Document ID: SEC-2007-0676-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: International Securities Exchange, LLC
Posted Date: 2007-05-14T04:00Z

[Federal Register: May 14, 2007 (Volume 72, Number 92)]
[Notices]               
[Page 27159-27160]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14my07-67]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55722; File No. SR-ISE-2007-24]

 
Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change and Amendments No. 1 and 2 Thereto Relating to Market Data 
Revenue Rebates

May 8, 2007.
    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 April 11, 2007, the International Securities Exchange, LLC 
(``Exchange'' or ``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 substantially 
prepared by the Exchange. The Exchange filed Amendment No. 1 to the 
proposed rule change on April 23, 2007, and Amendment No. 2 on May 3, 
2007. The ISE filed this proposed rule change which establishes dues, 
fees or other charges among its members pursuant to Section 
19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2) \4\ thereunder, 
and, as such, it has become effective upon filing with the Commission. 
The Commission is publishing this notice to solicit comments on the 
proposed rule change, as amended, 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 relating to its 
sharing of market data revenues. The text of the proposed rule change 
is available at the ISE, the Commission's Public Reference Room, and 
http://www.iseoptions.com/legal/proposed_rule_changes.asp.

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 Exchange 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 Exchange 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 purpose of this proposed rule change is to amend the Exchange's 
Schedule of Fees to clarify that while the Exchange will continue to 
rebate back to Equity Electronic Access Members (``EAMs'') fifty 
percent (50%) of its market data revenues, it will now do so based on 
the Allocation Amendment of Regulation NMS enacted under the Act--i.e., 
allocated by quoting shares and trading shares.\5\ The Exchange will be 
retroactively applying this formula to market data revenues rebated 
back to Equity EAMs as of April 1, 2007.
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    \5\ See Securities Exchange Act Release No. 53828 (May 18, 2006) 
(order exempting self-regulatory organizations (``SROs'') from 
compliance with the Allocation Amendment until April 1, 2007).
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    Currently, the ISE rebates back fifty percent (50%) of the market 
data revenue received by the Exchange to Equity EAMs that are the 
liquidity providers on trades executed in the displayed market. The 
Allocation Amendment of Regulation NMS modifies the existing formulas 
for allocating revenues to the SRO participants, namely, introducing: 
(1) ``Quoting Shares''--the allocation of revenues based on the extent 
to which automated quotations displayed by SROs equal the national best 
bid or offer in NMS stocks; and (2) implementing a new calculation 
method for allocating revenue based on ``Trade Shares.'' Under this new 
formula fifty percent (50%) of revenues will be allocated for Quoting 
Shares and fifty percent (50%) will be allocated for Trading Shares. 
Accordingly, the Exchange seeks to continue to rebate back to the 
Equity EAMs fifty percent (50%) of market data revenue the Exchange 
receives, but to allocate rebates based on this new formula--i.e., the 
ISE will rebate to Equity EAMs, on a symbol basis, fifty percent (50%) 
of the Trading Share revenue received for that symbol and fifty percent 
(50%) of the Quoting Share revenue for that symbol.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(4) \6\ that an exchange have an 
equitable allocation of reasonable dues, fees, and other charges

[[Page 27160]]

among its members and other persons using its facilities.
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    \6\ 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 become effective upon filing 
with the Commission pursuant to Section 19(b)(3)(A)(ii) of the Act \7\ 
and Rule 19b-4(f)(2) thereunder,\8\ in that the proposed rule change 
establishes or changes a member due, fee, or other charge imposed by 
the self-regulatory organization. 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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    \7\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \8\ 17 CFR 240.19, 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:

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-2007-24 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-2007-24. 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-2007-24 and should be submitted on or before June 4, 
2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-9178 Filed 5-11-07; 8:45 am]

BILLING CODE 8010-01-P