Self-regulatory organizations; proposed rule changes: International Securities Exchange, LLC,


[Federal Register: February 23, 2007 (Volume 72, Number 36)]


[Page 8218-8219]

From the Federal Register Online via GPO Access []



[Release No. 34-55289; File No. SR-ISE-2007-04]

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

February 13, 2007.

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 January 17, 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 ISE. The ISE has designated this proposal as one establishing or changing a due, fee, or other charge applicable only to a member 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. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.

\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).

  1. 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 adopt a tiered structure for one of the Exchange's network fees. The text of the proposed rule change is available at the Exchange, the Commission's Public Reference Room, and at

  2. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the ISE 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 ISE has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.

    1. 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 amend the Exchange's Schedule of Fees to adopt a tiered structure for the Ethernet/Managed Service Provider fee charged to members.

      The Ethernet/Managed Service Provider fee is a fee charged to ISE members to access the ISE's trading system via an Ethernet connection or a third-party managed service provider. The Ethernet/Managed Service Provider connection carries the same information (such as quotation and trade information) as other forms of connection (such as T-1 and T-3 point-to-point connections) and does not require any changes to the Exchange's surveillance or communications rules. There is no change to, or impact on, the Exchange's trading systems as a result of this method of connection.

      An Ethernet/Managed Service Provider connection enables users to acquire bandwidth in megabit increments. The ISE currently charges members $25.00 per Megabit (MB), and members may purchase up to 15MBs. The Exchange recently launched a new service whereby members will now be able to purchase up to 1000MBs. To bring this network fee in line with the new service, the ISE proposes to establish a new pricing structure for connection speeds. Specifically, the ISE proposes to charge members $100.00 per month for a member's purchase of up to 10MBs of connection speed, $250.00 per month for the purchase of 11 to 100MBs of connection speed, and $500.00 per month for the purchase of 101MBs to 1GB (1000MBs) of connection speed. These fees will be charged on a per connection basis. As noted above, the Exchange previously limited any connection to a maximum of 15MBs. The Exchange notes that the fees proposed herein are intended to cover and reasonably relate to its costs in rolling out and supporting the new service. 2. Statutory Basis

      The basis under the Act for this proposed rule change is the requirement under section 6(b)(4) \5\ 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, these fees will enable the Exchange to cover

      [[Page 8219]]

      its costs in providing a faster form of connectivity by members to the Exchange.

      \5\ 15 U.S.C. 78f(b)(4).

    2. 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.

    3. 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.

  3. 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) of the Act \6\ and paragraph (f) of Rule 19b-4 \7\ 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.

    \6\ 15 U.S.C. 78s(b)(3)(A).

    \7\ 17 CFR 19b-4(f).

  4. 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 ( ); or Send an e-mail to Please include

    File No. SR-ISE-2007-04 on the subject line.

    Paper Comments

    Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549-1090.

    All submissions should refer to File Number SR-ISE-2007-04. 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 ( ). 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. 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-2007-04 and should be submitted on or before March 16, 2007.

    For the Commission, by the Division of Market Regulation, pursuant to delegated authority.\8\

    \8\ 17 CFR 200.30-3(a)(12).

    Florence E. Harmon, Deputy Secretary. [FR Doc. E7-3069 Filed 2-22-07; 8:45 am]

    BILLING CODE 8010-01-P