Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding Customer Cross Orders, 34063-34065 [E9-16577]
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Federal Register / Vol. 74, No. 133 / Tuesday, July 14, 2009 / Notices
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing proposed rule change is
effective upon filing pursuant to Section
19(b)(3)(A)(ii) of the Act 9 and Rule 19b–
4(f)(2) thereunder.10 At any time within
60 days of the filing of the proposed rule
change, the Commission may summarily
abrogate such rule change if it appears
to the Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
mstockstill on DSKH9S0YB1PROD with NOTICES
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–CHX–2009–08 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–CHX–2009–08. This file
number should be included on the
subject line if e-mail is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro/shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Room, on official business days between
the hours of 10 a.m. and 3 p.m. Copies
of such filing will also be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
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–CHX–2009–
08 and should be submitted on or before
August 4, 2009.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Elizabeth M. Murphy,
Secretary.
[FR Doc. E9–16582 Filed 7–13–09; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–60253; File No. SR–ISE–
2009–34]
Self-Regulatory Organizations;
International Securities Exchange,
LLC; Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change Regarding Customer Cross
Orders
July 7, 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 June 24,
2009, International Securities Exchange,
LLC (‘‘ISE’’ or the ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the selfregulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
11 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b-4.
9 15
U.S.C. 78s(b)(3)(A)(ii).
10 17 CFR 240.19b–4(f)(2).
VerDate Nov<24>2008
17:50 Jul 13, 2009
1 15
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34063
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The ISE proposes to adopt rules
related to the execution of Customer
Cross Orders. The text of the proposed
rule amendment is as follows, with
deletions in [brackets] and additions
italicized:
*
*
*
*
*
Rule 715. Types of Orders
(a) through (h) no change.
(i) Customer Cross Orders. A
Customer Cross Order is comprised of a
Public Customer Order to buy and a
Public Customer Order to sell at the
same price and for the same quantity.
*
*
*
*
*
Rule 717. Limitations on Orders
(a) through (g) no change.
Supplemental Material to Rule 717
.01 Rule 717(d) prevents an Electronic
Access Member from executing agency
orders to increase its economic gain
from trading against the order without
first giving other trading interest on the
Exchange an opportunity to either trade
with the agency order or to trade at the
execution price when the Member was
already bidding or offering on the book.
However, the Exchange recognizes that
it may be possible for an Electronic
Access Member to establish a
relationship with a customer or other
person (including affiliates) to deny
agency orders the opportunity to
interact on the Exchange and to realize
similar economic benefits as it would
achieve by executing agency orders as
principal. It will be a violation of Rule
717(d) for an Electronic Access Member
to be a party to any arrangement
designed to circumvent Rule 717(d) by
providing an opportunity for a customer
or other person (including affiliates) to
regularly execute against agency orders
handled by the Electronic Access
Member immediately upon their entry
into the System.
.02 no change.
*
*
*
*
*
Rule 721. [[Reserved]] Customer Cross
Orders
Customer Cross Orders are
automatically executed upon entry
provided that the execution is at or
between the best bid and offer on the
Exchange and (i) is not at the same
price as a Public Customer Order on the
Exchange’s limit order book and (ii) will
not trade through the NBBO unless the
order is for at least 500 contracts and
has a premium value of at least
$150,000.
E:\FR\FM\14JYN1.SGM
14JYN1
34064
Federal Register / Vol. 74, No. 133 / Tuesday, July 14, 2009 / Notices
(a) Customer Cross Orders will be
automatically canceled if they cannot be
executed.
(b) Customer Cross Orders may only
be entered in the regular trading
increments applicable to the options
class under Rule 710.
(c) Supplemental Material .01 to Rule
717 applies to the entry and execution
of Customer Cross Orders.
*
*
*
*
*
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 those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
mstockstill on DSKH9S0YB1PROD with NOTICES
1. Purpose
Under the Exchange’s options rules,
members are required to expose trading
interest to the market before executing
agency orders as principal or before
executing agency orders against orders
that were solicited from other brokerdealers (i.e., proprietary and solicited
crossing transactions),3 and the
Exchange provides several different
mechanisms that allow members to
execute these types of crossing
transactions in a manner that complies
with the exposure requirement.4
However, the ISE options rules do not
contain any limitations or exposure
requirements regarding the execution of
customer orders against other customer
orders, and the Exchange has developed
a way to enter opposing customer orders
using a single order type (‘‘Customer
Cross Orders’’).
The purpose of this rule proposal is
to adopt rules regarding the entry and
execution of Customer Cross Orders. In
particular, the Exchange proposes to
add a definition of a Customer Cross
3 ISE
Rule 717(d) (Principal Transactions) and
Rule 717(e) (Solicitation Orders).
4 ISE Rule 716 (Block Trades) and Rule 723 (Price
Improvement Mechanism for Crossing
Transactions). See e-mail from Kathy Simmons,
Deputy General Counsel, ISE, to Ira Brandriss,
Special Counsel, and Brian O’Neill, Attorney,
Division of Trading and Markets, Commission,
dated July 1, 2009.
VerDate Nov<24>2008
17:50 Jul 13, 2009
Jkt 217001
Order specifying that a Customer Cross
Order is comprised of a Public Customer
Order to buy and a Public Customer
Order to sell at the same price and for
the same quantity. The Exchange also
proposes to adopt Rule 721 specifying
that Customer Cross Orders are
automatically executed upon entry
provided that the execution will not
take place at the same price as a Public
Customer Order on the limit order book,
nor trade through the national best bid
or offer unless the order is for at least
500 contracts and has a premium value
of at least $150,000.5 The proposed rule
also specifies that Customer Cross
Orders entered at a price that is outside
of the NBBO or at the same price as a
Public Customer Order on the limit
order book will be automatically
canceled, and that Customer Cross
Orders may only be entered in the
regular trading increments applicable to
the options class under Rule 710.
Finally, the proposal specifies that
Supplemental Material .01 to Rule 717,
which prohibits a member from being a
party to any arrangement designed to
circumvent the requirements applicable
to executing agency orders as principal,
applies to the entry and execution of
Customer Cross Orders. In this respect,
the Exchange proposes to amend
Supplemental Material .01 to Rule 717
to specifically reference affiliates of
member firms, which is consistent with
how the Exchange has interpreted the
provision.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the Act
and the rules and regulations
thereunder applicable to a national
securities exchange and, in particular,
the requirements of Section 6(b) of the
Act.6 Specifically, the Exchange
believes the proposed rule change is
consistent with the requirement of
Section 6(b)(5) 7 that an exchange have
rules that are designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, 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
proposal provides for the efficient entry
and execution of Customer Cross Orders
5 Execution of orders of at least 500 contracts and
with a premium value of at least $150,000 will meet
the definition of a Block Trade in ISE Rule 1900(2)
(definitions under the Linkage Rules).
6 15 U.S.C. 78f(b).
7 15 U.S.C. 78f(b)(5).
PO 00000
Frm 00077
Fmt 4703
Sfmt 4703
while also protecting Public Customer
Orders on the book at the same price.
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
regarding this proposed rule change.
The Exchange has not received any
unsolicited written comments from
members or other interested parties.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change: (i) Does not significantly affect
the protection of investors or the public
interest; (ii) does not impose any
significant burden on competition; and
(iii) by its terms, does not become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, if
consistent with the protection of
investors and the public interest, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 8 and Rule 19b–
4(f)(6) thereunder.9
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily abrogate
such rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
15 U.S.C. 78s(b)(3)(A).
17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires the self-regulatory organization
to submit to the Commission written notice of its
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 this requirement.
8
9
E:\FR\FM\14JYN1.SGM
14JYN1
Federal Register / Vol. 74, No. 133 / Tuesday, July 14, 2009 / Notices
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–2009–34 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.
mstockstill on DSKH9S0YB1PROD with NOTICES
All submissions should refer to File
Number SR–ISE–2009–34. This file
number should be included on the
subject line if e-mail is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Room on official business days between
the hours of 10 a.m. and 3 p.m. Copies
of such filing 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–ISE–
2009–34 and should be submitted on or
before August 4, 2009.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Elizabeth M. Murphy,
Secretary.
[FR Doc. E9–16577 Filed 7–13–09; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–60255; File No. SR–NYSE–
2009–58]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Order Granting Accelerated
Approval of Proposed Rule Change to
Amend the Scope of the Exchange’s
Prior Approval to Receive Inbound
Routes from Archipelago Securities
LLC (‘‘ArcaSec’’), an Affiliated Member
July 7, 2009.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on June 23,
2009, the New York Stock Exchange
LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been substantially prepared by the
Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons, and is
approving the proposal on an
accelerated basis.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
scope of the Exchange’s prior approval
to receive inbound routes of PO Plus
Orders from Archipelago Securities LLC
(‘‘ArcaSec’’), an NYSE affiliated
member. The text of the proposed rule
change is available at the Exchange, the
Commission’s Public Reference Room,
and https://www.nyse.com.
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 those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in Sections A, B, and C below,
of the most significant parts of such
statements.
1 15
10 17
CFR 200.30–3(a)(12).
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17:50 Jul 13, 2009
2 17
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PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00078
Fmt 4703
Sfmt 4703
34065
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
ArcaSec is the approved outbound
order routing facility of the NYSE,
NYSE Arca Inc. (‘‘NYSE Arca’’) and
NYSE Amex LLC.3 In this context, the
Exchange has been previously
authorized, on a pilot basis, to receive
inbound PO Plus Orders from ArcaSec,
acting in its capacity as the outbound
order routing facility for NYSE Arca.4
The Exchange hereby proposes that, in
addition to PO Plus Orders, the
Commission authorize the NYSE to
receive all NYSE Arca order types
approved or implemented on or after the
date of approval of this proposal. The
Exchange does not propose any further
changes to its authorization to receive
inbound routes from ArcaSec or to the
term of the pilot period. All existing
conditions currently in place with
respect to ArcaSec routing orders to the
NYSE, in its capacity as an outbound
order routing facility for NYSE Arca,
will continue to apply. The Exchange
believes that this proposal, if approved,
will authorize the Exchange to receive
any NYSE Arca order types approved
subsequent to the approval of this
proposal and going forward through the
end of the pilot period.
2. Statutory Basis
The proposed rule change is
consistent with Section 6(b) 5 of the
Securities Exchange Act of 1934 (the
‘‘Act’’), in general, and furthers the
objectives of Section 6(b)(5),6 in
particular, in that it is designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, to foster
3 See Securities Exchange Act Release No. 52497
(September 22, 2005), 70 FR 56949 (September 29,
2005) (SR–PCX–2005–90); see also Securities
Exchange Act Release No. 44983 (October 25, 2001),
66 FR 55225 (November 1, 2001) (SR–PCX–00–25);
see also Securities Exchange Act Release No. 58681
(September 29, 2008), 73 FR 58285 (October 6,
2008) (order approving NYSEArca–2008–90). See
Securities Exchange Act Release No. 55590 (April
5, 2007), 72 FR 18707 (April 13, 2007) (notice of
immediate effectiveness of SR–NYSE–2007–29); see
also Securities Exchange Act Release No. 58680
(September 29, 2008), 73 FR 58283 (October 6,
2008) (order approving SR–NYSE–2008–76). See
Securities Exchange Act Release No. 59009
(November 24, 2008), 73 FR 73363 (December 2,
2008) (SR–NYSEALTR–2008–07).
4 See Securities Exchange Act Release No. 58680
(September 29, 2008), 73 FR 58283 (October 6,
2008) (order approving SR–NYSE–2008–76).
ArcaSec had been previously authorized to deliver
inbound routes to the NYSE, acting in its capacity
as an order routing facility for NYSE Arca. See
supra note 3.
5 15 U.S.C. 78f(b).
6 15 U.S.C. 78f(b)(5).
E:\FR\FM\14JYN1.SGM
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]]>Agencies
[Federal Register Volume 74, Number 133 (Tuesday, July 14, 2009)]
[Notices]
[Pages 34063-34065]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-16577]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-60253; File No. SR-ISE-2009-34]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change Regarding Customer Cross Orders
July 7, 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 June 24, 2009, International Securities Exchange, LLC (``ISE''
or the ``Exchange'') filed with the Securities and Exchange Commission
(the ``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\ 15 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 adopt rules related to the execution of
Customer Cross Orders. The text of the proposed rule amendment is as
follows, with deletions in [brackets] and additions italicized:
* * * * *
Rule 715. Types of Orders
(a) through (h) no change.
(i) Customer Cross Orders. A Customer Cross Order is comprised of a
Public Customer Order to buy and a Public Customer Order to sell at the
same price and for the same quantity.
* * * * *
Rule 717. Limitations on Orders
(a) through (g) no change.
Supplemental Material to Rule 717
.01 Rule 717(d) prevents an Electronic Access Member from executing
agency orders to increase its economic gain from trading against the
order without first giving other trading interest on the Exchange an
opportunity to either trade with the agency order or to trade at the
execution price when the Member was already bidding or offering on the
book. However, the Exchange recognizes that it may be possible for an
Electronic Access Member to establish a relationship with a customer or
other person (including affiliates) to deny agency orders the
opportunity to interact on the Exchange and to realize similar economic
benefits as it would achieve by executing agency orders as principal.
It will be a violation of Rule 717(d) for an Electronic Access Member
to be a party to any arrangement designed to circumvent Rule 717(d) by
providing an opportunity for a customer or other person (including
affiliates) to regularly execute against agency orders handled by the
Electronic Access Member immediately upon their entry into the System.
.02 no change.
* * * * *
Rule 721. [[Reserved]] Customer Cross Orders
Customer Cross Orders are automatically executed upon entry
provided that the execution is at or between the best bid and offer on
the Exchange and (i) is not at the same price as a Public Customer
Order on the Exchange's limit order book and (ii) will not trade
through the NBBO unless the order is for at least 500 contracts and has
a premium value of at least $150,000.
[[Page 34064]]
(a) Customer Cross Orders will be automatically canceled if they
cannot be executed.
(b) Customer Cross Orders may only be entered in the regular
trading increments applicable to the options class under Rule 710.
(c) Supplemental Material .01 to Rule 717 applies to the entry and
execution of Customer Cross Orders.
* * * * *
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 those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Under the Exchange's options rules, members are required to expose
trading interest to the market before executing agency orders as
principal or before executing agency orders against orders that were
solicited from other broker-dealers (i.e., proprietary and solicited
crossing transactions),\3\ and the Exchange provides several different
mechanisms that allow members to execute these types of crossing
transactions in a manner that complies with the exposure
requirement.\4\ However, the ISE options rules do not contain any
limitations or exposure requirements regarding the execution of
customer orders against other customer orders, and the Exchange has
developed a way to enter opposing customer orders using a single order
type (``Customer Cross Orders'').
---------------------------------------------------------------------------
\3\ ISE Rule 717(d) (Principal Transactions) and Rule 717(e)
(Solicitation Orders).
\4\ ISE Rule 716 (Block Trades) and Rule 723 (Price Improvement
Mechanism for Crossing Transactions). See e-mail from Kathy Simmons,
Deputy General Counsel, ISE, to Ira Brandriss, Special Counsel, and
Brian O'Neill, Attorney, Division of Trading and Markets,
Commission, dated July 1, 2009.
---------------------------------------------------------------------------
The purpose of this rule proposal is to adopt rules regarding the
entry and execution of Customer Cross Orders. In particular, the
Exchange proposes to add a definition of a Customer Cross Order
specifying that a Customer Cross Order is comprised of a Public
Customer Order to buy and a Public Customer Order to sell at the same
price and for the same quantity. The Exchange also proposes to adopt
Rule 721 specifying that Customer Cross Orders are automatically
executed upon entry provided that the execution will not take place at
the same price as a Public Customer Order on the limit order book, nor
trade through the national best bid or offer unless the order is for at
least 500 contracts and has a premium value of at least $150,000.\5\
The proposed rule also specifies that Customer Cross Orders entered at
a price that is outside of the NBBO or at the same price as a Public
Customer Order on the limit order book will be automatically canceled,
and that Customer Cross Orders may only be entered in the regular
trading increments applicable to the options class under Rule 710.
Finally, the proposal specifies that Supplemental Material .01 to Rule
717, which prohibits a member from being a party to any arrangement
designed to circumvent the requirements applicable to executing agency
orders as principal, applies to the entry and execution of Customer
Cross Orders. In this respect, the Exchange proposes to amend
Supplemental Material .01 to Rule 717 to specifically reference
affiliates of member firms, which is consistent with how the Exchange
has interpreted the provision.
---------------------------------------------------------------------------
\5\ Execution of orders of at least 500 contracts and with a
premium value of at least $150,000 will meet the definition of a
Block Trade in ISE Rule 1900(2) (definitions under the Linkage
Rules).
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to a
national securities exchange and, in particular, the requirements of
Section 6(b) of the Act.\6\ Specifically, the Exchange believes the
proposed rule change is consistent with the requirement of Section
6(b)(5) \7\ that an exchange have rules that are designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, 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 proposal provides for the efficient entry and execution
of Customer Cross Orders while also protecting Public Customer Orders
on the book at the same price.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
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 regarding this proposed rule change. The Exchange has not
received any unsolicited written comments from members or other
interested parties.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change: (i) Does not
significantly affect the protection of investors or the public
interest; (ii) does not impose any significant burden on competition;
and (iii) by its terms, does not become operative for 30 days from the
date on which it was filed, or such shorter time as the Commission may
designate, if consistent with the protection of investors and the
public interest, it has become effective pursuant to Section
19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\
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\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 self-regulatory organization to submit to the
Commission written notice of its 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 this requirement.
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
[[Page 34065]]
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-2009-34 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-2009-34. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room on official business
days between the hours of 10 a.m. and 3 p.m. Copies of such filing 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-ISE-
2009-34 and should be submitted on or before August 4, 2009.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. E9-16577 Filed 7-13-09; 8:45 am]
BILLING CODE 8010-01-P
