Self-Regulatory Organizations; International Securities Exchange, Inc.; Order Granting Approval of Proposed Rule Change Relating to Automatic Execution of Non-Customer Orders, 41490 [E6-11571]
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Federal Register / Vol. 71, No. 140 / Friday, July 21, 2006 / Notices
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–54151; File No. SR–ISE–
2006–27]
Self-Regulatory Organizations;
International Securities Exchange, Inc.;
Order Granting Approval of Proposed
Rule Change Relating to Automatic
Execution of Non-Customer Orders
July 14, 2006.
On May 15, 2006, the International
Securities Exchange, Inc. (‘‘ISE’’ or
‘‘Exchange’’), filed with the Securities
and Exchange Commission
(‘‘Commission’’) a proposed rule change
pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 to
amend ISE Rule 714 to provide that
incoming Non-Customer Orders 3 would
not be automatically executed at prices
that are inferior to the best bid or offer
disseminated by another national
securities exchange (‘‘NBBO’’) and that
Non-Customer Orders that are not
automatically executed would be
rejected. The proposed rule change also
would clarify the handling of Public
Customer Orders 4 that are not
automatically executed and update the
rule text to conform with the Exchange’s
current handling of ‘‘fill-or-kill’’ orders.
The proposed rule change was
published for comment in the Federal
Register on June 14, 2006.5 The
Commission received no comments on
the proposal. This order approves the
proposed rule change.
The Commission has reviewed
carefully the proposed rule change and
finds that it is consistent with the
requirements of section 6 of the Act 6
and the rules and regulations
thereunder applicable to a national
securities exchange.7 In particular, the
Commission finds that the proposed
rule change is consistent with section
6(b)(5) of the Act,8 which requires,
among other things, that the rules of 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 market system, and, in
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See ISE Rule 100(a)(23).
4 See ISE Rule 100(a)(33).
5 See Securities Exchange Act Release No. 53946
(June 6, 2006), 71 FR 34406 (‘‘Notice’’).
6 15 U.S.C. 78f.
7 In approving this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
8 15 U.S.C. 78f(b)(5).
rwilkins on PROD1PC63 with NOTICES_1
2 17
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17:59 Jul 20, 2006
Jkt 208001
general, to protect investors and the
public interest.
In particular, the Commission
believes that the proposed change
should help to prevent Non-Customer
Orders from automatically trading at
prices that are inferior to the NBBO. The
Commission also believes that the
proposed rule change provides clarity
with respect to the handling of Public
Customer Orders and Non-Customer
Orders when such orders are not
automatically executed—Public
Customer Orders would be handled by
the Primary Market Maker pursuant to
ISE Rule 803(c) and Non-Customer
Orders would be automatically rejected.
The Commission further believes that
the proposed change relating to ‘‘fill-orkill’’ orders clarifies for investors and
market participants how such orders
will be handled by the Exchange.
The Commission notes that the
Exchange represents that the proposed
rule change with respect to the handling
of Non-Customer Orders requires the
Exchange to implement a systems
change that will be implemented by
early September 2006. Therefore, this
part of the proposed rule change will
not be operative until such systems
change is implemented.9
It is therefore ordered, pursuant to
section 19(b)(2) of the Act,10 that the
proposed rule change (SR–ISE–2006–27)
is approved.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.11
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E6–11571 Filed 7–20–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–54146; File No. SR–ISE–
2006–39]
Self-Regulatory Organizations;
International Securities Exchange, Inc.;
Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change Relating to a One-Year Pilot
Extension Until July 18, 2007 for the
Price Improvement Mechanism
July 14, 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 July 12,
2006, the International Securities
Exchange, Inc. (‘‘Exchange’’ or ‘‘ISE’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which items have
been prepared by the Exchange. The
Exchange 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 proposed rule change
effective upon filing with the
Commission. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to extend the
Pilot Periods contained in paragraphs
.03 and .05 of the Supplemental
Material to Exchange Rule 723. The text
of the proposed rule change is available
on the Exchange’s Web site (https://
www.iseoptions.com), at the Exchange’s
Office of the Secretary, and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in Sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The pilot periods provided in
paragraphs .03 and .05 of the
Supplementary Material to ISE Rule 723
expire on July 18, 2006.5 Paragraph .03
provides that there is no minimum size
requirement for orders to be eligible for
the Price Improvement Mechanism.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
5 See Securities Exchange Act Release Nos. 50819
(December 8, 2004), 69 FR 75093 (December 15,
2004); and 52027 (July 13, 2005), 70 FR 41804 (July
20, 2005).
2 17
Exchange represents in the Notice that it
would issue a Regulatory Information Circular
notifying members at least five days prior to the
operative date of the rule change.
10 15 U.S.C. 78s(b)(2).
11 17 CFR 200.30–3(a)(12).
PO 00000
9 The
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]]>Agencies
[Federal Register Volume 71, Number 140 (Friday, July 21, 2006)]
[Notices]
[Page 41490]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-11571]
[[Page 41490]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-54151; File No. SR-ISE-2006-27]
Self-Regulatory Organizations; International Securities Exchange,
Inc.; Order Granting Approval of Proposed Rule Change Relating to
Automatic Execution of Non-Customer Orders
July 14, 2006.
On May 15, 2006, the International Securities Exchange, Inc.
(``ISE'' or ``Exchange''), filed with the Securities and Exchange
Commission (``Commission'') a proposed rule change pursuant to section
19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule
19b-4 thereunder,\2\ to amend ISE Rule 714 to provide that incoming
Non-Customer Orders \3\ would not be automatically executed at prices
that are inferior to the best bid or offer disseminated by another
national securities exchange (``NBBO'') and that Non-Customer Orders
that are not automatically executed would be rejected. The proposed
rule change also would clarify the handling of Public Customer Orders
\4\ that are not automatically executed and update the rule text to
conform with the Exchange's current handling of ``fill-or-kill''
orders. The proposed rule change was published for comment in the
Federal Register on June 14, 2006.\5\ The Commission received no
comments on the proposal. This order approves the proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See ISE Rule 100(a)(23).
\4\ See ISE Rule 100(a)(33).
\5\ See Securities Exchange Act Release No. 53946 (June 6,
2006), 71 FR 34406 (``Notice'').
---------------------------------------------------------------------------
The Commission has reviewed carefully the proposed rule change and
finds that it is consistent with the requirements of section 6 of the
Act \6\ and the rules and regulations thereunder applicable to a
national securities exchange.\7\ In particular, the Commission finds
that the proposed rule change is consistent with section 6(b)(5) of the
Act,\8\ which requires, among other things, that the rules of 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 market system, and, in general, to protect
investors and the public interest.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f.
\7\ In approving this proposal, the Commission has considered
the proposed rule's impact on efficiency, competition, and capital
formation. 15 U.S.C. 78c(f).
\8\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
In particular, the Commission believes that the proposed change
should help to prevent Non-Customer Orders from automatically trading
at prices that are inferior to the NBBO. The Commission also believes
that the proposed rule change provides clarity with respect to the
handling of Public Customer Orders and Non-Customer Orders when such
orders are not automatically executed--Public Customer Orders would be
handled by the Primary Market Maker pursuant to ISE Rule 803(c) and
Non-Customer Orders would be automatically rejected. The Commission
further believes that the proposed change relating to ``fill-or-kill''
orders clarifies for investors and market participants how such orders
will be handled by the Exchange.
The Commission notes that the Exchange represents that the proposed
rule change with respect to the handling of Non-Customer Orders
requires the Exchange to implement a systems change that will be
implemented by early September 2006. Therefore, this part of the
proposed rule change will not be operative until such systems change is
implemented.\9\
---------------------------------------------------------------------------
\9\ The Exchange represents in the Notice that it would issue a
Regulatory Information Circular notifying members at least five days
prior to the operative date of the rule change.
---------------------------------------------------------------------------
It is therefore ordered, pursuant to section 19(b)(2) of the
Act,\10\ that the proposed rule change (SR-ISE-2006-27) is approved.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\11\
---------------------------------------------------------------------------
\11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E6-11571 Filed 7-20-06; 8:45 am]
BILLING CODE 8010-01-P
