Document ID: SEC-2008-0487-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: International Securities Exchange, LLC
Posted Date: 2008-03-31T04:00Z

[Federal Register: March 31, 2008 (Volume 73, Number 62)]
[Notices]
[Page 16914-16916]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr31mr08-114]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57550; File No. SR-ISE-2008-30]

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

March 24, 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 March 19, 2008, the International Securities Exchange, LLC (``ISE''
or ``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in

[[Page 16915]]

Items I and II below, which Items have been substantially prepared by
ISE. The Exchange filed the proposal as a ``non-controversial''
proposed rule change pursuant to section 19(b)(3)(A)(iii) of the Act
\3\ and Rule 19b-4(f)(6) thereunder,\4\ which renders it effective upon
filing with the Commission.\5\ 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
    \5\ The Exchange has asked the Commission to waive the 30-day
operative delay required by Rule 19b-4(f)(6)(iii), 17 CFR 240.19b-
4(f)(6)(iii). See discussion infra Section III.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The ISE proposes to amend its rules regarding responses to special
orders. The text of the proposed rule change is available at ISE, the
Commission's Public Reference Room, and http://www.iseoptions.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 proposed rule change is to amend the Exchange's
rules regarding responses to special orders. Currently, when members
enter orders into the options trading system's Block Mechanism,
Facilitation Mechanism, and Solicited Order Mechanism, the orders are
exposed to all market participants for three seconds. However, the
Exchange's rules restrict on whose behalf a member may respond. In the
case of the Block, Facilitation and Solicited Order Mechanisms, members
may not enter responses on behalf of options market makers on other
exchanges.
    Many of ISE's members operate as market makers on other exchanges
that do not have this same type of restrictions in their rules.
Accordingly, the Exchange proposes to eliminate the restriction on the
entry of orders for the account of market makers of another options
exchange. The Exchange does not believe that this proposed rule change
will have a material effect on the current participation in trades
entered into the mechanisms. Further, this proposed rule change will
bring ISE's rules into conformance with those of the other exchanges
who, as noted above, do not have this restriction in their rules.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations under the Act applicable to a
national securities exchange and, in particular, the requirements of
section 6(b) of the Act.\6\ Specifically, the Exchange believes the
proposed rule change is consistent with section 6(b)(5) of the Act \7\
requirements that the rules of a national securities exchange be
designed to promote just and equitable principles of trade, to prevent
fraudulent and manipulative acts and, in general, to protect investors
and the public interest. In particular, the proposed rule change will
strengthen the Exchange's competitive position while allowing a greater
number of market participants to respond to special orders on the
Exchange.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 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 (1)
significantly affect the protection of investors or the public
interest; (2) impose any significant burden on competition; and (3)
become operative for thirty days from the date on which it was filed,
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 section 19(b)(3)(A) of the Act \8\ and Rule 19b-
4(f)(6) \9\ thereunder.\10\
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ Pursuant to Rule 19b-4(f)(6)(iii), the Exchange gave the
Commission 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 on which the
Exchange filed the proposed rule change. See 17 CFR 240.19b-
4(f)(6)(iii).
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    A proposed rule change filed under Commission Rule 19b-4(f)(6) \11\
normally does not become operative prior to thirty days after the date
of filing. The Exchange requests that the Commission waive the 30-day
operative delay, as specified in Rule 19b-4(f)(6)(iii), and designate
the proposed rule change to become operative immediately. The
Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
because such waiver will enable a greater number of market participants
to respond to special orders on the Exchange. For these reasons, the
Commission designates the proposed rule change as effective upon
filing.\12\
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    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ For the purposes only of waiving the operative date of this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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    At any time within 60 days of the filing of such 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. 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-2008-30 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris,
Secretary,

[[Page 16916]]

Securities and Exchange Commission, 100 F Street, NE., Washington, DC
20549-1090.
    All submissions should refer to File Number SR-ISE-2008-30. 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 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-2008-30 and should be
submitted on or before April 21, 2008.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
Florence E. Harmon,
Deputy Secretary.
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    \13\ 17 CFR 200.30-3(a)(12).
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 [FR Doc. E8-6476 Filed 3-28-08; 8:45 am]

BILLING CODE 8011-01-P