Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Exchange's Schedule of Fees Regarding Complex Order Rebates, 58424-58428 [2012-23178]
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58424
Federal Register / Vol. 77, No. 183 / Thursday, September 20, 2012 / Notices
estimated that each broker-dealer who
responds electronically will take 8
minutes, and each broker-dealer who
responds manually will take 11⁄2 hours
to prepare and submit the securities
trading data requested by the
Commission. The annual aggregate hour
burden for electronic and manual
response firms is estimated to be 11,785
(87,454 × 8 ÷ 60 = 11,600 hours) + (80
× 1.5 = 120 hours), respectively.2 In
addition, the Commission estimates that
it will request 500 broker-dealers to
supply the contact information
identified in Rule 17a–25(c) and
estimates the total aggregate burden
hours to be 125. Thus, the annual
aggregate burden for all respondents to
the collection of information
requirements of Rule 17a–25 is
estimated at 11,785 hours (11,660 +
125).
Written comments are invited on: (a)
Whether the proposed collection of
information is necessary for the proper
performance of the functions of the
agency, including whether the
information shall have practical utility;
(b) the accuracy of the agency’s estimate
of the burden of the proposed collection
of information; (c) ways to enhance the
quality, utility, and clarity of the
information to be collected; and (d)
ways to minimize the burden of the
collection of information on
respondents, including through the use
of automated collection techniques or
other forms of information technology.
Consideration will be given to
comments and suggestions submitted in
writing within 60 days of this
publication.
Please direct your written comments
to Thomas Bayer, Director/Chief
Information Office, Securities and
Exchange Commission, C/O Remi
Pavlik-Simon, 6432 General Green Way,
Alexandria, Virginia 22312 or send an
email to: PRA_Mailbox@sec.gov.
Dated: September 17, 2012.
Kevin M. O’Neill,
Deputy Secretary.
mstockstill on DSK4VPTVN1PROD with NOTICES
Drucker, Inc., DynaMotive Energy
Systems Corp., and Gate to Wire
Solutions, Inc., Order of Suspension of
Trading
September 18, 2012.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Drucker,
Inc. because it has not filed any periodic
reports since the period ended
December 31, 2006.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of DynaMotive
Energy Systems Corp. because it has not
filed any periodic reports since the
period ended December 31, 2008.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Gate to Wire
Solutions, Inc. because it has not filed
any periodic reports since the period
ended November 30, 2009.
The Commission is of the opinion that
the public interest and the protection of
investors require a suspension of trading
in the securities of the above-listed
companies. Therefore, it is ordered,
pursuant to Section 12(k) of the
Securities Exchange Act of 1934, that
trading in the securities of the abovelisted companies is suspended for the
period from 9:30 a.m. EDT on
September 18, 2012 through 11:59 p.m.
EDT on October 1, 2012.
By the Commission.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2012–23315 Filed 9–18–12; 4:15 pm]
BILLING CODE 8011–01–P
By the Commission.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2012–23316 Filed 9–18–12; 4:15 pm]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[File No. 500–1]
China Mobile Media Technology, Inc.,
Order of Suspension of Trading
September 18, 2012.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of China
Mobile Media Technology, Inc. because
it has not filed any periodic reports
since the period ended September 30,
2008.
The Commission is of the opinion that
the public interest and the protection of
investors require a suspension of trading
in the securities of the above-listed
company. Therefore, it is ordered,
pursuant to Section 12(k) of the
Securities Exchange Act of 1934, that
trading in the securities of the abovelisted company is suspended for the
period from 9:30 a.m. EDT on
September 18, 2012, through 11:59 p.m.
EDT on October 1, 2012.
By the Commission.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2012–23314 Filed 9–18–12; 4:15 pm]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Jkt 226001
[Release No. 34–67859; File No. SR–ISE–
2012–72]
September 18, 2012.
Clearing brokers respond for themselves and other
firms they clear for.
2 Few of respondents submit manual EBS
responses. The small percentage of respondents that
submit manual responses do so by hand, via email,
spreadsheet, disk, or other electronic media. Thus,
the number of manual submissions (80) has
minimal effect on the total annual burden hours.
SECURITIES AND EXCHANGE
COMMISSION
Enwin Resources, Inc., Order of
Suspension of Trading
BILLING CODE 8011–01–P
16:11 Sep 19, 2012
[File No. 500–1]
in the securities of the above-listed
company. Therefore, it is ordered,
pursuant to Section 12(k) of the
Securities Exchange Act of 1934, that
trading in the securities of the abovelisted company is suspended for the
period from 9:30 a.m. EDT on
September 18, 2012 through 11:59 p.m.
EDT on October 1, 2012.
[File No. 500–1]
[FR Doc. 2012–23233 Filed 9–19–12; 8:45 am]
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SECURITIES AND EXCHANGE
COMMISSION
Self-Regulatory Organizations;
International Securities Exchange,
LLC; Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change To Amend the Exchange’s
Schedule of Fees Regarding Complex
Order Rebates
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Enwin
Resources, Inc. because it has not filed
any periodic reports since the period
ended May 31, 2009.
The Commission is of the opinion that
the public interest and the protection of
investors require a suspension of trading
PO 00000
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September 14, 2012.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
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Federal Register / Vol. 77, No. 183 / Thursday, September 20, 2012 / Notices
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on
September 4, 2012, 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, II, and
III 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 Substance of
the Proposed Rule Change
The ISE is proposing to amend its
Schedule of Fees. 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
mstockstill on DSK4VPTVN1PROD with NOTICES
1. Purpose
The Exchange currently assesses per
contract transaction fees and provides
rebates to market participants that add
or remove liquidity from the Exchange
(‘‘maker/taker fees and rebates’’) in a
number of options classes (the ‘‘Select
Symbols’’).3 The Exchange’s maker/
taker fees and rebates are applicable to
regular and complex orders executed in
the Select Symbols and in the Special
Non-Select Penny Pilot Symbols.4 The
Exchange also currently assesses maker/
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 Options classes subject to maker/taker fees and
rebates are identified by their ticker symbol on the
Exchange’s Schedule of Fees.
4 See Exchange Act Release Nos. 67201 (June 14,
2012), 77 FR 37082 (June 20, 2012) (SR–ISE–2012–
49); and 67627 (August 9, 2012), 77 FR 49046
(August 15, 2012) (SR–ISE–2012–70).
2 17
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16:11 Sep 19, 2012
Jkt 226001
taker fees and rebates for complex
orders in symbols that are in the Penny
Pilot program but are not a Select
Symbol (‘‘Non-Select Penny Pilot
Symbols’’) 5 and for complex orders in
all symbols that are not in the Penny
Pilot Program (‘‘Non-Penny Pilot
Symbols’’).6
The purpose of this proposed rule
change is to amend the rebate tiers and
increase the rebate levels for complex
orders in options on the Select Symbols,
the Non-Select Penny Pilot Symbols, the
Non-Penny Pilot Symbols and in
options on one Select Symbol—SPY—
which has a distinct rebate tier and
amount. The Exchange believes this
proposed rule change will enhance the
Exchange’s competitive position and
incentivize Members to increase the
amount of Priority Customer complex
orders that they send to the Exchange in
these symbols.
In the Select Symbols, the Exchange
currently provides a base rebate of $0.34
per contract, per leg, for Priority
Customer complex orders when these
orders trade with non-Priority Customer
complex orders in the complex order
book. Additionally, Members can earn a
higher rebate amount by achieving
certain average daily volume (ADV)
thresholds on a month-to-month basis.
The current ADV threshold for the base
tier is 0–74,999 Priority Customer
complex contracts. The Exchange
proposes to lower this threshold to 0–
39,999 Priority Customer complex
contracts and the base rebate of $0.34
per contract, per leg, will now apply to
this tier. With the adoption of a new
base tier, what was previously the base
tier is now the second tier. The ADV
threshold for this tier was previously 0–
74,999 Priority Customer complex
contracts. The Exchange proposes to
amend this threshold so that it is now
40,000–74,999 Priority Customer
complex contracts. The rebate amount
for this tier was previously $0.34 per
contract, per leg. The Exchange
proposes to increase the rebate for this
tier to $0.36 per contract, per leg. With
the adoption of a new base tier, what
was previously the second tier is now
the third tier. The ADV threshold for
this tier was previously 75,000–124,999
Priority Customer complex contracts.
The Exchange is not proposing any
5 See Exchange Act Release No. 65724 (November
10, 2011), 76 FR 71413 (November 17, 2011) (SR–
ISE–2011–72).
6 See Exchange Act Release Nos. 66084 (January
3, 2012), 77 FR 1103 (January 9, 2012) (SR–ISE–
2011–84); 66392 (February 14, 2012), 77 FR 10016
(February 21, 2012) (SR–ISE–2012–06); 66961 (May
10, 2012), 77 FR 28914 (May 16, 2012) (SR–ISE–
2012–38); and 67400 (July 11, 2012), 77 FR 42036
(July 17, 2012) (SR–ISE–2012–63).
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58425
change to the ADV threshold for this
tier. The rebate amount for this tier was
previously $0.36 per contract, per leg.
The Exchange proposes to increase the
rebate for this tier to $0.37 per contract,
per leg. With the adoption of a new base
tier, what was previously the third tier
is now the fourth tier. The ADV
threshold for this tier was previously
125,000–249,999 Priority Customer
complex contracts. The Exchange
proposes to amend this threshold by
lowering the top end of the range so that
it is now 125,000–224,999 Priority
Customer complex orders. The rebate
amount for this tier was previously
$0.37 per contract, per leg. The
Exchange proposes to increase the
rebate for this tier to $0.38 per contract,
per leg. Finally, with the adoption of a
new base tier, what was previously the
fourth tier is now the fifth tier. The ADV
threshold for this tier was previously
250,000 or more Priority Customer
complex contracts. The Exchange
proposes to amend this threshold by
lowering it so that it is now 225,000 or
more Priority Customer complex
contracts. The rebate amount for this
tier was previously $0.38 per contract,
per leg. The Exchange proposes to
increase the rebate for this tier to $0.39
per contract, per leg. The highest rebate
amount achieved by the Member for the
current calendar month applies
retroactively to all Priority Customer
complex order contracts that trade with
non-Priority Customer complex orders
in the complex order book executed by
the Member during such calendar
month.
In the Non-Select Penny Pilot
Symbols, the Exchange currently
provides a base rebate of $0.33 per
contract, per leg, for Priority Customer
complex orders when these orders trade
with non-Priority Customer complex
orders in the complex order book.
Additionally, Members can earn a
higher rebate amount by achieving
certain ADV thresholds on a month-tomonth basis. The current ADV threshold
for the base tier is 0–74,999 Priority
Customer complex contracts. The
Exchange proposes to lower this
threshold to 0–39,999 Priority Customer
complex contracts and the base rebate of
$0.33 per contract, per leg, will now
apply to this tier. With the adoption of
a new base tier, what was previously the
base tier is now the second tier. The
ADV threshold for this tier was
previously 0–74,999 Priority Customer
complex contracts. The Exchange
proposes to amend this threshold so that
it is now 40,000–74,999 Priority
Customer complex contracts. The rebate
amount for this tier was previously
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mstockstill on DSK4VPTVN1PROD with NOTICES
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Federal Register / Vol. 77, No. 183 / Thursday, September 20, 2012 / Notices
$0.33 per contract, per leg. The
Exchange proposes to increase the
rebate for this tier to $0.34 per contract,
per leg. With the adoption of a new base
tier, what was previously the second tier
is now the third tier. The ADV threshold
for this tier was previously 75,000–
124,999 Priority Customer complex
contracts. The Exchange is not
proposing any change to the ADV
threshold for this tier. The rebate
amount for this tier was previously
$0.34 per contract, per leg. The
Exchange proposes to increase the
rebate for this tier to $0.36 per contract,
per leg. With the adoption of a new base
tier, what was previously the third tier
is now the fourth tier. The ADV
threshold for this tier was previously
125,000–249,999 Priority Customer
complex contracts. The Exchange
proposes to amend this threshold by
lowering the top end of the range so that
it is now 125,000–224,999 Priority
Customer complex orders. The rebate
amount for this tier was previously
$0.36 per contract, per leg. The
Exchange proposes to increase the
rebate for this tier to $0.37 per contract,
per leg. Finally, with the adoption of a
new base tier, what was previously the
fourth tier is now the fifth tier. The ADV
threshold for this tier was previously
250,000 or more Priority Customer
complex contracts. The Exchange
proposes to amend this threshold by
lowering it so that it is now 225,000 or
more Priority Customer complex
contracts. The rebate amount for this
tier was previously $0.37 per contract,
per leg. The Exchange proposes to
increase the rebate for this tier to $0.38
per contract, per leg. The highest rebate
amount achieved by the Member for the
current calendar month applies
retroactively to all Priority Customer
complex order contracts that trade with
non-Priority Customer complex orders
in the complex order book executed by
the Member during such calendar
month.
In the Non-Penny Pilot Symbols, the
Exchange currently provides a base
rebate of $0.66 per contract, per leg, for
Priority Customer complex orders when
these orders trade with non-Priority
Customer complex orders in the
complex order book. Additionally,
Members can earn a higher rebate
amount by achieving certain ADV
thresholds on a month-to-month basis.
The current ADV threshold for the base
tier is 0–74,999 Priority Customer
complex contracts. The Exchange
proposes to lower this threshold to 0–
39,999 Priority Customer complex
contracts and the base rebate of $0.66
per contract, per leg, will now apply to
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16:11 Sep 19, 2012
Jkt 226001
this tier. With the adoption of a new
base tier, what was previously the base
tier is now the second tier. The ADV
threshold for this tier was previously 0–
74,999 Priority Customer complex
contracts. The Exchange proposes to
amend this threshold so that it is now
40,000–74,999 Priority Customer
complex contracts. The rebate amount
for this tier was previously $0.66 per
contract, per leg. The Exchange
proposes to increase the rebate for this
tier to $0.70 per contract, per leg. With
the adoption of a new base tier, what
was previously the second tier is now
the third tier. The ADV threshold for
this tier was previously 75,000–124,999
Priority Customer complex contracts.
The Exchange is not proposing any
change to the ADV threshold for this
tier. The rebate amount for this tier was
previously $0.70 per contract, per leg.
The Exchange proposes to increase the
rebate for this tier to $0.74 per contract,
per leg. With the adoption of a new base
tier, what was previously the third tier
is now the fourth tier. The ADV
threshold for this tier was previously
125,000–249,999 Priority Customer
complex contracts. The Exchange
proposes to amend this threshold by
lowering the top end of the range so that
it is now 125,000–224,999 Priority
Customer complex orders. The rebate
amount for this tier was previously
$0.74 per contract, per leg. The
Exchange proposes to increase the
rebate for this tier to $0.76 per contract,
per leg. Finally, with the adoption of a
new base tier, what was previously the
fourth tier is now the fifth tier. The ADV
threshold for this tier was previously
250,000 or more Priority Customer
complex contracts. The Exchange
proposes to amend this threshold by
lowering it so that it is now 225,000 or
more Priority Customer complex
contracts. The rebate amount for this
tier was previously $0.76 per contract,
per leg. The Exchange proposes to
increase the rebate for this tier to $0.77
per contract, per leg. The highest rebate
amount achieved by the Member for the
current calendar month applies
retroactively to all Priority Customer
complex order contracts that trade with
non-Priority Customer complex orders
in the complex order book executed by
the Member during such calendar
month.
Finally, in SPY, the Exchange
currently provides a base rebate of $0.36
per contract, per leg, for Priority
Customer complex orders when these
orders trade with non-Priority Customer
complex orders in the complex order
book. Additionally, Members can earn a
higher rebate amount by achieving
PO 00000
Frm 00073
Fmt 4703
Sfmt 4703
certain ADV thresholds on a month-tomonth basis. The current ADV threshold
for the base tier is 0–74,999 Priority
Customer complex contracts. The
Exchange proposes to lower this
threshold to 0–39,999 Priority Customer
complex contracts and the base rebate of
$0.36 per contract, per leg, will now
apply to this tier. With the adoption of
a new base tier, what was previously the
base tier is now the second tier. The
ADV threshold for this tier was
previously 0–74,999 Priority Customer
complex contracts. The Exchange
proposes to amend this threshold so that
it is now 40,000–74,999 Priority
Customer complex contracts. The rebate
amount for this tier was previously
$0.36 per contract, per leg. The
Exchange proposes to increase the
rebate for this tier to $0.37 per contract,
per leg. With the adoption of a new base
tier, what was previously the second tier
is now the third tier. The ADV threshold
for this tier was previously 75,000–
124,999 Priority Customer complex
contracts. The Exchange is not
proposing any change to the ADV
threshold for this tier. The rebate
amount for this tier was previously
$0.37 per contract, per leg. The
Exchange proposes to increase the
rebate for this tier to $0.38 per contract,
per leg. With the adoption of a new base
tier, what was previously the third tier
is now the fourth tier. The ADV
threshold for this tier was previously
125,000–249,999 Priority Customer
complex contracts. The Exchange
proposes to amend this threshold by
lowering the top end of the range so that
it is now 125,000–224,999 Priority
Customer complex orders. The rebate
amount for this tier was previously
$0.38 per contract, per leg. The
Exchange proposes to increase the
rebate for this tier to $0.39 per contract,
per leg. Finally, with the adoption of a
new base tier, what was previously the
fourth tier is now the fifth tier. The ADV
threshold for this tier was previously
250,000 or more Priority Customer
complex contracts. The Exchange
proposes to amend this threshold by
lowering it so that it is now 225,000 or
more Priority Customer complex
contracts. The rebate amount for this
tier was previously $0.39 per contract,
per leg. The Exchange proposes to
increase the rebate for this tier to $0.40
per contract, per leg. The highest rebate
amount achieved by the Member for the
current calendar month applies
retroactively to all Priority Customer
complex order contracts that trade with
non-Priority Customer complex orders
in the complex order book executed by
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Federal Register / Vol. 77, No. 183 / Thursday, September 20, 2012 / Notices
the Member during such calendar
month.
Further, the Exchange currently
provides a base rebate of $0.06 per
contract, per leg, for Priority Customer
complex orders in all symbols traded on
the Exchange (excluding SPY) when
these orders trade against quotes or
orders in the regular orderbook. In order
to enhance the Exchange’s competitive
position and to incentivize Members to
increase the amount of Priority
Customer complex orders that they send
to the Exchange, the Exchange has
volume-based tiers similar to the
volume-based tiers currently in place for
complex orders that trade with nonPriority Customer complex orders in the
complex order book. The current ADV
threshold for the base tier is 0–74,999
Priority Customer complex contracts.
The Exchange proposes to lower this
threshold to 0–39,999 Priority Customer
complex contracts and the base rebate of
$0.06 per contract, per leg, will now
apply to this tier. With the adoption of
a new base tier, what was previously the
base tier is now the second tier. The
ADV threshold for this tier was
previously 0–74,999 Priority Customer
complex contracts. The Exchange
proposes to amend this threshold so that
it is now 40,000–74,999 Priority
Customer complex contracts. The rebate
amount for this tier was previously
$0.06 per contract, per leg. The
Exchange proposes to increase the
rebate for this tier to $0.07 per contract,
per leg. With the adoption of a new base
tier, what was previously the second tier
is now the third tier. The ADV threshold
for this tier was previously 75,000–
124,999 Priority Customer complex
contracts. The Exchange is not
proposing any change to the ADV
threshold for this tier. The rebate
amount for this tier was previously
$0.07 per contract, per leg. The
Exchange proposes to increase the
rebate for this tier to $0.08 per contract,
per leg. With the adoption of a new base
tier, what was previously the third tier
is now the fourth tier. The ADV
threshold for this tier was previously
125,000–249,999 Priority Customer
complex contracts. The Exchange
proposes to amend this threshold by
lowering the top end of the range so that
it is now 125,000–224,999 Priority
Customer complex orders. The rebate
amount for this tier was previously
$0.08 per contract, per leg. The
Exchange proposes to increase the
rebate for this tier to $0.09 per contract,
per leg. Finally, with the adoption of a
new base tier, what was previously the
fourth tier is now the fifth tier. The ADV
threshold for this tier was previously
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16:11 Sep 19, 2012
Jkt 226001
250,000 or more Priority Customer
complex contracts. The Exchange
proposes to amend this threshold by
lowering it so that it is now 225,000 or
more Priority Customer complex
contracts. The rebate amount for this
tier was previously $0.09 per contract,
per leg. The Exchange proposes to
increase the rebate for this tier to $0.10
per contract, per leg. The highest rebate
amount achieved by the Member for the
current calendar month applies
retroactively to all Priority Customer
complex order contracts that trade with
non-Priority Customer complex orders
in the complex order book executed by
the Member during such calendar
month.
For SPY, the Exchange currently
provides a base rebate of $0.07 per
contract, per leg, for Priority Customer
complex orders traded on the Exchange
when these orders trade against quotes
or orders in the regular orderbook. The
current ADV threshold for the base tier
is 0–74,999 Priority Customer complex
contracts. The Exchange proposes to
lower this threshold to 0–39,999 Priority
Customer complex contracts and the
base rebate of $0.07 per contract, per
leg, will now apply to this tier. With the
adoption of a new base tier, what was
previously the base tier is now the
second tier. The ADV threshold for this
tier was previously 0–74,999 Priority
Customer complex contracts. The
Exchange proposes to amend this
threshold so that it is now 40,000–
74,999 Priority Customer complex
contracts. The rebate amount for this
tier was previously $0.07 per contract,
per leg. The Exchange proposes to
increase the rebate for this tier to $0.08
per contract, per leg. With the adoption
of a new base tier, what was previously
the second tier is now the third tier. The
ADV threshold for this tier was
previously 75,000–124,999 Priority
Customer complex contracts. The
Exchange is not proposing any change
to the ADV threshold for this tier. The
rebate amount for this tier was
previously $0.08 per contract, per leg.
The Exchange proposes to increase the
rebate for this tier to $0.09 per contract,
per leg. With the adoption of a new base
tier, what was previously the third tier
is now the fourth tier. The ADV
threshold for this tier was previously
125,000–249,999 Priority Customer
complex contracts. The Exchange
proposes to amend this threshold by
lowering the top end of the range so that
it is now 125,000–224,999 Priority
Customer complex orders. The rebate
amount for this tier was previously
$0.09 per contract, per leg. The
Exchange proposes to increase the
PO 00000
Frm 00074
Fmt 4703
Sfmt 4703
58427
rebate for this tier to $0.10 per contract,
per leg. Finally, with the adoption of a
new base tier, what was previously the
fourth tier is now the fifth tier. The ADV
threshold for this tier was previously
250,000 or more Priority Customer
complex contracts. The Exchange
proposes to amend this threshold by
lowering it so that it is now 225,000 or
more Priority Customer complex
contracts. The rebate amount for this
tier was previously $0.10 per contract,
per leg. The Exchange proposes to
increase the rebate for this tier to $0.11
per contract, per leg. The highest rebate
amount achieved by the Member for the
current calendar month applies
retroactively to all Priority Customer
complex order contracts that trade with
non-Priority Customer complex orders
in the complex order book executed by
the Member during such calendar
month.
Finally, to incentivize members to
trade in the Exchange’s various auction
mechanisms, the Exchange currently
provides a per contract rebate to those
contracts that do not trade with the
contra order in the Exchange’s
Facilitation Mechanism and Solicited
Order Mechanism, except when they
trade against pre-existing orders and
quotes, and to those contracts that do
not trade with the contra order in the,
Price Improvement Mechanism. For the
Facilitation and Solicited Order
Mechanisms, the rebate is currently
$0.15 per contract. For the Price
Improvement Mechanism, the rebate is
currently $0.25 per contract. These
rebates will continue to apply.
The Exchange is not proposing any
other changes in this filing.
2. Statutory Basis
The Exchange believes that its
proposal to amend its Schedule of Fees
is consistent with Section 6(b) of the
Exchange Act 7 in general, and furthers
the objectives of Section 6(b)(4) of the
Exchange Act 8 in particular, in that it is
an equitable allocation of reasonable
dues, fees and other charges among
Exchange members and other persons
using its facilities. The impact of the
proposal upon the net fees paid by a
particular market participant will
depend on a number of variables, most
important of which will be its
propensity to interact with and respond
to certain types of orders.
The Exchange believes that it is
reasonable and equitable to provide
rebates for Priority Customer complex
orders when these orders trade with
Non-Priority Customer complex orders
7 15
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Federal Register / Vol. 77, No. 183 / Thursday, September 20, 2012 / Notices
in the complex order book because
paying a rebate would continue to
attract additional order flow to the
Exchange and create liquidity in the
symbols that are subject to the rebate,
which the Exchange believes ultimately
will benefit all market participants who
trade on ISE. The Exchange has already
established a volume-based incentive
program, and is now merely proposing
to adopt an additional tier and increase
the rebate amounts in that program. The
Exchange believes that the proposed
rebates are competitive with rebates
provided by other exchanges and are
therefore reasonable and equitably
allocated to those members that direct
orders to the Exchange rather than to a
competing exchange.
The Exchange also believes that it is
reasonable and equitable to provide
rebates for Priority Customer complex
orders when these orders trade against
quotes or orders in the regular
orderbook. Again, the Exchange has
already established a volume-based
incentive program, and is now merely
proposing to adopt an additional tier
and increase the rebate amounts in that
program. The Exchange believes paying
these rebates would also attract
additional order flow to the Exchange.
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,
which, among other things, adopts a
lower base level, and lowers the highest
ADV threshold, so Members can qualify
for rebates, is reasonable as it will
encourage Members to increase the
amount of Priority Customer complex
orders that they send to the Exchange
instead of sending this order flow to a
competing exchange. The Exchange
believes that with the proposed
amended tiers, which provides for
additional volume thresholds, more
Members are now likely to qualify for
higher rebates.
The complex order pricing employed
by the Exchange has proven to be an
effective pricing mechanism and
attractive to Exchange participants and
their customers. The Exchange believes
that this proposed rule change will
continue to attract additional complex
order business in the symbols that are
subject of this proposed rule change.
The Exchange believes that the
proposed rebates are fair, equitable and
not unfairly discriminatory because they
are consistent with price differentiation
and fee structures that exists today at
other option exchanges. The Exchange
operates in a highly competitive market
in which market participants can
VerDate Mar<15>2010
16:11 Sep 19, 2012
Jkt 226001
readily direct order flow to another
exchange if they deem rebate levels at
a particular exchange to be low. With
this proposed rebate change, the
Exchange believes it remains an
attractive venue for market participants
to trade complex orders.
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.
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 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 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:
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–ISE–2012–72. 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
10:00 a.m. and 3:00 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–
2012–72 and should be submitted on or
before October 11, 2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–23178 Filed 9–19–12; 8:45 am]
BILLING CODE 8011–01–P
Electronic Comments
• 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–2012–72 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
9 15
PO 00000
U.S.C. 78s(b)(3)(A)(ii).
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]]>Agencies
[Federal Register Volume 77, Number 183 (Thursday, September 20, 2012)]
[Notices]
[Pages 58424-58428]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-23178]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-67859; File No. SR-ISE-2012-72]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change To Amend the Exchange's Schedule of Fees Regarding Complex Order
Rebates
September 14, 2012.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the
[[Page 58425]]
``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on September 4, 2012, 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, II, and III 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 Substance
of the Proposed Rule Change
The ISE is proposing to amend its Schedule of Fees. 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 Exchange currently assesses per contract transaction fees and
provides rebates to market participants that add or remove liquidity
from the Exchange (``maker/taker fees and rebates'') in a number of
options classes (the ``Select Symbols'').\3\ The Exchange's maker/taker
fees and rebates are applicable to regular and complex orders executed
in the Select Symbols and in the Special Non-Select Penny Pilot
Symbols.\4\ The Exchange also currently assesses maker/taker fees and
rebates for complex orders in symbols that are in the Penny Pilot
program but are not a Select Symbol (``Non-Select Penny Pilot
Symbols'') \5\ and for complex orders in all symbols that are not in
the Penny Pilot Program (``Non-Penny Pilot Symbols'').\6\
---------------------------------------------------------------------------
\3\ Options classes subject to maker/taker fees and rebates are
identified by their ticker symbol on the Exchange's Schedule of
Fees.
\4\ See Exchange Act Release Nos. 67201 (June 14, 2012), 77 FR
37082 (June 20, 2012) (SR-ISE-2012-49); and 67627 (August 9, 2012),
77 FR 49046 (August 15, 2012) (SR-ISE-2012-70).
\5\ See Exchange Act Release No. 65724 (November 10, 2011), 76
FR 71413 (November 17, 2011) (SR-ISE-2011-72).
\6\ See Exchange Act Release Nos. 66084 (January 3, 2012), 77 FR
1103 (January 9, 2012) (SR-ISE-2011-84); 66392 (February 14, 2012),
77 FR 10016 (February 21, 2012) (SR-ISE-2012-06); 66961 (May 10,
2012), 77 FR 28914 (May 16, 2012) (SR-ISE-2012-38); and 67400 (July
11, 2012), 77 FR 42036 (July 17, 2012) (SR-ISE-2012-63).
---------------------------------------------------------------------------
The purpose of this proposed rule change is to amend the rebate
tiers and increase the rebate levels for complex orders in options on
the Select Symbols, the Non-Select Penny Pilot Symbols, the Non-Penny
Pilot Symbols and in options on one Select Symbol--SPY--which has a
distinct rebate tier and amount. The Exchange believes this proposed
rule change will enhance the Exchange's competitive position and
incentivize Members to increase the amount of Priority Customer complex
orders that they send to the Exchange in these symbols.
In the Select Symbols, the Exchange currently provides a base
rebate of $0.34 per contract, per leg, for Priority Customer complex
orders when these orders trade with non-Priority Customer complex
orders in the complex order book. Additionally, Members can earn a
higher rebate amount by achieving certain average daily volume (ADV)
thresholds on a month-to-month basis. The current ADV threshold for the
base tier is 0-74,999 Priority Customer complex contracts. The Exchange
proposes to lower this threshold to 0-39,999 Priority Customer complex
contracts and the base rebate of $0.34 per contract, per leg, will now
apply to this tier. With the adoption of a new base tier, what was
previously the base tier is now the second tier. The ADV threshold for
this tier was previously 0-74,999 Priority Customer complex contracts.
The Exchange proposes to amend this threshold so that it is now 40,000-
74,999 Priority Customer complex contracts. The rebate amount for this
tier was previously $0.34 per contract, per leg. The Exchange proposes
to increase the rebate for this tier to $0.36 per contract, per leg.
With the adoption of a new base tier, what was previously the second
tier is now the third tier. The ADV threshold for this tier was
previously 75,000-124,999 Priority Customer complex contracts. The
Exchange is not proposing any change to the ADV threshold for this
tier. The rebate amount for this tier was previously $0.36 per
contract, per leg. The Exchange proposes to increase the rebate for
this tier to $0.37 per contract, per leg. With the adoption of a new
base tier, what was previously the third tier is now the fourth tier.
The ADV threshold for this tier was previously 125,000-249,999 Priority
Customer complex contracts. The Exchange proposes to amend this
threshold by lowering the top end of the range so that it is now
125,000-224,999 Priority Customer complex orders. The rebate amount for
this tier was previously $0.37 per contract, per leg. The Exchange
proposes to increase the rebate for this tier to $0.38 per contract,
per leg. Finally, with the adoption of a new base tier, what was
previously the fourth tier is now the fifth tier. The ADV threshold for
this tier was previously 250,000 or more Priority Customer complex
contracts. The Exchange proposes to amend this threshold by lowering it
so that it is now 225,000 or more Priority Customer complex contracts.
The rebate amount for this tier was previously $0.38 per contract, per
leg. The Exchange proposes to increase the rebate for this tier to
$0.39 per contract, per leg. The highest rebate amount achieved by the
Member for the current calendar month applies retroactively to all
Priority Customer complex order contracts that trade with non-Priority
Customer complex orders in the complex order book executed by the
Member during such calendar month.
In the Non-Select Penny Pilot Symbols, the Exchange currently
provides a base rebate of $0.33 per contract, per leg, for Priority
Customer complex orders when these orders trade with non-Priority
Customer complex orders in the complex order book. Additionally,
Members can earn a higher rebate amount by achieving certain ADV
thresholds on a month-to-month basis. The current ADV threshold for the
base tier is 0-74,999 Priority Customer complex contracts. The Exchange
proposes to lower this threshold to 0-39,999 Priority Customer complex
contracts and the base rebate of $0.33 per contract, per leg, will now
apply to this tier. With the adoption of a new base tier, what was
previously the base tier is now the second tier. The ADV threshold for
this tier was previously 0-74,999 Priority Customer complex contracts.
The Exchange proposes to amend this threshold so that it is now 40,000-
74,999 Priority Customer complex contracts. The rebate amount for this
tier was previously
[[Page 58426]]
$0.33 per contract, per leg. The Exchange proposes to increase the
rebate for this tier to $0.34 per contract, per leg. With the adoption
of a new base tier, what was previously the second tier is now the
third tier. The ADV threshold for this tier was previously 75,000-
124,999 Priority Customer complex contracts. The Exchange is not
proposing any change to the ADV threshold for this tier. The rebate
amount for this tier was previously $0.34 per contract, per leg. The
Exchange proposes to increase the rebate for this tier to $0.36 per
contract, per leg. With the adoption of a new base tier, what was
previously the third tier is now the fourth tier. The ADV threshold for
this tier was previously 125,000-249,999 Priority Customer complex
contracts. The Exchange proposes to amend this threshold by lowering
the top end of the range so that it is now 125,000-224,999 Priority
Customer complex orders. The rebate amount for this tier was previously
$0.36 per contract, per leg. The Exchange proposes to increase the
rebate for this tier to $0.37 per contract, per leg. Finally, with the
adoption of a new base tier, what was previously the fourth tier is now
the fifth tier. The ADV threshold for this tier was previously 250,000
or more Priority Customer complex contracts. The Exchange proposes to
amend this threshold by lowering it so that it is now 225,000 or more
Priority Customer complex contracts. The rebate amount for this tier
was previously $0.37 per contract, per leg. The Exchange proposes to
increase the rebate for this tier to $0.38 per contract, per leg. The
highest rebate amount achieved by the Member for the current calendar
month applies retroactively to all Priority Customer complex order
contracts that trade with non-Priority Customer complex orders in the
complex order book executed by the Member during such calendar month.
In the Non-Penny Pilot Symbols, the Exchange currently provides a
base rebate of $0.66 per contract, per leg, for Priority Customer
complex orders when these orders trade with non-Priority Customer
complex orders in the complex order book. Additionally, Members can
earn a higher rebate amount by achieving certain ADV thresholds on a
month-to-month basis. The current ADV threshold for the base tier is 0-
74,999 Priority Customer complex contracts. The Exchange proposes to
lower this threshold to 0-39,999 Priority Customer complex contracts
and the base rebate of $0.66 per contract, per leg, will now apply to
this tier. With the adoption of a new base tier, what was previously
the base tier is now the second tier. The ADV threshold for this tier
was previously 0-74,999 Priority Customer complex contracts. The
Exchange proposes to amend this threshold so that it is now 40,000-
74,999 Priority Customer complex contracts. The rebate amount for this
tier was previously $0.66 per contract, per leg. The Exchange proposes
to increase the rebate for this tier to $0.70 per contract, per leg.
With the adoption of a new base tier, what was previously the second
tier is now the third tier. The ADV threshold for this tier was
previously 75,000-124,999 Priority Customer complex contracts. The
Exchange is not proposing any change to the ADV threshold for this
tier. The rebate amount for this tier was previously $0.70 per
contract, per leg. The Exchange proposes to increase the rebate for
this tier to $0.74 per contract, per leg. With the adoption of a new
base tier, what was previously the third tier is now the fourth tier.
The ADV threshold for this tier was previously 125,000-249,999 Priority
Customer complex contracts. The Exchange proposes to amend this
threshold by lowering the top end of the range so that it is now
125,000-224,999 Priority Customer complex orders. The rebate amount for
this tier was previously $0.74 per contract, per leg. The Exchange
proposes to increase the rebate for this tier to $0.76 per contract,
per leg. Finally, with the adoption of a new base tier, what was
previously the fourth tier is now the fifth tier. The ADV threshold for
this tier was previously 250,000 or more Priority Customer complex
contracts. The Exchange proposes to amend this threshold by lowering it
so that it is now 225,000 or more Priority Customer complex contracts.
The rebate amount for this tier was previously $0.76 per contract, per
leg. The Exchange proposes to increase the rebate for this tier to
$0.77 per contract, per leg. The highest rebate amount achieved by the
Member for the current calendar month applies retroactively to all
Priority Customer complex order contracts that trade with non-Priority
Customer complex orders in the complex order book executed by the
Member during such calendar month.
Finally, in SPY, the Exchange currently provides a base rebate of
$0.36 per contract, per leg, for Priority Customer complex orders when
these orders trade with non-Priority Customer complex orders in the
complex order book. Additionally, Members can earn a higher rebate
amount by achieving certain ADV thresholds on a month-to-month basis.
The current ADV threshold for the base tier is 0-74,999 Priority
Customer complex contracts. The Exchange proposes to lower this
threshold to 0-39,999 Priority Customer complex contracts and the base
rebate of $0.36 per contract, per leg, will now apply to this tier.
With the adoption of a new base tier, what was previously the base tier
is now the second tier. The ADV threshold for this tier was previously
0-74,999 Priority Customer complex contracts. The Exchange proposes to
amend this threshold so that it is now 40,000-74,999 Priority Customer
complex contracts. The rebate amount for this tier was previously $0.36
per contract, per leg. The Exchange proposes to increase the rebate for
this tier to $0.37 per contract, per leg. With the adoption of a new
base tier, what was previously the second tier is now the third tier.
The ADV threshold for this tier was previously 75,000-124,999 Priority
Customer complex contracts. The Exchange is not proposing any change to
the ADV threshold for this tier. The rebate amount for this tier was
previously $0.37 per contract, per leg. The Exchange proposes to
increase the rebate for this tier to $0.38 per contract, per leg. With
the adoption of a new base tier, what was previously the third tier is
now the fourth tier. The ADV threshold for this tier was previously
125,000-249,999 Priority Customer complex contracts. The Exchange
proposes to amend this threshold by lowering the top end of the range
so that it is now 125,000-224,999 Priority Customer complex orders. The
rebate amount for this tier was previously $0.38 per contract, per leg.
The Exchange proposes to increase the rebate for this tier to $0.39 per
contract, per leg. Finally, with the adoption of a new base tier, what
was previously the fourth tier is now the fifth tier. The ADV threshold
for this tier was previously 250,000 or more Priority Customer complex
contracts. The Exchange proposes to amend this threshold by lowering it
so that it is now 225,000 or more Priority Customer complex contracts.
The rebate amount for this tier was previously $0.39 per contract, per
leg. The Exchange proposes to increase the rebate for this tier to
$0.40 per contract, per leg. The highest rebate amount achieved by the
Member for the current calendar month applies retroactively to all
Priority Customer complex order contracts that trade with non-Priority
Customer complex orders in the complex order book executed by
[[Page 58427]]
the Member during such calendar month.
Further, the Exchange currently provides a base rebate of $0.06 per
contract, per leg, for Priority Customer complex orders in all symbols
traded on the Exchange (excluding SPY) when these orders trade against
quotes or orders in the regular orderbook. In order to enhance the
Exchange's competitive position and to incentivize Members to increase
the amount of Priority Customer complex orders that they send to the
Exchange, the Exchange has volume-based tiers similar to the volume-
based tiers currently in place for complex orders that trade with non-
Priority Customer complex orders in the complex order book. The current
ADV threshold for the base tier is 0-74,999 Priority Customer complex
contracts. The Exchange proposes to lower this threshold to 0-39,999
Priority Customer complex contracts and the base rebate of $0.06 per
contract, per leg, will now apply to this tier. With the adoption of a
new base tier, what was previously the base tier is now the second
tier. The ADV threshold for this tier was previously 0-74,999 Priority
Customer complex contracts. The Exchange proposes to amend this
threshold so that it is now 40,000-74,999 Priority Customer complex
contracts. The rebate amount for this tier was previously $0.06 per
contract, per leg. The Exchange proposes to increase the rebate for
this tier to $0.07 per contract, per leg. With the adoption of a new
base tier, what was previously the second tier is now the third tier.
The ADV threshold for this tier was previously 75,000-124,999 Priority
Customer complex contracts. The Exchange is not proposing any change to
the ADV threshold for this tier. The rebate amount for this tier was
previously $0.07 per contract, per leg. The Exchange proposes to
increase the rebate for this tier to $0.08 per contract, per leg. With
the adoption of a new base tier, what was previously the third tier is
now the fourth tier. The ADV threshold for this tier was previously
125,000-249,999 Priority Customer complex contracts. The Exchange
proposes to amend this threshold by lowering the top end of the range
so that it is now 125,000-224,999 Priority Customer complex orders. The
rebate amount for this tier was previously $0.08 per contract, per leg.
The Exchange proposes to increase the rebate for this tier to $0.09 per
contract, per leg. Finally, with the adoption of a new base tier, what
was previously the fourth tier is now the fifth tier. The ADV threshold
for this tier was previously 250,000 or more Priority Customer complex
contracts. The Exchange proposes to amend this threshold by lowering it
so that it is now 225,000 or more Priority Customer complex contracts.
The rebate amount for this tier was previously $0.09 per contract, per
leg. The Exchange proposes to increase the rebate for this tier to
$0.10 per contract, per leg. The highest rebate amount achieved by the
Member for the current calendar month applies retroactively to all
Priority Customer complex order contracts that trade with non-Priority
Customer complex orders in the complex order book executed by the
Member during such calendar month.
For SPY, the Exchange currently provides a base rebate of $0.07 per
contract, per leg, for Priority Customer complex orders traded on the
Exchange when these orders trade against quotes or orders in the
regular orderbook. The current ADV threshold for the base tier is 0-
74,999 Priority Customer complex contracts. The Exchange proposes to
lower this threshold to 0-39,999 Priority Customer complex contracts
and the base rebate of $0.07 per contract, per leg, will now apply to
this tier. With the adoption of a new base tier, what was previously
the base tier is now the second tier. The ADV threshold for this tier
was previously 0-74,999 Priority Customer complex contracts. The
Exchange proposes to amend this threshold so that it is now 40,000-
74,999 Priority Customer complex contracts. The rebate amount for this
tier was previously $0.07 per contract, per leg. The Exchange proposes
to increase the rebate for this tier to $0.08 per contract, per leg.
With the adoption of a new base tier, what was previously the second
tier is now the third tier. The ADV threshold for this tier was
previously 75,000-124,999 Priority Customer complex contracts. The
Exchange is not proposing any change to the ADV threshold for this
tier. The rebate amount for this tier was previously $0.08 per
contract, per leg. The Exchange proposes to increase the rebate for
this tier to $0.09 per contract, per leg. With the adoption of a new
base tier, what was previously the third tier is now the fourth tier.
The ADV threshold for this tier was previously 125,000-249,999 Priority
Customer complex contracts. The Exchange proposes to amend this
threshold by lowering the top end of the range so that it is now
125,000-224,999 Priority Customer complex orders. The rebate amount for
this tier was previously $0.09 per contract, per leg. The Exchange
proposes to increase the rebate for this tier to $0.10 per contract,
per leg. Finally, with the adoption of a new base tier, what was
previously the fourth tier is now the fifth tier. The ADV threshold for
this tier was previously 250,000 or more Priority Customer complex
contracts. The Exchange proposes to amend this threshold by lowering it
so that it is now 225,000 or more Priority Customer complex contracts.
The rebate amount for this tier was previously $0.10 per contract, per
leg. The Exchange proposes to increase the rebate for this tier to
$0.11 per contract, per leg. The highest rebate amount achieved by the
Member for the current calendar month applies retroactively to all
Priority Customer complex order contracts that trade with non-Priority
Customer complex orders in the complex order book executed by the
Member during such calendar month.
Finally, to incentivize members to trade in the Exchange's various
auction mechanisms, the Exchange currently provides a per contract
rebate to those contracts that do not trade with the contra order in
the Exchange's Facilitation Mechanism and Solicited Order Mechanism,
except when they trade against pre-existing orders and quotes, and to
those contracts that do not trade with the contra order in the, Price
Improvement Mechanism. For the Facilitation and Solicited Order
Mechanisms, the rebate is currently $0.15 per contract. For the Price
Improvement Mechanism, the rebate is currently $0.25 per contract.
These rebates will continue to apply.
The Exchange is not proposing any other changes in this filing.
2. Statutory Basis
The Exchange believes that its proposal to amend its Schedule of
Fees is consistent with Section 6(b) of the Exchange Act \7\ in
general, and furthers the objectives of Section 6(b)(4) of the Exchange
Act \8\ in particular, in that it is an equitable allocation of
reasonable dues, fees and other charges among Exchange members and
other persons using its facilities. The impact of the proposal upon the
net fees paid by a particular market participant will depend on a
number of variables, most important of which will be its propensity to
interact with and respond to certain types of orders.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
The Exchange believes that it is reasonable and equitable to
provide rebates for Priority Customer complex orders when these orders
trade with Non-Priority Customer complex orders
[[Page 58428]]
in the complex order book because paying a rebate would continue to
attract additional order flow to the Exchange and create liquidity in
the symbols that are subject to the rebate, which the Exchange believes
ultimately will benefit all market participants who trade on ISE. The
Exchange has already established a volume-based incentive program, and
is now merely proposing to adopt an additional tier and increase the
rebate amounts in that program. The Exchange believes that the proposed
rebates are competitive with rebates provided by other exchanges and
are therefore reasonable and equitably allocated to those members that
direct orders to the Exchange rather than to a competing exchange.
The Exchange also believes that it is reasonable and equitable to
provide rebates for Priority Customer complex orders when these orders
trade against quotes or orders in the regular orderbook. Again, the
Exchange has already established a volume-based incentive program, and
is now merely proposing to adopt an additional tier and increase the
rebate amounts in that program. The Exchange believes paying these
rebates would also attract additional order flow to the Exchange.
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, which, among other things, adopts a lower base level, and
lowers the highest ADV threshold, so Members can qualify for rebates,
is reasonable as it will encourage Members to increase the amount of
Priority Customer complex orders that they send to the Exchange instead
of sending this order flow to a competing exchange. The Exchange
believes that with the proposed amended tiers, which provides for
additional volume thresholds, more Members are now likely to qualify
for higher rebates.
The complex order pricing employed by the Exchange has proven to be
an effective pricing mechanism and attractive to Exchange participants
and their customers. The Exchange believes that this proposed rule
change will continue to attract additional complex order business in
the symbols that are subject of this proposed rule change.
The Exchange believes that the proposed rebates are fair, equitable
and not unfairly discriminatory because they are consistent with price
differentiation and fee structures that exists today at other option
exchanges. The Exchange operates in a highly competitive market in
which market participants can readily direct order flow to another
exchange if they deem rebate levels at a particular exchange to be low.
With this proposed rebate change, the Exchange believes it remains an
attractive venue for market participants to trade complex orders.
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.
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 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 Act. If the Commission takes such action, the Commission shall
institute proceedings to determine whether the proposed rule should be
approved or disapproved.
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\9\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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-ISE-2012-72 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-2012-72. 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
10:00 a.m. and 3:00 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-2012-72 and should be
submitted on or before October 11, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-23178 Filed 9-19-12; 8:45 am]
BILLING CODE 8011-01-P
