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###### Securities and Exchange Commission

          - [Release No. 34-64202; File No. SR-ISE-2011-16] 

                    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 March 31, 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 self-regulatory 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 extend an incentive plan for market makers in a number of foreign currency options (“FX Options”) traded on the Exchange. 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 extend an incentive plan for market makers in options on the New Zealand dollar (“NZD”), the Mexican peso (“PZO”), the Swedish krona (“SKA”), the Brazilian real (“BRB”), the Australian dollar (“AUX”), the British pound (“BPX”), the Canadian dollar (“CDD”), the euro (“EUI”), the Japanese yen (“YUK”) and the Swiss franc (“SFC”).[3]                                          On August 3, 2009, the Exchange adopted an incentive plan applicable to market makers in NZD, PZO and SKA,[4]                                          and on January 19, 2010, added BRB to the incentive plan,[5]                                          and on March 1, 2011, added AUX, BPX, CDD, EUI, YUK and SFC.[6]                                          The Exchange has since extended the date                           ( print page 20432)                        by which market makers may join the incentive plan [7]                                          and now proposes to do so again.                 

                    In order to promote trading in these FX Options, the Exchange has an incentive plan pursuant to which the Exchange waives the transaction fees for the Early Adopter [8]                                          FXPMM [9]                                          and all Early Adopter FXCMMs [10]                                          that make a market in NZD, PZO SKA, BRB, 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 NZD, PZO SKA, BRB, 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. In order to participate in the incentive plan, market makers are currently required to enter into the incentive plan no later than March 31, 2011. The Exchange now proposes to extend the date by which market makers may enter into the incentive plan to June 30, 2011.                 

                    Additionally, the Exchange proposes to correct an inadvertent deletion in a recent filing. Specifically, in the filing where the Exchange added AUX, BPX, CDD, EUI, YUK and SFC to the incentive plan,[11]                                          the Exchange inadvertently failed to add these additional FX options symbols to the Notes for fees applicable ISE Market Maker on pages 3-4 of the Exchange's Schedule of Fees.                 

Finally, the Exchange proposes to make a clarifying change to the Customer fee noted on page 2 on the Exchange's Schedule of Fees to note that the $0.18 per contract Customer fee as it relates to FX Options is applicable to those FX Options that are not part of the incentive plan. For FX Options that are part of the incentive plan, the Customer fee is $0.40 per contract, as noted on page 1 of the Exchange's current Schedule of Fees. 

#### 2. Statutory 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.                 

The Exchange believes the proposed rule change is equitable as it will permit all market makers to explore the opportunity to join the incentive plan for an additional three months. The Exchange believes the proposed rule change is reasonable because the extension of the incentive plan for three months will permit additional market makers to join the incentive plan which in turn will generate additional order flow to the Exchange by creating incentives to trade these FX Options as well as defray operational costs for Early Adopter Market Makers. 

### 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.[14]                                          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 rule-comments@sec.gov.                      Please include File No. SR-ISE-2011-16 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-2011-16. 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 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.                           ( print page 20433)                        SR-ISE-2011-16 and should be submitted on or before May 3, 2011.                 

                        For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.[15] 

Cathy H. Ahn, 

Deputy Secretary.

# Footnotes

1.                             15 U.S.C. 78s(b)(1).                    
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2.                             17 CFR 240.19b-4.                    
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3.                             The Commission previously approved the trading of options on NZD, PZO, SKA, BRB, 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).                    
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4.                                                     *See*                         Securities Exchange Act Release No. 60536 (August 19, 2009), 74 FR 43204 (August 26, 2009) (SR-ISE-2009-59).                    
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5.                                                     *See*                         Securities Exchange Act Release No. 61459 (February 1, 2010), 75 FR 6248 (February 8, 2010) (SR-ISE-2010-07).                    
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6.                                                     *See*                         Securities Exchange Act Release No. 64012 (March 2, 2011), 76 FR 12778 (March 8, 2011) (SR-ISE-2011-11).                    
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7.                                                     *See*                         Securities Exchange Act Release Nos. 60810 (October 9, 2009), 74 FR 53527 (October 19, 2009) (SR-ISE-2009-80), 61334 (January 12, 2010), 75 FR 2913 (January 19, 2010) (SR-ISE-2009-115), 61851 (April 6, 2010), 75 FR 18565 (April 12, 2010) (SR-ISE-2010-27), 62503 (July 15, 2010), 75 FR 42812 (July 22, 2010) (SR-ISE-2010-71), 36045 (October 5, 2010), 75 FR 62900 (October 13, 2010) (SR-ISE-2010-100) and 63639 (January 4, 2011), 76 FR 1488 (January 10, 2011) (SR-ISE-2010-121).                    
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8.                             Participants in the incentive plan are known on the Exchange's Schedule of Fees as Early Adopter Market Makers.                    
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9.                             A FXPMM is a primary market maker selected by the Exchange that trades and quotes in FX Options only.                         *See*                         ISE Rule 2213.                    
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10.                             A FXCMM is a competitive market maker selected by the Exchange that trades and quotes in FX Options only.                         *See*                         ISE Rule 2213.                    
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11.                                                     *See supra*                         note 6.                    
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12.                             15 U.S.C. 78f(b).                    
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13.                             15 U.S.C. 78f(b)(4).                    
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14.                             15 U.S.C. 78s(b)(3)(A)(ii).                    
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15.                                 17 CFR 200.30-3(a)(12).                        
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[FR Doc. 2011-8683 Filed 4-11-11; 8:45 am] 

BILLING CODE 8011-01-P