[Federal Register Volume 69, Number 24 (Thursday, February 5, 2004)]
[Notices]
[Pages 5629-5630]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-2337]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49147; File No. SR-ISE-2003-32]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto by 
the International Securities Exchange, Inc. Relating to a Fee Reduction 
and Fee Cap

January 29, 2004.
    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 November 20, 2003, the International Securities Exchange, Inc. 
(``Exchange'' or ``ISE'') filed with the Securities and Exchange 
Commission (``Commission'') the proposed rule change as described in 
Items I, II, and III below, which Items have been prepared by the ISE. 
On January 2, 2004, the ISE filed Amendment No. 1 to the proposed rule 
change.\3\ The Commission is publishing this notice to solicit comments 
on the proposed rule change, as amended, from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See letter from Michael Simon, Senior Vice President and 
General Counsel, ISE, to Nancy Sanow, Assistant Director, Division 
of Market Regulation, Commission, dated January 2, 2004 (``Amendment 
No. 1''). Amendment No. 1 replaces the original proposal in its 
entirety.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    ISE is proposing, on a pilot basis from December 1, 2003 through 
May 31, 2004, a reduction in and a cap on execution fees, and a cap on 
comparison fees for options on the Nasdaq 100 Index Tracking Stock\sm\ 
(``QQQ'').

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 ISE 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. ISE 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 ISE is proposing to amend its Schedule of Fees to impose, on a 
pilot basis through May 31, 2004, both a reduction in and a cap on 
execution fees, and a cap on comparison fees for QQQ options. 
Specifically, any member with monthly average daily trading volume 
(``ADV'') of 8,000 contracts in QQQ options would receive a $.10 
discount from the standard execution fees (excluding surcharge fees) 
for contracts traded above that amount, up to ADV of 10,000 contracts. 
For contracts in QQQ options traded in excess of 10,000 ADV for a 
month, the Exchange will waive all execution fees (excluding surcharge 
fees) and comparison fees. Current ISE execution fees (excluding 
surcharge fees) range from $.21 to $.12 a contract, depending on the 
exchange's trading volume; the comparison fee is $.03 a contract. The 
proposed fee changes are intended to increase the Exchange's 
competitiveness in trading the QQQ options.
2. Basis
    The ISE believes that the proposal is consistent with section 6(b) 
of the Act,\4\ and in particular, with the requirements of section 
6(b)(4) of the Act,\5\ in that it provides for the equitable allocation 
of reasonable dues, fees and other charges among its members and other 
persons using its facilities.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The ISE does not believe that the proposed rule change will impose 
any inappropriate burden on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    The ISE has neither solicited nor received written comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing proposed rule change has become effective pursuant to 
section 19(b)(3)(A)(ii) of the Act \6\ and Rule 19b-4(f)(2)\7\ 
thereunder, in that it establishes or changes a due, fee, or other 
charge imposed by the self-regulatory organization, which renders the 
proposal effective upon filing. At any time within 60 days of the 
filing of Amendment No. 1 to the 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.\8\
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    \6\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \7\ 17 CFR 19b-4(f)(2).
    \8\ For purposes of calculating the sixty-day abrogation period, 
the Commission considers the abrogation period to have begun on 
January 2, 2004, the date on which the Commission received Amendment 
No. 1.
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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, as 
amended, is consistent with the Act. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. 
Comments may also be submitted electronically at the following e-mail 
address: <a href="/cdn-cgi/l/email-protection#740601181159171b1919111a0007340711175a131b02"><span class="__cf_email__" data-cfemail="4a383f262f67292527272f243e390a392f29642d253c">[email protected]</span></a>. All comment letters should refer to 
File No. SR-ISE-2003-32. 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, comments should be sent in hard 
copy or by e-mail but not by both methods. 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. Copies of such filing will also be available for 
inspection and copying at the principal office of ISE. All submissions 
should refer to file number SR-ISE-2003-32 and should be submitted by 
February 26, 2004.


[[Page 5630]]


    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 04-2337 Filed 2-4-04; 8:45 am]
BILLING CODE 8010-01-P


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