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]
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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 (https://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 (https://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 (https://
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
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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
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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 https://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
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15:19 Mar 27, 2006
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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).
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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 (https://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 (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
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
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U.S.C. 78s(b)(1).
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]]>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]
-----------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
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
(https://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.
---------------------------------------------------------------------------
\4\ https://www.iseoptions.com/marketplace/statistics/sentiment_index.asp.
---------------------------------------------------------------------------
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).
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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
(https://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 (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 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
