[Federal Register Volume 75, Number 173 (Wednesday, September 8, 2010)]
[Notices]
[Pages 54685-54686]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-22295]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62817; File No. SR-ISE-2010-92]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change To Amend the Exchange's MRVP
September 1, 2010.
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 August 26, 2010, the International Securities Exchange, LLC
(``ISE'' or the ``Exchange'') filed with the Securities and Exchange
Commission (the ``Commission'') the proposed rule change as described
in Items I and II below, which Items have been prepared by the
Exchange. 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 Exchange proposes to amend ISE Rule 1614 (Imposition of Fines
for Minor Rule Violations) to incorporate a violation of ISE Rule 415
(Reports Related to Position Limits) into the Minor Rule Violation
Plan. The text of the proposed rule change is available on the
Exchange's Web site (http://www.ise.com), at the principal office of
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 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 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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the proposed rule change is to amend ISE Rule 1614
to incorporate violations for failing to accurately report position and
account information in accordance with ISE Rule 415 into the Minor Rule
Violation Plan. The Exchange believes most of these violations are
inadvertent and technical in nature. Processing routine violations
under the Minor Rule Violation Plan would decrease the administrative
burden of regulatory and enforcement staff as well as that of the
Business Conduct Committee. In addition, staff would be able to more
expeditiously process routine violations under the Minor Rule Violation
Plan.
ISE is proposing to assess a $500 fine for a first offense, a
$1,000 fine for a second offense and a $2,500 fine for a third offense.
Any subsequent offenses would be assessed a $5,000 fine. The number of
offenses will be calculated on a rolling twenty-four month period. ISE
believes that establishing a rolling twenty-four month period for
cumulative violations will serve as an effective deterrent to future
violative conduct. As with other violations covered under the
Exchange's Minor Rule Violation Plan, any egregious activity may be
referred to the Exchange's Business Conduct Committee.
Among other things, ISE Rule 415 requires each member to report to
the Exchange the account and position information of any customer who,
acting alone, or in concert with others, on the previous business day
maintained aggregate long or short positions on the same side of the
market of 200 or more contracts of any single class of option contracts
dealt in on the Exchange. Members report this information on the Large
Option Position Report. ISE, as a member of the Intermarket
Surveillance Group (the ``ISG''), as well as certain other self-
regulatory organizations (``SROs'') executed and filed on October 29,
2007 with the Commission, a final version of the Agreement pursuant to
Section 17(d) of the Act (the ``Agreement'') \3\ and as amended on
April 11, 2008 \4\ and October 9, 2008.\5\ The participants to the
Agreement incorporated the surveillance and sanctions of large options
position reporting violations into the Agreement as of November 1,
2008. As such, the SROs have agreed that their respective rules
concerning the reporting of large options positions are common rules.
As a result, this amendment to the Minor Rule Violation Plan will
further result in the consistency of the sanctions among the SROs who
are signatories to the Agreement with respect to regulatory actions
arising from large option position reporting surveillance.
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\3\ See Securities and Exchange Act Release No. 34-56941
(December 11, 2007).
\4\ See Securities and Exchange Act Release No. 34-57649 (April
11, 2008).
\5\ See Securities and Exchange Act Release No. 34-58765
(October 9, 2008).
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act \6\ in general, and furthers the
objectives of Section 6(b)(5) of the Act \7\ in particular, because it
is designed to prevent fraudulent and manipulative acts and practices,
and to promote just and equitable principles of trade, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system, and, in general to protect investors and the
public interest, allowing the Exchange to have consistency between its
Minor Rule Violation Plan and the Minor Rule Violation Plan of other
SROs.
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\6\ 15 U.S.C. 78f(b).
\7\ 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
Because the foregoing proposed rule change does not significantly
affect the protection of investors or the public interest, does not
impose any significant burden on competition, and, by its terms, does
not become operative for 30
[[Page 54686]]
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) \8\ of the Act and Rule 19b-4(f)(6) \9\ thereunder. The
Exchange provided the Commission with 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 the proposed rule change.
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(6).
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At any time within the 60-day period beginning on the date 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:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. Please include
File Number SR-ISE-2010-92 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-2010-92. 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 website viewing and
printing in the Commission's Public Reference Room, on official
business days between the hours of 10 a.m. and 3 p.m. Copies of the
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-2010-92 and should be submitted on or before
September 29, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12); 17 CFR 200.30-3(a)(44).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-22295 Filed 9-7-10; 8:45 am]
BILLING CODE 8011-01-P