Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Adopt a Fee Credit, 14233-14234 [2010-6513]

Download as PDF Federal Register / Vol. 75, No. 56 / Wednesday, March 24, 2010 / Notices 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– 2010–027 and should be submitted on or before April 14, 2010. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.26 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–6514 Filed 3–23–10; 8:45 am] SECURITIES AND EXCHANGE COMMISSION [Release No. 34–61731; File No. SR–ISE– 2010–18] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Adopt a Fee Credit March 18, 2010. 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 1, 2010, 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. srobinson on DSKHWCL6B1PROD with NOTICES I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The ISE is proposing to amend its Schedule of Fees by adopting a per contract fee credit related to the execution on ISE of customer orders exposed to members before those orders are sent out for execution on another exchange through the intermarket linkage. The text of the proposed rule change is available on the Exchange’s Web site (https://www.ise.com), at the principal office of the Exchange, and at CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 16:24 Mar 23, 2010 1. Purpose Before a Primary Market Maker (‘‘PMM’’) sends a customer order to another exchange for execution when ISE is not at the national best bid or offer (‘‘NBBO’’), the Exchange exposes these customer orders to all its members to give them an opportunity to match the NBBO. This exposure is intended to allow ISE to retain more order flow by giving these customer orders additional opportunity to be executed at the NBBO at ISE, which also reduces PMM costs by reducing the number of orders they must send to other exchanges on behalf of customer orders. Specifically, before a PMM sends an order on behalf of a customer, the customer order is exposed at the NBBO price for a period established by the Exchange not to exceed one second. During this exposure period, Exchange members may enter responses up to the size of the order being exposed in the regular trading increment applicable to the option. The Exchange currently has fee waivers in place for members who step up and match or improve the NBBO during the exposure period.3 If at the end of the exposure period, the order is executable at the then-current NBBO and ISE is not at the then-current NBBO, the order is executed against responses that equal or better the thencurrent NBBO. The exposure period is terminated if the exposed order becomes executable on the ISE at the prevailing NBBO or if the Exchange receives an unrelated order that could trade against the exposed order at the prevailing NBBO price. If, after an order is 3 See Exchange Act Release Nos. 58164 (July 15, 2008), 73 FR 42638 (July 22, 2008); 58216 (July 23, 2008), 73 FR 44302 (July 30, 2008). 1 15 VerDate Nov<24>2008 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 BILLING CODE 8011–01–P 26 17 the Commission’s Public Reference Room. Jkt 220001 PO 00000 Frm 00111 Fmt 4703 Sfmt 4703 14233 exposed, the order is not executed in full on the Exchange at the then-current NBBO or better, and it is marketable against the then-current NBBO, the PMM sends an order on the customer’s behalf for the balance of the order as provided in Rule 803(c)(2)(ii). If the balance of the order is not marketable against the then-current NBBO, it is placed on the ISE book. All customer orders, including professional customer orders, receive trade through protection under the ISE’s rules.4 Therefore, all customer orders are exposed when ISE is not at the best bid or offer. Members, however, do not know whether an order being exposed is for a Priority Customer 5 or a professional customer. Members have a natural incentive to step up to trade against Priority Customers as they view this as providing a service to retail customers. Members do not have a natural incentive to trade against professional customers who they view as their competitors. Thus, to encourage members to participate in the flash auction and thereby keep trades at the Exchange, ISE proposes to adopt a fee credit. Specifically, ISE proposes to adopt a $0.20 per contract fee credit for members who execute a transaction as a response to a Professional Order 6 in the Exchange’s flash auction. 2. Basis The basis under the Securities Exchange Act of 1934 (the ‘‘Exchange Act’’) for this proposed rule change is the requirement under Section 6(b)(4) that an exchange have an equitable allocation of reasonable dues, fees and other charges among its members and other persons using its facilities. In particular, the proposed rule change will allow ISE to retain more order flow by giving these customer orders additional opportunity to be executed ISE at the NBBO or better and will also reduce PMM costs by reducing the number of orders they must send to other exchanges for execution. 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. 4 See ISE Rule 1902. Priority Customer is defined in ISE Rule 100(a)(37A) as a person or entity that is not a broker or dealer in securities, and does not place more than 390 orders in listed options per day on average during a calendar month for its own beneficial account(s). 6 A Professional Order is defined in ISE Rule 100(a)(37C) as an order that is for the account of a person or entity that is not a Priority Customer. 5A E:\FR\FM\24MRN1.SGM 24MRN1 14234 Federal Register / Vol. 75, No. 56 / Wednesday, March 24, 2010 / Notices 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 The foregoing rule change has become effective pursuant to Section 19(b)(3) of the Act 7 and Rule 19b–4(f)(2) 8 thereunder. At any time within 60 days of the filing of such 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: srobinson on DSKHWCL6B1PROD 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 No. SR–ISE–2010–18 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 No. SR–ISE–2010–18. 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,9 all subsequent amendments, all written statements U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(2). 9 The text of the proposed rule change is available on the Commission’s Web site at https:// www.sec.gov. 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 Web site viewing and printing 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 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 No. SR–ISE–2010–18 and should be submitted on or before April 14, 2010. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–6513 Filed 3–23–10; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–61726; File No. SR– NYSEAMEX–2010–21] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NYSE Amex LLC Relating to Cabinet Trades March 17, 2010. 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 2, 2010, NYSE Amex LLC (‘‘NYSE Amex’’ or the ‘‘Exchange’’) 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 Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 7 15 8 17 VerDate Nov<24>2008 16:24 Mar 23, 2010 Jkt 220001 10 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00112 Fmt 4703 Sfmt 4703 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to adopt Commentary .01 to Rule 968NY, Cabinet Trades, to permit transactions to take place at a price that is below $1 per option contract. The text of the proposed rule change is attached as Exhibit 5 to the 19b–4 form. A copy of this filing is available on the Exchange’s Web site at https://www.nyse.com, at the Exchange’s principal office 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 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 the Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of this filing is to allow accommodation transactions (‘‘Cabinet Trades’’) to take place at a price that is below $1 per option contract. The Exchange proposes to adopt a rule based on CBOE Rule 6.54, Interpretations and Policies .03.3 Cabinet trading is generally conducted in accordance with the Exchange Rules, except as provided in Exchange Rule 968NY Cabinet Trades (Accommodation Transactions), which sets forth specific procedures for engaging in cabinet trades. Rule 968NY currently provides for cabinet transactions to occur via open outcry at a cabinet price of a $1 per option contract in any options series open for trading in the Exchange, except that the Rule is not applicable to trading in option classes participating in the Penny Pilot Program. Under the procedures, bids and offers (whether opening or closing a position) at a price of $1 per option contract may be represented in the trading crowd by a Floor Broker or by a Market-Maker or 3 See Securities Exchange Act Release No. 59188 (December 30, 2008), 74 FR 480 (January 6, 2009)(SR–CBOE–2008–133). E:\FR\FM\24MRN1.SGM 24MRN1

Agencies

[Federal Register Volume 75, Number 56 (Wednesday, March 24, 2010)]
[Notices]
[Pages 14233-14234]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-6513]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61731; File No. SR-ISE-2010-18]


Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change To Adopt a Fee Credit

March 18, 2010.
    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 1, 2010, 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\ 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 is proposing to amend its Schedule of Fees by adopting a 
per contract fee credit related to the execution on ISE of customer 
orders exposed to members before those orders are sent out for 
execution on another exchange through the intermarket linkage. The text 
of the proposed rule change is available on the Exchange's Web site 
(https://www.ise.com), at the principal office of the Exchange, and at 
the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the 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
    Before a Primary Market Maker (``PMM'') sends a customer order to 
another exchange for execution when ISE is not at the national best bid 
or offer (``NBBO''), the Exchange exposes these customer orders to all 
its members to give them an opportunity to match the NBBO. This 
exposure is intended to allow ISE to retain more order flow by giving 
these customer orders additional opportunity to be executed at the NBBO 
at ISE, which also reduces PMM costs by reducing the number of orders 
they must send to other exchanges on behalf of customer orders.
    Specifically, before a PMM sends an order on behalf of a customer, 
the customer order is exposed at the NBBO price for a period 
established by the Exchange not to exceed one second. During this 
exposure period, Exchange members may enter responses up to the size of 
the order being exposed in the regular trading increment applicable to 
the option. The Exchange currently has fee waivers in place for members 
who step up and match or improve the NBBO during the exposure 
period.\3\ If at the end of the exposure period, the order is 
executable at the then-current NBBO and ISE is not at the then-current 
NBBO, the order is executed against responses that equal or better the 
then-current NBBO. The exposure period is terminated if the exposed 
order becomes executable on the ISE at the prevailing NBBO or if the 
Exchange receives an unrelated order that could trade against the 
exposed order at the prevailing NBBO price. If, after an order is 
exposed, the order is not executed in full on the Exchange at the then-
current NBBO or better, and it is marketable against the then-current 
NBBO, the PMM sends an order on the customer's behalf for the balance 
of the order as provided in Rule 803(c)(2)(ii). If the balance of the 
order is not marketable against the then-current NBBO, it is placed on 
the ISE book.
---------------------------------------------------------------------------

    \3\ See Exchange Act Release Nos. 58164 (July 15, 2008), 73 FR 
42638 (July 22, 2008); 58216 (July 23, 2008), 73 FR 44302 (July 30, 
2008).
---------------------------------------------------------------------------

    All customer orders, including professional customer orders, 
receive trade through protection under the ISE's rules.\4\ Therefore, 
all customer orders are exposed when ISE is not at the best bid or 
offer. Members, however, do not know whether an order being exposed is 
for a Priority Customer \5\ or a professional customer. Members have a 
natural incentive to step up to trade against Priority Customers as 
they view this as providing a service to retail customers. Members do 
not have a natural incentive to trade against professional customers 
who they view as their competitors. Thus, to encourage members to 
participate in the flash auction and thereby keep trades at the 
Exchange, ISE proposes to adopt a fee credit. Specifically, ISE 
proposes to adopt a $0.20 per contract fee credit for members who 
execute a transaction as a response to a Professional Order \6\ in the 
Exchange's flash auction.
---------------------------------------------------------------------------

    \4\ See ISE Rule 1902.
    \5\ A Priority Customer is defined in ISE Rule 100(a)(37A) as a 
person or entity that is not a broker or dealer in securities, and 
does not place more than 390 orders in listed options per day on 
average during a calendar month for its own beneficial account(s).
    \6\ A Professional Order is defined in ISE Rule 100(a)(37C) as 
an order that is for the account of a person or entity that is not a 
Priority Customer.
---------------------------------------------------------------------------

 2. Basis
    The basis under the Securities Exchange Act of 1934 (the ``Exchange 
Act'') for this proposed rule change is the requirement under Section 
6(b)(4) that an exchange have an equitable allocation of reasonable 
dues, fees and other charges among its members and other persons using 
its facilities. In particular, the proposed rule change will allow ISE 
to retain more order flow by giving these customer orders additional 
opportunity to be executed ISE at the NBBO or better and will also 
reduce PMM costs by reducing the number of orders they must send to 
other exchanges for execution.

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.

[[Page 14234]]

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3) of the Act \7\ and Rule 19b-4(f)(2) \8\ thereunder. At any 
time within 60 days of the filing of such 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.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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 No. SR-ISE-2010-18 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 No. SR-ISE-2010-18. 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,\9\ 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 Web site viewing and 
printing 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 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 No. SR-ISE-2010-18 and should be 
submitted on or before April 14, 2010.
---------------------------------------------------------------------------

    \9\ The text of the proposed rule change is available on the 
Commission's Web site at https://www.sec.gov.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
Florence E. Harmon,
Deputy Secretary.
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

[FR Doc. 2010-6513 Filed 3-23-10; 8:45 am]
BILLING CODE 8011-01-P
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