Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change by NASDAQ OMX PHLX, Inc. Relating to Reducing the Exposure Time for Option Limit Orders to One Second, 71709-71711 [E8-27897]

Download as PDF Federal Register / Vol. 73, No. 228 / Tuesday, November 25, 2008 / Notices Alexandria, VA 22312 or send an e-mail to: PRA_Mailbox@sec.gov. Dated: November 19, 2008. Florence E. Harmon, Acting Secretary. [FR Doc. E8–27987 Filed 11–24–08; 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 15c1–7; OMB Control No. 3235–0134; SEC File No. 270–146. 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’’) has submitted to the Office of Management and Budget a request for approval of extension of the existing collection of information provided for in the following rule: Rule 15c1–7 (17 CFR 240.15c1–7) under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) (‘‘Exchange Act’’). Rule 15c1–7 states that any act of a broker-dealer designed to effect securities transactions with or for a customer account over which the broker-dealer (directly or through an agent or employee) has discretion will be considered a fraudulent, manipulative, or deceptive practice under the federal securities laws, unless a record is made of the transaction immediately by the broker-dealer. The record must include (a) the name of the customer, (b) the name, amount, and price of the security, and (c) the date and time when such transaction took place. The Commission estimates that 556 respondents collect information related to approximately 400,000 transactions annually under Rule 15c1– 7 and that each respondent would spend approximately 5 minutes on the collection of information for each transaction, for approximately 33,333 aggregate hours per year (approximately 60 hours per respondent). 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 VerDate Aug<31>2005 17:01 Nov 24, 2008 Jkt 217001 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 Lewis W. Walker, Acting Director/Chief Information Officer, Securities and Exchange Commission, c/o Shirley Martinson, 6432 General Green Way, Alexandria, VA 22312 or send an e-mail to: PRA_Mailbox@sec.gov. Dated: November 19, 2008. Florence E. Harmon, Acting Secretary. [FR Doc. E8–27988 Filed 11–24–08; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Sunshine Act Meeting Federal Register Citation of Previous Announcement [73 FR 68464, November 18, 2008]. STATUS: PLACE: Closed Meeting. 100 F Street, NW., Washington, DC. DATE AND TIME OF PREVIOUSLY ANNOUNCED MEETING: November 20, 2008 at 2 p.m. Deletion of an Item. The following item will not be considered during the Closed Meeting on Thursday, November 20, 2008: CHANGE IN THE MEETING: Consideration of amicus participation. At times, changes in Commission priorities require alterations in the scheduling of meeting items. For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact the Office of the Secretary at (202) 551–5400. Dated: November 20, 2008. Florence E. Harmon, Acting Secretary. [FR Doc. E8–28046 Filed 11–24–08; 8:45 am] BILLING CODE 8011–01–P PO 00000 Frm 00110 Fmt 4703 Sfmt 4703 71709 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–58949; File No. SR–Phlx– 2008–79] Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change by NASDAQ OMX PHLX, Inc. Relating to Reducing the Exposure Time for Option Limit Orders to One Second November 14, 2008. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1, and Rule 19b–4 2, thereunder, notice is hereby given that on November 10, 2008, NASDAQ OMX PHLX, 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 Exchange. 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 Exchange, pursuant to Section 19(b)(1) of the Act 3 and Rule 19b–4 thereunder,4 proposes to amend Exchange Rule 1080(c) to provide that: (i) Order Entry Firms 5 may not execute as principal against orders on the limit order book they represent as agent unless such agency orders are first exposed on the limit order book for at least one (1) second, or the Order Entry Firm has been bidding or offering on the Exchange for at least one (1) second prior to receiving an agency order that is executable against such order, and (ii) Order Entry Firms must expose orders they represent as agent for at least one (1) second before such orders may be automatically executed, in whole or in part, against orders solicited from members and non-member brokerdealers to transact with such orders. The text of the proposed rule change is available on the Exchange’s Website at http://www.phlx.com/regulatory/ reg_rulefilings.aspx. 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(1). 4 17 CFR 240.19b–4. 5 The term ‘‘Order Entry Firm’’ means a member organization of the Exchange that is able to route orders to the Exchange’s AUTOM system. See Exchange Rule 1080(c)(ii)(A)(1). 2 17 E:\FR\FM\25NON1.SGM 25NON1 71710 Federal Register / Vol. 73, No. 228 / Tuesday, November 25, 2008 / Notices 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 Exchange 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 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 proposed rule change is to reduce the exposure time during which Order Entry Firms may not execute as principal against orders they represent as agent while continuing to afford the opportunity for other market participants to execute at or better than the limit order price during such exposure period. Rules 1080(c)(ii)(C)(1) and (2) currently provide that an Order Entry Firm may not execute as principal against orders on the limit order book they represent as agent unless: (a) Agency orders are first exposed on the limit order book for at least three seconds, (b) the Order Entry Firm has been bidding or offering on the Exchange for at least three (3) seconds prior to receiving an agency order that is executable against such order, or (c) the Order Entry Firm proceeds in accordance with the crossing rules contained in Rule 1064.6 In addition, Order Entry Firms must expose orders they represent as agent for at least three (3) seconds before such orders may be automatically executed, in whole or in part, against orders solicited from members and non- jlentini on PROD1PC65 with NOTICES 6 Exchange Rule 1064 states, in relevant part: ‘‘An Options Floor Broker who holds orders to buy and sell the same option series may cross such orders, provided that he proceeds in the following manner: (i) In accordance with his responsibilities for due diligence, pursuant to Rule 155, an Options Floor Broker shall request bids and offers for such options series and make all persons in the trading crowd aware of his request. (ii) After providing an opportunity for such bids and offers to be made, he must bid and offer at prices differing by the minimum increment and must improve the market by bidding above the highest bid or offering below the lowest offer. (iii) If such higher bid or lower offer is not taken, he may cross the orders at such higher bid or lower offer by announcing by public outcry that he is crossing and giving the quantity and price.’’ VerDate Aug<31>2005 17:01 Nov 24, 2008 Jkt 217001 member broker-dealers to transact with such orders. Under the proposal, these exposure periods would be reduced to one second. The Exchange adopted the 3-second exposure period in August, 2006, in response to similar functionality already in existence on other options exchanges.7 The Exchange notes that in adopting the three-second order handling and exposure period, it recognized that three seconds would not be long enough to allow human interaction with the orders. Rather, market participants had become sufficiently automated that they could react to these orders electronically. In this context, the Exchange believes it would be in all market participants’ best interest to minimize the exposure period to a time frame that continues to allow adequate time for market participants to respond electronically, as both the order being exposed and the participants responding are subject to market risk during the exposure period. In this respect, the Exchange states that its experience with the three-second exposure time period indicates that one second would provide an adequate response time. The Exchange does not believe it is necessary or beneficial to the orders being exposed to continue to subject them to market risk for a full three seconds. The Exchange has numerous market participants that have the capability and do opt to respond within a one-second exposure period on the Exchange’s fully automated trading platform for options, Phlx XL.8 Recently, the Exchange distributed a survey to members that regularly participate in orders executed on Phlx XL that would be affected by the proposal. To substantiate that its members could receive, process, and communicate a response back to the Exchange within one second, the survey asked members to identify how many milliseconds it took for (i) a broadcast from the Exchange to reach their systems; (ii) their systems to generate responses; and (iii) their responses to reach the Exchange. The survey results indicate that the time it takes a message to travel between the Exchange and its members is not more than 100 milliseconds each way. The survey also indicated that it typically takes not more than 50 milliseconds for member systems to process the information and generate a response. Thus, the survey indicated that it typically takes not more 7 See Securities Exchange Act Release No. 54298 (August 9, 2006), 71 FR 47282 (August 16, 2006) (SR–Phlx–2006–41). 8 See Securities Exchange Act Release No. 50100 (July 27, 2004), 69 FR 44612 (August 3, 2004) (SR– Phlx–2003–59). PO 00000 Frm 00111 Fmt 4703 Sfmt 4703 than 250 milliseconds for members to receive, process, and respond to broadcast messages related to the various Mechanisms. Additionally, all 8 members that responded to the survey indicated that reducing the exposure period to one second would not impair their ability to participate in orders affected by the proposal. The Exchange believes that this information provides additional support for its assertion that reducing the exposure periods from three seconds to one second will continue to provide members with sufficient time to ensure effective interaction with orders. The Exchange is submitting the instant proposal in order to remain competitive with other exchanges that have reduced the exposure period from 3 seconds to 1 second.9 The Exchange believes that reducing its order handling and exposure periods from three seconds to one second will benefit market participants. The Exchange further believes that reducing the time periods to one second will allow it to provide investors and other market participants with more timely executions, thereby reducing market risk.10 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act 11 in general, and furthers the objectives of Section 6(b)(5) of the Act 12 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 providing investors with more timely execution of their options orders, while ensuring that there is an adequate exposure of limit orders in the Exchange’s marketplace. 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 9 See Securities Exchange Act Release Nos. 57849 (May 22, 2008), 73 FR 31167 (May 30, 2008) (SR– CBOE–2008–16); and 58224 (July 25, 2008), 73 FR 44303 (July 30, 2008) (SR–ISE–2007–94). 10 The Exchange believes that the proposed timeframe would give market participants sufficient time to respond, compete, and provide price improvement for orders. The Exchange also notes that electronic systems are readily available to, if not already in place for, Exchange members that allow them to respond in a meaningful way within the proposed timeframe. 11 15 U.S.C. 78f(b). 12 15 U.S.C. 78f(b)(5). E:\FR\FM\25NON1.SGM 25NON1 Federal Register / Vol. 73, No. 228 / Tuesday, November 25, 2008 / Notices necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received from Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding, or (ii) as to which the Phlx consents, the Commission will: (A) By order approve such proposed rule change, or (B) Institute proceedings to determine whether the proposed rule change should be disapproved. The Exchange has requested accelerated approval of this proposed rule change prior to the 30th day after the date of publication of the notice in the Federal Register. The Commission is considering granting accelerated approval of the proposed rule change at the end of a 15-day comment period. 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: jlentini on PROD1PC65 with NOTICES Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–Phlx–2008–79 on the subject line. 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. Copies of the 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–2008–79 and should be submitted on or before December 10, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Florence E. Harmon, Acting Secretary. [FR Doc. E8–27897 Filed 11–24–08; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–58975; File No. SR–NYSE– 2008–121] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Establish Fees for Transactions in Stocks With a Price of Less than $1.00 per Share November 19, 2008. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 Paper Comments notice is hereby given that on November 14, 2008, New York Stock Exchange • Send paper comments in triplicate LLC (‘‘NYSE’’ or ‘‘Exchange’’) filed with to Florence E. Harmon, Acting the Securities and Exchange Secretary, Securities and Exchange Commission, 100 F Street, NE., Commission (‘‘Commission’’) the Washington, DC 20549–1090. proposed rule changes as described in All submissions should refer to File Items I, II and III below, which Items Number SR–Phlx–2008–79. This file have been prepared by the Exchange. number should be included on the The Commission is publishing this subject line if e-mail is used. To help the notice to solicit comments on the Commission process and review your proposed rule changes from interested comments more efficiently, please use persons. only one method. The Commission will post all comments on the Commission’s 13 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). Internet Web site (http://www.sec.gov/ 2 17 CFR 240.19b–4. rules/sro.shtml). VerDate Aug<31>2005 17:01 Nov 24, 2008 Jkt 217001 PO 00000 Frm 00112 Fmt 4703 Sfmt 4703 71711 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange is proposing to establish a fee for all transactions in stocks that have a trading price below $1.00 equal to the lesser of (i) .3% of the aggregate transaction value and (ii) the fee that would have applied if the stock did not have a trading price below $1.00. Transactions subject to this fee limitation will include orders routed to other markets, but not transactions that would not otherwise be subject to a transaction fee. With respect to transactions in stocks with a trading price below $1.00, Designated Market Makers (‘‘DMMs’’) will receive a rebate of $0.0004 per share for all transactions when adding liquidity in round lots in both Less Active Securities and More Active Securities. This filing also deletes the Exchange Traded Funds (‘‘ETFs’’) pricing from the Exchange’s 2008 Price List, as ETFs are no longer traded on the Exchange. The text of the proposed rule change is available on the Exchange’s Web site (http:// www.nyse.com), at the Exchange’s Office of the Secretary, 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, the self-regulatory organization 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 NYSE 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 Exchange is proposing to establish a fee for all transactions in stocks that have a trading price below $1.00 equal to the lesser of (i) .3% of the aggregate transaction value and (ii) the fee that would have applied if the stock did not have a trading price below $1.00. Transactions subject to this fee limitation will include orders routed to other markets, but not transactions that would not otherwise be subject to a transaction fee. With respect to transactions in stocks with a trading price below $1.00, DMMs will receive a E:\FR\FM\25NON1.SGM 25NON1

Agencies

[Federal Register Volume 73, Number 228 (Tuesday, November 25, 2008)]
[Notices]
[Pages 71709-71711]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-27897]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58949; File No. SR-Phlx-2008-79]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by NASDAQ OMX PHLX, Inc. Relating to Reducing the Exposure Time 
for Option Limit Orders to One Second

November 14, 2008.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\, and Rule 19b-4 \2\, thereunder, notice is hereby given 
that on November 10, 2008, NASDAQ OMX PHLX, 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 
Exchange. 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.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange, pursuant to Section 19(b)(1) of the Act \3\ and Rule 
19b-4 thereunder,\4\ proposes to amend Exchange Rule 1080(c) to provide 
that: (i) Order Entry Firms \5\ may not execute as principal against 
orders on the limit order book they represent as agent unless such 
agency orders are first exposed on the limit order book for at least 
one (1) second, or the Order Entry Firm has been bidding or offering on 
the Exchange for at least one (1) second prior to receiving an agency 
order that is executable against such order, and (ii) Order Entry Firms 
must expose orders they represent as agent for at least one (1) second 
before such orders may be automatically executed, in whole or in part, 
against orders solicited from members and non-member broker-dealers to 
transact with such orders.
---------------------------------------------------------------------------

    \3\ 15 U.S.C. 78s(b)(1).
    \4\ 17 CFR 240.19b-4.
    \5\ The term ``Order Entry Firm'' means a member organization of 
the Exchange that is able to route orders to the Exchange's AUTOM 
system. See Exchange Rule 1080(c)(ii)(A)(1).
---------------------------------------------------------------------------

    The text of the proposed rule change is available on the Exchange's 
Website at http://www.phlx.com/regulatory/reg_rulefilings.aspx.

[[Page 71710]]

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 Exchange 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 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 proposed rule change is to reduce the exposure 
time during which Order Entry Firms may not execute as principal 
against orders they represent as agent while continuing to afford the 
opportunity for other market participants to execute at or better than 
the limit order price during such exposure period.
    Rules 1080(c)(ii)(C)(1) and (2) currently provide that an Order 
Entry Firm may not execute as principal against orders on the limit 
order book they represent as agent unless: (a) Agency orders are first 
exposed on the limit order book for at least three seconds, (b) the 
Order Entry Firm has been bidding or offering on the Exchange for at 
least three (3) seconds prior to receiving an agency order that is 
executable against such order, or (c) the Order Entry Firm proceeds in 
accordance with the crossing rules contained in Rule 1064.\6\
---------------------------------------------------------------------------

    \6\ Exchange Rule 1064 states, in relevant part: ``An Options 
Floor Broker who holds orders to buy and sell the same option series 
may cross such orders, provided that he proceeds in the following 
manner: (i) In accordance with his responsibilities for due 
diligence, pursuant to Rule 155, an Options Floor Broker shall 
request bids and offers for such options series and make all persons 
in the trading crowd aware of his request. (ii) After providing an 
opportunity for such bids and offers to be made, he must bid and 
offer at prices differing by the minimum increment and must improve 
the market by bidding above the highest bid or offering below the 
lowest offer. (iii) If such higher bid or lower offer is not taken, 
he may cross the orders at such higher bid or lower offer by 
announcing by public outcry that he is crossing and giving the 
quantity and price.''
---------------------------------------------------------------------------

    In addition, Order Entry Firms must expose orders they represent as 
agent for at least three (3) seconds before such orders may be 
automatically executed, in whole or in part, against orders solicited 
from members and non-member broker-dealers to transact with such 
orders. Under the proposal, these exposure periods would be reduced to 
one second.
    The Exchange adopted the 3-second exposure period in August, 2006, 
in response to similar functionality already in existence on other 
options exchanges.\7\ The Exchange notes that in adopting the three-
second order handling and exposure period, it recognized that three 
seconds would not be long enough to allow human interaction with the 
orders. Rather, market participants had become sufficiently automated 
that they could react to these orders electronically. In this context, 
the Exchange believes it would be in all market participants' best 
interest to minimize the exposure period to a time frame that continues 
to allow adequate time for market participants to respond 
electronically, as both the order being exposed and the participants 
responding are subject to market risk during the exposure period. In 
this respect, the Exchange states that its experience with the three-
second exposure time period indicates that one second would provide an 
adequate response time. The Exchange does not believe it is necessary 
or beneficial to the orders being exposed to continue to subject them 
to market risk for a full three seconds.
---------------------------------------------------------------------------

    \7\ See Securities Exchange Act Release No. 54298 (August 9, 
2006), 71 FR 47282 (August 16, 2006) (SR-Phlx-2006-41).
---------------------------------------------------------------------------

    The Exchange has numerous market participants that have the 
capability and do opt to respond within a one-second exposure period on 
the Exchange's fully automated trading platform for options, Phlx 
XL.\8\ Recently, the Exchange distributed a survey to members that 
regularly participate in orders executed on Phlx XL that would be 
affected by the proposal. To substantiate that its members could 
receive, process, and communicate a response back to the Exchange 
within one second, the survey asked members to identify how many 
milliseconds it took for (i) a broadcast from the Exchange to reach 
their systems; (ii) their systems to generate responses; and (iii) 
their responses to reach the Exchange. The survey results indicate that 
the time it takes a message to travel between the Exchange and its 
members is not more than 100 milliseconds each way. The survey also 
indicated that it typically takes not more than 50 milliseconds for 
member systems to process the information and generate a response. 
Thus, the survey indicated that it typically takes not more than 250 
milliseconds for members to receive, process, and respond to broadcast 
messages related to the various Mechanisms. Additionally, all 8 members 
that responded to the survey indicated that reducing the exposure 
period to one second would not impair their ability to participate in 
orders affected by the proposal. The Exchange believes that this 
information provides additional support for its assertion that reducing 
the exposure periods from three seconds to one second will continue to 
provide members with sufficient time to ensure effective interaction 
with orders.
---------------------------------------------------------------------------

    \8\ See Securities Exchange Act Release No. 50100 (July 27, 
2004), 69 FR 44612 (August 3, 2004) (SR-Phlx-2003-59).
---------------------------------------------------------------------------

    The Exchange is submitting the instant proposal in order to remain 
competitive with other exchanges that have reduced the exposure period 
from 3 seconds to 1 second.\9\ The Exchange believes that reducing its 
order handling and exposure periods from three seconds to one second 
will benefit market participants. The Exchange further believes that 
reducing the time periods to one second will allow it to provide 
investors and other market participants with more timely executions, 
thereby reducing market risk.\10\
---------------------------------------------------------------------------

    \9\ See Securities Exchange Act Release Nos. 57849 (May 22, 
2008), 73 FR 31167 (May 30, 2008) (SR-CBOE-2008-16); and 58224 (July 
25, 2008), 73 FR 44303 (July 30, 2008) (SR-ISE-2007-94).
    \10\ The Exchange believes that the proposed timeframe would 
give market participants sufficient time to respond, compete, and 
provide price improvement for orders. The Exchange also notes that 
electronic systems are readily available to, if not already in place 
for, Exchange members that allow them to respond in a meaningful way 
within the proposed timeframe.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \11\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \12\ 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 providing investors with more timely execution of their 
options orders, while ensuring that there is an adequate exposure of 
limit orders in the Exchange's marketplace.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

[[Page 71711]]

necessary or appropriate in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received from Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding, or (ii) as to 
which the Phlx consents, the Commission will:
    (A) By order approve such proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.
    The Exchange has requested accelerated approval of this proposed 
rule change prior to the 30th day after the date of publication of the 
notice in the Federal Register. The Commission is considering granting 
accelerated approval of the proposed rule change at the end of a 15-day 
comment period.

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 (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-Phlx-2008-79 on the subject line.

Paper Comments

     Send paper comments in triplicate to Florence E. Harmon, 
Acting Secretary, Securities and Exchange Commission, 100 F Street, 
NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-Phlx-2008-79. 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 (http://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. Copies of the 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-2008-79 and should be submitted on or before December 10, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).

Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-27897 Filed 11-24-08; 8:45 am]
BILLING CODE 8011-01-P