3184 Federal Register / Vol. 72, No. 15 / Wednesday, January 24, 2007 / Notices 

24 15 U.S.C. 78k–1(a)(1)(C)(iii). 

25See proposed Section 703.16(C)(3) of the 

Manual. If an index or portfolio value does not 

change for some of the time that the ETF trades on 

the Exchange, the last official calculated value must 

remain available throughout Exchange trading 

hours. 

26See id. 

27See proposed Section 703.16(A)(6) of the 

Manual. 

28See Securities Exchange Act Release No. 54997 

(December 21, 2006), 71 FR 78501 (December 29, 

2006) (SR–NYSEArca–2006–77). 

29See supra note 23. 

30 15 U.S.C. 78s(b)(2). 

31 Id. 

32 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 54912 

(December 11, 2006), 71 FR 75601. 

4See Securities Exchange Act Release No. 54911 

(December 11, 2006), 71 FR 75603 (December 15, 

2006) (notice of filing and immediate effectiveness 

of SR–NYSE–2006–108). 

5See Exchange Act Release No. 54856 (December 

1, 2006); 71 FR 71215 (December 8, 2006) (SR–

NYSE–2006–106). 

forth in Section 703.16(B) of the Manual 

and (2) NYSE complies with the 

commitments undertaken by the other 

SRO set forth in the prior order, 

including any surveillance-sharing 

arrangements with a foreign market. 

The Commission believes that NYSE’s 

proposal is consistent with Section 

11A(a)(1)(C)(iii) of the Exchange Act,24

which sets forth Congress’ finding that 

it is in the public interest and 

appropriate for the protection of 

investors and the maintenance of fair 

and orderly markets to assure the 

availability to brokers, dealers, and 

investors of information with respect to 

quotations for and transactions in 

securities. The Exchange’s proposal also 

requires the value of the index or 

portfolio underlying an ETF based on a 

global or international index to be 

disseminated at least once every 60 

seconds during Exchange trading 

hours.25 In addition, an IIV, which 

represents an estimate of the value of a 

share of each ETF, must be updated and 

disseminated at least once every 15 

seconds during the time an ETF trades 

on the Exchange.26 The IIV will be 

updated to reflect changes in the 

exchange rate between the U.S. dollar 

and the currency in which any index or 

portfolio component stock is 

denominated. In the event that an 

underlying index or portfolio value is 

no longer calculated or disseminated, 

the Exchange has represented that it 

would commence delisting proceedings 

for the associated ETF. Furthermore, the 

issuer of an ETF listed under the 

proposed rules will be required to 

represent that it will calculate the NAV 

and make it available daily to all market 

participants at the same time.27

The Exchange’s trading halt rules are 

reasonably designed to prevent trading 

in an ETF when transparency cannot be 

assured. Proposed NYSE Rule 1100(f)(1) 

provides that, when the Exchange is the 

listing market, if the IIV or index value 

applicable to an ETF is not 

disseminated as required, the Exchange 

may halt trading during the day in 

which the interruption occurs. If the 

interruption continues, then the 

Exchange will halt trading no later than 

the beginning of the next trading day. In 

addition, proposed NYSE Rule 

1100(f)(2) sets forth trading halt 

procedures when the Exchange trades 

the ETF pursuant to UTP. This proposed 

rule is substantially similar to that 

recently adopted by another exchange, 

NYSEArca.28

In approving this proposal, the 

Commission relied on NYSE’s 

representation that its surveillance 

procedures are adequate to properly 

monitor the trading of ICUs listed 

pursuant to the proposed new listing 

standards or traded pursuant to unlisted 

trading privileges. This approval is 

conditioned on the continuing accuracy 

of that representation. 

Acceleration 

The Commission finds good cause for 

approving the proposed rule change, as 

amended, prior to the 30th day after the 

date of publication of the notice of filing 

thereof in the Federal Register. The 

Commission notes that NYSE’s proposal 

is substantially similar to an Amex 

proposal that has been approved by the 

Commission.29 The Commission does 

not believe that NYSE’s proposal raises 

any novel regulatory issues and, 

therefore, that good cause exists for 

approving the filing before the 

conclusion of a notice-and-comment 

period. Accelerated approval of the 

proposal will expedite the listing and 

trading of additional ETFs by the 

Exchange, subject to consistent and 

reasonable standards. Therefore, the 

Commission finds good cause, 

consistent with Section 19(b)(2) of the 

Exchange Act,30 to approve the 

proposed rule change, as amended, on 

an accelerated basis. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Exchange Act,31

that the proposed rule change (SR–

NYSE–2006–101), as amended, be, and 

it hereby is, approved on an accelerated 

basis. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.32

Nancy M. Morris, 

Secretary. 

[FR Doc. E7–956 Filed 1–23–07; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55120; File No. SR–NYSE–

2006–110] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Order 

Approving a Proposed Rule Change 

Relating to Its Linkage Order Fee 

January 18, 2007. 

On December 6, 2006, the New York 

Stock Exchange LLC (‘‘NYSE’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and 

Rule 19b–4 thereunder,2 a proposal to 

retroactively apply an increase in the fee 

(‘‘Linkage Order Fee’’) it charges its 

member organizations in connection 

with orders in equities executed in 

another market pursuant to the Plan for 

the Purpose of Creating and Operating 

an Intermarket Communications 

Linkage (‘‘Linkage Plan’’). The proposal 

was published for comment in the 

Federal Register on December 15, 

2006.3 The Commission received no 

comments on the proposal. This order 

approves the proposed rule change. 

The Exchange proposes to 

retroactively apply, as of December 1, 

2006, an increase from $0.00025 to 

$0.000275 per share in the Linkage 

Order Fee it charges its member 

organizations in connection with orders 

in equities executed in another market 

pursuant to the Linkage Plan. This 

increase in the Linkage Order Fee 

became effective on Monday, December 

4, 2006, pursuant to a previous rule 

change submitted by the Exchange.4 The 

Linkage Order Fee was increased to 

$0.000275 to set it at the same level as 

the regular equity transaction fee, which 

was increased to that level as of 

December 1, 2006.5 The current filing 

simply applies the revised Linkage 

Order Fee to transactions that occurred 

on December 1, 2006, which is the only 

business day with respect to which the 

Linkage Order Fee and the regular 

equity transaction fee were not 

harmonized by the previous filing. The 

Exchange wishes to harmonize the 

Linkage Order Fee payable on 


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Federal Register / Vol. 72, No. 15 / Wednesday, January 24, 2007 / Notices 3185 

6The Exchange estimates that the difference in 

the amount of Linkage Order Fees payable under 

the old rate as compared to the proposed revised 

rate by customers for trades executed on December 

1, 2006, would be less than $2,000.00. Telephone 

conversation between John Carey, Assistant General 

Counsel, NYSE, and Nathan Saunders, Special 

Counsel, Division of Market Regulation, 

Commission, December 7, 2006. 

7 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). 

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

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

10 Id. 

11 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Phlx Rule 1014(b)(ii)(A). 

4See Phlx Rule 1014(b)(ii)(B). 

5See Securities Exchange Act Release No. 54914 

(December 11, 2006), 71 FR 75798. 

6The Exchange may increase the MNQ levels by 

submitting to the Commission a rule filing pursuant 

to Section 19(b)(3)(A) of the Act and may decrease 

the MNQ levels upon Commission approval of a 

rule filing submitted pursuant to 19(b)(2) of the Act. 

See proposed Commentary .05 to Phlx Rule 507. 

7See Phlx By-Law Article X, Section 10–7. The 

OAESC has jurisdiction over, among other things: 

The appointment of specialists on the options and 

foreign currency options trading floors; allocation, 

retention and transfer of privileges to deal in 

options on the trading floors; and administration of 

the 500 series of Phlx rules. 

8See proposed Commentary .03 to Phlx Rule 507. 

9 15 U.S.C. 78s(b)(3)(A). 

transactions executed through the 

Linkage on December 1, 2006, with the 

regular equity transaction fee payable on 

that day because the difference in the 

amount payable by customers would be 

immaterial, but the Exchange would 

incur significant costs in identifying 

those transactions which should be 

charged the lower fee rate.6

The Commission finds that the 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to a national securities 

exchange 7 and, in particular, the 

requirements of Section 6(b) of the Act 8

and the rules and regulations 

thereunder. Specifically, the 

Commission finds that the proposal to 

retroactively apply the increase in the 

Linkage Order Fee is consistent with 

Section 6(b)(4) of the Act,9 which 

requires the equitable allocation of 

reasonable dues, fees, and other charges 

among Exchange members and other 

persons using Exchange facilities. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,10 that the 

proposed rule change (File No. SR–

NYSE–2006–110) be, and it hereby is, 

approved. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.11

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–974 Filed 1–23–07; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55114; File No. SR–Phlx–

2006–81] 

Self-Regulatory Organizations; 

Philadelphia Stock Exchange, Inc.; 

Order Granting Approval to Proposed 

Rule Change Relating to the 

Establishment of a Maximum Number 

of Quoting Participants Permitted in a 

Particular Option on the Exchange 

January 17, 2007. 

I. Introduction 

On December 5, 2006, the 

Philadelphia Stock Exchange, Inc. 

(‘‘Phlx’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’), 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

amend Phlx Rule 507, which governs 

the assignment of options to Streaming 

Quote Traders (‘‘SQTs’’) 3 and Remote 

Streaming Quote Traders (‘‘RSQRs’’),4

by adding commentary to the rule 

establishing a maximum number of 

quoting participants that may be 

assigned to a particular equity option at 

any one time. The proposed rule change 

was published for comment in the 

Federal Register on December 18, 

2006.5 The Commission received no 

comments regarding the proposal. This 

order approves the proposed rule 

change. 

II. Description of the Proposal 

The purpose of the proposed rule 

change is to enable the Exchange to 

manage its quotation traffic and 

bandwidth capacity by limiting the 

number of streaming quote market 

participants that may be assigned to a 

particular option at a given point in 

time. The proposed amendments to Phlx 

Rule 507 would establish: (i) A 

maximum number of quoters (‘‘MNQ’’) 

in equity options based on each option’s 

monthly trading volume; (ii) a process 

for recalculating the MNQ based upon 

changes in an option’s monthly trading 

volume; (iii) an increase to the MNQ 

due to exceptional circumstances; (iv) 

the process by which the Exchange will 

notify market participants of changes to 

the MNQ; and (v) additional criteria 

relating to the process by which the 

Exchange will assign SQT and/or RSQT 

applicants in options in the event that 

there are more applicants for assignment 

in a particular option than there are 

positions. 

The Exchange proposes to limit the 

number of participants that may be 

assigned to a particular equity option at 

any one time based upon each option’s 

monthly national volume. Proposed 

Commentary .02 to Phlx Rule 507 sets 

forth tiered MNQ levels providing for 20 

participants for the top 5% most 

actively traded options; 15 participants 

for next 10% most actively traded 

options, and 10 market participants for 

all other options.6 The ranking is based 

upon the preceding month’s national 

volumes. The MNQ would be 

recalculated within the first five days of 

each month based on the previous 

month’s trading volume (‘‘new MNQ’’). 

The Exchange would inform market 

participants of changes to the MNQ via 

Exchange circular. 

The Exchange’s Options Allocation, 

Evaluation and Securities Committee 

(‘‘OAESC’’) 7 would be able to increase 

the MNQ in exceptional circumstances. 

Proposed Commentary .04 to Phlx Rule 

507 describes the events that may be 

considered ‘‘exceptional,’’ including 

substantial trading volume (whether 

actual or expected), a major news event, 

or corporate event. The Exchange would 

also be permitted to reduce the MNQ 

following the cessation of the 

exceptional circumstances, but would 

be required to follow the same 

procedures applicable for decreases to 

the MNQ due to a change in volume.8

When relying on this provision, the 

Exchange would submit a rule filing to 

the Commission pursuant to Section 

19(b)(3)(A) of the Act.9

The Exchange is also proposing to 

amend Phlx Rule 507 by adding criteria 

for the OAESC to consider when 

determining whether to assign an option 

to a member in the situation where there 

are more applicants for assignment in a 

particular option than there are 

positions available. Specifically, 

proposed paragraph (b)(iii) of Phlx Rule 

507 would require the OAESC to 

consider: (i) The financial and technical 

resources available to the applicant; (ii) 


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