Federal Register / Vol. 72, No. 93 / Tuesday, May 15, 2007 / Notices 27347 

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 NYSE Arca 

addressed them; (6) any complaints that NYSE Arca 

received during the operation of the Pilot Program 

and how NYSE Arca addressed them; and (7) any 

additional information that would help to assess the 

operation of the Pilot Program. See Securities 

Exchange Act Release Nos. 48945 (June 17, 2003), 

68 FR 37594 (June 24, 2003) (SR–PCX–2003–28) 

and 50152 (August 5, 2004), 69 FR 49931 (August 

12, 2004) (SR–PCX–2004–61). 

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 In Amendment No. 1, the Exchange clarified 

that the proposed rule change was seeking to permit 

manual executions of P/A Orders that had been 

price-improved on another exchange and submitted 

to Phlx for execution against the original customer 

limit order that gave rise to the Linkage P/A Order 

and made minor corrections to the rule text. 

4A P/A Order is an order under the Plan for the 

Purpose of Creating and Operating an Intermarket 

Option Linkage (‘‘Linkage Plan’’), for the principal 

account of a specialist (or equivalent entity on 

another Participant Exchange that is authorized to 

represent Public Customer orders), reflecting the 

terms of a related unexecuted Public Customer 

order for which the specialist is acting as agent. See 

Phlx Rule 1083(k)(i). 

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–NYSEAcra–2007–42 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–NYSEArca-2007–42. 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 NYSE Arca. 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–NYSEArca-2007–42 and should be 

submitted on or before June 5, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–9261 Filed 5–14–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55729; File No. SR–Phlx–

2007–26] 

Self-Regulatory Organizations; 

Philadelphia Stock Exchange, Inc.; 

Notice of Filing of Proposed Rule 

Change as Modified by Amendment 

No. 1 Thereto, Relating to Price 

Improved Linkage P/A Orders 

May 9, 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 21, 

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, II, and III below, which Items 

have been substantially prepared by the 

Phlx. On May 2, 2007, the Exchange 

filed Amendment No. 1 to the proposed 

rule change.3 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 Phlx proposes to amend Phlx 

Rule 1034, Minimum Increments, and to 

adopt proposed Phlx Rule 

1080(c)(iv)(F), to permit the Exchange to 

execute Linkage Principal Acting as 

Agent (‘‘P/A’’) Orders 4 that are sent to, 

and price-improved on, another 

exchange, and subsequently presented 

for execution on the Phlx against 

customer limit orders on the limit order 

book that give rise to the initial P/A 

Order, at a price other than the 

minimum trading increment applicable 

to the particular series traded. 

The proposed amendment to Phlx 

Rule 1080(c)(iv)(F) states that such 

orders would be ineligible for automatic 

execution, and would instead be 

handled manually by the specialist. 

The text of the proposed rule change 

is available at Phlx, the Commission’s 

Public Reference Room, and 

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 permit Exchange specialists 

to execute price-improved P/A Orders 

against public customer limit orders at 

prices other than the minimum trading 

increment applicable to that particular 

series so that the customer limit order 

underlying the P/A Order receives the 

improved price. 

Currently, Phlx Rule 1034, Minimum 

Increments, generally provides that 

options quoting at $3.00 or higher have 

a minimum increment of $.10, and 

options quoting under $3.00 have a 

minimum increment of $.05. Options 

subject to the current ‘‘penny pilot’’ may 


cprice-sewell on PROD1PC62 with NOTICES
27348 Federal Register / Vol. 72, No. 93 / Tuesday, May 15, 2007 / Notices 

5See Securities Exchange Act Release No. 55153 

(January 23, 2007), 72 FR 4553 (January 31, 2007) 

(SR–Phlx–2006–74). 

6 In this situation, Phlx specialists would execute 

the customer order on the book at the price most 

favorable to the customer. 

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

8 15 U.S.C. 78f(b)(5). 9 17 CFR 200.30–3(a)(12). 

be quoted and traded in increments as 

low as $.01.5

The proposed rule change concerns 

P/A Orders sent from the Exchange to 

another exchange via the Intermarket 

Option Linkage. When a P/A Order sent 

from the Exchange to another exchange 

is executed on that other exchange, the 

executed P/A Order is delivered back to 

the specialist electronically, where the 

specialist is responsible to execute the 

public customer limit order at the 

execution price of the P/A Order on the 

other exchange. 

Recently, some P/A Orders have been 

executed on other exchanges at 

improved prices after being submitted to 

a price-improvement auction process on 

the other exchange. The result is that 

the executed P/A Order is delivered 

back to the Exchange at a price that is 

expressed in other than the Exchange’s 

minimum trading increment. For 

example, if the Phlx disseminated 

market in a particular series is 2.10 bid, 

2.20 ask, and another exchange is 

disseminating a bid price of 2.15, a 

P/A Order to sell an option series would 

be delivered by the Phlx specialist to the 

other exchange disseminating a limit 

bid price of $2.15. The specialist’s P/A 

Order might be executed in a priceimproving auction at an improved price 

of $2.17 on the other exchange. The 

P/A Order would be delivered back to 

the Phlx specialist for execution at 

$2.17. This would be prohibited under 

current Exchange rules, which require 

an execution at either $2.15 

(disadvantaging the public customer), or 

$2.20 (disadvantaging the specialist), 

because the minimum trading increment 

applicable to the series is $.05.6

The proposed rule change is intended 

to eliminate this anomaly by providing 

that a P/A Order that has been sent from 

the Exchange to, and price-improved on, 

another exchange at a price expressed in 

other than the minimum trading 

increment currently contained in the 

rule, and then submitted to the 

Exchange for execution against the 

original customer limit order that gave 

rise to the P/A Order, may be traded on 

the Exchange at such price. Therefore, 

in the example above, the specialist 

could fill the public customer order at 

the P/A Order execution price of $2.17. 

The proposed amendment to Phlx 

Rule 1080(c)(iv)(F) provides that such 

orders would be ineligible for automatic 

execution and would instead be 

handled manually by the specialist. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,7 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,8

in particular, in that the proposal 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 establishing a rule 

that provides for accurate execution of 

customer limit orders at improved 

prices. 

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. 

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 Phlx 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–Phlx–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 

Number SR–Phlx-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 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–2007–26 and should 

be submitted on or before June 5, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–9260 Filed 5–14–07; 8:45 am] 

BILLING CODE 8010–01–P 

SMALL BUSINESS ADMINISTRATION 

[Disaster Declaration #10854] 

Iowa Disaster #IA–00007; Declaration 

of Economic Injury 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Amendment 1. 

SUMMARY: This is an amendment of an 

Economic Injury Disaster Loan (EIDL) 


cprice-sewell on PROD1PC62 with NOTICES