[Federal Register Volume 76, Number 240 (Wednesday, December 14, 2011)]
[Notices]
[Pages 77881-77883]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-32001]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-65916; File No. SR-ISE-2011-80]
Self-Regulatory Organizations; International Securities
Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change Relating to API Fees
December 8, 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 November 25, 2011, the International Securities Exchange, LLC
(the ``Exchange'' or the ``ISE'') filed with the Securities and
Exchange Commission (the ``Commission'') the proposed rule change as
described in Items I and II below, which Items have been 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
The ISE is proposing to amend its Schedule of Fees regarding the
Exchange's API or login fees. 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 ISE is proposing to amend its Schedule of Fees regarding the
Exchange's API or login fees. ISE currently charges its Members a fee
for each login that a Member utilizes for quoting or order entry, with
a lesser charge for logins used for the limited purpose of
``listening'' to broadcast messages.\3\ The Exchange currently has the
following categories of authorized logins: (1) Quoting, order entry and
listening (allowing the user to enter quotes, orders, and perform all
other miscellaneous functions, such as setting parameters and pulling
quotes); (2)
[[Page 77882]]
order entry and listening (allowing the user to enter orders and
perform all other miscellaneous functions, such as setting parameters
and pulling quotes (but not quoting)); and (3) listening (allowing the
user only to query the system and to respond to broadcast messages).\4\
The Exchange notes that quoting, order entry and listening are
functionalities available only to Exchange Market Makers, i.e., Primary
Market Makers and Competitive Market Makers, while order entry and
listening are functionalities available only to non-Market Makers,
i.e., Electronic Access Members.
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\3\ See Exchange Act Release No. 53522 (March 20, 2006), 71 FR
14975 (March 24, 2006) (SR-ISE-2006-09).
\4\ Id.
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ISE Market Makers currently receive an allocation of 1.8 million
quotes per day per user.\5\ If a Market Maker submits more quotes than
those allocated, i.e., 1.8 million quotes per day per user as measured
on average in a single month, the Market Maker is charged for
additional users depending upon the number of quotes submitted. Each
month, the total number of quotes submitted by a Market Maker is
divided by the number of trading days, resulting in the average quotes
per day. This number is then divided by 1.8 million and rounded up to
the nearest whole number, resulting in an implied number of users based
on quotes. Market Makers are charged on a monthly basis for the greater
of (a) the greatest number of users that logged into the system, or (b)
the number of implied users based on quotes.
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\5\ See Exchange Act Release No. 64269 (April 8, 2011), 76 FR
20752 (April 13, 2011) (SR-ISE-2011-21).
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ISE currently charges Market Makers $1,200 per month for each
quoting session for up to 1.8 million quotes per day, on average for a
month. Market Makers are charged an additional user fee of $950 for
each incremental usage of up to 1.8 million quotes per day per user.
The Exchange now proposes to standardize this fee by charging a flat
fee of $1,000 for each login session. Each login session will continue
to permit a Market Maker to enter up to 1.8 million quotes per day.
Market Makers who exceed their monthly quoting allowance will also be
charged $1,000 per month for each subsequent usage of 1.8 million
quotes per day in a month.
Earlier this year, the Exchange launched an enhanced trading system
called Optimise. Under its old trading system, prior to Optimise, the
Exchange had an additional category of login known as a ``High
Throughput User.'' \6\ A High Throughput User was a Market Maker who
was allocated up to 3.6 million quotes per day in a month.\7\ A High
Throughput User was able to enter quotes, orders, and perform all other
miscellaneous functions, such as setting parameters and pulling
quotes.\8\ High Throughput Users were charged a fee of $2,400 per month
and an additional user fee of $1,900 for each incremental usage of up
to 3.6 million quotes per day per user. Now that ISE has fully migrated
to Optimise, the Exchange no longer has a need for the ``High
Throughput User'' and proposes to remove it from its Schedule of Fees.
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\6\ See Securities Exchange Act Release No. 55941 (June 21,
2007), 72 FR 35535 (June 28, 2007) (SR-ISE-2007-36).
\7\ See supra note 5.
\8\ Id.
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Additionally, now that the Exchange has transitioned to Optimise,
Members no longer have a need to use their quote allocation across two
trading platforms. As such, the Exchange proposes to delete text from
its Schedule of Fees that permitted Members to use their quote
allocation to access either the old trading system or Optimise.
The Exchange has designated this proposal to be operative on
December 1, 2011.
2. Statutory Basis
The Exchange believes that its proposal to amend its Schedule of
Fees is consistent with Section 6(b) of the Act \9\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \10\ in
particular, in that it is an equitable allocation of reasonable dues,
fees and other charges among Exchange members and other persons using
its facilities. The Exchange believes that the proposal does not
constitute an inequitable allocation of fees, as all similarly situated
Members will be subject to the same fee structure, and access to the
Exchange's market is offered on fair and non-discriminatory terms. In
other words, the proposed rule change will treat similarly situated
Members in the same manner by assessing the same fees to all Members
based on their quoting needs. The Exchange further believes that its
proposal is both equitable and reasonable as it will standardize the
fees charged by the Exchange. With this proposed rule change, all
Members will be assessed the same access fee.
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\9\ 15 U.S.C. 78f(b).
\10\ 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.\11\ 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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\11\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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 email to [email protected]. Please include
File Number SR-ISE-2011-80 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-2011-80. This file
number should be included on the subject line if email 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
[[Page 77883]]
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 the 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-2011-80 and should be submitted on
or before January 4, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-32001 Filed 12-13-11; 8:45 am]
BILLING CODE 8011-01-P