Document ID: SEC-2009-0677-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: International Securities Exchange
Posted Date: 2009-05-18T04:00Z

[Federal Register Volume 74, Number 94 (Monday, May 18, 2009)]
[Notices]
[Pages 23224-23226]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-11468]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59904; File No. SR-ISE-2009-22]

Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by International Securities 
Exchange Relating to Far Away Market Maker Fees

May 12, 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 April 29, 2009, 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, II, and III below, which items have been prepared by the self-
regulatory organization. The ISE has filed the proposed rule change as 
one establishing or changing a due, fee, or other charge imposed by the 
ISE under Section 19(b)(3)(A)(ii) of the Act \3\ and

[[Page 23225]]

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 Exchange is proposing to amend its Schedule of Fees to adopt a 
fee discount for Far Away Market Maker orders that trade in the 
Exchange's Price Improvement Mechanism. The text of the proposed rule 
change is available on the Exchange's Internet Web site at http://www.ise.com.

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 adopt a 
fee discount for Far Away Market Maker (``FARMM'') orders that trade in 
the Exchange's Price Improvement Mechanism (``PIM''). FARMM orders are 
orders that are sent to the Exchange by an Electronic Access Member 
(``EAM'') on behalf of a non-ISE market maker. ISE currently charges 
FARMM orders a fee of $0.45 per contract, except for orders entered on 
behalf of FARMMs in the Exchange's Facilitation and Solicitation 
Mechanisms. Those orders provide liquidity and are thus charged a 
discounted transaction fee of $0.20 per contract.
    The PIM is a process by which an EAM can provide price improvement 
opportunities for a transaction where the EAM seeks to facilitate an 
order it represents as agent, and/or a transaction wherein the EAM 
solicited interest to execute against an order it represents as agent. 
In order to encourage FARMMs to provide liquidity to our PIM, we 
propose to charge EAMs a discounted fee of $0.20 per contract when it 
enters an order into the PIM with a FARMM providing liquidity (and any 
liquidity that a FARMM provides in response to the PIM). For example, 
an EAM may use an affiliated FARMM to provide the liquidity for an 
order it is entering into the PIM. In that case, we would charge the 
EAM only $.20 a contract, not the regular $.45 FARMM fee. The discount 
would not apply to other EAMs responding to the PIM order representing 
FARMM interest. Those contracts will continue to be charged $0.45 per 
contract. This fee change will be operative on May 1, 2009.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\5\ in general, and 
furthers the objectives of Section 6(b)(4),\6\ 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. In particular, lowering the transaction fee for FARMM 
orders that trade in the Exchange's PIM will attract additional order 
flow to the Exchange and provide liquidity to the PIM.
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    \5\ 15 U.S.C. 78f.
    \6\ 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 \7\ and Rule 19b-4(f)(2) \8\ 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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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 19b-4(f)(2) [sic].
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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-2009-22 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-2009-22. 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 the filing will also 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-2009-22 and should be 
submitted on or before June 8, 2009.

[[Page 23226]]

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-11468 Filed 5-15-09; 8:45 am]
BILLING CODE 8010-01-P