9054 Federal Register / Vol. 72, No. 39 / Wednesday, February 28, 2007 / Notices 

12See letter dated May 17, 2006 to Mr. Jonathan 

Katz, Secretary, Commission, from Mr. Matthew 

Hinerfeld, Deputy General Counsel, Citadel 

Investment Group, L.L.C. on behalf of Citadel 

Derivatives Group LLC. 

13 15 U.S.C. 78f(b). 

14 15 U.S.C. 78f(b)(5). 

15 15 U.S.C. 78s(b)(3)(A). 16 17 CFR 240.19b–4(f)(6). 

17 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A). 

4 17 CFR 240.19b–4(f)(6). 

Letter’’) regarding the CBOE proposal.12

In its approval notice, the Commission 

stated that ‘‘the Citadel Letter does not 

raise any issues that would preclude 

approval of the proposed rule change.’’

NYSE Arca feels that any similar issues 

contained in the Citadel Letter that may 

be raised in regard to proposed rule 

changes contained in this filing would 

not preclude approval. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act,13 in general, and 

furthers the objectives of Section 6(b)(5) 

of the Act,14 in particular, because it is 

designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, to foster cooperation and 

coordination with persons engaged in 

facilitating transactions in securities, 

and to remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change would impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange has neither solicited 

nor received written comments on the 

proposed rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the 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 for 30 days after the date of 

filing (or such shorter time as the 

Commission may designate if consistent 

with the protection of investors and the 

public interest), the proposed rule 

change has become effective pursuant to 

Section 19(b)(3)(A) of the Act 15 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.16

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 the 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 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–NYSEArca–2007–06 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 SR–NYSEArca–2007–06. 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. Copies of such filing also will be 

available for inspection and copying at 

the principal office of NYSE Arca. 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 SR–NYSEArca–2007–06 and 

should be submitted on or before March 

21, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.17

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–3494 Filed 2–27–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55333; File No. SR–Phlx–

2007–13] 

Self-Regulatory Organizations; 

Philadelphia Stock Exchange, Inc.; 

Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change Relating to 100 Share Away 

Markets in Non-Nasdaq Securities on 

XLE 

February 22, 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 February 

20, 2007, the Philadelphia Stock 

Exchange, Inc. (‘‘Phlx’’ or ‘‘Exchange’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II, below, which Items have 

been prepared by the Phlx. The 

Exchange has designated the proposed 

rule change as constituting a ‘‘noncontroversial’’ rule change under 

Section 19(b)(3)(A) of the Act 3 and Rule 

19b-4(f)(6) thereunder,4 which renders 

the proposal effective upon filing with 

the Commission. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Phlx proposes to modify XLE, 

Phlx’s equity trading system, so as to 

prevent XLE from trading through 100 

share away quotations in non-Nasdaq 

securities. In addition, XLE will be 

modified to route to 100 share away 

quotations in non-Nasdaq securities. 

Accordingly, Phlx Rule 1(cc)(3) will be 

modified to include 100 share away 

quotations in the definition of Protected 


sroberts on PROD1PC70 with NOTICES
Federal Register / Vol. 72, No. 39 / Wednesday, February 28, 2007 / Notices 9055 

5 17 CFR 242.611. 

6 15 U.S.C. 78f(b). 

7 15 U.S.C. 78f(b)(5). 

8 15 U.S.C. 78s(b)(3)(A). 

9 17 CFR 240.19b–4(f)(6). 

10Rule 19b–4(f)(6)(iii) under the Act requires that 

a self-regulatory organization submit to the 

Commission written notice of its intent to file the 

proposed rule change, along with a brief description 

and text of the proposed rule change, at least five 

business days prior to the date of filing of the 

proposed rule change, or such shorter time as 

designated by the Commission. Phlx has satisfied 

the pre-filing requirement. 

11For purposes only of waiving the 30-day 

operative delay of the proposal, the Commission 

has considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 

12See 15 U.S.C. 78s(b)(3)(C). 

Bids, Offers and Quotations for nonNasdaq securities before the Trading 

Phase Date. The text of the proposed 

rule change is available at the Phlx, the 

Commission’s Public Reference Room, 

and http://www.phlx.com. 

II. Self-Regulatory 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. Self-Regulatory 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 reflect the impending 

elimination of the Intermarket Trading 

System (‘‘ITS’’) Plan in favor of the 

Trading Phase Date of Regulation NMS 

on March 5, 2007 by protecting 

additional away quotations in XLE. This 

would be accomplished by modifying 

XLE to consider 100 share bids, offers 

and quotations in non-Nasdaq securities 

in other markets as Protected Bids, 

Offers and Quotations beginning on 

February 26, 2007. Therefore, XLE 

would route to 100 share away 

quotations in non-Nasdaq securities and 

would not trade through or quote 

through such quotations unless 

simultaneously routing to those 

quotations, pursuant to Phlx Rules. 

Currently, XLE trades and quotes 

through 100 share away quotations in 

non-Nasdaq securities. Additionally, 

XLE does not route to 100 share away 

quotations in non-Nasdaq securities. 

This is because in the ITS Plan, which 

applies to non-Nasdaq securities, and 

the Phlx Rules adopted pursuant to the 

ITS Plan, provide an exemption from 

trade-through and from locking and 

crossing protection for 100 share bids 

and offers of away markets. In contrast, 

commencing with the Trading Phase 

Date of Regulation NMS, which is 

currently March 5, 2007, the exemption 

for 100 share away quotation in the ITS 

Plan will not be available to Phlx (or 

any other exchange) under the new 

Order Protection Rule, Rule 611.5 XLE 

will be ready for the Trading Phase Date 

in that it will not, among other things, 

trade or quote through 100 share away 

markets. However, Phlx believes that it 

is appropriate to modify its trading 

system, XLE, on February 26, 2007, to 

take 100 share away markets in nonNasdaq securities into account for 

trading, quoting and routing because 

Phlx is currently rolling out XLE’s 

routing functionality in non-Nasdaq 

securities. 

Phlx has observed that other markets 

trading non-Nasdaq securities pursuant 

to the ITS Plan have modified or 

adapted their systems to provide for 

very rapid or immediate execution of 

their displayed quotations, including 

quotations of 100 shares. Phlx believes 

that the system modification in this 

proposed rule change could provide 

more opportunities for executions of 

orders that XLE routes away pursuant to 

Phlx Rules, since XLE would begin 

routing to 100 share away quotations, in 

addition to larger quotations. Finally, 

Phlx would modify Phlx Rule 1(cc)(3) to 

clarify the change to XLE by stating that 

a Protected Bid, Offer or Quotation in 

non-Nasdaq securities includes a 100 

share bid, offer or quotation. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 6 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 7

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, by 

increasing the category of Protected 

Bids, Offers and Quotations in nonNasdaq securities to include 100 share 

away bids, offers and quotations. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The proposed rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 8 and Rule 19b–4(f)(6) 

thereunder 9 because the proposal does 

not: (i) Significantly affect the 

protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate if 

consistent with the protection of 

investors and the public interest.10

The Exchange has requested that the 

Commission waive the 30-day operative 

delay and make the proposed rule 

change operative on February 26, 2007. 

The Commission hereby grants the 

request.11 The Commission believes that 

such waiver is consistent with the 

protection of investors and the public 

interest because the earlier operative 

date would enhance the protection of 

quotations in non-Nasdaq exchangelisted securities displayed in away 

markets in that, pursuant to the 

proposal, the Phlx would no longer 

trade or quote though 100 share away 

quotations in non-Nasdaq securities. 

Further, the earlier operative date will 

allow XLE Participants to gain 

additional experience with the 

expanded XLE trading environment and 

functionality prior to its full 

implementation on the Trading Phase 

Date. 

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.12

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 


sroberts on PROD1PC70 with NOTICES
9056 Federal Register / Vol. 72, No. 39 / Wednesday, February 28, 2007 / Notices 

13 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A). 

4 17 CFR 240.19b–4(f)(6). 

5See Exchange Rule 1085(b)(7). 

6See Exchange Rules 1066(f) and (g). 

7See Exchange Rules 1033(f), (g), and (h). 

8See File No. SR-Phlx-2006–91. 

9See Securities Exchange Act Release No. 55138 

(January 19, 2007), 72 FR 3451 (January 25, 2007) 

(order approving File Nos. SR–Amex–2006–119; 

SR–BSE–2006–55; SR–CBOE–2006–109; SR–ISE–

2006–73; and SR–NYSEArca–2007–01). 

10 15 U.S.C. 78f(b). 

11 15 U.S.C. 78f(b)(5). 

including whether the proposed rule 

change 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 rulecomments@sec.gov. Please include File 

Number SR–Phlx–2007–13 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 SR–Phlx–2007–13. 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. 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 SR–Phlx–2007–13 and should 

be submitted on or before March 21, 

2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–3491 Filed 2–27–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55331; File No. SR–Phlx–

2007–09] 

Self-Regulatory Organizations; 

Philadelphia Stock Exchange, Inc.; 

Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change Relating to the Definition of 

‘‘Complex Trade’’

February 22, 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 February 

7, 2007, the Philadelphia Stock 

Exchange, Inc. (‘‘Phlx’’ or ‘‘Exchange’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I, II and III below, which Items 

have been substantially prepared by the 

Phlx. The Exchange filed the proposal 

pursuant to Section 19(b)(3)(A) of the 

Act 3 and Rule 19b–4(f)(6) thereunder,4

which renders the proposal effective 

upon filing with the Commission. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Phlx proposes to amend 

Exchange Rule 1083(c) to revise the 

definition of ‘‘Complex Trade’’ as that 

definition applies to trades under the 

Plan for the Purpose of Creating and 

Operating an Options Intermarket 

Linkage (the ‘‘Linkage Plan’’). The text 

of the proposed rule change is available 

at the Exchange, in the Commission’s 

Public Reference Room, and at http:// 

www.phlx.com/exchange/ 

phlx_rule_fil.html. 

II. Self-Regulatory 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. Self-Regulatory 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 amend the definition of 

‘‘Complex Trade’’ in the Exchange’s 

rules that relate to the Linkage Plan. For 

Linkage purposes, Exchange Rule 

1083(c) currently defines a ‘‘Complex 

Trade’’ as a trade reflecting the 

execution of an order in an options 

series in conjunction with one or more 

other orders in different series in the 

same underlying security for the 

equivalent number of contracts. 

Under the proposal, a ‘‘Complex 

Trade’’ includes a spread, straddle, or 

combination order where the number of 

contracts on the legs of the spread, 

straddle, or combination order differs by 

any ratio equal to or greater than oneto-three and less than or equal to threeto-one. A Complex Trade is exempt 

from trade-through liability.5

The Exchange notes that its current 

rules provide that the components of 

spread, straddle, and combination 

orders must generally offset one another 

on a one-for-one basis,6 and that priority 

concerning ratio and other types of 

spreads currently applies only to foreign 

currency options.7 In order to make 

those rules and the instant proposal 

consistent, the Exchange has filed a 

separate proposed rule change to permit 

such order types on other than a onefor-one basis, and to establish priority 

for such orders in all options traded on 

the Exchange.8

This proposal would adopt the same 

definition of ‘‘Complex Trade’’ for 

Linkage Plan purposes as that adopted 

by other options exchanges.9

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,10 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,11

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 


sroberts on PROD1PC70 with NOTICES