Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Two Market Data Feeds, 47627-47630 [2011-19854]
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Federal Register / Vol. 76, No. 151 / Friday, August 5, 2011 / Notices
training will be provided via the same
delivery method, except with more
certainty both as to when the FMCE
Program will be delivered and the total
cost.
In the past, the Exchange has sought
to assess the FMCE Program fee to
recoup development and delivery costs,
crediting revenues exceeding a year’s
actual development and delivery costs
to the succeeding year’s budgeted costs.
Now that FINRA develops and
administers the FMCE Program on the
Exchange’s behalf, the FINRA costs are
subsumed in the larger fee paid to
FINRA for the provision of regulatory
services. The Exchange continues to
incur costs related to configuration,
maintenance and hosting associated
with FMCE delivery and billing. In
balancing the costs to the Exchange, the
Exchange also weighs the increasing
burden on Floor members to absorb
those costs. At the time the fee was last
assessed in 2009, the number of
qualified members subject to the FMCE
Program requirement was 524. That
number is now 467. In view of these
declining membership numbers, the
Exchange believes that the full costs
associated with the FMCE Program
should not be shifted to the Floor
members. The Exchange believes that
the proposed $300 annual fee strikes the
appropriate balance between recouping
certain costs associated with the FMCE
Program from Floor members, without
burdening a shrinking population with
the full costs.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
the provisions of Section 6 of the
Securities Exchange Act of 1934 (the
‘‘Act’’),3 in general, and Section 6(b)(4)
of the Act,4 in particular, in that it is
designed to provide for the equitable
allocation of reasonable dues, fees, and
other charges among its members and
other persons using its facilities.
erowe on DSKG8SOYB1PROD with NOTICES
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will 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
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change is effective
upon filing pursuant to Section
19(b)(3)(A) 5 of the Act and
subparagraph (f)(2) of Rule 19b–4 6
thereunder, because it establishes a due,
fee, or other charge imposed by the
NYSE.
At any time within 60 days of the
filing of such 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.
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 e-mail to rulecomments@sec.gov. Please include File
Number SR–NYSE–2011–37 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–NYSE–2011–37. 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 (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
printing in the Commission’s Public
Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official
business days between the hours of 10
a.m. and 3 p.m. Copies of the 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–NYSE–
2011–37 and should be submitted on or
before August 26, 2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.7
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011–19853 Filed 8–4–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–65000; File No. SR–ISE–
2011–44]
Self-Regulatory Organizations;
International Securities Exchange,
LLC; Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change Relating to Two Market Data
Feeds
August 1, 2011.
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 August 1,
2011, the International Securities
Exchange, LLC (the ‘‘Exchange’’ or the
‘‘ISE’’) 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 Exchange.
The Commission is publishing this
notice to solicit comments on the
proposed rule change from interested
persons.
7 17
3 15
U.S.C. 78f(b).
4 15 U.S.C. 78f(b)(4).
VerDate Mar<15>2010
15:16 Aug 04, 2011
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
5 15
U.S.C. 78s(b)(3)(A).
6 17 CFR 240.19b–4(f)(2).
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Federal Register / Vol. 76, No. 151 / Friday, August 5, 2011 / Notices
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to adopt two
new market data offerings, the ISE Top
Quote Feed and the ISE Spread Book
Feed. 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
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
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
ISE proposes to adopt two new market
data offerings, the ISE Top Quote Feed
and the ISE Spread Book Feed. These
two new data feeds were created as part
of the Exchange’s transition to its new
trading platform called Optimise. The
Exchange expects to fully transition to
the Optimise trading platform by the
end of July 2011. Thus, the Exchange
proposes to implement both new market
data offerings on August 1, 2011.
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ISE Top Quote Feed
ISE currently produces a real-time
data feed with the Best Bid/Offer, or
BBO, that includes the aggregate size
from all outstanding quotes and orders
at the top price level, or the ‘‘top of
book’’ and all trades that are executed
on the Exchange. This ‘‘core’’ 3 data is
formatted according to Options Price
Reporting Authority (‘‘OPRA’’)
specification and sent to OPRA for
redistribution to the public.
The Exchange now proposes to offer
a non-core data feed, called the ISE Top
Quote Feed (‘‘Top Quote’’). Top Quote
3 ‘‘Core’’ data refers to the best-priced quotations
and comprehensive last sale reports of all markets
that the Commission requires a central processor to
consolidate and distribute to the public pursuant to
joint-SRO plans. ‘‘Non-core’’ data refers to products
other than the consolidated products that markets
offer collectively under joint industry plans.
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15:16 Aug 04, 2011
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is a real-time feed that aggregates all
quotes and orders at the top price level
on the Exchange, on both the bid and
offer side of the market. Top Quote
provides subscribers with a
consolidated view of tradable prices at
the BBO, the same data that is displayed
on the OPRA feed. Top Quote shows
bid/ask quote size for Customer and
Professional Customer option orders for
ISE traded options that are not currently
distinguishable through the OPRA
feed.4 The identification of Customer
orders is useful for market makers and
market participants generally since
Customer orders take precedence over
all other order types on the ISE. The
Exchange believes it is not
discriminatory or a burden on
competition for these orders to be
identified because doing so increases
the likelihood that these orders will be
executed as they have priority on the
ISE while Professional Customers, i.e.,
persons or entities that (i) are not a
broker or dealer in securities, and (ii)
place more than 390 orders in listed
options per day on average during a
calendar month for its own beneficial
account(s), do not have priority on the
Exchange.
Top Quote is currently imbedded in
the Exchange’s Depth of Market data
feed offering and is available to
subscribers of the Depth of Market data
feed offering. With this proposal, the
Exchange is offering Top Quote as a
separate data feed. Top Quote will be
available to members and non-members,
and to both professionals and nonprofessionals.
ISE Spread Book Feed
The Exchange also proposes to offer
another non-core data feed, called the
ISE Spread Book Feed (‘‘Spread Feed’’).
The Spread Feed is a real-time feed that
consists of options quotes and orders for
all complex orders (i.e., spreads, buywrites, delta neutral strategies, etc.)
aggregated at the top price level on both
the bid and offer side of the market as
well as all aggregated quotes and orders
for complex orders at the top five price
levels on both the bid and offer side of
the market. In addition, the Spread Feed
4 Customer and Professional Customer orders are
identified in a number of market data offerings
currently sold by other options exchanges. See
Securities Exchange Act Release No. 63351
(November 10, 2010), 75 FR 73140 (November 29,
2010) (SR–PHLX–2010–154) (Notice of Filing and
Immediate Effectiveness of Proposed Rule Change
Relating to Fees for the PHOTO Historical Data
Product). See also Securities Exchange Act Release
No. 63997 (March 1, 2011), 76 FR 12388 (March 7,
2011) (SR–CBOE–2011–014) (Notice of Filing and
Immediate Effectiveness of Proposed Rule Change
To Codify a Fee Schedule for the Sale by Market
Data Express, LLC, of a BBO Data Feed for CBOE
Listed Options).
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provides real-time updates every time a
new complex limit order that is not
immediately executable at the BBO is
placed on the ISE complex order book.
The Spread Feed shows bid/ask quote
size for Customer and Professional
Customer option orders for ISE traded
options. As noted above, since Customer
orders take precedence over all other
order types, the identification of these
orders in the Spread Feed is useful
information for market makers and
market participants generally. Again,
the Exchange believes it is not
discriminatory or a burden on
competition for these orders to be
identified because doing so increases
the likelihood that these orders will be
executed as they have priority on the
ISE while Professional Customers, i.e.,
persons or entities that (i) are not a
broker or dealer in securities, and (ii)
place more than 390 orders in listed
options per day on average during a
calendar month for its own beneficial
account(s), do not have priority on the
Exchange.
The Exchange further notes that ISE
Market Makers currently receive a
spread book data feed as part of their
membership. The Spread Feed will be
available to members and non-members
and to both professionals and nonprofessionals.
2. Basis
ISE believes that the proposed rule
change is consistent with the provisions
of Section 6 of the Securities Exchange
Act of 1934 (the ‘‘Act’’),5 in general and
with Section 6(b)(5) of the Act,6 in
particular in that it is designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, to foster
cooperation and coordination with
persons engaged in regulating, clearing,
settling, processing information with
respect to, and facilitating transactions
in securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest.
In adopting Regulation NMS, the
Commission granted self-regulatory
organizations and broker-dealers
increased authority and flexibility to
offer new and unique market data to the
public. It was believed that this
authority would expand the amount of
data available to consumers, and also
spur innovation and competition for the
provision of market data. ISE believes
that this proposal is in keeping with
those principles by promoting increased
5 15
6 15
E:\FR\FM\05AUN1.SGM
U.S.C. 78f.
U.S.C. 78f(b)(5).
05AUN1
Federal Register / Vol. 76, No. 151 / Friday, August 5, 2011 / Notices
transparency through the dissemination
of more useful proprietary data and also
by clarifying its availability to market
participants.
Additionally, ISE is making a
voluntary decision to make this data
available. ISE is not required by the Act
in the first instance to make the data
available, unlike the best bid and offer
which must be made available under the
Act. ISE chooses to make the data
available as proposed in order to
improve market quality, to attract order
flow, and to increase transparency.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
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.
The Exchange believes that Top Quote
and Spread Feed will help attract new
users and new order flow to the
Exchange, thereby improving the
Exchange’s ability to compete in the
market for options order flow and
executions.
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.
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III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Pursuant to Section 19(b)(3)(A) of the
Act 7 and Rule 19b–4(f)(6) 8 thereunder,
the Exchange has designated this
proposal as one that effects a change
that: (i) Does not significantly affect the
protection of investors or the public
interest; (ii) does not impose any
significant burden on competition; and
(iii) by its terms, does not become
operative for 30 days after the date of
the filing, or such shorter time as the
Commission may designate if consistent
with the protection of investors and the
public interest. Rule 19b–4(f)(6) 9
requires a self-regulatory organization to
give the Commission written notice of
its intent to file 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
7 15
8 17
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
9 Id.
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15:16 Aug 04, 2011
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designated by the Commission. The
Exchange has satisfied this requirement.
Under Rule 19b–4(f)(6) of the Act,10 a
proposal does not become operative for
30 days after the date of its filing, or
such shorter time as the Commission
may designate if consistent with the
protection of investors and the public
interest. The Exchange requests that the
Commission waive the 30 day operative
period for this filing so that it may
become effective and operative upon
filing with the Commission pursuant to
Section 19(b)(3)(A) 11 of the Act and
subparagraph (f)(6) thereunder. The
Exchange believes waiving the 30-day
operative delay is consistent with the
protection of investors and the public
interest as the waiver will allow the
Exchange to provide equal access to the
Spread Feed to all market participants
on equal and non-discriminatory terms.
Currently, only market makers receive a
spread book data feed from the
Exchange’s legacy trading system; no
other market participant has access to
the legacy trading system’s spread book
data feed.12 In the absence of the waiver,
only market makers will be able to
access the Spread Feed, albeit a subset
of the feed, i.e., the top of book, whereas
all other market participants will not
have any access to the Spread Feed.
Further, the Exchange notes that
without access to Top Quote once the
Exchange has fully transitioned to its
new trading system, the likelihood that
retail orders, who receive priority on the
Exchange over other orders, being
executed will be adversely affected as
the existence of these orders will not be
known to market participants who seek
to interact with them. While market
participants will be able to access the
data in Top Quote by subscribing to the
Exchange’s Depth of Market data feed,
they are unlikely to do so due to the cost
of the Depth of Market data feed.
Additionally, waiver of the 30-day
operative delay will allow the Exchange
to compete for order flow with those
exchanges that already sell market data
offerings that compete with Top Quote
and Spread Feed.13
10 Id.
11 15
U.S.C. 78s(b)(3)(A).
Spread Feed and the spread book data feed
are essentially the same feed offered on different
platforms.
13 For example, NASDAQ Stock Market
(‘‘NASDAQ’’) and NASDAQ OMX PHLX (‘‘Phlx’’)
each offer a market data product that is similar to
Top Quote. NASDAQ’s Best of NASDAQ Options
(‘‘BONOSM) offering is a data feed that shows the
top of the market. Phlx’s Top of Phlx Options
(‘‘TOPO’’) shows orders and quotes at the top of the
market, as well as trades. Market Data Express, LLC,
a subsidiary of the Chicago Board Options
Exchange, Inc. (‘‘CBOE’’), offers a market data
product that is similar to Spread Feed. The CBOE
12 The
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47629
For the reasons stated above, the
Commission believes that waiving the
30-day operative delay is consistent
with the protection of investors and the
public interest and designates the
proposal as operative upon filing.14
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.
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 E-mail to rulecomments@sec.gov. Please include File
No. SR–ISE–2011–44 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–ISE–2011–44. 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 (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
BBO Data Feed includes, among other things,
customer versus non-customer contracts at the BBO
and BBO data and last sale data for complex
strategies (e.g., spreads, straddles, buy-writes, etc.).
14 For purposes only of waiving the operative
delay of this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f). See also 17 CFR 200.30–3(a)(59).
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Federal Register / Vol. 76, No. 151 / Friday, August 5, 2011 / Notices
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
a.m. and 3 p.m. Copies of such filing
also will be available for inspection and
copying at the principal office of the
ISE. 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–2011–44 and should be
submitted by August 26, 2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011–19854 Filed 8–4–11; 8:45 am]
BILLING CODE 8011–01–P
[Release No. 34–65002; File No. SR–ISE–
2011–50]
Self-Regulatory Organizations;
International Securities Exchange,
LLC; Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change Relating to Market Data Fees
August 1, 2011.
erowe on DSKG8SOYB1PROD with NOTICES
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 August 1,
2011, the International Securities
Exchange, LLC (the ‘‘Exchange’’ or the
‘‘ISE’’) 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.
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 to adopt subscription
fees for the sale of two market data
offerings, the ISE Top Quote Feed and
the ISE Spread Book Feed. The text of
the proposed rule change is available on
the Exchange’s Web site https://
15 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
15:16 Aug 04, 2011
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
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
SECURITIES AND EXCHANGE
COMMISSION
VerDate Mar<15>2010
www.ise.com, at the principal office of
the Exchange, and at the Commission’s
Public Reference Room.
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ISE proposes to amend its Schedule of
Fees to adopt subscription fees for the
sale of two market data offerings, the
ISE Top Quote Feed and the ISE Spread
Book Feed. The Exchange previously
submitted a proposed rule change to
establish the two data feeds.3 The
Exchange proposes to implement the
proposed fees for both market data
offerings on August 1, 2011.
ISE Top Quote Feed
The ISE Top Quote Feed (‘‘Top
Quote’’) is a real-time feed that
aggregates all quotes and orders at the
top price level on the Exchange, on both
the bid and offer side of the market. Top
Quote provides subscribers with a
consolidated view of tradable prices at
the BBO, the same data that is displayed
on the OPRA feed. Top Quote shows
bid/ask quote size for Customer and
Professional Customer option orders for
ISE traded options that are not currently
distinguishable through the OPRA
feed.4 The identification of Customer
orders is useful for market makers and
market participants generally since
3 See
SR–ISE–2011–44.
and Professional Customer orders are
identified in a number of market data offerings
currently sold by other options exchanges on a
subscription basis. See Securities Exchange Act
Release No. 63351 (November 10, 2010), 75 FR
73140 (November 29, 2010) (SR–PHLX–2010–154)
(Notice of Filing and Immediate Effectiveness of
Proposed Rule Change Relating to Fees for the
PHOTO Historical Data Product). See also
Securities Exchange Act Release No. 63997 (March
1, 2011), 76 FR 12388 (March 7, 2011) (SR–CBOE–
2011–014) (Notice of Filing and Immediate
Effectiveness of Proposed Rule Change To Codify a
Fee Schedule for the Sale by Market Data Express,
LLC, of a BBO Data Feed for CBOE Listed Options).
4 Customer
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Customer orders take precedence over
all other order types on the ISE. The
Exchange believes it is not
discriminatory or a burden on
competition for these orders to be
identified because doing so increases
the likelihood that these orders will be
executed as they have priority on the
ISE while Professional Customers, i.e.,
persons or entities that (i) Are not a
broker or dealer in securities, and (ii)
place more than 390 orders in listed
options per day on average during a
calendar month for its own beneficial
account(s), do not have priority on the
Exchange.
Top Quote is currently imbedded in
the Exchange’s Depth of Market data
feed offering and is available to
subscribers of the Depth of Market data
feed offering. With this proposed rule
change, the Exchange is offering Top
Quote as a separate subscription-based
data feed. Top Quote will be available
to members and non-members, and to
both professional and non-professional
subscribers.
Proposed Fees for Top Quote
The Exchange proposes to charge
distributors 5 of Top Quote $3,000 per
month. In addition, the Exchange
proposes to charge a monthly controlled
device 6 fee of $20 per controlled device
for Professionals at a distributor where
the data is for internal and/or external
use. There are no monthly controlled
device fees proposed for NonProfessionals subscribers to Top Quote.
Further, the Exchange proposes to adopt
an enterprise license fee, regardless of
the number of controlled devices, as
follows: (i) $4,000 for Professionals at a
distributor where the data is for internal
use only, (ii) $5,000 for Professionals at
a distributor where the data is for
internal and/or external use in a
controlled device and (iii) $3,000 per
month for Non-Professionals.
ISE Spread Book Feed
The ISE Spread Book Feed (‘‘Spread
Feed’’) is a real-time feed that consists
5 ISE proposes that a ‘‘distributor’’ be defined as
any firm that receives a ISE data feed directly from
ISE or indirectly through a vendor and then
distributes it either internally or externally. Further,
ISE proposes that all distributors execute an ISE
distributor agreement.
6 ISE proposes that a ‘‘controlled device’’ be
defined as any device that a distributor of the ISE
Top Quote Feed permits to: (a) Access the
information in the Top Quote Feed offering, or (b)
communicate with the distributor so as to cause the
distributor to access the information in the Top
Quote Feed offering. If a controlled device is part
of an electronic network between computers used
for investment, trading or order routing activities,
the burden will be on the distributor to demonstrate
that the particular controlled device should not be
subject to the proposed fees.
E:\FR\FM\05AUN1.SGM
05AUN1
]]>Agencies
[Federal Register Volume 76, Number 151 (Friday, August 5, 2011)]
[Notices]
[Pages 47627-47630]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-19854]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-65000; File No. SR-ISE-2011-44]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change Relating to Two Market Data Feeds
August 1, 2011.
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 August 1, 2011, the International Securities Exchange, LLC (the
``Exchange'' or the ``ISE'') 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 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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[[Page 47628]]
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to adopt two new market data offerings, the
ISE Top Quote Feed and the ISE Spread Book Feed. 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 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 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
ISE proposes to adopt two new market data offerings, the ISE Top
Quote Feed and the ISE Spread Book Feed. These two new data feeds were
created as part of the Exchange's transition to its new trading
platform called Optimise. The Exchange expects to fully transition to
the Optimise trading platform by the end of July 2011. Thus, the
Exchange proposes to implement both new market data offerings on August
1, 2011.
ISE Top Quote Feed
ISE currently produces a real-time data feed with the Best Bid/
Offer, or BBO, that includes the aggregate size from all outstanding
quotes and orders at the top price level, or the ``top of book'' and
all trades that are executed on the Exchange. This ``core'' \3\ data is
formatted according to Options Price Reporting Authority (``OPRA'')
specification and sent to OPRA for redistribution to the public.
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\3\ ``Core'' data refers to the best-priced quotations and
comprehensive last sale reports of all markets that the Commission
requires a central processor to consolidate and distribute to the
public pursuant to joint-SRO plans. ``Non-core'' data refers to
products other than the consolidated products that markets offer
collectively under joint industry plans.
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The Exchange now proposes to offer a non-core data feed, called the
ISE Top Quote Feed (``Top Quote''). Top Quote is a real-time feed that
aggregates all quotes and orders at the top price level on the
Exchange, on both the bid and offer side of the market. Top Quote
provides subscribers with a consolidated view of tradable prices at the
BBO, the same data that is displayed on the OPRA feed. Top Quote shows
bid/ask quote size for Customer and Professional Customer option orders
for ISE traded options that are not currently distinguishable through
the OPRA feed.\4\ The identification of Customer orders is useful for
market makers and market participants generally since Customer orders
take precedence over all other order types on the ISE. The Exchange
believes it is not discriminatory or a burden on competition for these
orders to be identified because doing so increases the likelihood that
these orders will be executed as they have priority on the ISE while
Professional Customers, i.e., persons or entities that (i) are not a
broker or dealer in securities, and (ii) place more than 390 orders in
listed options per day on average during a calendar month for its own
beneficial account(s), do not have priority on the Exchange.
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\4\ Customer and Professional Customer orders are identified in
a number of market data offerings currently sold by other options
exchanges. See Securities Exchange Act Release No. 63351 (November
10, 2010), 75 FR 73140 (November 29, 2010) (SR-PHLX-2010-154)
(Notice of Filing and Immediate Effectiveness of Proposed Rule
Change Relating to Fees for the PHOTO Historical Data Product). See
also Securities Exchange Act Release No. 63997 (March 1, 2011), 76
FR 12388 (March 7, 2011) (SR-CBOE-2011-014) (Notice of Filing and
Immediate Effectiveness of Proposed Rule Change To Codify a Fee
Schedule for the Sale by Market Data Express, LLC, of a BBO Data
Feed for CBOE Listed Options).
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Top Quote is currently imbedded in the Exchange's Depth of Market
data feed offering and is available to subscribers of the Depth of
Market data feed offering. With this proposal, the Exchange is offering
Top Quote as a separate data feed. Top Quote will be available to
members and non-members, and to both professionals and non-
professionals.
ISE Spread Book Feed
The Exchange also proposes to offer another non-core data feed,
called the ISE Spread Book Feed (``Spread Feed''). The Spread Feed is a
real-time feed that consists of options quotes and orders for all
complex orders (i.e., spreads, buy-writes, delta neutral strategies,
etc.) aggregated at the top price level on both the bid and offer side
of the market as well as all aggregated quotes and orders for complex
orders at the top five price levels on both the bid and offer side of
the market. In addition, the Spread Feed provides real-time updates
every time a new complex limit order that is not immediately executable
at the BBO is placed on the ISE complex order book. The Spread Feed
shows bid/ask quote size for Customer and Professional Customer option
orders for ISE traded options. As noted above, since Customer orders
take precedence over all other order types, the identification of these
orders in the Spread Feed is useful information for market makers and
market participants generally. Again, the Exchange believes it is not
discriminatory or a burden on competition for these orders to be
identified because doing so increases the likelihood that these orders
will be executed as they have priority on the ISE while Professional
Customers, i.e., persons or entities that (i) are not a broker or
dealer in securities, and (ii) place more than 390 orders in listed
options per day on average during a calendar month for its own
beneficial account(s), do not have priority on the Exchange.
The Exchange further notes that ISE Market Makers currently receive
a spread book data feed as part of their membership. The Spread Feed
will be available to members and non-members and to both professionals
and non-professionals.
2. Basis
ISE believes that the proposed rule change is consistent with the
provisions of Section 6 of the Securities Exchange Act of 1934 (the
``Act''),\5\ in general and with Section 6(b)(5) of the Act,\6\ in
particular in that it is designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest.
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\5\ 15 U.S.C. 78f.
\6\ 15 U.S.C. 78f(b)(5).
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In adopting Regulation NMS, the Commission granted self-regulatory
organizations and broker-dealers increased authority and flexibility to
offer new and unique market data to the public. It was believed that
this authority would expand the amount of data available to consumers,
and also spur innovation and competition for the provision of market
data. ISE believes that this proposal is in keeping with those
principles by promoting increased
[[Page 47629]]
transparency through the dissemination of more useful proprietary data
and also by clarifying its availability to market participants.
Additionally, ISE is making a voluntary decision to make this data
available. ISE is not required by the Act in the first instance to make
the data available, unlike the best bid and offer which must be made
available under the Act. ISE chooses to make the data available as
proposed in order to improve market quality, to attract order flow, and
to increase transparency.
B. Self-Regulatory Organization's Statement on Burden on Competition
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. The Exchange believes that Top Quote and Spread Feed will help
attract new users and new order flow to the Exchange, thereby improving
the Exchange's ability to compete in the market for options order flow
and executions.
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
Pursuant to Section 19(b)(3)(A) of the Act \7\ and Rule 19b-4(f)(6)
\8\ thereunder, the Exchange has designated this proposal as one that
effects a change that: (i) Does not significantly affect the protection
of investors or the public interest; (ii) does not impose any
significant burden on competition; and (iii) by its terms, does not
become operative for 30 days after the date of the filing, or such
shorter time as the Commission may designate if consistent with the
protection of investors and the public interest. Rule 19b-4(f)(6) \9\
requires a self-regulatory organization to give the Commission written
notice of its intent to file 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. The Exchange has
satisfied this requirement.
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\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 17 CFR 240.19b-4(f)(6).
\9\ Id.
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Under Rule 19b-4(f)(6) of the Act,\10\ a proposal does not become
operative for 30 days after the date of its filing, or such shorter
time as the Commission may designate if consistent with the protection
of investors and the public interest. The Exchange requests that the
Commission waive the 30 day operative period for this filing so that it
may become effective and operative upon filing with the Commission
pursuant to Section 19(b)(3)(A) \11\ of the Act and subparagraph (f)(6)
thereunder. The Exchange believes waiving the 30-day operative delay is
consistent with the protection of investors and the public interest as
the waiver will allow the Exchange to provide equal access to the
Spread Feed to all market participants on equal and non-discriminatory
terms. Currently, only market makers receive a spread book data feed
from the Exchange's legacy trading system; no other market participant
has access to the legacy trading system's spread book data feed.\12\ In
the absence of the waiver, only market makers will be able to access
the Spread Feed, albeit a subset of the feed, i.e., the top of book,
whereas all other market participants will not have any access to the
Spread Feed.
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\10\ Id.
\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ The Spread Feed and the spread book data feed are
essentially the same feed offered on different platforms.
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Further, the Exchange notes that without access to Top Quote once
the Exchange has fully transitioned to its new trading system, the
likelihood that retail orders, who receive priority on the Exchange
over other orders, being executed will be adversely affected as the
existence of these orders will not be known to market participants who
seek to interact with them. While market participants will be able to
access the data in Top Quote by subscribing to the Exchange's Depth of
Market data feed, they are unlikely to do so due to the cost of the
Depth of Market data feed.
Additionally, waiver of the 30-day operative delay will allow the
Exchange to compete for order flow with those exchanges that already
sell market data offerings that compete with Top Quote and Spread
Feed.\13\
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\13\ For example, NASDAQ Stock Market (``NASDAQ'') and NASDAQ
OMX PHLX (``Phlx'') each offer a market data product that is similar
to Top Quote. NASDAQ's Best of NASDAQ Options (``BONO\SM\) offering
is a data feed that shows the top of the market. Phlx's Top of Phlx
Options (``TOPO'') shows orders and quotes at the top of the market,
as well as trades. Market Data Express, LLC, a subsidiary of the
Chicago Board Options Exchange, Inc. (``CBOE''), offers a market
data product that is similar to Spread Feed. The CBOE BBO Data Feed
includes, among other things, customer versus non-customer contracts
at the BBO and BBO data and last sale data for complex strategies
(e.g., spreads, straddles, buy-writes, etc.).
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For the reasons stated above, the Commission believes that waiving
the 30-day operative delay is consistent with the protection of
investors and the public interest and designates the proposal as
operative upon filing.\14\
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\14\ For purposes only of waiving the operative delay of this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. See 15 U.S.C.
78c(f). See also 17 CFR 200.30-3(a)(59).
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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.
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 E-mail to rule-comments@sec.gov. Please include
File No. SR-ISE-2011-44 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-ISE-2011-44. 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 (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
[[Page 47630]]
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
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of the ISE. 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-2011-44 and should be
submitted by August 26, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-19854 Filed 8-4-11; 8:45 am]
BILLING CODE 8011-01-P
