Document ID: SEC-2009-0987-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend a Pilot Program for Short Term Options Series
Posted Date: 2009-07-17T04:00Z

[Federal Register: July 17, 2009 (Volume 74, Number 136)]
[Notices]               
[Page 34811-34813]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17jy09-118]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60281; File No. SR-ISE-2009-49]

 
Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change To Extend a Pilot Program for Short Term Options Series

July 10, 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 8, 2009, the International Securities Exchange, LLC (the 
``Exchange'' or the ``ISE'') filed with the Securities and Exchange 
Commission the proposed rule change as described in Items I and II 
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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[[Page 34812]]

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 extend the Short 
Term Option Series Pilot Program (``Pilot Program'') for an additional 
year. The text of the proposed rule change is available on the 
Exchange's Web site http://www.ise.com, at the Exchange's Office of the 
Secretary, and at the Commission's Public Reference Room.

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
    On July 12, 2005, the Commission approved the Short Term Option 
Series Pilot Program (``Pilot Program'') that allows ISE to list and 
trade Short Term Option Series.\3\ Under the terms of the Pilot 
Program, the Exchange can select up to five options classes on which 
Short Term Option Series may be opened on any Short Term Option Series 
Opening Date. The Exchange is also allowed to list Short Term Option 
Series on any option class that is selected by other securities 
exchanges that employ a similar pilot program under their respective 
rules.
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    \3\ See Securities Exchange Act Release No. 52012 (July 12, 
2005), 70 FR 41246 (July 18, 2005).
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    The Pilot Program was subsequently extended \4\ and the current 
Pilot Program is set to expire on July 12, 2009.\5\ The purpose of this 
proposed rule change is to extend the Pilot Program for an additional 
one year. The Exchange believes that Short Term Option Series provides 
investors with a flexible and valuable tool to manage risk exposure, 
minimize capital outlays, and be more responsive to the timing of 
events affecting the securities that underlie option contracts. While 
ISE has not listed any Short Term Option Series during the Pilot 
Program, there has been investor interest in trading short-term options 
at the Chicago Board Options Exchange. For competitive reasons and in 
order to have the ability to respond to customer interest in Short Term 
Option Series, the Exchange proposes the continuation of the Pilot 
Program at ISE.
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    \4\ See Securities Exchange Act Release Nos. 54117 (July 12, 
2006), 71 FR 40564 (July 17, 2006); 56047 (July 11, 2007), 72 FR 
39106 (July 17, 2007).
    \5\ See Securities Exchange Act Release No. 58020 (June 25, 
2008), 73 FR 38000 (July 2, 2008).
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    In the original proposal to establish the Pilot Program, the 
Exchange stated that if it were to propose an extension or an expansion 
of the Pilot Program, the Exchange would submit, along with any filing 
proposing such amendments to the Pilot Program, a report (``Pilot 
Program Report'') that would provide an analysis of the Pilot Program 
covering the entire period during which the Pilot Program was in 
effect. Since the Exchange did not list any Short Term Option Series 
during the preceding year of the Pilot Program, there is no data 
available to compile such a report at this time. Therefore, the 
Exchange is not submitting a Pilot Program Report with this proposal.
    Finally, the Exchange represents that it has the necessary systems 
capacity to support the listing of Short Term Options Series should it 
determine to do so in the future.
2. Statutory Basis
    The Exchange believes that Short Term Option Series increases the 
variety of listed options available to investors and provides investors 
with a valuable tool to manage risk exposure, minimize capital outlays 
and be more responsive to the timing of events affecting the securities 
that underlie options contracts. For these reasons, the Exchange 
believes the proposed rule change is consistent with Section 6(b) of 
the Act.\6\ Specifically, the Exchange believes the proposed rule 
change is consistent with Section 6(b)(5) \7\ requirements that the 
rules of an exchange be designed to promote just and equitable 
principles of trade, serve 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.
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    \6\ 15 U.S.C. 78(f)(b).
    \7\ 15 U.S.C. 78(f)(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 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, if consistent with the 
protection of investors and the public interest, it has become 
effective pursuant to 19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(6) 
thereunder.\9\
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file 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 this requirement.
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    The Exchange has asked the Commission to waive the operative delay 
to permit the proposed rule change to become operative prior to the 
30th day after filing. The Commission has determined that waiving the 
30-day operative delay of the Exchange's proposal is consistent with 
the protection of investors and the public interest and will promote 
competition because such waiver will allow ISE to continue the existing 
Pilot Program without interruption.\10\ Therefore, the Commission 
designates the proposal operative upon filing.
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    \10\ 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 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.

[[Page 34813]]

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-2009-49 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-2009-49. 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 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 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-2009-49 and should be 
submitted on or before August 7, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. E9-17006 Filed 7-16-09; 8:45 am]

BILLING CODE 8010-01-P