Self-Regulatory Organizations; International Securities Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto Relating to Fee Changes, 48567-48569 [E6-13725]
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Federal Register / Vol. 71, No. 161 / Monday, August 21, 2006 / Notices
longer period to be appropriate and
publishes its reasons for so finding or
(ii) as to which the Exchange 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.
be submitted on or before September 11,
2006.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.7
Nancy M. Morris,
Secretary.
[FR Doc. E6–13728 Filed 8–18–06; 8:45 am]
BILLING CODE 8010–01–P
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change, as amended, is consistent with
the Act. Comments may be submitted by
any of the following methods:
Electronic Comments
hsrobinson on PROD1PC72 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
Number SR–Amex–2006–70 on the
subject line.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–54315; File No. SR–ISE–
2006–43]
Self-Regulatory Organizations;
International Securities Exchange, Inc.;
Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change and Amendment No. 1 Thereto
Relating to Fee Changes
August 14, 2006.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
Paper Comments
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on July 25,
• Send paper comments in triplicate
2006, the International Securities
to Nancy M. Morris, Secretary,
Exchange, Inc. (‘‘ISE’’ or ‘‘Exchange’’)
Securities and Exchange Commission,
filed with the Securities and Exchange
100 F Street, NE., Washington, DC
Commission (‘‘Commission’’) the
20549–1090.
proposed rule change as described in
All submissions should refer to File
Items I, II, and III below, which Items
Number SR–Amex–2006–70. This file
have been prepared by the ISE. On
number should be included on the
subject line if e-mail is used. To help the August 10, 2006, ISE filed Amendment
No. 1 to the proposed rule change.3 The
Commission process and review your
ISE has designated this proposal as one
comments more efficiently, please use
only one method. The Commission will establishing or changing a due, fee, or
post all comments on the Commission’s other charge imposed by the ISE under
Section 19(b)(3)(A)(ii) of the Act,4 and
Internet Web site (https://www.sec.gov/
Rule 19b–4(f)(2) thereunder,5 which
rules/sro.shtml). Copies of the
renders the proposal effective upon
submission, all subsequent
filing with the Commission. The
amendments, all written statements
Commission is publishing this notice to
with respect to the proposed rule
solicit comments on the proposed rule
change that are filed with the
change, as amended, from interested
Commission, and all written
persons.
communications relating to the
proposed rule change between the
I. Self-Regulatory Organization’s
Commission and any person, other than Statement of the Terms of Substance of
those that may be withheld from the
the Proposed Rule Change
public in accordance with the
The ISE is proposing to amend its
provisions of 5 U.S.C. 552, will be
Schedule of Fees to establish fees for
available for inspection and copying in
transactions in options on nine
the Commission’s Public Reference
Room. Copies of such filing also will be
7 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 Amex. All
2 17 CFR 240.19b–4.
comments received will be posted
3 Amendment No. 1 revised the rule text
without change; the Commission does
contained in Exhibit 5 to conform it to the
not edit personal identifying
discussion contained in the Purpose section, which
explains that a ten (10) cent per contract surcharge
information from submissions. You
applies only to IWB, IWD, XLV, XLU, and XLK and
should submit only information that
you wish to make available publicly. All not to all of the Premium Products that are the
subject of this filing.
submissions should refer to File
4 15 U.S.C. 78s(b)(3)(A)(ii).
Number SR–Amex–2006–70 and should
5 17 CFR 240.19b–4(f)(2).
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17:53 Aug 18, 2006
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Frm 00039
Fmt 4703
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48567
Premium Products.6 The text of the
proposed rule change, as amended, is
available on the ISE’s Web site (https://
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 Exchange is proposing to amend
its Schedule of Fees to establish fees for
transactions in options on the following
nine Premium Products: PowerShares
Water Resources Portfolio (‘‘PHO’’),7
SPDR Homebuilders ETF (‘‘XHB’’),8
iShares FTSE/Xinhua China 25 Index
Fund (‘‘FXI’’), iShares Dow Jones Select
6 ‘‘Premium Products’’ is defined in the ISE’s
Schedule of Fees as the products enumerated
therein.
7 PowerSharesTM and PHOTM are trademarks of
PowerShares Capital Management LLC
(‘‘PowerShares’’). The Palisades Water Index is a
trademark of Hydrogen Ventures and has been
licensed for use for certain purposes by
PowerShares. All other trademarks and service
marks are the property of their respective owners.
The PHO is not sponsored, endorsed, sold or
promoted by Hydrogen Ventures, and Hydrogen
Ventures makes no representation regarding the
advisability of investing in PHO. Hydrogen
Ventures and PowerShares have not licensed or
authorized ISE to: (i) Engage in the creation, listing,
provision of a market for trading, marketing, and
promotion of options on PHO; or (ii) use and refer
to any of their trademarks or service marks in
connection with the listing, provision of a market
for trading, marketing, and promotion of options on
PHO or with making disclosures concerning options
on PHO under any applicable Federal or state laws,
rules or regulations. Hydrogen Ventures and
PowerShares do not sponsor, endorse, or promote
such activity by ISE and are not affiliated in any
manner with ISE.
8 ‘‘Standard & Poor’s,’’ ‘‘S&P,’’ ‘‘S&P 500,’’
‘‘Standard & Poor’s 500’’ ‘‘Standard & Poor’s
Depositary Receipts,’’ ‘‘SPDR,’’ are trademarks of
The McGraw-Hill Companies, Inc. (‘‘McGrawHill’’), and have been licensed for use by State
Street Bank and Trust in connection with the listing
and trading of XHB on the American Stock
Exchange. XHB is not sponsored, sold or endorsed
by Standard & Poor’s, (‘‘S&P’’), a division of
E:\FR\FM\21AUN1.SGM
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21AUN1
48568
Federal Register / Vol. 71, No. 161 / Monday, August 21, 2006 / Notices
hsrobinson on PROD1PC72 with NOTICES
Dividend Index Fund (‘‘DVY’’),9 iShares
Russell 1000 Index Fund (‘‘IWB’’),
iShares Russell 1000 Value Index Fund
(‘‘IWD’’), Health Care Select Sector
SPDR Fund (‘‘XLV’’), Utilities Select
Sector SPDR Fund (‘‘XLU’’), and
Technology Select Sector SPDR Fund
(‘‘XLK’’).10 Specifically, the Exchange is
proposing to adopt an execution fee and
a comparison fee for all transactions in
options on PHO, XHB, FXI, DVY, IWB,
IWD, XLV, XLU, and XLK.11 The
amount of the execution fee and
comparison fee for products covered by
this filing shall be $0.15 and $0.03 per
contract, respectively, for all Public
Customer Orders 12 and Firm
Proprietary orders. The amount of the
execution fee and comparison fee for all
ISE Market Maker transactions shall be
equal to the execution fee and
McGraw-Hill, and S&P makes no representation
regarding the advisability of investing in XHB.
McGraw-Hill and S&P have not licensed or
authorized ISE to: (i) Engage in the creation, listing,
provision of a market for trading, marketing, and
promotion of options on XHB; or (ii) use and refer
to any of their trademarks or service marks in
connection with the listing, provision of a market
for trading, marketing, and promotion of options on
XHB or with making disclosures concerning options
on XHB under any applicable Federal or state laws,
rules or regulations. McGraw-Hill and S&P do not
sponsor, endorse, or promote such activity by ISE
and are not affiliated in any manner with ISE.
9 iShares is a registered trademark of Barclays
Global Investors, N.A. (‘‘BGI’’), a wholly owned
subsidiary of Barclays Bank PLC. ‘‘Dow Jones’’ and
‘‘Dow Jones U.S. Select Dividend Index Fund’’ are
trademarks and service marks of Dow Jones &
Company, Inc. (‘‘Dow Jones’’) and have been
licensed for use for certain purposes by BGI.
‘‘FTSE’’ is a trademark jointly owned by the London
Stock Exchange PLC and The Financial Times
Limited. ‘‘Xinhua’’ is a service mark and trademark
of Xinhua Financial News Network Limited. All
marks are licensed for use by FTSE/Xinhua Index
Limited. All other trademarks and service marks are
the property of their respective owners. Neither
DVY nor FXI are sponsored, endorsed, issued, sold
or promoted by Dow Jones or FTSE/Xinhua Index
Limited. BGI, Dow Jones, and FTSE/Xinhua Index
Limited have not licensed or authorized ISE to: (i)
Engage in the creation, listing, provision of a market
for trading, marketing, and promotion of options on
DVY and FXI; or (ii) use and refer to any of their
trademarks or service marks in connection with the
listing, provision of a market for trading, marketing,
and promotion of options on DVY and FXI or with
making disclosures concerning options on DVY and
FXI under any applicable Federal or state laws,
rules or regulations. BGI, Dow Jones, and FTSE/
Xinhua Index Limited do not sponsor, endorse, or
promote such activity by ISE and are not affiliated
in any manner with ISE.
10 PHO, XHB, FXI, DVY, IWB, IWD, XLV, XLU,
and XLK constitute ‘‘Fund Shares,’’ as defined by
ISE Rule 502(h).
11 These fees will be charged only to Exchange
members. Under a pilot program that is set to expire
on July 31, 2006, these fees will also be charged to
Linkage Orders (as defined in ISE Rule 1900). See
infra footnote 15 (regarding ISE’s proposed rule
change to extend its Linkage fees pilot program).
12 Public Customer Order is defined in Exchange
Rule 100(a)(33) as an order for the account of a
Public Customer. Public Customer is defined in
Exchange Rule 100(a)(32) as a person that is not a
broker or dealer in securities.
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17:53 Aug 18, 2006
Jkt 208001
comparison fee currently charged by the
Exchange for ISE Market Maker
transactions in equity options.13 Finally,
the amount of the execution fee and
comparison fee for all non-ISE Market
Maker transactions shall be $0.16 and
$0.03 per contract, respectively. All of
the applicable fees covered by this filing
are identical to fees charged by the
Exchange for all other Premium
Products. The Exchange believes the
proposed rule change will further the
Exchange’s goal of introducing new
products to the marketplace that are
competitively priced.
Additionally, the Exchange has
entered into a license agreement with
the Frank Russell Company and
Standard & Poor’s in connection with
the listing and trading of options on
IWB, IWD and XLV, XLU, and XLK, as
applicable. As with certain other
licensed options, the Exchange proposes
to adopt a fee of ten (10) cents per
contract for trading in these options to
defray the licensing costs. The Exchange
believes charging the participants that
trade these products is the most
equitable means of recovering the costs
of the licenses. However, because of
competitive pressures in the industry,
the Exchange proposes to exclude
Public Customer Orders from this
surcharge fee. Accordingly, this
surcharge fee will only be charged to
Exchange members with respect to nonPublic Customer Orders (e.g., ISE
Market Maker, non-ISE Market Maker,
and Firm Proprietary orders) and shall
apply to Linkage Orders 14 under a pilot
program that is set to expire on July 31,
2006.15 Finally, since options on PHO,
XHB, FXI, DVY, IWB, IWD, XLV, XLU,
and XLK are multiply-listed, the
Payment for Order Flow fee shall also
apply.
2. Statutory Basis
13 The execution fee is currently between $.21
and $.12 per contract side, depending on the
Exchange Average Daily Volume, and the
comparison fee is currently $.03 per contract side.
14 See ISE Rule 1900.
15 In File No. SR–ISE–2006–38, the Exchange
proposed, and the Commission subsequently
approved, a rule change to extend the Linkage fees
pilot program until July 31, 2007. See Securities
Exchange Act Release No. 54204 (July 25, 2006), 71
FR 43548 (August 1, 2006).
16 15 U.S.C. 78f(b)(4).
Frm 00040
Fmt 4703
The Exchange believes that the
proposed rule change, as amended, 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, as
amended, establishes or changes a due,
fee, or other charge imposed by the
Exchange, it has become effective
pursuant to Section 19(b)(3)(A) of the
Act 17 and Rule 19b–4(f)(2) 18
thereunder. At any time within 60 days
of the filing of such amended 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.19
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change, as amended, is consistent with
the Act. Comments may be submitted by
any of the following methods:
Electronic Comments
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 16 that an exchange
have an equitable allocation of
reasonable dues, fees and other charges
among its members and other persons
using its facilities.
PO 00000
B. Self-Regulatory Organization’s
Statement on Burden on Competition
Sfmt 4703
• 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–2006–43 on the subject
line.
17 15
U.S.C. 78s(b)(3)(A).
CFR 19b–4(f)(2).
19 The effective date of the original proposed rule
is July 25, 2006. The effective date of Amendment
No. 1 is August 10, 2006. For purposes of
calculating the 60-day period within which the
Commission may summarily abrogate the proposed
rule change under Section 19(b)(3)(C) of the Act, the
Commission considers the period to commence on
August 10, 2006, the date on which the ISE
submitted Amendment No. 1. See 15 U.S.C.
78s(b)(3)(C).
18 17
E:\FR\FM\21AUN1.SGM
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Federal Register / Vol. 71, No. 161 / Monday, August 21, 2006 / Notices
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–2006–43. This file
number should be included on the
subject line if e-mail is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
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–2006–43 and should be
submitted on or before September 11,
2006.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.20
Nancy M. Morris,
Secretary.
[FR Doc. E6–13725 Filed 8–18–06; 8:45 am]
hsrobinson on PROD1PC72 with NOTICES
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–54316; File No. SR–NYSE–
2006–59]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to
Specialists Hitting Bids and/or Taking
Offers Algorithmically on a Temporary
Basis Until Phase II of the Hybrid
Market Is Fully Implemented
August 15, 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 August 8,
2006, the New York Stock Exchange
LLC (‘‘NYSE’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the Exchange. NYSE
filed the proposed rule change pursuant
to Section 19(b)(3)(A) of the Act 3 and
Rule 19b–4(f)(6) thereunder,4 which
renders the proposed rule change
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
NYSE proposes to amend Exchange
Rule 104 (Dealings by Specialists) with
respect to the specialists’ ability to
establish systems employing algorithms
to send messages via a connection to the
Display Book for the purpose of
quoting or executing trades
systemically. The text of the proposed
rule change is available on the
Exchange’s Web site (https://
www.nyse.com), at the Exchange’s
Office of the Secretary, and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange 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
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
2 17
20 17
CFR 200.30–3(a)(12).
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48569
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in Sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Through the NYSE Hybrid Market SM
initiative,5 the Exchange is permitting
specialists to establish electronic
connections to the Display Book
system 6 (‘‘Display Book’’). Specialists
will have electronic access to certain
information which will permit them to
make a range of specified quoting and
trading decisions based on that
information via the Display Book
connection. Specifically, the
amendments to Rule 104 (Dealings by
Specialists) pursuant to the NYSE
Hybrid Market SM provide specialists
with the ability to implement systems
that use proprietary algorithms based on
predetermined parameters to
electronically participate in the Hybrid
Market SM (‘‘Specialist Algorithm’’). The
Specialist Algorithm is designed to
communicate with the Display Book via
an Exchange-owned external
application program interface (‘‘API’’).
As approved in the Hybrid Market
initiative, the Specialist Algorithm is
permitted to send messages to the
Display Book via the API to quote or
trade on behalf of the specialist’s
proprietary interest. The Specialist
Algorithm will generate these quoting or
trading messages in reaction to specific
types of information it will have access
to. This information includes specialist
dealer position, existing quotes,
publicly available information the
specialist chooses to supply to the
algorithm, incoming orders as they are
entering Exchange systems, and
information about orders on the Display
Book such as limit orders, percentage
orders, stop orders, and auction limit
and auction market orders. This latter
information stream is known as ‘‘state of
the book’’ information.
The Exchange has continued to
discuss Hybrid Market features with its
members and advisory committees.
Based on these discussions, the
Exchange has effected selective changes
to certain aspects of the Hybrid Market,
5 See Securities Exchange Act Release No. 53539
(March 22, 2006), 71 FR 16353 (March 31, 2006).
6 The Display Book system is an order
management and execution facility. It receives and
displays orders to the specialist, contains the orders
received by the specialist (the ‘‘Book’’), and
provides a mechanism to execute and report
transactions to the Consolidated Tape.
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]]>Agencies
[Federal Register Volume 71, Number 161 (Monday, August 21, 2006)]
[Notices]
[Pages 48567-48569]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-13725]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-54315; File No. SR-ISE-2006-43]
Self-Regulatory Organizations; International Securities Exchange,
Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change and Amendment No. 1 Thereto Relating to Fee Changes
August 14, 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 July 25, 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.
On August 10, 2006, ISE filed Amendment No. 1 to the proposed rule
change.\3\ 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,\4\ and Rule 19b-4(f)(2) thereunder,\5\
which renders the proposal effective upon filing with the Commission.
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\ Amendment No. 1 revised the rule text contained in Exhibit 5
to conform it to the discussion contained in the Purpose section,
which explains that a ten (10) cent per contract surcharge applies
only to IWB, IWD, XLV, XLU, and XLK and not to all of the Premium
Products that are the subject of this filing.
\4\ 15 U.S.C. 78s(b)(3)(A)(ii).
\5\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
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 establish
fees for transactions in options on nine Premium Products.\6\ The text
of the proposed rule change, as amended, is available on the ISE's Web
site (https://www.iseoptions.com/legal/proposed_rule_changes.asp), at
the principal office of the ISE, and at the Commission's Public
Reference Room.
---------------------------------------------------------------------------
\6\ ``Premium Products'' is defined in the ISE's Schedule of
Fees as the products enumerated therein.
---------------------------------------------------------------------------
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 Exchange is proposing to amend its Schedule of Fees to
establish fees for transactions in options on the following nine
Premium Products: PowerShares Water Resources Portfolio (``PHO''),\7\
SPDR Homebuilders ETF (``XHB''),\8\ iShares FTSE/Xinhua China 25 Index
Fund (``FXI''), iShares Dow Jones Select
[[Page 48568]]
Dividend Index Fund (``DVY''),\9\ iShares Russell 1000 Index Fund
(``IWB''), iShares Russell 1000 Value Index Fund (``IWD''), Health Care
Select Sector SPDR Fund (``XLV''), Utilities Select Sector SPDR Fund
(``XLU''), and Technology Select Sector SPDR Fund (``XLK'').\10\
Specifically, the Exchange is proposing to adopt an execution fee and a
comparison fee for all transactions in options on PHO, XHB, FXI, DVY,
IWB, IWD, XLV, XLU, and XLK.\11\ The amount of the execution fee and
comparison fee for products covered by this filing shall be $0.15 and
$0.03 per contract, respectively, for all Public Customer Orders \12\
and Firm Proprietary orders. The amount of the execution fee and
comparison fee for all ISE Market Maker transactions shall be equal to
the execution fee and comparison fee currently charged by the Exchange
for ISE Market Maker transactions in equity options.\13\ Finally, the
amount of the execution fee and comparison fee for all non-ISE Market
Maker transactions shall be $0.16 and $0.03 per contract, respectively.
All of the applicable fees covered by this filing are identical to fees
charged by the Exchange for all other Premium Products. The Exchange
believes the proposed rule change will further the Exchange's goal of
introducing new products to the marketplace that are competitively
priced.
---------------------------------------------------------------------------
\7\ PowerSharesTM and PHOTM are trademarks
of PowerShares Capital Management LLC (``PowerShares''). The
Palisades Water Index is a trademark of Hydrogen Ventures and has
been licensed for use for certain purposes by PowerShares. All other
trademarks and service marks are the property of their respective
owners. The PHO is not sponsored, endorsed, sold or promoted by
Hydrogen Ventures, and Hydrogen Ventures makes no representation
regarding the advisability of investing in PHO. Hydrogen Ventures
and PowerShares have not licensed or authorized ISE to: (i) Engage
in the creation, listing, provision of a market for trading,
marketing, and promotion of options on PHO; or (ii) use and refer to
any of their trademarks or service marks in connection with the
listing, provision of a market for trading, marketing, and promotion
of options on PHO or with making disclosures concerning options on
PHO under any applicable Federal or state laws, rules or
regulations. Hydrogen Ventures and PowerShares do not sponsor,
endorse, or promote such activity by ISE and are not affiliated in
any manner with ISE.
\8\ ``Standard & Poor's[reg],'' ``S&P[reg],'' ``S&P 500[reg],''
``Standard & Poor's 500[reg]'' ``Standard & Poor's Depositary
Receipts[reg],'' ``SPDR[reg],'' are trademarks of The McGraw-Hill
Companies, Inc. (``McGraw-Hill''), and have been licensed for use by
State Street Bank and Trust in connection with the listing and
trading of XHB on the American Stock Exchange. XHB is not sponsored,
sold or endorsed by Standard & Poor's, (``S&P''), a division of
McGraw-Hill, and S&P makes no representation regarding the
advisability of investing in XHB. McGraw-Hill and S&P have not
licensed or authorized ISE to: (i) Engage in the creation, listing,
provision of a market for trading, marketing, and promotion of
options on XHB; or (ii) use and refer to any of their trademarks or
service marks in connection with the listing, provision of a market
for trading, marketing, and promotion of options on XHB or with
making disclosures concerning options on XHB under any applicable
Federal or state laws, rules or regulations. McGraw-Hill and S&P do
not sponsor, endorse, or promote such activity by ISE and are not
affiliated in any manner with ISE.
\9\ iShares[reg] is a registered trademark of Barclays Global
Investors, N.A. (``BGI''), a wholly owned subsidiary of Barclays
Bank PLC. ``Dow Jones'' and ``Dow Jones U.S. Select Dividend Index
Fund'' are trademarks and service marks of Dow Jones & Company, Inc.
(``Dow Jones'') and have been licensed for use for certain purposes
by BGI. ``FTSE'' is a trademark jointly owned by the London Stock
Exchange PLC and The Financial Times Limited. ``Xinhua'' is a
service mark and trademark of Xinhua Financial News Network Limited.
All marks are licensed for use by FTSE/Xinhua Index Limited. All
other trademarks and service marks are the property of their
respective owners. Neither DVY nor FXI are sponsored, endorsed,
issued, sold or promoted by Dow Jones or FTSE/Xinhua Index Limited.
BGI, Dow Jones, and FTSE/Xinhua Index Limited have not licensed or
authorized ISE to: (i) Engage in the creation, listing, provision of
a market for trading, marketing, and promotion of options on DVY and
FXI; or (ii) use and refer to any of their trademarks or service
marks in connection with the listing, provision of a market for
trading, marketing, and promotion of options on DVY and FXI or with
making disclosures concerning options on DVY and FXI under any
applicable Federal or state laws, rules or regulations. BGI, Dow
Jones, and FTSE/Xinhua Index Limited do not sponsor, endorse, or
promote such activity by ISE and are not affiliated in any manner
with ISE.
\10\ PHO, XHB, FXI, DVY, IWB, IWD, XLV, XLU, and XLK constitute
``Fund Shares,'' as defined by ISE Rule 502(h).
\11\ These fees will be charged only to Exchange members. Under
a pilot program that is set to expire on July 31, 2006, these fees
will also be charged to Linkage Orders (as defined in ISE Rule
1900). See infra footnote 15 (regarding ISE's proposed rule change
to extend its Linkage fees pilot program).
\12\ Public Customer Order is defined in Exchange Rule
100(a)(33) as an order for the account of a Public Customer. Public
Customer is defined in Exchange Rule 100(a)(32) as a person that is
not a broker or dealer in securities.
\13\ The execution fee is currently between $.21 and $.12 per
contract side, depending on the Exchange Average Daily Volume, and
the comparison fee is currently $.03 per contract side.
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Additionally, the Exchange has entered into a license agreement
with the Frank Russell Company and Standard & Poor's in connection with
the listing and trading of options on IWB, IWD and XLV, XLU, and XLK,
as applicable. As with certain other licensed options, the Exchange
proposes to adopt a fee of ten (10) cents per contract for trading in
these options to defray the licensing costs. The Exchange believes
charging the participants that trade these products is the most
equitable means of recovering the costs of the licenses. However,
because of competitive pressures in the industry, the Exchange proposes
to exclude Public Customer Orders from this surcharge fee. Accordingly,
this surcharge fee will only be charged to Exchange members with
respect to non-Public Customer Orders (e.g., ISE Market Maker, non-ISE
Market Maker, and Firm Proprietary orders) and shall apply to Linkage
Orders \14\ under a pilot program that is set to expire on July 31,
2006.\15\ Finally, since options on PHO, XHB, FXI, DVY, IWB, IWD, XLV,
XLU, and XLK are multiply-listed, the Payment for Order Flow fee shall
also apply.
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\14\ See ISE Rule 1900.
\15\ In File No. SR-ISE-2006-38, the Exchange proposed, and the
Commission subsequently approved, a rule change to extend the
Linkage fees pilot program until July 31, 2007. See Securities
Exchange Act Release No. 54204 (July 25, 2006), 71 FR 43548 (August
1, 2006).
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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 \16\ that an exchange have an equitable allocation of reasonable
dues, fees and other charges among its members and other persons using
its facilities.
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\16\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes that the proposed rule change, as amended,
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, as amended, establishes or
changes a due, fee, or other charge imposed by the Exchange, it has
become effective pursuant to Section 19(b)(3)(A) of the Act \17\ and
Rule 19b-4(f)(2) \18\ thereunder. At any time within 60 days of the
filing of such amended 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.\19\
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\17\ 15 U.S.C. 78s(b)(3)(A).
\18\ 17 CFR 19b-4(f)(2).
\19\ The effective date of the original proposed rule is July
25, 2006. The effective date of Amendment No. 1 is August 10, 2006.
For purposes of calculating the 60-day period within which the
Commission may summarily abrogate the proposed rule change under
Section 19(b)(3)(C) of the Act, the Commission considers the period
to commence on August 10, 2006, the date on which the ISE submitted
Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change, as amended, is consistent with the Act. Comments may be
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-2006-43 on the subject line.
[[Page 48569]]
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-2006-43. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for inspection
and copying in the Commission's Public Reference 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-2006-43 and should be submitted on or before
September 11, 2006.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\20\
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\20\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E6-13725 Filed 8-18-06; 8:45 am]
BILLING CODE 8010-01-P
