[Federal Register Volume 67, Number 78 (Tuesday, April 23, 2002)]
[Notices]
[Pages 19786-19787]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-9884]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45765; File No. SR-ISE-2002-10]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the International Securities 
Exchange LLC to Establish a $.10 Surcharge for Non-Customer 
Transactions in Options on Nasdaq Biotech Index iShares

April 16, 2002.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given 
that on April 15, 2002, the International Securities Exchange LLC 
(``ISE'' or ``Exchange'') filed with the Securities and Exchange 
Commission (the ``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 proposes to establish a $.10 surcharge for non-
customer transactions in options on Nasdaq Biotech Index 
iShares.
    The text of the proposed rule change appears below. New text is in 
italics.

                                                                  ISE Schedule of Fees
--------------------------------------------------------------------------------------------------------------------------------------------------------
        Electronic Market Place              Amount                Billable Unit                     Frequency                         Notes
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
                   *                  *                  *                  *                  *                  *                  *
Execution Fees........................
 
                   *                  *                  *                  *                  *                  *                  *
 Surcharge for Options on                  $0.10  contract/side.................  Transaction...................  Excludes customers
 Nasdaq 100 Index Tracking Stock \sm\
 and the Nasdaq Biotech Index
  iShares.
 
                   *                  *                  *                  *                  *                  *                  *
--------------------------------------------------------------------------------------------------------------------------------------------------------

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.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

(1) Purpose
    The Exchange states that it has entered into a license agreement to 
use various trademarks regarding the Nasdaq Biotech Index in 
connection with its trading of options on the Nasdaq-100 Index Tracking 
iShares. The purpose of this proposed rule change is to adopt 
a fee for trading in these options to defray the licensing costs. The 
Exchange believes that charging the participants that trade in options 
on this instrument is the most equitable means of recovering the costs 
of the license. However, because competitive pressures in the industry 
have resulted in the waiver of all transaction fees for customer

[[Page 19787]]

transactions, the Exchange does not propose to charge this additional 
fee with respect to customer transactions. The fee will be charged only 
with respect to non-customer transactions.
(2) Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) of the Act,\3\ in general, and furthers the 
objectives of Section 6(b)(4),\4\ in particular, in that it provides 
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\ 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 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 establishes or changes a due, fee, or 
charge imposed by the Exchange and, therefore, has become effective 
upon filing pursuant to section 19(b)(3)(A)(ii) of the Act \5\ and Rule 
19b-4(f)(2) thereunder.\6\ 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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    \5\ 15 U.S.C. 78(s)(b)(3)(A)(ii).
    \6\ 17 CFR 240.19b-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 Section. 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-2002-10 and 
should be submitted by May 14, 2002.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-9884 Filed 4-22-02; 8:45 am]
BILLING CODE 8010-01-P