Document ID: SEC-2011-0560-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: International Securities Exchange, LLC
Posted Date: 2011-04-15T04:00Z

[Federal Register Volume 76, Number 73 (Friday, April 15, 2011)]
[Notices]
[Pages 21416-21418]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-9121]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64292; File No. SR-ISE-2011-22]

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

April 11, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on April 7, 2011, the International Securities Exchange, LLC (the 
``Exchange'' or the ``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 self-regulatory 
organization. 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.
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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 adopt fees for a 10 Gigabit network 
connection. 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 self-regulatory organization 
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.

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 the Exchange's 
Schedule of Fees to adopt fees for a 10 Gigabit (GB) network 
connection. The Exchange currently has a tiered

[[Page 21417]]

structure for the Ethernet/Managed Service Provider fee charged to 
Members. The Ethernet/Managed Service Provider fee is a fee charged to 
ISE Members to access the ISE's trading system via an Ethernet 
connection or via a third-party managed service provider. The Ethernet/
Managed Service Provider connection carries the same information (such 
as quotation and trade information) as other forms of connection (such 
as T-1 and T-3 point-to-point connections).
    An Ethernet/Managed Service Provider connection enables users to 
acquire bandwidth in megabit increments. The Exchange currently charges 
Members $100 per month for a member's purchase of up to 10 Megabits 
(MBs) of connection speed, $250 per month for the purchase of 11-100 
MBs of connection speed and $500 per month for the purchase of 101 
MBs-- 1 GB of connection speed. These fees are charged on a per 
connection basis.
    The Exchange is scheduled to launch an enhanced trading platform 
called Optimise on April 11, 2011. Upon transitioning to the Optimise 
trading platform, ISE will offer a new network connectivity option for 
Members. One of the many perceived advantages that the Optimise trading 
platform will offer is greatly improved capacity and throughput. To 
allow Members to maximize Optimise's low latency, ISE will offer a 
connectivity option of 10 GBs. ISE proposes to charge Members a fee of 
$4,000 per month for this 10 GB connection. ISE will retain the current 
Ethernet connectivity options that are available to Members today.
    Once Optimise is rolled out, and until the Exchange has fully 
transitioned from the current trading platform to the Optimise trading 
platform, market makers will be required to maintain connections to 
both trading systems. Therefore, ISE proposes to waive the new 10 GB 
fee for all members until the migration is entirely completed. The 
Exchange notes that the fees proposed herein are intended to cover and 
are reasonably related to ISE's costs of rolling out and supporting the 
new service.
    The Exchange has designated this proposal to be operative on April 
11, 2011.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\3\ in general, and with 
Section 6(b)(4) of the Act,\4\ in particular, in that it provides for 
the equitable allocation of reasonable dues, fees and other charges 
among Exchange members and other persons using its facilities. In 
particular, the proposed rule change will provide greater transparency 
into the connectivity options available to market participants. The 
proposed rule change treats similarly situated Members in the same 
manner by assessing the same fees to all Members based on their 
connectivity needs. The Exchange notes that the 10 GB connectivity 
option proposed herein is similar to that currently in place at other 
exchanges. For example, NASDAQ OMX PHLX, Inc. (``PHLX''), NASDAQ OMX 
BX, Inc. (``BX'') and the NASDAQ Stock Market LLC (``NASDAQ'') each 
offer a 10GB network connection option to their members, albeit at a 
higher cost than that proposed by ISE.\5\
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    \3\ 15 U.S.C. 78f .
    \4\ 15 U.S.C. 78f(b)(4).
    \5\ See Exchange Act Release Nos. 62639 (August 4, 2010), 75 FR 
48391 (August 10, 2010) (SR-PHLX-2010-89); 62969 (September 22, 
2010), 75 FR 59777 (September 28, 2010) (SR-BX-2010-064); and 62663 
(August 9, 2010), 75 FR 49543 (August 13, 2010) (SR-NASDAQ-2010-
077). PHLX, BX and NASDAQ each charges $5,000 per month for a 10 GB 
connection.
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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 rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act.\6\ At any time within 60 days of the filing 
of such proposed rule change, the Commission summarily may temporarily 
suspend 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. If the Commission takes such action, the Commission shall 
institute proceedings to determine whether the proposed rule should be 
approved or disapproved.
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    \6\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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 No. SR-ISE-2011-22 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-ISE-2011-22. 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 Web site viewing and printing 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-
2011-22 and should be submitted by May 6, 2011.

[[Page 21418]]

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Cathy Ahn,
Deputy Secretary.
[FR Doc. 2011-9121 Filed 4-14-11; 8:45 am]
BILLING CODE 8011-01-P