[Federal Register: October 22, 2007 (Volume 72, Number 203)]
[Notices]
[Page 59576-59577]
[DOCID:fr22oc07-116]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56662; File No. SR-ISE-2007-71]

Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing of a Proposed Rule Change Relating to Fee Changes
on a Retroactive Basis

October 16, 2007.
    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 October 2, 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
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 Exchange proposes to retroactively apply the fee reduction that
was implemented on September 4, 2007 to the time period of July 1, 2007
to August 31, 2007 (``Retroactive Period''). The text of the proposed
rule change is available at the Commission's Public Reference Room, at
the Exchange, and at http://www.ise.com.

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. The Exchange 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
    On September 4, 2007, the Exchange implemented a fee reduction to
the Schedule of Fees with respect to Electronic Access Member (``EAM'')
Trading Application Software Fees (``Software Fees'').\3\ Consequently,
the Software Fees are as follows:
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    \3\ See Securities Exchange Act Release No. 56379 (September 10,
2007), 72 FR 52591 (September 14, 2007) (SR-ISE-2007-79) (notice of
filing and immediate effectiveness of a proposed rule change
relating to fee changes).
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     Equity EAMs are charged $250 for each of the first and
second connections and $50 for each additional connection thereafter,
regardless of whether the Equity EAM is connected via Financial
Information eXchange (``FIX'') or Application Programming Interface
(``API'').\4\
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    \4\ ISE uses an open API, which members program to in order to
develop applications that send trading commands and/or queries to
and receive broadcasts and/or transactions from the trading system.
FIX is an industry-wide messaging standard protocol.
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     Options EAMs that connect via API are charged $250 for
each of the first five connections and $100 for each additional
connection.
     Options EAMs that connect via FIX are charged $250 for
each of the first and second connections and $50 for each additional
connection thereafter.
    In this filing, the Exchange proposes to retroactively apply the
above-mentioned reduced fees during the Retroactive Period. The
Exchange believes that retroactive application is appropriate for
Equity EAMs because prior to July 1, 2007, Equity EAMs were charged a
fee of $250 per month to connect to the ISE Stock Exchange, and fees on
second and subsequent connections were waived, regardless of whether
the Equity EAM connected via FIX or API.\5\ The Exchange allowed this
waiver to expire on June 30, 2007, at which time the fee to connect to
the ISE Stock Exchange, on a monthly basis, became $250 per connection.
Subsequent to the fee increase, the Exchange analyzed the impact of the
fee increase on Equity EAMs and determined that the disparity between
the increase in fees and the additional work required to assist the
Equity EAMs in maintaining additional lines to the Exchange was not
accurately correlated. Accordingly, the Exchange believes it is
appropriate to retroactively apply this reduction to the Schedule of
Fees.
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    \5\ See Securities Exchange Act Release No. 54897 (December 8,
2006), 71 FR 75593 (December 15, 2006) (SR-ISE-2006-76) (notice of
filing and immediate effectiveness of a proposed rule change
relating to ISE Stock Exchange fees).
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    The Exchange believes that retroactive application is appropriate
for Options EAMs because originally Options EAMs were charged $250 per
month for each of the first five CLICK terminals, and $100 per month
for each additional terminal. However, under a now expired pilot
program previously adopted by the Exchange, Options EAMs' fees
associated with a second and any subsequent CLICK terminals were
waived. As a result, Options EAMs were only charged a $250 per month to
connect to the Exchange. Earlier this year, once all existing CLICK
terminals were decommissioned, the Exchange submitted a fee filing
that, among other things, proposed to remove all references to CLICK
terminals from its fee schedule.\6\ In doing so, and after conducting
an internal analysis of the impact of fees to members, the Exchange
notes that the CLICK Fee Filing actually raised the connection fees for
Options EAMs, contrary to what the Exchange intended. Thus, this filing
seeks to remedy the mistake the CLICK Fee Filing has caused during the
Retroactive Period by retroactively applying this reduction to the
Schedule of Fees during the Retroactive Period.
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    \6\ See Securities Exchange Act Release No. 55960 (June 26,
2007), 72 FR 36531 (July 3, 2007) (SR-ISE-2007-42) (the ``CLICK fee
filing'').
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b)(4) of the Act,\7\ which requires that an exchange
have an equitable allocation of reasonable dues, fees, and other
charges among its members and other persons using its facilities.
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    \7\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    This 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

    Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
    A. By order approve such proposed rule change, or
    B. Institute proceedings to determine whether the proposed rule
change should be disapproved.

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 Ccomments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
); or     Send an e-mail to<EMAIL_ADDRESS>Please include

File Number SR-ISE-2007-71 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-2007-71. 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 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-2007-71 and should be
submitted on or before November 13, 2007.

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-20783 Filed 10-19-07; 8:45 am]

BILLING CODE 8011-01-P