1740 Federal Register / Vol. 74, No. 8 / Tuesday, January 13, 2009 / Notices 

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. 78f. 

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

5 15 U.S.C. 78s(b)(3)(A). 

6 17 CFR 19b–4(f)(2). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–438 Filed 1–12–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59201; File No. SR–ISE– 

2008–101] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by 

International Securities Exchange, LLC 

Relating to Amending the Fee 

Schedule 

January 6, 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 December 

31, 2008, the International Securities 

Exchange, LLC (the ‘‘Exchange’’ or the 

‘‘ISE’’) filed with the Securities and 

Exchange Commission the proposed 

rule change as described in Items I, II, 

and III below, which items have been 

prepared by the self-regulatory 

organization. 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 Exchange is proposing to amend 

its Schedule of Fees with respect to 

equity transactions. 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 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 

Purpose—Currently, the Exchange’s 

Schedule of Fees for equity transactions 

consists of a tiered rebate structure for 

securities priced at or above $1.00 

across all Tapes, averaged across an 

entire month, where the first five 

million maker shares executed on an 

average daily volume (ADV) basis 

receive a rebate of $0.0032 per share, 

with an increase in the rebate to $0.0035 

for each maker share executed above 

five million ADV. 

The Exchange now proposes to 

rescind the tiered rebate structure and 

implement a flat rebate, irrespective of 

ADV. The Exchange is amending the fee 

schedule in an effort to increase order 

flow in securities that are reported to 

Tape B. Accordingly, the Exchange 

proposes to adopt a fee structure for 

transactions in securities priced at or 

above $1.00 (excluding both order 

delivery and MidPoint Match orders) 

whereby the maker receives a per share 

rebate of $0.0035 for transactions in 

securities that are reported to Tape B 

and a per share rebate of $0.0029 for 

transactions in securities that are 

reported to Tape A and Tape C. The 

aforementioned fee changes will become 

operative on January 2, 2009. 

The execution fee for orders that 

remove liquidity for securities, across 

all tapes, that trade at or above $1.00 

will remain unchanged at $0.003. The 

execution fee for orders that remove 

liquidity for securities, across all tapes, 

priced under $1.00 remains unchanged, 

at 0.3% of trade value with no rebates 

for adding liquidity in such securities. 

Basis—The Exchange believes that the 

proposed rule change is consistent with 

the objectives of Section 6 of the Act,3

in general, and furthers the objectives of 

Section 6(b)(4),4 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, raising the rebate in Tape B 

securities may provide incentive to 

members to send order flow to the ISE 

for securities reported to Tape B. 

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 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 5 and Rule 19b–4(f)(2) 6

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, 

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–ISE–2008–101 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–2008–101. 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 

Federal Register / Vol. 74, No. 8 / Tuesday, January 13, 2009 / Notices 1741 

7 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 58998 

(Nov. 21, 2008), 73 FR 72540 (Nov. 28, 2008) 

(‘‘Commission’s Notice’’). 

4See letter from Jeffrey A. Schuh, Vice President, 

Chief Compliance Officer, Wells Fargo Brokerage 

Services, LLC (‘‘WFBS’’), dated December 18, 2008; 

letter from Leslie M. Norwood, Managing Director 

and Associate General Counsel, Securities Industry 

and Financial Markets Association (‘‘SIFMA’’), 

dated December 19, 2008; and letter from Michael 

Decker and Mike Nicholas, Co-Chief Executive 

Officers, Regional Bond Dealers Association 

(‘‘RBDA’’), dated December 29, 2008. 

5 In Amendment No. 1, the MSRB responded to 

the three comment letters and, in response to the 

comment letters, postponed the effective date of the 

proposed amendments to Rule G–34 that relate to 

Variable Rate Demand Obligations from January 30, 

2009 to April 1, 2009. The proposed January 30, 

2009 effective date for the proposed amendments to 

Rule G–34 that relate to Auction Rate Securities 

remains unchanged. This is a technical amendment 

and is not subject to notice and comment. 

6See supra note 4. 

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 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 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– 

2008–101 and should be submitted on 

or before February 3, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–413 Filed 1–12–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59212, File No. SR–MSRB– 

2008–07] 

Self-Regulatory Organizations; 

Municipal Securities Rulemaking 

Board; Order Granting Approval of 

Proposed Rule Change as Modified by 

Amendment No. 1 Relating to MSRB 

Rule G–34, CUSIP Numbers and New 

Issue Requirements, to Establish a 

Transparency System for Municipal 

Auction Rate Securities and Municipal 

Variable Rate Demand Obligations 

January 7, 2009. 

On November 18, 2008, the Municipal 

Securities Rulemaking Board (‘‘MSRB’’), 

filed with the Securities and Exchange 

Commission (‘‘Commission’’ or ‘‘SEC’’), 

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

Securities Exchange Act of 1934 

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

proposed rule change to MSRB Rule G– 

34, CUSIP Numbers and New Issue 

Requirements, to establish a 

transparency system for municipal 

auction rate securities and municipal 

variable rate demand obligations. The 

proposed rule change was published for 

comment in the Federal Register on 

November 28, 2008.3 The Commission 

received three comment letters about 

the proposed rule change.4 On January 

2, 2009, the MSRB filed Amendment 

No. 1 to the proposed rule change.5 This 

order approves the proposed rule 

change as modified by Amendment No. 

1. 

The proposed rule change would 

establish a transparency system for 

municipal Auction Rate Securities 

(‘‘ARS’’) and municipal Variable Rate 

Demand Obligations (‘‘VRDO’’). The 

proposed rule change would: (i) 

Implement an electronic system that 

would collect and disseminate ARS and 

VRDO information (the ‘‘Short-term 

Obligation Rate Transparency System 

Proposal’’); (ii) provide free public 

access to information disseminated from 

the Short-term Obligation Rate 

Transparency (‘‘SHORT’’) System 

through the MSRB’s Electronic 

Municipal Market Access (EMMA) 

system (the ‘‘EMMA short-term 

obligation rate transparency service’’); 

and (iii) amend Rule G–34, on CUSIP 

numbers and new issue requirements, to 

require brokers, dealers and municipal 

securities dealers (collectively 

‘‘dealers’’) to report, or ensure the 

reporting of, interest rate and 

descriptive information to the SHORT 

System about ARS and VRDO following 

an ARS auction or VRDO interest rate 

reset. A full description of the proposal 

is contained in the Commission’s 

Notice. 

As previously noted, the Commission 

received three comment letters relating 

to the proposed rule change.6 The 

commenters generally supported the 

concept of the proposal, but raised 

concerns about the timing of its 

implementation and certain data points 

required to be collected. WFBS 

commented only with respect to the 

proposed effective date of the proposal. 

WFBS requested that the 

implementation date of the proposal be 

extended to four months from the date 

of publication of the final rule so that 

changes needed to support the SHORT 

proposal could be designed, thoroughly 

tested and implemented prior to the 

proposed implementation date. 

SIFMA supported the concept of 

collection and display of auction rate 

reset and remarketing rate reset 

information, and focused its comments 

on the timing of implementation and 

certain data points proposed to be 

collected. SIFMA stated that its 

members feel strongly that January 30, 

2009 is an unrealistically short 

timeframe for implementing the new 

regulatory requirement. SIFMA noted 

that this year has been a historic year for 

technological and operational issues 

due to the market dislocation, and that 

this as well as other issues have resulted 

in many urgent technology and 

operation projects queued at broker 

dealer firms. SIFMA requested that the 

proposal be delayed until the later of 

April 1, 2009 or 90 days after the final 

rule is approved by the SEC. 

SIFMA also recommended that 

maximum and minimum VRDO rates 

not be required by the SHORT system. 

SIFMA stated that the terms of VRDO 

securities, by and large, have been 

negotiated on a bespoke basis for each 

transaction, that maximum rate 

formulas are not standardized, and that 

the administrative burden of calculating 

and reporting the maximum rate for 

every reset period is in excess of the 

theoretical benefits it provides. SIFMA 

also found no evidence of minimum 

rates in any VRDO transaction and 

stated that this is a superfluous field 

which should be eliminated. 

SIFMA stated that the broker dealers 

regulated by the MSRB do not have 

control over all of the ARS data points 

being requested in the proposal because 

broker dealers merely receive the 

auction information from the auction 

agent. Therefore SIFMA believes that 

there should be an acknowledgement in 

Rule G–34(c)(i) that the broker dealer is 

only responsible for forwarding the 

information it has received from the 

auction agent and not be responsible for 

the accuracy of that data. 

RBDA stated in its letter that they 

support the implementation of the 

proposal as early as is practical, but 

believe the intended effective date of 

January 30, 2009 will not give market 

participants sufficient time to 

implement and thoroughly test 

automated systems that will facilitate 

compliance with rules associated with 

the new system. RBDA requested that 

the effective date for full