Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Schedule of Fees, 15646-15650 [2015-06621]

Download as PDF 15646 Federal Register / Vol. 80, No. 56 / Tuesday, March 24, 2015 / Notices will ensure that such costs are covered by each subscriber, with no subscriber being assessed less than the cost of providing the service. mstockstill on DSK4VPTVN1PROD with NOTICES B. Self-Regulatory Organization’s Statement on Burden on Competition NASDAQ does not believe that the proposed rule changes will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended.7 NASDAQ notes that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive, or rebate opportunities available at other venues to be more favorable. In such an environment, NASDAQ must continually adjust its fees to remain competitive with other exchanges and with alternative trading systems that have been exempted from compliance with the statutory standards applicable to exchanges. Because competitors are free to modify their own fees in response, and because market participants may readily adjust their order routing practices, NASDAQ believes that the degree to which fee changes in general, and changes to fees for non-mandatory services particularly, in this market may impose any burden on competition is extremely limited. In this instance, the increases to the fees assessed for subscription to NASDAQ’s Risk Management Service arise from a need to cover the increase of costs in offering the service since 2006, and the loss of a significant number trades covered by the service and a reduction in subscribers due to recent changes to the ORF. Because of the reduced number of trades and subscribers, the costs of the service must be supported by those subscribers that remain. To the extent that the fee increases are too high, subscribers may cancel their subscriptions and develop their own risk management tools that replicate the Risk Management Service or use third party risk management tools. As such, NASDAQ does not believe that any of the proposed changes will impair the ability of members or competing order execution venues to maintain their competitive standing in the financial markets, and to the extent the fees are deemed too high, the changes may represent an opportunity for other market venues or third parties to provide competitive services. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act.8 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. available for Web site viewing and printing in the Commission’s Public Reference Room on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal offices of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–NASDAQ–2015–021, and should be submitted on or before April 14, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.9 Jill M. Peterson, Assistant Secretary. 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: [FR Doc. 2015–06620 Filed 3–23–15; 8:45 am] 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–NASDAQ–2015–021 on the subject line. Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Schedule of Fees Paper Comments • Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NASDAQ–2015–021. 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 BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–74525; File No. SR–ISE– 2015–09] March 18, 2015. 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 March 12, 2015, 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 proposes to amend the Schedule of Fees as described in more detail below. The text of the proposed rule change is available on the Exchange’s Web site (https:// www.ise.com), at the principal office of 9 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 7 15 U.S.C. 78f(b)(8). VerDate Sep<11>2014 01:09 Mar 24, 2015 8 15 Jkt 235001 PO 00000 U.S.C. 78s(b)(3)(A)(ii). Frm 00099 Fmt 4703 Sfmt 4703 E:\FR\FM\24MRN1.SGM 24MRN1 Federal Register / Vol. 80, No. 56 / Tuesday, March 24, 2015 / Notices 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 mstockstill on DSK4VPTVN1PROD with NOTICES The Exchange proposes to amend the Schedule of Fees to (1) provide more favorable Priority Customer 3 complex order rebates, (2) charge all legs for complex Crossing Orders,4 (3) apply Foreign Exchange (‘‘FX’’) Option fees and rebates to complex orders in FX Option Symbols,5 including Early Adopter FX Option Symbols,6 and (4) eliminate the Market Maker Plus 7 large size rebate for BAC, SPY, and IWM. Each of the proposed changes is described in more detail below. 3 A ‘‘Priority Customer’’ is a person or entity that is not a broker/dealer in securities, and does not place more than 390 orders in listed options per day on average during a calendar month for its own beneficial account(s), as defined in Rule 100(a)(37A). 4 A ‘‘Crossing Order’’ is an order executed in the Exchange’s Facilitation Mechanism, Solicited Order Mechanism, Price Improvement Mechanism (‘‘PIM’’) or submitted as a Qualified Contingent Cross (‘‘QCC’’) order. For purposes of the fee schedule, orders executed in the Block Order Mechanism are also considered Crossing Orders. 5 ‘‘FX Option Symbols’’ are options overlying AUM, GBP, EUU and NDO. 6 ‘‘Early Adopter FX Option Symbols’’ are options overlying NZD, PZO, SKA, BRB, AUX, BPX, CDD, EUI, YUK and SFC. 7 A Market Maker Plus is a Market Maker who is on the National Best Bid or National Best Offer at least 80% of the time for series trading between $0.03 and $3.00 (for options whose underlying stock’s previous trading day’s last sale price was less than or equal to $100) and between $0.10 and $3.00 (for options whose underlying stock’s previous trading day’s last sale price was greater than $100) in premium in each of the front two expiration months. A Market Maker’s single best and single worst quoting days each month based on the front two expiration months, on a per symbol basis, will be excluded in calculating whether a Market Maker qualifies for the Market Maker Plus rebate, if doing so will qualify a Market Maker for the rebate. VerDate Sep<11>2014 01:09 Mar 24, 2015 Jkt 235001 1. Priority Customer Complex Order Rebates The Exchange currently provides volume-based tiered rebates for Priority Customer complex orders when these orders trade with non-Priority Customer orders in the complex order book, or trade with quotes and orders on the regular order book. These complex order rebates are provided to members based on the member’s average daily volume (‘‘ADV’’) in Priority Customer complex orders in six volume tiers as follows: 0 to 29,999 contracts (Tier 1), 30,000 to 74,999 contracts (Tier 2), 75,000 to 124,999 contracts (Tier 3), 125,000 to 224,999 contracts (Tier 4), 225,000 to 299,999 contracts (Tier 5), and 300,000 or more contracts (Tier 6).8 The Exchange now proposes to decrease the volume requirements necessary for achieving higher Priority Customer complex order rebates. The proposed ADV thresholds are as follows: 0 to 29,999 contracts (Tier 1), 30,000 to 59,999 contracts (Tier 2), 60,000 to 99,999 contracts (Tier 3), 100,000 to 149,999 contracts (Tier 4), 150,000 to 199,999 contracts (Tier 5), and 200,000 or more contracts (Tier 6). In addition, the Exchange proposes to increase the rebates provided for Priority Customer complex orders. Currently, Priority Customer complex orders receive a rebate of $0.30 per contract in Select Symbols 9 and $0.63 per contract in Non-Select Symbols 10 for Tier 1, $0.35 per contract in Select Symbols and $0.71 per contract in NonSelect Symbols for Tier 2, $0.39 per contract in Select Symbols and $0.75 per contract in Non-Select Symbols for Tier 3, $0.41 per contract in Select Symbols and $0.80 per contract in NonSelect Symbols for Tier 4, $0.43 per contract in Select Symbols and $0.82 per contract in Non-Select Symbols for Tier 5, and $0.45 per contract in Select Symbols and $0.83 per contract in NonSelect Symbols for Tier 6.11 The Exchange now proposes to increase the rebate in Select Symbols to $0.40 per 8 The rebate for the highest tier volume achieved is applied retroactively to all Priority Customer Complex volume once the threshold has been reached. For purposes of determining Priority Customer Complex ADV, any day that the complex order book is not open for the entire trading day may be excluded from such calculation; provided that the Exchange will only remove the day for members that would have a lower ADV with the day included. 9 ‘‘Select Symbols’’ are options overlying all symbols listed on the ISE that are in the Penny Pilot Program. 10 ‘‘Non-Select Symbols’’ are options overlying all symbols excluding Select Symbols. 11 These rebates are provided per contract per leg if the order trades with non-Priority Customer orders in the complex order book, or trades with quotes and orders on the regular order book. PO 00000 Frm 00100 Fmt 4703 Sfmt 4703 15647 contract for Tier 3, $0.43 per contract for Tier 4, $0.45 per contract for Tier 5, and $0.46 per contact for Tier 6. For NonSelect Symbols the rebate will be increased to $0.78 per contract for Tier 3. Other rebate amounts will remain unchanged from their current levels. 2. Fee for Complex Crossing Orders The Exchange charges Market Maker,12 Non-ISE Market Maker,13 Firm Proprietary 14/Broker-Dealer,15 and Professional Customer 16 orders a fee for complex Crossing Orders of $0.20 per contract. This fee applies to complex Crossing Orders except for PIM orders of 100 or fewer contracts (which are subject to a separate fee) and is charged for all legs for PIM orders and for the largest leg only for all other Crossing Orders. The Exchange now proposes to charge for all legs for all Crossing Orders, including QCC orders and orders entered into the PIM, Facilitation, Block and Solicited Order Mechanisms. Firm Proprietary and NonISE Market Maker contracts traded will remain subject to the Crossing Fee Cap, as provided in Section IV.H.17 3. Complex FX Option Fees and Rebates ISE charges fees and provides rebates for orders in FX Option Symbols, including Early Adopter FX Option Symbols, executed on the Exchange. While the Schedule of Fees has separate fees and rebates in Section III applicable to simple orders in FX option classes, the complex order fees and rebates for Non-Select Symbols in Section II currently apply to complex orders in these symbols. The Exchange now proposes to apply the FX option fees and rebates in Section III to all trades executed in FX option classes, including both simple and complex orders. The 12 The term ‘‘Market Makers’’ refers to ‘‘Competitive Market Makers’’ and ‘‘Primary Market Makers’’ collectively. See Rule 100(a)(25). 13 A ‘‘Non-ISE Market Maker’’ is a market maker as defined in Section 3(a)(38) of the Securities Exchange Act of 1934, as amended, registered in the same options class on another options exchange. 14 A ‘‘Firm Proprietary’’ order is an order submitted by a member for its own proprietary account. 15 A ‘‘Broker-Dealer’’ order is an order submitted by a member for a broker-dealer account that is not its own proprietary account. 16 A ‘‘Professional Customer’’ is a person or entity that is not a broker/dealer and is not a Priority Customer. 17 The Exchange notes that the relevant citation to the Crossing Fee Cap currently refers mistakenly to Section VI, which was renumbered Section IV in connection with the delisting of Mini Options on ISE, and also uses a previous name ‘‘Firm Fee Cap’’. The Exchange proposes to update this section and make corresponding changes to other outdated references to the Crossing Fee Cap, as well as to Market Maker Discount Tiers, which are both now located in Section IV. E:\FR\FM\24MRN1.SGM 24MRN1 mstockstill on DSK4VPTVN1PROD with NOTICES 15648 Federal Register / Vol. 80, No. 56 / Tuesday, March 24, 2015 / Notices proposed fees, which already apply to simple orders in FX option classes, are briefly described below. Maker/Taker Fees and Rebates: Currently, non-Priority Customer complex orders in FX option classes are charged a fee for removing liquidity that ranges from $0.85 per contract for Market Maker orders to $0.87 per contract for Non-ISE Market Maker, Firm Proprietary/Broker-Dealer and Professional Customer orders. The same rates similarly apply when these market participants provide liquidity to Priority Customer orders. Otherwise, the applicable maker fee is $0.10 per contract for Market Maker, Firm Proprietary/Broker-Dealer, and Professional Customer orders and $0.20 per contract for Non-ISE Market Maker orders. Priority Customer complex orders are not currently charged a fee for adding or removing liquidity in FX option classes. Instead, these orders are eligible for a tiered volume based rebate of $0.63 per contract to $0.83 per contract when trading with non-Priority Customer orders in the complex order book, or trading with quotes and orders on the regular order book. With the proposed change, members will pay a fee, regardless of adding or removing liquidity, of $0.22 per contract for Market Maker orders (subject to tier discounts),18 $0.20 for Market Maker orders sent by an Electronic Access Member (‘‘EAM’’), $0.45 per contract for Non-ISE Market Maker orders, $0.30 per contract for Firm Proprietary/BrokerDealer and Professional Customer orders, and $0.40 per contract for Priority Customer orders. Early Adopter Market Makers participate in a revenue sharing arrangement as described in footnote 2 to Section III, and will not be liable for FX option fees. Fee for Crossing Orders: Currently, non-Priority Customer complex orders in FX option classes are charged a fee for Crossing Orders of $0.20 per contract, or $0.03 to $0.05 per contract for PIM orders of 100 or fewer contracts. With the proposed change, the fee for Crossing Orders in FX option classes will be $0.22 per contract for Market Maker orders (subject to tier discounts),19 $0.20 per contract for Market Maker orders sent by an EAM, Non-ISE Market Maker orders, Firm Proprietary/Broker-Dealer orders, and Professional Customer orders, and, finally, $0.40 per contract for Priority Customer orders. For PIM orders of 100 18 The Exchange proposes to clarify in Section IV.C., which describes the relevant market maker discount tiers, that both simple and complex orders in FX options classes are now subject to these tiers pursuant to footnote 3 of Section III. 19 See id. VerDate Sep<11>2014 01:09 Mar 24, 2015 Jkt 235001 or fewer contracts, the proposed fee would be $0.03 to $0.05 per contract for non-Priority Customer orders and $0.40 per contract for Priority Customer orders. Again, Early Adopter Market Makers will not be charged a fee. Response Fees and Break-Up Rebates: Currently, the fee for responses to complex Crossing Orders in FX option classes is $0.90 per contract for Market Maker orders and $0.95 per contract for all other market participants. NonMarket Maker orders also receive a PIM break-up rebate of $0.80 per contract. With the proposed change, all market participants, except for Early Adopter Market Makers, will pay a fee for responses to complex Crossing Orders in FX option classes of $0.45 per contract. In addition, non-Market Maker complex orders in these symbols will be eligible for a PIM break-up rebate of $0.15 per contract. 4. Market Maker Plus Large Size Rebate for BAC, SPY, and IWM In order to promote and encourage liquidity in Select Symbols, the Exchange currently offers Market Makers who meet the quoting requirements for Market Maker Plus enhanced rebates for adding liquidity in those symbols. In May 2014, the Exchange introduced a new Market Maker Plus rebate for members that meet specified quotation size requirements on a trade by trade basis in three actively traded Select Symbols: BAC, SPY, and IWM.20 In particular, Market Makers who qualify as Market Maker Plus in BAC, SPY, and IWM currently earn a rebate of $0.25 per contract if at the time of the trade their displayed quantity, in the traded series, is at least 1,000 contracts. The Exchange now proposes to eliminate this Market Maker Plus large size rebate. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,21 in general, and Section 6(b)(4) of the Act,22 in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among its members and other persons using its facilities. 1. Priority Customer Complex Order Rebates The Exchange believes that it is reasonable and equitable to decrease the volume requirements necessary to 20 See Securities Exchange Act Release No. 72163 (May 14, 2014), 79 FR 28985 (May 20, 2014) (SR– ISE–2014–27). 21 15 U.S.C. 78f. 22 15 U.S.C. 78f(b)(4). PO 00000 Frm 00101 Fmt 4703 Sfmt 4703 achieve the Priority Customer complex order rebates, and increase the rebate amounts, as these proposed changes are designed to attract additional Priority Customer complex order volume to the Exchange. The Exchange already provides volume-based tiered rebates for Priority Customer complex orders, and believes that increasing the rebates and lowering the associated volume thresholds will incentivize members to send additional order flow to the ISE in order to achieve these rebates for their Priority Customer complex order volume, creating additional liquidity to the benefit of all members that trade complex orders on the Exchange. The Exchange further believes that it is equitable and not unfairly discriminatory to continue to provide a rebate only for Priority Customer complex orders. A Priority Customer is by definition not a broker or 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). This limitation does not apply to participants whose behavior is substantially similar to that of market professionals, including Professional Customers, who will generally submit a higher number of orders (many of which do not result in executions) than Priority Customers. 2. Fee for Complex Crossing Orders The Exchange believes that it is reasonable and equitable to charge for all legs for all Crossing Orders, including QCC orders and orders entered into the PIM, Facilitation, Block and Solicited Order Mechanisms. While this is a fee increase for members that execute complex Crossing Orders (other than PIM orders), the Exchange believes that this change is warranted as the current practice effectively discounts the fee charged for complex Crossing Orders to zero after the largest leg, effectively subsidizing complex Crossing Orders with numerous legs. The Exchange no longer believes that this subsidy is appropriate, and has therefore chosen to discontinue it for all complex Crossing Orders as it has already done for PIM orders. The Exchange does not believe that this proposed change is unfairly discriminatory as it would apply equally to all market participants that trade complex Crossing Orders on the Exchange. 3. Complex FX Option Fees The Exchange believes that it is reasonable and equitable to charge the same fees for complex orders in FX Option Symbols and Early Adopter FX Option Symbols as the Exchange E:\FR\FM\24MRN1.SGM 24MRN1 Federal Register / Vol. 80, No. 56 / Tuesday, March 24, 2015 / Notices 15649 mstockstill on DSK4VPTVN1PROD with NOTICES currently charges for simple orders in these symbols. The Exchange believes that the current table of FX option fees and rebates in Section III of the Schedule of Fees is appropriate for both simple and complex orders.23 Charging the same fees across the board in these proprietary products will simplify the Schedule of Fees to the benefit of members and investors. The Exchange does not believe that this proposed change is unfairly discriminatory as members are already assessed fees and rebates for simple orders in FX option classes based on Section III of the Schedule of Fees. The proposed change will merely ensure that these members pay the same fees for complex orders in these symbols as well. For the majority of market participants this means that fees will be lower, and in some cases significantly lower. Certain fees, including, for example, fees charged for Priority Customer orders, however, will be increased with the proposed change. While Priority Customer orders generally receive several benefits for trading on ISE, the Exchange does not believe that it is unfairly discriminatory to reduce some of those benefits here. In this regard, the Exchange notes that the proposed fee for Priority Customer complex FX option orders is within the range of fees currently charged by some of the Exchange’s competitors, including NASDAQ OMX PHLX, LLC (‘‘Phlx’’).24 Similarly, the Exchange notes that PIM break-up rebates would be reduced with the proposed rule change. The Exchange believes that this is reasonable, equitable, and not unfairly discriminatory as the proposed break-up rebates are set at a level that the Exchange believes will continue to provide an appropriate incentive for members. size rebate has been an effective incentive for Market Makers. The Exchange therefore believes that it is appropriate to discontinue the large size rebate at this time. 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. B. Self-Regulatory Organization’s Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,25 the Exchange does not believe that the proposed rule change will impose any burden on intermarket or intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. The transaction fee changes amend various fees and rebates and are designed to attract additional order flow to the Exchange. The Exchange believes that the proposed fees and rebates are competitive with fees and rebates offered to orders executed on other options exchanges. The Exchange 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 changes reflect this competitive environment. IV. Solicitation of Comments 4. Market Maker Plus Large Size Rebate for BAC, SPY, and IWM The Exchange believes that it is reasonable, equitable, and not unfairly discriminatory to eliminate the Market Maker Plus large size rebate as the Exchange does not believe that this program has satisfied its intended goals. When ISE introduced this program, the Exchange was hopeful that the higher rebate would encourage Market Makers to post deeper size in these actively traded symbols. After running this program for several months, the Exchange does not believe that the large 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 26 and subparagraph (f)(2) of Rule 19b–4 thereunder,27 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 23 The Exchange notes that the proposed change to Section IV.C. is intended solely to clarify that market maker discount tiers will be extended to complex orders in FX option classes consistent with the meaning of footnote 3 to Section III. 24 See Phlx Pricing Schedule, Section III, Singly Listed Options. VerDate Sep<11>2014 01:09 Mar 24, 2015 Jkt 235001 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. 25 15 U.S.C. 78f(b)(8). U.S.C. 78s(b)(3)(A)(ii). 27 17 CFR 240.19b–4(f)(2). 26 15 PO 00000 Frm 00102 Fmt 4703 Sfmt 4703 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–2015–09 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–ISE–2015–09. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the ISE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–ISE–2015–09 and should be submitted by April 14, 2015. E:\FR\FM\24MRN1.SGM 24MRN1 15650 Federal Register / Vol. 80, No. 56 / Tuesday, March 24, 2015 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.28 Jill M. Peterson, Assistant Secretary. [FR Doc. 2015–06621 Filed 3–23–15; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–74529; File No. SR– ISEGemini–2015–07] Self-Regulatory Organizations; ISE Gemini, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Schedule of Fees March 18, 2015. 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 March 13, 2015 ISE Gemini, LLC (the ‘‘Exchange’’ or ‘‘ISE Gemini’’) 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 selfregulatory 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 ISE Gemini proposes to amend the Schedule of Fees to expand low latency Ethernet fees to non-members. The text of the proposed rule change is available on the Exchange’s Internet Web site at https://www.ise.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. mstockstill on DSK4VPTVN1PROD with NOTICES II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The self-regulatory organization has prepared summaries, set forth in Sections A, B and C below, of the most significant aspects of such statements. 28 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Sep<11>2014 01:09 Mar 24, 2015 Jkt 235001 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange charges an Ethernet fee for its four different Ethernet connection options, which is $1,000 per month for a 1 Gigabit (‘‘Gb’’) connection, $4,500 per month for a 10 Gb connection, $8,000 per month for a 10 Gb low latency connection, and $15,000 per month for a 40 Gb low latency connection. These Ethernet connectivity options provide access to both ISE Gemini and ISE Gemini’s sister exchange, International Securities Exchange, LLC (‘‘ISE’’).3 While the 1 Gb and 10 Gb Ethernet fees apply to both members and non-members, the 10 Gb low latency and 40 Gb low latency fees apply only to members. The Exchange now proposes to amend the Schedule of Fees to apply the low latency Ethernet fee to non-members as well. The Exchange designates this filing to become effective on March 16, 2015. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,4 in general, and Section 6(b)(4) of the Act,5 in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among its members and other persons using its facilities. The Exchange believes that it is reasonable, equitable, and not unfairly discriminatory to extend the low latency Ethernet fees to non-members. Market participants that establish connectivity to the Exchange will continue to pay the same fee based on the Ethernet options that they choose, and there will be no discrimination between the fees charged for members and non-members. While these low latency connections will likely continue to be of primary interest to Exchange members, the Exchange believes that these options should be available to interested non-members as well. Furthermore, the Exchange notes that the proposed rule change does not modify the fees applicable to these premium low latency Ethernet options, which will remain at their current levels. The low latency Ethernet fees described in this filing remain consistent with the Exchange’s connectivity costs, including costs for software and hardware enhancements, 3 Market participants pay the same fees regardless of whether they choose to connect to both exchanges or solely to ISE Gemini. 4 15 U.S.C. 78f. 5 15 U.S.C. 78f(b)(4). PO 00000 Frm 00103 Fmt 4703 Sfmt 4703 and resources dedicated to development, quality assurance, and support. B. Self-Regulatory Organization’s Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,6 the Exchange does not believe that the proposed rule change will impose any burden on intermarket or intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change amends the Schedule of Fees to apply low latency Ethernet fees to non-members in addition to members, and is not intended to have any competitive effect. The Exchange 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 to remain competitive with other exchanges. For the reasons described above, the Exchange believes that the proposed fee changes reflect 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,7 and subparagraph (f)(2) of Rule 19b–4 thereunder,8 because it establishes a due, fee, or other charge imposed by ISE Gemini. 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. 6 15 U.S.C. 78f(b)(8). U.S.C. 78s(b)(3)(A)(ii). 8 17 CFR 240.19b–4(f)(2). 7 15 E:\FR\FM\24MRN1.SGM 24MRN1

Agencies

[Federal Register Volume 80, Number 56 (Tuesday, March 24, 2015)]
[Notices]
[Pages 15646-15650]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-06621]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74525; File No. SR-ISE-2015-09]


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

March 18, 2015.
    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 March 12, 2015, 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 proposes to amend the Schedule of Fees as described in more 
detail below. The text of the proposed rule change is available on the 
Exchange's Web site (https://www.ise.com), at the principal office of

[[Page 15647]]

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 proposes to amend the Schedule of Fees to (1) provide 
more favorable Priority Customer \3\ complex order rebates, (2) charge 
all legs for complex Crossing Orders,\4\ (3) apply Foreign Exchange 
(``FX'') Option fees and rebates to complex orders in FX Option 
Symbols,\5\ including Early Adopter FX Option Symbols,\6\ and (4) 
eliminate the Market Maker Plus \7\ large size rebate for BAC, SPY, and 
IWM. Each of the proposed changes is described in more detail below.
---------------------------------------------------------------------------

    \3\ A ``Priority Customer'' is a person or entity that is not a 
broker/dealer in securities, and does not place more than 390 orders 
in listed options per day on average during a calendar month for its 
own beneficial account(s), as defined in Rule 100(a)(37A).
    \4\ A ``Crossing Order'' is an order executed in the Exchange's 
Facilitation Mechanism, Solicited Order Mechanism, Price Improvement 
Mechanism (``PIM'') or submitted as a Qualified Contingent Cross 
(``QCC'') order. For purposes of the fee schedule, orders executed 
in the Block Order Mechanism are also considered Crossing Orders.
    \5\ ``FX Option Symbols'' are options overlying AUM, GBP, EUU 
and NDO.
    \6\ ``Early Adopter FX Option Symbols'' are options overlying 
NZD, PZO, SKA, BRB, AUX, BPX, CDD, EUI, YUK and SFC.
    \7\ A Market Maker Plus is a Market Maker who is on the National 
Best Bid or National Best Offer at least 80% of the time for series 
trading between $0.03 and $3.00 (for options whose underlying 
stock's previous trading day's last sale price was less than or 
equal to $100) and between $0.10 and $3.00 (for options whose 
underlying stock's previous trading day's last sale price was 
greater than $100) in premium in each of the front two expiration 
months. A Market Maker's single best and single worst quoting days 
each month based on the front two expiration months, on a per symbol 
basis, will be excluded in calculating whether a Market Maker 
qualifies for the Market Maker Plus rebate, if doing so will qualify 
a Market Maker for the rebate.
---------------------------------------------------------------------------

1. Priority Customer Complex Order Rebates
    The Exchange currently provides volume-based tiered rebates for 
Priority Customer complex orders when these orders trade with non-
Priority Customer orders in the complex order book, or trade with 
quotes and orders on the regular order book. These complex order 
rebates are provided to members based on the member's average daily 
volume (``ADV'') in Priority Customer complex orders in six volume 
tiers as follows: 0 to 29,999 contracts (Tier 1), 30,000 to 74,999 
contracts (Tier 2), 75,000 to 124,999 contracts (Tier 3), 125,000 to 
224,999 contracts (Tier 4), 225,000 to 299,999 contracts (Tier 5), and 
300,000 or more contracts (Tier 6).\8\ The Exchange now proposes to 
decrease the volume requirements necessary for achieving higher 
Priority Customer complex order rebates. The proposed ADV thresholds 
are as follows: 0 to 29,999 contracts (Tier 1), 30,000 to 59,999 
contracts (Tier 2), 60,000 to 99,999 contracts (Tier 3), 100,000 to 
149,999 contracts (Tier 4), 150,000 to 199,999 contracts (Tier 5), and 
200,000 or more contracts (Tier 6).
---------------------------------------------------------------------------

    \8\ The rebate for the highest tier volume achieved is applied 
retroactively to all Priority Customer Complex volume once the 
threshold has been reached. For purposes of determining Priority 
Customer Complex ADV, any day that the complex order book is not 
open for the entire trading day may be excluded from such 
calculation; provided that the Exchange will only remove the day for 
members that would have a lower ADV with the day included.
---------------------------------------------------------------------------

    In addition, the Exchange proposes to increase the rebates provided 
for Priority Customer complex orders. Currently, Priority Customer 
complex orders receive a rebate of $0.30 per contract in Select Symbols 
\9\ and $0.63 per contract in Non-Select Symbols \10\ for Tier 1, $0.35 
per contract in Select Symbols and $0.71 per contract in Non-Select 
Symbols for Tier 2, $0.39 per contract in Select Symbols and $0.75 per 
contract in Non-Select Symbols for Tier 3, $0.41 per contract in Select 
Symbols and $0.80 per contract in Non-Select Symbols for Tier 4, $0.43 
per contract in Select Symbols and $0.82 per contract in Non-Select 
Symbols for Tier 5, and $0.45 per contract in Select Symbols and $0.83 
per contract in Non-Select Symbols for Tier 6.\11\ The Exchange now 
proposes to increase the rebate in Select Symbols to $0.40 per contract 
for Tier 3, $0.43 per contract for Tier 4, $0.45 per contract for Tier 
5, and $0.46 per contact for Tier 6. For Non-Select Symbols the rebate 
will be increased to $0.78 per contract for Tier 3. Other rebate 
amounts will remain unchanged from their current levels.
---------------------------------------------------------------------------

    \9\ ``Select Symbols'' are options overlying all symbols listed 
on the ISE that are in the Penny Pilot Program.
    \10\ ``Non-Select Symbols'' are options overlying all symbols 
excluding Select Symbols.
    \11\ These rebates are provided per contract per leg if the 
order trades with non-Priority Customer orders in the complex order 
book, or trades with quotes and orders on the regular order book.
---------------------------------------------------------------------------

2. Fee for Complex Crossing Orders
    The Exchange charges Market Maker,\12\ Non-ISE Market Maker,\13\ 
Firm Proprietary \14\/Broker-Dealer,\15\ and Professional Customer \16\ 
orders a fee for complex Crossing Orders of $0.20 per contract. This 
fee applies to complex Crossing Orders except for PIM orders of 100 or 
fewer contracts (which are subject to a separate fee) and is charged 
for all legs for PIM orders and for the largest leg only for all other 
Crossing Orders. The Exchange now proposes to charge for all legs for 
all Crossing Orders, including QCC orders and orders entered into the 
PIM, Facilitation, Block and Solicited Order Mechanisms. Firm 
Proprietary and Non-ISE Market Maker contracts traded will remain 
subject to the Crossing Fee Cap, as provided in Section IV.H.\17\
---------------------------------------------------------------------------

    \12\ The term ``Market Makers'' refers to ``Competitive Market 
Makers'' and ``Primary Market Makers'' collectively. See Rule 
100(a)(25).
    \13\ A ``Non-ISE Market Maker'' is a market maker as defined in 
Section 3(a)(38) of the Securities Exchange Act of 1934, as amended, 
registered in the same options class on another options exchange.
    \14\ A ``Firm Proprietary'' order is an order submitted by a 
member for its own proprietary account.
    \15\ A ``Broker-Dealer'' order is an order submitted by a member 
for a broker-dealer account that is not its own proprietary account.
    \16\ A ``Professional Customer'' is a person or entity that is 
not a broker/dealer and is not a Priority Customer.
    \17\ The Exchange notes that the relevant citation to the 
Crossing Fee Cap currently refers mistakenly to Section VI, which 
was renumbered Section IV in connection with the delisting of Mini 
Options on ISE, and also uses a previous name ``Firm Fee Cap''. The 
Exchange proposes to update this section and make corresponding 
changes to other outdated references to the Crossing Fee Cap, as 
well as to Market Maker Discount Tiers, which are both now located 
in Section IV.
---------------------------------------------------------------------------

3. Complex FX Option Fees and Rebates
    ISE charges fees and provides rebates for orders in FX Option 
Symbols, including Early Adopter FX Option Symbols, executed on the 
Exchange. While the Schedule of Fees has separate fees and rebates in 
Section III applicable to simple orders in FX option classes, the 
complex order fees and rebates for Non-Select Symbols in Section II 
currently apply to complex orders in these symbols. The Exchange now 
proposes to apply the FX option fees and rebates in Section III to all 
trades executed in FX option classes, including both simple and complex 
orders. The

[[Page 15648]]

proposed fees, which already apply to simple orders in FX option 
classes, are briefly described below.
    Maker/Taker Fees and Rebates: Currently, non-Priority Customer 
complex orders in FX option classes are charged a fee for removing 
liquidity that ranges from $0.85 per contract for Market Maker orders 
to $0.87 per contract for Non-ISE Market Maker, Firm Proprietary/
Broker-Dealer and Professional Customer orders. The same rates 
similarly apply when these market participants provide liquidity to 
Priority Customer orders. Otherwise, the applicable maker fee is $0.10 
per contract for Market Maker, Firm Proprietary/Broker-Dealer, and 
Professional Customer orders and $0.20 per contract for Non-ISE Market 
Maker orders. Priority Customer complex orders are not currently 
charged a fee for adding or removing liquidity in FX option classes. 
Instead, these orders are eligible for a tiered volume based rebate of 
$0.63 per contract to $0.83 per contract when trading with non-Priority 
Customer orders in the complex order book, or trading with quotes and 
orders on the regular order book. With the proposed change, members 
will pay a fee, regardless of adding or removing liquidity, of $0.22 
per contract for Market Maker orders (subject to tier discounts),\18\ 
$0.20 for Market Maker orders sent by an Electronic Access Member 
(``EAM''), $0.45 per contract for Non-ISE Market Maker orders, $0.30 
per contract for Firm Proprietary/Broker-Dealer and Professional 
Customer orders, and $0.40 per contract for Priority Customer orders. 
Early Adopter Market Makers participate in a revenue sharing 
arrangement as described in footnote 2 to Section III, and will not be 
liable for FX option fees.
---------------------------------------------------------------------------

    \18\ The Exchange proposes to clarify in Section IV.C., which 
describes the relevant market maker discount tiers, that both simple 
and complex orders in FX options classes are now subject to these 
tiers pursuant to footnote 3 of Section III.
---------------------------------------------------------------------------

    Fee for Crossing Orders: Currently, non-Priority Customer complex 
orders in FX option classes are charged a fee for Crossing Orders of 
$0.20 per contract, or $0.03 to $0.05 per contract for PIM orders of 
100 or fewer contracts. With the proposed change, the fee for Crossing 
Orders in FX option classes will be $0.22 per contract for Market Maker 
orders (subject to tier discounts),\19\ $0.20 per contract for Market 
Maker orders sent by an EAM, Non-ISE Market Maker orders, Firm 
Proprietary/Broker-Dealer orders, and Professional Customer orders, 
and, finally, $0.40 per contract for Priority Customer orders. For PIM 
orders of 100 or fewer contracts, the proposed fee would be $0.03 to 
$0.05 per contract for non-Priority Customer orders and $0.40 per 
contract for Priority Customer orders. Again, Early Adopter Market 
Makers will not be charged a fee.
---------------------------------------------------------------------------

    \19\ See id.
---------------------------------------------------------------------------

    Response Fees and Break-Up Rebates: Currently, the fee for 
responses to complex Crossing Orders in FX option classes is $0.90 per 
contract for Market Maker orders and $0.95 per contract for all other 
market participants. Non-Market Maker orders also receive a PIM break-
up rebate of $0.80 per contract. With the proposed change, all market 
participants, except for Early Adopter Market Makers, will pay a fee 
for responses to complex Crossing Orders in FX option classes of $0.45 
per contract. In addition, non-Market Maker complex orders in these 
symbols will be eligible for a PIM break-up rebate of $0.15 per 
contract.
4. Market Maker Plus Large Size Rebate for BAC, SPY, and IWM
    In order to promote and encourage liquidity in Select Symbols, the 
Exchange currently offers Market Makers who meet the quoting 
requirements for Market Maker Plus enhanced rebates for adding 
liquidity in those symbols. In May 2014, the Exchange introduced a new 
Market Maker Plus rebate for members that meet specified quotation size 
requirements on a trade by trade basis in three actively traded Select 
Symbols: BAC, SPY, and IWM.\20\ In particular, Market Makers who 
qualify as Market Maker Plus in BAC, SPY, and IWM currently earn a 
rebate of $0.25 per contract if at the time of the trade their 
displayed quantity, in the traded series, is at least 1,000 contracts. 
The Exchange now proposes to eliminate this Market Maker Plus large 
size rebate.
---------------------------------------------------------------------------

    \20\ See Securities Exchange Act Release No. 72163 (May 14, 
2014), 79 FR 28985 (May 20, 2014) (SR-ISE-2014-27).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\21\ in general, and 
Section 6(b)(4) of the Act,\22\ in particular, in that it is designed 
to provide for the equitable allocation of reasonable dues, fees, and 
other charges among its members and other persons using its facilities.
---------------------------------------------------------------------------

    \21\ 15 U.S.C. 78f.
    \22\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

1. Priority Customer Complex Order Rebates
    The Exchange believes that it is reasonable and equitable to 
decrease the volume requirements necessary to achieve the Priority 
Customer complex order rebates, and increase the rebate amounts, as 
these proposed changes are designed to attract additional Priority 
Customer complex order volume to the Exchange. The Exchange already 
provides volume-based tiered rebates for Priority Customer complex 
orders, and believes that increasing the rebates and lowering the 
associated volume thresholds will incentivize members to send 
additional order flow to the ISE in order to achieve these rebates for 
their Priority Customer complex order volume, creating additional 
liquidity to the benefit of all members that trade complex orders on 
the Exchange.
    The Exchange further believes that it is equitable and not unfairly 
discriminatory to continue to provide a rebate only for Priority 
Customer complex orders. A Priority Customer is by definition not a 
broker or 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). This limitation does not apply to 
participants whose behavior is substantially similar to that of market 
professionals, including Professional Customers, who will generally 
submit a higher number of orders (many of which do not result in 
executions) than Priority Customers.
2. Fee for Complex Crossing Orders
    The Exchange believes that it is reasonable and equitable to charge 
for all legs for all Crossing Orders, including QCC orders and orders 
entered into the PIM, Facilitation, Block and Solicited Order 
Mechanisms. While this is a fee increase for members that execute 
complex Crossing Orders (other than PIM orders), the Exchange believes 
that this change is warranted as the current practice effectively 
discounts the fee charged for complex Crossing Orders to zero after the 
largest leg, effectively subsidizing complex Crossing Orders with 
numerous legs. The Exchange no longer believes that this subsidy is 
appropriate, and has therefore chosen to discontinue it for all complex 
Crossing Orders as it has already done for PIM orders. The Exchange 
does not believe that this proposed change is unfairly discriminatory 
as it would apply equally to all market participants that trade complex 
Crossing Orders on the Exchange.
3. Complex FX Option Fees
    The Exchange believes that it is reasonable and equitable to charge 
the same fees for complex orders in FX Option Symbols and Early Adopter 
FX Option Symbols as the Exchange

[[Page 15649]]

currently charges for simple orders in these symbols. The Exchange 
believes that the current table of FX option fees and rebates in 
Section III of the Schedule of Fees is appropriate for both simple and 
complex orders.\23\ Charging the same fees across the board in these 
proprietary products will simplify the Schedule of Fees to the benefit 
of members and investors. The Exchange does not believe that this 
proposed change is unfairly discriminatory as members are already 
assessed fees and rebates for simple orders in FX option classes based 
on Section III of the Schedule of Fees. The proposed change will merely 
ensure that these members pay the same fees for complex orders in these 
symbols as well. For the majority of market participants this means 
that fees will be lower, and in some cases significantly lower. Certain 
fees, including, for example, fees charged for Priority Customer 
orders, however, will be increased with the proposed change. While 
Priority Customer orders generally receive several benefits for trading 
on ISE, the Exchange does not believe that it is unfairly 
discriminatory to reduce some of those benefits here. In this regard, 
the Exchange notes that the proposed fee for Priority Customer complex 
FX option orders is within the range of fees currently charged by some 
of the Exchange's competitors, including NASDAQ OMX PHLX, LLC 
(``Phlx'').\24\ Similarly, the Exchange notes that PIM break-up rebates 
would be reduced with the proposed rule change. The Exchange believes 
that this is reasonable, equitable, and not unfairly discriminatory as 
the proposed break-up rebates are set at a level that the Exchange 
believes will continue to provide an appropriate incentive for members.
---------------------------------------------------------------------------

    \23\ The Exchange notes that the proposed change to Section 
IV.C. is intended solely to clarify that market maker discount tiers 
will be extended to complex orders in FX option classes consistent 
with the meaning of footnote 3 to Section III.
    \24\ See Phlx Pricing Schedule, Section III, Singly Listed 
Options.
---------------------------------------------------------------------------

4. Market Maker Plus Large Size Rebate for BAC, SPY, and IWM
    The Exchange believes that it is reasonable, equitable, and not 
unfairly discriminatory to eliminate the Market Maker Plus large size 
rebate as the Exchange does not believe that this program has satisfied 
its intended goals. When ISE introduced this program, the Exchange was 
hopeful that the higher rebate would encourage Market Makers to post 
deeper size in these actively traded symbols. After running this 
program for several months, the Exchange does not believe that the 
large size rebate has been an effective incentive for Market Makers. 
The Exchange therefore believes that it is appropriate to discontinue 
the large size rebate at this time.

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

    In accordance with Section 6(b)(8) of the Act,\25\ the Exchange 
does not believe that the proposed rule change will impose any burden 
on intermarket or intramarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. The transaction 
fee changes amend various fees and rebates and are designed to attract 
additional order flow to the Exchange. The Exchange believes that the 
proposed fees and rebates are competitive with fees and rebates offered 
to orders executed on other options exchanges. The Exchange 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 changes 
reflect this competitive environment.
---------------------------------------------------------------------------

    \25\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    The Exchange has not solicited, and does not intend to solicit, 
comments on this proposed rule change. The Exchange has not received 
any 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 \26\ and subparagraph (f)(2) of Rule 19b-4 
thereunder,\27\ because it establishes a due, fee, or other charge 
imposed by ISE.
---------------------------------------------------------------------------

    \26\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \27\ 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-2015-09 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-ISE-2015-09. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of such filing also will be available for 
inspection and copying at the principal office of the ISE. All comments 
received will be posted without change; the Commission does not edit 
personal identifying information from submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File Number SR-ISE-2015-09 and should be 
submitted by April 14, 2015.


[[Page 15650]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\28\
---------------------------------------------------------------------------

    \28\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2015-06621 Filed 3-23-15; 8:45 am]
BILLING CODE 8011-01-P
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.