Document ID: SEC-2007-0272-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: International Securities Exchange, LLC
Posted Date: 2007-02-23T05:00Z

[Federal Register: February 23, 2007 (Volume 72, Number 36)]
[Notices]               
[Page 8219-8221]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23fe07-101]                         

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55288; File No. SR-ISE-2007-09]

 
Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change, and Amendment No. 1 Thereto, To Establish Fee Discounts for Its 
Enhanced Sentiment Market Data Offering

February 13, 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 January 26, 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 and II below, which Items have been substantially prepared by 
the ISE. The Exchange filed the proposal pursuant to Section 
19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ which 
renders the proposal effective upon filing with the Commission. On 
February 9, 2007, the Exchange filed Amendment No. 1 to the proposed 
rule change.\5\ The Commission is publishing this notice to solicit 
comments on the proposed rule change, as amended, from interested 
persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
    \5\ In Amendment No. 1, the Exchange more clearly identifies the 
text it proposes to add to its Schedule of Fees, adds an explanation 
of certain of that proposed new language, and clarifies its 
description of the proposed discount.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its Schedule of Fees to adopt a 
discounted fee for a multi-product subscription of its enhanced 
sentiment market data offering (``ISEE SelectTM''). The text 
of the proposed rule change is available at the Exchange, on the 
Exchange's Web site at http://www.iseoptions.com/legal/proposed_rule_changes.asp
, 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 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
    Pursuant to a filing previously approved by the Commission, the 
Exchange currently sells on a subscription basis, to both members and 
non-members, ISEE Select.\6\ ISEE Select

[[Page 8220]]

is based on the ISE Sentiment Index[supreg], or ISEE[supreg], a 
calculation that represents an overall view of market sentiment. The 
ISEE provides an intra-day picture of how investors view stock prices 
by assessing customers' option trading activity. Unlike the traditional 
put/call ratio, which makes no distinction between customer, market 
maker or firm transactions, the ISEE measures only opening long 
customer transactions on the ISE. The ISE updates the current ISEE 
value hourly during market hours and posts it for free on its Web 
site.\7\
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release Nos. 53532 (March 21, 
2006), 71 FR 15501 (March 28, 2006) (SR-ISE-2005-56) (Notice of 
Filing of Proposed Rule Change to Establish Fees for Enhanced 
Sentiment Market Data); 53756 (May 3, 2006), 71 FR 27526 (May 11, 
2006) (SR-ISE-2005-56) (Order Approving Proposed Rule Change to 
Establish Fees for Enhanced Sentiment Market Data) (``Initial 
Filing'').
    \7\ http://www.iseoptions.com/marketplace/statistics/sentiment_index.asp
.

---------------------------------------------------------------------------

    Pursuant to the Initial Filing, ISEE Select allows subscribers to 
identify bullish and bearish investor sentiment for nearly any issue 
traded on the Exchange using the same formula that is used for the ISEE 
calculation. Where the ISEE is a single value for the overall market 
sentiment, ISEE Select provides specific information to allow an end 
user to retrieve a sentiment value for an individual symbol via a user-
defined query tool. In addition to the user-defined query tool, ISE 
also offers a pre-defined scanning tool that combs the market for 
sentiment levels that meet pre-defined parameters. ISEE Select provides 
sentiment values for particular indices, industry sectors or individual 
stocks and is calculated three times per hour versus only one time per 
hour for the ISEE.
    ISEE Select is currently available to on-line investors on a 
subscription basis as follows: (i) 100 user-defined queries for $11.95 
per month; (ii) 200 user-defined queries for $14.95 per month; (iii) 
unlimited user-defined queries for $19.95 per month; and (iv) unlimited 
pre-defined queries for $11.95 per month. ISEE Select is also offered 
by third-parties that participate in the Exchange's Marketing Alliance 
program.\8\ Customers of participating third-parties are able to take 
advantage of a discounted price for the same four subscription levels. 
The discounted rates for these subscribers are as follows: (i) 100 
user-defined queries for $9.95 per month; (ii) 200 user-defined queries 
for $11.95 per month; (iii) unlimited user-defined queries for $15.95 
per month; and (iv) unlimited pre-defined queries for $9.95 per month.
---------------------------------------------------------------------------

    \8\ When the Commission published the Initial Filing, the 
Marketing Alliance program was known as the ISE Broker Marketing 
Alliance, and participation in it was limited to broker-dealers. 
Following the launch of the ISEE Select market data offering, and in 
response to the interest the Exchange received from many non-broker-
dealers wishing to participate in the Marketing Alliance program, 
the Exchange subsequently expanded the program by eliminating its 
limitation to only broker-dealers. See Securities Exchange Act 
Release Nos. 54508 (September 26, 2006) 71 FR 58459 (October 3, 
2006) (SR-ISE-2006-44) (Notice of Filing of Proposed Rule Change to 
Expand the Broker Marketing Alliance to Include Non-Broker-Dealers 
with Regard to Enhanced Sentiment Market Data Offering); 54704 
(November 3, 2006), 71 FR 65859 (November 9, 2006) (SR-ISE-2006-44) 
(Order Approving Proposed Rule Change to Expand the Broker Marketing 
Alliance to Include Non-Broker-Dealers with Regard to Enhanced 
Sentiment Market Data Offering).
---------------------------------------------------------------------------

    The Exchange now proposes to offer to both member and non-member 
subscribers the following multi-product discounted subscription fees: 
$24.95 per month for customers who subscribe directly through ISE to 
both the unlimited pre-defined query and either 200 user-defined 
queries or unlimited user-defined queries; or $19.95 per month for 
customers of the Marketing Alliance program partners that subscribe to 
both the unlimited pre-defined query and either 200 user-defined 
queries or unlimited user-defined queries. The Exchange notes that the 
multi-product discounts noted above are an actual reduction of the 
actual subscription fees for the products to which they apply. If not 
for the multi-product discount that is proposed in this filing, for on-
line subscribers directly through the ISE, these fees would be (i) 
$26.90 per month for subscribers to both unlimited pre-defined queries 
and 200 user-defined queries, or (ii) $31.90 per month for subscribers 
to both unlimited pre-defined queries and unlimited user-defined 
queries. For customers of the Marketing Alliance program partners, if 
not for the multi-product discount, these fees would be (i) $21.90 per 
month for subscribers to both unlimited pre-defined queries and 200 
user-defined queries, or (ii) $25.90 per month for subscribers to both 
unlimited pre-defined queries and unlimited user-defined queries. 
Finally, the Exchange notes that the addition of the word ``user-
defined'' to its Schedule of Fees is a clarifying change and not a 
substantive one. The enhanced sentiment market data offering that is 
currently sold by the Exchange consists of both a user-defined query 
tool and a pre-defined query tool. The purpose for adding the word 
``user-defined'' is to differentiate it from the ``pre-defined'' query 
tool.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(4), that an exchange have an equitable 
allocation of reasonable dues, fees and other charges among its members 
and other persons using its facilities. In particular, the proposed 
rule filing will provide both members and non-members a multi-product 
discount for subscription to ISEE Select.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
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

    No written comments were solicited or received with respect to the 
proposed rule change.

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

    Because the forgoing rule change does not: (1) Significantly affect 
the protection of investors or the public interest; (2) impose any 
significant burden on competition; and (3) become operative for 30 days 
after the date of this filing, or such shorter time as the Commission 
may designate, it has become effective pursuant to Section 19(b)(3)(A) 
of the Act and Rule 19b-4(f)(6) thereunder.\9\
---------------------------------------------------------------------------

    \9\ In addition, Rule 19b-4(f)(6) requires a self-regulatory 
organization to give the Commission written notice of its intent to 
file the proposed rule change, along with a brief description and 
text of the proposed rule change, at least five business days prior 
to the date of filing of the proposed rule change, or such shorter 
time as designated by the Commission. The ISE satisfied this 
requirement.
---------------------------------------------------------------------------

    A proposed rule change filed under 19b-4(f)(6) normally may not 
become operative prior to 30 days after the date of filing. However, 
Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter 
time if such action is consistent with the protection of investors and 
the public interest. The Exchange has requested that the Commission 
waive the 30-day operative delay.
    Prior to approving the current fee structure for ISEE Select, the 
Commission solicited comments from interested people, and no comments 
were received.\10\ The Commission believes that waiving the 30-day 
operative delay is consistent with the protection of investors and the 
public interest because such waiver would allow for immediate 
implementation of the proposed fee discount for this product, which is 
available to both members and non-members of the Exchange alike. In 
addition, this proposed rule change presents no novel issues. For these 
reasons, the Commission designates the proposed

[[Page 8221]]

rule change to be effective and operative upon filing with the 
Commission.\11\
---------------------------------------------------------------------------

    \10\ See Securities Exchange Act Release Nos. 54508 and 54704, 
supra at n.8.
    \11\ For the purposes only of waiving the 30-day operative 
delay, the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    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.

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-2007-09 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-2007-09. 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. Copies of the 
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-2007-09 and should be submitted on or before March 
16, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

    \12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-3075 Filed 2-22-07; 8:45 am]

BILLING CODE 8010-01-P