26854 Federal Register / Vol. 72, No. 91 / Friday, May 11, 2007 / Notices 

7See Pilot Program Extension Notices, supra note 

6. 

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

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

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

11 17 CFR 240.19b–4(f)(6). Rule 19b–4(f)(6) also 

requires the self-regulatory organization to give the 

Commission 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. Amex has satisfied the five-day prefiling requirement. As set forth in the Commission’s 

initial approval of the Pilot Program, if Amex 

proposes to: (1) Extend the Pilot Program; (2) 

expand the number of options eligible for inclusion 

in the Pilot Program; or (3) seek permanent 

approval of the Pilot Program, it must submit a Pilot 

Program report to the Commission along with the 

filing of its proposal to extend, expand, or seek 

permanent approval of the Pilot Program. Amex 

must file any proposal to expand or seek permanent 

approval of the Pilot Program and the Pilot Program 

report with the Commission at least 60 days prior 

to the expiration of the Pilot Program. The Pilot 

Program report must cover the entire time the Pilot 

Program was in effect and must include: (1) Data 

and written analysis on the open interest and 

trading volume for options (at all strike price 

intervals) selected for the Pilot Program; (2) delisted 

options series (for all strike price intervals) for all 

options selected for the Pilot Program; (3) an 

assessment of the appropriateness of $1 strike price 

intervals for the options Amex selected for the Pilot 

Program; (4) an assessment of the impact of the 

Pilot Program on the capacity of Amex’s, the 

Options Price Reporting Authority’s, and vendors’

automated systems; (5) any capacity problems or 

other problems that arose during the operation of 

the Pilot Program and how Amex addressed them; 

(6) any complaints that Amex received during the 

operation of the Pilot Program and how Amex 

addressed them; and (7) any additional information 

that would help to assess the operation of the Pilot 

Program. See Pilot Approval Order, supra note 5. 

12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

in the Pilot Program Extension Notices.7

Amex notes that, as the data indicates, 

the $1 strikes exhibited higher volume 

and open interest than the ‘‘standard’’

strike price intervals. Specifically, the 

five options classes selected by Amex 

for $1 strikes had a trading volume of 

327,115 contracts, while the ‘‘standard’’

strikes for the same options classes had 

a trading volume 290,191 contracts. Of 

even greater significance is the 

difference in open interest between the 

$1 strikes and ‘‘standard’’ strikes. As of 

April 30, 2007, $1 strikes open interest 

totaled 685,808 contracts versus 396,777 

contracts for ‘‘standard’’ strikes. Given 

the limited nature of the Pilot Program, 

the Exchange submits that the impact on 

systems has been minimal. Accordingly, 

Amex believes that an extension of the 

Pilot Program for one year through June 

5, 2008, is warranted. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

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

and furthers the objective of Section 

6(b)(5) of the Act,9 in particular, in that 

it is designed to promote just and 

equitable principles of trade and to 

remove impediments to and perfect the 

mechanism of a free and open market. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange believes that the 

proposed rule change will impose no 

burden on competition that is not 

necessary or appropriate in the 

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 foregoing 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 from the date of 

this filing, or such shorter time as the 

Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act10 and Rule 19b–

4(f)(6) thereunder.11

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, 

or otherwise in furtherance of the 

purposes of the Act. 

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 

No. SR–Amex–2007–43 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 No. 

SR–Amex–2007–43. 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 will also 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 No. 

SR–Amex–2007–43 and should be 

submitted on or before June 1, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.12

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–9076 Filed 5–10–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55715; File No. SR–ISE–

2007–26] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Extend a Pilot Program 

That Allows the Listing of Strike Prices 

at One-Point Intervals for Stocks 

Trading Under $20 

May 7, 2007. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2


ycherry on PROD1PC64 with NOTICES
Federal Register / Vol. 72, No. 91 / Friday, May 11, 2007 / Notices 26855 

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

4 17 CFR 240.19b–4(f)(6). 

5See Securities Exchange Act Release No. 48033 

(June 16, 2003), 68 FR 37036 (June 20, 2003) (SR–

ISE–2003–17) (‘‘Pilot Program Approval Order’’). 

6See Securities Exchange Act Release Nos. 49827 

(June 8, 2004), 69 FR 33966 (June 17, 2004) (SR–

ISE–2004–21); 50060 (July 22, 2004), 69 FR 45864 

(July 30, 2004) (SR–ISE–2004–26); 51769 (May 31, 

2005), 70 FR 33232 (June 07, 2005) (SR–ISE–2005–

22); and 53806 (May 15, 2006), 71 FR 29694 (May 

23, 2006) (SR–ISE–2006–20) (collectively, ‘‘Pilot 

Extension Notices’’). 

7See Securities Exchange Act Release No. 53806, 

supra note 6. 

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

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

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

11 17 CFR 240.19b–4(f)(6). Rule 19b–4(f)(6) also 

requires the self-regulatory organization to give the 

Commission 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. ISE has satisfied the five-day prefiling requirement. As set forth in the Commission’s 

initial approval of the Pilot Program, if ISE proposes 

to: (1) Extend the Pilot Program; (2) expand the 

number of options eligible for inclusion in the Pilot 

Program; or (3) seek permanent approval of the Pilot 

Program, it must submit a Pilot Program report to 

the Commission along with the filing of its proposal 

to extend, expand, or seek permanent approval of 

the Pilot Program. ISE must file any proposal to 

expand or seek permanent approval of the Pilot 

Program and the Pilot Program report with the 

Commission at least 60 days prior to the expiration 

of the Pilot Program. The Pilot Program report must 

cover the entire time the Pilot Program was in effect 

and must include: (1) Data and written analysis on 

the open interest and trading volume for options (at 

all strike price intervals) selected for the Pilot 

Continued 

notice is hereby given that on April 30, 

2007, the International Securities 

Exchange, LLC (‘‘ISE’’ 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 ISE. 

The Exchange has 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 it 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 Exchange proposes to extend 

until June 5, 2008, its $1 strike pilot 

program that allows the listing of strike 

prices at one-point intervals (‘‘Pilot 

Program’’). The text of the proposed rule 

change is available at ISE, the 

Commission’s Public Reference Room, 

and http://www.iseoptions.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, ISE 

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. ISE 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 June 16, 2003, the Commission 

approved ISE’s Pilot Program, which 

allows ISE to list series with $1 strike 

price intervals on equity option classes 

that overlie up to five individual stocks, 

provided that the strike prices are $20 

or less, but not less than $3.5 The Pilot 

Program, after being extended on four 

prior occasions,6 is set to expire on June 

5, 2007.7 The Exchange may currently 

select up to five individual stocks to be 

included in the Pilot Program. The 

Exchange, however, is also permitted to 

list options on other individual stocks at 

$1 strike price intervals if other options 

exchanges listed those series pursuant 

to their respective rules. The Exchange 

has selected the following five options 

classes to participate in the Pilot 

Program: AMR Corp. (AMR), Clapine 

Corp. (CPN), EMC Corp. (EMC), El Paso 

Corp. (EP), and Sun Microsystems Inc. 

(SUNW). ISE believes the Pilot Program 

has been successful and well received 

by its members and the investing public. 

Thus, ISE proposes to extend the Pilot 

Program until June 5, 2008. 

In support of this proposed rule 

change, and as required by the Pilot 

Program Approval Order and the Pilot 

Extension Notices, the Exchange is 

submitting to the Commission a report 

(‘‘Pilot Program Report’’), attached as 

Exhibit 3 to the proposal, detailing the 

Exchange’s experience with the Pilot 

Program. Specifically, the Pilot Program 

Report contains data and written 

analysis regarding the five options 

classes included in the Pilot Program for 

the period between March 2006 through 

February 2007. 

The Exchange believes there is 

sufficient investor interest and demand 

to extend the Pilot Program for another 

year. The Exchange continues to believe 

that the Pilot Program has provided 

investors with greater trading 

opportunities and flexibility and the 

ability to more closely tailor their 

investment strategies and decisions to 

the movement of the underlying 

security. Furthermore, the Exchange has 

not detected any material proliferation 

of illiquid options series resulting from 

the narrower strike price intervals. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the Act 

and the rules and regulations 

thereunder 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 requirements under Section 6(b)(5) 

of the Act 9 that the rules of a national 

securities exchange be designed to 

promote just and equitable principles of 

trade, to prevent fraudulent and 

manipulative acts, 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 Exchange believes 

that extension of the Pilot Program will 

result in a continuing benefit to 

investors by allowing them to more 

closely tailor their investment decisions, 

and will allow the Exchange to further 

study investor interest in $1 strike price 

intervals. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange believes that the 

proposed rule change does not impose 

any burden on competition that is not 

necessary or appropriate in the 

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 

The Exchange has not solicited, and 

does not intend to solicit, comments on 

this proposed rule change. The 

Exchange has not received any 

unsolicited written comments from 

members or other interested persons. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing 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 from the date of 

this filing, or such shorter time as the 

Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 10 and Rule 19b–

4(f)(6) thereunder.11


ycherry on PROD1PC64 with NOTICES
26856 Federal Register / Vol. 72, No. 91 / Friday, May 11, 2007 / Notices 

Program; (2) delisted options series (for all strike 

price intervals) for all options selected for the Pilot 

Program; (3) an assessment of the appropriateness 

of $1 strike price intervals for the options ISE 

selected for the Pilot Program; (4) an assessment of 

the impact of the Pilot Program on the capacity of 

ISE’s, the Options Price Reporting Authority’s, and 

vendors’ automated systems; (5) any capacity 

problems or other problems that arose during the 

operation of the Pilot Program and how ISE 

addressed them; (6) any complaints that ISE 

received during the operation of the Pilot Program 

and how ISE addressed them; and (7) any 

additional information that would help to assess the 

operation of the Pilot Program. See Pilot Program 

Approval Order, supra note 5. 

12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Rule 300(a) of Regulation ATS under the Act 

(defining ‘‘alternative trading system’’). 

4See Rule 600(b)(23) of Regulation NMS under 

the Act (defining ‘‘electronic communication 

network’’). 

5See Securities Exchange Act Release No. 45915 

(May 10, 2002), 67 FR 35171 (May 17, 2002) 

(approving SR–NASD–2001–44). 

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, 

or otherwise in furtherance of the 

purposes of the Act. 

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 

No. SR–ISE–2007–26 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 No. 

SR–ISE–2007–26. 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 will also be 

available for inspection and copying at 

the principal office of ISE. 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 No. 

SR–ISE–2007–26 and should be 

submitted on or before June 1, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.12

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–9070 Filed 5–10–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55717; File No. SR–NASD–

2007–029] 

Self-Regulatory Organizations: 

National Association of Securities 

Dealers, Inc.; Notice of Filing of 

Proposed Rule Change Relating to 

Access Fee Display Requirements for 

the OTCBB 

May 7, 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 April 20, 

2007, the National Association of 

Securities Dealers, Inc. (‘‘NASD’’) 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 

NASD. 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 

NASD is proposing to amend NASD 

Rule 6540(c) to exclude from the access 

fee display requirements access fees 

below a specified level. 

Below is the text of the proposed rule 

change. Proposed new language is in 

italics; proposed deletions are in 

brackets. 

* * * * * 

6540. Requirements Applicable to 

Market Makers 

(a) through (b) No Change. 

(c) A participating ATS or ECN shall 

reflect non-subscriber access or posttransaction fees in its published 

quotation [the ATS’s or ECN’s posted 

quoted] in the OTC Bulletin Board 

montage if: 

(1) The published quotation is priced 

equal to or greater than $1.00 and such 

fees exceed or accumulate to more than 

$0.003 per share; or 

(2) The published quotation is less 

than $1.00 and such fees exceed or 

accumulate to more than 0.3% of the 

published quotation price on a per 

share basis. 

(d) through (e) No Change. 

* * * * * 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

NASD 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. NASD 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 

NASD Rule 6540(c) requires an 

alternative trading system (‘‘ATS’’) 3 or 

electronic communications network 

(‘‘ECN’’) 4 to reflect non-subscriber 

access or post-transaction fees in its 

posted quotation in the OTC Bulletin 

Board (‘‘OTCBB’’). NASD established 

the requirements in Rule 6540(c) to 

permit ATSs and ECNs to participate in 

the OTCBB in the same way that market 

makers participate.5 Specifically, 

because a market maker does not charge 

access or post-transaction fees over and 

above its posted quotation, a 

participating ATS or ECN is prohibited 

from charging such fees, unless such 

fees are incorporated in the ATS’s or 

ECN’s posted quotation. Concerns have 


ycherry on PROD1PC64 with NOTICES