Document ID: SEC-2006-1456-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Philadelphia Stock Exchange, Inc.
Posted Date: 2006-11-09T05:00Z

[Federal Register: November 9, 2006 (Volume 71, Number 217)]
[Notices]               
[Page 65870-65871]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09no06-153]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54688; File No. SR-Phlx-2006-62]

 
Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to PACE Equity Transaction Charge and NMS Linkage

November 2, 2006.
    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 September 26, 2006, 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. The Exchange submitted the proposed rule change under Section 
19(b)(3)(A) 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the Equity Transaction Charge 
(``Charge'') on the Phlx Fee Schedule to extend the application of the 
Charge to an order, after being delivered to the Exchange by the PACE 
system,\5\ that is executed by the specialist by way of an outbound NMS 
Linkage order, when such outbound NMS Linkage order reflects the PACE 
order's clearing information.\6\ The Charge will not apply where a PACE 
order was executed against an inbound NMS Linkage order. The text of 
the proposed rule change is available on the Exchange's Web site at 
http://www.phlx.com, at the Exchange's Office of the Secretary and at 

the Commission's Public Reference Room.
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    \5\ PACE is the Exchange's automated order routing, delivery, 
execution and reporting system for equities. See Phlx Rule 229.
    \6\ Since October 1, 2006, the effective date of the ``Plan for 
the Purpose of Creating and Operating an Intermarket Communications 
Linkage Pursuant to Section 11A(a)(3)(B) of the Securities Exchange 
Act of 1934'' (``NMS Linkage Plan''), connectivity between markets 
is provided pursuant to the Linkage Plan. See Securities Exchange 
Act Release No. 54551 (September 29, 2006), 71 FR 59148 (October 6, 
2006) (approving the NMS Linkage Plan).
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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 Exchange has prepared summaries, set forth in 
Sections A, B, and C below, of the most significant aspects of such 
statements.

[[Page 65871]]

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 treat PACE trades 
that interact with NMS Linkage orders the same as Intermarket Trading 
System (``ITS'') commitments with respect to the Exchange's Charge.\7\ 
The NMS Linkage Plan is the successor Plan to the ITS Plan. While there 
are some operational differences between the two Plans, both Plans 
facilitate intermarket linkage among market centers trading certain 
listed securities and the Exchange believes the NMS Linkage Plan is 
used in a similar manner as the ITS Plan by its members and member 
organizations. Therefore, the Exchange proposes to apply the Charge to 
PACE trades that interact with NMS Linkage orders in the identical 
manner as PACE trades that interact with ITS commitments. This is 
accomplished by adding the words ``or NMS Linkage order'' to footnote 1 
in the Summary of Equity Charges section of the Exchange's Fee 
Schedule.
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    \7\ See Securities Exchange Act Release No. 47245 (January 24, 
2003), 68 FR 5069 (January 31, 2003) (adopting the current fee 
treatment of PACE trades that interact with ITS commitments).
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2. Statutory Basis
    The Exchange believes that its proposed rule change is consistent 
with Section 6(b) of the Act,\8\ in general, and furthers the 
objectives of Section 6(b)(4) of the Act,\9\ in particular, regarding 
the equitable allocation of reasonable dues, fees, and other charges 
among exchange members and other persons using exchange facilities.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4).
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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

    The Exchange has neither solicited nor received comments on the 
proposed rule change.

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

    The proposed rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act \10\ and subparagraph (f)(2) of Rule 19b-4 
thereunder,\11\ because it establishes or changes a due, fee, or other 
charge imposed by the Phlx. 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.
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    \10\ 15 U.S.C. 78s(b)(3)(a)(ii).
    \11\ 17 CFR 240.19b-4(f)(2).
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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-2006-62 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-Phlx-2006-62. 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 offices 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 
available publicly. All submissions should refer to File Number SR-
Phlx-2006-62 and should be submitted on or before November 30, 2006.
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    \12\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
Nancy M. Morris,
Secretary.
[FR Doc. E6-18944 Filed 11-8-06; 8:45 am]

BILLING CODE 8011-01-P