23312 Federal Register / Vol. 77, No. 75 / Wednesday, April 18, 2012 / Notices 

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

2 17 CFR 240.19b–4. 

3See Exchange Act Release Nos. 65087 (August 

10, 2011), 76 FR 50783 (August 16, 2011) (SR–ISE– 

2011–47); 65583 (October 18, 2011), 76 FR 65555 

(October 21, 2011) (SR–ISE–2011–68); 65705 

(November 8, 2011), 76 FR 70789 (November 15, 

2011) (SR–ISE–2011–70); 65898 (December 6, 

2011), 76 FR 77279 (December 12, 2011) (SR–ISE– 

2011–78); and 66169 (January 17, 2012), 77 FR 3295 

(January 23, 2012) (SR–ISE–2012–01). 

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

5 15 U.S.C. 78f(b)(4). 

6For example, the customer fee is $0.00 per 

contract for products other than Singly Listed 

Indexes, Singly Listed ETFs and FX Options. For 

Singly Listed Options, Singly Listed ETFs and FX 

Options, the customer fee is $0.18 per contract. The 

Exchange also currently has an incentive plan in 

place for certain specific FX Options which has its 

own pricing. See ISE Schedule of Fees. 

7The Exchange currently has a sliding scale fee 

structure that ranges from $0.01 per contract to 

$0.18 per contract depending on the level of volume 

a Member trades on the Exchange in a month. See 

ISE Schedule of Fees. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66790; File No. SR–ISE– 

2012–25] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change Relating to Fees and Rebates 

April 12, 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 April 4, 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 amend the 

threshold levels and rebate amounts for 

Qualified Contingent Cross (‘‘QCC’’) 

orders and Solicitation orders. 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 amend the threshold levels 

and rebate amounts for QCC orders and 

Solicitation orders to further encourage 

Members to submit greater numbers of 

QCC orders and Solicitation orders to 

the Exchange. The Exchange currently 

provides a rebate to Members who reach 

a certain volume threshold in QCC 

orders and/or Solicitation orders during 

a month.3 Once a Member reaches the 

volume threshold, the Exchange 

provides a rebate to that Member for all 

of its QCC and Solicitation contracts 

traded for that month. The rebate is paid 

to the Member entering a qualifying 

order, i.e., a QCC order and/or a 

Solicitation order. The rebate applies to 

QCC orders and Solicitation orders in 

all symbols traded on the Exchange. 

Additionally, the threshold levels are 

based on the originating side so if, for 

example, a Member submits a 

Solicitation order for 1,000 contracts, all 

1,000 contracts are counted to reach the 

established threshold even if the order 

is broken up and executed with 

multiple counter parties. 

The current volume threshold and 

corresponding rebate per contract is: 

Originating contract sides Rebate per 

contract 

0–199,999 ................................. $0.00 

200,000–999,999 ...................... 0.05 

1,000,000–1,599,999 ................ 0.08 

1,600,000+ ................................ 0.10 

The Exchange now proposes to amend 

the current tiers by: (1) Adjusting the 

second tier (200,000–999,999 contracts) 

so that it becomes 200,000–499,999 

contracts and increasing the rebate for 

this tier from $0.05 per contract to $0.07 

per contract; (2) adopting a new tier for 

500,000–699,999 contracts with a 

corresponding rebate of $0.08 per 

contract; (3) adopting a new tier for 

700,000–999,999 contracts with a 

corresponding rebate of $0.09 per 

contract; and (4) adjusting the last tier 

(1,600,000+ contracts) so that it becomes 

1,000,000+ contracts and increasing the 

rebate for this last tier from $0.10 to 

$0.11 per contract. With the proposed 

changes to the tiers, which reflect the 

recent decline in options trading 

volume, the Exchange is attempting to 

strike the right balance between the 

number of qualifying contracts and its 

corresponding rebate to ensure that the 

incentive program achieves its intended 

purpose of attracting greater order flow 

from its Members. 

With the proposed amended tiers, the 

volume threshold and corresponding 

rebate per contract will be as follows: 

Originating contract sides Rebate per 

contract 

0–199,999 ................................. $0.00 

200,000–499,999 ...................... 0.07 

500,000–699,999 ...................... 0.08 

700,000–999,999 ...................... 0.09 

1,000,000+ ................................ 0.11 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its Schedule of Fees 

is consistent with Section 6(b) of the 

Exchange Act 4 in general, and furthers 

the objectives of Section 6(b)(4) of the 

Exchange Act 5 in particular, in that it is 

an equitable allocation of reasonable 

dues, fees and other charges among 

Exchange Members. The Exchange 

believes that the proposed fee change 

will generally allow the Exchange and 

its Members to better compete for order 

flow and thus enhance competition. 

Specifically, the Exchange believes that 

its proposal, which among other things, 

lowers the threshold level for Members 

to qualify for the highest per contract 

rebate payable, is reasonable as it will 

encourage Members who direct their 

QCC and Solicitation orders to the 

Exchange to continue to do so instead 

of sending this order flow to a 

competing exchange. The Exchange 

believes that with the proposed 

amended tiers, which provides for 

additional volume thresholds, more 

Members are now likely to qualify for 

higher rebates for sending their QCC 

and Solicitation orders to the Exchange. 

The Exchange notes that it currently 

has other incentive programs to promote 

and encourage growth in specific 

business areas. For example, the 

Exchange has lower fees (or no fees) for 

customer orders; 6 and tiered pricing 

that reduces rates for market makers 

based on the level of business they bring 

to the Exchange.7 This proposed rule 

change targets a particular segment in 

which the Exchange seeks to attract 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 77, No. 75 / Wednesday, April 18, 2012 / Notices 23313 

8 15 U.S.C. 78s(b)(3)(A)(ii). 

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

greater order flow. The Exchange further 

believes that the rebate currently in 

place for QCC and Solicitation orders is 

reasonable because it is designed to give 

Members who trade a minimum of 

200,000 qualifying contracts in QCC and 

Solicitation orders on the Exchange a 

benefit by way of a lower transaction 

fee. As noted above, once a Member 

reaches an established volume 

threshold, all of the trading activity in 

the specified order type by that Member 

will be subject to the corresponding 

rebate. 

The Exchange also believes that its 

rebate program for QCC and Solicitation 

orders is equitable because it would 

uniformly apply to all Members engaged 

in QCC and Solicitation trading in all 

option classes traded on the Exchange. 

The Exchange further believes that its 

fees and credits remain competitive 

with fees charged by other exchanges 

and therefore are reasonable and 

equitably allocated to those members 

that opt to direct orders to the Exchange 

rather than to a competing exchange. 

The QCC and Solicitation rebate 

program employed by the Exchange has 

proven to be an effective pricing 

mechanism and attractive to Exchange 

participants and their customers. 

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.8 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–2012–25 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–2012–25. 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– 

2012–25 and should be submitted on or 

before May 9, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–9283 Filed 4–17–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66793; File No. SR–ISE– 

2012–27] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change To Amend an Existing Fee Cap 

Program and Related Service Fee 

April 12, 2012. 

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

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 2 thereunder, 

notice is hereby given that, on April 2, 

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, II, and 

III 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 amend an 

existing fee cap program and a related 

service fee. 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 

mstockstill on DSK4VPTVN1PROD with NOTICES