Document ID: SEC-2007-1151-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: American Stock Exchange LLC
Posted Date: 2007-08-17T04:00Z

[Federal Register: August 17, 2007 (Volume 72, Number 159)]
[Notices]               
[Page 46253-46255]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17au07-93]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56238; File No. SR-Amex-2007-24]

 
Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing of a Proposed Rule Change and Amendment No. 1 Thereto 
to Retroactively Amend Transaction Charges for Equities, ETFs, and 
Nasdaq UTP Securities

August 10, 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 February 22, 2007, 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 substantially prepared by the 
Exchange. On August 10, 2007, the Exchange filed Amendment No. 1 to the 
proposed rule change. The Commission is publishing this notice to 
solicit comments on the proposed rule change, as amended, 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 retroactively apply the revised equities, 
Exchange Traded Funds and Trust Issued Receipts (``ETFs'') and Nasdaq 
UTP Fee Schedules (collectively, the ``Fee Schedule'') to transactions 
in equities, ETFs and Nasdaq UTP securities from January 2, 2007 
through February 21, 2007.

[[Page 46254]]

    The text of the proposed rule change is available on the Exchange's 
Web site (http://www.amex.com), at the Exchange's principal office, 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 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
    In January 2007, the Exchange adopted new transaction charges for 
its members and member organizations largely relating to the Exchange's 
new hybrid market trading platform (known as AEMI), the upcoming 
implementation of Regulation NMS, and changes in the competitive 
landscape for equities and ETFs. These new transaction charges became 
effective January 2, 2007 and will be referred to herein as the 
``January Fee Schedule''.\3\ Under the January Fee Schedule, 
transaction charges for executions in equities and ETFs were divided 
into two tiers based on the average daily volume, as reported by the 
appropriate NMS Plan in the security industry-wide.\4\ The transaction 
charges varied within each tier depending on the type of orders 
submitted for the customer account and the types of quotes and orders 
submitted for specialist and registered trader accounts. Since the 
adoption of the January Fee Schedule, the Exchange began having 
difficulty with its billing system's ability to obtain the data 
necessary to calculate an accurate bill pursuant to the January Fee 
Schedule and provide data to the clearing firms in a timely manner so 
they could accurately pass these charges on to their customers. As a 
result, in a filing submitted on February 22, 2007 in conjunction with 
this filing, the Exchange proposed to eliminate the January Fee 
Schedule and revert back to the schedule for transaction charges for 
customers\5\ in equities and ETFs in effect prior to January 2, 2007 
(referred to herein as the ``February Fee Schedule''). In addition, as 
an incentive to member firms to send order flow to the Exchange, the 
February Fee Schedule proposed a five percent discount to be applied to 
each firm's total charges for customer orders. Transaction charges for 
specialists in equities and specialists and registered traders in ETFs 
were to be made consistent across the product lines and were generally 
to be applied in the same manner as under the fee schedule in effect 
prior to the January Fee Schedule, but at a lower rate. The five 
percent discount was not applied to charges for specialists and 
registered traders. In addition, for transactions charges in Nasdaq UTP 
securities, the February Fee Schedule also reverted back to the fee 
schedule in effect prior to January 2, 2007 and applied the five 
percent discount to charges for member and non-member customer 
transactions.
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    \3\ See Securities Exchange Act Release No. 55195 (January 30, 
2007) 72 FR 5469 (February 6, 2007) (notice of filing and immediate 
effectiveness of SR-Amex-2006-117).
    \4\ Tier One pricing applied to equities and ETFs whose 
industry-wide average daily trading volume was 500,000 shares or 
greater during the previous rolling quarter. In addition, Tier One 
pricing applied to all securities traded on the Exchange pursuant to 
unlisted trading privileges (``UTP'') (including Nasdaq UTP 
securities) regardless of the their average daily trading volume. 
All new listings--including IPOs, transfers, and dual listings--were 
initially categorized as Tier One securities until the next 
quarterly recalculation. Tier Two pricing applied to all equities 
and ETFs whose industry-wide average daily trading volume was less 
than 500,000 shares during the previous rolling quarter.
    \5\ ``Customers'' are defined for purposes of the fee schedule 
to include all market participants except specialists and registered 
traders. Therefore, customer accounts include members' off-floor 
proprietary accounts and the accounts of competing market makers and 
other member and non-member broker-dealers.
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    The Exchange is now proposing that the February Fee Schedule be 
made retroactive for the period of January 2, 2007 through February 21, 
2007. As noted above, due to data issues involving its billing system, 
the Exchange has been unable to obtain the data necessary to calculate 
an accurate bill for the months of January and February 2007 or to 
provide the data necessary for the clearing firms to accurately bill 
their customers pursuant to the January Fee Schedule. In addition, 
since Exchange data indicates that a small number (less than ten) of 
the clearing members may pay a small amount more in fees based on the 
February Fee Schedule than they would have paid under the January Fee 
Schedule, the Exchange is proposing to credit the accounts of these 
clearing members in the amount of the overpayments. Thus, no clearing 
member will be disadvantaged by the retroactive application of fees.
2. Statutory Basis
    The proposed fee change is consistent with section 6(b)(4) of the 
Act \6\ regarding the equitable allocation of reasonable dues, fees, 
and other charges among exchange members and other persons using 
exchange facilities.
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    \6\ 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

    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

    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-2007-24 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary,

[[Page 46255]]

Securities and Exchange Commission, Station Place, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-Amex-2007-24. 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 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-2007-24 and should be submitted on 
or before September 7, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-16208 Filed 8-16-07; 8:45 am]

BILLING CODE 8010-01-P