Federal Register / Vol. 77, No. 70 / Wednesday, April 11, 2012 / Notices 21833 

32 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Pursuant to ISE Rule 100(37A), a Priority 

Customer is a person or entity that is not a broker 

or dealer in securities, and does not place more 

than 390 orders in listed options per day on average 

during a calendar month for its own beneficial 

account. 

4Pursuant to ISE Rule 1900(f) of the Distributive 

Linkage rules, a customer is an individual or 

organization that is not a broker-dealer. 

5See Securities and Exchange Act Release No. 

60791 (October 5, 2009), 74 FR 52521 (October 13, 

2009) (SR–ISE–2009–74). 

6See Securities and Exchange Act Release No. 

66589 (March 14, 2012), 76 [sic] FR 16311 (March 

20, 2012) (SR–ISE–2012–13). 

7See Securities and Exchange Act Release No. 

66367 (February 9, 2012), 77 FR 8934 (February 15, 

2012) (SR–Phlx-2012–15). 

business days between 10 a.m. and 3 

p.m. Copies of the filing will also be 

available for inspection and copying at 

the Exchange’s principal office and on 

its Internet Web site at www.nyse.com. 

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–NYSEArca–2012–25 and 

should be submitted on or before May 

2, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.32

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–8717 Filed 4–10–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66746; File No. SR–ISE– 

2012–28] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change To Increase the Route-Out Fee 

for Priority Customer Orders and 

Modify the Rebate for Primary Market 

Makers That Send Intermarket Sweep 

Orders 

April 5, 2012. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Exchange Act’’) 1 and Rule 19b–4 

thereunder,2 notice is hereby given that 

on March 30, 2012, the International 

Securities Exchange, LLC (the 

‘‘Exchange’’ or the ‘‘ISE’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. 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 raise a fee 

related to the execution of Priority 

Customer orders subject to linkage 

handling. 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, 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 raise a fee related to the 

execution of Priority Customer 3 orders 

subject to linkage handling (‘‘Linkage 

Fee’’). 

On August 31, 2009, the Exchange 

implemented the new Options Order 

Protection and Locked/Crossed Market 

Plan (‘‘Distributive Linkage’’) and the 

use of Intermarket Sweep Orders 

(‘‘ISOs’’). Consistent with Distributive 

Linkage and pursuant to ISE rules, the 

Exchange’s Primary Market Makers 

(‘‘PMMs’’) have an obligation to address 

customer 4 orders when there is a better 

market displayed on another exchange. 

ISE’s PMMs meet this obligation via the 

use of ISOs. In meeting their obligations, 

PMMs may incur fees when they send 

ISOs, especially when sending ISOs to 

exchanges that charge ‘‘taker’’ fees. To 

minimize the PMM’s financial burden 

and help offset such fees, the ISE 

amended its schedule of fees on October 

1, 2009 to adopt a rebate for the PMM 

of $0.20 per contract on all ISO orders 

sent to an away exchange (regardless of 

the fee charged by the exchange where 

the ISO order sent away was executed).5

With the costs associated with servicing 

Priority Customer orders that must be 

executed at another exchange coupled 

with the cost of funding the existing fee 

credit, the Exchange recently adopted 

the Linkage Fee, at a rate of $0.25 per 

contract, for executions that result from 

the PMM routing ISOs to another 

exchange in a limited number of 

symbols.6 The Linkage Fee is only 

charged for Priority Customer orders 

that are routed to an away exchange in 

symbols that are subject to the 

Exchange’s modified maker/taker 

pricing model. These symbols, which 

currently number 101, are identified on 

the Exchange’s Schedule of Fees as 

Select Symbols. Priority Customer 

orders that are routed out to another 

exchange are charged the Linkage Fee at 

the current rate instead of the standard 

taker fee applicable to the Select 

Symbols. 

The Linkage Fee allows the Exchange 

to equitably assess reasonable fees 

incurred for processing such orders, and 

permit the Exchange to recoup 

administrative and other costs. 

However, because the fees assessed by 

other exchanges vary considerably, the 

Exchange has determined that instead of 

providing PMMs with a rebate of $0.20 

per contract, it will now simply rebate 

to PMMs the actual transaction fee 

assessed by the exchange to which the 

order is routed, while requiring the 

PMM to make every effort, all things 

being equal, to route the order to the 

lowest cost away market. Furthermore, 

as a result of recent fee changes, notably 

the taker fee increases adopted by 

NASDAQ OMX PHLX, Inc.,7 the overall 

cost to PMMs has risen significantly and 

will likely cause the overall rebate level 

to the PMMs incurred by the Exchange 

to rise also. To offset this increased 

rebate, the Exchange also proposes to 

increase the Linkage Fee from $0.25 per 

contract to $0.35 per contract. 

The Exchange notes that it currently 

has a similar fee and credit for Customer 

(Professional) orders. Specifically, the 

Exchange currently charges PMMs a fee 

of $0.45 per contract for executions of 

Customer (Professional) orders that are 

routed to one or more exchanges in 

connection with Distributive Linkage, 

and also provides PMMs with a credit 

equal to the fee charged by the 

destination exchange for such Customer 

(Professional) orders, but not more than 


wreier-aviles on DSK5TPTVN1PROD with NOTICES
21834 Federal Register / Vol. 77, No. 70 / Wednesday, April 11, 2012 / Notices 

8See Securities and Exchange Act Release No. 

61855 (April 6, 2010), 75 FR 19441 (April 14, 2010) 

(SR–ISE–2010–26). 

9See NASDAQ OMX PHLX Fee Schedule, 

Section V. 10 15 U.S.C. 78s(b)(3)(A)(ii). 11 17 CFR 200.30–3(a)(12). 

$0.45 per contract.8 This routing fee and 

credit applies to all the symbols that are 

traded on the Exchange. 

The Exchange has designated this 

proposal to be operative on April 2, 

2012. 

2. Statutory Basis 

The basis under the Securities 

Exchange Act of 1934 (the ‘‘Exchange 

Act’’) for this proposed rule change is 

the requirement under Section 6(b)(4) 

that an exchange have an equitable 

allocation of reasonable dues, fees and 

other charges among its members and 

other persons using its facilities. In 

particular, the Exchange believes 

charging a route-out fee for Priority 

Customer orders is reasonable if doing 

so provides the Exchange the ability to 

recover the costs of funding a credit the 

Exchange provides to its PMMs, who, in 

the course of meeting their obligation, 

are incurring a financial burden. The 

Exchange further believes it is equitable 

and reasonable to assess the proposed 

fee to recoup costs associated with 

routing Priority Customer orders to 

away markets. The Exchange also 

believes that the proposed fees are 

equitable and not unfairly 

discriminatory because the fees would 

be uniformly applied to all Priority 

Customer orders. ISE notes that a 

number of other exchanges currently 

charge a variety of routing related fees 

associated with customer and noncustomer orders that are subject to 

linkage handling. The Exchange further 

notes that the fees proposed herein are 

substantially lower than the level of fees 

charged by some of the Exchange’s 

competitors.9 And, as noted above, the 

Exchange already provides a credit 

equal to the fee charged by a destination 

exchange for Customer (Professional) 

orders, although that credit is currently 

capped at $0.45 per contract. 

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 

Exchange 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 Exchange Act.10 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 Exchange 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 proposed rule 

change is consistent with the Exchange 

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 email to rulecomments@sec.gov. Please include File 

Number SR–ISE–2012–28 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–2012–28. This file 

number should be included on the 

subject line if email 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 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–ISE– 

2012–28 and should be submitted on or 

before May 2, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–8711 Filed 4–10–12; 8:45 am] 

BILLING CODE 8011–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

Airborne Radar Altimeter Equipment 

(For Air Carrier Aircraft) 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Cancellation of Technical 

Standard Order (TSO)–C67, Airborne 

Radar Altimeter Equipment (For Air 

Carrier Aircraft). 

SUMMARY: This is a confirmation notice 

of the cancellation of TSO–C67, 

Airborne Radar Altimeter Equipment 

(For Air Carrier Aircraft). The effect of 

the cancelled TSO will result in no new 

TSO–C67 design or production 

approvals. However, cancellation will 

not affect any current production of an 

existing TSO authorization (TSOA). 

Articles produced under an existing 

TSOA can still be installed per the 

existing airworthiness approvals, and all 

applications for new airworthiness 

approvals will still be processed. 

SUPPLEMENTARY INFORMATION: 

Background 

On November 15, 1960, the FAA 

published TSO–C67, Airborne Radar 

Altimeter Equipment (for air carrier 

aircraft). Since 1978, there have been no 

new applications for TSOA for TSO– 

C67. Our research indicates there are no 

authorized manufacturers currently 


wreier-aviles on DSK5TPTVN1PROD with NOTICES