36290 Federal Register / Vol. 74, No. 139 / Wednesday, July 22, 2009 / Notices 

meets its obligations as a self-regulatory 

organization. 

5The Commission notes that the proposed 

principles set forth in proposed Rule 2.50 are as 

follows: 

1. The Exchange will exercise its powers and its 

managerial influence to ensure that C2 fulfills its 

self-regulatory obligations by: 

Directing C2 to take action necessary to effectuate 

its purposes and functions as a national securities 

exchange operating pursuant to the Exchange Act; 

and ensuring that C2 has and appropriately 

allocates such financial, technological, technical, 

and personnel resources as may be necessary or 

appropriate to meet its obligations under the 

Exchange Act. 

2. The Exchange will refrain from taking any 

action with respect to C2 that, to the best of its 

knowledge, would impede, delay, obstruct, or 

conflict with efforts by C2 to carry out its selfregulatory obligations under the Exchange Act and 

the rules and regulations thereunder. 

6 15 U.S.C. 78s(b)(1). 

7 15 U.S.C. 78f(b). 

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

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 In Amendment No. 1, the Exchange made 

technical, non-substantive corrections to Exhibit 1. 

policy sets forth certain principles that 

will guide CBOE in its fulfillment of its 

responsibilities as parent company of C2 

with ultimate responsibility for C2’s 

compliance with its statutory 

responsibilities as a self-regulatory 

organization should the Commission 

grant C2’s application for registration.5

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) 6 and the rules and regulations 

thereunder and, in particular, the 

requirements of Section 6(b) of the Act.7

Specifically, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) 8 requirements that 

the rules of an exchange be designed to 

promote just and equitable principles of 

trade, to prevent fraudulent and 

manipulative acts, to remove 

impediments to and to perfect the 

mechanism for a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

CBOE does not believe that the 

proposed rule change will impose any 

burden on competition 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 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

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 self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve such proposed 

rule change, or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

The Exchange has requested 

accelerated approval of this proposed 

rule change prior to the 30th day after 

the date of publication of notice in the 

Federal Register. The Commission is 

considering granting accelerated 

approval of the proposed rule change at 

the end of a 15-day comment period. 

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–CBOE–2009–048 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–CBOE–2009–048. 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, 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 will also be available 

for inspection and copying at the 

principal office of the self-regulatory 

organization. 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–CBOE– 

2009–048 and should be submitted on 

or before August 6, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–17350 Filed 7–21–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60311; File No. SR–ISE– 

2009–51] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change, as Modified by Amendment 

No. 1 Thereto, To Expose All-or-None 

Orders on a Three-Month Pilot Basis 

July 15, 2009. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on July 9, 

2009, the International Securities 

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

‘‘ISE’’) 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 self-regulatory organization. On 

July 13, 2009, ISE filed Amendment 

No. 1 3 to the proposed rule change. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 


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Federal Register / Vol. 74, No. 139 / Wednesday, July 22, 2009 / Notices 36291 

4See ISE Rule 716(d) (Facilitation Mechanism), 

Rule 716(e) (Solicited Order Mechanism) and Rule 

723 (Price Improvement Mechanism for Crossing 

Transactions). 

5Supplementary Material .02 to ISE Rule 713. 

6 Securities Exchange Act Release No. 57478 

(March 12, 2008), 73 FR 14521(March 18, 2008). 

change, as amended, from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange is proposing to amend 

its rules to implement a broadcast 

message that will inform members when 

a non-marketable all-or-none limit order 

is placed on the limit order book. The 

text of the proposed rule change is as 

follows, with additions italicized: 

Rule 717. Limitations on Orders 

* * * * * 

Supplementary Material to Rule 717 

.01–.03 No Change. 

.04 A non-marketable all-or-none 

limit order shall be deemed ‘‘exposed’’ 

for the purposes of paragraphs (d) and 

(e) one second following a broadcast 

notifying members that such an order to 

buy or sell a specified number of 

contracts at a specified price has been 

received in the options series. This 

provision shall be in effect on a pilot 

basis expiring October 9, 2009. 

* * * * * 

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 

self-regulatory organization 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 

(a) Purpose—Pursuant to ISE Rule 

717(d) and (e), Electronic Access 

Members must expose agency orders on 

the Exchange for at least one second 

before entering a contra-side proprietary 

order or a contra-side order that was 

solicited from a broker-dealer, or utilize 

one of the Exchange’s execution 

mechanisms that have one second 

exposure periods built into the 

functionality.4

The Exchange operates an integrated 

system that consolidates all market 

maker quotes and orders, and 

automatically disseminates the best bid 

and offer. If a limit order is designated 

as all-or-none, the contingency that the 

order must be executed in full makes it 

ineligible for display in the best bid or 

offer. Nevertheless, such orders are 

maintained in the system and remain 

available for execution after all other 

trading interest at the same price has 

been exhausted.5 Upon the receipt of a 

non-marketable all-or-none limit order, 

the system automatically will send a 

broadcast message to all members 

notifying them that an all-or-none order 

to buy or to sell a specified number of 

contracts at a specified price has been 

placed on the book. 

The purpose of this rule change is to 

specify that a non-marketable all-ornone limit order is deemed ‘‘exposed’’ 

for the purposes of Rule 717(d) and (e) 

one second following a broadcast 

notifying members that such an order to 

buy or sell a specified number of 

contracts at a specified price has been 

received in the options series. Thus, all 

of the terms of the order will be 

disclosed to all members. The Exchange 

proposes to adopt this rule change on a 

three-month pilot basis expiring October 

9, 2009. 

The Exchange notes that the 

Commission has previously determined 

that an order can be deemed ‘‘exposed’’ 

even in circumstances where the actual 

terms of the order are not disseminated. 

Specifically, the Commission approved 

the Price Improving Order type on the 

Nasdaq Options Market, which is a limit 

order in penny increments that is 

rounded to the minimum price variation 

in the security for display purposes.6

The Commission concluded that this 

order could be deemed ‘‘exposed’’ 

under the NOM rule that is 

substantively identical to the exposure 

requirement contained in ISE Rule 

717(d) and (e). Although the actual 

terms of the order are not displayed to 

market participants, the Commission 

found that the ability to ‘‘fish’’ inside 

the displayed quote, coupled with the 

restriction on participants that initially 

submitted the Price Improving Order 

from trading with that order until after 

the exposure period had elapsed, 

provided a meaningful opportunity for 

interaction prior to the time at which 

the submitting participant could interact 

with the order. The Commission also 

noted that Price Improving Orders might 

be executed against other trading 

interest in the system, which will also 

be the case with respect to all-or-none 

orders on the Exchange. 

The Exchange believes its broadcast 

message provides complete exposure of 

all-or-none orders, which is greater 

exposure than that of Price Improving 

Orders at NOM, as market participants 

will be explicitly informed when there 

is a non-displayed order, as well as the 

size and price of such order. In contrast, 

the only indication that there may be a 

Price Improving Order available for 

execution on NOM is an increase in size 

at the NOM best bid or offer (‘‘BBO’’) or 

a new displayed price at the NOM BBO. 

Since the displayed size and price 

change constantly, NOM market 

participants do not know whether there 

is in fact a non-displayed order 

available for execution. Therefore, the 

opportunity for NOM participants to 

‘‘fish’’ for such non-displayed orders is 

greatly diminished. In contrast, the ISE’s 

broadcast message will specify all of the 

terms of an all-or-none order. 

(b) Basis—The basis under the Act for 

this proposed rule change is the 

requirement under Section 6(b)(5) that 

an exchange have rules that are 

designed to promote just and equitable 

principles of trade, and 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, under the 

proposed rule change all-or-none orders 

will be exposed to all members on a 

three-month pilot basis so that there is 

a greater opportunity for market 

participants to interact with such 

orders. 

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 proposed rule change: (i) 

Does not significantly affect the 

protection of investors or the public 

interest; (ii) does not impose any 

significant burden on competition; and 


jlentini on DSKJ8SOYB1PROD with NOTICES
36292 Federal Register / Vol. 74, No. 139 / Wednesday, July 22, 2009 / Notices 

7 15 U.S.C. 78s(b)(3)(A). 

8 17 CFR 240.19b–4(f)(6). 

9 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule 

19b–4(f)(6)(iii) requires that a self-regulatory 

organization submit to 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 deems this 

requirement to be met. 

10 Id. 

11For the purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

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

12For purposes of calculating the 60-day period 

within which the Commission may summarily 

abrogate the proposed rule change under Section 

19(b)(3)(C) of the Act, the Commission considers 

the period to commence on July 13, 2009, the date 

on which ISE submitted Amendment No. 1. See 15 

U.S.C. 78s(b)(3)(C). 13 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. 60028 

(June 2, 2009), 74 FR 27364 (June 9, 2009) 

(‘‘Notice’’). 

4See Securities Exchange Act Release No. 47925 

(May 23, 2003), 68 FR 33548 (June 4, 2003) (Order 

Approving File No. SR–NASD–98–80). 

5The extensions were filed for immediate 

effectiveness and were therefore not approved by 

the Commission. See Securities Exchange Act 

Release No. 51860 (June 16, 2005), 70 FR 36427 

(June 23, 2005) (SR–NASD–2005–061); Securities 

Exchange Act Release No. 55819 (May 25, 2007), 72 

FR 30895 (June 4, 2007) (SR–NASD–2007–033); and 

Securities Exchange Act Release No. 60035 (June 3, 

2009), 74 FR 27360 (June 9, 2009) (SR–FINRA– 

2009–034). 

6A TCDO is a preliminary order issued in 

connection with an underlying disciplinary 

proceeding that has been initiated or will be 

initiated immediately. 

7The rule filing does not make any substantive 

changes to the existing pilot program. 

(iii) does not become operative for 30 

days after the date of the filing, or such 

shorter time as the Commission may 

designate if consistent with the 

protection of investors and the public 

interest, the proposed rule change has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 7 and Rule 19b– 

4(f)(6) thereunder.8

A proposed rule change filed under 

Rule 19b–4(f)(6) normally may not 

become operative prior to 30 days after 

the date of filing.9 However, Rule 19b– 

4(f)(6)(iii) 10 permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. ISE 

has requested that the Commission 

waive the 30-day operative delay. ISE 

states that under the proposal, all-ornone orders will be exposed to all 

members so that there is a greater 

opportunity for market participants to 

interact with such orders. The 

Commission also notes that the proposal 

is on a three-month pilot basis. For 

these reasons, the Commission believes 

that waiving the 30-day operative delay 

is consistent with the protection of 

investors and the public interest, and 

designates the proposed rule change to 

be operative upon filing with the 

Commission.11

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.12

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–2009–51 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–2009–51. 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, 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 ISE. 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–2009–51 and should be 

submitted on or before August 12, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–17351 Filed 7–21–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60306; File No. SR–FINRA– 

2009–035] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Order Approving a 

Proposed Rule Change To Adopt Its 

Temporary and Permanent Cease and 

Desist Authority on a Permanent Basis 

July 14, 2009. 

On May 18, 2009, the Financial 

Industry Regulatory Authority, Inc. 

(‘‘FINRA’’) (f/k/a the National 

Association of Securities Dealers, Inc. 

(‘‘NASD’’)) 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 adopt its rules 

regarding the issuance of issue 

temporary and permanent cease and 

desist orders on a permanent basis. The 

proposal was published for comment in 

the Federal Register on June 9, 2009.3

The Commission received no comments 

on the proposal. This order approves the 

proposed rule change. 

Since May 2003, pursuant to a pilot 

program approved by the Commission 4

and subsequent extensions,5 FINRA has 

had the authority to issue temporary 

cease and desist orders (‘‘TCDOs’’); 6

impose permanent cease and desist 

orders as a remedy in disciplinary cases; 

and enforce cease and desist orders. 

FINRA proposed to make the existing 

pilot program permanent.7

After careful review of the proposal, 

the Commission finds that the proposed 

rule change is consistent with the 

requirements of the Act and the rules 

and regulations thereunder applicable to 


jlentini on DSKJ8SOYB1PROD with NOTICES