Document ID: SEC-2009-0560-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: International Securities Exchange, LLC
Posted Date: 2009-04-22T04:00Z

[Federal Register: April 22, 2009 (Volume 74, Number 76)]
[Notices]               
[Page 18416-18418]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22ap09-86]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59777; File No. SR-ISE-2009-20]

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

April 16, 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 April 14, 2009, the International Securities Exchange, LLC (the 
``Exchange'' or the ``ISE'') filed with the Securities and Exchange 
Commission (the ``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 amend its Schedule of Fees to establish 
fees for transactions in options on 3 Premium Products.\3\ 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.
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    \3\ 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 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.

[[Page 18417]]

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 ProShares Ultra 
Silver ETF (``AGQ''), the Direxion Emerging Markets Bull 3x Shares 
(``EDC'') and the Direxion Emerging Markets Bear 3x Shares 
(``EDZ'').\4\ The Exchange represents that AGQ, EDC and EDZ are 
eligible for options trading because they constitute ``Exchange-Traded 
Fund Shares,'' as defined by ISE Rule 502(h).
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    \4\ The MSCI Emerging Markets Index\SM\ is a service mark of 
Morgan Stanley Capital International Inc. (``MSCI'') and has been 
licensed for use by Direxion Shares ETF Trust. All other trademarks 
and service marks are the property of their respective owners. The 
Direxion Emerging Markets Bull 3x Shares (``EDC'') and the Direxion 
Emerging Markets Bear 3x Shares (``EDZ'') are not sponsored, 
endorsed, issued, sold or promoted by MSCI, any of its affiliates, 
any of its information providers or any other third party involved 
in, or related to, compiling, computing or creating the MSCI 
Emerging Markets Index. MSCI 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 EDC and EDZ 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 EDC and EDZ or with making 
disclosures concerning options on EDC and EDZ under any applicable 
Federal or State laws, rules or regulations. MSCI does not sponsor, 
endorse, or promote such activity by ISE and is not affiliated in 
any manner with ISE.
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    All of the applicable fees covered by this filing are identical to 
fees charged by the Exchange for all other Premium Products. 
Specifically, the Exchange is proposing to adopt an execution fee for 
all transactions in options on AGQ, EDC and EDZ.\5\ The amount of the 
execution fee for products covered by this filing shall be $0.18 per 
contract for all Public Customer Orders \6\ and $0.20 per contract for 
all Firm Proprietary orders. The amount of the execution fee for all 
ISE Market Maker transactions shall be equal to the execution fee 
currently charged by the Exchange for ISE Market Maker transactions in 
equity options.\7\ Finally, the amount of the execution fee for all 
non-ISE Market Maker transactions shall be $0.45 per contract.\8\ 
Further, since options on AGQ, EDC and EDZ are multiply-listed, the 
Exchange's Payment for Order Flow fee shall apply to all these 
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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    \5\ These fees will be charged only to Exchange members. Under a 
pilot program that is set to expire on July 31, 2009, these fees 
will also be charged to Linkage Principal Orders (``Linkage P 
Orders'') and Linkage Principal Acting as Agent Orders (``Linkage P/
A Orders''). The amount of the execution fee charged by the Exchange 
for Linkage P Orders and Linkage P/A Orders is $0.27 per contract 
side and $0.18 per contract side, respectively. See Securities 
Exchange Act Release No. 58143 (July 11, 2008), 73 FR 41388 (July 
18, 2008) (SR-ISE-2008-52).
    \6\ 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 or entity that is 
not a broker or dealer in securities.
    \7\ The Exchange applies a sliding scale, between $0.01 and 
$0.18 per contract side, based on the number of contracts an ISE 
market maker trades in a month.
    \8\ The amount of the execution fee for non-ISE Market Maker 
transactions executed in the Exchange's Facilitation and 
Solicitation Mechanisms is $0.20 per contract.
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    Further, as a matter of housekeeping, the Exchange proposes to 
remove FTZ from the surcharge fee line item on its Schedule of fees.\9\
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    \9\ FTZ was previously delisted and no longer trades on the 
Exchange. Pursuant to SR-ISE-2008-07, filed on January 14, 2008, the 
Exchange removed FTZ from its Customer (Premium Products) line item 
and from its Payment for Order Flow line item on its fee schedule. 
In that filing, the Exchange, however, inadvertently failed to 
remove FTZ from its surcharge fee line item on its fee schedule.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\10\ in general, and 
furthers the objectives of Section 6(b)(4),\11\ 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.
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    \10\ 15 U.S.C. 78f.
    \11\ 15 U.S.C. 78f(b)(4).
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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) 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 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 proposal 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-2009-20 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 No. SR-ISE-2009-20. 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 changes 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 ISE. All comments 
received will be posted without change; the Commission does

[[Page 18418]]

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 No. SR-ISE-2009-20 and should be 
submitted on or before May 13, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
Florence E. Harmon,
Deputy Secretary.
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    \14\ 17 CFR 200.30-3(a)(12).
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[FR Doc. E9-9203 Filed 4-21-09; 8:45 am]

BILLING CODE 8010-01-P