Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Supplementary Material to Rule 706 To Harmonize Its Sponsored Access Rules With Those of Its Affiliates, 23517-23520 [2018-10705]

Download as PDF Federal Register / Vol. 83, No. 98 / Monday, May 21, 2018 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018–10707 Filed 5–18–18; 8:45 am] BILLING CODE 8011–01–P A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change SECURITIES AND EXCHANGE COMMISSION [Release No. 34–83238; File No. SR–ISE– 2018–44] Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Supplementary Material to Rule 706 To Harmonize Its Sponsored Access Rules With Those of Its Affiliates May 15, 2018. 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 May 9, 2018, 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. sradovich on DSK3GMQ082PROD with NOTICES I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Supplementary Material to Rule 706 to harmonize its sponsored access rules with those of its affiliates, The Nasdaq Stock Market LLC (‘‘NQX’’), Nasdaq BX, Inc. (‘‘BX’’) and Nasdaq PHLX LLC (‘‘PHLX,’’ and together with NQX and BX, ‘‘Nasdaq Exchanges’’). The text of the proposed rule change is available on the Exchange’s website at https://ise.cchwallstreet.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 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Sep<11>2014 18:20 May 18, 2018 Jkt 244001 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. 1. Purpose The purpose of the proposed rule change is to amend Supplementary Material to Rule 706, which contains the Exchange’s sponsored access rules, to harmonize these rules with those of the Nasdaq Exchanges.3 On March 9, 2016, the Exchange and its affiliates, ISE Gemini, LLC (now, Nasdaq GEMX, LLC) (‘‘GEMX’’) and ISE Mercury, LLC (now, Nasdaq MRX, LLC) (‘‘MRX’’ and together with ISE and GEMX, ‘‘ISE Exchanges’’), were acquired by Nasdaq, Inc. (‘‘Acquisition’’).4 In the context of the Acquisition, the ISE Exchanges have been working to align certain of its rules and processes with those of the Nasdaq Exchanges in order to provide consistent standards across the six exchanges owned and operated by Nasdaq, Inc. (collectively, ‘‘Affiliated Exchanges’’). As part of this effort, the proposal set forth below harmonizes the Exchange’s sponsored access rules with the Nasdaq Sponsored Access Rules in order to provide uniform standards and requirements for users of the Affiliated Exchanges.5 In particular, the Exchange proposes to (1) define the term ‘‘Sponsored Access’’ and ‘‘Customer Agreement;’’ (2) specify the requirement to comply with Rule 15c3–5 under the Act (‘‘Market Access Rule’’); (3) remove the requirements that each Sponsored Customer and each Sponsoring Member enter into certain agreements with the Exchange; and (4) make a number of related, non-substantive changes. Each change is discussed in detail as follows. Defining Sponsored Access A Sponsored Customer is a nonmember of the Exchange, such as an institutional investor, that gains access to the Exchange 6 and trades under a 3 See NQX Rule 4615, BX Rule 4615 and PHLX Rule 1094 (collectively, ‘‘Nasdaq Sponsored Access Rules’’). 4 See Securities Exchange Act Release No. 78119 (June 21, 2016), 81 FR 41611 (June 27, 2016) (SR– ISE–2016–11; SR–ISEGemini-2016–05; SR– ISEMercury–2016–10). 5 GEMX and MRX will each file similar rule change proposals with the Commission to harmonize their sponsored access rules with the Nasdaq Sponsored Access Rules. 6 For example, a broker-dealer may allow its customer—whether an institution such as a hedge PO 00000 Frm 00104 Fmt 4703 Sfmt 4703 23517 Sponsoring Member’s execution and clearing identity pursuant to a sponsorship arrangement between such non-member and Sponsoring Member, as set forth in Supplementary Material to Rule 706. The Exchange is proposing to define the term ‘‘Sponsored Access’’ to clarify the type of market access arrangement that is subject to this rule. Accordingly, the Exchange proposes to amend Supplementary Material .01(a) to Rule 706 to add the following definition: ‘‘Sponsored Access shall mean an arrangement whereby a Member permits its customers to enter orders into the System that bypass the Member’s trading system and are routed directly to the Exchange, including routing through a service bureau or other third party technology provider.’’ This definition mirrors the language set forth in the Nasdaq Sponsored Access Rules,7 and is derived from the Commission’s description of Sponsored Access used in the release approving the Market Access Rule.8 The Exchange believes that defining Sponsored Access in Supplementary Material .01(a) to Rule 706 will provide market participants with greater clarity regarding Sponsored Access and their obligations with respect to this type of access arrangement. Defining Customer Agreement The Exchange proposes to amend Supplementary Material .01(b)(1) to Rule 706 to define the agreement that Sponsored Customers must enter into and maintain with one or more Sponsoring Members to establish proper relationship(s) and account(s) through which the Sponsored Customer may trade on the Exchange, as a ‘‘Customer Agreement.’’ 9 Market Access Rule Pursuant to Supplementary Material .01(b)(2) to Rule 706, the Sponsoring Member is responsible for the activities fund, mutual fund, bank or insurance company, an individual, or another broker-dealer—to use the broker-dealer’s MPID, account or other mechanism or mnemonic used to identify a market participant for the purposes of electronically accessing the Exchange. 7 See NQX Rule 4615(a), BX Rule 4615(a) and PHLX Rule 1094(a). 8 The Market Access Rule, among other things, requires broker-dealers providing others with access to an exchange or alternative trading system to establish, document, and maintain a system of risk management controls and supervisory procedures reasonably designed to manage the financial, regulatory, and other risks of providing such access. See Securities Exchange Act Release No. 63241 (November 3, 2010), 75 FR 69792 (November 15, 2010). 9 The Nasdaq Sponsored Access Rules also similarly define ‘‘Customer Agreement.’’ See NQX Rule 4615(b)(i), BX Rule 4615(b)(i) and PHLX Rule 1094(b)(i). E:\FR\FM\21MYN1.SGM 21MYN1 23518 Federal Register / Vol. 83, No. 98 / Monday, May 21, 2018 / Notices of the Sponsored Customer. Sponsored Customers are required to have procedures in place to comply with the Exchange’s rules, and the Sponsoring Member takes responsibility for the Sponsored Customer’s activity on the Exchange. Members may have multiple Sponsored Access relationships in place at a given time. The Exchange’s examination program assesses compliance with the sponsored access rules set forth in Supplementary Material to Rule 706, among other rules.10 The Exchange now proposes to specifically enumerate in Supplementary Material .01(b)(2) to Rule 706 the member’s obligation to comply with the Market Access Rule, with which Members are currently required to comply in connection with market access.11 The Exchange believes that specifying the obligation to comply with the Market Access Rule within the rule itself will reinforce that Supplementary Material to Rule 706 presupposes member compliance with the Market Access Rule. sradovich on DSK3GMQ082PROD with NOTICES Elimination of Certain Contract Requirements The Exchange currently requires a Sponsored Customer Agreement between the Sponsored Customer and the Exchange,12 and a Sponsored Customer Addendum to the member access agreement (hereinafter, ‘‘Addendum’’) that is provided to the Exchange by the Sponsoring Member.13 At this time, the Exchange proposes to remove the existing requirements to submit the Sponsored Customer Agreement and Addendum to the Exchange in order to align its sponsored access rules with the Nasdaq Sponsored Access Rules. The Exchange will continue to require a Customer Agreement between the Sponsored Customer and Sponsoring Member pursuant to Supplementary Material .01(b)(2) to Rule 706.14 Today, only members may request connectivity to the Exchange by contacting Nasdaq Subscriber Services. A member may obtain separate ports for the purpose of providing Sponsored 10 The Exchange has a Regulatory Services Agreement (‘‘RSA’’) with the Financial Industry Regulatory Authority (‘‘FINRA’’) to conduct regulatory examinations, among other obligations. 11 See NQX Rule 4615(b)(ii)(A), BX Rule 4615(b)(ii)(A) and PHLX Rule 1094(b)(ii)(A) for consistent provisions. 12 See Supplementary Material .01(a) to Rule 706. 13 See Supplementary Material .01(b)(2)(i) and (b)(3) to Rule 706. 14 The Nasdaq Sponsored Access Rules likewise only require a Customer Agreement between the sponsored participant and sponsoring member. See NQX Rule 4615(b)(i), BX Rule 4615(b)(i) and PHLX Rule 1094(b)(i). VerDate Sep<11>2014 18:20 May 18, 2018 Jkt 244001 Access. If separate ports are requested by a member for the purpose of providing Sponsored Access, the member must request those ports from the Exchange and is responsible for the Sponsored Customer’s activity on the Exchange.15 In all circumstances, the Exchange only permits members to request connectivity to the market and the member is responsible for all customer orders submitted through the member’s port. In addition, such connection by the member requires approval by the Exchange for the purpose of testing as well as other relevant information sharing with the Exchange by the member to obtain a port. The Exchange is therefore aware of the member responsible for each of its ports. The Exchange may also request further information about a member’s particular customer relationship, including the list of all Authorized Traders who may have access to the Exchange on behalf of the Sponsored Customer, as it deems necessary.16 The Exchange believes that completing and submitting the Sponsored Customer Agreement and Addendum is unnecessarily burdensome in light of the current structure in place at the Exchange. The Sponsored Customer Agreement requirement was intended to ensure that the Sponsored Customer was informed of its obligation to comply with the Exchange’s Certificate of Formation, ByLaws, Rules and procedures, including the requirements in Supplementary Material .01(b)(2)(iii)–(ix).17 The agreement also provided the Exchange with contractual privity, which would no longer exist with the removal of the Sponsored Customer Agreement. The Exchange does not believe the loss of privity with the Sponsored Customer creates a concern as the Exchange has the ability to remove access to the port at any time if it determines that the activity of the Sponsored Customer warrants such removal. In addition, as discussed below, the Sponsored 15 In such cases, the Nasdaq Exchanges also require members to disclose the sponsored access arrangement as a condition to approving the member’s port request. ISE will similarly require members requesting connectivity to ISE for the purpose of providing Sponsored Access to disclose sponsored access arrangements as a condition to approval. 16 See Rule 1601. 17 These requirements include, among others, the Sponsored Customer’s obligation to maintain, keep current and provide to the Sponsoring Member a list of Authorized Traders who may obtain access to the Exchange on behalf of the Sponsored Customer. In addition, the Sponsored Customer must take reasonable security precautions to prevent unauthorized use or access to the Exchange, and is responsible for having adequate procedures and controls in place to comply with ISE’s rules. PO 00000 Frm 00105 Fmt 4703 Sfmt 4703 Customer will be informed of its obligations through the Customer Agreement that it executed with the Sponsoring Member. As noted above, the Exchange only permits its members to request connectivity to the Exchange’s trading system, and members remain responsible for all trades submitted through such ports. Pursuant to Supplementary Material .01(b)(2)(vii) to Rule 706, the trading activity of a Sponsored Customer must be monitored by the Sponsoring Member for compliance with the terms of the Customer Agreement with the Sponsored Customer. Finally, Sponsoring Members continue to be obligated to comply with Supplementary Material .01(b) to Rule 706 and the Market Access Rule. As such, the Sponsoring Member is responsible for any and all actions taken by its Sponsored Customer and any person acting on behalf of or in the name of such Sponsored Customer. The Addendum requirement was intended to notify the Exchange of the relationship between the Sponsoring Member and the Sponsored Customer, and to provide the Sponsoring Member’s express acknowledgment of the Sponsoring Member’s responsibility for the orders, executions and actions of its Sponsored Customer. However, as noted above, the Exchange may request additional information about a particular customer relationship as it deems necessary.18 The Exchange will also require that its members disclose the Sponsored Customer relationship as a condition for approving any ports requested for the purpose of providing Sponsored Access.19 Accordingly, the Exchange will continue to be notified of Sponsored Customer arrangements even with the removal of the Addendum. Furthermore, as discussed above, Sponsoring Members continue to be obligated to comply with Supplementary Material .01(b) to Rule 706 and the Market Access Rule, and are therefore responsible for any and all actions taken by its Sponsored Customer and any person acting on behalf of or in the name of such Sponsored Customer. The Exchange, through its RSA with FINRA, reviews member compliance with Supplementary Material to Rule 706, including compliance with the Market Access Rule. Supplementary Material .01(b)(1) to Rule 706 requires that the Sponsored Customer and the Sponsoring Member maintain a Customer Agreement with the sponsorship provisions set forth in paragraph (2) to ensure compliance with 18 See 19 See E:\FR\FM\21MYN1.SGM Rule 1601. note 15 above. 21MYN1 Federal Register / Vol. 83, No. 98 / Monday, May 21, 2018 / Notices objectives of Section 6(b)(5) of the Act,22 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. Overall, the proposed rule change is intended to align the Exchange’s sponsored access rules in Supplementary Material to Rule 706 with the Nasdaq Sponsored Access Rules, and is part of the Exchange’s continued effort to promote efficiency and conformity of its processes with those of the Nasdaq Exchanges. Consistent rules and processes across the Affiliated Exchanges would in turn simplify the regulatory requirements for members of the Exchange that are also participants on the Nasdaq Exchanges. The Exchange believes that its proposal would provide greater harmonization among similar rules and procedures of the Affiliated Exchanges, resulting in greater uniformity and more efficient regulatory compliance. As such, the proposed rule change would foster cooperation and coordination with persons engaged in facilitating transactions in securities and would remove impediments to and perfect the mechanism of a free and open market and national market system. Clean-Up Changes The Exchange proposes to correct two typographical errors in subsections (vii) and (ix) of Supplementary Material .01(b)(2) to Rule 706. First in subsection (vii), the Exchange proposes to correct a typo by replacing ‘‘of’’ with ‘‘or’’ in the first sentence. The proposed sentence would therefore state ‘‘Sponsored Customer shall take reasonable security precautions to prevent unauthorized use or access to the Exchange . . .’’ Second, subsection (ix) would be amended to correct a typo in the last portion of the first sentence. In particular, the phrase ‘‘. . . Sponsored Customers access to and use of the Exchange’’ should be ‘‘. . . Sponsored Customer’s access to and use of the Exchange.’’ Both of these proposed changes are non-substantive clean-ups, and are intended to ensure that the rule text is as accurate and clear as possible. sradovich on DSK3GMQ082PROD with NOTICES Exchange’s rules and obligations related to security, among other things. Additionally, Supplementary Material .01(b)(2)(iv) and (v) require that the Customer Agreement include the Sponsored Customer’s obligation to maintain, keep current and provide to the Sponsoring Member a list of Authorized Traders who have been granted access to the Exchange on behalf of the Sponsored Customer, and provide such Authorized Traders with appropriate training prior to any use or access to the Exchange. In addition, pursuant to the Customer Agreement provisions required by Rule 706, Supplementary Material .01(b)(vii), the Sponsored Customer is obligated to take reasonable security precautions to prevent unauthorized use or access to the Exchange, including unauthorized entry of information into the Exchange’s System, or the information and data made available therein. Finally, the Customer Agreement must provide that the Sponsored Customer is responsible for any and all orders, trades and other messages and instructions entered, transmitted or received under identifiers, passwords and security codes of Authorized Traders, and for the trading and other consequences thereof, including granting unauthorized access to the Exchange.20 The contents and the requirement for a Customer Agreement are unchanged. Defining Sponsored Access 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,21 in general, and furthers the 20 See Rule 706, Supplementary Material .01(b)(vii). 21 15 U.S.C. 78f(b). VerDate Sep<11>2014 18:20 May 18, 2018 Jkt 244001 Adding a definition of Sponsored Access will assist market participants to understand the type of arrangements that are subject to Supplementary Material to Rule 706, and such clarity will serve to promote just and equitable principles of trade. The Exchange believes that adding the Sponsored Access definition will provide its members with additional guidance with respect to this Rule. Defining Customer Agreement Defining the agreement that Sponsored Customers must enter into and maintain with one or more Sponsoring Members to establish proper relationship(s) and account(s) through which the Sponsored Customer may trade on the Exchange, as a ‘‘Customer Agreement’’ will also serve to provide members with clarity on the agreement that the Exchange will continue to require and the obligations that are contained within the Customer Agreement. This amendment is nonsubstantive. 22 15 PO 00000 Fmt 4703 Market Access Rule As discussed above, Exchange members will continue to be required to comply with Supplementary Material to Rule 706 and the Market Access Rule. The Exchange believes that specifically enumerating the member’s responsibility to comply with the Market Access Rule within the Rule itself will provide members with additional guidance concerning the application of the Rule. This change is non-substantive as members are currently responsible for complying with the Market Access Rule. Elimination of Certain Contract Requirements Removing the requirements to submit and complete a Sponsored Customer Agreement and Addendum will remove impediments to and perfect the mechanism of a free and open market by aligning the Exchange’s sponsored access rules with the Nasdaq Sponsored Access Rules, which currently do not require additional agreements for their sponsored participants other than a Customer Agreement.23 The Exchange believes that its proposal would create equivalent sponsored access standards and requirements among the Affiliated Exchanges and also provide clarity to its members, which is beneficial to both investors and the public interest. While elimination of the Sponsored Customer Agreement requirement will also eliminate the Exchange’s contractual privity with the Sponsored Customer, the Exchange notes that any potential concerns to the loss of privity are mitigated by the Exchange’s ability to restrict the Sponsored Customer’s access to a port at any time it is warranted by the Sponsored Customer’s trading activity. As discussed above, connectivity to the Exchange must be requested by a member of the Exchange. Such connection requires approval by the Exchange, testing and other security features as well as information sharing with the Exchange by the member. In addition, Supplementary Material .01(b)(2) to Rule 706 delineates the terms of the required contractual relationship between the Sponsoring Member and the Sponsored Customer in the Customer Agreement, which remains in effect. The Exchange also believes that the Addendum is unnecessary in light of the fact that Sponsoring Members must request connectivity to the Exchange as well as enter into a Customer Agreement with the Sponsored Customer. Furthermore, as discussed above, the Exchange will 23 See NQX Rule 4615, BX Rule 4615 and PHLX Rule 1094. U.S.C. 78f(b)(5). Frm 00106 23519 Sfmt 4703 E:\FR\FM\21MYN1.SGM 21MYN1 23520 Federal Register / Vol. 83, No. 98 / Monday, May 21, 2018 / Notices require members to disclose the Sponsored Customer relationship as a condition to approving the member’s port request to provide Sponsored Access. Finally, as is the case with other Exchange rules, the Exchange examines for compliance with Supplementary Material to Rule 706 and may request information about any customer relationship which concerns the Exchange pursuant to Rule 1601. Clean-Up Changes The Exchange believes that the proposed changes to correct the two typos in subsections (vii) and (ix) of Supplementary Material .01(b)(2) to Rule 706 will add further clarification to the Exchange’s Rulebook and alleviate potential confusion as to the applicability of the Exchange’s rules, which will protect investors and the public interest. 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 because all members would be subject to the same sponsored access requirements, as discussed above. The proposed rule change is designed to provide greater harmonization among the sponsored access rules across the Affiliated Exchanges, resulting in more efficient regulatory compliance for common members, and is not intended to have any competitive effect. sradovich on DSK3GMQ082PROD with NOTICES 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 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 24 and subparagraph (f)(6) of Rule 19b–4 thereunder.25 24 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 25 17 VerDate Sep<11>2014 18:20 May 18, 2018 Jkt 244001 A proposed rule change filed pursuant to Rule 19b–4(f)(6) under the Act 26 normally does not become operative for 30 days after the date of its filing. However, Rule 19b–4(f)(6)(iii) 27 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Exchange represents that waiver of the operative delay would allow the Exchange to harmonize its sponsored access rule to the rules of the Nasdaq Exchanges.28 The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because the proposed rule change would simplify the regulatory requirements of members of the Exchange that are also participants on the Nasdaq Exchanges. Further, the Commission does not believe that the proposed rule change raises any new or novel issues. Accordingly, the Commission hereby waives the operative delay and designates the proposal operative upon filing.29 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 (https://www.sec.gov/ rules/sro.shtml); or 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. 26 17 CFR 240.19b–4(f)(6). 27 17 CFR 240.19b–4(f)(6)(iii). 28 See supra note 3. 29 For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). PO 00000 Frm 00107 Fmt 4703 Sfmt 9990 • Send an email to rule-comments@ sec.gov. Please include File Number SR– ISE–2018–44 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–2018–44. 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 website (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 website 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. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–ISE–2018–44 and should be submitted on or before June 11, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.30 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018–10705 Filed 5–18–18; 8:45 am] BILLING CODE 8011–01–P 30 17 E:\FR\FM\21MYN1.SGM CFR 200.30–3(a)(12). 21MYN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 83, Number 98 (Monday, May 21, 2018)]
[Notices]
[Pages 23517-23520]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-10705]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83238; File No. SR-ISE-2018-44]


Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend 
Supplementary Material to Rule 706 To Harmonize Its Sponsored Access 
Rules With Those of Its Affiliates

May 15, 2018.
    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 May 9, 2018, 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Supplementary Material to Rule 706 
to harmonize its sponsored access rules with those of its affiliates, 
The Nasdaq Stock Market LLC (``NQX''), Nasdaq BX, Inc. (``BX'') and 
Nasdaq PHLX LLC (``PHLX,'' and together with NQX and BX, ``Nasdaq 
Exchanges'').
    The text of the proposed rule change is available on the Exchange's 
website at https://ise.cchwallstreet.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 Supplementary 
Material to Rule 706, which contains the Exchange's sponsored access 
rules, to harmonize these rules with those of the Nasdaq Exchanges.\3\ 
On March 9, 2016, the Exchange and its affiliates, ISE Gemini, LLC 
(now, Nasdaq GEMX, LLC) (``GEMX'') and ISE Mercury, LLC (now, Nasdaq 
MRX, LLC) (``MRX'' and together with ISE and GEMX, ``ISE Exchanges''), 
were acquired by Nasdaq, Inc. (``Acquisition'').\4\ In the context of 
the Acquisition, the ISE Exchanges have been working to align certain 
of its rules and processes with those of the Nasdaq Exchanges in order 
to provide consistent standards across the six exchanges owned and 
operated by Nasdaq, Inc. (collectively, ``Affiliated Exchanges''). As 
part of this effort, the proposal set forth below harmonizes the 
Exchange's sponsored access rules with the Nasdaq Sponsored Access 
Rules in order to provide uniform standards and requirements for users 
of the Affiliated Exchanges.\5\
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    \3\ See NQX Rule 4615, BX Rule 4615 and PHLX Rule 1094 
(collectively, ``Nasdaq Sponsored Access Rules'').
    \4\ See Securities Exchange Act Release No. 78119 (June 21, 
2016), 81 FR 41611 (June 27, 2016) (SR-ISE-2016-11; SR-ISEGemini-
2016-05; SR-ISEMercury-2016-10).
    \5\ GEMX and MRX will each file similar rule change proposals 
with the Commission to harmonize their sponsored access rules with 
the Nasdaq Sponsored Access Rules.
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    In particular, the Exchange proposes to (1) define the term 
``Sponsored Access'' and ``Customer Agreement;'' (2) specify the 
requirement to comply with Rule 15c3-5 under the Act (``Market Access 
Rule''); (3) remove the requirements that each Sponsored Customer and 
each Sponsoring Member enter into certain agreements with the Exchange; 
and (4) make a number of related, non-substantive changes. Each change 
is discussed in detail as follows.
Defining Sponsored Access
    A Sponsored Customer is a non-member of the Exchange, such as an 
institutional investor, that gains access to the Exchange \6\ and 
trades under a Sponsoring Member's execution and clearing identity 
pursuant to a sponsorship arrangement between such non-member and 
Sponsoring Member, as set forth in Supplementary Material to Rule 706. 
The Exchange is proposing to define the term ``Sponsored Access'' to 
clarify the type of market access arrangement that is subject to this 
rule. Accordingly, the Exchange proposes to amend Supplementary 
Material .01(a) to Rule 706 to add the following definition: 
``Sponsored Access shall mean an arrangement whereby a Member permits 
its customers to enter orders into the System that bypass the Member's 
trading system and are routed directly to the Exchange, including 
routing through a service bureau or other third party technology 
provider.'' This definition mirrors the language set forth in the 
Nasdaq Sponsored Access Rules,\7\ and is derived from the Commission's 
description of Sponsored Access used in the release approving the 
Market Access Rule.\8\ The Exchange believes that defining Sponsored 
Access in Supplementary Material .01(a) to Rule 706 will provide market 
participants with greater clarity regarding Sponsored Access and their 
obligations with respect to this type of access arrangement.
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    \6\ For example, a broker-dealer may allow its customer--whether 
an institution such as a hedge fund, mutual fund, bank or insurance 
company, an individual, or another broker-dealer--to use the broker-
dealer's MPID, account or other mechanism or mnemonic used to 
identify a market participant for the purposes of electronically 
accessing the Exchange.
    \7\ See NQX Rule 4615(a), BX Rule 4615(a) and PHLX Rule 1094(a).
    \8\ The Market Access Rule, among other things, requires broker-
dealers providing others with access to an exchange or alternative 
trading system to establish, document, and maintain a system of risk 
management controls and supervisory procedures reasonably designed 
to manage the financial, regulatory, and other risks of providing 
such access. See Securities Exchange Act Release No. 63241 (November 
3, 2010), 75 FR 69792 (November 15, 2010).
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Defining Customer Agreement
    The Exchange proposes to amend Supplementary Material .01(b)(1) to 
Rule 706 to define the agreement that Sponsored Customers must enter 
into and maintain with one or more Sponsoring Members to establish 
proper relationship(s) and account(s) through which the Sponsored 
Customer may trade on the Exchange, as a ``Customer Agreement.'' \9\
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    \9\ The Nasdaq Sponsored Access Rules also similarly define 
``Customer Agreement.'' See NQX Rule 4615(b)(i), BX Rule 4615(b)(i) 
and PHLX Rule 1094(b)(i).
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Market Access Rule
    Pursuant to Supplementary Material .01(b)(2) to Rule 706, the 
Sponsoring Member is responsible for the activities

[[Page 23518]]

of the Sponsored Customer. Sponsored Customers are required to have 
procedures in place to comply with the Exchange's rules, and the 
Sponsoring Member takes responsibility for the Sponsored Customer's 
activity on the Exchange. Members may have multiple Sponsored Access 
relationships in place at a given time. The Exchange's examination 
program assesses compliance with the sponsored access rules set forth 
in Supplementary Material to Rule 706, among other rules.\10\ The 
Exchange now proposes to specifically enumerate in Supplementary 
Material .01(b)(2) to Rule 706 the member's obligation to comply with 
the Market Access Rule, with which Members are currently required to 
comply in connection with market access.\11\ The Exchange believes that 
specifying the obligation to comply with the Market Access Rule within 
the rule itself will reinforce that Supplementary Material to Rule 706 
presupposes member compliance with the Market Access Rule.
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    \10\ The Exchange has a Regulatory Services Agreement (``RSA'') 
with the Financial Industry Regulatory Authority (``FINRA'') to 
conduct regulatory examinations, among other obligations.
    \11\ See NQX Rule 4615(b)(ii)(A), BX Rule 4615(b)(ii)(A) and 
PHLX Rule 1094(b)(ii)(A) for consistent provisions.
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Elimination of Certain Contract Requirements
    The Exchange currently requires a Sponsored Customer Agreement 
between the Sponsored Customer and the Exchange,\12\ and a Sponsored 
Customer Addendum to the member access agreement (hereinafter, 
``Addendum'') that is provided to the Exchange by the Sponsoring 
Member.\13\ At this time, the Exchange proposes to remove the existing 
requirements to submit the Sponsored Customer Agreement and Addendum to 
the Exchange in order to align its sponsored access rules with the 
Nasdaq Sponsored Access Rules. The Exchange will continue to require a 
Customer Agreement between the Sponsored Customer and Sponsoring Member 
pursuant to Supplementary Material .01(b)(2) to Rule 706.\14\
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    \12\ See Supplementary Material .01(a) to Rule 706.
    \13\ See Supplementary Material .01(b)(2)(i) and (b)(3) to Rule 
706.
    \14\ The Nasdaq Sponsored Access Rules likewise only require a 
Customer Agreement between the sponsored participant and sponsoring 
member. See NQX Rule 4615(b)(i), BX Rule 4615(b)(i) and PHLX Rule 
1094(b)(i).
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    Today, only members may request connectivity to the Exchange by 
contacting Nasdaq Subscriber Services. A member may obtain separate 
ports for the purpose of providing Sponsored Access. If separate ports 
are requested by a member for the purpose of providing Sponsored 
Access, the member must request those ports from the Exchange and is 
responsible for the Sponsored Customer's activity on the Exchange.\15\ 
In all circumstances, the Exchange only permits members to request 
connectivity to the market and the member is responsible for all 
customer orders submitted through the member's port. In addition, such 
connection by the member requires approval by the Exchange for the 
purpose of testing as well as other relevant information sharing with 
the Exchange by the member to obtain a port. The Exchange is therefore 
aware of the member responsible for each of its ports. The Exchange may 
also request further information about a member's particular customer 
relationship, including the list of all Authorized Traders who may have 
access to the Exchange on behalf of the Sponsored Customer, as it deems 
necessary.\16\
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    \15\ In such cases, the Nasdaq Exchanges also require members to 
disclose the sponsored access arrangement as a condition to 
approving the member's port request. ISE will similarly require 
members requesting connectivity to ISE for the purpose of providing 
Sponsored Access to disclose sponsored access arrangements as a 
condition to approval.
    \16\ See Rule 1601.
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    The Exchange believes that completing and submitting the Sponsored 
Customer Agreement and Addendum is unnecessarily burdensome in light of 
the current structure in place at the Exchange. The Sponsored Customer 
Agreement requirement was intended to ensure that the Sponsored 
Customer was informed of its obligation to comply with the Exchange's 
Certificate of Formation, By-Laws, Rules and procedures, including the 
requirements in Supplementary Material .01(b)(2)(iii)-(ix).\17\ The 
agreement also provided the Exchange with contractual privity, which 
would no longer exist with the removal of the Sponsored Customer 
Agreement. The Exchange does not believe the loss of privity with the 
Sponsored Customer creates a concern as the Exchange has the ability to 
remove access to the port at any time if it determines that the 
activity of the Sponsored Customer warrants such removal. In addition, 
as discussed below, the Sponsored Customer will be informed of its 
obligations through the Customer Agreement that it executed with the 
Sponsoring Member. As noted above, the Exchange only permits its 
members to request connectivity to the Exchange's trading system, and 
members remain responsible for all trades submitted through such ports. 
Pursuant to Supplementary Material .01(b)(2)(vii) to Rule 706, the 
trading activity of a Sponsored Customer must be monitored by the 
Sponsoring Member for compliance with the terms of the Customer 
Agreement with the Sponsored Customer. Finally, Sponsoring Members 
continue to be obligated to comply with Supplementary Material .01(b) 
to Rule 706 and the Market Access Rule. As such, the Sponsoring Member 
is responsible for any and all actions taken by its Sponsored Customer 
and any person acting on behalf of or in the name of such Sponsored 
Customer.
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    \17\ These requirements include, among others, the Sponsored 
Customer's obligation to maintain, keep current and provide to the 
Sponsoring Member a list of Authorized Traders who may obtain access 
to the Exchange on behalf of the Sponsored Customer. In addition, 
the Sponsored Customer must take reasonable security precautions to 
prevent unauthorized use or access to the Exchange, and is 
responsible for having adequate procedures and controls in place to 
comply with ISE's rules.
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    The Addendum requirement was intended to notify the Exchange of the 
relationship between the Sponsoring Member and the Sponsored Customer, 
and to provide the Sponsoring Member's express acknowledgment of the 
Sponsoring Member's responsibility for the orders, executions and 
actions of its Sponsored Customer. However, as noted above, the 
Exchange may request additional information about a particular customer 
relationship as it deems necessary.\18\ The Exchange will also require 
that its members disclose the Sponsored Customer relationship as a 
condition for approving any ports requested for the purpose of 
providing Sponsored Access.\19\ Accordingly, the Exchange will continue 
to be notified of Sponsored Customer arrangements even with the removal 
of the Addendum. Furthermore, as discussed above, Sponsoring Members 
continue to be obligated to comply with Supplementary Material .01(b) 
to Rule 706 and the Market Access Rule, and are therefore responsible 
for any and all actions taken by its Sponsored Customer and any person 
acting on behalf of or in the name of such Sponsored Customer. The 
Exchange, through its RSA with FINRA, reviews member compliance with 
Supplementary Material to Rule 706, including compliance with the 
Market Access Rule.
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    \18\ See Rule 1601.
    \19\ See note 15 above.
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    Supplementary Material .01(b)(1) to Rule 706 requires that the 
Sponsored Customer and the Sponsoring Member maintain a Customer 
Agreement with the sponsorship provisions set forth in paragraph (2) to 
ensure compliance with

[[Page 23519]]

Exchange's rules and obligations related to security, among other 
things. Additionally, Supplementary Material .01(b)(2)(iv) and (v) 
require that the Customer Agreement include the Sponsored Customer's 
obligation to maintain, keep current and provide to the Sponsoring 
Member a list of Authorized Traders who have been granted access to the 
Exchange on behalf of the Sponsored Customer, and provide such 
Authorized Traders with appropriate training prior to any use or access 
to the Exchange. In addition, pursuant to the Customer Agreement 
provisions required by Rule 706, Supplementary Material .01(b)(vii), 
the Sponsored Customer is obligated to take reasonable security 
precautions to prevent unauthorized use or access to the Exchange, 
including unauthorized entry of information into the Exchange's System, 
or the information and data made available therein. Finally, the 
Customer Agreement must provide that the Sponsored Customer is 
responsible for any and all orders, trades and other messages and 
instructions entered, transmitted or received under identifiers, 
passwords and security codes of Authorized Traders, and for the trading 
and other consequences thereof, including granting unauthorized access 
to the Exchange.\20\ The contents and the requirement for a Customer 
Agreement are unchanged.
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    \20\ See Rule 706, Supplementary Material .01(b)(vii).
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Clean-Up Changes
    The Exchange proposes to correct two typographical errors in 
subsections (vii) and (ix) of Supplementary Material .01(b)(2) to Rule 
706. First in subsection (vii), the Exchange proposes to correct a typo 
by replacing ``of'' with ``or'' in the first sentence. The proposed 
sentence would therefore state ``Sponsored Customer shall take 
reasonable security precautions to prevent unauthorized use or access 
to the Exchange . . .''
    Second, subsection (ix) would be amended to correct a typo in the 
last portion of the first sentence. In particular, the phrase ``. . . 
Sponsored Customers access to and use of the Exchange'' should be ``. . 
. Sponsored Customer's access to and use of the Exchange.'' Both of 
these proposed changes are non-substantive clean-ups, and are intended 
to ensure that the rule text is as accurate and clear as possible.

2. Statutory Basis

    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\21\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\22\ 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. Overall, the proposed rule change is intended to align the 
Exchange's sponsored access rules in Supplementary Material to Rule 706 
with the Nasdaq Sponsored Access Rules, and is part of the Exchange's 
continued effort to promote efficiency and conformity of its processes 
with those of the Nasdaq Exchanges. Consistent rules and processes 
across the Affiliated Exchanges would in turn simplify the regulatory 
requirements for members of the Exchange that are also participants on 
the Nasdaq Exchanges. The Exchange believes that its proposal would 
provide greater harmonization among similar rules and procedures of the 
Affiliated Exchanges, resulting in greater uniformity and more 
efficient regulatory compliance. As such, the proposed rule change 
would foster cooperation and coordination with persons engaged in 
facilitating transactions in securities and would remove impediments to 
and perfect the mechanism of a free and open market and national market 
system.
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    \21\ 15 U.S.C. 78f(b).
    \22\ 15 U.S.C. 78f(b)(5).
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Defining Sponsored Access
    Adding a definition of Sponsored Access will assist market 
participants to understand the type of arrangements that are subject to 
Supplementary Material to Rule 706, and such clarity will serve to 
promote just and equitable principles of trade. The Exchange believes 
that adding the Sponsored Access definition will provide its members 
with additional guidance with respect to this Rule.
Defining Customer Agreement
    Defining the agreement that Sponsored Customers must enter into and 
maintain with one or more Sponsoring Members to establish proper 
relationship(s) and account(s) through which the Sponsored Customer may 
trade on the Exchange, as a ``Customer Agreement'' will also serve to 
provide members with clarity on the agreement that the Exchange will 
continue to require and the obligations that are contained within the 
Customer Agreement. This amendment is non-substantive.
Market Access Rule
    As discussed above, Exchange members will continue to be required 
to comply with Supplementary Material to Rule 706 and the Market Access 
Rule. The Exchange believes that specifically enumerating the member's 
responsibility to comply with the Market Access Rule within the Rule 
itself will provide members with additional guidance concerning the 
application of the Rule. This change is non-substantive as members are 
currently responsible for complying with the Market Access Rule.
Elimination of Certain Contract Requirements
    Removing the requirements to submit and complete a Sponsored 
Customer Agreement and Addendum will remove impediments to and perfect 
the mechanism of a free and open market by aligning the Exchange's 
sponsored access rules with the Nasdaq Sponsored Access Rules, which 
currently do not require additional agreements for their sponsored 
participants other than a Customer Agreement.\23\ The Exchange believes 
that its proposal would create equivalent sponsored access standards 
and requirements among the Affiliated Exchanges and also provide 
clarity to its members, which is beneficial to both investors and the 
public interest. While elimination of the Sponsored Customer Agreement 
requirement will also eliminate the Exchange's contractual privity with 
the Sponsored Customer, the Exchange notes that any potential concerns 
to the loss of privity are mitigated by the Exchange's ability to 
restrict the Sponsored Customer's access to a port at any time it is 
warranted by the Sponsored Customer's trading activity. As discussed 
above, connectivity to the Exchange must be requested by a member of 
the Exchange. Such connection requires approval by the Exchange, 
testing and other security features as well as information sharing with 
the Exchange by the member. In addition, Supplementary Material 
.01(b)(2) to Rule 706 delineates the terms of the required contractual 
relationship between the Sponsoring Member and the Sponsored Customer 
in the Customer Agreement, which remains in effect. The Exchange also 
believes that the Addendum is unnecessary in light of the fact that 
Sponsoring Members must request connectivity to the Exchange as well as 
enter into a Customer Agreement with the Sponsored Customer. 
Furthermore, as discussed above, the Exchange will

[[Page 23520]]

require members to disclose the Sponsored Customer relationship as a 
condition to approving the member's port request to provide Sponsored 
Access. Finally, as is the case with other Exchange rules, the Exchange 
examines for compliance with Supplementary Material to Rule 706 and may 
request information about any customer relationship which concerns the 
Exchange pursuant to Rule 1601.
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    \23\ See NQX Rule 4615, BX Rule 4615 and PHLX Rule 1094.
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Clean-Up Changes
    The Exchange believes that the proposed changes to correct the two 
typos in subsections (vii) and (ix) of Supplementary Material .01(b)(2) 
to Rule 706 will add further clarification to the Exchange's Rulebook 
and alleviate potential confusion as to the applicability of the 
Exchange's rules, which will protect investors and the public interest.

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 because all members would be 
subject to the same sponsored access requirements, as discussed above. 
The proposed rule change is designed to provide greater harmonization 
among the sponsored access rules across the Affiliated Exchanges, 
resulting in more efficient regulatory compliance for common members, 
and is not intended to have any competitive effect.

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 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 \24\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\25\
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    \24\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \25\ 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.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \26\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \27\ permits the 
Commission to designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has asked the Commission to waive the 30-day operative delay so that 
the proposal may become operative immediately upon filing. The Exchange 
represents that waiver of the operative delay would allow the Exchange 
to harmonize its sponsored access rule to the rules of the Nasdaq 
Exchanges.\28\ The Commission believes that waiving the 30-day 
operative delay is consistent with the protection of investors and the 
public interest because the proposed rule change would simplify the 
regulatory requirements of members of the Exchange that are also 
participants on the Nasdaq Exchanges. Further, the Commission does not 
believe that the proposed rule change raises any new or novel issues. 
Accordingly, the Commission hereby waives the operative delay and 
designates the proposal operative upon filing.\29\
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    \26\ 17 CFR 240.19b-4(f)(6).
    \27\ 17 CFR 240.19b-4(f)(6)(iii).
    \28\ See supra note 3.
    \29\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-ISE-2018-44 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-2018-44. 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 website (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 website 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. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-ISE-2018-44 and should be submitted on 
or before June 11, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\30\
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    \30\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-10705 Filed 5-18-18; 8:45 am]
 BILLING CODE 8011-01-P

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