Document ID: SEC-2008-0427-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: International Securities Exchange, LLC
Posted Date: 2008-03-19T04:00Z

[Federal Register: March 19, 2008 (Volume 73, Number 54)]
[Notices]               
[Page 14861-14863]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19mr08-118]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57484; File No. SR-ISE-2008-11]

 
Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change Relating to Cross Orders

March 12, 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 February 26, 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 and II below, which Items have been substantially prepared by 
the ISE. The ISE has designated the proposed rule change as ``non-
controversial'' under Section 19(b)(3)(A)(iii) \3\ of the Act and Rule 
19b-4(f)(6) thereunder,\4\ which renders the proposal effective upon 
filing with the Commission. The Commission is publishing this notice to

[[Page 14862]]

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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The ISE is proposing to amend its rules governing equities to adopt 
new order types, allowing for several different types of cross 
transactions. The text of the proposed rule change is available at the 
ISE, the Commission's Public Reference Room, and www.ise.com.

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 ISE 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 ISE 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 filing is to amend ISE Rules to adopt the 
following new order types, which are described in more detail below: 
(1) Cross order; (2) cross with size order; (3) midpoint cross order; 
and (4) ISO cross order.
    A Cross Order is an order to buy and sell the same security at a 
specific price better than the Exchange's displayed best bid and offer 
(``BBO'') and equal to or better than the National Best Bid and Offer 
(``NBBO'').
    A Cross with Size Order is a cross order to buy and sell at least 
5,000 shares of the same security with a market value of at least 
$100,000.00: (1) At a price equal to or better than the Exchange's 
displayed BBO and the NBBO; and (2) where the size of the order is 
larger than the largest order displayed on the Exchange at that price.
    A Midpoint Cross Order is a cross order with an instruction to 
execute it at the midpoint of the NBBO. If the NBBO is locked at the 
time the midpoint cross is received, it will execute at the locked 
NBBO. If the NBBO is crossed at the time the midpoint cross is 
received, the midpoint cross will be automatically canceled. Midpoint 
cross orders may be executed and reported in increments as small as 
one-half of the Minimum Price Variation.
    An ISO Cross Order is any type of cross order, other than a 
Midpoint Cross,\5\ marked as required by Rule 600(b)(30) of Regulation 
NMS to be executed without taking any of the actions described in Rule 
2107(d). These orders shall be executed because the Equity EAM routing 
the order to the Exchange has represented that the Equity EAM has 
satisfied the quotations of other markets as required by Rule 
600(b)(30).
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    \5\ An ISO Cross order would never be used in conjunction with a 
Midpoint Cross order because by definition a Midpoint Cross order 
would never be trading through the NBBO.
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    Cross, cross with size, midpoint cross and ISO cross will be 
automatically executed if they meet the requirements for such order 
types, and will be immediately and automatically canceled if they do 
not met these requirements.
2. Statutory Basis
    The basis under the Act for this proposed rule change is found in 
Section 6(b)(5).\6\ Specifically, the Exchange believes the proposed 
rule change is consistent with Section 6(b)(5) 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. In 
particular, ISE believes that the proposed rule change will provide 
investors with more flexibility in entering orders and receiving 
executions of such orders.
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    \6\ 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 
persons.

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

    Because the 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 filing, or such shorter time as the Commission 
may designate if consistent with the protection of investors and the 
public interest, the proposed rule change has become effective pursuant 
to Section 19(b)(3)(A) of the Act \7\ and subparagraph (f)(6) of Rule 
19b-4 thereunder.\8\ As required under Rule 19b-4(f)(6)(iii),\9\ the 
ISE 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 the filing of the proposed rule change.
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(6).
    \9\ 17 CFR 240.19b-4(f)(6)(iii).
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    A proposed rule change filed under Rule 19b-4(f)(6) normally may 
not become operative prior to 30 days after the date of filing.\10\ 
However, Rule 19b-4(f)(6)(iii) \11\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. The ISE requested that the 
Commission waive the 30-day operative delay period for ``non-
controversial'' proposals under Rule 19b-4(f)(6) \12\ 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. 
The Commission notes that the proposed rule language is based on 
comparable language contained in the rules of the Boston Stock 
Exchange, Inc.\13\ Accordingly, the Commission designates the proposed 
rule change operative upon filing with the Commission.\14\
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    \10\ Id.
    \11\ Id.
    \12\ Id.
    \13\ See Boston Stock Exchange Rules, Chapter XXXVII--Boston 
Equities Exchange Trading System, Section 2--Eligible Orders (c)(ii) 
Subsections (A), (B), (F) and (N).
    \14\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the impact of the proposed rule 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 the furtherance of the purposes of the Act.

[[Page 14863]]

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-2008-11 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-2008-11. 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-2008-11 and should be 
submitted on or before April 9, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
Florence E. Harmon,
Deputy Secretary.
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    \15\ 17 CFR 200.30-3(a)(12).
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[FR Doc. E8-5428 Filed 3-18-08; 8:45 am]

BILLING CODE 8011-01-P