

[Federal Register: February 5, 2008 (Volume 73, Number 24)]
[Notices]               
[Page 6748-6749]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05fe08-91]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57238; File No. 4-429]

 
Joint Industry Plan; Order Approving 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

January 30, 2008.

I. Introduction

    On November 9, 2007, November 13, 2007, November 23, 2007, November 
28, 2007, and November 29, 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

[[Page 6749]]

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 another market before the 
member \5\ can trade through that market and (ii) the time frame within 
which a Participant must respond to a Linkage Order after receipt of 
that Linkage Order. On December 4, 2007, the Commission summarily put 
into effect Joint Amendment No. 25 on a temporary basis not to exceed 
120 days and solicited comment on Joint Amendment No. 25 from 
interested persons.\6\ The Commission received no comments on Joint 
Amendment No. 25. This order approves Joint Amendment No. 25.
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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. 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 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. 56893, 72 FR 70353 
(December 11, 2007).
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II. Description of the Proposed Amendment

    In Joint Amendment No. 25, the Participants proposed to reduce the 
amount of time a member must wait after sending a Linkage Order to 
another market before the member can trade through that market. The 
Participants proposed to decrease this time period from 5 seconds to 3 
seconds. The Participants also proposed to reduce the time frame in 
which a Participant must respond to a Linkage Order from 5 seconds to 3 
seconds after receipt of that Linkage 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. 25.\8\ After careful consideration of Joint 
Amendment No. 25, the Commission finds that approving Joint Amendment 
No. 25 is consistent with the requirements of the Act and the rules and 
regulations thereunder. Specifically, the Commission finds that Joint 
Amendment No. 25 is consistent with Section 11A of the Act \9\ and Rule 
608 of Regulation NMS thereunder \10\ in that it is 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. 25 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 Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(29).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-2058 Filed 2-4-08; 8:45 am]

BILLING CODE 8011-01-P
