Document ID: SEC-2007-1230-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: American Stock Exchange LLC
Posted Date: 2007-09-05T04:00Z

[Federal Register: September 5, 2007 (Volume 72, Number 171)]
[Notices]               
[Page 50996-50997]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05se07-82]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56331; File No. SR-Amex-2007-93]

 
Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
Relating to the Options Directed Order Participant Transaction Charge 
Rebate Program

August 28, 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 August 20, 2007, the American Stock Exchange LLC (``Amex'' 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 
Exchange. Amex has designated this proposal as one establishing or 
changing a due, fee, or other charge imposed by Amex under Section 
19(b)(3)(A)(ii) 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)(ii).
    \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 extend the transaction charge rebates 
currently applicable to supplemental registered options traders 
(``SROTs'') to all Directed Order Participants. The text of the 
proposed rule change is available at the Exchange, the Commission's 
Public Reference Room, and http://www.amex.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 Exchange 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. Amex has substantially 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 Exchange proposes to extend the options transaction charge \5\ 
rebates currently applicable to SROTs \6\ to all Directed Order 
Participants (including SROTs) that provide liquidity to the Exchange 
and receive electronic directed customer orders (the ``Directed Order 
Fee Rebate Program''). This Directed Order Fee Rebate Program would 
provide fee rebates to Directed Order Participants that provide order 
flow to the Exchange from an order flow provider firm.\7\
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    \5\ The options transaction charge is the collective of the 
Options Transaction Fee, the Options Comparison Fee, and the Options 
Floor Brokerage fee, as noted on the Options Fee Schedule.
    \6\ See Securities Exchange Act Release No. 56002 (July 2, 
2007), 72 FR 37548 (July 10, 2007) (SR-Amex 2007-55).
    \7\ See Securities Exchange Act Release No. 56269 (August 15, 
2007), 72 FR 47086 (August 22, 2007) (Notice of Filing and Order 
Granting Accelerated Approval of SR-Amex 2007-75). Generally, for 
purposes of the Directed Order Flow Program, a directed order is 
deemed to be an electronic customer order from an order flow 
provider that is directed to a specific specialist, registered 
options trader (``ROT''), SROT, or remote registered options trader 
(``RROT'').
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    This proposal would allow the Exchange to provide Directed Order 
Participants with options transaction charge rebates for the number of 
options contracts that are electronically directed to them and executed 
on the Exchange. The following rebate schedule is proposed:

------------------------------------------------------------------------
                                                              Rebate per
        Monthly directed order volume (in contracts)           contract
------------------------------------------------------------------------
0-1,000,000................................................        $0.05
1,000,001-2,000,000........................................          .10
2,000,001-3,000,000........................................         .125
3,000,001 and up...........................................          .15
------------------------------------------------------------------------

    Rebates would be capped at 100% of transaction charges so that once 
a Directed Order Participant's transaction charges reach zero, the 
Exchange would not pay out any additional credits.\8\
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    \8\ For example, a Directed Order Participant which pays 
$100,000 in transaction charges per month, could not receive more 
than a $100,000 rebate.
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    The Exchange notes that Directed Order Participants are entitled to 
the options transaction charge rebate, which is separate and apart from 
the Exchange's Payment for Order Flow Plan.\9\ The proposed options 
transaction charge rebate, which is provided to Directed Order 
Participants, will not come from the marketing fees collected on those 
transactions.
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    \9\ See supra note 7.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act \10\ in general, and Section 6(b)(4) of 
the Act \11\ in particular, in that it is designed to provide for an 
equitable allocation of reasonable dues, fees, and other charges among 
exchange members and other persons using exchange facilities.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 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

    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

    The foregoing proposed rule change has been designated as a fee 
change pursuant to Section 19(b)(3)(A)(ii) of the Act \12\ and Rule 
19b-4(f)(2) \13\ thereunder, because it establishes or changes a due, 
fee, or other charge imposed by the Exchange. Accordingly, the proposal 
will take effect upon filing with the Commission. At any time within 60 
days of the filing of such 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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    \12\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \13\ 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,

[[Page 50997]]

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-Amex-2007-93 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-Amex-2007-93. 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, 100 F Street, NE., 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of such filing also will be available for 
inspection and copying at the principal office 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-Amex-2007-93 and should be 
submitted on or before September 26, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
 [FR Doc. E7-17479 Filed 9-4-07; 8:45 am]

BILLING CODE 8010-01-P