[Federal Register: July 25, 2007 (Volume 72, Number 142)]
[Notices]
[Page 40912-40914]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25jy07-104]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56093; File No. SR-ISE-2007-58]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing of a Proposed Rule Change Relating to ISEE Select
Market Data Fees
July 18, 2007.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on July 6, 2007, the International Securities Exchange, LLC (``ISE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been substantially prepared by the
Exchange. The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
ISE proposes to amend its Schedule of Fees to adopt a subscription
fee for an enhanced sentiment market data offering. The text of the
proposed rule change is available at the Commission's Public Reference
Room, at the Exchange, and at http://www.ise.com.
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 Exchange 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 Exchange 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
Pursuant to a filing previously approved by the Commission, the
Exchange currently sells on a subscription basis, to both members and
non-members, ISEE Select\TM\ (``ISEE Select''), an enhanced sentiment
market data offering.\3\ Earlier this year, the Exchange also adopted a
multi-product discount for the ISEE Select offering.\4\ ISEE Select is
based on the ISE Sentiment Index[reg], or ISEE[reg], a calculation that
represents an overall
[[Page 40913]]
view of market sentiment. The ISEE[reg] provides an intra-day picture
of how investors view stock prices by assessing customers' option
trading activity. Unlike the traditional put/call ratio which makes no
distinction between customer, market maker or firm transactions, the
ISEE[reg] measures only opening long customer transactions on ISE. ISE
updates the current ISEE[reg] value hourly during market hours and
posts it for free on its Web site.\5\
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\3\ See Securities Exchange Act Release Nos. 53532 (March 21,
2006), 71 FR 15501 (March 28, 2006) (SR-ISE-2005-56) (Notice of
Filing of Proposed Rule Change to Establish Fees for Enhanced
Sentiment Market Data) and 53756 (May 3, 2006), 71 FR 27526 (May 11,
2006) (SR-ISE-2005-56) (Order Approving Proposed Rule Change to
Establish Fees for Enhanced Sentiment Market Data) (``Initial
Filing'').
\4\ See Securities Exchange Act Release No. 55288 (February 13,
2007), 72 FR 8219 (February 23, 2007) (SR-ISE-2007-09) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To
Establish Fee Discounts for Enhanced Sentiment Market Data Offering)
(``Subsequent Filing'').
\5\ http://www.iseoptions.com/marketplace/statistics/sentiment_index.asp
.
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Pursuant to the Initial Filing, ISEE Select allows subscribers to
identify bullish and bearish investor sentiment for nearly any issue
traded on the Exchange using the same formula that is used for the ISEE
calculation. Where the ISEE[reg] is a single value for the overall
market sentiment, ISEE Select provides specific information to allow an
end user to retrieve a sentiment value for an individual symbol via a
user-defined query tool. In addition to the user-defined query tool,
ISE also offers a pre-defined scanning tool that combs the market for
sentiment levels that meet pre-defined parameters. ISEE Select provides
sentiment values for particular indices, industry sectors or individual
stocks and is calculated three times per hour versus only one time per
hour for the ISEE[reg].
ISEE Select is currently available to on-line investors on a
subscription basis as follows: (i) 100 user-defined queries for $11.95
per month; (ii) 200 user-defined queries for $14.95 per month; (iii)
unlimited user-defined queries for $19.95 per month; and (iv) unlimited
pre-defined queries for $11.95 per month. ISEE Select is also offered
by third-parties that participate in the Exchange's Marketing Alliance
program.\6\ Customers of participating third-parties are able to take
advantage of a discounted price for the same four subscription levels.
The discounted rates for these subscribers are as follows: (i) 100
user-defined queries for $9.95 per month; (ii) 200 user-defined queries
for $11.95 per month; (iii) unlimited user-defined queries for $15.95
per month; and (iv) unlimited pre-defined queries for $9.95 per month.
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\6\ When the Commission published the Initial Filing, the
Marketing Alliance program was known as the ISE Broker Marketing
Alliance, and participation in it was limited to broker-dealers.
Following the launch of the ISEE Select market data offering, and in
response to the interest the Exchange received from many non-broker-
dealers wishing to participate in the Marketing Alliance program,
the Exchange subsequently expanded the program by eliminating its
limitation to only broker-dealers. See Securities Exchange Act
Release Nos. 54508 (September 26, 2006) 71 FR 58459 (October 3,
2006) (SR-ISE-2006-44) (Notice of Filing of Proposed Rule Change To
Expand the Broker Marketing Alliance To Include Non-Broker-Dealers
with Regard to Enhanced Sentiment Market Data Offering) and 54704
(November 3, 2006), 71 FR 65859 (November 9, 2006) (SR-ISE-2006-44)
(Order Approving Proposed Rule Change To Expand the Broker Marketing
Alliance To Include Non-Broker-Dealers with Regard To Enhanced
Sentiment Market Data Offering).
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Pursuant to the Subsequent Filing, the Exchange also offers to both
member and non-member subscribers the following multi-product
discounted subscription fees: $24.95 per month for customers who
subscribe directly through ISE to both the unlimited pre-defined query
and either 200 user-defined queries or unlimited user-defined queries;
or $19.95 per month for customers of the Marketing Alliance program
partners that subscribe to both the unlimited pre-defined query and
either 200 user-defined queries or unlimited user-defined queries. The
Exchange notes that the multi-product discounts noted above are a
reduction of the actual subscription fees for the products to which
they apply. If not for the multi-product discount, for on-line
subscribers, these fees would be (i) $26.90 per month for subscribers
to both unlimited pre-defined queries and 200 user-defined queries, or
(ii) $31.90 per month for subscribers to both unlimited pre-defined
queries and unlimited user-defined queries. For customers of the
Marketing Alliance program partners, if not for the multi-product
discount, these fees would be (i) $21.90 per month for subscribers to
both unlimited pre-defined queries and 200 user-defined queries, or
(ii) $25.90 per month for subscribers to both unlimited pre-defined
queries and unlimited user-defined queries.
The Exchange now proposes to offer to both member and non-member
subscribers a data feed that will provide a bulk delivery of ISEE
Select values. The existing ISEE Select browser application allows a
subscriber to access ISEE Select values for up to five securities
simultaneously. The current proposal, on the other hand, will allow
subscribers to access numerous ISEE Select values simultaneously. The
actual potential number of ISEE Select values accessible by this
proposed data feed offering can range from one to more than 1,700.
The ISEE Select data feed will have a flat rate subscription fee
based on a fixed number of end users that each subscriber allows to
view the data, as follows: $0.10 per end user, per month, for a minimum
of 10,000 end users; $0.10 for each additional end user, per month, up
to 74,999 end users, in increments of 5,000 end users; $0.084 per end
user, per month, for redistribution from 75,000 to 199,999 end users,
in increments of 5,000 end users; and $0.0825 per end user, per month,
for redistribution to 200,000 or more end users, in minimum increments
of 5,000 end users. An example of the monthly subscription fee for a
subscriber with 100,000 end users is as follows:
------------------------------------------------------------------------
Monthly fee Monthly
Number of users per increment per user sub-total
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10,000......................................... $.10 $1,000
10,001-74,999.................................. .10 6,500
75,000-100,000................................. .084 2,100
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Monthly Total................................ ............ 9,600
Average Fee per User........................... ............ .096
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2. Statutory Basis
The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(4) of the Act,\7\ that an exchange have
an equitable allocation of reasonable dues, fees, and other charges
among its members and other persons using its facilities. In
particular, the proposed rule filing will provide members and non-
members with the ability to subscribe to a data feed of ISEE Select
values at a flat rate subscription basis for redistribution to their
customers.
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\7\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition
This 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 unsolicited written comments from members or other interested
parties.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) As the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
[[Page 40914]]
A. By order approve such proposed rule change, or
B. Institute proceedings to determine whether the proposed rule
change should be disapproved.
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 Number SR-ISE-2007-58 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-ISE-2007-58. 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 (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 inspection and
copying 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 Exchange. 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-2007-58 and should be
submitted on or before August 15, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-14314 Filed 7-24-07; 8:45 am]
BILLING CODE 8010-01-P