[Federal Register: November 28, 2003 (Volume 68, Number 229)]
[Notices]
[Page 66909-66910]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28no03-129]
[[Page 66909]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-48811; File No. SR-ISE-2003-25]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change and Amendment No. 1 Thereto by
the International Stock Exchange, Inc. To Amend Rules 713 and 715 To
Add Definitions for All-or-None Orders, Stop Orders and Stop Limit
Orders
November 20, 2003.
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 October 16, 2003, the International Stock 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 Exchange
has filed the proposal as a ``non-controversial'' rule change pursuant
to section 19(b)(3)(A)(iii) of the Act,\3\ and Rule 19b-4(f)(6)
thereunder,\4\ which renders the proposal effective upon filing with
the Commission.\5\ On November 13, 2003, the ISE filed Amendment No. 1
to the proposed rule change.\6\ 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).
\4\ 17 CFR 240.19b-4(f)(6)(iii).
\5\ The ISE provided a five-day written notice to the Commission
of its intent to file the proposal. The ISE has requested the
Commission to waive the 30-day operative delay. See Rule 19b-
4(f)(6)(iii) under the Act. 17 CFR 240.19b-4(f)(6)(iii).
\6\ See letter from Katherine Simmons, Vice President and
Associate General Counsel, ISE, to Theodore Lazo, Senior Special
Counsel, Division of Market Regulation, Commission, Dated November
13, 2003 (``Amendment No. 1'').
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is proposing to amend Rules 713 and 715 to add
definitions for all-or-none orders, stop orders and stop limit orders.
The text of the proposed rule change is set forth below. Proposed new
language is in italics; proposed deletions are in [brackets].
* * * * *
Rule 715. Types of Orders
(c) All-Or-None Orders. An all-or-none order is a limit or market
order that is to be executed in its entirety or not at all.
(d) Stop Orders. A stop order is an order that becomes a market
order when the stop price is elected. A stop order to buy is elected
when the option is bid or trades on the ISE at, or above, the specified
stop price. A stop order to sell is elected when the option is offered
or trades on the ISE at, or below, the specified stop price.
(e) Stop Limit Orders. A stop limit order is an order that becomes
a limit order when the stop price is elected. A stop limit order to buy
is elected when the option is bid or trades on the ISE at, or above,
the specified stop price. A stop limit order to sell becomes a sell
limit order when the option is offered or trades on the ISE at, or
below, the specified stop price.
Rule 713. Priority of Quotes and Orders
* * * * *
Supplementary Material to Rule 713
* * * * *
.02 All-or-none orders, as defined in Rule 715(c), 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.
* * * * *
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 may be examined at the places specified in
Item IV below. The Exchange 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 proposes to amend Rules 713 and 715 to add definitions
for all-or-none orders, stop orders and stop limit orders. The
definitions of these three order types are consistent with the
definitions contained in other exchanges' rules.\7\ An all-or-none
order is a limit or market order that is to be executed in its entirety
or not at all. All-or-none orders 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.
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\7\ See, e.g., CBOE Rule 43.2.
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Stop orders are defined as orders that become market orders when
the stop price is elected. A stop order to buy is elected when the
option is bid or trades on the ISE at, or above, the specified stop
price. A stop order to sell is elected when the option is offered or
trades on the ISE at, or below, the specified stop price. When the stop
price is elected, the system releases a market order into the market
and the order would be handled in the same manner as any other market
order.
Stop limit orders are defined as orders that become limit orders
when the stop price is elected. A stop limit order to buy is elected
when the option is bid or trades on the ISE at, or above, the specified
stop price. A stop limit order to sell is elected when option is
offered or trades on the ISE at, or below, the specified stop price.
Once the stop price is elected, the limit order is placed on the ISE
book and would be handled in the same manner as any other limit order
on the ISE book. In Amendment No. 1, the Exchange has represented that
stop and stop limit orders will be elected automatically by the system
without manual intervention by any market participant, and that no
market participant on the ISE will be able to view pending stop and
stop limit orders in the system.
2. Statutory Basis
The ISE believes that the rule change is consistent with section 6
of the Act in general \8\ and Section 6(b)(5) of the Act in
particular.\9\ The Exchange believes that the proposed rule change is
intended 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 also believes
that new order types will offer investors new trading opportunities on
the Exchange and enhance the Exchange's competitive position.
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\8\ 15 U.S.C. 78f.
\9\ 15 U.S.C. 78f(b)(5).
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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.
[[Page 66910]]
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, as amended, does not:
(i) significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate if the proposal is
consistent with the protection of investors and the public interest;
and the Exchange has given the Commission written notice of its
intention to file the proposed rule change at least five business days
prior to filing, or such shorter time as designated by the Commission,
it has become effective pursuant to Section 19(b)(3)(A) of the Act \10\
and Rule 19b-4(f)(6)\11\ thereunder. 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.\12\ The Commission has decided to waive the 30 day operative
delay and designates that the proposal become operative upon filing
with the Commission because the proposed rule change permits the
implementation of all-or-none, stop, and stop limit orders in a manner
consistent with the protection of investors and the public interest.
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6).
\12\ For purposes of calculating the 60-day abrogation period,
the Commission considers the period to have commenced on November
13, 2003, the date the ISE filed Amendment No. 1.
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the amended
proposal 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-2003-25 and should
be submitted by December 19, 2003.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-29622 Filed 11-26-03; 8:45 am]
BILLING CODE 8010-01-P