[Federal Register Volume 72, Number 142 (Wednesday, July 25, 2007)]
[Notices]
[Pages 40912-40914]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-14314]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56093; File No. SR-ISE-2007-58]


Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing of a Proposed Rule Change Relating to ISEE Select 
Market Data Fees

July 18, 2007.
    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 July 6, 2007, the International Securities Exchange, LLC (``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 substantially 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

    ISE proposes to amend its Schedule of Fees to adopt a subscription 
fee for an enhanced sentiment market data offering. The text of the 
proposed rule change is available at the Commission's Public Reference 
Room, at the Exchange, and at http://www.ise.com.

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
    Pursuant to a filing previously approved by the Commission, the 
Exchange currently sells on a subscription basis, to both members and 
non-members, ISEE Select\TM\ (``ISEE Select''), an enhanced sentiment 
market data offering.\3\ Earlier this year, the Exchange also adopted a 
multi-product discount for the ISEE Select offering.\4\ ISEE Select is 
based on the ISE Sentiment Index[reg], or ISEE[reg], a calculation that 
represents an overall

[[Page 40913]]

view of market sentiment. The ISEE[reg] provides an intra-day picture 
of how investors view stock prices by assessing customers' option 
trading activity. Unlike the traditional put/call ratio which makes no 
distinction between customer, market maker or firm transactions, the 
ISEE[reg] measures only opening long customer transactions on ISE. ISE 
updates the current ISEE[reg] value hourly during market hours and 
posts it for free on its Web site.\5\
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    \3\ See Securities Exchange Act Release Nos. 53532 (March 21, 
2006), 71 FR 15501 (March 28, 2006) (SR-ISE-2005-56) (Notice of 
Filing of Proposed Rule Change to Establish Fees for Enhanced 
Sentiment Market Data) and 53756 (May 3, 2006), 71 FR 27526 (May 11, 
2006) (SR-ISE-2005-56) (Order Approving Proposed Rule Change to 
Establish Fees for Enhanced Sentiment Market Data) (``Initial 
Filing'').
    \4\ See Securities Exchange Act Release No. 55288 (February 13, 
2007), 72 FR 8219 (February 23, 2007) (SR-ISE-2007-09) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To 
Establish Fee Discounts for Enhanced Sentiment Market Data Offering) 
(``Subsequent Filing'').
    \5\ http://www.iseoptions.com/marketplace/statistics/sentiment_index.asp.
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    Pursuant to the Initial Filing, ISEE Select allows subscribers to 
identify bullish and bearish investor sentiment for nearly any issue 
traded on the Exchange using the same formula that is used for the ISEE 
calculation. Where the ISEE[reg] is a single value for the overall 
market sentiment, ISEE Select provides specific information to allow an 
end user to retrieve a sentiment value for an individual symbol via a 
user-defined query tool. In addition to the user-defined query tool, 
ISE also offers a pre-defined scanning tool that combs the market for 
sentiment levels that meet pre-defined parameters. ISEE Select provides 
sentiment values for particular indices, industry sectors or individual 
stocks and is calculated three times per hour versus only one time per 
hour for the ISEE[reg].
    ISEE Select is currently available to on-line investors on a 
subscription basis as follows: (i) 100 user-defined queries for $11.95 
per month; (ii) 200 user-defined queries for $14.95 per month; (iii) 
unlimited user-defined queries for $19.95 per month; and (iv) unlimited 
pre-defined queries for $11.95 per month. ISEE Select is also offered 
by third-parties that participate in the Exchange's Marketing Alliance 
program.\6\ Customers of participating third-parties are able to take 
advantage of a discounted price for the same four subscription levels. 
The discounted rates for these subscribers are as follows: (i) 100 
user-defined queries for $9.95 per month; (ii) 200 user-defined queries 
for $11.95 per month; (iii) unlimited user-defined queries for $15.95 
per month; and (iv) unlimited pre-defined queries for $9.95 per month.
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    \6\ When the Commission published the Initial Filing, the 
Marketing Alliance program was known as the ISE Broker Marketing 
Alliance, and participation in it was limited to broker-dealers. 
Following the launch of the ISEE Select market data offering, and in 
response to the interest the Exchange received from many non-broker-
dealers wishing to participate in the Marketing Alliance program, 
the Exchange subsequently expanded the program by eliminating its 
limitation to only broker-dealers. See Securities Exchange Act 
Release Nos. 54508 (September 26, 2006) 71 FR 58459 (October 3, 
2006) (SR-ISE-2006-44) (Notice of Filing of Proposed Rule Change To 
Expand the Broker Marketing Alliance To Include Non-Broker-Dealers 
with Regard to Enhanced Sentiment Market Data Offering) and 54704 
(November 3, 2006), 71 FR 65859 (November 9, 2006) (SR-ISE-2006-44) 
(Order Approving Proposed Rule Change To Expand the Broker Marketing 
Alliance To Include Non-Broker-Dealers with Regard To Enhanced 
Sentiment Market Data Offering).
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    Pursuant to the Subsequent Filing, the Exchange also offers to both 
member and non-member subscribers the following multi-product 
discounted subscription fees: $24.95 per month for customers who 
subscribe directly through ISE to both the unlimited pre-defined query 
and either 200 user-defined queries or unlimited user-defined queries; 
or $19.95 per month for customers of the Marketing Alliance program 
partners that subscribe to both the unlimited pre-defined query and 
either 200 user-defined queries or unlimited user-defined queries. The 
Exchange notes that the multi-product discounts noted above are a 
reduction of the actual subscription fees for the products to which 
they apply. If not for the multi-product discount, for on-line 
subscribers, these fees would be (i) $26.90 per month for subscribers 
to both unlimited pre-defined queries and 200 user-defined queries, or 
(ii) $31.90 per month for subscribers to both unlimited pre-defined 
queries and unlimited user-defined queries. For customers of the 
Marketing Alliance program partners, if not for the multi-product 
discount, these fees would be (i) $21.90 per month for subscribers to 
both unlimited pre-defined queries and 200 user-defined queries, or 
(ii) $25.90 per month for subscribers to both unlimited pre-defined 
queries and unlimited user-defined queries.
    The Exchange now proposes to offer to both member and non-member 
subscribers a data feed that will provide a bulk delivery of ISEE 
Select values. The existing ISEE Select browser application allows a 
subscriber to access ISEE Select values for up to five securities 
simultaneously. The current proposal, on the other hand, will allow 
subscribers to access numerous ISEE Select values simultaneously. The 
actual potential number of ISEE Select values accessible by this 
proposed data feed offering can range from one to more than 1,700.
    The ISEE Select data feed will have a flat rate subscription fee 
based on a fixed number of end users that each subscriber allows to 
view the data, as follows: $0.10 per end user, per month, for a minimum 
of 10,000 end users; $0.10 for each additional end user, per month, up 
to 74,999 end users, in increments of 5,000 end users; $0.084 per end 
user, per month, for redistribution from 75,000 to 199,999 end users, 
in increments of 5,000 end users; and $0.0825 per end user, per month, 
for redistribution to 200,000 or more end users, in minimum increments 
of 5,000 end users. An example of the monthly subscription fee for a 
subscriber with 100,000 end users is as follows:

------------------------------------------------------------------------
                                                  Monthly fee   Monthly
         Number of users per  increment            per user    sub-total
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10,000.........................................         $.10      $1,000
10,001-74,999..................................          .10       6,500
75,000-100,000.................................          .084      2,100
                                                ------------------------
  Monthly Total................................  ............      9,600
Average Fee per User...........................  ............       .096
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2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(4) of the Act,\7\ that an exchange have 
an equitable allocation of reasonable dues, fees, and other charges 
among its members and other persons using its facilities. In 
particular, the proposed rule filing will provide members and non-
members with the ability to subscribe to a data feed of ISEE Select 
values at a flat rate subscription basis for redistribution to their 
customers.
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    \7\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    This 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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) As the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:

[[Page 40914]]

    A. By order approve such proposed rule change, or
    B. Institute proceedings to determine whether the proposed rule 
change should be disapproved.

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. 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 Number SR-ISE-2007-58 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.
All submissions should refer to File Number SR-ISE-2007-58. 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, 100 F Street, NE., 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of such filing also will be available for 
inspection and copying at the principal office of the Exchange. 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-2007-58 and should be 
submitted on or before August 15, 2007.

    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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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-14314 Filed 7-24-07; 8:45 am]
BILLING CODE 8010-01-P