Document ID: SEC-2008-0763-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: American Stock Exchange LLC
Posted Date: 2008-05-30T04:00Z

[Federal Register: May 30, 2008 (Volume 73, Number 105)]
[Notices]               
[Page 31164-31165]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30my08-95]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57856; File No. SR-Amex-2008-38]

 
Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
Relating to Fixed Return Option Transaction Fees

May 23, 2008.
    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 May 7, 2008, American Stock Exchange LLC (``Amex'' or the 
``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 prepared substantially by Amex. 
The Exchange has designated this proposal as one establishing or 
changing a member 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

    Amex is proposing to amend its options fee schedule (the ``Options 
Fee Schedule'') to adopt transaction fees in connection with Fixed 
Return Options (``FROs''). The text of the proposed rule change is 
available at http://www.amex.com, the principal offices of the 
Exchange, and the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, Amex 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 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
    In August 2007, the Commission approved an Exchange proposal to 
list and trade FROs based on individual stocks and exchange-traded 
funds (``ETFs'').\5\ In connection with the ability to trade FROs, the 
Options Clearing Corporation (``OCC'') also filed proposed rule changes 
as well as a revision to the Options Disclosure Document (``ODD''). The 
Commission recently approved the ODD revisions so that FROs may 
commence trading on the Exchange.\6\ The Exchange expects to launch 
FROs on May 8, 2008.
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    \5\ See Securities Exchange Act Release No. 56251 (August 14, 
2007), 72 FR 46523 (August 20, 2007) (SR-Amex-2004-27).
    \6\ See Securities Exchange Act Release No. 57744 (April 30, 
2008) (SR-ODD-2008-01). The Commission previously approved proposed 
OCC rule changes in November 2007. See Securities Exchange Act 
Release No. 56875 (November 30, 2007), 72 FR 69274 (December 7, 
2007) (SR-OCC-2007-08).
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    Amex proposes to adopt transaction fees in connection with FROs of 
(i) $0.20 per contract side for orders of the account of specialists 
and registered options traders (``ROTs''), (ii) $0.23 per contract side 
for orders of the account of supplemental registered options traders 
(``SROTs''), (iii) $0.30 per contract side for orders of the account of 
non-member market makers and (iv) $0.26 per contract side for order of 
the account of non-member broker-dealers and member broker-dealers.\7\ 
Orders for the account of customers would not be subject to a 
transaction charge in FROs. In all cases, the fees are charged only to 
Exchange members through whom the orders are placed. These transaction 
charges are identical to the existing transaction charges for equity 
options. In addition, FROs would not be subject to the options 
marketing fee.
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    \7\ The transaction charges for specialists and ROTs each would 
consist of an options transaction fee of $0.10 per contract side, an 
options comparison fee of $0.05 per contract side and an options 
floor brokerage fee of $0.05 per contract side. With respect to 
SROTs and non-member market makers, transaction charges would 
consist of an options transaction fee of either $0.13 per contract 
side or $0.20 per contract side, respectively, and an options 
comparison fee of $0.05 per contract side and an options floor 
brokerage fee of $0.05 per contract side. The transaction charges 
for non-member broker-dealers (broker-dealers) and member broker-
dealers (firms) each would consist of an options transaction fee of 
$0.19 per contract side, an options comparison fee of $0.04 per 
contract side and an options floor brokerage fee of $0.03 per 
contract side.
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    FROs would also be subject to the identical BD Auto-Ex Fee that 
currently exists for equity options, exchange-

[[Page 31165]]

traded fund share (``ETF'') options, QQQQ options and trust issued 
receipt (``HOLDR'') options. Accordingly, the BD Auto-Ex Fee in 
connection with FROs would provide that orders for the account of 
specialists, ROTs and non-member market makers that are automatically 
executed on the Exchange be subject to (i) a $0.50 per contract side 
options transaction fee, (ii) a $0.05 per contract side options 
comparison fee and (iii) $0.05 per contract side options floor 
brokerage fee.\8\ Similarly, FRO orders for the account of member 
broker-dealers (Firms) and non-member broker-dealers (Broker/Dealer) 
that are automatically executed on the Exchange would be subject to the 
BD Auto-Ex Fee as follows: (i) A $0.50 per contract side options 
transaction fee; (ii) a $0.04 per contract side comparison fee and 
(iii) a $0.03 per contract side floor brokerage fee.
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    \8\ See Securities Exchange Act Release No. 47216 (January 17, 
2003), 68 FR 5059 (January 31, 2003) (SR-Amex-2002-114). The 
Exchange recently amended the Options Fee Schedule to clarify that 
BD Auto-Ex Fees apply to Options Linkage Orders that are 
automatically executed. See Securities Exchange Act Release No. 
57589 (April 1, 2008), 73 FR 18827 (April 7, 2008) (SR-Amex-2008-
09).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of section 6 of the act,\9\ in general, and 
furthers the objectives of section 6(b)(4),\10\ in particular, in that 
it is designed to provide for the equitable allocation of reasonable 
dues, fees and other charges among its members and other persons using 
its facilities. The Exchange notes that the proposed transaction fees 
are similar to the fees currently charged in connection with 
transactions in equity options.
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    \9\ 15 U.S.C. 78f.
    \10\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The proposed rule change does not 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 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 
parties.

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 \11\ and Rule 
19b-4(f)(2) \12\ thereunder, because it establishes or changes a due, 
fee, or other charge imposed on members by Amex. Accordingly, the 
proposal is effective upon filing with the Commission. 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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    \11\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \12\ 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-Amex-2008-38 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-Amex-2008-38. 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 publicly available. All 
submissions should refer to File Number SR-Amex-2008-38 and should be 
submitted on or before June 20, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-12073 Filed 5-29-08; 8:45 am]

BILLING CODE 8010-01-P