Document ID: SEC-2008-0077-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: International Securities Exchange, LLC
Posted Date: 2008-01-16T05:00Z

[Federal Register: January 16, 2008 (Volume 73, Number 11)]
[Notices]               
[Page 2963-2964]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16ja08-109]                         

[[Page 2963]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57129; File No. SR-ISE-2008-01]

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

 January 10, 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 January 2, 2008, the International Securities Exchange, LLC 
(``Exchange'' or ``ISE'') 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 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.
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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

    The ISE is proposing to amend its Schedule of Fees to adopt a fee 
cap for certain orders executed in the Exchange's Facilitation 
Mechanism. 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 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 adopt a fee cap for 
orders executed in the Exchange's Facilitation Mechanism. Specifically, 
ISE proposes to adopt a fee discount for certain orders of 7,500 
contracts or more that are executed in the Exchange's Facilitation 
Mechanism. Under this proposal, for orders that are executed in the 
Exchange's Facilitation Mechanism, ISE will waive (1) the execution and 
comparison fee on incremental volume above 7,500 contracts for Firm 
Proprietary orders, Non-ISE Market Maker orders, and Customer orders in 
Premium Products, and (2) the execution fee on incremental volume above 
7,500 contracts for Customer orders in Second Market options.\5\ The 
number of contracts at or under the threshold will be charged as per 
the Exchange's Schedule of Fees. The Exchange currently does not have 
any size-based discounts for single orders while other Exchanges do. 
For example, the Chicago Board Options Exchange (``CBOE'') has a large 
trade discount program under which it caps transaction fees after the 
first 7,500 contracts for orders in options on the S&P 500 Index, the 
first 5,000 contracts for orders in other index options, and the first 
3,000 contracts for orders in ETF and HOLDRs options.\6\ Further, the 
American Stock Exchange (``Amex'') also has a large trade discount 
program under which it caps transaction, comparison and floor brokerage 
fees after the first 2,000 contracts for orders in index, ETF and TIR 
options.\7\ ISE believes that adopting a fee cap for large-sized orders 
executed in its Facilitation Mechanism will help strengthen its 
competitive position and encourage members to use the Exchange's 
Facilitation Mechanism.
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    \5\ The Exchange clarified that there is no comparison fee for 
orders in Second Market options. Telephone conversation between 
Samir M. Patel, Assistant General Counsel, International Securities 
Exchange, LLC and Richard Holley III, Senior Special Counsel, 
Division of Trading and Markets, Commission (January 10, 2008).
    \6\ See CBOE Options Fee Schedule, Section 18.
    \7\ See Amex Options Fee Schedule, Section (9).
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    The Exchange proposes to adopt the proposed fee discount on a pilot 
basis, until June 30, 2008. Further, the proposed cap would apply only 
to non-discounted volume, that is, it will not apply to orders 
previously discounted by other pricing incentives that currently appear 
on the Exchange's Schedule of Fees.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\8\ in general, and 
furthers the objectives of Section 6(b)(4),\9\ in particular, in that 
it is designed to provide for the equitable allocation of reasonable 
dues, fees and other charges among its members and other persons using 
its facilities. In particular, the proposed fee caps will result in 
lower fees for certain large size orders executed in ISE's Facilitation 
Mechanism.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 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

    Because the foregoing rule change establishes or changes a due, 
fee, or other charge imposed by the Exchange, it has become effective 
pursuant to Section 19(b)(3) of the Act \10\ and Rule 19b-4(f)(2) \11\ 
thereunder. 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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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 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:

[[Page 2964]]

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-2008-01 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-2008-01. 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 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-2008-01 and should be 
submitted on or before February 6, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-645 Filed 1-15-08; 8:45 am]

BILLING CODE 8011-01-P