27156 Federal Register / Vol. 72, No. 92 / Monday, May 14, 2007 / Notices 

6See Securities Exchange Act Release No. 55162 

(January 24, 2007), 72 FR 4738 (February 1, 2007) 

(SR–Amex–2006–106). 

7 In addition, Amendment No. 4 makes nonsubstantive rule text changes and shows the text of 

the final proposal as marked against the current text 

of Amex Rule 950–ANTE(d). 

8 15 U.S.C. 78f(b). 

9 15 U.S.C. 78f(b)(5). 10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

program.6 In Amendment No. 4, the 

Exchange proposes to allow the 

proposed at-risk crossing procedure to 

apply to options classes that are part of 

the options penny pilot program.7

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6 of the Act 8 in general and 

furthers the objectives of Section 

6(b)(5) 9 in particular in that it is 

designed to perfect the mechanisms of 

a free and open market and the national 

market system, protect investors and the 

public interest, to foster cooperation and 

coordination with persons engaged in 

facilitating transactions in securities and 

promote just and equitable principles of 

trade. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The proposed rule change will impose 

no 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 

No written comments were solicited 

or received by the Exchange on this 

proposal. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 35 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the Exchange consents, 

the Commission will: 

(A) By order approve such proposed 

rule change, or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. 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 

Number SR–Amex–2006–17 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–Amex–2006–17. 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 the filing also will be 

available for inspection and copying at 

the principal office of the Exchange. 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–Amex–2006–17 and should 

be submitted on or before May 29, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.10

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–9176 Filed 5–11–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55724; File No. SR–CBOE–

2007–39] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing of 

Proposed Rule Change Regarding 

Penny Price Improvement 

May 8, 2007. 

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 April 24, 

2007, the Chicago Board Options 

Exchange, Incorporated (‘‘CBOE’’ 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 CBOE. 

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 CBOE proposes to amend its 

Rules regarding penny price 

improvement for options not currently 

quoted in one-cent increments. The text 

of the proposed rule change is set forth 

below. Proposed new language is 

italicized; and proposed deletions are 

[bracketed]. 

* * * * * 

Rule 6.13B. Penny Price Improvement 

The Exchange may designate one or 

more options trading on the Hybrid 

System for inclusion in the Penny Price 

Improvement Program. Under this 

program, the Exchange will allow all 

users to provide price improvement 

beyond the Exchange’s disseminated 

quotation (‘‘Penny Pricing’’) for classes 

or series that are not already quoted in 

one-cent increments and for which the 

Simple Auction Liaison system in Rule 

6.13A is not in effect. 

(a) Electronic Penny Pricing. 

Electronic penny prices may be 

established as follows: 

(1) Market-Makers. Market-Makers 

may electronically provide the Exchange 

with indications of interest that are 

superior to their own quotations in 

increments no smaller than one-cent. 

Such indications shall be firm for all 

interest received by the Exchange. The 

Exchange shall disseminate such 


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Federal Register / Vol. 72, No. 92 / Monday, May 14, 2007 / Notices 27157 

interest using standard quoting 

increments by rounding the limit price 

to the nearest standard quoting 

increment that does not violate the limit 

price. 

(2) Orders. Public Customers and all 

other users may electronically submit to 

the Exchange orders priced in one-cent 

increments. The Exchange shall 

disseminate such orders using standard 

quoting increments by rounding the 

limit price to the nearest standard 

quoting increment that does not violate 

the limit price. 

All Penny Pricing submitted pursuant 

to (1) or (2) above shall be filed by the 

System for order allocation purposes but 

shall not be visible. The Exchange may 

append an indicator to its disseminated 

quotation to indicate the existence of 

Penny Pricing in the relevant side of a 

series when it exists, but no information 

regarding the price and size of the 

Penny Pricing shall be made available. 

If an order is received by the Hybrid 

System that could trade against Penny 

Pricing and where the Exchange’s 

disseminated quotation is the NBBO, it 

will automatically execute against the 

Penny Pricing pursuant to the 

Exchange’s normal allocation 

procedures. 

(b) Open Outcry Penny Pricing. Oral 

bids (offers) provided by in-crowd 

market participants may be expressed in 

one-cent increments in response to an 

order represented in open outcry 

provided that: (1) The oral bids (offers) 

better the corresponding bid (offer) in 

the Exchange’s disseminated quotation; 

and (2) any resulting transaction(s) is 

consistent with the requirements of Rule 

6.83. 

The appropriate Procedure 

Committee may also determine on a 

class-by-class basis to make the splitprice priority provisions of Rule 6.47 

applicable to a class that is subject to 

Penny Pricing under this rule. 

For purposes of this rule, ‘‘in-crowd 

market participants’’ includes in-crowd 

Market-Makers, an in-crowd DPM or 

LMM, and Floor Brokers or PAR 

Officials representing orders in the 

trading crowd. 

(c) Prior to effecting any transactions 

in open outcry in one-cent increments, 

Exchange members must electronically 

‘‘sweep’’ any Penny Pricing interest in 

the Hybrid System so as not to violate 

the priority of such Penny Pricing. 

(d) All pronouncements regarding the 

applicability of this rule will be 

announced to the membership via 

Regulator Circular. 

* * * * * 

Rule 6.45 Priority of Bids and Offers—

Allocation of Trades 

Except as provided by Rules, 

including but not limited to Rule 6.2A, 

6.8, 6.9, 6.13, 6.13B, 6.45A, [Rule] 6.47, 

[Rule] 6.74, [Rule] 8.87 and [CBOE] 

Exchange Regulatory Circulars 

approved by the [SEC] Commission 

concerning Participation Entitlements 

[Rights], the following rules of priority 

shall be observed with respect to bids 

and offers: 

(a)–(e) No change. 

* * * Interpretations and Policies: 

.01–.02 No change. 

* * * * * 

Rule 6.45A Priority and Allocation of 

Equity Option Trades on the CBOE 

Hybrid System 

6.45A Generally: No change. 

(a)–(e) No change. 

* * * Interpretations and Policies: 

.01 Principal Transactions: Order 

entry firms may not execute as principal 

against orders they represent as agent 

unless: (i) Agency orders are first 

exposed on the Hybrid System for at 

least three (3) seconds, (ii) the order 

entry firm has been bidding or offering 

for at least (3) seconds prior to receiving 

an agency order that is executable 

against such bid or offer, or (iii) the 

order entry firm proceeds in accordance 

with the crossing rules contained in 

Rule 6.74. This paragraph also shall 

apply to orders resting on the Hybrid 

System in penny increments pursuant to 

Rule 6.13B. In such cases, agency orders 

priced in penny increments are deemed 

‘‘exposed’’ pursuant to (i) above, and 

order entry firm orders priced in penny 

increments are deemed bids or offers 

pursuant to (ii) above. 

.02 Solicitation Orders. Order entry 

firms must expose orders they represent 

as agent for at least three (3) seconds 

before such orders may be executed 

electronically via the electronic 

execution mechanism of the Hybrid 

System, in whole or in part, against 

orders solicited from members and nonmember broker-dealers to transact with 

such orders. This paragraph also shall 

apply to agency orders resting on the 

Hybrid System in penny increments 

pursuant to Rule 6.13B. In such cases, 

agency orders priced in penny 

increments are deemed ‘‘exposed’’

pursuant to this paragraph. 

* * * * * 

Rule 6.45B Priority and Allocation of 

Trades in Index Options and Options on 

ETFs on the CBOE Hybrid System 

6.45B Generally: No change. 

(a)–(d) No change. 

* * * Interpretations and Policies: 

.01 Principal Transactions: Order 

entry firms may not execute as principal 

against orders they represent as agent 

unless: (i) Agency orders are first 

exposed on the Hybrid System for at 

least three (3) seconds, (ii) the order 

entry firm has been bidding or offering 

for at least (3) seconds prior to receiving 

an agency order that is executable 

against such bid or offer, or (iii) the 

order entry firm proceeds in accordance 

with the crossing rules contained in 

Rule 6.74. This paragraph also shall 

apply to orders resting on the Hybrid 

System in penny increments pursuant to 

Rule 6.13B. In such cases, agency orders 

priced in penny increments are deemed 

‘‘exposed’’ pursuant to (i) above, and 

order entry firm orders priced in penny 

increments are deemed bids or offers 

pursuant to (ii) above. 

.02 Solicitation Orders. Order entry 

firms must expose orders they represent 

as agent for at least three (3) seconds 

before such orders may be executed 

electronically via the electronic 

execution mechanism of the Hybrid 

System, in whole or in part, against 

orders solicited from members and nonmember broker-dealers to transact with 

such orders. This paragraph also shall 

apply to agency orders resting on the 

Hybrid System in penny increments 

pursuant to Rule 6.13B. In such cases, 

agency orders priced in penny 

increments are deemed ‘‘exposed’’

pursuant to this paragraph. 

* * * * * 

Rule 6.47. Priority on Split-Price 

Transactions Occurring in Open Outcry 

(a)–(c) No change. 

* * * Interpretations and Policies: 

.01 No change. 

.02 The availability of split-price 

priority when an order is executed in a 

one-cent increment pursuant to Rule 

6.13B shall be determined in 

accordance with Rule 6.13B(b). 

* * * * * 

Rule 6.74. Crossing Orders 

(a)–(f) No change. 

* * * Interpretations and Policies: 

.01–.08 No change. 

.09 For purposes of paragraphs (a), 

(b), and (d), the minimum increment for 

bids and offers shall be one cent for 

orders that are subject to the open 

outcry penny price improvement under 

Rule 6.13B. Open outcry penny price 

improvement under Rule 6.13B shall not 

be available for orders executed 

pursuant to paragraphs (c) and (f). 

* * * * * 


pwalker on PROD1PC71 with NOTICES
27158 Federal Register / Vol. 72, No. 92 / Monday, May 14, 2007 / Notices 

3 In File No. SR–CBOE–2006–42, the Exchange 

proposed to allow penny price improvement in 

open outcry. That filing has been withdrawn and 

most of its provisions have been incorporated into 

this filing, which also contemplates electronic 

penny price improvement. 

4The Exchange has represented that the system 

would not execute an order at a price that would 

cause a trade-through of another options exchange. 

5See CBOE Rule 6.74(c), which provides 

procedures for a floor broker to cross orders during 

the opening rotation for a class of options. 

6See CBOE Rule 6.74(f), which describes the 

SizeQuote Mechanism. 

7 15 U.S.C. 78f(b). 

8 15 U.S.C. 78f(b)(5). 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

CBOE 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 this filing is to allow 

Exchange users the expanded ability to 

effect transactions in penny increments 

in classes and/or series trading on 

CBOE’s Hybrid System that are not 

already quoting in penny increments.3

The Exchange would designate the 

classes/series eligible for this penny 

pricing, and the penny pricing would be 

available electronically and in open 

outcry. As proposed, all limit orders 

electronically sent to CBOE (regardless 

of sender origin type) could be 

expressed in a one-cent increment. The 

Exchange would round the limit price to 

the nearest permissible quoted 

increment for display purposes, but 

would maintain the one-cent increment 

limit price for trade allocation purposes. 

For example, the CBOE market is 1–1.20 

and an order is received to buy 10 

contracts at 1.08. CBOE would 

disseminate a 1.05 bid for 10 contracts, 

and any subsequent sell market order 

received by the Exchange would trade at 

1.08 for up to 10 contracts (after that, 

the quote would revert back to 1–1.20).4

An Exchange Market-Maker could 

also provide the Exchange with 

indications to trade in one-cent 

increments that improve on the MarketMaker’s disseminated quotation. To the 

extent there is trading interest from 

multiple sources at the same one-cent 

increment price, priority will be 

established in the exact same manner as 

priority at a standard quoting increment 

(i.e., normal allocation procedures are 

used). The Exchange may attach an 

indicator to its publicly disseminated 

quote indicating the existence of penny 

pricing for the series, but the size and 

price of any penny pricing will not be 

displayed or made available to anyone. 

If the indicator feature is activated, it 

will apply to all classes/series 

participating in the penny pricing 

program. 

With respect to open outcry, crowd 

members would be able to provide price 

improvement in one-cent increments 

over the Exchange’s Best Bid or Offer 

(‘‘BBO’’). The Exchange has represented 

that any resulting trade would not cause 

a trade-through of another options 

exchange. Further, prior to executing 

any order in open outcry in one-cent 

increments, members would be required 

to electronically ‘‘sweep’’ any penny 

pricing interest that may exist. The 

‘‘sweep’’ would ensure that betterpriced orders resting in one-cent 

increments are executed prior to the 

open outcry transaction and would also 

ensure that same priced orders receive 

executions consistent with existing 

rules governing priority of orders in the 

Hybrid book when trading with an order 

represented in open outcry (CBOE Rules 

6.45A(b) and 6.45B(b)). 

The applicability of split-price 

priority under CBOE Rule 6.47 to 

transactions effected under proposed 

CBOE Rule 6.13B would be determined 

by the appropriate option procedure 

committee, and the mechanics of splitprice priority in those instances would 

be the same as the mechanics of splitprice priority in five- and ten-cent 

increments. 

In addition, open outcry penny 

pricing would generally be available in 

instances where a Floor Broker is 

attempting to cross an order pursuant to 

CBOE Rule 6.74. However, it would not 

be available in those instances where (i) 

a Floor Broker is attempting to cross 

orders during the opening rotation in 

open outcry 5 or (ii) a Floor Broker is 

utilizing the Exchange’s SizeQuote 

Mechanism.6

Lastly, the restrictions contained in 

Interpretations and Policies .01 and .02 

under CBOE Rules 6.45A and 6.45B 

would continue to apply to trading in 

penny increments, including the 3- 

second exposure requirements, 

contained in those Interpretations and 

Policies. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act,7 in general, and 

furthers the objectives of Section 6(b)(5) 

of the Act,8 in particular, in that it is 

designed to facilitate transactions in 

securities, to promote just and equitable 

principles of trade, to prevent 

fraudulent and manipulative acts and 

practices, and, in general, to protect 

investors and the public interest. In 

particular, the Exchange believes that 

the proposal will provide an 

opportunity for customers to receive 

price improvement on their orders. 

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 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 

Written comments on the proposed 

rule change were neither solicited nor 

received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 35 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the Exchange consents, 

the Commission will: 

(A) By order approve such proposed 

rule change, or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. 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 


pwalker on PROD1PC71 with NOTICES
Federal Register / Vol. 72, No. 92 / Monday, May 14, 2007 / Notices 27159 

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(2). 

5See Securities Exchange Act Release No. 53828 

(May 18, 2006) (order exempting self-regulatory 

organizations (‘‘SROs’’) from compliance with the 

Allocation Amendment until April 1, 2007). 

6 15 U.S.C. 78f(b)(4). 

No. SR–CBOE–2007–39 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

No. SR–CBOE–2007–39. 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 at 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 the filing also will be 

available for inspection and copying at 

the principal office of the Exchange. 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–CBOE–2007–39 and should be 

submitted on or before June 4, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–9179 Filed 5–11–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55722; File No. SR–ISE–

2007–24] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change and Amendments No. 1 and 2 

Thereto Relating to Market Data 

Revenue Rebates 

May 8, 2007. 

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 April 11, 

2007, the International Securities 

Exchange, LLC (‘‘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 substantially prepared by the 

Exchange. The Exchange filed 

Amendment No. 1 to the proposed rule 

change on April 23, 2007, and 

Amendment No. 2 on May 3, 2007. The 

ISE filed this proposed rule change 

which establishes dues, fees or other 

charges among its members pursuant to 

Section 19(b)(3)(A)(ii) of the Act 3 and 

Rule 19b–4(f)(2) 4 thereunder, and, as 

such, it has become effective upon filing 

with the Commission. The Commission 

is publishing this notice to solicit 

comments on the proposed rule change, 

as amended, 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 relating to its sharing 

of market data revenues. The text of the 

proposed rule change is available at the 

ISE, the Commission’s Public Reference 

Room, and http://www.iseoptions.com/ 

legal/proposed_rule_changes.asp. 

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 this proposed rule 

change is to amend the Exchange’s 

Schedule of Fees to clarify that while 

the Exchange will continue to rebate 

back to Equity Electronic Access 

Members (‘‘EAMs’’) fifty percent (50%) 

of its market data revenues, it will now 

do so based on the Allocation 

Amendment of Regulation NMS enacted 

under the Act—i.e., allocated by quoting 

shares and trading shares.5 The 

Exchange will be retroactively applying 

this formula to market data revenues 

rebated back to Equity EAMs as of April 

1, 2007. 

Currently, the ISE rebates back fifty 

percent (50%) of the market data 

revenue received by the Exchange to 

Equity EAMs that are the liquidity 

providers on trades executed in the 

displayed market. The Allocation 

Amendment of Regulation NMS 

modifies the existing formulas for 

allocating revenues to the SRO 

participants, namely, introducing: (1) 

‘‘Quoting Shares’’—the allocation of 

revenues based on the extent to which 

automated quotations displayed by 

SROs equal the national best bid or offer 

in NMS stocks; and (2) implementing a 

new calculation method for allocating 

revenue based on ‘‘Trade Shares.’’

Under this new formula fifty percent 

(50%) of revenues will be allocated for 

Quoting Shares and fifty percent (50%) 

will be allocated for Trading Shares. 

Accordingly, the Exchange seeks to 

continue to rebate back to the Equity 

EAMs fifty percent (50%) of market data 

revenue the Exchange receives, but to 

allocate rebates based on this new 

formula—i.e., the ISE will rebate to 

Equity EAMs, on a symbol basis, fifty 

percent (50%) of the Trading Share 

revenue received for that symbol and 

fifty percent (50%) of the Quoting Share 

revenue for that symbol. 

2. Statutory Basis 

The basis under the Act for this 

proposed rule change is the requirement 

under Section 6(b)(4) 6 that an exchange 

have an equitable allocation of 

reasonable dues, fees, and other charges 


pwalker on PROD1PC71 with NOTICES