[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text, and updating references to outdated terms, such as changing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