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]

Download as PDF 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 http://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 VerDate Aug<31>2005 17:44 Oct 03, 2008 Jkt 217001 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. PO 00000 Frm 00168 Fmt 4703 Sfmt 4703 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). E:\FR\FM\06OCN1.SGM 06OCN1 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 http://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. jlentini on PROD1PC65 with NOTICES 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 VerDate Aug<31>2005 17:44 Oct 03, 2008 Jkt 217001 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 PO 00000 Frm 00169 Fmt 4703 Sfmt 4703 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 (http://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 http://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 06OCN1 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 http://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 jlentini on PROD1PC65 with NOTICES 1 15 VerDate Aug<31>2005 17:44 Oct 03, 2008 Jkt 217001 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). PO 00000 Frm 00170 Fmt 4703 Sfmt 4703 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%. E:\FR\FM\06OCN1.SGM 06OCN1

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]


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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.
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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).
    \4\ 17 CFR 240.19b-4(f)(6).
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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 http://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\
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    \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.
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    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.
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    \7\ See supra note 5.
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    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\
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    \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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    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 http://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 (http://
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 http://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