Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding Quote Mitigation, 21278-21280 [2017-09061]

Download as PDF 21278 Federal Register / Vol. 82, No. 86 / Friday, May 5, 2017 / Notices 2. Evaluate the accuracy of the agency’s estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; 3. Enhance the quality, utility, and clarity of the information to be collected; and 4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submissions of responses. Form RI 25–49 is used to verify that adult student annuitants are entitled to payment. The Office of Personnel Management must confirm that a fulltime enrollment has been maintained. Analysis Agency: Retirement Operations, Retirement Services, Office of Personnel Management. Title: Verification of Full-Time School Attendance. OMB Number: 3206–0215. Frequency: On occasion. Affected Public: Individuals or Households. Number of Respondents: 10,000. Estimated Time per Respondent: 1 hour. Total Burden Hours: 10,000. U.S. Office of Personnel Management. Kathleen M. McGettigan, Acting Director. [FR Doc. 2017–09100 Filed 5–4–17; 8:45 am] BILLING CODE 6325–38–P POSTAL REGULATORY COMMISSION [Docket Nos. MC2017–126 and CP2017–179] New Postal Products Postal Regulatory Commission. Notice. AGENCY: ACTION: The Commission is noticing a recent Postal Service filing for the Commission’s consideration concerning negotiated service agreements. This notice informs the public of the filing, invites public comment, and takes other administrative steps. DATES: Comments are due: May 9, 2017. ADDRESSES: Submit comments electronically via the Commission’s Filing Online system at http:// www.prc.gov. Those who cannot submit comments electronically should contact the person identified in the FOR FURTHER INFORMATION CONTACT section by telephone for advice on filing alternatives. SRADOVICH on DSK3GMQ082PROD with NOTICES SUMMARY: VerDate Sep<11>2014 17:43 May 04, 2017 Jkt 241001 FOR FURTHER INFORMATION CONTACT: David A. Trissell, General Counsel, at 202–789–6820. SUPPLEMENTARY INFORMATION: Table of Contents I. Introduction II. Docketed Proceeding(s) I. Introduction The Commission gives notice that the Postal Service filed request(s) for the Commission to consider matters related to negotiated service agreement(s). The request(s) may propose the addition or removal of a negotiated service agreement from the market dominant or the competitive product list, or the modification of an existing product currently appearing on the market dominant or the competitive product list. Section II identifies the docket number(s) associated with each Postal Service request, the title of each Postal Service request, the request’s acceptance date, and the authority cited by the Postal Service for each request. For each request, the Commission appoints an officer of the Commission to represent the interests of the general public in the proceeding, pursuant to 39 U.S.C. 505 (Public Representative). Section II also establishes comment deadline(s) pertaining to each request. The public portions of the Postal Service’s request(s) can be accessed via the Commission’s Web site (http:// www.prc.gov). Non-public portions of the Postal Service’s request(s), if any, can be accessed through compliance with the requirements of 39 CFR 3007.40. The Commission invites comments on whether the Postal Service’s request(s) in the captioned docket(s) are consistent with the policies of title 39. For request(s) that the Postal Service states concern market dominant product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3622, 39 U.S.C. 3642, 39 CFR part 3010, and 39 CFR part 3020, subpart B. For request(s) that the Postal Service states concern competitive product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3632, 39 U.S.C. 3633, 39 U.S.C. 3642, 39 CFR part 3015, and 39 CFR part 3020, subpart B. Comment deadline(s) for each request appear in section II. II. Docketed Proceeding(s) 1. Docket No(s).: MC2017–126 and CP2017–179; Filing Title: Request of the United States Postal Service to Add Priority Mail Express & Priority Mail Contract 48 to Competitive Product List and Notice of Filing (Under Seal) of PO 00000 Frm 00093 Fmt 4703 Sfmt 4703 Unredacted Governors’ Decision, Contract, and Supporting Data; Filing Acceptance Date: May 1, 2017; Filing Authority: 39 U.S.C. 3642 and 39 CFR 3020.30 et seq.; Public Representative: Katalin K. Clendenin; Comments Due: May 9, 2017. This Notice will be published in the Federal Register. Stacy L. Ruble, Secretary. [FR Doc. 2017–09136 Filed 5–4–17; 8:45 am] BILLING CODE 7710–FW–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–80569; File No. SR–ISE– 2017–34] Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding Quote Mitigation May 1, 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 April 26, 2017, Nasdaq ISE, LLC (‘‘ISE’’ or ‘‘Exchange’’) 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 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 ISE Rule 804(h) regarding quote mitigation. 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 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. E:\FR\FM\05MYN1.SGM 05MYN1 Federal Register / Vol. 82, No. 86 / Friday, May 5, 2017 / Notices 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 SRADOVICH on DSK3GMQ082PROD with NOTICES 1. Purpose The Exchange proposes to amend ISE Rule 804, entitled ‘‘Market Maker Quotations,’’ to specifically amend Rule 804(h) which addresses the Exchange’s quote traffic mitigation plan to adopt a similar quote mitigation plan to that of NASDAQ PHLX LLC (‘‘Phlx’’). ISE implemented its quote mitigation plan in conjunction with joining other options exchanges in entering into the Penny Pilot Program to Quote Certain Options in Pennies. In 2007, ISE proposed to amend its rules to permit certain options classes to be quoted in pennies during a six-month pilot.3 ISE Rule 804(h) provides that ISE shall utilize a mechanism so that newlyreceived quotations and other changes to the Exchange’s best bid and offer are not disseminated for a period of up to, but not more than one second. With the upcoming planned migration to INET,4 the Exchange proposes to utilize a plan similar to that of Phlx for quote mitigation. The Exchange proposes to amend Rule 804(h) to adopt language similar to Phlx. Since 2007, Phlx has operated on INET, the same system that ISE will be migrating to utilize. Phlx Rule 1082(a)(ii)(C) sets forth the conditions under which Phlx disseminates updated quotations based on changes in the Exchange’s disseminated price and/or size. Phlx disseminates an updated bid and offer price, together with the size associated with such bid and offer, when: (1) Phlx’s disseminated bid or offer price increases or decreases; (2) the size associated with Phlx’s disseminated bid or offer decreases; or (3) the size associated with Phlx’s bid (offer) increases by an amount greater than or equal to a percentage (never to exceed 20%) 5 of the size associated with the 3 See Securities Exchange Release Act. No. 55161 (February 1, 2007), 72 FR 4754 (January 24, 2007) (SR–ISE–2006–62) (Order Granting Approval to Proposed Rule Change as Modified by Amendment Nos. 1 and 2 Thereto, To Implement a Penny Pilot Program To Quote Certain Options in Pennies). 4 See Securities Exchange Act Release No. 80432 (April 11, 2017), 82 FR 18191 (April 17, 2017) (SR– ISE–2017–03) (Order Approving Proposed Rule Change, as Modified by Amendment No. 1, to Amend Various Rules in Connection with a System Migration to Nasdaq INET Technology). 5 Phlx has set its percentage to 10%. See http:// www.nasdaqtrader.com/content/phlxmemos/2007/ jan/0197-07.pdf. VerDate Sep<11>2014 17:43 May 04, 2017 Jkt 241001 previously disseminated bid (offer). Such percentage, which would never exceed 20%, would be determined on an issue-by-issue basis by the Exchange and announced to membership via an Exchange circular. The percentage size increase necessary to give rise to a refreshed quote may vary from issue to issue, depending, without limitation, on the liquidity, average volume, and average number of quotations submitted in the issue. The mitigation would apply to all options traded on ISE. The Exchange will not be adopting Phlx Rule 1082(a)(ii)(C)(4). This functionality is not necessary on INET. Phlx adopted 1082(a)(ii)(C)(4) when it was not operating on INET, with its subsequent replatform to INET functionality, 1082(a)(ii)(C)(4) was no longer necessary because of the realtime features which exist on INET. The INET functionality rendered the rule text in 1082(a)(ii)(C)(4) as unnecessary. The Exchange will begin a system migration to Nasdaq INET in Q2 of 2017.6 The migration will be on a symbol by symbol basis as specified by the Exchange in a notice to Members. The Exchange is proposing to implement this rule change once all symbols have migrated to INET. Upon completion of the migration to INET, ISE will set an initial percentage of 3% to be applied to all issues, which will be announced in an Options Trader Alert. ISE will continue to monitor the quote activity on the market and would not notify participants of any incremental increase in the size of the Exchange’s quote to be disseminated to OPRA. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,7 in general, and furthers the objectives of Section 6(b)(5) of the Act,8 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, by reducing the number of options quotations required to be submitted to OPRA and, therefore, mitigating the Exchange’s quote message traffic and capacity. By adopting a quote mitigation plan similar to Phlx, the Exchange will 6 See Securities Exchange Act Release No. 80432 (April 11, 2017), 82 FR 18191 (April 17, 2017) (SR– ISE–2017–03) (Order Approving Proposed Rule Change, as Modified by Amendment No. 1, to Amend Various Rules in Connection with a System Migration to Nasdaq INET Technology). 7 15 U.S.C. 78f(b). 8 15 U.S.C. 78f(b)(5). PO 00000 Frm 00094 Fmt 4703 Sfmt 4703 21279 continue to mitigate quotes and monitor its quote capacity, as is the case today. While the Phlx method differs from that of ISE’s rule, the Exchange believes that Phlx’s method today successfully mitigates quotes on that market. In addition, ISE desires to adopt a similar mitigation as currently utilized by its affiliated market, as it will operate on the same architecture. The Phlx quote mitigation process has been in place since 2007. Phlx is operating on the INET system today, the same system that ISE will migrate to for its operating system. The Exchange believes that Phlx’s quote mitigation process has successfully controlled Phlx’s quote capacity. The Exchange believes that it is reasonable to utilize a similar process as Phlx to mitigate quotes for ISE given the system architecture which will be utilized on ISE with the upcoming migration. Additionally, Nasdaq, Inc., a common parent to Phlx and ISE, has experience with this quote mitigation strategy on INET. The Exchange has selected to mitigate ISE at 3% to start and determine if the percentage will need to be adjusted thereafter. While ISE, similar to Phlx, is a mature market with various auction offerings and higher volumes, ISE will be newly migrated to INET. The Exchange plans on monitoring the volume on this market to determine if the percentage needs to be adjusted. Utilizing 3% as the initial percentage will provide the Exchange with data for the newly migrated market. 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. The Exchange proposes to mitigate all options trading on ISE. All options exchanges have a quote mitigation process in place in connection with their participation in the Penny Pilot Program. 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 Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant E:\FR\FM\05MYN1.SGM 05MYN1 21280 Federal Register / Vol. 82, No. 86 / Friday, May 5, 2017 / Notices burden on competition; and (iii) 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)(iii) of the Act 9 and subparagraph (f)(6) of Rule 19b–4 thereunder.10 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. 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: 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– 2017–34 and should be submitted on or before May 26, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.11 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–09061 Filed 5–4–17; 8:45 am] BILLING CODE 8011–01–P 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–2017–34 on the subject line. SRADOVICH on DSK3GMQ082PROD with NOTICES 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–2017–34. 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 9 15 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. 10 17 VerDate Sep<11>2014 17:43 May 04, 2017 Jkt 241001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–80567; File No. TP 17–08] Order Granting Limited Exemptions From Exchange Act Rule 10b–17 and Rules 101 and 102 of Regulation M to Alpha Architect Value Momentum Trend ETF Pursuant to Exchange Act Rule 10b–17(b)(2) and Rules 101(d) and 102(e) of Regulation M May 1, 2017. By letter dated May 01, 2017 (the ‘‘Letter’’), counsel for Alpha Architect ETF Trust (the ‘‘Trust’’), on behalf of the Trust, Alpha Architect Value Momentum Trend ETF (the ‘‘Fund’’), any national securities exchange or national securities association on or through which shares issued by the Fund (‘‘Shares’’) are listed and/or may subsequently trade, Quasar Distributors, LLC (the ‘‘Distributor’’), and other persons engaging in transactions in Shares (collectively, the ‘‘Requestors’’), requested exemptions, or interpretive or no-action relief, from Rule 10b–17 of the Securities Exchange Act of 1934, as amended (‘‘Exchange Act’’), and Rules 101 and 102 of Regulation M, in connection with secondary market transactions in Shares and the creation 11 17 PO 00000 CFR 200.30–3(a)(12). Frm 00095 Fmt 4703 Sfmt 4703 or redemption of aggregations of 50,000 Shares (‘‘Creation Units’’). The Trust is registered with the Securities and Exchange Commission (‘‘Commission’’) under the Investment Company Act of 1940, as amended (‘‘1940 Act’’), as an open-end management investment company. The Fund is an exchange-traded fund (‘‘ETF’’) organized as a series of the Trust. The Fund seeks to track the performance of the Alpha Architect Value Momentum Trend Index (the ‘‘Index’’). The Fund intends to operate as an ‘‘ETF of ETFs’’ by seeking to track the performance of its underlying Index through, under normal circumstances,1 investing at least 80% of its total assets 2 in up to four ETFs that comprise the Index (‘‘Underlying ETFs’’). The Fund also intends to invest the remaining twenty percent of its total assets in cash and cash equivalents, other investment companies, as well as securities and other types of financial instruments that may not be components of the Index, but which will help the Fund track the Index (e.g., the Fund may invest in securities that are not components of the Index to reflect various corporate actions and other changes to the Index such as reconstitutions, additions, and deletions).3 Except for the fact that the Fund will operate as an ETF of ETFs, the Fund will operate in a manner identical to the Underlying ETFs. The Requestors represent, among other things, the following: • Shares of the Fund will be issued by the Trust, an open-end management investment company that is registered with the Commission; • The Trust will continuously redeem Creation Units at net asset value (‘‘NAV’’), and the secondary market price of the Shares should not vary 1 The term ‘‘under normal circumstances’’ includes, but is not limited to, the absence of adverse market, economic, political, or other conditions, including extreme volatility or trading halts in the securities markets or the financial markets generally; operational issues causing dissemination of inaccurate market information; or force majeure type events, such as systems failure, natural or man-made disaster, act of God, armed conflict, act of terrorism, riot or labor disruption, or any similar intervening circumstance. 2 Regardless of the representation that the Fund generally will invest at least 80% of its total assets in securities that comprise the underlying Index, the Fund seeks to have a tracking error of less than five percent in any given month over a one-year period. 3 The Fund intends, under normal circumstances, to hold shares of the Underlying ETFs and, from time to time, for hedging purposes, the Fund intends to short index ETFs or various types of financial instruments including, but not limited to, futures contracts and options on securities, indices, and futures contracts (‘‘Financial Instruments’’). Financial Instruments held or shorted by the Fund, if any, will be expected to provide a hedge against potential adverse market movements. E:\FR\FM\05MYN1.SGM 05MYN1

Agencies

[Federal Register Volume 82, Number 86 (Friday, May 5, 2017)]
[Notices]
[Pages 21278-21280]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-09061]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80569; File No. SR-ISE-2017-34]


Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Regarding Quote 
Mitigation

May 1, 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 April 26, 2017, Nasdaq ISE, LLC (``ISE'' or ``Exchange'') 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 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 ISE Rule 804(h) regarding quote 
mitigation.
    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

[[Page 21279]]

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 Exchange proposes to amend ISE Rule 804, entitled ``Market 
Maker Quotations,'' to specifically amend Rule 804(h) which addresses 
the Exchange's quote traffic mitigation plan to adopt a similar quote 
mitigation plan to that of NASDAQ PHLX LLC (``Phlx'').
    ISE implemented its quote mitigation plan in conjunction with 
joining other options exchanges in entering into the Penny Pilot 
Program to Quote Certain Options in Pennies. In 2007, ISE proposed to 
amend its rules to permit certain options classes to be quoted in 
pennies during a six-month pilot.\3\
---------------------------------------------------------------------------

    \3\ See Securities Exchange Release Act. No. 55161 (February 1, 
2007), 72 FR 4754 (January 24, 2007) (SR-ISE-2006-62) (Order 
Granting Approval to Proposed Rule Change as Modified by Amendment 
Nos. 1 and 2 Thereto, To Implement a Penny Pilot Program To Quote 
Certain Options in Pennies).
---------------------------------------------------------------------------

    ISE Rule 804(h) provides that ISE shall utilize a mechanism so that 
newly-received quotations and other changes to the Exchange's best bid 
and offer are not disseminated for a period of up to, but not more than 
one second. With the upcoming planned migration to INET,\4\ the 
Exchange proposes to utilize a plan similar to that of Phlx for quote 
mitigation. The Exchange proposes to amend Rule 804(h) to adopt 
language similar to Phlx. Since 2007, Phlx has operated on INET, the 
same system that ISE will be migrating to utilize.
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 80432 (April 11, 
2017), 82 FR 18191 (April 17, 2017) (SR-ISE-2017-03) (Order 
Approving Proposed Rule Change, as Modified by Amendment No. 1, to 
Amend Various Rules in Connection with a System Migration to Nasdaq 
INET Technology).
---------------------------------------------------------------------------

    Phlx Rule 1082(a)(ii)(C) sets forth the conditions under which Phlx 
disseminates updated quotations based on changes in the Exchange's 
disseminated price and/or size. Phlx disseminates an updated bid and 
offer price, together with the size associated with such bid and offer, 
when: (1) Phlx's disseminated bid or offer price increases or 
decreases; (2) the size associated with Phlx's disseminated bid or 
offer decreases; or (3) the size associated with Phlx's bid (offer) 
increases by an amount greater than or equal to a percentage (never to 
exceed 20%) \5\ of the size associated with the previously disseminated 
bid (offer). Such percentage, which would never exceed 20%, would be 
determined on an issue-by-issue basis by the Exchange and announced to 
membership via an Exchange circular. The percentage size increase 
necessary to give rise to a refreshed quote may vary from issue to 
issue, depending, without limitation, on the liquidity, average volume, 
and average number of quotations submitted in the issue. The mitigation 
would apply to all options traded on ISE.
---------------------------------------------------------------------------

    \5\ Phlx has set its percentage to 10%. See http://www.nasdaqtrader.com/content/phlxmemos/2007/jan/0197-07.pdf.
---------------------------------------------------------------------------

    The Exchange will not be adopting Phlx Rule 1082(a)(ii)(C)(4). This 
functionality is not necessary on INET. Phlx adopted 1082(a)(ii)(C)(4) 
when it was not operating on INET, with its subsequent replatform to 
INET functionality, 1082(a)(ii)(C)(4) was no longer necessary because 
of the real-time features which exist on INET. The INET functionality 
rendered the rule text in 1082(a)(ii)(C)(4) as unnecessary.
    The Exchange will begin a system migration to Nasdaq INET in Q2 of 
2017.\6\ The migration will be on a symbol by symbol basis as specified 
by the Exchange in a notice to Members. The Exchange is proposing to 
implement this rule change once all symbols have migrated to INET.
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 80432 (April 11, 
2017), 82 FR 18191 (April 17, 2017) (SR-ISE-2017-03) (Order 
Approving Proposed Rule Change, as Modified by Amendment No. 1, to 
Amend Various Rules in Connection with a System Migration to Nasdaq 
INET Technology).
---------------------------------------------------------------------------

    Upon completion of the migration to INET, ISE will set an initial 
percentage of 3% to be applied to all issues, which will be announced 
in an Options Trader Alert. ISE will continue to monitor the quote 
activity on the market and would not notify participants of any 
incremental increase in the size of the Exchange's quote to be 
disseminated to OPRA.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\7\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\8\ 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, 
by reducing the number of options quotations required to be submitted 
to OPRA and, therefore, mitigating the Exchange's quote message traffic 
and capacity. By adopting a quote mitigation plan similar to Phlx, the 
Exchange will continue to mitigate quotes and monitor its quote 
capacity, as is the case today. While the Phlx method differs from that 
of ISE's rule, the Exchange believes that Phlx's method today 
successfully mitigates quotes on that market. In addition, ISE desires 
to adopt a similar mitigation as currently utilized by its affiliated 
market, as it will operate on the same architecture.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Phlx quote mitigation process has been in place since 2007. 
Phlx is operating on the INET system today, the same system that ISE 
will migrate to for its operating system. The Exchange believes that 
Phlx's quote mitigation process has successfully controlled Phlx's 
quote capacity. The Exchange believes that it is reasonable to utilize 
a similar process as Phlx to mitigate quotes for ISE given the system 
architecture which will be utilized on ISE with the upcoming migration. 
Additionally, Nasdaq, Inc., a common parent to Phlx and ISE, has 
experience with this quote mitigation strategy on INET. The Exchange 
has selected to mitigate ISE at 3% to start and determine if the 
percentage will need to be adjusted thereafter. While ISE, similar to 
Phlx, is a mature market with various auction offerings and higher 
volumes, ISE will be newly migrated to INET. The Exchange plans on 
monitoring the volume on this market to determine if the percentage 
needs to be adjusted. Utilizing 3% as the initial percentage will 
provide the Exchange with data for the newly migrated market.

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. The Exchange proposes to 
mitigate all options trading on ISE. All options exchanges have a quote 
mitigation process in place in connection with their participation in 
the Penny Pilot Program.

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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant

[[Page 21280]]

burden on competition; and (iii) 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)(iii) 
of the Act \9\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\10\
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    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.

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-2017-34 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-2017-34. 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 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-2017-34 and should be 
submitted on or before May 26, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-09061 Filed 5-4-17; 8:45 am]
 BILLING CODE 8011-01-P