Document ID: SEC-2007-0525-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: International Securities Exchange, LLC
Posted Date: 2007-04-10T04:00Z

[Federal Register: April 10, 2007 (Volume 72, Number 68)]
[Notices]               
[Page 17967-17969]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10ap07-121]                         

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55571; File No. SR-ISE-2007-21]

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

April 3, 2007.
    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 March 26, 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 ISE. The ISE has designated this proposal as one 
establishing or changing a due, fee, or other charge applicable only to 
a member 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.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

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 seven Premium Products.\5\ The text 

[[Page 17968]]

http://www.iseoptions.com/legal/proposed_rule_changes.asp), at the ISE, and 

at the Commission's Public Reference Room.
---------------------------------------------------------------------------

    \5\ ``Premium Products'' is defined in the Schedule of Fees as 
the products enumerated therein.
---------------------------------------------------------------------------

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 seven 
Premium Products: iShares Dow Jones U.S. Basic Materials Sector Index 
Fund (``IYM''),\6\ iShares MSCI Germany Index Fund (``EWG''), iShares 
MSCI Australia Index Fund (``EWA''), iShares S&P 500 Growth Index Fund 
(``IVW''), iShares S&P 500 Value Index Fund (``IVE''),\7\ iShares KLD 
Select Social Index Fund (``KLD''), and iShares KLD 400 Social Index 
Fund (``DSI'').\8\
---------------------------------------------------------------------------

    \6\ iShares[supreg] is a registered trademark of Barclays Global 
Investors, N.A. (``BGI''), a wholly owned subsidiary of Barclays 
Bank PLC. ``Dow Jones,'' and ``Dow Jones U.S. Basic Materials Sector 
Index Fund'' are trademarks and service marks of Dow Jones & 
Company, Inc. (``Dow Jones'') and have been licensed for use for 
certain purposes by BGI. All other trademarks and service marks are 
the property of their respective owners. IYM is not sponsored, 
endorsed, issued, sold or promoted by Dow Jones. BGI and Dow Jones 
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 IYM; or (ii) 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 IYM or 
with making disclosures concerning options on IYM under any 
applicable federal or state laws, rules or regulations. BGI and Dow 
Jones do not sponsor, endorse, or promote such activity by ISE, and 
are not affiliated in any manner with ISE.
    \7\ iShares[supreg] is a registered trademark BGI, a wholly 
owned subsidiary of Barclays Bank PLC. ``Standard & 
Poor's[supreg],'' ``S&P[supreg],'' ``S&P 500[supreg],'' are 
trademarks of The McGraw-Hill Companies, Inc. (``McGraw-Hill''), and 
have been licensed for use for certain purposes by BGI. Neither IVW 
nor IVE are sponsored, sold or endorsed by Standard & Poor's, 
(``S&P''), a division of McGraw-Hill, and S&P makes no 
representation regarding the advisability of investing in IVW and 
IVE. ``MSCI Germany Index'' and ``MSCI Australia Index'' are service 
marks of Morgan Stanley Capital International (``MSCI'') and have 
been licensed for use for certain purposes by BGI. All other 
trademarks and service marks are the property of their respective 
owners. Neither EWG nor EWA are sponsored, endorsed, issued, sold or 
promoted by MSCI. BGI, S&P and MSCI 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 IVW, IVE, EWG 
and EWA; or (ii) 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 IVW, IVE, EWG and 
EWA or with making disclosures concerning options on IVW, IVE, EWG 
and EWA under any applicable federal or state laws, rules or 
regulations. BGI, S&P and MSCI do not sponsor, endorse, or promote 
such activity by ISE, and are not affiliated in any manner with ISE.
    \8\ iShares[supreg] is a registered trademark of BGI, a wholly 
owned subsidiary of Barclays Bank PLC. ``KLD Select 
SocialSM Index'' and ``Domini 400 SocialSM 
Index'' are service marks of KLD Research & Analytics, Inc. and have 
been licensed for use for certain purposes by BGI. All other 
trademarks and service marks are the property of their respective 
owners. Neither KLD nor DSI are sponsored, endorsed, issued, sold or 
promoted by KLD Research & Analytics, Inc. BGI and KLD Research & 
Analytics, Inc. 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 KLD and DSI; or (ii) 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 KLD and DSI or with making disclosures 
concerning options on KLD and DSI under any applicable federal or 
state laws, rules or regulations. BGI and KLD Research & Analytics, 
Inc. do not sponsor, endorse, or promote such activity by ISE, and 
are not affiliated in any manner with ISE.
---------------------------------------------------------------------------

    All of the applicable fees covered by this filing are identical to 
fees charged by the Exchange for all other Premium Products.\9\ 
Specifically, the Exchange is proposing to adopt an execution fee and a 
comparison fee for all transactions in options on IYM, EWG, EWA, IVW, 
IVE, KLD and DSI.\10\ 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 \11\ 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.\12\ Finally, the amount of the 
execution fee and comparison fee for all non-ISE Market Maker 
transactions shall be $0.16 and $0.03 per contract, respectively. 
Further, since options on IYM, EWG, EWA, IVW, IVE, KLD and DSI are 
multiply-listed, the 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.
---------------------------------------------------------------------------

    \9\ The Exchange represents that IYM, EWG, EWA, IVW, IVE, KLD 
and DSI constitute ``Fund Shares,'' as defined by ISE Rule 502(h).
    \10\ 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). See Securities Exchange Act Release No. 54204 (July 25, 
2006), 71 FR 43548 (August 1, 2006) (SR-ISE-2006-38).
    \11\ ``Public Customer Order'' is defined in Exchange Rule 
100(a)(39) as an order for the account of a Public Customer. 
``Public Customer'' is defined in Exchange Rule 100(a)(38) as a 
person that is not a broker or dealer in securities.
    \12\ The execution fee is currently between $0.21 and $0.12 per 
contract side, depending on the Exchange Average Daily Volume, and 
the comparison fee is currently $0.03 per contract side.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\13\ in general, and 
furthers the objectives of Section 6(b)(4),\14\ 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.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78f.
    \14\ 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

    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 \15\ and Rule 19b-4(f)(2) 
\16\ 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.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 17 CFR 19b-4(f)(2).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing,

[[Page 17969]]

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-2007-21 on the subject line.

Paper Comments:

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-ISE-2007-21. 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-2007-21 and should be submitted on or before May 1, 
2007.
---------------------------------------------------------------------------

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

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\17\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-6672 Filed 4-9-07; 8:45 am]

BILLING CODE 8010-01-P