[Federal Register Volume 65, Number 243 (Monday, December 18, 2000)]
[Notices]
[Pages 79142-79143]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-32116]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43704; File No. SR-ISE-00-12]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto by 
the International Securities Exchange LLC, Relating to Fee Changes

December 11, 2000.
    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 November 15, 2000, 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 
Exchange. On December 7, 2000, ISE submitted Amendment No. 1 to the 
proposed rule change.\3\ The Commission is publishing this notice to 
solicit comments on the proposed rule change, as amended, from 
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ In Amendment No. 1, the Exchange amended the proposed rule 
change to delete a fee related to inactive memberships, as well as 
delete a minimum monthly bin fee. These fees are addressed in a 
separate filing, SR-ISE-00-26. See letter from Michael Simon, Senior 
Vice President and General Counsel, ISE, to Nancy Sanow, Assistant 
Director, Division of Market Regulation, Commission, dated December 
6, 2000 (``Amendment No. 1'').
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The Exchange is proposing changes to its fees regarding: (i) 
Customer transactions; (ii) multiple ``Click'' order entry terminals; 
(iii) ``enhanced cabinets''; and (iv) continuing registration and 
transfer fees for associated persons. The text of the proposed rule 
change is available at the Office of the Secretary, the Exchange, and 
at the Commission.

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 ISE 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 the proposed rule change is to effect the following 
changes to the ISE's fees:
    Customer Transaction Fees: The ISE currently waives customer 
transaction fees. This waiver will expire on November 26, 2000. The 
Exchange proposes extending this waiver for an additional six months.
    Click Terminals: The Exchange imposes fees on ``Click'' order entry 
devices (used by Electronic Access Members) of: (i) $500 per terminal 
for up to five terminals and $250 for additional terminals; and (ii) 
$250 per application program interface (``API'') associated with a 
terminal for up to five APIs and $100 for additional APIs. To encourage 
members to send order flow to the Exchange, the ISE proposes to 
eliminate Click and API fees for a member's third and subsequent 
terminal if the member has an average daily volume (``ADV'') on the 
Exchange of 500 customer or firm proprietary contracts per ``free'' 
terminal.\4\
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    \4\ Assume a member has 10 Click terminals. With ADV of 4,000 
contracts per month (500 contracts per terminal on the eight 
potentially ``free'' terminals), it would pay Click and API fees for 
the first two terminals, with the fees for the other eight terminals 
waived. With ADV of 3,500 contracts, the members would qualify for 
an exemption on all but one of the eight terminals.
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    Enhanced Cabinets: Certain market makers have requested that the 
Exchange provide them with an ``enhanced cabinet'' on their premises, 
containing three, rather than the standard two, gateways to the 
Exchange. The Exchange proposes an increase of $250 to the standard fee 
to reflect the incremental cost of the third gateway.
    Associated Persons: The ISE is the only options exchange that does 
not at least partially offset its regulatory costs by levying an annual 
``central registration depository'' fee for members' associated persons 
and for processing the transfer of such persons. The proposed rule 
change would impose the following fees: $30 annual fee and $25 transfer 
fee.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(4) \5\ that the rules of an exchange 
provide for the equitable allocation of reasonable dues, fees and other 
charges among its members and other persons using its facilities.
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    \5\ 15 U.S.C. 78f(b)(4).
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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(A) of the Act\6\ and Rule 19b-4(f)(2) thereunder,\7\ because 
the proposed rule change establishes or changes a due, fee or other 
charge. 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.
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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 19b-4(f)(2).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change, as amended, is consistent with the Act. Persons making written 
submissions should file six copies thereof with the Secretary, 
Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, 
D.C. 20549-0609. 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. Copies of such 
filing will also be available for inspection and copying at the 
principal office of the ISE. All

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submissions should refer to the File No. SR-ISE-00-12 and should be 
submitted by January 8, 2001.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-32116 Filed 12-15-00; 8:45 am]
BILLING CODE 8010-01-M