[Federal Register Volume 69, Number 163 (Tuesday, August 24, 2004)]
[Notices]
[Page 52050]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-1889]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-50211; File No. 4-429]


Joint Industry Plan; Notice of Filing of Amendment No. 13 to the 
Options Intermarket Linkage Plan Regarding Natural Size

August 18, 2004.
    Pursuant to Section 11A of the Securities Exchange Act of 1934 (the 
``Act'') \1\ and Rule 11Aa3-2 thereunder,\2\ notice is hereby given 
that on May 10, 2004, May 11, 2004, June 22, 2004, July 21, 2004, 
August 12, 2004, and August 16, 2004, the International Securities 
Exchange LLC (``ISE''), Chicago Board Options Exchange, Inc. 
(``CBOE''), American Stock Exchange LLC (``Amex''), Pacific Exchange, 
Inc. (``PCX''), Philadelphia Stock Exchange, Inc. (``Phlx''), and 
Boston Stock Exchange, Inc. (``BSE'') (collectively the 
``Participants'') respectively submitted to the Securities and Exchange 
Commission (``Commission'') Amendment No. 13 to the Plan for the 
Purpose of Creating and Operating an Intermarket Options Linkage (the 
``Linkage Plan'').\3\ The amendment proposes to modify the definitions 
of Firm Customer Quote Size (``FCQS'') and Firm Principal Quote Size 
(``FPQS'').\4\ The Commission is publishing this notice to solicit 
comments from interested persons on the proposed Linkage Plan 
amendment.
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    \1\ 15 U.S.C. 78k-1.
    \2\ 17 CFR 240.11Aa3-2.
    \3\ On July 28, 2000, the Commission approved a national market 
system plan for the purpose of creating and operating an intermarket 
options market linkage proposed by the Amex, CBOE, and ISE. See 
Securities Exchange Act Release No. 43086 (July 28, 2000), 65 FR 
48023 (August 4, 2000). Subsequently, upon separate requests by the 
Phlx, PCX, and BSE, the Commission issued orders to permit these 
exchanges to participate in the Linkage Plan. See Securities 
Exchange Act Release Nos. 43573 (November 16, 2000), 65 FR 70850 
(November 28, 2000), 43574 (November 16, 2000), 65 FR 70851 
(November 28, 2000) and 49198 (February 5, 2004), 69 FR 7029 
(February 12, 2004).
    \4\ Sections 2 (11) and (12) of the Linkage Plan.
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I. Description and Purpose of the Amendment

    The Participants propose to modify the definitions of FCQS and FPQS 
to accommodate the ``natural size'' of quotations. The Linkage Plan 
currently requires that the Participants be firm for both Principal 
Acting as Agent and Principal Orders for at least 10 contracts. The 
proposed Amendment would permit exchanges to be firm for the actual 
size of their quotation, even if this amount is less than 10 contracts.
    The Participants represent that they adopted the ``10-up'' 
requirement for the Linkage Plan at a time when all the Participants 
had rules requiring that their quotations be firm for customer orders 
for at least 10 contracts. The Participants further represent that they 
either have amended, or are in the process of amending, such rules. 
Therefore, the Participants are seeking to conform the quotation 
requirements for incoming Linkage Orders to be consistent with the 
quotation requirements for other orders.
    Specifically, the proposed Amendment seeks to change to the 
definitions of both FCQS and FPQS. While the proposed Amendment would 
maintain a general requirement that the FCQS and FPQS be at least 10 
contracts, that requirement would not apply if a Participant were 
disseminating a quotation of fewer than 10 contracts. In that case, the 
Participant may establish a FCQS or FPQS equal to its disseminated 
size.
    As with Linkage orders today, if the order is of a size eligible 
for automatic execution at both the sending and receiving exchanges, 
the receiving exchange must provide an automated execution of the 
Linkage order. If this is not the case (for example, the receiving 
exchange's auto-ex system is not engaged), the receiving exchange may 
allow the order to drop to manual handling. However, the receiving 
exchange still must provide a manual execution for at least the FCQS or 
FPQS, as appropriate (in this case, the size of its disseminated 
quotation of less than 10 contracts).

II. Implementation of the Plan Amendment

    The Participants intend to make the proposed amendment to the 
Linkage Plan reflected in this filing effective when the Commission 
approves the amendment.

III. 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 [email protected]. Please include 
File Number 4-429 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., 
Washington, DC 20549-0609.
    All submissions should refer to File Number 4-429. 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 Section, 450 Fifth Street, NW., 
Washington, DC 20549. Copies of such filing also will be available for 
inspection and copying at the principal offices of the Amex, BSE, CBOE, 
ISE, PCX and 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 4-429 
and should be submitted on or before September 14, 2004.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\5\
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    \5\ 17 CFR 200.30-3(a)(29).
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J. Lynn Taylor,
Assistant Secretary.
 [FR Doc. E4-1889 Filed 8-23-04; 8:45 am]
BILLING CODE 8010-01-P