[Federal Register: April 10, 2007 (Volume 72, Number 68)]
[Notices]
[Page 17967-17969]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10ap07-121]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55571; File No. SR-ISE-2007-21]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change Relating to Fee Changes
April 3, 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 March 26, 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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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 seven Premium Products.\5\ The text
[[Page 17968]]
http://www.iseoptions.com/legal/proposed_rule_changes.asp), at the ISE, and
at the Commission's Public Reference Room.
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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 seven
Premium Products: iShares Dow Jones U.S. Basic Materials Sector Index
Fund (``IYM''),\6\ iShares MSCI Germany Index Fund (``EWG''), iShares
MSCI Australia Index Fund (``EWA''), iShares S&P 500 Growth Index Fund
(``IVW''), iShares S&P 500 Value Index Fund (``IVE''),\7\ iShares KLD
Select Social Index Fund (``KLD''), and iShares KLD 400 Social Index
Fund (``DSI'').\8\
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\6\ iShares[supreg] 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. Basic Materials 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. IYM 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 IYM; or (ii) 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 IYM or
with making disclosures concerning options on IYM 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.
\7\ iShares[supreg] is a registered trademark BGI, a wholly
owned subsidiary of Barclays Bank PLC. ``Standard &
Poor's[supreg],'' ``S&P[supreg],'' ``S&P 500[supreg],'' are
trademarks of The McGraw-Hill Companies, Inc. (``McGraw-Hill''), and
have been licensed for use for certain purposes by BGI. Neither IVW
nor IVE are sponsored, sold or endorsed by Standard & Poor's,
(``S&P''), a division of McGraw-Hill, and S&P makes no
representation regarding the advisability of investing in IVW and
IVE. ``MSCI Germany Index'' and ``MSCI Australia Index'' are service
marks of Morgan Stanley Capital International (``MSCI'') and have
been licensed for use for certain purposes by BGI. All other
trademarks and service marks are the property of their respective
owners. Neither EWG nor EWA are sponsored, endorsed, issued, sold or
promoted by MSCI. BGI, S&P and MSCI 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 IVW, IVE, EWG
and EWA; or (ii) 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 IVW, IVE, EWG and
EWA or with making disclosures concerning options on IVW, IVE, EWG
and EWA under any applicable federal or state laws, rules or
regulations. BGI, S&P and MSCI do not sponsor, endorse, or promote
such activity by ISE, and are not affiliated in any manner with ISE.
\8\ iShares[supreg] is a registered trademark of BGI, a wholly
owned subsidiary of Barclays Bank PLC. ``KLD Select
SocialSM Index'' and ``Domini 400 SocialSM
Index'' are service marks of KLD Research & Analytics, Inc. and have
been licensed for use for certain purposes by BGI. All other
trademarks and service marks are the property of their respective
owners. Neither KLD nor DSI are sponsored, endorsed, issued, sold or
promoted by KLD Research & Analytics, Inc. BGI and KLD Research &
Analytics, Inc. 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 KLD and DSI; or (ii) 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 KLD and DSI or with making disclosures
concerning options on KLD and DSI under any applicable federal or
state laws, rules or regulations. BGI and KLD Research & Analytics,
Inc. do not sponsor, endorse, or promote such activity by ISE, and
are 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.\9\
Specifically, the Exchange is proposing to adopt an execution fee and a
comparison fee for all transactions in options on IYM, EWG, EWA, IVW,
IVE, KLD and DSI.\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 $0.16 and $0.03 per contract, respectively.
Further, since options on IYM, EWG, EWA, IVW, IVE, KLD and DSI are
multiply-listed, the Payment for Order Flow fee shall also apply. 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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\9\ The Exchange represents that IYM, EWG, EWA, IVW, IVE, KLD
and DSI constitute ``Fund Shares,'' as defined by ISE Rule 502(h).
\10\ 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).
\11\ ``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.
\12\ The execution fee is currently between $0.21 and $0.12 per
contract side, depending on the Exchange Average Daily Volume, and
the comparison fee is currently $0.03 per contract side.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the objectives of Section 6 of the Act,\13\ in general, and
furthers the objectives of Section 6(b)(4),\14\ in particular, in that
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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\13\ 15 U.S.C. 78f.
\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.
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
Because the foregoing rule change establishes or changes a due,
fee, or other charge imposed by the Exchange, it 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,
[[Page 17969]]
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-2007-21 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-2007-21. 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-2007-21 and should be submitted on or before May 1,
2007.
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\17\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\17\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-6672 Filed 4-9-07; 8:45 am]
BILLING CODE 8010-01-P