Document ID: SEC-2006-1709-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: International Securities Exchange, LLC
Posted Date: 2006-12-28T05:00Z

[Federal Register: December 28, 2006 (Volume 71, Number 249)]
[Notices]               
[Page 78241-78242]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28de06-126]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54971; File No. SR-ISE-2006-65]

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

December 20, 2006.
    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 November 21, 2006, the International Securities Exchange, LLC 
(``Exchange'' or ``ISE'') filed with the Securities and Exchange 
Commission the proposed rule change, as described in Items I, II, and 
III below, which items have been prepared by the Exchange. The ISE has 
designated this proposal as one establishing or changing a due, fee, or 
other charge imposed by the CBOE 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 3 Premium Products.\5\ The text of 
the proposed rule change is available on the ISE's Web site (http://www.iseoptions.com
), at the principal office of the ISE, and at the 

Commission's Public Reference Room.
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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 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 Exchange is proposing to amend its Schedule of Fees to 
establish fees for transactions in options on the following 3 Premium 
Products: streetTRACKS KBW Bank ETF (``KBE''), streetTRACKS KBW Capital 
Markets ETF (``KCE''), and streetTRACKS KBW Insurance ETF (``KIE'').\6\ 
Specifically, the Exchange is proposing to adopt an execution fee and a 
comparison fee for all transactions in options on KBE, KCE and KIE.\7\ 
The amount of the execution fee and comparison fee for products covered 
by this filing would 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 would 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 would be $0.16 
and $0.03 per contract, respectively. All of the applicable fees 
covered by this filing are identical to fees charged by the Exchange 
for all other Premium Products. 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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    \6\ The ``KBW Bank Index\sm\'', the ``KBW Capital Markets 
Indexsm,'' the ``KBW Insurance Indexsm,'' ``KBW'' and ``Keefe, 
Bruyette & Woodssm'' are service marks of Keefe, Bruyette & Woods, 
Inc.sm, and have been licensed for use by State Street bank and 
Trust in connection with the listing and trading of KBE, KCE, and 
KIE on the American Stock Exchange. KBE, KCE and KIE are not 
sponsored, sold or endorsed by Keefe, Bruyette &Woods, Inc. and 
Keefe, Bruyette &Woods, Inc. makes no representation regarding the 
advisability of investing in KBE, KCE and KIE. Keefe, Bruyette 
&Woods, Inc. has not licensed or authorized ISE to (i) engage in the 
creation, listing, provision of a market for trading, marketing, and 
promotion of options on KBE, KCE and KIE 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 KBE, KCE and KIE or with making disclosures concerning 
options on KBE, KCE and KIE under any applicable federal or state 
laws, rules or regulations. Keefe, Bruyette & Woods, Inc. does not 
sponsor, endorse, or promote such activity by ISE and is not 
affiliated in any manner with ISE. KBE, KCE, and KIE constitute 
``Fund Shares,'' as defined by ISE Rule 502(h).
    \7\ These fees will be charged only 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).
    \8\ Public Customer Order is defined in Exchange Rule 100(a)(33) 
as an order for the account of a Public Customer. Public Customer is 
defined in Exchange Rule 100(a)(32) 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 the requirement of Section 6(b)(4) of the Act \10\ that an 
exchange have an 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)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The ISE does not believe that the proposed rule change will impose 
any inappropriate burden on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received from Members, Participants, or Others

    No written comments were either solicited or received.

[[Page 78242]]

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. 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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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 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-2006-65 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-2006-65. 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 Number SR-ISE-2006-65 and should be submitted on or before January 
18, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E6-22193 Filed 12-27-06; 8:45 am]

BILLING CODE 8011-01-P