Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Participation Guarantees for Crossing and Facilitation Orders, 42888-42890 [E8-16837]
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Federal Register / Vol. 73, No. 142 / Wednesday, July 23, 2008 / Notices
III. Accelerated Approval
The Commission finds good cause,
pursuant to Section 19(b)(2) of the
Act,202 for approving the proposal, as
modified by Amendment Nos. 1 and 2,
prior to the thirtieth day after the date
of publication of notice of filing of
Amendment No. 2 in the Federal
Register.203 In Amendment No. 2, Phlx
proposed to adopt as rules of the
Exchange the Certificate of
Incorporation and By-Laws of NASDAQ
OMX. The Certificate of Incorporation,
as filed by the Exchange, was previously
approved by the Commission as rules of
Nasdaq.204 The NASDAQ OMX By-Laws
were similarly approved by the
Commission.205 As filed by the
Exchange, the NASDAQ OMX By-Laws
include certain new terminology to
reflect the acquisition of Phlx by
NASDAQ OMX. These changes were
filed by NASDAQ Exchange as a
proposed rule change, and were
published for comment.206 The
Commission received no comments on
the proposed changes to the NASDAQ
OMX By-Laws.
As discussed more fully above and in
the NASDAQ Stock Market Proposal,
certain provisions of NASDAQ OMX’s
Certificate and By-Laws are designed to
facilitate the ability of NASDAQ OMX’s
SRO Subsidiaries, including Phlx, to
maintain the independence of each of
the SRO Subsidiaries’ self-regulatory
function, enable each SRO Subsidiary to
operate in a manner that complies with
the federal securities laws, and facilitate
the ability of each SRO subsidiary and
the Commission to fulfill their
regulatory and oversight obligations
under the Act.207 As stated above, the
Commission finds that such provisions
are consistent with the Act.208 Notably,
the NASDAQ OMX Certificate and ByLaws are rules of NASDAQ Exchange
that have been approved previously by
the Commission, as noted above, and
the changes to the NASDAQ OMX ByLaws were published for notice and
comment, as noted above, and the
202 15
U.S.C. 78s(b)(2).
to Section 19(b)(2) of the Act, 15
U.S.C. 78s(b)(2), the Commission may not approve
any proposed rule change, or amendment thereto,
prior to the thirtieth day after the date of
publication of the notice thereof, unless the
Commission finds good cause for so doing.
204 See Securities Exchange Act Release No.
51328, supra note 101.
205 See id.
206 See Securities Exchange Act Release No.
57761, supra note 4.
207 See supra Section III.C.1 (discussing, for
example the duty of the board, officers, employees
and agents NASDAQ OMX to give due regard to the
preservation of the independence of the Phlx’s selfregulatory function).
208 See supra note 56 and accompanying text.
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203 Pursuant
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18:14 Jul 22, 2008
Jkt 214001
Commission did not receive any
comments thereon. Accordingly, the
Commission finds good cause for
approving the Phlx’s proposal, as
modified by Amendment Nos. 1 and 2,
on an accelerated basis, pursuant to
Section 19(b)(2) of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning Amendment No.
2, including whether Amendment No. 2
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–2008–31 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street, NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–Phlx–2008–31. 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 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–Phlx–2008–31 and should
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Fmt 4703
Sfmt 4703
be submitted on or before August 13,
2008.
V. 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.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,209 that the
proposed rule change (SR–Phlx–2008–
31), as modified by Amendment Nos. 1
and 2 thereto, be and hereby is
approved on an accelerated basis.
By the Commission.
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–16760 Filed 7–22–08; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–58185; File No. SR–Phlx–
2008–54]
Self-Regulatory Organizations;
Philadelphia Stock Exchange, Inc.;
Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change Relating to Participation
Guarantees for Crossing and
Facilitation Orders
July 17, 2008.
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 July 14,
2008, the Philadelphia Stock Exchange,
Inc. (‘‘Phlx’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’)
the proposed rule change as described
in Items I, II, and III below, which Items
have been prepared by the Phlx. The
Phlx has submitted the proposed rule
change as a ‘‘non-controversial’’
proposed rule change pursuant to
Section 19(b)(3)(A) of the Act 3 and Rule
19b–4(f)(6) thereunder.4 The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Phlx proposes to amend
Exchange Rule 1064, ‘‘Crossing,
Facilitation and Solicited Orders,’’ to
209 15
U.S.C. 78s(b)(2).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
1 15
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Federal Register / Vol. 73, No. 142 / Wednesday, July 23, 2008 / Notices
provide that the percentage of the order
which a Floor Broker is entitled to cross
in equity, index and U.S. dollar-settled
foreign currency options, after all public
customer orders that were (1) on the
limit order book and then (2)
represented in the trading crowd at the
time the market was established have
been satisfied, is 40% of the remaining
contracts in the order if the order is
traded at or between the best bid or offer
given by the crowd in response to the
Floor Broker’s initial request for a
market.
The text of the proposed rule change
is available at the Exchange, the
Commission’s Public Reference Room,
and https://www.phlx.com/regulatory/
reg_rulefilings.aspx.
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
mstockstill on PROD1PC66 with NOTICES
1. Purpose
The purpose of the proposed rule
change is to enhance the Exchange’s
ability to compete for order flow in all
options traded on the Exchange by
establishing uniform participation
guarantee rules.
Exchange Rule 1064, Commentary .02
currently guarantees a participation
percentage to Floor Brokers representing
crossing and facilitation orders in open
outcry. The percentage of the order
which a Floor Broker is entitled to cross,
after all public customer orders that
were (1) on the limit order book and
then (2) represented in the trading
crowd at the time the market was
established have been satisfied, is
currently 40% of the remaining
contracts in the order respecting equity
options, and 20% of the remaining
contracts in the order respecting index
options and U.S. dollar-settled foreign
currency options.
Under the proposal, the participation
guarantee would be the same for all
options traded on the Exchange.
Specifically, Rule 1064, Commentary
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18:14 Jul 22, 2008
Jkt 214001
.02 (iii) would continue to allow a
participation guarantee to Floor Brokers
of 40% for equity options (including
options overlying Exchange Traded
Fund shares), and would increase the
participation guarantee to Floor Brokers
representing crossing and facilitation
orders in index options and U.S. dollarsettled foreign currency options from
the current 20% to 40%. Thus, the
participation guarantee for all options
traded on the Exchange would be 40%.
The proposed rule change would have
an effect on the Enhanced Specialist
Participation 5 respecting index options
and U.S. dollar-settled foreign currency
options. Rule 1064, Commentary
.02(vi)(A) currently states that,
respecting orders for index options and
U.S. dollar-settled foreign currency
options, the Enhanced Specialist
Participation may only be 20% of the
original order after customer orders
have been executed for orders crossed
pursuant to paragraph (vi) unless the
Floor Broker has chosen to cross less
than its 20% entitlement, in which case
the Enhanced Specialist Participation
will be a percentage that combined with
the percentage the firm crossed is no
more than 40% of the original order.
The proposed rule change would
increase the ‘‘20% entitlement’’
specified in the rule to 40%. Thus, the
Enhanced Specialist Participation will
apply only to the extent that the Floor
Broker elects not to cross his or her
entire 40% entitlement.
For purposes of simplicity, the
Exchange proposes to amend
Commentary .02(vi)(B) to state that the
specialist shall not be entitled to receive
the Enhanced Specialist Participation in
equity, index and U.S. dollar-settled
foreign currency options unless the
Floor Broker has chosen to cross less
than its 40% entitlement, and to
incorporate this text into one single
paragraph (A), since it would no longer
be necessary to differentiate index
options and U.S. dollar-settled foreign
currency options from all other options
traded on the Exchange for purposes of
the crossing and facilitation
participation guarantee.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,6 in general, and furthers the
objectives of Section 6(b)(5) of the Act,7
5 The ‘‘Enhanced Specialist Participation’’ entitles
the specialist to a greater than equal share of the
portion of an executed order that is divided among
the specialist and any non-customer accounts that
were bidding or offering at the same execution
price. See Exchange Rule 1014(g).
6 15 U.S.C. 78f(b).
7 15 U.S.C. 78f(b)(5).
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42889
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, by
enabling the Exchange to better compete
for order flow through an increase to the
participation guarantee for crossing and
facilitation orders in index options and
U.S. dollar-settled foreign currency
options.
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 not
necessary or appropriate in furtherance
of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A) of the Act 8 and
subparagraph (f)(6) of Rule 19b–4
thereunder.9 Because the Phlx has
designated the proposed rule change as
one that: (1) Does not significantly affect
the protection of investors or the public
interest; (2) does not impose any
significant burden on competition; and
(3) does not become operative for 30
days from the date on which it was
filed, or such shorter time as the
Commission may designate if consistent
with the protection of investors and the
public interest, the proposed rule
change has become effective pursuant to
Section 19(b)(3)(A) of the Act and Rule
19b–4(f)(6) hereunder. As required
under Rule 19b–4(f)(6)(iii), the
Exchange provided the Commission
with written notice of its intent to file
the proposed rule change at least five
business days prior to filing the
proposal with the Commission.
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily abrogate
the rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.
8 15
9 17
E:\FR\FM\23JYN1.SGM
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
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42890
Federal Register / Vol. 73, No. 142 / Wednesday, July 23, 2008 / Notices
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–2008–54 on the
subject line.
Paper Comments
mstockstill on PROD1PC66 with NOTICES
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street, NE.,
Washington, DC 20549–1090.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–16837 Filed 7–22–08; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–58180; File No. SR–SCCP–
2008–01]
Self-Regulatory Organizations; Stock
Clearing Corporation of Philadelphia;
Notice of Filing of Amendment No. 1
and Order Granting Accelerated
Approval to a Proposed Rule Change,
as Modified by Amendment No. 1
Thereto, To Amend and Restate Its
Articles of Incorporation
July 17, 2008.
I. Introduction
On April 24, 2008, Stock Clearing
All submissions should refer to File
Corporation of Philadelphia (‘‘SCCP’’)
Number SR–Phlx–2008–54. This file
filed with the Securities and Exchange
number should be included on the
Commission (‘‘Commission’’) a
subject line if e-mail is used. To help the
proposed rule change pursuant to
Commission process and review your
Section 19(b)(1) of the Securities
comments more efficiently, please use
Exchange Act of 1934 (‘‘Act’’).1 Notice
only one method. The Commission will of the proposal was published in the
post all comments on the Commission’s Federal Register on May 20, 2008.2
Internet Web site (https://www.sec.gov/
SCCP filed Amendment No. 1 to the
rules/sro.shtml). Copies of the
proposed rule change on July 2, 2008.3
submission, all subsequent
The Commission received no comments
amendments, all written statements
on the proposed rule change. This order
with respect to the proposed rule
provides notice of filing of Amendment
change that are filed with the
No. 1 to the proposed rule change, and
Commission, and all written
grants accelerated approval to the
communications relating to the
proposed rule change, as modified by
Amendment No. 1.
proposed rule change between the
Commission and any person, other than II. Description
those that may be withheld from the
SCCP is amending its current Articles
public in accordance with the
of Incorporation (‘‘Articles’’) to more
provisions of 5 U.S.C. 552, will be
clearly state that all of the authorized
available for inspection and copying in
shares of common stock of SCCP are
the Commission’s Public Reference
Room, 100 F Street, NE., Washington,
10 17 CFR 200.30–3(a)(12).
DC 20549, on official business days
1 15 U.S.C. 78s(b)(1).
2 Securities Exchange Act Release No. 57817 (May
between the hours of 10 a.m. and 3 p.m.
14, 2008), 73 FR 29171.
Copies of such filing also will be
3 In Amendment No. 1, SCCP filed the complete
available for inspection and copying at
Certificate of Incorporation and amended By-Laws
the principal office of the Exchange. All of The NASDAQ OMX Group, Inc. (‘‘NASDAQ
comments received will be posted
OMX’’) in order to propose their adoption as rules
of SCCP. The By-Laws contained minor
without change; the Commission does
amendments to terminology to apply to SCCP and
not edit personal identifying
SCCP’s parent corporation, the Philadelphia Stock
information from submissions. You
Exchange, Inc. (‘‘Phlx’’), all of the same provisions
that are currently specifically applicable to The
should submit only information that
you wish to make available publicly. All NASDAQ Stock Market LLC (‘‘NASDAQ’’). Such
amendments are being made in connection with the
submissions should refer to File
NASDAQ OMX Merger, as defined in footnote 6
Number SR–Phlx–2008–54 and should
below. The amended By-Laws were published for
comment in a separate filing by NASDAQ. See
be submitted on or before August 13,
Securities Exchange Act Release No. 57761 (May 1,
2008.
2008), 73 FR 26182 (May 8, 2008) (notice of SR–
NASDAQ–2008–035) (‘‘NASDAQ Stock Market
Proposal’’).
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18:14 Jul 22, 2008
Jkt 214001
PO 00000
Frm 00120
Fmt 4703
Sfmt 4703
issued and outstanding and are held by
Phlx. In addition, SCCP is adding
language to its Articles relating to
transfers and assignments of SCCP
shares of stock. SCCP is restating its
Articles to consolidate previous
amendments and make other technical
amendments, which according to SCCP
will modernize the existing language in
the Articles.4
The purpose of the amendment and
restatement of the Articles is to ensure
that any future change in ownership of
SCCP stock, whether transferred or
assigned, in whole or in part, would be
filed with the Commission under
Section 19 of the Act and the rules
promulgated thereunder. This language
is consistent with language recently
approved by the Commission in
connection with the amending by Phlx
of its Certificate of Incorporation and
By-Laws 5 as a result of the proposed
acquisition of Phlx by NASDAQ OMX.6
III. Discussion
The Commission finds that the rule
change is consistent with the
requirements of the Act and the rules
and regulations thereunder and
particularly with the requirements of
Section 17A(b)(3)(C) of the Act.7 The
proposed rule change would amend
SCCP’s Articles to reflect the proposed
NASDAQ OMX Merger. The
Commission notes that the proposed
rule change does not amend SCCP’s
rules or procedures with respect to the
clearance and settlement of securities
transactions or the safeguarding of
securities and funds which are in
SCCP’s control or for which it is
responsible. Section 17A(b)(3)(C) of the
Act requires that a clearing agency’s
rules assure the fair representation of its
shareholders and participants in the
selection of its directors and
administration of its affairs. SCCP
4 The specific amendments proposed for SCCP’s
Articles can be viewed at https://www.phlx.com/
SCCP/sccp_rules/SR-SCCP-2008-01.pdf.
5 Securities Exchange Act Release No. 58179 (July
17, 2008) [File No. SR–Phlx–2008–31] (order
approving proposed rule change relating to
NASDAQ OMX’s acquisition of Phlx).
6 On November 7, 2007, NASDAQ OMX
announced that it had entered into an agreement
with Phlx pursuant to which NASDAQ OMX would
acquire all of the outstanding capital stock of Phlx.
In connection with this acquisition, Pinnacle
Merger Corp., a Delaware corporation and wholly
owned subsidiary of NASDAQ OMX, would be
merged with and into Phlx with Phlx surviving the
merger (‘‘NASDAQ OMX Merger’’). As a result of
the NASDAQ OMX Merger, all of Phlx’s common
stock would be owned by NASDAQ OMX.
Thereafter, NASDAQ OMX would operate Phlx as
a wholly-owned subsidiary and SCCP as an indirect
wholly-owned subsidiary. Phlx and SCCP would
continue to be separate self-regulatory
organizations.
7 15 U.S.C. 78q–1(b)(3)(C).
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]]>Agencies
[Federal Register Volume 73, Number 142 (Wednesday, July 23, 2008)]
[Notices]
[Pages 42888-42890]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-16837]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-58185; File No. SR-Phlx-2008-54]
Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to Participation Guarantees for Crossing and Facilitation
Orders
July 17, 2008.
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 July 14, 2008, the Philadelphia Stock Exchange, Inc. (``Phlx'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I, II, and III below, which Items have been prepared by the Phlx.
The Phlx has submitted the proposed rule change as a ``non-
controversial'' proposed rule change pursuant to Section 19(b)(3)(A) of
the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Phlx proposes to amend Exchange Rule 1064, ``Crossing,
Facilitation and Solicited Orders,'' to
[[Page 42889]]
provide that the percentage of the order which a Floor Broker is
entitled to cross in equity, index and U.S. dollar-settled foreign
currency options, after all public customer orders that were (1) on the
limit order book and then (2) represented in the trading crowd at the
time the market was established have been satisfied, is 40% of the
remaining contracts in the order if the order is traded at or between
the best bid or offer given by the crowd in response to the Floor
Broker's initial request for a market.
The text of the proposed rule change is available at the Exchange,
the Commission's Public Reference Room, and https://www.phlx.com/
regulatory/reg_rulefilings.aspx.
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 enhance the
Exchange's ability to compete for order flow in all options traded on
the Exchange by establishing uniform participation guarantee rules.
Exchange Rule 1064, Commentary .02 currently guarantees a
participation percentage to Floor Brokers representing crossing and
facilitation orders in open outcry. The percentage of the order which a
Floor Broker is entitled to cross, after all public customer orders
that were (1) on the limit order book and then (2) represented in the
trading crowd at the time the market was established have been
satisfied, is currently 40% of the remaining contracts in the order
respecting equity options, and 20% of the remaining contracts in the
order respecting index options and U.S. dollar-settled foreign currency
options.
Under the proposal, the participation guarantee would be the same
for all options traded on the Exchange. Specifically, Rule 1064,
Commentary .02 (iii) would continue to allow a participation guarantee
to Floor Brokers of 40% for equity options (including options overlying
Exchange Traded Fund shares), and would increase the participation
guarantee to Floor Brokers representing crossing and facilitation
orders in index options and U.S. dollar-settled foreign currency
options from the current 20% to 40%. Thus, the participation guarantee
for all options traded on the Exchange would be 40%.
The proposed rule change would have an effect on the Enhanced
Specialist Participation \5\ respecting index options and U.S. dollar-
settled foreign currency options. Rule 1064, Commentary .02(vi)(A)
currently states that, respecting orders for index options and U.S.
dollar-settled foreign currency options, the Enhanced Specialist
Participation may only be 20% of the original order after customer
orders have been executed for orders crossed pursuant to paragraph (vi)
unless the Floor Broker has chosen to cross less than its 20%
entitlement, in which case the Enhanced Specialist Participation will
be a percentage that combined with the percentage the firm crossed is
no more than 40% of the original order. The proposed rule change would
increase the ``20% entitlement'' specified in the rule to 40%. Thus,
the Enhanced Specialist Participation will apply only to the extent
that the Floor Broker elects not to cross his or her entire 40%
entitlement.
---------------------------------------------------------------------------
\5\ The ``Enhanced Specialist Participation'' entitles the
specialist to a greater than equal share of the portion of an
executed order that is divided among the specialist and any non-
customer accounts that were bidding or offering at the same
execution price. See Exchange Rule 1014(g).
---------------------------------------------------------------------------
For purposes of simplicity, the Exchange proposes to amend
Commentary .02(vi)(B) to state that the specialist shall not be
entitled to receive the Enhanced Specialist Participation in equity,
index and U.S. dollar-settled foreign currency options unless the Floor
Broker has chosen to cross less than its 40% entitlement, and to
incorporate this text into one single paragraph (A), since it would no
longer be necessary to differentiate index options and U.S. dollar-
settled foreign currency options from all other options traded on the
Exchange for purposes of the crossing and facilitation participation
guarantee.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\6\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\7\ 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,
by enabling the Exchange to better compete for order flow through an
increase to the participation guarantee for crossing and facilitation
orders in index options and U.S. dollar-settled foreign currency
options.
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\6\ 15 U.S.C. 78f(b).
\7\ 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 not necessary or appropriate in
furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A) of the Act \8\ and subparagraph (f)(6) of Rule 19b-4
thereunder.\9\ Because the Phlx has designated the proposed rule change
as one that: (1) Does not significantly affect the protection of
investors or the public interest; (2) does not impose any significant
burden on competition; and (3) does not become operative for 30 days
from the date on which it was filed, or such shorter time as the
Commission may designate if consistent with the protection of investors
and the public interest, the proposed rule change has become effective
pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-4(f)(6)
hereunder. As required under Rule 19b-4(f)(6)(iii), the Exchange
provided the Commission with written notice of its intent to file the
proposed rule change at least five business days prior to filing the
proposal with the Commission.
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(6).
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate the rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.
[[Page 42890]]
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-2008-54 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-Phlx-2008-54. 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 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-Phlx-2008-54 and should be
submitted on or before August 13, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-16837 Filed 7-22-08; 8:45 am]
BILLING CODE 8010-01-P
