[Federal Register Volume 73, Number 205 (Wednesday, October 22, 2008)]
[Notices]
[Pages 63036-63037]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-25164]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58794; File No. SR-ISE-2008-77]


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

October 15, 2008.
    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 October 10, 2008, the International Securities Exchange, LLC 
(the ``Exchange'' or the ``ISE'') filed with the Securities and 
Exchange Commission the proposed rule change, as described in Items I, 
II, and III below, which items have been prepared by the self-
regulatory organization. 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 ISE is proposing to amend its Schedule of Fees to establish 
fees for transactions in options on 4 Premium Products.\3\ The text of 
the proposed rule change is available on the ISE's Web site (http://www.ise.com), at the principal office of the ISE, and at the 
Commission's Public Reference Room.
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    \3\ 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 self-regulatory organization 
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 self-regulatory organization 
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 the Claymore/BNY BRIC 
ETF (``EEB''),\4\ the iShares Dow Jones U.S. Home Construction Index 
Fund (``ITB''),\5\ the Market Vectors Steel ETF (``SLX'') \6\ and the 
Short Dow 30SM ProShares (``DOG'').\7\ The Exchange 
represents that EEB, ITB, SLX and DOG are eligible for options trading 
because they constitute ``Exchange-Traded Fund Shares,'' as defined by 
ISE Rule 502(h).
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    \4\ The ``BNY BRIC Index'' is a trademark of The Bank of New 
York (``BNY'') and has been licensed for use for certain purposes by 
Claymore Advisors, LLC (``Claymore''). All other trademarks and 
service marks are the property of their respective owners. Claymore 
is the investment adviser to EEB. The Claymore/BNY BRIC ETF 
(``EEB'') is not sponsored, endorsed, or promoted by BNY and BNY 
makes no representation regarding the advisability of investing in 
EEB. Claymore and BNY have not licensed or authorized ISE to (i) 
engage in the creation, listing, provision of a market for trading, 
marketing, and promotion of options on EEB 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 EEB or with making disclosures concerning options on 
EEB under any applicable federal or state laws, rules or 
regulations. Claymore and BNY do not sponsor, endorse, or promote 
such activity by ISE, and are not affiliated in any manner with ISE.
    \5\ iShares[reg] is a registered trademark of Barclays Global 
Investors, N.A. (``BGI''), a wholly owned subsidiary of Barclays 
Bank PLC. ``Dow Jones'' and ``Dow Jones U.S. Home Construction 
Index'' are trademarks and service marks of Dow Jones & Company, 
Inc. (``Dow Jones'') and have been licensed for use for certain 
purposes by BGI. All other trademarks and service marks are the 
property of their respective owners. The iShares Dow Jones U.S. Home 
Construction Index Fund (``ITB'') is not sponsored, endorsed, or 
promoted by Dow Jones. BGI and Dow Jones have not licensed or 
authorized ISE to (i) engage in the creation, listing, provision of 
a market for trading, marketing, and promotion of options on ITB 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 ITB or with making 
disclosures concerning options on ITB under any applicable federal 
or state laws, rules or regulations. BGI and Dow Jones do not 
sponsor, endorse, or promote such activity by ISE, and are not 
affiliated in any manner with ISE.
    \6\ The Market Vectors Steel ETF (``SLX'') is distributed by Van 
Eck Securities Corporation (``VESC'') and tracks the AMEX Steel 
Index. Van Eck Associates Corporation (``VEAC'') is the investment 
adviser to SLX. VEAC has entered into a licensing agreement with the 
American Stock Exchange (``AMEX'') to use the AMEX Steel Index in 
connection with SLX. The AMEX' only relationship with VEAC is the 
licensing of certain trademarks, service marks and trade names of 
the AMEX Steel Index. The AMEX does not sponsor, endorse, or promote 
SLX and makes no representation regarding the advisability of 
investing in SLX. Neither VESC nor VEAC has licensed or authorized 
ISE to (i) engage in the creation, listing, provision of a market 
for trading, marketing, and promotion of options on SLX 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 SLX or with making 
disclosures concerning options on SLX under any applicable federal 
or state laws, rules or regulations. Neither VESC nor VEAC sponsors, 
endorses, or promotes such activity by ISE, and are not affiliated 
in any manner with ISE.
    \7\ ``Dow Jones,'' ``The Dow 30 SM,'' ``DJIA,'' and 
the ``Dow Jones Industrial AverageTM '' are service marks 
of Dow Jones & Company, Inc. (``Dow Jones'') and have been licensed 
for use for certain purposes by ProFunds Trust. All other trademarks 
and service marks are the property of their respective owners. The 
Short Dow 30 SM ProShares (``DOG'') is not sponsored, 
endorsed, or promoted by Dow Jones. ProFunds Trust and Dow Jones has 
not licensed or authorized ISE to (i) engage in the creation, 
listing, provision of a market for trading, marketing, and promotion 
of options on DOG 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 DOG or with making disclosures concerning options on DOG 
under any applicable federal or state laws, rules or regulations. 
ProFunds Trust and Dow Jones does 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 for 
all transactions in options on EEB, ITB, SLX and DOG.\8\ The amount of 
the execution fee for products covered by this filing shall be $0.18 
per contract for all Public Customer Orders \9\ and $0.20 per contract 
for all Firm Proprietary orders. The amount of the execution fee for 
all ISE Market Maker transactions shall be equal to the execution fee 
currently charged by the Exchange for ISE Market Maker transactions in 
equity options.\10\ Finally, the amount of the execution fee for all 
non-ISE Market Maker transactions shall be $0.45 per contract.\11\ 
Further, since options on EEB, ITB, SLX and DOG are multiply-listed, 
the Exchange's Payment for Order Flow fee shall apply to all these 
products. The Exchange believes the

[[Page 63037]]

proposed rule change will further the Exchange's goal of introducing 
new products to the marketplace that are competitively priced.
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    \8\ These fees will be charged only to Exchange members. Under a 
pilot program that is set to expire on July 31, 2009, 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. 58143 (July 11, 2008), 73 FR 41388 (July 
18, 2008) (SR-ISE-2008-52).
    \9\ Public Customer Order is defined in Exchange Rule 100(a)(39) 
as an order for the account of a Public Customer. Public Customer is 
defined in Exchange Rule 100(a)(38) as a person or entity that is 
not a broker or dealer in securities.
    \10\ The Exchange applies a sliding scale, between $0.01 and 
$0.18 per contract side, based on the number of contracts an ISE 
market maker trades in a month.
    \11\ The amount of the execution fee for non-ISE Market Maker 
transactions executed in the Exchange's Facilitation and 
Solicitation Mechanisms is $0.19 per contract.
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    2. Basis--The Exchange believes that the proposed rule change is 
consistent with the objectives of Section 6 of the Act,\12\ in general, 
and furthers the objectives of Section 6(b)(4),\13\ in particular, in 
that 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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    \12\ 15 U.S.C. 78f(b).
    \13\ 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 has become effective pursuant to section 
19(b)(3) of the Act \14\ and Rule 19b-4(f)(2) \15\ 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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    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 17 CFR 19b-4(f)(2) [sic].
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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 No. SR-ISE-2008-77 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-ISE-2008-77. 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 Commissions 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-2008-77 and should be submitted by 
November 12, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-25164 Filed 10-21-08; 8:45 am]
BILLING CODE 8011-01-P