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SECURITIES AND EXCHANGE COMMISSION
Securities and Exchange Commission
DOCUMENT ID: [Release No. 34-56893; File No. 4-429]
NOTICE: NOTICES
ACTION: Joint industry plan:
SUBJECT CATEGORY: 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
DOCUMENT SUMMARY: 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\
\1\ 15 U.S.C. 78k1.
\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).
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 fastmoving 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.
\6\ See Section 2(16)(a) and (b) of the Linkage Plan,
respectively.
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.
\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. 78k1.
\9\ 17 CFR 242.608.
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
Paper Comments
All submissions should refer to File Number 4429. 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 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 4429 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.
\10\ 15 U.S.C. 78k1.
\11\ 17 CFR 242.608(b)(4).
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\12\
\12\ 17 CFR 200.303(a)(29).
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E723920 Filed 121007; 8:45 am]
BILLING CODE 801101P
SUMMARY: American Stock Exchange LLC et al.,
DOCUMENT BODY 2: 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\
\1\ 15 U.S.C. 78k1.
\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).
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 fastmoving 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.
\6\ See Section 2(16)(a) and (b) of the Linkage Plan,
respectively.
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.
\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. 78k1.
\9\ 17 CFR 242.608.
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
Paper Comments
All submissions should refer to File Number 4429. 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 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 4429 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.
\10\ 15 U.S.C. 78k1.
\11\ 17 CFR 242.608(b)(4).
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\12\
\12\ 17 CFR 200.303(a)(29).
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E723920 Filed 121007; 8:45 am]
BILLING CODE 801101P
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