Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to an Extension of the Penny Pilot Program, 15018-15019 [E9-7352]
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Federal Register / Vol. 74, No. 62 / Thursday, April 2, 2009 / Notices
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–CBOE–2009–021 on the
subject line.
mstockstill on PROD1PC66 with NOTICES
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–CBOE–2009–021. This file
number should be included on the
subject line if e-mail is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Room, 100 F Street, NE., Washington,
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m.
Copies of such filing also will be
available for inspection and copying at
the principal office of the Exchange. All
comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to File No.
SR–CBOE–2009–021 and should be
submitted on or before April 23, 2009.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–7351 Filed 4–1–09; 8:45 am]
BILLING CODE
Self-Regulatory Organizations;
International Securities Exchange,
LLC; Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change Relating to an Extension of the
Penny Pilot Program
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 March 24,
2009, the International Securities
Exchange, LLC (the ‘‘Exchange’’ or the
‘‘ISE’’) filed with the Securities and
Exchange Commission (the
‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the self-regulatory organization. The
Exchange filed the proposal as a ‘‘noncontroversial’’ proposed rule change
pursuant to Section 19(b)(3)(A)(iii) of
the Act 3 and Rule 19b–4(f)(6)
thereunder.4 The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The ISE is proposing to extend, until
July 3, 2009, a pilot program to quote
and to trade certain options in pennies.
The text of the proposed rule change is
available at 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
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.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
2 17
CFR 200.30–3(a)(12).
VerDate Nov<24>2008
[Release No. 34–59633; File No. SR–ISE–
2009–14]
March 26, 2009.
Paper Comments
12 17
SECURITIES AND EXCHANGE
COMMISSION
17:43 Apr 01, 2009
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A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
On January 24, 2007, the Commission
approved ISE’s rule filing, SR–ISE–
2006–62, which permits 13 option
classes to quote in penny increments in
connection with the implementation of
an industry wide, six month pilot
program (the ‘‘Penny Pilot Program’’).5
Under the Penny Pilot Program, the
minimum price variation for all 13
option classes, except for the Nasdaq100 Index Tracking Stock (‘‘QQQQ’’), is
$0.01 for all quotations in option series
that are quoted at less than $3 per
contract and $0.05 for all quotations in
options series that are quoted at $3 per
contract or greater. The QQQQs are
quoted in $0.01 increments for all
options series.
Subsequent ISE rule filings initiated a
two-phase expansion of the Penny Pilot
Program. SR–ISE–2007–74 initiated
Phase I of the expansion and added 22
option classes to the Penny Pilot
Program that are among the most
actively traded, multiply-listed option
classes based on national average daily
volume, and together with the original
13 option classes, represent
approximately 35% of the total industry
volume.6
SR–ISE–2008–27 implemented Phase
II of the expansion, which added an
additional 28 option classes to the
Penny Pilot Program.7 The total number
of option classes in the Penny Pilot
Program currently stands at 63. A
Regulatory Information Circular,
attached as Exhibit 5 to this proposed
rule change, identifies all 63 underlying
securities. Phase II of the Penny Pilot
Program is set to expire on March 27,
2009. ISE now proposes to extend the
current Penny Pilot Program until July
3, 2009.
ISE believes extending the Penny
Pilot Program as proposed by this rule
filing will allow the Exchange and the
Commission additional time to continue
its analysis of the impact of quoting and
trading option classes in penny
increments and the impact of the Penny
5 See Securities Exchange Act Release No. 55161
(January 24, 2007), 72 FR 4754 (February 1, 2007)
(the ‘‘Initial Filing’’). The Penny Pilot Program was
subsequently extended for an additional two month
period, until September 27, 2007. See Securities
Exchange Act Release No. 56151 (July 26, 2007), 72
FR 42452 (August 2, 2007).
6 See Securities Exchange Act Release No. 56564
(September 27, 2007), 72 FR 56412 (October 3,
2007).
7 See Securities Exchange Act Release No. 57508
(March 17, 2008), 73 FR 15243 (March 21, 2008).
E:\FR\FM\02APN1.SGM
02APN1
Federal Register / Vol. 74, No. 62 / Thursday, April 2, 2009 / Notices
Pilot Program on liquidity, market
structure and quote traffic.
As proposed in the Initial Filing, ISE
represents that options trading in penny
increments will not be eligible for split
pricing, as permitted under ISE Rule
716. In the Initial Filing, the Exchange
also made references to quote mitigation
strategies that are currently in place and
proposed to apply them to the Penny
Pilot Program. The Exchange proposes
to continue applying those quote
mitigation strategies during the
extension of the Penny Pilot Program, as
contemplated by this rule filing.
Specifically, as proposed in Rule 804,
ISE will continue to utilize a holdback
timer that delays quotation updates for
up to, but not longer than, one second.
The Exchange’s monitoring and
delisting policies, as proposed in the
Initial Filing, shall also continue to
apply.
Finally, ISE intends to submit an
additional report to the Commission
analyzing the Penny Pilot Program for
the following time period: February 1,
2009–April 30, 2009. The Exchange
anticipates its report will analyze the
impact of penny pricing on market
quality and options system capacity.
The Exchange will submit the report
within one month following the end of
the period being analyzed.
2. Statutory Basis
The basis under the Securities
Exchange Act of 1934 (the ‘‘Exchange
Act’’) for this proposed rule change is
found in Section 6(b)(5), in that the
proposed rule change is designed to
promote just and equitable principles of
trade, remove impediments to and
perfect the mechanisms of 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 continue the
Penny Pilot Program uninterrupted.
mstockstill on PROD1PC66 with NOTICES
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
Exchange 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 written
comments from members or other
interested parties.
VerDate Nov<24>2008
17:43 Apr 01, 2009
Jkt 217001
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing rule 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, the proposed rule
change has become effective pursuant to
Section 19(b)(3)(A) of the Act 8 and Rule
19b–4(f)(6) thereunder.9
The Exchange has requested that the
Commission waive the 30-day operative
delay so that the proposed rule change
may become operative upon filing with
the Commission pursuant to Section
19(b)(3)(A) of the Act 10 and Rule 19b–
4(f)(6) 11 thereunder. The Commission
believes that waiving the 30-day
operative delay is consistent with the
protection of investors and the public
interest because such waiver will allow
the Penny Pilot Program to continue
without interruption through July 3,
2009.12 Accordingly, the Commission
designates the proposed rule change
operative upon filing with the
Commission.
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 Exchange 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:
8 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires the Exchange to give the
Commission written notice of the Exchange’s intent
to file the proposed rule change along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied the pre-filing requirement.
10 15 U.S.C. 78s(b)(3)(A).
11 17 CFR 240.19b–4(f)(6).
12 For the purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78(c)(f).
9 17
PO 00000
Frm 00068
Fmt 4703
Sfmt 4703
15019
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–2009–14 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington DC
20549–1090.
All submissions should refer to File
Number SR–ISE–2009–14. This file
number should be included on the
subject line if e-mail is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Room, 100 F Street, NE., Washington,
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m.
Copies of such filing also will be
available for inspection and copying at
the principal office of the Exchange. All
comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to File No.
SR–ISE–2009–14 and should be
submitted on or before April 23, 2009.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–7352 Filed 4–1–09; 8:45 am]
BILLING CODE 8010–01–P
13 17
E:\FR\FM\02APN1.SGM
CFR 200.30–3(a)(12).
02APN1
]]>Agencies
[Federal Register Volume 74, Number 62 (Thursday, April 2, 2009)]
[Notices]
[Pages 15018-15019]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-7352]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-59633; File No. SR-ISE-2009-14]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change Relating to an Extension of the Penny Pilot Program
March 26, 2009.
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 March 24, 2009, the International Securities Exchange, LLC (the
``Exchange'' or the ``ISE'') filed with the Securities and Exchange
Commission (the ``Commission'') the proposed rule change as described
in Items I and II below, which Items have been prepared by the self-
regulatory organization. The Exchange filed the proposal as a ``non-
controversial'' proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The ISE is proposing to extend, until July 3, 2009, a pilot program
to quote and to trade certain options in pennies. The text of the
proposed rule change is available at 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 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
On January 24, 2007, the Commission approved ISE's rule filing, SR-
ISE-2006-62, which permits 13 option classes to quote in penny
increments in connection with the implementation of an industry wide,
six month pilot program (the ``Penny Pilot Program'').\5\ Under the
Penny Pilot Program, the minimum price variation for all 13 option
classes, except for the Nasdaq-100 Index Tracking Stock (``QQQQ''), is
$0.01 for all quotations in option series that are quoted at less than
$3 per contract and $0.05 for all quotations in options series that are
quoted at $3 per contract or greater. The QQQQs are quoted in $0.01
increments for all options series.
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 55161 (January 24,
2007), 72 FR 4754 (February 1, 2007) (the ``Initial Filing''). The
Penny Pilot Program was subsequently extended for an additional two
month period, until September 27, 2007. See Securities Exchange Act
Release No. 56151 (July 26, 2007), 72 FR 42452 (August 2, 2007).
---------------------------------------------------------------------------
Subsequent ISE rule filings initiated a two-phase expansion of the
Penny Pilot Program. SR-ISE-2007-74 initiated Phase I of the expansion
and added 22 option classes to the Penny Pilot Program that are among
the most actively traded, multiply-listed option classes based on
national average daily volume, and together with the original 13 option
classes, represent approximately 35% of the total industry volume.\6\
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release No. 56564 (September 27,
2007), 72 FR 56412 (October 3, 2007).
---------------------------------------------------------------------------
SR-ISE-2008-27 implemented Phase II of the expansion, which added
an additional 28 option classes to the Penny Pilot Program.\7\ The
total number of option classes in the Penny Pilot Program currently
stands at 63. A Regulatory Information Circular, attached as Exhibit 5
to this proposed rule change, identifies all 63 underlying securities.
Phase II of the Penny Pilot Program is set to expire on March 27, 2009.
ISE now proposes to extend the current Penny Pilot Program until July
3, 2009.
---------------------------------------------------------------------------
\7\ See Securities Exchange Act Release No. 57508 (March 17,
2008), 73 FR 15243 (March 21, 2008).
---------------------------------------------------------------------------
ISE believes extending the Penny Pilot Program as proposed by this
rule filing will allow the Exchange and the Commission additional time
to continue its analysis of the impact of quoting and trading option
classes in penny increments and the impact of the Penny
[[Page 15019]]
Pilot Program on liquidity, market structure and quote traffic.
As proposed in the Initial Filing, ISE represents that options
trading in penny increments will not be eligible for split pricing, as
permitted under ISE Rule 716. In the Initial Filing, the Exchange also
made references to quote mitigation strategies that are currently in
place and proposed to apply them to the Penny Pilot Program. The
Exchange proposes to continue applying those quote mitigation
strategies during the extension of the Penny Pilot Program, as
contemplated by this rule filing. Specifically, as proposed in Rule
804, ISE will continue to utilize a holdback timer that delays
quotation updates for up to, but not longer than, one second. The
Exchange's monitoring and delisting policies, as proposed in the
Initial Filing, shall also continue to apply.
Finally, ISE intends to submit an additional report to the
Commission analyzing the Penny Pilot Program for the following time
period: February 1, 2009-April 30, 2009. The Exchange anticipates its
report will analyze the impact of penny pricing on market quality and
options system capacity. The Exchange will submit the report within one
month following the end of the period being analyzed.
2. Statutory Basis
The basis under the Securities Exchange Act of 1934 (the ``Exchange
Act'') for this proposed rule change is found in Section 6(b)(5), in
that the proposed rule change is designed to promote just and equitable
principles of trade, remove impediments to and perfect the mechanisms
of 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 continue the Penny
Pilot Program uninterrupted.
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 Exchange 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 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 rule 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, the proposed rule change has become effective
pursuant to Section 19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(6)
thereunder.\9\
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied the pre-filing requirement.
---------------------------------------------------------------------------
The Exchange has requested that the Commission waive the 30-day
operative delay so that the proposed rule change may become operative
upon filing with the Commission pursuant to Section 19(b)(3)(A) of the
Act \10\ and Rule 19b-4(f)(6) \11\ thereunder. The Commission believes
that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest because such waiver
will allow the Penny Pilot Program to continue without interruption
through July 3, 2009.\12\ Accordingly, the Commission designates the
proposed rule change operative upon filing with the Commission.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6).
\12\ For the purposes only of waiving the 30-day operative
delay, the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78(c)(f).
---------------------------------------------------------------------------
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 Exchange Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-ISE-2009-14 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington DC 20549-1090.
All submissions should refer to File Number SR-ISE-2009-14. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File No. SR-ISE-2009-14 and should be
submitted on or before April 23, 2009.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
---------------------------------------------------------------------------
\13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-7352 Filed 4-1-09; 8:45 am]
BILLING CODE 8010-01-P
