Self-Regulatory Organizations; International Securities Exchange, Inc.; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto to Establish Fees for Enhanced Sentiment Market Data, 15501-15503 [E6-4432]

Download as PDF Federal Register / Vol. 71, No. 59 / Tuesday, March 28, 2006 / Notices with the Rule. Section 2(b)(3) provides that the Exchange will give public notice of its final determination to delist the security by issuing a press release and posting a notice on its Web site. The public notice will remain on the Web site of the Exchange until the delisting is effective. 2. Statutory Basis The Exchange believes that its proposal, as amended, is consistent with the requirements of Section 6(b) of the Act,8 in general, and Section 6(b)(5) of the Act 9 in particular, in that it is designed to promote just and equitable principles of trade, to remove impediments to and to perfect the mechanism of a free and open market and a national market system and is not designed to permit unfair discrimination between customers, brokers, or dealers, or to regulate by virtue of any authority matters not related to the administration of the Exchange. B. Self-Regulatory Organization’s Statement on Burden on Competition The BSE does not believe that the proposed rule change, as amended, will 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 No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which BSE consents, the Commission will: (A) By order approve such proposed rule change, or (B) Institute proceedings to determine whether the proposed rule change should be disapproved. cprice-sewell on PROD1PC66 with NOTICES 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 8 15 9 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). VerDate Aug<31>2005 15:19 Mar 27, 2006 the Act. Comments may be submitted by any of the following methods: SECURITIES AND EXCHANGE COMMISSION 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–BSE–2005–46 on the subject line. [Release No. 34–53532; File No. SR–ISE– 2005–56] Self-Regulatory Organizations; International Securities Exchange, Inc.; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto to Establish Fees for Enhanced Sentiment Market Data March 21, 2006. Paper Comments Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 • Send paper comments in triplicate (‘‘Act’’),1 and Rule 19b–4 thereunder,2 to Nancy M. Morris, Secretary, notice is hereby given that on December Securities and Exchange Commission, 1, 2005, the International Securities 100 F Street, NE., Washington, DC Exchange, Inc. (‘‘ISE’’ or ‘‘Exchange’’) 20549–1090. filed with the Securities and Exchange Commission (‘‘Commission’’) the All submissions should refer to File proposed rule change as described in Number SR–BSE–2005–46. This file Items I, II, and III below, which items number should be included on the subject line if e-mail is used. To help the have been prepared by the ISE. On March 14, 2006, the Exchange filed Commission process and review your Amendment No. 1 to the proposed rule comments more efficiently, please use change.3 The Commission is publishing only one method. The Commission will this notice to solicit comments on the post all comments on the Commission’s proposed rule change, as amended, from Internet Web site (http://www.sec.gov/ interested persons. rules/sro.shtml). Copies of the I. Self-Regulatory Organization’s submission, all subsequent Statement of the Terms of Substance of amendments, all written statements the Proposed Rule Change with respect to the proposed rule The Exchange is proposing to amend change that are filed with the its Schedule of Fees to establish fees for Commission, and all written enhanced sentiment market data. The communications relating to the text of the proposed rule change is proposed rule change between the Commission and any person, other than available at the Commission’s Public Reference Room, at the Exchange and at those that may be withheld from the the Exchange’s Web site (http:// public in accordance with the www.iseoptions.com/legal/ provisions of 5 U.S.C. 552, will be proposed_rule_changes.asp). available for inspection and copying in the Commission’s Public Reference II. Self-Regulatory Organization’s Statement of the Purpose of, and Room. Copies of the filing also will be Statutory Basis for, the Proposed Rule available for inspection and copying at Change the principal office of the BSE. All comments received will be posted In its filing with the Commission, the without change; the Commission does ISE included statements concerning the not edit personal identifying purpose of, and basis for, the proposed information from submissions. You rule change as amended and discussed any comments it received on the should submit only information that you wish to make available publicly. All proposed rule change. The text of these statements may be examined at the submissions should refer to File places specified in Item IV below. The Number SR–BSE–2005–46 and should Exchange has prepared summaries, set be submitted on or before April 18, forth in sections A, B and C below, of 2006. the most significant aspects of such For the Commission, by the Division of statements. Market Regulation, pursuant to delegated authority.10 Nancy M. Morris, Secretary. [FR Doc. 06–2996 Filed 3–23–06; 4:31 pm] BILLING CODE 8010–01–P 10 17 Jkt 208001 15501 PO 00000 CFR 200.30–3(a)(12). Frm 00130 Fmt 4703 Sfmt 4703 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 In Amendment No. 1, the ISE added an unlimited queries subscription level, and explained in the purpose section of the proposed rule change the amount of the proposed fees, the impact of the Broker Marketing Alliance (described below) on the proposed fees, and the tier system adopted by the Exchange to facilitate the participation by all member firms for a bonus rebate. 2 17 E:\FR\FM\28MRN1.SGM 28MRN1 15502 Federal Register / Vol. 71, No. 59 / Tuesday, March 28, 2006 / Notices the market for sentiment levels that meet pre-defined parameters. For example, an end user of a pre-defined query for the scanning tool would be able to determine which three stocks are 1. Purpose most bullish in the oil sector based on The ISE currently creates market data sentiment values. The enhanced that consists of options quotes and sentiment data will include sentiment orders that are generated by its members values for particular indices, industry and all trades that are executed on the sectors or individual stocks and will be Exchange. The ISE also produces a Best calculated three times per hour versus Bid/Offer, or BBO, with the aggregate only one time per hour for the ISEE. size from all outstanding quotes and The enhanced sentiment data will be orders at the top price level, or the ‘‘top available to on-line investors on a of the book.’’ This data is formatted subscription basis. The Exchange according to Options Price Reporting proposes four subscription levels: (i) Authority (‘‘OPRA’’) specification and 100 queries for $11.95 per month; (ii) sent to OPRA for redistribution. OPRA 200 queries for $14.95 per month; (iii) processes the ISE’s data along with the unlimited queries for $19.95 per month; same data sets from the other five and (iv) unlimited pre-defined queries options exchanges and creates a for $11.95 per month. This enhanced National BBO, or ‘‘NBBO,’’ from all six sentiment data will also be offered by options exchanges. some broker-dealers that participate in The ISE also creates data that is not the ISE Broker Marketing Alliance disseminated by OPRA. One example of program. A Broker Marketing Alliance is such data is the ISE Sentiment Index, an arrangement between ISE and a or ISEE, a calculation that represents participating U.S. broker-dealer who an overall view of market sentiment. markets the enhanced sentiment The ISEE provides an intra-day picture offering to its customers. Clients of of how investors view stock prices by participating brokers will be able to take assessing customers’ option trading advantage of a discounted price for the activity. Unlike the traditional put/call same four subscription levels: (i) 100 ratio, which makes no distinction queries for $9.95 per month; (ii) 200 between customer, market maker or firm queries for $11.95 per month; (iii) transactions, the ISEE measures only unlimited queries for $15.95 per month; opening long customer transactions on and (iv) unlimited pre-defined queries the ISE. The ISE updates the current for $9.95 per month. Under a Broker Marketing Alliance, ISEE value hourly during market hours and posts it for free on its Web site.4 The participating U.S. broker-dealers will participate in a revenue sharing ISEE is the basis for the enhanced arrangement with the Exchange for each sentiment market data, for which the of their referred customers that Exchange is proposing to establish the subscribes to the enhanced sentiment fees in this proposed rule change. offering. Participating broker-dealers The ISE believes the enhanced will receive a rebate of 35% of the sentiment data offering will allow subscription fee collected from subscribers to identify bullish and subscribers. An additional bonus rebate bearish investor sentiment for nearly will be paid to broker-dealers that any issue traded on the Exchange using achieve a subscription level based on the same formula that is used for the the size of their firm and the number of ISEE calculation. Where the ISEE is a clients that subscribe to the service. The single value for the overall market sentiment, the enhanced sentiment data Exchange believes that a tier system, as reflected in the Notes section of the offering will provide more specific proposed Schedule of Fees, is the most information that will allow an end user equitable method by which all member to retrieve a sentiment value for an firms, regardless of their size, will be individual symbol using a query tool, able to participate in the rebate program. which is an intuitive Web browser interface. For example, an end user may Accordingly, the Exchange proposes a bonus rebate payable as follows: $500 be interested in the sentiment value for per month for 500 subscribers at firms only the Nasdaq 100 Tracking Stock with 10,000–25,000 customers; $750 per (symbol QQQQ). The user would just month for 750 subscribers at firms with enter that symbol into the query tool interface to retrieve the sentiment value. 25,001–100,000 customers; and $1,000 per month for 1,000 subscribers at firms In addition to the enhanced sentiment with 100,001 or more customers. The data query tool, there will also be a Exchange believes that firms with a sentiment scanning tool that will comb customer base of 10,000–25,000 accounts will be able to achieve 500 4 http://www.iseoptions.com/marketplace/ statistics/sentiment_index.asp. subscriptions with relatively the same cprice-sewell on PROD1PC66 with NOTICES A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change VerDate Aug<31>2005 15:19 Mar 27, 2006 Jkt 208001 PO 00000 Frm 00131 Fmt 4703 Sfmt 4703 ease as firms with a customer base of 25,001–100,000 accounts and 100,001 or more accounts, each of which are expected to achieve 750 and 1000 subscriptions, respectively, in order to qualify for the additional bonus rebate. The proposed additional bonus amounts paid to the brokers are all equal to 10.05% of the subscription revenue based on a subscription fee of $9.95 per month. For example, 500 subscribers at $9.95 is equal to $4,975 and the $500 bonus is equal to 10.05% of the $4,975; 750 subscribers at $9.95 is equal to $7,462.50 and the $750 bonus is equal to 10.05% of the $7,462.50; and 1,000 subscribers at $9.95 is equal to $9,950 and the $1,000 bonus is equal to 10.05% of the $9,950. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b)(4) of the Act,5 which requires that an exchange have an equitable allocation of reasonable dues, fees and other charges among its members and other persons using its facilities. The ISE developed and conducted a comprehensive survey of a cross-section of participants in the financial services industry regarding their level of interest in a number of proprietary market data offerings and, based on the results of that survey, the Exchange developed a business plan to create and offer a number of proprietary market data products targeted to potential user groups, e.g., individual investors, institutional investors, brokerdealers, etc. The Exchange also retained a consultant to validate the business plan and to provide advice on the structure and amount of fees to charge for these products. The ISE established a tiered pricing structure for enhanced sentiment data based on all of this information. The ISE believes that, under the tiered pricing structure, it is able to charge a lower fee to users who subscribe through the Broker Marketing Alliance because the Exchange will save on advertising costs associated with that user. Conversely, the Exchange believes it must charge a higher fee to users who subscribe directly on its Web site because it must incur advertising costs associated with that user. The Exchange believes the tiered levels and prices offered for the proposed market data offering provide investors with an ability to choose a plan that best suits their needs, from an annual subscription that is discounted, to a one-time subscription, regardless of whether an investor subscribes directly through the ISE’s Web site or through a Broker 5 15 U.S.C. 78(f)(b)(4). E:\FR\FM\28MRN1.SGM 28MRN1 Federal Register / Vol. 71, No. 59 / Tuesday, March 28, 2006 / Notices Marketing Alliance. Further, the Exchange believes the proposed rule filing provides market participants with an opportunity to obtain enhanced sentiment market data in furtherance of their investment decisions. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange believes that the proposed rule change would 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 written comments from members or other interested parties. III. Date of Effectiveness of the Proposed Rule Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve such proposed rule change; or (B) Institute proceedings to determine whether the proposed rule change should be disapproved. 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 cprice-sewell on PROD1PC66 with NOTICES • 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 No. SR–ISE–2005–56 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 20549–1090. VerDate Aug<31>2005 15:19 Mar 27, 2006 Jkt 208001 15503 All submissions should refer to File Number SR–ISE–2005–56. 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 Commissions 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 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–2005–56 and should be submitted by April 18, 2006. Securities Dealers, Inc. (‘‘NASD’’) filed with the Securities and Exchange Commission (‘‘Commission’’ or ‘‘SEC’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by NASD. NASD has asked the Commission to grant accelerated approval to the proposed rule change. The Commission is not granting accelerated approval to the proposed rule change at this time, but is considering doing so at the close of a 15-day comment period. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.6 Nancy M. Morris, Secretary. [FR Doc. E6–4432 Filed 3–27–06; 8:45 am] To continue to ensure investor protection and enhance market quality, NASD’s Board of Governors is issuing an interpretation to NASD Rules dealing with member firms’ treatment of their customer limit orders in Nasdaq and exchange-listed securities. This interpretation, which is applicable from 9:30 a.m. to 6:30 p.m. Eastern Time, will require members [acting as market makers] to handle their customer limit orders with all due care so that members[market makers] do not ‘‘trade ahead’’ of those limit orders. Thus, members [acting as market makers] that handle customer limit orders, whether received from their own customers or from another member, are prohibited from trading at prices equal or superior to that of the limit order without executing the limit order. In the interests of investor protection, NASD is eliminating the so-called disclosure ‘‘safe harbor’’ previously established for members that fully disclosed to their customers the practice of trading ahead of a customer limit order by a marketmaking firm.1 Rule 2110 states that: A member, in the conduct of his business, shall observe high standards BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–53527; File No. SR–NASD– 2006–035] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing of Proposed Rule Change Relating to Proposed Amendments to IM–2110–2 to Codify NASD’s Existing Position that the Manning Rule Applies to All Members, Whether Acting as a Market Maker or Not March 21, 2006. 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 6, 2006, the National Association of 6 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change NASD proposes to amend NASD Interpretive Material (‘‘IM’’) 2110–2, Trading Ahead of Customer Limit Order (commonly referred to as the ‘‘Manning Rule’’), to codify NASD’s existing position that the Manning Rule applies to all members, whether acting as a market maker or not. The text of the proposed rule change is below. Proposed new language is in italics; proposed deletions are in brackets. IM–2110–2. Trading Ahead of Customer Limit Order (a) General Application 1 15 PO 00000 Frm 00132 Fmt 4703 1 15 Sfmt 4703 U.S.C. 78s(b)(1). E:\FR\FM\28MRN1.SGM 28MRN1

Agencies

[Federal Register Volume 71, Number 59 (Tuesday, March 28, 2006)]
[Notices]
[Pages 15501-15503]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-4432]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53532; File No. SR-ISE-2005-56]


Self-Regulatory Organizations; International Securities Exchange, 
Inc.; Notice of Filing of Proposed Rule Change and Amendment No. 1 
Thereto to Establish Fees for Enhanced Sentiment Market Data

 March 21, 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 December 1, 2005, 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. 
On March 14, 2006, the Exchange filed Amendment No. 1 to the proposed 
rule change.\3\ The Commission is publishing this notice to solicit 
comments on the proposed rule change, as amended, from interested 
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ In Amendment No. 1, the ISE added an unlimited queries 
subscription level, and explained in the purpose section of the 
proposed rule change the amount of the proposed fees, the impact of 
the Broker Marketing Alliance (described below) on the proposed 
fees, and the tier system adopted by the Exchange to facilitate the 
participation by all member firms for a bonus rebate.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is proposing to amend its Schedule of Fees to 
establish fees for enhanced sentiment market data. The text of the 
proposed rule change is available at the Commission's Public Reference 
Room, at the Exchange and at the Exchange's Web site 
(http://www.iseoptions.com/legal/proposed_rule_changes.asp).

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 as 
amended 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 Exchange has prepared summaries, set 
forth in sections A, B and C below, of the most significant aspects of 
such statements.

[[Page 15502]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The ISE currently creates market data that consists of options 
quotes and orders that are generated by its members and all trades that 
are executed on the Exchange. The ISE also produces a Best Bid/Offer, 
or BBO, with the aggregate size from all outstanding quotes and orders 
at the top price level, or the ``top of the book.'' This data is 
formatted according to Options Price Reporting Authority (``OPRA'') 
specification and sent to OPRA for redistribution. OPRA processes the 
ISE's data along with the same data sets from the other five options 
exchanges and creates a National BBO, or ``NBBO,'' from all six options 
exchanges.
    The ISE also creates data that is not disseminated by OPRA. One 
example of such data is the ISE Sentiment Index[supreg], or 
ISEE[supreg], a calculation that represents an overall view of market 
sentiment. The ISEE provides an intra-day picture of how investors view 
stock prices by assessing customers' option trading activity. Unlike 
the traditional put/call ratio, which makes no distinction between 
customer, market maker or firm transactions, the ISEE measures only 
opening long customer transactions on the ISE. The ISE updates the 
current ISEE value hourly during market hours and posts it for free on 
its Web site.\4\ The ISEE is the basis for the enhanced sentiment 
market data, for which the Exchange is proposing to establish the fees 
in this proposed rule change.
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\4\ http://www.iseoptions.com/marketplace/statistics/sentiment_index.asp.
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    The ISE believes the enhanced sentiment data offering will allow 
subscribers to identify bullish and bearish investor sentiment for 
nearly any issue traded on the Exchange using the same formula that is 
used for the ISEE calculation. Where the ISEE is a single value for the 
overall market sentiment, the enhanced sentiment data offering will 
provide more specific information that will allow an end user to 
retrieve a sentiment value for an individual symbol using a query tool, 
which is an intuitive Web browser interface. For example, an end user 
may be interested in the sentiment value for only the Nasdaq 100 
Tracking Stock (symbol QQQQ). The user would just enter that symbol 
into the query tool interface to retrieve the sentiment value. In 
addition to the enhanced sentiment data query tool, there will also be 
a sentiment scanning tool that will comb the market for sentiment 
levels that meet pre-defined parameters. For example, an end user of a 
pre-defined query for the scanning tool would be able to determine 
which three stocks are most bullish in the oil sector based on 
sentiment values. The enhanced sentiment data will include sentiment 
values for particular indices, industry sectors or individual stocks 
and will be calculated three times per hour versus only one time per 
hour for the ISEE.
    The enhanced sentiment data will be available to on-line investors 
on a subscription basis. The Exchange proposes four subscription 
levels: (i) 100 queries for $11.95 per month; (ii) 200 queries for 
$14.95 per month; (iii) unlimited queries for $19.95 per month; and 
(iv) unlimited pre-defined queries for $11.95 per month. This enhanced 
sentiment data will also be offered by some broker-dealers that 
participate in the ISE Broker Marketing Alliance program. A Broker 
Marketing Alliance is an arrangement between ISE and a participating 
U.S. broker-dealer who markets the enhanced sentiment offering to its 
customers. Clients of participating brokers will be able to take 
advantage of a discounted price for the same four subscription levels: 
(i) 100 queries for $9.95 per month; (ii) 200 queries for $11.95 per 
month; (iii) unlimited queries for $15.95 per month; and (iv) unlimited 
pre-defined queries for $9.95 per month.
    Under a Broker Marketing Alliance, participating U.S. broker-
dealers will participate in a revenue sharing arrangement with the 
Exchange for each of their referred customers that subscribes to the 
enhanced sentiment offering. Participating broker-dealers will receive 
a rebate of 35% of the subscription fee collected from subscribers. An 
additional bonus rebate will be paid to broker-dealers that achieve a 
subscription level based on the size of their firm and the number of 
clients that subscribe to the service. The Exchange believes that a 
tier system, as reflected in the Notes section of the proposed Schedule 
of Fees, is the most equitable method by which all member firms, 
regardless of their size, will be able to participate in the rebate 
program. Accordingly, the Exchange proposes a bonus rebate payable as 
follows: $500 per month for 500 subscribers at firms with 10,000-25,000 
customers; $750 per month for 750 subscribers at firms with 25,001-
100,000 customers; and $1,000 per month for 1,000 subscribers at firms 
with 100,001 or more customers. The Exchange believes that firms with a 
customer base of 10,000-25,000 accounts will be able to achieve 500 
subscriptions with relatively the same ease as firms with a customer 
base of 25,001-100,000 accounts and 100,001 or more accounts, each of 
which are expected to achieve 750 and 1000 subscriptions, respectively, 
in order to qualify for the additional bonus rebate. The proposed 
additional bonus amounts paid to the brokers are all equal to 10.05% of 
the subscription revenue based on a subscription fee of $9.95 per 
month. For example, 500 subscribers at $9.95 is equal to $4,975 and the 
$500 bonus is equal to 10.05% of the $4,975; 750 subscribers at $9.95 
is equal to $7,462.50 and the $750 bonus is equal to 10.05% of the 
$7,462.50; and 1,000 subscribers at $9.95 is equal to $9,950 and the 
$1,000 bonus is equal to 10.05% of the $9,950.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b)(4) of the Act,\5\ which requires that an exchange 
have an equitable allocation of reasonable dues, fees and other charges 
among its members and other persons using its facilities. The ISE 
developed and conducted a comprehensive survey of a cross-section of 
participants in the financial services industry regarding their level 
of interest in a number of proprietary market data offerings and, based 
on the results of that survey, the Exchange developed a business plan 
to create and offer a number of proprietary market data products 
targeted to potential user groups, e.g., individual investors, 
institutional investors, broker-dealers, etc. The Exchange also 
retained a consultant to validate the business plan and to provide 
advice on the structure and amount of fees to charge for these 
products. The ISE established a tiered pricing structure for enhanced 
sentiment data based on all of this information. The ISE believes that, 
under the tiered pricing structure, it is able to charge a lower fee to 
users who subscribe through the Broker Marketing Alliance because the 
Exchange will save on advertising costs associated with that user. 
Conversely, the Exchange believes it must charge a higher fee to users 
who subscribe directly on its Web site because it must incur 
advertising costs associated with that user. The Exchange believes the 
tiered levels and prices offered for the proposed market data offering 
provide investors with an ability to choose a plan that best suits 
their needs, from an annual subscription that is discounted, to a one-
time subscription, regardless of whether an investor subscribes 
directly through the ISE's Web site or through a Broker

[[Page 15503]]

Marketing Alliance. Further, the Exchange believes the proposed rule 
filing provides market participants with an opportunity to obtain 
enhanced sentiment market data in furtherance of their investment 
decisions.
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    \5\ 15 U.S.C. 78(f)(b)(4).
---------------------------------------------------------------------------

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

    The Exchange believes that the proposed rule change would 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 written comments from members or other interested parties.

III. Date of Effectiveness of the Proposed Rule

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve such proposed rule change; or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

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 No. SR-ISE-2005-56 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 20549-1090.

All submissions should refer to File Number SR-ISE-2005-56. 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 Commissions 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 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-
2005-56 and should be submitted by April 18, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E6-4432 Filed 3-27-06; 8:45 am]
BILLING CODE 8010-01-P