

[Federal Register: October 3, 2006 (Volume 71, Number 191)]
[Notices]               
[Page 58459-58460]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03oc06-122]                         


[[Page 58459]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54508; File No. SR-ISE-2006-44]

 
Self-Regulatory Organizations; International Securities Exchange, 
Inc.; Notice of Filing of a Proposed Rule Change to Expand the Broker 
Marketing Alliance To Include Non-Broker-Dealers With Regard to the 
Enhanced Sentiment Market Data Offering

September 26, 2006.
    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 July 25, 2006, the International Securities Exchange, Inc. (``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 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 amend its Schedule of Fees regarding the 
enhanced sentiment market data offering to expand the Broker Marketing 
Alliance by eliminating its limitation to only broker-dealers. The text 
of the proposed rule change is available at the ISE, at the 
Commission's Public Reference Room, and at http://www.iseoptions.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
    The ISE is proposing to amend its Schedule of Fees regarding the 
enhanced sentiment market data offering.\3\ Specifically, the Exchange 
proposes to expand the Broker Marketing Alliance by eliminating its 
limitation to only broker-dealers. The Exchange's enhanced sentiment 
market data offering, and the Broker Marketing Alliance, was previously 
approved by the Commission.\4\ A Broker Marketing Alliance is an 
arrangement between ISE and a participating U.S. broker-dealer that 
markets the enhanced sentiment offering to its customers. A Broker 
Marketing Alliance enables a participating U.S. broker-dealer to 
participate in a revenue sharing arrangement with the Exchange for each 
of their referred customers that subscribes to the enhanced sentiment 
offering. Additionally, broker-dealers receive a rebate of 35% of the 
subscription fee collected from subscribers. An additional bonus rebate 
may also be paid to broker-dealers for achieving subscription levels 
based on the size of their firm and the number of clients that 
subscribe to the service.
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    \3\ The Commission notes that enhanced sentiment market data is 
a product that allows an end user to retrieve a sentiment value for 
an individual symbol using a query tool and includes a sentiment 
scanning tool that allows a user to comb the market for sentiment 
levels that meet pre-defined parameters. See Securities Exchange Act 
Release No. 53756 (May 3, 2006), 71 FR 27529 (May 11, 2006) (SR-ISE-
2005-56).
    \4\ See id.
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    Since the introduction of this market data offering, the Exchange 
has received interest from many non-broker-dealers seeking to 
participate in an arrangement similar to the Broker Marketing Alliance. 
These non-broker-dealers, including firms that provide investors with 
market commentary, investment tools and educational materials, have 
expressed an interest to sell subscriptions to this offering. If the 
Commission approves this proposed rule change, the Exchange will be 
able to enter into a marketing alliance agreement with both broker-
dealers and non-broker-dealers. As before, such an agreement will 
enable both broker-dealers and non-broker-dealers to participate in a 
revenue sharing arrangement for each of their referred customers that 
subscribes to the enhanced sentiment offering and potentially be paid 
an additional bonus rebate for achieving subscription levels based on 
the size of their firms and the number of clients that subscribe to 
this market data offering.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b)(4) of the Act,\5\ 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. The Exchange 
believes that expanding the Broker Marketing Alliance to allow 
participation by non-broker-dealers provides a greater number of market 
participants with an opportunity to obtain enhanced sentiment market 
data in furtherance of their investment decisions.
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    \5\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that 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

    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, as amended, is consistent with the Act. Comments may be 
submitted by any of the following methods:

[[Page 58460]]

Electronic Comments

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

File Number SR-ISE-2006-44 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-2006-44. 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. 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-2006-44 and should be submitted on or before October 
24, 2006.
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    \6\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\6\
Nancy M. Morris,
Secretary.
[FR Doc. E6-16249 Filed 10-2-06; 8:45 am]

BILLING CODE 8010-01-P
