Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To List Options on Trust Issued Receipts in $1 Strike Intervals, 38570-38571 [2010-16142]

Download as PDF 38570 Federal Register / Vol. 75, No. 127 / Friday, July 2, 2010 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–62389; File No. SR–ISE– 2010–63] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To List Options on Trust Issued Receipts in $1 Strike Intervals June 28, 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 June 24, 2010, the International Securities Exchange, LLC (the ‘‘Exchange’’ or the ‘‘ISE’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘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. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Rule 504 to allow the Exchange to list options on Trust Issued Receipts in $1 strike price intervals. The text of the proposed rule change is available on the Exchange’s Web site at https:// www.ise.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. emcdonald on DSK2BSOYB1PROD 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 on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The self-regulatory organization has prepared summaries, set forth in sections A, B and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposed rule change is to amend Rule 504 by adding 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Mar<15>2010 18:27 Jul 01, 2010 Jkt 220001 Supplementary Material .07 to Rule 504 to allow the Exchange to list options on the Trust Issued Receipts (‘‘TIRs’’), including Holding Company Depository Receipts (‘‘HOLDRs’’), in $1 or greater strike price intervals, where the strike price is $200 or less and $5 or greater where the strike price is greater than $200.3 Currently, the strike price intervals for options on TIRs are as follows: (1) $2.50 or greater where the strike price is $25.00 or less; (2) $5.00 or greater where the strike price is greater than $25.00; and (3) $10.00 or greater where the strike price is greater than $200.4 The Exchange is seeking to permit $1 strikes for options on TIRs (where the strike price is less than $200) because TIRs have characteristics similar to exchange-traded funds (‘‘ETFs’’). Specifically, TIRs are exchange-listed securities representing beneficial ownership of the specific deposited securities represented by the receipts. They are negotiable receipts issued by a trust representing securities of issuers that have been deposited and held on behalf of the holders of the TIRs. TIRs, which trade in round-lots of 100, and multiples thereof, may be issued after their initial offering through a deposit with the trustee of the required number of shares of common stock of the underlying issuers. This characteristic of TIRs is similar to that of ETFs which also may be created on any business day upon receipt of the requisite securities or other investment assets comprising a creation unit. The trust only issues receipts upon the deposit of the shares of the underlying securities that are represented by a round-lot of 100 receipts. Likewise, the trust will cancel, and an investor may obtain, hold, trade or surrender TIRs in a round-lot and round-lot multiples of 100 receipts. Strike prices for ETF options are permitted in $1 or greater intervals where the strike price is $200 or less and $5 or greater where the strike is greater than $200.5 Accordingly, the Exchange believes that the rationale for permitting $1 strikes for ETF options equally applies to permitting $1 strikes for options on TIRs. The Exchange has analyzed its capacity and represents that it believes the Exchange and the Options Price Reporting Authority have the necessary system capacity to handle the additional traffic associated with the listing and trading of $1 strikes, where the strike price is less than $200, for options on TIRs. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act 6 in general, and furthers the objectives of Section 6(b)(5) of the Act 7 in particular, in that it is designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general to protect investors and the public interest, by allowing the Exchange to list options on TIRs at $1 strike price intervals. The Exchange believes that the marketplace and investors expect options on TIRs to trade in a similar manner to ETF options and this filing would allow the marketplace and investors the ability in trading options on TIRs. The Exchange further believes that investors will be better served if $1 strike price intervals are available for options on TIRs, where the strike price is less than $200. B. Self-Regulatory Organization’s Statement on Burden on Competition The proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not significantly affect the protection of investors or the public interest, does not impose any significant burden on competition, and, 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, it has become effective pursuant to Section 19(b)(3)(A) of the Act 8 and Rule 19b– 4(f)(6) thereunder.9 6 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 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 7 15 3 HOLDRs are a type of Trust Issued Receipt and the current proposal would permit $1 strikes for options on HOLDRs (where the strike price is less than $200). 4 See ISE Rule 504(d). 5 See ISE Rule 504(h). PO 00000 Frm 00115 Fmt 4703 Sfmt 4703 E:\FR\FM\02JYN1.SGM 02JYN1 Federal Register / Vol. 75, No. 127 / Friday, July 2, 2010 / Notices The Exchange has requested that the Commission waive the 30-day operative delay. The Commission believes that waiver of the operative delay is consistent with the protection of investors and the public interest because the proposal is substantially similar to a rule of another exchange that has been approved by the Commission.10 Therefore, the Commission designates the proposal operative upon filing.11 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: 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–2010–63 on the subject line. emcdonald on DSK2BSOYB1PROD with NOTICES 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–2010–63. 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 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 Commission has waived the five-day pre-filing requirement in this case. 10 See Securities Exchange Release No. 34–62141 (May 20, 2010), 75 FR 29787 (May 27, 2010) (SR– CBOE–2010–036). 11 For 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. 78c(f). VerDate Mar<15>2010 18:27 Jul 01, 2010 Jkt 220001 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 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– 2010–63 and should be submitted on or before July 23, 2010. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–16142 Filed 7–1–10; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–62393; File No. SR–BX– 2010–043] Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing of Proposed Rule Change Relating to Pricing for Direct Circuit Connections June 28, 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 June 24, 2010, NASDAQ OMX BX, Inc. (the ‘‘Exchange’’ or ‘‘BX’’) 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. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. PO 00000 12 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 Frm 00116 Fmt 4703 Sfmt 4703 38571 I. Self-Regulatory Organization’s Statement of the Terms of the Substance of the Proposed Rule Change The Exchange is filing with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) a proposed rule change to establish pricing for 10Gb direct circuit connections and codify pricing for 10Gb [sic] direct circuit connections for customers who are not co-located in the Exchange’s datacenter. The text of the proposed rule change is available at https:// nasdaq.cchwallstreet.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 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 is proposing to establish fees for direct 10Gb circuit connections, and codify fees for direct circuit connections capable of supporting up to 1Gb, for customers who are not co-located at the Exchange’s datacenter. Currently, the Exchange already makes available to co-located customers a 10Gb circuit connection and charges for each a $1,000 initial installation charge as well as an ongoing monthly fee of $5,000. The Exchange is establishing the same fees for non colocated customers with a 10Gb circuit.3 The Exchange also already makes available to both co-located and non colocated customers direct connections capable of supporting up to 1Gb, with per connection monthly fees of $500 for co-located customers and $1,000 for non co-located customers. Monthly fees are higher for non co-located customers because direct connections require BX 3 BX provides an additional 1Gb copper connection option to the Exchange for co-located customers. Given the technological constraints of copper connections over longer distances, the Exchange does not offer a copper connection option to users outside of its datacenter. E:\FR\FM\02JYN1.SGM 02JYN1

Agencies

[Federal Register Volume 75, Number 127 (Friday, July 2, 2010)]
[Notices]
[Pages 38570-38571]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-16142]



[[Page 38570]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62389; File No. SR-ISE-2010-63]


Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change To List Options on Trust Issued Receipts in $1 Strike Intervals

June 28, 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 June 24, 2010, the International Securities Exchange, LLC (the 
``Exchange'' or the ``ISE'') filed with the Securities and Exchange 
Commission (``SEC'' or ``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.
---------------------------------------------------------------------------

    \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 amend Rule 504 to allow the Exchange to 
list options on Trust Issued Receipts in $1 strike price intervals. The 
text of the proposed rule change is available on the Exchange's Web 
site at 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
    The purpose of the proposed rule change is to amend Rule 504 by 
adding Supplementary Material .07 to Rule 504 to allow the Exchange to 
list options on the Trust Issued Receipts (``TIRs''), including Holding 
Company Depository Receipts (``HOLDRs''), in $1 or greater strike price 
intervals, where the strike price is $200 or less and $5 or greater 
where the strike price is greater than $200.\3\
---------------------------------------------------------------------------

    \3\ HOLDRs are a type of Trust Issued Receipt and the current 
proposal would permit $1 strikes for options on HOLDRs (where the 
strike price is less than $200).
---------------------------------------------------------------------------

    Currently, the strike price intervals for options on TIRs are as 
follows: (1) $2.50 or greater where the strike price is $25.00 or less; 
(2) $5.00 or greater where the strike price is greater than $25.00; and 
(3) $10.00 or greater where the strike price is greater than $200.\4\
---------------------------------------------------------------------------

    \4\ See ISE Rule 504(d).
---------------------------------------------------------------------------

    The Exchange is seeking to permit $1 strikes for options on TIRs 
(where the strike price is less than $200) because TIRs have 
characteristics similar to exchange-traded funds (``ETFs''). 
Specifically, TIRs are exchange-listed securities representing 
beneficial ownership of the specific deposited securities represented 
by the receipts. They are negotiable receipts issued by a trust 
representing securities of issuers that have been deposited and held on 
behalf of the holders of the TIRs. TIRs, which trade in round-lots of 
100, and multiples thereof, may be issued after their initial offering 
through a deposit with the trustee of the required number of shares of 
common stock of the underlying issuers. This characteristic of TIRs is 
similar to that of ETFs which also may be created on any business day 
upon receipt of the requisite securities or other investment assets 
comprising a creation unit. The trust only issues receipts upon the 
deposit of the shares of the underlying securities that are represented 
by a round-lot of 100 receipts. Likewise, the trust will cancel, and an 
investor may obtain, hold, trade or surrender TIRs in a round-lot and 
round-lot multiples of 100 receipts.
    Strike prices for ETF options are permitted in $1 or greater 
intervals where the strike price is $200 or less and $5 or greater 
where the strike is greater than $200.\5\ Accordingly, the Exchange 
believes that the rationale for permitting $1 strikes for ETF options 
equally applies to permitting $1 strikes for options on TIRs.
---------------------------------------------------------------------------

    \5\ See ISE Rule 504(h).
---------------------------------------------------------------------------

    The Exchange has analyzed its capacity and represents that it 
believes the Exchange and the Options Price Reporting Authority have 
the necessary system capacity to handle the additional traffic 
associated with the listing and trading of $1 strikes, where the strike 
price is less than $200, for options on TIRs.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \6\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \7\ in particular, in that it is designed to promote 
just and equitable principles of trade, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general to protect investors and the public interest, 
by allowing the Exchange to list options on TIRs at $1 strike price 
intervals. The Exchange believes that the marketplace and investors 
expect options on TIRs to trade in a similar manner to ETF options and 
this filing would allow the marketplace and investors the ability in 
trading options on TIRs. The Exchange further believes that investors 
will be better served if $1 strike price intervals are available for 
options on TIRs, where the strike price is less than $200.
---------------------------------------------------------------------------

    \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 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 significantly 
affect the protection of investors or the public interest, does not 
impose any significant burden on competition, and, 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, it 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 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 Commission has waived the five-day pre-filing 
requirement in this case.

---------------------------------------------------------------------------

[[Page 38571]]

    The Exchange has requested that the Commission waive the 30-day 
operative delay. The Commission believes that waiver of the operative 
delay is consistent with the protection of investors and the public 
interest because the proposal is substantially similar to a rule of 
another exchange that has been approved by the Commission.\10\ 
Therefore, the Commission designates the proposal operative upon 
filing.\11\
---------------------------------------------------------------------------

    \10\ See Securities Exchange Release No. 34-62141 (May 20, 
2010), 75 FR 29787 (May 27, 2010) (SR-CBOE-2010-036).
    \11\ For 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. 
78c(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 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-2010-63 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-2010-63. 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 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-2010-63 and should be 
submitted on or before July 23, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

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

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-16142 Filed 7-1-10; 8:45 am]
BILLING CODE 8010-01-P
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