[Federal Register: December 31, 2007 (Volume 72, Number 249)]
[Notices]
[Page 74383-74385]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr31de07-102]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57032; File No. SR-ISE-2007-73]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change Relating to Elimination of the Short Sale ``tick'' and Price
Tests
December 21, 2007.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
[[Page 74384]]
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on August 21, 2007, the International Securities Exchange, LLC (``ISE''
or ``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I and II below, which Items have been substantially prepared by
the Exchange. On October 26, 2007, ISE filed Amendment No. 1 to the
proposed rule change.\3\ The Exchange has designated the proposed rule
change as constituting a ``non-controversial'' rule change under
paragraph (f)(6) of Rule 19b-4 under the Act,\4\ which renders the
proposal effective upon receipt of this filing by the Commission. The
Commission is publishing this notice to solicit comments on the
proposed rule change, as amended, from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Amendment No. 1 supersedes and replaces the original filing
in its entirety.
\4\ 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 amend various ISE rules to conform to
recent SEC amendments to Rule 10a-1 under the Act and Regulation SHO
that eliminated SEC and self-regulatory organization (``SRO'') short
sale ``tick'' and price tests. The text of the proposed rule change is
available at the Exchange, the Commission's Public Reference Room, and
http://www.ise.com.
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 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 purpose of Amendment No. 1 to this filing is to amend the
proposed rule text to: (1) Allow for the execution of short sale orders
during the opening process; (2) correct an incorrect cross reference to
a Regulation SHO provision; and (3) to remove the text proposing to
delete a provision of Rule 2129 (MidPoint Match).
On June 13, 2007, the SEC voted to adopt amendments to Rule 10a-1
under the Act and Regulation SHO to remove the ``tick'' test of Rule
10a-1 and any short sale price test of any SRO. As a result of the
SEC's action, the ISE is seeking to conform its rules accordingly by
rescinding ISE Rules 1407, which governs short sale transactions in
Nasdaq Securities, and 2113(a) and (b), which contains a ``tick'' test
applicable to short sales effected on the ISE, as well as to make
conforming ``housekeeping'' changes to certain other rules. The
Exchange proposes to remove references to the execution of short sale
orders, as well as remove the ``short exempt'' marking requirements
from the rules.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with section 6(b) of the Act \5\ in general and furthers the objectives
of section 6(b)(5) \6\ in particular in that the Exchange's proposed
rules are designed to promote just and equitable principles of trade,
to 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.
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\5\ 15 U.S.C. 78f(b).
\6\ 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.
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
The foregoing rule change has become immediately effective pursuant
to section 19(b)(3)(A) of the Act\7\ and Rule 19b-4(f)(6)\8\ thereunder
because it does not: (1) Significantly affect the protection of
investors or the public interest; (2) impose any significant burden on
competition; and (3) become operative for 30 days after the date of the
filing, or such shorter time as the Commission may designate. At any
time within sixty (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.
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\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 17 CFR 240.19b-4(f)(6).
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The Exchange requests that the Commission waive the 5-day pre-
filing notice requirement and the 30-day operative delay period for
``non-controversial'' proposals under Exchange Act Rule 19b-4(f)(6) and
make the proposed rule change effective and operative upon filing with
the Commission. The Commission believes such waivers are consistent
with the protection of investors and the public interest because the
proposed rule change conforms ISE rules to currently effective
Commission rules.\9\ For this reason, the Commission designates the
proposal to be operative upon filing with the Commission.
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\9\ For purposes of waiving the 30-day pre-operative period, the
Commission has considered the impact of the proposed rule change on
efficiency, competition and capital formation. 15 U.S.C. 78c(f).
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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 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 rule-comments@sec.gov. Please include
File Number SR-ISE-2007-73 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-ISE-2007-73. 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
[[Page 74385]]
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 inspection and copying 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 ISE. 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-2007-73 and
should be submitted on or before January 22, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
Nancy M. Morris,
Secretary.
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\10\ 17 CFR 200.30-3(a)(12).
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[FR Doc. E7-25369 Filed 12-28-07; 8:45 am]
BILLING CODE 8011-01-P