Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Priority Customer Taker Fees for Regular Orders in Select Symbols, 32592-32593 [2017-14755]

Download as PDF 32592 Federal Register / Vol. 82, No. 134 / Friday, July 14, 2017 / Notices disapprove the proposed rule change (File Number SR–NYSEMKT–2017–31). SECURITIES AND EXCHANGE COMMISSION [Release No. 34–81112; File No. SR– NYSEMKT–2017–31] Self-Regulatory Organizations; NYSE MKT LLC; Notice of Designation of a Longer Period for Commission Action on a Proposed Rule Change To Adopt Rule 6900 To Establish the Procedures for Resolving Potential Disputes Related to CAT Fees Charged to Industry Members mstockstill on DSK30JT082PROD with NOTICES July 10, 2017. On May 16, 2017, NYSE MKT LLC. (‘‘NYSE MKT’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to adopt Rule 6900 (Consolidated Audit Trail—Fee Dispute Resolutions). The proposed rule change was published for comment in the Federal Register on June 1, 2017.3 The Commission received no comment letters on the proposed rule change. Section 19(b)(2) of the Act 4 provides that, within 45 days of the publication of notice of the filing of a proposed rule change, or within such longer period up to 90 days as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or as to which the self-regulatory organization consents, the Commission shall either approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether the proposed rule change should be disapproved. The Commission is extending this 45-day time period. The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change. The proposed rule change would establish the procedures for resolving potential disputes related to CAT Fees charged to Industry Members. Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,5 designates August 30, 2017, as the date by which the Commission should either approve or disapprove or institute proceedings to determine whether to 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 Securities Exchange Act Release No. 80782 (May 26, 2017), 82 FR 25379 (‘‘Notice’’). 4 15 U.S.C. 78s(b)(2). 5 15 U.S.C. 78s(b)(2). 2 17 VerDate Sep<11>2014 17:44 Jul 13, 2017 Jkt 241001 the most significant aspects of such statements. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.6 Jill M. Peterson, Assistant Secretary. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change [FR Doc. 2017–14776 Filed 7–13–17; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–81108; File No. SR–ISE– 2017–65] Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Priority Customer Taker Fees for Regular Orders in Select Symbols July 10, 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 June 30, 2017, Nasdaq ISE, LLC (‘‘ISE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘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 its Schedule of Fees, as described further below. 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 PO 00000 6 17 CFR 200.30–3(a)(31). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 Frm 00065 Fmt 4703 Sfmt 4703 1. Purpose The purpose of the proposed rule change is to amend the Schedule of Fees to make changes to the Priority Customer 3 taker fees for regular orders in Select Symbols,4 as described in more detail below. Currently, the Exchange charges a taker fee for regular orders in Select Symbols that is $0.44 per contract for Market Maker 5 orders, $0.45 per contract for Non-Nasdaq ISE Market Maker,6 Firm Proprietary,7 BrokerDealer,8 and Professional Customer 9 orders, and $0.40 per contract for Priority Customer orders. In addition, the Exchange charges a reduced Priority Customer taker fee of $0.35 per contract for regular orders in SPY, which is the most actively traded name on the Exchange. The Exchange now proposes to further reduce the Priority Customer taker fee for regular orders in SPY from $0.35 per contract to $0.30 per contract. The Exchange also proposes to reduce the Priority Customer taker fee for QQQ, IWM and VXX from $0.40 per contract to $0.35 per contract. SPY, QQQ, IWM and VXX are some of the most actively traded names on the Exchange. As such, the Exchange believes that this reduction in fees will attract Priority Customer orders in those symbols to ISE. Finally, the Exchange proposes to increase the Priority Customer taker fee for regular orders in all other Select Symbols from $0.40 per contract to $0.44 per contract. 3 A ‘‘Priority Customer’’ is a person or entity that is not a broker/dealer in securities, and does not place more than 390 orders in listed options per day on average during a calendar month for its own beneficial account(s), as defined in Nasdaq ISE Rule 100(a)(37A). 4 ‘‘Select Symbols’’ are options overlying all symbols listed on the Nasdaq ISE that are in the Penny Pilot Program. 5 The term ‘‘Market Makers’’ refers to ‘‘Competitive Market Makers’’ and ‘‘Primary Market Makers’’ collectively. See ISE Rule 100(a)(25). 6 A ‘‘Non-Nasdaq ISE Market Maker’’ is a market maker as defined in Section 3(a)(38) of the Securities Exchange Act of 1934, as amended, registered in the same options class on another options exchange. 7 A ‘‘Firm Proprietary’’ order is an order submitted by a member for its own proprietary account. 8 A ‘‘Broker-Dealer’’ order is an order submitted by a member for a broker-dealer account that is not its own proprietary account. 9 A ‘‘Professional Customer’’ is a person or entity that is not a broker/dealer and is not a Priority Customer. E:\FR\FM\14JYN1.SGM 14JYN1 mstockstill on DSK30JT082PROD with NOTICES Federal Register / Vol. 82, No. 134 / Friday, July 14, 2017 / Notices 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,10 in general, and Section 6(b)(4) of the Act,11 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 and equitable to reduce the Priority Customer taker fee for regular orders in SPY, QQQ, IWM and VXX as the proposed fees are more favorable than those currently offered on the Exchange. The Exchange is targeting SPY, QQQ, IWM and VXX for this change as these are some of the most actively traded symbols on ISE. With this change, the Exchange will charge lower taker fees for Priority Customer orders in SPY, QQQ, IWM and VXX, thereby attracting additional order flow in these symbols to the benefit of all members that trade on the Exchange. Furthermore, the Exchange believes that it is equitable and not unfairly discriminatory to only offer this reduced taker fee to Priority Customer orders. A Priority Customer is by definition not a broker or dealer in securities, and does not place more than 390 orders in listed options per day on average during a calendar month for its own beneficial account(s). This limitation does not apply to participants on the Exchange whose behavior is substantially similar to that of market professionals, including Professional Customers, who will generally submit a higher number of orders than Priority Customers. The Exchange believes that it is reasonable and equitable to increase the Priority Customer taker fee for regular orders in all other Select Symbols because the proposed fees will remain lower or be equal to other market participants that remove liquidity on the Exchange. In addition, the proposed increase will be offset by the lower taker fees proposed for Priority Customer orders in SPY, QQQ, IWM and VXX, which as noted above are some of the most actively traded names on ISE. The Exchange also notes that the increased fees proposed herein are still lower than the level of fees charged by one of the Exchange’s competitors.12 In addition, the Exchange believes that the proposed fee changes are equitable and not unfairly discriminatory because the increased Priority Customer taker fees 10 15 U.S.C. 78f. 11 15 U.S.C. 78f(b)(4). 12 See C2 Options Exchange, Inc.’s Fee Schedule, Section 1: http://www.cboe.com/publish/ C2FeeSchedule/C2FeeSchedule.pdf. VerDate Sep<11>2014 17:44 Jul 13, 2017 Jkt 241001 will apply equally to all similarlysituated market participants. B. Self-Regulatory Organization’s Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,13 the Exchange does not believe that the proposed rule change will impose any burden on intermarket or intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange believes that the proposed fees remain competitive with those on other options markets, and will continue to attract order flow to the Exchange. 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. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act,14 and Rule 19b–4(f)(2) 15 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. 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: PO 00000 U.S.C. 78f(b)(8). U.S.C. 78s(b)(3)(A)(ii). 15 17 CFR 240.19b–4(f)(2). 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–2017–65 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–2017–65. 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– 2017–65 and should be submitted on or before August 4, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Jill M. Peterson, Assistant Secretary. [FR Doc. 2017–14755 Filed 7–13–17; 8:45 am] BILLING CODE 8011–01–P 13 15 14 15 Frm 00066 Fmt 4703 Sfmt 9990 32593 16 17 E:\FR\FM\14JYN1.SGM CFR 200.30–3(a)(12). 14JYN1

Agencies

[Federal Register Volume 82, Number 134 (Friday, July 14, 2017)]
[Notices]
[Pages 32592-32593]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-14755]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81108; File No. SR-ISE-2017-65]


Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend Priority 
Customer Taker Fees for Regular Orders in Select Symbols

July 10, 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 June 30, 2017, Nasdaq ISE, LLC (``ISE'' or ``Exchange'') filed with 
the Securities and Exchange Commission (``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 its Schedule of Fees, as described 
further below.
    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 the proposed rule change is to amend the Schedule of 
Fees to make changes to the Priority Customer \3\ taker fees for 
regular orders in Select Symbols,\4\ as described in more detail below.
---------------------------------------------------------------------------

    \3\ A ``Priority Customer'' is a person or entity that is not a 
broker/dealer in securities, and does not place more than 390 orders 
in listed options per day on average during a calendar month for its 
own beneficial account(s), as defined in Nasdaq ISE Rule 
100(a)(37A).
    \4\ ``Select Symbols'' are options overlying all symbols listed 
on the Nasdaq ISE that are in the Penny Pilot Program.
---------------------------------------------------------------------------

    Currently, the Exchange charges a taker fee for regular orders in 
Select Symbols that is $0.44 per contract for Market Maker \5\ orders, 
$0.45 per contract for Non-Nasdaq ISE Market Maker,\6\ Firm 
Proprietary,\7\ Broker-Dealer,\8\ and Professional Customer \9\ orders, 
and $0.40 per contract for Priority Customer orders. In addition, the 
Exchange charges a reduced Priority Customer taker fee of $0.35 per 
contract for regular orders in SPY, which is the most actively traded 
name on the Exchange.
---------------------------------------------------------------------------

    \5\ The term ``Market Makers'' refers to ``Competitive Market 
Makers'' and ``Primary Market Makers'' collectively. See ISE Rule 
100(a)(25).
    \6\ A ``Non-Nasdaq ISE Market Maker'' is a market maker as 
defined in Section 3(a)(38) of the Securities Exchange Act of 1934, 
as amended, registered in the same options class on another options 
exchange.
    \7\ A ``Firm Proprietary'' order is an order submitted by a 
member for its own proprietary account.
    \8\ A ``Broker-Dealer'' order is an order submitted by a member 
for a broker-dealer account that is not its own proprietary account.
    \9\ A ``Professional Customer'' is a person or entity that is 
not a broker/dealer and is not a Priority Customer.
---------------------------------------------------------------------------

    The Exchange now proposes to further reduce the Priority Customer 
taker fee for regular orders in SPY from $0.35 per contract to $0.30 
per contract. The Exchange also proposes to reduce the Priority 
Customer taker fee for QQQ, IWM and VXX from $0.40 per contract to 
$0.35 per contract. SPY, QQQ, IWM and VXX are some of the most actively 
traded names on the Exchange. As such, the Exchange believes that this 
reduction in fees will attract Priority Customer orders in those 
symbols to ISE. Finally, the Exchange proposes to increase the Priority 
Customer taker fee for regular orders in all other Select Symbols from 
$0.40 per contract to $0.44 per contract.

[[Page 32593]]

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\10\ in general, and 
Section 6(b)(4) of the Act,\11\ 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.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f.
    \11\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange believes that it is reasonable and equitable to reduce 
the Priority Customer taker fee for regular orders in SPY, QQQ, IWM and 
VXX as the proposed fees are more favorable than those currently 
offered on the Exchange. The Exchange is targeting SPY, QQQ, IWM and 
VXX for this change as these are some of the most actively traded 
symbols on ISE. With this change, the Exchange will charge lower taker 
fees for Priority Customer orders in SPY, QQQ, IWM and VXX, thereby 
attracting additional order flow in these symbols to the benefit of all 
members that trade on the Exchange. Furthermore, the Exchange believes 
that it is equitable and not unfairly discriminatory to only offer this 
reduced taker fee to Priority Customer orders. A Priority Customer is 
by definition not a broker or dealer in securities, and does not place 
more than 390 orders in listed options per day on average during a 
calendar month for its own beneficial account(s). This limitation does 
not apply to participants on the Exchange whose behavior is 
substantially similar to that of market professionals, including 
Professional Customers, who will generally submit a higher number of 
orders than Priority Customers.
    The Exchange believes that it is reasonable and equitable to 
increase the Priority Customer taker fee for regular orders in all 
other Select Symbols because the proposed fees will remain lower or be 
equal to other market participants that remove liquidity on the 
Exchange. In addition, the proposed increase will be offset by the 
lower taker fees proposed for Priority Customer orders in SPY, QQQ, IWM 
and VXX, which as noted above are some of the most actively traded 
names on ISE. The Exchange also notes that the increased fees proposed 
herein are still lower than the level of fees charged by one of the 
Exchange's competitors.\12\ In addition, the Exchange believes that the 
proposed fee changes are equitable and not unfairly discriminatory 
because the increased Priority Customer taker fees will apply equally 
to all similarly-situated market participants.
---------------------------------------------------------------------------

    \12\ See C2 Options Exchange, Inc.'s Fee Schedule, Section 1: 
http://www.cboe.com/publish/C2FeeSchedule/C2FeeSchedule.pdf.
---------------------------------------------------------------------------

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

    In accordance with Section 6(b)(8) of the Act,\13\ the Exchange 
does not believe that the proposed rule change will impose any burden 
on intermarket or intramarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. The Exchange 
believes that the proposed fees remain competitive with those on other 
options markets, and will continue to attract order flow to the 
Exchange. 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.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

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,\14\ and Rule 19b-4(f)(2) \15\ 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.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \15\ 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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-ISE-2017-65 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-2017-65. 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-2017-65 and should be 
submitted on or before August 4, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2017-14755 Filed 7-13-17; 8:45 am]
 BILLING CODE 8011-01-P