Document ID: SEC-2006-0487-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: International Securities Exchange, Inc.
Posted Date: 2006-04-13T04:00Z

[Federal Register: April 13, 2006 (Volume 71, Number 71)]
[Notices]               
[Page 19222-19224]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13ap06-127]                         

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53608; File No. SR-ISE-2006-17]

 
Self-Regulatory Organizations; International Securities Exchange, 
Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change Relating to Fees on the Russell 1000 Index

April 6, 2006.
    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 April 3, 2006, the International Securities Exchange, Inc. 
(``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

[[Page 19223]]

have been prepared by the ISE. The ISE has designated this proposal as 
one establishing or changing a due, fee, or other charge imposed by the 
ISE under section 19(b)(3)(A)(ii) of the Act,\3\ and Rule 19b-4(f)(2) 
thereunder,\4\ which renders the proposal effective upon filing with 
the Commission. The Commission is publishing this notice to solicit 
comments on the proposed rule change 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)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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 to waive the 
surcharge for transactions in options on the Russell 1000 Index until 
September 29, 2006. The text of the proposed rule change is available 
on the ISE's Web site (http://www.iseoptions.com/legal/proposed_rule_changes.asp
), at the principal office of the ISE, 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 ISE 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 ISE 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 purpose of this proposed rule change is to waive the surcharge 
for transactions in options on the Russell 1000 Index (``RUI'') until 
September 29, 2006. Options on RUI were previously approved for trading 
by the Commission.\5\ Pursuant to a license agreement entered into by 
the Exchange with the Frank Russell Company (``Russell''), the Exchange 
currently charges a ten (10) cent surcharge per contract for trading 
options on RUI.\6\ However, in order to promote trading in options on 
RUI, the Exchange is proposing to waive all surcharges on RUI for the 
2nd and 3rd quarters of 2006 (the ``promotional period'').
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 51619 (April 27, 
2005), 70 FR 22947 (May 3, 2005) (Order approving the trading of 
options on various Russell Indexes, including RUI).
    \6\ See Securities Exchange Act Release No. 51858 (June 16, 
2005), 70 FR 36218 (June 22, 2005) (Notice of filing and immediate 
effectiveness of fees on various Russell Indexes, including RUI).
---------------------------------------------------------------------------

    Due to competitive pressures, the Exchange does not charge Public 
Customer Orders \7\ this surcharge fee. The surcharge fee is charged 
only to Exchange members with respect to non-Public Customer Orders 
(e.g., Market Maker and Firm Proprietary orders). Accordingly, during 
the promotional period, the Exchange proposes to waive the surcharge 
fee on all non-Public Customer Orders and, for a pilot period that is 
set to expire on July 31, 2006, on all Linkage Orders.\8\ The 
Exchange's normal transaction fees, i.e., an execution fee and a 
comparison fee, in options on RUI shall continue to apply during the 
promotional period.\9\
---------------------------------------------------------------------------

    \7\ Public Customer Order is defined in ISE Rule 100(a)(33) as 
an order for the account of a Public Customer. Public Customer is 
defined in ISE Rule 100(a)(32) as a person that is not a broker or 
dealer in securities.
    \8\ See ISE Rules 1900(10) and 1901.
    \9\ The Exchange represents that these fees are charged only to 
Exchange members.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b)(4) of the Act,\10\ 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.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

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 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) of the Act \11\ and Rule 19b-4(f)(2) \12\ thereunder 
because it changes a fee imposed by the Exchange. 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.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 19b-4(f)(2).
---------------------------------------------------------------------------

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-2006-17 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.
    All submissions should refer to File Number SR-ISE-2006-17. 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 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 such 
filing also will be available for inspection and 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

[[Page 19224]]

Number SR-ISE-2006-17 and should be submitted on or before May 4, 2006.
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
J. Lynn Taylor,
Assistant Secretary.
 [FR Doc. E6-5480 Filed 4-12-06; 8:45 am]

BILLING CODE 8010-01-P