5826 Federal Register / Vol. 75, No. 23 / Thursday, February 4, 2010 / Notices 

9The text of the proposed rule change is available 

on ISE’s Web site at http://www.ise.com, on the 

Commission’s Web site at http://www.sec.gov, at 

ISE, and at the Commission’s Public Reference 

Room. 

10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Amendment No. 2 deleted a sentence in the 

purpose section of the filing and in Exhibit 1. 

4See Exchange Act Release No. 59287 (Jan. 23, 

2009), 74 FR 5694 (Jan. 30, 2009). 

submission,9 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 the filing also will be available 

for inspection and copying at the 

principal office of the 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 

Number SR–ISE–2010–04 and should be 

submitted on or before February 25, 

2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–2333 Filed 2–3–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61434; File No. SR–ISE– 

2010–06] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change, as Modified by Amendment 

No. 2 Thereto, Relating to Fee Changes 

January 27, 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 January 

14, 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, II, 

and III below, which items have been 

prepared by the self-regulatory 

organization. On January 27, 2010, ISE 

filed Amendment No. 1 to the proposed 

rule change. On January 27, 2010, ISE 

withdrew Amendment No. 1 and filed 

Amendment No. 2 to the proposed rule 

change.3 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. The text of the 

proposed rule change is available on the 

Exchange’s Web site (http:// 

www.ise.com), at the principal office of 

the Exchange, and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of these statements may be examined at 

the places specified in Item IV below. 

The self-regulatory organization has 

prepared summaries, set forth in 

sections A, B and C below, of the most 

significant aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

ISE proposes to amend its Schedule of 

Fees. Specifically, the Exchange 

proposes to adopt a $0.20 per contract 

execution fee for professional customers 

who execute orders as a result of posting 

liquidity to ISE’s order book. 

ISE recently adopted a rule change to 

distinguish between Priority Customer 

Orders and Professional Orders.4 A 

Priority Customer is defined in ISE Rule 

100(a)(37A) as a person or entity that is 

not a broker or 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). A Professional Order is 

defined in ISE Rule 100(a)(37C) as an 

order that is for the account of a person 

or entity that is not a Priority Customer. 

For purpose of this discussion, 

‘‘professional customers’’ are nonbroker/dealer participants who enter at 

least 390 orders per day on average 

during a calendar month for their own 

beneficial account(s). The level of 

trading activity by professional 

customers more resembles that of 

market makers and proprietary traders 

on the Exchange than it does of other 

customers. 

Currently, the primary distinction 

between the two types of customers is 

that Priority Customers take priority on 

the order book over professional 

customers. Professional customers are 

on parity with market makers and 

broker/dealers. However, professional 

customers generally do not pay 

transaction fees. Market makers and 

broker/dealers on the other hand pay 

transaction fees to the Exchange. 

Specifically, for market makers, the 

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. 

Broker/dealer orders pay a flat 

execution fee of $0.20 per traded 

contract, regardless of whether they post 

liquidity to or take liquidity from ISE’s 

order book when they enter orders. 

Broker/dealer fees are posted on the 

Exchange’s fee schedule under the Firm 

Proprietary line item. 

The Exchange now proposes to adopt 

a $0.20 per contract execution fee for 

professional customers who execute 

orders as a result of posting liquidity to 

ISE’s order book. The proposed fee 

applies only to professional customer 

orders, i.e., non-broker/dealer customer 

orders; it does not apply to market 

maker and broker/dealer orders who, as 

noted above, already pay transaction 

fees. 

As discussed, professional customers 

engage in trading activity similar to that 

conducted by market makers and 

proprietary traders. For example, 

professional customers continue to join 

bids and offers on the Exchange and 

thus compete for incoming order flow. 

Professional customers do so in direct 

competition with ISE’s market makers, 

but with the distinct advantage of 

generally not paying transaction fees to 

the Exchange. ISE believes that adopting 

a ‘‘maker fee’’ for professional customers 

will put these market participants on a 

more equal footing with market makers 

and proprietary traders regarding fees 

paid for transacting on the Exchange. 

The Exchange further notes that the 

proposed fees, while comparable to fees 

currently paid by broker/dealer orders, 

are less than those fees as the Exchange 

is only proposing to charge professional 

customers who execute orders as a 

result of posting liquidity to ISE’s order 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 75, No. 23 / Thursday, February 4, 2010 / Notices 5827 

5 15 U.S.C. 78f. 

6 15 U.S.C. 78f(b)(4). 

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

8 17 CFR 19b–4(f)(2). 

9The Commission considers the 60-day period 

within which the Commission may summarily 

abrogate the proposal pursuant to Section 

19(b)(3)(C) of the Act, 15 U.S.C. 78s(b)(3)(C), to 

commence on January 27, 2010, the date ISE filed 

Amendment No. 2 to the proposal. 

10The text of the proposed rule change is 

available on ISE’s Web site at http://www.ise.com, 

on the Commission’s Web site at http:// 

www.sec.gov, at ISE, and at the Commission’s 

Public Reference Room. 

11 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

book. The Exchange is not currently 

proposing to charge professional 

customers a fee for taking liquidity from 

ISE’s order book. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the objectives of Section 6 of the 

Exchange Act,5 in general, and furthers 

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

proposed rule change will help equalize 

competition between market makers, 

proprietary traders and professional 

customers on the Exchange. 

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 7 and Rule 19b–4(f)(2) 8

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.9

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–2010–06 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–2010–06. 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,10 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 10:00 am and 3 

p.m. Copies of the filing also will be 

available for inspection and copying at 

the principal office of the 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 

Number SR–ISE–2010–06 and should be 

submitted on or before February 25, 

2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–2334 Filed 2–3–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61438; File No. SR–Phlx– 

2010–13] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NASDAQ 

OMX PHLX, Inc. Relating To Amending 

Rule 1092, Obvious Errors and 

Catastrophic Errors 

January 28, 2010. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on January 

26, 2010, NASDAQ OMX PHLX, Inc. 

(‘‘Phlx’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘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 

Exchange Rule 1092, Obvious Errors 

and Catastrophic Errors, to adopt the 

ability to review transactions on the 

Exchange’s own motion. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://www.nasdaqtrader.com/ 

micro.aspx?id=PHLXRulefilings, 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 


srobinson on DSKHWCL6B1PROD with NOTICES