Document ID: SEC-2009-0491-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the International Securities Exchange, LLC Relating to Amending the Direct Edge ECN Fee Schedule Applicable to International Securities Exchange Members
Posted Date: 2009-04-08T04:00Z

[Federal Register: April 8, 2009 (Volume 74, Number 66)]
[Notices]               
[Page 16024-16025]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08ap09-115]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59692; File No. SR-ISE-2009-17]

 
Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the International Securities 
Exchange, LLC Relating to Amending the Direct Edge ECN Fee Schedule 
Applicable to International Securities Exchange Members

April 2, 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 March 27, 2009, the International Securities Exchange, LLC (the 
``Exchange'' or the ``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 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 Exchange proposes to amend Direct Edge ECN's (``DECN'') fee 
schedule for ISE Members to lower the rebate for orders that add 
liquidity on EDGX in securities priced at or above $1.00 that are 
reported to Tape B. The text of the proposed rule change is available 
on the Exchange's Internet Web site at http://www.ise.com.

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.

[[Page 16025]]

The self-regulatory organization 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
    On December 23, 2008, the ISE closed a transaction whereby, among 
other things, ISE Stock Exchange, LLC (``ISE Stock Exchange''), a 
Delaware limited liability company, merged with and into Maple Merger 
Sub, LLC (``Maple Merger Sub''), a Delaware limited liability company 
and a wholly owned subsidiary of Direct Edge Holdings LLC (``Direct 
Edge''), with Maple Merger Sub being the surviving entity.\3\ As part 
of the same transaction, ISE Holdings purchased equity interests in 
Direct Edge such that subsequent to completing the transaction, ISE 
Holdings owns a 31.54% equity interest in Direct Edge. Following the 
closing of the transaction, the Commission deemed DECN to be a facility 
of the ISE, which would require ISE to file rules for DECN. However, 
the Commission granted ISE a temporary exemption from the rule filing 
requirements imposed by Section 19(b) of the Act, provided that ISE and 
DECN comply with certain conditions, including but not limited to, 
requiring ISE to file a proposed rule change if DECN's fee schedule is 
sought to be modified.\4\
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    \3\ See Securities and Exchange Commission Release No. 34-59135 
(December 22, 2008), 73 FR 79954 (December 30, 2008)(SR-ISE-2008-85) 
(Order approving a proposed rule change, as modified by Amendment 
No. 1, to purchase by International Securities Exchange Holdings, 
Inc. of an ownership interest in Direct Edge).
    \4\ The Commission notes that this exemption was granted, 
subject to certain conditions, to ISE with respect to DE ECN only, 
to allow DECN to operate as a facility of ISE without being subject 
to the rule filing requirements of Section 19(b) of the Act for a 
temporary period. See Exchange Act Release No. 59133 (December 22, 
2008), 73 FR 79940 (December 30, 2009) (Order granting application 
for a temporary conditional exemption pursuant to Section 36(a) of 
the Act).
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    Currently, DECN's fee schedule includes a rebate for ISE Members of 
$0.0035 per share for orders that add liquidity on EDGX in securities 
priced at or above $1.00 that are reported to Tape B. The Exchange is 
now proposing to lower that rebate from $0.0035 to $0.003 per share for 
orders that add liquidity on EDGX in securities priced at or above 
$1.00 that are reported to Tape B. The Exchange is lowering this rebate 
to keep its pricing consistent with the ISE Stock Exchange's Schedule 
of Fees. The aforementioned fee change will become operative on April 
1, 2009.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\5\ in general, and 
furthers the objectives of Section 6(b)(4),\6\ 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. In particular, lowering the rebate in Tape B securities 
will allow DECN's rebate to match the rebate provided on the ISE Stock 
Exchange.
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    \5\ 15 U.S.C. 78f.
    \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 rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \7\ and Rule 19b-4(f)(2) \8\ 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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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 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-2009-17 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 Number SR-ISE-2009-17. 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-2009-17 and should be submitted by April 29, 2009.

    For the Commission, by the Division of Trading and Markets, 
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. E9-7976 Filed 4-7-09; 8:45 am]

BILLING CODE 8010-01-P