Federal Register / Vol. 70, No. 181 / Tuesday, September 20, 2005 / Notices 55199 

10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 52255 

(August 15, 2005), 70 FR 48792. 

4NYSE Rule 123C defines an ‘‘expiration day’’ as 

‘‘a trading day prior to the expiration of indexrelated derivative products (futures, options or 

options on futures), whose settlement pricing is 

based upon opening or closing prices on the 

Exchange, as identified by a qualified clearing 

corporation (e.g., the Options Clearing Corporation). 

The twelve expiration days are ‘expiration Fridays’

which fall on the third Friday in every month.’’ On 

these expiration days, the Exchange has specific 

requirements governing the entry of orders in stocks 

relating to index contracts whose settlement prices 

are based on the opening prices on the Exchange 

of the stocks comprising the indices. 

5 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

formation. 15 U.S.C. 78c(f). 

6 15 U.S.C. 78f(b)(5). 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The ISE does not believe that the 

proposed rule change, as amended, 

would impose any burden on 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received from 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 35 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding, or 

(ii) as to which the ISE consents, the 

Commission will: 

A. By order approve such proposed 

rule change, as amended; or 

B. Institute proceedings to determine 

whether the proposed rule change, as 

amended, should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change, as amended, 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 e-mail to rulecomments@sec.gov. Please include File 

Number SR–ISE–2005–42 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Jonathan G. Katz, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street, NE., 

Washington, DC 20549–9303. 

All submissions should refer to File 

Number SR–ISE–2005–42. This file 

number should be included on the 

subject line if e-mail 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 inspection and copying in 

the Commission’s Public Reference 

Room. Copies of such 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 publicly available. All 

submissions should refer to File 

Number SR–ISE–2005–42 and should be 

submitted on or before October 11, 

2005. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.10

Jonathan G. Katz, 

Secretary. 

[FR Doc. 05–18672 Filed 9–19–05; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–52421; File No. SR–NYSE–

2005–54] 

Self-Regulatory Organizations; New 

York Stock Exchange, Inc.; Order 

Granting Accelerated Approval of a 

Proposed Rule Change To Amend 

NYSE Rule 123C (Market on the Close 

Policy and Expiration Procedures) To 

Eliminate the Requirement To Publish 

Pre-Opening Market Order Imbalances 

on Expiration Fridays 

September 14, 2005. 

I. Introduction 

On July 26, 2005, the New York Stock 

Exchange, Inc. (‘‘NYSE’’ or ‘‘Exchange’’) 

filed with 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 proposal to amend 

NYSE Rule 123C (Market on the Close 

Policy and Expiration Procedures) to 

eliminate the requirement to publish 

pre-opening market order imbalances on 

expiration Fridays. The proposed rule 

change was published for comment in 

the Federal Register on August 19, 

2005.3 The Commission received no 

comments regarding the proposal. This 

order approves the proposed rule 

change on an accelerated basis. 

II. Description of the Proposal 

NYSE Rule 123C contains 

requirements with respect to operation 

of the Exchange’s market concerning 

market-on-close (‘‘MOC’’) and limit-onclose (‘‘LOC’’) orders as well as order 

entry and imbalance publication 

requirements for use on expiration 

days.4 Under NYSE Rule 123C(6), the 

Exchange currently publishes 

information order imbalances, as 

promptly as possible after 9 a.m., only 

with respect to the imbalance of buy 

and sell market orders, and does not 

include buy and sell limit orders 

entered up to that time for execution at 

the opening. The NYSE proposes to 

eliminate the publication of pre-opening 

market order imbalances on expiration 

Fridays. The NYSE believes that the 

publication of only market order 

imbalances does not provide useful 

information, especially with respect to 

stocks which are part of an expiring 

index whose settlement is based on 

NYSE opening prices on one of those 

days. 

III. Discussion 

The Commission finds that the 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to a national securities 

exchange.5 In particular, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act,6 which requires, 

among other things, that the rules of a 

national securities exchange be 

designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, to remove impediments to and 

perfect the mechanism of a free and 

55200 Federal Register / Vol. 70, No. 181 / Tuesday, September 20, 2005 / Notices 

7 15 U.S.C. 78s(b)(2). 

8 15 U.S.C. 78s(b)(2). 

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3On 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 International Securities 

Exchange, Inc. 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 PCX, 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). 

4 In Amendment No. 1, the PCX revised the rule 

text to use terms consistent with PCX’s current 

rules and made clarifying changes in the purpose 

and statutory basis sections. 

5 In Amendment No. 3, the PCX made clarifying 

changes to the rule text and the purpose section. 

6See Securities Exchange Act Release No. 52206 

(August 4, 2005), 70 FR 46898. 

7See PCX Rule 6.92(a)(16). 

8See PCX Rule 6.92(a)(12). 

9 15 U.S.C. 78f. 

10 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). 

11 15 U.S.C. 78f(b)(5). 

12 15 U.S.C. 78s(b)(2). 

13 17 CFR 200.30–3(a)(12). 

open market and a national market 

system, and, in general, to protect 

investors and the public interest. 

The Commission believes that by 

amending NYSE Rule 123C to eliminate 

the publication of pre-opening market 

order imbalances which do not include 

limit orders, the NYSE will no longer 

disseminate information that may have 

been misleading to investors. 

The Commission finds good cause, 

pursuant to Section 19(b)(2) of the Act,7

for approving the proposed rule change 

prior to the 30th day after the date of 

publication of notice in the Federal 

Register. The Commission does not 

believe that the proposed rule change 

raises novel regulatory issues. Granting 

accelerated approval of the proposed 

rule change allows the NYSE to 

implement the proposed rule change by 

the next expiration Friday. 

Consequently, the Commission believes 

that it is appropriate to grant accelerated 

approval to permit the Exchange to 

eliminate the publication of pre-opening 

market order imbalances on expiration 

Fridays as soon as possible. 

Accordingly, the Commission finds that 

there is good cause, consistent with the 

reasons herein, to approve the proposal 

on an accelerated basis. 

IV. Conclusion 

It Is Therefore Ordered, pursuant to 

Section 19(b)(2) of the Act,8 that the 

proposed rule change (SR–NYSE–2005–

54) be, and hereby is approved on an 

accelerated basis. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.9

Jonathan G. Katz, 

Secretary. 

[FR Doc. 05–18666 Filed 9–19–05; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–52417; File No. SR–PCX–

2005–59] 

Self-Regulatory Organizations; Pacific 

Exchange, Inc.; Order Approving a 

Proposed Rule Change and 

Amendments No. 1 and 3 Thereto To 

Amend the Exchange’s Trade-Through 

and Locked Markets Rules 

September 13, 2005. 

On April 27, 2005, the Pacific 

Exchange, Inc. (‘‘PCX’’), 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 PCX Rules 6.92 

and 6.95 to add a ‘‘trade and ship’’

exception to the definition of ‘‘TradeThrough’’ and add a ‘‘book and ship’’

exception to the provision relating to 

locked markets, respectively. On July 8, 

2005, the PCX filed Amendment No. 1 

to the proposed rule change.4 The PCX 

filed Amendment No. 2 to the proposed 

rule change on July 29, 2005 and 

withdrew Amendment No. 2 on August 

1, 2005. The PCX filed Amendment No. 

3 to the proposed rule change on August 

1, 2005.5 The proposed rule change, as 

amended, was published for comment 

in the Federal Register on August 11, 

2005.6 The Commission received no 

comments on the proposal. This order 

approves the proposed rule change, as 

amended. 

Under the proposed rule change, a 

Participant Exchange 7 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 8 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 OTP Holder, OTP Firm, 

or Eligible Market Maker may book an 

order 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 PCX 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 9

and the rules and regulations 

thereunder applicable to a national 

securities exchange.10 In particular, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act,11 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 PCX’s 

participants to execute their customer 

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,12 that the 

proposed rule change (SR–PCX–2005–

59) as amended, is approved. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.13

Jonathan G. Katz, 

Secretary. 

[FR Doc. 05–18622 Filed 9–19–05; 8:45 am] 

BILLING CODE 8010–01–P