65042 Federal Register / Vol. 75, No. 203 / Thursday, October 21, 2010 / Notices 

7 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)(3)(A). 

4 17 CFR 240.19b–4(f)(6). 

5Options classes will be transferred from the 

current trading platform to the new trading 

platform. The same options cannot trade on both 

systems at the same time. The Exchange has been 

working with its members to assure a smooth 

transition to the new trading platform and will 

continue to do so up to the launch of the new 

technology and during the Transition Period. The 

name of the new trading platform, which as yet 

remains unannounced, will be communicated to 

Exchange members via circular. 

6See NYSE Arca Rule 6.62(r) which defines an 

‘‘Opening Only Order’’ as ‘‘a market order or limit 

order which is to be executed in whole or in part 

during the opening auction of an options series or 

not at all. Any portion not so executed is to be 

treated as cancelled.’’ See also NASDAQ OMX 

PHLX (‘‘PHLX’’) Rule 1066(c)(5), which defines an 

‘‘Opening-Only-Market Order’’ as ‘‘a market order 

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 

No. SR–NYSEArca–2010–89 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 No. 

SR–NYSEArca–2010–89. 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 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 such filing 

also will be available for inspection and 

copying at the principal office of NYSE 

Arca. 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 No. 

SR–NYSEArca–2010–89 and should be 

submitted on or before November 12, 

2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–26508 Filed 10–20–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63117; File No. SR–ISE– 

2010–101] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change Relating to Enhancements to 

the Exchange’s Electronic Trading 

Platform 

October 15, 2010. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 2 thereunder, 

notice is hereby given that on October 

7, 2010, International Securities 

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

filed with the Securities and Exchange 

Commission (the ‘‘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 as a 

‘‘non-controversial’’ 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 

certain rules to facilitate enhancements 

to its electronic options trading system. 

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, at the 

Commission’s Public Reference Room, 

and on the Commission’s Web site at 

http://www.sec.gov. 

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 Exchange has developed an 

enhanced technology trading platform. 

To assure a smooth transition, the 

Exchange will migrate option classes 

from its current trading system to the 

new trading system over time (the 

‘‘Transition Period’’).5 While the new 

trading platform will conform to the 

ISE’s current trading rules, with a few 

proposed changes discussed below, 

some functionality offered on the 

current system will be phased-in during 

the initial implementation of the new 

trading platform. Accordingly, the 

Exchange seeks to identify in its rules 

any differences in the execution of 

orders on the new trading platform 

during the Transition Period. The 

Exchange will issue an information 

circular regarding these rule changes, 

and will also issue information circulars 

prior to transferring options classes to 

the new trading platform during the 

Transition Period. 

Changes to Existing ISE Rules 

The Exchange proposes to implement 

two new order types, Opening Only 

Orders and Good-Till-Date Orders on 

the new trading platform. An Opening 

Only order is a limit order that can be 

entered for the opening rotation only. 

Any portion of the order that is not 

executed during the opening rotation is 

cancelled. This order type currently is 

available on other options exchanges.6


jlentini on DSKJ8SOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 203 / Thursday, October 21, 2010 / Notices 65043 

which is to be executed in whole or in part during 

the opening rotation of an options series or not at 

all’’ and Rule 1066(c)(9), which defines a ‘‘Limit on 

Opening Order’’ as ‘‘a limit order which is to be 

executed in whole or in part during the opening 

rotation of an options series or not at all. 

7See BATS Rule 11.9(b)(4), which defines a 

‘‘Good ‘til Day Order’’ as a limit order to buy or sell 

which, if not executed, will be cancelled at the 

expiration time assigned to the order, which can be 

no later than the close of the After Hours Trading 

Session.’’ 

8See ISE Rule 715(l). See Also Securities 

Exchange Act Release No. 61640 (March 3, 2010), 

75 FR 11608 (March 11, 2010) (SR–ISE–2010–13). 

9See Securities Exchange Act Release No. 51050 

(January 18, 2005), 70 FR 3758 (January 26, 2005) 

(order approving SR–ISE–2004–31). 

10As the functionality is phased-in, the Exchange 

will file a proposal under Section 19(b)(3)(A) of the 

Exchange Act and Rule 19b–4(f)(5) thereunder and 

delete the supplementary material from its rules. 

The Exchange will also notify members via circular 

as the functionality is made available on the new 

trading platform. 

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

12 15 U.S.C. 78f(b)(5). 

A Good-Till-Date Order is a limit order 

to buy or sell which, if not executed, 

will be cancelled at the sooner of the 

end of the expiration date assigned to 

the order, or the expiration of the series. 

BATS Exchange, Inc. (‘‘BATS’’) offers an 

order type that is similar in all respect 

but for the time when the order 

terminates.7 ISE proposes to adopt new 

Supplementary Material .02 to Rule 715 

to specify that these two new order 

types are applicable only to option 

classes that trade on the new trading 

platform. 

The Exchange also proposes to modify 

the Minimum Quantity order type on 

the new trading platform. Currently, a 

minimum quantity order is an order that 

is available for partial execution, but 

each partial execution must be for the 

specified number of contracts or greater. 

If the balance of the order after one or 

more partial executions is less than the 

minimum, such balance is treated as allor-none.8 On the new trading platform, 

the Exchange proposes to offer an 

enhanced version of this order type, one 

that will allow members to determine, 

after the initial minimum quantity is 

executed, whether they want any 

subsequent execution to be subject to 

the specified minimum quantity or not. 

If the member chooses not to have the 

minimum quantity applied after the first 

partial execution, the remaining balance 

of the order will trade as a regular order. 

ISE proposes to include the enhanced 

functionality of the Minimum Quantity 

Order in new Supplementary Material 

.02 to Rule 715, specifying that it is only 

available to options traded on the new 

trading platform. 

Finally, the Exchange proposes to 

enhance one of the services the ISE 

offers market makers to help them 

manage their quotations on the new 

trading platform and to discontinue one 

that is no longer necessary. While each 

ISE market maker employs its own 

sophisticated proprietary quotation and 

risk management systems to determine 

the prices and sizes at which its quotes, 

ISE rule 804(g) contains several 

voluntary tools that market makers can 

use to assist them in managing their 

quotations.9 ISE market makers are not 

required to use the ISE-provided 

functionality and can program their own 

systems to perform the same functions 

if they prefer. 

On the new trading platform, the 

Exchange proposes to expand on the so 

call ‘‘speed bump’’ functionality 

contained in Rule 804(g)(1), which 

helps market makers manage their 

exposure across all series of a class. 

Currently, this functionality permits a 

market maker to establish parameters in 

the central system to move its 

quotations in all series of an option to 

an inferior price when the market maker 

trades a specified number of contracts in 

that class as a whole within a fixed time 

period. On the new trading platform, a 

market maker will have the ability to 

have its quotations removed based on 

the number of contracts traded, the 

percentage of the total of the market 

maker quotes that have traded, the 

absolute value of the net between 

contracts bought and contracts sold, 

and/or the absolute value of the net 

between (a) calls purchased plus puts 

sold, and (b) calls sold plus puts 

purchased. The Exchange will not offer 

the so called ‘‘step-up’’ functionality on 

the new trading platform contained in 

Rule 804(g)(3), which was designed to 

replenish the size of a market maker’s 

quotation when it fell below an 

exchange-established minimum 

quotation size. This functionality has 

not proved useful to market makers. The 

Exchange proposes to include the 

services offered on the new trading 

platform in Supplementary Material .01 

to Rule 804. 

The Exchange notes that using the 

speed bump functionality offered by the 

Exchange does not alleviate market 

makers from any of the quotation 

requirements contained in the 

Exchanges rules. 

Phased-In Functionality 

Certain functionality currently 

available on the ISE will not 

immediately be available on the new 

trading platform. This functionality will 

be phased-in by the Exchange shortly 

after the initial launch of the system. 

Accordingly, the Exchange proposes to 

add supplementary material to the 

applicable rules to specify that such 

functionality is not available for options 

traded on the new trading platform,10 as 

follows: 

(i) The Exchange proposes to adopt 

Supplementary Material .10 to Rule 716 

to specify that the Block, Facilitation 

and Solicited Order Mechanisms will 

not be available for options traded on 

the new trading platform. 

(ii) The Exchange proposes to adopt 

Supplementary Material .01 to Rule 718, 

to specify that Cabinet trading will not 

be available for options traded on the 

new trading platform. 

(iii) The Exchange proposes to adopt 

Supplementary Material .03 to Rule 722 

to specify that Complex Orders will not 

be available for options traded on the 

new trading platform. 

(iv) The Exchange proposes to adopt 

Supplementary Material .08 to Rule 723 

to specify that the Price Improvement 

Mechanism will not be available for 

options traded on the new trading 

platform. 

2. Statutory Basis 

The basis under the Securities 

Exchange Act of 1934 (the ‘‘Act’’) for this 

proposed rule change is the requirement 

under Section 6(b),11 in general, and 

Section 6(b)(5)12 in particular, that an 

exchange have rules that are 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 for a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. In particular, the 

Exchange believes the new trading 

platform will improve the efficiency and 

quality of options executions on the 

Exchange, and that the proposed new 

order types and enhanced speed bump 

functionality on the new trading 

platform will provide greater flexibility 

for Exchange users in how they quote 

and trade, while also enhancing the 

overall market quality for options traded 

on the Exchange. The Exchange further 

believes that the proposed rule change 

will facilitate an orderly transition from 

the Exchange’s current technology 

trading platform to the new trading 

platform. 

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. 


jlentini on DSKJ8SOYB1PROD with NOTICES
65044 Federal Register / Vol. 75, No. 203 / Thursday, October 21, 2010 / Notices 

13 15 U.S.C. 78s(b)(3)(A). 

14 17 CFR 240.19b–4(f)(6). When filing a proposed 

rule change pursuant to Rule 19b–4(f)(6) under the 

Act, an exchange is required to give the 

Commission written notice of its 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 Commission 

notes that the Exchange has satisfied this 

requirement. 15 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. 62782 

(August 27, 2010), 75 FR 53994 (‘‘Notice’’). 

4See Nasdaq Rule 5810(c)(3)(A). 

5 In its filing, Nasdaq refers to the 180-day 

compliance period as a ‘‘grace’’ period. 

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: (1) Significantly affect 

the protection of investors or the public 

interest; (2) impose any significant 

burden on competition; and (3) 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 Act13 and Rule 19b– 

4(f)(6) thereunder.14

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

Number SR–ISE–2010–101 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–2010–101. 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 website 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– 

2010–101 and should be submitted on 

or before November 12, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–26509 Filed 10–20–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63110; File No. SR– 

NASDAQ–2010–107] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Order 

Granting Approval to a Proposed Rule 

Change To Modify the Eligibility 

Criteria for the Second Compliance 

Period for a Bid Price Deficiency on 

the Nasdaq Capital Market 

October 14, 2010. 

I. Introduction 

On August 25, 2010, The NASDAQ 

Stock Market LLC (‘‘Nasdaq’’) 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 proposed rule 

change to modify the eligibility criteria 

in order for a listed company to qualify 

for the second compliance period for a 

bid price deficiency on the Nasdaq 

Capital Market. The proposed rule 

change was published for comment in 

the Federal Register on September 2, 

2010.3 The Commission received no 

comment letters on the proposal. This 

order approves the proposed rule 

change. 

II. Description of the Proposal 

Nasdaq is proposing, in order for a 

company to receive a second 

compliance period for a bid price 

deficiency on the Nasdaq Capital Market 

(‘‘Capital Market’’), to modify the 

eligibility criteria concerning market 

value of publicly held shares. Under the 

current Nasdaq rules, when a company 

has a closing bid price below $1 for 30 

consecutive days, it is deemed deficient 

under Nasdaq’s bid price continued 

listing standard, and promptly receives 

written notice that it has 180 calendar 

days from such notification to regain 

compliance.4 Compliance can be 

achieved by maintaining a minimum $1 

closing bid price for ten consecutive 

days. At the expiration of the 180-day 

compliance period, a company can 

receive an additional 180-day 

compliance period,5 provided it is 

either already listed on the Capital 

Market or transfers to that market and 

satisfies all of the Capital Market’s 


jlentini on DSKJ8SOYB1PROD with NOTICES