Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify the Qualified Contingent Cross and Solicitation Rebate Tiers, 13899-13901 [2017-05086]
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Federal Register / Vol. 82, No. 49 / Wednesday, March 15, 2017 / Notices
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)
of the Act 17 and paragraph (f) of Rule
19b–4 thereunder.18 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.
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 NOTICES2
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–
BatsEDGX–2017–12 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 No.
SR–BatsEDGX–2017–12. 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 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 No. SR–BatsEDGX–
2017–12, and should be submitted on or
before April 5, 2017.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–05087 Filed 3–14–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–80185; File No. SR–ISE–
2017–17]
Self-Regulatory Organizations;
International Securities Exchange,
LLC; Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change To Modify the Qualified
Contingent Cross and Solicitation
Rebate Tiers
March 9, 2017.
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 February
27, 2017, 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.
19 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
17 15
U.S.C. 78s(b)(3)(A).
18 17 CFR 240.19b–4(f).
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13899
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes a rule change
to amend the Schedule of Fees to
modify the Qualified Contingent Cross
and Solicitation rebate tiers.
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
Currently, members using QCC and/or
other solicited crossing orders,
including solicited orders executed in
the Solicitation, Facilitation or Price
Improvement Mechanisms, receive
rebates for each originating contract side
in all symbols traded on the Exchange.
Once a member reaches a certain
volume threshold in QCC orders and/or
solicited crossing orders during a
month, the Exchange provides rebates to
that Member for all of its QCC and
solicited crossing order traded contracts
for that month. The applicable rebates
are applied on QCC and solicited
crossing order traded contracts once the
volume threshold is met. Members
receive the Non-‘‘Customer to
Customer’’ rebate for all QCC and/or
other solicited crossing orders except for
QCC and solicited orders between two
Priority Customers. QCC and solicited
orders between two Priority Customers
receive the ‘‘Customer to Customer’’
rebate or ‘‘Customer to Customer’’
Rebate PLUS, respectively.3 Non‘‘Customer to Customer’’ and ‘‘Customer
to Customer’’ volume is aggregated in
determining the applicable volume tier.
3 The PLUS rebate is for Members with total
monthly unsolicited originating Facilitation
contract side volume of 175,000 or more.
E:\FR\FM\15MRN1.SGM
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13900
Federal Register / Vol. 82, No. 49 / Wednesday, March 15, 2017 / Notices
The current volume threshold and
corresponding rebates are as follows:
Non-‘‘Customer to
Customer’’rebate
Originating contract sides
‘‘Customer to
Customer’’ rebate
‘‘Customer to
Customer’’ rebate
PLUS
$0.00
(0.05)
(0.07)
(0.08)
(0.09)
(0.11)
$0.00
(0.01)
(0.01)
(0.03)
(0.03)
(0.03)
$0.00
(0.05)
(0.05)
(0.05)
(0.05)
(0.05)
0 to 99,999 .................................................................................................................
100,000 to 199,999 ....................................................................................................
200,000 to 499,999 ....................................................................................................
500,000 to 699,999 ....................................................................................................
700,000 to 999,999 ....................................................................................................
1,000,000+ .................................................................................................................
The Exchange now proposes to make
two changes to the QCC and Solicitation
rebate. First, the Exchange proposes to
aggregate volume from affiliates in
determining the Member’s tier for
purposes of the QCC and Solicitation
rebate. As proposed, all eligible volume
from affiliated Members will be
aggregated in determining QCC and
Solicitation volume totals, provided
there is at least 75% common
ownership between the Members as
reflected on each Member’s Form BD,
Schedule A. The Exchange believes that
aggregating volume across Members that
share at least 75% common ownership
will allow Members to continue to
execute trades on the Exchange through
separate broker-dealer entities for
different types of volume, while
receiving rebates based on the aggregate
volume being executed across such
entities. The Exchange currently
aggregates volume from affiliated
Members in determining applicable fees
and rebates, including, for example, the
Crossing Fee Cap,4 and believes that it
is appropriate to now extend this
treatment to the QCC and Solicitation
rebate.
In addition, the Exchange proposes to
eliminate the current tier 4—i.e., from
500,000 to 699,999 originating contract
sides—and merge this tier into current
tier 5. With this proposed change,
Non-‘‘Customer to
Customer’’ rebate
Originating contract sides
‘‘Customer to
Customer’’ rebate
‘‘Customer to
Customer’’ rebate
PLUS
$0.00
(0.05)
(0.07)
(0.09)
(0.11)
$0.00
(0.01)
(0.01)
(0.03)
(0.03)
$0.00
(0.05)
(0.05)
(0.05)
(0.05)
0 to 99,999 .................................................................................................................
100,000 to 199,999 ....................................................................................................
200,000 to 499,999 ....................................................................................................
500,000 to 999,999 ....................................................................................................
1,000,000+ .................................................................................................................
asabaliauskas on DSK3SPTVN1PROD with NOTICES2
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
the provisions of Section 6 of the Act,5
in general, and Section 6(b)(4) of the
Act,6 in particular, in that it is designed
to provide for the equitable allocation of
reasonable dues, fees, and other charges
among its members and other persons
using its facilities.
The Exchange believes that it is
reasonable, equitable, and not unfairly
discriminatory to aggregate volume
amongst corporate affiliates for purposes
of the QCC and Solicitation rebate as
this change is intended to avoid
disparate treatment of firms that have
divided their various business activities
between separate corporate entities as
compared to firms that operate those
business activities within a single
4 See Securities Exchange Act Release No. 70873
(November 14, 2013), 78 FR 69714 (November 20,
2013) (SR–ISE–2013–56).
VerDate Sep<11>2014
18:19 Mar 14, 2017
Jkt 241001
corporate entity. By way of example,
many firms that are Members of the
Exchange operate several different
business lines within the same
corporate entity. In contrast, other firms
may be part of a corporate structure that
separates those business lines into
different corporate affiliates, either for
business, compliance or historical
reasons. Those corporate affiliates, in
turn, are required to maintain separate
memberships with the Exchange in
order to access the Exchange. The
Exchange currently aggregates volume
executed by affiliates for other fees and
rebates,7 and now proposes to similarly
aggregate volume executed by affiliates
for purposes of the QCC and Solicitation
rebate. The proposed definition of
‘‘affiliate’’ to be used to aggregate
volume for the QCC and Solicitation
5 15
6 15
PO 00000
Members that execute between 500,000
and 999,999 originating contract sides of
eligible volume will earn the current tier
5 rebates—i.e., a Non-‘‘Customer to
Customer’’ rebate of $0.09 per
originating contract side, a ‘‘Customerto-Customer’’ rebate of $0.03 per
originating contract side and a
‘‘Customer-to-Customer’’ rebate PLUS of
$0.05 per originating contract side. The
Exchange believes that this change will
incentivize members to execute more
QCC and/or other solicited crossing
orders on the Exchange in order to
qualify for enhanced rebates. The new
tier schedule and rebates are shown in
the following table:
U.S.C. 78f.
U.S.C. 78f(b)(4).
Frm 00113
Fmt 4703
rebate is consistent with definitions
used by the Exchange in other contexts.8
In addition, the Exchange believes
that the proposed changes to the QCC
and Solicitation rebate tier schedule are
reasonable and equitable as the
proposed changes simplify the
Exchange’s tier structure, and provide
more favorable rebates to members due
to the reduced volume thresholds for
achieving current tier 5 rebates. As
explained above, the Exchange is
eliminating the current tier 4 and
merging it into current tier 5, thereby
giving members a higher rebate for the
same volume. The Exchange believes
that this change will incentivize
members to bring additional QCC and/
or other solicited crossing order volume
to the Exchange in order to benefit from
the enhanced rebates. The Exchange
also believes that the proposed changes
7 See
e.g., supra note 4.
8 Id.
Sfmt 4703
E:\FR\FM\15MRN1.SGM
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Federal Register / Vol. 82, No. 49 / Wednesday, March 15, 2017 / Notices
to the tier schedule are not unfairly
discriminatory as all members will be
able to attain higher rebates by
executing the required volume of QCC
and/or other solicited crossing orders on
the Exchange.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
In accordance with Section 6(b)(8) of
the Act,9 the Exchange does not believe
that the proposed rule change will
impose any burden on intermarket or
intramarket competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed rule change merely allows for
the aggregation of volume from affiliates
for purposes of the QCC and Solicitation
rebate, consistent with treatment of
volume for other purposes in the
Schedule of Fees, and with volume
aggregation on other options markets.
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
No written comments were either
solicited or received.
asabaliauskas on DSK3SPTVN1PROD with NOTICES2
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,10 and Rule
19b–4(f)(2) 11 thereunder. 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: (i)
Necessary or appropriate in the public
interest; (ii) for the protection of
investors; or (iii) 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.
U.S.C. 78f(b)(8).
U.S.C. 78s(b)(3)(A)(ii).
11 17 CFR 240.19b–4(f)(2).
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–2017–17 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–2017–17. 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 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–
2017–17 and should be submitted on or
before April 5, 2017.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–05086 Filed 3–14–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–80193; File No. SR–FINRA–
2017–006]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing of a
Proposed Rule Change To Amend Rule
6191 To Implement an Anonymous,
Grouped Masking Methodology for
Over-the-Counter Activity in
Connection With Web Site Data
Publication of Appendix B Data
Pursuant to the Regulation NMS Plan
To Implement a Tick Size Pilot
Program
March 9, 2017.
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 March 3,
2017, Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I, II,
and III below, which Items have been
prepared by FINRA. 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
FINRA is proposing to amend Rule
6191 to implement an anonymous,
grouped masking methodology for overthe-counter (‘‘OTC’’) activity in
connection with Web site data
publication of Appendix B data
pursuant to the Regulation NMS Plan to
Implement a Tick Size Pilot Program
(‘‘Plan’’).
The text of the proposed rule change
is available on FINRA’s Web site at
https://www.finra.org, at the principal
office of FINRA and at the
Commission’s Public Reference Room.
9 15
1 15
10 15
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18:19 Mar 14, 2017
12 17
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CFR 200.30–3(a)(12).
Frm 00114
Fmt 4703
Sfmt 4703
13901
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
E:\FR\FM\15MRN1.SGM
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]]>Agencies
[Federal Register Volume 82, Number 49 (Wednesday, March 15, 2017)]
[Notices]
[Pages 13899-13901]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-05086]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-80185; File No. SR-ISE-2017-17]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change To Modify the Qualified Contingent Cross and Solicitation Rebate
Tiers
March 9, 2017.
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 February 27, 2017, 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 a rule change to amend the Schedule of Fees
to modify the Qualified Contingent Cross and Solicitation rebate tiers.
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
Currently, members using QCC and/or other solicited crossing
orders, including solicited orders executed in the Solicitation,
Facilitation or Price Improvement Mechanisms, receive rebates for each
originating contract side in all symbols traded on the Exchange. Once a
member reaches a certain volume threshold in QCC orders and/or
solicited crossing orders during a month, the Exchange provides rebates
to that Member for all of its QCC and solicited crossing order traded
contracts for that month. The applicable rebates are applied on QCC and
solicited crossing order traded contracts once the volume threshold is
met. Members receive the Non-``Customer to Customer'' rebate for all
QCC and/or other solicited crossing orders except for QCC and solicited
orders between two Priority Customers. QCC and solicited orders between
two Priority Customers receive the ``Customer to Customer'' rebate or
``Customer to Customer'' Rebate PLUS, respectively.\3\ Non-``Customer
to Customer'' and ``Customer to Customer'' volume is aggregated in
determining the applicable volume tier.
[[Page 13900]]
The current volume threshold and corresponding rebates are as follows:
---------------------------------------------------------------------------
\3\ The PLUS rebate is for Members with total monthly
unsolicited originating Facilitation contract side volume of 175,000
or more.
----------------------------------------------------------------------------------------------------------------
``Customer to
Originating contract sides Non-``Customer to ``Customer to Customer'' rebate
Customer''rebate Customer'' rebate PLUS
----------------------------------------------------------------------------------------------------------------
0 to 99,999............................................ $0.00 $0.00 $0.00
100,000 to 199,999..................................... (0.05) (0.01) (0.05)
200,000 to 499,999..................................... (0.07) (0.01) (0.05)
500,000 to 699,999..................................... (0.08) (0.03) (0.05)
700,000 to 999,999..................................... (0.09) (0.03) (0.05)
1,000,000+............................................. (0.11) (0.03) (0.05)
----------------------------------------------------------------------------------------------------------------
The Exchange now proposes to make two changes to the QCC and
Solicitation rebate. First, the Exchange proposes to aggregate volume
from affiliates in determining the Member's tier for purposes of the
QCC and Solicitation rebate. As proposed, all eligible volume from
affiliated Members will be aggregated in determining QCC and
Solicitation volume totals, provided there is at least 75% common
ownership between the Members as reflected on each Member's Form BD,
Schedule A. The Exchange believes that aggregating volume across
Members that share at least 75% common ownership will allow Members to
continue to execute trades on the Exchange through separate broker-
dealer entities for different types of volume, while receiving rebates
based on the aggregate volume being executed across such entities. The
Exchange currently aggregates volume from affiliated Members in
determining applicable fees and rebates, including, for example, the
Crossing Fee Cap,\4\ and believes that it is appropriate to now extend
this treatment to the QCC and Solicitation rebate.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 70873 (November 14,
2013), 78 FR 69714 (November 20, 2013) (SR-ISE-2013-56).
---------------------------------------------------------------------------
In addition, the Exchange proposes to eliminate the current tier
4--i.e., from 500,000 to 699,999 originating contract sides--and merge
this tier into current tier 5. With this proposed change, Members that
execute between 500,000 and 999,999 originating contract sides of
eligible volume will earn the current tier 5 rebates--i.e., a Non-
``Customer to Customer'' rebate of $0.09 per originating contract side,
a ``Customer-to-Customer'' rebate of $0.03 per originating contract
side and a ``Customer-to-Customer'' rebate PLUS of $0.05 per
originating contract side. The Exchange believes that this change will
incentivize members to execute more QCC and/or other solicited crossing
orders on the Exchange in order to qualify for enhanced rebates. The
new tier schedule and rebates are shown in the following table:
----------------------------------------------------------------------------------------------------------------
Non-``Customer to ``Customer to
Originating contract sides Customer'' ``Customer to Customer'' rebate
rebate Customer'' rebate PLUS
----------------------------------------------------------------------------------------------------------------
0 to 99,999............................................ $0.00 $0.00 $0.00
100,000 to 199,999..................................... (0.05) (0.01) (0.05)
200,000 to 499,999..................................... (0.07) (0.01) (0.05)
500,000 to 999,999..................................... (0.09) (0.03) (0.05)
1,000,000+............................................. (0.11) (0.03) (0.05)
----------------------------------------------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\5\ in general, and Section
6(b)(4) of the Act,\6\ 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.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78f.
\6\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
The Exchange believes that it is reasonable, equitable, and not
unfairly discriminatory to aggregate volume amongst corporate
affiliates for purposes of the QCC and Solicitation rebate as this
change is intended to avoid disparate treatment of firms that have
divided their various business activities between separate corporate
entities as compared to firms that operate those business activities
within a single corporate entity. By way of example, many firms that
are Members of the Exchange operate several different business lines
within the same corporate entity. In contrast, other firms may be part
of a corporate structure that separates those business lines into
different corporate affiliates, either for business, compliance or
historical reasons. Those corporate affiliates, in turn, are required
to maintain separate memberships with the Exchange in order to access
the Exchange. The Exchange currently aggregates volume executed by
affiliates for other fees and rebates,\7\ and now proposes to similarly
aggregate volume executed by affiliates for purposes of the QCC and
Solicitation rebate. The proposed definition of ``affiliate'' to be
used to aggregate volume for the QCC and Solicitation rebate is
consistent with definitions used by the Exchange in other contexts.\8\
---------------------------------------------------------------------------
\7\ See e.g., supra note 4.
\8\ Id.
---------------------------------------------------------------------------
In addition, the Exchange believes that the proposed changes to the
QCC and Solicitation rebate tier schedule are reasonable and equitable
as the proposed changes simplify the Exchange's tier structure, and
provide more favorable rebates to members due to the reduced volume
thresholds for achieving current tier 5 rebates. As explained above,
the Exchange is eliminating the current tier 4 and merging it into
current tier 5, thereby giving members a higher rebate for the same
volume. The Exchange believes that this change will incentivize members
to bring additional QCC and/or other solicited crossing order volume to
the Exchange in order to benefit from the enhanced rebates. The
Exchange also believes that the proposed changes
[[Page 13901]]
to the tier schedule are not unfairly discriminatory as all members
will be able to attain higher rebates by executing the required volume
of QCC and/or other solicited crossing orders on the Exchange.
B. Self-Regulatory Organization's Statement on Burden on Competition
In accordance with Section 6(b)(8) of the Act,\9\ the Exchange does
not believe that the proposed rule change will impose any burden on
intermarket or intramarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act. The proposed
rule change merely allows for the aggregation of volume from affiliates
for purposes of the QCC and Solicitation rebate, consistent with
treatment of volume for other purposes in the Schedule of Fees, and
with volume aggregation on other options markets. 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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\9\ 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
No written comments were either solicited or 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)(ii) of the Act,\10\ and Rule 19b-4(f)(2) \11\ thereunder.
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: (i) Necessary or
appropriate in the public interest; (ii) for the protection of
investors; or (iii) 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.
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\10\ 15 U.S.C. 78s(b)(3)(A)(ii).
\11\ 17 CFR 240.19b-4(f)(2).
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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-2017-17 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-2017-17. 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 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-2017-17 and should be
submitted on or before April 5, 2017.
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\12\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-05086 Filed 3-14-17; 8:45 am]
BILLING CODE 8011-01-P
