirements of Section 6 of the Act 4 and the rules and regulations thereunder applicable to a national securities exchange.5 In particular, the Commission finds that the proposal is consistent with Section 6(b)(5) of the Act,6 because it is designed to promote just and equitable principles of trade, to remove impediments to and perfect the 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 56901 (December 5, 2007), 72 FR 70625. 4 15 U.S.C. 78f. 5 In approving this proposed rule change the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 6 15 U.S.C. 78f(b)(5). 2 17 E:\FR\FM\24JAN1.SGM 24JAN1 Federal Register / Vol. 73, No. 16 / Thursday, January 24, 2008 / Notices 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 the Exchange’s proposal to amend its complex order procedures as described above may facilitate the execution of such complex orders. IV. Conclusion For the foregoing reasons, the Commission finds that the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to a national securities exchange, and, in particular, with Section 6(b)(5) of the Act.7 It is therefore ordered, pursuant to Section 19(b)(2) of the Act,8 that the proposed rule change (SR–Amex–2007– 20), as modified by Amendment No. 1, is approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.9 Nancy M. Morris, Secretary. [FR Doc. E8–1177 Filed 1–23–08; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–57161; File No. SR–CBOE– 2006–36] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change as Modified by Amendments No. 1 and 2 Thereto Regarding FLEX Equity Option Opening Transactions January 16, 2008. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on April 14, 2006, the Chicago Board Options Exchange, Incorporated (‘‘CBOE’’ or ‘‘Exchange’’), filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by CBOE. On December 24, 2007, the Exchange filed Amendments No. 1 3 and 2 4 to the 7 15 U.S.C. 78f(b)(5). U.S.C. 78s(b)(2). 9 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 Amendment No. 1 replaced the original filing in its entirety. 4 Amendment No. 2 replaced Amendment No. 1 in its entirety. The purpose of Amendment 2 was jlentini on PROD1PC65 with NOTICES 8 15 VerDate Aug<31>2005 20:35 Jan 23, 2008 Jkt 214001 proposed rule change. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change CBOE proposes to amend its rules regarding the minimum value size for an opening transaction in FLEX Equity Option series on a pilot program basis. The text of the proposed rule change is available on the Exchange’s Web site (http://www.cboe.org/Legal), at the Office of the Secretary, CBOE and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, CBOE 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 those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the filing is to modify the minimum value size for an opening transaction (other than FLEX Quotes responsive to a FLEX Request for Quotes) in any FLEX Equity Option 5 series in which there is no open interest at the time the Request for Quotes is submitted. Currently, the minimum opening transaction value size in the case of a FLEX Equity Options series is the lesser of (i) 250 contracts or (ii) the number of contracts overlying $1 to (i) modify the proposed formula contained in Rule 24A.4 applicable to determining the minimum value size for FLEX Equity Options in new series to change the minimum contract component from the originally proposed 100 contracts to 150 contracts, and make this change applicable on a 11⁄2-year pilot program basis; (ii) propose changes to the formula applicable to determining the minimum value size in currently-opened series; (iii) include corresponding amendments to Rule 24B.4; and (iv) provide additional information in the Purpose section of the filing. 5 FLEX Equity Options are flexible exchangetraded options contracts which overlie equity securities. FLEX Equity Options provide investors with the ability to customize basic option features including size, expiration date, exercise style, and certain exercise prices. PO 00000 Frm 00122 Fmt 4703 Sfmt 4703 4293 million in the underlying securities.6 The Exchange proposes to reduce the ‘‘250 contracts’’ component to ‘‘150 contracts;’’ the $1 million underlying value component will continue to apply unchanged.7 The proposal would become effective on a pilot program basis for a period of 11⁄2 years. If the Exchange were to propose an extension, expansion, or permanent implementation of the program, the Exchange would submit, along with a filing proposing any necessary amendments to the program, a pilot program report. The report would include, for the period during which the program was in effect: (i) Data and analysis on the open interest and trading volume in FLEX Equity Options for which series were opened with a minimum opening size of 150 to 249 contracts and less than $1 million in underlying value; and (ii) analysis on the types of investors that initiated opening FLEX Equity Options transactions (i.e., institutional, high net worth, or retail, if any). The report would be submitted to the Commission at least ninety days prior to the expiration date of the 11⁄2 year pilot program. The Exchange believes that the reduction of the minimum value size for opening a series in the manner proposed provides FLEX-participating members with greater flexibility in structuring the terms of FLEX Equity Options that best comports with their and their customers’ particular needs. The Exchange notes that the opening size requirement for FLEX Equity Options was originally put in place to limit participation in FLEX Equity Options to sophisticated, high net worth investors rather than retail investors.8 Based on the Exchange’s experience to date with such options, it appears that the existing 250 contract component is too large to accommodate the needs of FLEXparticipating members and their institutional and high net worth 6 Under this formula, an opening transaction in a FLEX Equity series in a stock priced at $40 or more would reach the $1 million limit before it would reach the contract size limit, i.e., 250 contracts times the multiplier (100) times the stock price ($40) equals $1 million in underlying value. For a FLEX Equity series in a stock priced at less than $40, the 250 contract size limit applies. 7 Under this proposed formula, an opening transaction in a FLEX Equity series in a stock priced at approximately $66.67 or more would reach the $1 million limit before it would reach the contract size limit, i.e., 150 contracts times the multiplier (100) times the stock price ($66.67) equals just over $1 million in underlying value. For a FLEX Equity series in a stock priced at less than $66.67, the 150 contract size limit would apply. 8 The existing customer base for FLEX Options includes both institutional investors and high net worth individuals. E:\FR\FM\24JAN1.SGM 24JAN1

Agencies

[Federal Register Volume 73, Number 16 (Thursday, January 24, 2008)]
[Notices]
[Pages 4292-4293]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-1177]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57160; File No. SR-Amex-2007-20]


Self-Regulatory Organizations; American Stock Exchange LLC; Order 
Approving Proposed Rule Change as Modified by Amendment No. 1 Related 
to Amending Complex Orders Procedures

January 16, 2008.

I. Introduction

    On February 15, 2007, the American Stock Exchange LLC (``Amex'' 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 amend complex orders procedures to allow the 
adjustment of the options leg of the order if market conditions prevent 
the execution of the non-option leg at the price agreed upon. On 
November 28, 2007, Amex filed Amendment No. 1 to the proposed rule 
change. The proposed rule change was published for comment in the 
Federal Register on December 12, 2007.\3\ The Commission received no 
comment letters regarding the proposal. This order approves the 
proposed rule change, as modified by Amendment No. 1.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 56901 (December 5, 
2007), 72 FR 70625.
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II. Description

    The Exchange proposes to amend Rule 953-ANTE (b)(ii) to provide 
that if the stock leg or security futures leg of the order cannot be 
executed at the price agreed upon due to market conditions, the price 
of a trade representing the execution of the options leg of the 
transaction may be adjusted to be consistent with the net debit or 
credit price of the original order, if market conditions in any of the 
non-Exchange markets prevent the execution of the non-option leg at the 
price agreed upon.
    In addition, the Commission notes that Amex has represented that 
the re-pricing of the options leg must be consistent with Amex's 
priority and parity rules. If the transaction does not satisfy the 
Exchange's priority and parity rules by the end of the trading day, 
then the transaction would be cancelled.

III. Discussion

    The Commission has carefully reviewed the proposed rule change and 
the Commission finds that the proposed rule change is consistent with 
the requirements of Section 6 of the Act \4\ and the rules and 
regulations thereunder applicable to a national securities exchange.\5\ 
In particular, the Commission finds that the proposal is consistent 
with Section 6(b)(5) of the Act,\6\ because it is designed to promote 
just and equitable principles of trade, to remove impediments to and 
perfect the

[[Page 4293]]

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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    \4\ 15 U.S.C. 78f.
    \5\ In approving this proposed rule change the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. 15 U.S.C. 78c(f).
    \6\ 15 U.S.C. 78f(b)(5).
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    The Commission believes that the Exchange's proposal to amend its 
complex order procedures as described above may facilitate the 
execution of such complex orders.

IV. Conclusion

    For the foregoing reasons, the Commission finds that the proposed 
rule change is consistent with the Act and the rules and regulations 
thereunder applicable to a national securities exchange, and, in 
particular, with Section 6(b)(5) of the Act.\7\
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    \7\ 15 U.S.C. 78f(b)(5).
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    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\8\ that the proposed rule change (SR-Amex-2007-20), as modified by 
Amendment No. 1, is approved.
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    \8\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
 [FR Doc. E8-1177 Filed 1-23-08; 8:45 am]
BILLING CODE 8011-01-P