Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Schedule of Fees at Section II, 42193-42195 [2018-17828]
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Federal Register / Vol. 83, No. 161 / Monday, August 20, 2018 / Notices
daltland on DSKBBV9HB2PROD with NOTICES
The website for the Fund will include
the prospectus for the Fund and
additional data relating to NAV and
other applicable quantitative
information. Moreover, prior to
commencement of trading, the Exchange
will inform its ETP Holders in an
Information Bulletin of the special
characteristics and risks associated with
trading the Shares. Trading in Shares of
the Fund will be halted if the circuit
breaker parameters in NYSE Arca Rule
7.12–E have been reached or because of
market conditions or for reasons that, in
the view of the Exchange, make trading
the Shares inadvisable. In addition, as
noted above, investors will have ready
access to information regarding the
Fund’s holdings, the IIV, the Fund’s
portfolio, and quotation and last sale
information for the Shares.
The proposed rule change is designed
to perfect the mechanism of a free and
open market and, in general, to protect
investors and the public interest in that
it will facilitate the listing and trading
of an additional type of exchange-traded
product that will enhance competition
among market participants, to the
benefit of investors and the marketplace.
As noted above, the Shares will be
subject to the existing trading
surveillances administered by the
Exchange or FINRA on behalf of the
Exchange, which are designed to detect
violations of Exchange rules and federal
securities laws applicable to trading on
the Exchange. The Exchange or FINRA,
on behalf of the Exchange, will
communicate as needed regarding
trading in the Shares and LEAPS with
other market and other entities that are
members of ISG, and the Exchange or
FINRA, on behalf of the Exchange, may
obtain trading information in the Shares
and LEAPS from such markets and other
entities. In addition, the Exchange may
obtain information regarding trading in
the Shares and LEAPS from markets and
other entities that are members of ISG or
with which the Exchange has in place
a comprehensive surveillance sharing
agreement. In addition, as noted above,
investors will have ready access to
information regarding the Fund’s
holdings, the IIV, and quotation and last
sale information for the Shares.
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 that is not
necessary or appropriate in furtherance
of the purpose of the Act. The Exchange
notes that the proposed rule change will
facilitate the listing and trading of an
additional type of Units that can hold
options contracts and that will enhance
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19:04 Aug 17, 2018
Jkt 244001
competition among market participants,
to the benefit of investors and the
marketplace.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period
up to 90 days (i) as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding or (ii) as to which
the self-regulatory organization
consents, the Commission will:
(A) By order approve or disapprove
the proposed rule change, or
(B) institute proceedings to determine
whether the proposed rule change
should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change, as modified by Amendment No.
1, is consistent with the Act. Comments
may be submitted by any of the
following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSEArca–2018–57 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–NYSEArca–2018–57. 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
PO 00000
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42193
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 such
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–NYSEArca–2018–57, and
should be submitted on or before
September 10, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.27
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2018–17832 Filed 8–17–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–83841; File No. SR–ISE–
2018–72]
Self-Regulatory Organizations; Nasdaq
ISE, LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend the Schedule
of Fees at Section II
August 14, 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 July 30,
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.
27 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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42194
Federal Register / Vol. 83, No. 161 / Monday, August 20, 2018 / Notices
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
Schedule of Fees at Section II entitled
‘‘Complex Orders Fees and Rebates.’’
While the changes proposed herein
are effective upon filing, the Exchange
has designated the amendments become
operative on August 1, 2018.
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
Tier
Tier
Tier
Tier
Tier
Tier
Tier
Tier
Tier
1
2
3
4
5
6
7
8
9
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
..............................
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
at Section II entitled ‘‘Complex Orders
Fees and Rebates.’’ Specifically, the
Exchange is proposing to lower the
qualifying Complex Order Volume in
Tiers 4–7, as explained in more detail
below, to attract a greater amount of
Priority Customer 3 Complex Order flow
on ISE by paying the same rebates, but
requiring less qualifying volume in
those tiers.
Currently, the Exchange has a pricing
structure in place for Complex Orders
that provides rebates to Priority
Customer Complex Orders in order to
encourage Members to bring that order
flow to the Exchange. Specifically,
Priority Customer Complex Orders are
provided rebates in Select Symbols 4
and Non-Select Symbols.5 Rebates are
provided per contract per leg if the
order trades with non-Priority Customer
orders in the Complex Order Book or
trades with quotes and orders on the
regular order book. Customer Complex
Order rebates are paid a rebate based on
a percentage of industry volume.
Priority Customer Complex Tiers are
based on Total Affiliated Member
Complex Order Volume (excluding
Crossing Orders and Responses to
Crossing Orders) and are calculated as a
percentage of Customer Total
Consolidated Volume. All Complex
Order volume executed on the
Exchange, including volume executed
by Affiliated Members, is included in
the volume calculation, except for
volume executed as Crossing Orders and
Responses to Crossing Orders.6
Currently, there are nine Priority
Customer Complex Order Tiers based on
the percentage of industry volume
calculation:
0.000%–0.200% ..........................................................................................................
Above 0.200%–0.400% ...............................................................................................
Above 0.400%–0.600% ...............................................................................................
Above 0.600%–0.800% ...............................................................................................
Above 0.800%–1.000% ...............................................................................................
Above 1.000%–1.600% ...............................................................................................
Above 1.600%–2.000% ...............................................................................................
Above 2.000%–3.250% ...............................................................................................
Above 3.250% .............................................................................................................
($0.25)
(0.30)
(0.35)
(0.40)
(0.45)
(0.46)
(0.48)
(0.50)
(0.50)
($0.40)
(0.55)
(0.70)
(0.75)
(0.80)
(0.80)
(0.80)
(0.85)
(0.85)
daltland on DSKBBV9HB2PROD with NOTICES
At this time the Exchange proposes to
amend the Total Affiliated Member
Complex Order Volume, which
excludes Crossing Orders and
Responses to Crossing Orders, that are
calculated as a percentage of Customer
Total Consolidated Volume in Tiers 4–
7. Today, Tier 4 requires Total Affiliated
Member Complex Order Volume
between 0.600% and 0.800%. The
Exchange is amending Tier 4 to require
Total Affiliated Member Complex Order
Volume between 0.600% and 0.750%.
Today, Tier 5 requires Total Affiliated
Member Complex Order Volume
between 0.800% and 1.000%. The
Exchange is amending Tier 5 to require
Total Affiliated Member Complex Order
Volume between 0.750% and 1.000%.
So, today a portion of Complex Order
volume which qualified for Tier 4
volume would qualify as Tier 5 volume
pursuant to this proposal. Today, Tier 6
requires Total Affiliated Member
Complex Order Volume between
1.000%–1.600%. The Exchange is
amending Tier 6 to require Total
Affiliated Member Complex Order
Volume between 1.000%–1.500%. So,
today a portion of Complex Order
volume which qualified as Tier 5
volume would qualify for Tier 6 volume
pursuant to this proposal. Today, Tier 7
requires Total Affiliated Member
Complex Order Volume between
1.600%–2.000%. The Exchange is
amending Tier 7 to require Total
Affiliated Member Complex Order
Volume between 1.500%–2.000%. So,
today a portion of Complex Order
volume which qualified as Tier 6
volume would qualify as Tier 7 volume
pursuant to this proposal. Members may
earn greater rebates in Select and NonSelect Symbols simply by sending in
certain of the same volume in Tiers 4–
7 today, provided it would qualify for
the higher tier pursuant to this proposal
which lowers volume in Tier 4–7. No
changes are proposed to Tier 1–3 or
Tiers 8 and 9. No changes are proposed
to any corresponding rebates in either
Select or Non-Select Symbols.
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). Unless otherwise noted, when used in
this Schedule of Fees the term ‘‘Priority Customer’’
includes ‘‘Retail’’ as defined below.
4 ‘‘Select Symbols’’ are options overlying all
symbols listed on the Nasdaq ISE that are in the
Penny Pilot Program.
5 ‘‘Non-Select Symbols’’ are options overlying all
symbols excluding Select Symbols. For Non-Select
Symbols, no rebates will be paid for orders in NDX,
NQX and MNX
6 An ‘‘Affiliated Member’’ is a Member that shares
at least 75% common ownership with a particular
Member as reflected on the Member’s Form BD,
Schedule A. Furthermore, ‘‘Customer Total
Consolidated Volume’’ means the total national
volume cleared at The Options Clearing
Corporation in the Customer range in equity and
ETF options in that month.
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2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
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Federal Register / Vol. 83, No. 161 / Monday, August 20, 2018 / Notices
daltland on DSKBBV9HB2PROD with NOTICES
of the Act,7 in general, and furthers the
objectives of Sections 6(b)(4) and 6(b)(5)
of the Act,8 in particular, in that it
provides for the equitable allocation of
reasonable dues, fees, and other charges
among members and issuers and other
persons using any facility, and is not
designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers.
The Exchange believes that the
proposed changes to the Priority
Customer Complex Order Tiers are
reasonable as these changes are
designed to incentivize Members to
trade Complex Orders, and, in particular
Priority Customer Complex Orders, on
the Exchange. The Exchange’s proposal,
which lowers the qualifying Total
Affiliated Member Complex Order
Volume in Tiers 4–7, is intended to
encourage Members to submit the same
or a greater amount of Priority Customer
Complex Order flow to obtain a higher
rebate.
In addition, the Exchange believes
that the proposed changes are equitable
and not unfairly discriminatory as these
changes are designed to encourage
Members to transact more Complex
Order flow, and in particular, Priority
Customer Complex Orders, on ISE. The
Exchange does not believe that it is
unfairly discriminatory to provide
rebates only to Priority Customer
Complex Orders as this type of order
flow enhances liquidity on the
Exchange for the benefit of all market
participants by providing more trading
opportunities, which attracts Market
Makers. The Exchange believes that the
proposed changes to the Priority
Customer Complex Tiers will benefit all
market participants that trade on ISE by
increasing their opportunities to trade
and earn rebates.
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 believes that the proposed
changes will enhance both inter-market
and intra-market competition by
increasing opportunities for Members to
obtain rebates by transacting Priority
Customer Complex Orders. The
Exchange believes that the proposed
fees and rebates remain competitive
with those on other options markets,
and will continue to attract order flow
to the Exchange, thereby encouraging
additional volume and liquidity to the
7 15
8 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4) and (5).
VerDate Sep<11>2014
19:04 Aug 17, 2018
benefit of all market participants.
Priority Customer Complex Order flow
enhances liquidity on the Exchange for
the benefit of all market participants by
providing more trading opportunities,
which attracts Market Makers.
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 9 and Rule 19b–
4(f)(2) 10 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:
All submissions should refer to File
Number SR–ISE–2018–72. 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–2018–72 and should be
submitted on or before September 10,
2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2018–17828 Filed 8–17–18; 8:45 am]
BILLING CODE 8011–01–P
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
ISE–2018–72 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
10 17
Jkt 244001
Commission, 100 F Street NE,
Washington, DC 20549–1090.
Electronic Comments
9 15
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CFR 200.30–3(a)(12).
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]]>Agencies
[Federal Register Volume 83, Number 161 (Monday, August 20, 2018)]
[Notices]
[Pages 42193-42195]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-17828]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-83841; File No. SR-ISE-2018-72]
Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend the
Schedule of Fees at Section II
August 14, 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 July 30, 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
[[Page 42194]]
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the Schedule of Fees at Section II
entitled ``Complex Orders Fees and Rebates.''
While the changes proposed herein are effective upon filing, the
Exchange has designated the amendments become operative on August 1,
2018.
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 the Schedule of
Fees at Section II entitled ``Complex Orders Fees and Rebates.''
Specifically, the Exchange is proposing to lower the qualifying Complex
Order Volume in Tiers 4-7, as explained in more detail below, to
attract a greater amount of Priority Customer \3\ Complex Order flow on
ISE by paying the same rebates, but requiring less qualifying volume in
those tiers.
---------------------------------------------------------------------------
\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). Unless otherwise noted, when used in this Schedule of
Fees the term ``Priority Customer'' includes ``Retail'' as defined
below.
---------------------------------------------------------------------------
Currently, the Exchange has a pricing structure in place for
Complex Orders that provides rebates to Priority Customer Complex
Orders in order to encourage Members to bring that order flow to the
Exchange. Specifically, Priority Customer Complex Orders are provided
rebates in Select Symbols \4\ and Non-Select Symbols.\5\ Rebates are
provided per contract per leg if the order trades with non-Priority
Customer orders in the Complex Order Book or trades with quotes and
orders on the regular order book. Customer Complex Order rebates are
paid a rebate based on a percentage of industry volume. Priority
Customer Complex Tiers are based on Total Affiliated Member Complex
Order Volume (excluding Crossing Orders and Responses to Crossing
Orders) and are calculated as a percentage of Customer Total
Consolidated Volume. All Complex Order volume executed on the Exchange,
including volume executed by Affiliated Members, is included in the
volume calculation, except for volume executed as Crossing Orders and
Responses to Crossing Orders.\6\ Currently, there are nine Priority
Customer Complex Order Tiers based on the percentage of industry volume
calculation:
---------------------------------------------------------------------------
\4\ ``Select Symbols'' are options overlying all symbols listed
on the Nasdaq ISE that are in the Penny Pilot Program.
\5\ ``Non-Select Symbols'' are options overlying all symbols
excluding Select Symbols. For Non-Select Symbols, no rebates will be
paid for orders in NDX, NQX and MNX
\6\ An ``Affiliated Member'' is a Member that shares at least
75% common ownership with a particular Member as reflected on the
Member's Form BD, Schedule A. Furthermore, ``Customer Total
Consolidated Volume'' means the total national volume cleared at The
Options Clearing Corporation in the Customer range in equity and ETF
options in that month.
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Tier 1..................................... 0.000%-0.200%...................... ($0.25) ($0.40)
Tier 2..................................... Above 0.200%-0.400%................ (0.30) (0.55)
Tier 3..................................... Above 0.400%-0.600%................ (0.35) (0.70)
Tier 4..................................... Above 0.600%-0.800%................ (0.40) (0.75)
Tier 5..................................... Above 0.800%-1.000%................ (0.45) (0.80)
Tier 6..................................... Above 1.000%-1.600%................ (0.46) (0.80)
Tier 7..................................... Above 1.600%-2.000%................ (0.48) (0.80)
Tier 8..................................... Above 2.000%-3.250%................ (0.50) (0.85)
Tier 9..................................... Above 3.250%....................... (0.50) (0.85)
----------------------------------------------------------------------------------------------------------------
At this time the Exchange proposes to amend the Total Affiliated
Member Complex Order Volume, which excludes Crossing Orders and
Responses to Crossing Orders, that are calculated as a percentage of
Customer Total Consolidated Volume in Tiers 4-7. Today, Tier 4 requires
Total Affiliated Member Complex Order Volume between 0.600% and 0.800%.
The Exchange is amending Tier 4 to require Total Affiliated Member
Complex Order Volume between 0.600% and 0.750%. Today, Tier 5 requires
Total Affiliated Member Complex Order Volume between 0.800% and 1.000%.
The Exchange is amending Tier 5 to require Total Affiliated Member
Complex Order Volume between 0.750% and 1.000%. So, today a portion of
Complex Order volume which qualified for Tier 4 volume would qualify as
Tier 5 volume pursuant to this proposal. Today, Tier 6 requires Total
Affiliated Member Complex Order Volume between 1.000%-1.600%. The
Exchange is amending Tier 6 to require Total Affiliated Member Complex
Order Volume between 1.000%-1.500%. So, today a portion of Complex
Order volume which qualified as Tier 5 volume would qualify for Tier 6
volume pursuant to this proposal. Today, Tier 7 requires Total
Affiliated Member Complex Order Volume between 1.600%-2.000%. The
Exchange is amending Tier 7 to require Total Affiliated Member Complex
Order Volume between 1.500%-2.000%. So, today a portion of Complex
Order volume which qualified as Tier 6 volume would qualify as Tier 7
volume pursuant to this proposal. Members may earn greater rebates in
Select and Non-Select Symbols simply by sending in certain of the same
volume in Tiers 4-7 today, provided it would qualify for the higher
tier pursuant to this proposal which lowers volume in Tier 4-7. No
changes are proposed to Tier 1-3 or Tiers 8 and 9. No changes are
proposed to any corresponding rebates in either Select or Non-Select
Symbols.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b)
[[Page 42195]]
of the Act,\7\ in general, and furthers the objectives of Sections
6(b)(4) and 6(b)(5) of the Act,\8\ in particular, in that it provides
for the equitable allocation of reasonable dues, fees, and other
charges among members and issuers and other persons using any facility,
and is not designed to permit unfair discrimination between customers,
issuers, brokers, or dealers.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
The Exchange believes that the proposed changes to the Priority
Customer Complex Order Tiers are reasonable as these changes are
designed to incentivize Members to trade Complex Orders, and, in
particular Priority Customer Complex Orders, on the Exchange. The
Exchange's proposal, which lowers the qualifying Total Affiliated
Member Complex Order Volume in Tiers 4-7, is intended to encourage
Members to submit the same or a greater amount of Priority Customer
Complex Order flow to obtain a higher rebate.
In addition, the Exchange believes that the proposed changes are
equitable and not unfairly discriminatory as these changes are designed
to encourage Members to transact more Complex Order flow, and in
particular, Priority Customer Complex Orders, on ISE. The Exchange does
not believe that it is unfairly discriminatory to provide rebates only
to Priority Customer Complex Orders as this type of order flow enhances
liquidity on the Exchange for the benefit of all market participants by
providing more trading opportunities, which attracts Market Makers. The
Exchange believes that the proposed changes to the Priority Customer
Complex Tiers will benefit all market participants that trade on ISE by
increasing their opportunities to trade and earn rebates.
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 believes that the
proposed changes will enhance both inter-market and intra-market
competition by increasing opportunities for Members to obtain rebates
by transacting Priority Customer Complex Orders. The Exchange believes
that the proposed fees and rebates remain competitive with those on
other options markets, and will continue to attract order flow to the
Exchange, thereby encouraging additional volume and liquidity to the
benefit of all market participants. Priority Customer Complex Order
flow enhances liquidity on the Exchange for the benefit of all market
participants by providing more trading opportunities, which attracts
Market Makers.
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 \9\ and Rule 19b-4(f)(2) \10\ thereunder. At
any time within 60 days of the filing of the proposed rule change, the
Commission summarily may temporarily suspend such rule change if it
appears to the Commission that such action is: (i) Necessary or
appropriate in the public interest; (ii) for the protection of
investors; or (iii) otherwise in furtherance of the purposes of the
Act. If the Commission takes such action, the Commission shall
institute proceedings to determine whether the proposed rule should be
approved or disapproved.
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\9\ 15 U.S.C. 78s(b)(3)(A)(ii).
\10\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-ISE-2018-72 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-2018-72. 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-2018-72 and should be submitted on
or before September 10, 2018.
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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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2018-17828 Filed 8-17-18; 8:45 am]
BILLING CODE 8011-01-P
