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Notice

Self-Regulatory Organizations; American Stock Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to an Extension of the Linkage Fee Pilot Program

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Start Preamble July 2, 2008.

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 June 26, 2008, 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 prepared substantially by the Exchange. The Commission is Start Printed Page 39745publishing this notice to solicit comments on the proposed rule change from interested persons.

I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change

The Exchange proposes to extend for one (1) year through July 31, 2009, the current pilot program (“Pilot Program”) regarding transaction fees for trades executed through the intermarket options linkage (“Linkage”). The text of the proposed rule change is available at www.amex.com, the Exchange, and 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, 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 Statutory Basis for, the Proposed Rule Change

1. Purpose

The Amex is proposing to extend for one (1) year through July 31, 2009, the current Pilot Program establishing Exchange fees for Principal Orders (“P Orders”) and Principal Acting As Agent Orders (“P/A Orders”) submitted through the Linkage. This proposal does not make any substantive changes to the existing Pilot Program, other than to extend its operation through July 31, 2009. The fees in connection with the Pilot Program are scheduled to expire on July 31, 2008.[3]

The current fees applicable to P Orders and P/A Orders executed on the Exchange are as follows: (i) $0.10 per contract side options transaction fee for equity options, exchange traded fund share (“ETF”) options and trust issued receipt (HOLDR) options, (ii) $0.21 per contract side options transaction fee for index 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 $0.16 per contract side to $0.05 per contract side depending on the particular ETF or index option.[4] These are the same fees charged to specialists and registered option traders (“ROTs”) for transactions executed on the Exchange. The Exchange does not charge for the execution of Satisfaction Orders sent through the Linkage.

The Options Fee Schedule also provides that automatically executed Linkage Orders (except Satisfaction Orders) are subject to the “BD Auto-Ex Fee” set forth in Section VII of the Fee Schedule.[5] As a result, the Linkage Orders (except Satisfaction Orders) received by the Exchange from a non-member market maker (i.e. an away market maker) that are automatically executed are charged (i) a $0.50 per contract side options transaction fee, (ii) a $0.05 per contract side options comparison fee and (iii) a $0.05 per contract side options floor brokerage fee. Accordingly, the total transaction fee for Linkage Orders received by a non-member market maker that is automatically executed is $0.60 per contract side.[6]

As was the case in the original Pilot Program and subsequent extensions, the Exchange believes that the existing fees currently charged to Exchange specialists and ROTs should also apply to Linkage executions resulting from P/A and P Orders.

Based on experience to date, the Exchange believes that an extension of the Pilot Program for one (1) year through July 31, 2009 is appropriate.

2. Statutory Basis

The proposed fee change is consistent with Section 6(b)(4) of the Act [7] regarding the equitable allocation of reasonable dues, fees and other charges among Exchange members and other persons using Exchange facilities. The Exchange believes that an extension of the existing Linkage fee Pilot Program is consistent with Section 6(b)(4) and equitably allocates fees to those non-member market makers executing orders on the Exchange through the Linkage.

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 proposed rule change has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act [8] and Rule 19b-4(f)(6) thereunder [9] 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 filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest; provided that the self-regulatory organization has given the Commission written notice of its intent to file the proposed rule change, at least five business days prior to the date of filing of the proposed rule change.[10]

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

Paper Comments

  • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-Amex-2008-52. 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 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-2008-52 and should be submitted on or before July 31, 2008.

Start Signature

For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.[11]

Florence E. Harmon,

Acting Secretary.

End Signature End Preamble

Footnotes

3.  See Securities Exchange Act Release No. 56102 (July 19, 2007), 72 FR 40908 (July 25, 2007) (SR-Amex-2007-64).

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4.  See the Options Licensing Fee section of the Amex Options Fee Schedule available at www.amex.com.

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5.  The BD Auto-Ex Fee provides that broker-dealer orders that are automatically executed on the Exchange are subject to (i) a $0.50 per contract side options transaction fee for equity options, ETF share options, trust issued receipt (HOLDR) options and index options, (ii) $0.05 per contract side options comparison fee and (iii) $0.05 per contract side options floor brokerage fee.

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6.  See Securities Exchange Act Release No. 57589 (April 1, 2008), 73 FR 18827 (April 7, 2008) (SR-Amex-2008-09).

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8.  15 U.S.C. 78s(b)(3)(A)(iii).

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10.  The Exchange satisfied this pre-filing requirement.

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[FR Doc. E8-15638 Filed 7-9-08; 8:45 am]

BILLING CODE 8010-01-P