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Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Add 75 Options Classes to the Penny Pilot Program

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Start Preamble May 5, 2010.

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 April 29, 2010, the International Securities Exchange, LLC (the “Exchange” or the “ISE”) filed with the Securities and Exchange Commission the proposed rule change as described in Items I, II, and III below, which items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.

I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change

The ISE proposes to designate 75 options classes to be added to the pilot program to quote and to trade certain options in pennies (the “Penny Pilot”) on May 3, 2010.

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 self-regulatory organization 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

Purpose—ISE proposes to identify the next 75 options classes to be added to the Penny Pilot effective May 3, 2010. The Exchange recently received approval to extend and expand the Penny Pilot through December 31, 2010.[3] In that filing, the Exchange had proposed expanding the Penny Pilot on a quarterly basis to add the next 75 most actively traded multiply listed options classes based on national average daily volume for the six months prior to selection, closing under $200 per share on the Expiration Friday prior to expansion, except that the month immediately preceding their addition to the Penny Pilot will not be used for the purpose of the six month analysis.[4]

ISE proposes to add the following 75 options classes to the Penny Pilot on May 3, 2010, based on national average daily volume for the six months ending March 31, 2010:

Nat'l rankingSymbolSecurity nameNat'l rankingSymbolSecurity name
153XLVHealth Care Select Sector SPDR Fund.247JCPJC Penney Co Inc.
155CIENCiena Corp.248ACLAlcon Inc.
157AMLNAmylin Pharmaceuticals Inc.249STPSuntech Power Holdings Co Ltd.
158CTICCell Therapeutics Inc.250TLBTalbots Inc.
159MDTMedtronic Inc.251SYMCSymantec Corp.
162TIVOTiVo Inc.253AMEDAmedisys Inc.
163MNKDMannKind Corp.255TMToyota Motor Corp.
171MDVNMedivation Inc.257HKPetrohawk Energy Corp.
176BRKBBerkshire Hathaway Inc.258ENEREnergy Conversion Devices Inc.
178APOLApollo Group Inc.259STTState Street Corp.
181BSXBoston Scientific Corp.260BHPBHP Billiton Ltd.
185XLYConsumer Discretionary Sel. Sec. SPDR Fund.261NFLXNetFlix Inc.
188CLFCliffs Natural Resources Inc.262LDKLDK Solar Co Ltd.
190ZIONZions Bancorporation.263SPGSimon Property Group Inc.
194IOCInterOil Corp.264TIFTiffany & Co.
197ITMNInterMune Inc.265BUCYBucyrus International Inc.
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204GMEGameStop Corp.266WAGWalgreen Co.
209XLKTechnology Select Sector SPDR Fund.268IPInternational Paper Co.
210AKSAK Steel Holding Corp.271XMESPDR S&P Metals & Mining ETF.
212GRMNGarmin Ltd.272KGCKinross Gold Corp.
213MRVLMarvell Technology Group Ltd.273EPEl Paso Corp.
215XLPConsumer Staples Select Sector SPDR Fund.274SEEDOrigin Agritech Ltd.
216UNPUnion Pacific Corp.275WINWindstream Corp.
220DTVDIRECTV.279DHIDR Horton Inc.
223WMBWilliams Cos Inc/The.280ADBEAdobe Systems Inc.
225MEEMassey Energy Co.281PCXPatriot Coal Corp.
227CELGCelgene Corp.282SPWRASunPower Corp.
229GMCRGreen Mountain Coffee Roasters Inc.284LCCUS Airways Group Inc.
231WDCWestern Digital Corp.285PRUPrudential Financial Inc.
234DALDelta Air Lines Inc.286LENLennar Corp.
235FXECurrencyShares Euro Trust.287EWTiShares MSCI Taiwan Index Fund.
237COSTCostco Wholesale Corp.288KBHKB Home.
239MJNMead Johnson Nutrition Co.289CREECree Inc.
240ALLAllstate Corp/The.290SIRISirius XM Radio Inc.
241SIISmith International Inc.291MMRMcMoRan Exploration Co.
242RTNRaytheon Co.292CENXCentury Aluminum Co.
243DVNDevon Energy Corp.293GFIGold Fields Ltd.

(b) Basis—The basis under the Securities Exchange Act of 1934 (the “Exchange Act”) for this proposed rule change is found in Section 6(b)(5), in that the proposed 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. In particular, the proposed rule change identifies the options classes to be added to the Penny Pilot in a manner consistent with prior approvals and filings.

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 written comments from members or other interested parties.

III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action

The proposed rule change is effective upon filing pursuant to Section 19(b)(3)(A)(i) [5] of the Exchange Act and Rule 19b-4(f)(1) [6] thereunder, in that it constitutes a stated policy, practice or interpretation with respect to the meaning, administration or enforcement of an existing rule of the Exchange.

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

Paper Comments

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

All submissions should refer to File Number SR-ISE-2010-42. 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 Commissions Internet Web site (​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 Web site viewing 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 should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-ISE-2010-42 and should be submitted by June 1, 2010.

Start Signature

For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.[7]

Florence E. Harmon,

Deputy Secretary.

End Signature End Preamble


3.  See Securities Exchange Act Release No. 60865 (October 22, 2009), 74 FR 55880 (October 29, 2009) (SR-ISE-2009-82). The Commission notes that this proposed rule change was submitted pursuant to Section 19(b)(3)(A)(iii) of the Act and was, therefore, effective upon filing. The Commission does not approve proposed rule changes submitted pursuant to this section of the Act.

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4.  Index products would be included in the expansion if the underlying index level was under 200.

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5.  15 U.S.C. 78s(b)(3)(A)(i).

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[FR Doc. 2010-11135 Filed 5-10-10; 8:45 am]