Self-Regulatory Organizations; International Securities Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Exposure Period for Crossing Orders, 30703-30705 [E6-8236]

Download as PDF Federal Register / Vol. 71, No. 103 / Tuesday, May 30, 2006 / Notices 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: For the Commission by the Division of Market Regulation, pursuant to delegated authority.12 Nancy M. Morris, Secretary. [FR Doc. E6–8237 Filed 5–26–06; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION Electronic Comments [Release No. 34–53850; File No. SR–ISE– 2006–21] • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml) or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–FICC–2006–04 on the subject line. Self-Regulatory Organizations; International Securities Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Exposure Period for Crossing Orders May 23, 2006. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 • Send paper comments in triplicate (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 to Nancy M. Morris, Secretary, notice is hereby given that on April 17, Securities and Exchange Commission, 2006, the International Securities 100 F Street, NE., Washington, DC Exchange, Inc. (‘‘ISE’’ or ‘‘Exchange’’) filed with the Securities and Exchange 20549–1090. Commission (‘‘Commission’’) the All submissions should refer to File proposed rule change as described in Number SR–FICC–2006–04. This file Items I and II below, which Items have number should be included on the been prepared by the ISE. The ISE filed subject line if e-mail is used. To help the the proposed rule change pursuant to Commission process and review your section 19(b)(3)(A) of the Act 3 and Rule comments more efficiently, please use 19b–4(f)(6) thereunder,4 which renders only one method. The Commission will the proposal effective upon filing with post all comments on the Commission’s the Commission. The Commission is Internet Web site (http://www.sec.gov/ publishing this notice to solicit rules/sro.shtml). Copies of the comments on the proposed rule change submission, all subsequent from interested persons. amendments, all written statements I. Self-Regulatory Organization’s with respect to the proposed rule Statement of the Terms of Substance of change that are filed with the the Proposed Rule Change Commission, and all written The ISE proposes to decrease the communications relating to the exposure period for crossing orders proposed rule change between the Commission and any person, other than under ISE Rule 717(d) and (e) to three seconds. The text of the proposed rule those that may be withheld from the change is as follows, with deletions in public in accordance with the [brackets] and additions italicized. provisions of 5 U.S.C. 552, will be available for inspection and copying in Rule 717. Limitations on Orders the Commission’s Public Reference * * * * * Section, 100 F Street, NE., Washington, (d) Principal Transactions. DC 20549. Copies of such filing also will Electronic Access Members may not be available for inspection and copying execute as principal orders they at the principal office of FICC and on represent as agent unless (i) agency FICC’s Web site at http://www.ficc.com. orders are first exposed on the Exchange All comments received will be posted for at least three (3) [thirty (30)] seconds, without change; the Commission does (ii) the Electronic Access Member has not edit personal identifying been bidding or offering on the information from submissions. You Exchange for at least three (3) [thirty should submit only information that 12 17 CFR 200.30–3(a)(12). you wish to make available publicly. All 1 15 U.S.C. 78s(b)(1). submissions should refer to File 2 17 CFR 240.19b–4. Number SR-FICC–2006–04 and should 3 15 U.S.C. 78s(b)(3)(A). be submitted on or before June 20, 2006. 4 17 CFR 240.19b–4(f)(6). jlentini on PROD1PC65 with NOTICES Paper Comments≤ VerDate Aug<31>2005 16:51 May 26, 2006 Jkt 208001 PO 00000 Frm 00055 Fmt 4703 Sfmt 4703 30703 (30)] seconds prior to receiving an agency order that is executable against such bid or offer, or (iii) the Member utilizes the Facilitation Mechanism pursuant to Rule 716(d). (e) Solicitation Orders. Electronic Access Members may not execute orders they represent as agent on the Exchange against orders solicited from Members and non-member brokerdealers to transact with such orders unless (i) the unsolicited order is first exposed on the Exchange for at least three (3) [thirty (30)] seconds, or (ii) the Member utilizes the Solicited Order Mechanism pursuant to Rule 716(e). * * * * * 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 An Electronic Access Member (‘‘EAM’’) of the Exchange may not execute an order it represents as agent with a facilitation or solicited order (referred to herein as ‘‘crossing orders’’) unless it complies with the order exposure requirements contained in ISE Rule 717(d) and (e) respectively. As set forth in these provisions, if an EAM seeking to cross two orders does not choose to use the Facilitation Mechanism or the Solicited Order Mechanism, which automatically expose crossing orders for 3 seconds, it is required to comply with a 30-second exposure requirement. Specifically, when an EAM chooses not to use the Facilitation Mechanism, it may not execute a facilitation cross unless (i) the agency order is first exposed on the Exchange for at least 30 seconds; or (ii) the EAM has been bidding or offering on the Exchange for at least 30 seconds prior to receiving the agency order that is executable against such bid or offer. Similarly, when an EAM chooses not to use the Solicited Order Mechanism, it may not execute a solicitation cross E:\FR\FM\30MYN1.SGM 30MYN1 30704 Federal Register / Vol. 71, No. 103 / Tuesday, May 30, 2006 / Notices unless the agency order is first exposed on the Exchange for 30 seconds. The Exchange proposes to shorten the duration of the exposure period contained in the rules governing such transactions from 30 seconds to 3 seconds. This shortened exposure period is fully consistent with the electronic nature of the Exchange’s market. Market participants on the ISE have implemented systems that monitor any updates to the ISE market, including any changes resulting from orders being entered into the market, and can automatically respond based on pre-set parameters. Thus, an exposure period of 3 seconds will permit exposure of orders on the ISE in a manner consistent with the Exchange’s electronic market. By reducing the exposure time to 3 seconds, the ISE believes that EAMs will be able to provide liquidity to their customers’ orders on a timelier basis, thus providing investors with more speedy executions. Timely and accurate executions are consistent with the principles under which the ISE’s electronic market was developed. 2. Statutory Basis The basis under the Act for this proposed rule change is the requirement under section 6(b)(5) 5 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 proposal will permit members to provide liquidity to customer orders on a more timely basis, thus providing investors with more speedy executions. At the same time, it will preserve a reasonable period for orders to interact in the auction market. jlentini on PROD1PC65 with NOTICES 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. 5 15 U.S.C. 78f(b)(5). VerDate Aug<31>2005 16:51 May 26, 2006 Jkt 208001 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 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 from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to section 19(b)(3)(A) of the Act 6 and Rule 19b4(f)(6) thereunder.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. 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.8 However, Rule 19b4(f)(6)(iii) 9 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The ISE has requested that the Commission waive the 30-day operative delay. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because the proposed rule change is based on rules recently approved by the Commission for two other exchanges.10 For this reason, the 6 15 U.S.C. 78s(b)(3)(A). CFR 240.19b-4(f)(6). When filing a proposed rule change pursuant to Rule 19b-4(f)(6) under the Act, an Exchange is required to give 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 of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange provided notice to the Commission two business days prior to filing the proposed rule change, and the Commission has determined to waive the five business day requirement. 8 17 CFR 240.19b-4(f)(6)(iii). 9 Id. 10 See Securities Exchange Act Release Nos. 53567 (March 29, 2006), 71 FR 17529 (April 6, 2006) (SR–CBOE–2006–09) and 53609 (April 6, 7 17 PO 00000 Frm 00056 Fmt 4703 Sfmt 4703 Commission designates the proposal to be effective and operative upon filing with the Commission.11 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 rulecomments@sec.gov. Please include File Number SR–ISE–2006–21 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–2006–21. 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. 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–2006–21 and should be submitted on or before June 20, 2006. 2006), 71 FR 19224 (April 13, 2006) (SR– NYSEArca-2006–01). 11 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). E:\FR\FM\30MYN1.SGM 30MYN1 Federal Register / Vol. 71, No. 103 / Tuesday, May 30, 2006 / Notices For the Commission, by the Division of Market Regulation, pursuant to delegated authority.12 rule change. On May 10, 2006, the Exchange withdrew Amendment No. 2 and filed Amendment No. 3 to the proposed rule change.5 This order approves the proposed rule change. Jill M. Peterson, Assistant Secretary. [FR Doc. E6–8236 Filed 5–26–06; 8:45 am] II. Description BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–53848; File No. SR–NYSE– 2005–78] Self-Regulatory Organizations; New York Stock Exchange, Inc. (n/k/a New York Stock Exchange LLC); Order Approving a Proposed Rule Change Relating to Amendments to New York Stock Exchange Rules 35 (‘‘Floor Employees to be Registered’’) and 301 (‘‘Proposed Transfer or Lease of Membership’’) May 19, 2006. I. Introduction On December 13, 2005, the New York Stock Exchange, Inc. (n/k/a New York Stock Exchange LLC) (‘‘NYSE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’ or ‘‘SEC’’), 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 seeking to amend NYSE Rules 35 (‘‘Floor Employees to be Registered’’) and 301 (‘‘Proposed Transfer or Lease of Membership’’) which would limit access to the Exchange Floor until fingerprint reports have been properly processed and approved, require an alternative background check for persons whose fingerprints are deemed illegible, and clarify that the Exchange would no longer process fingerprint cards. The proposed rule change was noticed for comment in the Federal Register on December 29, 2005.3 The Commission received no comments on the proposed rule change. On March 20, 2006, the Exchange filed Amendment No. 1.4 On May 4, 2006, the Exchange filed Amendment No. 2 to the proposed 12 17 CFR 200/30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 53018 (December 14, 2005), 70 FR 77230 (December 29, 2005). 4 In Amendment No. 1, the Exchange deleted Footnote 1 from the original filing and clarified that upon the cessation of the sale of memberships at the end of 2005, the Exchange would no longer provide fingerprinting services to any of its members. This amendment did not affect the substance of the proposed rule change; therefore, the Commission is not noticing this Amendment for public comment. jlentini on PROD1PC65 with NOTICES 1 15 VerDate Aug<31>2005 16:51 May 26, 2006 Jkt 208001 NYSE Rule 35 governs the issuance of Floor tickets (i.e., Regular Tickets and Special Tickets) to Floor employees, which enables them to enter upon the trading Floor. NYSE Rule 35.70 requires the fingerprinting of prospective employees of members and member organizations. Similarly, NYSE Rule 301(c) requires that prospective members be fingerprinted. Due to security concerns, the Exchange is proposing to tighten these rules by: (1) Denying access to the Floor for persons fingerprinted for the first time until the fingerprinting results have properly been processed and accepted; and (2) subjecting persons whose fingerprints cannot be read (i.e., are illegible) to an alternative background check acceptable to the Exchange that would cover the same criminal convictions included by a fingerprint background check. NYSE’s proposed amendments also reflect that the Exchange no longer accepts fingerprint cards, but rather requires members and applicants for membership to be fingerprinted through an agent acceptable to the Exchange. A. Background Rule 17f–2 under the Exchange Act 6 sets out the requirements for the fingerprinting of persons employed in the securities industry. The Exchange has adopted procedures to comply with the regulations in order to assure that appropriate persons are fingerprinted and the results of the fingerprinting are reviewed.7 Specifically, prior to providing member firm employees with Floor ticket access to the Trading Floor and Exchange facilities, and pursuant to NYSE Rules 35 and 345.11 (‘‘Employees—Registration, Approval, 5 In Amendment No. 3, the Exchange made technical changes to reflect modifications made to the format of NYSE Rule 301 that were approved as part of SR–NYSE–2005–77. See Securities Exchange Act Release No. 53382 (February 27, 2006), 71 FR 11251 (March 6, 2006). Due to the purely technical nature of Amendment No. 3, the Commission is not noticing this Amendment for public comment. 6 17 CFR 240.17f–2. 7 See NYSE Information Memos 76–30 dated June 25, 1976 and 76–53, dated December 31, 1976, announcing, respectively, the adoption of Exchange Act Rule 17f–2 and SEC approval of the Exchange’s plan for the processing of fingerprints. See also Securities Exchange Act Release No. 13105 (December 23, 1976), 42 FR 753 (January 4, 1977). PO 00000 Frm 00057 Fmt 4703 Sfmt 4703 30705 Records’’),8 a member firm must electronically submit a Form U4 9 via the Central Registration Depository system (‘‘CRD’’).10 The hiring member firm and the employee are responsible for confirming the accuracy of the information included on the Form U4.11 Members and member organizations currently have up to 30 days from the date of the electronic filing of the Form U4 application in Web CRD for the fingerprints to be submitted. The Exchange has represented that applicants and member organizations sometimes wait until the end of the 30day period to submit fingerprints, although results from the Federal Bureau of Investigation (‘‘FBI’’) can be reported within 24–48 hours. B. NYSE’s Proposed Rule Change 1. Access to Exchange Floor NYSE is proposing that prospective Floor employees not be admitted to the Floor until the results of the applicant’s fingerprinting have been posted to the CRD, reviewed and approved. NYSE, however, would grant conditional approval to an applicant who had been fingerprinted previously in connection with employment by another member or registered broker-dealer, pending review of the fingerprint results submitted by the current employer, if the prior employment was within ninety days of the application. 2. Illegible Fingerprints—Alternative Background Checks The Exchange also is proposing to address its concern about applicants that submit fingerprints which cannot be read (i.e., illegible fingerprints). Under Exchange Act Rule 17f– 2(a)(l)(iv),12 when fingerprints are rejected three times as ‘‘illegible’’ by the FBI, the individual is exempt from further fingerprinting.13 Exchange Act 8 NYSE Rule 345.11 requires, among other things, member firms to thoroughly investigate the previous record of persons whom they contemplate employing. 9 Form U4 includes information such as an individual’s ten-year employment history, five-year residential history, education, disciplinary actions, disclosure information, and the SRO of registration. 10 The CRD is a registration and licensing system for the U.S. securities industry, state and federal regulators, and SROs. The National Association of Securities Dealers, Inc. (‘‘NASD’’) operates the CRD pursuant to policies developed jointly with the North American Securities Administrators Association, Inc. 11 Firms can use CRD to verify the accuracy of the disclosure portion (e.g., criminal disclosures, regulatory action disclosures) of Form U4 against previously submitted filings and fingerprint results. 12 17 CFR 240.17f-2(a)(1)(iv). 13 In this instance, CRD also conducts a ‘‘name check.’’ E:\FR\FM\30MYN1.SGM 30MYN1

Agencies

[Federal Register Volume 71, Number 103 (Tuesday, May 30, 2006)]
[Notices]
[Pages 30703-30705]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-8236]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53850; File No. SR-ISE-2006-21]


Self-Regulatory Organizations; International Securities Exchange, 
Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change Relating to the Exposure Period for Crossing Orders

May 23, 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 April 17, 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 and 
II below, which Items have been prepared by the ISE. The ISE filed the 
proposed 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 ISE proposes to decrease the exposure period for crossing 
orders under ISE Rule 717(d) and (e) to three seconds. The text of the 
proposed rule change is as follows, with deletions in [brackets] and 
additions italicized.

Rule 717. Limitations on Orders

* * * * *
    (d) Principal Transactions.
    Electronic Access Members may not execute as principal orders they 
represent as agent unless (i) agency orders are first exposed on the 
Exchange for at least three (3) [thirty (30)] seconds, (ii) the 
Electronic Access Member has been bidding or offering on the Exchange 
for at least three (3) [thirty (30)] seconds prior to receiving an 
agency order that is executable against such bid or offer, or (iii) the 
Member utilizes the Facilitation Mechanism pursuant to Rule 716(d).
    (e) Solicitation Orders.
    Electronic Access Members may not execute orders they represent as 
agent on the Exchange against orders solicited from Members and non-
member broker-dealers to transact with such orders unless (i) the 
unsolicited order is first exposed on the Exchange for at least three 
(3) [thirty (30)] seconds, or (ii) the Member utilizes the Solicited 
Order Mechanism pursuant to Rule 716(e).
* * * * *

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
    An Electronic Access Member (``EAM'') of the Exchange may not 
execute an order it represents as agent with a facilitation or 
solicited order (referred to herein as ``crossing orders'') unless it 
complies with the order exposure requirements contained in ISE Rule 
717(d) and (e) respectively. As set forth in these provisions, if an 
EAM seeking to cross two orders does not choose to use the Facilitation 
Mechanism or the Solicited Order Mechanism, which automatically expose 
crossing orders for 3 seconds, it is required to comply with a 30-
second exposure requirement. Specifically, when an EAM chooses not to 
use the Facilitation Mechanism, it may not execute a facilitation cross 
unless (i) the agency order is first exposed on the Exchange for at 
least 30 seconds; or (ii) the EAM has been bidding or offering on the 
Exchange for at least 30 seconds prior to receiving the agency order 
that is executable against such bid or offer. Similarly, when an EAM 
chooses not to use the Solicited Order Mechanism, it may not execute a 
solicitation cross

[[Page 30704]]

unless the agency order is first exposed on the Exchange for 30 
seconds.
    The Exchange proposes to shorten the duration of the exposure 
period contained in the rules governing such transactions from 30 
seconds to 3 seconds. This shortened exposure period is fully 
consistent with the electronic nature of the Exchange's market. Market 
participants on the ISE have implemented systems that monitor any 
updates to the ISE market, including any changes resulting from orders 
being entered into the market, and can automatically respond based on 
pre-set parameters. Thus, an exposure period of 3 seconds will permit 
exposure of orders on the ISE in a manner consistent with the 
Exchange's electronic market.
    By reducing the exposure time to 3 seconds, the ISE believes that 
EAMs will be able to provide liquidity to their customers' orders on a 
timelier basis, thus providing investors with more speedy executions. 
Timely and accurate executions are consistent with the principles under 
which the ISE's electronic market was developed.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under section 6(b)(5) \5\ 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 proposal will permit members to provide liquidity to 
customer orders on a more timely basis, thus providing investors with 
more speedy executions. At the same time, it will preserve a reasonable 
period for orders to interact in the auction market.
---------------------------------------------------------------------------

    \5\ 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 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 from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to section 19(b)(3)(A) of the Act \6\ and Rule 19b-
4(f)(6) thereunder.\7\
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(f)(6). When filing a proposed rule change 
pursuant to Rule 19b-4(f)(6) under the Act, an Exchange is required 
to give 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 
of filing of the proposed rule change, or such shorter time as 
designated by the Commission. The Exchange provided notice to the 
Commission two business days prior to filing the proposed rule 
change, and the Commission has determined to waive the five business 
day requirement.
---------------------------------------------------------------------------

    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.
    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.\8\ 
However, Rule 19b-4(f)(6)(iii) \9\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. The ISE has requested that the 
Commission waive the 30-day operative delay. The Commission believes 
that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest because the proposed 
rule change is based on rules recently approved by the Commission for 
two other exchanges.\10\ For this reason, the Commission designates the 
proposal to be effective and operative upon filing with the 
Commission.\11\
---------------------------------------------------------------------------

    \8\ 17 CFR 240.19b-4(f)(6)(iii).
    \9\ Id.
    \10\ See Securities Exchange Act Release Nos. 53567 (March 29, 
2006), 71 FR 17529 (April 6, 2006) (SR-CBOE-2006-09) and 53609 
(April 6, 2006), 71 FR 19224 (April 13, 2006) (SR-NYSEArca-2006-01).
    \11\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

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-2006-21 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-2006-21. 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. 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-2006-21 and should be submitted on or before June 
20, 2006.

[[Page 30705]]

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

    \12\ 17 CFR 200/30-3(a)(12).

Jill M. Peterson,
Assistant Secretary.
 [FR Doc. E6-8236 Filed 5-26-06; 8:45 am]
BILLING CODE 8010-01-P