Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Schedule of Fees, 36812-36815 [2013-14607]

Download as PDF 36812 Federal Register / Vol. 78, No. 118 / Wednesday, June 19, 2013 / Notices result of its affiliation with the Exchange, until such information is available generally to similarly situated Exchange members, in connection with the provision of inbound order routing to the Exchange. The Exchange stated that it has met all the above-listed conditions. By meeting such conditions, the Exchange believes that it has set up mechanisms that protect the independence of the Exchange’s regulatory responsibility with respect to NOS, and has demonstrated that NOS cannot use any information advantage it may have because of its affiliation with the Exchange.20 In the past, the Commission has expressed concern that the affiliation of an exchange with one of its members raises potential conflicts of interest, and the potential for unfair competitive advantage.21 Although the Commission continues to be concerned about potential unfair competition and conflicts of interest between an exchange’s self-regulatory obligations and its commercial interest when the exchange is affiliated with one of its members, for the reasons discussed below, the Commission believes that it is consistent with the Act to permit NOS, in its capacity as a facility of BX, to route orders inbound to the Exchange on a permanent basis instead of a pilot basis, subject to the limitations and conditions described above.22 20 See Notice, 78 FR at 26827. e.g., Securities Exchange Act Release Nos. 54170 (July 18, 2006), 71 FR 42149 (July 25, 2006) (SR–NASDAQ–2006–006) (order approving NASDAQ’s proposal to adopt NASDAQ Rule 2140, restricting affiliations between NASDAQ and its members); 53382 (February 27, 2006), 71 FR 11251 (March 6, 2006) (SR–NYSE–2005–77) (order approving the combination of the New York Stock Exchange, Inc. and Archipelago Holdings, Inc.); 58673 (September 29, 2008), 73 FR 57707 (October 3, 2008) (SR–Amex–2008–62 and SR–NYSE–2008– 60) (order approving the combination of NYSE Euronext and the American Stock Exchange LLC); 59135 (December 22, 2008), 73 FR 79954 (December 30, 2008) (SR–ISE–2009–85) (order approving the purchase by ISE Holdings of an ownership interest in Direct Edge Holdings LLC); 59281 (January 22, 2009), 74 FR 5014 (January 28, 2009) (SR–NYSE– 2008–120) (order approving a joint venture between NYSE and BIDS Holdings L.P.); 58375 (August 18, 2008), 73 FR 49498 (August 21, 2008) (File No. 10– 182) (order granting the exchange registration of BATS Exchange, Inc.); 61698 (March 12, 2010), 75 FR 13151 (March 18, 2010) (File Nos. 10–194 and 10–196) (order granting the exchange registration of EDGX Exchange, Inc. and EDGA Exchange, Inc.); and 62716 (August 13, 2010), 75 FR 51295 (August 19, 2010) (File No. 10–198) (order granting the exchange registration of BATS–Y Exchange, Inc.). 22 The Commission notes that these limitations and conditions are consistent with those previously approved by the Commission for other exchanges. See, e.g., Securities Exchange Act Release Nos. 69233 (March 25, 2013), 78 FR 19352 (March 29, 2013) (SR–NASDAQ–2013–028); 69232 (March 25, 2013), 78 FR 19342 (March 29, 2013) (SR–BX– 2013–013); 69229 (March 25, 2013), 78 FR 19337 mstockstill on DSK4VPTVN1PROD with NOTICES 21 See, VerDate Mar<15>2010 17:13 Jun 18, 2013 Jkt 229001 The Exchange has proposed four ongoing conditions applicable to NOS’s routing activities, which are enumerated above. The Commission believes that these conditions will mitigate its concerns about potential conflicts of interest and unfair competitive advantage. In particular, the Commission believes that FINRA’s oversight of NOS,23 combined with FINRA’s monitoring of NOS’s compliance with the Exchange’s rules and quarterly reporting to the Exchange, will help to protect the independence of the Exchange’s regulatory responsibilities with respect to NOS. The Commission also believes that the Exchange’s Rule 985(b) is designed to ensure that NOS cannot use any information advantage it may have because of its affiliation with the Exchange. V. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,24 that the proposed rule change (SR–Phlx–2013– 42) be, and hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.25 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–14534 Filed 6–18–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–69757; File No. SR–ISE– 2013–36] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Schedule of Fees June 13, 2013. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on June 3, 2013, the International Securities Exchange, LLC (the ‘‘Exchange’’ or the ‘‘ISE’’) filed with the Securities and (March 29, 2013) (SR–Phlx–2013–15); 67256 (June 26, 2012) 77 FR 39277 (July 2, 2012) (SR–BX–2012– 030); and 64090 (March 17, 2011), 76 FR 16462 (March 23, 2011) (SR–BX–2011–007). 23 This oversight will be accomplished through the 17d–2 Agreement between FINRA and the Exchange and the Regulatory Contract. See Notice, 78 FR at 26827 n.10 and accompanying text. 24 15 U.S.C. 78s(b)(2). 25 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. PO 00000 Frm 00070 Fmt 4703 Sfmt 4703 Exchange 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 the Substance of the Proposed Rule Change The ISE proposes 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 purpose of this proposed rule change is to amend certain fees for regular orders in Non-Select Symbols 3 and in FX Options traded on the Exchange. The fee changes discussed below apply to both standard options and mini options traded on ISE. The Exchange’s Schedule of Fees has separate tables for fees applicable to standard options and mini options. The Exchange notes that while the discussion below relates to fees for standard options, the fees for mini options, which are not discussed below, are and shall continue to be 1⁄10th of the fees for standard options.4 For regular orders in Non-Select Symbols, the Exchange currently charges an execution fee of: i) $0.18 per 3 Non-Select Symbols are options overlying all symbols that are not in the Penny Pilot Program. 4 See Securities Exchange Act Release No. 69270 (April 2, 2013), 78 FR 20988 (April 8, 2013) (SR– ISE–2013–28). E:\FR\FM\19JNN1.SGM 19JNN1 Federal Register / Vol. 78, No. 118 / Wednesday, June 19, 2013 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES contract for Market Maker 5 orders; ii) $0.20 per contract for Market Maker orders (for orders sent by Electronic Access Members); iii) $0.30 per contract for Firm Proprietary/Broker-Dealer and Professional Customer 6 orders; iv) $0.45 per contract for Non-ISE Market Maker 7 orders; and v) $0.00 per contract for Priority Customer 8 orders (for Singly Listed Symbols, this fee is $0.20 per contract). The Exchange now proposes to lower the execution fee for regular Firm Proprietary/Broker-Dealer and Professional Customer orders, from $0.30 per contract to $0.20 per contract, when these market participants provide liquidity in the Non-Select Symbols. The Exchange is not proposing any change to the execution fee for other market participants. For regular orders in FX Options, the Exchange currently charges an execution fee of: (i) $0.18 per contract for Market Maker and Priority Customer orders; (ii) $0.20 per contract for Market Maker orders (for orders sent by Electronic Access Members); (iii) $0.30 per contract for Firm Proprietary/ Broker-Dealer and Professional Customer orders; (iv) $0.45 per contract for Non-ISE Market Maker orders; (v) $0.40 per contract for Priority Customer orders in Early Adopter FX Option Symbols; and (vi) $0.00 per contract for Early Adopter Market Maker orders. The Exchange now proposes to lower the execution fee for regular Firm Proprietary/Broker-Dealer and Professional Customer orders, from $0.30 per contract to $0.20 per contract, when these market participants provide liquidity in FX Options. The Exchange is not proposing any change to the execution fee for other market participants. Finally, the Exchange proposes to remove a reference to a number of index options that previously traded on ISE pursuant to a license agreement and that have now been delisted by the Exchange. Specifically, ISE is removing reference to the following index options in Section VI. B. of the Schedule of Fees: the Russell 2000® Index (‘‘RUT’’), 5 The term ‘‘Market Makers’’ refers to ‘‘Competitive Market Makers’’ and ‘‘Primary Market Makers’’ collectively. See ISE Rule 100(a)(25). 6 A Professional Customer is a person who is not a broker/dealer and is not a Priority Customer. 7 A Non-ISE Market Maker, or Far Away Market Maker (‘‘FARMM’’), is a market maker as defined in Section 3(a)(38) of the Securities Exchange Act of 1934 registered in the same options class on another options exchange. 8 A Priority Customer is defined in ISE Rule 100(a)(37A) as a person or entity that is not a broker/dealer in securities, and does not place more than 390 orders in listed options per day on average during a calendar month for its own beneficial account(s). VerDate Mar<15>2010 17:13 Jun 18, 2013 Jkt 229001 the Russell 1000® Index (‘‘RUI’’), the Mini Russell 2000® Index (‘‘RMN’’), the Morgan Stanley Retail Index (‘‘MVR’’), the Morgan Stanley High Tech Index (‘‘MSH’’), the KBW Mortgage Finance Index ‘‘(MFX’’), the S&P® MidCap 400 Index (‘‘MID’’), and the S&P® SmallCap 600 Index (‘‘SML’’). 2. Statutory Basis The Exchange believes that its proposal to amend its Schedule of Fees is consistent with Section 6(b) of the Securities and Exchange Act of 1934 (the ‘‘Act’’) 9 in general, and furthers the objectives of Section 6(b)(4) of the Act 10 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 Exchange believes that its proposal to assess a $0.20 per contract fee for regular Firm Proprietary/BrokerDealer and regular Professional Customer orders in Non-Select Symbols and in FX Options when they provide liquidity is reasonable and equitably allocated because the fee is within the range of fees assessed by other exchanges employing similar pricing schemes. For example, NASDAQ Options Market (‘‘NOM’’) currently charges a fee of $0.45 per contract for similar orders in non-Penny Pilot options that provide liquidity in its regular order book,11 while NASDAQ OMX PHLX LLC (‘‘PHLX’’) charges $0.60 per contract for its foreign currency options regardless of whether the order provides liquidity or takes liquidity.12 The proposed fee is also reasonable and equitably allocated because it is identical to the fee currently charged by the Exchange for regular Crossing Orders in Non-Select Symbols and in FX Options.13 With this proposed rule change, regular Firm Proprietary/Broker-Dealer and regular Professional Customer orders will be charged the same fee when they provide liquidity as regular Market Maker (for orders sent by Electronic Access Members) orders and regular Priority Customer orders (for Singly Listed Symbols) are charged when they provide liquidity in Non-Select Symbols 9 15 U.S.C. 78f(b). U.S.C. 78f(b)(4). 11 See NOM fee schedule at https://nasdaq.cchwall street.com/NASDAQTools/PlatformViewer.asp? selectednode=chp_1_1_15&manual=%2Fnasdaq%2 Fmain%2Fnasdaq-optionsrules%2F. 12 See PHLX Fee Schedule at https:// nasdaqomxphlx.cchwallstreet.com/NASDAQOMX PHLXTools/PlatformViewer.asp?selectednode=chp %5F1%5F4%5F1&manual=%2Fnasdaqomxphlx %2Fphlx%2Fphlx%2Drulesbrd%2F. 13 See ISE Schedule of Fees, Section I, Regular Order Fees and Rebates for Standard Options, and Section V, FX Options Fees and Rebates. 10 15 PO 00000 Frm 00071 Fmt 4703 Sfmt 4703 36813 and in FX Options. The Exchange further notes that regular Firm Proprietary/Broker-Dealer and Professional Customer orders will now pay a lower fee than the fee currently charged to these orders, which the Exchange believes will serve as in incentive for market participants to direct this order flow to ISE rather than to a competing exchange. The Exchange believes its proposal to decrease the execution fee for regular Firm Proprietary/Broker-Dealer and regular Professional Customer orders in Non-Select Symbols and in FX Options when they provide liquidity is not unfairly discriminatory because the lower fee would apply uniformly to all regular Firm Proprietary/Broker-Dealer and Professional Customer orders in the same manner. The Exchange has determined to charge fees for regular orders in mini options at a rate that is 1⁄10th the rate of fees the Exchange currently provides for trading in standard options. The Exchange believes it is reasonable and equitable and not unfairly discriminatory to assess lower fees to provide market participants an incentive to trade mini options on the Exchange. The Exchange believes the proposed fees are reasonable and equitable in light of the fact that mini options have a smaller exercise and assignment value, specifically 1⁄10th that of a standard option contract, and, as such, levying fees that are 1⁄10th of what market participants pay today. The Exchange believes that the price differentiation between the various market participants is justified. As for Priority Customers, for the most part, the Exchange does not charge Priority Customers a fee (Priority Customers have traditionally traded options on the Exchange without a fee) and to the extent they pay a transaction fee, those fees are lower than or the same as fees charged to other market participants. The Exchange believes charging lower fees, or no fees, to Priority Customer orders attracts that order flow to the Exchange and thereby creates liquidity to the benefit of all market participants who trade on the Exchange. With respect to fees to Non-ISE Market Maker orders, the Exchange believes that charging Non-ISE Market Maker orders a higher rate than the fee charged to Market Maker, Firm Proprietary/BrokerDealer and Professional Customer regular orders is appropriate and not unfairly discriminatory because NonISE Market Makers are not subject to many of the non-transaction based fees that these other categories of membership are subject to, e.g., membership fees, access fees, API/ E:\FR\FM\19JNN1.SGM 19JNN1 36814 Federal Register / Vol. 78, No. 118 / Wednesday, June 19, 2013 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES Session fees, market data fees, etc. Therefore, the Exchange believes it is appropriate and not unfairly discriminatory to assess a higher transaction fee to Non-ISE Market Makers because the Exchange incurs costs associated with these types of orders that are not recovered by nontransaction based fees paid by members. With respect to fees for Market Maker orders, the Exchange believes that the price differentiation between the various market participants is appropriate and not unfairly discriminatory because Market Makers have different requirements and obligations to the Exchange that the other market participants do not (such as quoting requirements and paying membership-related non-transaction fees). The Exchange believes that it is equitable and not unfairly discriminatory to assess a higher fee to market participants that do not have such requirements and obligations that Exchange Market Makers do. Moreover, the Exchange believes that the proposed fees are fair, equitable and not unfairly discriminatory because the proposed fees are consistent with price differentiation that exists today at other options exchanges. Additionally, the Exchange believes it remains an attractive venue for market participants to direct their order flow in the symbols that are subject to this proposed rule change as its fees are competitive with those charged by other exchanges for similar trading strategies. The Exchange operates in a highly competitive market in which market participants can readily direct order flow to another exchange if they deem fee levels at a particular exchange to be excessive. For the reasons noted above, the Exchange believes that the proposed fees are fair, equitable and not unfairly discriminatory. Finally, the Exchange’s proposal to remove references to RUT, RUI, RMN, MVR, MSH, MFX, MID, and SML in Section VI.B. of the Schedule of Fees is reasonable, equitable and not unfairly discriminatory because the Exchange has delisted these products and these products no longer trade on the Exchange. The reference to a license surcharge on the Exchange’s Schedule of Fees for these products is therefore unnecessary. B. Self-Regulatory Organization’s Statement on Burden on Competition ISE does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange believes the proposed fee change does VerDate Mar<15>2010 17:13 Jun 18, 2013 Jkt 229001 not impose a burden on competition because the proposed fee is consistent with fees charged by other exchanges. The proposed fee change for regular orders in Non-Select Symbols, which the Exchange believes is lower than fees charged by its competitors for similar orders, will encourage competition and attract additional order flow in these symbols to ISE. The Exchange believes that the proposed fee change for regular orders in FX Options will not impose any unnecessary burden on competition because even though these options are solely listed on ISE, the Exchange operates in a highly competitive market, comprised of eleven exchanges, any of which can determine to trade similar products. At least one other exchange currently trades foreign currency options.14 While PHLX World Currency Options® are not fungible with FX Options, they provide investors with a choice to trade in a competing product. The Exchange also believes the proposed fee for regular orders in NonSelect Symbols and in FX Options does not impose a burden on competition because it sets the same rate and therefore, will apply uniformly to all regular Firm Proprietary/Broker-Dealer and Professional Customer orders in Non-Select Symbols and in FX Options traded on the Exchange. The Exchange notes that it operates in a highly competitive market in which market participants can readily direct their order flow to competing venues. In such an environment, the Exchange must continually review, and consider adjusting, its fees and rebates to remain competitive with other exchanges. For the reasons described above, the Exchange believes that the proposed fee change reflects this competitive environment. 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 15 and subparagraph (f)(2) of Rule 19b–4 14 See PHLX World Currency Options® at https:// www.nasdaqtrader.com/Micro.aspx?id=PHLX FOREXOptions. 15 15 U.S.C. 78s(b)(3)(A)(ii). PO 00000 Frm 00072 Fmt 4703 Sfmt 4703 thereunder,16 because it establishes a due, fee, or other charge imposed by ISE. 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: 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–2013–36 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–2013–36. 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 20549–1090, on official business days between the hours of 16 17 E:\FR\FM\19JNN1.SGM CFR 240.19b–4(f)(2). 19JNN1 Federal Register / Vol. 78, No. 118 / Wednesday, June 19, 2013 / Notices 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal offices of ISE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–ISE– 2013–36, and should be submitted on or before July 10, 2013. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–14607 Filed 6–18–13; 8:45 am] BILLING CODE 8011–01–P DEPARTMENT OF STATE [Public Notice 8357] 30-Day Notice of Proposed Information Collection: Statement of Consent: Issuance of a U.S. Passport to a Minor Under Age 16 Notice of request for public comment and submission to OMB of proposed collection of information. mstockstill on DSK4VPTVN1PROD with NOTICES ACTION: SUMMARY: The Department of State has submitted the information collection described below to the Office of Management and Budget (OMB) for approval. In accordance with the Paperwork Reduction Act of 1995 we are requesting comments on this collection from all interested individuals and organizations. The purpose of this Notice is to allow 30 days for public comment. DATES: Submit comments directly to the Office of Management and Budget (OMB) up to July 19, 2013. ADDRESSES: Direct comments to the Department of State Desk Officer in the Office of Information and Regulatory Affairs at the Office of Management and Budget (OMB). You may submit comments by the following methods: • Email: oira_submission@omb.eop.gov. You must include the DS form number, information collection title, and the OMB control number in the subject line of your message. • Fax: 202–395–5806. Attention: Desk Officer for Department of State. FOR FURTHER INFORMATION CONTACT: Direct requests for additional information regarding the collection listed in this notice, including requests 17 17 CFR 200.30–3(a)(12). VerDate Mar<15>2010 17:55 Jun 18, 2013 Jkt 229001 for copies of the proposed collection instrument and supporting documents, to PPT Forms Officer, U.S. Department of State, 2100 Pennsylvania Avenue., NW., Room 3030, Washington, DC 20037, who may be reached on (202) 663–2457 or at PPTFormsOfficer@state.gov. SUPPLEMENTARY INFORMATION: • Title of Information Collection: Statement of Consent: Issuance of a U.S. Passport to a Minor under Age 16. • OMB Control Number: 1405–0129. • Type of Request: Revision of a Currently Approved Collection. • Originating Office: Bureau of Consular Affairs, Passport Services, Office of Program Management and Operational Support, Program Coordination Division (CA/PPT/S/PMO/ PC). • Form Number: DS–3053. • Respondents: Individuals or Households. • Estimated Number of Respondents: 556,075 respondents per year. • Estimated Number of Responses: 556,075 responses per year. • Average Time per Response: 5 minutes or 0.0833 hour. • Total Estimated Burden Time: 46,321 hours per year. • Frequency: On occasion. • Obligation to Respond: Required to Obtain or Retain a Benefit. We are soliciting public comments to permit the Department to: • Evaluate whether the proposed information collection is necessary for the proper functions of the Department. • Evaluate the accuracy of our estimate of the time and cost burden for this proposed collection, including the validity of the methodology and assumptions used. • Enhance the quality, utility, and clarity of the information to be collected. • Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of information technology. Please note that comments submitted in response to this Notice are public record. Before including any detailed personal information, you should be aware that your comments as submitted, including your personal information, will be available for public review. Abstract of proposed collection: The information collected on the DS– 3053, ‘‘Statement of Consent: Issuance of a U.S. Passport to a Minor under Age 16’’, is used in conjunction with the DS–11, ‘‘Application for a U.S. Passport’’. When a minor under the age 16 applies for a passport and one of the PO 00000 Frm 00073 Fmt 4703 Sfmt 4703 36815 minor’s parents or legal guardians is unavailable at the time the passport application is executed, a completed and notarized DS–3053 can be used as the statement of consent. If the required statement is not submitted, the minor may not receive a U.S. passport, unless certain exceptions apply. The required statement may be submitted in other formats provided they meet statutory and regulatory requirements. The legal authority permitting this information collection assists the Department of State to administer the regulations in 22 CFR 51.28 requiring that both parents and/or any guardian consent to the issuance of a passport to a minor under age 16, except where one parent has sole custody or other exceptions apply. This regulation was mandated by Section 236 of the Admiral James W. Nance and Meg Donovan Foreign Relations authorization Act, Fiscal Year 2000 and 2001 (enacted by Pub, L, 106–113, Div. B, Section 1000 (a)(7)), and helps to prevent international parental child abduction, as well as child trafficking and other forms of passport fraud. Methodology: Passport Services collects information from U.S. citizens and non-citizen nationals when they complete and submit the DS–3053, ‘‘Statement of Consent: Issuance of a U.S. Passport to a Minor under Age 16’’. Passport applicants can either download the DS– 3053 from the internet or obtain the form from an Acceptance Facility/ Passport Agency. The form must be completed, signed, and submitted along with the applicant’s DS–11, ‘‘Application for a U.S. Passport’’. Additional Information: Under the currently approved OMB collection 1405–0129, the DS–3053 collects both the Statement of Consent and the Statement of Exigent/Special Family Circumstances. However, the proposed collection will request this information using two separate forms to ensure that we more clearly communicate to the public what is and what is not a special family circumstance. Separating out the forms also allows the passport specialist to more clearly control and adjudicate those cases that do not qualify as a special family circumstance: • DS–3053, ‘‘Statement of Consent: Issuance of a Passport to a Minor under Age 16,’’ and • DS–5525, ‘‘Statement of Exigent/ Special Family Circumstances for Issuance of a Passport to a Minor under Age 16.’’ E:\FR\FM\19JNN1.SGM 19JNN1

Agencies

[Federal Register Volume 78, Number 118 (Wednesday, June 19, 2013)]
[Notices]
[Pages 36812-36815]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-14607]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69757; File No. SR-ISE-2013-36]


Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change To Amend the Schedule of Fees

June 13, 2013.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on June 3, 2013, the International Securities Exchange, LLC (the 
``Exchange'' or the ``ISE'') filed with the Securities and Exchange 
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.
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The ISE proposes 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 purpose of this proposed rule change is to amend certain fees 
for regular orders in Non-Select Symbols \3\ and in FX Options traded 
on the Exchange. The fee changes discussed below apply to both standard 
options and mini options traded on ISE. The Exchange's Schedule of Fees 
has separate tables for fees applicable to standard options and mini 
options. The Exchange notes that while the discussion below relates to 
fees for standard options, the fees for mini options, which are not 
discussed below, are and shall continue to be \1/10\th of the fees for 
standard options.\4\
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    \3\ Non-Select Symbols are options overlying all symbols that 
are not in the Penny Pilot Program.
    \4\ See Securities Exchange Act Release No. 69270 (April 2, 
2013), 78 FR 20988 (April 8, 2013) (SR-ISE-2013-28).
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    For regular orders in Non-Select Symbols, the Exchange currently 
charges an execution fee of: i) $0.18 per

[[Page 36813]]

contract for Market Maker \5\ orders; ii) $0.20 per contract for Market 
Maker orders (for orders sent by Electronic Access Members); iii) $0.30 
per contract for Firm Proprietary/Broker-Dealer and Professional 
Customer \6\ orders; iv) $0.45 per contract for Non-ISE Market Maker 
\7\ orders; and v) $0.00 per contract for Priority Customer \8\ orders 
(for Singly Listed Symbols, this fee is $0.20 per contract). The 
Exchange now proposes to lower the execution fee for regular Firm 
Proprietary/Broker-Dealer and Professional Customer orders, from $0.30 
per contract to $0.20 per contract, when these market participants 
provide liquidity in the Non-Select Symbols. The Exchange is not 
proposing any change to the execution fee for other market 
participants.
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    \5\ The term ``Market Makers'' refers to ``Competitive Market 
Makers'' and ``Primary Market Makers'' collectively. See ISE Rule 
100(a)(25).
    \6\ A Professional Customer is a person who is not a broker/
dealer and is not a Priority Customer.
    \7\ A Non-ISE Market Maker, or Far Away Market Maker 
(``FARMM''), is a market maker as defined in Section 3(a)(38) of the 
Securities Exchange Act of 1934 registered in the same options class 
on another options exchange.
    \8\ A Priority Customer is defined in ISE Rule 100(a)(37A) as a 
person or entity that is not a broker/dealer in securities, and does 
not place more than 390 orders in listed options per day on average 
during a calendar month for its own beneficial account(s).
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    For regular orders in FX Options, the Exchange currently charges an 
execution fee of: (i) $0.18 per contract for Market Maker and Priority 
Customer orders; (ii) $0.20 per contract for Market Maker orders (for 
orders sent by Electronic Access Members); (iii) $0.30 per contract for 
Firm Proprietary/Broker-Dealer and Professional Customer orders; (iv) 
$0.45 per contract for Non-ISE Market Maker orders; (v) $0.40 per 
contract for Priority Customer orders in Early Adopter FX Option 
Symbols; and (vi) $0.00 per contract for Early Adopter Market Maker 
orders. The Exchange now proposes to lower the execution fee for 
regular Firm Proprietary/Broker-Dealer and Professional Customer 
orders, from $0.30 per contract to $0.20 per contract, when these 
market participants provide liquidity in FX Options. The Exchange is 
not proposing any change to the execution fee for other market 
participants.
    Finally, the Exchange proposes to remove a reference to a number of 
index options that previously traded on ISE pursuant to a license 
agreement and that have now been delisted by the Exchange. 
Specifically, ISE is removing reference to the following index options 
in Section VI. B. of the Schedule of Fees: the Russell 2000[supreg] 
Index (``RUT''), the Russell 1000[supreg] Index (``RUI''), the Mini 
Russell 2000[supreg] Index (``RMN''), the Morgan Stanley Retail Index 
(``MVR''), the Morgan Stanley High Tech Index (``MSH''), the KBW 
Mortgage Finance Index ``(MFX''), the S&P[supreg] MidCap 400 Index 
(``MID''), and the S&P[supreg] SmallCap 600 Index (``SML'').
2. Statutory Basis
    The Exchange believes that its proposal to amend its Schedule of 
Fees is consistent with Section 6(b) of the Securities and Exchange Act 
of 1934 (the ``Act'') \9\ in general, and furthers the objectives of 
Section 6(b)(4) of the Act \10\ 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.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange believes that its proposal to assess a $0.20 per 
contract fee for regular Firm Proprietary/Broker-Dealer and regular 
Professional Customer orders in Non-Select Symbols and in FX Options 
when they provide liquidity is reasonable and equitably allocated 
because the fee is within the range of fees assessed by other exchanges 
employing similar pricing schemes. For example, NASDAQ Options Market 
(``NOM'') currently charges a fee of $0.45 per contract for similar 
orders in non-Penny Pilot options that provide liquidity in its regular 
order book,\11\ while NASDAQ OMX PHLX LLC (``PHLX'') charges $0.60 per 
contract for its foreign currency options regardless of whether the 
order provides liquidity or takes liquidity.\12\ The proposed fee is 
also reasonable and equitably allocated because it is identical to the 
fee currently charged by the Exchange for regular Crossing Orders in 
Non-Select Symbols and in FX Options.\13\ With this proposed rule 
change, regular Firm Proprietary/Broker-Dealer and regular Professional 
Customer orders will be charged the same fee when they provide 
liquidity as regular Market Maker (for orders sent by Electronic Access 
Members) orders and regular Priority Customer orders (for Singly Listed 
Symbols) are charged when they provide liquidity in Non-Select Symbols 
and in FX Options. The Exchange further notes that regular Firm 
Proprietary/Broker-Dealer and Professional Customer orders will now pay 
a lower fee than the fee currently charged to these orders, which the 
Exchange believes will serve as in incentive for market participants to 
direct this order flow to ISE rather than to a competing exchange.
---------------------------------------------------------------------------

    \11\ See NOM fee schedule at https://nasdaq.cchwallstreet.com/NASDAQTools/PlatformViewer.asp?selectednode=chp_1_1_15&manual=%2Fnasdaq%2Fmain%2Fnasdaq-optionsrules%2F.
    \12\ See PHLX Fee Schedule at https://nasdaqomxphlx.cchwallstreet.com/NASDAQOMXPHLXTools/PlatformViewer.asp?selectednode=chp%5F1%5F4%5F1&manual=%2Fnasdaqomxphlx%2Fphlx%2Fphlx%2Drulesbrd%2F.
    \13\ See ISE Schedule of Fees, Section I, Regular Order Fees and 
Rebates for Standard Options, and Section V, FX Options Fees and 
Rebates.
---------------------------------------------------------------------------

    The Exchange believes its proposal to decrease the execution fee 
for regular Firm Proprietary/Broker-Dealer and regular Professional 
Customer orders in Non-Select Symbols and in FX Options when they 
provide liquidity is not unfairly discriminatory because the lower fee 
would apply uniformly to all regular Firm Proprietary/Broker-Dealer and 
Professional Customer orders in the same manner.
    The Exchange has determined to charge fees for regular orders in 
mini options at a rate that is \1/10\th the rate of fees the Exchange 
currently provides for trading in standard options. The Exchange 
believes it is reasonable and equitable and not unfairly discriminatory 
to assess lower fees to provide market participants an incentive to 
trade mini options on the Exchange. The Exchange believes the proposed 
fees are reasonable and equitable in light of the fact that mini 
options have a smaller exercise and assignment value, specifically \1/
10\th that of a standard option contract, and, as such, levying fees 
that are \1/10\th of what market participants pay today.
    The Exchange believes that the price differentiation between the 
various market participants is justified. As for Priority Customers, 
for the most part, the Exchange does not charge Priority Customers a 
fee (Priority Customers have traditionally traded options on the 
Exchange without a fee) and to the extent they pay a transaction fee, 
those fees are lower than or the same as fees charged to other market 
participants. The Exchange believes charging lower fees, or no fees, to 
Priority Customer orders attracts that order flow to the Exchange and 
thereby creates liquidity to the benefit of all market participants who 
trade on the Exchange. With respect to fees to Non-ISE Market Maker 
orders, the Exchange believes that charging Non-ISE Market Maker orders 
a higher rate than the fee charged to Market Maker, Firm Proprietary/
Broker-Dealer and Professional Customer regular orders is appropriate 
and not unfairly discriminatory because Non-ISE Market Makers are not 
subject to many of the non-transaction based fees that these other 
categories of membership are subject to, e.g., membership fees, access 
fees, API/

[[Page 36814]]

Session fees, market data fees, etc. Therefore, the Exchange believes 
it is appropriate and not unfairly discriminatory to assess a higher 
transaction fee to Non-ISE Market Makers because the Exchange incurs 
costs associated with these types of orders that are not recovered by 
non-transaction based fees paid by members. With respect to fees for 
Market Maker orders, the Exchange believes that the price 
differentiation between the various market participants is appropriate 
and not unfairly discriminatory because Market Makers have different 
requirements and obligations to the Exchange that the other market 
participants do not (such as quoting requirements and paying 
membership-related non-transaction fees). The Exchange believes that it 
is equitable and not unfairly discriminatory to assess a higher fee to 
market participants that do not have such requirements and obligations 
that Exchange Market Makers do.
    Moreover, the Exchange believes that the proposed fees are fair, 
equitable and not unfairly discriminatory because the proposed fees are 
consistent with price differentiation that exists today at other 
options exchanges. Additionally, the Exchange believes it remains an 
attractive venue for market participants to direct their order flow in 
the symbols that are subject to this proposed rule change as its fees 
are competitive with those charged by other exchanges for similar 
trading strategies. The Exchange operates in a highly competitive 
market in which market participants can readily direct order flow to 
another exchange if they deem fee levels at a particular exchange to be 
excessive. For the reasons noted above, the Exchange believes that the 
proposed fees are fair, equitable and not unfairly discriminatory.
    Finally, the Exchange's proposal to remove references to RUT, RUI, 
RMN, MVR, MSH, MFX, MID, and SML in Section VI.B. of the Schedule of 
Fees is reasonable, equitable and not unfairly discriminatory because 
the Exchange has delisted these products and these products no longer 
trade on the Exchange. The reference to a license surcharge on the 
Exchange's Schedule of Fees for these products is therefore 
unnecessary.

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

    ISE does not believe that the proposed rule change will impose any 
burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. The Exchange believes the 
proposed fee change does not impose a burden on competition because the 
proposed fee is consistent with fees charged by other exchanges. The 
proposed fee change for regular orders in Non-Select Symbols, which the 
Exchange believes is lower than fees charged by its competitors for 
similar orders, will encourage competition and attract additional order 
flow in these symbols to ISE. The Exchange believes that the proposed 
fee change for regular orders in FX Options will not impose any 
unnecessary burden on competition because even though these options are 
solely listed on ISE, the Exchange operates in a highly competitive 
market, comprised of eleven exchanges, any of which can determine to 
trade similar products. At least one other exchange currently trades 
foreign currency options.\14\ While PHLX World Currency Options[supreg] 
are not fungible with FX Options, they provide investors with a choice 
to trade in a competing product.
---------------------------------------------------------------------------

    \14\ See PHLX World Currency Options[supreg] at https://www.nasdaqtrader.com/Micro.aspx?id=PHLXFOREXOptions.
---------------------------------------------------------------------------

    The Exchange also believes the proposed fee for regular orders in 
Non-Select Symbols and in FX Options does not impose a burden on 
competition because it sets the same rate and therefore, will apply 
uniformly to all regular Firm Proprietary/Broker-Dealer and 
Professional Customer orders in Non-Select Symbols and in FX Options 
traded on the Exchange.
    The Exchange notes that it operates in a highly competitive market 
in which market participants can readily direct their order flow to 
competing venues. In such an environment, the Exchange must continually 
review, and consider adjusting, its fees and rebates to remain 
competitive with other exchanges. For the reasons described above, the 
Exchange believes that the proposed fee change reflects this 
competitive environment.

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 \15\ and subparagraph (f)(2) of Rule 19b-4 
thereunder,\16\ because it establishes a due, fee, or other charge 
imposed by ISE.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \16\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    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:

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-2013-36 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-2013-36. 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 20549-1090, on official business days 
between the hours of

[[Page 36815]]

10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for inspection and copying at the principal offices of ISE. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-ISE-2013-36, and should be 
submitted on or before July 10, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
---------------------------------------------------------------------------

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

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-14607 Filed 6-18-13; 8:45 am]
BILLING CODE 8011-01-P
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