Self-Regulatory Organizations; International Securities Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Fee Changes, 54546-54547 [E6-15322]
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Federal Register / Vol. 71, No. 179 / Friday, September 15, 2006 / Notices
SECURITIES AND EXCHANGE
COMMISSION
and C below, of the most significant
aspects of such statements.
[Release No. 34–54414; File No. SR–ISE–
2006–49]
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
Self-Regulatory Organizations;
International Securities Exchange, Inc.;
Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change Relating to Fee Changes
September 7, 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 29, 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 filed
the proposed rule change 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 establish fees for
transactions in options on 5 Premium
Products.5 The text of the proposed rule
change is available on the Exchange’s
Internet Web site (https://
www.iseoptions.com), 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
jlentini on PROD1PC65 with NOTICES
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,
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(ii).
4 17 CFR 240.19b–4(f)(2).
5 The term ‘‘Premium Products’’ is defined in the
Schedule of Fees as the products enumerated
therein.
2 17
VerDate Aug<31>2005
14:51 Sep 14, 2006
Jkt 208001
1. Purpose
The Exchange is proposing to amend
its Schedule of Fees to establish fees for
transactions in options on the following
5 Premium Products: iShares S&P
SmallCap 600 Value Index Fund (‘‘IJS’’),
iShares Russell 1000 Growth Index
Fund (‘‘IWF’’), iShares Russell MidCap
Growth Index Fund (‘‘IWP’’), iShares
Russell MidCap Value Index Fund
(‘‘IWS’’), and iShares Russell 3000 Index
Fund (‘‘IWV’’).6 Specifically, the
Exchange is proposing to adopt an
execution fee and a comparison fee for
all transactions in options on IJS, IWF,
IWP, IWS and IWV.7 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 8 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.9 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.
The Exchange has entered into a
license agreement with Standard &
Poor’s and the Frank Russell Company
in connection with the listing and
trading of options on IJS and IWF, IWP,
IWS and IWV, respectively. As with
6 IJS, IWF, IWP, IWS and IWV constitute ‘‘Fund
Shares,’’ as defined by ISE Rule 502(h).
7 These fees will be charged only to Exchange
members. Under a pilot program that is set to expire
on July 31, 2007, these fees will also be charged to
Linkage Orders (as defined in ISE Rule 1900). See
Securities Exchange Release No. 54204 (July 25,
2006), 71 FR 43548 (August 1, 2006).
8 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.
9 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.
PO 00000
Frm 00094
Fmt 4703
Sfmt 4703
certain other licensed options, the
Exchange is adopting a fee of $0.10 per
contract for trading in these options to
defray the licensing costs. The Exchange
believes charging the participants that
trade this instrument is the most
equitable means of recovering the costs
of the license. However, because of
competitive pressures in the industry,
the Exchange proposes to exclude
Public Customer Orders from this
surcharge fee. Accordingly, this
surcharge fee would be charged only to
Exchange members with respect to NonPublic Customer Orders (e.g., ISE
Market Maker, Non-ISE Market Maker &
Firm Proprietary orders) and would
apply to Linkage Orders 10 under a pilot
program that is set to expire on July 31,
2007. Further, since options on IJS, IWF,
IWP, IWS and IWV are multiply-listed,
the Payment for Order Flow fee would
also apply.
2. Statutory Basis
The basis for the proposed rule
change is the requirement under Section
6(b)(4) of the Act 11 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 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 proposed rule
change 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 12 and Rule 19b–4(f)(2) 13
thereunder. At any time within 60 days
of the filing of the proposed rule change
the Commission may summarily
abrogate such proposed rule change if it
10 See
supra note 7.
U.S.C. 78f(b)(4).
12 15 U.S.C. 78s(b)(3)(A).
13 17 CFR 19b–4(f)(2).
11 15
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Federal Register / Vol. 71, No. 179 / Friday, September 15, 2006 / Notices
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.
IV. Solicitation of Comments
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.14
Nancy M. Morris,
Secretary.
[FR Doc. E6–15322 Filed 9–14–06; 8:45 am]
BILLING CODE 8010–01–P
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 rulecomments@sec.gov. Please include File
No. SR–ISE–2006–49 on the subject
line.
Paper Comments
jlentini on PROD1PC65 with NOTICES
• 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 No.
SR–ISE–2006–49. 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 the filing also will be
available for inspection and copying at
the principal office of the Exchange. 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 No.
SR–ISE–2006–49 and should be
submitted on or before October 6, 2006.
VerDate Aug<31>2005
14:51 Sep 14, 2006
Jkt 208001
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–54417; File No. SR–
NYSEArca–2006–52]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Relating to Exchange
Fees and Charges
September 8, 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
31, 2006, the NYSE Arca, Inc. (‘‘NYSE
Arca’’ 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 Exchange. The
Exchange has designated the proposed
rule change as one establishing or
changing a due, fee, or other charge,
pursuant to 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 Exchange proposes to amend its
Schedule of Fees and Charges in order
to extend the pilot program (‘‘Pilot
Program’’) that applies to Option
Strategy Executions until March 1, 2007.
The Exchange also proposes at this time
to correct a minor typographical error
on the schedule. The text of the
proposed rule change is available on
NYSE Arca’s Web site at (https://
www.nysearca.com), at the Office of the
Secretary at NYSE Arca, and at the
Commission’s Public Reference Room.
14 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
PO 00000
Frm 00095
Fmt 4703
Sfmt 4703
54547
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
proposal. The text of these statements
may be examined at the places specified
in Item IV below. The Exchange has
prepared summaries, set forth in
Sections A, B, and C below, of the most
significant aspects of such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange represents that the
purpose of this proposed rule change is
to extend the Pilot Program that applies
to Option Strategy Executions until
March 1, 2007. The transactions
included as part of the Pilot Program
include reversals and conversions,5
dividend spreads,6 box spreads,7 short
stock interest spreads,8 and merger
spreads.9 Because the referenced
Options Strategy Transactions are
generally executed by professionals
whose profit margins are generally
narrow, the Pilot Program caps the
transaction fees associated with such
executions at $1,000 per strategy
execution that are executed on the same
trading day in the same option class. In
addition, there is also a monthly cap of
$50,000 per initiating firm for all
strategy executions. The Exchange
believes that by keeping fees low, the
5 Reversals and conversions are transactions that
employ calls, puts and the underlying stock to lock
in a nearly risk free profit. Reversals are established
by combining a short stock position with a short put
and a long call position that shares the same strike
and expiration. Conversions employ long positions
in the underlying stock that accompany long puts
and short calls sharing the same strike and
expiration.
6 Dividend spreads are trades involving deep in
the money options that exploit pricing differences
arising around the time a stock goes ex-dividend.
7 Box spreads is a strategy that synthesizes long
and short stock positions to create a profit.
Specifically, a long call and short put at one strike
is combined with a short call and long put at a
different strike to create synthetic long and
synthetic short stock positions, respectively.
8 A short stock interest spread is a spread that
uses two deep in the money put options of the same
class followed by the exercise of the resulting long
position in order to establish a short stock interest
arbitrage position.
9 A merger spread is a transaction executed
pursuant to a strategy involving the simultaneous
purchase and sale of options of the same class and
expiration date, but with different strike prices
followed by the exercise of the resulting long option
position.
E:\FR\FM\15SEN1.SGM
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]]>Agencies
[Federal Register Volume 71, Number 179 (Friday, September 15, 2006)]
[Notices]
[Pages 54546-54547]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-15322]
[[Page 54546]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-54414; File No. SR-ISE-2006-49]
Self-Regulatory Organizations; International Securities
Exchange, Inc.; Notice of Filing and Immediate Effectiveness of
Proposed Rule Change Relating to Fee Changes
September 7, 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 29, 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 filed the proposed rule change 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).
---------------------------------------------------------------------------
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 5 Premium Products.\5\ The text of
the proposed rule change is available on the Exchange's Internet Web
site (https://www.iseoptions.com), at the principal office of the ISE,
and at the Commission's Public Reference Room.
---------------------------------------------------------------------------
\5\ The term ``Premium Products'' is defined in the 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 5 Premium
Products: iShares S&P SmallCap 600 Value Index Fund (``IJS''), iShares
Russell 1000 Growth Index Fund (``IWF''), iShares Russell MidCap Growth
Index Fund (``IWP''), iShares Russell MidCap Value Index Fund
(``IWS''), and iShares Russell 3000 Index Fund (``IWV'').\6\
Specifically, the Exchange is proposing to adopt an execution fee and a
comparison fee for all transactions in options on IJS, IWF, IWP, IWS
and IWV.\7\ 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 \8\ 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.\9\ 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.
---------------------------------------------------------------------------
\6\ IJS, IWF, IWP, IWS and IWV constitute ``Fund Shares,'' as
defined by ISE Rule 502(h).
\7\ These fees will be charged only to Exchange members. Under a
pilot program that is set to expire on July 31, 2007, these fees
will also be charged to Linkage Orders (as defined in ISE Rule
1900). See Securities Exchange Release No. 54204 (July 25, 2006), 71
FR 43548 (August 1, 2006).
\8\ 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.
\9\ 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.
---------------------------------------------------------------------------
The Exchange has entered into a license agreement with Standard &
Poor's and the Frank Russell Company in connection with the listing and
trading of options on IJS and IWF, IWP, IWS and IWV, respectively. As
with certain other licensed options, the Exchange is adopting a fee of
$0.10 per contract for trading in these options to defray the licensing
costs. The Exchange believes charging the participants that trade this
instrument is the most equitable means of recovering the costs of the
license. However, because of competitive pressures in the industry, the
Exchange proposes to exclude Public Customer Orders from this surcharge
fee. Accordingly, this surcharge fee would be charged only to Exchange
members with respect to Non-Public Customer Orders (e.g., ISE Market
Maker, Non-ISE Market Maker & Firm Proprietary orders) and would apply
to Linkage Orders \10\ under a pilot program that is set to expire on
July 31, 2007. Further, since options on IJS, IWF, IWP, IWS and IWV are
multiply-listed, the Payment for Order Flow fee would also apply.
---------------------------------------------------------------------------
\10\ See supra note 7.
---------------------------------------------------------------------------
2. Statutory Basis
The basis for the proposed rule change is the requirement under
Section 6(b)(4) of the Act \11\ that an exchange have an equitable
allocation of reasonable dues, fees, and other charges among its
members and other persons using its facilities.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
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 proposed rule change 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 \12\ and Rule 19b-
4(f)(2) \13\ thereunder. At any time within 60 days of the filing of
the proposed rule change the Commission may summarily abrogate such
proposed rule change if it
[[Page 54547]]
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.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 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 (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File No. SR-ISE-2006-49 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 No. SR-ISE-2006-49. 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 the filing
also will be available for inspection and copying at the principal
office of the Exchange. 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 No. SR-
ISE-2006-49 and should be submitted on or before October 6, 2006.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\14\
---------------------------------------------------------------------------
\14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Nancy M. Morris,
Secretary.
[FR Doc. E6-15322 Filed 9-14-06; 8:45 am]
BILLING CODE 8010-01-P
