Document ID: SEC-2007-0505-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Philadelphia Stock Exchange, Inc.
Posted Date: 2007-04-05T04:00Z

[Federal Register: April 5, 2007 (Volume 72, Number 65)]
[Notices]               
[Page 16845-16846]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05ap07-142]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55553; File No. SR-Phlx-2007-23]

 
Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to Phlx Rule 607 and the XLE Fee Schedule

March 29, 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 March 20, 2007, 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 Phlx has designated this proposal as one establishing or 
changing a due, fee, or other charge applicable only to a member 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 Phlx proposes to amend Phlx Rule 607,\5\ Covered Sale Fee, and 
the XLE Fee Schedule to include sale transactions that are routed 
through the Exchange's routing facility. The Exchange also proposes to 
clarify and update the language in Phlx Rule 607 and on the XLE Fee 
Schedule that relates to the routing of orders over the NMS Linkage 
Plan.
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    \5\ The Commission notes that the text of Phlx Rule 607 was 
incorrectly reflected in Exhibit 5A of the Exchange's Form 19b-4 
filing. Specifically, the Exchange did not include two references to 
the ``Intermarket Trading System'' that were contained in the third 
paragraph of Rule 607 (the third paragraph of the rule is not 
affected by this proposed rule change). These two references have 
subsequently been deleted as part of another immediately effective 
proposed rule change (see File No. SR-Phlx-2007-31), filed on March 
27, 2007.
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    This proposal is scheduled to become effective for transactions 
settling on or after March 20, 2007. The text of the proposed rule 
change is available at the Exchange, on the Exchange's Web site at 
http://www.phlx.com, and at 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, 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 Phlx 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
    Currently, pursuant to Phlx Rule 607, each Phlx member and member 
organization engaged in executing sale transactions on the Exchange or 
executing transactions on another exchange or on a Participant in 
NASD's Alternative Display Facility (``ADF Participant''), which were 
routed over the NMS Linkage Plan, pays a Covered Sale fee equal to (i) 
The Section 31 fee rate multiplied by (ii) the member's aggregate 
dollar amount of covered sales.\6\
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    \6\ The term ``Covered Sale fee'' describes the fee that Phlx 
imposes to recover what it owes pursuant to Section 31 of the Act 
(15 U.S.C. 78ee). Other exchanges may use different terms to 
describe the same fee (e.g., ``Activity Assessment Fee'' or ``Sales 
Value Fee'').
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    A sale transaction may now be routed through the Exchange's 
outbound routing facility,\7\ which is not covered

[[Page 16846]]

by the language set forth above. The Exchange's outbound routing 
facility sends outbound orders to an away market broker for execution 
on an away market. Any covered sale type-fee assessed by an away market 
and incurred by the away market broker is then passed back to Phlx for 
payment, through the Exchange's outbound routing facility. This 
proposal inserts language to reflect that sale transactions may be 
routed over the Exchange's routing facility. Also, the proposed 
language reflects that the Covered Sale fee may be collected by the 
Exchange for these transactions to help the Exchange recover the 
amounts paid to other exchanges.
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    \7\ See Phlx Rule 185(g).
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    Additionally, the Exchange proposes to delete the reference to 
transactions routed over the NMS Linkage Plan, as it is no longer 
applicable. As discussed above, the Exchange has contracted with its 
outbound routing facility to route the Exchange's outbound orders. 
Thus, these orders are no longer routed outbound through the NMS 
Linkage Plan. Deleting the language relating to outbound routing over 
the NMS Linkage Plan will update Phlx Rule 607 and the XLE Fee Schedule 
to reflect the Exchange's current outbound routing practices. The 
provisions of Phlx Rule 607 pertaining to arrangements with other 
exchanges remain unchanged because the Exchange accepts orders routed 
inbound through the NMS Linkage Plan.
2. Statutory Basis
    The Exchange believes that its proposal to amend its schedule of 
fees 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, in that it is an equitable allocation of reasonable fees 
and other charges among Exchange members.
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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

    No written comments were either solicited or received by the 
Exchange.

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act \10\ and paragraph (f)(2) of Rule 19b-4 \11\ 
thereunder because it establishes a due, fee, or other charge 
applicable only to a member. 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-2007-23 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-Phlx-2007-23. 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 the filing 
also will be available for inspection and copying at the principal 
office of the Phlx. 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-2007-23 and should be submitted on or before April 26, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-6375 Filed 4-4-07; 8:45 am]

BILLING CODE 8010-01-P