[Federal Register Volume 76, Number 60 (Tuesday, March 29, 2011)]
[Notices]
[Pages 17462-17463]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-7265]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64112; File No. SR-ISE-2011-14]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change Relating to Fees for Qualified Contingent Cross Orders
March 23, 2011.
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 March 14, 2011, the International Securities Exchange, LLC (the
``Exchange'' or the ``ISE'') filed with the Securities and Exchange
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 the
Substance of the Proposed Rule Change
The ISE is proposing to amend its fee schedule to establish fees
for a new order type called Qualified Contingent Cross. 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 purpose of the proposed rule change is to establish fees for a
new order type called Qualified Contingent Cross (``QCC''). The QCC
order type was recently approved by the Commission.\3\ The Exchange now
proposes to adopt fees related to this new order type. Specifically,
the Exchange proposes to extend the same pricing that currently applies
to orders entered into the facilitation, solicitation and price
improvement mechanism on behalf of firm proprietary, Non-ISE Market
Makers \4\ and Professional Order participants,\5\ which amounts to
$0.20 per contract for QCC orders in all option classes traded on the
Exchange.
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\3\ See Securities Exchange Act Release No. 63955 (February 24,
2011) (SR-ISE 2010-73).
\4\ The term ``Non-ISE Market Maker'' means a market maker as
defined in Section 3(a)(38) of the Securities Exchange Act of 1934
registered in the same options class on another options exchange.
See ISE's Schedule of Fees.
\5\ The term ``Professional Order'' means an order that is for
the account of a person or entity that is not a Priority Customer.
See ISE Rule 100(37C).
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The fee for ISE Market Makers that participate in a QCC order will
be charged either $.18 \6\ or $.20, \7\ depending upon the product.\8\
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\6\ The rate of $.18 remains unchanged for ISE Market Makers
participating in all symbols other than those set forth in footnote
5 [sic].
\7\ ISE Market Makers and Market Maker Plus are charged a higher
rate of $.20 when participating in a QCC order in these select
symbols: QQQQ, C, BAC, SPY, IWM, XLF, GE, JPM, INTC, RIMM, T, VZ,
UNG, FCX, CSCO, DIA, AMZN, X, AA, AIG, AXP, BBY, CAT, CHK, DNDN,
EEM, EFA, EWZ, F, FAS, FAZ, FSLR, GDX, GLD, IYR, MGM, MS, MSFT, MU,
PBR, PG, POT, RIG, SDS, SLV, XLE, XOM, ABX, BMY, BP, COP, DELL, FXI,
HAL, IBM, KO, LVS, MCD, MO, MON, NOK, ORCL, PFE, QCOM, S, SLB, SMH,
SNDK, TBT, USO, V, VALE, WFT, XLI, XRT, YHOO, AKAM, AMD, AMR, APC,
BA, BRCM, GG, HPQ, LCC, MOT, NEM, NFLX, NVDA, QID, SSO, TEVA, TLT,
TZA, UAL, WFC, XLB, SIRI, SBUX and VVUS.
\8\ Priority Customers are currently not charged when
participating in orders executed in the facilitation, solicitation
and price improvement mechanism. Consistent with the Exchange's
approach, this will be extended to Priority Customers when
participating in QCC orders.
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2. Statutory Basis
The Exchange believes that its proposal to amend its Schedule of
Fees is consistent with Section 6(b) of the Act \9\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \10\ in
particular, in that it is an equitable allocation of reasonable dues,
fees and other charges among Exchange members. The Exchange believes
that the fees proposed for QCC orders are reasonable because QCC orders
are similar to facilitation and solicitation orders in that the members
have both sides of the order and are entering the order onto the
exchange for execution. Members are currently charged $.20 for
executions of facilitation and solicitation orders and because QCC
orders have a similar composition, it is reasonable that the Exchange
is proposing to extend the same fee to QCC orders. The Exchange
believes that the proposed fee is equitable in that this fee is applied
consistently across all memberships and client categories, except for
ISE Market Makers in certain circumstances. The Exchange believes that
it is equitable to allow ISE Market Makers a lower transaction fee in
certain circumstances because ISE Market Makers are differentiated from
other members in that they have negative and affirmative obligations to
the market place.
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\9\ 15 U.S.C. 78f(b).
\10\ 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 17463]]
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 Act.\11\ 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 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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\11\ 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 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-2011-014 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-2011-014. 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 website
viewing and printing in the Commission's Public Reference Room 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 offices 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-2011-014, and should be submitted on or before April
19, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-7265 Filed 3-28-11; 8:45 am]
BILLING CODE 8011-01-P