Document ID: SEC-2007-0066-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: American Stock Exchange LLC
Posted Date: 2007-01-16T05:00Z

[Federal Register: January 16, 2007 (Volume 72, Number 9)]
[
Notices]               
[Page 1784-1786]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16ja07-92]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55048; File No. SR-Amex-2006-119]

 
Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing of a Proposed Rule Change Relating to the Definition 
of Complex Trade as Applied to Trades Through the Options Intermarket 
Linkage

January 5, 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 December 28, 2006, 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 prepared substantially by the 
Exchange. 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Amex proposes to revise Amex Rule 940(b)(3) to amend the 
definition of ``Complex Trade.'' The text of the proposed rule change 
appears below, with additions italicized and deletions in [brackets]:
Options Intermarket Linkage
    Rule 940 (a) No Change
    (b) Definitions--The following terms shall have the meaning 
specified in this Rule solely for the purpose of this Section 4:
    (1)-(2) No Change
    (3) ``Complex Trade'' means the execution of an order in an option 
series in conjunction with the execution of one or more related 
order(s) in different options series in the same underlying security 
occurring at or near the same

[[Page 1785]]

time for the purpose of executing a particular investment strategy and 
for an equivalent number of contracts, provided that the number of 
contracts of the legs of a spread, straddle or combination order may 
differ by a permissible ratio [for the equivalent number of contracts 
and for the purpose of executing a particular investment strategy]. The 
permissible ratio for this purpose is any ratio that is equal to or 
greater than one-to-three (.333) and less than or equal to three-to-one 
(3.00).
    (4) through (20) No Change
* * * * *

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. The Exchange 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 Amex proposes to revise Amex Rule 940(b)(3) to amend the 
definition of ``Complex Trade.'' For the purpose of the Options 
Intermarket Linkage (the ``Linkage''), the Amex defines a ``Complex 
Trade'' as a trade reflecting the execution of an order in an options 
series in conjunction with one or more other orders in different series 
in the same underlying security ``for the equivalent number of 
contracts.'' A Complex Trade is exempt from the trade-through rule 
provided by Amex Rule 942(b)(7).
    In contrast to the Linkage definition of Complex Trade, the 
definition of ``ratio order'' set forth in Amex Rule 950--ANTE(e)(vii) 
does not require that there be an equivalent number of contracts in the 
orders. Specifically, Rule 950-ANTE(e)(vii) permits ratios that are 
equal to or greater than one-to-three and less than or equal to three-
to-one. The Exchange applies modified priority rules to ratio orders as 
well as other complex orders, including spread orders, straddle orders, 
and combination orders.\3\
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    \3\ See Amex Rule 950-ANTE(d), Commentary .01.
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    This proposal will conform the Linkage definition of Complex Trade 
in Amex Rule 940(b)(3) to the Amex's definition of a ratio order. 
According to the Amex, the other options exchanges also will adopt a 
similar definition, thereby resulting in a uniform application of the 
definition of Complex Trade across exchanges. The Amex believes that 
this uniformity will facilitate efficient executions of Complex Trades 
on all markets. In addition, the Exchange submits that the proposal 
will align the Linkage rules with the Amex's internal market rules to 
facilitate the trading of complex orders.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\4\ in general, and furthers the objectives of Section 6(b)(5),\5\ 
in particular, in that it is designed to prevent fraudulent and 
manipulative acts and practices, 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.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
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 B. Self-Regulatory Organization's Statement on Burden on Competition

    The Amex believes that the proposed rule change will impose no 
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 Amex neither solicited nor received written comments with 
respect to the proposed rule change.

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 the self-regulatory organization 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 rule-comments@sec.gov. Please include 

File No. SR-Amex-2006-119 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-2006-119. 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 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-2006-119 and should be submitted on or before 
February 6, 2007.

[[Page 1786]]

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-384 Filed 1-12-07; 8:45 am]

BILLING CODE 8011-01-P