Document ID: SEC-2008-0311-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: American Stock Exchange LLC
Posted Date: 2008-02-28T05:00Z

[Federal Register: February 28, 2008 (Volume 73, Number 40)]
[Notices]               
[Page 10835-10837]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28fe08-108]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57373; File No. SR-Amex-2008-09]

 
Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change, and Amendment No. 1 Thereto, 
Relating to Options Linkage Fees

February 22, 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 8, 2008, the American Stock Exchange LLC (``Amex'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in

[[Page 10836]]

Items I, II, and III below, which Items have been substantially 
prepared by Amex. On February 19, 2008, Amex submitted 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

    Amex proposes to clarify the application of options transaction 
fees for trades executed through the intermarket options linkage (the 
``Options Linkage'') on the Exchange. The text of the proposed rule 
change is available at Amex, the Commission's Public Reference Room, 
and 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, 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Amex proposes to clarify the application of options transaction 
fees for trades executed through the Options Linkage on the Exchange. 
Currently, the Amex Options Fee Schedule (the ``Options Fee Schedule'') 
provides that, under the Linkage Fee Pilot Program that is effective 
through July 31, 2008, the fees applicable to specialists, registered 
options traders, and market maker apply to members of other options 
exchanges (``Non-Member Market Makers'') executing Linkage transactions 
except for Satisfaction Orders. As a result, the fees for Principal 
Orders (``P Orders'') and Principal Acting As Agent Orders (``P/A 
Orders'') (collectively, ``Linkage Orders'') submitted through the 
Options Linkage are: (i) $0.10 per contract side options transaction 
fee for equity options, exchange traded fund share (``ETF'') options, 
QQQQ options and trust issued receipt options; (ii) $0.21 per contract 
side options transaction fee for index options (including MNX and NDX 
options); (iii) $0.05 per contract side options comparison fee; (iv) 
$0.05 per contract side options floor brokerage fee; and (v) an options 
licensing fee for certain ETF and index option products ranging from 
$0.15 per contract side to $0.05 per contract side depending on the 
particular ETF or index option.\3\
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    \3\ See Options Fee Schedule section of the Amex Price List 
available at http://www.amex.com. See also Securities Exchange Act 
Release No. 56102 (July 19, 2007), 72 FR 40908 (July 25, 2007) (SR-
Amex-2007-64).
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    However, the Options Fee Schedule also provides that broker-dealer 
orders that are automatically executed on the Exchange are subject to 
Broker-Dealer Auto-Ex Fees (``BD Auto-Ex Fee'') that include: (i) $0.50 
per contract side options transaction fee for equity options, ETF 
options, QQQQ options and trust issued receipt options; (ii) $0.05 per 
contract side options comparison fee; and (iii) $0.05 per contract side 
options floor brokerage fee.\4\ Broker-dealer orders that are subject 
to the BD Auto-Ex Fee include specialist orders, registered options 
trader orders, Non-Member Market Maker orders, and orders for the 
account of registered broker-dealers. The Exchange charges this fee to 
member firms through customary monthly billing. The BD Auto-Ex Fee was 
implemented prior to the introduction and roll-out of the Options 
Linkage which commenced on January 31, 2003 in two phases. The entire 
roll-out of the Options Linkage was completed by July 2003.
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    \4\ See Securities Exchange Act Release No. 47216 (January 17, 
2003), 68 FR 5059 (January 31, 2003) (SR-Amex-2002-114).
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    The Exchange in this proposal seeks to clarify the Options Fee 
Schedule to make clear that automatically executed Linkage Orders will 
be charged the BD Auto-Ex Fee that includes: (i) $0.50 per contract 
side options transaction fee; (ii) $0.05 per contract side options 
comparison fee; and (iii) $0.05 per contract side options floor 
brokerage fee. Accordingly, the total transaction fee would be $0.60 
per contract side. In contrast to the initial period of time when the 
Options Linkage was introduced, most Linkage Orders on the Exchange are 
automatically executed via the ANTE platform. The Exchange acknowledges 
that the current Options Fee Schedule does not clearly reflect the fact 
that for automatically executed Linkage Orders, the BD Auto-Ex Fee 
would apply. However, a specialist or registered options trader on the 
Exchange would be subject to the BD Auto-Ex Fee in those circumstances 
that such specialist or registered options trader submitted an order 
electronically through order-entry lines, such as CMS and/or FIX, for 
automatic execution.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act \5\ in general and Section 
6(b)(4) \6\ in particular, in that it is designed to provide for the 
equitable allocation of reasonable dues, fees, and other charges among 
its members and other persons using its facilities. The Exchange 
submits that the proposal clarifies that automatically executed orders 
in ANTE, whether Linkage Orders or non-Linkage Orders on the behalf of 
broker-dealers, are subject to the BD Auto-Ex Fee set forth in the 
Options Fee Schedule. Accordingly, the Exchange asserts that the 
proposed clarification relating to Options Linkage Order transaction 
charges is an equitable allocation of reasonable fees among Exchange 
members.
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    \5\ 15 U.S.C. 78f.
    \6\ 15 U.S.C. 78f(b)(4).
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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.

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

    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

[[Page 10837]]

change, as amended, 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-2008-09 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-Amex-2008-09. 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, 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-2008-09 and should be submitted on or before March 20, 2008.

    For the Commission, by the Division of Trading and Markets, 
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. E8-3735 Filed 2-27-08; 8:45 am]

BILLING CODE 8011-01-P