Self-Regulatory Organizations; International Securities Exchange, Inc.; Order Approving a Proposed Rule Change and Amendment No. 1 Thereto and Notice of Filing and Order Granting Accelerated Approval to Amendments No. 2 and 3 Thereto To Permit the Listing and Trading of Quarterly Options Series, 39694-39696 [E6-11002]

Download as PDF 39694 Federal Register / Vol. 71, No. 134 / Thursday, July 13, 2006 / Notices submissions should refer to File Number SR–Amex–2006–27 and should be submitted on or before August 3, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.11 Jill M. Peterson, Assistant Secretary. [FR Doc. E6–11031 Filed 7–12–06; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54107; File No. SR–CHX– 2006–18] Self-Regulatory Organization; Chicago Stock Exchange, Inc.; Order Approving Proposed Rule Change Amending a Notice Provision Relating to the Renewal of Trading Permits and Policy .01 to CHX Article II, Rule 3, to allow a Participant to cancel a trading permit in 2006 if the Participant provided notice to CHX at any time during the 60 days preceding February 9, 2006. According to CHX, CHX Article II, Rule 3, caused some confusion among its Participants. The Commission therefore finds that the proposed rule change is an appropriate one time relief to allow CHX Participants to cancel their trading permits. It is therefore ordered, pursuant to Section 19(b)(2) of the Act,6 that the proposed rule change (SR–CHX–2006– 18) be, and it hereby is, approved. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.7 Jill M. Peterson, Assistant Secretary. [FR Doc. E6–11004 Filed 7–12–06; 8:45 am] BILLING CODE 8010–01–P July 6, 2006. On May 10, 2006, the Chicago Stock Exchange, Inc. (‘‘CHX’’ or ‘‘Exchange’’) 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 the 60-day notice requirement to cancel trading permits for 2006. The proposed rule change was published for comment in the Federal Register on June 1, 2006.3 The Commission received no comments regarding the proposal. The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.4 In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act,5 which requires that the rules of the an 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 securities system, and, in general, to protect investors and the public interest. CHX Article II, Rule 3, requires Participants to provide CHX with 60days notice to cancel a trading permit. The Exchange proposes in Interpretation 11 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. 53859 (May 24, 2006), 71 FR 31241. 4 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). 5 15 U.S.C. 78f(b)(5). sroberts on PROD1PC70 with NOTICES 1 15 VerDate Aug<31>2005 17:46 Jul 12, 2006 Jkt 208001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54113 File No. SR–ISE– 2006–24] Self-Regulatory Organizations; International Securities Exchange, Inc.; Order Approving a Proposed Rule Change and Amendment No. 1 Thereto and Notice of Filing and Order Granting Accelerated Approval to Amendments No. 2 and 3 Thereto To Permit the Listing and Trading of Quarterly Options Series July 7, 2006. I. Introduction On May 2, 2006, the International Securities Exchange, Inc. (‘‘ISE’’ or ‘‘Exchange’’) 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 initiate a one-year pilot program that would allow the Exchange to list and trade options series that expire at the close of business on the last business day of a calendar quarter (‘‘Quarterly Options Series’’). The Exchange filed Amendment No. 1 with the Commission on May 17, 2006.3 The amended proposal was published for comment in U.S.C. 78s(b)(2). CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 In Amendment No. 1, a partial amendment, the Exchange made minor modifications to the proposed rule text. PO 00000 6 15 7 17 Frm 00040 Fmt 4703 Sfmt 4703 the Federal Register on June 1, 2006.4 No comments were received regarding the amended proposal. The Exchange filed Amendments No. 2 and 3 with the Commission on July 6, 2006, and July 7, 2006, respectively.5 This notice and order approves the proposed rule change and Amendment No. 1 thereto, solicits comment on Amendments No. 2 and 3, and approves Amendments No. 2 and 3 on an accelerated basis. II. Description of Proposed Rule ISE proposes to amend its rules to establish a pilot program to list and trade Quarterly Options Series, which would expire at the close of business on the last business day of a calendar quarter (‘‘Pilot Program’’). Under the proposal, the Exchange could select up to five approved options classes 6 on which Quarterly Options Series could be opened. A series could be opened on any business day and would expire at the close of business on the last business day of a calendar quarter. The Exchange also could list and trade Quarterly Options Series on any options class that is selected by another exchange that employs a similar pilot program. For each class selected for the Pilot Program, the Exchange would list series that expire at the end of the next four consecutive calendar quarters, as well as the fourth quarter of the following calendar year. Quarterly Options Series listed on currently approved options classes would be P.M. settled and, in all other respects, would settle in the same manner as do the monthly expiration series in the same options class. The strike price for each series would be fixed at a price per share, with two strike prices above and two strike prices below the value of the underlying security at about the time that a Quarterly Options Series is opened for trading on the Exchange. The interval between strike prices on Quarterly Options Series would be the same as the interval between strike prices for series in the same options class that expire in accordance with the normal monthly expiration cycles. In Amendment No. 3, 4 See Securities Exchange Act Release No. 53857 (May 24, 2006), 71 FR 31246 (‘‘Notice’’). 5 In Amendment No. 2, a partial amendment, the Exchange modified the provision of the proposed rule text under which the Exchange may list additional strike prices for Quarterly Options Series. In Amendment No. 3, a partial amendment, the Exchange modified the proposed rule text to provide that the Exchange may list Quarterly Options Series with strike prices that are within $5.00 from the closing price of the underlying security on the preceding trading day. See discussion in Part II, infra. 6 Quarterly Options Series may be opened on indexes or on Exchange Traded Funds that satisfy the applicable listing criteria under ISE rules. E:\FR\FM\13JYN1.SGM 13JYN1 Federal Register / Vol. 71, No. 134 / Thursday, July 13, 2006 / Notices the Exchange proposes rule text providing that the series listed by the Exchange under the Pilot Program would have strike prices that are within $5.00 from the closing price of the underlying security on the preceding trading day. The proposal would permit the Exchange to open for trading additional Quarterly Options Series of the same class when the Exchange deems it necessary to maintain an orderly market, to meet customer demand, or when the market price of the underlying security moves substantially from the initial exercise price or prices. In Amendment No. 2, the Exchange proposes rule text that provides that any additional series opened for trading by the Exchange would be priced within $5.00 of the closing price of the underlying security on the preceding trading day. ISE proposes that the Pilot Program extend one year from the date the Exchange first initiates trading in a Quarterly Options Series, which, as per the proposed rules, would be no later than July 24, 2006.7 sroberts on PROD1PC70 with NOTICES III. Discussion After careful review, the Commission finds that the proposal, as amended, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.8 In particular, the Commission believes that the proposal is consistent with the requirements of Section 6(b)(5) of the Act,9 which requires, among other things, that the rules of a national securities exchange be designed to remove impediments to and perfect the mechanism of a free and open market and a national market system, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest. The Commission believes that allowing the Exchange to list and trade Quarterly Options Series, under the terms described in the Exchange’s proposal, should provide investors with new means of managing their risk exposures and carrying out their investment objectives. The Commission notes that the Pilot Program limits the series that may be opened pursuant to the Pilot Program by requiring them to have strike prices within $5.00 of the closing price of the underlying security on the preceding trading day. The 7 See ISE Proposed Rules 504, Supplementary Material .03, and 2009, Supplementary Material .02. 8 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). 9 15 U.S.C. 78f(b)(5). VerDate Aug<31>2005 17:46 Jul 12, 2006 Jkt 208001 Commission believes this restriction should allow the exchange to offer a wider array of investment opportunities, while minimizing the impact on quotation message traffic. The Commission also notes that the proposal requires the Exchange to closely monitor the trading and quotation volume associated with the additional options series created under the Pilot Program and the effect of these additional series on the capacity of the Exchange’s, OPRA’s, and vendors’ systems.10 Pursuant to Section 19(b)(2) of the Act,11 the Commission finds good cause for approving the amended proposal prior to the thirtieth day after the publication of Amendments No. 2 and 3 in the Federal Register. Amendments No. 2 and 3 modify the proposed rule text by placing restrictions on the series the Exchange may open for trading in an approved class. Any series opened for trading pursuant to the Pilot Program would have strike prices within $5.00 of the closing price of the underlying security on the preceding trading day. This restriction is modeled after the identical provision previously approved as part of the Exchange’s $1 Strike Pilot Program, and thus raises no new issues of regulatory concern.12 The Commission finds good cause to accelerate approval of the amended proposal because it believes this restriction should help to minimize the Pilot Program’s impact on quotation message traffic. IV. Solicitation of Comments Concerning Amendments No. 2 and 3 Interested persons are invited to submit written data, views, and arguments concerning Amendments No. 2 and 3, including whether it 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–2006–24 on the subject line. 10 If the Exchange were to propose an extension, expansion, or permanent approval of the Pilot Program, the Exchange would be required to submit a report on the Pilot Program to the Commission at least 60 days prior to the Pilot Program expiration date. See Notice, supra note 4, at 31248. 11 15 U.S.C. 78s(b)(2). 12 See ISE Rule 504(g). PO 00000 Frm 00041 Fmt 4703 Sfmt 4703 39695 Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–ISE–2006–24. 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 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–2006–24 and should be submitted on or before August 3, 2006. V. Conclusion For the foregoing reasons, the Commission finds that the proposed rule change, as amended, is consistent with the requirements of the Act and the rules and regulations thereunder. It is therefore ordered, pursuant to Section 19(b)(2) of the Act,13 that the proposed rule change (File No. SR–ISE– 2006–24), as amended, is approved, and that Amendments No. 2 and 3 thereto are approved on an accelerated basis, as a pilot program for a one-year period commencing on the day the Exchange first initiates trading in a Quarterly Options Series, which, as per the proposed rules, would be no later than July 24, 2006.14 13 Id. 14 See ISE Proposed Rules 504, Supplementary Material .03, and 2009, Supplementary Material .02. E:\FR\FM\13JYN1.SGM 13JYN1 39696 Federal Register / Vol. 71, No. 134 / Thursday, July 13, 2006 / Notices For the Commission, by the Division of Market Regulation, pursuant to delegated authority.15 Nancy M. Morris, Secretary. [FR Doc. E6–11002 Filed 7–12–06; 8:45 am] BILLING CODE 8010–01–P DEPARTMENT OF STATE State (telephone: 202/453–8052). The address is U.S. Department of State, SA– 44, 301 4th Street, SW., Room 700, Washington, DC 20547–0001. Dated: July 6, 2006. C. Miller Crouch, Principal Deputy Assistant Secretary for Educational and Cultural Affairs, Department of State. [FR Doc. E6–11048 Filed 7–12–06; 8:45 am] BILLING CODE 4710–05–P Culturally Significant Objects Imported for Exhibition Determinations: ‘‘Gregor Mendel: Planting the Seeds of Genetics’’ sroberts on PROD1PC70 with NOTICES [Public Notice 5463] DEPARTMENT OF STATE Summary: Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681, et seq.; 22 U.S.C. 6501 note, et seq.), Delegation of Authority No. 234 of October 1, 1999, Delegation of Authority No. 236 of October 19, 1999, as amended, and Delegation of Authority No. 257 of April 15, 2003 [68 FR 19875], I hereby determine that the objects to be included in the exhibition ‘‘Gregor Mendel: Planting the Seeds of Genetics’’, imported from abroad for temporary exhibition within the United States, are of cultural significance. The objects are imported pursuant to loan agreements with the foreign owners or custodians. I also determine that the exhibition or display of the exhibit objects at The Field Museum, Chicago, Illinois, beginning on or about September 15, 2006, until on or about April 1, 2007, at a second venue yet to be determined, beginning on or about April 2007, until on or about September 2007, at the Center of Science and Industry, Columbus, Ohio, beginning on or about October 13, 2007, until on or about January 6, 2008, at Pink Palace Family of Museums, Memphis, Tennessee, beginning on or about February 2, 2008, until on or about April 27, 2008, and at Academy of Natural Sciences, Philadelphia, Pennsylvania, beginning on or about May 24. 2008, until on or about September 28, 2008, and at possible additional venues yet to be determined, is in the national interest. Public Notice of these Determinations is ordered to be published in the Federal Register. For Further Information Contact: For further information, including a list of the exhibit objects, contact Paul Manning, Attorney-Adviser, Office of the Legal Adviser, U.S. Department of 15 17 CFR 200.30–3(a)(12). VerDate Aug<31>2005 17:46 Jul 12, 2006 Jkt 208001 [Public Notice 5464] Rescission of Determination Regarding Libya In accordance with section 6(j) of the Export Administration Act of 1979 (50 U.S.C. App. 2405(j)), and as continued in effect by Executive Order 13222 of August 17, 2001, I hereby rescind the Determination of December 29, 1979 regarding Libya (Public Notice 1264). This action is based upon the considerations contained in the memorandum accompanying Presidential Determination No. 2006–14 of May 12, 2006, [71 FR 31909] This rescission shall also satisfy the provisions of section 620A(c) of the Foreign Assistance Act of 1961, Public Law 87–195, as amended (22 U.S.C. 2371(c)), and section 40(f) of the Arms Export Control Act, Public Law 90–629, as amended (22 U.S.C. 2780(f)). Dated: June 30, 2006. Condoleezza Rice, Secretary of State, Department of State. [FR Doc. E6–11046 Filed 7–12–06; 8:45 am] BILLING CODE 4710–31–P Special Passenger Amending Between Sri Lanka and India (Memo 0983). Intended effective date: 31 October 2006. Docket Number: OST–2006–25170. Date Filed: June 20, 2006. Parties: Members of the International Air Transport Association. Subject: CAC/34/Meet/011/06 dated 15 June 2006 Normal Resolutions 801/801a/801r/ 801re/803/805/805zz/807/809/809zz/ 813/815/815e (Minutes relevant to the Resolutions are included in CAC/34/Meet/010/06 dated 14 June 2006). Intended effective date: 1 October 2006. Docket Number: OST–2006–25172. Date Filed: June 20, 2006. Parties: Members of the International Air Transport Association. Subject: TC2 Within Europe Expedited Resolutions (Memo 0636) Minutes: TC2 Within Europe (Memo 0637). Intended effective date: 15 July 2006. Docket Number: OST–2006–25179. Date Filed: June 21, 2006. Parties: Members of the International Air Transport Association. Subject: Mail Vote 491—Resolution 010r TC3 Japan, Korea-South East Asia Special Passenger Amending between Japan and Russia (in Asia) (Memo 0984). Intended effective date: 1 July 2006. Renee V. Wright, Program Manager, Docket Operations, Federal Register Liaison. [FR Doc. E6–11036 Filed 7–12–06; 8:45 am] BILLING CODE 4910–9X–P DEPARTMENT OF TRANSPORTATION DEPARTMENT OF TRANSPORTATION Office of the Secretary Aviation Proceedings, Agreements Filed the Week Ending June 23, 2006 The following Agreements were filed with the Department of Transportation under Sections 412 and 414 of the Federal Aviation Act, as amended (49 U.S.C. 1382 and 1384) and procedures governing proceedings to enforce these provisions. Answers may be filed within 21 days after the filing of the application. Docket Number: OST–2006–25151. Date Filed: June 19, 2006. Parties: Members of the International Air Transport Association. Subject: Mail Vote 490—Resolution 010q TC3 Within South Asian Subcontinent PO 00000 Frm 00042 Fmt 4703 Sfmt 4703 Office of the Secretary Notice of Applications for Certificates of Public Convenience and Necessity and Foreign Air Carrier Permits Filed Under Subpart B (Formerly Subpart Q) During the Week Ending June 23, 2006 The following Applications for Certificates of Public Convenience and Necessity and Foreign Air Carrier Permits were filed under Subpart B (formerly Subpart Q) of the Department of Transportation’s Procedural Regulations (See 14 CFR 301.201 et seq.). The due date for Answers, Conforming Applications, or Motions to Modify Scope are set forth below for each application. Following the Answer period DOT may process the application E:\FR\FM\13JYN1.SGM 13JYN1

Agencies

[Federal Register Volume 71, Number 134 (Thursday, July 13, 2006)]
[Notices]
[Pages 39694-39696]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-11002]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54113 File No. SR-ISE-2006-24]


Self-Regulatory Organizations; International Securities Exchange, 
Inc.; Order Approving a Proposed Rule Change and Amendment No. 1 
Thereto and Notice of Filing and Order Granting Accelerated Approval to 
Amendments No. 2 and 3 Thereto To Permit the Listing and Trading of 
Quarterly Options Series

July 7, 2006.

I. Introduction

    On May 2, 2006, the International Securities Exchange, Inc. 
(``ISE'' or ``Exchange'') 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 initiate a one-year pilot 
program that would allow the Exchange to list and trade options series 
that expire at the close of business on the last business day of a 
calendar quarter (``Quarterly Options Series''). The Exchange filed 
Amendment No. 1 with the Commission on May 17, 2006.\3\ The amended 
proposal was published for comment in the Federal Register on June 1, 
2006.\4\ No comments were received regarding the amended proposal. The 
Exchange filed Amendments No. 2 and 3 with the Commission on July 6, 
2006, and July 7, 2006, respectively.\5\ This notice and order approves 
the proposed rule change and Amendment No. 1 thereto, solicits comment 
on Amendments No. 2 and 3, and approves Amendments No. 2 and 3 on an 
accelerated basis.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ In Amendment No. 1, a partial amendment, the Exchange made 
minor modifications to the proposed rule text.
    \4\  See Securities Exchange Act Release No. 53857 (May 24, 
2006), 71 FR 31246 (``Notice'').
    \5\ In Amendment No. 2, a partial amendment, the Exchange 
modified the provision of the proposed rule text under which the 
Exchange may list additional strike prices for Quarterly Options 
Series. In Amendment No. 3, a partial amendment, the Exchange 
modified the proposed rule text to provide that the Exchange may 
list Quarterly Options Series with strike prices that are within 
$5.00 from the closing price of the underlying security on the 
preceding trading day. See discussion in Part II, infra.
---------------------------------------------------------------------------

II. Description of Proposed Rule

    ISE proposes to amend its rules to establish a pilot program to 
list and trade Quarterly Options Series, which would expire at the 
close of business on the last business day of a calendar quarter 
(``Pilot Program''). Under the proposal, the Exchange could select up 
to five approved options classes \6\ on which Quarterly Options Series 
could be opened. A series could be opened on any business day and would 
expire at the close of business on the last business day of a calendar 
quarter. The Exchange also could list and trade Quarterly Options 
Series on any options class that is selected by another exchange that 
employs a similar pilot program. For each class selected for the Pilot 
Program, the Exchange would list series that expire at the end of the 
next four consecutive calendar quarters, as well as the fourth quarter 
of the following calendar year.
---------------------------------------------------------------------------

    \6\ Quarterly Options Series may be opened on indexes or on 
Exchange Traded Funds that satisfy the applicable listing criteria 
under ISE rules.
---------------------------------------------------------------------------

    Quarterly Options Series listed on currently approved options 
classes would be P.M. settled and, in all other respects, would settle 
in the same manner as do the monthly expiration series in the same 
options class.
    The strike price for each series would be fixed at a price per 
share, with two strike prices above and two strike prices below the 
value of the underlying security at about the time that a Quarterly 
Options Series is opened for trading on the Exchange. The interval 
between strike prices on Quarterly Options Series would be the same as 
the interval between strike prices for series in the same options class 
that expire in accordance with the normal monthly expiration cycles. In 
Amendment No. 3,

[[Page 39695]]

the Exchange proposes rule text providing that the series listed by the 
Exchange under the Pilot Program would have strike prices that are 
within $5.00 from the closing price of the underlying security on the 
preceding trading day.
    The proposal would permit the Exchange to open for trading 
additional Quarterly Options Series of the same class when the Exchange 
deems it necessary to maintain an orderly market, to meet customer 
demand, or when the market price of the underlying security moves 
substantially from the initial exercise price or prices. In Amendment 
No. 2, the Exchange proposes rule text that provides that any 
additional series opened for trading by the Exchange would be priced 
within $5.00 of the closing price of the underlying security on the 
preceding trading day.
    ISE proposes that the Pilot Program extend one year from the date 
the Exchange first initiates trading in a Quarterly Options Series, 
which, as per the proposed rules, would be no later than July 24, 
2006.\7\
---------------------------------------------------------------------------

    \7\ See ISE Proposed Rules 504, Supplementary Material .03, and 
2009, Supplementary Material .02.
---------------------------------------------------------------------------

III. Discussion

    After careful review, the Commission finds that the proposal, as 
amended, is consistent with the requirements of the Act and the rules 
and regulations thereunder applicable to a national securities 
exchange.\8\ In particular, the Commission believes that the proposal 
is consistent with the requirements of Section 6(b)(5) of the Act,\9\ 
which requires, among other things, that the rules of a national 
securities exchange be designed to remove impediments to and perfect 
the mechanism of a free and open market and a national market system, 
to promote just and equitable principles of trade, and, in general, to 
protect investors and the public interest.
---------------------------------------------------------------------------

    \8\ 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).
    \9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission believes that allowing the Exchange to list and 
trade Quarterly Options Series, under the terms described in the 
Exchange's proposal, should provide investors with new means of 
managing their risk exposures and carrying out their investment 
objectives. The Commission notes that the Pilot Program limits the 
series that may be opened pursuant to the Pilot Program by requiring 
them to have strike prices within $5.00 of the closing price of the 
underlying security on the preceding trading day. The Commission 
believes this restriction should allow the exchange to offer a wider 
array of investment opportunities, while minimizing the impact on 
quotation message traffic. The Commission also notes that the proposal 
requires the Exchange to closely monitor the trading and quotation 
volume associated with the additional options series created under the 
Pilot Program and the effect of these additional series on the capacity 
of the Exchange's, OPRA's, and vendors' systems.\10\
---------------------------------------------------------------------------

    \10\ If the Exchange were to propose an extension, expansion, or 
permanent approval of the Pilot Program, the Exchange would be 
required to submit a report on the Pilot Program to the Commission 
at least 60 days prior to the Pilot Program expiration date. See 
Notice, supra note 4, at 31248.
---------------------------------------------------------------------------

    Pursuant to Section 19(b)(2) of the Act,\11\ the Commission finds 
good cause for approving the amended proposal prior to the thirtieth 
day after the publication of Amendments No. 2 and 3 in the Federal 
Register. Amendments No. 2 and 3 modify the proposed rule text by 
placing restrictions on the series the Exchange may open for trading in 
an approved class. Any series opened for trading pursuant to the Pilot 
Program would have strike prices within $5.00 of the closing price of 
the underlying security on the preceding trading day. This restriction 
is modeled after the identical provision previously approved as part of 
the Exchange's $1 Strike Pilot Program, and thus raises no new issues 
of regulatory concern.\12\ The Commission finds good cause to 
accelerate approval of the amended proposal because it believes this 
restriction should help to minimize the Pilot Program's impact on 
quotation message traffic.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(2).
    \12\ See ISE Rule 504(g).
---------------------------------------------------------------------------

IV. Solicitation of Comments Concerning Amendments No. 2 and 3

    Interested persons are invited to submit written data, views, and 
arguments concerning Amendments No. 2 and 3, including whether it 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-2006-24 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 20549-1090.

All submissions should refer to File Number SR-ISE-2006-24. 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 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-2006-24 and should be submitted on or before August 
3, 2006.

V. Conclusion

    For the foregoing reasons, the Commission finds that the proposed 
rule change, as amended, is consistent with the requirements of the Act 
and the rules and regulations thereunder.
    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\13\ that the proposed rule change (File No. SR-ISE-2006-24), as 
amended, is approved, and that Amendments No. 2 and 3 thereto are 
approved on an accelerated basis, as a pilot program for a one-year 
period commencing on the day the Exchange first initiates trading in a 
Quarterly Options Series, which, as per the proposed rules, would be no 
later than July 24, 2006.\14\
---------------------------------------------------------------------------

    \13\ Id.
    \14\ See ISE Proposed Rules 504, Supplementary Material .03, and 
2009, Supplementary Material .02.


[[Page 39696]]


---------------------------------------------------------------------------

    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. E6-11002 Filed 7-12-06; 8:45 am]
BILLING CODE 8010-01-P