Federal Register / Vol. 72, No. 46 / Friday, March 9, 2007 / Notices 10793 

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 Securities Exchange Act Release No. 54709 

(Nov. 3, 2006), 71 FR 65847 (Nov. 9, 2006) (SR–

Amex–2006–72) (Order Approving a Proposed Rule 

Change and Amendment No 1 Thereto, and Notice 

of Filing and Order Granting Accelerated Approval 

to Amendment No. 3, To Adopt New Rules To 

Implement on a Pilot Basis an Initial Version of 

AEMI, Its Proposed New Hybrid Market Trading 

Platform For Equity Products and Exchange Traded 

Funds). 

6 17 CFR 242.611. The Order Protection Rule 

requires trading centers to establish, maintain and 

enforce written policies and procedures reasonably 

designed to prevent the execution of trades at prices 

inferior to protected quotations displayed by other 

trading centers, subject to certain exceptions. 

7The Trading Phase Date is currently established 

as March 5, 2007. 

8See Securities Exchange Act Release No. 54552 

(Sept. 29, 2006), 71 FR 59546 (Oct. 10, 2006) (SR–

Amex–2005–104) (Order Approving a Proposed 

Rule Change and Amendments No. 1, 2, 3, 4, and 

5 Thereto, and Notice of Filing and Order Granting 

Accelerated Approval to Amendment No. 6, To 

Establish a New Hybrid Trading System Known as 

AEMI). 

9See Securities Exchange Act Release No. 54739 

(Nov. 9, 2006), 71 FR 66993 (Nov. 17, 2006) (SR–

Amex–2006–78) (Order Granting Accelerated 

Approval to Proposed Rule Change and 

Amendment No. 1 Thereto and Notice of Filing and 

Order Granting Accelerated Approval to 

Amendment No. 2 Thereto Relating to Generic 

Listing Standards for Series of Portfolio Depositary 

Receipts and Index Fund Shares Based on 

International or Global Indexes); see also Securities 

Exchange Act Release No. 55018 (Dec. 28, 2006), 72 

FR 1040 (Jan. 9, 2007) (SR–Amex–2006–109) 

(Notice of Filing and Order Granting Accelerated 

Approval of a Proposed Rule Change and 

Amendment No. 1 Thereto Relating to Listing 

Standards for Series of Portfolio Depositary 

Receipts and Index Fund Shares). 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55378; File No. SR–Amex–

2007–17] 

Self-Regulatory Organizations; 

American Stock Exchange LLC; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change and 

Amendment No. 1 Thereto Revising the 

AEMI and AEMI–One Rules Relating to 

Portfolio Depositary Receipts and 

Index Fund Shares 

March 1, 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 

5, 2007, the American Stock Exchange 

LLC (‘‘Amex’’ 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 substantially prepared by the 

Amex. The Exchange filed the proposal 

as a ‘‘non-controversial’’ rule change 

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. On 

February 22, 2007, the Exchange filed 

Amendment No. 1 to the proposed rule 

change. 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 Exchange proposes to revise two 

of its AEMI rules and two of its AEMI–

One rules, relating in each case to 

portfolio depositary receipts (‘‘PDRs’’) 

and index fund shares (‘‘IFSs’’) that 

trade on the Amex, in order to conform 

these rules to changes previously 

approved by the Commission to the 

corresponding legacy rules for these 

securities. Among other things, these 

proposed changes include generic 

listing standards for series of PDRs and 

IFSs that are based on international or 

global indexes or on indexes previously 

approved by the Commission for the 

trading of PDRs, IFSs, options or other 

specified index-based securities. The 

proposed conforming rule changes 

would not make any changes to the 

manner in which PDRs and IFSs trade 

on the AEMI platform, but are 

concerned primarily with eligibility 

criteria for index components, index 

methodology and calculation, and 

intraday dissemination of information 

on estimated share value. The text of the 

proposed rule change is available at 

Amex, the Commission’s Public 

Reference Room, and www.amex.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 

Exchange 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 

Exchange 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 Exchange has recently adopted 

two sets of rules in connection with the 

operation of its new hybrid market 

trading platform for equity products and 

exchange traded funds, designated as 

AEMI SM (the ‘‘Auction and Electronic 

Market Integration’’ platform). The 

initial version of AEMI is referred to as 

‘‘AEMI–One’’ and is currently 

operational on a pilot basis 5 through the 

day prior to the final date set by the 

Commission for full operation of all 

automated trading centers that intend to 

qualify their quotations for tradethrough protection under Rule 611 of 

Regulation NMS 6 (the latter date being 

referred to as the ‘‘Trading Phase 

Date’’).7 On the Trading Phase Date, the 

regular AEMI rules will become 

effective 8 and the AEMI–One rules will 

cease to be operative. As each security 

is migrated from the legacy platform to 

the AEMI platform during the AEMI–

One pilot, any legacy rule for which 

there is a corresponding AEMI–One rule 

will cease to be applicable and the 

AEMI–One rule will then become the 

applicable rule for that security (e.g., 

Rule 1000 will cease to apply and Rule 

1000–AEMI–One will become 

applicable). Other legacy rules with 

respect to PDRs and IFSs without 

corresponding AEMI–One or AEMI 

counterpart rules (e.g., Rule 1001 or 

Rule 1001A) will continue to be 

applicable to AEMI and the AEMI–One 

pilot. 

The Exchange proposes to revise 

Rules 1000–AEMI–One and 1000–AEMI 

(relating to PDRs) and Rules 1000A–

AEMI–One 1000A–AEMI (relating to 

IFSs) in order to conform these rules to 

changes previously approved by the 

Commission to the corresponding legacy 

rules for these securities. In particular, 

the Exchange is proposing to make the 

same changes to these AEMI–One and 

AEMI rules that were approved by the 

Commission for legacy Rules 1000 and 

1000A in Securities Exchange Act 

Release Nos. 54739 and 55018.9 Among 

other things, these proposed changes 

include generic listing standards for 

series of PDRs and IFSs that are based 

on international or global indexes or on 

indexes previously approved by the 

Commission for the trading of PDRs, 

IFSs, options or other specified indexbased securities. The proposed 

conforming rule changes would not 

make any changes to the manner in 

which PDRs and IFSs trade on the AEMI 

platform, but are concerned primarily 

with eligibility criteria for index 

components, index methodology and 

calculation, and intraday dissemination 

of information on estimated share value. 

The Exchange states that the proposed 

rule text is substantially identical to the 


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10794 Federal Register / Vol. 72, No. 46 / Friday, March 9, 2007 / Notices 

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

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

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

13 17 CFR 240.19b–4(f)(6)(iii). 

14 Id. 

15The Exchange notes that, in contrast to the 

Exchange’s AEMI-One rules, its AEMI rules (and 

any changes thereto) will not actually become 

effective and operative (as provided in Rule 1A–

AEMI) until the Trading Phase Date, currently 

scheduled for March 5, 2007. That date is within 

the 30-day delay period, so a waiver is needed. 

16See Securities Exchange Act Release No. 55240 

(Feb. 5, 2007), 72 FR 6624 (SR–Amex–2007–07) 

(Notice of Filing of Proposed Rule Change and 

Amendment No. 1 Thereto Amending Existing 

Rules for Portfolio Depositary Receipts and Index 

Fund Shares). 

17See Securities Exchange Act Release Nos. 

54739 and 55018, supra note 9. The same standards 

previously approved by the Commission (eligibility 

criteria for index components, index methodology 

and calculation, and intraday dissemination of 

information on estimated share values) that are 

already in place with respect to securities trading 

on the legacy platform will, as a result of this 

proposed rule change, merely continue to apply to 

those same securities once they are migrated to the 

AEMI platform. 

18For the purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

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

19For 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 22, 

2007, the date on which the Exchange filed 

Amendment No. 1. 

text of the existing legacy rules 

mentioned above. 

2. Statutory Basis 

The proposed rule change 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 

prevent fraudulent and manipulative 

acts and practices, 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. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The proposed rule change will impose 

no 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 solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the forgoing rule change does 

not: (1) Significantly affect the 

protection of investors or the public 

interest; (2) impose any significant 

burden on competition; and (3) become 

operative for 30 days after the date of 

this filing (or such shorter time as the 

Commission may designate if consistent 

with the protection of investors and the 

public interest), it has become effective 

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

Act 12 and Rule 19b–4(f)(6) 

thereunder.13

Normally, a proposed rule change 

filed under 19b–4(f)(6) may not become 

operative prior to 30 days after the date 

of filing. However, Rule 19b–

4(f)(6)(iii) 14 permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. In 

addition, Rule 19b–4(f)(6)(iii) 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. 

The Exchange has requested that the 

Commission waive the five-day prefiling requirement and the 30-day 

operative delay because all of the 

securities trading on the Exchange are 

trading on the AEMI platform under the 

AEMI-One pilot and subject to the 

AEMI-One rules (rather than the legacy 

rules), which will be replaced by the 

AEMI rules on the Trading Phase Date.15

In addition, recently, the Exchange 

submitted another proposed rule change 

that would revise legacy Rules 1000 and 

1000A.16 The Exchange states that, 

upon approval, those rules will require 

another rule filing to provide for 

changes to the corresponding AEMI-One 

and AEMI rules, and believes that there 

is likely to be less confusion regarding 

the latter filing if the changes proposed 

in the instant rule filing are approved 

and become operative first. 

The Commission has determined to 

waive the five-day pre-filing notice 

requirement. In addition, the 

Commission believes that waiving the 

30-day operative delay is consistent 

with the protection of investors and the 

public interest because such waiver 

would permit a smoother transition to 

the AEMI-One and AEMI rules. The 

Commission notes that the proposed 

rule text is substantially identical to the 

text of CBOE’s existing legacy rules.17

For this reason, the Commission 

designates the proposed rule change to 

be effective and operative upon filing 

with the Commission.18

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 furtherance of the 

purposes of the Act.19

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–Amex–2007–17 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–Amex–2007–17. 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 Exchange. 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 


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20 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)(iii). 

4 17 CFR 240.19b–4(f)(6). 

5See Securities Exchange Act Release No. 51429 

(March 24, 2005), 70 FR 16536 (March 31, 2005) 

(approving SR–CBOE–2004–58). 

6Last year, CBOE amended its rules to allow 

Market-Makers to create a ‘‘Virtual Trading Crowd’’

appointment, and also modified the language in 

Rule 8.3(c) such that it states a Market-Maker can 

quote electronically away from CBOE’s trading floor 

pursuant to the Pilot Program. (See Securities 

Exchange Act Release No. 54182 (July 20, 2006), 71 

FR 42692 (July 20, 2006) (approving SR–CBOE–

2006–51).) 

7See Securities Exchange Act Release No. 53410 

(March 3, 2006), 71 FR 12747 (March 13, 2006) 

(granting immediate effectiveness to SR–CBOE–

2006–24). 

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

9 15 U.S.C. 78f(b)(5). 

10 15 U.S.C. 78s(b)(3)(A)(iii). 

11 17 CFR 240.19b–4(f)(6). 

Number SR–Amex–2007–17 and should 

be submitted on or before March 30, 

2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.20

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–4190 Filed 3–8–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55381; File No. SR–CBOE–

2007–18] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Request Permanent 

Approval of a Pilot Program Relating to 

Market-Makers Quoting Remotely 

March 1, 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 

22, 2007, the Chicago Board Options 

Exchange, Incorporated (‘‘Exchange’’ or 

‘‘CBOE’’) 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 prepared by the Exchange. 

The Exchange filed the proposal as a 

‘‘non-controversial’’ proposed rule 

change pursuant to Section 

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

19b–4(f)(6) thereunder.4 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 

CBOE proposes to amend CBOE Rule 

8.3 to request permanent approval of a 

pilot program relating to Market-Makers 

quoting away from CBOE’s trading floor. 

The text of the proposed rule change is 

available on CBOE’s Web site (http:// 

www.cboe.org/Legal), at the CBOE’s 

Office of the Secretary, 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 

Exchange 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 

Exchange 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 request permanent approval 

of an existing Pilot Program that allows 

a CBOE Market-Maker to submit 

electronic quotations away from CBOE’s 

trading floor in his/her appointed 

Hybrid Classes and Hybrid 2.0 Classes. 

In March 2005, CBOE amended its rules 

relating to Market-Maker appointments 

and quoting obligations.5 Among other 

changes, CBOE amended Rule 8.3 to 

provide that a Market-Maker may 

submit electronic quotations from a 

location outside of his/her appointed 

trading station.6 Previously, MarketMakers were only permitted to stream 

electronic quotations in their appointed 

Hybrid and Hybrid 2.0 classes when 

they were physically present in the 

trading crowd. In making this change, 

CBOE determined to request that it only 

be approved on a pilot basis to give 

CBOE the ability to evaluate the 

effectiveness of allowing Market-Makers 

to quote remotely. CBOE extended the 

Pilot Program for an additional year last 

March 2006.7 The current Pilot Program 

is scheduled to expire on March 24, 

2007. 

CBOE believes that the Pilot Program 

has been successful, in that it allows 

Market-Makers to choose how they 

would like to participate in CBOE’s 

Hybrid Trading System, i.e., 

electronically, in open outcry, or both. 

Although not all Market-Makers have 

chosen to quote electronically away 

from CBOE’s trading floor in their 

appointed Hybrid Classes and Hybrid 

2.0 Classes, those Market-Makers that 

have availed themselves of this Pilot 

Program continue to provide liquidity 

and increased competition in their 

appointed option classes when they 

quote remotely. CBOE has not 

experienced any negative effects of 

allowing Market-Makers to quote from a 

location away from CBOE’s trading 

floor. Thus, CBOE believes it would be 

appropriate and beneficial to 

permanently approve the Pilot Program, 

and permit Market-Makers to continue 

to have the option to quote 

electronically away from CBOE’s trading 

floor. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the Act 

and the rules and regulations under the 

Act applicable to a national securities 

exchange and, in particular, the 

requirements of Section 6(b) of the Act.8

Specifically, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) of the Act,9 which 

requires that the rules of an exchange be 

designed to promote just and equitable 

principles of trade, to prevent 

fraudulent and manipulative acts and, 

in general, to protect investors and the 

public interest. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

CBOE 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 solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(iii) of the Act 10 and 

subparagraph (f)(6) of Rule 19b–4 11


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