Document ID: SEC-2008-0867-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: International Securities Exchange, LLC
Posted Date: 2008-06-30T04:00Z

[Federal Register: June 30, 2008 (Volume 73, Number 126)]
[Notices]               
[Page 36941-36943]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30jn08-131]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58005; File No. SR-ISE-2008-45]

 
Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change Relating to the Definition of Qualified Contingent Trade

June 23, 2008.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934

[[Page 36942]]

(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on June 12, 2008, the International Securities Exchange, LLC (``ISE'' 
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 substantially prepared by the Exchange. 
The ISE designated the proposed rule change as ``non-controversial'' 
under Section 19(b)(3)(A)(iii) 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The ISE is proposing to amend its rules to delete from the 
definition of Qualified Contingent Trade the requirement that such 
transactions are for a minimum size of 10,000 shares or $200,000 in 
transaction value. The text of the proposed rule change is available at 
the Exchange, the Commission's Public Reference Room, and http://
www.ise.com.

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 ISE 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's rules currently define the term ``Qualified 
Contingent Trade'' according to the definition included in an exemptive 
order issued by the Commission on August 31, 2006.\5\ Pursuant to the 
Exemptive Order, Qualified Contingent Trades are exempt from the trade-
through restrictions of Regulation NMS.\6\ The Exchange has 
incorporated an identical definition of Qualified Contingent Trades 
into ISE Rule 2107(c) so that such trades could be exempted from 
Exchange rules restricting intermarket trade-throughs.\7\
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    \5\ See Securities Exchange Act Release No. 54389 (August 31, 
2006), 71 FR 52829 (September 7, 2006) (Order Granting an Exemption 
for Qualified Contingent Trades from Rule 611(a) of Regulation NMS) 
(``Exemptive Order'').
    \6\ See Exemptive Order and 17 CFR 242.611.
    \7\ See Securities Exchange Act Release No. 56671 (October 18, 
2007), 72 FR 60400 (October 24, 2007) (SR-ISE-2007-88).
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    On April 4, 2008, the Commission issued a revised exemptive order 
eliminating one of the elements of the original Qualified Contingent 
Trade definition.\8\ Based upon a request from the Chicago Board 
Options Exchange, Incorporated, the Revised Exemptive Order deleted the 
minimum size conditions of 10,000 shares or $200,000, which were part 
of the original definition. The Exchange proposes to eliminate these 
size conditions from its own definition of Qualified Contingent Trade 
in order to operate its marketplace in a manner consistent with the 
Revised Exemptive Order.
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    \8\ See Securities Exchange Act Release No. 57620 (April 4, 
2008), 73 FR 19271 (April 9, 2008) (Order Modifying the Exemption 
for Qualified Contingent Trades from Rule 611(a) of Regulation NMS) 
(``Revised Exemptive Order'').
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    Accordingly, the Exchange proposes to amend its Rule 2107(c)(4)(ii) 
to eliminate any minimum size conditions in its definition of the term 
Qualified Contingent Trade.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with Section 
6(b) of the Act,\9\ in general, and Section 6(b)(5) of the Act,\10\ in 
particular, in that it is designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in facilitating transactions in securities, 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.
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    \9\ 15 U.S.C. 78f.
    \10\ 15 U.S.C. 78f(b)(5).
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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 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 after the date of 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 \11\ and subparagraph (f)(6) of Rule 
19b-4 thereunder.\12\ As required under Rule 19b-4(f)(6)(iii),\13\ the 
ISE provided the Commission with 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.
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ 17 CFR 240.19b-4(f)(6)(iii).
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    A proposed rule change filed under Rule 19b-4(f)(6) normally may 
not become operative prior to the 30th day after the date of 
filing.\14\ However, Rule 19b-4(f)(6)(iii) \15\ permits the Commission 
to designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The ISE requested that 
the Commission waive the 30-day operative delay for ``non-
controversial'' proposals under Rule 19b-4(f)(6) \16\ and make the 
proposed rule change effective and operative upon filing. The 
Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest. 
The Commission notes that the proposed language is identical to 
language contained in the Revised Exemptive Order.\17\ In addition, the 
Commission notes that the Chicago Stock Exchange, Inc. recently made 
identical changes to its qualified

[[Page 36943]]

contingent trade definition.\18\ Accordingly, the Commission designates 
the proposed rule change operative upon filing with the Commission.\19\
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    \14\ Id.
    \15\ Id.
    \16\ Id.
    \17\ See supra note 8.
    \18\ See Securities Exchange Act Release No. 57767 (May 2, 
2008), 73 FR 26174 (May 8, 2008) (SR-CHX-2008-06).
    \19\ For 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).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate the 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 rule-comments@sec.gov. Please include 
File Number SR-ISE-2008-45 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-2008-45. 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 the 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-2008-45 and should be 
submitted on or before July 21, 2008.
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    \20\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-14765 Filed 6-27-08; 8:45 am]

BILLING CODE 8010-01-P