Document ID: SEC-2007-0898-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: International Securities Exchange, LLC
Posted Date: 2007-07-03T04:00Z

[Federal Register: July 3, 2007 (Volume 72, Number 127)]
[Notices]               
[Page 36530-36531]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03jy07-114]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55961; File No. SR-ISE-2007-46]

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

June 26, 2007.
    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 12, 2007, 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 substantially prepared by the 
Exchange. ISE 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

    The ISE is proposing to amend its Schedule of Fees to establish 
fees for transactions in options on two Premium Products.\5\ The text 
of the proposed rule change is available at the Exchange, the 
Commission's Public Reference Room, and http://www.iseoptions.com.

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    \5\ ``Premium Products'' is defined in the Schedule of Fees as 
the products enumerated therein.
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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 Schedule of Fees to establish 
fees for transactions in options on the following two Premium Products: 
United States Natural Gas Fund (``UNG'') and United States Oil Fund 
(``USO'').\6\ The Exchange represents that UNG and USO are eligible for 
options trading because they constitute ``Fund Shares,'' as defined by 
ISE Rule 502(h).
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    \6\ The United States Oil Fund, LP (``USO'') and the United 
States Natural Gas Fund (``UNG'') are distributed by ALPS 
Distributors, Inc. (``ALPS''), administered by Brown Brothers 
Harriman & Co. (``BBH'') and Victoria Bay Asset Management 
(``VBAM'') is the General Partner. ALPS, BBH and VBAM have not 
licensed or authorized ISE to (i) engage in the creation, listing, 
provision of a market for trading, marketing, and promotion of 
options on USO and UNG or (ii) to use and refer to any of their 
trademarks or service marks in connection with the listing, 
provision of a market for trading, marketing, and promotion of 
options on USO and UNG or with making disclosures concerning options 
on USO and UNG under any applicable federal or state laws, rules or 
regulations. ALPS, BBH and VBAM do not sponsor, endorse, or promote 
such activity by ISE, and are not affiliated in any manner with ISE.
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    All of the applicable fees covered by this filing are identical to 
fees charged by the Exchange for all other Premium Products. 
Specifically, the Exchange is proposing to adopt an execution fee and a 
comparison fee for all transactions in options on UNG and USO.\7\ The 
amount of the execution fee and comparison fee for products covered by 
this filing shall be $0.15 and $0.03 per contract, respectively, for 
all Public Customer Orders \8\ and Firm Proprietary orders. The amount 
of the execution fee and comparison fee for all ISE Market Maker 
transactions shall be equal to the execution fee and comparison fee 
currently charged by the Exchange for ISE Market Maker transactions in 
equity options.\9\ Finally, the amount of the execution fee and 
comparison fee for all non-ISE Market Maker transactions shall be $0.37 
and $0.03 per contract, respectively. Further, since options on UNG and 
USO are multiply-listed, the

[[Page 36531]]

Payment for Order Flow fee shall also apply. The Exchange believes the 
proposed rule change will further the Exchange's goal of introducing 
new products to the marketplace that are competitively priced.
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    \7\ These fees will be charged to Exchange members. Under a 
pilot program that is set to expire on July 31, 2007, these fees 
will also be charged to Linkage Orders (as defined in ISE Rule 
1900). See Securities Exchange Act Release No. 54204 (July 25, 
2006), 71 FR 43548 (August 1, 2006) (SR-ISE-2006-38).
    \8\ ``Public Customer Order'' is defined in ISE Rule 100(a)(39) 
as an order for the account of a Public Customer. ``Public 
Customer'' is defined in ISE Rule 100(a)(38) as a person that is not 
a broker or dealer in securities.
    \9\ The execution fee is currently between $.21 and $.12 per 
contract side, depending on the Exchange Average Daily Volume, and 
the comparison fee is currently $.03 per contract side.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act \10\ in general, and Section 6(b)(4) of 
the Act \11\ in particular, because 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.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 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 proposed rule change has been designated as a fee 
change pursuant to Section 19(b)(3)(A)(ii) of the Act \12\ and Rule 
19b-4(f)(2) \13\ thereunder, because it establishes or changes a due, 
fee, or other charge imposed by the Exchange. Accordingly, the proposal 
took 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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    \12\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \13\ 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-2007-46 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-2007-46. 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 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-2007-46 and should be 
submitted on or before July 24, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-12777 Filed 7-2-07; 8:45 am]

BILLING CODE 8010-01-P