54682 Federal Register / Vol. 75, No. 173 / Wednesday, September 8, 2010 / Notices 

11 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3These fees are similar to the ‘‘maker/taker’’ fees 

currently assessed by NASDAQ OMX PHLX 

(‘‘PHLX’’). PHLX currently charges a fee for 

removing liquidity to the following class of market 

participants: (i) Customer, (ii) Directed Participant, 

(iii) Specialist, ROT, SQT and RSQT, (iv) Firm, (v) 

Broker-Dealer, and (vi) Professional. PHLX also 

provides a rebate for adding liquidity to the 

following class of market participants: (i) Customer, 

(ii) Directed Participant, (iii) Specialist, ROT, SQT 

and RSQT, and (iv) Professional. PHLX also charges 

a fee for adding liquidity to the following class of 

market participants: (i) Firm, and (ii) Broker-Dealer. 

See Securities Exchange Act Release Nos. 61684 

(March 10, 2010), 75 FR 13189 (March 18, 2010); 

61932 (April 16, 2010), 75 FR 21375 (April 23, 

2010); 61961 (April 22, 2010), 75 FR 22881 (April 

30, 2010); and 62472 (July 8, 2010), 75 FR 41250 

(July 15, 2010). 

4A Market Maker Plus is a market maker who is 

on the National Best Bid or National Best Offer 80% 

of the time for series trading between $0.03 and 

$5.00 (for options whose underlying stock’s 

previous trading day’s last sale price was less than 

or equal to $100) and between $0.10 and $5.00 (for 

options whose underlying stock’s previous trading 

day’s last sale price was greater than $100) in 

premium in each of the front two expiration months 

and 80% of the time for series trading between 

$0.03 and $5.00 (for options whose underlying 

stock’s previous trading day’s last sale price was 

less than or equal to $100) and between $0.10 and 

$5.00 (for options whose underlying stock’s 

previous trading day’s last sale price was greater 

than $100) in premium across all expiration months 

in order to receive the rebate. The Exchange 

determines whether a market maker qualifies as a 

Market Maker Plus at the end of each month by 

looking back at each market maker’s quoting 

statistics during that month. If at the end of the 

month, a market maker meets the Exchange’s stated 

criteria, the Exchange rebates $0.10 per contract for 

transactions executed by that market maker during 

that month. The Exchange provides market makers 

a report on a daily basis with quoting statistics so 

that market makers can determine whether or not 

they are meeting the Exchange’s stated criteria. 

5A Non-ISE Market Maker, or Far Away Market 

Maker (‘‘FARMM’’), is a market maker as defined in 

Section 3(a)(38) of the Securities Exchange Act of 

1934, as amended (‘‘Exchange Act’’), registered in 

the same options class on another options 

exchange. 

6A Customer (Professional) is a person who is not 

a broker/dealer and is not a Priority Customer. 

7A Priority Customer is defined in ISE Rule 

100(a)(37A) as a person or entity that is not a 

broker/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(s). 

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–NSCC–2010–08. 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 website viewing and 

printing in the Commission’s Public 

Reference Section, 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 filings 

also will be available for inspection and 

copying at the principal office of NSCC 

and on NSCC’s Web site, http:// 

www.dtcc.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–NSCC– 

2010–08 and should be submitted on or 

before September 29, 2010. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–22349 Filed 9–7–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62805; File No. SR–ISE– 

2010–90] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change Relating to Fees and Rebates 

for Adding and Removing Liquidity 

August 31, 2010. 

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 August 

24, 2010, 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 and 

II 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 

transaction fees and rebates for adding 

and removing liquidity. 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, at the Commission’s 

Public Reference Room, and on the 

Commission’s Web site at http:// 

www.sec.gov. 

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 Exchange proposes to increase 

liquidity and attract order flow by 

amending its transaction fees and 

rebates for adding and removing 

liquidity (‘‘maker/taker fees’’).3 The 

Exchange’s maker/taker fees currently 

apply to the following categories of 

market participants: (i) Market Maker; 

(ii) Market Maker Plus; 4 (iii) Non-ISE 

Market Maker; 5 (iv) Firm Proprietary; 

(v) Customer (Professional); 6 (vi) 

Priority Customer,7 100 or more 


jlentini on DSKJ8SOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 173 / Wednesday, September 8, 2010 / Notices 54683 

8The Chicago Board Options Exchange (‘‘CBOE’’) 

currently makes a similar distinction between large 

size customer orders that are fee liable and small 

size customer orders whose fees are waived. CBOE 

currently waives fees for customer orders of 99 

contracts or less in options on exchange-traded 

funds (‘‘ETFs’’) and Holding Company Depositary 

Receipts (‘‘HOLDRs’’) and charges a transaction fee 

for customer orders that exceed 99 contracts. See 

Securities Exchange Act Release No. 59892 (May 8, 

2009), 74 FR 22790 (May 14, 2009). 

9Although these options classes will no longer be 

subject to the tiered market maker transaction fees, 

the volume from these options classes will continue 

to be used in the calculation of the tiers so that this 

new pricing does not affect a market maker’s fee in 

all other names. 

10The concept of incenting market makers with 

a rebate is not novel. In 2008, the CBOE established 

a program for its Hybrid Agency Liaison whereby 

it provides a $0.20 per contract rebate to its market 

makers provided that at least 80% of the market 

maker’s quotes in a class during a month are on one 

side of the national best bid or offer. Market makers 

not meeting CBOE’s criteria are not eligible to 

receive a rebate. See Securities Exchange Act 

Release No. 57231 (January 30, 2008), 73 FR 6752 

(February 5, 2008). The CBOE has since lowered the 

criteria from 80% to 60%. See Securities Exchange 

Act Release No. 57470 (March 11, 2008), 73 FR 

14514 (March 18, 2008). 

contracts; and (vii) Priority Customer, 

less than 100 contracts.8

Current Transaction Charges for Adding 

and Removing Liquidity 

The Exchange currently assesses a per 

contract transaction charge to market 

participants that remove, or ‘‘take,’’ 

liquidity from the Exchange in the 

following options classes: PowerShares 

QQQ trust (‘‘QQQQ’’), Bank of America 

Corporation (‘‘BAC’’), Citigroup, Inc. 

(‘‘C’’), Standard and Poor’s Depositary 

Receipts/SPDRs (‘‘SPY’’), iShares Russell 

2000 (‘‘IWM’’), Financial Select Sector 

SPDR (‘‘XLF’’), Apple, Inc. (‘‘AAPL’’), 

General Electric Company (‘‘GE’’), 

JPMorgan Chase & Co. (‘‘JPM’’), Intel 

Corporation (‘‘INTC’’), Goldman Sachs 

Group, Inc. (‘‘GS’’), Research in Motion 

Limited (‘‘RIMM’’), AT&T, Inc. (‘‘T’’), 

Verizon Communications, Inc. (‘‘VZ’’), 

United States Natural Gas Fund 

(‘‘UNG’’), Freeport-McMoRan Copper & 

Gold, Inc. (‘‘FCX’’), Cisco Systems, Inc. 

(‘‘CSCO’’), Diamonds Trust, Series 1 

(‘‘DIA’’), Amazon.com, Inc. (‘‘AMZN’’), 

United States Steel Corporation (‘‘X’’), 

Alcoa Inc. (‘‘AA’’), American 

International Group, Inc. (‘‘AIG’’), 

American Express Company (‘‘AXP’’), 

Best Buy Company (‘‘BBY’’), Caterpillar, 

Inc. (‘‘CAT’’), Chesapeake Energy 

Corporation (‘‘CHK’’), Dendreon 

Corporation (‘‘DNDN’’), iShares MSCI 

Emerging Markets Index Fund (‘‘EEM’’), 

iShares MSCI EAFE Index Fund 

(‘‘EFA’’), iShares MSCI Brazil Index 

Fund (‘‘EWZ’’), Ford Motor Company 

(‘‘F’’), Direxion Shares Financial Bull 

(‘‘FAS’’), Direxion Shares Financial Bear 

(‘‘FAZ’’), First Solar, Inc. (‘‘FSLR’’), 

Market Vectors ETF Gold Miners 

(‘‘GDX’’), SPDR Gold Trust (‘‘GLD’’), 

iShares DJ US Real Estate Index Fund 

(‘‘IYR’’), MGM Mirage (‘‘MGM’’), Morgan 

Stanley (‘‘MS’’), Microsoft Corporation 

(‘‘MSFT’’), Micron Technology, Inc. 

(‘‘MU’’), Petroleo Brasileiro S.A. (‘‘PBR’’), 

The Procter & Gamble Company (‘‘PG’’), 

Potash Corporation of Saskatchewan 

(‘‘POT’’), Transocean Ltd. (‘‘RIG’’), 

ProShares UltraShort S&P 500 (‘‘SDS’’), 

iShares Silver Trust (‘‘SLV’’), Energy 

Select Sector SPDR Fund (‘‘XLE’’), 

Exxon Mobil Corporation (‘‘XOM’’), 

Barrick Gold Corporation (‘‘ABX’’), 

Bristol-Myers Squibb Company 

(‘‘BMY’’), BP p.l.c. (‘‘BP’’), 

ConocoPhillips (‘‘COP’’), Dell Computer 

Corporation (‘‘DELL’’), Dryships Inc. 

(‘‘DRYS’’), iShares Trust FTSE/Xinhua 

China 25 Index Fund (‘‘FXI’’), 

Halliburton Company (‘‘HAL’’), 

International Business Machines 

Corporation (‘‘IBM’’), The Coca-Cola 

Company (‘‘KO’’), Las Vegas Sands Corp. 

(‘‘LVS’’), McDonald’s Corporation 

(‘‘MCD’’), Altria Group Inc. (‘‘MO’’), 

Monsanto Company (‘‘MON’’), Nokia Oyj 

(‘‘NOK’’), Oracle Corporation (‘‘ORCL’’), 

Pfizer Inc. (‘‘PFE’’), QUALCOMM Inc 

(‘‘QCOM’’), Sprint Corporation (‘‘S’’), 

Schlumberger Limited (‘‘SLB’’), 

Semiconductor HOLDRs Trust (‘‘SMH’’), 

SanDisk Corporation (‘‘SNDK’’), 

Proshares Ultrashort Lehman (‘‘TBT’’), 

United States Oil Fund (‘‘USO’’), Visa 

Inc (‘‘V’’), Companhia Vale Do Rio Doce 

(‘‘VALE’’), Weatherford International 

Inc. (‘‘WFT’’), Industrial Select Sector 

SPDR (‘‘XLI’’), SPDR S&P Retail ETF 

(‘‘XRT’’), and Yahoo! Inc. (‘‘YHOO’’) (the 

‘‘Select Symbols’’). The per contract 

transaction charge depends on the 

category of market participant 

submitting an order or quote to the 

Exchange that removes liquidity.9

Priority Customer Complex orders, 

regardless of size, are not assessed a fee 

for removing liquidity. 

The Exchange also currently assesses 

transaction charges for adding liquidity 

in options on the Select Symbols. 

Priority Customer orders, regardless of 

size, and Market Maker Plus orders are 

not assessed a fee for adding liquidity. 

Current Rebates 

In order to promote and encourage 

liquidity in options classes that are 

subject to maker/taker fees, the 

Exchange currently offers a $0.10 per 

contract rebate for Market Maker Plus 

orders sent to the Exchange.10 Further, 

in order to incentivize members to 

direct retail orders to the Exchange, 

Priority Customer Complex orders, 

regardless of size, currently receive a 

rebate of $0.20 per contract on all legs 

when these orders trade with noncustomer orders in the Exchange’s 

Complex Orderbook. Additionally, the 

Exchange’s Facilitation Mechanism has 

an auction which allows for 

participation in a trade by members 

other than the member who entered the 

trade. To incentivize members, the 

Exchange currently offers a rebate of 

$0.15 per contract to contracts that do 

not trade with the contra order in the 

Facilitation Mechanism. This rebate is 

also offered to contracts that do not 

trade with the contra order in the Price 

Improvement Mechanism. 

Fee Changes 

The Exchange proposes to remove the 

following options class from the 

Exchange’s maker/taker fee schedule: 

DRYS. 

The Exchange also proposes to add 

the following options classes to the 

Exchange’s maker/taker fee schedule: 

Akamai Technologies (‘‘AKAM’’), 

Advanced Micro Devices Inc. (‘‘AMD’’), 

AMR Corporation (‘‘AMR’’), Anadarko 

Petroleum Corporation (‘‘APC’’), The 

Boeing Company (‘‘BA’’), Baidu Inc. 

(‘‘BIDU’’), Broadcom Corporation 

(‘‘BRCM’’), Goldcorp Inc. (‘‘GG’’), 

Hewlett-Packard Company (‘‘HPQ’’), US 

Airways Group Inc. (‘‘LCC’’), Motorola 

Inc. (‘‘MOT’’), Newmont Mining 

Corporation (‘‘NEM’’), NetFlix Inc. 

(‘‘NFLX’’), NVIDIA Corporation 

(‘‘NVDA’’), ProShares UltraShort QQQ 

(‘‘QID’’), ProShares Ultra S&P 500 

(‘‘SSO’’), Teva Pharmaceutical Industries 

Ltd. (‘‘TEVA’’), iShares Lehman Brothers 

20+ year Treasury Bond Index ETF 

(‘‘TLT’’), Direxion Small Cap Bear 3X 

(‘‘TZA’’), UAL Corp. (‘‘UAUA’’), Wells 

Fargo & Company (‘‘WFC’’) and 

Materials Select Sector SPDR (‘‘XLB’’) 

(the ‘‘Additional Select Symbols’’). 

Other Fees 

• Fees for orders executed in the 

Exchange’s Facilitation, Solicited Order, 

Price Improvement and Block Order 

Mechanisms are for contracts that are 

part of the originating or contra order. 

• Complex orders executed in the 

Facilitation and Solicited Order 

Mechanisms are charged fees only for 

the leg of the trade consisting of the 

most contracts. 

• ISE Market Makers who remove 

liquidity in the Select Symbols and the 

Additional Select Symbols from the 

Complex Order Book by trading with 

orders that are preferenced to them are 

charged $0.25 per contract. 

• Payment for Order Flow fees will 

not be collected on transactions in 


jlentini on DSKJ8SOYB1PROD with NOTICES
54684 Federal Register / Vol. 75, No. 173 / Wednesday, September 8, 2010 / Notices 

11 ISE currently has a payment-for-order-flow 

(‘‘PFOF’’) program that helps the Exchange’s market 

makers establish PFOF arrangements with an 

Electronic Access Member (‘‘EAM’’) in exchange for 

that EAM preferencing some or all of its order flow 

to that market maker. This program is funded 

through a fee paid by Exchange market makers for 

each customer contract they execute, and is 

administered by both Primary Market Makers 

(‘‘PMM’’) and Competitive Market Makers (‘‘CMM’’), 

depending to whom the order is preferenced. 

12The Exchange assesses a Cancellation Fee of 

$2.00 to EAMs that cancel at least 500 orders in a 

month, for each order cancellation in excess of the 

total number of orders such member executed that 

month. All orders from the same clearing EAM 

executed in the same underlying symbol at the 

same price within a 300 second period are 

aggregated and counted as one executed order for 

purposes of this fee. This fee is charged only to 

customer orders. 

13See Securities Exchange Act Release No. 61731 

(March 18, 2010), 75 FR 14233 (March 24, 2010). 

14See Securities Exchange Act Release No. 60817 

(October 13, 2009), 74 FR 54111 (October 21, 2009). 

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

16 17 CFR 240.19b–4(f)(2). 

options overlying the Select Symbols 

and the Additional Select Symbols.11

• The Cancellation Fee will continue 

to apply to options overlying the Select 

Symbols and the Additional Select 

Symbols.12

• The Exchange has a $0.20 per 

contract fee credit for members who, 

pursuant to Supplementary Material .02 

to Rule 803, execute a transaction in the 

Exchange’s flash auction as a response 

to orders from persons who are not 

broker/dealers and who are not Priority 

Customers.13 For options overlying the 

Select Symbols and the Additional 

Select Symbols, the Exchange provides 

a $0.10 per contract fee credit for 

members who execute a transaction in 

the Exchange’s flash auction as a 

response to orders from persons who are 

not broker/dealers and who are not 

Priority Customers. 

• The Exchange has a $0.20 per 

contract fee for market maker orders 

sent to the Exchange by EAMs.14 Market 

maker orders sent to the Exchange by 

EAMs will be assessed a fee of $0.25 per 

contract for removing liquidity in 

options overlying the Select Symbols 

and the Additional Select Symbols and 

$0.10 per contract for adding liquidity 

in options overlying the Select Symbols 

and the Additional Select Symbols. 

The Exchange has designated this 

proposal to be operative on September 

1, 2010. 

2. Statutory Basis 

The basis under 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. The 

impact of the proposal upon the net fees 

paid by a particular market participant 

will depend on a number of variables, 

most important of which will be its 

propensity to add or remove liquidity in 

options overlying the Select Symbols 

and the Additional Select Symbols. The 

Exchange operates in a highly 

competitive market in which market 

participants can readily direct order 

flow to another exchange if they deem 

fee levels at a particular exchange to be 

excessive. The Exchange believes that 

the proposed fees it charges for options 

overlying the Select Symbols and the 

Additional Select Symbols remain 

competitive with fees charged by other 

exchanges and therefore continue to be 

reasonable and equitably allocated to 

those members that opt to direct orders 

to the Exchange rather than to a 

competing exchange. Additionally, the 

Exchange believes that the addition and 

removal of option classes that are 

subject to the Exchange’s maker/taker 

fees is both equitable and reasonable 

because those fees apply to all 

categories of participants in the same 

manner. The Exchange’s maker/taker 

fees, which are currently applicable to 

each market participant, will continue 

to apply to the Select Symbols and the 

Additional Select Symbols. 

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 15 and Rule 19b–4(f)(2) 16

thereunder. 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 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–2010–90 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–ISE–2010–90. 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 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 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 

publicly available. All submissions 

should refer to File Number SR–ISE– 

2010–90 and should be submitted on or 

before September 29, 2010. 


jlentini on DSKJ8SOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 173 / Wednesday, September 8, 2010 / Notices 54685 

17 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities and Exchange Act Release No. 

34–56941 (December 11, 2007). 

4See Securities and Exchange Act Release No. 

34–57649 (April 11, 2008). 

5See Securities and Exchange Act Release No. 

34–58765 (October 9, 2008). 

6 15 U.S.C. 78f(b). 

7 15 U.S.C. 78f(b)(5). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–22290 Filed 9–7–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62817; File No. SR–ISE– 

2010–92] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change To Amend the Exchange’s 

MRVP 

September 1, 2010. 

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 August 

26, 2010, the International Securities 

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

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 Exchange proposes to amend ISE 

Rule 1614 (Imposition of Fines for 

Minor Rule Violations) to incorporate a 

violation of ISE Rule 415 (Reports 

Related to Position Limits) into the 

Minor Rule Violation Plan. 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 

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 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of the proposed rule 

change is to amend ISE Rule 1614 to 

incorporate violations for failing to 

accurately report position and account 

information in accordance with ISE 

Rule 415 into the Minor Rule Violation 

Plan. The Exchange believes most of 

these violations are inadvertent and 

technical in nature. Processing routine 

violations under the Minor Rule 

Violation Plan would decrease the 

administrative burden of regulatory and 

enforcement staff as well as that of the 

Business Conduct Committee. In 

addition, staff would be able to more 

expeditiously process routine violations 

under the Minor Rule Violation Plan. 

ISE is proposing to assess a $500 fine 

for a first offense, a $1,000 fine for a 

second offense and a $2,500 fine for a 

third offense. Any subsequent offenses 

would be assessed a $5,000 fine. The 

number of offenses will be calculated on 

a rolling twenty-four month period. ISE 

believes that establishing a rolling 

twenty-four month period for 

cumulative violations will serve as an 

effective deterrent to future violative 

conduct. As with other violations 

covered under the Exchange’s Minor 

Rule Violation Plan, any egregious 

activity may be referred to the 

Exchange’s Business Conduct 

Committee. 

Among other things, ISE Rule 415 

requires each member to report to the 

Exchange the account and position 

information of any customer who, acting 

alone, or in concert with others, on the 

previous business day maintained 

aggregate long or short positions on the 

same side of the market of 200 or more 

contracts of any single class of option 

contracts dealt in on the Exchange. 

Members report this information on the 

Large Option Position Report. ISE, as a 

member of the Intermarket Surveillance 

Group (the ‘‘ISG’’), as well as certain 

other self-regulatory organizations 

(‘‘SROs’’) executed and filed on October 

29, 2007 with the Commission, a final 

version of the Agreement pursuant to 

Section 17(d) of the Act (the 

‘‘Agreement’’) 3 and as amended on April 

11, 2008 4 and October 9, 2008.5 The 

participants to the Agreement 

incorporated the surveillance and 

sanctions of large options position 

reporting violations into the Agreement 

as of November 1, 2008. As such, the 

SROs have agreed that their respective 

rules concerning the reporting of large 

options positions are common rules. As 

a result, this amendment to the Minor 

Rule Violation Plan will further result in 

the consistency of the sanctions among 

the SROs who are signatories to the 

Agreement with respect to regulatory 

actions arising from large option 

position reporting surveillance. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act 6 in general, and 

furthers the objectives of Section 6(b)(5) 

of the Act 7 in particular, because it is 

designed to prevent fraudulent and 

manipulative acts and practices, and 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, 

allowing the Exchange to have 

consistency between its Minor Rule 

Violation Plan and the Minor Rule 

Violation Plan of other SROs. 

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 

Because the foregoing proposed rule 

change does not significantly affect the 

protection of investors or the public 

interest, does not impose any significant 

burden on competition, and, by its 

terms, does not become operative for 30 


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