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
<![CDATA[
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 (https://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 (https://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 (https://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 (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Room, 100 F Street, NE., Washington,
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m.
Copies of the filing also will be available
for inspection and copying at the
principal office of the 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]
-----------------------------------------------------------------------
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 (https://
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 (https://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the 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
