Document ID: SEC-2009-1435-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Customer Fees for Certain Complex Orders
Posted Date: 2009-10-08T04:00Z

[Federal Register: October 8, 2009 (Volume 74, Number 194)]
[Notices]               
[Page 51896-51897]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08oc09-93]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60778; File No. SR-ISE-2009-72]

 
Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change Relating to Customer Fees for Certain Complex Orders

October 2, 2009.
    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 October 1, 2009, the International Securities Exchange, LLC (the 
``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 prepared by ISE. ISE 
filed the proposed rule change pursuant to Section 19(b)(3)(A) of the 
Act \3\ and Rule 19b-4(f)(2) thereunder,\4\ which renders the proposed 
rule change 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).
    \4\ 17 CFR 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 proposes to amend its fee schedule for customer fees for 
certain Complex Orders. 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 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 self-regulatory organization has prepared summaries, 
set forth in sections A, B, and C below, of the most significant 
aspects of such statements.

[[Page 51897]]

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 amend ISE's fee 
schedule for customer fees for certain Complex Orders.\5\ The Exchange 
currently has a fee of $0.20 per contract applicable to customers that 
transact in Complex Orders, i.e., customer orders that interact with 
Complex Orders residing on the complex order book thereby taking 
liquidity from the complex order book.\6\ The Exchange waives this fee 
for the first 15,000 contracts transacted in a month by a member on 
behalf of its customers. This fee applies once a member transacts more 
than 15,000 contracts in a month (whether on behalf of one or more than 
one of its customers) that take liquidity from the complex order book. 
This fee generally applies to non-broker-dealer individuals and 
entities that have access to information and technology that enables 
them to trade, generally in large volume, in the same manner as a 
broker-dealer, i.e., these customers are able to quickly hit the bid or 
lift an offer on the Exchange's complex order book.
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    \5\ Complex Orders are defined in ISE Rule 722(a).
    \6\ See Exchange Act Release No. 55247 (February 6, 2007), 72 FR 
7099 (February 14, 2007).
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    The Exchange notes the current fee waiver at times affects retail 
investor orders. The purpose of the fee is to charge customers that 
trade like market professionals and are able to take liquidity from the 
exchange's complex order book in large volume because of their 
sophisticated trading systems. Therefore, ISE proposes to refine this 
fee by adopting a threshold of 1,000 orders rather than 15,000 
contracts. The Exchange believes switching the threshold from 
contracts-based to orders-based will capture the trading activity of 
those customers that intentionally engage in the business of taking 
liquidity from the Exchange's complex order book. The Exchange believes 
that retail investors that interact with Complex Orders resident on the 
complex order book are not likely to exceed 1,000 orders and thus are 
not likely to be charged this fee.
    The Exchange also proposes to increase this fee from $0.20 per 
contract to $0.25 per contract. ISE proposes to implement this fee 
change on October 1, 2009.
2. 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 dues, fees and other charges among its members and other 
persons using its facilities. In particular, the Exchange believes it 
is reasonable to charge customers that trade like market professionals 
and take liquidity from the Exchange's complex order book the same fee 
that the Exchange charges broker-dealers and market makers for taking 
liquidity from the Exchange's complex order book.

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) of the Act \7\ and Rule 19b-4(f)(2) \8\ thereunder because 
it establishes a due, fee, or other charge imposed by ISE.
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    \7\ 5 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 19b-4(f)(2).
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    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-2009-72 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-ISE-2009-72. 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 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 publicly available. All 
submissions should refer to File Number SR-ISE-2009-72 and should be 
submitted on or before October 29, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-24266 Filed 10-7-09; 8:45 am]

BILLING CODE 8011-01-P