Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Exchange's Pricing Schedule at Options 7, 53025-53030 [2022-18587]
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Federal Register / Vol. 87, No. 167 / Tuesday, August 30, 2022 / Notices
Postal Service has certified that the
meeting may be closed under the
Government in the Sunshine Act.
CONTACT PERSON FOR MORE INFORMATION:
Michael J. Elston, Secretary of the Board
of Governors, U.S. Postal Service, 475
L’Enfant Plaza SW, Washington, DC
20260–1000. Telephone: (202) 268–
4800.
Michael J. Elston,
Secretary.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
[FR Doc. 2022–18851 Filed 8–26–22; 4:15 pm]
BILLING CODE 7710–12–P
1. Purpose
SECURITIES AND EXCHANGE
COMMISSION
The purpose of the proposed rule
change is to amend the Exchange’s
Pricing Schedule at Options 7. Each
change is described below.
[Release No. 34–95590; File No. SR–ISE–
2022–16]
Self-Regulatory Organizations; Nasdaq
ISE, LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend the
Exchange’s Pricing Schedule at
Options 7
August 24, 2022.
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 August 9,
2022, 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 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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I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
Exchange’s Pricing Schedule at Options
7, as described further below.3
The text of the proposed rule change
is available on the Exchange’s website at
https://listingcenter.nasdaq.com/
rulebook/ise/rules, 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
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 The Exchange originally filed SR–ISE–2022–15
on August 1, 2022. On August 9, 2022, the
Exchange withdrew SR–ISE–2022–15 and
submitted this rule change.
2 17
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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.
Price Improvement Auctions, Options 7,
Sections 3 and 6
Currently, for Regular Orders 4 in
Select 5 and Non-Select Symbols,6 the
Exchange assesses all non-Priority
Customer market participants a Fee for
PIM 7 Orders of $0.10 per contract.8
Additionally, today, for Regular Orders
in Select Symbols, the Exchange
assesses all market participants a Fee for
Responses to PIM Orders of $0.50 per
contract. Finally, today, for Regular
Orders in Non-Select Symbols, the
Exchange assesses all market
participants a Fee for Responses to PIM
Orders of $1.10 per contract.9
Similar to break-up rebates for the
Exchange’s Facilitation Mechanism and
4 A ‘‘Regular Order’’ is an order that consists of
only a single option series and is not submitted
with a stock leg.
5 ‘‘Select Symbols’’ are options overlying all
symbols listed on the Nasdaq ISE that are in the
Penny Interval Program. See Options 7, Section
1(c).
6 ‘‘Non-Select Symbols’’ are options overlying all
symbols excluding Select Symbols. See Options 7,
Section 1(c).
7 PIM is the Exchange’s Price Improvement
Auction as described in Options 3, Section 13. A
PIM is comprised of the order the Electronic Access
Member represents as agent (the ‘‘Agency Order’’)
and a counter-side order for the full size of the
Agency Order (the ‘‘Counter-Side Order’’).
Responses, including the Counter-Side Order, and
Improvement Orders may be entered during the
exposure period. See Options 3, Section 13.
8 Priority Customers are not assessed a Fee for
PIM Orders. Also, Fees for PIM Orders apply to the
originating and contra order. Further, other than for
Priority Customer orders, this fee is $0.05 per
contract for orders executed by Members that
execute an ADV of 7,500 or more contracts in the
PIM in a given month. Members that execute an
ADV of 12,500 or more contracts in the PIM are
charged $0.02 per contract. The discounted fees are
applied retroactively to all eligible PIM volume in
that month once the threshold has been reached.
See notes 2 and 13 within the Pricing Schedule at
Options 7, Section 3.
9 PIM pricing is specified in Options 7, Section
3, Regular Order Fees and Rebates.
PO 00000
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53025
Solicited Order Mechanism,10 the
Exchange proposes to pay Electronic
Access Members 11 that utilize PIM to
execute more than 0.75% of Priority
Customer 12 volume of Regular Orders,
calculated as a percentage of Customer
Total Consolidated Volume (‘‘TCV’’) per
day in a given month, a PIM Break-Up
Rebate of $0.25 per contract for Select
Symbols and $0.60 per contract for NonSelect Symbols for Priority Customer
Orders under 100 contracts that are
submitted to PIM and do not trade with
their contra order except when those
contracts trade against unrelated quotes
or orders.13
The Exchange seeks to incentivize
Electronic Access Members to submit a
greater amount of smaller, more
typically sized Priority Customer orders
into PIM for price improvement with
the proposed pricing. The Exchange
believes the 100 contract threshold
represents such small-sized orders.
Today, the Exchange offers a PIM
Rebate within Options 7, Section 6,
Other Options Fees and Rebates.
Specifically, Options 7, Section 6B pays
a rebate to Electronic Access Members
utilizing either the Facilitation
Mechanism or PIM for unsolicited
Crossing Orders, whereby the contraside party of the Crossing Order (1) is
either Firm Proprietary or Broker-Dealer
and (2) has total affiliated Average Daily
Volume (‘‘ADV’’) of 250,000 or more
contracts. Electronic Access Members
that qualify for this rebate are eligible to
earn the following rebates during a
given month:
Originating contract sides
0 to 199,999 .................................
200,000 or more ...........................
Rebate
($0.02)
(0.03)
Once a Member reaches or exceeds
the volume threshold to qualify for a
$0.03 per originating contract side
rebate during a given month, then the
Member will receive the $0.03 per
contract rebate for all of its originating
contract sides that qualify for the PIM
and Facilitation Rebate during that
month, including for the Member’s first
10 See
Options 3, Section 11(b) and (d).
term ‘‘Electronic Access Member’’ or
‘‘EAM’’ means a Member that is approved to
exercise trading privileges associated with EAM
Rights. See General 1, Section 1(a)(6).
12 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
Options 1, Section 1(a)(37). Unless otherwise noted,
when used in this Pricing Schedule the term
‘‘Priority Customer’’ includes ‘‘Retail’’ as defined
below. See Options 7, Section 1(c).
13 The applicable fee would be applied to any
contracts for which a rebate is provided.
11 The
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qualifying 0–199,999 originating
contract sides. Further, Electronic
Access Members that qualify for the PIM
rebates on their unsolicited Crossing
Orders 14 may also earn additional
rebates.15
At this time, the Exchange proposes to
offer another rebate to Electronic Access
Members that utilize PIM to execute
more than 0.75% of Priority Customer
volume in Regular Orders, calculated as
a percentage of Customer TCV per day
in a given month. The Exchange
proposes to pay these Electronic Access
Members a rebate of $0.11 per contract
for Priority Customer Regular Orders
under 100 contracts that are submitted
to PIM. The rebate would be paid to the
Agency Order as that term is defined
within Options 3, Section 13. Eligible
volume from Affiliated Members 16
would be aggregated in calculating the
percentage. Additionally, the Exchange
proposes to pay this rebate in lieu of
other PIM rebates within Options 7,
Section 6B, provided this rebate is
higher than other rebates within
Options 7, Section 6B. In the event a
Crossing Transaction consists of two
Priority Customer Orders, the Exchange
would not pay this rebate.
As noted above, the Exchange seeks to
incentivize Electronic Access Members
to submit a greater amount of smaller
sized Priority Customer orders into PIM
for price improvement with the
proposed pricing and, therefore, is
proposing to pay the proposed rebate on
orders under 100 contracts.
The Exchange notes that all Electronic
Access Members may participate in a
PIM.17 Accordingly, the proposed
rebates are designed to incentivize
Electronic Access Members to submit a
greater amount of Regular Orders
executed in PIM to the Exchange,
particularly Priority Customer PIM
volume.
Priority Customer Complex Order
Rebates, Options 7, Section 4
Currently, the Exchange provides
rebates to Priority Customer complex
orders based on the volume that a
Member traded as provided for within
Options 7, Section 4, Complex Order
Fees and Rebates. Specifically, the
Exchange calculates Total Affiliated
Member or Affiliated Entity 18 Complex
Order Volume (excluding Crossing
Orders and Responses to Crossing
Order) as a percentage of Customer TCV
to determine the rebate amount.19 The
Exchange pays Priority Customer
complex orders rebates based on a tentier pricing model. The rebates for
Select Symbols and Non-Select Symbols
are paid to Members based on the
percentage of Customer TCV executed
in a particular symbol. The current
rebate tiers are as follows:
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PRIORITY CUSTOMER REBATES
Priority customer complex
tier (7) (13) (16)
Total affiliated member or affiliated entity complex order volume (excluding
crossing orders and responses to crossing orders) calculated as a percentage of
customer total consolidated volume
Tier
Tier
Tier
Tier
Tier
Tier
Tier
Tier
Tier
Tier
0.000%–0.200% .......................................................................................................
Above 0.200%–0.400% ............................................................................................
Above 0.400%–0.450% ............................................................................................
Above 0.450%–0.750% ............................................................................................
Above 0.750%–1.000% ............................................................................................
Above 1.000%–1.350% ............................................................................................
Above 1.350%–2.000% ............................................................................................
Above 2.000%–2.750% ............................................................................................
Above 2.750%–4.500% ............................................................................................
Above 4.500% ..........................................................................................................
1 .................................
2 .................................
3 .................................
4 .................................
5 .................................
6 .................................
7 .................................
8 .................................
9 .................................
10 ...............................
Rebate for
select
symbols (1)
($0.25)
(0.30)
(0.35)
(0.40)
(0.45)
(0.47)
(0.48)
(0.52)
(0.52)
(0.53)
Rebate for
non-select
symbols (1) (4)
($0.40)
(0.55)
(0.70)
(0.75)
(0.80)
(0.80)
(0.80)
(0.85)
(0.86)
(0.88)
The Exchange offers the Priority
Customer complex order rebates to
encourage Members to bring complex
volume to the Exchange, including
incentivizing Members to bring Priority
Customer complex orders specifically to
earn the associated rebates.
14 A ‘‘Crossing Order’’ is an order executed in the
Exchange’s Facilitation Mechanism, Solicited Order
Mechanism, Price Improvement Mechanism
(‘‘PIM’’) or submitted as a Qualified Contingent
Cross order. For purposes of this Pricing Schedule,
orders executed in the Block Order Mechanism are
also considered Crossing Orders. See Options 7,
Section 1(c).
15 Members that achieve combined Qualified
Contingent Cross (‘‘QCC’’) and Solicitation
Originating Contracts Sides of more than 1,000,000
during a given month can earn an additional rebate
of ($0.01) per originating contract side on their
unsolicited Crossing Orders that qualify for the PIM
and Facilitation Rebate program. Also, Members
that achieve Priority Customer Complex Order ADV
of between 100,000–224,999 contracts can earn an
additional rebate of ($0.01) per originating contract
side on all of their unsolicited Crossing Orders that
qualify for the PIM and Facilitation Rebate program;
however, this additional rebate will be ($0.02) per
originating contract on all unsolicited Crossing
Orders that qualify for the PIM and Facilitation
Rebate Program to the extent that Members achieve
Priority Customer Complex Order ADV of 225,000
or more contracts. See Options 7, Section 6B.
16 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. See Options 7, Section 1(c).
17 Any solicited Counter-Side Orders submitted
by an Electronic Access Member to trade against
Agency Orders may not be for the account of a
Nasdaq ISE Market Maker assigned to the options
class. See Supplementary Material .06 to Options 3,
Section 13.
18 An ‘‘Affiliated Entity’’ is a relationship between
an Appointed Market Maker and an Appointed OFP
for purposes of qualifying for certain pricing
specified in the Schedule of Fees. Market Makers
and OFPs are required to send an email to the
Exchange to appoint their counterpart, at least 3
business days prior to the last day of the month to
qualify for the next month. The Exchange will
acknowledge receipt of the emails and specify the
date the Affiliated Entity is eligible for applicable
pricing, as specified in the Pricing Schedule. Each
Affiliated Entity relationship will commence on the
1st of a month and may not be terminated prior to
the end of any month. An Affiliated Entity
relationship will automatically renew each month
until or unless either party terminates earlier in
writing by sending an email to the Exchange at least
3 business days prior to the last day of the month
to terminate for the next month. Affiliated Members
may not qualify as a counterparty comprising an
Affiliated Entity. Each Member may qualify for only
one (1) Affiliated Entity relationship at any given
time. See Options 7, Section 1(c).
19 The rebate for the highest tier volume achieved
is applied retroactively to all eligible Priority
Customer Complex volume once the threshold has
been reached. Members do not receive rebates for
net zero complex orders. For purposes of
determining which complex orders qualify as ‘‘net
zero’’ the Exchange counts all complex orders that
leg in to the Regular Order book and are executed
at a net price per contract that is within a range of
$0.01 credit and $0.01 debit.
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. Affiliated Entities
may aggregate their Complex Order volume for
purposes of calculating Priority Customer Rebates.
The Appointed OFP would receive the rebate
associated with the qualifying volume tier based on
aggregated volume. See notes 7, 13 and 16 within
the Pricing Schedule at Options 7, Section 4.
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The Exchange proposes to amend the
volume requirement for Priority
Customer complex order Tier 7 from the
current level of ‘‘above 1.350%–2.00%’’
to ‘‘above 1.350%–1.750%.’’ The
Exchange also proposes to adjust
Priority Customer complex order Tier 8
from the current level of ‘‘above
2.000%–2.750%’’ to ‘‘above 1.750%–
2.750%.’’ 20 By lowering the
qualification for Priority Customer
complex order Tier 8, which offers a
higher rebate of $0.52 per contract for
Select Symbols as compared to $0.48
per contract for Priority Customer
complex order Tier 7 and a higher
rebate of $0.85 per contract for NonSelect Symbols as compared to $0.80
per contract for Priority Customer
complex order Tier 7, the Exchange
seeks to incentivize Members to
continue to bring Priority Customer
complex orders specifically to earn the
higher Priority Customer complex order
Tier 8 associated rebates.
The Exchange notes that all Members
may elect to qualify for the Priority
Customer complex rebates by
submitting complex order flow to the
Exchange and earn a rebate on their
Priority Customer complex volume.
Accordingly, the proposed changes are
designed to increase the amount of
complex order flow Members bring to
the Exchange, particularly Priority
Customer complex volume, and further
encourage them to contribute to a
deeper, more liquid market to the
benefit of all market participants.
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Technical Amendments
The Exchange proposes to make
technical amendments to Options 7,
Section 6B to remove the words ‘‘Price
Improvement Mechanism’’ and the
parenthesis around the word ‘‘PIM’’
because this term is already defined
within the term ‘‘Crossing Order’’ at
Options 7, Section 1(c).
The Exchange proposes to capitalize
the work ‘‘affiliated’’ in Options 7,
Section 6B because the term ‘‘Affiliated
Member’’ is defined within Options 7,
Section 1(c).
The Exchange proposes to remove the
phrase ‘‘provided there is at least 75%
common ownership between the
Members as reflected on each Member’s
Form BD, Schedule A’’ because the term
‘‘Affiliated Member’’ is defined in
Options 7, Section 1(c) as a Member that
shares at least 75% common ownership
with a particular Member as reflected on
the Member’s Form BD, Schedule A.
20 Currently no Member qualifies for Priority
Customer complex order Tier 8.
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Finally, the Exchange proposes to
remove the extra period at the end of
Options 7, Section 6B.
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 Sections 6(b)(4) and 6(b)(5)
of the Act,22 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 Proposal Is Reasonable
The proposed changes to its Pricing
Schedule are reasonable in several
respects. As a threshold matter, the
Exchange is subject to significant
competitive forces in the market for
options transaction services that
constrain its pricing determinations in
that market. The fact that this market is
competitive has long been recognized by
the courts. In NetCoalition v. Securities
and Exchange Commission 23
(‘‘NetCoalition’’), the D.C. Circuit stated,
‘‘[n]o one disputes that competition for
order flow is ‘fierce.’ . . . As the SEC
explained, ‘[i]n the U.S. national market
system, buyers and sellers of securities,
and the broker-dealers that act as their
order-routing agents, have a wide range
of choices of where to route orders for
execution’; [and] ‘no exchange can
afford to take its market share
percentages for granted’ because ‘no
exchange possesses a monopoly,
regulatory or otherwise, in the execution
of order flow from broker dealers’
. . . .’’ 24
Numerous indicia demonstrate the
competitive nature of this market. For
example, clear substitutes to the
Exchange exist in the market for options
transaction services. The Exchange is
only one of sixteen options exchanges to
which market participants may direct
their order flow. Within this
environment, market participants can
freely and often do shift their order flow
among the Exchange and competing
venues in response to changes in their
respective pricing schedules. Within the
foregoing context, the proposal
represents a reasonable attempt by the
Exchange to attract additional order
21 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4) and (5).
23 NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir.
2010).
24 Id. at 539 (quoting Securities Exchange Act
Release No. 59039 (December 2, 2008), 73 FR
74770, 74782–83 (December 9, 2008) (SR–
NYSEArca–2006–21)).
53027
flow to the Exchange and increase its
market share relative to its competitors.
Price Improvement Auctions, Options 7,
Sections 3 and 6
The Exchange’s proposal to pay
Priority Customer PIM Break-Up
Rebates of $0.25 per contract for Select
Symbols and $0.60 per contract for NonSelect Symbols to Electronic Access
Members that utilize PIM to execute
more than 0.75% of Priority Customer
volume in Regular Orders, which would
be calculated as a percentage of
Customer TCV per day in a given
month, for orders under 100 contracts is
reasonable because it is designed to
incentivize additional participation in
PIM by encouraging market participants
to send additional order flow to the
Exchange in order to benefit from the
increased rebates. In particular, the
Exchange believes that this proposal
will incentivize Electronic Access
Members to submit a greater amount of
smaller Priority Customer orders into
PIM for price improvement with the
proposed pricing. The Exchange
believes it is reasonable to pay the
rebate for orders of 100 contracts or less
because the Exchange seeks to
incentivize small-sized orders to be
solicited for entry into PIM for price
improvement.
The Exchange’s proposal to pay
Priority Customer PIM Break-Up
Rebates of $0.25 per contract for Select
Symbols and $0.60 per contract for NonSelect Symbols to Members that utilize
PIM to execute more than 0.75% of
Priority Customer volume in Regular
Orders, which would be calculated as a
percentage of Customer TCV per day in
a given month, for orders under 100
contracts is equitable and not unfairly
discriminatory because any Electronic
Access Member may participate in a
PIM.25 While only Electronic Access
Members may initiate a PIM, Market
Makers may respond to a PIM. While
this incentive is specifically targeted
towards Priority Customer orders, the
Exchange does not believe that this is
unfairly discriminatory. Of note, today,
Priority Customers pay no Fees for PIM
Orders. Priority Customer liquidity
benefits all market participants by
providing more trading opportunities
which attracts market makers. An
increase in the activity of these market
participants (particularly in response to
pricing) in turn facilitates tighter
spreads which may cause an additional
22 15
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25 Any solicited Counter-Side Orders submitted
by an Electronic Access Member to trade against
Agency Orders may not be for the account of a
Nasdaq ISE Market Maker assigned to the options
class. See Supplementary Material .06 to Options 3,
Section 13.
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corresponding increase in order flow
from other market participants.
Attracting more liquidity from Priority
Customers will benefit all market
participants that trade on the ISE. Also,
the 100 contracts threshold would be
uniformly applied in paying the rebate.
The Exchange’s proposal to offer
another rebate for PIM executions to
Electronic Access Members that utilize
PIM to execute more than 0.75% of
Priority Customer volume in Regular
Orders, calculated as a percentage of
Customer TCV per day in a given
month, for Priority Customer Regular
Orders executed in PIM under 100
contracts is reasonable because it is
designed to incentivize additional
participation in PIM by encouraging
market participants to send additional
order flow to the Exchange in order to
benefit from the increased rebates. In
particular, the Exchange believes that
this additional rebate will incentivize
Electronic Access Members to submit a
greater amount of smaller-sized orders
to be solicited for entry into PIM for
price improvement. Aggregating volume
from Affiliated Members in calculating
the percentage will allow Electronic
Access Members to obtain greater
rebates and, thereby, should attract
additional Priority Customer order flow
to the Exchange. Not paying the $0.11
per contract rebate in the event a
Crossing Transaction consists of two
Priority Customer Orders is reasonable
because Priority Customers pay no fees
for PIM.
The Exchange’s proposal to offer
another rebate for PIM executions to
Electronic Access Members that utilize
PIM to execute more than 0.75% of
Priority Customer volume in Regular
Orders, calculated as a percentage of
Customer TCV per day in a given
month, for Priority Customer Regular
Orders executed in PIM under 100
contracts is equitable and not unfairly
discriminatory because any Electronic
Access Member may enter orders into
PIM.26 While only Electronic Access
Members may initiate a PIM, the
Exchange notes that Market Makers may
respond to a PIM. While this incentive
is specifically targeted towards Priority
Customer orders, the Exchange does not
believe that this is unfairly
discriminatory. Of note, today, Priority
Customers pay no Fees for PIM Orders.
Priority Customer liquidity benefits all
market participants by providing more
trading opportunities which attracts
26 Any solicited Counter-Side Orders submitted
by an Electronic Access Member to trade against
Agency Orders may not be for the account of a
Nasdaq ISE Market Maker assigned to the options
class. See Supplementary Material .06 to Options 3,
Section 13.
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market makers. An increase in the
activity of these market participants
(particularly in response to pricing) in
turn facilitates tighter spreads which
may cause an additional corresponding
increase in order flow from other market
participants. Attracting more liquidity
from Priority Customers will benefit all
market participants that trade on the
ISE. Also, the 100 contracts threshold
would be uniformly applied in paying
the rebate. All Electronic Access
Members may aggregate volume from
Affiliated Members to receive the rebate.
It is not novel to limit a rebate by
contract size. For example, ISE currently
pays a reduced complex order rebate in
Select Symbols where the largest leg of
the Complex Order is under fifty (50)
contracts and trades with quotes and
orders on the Regular Order book.27
Additionally, Cboe Exchange, Inc.
(‘‘Cboe’’) has a similar concept of
limiting certain fee incentives in its Fees
Schedule for smaller sized customer
orders.28
Priority Customer Complex Order
Rebates, Options 7, Section 4
The Exchange’s proposal to amend
the volume requirement for Priority
Customer complex order Tier 7 from the
current level of ‘‘above 1.350%–2.00%’’
to ‘‘above 1.350%–1.750%’’ and amend
Priority Customer complex order Tier 8
from the current level of ‘‘above
2.000%–2.750%’’ to ‘‘above 1.750%–
2.750%’’ is reasonable because by
lowering the qualification for Priority
Customer complex order Tier 8, which
offers a higher rebate of $0.52 per
contract for Select Symbols as compared
to $0.48 per contract for Priority
Customer complex order Tier 7 and a
higher rebate of $0.85 per contract for
Non-Select Symbols as compared to
$0.80 per contract for Priority Customer
complex order Tier 7, the Exchange
seeks to incentivize Members to
continue to bring Priority Customer
complex orders specifically to earn the
higher Priority Customer complex order
27 ISE’s rebate is paid per contract per leg if the
order trades with non-Priority Customer orders in
the Complex Order Book. This rebate is reduced by
$0.15 per contract in Select Symbols where the
largest leg of the Complex Order is under fifty (50)
contracts and trades with quotes and orders on the
Regular Order book. Further, no Priority Customer
Complex Order rebates are provided in Select
Symbols if any leg of the order that trades with
interest on the Regular Order book is fifty (50)
contracts or more. Also, no Priority Customer
Complex Order rebates are provided in Non-Select
Symbols if any leg of the order trades with interest
on the Regular Order book, irrespective of order
size. See note 1 of ISE Options 7, Section 4.
28 See Cboe Fees Schedule at footnote 9. Cboe
waives transaction fees for customer orders
removing liquidity that are of 99 contracts or less
in ETF and ETN options.
PO 00000
Frm 00128
Fmt 4703
Sfmt 4703
Tier 8 associated rebates.29 The ability
to earn a higher rebate as a result of the
lower volume requirement is intended
to further incentivize Members to bring
additional complex order flow,
including Priority Customer complex
order flow, to the Exchange. The
proposed changes are designed to make
the rebates more achievable and
attractive to existing and potential
market participants. The Priority
Customer complex rebate program is
optional and available to all Members
that choose to send complex order flow
to the Exchange to earn a rebate on their
Priority Customer complex volume. To
the extent the program, as modified,
continues to attract complex volume to
the Exchange, the Exchange believes
that the proposed changes would
improve the Exchange’s overall
competitiveness and strengthen its
market quality for all market
participants.
The Exchange’s proposal to amend
the volume requirement for Priority
Customer complex order Tier 7 from the
current level of ‘‘above 1.350%–2.00%’’
to ‘‘above 1.350%–1.750%’’ and amend
Priority Customer complex order Tier 8
from the current level of ‘‘above
2.000%–2.750%’’ to ‘‘above 1.750%–
2.750%’’ is equitable and not unfairly
discriminatory because any Member
who brings complex order flow to the
Exchange may qualify for the rebates.
The Exchange believes that the
proposed changes to Priority Customer
complex order Tiers 7 and 8 are an
equitable allocation of rebates because
the Exchange seeks to further
incentivize all Members to bring a
significant amount of complex volume
to the Exchange in order to earn the
highest range of Priority Customer
complex rebates offered by the
Exchange. Accordingly, the Exchange
believes that the changes to Priority
Customer complex order Tiers 7 and 8
are reasonably designed to provide
further incentives for all Members
interested in meeting the tier criteria to
submit additional Priority Customer
complex volume to achieve the higher
rebates. Further, any Member may
choose to qualify for the rebate program
by sending complex order flow to the
Exchange. By encouraging all Members
to bring significant amounts of complex
order flow (i.e., to qualify for the higher
tiers) in order to earn a rebate on their
Priority Customer complex orders, the
Exchange seeks to provide more trading
opportunities for all market
participants, promote price discovery,
29 Currently no Member qualifies for Priority
Customer complex order Tier 8.
E:\FR\FM\30AUN1.SGM
30AUN1
Federal Register / Vol. 87, No. 167 / Tuesday, August 30, 2022 / Notices
and improve the overall market quality
of the Exchange.
Price Improvement Auctions, Options 7,
Sections 3 and 6
Technical Amendments
The Exchange’s proposal to pay
Priority Customer PIM Break-Up
Rebates within Options 7, Section 3,
and offer another rebate for PIM
executions within Options 7, Section
6B, do not impose an undue burden on
competition because any Electronic
Access Member may enter orders into
PIM.30 While only Electronic Access
Members may initiate a PIM, the
Exchange does not believe that this
creates an undue burden on competition
because Market Makers may respond to
a PIM. While this incentive is
specifically targeted towards Priority
Customer orders, the Exchange does not
believe that this is unfairly
discriminatory. Today, Priority
Customers pay no fees for PIM Orders.
Priority Customer liquidity benefits all
market participants by providing more
trading opportunities which attracts
market makers. An increase in the
activity of these market participants
(particularly in response to pricing) in
turn facilitates tighter spreads which
may cause an additional corresponding
increase in order flow from other market
participants. Attracting more liquidity
from Priority Customers will benefit all
market participants that trade on the
ISE.
The technical amendments proposed
herein are non-substantive because
these amendments remove redundant
defined terms, capitalize a defined term,
and correct a grammatical error.
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.
Intermarket Competition
The Exchange operates in a highly
competitive market in which market
participants can readily favor competing
venues if they deem fee levels at a
particular venue to be excessive, or
rebate opportunities available at other
venues to be more favorable. In such an
environment, the Exchange must
continually adjust its fees to remain
competitive with other exchanges.
Because competitors are free to modify
their own fees in response, and because
market participants may readily adjust
their order routing practices, the
Exchange believes that the degree to
which fee changes in this market may
impose any burden on competition is
extremely limited because other options
exchanges offer similar price
improvement auctions as well as breakup rebates and customer complex order
rebates.
Moreover, as noted above, price
competition between exchanges is
fierce, with liquidity and market share
moving freely between exchanges in
reaction to fee and rebate changes. In
sum, if the changes proposed herein are
unattractive to market participants, it is
likely that the Exchange will lose
market share as a result. Accordingly,
the Exchange does not believe that the
proposed changes will impair the ability
of members or competing order
execution venues to maintain their
competitive standing in the financial
markets.
khammond on DSKJM1Z7X2PROD with NOTICES
Intramarket Competition
The proposal is designed to attract
additional liquidity to ISE. Specifically,
amending the Priority Customer
complex order rebates and adopting two
new PIM rebates will incentivize market
participants to direct liquidity to the
Exchange. All market participants will
benefit from any increase in market
activity that the proposal effectuates.
VerDate Sep<11>2014
17:24 Aug 29, 2022
Jkt 256001
Priority Customer Complex Order
Rebates, Options 7, Section 4
The Exchange’s proposal to amend
the volume requirement for Priority
Customer complex order Tier 7 from the
current level of ‘‘above 1.350%–2.00%’’
to ‘‘above 1.350%–1.750%’’ and amend
Priority Customer complex order Tier 8
from the current level of ‘‘above
2.000%–2.750%’’ to ‘‘above 1.750%–
2.750%’’ does not impose an undue
burden on competition because it will
not place any category of Exchange
participant at a competitive
disadvantage. Any Member who brings
complex order flow to the Exchange
may qualify for the rebates. The
Exchange seeks to further incentivize all
Members to bring a significant amount
of complex volume to the Exchange in
order to earn the highest range of
Priority Customer complex rebates
offered by the Exchange. Further, any
Member may choose to qualify for the
rebate program by sending complex
order flow to the Exchange.
30 Any solicited Counter-Side Orders submitted
by an Electronic Access Member to trade against
Agency Orders may not be for the account of a
Nasdaq ISE Market Maker assigned to the options
class. See Supplementary Material .06 to Options 3,
Section 13.
PO 00000
Frm 00129
Fmt 4703
Sfmt 4703
53029
Technical Amendments
The technical amendments proposed
herein are non-substantive because
these amendments remove redundant
defined terms, capitalize a defined term,
and correct a grammatical error.
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 31 and Rule
19b–4(f)(2) 32 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:
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–
ISE–2022–16 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–2022–16. 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/
31 15
32 17
E:\FR\FM\30AUN1.SGM
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
30AUN1
53030
Federal Register / Vol. 87, No. 167 / Tuesday, August 30, 2022 / Notices
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–2022–16 and should be
submitted on or before September 20,
2022.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.33
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022–18587 Filed 8–29–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release Nos. 33–11095; 34–95597/August
25, 2022]
Order Making Fiscal Year 2023 Annual
Adjustments to Registration Fee Rates
khammond on DSKJM1Z7X2PROD with NOTICES
I. Background
33 17
CFR 200.30–3(a)(12).
U.S.C. 77f(b).
2 15 U.S.C. 78m(e).
1 15
17:24 Aug 29, 2022
II. Fiscal Year 2023 Annual Adjustment
to Fee Rates
Section 6(b)(2) of the Securities Act
requires the Commission to make an
annual adjustment to the fee rate
applicable under Section 6(b).4 The
annual adjustment to the fee rate under
Section 6(b) of the Securities Act also
sets the annual adjustment to the fee
rates under Sections 13(e) and 14(g) of
the Exchange Act.5
Section 6(b)(2) sets forth the method
for determining the annual adjustment
to the fee rate under Section 6(b) for
fiscal year 2023. Specifically, the
Commission must adjust the fee rate
under Section 6(b) to a ‘‘rate that, when
applied to the baseline estimate of the
aggregate maximum offering prices for
[fiscal year 2023], is reasonably likely to
produce aggregate fee collections under
[Section 6(b)] that are equal to the target
fee collection amount for [fiscal year
2023].’’ That is, the adjusted rate is
determined by dividing the ‘‘target fee
collection amount’’ for fiscal year 2023
by the ‘‘baseline estimate of the
aggregate maximum offering prices’’ for
fiscal year 2023.
III. Target Fee Collection Amount for
FY 2023
The statutory ‘‘target fee collection
amount’’ for fiscal year 2021 and ‘‘each
fiscal year thereafter’’ is ‘‘an amount
that is equal to the target fee collection
amount for the prior fiscal year,
adjusted by the rate of inflation.’’ 6
Consistent with the fiscal year 2021
calculation, the Commission has
determined that it will use an approach
similar to one that it uses to annually
adjust civil monetary penalties by the
rate of inflation.7 Under this approach,
3 15
The Commission collects fees under
various provisions of the securities
laws. Section 6(b) of the Securities Act
of 1933 (‘‘Securities Act’’) requires the
Commission to collect fees from issuers
on the registration of securities.1 Section
13(e) of the Securities Exchange Act of
1934 (‘‘Exchange Act’’) requires the
Commission to collect fees on specified
repurchases of securities.2 Section 14(g)
of the Exchange Act requires the
Commission to collect fees on specified
proxy solicitations and statements in
VerDate Sep<11>2014
corporate control transactions.3 These
provisions require the Commission to
make annual adjustments to the
applicable fee rates.
Jkt 256001
U.S.C. 78n(g).
U.S.C. 77f(b)(2). The annual adjustments are
designed to adjust the fee rate in a given fiscal year
so that, when applied to the aggregate maximum
offering prices at which securities are proposed to
be offered for the fiscal year, it is reasonably likely
to produce total fee collections under Section 6(b)
equal to the ‘‘target fee collection amount’’ required
by Section 6(b)(6)(A) for that fiscal year.
5 15 U.S.C. 78m(e)(4) and 15 U.S.C. 78n(g)(4).
6 15 U.S.C. 77f(b)(6)(A).
7 The Commission annually adjusts for inflation
the civil monetary penalties that can be imposed
under the statutes administered by Commission, as
required by the Federal Civil Penalties Inflation
Adjustment Act Improvements Act of 2015,
pursuant to guidance from the Office of
Management and Budget (‘‘OMB’’). See OMB
December 16, 2019, Memorandum for the Heads of
Executive Departments and Agencies,’’ M–20–05,
on ‘‘Implementation of Penalty Inflation
Adjustments for 2020, Pursuant to the Federal Civil
4 15
PO 00000
Frm 00130
Fmt 4703
Sfmt 4703
the Commission will use the year-overyear change, rounded to five decimal
places, in the Consumer Price Index for
All Urban Consumers (‘‘CPI–U’’), not
seasonally adjusted, in calculating the
target fee collection amount, which is
then rounded to the nearest whole
dollar. The calculation for the fiscal year
2023 target fee collection amount is
described in more detail below.
The most recent CPI–U index value,
not seasonally adjusted, available for
use by the Commission at the time this
fee rate update was prepared was for
June 2022. This value is 296.311.8 The
CPI–U index value, not seasonally
adjusted, for June 2021 is 271.696.9
Dividing the June 2022 value by the
June 2021 value and rounding to five
decimal places yields a multiplier value
of 1.09060. Multiplying the fiscal year
2022 target fee collection amount of
$747,806,372 10 by the multiplier value
of 1.09060 and rounding to the nearest
whole dollar yields a fiscal year 2023
target fee collection amount of
$815,557,629.
Section 6(b)(6)(B) defines the
‘‘baseline estimate of the aggregate
maximum offering prices’’ for fiscal year
2023 as ‘‘the baseline estimate of the
aggregate maximum offering price at
which securities are proposed to be
offered pursuant to registration
statements filed with the Commission
during [fiscal year 2023] as determined
by the Commission, after consultation
with the Congressional Budget Office
and the Office of Management and
Budget . . . .’’
To make the baseline estimate of the
aggregate maximum offering prices for
fiscal year 2023, the Commission is
using the methodology it has used in
prior fiscal years and that was
developed in consultation with the
Congressional Budget Office and
OMB.11 Using this methodology, the
Commission determines the ‘‘baseline
estimate of the aggregate maximum
Penalties Inflation Adjustment Act Improvements
Act of 2015.’’
8 This value was announced on July 13, 2022. See
https://www.bls.gov/news.release/archives/cpi_
07132022.htm.
9 See ‘‘Table 1, Consumer Price Index for All
Urban Consumers (CPI–U): U.S. city average, by
expenditure category, June 2022’’ in the
announcement referenced above.
10 See 86 FR 47696, published August 26, 2021.
(https://www.federalregister.gov/documents/2021/
08/26/2021-18402/order-making-fiscal-year-2022annual-adjustments-to-registration-fee-rates).
11 Appendix A explains how we determined the
‘‘baseline estimate of the aggregate maximum
offering prices’’ for fiscal year 2023 using our
methodology, and then shows the arithmetical
process of calculating the fiscal year 2023 annual
adjustment based on that estimate. The appendix
includes the data used by the Commission in
making its ‘‘baseline estimate of the aggregate
maximum offering prices’’ for fiscal year 2023.
E:\FR\FM\30AUN1.SGM
30AUN1
]]>Agencies
[Federal Register Volume 87, Number 167 (Tuesday, August 30, 2022)]
[Notices]
[Pages 53025-53030]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-18587]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-95590; File No. SR-ISE-2022-16]
Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend the
Exchange's Pricing Schedule at Options 7
August 24, 2022.
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 August 9, 2022, 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 and II below, which Items
have been prepared by the Exchange. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the Exchange's Pricing Schedule at
Options 7, as described further below.\3\
---------------------------------------------------------------------------
\3\ The Exchange originally filed SR-ISE-2022-15 on August 1,
2022. On August 9, 2022, the Exchange withdrew SR-ISE-2022-15 and
submitted this rule change.
---------------------------------------------------------------------------
The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/ise/rules, 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 Exchange's
Pricing Schedule at Options 7. Each change is described below.
Price Improvement Auctions, Options 7, Sections 3 and 6
Currently, for Regular Orders \4\ in Select \5\ and Non-Select
Symbols,\6\ the Exchange assesses all non-Priority Customer market
participants a Fee for PIM \7\ Orders of $0.10 per contract.\8\
Additionally, today, for Regular Orders in Select Symbols, the Exchange
assesses all market participants a Fee for Responses to PIM Orders of
$0.50 per contract. Finally, today, for Regular Orders in Non-Select
Symbols, the Exchange assesses all market participants a Fee for
Responses to PIM Orders of $1.10 per contract.\9\
---------------------------------------------------------------------------
\4\ A ``Regular Order'' is an order that consists of only a
single option series and is not submitted with a stock leg.
\5\ ``Select Symbols'' are options overlying all symbols listed
on the Nasdaq ISE that are in the Penny Interval Program. See
Options 7, Section 1(c).
\6\ ``Non-Select Symbols'' are options overlying all symbols
excluding Select Symbols. See Options 7, Section 1(c).
\7\ PIM is the Exchange's Price Improvement Auction as described
in Options 3, Section 13. A PIM is comprised of the order the
Electronic Access Member represents as agent (the ``Agency Order'')
and a counter-side order for the full size of the Agency Order (the
``Counter-Side Order''). Responses, including the Counter-Side
Order, and Improvement Orders may be entered during the exposure
period. See Options 3, Section 13.
\8\ Priority Customers are not assessed a Fee for PIM Orders.
Also, Fees for PIM Orders apply to the originating and contra order.
Further, other than for Priority Customer orders, this fee is $0.05
per contract for orders executed by Members that execute an ADV of
7,500 or more contracts in the PIM in a given month. Members that
execute an ADV of 12,500 or more contracts in the PIM are charged
$0.02 per contract. The discounted fees are applied retroactively to
all eligible PIM volume in that month once the threshold has been
reached. See notes 2 and 13 within the Pricing Schedule at Options
7, Section 3.
\9\ PIM pricing is specified in Options 7, Section 3, Regular
Order Fees and Rebates.
---------------------------------------------------------------------------
Similar to break-up rebates for the Exchange's Facilitation
Mechanism and Solicited Order Mechanism,\10\ the Exchange proposes to
pay Electronic Access Members \11\ that utilize PIM to execute more
than 0.75% of Priority Customer \12\ volume of Regular Orders,
calculated as a percentage of Customer Total Consolidated Volume
(``TCV'') per day in a given month, a PIM Break-Up Rebate of $0.25 per
contract for Select Symbols and $0.60 per contract for Non-Select
Symbols for Priority Customer Orders under 100 contracts that are
submitted to PIM and do not trade with their contra order except when
those contracts trade against unrelated quotes or orders.\13\
---------------------------------------------------------------------------
\10\ See Options 3, Section 11(b) and (d).
\11\ The term ``Electronic Access Member'' or ``EAM'' means a
Member that is approved to exercise trading privileges associated
with EAM Rights. See General 1, Section 1(a)(6).
\12\ 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 Options 1,
Section 1(a)(37). Unless otherwise noted, when used in this Pricing
Schedule the term ``Priority Customer'' includes ``Retail'' as
defined below. See Options 7, Section 1(c).
\13\ The applicable fee would be applied to any contracts for
which a rebate is provided.
---------------------------------------------------------------------------
The Exchange seeks to incentivize Electronic Access Members to
submit a greater amount of smaller, more typically sized Priority
Customer orders into PIM for price improvement with the proposed
pricing. The Exchange believes the 100 contract threshold represents
such small-sized orders.
Today, the Exchange offers a PIM Rebate within Options 7, Section
6, Other Options Fees and Rebates. Specifically, Options 7, Section 6B
pays a rebate to Electronic Access Members utilizing either the
Facilitation Mechanism or PIM for unsolicited Crossing Orders, whereby
the contra-side party of the Crossing Order (1) is either Firm
Proprietary or Broker-Dealer and (2) has total affiliated Average Daily
Volume (``ADV'') of 250,000 or more contracts. Electronic Access
Members that qualify for this rebate are eligible to earn the following
rebates during a given month:
------------------------------------------------------------------------
Originating contract sides Rebate
------------------------------------------------------------------------
0 to 199,999................................................. ($0.02)
200,000 or more.............................................. (0.03)
------------------------------------------------------------------------
Once a Member reaches or exceeds the volume threshold to qualify
for a $0.03 per originating contract side rebate during a given month,
then the Member will receive the $0.03 per contract rebate for all of
its originating contract sides that qualify for the PIM and
Facilitation Rebate during that month, including for the Member's first
[[Page 53026]]
qualifying 0-199,999 originating contract sides. Further, Electronic
Access Members that qualify for the PIM rebates on their unsolicited
Crossing Orders \14\ may also earn additional rebates.\15\
---------------------------------------------------------------------------
\14\ A ``Crossing Order'' is an order executed in the Exchange's
Facilitation Mechanism, Solicited Order Mechanism, Price Improvement
Mechanism (``PIM'') or submitted as a Qualified Contingent Cross
order. For purposes of this Pricing Schedule, orders executed in the
Block Order Mechanism are also considered Crossing Orders. See
Options 7, Section 1(c).
\15\ Members that achieve combined Qualified Contingent Cross
(``QCC'') and Solicitation Originating Contracts Sides of more than
1,000,000 during a given month can earn an additional rebate of
($0.01) per originating contract side on their unsolicited Crossing
Orders that qualify for the PIM and Facilitation Rebate program.
Also, Members that achieve Priority Customer Complex Order ADV of
between 100,000-224,999 contracts can earn an additional rebate of
($0.01) per originating contract side on all of their unsolicited
Crossing Orders that qualify for the PIM and Facilitation Rebate
program; however, this additional rebate will be ($0.02) per
originating contract on all unsolicited Crossing Orders that qualify
for the PIM and Facilitation Rebate Program to the extent that
Members achieve Priority Customer Complex Order ADV of 225,000 or
more contracts. See Options 7, Section 6B.
---------------------------------------------------------------------------
At this time, the Exchange proposes to offer another rebate to
Electronic Access Members that utilize PIM to execute more than 0.75%
of Priority Customer volume in Regular Orders, calculated as a
percentage of Customer TCV per day in a given month. The Exchange
proposes to pay these Electronic Access Members a rebate of $0.11 per
contract for Priority Customer Regular Orders under 100 contracts that
are submitted to PIM. The rebate would be paid to the Agency Order as
that term is defined within Options 3, Section 13. Eligible volume from
Affiliated Members \16\ would be aggregated in calculating the
percentage. Additionally, the Exchange proposes to pay this rebate in
lieu of other PIM rebates within Options 7, Section 6B, provided this
rebate is higher than other rebates within Options 7, Section 6B. In
the event a Crossing Transaction consists of two Priority Customer
Orders, the Exchange would not pay this rebate.
---------------------------------------------------------------------------
\16\ 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. See Options 7, Section 1(c).
---------------------------------------------------------------------------
As noted above, the Exchange seeks to incentivize Electronic Access
Members to submit a greater amount of smaller sized Priority Customer
orders into PIM for price improvement with the proposed pricing and,
therefore, is proposing to pay the proposed rebate on orders under 100
contracts.
The Exchange notes that all Electronic Access Members may
participate in a PIM.\17\ Accordingly, the proposed rebates are
designed to incentivize Electronic Access Members to submit a greater
amount of Regular Orders executed in PIM to the Exchange, particularly
Priority Customer PIM volume.
---------------------------------------------------------------------------
\17\ Any solicited Counter-Side Orders submitted by an
Electronic Access Member to trade against Agency Orders may not be
for the account of a Nasdaq ISE Market Maker assigned to the options
class. See Supplementary Material .06 to Options 3, Section 13.
---------------------------------------------------------------------------
Priority Customer Complex Order Rebates, Options 7, Section 4
Currently, the Exchange provides rebates to Priority Customer
complex orders based on the volume that a Member traded as provided for
within Options 7, Section 4, Complex Order Fees and Rebates.
Specifically, the Exchange calculates Total Affiliated Member or
Affiliated Entity \18\ Complex Order Volume (excluding Crossing Orders
and Responses to Crossing Order) as a percentage of Customer TCV to
determine the rebate amount.\19\ The Exchange pays Priority Customer
complex orders rebates based on a ten-tier pricing model. The rebates
for Select Symbols and Non-Select Symbols are paid to Members based on
the percentage of Customer TCV executed in a particular symbol. The
current rebate tiers are as follows:
---------------------------------------------------------------------------
\18\ An ``Affiliated Entity'' is a relationship between an
Appointed Market Maker and an Appointed OFP for purposes of
qualifying for certain pricing specified in the Schedule of Fees.
Market Makers and OFPs are required to send an email to the Exchange
to appoint their counterpart, at least 3 business days prior to the
last day of the month to qualify for the next month. The Exchange
will acknowledge receipt of the emails and specify the date the
Affiliated Entity is eligible for applicable pricing, as specified
in the Pricing Schedule. Each Affiliated Entity relationship will
commence on the 1st of a month and may not be terminated prior to
the end of any month. An Affiliated Entity relationship will
automatically renew each month until or unless either party
terminates earlier in writing by sending an email to the Exchange at
least 3 business days prior to the last day of the month to
terminate for the next month. Affiliated Members may not qualify as
a counterparty comprising an Affiliated Entity. Each Member may
qualify for only one (1) Affiliated Entity relationship at any given
time. See Options 7, Section 1(c).
\19\ The rebate for the highest tier volume achieved is applied
retroactively to all eligible Priority Customer Complex volume once
the threshold has been reached. Members do not receive rebates for
net zero complex orders. For purposes of determining which complex
orders qualify as ``net zero'' the Exchange counts all complex
orders that leg in to the Regular Order book and are executed at a
net price per contract that is within a range of $0.01 credit and
$0.01 debit.
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. Affiliated Entities may aggregate
their Complex Order volume for purposes of calculating Priority
Customer Rebates. The Appointed OFP would receive the rebate
associated with the qualifying volume tier based on aggregated
volume. See notes 7, 13 and 16 within the Pricing Schedule at
Options 7, Section 4.
Priority Customer Rebates
----------------------------------------------------------------------------------------------------------------
Total affiliated member or affiliated
entity complex order volume (excluding
Priority customer complex tier \(7)\ crossing orders and responses to Rebate for Rebate for non-
\(13)\ \(16)\ crossing orders) calculated as a select select symbols
percentage of customer total symbols \(1)\ \(1)\ \(4)\
consolidated volume
----------------------------------------------------------------------------------------------------------------
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%-0.450%..................... (0.35) (0.70)
Tier 4................................ Above 0.450%-0.750%..................... (0.40) (0.75)
Tier 5................................ Above 0.750%-1.000%..................... (0.45) (0.80)
Tier 6................................ Above 1.000%-1.350%..................... (0.47) (0.80)
Tier 7................................ Above 1.350%-2.000%..................... (0.48) (0.80)
Tier 8................................ Above 2.000%-2.750%..................... (0.52) (0.85)
Tier 9................................ Above 2.750%-4.500%..................... (0.52) (0.86)
Tier 10............................... Above 4.500%............................ (0.53) (0.88)
----------------------------------------------------------------------------------------------------------------
The Exchange offers the Priority Customer complex order rebates to
encourage Members to bring complex volume to the Exchange, including
incentivizing Members to bring Priority Customer complex orders
specifically to earn the associated rebates.
[[Page 53027]]
The Exchange proposes to amend the volume requirement for Priority
Customer complex order Tier 7 from the current level of ``above 1.350%-
2.00%'' to ``above 1.350%-1.750%.'' The Exchange also proposes to
adjust Priority Customer complex order Tier 8 from the current level of
``above 2.000%-2.750%'' to ``above 1.750%-2.750%.'' \20\ By lowering
the qualification for Priority Customer complex order Tier 8, which
offers a higher rebate of $0.52 per contract for Select Symbols as
compared to $0.48 per contract for Priority Customer complex order Tier
7 and a higher rebate of $0.85 per contract for Non-Select Symbols as
compared to $0.80 per contract for Priority Customer complex order Tier
7, the Exchange seeks to incentivize Members to continue to bring
Priority Customer complex orders specifically to earn the higher
Priority Customer complex order Tier 8 associated rebates.
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\20\ Currently no Member qualifies for Priority Customer complex
order Tier 8.
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The Exchange notes that all Members may elect to qualify for the
Priority Customer complex rebates by submitting complex order flow to
the Exchange and earn a rebate on their Priority Customer complex
volume. Accordingly, the proposed changes are designed to increase the
amount of complex order flow Members bring to the Exchange,
particularly Priority Customer complex volume, and further encourage
them to contribute to a deeper, more liquid market to the benefit of
all market participants.
Technical Amendments
The Exchange proposes to make technical amendments to Options 7,
Section 6B to remove the words ``Price Improvement Mechanism'' and the
parenthesis around the word ``PIM'' because this term is already
defined within the term ``Crossing Order'' at Options 7, Section 1(c).
The Exchange proposes to capitalize the work ``affiliated'' in
Options 7, Section 6B because the term ``Affiliated Member'' is defined
within Options 7, Section 1(c).
The Exchange proposes to remove the phrase ``provided there is at
least 75% common ownership between the Members as reflected on each
Member's Form BD, Schedule A'' because the term ``Affiliated Member''
is defined in Options 7, Section 1(c) as a Member that shares at least
75% common ownership with a particular Member as reflected on the
Member's Form BD, Schedule A.
Finally, the Exchange proposes to remove the extra period at the
end of Options 7, Section 6B.
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
Sections 6(b)(4) and 6(b)(5) of the Act,\22\ 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.
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\21\ 15 U.S.C. 78f(b).
\22\ 15 U.S.C. 78f(b)(4) and (5).
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The Proposal Is Reasonable
The proposed changes to its Pricing Schedule are reasonable in
several respects. As a threshold matter, the Exchange is subject to
significant competitive forces in the market for options transaction
services that constrain its pricing determinations in that market. The
fact that this market is competitive has long been recognized by the
courts. In NetCoalition v. Securities and Exchange Commission \23\
(``NetCoalition''), the D.C. Circuit stated, ``[n]o one disputes that
competition for order flow is `fierce.' . . . As the SEC explained,
`[i]n the U.S. national market system, buyers and sellers of
securities, and the broker-dealers that act as their order-routing
agents, have a wide range of choices of where to route orders for
execution'; [and] `no exchange can afford to take its market share
percentages for granted' because `no exchange possesses a monopoly,
regulatory or otherwise, in the execution of order flow from broker
dealers' . . . .'' \24\
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\23\ NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010).
\24\ Id. at 539 (quoting Securities Exchange Act Release No.
59039 (December 2, 2008), 73 FR 74770, 74782-83 (December 9, 2008)
(SR-NYSEArca-2006-21)).
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Numerous indicia demonstrate the competitive nature of this market.
For example, clear substitutes to the Exchange exist in the market for
options transaction services. The Exchange is only one of sixteen
options exchanges to which market participants may direct their order
flow. Within this environment, market participants can freely and often
do shift their order flow among the Exchange and competing venues in
response to changes in their respective pricing schedules. Within the
foregoing context, the proposal represents a reasonable attempt by the
Exchange to attract additional order flow to the Exchange and increase
its market share relative to its competitors.
Price Improvement Auctions, Options 7, Sections 3 and 6
The Exchange's proposal to pay Priority Customer PIM Break-Up
Rebates of $0.25 per contract for Select Symbols and $0.60 per contract
for Non-Select Symbols to Electronic Access Members that utilize PIM to
execute more than 0.75% of Priority Customer volume in Regular Orders,
which would be calculated as a percentage of Customer TCV per day in a
given month, for orders under 100 contracts is reasonable because it is
designed to incentivize additional participation in PIM by encouraging
market participants to send additional order flow to the Exchange in
order to benefit from the increased rebates. In particular, the
Exchange believes that this proposal will incentivize Electronic Access
Members to submit a greater amount of smaller Priority Customer orders
into PIM for price improvement with the proposed pricing. The Exchange
believes it is reasonable to pay the rebate for orders of 100 contracts
or less because the Exchange seeks to incentivize small-sized orders to
be solicited for entry into PIM for price improvement.
The Exchange's proposal to pay Priority Customer PIM Break-Up
Rebates of $0.25 per contract for Select Symbols and $0.60 per contract
for Non-Select Symbols to Members that utilize PIM to execute more than
0.75% of Priority Customer volume in Regular Orders, which would be
calculated as a percentage of Customer TCV per day in a given month,
for orders under 100 contracts is equitable and not unfairly
discriminatory because any Electronic Access Member may participate in
a PIM.\25\ While only Electronic Access Members may initiate a PIM,
Market Makers may respond to a PIM. While this incentive is
specifically targeted towards Priority Customer orders, the Exchange
does not believe that this is unfairly discriminatory. Of note, today,
Priority Customers pay no Fees for PIM Orders. Priority Customer
liquidity benefits all market participants by providing more trading
opportunities which attracts market makers. An increase in the activity
of these market participants (particularly in response to pricing) in
turn facilitates tighter spreads which may cause an additional
[[Page 53028]]
corresponding increase in order flow from other market participants.
Attracting more liquidity from Priority Customers will benefit all
market participants that trade on the ISE. Also, the 100 contracts
threshold would be uniformly applied in paying the rebate.
---------------------------------------------------------------------------
\25\ Any solicited Counter-Side Orders submitted by an
Electronic Access Member to trade against Agency Orders may not be
for the account of a Nasdaq ISE Market Maker assigned to the options
class. See Supplementary Material .06 to Options 3, Section 13.
---------------------------------------------------------------------------
The Exchange's proposal to offer another rebate for PIM executions
to Electronic Access Members that utilize PIM to execute more than
0.75% of Priority Customer volume in Regular Orders, calculated as a
percentage of Customer TCV per day in a given month, for Priority
Customer Regular Orders executed in PIM under 100 contracts is
reasonable because it is designed to incentivize additional
participation in PIM by encouraging market participants to send
additional order flow to the Exchange in order to benefit from the
increased rebates. In particular, the Exchange believes that this
additional rebate will incentivize Electronic Access Members to submit
a greater amount of smaller-sized orders to be solicited for entry into
PIM for price improvement. Aggregating volume from Affiliated Members
in calculating the percentage will allow Electronic Access Members to
obtain greater rebates and, thereby, should attract additional Priority
Customer order flow to the Exchange. Not paying the $0.11 per contract
rebate in the event a Crossing Transaction consists of two Priority
Customer Orders is reasonable because Priority Customers pay no fees
for PIM.
The Exchange's proposal to offer another rebate for PIM executions
to Electronic Access Members that utilize PIM to execute more than
0.75% of Priority Customer volume in Regular Orders, calculated as a
percentage of Customer TCV per day in a given month, for Priority
Customer Regular Orders executed in PIM under 100 contracts is
equitable and not unfairly discriminatory because any Electronic Access
Member may enter orders into PIM.\26\ While only Electronic Access
Members may initiate a PIM, the Exchange notes that Market Makers may
respond to a PIM. While this incentive is specifically targeted towards
Priority Customer orders, the Exchange does not believe that this is
unfairly discriminatory. Of note, today, Priority Customers pay no Fees
for PIM Orders. Priority Customer liquidity benefits all market
participants by providing more trading opportunities which attracts
market makers. An increase in the activity of these market participants
(particularly in response to pricing) in turn facilitates tighter
spreads which may cause an additional corresponding increase in order
flow from other market participants. Attracting more liquidity from
Priority Customers will benefit all market participants that trade on
the ISE. Also, the 100 contracts threshold would be uniformly applied
in paying the rebate. All Electronic Access Members may aggregate
volume from Affiliated Members to receive the rebate. It is not novel
to limit a rebate by contract size. For example, ISE currently pays a
reduced complex order rebate in Select Symbols where the largest leg of
the Complex Order is under fifty (50) contracts and trades with quotes
and orders on the Regular Order book.\27\ Additionally, Cboe Exchange,
Inc. (``Cboe'') has a similar concept of limiting certain fee
incentives in its Fees Schedule for smaller sized customer orders.\28\
---------------------------------------------------------------------------
\26\ Any solicited Counter-Side Orders submitted by an
Electronic Access Member to trade against Agency Orders may not be
for the account of a Nasdaq ISE Market Maker assigned to the options
class. See Supplementary Material .06 to Options 3, Section 13.
\27\ ISE's rebate is paid per contract per leg if the order
trades with non-Priority Customer orders in the Complex Order Book.
This rebate is reduced by $0.15 per contract in Select Symbols where
the largest leg of the Complex Order is under fifty (50) contracts
and trades with quotes and orders on the Regular Order book.
Further, no Priority Customer Complex Order rebates are provided in
Select Symbols if any leg of the order that trades with interest on
the Regular Order book is fifty (50) contracts or more. Also, no
Priority Customer Complex Order rebates are provided in Non-Select
Symbols if any leg of the order trades with interest on the Regular
Order book, irrespective of order size. See note 1 of ISE Options 7,
Section 4.
\28\ See Cboe Fees Schedule at footnote 9. Cboe waives
transaction fees for customer orders removing liquidity that are of
99 contracts or less in ETF and ETN options.
---------------------------------------------------------------------------
Priority Customer Complex Order Rebates, Options 7, Section 4
The Exchange's proposal to amend the volume requirement for
Priority Customer complex order Tier 7 from the current level of
``above 1.350%-2.00%'' to ``above 1.350%-1.750%'' and amend Priority
Customer complex order Tier 8 from the current level of ``above 2.000%-
2.750%'' to ``above 1.750%-2.750%'' is reasonable because by lowering
the qualification for Priority Customer complex order Tier 8, which
offers a higher rebate of $0.52 per contract for Select Symbols as
compared to $0.48 per contract for Priority Customer complex order Tier
7 and a higher rebate of $0.85 per contract for Non-Select Symbols as
compared to $0.80 per contract for Priority Customer complex order Tier
7, the Exchange seeks to incentivize Members to continue to bring
Priority Customer complex orders specifically to earn the higher
Priority Customer complex order Tier 8 associated rebates.\29\ The
ability to earn a higher rebate as a result of the lower volume
requirement is intended to further incentivize Members to bring
additional complex order flow, including Priority Customer complex
order flow, to the Exchange. The proposed changes are designed to make
the rebates more achievable and attractive to existing and potential
market participants. The Priority Customer complex rebate program is
optional and available to all Members that choose to send complex order
flow to the Exchange to earn a rebate on their Priority Customer
complex volume. To the extent the program, as modified, continues to
attract complex volume to the Exchange, the Exchange believes that the
proposed changes would improve the Exchange's overall competitiveness
and strengthen its market quality for all market participants.
---------------------------------------------------------------------------
\29\ Currently no Member qualifies for Priority Customer complex
order Tier 8.
---------------------------------------------------------------------------
The Exchange's proposal to amend the volume requirement for
Priority Customer complex order Tier 7 from the current level of
``above 1.350%-2.00%'' to ``above 1.350%-1.750%'' and amend Priority
Customer complex order Tier 8 from the current level of ``above 2.000%-
2.750%'' to ``above 1.750%-2.750%'' is equitable and not unfairly
discriminatory because any Member who brings complex order flow to the
Exchange may qualify for the rebates. The Exchange believes that the
proposed changes to Priority Customer complex order Tiers 7 and 8 are
an equitable allocation of rebates because the Exchange seeks to
further incentivize all Members to bring a significant amount of
complex volume to the Exchange in order to earn the highest range of
Priority Customer complex rebates offered by the Exchange. Accordingly,
the Exchange believes that the changes to Priority Customer complex
order Tiers 7 and 8 are reasonably designed to provide further
incentives for all Members interested in meeting the tier criteria to
submit additional Priority Customer complex volume to achieve the
higher rebates. Further, any Member may choose to qualify for the
rebate program by sending complex order flow to the Exchange. By
encouraging all Members to bring significant amounts of complex order
flow (i.e., to qualify for the higher tiers) in order to earn a rebate
on their Priority Customer complex orders, the Exchange seeks to
provide more trading opportunities for all market participants, promote
price discovery,
[[Page 53029]]
and improve the overall market quality of the Exchange.
Technical Amendments
The technical amendments proposed herein are non-substantive
because these amendments remove redundant defined terms, capitalize a
defined term, and correct a grammatical error.
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.
Intermarket Competition
The Exchange operates in a highly competitive market in which
market participants can readily favor competing venues if they deem fee
levels at a particular venue to be excessive, or rebate opportunities
available at other venues to be more favorable. In such an environment,
the Exchange must continually adjust its fees to remain competitive
with other exchanges. Because competitors are free to modify their own
fees in response, and because market participants may readily adjust
their order routing practices, the Exchange believes that the degree to
which fee changes in this market may impose any burden on competition
is extremely limited because other options exchanges offer similar
price improvement auctions as well as break-up rebates and customer
complex order rebates.
Moreover, as noted above, price competition between exchanges is
fierce, with liquidity and market share moving freely between exchanges
in reaction to fee and rebate changes. In sum, if the changes proposed
herein are unattractive to market participants, it is likely that the
Exchange will lose market share as a result. Accordingly, the Exchange
does not believe that the proposed changes will impair the ability of
members or competing order execution venues to maintain their
competitive standing in the financial markets.
Intramarket Competition
The proposal is designed to attract additional liquidity to ISE.
Specifically, amending the Priority Customer complex order rebates and
adopting two new PIM rebates will incentivize market participants to
direct liquidity to the Exchange. All market participants will benefit
from any increase in market activity that the proposal effectuates.
Price Improvement Auctions, Options 7, Sections 3 and 6
The Exchange's proposal to pay Priority Customer PIM Break-Up
Rebates within Options 7, Section 3, and offer another rebate for PIM
executions within Options 7, Section 6B, do not impose an undue burden
on competition because any Electronic Access Member may enter orders
into PIM.\30\ While only Electronic Access Members may initiate a PIM,
the Exchange does not believe that this creates an undue burden on
competition because Market Makers may respond to a PIM. While this
incentive is specifically targeted towards Priority Customer orders,
the Exchange does not believe that this is unfairly discriminatory.
Today, Priority Customers pay no fees for PIM Orders. Priority Customer
liquidity benefits all market participants by providing more trading
opportunities which attracts market makers. An increase in the activity
of these market participants (particularly in response to pricing) in
turn facilitates tighter spreads which may cause an additional
corresponding increase in order flow from other market participants.
Attracting more liquidity from Priority Customers will benefit all
market participants that trade on the ISE.
---------------------------------------------------------------------------
\30\ Any solicited Counter-Side Orders submitted by an
Electronic Access Member to trade against Agency Orders may not be
for the account of a Nasdaq ISE Market Maker assigned to the options
class. See Supplementary Material .06 to Options 3, Section 13.
---------------------------------------------------------------------------
Priority Customer Complex Order Rebates, Options 7, Section 4
The Exchange's proposal to amend the volume requirement for
Priority Customer complex order Tier 7 from the current level of
``above 1.350%-2.00%'' to ``above 1.350%-1.750%'' and amend Priority
Customer complex order Tier 8 from the current level of ``above 2.000%-
2.750%'' to ``above 1.750%-2.750%'' does not impose an undue burden on
competition because it will not place any category of Exchange
participant at a competitive disadvantage. Any Member who brings
complex order flow to the Exchange may qualify for the rebates. The
Exchange seeks to further incentivize all Members to bring a
significant amount of complex volume to the Exchange in order to earn
the highest range of Priority Customer complex rebates offered by the
Exchange. Further, any Member may choose to qualify for the rebate
program by sending complex order flow to the Exchange.
Technical Amendments
The technical amendments proposed herein are non-substantive
because these amendments remove redundant defined terms, capitalize a
defined term, and correct a grammatical error.
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 \31\ and Rule 19b-4(f)(2) \32\ 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.
---------------------------------------------------------------------------
\31\ 15 U.S.C. 78s(b)(3)(A)(ii).
\32\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-ISE-2022-16 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-2022-16. 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/
[[Page 53030]]
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-2022-16 and should be
submitted on or before September 20, 2022.
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\33\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\33\
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-18587 Filed 8-29-22; 8:45 am]
BILLING CODE 8011-01-P
