

[Federal Register: August 21, 2007 (Volume 72, Number 161)]
[Notices]               
[Page 46697-46698]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21au07-120]                         


[[Page 46697]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56249; File No. SR-Phlx-2007-27]

 
Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; 
Notice of Filing of Proposed Rule Change Relating to the 
Standardization of Rules for Equity, Index and ETF Options

August 14, 2007.
    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 March 21, 2007, the Philadelphia Stock Exchange, Inc. (``Phlx'' 
or ``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III, below, which Items have been substantially prepared by the 
Phlx. On July 25, 2007, the Exchange filed Amendment No. 1 to the 
proposed rule change. The Commission is publishing this notice to 
solicit comments on the proposed rule change, as amended, from 
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Phlx proposes to amend Phlx Rule 1014(c)(i)(A) relating to 
quote spread parameters (bid/ask differentials) and Phlx Rule 
1014(g)(i)(B) relating to purchase or sale priority for orders of 100 
contracts or more, to standardize the rules such that they would apply 
equally to options on equities, options on exchange-traded fund 
(``ETF'') shares, and index options.
    The text of the proposed rule change is available on Phlx's Web 
site at (http://www.Phlx.com/exchange/phlx-rule-fil.hlm), at the 

Exchange's Office of the Secretary and 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 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 amend the above-
mentioned rules so that they would apply equally to options on 
equities, options on ETFs, and index options. Currently, Phlx's rules 
concerning bid/ask differentials and split-price priority in open 
outcry apply either exclusively to equity and ETF options, or apply 
differently to equity and ETF options versus index options. In order to 
standardize the applicability of Phlx's rules to all options traded on 
Phlx, the following rule changes are proposed:

Bid/Ask Differentials

    Currently, Phlx Rule 1014(c)(i)(A) includes only language 
concerning equity options. In order to clarify the applicability of the 
rule to all options traded on the Exchange, including index options, 
and options on ETFs, the proposal would specifically list index options 
and options on ETFs in the rule.

Purchase or Sale Priority for Orders of 100 Contracts or More

    Phlx Rule 1014(g)(i)(B) currently affords priority in open outcry 
to a member that purchases (sells) 50 or more option contracts of a 
particular series at a particular price or prices, at the next lower 
(higher) price, up to the equivalent number of option contracts of the 
same series that he purchased (sold) at the higher (lower) price or 
prices. The rule currently applies only to transactions in equity 
options (including options overlying ETFs).
    The proposed amendment would delete the limitation of applicability 
to equity and ETF options from the rule; the rule would therefore apply 
to all options traded on the Exchange, including index options.
    The Exchange believes that the standardization of these rules 
should obviate any potential confusion among customers and Exchange 
members concerning their applicability.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \3\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \4\ 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 adopting standardized rules that apply to all options traded on the 
Exchange.
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    \3\ 15 U.S.C. 78f(b).
    \4\ 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

    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 Phlx consents, the Commission shall: (a) By order approve such 
proposed rule change, or (b) institute proceedings to determine whether 
the proposed rule change should be disapproved.

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-2007-27 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities andExchange Commission, 100 F Street, NE, 
Washington, DC 20549-1090.
    All submissions should refer to File Number SR-Phlx-2007-27. 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

[[Page 46698]]

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, 100 F Street, NE, Washington, DC 20549, on official 
business days between the hours of 10 a.m. and 3 p.m.. Copies of the 
filing also will be available for inspection and copying at the 
principal office of the Phlx. 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-2007-27 and should be submitted on or before 
September 11, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\5\
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    \5\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-16392 Filed 8-20-07; 8:45 am]

BILLING CODE 8010-01-P
