Document ID: SEC-2007-0283-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: International Securities Exchange, Inc.
Posted Date: 2007-02-26T05:00Z

[Federal Register: February 26, 2007 (Volume 72, Number 37)]
[Notices]               
[Page 8408-8410]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26fe07-125]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55311; File No. SR-ISE-2007-15]

 
Self-Regulatory Organizations; International Securities Exchange, 
Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change Relating to the Extension of a Pilot Period to Increase Position 
Limits and Exercise Limits for Equity Options and Options on the 
Nasdaq-100 Tracking Stock

February 16, 2007.
    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 February 13, 2007, the International Securities Exchange, Inc. 
(``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 
ISE. The Exchange has filed the proposal as a ``non-controversial'' 
rule change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 
19b-4(f)(6) thereunder,\4\ which renders it 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).
    \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

    ISE proposes to extend the time period for Exchange Rule 412 and 
Rule 414 position and exercise limits pilot

[[Page 8409]]

program for equity option contracts and options on the Nasdaq-100 Index 
Tracking Stock (``QQQQ'') (``Pilot Program''). The text of the proposed 
rule change is available at ISE, the Commission's Public Reference 
Room, and http://www.iseoptions.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, ISE 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 Pilot Program provides for an increase to the standard position 
and exercise limits for equity option contracts and for options on 
QQQQs.\5\ The Pilot Program, after being extended on prior 
occasions,\6\ is set to expire on March 1, 2007.\7\ Specifically, the 
Pilot Program increased the applicable position and exercise limits for 
equity options and options on the QQQQ to the following levels:
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    \5\ See Securities Exchange Act Release No. 51295 (March 2, 
2005), 70 FR 11292 (March 8, 2005) (SR-ISE-2005-14) (``Pilot Program 
Notice'').
    \6\ See Securities Exchange Act Release Nos. 53345 (February 22, 
2006), 71 FR 10579 (March 1, 2006) (SR-ISE-2006-10); and 52265 
(August 15, 2005), 70 FR 48996 (August 22, 2005) (SR-ISE-2005-39).
    \7\ See Securities Exchange Act Release No. 54335 (August 18, 
2006), 71 FR 50954 (August 28, 2006) (SR-ISE-2006-47).

------------------------------------------------------------------------
   Current equity option contract        Pilot program equity option
             limit \8\                          contract limit
------------------------------------------------------------------------
                         13,500                               25,000
                         22,500                               50,000
                         31,500                               75,000
                         60,000                              200,000
                         75,000                              250,000
------------------------------------------------------------------------
                               CurrenPilot program QQQQ option contract
                                                               limit
------------------------------------------------------------------------
              300,000 contracts                   900,000 contracts
------------------------------------------------------------------------
\8\ Except when the Pilot Program is in effect.

    The purpose of the proposed rule change is to extend the Pilot 
Program for an additional six-month period, until September 1, 2007. 
The Exchange believes that extending the Pilot Program for this 
additional period is warranted due to the positive feedback from 
members and for the reasons cited in the original rule filing that 
proposed the adoption of the Pilot Program.\9\ Additionally, the 
Exchange represents that it has not experienced any problems or 
difficulties relating to the Pilot Program since its inception. For 
these reasons, the Exchange requests that the Commission extend the 
Pilot Program until September 1, 2007.
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    \9\ See Pilot Program Notice, supra note 5.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \10\ in general, and furthers the objective of Section 
6(b)(5) of the Act \11\ in particular, in that it is designed to 
promote just and equitable principles of trade and to protect investors 
and the public interest.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 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.

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 forgoing 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 
after the date of this filing, or such shorter time as the Commission 
may designate, it has become effective pursuant to Section 19(b)(3)(A) 
of the Act \12\ and Rule 19b-4(f)(6) thereunder.\13\
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under 19b-4(f)(6) normally may not 
become operative prior to 30 days 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 Exchange has requested that the 
Commission waive the 30-day operative delay. The Commission believes 
that waiving the 30-day operative delay is consistent with the 
protection of investors and in the public interest because it will 
allow the Pilot Program to continue uninterrupted.\16\
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    \14\ 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. ISE has satisfied the five-day pre-filing 
requirement.
    \15\ Id.
    \16\ For the purposes only of waiving the 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 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 Act.

[[Page 8410]]

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 No. SR-ISE-2007-15 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File No. SR-ISE-2007-15. 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 will also 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 No. SR-
ISE-2007-15 and should be submitted on or before March 19, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. E7-3157 Filed 2-23-07; 8:45 am]

BILLING CODE 8010-01-P