Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Open the Exchange's Equity Trading Platform at 9 a.m., 74373-74375 [E7-25356]

Download as PDF sroberts on PROD1PC70 with NOTICES Federal Register / Vol. 72, No. 249 / Monday, December 31, 2007 / Notices another investment company if the sale will cause the acquiring company to own more than 3% of the acquired company’s voting stock, or cause more than 10% of the acquired company’s voting stock to be owned by investment companies. 1. Section 12(d)(1)(G) of the Act provides that section 12(d)(1) will not apply to securities of an acquired company purchased by an acquiring company if: (i) The acquiring company and acquired company are part of the same group of investment companies; (ii) the acquiring company holds only securities of acquired companies that are part of the same group of investment companies, government securities, and short-term paper; (iii) the aggregate sales loads and distribution-related fees of the acquiring company and the acquired company are not excessive under rules adopted pursuant to section 22(b) or section 22(c) of the Act by a securities association registered under section 15A of the Exchange Act or by the Commission; and (iv) the acquired company has a policy that prohibits it from acquiring securities of registered open-end management investment companies or registered unit investment trusts in reliance on section 12(d)(1)(F) or (G) of the Act. 2. Rule 12d1–2 under the Act permits a registered open-end investment company or a registered unit investment trust that relies on section 12(d)(1)(G) of the Act to acquire, in addition to securities issued by another registered investment company in the same group of investment companies, government securities, and short-term paper: (1) Securities issued by an investment company that is not in the same group of investment companies, when the acquisition is in reliance on section 12(d)(1)(A) or 12(d)(1)(F) of the Act; (2) securities (other than securities issued by an investment company); and (3) securities issued by a money market fund, when the investment is in reliance on rule 12d1–1 under the Act. For the purposes of rule 12d1–2, ‘‘securities’’ means any security as defined in section 2(a)(36) of the Act. 3. Section 6(c) of the Act provides that the Commission may exempt any person, security, or transaction from any provisions of the Act, or from any rule under the Act, if such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policies and provisions of the Act. 4. Applicants state that the proposed arrangement would comply with the provisions of rule 12d1–2 under the Act, but for the fact that the Funds may VerDate Aug<31>2005 20:08 Dec 28, 2007 Jkt 214001 invest a portion of their assets in Other Investments. Applicants request an order under section 6(c) of the Act for an exemption from rule 12d1–2(a) to allow the Funds to invest in Other Investments. Applicants assert that permitting the Funds to invest in Other Investments as described in the application would not raise any of the concerns that the requirements of section 12(d)(1) were designed to address. Applicants’ Conditions Applicants agree that the order granting the requested relief will be subject to the following conditions: 1. Prior to approving any investment advisory agreement under section 15 of the Act, the board of trustees of the appropriate Fund, including a majority of the trustees who are not ‘‘interested persons,’’ as defined in section 2(a)(19) of the Act, will find that the advisory fees, if any, charged under the agreement are based on services provided that are in addition to, rather than duplicative of, services provided pursuant to the advisory agreement of any Underlying Fund or any Non-Group Fund in which the Fund may invest. Such findings, and the basis upon which the findings are made, will be recorded fully in the minute books of the appropriate Fund. 2. Applicants will comply with all provisions of rule 12d1–2 under the Act, except for paragraph (a)(2), to the extent that it restricts any Fund from investing in Other Investments as described in the application. For the Commission, by the Division of Investment Management, under delegated authority. Florence E. Harmon, Deputy Secretary. [FR Doc. E7–25378 Filed 12–28–07; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–57021; File No. SR–ISE– 2007–116] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Open the Exchange’s Equity Trading Platform at 9 a.m. December 20 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 1 15 2 17 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00108 Fmt 4703 notice is hereby given that on December 14, 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, II, and III 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. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend its rules to allow the Exchange to open the ISE Stock Exchange at 9 a.m. without regard to whether the primary market in a particular security is open and to make other associated changes to its rules. The text of the proposed rule change is available at ISE’s principal office, the Commission’s Public Reference Room, and http:// www.ise.com. 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 proposes to establish a Pre-Market Session for the trading of equity securities. The proposed PreMarket Session will start at 9:00 a.m. and conclude when a security is opened for trading according to the existing procedures contained in ISE Rule 2106. Under Rule 2106, the Exchange currently opens securities for trading on the ISE Stock Exchange following the 3 15 4 17 Sfmt 4703 74373 E:\FR\FM\31DEN1.SGM U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). 31DEN1 74374 Federal Register / Vol. 72, No. 249 / Monday, December 31, 2007 / Notices sroberts on PROD1PC70 with NOTICES first trade on the primary market for New York Stock Exchange (‘‘NYSE’’) and American Stock Exchange (‘‘Amex’’) listed securities, and following the first reported national best bid and offer (‘‘NBBO’’) for Nasdaq and NYSE Arca listed securities. Generally, this means that the ISE Stock Exchange opens Nasdaq and NYSE Arca securities at 9:30 a.m. and opens NYSE and Amex securities after the first trade in a security, which occurs at or after 9:30 a.m. The proposed Pre-Market Session would not change the way in which the ISE Stock Exchange currently opens its regular trading session.5 The Exchange proposes to add a PreOpening Order to accommodate trading in the Pre-Market Session. A PreOpening Order is an order that is eligible for execution during Pre-Market Session trading. Unexecuted PreOpening Orders will become Day Orders upon commencement of the Regular Market Session. Equity EAMs that submit orders to the Pre-Market Session on behalf of non-members will be required to disclose the risks of participating in the Pre-Market Session to their customers, including the risk of: (1) lower liquidity; 6 (2) higher volatility; 7 (3) changing prices; 8 (4) unlinked markets; 9 (5) news 5 The Exchange will continue to accept orders for the regulatory trading session beginning at 7 a.m., and will continue to perform the current midpoint opening transaction for such orders received prior to the opening. When the primary market is either the NYSE or the Amex, the opening trade will continue to be executed at the midpoint of the first reported NBBO subsequent to a reported trade on the primary market after 9:30 a.m. When the primary market is Nasdaq or NYSE Arca, the opening trade will continue to be executed at the midpoint of the first reported NBBO after 9:30 a.m. 6 There may be lower liquidity in Pre-Market hours trading as compared to regular market hours. As a result, an order may only be partially executed, or not at all. 7 There may be greater volatility in Pre-Market hours trading than in regular market hours. As a result, an order may only be partially executed, or not at all, or the price received may be an inferior price in Pre-Market hours trading compared to what would have been received during regular markets hours. 8 The prices of securities traded during PreMarket hours may not reflect the prices either at the end of regular market hours, or upon the opening of the next morning. As a result, an order may receive an inferior price in Pre-Market hours trading compared to what would have been received during regular markets hours. 9 The prices displayed on a particular Pre-Market hours system may not reflect the prices in other concurrently operating Pre-Market hours trading systems dealing in the same securities. Accordingly, an order may receive an inferior price in one PreMarket hours trading system compared to the price the order would have received in another PreMarket hours trading system. VerDate Aug<31>2005 20:08 Dec 28, 2007 Jkt 214001 announcements; 10 (6) wider spreads,11 and (7) lack of calculation or dissemination of underlying index value or intra-day indicative value (‘‘IIV’’).12 Under the proposal, the Pre-Market Session would operate the same as in the regular trading session, except that there would be no intermarket price protection for executions in the PreMarket Session until 9:30 a.m. Because trading that occurs in the Pre-Market Session after 9:30 a.m. and until the security is opened in the regular market session will be subject to the requirements of Regulation NMS, starting at 9:30 a.m. the Pre-Market Session will protect incoming PreOpening Orders from trading through Protected Quotations 13 on other markets. Similarly, Regulation NMS will prohibit other markets from trading through ISE’s quotes starting at 9:30 a.m. To accommodate the needs of these other markets to comply with Regulation NMS, we will execute incoming orders marked as intermarket sweep orders and orders marked as immediate-or-cancel in the Pre-Market Session starting at 9:30 a.m. even though they may not be marked as PreOpening Orders. 2. Statutory Basis The Exchange believes that the basis under the Act for this proposed rule change is found in Section 6(b)(5),14 in that the proposed rule change is designed to promote just and equitable principles of trade, remove impediments to and perfect the mechanisms of a free and open market and a national market system, and, in general, to protect investors and the public interest. The Exchange believes that the proposal will provide an opportunity for investors to begin trading equity securities before the primary market opens with proper disclosure of the risks involved in doing so. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange believes that the proposed rule change does not impose 10 In Pre-Market hours trading, news announcements may occur during trading, and if combined with lower liquidity and higher volatility, may cause an exaggerated and unsustainable effect on the price of a security. 11 Lower liquidity and higher volatility in PreMarket hours trading may result in wider than normal spreads for a particular security. 12 Since the underlying index value and/or IIV of a derivative security may not be calculated or widely disseminated during the Pre-Market hours, an investor who is unable to calculate implied values for such products during Pre-Market hours may be at a disadvantage to market professionals. 13 See ISE Rule 2100(c)(16). 14 15 U.S.C. 78f(b)(5). PO 00000 Frm 00109 Fmt 4703 Sfmt 4703 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 filed the proposed rule change pursuant to Section 19(b)(3)(A) of the Act 15 and subparagraph (f)(6) of Rule 19b–4 thereunder.16 Because the foregoing proposed rule change: (i) Does not significantly affect the protection of investors or the public interest; (ii) does not impose any significant burden on competition; and (iii) does not become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b–4(f)(6)(iii) thereunder.17 At any time within 60 days of the filing of the 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: Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or 15 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 17 Rule 19b–4(f)(6) also requires the Exchange to give the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied the five-day pre-filing requirement. 16 17 E:\FR\FM\31DEN1.SGM 31DEN1 Federal Register / Vol. 72, No. 249 / Monday, December 31, 2007 / Notices • Send an e-mail to rulecomments@sec.gov. Please include File No. SR–ISE–2007–116 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–2007–116. 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, 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–2007–116 and should be submitted on or before January 22, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–25356 Filed 12–28–07; 8:45 am] sroberts on PROD1PC70 with NOTICES BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–57022; File No. SR–Amex– 2007–138] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing of Proposed Rule Change To Establish a New Class of Off Floor Market Makers in ETFs Called Designated Amex Remote Traders December 20, 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 December 19, 2007, the American Stock Exchange LLC (‘‘Amex’’ 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 substantially prepared by the Amex. 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 Amex proposes to adopt changes to its rules to create a new class of offfloor market makers in all ETF securities that trade on the Exchange, including the implementation of related changes to the Exchange’s AEMI trading platform. These market makers, to be called ‘‘Designated Amex Remote Traders’’ or ‘‘DARTs,’’ will electronically enter competitive quotations on a regular basis sufficient to satisfy market maker regulatory requirements. Business requirements will include minimum performance standards with respect to each assigned security that a DART trades. The purpose of the new program is to (1) encourage competitive quoting within the Amex and between the Amex and other market centers, (2) retain and increase order flow by attracting new market makers to the Exchange, and (3) encourage greater depth at or around the national best bid or offer (‘‘NBBO’’). The text of the proposed rule change is available on the Amex’s Web site at http://www.amex.com, at the Amex’s Principal Office, and at the Commission’s Public Reference Room. 1 15 18 17 CFR 200.30–3(a)(12). VerDate Aug<31>2005 20:08 Dec 28, 2007 2 17 Jkt 214001 PO 00000 U.S.C. 78s(b )(1). CFR 240.19b–4. Frm 00110 Fmt 4703 Sfmt 4703 74375 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 Amex 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 Amex 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 the Statutory Basis for, the Proposed Rule Change 1. Purpose In order to (1) encourage competitive quoting within the Amex and between the Amex and other market centers, (2) retain and increase ETF order flow in AEMI by attracting new market makers to the Exchange, and (3) encourage greater depth at or around the NBBO, the Exchange proposes to adopt changes to its rules to create a new class of offfloor market makers in all ETF securities that trade on the Exchange, including the implementation of related changes to the Exchange’s AEMI trading platform. These market makers, to be called ‘‘Designated Amex Remote Traders’’ or ‘‘DARTs,’’ will electronically enter competitive quotations on a regular basis sufficient to satisfy market maker regulatory requirements. DARTs will also have to meet certain business requirements, which will include minimum performance standards as discussed below. The Exchange anticipates that the implementation of the DARTs program should increase the liquidity available in those ETF securities to which DARTs are assigned and reduce the likelihood of tolerance breaches in AEMI due to the resultant additional depth at or around the NBBO. This proposed rule change replaces a similar proposed rule change for a DARTs program at the Exchange that was recently approved by the Commission. 3 The earlier approved rule change was deleted in a subsequent rule filing by the Exchange 4 in order to allow consideration of certain Amex equity Specialists’ comments on the DARTs program that were received but 3 See Securities Exchange Act Release No. 56446 (Sept. 17, 2007), 72 FR 54303 (Sept. 24, 2007) (approving File No. SR–Amex–2007–85). 4 See Securities Exchange Act Release No. 56764 (Nov. 7, 2007), 72 FR 64095 (Nov. 14, 2007) (File No. SR–Amex–2007–113). E:\FR\FM\31DEN1.SGM 31DEN1

Agencies

[Federal Register Volume 72, Number 249 (Monday, December 31, 2007)]
[Notices]
[Pages 74373-74375]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-25356]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57021; File No. SR-ISE-2007-116]


Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change To Open the Exchange's Equity Trading Platform at 9 a.m.

December 20 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 December 14, 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, II, and III 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 proposes to amend its rules to allow the Exchange to 
open the ISE Stock Exchange at 9 a.m. without regard to whether the 
primary market in a particular security is open and to make other 
associated changes to its rules. The text of the proposed rule change 
is available at ISE's principal office, the Commission's Public 
Reference Room, and http://www.ise.com.

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 proposes to establish a Pre-Market Session for the 
trading of equity securities. The proposed Pre-Market Session will 
start at 9:00 a.m. and conclude when a security is opened for trading 
according to the existing procedures contained in ISE Rule 2106. Under 
Rule 2106, the Exchange currently opens securities for trading on the 
ISE Stock Exchange following the

[[Page 74374]]

first trade on the primary market for New York Stock Exchange 
(``NYSE'') and American Stock Exchange (``Amex'') listed securities, 
and following the first reported national best bid and offer (``NBBO'') 
for Nasdaq and NYSE Arca listed securities. Generally, this means that 
the ISE Stock Exchange opens Nasdaq and NYSE Arca securities at 9:30 
a.m. and opens NYSE and Amex securities after the first trade in a 
security, which occurs at or after 9:30 a.m. The proposed Pre-Market 
Session would not change the way in which the ISE Stock Exchange 
currently opens its regular trading session.\5\
---------------------------------------------------------------------------

    \5\ The Exchange will continue to accept orders for the 
regulatory trading session beginning at 7 a.m., and will continue to 
perform the current midpoint opening transaction for such orders 
received prior to the opening. When the primary market is either the 
NYSE or the Amex, the opening trade will continue to be executed at 
the midpoint of the first reported NBBO subsequent to a reported 
trade on the primary market after 9:30 a.m. When the primary market 
is Nasdaq or NYSE Arca, the opening trade will continue to be 
executed at the midpoint of the first reported NBBO after 9:30 a.m.
---------------------------------------------------------------------------

    The Exchange proposes to add a Pre-Opening Order to accommodate 
trading in the Pre-Market Session. A Pre-Opening Order is an order that 
is eligible for execution during Pre-Market Session trading. Unexecuted 
Pre-Opening Orders will become Day Orders upon commencement of the 
Regular Market Session. Equity EAMs that submit orders to the Pre-
Market Session on behalf of non-members will be required to disclose 
the risks of participating in the Pre-Market Session to their 
customers, including the risk of: (1) lower liquidity; \6\ (2) higher 
volatility; \7\ (3) changing prices; \8\ (4) unlinked markets; \9\ (5) 
news announcements; \10\ (6) wider spreads,\11\ and (7) lack of 
calculation or dissemination of underlying index value or intra-day 
indicative value (``IIV'').\12\
---------------------------------------------------------------------------

    \6\ There may be lower liquidity in Pre-Market hours trading as 
compared to regular market hours. As a result, an order may only be 
partially executed, or not at all.
    \7\ There may be greater volatility in Pre-Market hours trading 
than in regular market hours. As a result, an order may only be 
partially executed, or not at all, or the price received may be an 
inferior price in Pre-Market hours trading compared to what would 
have been received during regular markets hours.
    \8\ The prices of securities traded during Pre-Market hours may 
not reflect the prices either at the end of regular market hours, or 
upon the opening of the next morning. As a result, an order may 
receive an inferior price in Pre-Market hours trading compared to 
what would have been received during regular markets hours.
    \9\ The prices displayed on a particular Pre-Market hours system 
may not reflect the prices in other concurrently operating Pre-
Market hours trading systems dealing in the same securities. 
Accordingly, an order may receive an inferior price in one Pre-
Market hours trading system compared to the price the order would 
have received in another Pre-Market hours trading system.
    \10\ In Pre-Market hours trading, news announcements may occur 
during trading, and if combined with lower liquidity and higher 
volatility, may cause an exaggerated and unsustainable effect on the 
price of a security.
    \11\ Lower liquidity and higher volatility in Pre-Market hours 
trading may result in wider than normal spreads for a particular 
security.
    \12\ Since the underlying index value and/or IIV of a derivative 
security may not be calculated or widely disseminated during the 
Pre-Market hours, an investor who is unable to calculate implied 
values for such products during Pre-Market hours may be at a 
disadvantage to market professionals.
---------------------------------------------------------------------------

    Under the proposal, the Pre-Market Session would operate the same 
as in the regular trading session, except that there would be no 
intermarket price protection for executions in the Pre-Market Session 
until 9:30 a.m. Because trading that occurs in the Pre-Market Session 
after 9:30 a.m. and until the security is opened in the regular market 
session will be subject to the requirements of Regulation NMS, starting 
at 9:30 a.m. the Pre-Market Session will protect incoming Pre-Opening 
Orders from trading through Protected Quotations \13\ on other markets. 
Similarly, Regulation NMS will prohibit other markets from trading 
through ISE's quotes starting at 9:30 a.m. To accommodate the needs of 
these other markets to comply with Regulation NMS, we will execute 
incoming orders marked as intermarket sweep orders and orders marked as 
immediate-or-cancel in the Pre-Market Session starting at 9:30 a.m. 
even though they may not be marked as Pre-Opening Orders.
---------------------------------------------------------------------------

    \13\ See ISE Rule 2100(c)(16).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the basis under the Act for this 
proposed rule change is found in Section 6(b)(5),\14\ in that the 
proposed rule change is designed to promote just and equitable 
principles of trade, remove impediments to and perfect the mechanisms 
of a free and open market and a national market system, and, in 
general, to protect investors and the public interest. The Exchange 
believes that the proposal will provide an opportunity for investors to 
begin trading equity securities before the primary market opens with 
proper disclosure of the risks involved in doing so.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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 filed the proposed rule change pursuant to Section 
19(b)(3)(A) of the Act \15\ and subparagraph (f)(6) of Rule 19b-4 
thereunder.\16\ Because the foregoing proposed rule change: (i) Does 
not significantly affect the protection of investors or the public 
interest; (ii) does not impose any significant burden on competition; 
and (iii) does not become operative for 30 days from the date on which 
it was filed, or such shorter time as the Commission may designate, if 
consistent with the protection of investors and the public interest, 
the proposed rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act and Rule 19b-4(f)(6)(iii) thereunder.\17\
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 17 CFR 240.19b-4(f)(6).
    \17\ Rule 19b-4(f)(6) also requires the Exchange to give the 
Commission written notice of its intent to file the proposed rule 
change, along with a brief description and text of the proposed rule 
change, at least five business days prior to the date of filing of 
the proposed rule change, or such shorter time as designated by the 
Commission. The Exchange has satisfied the five-day pre-filing 
requirement.
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the 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:

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or

[[Page 74375]]

     Send an e-mail to rule-comments@sec.gov. Please include 
File No. SR-ISE-2007-116 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-2007-116. 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, 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-2007-116 and should be 
submitted on or before January 22, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-25356 Filed 12-28-07; 8:45 am]
BILLING CODE 8011-01-P