Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing of Proposed Rule Change, as Modified by Amendment Nos. 1 and 2 Thereto, Relating to Complex Orders, 15241-15243 [E8-5695]
Download as PDF
<![CDATA[
Federal Register / Vol. 73, No. 56 / Friday, March 21, 2008 / Notices
ended before October 1, 2005 will not
count toward determining eligibility for
quotation on the OTCBB pursuant to
paragraph (e). Given that the text
relating to the October 1, 2005
timeframe is no longer necessary,
FINRA proposes to delete that text as
part of this proposed rule change.
FINRA will announce the effective
date of the proposed rule change in a
Regulatory Notice to be published no
later than 60 days following
Commission approval. The effective
date will be 30 days following
publication of the Regulatory Notice
announcing Commission approval.
2. Statutory Basis
FINRA believes that the proposed rule
change is consistent with the provisions
of Section 15A(b)(6) of the Act,16 which
requires, among other things, that
FINRA rules must be designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, and, in
general, to protect investors and the
public interest. FINRA believes that the
proposed rule change strikes an
appropriate balance between the need to
ensure fairness to aggrieved parties and
the need for expedited action in these
instances.
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.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
FINRA has not solicited, and does not
intend to solicit, comments on this
proposed rule change. FINRA has not
received any unsolicited written
comments from members or other
interested parties.
III. 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:
No. SR–NASD–2007–52 on the subject
line.
SECURITIES AND EXCHANGE
COMMISSION
Paper Comments
[Release No. 34–57507; File No. SR–ISE–
2007–77]
• 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–NASD–2007–52. 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 FINRA. 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–NASD–2007–52 and should
be submitted on or before April 11,
2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8–5709 Filed 3–20–08; 8:45 am]
BILLING CODE 8011–01–P
mstockstill on PROD1PC66 with NOTICES
Electronic Comments
U.S.C. 78o–3(b)(6).
VerDate Aug<31>2005
18:33 Mar 20, 2008
March 14, 2008.
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 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 prepared by the ISE. On
November 27, 2007, the Exchange filed
Amendment No. 1 to the proposed rule
change.3 The Exchange filed
Amendment No. 2 to the proposed rule
change on March 11, 2008.4 The
Commission is publishing this notice to
solicit comments on the proposed rule
change, as modified by Amendment
Nos. 1 and 2, from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The ISE proposes to amend ISE Rule
722 pertaining to Complex Orders to
provide an opportunity for marketable
complex orders to receive price
improvement and to provide more
specificity on the mechanics of how
complex orders are executed. 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 Exchange has
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 Amendment No. 1 expanded the discussion in
the purpose section of the original filing, but did
not change the text of the proposed rule change.
4 Amendment No. 2 modified the original filing
to make exposure of marketable complex orders
voluntary. Amendment No. 2 replaced the original
filing in its entirety.
2 17
17 CFR
Jkt 214001
Self-Regulatory Organizations;
International Securities Exchange,
LLC; Notice of Filing of Proposed Rule
Change, as Modified by Amendment
Nos. 1 and 2 Thereto, Relating to
Complex Orders
1 15
• Use the Commission’s Internet
comment form https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
16 15
15241
PO 00000
200.30–3(a)(12).
Frm 00122
Fmt 4703
Sfmt 4703
E:\FR\FM\21MRN1.SGM
21MRN1
15242
Federal Register / Vol. 73, No. 56 / Friday, March 21, 2008 / Notices
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
mstockstill on PROD1PC66 with NOTICES
1. Purpose
ISE Rule 722 describes execution
principles for complex orders, including
priority rules regarding the execution of
complex orders when there are Public
Customer orders resting on the
Exchange’s limit order book in the
options series that comprise the
individual leg(s) of a complex order.
The Exchange’s System automatically
executes complex orders in
conformance with the requirements of
ISE Rule 722, and the Exchange is not
proposing any changes to these
substantive requirements. Additionally,
other ISE rules, such as Rule 717(d) and
(e) that require members to expose
orders to the marketplace before
executing them against proprietary or
solicited orders, also apply to the
execution of complex orders. The
Exchange is not proposing any changes
to the application of these other
Exchange rules to the execution of
complex orders.
The purpose of the proposed rule
change is to amend ISE Rule 722 to
provide an opportunity for marketable
complex orders to receive price
improvement and to provide more
specificity in the Rule on the mechanics
of how complex orders are executed by
the System in conformance with the
existing requirements of Rule 722.5 In
particular, the Exchange proposes to
amend ISE Rule 722 to specify that
complex orders: (1) Are executed
against orders on the complex order
book in price priority and in time
priority at the same price; and (2) will
be executed against the bids and offers
for the individual legs in the Exchange’s
options market provided the complex
order can be executed in full or in a
permissible ratio by such bids and
offers. The System matches incoming
complex orders against contra-side
complex orders when possible, and then
executes the individual legs of a
complex order against the limit order
book when possible. In each of these
circumstances, the System assures that
5 The Exchange also proposes to delete an
outdated cross reference from ISE Rule 722.
Specifically, ISE Rule 722(b)(5) specifies that the
restrictions on order entry contained in two
paragraphs of ISE Rule 717 do not apply to
Complex Orders. The requirements contained in the
two paragraphs have been removed from ISE Rule
717, so the Exchange proposes to delete
subparagraph (5) from Rule 722(b).
VerDate Aug<31>2005
18:33 Mar 20, 2008
Jkt 214001
the requirements of ISE Rule 722 are
satisfied. For example, the System will
not execute two complex orders against
each other if the execution price of the
options leg(s) would be below the best
price available on the ISE for the
options series, nor will it execute two
complex orders at a price that matches
the best price available on the ISE when
there is a Public Customer order on the
book unless the specific requirements of
ISE Rule 722 are satisfied.
Under the proposal, the Exchange also
will allow members to choose to give
their marketable complex orders an
opportunity for price improvement by
introducing a delay of up to one second
before automatically executing
designated incoming complex orders.6
During this delay, the complex order
will be exposed on the complex order
book to give market participants an
opportunity to enter contra-side
complex orders.7 While the Exchange is
not proposing to conduct an actual
auction for an incoming marketable
complex order (i.e., there will be no
messages sent to members specifically
soliciting interest to trade with the
complex order), this short delay before
executing a marketable complex order
will provide an opportunity for the
order to receive price improvement. The
System will execute the incoming order
against interest on the complex order
book in price time priority following the
delay, so while it is possible that the
order will receive price improvement as
a result of contra-side orders being
entered during the delay, it is also
possible that orders will no longer be
executable at the end of the delay.
Members will be able to mark all
complex orders for price improvement,
including stock-option orders.8
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
section 6(b)(5) of the Act,9 in that it is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
6 The Exchange will determine the appropriate
length of the delay, not to exceed one second, from
time to time. The initial delay period and any
subsequent changes to the delay period will be
communicated to Members via an Exchange
circular.
7 The complex order book is available to all ISE
market participants. However, the application of
ISE Rules 717(d) and (e), which require a threesecond exposure period, will prohibit the member
that entered the complex order from entering
contra-side principal orders or orders solicited from
other broker-dealers during the proposed onesecond (or less) exposure period.
8 See Supplementary Material to ISE Rule 722
regarding execution of the stock legs of stock-option
orders.
9 15 U.S.C. 78f(b)(5).
PO 00000
Frm 00123
Fmt 4703
Sfmt 4703
trade, to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest. In
particular, the proposal will provide an
opportunity for marketable complex
orders to receive price improvement.
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.
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
the 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 Exchange 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 rulecomments@sec.gov. Please include File
No. SR–ISE–2007–77 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.
E:\FR\FM\21MRN1.SGM
21MRN1
Federal Register / Vol. 73, No. 56 / Friday, March 21, 2008 / Notices
All submissions should refer to File No.
SR–ISE–2007–77. 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 the 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 No.
SR–ISE–2007–77 and should be
submitted on or before April 11, 2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8–5695 Filed 3–20–08; 8:45 am]
BILLING CODE 8011–01–P
Self-Regulatory Organizations;
International Securities Exchange,
LLC; Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change Implementing Phase II of the
Penny Pilot Program Expansion
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 March 12,
2008, the International Securities
10 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
Jkt 214001
U.S.C. 78s(b)(3)(A)(i).
CFR 240.19b–4(f)(1).
5 Exhibit 5 to the filing contains a Regulatory
Information Circular that constitutes the text of the
proposed rule change.
6 See Securities Exchange Act Release No. 55161
(January 24, 2007), 72 FR 4754 (February 1, 2007)
(the ‘‘Initial Filing’’). The Penny Pilot Program was
subsequently extended for an additional two month
period, until September 27, 2007. See Securities
Exchange Act Release No. 56151 (July 26, 2007), 72
FR 42452 (August 2, 2007) (SR–ISE–2007–68).
Under the Penny Pilot Program, the
minimum price variation for all 13
option classes, except for the Nasdaq100 Index Tracking Stock (‘‘QQQQs’’), is
$0.01 for all quotations in option series
that are quoted at less than $3 per
contract and $0.05 for all quotations in
options series that are quoted at $3 per
contract or greater. The QQQQs are
quoted in $0.01 increments for all
options series.
A subsequent ISE rule filing, SR–ISE–
2007–74, initiated a two-phase
expansion of the Penny Pilot Program.
Phase I of the expansion, which
commenced on September 28, 2007,7
added 22 option classes that are among
the most actively traded, multiply-listed
option classes based on national average
daily volume, and together with the
original 13 option classes, represented
approximately 35% of the total industry
volume.
The Exchange now proposes to
implement Phase II of the expansion,
which will begin on March 28, 2008 and
continue for one year until March 27,
2009. Phase II will add an additional 28
option classes to the Penny Pilot
Program on March 28, 2008, bringing
the total number of option classes in the
Penny Pilot Program to 63. These 28
new option classes are also among the
most actively traded, multiply-listed
option classes. A Regulatory
Information Circular, attached as
Exhibit 5 to this proposed rule change,
identifies these additional 28
underlying securities.8 The 35 classes
currently in the Penny Pilot Program
will continue to be quoted as they are
today.
ISE believes that expanding the Penny
Pilot Program as proposed by this rule
filing will allow the Exchange and the
Commission to further analyze, and over
a longer period of time, the impact of
quoting and trading option classes in
penny increments and the impact of the
Penny Pilot Program on liquidity,
market structure, and quote traffic.
As proposed in the Initial Filing, ISE
represents that options trading in penny
increments will not be eligible for split
pricing, as permitted under ISE Rule
716. In the Initial Filing, the Exchange
also made references to quote mitigation
strategies that are currently in place and
proposed to apply them to the Penny
3 15
March 17, 2008.
mstockstill on PROD1PC66 with NOTICES
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.
1. Purpose
On January 24, 2007, the Commission
approved ISE’s rule filing, SR–ISE–
2006–62, which permits 13 option
classes to quote in penny increments in
connection with the implementation of
an industry-wide, six-month pilot
program (the ‘‘Penny Pilot Program’’).6
[Release No. 34–57508; File No. SR–ISE–
2008–27]
18:33 Mar 20, 2008
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
ISE is proposing to implement Phase
II of the Penny Pilot Program expansion.
The text of the proposed rule change is
available on the Exchange’s Web site
(https://www.ise.com), at the ISE’s
principal office, and at the
Commission’s Public Reference Room.5
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
SECURITIES AND EXCHANGE
COMMISSION
VerDate Aug<31>2005
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
ISE. The Exchange has designated this
proposal as one constituting a stated
policy, practice, or interpretation with
respect to the meaning, administration,
or enforcement of an existing rule under
section 19(b)(3)(A)(i) of the Act 3 and
Rule 19b–4(f)(1) thereunder,4 which
renders the proposal effective upon
filing with the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
15243
4 17
PO 00000
Frm 00124
Fmt 4703
Sfmt 4703
7 See Securities Exchange Act Release No. 56564
(September 27, 2007), 72 FR 56412 (October 3,
2007).
8 The Exchange notes that on August 27, 2007,
Sun Microsystems, Inc. changed its ticker symbol
from SUNW to JAVA. The Exchange will amend the
Regulatory Information Circular to reflect this
change prior to its issuance. In addition, the
Exchange will revise the Regulatory Information
Circular prior to its issuance to correct a
typographical error.
E:\FR\FM\21MRN1.SGM
21MRN1
]]>Agencies
[Federal Register Volume 73, Number 56 (Friday, March 21, 2008)]
[Notices]
[Pages 15241-15243]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-5695]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57507; File No. SR-ISE-2007-77]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing of Proposed Rule Change, as Modified by Amendment
Nos. 1 and 2 Thereto, Relating to Complex Orders
March 14, 2008.
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 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 prepared by the ISE. On November
27, 2007, the Exchange filed Amendment No. 1 to the proposed rule
change.\3\ The Exchange filed Amendment No. 2 to the proposed rule
change on March 11, 2008.\4\ The Commission is publishing this notice
to solicit comments on the proposed rule change, as modified by
Amendment Nos. 1 and 2, from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Amendment No. 1 expanded the discussion in the purpose
section of the original filing, but did not change the text of the
proposed rule change.
\4\ Amendment No. 2 modified the original filing to make
exposure of marketable complex orders voluntary. Amendment No. 2
replaced the original filing in its entirety.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The ISE proposes to amend ISE Rule 722 pertaining to Complex Orders
to provide an opportunity for marketable complex orders to receive
price improvement and to provide more specificity on the mechanics of
how complex orders are executed. The text of the proposed rule change
is available at ISE, the Commission's Public Reference Room, and http:/
/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 Exchange has
[[Page 15242]]
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
ISE Rule 722 describes execution principles for complex orders,
including priority rules regarding the execution of complex orders when
there are Public Customer orders resting on the Exchange's limit order
book in the options series that comprise the individual leg(s) of a
complex order. The Exchange's System automatically executes complex
orders in conformance with the requirements of ISE Rule 722, and the
Exchange is not proposing any changes to these substantive
requirements. Additionally, other ISE rules, such as Rule 717(d) and
(e) that require members to expose orders to the marketplace before
executing them against proprietary or solicited orders, also apply to
the execution of complex orders. The Exchange is not proposing any
changes to the application of these other Exchange rules to the
execution of complex orders.
The purpose of the proposed rule change is to amend ISE Rule 722 to
provide an opportunity for marketable complex orders to receive price
improvement and to provide more specificity in the Rule on the
mechanics of how complex orders are executed by the System in
conformance with the existing requirements of Rule 722.\5\ In
particular, the Exchange proposes to amend ISE Rule 722 to specify that
complex orders: (1) Are executed against orders on the complex order
book in price priority and in time priority at the same price; and (2)
will be executed against the bids and offers for the individual legs in
the Exchange's options market provided the complex order can be
executed in full or in a permissible ratio by such bids and offers. The
System matches incoming complex orders against contra-side complex
orders when possible, and then executes the individual legs of a
complex order against the limit order book when possible. In each of
these circumstances, the System assures that the requirements of ISE
Rule 722 are satisfied. For example, the System will not execute two
complex orders against each other if the execution price of the options
leg(s) would be below the best price available on the ISE for the
options series, nor will it execute two complex orders at a price that
matches the best price available on the ISE when there is a Public
Customer order on the book unless the specific requirements of ISE Rule
722 are satisfied.
---------------------------------------------------------------------------
\5\ The Exchange also proposes to delete an outdated cross
reference from ISE Rule 722. Specifically, ISE Rule 722(b)(5)
specifies that the restrictions on order entry contained in two
paragraphs of ISE Rule 717 do not apply to Complex Orders. The
requirements contained in the two paragraphs have been removed from
ISE Rule 717, so the Exchange proposes to delete subparagraph (5)
from Rule 722(b).
---------------------------------------------------------------------------
Under the proposal, the Exchange also will allow members to choose
to give their marketable complex orders an opportunity for price
improvement by introducing a delay of up to one second before
automatically executing designated incoming complex orders.\6\ During
this delay, the complex order will be exposed on the complex order book
to give market participants an opportunity to enter contra-side complex
orders.\7\ While the Exchange is not proposing to conduct an actual
auction for an incoming marketable complex order (i.e., there will be
no messages sent to members specifically soliciting interest to trade
with the complex order), this short delay before executing a marketable
complex order will provide an opportunity for the order to receive
price improvement. The System will execute the incoming order against
interest on the complex order book in price time priority following the
delay, so while it is possible that the order will receive price
improvement as a result of contra-side orders being entered during the
delay, it is also possible that orders will no longer be executable at
the end of the delay. Members will be able to mark all complex orders
for price improvement, including stock-option orders.\8\
---------------------------------------------------------------------------
\6\ The Exchange will determine the appropriate length of the
delay, not to exceed one second, from time to time. The initial
delay period and any subsequent changes to the delay period will be
communicated to Members via an Exchange circular.
\7\ The complex order book is available to all ISE market
participants. However, the application of ISE Rules 717(d) and (e),
which require a three-second exposure period, will prohibit the
member that entered the complex order from entering contra-side
principal orders or orders solicited from other broker-dealers
during the proposed one-second (or less) exposure period.
\8\ See Supplementary Material to ISE Rule 722 regarding
execution of the stock legs of stock-option orders.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with section 6(b)(5) of the Act,\9\ in that it is 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 of a free and open market and a national market system, and,
in general, to protect investors and the public interest. In
particular, the proposal will provide an opportunity for marketable
complex orders to receive price improvement.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
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.
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 the 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 Exchange 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 No. SR-ISE-2007-77 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.
[[Page 15243]]
All submissions should refer to File No. SR-ISE-2007-77. 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 the 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 No. SR-ISE-2007-77 and should be
submitted on or before April 11, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
---------------------------------------------------------------------------
\10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-5695 Filed 3-20-08; 8:45 am]
BILLING CODE 8011-01-P
