Document ID: SEC-2008-1715-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: International Securities Exchange, LLC
Posted Date: 2008-12-22T05:00Z

[Federal Register: December 22, 2008 (Volume 73, Number 246)]
[Notices]
[Page 78414-78415]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22de08-143]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59092; File No. SR-ISE-2008-93]

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

December 12, 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 December 8, 2008, the International Securities Exchange, LLC
(the ``Exchange'' or the ``ISE'') filed with the Securities and
Exchange 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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 2 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.
---------------------------------------------------------------------------

    \3\ Premium Products is defined in the Schedule of Fees as the
products enumerated therein.
---------------------------------------------------------------------------

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 iShares Silver Trust
(``SLV'') \4\ and the iShares[supreg] COMEX Gold Trust (``IAU'').\5\
The Exchange represents that SLV and IAU are eligible for options
trading because they constitute ``Exchange-Traded Fund Shares,'' as
defined by ISE Rule 502(h).
---------------------------------------------------------------------------

    \4\ iShares[supreg] is a registered trademark of Barclays Global
Investors, N.A. All other trademarks, service marks or registered
trademarks are the property of their respective owners. The iShares
Silver Trust's (``SLV'') sponsor is Barclays Global Investors
International, Inc. (``BGII''), a subsidiary of Barclays Bank PLC.
SLV is not sponsored, endorsed, sold or promoted by BGII, and BGII
makes no representation regarding the advisability of investing in
SLV. BGII 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 SLV 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 SLV or with making disclosures concerning options on SLV
under any applicable federal or state laws, rules or regulations.
BGII does not sponsor, endorse, or promote such activity by ISE and
is not affiliated in any manner with ISE.
    \5\ iShares[supreg] is a registered trademark of Barclays Global
Investors, N.A., ``Commodity Exchange, Inc.'' and ``COMEX'' are
trademarks of Commodity Exchange, Inc., and have been licensed for
use for certain purposes to Barclays Global Investors and the
iShares[supreg] COMEX Gold Trust (``IAU''). All other trademarks,
service marks or registered trademarks are the property of their
respective owners. IAU's sponsor is Barclays Global Investors
International, Inc., (``BGII''), a Delaware corporation and a
subsidiary of Barclays Bank PLC. IAU is not sponsored, endorsed,
sold or promoted by BGII or by Commodity Exchange, Inc., nor do BGII
and Commodity Exchange, Inc., make any representation regarding the
advisability of investing in IAU. BGII and Commodity Exchange, Inc.,
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 IAU 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 IAU or with making disclosures concerning options on IAU
under any applicable federal or state laws, rules or regulations.
BGII and Commodity Exchange, Inc., do not sponsor, endorse, or
promote such activity by ISE and are not affiliated in any manner
with ISE.
---------------------------------------------------------------------------

    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 SLV and IAU.\6\ The amount of the
execution fee

[[Page 78415]]

for products covered by this filing shall be $0.18 per contract for all
Public Customer Orders \7\ 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.\8\ Finally, the amount of the execution fee for all non-ISE
Market Maker transactions shall be $0.45 per contract.\9\ Further,
since options on SLV and IAU are multiply-listed, the Exchange's
Payment for Order Flow fee shall apply to 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.
---------------------------------------------------------------------------

    \6\ 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 per contract
side and $0.15 per contract side, respectively. See Securities
Exchange Act Release No. 58143 (July 11, 2008), 73 FR 41388 (July
18, 2008) (SR-ISE-2008-52).
    \7\ 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.
    \8\ 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.
    \9\ 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.
---------------------------------------------------------------------------

    Further, as a matter of housekeeping, the Exchange proposes to
remove MYP, PUF, SAW and WSI from its Schedule of fees.\10\
---------------------------------------------------------------------------

    \10\ MYP, PUF, SAW and WSI were recently delisted and no longer
trade on the Exchange.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the objectives of Section 6 of the Act,\11\ in general, and
furthers the objectives of Section 6(b)(4),\12\ 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.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78f.
    \12\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

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 \13\ and Rule 19b-4(f)(2)\14\ 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.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 19b-4(f)(2) [sic].
---------------------------------------------------------------------------

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-2008-93 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-ISE-2008-93. 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 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 Exchange. 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-2008-93 and
should be submitted on or before January 12, 2009.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
Florence E. Harmon,
Acting Secretary.
---------------------------------------------------------------------------

    \15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

[FR Doc. E8-30317 Filed 12-19-08; 8:45 am]

BILLING CODE 8011-01-P