Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Option Expiration Months Open for Trading on the Exchange, 24546-24548 [2011-10468]
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24546
Federal Register / Vol. 76, No. 84 / Monday, May 2, 2011 / Notices
For the Commission, by the Division of
Investment Management, under delegated
authority.
Cathy H. Ahn,
Deputy Secretary.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–64343; File No. SR–ISE–
2011–26]
[FR Doc. 2011–10543 Filed 4–29–11; 8:45 am]
Self-Regulatory Organizations;
International Securities Exchange,
LLC; Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change Relating to Option Expiration
Months Open for Trading on the
Exchange
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meeting
Notice is hereby given, pursuant to
the provisions of the Government in the
Sunshine Act, Public Law 94–409, that
the Securities and Exchange
Commission will hold a Closed Meeting
on Thursday, May 5, 2011 at 1 p.m.
Commissioners, Counsel to the
Commissioners, the Secretary to the
Commission, and recording secretaries
will attend the Closed Meeting. Certain
staff members who have an interest in
the matters also may be present.
The General Counsel of the
Commission, or his designee, has
certified that, in his opinion, one or
more of the exemptions set forth in 5
U.S.C. 552b(c)(3), (5), (7), 9(B) and (10)
and 17 CFR 200.402(a)(3), (5), (7), 9(ii)
and (10), permit consideration of the
scheduled matters at the Closed
Meeting.
Commissioner Walter, as duty officer,
voted to consider the items listed for the
Closed Meeting in a closed session.
The subject matter of the Closed
Meeting scheduled for Thursday, May 5,
2011 will be:
Institution and settlement of injunctive
actions; institution and settlement of
administrative proceedings; a litigation
matter; and other matters relating to
enforcement proceedings.
mstockstill on DSKH9S0YB1PROD with NOTICES6
At times, changes in Commission
priorities require alterations in the
scheduling of meeting items.
For further information and to
ascertain what, if any, matters have been
added, deleted or postponed, please
contact:
The Office of the Secretary at (202)
551–5400.
Dated: April 28, 2011.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011–10772 Filed 4–28–11; 4:15 pm]
April 26, 2011.
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 20,
2011, the International Securities
Exchange, LLC (the ‘‘Exchange’’ or the
‘‘ISE’’) filed with the Securities and
Exchange Commission (‘‘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 its
rules to permit the Exchange to list
additional expiration months if such
expiration months are listed on another
exchange. 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
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
self-regulatory organization has
prepared summaries, set forth in
Sections A, B and C below, of the most
significant aspects of such statements.
BILLING CODE 8011–01–P
1 15
2 17
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PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00090
Fmt 4703
Sfmt 4703
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 ISE Rules to permit
the Exchange to list additional
expiration months if such expiration
months are listed on another exchange.
This filing is based on a filing
previously submitted by NASDAQ OMX
PHLX, Inc. (‘‘PHLX’’).3
Under current rule 504(e), ISE usually
will open four (4) expiration months for
each type of option of a class of options
open for trading on the Exchange: The
first two (2) being the two nearest
months, regardless of the quarterly cycle
on which that class trades; the third and
fourth being the next two months of the
quarterly cycle previously designated by
the Exchange for that specific class. For
example, if the Exchange listed in late
September a new stock option on a
January-April-July-October quarterly
cycle, the Exchange would list the two
nearest-term months (October and
November) and the next two expiration
months of the cycle (January and April).
Further, when the October series expire,
the Exchange would add the December
series as the next nearest month. And
when the November series expire, the
Exchange would add the July series as
the next month of the cycle.
In 2010, the Exchange established a
pilot program to add up to two
additional expiration months for each
class of options opened for trading on
the Exchange (the ‘‘Additional
Expiration Months Pilot’’).4 Under the
Additional Expiration Months Pilot, ISE
lists expiration months that are
considered ‘‘mid-month.’’ For example,
for options classes that have expiration
months of October, November, January,
and April, the Exchange lists the
December series. For options classes
that have expiration months of October,
November, February and May, the
Exchange lists the December and
January series. The listing of additional
expiration months has been wellreceived by our members and has had
very limited impact on system
resources.
PHLX recently submitted a filing to
adopt rules pursuant to which it can
3 See Securities Exchange Act Release No. 63700
(January 11, 2011) 76 FR 2931 (January 18, 2011)
(SR–PHLX–2011–04). In its filing, PHLX cites to the
Commission’s approval of the NASDAQ Options
Market and rules pertaining thereto as the basis for
making the change to its rules.
4 See Securities Exchange Act Release No. 63104
(October 14, 2010) 75 FR 64773 (October 20, 2011)
(SR–ISE–2010–91).
E:\FR\FM\02MYN1.SGM
02MYN1
mstockstill on DSKH9S0YB1PROD with NOTICES6
Federal Register / Vol. 76, No. 84 / Monday, May 2, 2011 / Notices
open ‘‘at least one expiration month’’ for
each class of options opened for trading
on that exchange.5 Consequently, while
ISE is currently restricted to listing a
limited number of expiration months
that are permissible under its rules and
the Additional Expiration Months Pilot,
PHLX has the ability to list an unlimited
number of expiration months, including
those that ISE would not be able to
currently list under its rules. Indeed,
PHLX has listed additional expiration
months that no other exchange,
including ISE, can currently list. For
example, in February 2011, PHLX listed
the October 2011 expiration in
Omnicare, Inc. (ticker: OCR). PHLX was
able to list that expiration month based
on its amended rule. Meanwhile, ISE
could not list the October 2011 series
under Rule 504(e) because the standard
expiration months for OCR in February
are March, April, June, and September.
ISE also could not list the October 2011
series as part of the Additional
Expiration Months Pilot because OCR is
not one of the classes selected by the
Exchange to participate in the
Additional Expiration Months Pilot (nor
could ISE select it for the Additional
Expiration Months Pilot because all 20
available selections have been chosen).
As a result, PHLX was the only
exchange that listed the October 2011
series in OCR and continues to trade
that series without any competition.
For competitive reasons, ISE now
proposes to add new Supplementary
Material .10 to its Rule 504 and
Supplementary Material .04 to ISE Rule
2009 to permit the Exchange to list
additional expiration months on options
classes opened for trading on the
Exchange if such expiration months are
opened for trading on at least one other
national securities exchange. This
proposed rule change will allow ISE to
match the listing of expiration months
that PHLX or NOM lists in the event ISE
is not able to list those expiration
months because they do not comport to
ISE Rules or the Additional Expiration
Months Pilot.
The Exchange notes that the proposed
rule change affords additional flexibility
in that it will permit the exchange to list
those additional expiration months that
have an actual demand from market
participants thereby potentially
reducing the proliferation of classes and
series. The Exchange believes the
proposed rule change is proper, and
indeed necessary, in light of the need to
5 This paragraph was modified at the request of
the Exchange on April 25, 2011. See e-mail, dated
April 25, 2011, from Samir M. Patel, Assistant
General Counsel, International Securities Exchange,
to Kathleen J. Gray, Attorney, Division of Trading
and Markets, Commission.
VerDate Mar<15>2010
17:48 Apr 29, 2011
Jkt 223001
have rules that permit the listing of
identical expiration months across
exchanges for products that are
multiply-listed and fungible with one
another. The Exchange believes that the
proposed rule change should encourage
competition and be beneficial to traders
and market participants by providing
them with a means to trade on the
Exchange securities that are listed and
traded on other exchanges.
2. Statutory Basis
The basis under the Securities
Exchange Act of 1934 (‘‘Exchange Act’’)
for this proposed rule change is the
requirement under Section 6(b)(5) 6 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
proposed rule change will permit the
Exchange to accommodate requests
made by its members and other market
participants to list the additional
expiration months and thus encourage
competition without harming investors
or the public interest.
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
6 15
PO 00000
U.S.C. 78f(b)(5).
Frm 00091
Fmt 4703
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24547
19(b)(3)(A) of the Act 7 and Rule 19b–
4(f)(6) thereunder.8
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 should promote
competition by allowing the Exchange
to list and trade option series that are
trading on other options exchanges.
Therefore, the Commission designates
the proposal operative upon filing.9
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend 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–2011–26 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–2011–26. 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
7 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires the Exchange to give the
Commission written notice of the Exchange’s intent
to file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Commission
has waived the five-day prefiling requirement in
this case.
9 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).
8 17
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Federal Register / Vol. 76, No. 84 / Monday, May 2, 2011 / Notices
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–
2011–26 and should be submitted on or
before May 23, 2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011–10468 Filed 4–29–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–64342; File No. SR–
NYSEArca–2011–17]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing of Proposed
Rule Change Relating to the Listing
and Trading of the Madrona Forward
Domestic ETF, Madrona Forward
International ETF, and Madrona
Forward Global Bond ETF
mstockstill on DSKH9S0YB1PROD with NOTICES6
April 26, 2011.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (‘‘Act’’
or ‘‘Exchange Act’’) 1 and Rule 19b–4
thereunder,2 notice is hereby given that
on April 13, 2011, NYSE Arca, Inc.
(‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
10 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
VerDate Mar<15>2010
17:48 Apr 29, 2011
Jkt 223001
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 list and
trade the following under NYSE Arca
Equities Rule 8.600 (‘‘Managed Fund
Shares’’): Madrona Forward Domestic
ETF; Madrona Forward International
ETF; and Madrona Forward Global
Bond ETF. 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.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to list and
trade the following Managed Fund
Shares 3 (‘‘Shares’’) under NYSE Arca
Equities Rule 8.600: Madrona Forward
Domestic ETF; Madrona Forward
International ETF; and Madrona
Forward Global Bond ETF (each, a
‘‘Fund’’ and, collectively, ‘‘Funds’’).4 The
3 A Managed Fund Share is a security that
represents an interest in an investment company
registered under the Investment Company Act of
1940 (15 U.S.C. 80a) (‘‘1940 Act’’) organized as an
open-end investment company or similar entity that
invests in a portfolio of securities selected by its
investment adviser consistent with its investment
objectives and policies. In contrast, an open-end
investment company that issues Investment
Company Units, listed and traded on the Exchange
under NYSE Arca Equities Rule 5.2(j)(3), seeks to
provide investment results that correspond
generally to the price and yield performance of a
specific foreign or domestic stock index, fixed
income securities index, or combination thereof.
4 The Commission approved NYSE Arca Equities
Rule 8.600 and the listing and trading of certain
funds of the PowerShares Actively Managed
Exchange-Traded Funds Trust on the Exchange
pursuant to Rule 8.600 in Securities Exchange Act
Release No. 57619 (April 4, 2008), 73 FR 19544
(April 10, 2008) (SR–NYSEArca–2008–25). The
Commission also previously approved listing and
PO 00000
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Shares will be offered by AdvisorShares
Trust (‘‘Trust’’), a statutory trust
organized under the laws of the State of
Delaware and registered with the
Commission as an open-end
management investment company.5 The
investment adviser to the Funds is
AdvisorShares Investments, LLC
(‘‘Adviser’’). Madrona Funds LLC is the
Funds’ sub-adviser (‘‘Sub-Adviser’’) and
provides day-to-day portfolio
management of the Funds. Foreside
Fund Services, LLC (‘‘Distributor’’) is the
principal underwriter and distributor of
the Funds’ Shares. The Bank of New
York Mellon Corporation
(‘‘Administrator’’) serves as
administrator, custodian, and transfer
agent for the Funds.
Commentary .06 to Rule 8.600
provides that, if the investment adviser
to the Investment Company issuing
Managed Fund Shares is affiliated with
a broker-dealer, such investment adviser
shall erect a ‘‘fire wall’’ between the
investment adviser and the brokerdealer with respect to access to
information concerning the composition
and/or changes to such Investment
Company portfolio. In addition,
Commentary .06 further requires that
personnel who make decisions on the
open-end fund’s portfolio composition
must be subject to procedures designed
to prevent the use and dissemination of
material non-public information
regarding the open-end fund’s
trading on the Exchange of a number of actively
managed funds under Rule 8.600. See, e.g.,
Securities Exchange Act Release Nos. 57801 (May
8, 2008), 73 FR 27878 (May 14, 2008) (SR–
NYSEArca–2008–31) (order approving Exchange
listing and trading of twelve actively-managed
funds of the WisdomTree Trust); 60460 (August 7,
2009), 74 FR 41468 (August 17, 2009) (SR–
NYSEArca–2009–55) (order approving listing of
Dent Tactical ETF); 61365 (January 15, 2010), 75 FR
4124 (January 26, 2010) (SR–NYSEArca–2009–114)
(order approving listing and trading of Grail
McDonnell Fixed Income ETFs); 60981 (November
10, 2009), 74 FR 59594 (November 18, 2009) (SR–
NYSEArca–2009–79) (order approving listing of five
fixed income funds of the PIMCO ETF Trust); 62502
(July 15, 2010), 75 FR 42471 (July 21, 2010) (SR–
NYSEArca–2010–57) (order approving listing of
AdvisorShares WCM/BNY Mellon Focused Growth
ADR ETF); 63076 (October 12, 2010), 75 FR 63874
(October 18, 2010) (SR–NYSEArca–2010–79) (order
approving listing of Cambria Global Tactical ETF);
63329 (November 17, 2010), 75 FR 71760
(November 24, 2010) (SR–NYSEArca–2010–86)
(order approving listing of Peritus High Yield ETF).
5 The Trust is registered under the 1940 Act. On
November 30, 2010, the Trust filed with the
Commission Form N–1A under the Securities Act
of 1933 (15 U.S.C. 77a) and under the 1940 Act
relating to the Funds (File Nos. 333–157876 and
811–22110) (‘‘Registration Statement’’). The Trust
has also filed an Application for an Order under
Section 6(c) of the 1940 Act for exemptions from
various provisions of the 1940 Act and rules
thereunder (File No. 812–13677, dated May 6, 2010)
(‘‘Exemptive Application’’). The description of the
operation of the Trust and the Funds herein is
based on the Registration Statement.
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]]>Agencies
[Federal Register Volume 76, Number 84 (Monday, May 2, 2011)]
[Notices]
[Pages 24546-24548]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-10468]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64343; File No. SR-ISE-2011-26]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change Relating to Option Expiration Months Open for Trading on the
Exchange
April 26, 2011.
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 20, 2011, the International Securities Exchange, LLC
(the ``Exchange'' or the ``ISE'') filed with the Securities and
Exchange Commission (``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 its rules to permit the Exchange to
list additional expiration months if such expiration months are listed
on another exchange. 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 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 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 ISE Rules to
permit the Exchange to list additional expiration months if such
expiration months are listed on another exchange. This filing is based
on a filing previously submitted by NASDAQ OMX PHLX, Inc.
(``PHLX'').\3\
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 63700 (January 11,
2011) 76 FR 2931 (January 18, 2011) (SR-PHLX-2011-04). In its
filing, PHLX cites to the Commission's approval of the NASDAQ
Options Market and rules pertaining thereto as the basis for making
the change to its rules.
---------------------------------------------------------------------------
Under current rule 504(e), ISE usually will open four (4)
expiration months for each type of option of a class of options open
for trading on the Exchange: The first two (2) being the two nearest
months, regardless of the quarterly cycle on which that class trades;
the third and fourth being the next two months of the quarterly cycle
previously designated by the Exchange for that specific class. For
example, if the Exchange listed in late September a new stock option on
a January-April-July-October quarterly cycle, the Exchange would list
the two nearest-term months (October and November) and the next two
expiration months of the cycle (January and April). Further, when the
October series expire, the Exchange would add the December series as
the next nearest month. And when the November series expire, the
Exchange would add the July series as the next month of the cycle.
In 2010, the Exchange established a pilot program to add up to two
additional expiration months for each class of options opened for
trading on the Exchange (the ``Additional Expiration Months
Pilot'').\4\ Under the Additional Expiration Months Pilot, ISE lists
expiration months that are considered ``mid-month.'' For example, for
options classes that have expiration months of October, November,
January, and April, the Exchange lists the December series. For options
classes that have expiration months of October, November, February and
May, the Exchange lists the December and January series. The listing of
additional expiration months has been well-received by our members and
has had very limited impact on system resources.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 63104 (October 14,
2010) 75 FR 64773 (October 20, 2011) (SR-ISE-2010-91).
---------------------------------------------------------------------------
PHLX recently submitted a filing to adopt rules pursuant to which
it can
[[Page 24547]]
open ``at least one expiration month'' for each class of options opened
for trading on that exchange.\5\ Consequently, while ISE is currently
restricted to listing a limited number of expiration months that are
permissible under its rules and the Additional Expiration Months Pilot,
PHLX has the ability to list an unlimited number of expiration months,
including those that ISE would not be able to currently list under its
rules. Indeed, PHLX has listed additional expiration months that no
other exchange, including ISE, can currently list. For example, in
February 2011, PHLX listed the October 2011 expiration in Omnicare,
Inc. (ticker: OCR). PHLX was able to list that expiration month based
on its amended rule. Meanwhile, ISE could not list the October 2011
series under Rule 504(e) because the standard expiration months for OCR
in February are March, April, June, and September. ISE also could not
list the October 2011 series as part of the Additional Expiration
Months Pilot because OCR is not one of the classes selected by the
Exchange to participate in the Additional Expiration Months Pilot (nor
could ISE select it for the Additional Expiration Months Pilot because
all 20 available selections have been chosen). As a result, PHLX was
the only exchange that listed the October 2011 series in OCR and
continues to trade that series without any competition.
---------------------------------------------------------------------------
\5\ This paragraph was modified at the request of the Exchange
on April 25, 2011. See e-mail, dated April 25, 2011, from Samir M.
Patel, Assistant General Counsel, International Securities Exchange,
to Kathleen J. Gray, Attorney, Division of Trading and Markets,
Commission.
---------------------------------------------------------------------------
For competitive reasons, ISE now proposes to add new Supplementary
Material .10 to its Rule 504 and Supplementary Material .04 to ISE Rule
2009 to permit the Exchange to list additional expiration months on
options classes opened for trading on the Exchange if such expiration
months are opened for trading on at least one other national securities
exchange. This proposed rule change will allow ISE to match the listing
of expiration months that PHLX or NOM lists in the event ISE is not
able to list those expiration months because they do not comport to ISE
Rules or the Additional Expiration Months Pilot.
The Exchange notes that the proposed rule change affords additional
flexibility in that it will permit the exchange to list those
additional expiration months that have an actual demand from market
participants thereby potentially reducing the proliferation of classes
and series. The Exchange believes the proposed rule change is proper,
and indeed necessary, in light of the need to have rules that permit
the listing of identical expiration months across exchanges for
products that are multiply-listed and fungible with one another. The
Exchange believes that the proposed rule change should encourage
competition and be beneficial to traders and market participants by
providing them with a means to trade on the Exchange securities that
are listed and traded on other exchanges.
2. Statutory Basis
The basis under the Securities Exchange Act of 1934 (``Exchange
Act'') for this proposed rule change is the requirement under Section
6(b)(5) \6\ 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 proposed rule change will permit the
Exchange to accommodate requests made by its members and other market
participants to list the additional expiration months and thus
encourage competition without harming investors or the public interest.
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\6\ 15 U.S.C. 78f(b)(5).
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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 \7\ and Rule 19b-
4(f)(6) thereunder.\8\
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\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change, along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Commission has waived the five-day prefiling requirement in this
case.
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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 should promote competition by allowing
the Exchange to list and trade option series that are trading on other
options exchanges. Therefore, the Commission designates the proposal
operative upon filing.\9\
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\9\ 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).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend 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-2011-26 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-2011-26. 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
[[Page 24548]]
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-2011-26 and should be submitted on or before May 23,
2011.
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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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-10468 Filed 4-29-11; 8:45 am]
BILLING CODE 8011-01-P
