

[Federal Register: December 11, 2007 (Volume 72, Number 237)]
[Notices]               
[Page 70353-70354]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11de07-79]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56893; File No. 4-429]

 
Joint Industry Plan; Notice of Summary Effectiveness on a 
Temporary Basis of Joint Amendment No. 25 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, and Notice 
of Filing of Such Amendment

December 4, 2007.

I. Introduction

    On November 13, 2007, November 28, 2007, November 29, 2007, 
November 9, 2007, November 9, 2007, and November 23, 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., 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. 25'') to the Plan 
for the Purpose of Creating and Operating an Intermarket Option Linkage 
(``Linkage Plan'').\3\ In Joint Amendment No. 25, 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 can trade 
through that market and (ii) the timeframe within which a Participant 
must respond to a Linkage Order after receipt of that Order. This order 
summarily puts into effect Joint Amendment No. 25 on a temporary basis 
not to exceed 120 days and solicits comment on Joint Amendment No. 25 
from interested persons.\5\
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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, Inc.), 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. 25 only, references to ``Linkage Orders'' 
herein pertain to P/A Orders and Principal Orders. For definitions 
of ``P/A Order'' and ``Principal Order,'' see note 6 infra.
    \5\ A proposed amendment may be put into effect summarily upon 
publication of notice of such amendment, on a temporary basis not to 
exceed 120 days, if the Commission finds that such action is 
necessary or appropriate in the public interest, for the protection 
of investors or the maintenance of fair and orderly markets, to 
remove impediments to, and perfect mechanisms of, a national market 
system or otherwise in furtherance of the purposes of the Act. See 
17 CFR 242.608(b)(4).
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II. Description of the Proposed Amendment

    First, the purpose of Joint Amendment No. 25 is 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 propose to decrease this time period from 5 seconds to 3 
seconds.
    Second, Joint Amendment No. 25 will also reduce the time frame in 
which a Participant must respond to a Linkage Order from 5 to 3 seconds 
after receipt of that Order. Because the Linkage is highly automated 
and a Participant should receive a response to a Linkage Order within 
seconds after it is sent, the Participants do not believe it is 
necessary to wait the current 5 seconds for such a response. In 
addition, especially in fast-moving markets like the options market, 
the Participants believe that amending the time period to 3 seconds for 
the rejection of a P/A Order or Principal Order \6\ due to an untimely 
response will provide an opportunity for the transmittal of responses 
while also allowing a Participant's members to execute orders on their 
own exchanges in a timely manner.
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    \6\ See Section 2(16)(a) and (b) of the Linkage Plan, 
respectively.
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III. Discussion

    After careful consideration, the Commission finds that the proposed 
amendment to the Linkage Plan is consistent with the requirements of 
the Act and the rules and regulations thereunder.\7\ Specifically, the 
Commission finds that the proposed amendment to the Linkage Plan is 
consistent with Section 11A of the Act \8\ and Rule 608 of Regulation 
NMS thereunder \9\ in that it is appropriate in the public interest, 
for the protection of investors and the maintenance of fair and orderly 
markets. Specifically, the Commission believes that reducing the time 
required by a Participant to

[[Page 70354]]

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 markets. In addition, the Commission finds that it 
is appropriate to summarily put into effect Joint Amendment No. 25 upon 
publication of this notice on a temporary basis for 120 days. The 
Commission believes that such action is appropriate in the public 
interest, for the protection of investors and the maintenance of fair 
and orderly markets, because it will facilitate implementation of the 
Joint Amendment No. 25 in conjunction with the recent expansion of the 
options penny quoting pilot program.
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    \7\ In summarily putting into effect this Joint Amendment No. 
25, the Commission has considered its impact on efficiency, 
competition, and capital formation.
    \8\ 15 U.S.C. 78k-1.
    \9\ 17 CFR 242.608.
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether proposed Joint 
Amendment No. 25 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 4-429 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number 4-429. 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, 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 filings also will be available for inspection and 
copying at the principal offices of the Amex, BSE, CBOE, ISE, NYSE 
Arca, and 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 
publicly available. All submissions should refer to File Number 4-429 
and should be submitted on or before January 2, 2008.

V. Conclusion

    It is therefore ordered, pursuant to Section 11A of the Act \10\ 
and Rule 608(b)(4) thereunder,\11\ that Joint Amendment No. 25 is 
summarily put into effect until April 9, 2008.
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    \10\ 15 U.S.C. 78k-1.
    \11\ 17 CFR 242.608(b)(4).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(29).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-23920 Filed 12-10-07; 8:45 am]

BILLING CODE 8011-01-P
