[Federal Register Volume 78, Number 6 (Wednesday, January 9, 2013)]
[Notices]
[Pages 1901-1903]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-00197]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 3468570; File No. SR-ISE-2012-82]


Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change To Make Non-Substantive, Technical Corrections to ISE Rules

January 3, 2013.
    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 December 21, 2012, the International Securities Exchange, LLC 
(the ``Exchange'' or ``ISE'') 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 the self-
regulatory organization. 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 the 
Substance of the Proposed Rule Change

    The Exchange proposes to make a number of non-substantive, 
technical corrections to its rules. Examples of such technical 
corrections include updating ISE rule number citations and cross 
references, correcting typographical errors, deleting obsolete rule 
text, and updating references to outdated terms, such as changing 
references from the National Association of Securities Dealers 
(``NASD'') to Financial Industry Regulatory Authority (``FINRA''). The 
text of the proposed rule change is available on the Exchange's 
Internet Web site at 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 the 
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 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange is proposing to make a number of non-substantive, 
technical corrections to its rules. Examples of such technical 
corrections include updating ISE rule number citations and cross 
references, correcting typographical errors, deleting obsolete rule 
text, and updating references to outdated terms, such as changing 
references from NASD to FINRA. Following is a narrative description of 
each of the corrections:
     The Table of Contents to the ISE Rules is being amended to 
reflect that ISE Rule 718 is now ``Reserved'' since ISE Rule 718 
(Accommodation Liquidations (Cabinet Trades)) was deleted.
     The Table of Contents is being amended to make conforming 
changes to the title of ISE Rule 720 (Obvious and Catastrophic Errors) 
so that it matches the title as it appears in the rules.
     ISE Rule 210 (Liability for Payment of Fees) is being 
amended to update an incorrect rule cross-reference number in paragraph 
(a).
     ISE Rule 312 (Limitation on Affiliation between the 
Exchange and Members) is being amended to delete references in 
paragraph (a) to Maple Merger Sub LLC because that subsidiary no longer 
exists. Paragraphs (b) and (c) are being deleted since the Exchange is 
no longer affiliated with Direct Edge ECN LLC (``DE ECN''), DE ECN is 
no longer a facility of the Exchange, and ISE (including its 
affiliates) no longer maintains an ownership interest in Ballista 
Securities LLC. Since paragraphs (b) and (c) are being deleted, the 
opening paragraph no longer needs to be designated as paragraph (a), so 
the (a) is being deleted.
     ISE Rule 604 (Continuing Education for Registered Persons) 
is being amended to change a reference in paragraph (b) from NASD to 
FINRA and brackets are being changed to parentheses wherever they 
appear throughout the rule.
     ISE Rule 704 (Collection and Dissemination of Quotations) 
is being amended to change references in paragraphs (a) and (b) from 
Rule 11Ac1-1 to Rule 602 of Regulation NMS.
     ISE Rule 713 (Priority of Quotes and Orders) is being 
amended to update an incorrect rule cross-reference number in paragraph 
(a), as well as to add non-substantive words to correct the sentence 
structure of paragraph (a). Additionally, Supplementary Material .03 to 
ISE Rule 713 was amended to update an incorrect rule cross-reference 
number in paragraph (d).
     ISE Rule 715 (Types of Orders) is being amended to correct 
the defined term of ``Priority Customer Orders'' in paragraph (g), and 
to correct the defined term of ``Add Liquidity Order'' in paragraph 
(n). In addition, Supplementary Material .02 to ISE Rule 713 is being 
moved into ISE Rule 713 itself as new paragraphs (o), (p), and (q), 
since ISE has fully-migrated to its new trading system, Optimise. Thus, 
it is no longer necessary to separately maintain those order types in 
the Supplementary Material.
     ISE Rule 718 (Accommodation Liquidations (Cabinet Trades)) 
is being deleted in its entirety, since that trading functionality is 
not offered in Optimise, and therefore not possible on the Exchange. 
ISE Rule 718 is now ``Reserved.''
     ISE Rule 722 (Complex Orders) is being amended to delete 
the obsolete clause to ISE's Optimise platform in Supplementary 
Material .03 and .04. In addition, ISE Supplementary Material .05 is 
being amended to correct the defined term ``Priority Customer Orders'', 
to insert a missing word, and to update an incorrect rule cross-
reference number.
     ISE Rule 723 (Price Improvement Mechanism for Crossing 
Transactions) is being amended to delete paragraph (d)(6) since that 
trading functionality is not offered in Optimise. As a result, the 
corresponding sentence that cross-referenced paragraph (d)(6) is being 
deleted from Supplementary Material .05 and .09.

[[Page 1902]]

     ISE Rule 802 (Appointment of Market Makers) is being 
amended to delete obsolete references to ``Second Market Primary Market 
Makers'' in Supplementary Material .02, since ISE no longer operates a 
``Second Market.''
     ISE Rule 804 (Market Maker Quotations) is being amended to 
delete obsolete rule text in paragraph (g), since that rule text 
related to `Automated Quotation Adjustments' functionality contained in 
ISE's prior trading system which has been retired. The rule text that 
is contained in Supplementary Material .01 relates to `Automated 
Quotation Adjustments' functionality contained in ISE's current trading 
system, Optimise. Accordingly, the Exchange has moved the rule text in 
Supplementary Material .01 into paragraph (g) of ISE Rule 804 itself, 
since there is only one method for such functionality.
     ISE Rule 1503 (Failure to Obtain Reinstatement) is being 
amended to update an incorrect rule cross-reference number.
     ISE Rule 1615 (Disciplinary Functions) is being amended to 
change references in Supplementary Material .01 from NASD to FINRA.
     ISE Rule 1800 (Arbitration) is being amended to change 
references in paragraph (a) from the NASD Code of Arbitration to the 
FINRA Code of Arbitration, as well as update a number of corresponding 
FINRA rule cross-reference numbers contained in paragraphs (a), (c), 
and (d). Paragraph (b) is being amended to change a reference from NASD 
to FINRA.
     ISE Rule 2114 (Doing Business with the Public) is being 
amended to change a reference from NASD to FINRA.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(5) \3\ that an exchange have rules that 
are designed to prevent fraudulent and manipulative acts and practices, 
to promote just and equitable principles of trade, to remove 
impediments to and perfect the mechanism for a free and open market and 
a national market system, and, in general, to protect investors and the 
public interest. The Exchange believes it is appropriate to make these 
technical corrections to its rules so that Exchange members and 
investors have a clear and accurate understanding of the meaning of the 
Exchange's rules. By removing obsolete rule text, the Exchange is 
eliminating any potential for confusion about how its systems operate, 
particularly since the Exchange recently operated two trading systems 
while it migrated from its prior system to Optimise, its new trading 
system. By updating references from NASD to FINRA and related, 
corresponding rules, the Exchange is eliminating any inaccuracies in 
its rules. The Exchange further believes that the proposed rule change 
is not unfairly discriminatory because it treats all market 
participants equally and will not have an adverse impact on any market 
participant.
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    \3\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The proposed rule changes are non-substantive and therefore do not 
implicate the competition analysis.

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) \4\ of the Act and Rule 19b-
4(f)(6) \5\ 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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    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \6\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\7\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest.
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    \6\ 17 CFR 240.19b-4(f)(6).
    \7\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Exchange has asked the Commission to waive the 30-day operative 
delay so that the proposal may become operative immediately upon 
filing. The Commission believes that waiver of the operative delay is 
consistent with the protection of investors and the public interest 
because this rule change is not proposing any substantive changes and 
is merely correcting inaccuracies in the Exchange's rules. 
Additionally, the Exchange will be able to immediately remove obsolete 
rule text and correct inaccurate references and cross references in the 
Exchange's rules which will eliminate member confusion and provide 
clarity on how the rules apply. Therefore, the Commission designates 
the proposal operative upon filing.\8\
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    \8\ For purposes only of waiving the 30-day operative delay, the 
Commission has considered the proposed rule's impact on efficiency, 
competition, and capital formation. See 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 summarily may temporarily suspend 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 email to [email protected]. Please include 
File Number SR-ISE-2012-82 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 Number SR-ISE-2012-82. This file 
number should be included on the subject line if email 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

[[Page 1903]]

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 Web site viewing and printing in the Commission's Public 
Reference Room on official business days between the hours of 10:00 
a.m. and 3:00 p.m. Copies of such filing also will be available for 
inspection and copying at the principal offices 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-2012-82, and should be 
submitted on or before January 30, 2013.

    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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-00197 Filed 1-8-13; 8:45 am]
BILLING CODE 8011-01-P