Self-Regulatory Organizations; International Securities Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Primary Market Maker Obligations, 55642-55643 [05-18895]

Download as PDF 55642 Federal Register / Vol. 70, No. 183 / Thursday, September 22, 2005 / Notices DTC–2005–07) be and hereby is approved. For the Commission by the Division of Market Regulation, pursuant to delegated authority.6 Jonathan G. Katz, Secretary. [FR Doc. 05–18896 Filed 9–21–05; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–52451; File No. SR–ISE– 2005–44] Self-Regulatory Organizations; International Securities Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Primary Market Maker Obligations September 15, 2005. 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 September 14, 2005, the International Securities Exchange, Inc. (‘‘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 prepared by the Exchange. The Exchange has filed the proposed rule change as a ‘‘non-controversial’’ rule change pursuant to Section 19(b)(3)(A) of the Act,3 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 solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend ISE Rule 803 regarding Primary Market Maker obligations in consideration of a recently approved change to the ISE Rules relating to the Plan for the Purpose of Creating and Operating an Intermarket Option Linkage.5 6 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(6). 5 On July 28, 2000, the Commission approved a national market system plan for the purpose of creating and operating an intermarket option linkage proposed by the American Stock Exchange LLC, the Chicago Board Options Exchange, Incorporated, and the ISE. See Securities Exchange Act Release No. 43086 (July 28, 2000), 65 FR 48023 (August 4, 2000) (‘‘Linkage Plan’’). Subsequently, 1 15 VerDate Aug<31>2005 14:53 Sep 21, 2005 Jkt 205001 The text of the proposed rule change is available on the Exchange’s Web site (https://www.iseoptions.com), at the Exchange’s Office of the Secretary, 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 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 In file number SR–ISE–2005–33, which was recently approved by the Commission, the Exchange proposed to amend its rules governing Linkage 6 trading with respect to trade-throughs and locked markets.7 SR–ISE–2005–33 provided that an Exchange member may trade an order at a price that is one minimum quoting increment inferior to the national best bid and offer (‘‘NBBO’’) if the member contemporaneously transmits to the market(s) disseminating the NBBO Linkage Order(s) 8 to satisfy all interest at the NBBO price (‘‘trade and ship’’). Under trade and ship, pursuant to agency obligations, any execution the member receives from the market disseminating the NBBO must be reassigned to any customer order underlying the Linkage Order that was transmitted to trade with the market disseminating the NBBO. The purpose of this proposed rule change is to reflect the change made in upon separate requests by the Philadelphia Stock Exchange, Inc., the Pacific Exchange, Inc., and the Boston Stock Exchange, Inc., the Commission issued orders to permit these exchanges to participate in the Linkage Plan. See Securities Exchange Act Release Nos. 43573 (November 16, 2000), 65 FR 70851 (November 28, 2000); 43574 (November 16, 2000), 65 FR 70850 (November 28, 2000); and 49198 (February 5, 2004), 69 FR 7029 (February 12, 2004). 6 The Exchange defines ‘‘Linkage’’ in ISE Rule 1900(9). 7 See Securities Exchange Act Release No. 52418 (September 13, 2005) (order approving SR–ISE– 2005–33). 8 The Exchange defines ‘‘Linkage Order’’ in ISE Rule 1900(10). PO 00000 Frm 00028 Fmt 4703 Sfmt 4703 SR–ISE–2005–33 in ISE Rule 803(c), which specifies the obligations of a Primary Market Maker when handling a Public Customer Order. Specifically, the Exchange proposes to amend ISE Rule 803(c) to specify that a Primary Market Maker may trade and ship as described above. This proposed rule change is necessary to assure that the Exchange’s rules are consistent with respect to the handling of Public Customer Orders. 2. Statutory Basis The basis under the Act for this proposed rule change is the requirement under Section 6(b)(5) 9 that an exchange have rules that are designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, 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. In particular, the proposed rule change will help implement the Linkage Plan by facilitating the ability of market makers to execute their customer orders and assuring that the Exchange’s rules in this respect are consistent. 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 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 effects a change that 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 30 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 9 15 E:\FR\FM\22SEN1.SGM U.S.C. 78f(b)(5). 22SEN1 Federal Register / Vol. 70, No. 183 / Thursday, September 22, 2005 / Notices public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 10 and Rule 19b–4(f)(6) thereunder.11 As required under Rule 19b–4(f)(6)(iii),12 the Exchange provided the Commission with written notice of the Exchange’s intent to file the proposed rule change at least five business days prior to the filing date of the proposed rule change. A proposed rule change filed under Rule 19b–4(f)(6) 13 normally may not become operative prior to 30 days after the date of its filing. However, Rule 19b–4(f)(6)(iii) 14 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has requested that the Commission waive the 30-day operative delay, as specified in Rule 19b–4(f)(6)(iii), and designate the proposed rule change operative upon filing. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest,15 because accelerating the operative date immediately eliminates the inconsistency in the Exchange Rules with respect to Primary Market Makers Obligations to Public Customer Orders that otherwise exists as a result of the approval of trade and ship.16 For this reason, the Commission designates that the proposal is operative upon filing. 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 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: 10 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 12 17 CFR 240.19b–4(f)(6)(iii). 13 17 CFR 240.19b–4(f)(6). 14 17 CFR 240.19b–4(f)(6)(iii). 15 For the purpose only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 16 See supra note 7. 11 17 VerDate Aug<31>2005 14:53 Sep 21, 2005 Jkt 205001 Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–ISE–2005–44 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–9303. All submissions should refer to File Number SR–ISE–2005–44 . 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 (https://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. Copies of the 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 available publicly. All submissions should refer to File Number SR–ISE–2005–44 and should be submitted on or before October 13, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.17 Jonathan G. Katz, Secretary. [FR Doc. 05–18895 Filed 9–21–05; 8:45 am] BILLING CODE 8010–01–P 17 17 PO 00000 CFR 200.30–3(a)(12). Frm 00029 Fmt 4703 Sfmt 4703 55643 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–52430; File No. SR–NASD– 2004–162] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing of Proposed Rule Change and Amendment Nos. 1 and 2 Thereto To Establish Fee and Notice Requirements for Substitution Listing Events and To Provide Additional Transparency for Changes Requiring a Record-keeping Fee September 14, 2005. 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 October 26, 2004, the National Association of Securities Dealers, Inc. (‘‘NASD’’), through its subsidiary, The Nasdaq Stock Market, Inc. (‘‘Nasdaq’’), 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 by Nasdaq. On May 11, 2005, Nasdaq filed Amendment No. 1 to the proposed rule change.3 On August 18, 2005, Nasdaq filed Amendment No. 2 to the proposed rule change.4 The Commission is publishing this notice to solicit comments on the proposal, as amended, from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of the Substance of the Proposed Rule Change Nasdaq proposes to amend NASD Rules 4200(a), 4310, 4320, 4510, and 4520 to establish fee and notice requirements for substitution listing 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 Amendment No. 1 superseded and replaced the filing in its entirety. In Amendment No. 1, Nasdaq clarified that securities that are listed on a national securities exchange and not designated by Nasdaq as Nasdaq national market system securities are exempt from the proposed Substitution Listing Event notice and fee requirements. Amendment No. 1 also corrected typographical errors and clarified certain other non-material terms related to the scope of the proposed Substitution Listing Event fee and notice requirements. 4 Amendment No. 2 superseded and replaced the amended filing in its entirety. In Amendment No. 2, Nasdaq clarified that securities that are listed on a national securities exchange and not designated by Nasdaq as Nasdaq national market system securities are exempt from only the proposed Substitution Listing Event fee requirement and, therefore, would be subject to the proposed notice requirement. Amendment No. 2 also made certain conforming changes and representations regarding the collection and dissemination of substitution listing event information and the proposed rules impact on Nasdaq’s regulatory functions. 2 17 E:\FR\FM\22SEN1.SGM 22SEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 70, Number 183 (Thursday, September 22, 2005)]
[Notices]
[Pages 55642-55643]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-18895]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52451; File No. SR-ISE-2005-44]


Self-Regulatory Organizations; International Securities Exchange, 
Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change Relating to Primary Market Maker Obligations

September 15, 2005.
    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 September 14, 2005, the International Securities Exchange, Inc. 
(``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 prepared by the Exchange. 
The Exchange has filed the proposed rule change as a ``non-
controversial'' rule change pursuant to Section 19(b)(3)(A) of the 
Act,\3\ 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 solicit comments on the proposed rule change from 
interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend ISE Rule 803 regarding Primary 
Market Maker obligations in consideration of a recently approved change 
to the ISE Rules relating to the Plan for the Purpose of Creating and 
Operating an Intermarket Option Linkage.\5\
---------------------------------------------------------------------------

    \5\ On July 28, 2000, the Commission approved a national market 
system plan for the purpose of creating and operating an intermarket 
option linkage proposed by the American Stock Exchange LLC, the 
Chicago Board Options Exchange, Incorporated, and the ISE. See 
Securities Exchange Act Release No. 43086 (July 28, 2000), 65 FR 
48023 (August 4, 2000) (``Linkage Plan''). Subsequently, upon 
separate requests by the Philadelphia Stock Exchange, Inc., the 
Pacific Exchange, Inc., and the Boston Stock Exchange, Inc., the 
Commission issued orders to permit these exchanges to participate in 
the Linkage Plan. See Securities Exchange Act Release Nos. 43573 
(November 16, 2000), 65 FR 70851 (November 28, 2000); 43574 
(November 16, 2000), 65 FR 70850 (November 28, 2000); and 49198 
(February 5, 2004), 69 FR 7029 (February 12, 2004).
---------------------------------------------------------------------------

    The text of the proposed rule change is available on the Exchange's 
Web site (https://www.iseoptions.com), at the Exchange's Office of the 
Secretary, 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 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
    In file number SR-ISE-2005-33, which was recently approved by the 
Commission, the Exchange proposed to amend its rules governing Linkage 
\6\ trading with respect to trade-throughs and locked markets.\7\ SR-
ISE-2005-33 provided that an Exchange member may trade an order at a 
price that is one minimum quoting increment inferior to the national 
best bid and offer (``NBBO'') if the member contemporaneously transmits 
to the market(s) disseminating the NBBO Linkage Order(s) \8\ to satisfy 
all interest at the NBBO price (``trade and ship''). Under trade and 
ship, pursuant to agency obligations, any execution the member receives 
from the market disseminating the NBBO must be reassigned to any 
customer order underlying the Linkage Order that was transmitted to 
trade with the market disseminating the NBBO.
---------------------------------------------------------------------------

    \6\ The Exchange defines ``Linkage'' in ISE Rule 1900(9).
    \7\ See Securities Exchange Act Release No. 52418 (September 13, 
2005) (order approving SR-ISE-2005-33).
    \8\ The Exchange defines ``Linkage Order'' in ISE Rule 1900(10).
---------------------------------------------------------------------------

    The purpose of this proposed rule change is to reflect the change 
made in SR-ISE-2005-33 in ISE Rule 803(c), which specifies the 
obligations of a Primary Market Maker when handling a Public Customer 
Order. Specifically, the Exchange proposes to amend ISE Rule 803(c) to 
specify that a Primary Market Maker may trade and ship as described 
above. This proposed rule change is necessary to assure that the 
Exchange's rules are consistent with respect to the handling of Public 
Customer Orders.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(5) \9\ that an exchange have rules that 
are designed to prevent fraudulent and manipulative acts and practices, 
to promote just and equitable principles of trade, 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. 
In particular, the proposed rule change will help implement the Linkage 
Plan by facilitating the ability of market makers to execute their 
customer orders and assuring that the Exchange's rules in this respect 
are consistent.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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 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 effects a change that 
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 30 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

[[Page 55643]]

public interest, the proposed rule change has become effective pursuant 
to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6) 
thereunder.\11\ As required under Rule 19b-4(f)(6)(iii),\12\ the 
Exchange provided the Commission with written notice of the Exchange's 
intent to file the proposed rule change at least five business days 
prior to the filing date of the proposed rule change.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \13\ normally 
may not become operative prior to 30 days after the date of its filing. 
However, Rule 19b-4(f)(6)(iii) \14\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. The Exchange has requested that the 
Commission waive the 30-day operative delay, as specified in Rule 19b-
4(f)(6)(iii), and designate the proposed rule change operative upon 
filing.
---------------------------------------------------------------------------

    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

    The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public 
interest,\15\ because accelerating the operative date immediately 
eliminates the inconsistency in the Exchange Rules with respect to 
Primary Market Makers Obligations to Public Customer Orders that 
otherwise exists as a result of the approval of trade and ship.\16\ For 
this reason, the Commission designates that the proposal is operative 
upon filing.
---------------------------------------------------------------------------

    \15\ For the purpose only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
    \16\ See supra note 7.
---------------------------------------------------------------------------

    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 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 (https://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-ISE-2005-44 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-9303.

    All submissions should refer to File Number SR-ISE-2005-44 . 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 (https://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. Copies of the 
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 available publicly. All submissions should refer to 
File Number SR-ISE-2005-44 and should be submitted on or before October 
13, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\17\
---------------------------------------------------------------------------

    \17\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Jonathan G. Katz,
Secretary.
[FR Doc. 05-18895 Filed 9-21-05; 8:45 am]
BILLING CODE 8010-01-P

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