[Federal Register Volume 65, Number 249 (Wednesday, December 27, 2000)]
[Notices]
[Pages 81944-81945]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-32893]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43738; File No. SR-ISE-00-26]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by International Securities 
Exchange LLC, Relating to Minimum Activity Fees

December 18, 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 December 7, 2000, the International Securities Exchange LLC 
(``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. The Commission is publishing this notice to solicit comments 
on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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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 inactive 
memberships. 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
    Currently not all of the Exchange's Primary Market Maker (``PMM'') 
memberships have begun trading in their assigned group of options 
(``bins''). The Exchange is proposing that PMMs will be subject to a 
$100,000 monthly fee if the PMM has not yet opened the bin for trading. 
Once a bin is opened for trading, there will be a $50,000 per month 
minimum fee per bin. That is, if transaction charges with respect to 
trading in the bid do not total $50,000 per month, the PMM will be 
charged a fee equal to $50,000 minus the actual transaction charges.
    These fees are structured to provide the Exchange with revenue that 
will, in part, help recover revenue lost due to the lack of trading. In 
particular, these fees will help recoup lost transaction and access 
charges. The Exchange will periodically reevaluate these fees to 
maintain the relationship between the amount of the fees and the lost 
revenue being recouped. These fees will become effective on January 1, 
2001.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirements under Sections 6(b)(4) and 6(b)(5) of the Act \3\ that an 
exchange have rules that are designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade, to remove impediments to and perfect the mechanism 
for a free and open market and a national market system, and, in 
general, to protect investors and the public interest, as well as 
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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    \3\ 15 U.S.C. 78f(b)(4)-(5).
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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 \4\ and Rule 19b-4(f)(6) \5\ thereunder because 
the rule change: (1) Does not significantly affect the protection of 
investors or the public interest; (2) does not impose any significant 
burden on competition; and (3) does not become operative for 30 days 
from the date of filing or such shorter time as the Commission may 
designate if consistent with the protection of investors and the public 
interest. In addition, the Exchange provided the Commission with 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change.
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    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \6\ normally 
does not become operative prior to 30 days after the date of filing. 
However, Rule 19b-4(f)(6)(iii) \7\ permits the Commission to designate 
such shorter time if such action is consistent with the protection of 
investors and the public interest. The ISE has requested that the 
Commission accelerate the implementation of the proposed rule change so 
that it may take effect on January 1, 2001. The ISE represented that 
all of the broker-dealers that currently anticipate being subject to 
the proposed fee are represented on ISE's board of directors, voted to 
adopt the proposed fee, and approved its submission to the Commission.
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    \6\ 17 CFR 240.19b-4(f)(6).
    \7\ 17 CFR 240.19b-4(f)(6)(iii).
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    On this basis, the Commission believes that it is consistent with 
the

[[Page 81945]]

protection of investors and the public interest and does not impose any 
significant burden on competition to allow the proposed rule change to 
become operative as of the date of this Order and be implemented on 
January 1, 2001. 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.\8\
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    \8\ For purposes only of accelerating the operative date of this 
proposal, the Commission has considered the proopsed rule's impact 
on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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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 is consistent with the Act. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, NW., Washington, DC 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 
Exchange. All submissions should refer to File No. SR-ISE-00-26 and 
should be submitted by January 17, 2001.
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    \9\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-32893 Filed 12-26-00; 8:45 am]
BILLING CODE 8010-01-M