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SECURITIES AND EXCHANGE COMMISSION
Securities and Exchange Commission
DOCUMENT ID: [Release No. 34-56836; File No. SR-Phlx-2007-55]
NOTICE: NOTICES
ACTION: Self-regulatory organizations; proposed rule changes:
SUBJECT CATEGORY: Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Elimination of the Short Sale Price Test
DOCUMENT SUMMARY: November 21, 2007.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''), \1\ and Rule 19b4 \2\ thereunder, notice is hereby given
that on July 31, 2007, the Philadelphia Stock Exchange, Inc. (``Phlx''
or ``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I and II below, which Items have been substantially prepared by
the Phlx. Phlx has designated the proposed rule change as constituting
a ``noncontroversial'' rule change under paragraph (f)(6) of Rule 19b
4 under the Act.\3\ The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons. \1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b4.
\3\ 17 CFR 240.19b4(f)(6).
I. SelfRegulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
The Phlx, pursuant to Section 19(b)(1) of the Act \4\ and Rule 19b
4 thereunder,\5\ proposes to amend Phlx Rules 185, 455, 785 and 1072 to
reflect the elimination of the short sale price test, including any
tick or bid test of any selfregulatory organization (``Price Test'')
and the elimination of the ``short exempt'' marking requirement.\6\ \4\ 15 U.S.C. 78s(b)(1).
\5\ 17 CFR 240.19b4.
\6\ See Securities Exchange Act Release No. 55970 (June 28, 2007).
The text of the proposed rule change is available at the Exchange,
on the Exchange's Web site at http://www.Phlx.com, and at the Commission's Public Reference Room.
II. SelfRegulatory 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. SelfRegulatory 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 conform Phlx Rules to
Rules 200(g) and 201(b) of Regulation SHO.\7\ On June 28, 2007, the SEC
approved final rules deleting the price test of Rule 10a1 \8\ and
amending Regulation SHO to prohibit any SRO from having a price test in
place. In addition, Rule 200(g) of Regulation SHO was modified to
remove the requirement upon brokerdealers to mark sell orders as ``short exempt.''
\7\ 17 CFR 242.200(g) and 17 CFR 242.201(b).
\8\ 17 CFR 240.10a1.
Phlx Rules 185, 455, 785 and 1072 contain language regarding the Price Test and the ``short exempt'' marking requirement. Phlx Rule 185 contains language regarding the entry, display and execution of sell short orders on XLE, Phlx's electronic equity trading system, that are subject to the Price Test. With the elimination of the Price Test, sell short orders will not be handled any differently by XLE and the amendments to this rule will so reflect. Phlx Rule 455 stated that XLE will not execute a sell order unless effected in compliance with Rule 10a1. Rule 10a1 contained the Price Test and is being eliminated. The amendments to Phlx Rule 455 will reflect this.
Phlx Rule 785 requires member organizations to make an automated submission of trading data, including marking orders as short exempt, where appropriate. Phlx Rule 785 will be amended to reflect the elimination of the ``short exempt'' marking requirement. Phlx Rule 1072 outlines the requirements on options specialists and Registered Options Traders (``ROTs'') regarding their use of an exception to the NASD (n/ k/a Financial Industry Regulatory Authority, Inc.) bid test (which was a type of Price Test) available to hedging options transactions. The elimination of the Price Test extended to the NASD bid test and therefore options specialist and ROTs will not need the exemption outlined in Phlx Rule 1072. Phlx Rule 1072 will be deleted. 2. Statutory Basis
The Exchange believes that its proposal is consistent with Section 6(b)
[[Page 67619]]
of the Act \9\ in general, and furthers the objectives of Section
6(b)(5) of the Act \10\ 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.
\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
B. SelfRegulatory 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. SelfRegulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action
Because the foregoing proposed rule change does not:
(i) Significantly affect the protection of investors or the public interest;
(ii) Impose any significant burden on competition; and
(iii) Become operative within 30 days from the date on which it was
filed, or such shorter time as the Commission may designate, it has
become effective upon filing pursuant to Section 19(b)(3)(A) of the Act
\11\ and Rule 19b4(f)(6) thereunder.\12\ Phlx has requested that the
Commission waive the 5day prefiling notice requirement and the 30day
operative delay of the proposal. The Commission believes that such
waivers are consistent with the protection of investors and the public
interest because the proposed rule change conforms Phlx's rules to
currently effective Commission Rules and should eliminate potential
confusion relating to orders on XLE.\13\ For this reason, the
Commission designates the proposal to be operative upon filing with the Commission.
\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b4(f)(6).
\13\ For purposes only of waiving the 30day preoperative
period, the Commission has considered the impact of the proposed
rule change on efficiency, competition and capital formation. 15 U.S.C. 78c(f).
At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act.
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
Paper Comments
All submissions should refer to File Number SRPhlx200755. This file number should be included on the subject line if email 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 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 SRPhlx200755 and should be submitted on or before December 20, 2007.
\14\ 17 CFR 200.303(a)(12).
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\14\
Nancy M. Morris,
Secretary.
[FR Doc. E723171 Filed 112807; 8:45 am]
BILLING CODE 801101P
SUMMARY: Philadelphia Stock Exchange, Inc.,
DOCUMENT BODY 2: November 21, 2007.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''), \1\ and Rule 19b4 \2\ thereunder, notice is hereby given
that on July 31, 2007, the Philadelphia Stock Exchange, Inc. (``Phlx''
or ``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I and II below, which Items have been substantially prepared by
the Phlx. Phlx has designated the proposed rule change as constituting
a ``noncontroversial'' rule change under paragraph (f)(6) of Rule 19b
4 under the Act.\3\ The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons. \1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b4.
\3\ 17 CFR 240.19b4(f)(6).
I. SelfRegulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
The Phlx, pursuant to Section 19(b)(1) of the Act \4\ and Rule 19b
4 thereunder,\5\ proposes to amend Phlx Rules 185, 455, 785 and 1072 to
reflect the elimination of the short sale price test, including any
tick or bid test of any selfregulatory organization (``Price Test'')
and the elimination of the ``short exempt'' marking requirement.\6\ \4\ 15 U.S.C. 78s(b)(1).
\5\ 17 CFR 240.19b4.
\6\ See Securities Exchange Act Release No. 55970 (June 28, 2007).
The text of the proposed rule change is available at the Exchange,
on the Exchange's Web site at http://www.Phlx.com, and at the Commission's Public Reference Room.
II. SelfRegulatory 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. SelfRegulatory 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 conform Phlx Rules to
Rules 200(g) and 201(b) of Regulation SHO.\7\ On June 28, 2007, the SEC
approved final rules deleting the price test of Rule 10a1 \8\ and
amending Regulation SHO to prohibit any SRO from having a price test in
place. In addition, Rule 200(g) of Regulation SHO was modified to
remove the requirement upon brokerdealers to mark sell orders as ``short exempt.''
\7\ 17 CFR 242.200(g) and 17 CFR 242.201(b).
\8\ 17 CFR 240.10a1.
Phlx Rules 185, 455, 785 and 1072 contain language regarding the Price Test and the ``short exempt'' marking requirement. Phlx Rule 185 contains language regarding the entry, display and execution of sell short orders on XLE, Phlx's electronic equity trading system, that are subject to the Price Test. With the elimination of the Price Test, sell short orders will not be handled any differently by XLE and the amendments to this rule will so reflect. Phlx Rule 455 stated that XLE will not execute a sell order unless effected in compliance with Rule 10a1. Rule 10a1 contained the Price Test and is being eliminated. The amendments to Phlx Rule 455 will reflect this.
Phlx Rule 785 requires member organizations to make an automated submission of trading data, including marking orders as short exempt, where appropriate. Phlx Rule 785 will be amended to reflect the elimination of the ``short exempt'' marking requirement. Phlx Rule 1072 outlines the requirements on options specialists and Registered Options Traders (``ROTs'') regarding their use of an exception to the NASD (n/ k/a Financial Industry Regulatory Authority, Inc.) bid test (which was a type of Price Test) available to hedging options transactions. The elimination of the Price Test extended to the NASD bid test and therefore options specialist and ROTs will not need the exemption outlined in Phlx Rule 1072. Phlx Rule 1072 will be deleted. 2. Statutory Basis
The Exchange believes that its proposal is consistent with Section 6(b)
[[Page 67619]]
of the Act \9\ in general, and furthers the objectives of Section
6(b)(5) of the Act \10\ 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.
\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
B. SelfRegulatory 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. SelfRegulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action
Because the foregoing proposed rule change does not:
(i) Significantly affect the protection of investors or the public interest;
(ii) Impose any significant burden on competition; and
(iii) Become operative within 30 days from the date on which it was
filed, or such shorter time as the Commission may designate, it has
become effective upon filing pursuant to Section 19(b)(3)(A) of the Act
\11\ and Rule 19b4(f)(6) thereunder.\12\ Phlx has requested that the
Commission waive the 5day prefiling notice requirement and the 30day
operative delay of the proposal. The Commission believes that such
waivers are consistent with the protection of investors and the public
interest because the proposed rule change conforms Phlx's rules to
currently effective Commission Rules and should eliminate potential
confusion relating to orders on XLE.\13\ For this reason, the
Commission designates the proposal to be operative upon filing with the Commission.
\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b4(f)(6).
\13\ For purposes only of waiving the 30day preoperative
period, the Commission has considered the impact of the proposed
rule change on efficiency, competition and capital formation. 15 U.S.C. 78c(f).
At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act.
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
Paper Comments
All submissions should refer to File Number SRPhlx200755. This file number should be included on the subject line if email 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 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 SRPhlx200755 and should be submitted on or before December 20, 2007.
\14\ 17 CFR 200.303(a)(12).
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\14\
Nancy M. Morris,
Secretary.
[FR Doc. E723171 Filed 112807; 8:45 am]
BILLING CODE 801101P
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