Document ID: SEC-2009-0774-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Order Granting Accelerated Approval to a Proposed Rule Change Relating to the Amounts That Direct Edge ECN, in Its Capacity as an Introducing Broker for Non-ISE Members, Passes Through to Such Non-ISE Members
Posted Date: 2009-06-09T04:00Z

[Federal Register: June 9, 2009 (Volume 74, Number 109)]
[Notices]
[Page 27373-27374]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09jn09-154]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60030; File No. SR-ISE-2009-31]

Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Order Granting Accelerated Approval to a
Proposed Rule Change Relating to the Amounts That Direct Edge ECN, in
Its Capacity as an Introducing Broker for Non-ISE Members, Passes
Through to Such Non-ISE Members

June 3, 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 June 1, 2009, the International Securities Exchange, LLC (the
``Exchange'' or the ``ISE'') filed with the Securities and Exchange
Commission (``Commission'') the proposed rule change. The proposed rule
change is described in Items I and II below, which Items have been
prepared by ISE. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons, and is
approving the proposal on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to modify the amounts that Direct Edge ECN
(``DECN''), in its capacity as an introducing broker for non-ISE
Members, passes through to such non-ISE Members.
    The text of the proposed rule change is available on the Exchange's
Internet Web site at 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 III 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
    DECN, a facility of ISE, operates two trading platforms, EDGX and
EDGA. On May 29, 2009, the ISE filed for immediate effectiveness a
proposed rule change to amend DECN's fee schedule for ISE Members \3\
to increase the per share rebate in securities priced at or above a
$1.00 that are reported to Tape A and Tape C from $0.0025 to $0.003 for
orders that add liquidity on EDGX.\4\ In SR-ISE-2009-29, the Exchange
also increased the fee for orders that remove liquidity on EDGX from
$0.0026 to $0.0028. The fee changes made pursuant to SR-ISE-2009-29
became operative on June 1, 2009.
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    \3\ References to ISE Members in this filing refer to DECN
Subscribers who are ISE Members.
    \4\ See SR-ISE-2009-29.
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    In its capacity as a member of ISE, DECN currently serves as an
introducing broker for the non-ISE Member subscribers of DECN to access
EDGX and EDGA. DECN, as an ISE Member and introducing broker, receives
rebates and is assessed charges from DECN for transactions it executes
on EDGX or EDGA in its capacity as introducing broker for non-ISE
Members. Since the amounts of such rebates and charges were changed
pursuant to SR-ISE-2009-29, DECN wishes to make corresponding changes
to the amounts it passes through to non-ISE Member subscribers of DECN
for which it acts as introducing broker. As a result, the per share
amounts that non-ISE Member subscribers receive and are charged will be
the same as the amounts that ISE Members receive and are charged.
    ISE is seeking accelerated approval of this proposed rule change,
as well as a retroactive effective date of June 1, 2009. ISE represents
that this proposal will ensure that both ISE Members and non-ISE
Members (by virtue of the pass-through described above) will in effect
receive and be charged equivalent amounts and that the imposition of
such amounts will begin on the same June 1, 2009 start date.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the objectives of Section 6 of the 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, this proposal will ensure that dues,
fees and other charges imposed on ISE Members are equitably allocated
to both ISE Members and non-ISE Members (by virtue of the pass-through
described above).
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    \5\ 15 U.S.C. 78f.
    \6\ 15 U.S.C. 78f(b)(4).
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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. 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 rule-comments@sec.gov. Please include
File No. SR-ISE-2009-31 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.

[[Page 27374]]

All submissions should refer to File Number SR-ISE-2009-31. 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 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-2009-31 and should be
submitted on or before June 30, 2009.

IV. Commission's Findings and Order Granting Accelerated Approval of
Proposed Rule Change

    The Commission finds that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to a national securities exchange.\7\
Specifically, the Commission finds that the proposed rule change is
consistent with Section 6(b)(4),\8\ of the Act, which requires that the
rules of a national securities exchange provide for the equitable
allocation of reasonable dues, fees and other charges among members and
issuers and other persons using any facilities.
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    \7\ In approving this proposal, the Commission has considered
its impact on efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
    \8\ 15 U.S.C. 78f(b)(4).
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    ISE recently amended DECN's fee schedule for ISE Members to
increase the per share rebate in securities priced at or above a $1.00
that are reported to Tape A and Tape C from $0.0025 to $0.003 for
orders that add liquidity on EDGX, and also increased the fee for
orders that remove liquidity on EDGX from $0.0026 to $0.0028 per
share.\9\ The fee changes made pursuant to SR-ISE-2009-29 became
operative on June 1, 2009. DECN receives rebates and is charged fees
for transactions it executes on EGDX or EDGA in its capacity as an
introducing broker for its non-ISE member subscribers.
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    \9\ See Securities Exchange Act Release No. 60031 (June 3, 2009)
(notice of filing and immediate effectiveness of File No. SR-ISE-
2009-29) (the ``Member Fee Filing'').
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    The current proposal, which will apply retroactively to June 1,
2009, will allow DECN to pass through the revised rebates and fees to
the non-ISE member subscribers for which it acts an introducing broker.
The Commission finds that the proposal is consistent with the Act
because it will provide rebates and charge fees to non-ISE member
subscribers that are equivalent to those established for ISE member
subscribers in the Member Fee Filing.\10\
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    \10\ See note 9, supra.
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    ISE has requested that the Commission find good cause for approving
the proposed rule change prior to the thirtieth day after publication
of notice in the Federal Register. As discussed above, the proposal
will allow DECN to pass through to non-ISE member subscribers the
revised rebate and fees established for ISE member subscribers in the
Member Fee Filing, resulting in equivalent rebates and fees for ISE
member and non-member subscribers. In addition, because the proposal
will apply the revised rebates and fees retroactively to June 1, 2009,
the revised rebates and fees will have the same effective date, thereby
promoting consistency in the DECN's fee schedule. Accordingly, the
Commission finds good cause, pursuant to Section 19(b)(2) of the Act
for approving the proposed rule change prior to the thirtieth day after
the date of publication of notice thereof in the Federal Register.

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\11\ that the proposed rule change (SR-ISE-2009-31) be, and hereby
is, approved on an accelerated basis.
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    \11\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-13402 Filed 6-8-09; 8:45 am]

BILLING CODE 8010-01-P