[Federal Register Volume 73, Number 153 (Thursday, August 7, 2008)]
[Notices]
[Pages 46112-46114]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-18072]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-58267; File No. SR-ISE-2008-59]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change To Amend Rule 2009 To Permit the Listing and Trading of
Additional Index Options Series That Do Not Meet Current Rule 2009
Requirements, if Such Options Series Are Listed and Traded on at Least
One Other National Securities Exchange
July 30, 2008.
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 July 30, 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 prepared by ISE. ISE filed the proposed
rule change as a ``non-controversial'' proposed rule change pursuant to
Section 19(b)(3)(A) of the
[[Page 46113]]
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.
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\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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
ISE proposes to amend Rule 2009 to permit the listing and trading
of additional index options series that do not meet current Rule 2009
requirements, if such options series are listed and traded on at least
one other national securities exchange. The text of the proposed rule
change is available at ISE, 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, ISE included statements
concerning the purpose of, and basis for, the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. 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 proposes to add new Supplementary Material .03 to Rule
2009 to permit the listing and trading of additional index options
series that do not meet current Rule 2009 requirements, if such options
series are listed on at least one other national securities exchange in
accordance with the applicable rules of such exchange for the listing
and trading of index options. For each additional options series listed
by the Exchange pursuant to proposed Supplementary Material .03, the
Exchange would submit a proposed rule change with the Commission that
is effective upon filing within the meaning of Section 19(b)(3)(A)
under the Act.
Rule 2009 provides the mechanism for the Exchange to list or open
options expiration month series on particular index options classes
approved for listing and trading on the Exchange. In general, up to a
six expiration month series may be listed at any one time. This
proposal seeks to permit the Exchange to list additional index options
expiration month series if another options exchange does so, regardless
of whether the additional series listing complies with the requirements
of Rule 2009.
Rule 2009 permits the Exchange to open options expiration month
series on approved index options classes as follows: (i) Consecutive
Month Series; (ii) Cycle Month Series; (iii) Long-Term Options Series;
(iv) Short-Term (1 week) Options Series; and (v) Quarterly Options
Series.
Consecutive Month Series
Under Rule 2009(a)(3), Consecutive Month Series options are a
series of options, within a particular class of stock index options,
having up to four consecutive expiration months which can be opened for
simultaneous trading. The shortest-term series permissible are series
initially having no more than two months to expiration.
Cycle Month Series
Under Rule 2009(a)(3), the Exchange may designate one expiration
cycle for each class of stock index options, consisting of four
calendar months occurring at three-month intervals. With respect to any
particular class of stock index options, Cycle Month Series options
expiring in three of the four cycle months designated by the Exchange
for that class may be traded simultaneously with the shortest-term
series initially having approximately three months to expiration.
Long-Term Option Series
Under Rule 2009(b), the Exchange may list series of options having
up to sixty months to expiration for any particular class of stock
index options. These Long-term Options Series may be traded
simultaneously with Consecutive Month Series options as well as Cycle
Month Series options.
Short Term (1 week) Option Series
Under Rule 2009(.01), the Exchange may open for trading, on any
business Friday, series of options that expire at the close of business
on the following Friday. The Exchange may select up to five currently
listed option classes on which Short Term Option Series may be opened.
Additionally, the Exchange may list Short Term Option Series on any
option classes that are selected by other options exchanges.
Quarterly Options Series
Under Rule 2009(.02), the Exchange may list and trade options
series that expire at the close of business on the last business day of
a calendar quarter. Quarterly Options Series for up to five currently
listed stock index options classes or options classes for options on
ETFs may be listed. The Exchange may also list Quarterly Options Series
on any options classes that are selected by other options exchanges.
Consistent with this proposal, the index options class must either
be specifically reviewed and approved by the Commission under Section
19(b)(2) of the Act and rules thereunder, or comply with Rule 2009(c),
for the Exchange to be able to list the additional series.
The ability of the Exchange to list and trade additional series of
an index options class that may not meet the requirements of Rule 2009
if another options exchange lists such expiration month series, is
appropriate and necessary in order to remain competitive and provide
customers with the full offering of index option products. Although the
proposal may result in an incremental increase in message and quote
traffic for systems of the Exchange and the Options Price Reporting
Authority (OPRA), the Exchange expects the operational impact of such
increase in quote traffic to be minimal.
In order for the Exchange to list any additional expiration month
series of an index option class pursuant to new Supplementary Material
.03 to Rule 2009: (1) Such series must be already listed on another
options exchange; (2) such series must belong to an index options class
that has been specifically reviewed and approved by the Commission
under Section 19(b)(2) of the Act or that complies with Rule 2009(c);
and (3) the Exchange must submit a proposed rule change with the
Commission that is effective upon filing within the meaning of Section
19(b)(3)(A) of the Act.\5\ In addition, the proposal would allow the
Exchange the ability to quickly list and trade additional expiration
month series of an index options class based on the listing of the
series by another options exchange.
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\5\ Rule 2009(c) provides the requirements that must be met
before those specific options groups may be traded on the Exchange
pursuant to Rule 19b-4(e) under the Act.
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2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to a
national securities exchange and, in particular, the requirements of
Section 6(b) of the Act.\6\ Specifically, the Exchange
[[Page 46114]]
believes the proposed rule change is consistent with the requirement of
Section 6(b)(5) of the Act \7\ that an exchange have rules that are
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, and, in general, to
protect investors and the public interest.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
ISE 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.
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 foregoing 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, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \8\ and Rule 19b-
4(f)(6) thereunder.\9\
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) under the Act
normally may not become operative prior to 30 days after the date of
filing.\10\ However, Rule 19b-4(f)(6)(iii) \11\ 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
Exchange asserts that this is appropriate and necessary in order to
remain competitive and provide customers with the full offering of
index option products. Additionally, this proposed rule change is based
on an American Stock Exchange rule change previously approved by the
Commission.\12\ 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 another self-regulatory
organization recently adopted a substantially similar rule change and
that this filing raising no new regulatory issues.\13\ The Commission
hereby grants the Exchange's request and designates the proposal as
operative upon filing.\14\
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\10\ In addition, Rule 19b-4(f)(6)(iii) under the Act requires a
self-regulatory organization to give the Commission written notice
of its intent to file 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
complied with this requirement.
\11\ Id.
\12\ See Securities Exchange Act Release No. 57916 (June 4,
2008), 73 FR 33125 (June 11, 2008) (Order, and Amendment No. 1
Thereto, to Amend Rule 903C to Permit the Listing and Trading of
Additional Index Options Series) (SR-AMEX-2008-14).
\13\ See supra note 12.
\14\ For purposes only of waiving the 30-day operative delay of
this proposal, the Commission has considered the proposed rule's
impact on efficiency, competition, and capital formation. 15 U.S.C.
78c(f).
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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 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 [email protected]. Please include
File No. SR-ISE-2008-59 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, Station Place, 100 F Street, NE., Washington,
DC 20549-1090.
All submissions should refer to File Number SR-ISE-2008-59. 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, 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
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-
2008-59 and should be submitted on or before August 28, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-18072 Filed 8-6-08; 8:45 am]
BILLING CODE 8010-01-P