Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Schedule of Fees, 34186-34188 [2015-14480]
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34186
Federal Register / Vol. 80, No. 114 / Monday, June 15, 2015 / Notices
asabaliauskas on DSK5VPTVN1PROD with NOTICES
increased.16 Moreover, the proposed
fees are competitive with fees charged
by other options exchanges and remain
attractive to members for this reason.
The Exchange notes that Priority
Customer orders will continue to
receive complex order rebates, while
other market participants will continue
to pay a fee. The Exchange does not
believe that this is unfairly
discriminatory as 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.
With respect to Market Maker orders,
the Exchange believes that it is
reasonable and equitable to charge
lower fees to Market Makers with
significant affiliated Priority Customer
complex order volume, as this will
incentivize members to bring additional
order flow to ISE, creating additional
liquidity to the benefit of all members
that trade complex orders on the
Exchange. The Exchange notes that the
proposed tiered structure will allow
Market Makers to continue to pay the
same fees that they pay today by
executing, through their affiliates,
sufficient Priority Customer complex
order volume to qualify for the lower
fee. The Exchange does not believe that
it is unfairly discriminatory only to
provide these lower fees to Market
Maker orders as Market Makers are
subject to additional requirements and
obligations (such as quoting
requirements) that other market
participants are not.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
In accordance with Section 6(b)(8) of
the Act,17 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
Exchange believes that the proposed
complex order fees remain competitive
with fees charged by other options
exchanges. The Exchange operates in a
highly competitive market in which
market participants can readily direct
16 See Securities Exchange Act Release No. 74525
(March 18, 2015), 80 FR 15646 (March 24, 2015)
(SR–ISE–2015–09).
17 15 U.S.C. 78f(b)(8).
VerDate Sep<11>2014
16:39 Jun 12, 2015
Jkt 235001
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.
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 18 and
subparagraph (f)(2) of Rule 19b–4
thereunder,19 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 rule-comments@
sec.gov. Please include File Number SR–
ISE–2015–19 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549.
All submissions should refer to File
Number SR–ISE–2015–19. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the 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–
2015–19 and should be submitted on or
before July 6, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.20
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015–14479 Filed 6–12–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–75131; File No. SR–ISE–
2015–20]
Self-Regulatory Organizations;
International Securities Exchange,
LLC; Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change To Amend the Schedule of
Fees
June 9, 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 June 1,
20 17
18 15
U.S.C. 78s(b)(3)(A)(ii).
19 17 CFR 240.19b–4(f)(2).
PO 00000
Frm 00059
Fmt 4703
Sfmt 4703
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
E:\FR\FM\15JNN1.SGM
15JNN1
Federal Register / Vol. 80, No. 114 / Monday, June 15, 2015 / Notices
2015, 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.
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 to increase the maker
fee charged to Market Maker and NonISE Market Maker orders in Select
Symbols when trading against Priority
Customer complex orders that leg in
from the complex order book. 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
asabaliauskas on DSK5VPTVN1PROD with NOTICES
1. Purpose
The purpose of the proposed rule
change is to increase the maker fee
charged to Market Maker 3 and Non-ISE
Market Maker 4 orders in Select
Symbols 5 when trading against Priority
Customer 6 complex orders that leg in
3 The term ‘‘Market Makers’’ refers to
‘‘Competitive Market Makers’’ and ‘‘Primary Market
Makers’’ collectively. See Rule 100(a)(25).
4 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.
5 ‘‘Select Symbols’’ are options overlying all
symbols listed on the ISE that are in the Penny Pilot
Program.
6 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
VerDate Sep<11>2014
16:39 Jun 12, 2015
Jkt 235001
from the complex order book. Market
Maker orders (other than Market Maker
Plus orders) 7 and Non-ISE Market
Maker orders currently pay a maker fee
of $0.10 per contract for regular orders
in Select Symbols. This $0.10 per
contract fee similarly applies to all
Market Maker orders (including Market
Maker Plus orders) and Non-ISE Market
Maker orders when trading against
Priority Customer complex orders that
leg in from the complex order book
pursuant to Rule 715(k). At the same
time, the Exchange charges a taker fee
to Priority Customer orders entered in
the regular order book but provides a
rebate to Priority Customer orders
entered in the complex order book. The
complex order rebates paid to Priority
Customer orders, which apply
regardless of whether those orders are
executed on the complex order book or
leg in to the regular order book, range
from $0.30 per contract for the lowest
tier to $0.46 per contract for the highest.
To better align the fees charged for
executing trades with the rebates paid
out by ISE, the Exchange proposes to
increase the maker fee for Market Maker
(including Market Maker Plus) and NonISE Market Maker orders to $0.30 per
contract when trading against Priority
Customer orders that leg in from the
complex order book.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
the provisions of Section 6 of the Act,8
in general, and Section 6(b)(4) of the
Act,9 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 the
proposed fee change is reasonable and
equitable as it aligns the fees associated
with trading against legged-in Priority
beneficial account(s), as defined in ISE Rule
100(a)(37A).
7 A Market Maker Plus is a Market Maker who is
on the National Best Bid or National Best Offer a
specified percentage 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. The specified percentage is
at least 80% but lower than 85% of the time for Tier
1, at least 85% but lower than 95% of the time for
Tier 2, and at least 95% of the time for Tier 3. 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
this rebate, if doing so will qualify a Market Maker
for the rebate.
8 15 U.S.C. 78f.
9 15 U.S.C. 78f(b)(4).
PO 00000
Frm 00060
Fmt 4703
Sfmt 4703
34187
Customer orders with the rebates paid
out by ISE. As explained above, the
Exchange offers significant rebates to
Priority Customer complex orders. This,
combined with the low maker fees
charged to regular orders, results a
negative rate per contract when Priority
Customer complex orders leg in to the
regular order book. To reduce these
negative economics, the Exchange
believes that it is appropriate to increase
the fees charged to Market Maker and
Non-ISE Market Maker orders that trade
against Priority Customer complex
orders that leg in from the complex
order book. In this regard, the Exchange
notes that the proposed maker fees are
equivalent to the rebate provided to
Priority Customer complex orders that
qualify for the lowest tier of rebate, and
will therefore help offset those rebates.
The proposed fees are also within the
range of fees charged by other options
exchanges, including, for example, BOX
Options Exchange LLC (‘‘BOX’’), which
charges a fee of $0.51 per contract for
Market Maker orders in penny pilot
classes when trading against a Public
Customer. The Exchange notes that it is
only proposing to increase the
applicable maker fees for Market Maker
and Non-ISE Market Maker orders, and
not for Firm Proprietary 10/BrokerDealer 11 or Professional Customer 12
orders. The Exchange believes that this
is not unfairly discriminatory as Market
Makers and Non-ISE Market Makers are
responsible for the majority of trading
volume that executes against Priority
Customer orders that leg in from the
complex order book and are
sophisticated enough to account for the
higher fees that would be charged when
trading against such orders.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
In accordance with Section 6(b)(8) of
the Act,13 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 fees are designed to reduce the
negative economics associated with
orders that leg in from the complex
order book, and are not intended to have
any competitive impact. While the
10 A ‘‘Firm Proprietary’’ order is an order
submitted by a member for its own proprietary
account.
11 A ‘‘Broker-Dealer’’ order is an order submitted
by a member for a broker-dealer account that is not
its own proprietary account.
12 A ‘‘Professional Customer’’ is a person or entity
that is not a broker/dealer and is not a Priority
Customer.
13 15 U.S.C. 78f(b)(8).
E:\FR\FM\15JNN1.SGM
15JNN1
34188
Federal Register / Vol. 80, No. 114 / Monday, June 15, 2015 / Notices
proposed fee increase only applies to
Market Maker and Non-ISE Market
Maker orders, the Exchange does not
believe that this will have any
significant competitive impact as the
proposed fees remain modest and are
well within the range of fees charged by
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.
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 14 and
subparagraph (f)(2) of Rule 19b–4
thereunder,15 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.
asabaliauskas on DSK5VPTVN1PROD with NOTICES
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:
14 15
15 17
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
VerDate Sep<11>2014
16:39 Jun 12, 2015
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–2015–20 on the subject line.
Paper Comments
Jkt 235001
All submissions should refer to File
Number SR–ISE–2015–20. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the 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–
2015–20 and should be submitted on or
before July 6, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015–14480 Filed 6–12–15; 8:45 am]
BILLING CODE 8011–01–P
PO 00000
CFR 200.30–3(a)(12).
Frm 00061
Fmt 4703
[Investment Company Act Release No.
31664; 812–14428]
Nuveen Fund Advisors, LLC, et al.;
Notice of Application
June 8, 2015.
Securities and Exchange
Commission (the ‘‘Commission’’).
ACTION: Notice of an application for an
order under section 6(c) of the
Investment Company Act of 1940 (the
‘‘Act’’) for an exemption from sections
2(a)(32), 5(a)(1), 22(d) and 22(e) of the
Act and rule 22c–1 under the Act, and
under sections 6(c) and 17(b) of the Act
for an exemption from sections 17(a)(1)
and (2) of the Act, and under section
12(d)(1)(J) for an exemption from
sections 12(d)(1)(A) and (B) of the Act.
AGENCY:
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549.
16 17
SECURITIES AND EXCHANGE
COMMISSION
Sfmt 4703
Nuveen ETF Trust (the
‘‘Trust’’), Nuveen Fund Advisors, LLC
(‘‘Nuveen’’), and Nuveen Securities,
LLC (‘‘Nuveen Securities’’).
SUMMARY OF APPLICATION: Applicants
request an order that permits: (a)
Actively-managed series of the Trust to
issue shares (‘‘Shares’’) redeemable in
large aggregations only (‘‘Creation
Units’’); (b) secondary market
transactions in Shares to occur at
negotiated market prices; (c) certain
series to pay redemption proceeds,
under certain circumstances, more than
seven days after the tender of Creation
Units for redemption; (d) certain
affiliated persons of the series to deposit
securities into, and receive securities
from, the series in connection with the
purchase and redemption of Creation
Units; and (e) certain registered
management investment companies and
unit investment trusts outside of the
same group of investment companies as
the series to acquire Shares.
DATES: Filing Dates: The application was
filed on February 27, 2015 and amended
on June 3, 2015.
HEARING OR NOTIFICATION OF HEARING:
An order granting the application will
be issued unless the Commission orders
a hearing. Interested persons may
request a hearing by writing to the
Commission’s Secretary and serving
applicants with a copy of the request,
personally or by mail. Hearing requests
should be received by the Commission
by 5:30 p.m. on July 2, 2015, and should
be accompanied by proof of service on
applicants, in the form of an affidavit or,
for lawyers, a certificate of service.
Pursuant to rule 0–5 under the Act,
hearing requests should state the nature
of the writer’s interest, any facts bearing
upon the desirability of a hearing on the
APPLICANTS:
E:\FR\FM\15JNN1.SGM
15JNN1
]]>Agencies
[Federal Register Volume 80, Number 114 (Monday, June 15, 2015)]
[Notices]
[Pages 34186-34188]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-14480]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-75131; File No. SR-ISE-2015-20]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change To Amend the Schedule of Fees
June 9, 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 June 1,
[[Page 34187]]
2015, 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.
---------------------------------------------------------------------------
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 to increase the
maker fee charged to Market Maker and Non-ISE Market Maker orders in
Select Symbols when trading against Priority Customer complex orders
that leg in from the complex order book. 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 the proposed rule change is to increase the maker
fee charged to Market Maker \3\ and Non-ISE Market Maker \4\ orders in
Select Symbols \5\ when trading against Priority Customer \6\ complex
orders that leg in from the complex order book. Market Maker orders
(other than Market Maker Plus orders) \7\ and Non-ISE Market Maker
orders currently pay a maker fee of $0.10 per contract for regular
orders in Select Symbols. This $0.10 per contract fee similarly applies
to all Market Maker orders (including Market Maker Plus orders) and
Non-ISE Market Maker orders when trading against Priority Customer
complex orders that leg in from the complex order book pursuant to Rule
715(k). At the same time, the Exchange charges a taker fee to Priority
Customer orders entered in the regular order book but provides a rebate
to Priority Customer orders entered in the complex order book. The
complex order rebates paid to Priority Customer orders, which apply
regardless of whether those orders are executed on the complex order
book or leg in to the regular order book, range from $0.30 per contract
for the lowest tier to $0.46 per contract for the highest. To better
align the fees charged for executing trades with the rebates paid out
by ISE, the Exchange proposes to increase the maker fee for Market
Maker (including Market Maker Plus) and Non-ISE Market Maker orders to
$0.30 per contract when trading against Priority Customer orders that
leg in from the complex order book.
---------------------------------------------------------------------------
\3\ The term ``Market Makers'' refers to ``Competitive Market
Makers'' and ``Primary Market Makers'' collectively. See Rule
100(a)(25).
\4\ 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.
\5\ ``Select Symbols'' are options overlying all symbols listed
on the ISE that are in the Penny Pilot Program.
\6\ 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 ISE Rule 100(a)(37A).
\7\ A Market Maker Plus is a Market Maker who is on the National
Best Bid or National Best Offer a specified percentage 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. The specified percentage is at least 80% but lower than 85%
of the time for Tier 1, at least 85% but lower than 95% of the time
for Tier 2, and at least 95% of the time for Tier 3. 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 this
rebate, if doing so will qualify a Market Maker for the rebate.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\8\ in general, and Section
6(b)(4) of the Act,\9\ 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.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78f.
\9\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
The Exchange believes that the proposed fee change is reasonable
and equitable as it aligns the fees associated with trading against
legged-in Priority Customer orders with the rebates paid out by ISE. As
explained above, the Exchange offers significant rebates to Priority
Customer complex orders. This, combined with the low maker fees charged
to regular orders, results a negative rate per contract when Priority
Customer complex orders leg in to the regular order book. To reduce
these negative economics, the Exchange believes that it is appropriate
to increase the fees charged to Market Maker and Non-ISE Market Maker
orders that trade against Priority Customer complex orders that leg in
from the complex order book. In this regard, the Exchange notes that
the proposed maker fees are equivalent to the rebate provided to
Priority Customer complex orders that qualify for the lowest tier of
rebate, and will therefore help offset those rebates. The proposed fees
are also within the range of fees charged by other options exchanges,
including, for example, BOX Options Exchange LLC (``BOX''), which
charges a fee of $0.51 per contract for Market Maker orders in penny
pilot classes when trading against a Public Customer. The Exchange
notes that it is only proposing to increase the applicable maker fees
for Market Maker and Non-ISE Market Maker orders, and not for Firm
Proprietary \10\/Broker-Dealer \11\ or Professional Customer \12\
orders. The Exchange believes that this is not unfairly discriminatory
as Market Makers and Non-ISE Market Makers are responsible for the
majority of trading volume that executes against Priority Customer
orders that leg in from the complex order book and are sophisticated
enough to account for the higher fees that would be charged when
trading against such orders.
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\10\ A ``Firm Proprietary'' order is an order submitted by a
member for its own proprietary account.
\11\ A ``Broker-Dealer'' order is an order submitted by a member
for a broker-dealer account that is not its own proprietary account.
\12\ A ``Professional Customer'' is a person or entity that is
not a broker/dealer and is not a Priority Customer.
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B. Self-Regulatory Organization's Statement on Burden on Competition
In accordance with Section 6(b)(8) of the Act,\13\ 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
fees are designed to reduce the negative economics associated with
orders that leg in from the complex order book, and are not intended to
have any competitive impact. While the
[[Page 34188]]
proposed fee increase only applies to Market Maker and Non-ISE Market
Maker orders, the Exchange does not believe that this will have any
significant competitive impact as the proposed fees remain modest and
are well within the range of fees charged by 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.
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\13\ 15 U.S.C. 78f(b)(8).
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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 \14\ and subparagraph (f)(2) of Rule 19b-4
thereunder,\15\ because it establishes a due, fee, or other charge
imposed by ISE.
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\14\ 15 U.S.C. 78s(b)(3)(A)(ii).
\15\ 17 CFR 240.19b-4(f)(2).
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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-2015-20 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549.
All submissions should refer to File Number SR-ISE-2015-20. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the 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-2015-20 and should be
submitted on or before July 6, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-14480 Filed 6-12-15; 8:45 am]
BILLING CODE 8011-01-P
