[Federal Register Volume 73, Number 193 (Friday, October 3, 2008)]
[Notices]
[Pages 57720-57722]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-23409]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58645; File No. SR-ISE-2008-72]


Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change Relating to Foreign Currency Options Closing Settlement Value

September 25, 2008.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on September 23, 2008, the International Securities Exchange, LLC 
(the ``Exchange'' or the ``ISE'') filed with the Securities and 
Exchange Commission (``Commission'') the proposed rule change as 
described in Items I, II, and III below, which items have been 
substantially prepared by the Exchange. 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The ISE proposes to amend its rules regarding Foreign Currency 
Options (``FX Options'').\3\ The text of the proposed rule amendment is 
as follows, with deletions in [brackets] and additions in italics:
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    \3\ ISE began trading FX options on April 17, 2007 pursuant to 
Commission approval. See Securities Exchange Act Release No. 55575 
(April 3, 2007), 72 FR 17963 (April 10, 2007).

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[[Page 57721]]

Rule 2212. Foreign Currency Options Closing Settlement Value

    (a) The closing settlement value shall be the day's announced Noon 
Buying Rate, as determined by the Federal Reserve Bank of New York, on 
the last trading day during expiration week. If the Noon Buying Rate is 
not announced by [2] 5:00 p.m. Eastern time, the closing settlement 
value will be the most recently announced Noon Buying Rate, unless the 
Exchange determines to apply an alternative closing settlement value as 
a result of extraordinary circumstances. In the event the Noon Buying 
Rate is not published for an underlying currency, the Exchange will 
apply the WM/Reuters Closing Spot rate to determine the closing 
settlement value. If the Federal Reserve Bank of New York determines to 
publish a Noon Buying Rate in the future for a currency for which it 
currently does not publish such rate, the Exchange will apply the Noon 
Buying Rate in place of the WM/Reuters Composite Spot rate to determine 
the closing settlement value for such currency.
    (b)-(c) No Change.
* * * * *

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 self-regulatory organization 
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 self-regulatory organization 
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

    (a) Purpose--ISE proposes to amend its rules regarding FX Options. 
Specifically, the Exchange proposes to amend its FX Options closing 
settlement value rule by changing the reference time from 2 p.m. 
Eastern time to 5 p.m. Eastern time. ISE's current rule for determining 
closing settlement value for FX Options states that the closing 
settlement value shall be the day's announced ``Noon Buying Rate,'' as 
determined by the Federal Reserve Bank of New York, on the last trading 
day during expiration week. ISE Rule 2212(a) further states that if the 
Noon Buying Rate is not announced by 2 p.m. Eastern time, the closing 
settlement value will be the most recently announced Noon Buying 
Rate.\4\ The Exchange now proposes to amend its FX options closing 
settlement value rule by changing the reference time from 2 p.m. to 5 
p.m. While the Noon Buying Rate is still established by the Federal 
Reserve Bank of New York, the Noon Buying Rate will soon be 
disseminated and displayed at a later time, albeit on the same day. 
This proposed rule change will allow the Exchange to continue to rely 
on this industry-recognized value and do so without causing any 
disruption in the calculation of the closing settlement value for FX 
Options.
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    \4\ Under ISE Rule 2212, in the event the Federal Reserve Bank 
of New York does not maintain or publish a Noon Buying Rate for an 
underlying currency, ISE will apply the WM/Reuters Closing Spot rate 
to determine the closing settlement value.
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    The Exchange is not proposing to make any changes to its FX Options 
rules other that to change the reference time found in ISE Rule 
2212(a).
    (b) Basis--The Exchange believes the proposed rule change is 
consistent with the Securities Exchange Act of 1934 (the ``Act'') and 
the rules and regulations under the Act applicable to a national 
securities exchange and, in particular, the requirements of Section 
6(b) of the Act.\5\ Specifically, the Exchange believes the proposed 
rule change is consistent with Section 6(b)(5) of the Act's \6\ 
requirements that the rules of a national securities exchange be 
designed to promote just and equitable principles of trade, to prevent 
fraudulent and manipulative acts and, in general, to protect investors 
and the public interest. In particular, the proposed rule change will 
allow the Exchange to continue to rely on an industry-recognized value 
to determine the closing settlement value for FX Options traded on the 
Exchange.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
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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

    This proposed rule change does not significantly affect the 
protection of investors or the public interest, does not impose any 
significant burden on competition, and, by its terms, does not become 
operative for 30 days after the date of the filing, or such shorter 
time as the Commission may designate if consistent with the protection 
of investors and the public interest. The Exchange 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 the 
proposed rule change as required by Rule 19b-4(f)(6).\7\ For the 
foregoing reasons, the Exchange believes the proposed rule filing 
qualifies for expedited approval as a ``non-controversial'' rule change 
under paragraph (f)(6) of Rule 19b-4 of the Act.\8\
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    \7\ 17 CFR 240.19b-4(f)(6).
    \8\ The Commission notes that it does not approve rule changes 
filed under paragraph (f)(6) of Rule 19b-4 of the Act.
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    The Exchange believes the proposed rule change is non-controversial 
in that the only change proposed herein is to the reference time used 
by the Exchange to determine the closing settlement value for FX 
Options. The Exchange also believes that the proposed rule change does 
not raise any new, unique or substantive issues, and is beneficial for 
competitive purposes and to promote a free and open market for the 
benefit of investors.
    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

[[Page 57722]]

Number SR-ISE-2008-72 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-2008-72. 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 the filing also 
will be available for inspection and copying at the principal office of 
the Exchange. 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-
2008-72 and should be submitted on or before October 24, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-23409 Filed 10-2-08; 8:45 am]
BILLING CODE 8011-01-P