Document ID: SEC-2010-1657-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: International Securities Exchange, LLC
Posted Date: 2010-10-28T04:00Z

[Federal Register: October 28, 2010 (Volume 75, Number 208)]
[Notices]               
[Page 66410-66411]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28oc10-74]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63165; File No. SR-ISE-2010-102]

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

October 22, 2010.
    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 October 14, 2010, 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 and II below, which items have been prepared by 
the Exchange. 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 adopt ISE Rule 212 (Sales Value Fee). 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.

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 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Pursuant to Section 31 of the Securities Act and Rule 31 
thereunder,\3\ national securities exchanges and associations 
(collectively, ``SROs'') are required to pay a transaction fee to the 
Commission that is designed to recover the costs related to the 
government's supervision and regulation of the securities markets and 
securities professionals. To offset this obligation, the Exchange 
Members are assessed charges in connection with satisfaction of the 
Exchange's payment obligations under Section 31. The fee is collected 
indirectly from Exchange Members through their clearing firms by the 
Options Clearing Corporation (``OCC'') on behalf of the Exchange with 
respect to options sales and options exercises. The fee is collected by 
billing the Member's designated clearing firm for the amount owed by 
the member to the Exchange.
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    \3\ 17 CFR 240.31.
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    The Exchange is now proposing to codify this process by adopting 
proposed Rule 212 (Sales Value Fee). Proposed ISE Rule 212 defines the 
Sales Value Fee (``Fee'') as the fee assessed by ISE to each member for 
sales of securities on ISE with respect to which ISE is obligated to 
pay a fee to the Commission under Section 31 of the Exchange Act. 
Proposed ISE Rule 212 provides that, to the extent the Exchange may 
collect more from Members under ISE Rule 212 than is due to from the 
Exchange to the Commission under Section 31 of the Exchange Act, for 
example due to rounding differences, the excess monies collected may be 
used by the Exchange to fund its general operating expenses.
    Proposed ISE Rule 212 explains that the transactions to which the 
Fee applies are sales of options (other than options on a security 
index) and sales of securities resulting from the exercise of physical-
delivery options traded on ISE. As discussed above, the proposed rule 
specifies that the Fee is collected indirectly from Exchange Members 
through their clearing firms by the OCC on behalf of the Exchange with 
respect to options sales and options exercises. Proposed ISE Rule 212 
also sets forth the formula for calculating the Fee with respect to 
covered options transactions, which is equal to (a) the Commission's 
Section 31 fee rate multiplied by (b) the Member's aggregate dollar 
mount [sic] of covered sales resulting from options transactions 
occurring on the Exchange during any computational period.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\4\ in general, and 
furthers the objectives of

[[Page 66411]]

Section 6(b)(4),\5\ 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. The 
proposed rule is simply codifying a practice currently employed by 
Exchange and the OCC to ensure that the Exchange is compliant with 
Section 31 of the Exchange Act. By adopting this rule, the Exchange is 
providing Members with a description of the Fee and the process by 
which the Fee is collected.
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    \4\ 15 U.S.C. 78f(f).
    \5\ 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 \6\ and Rule 19b-4(f)(2) thereunder \7\ because it 
establishes a due, fee, or other charge imposed on its members by ISE. 
At any time within 60 days of the filing of the proposed rule change, 
the Commission summarily may temporarily suspend 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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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 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:

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-2010-102 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-2010-102. 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 Web site viewing and 
printing 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 the 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 available publicly. All 
submissions should refer to File Number SR-ISE-2010-102 and should be 
submitted on or before November 18, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-27245 Filed 10-27-10; 8:45 am]
BILLING CODE 8011-01-P