Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Extend the Quarterly Options Series Pilot Program, 38637-38639 [E7-13601]
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Federal Register / Vol. 72, No. 134 / Friday, July 13, 2007 / Notices
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing proposed rule change
has become effective pursuant to section
19(b)(3)(A)(ii) of the Act 7 and Rule 19b–
4(f)(2) thereunder,8 because it
establishes or changes a due, fee, or
other charge imposed by the Exchange.
Accordingly, the proposal will take
effect upon filing with the Commission.
At any time within 60 days of the
filing of such 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.
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:
pwalker on PROD1PC71 with NOTICES
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
Number SR–CBOE–2007–72 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–CBOE–2007–72. 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
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, 100 F Street, NE., Washington,
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m.
Copies of such filing also will be
available for inspection and copying at
the principal office of CBOE. 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–CBOE–2007–72 and should
be submitted on or before August 3,
2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.9
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–13592 Filed 7–12–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56031; File No. SR–ISE–
2007–53]
Self-Regulatory Organizations;
International Securities Exchange,
LLC; Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change to Extend the Quarterly
Options Series Pilot Program
July 9, 2007.
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 June 27,
2007, the International Securities
Exchange, LLC (‘‘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 substantially prepared by the
Exchange. The Exchange has designated
this proposal as non-controversial under
Section 19(b)(3)(A)(iii) of the Act 3 and
Rule 19b–4(f)(6) thereunder,4 which
7 15
U.S.C. 78s(b)(3)(A)(ii).
8 17 CFR 240.19b–4(f)(2).
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9 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
38637
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 is proposing to extend,
until July 10, 2008, its quarterly options
pilot program (‘‘Pilot Program’’). The
text of the proposed rule change is
available on the Exchange’s Web site
(https://www.ise.com), at the Exchange’s
principal office, 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 Exchange is proposing to extend,
until July 10, 2008, an ISE pilot program
(‘‘Pilot Program’’) to list options series
that would expire at the close of
business on the last business day of a
calendar quarter (‘‘Quarterly Options
Series’’).5 The Pilot Program is currently
set to expire on July 10, 2007. Under the
Pilot Program, the Exchange is allowed
to open Quarterly Options Series on up
to five (5) currently listed options
classes that are either index options or
options on ETFs. The Exchange also is
allowed to list Quarterly Options Series
on any options class that is selected by
other securities exchanges that employ
a similar pilot program under their
respective rules. The Exchange has
selected the following five options
classes to participate in the Pilot
Program: the Standard & Poor’s
Depositary Receipts (SPY); Nasdaq100 Shares (QQQQ); Diamonds Trust
Series 1 (DIA); iShares Russell 2000
1 15
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Fmt 4703
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5 See Exchange Act Release No. 54113 (July 7,
2006), 71 FR 39694 (July 13, 2006) (File No. SR–
ISE–2006–24) (‘‘Approval Order’’).
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38638
Federal Register / Vol. 72, No. 134 / Friday, July 13, 2007 / Notices
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Index Fund (IWM); and Select Sector
SPDR—Energy (XLE). The ISE believes
the Pilot Program has been successful
and well received by its members and
the investing public. Thus, the ISE
proposes to extend the Pilot Program
until July 10, 2008.
In support of this proposed rule
change, and as required by the Approval
Order, the Exchange is submitting to the
Commission a report (‘‘Pilot Program
Report’’), attached as Exhibit 3 to the
Form 19b–4 filed with the Commission,
detailing the Exchange’s experience
with the Pilot Program. Specifically, the
Pilot Program Report contains data and
written analysis regarding the five
options classes included in the
Quarterly Options Pilot Program for the
period from July 10, 2006 through
December 29, 2006. The Exchange
believes there is sufficient investor
interest and demand to extend the Pilot
Program for another year. The Exchange
further believes that the Pilot Program
has provided investors with a flexible
and valuable tool to manage risk
exposure, minimize capital outlays, and
the ability to more closely tailor their
investment strategies and decisions to
the movement of the underlying
security. Finally, the Exchange has not
detected any material proliferation of
illiquid options series resulting from the
introduction of the Pilot Program.
Additionally, the Exchange proposes
to amend ISE Rule 2009, Supplementary
Material .02 to: (1) Limit the number of
strike prices that the Exchange may
initially open for Quarterly Options
Series to five strike prices above or
below the value of the underlying index;
(2) clarify that the Exchange may open
for trading additional Quarterly Options
Series of the same class when the
Exchange deems such action necessary
to maintain an orderly market or meet
customer demand, provided that the
additional series priced above (below)
the value of the underlying index do not
cause there to be more than five strike
prices above (below) the value of the
underlying index; and (3) clarify that
the opening of any new Quarterly
Options Series will not affect the
previously opened series of options of
the same class.6
Finally, the Exchange represents that
it has the necessary systems capacity to
support new options series that result
6 The Commission recently approved a similar
change to the rules of the Chicago Board Options
Exchange and the Philadelphia Stock Exchange. See
Securities Exchange Act Releases No. 54762
(November 16, 2006), 71 FR 67663 (November 22,
2006) (Notice of Filing and Order Granting
Accelerated Approval of File No. SR–CBOE–2006–
93) and 55301 (February 15, 2007), 72 FR 8238
(February 23, 2007) (Notice of Filing and Immediate
Effectiveness of File No. SR–Phlx–2007–08).
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Jkt 211001
from the continued listing and trading
of Quarterly Options Series.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act 7 in general, and
furthers the objectives of Section 6(b)(5)
of the Act 8 in particular, in that it is
designed to promote just and equitable
principles of trade, to prevent
fraudulent and manipulative acts, 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. The Exchange believes
that extension of the Pilot Program will
result in a continuing benefit to
investors, by allowing them to more
closely tailor their investment decisions,
and will allow the Exchange to further
study investor interest in quarterly
options.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange 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 Exchange has not solicited, and
does not intend to solicit, comments on
this proposed rule change. The
Exchange has not received any
unsolicited written comments from
members or other interested parties.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has designated the
proposed rule change as one that: (1)
Does not significantly affect the
protection of investors or the public
interest; (2) does not impose any
significant burden on competition; and
(3) does not become operative for 30
days from the date of filing, or such
shorter time as the Commission may
designate if consistent with the
protection of investors and the public
interest. Therefore, the foregoing rule
change has become effective pursuant to
Section 19(b)(3)(A) of the Act 9 and
subparagraph (f)(6) of Rule 19b–4
thereunder.10 The Exchange has asked
the Commission to waive the operative
PO 00000
7 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
9 15 U.S.C. 78s(b)(3)(A).
10 17 CFR 240.19b–4(f)(6).
8 15
Frm 00089
Fmt 4703
Sfmt 4703
delay to permit the Pilot Program
extension to become effective prior to
the 30th day after filing.11
The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest
because it will allow the benefits of the
Pilot Program to continue without
interruption.12 Therefore, the
Commission designates the proposal
operative upon filing.13
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily abrogate
the 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.
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 rulecomments@sec.gov. Please include File
No. SR–ISE–2007–53 on the subject
line.
11 As required under Rule 19b–4(f)(6)(iii), the
Exchange provided the Commission with written
notice of its intent to file the proposed rule change
at least five business days before doing so.
12 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).
13 As set forth in the Approval Order, if the
Exchange were to propose an extension, an
expansion, or permanent approval of the Pilot
Program, the Exchange would submit, along with
any filing proposing such amendments to the
program, a report that would provide an analysis of
the Pilot Program covering the entire period during
which the Pilot Program was in effect. The report
would include, at a minimum: (1) Data and written
analysis on the open interest and trading volume in
the classes for which Quarterly Option Series were
opened; (2) an assessment of the appropriateness of
the option classes selected for the Pilot Program; (3)
an assessment of the impact of the Pilot Program on
the capacity of the Exchange, OPRA, and market
data vendors (to the extent data from market data
vendors is available); (4) any capacity problems or
other problems that arose during the operation of
the Pilot Program and how the Exchange addressed
such problems; (5) any complaints that the
Exchange received during the operation of the Pilot
Program and how the Exchange addressed them;
and (6) any additional information that would assist
in assessing the operation of the Pilot Program. The
report must be submitted to the Commission at least
sixty (60) days prior to the expiration date of the
Pilot Program. See Approval Order, supra note 5.
E:\FR\FM\13JYN1.SGM
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Federal Register / Vol. 72, No. 134 / Friday, July 13, 2007 / Notices
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–2007–53. 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, 100 F Street, NE., Washington,
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m.
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–2007–53 and should be
submitted on or before August 3, 2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.14
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–13601 Filed 7–12–07; 8:45 am]
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BILLING CODE 8010–01–P
14 17
CFR 200.30–3(a)(12).
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Jkt 211001
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56028; File No. SR–
NASDAQ–2007–031]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Order
Granting Approval of a Proposed Rule
Change Relating to Three-Characters
Ticker Symbols
July 9, 2007.
I. Introduction
On March 29, 2007, The NASDAQ
Stock Market LLC (‘‘Nasdaq’’) 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 an issuer with a threecharacter ticker symbol that transfers its
listing to Nasdaq from another listing
market to continue using its threecharacter ticker symbol on Nasdaq. The
proposed rule change was published for
comment in the Federal Register on
April 4, 2007.3
The Commission received 24
comment letters on the proposal.4 On
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 55563
(March 30, 2007), 72 FR 16391.
4 See letters from Edward J. Resch, Executive Vice
President, Chief Financial Officer and Treasurer,
State Street Corporation, dated May 21, 2007 (‘‘State
Street Letter’’); Larry A. Mizel, Chairman and Chief
Executive Officer, M.D.C. Holdings, Inc. (‘‘MDC
Letter’’), dated May 17, 2007; Jack R. Hartung, Chief
Finance and Development Officer, Chipotle
Mexican Grill, dated May 15, 2007 (‘‘Chipotle
Letter’’); Carol R. Kaufman, Sr. Vice President Legal
Affairs, The Cooper Companies, Inc., dated May 14,
2007 (‘‘Cooper Companies Letter’’); Farooq
Kathwari, Chairman, President and CEO, Ethan
Allen Interiors, Inc., dated May 9, 2007 (‘‘Ethan
Allen Letter’’); James J. Angel, Associate Professor
of Finance, McDonough School of Business,
Georgetown University, dated May 9, 2007 (‘‘Angel
Letter’’); Jack Sennott, Senior Vice President and
Chief Financial Officer, Darwin Professional
Underwriters, Inc., dated May 8, 2007 (‘‘Darwin
Letter’’); Bart J. Ward, Chief Executive Officer, Ward
& Company, dated May 8, 2007 (‘‘Ward Letter’’);
Craig D. Mallick, Corporate Secretary, United States
Steel Corporation, dated May 4, 2007 (‘‘United
States Steel Letter’’); Michael Tenenbaum, Trustee,
Strategic Technologies Employees Pension Fund
Trust, dated May 2, 2007 (‘‘Strategic Technologies
Letter’’); Carrie E. Dwyer, General Counsel and
Executive Vice President Corporate Oversight, The
Charles Schwab Corporation (‘‘Schwab’’), dated
April 27, 2007 (‘‘Schwab Letter’’); Mary Yeager,
Assistant Secretary, New York Stock Exchange LLC
(‘‘NYSE’’), dated April 25, 2007 (‘‘NYSE Letter’’);
Patrick J. Healy, Issuer Advisory Group, dated April
24, 2007 (‘‘Issuer Advisory Group Letter’’); Neal L.
Wolkoff, Chairman and Chief Executive Officer,
American Stock Exchange LLC (‘‘Amex’’), dated
April 16, 2007 (‘‘Amex Letter’’); Eric W. Nodiff, Sr.
V.P. and General Counsel, Cantel Medical Corp.,
dated April 9, 2007 (‘‘Cantel Medical Letter’’); Dave
Patch, dated April 6, 2007 (‘‘Patch Letter’’); Steve
S. Fishman, Chairman and Chief Executive Officer,
PO 00000
1 15
2 17
Frm 00090
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38639
May 1, 2007, Nasdaq filed a response to
the comment letters.5 This order
approves the proposed rule change.
II. Description of the Proposal
Historically, it has been the practice
of NYSE, Amex, and the regional
exchanges to list securities using threecharacter ticker symbols, and of Nasdaq
to list securities using four- and fivecharacter symbols.6 Nasdaq recently
submitted a proposed rule change to
begin listing Delta Financial Corp., a
security that transferred its listing from
Amex, while retaining its threecharacter symbol (‘‘DFC’’).7
Nasdaq now proposes to allow any
issuer with a three-character ticker
symbol that transfers its listing to
Nasdaq from another domestic listing
market to continue using its threecharacter ticker symbol on Nasdaq.
III. Summary of Comments
Four commenters expressed support
for Nasdaq’s proposal; 8 the remaining
20 commenters, including 16 issuers
listed on NYSE, objected to Nasdaq
listing transferred securities with their
three-character ticker symbols.9
The commenters objecting to the
proposal generally argued that the
proposal would violate the longBig Lots, Inc., dated April 4, 2007 (‘‘Big Lots
Letter’’); David M. Brain, President and CEO,
Entertainment Properties Trust, dated April 3, 2007
(‘‘Entertainment Properties Trust Letter’’); Cathy
Burzik, President and Chief Executive Officer,
Kinetic Concepts, Inc., dated March 30, 2007
(‘‘Kinetic Concepts Letter’’); Edward W. Moore,
Vice President, General Counsel & Secretary, RPM
International Inc., dated March 29, 2007 (‘‘RPM
Letter’’); Leo Liebowitz, Chairman and Chief
Executive Officer, Getty Realty Corp., dated March
29, 2007 (‘‘Getty Realty Letter’’); Timothy J.
O’Donovan, Chairman of the Board and Chief
Executive Officer, Wolverine World Wide, Inc.,
dated March 28, 2007 (‘‘Wolverine World Wide
Letter’’); Jason Korstange, SVP, Director of
Corporate Communications, TCF Financial
Corporation, dated March 28, 2007 (‘‘TCF Financial
Letter’’); and Edward F. Tancer, Vice President &
General Counsel, FPL Group, Inc., dated March 28,
2007 (‘‘FPL Group Letter’’).
5 See letter from Joan C. Conley, Senior Vice
President and Corporate Secretary, Nasdaq, to
Nancy M. Morris, Secretary, Commission, dated
May 1, 2007 (‘‘Nasdaq Response Letter’’).
6 It has also been the practice of NYSE, Amex,
and the regional exchanges to list securities using
two-character ticker symbols. In addition, NYSE
lists securities with one-character ticker symbols.
7 See Securities Exchange Act Release No. 55519
(March 26, 2007), 72 FR 15737 (April 2, 2007) (SR–
NASDAQ–2007–025).
8 See Angel Letter, Schwab Letter, Issuer
Advisory Group Letter, and Patch Letter.
9 See State Street Letter, MDC Letter, Chipotle
Letter, Cooper Companies Letter, Ethan Allen
Letter, Darwin Letter, Ward Letter, United States
Steel Letter, Strategic Technologies Letter, NYSE
Letter, Amex Letter, Cantel Medical Letter, Big Lots
Letter, Entertainment Properties Trust Letter,
Kinetic Concepts Letter, RPM Letter, Getty Realty
Letter, Wolverine World Wide Letter, TCF Financial
Letter, and FPL Group Letter.
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]]>Agencies
[Federal Register Volume 72, Number 134 (Friday, July 13, 2007)]
[Notices]
[Pages 38637-38639]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-13601]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56031; File No. SR-ISE-2007-53]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change to Extend the Quarterly Options Series Pilot Program
July 9, 2007.
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 June 27, 2007, the International Securities Exchange, LLC
(``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 substantially prepared by
the Exchange. The Exchange has designated this proposal as non-
controversial under Section 19(b)(3)(A)(iii) 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\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 Exchange is proposing to extend, until July 10, 2008, its
quarterly options pilot program (``Pilot Program''). The text of the
proposed rule change is available on the Exchange's Web site (https://
www.ise.com), at the Exchange's principal office, 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 Exchange is proposing to extend, until July 10, 2008, an ISE
pilot program (``Pilot Program'') to list options series that would
expire at the close of business on the last business day of a calendar
quarter (``Quarterly Options Series'').\5\ The Pilot Program is
currently set to expire on July 10, 2007. Under the Pilot Program, the
Exchange is allowed to open Quarterly Options Series on up to five (5)
currently listed options classes that are either index options or
options on ETFs. The Exchange also is allowed to list Quarterly Options
Series on any options class that is selected by other securities
exchanges that employ a similar pilot program under their respective
rules. The Exchange has selected the following five options classes to
participate in the Pilot Program: the Standard & Poor's Depositary
Receipts[reg] (SPY); Nasdaq-100[reg] Shares (QQQQ); Diamonds[reg] Trust
Series 1 (DIA); iShares Russell 2000[reg]
[[Page 38638]]
Index Fund (IWM); and Select Sector SPDR[reg]--Energy (XLE). The ISE
believes the Pilot Program has been successful and well received by its
members and the investing public. Thus, the ISE proposes to extend the
Pilot Program until July 10, 2008.
---------------------------------------------------------------------------
\5\ See Exchange Act Release No. 54113 (July 7, 2006), 71 FR
39694 (July 13, 2006) (File No. SR-ISE-2006-24) (``Approval
Order'').
---------------------------------------------------------------------------
In support of this proposed rule change, and as required by the
Approval Order, the Exchange is submitting to the Commission a report
(``Pilot Program Report''), attached as Exhibit 3 to the Form 19b-4
filed with the Commission, detailing the Exchange's experience with the
Pilot Program. Specifically, the Pilot Program Report contains data and
written analysis regarding the five options classes included in the
Quarterly Options Pilot Program for the period from July 10, 2006
through December 29, 2006. The Exchange believes there is sufficient
investor interest and demand to extend the Pilot Program for another
year. The Exchange further believes that the Pilot Program has provided
investors with a flexible and valuable tool to manage risk exposure,
minimize capital outlays, and the ability to more closely tailor their
investment strategies and decisions to the movement of the underlying
security. Finally, the Exchange has not detected any material
proliferation of illiquid options series resulting from the
introduction of the Pilot Program.
Additionally, the Exchange proposes to amend ISE Rule 2009,
Supplementary Material .02 to: (1) Limit the number of strike prices
that the Exchange may initially open for Quarterly Options Series to
five strike prices above or below the value of the underlying index;
(2) clarify that the Exchange may open for trading additional Quarterly
Options Series of the same class when the Exchange deems such action
necessary to maintain an orderly market or meet customer demand,
provided that the additional series priced above (below) the value of
the underlying index do not cause there to be more than five strike
prices above (below) the value of the underlying index; and (3) clarify
that the opening of any new Quarterly Options Series will not affect
the previously opened series of options of the same class.\6\
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\6\ The Commission recently approved a similar change to the
rules of the Chicago Board Options Exchange and the Philadelphia
Stock Exchange. See Securities Exchange Act Releases No. 54762
(November 16, 2006), 71 FR 67663 (November 22, 2006) (Notice of
Filing and Order Granting Accelerated Approval of File No. SR-CBOE-
2006-93) and 55301 (February 15, 2007), 72 FR 8238 (February 23,
2007) (Notice of Filing and Immediate Effectiveness of File No. SR-
Phlx-2007-08).
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Finally, the Exchange represents that it has the necessary systems
capacity to support new options series that result from the continued
listing and trading of Quarterly Options Series.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act \7\ in general, and furthers the
objectives of Section 6(b)(5) of the Act \8\ in particular, in that it
is designed to promote just and equitable principles of trade, to
prevent fraudulent and manipulative acts, 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.
The Exchange believes that extension of the Pilot Program will result
in a continuing benefit to investors, by allowing them to more closely
tailor their investment decisions, and will allow the Exchange to
further study investor interest in quarterly options.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange 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 Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any unsolicited written comments from members or other interested
parties.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has designated the proposed rule change as one that:
(1) Does not significantly affect the protection of investors or the
public interest; (2) does not impose any significant burden on
competition; and (3) does not become operative for 30 days from the
date of filing, or such shorter time as the Commission may designate if
consistent with the protection of investors and the public interest.
Therefore, the foregoing rule change has become effective pursuant to
Section 19(b)(3)(A) of the Act \9\ and subparagraph (f)(6) of Rule 19b-
4 thereunder.\10\ The Exchange has asked the Commission to waive the
operative delay to permit the Pilot Program extension to become
effective prior to the 30th day after filing.\11\
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6).
\11\ As required under Rule 19b-4(f)(6)(iii), the Exchange
provided the Commission with written notice of its intent to file
the proposed rule change at least five business days before doing
so.
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The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
because it will allow the benefits of the Pilot Program to continue
without interruption.\12\ Therefore, the Commission designates the
proposal operative upon filing.\13\
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\12\ 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).
\13\ As set forth in the Approval Order, if the Exchange were to
propose an extension, an expansion, or permanent approval of the
Pilot Program, the Exchange would submit, along with any filing
proposing such amendments to the program, a report that would
provide an analysis of the Pilot Program covering the entire period
during which the Pilot Program was in effect. The report would
include, at a minimum: (1) Data and written analysis on the open
interest and trading volume in the classes for which Quarterly
Option Series were opened; (2) an assessment of the appropriateness
of the option classes selected for the Pilot Program; (3) an
assessment of the impact of the Pilot Program on the capacity of the
Exchange, OPRA, and market data vendors (to the extent data from
market data vendors is available); (4) any capacity problems or
other problems that arose during the operation of the Pilot Program
and how the Exchange addressed such problems; (5) any complaints
that the Exchange received during the operation of the Pilot Program
and how the Exchange addressed them; and (6) any additional
information that would assist in assessing the operation of the
Pilot Program. The report must be submitted to the Commission at
least sixty (60) days prior to the expiration date of the Pilot
Program. See Approval Order, supra note 5.
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate the 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.
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-2007-53 on the subject line.
[[Page 38639]]
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-2007-53. 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, 100 F Street, NE., Washington, DC
20549, on official business days between the hours of 10 a.m. and 3
p.m. 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-2007-53 and should be submitted on
or before August 3, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\14\
Florence E. Harmon,
Deputy Secretary.
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\14\ 17 CFR 200.30-3(a)(12).
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[FR Doc. E7-13601 Filed 7-12-07; 8:45 am]
BILLING CODE 8010-01-P
