July 6, 2005
To the SEC:
Thank you for the opportunity to respond to the proposal SR-ISE-2005-31.
The ISE website states the reason for the proposed rule change is to ease congestion in the ISE Order Routing System. After 4 years of heavy trading on all U.S. option exchanges, I have not witnessed congestion, or slowness, in pricing on the ISE. Please verify that the ISE has, as suggested in the SR-ISE-2005-31 proposal, in fact, been limited or constrained in its capacity to generate quotes. The ISE assertion that many small orders are being created to help bring executions in line with cancels, suggests that certain traders are already experiencing artificial constraints on trading activity they would like to continue. A verification of a legitimate, continuing ISE network capacity constraint, therefore, will assist in determining if a fee increase might in fact be a punitive measure against profitable public trading activity that the ISE might wish to confiscate for itself.
Finally, as the SEC is charged with protecting the public interest in the financial arena, I believe the SEC should not consider SR-ISE-2005-31 for approval, as it does not benefit the public. Should the SEC, however, consider SR-ISE-2005-31 for approval, many in the financial community would be interested in the SECs opinion of which parties the SR-ISE-2005-31 proposal is designed to benefit, and why public investors must necessarily be excluded from this group.
Mr. B. Thomas Rule