80 FR 34186 - Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Schedule of Fees
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 114 (June 15, 2015)
Federal Register Volume 80, Issue 114 (June 15, 2015)
| Page Range | 34186-34188 | |
| FR Document | 2015-14480 |
[Federal Register Volume 80, Number 114 (Monday, June 15, 2015)] [Notices] [Pages 34186-34188] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-14480] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-75131; File No. SR-ISE-2015-20] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Schedule of Fees June 9, 2015. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on June 1, [[Page 34187]] 2015, the International Securities Exchange, LLC (the ``Exchange'' or the ``ISE'') filed with the Securities and Exchange Commission the proposed rule change, as described in Items I, II, and III 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. --------------------------------------------------------------------------- \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 ISE proposes to amend the Schedule of Fees to increase the maker fee charged to Market Maker and Non-ISE Market Maker orders in Select Symbols when trading against Priority Customer complex orders that leg in from the complex order book. The text of the proposed rule change is available on the Exchange's Web site (http://www.ise.com), at the principal office of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the 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 these statements may be examined at the places specified in Item IV below. The self-regulatory organization 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 increase the maker fee charged to Market Maker \3\ and Non-ISE Market Maker \4\ orders in Select Symbols \5\ when trading against Priority Customer \6\ complex orders that leg in from the complex order book. Market Maker orders (other than Market Maker Plus orders) \7\ and Non-ISE Market Maker orders currently pay a maker fee of $0.10 per contract for regular orders in Select Symbols. This $0.10 per contract fee similarly applies to all Market Maker orders (including Market Maker Plus orders) and Non-ISE Market Maker orders when trading against Priority Customer complex orders that leg in from the complex order book pursuant to Rule 715(k). At the same time, the Exchange charges a taker fee to Priority Customer orders entered in the regular order book but provides a rebate to Priority Customer orders entered in the complex order book. The complex order rebates paid to Priority Customer orders, which apply regardless of whether those orders are executed on the complex order book or leg in to the regular order book, range from $0.30 per contract for the lowest tier to $0.46 per contract for the highest. To better align the fees charged for executing trades with the rebates paid out by ISE, the Exchange proposes to increase the maker fee for Market Maker (including Market Maker Plus) and Non-ISE Market Maker orders to $0.30 per contract when trading against Priority Customer orders that leg in from the complex order book. --------------------------------------------------------------------------- \3\ The term ``Market Makers'' refers to ``Competitive Market Makers'' and ``Primary Market Makers'' collectively. See Rule 100(a)(25). \4\ A ``Non-ISE Market Maker'' is a market maker as defined in Section 3(a)(38) of the Securities Exchange Act of 1934, as amended, registered in the same options class on another options exchange. \5\ ``Select Symbols'' are options overlying all symbols listed on the ISE that are in the Penny Pilot Program. \6\ 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 ISE Rule 100(a)(37A). \7\ A Market Maker Plus is a Market Maker who is on the National Best Bid or National Best Offer a specified percentage of the time for series trading between $0.03 and $3.00 (for options whose underlying stock's previous trading day's last sale price was less than or equal to $100) and between $0.10 and $3.00 (for options whose underlying stock's previous trading day's last sale price was greater than $100) in premium in each of the front two expiration months. The specified percentage is at least 80% but lower than 85% of the time for Tier 1, at least 85% but lower than 95% of the time for Tier 2, and at least 95% of the time for Tier 3. A Market Maker's single best and single worst quoting days each month based on the front two expiration months, on a per symbol basis, will be excluded in calculating whether a Market Maker qualifies for this rebate, if doing so will qualify a Market Maker for the rebate. --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,\8\ in general, and Section 6(b)(4) of the Act,\9\ in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among its members and other persons using its facilities. --------------------------------------------------------------------------- \8\ 15 U.S.C. 78f. \9\ 15 U.S.C. 78f(b)(4). --------------------------------------------------------------------------- The Exchange believes that the proposed fee change is reasonable and equitable as it aligns the fees associated with trading against legged-in Priority Customer orders with the rebates paid out by ISE. As explained above, the Exchange offers significant rebates to Priority Customer complex orders. This, combined with the low maker fees charged to regular orders, results a negative rate per contract when Priority Customer complex orders leg in to the regular order book. To reduce these negative economics, the Exchange believes that it is appropriate to increase the fees charged to Market Maker and Non-ISE Market Maker orders that trade against Priority Customer complex orders that leg in from the complex order book. In this regard, the Exchange notes that the proposed maker fees are equivalent to the rebate provided to Priority Customer complex orders that qualify for the lowest tier of rebate, and will therefore help offset those rebates. The proposed fees are also within the range of fees charged by other options exchanges, including, for example, BOX Options Exchange LLC (``BOX''), which charges a fee of $0.51 per contract for Market Maker orders in penny pilot classes when trading against a Public Customer. The Exchange notes that it is only proposing to increase the applicable maker fees for Market Maker and Non-ISE Market Maker orders, and not for Firm Proprietary \10\/Broker-Dealer \11\ or Professional Customer \12\ orders. The Exchange believes that this is not unfairly discriminatory as Market Makers and Non-ISE Market Makers are responsible for the majority of trading volume that executes against Priority Customer orders that leg in from the complex order book and are sophisticated enough to account for the higher fees that would be charged when trading against such orders. --------------------------------------------------------------------------- \10\ A ``Firm Proprietary'' order is an order submitted by a member for its own proprietary account. \11\ A ``Broker-Dealer'' order is an order submitted by a member for a broker-dealer account that is not its own proprietary account. \12\ A ``Professional Customer'' is a person or entity that is not a broker/dealer and is not a Priority Customer. --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,\13\ the Exchange does not believe that the proposed rule change will impose any burden on intermarket or intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed fees are designed to reduce the negative economics associated with orders that leg in from the complex order book, and are not intended to have any competitive impact. While the [[Page 34188]] proposed fee increase only applies to Market Maker and Non-ISE Market Maker orders, the Exchange does not believe that this will have any significant competitive impact as the proposed fees remain modest and are well within the range of fees charged by other options exchanges. The Exchange operates in a highly competitive market in which market participants can readily direct their order flow to competing venues. In such an environment, the Exchange must continually review, and consider adjusting, its fees and rebates to remain competitive with other exchanges. For the reasons described above, the Exchange believes that the proposed fee changes reflect this competitive environment. --------------------------------------------------------------------------- \13\ 15 U.S.C. 78f(b)(8). --------------------------------------------------------------------------- C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act \14\ and subparagraph (f)(2) of Rule 19b-4 thereunder,\15\ because it establishes a due, fee, or other charge imposed by ISE. --------------------------------------------------------------------------- \14\ 15 U.S.C. 78s(b)(3)(A)(ii). \15\ 17 CFR 240.19b-4(f)(2). --------------------------------------------------------------------------- At any time within 60 days of the filing of such 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 CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to rule-comments@sec.gov. Please include File Number SR-ISE-2015-20 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549. All submissions should refer to File Number SR-ISE-2015-20. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the ISE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-ISE-2015-20 and should be submitted on or before July 6, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\16\ --------------------------------------------------------------------------- \16\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2015-14480 Filed 6-12-15; 8:45 am] BILLING CODE 8011-01-P
![34186 Federal Register / Vol. 80, No. 114 / Monday, June 15, 2015 / Notices
increased.16 Moreover, the proposed their order flow to competing venues. In All submissions should refer to File
fees are competitive with fees charged such an environment, the Exchange Number SR–ISE–2015–19. This file
by other options exchanges and remain must continually review, and consider number should be included on the
attractive to members for this reason. adjusting, its fees and rebates to remain subject line if email is used. To help the
The Exchange notes that Priority competitive with other exchanges. For Commission process and review your
Customer orders will continue to the reasons described above, the comments more efficiently, please use
receive complex order rebates, while Exchange believes that the proposed fee only one method. The Commission will
other market participants will continue changes reflect this competitive post all comments on the Commission’s
to pay a fee. The Exchange does not environment. Internet Web site (http://www.sec.gov/
believe that this is unfairly rules/sro.shtml). Copies of the
C. Self-Regulatory Organization’s
discriminatory as a Priority Customer is submission, all subsequent
Statement on Comments on the
by definition not a broker or dealer in amendments, all written statements
Proposed Rule Change Received From
securities, and does not place more than with respect to the proposed rule
Members, Participants, or Others
390 orders in listed options per day on change that are filed with the
average during a calendar month for its The Exchange has not solicited, and Commission, and all written
own beneficial account(s). This does not intend to solicit, comments on communications relating to the
limitation does not apply to participants this proposed rule change. The proposed rule change between the
whose behavior is substantially similar Exchange has not received any Commission and any person, other than
to that of market professionals, unsolicited written comments from those that may be withheld from the
including Professional Customers, who members or other interested parties. public in accordance with the
will generally submit a higher number III. Date of Effectiveness of the provisions of 5 U.S.C. 552, will be
of orders (many of which do not result Proposed Rule Change and Timing for available for Web site viewing and
in executions) than Priority Customers. Commission Action printing in the Commission’s Public
With respect to Market Maker orders, Reference Room, 100 F Street NE.,
The foregoing rule change has become Washington, DC 20549 on official
the Exchange believes that it is
effective pursuant to Section business days between the hours of
reasonable and equitable to charge
19(b)(3)(A)(ii) of the Act 18 and 10:00 a.m. and 3:00 p.m. Copies of the
lower fees to Market Makers with subparagraph (f)(2) of Rule 19b–4
significant affiliated Priority Customer filing also will be available for
thereunder,19 because it establishes a inspection and copying at the principal
complex order volume, as this will due, fee, or other charge imposed by
incentivize members to bring additional office of the ISE. All comments received
ISE. will be posted without change; the
order flow to ISE, creating additional At any time within 60 days of the
liquidity to the benefit of all members Commission does not edit personal
filing of such proposed rule change, the identifying information from
that trade complex orders on the Commission summarily may
Exchange. The Exchange notes that the submissions. You should submit only
temporarily suspend such rule change if information that you wish to make
proposed tiered structure will allow it appears to the Commission that such
Market Makers to continue to pay the available publicly. All submissions
action is necessary or appropriate in the should refer to File Number SR–ISE–
same fees that they pay today by public interest, for the protection of
executing, through their affiliates, 2015–19 and should be submitted on or
investors, or otherwise in furtherance of before July 6, 2015.
sufficient Priority Customer complex the purposes of the Act. If the
order volume to qualify for the lower Commission takes such action, the For the Commission, by the Division of
fee. The Exchange does not believe that Commission shall institute proceedings Trading and Markets, pursuant to delegated
it is unfairly discriminatory only to authority.20
to determine whether the proposed rule
provide these lower fees to Market Robert W. Errett,
should be approved or disapproved.
Maker orders as Market Makers are Deputy Secretary.
subject to additional requirements and IV. Solicitation of Comments [FR Doc. 2015–14479 Filed 6–12–15; 8:45 am]
obligations (such as quoting Interested persons are invited to BILLING CODE 8011–01–P
requirements) that other market submit written data, views, and
participants are not. arguments concerning the foregoing,
including whether the proposed rule SECURITIES AND EXCHANGE
B. Self-Regulatory Organization’s COMMISSION
change is consistent with the Act.
Statement on Burden on Competition
Comments may be submitted by any of [Release No. 34–75131; File No. SR–ISE–
In accordance with Section 6(b)(8) of the following methods: 2015–20]
the Act,17 the Exchange does not believe
that the proposed rule change will Electronic Comments
Self-Regulatory Organizations;
impose any burden on intermarket or • Use the Commission’s Internet International Securities Exchange,
intramarket competition that is not comment form (http://www.sec.gov/ LLC; Notice of Filing and Immediate
necessary or appropriate in furtherance rules/sro.shtml); or Effectiveness of Proposed Rule
of the purposes of the Act. The • Send an email to rule-comments@ Change To Amend the Schedule of
Exchange believes that the proposed sec.gov. Please include File Number SR– Fees
complex order fees remain competitive ISE–2015–19 on the subject line.
asabaliauskas on DSK5VPTVN1PROD with NOTICES
with fees charged by other options June 9, 2015.
Paper Comments Pursuant to Section 19(b)(1) of the
exchanges. The Exchange operates in a
highly competitive market in which • Send paper comments in triplicate Securities Exchange Act of 1934 (the
market participants can readily direct to Secretary, Securities and Exchange ‘‘Act’’),1 and Rule 19b–4 thereunder,2
Commission, 100 F Street NE., notice is hereby given that on June 1,
16 See Securities Exchange Act Release No. 74525 Washington, DC 20549.
20 17 CFR 200.30–3(a)(12).
(March 18, 2015), 80 FR 15646 (March 24, 2015)
(SR–ISE–2015–09). 18 15 U.S.C. 78s(b)(3)(A)(ii). 1 15 U.S.C. 78s(b)(1).
17 15 U.S.C. 78f(b)(8). 19 17 CFR 240.19b–4(f)(2). 2 17 CFR 240.19b–4.
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![34188 Federal Register / Vol. 80, No. 114 / Monday, June 15, 2015 / Notices
proposed fee increase only applies to Electronic Comments SECURITIES AND EXCHANGE
Market Maker and Non-ISE Market COMMISSION
Maker orders, the Exchange does not • Use the Commission’s Internet
comment form (http://www.sec.gov/ [Investment Company Act Release No.
believe that this will have any 31664; 812–14428]
significant competitive impact as the rules/sro.shtml); or
proposed fees remain modest and are • Send an email to rule-comments@ Nuveen Fund Advisors, LLC, et al.;
well within the range of fees charged by sec.gov. Please include File Number SR– Notice of Application
other options exchanges. The Exchange ISE–2015–20 on the subject line.
operates in a highly competitive market June 8, 2015.
in which market participants can Paper Comments AGENCY: Securities and Exchange
readily direct their order flow to Commission (the ‘‘Commission’’).
• Send paper comments in triplicate
competing venues. In such an ACTION: Notice of an application for an
to Secretary, Securities and Exchange
environment, the Exchange must order under section 6(c) of the
continually review, and consider Commission, 100 F Street NE.,
Investment Company Act of 1940 (the
adjusting, its fees and rebates to remain Washington, DC 20549. ‘‘Act’’) for an exemption from sections
competitive with other exchanges. For All submissions should refer to File 2(a)(32), 5(a)(1), 22(d) and 22(e) of the
the reasons described above, the Number SR–ISE–2015–20. This file Act and rule 22c–1 under the Act, and
Exchange believes that the proposed fee number should be included on the under sections 6(c) and 17(b) of the Act
changes reflect this competitive subject line if email is used. To help the for an exemption from sections 17(a)(1)
environment. Commission process and review your and (2) of the Act, and under section
comments more efficiently, please use 12(d)(1)(J) for an exemption from
C. Self-Regulatory Organization’s
only one method. The Commission will sections 12(d)(1)(A) and (B) of the Act.
Statement on Comments on the
Proposed Rule Change Received From post all comments on the Commission’s
APPLICANTS: Nuveen ETF Trust (the
Members, Participants, or Others Internet Web site (http://www.sec.gov/
‘‘Trust’’), Nuveen Fund Advisors, LLC
rules/sro.shtml). Copies of the (‘‘Nuveen’’), and Nuveen Securities,
The Exchange has not solicited, and submission, all subsequent
does not intend to solicit, comments on LLC (‘‘Nuveen Securities’’).
amendments, all written statements SUMMARY OF APPLICATION: Applicants
this proposed rule change. The with respect to the proposed rule
Exchange has not received any request an order that permits: (a)
change that are filed with the Actively-managed series of the Trust to
unsolicited written comments from Commission, and all written
members or other interested parties. issue shares (‘‘Shares’’) redeemable in
communications relating to the large aggregations only (‘‘Creation
III. Date of Effectiveness of the proposed rule change between the Units’’); (b) secondary market
Proposed Rule Change and Timing for Commission and any person, other than transactions in Shares to occur at
Commission Action those that may be withheld from the negotiated market prices; (c) certain
public in accordance with the series to pay redemption proceeds,
The foregoing rule change has become provisions of 5 U.S.C. 552, will be under certain circumstances, more than
effective pursuant to Section available for Web site viewing and seven days after the tender of Creation
19(b)(3)(A)(ii) of the Act 14 and printing in the Commission’s Public Units for redemption; (d) certain
subparagraph (f)(2) of Rule 19b–4 affiliated persons of the series to deposit
Reference Room, 100 F Street NE.,
thereunder,15 because it establishes a securities into, and receive securities
Washington, DC 20549 on official
due, fee, or other charge imposed by from, the series in connection with the
ISE. business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the purchase and redemption of Creation
At any time within 60 days of the filing also will be available for Units; and (e) certain registered
filing of such proposed rule change, the inspection and copying at the principal management investment companies and
Commission summarily may office of the ISE. All comments received unit investment trusts outside of the
temporarily suspend such rule change if same group of investment companies as
will be posted without change; the
it appears to the Commission that such the series to acquire Shares.
Commission does not edit personal
action is necessary or appropriate in the DATES: Filing Dates: The application was
identifying information from
public interest, for the protection of filed on February 27, 2015 and amended
investors, or otherwise in furtherance of submissions. You should submit only
on June 3, 2015.
the purposes of the Act. If the information that you wish to make
available publicly. All submissions HEARING OR NOTIFICATION OF HEARING:
Commission takes such action, the An order granting the application will
Commission shall institute proceedings should refer to File Number SR–ISE–
2015–20 and should be submitted on or be issued unless the Commission orders
to determine whether the proposed rule a hearing. Interested persons may
should be approved or disapproved. before July 6, 2015.
request a hearing by writing to the
For the Commission, by the Division of Commission’s Secretary and serving
IV. Solicitation of Comments
Trading and Markets, pursuant to delegated applicants with a copy of the request,
Interested persons are invited to authority.16 personally or by mail. Hearing requests
submit written data, views, and Robert W. Errett, should be received by the Commission
asabaliauskas on DSK5VPTVN1PROD with NOTICES
arguments concerning the foregoing, Deputy Secretary. by 5:30 p.m. on July 2, 2015, and should
including whether the proposed rule [FR Doc. 2015–14480 Filed 6–12–15; 8:45 am] be accompanied by proof of service on
change is consistent with the Act. BILLING CODE 8011–01–P
applicants, in the form of an affidavit or,
Comments may be submitted by any of for lawyers, a certificate of service.
the following methods: Pursuant to rule 0–5 under the Act,
hearing requests should state the nature
14 15 U.S.C. 78s(b)(3)(A)(ii). of the writer’s interest, any facts bearing
15 17 CFR 240.19b–4(f)(2). 16 17 CFR 200.30–3(a)(12). upon the desirability of a hearing on the
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Document Created: 2015-12-15 15:13:43
Document Modified: 2015-12-15 15:13:43
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 80 FR 34186 |
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