Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Related to Stopped Orders, 25897-25898 [2010-10963]

Download as PDF Federal Register / Vol. 75, No. 89 / Monday, May 10, 2010 / Notices 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. [Release No. 34–62027; File No. SR–ISE– 2010–28] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Related to Stopped Orders May 4, 2010. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Exchange Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on April 28, 2010, International Securities Exchange, LLC (the ‘‘Exchange’’ or the ‘‘ISE’’) filed with the Securities and Exchange Commission (the ‘‘SEC’’ or 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. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to implement the trade-through exception for stopped orders contained in ISE Rule 1901(b)(8). The text of the rule amendment is as follows (additions are in italics): Rule 715. Types of Orders (a) no change. (b) Limit Orders. A limit order is an order to buy or sell a stated number of options contracts at a specified price or better. (1) through (5) no change. (6) Stopped Order. A stopped order is a limit order that meets the requirements of Rule 1901(b)(8). To execute stopped orders, Members must enter them into the Facilitation Mechanism or Solicited Order Mechanism pursuant to Rule 716. (c) through (l) no change. Supplementary Material to Rule 715 .01 no change. * * * * * jlentini on DSKJ8SOYB1PROD with NOTICES 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 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Mar<15>2010 17:18 May 07, 2010 Jkt 220001 and a national market system, and in general, to protect investors and the public interest. In particular, the proposal will provide a means by which members execute orders on the ISE that qualify for the previously approved exception to the trade-through rule. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change SECURITIES AND EXCHANGE COMMISSION 1 15 25897 B. Self-Regulatory Organization’s Statement on Burden on Competition 1. Purpose On August 21, 2009, the Commission approved changes to the Exchange’s rules related to intermarket linkage. These rules provide, among other things, that transactions not be executed at prices that are inferior to the national best bid or offer (the ‘‘trade-through rule’’). ISE Rule 1901 (Order Protection) contains several exceptions to the tradethrough rule, including an exception for stopped orders. A stopped order is defined as an order for which, at the time of receipt of the order, a member had guaranteed an execution at no worse than a specified price, where: (i) The stopped order was for the account of a Customer; (ii) the Customer agreed to the specified price on an order-byorder basis; and (iii) the price of the Trade-Through was, for a stopped buy order, lower than the national Best Bid in the options series at the time of execution, or, for a stopped sell order, higher than the national Best Offer in the options series at the time of execution. In order for members to execute trades that qualify for the trade-through exception for stopped order,3 they must indicate on the order that the order was stopped and enter the order into the Facilitation Mechanism or Solicited Order Mechanism pursuant to Rule 716. While stopped orders will continue to be executed at prices that are at or between the ISE BBO, such orders may receive executions that trade through prices available on other exchanges as permitted by ISE Rule 1901(b)(8). 2. Statutory Basis The basis under the 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 3 The Exchange will surveil for compliance with the terms of the exception. Members must be able to demonstrate compliance with all of the terms of the stopped-order exception. In this respect, the Exchange requests that members indicate the time that the order was stopped on the order ticket. PO 00000 Frm 00069 Fmt 4703 Sfmt 4703 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 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 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 after the date of the filing, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 4 and Rule 19b– 4(f)(6) thereunder.5 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: 4 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, or such shorted time as designated by the Commission. The Exchange provided a copy of this rule filing to the Commission at least five business days prior to the date of this filing. 5 17 E:\FR\FM\10MYN1.SGM 10MYN1 25898 Federal Register / Vol. 75, No. 89 / Monday, May 10, 2010 / 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–2010–28 on the subject line. Paper Comments jlentini on DSKJ8SOYB1PROD 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–ISE–2010–28. 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 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 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–2010–28 and should be submitted on or before June 1, 2010. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.6 Florence E. Harmon, Deputy Secretary. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–62009; File No. SR–Phlx2010–64] Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Rebates for Adding and Fees for Removing Liquidity April 30, 2010. 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 April 26, 2010, NASDAQ OMX PHLX, Inc. (‘‘Phlx’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. Phlx has designated this proposal as one establishing or changing a member due, fee, or other charge imposed under Section 19(b)(3)(A)(ii) of the Act 3 and Rule 19b–4(f)(2) thereunder,4 which renders the proposal effective upon filing with the Commission. 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 Exchange proposes to amend the Exchange’s Fee Schedule to increase the number of options to be included in the Exchange’s current schedule of transaction rebates for adding, and fees for removing, liquidity. While changes to the Fee Schedule pursuant to this proposal are effective upon filing, the Exchange has designated these changes to be operative for transactions settling on or after May 3, 2010. The text of the proposed rule change is available on the Exchange’s Web site at https://nasdaqtrader.com/ micro.aspx?id=PHLXfilings, at the principal office of the Exchange, at the Commission’s Public Reference Room, and on the Commission’s Web site at https://www.sec.gov. [FR Doc. 2010–10963 Filed 5–7–10; 8:45 am] BILLING CODE 8011–01–P 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b–4(f)(2). 2 17 6 17 CFR 200.30–3(a)(12). VerDate Mar<15>2010 17:18 May 07, 2010 Jkt 220001 PO 00000 Frm 00070 Fmt 4703 Sfmt 4703 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 Exchange 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 Exchange 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 increase liquidity and to attract order flow by increasing the number of options to be included in the Exchange’s current schedule of rebates for adding liquidity, and fees for removing liquidity. Specifically, the Exchange proposes to add the following options: Brocade Communications Systems, Inc. (‘‘BRCD’’); International Business Machines Corp., (‘‘IBM’’); Nokia Corp. (‘‘NOK’’); Sirius XM Radio, Inc. (‘‘SIRI’’); and Direxion Daily Small Cap Bear 3X Shares (‘‘TZA’’) collectively (‘‘the options’’). The options would be subject to the rebates for adding and fees for removing liquidity. The Exchange currently assesses a per-contract transaction charge in various select symbols 5 (the ‘‘select Symbols’’) on six different categories of market participants that submit orders and/or quotes that remove, or ‘‘take,’’ liquidity from the Exchange: (i) Specialists, Registered Options Traders (‘‘ROTs’’), Streaming Quote Traders (‘‘SQTs’’) 6 and Remote Streaming Quote 5 The fees and rebates for adding and removing liquidity are applicable to executions in options overlying AA, AAPL, AIG, ALL, AMD, AMR, AMZN, BAC, C, CAT, CSCO, DELL, DIA, DRYS, EK, F, FAS, FAZ, GDX, GE, GLD, GS, INTC, IWM, JPM, LVS, MGM, MSFT, MU, NEM, PALM, PFE, POT, QCOM, QQQQ, RIMM, SBUX, SKF, SLV, SMH, SNDK, SPY, T, UAUA, UNG, USO, UYG, VZ, WYNN, X and XLF (‘‘Symbols’’). 6 An SQT is an Exchange Registered Options Trader (‘‘ROT’’) who has received permission from the Exchange to generate and submit option quotations electronically through an electronic interface with AUTOM via an Exchange approved proprietary electronic quoting device in eligible options to which such SQT is assigned. See Exchange Rule 1014(b)(ii)(A). E:\FR\FM\10MYN1.SGM 10MYN1

Agencies

[Federal Register Volume 75, Number 89 (Monday, May 10, 2010)]
[Notices]
[Pages 25897-25898]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-10963]



[[Page 25897]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62027; File No. SR-ISE-2010-28]


Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change Related to Stopped Orders

May 4, 2010.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Exchange Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is 
hereby given that on April 28, 2010, International Securities Exchange, 
LLC (the ``Exchange'' or the ``ISE'') filed with the Securities and 
Exchange Commission (the ``SEC'' or 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 Exchange proposes to implement the trade-through exception for 
stopped orders contained in ISE Rule 1901(b)(8). The text of the rule 
amendment is as follows (additions are in italics):
Rule 715. Types of Orders
    (a) no change.
    (b) Limit Orders. A limit order is an order to buy or sell a stated 
number of options contracts at a specified price or better.
    (1) through (5) no change.
    (6) Stopped Order. A stopped order is a limit order that meets the 
requirements of Rule 1901(b)(8). To execute stopped orders, Members 
must enter them into the Facilitation Mechanism or Solicited Order 
Mechanism pursuant to Rule 716.
    (c) through (l) no change.
Supplementary Material to Rule 715
    .01 no change.
* * * * *

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 August 21, 2009, the Commission approved changes to the 
Exchange's rules related to intermarket linkage. These rules provide, 
among other things, that transactions not be executed at prices that 
are inferior to the national best bid or offer (the ``trade-through 
rule''). ISE Rule 1901 (Order Protection) contains several exceptions 
to the trade-through rule, including an exception for stopped orders. A 
stopped order is defined as an order for which, at the time of receipt 
of the order, a member had guaranteed an execution at no worse than a 
specified price, where: (i) The stopped order was for the account of a 
Customer; (ii) the Customer agreed to the specified price on an order-
by-order basis; and (iii) the price of the Trade-Through was, for a 
stopped buy order, lower than the national Best Bid in the options 
series at the time of execution, or, for a stopped sell order, higher 
than the national Best Offer in the options series at the time of 
execution.
    In order for members to execute trades that qualify for the trade-
through exception for stopped order,\3\ they must indicate on the order 
that the order was stopped and enter the order into the Facilitation 
Mechanism or Solicited Order Mechanism pursuant to Rule 716. While 
stopped orders will continue to be executed at prices that are at or 
between the ISE BBO, such orders may receive executions that trade 
through prices available on other exchanges as permitted by ISE Rule 
1901(b)(8).
---------------------------------------------------------------------------

    \3\ The Exchange will surveil for compliance with the terms of 
the exception. Members must be able to demonstrate compliance with 
all of the terms of the stopped-order exception. In this respect, 
the Exchange requests that members indicate the time that the order 
was stopped on the order ticket.
---------------------------------------------------------------------------

2. Statutory Basis
    The basis under the 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 proposal will 
provide a means by which members execute orders on the ISE that qualify 
for the previously approved exception to the trade-through rule.

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 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 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 after the date of the filing, or such 
shorter time as the Commission may designate, it has become effective 
pursuant to Section 19(b)(3)(A) of the Act \4\ and Rule 19b-4(f)(6) 
thereunder.\5\
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 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, or such 
shorted time as designated by the Commission. The Exchange provided 
a copy of this rule filing to the Commission at least five business 
days prior to the date of this filing.
---------------------------------------------------------------------------

    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 25898]]

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-2010-28 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-2010-28. 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 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 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-2010-28 and should be 
submitted on or before June 1, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\6\
---------------------------------------------------------------------------

    \6\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-10963 Filed 5-7-10; 8:45 am]
BILLING CODE 8011-01-P
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