[Federal Register: July 6, 2007 (Volume 72, Number 129)]
[Notices]
[Page 37063-37064]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06jy07-115]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55973; File No. SR-ISE-2007-39]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule
Change as Modified by Amendment No. 1 Thereto Relating to a Fee
Reduction and Fee Cap in Options on IWM
June 28, 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 June 1, 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. On June 26, 2007, the Exchange filed Amendment No. 1 to the
proposed rule change.\3\ ISE has designated this proposal as one
establishing or changing a due, fee, or other charge imposed by ISE
under Section 19(b)(3)(A)(ii) of the Act \4\ and Rule 19b-4(f)(2)
thereunder,\5\ which renders the proposal effective upon filing with
the Commission. The Commission is publishing this notice to solicit
comments on the proposed rule change, as amended, from interested
persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Amendment No. 1 made clarifying changes to the purpose
section, clarified the operation of the Exchange's waiver program
with respect to the Comparison and Non-ISE Market Maker fees, and
corrected a typographical error in Exhibit 5.
\4\ 15 U.S.C. 78s(b)(3)(A)(ii).
\5\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
ISE proposes to establish a reduction and a cap in fees for trading
options on the iShares Russell 2000[supreg] Index Fund (``IWM''). The
text of the proposed rule change is available at the Exchange, its Web
Site at http://www.iseoptions.com/legal/proposed_rule_changes.asp,
and the Commission's Public Reference Room.
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
The Exchange proposes to amend its Schedule of Fees to impose, on a
pilot basis until June 30, 2007, both a reduction in and a cap on
exchange transaction and comparison fees for IWM options. Specifically,
any Member with monthly Average Daily Volume (``ADV'') of 8,000
contracts in IWM options would receive a $.10 discount from the
standard transaction fees for contracts traded above that amount, up to
ADV of 10,000 contracts in IWM options. For contracts in IWM options
traded in excess of 10,000 ADV for a month, the Exchange will waive all
transaction and comparison fees. The proposed fee discount program
applies to ISE Market Maker orders, non-ISE Market Maker orders, and
Firm Proprietary orders in IWM options. The Exchange's current
transaction fees for these order types are as follows: For ISE Market
Maker orders, the transaction fees range from $.21 to $.12 a contract,
depending on the Exchange's trading volume, plus a comparison fee of
$.03 per contract; for non-ISE Market Maker orders and Firm Proprietary
orders, the transaction fees are $.37 and $.15, respectively, plus a
comparison fee of $.03 per contract. The fee reduction and waiver is
intended to increase the Exchange's competitiveness in trading IWM
options. The Exchange notes that the proposed discount will apply to
transaction fees only and not to the payment for order flow fee or any
licensing surcharge fee that may be applicable to the trading of
options in IWM.
This proposal is similar to the volume-based discount fee program
currently in place for trading in options on the NASDAQ-100 Index
Tracking Stock[supreg] (QQQQ[supreg]) and for trading in the Exchange's
Facilitation Mechanism.\6\
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\6\ See Securities Exchange Act Release No. 49147 (January 29,
2004), 69 FR 5629 (February 5, 2004) (SR-ISE-2003-32).
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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.
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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
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 unsolicited written comments from members or other interested
parties.
[[Page 37064]]
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing proposed rule change has been designated as a fee
change pursuant to Section 19(b)(3)(A)(ii) of the Act \8\ and Rule 19b-
4(f)(2) \9\ thereunder, because it establishes or changes a due, fee,
or other charge imposed by the Exchange. Accordingly, the proposal took
effect upon filing with the Commission. 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.\10\
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\8\ 15 U.S.C. 78s(b)(3)(A)(ii).
\9\ 17 CFR 240.19b-4(f)(2).
\10\ For purposes of calculating the 60-day period within which
the Commission may summarily abrogate the proposed rule change under
Section 19(b)(3)(C) of the Act, the Commission considers the period
to commence on June 26, 2007, the date on which ISE filed Amendment
No. 1. See 15 U.S.C. 78s(b)(3)(C).
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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 Number SR-ISE-2007-39 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-2007-39. 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-2007-39 and should be
submitted on or before July 27, 2007.
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\11\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\11\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-13068 Filed 7-5-07; 8:45 am]
BILLING CODE 8010-01-P