Self-Regulatory Organizations; International Securities Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to PrecISE Fees, 40566-40567 [E6-11210]

Download as PDF 40566 Federal Register / Vol. 71, No. 136 / Monday, July 17, 2006 / Notices should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–ISE–2006–37 and should be submitted on or before August 7, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.16 Jill M. Peterson, Assistant Secretary. [FR Doc. E6–11204 Filed 7–14–06; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54121; File No. SR–ISE– 2006–31] Self-Regulatory Organizations; International Securities Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to PrecISE Fees July 10, 2006. rwilkins on PROD1PC63 with NOTICES 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 June 30, 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 the ISE under Section 19(b)(3)(A)(ii) 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. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The ISE is proposing to amend its Schedule of Fees to: (i) Adopt PrecISE through VPN fees; (ii) clarify the application of a fee waiver for PrecISE Trade terminals; and (iii) exempt PrecISE through VPN from Session/API fees. The text of the proposed rule change is available on the ISE’s Web site (http://www.iseoptions.com/legal/ proposed _rule_changes.asp), at the principal office of the ISE, and at the Commission’s Public Reference Room. 16 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)(ii). 4 17 CFR 240.19b–4(f)(2). 1 15 VerDate Aug<31>2005 17:41 Jul 14, 2006 Jkt 208001 II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the ISE included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The ISE has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of this proposed rule change is to amend the Exchange’s Schedule of Fees to: (i) Adopt PrecISE through VPN fees; (ii) clarify the application of a fee waiver for PrecISE Trade terminals; and (iii) exempt PrecISE through VPN from Session/API fees. PrecISE through VPN is a new method for connecting a PrecISE Trade terminal to the Exchange.5 A PrecISE through VPN connection is available to Electronic Access Members (‘‘EAMs’’) of the Exchange. PrecISE through VPN consists of PrecISE, a front-end, order entry application that was recently rolled out by the Exchange that will eventually replace the current CLICK trade terminals.6 PrecISE, in addition to a dedicated network connection, also runs over a secure ‘‘virtual private network’’ (i.e., ‘‘VPN’’) over the Internet. PrecISE through VPN was designed for EAMs that want a lower cost, lower bandwidth connection to the Exchange than the traditional, dedicated network PrecISE connection. The Exchange also envisions that EAMs will use PrecISE through VPN as a back-up or disaster recovery connection to the Exchange. As a result, the Exchange is proposing to establish a monthly fee of $250 per terminal for PrecISE through VPN to through VPN is similar to CLICK through VPN, for which the Exchange has previously adopted fees. See Securities Exchange Act Release No. 48157 (July 10, 2003), 68 FR 42443 (July 17, 2003) (notice and immediate effectiveness of SR–ISE–2003–14). 6 The Exchange represents that PrecISE through VPN is merely a different means of connecting to the trading system operated by the Exchange known as PrecISE (i.e., it is a new means of connecting to the Exchange’s trading system), and does not require any changes to the Exchange’s surveillance or communications rules. PO 00000 5 PrecISE Frm 00098 Fmt 4703 Sfmt 4703 offset the Exchange’s costs for maintaining these connections. Secondly, the Exchange recently adopted a waiver of fees related to the new PrecISE Trade terminals, such that fees for the first two months of a member’s use of PrecISE Trade terminals are waived.7 The Exchange proposes to clarify that the waiver shall only apply to those members that are concurrently using both the old CLICK Trade terminals and the new PrecISE Trade terminals. The purpose of the waiver is to allow an existing member to transition from a CLICK Trade terminal to a PrecISE Trade terminal, without being charged both fees. For example, new members who only have PrecISE Trade terminals would not be eligible for this fee waiver. Finally, the Exchange is proposing that PrecISE through VPN connections be exempt from Session/API fees. As with CLICK through VPN, Session/API fees will not apply for connecting to the Exchange’s trading system through a VPN connection. 2. Statutory Basis The Exchanges believes that the basis under the Act for this proposed rule change is the requirement under Section 6(b)(4) of the Act 8 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 does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing rule change establishes or changes a due, fee, or other charge imposed by the Exchange, it has become effective pursuant to 7 See Securities Exchange Act Release No. 53788 (May 11, 2006), 71 FR 28728 (May 17, 2006) (notice and immediate effectiveness of SR–ISE–2006–19). 8 15 U.S.C. 78f(b)(4). E:\FR\FM\17JYN1.SGM 17JYN1 Federal Register / Vol. 71, No. 136 / Monday, July 17, 2006 / Notices Section 19(b)(3)(A) of the Act 9 and Rule 19b–4(f)(2) 10 thereunder. At any time within 60 days of the filing of such proposed rule change, the 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. should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–ISE–2006–31 and should be submitted on or before August 7, 2006. 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: BILLING CODE 8010–01–P rwilkins on PROD1PC63 with NOTICES 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 No. SR–ISE–2006–31 on the subject line. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.11 Jill M. Peterson, Assistant Secretary. [FR Doc. E6–11210 Filed 7–14–06; 8:45 am] SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54124; File No. SR–ISE– 2005–49] Self-Regulatory Organizations; International Securities Exchange, Inc.; Order Approving Proposed Rule Change and Amendment Nos. 1 and 2 Relating to Complex Order Execution July 11, 2006. I. Introduction On October 4, 2005, the International Securities Exchange, Inc. (‘‘ISE’’ or Paper Comments ‘‘Exchange’’) filed with the Securities • Send paper comments in triplicate and Exchange Commission to Nancy M. Morris, Secretary, (‘‘Commission’’), pursuant to Section Securities and Exchange Commission, 19(b)(1) of the Securities Exchange Act Station Place, 100 F Street, NE., of 1934 (‘‘Act’’) 1 and Rule 19b–4 Washington, DC 20549–1090. thereunder,2 a proposed rule change to All submissions should refer to File amend ISE Rule 722, ‘‘Complex Number SR–ISE–2006–31. This file Orders,’’ to allow the legs of an optionsnumber should be included on the only complex order to be executed in subject line if e-mail is used. To help the penny increments. The ISE filed Commission process and review your Amendment Nos. 1 and 2 to the comments more efficiently, please use proposal on February 1, 2006, and April only one method. The Commission will 20, 2006, respectively.3 The proposed post all comments on the Commission’s rule change, as amended by Internet Web site (http://www.sec.gov/ Amendment Nos. 1 and 2, was rules/sro.shtml). Copies of the published for comment in the Federal submission, all subsequent Register on June 6, 2006.4 The amendments, all written statements Commission received no comments with respect to the proposed rule regarding the proposal, as amended. change that are filed with the This order approves the proposed rule Commission, and all written change, as amended. communications relating to the II. Description of the Proposal proposed rule change between the Commission and any person, other than ISE Rule 722(b)(1) currently allows those that may be withheld from the the options leg(s) of a stock-option order public in accordance with the to be executed in one-cent increments, provisions of 5 U.S.C. 552, will be regardless of the minimum increment available for inspection and copying in otherwise applicable to the individual the Commission’s Public Reference options leg(s) of the order.5 The ISE Room. Copies of such filing also will be 11 17 CFR 200.30–3(a)(12). available for inspection and copying at 1 15 U.S.C. 78s(b)(1). the principal office of the ISE. 2 17 CFR 240.19b–4. All comments received will be posted 3 Amendment No. 2 replaced the initial filing and without change; the Commission does Amendment No. 1 in their entirety. not edit personal identifying 4 See Securities Exchange Act Release No. 53909 information from submissions. You (May 31, 2006), 71 FR 32617. 5 Under ISE Rule 710, ‘‘Minimum Trading Increments,’’ the minimum trading increment is $.05 for an options contract trading at less than 9 15 U.S.C. 78s(b)(3)(A). 10 17 CFR 19b–4(f)(2). VerDate Aug<31>2005 17:41 Jul 14, 2006 Jkt 208001 PO 00000 Frm 00099 Fmt 4703 Sfmt 4703 40567 proposes to amend ISE Rule 722(b)(1) to allow options-only complex orders, as well as stock-option orders, to be executed in one-cent increments. The proposal retains the existing requirement under the ISE’s rules that allows a complex order to take priority over established Public Customer interest in the marketplace only if at least one leg of the complex order trades at a price that is better than the corresponding bid or offer in the marketplace by at least one minimum trading increment, as provided in ISE Rule 710.6 III. Discussion After careful review, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange and, in particular, with Section 6(b)(5) of the Act,7 which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to, and perfect the mechanism of, a free and open market and a national market system and, in general, to protect investors and the public interest.8 Specifically, the Commission believes that by allowing options-only complex orders to be executed in one-cent increments, the proposal may facilitate the execution of options-only complex orders by providing a greater number of price points at which such orders may be executed. As noted above, the ISE’s rules will continue to require that at least one leg of a complex order trade at a price that is better than the corresponding bid or offer in the marketplace by at least one minimum trading increment, as provided in ISE Rule 710, when any of the established bids or offers in the marketplace consists of a Public Customer limit order.9 IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,10 that the proposed rule change (SR–ISE–2005– 49), as amended, is approved. $3.00 per option and $.10 for an options contract trading at $3.00 per option or higher. 6 See ISE Rule 722(b)(2). 7 15 U.S.C. 78f(b)(5). 8 In approving this proposed rule change, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 9 See ISE Rule 722(b)(2). 10 15 U.S.C. 78s(b)(2). E:\FR\FM\17JYN1.SGM 17JYN1

Agencies

[Federal Register Volume 71, Number 136 (Monday, July 17, 2006)]
[Notices]
[Pages 40566-40567]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-11210]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54121; File No. SR-ISE-2006-31]


Self-Regulatory Organizations; International Securities Exchange, 
Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change Relating to PrecISE Fees

July 10, 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 June 30, 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 the ISE under Section 
19(b)(3)(A)(ii) 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)(ii).
    \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 is proposing to amend its Schedule of Fees to: (i) Adopt 
PrecISE through VPN fees; (ii) clarify the application of a fee waiver 
for PrecISE Trade[supreg] terminals; and (iii) exempt PrecISE through 
VPN from Session/API fees. The text of the proposed rule change is 
available on the ISE's Web site (http://www.iseoptions.com/legal/
proposed_rule_changes.asp), at the principal office of the ISE, and 
at the Commission's Public Reference Room.

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

    In its filing with the Commission, the ISE included statements 
concerning the purpose of, and basis for, the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The ISE has prepared summaries, set forth in Sections A, 
B, and C below, of the most significant aspects of such statements.

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

1. Purpose
    The purpose of this proposed rule change is to amend the Exchange's 
Schedule of Fees to: (i) Adopt PrecISE through VPN fees; (ii) clarify 
the application of a fee waiver for PrecISE Trade terminals; and (iii) 
exempt PrecISE through VPN from Session/API fees.
    PrecISE through VPN is a new method for connecting a PrecISE Trade 
terminal to the Exchange.\5\ A PrecISE through VPN connection is 
available to Electronic Access Members (``EAMs'') of the Exchange. 
PrecISE through VPN consists of PrecISE, a front-end, order entry 
application that was recently rolled out by the Exchange that will 
eventually replace the current CLICK trade terminals.\6\ PrecISE, in 
addition to a dedicated network connection, also runs over a secure 
``virtual private network'' (i.e., ``VPN'') over the Internet. PrecISE 
through VPN was designed for EAMs that want a lower cost, lower 
bandwidth connection to the Exchange than the traditional, dedicated 
network PrecISE connection. The Exchange also envisions that EAMs will 
use PrecISE through VPN as a back-up or disaster recovery connection to 
the Exchange. As a result, the Exchange is proposing to establish a 
monthly fee of $250 per terminal for PrecISE through VPN to offset the 
Exchange's costs for maintaining these connections.
---------------------------------------------------------------------------

    \5\ PrecISE through VPN is similar to CLICK through VPN, for 
which the Exchange has previously adopted fees. See Securities 
Exchange Act Release No. 48157 (July 10, 2003), 68 FR 42443 (July 
17, 2003) (notice and immediate effectiveness of SR-ISE-2003-14).
    \6\ The Exchange represents that PrecISE through VPN is merely a 
different means of connecting to the trading system operated by the 
Exchange known as PrecISE (i.e., it is a new means of connecting to 
the Exchange's trading system), and does not require any changes to 
the Exchange's surveillance or communications rules.
---------------------------------------------------------------------------

    Secondly, the Exchange recently adopted a waiver of fees related to 
the new PrecISE Trade terminals, such that fees for the first two 
months of a member's use of PrecISE Trade terminals are waived.\7\ The 
Exchange proposes to clarify that the waiver shall only apply to those 
members that are concurrently using both the old CLICK Trade terminals 
and the new PrecISE Trade terminals. The purpose of the waiver is to 
allow an existing member to transition from a CLICK Trade terminal to a 
PrecISE Trade terminal, without being charged both fees. For example, 
new members who only have PrecISE Trade terminals would not be eligible 
for this fee waiver.
---------------------------------------------------------------------------

    \7\ See Securities Exchange Act Release No. 53788 (May 11, 
2006), 71 FR 28728 (May 17, 2006) (notice and immediate 
effectiveness of SR-ISE-2006-19).
---------------------------------------------------------------------------

    Finally, the Exchange is proposing that PrecISE through VPN 
connections be exempt from Session/API fees. As with CLICK through VPN, 
Session/API fees will not apply for connecting to the Exchange's 
trading system through a VPN connection.
2. Statutory Basis
    The Exchanges believes that the basis under the Act for this 
proposed rule change is the requirement under Section 6(b)(4) of the 
Act \8\ that an exchange have an equitable allocation of reasonable 
dues, fees and other charges among its members and other persons using 
its facilities.
---------------------------------------------------------------------------

    \8\ 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 does not impose 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    The Exchange has not solicited, and does not intend to solicit, 
comments on this proposed rule change. The Exchange has not received 
any unsolicited written comments from members or other interested 
parties.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing rule change establishes or changes a due, 
fee, or other charge imposed by the Exchange, it has become effective 
pursuant to

[[Page 40567]]

Section 19(b)(3)(A) of the Act \9\ and Rule 19b-4(f)(2) \10\ 
thereunder. At any time within 60 days of the filing of such proposed 
rule change, the 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.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 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 No. SR-ISE-2006-31 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-ISE-2006-31. 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 
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-2006-31 
and should be submitted on or before August 7, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Jill M. Peterson,
Assistant Secretary.
 [FR Doc. E6-11210 Filed 7-14-06; 8:45 am]
BILLING CODE 8010-01-P