[Federal Register: December 16, 2002 (Volume 67, Number 241)]
[Notices]
[Page 77115-77116]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16de02-87]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-46959; File No. SR-ISE-2002-27]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the International Securities Exchange, Inc., Relating to the
Repeal of Limitations on Orders
December 6, 2002.
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 November 21, 2002, the International Securities Exchange, Inc.
(``ISE'' or ``Exchange''), filed with the Securities and Exchange
Commission (``Commission'') the proposed rule change as described in
Items I, II, and III below, which Items have been prepared by the ISE.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is proposing to repeal the provision in Rule 717 that
prohibits Electronic Access Members (``EAMs'') from sending in more
than one order every 15 seconds for the same beneficial owner in
options on the same underlying security. Below is the text of the
proposed rule change. Proposed deletions are in [brackets].
* * * * *
Rule 717. Limitations on Orders
* * * * *
[(h) Multiple Orders for the Same Beneficial Account.
Members shall not cause the entry of more than one order every
fifteen (15) seconds for the account of the same beneficial owner in
options on the same underlying security; provided, however that this
shall not apply to multiple orders in different series of options on
the same underlying security if such orders are part of a spread.]
* * * * *
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 ISE 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
[[Page 77116]]
may be examined at the places specified in Item IV below. The ISE has
prepared summaries, set forth in sections A, B, and C below, of the
most significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the rule filing is to repeal the ISE's ``15-second
speed bump.'' This rule prohibits EAMs from sending in more than one
order every 15 seconds for the same beneficial owner in options on the
same underlying security. The ISE adopted this speed bump in 2000 to
protect ISE market makers from exposure across multiple series of
options if they receive orders in many series at the same time.\3\
However, since adopting this rule, more sophisticated risk management
tools have been developed, permitting market makers to limit risk on a
market-wide basis. Accordingly, this rule is no longer necessary. Also,
eliminating this restriction on trading will provide EAMs and their
customers with enhanced access to the ISE.
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 44017 (February 28,
2001), 66 FR 13820 (March 7, 2001).
---------------------------------------------------------------------------
2. Statutory Basis
The basis under the Act for this proposed rule change is the
requirement under section 6(b)(5) \4\ 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.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
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 Exchange 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
Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) By order approve such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule
change should be disapproved.
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. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609.
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. Copies of such filing will also be
available for inspection and copying at the principal office of the
ISE. All submissions should refer to File No. SR-ISE-2002-27 and should
be submitted by January 6, 2003.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\5\
---------------------------------------------------------------------------
\5\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-31552 Filed 12-13-02; 8:45 am]
BILLING CODE 8010-01-P