Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Notices 15795 

6 15 U.S.C. 78q–1. 

7 15 U.S.C. 78a(b)(3)(A). 

8 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Amendment No. 1 replaced and superseded the 

original filing in its entirety. 

structured options that become fungible 

with non-flexibly structured options 

will cease to be classified as flexibly 

structured options. Therefore, such 

flexibly structured options will cease to 

be subject to automatic exercise at 

expiration and will instead be subject to 

exercise by exception like the nonflexibly structured options with which 

they have become fungible. 

OCC believes that the proposed 

changes to OCC’s By-Laws and Rules are 

consistent with the purposes and 

requirements of Section 17A of the Act 6

because they are designed to promote 

the prompt and accurate clearance and 

settlement of transactions in, including 

exercises of, flexibly structured options 

and to foster cooperation and 

coordination with persons engaged in 

the clearance and settlement of such 

transactions, to remove impediments to 

and perfect the mechanism of a national 

system for the prompt and accurate 

clearance and settlement of such 

transactions, and, in general, to protect 

investors and the public interest. It 

accomplishes these purposes by 

maintaining consistency between OCC’s 

By-Laws and Rules and CBOE’s rules as 

applied to the clearance and settlement 

of flexibly structured options. The 

proposed rule change is not inconsistent 

with the existing By-Laws and Rules of 

OCC, including any rules proposed to be 

amended. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

OCC does not believe that the 

proposed rule change would impose any 

burden on competition. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

OCC has not solicited or received 

written comments with respect to the 

proposed rule change. OCC will notify 

the Commission of any written 

comments it receives. 

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 7 and Rule 19b–4(f) 

thereunder because the proposed rule 

effects a change in an existing OCC 

service that (i) does not adversely affect 

the safeguarding of securities or funds 

in OCC’s custody or control or for which 

OCC is responsible and (ii) does not 

significantly affect OCC’s respective 

rights or obligations or persons using 

the service. At any time within 60 days 

of the filing of the proposed rule change, 

the Commission may summarily 

abrogated 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 rulecomment@sec.gov. Please include File 

No. SR–OCC–2009–05 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–OCC–2009–05. 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, 100 F Street, NE., Washington, 

DC 20549, on official business days 

between the hours of 10 a.m. to 3 p.m. 

Copies of such filing also will be 

available for inspection and copying at 

OCC’s principal office and on OCC’s 

Web site at http://www.theocc.com/ 

publications/rules/proposed_changes/ 

proposed_changes.jsp. 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–OCC–2009– 

05 and should be submitted on or before 

April 28, 2009. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.8

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–7774 Filed 4–6–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59679; File No. SR–ISE– 

2007–97] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing of Proposed Rule 

Change and Amendment No. 1 Thereto 

Relating to Market Data Fees 

April 1, 2009. 

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 October 

5, 2007, International Securities 

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

‘‘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 prepared by the Exchange. 

On March 9, 2009, the Exchange filed 

Amendment No. 1 to the proposed rule 

change.3 The Commission is publishing 

this notice to solicit comments on the 

proposed rule change, as modified by 

Amendment No. 1, 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 to establish fees for 

a real-time depth of market data 

offering. 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. 

15796 Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Notices 

4 ‘‘Core’’ data refers to the best-priced quotations 

and comprehensive last sale reports of all markets 

that the Commission requires a central processor to 

consolidate and distribute to the public pursuant to 

joint-SRO plans. ‘‘Non-core’’ data refers to products 

other than the consolidated products that markets 

offer collectively under joint industry plans. 

5See Securities Exchange Act Release Nos. 53212 

(February 2, 2006), 71 FR 6803 (February 9, 2006) 

(Notice of Filing and Immediate Effectiveness of 

Proposed Rule Change Establishing Fees for 

Historical Options Tick Market Data); 53390 

(February 28, 2006), 71 FR 11457 (March 7, 2006) 

(Order Granting Accelerated Approval of a 

Proposed Rule Change Establishing Fees for 

Historical Options Tick Market Data for NonMembers); 53756 (May 3, 2006), 71 FR 27526 (May 

11, 2006) (Order Granting Approval of a Proposed 

Rule Change Establishing Fees for Enhanced 

Sentiment Market Data); 56254 (August 15, 2007), 

72 FR 47104 (August 22, 2007) (Notice of Filing and 

Immediate Effectiveness of Proposed Rule Change 

Relating to ISE Open/Close Trade Profile Fees; 

56315 (August 24, 2007), 72 FR 50148 (August 30, 

2007) (Order Approving a Proposed Rule Change 

Relating to ISEE Select Market Data Fees). 

6 ISE proposes that a ‘‘distributor’’ be defined as 

any firm that receives an ISE data feed directly from 

ISE or indirectly through a ‘‘redistributor’’ and then 

distributes it either internally or externally. Further, 

ISE proposes that all distributors execute an ISE 

distributor agreement. ‘‘Redistributors’’ include 

market data vendors and connectivity providers 

such as extranets and private network providers. 

7 ISE proposes that a ‘‘controlled device’’ be 

defined as any device that a distributor of the ISE 

Depth of Market permits to access the information 

in the Depth of Market offering. 

8See the Sixth Substantive Amendment and 

Sixth Charges Amendment to the CTA Plan, File 

No. S7–433, Release Nos. 34–20002 (July 22, 1983), 

34–20239 (September 30, 1983) and 34–20386 

(November 17, 1983). 

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 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

ISE currently creates market data that 

consists of options quotes and orders 

and all trades that are executed on the 

Exchange. ISE also produces a Best Bid/ 

Offer, or BBO, with the aggregate size 

from all outstanding quotes and orders 

at the top price level, or the ‘‘top of 

book.’’ This ‘‘core’’ 4 data is formatted 

according to Options Price Reporting 

Authority (‘‘OPRA’’) specification and 

sent to OPRA for redistribution to the 

public. 

In addition to the BBO ‘‘core’’ data, 

the Exchange also produces a ‘‘noncore’’ data feed, the ISE Depth of Market 

Data Feed (‘‘Depth of Market’’), a service 

that aggregates all quotes and orders at 

the top five price levels, on both the bid 

and offer side of the market. The Depth 

of Market offering consists of nonmarketable orders and quotes that a 

prospective buyer or seller has chosen 

to display. The purpose of this proposed 

rule change is to establish fees for the 

ISE Depth of Market offering. Depth of 

Market, which is distributed in real 

time, provides subscribers with a 

consolidated view of tradable prices 

beyond the BBO. Further, Depth of 

Market shows additional liquidity and 

enhances transparency for ISE traded 

options that is not currently available 

through the OPRA feed. The proposed 

offering is available to members and 

non-members, and to both professional 

and non-professional subscribers. 

ISE believes that it has consistently 

supported the broadest, most effective 

dissemination of market information to 

public investors. Its multiple filings 

regarding ‘‘non-core’’ market data have 

provided market participants with tools 

to enhance their trading opportunities.5

The Exchange proposes to charge 

distributors 6 of Depth of Market $5,000 

per month. In addition, the Exchange 

proposes to charge the distributor a 

monthly fee per controlled device 7 of (i) 

$50 per controlled device for 

Professionals at a distributor where the 

data is for internal use only, (ii) $50 per 

controlled device for Professionals who 

receive the data from a distributor 

where the data is further redistributed 

externally, and (iii) $5 per controlled 

device for Non-Professionals who 

receive the data from a distributor. The 

Exchange proposes to limit for any one 

month the combined maximum amount 

of fees payable by a distributor, as 

follows: (i) $7,500 for Professionals at a 

distributor where the data is for internal 

use only, (ii) $12,500 for Professionals 

where the data is further redistributed 

externally in a controlled device, and 

(iii) $10,000 for Non-Professionals who 

receive the data in a controlled device 

from a distributor. In an effort to 

accommodate a distributor’s 

development effort to integrate the 

Depth of Market offering, the Exchange 

proposes to charge distributors a flat fee 

of $1,000 for the first month after 

connectivity has been established 

between ISE and the distributor. 

Further, the Exchange proposes to waive 

all user fees during this one month 

period. 

In differentiating between 

Professional and Non-Professional 

subscribers, the Exchange proposes to 

apply the same criteria for qualification 

as a Non-Professional subscriber as the 

Consolidated Tape Association (‘‘CTA’’) 

Plan and Consolidated Quotation 

System Plan Participants use. 

Accordingly, a ‘‘Non-Professional 

Subscriber’’ is an authorized end-user of 

Depth of Market data who is a natural 

person and who is neither: (a) 

Registered or qualified with the 

Securities and Exchange Commission 

(the ‘‘Commission’’), the Commodities 

Futures Trading Commission, any state 

securities agency, any securities 

exchange or association, or any 

commodities or futures contract market 

or association; (b) engaged as an 

‘‘investment advisor’’ as that term is 

defined Section 202(a)(11) of the 

Investment Advisers Act of 1940 

(whether or not registered or qualified 

under that act); nor (c) employed by a 

bank or other organization exempt from 

registration under Federal and/or state 

securities laws to perform functions that 

would require him/her to be so 

registered or qualified if he/she were to 

perform such functions for an 

organization not so exempt. A 

‘‘Professional Subscriber’’ is an 

authorized end-user of Depth of Market 

that has not qualified as a NonProfessional Subscriber. 

Under the proposal, the Exchange 

would apply one device fee in respect 

of professional subscribers to Depth of 

Market and a different, lower device fee 

in respect of non-professional 

subscribers. The use of a lower fee for 

non-professional subscribers than for 

professional subscribers has a long 

history. CTA first adopted a nonprofessional subscriber fee 25 years 

ago.8 Since then, individual investors 

have had broadened access to real-time 

market information. The Exchange 

believes that a non-professional 

subscriber fee for Depth of Market will 

likely lead to greater access by 

individual investors to Depth of Market 

information and thereby to further the 

statutory goals expressed in Section 

11A(a)(1)(c) of the Securities Exchange 

Act of 1934 (the ‘‘Exchange Act’’). 

Further, Section 603(a)(2) of 

Regulation NMS requires markets to 

distribute market data ‘‘on terms that are 

not unreasonably discriminatory.’’ 

Given the differences in data usage 

between professional subscribers and 

non-professional subscribers and the 

industry’s long acceptance of different 

fees for professional subscribers and 

non-professional subscribers, the 

Exchange believes that the proposed 

Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Notices 15797 

9See Securities Exchange Act Release No. 59039 

(December 2, 2008), 73 FR 74770 (December 9, 

2008) (SR–NYSEArca–2006–21). 

10See Regulation NMS Release, 70 FR at 37566– 

37567 (addressing differences in distribution 

standards between core data and non-core data). 

11NYSE ArcaBook Approval Order at pp. 46–47. 

12 Id. at pp. 48–49. 

13 Id. at p. 51. 

14 Id. at p. 52. 

15 Id. at p. 53. 

non-professional subscriber fee does not 

unreasonably discriminate against the 

professional subscriber fee. 

The Exchange believes the proposed 

fees for Depth of Market comport with 

the standard that the Commission 

established for determining whether 

market data fees relating to non-core 

market data products are fair and 

reasonable. In its recent ‘‘Order Setting 

Aside Action by Delegated Authority 

and Approving Proposed Rule Change 

Relating to NYSE Arca Data’’ (the 

‘‘NYSE ArcaBook Approval Order’’),9

the Commission reiterated its position 

from its release approving Regulation 

NMS that it should ‘‘allow market 

forces, rather than regulatory 

requirements, to determine what, if any, 

additional quotations outside the NBBO 

are displayed to investors.’’10

The Commission went on to state that: 

The Exchange Act and its legislative 

history strongly support the Commission’s 

reliance on competition, whenever possible, 

in meeting its regulatory responsibilities for 

overseeing the SROs and the national market 

system. Indeed, competition among multiple 

markets and market participants trading the 

same products is the hallmark of the national 

market system.11

The Commission then articulated the 

standard that it will apply in assessing 

the fairness and reasonableness of 

market data fees for non-core products, 

as follows: 

With respect to non-core data, * * * the 

Commission has maintained a market-based 

approach that leaves a much fuller 

opportunity for competitive forces to work. 

This market-based approach to non-core data 

has two parts. The first is to ask whether the 

exchange was subject to significant 

competitive forces in setting the terms of its 

proposal for non-core data, including the 

level of any fees. If an exchange was subject 

to significant competitive forces in setting the 

terms of a proposal, the Commission will 

approve the proposal unless it determines 

that there is a substantial countervailing basis 

to find that the terms nevertheless fail to 

meet an applicable requirement of the 

Exchange Act or the rules thereunder.12

The options industry is subject to 

significant competitive forces and the 

introduction of the Depth of Market 

offering is just one response to that 

competition. The options Exchanges 

compete intensely for order flow. The 

primary purpose of any ‘‘non-core’’ data 

offering by an Exchange is to attract 

order flow. Attracting order flow is a 

significant concern of any exchange, be 

it an equity, options or futures 

exchange. ‘‘If an exchange cannot attract 

orders, it will not be able to execute 

transactions. If it cannot execute 

transactions, it will not generate 

transaction revenue. If an exchange 

cannot attract orders or execute 

transactions, it will not have market 

data to distribute,’’ 13 or to monetize. 

ISE currently competes with six other 

options exchanges for order flow and 

‘‘the competition is fierce.’’ 14 The 

number of registered options exchanges 

in the United States has increased 75% 

since ISE itself became an exchange in 

2000. Although ISE’s total volume 

increased in 2008 over 2007, its market 

share suffered a decline. The table 

below details market share among the 

options exchanges in all listed products 

from 2006 through 2008, showing 

increases and decreases in market share 

quarter-by-quarter. 

QUARTERLY MARKET SHARE BASED ON AVERAGE DAILY VOLUME

Period ISE % AMEX % BOX % CBOE % NYSEArca % PHLX % NSDQ % 

Q1 06 .............................. 30.46 10.05 ▼ 5.04 ▼ 31.79 9.98 ▼ 12.68 ▼ n/a 

Q2 06 .............................. 29.05 ▼ 9.62 ▼ 4.92 ▼ 35.25 8.46 ▼ 12.70 n/a 

Q3 06 .............................. 29.59 9.66 4.64 ▼ 33.81 ▼ 9.29 13.01 n/a 

Q4 06 .............................. 27.86 ▼ 9.56 ▼ 4.07 ▼ 32.24 ▼ 10.96 15.30 n/a 

Q1 07 .............................. 27.76 ▼ 9.60 4.08 33.73 11.40 13.42 ▼ n/a 

Q2 07 .............................. 28.20 8.88 ▼ 4.32 33.92 10.81 ▼ 13.88 n/a 

Q3 07 .............................. 28.11 ▼ 8.02 ▼ 4.88 34.05 10.60 ▼ 14.34 n/a 

Q4 07 .............................. 28.25 7.49 ▼ 4.71 ▼ 30.77 ▼ 13.71 15.06 n/a 

Q1 08 .............................. 29.40 6.02 ▼ 4.66 ▼ 31.97 13.44 ▼ 14.50 ▼ n/a 

Q2 08 .............................. 28.79 ▼ 6.16 5.16 32.28 11.37 ▼ 15.61 0.63 

Q3 08 .............................. 27.55 ▼ 5.54 ▼ 4.87 ▼ 34.04 11.27 ▼ 15.50 ▼ 1.23 

Q4 08 .............................. 26.81 ▼ 5.46 ▼ 5.29 34.88 10.45 ▼ 15.51 1.60 

Despite the frequent variations in 

market share, no single exchange has 

more than approximately one-third the 

market share. Given the current 

competitive pressures in the options 

industry, no exchange can take any of 

its share of trading for granted. ‘‘Even 

the most dominant exchanges are 

subject to severe pressure in the current 

market environment.’’ 15 In order for ISE 

to maintain its market share, it must 

compete vigorously for order flow. 

Given the portability of order flow from 

one exchange to another, a pricing 

misstep can easily result in loss of order 

flow, customers and ultimately, 

revenue. 

Moreover, absent certain exclusively 

licensed monopolistic products, market 

participants have the ability to send 

their order to any of the seven options 

exchanges since nearly all underlying 

securities whose options are available 

for trading are offered at each of the 

seven exchanges. For example, of the 

more than 2,000 underlying securities 

whose options are traded on ISE, only 

41 products (two percent) are singlylisted on ISE, which collectively 

represents less than .02 percent of ISE’s 

total contract volume. Of those 41 

products, 16 are proprietary ISE index 

options, all of which are available for 

licensing by ISE to any other exchange; 

four are index products that ISE has 

non-exclusively licensed from index 

providers and which are available to 

other exchanges to license; 10 are 

Exchange Traded Funds that other 

exchanges have chosen not to list; and 

the remaining 11 products are equities 

that either the other exchanges have 

chosen not to list or are in the process 

of being de-listed and thus are available 

for closing only transactions on ISE. 

With regards to the 16 proprietary 

index options, ISE notes that they are 

traded exclusively on ISE not due to any 

type of monopoly control, but rather 

due to lack of interest by other 

exchanges. ISE further notes that when 

15798 Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Notices 

16 Id. at p. 64. 

17 15 U.S.C. 78f(b)(4). 

18 15 U.S.C. 78f(b)(5). 

19 15 U.S.C. 78f(b)(8). 

another exchange has shown interest in 

trading a proprietary ISE product, the 

Exchange has licensed the trading in 

that product to other exchanges. For 

example, NYSE Arca recently signed a 

license agreement with ISE to list and 

trade ISE’s foreign currency options and 

that ISE proprietary product is now 

multiply listed. Although this 

introduces competition for order flow, 

ISE believes options that are listed on 

multiple exchanges provide investors 

with better markets for execution and 

lower fees. It also tends to raise overall 

industry trading volume in the product. 

We are ready, willing, and able to 

license our proprietary index products 

for trading on other exchanges on 

commercially reasonable terms. 

The Exchange further notes that there 

are a number of alternative ‘‘non-core’’ 

products available to investors. The ISE 

Depth of Market does not provide a 

complete picture of the full market for 

options on a security. Rather, an 

investor has a number of different 

information sources to choose from in 

determining which exchange has the 

best market. The other exchanges, all of 

whom can produce their own depth of 

market products, as well independent 

distribution of order data by securities 

firms and data vendors, all pose a 

competitive threat. Moreover, the 

Exchange believes that the great 

majority of investors do not believe that 

it is necessary to purchase a depth-ofbook product. 

Currently, of nearly 200 firms that are 

members of the Exchange, less than 15 

percent currently access Depth of 

Market, which the Exchange is offering 

at no cost, pending approval of this 

proposed rule change. The lack of 

committed members affirms the 

Exchange’s view that Depth of Market, 

while it may serve a beneficial purpose 

and would be ‘nice to have’, does not 

contain information that is so critical 

that it would adversely impact trading 

decisions made by investors. Further, 

while Depth of Market is available to 

non-professional or ‘‘retail’’ subscribers, 

the Exchange, despite the low level of 

subscription by professional 

subscribers, believes that Depth of 

Market is primarily a product for market 

professionals, who have access to other 

sources of market data and will 

purchase Depth of Market only if they 

determine that the perceived benefits 

outweigh the costs. The Exchange 

believes the Commission concurs with 

this sentiment, when it said in the 

NYSE ArcaBook Approval Order, ‘‘the 

fact that 95% of the professional users 

of [Nasdaq] core data choose not to 

purchase the depth-of-book order data 

of a major exchange strongly suggests 

that no exchange has monopoly pricing 

power for its depth-of-book order 

data.’’ 16

In sum, the availability of alternative 

sources of information coupled with the 

Exchange’s critical need to attract order 

flow impose significant competitive 

pressure on ISE to act equitably, fairly, 

and reasonably in setting fees for Depth 

of Market. The introduction of this new 

market data offering is, in part, a 

response to that pressure. For the 

reasons cited above, the Exchange 

believes that the Depth of Market 

offering, including the proposed fees, is 

equitable, fair, reasonable and not 

unreasonably discriminatory. In 

addition, the Exchange believes that no 

substantial countervailing basis exists to 

support a finding that the proposed 

terms and fees for Depth of Market fails 

to meet the requirement of the Exchange 

Act. 

2. Statutory Basis 

The basis under the Exchange Act for 

this proposed rule change is the 

requirement under Section 6(b)(4),17

that an exchange have an equitable 

allocation of reasonable dues, fees and 

other charges among its members and 

other persons using its facilities; with 

Section 6(b)(5) 18 of the Act, which 

requires, among other things, that the 

rules of a national securities exchange 

be designed to promote just and 

equitable principles of trade, to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system and, in 

general, to protect investors and the 

public interest; and with Section 

6(b)(8) 19 of the Act, which requires that 

the rules of a national securities 

exchange not impose any burden on 

competition not necessary or 

appropriate in furtherance of the 

purposes of the Act. The Exchange 

developed and conducted a 

comprehensive survey of a cross-section 

of participants in the financial services 

industry regarding their level of interest 

in a number of proprietary ‘‘non-core’’ 

market data offerings. Based on the 

results of that survey, the Exchange 

developed a business plan to create and 

offer a number of proprietary market 

data products targeted to potential user 

groups, e.g., individual investors, 

institutional investors, broker-dealers, 

etc. The Exchange also retained a 

consultant to validate the business plan 

and to provide advice on the structure 

and amount of fees to charge for these 

products. Based on all of this 

information, the Exchange established a 

pricing structure for its Depth of Market 

offering for professional and nonprofessional subscribers. The Exchange 

believes the proposed rule filing 

provides market participants with 

added transparency to help improve 

trading efficiency. 

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 

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 self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve the 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. In 

particular, the Commission notes that 

unlike the market data fees approved by 

the Commission in the NYSE ArcaBook 

Approval Order, ISE’s fees would apply 

to securities that are traded only on ISE. 

Would the inclusion of data for such 

products in the ISE Depth of Market 

feed undermine a finding, consistent 

with the approach set forth in the NYSE 

ArcaBook Approval Order, that ISE was 

subject to significant competitive forces 

in setting the terms of its fee proposal 

for non-core data products? Should the 

Commission evaluate those singly-listed 

securities for which another exchange 

would be required to obtain a license to 

Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Notices 15799 

20 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. 59400 

(February 12, 2009), 74 FR 7945. 

4The Exchange has represented that fair 

representation candidates on the NYSE Board 

qualify as NYSE non-affiliated directors. 

5The Exchange has represented that fair 

representation candidates on the NYSE Market 

Board qualify as NYSE Market non-affiliated 

directors. 

trade differently than singly-listed 

securities that do not require a license? 

Does it matter whether any such 

required license must be obtained from 

ISE or a third party? ISE represents that 

it would license its proprietary index 

products to any other exchange on 

commercially reasonable terms. How 

should this representation be factored 

into the Commission’s evaluation? What 

impact, if any, would the trading 

volume represented by such singlylisted securities have on the analysis? 

Are there any factors with respect to 

singly-listed securities that would 

impact an analysis of whether ISE’s 

proposed fees are 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–2007–97 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. 

All submissions should refer to File 

Number SR–ISE–2007–97. 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, 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 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–2007–97 and should be 

submitted on or before April 28, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–7836 Filed 4–6–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59683; File No. SR–NYSE– 

2009–12] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Order 

Approving a Proposed Rule Change 

Amending Its Limited Liability 

Company Operating Agreement and 

the Bylaws of Its Wholly-Owned 

Subsidiary NYSE Market, Inc. To 

Eliminate, in Each Case, a 

Requirement That Not Less Than Two 

Members of the Board of Directors 

Must Qualify as ‘‘Non-Affiliated 

Directors’’ and a Related Requirement 

That Not Less Than Two Members of 

the Board of Directors Must Qualify as 

‘‘Fair Representation Candidates’’ 

April 1, 2009. 

I. Introduction 

On February 2, 2009, the New York 

Stock Exchange LLC (‘‘NYSE’’ or the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), 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 

amend: (i) its Second Amended and 

Restated Operating Agreement (‘‘NYSE 

Operating Agreement’’); and (ii) the 

bylaws of its wholly-owned subsidiary 

NYSE Market, Inc. (‘‘NYSE Market’’) 

(‘‘NYSE Market Bylaws’’), to eliminate 

the requirement that not less than two 

members of the board of directors of 

NYSE (‘‘NYSE Board’’) and of NYSE 

Market (‘‘NYSE Market Board’’), 

respectively, must qualify as ‘‘nonaffiliated directors’’ and the requirement 

that not less than two members of such 

boards must qualify as ‘‘fair 

representation candidates’’ (as each of 

those terms is defined in the NYSE 

Operating Agreement and NYSE Market 

Bylaws, respectively). The requirements 

that at least 20% of NYSE Board’s 

directors and NYSE Market Board’s 

directors must be ‘‘non-affiliated 

directors’’ and ‘‘fair representation 

candidates’’ would remain in place. The 

proposed rule change was published for 

comment in the Federal Register on 

February 20, 2009.3 The Commission 

received no comments on the proposal. 

II. Description of the Proposal 

The Exchange proposes that its parent 

company, NYSE Group, Inc., as the sole 

member of the Exchange, amend the 

NYSE Operating Agreement to eliminate 

the requirements that: (i) not less than 

two members of NYSE Board must be 

persons who are not members of the 

board of directors of NYSE Euronext 

(‘‘NYSE Euronext Board’’), and who 

qualify as independent under the 

independence policy of the NYSE 

Euronext Board (‘‘NYSE non-affiliated 

directors’’); and (ii) not less than two 

members of the NYSE Board must be 

‘‘fair representation candidates’’ (as 

defined in the NYSE Operating 

Agreement). In each case, however, the 

current requirements that a minimum of 

20% of NYSE Board’s directors must be 

NYSE non-affiliated directors and that a 

minimum of 20% of NYSE Board’s 

directors must be fair representation 

candidates would continue to apply.4

The Exchange also proposes that the 

Exchange, as the sole stockholder of 

NYSE Market, amend the NYSE Market 

Bylaws to eliminate the requirements 

that: (i) not less than two members of 

the NYSE Market Board must be persons 

who are not members of the NYSE 

Euronext Board, although such directors 

need not be independent (‘‘NYSE 

Market non-affiliated directors’’); and 

(ii) not less than two members of the 

NYSE Market Board must be ‘‘fair 

representation candidates’’ (as defined 

in the NYSE Market Bylaws). In each 

case, however, the current requirements 

that a minimum of 20% of NYSE Market 

Board’s directors must be NYSE Market 

non-affiliated directors and that a 

minimum of 20% of NYSE Market 

Board’s directors must be fair 

representation candidates would 

continue to apply.5

The Exchange also proposes to specify 

in the NYSE Operating Agreement and 

the NYSE Market Bylaws that, for 

purposes of calculating the minimum 

number of non-affiliated directors and