Document ID: SEC-2008-0353-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: International Securities Exchange, LLC
Posted Date: 2008-03-06T05:00Z

[Federal Register: March 6, 2008 (Volume 73, Number 45)]
[Notices]               
[Page 12238-12240]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06mr08-117]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57397; File No. SR-ISE-2008-13]

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

February 28, 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 February 11, 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

[[Page 12239]]

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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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 UltraShort FTSE/
Xinhua China 25 ProShares (``FXP''),\6\ UltraShort MSCI Emerging 
Markets ProShares (``EEV''),\7\ iShares Russell 1000 Growth Index Fund 
(``IWF''),\8\ SPDR S&P Retail Select ETF (``XRT''),\9\ and The Market 
Vectors--Agribusiness ETF (``MOO'').\10\ The Exchange represents that 
FXP, EEV, IWF, XRT and MOO are eligible for options trading because 
they constitute ``Exchange-Traded Fund Shares,'' as defined by ISE Rule 
502(h).
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    \6\ ``FTSE[supreg]'' is a trademark jointly owned by the London 
Stock Exchange PLC and The Financial Times Limited and is used by 
FTSE/Xinhua Index Limited (``FXI'') under license. ``Xinhua(r)'' is 
a trademark of Xinhua Finance Limited and is used by FXI under 
license. All other trademarks and service marks are the property of 
their respective owners. The UltraShort FTSE/Xinhua China 25 
ProShares (``FXP'') are not sponsored, endorsed, issued, sold or 
promoted by FXI. FXI 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 FXP 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 FXP or with making disclosures concerning options on 
FXP under any applicable federal or state laws, rules or 
regulations. FXI does not sponsor, endorse, or promote such activity 
by ISE and is not affiliated in any manner with ISE.
    \7\ ``MSCI Emerging Markets Index'' and ``MSCI'' are service 
marks of Morgan Stanley Capital International (``MSCI'') and have 
been licensed for use for certain purposes by ProFunds Trust. All 
other trademarks and service marks are the property of their 
respective owners. The UltraShort MSCI Emerging Markets ProShares 
(``EEV'') are not sponsored, endorsed, issued, sold or promoted by 
MSCI. MSCI 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 EEV 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 EEV or with making disclosures concerning options on EEV 
under any applicable federal or state laws, rules or regulations. 
MSCI does not sponsor, endorse, or promote such activity by ISE and 
is not affiliated in any manner with ISE.
    \8\ iShares[reg] is a registered trademark of Barclays Global 
Investors, N.A. (``BGI''), a wholly owned subsidiary of Barclays 
Bank PLC. ``Russell 1000[reg] Growth Index'' is a trademark of Frank 
Russell Company (``Russell'') and has been licensed for use for 
certain purposes by BGI. All other trademarks and service marks are 
the property of their respective owners. iShares Russell 1000 Growth 
Index Fund (``IWF'') is not sponsored, sold or endorsed by Russell. 
Russell 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 IWF 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 IWF or with making disclosures concerning options on IWF 
under any applicable federal or state laws, rules or regulations. 
Russell and BGI do not sponsor, endorse, or promote such activity by 
ISE and are not affiliated in any manner with ISE.
    \9\ ``Standard & Poor's[reg],'' ``S&P[reg],'' ``Standard & 
Poor's Depositary Receipts[reg],'' ``SPDR[reg]'' and ``the S&P[reg] 
Retail Select Industry Index,'' are trademarks of The McGraw-Hill 
Companies, Inc. (``McGraw-Hill''), and have been licensed for use by 
SSgA Fund Management, Inc., and streetTRACKS[reg] Series Trust in 
connection with the listing and trading of SPDR[reg] S&P Retail 
Select ETF (``XRT''). XRT is not sponsored, sold or endorsed by 
Standard & Poor's, (``S&P''), a division of McGraw-Hill, and S&P 
makes no representation regarding the advisability of investing in 
XRT. McGraw-Hill and S&P 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 XRT 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 XRT or with making disclosures concerning options on 
XRT under any applicable federal or state laws, rules or 
regulations. McGraw-Hill and S&P do not sponsor, endorse, or promote 
such activity by ISE and are not affiliated in any manner with ISE.
    \10\ The Market Vectors--Agribusiness ETF (``MOO'') is 
distributed by Van Eck Securities Corporation and seeks to track the 
DAXglobal[reg] Agribusiness Index, which is published by Deutsche 
B[ouml]rse AG (``Deutsche B[ouml]rse''). The DAXglobal[reg] 
Agribusiness Index is a trademark of Deutsche B[ouml]rse and is 
licensed for use by Van Eck Associates Corporation (``Van Eck'') in 
connection with MOO. Deutsche B[ouml]rse does not sponsor, endorse, 
or promote MOO and makes no representation regarding the 
advisability of investing in MOO. Van Eck 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 MOO 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 MOO or with making 
disclosures concerning options on MOO under any applicable federal 
or state laws, rules or regulations. Van Eck does not sponsor, 
endorse, or promote such activity by ISE and is 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 FXP, EEV, IWF, XRT 
and MOO.\11\ 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 \12\ 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.\13\ 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.\14\ 
Further, since options on FXP, EEV, IWF, XRT and MOO are multiply-
listed, the Exchange's Payment for Order Flow fee shall apply to all of 
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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    \11\ 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).
    \12\ 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.
    \13\ 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.
    \14\ 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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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\15\ in general, and 
furthers the objectives of Section 6(b)(4),\16\ 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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    \15\ 15 U.S.C. 78f.
    \16\ 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.

[[Page 12240]]

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 \17\ and Rule 19b-4(f)(2) 
\18\ 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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    \17\ 15 U.S.C. 78s(b)(3)(A).
    \18\ 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-2008-13 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-2008-13. 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-2008-13 and should be 
submitted on or before March 27, 2008.

     For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-4311 Filed 3-5-08; 8:45 am]

BILLING CODE 8011-01-P