Document Headings

                    Document headings vary by document type but may contain                    the following:                  
                -                       the agency or agencies that issued and signed a document                    
                -                       the number of the CFR title and the number of each part                      the document amends, proposes to amend, or is directly                      related to                    
                -                       the agency docket number / agency internal file number                    
                -                       the RIN which identifies each regulatory action listed in                      the Unified Agenda of Federal Regulatory and Deregulatory                      Actions                    

                    See the                                          Document Drafting Handbook                                        for more details.                  

###### Securities and Exchange Commission

          - [Release No. 34-52418; File No. SR-ISE-2005-33] 

                    On July 8, 2005, the International Securities Exchange, Inc. (“ISE”), filed with the Securities and Exchange Commission (“Commission”) a proposed rule change pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) [1]                                          and Rule 19b-4 thereunder,[2]                                          to implement Amendment No. 15 to the Plan for the Purpose of Creating and Operating an Intermarket Option Linkage [3]                                          by amending ISE Rules 1900 and 1903 to add a “trade and ship” exception to the definition of “Trade-Through” and add a “book and ship” exception to the provision relating to locked markets, respectively. The proposed rule change was published for comment in the                     **Federal Register**                     on August 5, 2005.[4]                                          The Commission received no comments on the proposal. This order approves the proposed rule change.                 

                    Under the proposed rule change, an ISE member could trade an order at a price that is one minimum quoting increment inferior to the national best bid or offer (“NBBO”) if a Linkage Order [5]                                          is sent contemporaneously to the market(s) disseminating the NBBO to satisfy all interest at the NBBO price. The proposed rule change also would provide that an ISE member may enter an order on the ISE that would otherwise lock another market if a Linkage Order is sent contemporaneously to such other market to satisfy all interest at the lock price and only the remaining portion of the order is booked. The ISE proposes that, under trade and ship, any execution received from the market disseminating the NBBO must (pursuant to agency obligations) be reassigned to the customer order that is underlying the Linkage Order that was sent to trade with the market disseminating the NBBO.                 

                    After careful consideration, the Commission finds that the proposed rule change is consistent with the requirements of Section 6 of the Act [6]                                          and the rules and regulations thereunder applicable to a national securities exchange.[7]                                          In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act,[8]                                          which requires, among other things, that the rules of an exchange be designed to promote just and equitable principles of trade, 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 Commission believes that the proposed rule change should help to implement the Linkage Plan by facilitating the ability of ISE's members to execute their customer                           ( print page 55198)                        orders in a timely manner and potentially could decrease the incidence of Trade-Throughs and locked markets.                 

*It is therefore ordered,*                     pursuant to Section 19(b)(2) of the Act,[9]                                          that the proposed rule change (SR-ISE-2005-33) is approved.                 

                        For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[10] 

Jonathan G. Katz, 

Secretary. 

# Footnotes

1.                             15 U.S.C. 78s(b)(1).                    
        Back to Citation      

2.                             17 CFR 240.19b-4.                    
        Back to Citation      

3.                             On July 28, 2000, the Commission approved a national market system plan for the purpose of creating and operating an intermarket option linkage proposed by the American Stock Exchange LLC, the Chicago Board Options Exchange, Incorporated, and the ISE.                         *See*                         Securities Exchange Act Release No. 43086 (July 28, 2000), 65 FR 48023 (August 4, 2000) (“Linkage Plan”). Subsequently, upon separate requests by the Philadelphia Stock Exchange, Inc., the Pacific Exchange, Inc., and the Boston Stock Exchange, Inc., the Commission issued orders to permit these exchanges to participate in the Linkage Plan.                         *See*                         Securities Exchange Act Release Nos. 43573 (November 16, 2000), 65 FR 70851 (November 28, 2000); 43574 (November 16, 2000), 65 FR 70850 (November 28, 2000); and 49198 (February 5, 2004), 69 FR 7029 (February 12, 2004).                    
        Back to Citation      

4.                                                     *See*                         Securities Exchange Act Release No. 52174 (July 29, 2005), 70 FR 45455.                    
        Back to Citation      

5.                                                     *See*                         ISE Rule 1900(10).                    
        Back to Citation      

6.                             15 U.S.C. 78f.                    
        Back to Citation      

7.                             In approving this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation.                         *See*15 U.S.C. 78c(f).                    
        Back to Citation      

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

9.                             15 U.S.C. 78s(b)(2).                    
        Back to Citation      

10.                                 17 CFR 200.30-3(a)(12).                        
        Back to Citation      

[FR Doc. 05-18616 Filed 9-19-05; 8:45 am] 

BILLING CODE 8010-01-P