Document ID: SEC-2007-0615-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: American Stock Exchange LLC
Posted Date: 2007-05-01T04:00Z

[Federal Register: May 1, 2007 (Volume 72, Number 83)]
[Notices]               
[Page 23866-23867]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01my07-102]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55663; File No. SR-Amex-2007-39]

 
Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Add Additional Exceptions to Rule 126A-AEMI Relating to the Generation 
of Intermarket Sweep Orders

April 24, 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 April 20, 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. Amex has filed this proposal pursuant to Section 19(b)(3)(A) 
of the Act \3\ and Rule 19b-4(f)(5) thereunder,\4\ which renders it 
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)(5).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Amex proposes to adopt changes to Rule 126A--AEMI in order to fully 
conform the list of circumstances described therein with additional 
exceptions (a) Listed in Rule 611(b) of Regulation NMS \5\ or (b) 
separately granted by the Commission pursuant to exemptive orders 
issued pursuant to Rule 611(d) of Regulation NMS.\6\ The following 
resultant changes to Rule 126A--AEMI are proposed: (i) Addition of the 
``stopped order'' exception specified under Rule 611(b)(9) of 
Regulation NMS; \7\ (ii) addition of an exception for ``qualified 
contingent trades''; \8\ and (iii) addition of an exception for certain 
``sub-penny trade-throughs.'' \9\
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    \5\ 17 CFR 242.611(b).
    \6\ 17 CFR 242.611(d).
    \7\ 17 CFR 242.611(b).
    \8\ See Securities Exchange Act Release No. 54389 (August 31, 
2006), 71 FR 52829 (September 7, 2006).
    \9\ See Securities Exchange Act Release No. 54678 (October 31, 
2006), 71 FR 65018 (November 6, 2006).
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    The text of the proposed rule change is available on Amex's Web 
site at 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, Amex 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. Amex 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 Exchange is currently operating, and has adopted rules in 
connection with the operation of, its new hybrid market trading 
platform for equity products and exchange traded funds, designated as 
AEMISM (the Auction and Electronic Market Integration 
platform). Rule 126A--AEMI is the Exchange's effectuation of Rule 611 
of Regulation NMS (``Order Protection Rule''), whereby trading centers 
are required to ``establish, maintain, and enforce written policies and 
procedures that are reasonably designed to prevent trade-throughs on 
that trading center of protected quotations in NMS stocks,'' subject to 
certain exceptions. Rule 126A--AEMI, in relevant part, currently 
requires AEMI to generate an intermarket sweep order to any away market 
displaying a protected quotation simultaneously with the execution of a 
transaction on the Amex that would constitute a trade-through, except 
when one or more of eight circumstances--all contemplated in Rule 611 
of Regulation NMS \10\--exist.
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    \10\ 17 CFR 242.611(b).
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    The current proposed changes are intended to expand the list of 
exceptional circumstances in Rule 126A--AEMI to include: (i) An 
additional exception from Rule 611(b)(9) of Regulation NMS \11\ 
pertaining to certain ``stopped orders'' for which the Amex had, at the 
time of receipt of the order, guaranteed an execution at no worse than 
a specified price; \12\ (ii) an additional exception for ``qualified 
contingent trades''; \13\ and (iii) an additional exception for certain 
``sub-penny trade-throughs.''\14\
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    \11\ 17 CFR 242.611(b)(9).
    \12\ Although Rule 109--AEMI prohibits granting or accepting a 
stop with respect to a security traded in AEMI, this exemption may 
still be applicable in certain situations such as error corrections.
    \13\ See Securities Exchange Act Release No. 54389 (August 31, 
2006), 71 FR 52829 (September 7, 2006).
    \14\ See Securities Exchange Act Release No. 54678 (October 31, 
2006), 71 FR 65018 (November 6, 2006).
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    The Exchange asserts that the proposal to effect the foregoing 
changes to the AEMI trading system does not significantly affect the 
protection of investors or the public interest, does not impose any 
significant burden on competition, and does not have the effect of 
limiting the access to or availability of the system.

[[Page 23867]]

2. Statutory Basis
    The proposed rule change is designed to be consistent with 
Regulation NMS, as well as consistent with Section 6(b) of the Act,\15\ 
in general, and furthers the objectives of Section 6(b)(5) 
thereunder,\16\ 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 national market system and, in 
general, to protect investors and the public interest.
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    \15\ 15 U.S.C. 78f(b).
    \16\ 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

    Because the proposed rule change does not: (1) Significantly affect 
the protection of investors or the public interest; (2) impose any 
significant burden on competition; and (3) have the effect of limiting 
the access to or availability of an existing order entry or trading 
system of the Exchange, the foregoing rule change has become effective 
immediately pursuant to Section 19(b)(3)(A)(iii) of the Act \17\ and 
Rule 19b-4(f)(5) thereunder.\18\ At any time within 60 days of the 
filing of such 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 the furtherance of the 
purposes of the Act.
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    \17\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \18\ 17 CFR 240.19b-4(f)(5).
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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 at http://www.sec.gov/rules/sro.shtml.
; or     Send an e-mail to rule-comments@sec.gov. Please include 

File No. SR-Amex-2007-39 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 No. SR-Amex-2007-39. 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. 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 No. SR-Amex-2007-39 and should be submitted on or before May 22, 
2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-8225 Filed 4-30-07; 8:45 am]

BILLING CODE 8010-01-P