

[Federal Register: April 5, 2007 (Volume 72, Number 65)]
[Notices]               
[Page 16838-16839]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05ap07-138]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55557; File No. SR-ISE-2006-78]

 
Self-Regulatory Organizations; International Securities Exchange, 
LLC; Order Granting Approval of Proposed Rule Change Relating to the 
Facilitation Mechanism

March 29, 2007.
    On December 13, 2006, the International Securities Exchange, LLC 
(``ISE'' or ``Exchange'') filed with the Securities and Exchange 
Commission (``Commission'') a proposed rule change pursuant to Section 
19(b)(1) of the Securities Exchange Act of 1934

[[Page 16839]]

(``Act''),\1\ and Rule 19b-4 thereunder,\2\ to amend ISE Rule 716(d) to 
allow an Electronic Access Member (``EAM'') to execute a transaction 
through the Exchange's Facilitation Mechanism wherein the EAM has 
solicited interest from other parties to execute against a block-sized 
order it represents as agent, in addition to facilitating such orders 
with orders from the EAM's proprietary account. The proposed rule 
change was published for comment in the Federal Register on February 
12, 2007.\3\ The Commission received no comments on the proposal. This 
order approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 55236 (February 2, 
2007), 72 FR 6633.
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    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange \4\ and, in 
particular, the requirements of Section 6(b)(5) of the Act.\5\ 
Specifically, the Commission believes that the proposed rule change is 
consistent with the Act because it is a reasonable modification 
designed to provide additional flexibility for the Exchange's members 
to obtain block-sized executions on behalf of their customers. The 
Commission notes that Supplementary Material .01 to ISE Rule 716 
provides that the use of the Facilitation Mechanism does not alter a 
member's best execution duty to obtain the best price for its customer. 
The Commission also notes that Supplementary Material .05 to ISE Rule 
716 requires that any solicited contra orders entered by Exchange 
members to trade against agency orders may not be for the account of an 
ISE market maker that is assigned to the options class.\6\
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    \4\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. 15 U.S.C. 78c(f).
    \5\ 15 U.S.C. 78f(b)(5).
    \6\ The Exchange confirmed that, in addition to orders solicited 
pursuant to paragraph (e) of ISE Rule 716, the last sentence of 
Supplement .05 to ISE Rule 716 also applies to orders solicited 
pursuant to paragraph (d) of ISE Rule 716. Telephone conversation on 
March 28, 2007 between Joseph Ferraro, Associate General Counsel, 
ISE and Jennifer Dodd, Special Counsel, Division of Market 
Regulation, Commission.
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    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\7\ that the proposed rule change (SR-ISE-2006-78) be, and hereby 
is approved.
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    \7\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-6377 Filed 4-4-07; 8:45 am]

BILLING CODE 8010-01-P
