

[Federal Register: May 17, 2007 (Volume 72, Number 95)]
[Notices]               
[Page 27867-27868]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17my07-122]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55744; File No. 4-429]

 
Joint Industry Plan; Order Approving Joint Amendment No. 22 to 
the Plan for the Purpose of Creating and Operating an Intermarket 
Option Linkage Relating to Response Time for Certain Orders Sent 
Through the Linkage

May 11, 2007.

I. Introduction

    On February 2, 2007, February 15, 2007, February 5, 2007, February 
7, 2007, January 30, 2007, and February 13, 2007, the American Stock 
Exchange LLC (``Amex''), the Boston Stock Exchange, Inc. (``BSE''), the 
Chicago Board Options Exchange, Incorporated (``CBOE''), the 
International Securities Exchange, LLC (``ISE''), the NYSE Arca, Inc. 
(``NYSE Arca''), and the Philadelphia Stock Exchange, Inc. (``Phlx'') 
(collectively, ``Participants''), respectively, filed with the 
Securities and Exchange Commission (``Commission'') pursuant to Section 
11A of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 608 
thereunder \2\ an amendment (``Joint Amendment No. 22'') to the Plan 
for the Purpose of Creating and Operating an Intermarket Option Linkage 
(``Linkage Plan'').\3\ In Joint Amendment No. 22, the Participants 
propose to reduce (i) the amount of time a member must wait after 
sending a Linkage Order \4\ to a market before the member \5\ can trade 
through that market and (ii) the timeframe within which a Participant 
must respond to a Linkage Order after receipt of that Order. On March 
8, 2007, the Commission summarily put into effect Joint Amendment No. 
22 on a temporary basis not to exceed 120 days and solicited comment on 
Joint Amendment No. 22 from interested persons.\6\ The Commission 
received no comments on Joint Amendment No. 22. This order approves 
Joint Amendment No. 22.
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    \1\ 15 U.S.C. 78k-1.
    \2\ 17 CFR 242.608.
    \3\ On July 28, 2000, the Commission approved a national market 
system plan for the purpose of creating and operating an intermarket 
options market linkage (``Linkage'') proposed by Amex, CBOE, and 
ISE. See Securities Exchange Act Release No. 43086 (July 28, 2000), 
65 FR 48023 (August 4, 2000). Subsequently, Phlx, Pacific Exchange, 
Inc. (n/k/a NYSE Arca), and BSE joined the Linkage Plan. See 
Securities Exchange Act Release Nos. 43573 (November 16, 2000), 65 
FR 70851 (November 28, 2000); 43574 (November 16, 2000), 65 FR 70850 
(November 28, 2000); and 49198 (February 5, 2004), 69 FR 7029 
(February 12, 2004).
    \4\ See Section 2(16) of the Linkage Plan. For the purposes of 
this Joint Amendment No. 22 only, references to ``Linkage Orders'' 
herein pertain to P/A Orders and Principal Orders. For definitions 
of ``P/A Order'' and ``Principal Order,'' see Section 2(16)(a) and 
(b) of the Linkage Plan, respectively.
    \5\ The term ``member,'' as used herein, includes NYSE Arca OTP 
Holders and OTP Firms and Boston Options Exchange (``BOX'') Options 
Participants. See NYSE Arca Rules 1.1(q) and 1.1(r) and Chapter I, 
Sec. 1(a)(40) of BOX Rules, respectively.
    \6\ See Securities Exchange Act Release No. 55436, 72 FR 12639 
(March 16, 2007).
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II. Description of the Proposed Amendment

    In Joint Amendment No. 22, the Participants proposed to reduce the 
amount of time a member must wait after sending a Linkage Order to a 
market before the member can trade through that market. The 
Participants proposed to decrease this time period

[[Page 27868]]

from 20 seconds to 5 seconds. The Participants also proposed to reduce 
the time frame in which a Participant must respond to a Linkage Order 
from 15 to 5 seconds after receipt of that Order.

III. Discussion and Commission Findings

    The Commission previously determined, pursuant to Rule 608 under 
the Act,\7\ to put into effect summarily on a temporary basis not to 
exceed 120 days, the changes to the Linkage Plan detailed above in 
Joint Amendment No. 22.\8\ After careful consideration of Joint 
Amendment No. 22, the Commission finds that approving Joint Amendment 
No. 22 is consistent with the requirements of the Act and the rules and 
regulations thereunder. Specifically, the Commission finds that Joint 
Amendment No. 22 is consistent with Section 11A of the Act \9\ and Rule 
608 thereunder \10\ in that it is appropriate in the public interest, 
for the protection of investors and the maintenance of fair and orderly 
markets. The Commission believes that reducing the time required by a 
Participant to respond to a Linkage Order and the amount of time a 
member sending a Linkage Order must wait before trading through a 
nonresponsive Participant should facilitate the more timely execution 
of orders across the options exchanges.
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    \7\ 17 CFR 242.608.
    \8\ See supra note 6.
    \9\ 15 U.S.C. 78k-1.
    \10\ 17 CFR 242.608.
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IV. Conclusion

    It is therefore ordered, pursuant to Section 11A of the Act \11\ 
and Rule 608 thereunder,\12\ that Joint Amendment No. 22 is approved.
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    \11\ 15 U.S.C. 78k-1.
    \12\ 17 CFR 242.608.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(29).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. E7-9437 Filed 5-16-07; 8:45 am]

BILLING CODE 8010-01-P
