Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to the Short Term Option Series Program, 76375-76377 [2013-29889]

Download as PDF Federal Register / Vol. 78, No. 242 / Tuesday, December 17, 2013 / Notices among market participants, to the benefit of investors and the marketplace. As noted above, the Exchange has in place surveillance procedures relating to trading in the Shares and may obtain information via ISG from other exchanges that are members of ISG or with which the Exchange has entered into a comprehensive surveillance sharing agreement. In addition, as noted above, investors will have ready access to information regarding gold pricing and gold futures information. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange believes the proposed rule change would permit listing and trading on the Exchange of an additional and unique issue of Commodity-Based Trust Shares based on gold, which will enhance competition among market participants, to the benefit of investors and the marketplace. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action wreier-aviles on DSK5TPTVN1PROD with NOTICES Within 45 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve or disapprove the proposed rule change, or (B) Institute proceedings to determine whether the proposed rule change should be disapproved. 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: VerDate Mar<15>2010 14:45 Dec 16, 2013 Jkt 232001 Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NYSEArca–2013–137 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–NYSEArca–2013–137. 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 (http://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– NYSEArca–2013–137 and should be submitted on or before January 7, 2014. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.41 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–29893 Filed 12–16–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–71033; File No. SR–ISE– 2013–68] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to the Short Term Option Series Program December 11, 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 December 6, 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 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 Supplementary Material .02 to Rule 504 and Supplementary Material .01 to Rule 2009 to allow the Exchange to list five Short Term Option Series at one time, and to specify that new series of Short Term Option Series may be listed up to, and including on, the expiration date. The text of the proposed rule change is available on the Exchange’s Internet Web site at http://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. 1 15 41 17 PO 00000 CFR 200.30–3(a)(12). Frm 00107 Fmt 4703 Sfmt 4703 76375 2 17 E:\FR\FM\17DEN1.SGM U.S.C. 78s(b)(1). CFR 240.19b–4. 17DEN1 76376 Federal Register / Vol. 78, No. 242 / Tuesday, December 17, 2013 / Notices A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change wreier-aviles on DSK5TPTVN1PROD with NOTICES 1. Purpose The Exchange is proposing to amend Supplementary Material .02 to Rule 504 and Supplementary Material .01 to Rule 2009 consistent with a recently approved filing by the Chicago Board Options Exchange, Inc. (‘‘CBOE’’).3 Currently the Exchange’s Rules allow ISE to list options in the Short Term Option (‘‘STO’’ or ‘‘weekly’’) Program ‘‘on each of the next five consecutive Fridays that are business days.’’ 4 The filing which gave the Exchange authority to list five STO expirations specifically states that ‘‘the total number of consecutive expirations will be five, including any existing monthly or quarterly expirations.’’ 5 The Exchange is now proposing to amend its rules so that the next five STOs may be listed at one time, not including the monthly or quarterly options. The Exchange is also proposing to codify an existing practice by adding language stating that strikes may be listed up until and on the day of expiration. As proposed, the Exchange will have the ability to list a total of five STO expirations and that count of five would not include monthly or quarterly option expirations. The Exchange notes that this proposal would restrict the five listed STOs to those closest to the STO opening date. For example, if a class of options has five STOs listed with expiration dates in July, the other two listed expiration dates may not be in December. The Exchange believes that allowing otherwise would undermine the purpose of the STO Program. As examples of how this would work in practice, consider a situation in which a quarterly option expires week 1 and a monthly option expires week 3 from now, the proposal would allow the following expirations: week 1 quarterly option, week 2 weekly option, week 3 monthly option, week 4 weekly option, week 5 weekly option, week 6 weekly option, and week 7 weekly option.6 As another example, if a quarterly option expires week 3 and a monthly option expires week 5, the following 3 See Securities Exchange Act Release No. 70685 (October 15, 2013) 78 FR 62858 (October 22, 2013) (SR–CBOE–2013–096) (notice of filing; approval citation pending publication by the Commission). 4 See Supplementary Material .02 to Rule 504 and Supplementary Material .01 to Rule 2009. 5 See Securities Exchange Act Release No. 68318 (November 29, 2013 [sic]), 77 FR 72426 (December 5, 2012) (SR–ISE–2012–90). 6 The proposal would not allow, for example, for nothing to be listed week 7 but week 8 a weekly option. VerDate Mar<15>2010 14:45 Dec 16, 2013 Jkt 232001 expirations would be allowed: week 1 weekly option, week 2 weekly option, week 3 quarterly option, week 4 weekly option, week 5 monthly option, week 6 weekly option, week 7 weekly option. Next, the Exchange is proposing to add language to Supplementary Material .02(d) to Rule 504 and Supplementary Material .01(d) to Rule 2009 to state that additional STO series may be added up to, and including on, the expiration date of the series.7 Currently, Exchange rules state that the Exchange may open up to 20 initial series, and up to 10 additional series, for each option class that participates in the STO Program.8 The Exchange’s rules, however, are silent on when series may be added. In practice, however, the Exchange, along with the other exchanges, list additional series until the expiration day.9 The Exchange believes that codifying this practice will clarify authority that is not currently explicitly stated in its rules to add series up until the day of expiration. Given the short lifespan of STOs, the Exchange believes that the ability to list new series of options intraday is appropriate. The Exchange notes that the STO Program has been very well-received by market participants, in particular by retail investors. The Exchange believes that the current proposed revision to the STO Program will permit the Exchange to meet increased customer demand and provide market participants with the ability to hedge in a greater number of option classes and series. In addition, the proposed changes will codify an existing practice in the Exchange’s rules. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations thereunder, including the requirements of Section 6(b) of the Act.10 In particular, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 11 requirements that 7 The Exchange is also proposing to add language stating that the proposed provisions in Supplementary Material .02 to Rule 504 and Supplementary Material .01 to Rule 2009 will not contradict current provisions in ISE Rules. More specifically, the proposed provisions would not contradict Rules 504(f) and 2009(c)(2) respectively. The Exchange believes this addition will eliminate any confusion about when additional series may be added in the STO Program in comparison to other Exchange listing programs. 8 See Supplementary Material .02(c) and (d) to Rule 504, and Supplementary Material .01(c) and (d) to Rule 2009. 9 The Exchange notes that the Options Clearing Corporation (‘‘OCC’’) has the ability to accommodate series in the STO Program added intraday. 10 15 U.S.C. 78f(b). 11 15 U.S.C. 78f(b)(5). PO 00000 Frm 00108 Fmt 4703 Sfmt 4703 the rules of an exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, 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. Additionally, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 12 requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. In particular, the Exchange believes that expanding the STO Program will result in a continuing benefit to investors by giving them more flexibility to closely tailor their investment decisions. The Exchange also believes that expanding the STO Program will provide the investing public and other market participants with additional opportunities to hedge their investments, thus allowing these investors to better manage their risk exposure. With regard to the impact of this proposal on system capacity, the Exchange has analyzed its capacity and represents that it and the Options Price Reporting Authority (‘‘OPRA’’) have the necessary systems capacity to handle any potential additional traffic associated with this current amendment to the STO Program. The Exchange believes that its members will not have a capacity issue as a result of this proposal. The Exchange also represents that it does not believe this expansion will cause fragmentation of liquidity. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. To the contrary, the Exchange believes the proposal is pro-competitive. The proposed rule change is a competitive response to a recently approved filing by the CBOE,13 which the Exchange believes is necessary to permit fair competition among the options exchanges with respect to STO Programs. Moreover, the Exchange believes this proposed rule change will benefit investors by providing 12 Id. 13 See E:\FR\FM\17DEN1.SGM supra note 3. 17DEN1 Federal Register / Vol. 78, No. 242 / Tuesday, December 17, 2013 / Notices additional methods to trade options on liquid securities, and by providing greater ability to mitigate risk in managing large portfolios. Specifically, the Exchange believes that investors would benefit from the introduction and availability of additional series for investment, and as an additional tool for hedging risk in highly liquid securities. For all the reasons stated, the Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act, and believes the proposed change will enhance competition. 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. wreier-aviles on DSK5TPTVN1PROD with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the proposed rule change does not (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 14 and Rule 19b–4(f)(6) thereunder.15 The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Exchange stated that waiver of this requirement will promote fair competition among the exchanges by allowing the Exchange to list additional STO expirations in the same manner as the CBOE, and by clarifying that, like the CBOE, the Exchange may list new STO series up to, and including on, the expiration date. The Exchange also stated that it would be at a competitive disadvantage if it were not allowed to adopt the proposed rule changes 14 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). As required under Rule 19b–4(f)(6)(iii), the Exchange provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and the 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. 15 17 VerDate Mar<15>2010 14:45 Dec 16, 2013 Jkt 232001 contemporaneously with other exchanges. For these reasons, the Commission believes that the proposed rule change presents no novel issues, and waiver will allow the Exchange to remain competitive with other exchanges. Therefore, the Commission designates the proposed rule change to be operative upon filing.16 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. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. 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 (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR–ISE–2013–68 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–2013–68. 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 (http://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 16 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). PO 00000 Frm 00109 Fmt 4703 Sfmt 4703 76377 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– 2013–68 and should be submitted on or before January 7, 2014. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–29889 Filed 12–16–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [File No. 500–1] Makism3D Corp.; Order of Suspension of Trading December 13, 2013. It appears to the Securities and Exchange Commission that the public interest and the protection of investors require a suspension of trading in the securities of Makism3D Corp. (‘‘Makism3D’’) because of concerns regarding the accuracy and adequacy of information in the marketplace and potentially manipulative transactions in Makism3D’s common stock. Makism3D is a Nevada corporation based in Cambridge, United Kingdom. It is quoted on OTCBB and OTC Link under the symbol MDDD. The Commission is of the opinion that the public interest and the protection of investors require a suspension of trading in the securities of the above-listed company. Therefore, it is ordered, pursuant to Section 12(k) of the Securities Exchange Act of 1934, that trading in the securities of the above-listed company is suspended for the period from 9:30 a.m. EST on December 13, 2013 through 11:59 p.m. EST on December 27, 2013. 17 17 E:\FR\FM\17DEN1.SGM CFR 200.30–3(a)(12). 17DEN1

Agencies

[Federal Register Volume 78, Number 242 (Tuesday, December 17, 2013)]
[Notices]
[Pages 76375-76377]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-29889]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71033; File No. SR-ISE-2013-68]


Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change to the Short Term Option Series Program

December 11, 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 December 6, 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 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 Supplementary Material .02 to Rule 
504 and Supplementary Material .01 to Rule 2009 to allow the Exchange 
to list five Short Term Option Series at one time, and to specify that 
new series of Short Term Option Series may be listed up to, and 
including on, the expiration date. The text of the proposed rule change 
is available on the Exchange's Internet Web site at http://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.

[[Page 76376]]

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 amend Supplementary Material .02 to 
Rule 504 and Supplementary Material .01 to Rule 2009 consistent with a 
recently approved filing by the Chicago Board Options Exchange, Inc. 
(``CBOE'').\3\
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 70685 (October 15, 
2013) 78 FR 62858 (October 22, 2013) (SR-CBOE-2013-096) (notice of 
filing; approval citation pending publication by the Commission).
---------------------------------------------------------------------------

    Currently the Exchange's Rules allow ISE to list options in the 
Short Term Option (``STO'' or ``weekly'') Program ``on each of the next 
five consecutive Fridays that are business days.'' \4\ The filing which 
gave the Exchange authority to list five STO expirations specifically 
states that ``the total number of consecutive expirations will be five, 
including any existing monthly or quarterly expirations.'' \5\ The 
Exchange is now proposing to amend its rules so that the next five STOs 
may be listed at one time, not including the monthly or quarterly 
options. The Exchange is also proposing to codify an existing practice 
by adding language stating that strikes may be listed up until and on 
the day of expiration.
---------------------------------------------------------------------------

    \4\ See Supplementary Material .02 to Rule 504 and Supplementary 
Material .01 to Rule 2009.
    \5\ See Securities Exchange Act Release No. 68318 (November 29, 
2013 [sic]), 77 FR 72426 (December 5, 2012) (SR-ISE-2012-90).
---------------------------------------------------------------------------

    As proposed, the Exchange will have the ability to list a total of 
five STO expirations and that count of five would not include monthly 
or quarterly option expirations. The Exchange notes that this proposal 
would restrict the five listed STOs to those closest to the STO opening 
date. For example, if a class of options has five STOs listed with 
expiration dates in July, the other two listed expiration dates may not 
be in December. The Exchange believes that allowing otherwise would 
undermine the purpose of the STO Program.
    As examples of how this would work in practice, consider a 
situation in which a quarterly option expires week 1 and a monthly 
option expires week 3 from now, the proposal would allow the following 
expirations: week 1 quarterly option, week 2 weekly option, week 3 
monthly option, week 4 weekly option, week 5 weekly option, week 6 
weekly option, and week 7 weekly option.\6\ As another example, if a 
quarterly option expires week 3 and a monthly option expires week 5, 
the following expirations would be allowed: week 1 weekly option, week 
2 weekly option, week 3 quarterly option, week 4 weekly option, week 5 
monthly option, week 6 weekly option, week 7 weekly option.
---------------------------------------------------------------------------

    \6\ The proposal would not allow, for example, for nothing to be 
listed week 7 but week 8 a weekly option.
---------------------------------------------------------------------------

    Next, the Exchange is proposing to add language to Supplementary 
Material .02(d) to Rule 504 and Supplementary Material .01(d) to Rule 
2009 to state that additional STO series may be added up to, and 
including on, the expiration date of the series.\7\ Currently, Exchange 
rules state that the Exchange may open up to 20 initial series, and up 
to 10 additional series, for each option class that participates in the 
STO Program.\8\ The Exchange's rules, however, are silent on when 
series may be added. In practice, however, the Exchange, along with the 
other exchanges, list additional series until the expiration day.\9\ 
The Exchange believes that codifying this practice will clarify 
authority that is not currently explicitly stated in its rules to add 
series up until the day of expiration. Given the short lifespan of 
STOs, the Exchange believes that the ability to list new series of 
options intraday is appropriate.
---------------------------------------------------------------------------

    \7\ The Exchange is also proposing to add language stating that 
the proposed provisions in Supplementary Material .02 to Rule 504 
and Supplementary Material .01 to Rule 2009 will not contradict 
current provisions in ISE Rules. More specifically, the proposed 
provisions would not contradict Rules 504(f) and 2009(c)(2) 
respectively. The Exchange believes this addition will eliminate any 
confusion about when additional series may be added in the STO 
Program in comparison to other Exchange listing programs.
    \8\ See Supplementary Material .02(c) and (d) to Rule 504, and 
Supplementary Material .01(c) and (d) to Rule 2009.
    \9\ The Exchange notes that the Options Clearing Corporation 
(``OCC'') has the ability to accommodate series in the STO Program 
added intraday.
---------------------------------------------------------------------------

    The Exchange notes that the STO Program has been very well-received 
by market participants, in particular by retail investors. The Exchange 
believes that the current proposed revision to the STO Program will 
permit the Exchange to meet increased customer demand and provide 
market participants with the ability to hedge in a greater number of 
option classes and series. In addition, the proposed changes will 
codify an existing practice in the Exchange's rules.
 2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Act and the rules and regulations thereunder, including the 
requirements of Section 6(b) of the Act.\10\ In particular, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \11\ requirements that the rules of an exchange be 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in regulating, clearing, 
settling, processing information with respect to, and facilitating 
transactions in securities, 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.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    Additionally, the Exchange believes the proposed rule change is 
consistent with the Section 6(b)(5) \12\ requirement that the rules of 
an exchange not be designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers. In particular, the Exchange 
believes that expanding the STO Program will result in a continuing 
benefit to investors by giving them more flexibility to closely tailor 
their investment decisions. The Exchange also believes that expanding 
the STO Program will provide the investing public and other market 
participants with additional opportunities to hedge their investments, 
thus allowing these investors to better manage their risk exposure.
---------------------------------------------------------------------------

    \12\ Id.
---------------------------------------------------------------------------

    With regard to the impact of this proposal on system capacity, the 
Exchange has analyzed its capacity and represents that it and the 
Options Price Reporting Authority (``OPRA'') have the necessary systems 
capacity to handle any potential additional traffic associated with 
this current amendment to the STO Program. The Exchange believes that 
its members will not have a capacity issue as a result of this 
proposal. The Exchange also represents that it does not believe this 
expansion will cause fragmentation of liquidity.

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. To the contrary, the 
Exchange believes the proposal is pro-competitive. The proposed rule 
change is a competitive response to a recently approved filing by the 
CBOE,\13\ which the Exchange believes is necessary to permit fair 
competition among the options exchanges with respect to STO Programs. 
Moreover, the Exchange believes this proposed rule change will benefit 
investors by providing

[[Page 76377]]

additional methods to trade options on liquid securities, and by 
providing greater ability to mitigate risk in managing large 
portfolios. Specifically, the Exchange believes that investors would 
benefit from the introduction and availability of additional series for 
investment, and as an additional tool for hedging risk in highly liquid 
securities. For all the reasons stated, the Exchange does not believe 
that the proposed rule change will impose any burden on competition not 
necessary or appropriate in furtherance of the purposes of the Act, and 
believes the proposed change will enhance competition.
---------------------------------------------------------------------------

    \13\ See supra note 3.
---------------------------------------------------------------------------

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 proposed rule change does not (i) Significantly affect 
the protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative for 30 
days from the date on which it was filed, or such shorter time as the 
Commission may designate, the proposed rule change has become effective 
pursuant to Section 19(b)(3)(A) of the Act \14\ and Rule 19b-4(f)(6) 
thereunder.\15\
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written 
notice of its intent to file the proposed rule change, along with a 
brief description and the 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 asked the Commission to waive the 30-day operative 
delay so that the proposal may become operative immediately upon 
filing. The Exchange stated that waiver of this requirement will 
promote fair competition among the exchanges by allowing the Exchange 
to list additional STO expirations in the same manner as the CBOE, and 
by clarifying that, like the CBOE, the Exchange may list new STO series 
up to, and including on, the expiration date. The Exchange also stated 
that it would be at a competitive disadvantage if it were not allowed 
to adopt the proposed rule changes contemporaneously with other 
exchanges. For these reasons, the Commission believes that the proposed 
rule change presents no novel issues, and waiver will allow the 
Exchange to remain competitive with other exchanges. Therefore, the 
Commission designates the proposed rule change to be operative upon 
filing.\16\
---------------------------------------------------------------------------

    \16\ 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. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-ISE-2013-68 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-2013-68. 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 (http://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-2013-68 and should be 
submitted on or before January 7, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-29889 Filed 12-16-13; 8:45 am]
BILLING CODE 8011-01-P