[Federal Register Volume 76, Number 6 (Monday, January 10, 2011)]
[Notices]
[Pages 1488-1489]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-163]



[[Page 1488]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63639; File No. SR-ISE-2010-121]


Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change Relating to a Market Maker Incentive Plan for Foreign Currency 
Options

January 4, 2011.
    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 December 28, 2010, 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 
and II 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 extend an incentive plan for market makers 
in four foreign currency options (``FX Options''). The text of the 
proposed rule change is available on the Exchange's Web site (http://www.ise.com), at the principal office of the Exchange, 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 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 purpose of this proposed rule change is to extend an incentive 
plan for market makers in options on the New Zealand dollar (``NZD''), 
the Mexican peso (``PZO''), the Swedish krona (``SKA'') and the 
Brazilian real (``BRB'').\3\ On August 3, 2009, the Exchange adopted an 
incentive plan applicable to market makers in NZD, PZO and SKA,\4\ and 
on January 19, 2010, added BRB to the incentive plan.\5\ The Exchange 
has since extended the date by which market makers may join the 
incentive plan \6\ and now proposes to do so again.
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    \3\ The Commission previously approved the trading of options on 
NZD, PZO, SKA and BRB. See Exchange Act Release No. 34-55575 (April 
3, 2007), 72 FR 17963 (April 10, 2007) (SR-ISE-2006-59).
    \4\ See Exchange Act Release No. 34-60536 (August 19, 2009), 74 
FR 43204 (August 26, 2009) (SR-ISE-2009-59).
    \5\ See Exchange Act Release No. 34-61459 (February 1, 2010), 75 
FR 6248 (February 8, 2010) (SR-ISE-2010-07).
    \6\ See Exchange Act Release Nos. 34-60810 (October 9, 2009), 74 
FR 53527 (October 19, 2009) (SR-ISE-2009-80), 34-61334 (January 12, 
2010), 75 FR 2913 (January 19, 2010) (SR-ISE-2009-115), 61851 (April 
6, 2010), 75 FR 18565 (April 12, 2010) (SR-ISE-2010-27), 34-62503 
(July 15, 2010), 75 FR 42812 (July 22, 2010) (SR-ISE-2010-71) and 
34-36045 (October 5, 2010), 75 FR 62900 (October 13, 2010) (SR-ISE-
2010-100).
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    In order to promote trading in these FX Options, the Exchange has 
an incentive plan pursuant to which the Exchange waives the transaction 
fees for the Early Adopter \7\ FXPMM \8\ and all Early Adopter FXCMMs 
\9\ that make a market in NZD, PZO SKA and BRB for as long as the 
incentive plan is in effect. Further, pursuant to a revenue sharing 
agreement entered into between an Early Adopter Market Maker and ISE, 
the Exchange pays the Early Adopter FXPMM forty percent (40%) of the 
transaction fees collected on any customer trade in NZD, PZO SKA and 
BRB and pays up to ten (10) Early Adopter FXCMMs that participate in 
the incentive plan twenty percent (20%) of the transaction fees 
collected for trades between a customer and that FXCMM. Market makers 
that do not participate in the incentive plan are charged regular 
transaction fees for trades in these products. In order to participate 
in the incentive plan, market makers are currently required to enter 
into the incentive plan no later than December 31, 2010. The Exchange 
now proposes to extend the date by which market makers may enter into 
the incentive plan to March 31, 2011.
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    \7\ Participants in the incentive plan are known on the 
Exchange's Schedule of Fees as Early Adopter Market Makers.
    \8\ A FXPMM is a primary market maker selected by the Exchange 
that trades and quotes in FX Options only. See ISE Rule 2213.
    \9\ A FXCMM is a competitive market maker selected by the 
Exchange that trades and quotes in FX Options only. See ISE Rule 
2213.
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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,\10\ in general, and 
furthers the objectives of Section 6(b)(4),\11\ 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. The Exchange believes the proposed rule change will 
permit additional market makers to join the incentive plan which in 
turn will generate additional order flow to the Exchange by creating 
incentives to trade these FX Options as well as defray operational 
costs for Early Adopter Market Makers.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 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)(A)(ii) of the Act.\12\ At any time within 60 days of the 
filing of such proposed rule change, the Commission summarily may 
temporarily suspend 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. If the Commission takes such action, the 
Commission shall institute proceedings to determine whether the 
proposed rule should be approved or disapproved.
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    \12\ 15 U.S.C. 78s(b)(3)(A)(ii).

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[[Page 1489]]

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-2010-121 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-ISE-2010-121. 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 Web site viewing and 
printing 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-2010-121 and should be 
submitted by January 31, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-163 Filed 1-7-11; 8:45 am]
BILLING CODE 8011-01-P