Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing of Proposed Rule Change to Amend the Supplementary Material to ISE Rule 1901, 96532-96534 [2016-31678]

Download as PDF 96532 Federal Register / Vol. 81, No. 251 / Friday, December 30, 2016 / Notices 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 rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 8 and paragraph (f)(2) of Rule 19b–4 thereunder.9 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. 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: srobinson on DSK5SPTVN1PROD with NOTICES Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– FINRA–2016–048 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–FINRA–2016–048. 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 (http://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 FINRA. 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–FINRA– 2016–048, and should be submitted on or before January 20, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Robert W. Errett, Deputy Secretary. [FR Doc. 2016–31682 Filed 12–29–16; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–79686; File No. SR–ISE– 2016–31] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing of Proposed Rule Change to Amend the Supplementary Material to ISE Rule 1901 December 23, 2016. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on December 22, 2016, the International Securities Exchange, LLC (‘‘ISE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. 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 the Supplementary Material to ISE Rule 1901, titled ‘‘Order Protection’’ in CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. U.S.C. 78s(b)(3)(A). 9 17 CFR 240.19b–4(f)(2). VerDate Sep<11>2014 19:18 Dec 29, 2016 1 15 Jkt 241001 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 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 10 17 8 15 connection with a system migration to Nasdaq INET technology. 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. PO 00000 Frm 00100 Fmt 4703 Sfmt 4703 The purpose of this rule change is to amend the Supplementary Material to ISE Rule 1901, titled ‘‘Order Protection’’ to reflect the ISE, ISE Gemini, LLC and ISE Mercury, LLC technology migration to a Nasdaq, Inc. (‘‘Nasdaq’’) supported architecture. INET is the proprietary core technology utilized across Nasdaq’s global markets and utilized on The NASDAQ Options Market LLC (‘‘NOM’’), NASDAQ PHLX LLC (‘‘Phlx’’) and NASDAQ BX, Inc. (‘‘BX’’) (collectively, ‘‘Nasdaq Exchanges’’). The migration of ISE to the Nasdaq INET architecture would result in higher performance, scalability, and more robust architecture. With this system migration, the Exchange intends to adopt certain trading functionality currently utilized at Nasdaq Exchanges. The functionality being adopted is described in this filing. Generally With the re-platform, the Exchange will now be built on the Nasdaq INET architecture, which allows certain trading system functionality to be performed in parallel. The Exchange believes that this architecture change will improve the member experience by reducing overall latency compared to the current ISE, ISE Gemini, LLC and ISE Mercury, LLC system because of the manner in which the system is segregated into component parts to handle processing. E:\FR\FM\30DEN1.SGM 30DEN1 Federal Register / Vol. 81, No. 251 / Friday, December 30, 2016 / Notices srobinson on DSK5SPTVN1PROD with NOTICES Trading Halts Pursuant to Supplementary Material .02 to Rule 1901, when the automatic execution of an incoming order would result in an impermissible tradethrough, such order is exposed at the current national best bid or offer to all members for a time period established by the Exchange not to exceed one (1) second.3 The Exchange proposes to amend Supplementary Material .02 to Rule 1901 to provide that if a trading halt is initiated during this exposure period, the exposure period will be terminated without execution. Today, when a trading halt is triggered during the auction process described above, ISE terminates the exposure period and executes eligible interest. The proposed treatment of trading halts is based on Phlx Rule 1047(c), which provides that in the event the exchange halts trading, all trading in the affected option shall be halted. This is interpreted to restrict executions after a halt unless there is a specific rule specifying that such trades should take place. Halting the exposure period without execution is a change from current ISE behavior. However, the Exchange believes participants prefer certainty in regard to how their interest will be handled in the event of a trading halt and prefer consistency of behavior across market centers. Implementation The Exchange intends to begin implementation of the proposed rule change in tandem with a technology migration to Nasdaq INET architecture. The migration will be on a symbol by symbol basis, and the Exchange will issue a notice to provide Members with notification of the symbols that will migrate and the relevant dates. With respect to the amendment to Supplementary Material .02 to Rule 1901, the rule change impact not only ISE, but also ISE Gemini, LLC and ISE Mercury, LLC because Chapter 19 is incorporated by reference into those rulebooks. The Exchange proposes that the implementation of this rule change into each rulebook occur as specified herein. ISE rule changes will be implemented in Q2 2017 on a symbol by symbol basis, as noted above. ISE Gemini, LLC rule changes will be implemented in Q1 2017 on a symbol by symbol basis. ISE Mercury, LLC rule changes will be implemented in Q3 2017 on a symbol by symbol basis. The Exchange will add the following rule text to make clear the implementation 3 During the exposure period, Exchange Members may enter responses up to the size of the order being exposed in the regular trading increment applicable to the option. VerDate Sep<11>2014 19:18 Dec 29, 2016 Jkt 241001 date in each rulebook: ‘‘The amended rule text will be implemented on a symbol by symbol basis for ISE Gemini, LLC in Q1 2017, for ISE in Q2 2017 and for ISE Mercury, LLC in Q3 2017, the specific dates will be announced in a separate notice.’’ 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,4 in general, and furthers the objectives of Section 6(b)(5) of the Act,5 in particular, in that it is designed to promote just and equitable principles of trade, 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 for the reasons stated below. Trading Halts The Exchange’s proposal to amend Supplementary Material .02 to Rule 1901 to add a new provision to memorialize the impact of a trading halt on the exposure period is consistent with the Act because halting the exposure period without execution provides certainty to market participants with respect to how their interest will be handled in the event of a trading halt. This method will also provide consistency of behavior across market centers. Memorializing this behavior will increase transparency of the operation of the Exchange for the benefit of Members and investors. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. As explained above, the Exchange is re-platforming it’s trading system onto the Nasdaq INET architecture, and is making certain other changes to its trading functionality in connection with this migration. Amending the Supplementary Material .02 to Rule 1901 will not impact the intense competition that exists in the options market. In fact, the Exchange believes that this proposal will provide clarity as to the manner in which a trading halt impacts exposure periods, thereby providing certainty to all market participants. 4 15 5 15 PO 00000 U.S.C. 78f(b). U.S.C. 78f(b)(5). Frm 00101 Fmt 4703 Sfmt 4703 96533 C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or within such longer period up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve or disapprove such proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be 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 (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rulecomments@sec.gov. Please include File Number SR–ISE–2016–31 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–2016–31. 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 (http://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 E:\FR\FM\30DEN1.SGM 30DEN1 96534 Federal Register / Vol. 81, No. 251 / Friday, December 30, 2016 / Notices provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–ISE– 2016–31 and should be submitted on or before January 20, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.6 Robert W. Errett, Deputy Secretary. [FR Doc. 2016–31678 Filed 12–29–16; 8:45 am] BILLING CODE 8011–01–P [Release No. 34–79688; File No. SR– NYSEArca–2016–170] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending NYSE Arca Equities Rules 7.11, 7.31, and 7.34 December 23, 2016. srobinson on DSK5SPTVN1PROD with NOTICES Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’),2 and Rule 19b–4 thereunder,3 notice is hereby given that on December 20, 2016, NYSE Arca, Inc. (the ‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of the Substance of the Proposed Rule Change The Exchange proposes to amend NYSE Arca Equities Rules 7.11, 7.31, and 7.34 to specify order behavior for orders entered via the Pillar phase II protocols. The proposed rule change is 6 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 1 15 19:18 Dec 29, 2016 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 those 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 parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose SECURITIES AND EXCHANGE COMMISSION VerDate Sep<11>2014 available on the Exchange’s Web site at www.nyse.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. Jkt 241001 The Exchange proposes to amend NYSE Arca Equities Rules 7.11 (Limit Up-Limit Down Plan and Trading Pauses in Individual Securities Due to Extraordinary Market Volatility) (‘‘Rule 7.11’’), 7.31 (Orders and Modifiers) (‘‘Rule 7.31’’), and 7.34 (Trading Sessions) (‘‘Rule 7.34’’) to specify order behavior for orders entered via the Pillar phase II protocols. Background On January 29, 2015, the Exchange announced the implementation of Pillar, which is an integrated trading technology platform designed to use a single specification for connecting to the equities and options markets operated by the Exchange and its affiliates, NYSE MKT, Inc. (‘‘NYSE MKT’’) and New York Stock Exchange LLC (‘‘NYSE’’).4 NYSE Arca Equities, which operates the equities trading platform for the Exchange, was the first trading system to migrate to Pillar. In connection with this implementation, the Exchange filed four rule proposals relating to Pillar.5 4 See Trader Update dated January 29, 2015, available here: https://www.nyse.com/publicdocs/ nyse/markets/nyse/ Pillar_Trader_Update_Jan_2015.pdf. 5 See Securities Exchange Act Release Nos. 74951 (May 13, 2015), 80 FR 28721 (May 19, 2015) (Notice) and 75494 (July 20, 2015), 80 FR 44170 (July 24, 2015) (SR–NYSEArca–2015–38) (Approval Order of NYSE Arca Pillar I Filing, adopting rules for Trading Sessions, Order Ranking and Display, and Order Execution); Securities Exchange Act Release Nos. 75497 (July 21, 2015), 80 FR 45022 (July 28, 2015) (Notice) and 76267 (October 26, 2015), 80 FR 66951 (October 30, 2015) (SR– NYSEArca–2015–56) (Approval Order of NYSE Arca Pillar II Filing, adopting rules for Orders and PO 00000 Frm 00102 Fmt 4703 Sfmt 4703 ETP Holders enter orders and order instructions by using communication protocols that map to the order types and modifiers described in Exchange rules. Currently, all ETP Holders communicate with the NYSE Arca Marketplace using Pillar phase I protocols. The Exchange is introducing new technology to support how ETP Holders communicate with the NYSE Arca Marketplace (‘‘Pillar phase II protocols’’). Because Pillar phase II protocols will support new order functionality, the Exchange proposes to revise its rules to reflect these changes. During this implementation, there will be a period when both the Pillar phase I and Pillar phase II protocols will be available to ETP Holders. Accordingly, the Exchange proposes to amend its rules to describe how an ETP Holder’s orders would behave depending on the protocol an ETP Holder chooses to use. Proposed Amendments to Rule 7.11 Currently, under Rule 7.11 any Limit Order that is priced or would trade outside of a Price Band under the Plan 6 is cancelled, unless an ETP Holder enters instructions for adjustment of the Limit Order’s working price. Specifically, Rule 7.11(a)(5) specifies that a buy (sell) order that is priced or could be traded above (below) the Upper (Lower) Price Band will be cancelled, except as specified in Rule 7.11(a)(6). Rule 7.11(a)(6) further provides that ETP Holders may enter an instruction for the working price of a Limit Order to buy (sell) with a limit price above (below) the Upper (Lower) price Band to be adjusted to a price that is equal to the Upper (Lower) Price Band rather than cancel the order. Paragraphs (A)–(D) to Rule 7.11(a)(6) provide more specifics regarding how such repricing instructions operate. Modifiers and the Retail Liquidity Program); Securities Exchange Act Release Nos. 75467 (July 16, 2015), 80 FR 43515 (July 22, 2015) (Notice) and 76198 (October 20, 2015), 80 FR 65274 (October 26, 2015) (SR–NYSEArca–2015–58) (Approval Order of NYSE Arca Pillar III Filing, adopting rules for Trading Halts, Short Sales, Limit Up-Limit Down, and Odd Lots and Mixed Lots); and Securities Exchange Act Release Nos. 76085 (October 6, 2015), 80 FR 61513 (October 13, 2015) (Notice) and 76869 (January 11, 2016), 81 FR 2276 (January 15, 2016) (Approval Order of NYSE Arca Pillar IV Filing, adopting rules for Auctions). 6 Under Rule 7.11(a)(1), the ‘‘Plan’’ is defined as the Plan to Address Extraordinary Market Volatility Submitted to the Securities and Exchange Commission Pursuant to Rule 608 of Regulation NMS under the Securities Exchange Act of 1934, Exhibit A to Securities Exchange Act Release No. 67091 (May 31, 2012), 77 FR 33498 (June 6, 2012), as it may be amended from time to time. Under Rule 7.11(a)(2), capitalized terms not otherwise defined in Rule 7.11 have the meaning set forth in the Plan. E:\FR\FM\30DEN1.SGM 30DEN1

Agencies

[Federal Register Volume 81, Number 251 (Friday, December 30, 2016)]
[Notices]
[Pages 96532-96534]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-31678]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79686; File No. SR-ISE-2016-31]


Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing of Proposed Rule Change to Amend the 
Supplementary Material to ISE Rule 1901

December 23, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on December 22, 2016, the International Securities Exchange, LLC 
(``ISE'' or ``Exchange'') filed with the Securities and Exchange 
Commission (``SEC'' or ``Commission'') the proposed rule change as 
described in Items I and II below, which Items have been prepared by 
the Exchange. 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 the Supplementary Material to ISE 
Rule 1901, titled ``Order Protection'' in connection with a system 
migration to Nasdaq INET technology.
    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 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 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
    The purpose of this rule change is to amend the Supplementary 
Material to ISE Rule 1901, titled ``Order Protection'' to reflect the 
ISE, ISE Gemini, LLC and ISE Mercury, LLC technology migration to a 
Nasdaq, Inc. (``Nasdaq'') supported architecture. INET is the 
proprietary core technology utilized across Nasdaq's global markets and 
utilized on The NASDAQ Options Market LLC (``NOM''), NASDAQ PHLX LLC 
(``Phlx'') and NASDAQ BX, Inc. (``BX'') (collectively, ``Nasdaq 
Exchanges''). The migration of ISE to the Nasdaq INET architecture 
would result in higher performance, scalability, and more robust 
architecture. With this system migration, the Exchange intends to adopt 
certain trading functionality currently utilized at Nasdaq Exchanges. 
The functionality being adopted is described in this filing.
Generally
    With the re-platform, the Exchange will now be built on the Nasdaq 
INET architecture, which allows certain trading system functionality to 
be performed in parallel. The Exchange believes that this architecture 
change will improve the member experience by reducing overall latency 
compared to the current ISE, ISE Gemini, LLC and ISE Mercury, LLC 
system because of the manner in which the system is segregated into 
component parts to handle processing.

[[Page 96533]]

Trading Halts
    Pursuant to Supplementary Material .02 to Rule 1901, when the 
automatic execution of an incoming order would result in an 
impermissible trade-through, such order is exposed at the current 
national best bid or offer to all members for a time period established 
by the Exchange not to exceed one (1) second.\3\ The Exchange proposes 
to amend Supplementary Material .02 to Rule 1901 to provide that if a 
trading halt is initiated during this exposure period, the exposure 
period will be terminated without execution. Today, when a trading halt 
is triggered during the auction process described above, ISE terminates 
the exposure period and executes eligible interest. The proposed 
treatment of trading halts is based on Phlx Rule 1047(c), which 
provides that in the event the exchange halts trading, all trading in 
the affected option shall be halted. This is interpreted to restrict 
executions after a halt unless there is a specific rule specifying that 
such trades should take place. Halting the exposure period without 
execution is a change from current ISE behavior. However, the Exchange 
believes participants prefer certainty in regard to how their interest 
will be handled in the event of a trading halt and prefer consistency 
of behavior across market centers.
---------------------------------------------------------------------------

    \3\ During the exposure period, Exchange Members may enter 
responses up to the size of the order being exposed in the regular 
trading increment applicable to the option.
---------------------------------------------------------------------------

Implementation
    The Exchange intends to begin implementation of the proposed rule 
change in tandem with a technology migration to Nasdaq INET 
architecture. The migration will be on a symbol by symbol basis, and 
the Exchange will issue a notice to provide Members with notification 
of the symbols that will migrate and the relevant dates. With respect 
to the amendment to Supplementary Material .02 to Rule 1901, the rule 
change impact not only ISE, but also ISE Gemini, LLC and ISE Mercury, 
LLC because Chapter 19 is incorporated by reference into those 
rulebooks. The Exchange proposes that the implementation of this rule 
change into each rulebook occur as specified herein. ISE rule changes 
will be implemented in Q2 2017 on a symbol by symbol basis, as noted 
above. ISE Gemini, LLC rule changes will be implemented in Q1 2017 on a 
symbol by symbol basis. ISE Mercury, LLC rule changes will be 
implemented in Q3 2017 on a symbol by symbol basis. The Exchange will 
add the following rule text to make clear the implementation date in 
each rulebook: ``The amended rule text will be implemented on a symbol 
by symbol basis for ISE Gemini, LLC in Q1 2017, for ISE in Q2 2017 and 
for ISE Mercury, LLC in Q3 2017, the specific dates will be announced 
in a separate notice.''
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\4\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\5\ in particular, in that it is designed to promote 
just and equitable principles of trade, 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 
for the reasons stated below.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

Trading Halts
    The Exchange's proposal to amend Supplementary Material .02 to Rule 
1901 to add a new provision to memorialize the impact of a trading halt 
on the exposure period is consistent with the Act because halting the 
exposure period without execution provides certainty to market 
participants with respect to how their interest will be handled in the 
event of a trading halt. This method will also provide consistency of 
behavior across market centers. Memorializing this behavior will 
increase transparency of the operation of the Exchange for the benefit 
of Members and investors.

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. As explained above, the 
Exchange is re-platforming it's trading system onto the Nasdaq INET 
architecture, and is making certain other changes to its trading 
functionality in connection with this migration. Amending the 
Supplementary Material .02 to Rule 1901 will not impact the intense 
competition that exists in the options market. In fact, the Exchange 
believes that this proposal will provide clarity as to the manner in 
which a trading halt impacts exposure periods, thereby providing 
certainty to all market participants.

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

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove such proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be 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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-ISE-2016-31 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-2016-31. 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 (http://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

[[Page 96534]]

provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-ISE-2016-31 and should be 
submitted on or before January 20, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\6\
---------------------------------------------------------------------------

    \6\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-31678 Filed 12-29-16; 8:45 am]
 BILLING CODE 8011-01-P