[Federal Register Volume 75, Number 109 (Tuesday, June 8, 2010)]
[Notices]
[Pages 32528-32529]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-13767]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62206; File No. SR-ISE-2010-56]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Order Granting Accelerated Approval to a
Proposed Rule Change Relating to the Amounts That Direct Edge ECN, in
Its Capacity as an Introducing Broker for Non-ISE Members, Passes
Through to Such Non-ISE Members
June 2, 2010.
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 May 28, 2010, 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 and II 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,
and is approving the proposal on an accelerated basis.
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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 Exchange proposes to modify the amounts that Direct Edge ECN
(``DECN''), in its capacity as an introducing broker for non-ISE
Members, passes through to such non-ISE Members.
The text of the proposed rule change is available on the Exchange's
Internet Web site at http://www.ise.com, on the Commission's Internet
Web site at http://www.sec.gov, at 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, 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 III 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
DECN, a facility of ISE, operates two trading platforms, EDGX and
EDGA.\3\ On May xx, [sic] 2010, the ISE filed for immediate
effectiveness a proposed rule change to amend Direct Edge ECN's
(``DECN'') fee schedule for ISE Members \4\ to pass through charges
from other market centers.\5\ The changes made pursuant to SR-ISE-2010-
55 became operative on June 1, 2010.
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\3\ This fee filing relates to the trading facility operated by
ISE and not EDGA Exchange, Inc. and EDGX Exchange, Inc. Direct Edge
ECN LLC (EDGA and EDGX) will cease to operate in its capacity as an
electronic communications network following the commencement of
operations of EDGA Exchange, Inc. and EDGX Exchange, Inc. as
national securities exchanges.
\4\ References to ISE Members in this filing refer to DECN
Subscribers who are ISE Members.
\5\ On June 1, 2010, in SR-ISE-2010-55, the Exchange increased
the ``Q'' flag from $0.0018 to $0.0020 per share to more closely
reflect the costs of removing liquidity from the NYSE. By way of
background, on May 1, 2010, in SR-ISE-2010-37, the Exchange amended
the fees for orders that either route or re-route to the NYSE in
response to an increase in NYSE's fee for removing liquidity to
$0.0021 per share (from $0.0018 per share). As part of that
amendment, the ``Q'' flag, which denotes an order type (ROUC) that
routes to the NYSE, was increased from $0.0015 per share to $0.0018
per share on EDGA and EDGX to reflect the increase. See Securities
Exchange Act Release No. 62050 (May 6, 2010), 75 FR 27029 (May 13,
2010) (SR-ISE-2010-37).
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In its capacity as a member of ISE, DECN currently serves as an
introducing broker for the non-ISE Member subscribers of DECN to access
EDGX and EDGA. DECN, as an ISE Member and introducing broker, receives
rebates and is assessed charges from DECN for transactions it executes
on EDGX or EDGA in its capacity as introducing broker for non-ISE
Members. Since the amounts of charges were changed pursuant to SR-ISE-
2010-55, DECN wishes to make corresponding changes to the amounts it
passes through to non-ISE Member subscribers of DECN for which it acts
as introducing broker. As a result, the per share amounts that non-ISE
Member subscribers receive and are charged will be the same as the
amounts that ISE Members receive and are charged.
ISE is seeking accelerated approval of this proposed rule change,
as well an effective date of June 1, 2010. ISE represents that this
proposal will ensure that both ISE Members and non-ISE Members (by
virtue of the pass-through described above) will in effect be charged
equivalent amounts and that the imposition of such amounts will begin
on the same June 1, 2010, start date.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the objectives of Section 6 of the Act,\6\ in general, and
furthers the objectives of Section 6(b)(4),\7\ 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. In particular, this proposal will ensure that dues,
fees and other charges imposed on ISE Members are equitably allocated
to both ISE Members and non-ISE Members (by virtue of the pass-through
described above).
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\6\ 15 U.S.C. 78f.
\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 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. 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
[[Page 32529]]
Send an e-mail to [email protected]. Please include
File Number SR-ISE-2010-56 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-2010-56. 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 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 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-2010-56 and should be
submitted on or before June 29, 2010.
IV. Commission's Findings and Order Granting Accelerated Approval of
Proposed Rule Change
The Commission finds that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to a national securities exchange.\8\
Specifically, the Commission finds that the proposed rule change is
consistent with Section 6(b)(4) \9\ of the Act, which requires that the
rules of a national securities exchange provide for the equitable
allocation of reasonable dues, fees, and other charges among members
and issuers and other persons using its facilities.
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\8\ In approving this proposal, the Commission has considered
its impact on efficiency, competition, and capital formation. 15
U.S.C 78c(f).
\9\ 15 U.S.C. 78f(b)(4).
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As described more fully above, ISE recently amended DECN's fee
schedule for ISE Members pursuant to SR-ISE-2010-55 (the ``Member Fee
Filing''). The fee change made pursuant to the Member Fee Filing became
operative on June 1, 2010. DECN receives rebates and is charged fees
for transactions it executes on EGDX or EDGA in its capacity as an
introducing broker for its non-ISE member subscribers. The current
proposal, which will apply beginning on June 1, 2010, will allow DECN
to pass through the revised fee to the non-ISE member subscribers for
which it acts an introducing broker. The Commission finds that the
proposal is consistent with the Act because it will charge fees to non-
ISE member subscribers that are equivalent to those established for ISE
member subscribers in the Member Fee Filing.
ISE has requested that the Commission find good cause for approving
the proposed rule change prior to the thirtieth day after publication
of notice of filing thereof in the Federal Register. As discussed
above, the proposal will allow DECN to pass through to non-ISE member
subscribers the revised fee established for ISE member subscribers in
the Member Fee Filing, resulting in equivalent fees for ISE member and
non-member subscribers. In addition, because the proposal will apply
the revised fee beginning on June 1, 2010, the revised fees will have
the same effective date, thereby promoting consistency in the DECN's
fee schedule. Accordingly, the Commission finds good cause, pursuant to
Section 19(b)(2) of the Act, for approving the proposed rule change
prior to the thirtieth day after the date of publication of notice of
filing thereof in the Federal Register.
V. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\10\ that the proposed rule change (SR-ISE-2010-56) is approved on
an accelerated basis.
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\10\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-13767 Filed 6-7-10; 8:45 am]
BILLING CODE 8011-01-P