[Federal Register Volume 68, Number 231 (Tuesday, December 2, 2003)]
[Notices]
[Pages 67499-67500]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-29938]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-48837; File No. SR-ISE-2003-24]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the International Securities 
Exchange, Inc., Relating to Fee Changes

November 25, 2003.
    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 3, 2003, the International Securities Exchange, Inc. 
(``Exchange'' or ``ISE'') filed with the Securities and Exchange 
Commission (``SEC'' or ``Commission'') the proposed rule change as 
described in Items I, II, and III below, which items have been prepared 
by the ISE. 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 Schedule of Fees in order 
to adopt certain fees and temporary fee waivers relating to index 
options. The text of the proposed rule change is available at the ISE 
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 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 is proposing changes to its Schedule of Fees in order 
to adopt certain fees and temporary fee waivers relating to index 
options.
    The Exchange plans to list index options for trading. The first 
index option product the Exchange plans to list is the S&P SmallCap 600 
Index. The Exchange has entered into a license agreement to use various 
indexes and trademarks of Standard & Poor's, a division of The McGraw-
Hill Companies, Inc. (``S&P''), in connection with the listing and 
trading of index options on the S&P SmallCap 600 Index. As with 
licensed equity options, the Exchange is adopting a member fee for 
trading in these options to defray the licensing costs. The Exchange 
believes that charging the participants that trade these instruments is 
the most equitable means of recovering the costs of the license.
    However, the Exchange is proposing to temporarily waive certain 
transaction fees that would otherwise apply to index options in an 
attempt to generate trading interest and for competitive purposes. 
Specifically, the Exchange is proposing to waive the following 
transaction fees on index options until February 28, 2004: (i) The 
facilitation execution fee; (ii) the market maker and firm proprietary 
execution fee; (iii) the surcharge for options on the S&P SmallCap 600 
Index execution fee; and (iv) the comparison fee. Lastly, the Exchange 
made certain minor, non-substantive changes to its Schedule of Fees for 
clarity and consistency, as well as removed language relating to a

[[Page 67500]]

temporary fee waiver for market maker and firm proprietary complex 
order execution fees that expired on June 30, 2003.
2. Basis
    The basis under the Act for this proposed rule change is the 
requirement under section 6(b)(4) of the Act that an exchange have an 
equitable allocation of reasonable dues, fees and other charges among 
its members and other persons using its facilities.\3\
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    \3\ 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, which establishes or changes a due, fee 
or other charge imposed by the Exchange, has become effective pursuant 
to section 19(b)(3)(A) of the Act \4\ and Rule 19b-4(f)(2) \5\ 
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.
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    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 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 Section. 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-2003-24 and should 
be submitted by December 23, 2003.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-29938 Filed 12-1-03; 8:45 am]
BILLING CODE 8010-01-P