Self-Regulatory Organizations; International Securities Exchange, Inc.; Order Approving Proposed Rule Change, and Amendment No. 1 Thereto, To Amend ISE Rule 803 To Provide for a Back-Up Primary Market Maker, 12758-12759 [E6-3492]
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Federal Register / Vol. 71, No. 48 / Monday, March 13, 2006 / Notices
proposed NASD arbitration rules
governing the same subject matter.16
Paper Comments
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with Section
6(b) of the Act, in general, and furthers
the objectives of Section 6(b)(5) in
particular, in that it is designed to
remove impediments to and perfect the
mechanism of a free and open market by
strengthening the integrity of the CBOE
Arbitration program.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
CBOE does not believe that the
proposed rule amendments will 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
No written comments were solicited
or received with respect to the proposed
rule amendments.
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 self-regulatory
organization consents, the Commission
will:
(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:
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
Station Place, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–CBOE–2004–65. 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
Section, Station Place, 100 F Street, NE.,
Washington, DC 20549. Copies of such
filing also will be available for
inspection and copying at the principal
office of the CBOE. 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–CBOE–
2004–65 and should be submitted by
April 3, 2006.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.17
Nancy M. Morris,
Secretary.
[FR Doc. E6–3513 Filed 3–10–06; 8:45 am]
BILLING CODE 8010–01–P
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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–CBOE–2004–65 on the
subject line.
16 See Proposed Customer Code and Proposed
Industry Code, supra note 11.
VerDate Aug<31>2005
17:58 Mar 10, 2006
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53419; File No. SR–ISE–
2005–50]
Self-Regulatory Organizations;
International Securities Exchange, Inc.;
Order Approving Proposed Rule
Change, and Amendment No. 1
Thereto, To Amend ISE Rule 803 To
Provide for a Back-Up Primary Market
Maker
March 6, 2006.
I. Introduction
On October 14, 2005, the International
Securities Exchange, Inc. (‘‘Exchange’’
or ‘‘ISE’’) filed with the Securities and
Exchange Commission (‘‘Commission’’),
pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a
proposed rule change to amend ISE Rule
803 to provide for a Back-Up Market
Maker. On January 12, 2006, the
Exchange filed Amendment No. 1 to the
proposed rule change.3 The proposed
rule change was published for comment
in the Federal Register on January 30,
2006.4 The Commission received no
comment letters regarding the proposal.
This order approves the proposed rule
change, as amended.
II. Description of Proposed Rule
The Exchange proposes to amend ISE
Rule 803 to provide for a Back-Up
Primary Market Maker and to correct an
inconsistency in the Exchange’s Rules.
Specifically, the Exchange proposes to
enhance the ISE System to allow
Competitive Market Makers that are also
Primary Market Makers on the Exchange
to voluntarily act as Back-Up Primary
Market Makers when the appointed
Primary Market Maker experiences
technical difficulties that interrupt its
participation in the market. Under the
proposal, only Competitive Market
Makers that are also Primary Market
Makers on the Exchange would be
eligible to be designated as a Back-Up
Primary Market Maker because,
according to the Exchange, these
members are readily able to assume all
of the responsibilities of a Primary
Market Maker on the Exchange, such as
handling customer orders when an away
market has a better price.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 Amendment No. 1, which replaced the original
filing in its entirety, made technical and clarifying
changes to the proposed rule change.
4 See Securities Exchange Act Release No. 53164
(January 20, 2006), 71 FR 4949 (January 30, 2006)
(‘‘Notice’’).
2 17
17 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00088
Fmt 4703
Sfmt 4703
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Federal Register / Vol. 71, No. 48 / Monday, March 13, 2006 / Notices
wwhite on PROD1PC61 with NOTICES
Under the proposed rule change, the
ISE System would automatically switch
a Competitive Market Maker quoting in
the affected options series to an active
Back-Up Primary Market Maker if the
appointed Primary Market Maker stops
quoting as a result of technical
difficulties.5 The ISE System would
automatically switch back to the
appointed Primary Market Maker when
it re-establishes its quotes in the series,
but the Back-Up Primary Market Maker
would continue to be responsible for
any outstanding unexecuted orders it is
handling. During the period that the
services of the Back-Up Primary Market
Maker are required, it would assume
most of the responsibilities and
privileges of a Primary Market Maker
under the ISE Rules with respect to any
series in which the appointed Primary
Market Maker fails to have a quote in
the ISE System.6
The Exchange also proposes to correct
an inconsistency in its rules. In April
2004, the Exchange received
Commission approval of a proposed rule
change that allowed it to disseminate a
quotation for less than ten contracts.7
Because the options intermarket linkage
plan and the Exchange’s rules continued
to require the Exchange to guarantee
that the Firm Customer Quote Size
(‘‘FCQS’’) and Firm Principal Quote
Size (‘‘FPQS’’) would be at least 10
contracts, ISE Rule 803(c)(1) was
amended to provide that the Primary
Market Maker had the obligation to buy
or sell the number of contracts
necessary to provide an execution of at
least 10 contracts to incoming linkage
orders when the Exchange’s
disseminated market quotation was for
less than 10 contracts.8
In August 2004, the intermarket
linkage plan was amended to provide
that the 10 contract minimum FCQS and
FPQS does not apply when the
Exchange is disseminating a quotation
of fewer than 10 contracts.9 In October
2004, the Exchange, and all of the other
options exchanges, received approval
for changes to their linkage rules to
implement this change to the
5 If there is more than one eligible member
quoting in the series, the ISE System would
automatically switch to the member with the largest
offer in the series.
6 A Competitive Market Maker would not become
subject to the requirement in ISE Rule 804(e)(1) to
enter continuous quotations in all of the series of
all of the options classes to which it is appointed,
as opposed to only 60% of the options classes
under ISE Rule 804(e)(2), by acting as a Back-Up
Primary Market Maker.
7 See Exchange Act Release No. 49602 (April 22,
2004), 69 FR 23841 (April 30, 2004) (the ‘‘Real Size
Filing’’).
8 See id.
9 See Exchange Act Release No. 50211 (August 18,
2004), 69 FR 52050 (August 24, 2004).
VerDate Aug<31>2005
17:58 Mar 10, 2006
Jkt 208001
intermarket linkage plan.10 Accordingly,
the Primary Market Maker no longer is
required to guarantee a minimum of 10
contracts to an incoming linkage order
when the Exchange’s disseminated
market quotation is for less than 10
contracts. However, the Exchange
neglected to remove the language in ISE
Rule 803(c)(1) at the time the changes to
the linkage rules were approved,
thereby creating an inconsistency in the
ISE Rules. The Exchange now proposes
to delete the language in ISE Rule
803(c)(1) as a purely non-substantive
clean-up of the ISE Rules.
III. Discussion
After careful review, the Commission
finds that the proposed rule change, as
amended, is consistent with the
requirements of the Act and the rules
and regulations thereunder applicable to
a national securities exchange.11 In
particular, the Commission finds that
the proposal is consistent with the
requirements of Section 6(b)(5) of the
Act,12 which requires, among other
things, that the rules of a national
securities exchange be designed to
promote just and equitable principles of
trade, to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and to protect investors and the
public interest.
The Commission believes that the
proposal should help to ensure that the
functions of the Primary Market Maker
are performed in an uninterrupted
fashion even when a Primary Market
Maker experiences difficulties that
cause it to remove its quotes from the
market. In particular, the Commission
believes that the proposed rule change
should help to ensure that the Back-Up
Primary Market Makers would provide
continuous quotations in all of the
series of the options classes in a manner
consistent with the obligations of the
Primary Market Maker, set forth in ISE
Rule 803. Further, this proposed rule
change should reduce the number of
non-firm quotes or ‘‘fast market’’ states
disseminated by the ISE.13
10 See Exchange Act Release Nos. 50562 (October
19, 2004), 69 FR 62925 (October 28, 2004) and
50587 (October 25, 2004), 69 FR 63417 (November
1, 2004).
11 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
12 15 U.S.C. 78f(b)(5).
13 The Commission notes that the Exchange
represents that most interruptions in Primary
Market Maker quoting are very brief in duration.
Telephone conversation between Katherine
Simmons, Deputy General Counsel, ISE, Marc F.
McKayle, Special Counsel, Division of Market
Regulation (‘‘Division’’), Commission and Johnna B.
PO 00000
Frm 00089
Fmt 4703
Sfmt 4703
12759
The ISE proposal to indicate that a
Primary Market Maker is not required to
guarantee a minimum of 10 contracts to
an incoming linkage order when the
Exchange’s disseminated market
quotation is less than 10 contracts is of
a clarifying and technical nature.
Accordingly, based on the foregoing the
Commission believes that the proposal
is consistent with the requirements of
the Act and the rules and regulations
thereunder.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,14 that the
proposed rule change (SR–ISE–2005–50)
is approved, as amended.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.15
Nancy M. Morris,
Secretary.
[FR Doc. E6–3492 Filed 3–10–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53424; File No. SR–NSCC–
2005–17]
Self-Regulatory Organizations;
National Securities Clearing
Corporation; Notice of Filing of
Proposed Rule Change To Modify Its
Rules and Procedures Related to the
Collection of Commission Payments
March 6, 2006.
Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 notice is hereby given that on
December 29, 2005, the National
Securities Clearing Corporation
(‘‘NSCC’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
and on February 3, 2006, amended, the
proposed rule change described in Items
I, II, and III below, which items have
been prepared primarily by NSCC. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested parties.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The purpose of this proposed rule
change is to modify NSCC’s Rules and
Procedures with regard to the collection
of commission payments.
Dumler, Attorney, Division, Commission on
November 2, 2005.
14 15 U.S.C. 78s(b)(2).
15 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
E:\FR\FM\13MRN1.SGM
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]]>Agencies
[Federal Register Volume 71, Number 48 (Monday, March 13, 2006)]
[Notices]
[Pages 12758-12759]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-3492]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-53419; File No. SR-ISE-2005-50]
Self-Regulatory Organizations; International Securities Exchange,
Inc.; Order Approving Proposed Rule Change, and Amendment No. 1
Thereto, To Amend ISE Rule 803 To Provide for a Back-Up Primary Market
Maker
March 6, 2006.
I. Introduction
On October 14, 2005, the International Securities Exchange, Inc.
(``Exchange'' or ``ISE'') filed with the Securities and Exchange
Commission (``Commission''), pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to amend ISE Rule 803 to provide
for a Back-Up Market Maker. On January 12, 2006, the Exchange filed
Amendment No. 1 to the proposed rule change.\3\ The proposed rule
change was published for comment in the Federal Register on January 30,
2006.\4\ The Commission received no comment letters regarding the
proposal. This order approves the proposed rule change, as amended.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Amendment No. 1, which replaced the original filing in its
entirety, made technical and clarifying changes to the proposed rule
change.
\4\ See Securities Exchange Act Release No. 53164 (January 20,
2006), 71 FR 4949 (January 30, 2006) (``Notice'').
---------------------------------------------------------------------------
II. Description of Proposed Rule
The Exchange proposes to amend ISE Rule 803 to provide for a Back-
Up Primary Market Maker and to correct an inconsistency in the
Exchange's Rules. Specifically, the Exchange proposes to enhance the
ISE System to allow Competitive Market Makers that are also Primary
Market Makers on the Exchange to voluntarily act as Back-Up Primary
Market Makers when the appointed Primary Market Maker experiences
technical difficulties that interrupt its participation in the market.
Under the proposal, only Competitive Market Makers that are also
Primary Market Makers on the Exchange would be eligible to be
designated as a Back-Up Primary Market Maker because, according to the
Exchange, these members are readily able to assume all of the
responsibilities of a Primary Market Maker on the Exchange, such as
handling customer orders when an away market has a better price.
[[Page 12759]]
Under the proposed rule change, the ISE System would automatically
switch a Competitive Market Maker quoting in the affected options
series to an active Back-Up Primary Market Maker if the appointed
Primary Market Maker stops quoting as a result of technical
difficulties.\5\ The ISE System would automatically switch back to the
appointed Primary Market Maker when it re-establishes its quotes in the
series, but the Back-Up Primary Market Maker would continue to be
responsible for any outstanding unexecuted orders it is handling.
During the period that the services of the Back-Up Primary Market Maker
are required, it would assume most of the responsibilities and
privileges of a Primary Market Maker under the ISE Rules with respect
to any series in which the appointed Primary Market Maker fails to have
a quote in the ISE System.\6\
---------------------------------------------------------------------------
\5\ If there is more than one eligible member quoting in the
series, the ISE System would automatically switch to the member with
the largest offer in the series.
\6\ A Competitive Market Maker would not become subject to the
requirement in ISE Rule 804(e)(1) to enter continuous quotations in
all of the series of all of the options classes to which it is
appointed, as opposed to only 60% of the options classes under ISE
Rule 804(e)(2), by acting as a Back-Up Primary Market Maker.
---------------------------------------------------------------------------
The Exchange also proposes to correct an inconsistency in its
rules. In April 2004, the Exchange received Commission approval of a
proposed rule change that allowed it to disseminate a quotation for
less than ten contracts.\7\ Because the options intermarket linkage
plan and the Exchange's rules continued to require the Exchange to
guarantee that the Firm Customer Quote Size (``FCQS'') and Firm
Principal Quote Size (``FPQS'') would be at least 10 contracts, ISE
Rule 803(c)(1) was amended to provide that the Primary Market Maker had
the obligation to buy or sell the number of contracts necessary to
provide an execution of at least 10 contracts to incoming linkage
orders when the Exchange's disseminated market quotation was for less
than 10 contracts.\8\
---------------------------------------------------------------------------
\7\ See Exchange Act Release No. 49602 (April 22, 2004), 69 FR
23841 (April 30, 2004) (the ``Real Size Filing'').
\8\ See id.
---------------------------------------------------------------------------
In August 2004, the intermarket linkage plan was amended to provide
that the 10 contract minimum FCQS and FPQS does not apply when the
Exchange is disseminating a quotation of fewer than 10 contracts.\9\ In
October 2004, the Exchange, and all of the other options exchanges,
received approval for changes to their linkage rules to implement this
change to the intermarket linkage plan.\10\ Accordingly, the Primary
Market Maker no longer is required to guarantee a minimum of 10
contracts to an incoming linkage order when the Exchange's disseminated
market quotation is for less than 10 contracts. However, the Exchange
neglected to remove the language in ISE Rule 803(c)(1) at the time the
changes to the linkage rules were approved, thereby creating an
inconsistency in the ISE Rules. The Exchange now proposes to delete the
language in ISE Rule 803(c)(1) as a purely non-substantive clean-up of
the ISE Rules.
---------------------------------------------------------------------------
\9\ See Exchange Act Release No. 50211 (August 18, 2004), 69 FR
52050 (August 24, 2004).
\10\ See Exchange Act Release Nos. 50562 (October 19, 2004), 69
FR 62925 (October 28, 2004) and 50587 (October 25, 2004), 69 FR
63417 (November 1, 2004).
---------------------------------------------------------------------------
III. Discussion
After careful review, the Commission finds that the proposed rule
change, as amended, is consistent with the requirements of the Act and
the rules and regulations thereunder applicable to a national
securities exchange.\11\ In particular, the Commission finds that the
proposal is consistent with the requirements of Section 6(b)(5) of the
Act,\12\ which requires, among other things, that the rules of a
national securities exchange be designed to promote just and equitable
principles of trade, to remove impediments to and perfect the mechanism
of a free and open market and a national market system, and to protect
investors and the public interest.
---------------------------------------------------------------------------
\11\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\12\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Commission believes that the proposal should help to ensure
that the functions of the Primary Market Maker are performed in an
uninterrupted fashion even when a Primary Market Maker experiences
difficulties that cause it to remove its quotes from the market. In
particular, the Commission believes that the proposed rule change
should help to ensure that the Back-Up Primary Market Makers would
provide continuous quotations in all of the series of the options
classes in a manner consistent with the obligations of the Primary
Market Maker, set forth in ISE Rule 803. Further, this proposed rule
change should reduce the number of non-firm quotes or ``fast market''
states disseminated by the ISE.\13\
---------------------------------------------------------------------------
\13\ The Commission notes that the Exchange represents that most
interruptions in Primary Market Maker quoting are very brief in
duration. Telephone conversation between Katherine Simmons, Deputy
General Counsel, ISE, Marc F. McKayle, Special Counsel, Division of
Market Regulation (``Division''), Commission and Johnna B. Dumler,
Attorney, Division, Commission on November 2, 2005.
---------------------------------------------------------------------------
The ISE proposal to indicate that a Primary Market Maker is not
required to guarantee a minimum of 10 contracts to an incoming linkage
order when the Exchange's disseminated market quotation is less than 10
contracts is of a clarifying and technical nature. Accordingly, based
on the foregoing the Commission believes that the proposal is
consistent with the requirements of the Act and the rules and
regulations thereunder.
IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\14\ that the proposed rule change (SR-ISE-2005-50) is approved, as
amended.
---------------------------------------------------------------------------
\14\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\15\
---------------------------------------------------------------------------
\15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Nancy M. Morris,
Secretary.
[FR Doc. E6-3492 Filed 3-10-06; 8:45 am]
BILLING CODE 8010-01-P
