[Federal Register: October 1, 2008 (Volume 73, Number 191)]
[Notices]
[Page 57179-57181]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01oc08-136]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-58635; File No. SR-ISE-2008-68]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change Relating to Fee Changes.
September 24, 2008.
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 September 16, 2008, the International Securities Exchange, LLC
(the ``Exchange'' or the ``ISE'') filed with the Securities and
Exchange Commission the proposed rule change, as described in Items I,
II, and III below, which items have been prepared by the self-
regulatory organization. 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.
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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 8 Premium Products.\3\ The text of
the proposed rule change is available at the Exchange.
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\3\ Premium Product [sic] is defined in the Schedule of Fees as
the products enumerated therein.
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[[Page 57180]]
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 self-regulatory organization
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 self-regulatory organization
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 PowerShares DB
Commodity Index Tracking Fund (``DBC''),\4\ the PowerShares DB Base
Metals Fund (``DBB''),\5\ the Vanguard[supreg] Total Stock Market ETF
(``VTI''),\6\ the PowerShares DB U.S. Dollar Bullish Fund (``UUP''),\7\
the iShares Lehman TIPS Bond Fund (``TIP''),\8\ the iShares MSCI
Pacific Ex-Japan Index Fund (``EPP''),\9\ the Ultra Real Estate
ProShares (``URE'') and the UltraShort MSCI EAFE ProShares
(``EFU'').\10\ The Exchange represents that DBC, DBB, VTI, UUP, TIP,
EPP, URE, and EFU are eligible for options trading because they
constitute ``Exchange-Traded Fund Share,'' as defined by ISE Rule
502(h).
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\4\ The PowerShares DB Commodity Index Tracking Fund (``DBC'')
is based on the Deutsche Bank Liquid Commodity Index--Optimum Yield
Excess Return TM. DBC is managed by DB Commodity Services
LLC. DBLCI TM and Deutsche Bank Liquid Commodity Index
TM are trademarks of Deutsche Bank AG, London (``DB
AG''). PowerShares[supreg] is a registered service mark of
PowerShares Capital Management LLC (``PowerShares''). DBC is not
sponsored, endorsed, sold or promoted by DB AG, and DB AG makes no
representation regarding the advisability of investing in DBC.
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 DBC 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 DBC or with making disclosures concerning options on
DBC 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.
\5\ The PowerShares DB Base Metals Fund (``DBB'') is based on
the Deutsche Bank Liquid Commodity Index--Optimum Yield Industrial
Metals Excess Return TM. DBB is managed by DB Commodity
Services LLC. DBLCI TM and Deutsche Bank Liquid Commodity
Index TM are trademarks of Deutsche Bank AG, London (``DB
AG''). PowerShares[supreg] is a registered service mark of
PowerShares Capital Management LLC (``PowerShares''). DBB is not
sponsored, endorsed, sold or promoted by DB AG, and DB AG makes no
representation regarding the advisability of investing in DBB.
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 DBB 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 DBB or with making disclosures concerning options on
DBB 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.
\6\ Vanguard, Vanguard ETFs and Vanguard ETF are trademarks of
The Vanguard Group, Inc. (``Vanguard''). All other marks are the
exclusive property of their respective owners. The Vanguard[supreg]
Total Stock Market ETF (``VTI'') tracks the Morgan Stanley Capital
International[supreg] (MSCI[supreg]) U.S. Broad Market Index. MSCI
does not sponsor, endorse, or promote VTI and makes no
representation regarding the advisability of investing in VTI.
Vanguard has not licensed or authorized ISE to (i) engage in the
creation, listing, provision of a market for trading, marketing, and
promotion of options on VTI 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 VTI or with making disclosures concerning options on VTI
under any applicable federal or state laws, rules or regulations.
Vanguard does not sponsor, endorse, or promote such activity by ISE,
and is not affiliated in any manner with ISE.
\7\ The PowerShares DB U.S. Dollar Bullish Fund (``UUP'') is
based on the Deutsche Bank Long U.S. Dollar Index (USDX[supreg])
Futures Index TM (``DB Long USD Futures Index''). The
sponsor of the DB Long USD Futures Index is Deutsche Bank AG, London
(``DB AG''). UUP is managed by DB Commodity Services LLC. U.S.
Dollar Index[supreg] and USDX[supreg] are registered service marks
of IntercontinentalExchange, Inc. PowerShares[supreg] is a
registered service mark of PowerShares Capital Management LLC
(``PowerShares''). UUP is not sponsored, endorsed, sold or promoted
by DB AG, and DB AG makes no representation regarding the
advisability of investing in UUP. 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 UUP 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 UUP or
with making disclosures concerning options on UUP 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\ iShares[supreg] is a registered trademark of Barclays Global
Investors, N.A. (``BGI''), a majority owned subsidiary of Barclays
Bank PLC. ``Lehman Brothers U.S. Treasury TIPS Index'' is a
trademark of Lehman Brothers and has been licensed for use for
certain purposes by BGI. All other trademarks and service marks are
the property of their respective owners. iShares Lehman TIPS Bond
Fund (``TIP'') is not sponsored, endorsed, issued, sold or promoted
by Lehman. BGI and Lehman 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 TIP 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 TIP or with making disclosures concerning options on
TIP under any applicable federal or state laws, rules or
regulations. BGI and Lehman do not sponsor, endorse, or promote such
activity by ISE, and are not affiliated in any manner with ISE.
\9\ iShares[supreg] is a registered trademark of Barclays Global
Investors, N.A. (``BGI''), a majority owned subsidiary of Barclays
Bank PLC. ``MSCI Pacific Ex-Japan Index'' is a service mark of
Morgan Stanley Capital International (``MSCI'') and has been
licensed for use for certain purposes by BGI. All other trademarks
and service marks are the property of their respective owners.
iShares MSCI Pacific Ex-Japan Index Fund (``EPP'') is not sponsored,
endorsed, issued, sold or promoted by MSCI. BGI 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 EPP 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 EPP or
with making disclosures concerning options on EPP under any
applicable federal or state laws, rules or regulations. BGI and MSCI
do not sponsor, endorse, or promote such activity by ISE, and are
not affiliated in any manner with ISE.
\10\ ``Dow Jones'' and ``Dow Jones U.S. Real Estate
SM'' are service marks of Dow Jones & Company, Inc.
(``Dow Jones'') and have been licensed for use for certain purposes
by ProShares. MSCI, Morgan Stanley Capital International and EAFE
are service marks of MSCI and have been licensed for use for certain
purposes by ProShares. All other trademarks and service marks are
the property of their respective owners. The Ultra Real Estate
ProShares (``URE'') and the UltraShort MSCI EAFE ProShares (``EFU'')
are not sponsored, endorsed, issued, sold or promoted by Dow Jones
or MSCI. Dow Jones 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 URE and EFU 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 URE and EFU or with making
disclosures concerning options on URE and EFU under any applicable
federal or state laws, rules or regulations. Dow Jones and MSCI 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 for
all transactions in options on DBC, DBB, VTI, UUP, TIP, EPP, URE, and
EFU.\11\ The amount of the execution fee for products covered by this
filing shall be $0.18 per contract for all Public Customer Orders \12\
and Firm Proprietary orders. The amount of the execution fee for all
ISE Market Maker transactions shall be equal to the execution fee
currently charged by the Exchange for ISE Market Maker
[[Page 57181]]
transactions in equity options.\13\ Finally, the amount of the
execution fee for all non-ISE Market Maker transactions shall be $0.45
per contract.\14\ Further, since options on DBC, DBB, VTI, UUP, TIP,
EPP, URE, and EFU 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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\11\ These fees will be charged only to Exchange members. Under
a pilot program that is set to expire on July 31, 2009, 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. 58143 (July 11, 2008), 73 FR 41388 (July
18, 2008) (SR-ISE-2008-52)
\12\ 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 or
entity that is not a broker or dealer in securities.
\13\ The Exchange applies a sliding scale, between $0.01 and
$0.18 per contract side, based on the number of contracts an ISE
market maker trades in a month.
\14\ The amount of the execution fee for non-ISE Market Maker
transactions executed in the Exchange's Facilitation and
Solicitation Mechanisms is $0.19 per contract.
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(b) Basis--The Exchange believes that the proposed rule change is
consistent with the objectives of Section 6 of the Act,\15\ in general,
and furthers the objectives of Section 6(b)(4),\16\ 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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\15\ 15 U.S.C. 78f.
\16\ 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 rule change has become effective pursuant to Section
19(b)(3) of the Act \17\ and Rule 19b-4(f)(2) \18\ 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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\17\ 15 U.S.C. 78s(b)(3)(A).
\18\ 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 Number SR-ISE-2008-68 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-ISE-2008-68. 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 the filing will also be available for
inspection and copying at the principal office of the self-regulatory
organization. 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-
2008-68 and should be submitted on or before October 22, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
Florence E. Harmon,
Acting Secretary.
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\19\ 17CFR 200.30-3(a)(12).
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[FR Doc. E8-22967 Filed 9-30-08; 8:45 am]
BILLING CODE 8011-01-P