Document ID: SEC-2009-1762-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Fee Changes
Posted Date: 2009-12-14T05:00Z

[Federal Register: December 14, 2009 (Volume 74, Number 238)]
[Notices]               
[Page 66190-66191]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14de09-106]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61131; File No. SR-ISE-2009-101]

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

December 8, 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 November 24, 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 ISE is proposing to amend its Schedule of Fees regarding its 
Competitive Market Maker (``CMM'') Inactivity Fee. The text of the 
proposed rule change is available on the Exchange's Web site (http://
www.ise.com), on the Commission's Web site at http://www.sec.gov, at 
the principal office of the Exchange, and at the Commission's Public 
Reference Room.

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.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    ISE proposes to amend its Schedule of Fees regarding its CMM 
Inactivity Fee. Specifically, the Exchange proposes to amend its 
current CMM Inactivity Fee for any member who is not currently a market 
maker and acquires one or more CMM Trading Right by providing the 
Exchange the ability to waive this fee for up to three full calendar 
months.
    ISE currently charges the owner \3\ of a CMM membership an 
Inactivity Fee of $25,000 a month per trading right if the owner does 
not (i) itself operate the CMM membership, (ii) lease the CMM trading 
right to another member which operates the CMM membership, or (iii) 
avail itself to one of the exemptions specifically authorized in the 
Notes to the CMM Inactivity Fee on the Schedule of Fees.
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    \3\ The Note to the CMM Inactivity Fee on the Schedule of Fees 
provides that the fee applies to the owner of the CMM membership, 
unless the inactive CMM membership is subject to a lease that was 
approved by the Exchange prior to the effective date of the fee, in 
which case the fee would apply to the lessee.
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    The purpose of the CMM Inactivity Fee has always been to promote 
greater trading activity on the Exchange. The Exchange believes that 
anything short of full utilization of its trading rights has adverse 
consequences. Not only does the Exchange lose fee revenues that these 
trading rights would generate, the ISE market place loses liquidity 
that additional market making would provide. The Exchange, however, 
also recognizes that firms, and in particular firms that are new 
members of the Exchange, need time to ramp up their operations to the 
point where they are able to efficiently operate as a market maker. 
Under the Exchange's current fee schedule, a new market maker would be 
subject to an inactivity fee of $25,000 per Trading Right per month if 
that market maker is not able to commence operations immediately after 
purchasing the Trading Rights. The Exchange believes assessing this fee 
is a strong disincentive for any new member to acquire Trading Rights 
and become a market maker on the Exchange.
    Thus, the Exchange proposes to amend its current CMM Inactivity Fee 
with respect to any member who acquires one or more CMM Trading Right 
by providing the Exchange the ability to waive this fee for up to three

[[Page 66191]]

full calendar months. The waiver, which would be granted by an Exchange 
official designated by the Exchange's Board of Directors, would only 
apply if the member purchasing the Trading Rights is not currently an 
ISE market maker and needs additional time to commence its operations 
on the Exchange as a market maker. The Exchange believes granting the 
waiver will provide new market makers sufficient time to become 
operationally ready.
    This proposed fee change will be operative on December 1, 2009.
2. Statutory Basis
    The basis under the Securities Exchange Act of 1934 (the ``Exchange 
Act'') for this proposed rule change is the requirement under Section 
6(b)(4) that an exchange have an equitable allocation of reasonable 
dues, fees and other charges among its members and other persons using 
its facilities. In particular, the proposed fee change will allow the 
Exchange to recoup lost revenue and encourage the timely operation of 
its CMM Trading Rights.

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 \4\ and Rule 19b-4(f)(2) \5\ 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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    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 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 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-2009-101 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securitiesand Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File No. SR-ISE-2009-101. 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 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-2009-101 and should be 
submitted on or before January 4, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-29647 Filed 12-11-09; 8:45 am]

BILLING CODE 8011-01-P