Document ID: SEC-2006-0511-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: International Securities Exchange, Inc.
Posted Date: 2006-04-19T04:00Z

[Federal Register: April 19, 2006 (Volume 71, Number 75)]
[Notices]               
[Page 20147-20148]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19ap06-146]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53634; File No. SR-ISE-2006-16]

 
Self-Regulatory Organizations; International Securities Exchange, 
Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change Relating to Regulatory Fees

April 12, 2006.
    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 April 3, 2006, the International Securities Exchange, Inc. (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. The Exchange has designated this proposal as one establishing 
or changing a due, fee, or other charge imposed by the Exchange under 
Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2) 
thereunder,\4\ which renders the proposal effective upon filing with 
the Commission. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The ISE is proposing to amend its Schedule of Fees to change its 
Regulatory Fees. The text of the proposed rule change is available at 
the Exchange, at the Commission's Public Reference Room, and at the 
Exchange's Web site: http://www.iseoptions.com/legal/proposed_rule_changes.asp
.

[[Page 20148]]

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 Exchange 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 currently charges a uniform regulatory fee of $3,500 on an 
annual basis to all its members regardless of whether they are a 
Primary Market Maker (``PMM''), a Competitive Market Maker (``CMM'') or 
an Electronic Access Member (``EAM''). The Exchange has determined that 
the cost of surveilling its members far exceeds the amount that is 
generated by the current fees. In order to partially bridge this gap, 
the Exchange proposes to increase these fees as follows: for PMMs, ISE 
proposes a fee of $7,500 for the first PMM membership; $1,500 for each 
additional PMM membership; and $1,000 for each CMM membership. For CMMs 
(who are not also PMMs), ISE proposes a fee of $5,000 for the first CMM 
membership and $1,000 for each additional CMM membership. Finally, for 
EAMs, ISE proposes a fee of $5,000 for each EAM membership. The 
Exchange estimates that its largest members will be impacted by a 
nominal increase in the range of $15,000-$18,000 per year. And while 
some members will be affected more than others, the Exchange believes 
the increase is justified as it enables ISE to partially recoup the 
expense incurred in fulfilling its regulatory responsibilities with 
respect to its members.
    Under the proposed fee change, the amount of the regulatory fee is 
tiered, depending on whether the member is a PMM, a CMM or an EAM. The 
reason for the tiered structure is that the resources dedicated to 
surveilling the activities of a member vary on the type of membership. 
For example, the Exchange has rules that apply to a PMM that do not 
apply to a CMM or an EAM. These rules necessitate surveillance 
activities. Generally, PMMs are subject to more rules than CMMs are and 
CMMs are subject to more rules than EAMs are. As such, the Exchange 
believes that a tiered fee system is the most equitable method of 
assessing these fees.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the requirements of Section 6(b)(4) of the Act \5\ which requires that 
an exchange have an equitable allocation of reasonable dues, fees and 
other charges among its members and other persons using its facilities. 
In particular, these fees would permit the Exchange to partially recoup 
the expense incurred in fulfilling its regulatory responsibilities with 
respect to its members.
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    \5\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that 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 rule change establishes or changes a due, 
fee, or other charge imposed by the Exchange, it has become effective 
pursuant to Section 19(b)(3)(A) of the Act \6\ and subparagraph (f)(2) 
of Rule 19b-4 \7\ thereunder. At any time within 60 days of the filing 
of the 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.\8\
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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(f)(2).
    \8\ Id.
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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 Comment

     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 Number SR-ISE-2006-16 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and
    Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. 
All submissions should refer to File No. SR-ISE-2006-16. 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. Copies of the 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 No. SR-
ISE-2006-16 and should be submitted on or before May 10, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary. 5
[FR Doc. E6-5794 Filed 4-18-06; 8:45 am]

BILLING CODE 8010-01-P