Document ID: SEC-2007-1467-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: International Securities Exchange, LLC
Posted Date: 2007-10-22T04:00Z

[Federal Register: October 22, 2007 (Volume 72, Number 203)]
[Notices]               
[Page 59576-59577]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22oc07-116]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56662; File No. SR-ISE-2007-71]

 
Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing of a Proposed Rule Change Relating to Fee Changes 
on a Retroactive Basis

October 16, 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 October 2, 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. 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 Exchange proposes to retroactively apply the fee reduction that 
was implemented on September 4, 2007 to the time period of July 1, 2007 
to August 31, 2007 (``Retroactive Period''). The text of the proposed 
rule change is available at the Commission's Public Reference Room, at 
the Exchange, and at http://www.ise.com.

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
    On September 4, 2007, the Exchange implemented a fee reduction to 
the Schedule of Fees with respect to Electronic Access Member (``EAM'') 
Trading Application Software Fees (``Software Fees'').\3\ Consequently, 
the Software Fees are as follows:
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    \3\ See Securities Exchange Act Release No. 56379 (September 10, 
2007), 72 FR 52591 (September 14, 2007) (SR-ISE-2007-79) (notice of 
filing and immediate effectiveness of a proposed rule change 
relating to fee changes).
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     Equity EAMs are charged $250 for each of the first and 
second connections and $50 for each additional connection thereafter, 
regardless of whether the Equity EAM is connected via Financial 
Information eXchange (``FIX'') or Application Programming Interface 
(``API'').\4\
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    \4\ ISE uses an open API, which members program to in order to 
develop applications that send trading commands and/or queries to 
and receive broadcasts and/or transactions from the trading system. 
FIX is an industry-wide messaging standard protocol.
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     Options EAMs that connect via API are charged $250 for 
each of the first five connections and $100 for each additional 
connection.
     Options EAMs that connect via FIX are charged $250 for 
each of the first and second connections and $50 for each additional 
connection thereafter.
    In this filing, the Exchange proposes to retroactively apply the 
above-mentioned reduced fees during the Retroactive Period. The 
Exchange believes that retroactive application is appropriate for 
Equity EAMs because prior to July 1, 2007, Equity EAMs were charged a 
fee of $250 per month to connect to the ISE Stock Exchange, and fees on 
second and subsequent connections were waived, regardless of whether 
the Equity EAM connected via FIX or API.\5\ The Exchange allowed this 
waiver to expire on June 30, 2007, at which time the fee to connect to 
the ISE Stock Exchange, on a monthly basis, became $250 per connection. 
Subsequent to the fee increase, the Exchange analyzed the impact of the 
fee increase on Equity EAMs and determined that the disparity between 
the increase in fees and the additional work required to assist the 
Equity EAMs in maintaining additional lines to the Exchange was not 
accurately correlated. Accordingly, the Exchange believes it is 
appropriate to retroactively apply this reduction to the Schedule of 
Fees.
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    \5\ See Securities Exchange Act Release No. 54897 (December 8, 
2006), 71 FR 75593 (December 15, 2006) (SR-ISE-2006-76) (notice of 
filing and immediate effectiveness of a proposed rule change 
relating to ISE Stock Exchange fees).
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    The Exchange believes that retroactive application is appropriate 
for Options EAMs because originally Options EAMs were charged $250 per 
month for each of the first five CLICK terminals, and $100 per month 
for each additional terminal. However, under a now expired pilot 
program previously adopted by the Exchange, Options EAMs' fees 
associated with a second and any subsequent CLICK terminals were 
waived. As a result, Options EAMs were only charged a $250 per month to 
connect to the Exchange. Earlier this year, once all existing CLICK 
terminals were decommissioned, the Exchange submitted a fee filing 
that, among other things, proposed to remove all references to CLICK 
terminals from its fee schedule.\6\ In doing so, and after conducting 
an internal analysis of the impact of fees to members, the Exchange 
notes that the CLICK Fee Filing actually raised the connection fees for 
Options EAMs, contrary to what the Exchange intended. Thus, this filing 
seeks to remedy the mistake the CLICK Fee Filing has caused during the 
Retroactive Period by retroactively applying this reduction to the 
Schedule of Fees during the Retroactive Period.
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    \6\ See Securities Exchange Act Release No. 55960 (June 26, 
2007), 72 FR 36531 (July 3, 2007) (SR-ISE-2007-42) (the ``CLICK fee 
filing'').
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b)(4) of the Act,\7\ 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.
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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

    This proposed rule change does not impose any burden on competition 
that is not necessary or appropriate in furtherance of the purposes of 
the Act.

[[Page 59577]]

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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    A. By order approve such proposed rule change, or
    B. Institute proceedings to determine whether the proposed rule 
change should be disapproved.

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 Ccomments

     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-2007-71 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-2007-71. 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-2007-71 and should be 
submitted on or before November 13, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-20783 Filed 10-19-07; 8:45 am]

BILLING CODE 8011-01-P