73 FR 126 pgs. 36941-36943 - Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Definition of Qualified Contingent Trade
Type: NOTICEVolume: 73Number: 126Pages: 36941 - 36943
Docket number: [Release No. 34-58005; File No. SR-ISE-2008-45]
FR document: [FR Doc. E8-14765 Filed 6-27-08; 8:45 am]
Agency: Securities and Exchange Commission
Official PDF Version: PDF Version
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-58005; File No. SR-ISE-2008-45]
Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Definition of Qualified Contingent Trade
June 23, 2008.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 ("Act")1and Rule 19b-4 thereunder,2notice is hereby given that on June 12, 2008, the International Securities Exchange, LLC ("ISE" or "Exchange") filed with the Securities and Exchange Commission ("Commission") the proposed rule change as described in Items I and II below, which Items have been substantially prepared by the Exchange. The ISE designated the proposed rule change as "non-controversial" under Section 19(b)(3)(A)(iii) of the Act3and Rule 19b-4(f)(6) thereunder,4which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.
Footnotes:
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b-4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b-4(f)(6).
I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
The ISE is proposing to amend its rules to delete from the definition of Qualified Contingent Trade the requirement that such transactions are for a minimum size of 10,000 shares or $200,000 in transaction value. The text of the proposed rule change is available at the Exchange, the Commission's Public Reference Room, and http://www.ise.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 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 ISE has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange's rules currently define the term "Qualified Contingent Trade" according to the definition included in an exemptive order issued by the Commission on August 31, 2006.5Pursuant to the Exemptive Order, Qualified Contingent Trades are exempt from the trade-through restrictions of Regulation NMS.6The Exchange has incorporated an identical definition of Qualified Contingent Trades into ISE Rule 2107(c) so that such trades could be exempted from Exchange rules restricting intermarket trade-throughs.7
Footnotes:
5 See Securities Exchange Act Release No. 54389 (August 31, 2006), 71 FR 52829 (September 7, 2006) (Order Granting an Exemption for Qualified Contingent Trades from Rule 611(a) of Regulation NMS) ("Exemptive Order").
6 See Exemptive Order and 17 CFR 242.611.
7 See Securities Exchange Act Release No. 56671 (October 18, 2007), 72 FR 60400 (October 24, 2007) (SR-ISE-2007-88).
On April 4, 2008, the Commission issued a revised exemptive order eliminating one of the elements of the original Qualified Contingent Trade definition.8Based upon a request from the Chicago Board Options Exchange, Incorporated, the Revised Exemptive Order deleted the minimum size conditions of 10,000 shares or $200,000, which were part of the original definition. The Exchange proposes to eliminate these size conditions from its own definition of Qualified Contingent Trade in order to operate its marketplace in a manner consistent with the Revised Exemptive Order.
Footnotes:
8 See Securities Exchange Act Release No. 57620 (April 4, 2008), 73 FR 19271 (April 9, 2008) (Order Modifying the Exemption for Qualified Contingent Trades from Rule 611(a) of Regulation NMS) ("Revised Exemptive Order").
Accordingly, the Exchange proposes to amend its Rule 2107(c)(4)(ii) to eliminate any minimum size conditions in its definition of the term Qualified Contingent Trade.
2. Statutory Basis
The Exchange believes that the proposal is consistent with Section 6(b) of the Act,9in general, and Section 6(b)(5) of the Act,10in particular, in that it is 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 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.
Footnotes:
9 15 U.S.C. 78f.
10 15 U.S.C. 78f(b)(5).
B. Self-Regulatory Organization's Statement on Burden on Competition
The proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others
The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested parties.
III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action
Because the proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days after the date of 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 Act11and subparagraph (f)(6) of Rule 19b-4 thereunder.12As required under Rule 19b-4(f)(6)(iii),13the ISE provided 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.
Footnotes:
11 15 U.S.C. 78s(b)(3)(A).
12 17 CFR 240.19b-4(f)(6).
13 17 CFR 240.19b-4(f)(6)(iii).
A proposed rule change filed under Rule 19b-4(f)(6) normally may not become operative prior to the 30th day after the date of filing.14However, Rule 19b-4(f)(6)(iii)15permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The ISE requested that the Commission waive the 30-day operative delay for "non-controversial" proposals under Rule 19b-4(f)(6)16and make the proposed rule change effective and operative upon filing. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest. The Commission notes that the proposed language is identical to language contained in the Revised Exemptive Order.17In addition, the Commission notes that the Chicago Stock Exchange, Inc. recently made identical changes to its qualified contingent trade definition.18Accordingly, the Commission designates the proposed rule change operative upon filing with the Commission.19
Footnotes:
14 Id .
15 Id .
16 Id .
17 See supra note 8.
18 See Securities Exchange Act Release No. 57767 (May 2, 2008), 73 FR 26174 (May 8, 2008) (SR-CHX-2008-06).
19 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f).
At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate the 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 ( http://www.sec.gov/rules/sro.shtml ); or
• Send an e-mail to rule-comments@sec.gov. Please include File Number SR-ISE-2008-45 on the subject line.
Paper Comments
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-ISE-2008-45. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( 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 inspection and copying 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 such filing also will be available for inspection and copying at the principal office of the ISE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-ISE-2008-45 and should be submitted on or before July 21,2008.
Footnotes:
20 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.20
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-14765 Filed 6-27-08; 8:45 am]
BILLING CODE 8010-01-P