[Federal Register: January 30, 2009 (Volume 74, Number 19)]
[Notices]
[Page 5704-5706]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30ja09-104]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-59288; File No. SR-ISE-2009-03]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change Relating to Fee Changes
January 23, 2009.
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 January 15, 2009, 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 4 Premium Products.\3\ The text of
the proposed rule change is available on the Exchange's Web site
(http://www.ise.com), at the principal office of the Exchange, and at
the Commission's Public Reference Room.
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\3\ 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 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
[[Page 5705]]
to establish fees for transactions in options on the Short QQQ
ProShares (``PSQ''),\4\ the Short S&P500 ProShares (``SH''),\5\ the
UltraShort Lehman 20+ Year Treasury ProShares (``TBT''),\6\ and the
PowerShares DB U.S. Dollar Bearish Fund (``UDN'').\7\ The Exchange
represents that PSQ, SH, TBT and UDN are eligible for options trading
because they constitute ``Exchange-Traded Fund Shares,'' as defined by
ISE Rule 502(h).
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\4\ ``NASDAQ-100 Index'' is a trademark of the NASDAQ Stock
Markets, Inc. (``NASDAQ'') and has been licensed for use for certain
purposes by ProShares Trust. All other trademarks and service marks
are the property of their respective owners. The Short QQQ ProShares
(``PSQ'') is not sponsored, endorsed, sold or promoted by NASDAQ.
NASDAQ 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 PSQ 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 PSQ or with making disclosures concerning options on PSQ
under any applicable federal or state laws, rules or regulations.
NASDAQ does not sponsor, endorse, or promote such activity by ISE
and is not affiliated in any manner with ISE.
\5\ ``Standard & Poor's,'' ``S&P,'' ``S&P 500,'' ``Standard &
Poor's 500,'' ``500'' are trademarks of The McGraw-Hill Companies,
Inc. (``McGraw-Hill'') and have been licensed for use for certain
purposes by ProShares Trust. All other trademarks and service marks
are the property of their respective owners. The Short S&P500
ProShares (``SH'') is not sponsored, endorsed, sold or promoted by
Standard & Poor's, (``S&P''), a division of McGraw-Hill. S&P 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 SH 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 SH or with
making disclosures concerning options on SH under any applicable
federal or state laws, rules or regulations. S&P does not sponsor,
endorse, or promote such activity by ISE and is not affiliated in
any manner with ISE.
\6\ ``Lehman Brothers'' and ``Lehman Brothers Inc.'' are
trademarks of Lehman Brothers Inc. (``Lehman'') and have been
licensed for use for certain purposes by ProShares Trust. All other
trademarks and service marks are the property of their respective
owners. The UltraShort Lehman 20+ Year Treasury ProShares (``TBT'')
is not sponsored, endorsed, sold or promoted by Lehman. Lehman 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 TBT 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 TBT or with making disclosures concerning options on TBT
under any applicable federal or state laws, rules or regulations.
Lehman 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 Bearish Fund (``UDN'') is
based on the Deutsche Bank Short U.S. Dollar Index (USDX[reg])
Futures Index\TM\ (``DB Short USD Futures Index''). The sponsor of
the DB Short USD Futures Index is Deutsche Bank AG, London (``DB
AG''). UDN is managed by DB Commodity Services LLC. U.S. Dollar
Index[reg] and USDX[reg] are registered service marks of
IntercontinentalExchange, Inc. PowerShares[reg] is a registered
service mark of PowerShares Capital Management LLC
(``PowerShares''). UDN is not sponsored, endorsed, sold or promoted
by DB AG, and DB AG makes no representation regarding the
advisability of investing in UDN. 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 UDN 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 UDN or
with making disclosures concerning options on UDN 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.
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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 PSQ, SH, TBT and UDN.\8\ The amount of
the execution fee for products covered by this filing shall be $0.18
per contract for all Public Customer Orders \9\ and $0.20 per contract
for all 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 transactions in
equity options.\10\ Finally, the amount of the execution fee for all
non-ISE Market Maker transactions shall be $0.45 per contract.\11\
Further, since options on PSQ, SH, TBT and UDN 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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\8\ 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).
\9\ 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.
\10\ 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.
\11\ 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,\12\ in general,
and furthers the objectives of Section 6(b)(4),\13\ 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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\12\ 15 U.S.C. 78f.
\13\ 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 \14\ and Rule 19b-4(f)(2) \15\ 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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\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 17 CFR 240.19b-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 proposal 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-2009-03 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File No. SR-ISE-2009-03. This file
number should be included on the subject line
[[Page 5706]]
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 No. SR-ISE-2009-03 and should be submitted on or before February
20, 2009.
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\16\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-2061 Filed 1-29-09; 8:45 am]
BILLING CODE 8011-01-P