[Federal Register Volume 68, Number 17 (Monday, January 27, 2003)]
[Notices]
[Pages 3909-3910]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-1705]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-47212; File No. SR-ISE-2002-27]


Self-Regulatory Organizations; Order Granting Approval of 
Proposed Rule Change by the International Securities Exchange, Inc., 
Relating to the Repeal of Limitations on Orders

January 17, 2003.
    On November 21, 2002, the International Securities Exchange, Inc. 
(``ISE'' or ``Exchange''), filed with the Securities and Exchange 
Commission (``Commission''), pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change relating to the repeal of 
limitations on orders. Notice of the proposed rule change was published 
for comment in the Federal Register on December 16, 2002.\3\ No 
comments were received on the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 46959 (December 6, 
2002), 67 FR 77115.
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    The Exchange proposes to repeal the provision in its Rule 717 that 
prohibits Electronic Access Members (``EAMs'') from sending in more 
than one order every 15 seconds for the same beneficial owner in 
options on the same underlying security. The ISE adopted this ``speed 
bump'' in 2000 to protect ISE market makers from exposure across 
multiple series of options if they receive orders in many series at the 
same time.\4\ The Exchange now represents that the rule has been 
outmoded by the development of sophisticated risk management tools and 
that eliminating this restriction will provide EAMs and

[[Page 3910]]

their customers with enhanced access to the ISE.
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    \4\ See Securities Exchange Act Release No. 44017 (February 28, 
2001), 66 FR 13820 (March 7, 2001).
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    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange.\5\ Elimination 
of the ``speed bump'' will remove an impediment to trading created only 
to limit the market risk undertaken by ISE market makers. Additionally, 
the change should permit faster entry and execution of orders on the 
Exchange, thereby providing investors with improved services. 
Therefore, the Commission believes that the proposal is consistent with 
Section 6(b)(5) of the Act,\6\ which requires, among other things, that 
the rules of an exchange be designed 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 
to protect investors and the public interest.
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    \5\ In approving this proposal, the Commission has considered 
the proposed rule's impact on efficiency, competition, and capital 
formation. 15 U.S.C. 78(c)(f).
    \6\ 15 U.S.C. 78f(b)(5).
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    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\7\ that the proposed rule change (File No. SR-ISE-2002-27) be, and 
it hereby is, approved.
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    \7\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-1705 Filed 1-24-03; 8:45 am]
BILLING CODE 8010-01-P