Federal Register / Vol. 72, No. 44 / Wednesday, March 7, 2007 / Notices 10287 

12 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)(2). 5SQF stands for specialized quote feed and is a 

proprietary quoting system that allows specialists, 

streaming quote traders and remote streaming quote 

traders to connect and send quotes into Phlx XL, 

by-passing the Exchange’s Auto-Quote System. See 

Exchange Rule 1080, commentary .01(b). 6Active ports refer to ports that receive inbound 

quotes at any time within that month. 

7See e.g., Securities Exchange Act Release No. 

54424 (September 11, 2006), 71 FR 54699 

(September 18, 2006) (SR–Phlx–2006–55). 

8SQTs and RSQTs are assessed fees pursuant to 

the ROT rates as SQTs and RSQTs are deemed to 

be ROTs. See Exchange Rule 1014(b)(ii)(A) and (B). 

9 15 U.S.C. 78f(b). 

10 15 U.S.C. 78f(b)(4). 

11 In an email dated January 17, 2007, a member 

requested that the date of implementation for the 

port fee be delayed. In August 2006, the Exchange 

distributed a memorandum, which notified 

members/member organizations of the Exchange’s 

intention to adopt an SQF port fee in order to 

provide such members/member organizations with 

the opportunity to change their port arrangements 

before the SQF port fee took effect. Originally, the 

Exchange anticipated that the port fee would 

become effective on November 1, 2006. The 

Exchange, however, delayed the implementation 

date until February 1, 2007 to allow members/ 

member organizations additional time to change 

their port arrangements. The Exchange believes that 

sufficient notice was given to members/member 

organizations regarding the proposed port fee, 

which includes the August 2006 memorandum and 

a delay in the implementation date from November 

1, 2006 until February 1, 2007. Therefore, the 

Exchange believes that a further delay in the 

implementation date as requested was not 

warranted. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.12

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–3883 Filed 3–5–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Release No. 34–55371; File No. SR–

Phlx–2007–06] 

Self-Regulatory Organizations; 

Philadelphia Stock Exchange, Inc.; 

Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change Relating to Port Fees as 

Modified by Amendment No. 1 

February 28, 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 January 

26, 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. On February 28, 2007, the 

Exchange submitted Amendment No. 1 

to the proposed rule change. The 

Exchange has designated this proposal 

as one establishing or changing a due, 

fee or other charge imposed by the 

Exchange under Section 19(b)(3)(A),3

and Rule 19b–4(f)(2) 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, as amended, from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Phlx proposes to implement a fee 

for connecting into the Exchange’s 

system to enter quotes (‘‘SQF 5 port 

fee’’). The SQF port fee would operate 

as follows: for the first 5 active SQF 

ports,6 a member organization would be 

charged $250 per port per month and, 

for each additional active SQF port 

(over the first 5 active SQF ports), the 

member organization would be charged 

$1,000 per port per month. 

Additionally, the same member 

organization would be credited $0.02 

per side for every option contract 

executed on the Phlx in that same 

month (excluding executions resulting 

from dividend, merger and short stock 

interest strategies) 7 up to the amount of 

the SQF port fees when the member 

organization or one of its employees is 

designated as a specialist, streaming 

quote trader (‘‘SQT’’) or remote 

streaming quote trader (‘‘RSQT’’) and 

the transaction is billed according to the 

specialist or Registered Option Trader 

(‘‘ROT’’) transaction and/or comparison 

rates.8 The SQF port fee and 

corresponding credit would be applied 

per member organization. 

The SQF port fee (assessed monthly) 

became effective February 1, 2007 and 

the corresponding $0.02 credit (assessed 

per side per executed contract) became 

effective for trades settling on or after 

February 1, 2007. 

The text of the proposed rule change 

is available at http://www.Phlx.com, at 

the Phlx, and at the Commission’s 

Public Reference Room. 

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 SQF port fee and 

corresponding credit is to encourage 

more efficient quoting, which should, in 

turn, promote a more efficient use of 

SQF ports. The Exchange believes that 

using fewer ports should assist in 

addressing the current and growing 

quoting and efficiency issues. The 

number of ports correlates to quoting 

efficiency, in that more efficient quoting 

uses fewer ports and fewer ports means 

the Exchange’s systems are being used 

to process the same number of quotes 

more quickly. The credit should also 

encourage member organizations to 

send more business to the Exchange. 

More efficient quoting should, in turn, 

result in more executions on the Phlx, 

for which the member organization will 

receive a credit up to the amount of any 

SQF port fees that are incurred. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its schedule of fees 

is consistent with Section 6(b) of the 

Act 9 in general, and furthers the 

objectives of Section 6(b)(4) of the Act 10

in particular, in that it is an equitable 

allocation of reasonable fees and other 

charges among Exchange members. 

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 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 

A written comment was received 

requesting that the Exchange grant an 

extension regarding the implementation 

date for the port fee.11

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 


sroberts on PROD1PC70 with NOTICES
10288 Federal Register / Vol. 72, No. 44 / Wednesday, March 7, 2007 / Notices 

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

13 17 CFR 240.19b–4(f)(2). 

14For purposes of calculating the 60-day period 

within which the Commission may summarily 

abrogate the proposed rule change, the Commission 

considers the period to commence on February 28, 

2007, the date on which the Exchange filed 

Amendment No. 1. 

15 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 55121 

(January 18, 2007), 72 FR 3186. 

4Amendment No. 3 made minor clarifying 

changes to Commentary .04 to Phlx Rule 1080. 

5See Securities Exchange Act Release No. 50100 

(July 27, 2004), 69 FR 46612 (August 3, 2004) (SR–

Phlx–2003–59). 

6An immediate-or-cancel order is an order that is 

to be executed in whole or in part as soon as such 

order is submitted. Any portion not so executed is 

to be treated as cancelled. 

7 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

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

8 15 U.S.C. 78f(b)(5). 

19(b)(3)(A)(ii) of the Act 12 and 

subparagraph (f)(2) of Rule 19b–4 

thereunder,13 since it establishes or 

changes a due, fee or other charge 

imposed by the Exchange. 

At any time within 60 days of the 

filing of such 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.14

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–Phlx–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–Phlx–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 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–2007–06 and should 

be submitted on or before March 27, 

2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.15

J. Lynn Taylor, 

Assistant Secretary. 

[FR Doc. E7–3916 Filed 3–6–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55375; File No. SR–Phlx–

2006–31] 

Self-Regulatory Organizations; 

Philadelphia Stock Exchange, Inc.; 

Order Approving Proposed Rule 

Change as Modified by Amendment 

Nos. 1, 2, and 3 Thereto Relating to 

Electronically Submitted Limit Orders 

February 28, 2007. 

I. Introduction 

On May 5, 2006, the Philadelphia 

Stock Exchange, Inc. (‘‘Phlx’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’),1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

offer an additional mechanism for 

participants on the Exchange’s 

electronic trading platform for options, 

Phlx XL, to trade against orders and 

electronic quotations. On December 8, 

2006, the Exchange filed Amendment 

No. 1 to the proposed rule change. The 

Exchange filed Amendment No. 2 to the 

proposed rule change on January 11, 

2007. The proposed rule change, as 

modified by Amendment Nos. 1 and 2, 

was published for comment in the 

Federal Register on January 24, 2007.3

The Exchange filed Amendment No. 3 

on February 28, 2007.4 The Commission 

received no comment letters on the 

proposed rule change. This order 

approves the proposed rule change as 

modified by Amendment Nos. 1, 2, and 

3. 

II. Description of the Proposal 

The purpose of the proposed rule 

change is to offer an additional 

mechanism for participants on the 

Exchange’s electronic trading platform 

for options, Phlx XL,5 to trade against 

orders and electronic quotations. 

Specifically, the proposal permits SQTs 

and RSQTs to enter Immediate or 

Cancel (‘‘IOC’’) 6 orders electronically 

and expands the types of orders that 

non-SQT ROTs and specialists may 

enter for their proprietary accounts to 

include electronically entered IOC 

orders. The proposal also changes the 

minimum order size for a ROT Limit 

Order from ten contracts to one contract 

if such contract is designated IOC. 

The Exchange further proposes to 

amend Commentary .02 and .03 of Phlx 

Rule 1082 to reduce the one-second 

‘‘counting period’’ to 1⁄4 of one second 

during which SQTs, RSQTs and/or 

specialists may eliminate the locked or 

crossed markets caused by their 

electronic quotations. Any unresolved 

locked or crossed markets remaining 

after the counting period are 

automatically executed. 

III. Discussion 

After careful review of the proposal, 

the Commission finds that the proposed 

rule change, as modified by Amendment 

Nos. 1, 2, and 3, is consistent with the 

requirements of the Act and the rules 

and regulations thereunder applicable to 

a national securities exchange.7 In 

particular, the Commission finds that 

the proposal is consistent with Section 

6(b)(5) of the Act,8 which requires, 

among other things, that the rules of an 

exchange be 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 the 

Phlx’s proposal to expand the order 

types that SQTs, RSQTs, non-SQT ROTs 


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