Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Qualification Standards for Market Makers To Receive a Rebate for Adding Liquidity, 34499-34501 [2010-14676]

Download as PDF Federal Register / Vol. 75, No. 116 / Thursday, June 17, 2010 / Notices impediments to and perfect the mechanism of a free and open market and a national market system and, in general, to protect investors and the public interest. The proposed rule change also is designed to support the principles of Section 11A(a)(1) 7 of the Act in that it seeks to assure fair competition among brokers and dealers and among exchange markets. The Exchange believes that the proposed amendments provide the Exchange with the necessary tools to ensure a fair and orderly reopening of a security following a market-wide Trading Pause. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will 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 No written comments were solicited or received with respect to the proposed rule change. mstockstill on DSKH9S0YB1PROD with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 8 and Rule 19b–4(f)(6) thereunder.9 Because the proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative prior to 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b–4(f)(6)(iii) thereunder. A proposed rule change filed under Rule 19b–4(f)(6) 10 normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b4(f)(6)(iii),11 the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that 7 15 U.S.C. 78k–1(a)(1). U.S.C. 78s(b)(3)(A)(iii). 9 17 CFR 240.19b–4(f)(6). 10 17 CFR 240.19b–4(f)(6). 11 17 CFR 240.19b–4(f)(6)(iii). VerDate Mar<15>2010 16:13 Jun 16, 2010 the proposal may become operative immediately upon filing. The Commission notes that the proposed rule change is clarifying how the Exchange handles Trading Pauses in the case of an early scheduled closing of the Exchange, and how indications will be published during all Trading Pauses. The proposed rule change does not raise any new substantive issues. For these reasons, the Commission believes that the waiver of the 30-day operative date is consistent with the protection of investors and the public interest.12 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. 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 Web site viewing and copying in the Commission’s Public Reference Section, 100 F Street, NE., Washington, DC 20549–1090. Copies of the filing will also be available for inspection and copying at the NYSE’s principal office and on its Internet Web site at https://www.nyse.com. 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–NYSE–2010–45 and should be submitted on or before July 8, 2010. 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: For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Florence E. Harmon, Deputy Secretary. 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–NYSE–2010–45 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–NYSE–2010–45. 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 12 For purposes only of waiving the 30-day operative delay of this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition and capital formation. 15 U.S.C. 78c(f). 8 15 Jkt 220001 34499 PO 00000 Frm 00082 Fmt 4703 Sfmt 4703 [FR Doc. 2010–14670 Filed 6–16–10; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–62282; File No. SR–ISE– 2010–54] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Qualification Standards for Market Makers To Receive a Rebate for Adding Liquidity June 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 May 26, 2010, the International Securities Exchange, LLC (the ‘‘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. 13 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\17JNN1.SGM 17JNN1 34500 Federal Register / Vol. 75, No. 116 / Thursday, June 17, 2010 / Notices I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The ISE is proposing to amend the qualification standards for market makers to receive a rebate under the Exchange’s maker/taker pricing program. 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, at the Commission’s Public Reference Room, and on the Commission’s Web site at https://www.sec.gov. 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 amend the qualification standards for market makers to receive a rebate under the Exchange’s maker/ taker pricing program. The Exchange recently adopted transaction fees and rebates for adding and removing liquidity (‘‘maker/taker fees’’).3 The maker/taker fees currently apply to trading in a select number of options classes 4 to the following categories of market participants: (i) Market Maker; (ii) Market Maker Plus; (iii) Non-ISE Market Maker; 5 (iv) Firm Proprietary; (v) Customer (Professional); 6 (vi) Priority Customer,7 100 or more mstockstill on DSKH9S0YB1PROD with NOTICES 3 See Securities Exchange Act Release Nos. 61869 (April 7, 2010), 75 FR 19449 (April 14, 2010); and 62048 (May 6, 2010), 75 FR 26830 (May 12, 2010). 4 As of May 3, 2010, the following options classes were subject to maker/taker fees: QQQQ, BAC, C, SPY, IWM, XLF, AAPL, GE, JPM, INTC, GS, RIMM, T, VZ, UNG, FCX, CSCO, DIA, AMZN and X. 5 A Non-ISE Market Maker, or Far Away Market Maker (‘‘FARMM’’), is a market maker as defined in Section 3(a)(38) of the Securities Exchange Act of 1934, as amended (‘‘Exchange Act’’), registered in the same options class on another options exchange. 6 A Customer (Professional) is a person who is not a broker/dealer and is not a Priority Customer. 7 A Priority Customer is defined in ISE Rule 100(a)(37A) as a person or entity that is not a VerDate Mar<15>2010 16:13 Jun 16, 2010 Jkt 220001 contracts; and (vii) Priority Customer, less than 100 contracts. In order to promote and encourage liquidity in options classes that are subject to maker/taker fees, the Exchange currently offers a $0.10 per contract rebate for Market Maker Plus orders sent to the Exchange.8 A Market Maker Plus is currently defined by the Exchange as a market maker who is on the National Best Bid or National Best Offer 80% of the time in that symbol during the current trading month for series trading between $0.03 and $5.00 in premium. The Exchange now proposes to amend the qualification standards in order for a market maker to qualify for the $0.10 per contract rebate. Specifically, the Exchange proposes to define a Market Maker Plus as a market maker who is on the National Best Bid or National Best Offer 80% of the time for series trading between $0.03 and $5.00 in premium in each of the front two expiration months and 80% of the time for all series trading between $0.03 and $5.00 in premium for all expiration months for that symbol during the current trading month. The Exchange currently determines whether a market maker qualifies as a Market Maker Plus at the end of each month by looking back at each market maker’s quoting statistics during that month. If at the end of the month, a market maker meets the current 80% criteria, the Exchange rebates $0.10 per contract for transactions executed by that market maker during that month. The Exchange will continue to monitor each market maker’s quoting statistics to determine whether a market maker qualifies for a rebate under the standards proposed herein. The Exchange also currently provides market makers a report on a daily basis with quoting statistics so that market makers can determine whether or not they are meeting the 80% criteria. Again, the Exchange will continue to provide market makers a daily report so that market makers can determine broker/dealer in securities, and does not place more than 390 orders in listed options per day on average during a calendar month for its own beneficial account(s). 8 The concept of incenting market makers with a rebate is not novel. In 2008, the CBOE established a program for its Hybrid Agency Liaison whereby it provides a $0.20 per contact rebate to its market makers provided that at least 80% of the market maker’s quotes in a class during a month are on one side of the national best bid or offer. Market makers not meeting CBOE’s criteria are not eligible to receive a rebate. See Securities Exchange Act Release No. 57231 (January 30, 2008), 73 FR 6752 (February 5, 2008). The CBOE has since lowered the criteria from 80% to 60%. See Securities Exchange Act Release No. 57470 (March 11, 2008), 73 FR 14514 (March 18, 2008). PO 00000 Frm 00083 Fmt 4703 Sfmt 4703 whether or not they are meeting the Exchange’s new quoting requirement to qualify for a rebate. The Exchange believes the proposed rule change will encourage market makers to post tighter markets in the options classes that are subject to maker/taker fees and thereby increase liquidity and attract order flow to the Exchange. The Exchange has designated this proposal to be operative on June 1, 2010. 2. Statutory Basis The basis under the Exchange Act for this proposed rule change is the requirement under Section 6(b)(4) that an exchange have an equitable allocation of reasonable dues, fees and other charges among its members and other persons using its facilities. The impact of the proposal upon the net fees paid by a particular market participant will depend on a number of variables, most important of which will be its propensity to add or remove liquidity in the options classes that are subject to the Exchange’s maker/taker fees. The Exchange operates in a highly competitive market in which market participants can readily direct order flow to another exchange if they deem fee levels at a particular exchange to be excessive. The Exchange believes that the fees it charges for options classes that are subject to the Exchange’s maker/taker fees remain competitive with fees charged by other exchanges and therefore continue to be reasonable and equitably allocated to those members that opt to direct orders to the Exchange rather than to a competing exchange. The Exchange further believes that amending the qualification standards for market makers to qualify for a rebate will encourage these market participants to post tighter markets in the options classes that are subject to the Exchange’s maker/taker fees and thereby increase liquidity and attract order flow to the Exchange. 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 E:\FR\FM\17JNN1.SGM 17JNN1 Federal Register / Vol. 75, No. 116 / Thursday, June 17, 2010 / Notices 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 9 and Rule 19b 4(f)(2) 10 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: mstockstill on DSKH9S0YB1PROD 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–2010–54 on the subject line. Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–ISE–2010–54. 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 Web site viewing and printing in the Commission’s Public 9 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(2). 10 17 VerDate Mar<15>2010 16:13 Jun 16, 2010 Jkt 220001 34501 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 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 publicly available. All submissions should refer to File Number SR–ISE– 2010–54 and should be submitted on or before July 8, 2010. 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. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.11 Florence E. Harmon, Deputy Secretary. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change [FR Doc. 2010–14676 Filed 6–16–10; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–62283; File No. SR– NYSEAMEX–2010–56] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NYSE Amex LLC Amending NYSE Amex Equities Rule 80C To Clarify Reopening Procedures June 11, 2010. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that on June 10, 2010, NYSE Amex LLC (the ‘‘Exchange’’ or ‘‘NYSE Amex’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II 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. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend NYSE Amex Equities Rule 80C to clarify reopening procedures. The text of the proposed rule change is available at the Exchange, the Commission’s Public Reference Room, and https:// www.nyse.com. 11 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. PO 00000 Frm 00084 Fmt 4703 Sfmt 4703 1. Purpose The Exchange proposes to amend NYSE Amex Equities Rule 80C to clarify the procedures applicable during a Trading Pause for the reopening of a security on the Exchange following the invocation of a Trading Pause.4 Rule 80C was approved by the Commission on June 10, 2010.5 Currently, Rule 80C states that indications ‘‘shall’’ be published as close to the beginning of the Trading Pause as possible and should be updated. While the clause ‘‘as possible’’ is intended to provide for those circumstances where it is not feasible to publish an indication prior to a reopening, to avoid confusion, the Exchange believes that section (b)(i) of the Rule should be clarified to state instead that indications may be published to the Consolidated Tape during a Trading Pause. The rule would be further amended to clarify that Floor Official approval is not required before publishing an indication, an indication does not need to be updated before reopening the security, and the security may reopen outside any prior indication. The Exchange also proposes to add a subsection to Rule 80C(b) to clarify that Floor Official approval under Rule 79A.20 is not required when reopening a security following a Trading Pause. The Exchange believes that these clarifications are necessary to avoid inconsistent regulatory obligations. Similar in concept to Rule 48, which suspends the requirements for published indications or Floor Official approval during a market-wide volatility 4 The Exchange notes that parallel changes are proposed to be made to the rules of the NYSE Exchange. See Securities Exchange Act Release No. 62284 (June 11, 2010) (SR–NYSE–2010–45). 5 See Securities Exchange Act Release No. 62252 (June 10, 2010). E:\FR\FM\17JNN1.SGM 17JNN1

Agencies

[Federal Register Volume 75, Number 116 (Thursday, June 17, 2010)]
[Notices]
[Pages 34499-34501]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-14676]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62282; File No. SR-ISE-2010-54]


Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule 
Change To Amend the Qualification Standards for Market Makers To 
Receive a Rebate for Adding Liquidity

June 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 May 26, 2010, the International Securities Exchange, LLC (the 
``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.

---------------------------------------------------------------------------

[[Page 34500]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The ISE is proposing to amend the qualification standards for 
market makers to receive a rebate under the Exchange's maker/taker 
pricing program. 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, at the Commission's Public Reference Room, and on the 
Commission's Web site at https://www.sec.gov.

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 amend the 
qualification standards for market makers to receive a rebate under the 
Exchange's maker/taker pricing program. The Exchange recently adopted 
transaction fees and rebates for adding and removing liquidity 
(``maker/taker fees'').\3\ The maker/taker fees currently apply to 
trading in a select number of options classes \4\ to the following 
categories of market participants: (i) Market Maker; (ii) Market Maker 
Plus; (iii) Non-ISE Market Maker; \5\ (iv) Firm Proprietary; (v) 
Customer (Professional); \6\ (vi) Priority Customer,\7\ 100 or more 
contracts; and (vii) Priority Customer, less than 100 contracts.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release Nos. 61869 (April 7, 
2010), 75 FR 19449 (April 14, 2010); and 62048 (May 6, 2010), 75 FR 
26830 (May 12, 2010).
    \4\ As of May 3, 2010, the following options classes were 
subject to maker/taker fees: QQQQ, BAC, C, SPY, IWM, XLF, AAPL, GE, 
JPM, INTC, GS, RIMM, T, VZ, UNG, FCX, CSCO, DIA, AMZN and X.
    \5\ A Non-ISE Market Maker, or Far Away Market Maker 
(``FARMM''), is a market maker as defined in Section 3(a)(38) of the 
Securities Exchange Act of 1934, as amended (``Exchange Act''), 
registered in the same options class on another options exchange.
    \6\ A Customer (Professional) is a person who is not a broker/
dealer and is not a Priority Customer.
    \7\ A Priority Customer is defined in ISE Rule 100(a)(37A) as a 
person or entity that is not a broker/dealer in securities, and does 
not place more than 390 orders in listed options per day on average 
during a calendar month for its own beneficial account(s).
---------------------------------------------------------------------------

    In order to promote and encourage liquidity in options classes that 
are subject to maker/taker fees, the Exchange currently offers a $0.10 
per contract rebate for Market Maker Plus orders sent to the 
Exchange.\8\ A Market Maker Plus is currently defined by the Exchange 
as a market maker who is on the National Best Bid or National Best 
Offer 80% of the time in that symbol during the current trading month 
for series trading between $0.03 and $5.00 in premium.
---------------------------------------------------------------------------

    \8\ The concept of incenting market makers with a rebate is not 
novel. In 2008, the CBOE established a program for its Hybrid Agency 
Liaison whereby it provides a $0.20 per contact rebate to its market 
makers provided that at least 80% of the market maker's quotes in a 
class during a month are on one side of the national best bid or 
offer. Market makers not meeting CBOE's criteria are not eligible to 
receive a rebate. See Securities Exchange Act Release No. 57231 
(January 30, 2008), 73 FR 6752 (February 5, 2008). The CBOE has 
since lowered the criteria from 80% to 60%. See Securities Exchange 
Act Release No. 57470 (March 11, 2008), 73 FR 14514 (March 18, 
2008).
---------------------------------------------------------------------------

    The Exchange now proposes to amend the qualification standards in 
order for a market maker to qualify for the $0.10 per contract rebate. 
Specifically, the Exchange proposes to define a Market Maker Plus as a 
market maker who is on the National Best Bid or National Best Offer 80% 
of the time for series trading between $0.03 and $5.00 in premium in 
each of the front two expiration months and 80% of the time for all 
series trading between $0.03 and $5.00 in premium for all expiration 
months for that symbol during the current trading month.
    The Exchange currently determines whether a market maker qualifies 
as a Market Maker Plus at the end of each month by looking back at each 
market maker's quoting statistics during that month. If at the end of 
the month, a market maker meets the current 80% criteria, the Exchange 
rebates $0.10 per contract for transactions executed by that market 
maker during that month. The Exchange will continue to monitor each 
market maker's quoting statistics to determine whether a market maker 
qualifies for a rebate under the standards proposed herein.
    The Exchange also currently provides market makers a report on a 
daily basis with quoting statistics so that market makers can determine 
whether or not they are meeting the 80% criteria. Again, the Exchange 
will continue to provide market makers a daily report so that market 
makers can determine whether or not they are meeting the Exchange's new 
quoting requirement to qualify for a rebate.
    The Exchange believes the proposed rule change will encourage 
market makers to post tighter markets in the options classes that are 
subject to maker/taker fees and thereby increase liquidity and attract 
order flow to the Exchange.
    The Exchange has designated this proposal to be operative on June 
1, 2010.
2. Statutory Basis
    The basis under the Exchange Act for this proposed rule change is 
the requirement under Section 6(b)(4) that an exchange have an 
equitable allocation of reasonable dues, fees and other charges among 
its members and other persons using its facilities. The impact of the 
proposal upon the net fees paid by a particular market participant will 
depend on a number of variables, most important of which will be its 
propensity to add or remove liquidity in the options classes that are 
subject to the Exchange's maker/taker fees. The Exchange operates in a 
highly competitive market in which market participants can readily 
direct order flow to another exchange if they deem fee levels at a 
particular exchange to be excessive. The Exchange believes that the 
fees it charges for options classes that are subject to the Exchange's 
maker/taker fees remain competitive with fees charged by other 
exchanges and therefore continue to be reasonable and equitably 
allocated to those members that opt to direct orders to the Exchange 
rather than to a competing exchange. The Exchange further believes that 
amending the qualification standards for market makers to qualify for a 
rebate will encourage these market participants to post tighter markets 
in the options classes that are subject to the Exchange's maker/taker 
fees and thereby increase liquidity and attract order flow to the 
Exchange.

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

[[Page 34501]]

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 \9\ and Rule 19b 4(f)(2) \10\ 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.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 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-2010-54 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-ISE-2010-54. 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 Web site viewing and 
printing 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 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 publicly available. All 
submissions should refer to File Number SR-ISE-2010-54 and should be 
submitted on or before July 8, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
Florence E. Harmon,
Deputy Secretary.
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

[FR Doc. 2010-14676 Filed 6-16-10; 8:45 am]
BILLING CODE 8010-01-P
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