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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 July 29, 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 July 23, 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 and II 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 theTerms 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 August 2, 2010. The text of the proposed rule change is available on the Exchange's Web site (, 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 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

1. Purpose

ISE proposes to identify the next 75 options classes to be added to the Penny Pilot effective August 2, 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 August 2, 2010, based on national average daily volume from January 1, 2010 through June 30, 2010:

Nat'l rankingSymbolSecurity nameNat'l rankingSymbolSecurity name
199MBIMBIA Inc316CBChubb Corp
205MAMastercard Inc320ADMArcher-Daniels-Midland Co
224ATPGATP Oil & Gas Corp/United States322HSYHershey Co/The
226YUMYum! Brands Inc323TXTTextron Inc
232RCLRoyal Caribbean Cruises Ltd324GGPGeneral Growth Properties Inc
238BPOPPopular Inc325NOVNational Oilwell Varco Inc
248EKEastman Kodak Co326TWXTime Warner Inc
252CNXConsol Energy Inc327XOPSPDR S&P Oil & Gas Exploration & Production ETF
260DCTHDelcath Systems Inc328MYLMylan Inc/PA
274MTGMGIC Investment Corp329TSOTesoro Corp
277PXPPlains Exploration & Production Co330CICIGNA Corp
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278GPSGap Inc/The331ESIITT Educational Services Inc
280TSLTrina Solar Ltd332NKENIKE Inc
282EWWiShares MSCI Mexico Investable Market Index Fund335FISFidelity National Information Services Inc Inc336SUNSunoco Inc
286SWNSouthwestern Energy Co338BBBYBed Bath & Beyond Inc
287HBANHuntington Bancshares Inc/OH340APWRA-Power Energy Generation Systems Ltd
288EOGEOG Resources Inc341FWLTFoster Wheeler AG
290APAApache Corp342LNCLincoln National Corp
291VVUSVivus Inc343RSHRadioShack Corp
292JDSUJDS Uniphase Corp344TYCTyco International Ltd
293ACIArch Coal Inc345CLColgate-Palmolive Co
294NENoble Corp346FXPProShares UltraShort FTSE/Xinhua China 25
296BAXBaxter International Inc347NTAPNetApp Inc
297ADSKAutodesk Inc348SOSouthern Co
299KRESPDR KBW Regional Banking ETF349PHMPulte Group Inc
300XLXL Group Plc350HOTStarwood Hotels & Resorts Worldwide Inc
302WLTWalter Energy Inc351QLDProShares Ultra QQQ
303IBNICICI Bank Ltd352VRSNVeriSign Inc
305EWYiShares MSCI South Korea Index Fund353PCLPlum Creek Timber Co Inc
306WHRWhirlpool Corp354NBRNabors Industries Ltd
307BHIBaker Hughes Inc355ESRXExpress Scripts Inc
308KMPKinder Morgan Energy Partners LP356ACASAmerican Capital Ltd
309MROMarathon Oil Corp357XLNXXilinx Inc
310AGOAssured Guaranty Ltd358DODiamond Offshore Drilling Inc
311GISGeneral Mills Inc359CMAComerica Inc
312ANRAlpha Natural Resources Inc360KEYKeyCorp
314GENZGenzyme Corp

2. 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 the 60-day period beginning on the date of the filing of the proposed rule change, the Commission summarily may temporarily suspend 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-2010-79. 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 (​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 Start Printed Page 47056printing 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 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-2010-79 and should be submitted on or before August 25, 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. 2010-19220 Filed 8-3-10; 8:45 am]