[Federal Register: June 6, 2007 (Volume 72, Number 108)]
[Notices]
[Page 31360-31361]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06jn07-134]
[[Page 31360]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55836; File No. SR-ISE-2007-31]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change Relating to Fee Changes
May 31, 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 May 2, 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 two 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 two Premium
Products: Rydex S&P Equal Weight ETF (``RSP'') \6\ and iShares Goldman
Sachs Semiconductor Index Fund (``IGW'').\7\ The Exchange represents
that RSP and IGW are eligible for options trading because they
constitute ``Fund Shares,'' as defined by ISE Rule 502(h).
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\6\ ``Standard & Poor's[supreg],'' ``S&P[supreg],'' ``S&P
500[supreg],'' ``Standard & Poor's 500,'' ``500,'' and ``S&P 500
Equal Weight Index'' are trademarks of The McGraw-Hill Companies,
Inc. (``McGraw-Hill'') and have been licensed for use by Rydex
Global Advisors and its affiliates (``Rydex''). RSP is not
sponsored, sold, promoted or endorsed by S&P, a division of McGraw-
Hill, and S&P makes no representation regarding the advisability of
investing in RSP. All other trademarks, service marks, or registered
trademarks are the property of their respective owners. Neither
Rydex nor S&P have licensed or authorized ISE to (i) Engage in the
creation, listing, provision of a market for trading, marketing, and
promotion of options on RSP 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 RSP or with making disclosures concerning options on RSP
under any applicable federal or state laws, rules or regulations.
Rydex and S&P 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 of Barclays Global
Investors, N.A. (``BGI''), a wholly owned subsidiary of Barclays
Bank PLC. ``Goldman Sachs'' and ``Goldman Sachs Technology Industry
Semiconductor Index'' are service marks of Goldman Sachs and Co.
(``Goldman Sachs'') and have been licensed for use for certain
purposes by BGI. IGW is not sponsored, endorsed, sold or promoted by
Goldman Sachs, and Goldman Sachs makes no representation regarding
the advisability of investing in IGW. All other trademarks, service
marks or registered trademarks are the property of their respective
owners. Neither BGI nor Goldman Sachs have licensed or authorized
ISE to (i) Engage in the creation, listing, provision of a market
for trading, marketing, and promotion of options on IGW 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 IGW or with making disclosures concerning
options on IGW under any applicable federal or state laws, rules or
regulations. BGI and Goldman Sachs 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.
Specifically, the Exchange is proposing to adopt an execution fee and a
comparison fee for all transactions in options on RSP and IGW.\8\ 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 \9\ 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.\10\ 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 RSP and
IGW 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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\8\ 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).
\9\ ``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.
\10\ 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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Further, the Exchange proposes to remove IWF, IWP, IWS and IWV from
its Schedule of Fees because the Exchange recently delisted these four
Premium Products, and they no longer trade on the Exchange.\11\
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\11\ Certain clarifying language changes were made to the
original filing. Telephone call between Samir Patel, Assistant
General Counsel, ISE and Richard Holley, Special Counsel, Division
of Market Regulation, Commission, on May 25, 2007.
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Finally, the Exchange notes that the symbol for EENC has changed to
ENT,\12\ and the Schedule of Fees has been updated to reflect that
change.\13\
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\12\ On February 9, 2007, Enterra Energy Trust, whose options
are currently traded on the Exchange, changed its ticker symbol from
EENC to ENT.
\13\ See supra note 11.
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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,\14\ in general, and
furthers the objectives of Section 6(b)(4),\15\ 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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\14\ 15 U.S.C. 78f.
\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
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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 rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \16\ and Rule 19b-4(f)(2) \17\ 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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\16\ 15 U.S.C. 78s(b)(3)(A).
\17\ 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-2007-31 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-2007-31. 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. 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-2007-31 and should be submitted on or before June
27, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-10874 Filed 6-5-07; 8:45 am]
BILLING CODE 8010-01-P