Document ID: SEC-2007-0907-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: International Securities Exchange, LLC
Posted Date: 2007-07-06T04:00Z

[Federal Register: July 6, 2007 (Volume 72, Number 129)]
[Notices]               
[Page 37063-37064]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06jy07-115]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55973; File No. SR-ISE-2007-39]

 
Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule 
Change as Modified by Amendment No. 1 Thereto Relating to a Fee 
Reduction and Fee Cap in Options on IWM

June 28, 2007.
    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 June 1, 2007, the International Securities Exchange, LLC (``ISE'' or 
``Exchange'') 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 substantially prepared by the 
Exchange. On June 26, 2007, the Exchange filed Amendment No. 1 to the 
proposed rule change.\3\ ISE has designated this proposal as one 
establishing or changing a due, fee, or other charge imposed by ISE 
under Section 19(b)(3)(A)(ii) of the Act \4\ and Rule 19b-4(f)(2) 
thereunder,\5\ which renders the proposal effective upon filing with 
the Commission. The Commission is publishing this notice to solicit 
comments on the proposed rule change, as amended, from interested 
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1 made clarifying changes to the purpose 
section, clarified the operation of the Exchange's waiver program 
with respect to the Comparison and Non-ISE Market Maker fees, and 
corrected a typographical error in Exhibit 5.
    \4\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \5\ 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

    ISE proposes to establish a reduction and a cap in fees for trading 
options on the iShares Russell 2000[supreg] Index Fund (``IWM''). The 
text of the proposed rule change is available at the Exchange, its Web 
Site at http://www.iseoptions.com/legal/proposed_rule_changes.asp, 

and 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 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
    The Exchange proposes to amend its Schedule of Fees to impose, on a 
pilot basis until June 30, 2007, both a reduction in and a cap on 
exchange transaction and comparison fees for IWM options. Specifically, 
any Member with monthly Average Daily Volume (``ADV'') of 8,000 
contracts in IWM options would receive a $.10 discount from the 
standard transaction fees for contracts traded above that amount, up to 
ADV of 10,000 contracts in IWM options. For contracts in IWM options 
traded in excess of 10,000 ADV for a month, the Exchange will waive all 
transaction and comparison fees. The proposed fee discount program 
applies to ISE Market Maker orders, non-ISE Market Maker orders, and 
Firm Proprietary orders in IWM options. The Exchange's current 
transaction fees for these order types are as follows: For ISE Market 
Maker orders, the transaction fees range from $.21 to $.12 a contract, 
depending on the Exchange's trading volume, plus a comparison fee of 
$.03 per contract; for non-ISE Market Maker orders and Firm Proprietary 
orders, the transaction fees are $.37 and $.15, respectively, plus a 
comparison fee of $.03 per contract. The fee reduction and waiver is 
intended to increase the Exchange's competitiveness in trading IWM 
options. The Exchange notes that the proposed discount will apply to 
transaction fees only and not to the payment for order flow fee or any 
licensing surcharge fee that may be applicable to the trading of 
options in IWM.
    This proposal is similar to the volume-based discount fee program 
currently in place for trading in options on the NASDAQ-100 Index 
Tracking Stock[supreg] (QQQQ[supreg]) and for trading in the Exchange's 
Facilitation Mechanism.\6\
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    \6\ See Securities Exchange Act Release No. 49147 (January 29, 
2004), 69 FR 5629 (February 5, 2004) (SR-ISE-2003-32).
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2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(4) of the Act \7\ that an exchange have 
an equitable allocation of reasonable dues, fees, and other charges 
among its members and other persons using its facilities.
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    \7\ 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.

[[Page 37064]]

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing proposed rule change has been designated as a fee 
change pursuant to Section 19(b)(3)(A)(ii) of the Act \8\ and Rule 19b-
4(f)(2) \9\ thereunder, because it establishes or changes a due, fee, 
or other charge imposed by the Exchange. Accordingly, the proposal took 
effect upon filing with the Commission. 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.\10\
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    \8\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \9\ 17 CFR 240.19b-4(f)(2).
    \10\ For purposes of calculating the 60-day period within which 
the Commission may summarily abrogate the proposed rule change under 
Section 19(b)(3)(C) of the Act, the Commission considers the period 
to commence on June 26, 2007, the date on which ISE filed Amendment 
No. 1. See 15 U.S.C. 78s(b)(3)(C).
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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 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-2007-39 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 Number SR-ISE-2007-39. 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 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 Number SR-ISE-2007-39 and should be 
submitted on or before July 27, 2007.
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    \11\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-13068 Filed 7-5-07; 8:45 am]

BILLING CODE 8010-01-P