Document ID: SEC-2009-1214-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Fee Changes
Posted Date: 2009-08-26T04:00Z

[Federal Register: August 26, 2009 (Volume 74, Number 164)]
[Notices]               
[Page 43194-43196]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26au09-130]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60537; File No. SR-ISE-2009-63]

 
Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change Relating to Fee Changes

August 19, 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 August 7, 2009, the 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 self-
regulatory organization. The Commission is publishing this notice to

[[Page 43195]]

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.
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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 establish 
fees for transactions in options on a narrow based index. 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--The Exchange is proposing to amend its Schedule of Fees 
to establish fees for transactions in options on the Morgan Stanley 
Retail Index (``MVR'').\3\ The Exchange is proposing to adopt an 
execution fee for all transactions in options on MVR.\4\ There will be 
no execution fee for Public Customer Orders \5\ in MVR. All Firm 
Proprietary orders will be charged $0.20 per contract. The amount of 
the execution fee for all ISE Market Maker transactions shall be equal 
to the execution fee currently charged by the Exchange for ISE Market 
Maker transactions in equity options.\6\ Finally, the amount of the 
execution fee for all non-ISE Market Maker transactions shall be $0.45 
per contract.\7\
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    \3\ The Exchange represents that MVR is eligible for options 
trading because it meets the standards of ISE Rule 2002(d), which 
allows the ISE to begin trading this product by filing Form 19b-4(e) 
at least [sic] five business days after commencement of trading 
pursuant to Rule 19b-4(e) of the Act.
    \4\ These fees will be charged only to Exchange members. Under a 
pilot program that is set to expire on July 31, 2010, these fees 
will also be charged to Linkage Principal Orders (``Linkage P 
Orders'') and Linkage Principal Acting as Agent Orders (``Linkage P/
A Orders''). The amount of the execution fee charged by the Exchange 
for Linkage P Orders and Linkage P/A Orders is $0.27 per contract 
side and $0.18 per contract side, respectively. See Securities 
Exchange Act Release No. 60175 (June 25, 2009), 74 FR 32026 (July 6, 
2009) (SR-ISE-2009-36).
    \5\ Public Customer Order is defined in Exchange Rule 100(a)(39) 
as an order for the account of a Public Customer. Public Customer is 
defined in Exchange Rule 100(a)(38) as a person or entity that is 
not a broker or dealer in securities.
    \6\ 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.
    \7\ The amount of the execution fee for non-ISE Market Maker 
transactions executed in the Exchange's Facilitation and 
Solicitation Mechanisms is $0.19 [sic] per contract.
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    Additionally, the Exchange has entered into a license agreement 
with Morgan Stanley & Co., Inc. in connection with the listing and 
trading of options on MVR. As with certain other licensed options, to 
defray the licensing costs, the Exchange is adopting a surcharge fee of 
fifteen (15) cents per contract for trading in options on MVR. The 
Exchange believes charging the participants that trade this instrument 
is the most equitable means of recovering the costs of the license. 
However, because of competitive pressures in the industry, the Exchange 
proposes to exclude Public Customer Orders from this surcharge fee. 
Accordingly, this surcharge fee will only be charged to Exchange 
members with respect to non-Public Customer Orders (e.g., ISE Market 
Maker, non-ISE Market Maker & Firm Proprietary orders) and Linkage 
Orders. The Exchange believes the proposed rule change will further 
ISE's goal of introducing new products to the marketplace at a 
competitive price.
    2. Basis--The Exchange believes that the proposed rule change is 
consistent with the objectives of Section 6 of the Act,\8\ in general, 
and furthers the objectives of Section 6(b)(4),\9\ 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 Exchange believes the 
proposed rule change will further the Exchange's goal of introducing 
new products to the marketplace at a competitive priced.
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    \8\ 15 U.S.C. 78f.
    \9\ 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. 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 \10\ and Rule 19b-4(f)(2) \11\ 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.
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    \10\ 15 U.S.C. 78s(b)(3)(A). [sic]
    \11\ 17 CFR 240.19b-4(f)(2).
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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 proposal 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 Number SR-ISE-2009-63 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-2009-63. 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

[[Page 43196]]

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 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-2009-63 and should be submitted on or before September 16, 2009.
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    \12\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-20543 Filed 8-25-09; 8:45 am]

BILLING CODE 8010-01-P