Document ID: SEC-2008-0475-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: American Stock Exchange LLC
Posted Date: 2008-03-27T04:00Z

[Federal Register: March 27, 2008 (Volume 73, Number 60)]
[Notices]               
[Page 16400-16401]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27mr08-89]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57541; File No. SR-Amex-2008-25]

 
Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Restore Amex's Revenue Sharing Program for ETF Quoting Participants

March 20, 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 March 18, 2008, the American Stock Exchange LLC (``Exchange'' or 
``Amex'') 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. 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 Exchange proposes to restore a previously-adopted revenue 
sharing program for ETF quoting participants on the Exchange.

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 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 restore a revenue sharing program 
(``RSP'') for ETF quoting participants on the Exchange. The RSP was 
first implemented by the Exchange for ETF specialists and registered 
traders on July 1, 2007, and was to be in effect through December 31, 
2007 unless otherwise extended.\3\ The RSP was inadvertently allowed to 
lapse without the Exchange filing to extend it, so the purpose of the 
proposed rule change is to restore the RSP on a prospective basis, 
effective immediately, on the same terms that previously governed the 
RSP (described below). The Exchange will be submitting a separate 
filing to request retroactive approval of the RSP for the period 
January 1, 2008 through March 17, 2008.
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    \3\ See Securities Exchange Act Release No. 55983 (June 29, 
2007), 72 FR 37059 (July 6, 2007) (SR-Amex-2007-68).
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    RSP payments will be made from the Exchange's general revenues and 
will not be limited to a particular revenue source. In order to 
continue to provide ETF quoting participants (ETF specialists, 
registered traders, and, most recently, Designated Amex Remote Traders 
(DARTs) \4\) with a source of payments to provide incentives to quote

[[Page 16401]]

aggressively in Amex-traded shares, the Exchange proposes to distribute 
revenue to quoting participants as outlined below. The program will be 
in effect through the end of September 2008.
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    \4\ See Securities Exchange Act Release No. 57540 (March 20, 
2008) (SR-Amex-2008-23) (adding DARTs to the RSP as of March 17, 
2008).
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    The RSP will work as follows:
     ETF specialists will receive an aggregate RSP payment 
(calculated monthly) of $0.0024 per share (or 24 cents per 100 shares) 
whenever the specialist either buys or sells its specialty ETF on the 
Exchange and is a provider of liquidity in that transaction (e.g., the 
specialist's quote is traded against or the specialist offsets an order 
imbalance as part of an opening or closing transaction). The RSP 
payment is comprised of $0.0004 per share (or 4 cents per 100 shares) 
for all shares executed on the Exchange in their specialty ETF 
(irrespective of whether the specialist is the provider of liquidity), 
plus another $0.0020 (or 20 cents per 100 shares) if the specialist is 
the provider of liquidity in the transaction. If the specialist is not 
the liquidity provider, then the RSP payment is limited to $0.0004 per 
share executed on the Exchange in its specialty ETF.
     Registered traders in ETFs will receive an RSP payment of 
$0.0010 per share (or 10 cents per 100 shares) whenever the registered 
trader either buys or sells an ETF on the Exchange and is a provider of 
liquidity in that transaction.
     DARTs, as described in the Exchange's recent proposed rule 
change adding DARTs to the RSP,\5\ will receive an RSP payment of 
$0.0015 per share (or 15 cents per 100 shares) whenever the DART either 
buys or sells an ETF on the Exchange and is a provider of liquidity in 
that transaction.
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    \5\ See id.
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    No ETF quoting participant will receive an RSP payment when another 
ETF quoting participant is the contra-party to the transaction. 
Further, RSP payments will be made on transactions in securities 
trading at less than $1.00 only in amounts proportionate to the amount 
on which the Exchange collects revenue. Finally, as customer 
transaction charges are capped at $100 per transaction, meaning that 
the transaction charge of $0.0023 per share is assessed only on the 
first 43,478 shares executed, an ETF quoting participant would receive 
an RSP payment based only on the first 43,478 shares executed.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act \6\ in general and furthers the objectives 
of Section 6(b)(4) of the Act \7\ in particular in that it is intended 
to assure the equitable allocation of reasonable dues, fees, and other 
charges among its members and issuers and other persons using its 
facilities. Specifically, the Exchange is restoring a revenue sharing 
program to maintain incentives for an increase in order flow.
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    \6\ 15 U.S.C. 78f(b)
    \7\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that 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

    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

    Because the foregoing proposed rule change establishes or changes a 
due, fee, or other charge imposed by the Exchange, it has become 
effective upon filing pursuant to Section 19(b)(3)(A) of the Act \8\ 
and Rule 19b-4(f)(2) thereunder.\9\ 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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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 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 No. SR-Amex-2008-25 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-2008-25. 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 Amex. 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-2008-25 and should be submitted on 
or before April 17, 2008.
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    \10\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-6251 Filed 3-26-08; 8:45 am]

BILLING CODE 8011-01-P