Self-Regulatory Organizations; International Securities Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto Relating to Its Membership Dues Fee, 37878-37880 [05-12886]
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37878
Federal Register / Vol. 70, No. 125 / Thursday, June 30, 2005 / Notices
SECURITIES AND EXCHANGE
COMMISSION
[Release 34–51911; File No. 600–23]
Self-Regulatory Organizations; Fixed
Income Clearing Corporation; Notice of
Filing and Order Approving an
Extension of Temporary Registration
as a Clearing Agency
June 23, 2005.
The Securities and Exchange
Commission (‘‘Commission’’) is
publishing this notice and order to
solicit comments from interested
persons and to extend the Fixed Income
Clearing Corporation’s (‘‘FICC’’)
temporary registration as a clearing
agency through June 30, 2006.1
On May 24, 1988, pursuant to
Sections 17A(b) and 19(a) of the Act 2
and Rule 17Ab2–1 promulgated
thereunder,3 the Commission granted
the Government Securities Clearing
Corporation (‘‘GSCC’’) registration as a
clearing agency on a temporary basis for
a period of three years.4 The
Commission subsequently extended
GSCC’s registration through June 30,
2003.5
On February 2, 1987, pursuant to
Sections 17A(b) and 19(a) of the Act 6
and Rule 17Ab2–1 promulgated
thereunder,7 the Commission granted
MBS Clearing Corporation (‘‘MBSCC’’)
registration as a clearing agency on a
temporary basis for a period of eighteen
months.8 The Commission subsequently
extended MBSCC’s registration through
June 30, 2003.9
1 FICC
is the successor to MBS Clearing
Corporation and Government Securities
ClearingCorporation.
2 15 U.S.C. 78q–1(b) and 78s(a).
3 17 CFR 240.17Ab2–1.
4 Securities Exchange Act Release No. 25740 (May
24, 1988), 53 FR 19639.
5 Securities Exchange Act Release Nos. 25740
(May 24, 1988), 53 FR 19639; 29236 (May 24, 1991),
56 FR 24852; 32385 (June 3, 1993), 58 FR 32405;
35787 (May 31, 1995), 60 FR 30324; 36508
(November 27, 1995), 60 FR 61719; 37983
(November 25, 1996), 61 FR 64183; 38698 (May 30,
1997), 62 FR 30911; 39696 (February 24, 1998), 63
FR 10253; 41104 (February 24, 1999), 64 FR 10510;
41805 (August 27, 1999), 64 FR 48682; 42335
(January 12, 2000), 65 FR 3509; 43089 (July 28,
2000), 65 FR 48032; 43900 (January 29, 2001), 66
FR 8988; 44553 (July 13, 2001), 66 FR 37714; 45164
(December 18, 2001), 66 FR 66957; and 46135 (June
27, 2002), 67 FR 44655.
6 Supra note 2.
7 Supra note 3.
8 Securities Exchange Act Release No. 24046
(February 2, 1987), 52 FR 4218.
9 Securities Exchange Act Release Nos. 25957
(August 2, 1988), 53 FR 29537; 27079 (July 31,
1989), 54 FR 34212; 28492 (September 28, 1990), 55
FR 41148; 29751 (September 27, 1991), 56 FR
50602; 31750 (January 21, 1993), 58 FR 6424; 33348
(December 15, 1993), 58 FR 68183; 35132
(December 21, 1994), 59 FR 67743; 37372 (June 26,
1996), 61 FR 35281; 38784 (June 27, 1997), 62 FR
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16:26 Jun 29, 2005
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On January 1, 2003, MBSCC was
merged into GSCC and GSCC was
renamed FICC.10 The Commission
subsequently extended FICC’s
temporary registration through June 30,
2005.11
On May 31, 2005, FICC requested that
the Commission extend FICC’s
temporary registration until such time
as the Commission is prepared to grant
FICC permanent registration.12
The Commission today is extending
FICC’s temporary registration as a
clearing agency in order that FICC may
continue to provide its users clearing
and settlement services as a registered
clearing agency. During the third quarter
of 2005, the Commission expects to
publish a release requesting comment
on granting FICC permanent registration
as a clearing agency. FICC acts as the
central clearing entity for the U.S.
Government securities trading and
financing marketplaces and provides for
the safe and efficient clearance and
settlement of transactions in mortgagebacked securities. 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
post all comments on the Commission’s
Internet Web site (https://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
Section, 100 F Street, NE., Washington,
DC 20549. Copies of such filing also will
be available for inspection and copying
at the principal office of FICC and on
FICC’s Web site at https://www.ficc.com.
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 600–23 and should be
submitted on or before July 21, 2005.
It is therefore ordered that FICC’s
temporary registration as a clearing
agency (File No. 600–23) be and hereby
is extended through June 30, 2006.
For the Commission by the Division of
Market Regulation, pursuant to delegated
authority.13
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E5–3431 Filed 6–29–05; 8:45 am]
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number 600–23 on the subject line.
BILLING CODE 8010–01–P
Paper Comments
• Send paper comments in triplicate
to Jonathan G. Katz, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–9303.
All submissions should refer to File
Number 600–23. 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
36587; 39776 (March 20, 1998), 63 FR 14740; 41211
(March 24, 1999), 64 FR 15854; 42568 (March 23,
2000), 65 FR 16980; 44089 (March 21, 2001), 66 FR
16961; 44831 (September 21, 2001), 66 FR 49728;
45607 (March 20, 2002), 67 FR 14755; and 46136
(June 27, 2002), 67 FR 44655.
10 Securities Exchange Act Release No. 47015
(December 17, 2002), 67 FR 78531 (December 24,
2002) File Nos. [SR–GSCC–2002–07 and SR–
MBSCC–2002–01].
11 Securities Exchange Act Release Nos. 48116
(July 1, 2003), 68 FR 41031 and 49940 (June 29,
2004), 69 FR 40695.
12 Letter from Nikki Poulos, Vice President and
General Counsel, FICC (May 23, 2005).
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51902; File No. SR–ISE–
2005–19]
Self-Regulatory Organizations;
International Securities Exchange, Inc.;
Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change and Amendment No. 1 Thereto
Relating to Its Membership Dues Fee
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 April 15,
2005, the International Securities
Exchange (‘‘ISE’’ or ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
13 17
CFR 200.30–3(a)(1506).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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Federal Register / Vol. 70, No. 125 / Thursday, June 30, 2005 / Notices
have been prepared by the Exchange.
The proposed rule change has been filed
by ISE as establishing or changing a due,
fee, or other charge, pursuant to Section
19(b)(3)(A)(ii) of the Act 3 and Rule 19b–
4(f)(2) 4 thereunder, which renders the
proposal effective upon filing with the
Commission. On June 15, 2005, the
Exchange filed Amendment No. 1 to the
proposed rule change.5 The Commission
is publishing this notice to solicit
comments on the proposed rule change,
as amended, from interested persons.
1. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The ISE proposes to amend its
Schedule of Fees to (i) institute a
monthly percentage fee for computer
gateways provided to members instead
of a flat fee, (ii) increase certain
computer network fees to cover
associated equipment costs, and (iii)
delete references to an expired ‘‘refresh’’
program. The text of the proposed rule
change is available on the ISE’s Web site
(https://www.iseoptions.com), at the
ISE’s Office of the Secretary, 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
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. The 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 the Exchange’s
3 15
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
5 Amendment No. 1 made minor, non-substantive
clarifying changes to the purpose section and
Exhibit 5. These changes to the proposed rule
change did not affect the fees originally proposed.
The effective date of the original proposed rule
change is April 15, 2005, and the effective date of
the amendment is June 15, 2005. For purposes of
calculating the 60-day period within which the
Commission may summarily abrogate the proposed
rule change, as amended, under Section 19(b)(3)(C)
of the Act, the Commission considers the period to
commence on June 15, 2005, the date on which the
Exchange submitted Amendment No. 1. See 15
U.S.C. 78s(b)(3)(C).
4 17
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Schedule of Fees to (i) institute a
monthly percentage fee for computer
gateways provided to members instead
of a flat fee, (ii) increase certain
computer network fees to cover
associated equipment costs, and (iii)
delete references to an expired ‘‘refresh’’
program.
• Gateway Fees: The Exchange
provides its members with ‘‘gateway’’
equipment which includes switches,
servers and routers that they use to
connect to the ISE. The Exchange
finances these gateways through a lease
with a vendor. The Exchange currently
charges its members a flat monthly fee
for these gateways. If a member returns
these gateways to ISE early, ISE remains
obligated under its lease with the
vendor, which results in additional cost
to the Exchange. The proposed fee
schedule will enable ISE to increase the
number of different configurations of
gateway equipment available to
members. As a result, members will not
be able to obtain gateway equipment
that best suits their needs. Additionally,
the proposed fee schedule will also
allow ISE to offset any increased cost
that the Exchange may incur in the
event a member returns any gateway
equipment early and to cover the
Exchange’s administrative costs.
Accordingly, ISE proposes charging
members a monthly fee of 4.75 percent
of ISE’s costs of leasing the gateway
equipment from its vendor.6 The
Exchange believes that this proposed
change will enable it to maintain control
over price fluctuations, technology
changes in equipment, and the costs
associated with early equipment
returns. The Exchange also proposes to
add a level of granularity to its
equipment installation, change, and
removal fees. Rather than applying the
fees to cabinets generally, the Exchange
proposes to charge per piece of
equipment. The Exchange expects the
proposed fee change to have minimal
impact to its members. For example, the
monthly fee for member that currently
leases 2 routers with 2 T–1 lines, 2
switches and 2 gateways will decrease
by $29. Whereas, the monthly fee for a
member who leases the same
configuration above but with 4 gateways
will increase by $86.7
6 The commission notes that in Amendment No.
1, ISE added language to Exhibit 5 to clarify that
the 4.75% fee is based solely on the cost of the
specific equipment leased by such member.
7 These are just two examples of fees charged by
the Exchange. Members have many options in the
gateway equipment they lease from the Exchange
based on their business model. The fee charged by
the Exchange is entirely dependent on the number
and type of gateway equipment leased by a member.
PO 00000
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37879
• Network Fees. The Exchange
proposes to increase its line connection
charges for T–1 and T–3 lines to cover
the cost of routers that enable members
to link with the Exchange and the
Exchange to link with its
telecommunications provider. Until
now, the Exchange had not charged
members a fee to cover the cost of these
routers. Accordingly, ISE proposes to
change the T–1 line connection fee from
$250 to $300, and the T–3 line
connection fee from $1,250 to $1,500.
Additionally, the Exchange proposes to
extend the ‘‘megabit fee’’ charged to
members who connect via Ethernet to
members who connect via all thirdparty managed service providers.
• Expired ‘‘Refresh’’ Program. The
Exchange is deleting references to an
expired member ‘‘refresh’’ program.
That program, which was approved by
the Commission on November 12,
2004,8 expired on November 30, 2004.
2. Statutory basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,9 in general, and
furthers the objectives of Seciton 6(b)(4)
of the Act,10 in particular, in that it
provides for the equitable allocation of
reasonable dues, fees, and other charges
among its members.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange has neither solicited
nor received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The proposed rule change has become
effective upon filing pursuant to Section
19(b)(3)(A)(ii) of the Act 11 and
subparagraph (f)(2) of Rule 19b–4
thereunder,12 because it establishes or
changes a due, fee, or other charge
imposed by the ISE. At any time within
60 days of the filing of the amended
proposed rule change, the Commission
may summarily abrogate such rule
8 See Securities Exchange Act Release No. 50658
(November 12, 2004), 69 FR 67768 (November 19,
2004).
9 15 U.S.C. 78f(b).
10 15 U.S.C. 78f(b)(4).
11 15 U.S.C. 78s(b)(3)(A)(ii).
12 17 CFR 240.19b–4(f)(2).
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37880
Federal Register / Vol. 70, No. 125 / Thursday, June 30, 2005 / Notices
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.13
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.14
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. 05–12886 Filed 6–29–05; 8:45 am]
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change, as amended, is consistent with
the Act. Comments may be sumitted by
any of the following methods:
BILLING CODE 8010–01–M
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–ISE–2005–19 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Jonathan G. Katz, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–9303.
All submissions should refer to File
Number SR–ISE–2005–19. 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 (https://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
Section, 100 F Street, NE., Washington,
DC 20549. Copies of the filing also will
be available for inspection and copying
at the principal offices 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–2005–19 and should be
submitted on or before July 21, 2005.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51915: File No. SR–NASD–
2003–168]
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc.; Notice of Filing of
Proposed Rule Change and
Amendment Nos. 1, 2, and 3 Thereto
Relating to the Release of Information
Through the Public Disclosure
Program
June 23, 2005.
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 November
21, 2003, the National Association of
Securities Dealers, Inc. (‘‘NASD’’) 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 NASD. NASD
amended the proposed rule change on
September 28, 2004, March 8, 2005, and
April 12, 2005. The Commission is
publishing this notice to solicit
comments on the proposed rule change,
as amended, from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
NASD is proposing to amend NASD
IM–8310–2 to enhance investor
protection by expanding the types of
information NASD makes available
through its public disclosure program;
to address fairness and privacy concerns
by excluding certain information
currently disclosed through the program
based on the status or disposition of the
event; to provide, upon written request
and subject to terms and conditions
established by NASD, a compilation of
publicly available information about
NASD members; and to make
conforming changes. The text of the
proposed rule change is set forth below.
Proposed new language is in italics;
proposed deletions are in [brackets].
*
*
*
*
*
14 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
13 See
supra note 3.
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16:26 Jun 29, 2005
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IM–8310–2. NASD BrokerCheck
Disclosure Program [Release of
Disciplinary and Other Information
Through the Public Disclosure
Program]
(a) In response to a written inquiry,
electronic inquiry, or telephonic inquiry
via a toll-free telephone listing, [the
Association] NASD shall release
information [contained in the Central
Registration Depository] regarding a
current or former member, an associated
person, or a person who was associated
with a member within the preceding
two years, through [the] NASD’s [Public
Disclosure Program] BrokerCheck
program. [Such information shall
include:]
[(1) the person’s employment history
and other business experience required
to be reported on Form U–4;]
[(2) currently approved registrations
for the member or associated person;]
[(3) the main office, legal status, and
type of business engaged in by the
member; and]
[(4) an event or proceeding—
(A) required to be reported under item
14 on Form U–4;
(B) required to be reported under item
11 on Form BD; or
(C) reported on Form U–6.]
[The Association also shall make
available through the Public Disclosure
Program certain arbitration decisions
against a member involving a securities
or commodities dispute with a public
customer. In addition, the Association
shall make available in response to
telephonic inquiries via the Public
Disclosure Program’s toll-free telephone
listing whether a particular member is
subject to the provisions of Rule
3010(b)(2). The Association shall not
release through the Public Disclosure
Program social security numbers,
residential history information, or
physical description information, or
information that the Association is
otherwise prohibited from releasing
under Federal law.]
(b) Except as otherwise provided in
paragraph (c) below, NASD shall
release:
(1) any information reported on the
most recently filed Form U4, Form U5,
Form U6, Form BD, and Form BDW
(collectively ‘‘Registration Forms’’);
(2) currently approved registrations;
(3) certain summary information
about arbitration awards against a
member involving a securities or
commodities dispute with a public
customer;
(4) the most recently submitted
comment, if any, provided to NASD by
the person who is covered by the
BrokerCheck program, in the form and
E:\FR\FM\30JNN1.SGM
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]]>Agencies
[Federal Register Volume 70, Number 125 (Thursday, June 30, 2005)]
[Notices]
[Pages 37878-37880]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-12886]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-51902; File No. SR-ISE-2005-19]
Self-Regulatory Organizations; International Securities Exchange,
Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change and Amendment No. 1 Thereto Relating to Its Membership Dues Fee
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 April 15, 2005, the International Securities Exchange (``ISE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items
[[Page 37879]]
have been prepared by the Exchange. The proposed rule change has been
filed by ISE as establishing or changing a due, fee, or other charge,
pursuant to Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2)
\4\ thereunder, which renders the proposal effective upon filing with
the Commission. On June 15, 2005, the Exchange filed Amendment No. 1 to
the proposed rule change.\5\ The Commission is publishing this notice
to solicit comments on the proposed rule change, as amended, 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).
\5\ Amendment No. 1 made minor, non-substantive clarifying
changes to the purpose section and Exhibit 5. These changes to the
proposed rule change did not affect the fees originally proposed.
The effective date of the original proposed rule change is April 15,
2005, and the effective date of the amendment is June 15, 2005. For
purposes of calculating the 60-day period within which the
Commission may summarily abrogate the proposed rule change, as
amended, under Section 19(b)(3)(C) of the Act, the Commission
considers the period to commence on June 15, 2005, the date on which
the Exchange submitted Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).
---------------------------------------------------------------------------
1. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The ISE proposes to amend its Schedule of Fees to (i) institute a
monthly percentage fee for computer gateways provided to members
instead of a flat fee, (ii) increase certain computer network fees to
cover associated equipment costs, and (iii) delete references to an
expired ``refresh'' program. The text of the proposed rule change is
available on the ISE's Web site (https://www.iseoptions.com), at the
ISE's Office of the Secretary, 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 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. The 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 the Exchange's
Schedule of Fees to (i) institute a monthly percentage fee for computer
gateways provided to members instead of a flat fee, (ii) increase
certain computer network fees to cover associated equipment costs, and
(iii) delete references to an expired ``refresh'' program.
Gateway Fees: The Exchange provides its members with
``gateway'' equipment which includes switches, servers and routers that
they use to connect to the ISE. The Exchange finances these gateways
through a lease with a vendor. The Exchange currently charges its
members a flat monthly fee for these gateways. If a member returns
these gateways to ISE early, ISE remains obligated under its lease with
the vendor, which results in additional cost to the Exchange. The
proposed fee schedule will enable ISE to increase the number of
different configurations of gateway equipment available to members. As
a result, members will not be able to obtain gateway equipment that
best suits their needs. Additionally, the proposed fee schedule will
also allow ISE to offset any increased cost that the Exchange may incur
in the event a member returns any gateway equipment early and to cover
the Exchange's administrative costs. Accordingly, ISE proposes charging
members a monthly fee of 4.75 percent of ISE's costs of leasing the
gateway equipment from its vendor.\6\ The Exchange believes that this
proposed change will enable it to maintain control over price
fluctuations, technology changes in equipment, and the costs associated
with early equipment returns. The Exchange also proposes to add a level
of granularity to its equipment installation, change, and removal fees.
Rather than applying the fees to cabinets generally, the Exchange
proposes to charge per piece of equipment. The Exchange expects the
proposed fee change to have minimal impact to its members. For example,
the monthly fee for member that currently leases 2 routers with 2 T-1
lines, 2 switches and 2 gateways will decrease by $29. Whereas, the
monthly fee for a member who leases the same configuration above but
with 4 gateways will increase by $86.\7\
---------------------------------------------------------------------------
\6\ The commission notes that in Amendment No. 1, ISE added
language to Exhibit 5 to clarify that the 4.75% fee is based solely
on the cost of the specific equipment leased by such member.
\7\ These are just two examples of fees charged by the Exchange.
Members have many options in the gateway equipment they lease from
the Exchange based on their business model. The fee charged by the
Exchange is entirely dependent on the number and type of gateway
equipment leased by a member.
---------------------------------------------------------------------------
Network Fees. The Exchange proposes to increase its line
connection charges for T-1 and T-3 lines to cover the cost of routers
that enable members to link with the Exchange and the Exchange to link
with its telecommunications provider. Until now, the Exchange had not
charged members a fee to cover the cost of these routers. Accordingly,
ISE proposes to change the T-1 line connection fee from $250 to $300,
and the T-3 line connection fee from $1,250 to $1,500. Additionally,
the Exchange proposes to extend the ``megabit fee'' charged to members
who connect via Ethernet to members who connect via all third-party
managed service providers.
Expired ``Refresh'' Program. The Exchange is deleting
references to an expired member ``refresh'' program. That program,
which was approved by the Commission on November 12, 2004,\8\ expired
on November 30, 2004.
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\8\ See Securities Exchange Act Release No. 50658 (November 12,
2004), 69 FR 67768 (November 19, 2004).
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2. Statutory basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\9\ in general, and furthers the
objectives of Seciton 6(b)(4) of the Act,\10\ in particular, in that it
provides for the equitable allocation of reasonable dues, fees, and
other charges among its members.
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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 Exchange does not believe that the proposed rule change will
impose any burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange has neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The proposed rule change has become effective upon filing pursuant
to Section 19(b)(3)(A)(ii) of the Act \11\ and subparagraph (f)(2) of
Rule 19b-4 thereunder,\12\ because it establishes or changes a due,
fee, or other charge imposed by the ISE. At any time within 60 days of
the filing of the amended proposed rule change, the Commission may
summarily abrogate such rule
[[Page 37880]]
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.\13\
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\11\ 15 U.S.C. 78s(b)(3)(A)(ii).
\12\ 17 CFR 240.19b-4(f)(2).
\13\ See supra note 3.
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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, as amended, is consistent with the Act. Comments may be
sumitted by any of the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-ISE-2005-19 on the subject line.
Paper Comments
Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-9303.
All submissions should refer to File Number SR-ISE-2005-19. 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 (https://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 Section, 100 F Street,
NE., Washington, DC 20549. Copies of the filing also will be available
for inspection and copying at the principal offices 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-2005-19 and should be
submitted on or before July 21, 2005.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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J. Lynn Taylor,
Assistant Secretary.
[FR Doc. 05-12886 Filed 6-29-05; 8:45 am]
BILLING CODE 8010-01-M
