Document ID: SEC-2007-0783-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: International Securities Exchange, LLC
Posted Date: 2007-06-06T04:00Z

[Federal Register: June 6, 2007 (Volume 72, Number 108)]
[Notices]               
[Page 31360-31361]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06jn07-134]                         

[[Page 31360]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55836; File No. SR-ISE-2007-31]

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

May 31, 2007.
    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 May 2, 2007, 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 two Premium Products.\5\ The text 
of the proposed rule change is available at the Exchange, the 
Commission's Public Reference Room, and at http://www.iseoptions.com.

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    \5\ ``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 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 following two Premium 
Products: Rydex S&P Equal Weight ETF (``RSP'') \6\ and iShares Goldman 
Sachs Semiconductor Index Fund (``IGW'').\7\ The Exchange represents 
that RSP and IGW are eligible for options trading because they 
constitute ``Fund Shares,'' as defined by ISE Rule 502(h).
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    \6\ ``Standard & Poor's[supreg],'' ``S&P[supreg],'' ``S&P 
500[supreg],'' ``Standard & Poor's 500,'' ``500,'' and ``S&P 500 
Equal Weight Index'' are trademarks of The McGraw-Hill Companies, 
Inc. (``McGraw-Hill'') and have been licensed for use by Rydex 
Global Advisors and its affiliates (``Rydex''). RSP is not 
sponsored, sold, promoted or endorsed by S&P, a division of McGraw-
Hill, and S&P makes no representation regarding the advisability of 
investing in RSP. All other trademarks, service marks, or registered 
trademarks are the property of their respective owners. Neither 
Rydex nor S&P have licensed or authorized ISE to (i) Engage in the 
creation, listing, provision of a market for trading, marketing, and 
promotion of options on RSP 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 RSP or with making disclosures concerning options on RSP 
under any applicable federal or state laws, rules or regulations. 
Rydex and S&P do not sponsor, endorse, or promote such activity by 
ISE and are 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. ``Goldman Sachs'' and ``Goldman Sachs Technology Industry 
Semiconductor Index'' are service marks of Goldman Sachs and Co. 
(``Goldman Sachs'') and have been licensed for use for certain 
purposes by BGI. IGW is not sponsored, endorsed, sold or promoted by 
Goldman Sachs, and Goldman Sachs makes no representation regarding 
the advisability of investing in IGW. All other trademarks, service 
marks or registered trademarks are the property of their respective 
owners. Neither BGI nor Goldman Sachs have licensed or authorized 
ISE to (i) Engage in the creation, listing, provision of a market 
for trading, marketing, and promotion of options on IGW 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 IGW or with making disclosures concerning 
options on IGW under any applicable federal or state laws, rules or 
regulations. BGI and Goldman Sachs 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 and a 
comparison fee for all transactions in options on RSP and IGW.\8\ 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 \9\ 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.\10\ Finally, the amount of the execution fee and 
comparison fee for all non-ISE Market Maker transactions shall be $0.16 
and $0.03 per contract, respectively. Further, since options on RSP and 
IGW are multiply-listed, the Payment for Order Flow fee shall also 
apply. 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\ The Exchange represents that these fees will be charged only 
to Exchange members. Under a pilot program that is set to expire on 
July 31, 2007, these fees will also be charged to Linkage Orders (as 
defined in ISE Rule 1900). See Securities Exchange Act Release No. 
54204 (July 25, 2006), 71 FR 43548 (August 1, 2006) (SR-ISE-2006-
38).
    \9\ ``Public Customer Order'' is defined in ISE Rule 100(a)(39) 
as an order for the account of a Public Customer. ``Public 
Customer'' is defined in ISE Rule 100(a)(38) as a person that is not 
a broker or dealer in securities.
    \10\ The execution fee is currently between $.21 and $.12 per 
contract side, depending on the Exchange Average Daily Volume, and 
the comparison fee is currently $.03 per contract side.
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    Further, the Exchange proposes to remove IWF, IWP, IWS and IWV from 
its Schedule of Fees because the Exchange recently delisted these four 
Premium Products, and they no longer trade on the Exchange.\11\
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    \11\ Certain clarifying language changes were made to the 
original filing. Telephone call between Samir Patel, Assistant 
General Counsel, ISE and Richard Holley, Special Counsel, Division 
of Market Regulation, Commission, on May 25, 2007.
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    Finally, the Exchange notes that the symbol for EENC has changed to 
ENT,\12\ and the Schedule of Fees has been updated to reflect that 
change.\13\
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    \12\ On February 9, 2007, Enterra Energy Trust, whose options 
are currently traded on the Exchange, changed its ticker symbol from 
EENC to ENT.
    \13\ See supra note 11.
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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

[[Page 31361]]

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 \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 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-2007-31 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-2007-31. 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-2007-31 and should be submitted on or before June 
27, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-10874 Filed 6-5-07; 8:45 am]

BILLING CODE 8010-01-P