Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing of Proposed Rule Change Relating to Fee Changes on a Retroactive Basis, 37555-37557 [E7-13308]

Download as PDF Federal Register / Vol. 72, No. 131 / Tuesday, July 10, 2007 / Notices May 31, 2007, to help compensate the Exchange for its increased costs in providing the TX data and to help offset the license fees paid by the Exchange to its third-party provider for making the TX software available to users during this time period. On June 1, 2007, the Exchange adopted a monthly fee to recoup the fees CBSX pays a third-party market data vendor and other parties to help establish facilities at CBSX through which the third-party market data vendor can provide CBSX participants with certain market data.4 The fee is equal to $19,400 divided by the number of CBSX participants receiving the market data. The Exchange proposes to assess this fee for the period April 1, 2007 through May 31, 2007, to recoup the fees CBSX paid during this time period for providing the infrastructure to make the market data available to CBSX participants. 2. Statutory Basis CBOE believes the proposed rule change is consistent with Section 6(b) of the Act 5 in general, and furthers the objectives of Section 6(b)(4) of the Act 6 in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among CBOE members. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change would 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 solicited or received with respect to the proposed rule change. jlentini on PROD1PC65 with NOTICES 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 the Exchange consents, the Commission will: (A) By order approve the proposed rule change, or 4 See id. U.S.C. 78f(b). 6 15 U.S.C. 78f(b)(4). 5 15 VerDate Aug<31>2005 16:17 Jul 09, 2007 Jkt 211001 (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: 37555 For the Commission, by the Division of Market Regulation, pursuant to delegated authority.7 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–13310 Filed 7–9–07; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56005; File No. SR–ISE– 2007–49] Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–CBOE–2007–73 on the subject line. Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing of Proposed Rule Change Relating to Fee Changes on a Retroactive Basis July 3, 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 Paper Comments notice is hereby given that on June 15, • Send paper comments in triplicate 2007, the International Securities to Nancy M. Morris, Secretary, Exchange, LLC (‘‘ISE’’ or ‘‘Exchange’’) Securities and Exchange Commission, filed with the Securities and Exchange 100 F Street, NE., Washington, DC Commission (‘‘Commission’’) the proposed rule change as described in 20549–1090. Items I, II and III below, which Items All submissions should refer to File have been substantially prepared by ISE. Number SR–CBOE–2007–73. This file The Commission is publishing this number should be included on the subject line if e-mail is used. To help the notice to solicit comments on the proposed rule change from interested Commission process and review your persons. comments more efficiently, please use only one method. The Commission will I. Self-Regulatory Organization’s post all comments on the Commission’s Statement of the Terms of Substance of the Proposed Rule Change Internet Web site (http://www.sec.gov/ rules/sro.shtml). Copies of the ISE is proposing to amend its submission, all subsequent Schedule of Fees to: (1) Increase the per amendments, all written statements contract surcharge from $0.10 per with respect to the proposed rule contract to $0.15 per contract for change that are filed with the options on the Russell 1000 Index Commission, and all written (‘‘RUI’’), the Russell 2000 Index communications relating to the (‘‘RUT’’), and the Mini Russell 2000 proposed rule change between the Index (‘‘RMN’’); and (2) refund Commission and any person, other than surcharge fees collected for transactions those that may be withheld from the in options on the iShares Russell 2000 public in accordance with the Index Fund (‘‘IWM’’), the iShares provisions of 5 U.S.C. 552, will be Russell 2000 Value Index Fund available for inspection and copying in (‘‘IWN’’), the iShares Russell 2000 the Commission’s Public Reference Growth Index Fund (‘‘IWO’’), the Room, 100 F Street, NE., Washington, iShares Russell 1000 Value Index Fund DC 20549, on official business days (‘‘IWD’’) and the iShares Russell 1000 between the hours of 10:00 a.m. and Index Fund (‘‘IWB’’), in both cases for 3:00 p.m. Copies of the filing also will the period commencing January 1, 2007 be available for inspection and copying and ending June 15, 2007 (the at the principal office of the Exchange. ‘‘Retroactive Period’’). The Exchange All comments received will be posted proposes the surcharge increase to without change; the Commission does become effective retroactively, as of not edit personal identifying January 1, 2007.3 The text of the information from submissions. You 7 17 CFR 200.30–3(a)(12). should submit only information that 1 15 U.S.C. 78s(b)(1). you wish to make available publicly. All 2 17 CFR 240.19b–4. submissions should refer to File 3 2007, the Exchange filed a Number SR–CBOE–2007–73 and should ruleOn June 15,immediately effective underproposed change as Section be submitted on or before July 31, 2007. Continued PO 00000 Frm 00052 Fmt 4703 Sfmt 4703 E:\FR\FM\10JYN1.SGM 10JYN1 37556 Federal Register / Vol. 72, No. 131 / Tuesday, July 10, 2007 / Notices proposed rule change is available at ISE, http://www.iseoptions.com, and 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 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 jlentini on PROD1PC65 with NOTICES 1. Purpose The Exchange is proposing to amend its Schedule of Fees to: (1) Increase the per contract surcharge from $0.10 per contract to $0.15 per contract in connection with the listing and trading of options on RUI, RUT, and RMN; and (2) refund surcharge fees collected for transactions in connection with the listing and trading in options on IWM, IWN, IWO, IWD and IWB during the Retroactive Period. The Exchange proposes the surcharge increase to become effective retroactively, as of January 1, 2007. The Exchange’s Schedule of Fees currently has in place a surcharge fee item that calls for a $0.10 per contract fee in connection with the listing and trading of options on RUI, RUT and RMN.4 The Exchange revised its license agreement with the Frank Russell Company (‘‘Russell’’), effective January 1, 2007. Pursuant to the revised agreement, the Exchange pays Russell $0.15 per contract to trade options on RUI, RUT and RMN. The Exchange thus proposes to increase the surcharge fee for options on RUI, RUT and RMN from $0.10 per contract to $0.15 per contract retroactive to January 1, 2007 and collect from members the applicable 19(b)(3)(A) of the Exchange Act that: (1) Removes the surcharge fee for IWM, IWN, IWO, IWD and IWB from its Schedule of Fees and (2) raises the surcharge fee from $.10 per contract to $.15 per contract for options on RUI, RUT and RMN. See Securities Exchange Act Release No. 55975 (June 28, 2007) (SR–ISE–2007–48). Because ISE seeks to apply changes to its Schedule of Fees on a retroactive basis, the Exchange is submitting this proposal for notice and comment. 4 See Securities Exchange Act Release No. 51858 (June 16, 2005), 70 FR 36218 (June 22, 2005) (SR– ISE–2005–26). VerDate Aug<31>2005 16:17 Jul 09, 2007 Jkt 211001 fees due to the Exchange for the Retroactive Period. The Exchange believes that charging the participants that trade these instruments is the most equitable means of recovering the increased costs of the license. However, because competitive pressures in the industry have resulted in the waiver of transaction fees for Public Customers, the Exchange proposes to exclude Public Customer Orders 5 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 certain Linkage Orders under a pilot program that is set to expire on July 31, 2007.6 Additionally, the Exchange had previously adopted a $0.10 per contract surcharge in connection with the listing and trading of options on IWM, IWN, IWO, IWD,7 and IWB.8 However, pursuant to the revised license agreement with Russell, the Exchange, as of January 1, 2007, no longer pays a license fee to Russell in connection with the listing and trading of options on IWM, IWN, IWO, IWD and IWB. As a result, the Exchange now proposes to refund to members the surcharge fee it has collected during the Retroactive Period. 2. Statutory Basis The basis under the Act for this proposed rule change is the requirement under Section 6(b)(4) 9 that an exchange provide for the 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 ISE does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. 5 Public Customer Order is defined in Exchange Rule 100(a)(39) as an order for the account of a Public Customer. Public Customer is defined in Exchange Rule 100(a)(38) as a person that is not a broker or dealer in securities. 6 Linkage Orders are defined in ISE Rule 1900(10). Under a pilot program that is set to expire on July 31, 2007, these fees will also be charged to Principal Acting as Agent Orders and Principal Orders (as defined in ISE Rule 1900(10)(i)–(ii)). See Securities Exchange Act Release No. 54204 (July 25, 2006), 71 FR 43548 (August 1, 2006) (SR–ISE–2006– 38). 7 See Securities Exchange Act Release No. 47075 (December 20, 2002), 67 FR 79673 (December 30, 2002) (SR–ISE–2002–29). 8 See Securities Exchange Act Release No. 47564 (March 24, 2003), 68 FR 15256 (March 28, 2003) (SR–ISE–2003–13). 9 15 U.S.C. 78f(b)(4). PO 00000 Frm 00053 Fmt 4703 Sfmt 4703 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 interested parties. 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 the self–regulatory organization consents, the Commission will: A. By order approve such proposed rule change, or B. institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e–mail to rule– comments@sec.gov. Please include File Number SR–ISE–2007–49 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–2007–49. 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 (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 E:\FR\FM\10JYN1.SGM 10JYN1 Federal Register / Vol. 72, No. 131 / Tuesday, July 10, 2007 / Notices 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, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of 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–2007–49 and should be submitted on or before July 31, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.10 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–13308 Filed 7–9–07; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56001; File No. SR– NYSEArca–2007–34] Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving Proposed Rule Change and Amendment No. 1 Thereto Relating to Trading a Class of Options Without Designating a Lead Market Maker July 2, 2007. jlentini on PROD1PC65 with NOTICES On April 3, 2007, NYSE Arca, Inc. (‘‘NYSE Arca’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 the proposed rule change to allow an options issue to trade without designating a Lead Market Maker (‘‘LMM’’). On May 2, 2007, NYSE Arca filed Amendment No. 1 to the proposed rule change. The proposed rule change, as amended, was published for comment in the Federal Register on May 29, 2007.3 The Commission received no comments regarding the proposal. This order approves the 10 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 55789 (May 21, 2007), 72 FR 29568. 1 15 VerDate Aug<31>2005 16:17 Jul 09, 2007 Jkt 211001 proposed rule change as modified by Amendment No. 1. 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.4 In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act,5 which requires that the rules of the an exchange be designed 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. The Exchange proposes to trade options classes without designating an LMM, yet still meet the requirements of the Plan for the Purpose of Creating and Operating an Intermarket Option Linkage (‘‘Linkage Plan’’).6 Because the Exchange believes that certain highly liquid, highly active options classes have sufficient participation by OTP Holders 7 and do not need an LMM to foster liquidity, the Exchange proposes to remove from NYSE Arca Rule 6.35 the requirement that an LMM be assigned to every option class.8 The Exchange also proposes other rule changes to accommodate the requirements of the Linkage Plan. Pursuant to the Linkage Plan, a Principal Acting as Agent (‘‘P/A’’) Order may be routed to another exchange only through the principal account of a market maker that is authorized to represent customer orders, ‘‘reflecting the terms of a related unexecuted Customer order for which the Market Maker is acting as agent.’’ 9 On NYSE Arca, the LMM currently is the 4 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). 5 15 U.S.C. 78f(b)(5). 6 On July 28, 2000, the Commission approved the Options Intermarket Linkage (‘‘Linkage’’) proposed by American Stock Exchange LLC, Chicago Board Options Exchange, Incorporated, and International Securities Exchange, LLC. See Securities Exchange Act Release No. 43086 (July 28, 2000), 65 FR 48023 (August 4, 2000). Subsequently, Philadelphia Stock Exchange, Inc., Pacific Exchange, Inc. (n/k/a NYSE Arca), and Boston Stock Exchange, Inc. joined the Linkage Plan. See Securities Exchange Act Release Nos. 43573 (November 16, 2000), 65 FR 70851 (November 28, 2000); 43574 (November 16, 2000), 65 FR 70850 (November 28, 2000); and 49198 (February 5, 2004), 69 FR 7029 (February 12, 2004). 7 See NYSE Arca Rule 1.1(q) for the definition of ‘‘OTP Holder.’’ 8 In not designating an LMM in certain option issues, orders would be processed in price/time priority, meaning any market participant, regardless of status, may gain priority by improving the market. 9 See Section 2(16)(a) of the Linkage Plan. PO 00000 Frm 00054 Fmt 4703 Sfmt 4703 37557 responsible Market Maker for outbound P/A Orders sent through the Intermarket Options Linkage (‘‘Linkage’’). The Exchange now proposes to allow for the designation of a Market Maker, assigned on a rotating basis, as the responsible Intermarket Linkage Market Maker (‘‘IMM’’) 10 for outbound P/A Orders. Currently, Market Makers on the Exchange other than LMMs are not permitted under the Exchange’s current rules to act as an agent on behalf of an order submitted to the Exchange.11 Therefore, the Exchange proposes to amend NYSE Arca Rule 6.38(a) to provide an exception for a Market Maker acting as an IMM for the purpose of settling P/A Orders sent to another exchange pursuant to NYSE Arca Rules 6.92 and 6.93. To enable the IMM to carry out its agency responsibilities with regard to P/A Orders submitted through the Linkage, the IMM would be required to submit prior written instructions to the Exchange for the routing of any P/A Orders through the Linkage. Although the Exchange intends to rely solely on the use of its outbound routing broker to access the quotes of other exchanges when the Exchange is not disseminating the national best bid or offer, there may be instances when the Exchange’s routing broker is not available because of system malfunctions. Therefore, the Exchange proposes that designated IMMs be responsible for outbound P/A Orders sent through the Linkage. The Exchange also proposes to amend NYSE Arca Rule 6.93 to clarify that the Exchange will be responsible for the receipt, processing, and execution of inbound Linkage orders received from other exchanges. Linkage orders sent to NYSE Arca are routed directly to the trading system for immediate automatic execution. Any remaining unexecuted order or portion of an order would be immediately returned by the Exchange to the originating away market. The Commission believes that the proposed rule change is reasonably designed in that it permits the Exchange to not utilize an LMM in option classes where the Exchange does not believe an LMM is required and promotes the 10 The IMM would be selected from the pool of all Market Makers who have been appointed in the particular class. Market Makers requesting appointment to an options class would need to agree to participate in the rotation of IMM assignment. 11 See NYSE Arca Rule 6.38(b)(1), which provides that Market Makers other than LMMs are restricted from acting as a principal and an agent in the same issue on the same business day. See also NYSE Arca Rule 6.38(b)(5), which provides Market Makers are restricted from acting as a floor broker in options covering the same underlying security to which its primary appointment extends. E:\FR\FM\10JYN1.SGM 10JYN1

Agencies

[Federal Register Volume 72, Number 131 (Tuesday, July 10, 2007)]
[Notices]
[Pages 37555-37557]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-13308]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56005; File No. SR-ISE-2007-49]


Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing of Proposed Rule Change Relating to Fee Changes 
on a Retroactive Basis

July 3, 2007.
    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 15, 2007, the International Securities Exchange, LLC 
(``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 substantially prepared 
by ISE. 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.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    ISE is proposing to amend its Schedule of Fees to: (1) Increase the 
per contract surcharge from $0.10 per contract to $0.15 per contract 
for options on the Russell 1000[supreg] Index (``RUI''), the Russell 
2000[supreg] Index (``RUT''), and the Mini Russell 2000 Index 
(``RMN''); and (2) refund surcharge fees collected for transactions in 
options on the iShares Russell 2000[supreg] Index Fund (``IWM''), the 
iShares Russell 2000[supreg] Value Index Fund (``IWN''), the iShares 
Russell 2000[supreg] Growth Index Fund (``IWO''), the iShares Russell 
1000[supreg] Value Index Fund (``IWD'') and the iShares Russell 
1000[supreg] Index Fund (``IWB''), in both cases for the period 
commencing January 1, 2007 and ending June 15, 2007 (the ``Retroactive 
Period''). The Exchange proposes the surcharge increase to become 
effective retroactively, as of January 1, 2007.\3\ The text of the

[[Page 37556]]

proposed rule change is available at ISE, http://www.iseoptions.com, 
and the Commission's Public Reference Room.
---------------------------------------------------------------------------

    \3\ On June 15, 2007, the Exchange filed a proposed rule change 
as immediately effective under Section 19(b)(3)(A) of the Exchange 
Act that: (1) Removes the surcharge fee for IWM, IWN, IWO, IWD and 
IWB from its Schedule of Fees and (2) raises the surcharge fee from 
$.10 per contract to $.15 per contract for options on RUI, RUT and 
RMN. See Securities Exchange Act Release No. 55975 (June 28, 2007) 
(SR-ISE-2007-48). Because ISE seeks to apply changes to its Schedule 
of Fees on a retroactive basis, the Exchange is submitting this 
proposal for notice and comment.
---------------------------------------------------------------------------

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 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 is proposing to amend its Schedule of Fees to: (1) 
Increase the per contract surcharge from $0.10 per contract to $0.15 
per contract in connection with the listing and trading of options on 
RUI, RUT, and RMN; and (2) refund surcharge fees collected for 
transactions in connection with the listing and trading in options on 
IWM, IWN, IWO, IWD and IWB during the Retroactive Period. The Exchange 
proposes the surcharge increase to become effective retroactively, as 
of January 1, 2007.
    The Exchange's Schedule of Fees currently has in place a surcharge 
fee item that calls for a $0.10 per contract fee in connection with the 
listing and trading of options on RUI, RUT and RMN.\4\ The Exchange 
revised its license agreement with the Frank Russell Company 
(``Russell''), effective January 1, 2007. Pursuant to the revised 
agreement, the Exchange pays Russell $0.15 per contract to trade 
options on RUI, RUT and RMN. The Exchange thus proposes to increase the 
surcharge fee for options on RUI, RUT and RMN from $0.10 per contract 
to $0.15 per contract retroactive to January 1, 2007 and collect from 
members the applicable fees due to the Exchange for the Retroactive 
Period. The Exchange believes that charging the participants that trade 
these instruments is the most equitable means of recovering the 
increased costs of the license. However, because competitive pressures 
in the industry have resulted in the waiver of transaction fees for 
Public Customers, the Exchange proposes to exclude Public Customer 
Orders \5\ 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 certain Linkage Orders under a 
pilot program that is set to expire on July 31, 2007.\6\
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 51858 (June 16, 
2005), 70 FR 36218 (June 22, 2005) (SR-ISE-2005-26).
    \5\ Public Customer Order is defined in Exchange Rule 100(a)(39) 
as an order for the account of a Public Customer. Public Customer is 
defined in Exchange Rule 100(a)(38) as a person that is not a broker 
or dealer in securities.
    \6\ Linkage Orders are defined in ISE Rule 1900(10). Under a 
pilot program that is set to expire on July 31, 2007, these fees 
will also be charged to Principal Acting as Agent Orders and 
Principal Orders (as defined in ISE Rule 1900(10)(i)-(ii)). See 
Securities Exchange Act Release No. 54204 (July 25, 2006), 71 FR 
43548 (August 1, 2006) (SR-ISE-2006-38).
---------------------------------------------------------------------------

    Additionally, the Exchange had previously adopted a $0.10 per 
contract surcharge in connection with the listing and trading of 
options on IWM, IWN, IWO, IWD,\7\ and IWB.\8\ However, pursuant to the 
revised license agreement with Russell, the Exchange, as of January 1, 
2007, no longer pays a license fee to Russell in connection with the 
listing and trading of options on IWM, IWN, IWO, IWD and IWB. As a 
result, the Exchange now proposes to refund to members the surcharge 
fee it has collected during the Retroactive Period.
---------------------------------------------------------------------------

    \7\ See Securities Exchange Act Release No. 47075 (December 20, 
2002), 67 FR 79673 (December 30, 2002) (SR-ISE-2002-29).
    \8\ See Securities Exchange Act Release No. 47564 (March 24, 
2003), 68 FR 15256 (March 28, 2003) (SR-ISE-2003-13).
---------------------------------------------------------------------------

2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(4) \9\ that an exchange provide for the 
equitable allocation of reasonable dues, fees, and other charges among 
its members and other persons using its facilities.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

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

    ISE does not believe that the proposed rule change will result in 
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 interested parties.

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 the self-regulatory organization consents, the Commission will:
    A. By order approve such proposed rule change, or
    B. institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-ISE-2007-49 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-2007-49. 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 (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

[[Page 37557]]

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, 100 F Street, NE., Washington, DC 
20549, on official business days between the hours of 10 a.m and 3 p.m. 
Copies of such filing also will be available for inspection and copying 
at the principal office of 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-2007-49 and should be submitted on or before July 
31, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-13308 Filed 7-9-07; 8:45 am]
BILLING CODE 8010-01-P