[Federal Register Volume 73, Number 128 (Wednesday, July 2, 2008)]
[Notices]
[Pages 38000-38001]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-14927]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-58020; File No. SR-ISE-2008-48]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change To Extend the Short Term Options Series Pilot Program
June 25, 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 June 23, 2008, the International Securities Exchange, LLC
(``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 substantially prepared by
the Exchange. The Exchange has designated this proposal as non-
controversial under Section 19(b)(3)(A)(iii) of the Act \3\ and Rule
19b-4(f)(6) thereunder,\4\ which renders the proposed rule change
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)(iii).
\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 ISE proposes to amend its rules to extend the Short Term
Options Series Pilot Program (``Pilot Program'') for an additional
year. 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 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
On July 12, 2005, the Commission approved the Pilot Program that
allows ISE to list and trade options series that expire one week after
being opened for trading (``Short Term Options Series'').\5\ Under the
terms of the Pilot Program, the Exchange can select up to five options
classes on which Short Term Options Series may be opened on any Short
Term Options Series opening date. The Exchange also may list Short Term
Options Series on any options class selected by other securities
exchanges employing a similar pilot program under their respective
rules.
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\5\ See Securities Exchange Act Release No. 52012 (July 12,
2005), 70 FR 41246 (July 18, 2005) (SR-ISE 2005-17).
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The Pilot Program was subsequently extended \6\ and the current
Pilot Program is set to expire on July 12, 2008.\7\ The purpose of this
proposed rule change is to extend the Pilot Program for an additional
year. The Exchange believes that Short Term Options Series provide
investors with a flexible and valuable tool to manage risk exposure,
minimize capital outlays, and be more responsive to the timing of
events affecting the securities underlying options contracts. Although
ISE has not listed any Short Term Options Series during the Pilot
Program, there has been investor interest in trading short term options
at the Chicago Board Options Exchange. For competitive reasons and in
order to have the ability to respond to customer interest in Short Term
Options Series, the Exchange proposes to extend its Pilot Program.
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\6\ See Securities Exchange Act Release No. 54117 (July 10,
2006), 71 FR 40564 (July 17, 2006) (SR-ISE 2006-37).
\7\ See Securities Exchange Act Release No. 56047 (July 11,
2007), 72 FR 39106 (July 17, 2007) (SR-ISE 2007-54).
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In the original proposal to establish the Pilot Program, the
Exchange stated that if it were to propose an extension or an expansion
of the Pilot Program, the Exchange would submit, along with any filing
proposing such amendments to the Pilot Program, a report (``Pilot
Program Report'') analyzing the Pilot Program, which would cover the
entire period during which the Pilot Program was in effect. Since the
Exchange has not listed any Short Term Options Series under the Pilot
Program, there is no data available to compile such a report at this
time. Therefore, the Exchange is not submitting a Pilot Program Report
with this proposal.
Finally, the Exchange represents that it has the necessary systems
capacity to support the listing of Short Term Options Series should it
determine to do so in the future.
2. Statutory Basis
The Exchange believes that short-term options series increase the
variety of listed options available to investors and provide investors
with a valuable tool to manage risk exposure, minimize capital outlays
and be more responsive to the timing of events affecting the securities
underlying options contracts. For these reasons, the Exchange believes
the proposed rule change is consistent with
[[Page 38001]]
Section 6(b) of the Act.\8\ Specifically, the Exchange believes the
proposed rule change is consistent with Section 6(b)(5) of the Act,\9\
which requires 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 for a free and open market and a national
market system, and, in general, to protect investors and the public
interest.
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\8\ 15 U.S.C. 78(f)(b).
\9\ 15 U.S.C. 78(f)(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes that 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
The Exchange has designated the proposed rule change as one that:
(1) Does not significantly affect the protection of investors or the
public interest; (2) does not impose any significant burden on
competition; and (3) does not become operative for 30 days from the
date of filing, or such shorter time as the Commission may designate if
consistent with the protection of investors and the public interest.
Therefore, the foregoing rule change has become effective pursuant to
Section 19(b)(3)(A) of the Act \10\ and subparagraph (f)(6) of Rule
19b-4 thereunder.\11\
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to provide 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 of the
proposed rule change, or such shorter time as designated by the
Commission. The Exchange has fulfilled this requirement.
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The Exchange has asked the Commission to waive the operative delay
to permit the proposed rule change to become operative prior to the
30th day after filing. The Commission has determined that waiving the
30-day operative delay of the Exchange's proposal is consistent with
the protection of investors and the public interest and will promote
competition because such waiver will allow ISE to continue the existing
Pilot Program without interruption.\12\ Therefore, the Commission
designates the proposal operative upon filing.
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\12\ 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 may summarily abrogate the 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 rule-comments@sec.gov. Please include
File No. SR-ISE-2008-48 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-2008-48. 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 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 No. SR-ISE-2008-48 and should be
submitted on or before July 23, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-14927 Filed 7-1-08; 8:45 am]
BILLING CODE 8010-01-P