[Federal Register: March 13, 2007 (Volume 72, Number 48)]
[Notices]
[Page 11411-11413]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13mr07-91]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55407; File No. SR-ISE-2007-13]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change Relating to Fee Changes
March 6, 2007.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on February 7, 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 ISE. The ISE has designated this proposal as one
establishing or changing a due, fee, or other charge applicable only to
a member under Section 19(b)(3)(A)(ii) of the Act,\3\ and Rule 19b-
4(f)(2) thereunder,\4\ which renders the proposal effective upon filing
with the Commission. 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.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
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[[Page 11412]]
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The ISE is proposing to amend its Schedule of Fees to establish
fees for transactions in options on three Premium Products.\5\ The text
of the proposed rule change is available at the Exchange, the
Commission's Public Reference Room, and at http://www.iseoptions.com.
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\5\ Premium Products is defined in the Schedule of Fees as the
products enumerated therein.
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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 ISE 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 ISE 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
The Exchange is proposing to amend its Schedule of Fees to
establish fees for transactions in options on the following three
Premium Products: ISE-Revere Wal-Mart Supplier Index (``WMX''),\6\
iShares Dow Jones U.S. Energy Sector Index Fund (``IYE''),\7\ and First
Trust Dow Jones Select MicroCap Index Fund (``FDM'').\8\ Specifically,
the Exchange is proposing to adopt an execution fee and a comparison
fee for all transactions in options on WMX, IYE, and FDM.\9\ The amount
of the execution fee and comparison fee for products covered by this
filing shall be $0.15 and $0.03 per contract, respectively, for all
Public Customer Orders\10\ and Firm Proprietary orders. The amount of
the execution fee and comparison fee for all ISE Market Maker
transactions shall be equal to the execution fee and comparison fee
currently charged by the Exchange for ISE Market Maker transactions in
equity options.\11\ Finally, the amount of the execution fee and
comparison fee for all non-ISE Market Maker transactions shall be $0.16
and $0.03 per contract, respectively. All of the applicable fees
covered by this filing are identical to fees charged by the Exchange
for all other Premium Products. The Exchange believes the proposed rule
change will further the Exchange's goal of introducing new products to
the marketplace that are competitively priced.
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\6\ The ISE-Revere Wal-Mart Supplier Index was jointly developed
by ISE and Revere Data, LLC (``Revere''). Revere, an independent and
privately owned provider of research data and investment analytics,
provides specific research and support for the Wal-Mart Supplier
Index. Wal-Mart[reg] is a trademark of Wal-Mart Stores, Inc. The
Wal-Mart Supplier Index is not sponsored, endorsed, sold or promoted
by Wal-Mart Stores, Inc., and Wal-Mart Stores, Inc. makes no
representation regarding the advisability of investing in WMX. Wal-
Mart Stores, Inc. has not licensed or authorized ISE to (i) engage
in the creation, listing, provision of a market for trading,
marketing, and promotion of options on WMX or (ii) to use any of
their trademarks or service marks in connection with the listing,
provision of a market for trading, marketing, and promotion of
options on WMX or with making disclosures concerning options on WMX
under any applicable federal or state laws, rules or regulations.
Wal-Mart Stores, Inc. does not sponsor, endorse, or promote such
activity by ISE, and is not affiliated in any manner with ISE.
\7\ iShares[reg] is a registered trademark of Barclays Global
Investors, N.A. (``BGI''), a wholly owned subsidiary of Barclays
Bank PLC. ``Dow Jones'' and ``Dow Jones U.S. Energy Sector Index
Fund'' are trademarks and service marks of Dow Jones & Company, Inc.
(``Dow Jones'') and have been licensed for use for certain purposes
by BGI. All other trademarks and service marks are the property of
their respective owners. The Dow Jones U.S. Energy Sector Index Fund
is not sponsored, endorsed, issued, sold or promoted by Dow Jones.
BGI and Dow Jones have not licensed or authorized ISE to (i) engage
in the creation, listing, provision of a market for trading,
marketing, and promotion of options on IYE or (ii) to use and refer
to any of their trademarks or service marks in connection with the
listing, provision of a market for trading, marketing, and promotion
of options on IYE or with making disclosures concerning options on
IYE under any applicable federal or state laws, rules or
regulations. BGI and Dow Jones do not sponsor, endorse, or promote
such activity by ISE, and are not affiliated in any manner with ISE.
\8\ The First Trust Dow Jones Select MicroCap Index
SM Fund is distributed by First Trust Portfolios, L.P.
``Dow Jones,'' and ``Dow Jones Select MicroCap Index,'' are
trademarks of Dow Jones & Company, Inc. and have been licensed for
use for certain purposes by First Trust. All other trademarks and
service marks are the property of their respective owners. The First
Trust Dow Jones Select MicroCap Index Fund is not sponsored,
endorsed, issued, sold or promoted by Dow Jones. First Trust and Dow
Jones have not licensed or authorized ISE to (i) engage in the
creation, listing, provision of a market for trading, marketing, and
promotion of options on FDM or (ii) to use and refer to any of their
trademarks or service marks in connection with the listing,
provision of a market for trading, marketing, and promotion of
options on FDM or with making disclosures concerning options on FDM
under any applicable federal or state laws, rules or regulations.
First Trust and Dow Jones do not sponsor, endorse, or promote such
activity by ISE, and are not affiliated in any manner with ISE.
The Exchange represents that IYE and FDM constitute ``Fund
Shares,'' as defined by ISE Rule 502(h). The Exchange further
represents that WMX meets the standards of ISE Rule 2002(b), which
allows the ISE to begin trading this product by filing Form 19b-4(e)
at least five business days after commencement of trading this new
product pursuant to Rule 19b-4(e) of the Act. Accordingly, ISE filed
Form 19b-4(e) with the Commission on February 9, 2007.
\9\ The Exchange represents that these fees will be charged only
to Exchange members. Under a pilot program that is set to expire on
July 31, 2007, these fees will also be charged to Linkage Orders (as
defined in ISE Rule 1900). See Securities Exchange Act Release No.
54204 (July 25, 2006), 71 FR 43548 (August 1, 2006) (SR-ISE-2006-
38).
\10\ Public Customer Order is defined in Exchange Rule
100(a)(39) as an order for the account of a Public Customer. Public
Customer is defined in Exchange Rule 100(a)(38) as a person that is
not a broker or dealer in securities.
\11\ The execution fee is currently between $.21 and $.12 per
contract side, depending on the Exchange Average Daily Volume, and
the comparison fee is currently $.03 per contract side.
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Additionally, the Exchange has entered into a license agreement
with Revere Data, LLC in connection with the listing and trading of
options on WMX. As with certain other licensed options, to defray the
licensing costs, the Exchange is adopting a surcharge fee of five (5)
cents per contract for trading in options on WMX. The Exchange believes
charging the participants that trade this instrument is the most
equitable means of recovering the costs of the license. However,
because of competitive pressures in the industry, the Exchange proposes
to exclude Public Customer Orders from this surcharge fee. Accordingly,
this surcharge fee will only be charged to Exchange members with
respect to non-Public Customer Orders (e.g., ISE Market Maker, non-ISE
Market Maker, and Firm Proprietary orders) and shall apply to Linkage
Orders\12\ under a pilot program that is set to expire on July 31,
2007.\13\ Further, the Exchange's Payment for Order Flow fee shall only
apply to the trading in options on IYE and FDM as these products are
multiply-listed.
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\12\ See ISE Rule 1900.
\13\ See Securities Exchange Act Release No. 54204 (July 25,
2006), 71 FR 43548 (August 1, 2006) (SR-ISE-2006-38).
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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)\14\ that an exchange have an
equitable allocation of reasonable dues, fees and other charges among
its members and other persons using its facilities.
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\14\ 15 U.S.C. 78f(b)(4).
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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.
[[Page 11413]]
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
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act\15\ and Rule 19b-4(f)(2)\16\ thereunder. At any
time within 60 days of the filing of such 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.
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\15\ 15 U.S.C. 78s(b)(3)(A).
\16\ 17 CFR 19b-4(f)(2).
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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-2007-13 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-ISE-2007-13. 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. 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-2007-13 and should be submitted on or before April
3, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-4504 Filed 3-12-07; 8:45 am]
BILLING CODE 8010-01-P