MEMORANDUM

TO: File
FROM: John Roeser
DATE: October 10, 2003
RE: Meeting with the International Securities Exchange, Inc. on Proposed Rule Change by the Boston Stock Exchange, Inc. Establishing Trading Rules for the Boston Options Exchange Facility, Release Nos. 34-47186 and 34-48355, File No. SR-BSE-2002-15


On October 7, 2003, members of the Division of Market Regulation staff (Bob Colby, Steve Williams, Elizabeth King, Debby Flynn, and John Roeser) met with David Krell, Michael Simon, and Gary Katz of ISE to discuss the Boston Stock Exchange's proposed new electronic options trading facility. Specifically, David Krell, Michael Simon, and Gary Katz raised ISE's concerns regarding internalization in the options markets. In addition, the representatives of ISE reiterated comments on the Boston Stock Exchange's proposal set forth in a letter to Jonathan G. Katz, Secretary, Commission, from Michael Simon, Senior Vice President and Secretary, ISE, dated September 12, 2003.