12778 Federal Register / Vol. 76, No. 45 / Tuesday, March 8, 2011 / Notices 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 60536 

(August 19, 2009) [sic], 74 FR 43204 (August 26, 

2009) (SR–ISE–2009–59). 

4See Securities Exchange Act Release No. 61459 

(January 19, 2010), 75 FR 6248 (February 8, 2010) 

(SR–ISE–2010–07). 

5The Commission previously approved the 

trading of options on AUX, BPX, CDD, EUI, YUK 

and SFC. See Securities Exchange Act Release No. 

55575 (April 3, 2007), 72 FR 17963 (April 10, 2007) 

(SR–ISE–2006–59). 

6See Securities Exchange Act Release No. 63639 

(January 4, 2011), 76 FR 1488 (January 10, 2011) 

(SR–ISE–2010–121). 

7A FXPMM is a primary market maker selected 

by the Exchange that trades and quotes in FX 

Options only. See ISE Rule 2213. 

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–C2–2011–008 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–C2–2011–008. 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, 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 C2. 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–C2–2011–008 and should 

be submitted on or before March 29, 

2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–5190 Filed 3–7–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64012; File No. SR–ISE– 

2011–11] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change Relating to a Market Maker 

Incentive Plan for Foreign Currency 

Options 

March 2, 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 February 

22, 2011, the International Securities 

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

‘‘ISE’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’) 

the proposed rule change, as described 

in Items I and II below, which items 

have been prepared by the selfregulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The ISE is proposing to amend its 

incentive plan for market makers in 

foreign currency (‘‘FX’’) options. 

Specifically, ISE proposes to add six 

currently listed FX options to the 

incentive plan. 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, on the Commission’s Web 

site at http://www.sec.gov, 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 purpose of this proposed rule 

change is to amend the Exchange’s 

incentive plan for market makers in FX 

options. The Exchange currently has an 

incentive plan for FX options that was 

initially adopted on August 3, 2009 for 

the following three FX options: the New 

Zealand dollar (‘‘NZD’’), the Mexican 

peso (‘‘PZO’’), the Swedish krona 

(‘‘SKA’’).3 The Exchange subsequently 

added the Brazilian real (‘‘BRB’’) to the 

incentive plan.4 The Exchange now 

proposes to add the following FX 

options to the incentive plan: the 

Australian dollar (‘‘AUX’’), the British 

pound (‘‘BPX’’), the Canadian dollar 

(‘‘CDD’’), the euro (‘‘EUI’’), the Japanese 

yen (‘‘YUK’’) and the Swiss franc 

(‘‘SFC’’).5 Market makers will be able to 

enter into the incentive plan until 

March 31, 2011.6

Options on AUX, BPX, CDD, EUI, 

YUK and SFC began trading on the 

Exchange on April 17, 2007. Until now, 

the market maker currently appointed to 

these FX options has been trading these 

products without the benefit of the 

privileges afforded by the incentive 

plan. The Exchange notes that 

competition between exchanges that 

trade like products, in this case, the 

World Currency Options traded on 

NASDAQ OMX PHLX, Inc., [sic] has 

intensified. In order to promote the 

continued growth and trading in these 

products, the Exchange now proposes to 

add AUX, BPX, CDD, EUI, YUK and 

SFC to the incentive plan, effective 

March 1, 2011. 

Participants in the incentive plan are 

known on the Exchange’s Schedule of 

Fees as Early Adopter Market Makers. 

Under the incentive plan, the Exchange 

waives the applicable transaction fees 

for both the Early Adopter FXPMM 7


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 76, No. 45 / Tuesday, March 8, 2011 / Notices 12779 

8A FXCMM is a competitive market maker 

selected by the Exchange that trades and quotes in 

FX Options only. See ISE Rule 2213. 

9Public 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. 

10These fees are will be [sic] charged only to 

Exchange members. 

11The 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. 

12The amount of the execution fee for non-ISE 

Market Maker transactions executed in the 

Exchange’s Facilitation and Solicitation 

Mechanisms and for Orders entered into the Price 

Improvement Mechanism by the member initiating 

the price improvement order is $0.20 per contract. 

13 15 U.S.C. 78f(b). 

14 15 U.S.C. 78f(b)(4). 

15 15 U.S.C. 78s(b)(3)(A)(ii). 

and all Early Adopter FXCMMs 8 that 

make a market in AUX, BPX, CDD, EUI, 

YUK and SFC for as long as the 

incentive plan is in effect. Further, 

pursuant to a revenue sharing agreement 

entered into between an Early Adopter 

Market Maker and ISE, the Exchange 

pays the Early Adopter FXPMM forty 

percent (40%) of the transaction fees 

collected on any customer trade in 

AUX, BPX, CDD, EUI, YUK and SFC 

and pays up to ten (10) Early Adopter 

FXCMMs that participate in the 

incentive plan twenty percent (20%) of 

the transaction fees collected for trades 

between a customer and that FXCMM. 

Market makers that do not participate in 

the incentive plan are charged regular 

transaction fees for trades in these 

products. 

The Exchange currently charges an 

execution fee of $0.40 per contract for 

all Public Customer Orders 9 in options 

on AUX, BPX, CDD, EUI, YUK and 

SFC.10 The amount of the execution fee 

for all Firm Proprietary orders for 

options on AUX, BPX, CDD, EUI, YUK 

and SFC is $0.20 per contract and the 

execution fee for all non-Early Adopter 

ISE Market Makers in options on AUX, 

BPX, CDD, EUI, YUK and SFC is equal 

to the execution fee currently charged 

by the Exchange for ISE Market Maker 

orders in equity options.11 Finally, the 

amount of the execution fee for all nonISE Market Maker orders for options on 

AUX, BPX, CDD, EUI, YUK and SFC is 

$0.45 per contract.12 The Exchange does 

not charge a Payment for Order Flow fee 

for these products. 

The Exchange also proposes to waive 

transaction charges for all Early Adopter 

Market Makers in AUX, BPX, CDD, EUI, 

YUK and SFC in order to further 

encourage trading in these products. 

The Exchange believes that the revenue 

generated from customer, firm 

proprietary and non-ISE market maker 

transaction charges and increased order 

flow will offset the transaction fees that 

would otherwise be applied to market 

makers in AUX, BPX, CDD, EUI, YUK 

and SFC, thereby allowing the Exchange 

to recoup those fees while increasing 

order flow and generating increased 

revenues. 

The Exchange believes the proposed 

rule change will further the Exchange’s 

goal of promoting trading of its FX 

options through competitive pricing. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the objectives of Section 6 of the Act,13

in general, and furthers the objectives of 

Section 6(b)(4),14 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. The 

Exchange believes that extending the 

incentive plan to options on AUX, BPX, 

CDD, EUI, YUK and SFC will generate 

additional order flow in these products 

to the Exchange. 

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.15 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 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 rulecomments@sec.gov. Please include File 

No. SR–ISE-2011–11 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–2011–11. 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 changes 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 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 No. 

SR–ISE–2011–11 and should be 

submitted on or before March 29, 2011. 


srobinson on DSKHWCL6B1PROD with NOTICES
12780 Federal Register / Vol. 76, No. 45 / Tuesday, March 8, 2011 / Notices 

16 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The term ‘‘inactive nominee’’ means a natural 

person associated with and designated as such by 

a member organization and who has been approved 

for such status and is registered as such with the 

Membership Department. An inactive nominee 

shall have no rights or privileges under a permit 

unless and until said inactive nominee becomes 

admitted as a member of the Exchange pursuant to 

the By-Laws and Rules of the Exchange. An inactive 

nominee merely stands ready to exercise rights 

under a permit upon notice by the member 

organization to the Membership Department on an 

expedited basis. See Exchange Rule 1(i). 

4Pursuant to Exchange By-Law Article XII, 

Section 12–10, a member organization may 

designate an individual as an inactive nominee. To 

be eligible to be an inactive nominee an individual 

must be approved as eligible to hold a permit in 

accordance with the Exchange’s By-Laws and Rules. 

An inactive nominee has no rights and privileges 

of a permit holder until the inactive nominee 

becomes an effective permit holder and all 

applicable Exchange fees are paid. See By-Law 

Article XII, Section 12–10. 

5See Securities Exchange Act Release No. 39851 

(April 10, 1998), 63 FR 19282 (April 17, 1998) (SR– 

Phlx–97–35) (a rule change which subjected 

inactive nominees to the membership application 

process, including fees, including a fee for the 

privilege of maintaining an inactive nominee 

status). 

6See By-Law Article XII, Section 12–10. 

7An inactive nominee is also assessed the 

Application and Initiation Fees when such person 

applies to be an inactive nominee. Such fees are 

reassessed if there is a lapse in the inactive 

nominee’s membership status. However, an inactive 

nominee would not be assessed the Application and 

Initiation Fees if such inactive nominee applied for 

membership without a lapse in that individual’s 

association with a particular member organization. 

See Securities Exchange Act Release No. 63780 

(January 26, 2011), 76 FR 5846 (February 2, 2011) 

(SR–Phlx–2011–07). See also By-Law Article XII, 

Section 12–10. 

8Originally, the inactive nominee was defined in 

Exchange Rule 21, but the definition was later 

moved to the definitions section in Rule 1. 

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

10 15 U.S.C. 78f(b)(4). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–5186 Filed 3–7–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64010; File No. SR–Phlx– 

2011–26] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Inactive Nominee Fee 

March 2, 2011. 

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 February 

22, 2011, NASDAQ OMX PHLX LLC 

(‘‘Phlx’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change as described in Items I, II, 

and III, below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend its 

Fee Schedule to memorialize its Inactive 

Nominee 3 Fee. The text of the proposed 

rule change is available on the 

Exchange’s Web site at http:// 

nasdaqtrader.com/ 

micro.aspx?id=PHLXfilings, at the 

principal office of the Exchange, on the 

Commission’s Web site at http:// 

www.sec.gov, 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 

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 purpose of the proposed rule 

change is to memorialize the Inactive 

Nominee Fee in the Exchange’s Fee 

Schedule. 

The Exchange currently assesses a 

member organization an Inactive 

Nominee Fee of $500 to maintain an 

individual’s inactive nominee status for 

a six month period, as provided for in 

Exchange By-Law Article XII, Section 

12–10.4 The member organization is 

required to pay a fee for the privilege of 

maintaining the inactive nominee status 

of an individual.5 An inactive 

nominee’s status terminates after six 

months unless it has been reaffirmed in 

writing by the Member Organization or 

is terminated sooner.6 An inactive 

nominee is assessed the $500 fee every 

time the status is reaffirmed.7

The Exchange has assessed the 

Inactive Nominee Fee of $500 since the 

inception of the inactive nominee 

category.8 This fee was administered 

pursuant to By-Law Article XII, Section 

12–10, and never appeared in the 

Exchange’s Fee Schedule. In recent 

years, the Exchange has memorialized 

additional fees within the Fee Schedule 

to create a centralized location for fees. 

The Exchange desires to memorialize 

this fee in the Fee Schedule and to make 

clear which membership fees an 

Inactive Nominee Fee [sic] would be 

assessed and when an inactive nominee 

would be assessed such fees by adding 

explanatory text to the Fee Schedule. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its Fee Schedule is 

consistent with Section 6(b) of the Act 9

in general, and furthers the objectives of 

Section 6(b)(4) of the Act 10 in 

particular, in that it is an equitable 

allocation of reasonable fees and other 

charges among Exchange members and 

other persons using its facilities. 

The Exchange believes that it is 

reasonable to memorialize the Inactive 

Nominee Fee on the Exchange’s Fee 

Schedule so the fee is transparent to all 

members. While the Exchange has been 

assessing the Inactive Nominee Fee 

since 1998, the fee was administered 

pursuant to By-Law Article XII, Section 

12–10 and was not located on the Fee 

Schedule. The Exchange believes that 

placing the fee on the Fee Schedule 

would summarize all the membership 

fees in one location and clarify all the 

fees an individual is subject to for the 

privilege of maintain [sic] an inactive 

nominee status. 

The Exchange believes that it is 

equitable to place the Inactive Nominee 

Fee on the Fee Schedule because it 

uniformly impacts all inactive nominees 

as they are all subject to the Inactive 

Nominee Fee. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. 


srobinson on DSKHWCL6B1PROD with NOTICES