Federal Register / Vol. 77, No. 58 / Monday, March 26, 2012 / Notices 17531 

1 17 CFR 200.30–3(62). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A)(iii). 

4 17 CFR 240.19b–4(f)(6). 

5The Exchange adopted the STOS Program on a 

pilot basis in 2005. See Securities Exchange Act 

Release No. 52012 (July 12, 2005), 70 FR 41246 

(July 18, 2005) (SR–ISE–2005–17). The STOS 

Program was approved on a permanent basis in 

2010. See Securities Exchange Act Release No. 

62444 (July 2, 2010), 75 FR 39595 (July 9, 2010) 

(SR–ISE–2010–72). 

6See Securities Exchange Act Release Nos. 65775 

(November 17, 2011), 76 FR 72473 (November 23, 

2011) (SR–NASDAQ–2011–138) and 65776 

(November 17, 2011), 76 FR 72482 (November 23, 

2011) (SR–PHLX–2011–131). 

proprietary mutual fund and buying 

another non-proprietary mutual fund on 

margin without incurring any fees, 

commissions or other costs for the 

transactions and without Edward Jones 

otherwise charging the respective 

customers any fees, commissions or 

other costs to effect the transactions. 

This exemption is subject to the 

conditions that 

• Edward Jones does not receive any 

sales commissions, Rule 12b–1 fees, 

revenue sharing or any other 

compensation, directly or indirectly, 

from the mutual fund complexes in 

which investments are made, and 

Edward Jones does not charge or receive 

any compensation, fees, expenses or 

other costs as a result of its effecting 

transactions in the funds; and 

• Edward Jones, its affiliates, 

associates, related persons, management 

and employees have no affiliation with 

the mutual funds subject to the request, 

other than that Edward Jones will effect 

transactions in the funds for its 

customers. 

The foregoing exemption is subject to 

modification or revocation if at any time 

the Commission determines that such 

action is necessary or appropriate in 

furtherance of the purposes of the 

Exchange Act. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.1

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–7176 Filed 3–23–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66623; File No. SR–ISE– 

2012–23] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change Regarding the Short Term 

Option Series Program 

March 20, 2012. 

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 March 

13, 2012, the International Securities 

Exchange, LLC (‘‘Exchange’’ or ‘‘ISE’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the Exchange. The 

Exchange filed the proposal as a ‘‘noncontroversial’’ proposed rule change 

pursuant to Section 19(b)(3)(A)(iii) of 

the Act 3 and Rule 19b–4(f)(6) 

thereunder.4 The Commission is 

publishing 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 amend its 

rules regarding the Short Term Option 

Series Program. The text of the proposed 

rule change is available on the 

Exchange’s Web site www.ise.com, at 

the principal office of the Exchange, 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 

self-regulatory organization 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 purpose of this proposed rule 

change is to amend ISE Rules 504 and 

2009 regarding the Short Term Option 

Series Program (‘‘STOS Program’’).5

Specifically, the Exchange proposes to 

amend its rules to allow the Exchange 

to open short term option series that are 

opened by other securities exchanges in 

option classes selected by other 

exchanges under their respective short 

term option rules. 

Currently, ISE may select up to 30 

currently listed option classes on which 

short term option series may be opened 

in the STOS Program. The Exchange 

may also match any option classes that 

are selected by other securities 

exchanges that employ a similar 

program under their respective rules. 

For each option class eligible for 

participation in the STOS Program, the 

Exchange may open up to 30 short term 

option series for each expiration date in 

that class. 

This proposal seeks to allow the 

Exchange to open short term option 

series that are opened by other 

securities exchanges in option classes 

selected by other exchanges under their 

respective short term option rules. This 

change is being proposed 

notwithstanding the current cap of 30 

series per class under the STOS 

Program. This is a competitive filing 

and is based on approved filings and 

existing rules of The NASDAQ Stock 

Market LLC for the NASDAQ Options 

Market (‘‘NOM’’) and NASDAQ OMX 

PHLX, Inc. (‘‘PHLX’’).6

ISE is competitively disadvantaged 

since it operates a substantially similar 

STOS Program as NOM and PHLX but 

is limited to listing a maximum of 30 

series per options class that participates 

in its STOS Program (whereas PHLX 

and NOM are not similarly restricted). 

The Exchange is not proposing any 

changes to the STOS Program other than 

the ability to open short term option 

series that are opened by other 

securities exchanges in option classes 

selected by other exchanges under their 

respective short term option rules. 

ISE notes that the STOS Program has 

been well-received by market 

participants, in particular by retail 

investors. ISE believes that the current 

proposed revision to the STOS Program 

will permit the Exchange to meet 

increased customer demand and 

provide market participants with the 

ability to hedge in a greater number of 

option classes and series. 

With regard to the impact of this 

proposal on system capacity, ISE has 

analyzed its capacity and represents that 

it and the Options Price Reporting 

Authority (‘‘OPRA’’) have the necessary 

systems capacity to handle the potential 

additional traffic associated with trading 

of an expanded number of series for the 

classes that participate in the STOS 

Program. 

The proposed increase to the number 

of series per classes eligible to 

participate in the STOS Program is 

required for competitive purposes as 

well as to ensure consistency and 

uniformity among the competing 


tkelley on DSK3SPTVN1PROD with NOTICES
17532 Federal Register / Vol. 77, No. 58 / Monday, March 26, 2012 / Notices 

7 15 U.S.C. 78f(b). 

8 15 U.S.C. 78f(b)(5). 

9 15 U.S.C. 78s(b)(3)(A). 

10 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires the Exchange to give the 

Commission written notice of the Exchange’s intent 

to file the proposed rule change, along with a brief 

description and text of the proposed rule change, 

at least five business days prior to the date of filing 

of the proposed rule change, or such shorter time 

as designated by the Commission. The Exchange 

has satisfied this requirement. 

11See supra note 6. 

12For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 13 17 CFR 200.30–3(a)(12). 

options exchanges that have adopted 

similar STOS Programs. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Securities Exchange 

Act of 1934 7 (the ‘‘Act’’) in general, and 

furthers the objectives of Section 6(b)(5) 

of the Act 8 in particular, in that it is 

designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, to foster cooperation and 

coordination with persons engaged in 

facilitating transactions in securities, to 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general to protect investors and the 

public interest. The Exchange believes 

that expanding the current short term 

options program will result in a 

continuing benefit to investors by giving 

them more flexibility to closely tailor 

their investment decisions and hedging 

decisions in greater number of 

securities. The Exchange believes that 

expanding the current program will 

provide the investing public and other 

market participants with additional 

opportunities to hedge their investment 

thus allowing these investors to better 

manage their risk exposure. While the 

expansion of the STOS Program will 

generate additional quote traffic, the 

Exchange does not believe that this 

increased traffic will become 

unmanageable since the proposal 

remains limited to a fixed number of 

classes. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

ISE does not believe that this 

proposed rule change will impose any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Exchange Act. In 

this regard and as indicated above, the 

Exchange notes that the rule change is 

being proposed as a competitive 

response to existing NOM and PHLX 

rules. ISE believes this proposed rule 

change is necessary to permit fair 

competition among the options 

exchanges with respect to their short 

term options programs. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange has not solicited, and 

does not intend to solicit, comments on 

this proposed rule change. The 

Exchange has not received any 

unsolicited written comments from 

members or other interested parties. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not significantly affect the 

protection of investors or the public 

interest, does not impose any significant 

burden on competition, and, by its 

terms, does not become operative for 30 

days from the date on which it was 

filed, or such shorter time as the 

Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 9 and Rule 19b– 

4(f)(6) thereunder.10

The Exchange has requested that the 

Commission waive the 30-day operative 

delay. The Commission believes that 

waiver of the operative delay is 

consistent with the protection of 

investors and the public interest 

because the proposal is substantially 

similar to those of other exchanges that 

have been approved by the Commission 

and permit such exchanges to open 

short term option series that are opened 

by other securities exchanges under 

their respective short term option 

rules.11 Therefore, the Commission 

designates the proposal operative upon 

filing.12

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend 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 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rulecomments@sec.gov. Please include File 

Number SR–ISE–2012–23 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–ISE–2012–23. This file 

number should be included on the 

subject line if email 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 Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street, NE., 

Washington, DC 20549, on official 

business days between the hours of 

10 a.m. and 3 p.m. Copies of the 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–ISE– 

2012–23 and should be submitted on or 

before April 16, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–7202 Filed 3–23–12; 8:45 am] 

BILLING CODE 8011–01–P 


tkelley on DSK3SPTVN1PROD with NOTICES