Document ID: SEC-2012-1628-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: International Securities Exchange, LLC
Posted Date: 2012-10-05T04:00Z

[Federal Register Volume 77, Number 194 (Friday, October 5, 2012)]
[Notices]
[Pages 61035-61036]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-24578]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67957; File No. SR-ISE-2012-74]

Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change To Amend ISE Rule 711 To Provide for the Nullification of Trades 
by Mutual Agreement of the Parties Thereto

October 1, 2012.
    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 September 19, 2012, the International Securities Exchange, LLC 
(the ``Exchange'' or the ``ISE'') filed with the Securities and 
Exchange Commission (``Commission'') the proposed rule change as 
described in Items I and II below, which Items have been prepared by 
the Exchange. 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 the 
Substance of the Proposed Rule Change

    The Exchange proposes to amend ISE Rule 711 to provide for the 
nullification of trades by mutual agreement of the parties thereto. The 
text of the proposed rule change is available on the Exchange's Web 
site www.ise.com, at the principal office of the Exchange, at the 
Commission's Web site http://www.sec.gov, 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 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 purpose of this proposed rule change is to amend ISE Rule 711 
to provide for the nullification of trades by mutual agreement of the 
parties thereto. Under Proposed ISE Rule 711(b), a trade would be 
nullified if all parties to the trade agree to the nullification.\3\ 
After agreement has been reached between the parties to nullify a 
trade, one party would be required to notify the Exchange and the 
Exchange promptly will disseminate the nullification to the Options 
Price Reporting Authority (``OPRA''). Proposed ISE Rule 711(b) would 
provide the parties to a trade with the ability to nullify a trade 
under circumstances where, for example, an obvious or catastrophic 
error is not deemed to have occurred, but the parties to the trade 
nonetheless desire that the trade be nullified.
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    \3\ The changes proposed to ISE Rule 711 are based on NYSE MKT 
LLC (formerly known as NYSE Amex LLC) Rule 965NY, Commentary .02. 
The Exchange believes that, though not required, parties generally 
would need to agree to nullify a trade prior to that trade being 
settled.
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2. Statutory Basis
    The Exchange believes that the proposed rule change, which would 
permit a trade to be nullified upon the mutual agreement of all parties 
to the trade, is consistent with Section 6(b) of the Securities 
Exchange Act of 1934 (the ``Exchange Act''),\4\ in general, and 
furthers the objectives of Section 6(b)(5) of the Exchange Act,\5\ in 
particular, because it is designed to promote just and equitable 
principles of trade, 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. The proposed 
rule change makes clear the contractual rights of the parties to a 
trade to nullify the trade upon mutual agreement. The Exchange believes 
that the proposed rule change is consistent with a free and open market 
and the public interest because it gives effect to the contractual 
rights of the parties to a trade.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 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 
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) does not impose any significant burden on competition; 
and (iii) does not become operative for 30 days from the date on which 
it was filed, or such shorter time as the Commission may designate, it 
has become effective pursuant to Section 19(b)(3)(A) \6\ of the Act and 
Rule 19b-4(f)(6) \7\ thereunder.
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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with 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 the proposed rule 
change.
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend 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:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File

[[Page 61036]]

Number SR-ISE-2012-74 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-2012-74. This 
file number should be included on the subject line if email 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 10:00 a.m. and 3:00 p.m. Copies of such 
filing also will be available for inspection and copying at the 
principal offices 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-2012-74, and should be submitted on or before 
October 26, 2012.
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    \8\ 17 CFR 200.30-3(a)(12).
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    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-24578 Filed 10-4-12; 8:45 am]
BILLING CODE 8011-01-P