[Federal Register Volume 72, Number 162 (Wednesday, August 22, 2007)]
[Notices]
[Pages 47105-47107]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-16527]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56263; File No. SR-ISE-2007-69]


Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change Relating to the Extension of a Pilot Period To Increase Position 
Limits and Exercise Limits for Equity Options and Options on the 
Nasdaq-100 Tracking Stock

August 15, 2007.
    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 August 13, 2007, 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 ISE. The 
Exchange has filed the proposal as a ``non-controversial'' 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 change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 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).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    ISE proposes to extend the time period for Exchange Rule 412 and 
Rule 414 position and exercise limits pilot program for equity option 
contracts and options on the Nasdaq-100 Index Tracking Stock (``QQQQ'') 
(``Pilot Program''). The text of the proposed rule change is available 
at ISE, the Commission's Public Reference Room, and http://www.ise.com.

[[Page 47106]]

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, ISE 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 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 Pilot Program provides for an increase to the standard position 
and exercise limits for equity option contracts and for options on 
QQQQs.\5\ The Pilot Program, after being extended on prior 
occasions,\6\ is set to expire on September 1, 2007.\7\ Specifically, 
the Pilot Program increased the applicable position and exercise limits 
for equity options and options on the QQQQ to the following levels:

------------------------------------------------------------------------
   Current equity option contract        Pilot program equity option
             limit \8\                          contract limit
------------------------------------------------------------------------
                         13,500                               25,000
                         22,500                               50,000
                         31,500                               75,000
                         60,000                              200,000
                         75,000                              250,000
------------------------------------------------------------------------
 Current QQQQ option contract limit  Pilot program QQQQ option contract
                                                               limit
------------------------------------------------------------------------
                        300,000                              900,000
------------------------------------------------------------------------

    The purpose of the proposed rule change is to extend the Pilot 
Program for an additional six-month period, until March 1, 2008. The 
Exchange believes that extending the Pilot Program for this additional 
period is warranted due to the positive feedback from members and for 
the reasons cited in the original rule filing that proposed the 
adoption of the Pilot Program.\9\ Additionally, the Exchange represents 
that it has not experienced any problems or difficulties relating to 
the Pilot Program since its inception. For these reasons, the Exchange 
requests that the Commission extend the Pilot Program until March 1, 
2008.
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 51295 (March 2, 
2005), 70 FR 11292 (March 8, 2005) (SR-ISE-2005-14) (``Pilot Program 
Notice'').
    \6\ See Securities Exchange Act Release Nos. 54335 (August 18, 
2006), 71 FR 50954 (August 28, 2006) (SR-ISE-2006-47); 53345 
(February 22, 2006), 71 FR 10579 (March 1, 2006) (SR-ISE-2006-10); 
and 52265 (August 15, 2005), 70 FR 48996 (August 22, 2005) (SR-ISE-
2005-39).
    \7\ See Securities Exchange Act Release No. 55311 (February 16, 
2007), 72 FR 8408 (February 26, 2007) (SR-ISE-2007-15).
    \8\ Except when the Pilot Program is in effect.
    \9\ See Pilot Program Notice, supra note 5.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \10\ in general, and furthers the objective of Section 
6(b)(5) of the Act \11\ in particular, in that it is designed to 
promote just and equitable principles of trade and to protect investors 
and the public interest.
---------------------------------------------------------------------------

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

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 forgoing rule change does not: (1) Significantly affect 
the protection of investors or the public interest; (2) impose any 
significant burden on competition; and (3) become operative for 30 days 
after the date of this filing, or such shorter time as the Commission 
may designate, it has become effective pursuant to Section 19(b)(3)(A) 
of the Act \12\ and Rule 19b-4(f)(6) thereunder.\13\
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    A proposed rule change filed under 19b-4(f)(6) normally may not 
become operative prior to 30 days after the date of filing.\14\ 
However, Rule 19b-4(f)(6)(iii) \15\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. The Exchange has requested that the 
Commission waive the 30-day operative delay. The Commission believes 
that waiving the 30-day operative delay is consistent with the 
protection of investors and in the public interest because it will 
allow the Pilot Program to continue uninterrupted. For this reason, the 
Commission designates that the proposed rule change become operative 
immediately.\16\
---------------------------------------------------------------------------

    \14\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires that a self-regulatory organization submit to 
the Commission 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. ISE has satisfied the five-day pre-filing 
requirement.
    \15\ Id.
    \16\ For the purposes only of waiving the 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 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 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:

[[Page 47107]]

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to [email protected]. Please include 
File No. SR-ISE-2007-69 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File No. SR-ISE-2007-69. 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 will also be available for 
inspection and copying at the principal office of 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 No. SR-ISE-2007-69 and should be 
submitted on or before September 12, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\17\
---------------------------------------------------------------------------

    \17\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-16527 Filed 8-21-07; 8:45 am]
BILLING CODE 8010-01-P