[Federal Register Volume 75, Number 47 (Thursday, March 11, 2010)]
[Notices]
[Pages 11608-11610]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-5220]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61640; File No. SR-ISE-2010-13]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change To Adopt a Minimum Quantity Order Type
March 3, 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 23, 2010, the International Securities Exchange, LLC
(the ``Exchange'' or the ``ISE'') filed with the Securities and
Exchange Commission (the ``Commission'') the proposed rule change as
described in Items I, II, and III below, which items have been prepared
by the Exchange. The ISE filed this proposal pursuant to Rule 19b-
4(f)(6) under the Act.\3\ 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\ 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 adopt a minimum quantity order type. The
text of the proposed rule change is as follows (deletions are in
[brackets]; additions are underlined):
Rule 715. Types of Orders
(a) through (k) no change.
(l) Minimum Quantity Orders. A minimum quantity order is an
order that is available for partial execution, but each partial
execution must be for a specified number of contracts or greater. If
the balance of the order after one or more partial executions is
less than the minimum, such balance is treated as all-or-none.
Rule 713. Priority of Quotes and Orders
(a) through (f) no change.
Supplementary Material to Rule 713
.01 No change.
.02 All-or none orders, as defined in Rule 715(c), and minimum
quantity orders, as defined in Rule 715(l), are contingency orders
that have no priority on the book. Such orders are maintained in the
system and remain available for execution after all other trading
interest at the same price has been exhausted.
.03 through .04 no change.
Rule 717. Limitations on Orders
* * * * *
Supplementary Material to Rule 717
.01-.03 No Change.
.04 [A] [n]Non-marketable all-or-none limit orders and non-
marketable minimum quantity orders shall be deemed ``exposed'' for
the purposes of paragraphs (d) and (e) one second following a
broadcast notifying market participants that such an order to buy or
sell a specified number of contracts at a specified price either
all-or-none or with a specified minimum quantity has been received
in the options series. For non-marketable minimum quantity orders,
the broadcast will specify the minimum quantity that can be
executed.
.05 No change.
[[Page 11609]]
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
1. Purpose
The Exchange seeks to allow members to enter minimum quantity
orders on the Exchange. A minimum quantity order is an order that is
available for partial execution, but each partial execution must be for
a specified number of contracts or greater. If the balance of the order
after one or more partial executions is less than the minimum, such
balance is treated as all-or-none. This order type currently is
available on other options exchanges.\4\
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\4\ See, e.g., Chicago Board Options Exchange (``CBOE'') Rule
43.2(a)(9)(E) (Types of Orders Handled) and Bats Exchange, Inc.
(``BATS'') Rule 21.1(d)(3) (Minimum Quantity Orders).
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Like all-or-none orders, minimum quantity orders are contingency
orders that are not displayed in the Exchange's best bid or offer.
However, the Exchange will disseminate to market participants an
indication that a minimum quantity order has been entered. As is the
case with all-or-none orders, pursuant to Rule 717(d) and (e), the
entering member will be required to wait at least one second before
entering a contra-side proprietary or solicited order that would
execute against the minimum quantity order. While the Exchange believes
it is unlikely that this order type would be used for crossing
purposes, disseminating the arrival of the order in the same manner as
all-or-none orders will minimize inadvertent violations of Rule 717(d)
or (e) and increase the opportunity for market participants to provide
liquidity to the orders.
2. Basis
The basis under the Securities Exchange Act of 1934 (the ``Act'')
for this proposed rule change is the requirement under Section 6(b)(5)
that an exchange have rules that are designed to promote just and
equitable principles of trade, and 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. In
particular, the proposal will provide members with an additional order
type that they may chose to utilize on the Exchange. Additionally,
under the proposed rule change minimum quantity orders will be exposed
to members so that there is a greater opportunity for market
participants to interact with such orders.
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: (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 after the date of the filing, or such
shorter time as the Commission may designate, it has become effective
pursuant to Section 19(b)(3)(A) of the Act \5\ and Rule 19b-4(f)(6)
thereunder.\6\
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\5\ 15 U.S.C. 78s(b)(3)(A).
\6\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change along with a
brief description and text of the proposed rule change, or such
shorted time as designated by the Commission. The Exchange provided
a copy of this rule filing to the Commission at least five business
days prior to the date of this filing.
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The Exchange believes the proposed rule change is non-controversial
in that it is similar to the rules of the CBOE and BATS. Further, the
Exchange believes the proposed rule change may assist investors by
exposing the minimum quantity orders, thus allowing a greater
opportunity for market participants to interact with such orders. 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 Number SR-ISE-2010-13 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-2010-13. 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 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 the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from
[[Page 11610]]
submissions. You should submit only information that you wish to make
publicly available. All submissions should refer to File Number SR-ISE-
2010-13 and should be submitted on or before April 1, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\7\
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\7\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-5220 Filed 3-10-10; 8:45 am]
BILLING CODE 8011-01-P