[Federal Register Volume 71, Number 239 (Wednesday, December 13, 2006)]
[Notices]
[Pages 74962-74964]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-21161]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54885; File No. SR-Amex-2006-105]


Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing of a Proposed Rule Change Relating to Fees for the 
Routing of Orders to Other Market Centers Through a Private Linkage

December 6, 2006.
    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 November 30, 2006, the American Stock Exchange LLC (``Amex'' or 
``Exchange'') filed with

[[Page 74963]]

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. The Exchange has 
designated this proposal as one establishing or changing a due, fee, or 
other charge imposed by a self-regulatory organization pursuant to 
Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2) 
thereunder,\4\ which renders the proposal 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)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to revise the equities and Exchange Traded 
Fund Shares (``ETFs'') Fee Schedules to provide for various fees 
related to the routing of orders to other market centers through a 
private linkage.
    The text of the proposed rule change is available on the Exchange's 
Web site (http://www.amex.com), at the Exchange's Office of the 
Secretary, 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, 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 Exchange proposes to establish fees for the routing of orders 
between market centers using its ``private linkage.'' Private linkages 
are broker-dealer members of other market centers trading Amex-listed 
equities and ETFs through which Amex will route orders to access 
protected quotes (i.e., quotes being disseminated by an ``automated 
trading center'' \5\) when those quotes are better than those available 
at Amex. Use of a private linkage will begin with the implementation of 
the Exchange's new hybrid market trading platform (known as ``AEMI''). 
The AEMI trading platform will become operative prior to the final date 
set by the Commission for full operation of all automated trading 
centers that intend to qualify their quotations for trade-through 
protection under Rule 611 of Regulation NMS (the date known as the 
``Trading Phase Date''). The Exchange has adopted rules for the use of 
AEMI prior to the Regulation NMS Trading Phase Date \6\ and has 
obtained exemptive relief \7\ from its obligation to use the ITS 
electronic communications network to route orders to other markets and 
use the private linkage instead. Amex will incur charges for routing 
orders to other market centers through the private linkage and proposes 
to pass some of those charges on to its members. The charges to be 
passed on include clearing and market access charges.
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    \5\ The terms ``automated trading center'' and ``protected 
quotation'' are defined in Rule 600(b) of Regulation NMS, 17 CFR 
242.600(b).
    \6\ See Securities Exchange Act Release No. 54709 (November 3, 
2006), 71 FR 65847 (November 9, 2006) (order approving SR-Amex 2006-
72).
    \7\ See Letter to Claire P. McGrath, Senior Vice President and 
General Counsel, Amex, from David S. Shillman, Associate Director, 
Division of Market Regulation, Commission, dated November 3, 2006.
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    Amex has entered into a contract with a broker-dealer and a 
clearing firm to route orders to other market centers and to clear the 
resulting executions. The contract provides that clearing charges will 
be assessed monthly based on the average size of the order routed to 
the other market centers. The average size of the order ticket routed 
to the other market centers is based on the total volume of shares 
routed on behalf of Amex each trading day divided by the number of 
order tickets routed that resulted in an execution. For example, if 100 
order tickets representing 100,000 shares are routed on behalf of Amex 
on a given day resulting in 80 executions, the clearing fee charged per 
share, as set forth on the following chart, would be $0.0005 (100,000 / 
80 = 1,250, the average order ticket size) resulting in a total 
clearing fee of $50 incurred by Amex for that trading day:

------------------------------------------------------------------------
                                                               Clearing
           Average size of outbound order tickets             price per
                                                                share
------------------------------------------------------------------------
> = 0-150..................................................       $0.001
> = 150 and < 300..........................................       0.0008
> = 300 and < 500..........................................       0.0007
> = 500 and < 750..........................................       0.0006
> = 750 and < 1500.........................................       0.0005
> = 1500 and < 2500........................................       0.0004
> = 2500 and < 6000........................................       0.0003
> = 6000...................................................     0.000275
------------------------------------------------------------------------

    The clearing charge of $50 would be divided among the orders 
executed that trading day based upon the number of shares executed. 
Thus, for example, on that trading day a member submitted two orders--
one order for 100 shares and one order for 1,000 shares. Both orders 
were executed in full through the private linkage. The clearing charges 
assessed to the member for the 100 share order would be $0.05 (100 x 
$0.0005) and the clearing charge assessed to the member for the 1,000 
share order would be $0.50 (1,000 x $0.0005). Amex would accumulate the 
daily clearing charges and bill members monthly the daily accumulated 
charges.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the Act 
\8\ in general and furthers the objectives of Section 6(b)(4) of the 
Act \9\ in particular in that it is intended to assure the equitable 
allocation of reasonable dues, fees, and other charges among its 
members and issuers and other persons using its facilities. 
Specifically, the Exchange is proposing to pass through clearing 
charges it has incurred for orders routed to other market centers 
through the Exchange's private linkage.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that the proposed rule change does not 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

    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)(ii) of the Act \10\ and paragraph (f)(2) of Rule 
19b-4 thereunder,\11\ because it establishes or

[[Page 74964]]

changes a due, fee, or other charge imposed by the Exchange. 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.
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    \10\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \11\ 17 CFR 240.19b-4(f)(2).
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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 (http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to [email protected]. Please include 
File Number SR-Amex-2006-105 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-2006-105. 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 Number SR-Amex-2006-105 and should be submitted on or before 
January 3, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E6-21161 Filed 12-12-06; 8:45 am]
BILLING CODE 8011-01-P