[Federal Register Volume 70, Number 168 (Wednesday, August 31, 2005)]
[Notices]
[Pages 51855-51856]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-4731]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52330; File No. SR-ISE-2005-38]


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

August 24, 2005.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on August 1, 2005, the International Securities Exchange, Inc. 
(``ISE'' or ``Exchange'') 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 ISE. 
On August 22, 2005, ISE filed Amendment No. 1 to the proposed rule 
change.\3\ The ISE has designated this proposal as one establishing or 
changing a due, fee, or other charge imposed by the ISE under Section 
19(b)(3)(A)(ii) of the Act,\4\ and Rule 19b-4(f)(2) thereunder,\5\ 
which renders the proposal effective upon filing with the Commission. 
The Commission is publishing this notice to solicit comments on the 
proposed rule change, as amended, from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1 made changes to the filing, including 
Exhibit 5 (ISE's Schedule of Fees), to correct the names of the 
indexes: iShares Russell 2000(r) Index is the iShares Russell 
2000(r) Index Fund and the full and proper name of the Lehman 
Brothers 20+ year Treasury Bond Index is the iShares Lehman Brothers 
20+ year Treasury Bond Index ETF, and to remove references to the 
ISE Integrated Gas and Services Index (PMP).
    \4\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \5\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The ISE is proposing to amend its Schedule of Fees to establish 
fees for transactions in options on five products: The iShares Russell 
2000(r) Index Fund, the Semiconductor HOLDRs Trust, the Oil Service 
HOLDRs Trust, the Energy Select Sector SPDR[reg] Fund, and the iShares 
Lehman Brothers 20+ year Treasury Bond Index ETF. The text of the 
proposed rule change, as amended, is available on the ISE's Web site 
(http://www.iseoptions.com/legal/proposed_rule_changes.asp), at the 
principal office of the ISE, and at the Commission's Public Reference 
Room.

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 Exchange is proposing to amend its Schedule of Fees to 
establish fees for transactions in options on five products: the 
iShares Russell 2000 Index Fund (``IWM''), the Semiconductor HOLDRs 
Trust (``SMH''), the Oil Service HOLDRs Trust (``OIH''), the Energy 
Select Sector SPDR Fund (``XLE''), and the iShares Lehman Brothers 20+ 
year Treasury Bond Index ETF (``TLT'').\6\ Specifically, the Exchange 
is proposing to adopt an execution fee and a comparison fee for 
transactions by Public Customers \7\ in options on IWM, SMH, OIH, XLE, 
and TLT.\8\ The Exchange currently charges an execution fee and a 
comparison fee

[[Page 51856]]

only for transactions by Non-Customers \9\ in options on IWM, SMH, OIH, 
XLE, and TLT. The amount of the execution fee and comparison fee for 
the products covered by this filing shall be the same for all order 
types on the Exchange--that is, orders for Public Customers and Non-
Customers (which include Market Makers and Firm Proprietary)--and shall 
be equal to the execution fee and comparison fee, respectively, that 
are currently charged by the Exchange for transactions by Non-Customers 
in equity options.\10\
---------------------------------------------------------------------------

    \6\ The ISE represents that all five products are ``Fund 
Shares,'' as defined by ISE Rule 502(h).
    \7\ ISE Rule 100(32) defines ``Public Customer'' as a person 
that is not a broker or dealer in securities.
    \8\ The ISE represents that these fees will be charged only to 
Exchange members.
    \9\ ISE Rule 100(22) defines ``Non-Customer'' as a person or 
entity that is broker or dealer in securities.
    \10\ The execution fee is currently between $.21 and $.12 per 
contract side, depending on the Exchange Average Daily Volume, and 
the comparison fee is currently $.03 per contract per side.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change, as amended, is 
consistent with Section 6(b)(4) of the Act,\11\ which requires that an 
exchange have an equitable allocation of reasonable dues, fees, and 
other charges among its members and other persons using its facilities.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that the proposed rule change, as amended, 
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

    Because the foregoing rule change, as amended, establishes or 
changes a due, fee, or other charge imposed by the Exchange, it has 
become effective pursuant to Section 19(b)(3)(A) of the Act \12\ and 
Rule 19b-4(f)(2) \13\ thereunder. At any time within 60 days of the 
filing of such amended 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.\14\
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 19b-4(f)(2).
    \14\ The effective date of the original proposed rule is August 
1, 2005. The effective date of Amendment No. 1 is August 22, 2005. 
For purposes of calculating the 60-day period within which the 
Commission may summarily abrogate the proposed rule change under 
Section 19(b)(3)(C) of the Act, the Commission considers the period 
to commence on August 22, 2005, the date on which the ISE submitted 
Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).
---------------------------------------------------------------------------

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. Comments may be 
submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to [email protected]. Please include 
File No. SR-ISE-2005-38 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-9303.
    All submissions should refer to File Number SR-ISE-2005-38. This 
file number should be included on the subject line if e-mail is used. 
To help the Commission process and review your comments more 
efficiently, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). 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 also will be available for inspection and copying at the 
principal office of the ISE. All comments received will be posted 
without change; the Commission does not edit personal identifying 
information from submissions. You should submit only information that 
you wish to make available publicly. All submissions should refer to 
File Number SR-ISE-2005-38 and should be submitted on or before 
September 21, 2005.
---------------------------------------------------------------------------

    \15\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\15\
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-4731 Filed 8-30-05; 8:45 am]
BILLING CODE 8010-01-P