

[Federal Register: July 10, 2006 (Volume 71, Number 131)]
[Notices]               
[Page 38920-38922]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10jy06-94]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54083; File No. SR-ISE-2006-35]

 
Self-Regulatory Organizations; International Securities Exchange, 
Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change Relating to Directed Orders System Change

June 30, 2006.
    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 June 30, 2006, the International Securities Exchange, Inc. 
(``ISE'' or ``Exchange'') filed with the Securities and Exchange

[[Page 38921]]

Commission (``Commission'') the proposed rule change as described in 
Items I, II, and III below, which Items have been prepared by the ISE. 
The proposed rule change has been filed by the ISE as effecting a 
change in an existing order-entry or trading system pursuant to section 
19(b)(3)(A) of the Act,\3\ and Rule 19b-4(f)(5) thereunder,\4\ which 
renders the proposal 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)(5).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The ISE is proposing to extend the pilot period for the system 
change that identifies to a Directed Market Maker (``DMM'') the 
identity of the firm entering a Directed Order until September 30, 
2006.

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 ISE 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
    On January 5, 2006, the ISE initiated a system change to identify 
to a DMM the identity of the firm entering a Directed Order. The ISE 
filed this system change on a pilot basis under section 19(b)(3)(A) of 
the Act and Rule 19b-4(f)(5) thereunder \5\ so that it would be 
effective while the Commission considered a separate proposed rule 
change filed under section 19(b)(2) of the Act to amend the ISE's rules 
to reflect the system change on a permanent basis (the ``Permanent Rule 
Change'').\6\ The pilot currently expires on June 30, 2006, but the 
Commission has not yet taken action with respect to the Permanent Rule 
Change. Accordingly, the Exchange proposes to extend the pilot until 
September 30, 2006, so that the system change will remain in effect 
while the Commission continues to evaluate the Permanent Rule 
Change.\7\
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    \5\ Securities Exchange Act Release No. 53104 (Jan. 11, 2006), 
71 FR 3142 (Jan. 19, 2006) (Notice of Filing and Immediate 
Effectiveness for SR-ISE-2006-02).
    \6\ Securities Exchange Act Release No. 53103 (Jun. 11, 2006), 
71 FR 3144 (Jan. 19, 2006) (Notice of Filing for SR-ISE-2006-01).
    \7\ The ISE anticipated that extension of the pilot might be 
necessary and included this in the filing for the initial pilot. See 
supra note 3, at footnote 5.
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2. Statutory Basis
    The Exchange believes that the basis under the Act is found in 
section 6(b)(5), in that the propose rule change is designed to promote 
just and equitable principles of trade, 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. 
Extension of the pilot program will allow the Exchange to remain 
competitive with the Boston Options Exchange (``BOX''), which operates 
a directed orders program that discloses the identity of an entering 
firm to the BOX directed market maker.\8\
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    \8\ See Securities Exchange Act Release Nos. 53015 (Dec. 22, 
2005), 70 FR 77207 (Dec. 29, 2005); 53357 (Feb. 23, 2006); and 71 FR 
10730 (March 2, 2006) (SR-BSE-2005-52).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that 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 effects a change in an 
existing order entry or trading system that (i) does not significantly 
affect the protection of investors or the public interest; (ii) does 
not impose any significant burden on competition; and (iii) does not 
have the effect of limiting access to or availability of the system, it 
has become effective pursuant to section 19(b)(3)(A)(iii) of the Act 
\9\ and Rule 19b-4(f)(5) thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 19b-4(f)(5).
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    At any time within 60 days of the filing of such 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.

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 No. SR-ISE-2006-35 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 Number SR-ISE-2006-35. 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. 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

[[Page 38922]]

should submit only information that you wish to make available 
publicly. All submissions should refer to File Number SR-ISE-2006-35 
and should be submitted on or before July 31, 2006.
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    \11\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
Nancy M. Morris,
Secretary.
[FR Doc. E6-10719 Filed 7-7-06; 8:45 am]

BILLING CODE 8010-01-P
