Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its Rules Related to Mini Options Traded on the Exchange, 17729-17731 [2013-06568]

Download as PDF Federal Register / Vol. 78, No. 56 / Friday, March 22, 2013 / Notices governance structures that were approved by the Commission.12 Moreover, ISE has proposed, in part, to change the term of the Non-Industry Directors (including the Public Directors) and the Former Employee Director to a one-year term, subject to re-election. The Commission finds the one-year term for Non-Industry Directors (including the Public Directors) and for the Former Employee Director to be consistent with the Act. The Commission notes that the elimination of the term limit for the Former Employee Director will have no practical effect on board composition at ISE. As proposed, an ISE director who serves as the Former Employee Director for three years will have been, by definition, a former employee of ISE for those three years, and could thereby meet the requirements to serve as a NonIndustry Director. The Commission finds the elimination of this term limit to be consistent with the Act. Finally, the Commission notes that ISE will not be making any other changes to its governance structure other than those specifically described in this filing. Under the proposed rule change, the ISE Constitution would continue to provide that eight of the members of the Exchange’s board of directors—out of a maximum total of 16 members—must be non-industry representatives. This proposed balance with respect to the composition of the Exchange’s Board is consistent with other self-regulatory organization governance structures that were approved by the Commission,13 and the Commission continues to believe that this board composition is consistent with the Act. IV. Conclusion srobinson on DSK4SPTVN1PROD with NOTICES It is therefore ordered, pursuant to Section 19(b)(2) of the Act,14 that the proposed rule change (SR–ISE–2013–07) be, and it hereby is, approved. 12 See Securities Exchange Act Nos. 56955 (December 13, 2007); 72 FR 71979, 71981 fn. 33 (December 19, 2007) (File No. SR–ISE–2007–101) (approving declassification the board for ISE’s parent, International Securities Exchange Holdings, Inc.); 51741 (May 25, 2005); 70 FR 31558 (June 1, 2005) (File No. SR–NASD–2005–054) (approving declassification of the board for NASD). 13 See, e.g., Securities Exchange Act Release No. 54494 (September 25, 2006), 71 FR 58023 (October 2, 2006) (File No. SR–CHX–2006–23). See also Securities Exchange Act Release No. 56211 (August 6, 2007); 72 FR 45287 (August 13, 2007) (File No. SR–ISE–2007–34). 14 15 U.S.C. 78s(b)(2). VerDate Mar<15>2010 18:27 Mar 21, 2013 Jkt 229001 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.15 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–06609 Filed 3–21–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–69153; File No. SR–ISE– 2013–23] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its Rules Related to Mini Options Traded on the Exchange March 15, 2013. 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 13, 2013, 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, 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 related to Mini Options traded on the Exchange. The text of the proposed rule change is available on the Exchange’s Web site 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. 15 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00103 Fmt 4703 Sfmt 4703 17729 A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose ISE proposes to amend its rules related to Mini Options traded on the Exchange. Mini Options overlie 10 equity or ETF shares, rather than the standard 100 shares.3 Mini Options are currently approved on the following five (5) underlying securities: SPDR S&P 500 ETF (‘‘SPY’’), Apple Inc. (‘‘AAPL’’), SPDR Gold Trust (‘‘GLD’’), Google Inc. (‘‘GOOG’’), and Amazon.com, Inc. (‘‘AMZN’’). The purpose of this proposed rule change is to adopt new Supplementary Material .13(d) to ISE Rule 504 to codify the minimum contract threshold requirement for the execution of Mini Options in the Exchange’s Block Order Mechanism and Solicited Order Mechanism. The Block Order Mechanism is a process by which a Member can obtain liquidity for the execution of block-size orders.4 Blocksize orders are orders for fifty (50) or more contracts.5 The Solicited Order Mechanism is a process by which an Electronic Access Member can attempt to execute orders of 500 or more contracts it represents as agent against contra orders that it solicited.6 The minimum contract threshold required for the Block Order Mechanism and the Solicited Order Mechanism applies to option contracts that overlie 100 shares and therefore does not currently apply to Mini Options. This proposed rule change also proposes to adopt a minimum contract threshold for the execution of a Qualified Contingent Cross Order in Mini Options. A Qualified Contingent Cross Order is an order to buy or sell at least 1000 contracts that is identified as being part of a qualified contingent trade coupled with a contra-side order to buy or sell an equal number of contracts.7 Again, the minimum contract threshold required for the execution of a Qualified Contingent Cross order applies to option contracts that overlie 100 shares and therefore does not currently apply to Mini Options. 3 Mini Options were approved for trading on September 28, 2012. See Securities Exchange Act Release No. 67948 (September 28, 2012), 77 FR 60735 (October 4, 2012) (Approving SR–ISE–2012– 58). The Exchange expects to begin trading Mini Options on March 18, 2013. 4 See ISE Rule 716(c). 5 See ISE Rule 716(a). 6 See ISE Rule 716(e). 7 See ISE Rule 715(j). E:\FR\FM\22MRN1.SGM 22MRN1 17730 Federal Register / Vol. 78, No. 56 / Friday, March 22, 2013 / Notices srobinson on DSK4SPTVN1PROD with NOTICES The Exchange now proposes to adopt new Supplementary Material .13(d) to Rule 504 to adjust the minimum contract threshold for executing Mini Options in the Block Order Mechanism and Solicited Order Mechanism by ten times their current requirement. Thus, Mini Options executed in the Block Order Mechanism must be for five hundred (500) or more Mini Option contracts, and Mini Options executed in the Solicited Order Mechanism must be for five thousand (5,000) or more Mini Option contracts. Further, new Supplementary Material .13(d) to Rule 504 also adjusts the minimum contract threshold for the execution of Qualified Contingent Cross orders in Mini Options. Thus, a Qualified Contingent Cross order in Mini Options must be comprised of an order to buy or sell at least 10,000 Mini Option contracts coupled with a contra-side order to buy or sell an equal number of Mini Option contracts. The Exchange believes it is appropriate to adjust the minimum contract threshold for Mini Options so they are equivalent (same number of underlying securities) to the minimum contract threshold required for standard options that are executed in the Block Order Mechanism and Solicited Order Mechanism and for the execution of Qualified Contingent Cross orders in Mini Options. The Exchange believes that adjusting the minimum contract threshold will remove any confusion on the part of market participants that want to use these Exchange functionalities to execute Mini Options. 2. Statutory Basis The basis under the Securities Exchange Act of 1934 (the ‘‘Exchange Act’’) for this proposed rule change is found in Section 6(b)(5), in that the proposed change is designed to promote just and equitable principles of trade, will serve to remove impediments to and perfect the mechanisms of 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 assure that standard options and Mini Options on the same underlying security will have an equivalent minimum contract threshold for the execution of orders in the Exchange’s Block Order Mechanism and Solicited Order Mechanism and for Qualified Contingent Cross orders executed on the Exchange. The Exchange believes the proposed rule change will also avoid investor confusion because in the absence of this proposal, the minimum contract threshold for executing Mini Options in the Block Order Mechanism VerDate Mar<15>2010 18:27 Mar 21, 2013 Jkt 229001 and Solicited Order Mechanism and for executing Qualified Contingent Cross orders in Mini Options would have been different than that for standard options (i.e., different number of underlying securities). The Exchange does not intend that Mini Options and standard options have different minimum contract threshold requirements for its auction mechanisms and for Qualified Contingent Cross orders executed on the Exchange. The Exchange further believes that investors and other market participants will benefit from this proposed rule change because it proposes to clarify and establish the minimum contract threshold for executing Mini Options in the Block Order Mechanism and Solicited Order Mechanism and for executing Qualified Contingent Cross orders in Mini Options prior to the commencement of trading. The Exchange believes that investors generally will be expecting the minimum contract threshold for Mini Options to be equivalent to the minimum contract threshold for standard options when it comes to executing trades in the Exchange’s various auctions and in executing Qualified Contingent Cross orders in Mini Options on the same underlying security. This proposed rule change will therefore lessen investor confusion. B. Self-Regulatory Organization’s Statement on Burden on Competition This 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. ISE believes that the proposed rule change will in fact relieve any burden on, or otherwise promote, competition. Mini Options are currently approved for trading on multiple options exchanges and all of the options exchanges that have a minimum contract threshold in their rules will have the opportunity to amend their rules to adopt minimum contract thresholds for Mini Options that are equivalent to the minimum contract threshold for standard options. 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. PO 00000 Frm 00104 Fmt 4703 Sfmt 4703 III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change: (1) Does not significantly affect the protection of investors or the public interest; (2) does not impose any significant burden on competition; and (3) by its terms does not become operative for 30 days after the date of this filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 8 and Rule 19b–4(f)(6) thereunder.9 A proposed rule change filed under Rule 19b–4(f)(6) normally does not become operative for 30 days after the date of filing. However, Rule 19b– 4(f)(6)(iii) permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange requests that the Commission waive the 30-day operative delay so that the proposed rule change may coincide with the anticipated launch of trading in Mini Options. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest.10 Waiver of the operative delay will allow the Exchange to implement its proposal consistent with the commencement of trading in Mini Options as scheduled and expected by members and other participants on March 18, 2013. For these reasons, the Commission designates the proposed rule change as operative upon filing. 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 8 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6)(iii) requires a self-regulatory organization to provide the Commission with written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has fulfilled this requirement. 10 For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 9 17 E:\FR\FM\22MRN1.SGM 22MRN1 Federal Register / Vol. 78, No. 56 / Friday, March 22, 2013 / Notices 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: For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.11 Kevin M. O’Neill, Deputy Secretary. Electronic Comments [FR Doc. 2013–06568 Filed 3–21–13; 8:45 am] • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rulecomments@sec.gov. Please include File Number SR–ISE–2013–23 on the subject line. Paper Comments srobinson on DSK4SPTVN1PROD 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–2013–23. This file number should be included on the subject line if email 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 10:00 a.m. and 3:00 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– 2013–23 and should be submitted on or before April 12, 2013. BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–69160; File No. SR–BATS– 2013–019] Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing of Proposed Rule Change To Amend the Minimum Trading Increments for Mini Options March 18, 2013. 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 March 15, 2013, BATS Exchange, Inc. (the ‘‘Exchange’’ or ‘‘BATS’’) 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 Exchange has designated this proposal as a ‘‘noncontroversial’’ proposed rule change pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b–4(f)(6) thereunder,4 which renders it effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange filed a proposal for the BATS Options Market (‘‘BATS Options’’) to permit the minimum trading increment for Mini Options to be the same as the minimum trading increment permitted for standard options on the same underlying security. The text of the proposed rule change is available at the Exchange’s Web site at https://www.batstrading.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. 11 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(6)(iii). 1 15 VerDate Mar<15>2010 20:03 Mar 21, 2013 Jkt 229001 PO 00000 Frm 00105 Fmt 4703 Sfmt 4703 17731 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 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 proposed rule change is to amend BATS Rules to permit the minimum trading increment for Mini Options to be the same as the minimum trading increment permitted for standard options on the same underlying security. Mini Options overlie 10 equity or ETF shares, rather than the standard 100 shares.5 Mini Options are currently approved on the following five (5) underlying securities: SPDR S&P 500 ETF (‘‘SPY’’), Apple Inc. (‘‘AAPL’’), SPDR Gold Trust (‘‘GLD’’), Google Inc. (‘‘GOOG’’), and Amazon.com, Inc. (‘‘AMZN’’). Of the five securities on which Mini Options are permitted, four of them (SPY, AAPL, GLD, and AMZN) participate in the Penny Pilot Program.6 Under the Penny Pilot Program, with the exception of three classes,7 the minimum price variation for all participating options classes is $0.01 for all quotations in options series that are quoted at less than $3 per contract and $0.05 for all quotations in options series that are quoted at $3 per contract or greater. 5 See Securities Exchange Act Release No. 69018 (March 1, 2013), 78 FR 15090 (March 8, 2013) (Notice of filing and immediate effectiveness allowing Mini Options to be listed and traded on BATS Options) (SR–BATS–2013–013). The Exchange expects to begin listing and trading Mini Options on March 18, 2013. 6 The rules of BATS Options, including rules applicable to BATS Options’ participation in the Penny Pilot, were approved on January 26, 2010. See Securities Exchange Act Release No. 61419 (January 26, 2010), 75 FR 5157 (February 1, 2010) (SR–BATS–2009–031). BATS Options commenced operations on February 26, 2010. The Penny Pilot was extended for BATS Options through June 30, 2013. See Securities Exchange Act Release No. 67306 (December 21, 2012), 77 FR 77176 (December 31, 2012) (SR–BATS–2012–048). 7 The three classes are the Nasdaq–100 Index Tracking Stock (‘‘QQQQ’’), SPY, and the iShares Russell 2000 Index Fund (‘‘IWM’’). QQQQ, SPY, and IWM are quoted in $0.01 for all options series. E:\FR\FM\22MRN1.SGM 22MRN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 78, Number 56 (Friday, March 22, 2013)]
[Notices]
[Pages 17729-17731]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-06568]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69153; File No. SR-ISE-2013-23]

Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change To Amend Its Rules Related to Mini Options Traded on the
Exchange

March 15, 2013.
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 13, 2013, 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, 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 related to Mini Options
traded on the Exchange. The text of the proposed rule change is
available on the Exchange's Web site 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 the
Statutory Basis for, the Proposed Rule Change

1. Purpose
ISE proposes to amend its rules related to Mini Options traded on
the Exchange. Mini Options overlie 10 equity or ETF shares, rather than
the standard 100 shares.\3\ Mini Options are currently approved on the
following five (5) underlying securities: SPDR S&P 500 ETF (``SPY''),
Apple Inc. (``AAPL''), SPDR Gold Trust (``GLD''), Google Inc.
(``GOOG''), and Amazon.com, Inc. (``AMZN'').
---------------------------------------------------------------------------

\3\ Mini Options were approved for trading on September 28,
2012. See Securities Exchange Act Release No. 67948 (September 28,
2012), 77 FR 60735 (October 4, 2012) (Approving SR-ISE-2012-58). The
Exchange expects to begin trading Mini Options on March 18, 2013.
---------------------------------------------------------------------------

The purpose of this proposed rule change is to adopt new
Supplementary Material .13(d) to ISE Rule 504 to codify the minimum
contract threshold requirement for the execution of Mini Options in the
Exchange's Block Order Mechanism and Solicited Order Mechanism. The
Block Order Mechanism is a process by which a Member can obtain
liquidity for the execution of block-size orders.\4\ Block-size orders
are orders for fifty (50) or more contracts.\5\ The Solicited Order
Mechanism is a process by which an Electronic Access Member can attempt
to execute orders of 500 or more contracts it represents as agent
against contra orders that it solicited.\6\ The minimum contract
threshold required for the Block Order Mechanism and the Solicited
Order Mechanism applies to option contracts that overlie 100 shares and
therefore does not currently apply to Mini Options.
---------------------------------------------------------------------------

\4\ See ISE Rule 716(c).
\5\ See ISE Rule 716(a).
\6\ See ISE Rule 716(e).
---------------------------------------------------------------------------

This proposed rule change also proposes to adopt a minimum contract
threshold for the execution of a Qualified Contingent Cross Order in
Mini Options. A Qualified Contingent Cross Order is an order to buy or
sell at least 1000 contracts that is identified as being part of a
qualified contingent trade coupled with a contra-side order to buy or
sell an equal number of contracts.\7\ Again, the minimum contract
threshold required for the execution of a Qualified Contingent Cross
order applies to option contracts that overlie 100 shares and therefore
does not currently apply to Mini Options.
---------------------------------------------------------------------------

\7\ See ISE Rule 715(j).

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

[[Page 17730]]

The Exchange now proposes to adopt new Supplementary Material
.13(d) to Rule 504 to adjust the minimum contract threshold for
executing Mini Options in the Block Order Mechanism and Solicited Order
Mechanism by ten times their current requirement. Thus, Mini Options
executed in the Block Order Mechanism must be for five hundred (500) or
more Mini Option contracts, and Mini Options executed in the Solicited
Order Mechanism must be for five thousand (5,000) or more Mini Option
contracts. Further, new Supplementary Material .13(d) to Rule 504 also
adjusts the minimum contract threshold for the execution of Qualified
Contingent Cross orders in Mini Options. Thus, a Qualified Contingent
Cross order in Mini Options must be comprised of an order to buy or
sell at least 10,000 Mini Option contracts coupled with a contra-side
order to buy or sell an equal number of Mini Option contracts.
The Exchange believes it is appropriate to adjust the minimum
contract threshold for Mini Options so they are equivalent (same number
of underlying securities) to the minimum contract threshold required
for standard options that are executed in the Block Order Mechanism and
Solicited Order Mechanism and for the execution of Qualified Contingent
Cross orders in Mini Options. The Exchange believes that adjusting the
minimum contract threshold will remove any confusion on the part of
market participants that want to use these Exchange functionalities to
execute Mini Options.
2. Statutory Basis
The basis under the Securities Exchange Act of 1934 (the ``Exchange
Act'') for this proposed rule change is found in Section 6(b)(5), in
that the proposed change is designed to promote just and equitable
principles of trade, will serve to remove impediments to and perfect
the mechanisms of 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 assure that standard options
and Mini Options on the same underlying security will have an
equivalent minimum contract threshold for the execution of orders in
the Exchange's Block Order Mechanism and Solicited Order Mechanism and
for Qualified Contingent Cross orders executed on the Exchange. The
Exchange believes the proposed rule change will also avoid investor
confusion because in the absence of this proposal, the minimum contract
threshold for executing Mini Options in the Block Order Mechanism and
Solicited Order Mechanism and for executing Qualified Contingent Cross
orders in Mini Options would have been different than that for standard
options (i.e., different number of underlying securities). The Exchange
does not intend that Mini Options and standard options have different
minimum contract threshold requirements for its auction mechanisms and
for Qualified Contingent Cross orders executed on the Exchange. The
Exchange further believes that investors and other market participants
will benefit from this proposed rule change because it proposes to
clarify and establish the minimum contract threshold for executing Mini
Options in the Block Order Mechanism and Solicited Order Mechanism and
for executing Qualified Contingent Cross orders in Mini Options prior
to the commencement of trading. The Exchange believes that investors
generally will be expecting the minimum contract threshold for Mini
Options to be equivalent to the minimum contract threshold for standard
options when it comes to executing trades in the Exchange's various
auctions and in executing Qualified Contingent Cross orders in Mini
Options on the same underlying security. This proposed rule change will
therefore lessen investor confusion.

B. Self-Regulatory Organization's Statement on Burden on Competition

This 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. ISE believes that the proposed rule change will in
fact relieve any burden on, or otherwise promote, competition. Mini
Options are currently approved for trading on multiple options
exchanges and all of the options exchanges that have a minimum contract
threshold in their rules will have the opportunity to amend their rules
to adopt minimum contract thresholds for Mini Options that are
equivalent to the minimum contract threshold for standard options.

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: (1) Does not
significantly affect the protection of investors or the public
interest; (2) does not impose any significant burden on competition;
and (3) by its terms does not become operative for 30 days after the
date of this filing, or such shorter time as the Commission may
designate if consistent with the protection of investors and the public
interest, the proposed rule change 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 a self-regulatory organization to provide the Commission
with written notice of its intent to file the proposed rule change,
along with a brief description and text of the proposed rule change,
at least five business days prior to the date of filing of the
proposed rule change, or such shorter time as designated by the
Commission. The Exchange has fulfilled this requirement.
---------------------------------------------------------------------------

A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days after the date of filing. However,
Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter
time if such action is consistent with the protection of investors and
the public interest. The Exchange requests that the Commission waive
the 30-day operative delay so that the proposed rule change may
coincide with the anticipated launch of trading in Mini Options. The
Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public
interest.\10\ Waiver of the operative delay will allow the Exchange to
implement its proposal consistent with the commencement of trading in
Mini Options as scheduled and expected by members and other
participants on March 18, 2013. For these reasons, the Commission
designates the proposed rule change as operative upon filing.
---------------------------------------------------------------------------

\10\ For purposes only of waiving the 30-day operative delay,
the Commission has also 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 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

[[Page 17731]]

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 email to rule-comments@sec.gov. Please
include File Number SR-ISE-2013-23 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-2013-23. This file
number should be included on the subject line if email 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
10:00 a.m. and 3:00 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-2013-23 and should be
submitted on or before April 12, 2013.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-06568 Filed 3-21-13; 8:45 am]
BILLING CODE 8011-01-P

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