Self-Regulatory Organizations; International Securities Exchange, LLC; Order Approving Proposed Rule Change Relating to Fee Changes on a Retroactive Basis, 46527-46528 [E7-16258]

Download as PDF Federal Register / Vol. 72, No. 160 / Monday, August 20, 2007 / Notices 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–CBOE–2006–104 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. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56240; File No. SR–ISE– 2007–49] Self-Regulatory Organizations; International Securities Exchange, LLC; Order Approving Proposed Rule Change Relating to Fee Changes on a Retroactive Basis August 13, 2007. I. Introduction pwalker on PROD1PC71 with NOTICES On June 15, 2007, the International Securities Exchange, LLC (‘‘ISE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission All submissions should refer to File (‘‘Commission’’), pursuant to Section Number SR–CBOE–2006–104. This file 19(b)(1) of the Securities Exchange Act number should be included on the of 1934 (the ‘‘Act’’),1 and Rule 19b–4 subject line if e-mail is used. To help the thereunder,2 a proposed rule change to Commission process and review your amend its Schedule of Fees on a comments more efficiently, please use retroactive basis. The proposed rule only one method. The Commission will change was published for comment in post all comments on the Commission’s the Federal Register on July 10, 2007.3 Internet Web site (https://www.sec.gov/ The Commission received no comments rules/sro.shtml). Copies of the regarding the proposal. This order submission, all subsequent approves the proposed rule change. amendments, all written statements II. Description of the Proposal with respect to the proposed rule ISE proposes to amend its Schedule of change that are filed with the Fees to: (1) Increase the per contract Commission, and all written surcharge from $0.10 per contract to communications relating to the $0.15 per contract for options on the proposed rule change between the Commission and any person, other than Russell 1000 Index (‘‘RUI’’), the Russell 2000 Index (‘‘RUT’’), and the those that may be withheld from the Mini Russell 2000 Index (‘‘RMN’’); public in accordance with the and (2) refund surcharge fees collected provisions of 5 U.S.C. 552, will be for transactions in options on the available for inspection and copying in iShares Russell 2000 Index Fund the Commission’s Public Reference (‘‘IWM’’), the iShares Russell 2000 Room, 100 F Street, NE., Washington, Value Index Fund (‘‘IWN’’), the iShares DC 20549, on official business days Russell 2000 Growth Index Fund between the hours of 10 a.m. and 3 p.m. (‘‘IWO’’), the iShares Russell 1000 Copies of such filing also will be Value Index Fund (‘‘IWD’’) and the available for inspection and copying at iShares Russell 1000 Index Fund the principal office of CBOE. All (‘‘IWB’’), in both cases for the period comments received will be posted commencing January 1, 2007 and without change; the Commission does ending June 15, 2007 (the ‘‘Retroactive not edit personal identifying Period’’). The Exchange proposes the information from submissions. You surcharge increase to become effective should submit only information that retroactively, as of January 1, 2007.4 The Exchange revised its license you wish to make available publicly. All agreement with the Frank Russell submissions should refer to File Company (‘‘Russell’’), effective January Number SR–CBOE–2006–104 and should be submitted on or before 1 15 U.S.C. 78s(b)(1). September 10, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.11 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–16331 Filed 8–17–07; 8:45 am] BILLING CODE 8010–01–P 11 17 CFR 200.30–3(a)(12). VerDate Aug<31>2005 16:53 Aug 17, 2007 Jkt 211001 2 17 CFR 240.19b–4. Securities Exchange Act Release No. 56005 (July 3, 2007), 72 FR 37555. 4 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), 72 FR 37064 (July 6, 2007) (SR–ISE– 2007–48). 3 See PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 46527 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. 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, 2008.5 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,6 and IWB.7 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 proposes to refund to members the surcharge fee it has collected during the Retroactive Period. III. Discussion 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.8 Specifically, the Commission finds that the proposal is consistent with section 6(b)(4) of the Act,9 which requires that the rules of a national securities exchange provide for the equitable allocation of reasonable dues, fees, and other charges among its members and issuers and other persons using its facilities. Specifically, the Commission believes that application of the amendments to ISE’s Schedule of Fees on a retroactive basis is appropriate 5 Linkage Orders are defined in ISE Rule 1900(10). Under a pilot program that was recently extended and is now set to expire on July 31, 2008, 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. 56128 (July 24, 2007), 72 FR 42161 (August 1, 2007). 6 See Securities Exchange Act Release No. 47075 (December 20, 2002), 67 FR 79673 (December 30, 2002) (SR–ISE–2002–29). 7 See Securities Exchange Act Release No. 47564 (March 24, 2003), 68 FR 15256 (March 28, 2003) (SR–ISE–2003–13). 8 In approving this proposed rule change, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 9 15 U.S.C. 78f(b)(4). E:\FR\FM\20AUN1.SGM 20AUN1 46528 Federal Register / Vol. 72, No. 160 / Monday, August 20, 2007 / Notices and aligns revenue collected from members with license costs charged to ISE under its agreement with Russell. IV. Conclusion It is therefore ordered, pursuant to section 19(b)(2) of the Act, that the proposed rule change (SR–ISE–2007–49) is approved. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.10 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–16258 Filed 8–17–07; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56250; File No. SR–NSCC– 2007–11] Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing of Proposed Rule Change To Allow As-Of Fixed Income Trades To Be Processed in the Continuous Net Settlement System August 14, 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 notice is hereby given that on July 12, 2007, the National Securities Clearing Corporation (‘‘NSCC’’) 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 NSCC. The Commission is publishing this notice to solicit comments on the proposed rule change from interested parties. pwalker on PROD1PC71 with NOTICES I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change NSCC is seeking to modify its procedures to allow as-of fixed income trades to be processed in NSCC’s Continuous Net Settlement (‘‘CNS’’) system. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, NSCC 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 10 17 1 15 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). VerDate Aug<31>2005 16:53 Aug 17, 2007 Jkt 211001 in Item IV below. NSCC has prepared summaries, set forth in sections (A), (B), and (C) below, of the most significant aspects of these statements.2 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change When NSCC revised and updated CNS in 2004 (referred to as the ‘‘CNS Rewrite’’), it provided the capability on any settlement day to take in and process transactions due for settlement that day provided the trades are recorded or compared prior to an established cut-off time in the morning.3 This capability is currently provided for as-of equity transactions but has not yet been expanded to as-of fixed income transactions.4 Rather, settlement of as-of fixed income corporate debt, municipal, and unit investment trust (‘‘UIT’’) trades (corporate debt, municipal, and UIT trades are collectively referred to as ‘‘CMU’’ trades) matched on or after their designated settlement date currently occurs on the business day following the day they are compared. Given that settlement risks associated with CMU trades would be reduced if they settled on an accelerated basis in the same manner that as-of equity trades are settled, NSCC is proposing to enhance its fixed income processing to permit same day settlement of as-of fixed income transactions.5 To accomplish this, NSCC proposes to amend Procedure II (Trade Comparison and Recording Service) so that CNS-eligible as-of CMU trades matched on or after their originally designated settlement date would be processed in CNS on the day they are submitted for comparison so long as they compare prior to the cutoff time established for same day settlement, which currently is 11:30 a.m.6 As-of trades not eligible for CNS processing will settle on a trade-fortrade basis. Trades that match after the designated cut-off time will continue to be assigned a settlement date on the next business day. In addition, because these trades are effectively guaranteed upon 2 The Commission has modified the text of the summaries prepared by NSCC. 3 Securities Exchange Act Release No. 50026 (July 15, 2004), 69 FR 43650 [File No. SR–NSCC–2004– 01]. 4 NSCC’s systems did not have the capacity for same day settling trades for fixed income transactions in 2004. 5 The settlement of cash and next day CMU trades which are compared by NSCC will continue to be the responsibility of the parties to the trades. 6 In addition, references in Procedure VII (CNS Accounting Operation) that currently note that debt securities are not eligible for such accelerated settlement would be removed. PO 00000 Frm 00092 Fmt 4703 Sfmt 4703 comparison, risk associated with the trades will be mitigated through the existing component of the Clearing Fund formula, as set forth in Procedure XV (Clearing Fund Formula and Other Matters), that is designed to mitigate the risk to NSCC associated with trades that are processed on a settlement cycle shorter than three days. Under this component, activity specified for a shortened settlement cycle is isolated and a charge is calculated.7 NSCC believes that the proposed rule change is consistent with the requirements of Section 17A of the Act 8 and the rules and regulations thereunder applicable to NSCC because it should facilitate the prompt and accurate clearance and settlement of securities by increasing automated trade processing and by expanding the types of trades eligible for CNS netting. B. Self-Regulatory Organization’s Statement on Burden on Competition NSCC does not believe that the proposed rule change would impose any burden on competition. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments were not and are not intended to be solicited with respect to the proposed rule change, and none have been received. NSCC will notify the Commission of any written comments it receives. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within thirty-five 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 ninety 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 7 The component calculates a charge based on the average of a member’s charges for the specified activity on the three days with the highest charges calculated for the specified activity over the most recent twenty day period. Securities Exchange Act Release No. 54816 (November 27, 2006), 71 FR 69604 [File No. SR–NSCC–2006–09]. 8 15 U.S.C. 78q–1. E:\FR\FM\20AUN1.SGM 20AUN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 72, Number 160 (Monday, August 20, 2007)]
[Notices]
[Pages 46527-46528]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-16258]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56240; File No. SR-ISE-2007-49]


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

August 13, 2007.

I. Introduction

    On June 15, 2007, the International Securities Exchange, LLC 
(``ISE'' or ``Exchange'') filed with the Securities and Exchange 
Commission (``Commission''), pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (the ``Act''),\1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change to amend its Schedule of Fees on 
a retroactive basis. The proposed rule change was published for comment 
in the Federal Register on July 10, 2007.\3\ The Commission received no 
comments regarding the proposal. This order approves the proposed rule 
change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 56005 (July 3, 
2007), 72 FR 37555.
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II. Description of the Proposal

    ISE proposes 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[reg] Index (``RUI''), the Russell 2000[reg] 
Index (``RUT''), and the Mini Russell 2000[reg] Index (``RMN''); and 
(2) refund surcharge fees collected for transactions in options on the 
iShares Russell 2000[reg] Index Fund (``IWM''), the iShares Russell 
2000[reg] Value Index Fund (``IWN''), the iShares Russell 2000[reg] 
Growth Index Fund (``IWO''), the iShares Russell 1000[reg] Value Index 
Fund (``IWD'') and the iShares Russell 1000[reg] 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.\4\
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    \4\ 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), 
72 FR 37064 (July 6, 2007) (SR-ISE-2007-48).
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    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. 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, 2008.\5\
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    \5\ Linkage Orders are defined in ISE Rule 1900(10). Under a 
pilot program that was recently extended and is now set to expire on 
July 31, 2008, 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. 56128 
(July 24, 2007), 72 FR 42161 (August 1, 2007).
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    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,\6\ and IWB.\7\ 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 proposes to refund to members the surcharge fee it 
has collected during the Retroactive Period.
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    \6\ See Securities Exchange Act Release No. 47075 (December 20, 
2002), 67 FR 79673 (December 30, 2002) (SR-ISE-2002-29).
    \7\ See Securities Exchange Act Release No. 47564 (March 24, 
2003), 68 FR 15256 (March 28, 2003) (SR-ISE-2003-13).
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III. Discussion

    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.\8\ 
Specifically, the Commission finds that the proposal is consistent with 
section 6(b)(4) of the Act,\9\ which requires that the rules of a 
national securities exchange provide for the equitable allocation of 
reasonable dues, fees, and other charges among its members and issuers 
and other persons using its facilities. Specifically, the Commission 
believes that application of the amendments to ISE's Schedule of Fees 
on a retroactive basis is appropriate

[[Page 46528]]

and aligns revenue collected from members with license costs charged to 
ISE under its agreement with Russell.
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    \8\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. 15 U.S.C. 78c(f).
    \9\ 15 U.S.C. 78f(b)(4).
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IV. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the Act, 
that the proposed rule change (SR-ISE-2007-49) is approved.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-16258 Filed 8-17-07; 8:45 am]
BILLING CODE 8010-01-P

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