30772 Federal Register / Vol. 66, No. 110 / Thursday, June 7, 2001 / Notices

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

2 17 CFR 240.19b–4.

3Securities Exchange Act Release No. 43830

(January 10, 2001), 66 FR 4880 (January 18, 2001).

4This comment letter is more fully discussed

below in Section III, Comment and Response. See

Letter from George Brunelle, Brunelle & Hadjikow,

to Jonathan G. Katz, Secretary, Commission, dated

February 6, 2001 (‘‘Brunelle Letter’’).

5Letter from Michael Simon, Senior Vice

President and General Counsel, ISE, to Susie Cho,

Division of Market Regulation (‘‘Division’’),

Commission, dated May 29, 2001 (‘‘Amendment

No. 1’’). In Amendment No. 1, the ISE proposed to

change the composition of the Obvious Error Panel

to comprise two Electronic Access Members and

two members that are market makers on the

Exchange. The ISE also amended the proposed rule

change to state that the ISE Market Control, not the

Obvious Error Panel, would determine the

theoretical price of an option where there are no

quotes to be relied on for comparison purposes.

Finally, the ISE clarified its procedures for appeal

of a decision by ISE Market Control to the Obvious

Error Panel.

6The provision permitting ISE Market Control to

grant relief in ‘‘unusual circumstances’’ is intended

primarily to encompass situations where EAMs and

market-makers might make a request a few minutes

Rule 477, OMB Control No. 3235–0550,

SEC File No. 270–493.

Notice is hereby given that, pursuant

to the Paperwork Reduction Act of 1995

(44 U.S.C. 3501 et seq.), the Securities

and Exchange Commission

(‘‘Commission’’) has submitted to the

Office of Management and Budget

requests for extension of the previously

approved collections of information

discussed below.

Rule 155 under the Securities Act

provides safe harbors for a registered

offering following an abandoned private

offering, or a private offering following

an abandoned registered offering,

without integrating the registered and

private offering in either case. Rule 155

requires any prospectus filed as a part

of a registration statement after a private

offering to include disclosure regarding

abandonment of the private offering.

Similarly, the rule requires an issuer to

provide each offeree in a private offering

following an abandoned registered

offering with: (1) Information

concerning withdrawal of the

registration statement; (2) the fact that

the private offering is unregistered; and

(3) the legal implications of the

offering’s unregistered status. The likely

respondents will be companies. All

information submitted to the

Commission is available to the public

for review. Companies only need to

satisfy the Rule 155 information

requirements if they wish to avail

themselves of the rule’s safe harbors.

The Rule 155 information is required

only on occasion. It is estimated that

600 issuers will file Rule 155

submissions annually at an estimated 4

hours per response. Also, it is estimated

that 50% of the 2,400 total annual

burden hours (1200 burden hours)

would be prepared by the company. We

estimate that the company’s outside

counsel would prepare the other 1,200

burden hours.

Rule 477 under the Securities Act sets

forth procedures for withdrawing a

registration statement or any

amendment or exhibits thereto. The

Rule provides that if a registrant applies

in anticipation of reliance on Rule 155’s

registered-to-private safe harbor, the

registrant must state in the withdrawal

application that the registrant plans to

undertake a subsequent private offering

in reliance on the rule. Without this

statement, the Commission would not

be able to monitor issuers’ reliance on

and compliance with Rule 155(c). The

likely respondents will be companies.

All information submitted to the

Commission under Rule 477 is available

to the public for review. Information

provided under Rule 477 is mandatory.

The information is required on

occasion. It is estimated that 300 issuers

will file Rule 477 submissions annually

at an estimated one-hour per response

for a total annual burden of 300 hours.

Finally, an agency may not conduct or

sponsor, and a person is not required to

respond to, a collection of information

unless it displays a currently valid

control number.

Written comments regarding the

above information should be directed to

the following persons: (i) Desk Officer

for the Securities and Exchange

Commission, Office of Information and

Regulatory Affairs, Office of

Management and Budget, Room 10102,

New Executive Office Building,

Washington, DC 20503; and (ii) Michael

E. Bartell, Associate Executive Director,

Office of Information Technology,

Securities and Exchange Commission,

450 Fifth Street, NW., Washington, DC

20549. Comments must be submitted to

OMB within 30 days of this notice.

Dated: May 30, 2001.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–14330 Filed 6–6–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–44376; File No. SR–ISE–

00–19]

Self Regulatory Organizations; Order

Granting Approval to Proposed Rule

Change and Notice of Filing and Order

Granting Accelerated Approval to

Amendment No. 1 Thereto by the

International Securities Exchange LLC

Adopting an Obvious Error Rule

June 1, 2001.

I. Introduction

On November 20, 2000, the

International Securities Exchange LLC

(‘‘ISE’’ or ‘‘Exchange’’), submitted to the

Securities and Exchange Commission

(‘‘Commission’’), pursuant to section

19(b)(1) of the Securities Exchange Act

of 1934 (‘‘Act’’),1 and Rule 19b–4

thereunder,2 a proposed rule change to

give the ISE the authority to bust or

adjust trades that result from clearly

erroneous orders or quotations.

The proposed rule change was

published for comment in the Federal

Register on January 18, 2001.3 One

comment letter was received on the

proposal.4 On May 30, 2001, the ISE

submitted Amendment No. 1 to the

proposed rule change to the

Commission.5 This Order approves the

proposed rule change. In addition, the

Commission is issuing notice of,

granting accelerated approval to, and

soliciting comments on, Amendment

No. 1 to the proposed rule change.

II. Description of the Proposal

The Exchange proposes to adopt new

ISE Rule 720, as amended, that would

allow it to either adjust or bust a

transaction in circumstances where a

member or its customer has made an

error and the price of the execution is

‘‘obviously’’ not correct. The proposed

rule contains objective standards

regarding when a transaction was

clearly the result of an ‘‘obvious error,’’

under what circumstances a trade

would be adjusted or busted, and to

what price a trade would be adjusted if

adjustment were appropriate under the

circumstances.

Under proposed ISE Rule 720, when

a member believes that it has

participated in a transaction that was

the result of an obvious error, it must

notify ISE Market Control within a

specified time of the execution. The

proposed rule requires Exchange market

makers, who are continuously

monitoring their transactions on the ISE,

to notify ISE Market Control within five

minutes of an execution. The proposed

rule allows Electronic Access Members

(‘‘EAMs’’), who may handle customer

orders on multiple exchanges

simultaneously and who may need to

contact customers for instruction, up to

twenty minutes to notify ISE Market

Control. Absent unusual circumstances,

ISE Market Control would not grant

relief unless notification is made within

the prescribed time periods.6

Federal Register / Vol. 66, No. 110 / Thursday, June 7, 2001 / Notices 30773

outside the set time limits, if they have a legitimate

reason for the delay. According to the ISE, one such

situation would be, for example, if a firm’s system

was down and after trying to fix it, the firm finds

an obvious error among the orders that have queued

up. On the other hand, EAMs and market makers

who fail to make a timely request because they

failed to monitor their trades would not be granted

relief. Telephone conversation between Katherine

Simmons, Vice President and Associate General

Counsel, ISE, and Susie Cho, Special Counsel,

Division, Commission, on May 29, 2001.

7The theoretical price of an option in the case of

an erroneous bid (offer) is the last bid (offer), just

prior to the trade, found on the exchange that has

the most liquidity in that option other than the ISE.

If there are no quotes for comparison purposes, the

theoretical price will be determined by ISE Market

Control.

8Under proposed Supplementary Material .05 to

ISE Rule 720, in no case would an Obvious Error

Panel include a person related to a party to the

obvious error in question.

9See Amendment No. 1, supra note 5.

10Brunelle Letter, supra note 4.

11Rule 11Ac1–1, 17 CFR 240.11 Ac1–1.

12Brunelle Letter, supra note 4 at 4.

13 Id.

14 Id. at 5.

15 Id.

16 Id. at 6.

17 Id.

18 Id. at 6–7.

19Letter from Michael Simon, Senior Vice

President and General Counsel, ISE, to Jonathan G.

Katz, Secretary, Commission, dated February 27,

2001 (‘‘ISE Response’’).

20See Amendment No. 1, supra note 5.

21 ISE Response, supra note 19 at 3.

ISE Market Control would determine

whether there was an obvious error

according to the following objective

criteria: (1) An obvious error would be

deemed to have occurred during normal

market conditions when the execution

price of a transaction is higher or lower

than the theoretical price 7 for the series

by an amount equal to at least two times

the maximum bid/ask spread allowed

for the option, so long as such amount

is 50 cents or more; and (2) an obvious

error would be deemed to have occurred

during fast market conditions when the

execution price of a transaction is

higher or lower than the theoretical

price for the series by an amount equal

to at least three times the maximum bid/

ask spread allowed for the option, so

long as such amount is 50 cents or more.

If it is determined that a transaction

is the result of an obvious error, ISE

Market Control will take one of the

following actions: (1) Where each party

to the transaction is an Exchange market

maker, the execution price of the

transaction would be adjusted unless

both parties agree to bust the trade; or

(2) where at least one party to the

obvious error is not a market maker on

the Exchange, the trade would be busted

unless both parties agree to adjust the

price of the transaction. The default

action would be taken unless agreement

is reached within ten minutes in the

case where both parties are Exchange

market makers, and within thirty

minutes where at least one party is not

an Exchange market maker. Upon taking

final action, Market Control would be

required to promptly notify both parties

to the trade.

Where an adjustment is made to a

transaction price, the adjusted price

would be determined by objective

criteria. The adjusted price would be

equal to the theoretical price of the

option in the case where the erroneous

price is displayed in the market and

subsequently executed by quotes or

orders that did not exist in the system

at the time the price was entered.

Proposed ISE Rule 720 further

specifies that the Exchange must

designate a least ten market maker

representatives and at least ten EAM

representatives to ISE to be called upon

to serve on an Obvious Error Panel, as

needed.8 The Obvious Error Panel

would be comprised of four members.

Two of the representatives must be

directly engaged in market making

activity and two of the representatives

must be employed by an EAM. Proposed

ISE Rule 720 provides that an Obvious

Error Pannel would have the authority

to, upon request by a party to a potential

obvious error, review whether ISE

Market Control used the correct

theoretical price and whether an

adjustment was made at the correct

price. A request for a review must be

made in writing within thirty minutes

after a party receives verbal notification

of a final determination by ISE Market

Control, except that if notification is

made after 3:30 p.m. Eastern time, either

party would have until 9:30 a.m. Eastern

time the next trading day to request

review. The Obvious Error Panel would

be permitted to overturn or modify an

action taken by ISE Market Control

upon agreement by a majority of the

panel representatives; if the Obvious

Error Panel vote were split 2–2, then the

decision of ISE Market Control would

stand.9 All determinations by an

Obvious Error Panel will be made on the

same day as the transaction in question,

or the next trading day in the case

where a request is properly made after

3:30 p.m. on the day of the transaction

or where the request is properly made

the next trading day. The determination

of the Obvious Error Panel would be

final.

III. Comment and Response

A. Comment Letter

The Commission received one

comment letter regarding the

proposal.10 Overall, the commenter

believed that the proposed rule would

unfairly injure public investors, would

damage the public options markets and

would subvert the Commission’s newly

amended Quote Rule.11

Specifically, the commenter argued

that the concept of ‘‘theoretical price’’ is

arbitrary.12 The commenter believed

that the proposed rule change ignores

the fact that many different theoretical

pricing formulae exist and their

application by different parties to the

same trading situations can produce

widely divergent calculations of the

theoretical price.13 The commenter also

stated that even in situations where the

ISE recognizes that the theoretical price

is not objectively determinable, the ISE

had proposed to allow an Obvious Error

Panel comprised entirely of market

makers to determine the theoretial price

without third-party oversight.14

The commenter also objected that the

limitation on the composition of the

Obvious Error Panel to market makers

would tend to create opportunities for

reciprocity and would constitute, in

itself, a conflict of interest.15 The

commenter worried that the proposal

would give members an incentive and

opportunity to take unfair advantage of

the public by manipulating the ‘‘obvious

error’’ process to entice public investors

into trading at prices deliberately set in

excess of the maximum bid/ask limits.16

The commenter stated that the proposal

contains no mechanism for disclosing to

public investors the facts underlying a

decision to cancel one of their trades,

nor any procedure for appealing from

such a decision to an impartial

tribunal.17 Finally, the commenter

argued that the proposal would unfairly

impose losses from obvious error trades

only on the public investor and not on

market makers who commit ‘‘obvious’’

trading errors.18

B. ISE Response

The ISE responded by stating that the

protection afforded by the proposal is

applied equally to all market

participants, whether they are market

makers entering quotations or investors

entering limit orders.19 The ISE later

submitted Amendment No. 1 to the

proposal.20

In response to the commenter’s

argument that the proposal would

violate the Commission’s Quote Rule,

the ISE argued that its proposal is

consistent with the Quote Rule, because

it is narrowly crafted to apply in a fair

and even-handed manner only in cases

where any objective person would agree

that the error was obvious.21 The ISE

stated that there is no support for the

30774 Federal Register / Vol. 66, No. 110 / Thursday, June 7, 2001 / Notices

22Rule 11890 of the National Association of

Securities Dealers, Inc. (‘‘NASD’’); Rule 75 of the

New York Stock Exchange, Inc (‘‘NYSE’’).

23 ISE Response, supra note 19 at 2.

24 Id. at 3.

25See Amendment No. 1, supra note 5.

26 Id.

27 ISE Response, supra note 19 at 5.

28See Amendment No. 1, supra note 5.

29 ISE Response, supra note 19 at 4.

30 ISE Response, supra note 19 at 6.

31 Id.

32 Id.

33 Id. at 7.

34 Id.

35Amendment No. 1, supra note 5.

36 Id.

37 Id.

argument that trades done at a price

obviously in error must stand, citing

rules from other self-regulatory

organizations (‘‘SROs’’) 22 that permit

SRO staff to adjust or bust clearly

erroneous trades.23 The ISE also

disputed the commenter’s assertion that

the proposal would allow the ISE to

cancel trades on the basis of a formula

that the public could not calculate or

verify. The ISE stated that its proposal

provides specific objective criteria that

the Exchange will use to determine if a

quotation is erroneous and notes that

the ISE spread requirements are

described in ISE Rule 803.24

Responding to the commenter’s

arguments regarding the arbitrariness of

the theoretical price determination and

potential conflicts of interest for the

Obvious Error Panel, the ISE states that

the proposal specifies exactly the prices

to be used in determining whether a

trade is an ‘‘obvious error,’’ i.e., the

quotation in the most liquid market for

the option. Where there is no available

quote, the ISE has proposed to amend

its proposal to state that ISE Market

Control, not an Obvious Error Panel

comprised solely of market makers, will

determine the theoretical price.25 In

addition, the composition of the

Obvious Error Panel has been proposed

to be altered by Amendment No. 1 so

that it would consist of both market

maker members and EAMs and it will

review ISE staff decisions made under

the proposed rule.26 The ISE notes that

this is a limited function in which

pricing and trading expertise is needed

and that the proposal explicitly

prohibits market makers from ruling on

any matter involving their own firms.27

Moreover, the Obvious Error Panel

would have no involvement in the

initial review of a trade and would only

provide a forum for an appeal.28 The ISE

also adds that in any trade involving a

customer, the proposal explicitly

provides that the ISE would bust any

customer trade that is obviously in error

unless the customer agrees to adjust the

price.29

Responding to the commenter’s

concern of market maker manipulation

under the proposal, the ISE commented

that the Exchange is charged with the

responsibility to engage in active

surveillance of its markets and to

discipline members who violate its rules

or the federal securities laws.30 The ISE

noted that ISE Market Control would

easily detect the commenter’s example

of manipulation, since the market maker

must seek ISE staff involvement to

‘‘correct’’ trades.31 The ISE also stated

that the Exchange posts both its rules

and its rule proposals on its Internet

web site for anyone to review.32

Finally, the ISE challenged the

commenter’s argument that the proposal

would allow market makers to avoid

losses and transfer risks to public

customers. The ISE stated that the

proposal would provide all market

participants with notice that trades

clearly out-of-line with the market—

subject to clear, objective standards—

would not stand.33 The proposal,

instead of permitting arbitrageurs to

exploit a clear mistake in the market,

would reasonably allocate the risk in

this type of situation in a manner that

protects customers while not unfairly

harming market makers who attempt to

provide investors with deep and liquid

markets.34

C. Amendment No. 1

Amendment No. 1 would alter the

proposal in several aspects. In

Amendment No. 1, the ISE revised the

composition of the Obvious Error Panel

to comprise two Electronic Access

Members and two members that are

market makers on the Exchange.35 The

ISE also amended the proposed rule

change to state that the ISE Market

Control, not the Obvious Error Panel,

would determine the theoretical price of

an option where there are no quotes for

comparision purposes.36 Finally, the

ISE clarified its procedures for

appealing an ISE staff decision to the

Obvious Error Panel.37 Proposed ISE

Rule 720, as amended by Amendment

No. 1, follows. Additions are italicized.

* * * * *

Rule 720. Obvious Errors

* * * * *

(b) Definition of Theoretical Price. For

purposes of this Rule only, the Theoretical

Price of an option is:

(1) if the series is traded on at least one

other options exchange, the last bid or offer,

just prior to the trade, found on the exchange

that has the most liquidity in that option as

provided in Supplementary Material .02

below; or

(2) if there are no quotes for comparison

purposes, as determined by designated

personnel in the Exchange’s market control

center (‘‘Market Control’’).

* * * * *

(d) Obvious Error Procedure. Designated

personnel in the Exchange’s market control

center (‘‘Market Control’’) shall administer

the application of this Rule as follows:

(1) Notification. If a market maker on the

Exchange believes that it participated in a

transaction that was the result of an Obvious

Error, it must notify Market Control within

five (5) minutes of the execution. If an

Electronic Access Member believes an order

it executed on the Exchange was the result

of an Obvious Error, it must notify Market

Control within twenty (20) minutes of the

execution. Absent unusal circumstances,

Market Control will not grant relief under this

Rule unless notification is made within the

prescribed time periods.

(2) Adjust or Bust. Market Control will

determine whether there was an Obvious

Error as defined above. If it is determined

that an Obvious Error has occurred, Market

Control shall take one of the following

actions: (i) where each party to the

transaction is a market maker on the

Exchange, the execution price of the

transaction will be adjusted unless both

parties agree to bust the trade within ten (10)

minutes of being notified by Market Control

of the Obvious Error; or (ii) where at least one

party to the Obvious Error is not a market

maker on the Exchange, the trade will be

busted unless both parties agree to adjust the

price of the transaction within thirty (30)

minutes of being notified by Market Control

of the Obvious Error. Upon taking final

action, Market Control shall promptly notify

both parties to the trade.

(e) Obvious Error Panel.

(1) Composition. An Obvious Error Panel

will be comprised of representatives from

four (4) Members. Two (2) of the

representatives must be directly engaged in

market making activity and two (2) of the

representatives must be employed by an

Electronic Access Member.

(2) Request for Review. If a party affected

by a determination made under this Rule so

requests within the time permitted below, the

Obvious Error Panel will review decisions

made by Market Control under this Rule,

including whether an Obvious Error

occurred, whether the correct Theoretical

Price was used, and whether an adjustment

was made at the correct price. A party may

also request that the Obvious Error Panel

provide relief under this Rule in cases where

the party failed to provide the notification

required in paragraph(d)(1) and Market

Control declined to grant an extension, but

unusual circumstances must merit special

consideration. A request for review must be

made in writing within thirty (30) minutes

after a party receives verbal notification of a

final determination by Market Control under

this Rule, except that if notification is made

after 3:30 p.m. Eastern Time, either party has

until 9:30 a.m. Eastern Time the next trading

day to request review. The Obvious Error

Panel shall review the facts and render a

decision on the day of the transaction, or the

next trade day in the case where a request

Federal Register / Vol. 66, No. 110 / Thursday, June 7, 2001 / Notices 30775

38 15 U.S.C. 78f.

39 15 U.S.C. 78f(b)(5).

40 In approving the proposal, the Commission has

considered the rule’s impact on efficiency,

competition, and capital formation. 15 U.S.C. 78c(f).

41Telephone conversation between Katherine

Simmons, Vice President and Associate General

Counsel, ISE, and Susie Cho, Special Counsel,

Division, Commission, on May 25, 2001.

42 15 U.S.C. 78s(b)(2).

43 15 U.S.C. 78s(b)(2).

44 17 CFR 200.30–3(a)(12).

is properly made after 3:30 on the day of the

transaction or where the request is properly

made the next trade day.

(3) Panel Decision. The Obvious Error

Panel may overturn or modify an action

taken by Market Control under this Rule

upon agreement by a majority of the Panel

representatives. All determinations by the

Obvious Error Panel shall constitute final

Exchange action on the matter at issue.

Supplementary Material to Rule 720

* * * * *

.03 The price to which a transaction is

adjusted under paragraph (c)(2) above will be

as follows: (i) the bid price from the exchange

providing the most volume for the option will

be used with respect to an erroneous offer

price entered on the Exchange, and (ii) the

offer price from the exchange providing the

most volume for the option will be used with

respect to an erroneous bid price entered on

the Exchange. If there are no quotes for

comparison purposes, the adjustment price

will be determined by Market Control.

* * * * *

.05 To qualify as a representative of an

Electronic Access Member on an Obvious

Error Panel, a person must (i) be employed

by a Member whose revenues from options

market making activity do not exceed ten

percent (10%) of its total revenues; or (ii)

have as his or her primary responsibility the

handling of Public Customer orders or

supervisory responsibility over persons with

such responsibility, and not have any

responsibilities with respect to market

making activities.

.06 The Exchange shall designate at least

ten (10) market maker representatives and at

least ten (10) Electronic Access

representatives to be called upon to serve on

Obvious Error Panels as needed. In no case

shall an Obvious Error Panel include a

person related to a party to the trade in

question. To the extent reasonably possible,

the Exchange shall call upon the designated

representatives to participate on an Obvious

Error Panel on an equally frequent basis.

.07 All determinations made by the

Exchange, Market Control or an obvious

Error Panel under this Rule shall be rendered

without prejudice as to the rights of the

parties to the transaction to submit a dispute

to arbitration.

* * * * *

IV. Discussion

The Commission has reviewed the

ISE’s proposed rule change and finds,

for the reasons set forth below, that the

proposal is consistent with the

requirements of section 6 of the Act 38

and the rules and regulations

thereunder applicable to a national

securities exchange. Specifically, the

Commission believes the proposal is

consistent with section 6(b)(5) of the

Act,39 because it promotes just and

equitable principles of trade, removes

impediments to and perfects the

mechanism of a free and open market

and a national market system, and

protects investors and the public

interest, by providing objective

standards for the ISE to use in correcting

executions made as a result of an

obvious error and procedures by which

ISE staff decisions may be appealed.40

The Commission believes that the

proposal is a reasonable means by

which the Exchange might allocate the

costs of obvious error trades. The

proposal reasonably balances the

concern that one market participant may

receive a wind-fall at the expense of

another market participant who made

an obvious error, with the expectation

that market participants not be

permitted to reconsider poor trading

decisions.

In addition, by providing objective

standards for resolving disputes

involving obvious errors, the proposal

should enhance the proper functioning

of the markets. When an obvious error

has been made and publicly reported, it

is important that the ISE correct these

obvious errors as quickly as possible

using procedures that are clearly

outlined. Thus, for any trade involving

a customer, the proposal explicitly

provides that the ISE will bust any

customer trade that is obviously in error

unless the customer agrees to adjust the

price. The proposal further delineates

and appeals process to the Obvious

Error Panel and provides a specified

time period in which an appeal can be

made. The composition of the Obvious

Error Panel will provide for the equal

representation of both EAMs and market

makers. Moreover, if there is no majority

consensus among the panel, the

decision of ISE Market Control will

stand. In addition, where a panel

member is an EAM from a firm that

engages in both public customer

business and market making activity,

the ISE expects that the firm will have

information barriers in place to ensure

against any inappropriate sharing of

information between the public

customer side and the market making

side of the firm.41

The Commission finds good cause for

approving Amendment No. 1 to the

proposed rule change prior to the

thirtieth day after the date of

publication of notice in the Federal

Register. In Amendment No. 1, the ISE

proposes to change the composition of

the Obvious Error Panel to comprise two

Electronic Access Members and two

members that are market makers on the

Exchange. The ISE also amended the

proposed rule change to state that the

ISE Market Control, not the Obvious

Error Panel, would determine the

theoretical price of an option where

there are no quotes for comparison

purposes. As the changes to the

proposal set forth in Amendment No. 1

are directly responsive to the concerns

raised by the commenter, the

Commission finds that, consistent with

section 19(b)(2) of the Act,42 good cause

exists for approving Amendment No. 1

on an accelerated basis. Accelerated

approval of Amendment No. 1 will

allow the ISE to expeditiously

implement the obvious error procedures

set forth in the proposal.

V. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning Amendment No.

1, including whether the proposed

amendment is consistent with the Act.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, NW.,

Washington, DC 20549–0609. 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 at

the Commission’s Public Reference

Room. Copies of such filing will also be

available for inspection and copying at

the principal office of the Exchange. All

submissions should refer to File No.

SR–ISE–00–19 and should be submitted

by June 28, 2001.

VI. Conclusion

It Is Therefore Ordered, pursuant to

section 19(b)(2) of the Act,43 that the

proposed rule change (SR–ISE–00–19),

as amended, is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.44

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–14332 Filed 6–6–01; 8:45 am]

BILLING CODE 8010–01–M