Document ID: SEC-2008-0197-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: International Securities Exchange, LLC
Posted Date: 2008-02-06T05:00Z

[Federal Register: February 6, 2008 (Volume 73, Number 25)]
[Notices]               
[Page 7020-7021]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06fe08-94]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57237; File No. SR-ISE-2007-124]

 
Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change and Amendment No. 1 Thereto Relating to Equity Fees

January 30, 2008.
    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 December 31, 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 ISE. On January 28, 2007, ISE submitted Amendment No. 1 to 
the proposed rule change.\3\ ISE filed the proposal pursuant to section 
19(b)(3)(A)(ii) of the Act \4\ and Rule 19b-4(f)(2) \5\ thereunder, as 
establishing or changing a due, fee, or other charges applicable to a 
member, which renders the proposed rule change 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\ In Amendment No. 1, the Exchange made clarifying changes to 
the purpose section of the filing.
    \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 is proposing to amend its Schedule of Fees with respect to 
equity transactions. The text of the proposed rule change is available 
at ISE, http://www.ise.com, 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: (1) 
Distinguish between transaction fees related to equity orders and 
equity orders submitted on an order delivery basis; (2) to increase the 
rebate for equity orders that add liquidity for securities that trade 
at or above $1.00 from $0.0025 to $0.0032; (3) to increase the rebate 
for equity orders submitted on an order delivery basis that add 
liquidity for securities that trade at or above $1.00 from $0.0025 to 
$0.0027 (these orders are submitted by Order Delivery Equity Electronic 
Access Members (``Order Delivery Equity EAMs'')); and (4) to cease 
sharing market data revenues except with respect to orders submitted on 
an order delivery basis. The

[[Page 7021]]

Exchange proposes to implement these changes on January 2, 2008.
    The Exchange proposes to restructure its Schedule of Fees and 
allocation of market data rebates to provide Equity Electronic Access 
Members (``Equity EAMs'') that submit equity orders an efficient method 
of calculating the exact cost of trading on the ISE Stock Exchange. 
Specifically, rather than providing these Equity EAMs with a lump sum 
market data rebate every quarter, the Exchange proposes to increase the 
rebate for execution of equity orders that provide liquidity from 
$0.0025 to $0.0032 for securities that trade at or above $1.00. This 
change will allow Equity EAMs to perform a precise cost benefit 
analysis in determining where to route their order flow.
    The Exchange proposes to increase the rebate for the execution of 
equity orders submitted on an order delivery basis that provide 
liquidity from $0.0025 to $0.0027 for securities that trade at or above 
$1.00, but to leave the allocation of market data rebates the same for 
these orders. The Exchange has determined that increasing the maker 
rebate, discussed above, and continuing to rebate 50% of its quote and 
trade revenue to Order Delivery Equity EAMs is necessary for 
competitive reasons, particularly in light of the fact that other 
markets have similar maker rebates and provisions in their market data 
revenue rebate program.\6\
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    \6\ See Securities Exchange Act Release No. 56890 (December 4, 
2007), 72 FR 70360 (December 11, 2007) (SR-NSX-2007-13).
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    The Exchange believes that these fee changes will not impair its 
ability to carry out its regulatory responsibilities. Furthermore, the 
Exchange intends that this rule change will not have an overall effect 
on the amounts rebated to Equity EAMs, except that payments will occur 
on a monthly instead of quarterly basis. The monies rebated to Order 
Delivery Equity EAMs on a quarterly basis remain unchanged.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of section 6(b) of the Act,\7\ in general, and 
furthers the objectives of section 6(b)(4),\8\ in particular, in that 
it is designed to provide for the equitable allocation of reasonable 
dues, fees, and other charges among its members and issuers and other 
persons using its facilities.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 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 interested parties.

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

    The foregoing proposed rule change has become effective upon filing 
with the Commission pursuant to section 19(b)(3)(A)(ii) of the Act \9\ 
and Rule 19b-4(f)(2) \10\ thereunder, because it establishes or changes 
a due, fee, or other charge applicable only to a member.
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    \9\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \10\ 17 CFR 240.19b-4(f)(2).
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    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.

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-2007-124 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-2007-124. 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 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-2007-124 and should be 
submitted on or before February 27, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
Florence E. Harmon,
Deputy Secretary.
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    \11\ 17 CFR 200.30-3(a)(12).
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 [FR Doc. E8-2124 Filed 2-5-08; 8:45 am]

BILLING CODE 8011-01-P