Rules and Regulations. SECURITIES AND EXCHANGE COMMISSION

440 words·~2 min read·/register/2001/04/30/01-10608·

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

BILLING CODE 8010-01-M SECURITIES AND EXCHANGE COMMISSION [Release No. 34-44208; File No. SR-ISE-01-02] Self-Regulatory Organizations; International Securities Exchange LLC; Order Granting Approval to Proposed Rule Change Relating to Anticipatory Hedging Activity April 20, 2001. On January 12, 2001, the International Securities Exchange LLC (“ISE” or “Exchange”) field 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 relating to anticipatory hedging activity. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4.

The proposed rule change would prohibit a member or a person associated with a member who has knowledge of all the terms and conditions concerning the imminent execution of

(1)an order and a solicited order,

(2)an order being facilitated, or

(3)two orders being crossed, to enter, based on that knowledge, an order to buy or sell an option of the same class, shares in the underlying security, or any related instrument, before the same information is disclosed to the trading crowd. The proposed rule change was published for comment in the **Federal Register** on February 27, 2001. 3 The Commission received no comments on the proposal. 3 *See* Securities Exchange Act Release No. 43983 (February 20, 2001), 66 FR 12576 (February 27, 2001). The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange 4 and, in particular, the requirements of section 6 of the Act 5 and the rules and regulations thereunder. The Commission finds specifically that the proposed rule change is consistent with section 6(b)(5) of the Act, 6 because it is designed to maintain the integrity of the ISE's market by preventing the misuse of non-public information and affording the trading crowd a fair and full opportunity to make informed trading decisions. It also conforms to similar rules at other options exchanges relating to anticipatory hedging. 7 4 In approving this proposed rule change, the Commission notes that it has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 5 15 U.S.C. 78f. 6 15 U.S.C. 78f(b)(5). 7 *See, e.g.,* American Stock Exchange Rule 950(d), Commentary .04., Chicago Board Options Exchange Rule 6.9(e). It is therefore ordered, pursuant to section 19(b)(2) of the Act, 8 that the proposed rule change (File No. SR-ISE-01-02) be, and it hereby is, approved. 8 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 9 9 17 CFR 200.30-3(a)(12). Margaret H. McFarland, Deputy Secretary. [FR Doc. 01-10608 Filed 4-27-01; 8:45 am]

Connectionstraces to 4

Traces to 4 documents

U.S. Code

CFR