Self-Regulatory Organizations; International Securities Exchange, LLC; Order Granting Approval to Proposed Rule Change, as Modified by Amendment No. 1, Relating to Penny Increments for Block Mechanism Orders, 25823 [E7-8597]

Download as PDF Federal Register / Vol. 72, No. 87 / Monday, May 7, 2007 / Notices and executed in penny increments. Such orders would no longer be permitted to be executed at split prices. [FR Doc. 07–2194 Filed 5–4–07; 8:45 am] BILLING CODE 8010–01–C III. Discussion SECURITIES AND EXCHANGE COMMISSION [Release No. 34–55683; File No. SR–ISE– 2006–77] Self-Regulatory Organizations; International Securities Exchange, LLC; Order Granting Approval to Proposed Rule Change, as Modified by Amendment No. 1, Relating to Penny Increments for Block Mechanism Orders April 30, 2007. I. Introduction On December 13, 2006, the International Securities Exchange, LLC (‘‘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 allow orders to be entered into the Block Mechanism in penny increments and to receive executions in penny increments. On March 19, 2007, the Exchange filed Amendment No. 1 to the proposed rule change. The proposed rule change was published for comment in the Federal Register on March 27, 2007.3 The Commission received no comment letters on the proposal. This order approves the proposed rule change as modified by Amendment No. 1. II. Description of the Proposal The Exchange currently offers a Block Mechanism for the execution of singlesided, block-sized orders.4 The Block Mechanism exposes orders of at least 50 contracts to all ISE members for three seconds, giving members an opportunity to respond with contra-side trading interest for their own account or on behalf of their customers.5 Currently, orders may be entered and executed using the Block Mechanism at the standard 5 and 10 cent increments and at ‘‘split prices’’ (2.5 cents for options trading in 5 cent standard increments and 5 cents for options trading in 10 cent standard increments). The Exchange proposes to amend ISE Rule 716 to allow these orders to be entered 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 55493 (March 20, 2007), 72 FR 14315. 4 See ISE Rule 716(c). 5 Supplementary Material .03 to ISE Rule 716 prohibits members from entering Responses for the account of an options market maker from another options exchange. This is the only limitation regarding who may enter Responses. pwalker on PROD1PC71 with NOTICES 2 17 VerDate Aug<31>2005 18:36 May 04, 2007 Jkt 211001 After careful review of the proposal, the Commission finds that the proposed rule change, as modified by Amendment No. 1, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.6 In particular, the Commission finds that the proposal is consistent with Section 6(b)(5) of the Act,7 which requires, among other things, that the rules of an exchange be designed to prevent fraudulent and manipulative acts, 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. Specifically, the Commission believes that the proposed rule change is consistent with the Act because it will provide greater flexibility in the pricing of block-size orders and enhanced opportunities for block-size orders to receive price improvement. IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,8 that the proposed rule change (SR–ISE–2006– 77), as modified by Amendment No. 1, be, and hereby is, approved. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.9 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–8597 Filed 5–4–07; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–55678; File No. SR– NASDAQ–2007–044] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Increase the Nasdaq Trading Rights Fee April 27, 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 6 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). 7 15 U.S.C. 78f(b)(5). 8 15 U.S.C. 78s(b)(2). 9 17 CFR 200.30–3(a)(12). PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 25823 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on April 25, 2007, The NASDAQ Stock Market LLC (‘‘Nasdaq’’) 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 substantially by Nasdaq. Nasdaq filed the proposal pursuant to Section 19(b)(3)(A)(ii) of the Act 3 and Rule 19b–4(f)(2) 4 thereunder, as establishing or changing a member due, fee, or other charge, 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 Nasdaq proposes to increase the monthly trading rights fee paid by Nasdaq members. Nasdaq will implement this proposed rule change on May 1, 2007. The text of the proposed rule change is available at Nasdaq, http://www.nasdaq.com, and 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, Nasdaq 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. Nasdaq 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 Nasdaq is increasing its monthly trading rights fee, which is assessed on all Nasdaq members, from $200 to $500 per month. The fee had initially been set at a level to ease the transition of the Nasdaq Market Center’s status as a facility of the NASD to a facility of a new self-regulatory organization (‘‘SRO’’). Now that Nasdaq has an established membership base, Nasdaq believes that the fee increase is 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b–4(f)(2). 2 17 E:\FR\FM\07MYN1.SGM 07MYN1

Agencies

[Federal Register Volume 72, Number 87 (Monday, May 7, 2007)]
[Notices]
[Page 25823]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-8597]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55683; File No. SR-ISE-2006-77]


Self-Regulatory Organizations; International Securities Exchange, 
LLC; Order Granting Approval to Proposed Rule Change, as Modified by 
Amendment No. 1, Relating to Penny Increments for Block Mechanism 
Orders

April 30, 2007.

I. Introduction

    On December 13, 2006, the International Securities Exchange, LLC 
(``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 allow orders to be entered 
into the Block Mechanism in penny increments and to receive executions 
in penny increments. On March 19, 2007, the Exchange filed Amendment 
No. 1 to the proposed rule change. The proposed rule change was 
published for comment in the Federal Register on March 27, 2007.\3\ The 
Commission received no comment letters on the proposal. This order 
approves the proposed rule change as modified by Amendment No. 1.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 55493 (March 20, 
2007), 72 FR 14315.
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II. Description of the Proposal

    The Exchange currently offers a Block Mechanism for the execution 
of single-sided, block-sized orders.\4\ The Block Mechanism exposes 
orders of at least 50 contracts to all ISE members for three seconds, 
giving members an opportunity to respond with contra-side trading 
interest for their own account or on behalf of their customers.\5\ 
Currently, orders may be entered and executed using the Block Mechanism 
at the standard 5 and 10 cent increments and at ``split prices'' (2.5 
cents for options trading in 5 cent standard increments and 5 cents for 
options trading in 10 cent standard increments). The Exchange proposes 
to amend ISE Rule 716 to allow these orders to be entered and executed 
in penny increments. Such orders would no longer be permitted to be 
executed at split prices.
---------------------------------------------------------------------------

    \4\ See ISE Rule 716(c).
    \5\ Supplementary Material .03 to ISE Rule 716 prohibits members 
from entering Responses for the account of an options market maker 
from another options exchange. This is the only limitation regarding 
who may enter Responses.
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III. Discussion

    After careful review of the proposal, the Commission finds that the 
proposed rule change, as modified by Amendment No. 1, is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange.\6\ In 
particular, the Commission finds that the proposal is consistent with 
Section 6(b)(5) of the Act,\7\ which requires, among other things, that 
the rules of an exchange be designed to prevent fraudulent and 
manipulative acts, 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. Specifically, the Commission 
believes that the proposed rule change is consistent with the Act 
because it will provide greater flexibility in the pricing of block-
size orders and enhanced opportunities for block-size orders to receive 
price improvement.
---------------------------------------------------------------------------

    \6\ 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).
    \7\ 15 U.S.C. 78f(b)(5).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\8\ that the proposed rule change (SR-ISE-2006-77), as modified by 
Amendment No. 1, be, and hereby is, approved.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-8597 Filed 5-4-07; 8:45 am]
BILLING CODE 8010-01-P