[Federal Register Volume 68, Number 189 (Tuesday, September 30, 2003)]
[Notices]
[Pages 56357-56358]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-24755]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-48530; File No. SR-ISE-2003-15]


Self-Regulatory Organizations; Order Approving Proposed Rule 
Change and Amendment No. 1 Thereto, by the International Securities 
Exchange, Inc. Relating to the Limitation of Liability of the Options 
Clearing Corporation to Exchange Members

September 24, 2003.
    On May 29, 2003, the International Securities Exchange, Inc. 
(``ISE'' or ``Exchange'') submitted to 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 to provide that the Options 
Clearing Corporation (``OCC'') will have no liability to ISE Members, 
with respect to the use, non-use, or inability to use the Options 
Intermarket Linkage (``Linkage''). The ISE filed Amendment No. 1 to the 
proposal on July 30, 2003.\3\ The proposed rule change, as amended, was 
published for comment in the Federal Register on August 19, 2003.\4\ 
The Commission received no comments on the proposed rule change, as 
amended. This order approves the proposed rule change, as amended.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See letter from Mike Simon, Senior Vice President and 
General Counsel, ISE, to Nancy Sanow, Assistant Director, Division 
of Market Regulation, Commission, dated July 30, 2003 (``Amendment 
No. 1''). In Amendment No. 1, the Exchange submitted a technical 
correction to clarify that the proposed rule change would establish 
ISE Rule 1905.
    \4\ Securities Exchange Act Release No. 48321 (August 12, 2003), 
68 FR 49829.
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    The Commission finds that the proposed rule change, as amended, is 
consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national securities exchange \5\ 
and, in particular, the requirements of section 6(b) of the Act \6\ and 
the rules and regulations thereunder. The Commission finds that the 
proposed rule change, as amended, is consistent with section 6(b)(5) of 
the Act,\7\ which requires, among other things, that the rules of the 
Exchange be designed to foster cooperation and coordination with 
persons engaged in regulation, 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.
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    \5\ In approving this proposed rule change, as amended, the 
Commission notes that it has considered the proposed rule's impact 
on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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    The Commission notes that the ISE, along with the other exchanges 
that are Participants in the Linkage Plan, entered into an agreement 
with the OCC, which operates the central core or ``hub'' to and from 
which all Linkage orders are routed.\8\ In the Agreement, the ISE 
committed to file a proposed rule change with the Commission that would 
limit the liability of the OCC to ISE

[[Page 56358]]

Members. The Commission believes that this proposed rule change, as 
amended, should foster cooperation and promote a relationship between 
the ISE and the OCC that is conducive to the effective operation of the 
Linkage.
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    \8\ Linkage Project and Facilities Management Agreement (``the 
Agreement'') (January 30, 2003).
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    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\9\ that the proposed rule change, as amended, (File No. SR-ISE-
2003-15) be, and it hereby is, approved.
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    \9\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-24755 Filed 9-29-03; 8:45 am]
BILLING CODE 8010-01-P