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###### Securities and Exchange Commission

          - [Release No. 34-55591; File No. SR-Phlx-2007-30] 

                    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 27, 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 substantially by the Phlx.                           ( print page 18506)                        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.[5]                                          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 Phlx Rules 1033, “Bids and Offers—Premium,” and 1066, “Certain Types of Orders Defined,” to define and permit ratio spreads in all options traded on the Exchange. 

                    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.*

## 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 define and permit ratio spreads in options overlying equities, indexes, and Exchange Traded Fund Shares (“ETFs”), and to establish by rule permissible ratios for such orders. 

Currently, Phlx Rule 1033 permits members to trade spread orders in which the respective legs consist of different numbers of contracts (ratio spreads) for foreign currency options only. The proposed rule change would expand the rule to permit ratio spreads for all options traded on the Exchange by deleting from the rules language limiting such orders to options overlying foreign currencies. 

Specifically, the Phlx proposes to amend Phlx Rule 1033(g) to permit ratio spreads for spread, straddle, and combination orders, as defined in Phlx Rule 1066, in equity, ETF, and index options by deleting the current language that limits such orders to foreign currency options. The amended rules would permit spread, straddle, and combination orders in equity, ETF, and index options with a ratio that is equal to or greater than one-to-three and less than or equal to three-to-one. 

                    Phlx Rule 1066 currently defines a “spread order” as an order to buy a stated number of option contracts and to sell                     *the same*                     number of option contracts in a different series of the same option. The proposed amendment would re-define the term “spread order” as an order to buy                     *a stated*                     number of option contracts and to sell a stated number of option contracts (which may be a different number of contracts) in a different series of the same option. The definition would also clarify that such an order may be bid for or offered on a total net debit or credit basis.                 

#### 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 permitting ratio spreads in all options traded on the Exchange.                 

### 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 

No written comments were either solicited or received. 

## III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action 

                    The Phlx has filed the proposed rule change pursuant to Section 19(b)(3)(A) of the Act [8]                                          and subparagraph (f)(6) of Rule 19b-4 thereunder.[9]                                          Because the Phlx has designated the foregoing proposed rule change as one that 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, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-4(f)(6) thereunder. As required by Rule 19b-4(f)(6)(iii) under the Act,[10]                                          the Phlx provided the Commission with 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 filing the proposal with the Commission or such shorter period as designated by the Commission.                 

                    A proposed rule change filed under Rule 19b-4(f)(6) under the Act [11]                                          normally does not become operative prior to 30 days after the date of filing. However, Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest.[12]                                          The Phlx has asked the Commission waive the 30-day operative delay to allow the Phlx to have the same rules governing ratio spreads as those currently in effect on other options exchanges.[13] 

                    The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because it would allow the Phlx to implement rules governing ratio spreads consistent with those adopted by other options exchanges without delay.[14]                                          For this reason, the Commission designates that the proposal become operative immediately.                 

                    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,                           ( print page 18507)                        or otherwise in furtherance of the purposes of the Act.[15] 

## 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 rule-comments@sec.gov.                      Please include File Number SR-Phlx-2007-30 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-2007-30. 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-2007-30 and should be submitted on or before May 3, 2007.                 

                        For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[16] 

Florence E. Harmon, 

Deputy Secretary.

# Footnotes

1.                             15 U.S.C. 78s(b)(1).                     
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2.                             17 CFR 240.19b-4.                     
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3.                             15 U.S.C. 78s(b)(3)(A).                     
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4.                             17 CFR 240.19b-4(f)(6).                     
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5.                             The Phlx has asked the Commission to waive the 30-day operative delay provided in Rule 19b-4(f)(6)(iii), 17 CFR 240.19b-4(f)(6)(iii).                     
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5.                             15 U.S.C. 78f(b).                     
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6.                             15 U.S.C. 78f(b)(5).                     
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8.                             15 U.S.C. 78s(b)(3)(A).                     
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9.                             17 CFR 240.19b-4(f)(6).                     
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10.                             17 CFR 240.19b-4(f)(6)(iii).                     
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11.                             17 CFR 240.19b-4(f)(6).                     
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12.                             17 CFR 240.19b-4(f)(6)(iii).                     
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13.                                                     *See*                         American Stock Exchange LLC Rule 950(e)(v); Chicago Board Options Exchange, Incorporated Rule 6.53(n); International Securities Exchange, LLC Rule 722(a)(6); and NYSE Arca, Inc. Rule 6.62(j).                     
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14.                                                     *See*                         note 13,                         *supra.*                         For 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. 15 U.S.C. 78c(f).                     
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15.                                                     *See*15 U.S.C. 78s(b)(3)(C).                     
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16.                                 17 CFR 200.30-3(a)(12).                         
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 [FR Doc. E7-6878 Filed 4-11-07; 8:45 am] 

BILLING CODE 8010-01-P