Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Supplementary Material .02 to Rule 715 Regarding Cancel and Replace Orders, 63922-63924 [2018-26836]
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Federal Register / Vol. 83, No. 238 / Wednesday, December 12, 2018 / Notices
not route’’ from existing paragraph
(a)(3)(D) to paragraph (a)(2); adding new
paragraph (a)(3) to provide that ‘‘[a]
Market Maker may designate a quote as
follows’’; and re-numbering the
remainder of the paragraph to account
for such changes.52 In addition, the
Exchange proposes to renumber the
description of an MMLO as paragraph
(a)(3)(A), and amend the rule text to
provide that on arrival, a quotation
designated MMLO will trade with
displayed interest in the Consolidated
Book only.53 Once resting, the MMLO
designation no longer applies and such
quotation is eligible to trade with
displayed and undisplayed interest.54
Implementation
The Exchange states that it will
announce by Trader Update the
implementation date of the proposed
rule change within 90 days of the
effective date of this proposed rule
change.55
III. Discussion and Commission’s
Findings
After careful review, the Commission
finds that the proposed rule change, as
modified by Amendment No. 1, is
consistent with the requirements of the
Act,56 and the rules and regulations
thereunder applicable to a national
securities exchange.57 In particular, the
Commission finds that the proposed
rule change is consistent with Section
6(b)(5) of the Act,58 which requires,
among other things, that the rules of a
national securities exchange be
designed to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating transactions in securities,
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, and not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
The Commission believes that by
providing market participants with two
new order types that build on the
existing ALO and PNP Order
functionality to allow for repricing
instead of cancellation or rejection of
orders under certain circumstances, the
proposed rule change could give market
amozie on DSK3GDR082PROD with NOTICES1
52 See
proposed Rule 6.37A–O(a)(2)–(3).
53 See proposed Rule 6.37A–O(a)(3)(A).
54 See id.
55 See Notice, supra note 3, at 53697.
56 15 U.S.C. 78(f).
57 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
58 15 U.S.C. 78f(b)(5).
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participants greater flexibility and
control over the circumstances under
which their orders interact with contra
side-interest on the Exchange. By
increasing the opportunities for
execution at multiple price points and
encouraging the provision of greater
displayed liquidity to the market, the
proposal is reasonably designed to
facilitate the mechanism of price
discovery. The Commission also
believes that ranking a repriced RALO
or repriced RPNP behind other interest
already eligible to trade at a price, as
well as ranking such orders that
simultaneously reprice to the same price
by time of original order entry, is
reasonably designed to preserve the
principles of priority and therefore
promote just and equitable principles of
trade. Finally, the Commission notes
other options exchanges offer similar
order types as proposed by the
Exchange.59
The Commission notes that the
proposal to add the two new quotation
designations is designed to provide
Market Makers with the same
functionality for their quotations as are
proposed for orders entered on the
Exchange. The proposed quotation
designations are similar to how the
proposed RALO and RPNP will function
and may enable Market Makers to exert
greater control over how their quotes
would interact with contra-side
liquidity, while affording additional
opportunities to provide liquidity to the
market. The Commission notes that,
absent the proposed repricing
functionality associated with the
MMALO and MMRP, a Market Maker
quote that locks or crosses interest on
the Exchange or an away market will
reject or cancel. In the case of MMALOs,
the proposal is reasonably designed to
promote the display of liquidity because
such quotations would be displayed at
the next-best aggressive price instead of
being cancelled. The Commission
believes that the proposal will also
ensure that an MMALO will always add
liquidity as maker, rather than remove
liquidity as taker, while ensuring that
MMALOs priced too far through the
contra-side interest on the Exchange or
the NBBO will be rejected. As such, the
proposed MMALO could assist Market
Makers in maintaining a fair and orderly
market and encourage Market Makers to
provide displayed liquidity to the
market, thus contributing to price
discovery. In the case of MMRPs, the
proposal may afford Market Makers
59 See Notice, supra note 3, at 53697, n.39 (citing
Nasdaq Options Market Chapter VI Trading
Systems, Sec. 1(e)(11) and Nasdaq PHLX LLC Rule
1080(m)(iv)(A)).
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more certainty when providing
liquidity, while ensuring that MMRPs
priced too far through the contra-side
NBBO will cancel or reject after trading
with any eligible interest on the
Exchange. The Commission believes
that ranking the repriced MMALO or
repriced MMRP by time priority behind
other interest already available to trade
at a price preserves principles of
priority and therefore would promote
just and equitable principles of trade.
Further, the Commission believes that
the proposed quotation designations are
reasonably designed to provide Market
Makers with a greater level of
determinism, in terms of managing their
exposure, and thus could encourage
more aggressive liquidity provision,
resulting in more trading opportunities
and tighter spreads. This may help
improve the mechanism of price
discovery. Moreover, the Commission
notes that other options exchanges have
adopted quote types designed to
strengthen market making.60
For the reasons discussed above, the
Commission believes that the proposed
rule change, as modified by Amendment
No. 1, is consistent with the Act.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,61 that the
proposed rule change (SR–NYSEArca–
2018–74), as modified by Amendment
No. 1, be, and it hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.62
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–26833 Filed 12–11–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–84741; File No. SR–ISE–
2018–97]
Self-Regulatory Organizations; Nasdaq
ISE, LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend
Supplementary Material .02 to Rule 715
Regarding Cancel and Replace Orders
December 6, 2018.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
60 See Notice, supra note 3, at 53698, n.45 (citing
Miami International Securities Exchange, LLC Rule
515(d) and BOX Options Exchange LLC
IM–8050–3).
61 15 U.S.C. 78s(b)(2).
62 17 CFR 200.30–3(a)(12).
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Federal Register / Vol. 83, No. 238 / Wednesday, December 12, 2018 / Notices
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on November
29, 2018 Nasdaq ISE, LLC (‘‘ISE’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III, below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Supplementary Material .02 to Rule 715
regarding Cancel and Replace Orders.
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
amozie on DSK3GDR082PROD with NOTICES1
1. Purpose
The Exchange proposes to amend
Supplementary Material .02 to Rule 715
regarding Cancel and Replace Orders to:
(i) Correct an inconsistency between the
Exchange’s rule text and the operation
of the System 3 by removing the
reference to Rule 710, (ii) update rule
cross-references, and (iii) make other
non-substantive, technical changes.
Today, a member has the option of
either sending in a cancel order and
then separately sending in a new order
which serves as a replacement of the
original order (two separate messages),
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 The term ‘‘System’’ means the electronic system
operated by the Exchange that receives and
disseminates quotes, executes orders and reports
transactions. See Rule 100(a)(63).
2 17
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or sending a single cancel and replace
order in one message (i.e., a Cancel and
Replace Order). Specifically,
Supplementary Material .02 to Rule 715
defines a Cancel and Replace Order as
a single message for the immediate
cancellation of a previously received
order and the replacement of that order
with a new order.4 The replacement
portion of the Cancel and Replace Order
is treated as a new order and therefore
goes through price or other reasonability
checks as a result of being viewed as
such.5 If the replacement portion of a
Cancel and Replace Order does not
satisfy the System’s price or other
reasonability checks, the existing order
will be cancelled and not replaced.6 The
Exchange notes, however, that when it
initially codified Cancel and Replace
Orders in its Rulebook as part of SR–
ISE–2017–03, it inadvertently included
Rule 710 within the list of price
reasonability checks. In SR–ISE–2017–
03, the Exchange explained that the
System conducts price or other
reasonability checks for Cancel and
Replace Orders to validate such orders
against the current market conditions
prior to proceeding with the request to
modify the order.7 Rule 710, which
relates to the minimum price variations
applicable to options series traded on
the Exchange, does not involve the
System considering the current market
at the time of the Cancel and Replace
Order, and an incoming Cancel and
Replace Order that fails the minimum
price variation checks in Rule 710
would not result in the existing order
being cancelled and not replaced.8 The
Exchange therefore proposes to remove
the reference to Rule 710 from the list
of price or other reasonability checks to
conform its rule text to the System.
The Exchange also proposes to update
the various rule references related to the
price reasonability checks within this
4 If the previously placed order is already filled
partially or in its entirety, the replacement order is
automatically cancelled or reduced by the number
of contracts that were executed. See Supplementary
Material .02 to Rule 715.
5 Supplementary Material .02 to Rule 715 further
provides how the replacement portion may retain
the priority of the original order, provided certain
specified conditions are met. The manner in which
the Exchange treats priority with respect to Cancel
and Replace Orders is not changing under this
proposal.
6 See Securities Exchange Act Release No. 80432
(April 11, 2017), 82 FR 18191 (April 17, 2017) (SR–
ISE–2017–03) (memorializing Cancel and Replace
Orders in Supplementary Material .02 to Rule 715
as part of the Exchange’s system migration to INET
technology).
7 Id.
8 In this instance, the System would simply reject
the cancel and replace message as an invalid
instruction. The Exchange notes that the previous
T7 system likewise treated Cancel and Replace
Orders in this manner.
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63923
provision to refer to the current rules.9
Finally, the Exchange proposes other
non-substantive, technical changes
within Supplementary Material .02 to
Rule 715 to capitalize ‘‘Cancel and
Replace Order’’ for consistency, and to
capitalize ‘‘System,’’ which is a defined
term.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,10 in general, and furthers the
objectives of Section 6(b)(5) of the Act,11
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. The
Exchange’s proposal corrects an
inadvertent error in Supplementary
Material .02 to Rule 715, which
currently includes Rule 710 within the
list of price or other reasonability
checks. As discussed above, including
Rule 710 is inconsistent with the
operation of the Exchange’s System
because an incoming Cancel and
Replace Order which fails the minimum
price variation checks in Rule 710 does
not result in the existing order getting
cancelled and not replaced. This rule
change would amend the rule text to
reflect ISE’s current practice, and
should avoid potential confusion about
how the System processes Cancel and
Replace Orders today.12 Furthermore,
the Exchange’s proposal to update the
rule references and make other nonsubstantive technical changes, as further
described above, will bring greater
transparency to its Rulebook thereby
protecting investors and the public
interest by reducing potential for
investor confusion.
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
9 In particular, Rules 711(c) and 714(b)(2) are now
Rules 714(b)(1)(B) and 714(b)(1)(A), respectively,
pursuant to SR–ISE–2018–80. See Securities
Exchange Act Release No. 84237 (September 20,
2018), 83 FR 48660 (September 26, 2018). Rule
722(b)(1) is now Rule 722(c)(1) pursuant to SR–ISE–
2018–56. See Securities Exchange Act Release No.
84373 (October 5, 2018), 83 FR 51730 (October 12,
2018). Finally, paragraphs (b), (c), and (d) of
Supplementary Material .07 to Rule 722 are now
paragraphs (a)(1)(A), (b), and (c)(1), respectively,
pursuant to SR–ISE–2018–55. See Securities
Exchange Act Release No. 83464 (June 19, 2018), 83
FR 29583 (June 25, 2018).
10 15 U.S.C. 78f(b).
11 15 U.S.C. 78f(b)(5).
12 See note 8 above.
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Federal Register / Vol. 83, No. 238 / Wednesday, December 12, 2018 / Notices
of the purposes of the Act. All of the
proposed changes are intended to bring
greater transparency to the Exchange’s
Rulebook, and therefore does not
unduly burden competition.
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 13 and
subparagraph (f)(6) of Rule 19b–4
thereunder.14
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. 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
amozie on DSK3GDR082PROD with NOTICES1
• 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–2018–97 on the subject line.
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
the proposed rule change at least five business days
prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Exchange has satisfied this
requirement.
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–2018–97. 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–2018–97 and should be
submitted on or before January 2, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–26836 Filed 12–11–18; 8:45 am]
BILLING CODE 8011–01–P
13 15
14 17
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–84742; File No. SR–
NYSEAMER–2018–53]
Self-Regulatory Organizations; NYSE
American LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend NYSE
American Rule 5.1E(a)(2)
December 6, 2018.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that on November
27, 2018, NYSE American LLC
(‘‘Exchange’’ or ‘‘NYSE American’’) 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 self-regulatory
organization. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
NYSE American Rule 5.1E(a)(2) to
remove the requirement that the
Exchange file with the Securities and
Exchange Commission (the
‘‘Commission’’) a Form 19b–4(e) for
each ‘‘new derivative securities
product’’ that will commence trading on
the Exchange pursuant to unlisted
trading privileges. The proposed rule
change is available on the Exchange’s
website at www.nyse.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
self-regulatory organization 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 those 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 parts of such
statements.
1 15
U.S.C.78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
15 17
PO 00000
CFR 200.30–3(a)(12).
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]]>Agencies
[Federal Register Volume 83, Number 238 (Wednesday, December 12, 2018)]
[Notices]
[Pages 63922-63924]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-26836]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-84741; File No. SR-ISE-2018-97]
Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend
Supplementary Material .02 to Rule 715 Regarding Cancel and Replace
Orders
December 6, 2018.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
[[Page 63923]]
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on November 29, 2018 Nasdaq ISE, LLC (``ISE'' or ``Exchange'') filed
with the Securities and Exchange Commission (``SEC'' or ``Commission'')
the proposed rule change as described in Items I, II, and III, below,
which Items have been prepared by the Exchange. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Supplementary Material .02 to Rule
715 regarding Cancel and Replace Orders.
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 Exchange proposes to amend Supplementary Material .02 to Rule
715 regarding Cancel and Replace Orders to: (i) Correct an
inconsistency between the Exchange's rule text and the operation of the
System \3\ by removing the reference to Rule 710, (ii) update rule
cross-references, and (iii) make other non-substantive, technical
changes.
---------------------------------------------------------------------------
\3\ The term ``System'' means the electronic system operated by
the Exchange that receives and disseminates quotes, executes orders
and reports transactions. See Rule 100(a)(63).
---------------------------------------------------------------------------
Today, a member has the option of either sending in a cancel order
and then separately sending in a new order which serves as a
replacement of the original order (two separate messages), or sending a
single cancel and replace order in one message (i.e., a Cancel and
Replace Order). Specifically, Supplementary Material .02 to Rule 715
defines a Cancel and Replace Order as a single message for the
immediate cancellation of a previously received order and the
replacement of that order with a new order.\4\ The replacement portion
of the Cancel and Replace Order is treated as a new order and therefore
goes through price or other reasonability checks as a result of being
viewed as such.\5\ If the replacement portion of a Cancel and Replace
Order does not satisfy the System's price or other reasonability
checks, the existing order will be cancelled and not replaced.\6\ The
Exchange notes, however, that when it initially codified Cancel and
Replace Orders in its Rulebook as part of SR-ISE-2017-03, it
inadvertently included Rule 710 within the list of price reasonability
checks. In SR-ISE-2017-03, the Exchange explained that the System
conducts price or other reasonability checks for Cancel and Replace
Orders to validate such orders against the current market conditions
prior to proceeding with the request to modify the order.\7\ Rule 710,
which relates to the minimum price variations applicable to options
series traded on the Exchange, does not involve the System considering
the current market at the time of the Cancel and Replace Order, and an
incoming Cancel and Replace Order that fails the minimum price
variation checks in Rule 710 would not result in the existing order
being cancelled and not replaced.\8\ The Exchange therefore proposes to
remove the reference to Rule 710 from the list of price or other
reasonability checks to conform its rule text to the System.
---------------------------------------------------------------------------
\4\ If the previously placed order is already filled partially
or in its entirety, the replacement order is automatically cancelled
or reduced by the number of contracts that were executed. See
Supplementary Material .02 to Rule 715.
\5\ Supplementary Material .02 to Rule 715 further provides how
the replacement portion may retain the priority of the original
order, provided certain specified conditions are met. The manner in
which the Exchange treats priority with respect to Cancel and
Replace Orders is not changing under this proposal.
\6\ See Securities Exchange Act Release No. 80432 (April 11,
2017), 82 FR 18191 (April 17, 2017) (SR-ISE-2017-03) (memorializing
Cancel and Replace Orders in Supplementary Material .02 to Rule 715
as part of the Exchange's system migration to INET technology).
\7\ Id.
\8\ In this instance, the System would simply reject the cancel
and replace message as an invalid instruction. The Exchange notes
that the previous T7 system likewise treated Cancel and Replace
Orders in this manner.
---------------------------------------------------------------------------
The Exchange also proposes to update the various rule references
related to the price reasonability checks within this provision to
refer to the current rules.\9\ Finally, the Exchange proposes other
non-substantive, technical changes within Supplementary Material .02 to
Rule 715 to capitalize ``Cancel and Replace Order'' for consistency,
and to capitalize ``System,'' which is a defined term.
---------------------------------------------------------------------------
\9\ In particular, Rules 711(c) and 714(b)(2) are now Rules
714(b)(1)(B) and 714(b)(1)(A), respectively, pursuant to SR-ISE-
2018-80. See Securities Exchange Act Release No. 84237 (September
20, 2018), 83 FR 48660 (September 26, 2018). Rule 722(b)(1) is now
Rule 722(c)(1) pursuant to SR-ISE-2018-56. See Securities Exchange
Act Release No. 84373 (October 5, 2018), 83 FR 51730 (October 12,
2018). Finally, paragraphs (b), (c), and (d) of Supplementary
Material .07 to Rule 722 are now paragraphs (a)(1)(A), (b), and
(c)(1), respectively, pursuant to SR-ISE-2018-55. See Securities
Exchange Act Release No. 83464 (June 19, 2018), 83 FR 29583 (June
25, 2018).
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\10\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\11\ 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. The Exchange's proposal corrects an inadvertent error in
Supplementary Material .02 to Rule 715, which currently includes Rule
710 within the list of price or other reasonability checks. As
discussed above, including Rule 710 is inconsistent with the operation
of the Exchange's System because an incoming Cancel and Replace Order
which fails the minimum price variation checks in Rule 710 does not
result in the existing order getting cancelled and not replaced. This
rule change would amend the rule text to reflect ISE's current
practice, and should avoid potential confusion about how the System
processes Cancel and Replace Orders today.\12\ Furthermore, the
Exchange's proposal to update the rule references and make other non-
substantive technical changes, as further described above, will bring
greater transparency to its Rulebook thereby protecting investors and
the public interest by reducing potential for investor confusion.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
\12\ See note 8 above.
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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
[[Page 63924]]
of the purposes of the Act. All of the proposed changes are intended to
bring greater transparency to the Exchange's Rulebook, and therefore
does not unduly burden competition.
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 \13\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\14\
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\13\ 15 U.S.C. 78s(b)(3)(A)(iii).
\14\ 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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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. 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-2018-97 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-2018-97. 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-2018-97 and should be submitted on
or before January 2, 2019.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-26836 Filed 12-11-18; 8:45 am]
BILLING CODE 8011-01-P
