Document ID: SEC-2007-0914-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: International Securities Exchange, LLC
Posted Date: 2007-07-06T04:00Z

[Federal Register: July 6, 2007 (Volume 72, Number 129)]
[Notices]               
[Page 37064-37065]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06jy07-116]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55975; File No. SR-ISE-2007-48]

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

June 28, 2007.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'')\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on June 15, 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 ISE. ISE 
filed the proposal pursuant to Section 19(b)(3)(A)(ii) of the Act \3\ 
and Rule 19b-4(f)(2) \4\ thereunder, as establishing or changing a due, 
fee, or other charges applicable to a member, which renders the 
proposed rule change 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

    ISE is proposing to amend its Schedule of Fees to: (1) Remove the 
surcharge fee for transactions in options on the iShares Russell 
2000[supreg] Index Fund (``IWM''), the iShares Russell 2000[supreg] 
Value Index Fund (``IWN''), the iShares Russell 2000[supreg] Growth 
Index Fund (``IWO''), the iShares Russell 1000[supreg] Value Index Fund 
(``IWD'') and the iShares Russell 1000[supreg] Index Fund (``IWB''); 
and (2) raise the surcharge fee for transactions in options on the 
Russell 1000[supreg] Index (``RUI''), the Russell 2000[supreg] Index 
(``RUT''), and the Mini Russell 2000[supreg] Index (``RMN''). The text 
of the proposed rule change is available at ISE, http://www.iseoptions.com
, and the Commission's Public Reference Room.

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 Exchange 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 Exchange 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: (1) 
Remove the surcharge fee previously adopted for transactions in options 
on IWM, IWN, IWO, IWD,\5\ and IWB; \6\ and (2) raise the surcharge fee 
previously adopted for transactions in options on RUI, RUT and RMN.\7\ 
The Exchange is proposing to remove the surcharge fee from its Schedule 
of Fees because it no longer pays a license fee to the Frank Russell

[[Page 37065]]

Company (``Russell'') in connection with transactions in options on 
IWM, IWN, IWO, IWD and IWB. Accordingly, there is no longer a need for 
this surcharge fee. The Exchange will continue to charge an execution 
fee and a comparison fee for transactions in options on IWM, IWN, IWO, 
IWD and IWB.
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    \5\ See Securities Exchange Act Release No. 47075 (December 20, 
2002), 67 FR 79673 (December 30, 2002) (SR-ISE-2002-29).
    \6\ See Securities Exchange Act Release No. 47564 (March 24, 
2003), 68 FR 15256 (March 28, 2003) (SR-ISE-2003-13).
    \7\ See Securities Exchange Act Release No. 51858 (June 16, 
2005), 70 FR 36218 (June 22, 2005) (SR-ISE-2005-26).
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    Additionally, pursuant to a revised license agreement between 
Russell and ISE in connection with the listing and trading of options 
on RUI, RUT and RMN, and to defray the increased licensing costs, the 
Exchange is raising its surcharge fee from $0.10 per contract to $0.15 
per contract for trading in options on RUI, RUT and RMN. The Exchange 
believes charging the participants that trade this instrument is the 
most equitable means of recovering the costs of the license. However, 
because of competitive pressures in the industry, the Exchange proposes 
to continue excluding Public Customer Orders \8\ from this surcharge 
fee. Accordingly, this surcharge fee shall continue to be charged only 
to Exchange members with respect to non-Public Customer Orders (e.g., 
ISE Market Maker, non-ISE Market Maker & Firm Proprietary orders) and 
shall apply to certain Linkage Orders under a pilot program that is set 
to expire on July 31, 2007.\9\ The Exchange will, however, continue to 
charge an execution fee and a comparison fee for transactions in 
options on RUI, RUT and RMN.
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    \8\ 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.
    \9\ Linkage Orders are defined in ISE Rule 1900(10). Under a 
pilot program that is set to expire on July 31, 2007, these fees 
will also be charged to Principal Acting as Agent Orders and 
Principal Orders (as defined in ISE Rule 1900(10)(i)-(ii)). See 
Securities Exchange Act Release No. 54204 (July 25, 2006), 71 FR 
43548 (August 1, 2006) (SR-ISE-2006-38).
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2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(4) \10\ that the rules of an exchange 
provide for the equitable allocation of reasonable dues, fees, and 
other charges among its members and issuers and other persons using its 
facilities.
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    \10\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    ISE does not believe that the proposed rule change will result in 
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 Form 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 interested parties.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing proposed rule change has become effective upon filing 
with the Commission pursuant to Section 19(b)(3)(A)(ii) of the Act \11\ 
and Rule 19b-4(f)(2) \12\ thereunder, because it establishes or changes 
a due, fee, or other charge applicable only to a member.
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    \11\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \12\ 17 CFR 240.19b-4(f)(2).
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    At any time within 60 days of the filing of the 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.

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-2007-48 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-ISE-2007-48. 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 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-2007-48 and should be 
submitted on or before July 27, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-13070 Filed 7-5-07; 8:45 am]

BILLING CODE 8010-01-P