[Federal Register Volume 65, Number 249 (Wednesday, December 27, 2000)]
[Notices]
[Pages 81944-81945]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-32893]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-43738; File No. SR-ISE-00-26]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by International Securities
Exchange LLC, Relating to Minimum Activity Fees
December 18, 2000.
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 December 7, 2000, the International Securities Exchange LLC
(``Exchange'' or the ``ISE'') 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 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 is proposing changes to its fees regarding inactive
memberships. The text of the proposed rule change is available at the
Office of the Secretary, the Exchange, and at the Commission.
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 ISE 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
Currently not all of the Exchange's Primary Market Maker (``PMM'')
memberships have begun trading in their assigned group of options
(``bins''). The Exchange is proposing that PMMs will be subject to a
$100,000 monthly fee if the PMM has not yet opened the bin for trading.
Once a bin is opened for trading, there will be a $50,000 per month
minimum fee per bin. That is, if transaction charges with respect to
trading in the bid do not total $50,000 per month, the PMM will be
charged a fee equal to $50,000 minus the actual transaction charges.
These fees are structured to provide the Exchange with revenue that
will, in part, help recover revenue lost due to the lack of trading. In
particular, these fees will help recoup lost transaction and access
charges. The Exchange will periodically reevaluate these fees to
maintain the relationship between the amount of the fees and the lost
revenue being recouped. These fees will become effective on January 1,
2001.
2. Statutory Basis
The basis under the Act for this proposed rule change is the
requirements under Sections 6(b)(4) and 6(b)(5) of the Act \3\ that an
exchange have rules that are designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to remove impediments to and perfect the mechanism
for a free and open market and a national market system, and, in
general, to protect investors and the public interest, as well as
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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\3\ 15 U.S.C. 78f(b)(4)-(5).
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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) of the Act \4\ and Rule 19b-4(f)(6) \5\ thereunder because
the rule change: (1) Does not significantly affect the protection of
investors or the public interest; (2) does not impose any significant
burden on competition; and (3) does not become operative for 30 days
from the date of filing or such shorter time as the Commission may
designate if consistent with the protection of investors and the public
interest. In addition, the Exchange provided the Commission with
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change.
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\4\ 15 U.S.C. 78s(b)(3)(A).
\5\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \6\ normally
does not become operative prior to 30 days after the date of filing.
However, Rule 19b-4(f)(6)(iii) \7\ permits the Commission to designate
such shorter time if such action is consistent with the protection of
investors and the public interest. The ISE has requested that the
Commission accelerate the implementation of the proposed rule change so
that it may take effect on January 1, 2001. The ISE represented that
all of the broker-dealers that currently anticipate being subject to
the proposed fee are represented on ISE's board of directors, voted to
adopt the proposed fee, and approved its submission to the Commission.
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\6\ 17 CFR 240.19b-4(f)(6).
\7\ 17 CFR 240.19b-4(f)(6)(iii).
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On this basis, the Commission believes that it is consistent with
the
[[Page 81945]]
protection of investors and the public interest and does not impose any
significant burden on competition to allow the proposed rule change to
become operative as of the date of this Order and be implemented on
January 1, 2001. 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.\8\
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\8\ For purposes only of accelerating the operative date of this
proposal, the Commission has considered the proopsed rule's impact
on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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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. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609.
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 will also be
available for inspection and copying at the principal office of the
Exchange. All submissions should refer to File No. SR-ISE-00-26 and
should be submitted by January 17, 2001.
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\9\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\9\
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-32893 Filed 12-26-00; 8:45 am]
BILLING CODE 8010-01-M