Document ID: SEC-2008-0296-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: American Stock Exchange LLC
Posted Date: 2008-02-26T05:00Z

[Federal Register: February 26, 2008 (Volume 73, Number 38)]
[Notices]               
[Page 10317-10319]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26fe08-101]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57354; File No. SR-Amex-2008-10]

 
Self-Regulatory Organizations; American Stock Exchange, LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to Rule 918-ANTE

February 19, 2008.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on February 14, 2008, the American Stock Exchange, LLC (``Amex'' 
or ``Exchange'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I and II 
below, which Items have been substantially prepared by the Exchange. 
The Amex filed this proposal pursuant to Section 19(b)(3)(A) of the 
Act,\3\ and Rule 19b-4(f)(6) thereunder,\4\ which renders the proposed 
rule change 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).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange seeks to conform Amex Rule 918--ANTE to non-ANTE Rule 
918 in connection with a recent approval to permit the sending of 
Principal Acting as Agent Orders (``P/A Orders'') through the Options 
Intermarket Linkage (the ``Linkage'') prior to the opening of 
trading.\5\
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    \5\ See Securities Exchange Act Release No. 56850 (November 27, 
2007), 72 FR 68225 (December 4, 2007) (SR-Amex-2007-123) (``Original 
Approval'').
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    The text of the proposed rule change is available at the Amex, at 
the Commission's Public Reference Room, and at http://www.amex.com.

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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Commission recently approved the Exchange's proposal to adopt 
Commentary .06 to Amex Rule 918 to implement Amendment No. 23 to 
Section 7(a)(i) of the Plan for the Purpose of Creating and Operating 
an Intermarket Options Linkage (the

[[Page 10318]]

``Linkage Plan'' or ``Plan'').\6\ Amendment No. 23, coupled with the 
related Exchange rule filing recently approved by the Commission, will 
permit the use of the Linkage prior to the opening of trading.
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    \6\ Id. See also Securities Exchange Act Release No. 56780 
(November 13, 2007), 72 FR 65113 (November 19, 2007) (File No. 4-
429).
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    The Exchange proposes to conform Amex Rule 918--ANTE to the 
recently approved Amex Rule 918 permitting the use of the Linkage prior 
to the opening of trading. The purpose of this proposal is to correct 
Amex Rule 918--ANTE which the Exchange inadvertently failed to revise 
in its prior filing to implement Amendment No. 23. In addition, because 
Amex Rule 918--ANTE (rather than Rule 918) applies to all options 
trading, the Exchange seeks to eliminate Commentary .06 to Amex Rule 
918.
    As set forth in the Original Approval, the Linkage Plan, prior to 
Amendment No. 23, did not contemplate the use of the Linkage before a 
Plan participant (a ``Participant'') opened for trading and 
disseminated a quotation in an options series. There, accordingly, was 
no trade-through protection for opening trades. As a result, if there 
was a better market away at the time a Participant opened its market, 
the Amex specialist, responsible both for the opening and for 
protecting customer orders, could not access that market for a 
customer. The customer, accordingly, could receive a price inferior to 
the national best bid and offer.
    This proposal to conform Amex Rule 918--ANTE to the recently 
approved Amex Rule 918 will permit the sending of P/A Orders prior to 
the opening, allowing the Amex specialist to access better markets on 
behalf of customers prior to the Exchange's opening in connection with 
the ANTE system. In implementing this proposed rule change, the 
Exchange will ensure that customers receive the best price for their 
orders. Under the Plan, a Participant receiving market has three (3) 
seconds to respond to a P/A Order, and the Participant receiving market 
can then reject a response it receives more than three (3) seconds 
after sending the order. In the unlikely event that the Amex opens its 
market during this three (3) second period, it is possible that the 
opening price could differ from the price of an executed P/A Order. In 
that case, the Amex will ensure that the specialist provides the 
customer with the most advantageous price. Therefore, the proposal will 
only benefit customers by providing them with potential price 
improvement at the opening.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the Act 
\7\ in general and furthers the objectives of Section 6(b)(5) of the 
Act \8\ in particular in that it is designed to prevent fraudulent and 
manipulative acts and practices, promote just and equitable principles 
of trade, remove impediments to and perfect the mechanisms of a free 
and open market and a national market system, and, in general, protect 
investors and the public interest.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    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

    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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \9\ and Rule 19b-4(f)(6) under the Act \10\ 
because: (i) It does not significantly affect the protection of 
investors or the public interest; (ii) it does not impose any 
significant burden on competition; and (iii) by its terms, it does not 
become operative for 30 days after the date of the filing, or such 
shorter time as the Commission may designate if consistent with the 
protection of investors and the public interest; provided that the 
Exchange has given the Commission written notice of its intent to file 
the proposed rule change, along with a brief description and text of 
the proposed rule change, at least five business days prior to the date 
of filing of the proposed rule change. 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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    \9\ 15 U.S.C. Section 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6).
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    The Amex has requested that the Commission waive the 30-day 
operative delay for the proposal. The Commission grants Amex's 
request.\11\ The proposed rule change would allow Amex to send P/A 
Orders through the Linkage prior to the opening of trading, which 
should facilitate access to superior prices that may be available at 
other options exchanges at the opening. Therefore, Commission believes 
that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest, because it may result 
in better-priced executions for investors. For this reason, the 
Commission designates the proposal effective and operative upon filing 
with the Commission.
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    \11\ For purposes only of waiving the operative delay of this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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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-Amex-2008-10 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-2008-10. 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

[[Page 10319]]

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 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-2008-10 and should be submitted on or before March 
18, 2008.

    For the Commission, by the Division of Trading and Markets, 
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. E8-3559 Filed 2-25-08; 8:45 am]

BILLING CODE 8011-01-P