[Federal Register: April 17, 2008 (Volume 73, Number 75)]
[Notices]
[Page 20994-20996]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17ap08-106]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57643; File No. SR-ISE-2008-31]
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 Fee Changes
April 10, 2008.
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 April 7, 2008, 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 prepared by the Exchange. The
Exchange 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 \3\ and Rule 19b-4(f)(2) thereunder,\4\ which renders the
proposal effective upon filing with the Commission. On April 9, 2008,
ISE filed Amendment No. 1 to the proposed rule change.\5\ 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\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
\5\ In Amendment No. 1, ISE corrected the ticker symbol for the
PowerShares DB Gold Fund from DBL to DGL in the purpose section of
the Form 19b-4 and in Exhibit 1. ISE also made corresponding changes
to the Schedule of Fees in Exhibit 5.
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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 establish fees for
transactions in options on 5 Premium Products.\6\ The text of the
proposed rule change is available at the Exchange, on the
[[Page 20995]]
Exchange's Web site at http://www.ise.com, and in the Commission's
Public Reference Room.
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\6\ 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 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. ISE has substantially 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 PowerShares DB Oil
Fund (``DBO''), PowerShares DB Silver Fund (''DBS''), PowerShares DB
Gold Fund (``DGL''), \7\ Ultra Dow30 ProShares (``DDM''),\8\ and Ultra
Financials ProShares (``UYG''). \9\ The Exchange represents that DBO,
DBS, DGL, DDM, and UYG are eligible for options trading because they
constitute ``Exchange-Traded Fund Shares,'' as defined by ISE Rule
502(h).
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\7\ The PowerShares DB Oil Fund (``DBO'') is based on the
Deutsche Bank Liquid Commodity Index--Optimum Yield Oil Excess
Return(tm). The PowerShares DB Silver Fund (``DBS'') is based on the
Deutsche Bank Liquid Commodity Index--Optimum Yield Silver Excess
Return(tm). The PowerShares DB Gold Fund (``DGL'') is based on the
Deutsche Bank Liquid Commodity Index--Optimum Yield Gold Excess
Return(tm). DBO, DBS and DGL are managed by DB Commodity Services
LLC. DGLCI(tm) and Deutsche Bank Liquid Commodity Index(tm) are
trademarks of Deutsche Bank AG, London (``DB AG''). PowerShares(r)
is a registered service mark of PowerShares Capital Management LLC
(``PowerShares''). DBO, DBS and DGL are not sponsored, endorsed,
sold, or promoted by DB AG, and DB AG makes no representation
regarding the advisability of investing in DBO, DBS and DGL. Neither
DB AG nor PowerShares has licensed or authorized ISE to (i) engage
in the creation, listing, provision of a market for trading,
marketing, and promotion of options on DBO, DBS, and DGL 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 DBO, DBS and DGL or with
making disclosures concerning options on DBO, DBS, and DGL under any
applicable federal or state laws, rules or regulations. DB AG and
PowerShares do not sponsor, endorse, or promote such activity by ISE
and are not affiliated in any manner with ISE.
\8\ ``The Dow 30\SM\,'' ``Dow Jones,'' ``Dow Jones Industrial
Average,'' and ``DJIA,'' are service marks of Dow Jones & Company,
Inc. (``Dow Jones'') and have been licensed for use for certain
purposes by ProFunds Trust (``ProShares''). All other trademarks and
service marks are the property of their respective owners. The Ultra
Dow30 ProShares (``DDM'') is not sponsored, endorsed, issued, sold,
or promoted by Dow Jones, and Dow Jones makes no representation
regarding the advisability of investing in DDM. Neither Dow Jones
nor ProShares has licensed or authorized ISE to (i) engage in the
creation, listing, provision of a market for trading, marketing, and
promotion of options on DDM 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 DDM or with making disclosures concerning options on DDM
under any applicable federal or state laws, rules or regulations.
Dow Jones and ProShares do not sponsor, endorse, or promote such
activity by ISE and is not affiliated in any manner with ISE.
\9\ ``Dow Jones U.S. Financials\SM\,'' is a service mark of Dow
Jones and has been licensed for use for certain purposes by ProFunds
Trust (``ProShares''). All other trademarks and service marks are
the property of their respective owners. The Ultra Financials
ProShares (``UYG'') is not sponsored, endorsed, issued, sold or
promoted by Dow Jones, and Dow Jones makes no representation
regarding the advisability of investing in UYG. Neither Dow Jones
nor ProShares has licensed or authorized ISE to (i) engage in the
creation, listing, provision of a market for trading, marketing, and
promotion of options on UYG 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 UYG or with making disclosures concerning options on UYG
under any applicable federal or state laws, rules or regulations.
Dow Jones and ProShares do not sponsor, endorse, or promote such
activity by ISE and is not affiliated in any manner with ISE.
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All of the applicable fees covered by this filing are identical to
fees charged by the Exchange for all other Premium Products.
Specifically, the Exchange is proposing to adopt an execution fee and a
comparison fee for all transactions in options on DBO, DBS, DGL, DDM,
and UYG.\10\ 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 \11\ 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.\12\ Finally, the amount of the
execution fee and comparison fee for all non-ISE Market Maker
transactions shall be $0.37 and $0.03 per contract, respectively.\13\
Further, since options on DBO, DBS, DGL, DDM, and UYG are multiply-
listed, the Exchange's Payment for Order Flow fee shall apply to all
these 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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\10\ These fees will be charged only to Exchange members. Under
a pilot program that is set to expire on July 31, 2008, these fees
will also be charged to Linkage Principal Orders (``Linkage P
Orders'') and Linkage Principal Acting as Agent Orders (``Linkage P/
A Orders''). The amount of the execution fee charged by the Exchange
for Linkage P Orders and Linkage P/A Orders is $0.24 per contract
side and $0.15 per contract side, respectively. See Securities
Exchange Act Release No. 56128 (July 24, 2007), 72 FR 42161 (August
1, 2007) (SR-ISE-2007-55).
\11\ Public Customer Order is defined in ISE Rule 100(a)(39) as
an order for the account of a Public Customer. Public Customer is
defined in ISE Rule 100(a)(38) as a person that is not a broker or
dealer in securities.
\12\ 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.
\13\ The amount of the execution and comparison fee for non-ISE
Market Maker transactions executed in the Exchange's Facilitation
and Solicitation Mechanisms is $0.16 and $0.03 per contract,
respectively.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act \14\ in general, and Section 6(b)(4) of
the Act \15\ in particular, because it is designed to provide for the
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).
\15\ 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.
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 \16\ and Rule
19b-4(f)(2) \17\ 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
[[Page 20996]]
necessary or appropriate in the public interest, for the protection of
investors, or otherwise in furtherance of the purposes of the Act.\18\
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\16\ 15 U.S.C. 78s(b)(3)(A)(ii).
\17\ 17 CFR 240.19b-4(f)(2).
\18\ 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 April 9, 2008, the date on which the ISE submitted
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-2008-31 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-2008-31. 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 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-2008-31 and should be
submitted on or before May 8, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-8193 Filed 4-16-08; 8:45 am]
BILLING CODE 8010-01-P