[Federal Register Volume 73, Number 215 (Wednesday, November 5, 2008)]
[Notices]
[Pages 65903-65904]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-26277]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-58868; File No. SR-ISE-2008-79]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change Relating to Fee Changes
October 28, 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 October 21, 2008, 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 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 Schedule of Fees to establish
fees for transactions in options on 4 Premium Products.\3\ The text of
the proposed rule change is available on the ISE's Web site (http://www.ise.com), at the principal office of the ISE, and at the
Commission's Public Reference Room.
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\3\ Premium Products is defined in the Schedule of Fees as the
products enumerated therein.
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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 Dow Jones
U.S. Medical Devices Index Fund (``IHI''), the iShares Dow Jones U.S.
Oil & Gas Exploration & Production Index Fund (``IEO''), the iShares
Dow Jones U.S. Regional Banks Index Fund (``IAT''),\4\ and the
SPDR[supreg] S&P Oil & Gas Exploration & Production ETF (``XOP'').\5\
The Exchange represents that IHI, IEO, IAT, and XOP are eligible for
options trading because they constitute ``Exchange-Traded Fund
Shares,'' as defined by ISE Rule 502(h).
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\4\ iShares[supreg] is a registered trademark of Barclays Global
Investors, N.A. (``BGI''), a wholly owned subsidiary of Barclays
Bank PLC. ``Dow Jones,'' ``Dow Jones U.S. Select Medical Equipment
Index,'' ``Dow Jones U.S. Select Oil Exploration & Production
Index,'' and ``Dow Jones U.S. Select Regional Banks Index'' are
service marks of Dow Jones & Company, Inc. (``Dow Jones'') and have
been licensed for use for certain purposes by BGI. All other
trademarks and service marks are the property of their respective
owners. The iShares Dow Jones U.S. Medical Devices Index Fund
(``IHI''), the iShares Dow Jones U.S. Oil & Gas Exploration &
Production Index Fund (``IEO''), and the iShares Dow Jones U.S.
Regional Banks Index Fund (``IAT'') are not sponsored, endorsed,
sold, or promoted by Dow Jones. BGI and Dow Jones 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 IHI,
IEO, and IAT 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 IHI, IEO, and
IAT or with making disclosures concerning options on IHI, IEO, and
IAT under any applicable federal or state laws, rules or
regulations. BGI and Dow Jones do not sponsor, endorse, or promote
such activity by ISE, and are not affiliated in any manner with ISE.
\5\ ``Standard & Poor's[supreg],'' ``S&P[supreg],'' ``S&P
500[supreg],'' ``Select Sector SPDR[supreg],'' ``Select Sector
SPDRs[supreg],'' and ``the S&P[supreg] Oil & Gas Exploration &
Production Select Industry Index'' are trademarks of The McGraw-Hill
Companies, Inc. (``McGraw-Hill''), and have been licensed for use by
State Street Bank and Trust Company (``State Street'') in connection
with the listing and trading of SPDR[supreg] S&P Oil & Gas
Exploration & Production ETF (``XOP''). State Street and Standard &
Poor's, (``S&P''), a division of McGraw-Hill, do not sponsor,
endorse, or promote XOP. State Street, McGraw-Hill, and S&P 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 XOP 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 XOP or
with making disclosures concerning options on XOP under any
applicable federal or state laws, rules or regulations. State
Street, McGraw-Hill, and S&P do not sponsor, endorse, or promote
such activity by ISE and are not affiliated in any manner with ISE.
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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 IHI, IEO, IAT, and XOP.\6\ The amount of
the execution fee 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 IHI, IEO, IAT, and XOP are multiply-listed,
the Exchange's Payment for Order Flow fee shall apply to all 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.
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\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.
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2. Basis--The Exchange believes that the proposed rule change is
consistent with the objectives of Section 6 of the Act,\10\ in general,
and furthers the objectives of Section 6(b)(4),\11\ 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.
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\10\ 15 U.S.C. 78f.
\11\ 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.
[[Page 65904]]
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) of the Act \12\ and Rule 19b-4(f)(2) \13\ 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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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(2).
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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 [email protected]. Please include
File Number SR-ISE-2008-79 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-2008-79. 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 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-2008-79 and should be
submitted on or before November 26, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-26277 Filed 11-4-08; 8:45 am]
BILLING CODE 8011-01-P