[Federal Register Volume 78, Number 126 (Monday, July 1, 2013)]
[Notices]
[Pages 39390-39392]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-15614]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69853; File No. SR-ISE-2013-41]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change To Extend the Price Improvement Mechanism Pilot Program
June 25, 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 June 21, 2013, the International Securities Exchange, LLC (the
``Exchange'' or the ``ISE'') filed with the Securities and Exchange
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 Substance
of the Proposed Rule Change
The ISE proposes to extend two pilot programs related to its Price
Improvement Mechanism (``PIM''). The text of the proposed rule change
is available on the Exchange's Web site www.ise.com, at the principal
office of
[[Page 39391]]
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 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 currently has two pilot programs related to its
PIM.\3\ The current pilot period provided in paragraphs .03 and .05 of
the Supplementary Material to Rule 723 is set to expire on July 18,
2013.\4\ Paragraph .03 provides that there is no minimum size
requirement for orders to be eligible for the Price Improvement
Mechanism. Paragraph .05 concerns the termination of the exposure
period by unrelated orders. In accordance with the Approval Order, the
Exchange has continually submitted certain data in support of extending
the current pilot programs. The Exchange proposes to extend these pilot
programs in their present form, through July 18, 2014, to give the
Exchange and the Commission additional time to evaluate the effects of
these pilot programs before the Exchange requests permanent approval of
the rules. To aid the Commission in its evaluation of the PIM
Functionality, ISE will also continue to provide additional PIM-related
data as requested by the Commission.
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\3\ See Securities Exchange Act Release Nos. 50819 (December 8,
2004), 69 FR 75093 (December 15, 2004) (SR-ISE-2003-06) (Approving
the PIM pilot (the ``Approval Order'')); 52027 (July 13, 2005), 70
FR 41804 (July 20, 2005) (SR-ISE-2005-30); 54146 (July 14, 2006), 71
FR 41490 (July 21, 2006) (SR-ISE-2006-39); 56106 (July 19, 2007), 72
FR 40914 (July 25, 2007) (SR-ISE-2007-64); 56156 (July 27, 2007), 72
FR 43305 (August 3, 2007) (SR-ISE-2007-66); 58197 (July 18, 2008),
73 FR 43810 (July 28, 2008) (SR-ISE-2008-60); 60333 (July 17, 2009),
74 FR 36792 (July 24, 2009) (SR-ISE-2009-52); 62513 (July 16, 2010),
75 FR 43221 (July 23, 2010) (SR-ISE-2010-75); and 64931 (July 20,
2011), 76 FR 44642 (July 26, 2011) (SR-ISE-2011-41).
\4\ See Securities Exchange Act Release No. 67202 (June 14,
2012), 77 FR 36589 (June 19, 2012) (SR-ISE-2012-54).
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2. Basis
The basis under the Securities Exchange Act of 1934 (the ``Exchange
Act'') for this proposed rule change is found in Section 6(b)(5), in
that the proposed rule change is designed to promote just and equitable
principles of trade, remove impediments to and perfect the mechanisms
of a free and open market and a national market system and, in general,
to protect investors and the public interest. In particular, the
Exchange believes the pilot programs are consistent with the Exchange
Act because they provide opportunity for price improvement for all
orders executed in the Exchange's Price Improvement Mechanism. Further,
the Exchange believes that the data demonstrates that there is
sufficient investor interest and demand to extend the pilot programs
for an additional twelve months. The Exchange further believes it is
appropriate to extend the pilot programs to provide the Exchange and
Commission more data upon which to evaluate the rules.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Exchange Act. Specifically, the
Exchange believes that, by extending the expiration of the pilot
programs, the proposed rule change will allow for further analysis of
the PIM. In doing so, the proposed rule change will also serve to
promote regulatory clarity and consistency, thereby reducing burdens on
the marketplace and facilitating investor protection.
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 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 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)(ii) of the Act \5\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\6\
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\5\ 15 U.S.C. 78s(b)(3)(A)(ii).
\6\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
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, 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
Commission deems this requirement to have been met.
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A proposed rule change filed under Rule 19b-4(f)(6) \7\ normally
does not become operative for 30 days after the date of filing.
However, pursuant to Rule 19b-4(f)(6)(iii) \8\ the Commission may
designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange requested
that the Commission waive the 30-day operative delay. The Exchange
noted that such waiver will permit the pilot programs to continue
without interruption.
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\7\ 17 CFR 240.19b-4(f)(6).
\8\ 17 CFR 240.19b-4(f)(6)(iii).
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The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest, as
it will allow the pilot programs to continue uninterrupted, thereby
avoiding any potential investor confusion that could result from a
temporary interruption in the pilot program. Further, the Commission
notes that, because the filing was submitted for immediate
effectiveness on June 21, 2013, the fact that the current rule
provisions do not expire until July 18, 2013 will afford interested
parties the opportunity to comment on the proposal before the Exchange
requires it to become operative. For this reason, the Commission
designates the proposed rule change to be operative on July 18,
2013.\9\
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\9\ For purposes only of waiving the 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:
[[Page 39392]]
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-2013-41 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-2013-41. 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 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., located at
100 F Street NE., Washington, DC 20549. 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 Number SR-ISE-
2013-41 and should be submitted on or before July 22, 2013.
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\10\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-15614 Filed 6-28-13; 8:45 am]
BILLING CODE 8011-01-P