Document ID: SEC-2010-0418-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: International Securities Exchange, LLC
Posted Date: 2010-03-18T04:00Z

[Federal Register: March 18, 2010 (Volume 75, Number 52)]
[Notices]               
[Page 13193-13194]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18mr10-119]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61675; File No. SR-ISE-2010-17]

 
Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change Relating to Customer Fees for the Block Order Mechanism

March 9, 2010.
    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 March 1, 2010, the International Securities Exchange, LLC (the 
``Exchange'' or the ``ISE'') filed with the Securities and Exchange 
Commission the proposed rule change, as described in Items I, II, and 
III below, which items have been prepared by the Exchange. 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The ISE proposes to adopt a fee for certain customer orders 
executed in the Exchange's Block Order Mechanism. 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
    On October 1, 2009, the Exchange implemented a new order type, 
Professional Orders,\3\ and adopted a $0.20 per contract fee for 
Professional Orders for their crossing activity, i.e., their 
interaction in the Exchange's Facilitation, Solicitation and Price 
Improvement Mechanisms.\4\ ISE adopted this fee on the belief that 
trading in the Exchange's crossing order mechanisms is primarily 
activity that is conducted by broker-dealers and thus it is reasonable 
for the Exchange to charge non-broker-dealer orders that conduct a 
Professional Order business the same fee the Exchange charges broker-
dealer orders. ISE now proposes to adopt a similar $0.20 per contract 
fee for Professional Orders that interact in the Exchange's Block Order 
Mechanism. The Exchange believes that executing orders in the Block 
Order Mechanism is also characteristic of professional traders and thus 
should be subject to a fee.
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    \3\ A ``Professional Order'' is defined by the Exchange to mean 
an order that is for the account of a person or entity that is not a 
Priority Customer. A ``Priority Customer'' is defined by the 
Exchange to mean a person or entity that is (i) not a broker or 
dealer in securities, and (ii) does not place more than 390 orders 
in listed options per day on average during a calendar month for its 
own beneficial account(s).
    \4\ See Exchange Act Release No. 60861 (October 22, 2009), 74 FR 
55872 (October 29, 2009).
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2. Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Exchange 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, the proposed rule change 
will allow the Exchange to charge a similar fee to both broker-dealer 
orders and certain non-broker-dealer orders that interact in the 
Exchange's Block Order Mechanism.
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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. 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 \7\ and Rule 19b-4(f)(2) \8\ 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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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 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 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-2010-17 on the subject line.

[[Page 13194]]

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-2010-17. 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 Commissions 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 Web site viewing and printing in 
the Commission's Public Reference Room, 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-
2010-17 and should be submitted by April 8, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-5906 Filed 3-17-10; 8:45 am]
BILLING CODE 8011-01-P