Federal Register / Vol. 72, No. 58 / Tuesday, March 27, 2007 / Notices 14313 

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

2 7 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(2). 

5For electronically executed customer orders, the 

fee is $0.75 per contract on the transactions of 

specialists, ROTs, RROTs, and SROTs in equity 

options (except for SPDR options which will 

continue to remain subject to the current fee level 

of $1.00 per contract) as well as Nasdaq 100 Index 

options (NDX) and Russell 2000 Index options 

(RUT). Likewise, the fee is $0.35 per contract for 

those equity, exchange traded fund share and trust 

issued receipt options series that quote and trade 

in one cent increments under the penny pilot 

program. 

6This fee is not applicable to SROTs and RROTs 

because their trades are only executed 

electronically. 

7Amendment No. 1 clarified in the Exchange’s 

Options Fee Schedule that the marketing fee does 

not apply to strategy trades executed manually. 

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

9 15 U.S.C. 78f(b)(4). 

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

11 17 CFR 240.19b–4(f)(2). 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55499; File No. SR–Amex–

2007–27] 

Self-Regulatory Organizations; 

American Stock Exchange LLC; Notice 

of Filing and Immediate Effectiveness 

of a Proposed Rule Change, as 

Modified by Amendment No. 1 Thereto, 

Relating to an Amendment to the 

Options Marketing Fee 

March 21, 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 

28, 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, II, and III below, which Items 

have been substantially prepared by the 

Exchange. On March 14, 2007, the 

Amex submitted Amendment No. 1 to 

the proposed rule change. Amex has 

designated this proposal as one 

establishing or changing a due, fee, or 

other charge imposed by Amex under 

Section 19(b)(3)(A)(ii) of the Act 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 Exchange proposes to extend its 

marketing fee program to customer 

orders of 1,000 contracts or greater, 

which are executed in open-outcry (i.e., 

manual executions). 

The text of the proposed rule change 

is available at the Exchange, the 

Commission’s Public Reference Room, 

and http://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. Amex 

has substantially 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 

Currently, the options marketing fee is 

assessed on those specialists, registered 

options traders (‘‘ROTs’’), remote 

registered options traders (‘‘RROTs’’), 

and supplemental registered options 

traders (‘‘SROTs’’) transactions 

involving electronically executed 

customer orders from firms that accept 

payment for directing their orders to the 

Exchange (‘‘payment accepting firms’’) 

with whom a specialist or SROT has 

negotiated a payment for order flow 

arrangement.5

The Exchange is now proposing to 

charge specialists and ROTs a fee of 

$0.40 per contract on customer orders of 

1,000 contracts or greater executed in 

open-outcry (i.e., manual executions), 

that are from payment accepting firms 

with whom a specialist has negotiated a 

payment for order flow arrangement.6

As with electronically executed 

customer orders, the Exchange has no 

role with respect to the negotiations 

between specialists and payment 

accepting firms. The Exchange collects 

and administers the payment of the fee, 

collected on those transactions for 

which the specialist has advised the 

Exchange that it has negotiated with a 

payment accepting firm, to pay for the 

firm’s order flow. Included in this 

general administrative support, the 

Exchange tracks the number of qualified 

orders sent by a payment accepting firm, 

bills specialists and ROTs through their 

clearing firms and issues payments to 

payment accepting firms to reflect the 

collection and payment of the marketing 

fee. The Exchange rebates to specialists 

and ROTs, on a quarterly basis, the 

amount of marketing fees collected that 

have not been paid to order flow 

providers. 

The Exchange notes that strategy 

trades (i.e., dividend spreads, merger 

spreads, short stock interest spreads) 

executed manually will not be eligible 

for payment under this proposal.7

The specialists are solely responsible, 

but are not required, to negotiate 

payment for order flow agreements with 

payment accepting firms and are 

responsible for any arrangements made 

with payment accepting firms. Funds 

collected on manual orders would only 

be paid for the class they are collected, 

and to the order flow provider they are 

collected for. So long as it is within the 

foregoing parameters, the specific terms 

governing the orders that qualify for 

payment and the amount of any 

payments are determined by the 

specialists in their discretion. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act 8 in general, and 

Section 6(b)(4) of the Act 9 in particular, 

in that it is designed to provide for the 

equitable allocation of reasonable dues, 

fees, and other charges among exchange 

members and issuers and other persons 

using exchange facilities. 

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 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 proposed rule change 

has been designated as a fee change 

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

Act 10 and Rule 19b–4(f)(2) 11

thereunder, because it establishes or 

changes a due, fee, or other charge 

imposed by the Exchange. Accordingly, 

the proposal will take effect upon filing 

with the Commission. At any time 

within 60 days of the filing of such 

proposed rule change the Commission 


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14314 Federal Register / Vol. 72, No. 58 / Tuesday, March 27, 2007 / Notices 

12For 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 March 14, 

2007, the date on which the Exchange filed 

Amendment No. 1. 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Amex Rule 590. 

4The remaining provisions of Commentary .03 to 

Amex Rule 958—ANTE are not to be included in 

the Plan. 

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, 

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–2007–27 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–2007–27. 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 Amex. 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–Amex–2007–27 and should 

be submitted on or before April 17, 

2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–5549 Filed 3–26–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55500; File No. SR–Amex–

2007–22] 

Self-Regulatory Organizations; 

American Stock Exchange LLC; Notice 

of Filing of Proposed Rule Change and 

Amendment No. 1 Thereto To Amend 

Its Minor Rule Violation Fine Systems 

March 21, 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 

21, 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, II, and III below, which Items 

have been substantially prepared by the 

Exchange. On March 20, 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 incorporate 

violations of Amex Rule 131A—AEMI 

and Commentary .03 to Amex Rule 

958—ANTE into Part 1 of its Minor Rule 

Violation Fine Systems (the ‘‘Plan’’).3

The text of the proposed rule change is 

available at Amex, the Commission’s 

Public Reference Room, and http:// 

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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange’s Plan provides a 

simplified procedure for the resolution 

of minor rule violations. Codified in 

Amex Rule 590, the Plan has three 

distinct sections: (1) Part 1 (General 

Rule Violations) covers substantive 

matters that are nonetheless deemed to 

be minor; (2) Part 2 (Floor Decorum 

Violations) covers guidelines 

concerning the personal appearance and 

conduct of persons on the trading floor 

and other operational matters; and (3) 

Part 3 (Reporting Violations) covers the 

late submission of routine reports 

required to be filed with the Exchange. 

The Exchange proposes to include 

violations of Amex Rule 131A—AEMI 

into Part 1 of the Plan. Amex Rule 

131A–AEMI, which generally sets forth 

procedures related to market-on-close 

(‘‘MOC’’) and limit-on-close (‘‘LOC’’) 

orders and expiration, is designed to 

minimize price volatility on the close by 

requiring members to enter all MOC and 

LOC orders as early in the day as 

possible. Amex Rule 131A—AEMI also 

establishes deadlines for entering MOC 

and LOC orders, restrictions on 

canceling MOC and LOC orders, 

requirements for publishing imbalances 

on the consolidated tape, the order of 

execution for MOC and LOC orders, and 

procedures for days on which 

derivative, index-related products (e.g., 

options, futures, and options on futures) 

settle against opening prices. 

The Exchange also proposes to 

include violations of Commentary .03 to 

Amex Rule 958—ANTE into Part 1 of 

the Plan. Commentary .03 to Amex Rule 

958-ANTE provides, in part, that, for 

purposes of paragraph (a) of such rule, 

at least 50% of the trading activity in 

any quarter (measured in terms of 

contract volume) of a registered options 

trader must ordinarily be in classes to 

which such registered options trader is 

assigned, except for unusual 

circumstances.4


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