Self-Regulatory Organizations; International Securities Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Fee Changes for Transactions in Options on Three Narrow-Based Indexes, 5096-5097 [E6-1176]

Download as PDF 5096 Federal Register / Vol. 71, No. 20 / Tuesday, January 31, 2006 / Notices CBOE–2005–89), as amended, is approved. proposed_rule_changes.asp) and at the Commission’s Public Reference Room. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.18 Nancy M. Morris, Secretary. [FR Doc. E6–1166 Filed 1–30–06; 8:45 am] 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 proposal. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–53173; File No. SR–ISE– 2006–03] Self-Regulatory Organizations; International Securities Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Fee Changes for Transactions in Options on Three Narrow-Based Indexes January 24, 2006. 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 January 5, 2006, the International Securities Exchange, Inc. (‘‘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 have been prepared by the ISE. The ISE has designated this proposal as one establishing or changing a due, fee, or other charge imposed by a selfregulatory organization pursuant to Section 19(b)(3)(A)(iii) of the Act 3 and Rule 19b–4(f)(2) thereunder,4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. hsrobinson on PROD1PC70 with NOTICES I. 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 establish fees for transactions in options on three narrowbased indexes: the ISE–B&S Water Index (‘‘HHO’’), the ISE–CCM Alternative Energy Index (‘‘POW’’) and the ISE– CCM Nanotechnology Index (‘‘TNY’’). The text of the proposed rule change is available at the Exchange, at the Exchange’s Web site http:// www.iseoptions.com/legal/ 18 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(iii). 4 17 CFR 240.19b–4(f)(2). 1 15 VerDate Aug<31>2005 15:34 Jan 30, 2006 Jkt 208001 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 adopt an execution fee and a comparison fee for all transactions in options on HHO, POW and TNY.5 These fees will be charged only to Exchange members. The amount of the execution fee and comparison fee for products covered by this filing shall be $0.15 and $0.03, respectively, for all Public Customer and Firm Proprietary orders. The amount of the execution fee and comparison fee for all Market Maker orders shall be equal to the execution fee and comparison fee currently charged by the Exchange for Market Maker transactions in equity options.6 The Exchange believes the proposed rule change will further its goal of introducing new products to the marketplace that are competitively priced. Additionally, the Exchange has entered into separate development agreements with Cronus Capital Markets and Boenning & Scattergood, Inc., in connection with the development, listing and trading of options on POW and TNY and HHO, respectively. As with certain other licensed options, the Exchange is adopting a fee of $0.05 per contract for trading in these options to defray the licensing costs. The Exchange believes charging the participants that trade this instrument is the most 5 The Exchange states that the HHO, POW and TNY meet the standards of ISE Rule 2002(b), which allows the Exchange to begin trading these products by filing Form 19b–4(e) at least five business days after commencement of trading these new products pursuant to Rule 19b–4(e) of the Act, 17 CFR 240.19b–4(e). 6 The execution fee is currently between $.21 and $.12 per contract side, depending on the Exchange Average Daily Volume, and the comparison fee is currently $.03 per contract side. PO 00000 Frm 00048 Fmt 4703 Sfmt 4703 equitable means of recovering the costs of the license. However, because of competitive pressures in the industry, the Exchange proposes to exclude Public Customer Orders 7 from this surcharge fee. Accordingly, this surcharge fee will only be charged to Exchange members with respect to nonPublic Customer Orders (e.g., Market Maker and Firm Proprietary orders) and shall apply to Linkage Orders 8 under a pilot program that is set to expire on July 31, 2006.9 Further, since options on HHO, POW and TNY are not multiplylisted, the Payment for Order Flow fee shall not apply. 2. Statutory Basis The Exchange states that the basis under the Act for this proposed rule change is the requirement under Section 6(b)(4) 10 that an exchange have an equitable allocation of reasonable dues, fees and other charges among its members and other persons using its facilities. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange believes that the proposed rule change will 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 neither solicited nor received comments on the proposed rule change. The ISE 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 proposed rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act,11 and paragraph (f)(2) of Rule 19b–4 thereunder 12 because it establishes or changes a due, fee, or other charge. At any time within 60 days of the filing of the proposed rule change, the 7 Public Customer Order is defined in Exchange Rule 100(a)(33) as an order for the account of a Public Customer. Public Customer is defined in Exchange Rule 100(a)(32) as a person that is not a broker or dealer in securities. 8 See Exchange Rule 1900. 9 See Securities Exchange Act Release No. 52168 (July 29, 2005), 70 FR 45454–01 (August 5, 2005), SR–ISE–2005–32 (extending the expiration date for this pilot program from July 31, 2005 to July 31, 2006). 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). E:\FR\FM\31JAN1.SGM 31JAN1 Federal Register / Vol. 71, No. 20 / Tuesday, January 31, 2006 / Notices 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. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.13 Nancy M. Morris, Secretary. [FR Doc. E6–1176 Filed 1–30–06; 8:45 am] BILLING CODE 8010–01–P 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 rulecomments@sec.gov. Please include File Number SR–ISE–2006–03 on the subject line. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–53149; File No. SR–NASD– 2006–003] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Guidance Regarding Firms’ Obligations Under NASD Rule 2111 Regarding Market Order Protection January 19, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 • Send paper comments in triplicate notice is hereby given that on January 6, to Nancy M. Morris, Secretary, 2006, the National Association of Securities and Exchange Commission, Securities Dealers, Inc. (‘‘NASD’’) filed 100 F Street, NE., Washington, DC with the Securities and Exchange 20549–9303. Commission (‘‘Commission’’) the proposed rule change as described in All submissions should refer to File Items I, II, and III below, which Items Number SR–ISE–2006–03. This file have been prepared by NASD. NASD number should be included on the subject line if e-mail is used. To help the has designated the proposed rule change as ‘‘constituting a stated policy, Commission process and review your practice, or interpretation with respect comments more efficiently, please use only one method. The Commission will to the meaning, administration, or post all comments on the Commission’s enforcement of an existing rule’’ under Section 19(b)(3)(A)(i) of the Act 3 and Internet Web site (http://www.sec.gov/ Rule 19b–4(f)(1) thereunder,4 which rules/sro.shtml). Copies of the renders the proposal effective upon submission, all subsequent filing with the Commission. The amendments, all written statements Commission is publishing this notice to with respect to the proposed rule solicit comments on the proposed rule change that are filed with the change from interested persons. Commission, and all written communications relating to the I. Self-Regulatory Organization’s proposed rule change between the Statement of the Terms of Substance of Commission and any person, other than the Proposed Rule Change those that may be withheld from the public in accordance with the NASD is filing with the Commission provisions of 5 U.S.C. 552, will be Notice to Members (‘‘NTM’’) 06–03, available for inspection and copying in which provides guidance regarding the the Commission’s Public Reference application of new NASD Rule 2111 Room. Copies of such filing also will be prohibiting members from trading ahead available for inspection and copying at of customer market orders under certain the ISE. All comments received will be circumstances. posted without change; the Commission No changes to the text of NASD rules does not edit personal identifying are required by this proposed rule information from submissions. You change. should submit only information that you wish to make available publicly. All 13 17 CFR 200.30–3(a)(12). submissions should refer to File 1 15 U.S.C. 78s(b)(1). Number SR–ISE–2006–03 and should be 2 17 CFR 240.19b–4. submitted on or before February 21, 3 15 U.S.C. 78s(b)(3)(A)(i). 2006. 4 17 CFR 240.19b–4(f)(1). hsrobinson on PROD1PC70 with NOTICES Paper Comments VerDate Aug<31>2005 15:34 Jan 30, 2006 Jkt 208001 PO 00000 Frm 00049 Fmt 4703 Sfmt 4703 5097 II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, NASD 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. NASD 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 On August 9, 2005, the Commission approved new NASD Rule 2111, Trading Ahead of Customer Market Orders, which, among other things, prohibits a firm that accepts and holds a customer market order from trading for its own account at prices that would satisfy the customer market order, unless the firm immediately thereafter executes the customer market order.5 On October 10, 2005, NASD issued NTM 05–69 informing firms of Commission approval of new Rule 2111 and the January 9, 2006 effective date of the new rule.6 NTM 05–69 also informed firms that NASD would be publishing a separate NTM providing guidance regarding the application of Rule 2111. In NTM 06–03, NASD staff is, among other things, publishing questions and answers regarding the application of the new rule to assist members in their implementation. NASD is filing the proposed rule change for immediate effectiveness as a stated policy, practice, or interpretation with respect to the meaning, administration, or enforcement of an existing rule of NASD. The compliance date of the proposed rule change will be January 9, 2006, which will coincide with the compliance date for Rule 2111. 2. Statutory Basis NASD believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act, which requires, among other things, that NASD rules be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest. NASD 5 See Securities Exchange Act Release No. 52226 (August 9, 2005), 70 FR 48219 (August 16, 2005) (SR–NASD–2004–045). 6 See NASD NTM 05–69 (October 2005). E:\FR\FM\31JAN1.SGM 31JAN1

Agencies

[Federal Register Volume 71, Number 20 (Tuesday, January 31, 2006)]
[Notices]
[Pages 5096-5097]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-1176]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53173; File No. SR-ISE-2006-03]


Self-Regulatory Organizations; International Securities Exchange, 
Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change Relating to Fee Changes for Transactions in Options on Three 
Narrow-Based Indexes

January 24, 2006.
    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 January 5, 2006, the International Securities Exchange, Inc. 
(``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 have been prepared by the ISE. 
The ISE has designated this proposal as one establishing or changing a 
due, fee, or other charge imposed by a self-regulatory organization 
pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-
4(f)(2) thereunder,\4\ which renders the proposal effective upon filing 
with the Commission. The Commission is publishing this notice to 
solicit comments on the proposed rule change 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)(iii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. 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 establish fees 
for transactions in options on three narrow-based indexes: the ISE-B&S 
Water Index (``HHO''), the ISE-CCM Alternative Energy Index (``POW'') 
and the ISE-CCM Nanotechnology Index (``TNY''). The text of the 
proposed rule change is available at the Exchange, at the Exchange's 
Web site http://www.iseoptions.com/legal/proposed_rule_changes.asp) 
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 proposal. The text of these 
statements may be examined at the places specified in Item IV below. 
The Exchange 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 adopt an execution fee and a 
comparison fee for all transactions in options on HHO, POW and TNY.\5\ 
These fees will be charged only to Exchange members. The amount of the 
execution fee and comparison fee for products covered by this filing 
shall be $0.15 and $0.03, respectively, for all Public Customer and 
Firm Proprietary orders. The amount of the execution fee and comparison 
fee for all Market Maker orders shall be equal to the execution fee and 
comparison fee currently charged by the Exchange for Market Maker 
transactions in equity options.\6\ The Exchange believes the proposed 
rule change will further its goal of introducing new products to the 
marketplace that are competitively priced.
---------------------------------------------------------------------------

    \5\ The Exchange states that the HHO, POW and TNY meet the 
standards of ISE Rule 2002(b), which allows the Exchange to begin 
trading these products by filing Form 19b-4(e) at least five 
business days after commencement of trading these new products 
pursuant to Rule 19b-4(e) of the Act, 17 CFR 240.19b-4(e).
    \6\ The execution fee is currently between $.21 and $.12 per 
contract side, depending on the Exchange Average Daily Volume, and 
the comparison fee is currently $.03 per contract side.
---------------------------------------------------------------------------

    Additionally, the Exchange has entered into separate development 
agreements with Cronus Capital Markets and Boenning & Scattergood, 
Inc., in connection with the development, listing and trading of 
options on POW and TNY and HHO, respectively. As with certain other 
licensed options, the Exchange is adopting a fee of $0.05 per contract 
for trading in these options to defray the licensing costs. The 
Exchange believes charging the participants that trade this instrument 
is the most equitable means of recovering the costs of the license. 
However, because of competitive pressures in the industry, the Exchange 
proposes to exclude Public Customer Orders \7\ from this surcharge fee. 
Accordingly, this surcharge fee will only be charged to Exchange 
members with respect to non-Public Customer Orders (e.g., Market Maker 
and Firm Proprietary orders) and shall apply to Linkage Orders \8\ 
under a pilot program that is set to expire on July 31, 2006.\9\ 
Further, since options on HHO, POW and TNY are not multiply-listed, the 
Payment for Order Flow fee shall not apply.
---------------------------------------------------------------------------

    \7\ Public Customer Order is defined in Exchange Rule 100(a)(33) 
as an order for the account of a Public Customer. Public Customer is 
defined in Exchange Rule 100(a)(32) as a person that is not a broker 
or dealer in securities.
    \8\ See Exchange Rule 1900.
    \9\ See Securities Exchange Act Release No. 52168 (July 29, 
2005), 70 FR 45454-01 (August 5, 2005), SR-ISE-2005-32 (extending 
the expiration date for this pilot program from July 31, 2005 to 
July 31, 2006).
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2. Statutory Basis
    The Exchange states that the basis under the Act for this proposed 
rule change is the requirement under Section 6(b)(4) \10\ that an 
exchange have an equitable allocation of reasonable dues, fees and 
other charges among its members and other persons using its facilities.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that the proposed rule change will 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 neither solicited nor received comments on the 
proposed rule change. The ISE 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 proposed rule change has become effective pursuant to 
Section 19(b)(3)(A)(ii) of the Act,\11\ and paragraph (f)(2) of Rule 
19b-4 thereunder \12\ because it establishes or changes a due, fee, or 
other charge. At any time within 60 days of the filing of the proposed 
rule change, the

[[Page 5097]]

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.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \12\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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 rule-comments@sec.gov. Please include 
File Number SR-ISE-2006-03 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-9303.

All submissions should refer to File Number SR-ISE-2006-03. 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. Copies of such 
filing also will be available for inspection and copying at 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-2006-03 
and should be submitted on or before February 21, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Nancy M. Morris,
Secretary.
 [FR Doc. E6-1176 Filed 1-30-06; 8:45 am]
BILLING CODE 8010-01-P