Document ID: SEC-2008-0142-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: International Securities Exchange, LLC
Posted Date: 2008-01-29T05:00Z

[Federal Register: January 29, 2008 (Volume 73, Number 19)]
[Notices]               
[Page 5246-5248]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29ja08-105]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57185; File No. SR-ISE-2008-07]

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

January 22, 2008.
    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 January 14, 2008, the International Securities Exchange, LLC 
(``ISE'' or ``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 substantially 
prepared by the ISE. The ISE has designated this proposal as one 
establishing or changing a due, fee, or other charge applicable only to 
a member 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

    The 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 change is available at the ISE, at the 
Commission's Public Reference Room, and on the ISE's Web site (http://www.iseoptions.com/legal/proposed_rule_changes.asp
).

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    \5\ ``Premium Products'' is defined in the Schedule of Fees as 
the products enumerated therein.

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[[Page 5247]]

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 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. The 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 iShares MSCI Mexico 
Index Fund (``EWW''),\6\ FocusShares ISE-Revere Wal-Mart Supplier Index 
Fund (``WSI''),\7\ FocusShares ISE-ndash;CMM Homeland Security Index 
Fund (``MYP''), FocusShares ISE SINdex Fund (``PUF''), and FocusShares 
ISE Homebuilders Index Fund (``SAW'').\8\ The Exchange represents that 
EWW, MYP, PUF, SAW and WSI are eligible for options trading because 
they constitute ``Exchange-Traded Fund Shares,'' as defined by ISE Rule 
502(h).
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    \6\ iShares[supreg] is a registered trademark of Barclays Global 
Investors, N.A. (``BGI''), a wholly owned subsidiary of Barclays 
Bank PLC. ``MSCI Mexico 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. EWW 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 EWW; or (ii) 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 EWW or with 
making disclosures concerning options on EWW 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.
    \7\ The ISE-Revere Wal-Mart Supplier Index was jointly developed 
by ISE and Revere Data, LLC (``Revere''). Revere, an independent and 
privately owned provider of research data and investment analytics, 
provides specific research and support for the Wal-Mart Supplier 
Index. Wal-Mart[supreg] is a trademark of Wal-Mart Stores, Inc. The 
Wal-Mart Supplier Index (``WMX'') is not sponsored, endorsed, sold 
or promoted by Wal-Mart Stores, Inc., and Wal-Mart Stores, Inc. 
makes no representation regarding the advisability of investing in 
WMX. Wal-Mart Stores, Inc. 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 exchange-traded 
funds based on WMX (``WMX ETF options''); or (ii) use any of their 
trademarks or service marks in connection with the listing, 
provision of a market for trading, marketing, and promotion of WMX 
ETF options or with making disclosures concerning WMX ETF options 
under any applicable federal or state laws, rules or regulations. 
Wal-Mart Stores, Inc. does not sponsor, endorse, or promote such 
activity by ISE, and is not affiliated in any manner with ISE.
    \8\ FocusShares is a registered trademark of FocusShares, LLC. 
``ISE Homebuilders Index,'' ``ISE SINdex,'' ``ISE-CCM Homeland 
Security Index,'' and ``ISE-Revere Wal-Mart Supplier Index'' are 
trademarks of the ISE and have been licensed for use for certain 
purposes by FocusShares. All other trademarks and service marks are 
the property of their respective owners. FocusShares ISE 
Homebuilders Index Fund, FocusShares ISE SINdex Fund, FocusShares 
ISE-CCM Homeland Security Index Fund, and FocusShares ISE-Revere 
Wal-Mart Supplier Index Fund are not sponsored, endorsed, issued, 
sold or promoted by 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 EWW, MYP, PUF, SAW 
and WSI.\9\ 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 \10\ 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.\11\ 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.\12\ 
Further, since options on EWW are multiply-listed, the Exchange's 
Payment for Order Flow fee shall apply only to this one product. 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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    \9\ 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). Telephone conversation between Samir 
Patel, Assistant General Counsel, ISE, and Sara Gillis, Special 
Counsel, Division of Trading and Markets, Commission, on January 17, 
2008.
    \10\ ``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 that is not a broker or dealer in securities.
    \11\ The execution fee is currently between $0.21 and $0.12 per 
contract side, depending on the Exchange Average Daily Volume, and 
the comparison fee is currently $0.03 per contract side.
    \12\ 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, as a matter of housekeeping, the Exchange proposes to 
remove FTZ from its Schedule of Fees.\13\
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    \13\ FTZ was recently delisted and no longer trades on the 
Exchange.
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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,\14\ in general, and 
furthers the objectives of Section 6(b)(4),\15\ 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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    \14\ 15 U.S.C. 78f.
    \15\ 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

    Because the foregoing rule change establishes or changes a due, 
fee, or other charge imposed by the Exchange, it has become effective 
pursuant to Section 19(b)(3)(A) of the Act \16\ and Rule 19b-4(f)(2) 
\17\ 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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    \16\ 15 U.S.C. 78s(b)(3)(A).
    \17\ 17 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.

[[Page 5248]]

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-2008-07 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-ISE-2008-07. 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 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-2008-07 and should be 
submitted on or before February 19, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
Florence E. Harmon,
Deputy Secretary.
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    \18\ 17 CFR 200.30-3(a)(12).
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 [FR Doc. E8-1482 Filed 1-28-08; 8:45 am]

BILLING CODE 8011-01-P