Document ID: SEC-2010-1950-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: International Securities Exchange, LLC
Posted Date: 2010-12-17T05:00Z

[Federal Register Volume 75, Number 242 (Friday, December 17, 2010)]
[Notices]
[Pages 79058-79060]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-31683]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63531; File No. SR-ISE-2010-109]

Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change Relating to a Fee Waiver

December 10, 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 November 30, 2010, the International Securities Exchange, LLC 
(the ``Exchange'' or the ``ISE'') filed with the Securities and 
Exchange Commission (``Commission'') the proposed rule change, as 
described in Items I and II below, which items have been prepared by 
the self-regulatory organization. The Commission is publishing this 
notice to

[[Page 79059]]

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 is proposing to amend its Schedule of Fees regarding its 
Competitive Market Maker (``CMM'') Inactivity Fee. 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
    ISE proposes to amend its Schedule of Fees regarding its CMM 
Inactivity Fee. ISE currently charges the owner \3\ of a CMM membership 
an Inactivity Fee of $25,000 a month per trading right if the owner 
does not (i) itself operate the CMM membership, (ii) lease the CMM 
Trading Right to another member which operates the CMM membership, or 
(iii) avail itself to one of the exemptions specifically authorized in 
the Notes to the CMM Inactivity Fee on the Schedule of Fees. Pursuant 
to ISE Rules, however, a CMM Member may not operate more than 10 CMM 
Trading Rights.\4\ A CMM that has more than 10 trading rights must 
lease the additional trading rights or else be subject to the CMM 
Inactivity Fee.
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    \3\ The Note to the CMM Inactivity Fee on the Schedule of Fees 
provides that the fee applies to the owner of the CMM membership, 
unless the inactive CMM membership is subject to a lease that was 
approved by the Exchange prior to the effective date of the fee, in 
which case the fee would apply to the lessee.
    \4\ See ISE Rule 303(b).
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    The Exchange has developed an enhanced technology trading platform 
and will migrate from its current trading system to the new trading 
system over time (the ``Transition Period''). The Exchange believes 
that during the Transition Period it would be impractical for a firm to 
become a new market maker on the Exchange due to the level of financial 
and technical resources that a new market maker would be required to 
commit. As a result, CMMs who are actively seeking to lease their 
trading rights during the Transition Period are unlikely to find a firm 
that would be willing to commit such resources. Therefore, ISE proposes 
to waive its current CMM Inactivity Fee until the new trading system 
has been completely rolled out.\5\ This proposed fee waiver would only 
apply to trading rights in excess of the 10 trading rights that a CMM 
is permitted to operate provided that CMM Member owns more than 10 
trading rights.
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    \5\ The Exchange has been working with its members to assure a 
smooth transition to the new trading platform and will continue to 
do so up to the launch of the new technology and during the 
Transition Period.
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2. Basis
    The basis under the Securities Exchange Act of 1934 (the ``Exchange 
Act'') for this proposed rule change is the requirement under Section 
6(b)(4)\6\ 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 fee waiver is simply a 
recognition of the fact that it would be impractical for a new firm to 
become a member of the Exchange during the Transition Period, and thus, 
serves to effectively maintain low fees during this time.
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    \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)(A)(ii) of the Act.\7\ At any time within 60 days of the filing 
of such proposed rule change, the Commission summarily may temporarily 
suspend 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. If the Commission takes such action, the Commission shall 
institute proceedings to determine whether the proposed rule should be 
approved or disapproved.
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    \7\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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-2010-109 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-ISE-2010-109. 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, 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

[[Page 79060]]

copying at the principal office of the 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-2010-109 and should be submitted by 
January 7, 2011.

    For the Commission, by the Division of Trading and Markets, 
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. 2010-31683 Filed 12-16-10; 8:45 am]
BILLING CODE 8011-01-P