Document ID: SEC-2008-0736-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: International Securities Exchange, LLC
Posted Date: 2008-05-23T04:00Z

[Federal Register: May 23, 2008 (Volume 73, Number 101)]
[Notices]               
[Page 30176-30178]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23my08-124]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57831; File No. SR-ISE-2008-39]

 
Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule 
Change To Amend its Schedule of Fees To Establish Fees for Transactions 
in Options on Five Premium Products

May 16, 2008.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder, \2\ notice is hereby given 
that on May 9, 2008, International Securities Exchange, LLC (``ISE'' or 
the ``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 ISE. The Exchange has 
designated this proposal as one establishing or changing a member due, 
fee, or other charge imposed by 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

    ISE is proposing to amend its Schedule of Fees to establish fees 
for transactions in options on five Premium Products.\5\ The text of 
the proposed rule

[[Page 30177]]

change is available at http://www.ise.com, the principal offices of the 
Exchange, and the Commission's Public Reference Room.
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    \5\ 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, 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. 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 CurrencyShares\SM\ 
Australian Dollar Trust (``FXA''), the CurrencyShares\SM\ British Pound 
Sterling Trust (``FXB''), the CurrencyShares\SM\ Euro Trust (``FXE''), 
the CurrencyShares\SM\ Japanese Yen Trust (``FXY'') \6\ and the iShares 
MSCI Taiwan Index Fund (``EWT'').\7\ The Exchange represents that FXA, 
FXB, FXE, FXY and EWT are eligible for options trading because they 
constitute ``Exchange-Traded Fund Shares,'' as defined by ISE Rule 
502(h).
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    \6\ CurrencyShares\SM\ Australian Dollar Trust, 
CurrencyShares\SM\ British Pound Sterling Trust, CurrencyShares\SM\ 
Euro Trust, and CurrencyShares\SM\ Japanese Yen Trust are service 
marks of their respective owner(s). Rydex Distributors, Inc., an 
affiliate of Rydex Investments and Rydex Specialized Products, is 
the distributor of Rydex funds. Rydex Specialized Products LLC, d/b/
a Rydex Investments (``Rydex''), is the sponsor of the 
CurrencyShares\SM\ Australian Dollar Trust (``FXA''), the 
CurrencyShares\SM\ British Pound Sterling Trust (``FXB''), the 
CurrencyShares\SM\ Euro Trust (``FXE'') and the CurrencyShares\SM\ 
Japanese Yen Trust (``FXY''). Rydex 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 FXA, FXB, FXE 
and FXY or (ii) to use and refer to any trademarks or service marks 
in connection with the listing, provision of a market for trading, 
marketing, and promotion of options on FXA, FXB, FXE and FXY or with 
making disclosures concerning options on FXA, FXB, FXE and FXY under 
any applicable federal or state laws, rules or regulations. Rydex 
does not sponsor, endorse, or promote such activity by ISE, and is 
not affiliated in any manner with ISE.
    \7\ iShares[supreg] is a registered trademark of Barclays Global 
Investors, N.A. (``BGI''), a majority owned subsidiary of Barclays 
Bank PLC. ``MSCI Taiwan Index'' is a service mark of Morgan Stanley 
Capital International (``MSCI'') and has been licensed for use for 
certain purposes by BGI. All other trademarks and service marks are 
the property of their respective owners. iShares MSCI Taiwan Index 
Fund (``EWT'') is not sponsored, endorsed, issued, sold or promoted 
by MSCI. BGI 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 EWT 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 EWT or with making disclosures concerning options on 
EWT under any applicable federal or state laws, rules or 
regulations. BGI and MSCI do not sponsor, endorse, or promote such 
activity by ISE, and are 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 and a 
comparison fee for all transactions in options on FXA, FXB, FXE, FXY 
and EWT.\8\ 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 \9\ 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.\10\ Finally, the amount of the 
execution fee and comparison fee for all non-ISE Market Maker 
transactions shall be $0.37 and $0.03 per contract, respectively.\11\ 
Further, since options on FXA, FXB, FXE, FXY and EWT 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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    \8\ These fees will be charged only to Exchange members. Under a 
pilot program that is set to expire on July 31, 2008, 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 $0.24 per contract 
side and $0.15 per contract side, respectively. See Securities 
Exchange Act Release No. 56128 (July 24, 2007), 72 FR 42161 (August 
1, 2007) (SR-ISE-2007-55).
    \9\ 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.
    \10\ The 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 side.
    \11\ The amount of the execution and comparison fee for non-ISE 
Market Maker transactions executed in the Exchange's Facilitation 
and Solicitation Mechanisms is $0.16 and $0.03 per contract, 
respectively.
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    Further, the Exchange proposes to remove IXK from its Schedule of 
Fees.\12\
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    \12\ This Premium Product was recently delisted and no longer 
trades on the Exchange. Thus, the Exchange proposes to remove it 
from 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,\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.
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    \13\ 15 U.S.C. 78f.
    \14\ 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 proposed rule change has been designated as a fee 
change pursuant to section 19(b)(3)(A)(ii) of the Act \15\ and Rule 
19b-4(f)(2) \16\ thereunder, because it establishes or changes a due, 
fee, or other charge imposed on members by ISE. Accordingly, the 
proposal is effective upon filing with the Commission. At any time 
within 60 days of the filing of the 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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    \15\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \16\ 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 proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

[[Page 30178]]

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 Number SR-ISE-2008-39 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-ISE-2008-39. 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, 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 Exchange. 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 publicly available. All 
submissions should refer to File Number SR-ISE-2008-39 and should be 
submitted on or before June 13, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-11523 Filed 5-22-08; 8:45 am]

BILLING CODE 8010-01-P