The Philadelphia Stock Exchange Submits Letter To Securities And Exchange Commission Calling For SEC to Take Definitive Action On The Practice Of Internalization

The Philadelphia Stock Exchange (PHLX) submitted a letter on February 7 to Harvey L. Pitt, chairman of the Securities and Exchange Commission, requesting that the SEC establish clear and consistent guidelines for the practice of internalization in the options markets.

This letter comes in response to a Jan. 24 letter from Chairman Pitt calling for the elimination of exchange-sponsored options payment for order flow programs by individual exchanges and concerns about internalization practices.

"Internalization standards is an area of fierce competition between marketplaces," said PHLX Chairman Meyer "Sandy" Frucher, "and without SEC-set standards, each exchange will adopt rules that maximize their own economic position. As with exchange-sponsored options payment for order flow, internalization in the options markets calls out for SEC action," he said.

On February 4, the PHLX filed a petition to the SEC requesting the Commission eliminate exchange-sponsored options payment for order flow.

Attached is the letter to Chairman Pitt.

The Philadelphia Stock Exchange (PHLX) was founded in 1790. The PHLX trades more than 2,200 stocks, 1,016 listed equity options, 12 sectors index options and currency pairs. For more information about the PHLX and its products, visit www.phlx.com.