2170 Federal Register / Vol. 76, No. 8 / Wednesday, January 12, 2011 / Notices 

8The text of the proposed rule change is available 

on Exchange’s Web site at http:// 

www.directedge.com, on the Commission’s Web site 

at http://www.sec.gov, at EDGX, and at the 

Commission’s Public Reference Room. 

9 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3Options classes subject to maker/taker fees are 

identified by their ticker symbol on the Exchange’s 

Schedule of Fees. See Securities Exchange Act 

Release Nos. 61869 (April 7, 2010), 75 FR 19449 

(April 14, 2010) (SR–ISE–2010–25), 62048 (May 6, 

2010), 75 FR 26830 (May 12, 2010) (SR–ISE–2010– 

43), 62282 (June 11, 2010), 75 FR 34499 (June 17, 

2010) (SR–ISE–2010–54), 62319 (June 17, 2010), 75 

FR 36134 (June 24, 2010) (SR–ISE–2010–57), 62508 

(July 15, 2010), 75 FR 42809 (July 22, 2010) (SR– 

ISE–2010–65), 62507 (July 15, 2010), 75 FR 42802 

(July 22, 2010) (SR–ISE–2010–68), 62665 (August 9, 

2010), 75 FR 50015 (August 16, 2010) (SR–ISE– 

2010–82), 62805 (August 31, 2010), 75 FR 54682 

(September 8, 2010) (SR–ISE–2010–90), 63283 

(November 9, 2010), 75 FR 70059 (November 16, 

2010) (SR–ISE–2010–106) and 63534 (December 13, 

2010), 75 FR 79433 (December 20, 2010) (SR–ISE– 

2010–114). 

4A Market Maker Plus is a market maker who is 

on the National Best Bid or National Best Offer 80% 

of the time for series trading between $0.03 and 

$5.00 (for options whose underlying stock’s 

previous trading day’s last sale price was less than 

or equal to $100) and between $0.10 and $5.00 (for 

options whose underlying stock’s previous trading 

day’s last sale price was greater than $100) in 

premium in each of the front two expiration months 

and 80% of the time for series trading between 

$0.03 and $5.00 (for options whose underlying 

stock’s previous trading day’s last sale price was 

less than or equal to $100) and between $0.10 and 

$5.00 (for options whose underlying stock’s 

previous trading day’s last sale price was greater 

than $100) in premium across all expiration months 

in order to receive the rebate. The Exchange 

determines whether a market maker qualifies as a 

Market Maker Plus at the end of each month by 

looking back at each market maker’s quoting 

statistics during that month. If at the end of the 

month, a market maker meets the Exchange’s stated 

criteria, the Exchange rebates $0.10 per contract for 

transactions executed by that market maker during 

that month. The Exchange provides market makers 

a report on a daily basis with quoting statistics so 

that market makers can determine whether or not 

they are meeting the Exchange’s stated criteria. 

5A Customer (Professional) is a person who is not 

a broker/dealer and is not a Priority Customer. 

6A Non-ISE Market Maker, or Far Away Market 

Maker (‘‘FARMM’’), is a market maker as defined in 

Section 3(a)(38) of the Securities Exchange Act of 

1934, as amended (‘‘Exchange Act’’), registered in 

the same options class on another options 

exchange. 

7A Priority Customer is defined in ISE Rule 

100(a)(37A) as a person or entity that is not a 

broker/dealer in securities, and does not place more 

than 390 orders in listed options per day on average 

during a calendar month for its own beneficial 

account(s). 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission,8 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 Web site viewing and 

printing 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 also 

will be available for inspection and 

copying at the principal office of the 

Exchange. 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–EDGX– 

2010–25 and should be submitted on or 

before February 2, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2011–430 Filed 1–11–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63664; File No. SR–ISE– 

2010–120] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change, as Modified by Amendment 

No. 1, Relating to Fees and Rebates for 

Adding and Removing Liquidity 

January 6, 2011. 

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 December 

23, 2010, the International Securities 

Exchange, LLC (the ‘‘Exchange’’ or the 

‘‘ISE’’) filed with the Securities and 

Exchange Commission the proposed 

rule change, and on January 5, 2011, 

filed Amendment No. 1 to the proposed 

rule change, as described in Items I and 

II 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, 

as amended, from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

The ISE is proposing to amend its 

transaction fees and rebates for adding 

and removing liquidity. 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. 

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 currently assesses a per 

contract transaction charge to market 

participants that add or remove 

liquidity from the Exchange (‘‘maker/ 

taker fees’’) in 100 options classes (the 

‘‘Select Symbols’’).3 The Exchange 

currently charges a take fee of: (i) $0.25 

per contract for Market Maker, Market 

Maker Plus,4 Firm Proprietary and 

Customer (Professional) 5 orders; (ii) 

$0.35 per contract for Non-ISE Market 

Maker 6 orders; (iii) $0.20 per contract 

for Priority Customer 7 orders for 100 or 

more contracts. Priority Customer orders 

for less than 100 contracts are not 

assessed a fee for removing liquidity. 

The Exchange now proposes to increase 

the take fee for Firm Proprietary and 

Customer (Professional) orders from 

$0.25 per contract to $0.28 per contract. 

Additionally, in the interest of 

standardizing the take fee charged for 

Priority Customer orders, the Exchange 

proposes to lower the take fee for 

Priority Customer orders of 100 or more 

contracts from $0.20 per contract to 

$0.12 per contract while increasing the 

take fee for Priority Customer orders of 

less than 100 contracts from $0.00 per 

contract to $0.12 per contract. As a 

result, all Priority Customer orders, 

regardless of size, will be assessed a take 

fee of $0.12 per contract. 

For Complex Orders, the Exchange 

currently charges a take fee of: (i) $0.27 

per contract for Market Maker, Market 

Maker Plus, Firm Proprietary and 

Customer (Professional) orders; and (ii) 

$0.35 per contract for Non-ISE Market 

Maker orders. Priority Customer orders, 

regardless of size, are not assessed a fee 

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Federal Register / Vol. 76, No. 8 / Wednesday, January 12, 2011 / Notices 2171 

8 15 U.S.C. 78f(b). 

9 15 U.S.C. 78f(b)(4). 

10See PHLX Fee Schedule at http:// 

www.nasdaqtrader.com/content/marketregulation/ 

membership/phlx/feesched.pdf. 11 15 U.S.C. 78s(b)(3)(A)(ii). 12 17 CFR 200.30–3(a)(12). 

for removing liquidity from the 

Complex Order book. The Exchange 

now proposes to increase the take fee for 

Firm Proprietary and Customer 

(Professional) complex orders from 

$0.27 per contract to $0.28 per contract. 

The Exchange is not proposing any 

change to the take fee for Market Maker, 

Market Maker Plus, and Priority 

Customer complex orders. 

The Exchange has designated this 

proposal to be operative on January 3, 

2011. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its Schedule of Fees 

is consistent with Section 6(b) of the 

Act 8 in general, and furthers the 

objectives of Section 6(b)(4) of the Act 9

in particular, in that it is an equitable 

allocation of reasonable dues, fees and 

other charges among Exchange 

members. The impact of the proposal 

upon the net fees paid by a particular 

market participant will depend on a 

number of variables, most important of 

which will be its propensity to add or 

remove liquidity in options overlying 

the Select Symbols. The Exchange 

believes that its proposal to assess a 

$0.12 per contract take fee for all 

Priority Customer orders is reasonable 

as it will standardize the fee charged by 

the Exchange for this category of market 

participants. The Exchange also believes 

that its proposal to assess a $0.28 per 

contract take fee for Firm Proprietary 

and Customer (Professional) regular and 

complex orders in the Select Symbols is 

also reasonable because the fee is within 

the range of fees assessed by other 

exchanges employing similar pricing 

schemes. For example, the proposed 

fees assessed to Firm Proprietary and 

Customer (Professional) orders are 

comparable to rates assessed by 

NASDAQ OMX PHLX, Inc. (‘‘PHLX’’). 

PHLX currently assesses a take fee of 

$0.45 for Firm and Broker-Dealer orders 

and $0.40 for Professional orders in its 

regular order book. PHLX also currently 

assesses a take fee of $0.27 for Firm and 

Professional orders and $0.35 for 

Broker-Dealer orders in its complex 

order book.10

The Exchange believes that the price 

differentiation between the various 

market participants is justified because 

market makers have obligations to the 

market that the other market 

participants, such as Firm Proprietary 

and Customer (Professional), do not. 

The Exchange believes that it is 

equitable to assess a nominally higher 

fee for Firm Proprietary and Customer 

(Professional) orders that do not have 

the quoting requirements that Exchange 

market makers do. Moreover, the 

Exchange believes that the proposed 

fees are fair, equitable and not unfairly 

discriminatory because the proposed 

fees are consistent with price 

differentiation that exists today at other 

option exchanges. The Exchange 

believes that the proposed fees are fair, 

equitable and not unfairly 

discriminatory for the reasons stated 

above. 

The Exchange operates in a highly 

competitive market in which market 

participants can readily direct order 

flow to another exchange if they deem 

fee levels at a particular exchange to be 

excessive. 

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)(A)(ii) of the Act.11 At any time 

within 60 days of the filing of such 

proposed rule change, the Commission 

summarily may temporarily suspend 

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. If the Commission 

takes such action, the Commission shall 

institute proceedings to determine 

whether the proposed rule should be 

approved or disapproved. 

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 rulecomments@sec.gov. Please include File 

Number SR–ISE–2010–120 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 

Number SR–ISE–2010–120. 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 Web site viewing and 

printing in the Commission’s Public 

Reference Room 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 offices of the Exchange. 

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–2010–120, and should 

be submitted on or before February 2, 

2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2011–477 Filed 1–11–11; 8:45 am] 

BILLING CODE 8011–01–P 

mstockstill on DSKH9S0YB1PROD with NOTICES