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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62042; File No. SR-ISE-2010-42]

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

May 5, 2010.

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),

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and Rule 19b-4 thereunder,

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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.

1

15 U.S.C. 78s(b)(1).

2

17 CFR 240.19b-4.

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.

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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.

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

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 ranking

Symbol

Security name

Nat'l ranking

Symbol

Security name

153

XLV

Health Care Select Sector SPDR Fund.

247

JCP

JC Penney Co Inc.

155

CIEN

Ciena Corp.

248

ACL

Alcon Inc.

157

AMLN

Amylin Pharmaceuticals Inc.

249

STP

Suntech Power Holdings Co Ltd.

158

CTIC

Cell Therapeutics Inc.

250

TLB

Talbots Inc.

159

MDT

Medtronic Inc.

251

SYMC

Symantec Corp.

162

TIVO

TiVo Inc.

253

AMED

Amedisys Inc.

163

MNKD

MannKind Corp.

255

TM

Toyota Motor Corp.

171

MDVN

Medivation Inc.

257

HK

Petrohawk Energy Corp.

176

BRKB

Berkshire Hathaway Inc.

258

ENER

Energy Conversion Devices Inc.

178

APOL

Apollo Group Inc.

259

STT

State Street Corp.

181

BSX

Boston Scientific Corp.

260

BHP

BHP Billiton Ltd.

185

XLY

Consumer Discretionary Sel. Sec. SPDR Fund.

261

NFLX

NetFlix Inc.

188

CLF

Cliffs Natural Resources Inc.

262

LDK

LDK Solar Co Ltd.

190

ZION

Zions Bancorporation.

263

SPG

Simon Property Group Inc.

194

IOC

InterOil Corp.

264

TIF

Tiffany & Co.

197

ITMN

InterMune Inc.

265

BUCY

Bucyrus International Inc.

204

GME

GameStop Corp.

266

WAG

Walgreen Co.

209

XLK

Technology Select Sector SPDR Fund.

268

IP

International Paper Co.

210

AKS

AK Steel Holding Corp.

271

XME

SPDR S&P Metals & Mining ETF.

212

GRMN

Garmin Ltd.

272

KGC

Kinross Gold Corp.

213

MRVL

Marvell Technology Group Ltd.

273

EP

El Paso Corp.

215

XLP

Consumer Staples Select Sector SPDR Fund.

274

SEED

Origin Agritech Ltd.

216

UNP

Union Pacific Corp.

275

WIN

Windstream Corp.

220

DTV

DIRECTV.

279

DHI

DR Horton Inc.

223

WMB

Williams Cos Inc/The.

280

ADBE

Adobe Systems Inc.

225

MEE

Massey Energy Co.

281

PCX

Patriot Coal Corp.

227

CELG

Celgene Corp.

282

SPWRA

SunPower Corp.

229

GMCR

Green Mountain Coffee Roasters Inc.

284

LCC

US Airways Group Inc.

231

WDC

Western Digital Corp.

285

PRU

Prudential Financial Inc.

234

DAL

Delta Air Lines Inc.

286

LEN

Lennar Corp.

235

FXE

CurrencyShares Euro Trust.

287

EWT

iShares MSCI Taiwan Index Fund.

237

COST

Costco Wholesale Corp.

288

KBH

KB Home.

239

MJN

Mead Johnson Nutrition Co.

289

CREE

Cree Inc.

240

ALL

Allstate Corp/The.

290

SIRI

Sirius XM Radio Inc.

241

SII

Smith International Inc.

291

MMR

McMoRan Exploration Co.

242

RTN

Raytheon Co.

292

CENX

Century Aluminum Co.

243

DVN

Devon Energy Corp.

293

GFI

Gold Fields Ltd.

244

MT

ArcelorMittal.

(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)

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of the Exchange Act and Rule 19b-4(f)(1)

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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.

5

15 U.S.C. 78s(b)(3)(A)(i).

6

17 CFR 240.19b-4(f)(1).

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

• Use the Commission's Internet comment form

http://www.sec.gov/rules/sro.shtml);

or

• Send an E-mail to

rule-comments@sec.gov.

Please include File No. SR-ISE-2010-42 on the subject line.

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 (

http://www.sec.gov/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.

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

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7

17 CFR 200.30-3(a)(12).

Florence E. Harmon,

Deputy Secretary.

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

BILLING CODE 8010-01-P