[Federal Register: July 6, 2007 (Volume 72, Number 129)]
[Notices]
[Page 37064-37065]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06jy07-116]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55975; File No. SR-ISE-2007-48]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change Relating to Fee Changes
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 15, 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 ISE. ISE
filed the proposal pursuant to Section 19(b)(3)(A)(ii) of the Act \3\
and Rule 19b-4(f)(2) \4\ thereunder, as establishing or changing a due,
fee, or other charges applicable to a member, which renders the
proposed rule change 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
ISE is proposing to amend its Schedule of Fees to: (1) Remove the
surcharge fee for transactions in options on the iShares Russell
2000[supreg] Index Fund (``IWM''), the iShares Russell 2000[supreg]
Value Index Fund (``IWN''), the iShares Russell 2000[supreg] Growth
Index Fund (``IWO''), the iShares Russell 1000[supreg] Value Index Fund
(``IWD'') and the iShares Russell 1000[supreg] Index Fund (``IWB'');
and (2) raise the surcharge fee for transactions in options on the
Russell 1000[supreg] Index (``RUI''), the Russell 2000[supreg] Index
(``RUT''), and the Mini Russell 2000[supreg] Index (``RMN''). The text
of the proposed rule change is available at ISE, http://www.iseoptions.com
, 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 is proposing to amend its Schedule of Fees to: (1)
Remove the surcharge fee previously adopted for transactions in options
on IWM, IWN, IWO, IWD,\5\ and IWB; \6\ and (2) raise the surcharge fee
previously adopted for transactions in options on RUI, RUT and RMN.\7\
The Exchange is proposing to remove the surcharge fee from its Schedule
of Fees because it no longer pays a license fee to the Frank Russell
[[Page 37065]]
Company (``Russell'') in connection with transactions in options on
IWM, IWN, IWO, IWD and IWB. Accordingly, there is no longer a need for
this surcharge fee. The Exchange will continue to charge an execution
fee and a comparison fee for transactions in options on IWM, IWN, IWO,
IWD and IWB.
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\5\ See Securities Exchange Act Release No. 47075 (December 20,
2002), 67 FR 79673 (December 30, 2002) (SR-ISE-2002-29).
\6\ See Securities Exchange Act Release No. 47564 (March 24,
2003), 68 FR 15256 (March 28, 2003) (SR-ISE-2003-13).
\7\ See Securities Exchange Act Release No. 51858 (June 16,
2005), 70 FR 36218 (June 22, 2005) (SR-ISE-2005-26).
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Additionally, pursuant to a revised license agreement between
Russell and ISE in connection with the listing and trading of options
on RUI, RUT and RMN, and to defray the increased licensing costs, the
Exchange is raising its surcharge fee from $0.10 per contract to $0.15
per contract for trading in options on RUI, RUT and RMN. 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 continue excluding Public Customer Orders \8\ from this surcharge
fee. Accordingly, this surcharge fee shall continue to be charged only
to Exchange members with respect to non-Public Customer Orders (e.g.,
ISE Market Maker, non-ISE Market Maker & Firm Proprietary orders) and
shall apply to certain Linkage Orders under a pilot program that is set
to expire on July 31, 2007.\9\ The Exchange will, however, continue to
charge an execution fee and a comparison fee for transactions in
options on RUI, RUT and RMN.
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\8\ 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.
\9\ Linkage Orders are defined in ISE Rule 1900(10). Under a
pilot program that is set to expire on July 31, 2007, these fees
will also be charged to Principal Acting as Agent Orders and
Principal Orders (as defined in ISE Rule 1900(10)(i)-(ii)). 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) \10\ that the rules of an exchange
provide for the equitable allocation of reasonable dues, fees, and
other charges among its members and issuers and other persons using its
facilities.
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\10\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition
ISE does not believe that the proposed rule change will result in
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 Form 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 interested parties.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing proposed rule change has become effective upon filing
with the Commission pursuant to Section 19(b)(3)(A)(ii) of the Act \11\
and Rule 19b-4(f)(2) \12\ thereunder, because it establishes or changes
a due, fee, or other charge applicable only to a member.
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\11\ 15 U.S.C. 78s(b)(3)(A)(ii).
\12\ 17 CFR 240.19b-4(f)(2).
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At any time within 60 days of the filing of the 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.
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-2007-48 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-2007-48. 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 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-2007-48 and should be
submitted on or before July 27, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-13070 Filed 7-5-07; 8:45 am]
BILLING CODE 8010-01-P