[Federal Register Volume 75, Number 35 (Tuesday, February 23, 2010)]
[Notices]
[Pages 8158-8160]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-3465]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61522; File No. SR-ISE-2010-12]


Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change To Modify Trading Hours for Foreign Currency Options

February 16, 2010.
    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 February 2, 2010, 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

[[Page 8159]]

have been prepared by the Exchange. The Exchange has filed the proposal 
as a ``non-controversial'' proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ 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

    The Exchange proposes to amend ISE Rule 2210 regarding the trading 
hours for foreign currency options (``FX Options'') traded on the 
Exchange. The text of the proposed rule change is available on the 
Exchange's Web site http://www.ise.com, at the principal office of the 
Exchange, and at the Commission's Public Reference Room.

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 Exchange 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

1. Purpose
    The purpose of this filing is to amend ISE Rule 2210 regarding the 
trading hours for FX Options traded on the Exchange. Currently, under 
ISE Rule 2210(a), FX Options may be traded on the Exchange between the 
hours of 9:30 a.m. and 4:15 p.m. Eastern time, except on the last day 
of trading during expiration week, in which case trading ceases at 12 
p.m. Eastern time. ISE now proposes to open trading in FX Options at 
7:30 a.m. Eastern time, two hours earlier than the current opening 
time. In support of this proposed rule change, ISE will ensure that 
quotes and trades are disseminated over the Options Price Reporting 
Authority during the time FX Options are open for trading on the 
Exchange. Further, the Exchange notes that FX Options are listed and 
traded only on ISE. As such, (1) FX Options are not fungible with 
foreign currency options listed by any other exchange, and (2) orders 
in FX Options will not trade at inferior prices, thus preserving 
intermarket protection against trade-throughs.
    In support of this proposed rule change, the Exchange notes that 
there are several market centers that account for a significant portion 
of all foreign exchange transactions and which are active in the 
foreign exchange markets prior to the Exchange's current opening time. 
By opening trading in FX Options at 7:30 a.m. Eastern time, ISE hopes 
to attract new participants and liquidity from Western Europe, 
specifically the United Kingdom. According to the Bank for 
International Settlements' Triennial Central Bank Survey of Foreign 
Exchange and Derivatives Market Activity in 2007, trading activity in 
the United Kingdom accounts for approximately 34% of foreign exchange 
transactions. Although foreign exchange trading occurs 24 hours a day, 
trading activity at each market center is consolidated into 
approximately 8-10 hours per day. In the United Kingdom, specifically 
in London, the most active trading times correspond to between 2 a.m. 
Eastern time and 12 p.m. Eastern time. In the United States, 
specifically in New York, trading is most active between 8 a.m. Eastern 
time and 5 p.m. Eastern time. The overlap in trading hours between the 
two market centers results in a period of concentrated liquidity and is 
often considered a peak time for transactions in the foreign exchange 
market. That hypothesis is also supported by the fact that key economic 
statistics for North America are traditionally released prior to 9:30 
a.m. Eastern time.\5\
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    \5\ The Bureau of Labor Statistics releases Consumer Price Index 
(CPI) data at 8:30 a.m. Eastern time, and the Bureau of Economic 
Analysis releases quarterly Gross Domestic Product data at 8:30 a.m. 
Eastern time. Similarly, Statistics Canada releases Canadian CPI 
data at 7 a.m. Eastern time.
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    Foreign currency futures listed on the Chicago Mercantile Exchange 
(``CME'') and the Intercontinental Exchange (``ICE'') are available for 
trading virtually 24 hours a day. The CME also provides virtually an 
all day market for trading in options contracts on foreign currency 
futures.\6\ Several ISE members are also members of CME and ICE, and 
actively trade foreign exchange derivative products at those two 
exchanges. ISE believes amending its rule to allow for an earlier 
opening will attract greater participation in the Exchange's FX 
Options.
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    \6\ CME's trading hours are available at http://www.cmegroup.com/trading_hours/fx-hours.html.
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2. Statutory Basis
    The basis under the Securities Exchange Act of 1934 (``Exchange 
Act'') for this proposed rule change is found in Section 6(b)(5). 
Specifically, the Exchange believes the proposed rule change is 
consistent with Section 6(b)(5) requirements that the rules of an 
exchange be designed to promote just and equitable principles of trade, 
serve 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. In particular, permitting trading to 
begin earlier in the day will permit investors greater opportunity to 
participate in the market, thereby removing an impediment to trading.

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

    Because the foregoing 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 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) \7\ of the Act and Rule 19b-
4(f)(6) \8\ thereunder. 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.
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(6).
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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

[[Page 8160]]

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 proposal 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-2010-12 on the subject line.

Paper Comments

    Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File No. SR-ISE-2010-12. 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 changes 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 Web site viewing and 
printing 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 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 No. SR-ISE-2010-12 and should be 
submitted on or before March 16, 2010.

    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,
Deputy Secretary.
[FR Doc. 2010-3465 Filed 2-22-10; 8:45 am]
BILLING CODE 8011-01-P