Document ID: SEC-2009-1820-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change byInternational Securities Exchange, LLC Relating to Conforming ISE Rule 622 With Comparable NASD Rule 11870
Posted Date: 2009-12-29T05:00Z

[Federal Register: December 29, 2009 (Volume 74, Number 248)]
[Notices]               
[Page 68885-68886]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29de09-135]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61225; File No. SR-ISE-2009-104]

 
Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by International Securities 
Exchange, LLC Relating to Conforming ISE Rule 622 With Comparable NASD 
Rule 11870

December 22, 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 December 14, 2009, the International Securities Exchange, LLC 
(the ``Exchange'' or the ``ISE'') filed with the Securities and 
Exchange Commission (the ``SEC'' or ``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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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend ISE Rule 622 (Transfer of Accounts) 
to conform it to the corresponding rule of the Financial Industry 
Regulatory Authority (``FINRA''), formerly the National Association of 
Securities Dealers (``NASD''), for the purposes of the 17d-2 Agreement.

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 proposes to amend ISE Rule 622 (Transfer of Accounts) 
to conform it to corresponding NASD Rule 11870 (Customer Account 
Transfer Contracts) for the purposes of the agreement between the 
parties pursuant to Rule 17d-2 \3\ under the Securities Exchange Act of 
1934 (the ``Exchange Act'') (that agreement, the ``17d-2 Agreement'') 
and the related certification by the Exchange which states that the 
requirements contained in certain ISE rules are identical to, or 
substantially similar to, certain NASD rules that have been identified 
as comparable (that certification, the ``Common Rule 
Certification'').\4\
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    \3\ 17 CFR 240.17d-2.
    \4\ See SEC Release No. 55367 (February 27, 2007), 72 FR 9983 
(March 6, 2007) (Order approving and declaring effective a plan for 
the allocation of regulatory responsibilities between ISE and NASD).
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    Specifically, the Exchange proposes to amend ISE Rule 622(b)(1) by 
reducing the number of days from five (5) business days to one (1) 
business day that the Carrying Member (as defined in Rule 622(a)) must 
(i) validate and return the transfer instruction (with an attachment 
reflecting all positions and money balances as shown on its books) to 
the Receiving Member (as defined in Rule 622(a)), or (ii) take 
exception to the transfer instruction for reasons other than securities 
positions or money balance discrepancies and advise the Receiving 
Member of the exception taken. Additionally, the Exchange proposes to 
add rule text that will allow for the time frame set forth in paragraph 
(b)(1) to change from time-to-time when such time frame is changed in 
any publication, relating to the ACATS facility, by the National 
Securities Clearing Corporation. The changes discussed above are 
identical to the requirements set forth in NASD Rule 11870. By making 
these changes, the Exchange is ensuring that FINRA will retain 
regulatory responsibility for this rule under the 17d-2 Agreement 
because ISE Rule 622 will remain identical to NASD rule 11870, as 
specified in the Common Rule Certification.
2. Statutory Basis
    The basis under the Exchange Act for this proposed rule change is 
found in Section 6(b)(5), in that the proposed rule filing is designed 
to promote just and equitable principles of trade, remove impediments 
to and perfect the mechanisms of a free and open market and a national 
market system by creating consistency between the requirements 
contained in rules of the ISE and NASD that are covered by an agreement 
approved by the Commission under Rule 17d-2.

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 rule change: (1) Does not significantly 
affect the protection of investors or the public interest; (2) does not 
impose any significant burden on competition; and (3) the Exchange 
provided the Commission with notice of its intent to file the proposed 
rule change at least five days prior to the filing date, the proposed 
rule change has become effective pursuant to Section 19(b)(3)(A)

[[Page 68886]]

of the Act \5\ and Rule 19b-4(f)(6) \6\ thereunder.
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    \5\ 15 U.S.C. 78s(b)(3)(A).
    \6\ 17 CFR 240.19b-4(f)(6).
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    This proposed rule change does not significantly affect the 
protection of investors or the public interest, does not impose any 
significant burden on competition, and, by its terms, 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 Exchange provided the 
Commission with written notice of its intent to file this proposed rule 
change at least five business days prior to the date of filing of the 
proposed rule change. This proposal amends ISE Rule 622 to conform the 
language to comparable NASD Rule 11870 for the purpose an agreement 
that was recently approved by the Commission under Rule 17d-2. The 
Exchange requests that the Commission waive the 30-day operative delay 
period for ``non-controversial'' proposals under Exchange Act Rule 19b-
4(f)(6) 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 
because it will help foster consistency between the rulebooks of the 
self-regulatory organizations.\7\ Application of the new rules should 
promote clarity for market participants relying upon the rules. For 
these reasons, the Commission designates that the proposed rule change 
become immediately operative.
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    \7\ For purposes only of waiving the 30-day operative delay, the 
Commission has considered the proposal's impact on efficiency, 
competition, and capital formation. 15 U.S.C. 78c(f).
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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-2009-104 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-2009-104. 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 \8\, 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 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 publicly available. All 
submissions should refer to File Number SR-ISE-2009-104 and should be 
submitted on or before January 19, 2010.
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    \8\ The text of the proposed rule change is available on the 
Commission's Web site at http://www.sec.gov/.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-30791 Filed 12-28-09; 8:45 am]

BILLING CODE 8011-01-P