Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto Relating to Voluntary Professionals, 7348-7349 [E8-2267]

Download as PDF 7348 Federal Register / Vol. 73, No. 26 / Thursday, February 7, 2008 / Notices Copies of the filing also will be available for inspection and copying at the principal office of the ISE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–ISE–2006–26 and should be submitted on or before February 28, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Florence E. Harmon, Deputy Secretary. [FR Doc. E8–2206 Filed 2–6–08; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–57255; File No. SR–ISE– 2007–76] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto Relating to Voluntary Professionals February 1, 2008. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 2 thereunder, notice is hereby given that on August 24, 2007, the International Securities Exchange, LLC (‘‘ISE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by the Exchange. On January 25, 2008, ISE filed Amendment No. 1 to the proposed rule change. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. jlentini on PROD1PC65 with NOTICES I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The ISE proposes to allow, on a purely voluntary basis, non-brokerdealer customers to designate their orders as ‘‘Voluntary Professional.’’ Voluntary Professional orders will be treated the same as non-customer orders for purposes of execution priority and the ISE schedule of fees. The text of the proposed rule change is available at ISE, the Commission’s Public Reference Room, and https://www.iseoptions.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 ISE 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 ISE 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 Under ISE rules, a ‘‘Public Customer’’ is any person or entity that is not a broker or dealer in securities and a ‘‘Public Customer Order’’ is an order for the account of a Public Customer.3 A ‘‘Non-Customer’’ is any person or entity that is a broker or dealer in securities and a ‘‘Non-Customer Order’’ is an order for the account of a broker or dealer.4 These terms are used in specific ISE rules that provide certain marketplace advantages to Public Customer Orders over Non-Customer Orders. In particular, under ISE rules Public Customer Orders are given priority over Non-Customer Orders and market maker quotes at the same price, and subject to certain exceptions, members are not charged a transaction fee for the execution of Public Customer Orders, but are subject to cancellation fees related to the execution of Public Customer Orders. Members have indicated that certain of their non-broker-dealer customers employing sophisticated trading strategies that involve cancelling a large percentage of their orders before the orders are executed would prefer to have their orders categorized as NonCustomer Orders, thereby gaining relief from the Exchange’s cancellation fee that member firms pass through to these customers. Accordingly, the Exchange proposes to allow, on a purely voluntary basis, non-broker-dealer customers to instruct member firms, in writing, to designate their orders as Voluntary Professional.5 Such orders would be 3 ISE Rule 100(a)(32) and (33). Rule 100(a)(22) and (23). 5 The Exchange is also proposing to make nonsubstantive changes to correct cross references in Rule 100(a) to the Constitution, and to clarify that 4 ISE 13 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Aug<31>2005 17:02 Feb 06, 2008 Jkt 214001 PO 00000 Frm 00106 Fmt 4703 Sfmt 4703 considered Non-Customer Orders for purposes of ISE Rules 713 (Priority of Quotes and Orders), 716 (Block Trades), 722 (Complex Orders), and 723 (Price Improvement Mechanism for Crossing Transactions). For orders designated as Voluntary Professional, ISE would charge members standard transaction fees currently applicable to brokerdealer orders, which means that the cancellation fee will not be applicable to such orders. Under the proposal, Voluntary Professionals would participate in ISE’s allocation process on equal terms with broker-dealer orders and market maker quotes. The proposal would also result in members paying the same transaction fees for the execution of Voluntary Professional orders as they do for broker-dealer orders. By definition, the Voluntary Professional designation would not otherwise affect these nonbroker-dealer individuals or entities under the ISE rules. The Exchange notes that Voluntary Professional orders would continue to be treated the same as Public Customer Orders for purposes of linkage-related rules. For example, the ISE would provide the same awaymarket protection for orders designated as Voluntary Professional as it does for orders designated as Public Customer Orders by preventing incoming marketable orders from automatically executing at prices inferior to the best bid or offer on another national securities exchange. As provided in ISE Rule 714, such Voluntary Professional orders would be handled by the Primary Market Maker who may, according to ISE Rule 1901(c), send a P/A order to another exchange to get a better price for the customer. 2. Statutory Basis The basis under the Act for this proposed rule change is the requirement under Section 6(b)(5) that an exchange have rules that are designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism for a free and open market and a national market system, and, in general, to protect investors and the public interest. B. Self-Regulatory Organization’s Statement on Burden on Competition The proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. the term Public Customer means a person ‘‘or entity’’ that is not a broker or dealer securities. E:\FR\FM\07FEN1.SGM 07FEN1 Federal Register / Vol. 73, No. 26 / Thursday, February 7, 2008 / Notices 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 Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve such proposed rule change, or (B) Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments 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 ISE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–ISE–2007–76 and should be submitted on or before February 28, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.6 Florence E. Harmon, Deputy Secretary. [FR Doc. E8–2267 Filed 2–6–08; 8:45 am] BILLING CODE 8011–01–P Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: SECURITIES AND EXCHANGE COMMISSION [Release No. 34—57251; File No. SR–NYSE– 2007–62] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of • Use the Commission’s Internet Proposed Rule Changes to NYSE comment form (https://www.sec.gov/ Rules 104 (Dealings by Specialists); rules/sro.shtml ) or send an e-mail to 111 (Reports of Executions); 123A rule-comments@sec.gov. Please include (Miscellaneous Reports); 123C (Market File Number SR–ISE–2007–76 on the on the Close Policy and Expiration subject line. Procedures); 421(Periodic Reports); Paper Comments 440B (Short Sales); 440C (Short Sale Borrowing and Delivery • Send paper comments in triplicate Requirements); 440F (Public Short to Nancy M. Morris, Secretary, Sale Transactions Effected on the Securities and Exchange Commission, Exchange); 440G (Transactions in 100 F Street, NE., Washington, DC Stocks and Warrants for the Accounts 20549–1090. of Members, Allied Members and All submissions should refer to File Member Organizations); 902 (Off-Hours Number SR–ISE–2007–76. This file Trading Orders); 1000 (Automatic number should be included on the subject line if e-mail is used. To help the Execution of Limit Orders Against Orders Reflected in NYSE Published Commission process and review your Quotation); and 1003 (Application of comments more efficiently, please use only one method. The Commission will Tick Tests) Relating to Recent post all comments on the Commission’s Amendments to Rule 10a–1 and Regulation SHO Internet Web site at (https:// jlentini on PROD1PC65 with NOTICES Electronic Comments 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 VerDate Aug<31>2005 17:02 Feb 06, 2008 Jkt 214001 February 1, 2008. Pursuant to section 19(b)(1)1 of the Securities Exchange Act of 1934 6 17 1 15 PO 00000 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). Frm 00107 Fmt 4703 Sfmt 4703 7349 (‘‘Act’’)2 and Rule 19b–43 thereunder, notice is hereby given that on July 6, 2007, the New York Stock Exchange LLC (‘‘NYSE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), and on December 5, 2007 amended, the proposed rule change as described in Items I and II below, which items have been substantially prepared by the Exchange. The Exchange filed the proposals as ‘‘non-controversial’’ rule changes under Rule 19b–4(f)(6)4 under the Act, which rendered the proposals effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule changes from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The NYSE proposes to make conforming amendments to certain of its rules in light of recent changes to short sale provisions in Rule 10a–15 of the Act and Regulation SHO.6 The rules the Exchange proposes to amend are the following: Rule 104 (Dealings by Specialists); Rule 111 (Reports of Executions); Rule 123A (Miscellaneous Reports); Rule 123C (Market on the Close Policy and Expiration Procedures); Rule 421(Periodic Reports); Rule 440B (Short Sales); Rule 440C (Short Sale Borrowing and Delivery Requirements); Rule 440F (Public Short Sale Transactions Effected on the Exchange); Rule 440G (Transactions in Stocks and Warrants for the Accounts of Members, Allied Members and Member Organizations); Rule 902 (Off-Hours Trading Orders); Rule 1000 (Automatic Execution of Limit Orders Against Orders Reflected in NYSE Published Quotation); and Rule 1003 (Application of Tick Tests). The text of the proposed rule change is available at the Exchange, on the Exchange’s Web site at https:// www.nyse.com, and in 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. The text of these statements may be examined at 2 15 U.S.C. 78a et seq. CFR 240.19b–4. 4 17 CFR 240.19b–4(f)(6). 5 17 CFR 240.10a–1. 6 17 CFR 242.200–203. 3 17 E:\FR\FM\07FEN1.SGM 07FEN1

Agencies

[Federal Register Volume 73, Number 26 (Thursday, February 7, 2008)]
[Notices]
[Pages 7348-7349]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-2267]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57255; File No. SR-ISE-2007-76]


Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing of Proposed Rule Change and Amendment No. 1 
Thereto Relating to Voluntary Professionals

February 1, 2008.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 \2\ thereunder, notice is hereby given 
that on August 24, 2007, the International Securities Exchange, LLC 
(``ISE'' or ``Exchange'') filed with the Securities and Exchange 
Commission (``Commission'') the proposed rule change as described in 
Items I, II, and III below, which Items have been substantially 
prepared by the Exchange. On January 25, 2008, ISE filed Amendment No. 
1 to the proposed rule change. The Commission is publishing this notice 
to solicit comments on the proposed rule change, as amended, from 
interested persons.
---------------------------------------------------------------------------

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

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

    The ISE proposes to allow, on a purely voluntary basis, non-broker-
dealer customers to designate their orders as ``Voluntary 
Professional.'' Voluntary Professional orders will be treated the same 
as non-customer orders for purposes of execution priority and the ISE 
schedule of fees. The text of the proposed rule change is available at 
ISE, the Commission's Public Reference Room, and https://
www.iseoptions.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 ISE 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 ISE 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
    Under ISE rules, a ``Public Customer'' is any person or entity that 
is not a broker or dealer in securities and a ``Public Customer Order'' 
is an order for the account of a Public Customer.\3\ A ``Non-Customer'' 
is any person or entity that is a broker or dealer in securities and a 
``Non-Customer Order'' is an order for the account of a broker or 
dealer.\4\ These terms are used in specific ISE rules that provide 
certain marketplace advantages to Public Customer Orders over Non-
Customer Orders. In particular, under ISE rules Public Customer Orders 
are given priority over Non-Customer Orders and market maker quotes at 
the same price, and subject to certain exceptions, members are not 
charged a transaction fee for the execution of Public Customer Orders, 
but are subject to cancellation fees related to the execution of Public 
Customer Orders.
---------------------------------------------------------------------------

    \3\ ISE Rule 100(a)(32) and (33).
    \4\ ISE Rule 100(a)(22) and (23).
---------------------------------------------------------------------------

    Members have indicated that certain of their non-broker-dealer 
customers employing sophisticated trading strategies that involve 
cancelling a large percentage of their orders before the orders are 
executed would prefer to have their orders categorized as Non-Customer 
Orders, thereby gaining relief from the Exchange's cancellation fee 
that member firms pass through to these customers. Accordingly, the 
Exchange proposes to allow, on a purely voluntary basis, non-broker-
dealer customers to instruct member firms, in writing, to designate 
their orders as Voluntary Professional.\5\ Such orders would be 
considered Non-Customer Orders for purposes of ISE Rules 713 (Priority 
of Quotes and Orders), 716 (Block Trades), 722 (Complex Orders), and 
723 (Price Improvement Mechanism for Crossing Transactions). For orders 
designated as Voluntary Professional, ISE would charge members standard 
transaction fees currently applicable to broker-dealer orders, which 
means that the cancellation fee will not be applicable to such orders.
---------------------------------------------------------------------------

    \5\ The Exchange is also proposing to make non-substantive 
changes to correct cross references in Rule 100(a) to the 
Constitution, and to clarify that the term Public Customer means a 
person ``or entity'' that is not a broker or dealer securities.
---------------------------------------------------------------------------

    Under the proposal, Voluntary Professionals would participate in 
ISE's allocation process on equal terms with broker-dealer orders and 
market maker quotes. The proposal would also result in members paying 
the same transaction fees for the execution of Voluntary Professional 
orders as they do for broker-dealer orders. By definition, the 
Voluntary Professional designation would not otherwise affect these 
non-broker-dealer individuals or entities under the ISE rules. The 
Exchange notes that Voluntary Professional orders would continue to be 
treated the same as Public Customer Orders for purposes of linkage-
related rules. For example, the ISE would provide the same away-market 
protection for orders designated as Voluntary Professional as it does 
for orders designated as Public Customer Orders by preventing incoming 
marketable orders from automatically executing at prices inferior to 
the best bid or offer on another national securities exchange. As 
provided in ISE Rule 714, such Voluntary Professional orders would be 
handled by the Primary Market Maker who may, according to ISE Rule 
1901(c), send a P/A order to another exchange to get a better price for 
the customer.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(5) that an exchange have rules that are 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, to remove impediments 
to and perfect the mechanism for a free and open market and a national 
market system, and, in general, to protect investors and the public 
interest.

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

    The proposed rule change does not impose any burden on competition 
that is not necessary or appropriate in furtherance of the purposes of 
the Act.

[[Page 7349]]

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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve such proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml ) or send an e-mail to rule-
comments@sec.gov. Please include File Number SR-ISE-2007-76 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-2007-76. 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 at (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 ISE. All comments 
received will be posted without change; the Commission does not edit 
personal identifying information from submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File Number SR-ISE-2007-76 and should be 
submitted on or before February 28, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\6\
---------------------------------------------------------------------------

    \6\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-2267 Filed 2-6-08; 8:45 am]
BILLING CODE 8011-01-P
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