Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to a Market Maker Incentive Plan for Foreign Currency Options, 53527-53528 [E9-25003]

Download as PDF Federal Register / Vol. 74, No. 200 / Monday, October 19, 2009 / Notices A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change SECURITIES AND EXCHANGE COMMISSION [Release No. 34–60810; File No. SR–ISE– 2009–80] 1. Purpose Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to a Market Maker Incentive Plan for Foreign Currency Options October 9, 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 October 6, 2009, 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. 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 extend an incentive plan for market makers in three recently listed foreign currency options (‘‘FX Options’’) and make clarifying changes regarding 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. sroberts on DSKD5P82C1PROD 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 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Nov<24>2008 16:51 Oct 16, 2009 Jkt 220001 On August 3, 2009, the Exchange began trading options on the New Zealand dollar (‘‘NZD’’), the Mexican peso (‘‘PZO’’) and the Swedish krona (‘‘SKA’’) 3 and adopted an incentive plan applicable to market makers in NZD, PZO and SKA.4 The purpose of this proposed rule change is to extend the date by which market makers may join the incentive plan. The Exchange also proposes to make clarifying changes regarding fees for transactions in these products. In order to promote trading in these FX Options, the Exchange has an incentive plan pursuant to which the Exchange waives the transaction fees for the Early Adopter 5 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 pays the Early Adopter FXPMM forty percent (40%) of the transaction fees collected on any customer trade in NZD, PZO and SKA and pays 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 are charged regular transaction fees for trades in these products. In order to participate in the incentive plan, market makers were required to enter into the incentive plan no later than October 5, 2009. The Exchange now proposes to extend the date by which market makers may enter into the incentive plan to December 31, 2009. 3 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). 4 See Securities Exchange Act Release No. 34– 60536 [sic] (August 19, 2009), 74 FR 43204 (August 26, 2009) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Fee Changes and an Incentive Plan for Three Foreign Currency Options). 5 Participants in the incentive plan are known on the Exchange’s Schedule of Fees as Early Adopter Market Makers. 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 00066 Fmt 4703 Sfmt 4703 53527 Further, the Exchange proposes to make clarifying changes to its Schedule of Fees. In the filing that adopted the incentive plan, the Exchange inadvertently excluded two fee discounts applicable to trading in options on NZD, PZO and SKA. First, for Complex Orders in NZD, PZO and SKA, the Exchange charges a fee only for the leg of the trade consisting of the most contracts. Second, pursuant to a pilot program, transaction fees in all FX Options traded on the Exchange are waived entirely on incremental volume above 5,000 contracts for single-sided orders of at least 5,000 contracts. The Exchange has applied these two fee discounts to trades in NZD, PZO and SKA since these products began trading on the Exchange on August 3, 2009 and now proposes to reflect the applicability of these fee discounts on its Schedule of Fees. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 of the Act,8 in general, and furthers the objectives of Section 6(b)(4),9 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 the proposed rule change will permit additional market makers to join the incentive plan which in turn 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 8 15 9 15 E:\FR\FM\19OCN1.SGM U.S.C. 78f(b). U.S.C. 78f(b)(4). 19OCN1 53528 Federal Register / Vol. 74, No. 200 / Monday, October 19, 2009 / Notices the Act 10 and Rule 19b–4(f)(2) 11 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. 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: sroberts on DSKD5P82C1PROD with 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 Number SR–ISE–2009–80 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–2009–80. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/ rules/sro/shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission’s Public Reference Room, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing will also be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File No. SR–ISE–2009– 80 and should be submitted on or before November 9, 2009. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–25003 Filed 10–16–09; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–60819; File No. SR– NYSEArca–2009–89] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change Relating to Replacement Indexes for PowerShares DB Commodity Index Tracking Fund and PowerShares DB Agriculture Fund October 13, 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 October 8, 2009, NYSE Arca, Inc. (‘‘NYSE Arca’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons and is approving the proposed rule change on an accelerated basis. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Pursuant to the provisions of Section 19(b)(1) of the Act,3 the Exchange, through its wholly owned subsidiary NYSE Arca Equities, Inc. (‘‘NYSE Arca Equities’’), proposes to describe a replacement to the indexes underlying the PowerShares DB Commodity Index Tracking Fund and the PowerShares DB Agriculture Fund, which are listed on the Exchange under Commentary .02 to NYSE Arca Equities Rule 8.200. 12 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(1). 1 15 10 15 11 17 U.S.C. 78s(b)(3)(A) [sic]. CFR 240.19b–4(f)(2). VerDate Nov<24>2008 16:51 Oct 16, 2009 Jkt 220001 PO 00000 Frm 00067 Fmt 4703 Sfmt 4703 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 those 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 parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The PowerShares DB Commodity Index Tracking Fund (‘‘DBC’’) and the PowerShares DB Agriculture Fund (‘‘DBA’’ and together with DBC, the ‘‘Funds’’) 4 are currently listed on the Exchange under Commentary .02 to NYSE Arca Equities Rule 8.200 (‘‘Trust Issued Receipts’’).5 Deutsche Bank AG 4 See Registration Statement on Form S–3 for PowerShares DB Commodity Index Tracking Fund (No. 333–158733, dated April 23, 2009) (‘‘DBC Registration Statement’’) and the Post-Effective Amendment No. 1 to Form S–1 for PowerShares DB Agriculture Fund (No. 333–150501, dated April 15, 2009) (‘‘DBA Registration Statement’’). In addition, the issuer has filed Current Reports on Forms 8–K with respect to DBC (No. 001–32726, filed Sept. 30, 2009) (‘‘DBC Current Report’’) and DBA (No. 001– 33238, filed Sept. 30, 2009) (‘‘DBA Current Report’’) regarding replacement of the indexes underlying the Funds. 5 See Securities Exchange Act Release No. 58993 (November 21, 2008), 73 FR 72548 (November 28, 2008) (SR–NYSEArca–2008–128) (order approving listing on the Exchange of the Funds) (‘‘NYSE Arca Order’’). The Funds were previously traded on the Exchange pursuant to unlisted trading privileges (‘‘UTP’’). See Securities Exchange Act Release Nos. 53736 (April 27, 2006), 71 FR 26582 (May 5, 2006) (SR–PCX–2006–22) (order approving UTP trading of DB Commodity Index Tracking Fund); 55453 (March 13, 2007), 72 FR 13333 (March 21, 2007) (SR–NYSEArca–2006–62) (order approving UTP trading of PowerShares DB Agriculture Fund and other PowerShares commodity-based funds). The Funds were originally approved for listing on the American Stock Exchange LLC (the ‘‘Amex’’, now known as NYSE Amex LLC). See Securities Exchange Act Release Nos. 53105 (January 11, 2006), 71 FR 3129 (January 19, 2006) (SR–Amex– 2005–59) (approving listing of DB Commodity Index Tracking Fund (now known as PowerShares DB Commodity Index Tracking Fund)) (‘‘Amex DBC Order’’); 55029 (December 29, 2006), 72 FR 806 (January 8, 2007) (SR–Amex–2006–76) (approving listing of PowerShares DB Agriculture Fund and other PowerShares commodity-based funds) (‘‘Amex DBA Order’’). See also, Securities Exchange Act Release No. 53858 (May 24, 2006), 71 FR 31232 (June 1, 2006) (SR–Amex–2006–53) (‘‘Supplemental Amex DBC Filing’’, in which the Amex clarified the manner in which the index underlying DBC is maintained by providing that the replacement of expiring futures contracts would be based on E:\FR\FM\19OCN1.SGM 19OCN1

Agencies

[Federal Register Volume 74, Number 200 (Monday, October 19, 2009)]
[Notices]
[Pages 53527-53528]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-25003]



[[Page 53527]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60810; File No. SR-ISE-2009-80]


Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change Relating to a Market Maker Incentive Plan for Foreign Currency 
Options

October 9, 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 October 6, 2009, 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. 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

    The ISE is proposing to extend an incentive plan for market makers 
in three recently listed foreign currency options (``FX Options'') and 
make clarifying changes regarding 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 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
    On August 3, 2009, the Exchange began trading options on the New 
Zealand dollar (``NZD''), the Mexican peso (``PZO'') and the Swedish 
krona (``SKA'') \3\ and adopted an incentive plan applicable to market 
makers in NZD, PZO and SKA.\4\ The purpose of this proposed rule change 
is to extend the date by which market makers may join the incentive 
plan. The Exchange also proposes to make clarifying changes regarding 
fees for transactions in these products.
---------------------------------------------------------------------------

    \3\ 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).
    \4\ See Securities Exchange Act Release No. 34-60536 [sic] 
(August 19, 2009), 74 FR 43204 (August 26, 2009) (Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Relating to Fee 
Changes and an Incentive Plan for Three Foreign Currency Options).
---------------------------------------------------------------------------

    In order to promote trading in these FX Options, the Exchange has 
an incentive plan pursuant to which the Exchange waives the transaction 
fees for the Early Adopter \5\ 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 pays the Early Adopter FXPMM forty percent (40%) of the 
transaction fees collected on any customer trade in NZD, PZO and SKA 
and pays 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 are charged regular transaction fees 
for trades in these products. In order to participate in the incentive 
plan, market makers were required to enter into the incentive plan no 
later than October 5, 2009. The Exchange now proposes to extend the 
date by which market makers may enter into the incentive plan to 
December 31, 2009.
---------------------------------------------------------------------------

    \5\ Participants in the incentive plan are known on the 
Exchange's Schedule of Fees as Early Adopter Market Makers.
    \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.
---------------------------------------------------------------------------

    Further, the Exchange proposes to make clarifying changes to its 
Schedule of Fees. In the filing that adopted the incentive plan, the 
Exchange inadvertently excluded two fee discounts applicable to trading 
in options on NZD, PZO and SKA. First, for Complex Orders in NZD, PZO 
and SKA, the Exchange charges a fee only for the leg of the trade 
consisting of the most contracts. Second, pursuant to a pilot program, 
transaction fees in all FX Options traded on the Exchange are waived 
entirely on incremental volume above 5,000 contracts for single-sided 
orders of at least 5,000 contracts. The Exchange has applied these two 
fee discounts to trades in NZD, PZO and SKA since these products began 
trading on the Exchange on August 3, 2009 and now proposes to reflect 
the applicability of these fee discounts on its Schedule of Fees.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\8\ in general, and 
furthers the objectives of Section 6(b)(4),\9\ 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 the proposed rule change will 
permit additional market makers to join the incentive plan which in 
turn 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.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 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

[[Page 53528]]

the Act \10\ and Rule 19b-4(f)(2) \11\ 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.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A) [sic].
    \11\ 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 e-mail to rule-comments@sec.gov. Please include 
File Number SR-ISE-2009-80 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-2009-80. This file 
number should be included on the subject line if e-mail is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (https://www.sec.gov/rules/sro/shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for inspection and 
copying in the Commission's Public Reference Room, on official business 
days between the hours of 10 a.m. and 3 p.m. Copies of such filing will 
also be available for inspection and copying at the principal office of 
the Exchange. All comments received will be posted without change; the 
Commission does not edit personal identifying information from 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File No. SR-ISE-
2009-80 and should be submitted on or before November 9, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

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

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-25003 Filed 10-16-09; 8:45 am]
BILLING CODE 8011-01-P
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