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, 2913-2914 [2010-818]

Download as PDF Federal Register / Vol. 75, No. 11 / Tuesday, January 19, 2010 / 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. 34–61334; File No. SR–ISE– 2009–115] 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 January 12, 2010. 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 December 31, 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. 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 foreign currency options (‘‘FX Options’’). The text of the proposed rule change is available on the Exchange’s Web site (https://www.ise.com), on the Commission’s Web site at https:// www.sec.gov, at the principal office of the Exchange, and at the Commission’s Public Reference Room. jlentini on DSKJ8SOYB1PROD 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 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. 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Nov<24>2008 16:28 Jan 15, 2010 Jkt 220001 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 Exchange subsequently extended the date by which market makers may join the incentive plan.5 The purpose of this proposed rule change is to again extend the date by which market makers may join the incentive plan. 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 6 FXPMM 7 and all Early Adopter FXCMMs 8 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 are required to enter into the incentive plan no later than December 31, 2009. The Exchange now proposes to extend the 3 The Commission previously approved the trading of options on NZD, PZO and SKA. See Exchange Act Release No. 34–55575 [sic] (April 3, 2007), 72 FR 17963 (April 10, 2007) (Order approving the listing and trading of FX Options). 4 See 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 See Exchange Act Release No. 34–60810 [sic] (October 9, 2009), 74 FR 53527 (October 19, 2009) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to a Market Maker Incentive Plan for Foreign Currency Options). 6 Participants in the incentive plan are known on the Exchange’s Schedule of Fees as Early Adopter Market Makers. 7 A FXPMM is a primary market maker selected by the Exchange that trades and quotes in FX Options only. See ISE Rule 2213. 8 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 00070 Fmt 4703 Sfmt 4703 2913 date by which market makers may enter into the incentive plan to March 31, 2010. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 of the Act,9 in general, and furthers the objectives of Section 6(b)(4),10 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 the Act 11 and Rule 19b–4(f)(2) 12 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 proposal is consistent with the Act. Comments may be submitted by any of the following methods: 9 15 U.S.C. 78f(b). U.S.C. 78f(b)(4). 11 15 U.S.C. 78s(b)(3)(A). 12 17 CFR 19b–4(f)(2). 10 15 E:\FR\FM\19JAN1.SGM 19JAN1 2914 Federal Register / Vol. 75, No. 11 / Tuesday, January 19, 2010 / 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–ISE–2009–115 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. jlentini on DSKJ8SOYB1PROD with NOTICES All submissions should refer to File No. SR–ISE–2009–115. 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 changes between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission’s Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of ISE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File No. SR–ISE–2009–115 and should be submitted on or before February 9, 2010. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–818 Filed 1–15–10; 8:45 am] SECURITIES AND EXCHANGE COMMISSION [Release No. 34–61322; File No. SR–CHX– 2010–01] Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Implement a Tiered Fee Schedule January 11, 2010. 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 January 4, 2010, the Chicago Stock Exchange, Inc. (‘‘CHX’’ 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. CHX 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 The CHX proposes to amend its Schedule of Participant Fees and Assessments (the ‘‘Fee Schedule’’), effective January 4, 2010, to implement a tiered rate of fees when removing or providing liquidity on the Exchange. The text of the proposed rule change is available on the Exchange’s Web site at https://www.chx.com/rules/ proposed_rules.htm, on the Commission’s Web site at https:// www.sec.gov, at CHX, 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. BILLING CODE 8011–01–P 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 13 17 CFR 200.30–3(a)(12). VerDate Nov<24>2008 16:28 Jan 15, 2010 Jkt 220001 PO 00000 Frm 00071 Fmt 4703 Sfmt 4703 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Through this filing, the Exchange would amend its Fee Schedule, effective January 4, 2010, to provide for a tiered schedule of fees and rebates for Participants for trade executions of single-sided orders in securities priced over $1 in the event that certain volume thresholds are achieved. The volume thresholds are based on the Participant’s Average Daily Volume (‘‘ADV’’), which is determined, with respect to a given Participant, by the number of shares such Participant has executed as a liquidity provider in any and all trading sessions on average per trading day (excluding partial trading days) across all tapes on the trading facilities of the CHX (excluding all cross transactions) for the calendar month in which the executions occurred. According to this proposal, a Participant entering a single-sided (i.e., not a cross order type) order in Tape A and C securities would be charged a fee of $0.003/share when removing liquidity from the Matching System if its monthly ADV (as defined above) is 500,000 shares or less. Such Participants would also receive a rebate of $0.0026/ share when they provided liquidity to the Matching System. Participants which had a monthly ADV of greater than 500,000 up to and including 5,000,000 shares would be charged a fee of $0.0029 when removing liquidity. Participants falling into this category would also receive a rebate of $0.0028/ share when providing liquidity to the Matching System. Finally, Participants which had a monthly ADV of greater than 5,000,000 shares would pay a fee of $0.0028 when removing liquidity from the Matching System and a rebate of $0.003 when they provided liquidity. For Tape B securities, a Participant entering a single-sided (i.e., not a cross order type) order would be charged a fee of $0.003/share when removing liquidity from the Matching System if its monthly ADV is 500,000 shares or less. Such Participants would also receive a rebate of $0.0028/share when they provided liquidity to the Matching System. Participants which had a monthly ADV of greater than 500,000 up to and including 5,000,000 shares would be charged a fee of $0.0029 when removing liquidity. Participants falling into this category would also receive a rebate of $0.003/share when providing liquidity to the Matching System. Finally, Participants which had a monthly ADV greater than 5,000,000 E:\FR\FM\19JAN1.SGM 19JAN1

Agencies

[Federal Register Volume 75, Number 11 (Tuesday, January 19, 2010)]
[Notices]
[Pages 2913-2914]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-818]



[[Page 2913]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61334; File No. SR-ISE-2009-115]


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

January 12, 2010.
    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 December 31, 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. 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 foreign currency options (``FX Options''). The text of the 
proposed rule change is available on the Exchange's Web site (https://www.ise.com), on the Commission's Web site at https://www.sec.gov, 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
    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 Exchange subsequently extended the 
date by which market makers may join the incentive plan.\5\ The purpose 
of this proposed rule change is to again extend the date by which 
market makers may join the incentive plan.
---------------------------------------------------------------------------

    \3\ The Commission previously approved the trading of options on 
NZD, PZO and SKA. See Exchange Act Release No. 34-55575 [sic] (April 
3, 2007), 72 FR 17963 (April 10, 2007) (Order approving the listing 
and trading of FX Options).
    \4\ See 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\ See Exchange Act Release No. 34-60810 [sic] (October 9, 
2009), 74 FR 53527 (October 19, 2009) (Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change Relating to a Market 
Maker Incentive Plan for 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 \6\ FXPMM \7\ and all Early Adopter FXCMMs 
\8\ 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 are required to enter into the incentive plan no 
later than December 31, 2009. The Exchange now proposes to extend the 
date by which market makers may enter into the incentive plan to March 
31, 2010.
---------------------------------------------------------------------------

    \6\ Participants in the incentive plan are known on the 
Exchange's Schedule of Fees as Early Adopter Market Makers.
    \7\ A FXPMM is a primary market maker selected by the Exchange 
that trades and quotes in FX Options only. See ISE Rule 2213.
    \8\ A FXCMM is a competitive market maker selected by the 
Exchange that trades and quotes in FX Options only. See ISE Rule 
2213.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\9\ in general, and 
furthers the objectives of Section 6(b)(4),\10\ 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.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 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 \11\ and Rule 19b-4(f)(2) \12\ 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.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 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 proposal is 
consistent with the Act. Comments may be submitted by any of the 
following methods:

[[Page 2914]]

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 No. SR-ISE-2009-115 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 No. SR-ISE-2009-115. 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 changes between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for inspection and 
copying in the Commission's Public Reference Room, 100 F Street, NE., 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of such filing also will be available for 
inspection and copying at the principal office of ISE. All comments 
received will be posted without change; the Commission does not edit 
personal identifying information from submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File No. SR-ISE-2009-115 and should be 
submitted on or before February 9, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-818 Filed 1-15-10; 8:45 am]
BILLING CODE 8011-01-P
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