Document ID: SEC-2005-0018-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: International Securities Exchange, Inc.
Posted Date: 2005-09-23T04:00Z

[Federal Register: September 23, 2005 (Volume 70, Number 184)]
[Notices]               
[Page 55932-55933]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23se05-93]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52462; File No. SR-ISE-2005-43]

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

September 19, 2005.
    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 September 1, 2005, the International Securities Exchange, Inc. 
(``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 prepared by the ISE. 
The ISE has designated this proposal as one establishing or changing a 
due, fee, or other charge imposed by the 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 the DIAMONDS[supreg] Trust, Series 
1, an exchange-traded fund.\5\ The text of the proposed rule change is 
available on the ISE's Web site (http://www.iseoptions.com/legal/proposed_rule_changes.asp
), at the principal office of the ISE, and 

at the Commission's Public Reference Room.
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    \5\ DIAMONDS[supreg] is a registered trademark of Dow Jones & 
Company, Inc. (``Dow Jones'') for securities issued by the 
Diamonds[supreg] Trust, Series 1 and has been licensed for use for 
certain purposes by Dow Jones to PDR Services Corporation (``PDR'') 
and the American Stock Exchange LLC (``Amex'') pursuant to a license 
agreement with Dow Jones. DIAMONDS and options which have DIAMONDS 
as their sole underlying interest (``DIAMONDS Options'') are not 
sponsored, endorsed, sold, or promoted by Dow Jones. Dow Jones, PDR, 
and Amex have not licensed or authorized ISE to (i) engage in the 
creation, listing, provision of a market for trading, marketing, and 
promotion of DIAMONDS Options or (ii) to use and refer to the 
DIAMONDS[supreg] trademark in connection with the listing, provision 
of a market for trading, marketing, and promotion of DIAMONDS 
Options or with making disclosures concerning DIAMONDS Options under 
any applicable federal or state laws, rules or regulations, and do 
not sponsor, endorse, or promote such activity by ISE. ISE is not 
affiliated in any manner with Dow Jones, PDR, or Amex.
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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 DIAMONDS[supreg] 
Trust, Series 1 (``DIA''), an exchange-traded fund.\6\ Specifically, 
the Exchange is proposing to adopt an execution fee and a comparison 
fee for all transactions in options on DIA.\7\ The amount of the 
execution fee and comparison fee for the product covered by this filing 
shall be the same for all order types on the Exchange--that is, orders 
for Public Customers \8\ and Non-Customers \9\ (which include Market 
Makers and Firm Proprietary)--and shall be equal to the execution fee 
and comparison fee, respectively, that are currently charged by the 
Exchange for transactions by Non-Customers in equity options.\10\ 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 ISE represents that DIA constitutes ``Fund Shares,'' as 
defined in ISE Rule 502(h). Telephone conversation between Samir 
Patel, Assistant General Counsel, ISE, and Richard Holley III, 
Special Counsel, Division of Market Regulation, Commission, on 
September 8, 2005.
    \7\ The ISE represents that these fees will be charged only to 
Exchange members. Telephone conversation between Samir Patel, 
Assistant General Counsel, ISE, and Richard Holley III, Special 
Counsel, Division of Market Regulation, Commission, on September 8, 
2005.
    \8\ See ISE Rule 100(32) (defining ``Public Customer'' as a 
person that is not a broker or dealer in securities).
    \9\ See ISE Rule 100(22) (defining ``Non-Customer'' as a person 
or entity that is a broker or dealer in securities).
    \10\ The Commission notes that the applicable 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 per side.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b)(4) of the Act,\11\ which requires 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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    \11\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that 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

    Because the foregoing rule change establishes or changes a due, 
fee, or other charge imposed by the Exchange, it has become effective 
pursuant to Section 19(b)(3)(A) of the Act \12\ and Rule 19b-4(f)(2) 
\13\ 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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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 19b-4(f)(2).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and

[[Page 55933]]

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-2005-43 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-9303.

All submissions should refer to File Number SR-ISE-2005-43. 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-2005-43 and should be submitted on or before October 
14, 2005.

    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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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 05-19035 Filed 9-22-05; 8:45 am]

BILLING CODE 8010-01-P