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
<![CDATA[
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 https://
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 (https://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 (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–2007–116 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
https://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]
-----------------------------------------------------------------------
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 https://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 (https://
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 (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-2007-116 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\
---------------------------------------------------------------------------
\18\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-25356 Filed 12-28-07; 8:45 am]
BILLING CODE 8011-01-P
