Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Market Maker Fee Changes, 39754-39755 [E8-15650]

Download as PDF 39754 Federal Register / Vol. 73, No. 133 / Thursday, July 10, 2008 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–58091; File No. SR–ISE– 2008–55] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Market Maker Fee Changes July 3, 2008. 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 June 30, 2008, 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 prepared by the Exchange. ISE filed the proposal pursuant to Section 19(b)(3)(A) 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 ISE proposes to amend its Schedule of Fees related to options market maker transaction fees. The text of the proposed rule change is available at the Exchange, the Commission’s Public Reference Room, and http:// www.ise.com. jlentini on PROD1PC65 with NOTICES 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. 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)(2). 2 17 VerDate Aug<31>2005 16:58 Jul 09, 2008 Jkt 214001 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend its transaction fees applicable to options market makers on the ISE and options market makers on other options exchanges. With respect to ISE market makers, the Exchange proposes to adopt a per contract transaction fee that is based on the number of contracts the ISE market maker trades in a month as follows: • First 1,000,000 contracts in a month—$0.18 per contract. • 1,000,001 to 3,000,000 contracts in a month—$0.16 per contract. • 3,000,001 to 5,000,000 contracts in a month—$0.13 per contract. • 5,000,001 to 10,000,000 contracts in a month—$0.03 per contract. • Above 10,000,000 contracts in a month—$0.01 per contract. The sliding scale applies to all ISE market makers for transactions in all products, is calculated on a member firm basis,5 and applies to nondiscounted volume only; that is, it does not apply to orders previously discounted by other pricing incentives that currently appear on the Exchange’s Schedule of Fees. Previously, the Exchange had applied a sliding scale that was based upon the Exchange’s overall averaged daily volume (‘‘ADV’’). The ADV-based method reduced the ISE market maker transaction fee for all members, regardless of the volume executed by any individual member. Under this proposal, ISE market maker fees are reduced on the member firm level as a volume discount. The Exchange also proposes to increase the transaction fee charged to members to execute orders for the account of options market makers on other exchanges. Under this proposal, the ‘‘non-ISE market maker fee,’’ previously set at $0.40 per contract, has been increased to $0.45 cents per contract.6 These changes became operative on July 1, 2008. 2. Statutory Basis The Exchange states that the basis under the Act for this proposed rule a member firm operates more than one market maker membership, all of the member firm’s market maker volume will be aggregated for purposes of the market maker transaction fee. 6 ISE’s non-ISE market maker fee is currently $0.37 cents plus a $0.03 comparison fee. See Securities Exchange Act Release No. 55897 (June 12, 2007), 72 FR 33546 (June 18, 2007) (SR–ISE– 2007–41). The Exchange consolidated these two fees in SR–ISE–2008–54, so that the total non-ISE market maker fee is represented as $0.40 on the Exchange’s schedule of fees. PO 00000 5 If Frm 00109 Fmt 4703 Sfmt 4703 change is the requirement of Section 6(b)(4) 7 that an exchange have an equitable allocation of reasonable dues, fees and other charges among its members and other persons using its facilities. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange states that the proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange states that it has not solicited, and does not intend to solicit, comments on this proposed rule change. Additionally, the Exchange states that it 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 The foregoing proposed rule change has been designated as a fee change pursuant to Section 19(b)(3)(A) of the Act 8 and Rule 19b–4(f)(2) thereunder,9 because it establishes or changes a due, fee, or other charge imposed on members by ISE. Accordingly, the proposal is effective upon filing with the Commission. At any time within 60 days of the filing of the 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. 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 rulecomments@sec.gov. Please include File Number SR–ISE–2008–55 on the subject line. 7 15 U.S.C. 78f(b)(4). U.S.C. 78s(b)(3)(A). 9 17 CFR 240.19b–4(f)(2). 8 15 E:\FR\FM\10JYN1.SGM 10JYN1 Federal Register / Vol. 73, No. 133 / Thursday, July 10, 2008 / Notices Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–ISE–2008–55. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission’s Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. 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 Number SR–ISE–2008–55 and should be submitted on or before July 31, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Florence E. Harmon, Acting Secretary. [FR Doc. E8–15650 Filed 7–9–08; 8:45 am] jlentini on PROD1PC65 with NOTICES BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–58081; File No. SR– NASDAQ–2008–058] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Modify Fees for Members Using the NASDAQ Options Market July 2, 2008. 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 June 30, 2008, The NASDAQ Stock Market LLC (‘‘Nasdaq’’) 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 substantially by Nasdaq. Nasdaq has designated this proposal as one establishing or changing a member due, fee, or other charge imposed by Nasdaq 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 Nasdaq proposes to modify Rule 7050 governing pricing for Nasdaq members using the NASDAQ Options Market (‘‘NOM’’), Nasdaq’s facility for executing and routing standardized equity and index options. Nasdaq will implement the proposed rule change on July 1, 2008. The text of the proposed rule change is available at http:// www.complinet.com/nasdaq, the principal offices of the Exchange, 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, Nasdaq 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. Nasdaq has prepared 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). 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 Nasdaq is proposing to modify the fees assessed for execution of options orders entered into NOM but routed to away markets. Nasdaq currently assesses a routing fee based upon an approximation of the cost to Nasdaq of executing such orders at those markets. In order to reflect Nasdaq’s cost of execution at away markets, the fees are separated by type of option (penny pilot, equity/non-penny pilot, ETF or HLDS/non-penny pilot, and Index) and vary depending upon whether the order is being routed for a customer, a member firm, or a registered market maker. In addition, Nasdaq passes through surcharges that are assessed by other markets for the execution of specific options orders on specific underlying instruments. Nasdaq has determined that the superior approach is to pass through to exchange members the actual fees assessed by away markets plus the clearing fees for the execution of orders routed from Nasdaq. Nasdaq has collected and organized in chart format the fees to be assessed for routing to each destination exchange. These fees include both the execution fees charged by the individual exchanges and also the clearing fees associated with each execution. Nasdaq believes that these routing fees are inherently competitive, fair and reasonable, and nondiscriminatory in that they replicate the fees assessed by away markets executing orders routed from Nasdaq. As with all fees, Nasdaq may adjust these routing fees in response to competitive conditions by filing a new proposed rule change. 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,5 in general, and with Section 6(b)(4) of the Act,6 in particular, in that it provides for the equitable allocation of reasonable dues, fees and other charges among members and issuers and other persons using any facility or system which Nasdaq operates or controls. Nasdaq is one of seven options markets in the national market system for standardized options. Joining 2 17 10 17 CFR 200.30–3(a)(12). VerDate Aug<31>2005 16:58 Jul 09, 2008 Jkt 214001 PO 00000 Frm 00110 Fmt 4703 Sfmt 4703 39755 5 15 6 15 E:\FR\FM\10JYN1.SGM U.S.C. 78f. U.S.C. 78f(b)(4). 10JYN1

Agencies

[Federal Register Volume 73, Number 133 (Thursday, July 10, 2008)]
[Notices]
[Pages 39754-39755]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-15650]



[[Page 39754]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58091; File No. SR-ISE-2008-55]


Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change Relating to Market Maker Fee Changes

July 3, 2008.
    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 June 30, 2008, 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 prepared by the Exchange. ISE 
filed the proposal pursuant to Section 19(b)(3)(A) 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).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    ISE proposes to amend its Schedule of Fees related to options 
market maker transaction fees. The text of the proposed rule change is 
available at the Exchange, the Commission's Public Reference Room, and 
http://www.ise.com.

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 proposes to amend its transaction fees applicable to 
options market makers on the ISE and options market makers on other 
options exchanges. With respect to ISE market makers, the Exchange 
proposes to adopt a per contract transaction fee that is based on the 
number of contracts the ISE market maker trades in a month as follows:
     First 1,000,000 contracts in a month--$0.18 per contract.
     1,000,001 to 3,000,000 contracts in a month--$0.16 per 
contract.
     3,000,001 to 5,000,000 contracts in a month--$0.13 per 
contract.
     5,000,001 to 10,000,000 contracts in a month--$0.03 per 
contract.
     Above 10,000,000 contracts in a month--$0.01 per contract.
    The sliding scale applies to all ISE market makers for transactions 
in all products, is calculated on a member firm basis,\5\ and applies 
to non-discounted volume only; that is, it does not apply to orders 
previously discounted by other pricing incentives that currently appear 
on the Exchange's Schedule of Fees. Previously, the Exchange had 
applied a sliding scale that was based upon the Exchange's overall 
averaged daily volume (``ADV''). The ADV-based method reduced the ISE 
market maker transaction fee for all members, regardless of the volume 
executed by any individual member. Under this proposal, ISE market 
maker fees are reduced on the member firm level as a volume discount.
---------------------------------------------------------------------------

    \5\ If a member firm operates more than one market maker 
membership, all of the member firm's market maker volume will be 
aggregated for purposes of the market maker transaction fee.
---------------------------------------------------------------------------

    The Exchange also proposes to increase the transaction fee charged 
to members to execute orders for the account of options market makers 
on other exchanges. Under this proposal, the ``non-ISE market maker 
fee,'' previously set at $0.40 per contract, has been increased to 
$0.45 cents per contract.\6\ These changes became operative on July 1, 
2008.
---------------------------------------------------------------------------

    \6\ ISE's non-ISE market maker fee is currently $0.37 cents plus 
a $0.03 comparison fee. See Securities Exchange Act Release No. 
55897 (June 12, 2007), 72 FR 33546 (June 18, 2007) (SR-ISE-2007-41). 
The Exchange consolidated these two fees in SR-ISE-2008-54, so that 
the total non-ISE market maker fee is represented as $0.40 on the 
Exchange's schedule of fees.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange states that the basis under the Act for this proposed 
rule change is the requirement of Section 6(b)(4) \7\ that an exchange 
have an equitable allocation of reasonable dues, fees and other charges 
among its members and other persons using its facilities.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

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

    The Exchange states that the proposed rule change does not impose 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.

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

    The Exchange states that it has not solicited, and does not intend 
to solicit, comments on this proposed rule change. Additionally, the 
Exchange states that it 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

    The foregoing proposed rule change has been designated as a fee 
change pursuant to Section 19(b)(3)(A) of the Act \8\ and Rule 19b-
4(f)(2) thereunder,\9\ because it establishes or changes a due, fee, or 
other charge imposed on members by ISE. Accordingly, the proposal is 
effective upon filing with the Commission. At any time within 60 days 
of the filing of the 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.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-ISE-2008-55 on the subject line.

[[Page 39755]]

Paper Comments

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

All submissions should refer to File Number SR-ISE-2008-55. This file 
number should be included on the subject line if e-mail is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for inspection and 
copying in the Commission's Public Reference Room, 100 F Street, NE., 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. 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 Number SR-ISE-2008-55 and should be 
submitted on or before July 31, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-15650 Filed 7-9-08; 8:45 am]
BILLING CODE 8010-01-P