Self-Regulatory Organizations; International Securities Exchange, Inc.; Notice of Filing of Proposed Rule Change To Amend Exchange Rule Governing Directed Orders, 3144-3145 [E6-521]
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3144
Federal Register / Vol. 71, No. 12 / Thursday, January 19, 2006 / Notices
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.
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:
sroberts on PROD1PC70 with NOTICES
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
No. SR–ISE–2006–02 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
Station Place, 100 F Street, NE.,
Washington, DC 20549–9303.
All submissions should refer to File
Number SR–ISE–2006–02. 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 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–2006–02 and should be
submitted on or before February 9, 2006.
16:38 Jan 18, 2006
Jkt 208001
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
IV. Solicitation of Comments
VerDate Aug<31>2005
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.14
Nancy M. Morris,
Secretary.
[FR Doc. E6–518 Filed 1–18–06; 8:45 am]
[Release No. 34–53103; File No. SR–ISE–
2006–01]
Self-Regulatory Organizations;
International Securities Exchange, Inc.;
Notice of Filing of Proposed Rule
Change To Amend Exchange Rule
Governing Directed Orders
January 11, 2006.
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 January 5,
2006, 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, II, and III below, which Items
have been prepared by the ISE. 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 ISE is proposing to amend its ISE
Rule 811 with respect to identifying to
a Directed Market Maker (‘‘DMM’’) the
identity of the firm entering a Directed
Order.
The text of the proposed rule change
is below. Proposed new language is in
italics; proposed deletions are in
[brackets].
*
*
*
*
*
Rule 811. Directed Orders
*
*
*
*
*
(b) Exchange market makers may only
receive and handle orders on an agency
basis if they are Directed Orders and
only in the manner prescribed in the
Rule 811. A market maker can elect
whether or not to accept Directed
Orders on a daily basis. If a market
maker elects to be a Directed Market
Maker, it must accept Directed Orders
from all Electronic Access Members[. A
Directed market maker] and cannot
reject a Directed Order. The identity of
the Electronic Access Member that
14 17
CFR 200.30–3(a)(12)
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
PO 00000
Frm 00096
Fmt 4703
Sfmt 4703
entered the Directed Order will be made
available to the Directed Market Maker.
*
*
*
*
*
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. 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 Exchange operates a Directed
Order system in which Electronic
Access Members (‘‘EAMs’’) can send an
order to a DMM for possible price
improvement.3 If a DMM accepts
Directed Orders generally, that DMM
must accept all Directed Orders from all
EAMs. Once such a DMM receives a
Directed Order, it either must enter the
order into the Exchange’s ‘‘Price
Improvement Mechanism’’ (‘‘PIM’’) or
must release the order into the
Exchange’s limit order book, in which
case there are certain restrictions on the
DMM interacting with the order.
The Boston Options Exchange
(‘‘BOX’’) operates a system almost
identical to ISE’s Directed Order system.
Based on BOX’s published rules, the ISE
believed that BOX’s system had the
same anonymity feature as ISE’s system.
However, the Boston Stock Exchange,
Inc. (‘‘BSE’’) has filed a proposed rule
change that acknowledges that BOX
provides its directed market makers
with the identity of the order entry firm
and seeks to amend the BOX rules to be
consistent with the actual operation of
the BOX system (the ‘‘BOX Proposal’’).4
The ISE has significant concerns with
the BOX Proposal and will be filing a
comment letter arguing against its
approval. Notwithstanding ISE’s
concerns with the BOX Proposal, the
ISE believes it needs to remain
competitive in the market place if the
Commission determines to approve the
BOX Proposal and allow exchanges to
disclose the identity of order–entry
3 See Securities Exchange Act Release No. 52331
(August 24, 2005), 70 FR 51856 (August 31, 2005)
(SR–ISE–2004–16).
4 See Securities Exchange Act Release No. 53015
(December 22, 2005), 70 FR 77207 (December 29,
2005) (SR–BSE–2005–52).
E:\FR\FM\19JAN1.SGM
19JAN1
Federal Register / Vol. 71, No. 12 / Thursday, January 19, 2006 / Notices
firms in their order routing and
execution systems. In this respect, the
ISE has modified its system to disclose
the identity of order entry firms to
DMMs on a temporary basis.5 The
purpose of this proposed rule change is
to specify in the ISE rules that Directed
Orders are not anonymous, which if
approved by the Commission, will make
the temporary system change
permanent.6
2. Statutory Basis
The Exchange believes that the basis
under the Act for this proposed rule
change is found in section 6(b)(5),7 in
that the proposed rule change is
designed to promote just and equitable
principles of trade, to prevent
fraudulent and manipulative acts, to
remove impediments to and perfect the
mechanisms 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 enable the
Exchange to remain competitive in the
market place.
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
sroberts on PROD1PC70 with NOTICES
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
5 See Securities Exchange Act Release No. 53104
(January 11, 2006) (File No. SR–ISE–2006–02). This
temporary system change was effective upon filing
pursuant to Rule 19b–4(f)(5) under the Act. 17 CFR
240.19b–4(f)(5).
6 Currently, the ISE rules do not specify that
Directed Orders are sent to a DMM on an
anonymous basis. The ISE also enforces anonymity
in certain other trading systems, such as its
Facilitation Mechanism. The Exchange plans to file
a proposed rule change eliminating the anonymity
provisions in certain of these areas as well.
7 15 U.S.C. 78f(b)(5).
VerDate Aug<31>2005
16:38 Jan 18, 2006
Jkt 208001
(ii) as to which the Exchange consents,
the Commission shall:
(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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
No. SR–ISE–2006–01 on the subject
line.
3145
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.8
Nancy M. Morris,
Secretary.
[FR Doc. E6–521 Filed 1–18–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53096; File No. SR–PCX–
2005–141]
Self-Regulatory Organizations; Pacific
Exchange, Inc.; Notice of Filing of
Proposed Rule Change Relating to
Modifications to Archipelago
Exchange’s Closing Auction
January 11, 2006.
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 December
21, 2005, the Pacific Exchange, Inc.
Paper Comments
(‘‘PCX’’ or ‘‘Exchange’’), through its
• Send paper comments in triplicate
wholly owned subsidiary (‘‘PCXE’’ or
to Nancy M. Morris, Secretary,
the ‘‘Corporation’’), filed with the
Securities and Exchange Commission,
Securities and Exchange Commission
Station Place, 100 F Street, NE.,
(‘‘Commission’’) the proposed rule
Washington, DC 20549–9303.
change as described in Items I, II and III
All submissions should refer to File
below, which Items have been prepared
Number SR–ISE–2006–01. This file
by PCX. The Commission is publishing
number should be included on the
this notice to solicit comment on the
subject line if e-mail is used. To help the proposed rule change from interested
Commission process and review your
persons.
comments more efficiently, please use
only one method. The Commission will I. Self-Regulatory Organization’s
post all comments on the Commission’s Statement of the Terms of Substance of
the Proposed Rule Change
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
The Exchange proposes to amend its
submission, all subsequent
rules governing the Archipelago
amendments, all written statements
Exchange (‘‘ArcaEx’’), the equity trading
with respect to the proposed rule
facility of PCXE. With this filing, the
change that are filed with the
Exchange proposes to clarify the
Commission, and all written
ArcaEx’s Closing Auction functionality
communications relating to the
and limit the use of the Closing Auction
proposed rule change between the
to primary listed securities. The text of
Commission and any person, other than the proposed rule change is available on
those that may be withheld from the
the PCX Web site
public in accordance with the
(http:/www.pacificex.com), at the PCX’s
provisions of 5 U.S.C. 552, will be
Office of the Secretary and at the
available for inspection and copying in
Commission’s Public Reference Room.
the Commission’s Public Reference
Room. Copies of such filing also will be II. Self-Regulatory Organization’s
Statement of the Purpose of, and
available for inspection and copying at
Statutory Basis for, the Proposed Rule
the principal office of the ISE.
All comments received will be posted Change
without change; the Commission does
In its filing with the Commission, the
not edit personal identifying
Exchange included statements
information from submissions. You
concerning the purpose of, and basis for,
should submit only information that
the proposed rule change. The text of
you wish to make available publicly. All these statements may be examined at
submissions should refer to File
the places specified in Item IV below.
Number SR–ISE–2006–01 and should be The Exchange has prepared summaries,
submitted on or before February 9, 2006.
1 15
8 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00097
Fmt 4703
2 17
Sfmt 4703
E:\FR\FM\19JAN1.SGM
U.S.C. 78s(b)(1).
CFR 240.19b–4.
19JAN1
]]>Agencies
[Federal Register Volume 71, Number 12 (Thursday, January 19, 2006)]
[Notices]
[Pages 3144-3145]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-521]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-53103; File No. SR-ISE-2006-01]
Self-Regulatory Organizations; International Securities Exchange,
Inc.; Notice of Filing of Proposed Rule Change To Amend Exchange Rule
Governing Directed Orders
January 11, 2006.
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 January 5, 2006, 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, II, and III below, which Items have been prepared by the ISE.
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.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The ISE is proposing to amend its ISE Rule 811 with respect to
identifying to a Directed Market Maker (``DMM'') the identity of the
firm entering a Directed Order.
The text of the proposed rule change is below. Proposed new
language is in italics; proposed deletions are in [brackets].
* * * * *
Rule 811. Directed Orders
* * * * *
(b) Exchange market makers may only receive and handle orders on an
agency basis if they are Directed Orders and only in the manner
prescribed in the Rule 811. A market maker can elect whether or not to
accept Directed Orders on a daily basis. If a market maker elects to be
a Directed Market Maker, it must accept Directed Orders from all
Electronic Access Members[. A Directed market maker] and cannot reject
a Directed Order. The identity of the Electronic Access Member that
entered the Directed Order will be made available to the Directed
Market Maker.
* * * * *
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. 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 Exchange operates a Directed Order system in which Electronic
Access Members (``EAMs'') can send an order to a DMM for possible price
improvement.\3\ If a DMM accepts Directed Orders generally, that DMM
must accept all Directed Orders from all EAMs. Once such a DMM receives
a Directed Order, it either must enter the order into the Exchange's
``Price Improvement Mechanism'' (``PIM'') or must release the order
into the Exchange's limit order book, in which case there are certain
restrictions on the DMM interacting with the order.
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 52331 (August 24,
2005), 70 FR 51856 (August 31, 2005) (SR-ISE-2004-16).
---------------------------------------------------------------------------
The Boston Options Exchange (``BOX'') operates a system almost
identical to ISE's Directed Order system. Based on BOX's published
rules, the ISE believed that BOX's system had the same anonymity
feature as ISE's system. However, the Boston Stock Exchange, Inc.
(``BSE'') has filed a proposed rule change that acknowledges that BOX
provides its directed market makers with the identity of the order
entry firm and seeks to amend the BOX rules to be consistent with the
actual operation of the BOX system (the ``BOX Proposal'').\4\
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 53015 (December 22,
2005), 70 FR 77207 (December 29, 2005) (SR-BSE-2005-52).
---------------------------------------------------------------------------
The ISE has significant concerns with the BOX Proposal and will be
filing a comment letter arguing against its approval. Notwithstanding
ISE's concerns with the BOX Proposal, the ISE believes it needs to
remain competitive in the market place if the Commission determines to
approve the BOX Proposal and allow exchanges to disclose the identity
of order-entry
[[Page 3145]]
firms in their order routing and execution systems. In this respect,
the ISE has modified its system to disclose the identity of order entry
firms to DMMs on a temporary basis.\5\ The purpose of this proposed
rule change is to specify in the ISE rules that Directed Orders are not
anonymous, which if approved by the Commission, will make the temporary
system change permanent.\6\
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 53104 (January 11,
2006) (File No. SR-ISE-2006-02). This temporary system change was
effective upon filing pursuant to Rule 19b-4(f)(5) under the Act. 17
CFR 240.19b-4(f)(5).
\6\ Currently, the ISE rules do not specify that Directed Orders
are sent to a DMM on an anonymous basis. The ISE also enforces
anonymity in certain other trading systems, such as its Facilitation
Mechanism. The Exchange plans to file a proposed rule change
eliminating the anonymity provisions in certain of these areas as
well.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the basis under the Act for this
proposed rule change is found in section 6(b)(5),\7\ in that the
proposed rule change is designed to promote just and equitable
principles of trade, to prevent fraudulent and manipulative acts, to
remove impediments to and perfect the mechanisms 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 enable the Exchange to remain competitive in the market
place.
---------------------------------------------------------------------------
\7\ 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 unsolicited written comments from members or other interested
parties.
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 shall:
(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 (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File No. SR-ISE-2006-01 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-9303.
All submissions should refer to File Number SR-ISE-2006-01. 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 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-2006-01
and should be submitted on or before February 9, 2006.
---------------------------------------------------------------------------
\8\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\8\
Nancy M. Morris,
Secretary.
[FR Doc. E6-521 Filed 1-18-06; 8:45 am]
BILLING CODE 8010-01-P
