Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Add Another Tier to an Existing Rebate Program for Qualified Contingent Cross Orders and Solicitation Orders Executed on the Exchange, 70789-70790 [2011-29392]

Download as PDF Federal Register / Vol. 76, No. 220 / Tuesday, November 15, 2011 / Notices A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change SECURITIES AND EXCHANGE COMMISSION [Release No. 34–65705; File No. SR–ISE– 2011–70] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Add Another Tier to an Existing Rebate Program for Qualified Contingent Cross Orders and Solicitation Orders Executed on the Exchange November 8, 2011. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Exchange Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that, on October 25, 2011, the International Securities Exchange, LLC (the ‘‘Exchange’’ or the ‘‘ISE’’) filed with the Securities and Exchange Commission (the ‘‘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. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The ISE is proposing to add another tier to an existing rebate program for Qualified Contingent Cross (‘‘QCC’’) orders and Solicitation orders. 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. mstockstill on DSK4VPTVN1PROD with NOTICES 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. 1 15 2 17 19:06 Nov 14, 2011 Jkt 226001 3,500,000+ ........................ Rebate per contract 0.07 Further, the Exchange currently assesses per contract transaction charges and credits to market participants that add or remove liquidity from the Exchange (‘‘maker/taker fees’’) in a select number of options classes (the ‘‘Select Symbols’’).4 For Solicitation orders in the Select Symbols, the Exchange currently provides a rebate of $0.15 to contracts that do not trade with the contra order in the Solicited Order Mechanism. The Exchange does not propose any change to that rebate and that rebate will continue to apply. The Exchange has designated this proposal to be operative on November 1, 2011. 2. Statutory Basis The Exchange believes that its proposal to amend its Schedule of Fees is consistent with Section 6(b) of the Securities Exchange Act of 1934 (‘‘Exchange Act’’) 5 in general, and furthers the objectives of Section 6(b)(4) of the Exchange Act 6 in particular, in that it is an equitable allocation of reasonable dues, fees and other charges among Exchange Members. The Exchange believes that the proposed fee change will generally allow the Rebate per Originating contract sides Exchange and its Members to better contract compete for order flow and thus 0–1,699,999 ...................... $0.00 enhance competition. Specifically, the 1,700,000–2,499,999 ........ 0.03 Exchange believes that its proposal to 2,500,000–3,499,999 ........ 0.05 add another tier is reasonable as it will 3,500,000+ ........................ 0.07 encourage Members who direct their QCC and Solicitation orders to the Prior to this proposed rule change, in Exchange to continue to do so instead order for a Member to receive a rebate, of sending this order flow to a it had to transact at least 1,700,000 competing exchange. With this qualifying contracts. The Exchange now proposed new tier, more Members will proposes to adopt a $0.01 rebate per now receive a rebate for sending their contract that is payable to Members who QCC and Solicitation orders to the send a minimum of 100,000 contracts Exchange. and up to 1,699,999 contracts. The The Exchange notes that it currently Exchange believes the proposed new has other incentive programs to promote tier will result in the Exchange and encourage growth in specific providing a rebate to more Members. business areas. For example, the With the proposed new tier, the volume Exchange has lower fees (or no fees) for threshold and corresponding rebate per customer orders; 7 and tiered pricing contract will be as follows: Originating contract sides Rebate per contract 0–99,999 ........................... 100,000–1,699,999 ........... 1,700,000–2,499,999 ........ 2,500,000–3,499,999 ........ $0.00 0.01 0.03 0.05 3 See Exchange Act Release Nos. 65087 (August 10, 2011), 76 FR 50783 (August 16, 2011) (SR–ISE– 2011–47); and 65583 (October 18, 2011), 76 FR 65555 (October 21, 2011) (SR–ISE–2011–68). U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Mar<15>2010 1. Purpose The purpose of this proposed rule change is to add another tier to an existing rebate program applicable to Members who submit QCC orders and Solicitation orders to the Exchange. The Exchange currently provides a rebate to Members who reach a certain volume threshold in QCC orders and/or Solicitation orders during a month.3 Once a Member reaches the volume threshold, the Exchange provides a rebate to that Member for all of its QCC and Solicitation traded contracts for that month. The rebate is paid to the Member entering a qualifying order, i.e., a QCC order and/or a Solicitation order. The rebate applies to QCC orders and Solicitation orders in all symbols traded on the Exchange. Additionally, the threshold levels are based on the originating side so if, for example, a Member submits a Solicitation order for 1,000 contracts, all 1,000 contracts are counted to reach the established threshold even if the order is broken up and executed with multiple counter parties. The current volume threshold and corresponding rebate per contract is: Originating contract sides 70789 PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 4 Options classes subject to maker/taker fees are identified by their ticker symbol on the Exchange’s Schedule of Fees. 5 15 U.S.C. 78f(b). 6 15 U.S.C. 78f(b)(4). 7 For example, the customer fee is $0.00 per contract for products other than Singly Listed Indexes, Singly Listed ETFs and FX Options. For Singly Listed Options, Singly Listed ETFs and FX Options, the customer fee is $0.18 per contract. The Exchange also currently has an incentive plan in place for certain specific FX Options which has its own pricing. See ISE Schedule of Fees. E:\FR\FM\15NON1.SGM 15NON1 70790 Federal Register / Vol. 76, No. 220 / Tuesday, November 15, 2011 / Notices that reduces rates for market makers based on the level of business they bring to the Exchange.8 This proposed rule change targets a particular segment in which the Exchange seeks to garnish greater order flow. The Exchange further believes that the rebate currently in place for QCC and Solicitation orders is reasonable because it is designed to give Members who trade a minimum of 100,000 contracts in QCC and Solicitation orders on the Exchange a benefit by way of a lower transaction fee. As noted above, once a Member reaches an established volume threshold, all of the trading activity in the specified order type by that Member will be subject to the corresponding rebate. The Exchange also believes that its rebate program for QCC and Solicitation orders is equitable because it would uniformly apply to all Members engaged in QCC and Solicitation trading in all option classes traded on the Exchange. 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 Exchange Act. 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. mstockstill on DSK4VPTVN1PROD with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Exchange Act.9 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 Exchange Act. If the Commission takes such action, the Commission shall institute proceedings 8 The Exchange currently has a sliding scale fee structure that ranges from $0.01 per contract to $0.18 per contract depending on the level of volume a Member trades on the Exchange in a month. 9 15 U.S.C. 78s(b)(3)(A)(ii). VerDate Mar<15>2010 19:06 Nov 14, 2011 Jkt 226001 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 Exchange Act. Comments may be submitted by any of the following methods: • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rulecomments@sec.gov. Please include File Number SR–ISE–2011–70 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–2011–70. 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 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–ISE– 2011–70 and should be submitted on or before December 6, 2011. Frm 00088 Fmt 4703 [FR Doc. 2011–29392 Filed 11–14–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–65710; File No. SR– NYSEAmex–2011–55] Electronic Comments PO 00000 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Kevin M. O’Neill, Deputy Secretary. Sfmt 4703 Self-Regulatory Organizations; NYSE Amex LLC; Notice and Order Granting Accelerated Approval to Proposed Rule Change, as Modified by Amendment No. 2, Amending Section 101 of the NYSE Amex Company Guide To Adopt Additional Listing Requirements for Companies Applying To List After Consummation of a ‘‘Reverse Merger’’ With a Shell Company, November 8, 2011 I. Introduction On July 22, 2011, NYSE Amex LLC (‘‘NYSE Amex’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change adopting additional listing requirements for a company that has become an Act reporting company by combining with a public shell, whether through a reverse merger, exchange offer, or otherwise (a ‘‘Reverse Merger’’). The proposed rule change was published for comment in the Federal Register on August 10, 2011.3 On September 21, 2011, the Commission extended the time period in which to either approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether the proposed rule change should be disapproved to November 8, 2011.4 The Commission received two comment letters on the proposal.5 NYSE Amex filed 10 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 65033 (August 4, 2011), 76 FR 49522 (‘‘Notice’’). 4 See Securities Exchange Act Release No. 65369 (September 21, 2011), 76 FR 59763 (September 27, 2011). 5 See Letter from David Feldman, Partner, Richardson and Patel LLP dated August 29, 2011 (‘‘Feldman Letter’’) and Letter to Elizabeth M. Murphy, Secretary, Commission, from WestPark Capital, Inc. dated August 31, 2011 (‘‘WestPark Letter’’). In addition, the Commission received five comment letters on a substantially similar proposal by Nasdaq, three of which were filed by parties that did not specifically comment on the NYSE Amex 1 15 E:\FR\FM\15NON1.SGM 15NON1

Agencies

[Federal Register Volume 76, Number 220 (Tuesday, November 15, 2011)]
[Notices]
[Pages 70789-70790]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-29392]



[[Page 70789]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65705; File No. SR-ISE-2011-70]


Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change To Add Another Tier to an Existing Rebate Program for Qualified 
Contingent Cross Orders and Solicitation Orders Executed on the 
Exchange

November 8, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby 
given that, on October 25, 2011, the International Securities Exchange, 
LLC (the ``Exchange'' or the ``ISE'') filed with the Securities and 
Exchange Commission (the ``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.
---------------------------------------------------------------------------

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

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

    The ISE is proposing to add another tier to an existing rebate 
program for Qualified Contingent Cross (``QCC'') orders and 
Solicitation orders. 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
    The purpose of this proposed rule change is to add another tier to 
an existing rebate program applicable to Members who submit QCC orders 
and Solicitation orders to the Exchange. The Exchange currently 
provides a rebate to Members who reach a certain volume threshold in 
QCC orders and/or Solicitation orders during a month.\3\ Once a Member 
reaches the volume threshold, the Exchange provides a rebate to that 
Member for all of its QCC and Solicitation traded contracts for that 
month. The rebate is paid to the Member entering a qualifying order, 
i.e., a QCC order and/or a Solicitation order. The rebate applies to 
QCC orders and Solicitation orders in all symbols traded on the 
Exchange. Additionally, the threshold levels are based on the 
originating side so if, for example, a Member submits a Solicitation 
order for 1,000 contracts, all 1,000 contracts are counted to reach the 
established threshold even if the order is broken up and executed with 
multiple counter parties.
---------------------------------------------------------------------------

    \3\ See Exchange Act Release Nos. 65087 (August 10, 2011), 76 FR 
50783 (August 16, 2011) (SR-ISE-2011-47); and 65583 (October 18, 
2011), 76 FR 65555 (October 21, 2011) (SR-ISE-2011-68).
---------------------------------------------------------------------------

    The current volume threshold and corresponding rebate per contract 
is:

------------------------------------------------------------------------
                                                           Rebate per
              Originating contract sides                    contract
------------------------------------------------------------------------
0-1,699,999...........................................             $0.00
1,700,000-2,499,999...................................              0.03
2,500,000-3,499,999...................................              0.05
3,500,000+............................................              0.07
------------------------------------------------------------------------

    Prior to this proposed rule change, in order for a Member to 
receive a rebate, it had to transact at least 1,700,000 qualifying 
contracts. The Exchange now proposes to adopt a $0.01 rebate per 
contract that is payable to Members who send a minimum of 100,000 
contracts and up to 1,699,999 contracts. The Exchange believes the 
proposed new tier will result in the Exchange providing a rebate to 
more Members. With the proposed new tier, the volume threshold and 
corresponding rebate per contract will be as follows:

------------------------------------------------------------------------
                                                           Rebate per
              Originating contract sides                    contract
------------------------------------------------------------------------
0-99,999..............................................             $0.00
100,000-1,699,999.....................................              0.01
1,700,000-2,499,999...................................              0.03
2,500,000-3,499,999...................................              0.05
3,500,000+............................................              0.07
------------------------------------------------------------------------

    Further, the Exchange currently assesses per contract transaction 
charges and credits to market participants that add or remove liquidity 
from the Exchange (``maker/taker fees'') in a select number of options 
classes (the ``Select Symbols'').\4\ For Solicitation orders in the 
Select Symbols, the Exchange currently provides a rebate of $0.15 to 
contracts that do not trade with the contra order in the Solicited 
Order Mechanism. The Exchange does not propose any change to that 
rebate and that rebate will continue to apply.
---------------------------------------------------------------------------

    \4\ Options classes subject to maker/taker fees are identified 
by their ticker symbol on the Exchange's Schedule of Fees.
---------------------------------------------------------------------------

    The Exchange has designated this proposal to be operative on 
November 1, 2011.
2. Statutory Basis
    The Exchange believes that its proposal to amend its Schedule of 
Fees is consistent with Section 6(b) of the Securities Exchange Act of 
1934 (``Exchange Act'') \5\ in general, and furthers the objectives of 
Section 6(b)(4) of the Exchange Act \6\ in particular, in that it is an 
equitable allocation of reasonable dues, fees and other charges among 
Exchange Members. The Exchange believes that the proposed fee change 
will generally allow the Exchange and its Members to better compete for 
order flow and thus enhance competition. Specifically, the Exchange 
believes that its proposal to add another tier is reasonable as it will 
encourage Members who direct their QCC and Solicitation orders to the 
Exchange to continue to do so instead of sending this order flow to a 
competing exchange. With this proposed new tier, more Members will now 
receive a rebate for sending their QCC and Solicitation orders to the 
Exchange.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange notes that it currently has other incentive programs 
to promote and encourage growth in specific business areas. For 
example, the Exchange has lower fees (or no fees) for customer orders; 
\7\ and tiered pricing

[[Page 70790]]

that reduces rates for market makers based on the level of business 
they bring to the Exchange.\8\ This proposed rule change targets a 
particular segment in which the Exchange seeks to garnish greater order 
flow. The Exchange further believes that the rebate currently in place 
for QCC and Solicitation orders is reasonable because it is designed to 
give Members who trade a minimum of 100,000 contracts in QCC and 
Solicitation orders on the Exchange a benefit by way of a lower 
transaction fee. As noted above, once a Member reaches an established 
volume threshold, all of the trading activity in the specified order 
type by that Member will be subject to the corresponding rebate.
---------------------------------------------------------------------------

    \7\ For example, the customer fee is $0.00 per contract for 
products other than Singly Listed Indexes, Singly Listed ETFs and FX 
Options. For Singly Listed Options, Singly Listed ETFs and FX 
Options, the customer fee is $0.18 per contract. The Exchange also 
currently has an incentive plan in place for certain specific FX 
Options which has its own pricing. See ISE Schedule of Fees.
    \8\ The Exchange currently has a sliding scale fee structure 
that ranges from $0.01 per contract to $0.18 per contract depending 
on the level of volume a Member trades on the Exchange in a month.
---------------------------------------------------------------------------

    The Exchange also believes that its rebate program for QCC and 
Solicitation orders is equitable because it would uniformly apply to 
all Members engaged in QCC and Solicitation trading in all option 
classes traded on the Exchange.

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 Exchange Act.

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Exchange Act.\9\ 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 Exchange Act. If the Commission takes such action, the 
Commission shall institute proceedings to determine whether the 
proposed rule should be approved or disapproved.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

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 Exchange 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-ISE-2011-70 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-2011-70. 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 
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-ISE-2011-70 and should be 
submitted on or before December 6, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-29392 Filed 11-14-11; 8:45 am]
BILLING CODE 8011-01-P
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