Document ID: SEC-2007-1526-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Philadelphia Stock Exchange, Inc.
Posted Date: 2007-11-08T05:00Z

[Federal Register: November 8, 2007 (Volume 72, Number 216)]
[Notices]               
[Page 63216-63217]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08no07-79]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56725; File No. SR-Phlx-2007-82]

 
Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change to 
Amend the Market Access Provider Subsidy Section of the Exchange's Fee 
Schedule

October 31, 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 October 23, 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 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 Phlx proposes to amend the Exchange's fee schedule to reflect a 
Market Access Provider (``MAP'') Marketing Subsidy of $25,000.00 per 
month for a maximum of three months.
    The text of the proposed rule change is available at the Exchange, 
the Commission's Public Reference Room, and http://www.Phlx.com/exchange/phlx-rule-fil.htm
.

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
    The purpose of the proposed rule change is to provide marketing 
incentives to Exchange member organizations, and to encourage 
additional options order flow to the Exchange.

Market Access Provider

    In August 2007, the Exchange amended its fee schedule to provide a 
per contract subsidy (the ``Subsidy'') for certain Exchange members 
known as MAPs.\3\ A MAP is an Exchange member organization that offers 
to customers automated order routing systems and electronic market 
access to U.S. options markets. The Exchange pays a per-contract MAP 
Subsidy to any Exchange member organization that qualifies as a MAP (an 
``Eligible MAP'') \4\ who elects to participate by submitting any 
application(s) and/or form(s) required by the Exchange and complying 
with other conditions.
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    \3\ See Securities Exchange Act Release No. 56274 (August 16, 
2007), 72 FR 48720 (August 24, 2007) (SR-Phlx-2007-54).
    \4\ The term ``Eligible MAP'' is defined in current footnote 
4(b) of the Market Access Provider Subsidy section of the Exchange's 
fee schedule (the instant proposal would re-number that footnote to 
5(b)).
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The Proposal

    The proposal would provide an incentive for Eligible MAPs to market 
the Exchange as a destination for orders routed by the MAP. 
Specifically, the Exchange would pay a MAP Marketing Subsidy of 
$25,000.00 per month, for a maximum of three months (totaling 
$75,000.00), to Eligible MAPs, in addition to the current per-contract 
Subsidy.
    The MAP Marketing Subsidy is intended to be used by the Eligible 
MAP to: (i) Promote the Subsidy program; (ii) provide technical 
assistance and information to its customers on the equity options order 
routing functionality that pertains to the Subsidy program; and (iii) 
analyze the volume based usage of such order routing functionality by 
the Eligible MAP and its customers, in each case with a view towards 
the successful launch of the Eligible MAP's participation in the 
Subsidy for Eligible MAPs.
    The maximum aggregate Marketing Subsidy that an Eligible MAP would 
be entitled to receive is $75,000 (i.e., 3 monthly payments). The 
Exchange's obligation to pay this Marketing Subsidy will be conditioned 
upon (a) execution by the Eligible MAP of an agreement to function as a 
MAP with the Exchange and compliance in all respects with the 
requirements specified therein, and (b) continued participation of the 
Eligible MAP in the Subsidy program, including compliance in all 
respects with the requirements of the program.
    The Exchange believes that the MAP Marketing Subsidy should assist 
MAPs in their marketing efforts to route order flow to the Exchange, 
which should, in turn, encourage more options order flow to the 
Exchange.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with section 
6(b) of the Act \5\ in general, and furthers the objectives of section 
6(b)(5) of the Act \6\ in particular, in that it is designed 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 
by enhancing the Exchange's competitive position by providing the MAP 
Marketing Subsidy to Eligible MAPs and increasing order flow to the 
Exchange.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
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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.

[[Page 63217]]

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.

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

    The foregoing proposed rule change has become effective upon filing 
with the Commission pursuant to section 19(b)(3)(A)(ii) of the Act \7\ 
and Rule 19b-4(f)(2) thereunder,\8\ in that the proposed rule change 
establishes or changes a member due, fee, or other charge imposed by 
the self-regulatory organization. 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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    \7\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \8\ 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-2007-82 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-2007-82. 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 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-2007-82 and should be 
submitted on or before November 29, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-21879 Filed 11-7-07; 8:45 am]

BILLING CODE 8011-01-P