[Federal Register Volume 72, Number 30 (Wednesday, February 14, 2007)]
[Notices]
[Pages 7099-7100]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-2530]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55247; File No. SR-ISE-2007-03]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change Relating to a Complex Order Fee Waiver
February 6, 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 February 1, 2007, the International Securities Exchange, LLC
(``ISE'' or ``Exchange'') submitted to 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 has designated this proposal as one establishing
or changing a due, fee, or other charge imposed by the self-regulatory
organization under Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-
4(f)(2) thereunder,\4\ which renders it effective upon filing with the
Commission. 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.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
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
waiver for customer fees for certain Complex Orders.
The text of the proposed rule change is available on ISE's Web site
at http://www.ise.com, at the principal office of ISE, 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, 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. 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 purpose of this proposed rule change is to amend ISE's Schedule
of Fees to adopt a waiver of customer fees for certain Complex
Orders.\5\ The Commission recently approved an Exchange proposed fee
for customers that transact in Complex Orders, i.e., customer orders
that interact with Complex Orders resident on the complex order book
thereby taking liquidity from the complex order book.\6\ The Exchange
now proposes to waive this fee for the first 15,000 contracts
transacted in a month by a member on behalf of its customers. This fee
will apply once a member transacts more than 15,000 contracts in a
month (whether on behalf of one or more than one of its customers) that
take liquidity from the complex order book. As an example, a member who
collectively transacts 17,500 contracts on behalf of its customers in a
month will be assessed the complex order fee on 2,500 contracts, not on
the entire 17,500 contracts.
---------------------------------------------------------------------------
\5\ Complex Orders are defined in ISE Rule 722(a).
\6\ See Exchange Act Release No. 34-54751 (November 14, 2006),
71 FR 67667 (November 22, 2006).
---------------------------------------------------------------------------
In the filing that adopted this fee, the Exchange stated its belief
that the proposed fee is objective in that it is based on the behavior
of market participants and the type of orders submitted. Since the
behavior of these customers is similar to the behavior of a broker
dealer, it is fair for the Exchange to charge for these customer orders
the same fees as those charged for broker dealer orders. The Exchange
[[Page 7100]]
believes that adopting a waiver for the first 15,000 contracts that a
member transacts on behalf of its customers in a month is reasonable in
that it furthers the Exchange's goal of deterring customers from acting
as broker-dealers. The Exchange believes that customer orders that
inadvertently interact with Complex Orders resident on the complex
order book will never exceed 15,000 contracts in a month while customer
orders of a member that intentionally engage in the business of taking
liquidity from the complex order book are likely to exceed 15,000
contracts in a month.
2. Statutory Basis
The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(4) of the Act \7\ that an exchange have
an equitable allocation of reasonable dues, fees and other charges
among exchange members and other persons using its facilities.
---------------------------------------------------------------------------
\7\ 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 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 Act \8\ and Rule 19b-4(f)(2) thereunder,\9\
because it establishes or changes a due, fee, or other charge imposed
by the self-regulatory organization.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78s(b)(3)(A)(ii).
\9\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
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.
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 [email protected]. Please include
File Number SR-ISE-2007-03 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-2007-03. 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. 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-2007-03 and should be submitted on or before March
7, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\10\
---------------------------------------------------------------------------
\10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-2530 Filed 2-13-07; 8:45 am]
BILLING CODE 8010-01-P