[Federal Register: August 22, 2007 (Volume 72, Number 162)]
[Notices]
[Page 47105-47107]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22au07-164]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56263; File No. SR-ISE-2007-69]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change Relating to the Extension of a Pilot Period To Increase Position
Limits and Exercise Limits for Equity Options and Options on the
Nasdaq-100 Tracking Stock
August 15, 2007.
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 August 13, 2007, the International Securities Exchange, LLC (``ISE''
or ``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been substantially prepared by ISE. The
Exchange has filed the proposal as a ``non-controversial'' rule change
pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6)
thereunder,\4\ which renders it effective upon filing with the
Commission. 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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
ISE proposes to extend the time period for Exchange Rule 412 and
Rule 414 position and exercise limits pilot program for equity option
contracts and options on the Nasdaq-100 Index Tracking Stock (``QQQQ'')
(``Pilot Program''). The text of the proposed rule change is available
at ISE, the Commission's Public Reference Room, and http://www.ise.com.
[[Page 47106]]
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, 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 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 Pilot Program provides for an increase to the standard position
and exercise limits for equity option contracts and for options on
QQQQs.\5\ The Pilot Program, after being extended on prior
occasions,\6\ is set to expire on September 1, 2007.\7\ Specifically,
the Pilot Program increased the applicable position and exercise limits
for equity options and options on the QQQQ to the following levels:
------------------------------------------------------------------------
Current equity option contract Pilot program equity option
limit \8\ contract limit
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13,500 25,000
22,500 50,000
31,500 75,000
60,000 200,000
75,000 250,000
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Current QQQQ option contract limit Pilot program QQQQ option contract
limit
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300,000 900,000
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The purpose of the proposed rule change is to extend the Pilot
Program for an additional six-month period, until March 1, 2008. The
Exchange believes that extending the Pilot Program for this additional
period is warranted due to the positive feedback from members and for
the reasons cited in the original rule filing that proposed the
adoption of the Pilot Program.\9\ Additionally, the Exchange represents
that it has not experienced any problems or difficulties relating to
the Pilot Program since its inception. For these reasons, the Exchange
requests that the Commission extend the Pilot Program until March 1,
2008.
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\5\ See Securities Exchange Act Release No. 51295 (March 2,
2005), 70 FR 11292 (March 8, 2005) (SR-ISE-2005-14) (``Pilot Program
Notice'').
\6\ See Securities Exchange Act Release Nos. 54335 (August 18,
2006), 71 FR 50954 (August 28, 2006) (SR-ISE-2006-47); 53345
(February 22, 2006), 71 FR 10579 (March 1, 2006) (SR-ISE-2006-10);
and 52265 (August 15, 2005), 70 FR 48996 (August 22, 2005) (SR-ISE-
2005-39).
\7\ See Securities Exchange Act Release No. 55311 (February 16,
2007), 72 FR 8408 (February 26, 2007) (SR-ISE-2007-15).
\8\ Except when the Pilot Program is in effect.
\9\ See Pilot Program Notice, supra note 5.
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \10\ in general, and furthers the objective of Section
6(b)(5) of the Act \11\ in particular, in that it is designed to
promote just and equitable principles of trade and to protect investors
and the public interest.
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\10\ 15 U.S.C. 78f(b).
\11\ 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.
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 forgoing rule change 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 this filing, or such shorter time as the Commission
may designate, it has become effective pursuant to Section 19(b)(3)(A)
of the Act \12\ and Rule 19b-4(f)(6) thereunder.\13\
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under 19b-4(f)(6) normally may not
become operative prior to 30 days after the date of filing.\14\
However, Rule 19b-4(f)(6)(iii) \15\ permits the Commission to designate
a shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange has requested that the
Commission waive the 30-day operative delay. The Commission believes
that waiving the 30-day operative delay is consistent with the
protection of investors and in the public interest because it will
allow the Pilot Program to continue uninterrupted. For this reason, the
Commission designates that the proposed rule change become operative
immediately.\16\
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\14\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires that a self-regulatory organization submit to
the Commission 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
of the proposed rule change, or such shorter time as designated by
the Commission. ISE has satisfied the five-day pre-filing
requirement.
\15\ Id.
\16\ For the 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 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 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 47107]]
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 No. SR-ISE-2007-69 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.
All submissions should refer to File No. SR-ISE-2007-69. 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 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 will also be available for
inspection and copying at the principal office of 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 No. SR-ISE-2007-69 and should be
submitted on or before September 12, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-16527 Filed 8-21-07; 8:45 am]
BILLING CODE 8010-01-P