Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing of a Proposed Rule Change Relating to the Definition of Complex Trade as Applied to Trades Through the Intermarket Linkage, 76399-76400 [E6-21653]

Download as PDF Federal Register / Vol. 71, No. 244 / Wednesday, December 20, 2006 / Notices C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments relating to the proposed rule change have not yet been solicited or received. FICC will notify the Commission of any written comments received by FICC. 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 the 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: 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, 100 F Street, NE., Washington, DC 20549. Copies of such filing also will be available for inspection and copying at the principal office of FICC and on FICC’s Web site at https://www.ficc.com. 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–FICC–2006–05 and should be submitted on or before January 10, 2007. For the Commission by the Division of Market Regulation, pursuant to delegated authority.5 Florence E. Harmon, Deputy Secretary. [FR Doc. E6–21707 Filed 12–19–06; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54923; File No. SR–ISE– 2006–73] • 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–FICC–2006–05 on the subject line. Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing of a Proposed Rule Change Relating to the Definition of Complex Trade as Applied to Trades Through the Intermarket Linkage Paper Comments sroberts on PROD1PC70 with NOTICES Electronic Comments December 12, 2006. • 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–FICC–2006–05. 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 Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on December 4, 2006, the International Securities Exchange, LLC (‘‘ISE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change, as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. VerDate Aug<31>2005 20:03 Dec 19, 2006 Jkt 211001 5 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00129 Fmt 4703 Sfmt 4703 76399 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The ISE proposes to amend ISE Rule 1900 to revise the definition of ‘‘Complex Trade’’ as such definition applies to trades through the Intermarket Linkage (‘‘Linkage’’). The text of the proposed rule change appears below, with additions italicized and deletions in [brackets]: Rule 1900. Definitions * * * * * (3) ‘‘Complex Trade’’ means the execution of an order in an option series in conjunction with the execution of one or more related order(s) in different options series in the same underlying security occurring at or near the same time for the purpose of executing a particular investment strategy and for an equivalent number of contracts, provided that the number of contracts of the legs of a spread, straddle, or combination order may differ by a permissible ratio [for the equivalent number of contracts and for the purpose of executing a particular investment strategy]. The permissible ratio for this purpose is any ratio that is equal to or greater than one-to-three (.333) and less than or equal to three-to-one (3.00). * * * * * 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 proposed rule change will amend the definition of ‘‘Complex Trade’’ in the ISE’s Linkage rules. For Linkage purposes, the ISE defines a ‘‘Complex Trade’’ as a trade reflecting the execution of an order in an options series in conjunction with one or more other orders in different series in the same underlying security ‘‘for the equivalent number of contracts.’’ A E:\FR\FM\20DEN1.SGM 20DEN1 76400 Federal Register / Vol. 71, No. 244 / Wednesday, December 20, 2006 / Notices Complex Trade is exempt from the trade-through rule.3 In contrast to the Linkage definition of ‘‘Complex Trade,’’ ISE Rule 722(a)(6) defines ‘‘complex orders’’ for other purposes on the ISE. This definition includes ‘‘ratio orders,’’ which do not require that there be an equivalent number of contracts in the orders. Specifically, ISE Rule 722(a)(6) permits ratios that are equal to or greater than one-to-three, and less than or equal to three-to-one. The ISE applies modified priority rules to complex orders. The proposal will conform the Linkage definition of Complex Trade to the ISE’s general definition of the concept. According to the ISE, the other five options exchanges are adopting a similar definition, which will result in uniform application of the term across all options exchanges. The ISE believes that such uniformity will facilitate the speedy execution of complex trades on all markets. 2. Statutory Basis According to the ISE, the basis under the Act for the proposed rule change is the requirement under Section 6(b)(5) of the Act 4 that the rules of a national securities exchange be designed to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transaction in securities, to remove impediments to and perfect the mechanism for a free and open market and a national market system, and, in general, to protect investors and the public interest. B. Self-Regulatory Organization’s Statement on Burden on Competition The ISE believes that 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 ISE has not solicited, and does not intend to solicit, comments on this proposed rule change. The ISE has not received any written comments from members or other interested parties. sroberts on PROD1PC70 with NOTICES 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) 3 See 4 15 ISE Rule 1902(b)(7). U.S.C. 78f(b)(5). VerDate Aug<31>2005 20:03 Dec 19, 2006 Jkt 211001 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. submissions should refer to File Number SR–ISE–2006–73 and should be submitted on or before January 10, 2007. 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: SECURITIES AND EXCHANGE COMMISSION Electronic Comments • Use the Commission’s Internet comment form https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File No. SR–ISE–2006–73 on the subject line. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.5 Florence E. Harmon, Deputy Secretary. [FR Doc. E6–21653 Filed 12–19–06; 8:45 am] BILLING CODE 8011–01–P [Release No. 34–54930; File No. SR–MSRB– 2006–10] Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Notice of Filing of Proposed Rule Change Relating to Amendments to Rule G–27, on Supervision, Rule G– 8, on Recordkeeping, and Rule G–9, on Record Retention December 13, 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 November Paper Comments 24, 2006, the Municipal Securities Rulemaking Board (‘‘MSRB’’ or • Send paper comments in triplicate ‘‘Board’’) filed with the Securities and to Nancy M. Morris, Secretary, Exchange Commission (‘‘SEC’’ or Securities and Exchange Commission, ‘‘Commission’’) the proposed rule 100 F Street, NE., Washington, DC change as described in Items I, II, and 20549–1090. III below, which Items have been All submissions should refer to File prepared by the MSRB. The Number SR–ISE–2006–73. This file Commission is publishing this notice to number should be included on the subject line if e-mail is used. To help the solicit comments on the proposed rule change from interested persons. Commission process and review your comments more efficiently, please use I. Self-Regulatory Organization’s only one method. The Commission will Statement of the Terms of Substance of post all comments on the Commissions the Proposed Rule Change Internet Web site (https://www.sec.gov/ The MSRB is filing with the rules/sro.shtml). Copies of the Commission a proposed rule change submission, all subsequent consisting of amendments to Rule G–27, amendments, all written statements on supervision, and the related with respect to the proposed rule recordkeeping and record retention change that are filed with the requirements of Rules G–8 and G–9. The Commission, and all written text of the proposed rule change is communications relating to the available on the MSRB’s Web site proposed rule change between the (https://www.msrb.org), at the MSRB’s Commission and any person, other than principal office, and at the those that may be withheld from the Commission’s Public Reference Room. public in accordance with the II. Self-Regulatory Organization’s provisions of 5 U.S.C. 552, will be Statement of the Purpose of, and available for inspection and copying in Statutory Basis for, the Proposed Rule the Commission’s Public Reference Room. Copies of such filing also will be Change available for inspection and copying at In its filing with the Commission, the the principal office of the ISE. All MSRB included statements concerning comments received will be posted the purpose of and basis for the without change; the Commission does proposed rule change and discussed any not edit personal identifying information from submissions. You 5 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). should submit only information that 2 17 CFR 240.19b-4. you wish to make available publicly. All PO 00000 Frm 00130 Fmt 4703 Sfmt 4703 E:\FR\FM\20DEN1.SGM 20DEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 71, Number 244 (Wednesday, December 20, 2006)]
[Notices]
[Pages 76399-76400]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-21653]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54923; File No. SR-ISE-2006-73]


Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing of a Proposed Rule Change Relating to the 
Definition of Complex Trade as Applied to Trades Through the 
Intermarket Linkage

 December 12, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on December 4, 2006, the International Securities Exchange, LLC 
(``ISE'' or ``Exchange'') filed with the Securities and Exchange 
Commission (``Commission'') the proposed rule change, as described in 
Items I, II, and III below, which Items have been prepared by the 
Exchange. The Commission is publishing this notice to solicit comments 
on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The ISE proposes to amend ISE Rule 1900 to revise the definition of 
``Complex Trade'' as such definition applies to trades through the 
Intermarket Linkage (``Linkage''). The text of the proposed rule change 
appears below, with additions italicized and deletions in [brackets]:

Rule 1900. Definitions

* * * * *
    (3) ``Complex Trade'' means the execution of an order in an option 
series in conjunction with the execution of one or more related 
order(s) in different options series in the same underlying security 
occurring at or near the same time for the purpose of executing a 
particular investment strategy and for an equivalent number of 
contracts, provided that the number of contracts of the legs of a 
spread, straddle, or combination order may differ by a permissible 
ratio [for the equivalent number of contracts and for the purpose of 
executing a particular investment strategy]. The permissible ratio for 
this purpose is any ratio that is equal to or greater than one-to-three 
(.333) and less than or equal to three-to-one (3.00).
* * * * *

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 proposed rule change will amend the definition of ``Complex 
Trade'' in the ISE's Linkage rules. For Linkage purposes, the ISE 
defines a ``Complex Trade'' as a trade reflecting the execution of an 
order in an options series in conjunction with one or more other orders 
in different series in the same underlying security ``for the 
equivalent number of contracts.'' A

[[Page 76400]]

Complex Trade is exempt from the trade-through rule.\3\
---------------------------------------------------------------------------

    \3\ See ISE Rule 1902(b)(7).
---------------------------------------------------------------------------

    In contrast to the Linkage definition of ``Complex Trade,'' ISE 
Rule 722(a)(6) defines ``complex orders'' for other purposes on the 
ISE. This definition includes ``ratio orders,'' which do not require 
that there be an equivalent number of contracts in the orders. 
Specifically, ISE Rule 722(a)(6) permits ratios that are equal to or 
greater than one-to-three, and less than or equal to three-to-one. The 
ISE applies modified priority rules to complex orders.
    The proposal will conform the Linkage definition of Complex Trade 
to the ISE's general definition of the concept. According to the ISE, 
the other five options exchanges are adopting a similar definition, 
which will result in uniform application of the term across all options 
exchanges. The ISE believes that such uniformity will facilitate the 
speedy execution of complex trades on all markets.
2. Statutory Basis
    According to the ISE, the basis under the Act for the proposed rule 
change is the requirement under Section 6(b)(5) of the Act \4\ that the 
rules of a national securities exchange be designed to foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transaction in securities, to remove impediments to and 
perfect the mechanism for a free and open market and a national market 
system, and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

 B. Self-Regulatory Organization's Statement on Burden on Competition

    The ISE believes that 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 ISE has not solicited, and does not intend to solicit, comments 
on this proposed rule change. The ISE 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

    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:

Electronic Comments

     Use the Commission's Internet comment form https://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File No. SR-ISE-2006-73 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-2006-73. 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 Commissions Internet Web site (https://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for inspection and copying in the 
Commission's Public Reference Room. Copies of such filing also will be 
available for inspection and copying at the principal office of the 
ISE. All comments received will be posted without change; the 
Commission does not edit personal identifying information from 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number SR-ISE-
2006-73 and should be submitted on or before January 10, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\5\
---------------------------------------------------------------------------

    \5\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E6-21653 Filed 12-19-06; 8:45 am]
BILLING CODE 8011-01-P

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