[Federal Register Volume 77, Number 54 (Tuesday, March 20, 2012)]
[Notices]
[Pages 16287-16288]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-6615]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-66590; File No. SR-ISE-2012-12]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change Relating to API Fees
March 14, 2012.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is
hereby given that on February 29, 2012, the International Securities
Exchange, LLC (the ``Exchange'' or the ``ISE'') filed with the
Securities and Exchange Commission (the ``Commission'') the proposed
rule change as described in Items I and II below, which Items have been
prepared by the Exchange. 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.
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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 API or login fees. 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.
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 ISE is proposing to amend its Schedule of Fees regarding the
Exchange's API or login fees. ISE currently charges its Members a fee
for each login that a Member uses for quoting or order entry, with a
lesser charge for logins used for the limited purpose of ``listening''
to broadcast messages.\3\ The Exchange currently has the following
categories of authorized logins: (1) Quoting, order entry and listening
(allowing the user to enter quotes, orders, and perform all other
miscellaneous functions, such as setting parameters and pulling
quotes); (2) order entry and listening (allowing the user to enter
orders and perform all other miscellaneous functions, such as setting
parameters and pulling quotes (but not quoting)); and (3) listening
(allowing the user only to query the system and to respond to broadcast
messages).\4\ The Exchange notes that quoting, order entry and
listening are functionalities available only to Exchange Market Makers,
i.e., Primary Market Makers and Competitive Market Makers, while only
order entry and listening are functionalities available to non-Market
Makers, i.e., Electronic Access Members.
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\3\ See Exchange Act Release No. 53522 (March 20, 2006), 71 FR
14975 (March 24, 2006) (SR-ISE-2006-09).
\4\ Id.
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ISE Market Makers currently receive an allocation of 1.8 million
quotes per day per user.\5\ If a Market Maker submits more quotes than
those allocated, i.e., 1.8 million quotes per day per user as measured
on average in a single month, the Market Maker is charged for
additional users depending upon the number of quotes submitted. Each
month, the total number of quotes submitted by a Market Maker is
divided by the number of trading days, resulting in the average quotes
per day entered by that Market Maker. This number is then divided by
1.8 million and rounded up to the nearest whole number, resulting in an
implied number of users based on quotes. Market Makers are charged on a
monthly basis for the greater of a) the greatest number of users that
logged into the system, or b) the number of implied users based on
quotes.
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\5\ See Exchange Act Release No. 64269 (April 8, 2011), 76 FR
20752 (April 13, 2011) (SR-ISE-2011-21).
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ISE currently charges Market Makers a standardized fee of $1,000
per month for each quoting session of up to 1.8 million quotes per day,
on average for a month, including for any incremental usage. For
example, a Market Maker with 10 logins currently pays $10,000 in fees
as long as it quotes on average 18 million quotes or less per day. If
that Market Maker instead sends an average of 20 million quotes per day
during a month, its fees would total $12,000 for a total of 12
sessions, with the extra 2 million quotes per day counting towards two
additional sessions.
The Exchange now proposes to lower the quote allowance for each
login session from 1.8 million quotes per day to 1.5 million quotes per
day, including the quote allowance for each incremental login. The
Exchange is not proposing any changes to the fee charged for each login
session. The fee for each login session will remain at $1,000 per
month. With this proposed rule change, ISE expects to raise revenue to
offset the lower quoting volume at the Exchange.
The Exchange has designated this proposal to be operative on March
1, 2012.
2. Statutory Basis
The Exchange believes that its proposal to amend its Schedule of
Fees is consistent with Section 6(b) of the
[[Page 16288]]
Act \6\ in general, and furthers the objectives of Section 6(b)(4) of
the Act \7\ in particular, in that it is an equitable allocation of
reasonable dues, fees and other charges among Exchange members and
other persons using its facilities. The Exchange believes that the
proposal does not constitute an inequitable allocation of fees, as all
similarly situated Members will be subject to the same fee structure,
and access to the Exchange's market is offered on fair and non-
discriminatory terms. In other words, the proposed rule change will
treat similarly situated Members in the same manner by allocating the
same quoting allowance to all Members. The Exchange further believes
that its proposal to lower the quote allowance per each login is both
equitable and reasonable as it will help the Exchange manage quote
message traffic. The Exchange believes that Market Makers are generally
quoting more efficiently on the Optimise trading platform and does not
believe that lowering the quoting allowance will impact Market Makers
adversely from conducting their activity on the Exchange. Further, the
Exchange's proposal does not preclude Members from obtaining additional
logins if they have a need beyond the quoting allowance allocated per
each login.
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\6\ 15 U.S.C. 78f(b).
\7\ 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 Exchange 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)(ii) of the Exchange Act.\8\ At any time within 60 days of
the filing of such proposed rule change, the Commission summarily may
temporarily suspend 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 Exchange Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.
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\8\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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 Exchange 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 email to [email protected]. Please include
File Number SR-ISE-2012-12 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-2012-12. This file
number should be included on the subject line if email 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 Web site viewing and
printing 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 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-2012-12 and should be
submitted on or before April 10, 2012.
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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-6615 Filed 3-19-12; 8:45 am]
BILLING CODE 8011-01-P