Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Fee Changes and an Incentive Plan for Three Foreign Currency Options, 43204-43205 [E9-20540]

Download as PDF 43204 Federal Register / Vol. 74, No. 164 / Wednesday, August 26, 2009 / Notices IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,45 that the proposed rule change (SR–BX–2009– 028), as modified by Amendment No. 1, be, and it hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.46 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–20541 Filed 8–25–09; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–60536; File No. SR–ISE– 2009–59] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Fee Changes and an Incentive Plan for Three Foreign Currency Options August 19, 2009. jlentini on DSKJ8SOYB1PROD with NOTICES 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 August 3, 2009, the International Securities Exchange, LLC (the ‘‘Exchange’’ or the ‘‘ISE’’) 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 selfregulatory organization. ISE has designated this proposal as one establishing or changing a due, fee, or other charge applicable only to a member 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 initiate an incentive plan for market makers in three newly listed foreign currency options (‘‘FX Options’’) and to establish fees for transactions in these FX Options. The text of the proposed rule 45 15 U.S.C. 78s(b)(2). CFR 200.30–3(a)(12). 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). 46 17 VerDate Nov<24>2008 17:05 Aug 25, 2009 Jkt 217001 change is available on the Exchange’s Web site (https://www.ise.com), at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization 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 self-regulatory organization 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 purpose of this proposed rule change is to initiate an incentive plan for market makers on three newly listed FX Options, specifically, the New Zealand dollar (‘‘NZD’’), the Mexican peso (‘‘PZO’’) and the Swedish krona (‘‘SKA’’) 5 and to establish fees for transactions in these products. Options on NZD, PZO and SKA began trading on the Exchange on August 3, 2009. As such, this proposed fee change will be operative and effective on August 3, 2009. In order to promote trading in these new FX Options, the Exchange proposes to initiate an incentive plan for market makers in NZD, PZO and SKA. Market makers will be able to enter into the incentive plan until October 5, 2009. Participants in the incentive plan are known on the Exchange’s Schedule of Fees as Early Adopter Market Makers. Under the incentive plan, the Exchange will waive the applicable transaction fees for both the Early Adopter FXPMM 6 and all Early Adopter FXCMMs 7 that make a market in NZD, PZO and SKA for as long as the incentive plan is in effect. Further, pursuant to a revenue sharing agreement 5 The Commission previously approved the trading of options on NZD, PZO and SKA. See Securities Exchange Act Release No. 55575 (April 3, 2007), 72 FR 17963 (April 10, 2007) (Order approving the listing and trading of FX Options). 6 A FXPMM is a primary market maker selected by the Exchange that trades and quotes in FX Options only. See ISE Rule 2213. 7 A FXCMM is a competitive market maker selected by the Exchange that trades and quotes in FX Options only. See ISE Rule 2213. PO 00000 Frm 00111 Fmt 4703 Sfmt 4703 entered into between an Early Adopter Market Maker and ISE, the Exchange will pay the Early Adopter FXPMM forty percent (40%) of the transaction fees collected on any customer trade in NZD, PZO and SKA and will pay up to ten (10) Early Adopter FXCMMs that participate in the incentive plan twenty percent (20%) of the transaction fees collected for trades between a customer and that FXCMM. Market makers that do not participate in the incentive plan, i.e., market makers that begin to quote and trade in NZD, PZO and SKA after October 5, 2009, will be charged regular transaction fees for trades in these products. The Exchange is proposing to adopt an execution fee of $0.40 per contract for all Public Customer transactions in options on NZD, PZO and SKA.8 The amount of the execution fee for all Firm Proprietary transactions will be $0.20 per contract and the execution fee for all non-Early Adopter ISE Market Makers in NZD, PZO and SKA shall be equal to the execution fee currently charged by the Exchange for ISE Market Maker transactions in equity options.9 Finally, the amount of the execution fee for all non-ISE Market Maker transactions in these products shall be $0.45 per contract.10 The Exchange will not charge a Payment for Order Flow fee for these products. The Exchange also [sic] proposes to waive transaction charges for all Early Adopter Market Makers in NZD, PZO and SKA in order to further encourage the trading of these FX Options. The Exchange believes that the revenue generated from customer, firm proprietary and non-ISE market maker transaction charges and increased order flow would offset the transaction fees that would otherwise be applied to market makers in NZD, PZO and SKA, thereby allowing the Exchange to recoup those fees while increasing order flow and generating increased revenues. The Exchange believes the proposed rule change will further the Exchange’s 8 These fees will be charged only to Exchange members. Under a pilot program that is set to expire on July 31, 2010, these fees will also be charged to Linkage Principal Orders (‘‘Linkage P Orders’’) and Linkage Principal Acting as Agent Orders (‘‘Linkage P/A Orders’’). The amount of the execution fee charged by the Exchange for Linkage P Orders and Linkage P/A Orders is $0.27 per contract side and $0.18 per contract side, respectively. See Securities Exchange Act Release No. 60175 (June 25, 2009), 74 FR 32026 (July 6, 2009) (SR–ISE–2009–36). 9 The Exchange applies a sliding scale, between $0.01 and $0.18 per contract side, based on the number of contracts an ISE market maker trades in a month. 10 The amount of the execution fee for non-ISE Market Maker transactions executed in the Exchange’s Facilitation and Solicitation Mechanisms is $0.20 per contract. E:\FR\FM\26AUN1.SGM 26AUN1 Federal Register / Vol. 74, No. 164 / Wednesday, August 26, 2009 / Notices goal of introducing new products to the marketplace that are competitively priced. 2. Basis The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 of the Act,11 in general, and furthers the objectives of Section 6(b)(4),12 in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees and other charges among its members and other persons using its facilities. The Exchange believes that the proposed incentive plan will generate additional order flow to the Exchange by creating incentives to trade these FX Options as well as defray operational costs for Early Adopter Market Makers. 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 The foregoing rule change has become effective pursuant to Section 19(b)(3) of the Act 13 and Rule 19b–4(f)(2) 14 thereunder. At any time within 60 days of the filing of such 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. jlentini on DSKJ8SOYB1PROD with NOTICES 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: 11 15 U.S.C. 78f(b). U.S.C. 78f(b)(4). 13 15 U.S.C. 78s(b)(3)(A). [sic] 14 17 CFR 240.19b–4(f)(2). Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rulecomments@sec.gov. Please include File Number SR–ISE–2009–59 on the subject line. Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–ISE–2009–59. This file number should be included on the subject line if email 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, 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–2009–59 and should be submitted on or before September 16, 2009. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.15 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–20540 Filed 8–25–09; 8:45 am] VerDate Nov<24>2008 17:05 Aug 25, 2009 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–60528; File No. SR–MSRB– 2009–13] Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Notice of Filing and Immediate Effectiveness of Amendment to Rule A–14, on Annual Fee August 18, 2009. 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 13, 2009, the Municipal Securities Rulemaking Board (‘‘MSRB’’ or ‘‘Board’’), 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 the MSRB. The MSRB has designated the proposed rule change as changing a fee applicable to brokers, dealers and municipal securities dealers 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 MSRB is filing an amendment to Rule A–14, which provides for an annual fee paid by dealers to the MSRB. The MSRB is amending the rule to increase the annual fee paid by dealers from $300 to $500. The text of the proposed rule change is available on the MSRB’s Web site at https:// www.msrb.org/msrb1/sec.asp, at the MSRB’s principal office, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the MSRB 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 MSRB has prepared summaries, set forth in 1 15 BILLING CODE 8010–01–P 12 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). 2 17 15 17 Jkt 217001 PO 00000 CFR 200.30–3(a)(12). Frm 00112 Fmt 4703 Sfmt 4703 43205 E:\FR\FM\26AUN1.SGM 26AUN1

Agencies

[Federal Register Volume 74, Number 164 (Wednesday, August 26, 2009)]
[Notices]
[Pages 43204-43205]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-20540]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60536; File No. SR-ISE-2009-59]


Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change Relating to Fee Changes and an Incentive Plan for Three Foreign 
Currency Options

August 19, 2009.
    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 August 3, 2009, the International Securities Exchange, LLC (the 
``Exchange'' or the ``ISE'') 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 self-
regulatory organization. ISE has designated this proposal as one 
establishing or changing a due, fee, or other charge applicable only to 
a member 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 initiate an incentive plan for market 
makers in three newly listed foreign currency options (``FX Options'') 
and to establish fees for transactions in these FX Options. The text of 
the proposed rule change is available on the Exchange's Web site 
(https://www.ise.com), at the principal office of the Exchange, and at 
the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
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 self-regulatory organization 
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 purpose of this proposed rule change is to initiate an 
incentive plan for market makers on three newly listed FX Options, 
specifically, the New Zealand dollar (``NZD''), the Mexican peso 
(``PZO'') and the Swedish krona (``SKA'') \5\ and to establish fees for 
transactions in these products. Options on NZD, PZO and SKA began 
trading on the Exchange on August 3, 2009. As such, this proposed fee 
change will be operative and effective on August 3, 2009.
---------------------------------------------------------------------------

    \5\ The Commission previously approved the trading of options on 
NZD, PZO and SKA. See Securities Exchange Act Release No. 55575 
(April 3, 2007), 72 FR 17963 (April 10, 2007) (Order approving the 
listing and trading of FX Options).
---------------------------------------------------------------------------

    In order to promote trading in these new FX Options, the Exchange 
proposes to initiate an incentive plan for market makers in NZD, PZO 
and SKA. Market makers will be able to enter into the incentive plan 
until October 5, 2009. Participants in the incentive plan are known on 
the Exchange's Schedule of Fees as Early Adopter Market Makers. Under 
the incentive plan, the Exchange will waive the applicable transaction 
fees for both the Early Adopter FXPMM \6\ and all Early Adopter FXCMMs 
\7\ that make a market in NZD, PZO and SKA for as long as the incentive 
plan is in effect. Further, pursuant to a revenue sharing agreement 
entered into between an Early Adopter Market Maker and ISE, the 
Exchange will pay the Early Adopter FXPMM forty percent (40%) of the 
transaction fees collected on any customer trade in NZD, PZO and SKA 
and will pay up to ten (10) Early Adopter FXCMMs that participate in 
the incentive plan twenty percent (20%) of the transaction fees 
collected for trades between a customer and that FXCMM. Market makers 
that do not participate in the incentive plan, i.e., market makers that 
begin to quote and trade in NZD, PZO and SKA after October 5, 2009, 
will be charged regular transaction fees for trades in these products.
---------------------------------------------------------------------------

    \6\ A FXPMM is a primary market maker selected by the Exchange 
that trades and quotes in FX Options only. See ISE Rule 2213.
    \7\ A FXCMM is a competitive market maker selected by the 
Exchange that trades and quotes in FX Options only. See ISE Rule 
2213.
---------------------------------------------------------------------------

    The Exchange is proposing to adopt an execution fee of $0.40 per 
contract for all Public Customer transactions in options on NZD, PZO 
and SKA.\8\ The amount of the execution fee for all Firm Proprietary 
transactions will be $0.20 per contract and the execution fee for all 
non-Early Adopter ISE Market Makers in NZD, PZO and SKA shall be equal 
to the execution fee currently charged by the Exchange for ISE Market 
Maker transactions in equity options.\9\ Finally, the amount of the 
execution fee for all non-ISE Market Maker transactions in these 
products shall be $0.45 per contract.\10\ The Exchange will not charge 
a Payment for Order Flow fee for these products.
---------------------------------------------------------------------------

    \8\ These fees will be charged only to Exchange members. Under a 
pilot program that is set to expire on July 31, 2010, these fees 
will also be charged to Linkage Principal Orders (``Linkage P 
Orders'') and Linkage Principal Acting as Agent Orders (``Linkage P/
A Orders''). The amount of the execution fee charged by the Exchange 
for Linkage P Orders and Linkage P/A Orders is $0.27 per contract 
side and $0.18 per contract side, respectively. See Securities 
Exchange Act Release No. 60175 (June 25, 2009), 74 FR 32026 (July 6, 
2009) (SR-ISE-2009-36).
    \9\ The Exchange applies a sliding scale, between $0.01 and 
$0.18 per contract side, based on the number of contracts an ISE 
market maker trades in a month.
    \10\ The amount of the execution fee for non-ISE Market Maker 
transactions executed in the Exchange's Facilitation and 
Solicitation Mechanisms is $0.20 per contract.
---------------------------------------------------------------------------

    The Exchange also [sic] proposes to waive transaction charges for 
all Early Adopter Market Makers in NZD, PZO and SKA in order to further 
encourage the trading of these FX Options. The Exchange believes that 
the revenue generated from customer, firm proprietary and non-ISE 
market maker transaction charges and increased order flow would offset 
the transaction fees that would otherwise be applied to market makers 
in NZD, PZO and SKA, thereby allowing the Exchange to recoup those fees 
while increasing order flow and generating increased revenues.
    The Exchange believes the proposed rule change will further the 
Exchange's

[[Page 43205]]

goal of introducing new products to the marketplace that are 
competitively priced.
2. Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\11\ in general, and 
furthers the objectives of Section 6(b)(4),\12\ in particular, in that 
it is designed to provide for the equitable allocation of reasonable 
dues, fees and other charges among its members and other persons using 
its facilities. The Exchange believes that the proposed incentive plan 
will generate additional order flow to the Exchange by creating 
incentives to trade these FX Options as well as defray operational 
costs for Early Adopter Market Makers.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78f(b).
    \12\ 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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3) of the Act \13\ and Rule 19b-4(f)(2) \14\ thereunder. At any 
time within 60 days of the filing of such 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.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(3)(A). [sic]
    \14\ 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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-ISE-2009-59 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-ISE-2009-59. This file 
number should be included on the subject line if email 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, 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-2009-59 and should be 
submitted on or before September 16, 2009.
---------------------------------------------------------------------------

    \15\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-20540 Filed 8-25-09; 8:45 am]
BILLING CODE 8010-01-P
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