[Federal Register Volume 66, Number 223 (Monday, November 19, 2001)]
[Notices]
[Pages 57995-57996]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-28773]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45049; File No. SR-ISE-2001-28]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the International Securities 
Exchange LLC Exempting Complex Orders From Payment-for-Order Flow and 
Marketing Fees

November 9, 2001.
    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

[[Page 57996]]

23, 2001, the International Securities Exchange LLC (``Exchange'' or 
``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 ISE is proposing to amend its payment-for-order-flow and 
marketing fees to exempt transactions involving ``Complex Orders.''

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 ISE 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 exempt trades in 
``Complex Orders'' from the Exchange's payment-for-order-flow and 
marketing fees. ``Complex Orders'' include, among other things, 
``spread'' transactions.\3\ These trades are executed on thin profit 
margins, and the Exchange believes that imposing the payment-for-order-
flow and marketing fees on these trades will adversely affect its 
ability to attract this type of order flow.
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    \3\ The Exchange defines ``Complex Orders'' in ISE Rule 722(a). 
See Exchange Act Release No. 44955 (October 18, 2001), 66 FR 53819 
(October 24, 2001).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) of the Act \4\ and furthers the objectives of section 
6(b)(4) \5\ because it is an equitable allocation of reasonable fees 
among the Exchange's members.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(4).
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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

    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 upon filing with the 
Commission because the Exchange has designated the proposed rule change 
as a fee change pursuant to section 19(b)(3)(A)(ii) of the Act \6\ and 
Rule 19b-4(f)(2) thereunder.\7\ 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.
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    \6\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \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 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 
ISE. All submissions should refer to File No. SR-ISE-2001-28 and should 
be submitted by December 10, 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. 01-28773 Filed 11-16-01; 8:45 am]
BILLING CODE 8010-01-M