Federal Register / Vol. 72, No. 62 / Monday, April 2, 2007 / Notices 15733 

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

2 17 CFR 240.19b–4. 

3See, Securities Exchange Act Release No. 55008 

(December 22, 2006), 72 FR 597 (January 5, 2007) 

(Order approving SR–Amex 2006–98). 

4The Commission made minor clarifications to 

this sentence pursuant to a telephone call with the 

Exchange. See telephone call by and between 

Rahman Harrison, Special Counsel, Division of 

Market Regulation, Commission, and Claire P. 

McGrath, Senior Vice President and General 

Counsel, Amex, on February, 28, 2007. 

5The Commission made minor conforming 

changes to this sentence pursuant to a telephone 

call with the Exchange. See telephone call by and 

between Rahman Harrison, Special Counsel, 

Division of Market Regulation, Commission, and 

Claire P. McGrath, Senior Vice President and 

General Counsel, Amex, on February, 28, 2007. 

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

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

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55533; File No. SR–Amex–

2007–13] 

Self-Regulatory Organizations; 

American Stock Exchange LLC; Notice 

of Filing of Proposed Rule Change 

Relating to Exchange Rules Regarding 

Specialist Commissions 

March 26, 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 

29, 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 

Amex. 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 Exchange proposes to amend 

Rules 154–AEMI and 154–AEMI One to 

extend its rule regarding specialist 

commissions. The text of the proposed 

rule change is available at http:// 

www.amex.com, at the Exchange’s 

principal office, 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 Exchange recently adopted Rule 

154(b) setting forth the circumstances 

under which specialists may charge 

members and member organizations a 

commission for executing orders in 

equities.3 The Exchange adopted this 

rule to provide consistency and clarity 

to all members and the public that 

orders sent to the Amex will not be 

subject to excessive or arbitrary costs; 

and to preserve the cost competitiveness 

of the Exchange. 

The Exchange now proposes to adopt 

subparagraph (k) to Rule 154–AEMI and 

to Rule 154–AEMI One to: (1) Extend 

the application of the prohibitions on 

specialist commissions to Exchange 

Traded Fund Shares (‘‘ETFs’’) and 

equities trading on the AEMI System; (2) 

expand the prohibition on specialist 

commissions to market at the close 

orders and limit at the close orders; and 

(3) specify that specialist commissions 

can only be charged for orders that are 

executed and not for orders that are 

cancelled or expire unexecuted. Thus 

proposed Rules 154–AEMI (k) and 154–

AEMI One (k) would prohibit specialists 

from charging a commission for orders 

or portions of orders that have not been 

executed. This includes but is not 

limited to, a prohibition on specialists 

charging for order cancellations and 

orders that expire due to the passage of 

time.4 As noted above, the proposed 

rule will extend the prohibitions in Rule 

154(b) to ETFs and equities now trading 

on the AEMI System which include 

prohibiting specialists from charging a 

commission on off floor orders that are 

electronically delivered to the specialist 

except in cases of orders that require 

special handling by the specialist or for 

which the specialist provides a service. 

The proposed rule would also prohibit 

specialists from billing for electronically 

delivered orders that are executed 

automatically by the Exchange’s order 

processing facilities upon receipt. 

Orders executed on an opening or 

reopening would not be ‘‘billable.’’ In 

addition, proposed Rules 154–AEMI (k) 

and 154–AEMI One (k) will reference 

Rule 152–AEMI (c) or Rule 152–AEMI 

One (c), respectively, which prohibits 

specialists from charging a commission 

where they act as principal in the 

execution of an order entrusted to them 

as agent. The proposed rule will also set 

forth the types of orders specialists 

would be allowed (but not required) to 

bill a commission. 

In general, ‘‘routine’’ orders are not 

subject to specialist commissions while 

orders that require special handling or 

for which the specialist provides a 

service may be subject to a commission. 

Thus, proposed Rules 154–AEMI (k) and 

154–AEMI One (k) (consistent with the 

recently adopted Rule 154(b)) will 

provide that specialists may (but are not 

required to) bill for: (i) Limit orders that 

remain on the book for more than two 

minutes; (ii) tick sensitive orders (e.g., 

an order to sell short in a security 

subject to the Commission’s ‘‘tick-test’’); 

(iii) stop or stop limit orders; (iv) fill-orkill and immediate-or-cancel orders; 

and (v) orders for the account of a 

competing market maker.5 It should be 

noted that the proposed rules eliminate 

the following order types from the list 

of orders for which the specialist may 

bill a commission as set forth in Rule 

154(b) since these order types are not 

used in the AEMI System: (i) A nonregular way settlement (market or limit) 

order; and (ii) a market or marketable 

limit order stopped at one price and 

executed at a better price. 

Specialist commissions increase the 

cost of doing business on the Exchange. 

These increased costs weaken the 

Exchange’s competitive position relative 

to other markets as other markets do not 

need to compete as aggressively with 

the Exchange to cut their prices to 

investors. The Exchange consequently 

believes that the proposed rule would 

benefit investors if implemented and 

would strengthen the Exchange’s 

competitive position. 

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) 6 of the Act. 

Specifically, the Exchange believes the 

proposed rule change is consistent with 

the requirements of Section 6(b)(5) 7 of 

the Act that the rules of an exchange be 

designed to promote just and equitable 

principles of trade, to prevent 

fraudulent and manipulative acts and 

practices, and, in general, to protect 

investors and the public interest. In 

addition, the Exchange believes that the 

proposed rule change is consistent with 


hsrobinson on PROD1PC76 with NOTICES
15734 Federal Register / Vol. 72, No. 62 / Monday, April 2, 2007 / Notices 

8 15 U.S.C. 78f(b)(4). 

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(2). 

the provisions of Section 6(b)(4),8 which 

requires that the rules of an exchange 

provide for the equitable allocation of 

reasonable dues, fees, and other charges 

among its members and issuers and 

other persons using its facilities. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The proposed rule change does not 

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 

Within 35 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding, or 

(ii) as to which the Amex consents, the 

Commission will: 

A. By order approve such proposed 

rule change; or 

B. Institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

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–2007–13 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–Amex–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 such 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 publicly available. All 

submissions should refer to File 

Number SR–Amex–2007–13 and should 

be submitted on or before April 23, 

2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–5982 Filed 3–30–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55529; File No. SR–BSE–

2007–13] 

Self-Regulatory Organizations; Boston 

Stock Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule Change To Amend the 

Existing BeX Fee Schedule 

March 26, 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 March 5, 

2007, the Boston Stock Exchange, Inc. 

(‘‘BSE’’ 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. 

The BSE has designated this proposal as 

one changing a due, fee, or other charge 

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 from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The BSE proposes to amend the 

Boston Equities Exchange (‘‘BeX’’) fee 

schedule to include a smart order 

routing fee to be charged to BSE 

Members where a third-party brokerdealer serves as the ‘‘give-up’’ on an 

away Trading Center when the Member 

on whose behalf the order is being 

routed is not also a member of the away 

Trading Center. The text of the proposed 

rule change is available at 

www.bostonstock.com, at the BSE, 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 

On November 20, 2006, the BSE filed 

File No. SR–BSE–2006–44, a rule filing 

that amended the existing BSE fee 

schedule and established a fee schedule 

for the BeX, a facility of the Exchange. 

File No. SR–BSE–2006–44 resulted in, 

among other things, the deletion of all 

Transaction Fees, Electronic File Access 

and Processing Fees, and Floor 

Operation Fees from the BSE fee 

schedule. The Transaction Fees and 

Electronic File Access and Processing 

Fees that were deleted from the BSE fee 

schedule were transferred to the BeX fee 

schedule. In addition to the transfer of 

existing fees from the BSE fee schedule 


hsrobinson on PROD1PC76 with NOTICES