Document ID: SEC-2008-0191-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: International Securities Exchange, LLC
Posted Date: 2008-02-05T05:00Z

[Federal Register: February 5, 2008 (Volume 73, Number 24)]
[Notices]               
[Page 6753-6754]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05fe08-95]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57229; File No. SR-ISE-2008-09]

 
Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing of Proposed Rule Change To Amend Exchange Rules 
Related to the Imposition of Fines for Minor Rule Violations

January 29, 2008.
    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 January 18, 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, II, and III below, which Items have been prepared 
substantially by the ISE. 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 1614, ``Imposition of Fines 
for Minor Rule Violations,'' to add summary fines for violations of ISE 
Rule 1100, ``Exercise of Options Contracts.'' The text of the proposed 
rule change is available on the Exchange's Web site (http://www.ise.com
), at the ISE's principal office, 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 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 Exchange has prepared summaries, set

[[Page 6754]]

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 add a summary fine schedule pursuant to 
its Minor Rule Violation Plan (``MRVP'') that will apply to any member 
who fails to submit to the Exchange in a timely manner, pursuant to ISE 
Rule 1100 (or a regulatory information circular issued pursuant to ISE 
Rule 1100), ``Advice Cancel'' or exercise instruction relating to the 
exercise or nonexercise of a noncash-settled equity option. The 
Exchange believes that imposing the fine levels specified with respect 
to both individual members and member organizations, and providing for 
a rolling 24-month surveillance period, will serve as an effective 
deterrent to such violative conduct.
    In addition, the Exchange, as a member of the Intermarket 
Surveillance Group, as well as certain other self-regulatory 
organizations (``SROs''), executed and filed with the Commission, on 
October 29, 2007, a final version of an Agreement pursuant to Section 
17(d) of the Act (the ``17d-2 Agreement'').\3\ As set forth in the 17d-
2 Agreement, the SROs have agreed that their respective rules 
concerning the filing of Expiring Exercise Declarations (also referred 
to as Contrary Exercise Advices) are common rules. As a result, the 
proposal to amend the ISE's MRVP will further result in consistency in 
sanctions among the SROs that are signatories to the 17d-2 Agreement 
concerning Contrary Exercise Advice violations.\4\
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    \3\ See letter to Richard Holley, Senior Special Counsel, 
Division of Trading and Markets, Commission, from Nyieri Nazarian, 
Assistant General Counsel, American Stock Exchange LLC (``Amex''), 
dated October 29, 2007.
    \4\ See Amex Rule 590.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\5\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\6\ in particular, in that it 
is designed to prevent fraudulent and manipulative acts and practices; 
to promote just and equitable principles of trade; and to protect 
investors and the public interest in that it is designed to foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
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. 
Additionally, the Exchange believes that the proposed rule change will 
promote consistency in minor rule violations and respective SRO 
reporting obligations as set forth pursuant to Rule 19d-1(c)(2) under 
the Act,\7\ which governs minor rule violation plans.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
    \7\ 17 CFR 240.19d-1(c)(2).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    ISE does not believe that the proposed rule change will 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 neither solicited nor received comments on the 
proposal.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the Exchange consents, the Commission will:
    (A) By order approve such proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

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-2008-09 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-ISE-2008-09. 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-2008-09 and should be 
submitted on or before February 26, 2008.

    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. E8-1970 Filed 2-4-08; 8:45 am]

BILLING CODE 8011-01-P