[Federal Register Volume 76, Number 73 (Friday, April 15, 2011)]
[Notices]
[Pages 21416-21418]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-9121]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64292; File No. SR-ISE-2011-22]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change Relating to Network Fees
April 11, 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 April 7, 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 Substance
of the Proposed Rule Change
The ISE is proposing to adopt fees for a 10 Gigabit network
connection. 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 this proposed rule change is to amend the Exchange's
Schedule of Fees to adopt fees for a 10 Gigabit (GB) network
connection. The Exchange currently has a tiered
[[Page 21417]]
structure for the Ethernet/Managed Service Provider fee charged to
Members. The Ethernet/Managed Service Provider fee is a fee charged to
ISE Members to access the ISE's trading system via an Ethernet
connection or via a third-party managed service provider. The Ethernet/
Managed Service Provider connection carries the same information (such
as quotation and trade information) as other forms of connection (such
as T-1 and T-3 point-to-point connections).
An Ethernet/Managed Service Provider connection enables users to
acquire bandwidth in megabit increments. The Exchange currently charges
Members $100 per month for a member's purchase of up to 10 Megabits
(MBs) of connection speed, $250 per month for the purchase of 11-100
MBs of connection speed and $500 per month for the purchase of 101
MBs-- 1 GB of connection speed. These fees are charged on a per
connection basis.
The Exchange is scheduled to launch an enhanced trading platform
called Optimise on April 11, 2011. Upon transitioning to the Optimise
trading platform, ISE will offer a new network connectivity option for
Members. One of the many perceived advantages that the Optimise trading
platform will offer is greatly improved capacity and throughput. To
allow Members to maximize Optimise's low latency, ISE will offer a
connectivity option of 10 GBs. ISE proposes to charge Members a fee of
$4,000 per month for this 10 GB connection. ISE will retain the current
Ethernet connectivity options that are available to Members today.
Once Optimise is rolled out, and until the Exchange has fully
transitioned from the current trading platform to the Optimise trading
platform, market makers will be required to maintain connections to
both trading systems. Therefore, ISE proposes to waive the new 10 GB
fee for all members until the migration is entirely completed. The
Exchange notes that the fees proposed herein are intended to cover and
are reasonably related to ISE's costs of rolling out and supporting the
new service.
The Exchange has designated this proposal to be operative on April
11, 2011.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\3\ in general, and with
Section 6(b)(4) of the Act,\4\ in particular, in that it provides for
the equitable allocation of reasonable dues, fees and other charges
among Exchange members and other persons using its facilities. In
particular, the proposed rule change will provide greater transparency
into the connectivity options available to market participants. The
proposed rule change treats similarly situated Members in the same
manner by assessing the same fees to all Members based on their
connectivity needs. The Exchange notes that the 10 GB connectivity
option proposed herein is similar to that currently in place at other
exchanges. For example, NASDAQ OMX PHLX, Inc. (``PHLX''), NASDAQ OMX
BX, Inc. (``BX'') and the NASDAQ Stock Market LLC (``NASDAQ'') each
offer a 10GB network connection option to their members, albeit at a
higher cost than that proposed by ISE.\5\
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\3\ 15 U.S.C. 78f .
\4\ 15 U.S.C. 78f(b)(4).
\5\ See Exchange Act Release Nos. 62639 (August 4, 2010), 75 FR
48391 (August 10, 2010) (SR-PHLX-2010-89); 62969 (September 22,
2010), 75 FR 59777 (September 28, 2010) (SR-BX-2010-064); and 62663
(August 9, 2010), 75 FR 49543 (August 13, 2010) (SR-NASDAQ-2010-
077). PHLX, BX and NASDAQ each charges $5,000 per month for a 10 GB
connection.
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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. 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.\6\ 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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\6\ 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 No. SR-ISE-2011-22 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-ISE-2011-22. 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. 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-
2011-22 and should be submitted by May 6, 2011.
[[Page 21418]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\7\
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\7\ 17 CFR 200.30-3(a)(12).
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Cathy Ahn,
Deputy Secretary.
[FR Doc. 2011-9121 Filed 4-14-11; 8:45 am]
BILLING CODE 8011-01-P