Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing of Proposed Rule Change Relating to Alternative Primary Market Makers, 76078-76080 [E8-29555]

Download as PDF 76078 Federal Register / Vol. 73, No. 241 / Monday, December 15, 2008 / Notices C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received from Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve such proposed rule change, or (B) Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments pwalker on PROD1PC71 with NOTICES • 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–CBOE–2008–115 on the subject line. 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-CBOE–2008–115 and should be submitted on or before January 5, 2009. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Florence E. Harmon, Acting Secretary. [FR Doc. E8–29556 Filed 12–12–08; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–59053; File No. SR–ISE– 2008–90] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing of Proposed Rule Change Relating to Alternative Primary Market Makers December 4, 2008. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the Paper Comments ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on November • Send paper comments in triplicate 21, 2008, the International Securities to Secretary, Securities and Exchange Exchange, LLC (the ‘‘Exchange’’ or the Commission, 100 F Street, NE., ‘‘ISE’’) filed with the Securities and Washington, DC 20549–1090. Exchange Commission the proposed All submissions should refer to File rule change as described in Items I, II, Number SR–CBOE–2008–115. This file and III below, which items have been number should be included on the prepared by the self-regulatory subject line if e-mail is used. To help the organization. The Commission is Commission process and review your publishing this notice to solicit comments more efficiently, please use comments on the proposed rule change only one method. The Commission will from interested persons. post all comments on the Commission’s I. Self-Regulatory Organization’s Internet Web site (http://www.sec.gov/ Statement of the Terms of Substance of rules/sro.shtml). Copies of the the Proposed Rule Change submission, all subsequent amendments, all written statements The ISE proposes to amend Rule 802 with respect to the proposed rule to provide for an Alternative Primary change that are filed with the Market Maker. The text of the proposed Commission, and all written communications relating to the 16 17 CFR 200.30–3(a)(12). 1 U.S.C. 78s(b)(1). proposed rule change between the 2 17 CFR 240.19b–4. Commission and any person, other than VerDate Aug<31>2005 20:00 Dec 12, 2008 Jkt 217001 PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 rule change is as follows, with additions italicized: Rule 802. Appointment of Market Makers (a) No change. (b) (1) The Board or designated committee will allocate equity options classes into groupings (‘‘Groups’’ of options) and will make appointments to those Groups rather than individual classes, except as provided in paragraph (f) and Supplementary Material .02 below. Absent an exemption by the Exchange, an appointment of a market maker shall be limited to the options classes trading in no more than one Group for each Membership held by the market maker. (2) No change. (c)–(f) No change. Supplementary Material to Rule 802 .01 No change. .02 A Member that is approved to act in the capacity of a Competitive Market Maker with respect to one or more CMM Rights may voluntarily be appointed to act as an ‘‘Alternative Primary Market Maker,’’ so long as the Exchange has determined that such Member has the appropriate systems and procedures in place to undertake the responsibilities of a Primary Market Maker. (a) The Exchange may appoint an Alternative Primary Market Maker to an options class only in the event that no Primary Market Makers or Second Market Primary Market Makers seek allocation of the security. (b) If no Primary Market Makers or Second Market Primary Market Makers seek allocation of an options class, all eligible Competitive Market Makers will be given notice and an opportunity to seek allocation of the security as an Alternative Primary Market Maker. Such allocations will be made by the Allocation Committee according to the guidelines contained in Rule 802. (c) An Alternative Primary Market Maker shall have all of the responsibilities and privileges of a Primary Market Maker under the Rules with respect to all appointed options classes. (d) Options classes allocated to Alternative Primary Market Makers may be traded in the Second Market as provided in Chapter 9 of the Rules. With respect to options classes traded in the First Market, such classes will not be allocated to a particular Group under Rule 802(b)(1), and all Competitive Market Makers shall be eligible for appointment to such classes. (e) If an Alternative Primary Market Maker ceases trading of an options E:\FR\FM\15DEN1.SGM 15DEN1 Federal Register / Vol. 73, No. 241 / Monday, December 15, 2008 / Notices class, the class will be reallocated by the Exchange to a Primary Market Maker or another Alternative Primary Market Maker, as appropriate. * * * * * 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 self-regulatory organization 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 self-regulatory organization 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 pwalker on PROD1PC71 with NOTICES 1. Purpose The Exchange proposes to enhance its market by establishing Alternative Primary Market Makers (‘‘Alternative PMMs’’). Currently, when the ISE lists new options classes, it allocates them to one of its Primary Market Makers (‘‘PMMs’’) under Rule 802. Pursuant to power delegated to the Board, an Allocation Committee, which consists of representatives of Electronic Access Members, makes allocation decisions according to the guidelines contained in Rule 802. Under Rule 802, allocations are voluntary, and at times ISE is unable to list new products because none of the PMMs are interested in trading the class. At other times, ISE must delist certain products due to lack of PMM interest. Most frequently, this occurs with respect to options on stocks that have pending corporate actions, and options products that are not listed at any other options exchange. Despite the lack of PMM interest, these products may be of interest to other market making firms at the Exchange. To better enable the Exchange to list and retain these options classes, ISE proposes to appoint Competitive Market Makers (‘‘CMMs’’) that meet certain qualifications as Alternative PMMs when none of the PMMs want an allocation.3 Specifically, under this proposal, in order to be appointed as an 3 Only CMMs that own or lease CMM Rights shall be eligible to be appointed as an Alternative PMM. That is, Electronic Access Members (‘‘EAMs’’) acting as market makers in the Second Market will not be eligible to be appointed as Alternative PMMs. VerDate Aug<31>2005 20:00 Dec 12, 2008 Jkt 217001 Alternative PMM, the Exchange must first determine that a CMM has the appropriate systems and procedures in place to undertake the responsibilities of a PMM. Further, before an Alternative PMM is appointed to an options class, that options class will always be offered first to the PMMs or Second Market PMMs (as applicable) under the Exchange’s regular allocation procedure. Rule 802(b)(1) currently states that the Board or a designated committee will make appointments to ‘‘Groups’’ of options rather than individual classes. For the purpose of allocating a product, i.e., an individual options class, to an Alternative PMM, the Exchange proposes to carve out an exception in Rule 802(b)(1) pursuant to which the Allocation Committee shall allocate individual options classes to an Alternative PMM in accordance with Supplementary Material .02 to Rule 802. The options class may be a new listing or a listing that the current PMM or Second Market PMM (as applicable) no longer wishes to make a market in. Under the proposal, if no PMMs or Second Market PMMs (as applicable) want the allocation, then the Alternative PMMs will be offered the opportunity to serve as PMM in the options class according to ISE’s regular allocation procedures. Once appointed to an options class, the Alternative PMM will have all of the responsibilities and privileges of a PMM under the Rules with respect to all appointed options classes. For example, Alternative PMMs will enjoy privileges that include, among other things, participation rights and small order execution preference while accepting responsibilities that include, among other things, the obligation to provide continuous quotations in the options class to which the Alternative PMM is appointed, to conducting the opening rotation on a daily basis for as long as the Alternative PMM is appointed to that options class. Finally, if an Alternative PMM ceases trading of an options class, that options class will be reallocated by the Exchange. An Alternative PMM will not have any transferable rights in options classes to which it is appointed nor will it have any PMM voting rights. 2. Statutory Basis The basis under the Securities Exchange Act of 1934 (‘‘Exchange Act’’) for this proposed rule change is the requirement under Section 6(b)(5) that an exchange have rules that are designed to promote just and equitable principles of trade, and to remove impediments to and perfect the mechanism for a free and open market and a national market system, and in PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 76079 general, to protect investors and the public interest. In particular, the proposed rule change will allow the Exchange to allocate more new products and continue listing existing products for the benefit of both investors and the Exchange. Further, the Exchange believes that Alternative PMMs will make ISE a more competitive market. 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 Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve such proposed rule change; or (B) Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–ISE–2008–90 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. E:\FR\FM\15DEN1.SGM 15DEN1 76080 Federal Register / Vol. 73, No. 241 / Monday, December 15, 2008 / Notices All submissions should refer to File Number SR–ISE–2008–90. 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, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the ISE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–ISE–2008–90 and should be submitted on or before January 5, 2009. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.4 Florence E. Harmon, Acting Secretary. [FR Doc. E8–29555 Filed 12–12–08; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–59066; File No. SR–ISE– 2008–78] Self-Regulatory Organizations; International Securities Exchange, LLC; Order Approving Proposed Rule Change Relating to Quoting Obligations for Competitive Market Makers pwalker on PROD1PC71 with NOTICES December 8, 2008. I. Introduction On October 21, 2008, the International Securities Exchange, LLC (‘‘ISE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 4 17 CFR 200.30–3(a)(12). VerDate Aug<31>2005 20:00 Dec 12, 2008 Jkt 217001 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 a proposed rule change relating to the Exchange’s quoting obligations for Competitive Market Makers (‘‘CMMs’’). The proposed rule change was published for comment in the Federal Register on November 3, 2008.3 The Commission received no comments on the proposal. This order approves the proposed rule change. II. Description of the Proposal The Exchange proposes to amend ISE Rules 713, 804 and 805 to change the quoting obligation for the Exchange’s CMMs. ISE currently requires CMMs to participate in the opening and maintain continuous quotations in all of the series of at least 60 per cent of the options classes in the bin or 60 classes, whichever is less. In addition, if a CMM chooses to quote any series of an options class above and beyond this minimum requirement, it must then maintain continuous quotations in all of the series of that class throughout that trading day. In September 2007, the Exchange initiated a pilot to reduce the quoting obligations for CMMs in 20 options classes.4 Under the Pilot, CMMs were required to maintain quotations in only 60 per cent of the series of an options class overlying the pilot program securities. The Pilot recently expired and the Exchange now proposes to change the quoting requirements for CMMs on a permanent basis. The Exchange does not believe that the reduced quoting obligations adopted as part of the Pilot have had any negative effect on the quality of its markets.5 Therefore, ISE proposes to adopt the 60 per cent standard for all options series on a permanent basis, except for CMMs that receive preferenced order flow. The Exchange proposes that a CMM will be required to maintain continuous quotations in at least 90% of the series of any option class in which it receives preferenced orders. The Exchange also proposes to lower the minimum number of options classes that a CMM is required to quote from 60 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 58861 (October 27, 2008), 73 FR 65432 (the ‘‘Notice’’). 4 See Securities Exchange Act Release No. 56444 (September 14, 2007), 72 FR 54089 (September 21, 2007) (Order Granting Approval of SR–ISE–2007–45 Relating to a Quote Mitigation Plan for Competitive Market Makers) (the ‘‘Pilot’’). 5 According to the Exchange, in practice, market makers simply widen their quotations when they do not want to trade in a particular series, so requiring them to maintain continuous quotations in all series merely increases capacity requirements for the market makers. 2 17 PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 to 40. The Exchange believes that lowering the requirement will attract additional market making participants on the ISE. Finally, the Exchange proposes to amend Rule 805 (Market Maker Orders) regarding the percentage of volume a CMM may execute in options to which it is not appointed. Specifically, Rule 805 currently provides that a CMM may execute up to 25% of its volume in options classes to which it is not appointed. Because the Exchange is lowering the number of appointed classes in which a CMM is required to quote, the Exchange believes it is appropriate to base the 25% allowance on volume that is executed while a CMM is actually fulfilling its market maker quotation obligations. III. Discussion and Commission Findings After careful review, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.6 In particular, the Commission finds that the proposal is consistent with Section 6(b)(5) of the Act,7 which requires that an exchange have rules designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. The Commission believes that the proposed rule change, which is intended to reduce the number of options quotations required to be submitted without adversely affecting the quality of the Exchange’s markets, is consistent with the Act. The Commission notes that the Exchange has operated a one-year Pilot program that reduced the quoting obligations for CMMs and during the Pilot period the Exchange did not observe any adverse effect on its market.8 The Commission believes it is appropriate to adopt the modified quotation obligations for CMMs on a permanent basis. In addition, the Commission believes that it is appropriate to reduce the quoting obligations of a CMM because the percentage of volume a CMM may 6 In approving this proposed rule change, the Commission notes that it has considered the proposed rule’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 7 15 U.S.C. 78f(b)(5). 8 The Commission notes that it has already approved internal quote mitigation strategies on other exchanges that relieve some market makers of the obligation to quote every series of every class to which they are appointed. See Phlx Rule 1014(b)(ii)(D)(1) and Amex Rule 994(c)(iv). E:\FR\FM\15DEN1.SGM 15DEN1

Agencies

[Federal Register Volume 73, Number 241 (Monday, December 15, 2008)]
[Notices]
[Pages 76078-76080]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-29555]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59053; File No. SR-ISE-2008-90]


Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing of Proposed Rule Change Relating to Alternative 
Primary Market Makers

December 4, 2008.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on November 21, 2008, the International Securities Exchange, LLC 
(the ``Exchange'' or the ``ISE'') filed with the Securities and 
Exchange Commission the proposed rule change as described in Items I, 
II, and III below, which items have been prepared by the self-
regulatory organization. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

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

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

    The ISE proposes to amend Rule 802 to provide for an Alternative 
Primary Market Maker. The text of the proposed rule change is as 
follows, with additions italicized: 

Rule 802. Appointment of Market Makers

    (a) No change.
    (b) (1) The Board or designated committee will allocate equity 
options classes into groupings (``Groups'' of options) and will make 
appointments to those Groups rather than individual classes, except as 
provided in paragraph (f) and Supplementary Material .02 below. Absent 
an exemption by the Exchange, an appointment of a market maker shall be 
limited to the options classes trading in no more than one Group for 
each Membership held by the market maker.
    (2) No change.
    (c)-(f) No change.
Supplementary Material to Rule 802
    .01 No change.
    .02 A Member that is approved to act in the capacity of a 
Competitive Market Maker with respect to one or more CMM Rights may 
voluntarily be appointed to act as an ``Alternative Primary Market 
Maker,'' so long as the Exchange has determined that such Member has 
the appropriate systems and procedures in place to undertake the 
responsibilities of a Primary Market Maker.
    (a) The Exchange may appoint an Alternative Primary Market Maker to 
an options class only in the event that no Primary Market Makers or 
Second Market Primary Market Makers seek allocation of the security.
    (b) If no Primary Market Makers or Second Market Primary Market 
Makers seek allocation of an options class, all eligible Competitive 
Market Makers will be given notice and an opportunity to seek 
allocation of the security as an Alternative Primary Market Maker. Such 
allocations will be made by the Allocation Committee according to the 
guidelines contained in Rule 802.
    (c) An Alternative Primary Market Maker shall have all of the 
responsibilities and privileges of a Primary Market Maker under the 
Rules with respect to all appointed options classes.
    (d) Options classes allocated to Alternative Primary Market Makers 
may be traded in the Second Market as provided in Chapter 9 of the 
Rules. With respect to options classes traded in the First Market, such 
classes will not be allocated to a particular Group under Rule 
802(b)(1), and all Competitive Market Makers shall be eligible for 
appointment to such classes. 
    (e) If an Alternative Primary Market Maker ceases trading of an 
options

[[Page 76079]]

class, the class will be reallocated by the Exchange to a Primary 
Market Maker or another Alternative Primary Market Maker, as 
appropriate.
* * * * *

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 self-regulatory organization 
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 self-regulatory organization 
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 enhance its market by establishing 
Alternative Primary Market Makers (``Alternative PMMs''). Currently, 
when the ISE lists new options classes, it allocates them to one of its 
Primary Market Makers (``PMMs'') under Rule 802. Pursuant to power 
delegated to the Board, an Allocation Committee, which consists of 
representatives of Electronic Access Members, makes allocation 
decisions according to the guidelines contained in Rule 802. Under Rule 
802, allocations are voluntary, and at times ISE is unable to list new 
products because none of the PMMs are interested in trading the class. 
At other times, ISE must delist certain products due to lack of PMM 
interest. Most frequently, this occurs with respect to options on 
stocks that have pending corporate actions, and options products that 
are not listed at any other options exchange. Despite the lack of PMM 
interest, these products may be of interest to other market making 
firms at the Exchange.
    To better enable the Exchange to list and retain these options 
classes, ISE proposes to appoint Competitive Market Makers (``CMMs'') 
that meet certain qualifications as Alternative PMMs when none of the 
PMMs want an allocation.\3\ Specifically, under this proposal, in order 
to be appointed as an Alternative PMM, the Exchange must first 
determine that a CMM has the appropriate systems and procedures in 
place to undertake the responsibilities of a PMM. Further, before an 
Alternative PMM is appointed to an options class, that options class 
will always be offered first to the PMMs or Second Market PMMs (as 
applicable) under the Exchange's regular allocation procedure. Rule 
802(b)(1) currently states that the Board or a designated committee 
will make appointments to ``Groups'' of options rather than individual 
classes. For the purpose of allocating a product, i.e., an individual 
options class, to an Alternative PMM, the Exchange proposes to carve 
out an exception in Rule 802(b)(1) pursuant to which the Allocation 
Committee shall allocate individual options classes to an Alternative 
PMM in accordance with Supplementary Material .02 to Rule 802. The 
options class may be a new listing or a listing that the current PMM or 
Second Market PMM (as applicable) no longer wishes to make a market in.
---------------------------------------------------------------------------

    \3\ Only CMMs that own or lease CMM Rights shall be eligible to 
be appointed as an Alternative PMM. That is, Electronic Access 
Members (``EAMs'') acting as market makers in the Second Market will 
not be eligible to be appointed as Alternative PMMs.
---------------------------------------------------------------------------

    Under the proposal, if no PMMs or Second Market PMMs (as 
applicable) want the allocation, then the Alternative PMMs will be 
offered the opportunity to serve as PMM in the options class according 
to ISE's regular allocation procedures. Once appointed to an options 
class, the Alternative PMM will have all of the responsibilities and 
privileges of a PMM under the Rules with respect to all appointed 
options classes. For example, Alternative PMMs will enjoy privileges 
that include, among other things, participation rights and small order 
execution preference while accepting responsibilities that include, 
among other things, the obligation to provide continuous quotations in 
the options class to which the Alternative PMM is appointed, to 
conducting the opening rotation on a daily basis for as long as the 
Alternative PMM is appointed to that options class.
    Finally, if an Alternative PMM ceases trading of an options class, 
that options class will be reallocated by the Exchange. An Alternative 
PMM will not have any transferable rights in options classes to which 
it is appointed nor will it have any PMM voting rights.
2. Statutory Basis
    The basis under the Securities Exchange Act of 1934 (``Exchange 
Act'') for this proposed rule change is the requirement under Section 
6(b)(5) that an exchange have rules that are designed to promote just 
and equitable principles of trade, and to remove impediments to and 
perfect the mechanism for a free and open market and a national market 
system, and in general, to protect investors and the public interest. 
In particular, the proposed rule change will allow the Exchange to 
allocate more new products and continue listing existing products for 
the benefit of both investors and the Exchange. Further, the Exchange 
believes that Alternative PMMs will make ISE a more competitive market.

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

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

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-ISE-2008-90 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.


[[Page 76080]]


All submissions should refer to File Number SR-ISE-2008-90. 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, 100 F Street, NE., 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the ISE. All comments 
received will be posted without change; the Commission does not edit 
personal identifying information from submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File Number SR-ISE-2008-90 and should be 
submitted on or before January 5, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\4\
---------------------------------------------------------------------------

    \4\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-29555 Filed 12-12-08; 8:45 am]
BILLING CODE 8011-01-P