Document ID: SEC-2010-0925-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: International Securities Exchange, LLC
Posted Date: 2010-06-24T04:00Z

[Federal Register: June 24, 2010 (Volume 75, Number 121)]
[Notices]               
[Page 36143-36144]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24jn10-91]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62301; File No. SR-ISE-2010-49]

 
Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change Related to Do-Not-Route Orders

June 16, 2010.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Exchange Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is 
hereby given that on June 14, 2010, the International Securities 
Exchange, LLC (the ``Exchange'' or the ``ISE'') filed with the 
Securities and Exchange Commission (the ``SEC'' or the ``Commission'') 
the proposed rule change as described in Items I, II, and III below, 
which items have been prepared by the self-regulatory organization. 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to adopt a do-not-route order type. The text 
of the rule amendment is as follows (additions are in italics):

Rule 715. Types of Orders

    (a) through (l) no change.
    (m) Do-Not-Route Orders. A do-not-route order is a market or limit 
order that is to be executed in whole or in part on the Exchange only. 
Due to prices available on another options exchange (as provided in 
Chapter 19 (Order Protection; Locked and Crossed Markets)), any balance 
of a do-not-route order that cannot be executed upon entry, or placed 
on the Exchange's limit order book, will be automatically cancelled.
Supplementary Material to Rule 715
    .01 no change.
     * * *

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

    (1) Purpose--The Exchange's rules related to intermarket linkage 
provide, among other things, that transactions not be executed at 
prices that are inferior to the national best bid or offer (the 
``trade-through rule'').\3\ Currently, the Exchange cancels marketable 
non-customer orders that cannot be executed because its prices are 
inferior to the national best bid or offer, while such marketable 
customer orders are presented to the primary market maker for 
handling.\4\ The Exchange is proposing to adopt a do-not-route order so 
that customers may indicate that they want their orders canceled if 
they are marketable, but not executable on the Exchange. If a customer 
order is not marked as a do-not-route order, it would continue to be 
presented to the primary market maker for handling if it is marketable 
but not executable on the Exchange. A do-not-route order is a market or 
limit order. This order type is commonly offered on other exchanges.\5\
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    \3\ ISE Rule 1901 (Order Protection).
    \4\ ISE Rule 714 (Automatic Execution of Orders).
    \5\ E.g., NYSE Arca Rule 6.62(p) (PNP Orders are not routable 
orders); NASDAQ OMX PHLX Rule 1066(c)(8) (Immediate or Cancel Orders 
are not routable orders); and CBOE Rule 6.53(s) (CBOE Only orders 
are not routable orders).
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    (2) Basis--The basis under the Securities Exchange Act of 1934 
(``Exchange 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, the proposal will give customers 
greater control over where their orders are executed if they so choose.

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 Exchange 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 after the date of the filing, or such 
shorter time as the Commission may designate, it has become effective 
pursuant to Section 19(b)(3)(A) of the Act \6\ and Rule 19b-4(f)(6) 
thereunder.\7\
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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the self-regulatory organization to 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 Exchange has satisfied this requirement.
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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 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:

[[Page 36144]]

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-2010-49 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-2010-49. 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, 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-2010-49 and should be submitted on or before July 
15, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-15242 Filed 6-23-10; 8:45 am]
BILLING CODE 8011-01-P