[Federal Register Volume 73, Number 75 (Thursday, April 17, 2008)]
[Notices]
[Pages 20994-20996]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-8193]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57643; File No. SR-ISE-2008-31]


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

April 10, 2008.
    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 April 7, 2008, 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 prepared by the Exchange. The 
Exchange designated this proposal as one establishing or changing a 
due, fee, or other charge imposed by ISE under Section 19(b)(3)(A)(ii) 
of the Act \3\ and Rule 19b-4(f)(2) thereunder,\4\ which renders the 
proposal effective upon filing with the Commission. On April 9, 2008, 
ISE filed Amendment No. 1 to the proposed rule change.\5\ The 
Commission is publishing this notice to solicit comments on the 
proposed rule change, as amended, from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
    \5\ In Amendment No. 1, ISE corrected the ticker symbol for the 
PowerShares DB Gold Fund from DBL to DGL in the purpose section of 
the Form 19b-4 and in Exhibit 1. ISE also made corresponding changes 
to the Schedule of Fees in Exhibit 5.
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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 establish fees for 
transactions in options on 5 Premium Products.\6\ The text of the 
proposed rule change is available at the Exchange, on the

[[Page 20995]]

Exchange's Web site at http://www.ise.com, and in the Commission's 
Public Reference Room.
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    \6\ Premium Products is defined in the Schedule of Fees as the 
products enumerated therein.
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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. ISE has substantially 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 the PowerShares DB Oil 
Fund (``DBO''), PowerShares DB Silver Fund (''DBS''), PowerShares DB 
Gold Fund (``DGL''), \7\ Ultra Dow30 ProShares (``DDM''),\8\ and Ultra 
Financials ProShares (``UYG''). \9\ The Exchange represents that DBO, 
DBS, DGL, DDM, and UYG are eligible for options trading because they 
constitute ``Exchange-Traded Fund Shares,'' as defined by ISE Rule 
502(h).
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    \7\ The PowerShares DB Oil Fund (``DBO'') is based on the 
Deutsche Bank Liquid Commodity Index--Optimum Yield Oil Excess 
Return(tm). The PowerShares DB Silver Fund (``DBS'') is based on the 
Deutsche Bank Liquid Commodity Index--Optimum Yield Silver Excess 
Return(tm). The PowerShares DB Gold Fund (``DGL'') is based on the 
Deutsche Bank Liquid Commodity Index--Optimum Yield Gold Excess 
Return(tm). DBO, DBS and DGL are managed by DB Commodity Services 
LLC. DGLCI(tm) and Deutsche Bank Liquid Commodity Index(tm) are 
trademarks of Deutsche Bank AG, London (``DB AG''). PowerShares(r) 
is a registered service mark of PowerShares Capital Management LLC 
(``PowerShares''). DBO, DBS and DGL are not sponsored, endorsed, 
sold, or promoted by DB AG, and DB AG makes no representation 
regarding the advisability of investing in DBO, DBS and DGL. Neither 
DB AG nor PowerShares has licensed or authorized ISE to (i) engage 
in the creation, listing, provision of a market for trading, 
marketing, and promotion of options on DBO, DBS, and DGL or (ii) to 
use and refer to any of their trademarks or service marks in 
connection with the listing, provision of a market for trading, 
marketing, and promotion of options on DBO, DBS and DGL or with 
making disclosures concerning options on DBO, DBS, and DGL under any 
applicable federal or state laws, rules or regulations. DB AG and 
PowerShares do not sponsor, endorse, or promote such activity by ISE 
and are not affiliated in any manner with ISE.
    \8\ ``The Dow 30\SM\,'' ``Dow Jones,'' ``Dow Jones Industrial 
Average,'' and ``DJIA,'' are service marks of Dow Jones & Company, 
Inc. (``Dow Jones'') and have been licensed for use for certain 
purposes by ProFunds Trust (``ProShares''). All other trademarks and 
service marks are the property of their respective owners. The Ultra 
Dow30 ProShares (``DDM'') is not sponsored, endorsed, issued, sold, 
or promoted by Dow Jones, and Dow Jones makes no representation 
regarding the advisability of investing in DDM. Neither Dow Jones 
nor ProShares has licensed or authorized ISE to (i) engage in the 
creation, listing, provision of a market for trading, marketing, and 
promotion of options on DDM or (ii) to use and refer to any of their 
trademarks or service marks in connection with the listing, 
provision of a market for trading, marketing, and promotion of 
options on DDM or with making disclosures concerning options on DDM 
under any applicable federal or state laws, rules or regulations. 
Dow Jones and ProShares do not sponsor, endorse, or promote such 
activity by ISE and is not affiliated in any manner with ISE.
    \9\ ``Dow Jones U.S. Financials\SM\,'' is a service mark of Dow 
Jones and has been licensed for use for certain purposes by ProFunds 
Trust (``ProShares''). All other trademarks and service marks are 
the property of their respective owners. The Ultra Financials 
ProShares (``UYG'') is not sponsored, endorsed, issued, sold or 
promoted by Dow Jones, and Dow Jones makes no representation 
regarding the advisability of investing in UYG. Neither Dow Jones 
nor ProShares has licensed or authorized ISE to (i) engage in the 
creation, listing, provision of a market for trading, marketing, and 
promotion of options on UYG or (ii) to use and refer to any of their 
trademarks or service marks in connection with the listing, 
provision of a market for trading, marketing, and promotion of 
options on UYG or with making disclosures concerning options on UYG 
under any applicable federal or state laws, rules or regulations. 
Dow Jones and ProShares do not sponsor, endorse, or promote such 
activity by ISE and is not affiliated in any manner with ISE.
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    All of the applicable fees covered by this filing are identical to 
fees charged by the Exchange for all other Premium Products. 
Specifically, the Exchange is proposing to adopt an execution fee and a 
comparison fee for all transactions in options on DBO, DBS, DGL, DDM, 
and UYG.\10\ The amount of the execution fee and comparison fee for 
products covered by this filing shall be $0.15 and $0.03 per contract, 
respectively, for all Public Customer Orders \11\ and Firm Proprietary 
orders. The amount of the execution fee and comparison fee for all ISE 
Market Maker transactions shall be equal to the execution fee and 
comparison fee currently charged by the Exchange for ISE Market Maker 
transactions in equity options.\12\ Finally, the amount of the 
execution fee and comparison fee for all non-ISE Market Maker 
transactions shall be $0.37 and $0.03 per contract, respectively.\13\ 
Further, since options on DBO, DBS, DGL, DDM, and UYG are multiply-
listed, the Exchange's Payment for Order Flow fee shall apply to all 
these products. The Exchange believes the proposed rule change will 
further the Exchange's goal of introducing new products to the 
marketplace that are competitively priced.
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    \10\ These fees will be charged only to Exchange members. Under 
a pilot program that is set to expire on July 31, 2008, these fees 
will also be charged to Linkage Principal Orders (``Linkage P 
Orders'') and Linkage Principal Acting as Agent Orders (``Linkage P/
A Orders''). The amount of the execution fee charged by the Exchange 
for Linkage P Orders and Linkage P/A Orders is $0.24 per contract 
side and $0.15 per contract side, respectively. See Securities 
Exchange Act Release No. 56128 (July 24, 2007), 72 FR 42161 (August 
1, 2007) (SR-ISE-2007-55).
    \11\ Public Customer Order is defined in ISE Rule 100(a)(39) as 
an order for the account of a Public Customer. Public Customer is 
defined in ISE Rule 100(a)(38) as a person that is not a broker or 
dealer in securities.
    \12\ 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 side.
    \13\ The amount of the execution and comparison fee for non-ISE 
Market Maker transactions executed in the Exchange's Facilitation 
and Solicitation Mechanisms is $0.16 and $0.03 per contract, 
respectively.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act \14\ in general, and Section 6(b)(4) of 
the Act \15\ in particular, because it is designed to provide for the 
equitable allocation of reasonable dues, fees, and other charges among 
its members and other persons using its facilities.
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    \14\ 15 U.S.C. 78f(b).
    \15\ 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 proposed rule change has been designated as a fee 
change pursuant to Section 19(b)(3)(A)(ii) of the Act \16\ and Rule 
19b-4(f)(2) \17\ thereunder, because it establishes or changes a due, 
fee, or other charge imposed by the Exchange. Accordingly, the proposal 
took effect upon filing with the Commission. 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

[[Page 20996]]

necessary or appropriate in the public interest, for the protection of 
investors, or otherwise in furtherance of the purposes of the Act.\18\
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    \16\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \17\ 17 CFR 240.19b-4(f)(2).
    \18\ 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 April 9, 2008, the date on which the ISE submitted 
Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).
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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. 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-2008-31 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-2008-31. 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 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-2008-31 and should be 
submitted on or before May 8, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-8193 Filed 4-16-08; 8:45 am]
BILLING CODE 8010-01-P