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###### Securities and Exchange Commission

          - [Release No. 34-55571; File No. SR-ISE-2007-21] 

                    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 26, 2007, the International Securities Exchange, LLC (“ISE” or “Exchange”) 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 substantially prepared by the ISE. The ISE has designated this proposal as one establishing or changing a due, fee, or other charge applicable only to a member under Section 19(b)(3)(A)(ii) of the Act,[3]                                          and Rule 19b-4(f)(2) thereunder,[4]                                          which renders the proposal effective upon filing with the Commission. 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 Schedule of Fees to establish fees for transactions in options on seven Premium Products.[5]                                          The text of the proposed rule change is available on the ISE's Web site (                    *http://      ( print page 17968)    www.iseoptions.com/​legal/​proposed_​rule_​changes.asp*), at the ISE, 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 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. The 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 Exchange is proposing to amend its Schedule of Fees to establish fees for transactions in options on the following seven Premium Products: iShares Dow Jones U.S. Basic Materials Sector Index Fund (“IYM”),[6]                                          iShares MSCI Germany Index Fund (“EWG”), iShares MSCI Australia Index Fund (“EWA”), iShares S&P 500 Growth Index Fund (“IVW”), iShares S&P 500 Value Index Fund (“IVE”),[7]                                          iShares KLD Select Social Index Fund (“KLD”), and iShares KLD 400 Social Index Fund (“DSI”).[8] 

                    All of the applicable fees covered by this filing are identical to fees charged by the Exchange for all other Premium Products.[9]                                          Specifically, the Exchange is proposing to adopt an execution fee and a comparison fee for all transactions in options on IYM, EWG, EWA, IVW, IVE, KLD and DSI.[10]                                          The amount of the execution fee and comparison fee for products covered by this filing shall be $0.15 and $0.03 per contract, respectively, for all Public Customer Orders [11]                                          and Firm Proprietary orders. The amount of the execution fee and comparison fee for all ISE Market Maker transactions shall be equal to the execution fee and comparison fee currently charged by the Exchange for ISE Market Maker transactions in equity options.[12]                                          Finally, the amount of the execution fee and comparison fee for all non-ISE Market Maker transactions shall be $0.16 and $0.03 per contract, respectively. Further, since options on IYM, EWG, EWA, IVW, IVE, KLD and DSI are multiply-listed, the Payment for Order Flow fee shall also apply. The Exchange believes the proposed rule change will further the Exchange's goal of introducing new products to the marketplace that are competitively priced.                 

#### 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.                 

### 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 

                    Because the foregoing rule change establishes or changes a due, fee, or other charge imposed by the Exchange, it has become effective pursuant to Section 19(b)(3)(A) of the Act [15]                                          and Rule 19b-4(f)(2) [16]                                          thereunder. At any time within 60 days of the filing of such 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.                 

## IV. Solicitation of Comments 

                    Interested persons are invited to submit written data, views, and arguments concerning the foregoing,                           ( print page 17969)                        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 rule-comments@sec.gov.                      Please include File No. SR-ISE-2007-21 on the subject line.                 

### Paper Comments:

    - Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549-1090.

                    All submissions should refer to File Number SR-ISE-2007-21. 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 inspection and copying in the Commission's Public Reference Room. 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-2007-21 and should be submitted on or before May 1,                                         2007.                

                        For the Commission, by the Division of Market Regulation, pursuant to delegated authority.17

Florence E. Harmon,

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.                             15 U.S.C. 78s(b)(3)(A)(ii).                    
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4.                             17 CFR 240.19b-4(f)(2).                    
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5.                             “Premium Products” is defined in the Schedule of Fees as the products enumerated therein.                    
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6.                             iShares® is a registered trademark of Barclays Global Investors, N.A. (“BGI”), a wholly owned subsidiary of Barclays Bank PLC. “Dow Jones,” and “Dow Jones U.S. Basic Materials Sector Index Fund” are trademarks and service marks of Dow Jones & Company, Inc. (“Dow Jones”) and have been licensed for use for certain purposes by BGI. All other trademarks and service marks are the property of their respective owners. IYM is not sponsored, endorsed, issued, sold or promoted by Dow Jones. BGI and Dow Jones have not licensed or authorized ISE to: (i) Engage in the creation, listing, provision of a market for trading, marketing, and promotion of options on IYM; or (ii) use and refer to any of their trademarks or service marks in connection with the listing, provision of a market for trading, marketing, and promotion of options on IYM or with making disclosures concerning options on IYM under any applicable federal or state laws, rules or regulations. BGI and Dow Jones do not sponsor, endorse, or promote such activity by ISE, and are not affiliated in any manner with ISE.                    
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7.                             iShares® is a registered trademark BGI, a wholly owned subsidiary of Barclays Bank PLC. “Standard & Poor's®,” “S&P®,” “S&P 500®,” are trademarks of The McGraw-Hill Companies, Inc. (“McGraw-Hill”), and have been licensed for use for certain purposes by BGI. Neither IVW nor IVE are sponsored, sold or endorsed by Standard & Poor's, (“S&P”), a division of McGraw-Hill, and S&P makes no representation regarding the advisability of investing in IVW and IVE. “MSCI Germany Index” and “MSCI Australia Index” are service marks of Morgan Stanley Capital International (“MSCI”) and have been licensed for use for certain purposes by BGI. All other trademarks and service marks are the property of their respective owners. Neither EWG nor EWA are sponsored, endorsed, issued, sold or promoted by MSCI. BGI, S&P and MSCI have not licensed or authorized ISE to: (i) engage in the creation, listing, provision of a market for trading, marketing, and promotion of options on IVW, IVE, EWG and EWA; or (ii) use and refer to any of their trademarks or service marks in connection with the listing, provision of a market for trading, marketing, and promotion of options on IVW, IVE, EWG and EWA or with making disclosures concerning options on IVW, IVE, EWG and EWA under any applicable federal or state laws, rules or regulations. BGI, S&P and MSCI do not sponsor, endorse, or promote such activity by ISE, and are not affiliated in any manner with ISE.                    
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8.                             iShares® is a registered trademark of BGI, a wholly owned subsidiary of Barclays Bank PLC. “KLD Select SocialSM                         Index” and “Domini 400 SocialSM                         Index” are service marks of KLD Research & Analytics, Inc. and have been licensed for use for certain purposes by BGI. All other trademarks and service marks are the property of their respective owners. Neither KLD nor DSI are sponsored, endorsed, issued, sold or promoted by KLD Research & Analytics, Inc. BGI and KLD Research & Analytics, Inc. have not licensed or authorized ISE to: (i) Engage in the creation, listing, provision of a market for trading, marketing, and promotion of options on KLD and DSI; or (ii) use and refer to any of their trademarks or service marks in connection with the listing, provision of a market for trading, marketing, and promotion of options on KLD and DSI or with making disclosures concerning options on KLD and DSI under any applicable federal or state laws, rules or regulations. BGI and KLD Research & Analytics, Inc. do not sponsor, endorse, or promote such activity by ISE, and are not affiliated in any manner with ISE.                    
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9.                             The Exchange represents that IYM, EWG, EWA, IVW, IVE, KLD and DSI constitute “Fund Shares,” as defined by ISE Rule 502(h).                     
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10.                             These fees will be charged only to Exchange members. Under a pilot program that is set to expire on July 31, 2007, these fees will also be charged to Linkage Orders (as defined in ISE Rule 1900).                         *See*                         Securities Exchange Act Release No. 54204 (July 25, 2006), 71 FR 43548 (August 1, 2006) (SR-ISE-2006-38).                     
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11.                             “Public 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 that is not a broker or dealer in securities.                     
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12.                             The execution fee is currently between $0.21 and $0.12 per contract side, depending on the Exchange Average Daily Volume, and the comparison fee is currently $0.03 per contract side.                     
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13.                             15 U.S.C. 78f.                     
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14.                             15 U.S.C. 78f(b)(4).                     
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15.                             15 U.S.C. 78s(b)(3)(A).                     
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16.                             17 CFR 19b-4(f)(2).                     
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17.                             17 CFR 200.30-3(a)(12).                    
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[FR Doc. E7-6672 Filed 4-9-07; 8:45 am]

BILLING CODE 8010-01-P