
[Federal Register: December 2, 2008 (Volume 73, Number 232)]
[Notices]               
[Page 73357-73358]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02de08-108]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59015; File No. SR-ISE-2008-87]

 
Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change Relating to Trading Halts in Managed Fund Shares and Actively 
Managed ETFs

November 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 November 18, 2008, the International Securities Exchange, LLC 
(``ISE'' or ``Exchange'') filed with the Securities and Exchange 
Commission (``SEC'' or ``Commission'') the proposed rule change as 
described in Items I and II below, which Items have been prepared by 
the Exchange. The Exchange has designated the proposed rule change as 
constituting a rule change under Section 19(b)(3)(A) of the Act \3\ and 
Rule 19b-4(f)(6) 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)(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 ISE Rule 2101 to state that the Exchange 
will halt trading in managed fund shares or actively managed exchange-
traded funds trading on the Exchange pursuant to unlisted trading 
privileges (``UTP'') if the Exchange is notified by the listing market 
that the disclosed portfolio is not being disseminated to all market 
participants at the same time. The text of the proposed rule change is 
available on the Exchange's Web site 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    ISE Rule 2101(a)(2)(iii)(B) states that the Exchange will halt 
trading in new derivative securities products \5\ trading on the 
Exchange pursuant to UTP, if the listing market notifies the Exchange 
that the net asset value is not being disseminated to all market 
participants at the same time. The purpose of this filing is to amend 
ISE Rule 2101(a)(2)(iii)(B) to specify that, in addition to the 
requirement discussed above, the Exchange will also halt trading when a 
disclosed portfolio is not being disseminated for managed fund shares 
or actively managed exchange traded-funds and the Exchange is notified 
of such by the listing market. The Exchange also proposes to correct 
the paragraph numbering in 2101(a)(2)(iii)(C).
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    \5\ See ISE Rule 2101(a)(2).
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Act and the rules and regulations under the Act applicable to a 
national securities exchange and, in particular, the requirements of 
Section 6(b) of the Act.\6\ Specifically, the Exchange believes the 
proposed rule change is consistent with Section 6(b)(5) of the Act's 
\7\ requirements that the rules of a national securities exchange be 
designed to

[[Page 73358]]

promote just and equitable principles of trade, to prevent fraudulent 
and manipulative acts, 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. In 
particular, the proposed rule change will clarify the circumstance in 
which the Exchange will halt trading in new derivative securities 
products.
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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: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate if consistent with 
the protection of investors and the public interest, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \8\ and Rule 19b-
4(f)(6) thereunder.\9\
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6). The Commission notes that ISE has 
satisfied the five-day pre-filing notice requirement.
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    ISE has asked the Commission to waive the 30-day operative delay. 
The Commission hereby grants the Exchange's request and believes that 
such waiver is consistent with the protection of investors and the 
public interest. This action should benefit investors by promoting fair 
disclosure of information that may be necessary to price the derivative 
securities products and preventing trading when a reasonable degree of 
transparency cannot be assured. Proposed ISE Rule 2101(a)(2)(iii)(B) is 
substantively identical to rules of other national securities exchanges 
\10\ and does not raise any novel or significant regulatory issues. 
Therefore, the Commission designates the proposed rule change as 
operative upon filing.\11\
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    \10\ See, e.g., BATS Exchange Rule 14.1(c)(4)(B) and Securities 
Exchange Act Release No. 58623 (September 23, 2008), 73 FR 57169 
(October 1, 2008) (SR-BATS-2008-004); Chicago Board Options Exchange 
Rule 52.3(c)(4) and Securities Exchange Act Release No. 58955 
(November 14, 2008), 73 FR 70683 (November 21, 2008) (SR-CBOE-2008-
109).
    \11\ For purposes only of waiving the operative date of this 
proposal, the Commission has considered the 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 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 Number SR-ISE-2008-87 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-2008-87. 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 on official business days between 
the hours of 10 a.m. and 3 p.m. Copies of such filing will also 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-
2008-87 and should be submitted on or before December 23, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. E8-28559 Filed 12-1-08; 8:45 am]

BILLING CODE 8011-01-P
