51898 Federal Register / Vol. 74, No. 194 / Thursday, October 8, 2009 / Notices 

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

2 17 CFR 240.19b–4. 

3References to ISE Members in this filing refer to 

DECN Subscribers who are ISE Members. 

4 In SR–ISE–2009–68, the Exchange also adopted 

additional fees and rebates and associated flags. 

First, the Exchange added new fee categories for the 

INET order type. When a member routes to Nasdaq 

using the INET order type and removes liquidity on 

Tapes A or C, the member incurs a fee of $0.0030 

on either EDGA or EDGX. Such situation yields new 

Flag ‘‘L’’. The INET order type sweeps the EDGA 

or EDGX book, and routes the remainder to Nasdaq. 

If the order is marketable, it will remove liquidity 

from the EDGA or EDGX book, as applicable, first. 

If the order is non-marketable, the order will post 

on Nasdaq. With regards to a Member’s use of the 

INET order type for Tapes A or C securities, 

Members routing an average daily volume (‘‘ADV’’): 

(i) Less than 5,000,000 shares are charged $0.0030 

per share, as described in the schedule; (ii) equal 

to or greater than 5,000,000 shares but less than 

20,000,000 shares are charged $0.0027 per share; 

(iii) equal to or greater than 20,000,000 shares but 

less than 30,000,001 shares are charged $0.0026 per 

share; and (iv) equal to or greater than 30,000,001 

shares are charged $0.0025 per share. The rates, in 

all cases, are calculated for shares removed from 

Nasdaq. The Exchange believes that these tier-based 

rates incent Members to sweep the EDGA or EDGX 

book first and then offer a discounted rate to 

Nasdaq’s rates if the remainder of the order is 

routed to Nasdaq. These discounted rates arise in 

part from reduced administrative costs associated 

with certain volume levels. 

Similarly, the Exchange also added an additional 

fee category for the INET order type when a member 

routes to Nasdaq using the INET order type and 

removes liquidity on Tape B. Such situation yields 

new flag ‘‘2’’. With regards to a Member’s use of the 

INET order type for Tape B securities, Members 

routing an ADV: (i) Less than 20,000,000 shares are 

charged $0.0030 per share, as described in the 

schedule; (ii) equal to or greater than 20,000,000 but 

less than 30,000,001 shares are charged $0.0029 per 

share; and (iii) equal to or greater than 30,000,001 

shares are charged $0.0028 per share. 

Furthermore, the Exchange adopted a new rebate. 

Members receive a rebate of $0.0032 per share for 

all liquidity posted on EDGX if they add or route 

at least 10,000,000 shares of ADV to EDGX prior to 

9:30 a.m. EST or after 4 p.m. EST (includes all flags 

except N and W) and add a minimum of 75,000,000 

shares of ADV on EDGX in total, including during 

both market hours and pre and post-trading hours. 

This rebate is designed to reward members who add 

or route significant order flow to EDGX both during 

market hours and pre and post-trading hours. It is 

also designed to increase the liquidity of the pre 

and post markets. 

5 In SR–ISE–2009–68, the Exchange amended the 

criteria for meeting the Ultra Tier by allowing ISE 

Members to receive a $0.0032 rebate per share for 

securities priced at or above $1.00 when ISE 

Members add liquidity on EDGX if the attributed 

MPID posts 1% of the Total Consolidated Volume 

(‘‘TCV’’) in ADV. TCV is defined as volume 

reported by all exchanges and trade reporting 

facilities to the consolidated transaction reporting 

plans for Tape A, B, and C securities. The Ultra Tier 

rebate ($0.0032 per share), which is a higher rebate 

than the Super Tier ($0.0030 per share), is also 

more difficult to reach than the Super Tier rebate, 

as a higher volume threshold is required based on 

recent TCV figures. For example, 1% of the average 

TCV for July 2009 (8.8 billion) was approximately 

88 million shares. This threshold far exceeds the 

criteria to meet the Super Tier rebate. In addition, 

the higher rebate also results in part from lower 

administrative costs associated with higher volume. 

Previously, ISE Members were provided a 

$0.0032 rebate per share for securities priced at or 

above $1.00 when ISE Members added liquidity on 

EDGX if the attributed MPID satisfied one of the 

following criteria on a daily basis, measured 

monthly: (i) Adding 100,000,000 shares or more on 

EDGX; or (ii) adding 50,000,000 shares or more of 

liquidity to EDGX, so long as added liquidity on 

EDGX is at least 20,000,000 shares greater than the 

previous calendar month. In SR–ISE–2009–68, the 

Exchange also deleted the Full Sweep Tier, which 

provided a $0.0035 rebate per share for liquidity 

added on EDGX if the attributed MPID added 

50,000,000 shares or more on a daily basis, 

measured monthly, by using the ROUT routing 

strategy. 

6 In SR–ISE–2009–68, the Exchange also amended 

the descriptions of the ‘‘N’’ and ‘‘W’’ flags to 

display which Tape liquidity is removed from. For 

the ‘‘N’’ flag, the Exchange amended the description 

to state that liquidity is removed from Tapes B & 

C. For the ‘‘W’’ flag, the Exchange amended the 

description to state that liquidity is removed from 

Tape A. 

7 In SR–ISE–2009–68, the Exchange amended its 

fee schedule to pass through to ISE members the 

actual transaction fees assessed by away markets. 

Specifically, the Exchange amended its fees 

schedule to reflect Nasdaq’s reduction in rebate 

from 0.0006 to 0.0001 for removing liquidity from 

Nasdaq OMX BX. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60770; File No. SR–ISE– 

2009–69] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Order 

Granting Accelerated Approval to a 

Proposed Rule Change Relating to the 

Amounts That Direct Edge ECN, in Its 

Capacity as an Introducing Broker for 

Non-ISE Members, Passes Through to 

Such Non-ISE Members 

October 2, 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 

September 30, 2009, 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 ISE. The Commission is publishing 

this notice to solicit comments on the 

proposed rule change from interested 

persons, and is approving the proposal 

on an accelerated basis. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to modify the 

amounts that Direct Edge ECN 

(‘‘DECN’’), in its capacity as an 

introducing broker for non-ISE 

Members, passes through to such nonISE Members. 

The text of the proposed rule change 

is available on the Exchange’s Internet 

Web site at http://www.ise.com. 

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 III 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 

DECN, a facility of ISE, operates two 

trading platforms, EDGX and EDGA. On 

September 30, 2009, the ISE filed for 

immediate effectiveness a proposed rule 

change to: (i) Amend DECN’s fee 

schedule for ISE Members 3 to adopt 

new fees and rebates and associated 

flags; 4 (ii) amend the criteria for 

meeting the Ultra Tier; 5 (iii) to amend 

the descriptions of certain flags in the 

schedule; 6 and (iv) to amend its fee 

schedule to reflect pass through charges 

of other market centers.7 The fee 

changes made pursuant to SR–ISE– 

2009–68 became operative on October 1, 

2009. 

In its capacity as a member of ISE, 

DECN currently serves as an introducing 

broker for the non-ISE Member 

subscribers of DECN to access EDGX 

and EDGA. DECN, as an ISE Member 

and introducing broker, receives rebates 

and is assessed charges from DECN for 

transactions it executes on EDGX or 

EDGA in its capacity as introducing 

broker for non-ISE Members. Since the 

amounts of such rebates and charges 

were changed pursuant to SR–ISE– 

2009–68, DECN wishes to make 

corresponding changes to the amounts it 

passes through to non-ISE Member 

subscribers of DECN for which it acts as 

introducing broker. As a result, the per 

share amounts that non-ISE Member 

subscribers receive and are charged will 

be the same as the amounts that ISE 

Members receive and are charged. 

ISE is seeking accelerated approval of 

this proposed rule change, as well a 

retroactive effective date of October 1, 

2009. ISE represents that this proposal 

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Federal Register / Vol. 74, No. 194 / Thursday, October 8, 2009 / Notices 51899 

8 15 U.S.C. 78f. 

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

10 In approving this proposal, the Commission has 

considered its impact on efficiency, competition, 

and capital formation. 15 U.S.C. 78c(f). 

11 15 U.S.C. 78f(b)(4). 

12See File No. SR–ISE–2009–68 (the ‘‘Member 

Fee Filing’’). 

13 Id. 

14 15 U.S.C. 78s(b)(2). 

15 17 CFR 200.30–3(a)(12). 

will ensure that both ISE Members and 

non-ISE Members (by virtue of the passthrough described above) will in effect 

receive and be charged equivalent 

amounts and that the imposition of such 

amounts will begin on the same October 

1, 2009 start date. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the objectives of Section 6 of the Act,8

in general, and furthers the objectives of 

Section 6(b)(4),9 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. In 

particular, this proposal will ensure that 

dues, fees and other charges imposed on 

ISE Members are equitably allocated to 

both ISE Members and non-ISE 

Members (by virtue of the pass-through 

described above). 

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. 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 

No. SR–ISE–2009–69 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–2009–69. 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 Commissions 

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 

Number SR–ISE–2009–69 and should be 

submitted on or before October 29, 

2009. 

IV. Commission’s Findings and Order 

Granting Accelerated Approval of 

Proposed Rule Change 

The Commission finds that the 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to a national securities 

exchange.10 Specifically, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(4) 11 of the Act, which requires that 

the rules of a national securities 

exchange provide for the equitable 

allocation of reasonable dues, fees, and 

other charges among members and 

issuers and other persons using its 

facilities. 

As described more fully above, ISE 

recently amended DECN’s fee schedule 

for ISE Members to, among other things, 

amend the criteria for meeting the Ultra 

Tier rebate, delete the Full Sweep Tier, 

adopt fees in connection with the use of 

INET routing strategies, and to adopt a 

new rebate for liquidity posted on EDGX 

during pre and post hours trading.12 The 

fee changes made pursuant to the 

Member Fee Filing became operative on 

October 1, 2009. DECN receives rebates 

and is charged fees for transactions it 

executes on EGDX or EDGA in its 

capacity as an introducing broker for its 

non-ISE member subscribers. 

The current proposal, which will 

apply retroactively to October 1, 2009, 

will allow DECN to pass through the 

revised rebates and fees to the non-ISE 

member subscribers for which it acts an 

introducing broker. The Commission 

finds that the proposal is consistent 

with the Act because it will provide 

rebates and charge fees to non-ISE 

member subscribers that are equivalent 

to those established for ISE member 

subscribers in the Member Fee Filing.13

ISE has requested that the 

Commission find good cause for 

approving the proposed rule change 

prior to the thirtieth day after 

publication of notice of filing thereof in 

the Federal Register. As discussed 

above, the proposal will allow DECN to 

pass through to non-ISE member 

subscribers the revised rebate and fees 

established for ISE member subscribers 

in the Member Fee Filing, resulting in 

equivalent rebates and fees for ISE 

member and non-member subscribers. 

In addition, because the proposal will 

apply the revised rebates and fees 

retroactively to October 1, 2009, the 

revised rebates and fees will have the 

same effective date, thereby promoting 

consistency in the DECN’s fee schedule. 

Accordingly, the Commission finds 

good cause, pursuant to Section 19(b)(2) 

of the Act, for approving the proposed 

rule change prior to the thirtieth day 

after the date of publication of notice of 

filing thereof in the Federal Register. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,14 that the 

proposed rule change (SR–ISE–2009–69) 

be, and hereby is, approved on an 

accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–24264 Filed 10–7–09; 8:45 am] 

BILLING CODE 8011–01–P 

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