Subject: File No. SR-ISE-2006-23
From: Michael C Kenny
Affiliation: Independent Trader

June 9, 2006

As a retail options trader, I am ardently concerned that this proposed rule by the ISE is not only a threat to my profession, but a barrier to trade that would reward a select few while severely limiting non-member traders. The American markets are supposed to be a bastion of capitalism an opportunity, which is part of the reason the economy of the United States was able to develop and thrive. Why then, should active market participants have opportunities diminished by the ISE so that they can protect the interests of a select few?

This proposed rule greatly diminishes the feasibility of a trade between two customers. Hence, in addition to erecting trade barriers to non-ISE members, the rule indirectly decreases incentive to actively trade options and thusly will diminish liquidity in the options market. The only winner here is the ISE, who is willing to stifle the heart of free market to appease the members and increase their profitability. I ask how a one-dollar fee per cancel is justifiable in an electronic trading system? There is absolutely no argument that can demonstrate a quantifiable externality, via bandwidth and memory usage, anywhere near that amount. Even if it were so, by operating as an electronic exchange the onus is on the ISE to properly manage their trading network as volume increases to ensure fluidity and maintain confidence in any market, option or otherwise.

Furthermore, I do not know of any market in which active traders do not cancel orders as market conditions change. It seems the ISE's answer to an intelligent trader is fees and barriers as they gouge and protect the few. I am confident the SEC will be able to recognize this unfair rule as being such. Perhaps the ISE would be able to run a smoother operation in Russia.