Document ID: SEC-2008-0828-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: International Securities Exchange, LLC
Posted Date: 2008-06-18T04:00Z

[Federal Register: June 18, 2008 (Volume 73, Number 118)]
[Notices]               
[Page 34814-34815]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18jn08-133]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57951; File No. SR-ISE-2008-42]

 
Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule 
Change Relating to Payment for Order Flow Fees

June 11, 2008.
    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 June 2, 2008, 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 prepared by the Exchange. The 
Exchange has designated this proposal as one establishing or changing a 
due, fee, or other charge imposed by 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.
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    \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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    ISE proposes to amend its payment for order flow (``PFOF'') fees 
for issues that trade as part of the Penny Pilot (``Pilot'').\5\ The 
text of the proposed rule

[[Page 34815]]

change is available at the Exchange, the Commission's Public Reference 
Room, and www.ise.com.
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    \5\ See, e.g., Securities Exchange Act Release Nos. 54603 
(October 16, 2006), 71 FR 62024 (October 20, 2006) (SR-ISE-2006-62) 
(Notice of Filing of Proposed Rule Change to Implement a Pilot 
Program To Quote and To Trade Options in Pennies); 56151 (July 26, 
2007), 72 FR 42452 (August 2, 2007) (SR-ISE-2007-68) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Relating 
to an Extension of the Penny Pilot Program); 56564 (September 27, 
2007), 72 FR 56412 (October 3, 2007) (SR-ISE-2007-74) (Order 
Granting Accelerated Approval to a Proposed Rule Change Relating to 
an Extension and Expansion of the Penny Pilot Program); and 57508 
(March 17, 2008), 73 FR 15243 (March 21, 2008) (SR-ISE-2008-27) 
(Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change Implementing Phase II of the Penny Pilot Program Expansion).
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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. ISE has substantially 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 Exchange proposes to amend its PFOF fees for issues that trade 
as part of the Pilot. Specifically, ISE proposes to increase the PFOF 
fee from $0.10 per contract to $0.25 per contract. As a result of this 
change, ISE believes that its PFOF fee in the Pilot options classes 
would be more competitive with the PFOF fee other options exchanges 
assess in these options classes, and allow ISE market makers to compete 
better for order flow in these options classes. ISE proposes to 
implement this change in its PFOF fee beginning on June 2, 2008. The 
Exchange is not amending its PFOF program in any other respect.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act \6\ in general, and furthers the 
objectives of Section 6(b)(4) of the Act \7\ in particular, in that it 
is designed to provide for the equitable allocation of reasonable dues, 
fees, and other charges among ISE members. In particular, the Exchange 
believes increasing its PFOF fees in the Pilot options classes is 
reasonable and equitable in that it will allow ISE market makers to 
better compete for order flow in these options classes.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4).
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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

    The foregoing proposed rule change has been designated as a fee 
change pursuant to Section 19(b)(3)(A)(ii) of the Act \8\ and Rule 19b-
4(f)(2) \9\ thereunder, because it establishes or changes a due, fee, 
or other charge imposed by the Exchange. Accordingly, the proposal will 
take effect upon filing with the Commission. 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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    \8\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \9\ 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 Number SR-ISE-2008-42 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-ISE-2008-42. 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 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-2008-42 and should be 
submitted on or before July 9, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-13707 Filed 6-17-08; 8:45 am]

BILLING CODE 8010-01-P