Self-Regulatory Organizations; International Securities Exchange; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Limit Mandatory Participation in Scheduled Functional and Performance Testing Under Regulation SCI to Only Those Primary Market Makers That Meet Specified Criteria, 13869-13871 [2016-05756]
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Federal Register / Vol. 81, No. 50 / Tuesday, March 15, 2016 / Notices
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act.
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–
EDGX–2016–16 on the subject line.
Paper Comments
asabaliauskas on DSK3SPTVN1PROD with NOTICES
• 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–EDGX–2016–16. 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 such
filing will also be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–EDGX–
2016–16 and should be submitted on or
before April 5, 2016.
20 17
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
17:40 Mar 14, 2016
Jkt 238001
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.20
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–05750 Filed 3–14–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–77335; File No. SR–ISE–
2016–06]
Self-Regulatory Organizations;
International Securities Exchange;
Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change To Limit Mandatory
Participation in Scheduled Functional
and Performance Testing Under
Regulation SCI to Only Those Primary
Market Makers That Meet Specified
Criteria
March 9, 2016.
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 February
26, 2016, 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 Exchange proposes to amend
Rule 803, Obligations of Market Makers,
to limit mandatory participation in
scheduled functional and performance
testing, under Regulation Systems
Compliance and Integrity (‘‘Regulation
SCI’’),3 to those Primary Market Makers
(‘‘PMMs’’) that contribute a meaningful
percentage of the Exchange’s overall
volume, measured on a quarterly or
monthly basis. The Exchange proposes
to also consider other factors in
determining the PMMs that will be
required to participate in scheduled
functional and performance testing of
the Exchange’s business continuity and
disaster recovery plans (collectively
‘‘DR Plans’’), including average daily
volume traded on the Exchange
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 73639
(November 19, 2014), 79 FR 72252 (December 5,
2014) (‘‘SCI Adopting Release’’).
2 17
PO 00000
Frm 00099
Fmt 4703
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13869
measured on a quarterly or monthly
basis, or PMMs that collectively account
for a certain percentage of market share
on the Exchange or within a specific
product. In addition, the Exchange
proposes to publish the criteria to be
used by the Exchange to determine
which PMMs will be required to
participate in such testing, and notify
those PMMs that are required to
participate based on such criteria. The
text of the proposed rule change is
available on the Exchange’s Web site at
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 Exchange 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
On November 19, 2014, the Securities
and Exchange Commission
unanimously voted to adopt Regulation
SCI, which is a set of rules designed to
strengthen the technology infrastructure
of the U.S. securities markets.4
Specifically, the rules are designed to
reduce the occurrence of systems issues,
improve resiliency when systems
problems do occur, and enhance the
Commission’s oversight and
enforcement of securities market
technology infrastructure.5
Regulation SCI applies to ‘‘SCI
entities,’’ a term which includes SROs
such as ISE. Regulation SCI requires SCI
entities to, among other things, (1)
establish written policies and
procedures reasonably designed to
ensure that their systems have levels of
capacity, integrity, resiliency,
availability, and security adequate to
maintain their operational capability; (2)
mandate participation by designated
4 Id.
5 Division of Trading and Markets, Responses to
Frequently Asked Questions Concerning Regulation
SCI at https://www.sec.gov/divisions/marketreg/
regulation-sci-faq.shtml.
E:\FR\FM\15MRN1.SGM
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Federal Register / Vol. 81, No. 50 / Tuesday, March 15, 2016 / Notices
members in scheduled testing of the
operation of their business continuity
and disaster recovery plans, including
backup systems, and to coordinate such
testing on an industry- or sector-wide
basis with other SCI entities; (3) take
corrective action with respect to ‘‘SCI
events’’ (such as systems disruptions,
systems compliance issues, and systems
intrusions), and to notify the
Commission of such events; (4)
disseminate information about certain
SCI events to affected members and, for
certain ‘‘major’’ SCI events, to all
members; and (5) review their systems
by objective, qualified personnel at least
annually, to submit quarterly reports
regarding completed, ongoing, and
planned material changes to their SCI
systems to the Commission, and to
maintain certain books and records.6
In accordance with Rule 1004 of
Regulation SCI, the Exchange amended
Rules 803 and 1903 in 2015 to designate
all PMMs 7 and Linkage Handlers,8 as
the minimum necessary for the
maintenance of a fair and orderly
market should the Exchange’s DR Plans
be activated.9 The Exchange also
mandated participation by designated
members in scheduled functional and
performance testing of the operation of
such DR Plans.10
The Exchange has reevaluated its
designation of all PMMs as the
minimum necessary for the
maintenance of a fair and orderly
market should the Exchange’s DR Plans
be activated and now believes that
designating all PMMs is more than the
minimum necessary to maintain a fair
and orderly market should its DR Plans
be activated. The Exchange proposes to
revise Rule 803 and limit mandatory
participation in scheduled functional
and performance testing, under
Regulation SCI and ISE Rule 803, to
those PMMs that contribute a
meaningful percentage of the
Exchange’s overall volume, measured
asabaliauskas on DSK3SPTVN1PROD with NOTICES
6 Id.
7 A PMM posts two-sided continuous quotations
in all of the options classes to which it is appointed
and undertakes special responsibilities for
maintaining fair and orderly markets. PMM
memberships are represented by PMM Trading
Rights. The options classes trading on the ISE are
divided into groups or ‘‘bins’’, each with one PMM.
One PMM member may, however, represent more
than one bin.
8 A Linkage Handler is a broker that is unaffiliated
with the Exchange with which the Exchange has
contracted with to provide routing services, by
routing certain orders, to other exchanges as agent
in connection with the Options Order Protection
and Locked/Crossed Market Plan. See .03 to
Supplementary Material to Rule 1901.
9 Securities Exchange Act Release No. 76334
(November 3, 2015), 80 FR 69256 (November 9,
2015), SR–ISE–2015–35 and .02 of Supplementary
Material to ISE Rule 803.
10 Id.
VerDate Sep<11>2014
18:46 Mar 14, 2016
Jkt 238001
on a quarterly or monthly basis. The
Exchange proposes to consider other
factors in determining which PMMs will
be required to participate in scheduled
functional and performance testing,
including average daily volume traded
on the Exchange measured on a
quarterly or monthly basis, or PMMs
that collectively account for a certain
percentage of market share on the
Exchange or within a specific product.
The Exchange represents that it will
publish the criteria 11 to be used by the
Exchange to determine which PMMs
will be required to participate in such
testing, and notify those PMMs that are
required to participate based on such
criteria.
The Exchange notes that it encourages
all PMMs to connect to the Exchange’s
backup systems and to participate in
testing of such systems. However, in
revising the requirements in proposed
Rule 803, the rule will subject only
those PMMs to mandatory testing that
the Exchange believes are, taken as a
whole, the minimum necessary to
maintain fair and orderly markets. The
Exchange believes that designating
PMMs to participate in mandatory
testing because they, for example,
account for a significant portion of the
Exchange’s overall volume or
collectively account for a certain
percentage of market share on the
Exchange is a reasonable means to
ensure the maintenance of a fair and
orderly market on the Exchange should
its DR Plans be activated.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
the requirements of the Act, and the
rules and regulations thereunder that
are applicable to a national securities
exchange, and, in particular, with the
requirements of section 6(b) of the
Act.12 In particular, the proposal is
consistent with section 6(b)(5) of the
Act,13 because it is designed to promote
just and equitable principles of trade,
remove impediments to and perfect the
mechanisms of a free and open market
and a national market system and, in
general, to protect investors and the
public interest.
The Exchange believes the proposed
rule revision is consistent with the
Exchange Act because it complies with
Regulation SCI’s requirements. ISE’s
proposed rule designates only those
PMMs it determines are necessary for
11 This criteria will be published by the Exchange,
in a regulatory information circular, no later than
the effective date of this rule filing.
12 15 U.S.C. 78f(b).
13 15 U.S.C. 78f(b)(5).
PO 00000
Frm 00100
Fmt 4703
Sfmt 4703
the maintenance of a fair and orderly
market if the Exchange’s DR Plans are
activated. Additionally, the proposal
will ensure that the PMMs necessary to
ensure the maintenance of a fair and
orderly market are properly designated
consistent with Rule 1004 of Regulation
SCI. Specifically, as proposed, the
Exchange will adopt clear and objective
criteria with respect to the designation
of PMMs that are required to participate
in the testing of the Exchange’s DR
Plans, as well as appropriate
notification regarding such designation.
As set forth in the SCI Adopting
Release, ‘‘SROs have the authority, and
legal responsibility, under section 6 of
the Exchange Act, to adopt and enforce
rules (including rules to comply with
Regulation SCI’s requirements relating
to [business continuity and disaster
recovery] testing) applicable to their
members or participants that are
designed to, among other things, foster
cooperation and coordination with
persons engaged in regulating, clearing,
settling, processing information with
respect to, and facilitating transactions
in securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest.’’ 14
The Exchange believes that this
proposal is consistent with such
authority and legal responsibility.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
This proposed rule change does not
impose any burden on competition that
is not necessary or appropriate in
furtherance of the purposes of the
Exchange Act because ISE is
implementing the requirements of
Regulation SCI.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
The Exchange has neither solicited
nor received written comments on this
proposed rule change. The Exchange
has not received any written comments
from members or other interested
parties.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not significantly affect the
protection of investors or the public
interest, does not impose any significant
burden on competition, and, by its
14 See SCI Adopting Release, supra note 4 at
72350.
E:\FR\FM\15MRN1.SGM
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Federal Register / Vol. 81, No. 50 / Tuesday, March 15, 2016 / Notices
terms, does not become operative for 30
days from the date on which it was
filed, or such shorter time as the
Commission may designate, it has
become effective pursuant to section
19(b)(3)(A) of the Act15 and Rule 19b–
4(f)(6) thereunder.16 The Exchange
provided the Commission with written
notice of its intent to file the proposed
rule change, along with a brief
description and text of the proposed
rule change, at least five business days
prior to the date of filing the proposed
rule change, or such shorter time as
designated by the Commission, as
required by Rule 19b–4(f)(6).
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:
asabaliauskas on DSK3SPTVN1PROD with NOTICES
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 No. SR–ISE–
2016–06 on the subject line.
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–ISE–2016–06. 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 Commissions
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
15 15
16 17
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
VerDate Sep<11>2014
17:40 Mar 14, 2016
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 such
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–ISE–
2016–06 and should be submitted by
April 5, 2016.
409 3rd Street SW., Suite 6050,
Washington, DC 20416.
SUPPLEMENTARY INFORMATION: Notice is
hereby given that as a result of the
President’s major disaster declaration on
03/04/2016, Private Non-Profit
organizations that provide essential
services of governmental nature may file
disaster loan applications at the address
listed above or other locally announced
locations.
The following areas have been
determined to be adversely affected by
the disaster:
Primary Counties: Allegany, Anne
Arundel, Baltimore, Baltimore City,
Calvert, Caroline, Carroll, Cecil,
Charles, Frederick, Garrett, Harford,
Howard, Kent, Montgomery, Prince
Georges, Queen Annes,
Washington, Worcester.
The Interest Rates are:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Robert W. Errett,
Deputy Secretary.
For Physical Damage:
Non-Profit Organizations With
Credit Available Elsewhere ...
Non-Profit Organizations Without Credit Available Elsewhere .....................................
For Economic Injury:
Non-Profit Organizations Without Credit Available Elsewhere .....................................
[FR Doc. 2016–05756 Filed 3–14–16; 8:45 am]
BILLING CODE 8011–01–P
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration #14661 and #14662]
Maryland Disaster #MD–00032
U.S. Small Business
Administration.
ACTION: Notice.
AGENCY:
This is a Notice of the
Presidential declaration of a major
disaster for Public Assistance Only for
the State of Maryland (FEMA–4261–
DR), dated 03/04/2016.
Incident: Severe Winter Storm and
Snowstorm.
Incident Period: 01/22/2016 through
01/23/2016.
Effective Date: 03/04/2016.
Physical Loan Application Deadline
Date: 05/03/2016.
Economic Injury (EIDL) Loan
Application Deadline Date: 12/05/2016.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
SUMMARY:
17 17
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13871
PO 00000
CFR 200.30–3(a)(12).
Frm 00101
Fmt 4703
Sfmt 4703
Percent
2.625
2.625
2.625
The number assigned to this disaster
for physical damage is 14661B and for
economic injury is 14662B.
(Catalog of Federal Domestic Assistance
Numbers 59008)
James E. Rivera,
Associate Administrator for Disaster
Assistance.
[FR Doc. 2016–05719 Filed 3–14–16; 8:45 am]
BILLING CODE 8025–01–P
DEPARTMENT OF STATE
[Public Notice: 9480]
Notice of Reopening of Public
Comment Period: Re-Consideration
Concerning the Scope of
Authorizations in a Presidential Permit
Issued to Plains LPG Services, L.P., in
May 2014 for Existing Pipeline
Facilities on the Border of the United
States and Canada Under the St. Clair
River
Department of State.
Notice.
AGENCY:
ACTION:
On January 25, 2016, the
Department of State (Department)
published a Notice of Re-Consideration
Concerning the Scope of Authorizations
SUMMARY:
E:\FR\FM\15MRN1.SGM
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]]>Agencies
[Federal Register Volume 81, Number 50 (Tuesday, March 15, 2016)]
[Notices]
[Pages 13869-13871]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-05756]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-77335; File No. SR-ISE-2016-06]
Self-Regulatory Organizations; International Securities Exchange;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Limit Mandatory Participation in Scheduled Functional and Performance
Testing Under Regulation SCI to Only Those Primary Market Makers That
Meet Specified Criteria
March 9, 2016.
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 February 26, 2016, 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 Exchange proposes to amend Rule 803, Obligations of Market
Makers, to limit mandatory participation in scheduled functional and
performance testing, under Regulation Systems Compliance and Integrity
(``Regulation SCI''),\3\ to those Primary Market Makers (``PMMs'') that
contribute a meaningful percentage of the Exchange's overall volume,
measured on a quarterly or monthly basis. The Exchange proposes to also
consider other factors in determining the PMMs that will be required to
participate in scheduled functional and performance testing of the
Exchange's business continuity and disaster recovery plans
(collectively ``DR Plans''), including average daily volume traded on
the Exchange measured on a quarterly or monthly basis, or PMMs that
collectively account for a certain percentage of market share on the
Exchange or within a specific product. In addition, the Exchange
proposes to publish the criteria to be used by the Exchange to
determine which PMMs will be required to participate in such testing,
and notify those PMMs that are required to participate based on such
criteria. The text of the proposed rule change is available on the
Exchange's Web site at www.ise.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 73639 (November 19,
2014), 79 FR 72252 (December 5, 2014) (``SCI Adopting Release'').
---------------------------------------------------------------------------
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 Exchange 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
On November 19, 2014, the Securities and Exchange Commission
unanimously voted to adopt Regulation SCI, which is a set of rules
designed to strengthen the technology infrastructure of the U.S.
securities markets.\4\ Specifically, the rules are designed to reduce
the occurrence of systems issues, improve resiliency when systems
problems do occur, and enhance the Commission's oversight and
enforcement of securities market technology infrastructure.\5\
---------------------------------------------------------------------------
\4\ Id.
\5\ Division of Trading and Markets, Responses to Frequently
Asked Questions Concerning Regulation SCI at https://www.sec.gov/divisions/marketreg/regulation-sci-faq.shtml.
---------------------------------------------------------------------------
Regulation SCI applies to ``SCI entities,'' a term which includes
SROs such as ISE. Regulation SCI requires SCI entities to, among other
things, (1) establish written policies and procedures reasonably
designed to ensure that their systems have levels of capacity,
integrity, resiliency, availability, and security adequate to maintain
their operational capability; (2) mandate participation by designated
[[Page 13870]]
members in scheduled testing of the operation of their business
continuity and disaster recovery plans, including backup systems, and
to coordinate such testing on an industry- or sector-wide basis with
other SCI entities; (3) take corrective action with respect to ``SCI
events'' (such as systems disruptions, systems compliance issues, and
systems intrusions), and to notify the Commission of such events; (4)
disseminate information about certain SCI events to affected members
and, for certain ``major'' SCI events, to all members; and (5) review
their systems by objective, qualified personnel at least annually, to
submit quarterly reports regarding completed, ongoing, and planned
material changes to their SCI systems to the Commission, and to
maintain certain books and records.\6\
---------------------------------------------------------------------------
\6\ Id.
---------------------------------------------------------------------------
In accordance with Rule 1004 of Regulation SCI, the Exchange
amended Rules 803 and 1903 in 2015 to designate all PMMs \7\ and
Linkage Handlers,\8\ as the minimum necessary for the maintenance of a
fair and orderly market should the Exchange's DR Plans be activated.\9\
The Exchange also mandated participation by designated members in
scheduled functional and performance testing of the operation of such
DR Plans.\10\
---------------------------------------------------------------------------
\7\ A PMM posts two-sided continuous quotations in all of the
options classes to which it is appointed and undertakes special
responsibilities for maintaining fair and orderly markets. PMM
memberships are represented by PMM Trading Rights. The options
classes trading on the ISE are divided into groups or ``bins'', each
with one PMM. One PMM member may, however, represent more than one
bin.
\8\ A Linkage Handler is a broker that is unaffiliated with the
Exchange with which the Exchange has contracted with to provide
routing services, by routing certain orders, to other exchanges as
agent in connection with the Options Order Protection and Locked/
Crossed Market Plan. See .03 to Supplementary Material to Rule 1901.
\9\ Securities Exchange Act Release No. 76334 (November 3,
2015), 80 FR 69256 (November 9, 2015), SR-ISE-2015-35 and .02 of
Supplementary Material to ISE Rule 803.
\10\ Id.
---------------------------------------------------------------------------
The Exchange has reevaluated its designation of all PMMs as the
minimum necessary for the maintenance of a fair and orderly market
should the Exchange's DR Plans be activated and now believes that
designating all PMMs is more than the minimum necessary to maintain a
fair and orderly market should its DR Plans be activated. The Exchange
proposes to revise Rule 803 and limit mandatory participation in
scheduled functional and performance testing, under Regulation SCI and
ISE Rule 803, to those PMMs that contribute a meaningful percentage of
the Exchange's overall volume, measured on a quarterly or monthly
basis. The Exchange proposes to consider other factors in determining
which PMMs will be required to participate in scheduled functional and
performance testing, including average daily volume traded on the
Exchange measured on a quarterly or monthly basis, or PMMs that
collectively account for a certain percentage of market share on the
Exchange or within a specific product. The Exchange represents that it
will publish the criteria \11\ to be used by the Exchange to determine
which PMMs will be required to participate in such testing, and notify
those PMMs that are required to participate based on such criteria.
---------------------------------------------------------------------------
\11\ This criteria will be published by the Exchange, in a
regulatory information circular, no later than the effective date of
this rule filing.
---------------------------------------------------------------------------
The Exchange notes that it encourages all PMMs to connect to the
Exchange's backup systems and to participate in testing of such
systems. However, in revising the requirements in proposed Rule 803,
the rule will subject only those PMMs to mandatory testing that the
Exchange believes are, taken as a whole, the minimum necessary to
maintain fair and orderly markets. The Exchange believes that
designating PMMs to participate in mandatory testing because they, for
example, account for a significant portion of the Exchange's overall
volume or collectively account for a certain percentage of market share
on the Exchange is a reasonable means to ensure the maintenance of a
fair and orderly market on the Exchange should its DR Plans be
activated.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the requirements of the Act, and the rules and regulations
thereunder that are applicable to a national securities exchange, and,
in particular, with the requirements of section 6(b) of the Act.\12\ In
particular, the proposal is consistent with section 6(b)(5) of the
Act,\13\ because it is designed to promote just and equitable
principles of trade, remove impediments to and perfect the mechanisms
of a free and open market and a national market system and, in general,
to protect investors and the public interest.
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\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(5).
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The Exchange believes the proposed rule revision is consistent with
the Exchange Act because it complies with Regulation SCI's
requirements. ISE's proposed rule designates only those PMMs it
determines are necessary for the maintenance of a fair and orderly
market if the Exchange's DR Plans are activated. Additionally, the
proposal will ensure that the PMMs necessary to ensure the maintenance
of a fair and orderly market are properly designated consistent with
Rule 1004 of Regulation SCI. Specifically, as proposed, the Exchange
will adopt clear and objective criteria with respect to the designation
of PMMs that are required to participate in the testing of the
Exchange's DR Plans, as well as appropriate notification regarding such
designation. As set forth in the SCI Adopting Release, ``SROs have the
authority, and legal responsibility, under section 6 of the Exchange
Act, to adopt and enforce rules (including rules to comply with
Regulation SCI's requirements relating to [business continuity and
disaster recovery] testing) applicable to their members or participants
that are designed to, among other things, foster cooperation and
coordination with persons engaged in regulating, clearing, settling,
processing information with respect to, and facilitating transactions
in securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest.'' \14\ The Exchange believes
that this proposal is consistent with such authority and legal
responsibility.
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\14\ See SCI Adopting Release, supra note 4 at 72350.
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B. Self-Regulatory Organization's Statement on Burden on Competition
This proposed rule change does not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Exchange Act because ISE is implementing the requirements of
Regulation SCI.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
The Exchange has neither solicited nor received written comments on
this proposed rule change. The Exchange has not received any written
comments from members or other interested parties.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not significantly
affect the protection of investors or the public interest, does not
impose any significant burden on competition, and, by its
[[Page 13871]]
terms, does not become operative for 30 days from the date on which it
was filed, or such shorter time as the Commission may designate, it has
become effective pursuant to section 19(b)(3)(A) of the Act\15\ and
Rule 19b-4(f)(6) thereunder.\16\ The Exchange provided the Commission
with written notice of its intent to file the proposed rule change,
along with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing the proposed rule
change, or such shorter time as designated by the Commission, as
required by Rule 19b-4(f)(6).
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\15\ 15 U.S.C. 78s(b)(3)(A).
\16\ 17 CFR 240.19b-4(f)(6).
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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 No. SR-ISE-2016-06 on the subject line.
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-ISE-2016-06. 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 Commissions 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 such filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-ISE-2016-06 and should be
submitted by April 5, 2016.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-05756 Filed 3-14-16; 8:45 am]
BILLING CODE 8011-01-P
