

[Federal Register: December 11, 2007 (Volume 72, Number 237)]
[Notices]               
[Page 70354-70356]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11de07-80]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56898; File Nos. SR-Amex-2007-124; SR-BSE-2007-50; SR-
CBOE-2007-144; SR-ISE-2007-108; SR-NYSEArca-2007-116; SR-Phlx-2007-88]

 
Self-Regulatory Organizations; American Stock Exchange LLC: 
Notice of Filing and Order Granting Accelerated Approval to Proposed 
Rule Change, as Amended, Relating to Linkage Order; Boston Stock 
Exchange, Inc., Chicago Board Options Exchange, Incorporated; 
International Securities Exchange, LLC, NYSE Arca, Inc., and 
Philadelphia Stock Exchange, Inc.: Notice of Filing and Order Granting 
Accelerated Approval to a Proposed Rule Change Relating to Linkage 
Orders

December 5, 2007.
    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 November 28, 2007, November 28, 2007, November 27, 2007, November 
13, 2007, December 4, 2007, and November 27, 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'') 
(each, an ``Exchange'' and, collectively, the ``Exchanges''), 
respectively, filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule changes as described in Items I and 
II below. On December 4, 2007, Amex filed Amendment No. 1 to its 
proposed rule change. The Commission is publishing this notice to 
solicit comments on the proposed rule changes from interested persons 
and is approving the proposed rule changes on an accelerated basis.
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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 Organizations' Statement of the Terms of Substance 
of the Proposed Rule Changes

    The Exchanges propose to amend their respective rules pertaining to 
the Intermarket Options Linkage (``Linkage'') to conform such rules to 
Joint Amendment No. 25 \3\ of the Plan for the Purpose of Creating and 
Operating an Intermarket Option Linkage (``Linkage Plan'').\4\ The text 
of the proposed rule changes are available at the Exchanges' Web 
sites,\5\ the Exchanges' principal offices, and at the Commission's 
Public Reference Room.
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    \3\ See Securities Exchange Act Release No. 56893 (December 4, 
2007).
    \4\ 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).
    \5\ See http://www.amex.com, http://www.bostonstock.com, http://www.cboe.com, http://www.iseoptions.com, http://www.nyse.com, and 

http://www.phlx.com.

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II. Self-Regulatory Organizations' Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Changes

    In its filing with the Commission, each Exchange included 
statements concerning the purpose of, and basis for, its proposed rule 
change and discussed any comments it received on the proposed rule 
change. The text of the statements may be examined at the places 
specified in Item III below. The Exchanges have prepared summaries, set 
forth in Sections A, B, and C, below, of the most significant aspects 
of such statements.

[[Page 70355]]

A. Self-Regulatory Organizations' Statement for the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchanges propose to reduce certain ``turn-around'' times in 
the Linkage to 3 seconds. Specifically, if a member \6\ of an Exchange 
does not receive a response to its Linkage Order \7\ seconds, that 
member would be able to reject any response purporting to be an 
execution received thereafter. The member would also be able to trade 
through the Exchange that failed to respond within 3 seconds after 
receiving that order and, if the Exchange that sent the Linkage Order 
cancels such response, the member would be required to cancel any 
purported trade resulting from that order. The Exchanges state that, as 
they have become more automated, experience with Linkage indicates that 
reducing the turn-around time to 3 seconds is expected to facilitate 
speedy executions of orders while not adversely affecting the ability 
of members to make markets on their Exchanges. The Exchanges submitted 
the proposed rule changes in conjunction with Joint Amendment No. 25 to 
the Linkage Plan.\8\
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    \6\ 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 1, 
Sec. 1(a)(40) of BOX Rules, respectively.
    \7\ See Section 2(16) of the Linkage Plan. For the purposes of 
these proposed rule changes only, references to ``Linkage Orders'' 
herein pertain to Principal Acting as Agent (``P/A'') Order and 
Principal Orders. See Section 2(16)(a) and (b) of the Linkage Plan, 
respectively, for definitions of ``P/A Order'' and ``Principal 
Order.''
    \8\ Joint Amendment No. 25 to the Linkage Plan became summarily 
effective for a period not to exceed 120 days on December 4, 2007. 
See supra note 3.
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2. Statutory Basis
    The Exchanges believe the proposed rule changes are consistent with 
the Act and the rules and regulations under the Act applicable to 
national securities exchanges and, in particular, the requirements of 
Section 6(b) of the Act.\9\ Specifically, the Exchanges believe the 
proposed rule changes are consistent with the requirements of Section 
6(b)(5) of the Act \10\ that the rules of an exchange be designed to 
prevent fraudulent and manipulative acts, 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.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organizations' Statement on Burden on Competition

    The Exchanges believe that the proposed rule changes would impose 
no burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.

C. Self-Regulatory Organizations' Statement on Comments on the Proposed 
Rule Changes Received From Members, Participants or Others

    The Exchanges have neither solicited nor received comments on these 
proposals.

III. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
changes are 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 Numbers SR-Amex-2007-124; SR-BSE-2007-50; SR-CBOE-2007-144; SR-
ISE-2007-108; SR-NYSEArca-2007-116; SR-Phlx-2007-88 in 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 Numbers SR-Amex-2007-124; SR-BSE-
2007-50; SR-CBOE-2007-144; SR-ISE-2007-108; SR-NYSEArca-2007-116; SR-
Phlx-2007-88. These file numbers 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 Section, 100 F Street, NE., Washington, DC 20549-1090 on 
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 Exchanges. 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 Numbers SR-Amex-2007-124; SR-BSE-2007-50; SR-CBOE-2007-144; SR-
ISE-2007-108; SR-NYSEArca-2007-116; SR-Phlx-2007-88 and should be 
submitted on or before January 2, 2008.

IV. Commission's Findings and Order Granting Accelerated Approval of 
Proposed Rule Changes

    After careful consideration, the Commission finds that the proposed 
rule changes are consistent with the requirements of the Act and the 
rules and regulations thereunder, applicable to national securities 
exchanges.\11\ In particular, the Commission finds that the proposals 
are consistent with the provisions of Section 6(b)(5) of the Act \12\ 
in that they are 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. The Commission believes that 
reducing the time required by an Exchange to respond to a Linkage Order 
and reducing the amount of time a member sending a Linkage Order must 
wait before trading through a nonresponsive Exchange should facilitate 
the more timely execution of orders across the Exchanges.
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    \11\ In approving these proposed rule changes, the Commission 
has considered their impact on efficiency, competition, and capital 
formation. See U.S.C. 78c(f).
    \12\ 15 U.S.C. 78f(b)(5).
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    The Commission also finds good cause, pursuant to Section 19(b)(2) 
of the Act \13\ for approving the proposal prior to the thirtieth day 
after the date of publication of the notice of the filing thereof in 
the Federal Register. Granting accelerated approval would facilitate 
the implementation of these changes in conjunction with the 
implementation of Joint Amendment No. 25 to the Linkage Plan.\14\
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    \13\ 15 U.S.C. 78s(b)(2).
    \14\ See supra note 8.

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[[Page 70356]]

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (SR-Amex-2007-124), as amended, and 
proposed rule changes (SR-BSE-2007-50; SR-CBOE-2007-144; SR-ISE-2007-
108; SR-NYSEArca-2007-116; SR-Phlx-2007-88) are hereby approved on an 
accelerated basis.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-23923 Filed 12-10-07; 8:45 am]

BILLING CODE 8011-01-P
