Self-Regulatory Organizations; ISE Mercury, LLC; Notice of Filing of Proposed Rule Change Relating to Preferenced Volume, 26277-26279 [2016-10155]

Download as PDF Federal Register / Vol. 81, No. 84 / Monday, May 2, 2016 / Notices whether a rule filing must be filed by the Exchange pursuant to Section 19(b)(1) of the Act. Accordingly, the Commission designates the proposed rule change to be operative upon filing.16 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend 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. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or 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 is consistent with the Act. Comments may be submitted by any of the following methods: srobinson on DSK5SPTVN1PROD with NOTICES Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NASDAQ–2016–059 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NASDAQ–2016–059. This file number should be included on the subject line if email 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 (https://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 Web site viewing and 16 For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). VerDate Sep<11>2014 20:30 Apr 29, 2016 Jkt 238001 printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. 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– NASDAQ–2016–059 and should be submitted on or May 23, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 Robert W. Errett, Deputy Secretary. [FR Doc. 2016–10147 Filed 4–29–16; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–77716; File No. SR– ISEMercury-2016–09] Self-Regulatory Organizations; ISE Mercury, LLC; Notice of Filing of Proposed Rule Change Relating to Preferenced Volume April 26, 2016. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on April 13, 2016, ISE Mercury, LLC (the ‘‘Exchange’’ or ‘‘ISE Mercury’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of the Substance of the Proposed Rule Change The purpose of this proposed rule change is to amend the Exchange’s Schedule of Fees to explain that while 100% of eligible traded volume preferenced to a Market Maker counts towards that member’s volume tiers, Market Makers not preferenced on an order will receive credit for the volume those non-preferenced members 17 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00080 Fmt 4703 Sfmt 4703 26277 execute. The text of the proposed rule change is available on the Exchange’s Web site (https://www.ise.com), at the principal office of the Exchange, and at the Commission’s Public Reference Room. 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 self-regulatory organization 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 self-regulatory organization 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 On March 10, 2016, ISE Mercury introduced fee and rebate tiers for Market Maker 3 and Priority Customer 4 orders based on the average daily volume (‘‘ADV’’) that a member executes in Priority Customer orders.5 The Exchange assesses fees and rebates for Market Maker and Priority Customer orders based on five tiers of Total Affiliated Priority Customer ADV, as described in Table 4 of the Fee Schedule: 6 0—19,999 contracts (‘‘Tier 1’’), 20,000—39,999 contracts (‘‘Tier 2’’), 40,000—59,999 contracts (‘‘Tier 3’’), 60,000—79,999 contracts (‘‘Tier 4’’), and 80,000 or more contracts (‘‘Tier 5’’).7 As 3 The term Market Makers refers to ‘‘Competitive Market Makers’’ and ‘‘Primary Market Makers’’ collectively. 4 A ‘‘Priority Customer’’ is a person or entity that is not a broker/dealer in securities, and does not place more than 390 orders in listed options per day on average during a calendar month for its own beneficial account(s), as defined in ISE Mercury Rule 100(a)(37A). 5 See Securities Exchange Act Release No. 77409 (March 21, 2016), 81 FR 16240 (March 25, 2016) (SR–ISE Mercury–2016–05). 6 The Total Affiliated Priority Customer ADV category includes all Priority Customer volume executed on the Exchange in all symbols and order types, including volume executed in the PIM, Facilitation, and QCC mechanisms. 7 The highest tier threshold attained applies retroactively in a given month to all eligible traded contracts and applies to all eligible market participants. Any day that the market is not open for the entire trading day or the Exchange instructs members in writing to route their orders to other markets may be excluded from the ADV calculation; provided that the Exchange will only remove the day for members that would have a lower ADV with the day included. E:\FR\FM\02MYN1.SGM 02MYN1 26278 Federal Register / Vol. 81, No. 84 / Monday, May 2, 2016 / Notices srobinson on DSK5SPTVN1PROD with NOTICES is the case on ISE Mercury’s affiliated exchanges—the International Securities Exchange, LLC (‘‘ISE’’) and ISE Gemini, LLC (‘‘ISE Gemini’’)—the Exchange’s ADV calculation includes volume executed by affiliated members. In particular, the Exchange aggregates all eligible volume from affiliated members in determining applicable tiers, provided that there is at least 75% common ownership between the members as reflected on the member’s Form BD, Schedule A. While this method of aggregating volume is beneficial to large firms with multiple affiliated members, the Exchange believed that it was also important to give smaller firms the ability to compete for more favorable fees and rebates. On March 10, 2016, the Exchange adopted ADV tiers that are based on preferenced volume 8—i.e., volume directed to a specific Market Maker as provided in Supplementary Material .03 to Rule 713.9 In particular, the Exchange gives Market Makers volume credit for 100% of eligible traded volume preferenced to that member,10 regardless of the actual allocation that the Market Maker receives. For example, assume Market Maker ABC is quoting at the national best bid or offer (‘‘NBBO’’) and receives a Preferenced Order for 10 contracts from an unaffiliated firm for the account of a Priority Customer. If there are other Market Makers quoting at the NBBO, Market Maker ABC may receive an allocation of 4 contracts—i.e., 40% of the order. Rather than counting only the 4 contracts executed towards the Market Maker’s volume total, the Exchange gives that Market Maker credit for the full 10 contracts preferenced to it. This is the same credit the member would receive if the 10 contracts were sent to the exchange by an affiliated member. The purpose of the current rule filing is to clarify that even though Market Maker ABC receives full credit for all 10 contracts when executing 4 contracts, the non-preferenced Market Makers that execute the remaining 6 contracts will still receive credit for 8 See Securities Exchange Act Release No. 77412 (March 21, 2016), 81 FR 16238 (March 25, 2016) (SR–ISE Mercury–2016–06). 9 An Electronic Access Member (‘‘EAM’’) may designate a ‘‘Preferred Market Maker’’ on orders it enters into the System (‘‘Preferenced Orders’’). Supplementary Material .03 to Rule 713 describes the Exchange’s rules concerning Preferenced Orders. 10 ‘‘Eligible volume’’ refers to volume that would otherwise count towards to applicable volume tier. In the case of ADV thresholds based on Total Affiliated Priority Customer ADV, as currently implemented on ISE Mercury, all Priority Customer volume would be ‘‘eligible.’’ See note 6 supra. VerDate Sep<11>2014 20:30 Apr 29, 2016 Jkt 238001 those 6 contracts as they normally would. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the requirements of the Act, and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6(b) of the Act.11 In particular, the proposal is consistent with Section 6(b)(5) of the Act,12 because it is designed to promote just and equitable principles of trade, remove impediments to and perfect the mechanisms of a free and open market and a national market system and, in general, to protect investors and the public interest. The Exchange believes that the proposed clarification is reasonable and equitable because it will eliminate member confusion regarding how volume is counted among Market Makers when contracts are preferenced to a Market Maker and executed by preferenced and non-preferenced Market Makers. B. Self-Regulatory Organization’s Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,13 the Exchange does not believe that the proposed rule change will impose any burden on intermarket or intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. To the contrary, the Exchange believes that the proposed rule change merely clarifies an existing rule already in effect. 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 written comments from members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the proposed rule change does not (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate if consistent with the protection of 11 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 13 15 U.S.C. 78f(b)(8). 12 15 PO 00000 Frm 00081 Fmt 4703 Sfmt 4703 investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 14 and Rule 19b–4(f)(6) thereunder.15 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend 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. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or 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 is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments: • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– ISEMercury–2016–09 on the subject line. Paper Comments • Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–ISEMercury–2016–09. This file number should be included on the subject line if email 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 (https://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 14 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). As required under Rule 19b-4(f)(6)(iii), the Exchange provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and the text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. 15 17 E:\FR\FM\02MYN1.SGM 02MYN1 Federal Register / Vol. 81, No. 84 / Monday, May 2, 2016 / Notices those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. 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– ISEMercury–2016–09, and should be submitted on or before May 23, 2016.16 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. Robert W. Errett, Deputy Secretary. [FR Doc. 2016–10155 Filed 4–29–16; 8:45 am] BILLING CODE 8011–01–P Terra Capital Partners, LLC, et al.; Notice of Application FOR FURTHER INFORMATION CONTACT: April 26, 2016. Securities and Exchange Commission (‘‘Commission’’). ACTION: Notice of an application for an order under sections 57(a)(4) and 57(i) of the Investment Company Act of 1940 (the ‘‘Act’’) and rule 17d–1 under the Act permitting certain joint transactions otherwise prohibited by section 57(a)(4) of the Act and rule 17d–1 under the Act. AGENCY: Terra Capital Partners, LLC (the ‘‘Sponsor’’), Terra Income Fund 6, Inc. (the ‘‘Company’’), Terra Income Advisors, LLC (the ‘‘Advisor’’), on behalf of itself and its successors,1 and Terra Capital Markets, LLC (the ‘‘Dealer Manager’’ and collectively with the Sponsor, the Company, and the Advisor, the ‘‘Applicants’’), on behalf of itself and its successors, request an order to permit the Applicants to complete certain transactions in connection with an amendment to the dealer-manager SUMMARY OF THE APPLICATION: srobinson on DSK5SPTVN1PROD with NOTICES An order granting the application will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission’s Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on May 17, 2016, and should be accompanied by proof of service on the applicants, in the form of an affidavit or, for lawyers, a certificate of service. Pursuant to rule 0–5 under the Act, hearing requests should state the nature of the writer’s interest, any facts bearing upon the desirability of a hearing on the matter, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission’s Secretary. HEARING OR NOTIFICATION OF HEARING: Secretary, U.S. Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. Applicants, Bruce D. Batkin, Terra Income Fund 6, Inc., c/o Terra Capital Partners, LLC, 805 Third Avenue, 8th Floor, New York, New York 10022. [Investment Company Act Release No. 32097; 812–14645] 16 17 CFR 200.30–3(a)(12). term ‘‘successor,’’ as applied to each entity, means an entity that results from a reorganization into another jurisdiction or change in the type of business organization. 1 The 20:30 Apr 29, 2016 The application was filed on April 25, 2016. FILING DATE: ADDRESSES: SECURITIES AND EXCHANGE COMMISSION VerDate Sep<11>2014 agreement entered into by and among the Company, the Advisor, and the Dealer Manager. Jkt 238001 Kieran G. Brown, Senior Counsel, at (202) 551–6773, or James M. Curtis, Branch Chief, at (202) 551–6712 (Chief Counsel’s Office, Division of Investment Management). The following is a summary of the application. The complete application may be obtained via the Commission’s Web site by searching for the file number, or for an applicant using the Company name box, at https:// www.sec.gov/search/search.htm, or by calling (202) 551–8090. SUPPLEMENTARY INFORMATION: Applicants’ Representations 1. The Sponsor is a Delaware limited liability company and served as the organizer and sponsor of the Company. The Sponsor is also the parent company of the Advisor and the Dealer Manager. Since its formation in February 2001, the Sponsor has organized or acted as investment manager for multiple private real estate investment funds (‘‘REITs’’). 2. The Company, a Maryland corporation, is an externally managed, non-diversified, closed-end management investment company that has elected to be regulated as a business development company (‘‘BDC’’) under PO 00000 Frm 00082 Fmt 4703 Sfmt 4703 26279 the Act.2 The Company’s investment Objectives and Strategies 3 are to pay attractive and stable cash distributions and to preserve, protect and return capital contributions to the holders (‘‘Common Shareholders’’) of the Company’s common stock (‘‘Common Shares’’). On March 2, 2015, the Company filed a public registration statement on Form N–2 (the ‘‘Registration Statement’’) with the Commission to offer its Common Shares in a continuous public offering (the ‘‘Offering’’). The Registration Statement was declared effective on April 20, 2015. Since commencing the Offering and through April 14, 2016, the Company has sold 2,444,185.856 Common Shares, including Common Shares purchased by the Sponsor in both an initial private placement and from the Offering. The Company currently has a five-member board of directors (the ‘‘Board’’) of whom three are not ‘‘interested persons’’ of the Company within the meaning of section 2(a)(19) of the Act (the ‘‘Non-interested Directors’’). 3. The Advisor is a Delaware limited liability company that is registered as an investment adviser under the Investment Advisers Act of 1940. The Advisor serves as the investment adviser to the Company. 4. The Dealer Manager is a Delaware limited liability company that serves as the dealer manager of the Company pursuant to a dealer manager agreement dated April 20, 2015 by and among the Company, the Advisor and the Dealer Manager (the ‘‘Dealer Manager Agreement’’). The Dealer Manager is duly registered as a broker-dealer pursuant to the provisions of the 1934 Act, a member in good standing with the Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’), and a broker dealer duly registered as such in those states where the Dealer Manager is required to be registered in order to carry out the Offering. 5. Currently, the Common Shares are sold at a public offering price of $12.50 2 The Company was incorporated in Maryland in 2013 and commenced operations on June 24, 2015, upon raising gross proceeds in excess of $2.0 million in its initial public offering. Section 2(a)(48) defines a BDC to be any closed-end investment company that operates for the purpose of making investments in securities described in sections 55(a)(1) through 55(a)(3) of the Act and makes available significant managerial assistance with respect to the issuers of such securities. 3 The ‘‘Objectives and Strategies’’ means the investment objectives and strategies, as described in the Registration Statement, other filings the Company has made with the Commission under the Securities Act of 1933, as amended or under the Securities Exchange Act of 1934, as amended (the ‘‘1934 Act’’), and the Company’s reports to Common Shareholders. E:\FR\FM\02MYN1.SGM 02MYN1

Agencies

[Federal Register Volume 81, Number 84 (Monday, May 2, 2016)]
[Notices]
[Pages 26277-26279]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-10155]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77716; File No. SR-ISEMercury-2016-09]


Self-Regulatory Organizations; ISE Mercury, LLC; Notice of Filing 
of Proposed Rule Change Relating to Preferenced Volume

April 26, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on April 13, 2016, ISE Mercury, LLC (the ``Exchange'' or ``ISE 
Mercury'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The purpose of this proposed rule change is to amend the Exchange's 
Schedule of Fees to explain that while 100% of eligible traded volume 
preferenced to a Market Maker counts towards that member's volume 
tiers, Market Makers not preferenced on an order will receive credit 
for the volume those non-preferenced members execute. The text of the 
proposed rule change is available on the Exchange's Web site (https://www.ise.com), at the principal office of the Exchange, and at the 
Commission's Public Reference Room.

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 self-regulatory organization 
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 self-regulatory organization 
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
    On March 10, 2016, ISE Mercury introduced fee and rebate tiers for 
Market Maker \3\ and Priority Customer \4\ orders based on the average 
daily volume (``ADV'') that a member executes in Priority Customer 
orders.\5\ The Exchange assesses fees and rebates for Market Maker and 
Priority Customer orders based on five tiers of Total Affiliated 
Priority Customer ADV, as described in Table 4 of the Fee Schedule: \6\ 
0--19,999 contracts (``Tier 1''), 20,000--39,999 contracts (``Tier 
2''), 40,000--59,999 contracts (``Tier 3''), 60,000--79,999 contracts 
(``Tier 4''), and 80,000 or more contracts (``Tier 5'').\7\ As

[[Page 26278]]

is the case on ISE Mercury's affiliated exchanges--the International 
Securities Exchange, LLC (``ISE'') and ISE Gemini, LLC (``ISE 
Gemini'')--the Exchange's ADV calculation includes volume executed by 
affiliated members. In particular, the Exchange aggregates all eligible 
volume from affiliated members in determining applicable tiers, 
provided that there is at least 75% common ownership between the 
members as reflected on the member's Form BD, Schedule A. While this 
method of aggregating volume is beneficial to large firms with multiple 
affiliated members, the Exchange believed that it was also important to 
give smaller firms the ability to compete for more favorable fees and 
rebates.
---------------------------------------------------------------------------

    \3\ The term Market Makers refers to ``Competitive Market 
Makers'' and ``Primary Market Makers'' collectively.
    \4\ A ``Priority Customer'' is a person or entity that is not a 
broker/dealer in securities, and does not place more than 390 orders 
in listed options per day on average during a calendar month for its 
own beneficial account(s), as defined in ISE Mercury Rule 
100(a)(37A).
    \5\ See Securities Exchange Act Release No. 77409 (March 21, 
2016), 81 FR 16240 (March 25, 2016) (SR-ISE Mercury-2016-05).
    \6\ The Total Affiliated Priority Customer ADV category includes 
all Priority Customer volume executed on the Exchange in all symbols 
and order types, including volume executed in the PIM, Facilitation, 
and QCC mechanisms.
    \7\ The highest tier threshold attained applies retroactively in 
a given month to all eligible traded contracts and applies to all 
eligible market participants. Any day that the market is not open 
for the entire trading day or the Exchange instructs members in 
writing to route their orders to other markets may be excluded from 
the ADV calculation; provided that the Exchange will only remove the 
day for members that would have a lower ADV with the day included.
---------------------------------------------------------------------------

    On March 10, 2016, the Exchange adopted ADV tiers that are based on 
preferenced volume \8\--i.e., volume directed to a specific Market 
Maker as provided in Supplementary Material .03 to Rule 713.\9\ In 
particular, the Exchange gives Market Makers volume credit for 100% of 
eligible traded volume preferenced to that member,\10\ regardless of 
the actual allocation that the Market Maker receives. For example, 
assume Market Maker ABC is quoting at the national best bid or offer 
(``NBBO'') and receives a Preferenced Order for 10 contracts from an 
unaffiliated firm for the account of a Priority Customer. If there are 
other Market Makers quoting at the NBBO, Market Maker ABC may receive 
an allocation of 4 contracts--i.e., 40% of the order. Rather than 
counting only the 4 contracts executed towards the Market Maker's 
volume total, the Exchange gives that Market Maker credit for the full 
10 contracts preferenced to it. This is the same credit the member 
would receive if the 10 contracts were sent to the exchange by an 
affiliated member. The purpose of the current rule filing is to clarify 
that even though Market Maker ABC receives full credit for all 10 
contracts when executing 4 contracts, the non-preferenced Market Makers 
that execute the remaining 6 contracts will still receive credit for 
those 6 contracts as they normally would.
---------------------------------------------------------------------------

    \8\ See Securities Exchange Act Release No. 77412 (March 21, 
2016), 81 FR 16238 (March 25, 2016) (SR-ISE Mercury-2016-06).
    \9\ An Electronic Access Member (``EAM'') may designate a 
``Preferred Market Maker'' on orders it enters into the System 
(``Preferenced Orders''). Supplementary Material .03 to Rule 713 
describes the Exchange's rules concerning Preferenced Orders.
    \10\ ``Eligible volume'' refers to volume that would otherwise 
count towards to applicable volume tier. In the case of ADV 
thresholds based on Total Affiliated Priority Customer ADV, as 
currently implemented on ISE Mercury, all Priority Customer volume 
would be ``eligible.'' See note 6 supra.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the requirements of the Act, and the rules and regulations 
thereunder that are applicable to a national securities exchange, and, 
in particular, with the requirements of Section 6(b) of the Act.\11\ In 
particular, the proposal is consistent with Section 6(b)(5) of the 
Act,\12\ because it is designed to promote just and equitable 
principles of trade, remove impediments to and perfect the mechanisms 
of a free and open market and a national market system and, in general, 
to protect investors and the public interest. The Exchange believes 
that the proposed clarification is reasonable and equitable because it 
will eliminate member confusion regarding how volume is counted among 
Market Makers when contracts are preferenced to a Market Maker and 
executed by preferenced and non-preferenced Market Makers.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\13\ the Exchange 
does not believe that the proposed rule change will impose any burden 
on intermarket or intramarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. To the contrary, 
the Exchange believes that the proposed rule change merely clarifies an 
existing rule already in effect.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

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 written comments from members or other interested parties.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the proposed rule change does not (i) significantly affect 
the protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative for 30 
days from the date on which it was filed, or such shorter time as the 
Commission may designate if consistent with the protection of investors 
and the public interest, the proposed rule change has become effective 
pursuant to Section 19(b)(3)(A) of the Act \14\ and Rule 19b-4(f)(6) 
thereunder.\15\
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written 
notice of its intent to file the proposed rule change, along with a 
brief description and the text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission.
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend 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. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or 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 is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments:

     Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-ISEMercury-2016-09 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-ISEMercury-2016-09. This 
file number should be included on the subject line if email 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 (https://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

[[Page 26279]]

those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. 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-ISEMercury-2016-09, and 
should be submitted on or before May 23, 2016.\16\
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    \16\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-10155 Filed 4-29-16; 8:45 am]
 BILLING CODE 8011-01-P
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