Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Expand the Trading Hours of the ISE Stock Exchange, 58277-58279 [E8-23489]
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Federal Register / Vol. 73, No. 194 / Monday, October 6, 2008 / Notices
the Commission’s Public Reference
Room.
Closed Meeting.
100 F Street, NE., Washington,
STATUS:
PLACE:
DC.
DATE AND TIME OF PREVIOUSLY ANNOUNCED
MEETING: Monday, September 29, 2008
at 2 p.m.
Cancellation of
Meeting.
The Closed Meeting scheduled for
Monday, September 29, 2008 was
cancelled.
For further information please contact
the Office of the Secretary at (202) 551–
5400.
CHANGE IN THE MEETING:
Dated: October 1, 2008,
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–23579 Filed 10–3–08; 8:45 am]
BILLING CODE 8011–01–P
1. Purpose
[Release No. 34–58685; File No. SR–ISE–
2008–73]
Self-Regulatory Organizations;
International Securities Exchange,
LLC; Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change To Expand the Trading Hours
of the ISE Stock Exchange
September 30, 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
September 24, 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 prepared by the Exchange.
The Exchange has filed the proposal
pursuant to Section 19(b)(3)(A) of the
Act 3 and Rule 19b–4(f)(6) 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.
jlentini on PROD1PC65 with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange submits this rule filing
to extend its hours of trading for equity
securities. The text of the proposed rule
change is available on the Exchange’s
Web site https://www.ise.com, at the
principal office of the Exchange, and at
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
2 17
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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
SECURITIES AND EXCHANGE
COMMISSION
1 15
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
The Exchange proposes to extend its
hours of trading for equity securities.
Currently, the Exchange has two equity
trading sessions. The Pre-Market
Session begins at 9 a.m. Eastern Time 5
and ends when the opening transaction
occurs, as defined in ISE Rule 2106(b).
The Regular Market Session commences
upon the opening transaction, as
defined in ISE Rule 2106(b), and
concludes simultaneously with the
primary listing market in such security,
which is either 4 p.m. or 4:15 p.m.
Eastern Time, depending on the
security.6
The Exchange is proposing to begin
ISE Stock Exchange trading at 8 a.m.
Eastern Time and close the market at 5
p.m. Eastern Time. Trading in the PreMarket Session and the transition to the
Regular-Market Session7 will remain
unchanged, other than starting the PreMarket Session one hour earlier.
Additionally, the Exchange is
proposing to adopt a Post-Market
Session, which will begin at the
conclusion of the Regular-Market
Session and close at 5 p.m. Eastern
Time. To participate in the Post-Market
session, Equity Electronic Access
Members (‘‘Equity EAMs’’) must mark
orders as ‘‘Post-Closing.’’ Accordingly,
the Exchange is proposing to amend ISE
Rule 2102 (Hours of Business) to
provide for a Post-Market Session and
5 See
Securities and Exchange Commission
Release No. 34–57021 (December 20, 2007), 72 FR
74373 (December 31, 2007) (SR–ISE–2007–116)
(Notice of filing and immediate effectiveness of
proposed rule change to open the Exchange’s equity
trading platform at 9:00 a.m.).
6 See ISE Rule 2106.
7 See supra note 5.
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58277
ISE Rule 2104 (Types of Orders) to
adopt a ‘‘Post-Closing’’ order.
Trading during expanded hours
involves potential risks, including the
possibility of lower liquidity, higher
volatility, changing prices, unlinked
markets with the possibility of tradethroughs, and wider spreads. Moreover,
trades executed during these sessions
may receive executions at inferior prices
when compared to the high/low of the
day. The Supplementary Material to ISE
Rule 2102 presently requires Equity
EAMs that submit orders during the PreMarket Session on behalf of nonmembers to disclose the risks of
participating in such session to their
customers. The Exchange proposes to
expand this customer disclosure
requirement to also apply to the PostMarket Session.
The Exchange proposes to adopt rule
text governing trading halts in the Preand Post-Market Sessions. Specifically,
if a security begins trading on the
Exchange in the Pre-Market Session and
subsequently a temporary interruption
occurs in the calculation or wide
dissemination of the intraday indicative
value (‘‘IIV’’) or the value of the
underlying index by a major market data
vendor, the Exchange may continue to
trade the derivative securities product
for the remainder of the Pre-Market
Session.
The Exchange will continue to halt
trading during the Regular-Market
Session in accordance with the
provisions set forth in existing ISE Rule
2101(a)(2)(iii)(A) and (B).8
The Exchange will halt trading during
the Post-Market Session if the IIV or the
value of the underlying index continues
not to be calculated or widely available
after the close of the Regular-Market
Session. The Exchange may trade
derivative securities products in the
Post-Market Session only if the listing
market traded such securities until the
close of its regular trading session
without a halt.
If the IIV or the value of the
underlying index continues not to be
calculated or widely available as of the
commencement of the Pre-Market
Session on the next business day, the
Exchange will not begin trading the
derivative securities product in the PreMarket Session that day. If an
interruption in the calculation or wide
8 The Exchange is also amending ISE Rule
2101(a)(2)(iii)(A) to delete language addressing the
halting and subsequent resumption of trading when
the underlying value of a securities derivative
product continues not to be calculated or widely
available as of the commencement of trading on the
next business day. The Exchange believes that it is
appropriate to delete this language because it is
being added to proposed Rule 2102(e)(3).
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58278
Federal Register / Vol. 73, No. 194 / Monday, October 6, 2008 / Notices
dissemination of the IIV or the value of
the underlying index continues, the
Exchange may resume trading in the
derivative securities product only if
calculation and wide dissemination of
the IIV or the value of the underlying
index resumes or trading in the
derivative securities product resumes in
the listing market.
The Exchange intends to distribute to
its Equity EAMs and make available on
its Web site at https://www.ise.com a
Regulatory Information Circular (‘‘RIC’’)
that discloses, among other things: (1)
The current underlying index value and
IIV may not be updated during the Preand Post-Market Sessions; (2) lower
liquidity in the Pre- and Post-Market
Sessions may impact pricing; (3) higher
volatility in the Pre- and Post-Market
Sessions may impact pricing; (4) wider
spreads may occur in the Pre- and PostMarket Session; (5) the circumstances
that trigger trading halts; (6) required
customer disclosures; and (7) suitability
requirements. The RIC will also
highlight that investors may be at a
disadvantage to market professionals
during the Pre- and Post-Market
Sessions in that they may not have
access to an updated index value or IIV
that would otherwise be available
during the Regular Market Session. The
Exchange is also amending the
Supplementary Material to Rule 2102 to
require Equity EAMs to disclose
additional risks associated with
extended trading hours in Exchange
Traded Funds to customers.
Additionally the Exchange is
proposing to amend Rule 2102(b) to
precisely define the transition between
the Pre-Market Session and the RegularMarket Session as is described above.
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2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the Act
and the rules and regulations under the
Act applicable to a national securities
exchange and, in particular, the
requirements of Section 6(b) of the Act.9
Specifically, the Exchange believes the
proposed rule change is consistent with
Section 6(b)(5) of the Act’s 10
requirements that the rules of a national
securities exchange be designed to
promote just and equitable principles of
trade, to prevent fraudulent and
manipulative acts and, in general, to
protect investors and the public interest.
In particular, the proposed rule change
will allow the Exchange to provide a
competitive marketplace for Equity
9 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
10 15
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EAMs to trade securities during
extended hours.
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
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
Because the foregoing proposed rule
change does not:
(i) Significantly affect the protection
of investors or the public interest;
(ii) Impose any significant burden on
competition; and
(iii) Become operative for 30 days
from the date on which it was filed, or
such shorter time as the Commission
may designate if consistent with the
protection of investors and the public
interest, it has become effective
pursuant to Section 19(b)(3)(A) of the
Act 11 and Rule 19b–4(f)(6)
thereunder.12
ISE has asked the Commission to
waive the 30-day operative delay. The
Commission believes that such waiver is
consistent with the protection of
investors and the public interest
because such waiver should benefit
investors by allowing ISE, without
undue delay, to expand its hours of
trading, which should add competition
in the trading of equity securities and
new derivative securities products. In
addition, proposed ISE Rule 2102 is
closely modeled after similar rules of
other national securities exchanges 13
and does not raise any novel or
significant regulatory issues. Therefore,
the Commission designates the
11 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). The Commission notes
that ISE has satisfied the five-day pre-filing notice
requirement.
13 See e.g., NYSE Arca Rule 7.34 and Securities
Exchange Act Release No. 54997 (December 21,
2006), 71 FR 78501 (December 29, 2006) (SR–
NYSEArca–2006–77) (reflecting trading halt
procedures for securities trading in extended
hours). See also Securities Exchange Act Release
No. 56625 (October 5, 2007), 72 FR 58144 (October
12, 2007) (SR–NYSEArca–2007–73) (discussing
disclosure to be included in regulatory information
bulletin).
12 17
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proposed rule change as operative upon
filing.14
At any time within 60 days of the
filing of the proposed rule change the
Commission may summarily abrogate
such rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–ISE–2008–73 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street, NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–ISE–2008–73. 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 on official business days between
the hours of 10 a.m. and 3 p.m. Copies
of such filing will also be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
14 For purposes only of waiving the operative date
of this proposal, the Commission has considered
the rule’s impact on efficiency, competition, and
capital formation. See 15 U.S.C. 78c(f).
E:\FR\FM\06OCN1.SGM
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Federal Register / Vol. 73, No. 194 / Monday, October 6, 2008 / Notices
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–
2008–73 and should be submitted on or
before October 27, 2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–23489 Filed 10–3–08; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–58691; File No. SR–Phlx–
2008–69]
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change by the
NASDAQ OMX PHLX, Inc. Relating to
the Phlx XL Risk Monitor Mechanism
September 30, 2008.
Quote Traders (‘‘RSQTs’’),7 non-SQT
ROTs,8 and specialists (collectively,
‘‘Phlx XL participants’’) when the Phlx
XL system determines whether to
engage the Risk Monitor Mechanism (as
defined more fully below) by calculating
the Net Offset Specified Engagement
Size (as defined below).
The text of the proposed rule change
is available on the Exchange’s Web site
at https://www.phlx.com/regulatory/
reg_rulefilings.aspx.
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.
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
September 18, 2008, the NASDAQ OMX
PHLX, Inc. (‘‘Phlx’’ or ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by Phlx. The Commission
is publishing this notice to solicit
comments on the proposed rule change
from interested persons.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange, pursuant to Section
19(b)(1) of the Act 3 and Rule 19b–4
thereunder,4 proposes to amend
Exchange Rule 1093, Phlx XL Risk
Monitor Mechanism, to reflect a system
change to its fully electronic trading
platform for options, Phlx XL.5 The
system change would eliminate the
current size offset of long calls vs. long
puts and short calls vs. short puts in the
accounts of Exchange Streaming Quote
Traders (‘‘SQTs’’),6 Remote Streaming
Risk Monitor Mechanism
In January, 2006, the Exchange
adopted Rule 1093 and deployed the
Phlx XL Risk Monitor Mechanism.9 The
Phlx XL Risk Monitor Mechanism is a
component of Phlx XL that counts the
15 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)(1).
4 17 CFR 240.19b–4.
5 See Securities Exchange Act Release No. 50100
(July 27, 2004), 69 FR 44612 (August 3, 2004) (SR–
Phlx–2003–59) [sic].
6 An SQT is a Registered Options Trader (‘‘ROT’’)
who has received permission from the Exchange to
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1. Purpose
The purpose of the proposed rule
change is to provide Phlx XL
participants with additional protection
from the unreasonable risk associated
with the execution of an excessive
number of contracts resulting from near
simultaneous executions in a single
option issue.
generate and submit option quotations
electronically through an electronic interface with
AUTOM via an Exchange approved proprietary
electronic quoting device in eligible options to
which such SQT is assigned. See Exchange Rule
1014(b)(ii)(A).
7 An RSQT is an ROT that is a member or member
organization with no physical trading floor
presence who has received permission from the
Exchange to generate and submit option quotations
electronically through AUTOM in eligible options
to which such RSQT has been assigned. An RSQT
may only submit such quotations electronically
from off the floor of the Exchange. See Exchange
Rule 1014(b)(ii)(B).
8 A non-SQT ROT is an ROT who is neither an
SQT nor an RSQT. See Exchange Rule
1014(b)(ii)(C).
9 See Securities Exchange Act Release No. 53166
(January 23, 2006), 71 FR 4625 (January 27, 2006)
(SR–Phlx–2006–05).
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58279
number of contracts traded in a
particular option by each Phlx XL
participant within a specified time
period established by each Phlx XL
participant (the ‘‘specified time
period’’). The specified time period
commences for an option when a
transaction occurs in any series in such
option. The specified time period may
not exceed 15 seconds; Phlx XL
participants may, however, set the
specified time period for less than 15
seconds.
The system engages the Risk Monitor
Mechanism in a particular option when
the counting program has determined
that a Phlx XL participant has traded a
Specified Engagement Size (as defined
below), as established by such Phlx XL
participant, during the specified time
period. When such Phlx XL participant
has traded the Specified Engagement
Size during the specified time period,
the Risk Monitor Mechanism
automatically removes such Phlx XL
participant’s quotations from the
Exchange’s disseminated quotation in
all series of the particular option until
such Phlx XL participant submits a new,
revised quotation.
Specified Engagement Size
Each Phlx XL participant establishes
a Specified Engagement Size for a
particular option.10 When such Phlx XL
participant has traded the Specified
Engagement Size during the specified
time period, the Risk Monitor
Mechanism automatically removes such
Phlx XL participant’s quotations from
the Exchange’s disseminated quotation
in all series of the particular option.
The Specified Engagement Size is
determined as follows: For each series
in an option, the counting program
would determine the percentage that the
number of contracts executed in that
series represents relative to the
disseminated size in that series (the
‘‘series percentage’’). The counting
program would then determine the sum
of the series percentages in the
10 A Phlx XL participant could establish the
Specified Engagement Size as 100% or greater of
the number of contracts executed in each series
during the specified time period relative to the
disseminated size. For example, a Phlx XL
participant could establish the Specified
Engagement Size as 200%, in which case the Risk
Monitor Mechanism would not be engaged until
200% of the number of contracts in each series have
been executed during the specified time period
relative to the disseminated size. A Phlx XL
participant could also establish the Specified
Engagement Size as, for example, 120%, in which
case the Risk Monitor Mechanism would not be
engaged until 120% of the number of contracts in
each series have been executed during the specified
time period relative to the disseminated size. In any
event, however, a Phlx XL participant may not
establish a Specified Engagement Size that is less
than 100%.
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]]>Agencies
[Federal Register Volume 73, Number 194 (Monday, October 6, 2008)]
[Notices]
[Pages 58277-58279]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-23489]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-58685; File No. SR-ISE-2008-73]
Self-Regulatory Organizations; International Securities
Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change To Expand the Trading Hours of the ISE Stock Exchange
September 30, 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 September 24, 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 prepared by the Exchange.
The Exchange has filed the proposal pursuant to Section 19(b)(3)(A) of
the Act \3\ and Rule 19b-4(f)(6) 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\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 submits this rule filing to extend its hours of
trading for equity securities. The text of the proposed rule change is
available on the Exchange's Web site https://www.ise.com, at the
principal office 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 proposes to extend its hours of trading for equity
securities. Currently, the Exchange has two equity trading sessions.
The Pre-Market Session begins at 9 a.m. Eastern Time \5\ and ends when
the opening transaction occurs, as defined in ISE Rule 2106(b). The
Regular Market Session commences upon the opening transaction, as
defined in ISE Rule 2106(b), and concludes simultaneously with the
primary listing market in such security, which is either 4 p.m. or 4:15
p.m. Eastern Time, depending on the security.\6\
---------------------------------------------------------------------------
\5\ See Securities and Exchange Commission Release No. 34-57021
(December 20, 2007), 72 FR 74373 (December 31, 2007) (SR-ISE-2007-
116) (Notice of filing and immediate effectiveness of proposed rule
change to open the Exchange's equity trading platform at 9:00 a.m.).
\6\ See ISE Rule 2106.
---------------------------------------------------------------------------
The Exchange is proposing to begin ISE Stock Exchange trading at 8
a.m. Eastern Time and close the market at 5 p.m. Eastern Time. Trading
in the Pre-Market Session and the transition to the Regular-Market
Session\7\ will remain unchanged, other than starting the Pre-Market
Session one hour earlier.
---------------------------------------------------------------------------
\7\ See supra note 5.
---------------------------------------------------------------------------
Additionally, the Exchange is proposing to adopt a Post-Market
Session, which will begin at the conclusion of the Regular-Market
Session and close at 5 p.m. Eastern Time. To participate in the Post-
Market session, Equity Electronic Access Members (``Equity EAMs'') must
mark orders as ``Post-Closing.'' Accordingly, the Exchange is proposing
to amend ISE Rule 2102 (Hours of Business) to provide for a Post-Market
Session and ISE Rule 2104 (Types of Orders) to adopt a ``Post-Closing''
order.
Trading during expanded hours involves potential risks, including
the possibility of lower liquidity, higher volatility, changing prices,
unlinked markets with the possibility of trade-throughs, and wider
spreads. Moreover, trades executed during these sessions may receive
executions at inferior prices when compared to the high/low of the day.
The Supplementary Material to ISE Rule 2102 presently requires Equity
EAMs that submit orders during the Pre-Market Session on behalf of non-
members to disclose the risks of participating in such session to their
customers. The Exchange proposes to expand this customer disclosure
requirement to also apply to the Post-Market Session.
The Exchange proposes to adopt rule text governing trading halts in
the Pre- and Post-Market Sessions. Specifically, if a security begins
trading on the Exchange in the Pre-Market Session and subsequently a
temporary interruption occurs in the calculation or wide dissemination
of the intraday indicative value (``IIV'') or the value of the
underlying index by a major market data vendor, the Exchange may
continue to trade the derivative securities product for the remainder
of the Pre-Market Session.
The Exchange will continue to halt trading during the Regular-
Market Session in accordance with the provisions set forth in existing
ISE Rule 2101(a)(2)(iii)(A) and (B).\8\
---------------------------------------------------------------------------
\8\ The Exchange is also amending ISE Rule 2101(a)(2)(iii)(A) to
delete language addressing the halting and subsequent resumption of
trading when the underlying value of a securities derivative product
continues not to be calculated or widely available as of the
commencement of trading on the next business day. The Exchange
believes that it is appropriate to delete this language because it
is being added to proposed Rule 2102(e)(3).
---------------------------------------------------------------------------
The Exchange will halt trading during the Post-Market Session if
the IIV or the value of the underlying index continues not to be
calculated or widely available after the close of the Regular-Market
Session. The Exchange may trade derivative securities products in the
Post-Market Session only if the listing market traded such securities
until the close of its regular trading session without a halt.
If the IIV or the value of the underlying index continues not to be
calculated or widely available as of the commencement of the Pre-Market
Session on the next business day, the Exchange will not begin trading
the derivative securities product in the Pre-Market Session that day.
If an interruption in the calculation or wide
[[Page 58278]]
dissemination of the IIV or the value of the underlying index
continues, the Exchange may resume trading in the derivative securities
product only if calculation and wide dissemination of the IIV or the
value of the underlying index resumes or trading in the derivative
securities product resumes in the listing market.
The Exchange intends to distribute to its Equity EAMs and make
available on its Web site at https://www.ise.com a Regulatory
Information Circular (``RIC'') that discloses, among other things: (1)
The current underlying index value and IIV may not be updated during
the Pre- and Post-Market Sessions; (2) lower liquidity in the Pre- and
Post-Market Sessions may impact pricing; (3) higher volatility in the
Pre- and Post-Market Sessions may impact pricing; (4) wider spreads may
occur in the Pre- and Post-Market Session; (5) the circumstances that
trigger trading halts; (6) required customer disclosures; and (7)
suitability requirements. The RIC will also highlight that investors
may be at a disadvantage to market professionals during the Pre- and
Post-Market Sessions in that they may not have access to an updated
index value or IIV that would otherwise be available during the Regular
Market Session. The Exchange is also amending the Supplementary
Material to Rule 2102 to require Equity EAMs to disclose additional
risks associated with extended trading hours in Exchange Traded Funds
to customers.
Additionally the Exchange is proposing to amend Rule 2102(b) to
precisely define the transition between the Pre-Market Session and the
Regular-Market Session as is described above.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations under the Act applicable to a
national securities exchange and, in particular, the requirements of
Section 6(b) of the Act.\9\ Specifically, the Exchange believes the
proposed rule change is consistent with Section 6(b)(5) of the Act's
\10\ requirements that the rules of a national securities exchange be
designed to promote just and equitable principles of trade, to prevent
fraudulent and manipulative acts and, in general, to protect investors
and the public interest. In particular, the proposed rule change will
allow the Exchange to provide a competitive marketplace for Equity EAMs
to trade securities during extended hours.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
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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 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
Because the foregoing proposed rule change does not:
(i) Significantly affect the protection of investors or the public
interest;
(ii) Impose any significant burden on competition; and
(iii) Become operative for 30 days from the date on which it was
filed, or such shorter time as the Commission may designate if
consistent with the protection of investors and the public interest, it
has become effective pursuant to Section 19(b)(3)(A) of the Act \11\
and Rule 19b-4(f)(6) thereunder.\12\
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6). The Commission notes that ISE has
satisfied the five-day pre-filing notice requirement.
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ISE has asked the Commission to waive the 30-day operative delay.
The Commission believes that such waiver is consistent with the
protection of investors and the public interest because such waiver
should benefit investors by allowing ISE, without undue delay, to
expand its hours of trading, which should add competition in the
trading of equity securities and new derivative securities products. In
addition, proposed ISE Rule 2102 is closely modeled after similar rules
of other national securities exchanges \13\ and does not raise any
novel or significant regulatory issues. Therefore, the Commission
designates the proposed rule change as operative upon filing.\14\
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\13\ See e.g., NYSE Arca Rule 7.34 and Securities Exchange Act
Release No. 54997 (December 21, 2006), 71 FR 78501 (December 29,
2006) (SR-NYSEArca-2006-77) (reflecting trading halt procedures for
securities trading in extended hours). See also Securities Exchange
Act Release No. 56625 (October 5, 2007), 72 FR 58144 (October 12,
2007) (SR-NYSEArca-2007-73) (discussing disclosure to be included in
regulatory information bulletin).
\14\ For purposes only of waiving the operative date of this
proposal, the Commission has considered the 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 such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-ISE-2008-73 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-ISE-2008-73. 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 on official business days between
the hours of 10 a.m. and 3 p.m. Copies of such filing will also be
available for inspection and copying at the principal office of the
Exchange. All comments received will be posted without change;
[[Page 58279]]
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-
2008-73 and should be submitted on or before October 27, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-23489 Filed 10-3-08; 8:45 am]
BILLING CODE 8011-01-P
