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56396 Federal Register / Vol. 72, No.

191 / Wednesday, October 3, 2007 / Notices

4. Applicants state that the New For the Commission, by the Division of disseminated press releases and on
Funds will operate in a manner Investment Management, pursuant to ConnectAJet’s Web site about, among
identical to the Initial Funds that were delegated authority. other things, the existence of the
the subject of the Prior Order, and be Florence E. Harmon, company’s partnerships and affiliations
offered pursuant to the same terms and Deputy Secretary. with aviation companies.
conditions of the Prior Order, except as [FR Doc. E7–19538 Filed 10–2–07; 8:45 am] ConnectAJet was quoted on the Pink
modified by this application. No entity BILLING CODE 8011–01–P Sheet under the ticker symbol CAJT.
that creates, compiles, sponsors, or Recently, there have been
maintains an Underlying Index (the advertisements in newspapers and on
‘‘Underlying Index Provider’’) is or will SECURITIES AND EXCHANGE television, information mailers, spam e-
be an affiliated person, as defined in COMMISSION mails and a blast fax touting the
section 2(a)(3) of the Act, or an affiliated company’s shares.
[File No. 500–1]
person of an affiliated person, of the The Commission is of the opinion that
Trust, a promoter, the Adviser, any Sub- In the Matter of China Expert the public interest and the protection of
Adviser, or the Distributor. Applicants Technology, Inc.; Order of Suspension investors require a suspension of trading
believe that the requested relief of Trading in the securities of the above-listed
continues to meet the necessary company.
exemptive standards. October 1, 2007.
It appears to the Securities and Therefore, it is ordered, pursuant to
Future Relief section 12(k) of the Securities Exchange
Exchange Commission that there is a
1. Applicants seek to amend the Prior lack of current and accurate information Act of 1934, that trading in the above-
Order to modify the terms under which concerning the securities of China listed company is suspended for the
the Trust may offer Future Funds. The Expert Technology, Inc. (‘‘China period from 9:30 a.m. EDT, October 1,
Prior Order is currently subject to a Expert’’) because of questions regarding 2007 through 11:59 p.m. EDT, on
condition that does not permit relief for the adequacy and accuracy of publicly- October 12, 2007.
Future Funds unless applicants request disseminated information concerning, By the Commission.
and receive with respect to such Future among other things, China Expert’s: (1) J. Lynn Taylor,
Fund, either exemptive relief from the Financial performance and business Assistant Secretary.
Commission or a no-action letter from prospects and (2) current financial [FR Doc. 07–4916 Filed 10–1–07; 11:45 am]
the Division of Investment Management condition. BILLING CODE 8011–01–P
of the Commission. The Commission is of the opinion that
2. The order would amend the Prior the public interest and the protection of
Order to delete this condition. Any investors require a suspension of trading SECURITIES AND EXCHANGE
Future Fund will: (a) Be advised by the in the securities of the above-listed COMMISSION
Adviser, or an entity controlled by or company.
under common control with the Therefore, it is ordered, pursuant to
Adviser; (b) use an Underlying Index [Release No. 34–56567; File No. SR–Amex–
section 12(k) of the Securities Exchange 2007–96]
where the Underlying Index Provider is Act of 1934, that trading in the above-
not an affiliated person, as defined in listed company is suspended for the Self-Regulatory Organizations;
section 2(a)(3) of the Act, or an affiliated period from 9:30 a.m. EDT, October 1, American Stock Exchange LLC; Order
person of an affiliated person, of the 2007 through 11:59 p.m. EDT, on Granting Accelerated Approval to a
Trust, a promoter, the Adviser, any Sub- October 12, 2007. Proposed Rule Change, as Modified by
Adviser, or the Distributor; and (c) Amendment No. 1, Relating to an
By the Commission.
comply with the terms and conditions Extension and Expansion of the
of the Prior Order, as amended by the Nancy M. Morris,
Secretary. Options Quoting Pilot Program
present application.
3. Applicants believe that the [FR Doc. 07–4915 Filed 10–1–07; 11:45 am] September 27, 2007.
modification of the future relief BILLING CODE 8011–01–P
available under the Prior Order would I. Introduction
be consistent with sections 6(c) and On August 21, 2007, the American
17(b) of the Act. Applicants believe that SECURITIES AND EXCHANGE Stock Exchange LLC (‘‘Amex’’ or
granting the requested relief will COMMISSION ‘‘Exchange’’) filed with the Securities
facilitate the timely creation of Future [File No. 500–1] and Exchange Commission
Funds and the commencement of (‘‘Commission’’), pursuant to section
secondary market trading of such Future In the Matter of ConnectAJet.com, Inc.; 19(b)(1) of the Securities Exchange Act
Funds by removing the need to seek Order of Suspension of Trading of 1934 (‘‘Act’’),1 and Rule 19b–4
additional exemptive relief. Applicants thereunder,2 a proposed rule change to
submit that the terms and conditions of October 1, 2007. extend and expand a pilot program to
the Prior Order were appropriate for the It appears to the Securities and quote certain options in smaller
Initial Funds and would remain Exchange Commission that the market increments (‘‘Pilot Program’’ or ‘‘Pilot’’).
appropriate for Future Funds. for the securities of ConnectAJet.com, The proposed rule change was
Inc. (‘‘ConnectAJet’’) may be reacting to published for comment in the Federal
Applicants’ Condition manipulative forces or deceptive Register on August 29, 2007.3 The
Applicants agree that any amended practices and that there is a lack of Commission received one comment
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order granting the requested relief will current and accurate information about
be subject to the same conditions as ConnectAJet upon which an informed 1 15 U.S.C. 78s(b)(1).
those imposed by the Prior Order, investment decision can be made. It also 2 17 CFR 240.19b–4.
except for condition 1 to the Prior appears that there may be inaccurate 3 See Securities Exchange Act Release No. 56307

Order, which will be deleted. assertions by ConnectAJet in publicly- (August 22, 2007), 72 FR 49750 (‘‘Amex Notice’’).

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Federal Register / Vol. 72, No. 191 / Wednesday, October 3, 2007 / Notices 56397

letter on the proposed rule change.4 On Amazon.com Inc. (AMZN); Motorola consistent with section 6(b)(5) of the
September 27, 2007, the Exchange filed Inc. (MOT); Research in Motion Ltd. Act,11 which requires, among other
Amendment No. 1 to the proposed rule (RIMM); Freeport-McMoRan Copper & things, that the rules of an exchange be
change.5 This order approves the Gold Inc. (FCX); ConocoPhillips (COP); designed to promote just and equitable
proposed rule change as modified by and Bristol-Myers Squibb Co. (BMY). principles of trade, to remove
Amendment No. 1 on an accelerated These twenty-two options classes are impediments to and perfect the
basis. among the most actively-traded, mechanism of a free and open market
multiply-listed options classes, and and a national market system, and, in
II. Description of the Proposal
account, together with the current general, to protect investors and the
Currently, the six options exchanges, thirteen Pilot classes, for approximately public interest.
including the Amex, participate in the 35% of total industry trading volume.8 On June 28, 2005, the Pacific
thirteen class Pilot Program,6 which is Phase Two will begin on March 28, Exchange (now known as NYSE Arca)
scheduled to expire on September 27, 2008, and will continue for one year, announced its intention to begin
2007.7 The Exchange proposes to extend until March 27, 2009. During the second quoting and trading all listed options in
and expand the Pilot Program to include phase, the number of options classes penny increments.12 In June 2006, to
fifty additional classes, in two phases. trading in pennies will again increase. facilitate the orderly transition to
Phase One will begin on September The Exchange proposes to add twenty- quoting a limited number of options in
28, 2007 and will continue for six eight more classes from among the most penny increments, Chairman Cox sent a
months, until March 27, 2008. Phase actively-traded, multiply-listed options letter to the six options exchanges
One will add the following twenty-two classes.9 urging the exchanges that chose to begin
options classes to the Pilot: SPDRs The minimum price variation for all quoting in smaller increments to plan
(SPY); Apple, Inc. (AAPL); Altria Group classes to be included in the Pilot for the implementation of a limited
Inc. (MO); Dendreon Corp. (DNDN); Program, except for the QQQQs, will penny pilot program to commence in
Amgen Inc. (AMGN); Yahoo! Inc. continue to be $0.01 for all quotations January 2007.13 All six of the options
(YHOO); QUALCOMM Inc. (QCOM); in option series that are quoted at less exchanges submitted proposals to
General Motors Corporation (GM); than $3 per contract and $0.05 for all permit quoting a limited number of
Energy Select Sector (XLE); DIAMONDS quotations in option series that are classes in smaller increments, and, in
Trust, Series 1 (DIA); Oil Services quoted at $3 per contract or greater. The January 2007, the Commission approved
HOLDRs (OIH); NYSE Euronext, Inc. QQQQs will continue to be quoted in those proposals to implement the
(NYX); Cisco Systems, Inc. (CSCO); $0.01 increments for all options series. current Pilot Program.14 The exchanges
Financial Select Sector SPDR (XLF); During the extended and expanded have now submitted proposals to extend
AT&T Inc. (T); Citigroup Inc. (C); Pilot Program, the Amex commits to and further expand the Pilot.
deliver four reports to the Commission. The continued operation and phased
4 See letter to Nancy Morris, Secretary, Each report will analyze the impact of expansion of the Pilot Program will
Commission, from John C. Nagel, Director & penny pricing on market quality and provide further valuable information to
Associate General Counsel, Citadel, dated options system capacity. The first report
September 12, 2007 (‘‘Citadel Letter’’). the exchanges, the Commission, and
5 In Partial Amendment No. 1, Amex made non- will analyze the penny pilot results others about the impact of penny
substantive modifications to the description of the from May 1, 2007 through September quoting in the options market. In
proposal and text of the proposed information 27, 2007; the second will analyze the particular, extending and expanding the
circular. The notice of Amex’s proposal that was results from September 28, 2007
published for comment reflected all of these
Pilot Program as proposed by the Amex
changes, except two technical amendments to the
through January 31, 2008; the third will will allow further analysis of the impact
proposed information circular to: (1) Include a analyze the results from February 1, of penny quoting in the Pilot classes
reference to QQQQ, which was inadvertently left 2008 through July 31, 2008; and the over a longer period of time on, among
out, in the list of the thirteen existing Pilot classes; fourth and final report will examine the
and (2) change the ticker symbol for Sun
other things: (1) Spreads; (2) peak quote
Microsystems. See Amex Notice, supra note 3, at
results from August 1, 2008 through rates; (3) quote message traffic; (4)
note 3 (noting that the proposed rule change January 31, 2009. These reports will be displayed size; (5) ‘‘depth of book’’
submitted by the Exchange contained non- provided to the Commission within liquidity; and (6) market structure.
substantive errors which, for purposes of the notice, thirty days of the conclusion of the Amex has committed to provide the
were corrected and further noting that the Exchange reporting period.
would address those errors in an amendment Commission with periodic reports,
following publication of the notice). The III. Discussion which will analyze the impact of the
amendments not included in the notice of Amex’s expanded Pilot Program. The
proposal published for comment are technical in After careful review of the proposal Commission expects the Exchange to
nature and therefore are not subject to notice and and the comment letter, the Commission
comment. finds that the proposed rule change is
6 The thirteen option classes currently in the Pilot 11 15 U.S.C. 78f(b)(5).
are: Ishares Russell 2000 (IWM); NASDAQ–100
consistent with the requirements of the 12 PCX News Release, ‘‘Pacific Exchange to Trade
Index Tracking Stock (QQQQ); SemiConductor Act and the rules and regulations Options in Pennies,’’ June 28, 2005.
Holders Trust (SMH); General Electric Company thereunder applicable to a national 13 Commission Press Release 2006–91, ‘‘SEC

(GE); Advanced Micro Devices, Inc. (AMD), securities exchange.10 In particular, the Chairman Cox Urges Options Exchanges to Start
Microsoft Corporation (MSFT); Intel Corporation Limited Penny Quoting,’’ June 7, 2006.
(INTC); Caterpillar, Inc. (CAT); Whole Foods
Commission finds that the proposal is 14 See Securities Exchange Act Release Nos.
Market, Inc. (WFMI); Texas Instruments, Inc. (TXN); 55162 (January 24, 2007), 72 FR 4738 (February 1,
8 This volume is based on the Options Clearing
Flextronics International Ltd. (FLEX); Sun 2007) (Amex–2006–106); 55155 (January 23, 2007),
Microsystems, Inc. (JAVA); and Agilent Corporation (‘‘OCC’’) year-to-date trading volume 72 FR 4741 (February 1, 2007) (SR–BSE–2006–49);
Technologies, Inc. (A). data through July 16, 2007. 55154 (January 23, 2007), 72 FR 4743 (February 1,
7 The Pilot Program began on January 26, 2007 9 The Exchange has committed to file a proposed
2007) (SR–CBOE–2006–92); 55161 (January 24,
rule change under section 19(b)(3)(A) of the Act to
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and is currently set to expire on September 27, 2007), 72 FR 4754 (February 1, 2007) (SR–ISE–
2007. See Securities Exchange Act Release No. identify the options classes to be included in the 2006–62); 55156 (January 23, 2007), 72 FR 4759
56159 (July 27, 2007), 72 FR 43300 (August 3, 2007) second expansion. (February 1, 2007) (SR–NYSEArca–2006–73); and
(SR–Amex–2007–76). See also Securities Exchange 10 In approving this proposed rule change, the 55153 (January 23, 2007), 72 FR 4553 (January 31,
Act Release No. 55162 (January 24, 2007), 72 FR Commission has considered the proposed rule’s 2007) (SR–Phlx–2006–74). As noted above, supra
4738 (February 1, 2007) (SR–Amex–2006–106) impact on efficiency, competition, and capital note 7 and accompanying text, the current Pilot is
(‘‘Original Pilot Program Approval Order’’). formation. See 15 U.S.C. 78c(f). scheduled to expire on September 27, 2007.

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56398 Federal Register / Vol. 72, No. 191 / Wednesday, October 3, 2007 / Notices

include statistical information relating Overall trading activity in the options trading volume of all other classes (Pilot
to these factors in its periodic reports. markets is very concentrated, with and non-Pilot) falls from 83.9% in the
An analysis of the current Pilot shows relatively few options classes pre-Pilot period to 78.3% in the post-
that the reduction in the minimum accounting for a significant share of Pilot period. Using the commenter’s
quoting increment has resulted in total options volume. Amex’s proposal, numerical approach, the relative market
narrowing the average quoted spreads in which will expand the Pilot to include share of SPX, SPY, QQQ, and IWM
all classes in the Pilot.15 A reduction in a limited number of options from among increased by 34.8% ((21.7%/16.1%)–;1).
quoted spreads means that customers the most actively-traded classes (based In contrast, the relative trading volume
and other market participants may be on average trading volume), will of all other classes fell by 6.7% (78.3/
able to trade options at better prices. provide an opportunity for reduced 83.9%)–1) in the post-Pilot period
The reduction in spreads also has led spreads where the greatest amount of compared to the pre-Pilot period. Thus,
the exchanges to reduce or eliminate trading occurs, thus maximizing the in addition to the random variation in
their exchange-sponsored payment-for- economic benefit of the Pilot while relative trading volume that occurs over
order-flow programs.16 The Commission minimizing the impact of increased time, there was an overall decline in the
believes that the proposed rule change quote traffic. relative trading volume of issues outside
is designed to continue the narrowing of The commenter suggests that relative the four largest index and ETF options,
spreads. trading volume is the measure that although their actual aggregate volume
The Commission notes that, as should be used to assess the success of levels increased.
anticipated, the Pilot has contributed to quoting in smaller increments.18 The More specifically, for the 100 and 500
the increase in quotation message traffic commenter reported the percentage most active classes,21 relative trading
from the options markets. However, change in the relative trading volume volume fell for 63% and 56%,
while the increase in quotation message before and after the Pilot for each of the respectively, of non-Pilot classes. In the
traffic is appreciable, it has been thirteen classes.19 The commenter’s data Pilot classes, seven, or 54%, of the
manageable by the exchanges and the shows an increase in relative trading thirteen Pilot classes had a decline in
Options Price Reporting Authority, and volume for QQQQ, IWM, SHM, AMD, market share and seven, or 70%, of the
the Commission did not receive any and SUNW, and a decrease in relative ten single stock option classes had a
reports of disruptions in the trading volume for MSFT, INTC, GE, decline in relative trading volume.22
dissemination of pricing information as TXN, A, CAT, WFMI and FLEX. The The Commission does not believe that
a result of quote capacity restraints. commenter believes the data shows that the data at this time supports the
Although the Commission anticipates the Pilot works well for index and sector conclusion that a decrease in relative
that the proposed expansion of the Pilot products, but smaller increments caused trading volume in the Pilot classes is
Program may contribute to further a decline in the relative trading volume due to a reduction of the minimum
increases in quote message traffic, the for single stock options. The commenter quoting variation. In fact, the data
Commission believes that Amex’s argues that much of the decrease in demonstrates that declines in relative
proposal is sufficiently limited such that relative trading volume in Pilot classes trading volume were not limited to
it is unlikely to increase quote message is a symptom of the decrease in stocks included in the Pilot, and
traffic beyond the capacity of market displayed size available for those substantial declines in relative trading
participants’ systems and disrupt the classes. On the basis of a decline in the volume, as defined by the commenter,
timely receipt of quote information. The relative trading volume, the commenter describe a large portion of classes that
Commission also notes that Amex has argues that single stock option classes were not in the Pilot. Therefore, based
adopted and will continue to utilize should be removed from the Pilot and on the data reviewed to date, the
quote mitigation strategies that should replaced with liquid index or sector Commission cannot conclude that the
mitigate the expected increase in quote option classes. Pilot has had an adverse impact on
traffic.17 Much of the recent growth in options volume in the Pilot securities.
volume has been in the large index and Therefore, the Commission believes that
15 See Amex, Penny Quoting Pilot Program
ETF products, such as the SPX, SPY, Amex’s proposal to select additional
Report, June 8, 2007 (‘‘Amex Report’’). See also Box, and the QQQQ. As their relative trading
Penny Pilot Data Review, June 18, 2007 (‘‘Box classes from among the most actively-
Report’’); CBOE, Penny Pilot Report, June 1, 2007 volume increases, the aggregate relative traded options has a reasonable basis
(‘‘CBOE Report’’); ISE, Penny Pilot Analysis, May trading volume of other products and is consistent with the Act.23
23, 2007 (‘‘ISE Report’’); NYSE Arca Options, necessarily declines (although actual
Understanding Economic and Capacity Impacts of The Commission believes that the
the Penny Pilot, May 31, 2007 (‘‘NYSE Arca volume levels may increase). For impact of smaller increments on trading
Report’’); and Phlx, Options Penny Pricing Pilot example, the SPX, SPY, QQQQ, and
Report, May 31, 2007 (‘‘Phlx Report’’). IWM accounted for 16.1% of total (February 9, 2007–June 30, 2007). The two-week
16 See Securities Exchange Act Release Nos.
options volume in the four months period when the Pilot classes were introduced are
55328 (February 21, 2007), 72 FR 9050 (February excluded from the analysis.
28, 2007) (SR–Amex–2007–16); 55197 (January 30, before the pilot and rose to 21.7% of
21 All of the thirteen Pilot classes fall into the 500
2007), 72 FR 5772 (February 7, 2007) (SR–BSE– volume in the five months after the
most actively-traded, and nine are within the 100
2007–02); 55265 (February 9, 2007), 72 FR 7697 pilot.20 By definition, the relative most actively-traded group.
(February 16, 2007) (SR–CBOE–2007–11); 55271 22 The change in relative trading volume for the
(February 12, 2007), 72 FR 7699 (February 16, 2007) 18 See
(SR–ISE–2007–08); 55223 (February 1, 2007) 72 FR Citadel Letter, supra note 4. median stock for the top 500 (100) classes is ¥8%
19 The commenter measures the relative trading (¥13%), compared to a change of ¥3% for the
6306 (February 9, 2007) (SR–NYSEArca–2007–07);
and 55290 (February 13, 2007), 72 FR 8051 volume of a class as that class’ trading volume as thirteen Pilot stocks and a change of ¥24% for the
(February 22, 2007) (SR–Phlx–2007–05). a percentage of total OCC volume. The change in ten single stock options. The Commission notes
17 See Securities Exchange Act Release No. 55162 relative trading volume is the relative trading that, with a Pilot sample size of thirteen or ten,
(January 24, 2007), 72 FR 4738 FR (February 1, volume from date of entrance into the Pilot to these statistics will be highly sensitive to the
August 27, 2007 divided by the relative trading performance of one or two classes.
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2007) (SR–Amex–2006–106). In its filing, Amex


proposes to extend the effectiveness of its quote volume from November 1, 2006 through entrance in 23 The Commission notes that the classes the

mitigation strategies through March 27, 2009. the Pilot. commenter specifically recommends for inclusion
20 The pre-Pilot period consists of the four in the expanded Pilot—SPY, DIA, OIH, XLF, and
Further, the Commission notes that the other
options exchanges participating in the Pilot also months before the Pilot commenced (October 1– XLE—are among classes proposed by Amex to be
have adopted and will continue to utilize quote January 25, 2007) and the post-Pilot period consists included in the Pilot Program beginning September
mitigation strategies. of the five months after the Pilot commenced 28, 2007.

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Federal Register / Vol. 72, No. 191 / Wednesday, October 3, 2007 / Notices 56399

volume is one of the more difficult The commenter further noted, to the be removed from the Pilot. Finally, to
aspects of the Pilot to assess, and notes extent that additional size may be the extent that the Exchange files a
that the exchange reports did not show available below the best bid or offer,26 proposed rule change to further expand
a clear change in trading volume.24 options market participants discount the the Pilot, the Commission urges it to
While some industry participants value of such liquidity because it is include in any such proposal a
expressed disappointment that volume generally not transparent to the market methodology for removing classes from
had not increased, the bid-ask spread is and is not easily accessible even if the Pilot.
only one factor that influences volume. displayed.27 The commenter noted that,
unlike in the equities markets, market The Commission finds good cause for
Other factors that impact option volume
participants cannot quickly sweep approving the proposed rule change, as
are trading activity in the underlying
multiple markets through multiple price amended, prior to the thirtieth day after
security and in related products,
volatility in the market and in the levels to reach such additional liquidity. publication of the notice in the Federal
underlying security, as well as firm and The Commission encourages the Register. 29 The Commission notes
market specific information and events. exchanges to consider measures that that in this filing the Amex is proposing
The Commission believes that the would facilitate access to depth of book to participate in an industry-wide
addition of more securities in the next quotes. extension and expansion of the Penny
phase will increase the sample size and Finally, the commenter recommends Pilot, which is scheduled to begin on
should help in further analysis of such removing the poorest performing single September 28, 2007. Concurrent with
issues. stock names from the Pilot and this approval, the Commission also is
replacing them with liquid index or approving proposed rule changes
The commenter also expressed sector products.28 The Commission submitted by the other five options
concern that the quoted size in the Pilot agrees that there should be a mechanism
classes is dropping to levels that are exchanges to extend and expand the
for removing option classes from the Pilot. Accelerating approval of this
‘‘sub-optimal’’ or ‘‘inadequate’’ for Pilot. The Commission specifically
institutional size orders, and filing will permit the Exchange to
requested comment in the notice of
recommended that the Commission continue its participation in the Pilot
Amex’s proposal on: (1) Whether there
carefully evaluate the impact of penny are circumstances under which classes without interruption.
quoting on liquidity before allowing the included in the Pilot should be Accordingly, the Commission finds
exchanges to expand the Pilot. The removed; (2) if so, what factors should good cause, consistent with section
Commission fully agrees that the impact be considered in making the 19(b)(2) of the Act,30 to approve the
of the Pilot on displayed size, as well as determination to remove a class from proposal, as modified by Amendment
non-displayed ‘‘depth of book,’’ and the the Pilot, specifically whether an No. 1, on an accelerated basis. For the
impact of any decreased size on market objective standard should be used or reasons discussed above, the
and execution quality, is an area that whether a more subjective analysis Commission believes that the proposed
should be carefully analyzed as the Pilot should be allowed; (3) what concerns rule change is consistent with the Act.
continues. The Commission also might arise by removing a class from the
recognizes that the exchange reports Pilot, and how could such concerns be IV. Conclusion
show there has, in fact, been a reduction ameliorated; (4) how frequently should
It is therefore ordered, pursuant to
in the displayed size available in the such an analysis be undertaken, or
section 19(b)(2) of the Act,31 that the
Pilot classes.25 The Commission is not should the evaluation be automated;
and (5) if a class is to be removed from proposed rule change (SR–Amex–2007–
at this time, however, able to conclude
that this decrease has caused a decrease the Pilot, how much notice should be 96), as modified by Amendment No. 1,
in trading volume or relative trading given to market participants that the be, and hereby is, approved on an
volume, or other harm to the market, as quoting increment will change, but did accelerated basis, for a pilot period,
a result of the Pilot Program. The not receive any comments. The which will end on March 27, 2009.
Commission does, however, expect Commission will continue to consider For the Commission, by the Division of
Amex to include in its reports an comments on how to fairly and Market Regulation, pursuant to delegated
analysis of the market impact of objectively determine if a class should authority.32
reducing the minimum price increment, Florence E. Harmon,
26 Only two exchanges provided information on
particularly on the ability of market Deputy Secretary.
‘‘depth of book’’ on their markets in the Pilot
participants to effectively execute large- classes. See NYSE Arca Report at 8–10, supra note [FR Doc. E7–19497 Filed 10–2–07; 8:45 am]
sized orders. The Commission will 15, and ISE Report, supra note 15, at 9. ISE reported
BILLING CODE 8011–01–P
analyze the information provided in the that the average total size of all quotes on its book
Exchange’s reports, in conjunction with at all price levels, weighted for volume, for all
thirteen Pilot classes was reduced by 61%. See ISE
the information provided by other Report, supra note 15, at 9. NYSE Arca compared
exchanges and market participants, to liquidity resident in its book within the legacy
inform its evaluation and consideration minimum price variation to pre-Pilot top of book
of any exchange’s proposed further liquidity and reported that volume weighted
liquidity across all thirteen Pilot classes decreased
expansion of the Pilot. 1%. See NYSE Arca Report, supra note 15, at 8.
27 The Commission notes that currently only
24 See Amex Report, supra note 15, at 6–7; CBOE NYSE Arca makes available quotes and orders on
Report, supra note 15, Attachment at pages 5–6; ISE its book below the NBBO. See http://
Report, supra note 15, at 17–20; and NYSE Arca www.nysedata.com/nysedata/
Report, supra note 15, at 15. InformationProducts/ArcaBook/tabid/293/
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29 The Commission notes that the thirtieth day


25 See Amex Report, supra note 15, at 6; BOX Default.aspx. The Commission anticipates that to after publication of notice of this filing in the
Report, supra note 15, at 2; CBOE Report, supra the extent this display of information proves to be
Federal Register is September 28, 2007.
note 15, at Attachment page 2; ISE Report, supra valuable to the options market as a whole, other
30 15 U.S.C. 78s(b)(2).
note 15, at 7–8; NYSE Arca Report, supra note 15, exchanges may choose to make this information
31 15 U.S.C. 78s(b)(2).
at 9–10; and Phlx Report, supra note 15, at 3–4 and available as well.
6–7. 28 See supra, note 23. 32 17 CFR 200.30–3(a)(12).

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