April 8, 2014
Securities and Exchange Commission
Release no. 34-71806; File No. SR-ISE-2014-19
Self Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Amend ISE Rule 2128 Relating to clearly Erroneous Trades.
Back Ground Info:
On September 10, 2010 the commission approved a rule concerning Clearly Erroneous execution reviews in multi stock events involving twenty or more securities. In the event transactions occur that result in the issuance of an individual stock trading pause by primary listing market and any other transactions that occur before the trading pause is in effect on the exchange. Additional changes to Rule 2128 reduced the ability of the Exchange to deviate from the objective standards set forth in rule 2128. In 2013 a provision adopted that was designed to address the operation of the plan.
The pilot program related to rule 2128 as stated above should be extended. It will provide clarification and additional protection for Clearly Erroneous trades. Maintaining the pilot program will offer data that will aid in the determination of erroneous trades. Information obtained from this program will result in objective decisions. The proposal will ensure consistency and benefit to everyone involved by allowing the extension and continued implementation of the rule. The continued use of the pilot program will benefit those involve by providing continued protection.
The commission should not wave the standard 30 day operative delay. It may be found that the rule does not adequately protect investors. The 30 day delay necessary to investigate proposed rules. 17 CFR 200.30-3a(12) provides requirements and subsequent applicable rules needed to approve a proposed rule change earlier than 30 days after the date of publication, and should be followed. In the event of an extension as is the case here, the 30 day delay should still be required. The rule or pilot program related to a rule may be insufficient to protect investors and the public and should be changed or a new rule should be created to fix the problem.
In my opinion the extension of the proposed rule change would provide better protection to investors and the public. The rule should be extended unless the current pilot program does not adequately provide protection for Clearly Erroneous trades. If that is the case then the rule should not be extended, and a new rule/program should be implemented to provide better protections to investors and the public.