Document ID: SEC-2009-0762-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by International Securities Exchange, LLC Relating to Amending the Direct Edge ECN Fee Schedule To Expand the Applicability of the Super Tier Rebate to All Securities Priced at or Above $1.00 and To Increase the Take Fee
Posted Date: 2009-06-09T04:00Z

[Federal Register: June 9, 2009 (Volume 74, Number 109)]
[Notices]
[Page 27371-27373]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09jn09-153]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60031; File No. SR-ISE-2009-29]

Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by International Securities
Exchange, LLC Relating to Amending the Direct Edge ECN Fee Schedule To
Expand the Applicability of the Super Tier Rebate to All Securities
Priced at or Above $1.00 and To Increase the Take Fee

June 3, 2009.
    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 May 29, 2009, the International Securities Exchange, LLC (the
``Exchange'' or the ``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 the self-
regulatory organization. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend Direct Edge ECN's (``DECN'') fee
schedule for ISE Members \3\ to apply the Super Tier Rebates, as
defined below, to all securities priced at or above $1.00 that add
liquidity on EDGX and to raise the fee charged to orders that remove
liquidity on EDGX. All of the changes

[[Page 27372]]

described herein are applicable to ISE Members.
---------------------------------------------------------------------------

    \3\ References to ISE Members in this filing refer to DECN
Subscribers who are ISE Members.
---------------------------------------------------------------------------

    The text of the proposed rule change is available on the Exchange's
Internet Web site at 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
    DECN, a facility of ISE, operates two trading platforms, EDGX and
EDGA. Currently, DECN's fee schedule includes a per share rebate in
securities reported to Tape A and Tape C of $0.003 per share for ISE
Members that add liquidity on EDGX if the ISE Member satisfies any of
the following three criteria on a daily basis, measured monthly: (i)
Adding 40,000,000 shares or more on either EDGX, EDGA or EDGX and EDGA
combined; (ii) adding 20,000,000 shares or more on either EDGX, EDGA or
EDGX and EDGA combined and routing 20,000,000 shares or more through
EDGA; or (iii) adding 10,000,000 shares or more of liquidity to EDGX,
so long as added liquidity on EDGX is at least 5,000,000 shares greater
than the previous calendar month. The rebate described above is
referred to as a ``Super Tier Rebate'' on the DECN fee schedule.
Currently, ISE Members that add liquidity in Tape A and Tape C
securities and don't meet the Super Tier criteria, as set forth above,
receive a rebate of $0.0025 for such orders.
    The Exchange is now proposing to expand the applicability of the
aforementioned Super Tier Rebate during the month of June by
eliminating the need to meet the ``Super Tier'' criteria described
above for Tape A and Tape C securities and rebating $0.003 to all
orders that add liquidity on EDGX. The Exchange is increasing this
rebate to maintain a competitive rate. This fee change will become
operative on June 1, 2009.
    In an effort to offset the cost of increasing the rebate for orders
that add liquidity on EDGX, the Exchange is proposing to increase the
fee for orders that remove liquidity on EDGX from $0.0026 to $0.0028.
This fee change will become operative on June 1, 2009.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the objectives of Section 6 of the Act,\4\ in general, and
furthers the objectives of Section 6(b)(4),\5\ 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, expanding the applicability of the Super
Tier Rebate and offering pricing incentives to market participants who
route orders to DECN allows DECN to remain competitive. ISE notes that
DECN operates in a highly competitive market in which market
participants can readily direct order flow to competing venues if they
deem fee levels at a particular venue to be excessive. The proposed
rule change reflects a competitive pricing structure designed to
incentivize market participants to direct their order flow to DECN. ISE
believes the fees and credits remain competitive with those charged by
other venues and therefore continue to be reasonable and equitably
allocated to those members that opt to direct orders to DECN rather
than competing venues.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f.
    \5\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

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) of the Act \6\ and Rule 19b-4(f)(2) \7\ 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.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 19b-4(f)(2).
---------------------------------------------------------------------------

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-2009-29 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-ISE-2009-29. 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 Commissions 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

[[Page 27373]]

submissions should refer to File Number SR-ISE-2009-29 and should be
submitted on or before June 30, 2009.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-13403 Filed 6-8-09; 8:45 am]

BILLING CODE 8010-01-P