Federal Register / Vol. 73, No. 194 / Monday, October 6, 2008 / Notices 58277 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

5See Securities and Exchange Commission 

Release No. 34–57021 (December 20, 2007), 72 FR 

74373 (December 31, 2007) (SR–ISE–2007–116) 

(Notice of filing and immediate effectiveness of 

proposed rule change to open the Exchange’s equity 

trading platform at 9:00 a.m.). 

6See ISE Rule 2106. 

7See supra note 5. 

8The Exchange is also amending ISE Rule 

2101(a)(2)(iii)(A) to delete language addressing the 

halting and subsequent resumption of trading when 

the underlying value of a securities derivative 

product continues not to be calculated or widely 

available as of the commencement of trading on the 

next business day. The Exchange believes that it is 

appropriate to delete this language because it is 

being added to proposed Rule 2102(e)(3). 

STATUS: Closed Meeting. 

PLACE: 100 F Street, NE., Washington, 

DC. 

DATE AND TIME OF PREVIOUSLY ANNOUNCED

MEETING: Monday, September 29, 2008 

at 2 p.m. 

CHANGE IN THE MEETING: Cancellation of 

Meeting. 

The Closed Meeting scheduled for 

Monday, September 29, 2008 was 

cancelled. 

For further information please contact 

the Office of the Secretary at (202) 551– 

5400. 

Dated: October 1, 2008, 

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–23579 Filed 10–3–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58685; File No. SR–ISE– 

2008–73] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change To Expand the Trading Hours 

of the ISE Stock Exchange 

September 30, 2008. 

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 

September 24, 2008, 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 has filed the proposal 

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

Act 3 and Rule 19b–4(f)(6) thereunder,4

which renders the proposal effective 

upon filing with the Commission. 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 submits this rule filing 

to extend its hours of trading for equity 

securities. The text of the proposed rule 

change is available on the Exchange’s 

Web site http://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 

Exchange 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 Exchange proposes to extend its 

hours of trading for equity securities. 

Currently, the Exchange has two equity 

trading sessions. The Pre-Market 

Session begins at 9 a.m. Eastern Time 5

and ends when the opening transaction 

occurs, as defined in ISE Rule 2106(b). 

The Regular Market Session commences 

upon the opening transaction, as 

defined in ISE Rule 2106(b), and 

concludes simultaneously with the 

primary listing market in such security, 

which is either 4 p.m. or 4:15 p.m. 

Eastern Time, depending on the 

security.6

The Exchange is proposing to begin 

ISE Stock Exchange trading at 8 a.m. 

Eastern Time and close the market at 5 

p.m. Eastern Time. Trading in the PreMarket Session and the transition to the 

Regular-Market Session7 will remain 

unchanged, other than starting the PreMarket Session one hour earlier. 

Additionally, the Exchange is 

proposing to adopt a Post-Market 

Session, which will begin at the 

conclusion of the Regular-Market 

Session and close at 5 p.m. Eastern 

Time. To participate in the Post-Market 

session, Equity Electronic Access 

Members (‘‘Equity EAMs’’) must mark 

orders as ‘‘Post-Closing.’’ Accordingly, 

the Exchange is proposing to amend ISE 

Rule 2102 (Hours of Business) to 

provide for a Post-Market Session and 

ISE Rule 2104 (Types of Orders) to 

adopt a ‘‘Post-Closing’’ order. 

Trading during expanded hours 

involves potential risks, including the 

possibility of lower liquidity, higher 

volatility, changing prices, unlinked 

markets with the possibility of tradethroughs, and wider spreads. Moreover, 

trades executed during these sessions 

may receive executions at inferior prices 

when compared to the high/low of the 

day. The Supplementary Material to ISE 

Rule 2102 presently requires Equity 

EAMs that submit orders during the PreMarket Session on behalf of nonmembers to disclose the risks of 

participating in such session to their 

customers. The Exchange proposes to 

expand this customer disclosure 

requirement to also apply to the PostMarket Session. 

The Exchange proposes to adopt rule 

text governing trading halts in the Preand Post-Market Sessions. Specifically, 

if a security begins trading on the 

Exchange in the Pre-Market Session and 

subsequently a temporary interruption 

occurs in the calculation or wide 

dissemination of the intraday indicative 

value (‘‘IIV’’) or the value of the 

underlying index by a major market data 

vendor, the Exchange may continue to 

trade the derivative securities product 

for the remainder of the Pre-Market 

Session. 

The Exchange will continue to halt 

trading during the Regular-Market 

Session in accordance with the 

provisions set forth in existing ISE Rule 

2101(a)(2)(iii)(A) and (B).8

The Exchange will halt trading during 

the Post-Market Session if the IIV or the 

value of the underlying index continues 

not to be calculated or widely available 

after the close of the Regular-Market 

Session. The Exchange may trade 

derivative securities products in the 

Post-Market Session only if the listing 

market traded such securities until the 

close of its regular trading session 

without a halt. 

If the IIV or the value of the 

underlying index continues not to be 

calculated or widely available as of the 

commencement of the Pre-Market 

Session on the next business day, the 

Exchange will not begin trading the 

derivative securities product in the PreMarket Session that day. If an 

interruption in the calculation or wide 


jlentini on PROD1PC65 with NOTICES
58278 Federal Register / Vol. 73, No. 194 / Monday, October 6, 2008 / Notices 

9 15 U.S.C. 78f(b). 

10 15 U.S.C. 78f(b)(5). 

11 15 U.S.C. 78s(b)(3)(A). 

12 17 CFR 240.19b–4(f)(6). The Commission notes 

that ISE has satisfied the five-day pre-filing notice 

requirement. 

13See e.g., NYSE Arca Rule 7.34 and Securities 

Exchange Act Release No. 54997 (December 21, 

2006), 71 FR 78501 (December 29, 2006) (SR– 

NYSEArca–2006–77) (reflecting trading halt 

procedures for securities trading in extended 

hours). See also Securities Exchange Act Release 

No. 56625 (October 5, 2007), 72 FR 58144 (October 

12, 2007) (SR–NYSEArca–2007–73) (discussing 

disclosure to be included in regulatory information 

bulletin). 

14For purposes only of waiving the operative date 

of this proposal, the Commission has considered 

the rule’s impact on efficiency, competition, and 

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

dissemination of the IIV or the value of 

the underlying index continues, the 

Exchange may resume trading in the 

derivative securities product only if 

calculation and wide dissemination of 

the IIV or the value of the underlying 

index resumes or trading in the 

derivative securities product resumes in 

the listing market. 

The Exchange intends to distribute to 

its Equity EAMs and make available on 

its Web site at http://www.ise.com a 

Regulatory Information Circular (‘‘RIC’’) 

that discloses, among other things: (1) 

The current underlying index value and 

IIV may not be updated during the Preand Post-Market Sessions; (2) lower 

liquidity in the Pre- and Post-Market 

Sessions may impact pricing; (3) higher 

volatility in the Pre- and Post-Market 

Sessions may impact pricing; (4) wider 

spreads may occur in the Pre- and PostMarket Session; (5) the circumstances 

that trigger trading halts; (6) required 

customer disclosures; and (7) suitability 

requirements. The RIC will also 

highlight that investors may be at a 

disadvantage to market professionals 

during the Pre- and Post-Market 

Sessions in that they may not have 

access to an updated index value or IIV 

that would otherwise be available 

during the Regular Market Session. The 

Exchange is also amending the 

Supplementary Material to Rule 2102 to 

require Equity EAMs to disclose 

additional risks associated with 

extended trading hours in Exchange 

Traded Funds to customers. 

Additionally the Exchange is 

proposing to amend Rule 2102(b) to 

precisely define the transition between 

the Pre-Market Session and the RegularMarket Session as is described above. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the Act 

and the rules and regulations under the 

Act applicable to a national securities 

exchange and, in particular, the 

requirements of Section 6(b) of the Act.9

Specifically, the Exchange believes the 

proposed rule change is consistent with 

Section 6(b)(5) of the Act’s 10

requirements that the rules of a national 

securities exchange be designed to 

promote just and equitable principles of 

trade, to prevent fraudulent and 

manipulative acts and, in general, to 

protect investors and the public interest. 

In particular, the proposed rule change 

will allow the Exchange to provide a 

competitive marketplace for Equity 

EAMs to trade securities during 

extended hours. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The proposed rule change does not 

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 

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: 

(i) Significantly affect the protection 

of investors or the public interest; 

(ii) Impose any significant burden on 

competition; and 

(iii) Become operative for 30 days 

from the date on which it was filed, or 

such shorter time as the Commission 

may designate if consistent with the 

protection of investors and the public 

interest, it has become effective 

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

Act 11 and Rule 19b–4(f)(6) 

thereunder.12

ISE has asked the Commission to 

waive the 30-day operative delay. The 

Commission believes that such waiver is 

consistent with the protection of 

investors and the public interest 

because such waiver should benefit 

investors by allowing ISE, without 

undue delay, to expand its hours of 

trading, which should add competition 

in the trading of equity securities and 

new derivative securities products. In 

addition, proposed ISE Rule 2102 is 

closely modeled after similar rules of 

other national securities exchanges 13

and does not raise any novel or 

significant regulatory issues. Therefore, 

the Commission designates the 

proposed rule change as operative upon 

filing.14

At any time within 60 days of the 

filing of the proposed rule change the 

Commission may summarily abrogate 

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 e-mail to rulecomments@sec.gov. Please include File 

Number SR–ISE–2008–73 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–ISE–2008–73. 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 on official business days between 

the hours of 10 a.m. and 3 p.m. Copies 

of such filing will also be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change; 


jlentini on PROD1PC65 with NOTICES
Federal Register / Vol. 73, No. 194 / Monday, October 6, 2008 / Notices 58279 

15 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(1). 

4 17 CFR 240.19b–4. 

5See Securities Exchange Act Release No. 50100 

(July 27, 2004), 69 FR 44612 (August 3, 2004) (SR– 

Phlx–2003–59) [sic]. 

6An SQT is a Registered Options Trader (‘‘ROT’’) 

who has received permission from the Exchange to 

generate and submit option quotations 

electronically through an electronic interface with 

AUTOM via an Exchange approved proprietary 

electronic quoting device in eligible options to 

which such SQT is assigned. See Exchange Rule 

1014(b)(ii)(A). 

7An RSQT is an ROT that is a member or member 

organization with no physical trading floor 

presence who has received permission from the 

Exchange to generate and submit option quotations 

electronically through AUTOM in eligible options 

to which such RSQT has been assigned. An RSQT 

may only submit such quotations electronically 

from off the floor of the Exchange. See Exchange 

Rule 1014(b)(ii)(B). 

8A non-SQT ROT is an ROT who is neither an 

SQT nor an RSQT. See Exchange Rule 

1014(b)(ii)(C). 

9See Securities Exchange Act Release No. 53166 

(January 23, 2006), 71 FR 4625 (January 27, 2006) 

(SR–Phlx–2006–05). 

10A Phlx XL participant could establish the 

Specified Engagement Size as 100% or greater of 

the number of contracts executed in each series 

during the specified time period relative to the 

disseminated size. For example, a Phlx XL 

participant could establish the Specified 

Engagement Size as 200%, in which case the Risk 

Monitor Mechanism would not be engaged until 

200% of the number of contracts in each series have 

been executed during the specified time period 

relative to the disseminated size. A Phlx XL 

participant could also establish the Specified 

Engagement Size as, for example, 120%, in which 

case the Risk Monitor Mechanism would not be 

engaged until 120% of the number of contracts in 

each series have been executed during the specified 

time period relative to the disseminated size. In any 

event, however, a Phlx XL participant may not 

establish a Specified Engagement Size that is less 

than 100%. 

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– 

2008–73 and should be submitted on or 

before October 27, 2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–23489 Filed 10–3–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58691; File No. SR–Phlx– 

2008–69] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by the 

NASDAQ OMX PHLX, Inc. Relating to 

the Phlx XL Risk Monitor Mechanism 

September 30, 2008. 

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 

September 18, 2008, the NASDAQ OMX 

PHLX, Inc. (‘‘Phlx’’ or ‘‘Exchange’’) 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 Phlx. 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, pursuant to Section 

19(b)(1) of the Act 3 and Rule 19b–4 

thereunder,4 proposes to amend 

Exchange Rule 1093, Phlx XL Risk 

Monitor Mechanism, to reflect a system 

change to its fully electronic trading 

platform for options, Phlx XL.5 The 

system change would eliminate the 

current size offset of long calls vs. long 

puts and short calls vs. short puts in the 

accounts of Exchange Streaming Quote 

Traders (‘‘SQTs’’),6 Remote Streaming 

Quote Traders (‘‘RSQTs’’),7 non-SQT 

ROTs,8 and specialists (collectively, 

‘‘Phlx XL participants’’) when the Phlx 

XL system determines whether to 

engage the Risk Monitor Mechanism (as 

defined more fully below) by calculating 

the Net Offset Specified Engagement 

Size (as defined below). 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://www.phlx.com/regulatory/ 

reg_rulefilings.aspx. 

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 

Exchange 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 the proposed rule 

change is to provide Phlx XL 

participants with additional protection 

from the unreasonable risk associated 

with the execution of an excessive 

number of contracts resulting from near 

simultaneous executions in a single 

option issue. 

Risk Monitor Mechanism 

In January, 2006, the Exchange 

adopted Rule 1093 and deployed the 

Phlx XL Risk Monitor Mechanism.9 The 

Phlx XL Risk Monitor Mechanism is a 

component of Phlx XL that counts the 

number of contracts traded in a 

particular option by each Phlx XL 

participant within a specified time 

period established by each Phlx XL 

participant (the ‘‘specified time 

period’’). The specified time period 

commences for an option when a 

transaction occurs in any series in such 

option. The specified time period may 

not exceed 15 seconds; Phlx XL 

participants may, however, set the 

specified time period for less than 15 

seconds. 

The system engages the Risk Monitor 

Mechanism in a particular option when 

the counting program has determined 

that a Phlx XL participant has traded a 

Specified Engagement Size (as defined 

below), as established by such Phlx XL 

participant, during the specified time 

period. When such Phlx XL participant 

has traded the Specified Engagement 

Size during the specified time period, 

the Risk Monitor Mechanism 

automatically removes such Phlx XL 

participant’s quotations from the 

Exchange’s disseminated quotation in 

all series of the particular option until 

such Phlx XL participant submits a new, 

revised quotation. 

Specified Engagement Size 

Each Phlx XL participant establishes 

a Specified Engagement Size for a 

particular option.10 When such Phlx XL 

participant has traded the Specified 

Engagement Size during the specified 

time period, the Risk Monitor 

Mechanism automatically removes such 

Phlx XL participant’s quotations from 

the Exchange’s disseminated quotation 

in all series of the particular option. 

The Specified Engagement Size is 

determined as follows: For each series 

in an option, the counting program 

would determine the percentage that the 

number of contracts executed in that 

series represents relative to the 

disseminated size in that series (the 

‘‘series percentage’’). The counting 

program would then determine the sum 

of the series percentages in the 


jlentini on PROD1PC65 with NOTICES