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 exchange4
and, in particular, the requirements of Section 6(b)(5) of the Act.5
Specifically, the Commission believes that the proposed rule change is consistent with the Act because it is a reasonable modification designed to provide additional flexibility for the Exchange's members to obtain block-sized executions on behalf of their customers. The Commission notes that Supplementary Material .01 to ISE Rule 716 provides that the use of the Facilitation Mechanism does not alter a member's best execution duty to obtain the best price for its customer. The Commission also notes that Supplementary Material .05 to ISE Rule 716 requires that any solicited contra orders entered by Exchange members to trade against agency orders may not be for the account of an ISE market maker that is assigned to the options class.6
It is therefore ordered, pursuant to Section 19(b)(2) of the Act,7
that the proposed rule change (SR-ISE-2006-78) be, and hereby is approved.
817 CFR 200.30-3(a)(12).
Florence E. Harmon,