11622 Federal Register / Vol. 74, No. 51 / Wednesday, March 18, 2009 / Notices 

6The Commission notes that the Transmittal 

Letter accompanying the proposed Amendments 

included language not voted on by the Participants 

and thus not included in the proposed 

Amendments: ‘‘Network A Administrator will not 

incur any extraordinary expense on behalf of the 

Network A Participants unless the Network A 

Participants determine by majority vote to approve 

the incurrence of that extraordinary expense.’’ This 

language is not part of the proposed Amendments 

that the Commission is approving today. 

7See Notice, supra note 5 at 3660 for a more 

detailed description of how the fee will be assessed 

8The Commission has considered the proposed 

amendments’ impact on efficiency, competition, 

and capital formation. 15 U.S.C. 78c(f). 

9 15 U.S.C. 78k–1(a)(1). 

10 17 CFR 240.608. 

11The Commission notes that Nasdaq similarly 

receives a fixed fee for its performance of 

administrative functions under the ‘‘Joint SelfRegulatory Organization Plan Governing the 

Collection, Consolidation and Dissemination of 

Quotation and Transaction Information for NasdaqListed Securities Traded on Exchanges on Unlisted 

Trading Privileges Basis.’’ 

12 15 U.S.C. 78k–1. 

13 17 CFR 240.608. 

14 17 CFR 200.30–3(a)(27). 

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

2 17 CFR 240.19b–4. 

3Premium Products is defined in the Schedule of 

Fees as the products enumerated therein. 

II. Description of the Proposal 

Section XII (‘‘Financial Matters’’) of 

the CTA Plan and Section IX 

(‘‘Financial Matters’’) of the CQ Plan 

each provide that a network’s Operating 

Expenses are to be deducted from the 

network’s Gross Income before 

determining the amounts that the 

network’s administrator will distribute 

to the Participants. Both Section XII(c)(i) 

(‘‘Determination of Operating 

Expenses’’) of the CTA Plan and Section 

IX(c)(i) (‘‘Determination of Operating 

Expenses’’) of the CQ Plan currently 

provide that a network’s Operating 

Expenses include all costs and expenses 

that the network’s administrator incurs 

in ‘‘collecting, processing and making 

available Network A market data.’’ The 

Network A Administrator stated that 

accounting for operating costs, 

especially the allocation of organization 

overhead costs to the Network A 

Administrator function, is 

administratively burdensome. And as a 

result, the Network A Participants have 

proposed to replace their payment to the 

Network A Administrator of Operating 

Expenses with an Annual Fixed 

Payment. In the case of NYSE as the 

CTA and CQ Network A Administrator, 

the Participants proposed that 

‘‘Operating Expenses’’ for any calendar 

year equal: (1) The Annual Fixed 

Payment for that year; plus (2) 

‘‘Extraordinary Expenses.’’ 

Extraordinary Expenses would include 

that portion of legal and audit expenses 

and marketing and consulting fees that 

are outside of the ordinary and 

customary functions that a network 

administrator performs.6

For calendar year 2008, the Network 

A Participants voted to set the Annual 

Fixed Payment at $6,000,000 to 

compensate the Network A 

Administrator for its Network A 

administrative services during 2008 

under both the CTA and CQ Plans. For 

each subsequent calendar year the 

Annual Fixed Payment shall increase 

(but not decrease) by the percentage 

increase (if any) in the annual cost-ofliving adjustment (‘‘COLA’’) that the 

U.S. Social Security Administration 

applies to the Supplemental Security 

Income for the calendar year preceding 

that subsequent year, subject to a 

maximum annual increase of five 

percent.7

Discussion 

After careful review, the Commission 

finds that the Amendments to the Plans 

are consistent with the requirements of 

the Act and the rules and regulations 

thereunder,8 and, in particular, Section 

11A(a)(1) of the Act 9 and Rule 608 

thereunder 10 in that they are necessary 

or appropriate in the public interest, for 

the protection of investors and the 

maintenance of fair and orderly markets, 

to remove impediments to, and perfect 

the mechanisms of, a national market 

system. The Commission believes that 

permitting the Network A Administrator 

to assess a flat fee should increase the 

efficiency of the administration of the 

Plans.11 Additionally, the Commission 

notes that every two years the Network 

A Administrator is required to provide 

a report detailing any significant 

changes to the administrative expenses 

during the preceding two years to 

enable the Participants to review and 

determine by majority vote whether to 

continue the Annual Fixed Payment at 

its then current level. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 11A of the Act,12 and Rule 608 

thereunder,13 that the proposed 

amendments to the CTA and CQ Plans 

(SR–CTA/CQ–2008–05) are approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–5767 Filed 3–17–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59567; File No. SR–ISE– 

2009–12] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change Relating to Fee Changes 

March 12, 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 March 6, 

2009, 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 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 ISE is proposing to amend its 

Schedule of Fees to establish fees for 

transactions in options on 2 Premium 

Products.3 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. 


tjames on PRODPC61 with NOTICES
Federal Register / Vol. 74, No. 51 / Wednesday, March 18, 2009 / Notices 11623 

4 iShares® is a registered trademark of Barclays 

Global Investors, N.A. (‘‘BGI’’). ‘‘Standard & 

Poor’s®’’ and ‘‘S&P®’’ are trademarks of The 

McGraw-Hill Companies, Inc. (‘‘McGraw-Hill’’) and 

have been licensed for use for certain purposes by 

BGI. All other trademarks and service marks are the 

property of their respective owners. iShares U.S. 

Preferred Stock Index Fund (‘‘PFF’’) is not 

sponsored, endorsed, issued, sold or promoted by 

Standard & Poor’s, (‘‘S&P’’), a division of McGrawHill, and S&P makes no representation regarding 

the advisability of investing in PFF. BGI and S&P 

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 

PFF or (ii) to 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 PFF or with making 

disclosures concerning options on PFF under any 

applicable federal or state laws, rules or regulations. 

BGI and S&P do not sponsor, endorse, or promote 

such activity by ISE, and are not affiliated in any 

manner with ISE. 

5The United States 12 Month Oil Fund, LP 

(‘‘USL’’) is distributed by ALPS Distributors, Inc. 

(‘‘ALPS’’), administered by Brown Brothers 

Harriman & Co. (‘‘BBH’’) and United States 

Commodity Fund, LLC (‘‘USCF’’) is the General 

Partner. ALPS, BBH and USCF 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 USL or (ii) to 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 

USL or with making disclosures concerning options 

on USL under any applicable federal or state laws, 

rules or regulations. ALPS, BBH and USCF do not 

sponsor, endorse, or promote such activity by ISE, 

and are not affiliated in any manner with ISE. 

6These fees will be charged only to Exchange 

members. Under a pilot program that is set to expire 

on July 31, 2009, these fees will also be charged to 

Linkage Principal Orders (‘‘Linkage P Orders’’) and 

Linkage Principal Acting as Agent Orders (‘‘Linkage 

P/A Orders’’). The amount of the execution fee 

charged by the Exchange for Linkage P Orders and 

Linkage P/A Orders is $0.27 per contract side and 

$0.18 per contract side, respectively. See Securities 

Exchange Act Release No. 58143 (July 11, 2008), 73 

FR 41388 (July 18, 2008) (SR–ISE–2008–52). 

7Public 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 or entity that 

is not a broker or dealer in securities. 

8The Exchange applies a sliding scale, between 

$0.01 and $0.18 per contract side, based on the 

number of contracts an ISE market maker trades in 

a month. 

9The amount of the execution fee for non-ISE 

Market Maker transactions executed in the 

Exchange’s Facilitation and Solicitation 

Mechanisms is $0.20 per contract. 

10See Securities Exchange Act Release No. 34– 

49557 (April 12, 2004), 69 FR 20955 (April 19, 

2004). 

11See Securities Exchange Act Release No. 34– 

54414 (September 7, 2006), 71 FR 54546 (September 

15, 2006). 

12 15 U.S.C. 78f. 

13 15 U.S.C. 78f(b)(4). 

14 15 U.S.C. 78s(b)(3)(A). 

15 17 CFR 240.19b–4(f)(2). 

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 iShares 

U.S. Preferred Stock Index Fund 

(‘‘PFF’’) 4 and the United States 12 

Month Oil Fund, LP (‘‘USL’’).5 The 

Exchange represents that PFF and USL 

are eligible for options trading because 

they constitute ‘‘Exchange-Traded Fund 

Shares,’’ as defined by ISE Rule 502(h). 

All of the applicable fees covered by 

this filing are identical to fees charged 

by the Exchange for all other Premium 

Products. Specifically, the Exchange is 

proposing to adopt an execution fee for 

all transactions in options on PFF and 

USL.6 The amount of the execution fee 

for products covered by this filing shall 

be $0.18 per contract for all Public 

Customer Orders 7 and $0.20 per 

contract for all Firm Proprietary orders. 

The amount of the execution fee for all 

ISE Market Maker transactions shall be 

equal to the execution fee currently 

charged by the Exchange for ISE Market 

Maker transactions in equity options.8

Finally, the amount of the execution fee 

for all non-ISE Market Maker 

transactions shall be $0.45 per contract.9

Further, since options on PFF and USL 

are multiply-listed, the Exchange’s 

Payment for Order Flow fee shall apply 

to all these products. The Exchange 

believes the proposed rule change will 

further the Exchange’s goal of 

introducing new products to the 

marketplace that are competitively 

priced. 

Further, the Exchange proposes to 

amend its Schedule of Fees to remove 

the surcharge fee previously adopted for 

transactions in options on the iShares 

S&P MidCap 400 Index Fund (‘‘IJH’’), 

the iShares S&P SmallCap 600 Index 

Fund (‘‘IJR’’),10 and the iShares S&P 

SmallCap 600 Value Index Fund 

(‘‘IJS’’).11 The Exchange is proposing to 

remove the surcharge fee from its 

Schedule of Fees because it no longer 

pays a license fee to Standard & Poor’s 

in connection with transactions in 

options on IJH, IJR and IJS. Accordingly, 

there is no longer a need for this 

surcharge fee. The Exchange will, 

however, continue to charge an 

execution fee for transactions in options 

on IJH, IJR and IJS. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the objectives of Section 6 of the Act,12

in general, and furthers the objectives of 

Section 6(b)(4),13 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 

The foregoing rule change has become 

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

the Act 14 and Rule 19b–4(f)(2) 15

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 proposal 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 

No. SR–ISE–2009–12 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 No. 

SR–ISE–2009–12. 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 


tjames on PRODPC61 with NOTICES
11624 Federal Register / Vol. 74, No. 51 / Wednesday, March 18, 2009 / Notices 

16 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See Securities Exchange Act Release No. 52648 

(October 21, 2005), 70 FR 62155 (October 28, 2005) 

(SR–NYSE–2005–63). 

5See Securities Exchange Act Release No. 53539 

(March 22, 2006), 71 FR 16353 (March 31, 2006) 

(SR–NYSE–2004–05) (establishing the NYSE 

HYBRID MARKETSM). 

6See Securities Exchange Act Release Numbers 

54140 (July 13, 2006), 71 FR 41491 (July 21, 2006) 

(SR–NYSE–2006–48); 54985 (December 21, 2006), 

72 FR 171 (January 3, 2007) (SR–NYSE–2006–113); 

55992 (June 29, 2007), 72 FR 37289 (July 9, 2007) 

(SR–NYSE–2007–57); 56556 (September 27, 2007), 

72 FR 56421 (October 3, 2007) (SR–NYSE–2007– 

86); 57072 (December 31, 2007), 73 FR 1252 

(January 7, 2008) (SR–NYSE–2007–125); 57601 

(April 2, 2008), 73 FR 19123 (April 8, 2008) (SR– 

NYSE–2008–22). 

7See Securities Exchange Act Release No. 58845 

(October 24, 2008), 73 FR 64379 (October 29, 2008) 

(SR–NYSE–2008–46). 

8See Securities Exchange Act Release Numbers 

58033 (June 26, 2008), 73 FR 38265 (July 3, 2008) 

(SR–NYSE–2008–49); 58713 (October 2, 2008), 73 

FR 59024 (October 8, 2008) (SR–NYSE–2008–96); 

59069 (December 8, 2008), 73 FR 76081 (December 

15, 2008) (SR–NYSE–2008–124). 

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 changes 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, 100 F Street, NE., Washington, 

DC 20549, 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 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 No. 

SR–ISE–2009–12 and should be 

submitted on or before April 8, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–5779 Filed 3–17–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59551; File No. SR–NYSE– 

2009–24] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by New York 

Stock Exchange LLC Extending for 

Two Months to May 31, 2009 the 

Moratorium Related to the 

Qualification and Registration of 

Registered Competitive Market Makers 

Pursuant to NYSE Rule 107A and 

Competitive Traders Pursuant to NYSE 

Rule 110 

March 10, 2009. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on March 3, 

2009, New York Stock Exchange LLC 

(‘‘NYSE’’ or the ‘‘Exchange’’) 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 selfregulatory 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 proposes to extend for 

two months to May 31, 2009 the 

moratorium related to the qualification 

and registration of Registered 

Competitive Market Makers (‘‘RCMMs’’) 

pursuant to NYSE Rule 107A and 

Competitive Traders (‘‘CTs’’) pursuant 

to NYSE Rule 110. 

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 those 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 parts 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 proposes to extend for 

two months to May 31, 2009 the 

moratorium related to the qualification 

and registration of RCMMs pursuant to 

NYSE Rule 107A and CTs pursuant to 

NYSE Rule 110. 

On September 22, 2005, the Exchange 

filed SR–NYSE–2005–63 4 with the 

Securities and Exchange Commission 

(‘‘Commission’’) proposing to 

implement a moratorium on the 

qualification and registration of new 

RCMMS and CTs (‘‘Moratorium’’). The 

purpose of the Moratorium was to allow 

the Exchange an opportunity to review 

the viability of RCMMs and CTs in the 

NYSE HYBRID MARKETSM (‘‘Hybrid 

Market’’).5

During each phase of the Hybrid 

Market, the NYSE implemented new 

system functionality that generated 

additional data to review. As a result, 

the Exchange was unable to make an 

informed decision as to the viability of 

RCMMs and CTs in the Hybrid Market. 

The phasing in implementation of the 

Hybrid Market required the Exchange to 

extend the Moratorium an additional six 

times over a twenty-four (24) month 

period.6 During the Moratorium, the 

Exchange reviewed the quarterly 

volume data of RCMM and CT trading 

data to determine the average trading 

volume of RCMMs. 

On October 24, 2008, the Commission 

approved the Exchange’s new market 

model filing (‘‘Next Generation 

NYSE’’).7 The Next Generation NYSE 

filing: (i) provided market participants 

with additional abilities to post hidden 

liquidity on Exchange systems; (ii) 

created a Designated Market Maker 

(‘‘DMM’’), and phased out the NYSE 

specialist; and (iii) enhanced the speed 

of execution through technological 

enhancements and a reduction in 

message traffic between Exchange 

systems and its DMMs. In light of the 

implementation of Next Generation 

NYSE, the Exchange requested 

extensions of the Moratorium to 

evaluate the viability of the RCMMs and 

CTs in the proposed Next Generation 

NYSE.8

Next Generation NYSE is currently 

operating as a pilot scheduled to end on 

October 1, 2009. The Exchange 

continued to review RCMM and CT 

trading data. As a result of its review, 

the Exchange concluded that RCMMs 

and CTs no longer serve as viable 

supplemental market makers. 

Accordingly, the Exchange determined 

that RCMMs and CTs should no longer 

be viable classes of traders on the 

Exchange and will formally file a 

separate proposed rule change with the 

Commission to eliminate RCMMs and 

CTs as viable classes of NYSE traders. 


tjames on PRODPC61 with NOTICES