Document ID: SEC-2007-1551-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Philadelphia Stock Exchange, Inc.
Posted Date: 2007-11-15T05:00Z

[Federal Register: November 15, 2007 (Volume 72, Number 220)]
[Notices]               
[Page 64266-64268]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15no07-114]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56750; File No. SR-Phlx-2007-85]

 
lf-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
Amending Phlx Rule 607

November 6, 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 November 1, 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 and 
II below, which Items have been substantially prepared by the Exchange. 
The Exchange filed the proposal pursuant to Section 19(b)(3)(A) of the 
Act \3\ and Rule 19b-4(f)(6) 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).
    \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

    Phlx proposes to amend Phlx Rule 607 to remove language regarding 
the NMS Linkage Plan (``Plan''). The Plan was utilized by certain 
exchanges, including Phlx, for the purpose of routing and receiving 
orders in NMS Stocks. The Plan ended by its own terms on June 30, 
2007.\5\
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    \5\ See Securities Exchange Act No. 54551 (September 29, 2006), 
71 FR 59148 (October 6, 2006).
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    The text of the proposed rule change is available at Phlx, the 
Commission's Public Reference Room, and http://www.phlx.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. 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 update Phlx Rule 607 
to reflect the termination of the Plan. Phlx Rule 607 permits Phlx to 
collect the Covered Sale Fee \6\ from its members and member 
organizations. In order to facilitate the collection of the Covered

[[Page 64267]]

Sale Fee, Phlx amended Phlx Rule 607 to permit the Exchange to enter 
into agreements with other exchanges and with Participants in NASD's 
(n/k/a FINRA) Alternative Display Facility (``ADF Participant'') to 
pass the Covered Sale Fee among the applicable exchanges or ADF 
Participants where the Exchange has collected the Covered Sale Fee from 
its members and member organizations for sale transactions executed on 
another exchange or ADF Participant through the Plan and when other 
exchanges or ADF Participants have collected the Covered Sale Fee from 
their members for sale transactions executed on the Exchange through 
the Plan.\7\
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    \6\ Under Section 31 of the Act, the Exchange must pay certain 
fees to the Commission. To help fund the Exchange's obligations to 
the Commission under Section 31, a Covered Sale Fee is assessed by 
the Exchange on members and member organizations.
    \7\ See Securities Exchange Act Release No. 54555 (October 2, 
2006), 71 FR 59577 (October 10, 2006).
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    With the termination of the Plan, the agreements with the other 
exchanges and the ADF Participants are no longer needed.\8\ When the 
Plan began, certain exchanges and ADF Participants were unable to 
supply clearing or member information on orders routed through the Plan 
to other markets and therefore routed orders directly through the Plan 
without identifying a member or subscriber of the destination 
market.\9\ Because no member or subscriber of the destination market 
was involved in the transaction, there was no mechanism for the 
destination market to collect the Covered Sale Fee. The agreements 
provided for in Phlx Rule 607 permitted destination markets to collect 
the Covered Sale Fee for orders routed through the Plan that did not 
involve members or subscribers of the destination market. Now that the 
Plan has terminated, all access to the destination market is provided 
through members or subscribers, which are subject to the fees charged 
pursuant to rule or subscriber agreement.
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    \8\ See Securities Exchange Act Release Nos. 56361 (September 6, 
2007), 72 FR 52192 (September 12, 2007) (SR-Phlx-2007-66, deleting 
references to the Plan in the XLE Fee Schedule); 55569 (April 2, 
2007), 72 FR 17978 (April 10, 2007) (SR-Phlx-2007-31, deleting 
references to the Intermarket Trading System (``ITS'') Plan in Phlx 
Rule 607, when the ITS Plan terminated.)
    \9\ See Securities Exchange Act Release No. 54548 (September 29, 
2006), 71 FR 59159 (October 6, 2006) (footnote 6).
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    Therefore, Phlx proposes to delete that section of Phlx Rule 607 
referring to agreements with other exchanges and ADF Participants. Phlx 
does not intend this deletion to affect any rights or obligations that 
have accrued to any party up to this point in time pursuant to any such 
agreements.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act \10\ in general and furthers the 
objectives of Section 6(b)(5) \11\ in particular, in that it is 
designed to prevent fraudulent and manipulative acts and practices, 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.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 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 would 
result in 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

    Written comments were neither solicited nor received.

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

    Because the foregoing proposed rule change does not:
    (i) Significantly affect the protection of investors or the public 
interest;
    (ii) Impose any significant burden on competition; and
    (iii) Become operative for 30 days from the date on which it was 
filed, or such shorter time as the Commission may designate, if 
consistent with the protection of investors and the public interest, it 
has become effective pursuant to Section 19(b)(3)(A) of the Act \12\ 
and Rule 19b-4(f)(6) thereunder.\13\ As required under Rule 19b-
4(f)(6)(iii) under the Act,\14\ the Exchange provided the Commission 
with 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 the filing of the 
proposed rule change.
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 17 CFR 240.19b-4(f)(6)(iii).
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    A proposed rule change filed under 19b-4(f)(6) normally may not 
become operative prior to 30 days after the date of filing.\15\ 
However, Rule 19b-4(f)(6)(iii) \16\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. The Exchange has requested that the 
Commission waive the 30-day operative delay and render the proposed 
rule change operative immediately. The Commission believes that waiving 
the 30-day operative delay is consistent with the protection of 
investors and the public interest. Waiver of the 30-day operative delay 
would enable the Exchange to delete language in Phlx Rule 607 that is 
no longer needed due to the termination of the Plan as quickly as 
possible and prevent any potential confusion as to the applicability of 
this language. For the reasons stated above, the Commission therefore 
designates the proposal to become operative immediately.\17\
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    \15\ Id.
    \16\ Id.
    \17\ For purposes of waiving the operative date of this proposal 
only, the Commission has considered the impact of the proposed rule 
on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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    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.

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-2007-85 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-2007-85. 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

[[Page 64268]]

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 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-2007-85 and should be submitted on or before December 6, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-22293 Filed 11-14-07; 8:45 am]

BILLING CODE 8011-01-P