
[Federal Register: May 9, 2008 (Volume 73, Number 91)]
[Notices]               
[Page 26457-26458]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09my08-117]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57777; File No. SR-ISE-2008-25]

 
Self-Regulatory Organizations; International Securities Exchange, 
LLC; Order Approving Proposed Rule Change, as Modified by Amendment No. 
1, Relating to the Rescission of the ``No MPM'' Order Type

May 5, 2008.
    On March 5, 2008, the International Securities Exchange, LLC 
(``ISE'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to amend its rules governing ISE Stock Exchange to 
rescind the ``No MPM'' order type. On March 17, 2008, ISE filed 
Amendment No. 1 to the proposed rule change. The proposed rule change, 
as modified by Amendment No. 1, was published for comment in the 
Federal Register on April 1, 2008.\3\ The Commission received no 
comment letters on the proposed rule change. This order approves the 
proposed rule change, as modified by Amendment No. 1.
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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. 57557 (March 26, 
2008), 73 FR 17386.
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    The best bids and offers on the ISE Stock Exchange are displayed to 
the marketplace on a continuous basis. In addition, the ISE offers 
incoming orders an opportunity to receive price improvement at the 
midpoint of the National Best Bid or Offer (``NBBO'') through its 
MidPoint Match (``MPM'') process. Specifically, before executing 
incoming orders against the ISE's displayed bid or offer, the system 
checks MPM to see if there is contra-side interest that can provide 
price improvement. However, under ISE's current rules, Equity 
Electronic Access Members may specify on orders that they do not want 
the orders to execute against MPM interest, thereby denying such orders 
the opportunity for price improvement.
    The Exchange proposes to amend Rules 2104 and 2106 to eliminate the 
``No MPM'' order type, and to clarify in Rule 2107 that all inbound 
orders will be exposed to MPM interest and be afforded price 
improvement, when available, before executing against the ISE's 
displayed quotations. The Exchange also proposes to amend Rule 2129 to 
clarify that MPM is a process by which ISE members may receive an 
execution price that is at the midpoint of the NBBO.
    After careful review, the Commission finds that the proposed rule 
change is consistent with the Act and the rules and regulations 
thereunder applicable to a national securities exchange.\4\ 
Specifically, the Commission finds that the proposed rule change is 
consistent with Section 6(b)(5) \5\ of the Act, which requires that, 
among other things, the rules of an exchange be designed 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. 
The Commission believes that exposing all inbound orders to MPM 
interest should afford such orders an opportunity for price improvement 
by providing customers the opportunity to interact with an additional 
source of liquidity.
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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. 78(f)(b)(5).
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    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (SR-ISE-2008-25), as modified by 
Amendment No. 1, be, and it hereby is, approved.


[[Page 26458]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-10372 Filed 5-8-08; 8:45 am]

BILLING CODE 8010-01-P
