Document ID: SEC-2009-0251-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: International Securities Exchange, LLC
Posted Date: 2009-02-25T05:00Z

[Federal Register: February 25, 2009 (Volume 74, Number 36)]
[Notices]               
[Page 8594-8596]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25fe09-105]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59410; File No. SR-ISE-2009-06]

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

February 17, 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 February 11, 2009, the International Securities Exchange, LLC 
(the ``Exchange'' or the ``ISE'') filed with the Securities and 
Exchange Commission (the ``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 to establish 
fees for transactions in options on 7 Premium Products.\3\ 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.
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    \3\ Premium Products is defined in the Schedule of Fees as the 
products enumerated therein.
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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
    The Exchange is proposing to amend its Schedule of Fees to 
establish fees for transactions in options on the ProShares Ultra DJ-
AIG Crude Oil ETF (``UCO''), the ProShares UltraShort DJ-AIG Crude Oil 
ETF (``SCO''),\4\ the ProShares

[[Page 8595]]

UltraShort MidCap 400 ETF (``MZZ''),\5\ the ProShares UltraShort 7-10 
Year Treasury ETF (``PST''),\6\ the iShares GSCI Commodity Indexed 
Trust ETF (``GSG''),\7\ the ProShares Ultra Gold ETF (``UGL'') and the 
ProShares UltraShort Gold ETF (``GLL''). The Exchange represents that 
UCO, SCO, MZZ, PST, GSG, UGL and GLL are eligible for options trading 
because they constitute ``Exchange-Traded Fund Shares,'' as defined by 
ISE Rule 502(h).
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    \4\ ``Dow Jones,'' AIG``[supreg]'', ``The Dow Jones-AIG Crude 
Oil Sub-Index SM'' and ``DJ-AIGCL SM'' are 
service marks of Dow Jones & Company, Inc. and American 
International Group, Inc. (``American International Group''), as the 
case may be, and have been licensed for use by ProShares Capital 
Management. The ProShares UltraShort DJ-AIG Crude Oil ETF (``SCO'') 
and the ProShares Ultra DJ-AIG Crude Oil ETF (``UCO'') are based on 
the Dow Jones-AIG Crude Oil Index SM and are not 
sponsored, endorsed, sold or promoted by Dow Jones, AIG Financial 
Products Corp. (``AIG-FP''), American International Group, or any of 
their respective subsidiaries or affiliates. Dow Jones, AIG-FP, and 
American International Group 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 SCO and UCO or (ii) 
to 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 SCO and UCO or with making 
disclosures concerning options on SCO and UCO under any applicable 
federal or state laws, rules or regulations. Dow Jones, AIG-FP, and 
American International Group do not sponsor, endorse, or promote 
such activity by ISE and are not affiliated in any manner with ISE.
    \5\ ``Standard & Poor's'', ``S&P'', ``S&P 400'', and ``Standard 
& Poor's 400'' are trademarks of The McGraw-Hill Companies, Inc. 
(``McGraw-Hill'') and have been licensed for use for certain 
purposes by ProShares Trust. All other trademarks and service marks 
are the property of their respective owners. The ProShares 
UltraShort MidCap 400 ETF (``MZZ'') is not sponsored, endorsed, sold 
or promoted by Standard & Poor's, (``S&P''), a division of McGraw-
Hill. S&P 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 MZZ or (ii) to 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 MZZ or with making disclosures concerning options on MZZ 
under any applicable federal or state laws, rules or regulations. 
S&P does not sponsor, endorse, or promote such activity by ISE and 
is not affiliated in any manner with ISE.
    \6\ ``Barclays Capital'' and ``Barclays Capital Inc.'' are 
trademarks of Barclays Capital Inc. (``Barclays'') and have been 
licensed for use for certain purposes by ProShares Trust. All other 
trademarks and service marks are the property of their respective 
owners. The ProShares UltraShort 7-10 Treasury ETF (``PST'') is not 
sponsored, endorsed, sold or promoted by Barclays. Barclays 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 PST or (ii) to 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 PST or 
with making disclosures concerning options on PST under any 
applicable federal or state laws, rules or regulations. Barclays 
does not sponsor, endorse, or promote such activity by ISE and is 
not affiliated in any manner with ISE.
    \7\ iShares [supreg] is a registered trademark of Barclays 
Global Investors, N.A. (``BGI''), a wholly owned subsidiary of 
Barclays Bank PLC. ``GSCI [supreg]'' is a registered trademark of 
Goldman, Sachs & Co. (``Goldman'') and has been licensed for use for 
certain purposes by BGI. All other trademarks and service marks are 
the property of their respective owners. The iShares GSCI Commodity 
Indexed Trust (``GSG'') is not sponsored, sold, endorsed or promoted 
by Goldman. Goldman and BGI 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 GSG or (ii) to 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 GSG or with making disclosures concerning 
options on GSG under any applicable federal or state laws, rules or 
regulations. Goldman and BGI do not sponsor, endorse, or promote 
such activity by ISE and are not affiliated in any manner with 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 for 
all transactions in options on UCO, SCO, MZZ, PST, GSG, UGL and GLL.\8\ 
The amount of the execution fee for products covered by this filing 
shall be $0.18 per contract for all Public Customer Orders \9\ and 
$0.20 per contract for all Firm Proprietary orders. The amount of the 
execution fee for all ISE Market Maker transactions shall be equal to 
the execution fee currently charged by the Exchange for ISE Market 
Maker transactions in equity options.\10\ Finally, the amount of the 
execution fee for all non-ISE Market Maker transactions shall be $0.45 
per contract.\11\ Further, since options on UCO, SCO, MZZ, PST, GSG, 
UGL and GLL are multiply-listed, the Exchange's Payment for Order Flow 
fee shall apply to all these products. 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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    \8\ These fees will be charged only to Exchange members. Under a 
pilot program that is set to expire on July 31, 2009, 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 [sic] per 
contract side and $0.15 [sic] per contract side, respectively. See 
Securities Exchange Act Release No. 58143 (July 11, 2008), 73 FR 
41388 (July 18, 2008) (SR-ISE-2008-52). The Commission notes that 
the Exchange failed to accurately reflect the increased execution 
fees for linkage orders, which are now $0.27 for Linkage P orders 
and $0.18 for Linkage P/A orders. See Securities Exchange Act 
Release No. 58139 (July 10, 2008), 73 FR 41142 (July 17, 2008) (SR-
ISE-2008-54).
    \9\ 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 or entity that is 
not a broker or dealer in securities.
    \10\ The Exchange applies a sliding scale, between $0.01 and 
$0.18 per contract side, based on the number of contracts an ISE 
market maker trades in a month.
    \11\ The amount of the execution fee for non-ISE Market Maker 
transactions executed in the Exchange's Facilitation and 
Solicitation Mechanisms is $0.19 per contract.
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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,\12\ in general, and 
furthers the objectives of Section 6(b)(4),\13\ 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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    \12\ 15 U.S.C. 78f.
    \13\ 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 \14\ and Rule 19b-4(f)(2) \15\ 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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    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 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 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-2009-06 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 No. SR-ISE-2009-06. This file 
number

[[Page 8596]]

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 No. SR-ISE-2009-06 and should be submitted on or 
before March 18, 2009.
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    \16\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E9-3979 Filed 2-24-09; 8:45 am]

BILLING CODE 8011-01-P