
[Federal Register: July 2, 2008 (Volume 73, Number 128)]
[Notices]               
[Page 38000-38001]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02jy08-118]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58020; File No. SR-ISE-2008-48]

 
Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change To Extend the Short Term Options Series Pilot Program

June 25, 2008.
    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 June 23, 2008, the International Securities Exchange, LLC 
(``Exchange'' or ``ISE'') 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 
the Exchange. The Exchange has designated this proposal as non-
controversial under Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 
19b-4(f)(6) thereunder,\4\ which renders the proposed rule change 
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)(iii).
    \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

    The ISE proposes to amend its rules to extend the Short Term 
Options Series Pilot Program (``Pilot Program'') for an additional 
year. 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 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
    On July 12, 2005, the Commission approved the Pilot Program that 
allows ISE to list and trade options series that expire one week after 
being opened for trading (``Short Term Options Series'').\5\ Under the 
terms of the Pilot Program, the Exchange can select up to five options 
classes on which Short Term Options Series may be opened on any Short 
Term Options Series opening date. The Exchange also may list Short Term 
Options Series on any options class selected by other securities 
exchanges employing a similar pilot program under their respective 
rules.
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    \5\ See Securities Exchange Act Release No. 52012 (July 12, 
2005), 70 FR 41246 (July 18, 2005) (SR-ISE 2005-17).
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    The Pilot Program was subsequently extended \6\ and the current 
Pilot Program is set to expire on July 12, 2008.\7\ The purpose of this 
proposed rule change is to extend the Pilot Program for an additional 
year. The Exchange believes that Short Term Options Series provide 
investors with a flexible and valuable tool to manage risk exposure, 
minimize capital outlays, and be more responsive to the timing of 
events affecting the securities underlying options contracts. Although 
ISE has not listed any Short Term Options Series during the Pilot 
Program, there has been investor interest in trading short term options 
at the Chicago Board Options Exchange. For competitive reasons and in 
order to have the ability to respond to customer interest in Short Term 
Options Series, the Exchange proposes to extend its Pilot Program.
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    \6\ See Securities Exchange Act Release No. 54117 (July 10, 
2006), 71 FR 40564 (July 17, 2006) (SR-ISE 2006-37).
    \7\ See Securities Exchange Act Release No. 56047 (July 11, 
2007), 72 FR 39106 (July 17, 2007) (SR-ISE 2007-54).
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    In the original proposal to establish the Pilot Program, the 
Exchange stated that if it were to propose an extension or an expansion 
of the Pilot Program, the Exchange would submit, along with any filing 
proposing such amendments to the Pilot Program, a report (``Pilot 
Program Report'') analyzing the Pilot Program, which would cover the 
entire period during which the Pilot Program was in effect. Since the 
Exchange has not listed any Short Term Options Series under the Pilot 
Program, there is no data available to compile such a report at this 
time. Therefore, the Exchange is not submitting a Pilot Program Report 
with this proposal.
    Finally, the Exchange represents that it has the necessary systems 
capacity to support the listing of Short Term Options Series should it 
determine to do so in the future.
2. Statutory Basis
    The Exchange believes that short-term options series increase the 
variety of listed options available to investors and provide investors 
with a valuable tool to manage risk exposure, minimize capital outlays 
and be more responsive to the timing of events affecting the securities 
underlying options contracts. For these reasons, the Exchange believes 
the proposed rule change is consistent with

[[Page 38001]]

Section 6(b) of the Act.\8\ Specifically, the Exchange believes the 
proposed rule change is consistent with Section 6(b)(5) of the Act,\9\ 
which requires that the rules of an exchange be designed to promote 
just and equitable principles of trade, serve to remove impediments to 
and perfect the mechanism for a free and open market and a national 
market system, and, in general, to protect investors and the public 
interest.
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    \8\ 15 U.S.C. 78(f)(b).
    \9\ 15 U.S.C. 78(f)(b)(5).
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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

    The Exchange has designated the proposed rule change as one that: 
(1) Does not significantly affect the protection of investors or the 
public interest; (2) does not impose any significant burden on 
competition; and (3) does not become operative for 30 days from the 
date of filing, or such shorter time as the Commission may designate if 
consistent with the protection of investors and the public interest. 
Therefore, the foregoing rule change has become effective pursuant to 
Section 19(b)(3)(A) of the Act \10\ and subparagraph (f)(6) of Rule 
19b-4 thereunder.\11\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to provide 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 of the 
proposed rule change, or such shorter time as designated by the 
Commission. The Exchange has fulfilled this requirement.
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    The Exchange has asked the Commission to waive the operative delay 
to permit the proposed rule change to become operative prior to the 
30th day after filing. The Commission has determined that waiving the 
30-day operative delay of the Exchange's proposal is consistent with 
the protection of investors and the public interest and will promote 
competition because such waiver will allow ISE to continue the existing 
Pilot Program without interruption.\12\ Therefore, the Commission 
designates the proposal operative upon filing.
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    \12\ For purposes only of waiving the 30-day 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 the 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-2008-48 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-ISE-2008-48. 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 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 No. SR-ISE-2008-48 and should be 
submitted on or before July 23, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-14927 Filed 7-1-08; 8:45 am]

BILLING CODE 8010-01-P
