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parameters on the Exchange 7 and ports or lines on which they can send quoting efficiency, preserve system
efficiency of quote submission through quote blocks. The number of lines capacity, and minimize requests for
the Specialized Quote Feed (‘‘SQF’’), as assigned dictates the number of blocks relief from quote spread parameters.
defined in Phlx Rule 1080, Commentary that may be sent simultaneously by the Consequently, the proposal should
.01. Failure to meet established SQT or RSQT. The number of lines encourage Phlx SQTs and RSQTs to
minimum performance requirements assigned to an SQT or RSQT is generally strive to improve their performance as
could result in restriction by the OAESC a function of the number of products market makers on the Exchange, as well
of additional options assignments; being quoted, taking into account the as help to mitigate the Exchange’s quote
suspension, termination, or restriction throughput required to minimize quote message traffic.
of an existing assignment on one or latency risk. The Exchange intends to
more options; or suspension, evaluate the average number of quotes IV. Conclusion
termination, or restriction of an SQT’s (1–99) submitted within the SQT or
or RSQT’s status as such. RSQT’s quote blocks. The number of It is therefore ordered, pursuant to
Phlx Rule 510 would establish quotes delivered in each block would Section 19(b)(2) of the Act,13 that the
specific criteria for each option assigned generally be a measure of the SQT or proposed rule change (SR–Phlx–2006–
to an SQT or RSQT that would be RSQT’s quoting efficiency. For example, 51), be, and hereby is, approved.
regularly evaluated by the Exchange. a firm sending an average of 1 quote in For the Commission, by the Division of
First, the Exchange would evaluate the each block may be considered Market Regulation, pursuant to delegated
percentage of total quotes submitted by inefficient while a firm sending an authority.14
the SQT or RSQT that represent the average of 99 quotes in each block
Florence E. Harmon,
NBBO. If the percentage of the total would be considered very efficient.
The Exchange explained that, in Deputy Secretary.
quotes that represent the NBBO is in the
general, the expenditure of systemic [FR Doc. E7–586 Filed 1–17–07; 8:45 am]
lowest quartile of all SQTs or RSQTs for
two or more consecutive months, this resources required to process an BILLING CODE 8011–01–P
Exhange’s SQF application that allows for delivery 11 In approving this proposed rule change, the
of a set of multiple quotations from the SQT or Commission notes that it has considered the
RSQT to the Exchange. Within a single ‘‘block,’’ the proposed rule’s impact on efficiency, competition,
13 15 U.S.C. 78s(b)(2).
SQT or RSQT can deliver quotes for any number and capital formation. See 15 U.S.C. 78c(f).
of option series ranging from 1 to 99. 12 15 U.S.C. 78f(b)(5). 14 17 CFR 200.30–3(a)(12).
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