Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding Position and Exercise Limits for Options on the DIAMONDS Trust, 25070-25072 [E8-9907]
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25070
Federal Register / Vol. 73, No. 88 / Tuesday, May 6, 2008 / Notices
Act 16 normally does not become
operative for 30 days after the date of its
filing. However, Rule 19b–4(f)(6)(iii) 17
permits the Commission to designate a
shorter time if such action is consistent
with the protection of investors and the
public interest. The CHX has requested
that the Commission waive the 30-day
operative delay. The Commission
believes that waiving the 30-day
operative delay is consistent with the
protection of investors and the public
interest because it will allow the
Exchange to implement the changes to
the ROC without delay.18
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily abrogate
the proposed 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.
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, 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 CHX. 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–CHX–
2008–05 and should be submitted on or
before May 27, 2008.
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:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8–9866 Filed 5–5–08; 8:45 am]
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–CHX–2008–05 on the
subject line.
SECURITIES AND EXCHANGE
COMMISSION
rwilkins on PROD1PC63 with NOTICES
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–CHX–2008–05. 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
16 17
CFR 240.19b–4(f)(6).
CFR 240.19b–4(f)(6)(iii).
18 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
impact of the proposed rule on efficiency,
competition, and capital formation. See 15 U.S.C.
78c(f).
17 17
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BILLING CODE 8010–01–P
[Release No. 34–57736; File No. SR–ISE–
2008–35]
Self-Regulatory Organizations;
International Securities Exchange,
LLC; Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change Regarding Position and
Exercise Limits for Options on the
DIAMONDS Trust
April 29, 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 April 17,
2008, the International Securities
Exchange, LLC (‘‘Exchange’’ or ‘‘ISE’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been substantially prepared by the
Exchange. The Exchange has designated
this proposal as non-controversial under
Section 19(b)(3)(A)(iii) of the Act 3 and
Rule 19b–4(f)(6) thereunder,4 which
renders the proposed rule change
19 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
1 15
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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 increase the position and
exercise limits applicable to options on
the DIAMONDS Trust, Series 1 (‘‘DIA’’).
The text of the proposed rule change is
available on the Exchange’s Web site
(https://www.ise.com), at the offices of
the Exchange, and at the Commission’s
Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of, and basis for,
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in Sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange is proposing to amend
its rules pertaining to position and
exercise limits for options on DIA. The
Exchange proposes to increase position
and exercise limits for options on DIA
to 300,000 contracts on the same side of
the market. The Commission previously
approved a similar proposal of the
Chicago Board Options Exchange
(‘‘CBOE’’).5
5 See Securities Exchange Act Release No. 47346
(February 11, 2003), 68 FR 8316 (February 20, 2003)
(SR–CBOE–2002–26) (approving an increase in the
position limits and exercise limits to 300,000 for
DIA options). The Commission stated that ‘‘given
the surveillance capabilities of the [CBOE] and the
depth and liquidity in both the DIA options and the
underlying cash market in DIAs, the Commission
believes it is permissible to significantly raise
position and exercise limits for DIA options without
risk of disruption to the options or underlying cash
markets.’’ The Commission also stated that
‘‘financial and reporting requirements . . . should
allow [CBOE] to detect and deter trading abuses
arising from the increased position and exercise
limits, and will also allow [CBOE] to monitor large
positions in order to identify instances of potential
risk and to assess additional margin and/or capital
charges, if deemed necessary.’’
E:\FR\FM\06MYN1.SGM
06MYN1
Federal Register / Vol. 73, No. 88 / Tuesday, May 6, 2008 / Notices
The Exchange also recently made
permanent its increased position and
exercise limits for certain equity options
on ISE which were in effect on a pilot
basis.6 The Exchange stipulated, as part
of its proposal for such permanent
approval, that ‘‘its surveillance
procedures and options reporting
procedures, in conjunction with the
financial requirements and risk
management review procedures
generally in place at the clearing firms
and the Options Clearing Corporation,
will serve to adequately address any
concerns the Commission may have
with respect to account(s) engaging in
any manipulative schemes or assuming
too high a level of risk exposure.’’ 7
These representations also apply to the
current proposal to increase the position
and exercise limits for options on DIA.
The Exchange now seeks to increase the
position and exercise limits for options
on DIA on ISE to the level that such
limits are in effect on CBOE (300,000
contracts on the same side of the
market).
The Exchange asserts that the
justifications behind the Commission’s
approval of CBOE’s proposal should
support the same increased position and
exercise limits on options on DIA on
ISE. Specifically, the Exchange believes
that the ‘‘structure of the DIA options
and the considerable liquidity of both
the underlying cash and options market
for DIA options lessen the opportunity
for manipulation of this product and
disruption in the underlying market that
a lower position limit may protect
against.’’ 8
The Exchange believes that the
reporting requirements imposed under
the Exchange’s rules will help protect
against potential manipulation.9
Additionally, the Exchange believes that
such an increase in position and
exercise limits on options on DIA on ISE
is also required for competitive
purposes as well as for purposes of
consistency and uniformity among the
competing options exchanges. This,
taken in conjunction with the
permanent establishment of other
increased position and exercise limits
for certain equity options on ISE,
supports the Exchange’s proposal
related to such increased position and
exercise limits applicable to DIA.
2. Statutory Basis
The Exchange believes that the
proposal is consistent with the
requirements of Section 6(b) of the
Act 10 in general, and Section 6(b)(5) of
the Act 11 in particular, in that it is
designed to promote just and equitable
principles of trade, to prevent
fraudulent and manipulative acts, to
remove impediments to and perfect the
mechanism of a free and open market
and a national market system and, in
general, to protect investors and the
public interest. Specifically, the
Exchange believes that the structure of
the DIA options and the considerable
liquidity of the market for DIA options
diminishes the opportunity for
manipulation of this product and
disruption in the underlying market that
a lower position limit may protect
against.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange believes that the
proposed rule change does not impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
The Exchange has not solicited, and
does not intend to solicit, comments on
this proposed rule change. The
Exchange has not received any
unsolicited written comments from
members or other interested parties.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has designated the
proposed rule change as one that: (1)
Does not significantly affect the
protection of investors or the public
interest; (2) does not impose any
significant burden on competition; and
(3) does not become operative for 30
days from the date of filing, or such
shorter time as the Commission may
designate if consistent with the
protection of investors and the public
interest. Therefore, the foregoing rule
change has become effective pursuant to
Section 19(b)(3)(A) of the Act 12 and
subparagraph (f)(6) of Rule 19b–4
thereunder.13
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10 15
6 See Securities Exchange Act Release No. 57416
(March 3, 2008), 73 FR 12489 (March 7, 2008) (SR–
ISE–2008–20).
7 Id.
8 See Securities Exchange Act Release No. 47346,
supra note 5.
9 See ISE Rule 415.
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U.S.C. 78f(b).
11 15 U.S.C. 78f(b)(5).
12 15 U.S.C. 78s(b)(3)(A).
13 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
provide the Commission with written notice of its
intent to file the proposed rule change, along with
a brief description and text of the proposed rule
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25071
The Exchange notes that the proposed
rule change is based on a rule change
previously approved by the
Commission 14 and does not raise any
novel issues. Additionally, the proposed
rule change is necessary to eliminate
any confusion among members of
multiple exchanges regarding position
and exercise limits applicable to options
on DIA and for purposes of maintaining
a fair and orderly market.
The Exchange has asked the
Commission to waive the operative
delay to permit the proposed rule
change to become operative prior to the
30th day after filing. The Exchange
states that waiving the operative delay
will allow the Exchange to immediately
increase the position and exercise limits
applicable to options on DIA on ISE, for
purposes of conformity and uniformity,
so as to align such limits with those of
other options exchanges.
The Commission believes that
waiving the 30-day operative delay of
the Exchange’s proposal is consistent
with the protection of investors and the
public interest.15 Therefore, the
Commission designates the proposal to
be operative upon filing.
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily abrogate
the rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
No. SR–ISE–2008–35 on the subject
line.
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 fulfilled this requirement.
14 See Securities Exchange Act Release No. 47346,
supra note 5.
15 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
E:\FR\FM\06MYN1.SGM
06MYN1
25072
Federal Register / Vol. 73, No. 88 / Tuesday, May 6, 2008 / Notices
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57744; File No. SR–ODD–
2008–01]
Self-Regulatory Organizations; The
Options Clearing Corporation; Order
Granting Approval of Accelerated
All submissions should refer to File
Delivery of Supplement to the Options
Number SR–ISE–2008–35. This file
Disclosure Document Reflecting
number should be included on the
subject line if e-mail is used. To help the Changes to Disclosure Regarding
Certain Binary Options and Delayed
Commission process and review your
Start Option Series; and Amendment
comments more efficiently, please use
to the Options Disclosure Document
only one method. The Commission will
Front Cover Page To Update the
post all comments on the Commission’s Markets in Which Options Are Traded
Internet Web site (https://www.sec.gov/
April 30, 2008.
rules/sro.shtml). Copies of the
On December 21, 2007, The Options
submission, all subsequent
Clearing Corporation (‘‘OCC’’) submitted
amendments, all written statements
to the Securities and Exchange
with respect to the proposed rule
Commission (‘‘Commission’’), pursuant
change that are filed with the
to Rule 9b–1 under the Securities
Commission, and all written
Exchange Act of 1934 (‘‘Act’’),1 five
communications relating to the
preliminary copies of a supplement to
proposed rule change between the
Commission and any person, other than its options disclosure document
(‘‘ODD’’) reflecting changes to
those that may be withheld from the
disclosure regarding certain binary
public in accordance with the
options and delayed start option series
provisions of 5 U.S.C. 552, will be
(‘‘DSOs’’).2 The ODD would also be
available for inspection and copying in
amended to update its front inside cover
the Commission’s Public Reference
page so that it contains a current list of
Room, 100 F Street, NE., Washington,
the U.S. exchanges that trade options
DC 20549, on official business days
issued by the OCC. On April 25, 2008,
between the hours of 10 a.m. and 3 p.m. the OCC submitted to the Commission
Copies of such filing also will be
five definitive copies of the
available for inspection and copying at
supplement.3
the principal office of the Exchange. All
The ODD currently contains general
comments received will be posted
disclosures on the characteristics and
risks of trading standardized options.
without change; the Commission does
Recently, the American Stock Exchange,
not edit personal identifying
LLC amended its rules to permit the
information from submissions. You
listing and trading of binary options on
should submit only information that
you wish to make available publicly. All individual stocks and exchange-traded
funds, also known as fixed return
submissions should refer to File
4
Number SR–ISE–2008–35 and should be options. The Chicago Board Options
Exchange, Incorporated amended its
submitted on or before May 27, 2008.
rules to permit the listing and trading of
For the Commission, by the Division of
certain DSOs.5 The NASDAQ Stock
Trading and Markets, pursuant to delegated
Market LLC (‘‘Nasdaq’’) began trading
authority.16
options March 31, 2008.6 The proposed
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8–9907 Filed 5–5–08; 8:45 am]
rwilkins on PROD1PC63 with NOTICES
BILLING CODE 8010–01–P
16 17
CFR 200.30–3(a)(12).
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17:11 May 05, 2008
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1 17
CFR 240.9b–1.
letter from Jean M. Cawley, Senior Vice
President and Deputy General Counsel, OCC, to
Sharon Lawson, Senior Special Counsel, Division of
Trading and Markets (‘‘Division’’), Commission,
dated December 20, 2007.
3 See letter from Jean M. Cawley, Senior Vice
President and Deputy General Counsel, OCC, to
Sharon Lawson, Senior Special Counsel, Division,
Commission, dated April 25, 2008.
4 See Securities Exchange Act Release No. 56251
(August 14, 2007), 72 FR 46523 (August 20, 2007)
(SR–Amex–2004–27).
5 See Securities Exchange Act Release No. 56855
(November 28, 2007), 72 FR 68610 (December 5,
2007) (SR–CBOE–2006–90). CBOE Rule 24.9(d)(1)
permits it to trade DSOs on any security index
approved for options trading on the CBOE.
6 See Securities Exchange Act Release No. 57478
(March 12, 2008), 73 FR 14521 (March 18, 2008)
2 See
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supplement amends the ODD to
accommodate these changes by
providing disclosure regarding certain
binary options and DSOs, and to update
the front cover page of the ODD.
Specifically, the proposed
supplement to the ODD adds new
disclosure regarding the characteristics
of binary options on individual equity
securities, which includes fund shares,
as well as the special risks of these
binary options other than credit default
options.7 The proposed supplement to
the ODD also adds new disclosure
regarding the characteristics of DSOs
and the risks associated with their
purchase and sale. Finally, the ODD
would be amended to add Nasdaq,
which currently trades options issued
by OCC, and its corporate address to the
front cover page of the ODD. This
change will ensure that the ODD
accurately identifies the markets on
which options currently trade. The
proposed supplement is intended to be
read in conjunction with the more
general ODD, which, as described
above, discusses the characteristics and
risks of options generally.8
Rule 9b–1(b)(2)(i) under the Act 9
provides that an options market must
file five copies of an amendment or
supplement to the ODD with the
Commission at least 30 days prior to the
date definitive copies are furnished to
customers, unless the Commission
determines otherwise, having due
regard to the adequacy of information
disclosed and the public interest and
protection of investors.10 In addition,
five copies of the definitive ODD, as
amended or supplemented, must be
filed with the Commission not later than
the date the amendment or supplement,
or the amended options disclosure
document, is furnished to customers.
(order approving File Nos. SR–NASDAQ–2007–004
and SR–NASDAQ–2007–080).
7 As noted above, the proposed supplement
provides disclosure that addresses binary options
on individual stock options and exchange-traded
fund shares. The Commission also notes that
disclosure on credit default options, which are also
binary options, is currently addressed in the ODD
through the previously issued June 2007
supplement. See Securities Exchange Act Release
No. 55921 (June 18, 2007), 72 FR 34495 (June 22,
2007) (SR–ODD–2007–03).
8 The Commission notes that the options markets
must continue to ensure that the ODD is in
compliance with the requirements of Rule 9b–
1(b)(2)(i) under the Act, 17 CFR 240.9b–1(b)(2)(i),
including when future changes regarding binary
options and/or DSOs are made. Any future changes
to the rules of the options markets concerning
binary options and/or DSOs would need to be
submitted to the Commission under Section 19(b)
of the Act. 15 U.S.C. 78s(b).
9 17 CFR 240.9b–1(b)(2)(i).
10 This provision permits the Commission to
shorten or lengthen the period of time which must
elapse before definitive copies may be furnished to
customers.
E:\FR\FM\06MYN1.SGM
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]]>Agencies
[Federal Register Volume 73, Number 88 (Tuesday, May 6, 2008)]
[Notices]
[Pages 25070-25072]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-9907]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57736; File No. SR-ISE-2008-35]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change Regarding Position and Exercise Limits for Options on the
DIAMONDS Trust
April 29, 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 April 17, 2008, the International Securities Exchange, LLC
(``Exchange'' or ``ISE'') filed with the Securities and Exchange
Commission (``Commission'') the proposed rule change as described in
Items I and II below, which Items have been substantially prepared by
the Exchange. The Exchange has designated this proposal as non-
controversial under Section 19(b)(3)(A)(iii) of the Act \3\ and Rule
19b-4(f)(6) thereunder,\4\ which renders the proposed rule change
effective upon filing with the Commission. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
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\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 increase the position
and exercise limits applicable to options on the DIAMONDS Trust, Series
1 (``DIA''). The text of the proposed rule change is available on the
Exchange's Web site (https://www.ise.com), at the offices of the
Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
Sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange is proposing to amend its rules pertaining to position
and exercise limits for options on DIA. The Exchange proposes to
increase position and exercise limits for options on DIA to 300,000
contracts on the same side of the market. The Commission previously
approved a similar proposal of the Chicago Board Options Exchange
(``CBOE'').\5\
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 47346 (February 11,
2003), 68 FR 8316 (February 20, 2003) (SR-CBOE-2002-26) (approving
an increase in the position limits and exercise limits to 300,000
for DIA options). The Commission stated that ``given the
surveillance capabilities of the [CBOE] and the depth and liquidity
in both the DIA options and the underlying cash market in DIAs, the
Commission believes it is permissible to significantly raise
position and exercise limits for DIA options without risk of
disruption to the options or underlying cash markets.'' The
Commission also stated that ``financial and reporting requirements .
. . should allow [CBOE] to detect and deter trading abuses arising
from the increased position and exercise limits, and will also allow
[CBOE] to monitor large positions in order to identify instances of
potential risk and to assess additional margin and/or capital
charges, if deemed necessary.''
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[[Page 25071]]
The Exchange also recently made permanent its increased position
and exercise limits for certain equity options on ISE which were in
effect on a pilot basis.\6\ The Exchange stipulated, as part of its
proposal for such permanent approval, that ``its surveillance
procedures and options reporting procedures, in conjunction with the
financial requirements and risk management review procedures generally
in place at the clearing firms and the Options Clearing Corporation,
will serve to adequately address any concerns the Commission may have
with respect to account(s) engaging in any manipulative schemes or
assuming too high a level of risk exposure.'' \7\ These representations
also apply to the current proposal to increase the position and
exercise limits for options on DIA. The Exchange now seeks to increase
the position and exercise limits for options on DIA on ISE to the level
that such limits are in effect on CBOE (300,000 contracts on the same
side of the market).
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release No. 57416 (March 3,
2008), 73 FR 12489 (March 7, 2008) (SR-ISE-2008-20).
\7\ Id.
---------------------------------------------------------------------------
The Exchange asserts that the justifications behind the
Commission's approval of CBOE's proposal should support the same
increased position and exercise limits on options on DIA on ISE.
Specifically, the Exchange believes that the ``structure of the DIA
options and the considerable liquidity of both the underlying cash and
options market for DIA options lessen the opportunity for manipulation
of this product and disruption in the underlying market that a lower
position limit may protect against.'' \8\
---------------------------------------------------------------------------
\8\ See Securities Exchange Act Release No. 47346, supra note 5.
---------------------------------------------------------------------------
The Exchange believes that the reporting requirements imposed under
the Exchange's rules will help protect against potential
manipulation.\9\ Additionally, the Exchange believes that such an
increase in position and exercise limits on options on DIA on ISE is
also required for competitive purposes as well as for purposes of
consistency and uniformity among the competing options exchanges. This,
taken in conjunction with the permanent establishment of other
increased position and exercise limits for certain equity options on
ISE, supports the Exchange's proposal related to such increased
position and exercise limits applicable to DIA.
---------------------------------------------------------------------------
\9\ See ISE Rule 415.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Act \10\ in general, and Section
6(b)(5) of the Act \11\ in particular, in that it is designed to
promote just and equitable principles of trade, to prevent fraudulent
and manipulative acts, to remove impediments to and perfect the
mechanism of a free and open market and a national market system and,
in general, to protect investors and the public interest. Specifically,
the Exchange believes that the structure of the DIA options and the
considerable liquidity of the market for DIA options diminishes the
opportunity for manipulation of this product and disruption in the
underlying market that a lower position limit may protect against.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78f(b).
\11\ 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 designated the proposed rule change as one that:
(1) Does not significantly affect the protection of investors or the
public interest; (2) does not impose any significant burden on
competition; and (3) does not become operative for 30 days from the
date of filing, or such shorter time as the Commission may designate if
consistent with the protection of investors and the public interest.
Therefore, the foregoing rule change has become effective pursuant to
Section 19(b)(3)(A) of the Act \12\ and subparagraph (f)(6) of Rule
19b-4 thereunder.\13\
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to provide the Commission
with 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 fulfilled this requirement.
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The Exchange notes that the proposed rule change is based on a rule
change previously approved by the Commission \14\ and does not raise
any novel issues. Additionally, the proposed rule change is necessary
to eliminate any confusion among members of multiple exchanges
regarding position and exercise limits applicable to options on DIA and
for purposes of maintaining a fair and orderly market.
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\14\ See Securities Exchange Act Release No. 47346, supra note
5.
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The Exchange has asked the Commission to waive the operative delay
to permit the proposed rule change to become operative prior to the
30th day after filing. The Exchange states that waiving the operative
delay will allow the Exchange to immediately increase the position and
exercise limits applicable to options on DIA on ISE, for purposes of
conformity and uniformity, so as to align such limits with those of
other options exchanges.
The Commission believes that waiving the 30-day operative delay of
the Exchange's proposal is consistent with the protection of investors
and the public interest.\15\ Therefore, the Commission designates the
proposal to be operative upon filing.
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\15\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate the rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File No. SR-ISE-2008-35 on the subject line.
[[Page 25072]]
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-2008-35. 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-2008-35 and should be
submitted on or before May 27, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-9907 Filed 5-5-08; 8:45 am]
BILLING CODE 8010-01-P
