80_FR_56698 80 FR 56517 - Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Schedule of Fees

80 FR 56517 - 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 181 (September 18, 2015)

Page Range56517-56519
FR Document2015-23398

Federal Register, Volume 80 Issue 181 (Friday, September 18, 2015)
[Federal Register Volume 80, Number 181 (Friday, September 18, 2015)]
[Notices]
[Pages 56517-56519]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-23398]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75912; File No. SR-ISE-2015-27]


Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change To Amend the Schedule of Fees

September 14, 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 September 1, 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The ISE proposes to amend the Schedule of Fees to increase certain 
complex order fees and rebates as described in more detail below. 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

[[Page 56518]]

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 Exchange currently provides volume-based tiered rebates for 
Priority Customer \3\ complex orders when these orders trade with non-
Priority Customer orders in the complex order book, or trade with 
quotes and orders on the regular order book. These complex order 
rebates are provided to members based on the member's average daily 
volume (``ADV'') in Priority Customer complex orders in six volume 
tiers as follows: 0 to 29,999 contracts (Tier 1), 30,000 to 59,999 
contracts (Tier 2), 60,000 to 99,999 contracts (Tier 3), 100,000 to 
149,999 contracts (Tier 4), 150,000 to 199,999 contracts (Tier 5), and 
200,000 or more contracts (Tier 6). Currently, Priority Customer 
complex orders receive a rebate of $0.30 per contract in Select Symbols 
\4\ and $0.63 per contract in Non-Select Symbols \5\ for Tier 1, $0.35 
per contract in Select Symbols and $0.71 per contract in Non-Select 
Symbols for Tier 2, $0.40 per contract in Select Symbols and $0.78 per 
contract in Non-Select Symbols for Tier 3, $0.43 per contract in Select 
Symbols and $0.80 per contract in Non-Select Symbols for Tier 4, $0.45 
per contract in Select Symbols and $0.82 per contract in Non-Select 
Symbols for Tier 5, and $0.46 per contract in Select Symbols and $0.83 
per contract in Non-Select Symbols for Tier 6.\6\ The Exchange now 
proposes to increase these rebates by $0.01 per contract for members 
that achieve Tiers 3, 4, 5, and 6. As proposed, the Priority Customer 
complex order rebate in Select Symbols will be increased to $0.41 per 
contract for Tier 3, $0.44 per contract for Tier 4, $0.46 per contract 
for Tier 5, and $0.47 per contact for Tier 6. For Non-Select Symbols 
the rebate will be increased to $0.79 per contract for Tier 3, $0.81 
per contract for Tier 4, $0.83 per contract for Tier 5, and $0.84 per 
contract for Tier 6. Other rebate amounts will remain unchanged from 
their current levels.
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    \3\ A ``Priority Customer'' is a person or entity that is to a 
broker/dealer in securities, and does not place more than 390 orders 
in listed options per day on a average during a calendar month for 
its own beneficial account(s), as defined in Rule 100(a)(37A).
    \4\ ``Select Symbols'' are options overlying all symbols listed 
on the ISE that are in the Penny Pilot Program.
    \5\ ``Non-Select Symbols'' are options overlying all symbols 
excluding Select Symbols.
    \6\ These rebates are provided per contract per leg if the order 
trades with non-Priority Customer orders in the complex order book, 
or trades with quotes and orders on the regular order book.
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    In addition, the Exchange charges complex order taker fees and an 
equivalent maker fee that applies specifically when trading against 
Priority Customer orders. In Select Symbols these fees are $0.46 per 
contract for Market Maker \7\ orders (or $0.43 per contract for Market 
Makers with total affiliated Priority Customer Complex ADV of 150,000 
or more contracts),\8\ and $0.47 per contract for Non-ISE Market 
Maker,\9\ Firm Proprietary \10\/Broker-Dealer,\11\ and Professional 
Customer \12\ orders. In Non-Select Symbols these fees are $0.85 per 
contract for Market Maker orders,\13\ and $0.87 per contract for Non-
ISE Market Maker, Firm Proprietary/Broker-Dealer, and Professional 
Customer orders. The Exchange now proposes to increase these fees by 
$0.01 per contract. As proposed, the taker fee and equivalent maker fee 
for trading against Priority Customer orders in Select Symbols will be 
increased to $0.47 per contract for Market Maker orders (or $0.44 per 
contract for Market Makers with total affiliated Priority Customer 
Complex ADV of 150,000 or more contracts), and $0.48 per contract for 
Non-ISE Market Maker, Firm Proprietary/Broker-Dealer, and Professional 
Customer orders. In Non-Select Symbols the fee will be increased to 
$0.86 per contract for Market Maker orders, and $0.88 per contract for 
Non-ISE Market Maker, Firm Proprietary/Broker-Dealer, and Professional 
Customer orders. Preferenced Market Makers will continue to receive the 
applicable discount of $0.02 per contract when trading against Priority 
Customer order preferenced to them in the complex order book.\14\
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    \7\ The term ``Market Makers'' refers to ``Competitive Market 
Makers'' and ``Primary Market Makers'' collectively. See Rule 
100(a)(25).
    \8\ ISE Market Makers or making or taking liquidity receive a 
discount of $0.02 when trading against Priority Customer orders 
preferenced to them in the complex order book in equity options that 
are able to be listed and traded on more than one options exchange. 
This discount does not apply to FX Options Symbols or to option 
classes designated by the Exchange to receive a guaranteed 
allocation pursuant to ISE Rule 722(b)(3)(i)(B).
    \9\ 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.
    \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.
    \13\ ISE Market Makers making or taking liquidity receive a 
discount of $0.02 when trading against Priority Customer orders 
preferenced to them in the complex order book in equity options that 
are able to be listed and traded on more than one options exchange. 
This discount does not apply to FX Options Symbols or to option 
classes designated by the Exchange to receive a guaranteed 
allocation pursuant to ISE Rule 722(b)(3)(i)(B).
    \14\ See notes 6 [sic] and 11 [sic] supra.
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    Finally, the Exchange charges a fee for responses to complex 
crossing orders that is $0.47 per contract for Market Maker, Non-ISE 
Market Maker, Firm Proprietary/Broker-Dealer, Professional Customer, 
and Priority Customer orders in Select Symbols. In Non-Select Symbols 
this response fee is $0.90 per contract for Market Maker orders, and 
$0.95 per contract for Non-ISE Market Maker, Firm Proprietary/Broker-
Dealer, Professional Customer, and Priority Customer orders. The 
Exchange now proposes to increase its complex order response fees by 
$0.01 per contract. As proposed, the response fee in Select Symbols 
will be increased to $0.48 per contract for all market participants, 
and the response fee in Non-Select Symbols will be increased to $0.91 
per contract for Market Maker orders, and $0.96 per contract for Non-
ISE Market Maker, Firm Proprietary/Broker-Dealer, Professional 
Customer, and Priority Customer orders.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\15\ in general, and 
Section 6(b)(4) of the Act,\16\ 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.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78f.
    \16\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange believes that it is reasonable and equitable to 
increase the rebates provided to Priority Customer complex orders, as 
these proposed rebates are designed to attract additional Priority 
Customer complex order volume to the Exchange. The Exchange already 
provides volume-based tiered rebates for Priority Customer complex 
orders, and believes that increasing the rebates will incentivize 
members to send additional order flow to the ISE in order to achieve 
these rebates for their Priority Customer complex order volume, 
creating additional liquidity to

[[Page 56519]]

the benefit of all members that trade complex orders on the Exchange. 
The Exchange also believes that the corresponding increase to the 
complex order taker fee and complex order maker fee for trading against 
Priority Customer orders, as well as the fee for responses to complex 
crossing orders, is reasonable and equitable as the proposed fees are 
set at levels that the Exchange believes will continue to be attractive 
to market participants that trade on ISE, and that are competitive with 
fees charged by other options exchanges.
    The Exchange notes that Priority Customer orders will continue to 
receive complex order rebates,\17\ while other market participants will 
continue to pay a fee. The Exchange does not believe that this is 
unfairly discriminatory as a Priority Customer is by definition not a 
broker or 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). This limitation does not apply to 
participants whose behavior is substantially similar to that of market 
professionals, including Professional Customers, who will generally 
submit a higher number of orders (many of which do not result in 
executions) than Priority Customers. The Exchange also notes that 
Market Maker orders will continue to be eligible for lower fees than 
other non-Priority Customer orders. The Exchange does not believe that 
it is unfairly discriminatory provide lower fees to Market Maker orders 
as Market Makers are subject to additional requirements and obligations 
(such as quoting requirements) that other market participants are not.
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    \17\ With the exception of responses to complex crossing orders 
where Priority Customers are charged a fee like other market 
participants.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\18\ 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 Exchange 
believes that the proposed complex order fees and rebates remain 
competitive with fees and rebates offered on 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.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78f(b)(8).
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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 \19\ and subparagraph (f)(2) of Rule 19b-4 
thereunder,\20\ because it establishes a due, fee, or other charge 
imposed by ISE.
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    \19\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \20\ 17 CFR 240.19b-4(f)(2).
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    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 Comments

     Use 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-2015-27 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-ISE-2015-27. 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 such filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; 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-2015-27, and should be 
submitted on or before October 9, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
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    \21\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-23398 Filed 9-17-15; 8:45 am]
BILLING CODE 8011-01-P



                                                                          Federal Register / Vol. 80, No. 181 / Friday, September 18, 2015 / Notices                                                56517

                                              implementation began on April 8, 2013                   to act as the Chair of the Operating                  inspection and copying at the
                                              and was completed on May 3, 2013.                       Committee. Any recommendation for an                  Participants’ principal offices. All
                                              Implementation of Phase II of the Plan                  amendment to the Plan from the                        comments received will be posted
                                              began on August 5, 2013 and was                         Operating Committee that receives an                  without change; the Commission does
                                              completed on February 24, 2014.                         affirmative vote of at least two-thirds of            not edit personal identifying
                                              Pursuant to this proposed amendment,                    the Participants, but is less than                    information from submissions. You
                                              the Participants propose to extend the                  unanimous, shall be submitted to the                  should submit only information that
                                              pilot period so that it is set to end April             Commission as a request for an                        you wish to make available publicly. All
                                              22, 2016.                                               amendment to the Plan initiated by the                submissions should refer to File
                                                                                                      Commission under Rule 608.                            Number 4–631 and should be submitted
                                              E. Analysis of Impact on Competition                       On July 30, 2015, the Operating                    on or before October 9, 2015.
                                                The proposed amendment to the Plan                    Committee, duly constituted and                         By the Commission.
                                              does not impose any burden on                           chaired by Ms. Karen Lorentz of the                   Brent J. Fields,
                                              competition that is not necessary or                    NYSE, on behalf of Committee
                                                                                                                                                            Secretary.
                                              appropriate in furtherance of the                       Chairman Mr. Christopher B. Stone of
                                                                                                                                                            [FR Doc. 2015–23415 Filed 9–17–15; 8:45 am]
                                              purposes of the Exchange Act. The                       FINRA, met and voted unanimously to
                                                                                                                                                            BILLING CODE 8011–01–P
                                              Participants do not believe that the                    amend the Plan as set forth herein in
                                              proposed Plan introduces terms that are                 accordance with Section III(C) of the
                                              unreasonably discriminatory for the                     Plan. The Plan Advisory Committee was
                                                                                                                                                            SECURITIES AND EXCHANGE
                                              purposes of Section 11A(c)(1)(D) of the                 notified in connection with the Ninth
                                                                                                                                                            COMMISSION
                                              Exchange Act.                                           Amendment and was in favor.
                                                                                                                                                            [Release No. 34–75912; File No. SR–ISE–
                                              F. Written Understanding or Agreements                  III. Solicitation of Comments                         2015–27]
                                              Relating to Interpretation of, or                          Interested persons are invited to
                                              Participation in the Plan                               submit written data, views, and                       Self-Regulatory Organizations;
                                                 The Participants have no written                     arguments concerning the foregoing,                   International Securities Exchange,
                                              understandings or agreements relating                   including whether the proposed Ninth                  LLC; Notice of Filing and Immediate
                                              to interpretation of the Plan. Section                  Amendment is consistent with the Act.                 Effectiveness of Proposed Rule
                                              II(C) of the Plan sets forth how any                       Comments may be submitted by any                   Change To Amend the Schedule of
                                              entity registered as a national securities              of the following methods:                             Fees
                                              exchange or national securities                         Electronic Comments                                   September 14, 2015.
                                              association may become a Participant.                                                                            Pursuant to Section 19(b)(1) of the
                                                                                                        • Use the Commission’s Internet
                                              G. Approval of Amendment of the Plan                    comment form (http://www.sec.gov/                     Securities Exchange Act of 1934 (the
                                                                                                      rules/sro.shtml); or                                  ‘‘Act’’),1 and Rule 19b–4 thereunder,2
                                                Each of the Plan’s Participants has                                                                         notice is hereby given that on
                                              executed a written amended Plan.                          • Send an email to rule-comments@
                                                                                                      sec.gov. Please include File Number 4–                September 1, 2015, the International
                                              H. Terms and Conditions of Access                       631 on the subject line.                              Securities Exchange, LLC (the
                                                                                                                                                            ‘‘Exchange’’ or the ‘‘ISE’’) filed with the
                                                Section II(C) of the Plan provides that               Paper Comments                                        Securities and Exchange Commission
                                              any entity registered as a national
                                                                                                         • Send paper comments in triplicate                the proposed rule change, as described
                                              securities exchange or national                                                                               in Items I, II, and III below, which items
                                                                                                      to Secretary, Securities and Exchange
                                              securities association under the                                                                              have been prepared by the self-
                                                                                                      Commission, 100 F Street NE.,
                                              Exchange Act may become a Participant                                                                         regulatory organization. The
                                                                                                      Washington, DC 20549–1090.
                                              by: (1) Becoming a participant in the                                                                         Commission is publishing this notice to
                                              applicable Market Data Plans, as defined                All submissions should refer to File
                                                                                                      Number 4–631. This file number should                 solicit comments on the proposed rule
                                              in Section I(F) of the Plan; (2) executing                                                                    change from interested persons.
                                              a copy of the Plan, as then in effect; (3)              be included on the subject line if email
                                              providing each then-current Participant                 is used. To help the Commission                       I. Self-Regulatory Organization’s
                                              with a copy of such executed Plan; and                  process and review your comments                      Statement of the Terms of the Substance
                                              (4) effecting an amendment to the Plan                  more efficiently, please use only one                 of the Proposed Rule Change
                                              as specified in Section III(B) of the Plan.             method. The Commission will post all                     The ISE proposes to amend the
                                                                                                      comments on the Commission’s Internet                 Schedule of Fees to increase certain
                                              I. Method of Determination and                          Web site (http://www.sec.gov/rules/
                                              Imposition, and Amount of, Fees and                                                                           complex order fees and rebates as
                                                                                                      sro.shtml). Copies of the submission, all             described in more detail below. The text
                                              Charges                                                 subsequent amendments, all written                    of the proposed rule change is available
                                                 Not applicable.                                      statements with respect to the Plan that              on the Exchange’s Web site (http://
                                                                                                      are filed with the Commission, and all                www.ise.com), at the principal office of
                                              J. Method and Frequency of Processor                    written communications relating to the
                                              Evaluation                                                                                                    the Exchange, and at the Commission’s
                                                                                                      Plan between the Commission and any                   Public Reference Room.
                                                 Not applicable.                                      person, other than those that may be
                                                                                                      withheld from the public in accordance                II. Self-Regulatory Organization’s
                                              K. Dispute Resolution                                   with the provisions of 5 U.S.C. 552, will             Statement of the Purpose of, and
                                                                                                                                                            Statutory Basis for, the Proposed Rule
tkelley on DSK3SPTVN1PROD with NOTICES




                                                Section III(C) of the Plan provides for               be available for Web site viewing and
                                              each Participant to designate an                        printing in the Commission’s Public                   Change
                                              individual to represent the Participant                 Reference Room, 100 F Street NE.,                        In its filing with the Commission, the
                                              as a member of an Operating Committee.                  Washington, DC 20549, on official                     self-regulatory organization included
                                              No later than the initial date of the Plan,             business days between the hours of
                                              the Operating Committee shall designate                 10:00 a.m. and 3:00 p.m. Copies of the                  1 15   U.S.C. 78s(b)(1).
                                              one member of the Operating Committee                   filing also will be available for                       2 17   CFR 240.19b–4.



                                         VerDate Sep<11>2014   18:47 Sep 17, 2015   Jkt 235001   PO 00000   Frm 00081   Fmt 4703   Sfmt 4703   E:\FR\FM\18SEN1.SGM     18SEN1


                                              56518                        Federal Register / Vol. 80, No. 181 / Friday, September 18, 2015 / Notices

                                              statements concerning the purpose of,                     will be increased to $0.41 per contract                   Maker, Firm Proprietary/Broker-Dealer,
                                              and basis for, the proposed rule change                   for Tier 3, $0.44 per contract for Tier 4,                and Professional Customer orders. In
                                              and discussed any comments it received                    $0.46 per contract for Tier 5, and $0.47                  Non-Select Symbols the fee will be
                                              on the proposed rule change. The text                     per contact for Tier 6. For Non-Select                    increased to $0.86 per contract for
                                              of these statements may be examined at                    Symbols the rebate will be increased to                   Market Maker orders, and $0.88 per
                                              the places specified in Item IV below.                    $0.79 per contract for Tier 3, $0.81 per                  contract for Non-ISE Market Maker,
                                              The self-regulatory organization has                      contract for Tier 4, $0.83 per contract for               Firm Proprietary/Broker-Dealer, and
                                              prepared summaries, set forth in                          Tier 5, and $0.84 per contract for Tier                   Professional Customer orders.
                                              sections A, B and C below, of the most                    6. Other rebate amounts will remain                       Preferenced Market Makers will
                                              significant aspects of such statements.                   unchanged from their current levels.                      continue to receive the applicable
                                                                                                           In addition, the Exchange charges                      discount of $0.02 per contract when
                                              A. Self-Regulatory Organization’s                         complex order taker fees and an                           trading against Priority Customer order
                                              Statement of the Purpose of, and                          equivalent maker fee that applies                         preferenced to them in the complex
                                              Statutory Basis for, the Proposed Rule                    specifically when trading against                         order book.14
                                              Change                                                    Priority Customer orders. In Select                          Finally, the Exchange charges a fee for
                                              1. Purpose                                                Symbols these fees are $0.46 per                          responses to complex crossing orders
                                                 The Exchange currently provides                        contract for Market Maker 7 orders (or                    that is $0.47 per contract for Market
                                              volume-based tiered rebates for Priority                  $0.43 per contract for Market Makers                      Maker, Non-ISE Market Maker, Firm
                                              Customer 3 complex orders when these                      with total affiliated Priority Customer                   Proprietary/Broker-Dealer, Professional
                                              orders trade with non-Priority Customer                   Complex ADV of 150,000 or more                            Customer, and Priority Customer orders
                                              orders in the complex order book, or                      contracts),8 and $0.47 per contract for                   in Select Symbols. In Non-Select
                                              trade with quotes and orders on the                       Non-ISE Market Maker,9 Firm                               Symbols this response fee is $0.90 per
                                              regular order book. These complex order                   Proprietary 10/Broker-Dealer,11 and                       contract for Market Maker orders, and
                                              rebates are provided to members based                     Professional Customer 12 orders. In Non-                  $0.95 per contract for Non-ISE Market
                                              on the member’s average daily volume                      Select Symbols these fees are $0.85 per                   Maker, Firm Proprietary/Broker-Dealer,
                                              (‘‘ADV’’) in Priority Customer complex                    contract for Market Maker orders,13 and                   Professional Customer, and Priority
                                              orders in six volume tiers as follows: 0                  $0.87 per contract for Non-ISE Market                     Customer orders. The Exchange now
                                              to 29,999 contracts (Tier 1), 30,000 to                   Maker, Firm Proprietary/Broker-Dealer,                    proposes to increase its complex order
                                              59,999 contracts (Tier 2), 60,000 to                      and Professional Customer orders. The                     response fees by $0.01 per contract. As
                                              99,999 contracts (Tier 3), 100,000 to                     Exchange now proposes to increase                         proposed, the response fee in Select
                                              149,999 contracts (Tier 4), 150,000 to                    these fees by $0.01 per contract. As                      Symbols will be increased to $0.48 per
                                              199,999 contracts (Tier 5), and 200,000                   proposed, the taker fee and equivalent                    contract for all market participants, and
                                              or more contracts (Tier 6). Currently,                    maker fee for trading against Priority                    the response fee in Non-Select Symbols
                                              Priority Customer complex orders                          Customer orders in Select Symbols will                    will be increased to $0.91 per contract
                                              receive a rebate of $0.30 per contract in                 be increased to $0.47 per contract for                    for Market Maker orders, and $0.96 per
                                              Select Symbols 4 and $0.63 per contract                   Market Maker orders (or $0.44 per                         contract for Non-ISE Market Maker,
                                              in Non-Select Symbols 5 for Tier 1,                       contract for Market Makers with total                     Firm Proprietary/Broker-Dealer,
                                              $0.35 per contract in Select Symbols                      affiliated Priority Customer Complex                      Professional Customer, and Priority
                                              and $0.71 per contract in Non-Select                      ADV of 150,000 or more contracts), and                    Customer orders.
                                              Symbols for Tier 2, $0.40 per contract in                 $0.48 per contract for Non-ISE Market
                                                                                                                                                                  2. Statutory Basis
                                              Select Symbols and $0.78 per contract
                                              in Non-Select Symbols for Tier 3, $0.43
                                                                                                          7 The   term ‘‘Market Makers’’ refers to                   The Exchange believes that the
                                                                                                        ‘‘Competitive Market Makers’’ and ‘‘Primary Market        proposed rule change is consistent with
                                              per contract in Select Symbols and                        Makers’’ collectively. See Rule 100(a)(25).
                                              $0.80 per contract in Non-Select                             8 ISE Market Makers or making or taking liquidity
                                                                                                                                                                  the provisions of Section 6 of the Act,15
                                              Symbols for Tier 4, $0.45 per contract in                 receive a discount of $0.02 when trading against          in general, and Section 6(b)(4) of the
                                              Select Symbols and $0.82 per contract                     Priority Customer orders preferenced to them in the       Act,16 in particular, in that it is designed
                                                                                                        complex order book in equity options that are able        to provide for the equitable allocation of
                                              in Non-Select Symbols for Tier 5, and                     to be listed and traded on more than one options
                                              $0.46 per contract in Select Symbols                      exchange. This discount does not apply to FX
                                                                                                                                                                  reasonable dues, fees, and other charges
                                              and $0.83 per contract in Non-Select                      Options Symbols or to option classes designated by        among its members and other persons
                                              Symbols for Tier 6.6 The Exchange now                     the Exchange to receive a guaranteed allocation           using its facilities.
                                                                                                        pursuant to ISE Rule 722(b)(3)(i)(B).                        The Exchange believes that it is
                                              proposes to increase these rebates by                        9 A ‘‘Non-ISE Market Maker’’ is a market maker
                                              $0.01 per contract for members that                                                                                 reasonable and equitable to increase the
                                                                                                        as defined in Section 3(a)(38) of the Securities
                                              achieve Tiers 3, 4, 5, and 6. As                          Exchange Act of 1934, as amended, registered in the       rebates provided to Priority Customer
                                              proposed, the Priority Customer                           same options class on another options exchange.           complex orders, as these proposed
                                              complex order rebate in Select Symbols
                                                                                                           10 A ‘‘Firm Proprietary’’ order is an order            rebates are designed to attract additional
                                                                                                        submitted by a member for its own proprietary             Priority Customer complex order
                                                                                                        account.
                                                 3 A ‘‘Priority Customer’’ is a person or entity that      11 A ‘‘Broker-Dealer’’ order is an order submitted
                                                                                                                                                                  volume to the Exchange. The Exchange
                                              is to a broker/dealer in securities, and does not         by a member for a broker-dealer account that is not       already provides volume-based tiered
                                              place more than 390 orders in listed options per day      its own proprietary account.                              rebates for Priority Customer complex
                                              on a average during a calendar month for its own
                                              beneficial account(s), as defined in Rule
                                                                                                           12 A ‘‘Professional Customer’’ is a person or entity
                                                                                                                                                                  orders, and believes that increasing the
                                                                                                        that is not a broker/dealer and is not a Priority         rebates will incentivize members to
                                              100(a)(37A).                                              Customer.
                                                 4 ‘‘Select Symbols’’ are options overlying all
                                                                                                           13 ISE Market Makers making or taking liquidity        send additional order flow to the ISE in
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                                              symbols listed on the ISE that are in the Penny Pilot     receive a discount of $0.02 when trading against          order to achieve these rebates for their
                                              Program.                                                  Priority Customer orders preferenced to them in the       Priority Customer complex order
                                                 5 ‘‘Non-Select Symbols’’ are options overlying all
                                                                                                        complex order book in equity options that are able        volume, creating additional liquidity to
                                              symbols excluding Select Symbols.                         to be listed and traded on more than one options
                                                 6 These rebates are provided per contract per leg      exchange. This discount does not apply to FX
                                                                                                                                                                   14 See notes 6 [sic] and 11 [sic] supra.
                                              if the order trades with non-Priority Customer            Options Symbols or to option classes designated by
                                                                                                                                                                   15 15 U.S.C. 78f.
                                              orders in the complex order book, or trades with          the Exchange to receive a guaranteed allocation
                                              quotes and orders on the regular order book.              pursuant to ISE Rule 722(b)(3)(i)(B).                      16 15 U.S.C. 78f(b)(4).




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                                                                          Federal Register / Vol. 80, No. 181 / Friday, September 18, 2015 / Notices                                                  56519

                                              the benefit of all members that trade                   continually review, and consider                        All submissions should refer to File
                                              complex orders on the Exchange. The                     adjusting, its fees and rebates to remain               Number SR–ISE–2015–27. This file
                                              Exchange also believes that the                         competitive with other exchanges. For                   number should be included on the
                                              corresponding increase to the complex                   the reasons described above, the                        subject line if email is used. To help the
                                              order taker fee and complex order maker                 Exchange believes that the proposed fee                 Commission process and review your
                                              fee for trading against Priority Customer               changes reflect this competitive                        comments more efficiently, please use
                                              orders, as well as the fee for responses                environment.                                            only one method. The Commission will
                                              to complex crossing orders, is                                                                                  post all comments on the Commission’s
                                                                                                      C. Self-Regulatory Organization’s                       Internet Web site (http://www.sec.gov/
                                              reasonable and equitable as the
                                                                                                      Statement on Comments on the                            rules/sro.shtml). Copies of the
                                              proposed fees are set at levels that the
                                                                                                      Proposed Rule Change Received From                      submission, all subsequent
                                              Exchange believes will continue to be
                                                                                                      Members, Participants, or Others                        amendments, all written statements
                                              attractive to market participants that
                                              trade on ISE, and that are competitive                    The Exchange has not solicited, and                   with respect to the proposed rule
                                              with fees charged by other options                      does not intend to solicit, comments on                 change that are filed with the
                                              exchanges.                                              this proposed rule change. The                          Commission, and all written
                                                 The Exchange notes that Priority                     Exchange has not received any                           communications relating to the
                                              Customer orders will continue to                        unsolicited written comments from                       proposed rule change between the
                                              receive complex order rebates,17 while                  members or other interested parties.                    Commission and any person, other than
                                              other market participants will continue                                                                         those that may be withheld from the
                                              to pay a fee. The Exchange does not                     III. Date of Effectiveness of the                       public in accordance with the
                                              believe that this is unfairly                           Proposed Rule Change and Timing for                     provisions of 5 U.S.C. 552, will be
                                              discriminatory as a Priority Customer is                Commission Action                                       available for Web site viewing and
                                              by definition not a broker or dealer in                    The foregoing rule change has become                 printing in the Commission’s Public
                                              securities, and does not place more than                effective pursuant to Section                           Reference Room, 100 F Street NE.,
                                              390 orders in listed options per day on                 19(b)(3)(A)(ii) of the Act 19 and                       Washington, DC 20549 on official
                                              average during a calendar month for its                 subparagraph (f)(2) of Rule 19b–4                       business days between the hours of
                                              own beneficial account(s). This                         thereunder,20 because it establishes a                  10:00 a.m. and 3:00 p.m. Copies of such
                                              limitation does not apply to participants               due, fee, or other charge imposed by                    filing also will be available for
                                              whose behavior is substantially similar                 ISE.                                                    inspection and copying at the principal
                                              to that of market professionals,                           At any time within 60 days of the                    office of the Exchange. All comments
                                              including Professional Customers, who                   filing of such proposed rule change, the                received will be posted without change;
                                              will generally submit a higher number                   Commission summarily may                                the Commission does not edit personal
                                              of orders (many of which do not result                  temporarily suspend such rule change if                 identifying information from
                                              in executions) than Priority Customers.                 it appears to the Commission that such                  submissions. You should submit only
                                              The Exchange also notes that Market                     action is necessary or appropriate in the               information that you wish to make
                                              Maker orders will continue to be eligible               public interest, for the protection of                  available publicly. All submissions
                                              for lower fees than other non-Priority                                                                          should refer to File Number SR–ISE–
                                                                                                      investors, or otherwise in furtherance of
                                              Customer orders. The Exchange does                                                                              2015–27, and should be submitted on or
                                                                                                      the purposes of the Act. If the
                                              not believe that it is unfairly                                                                                 before October 9, 2015.
                                                                                                      Commission takes such action, the
                                              discriminatory provide lower fees to                    Commission shall institute proceedings                    For the Commission, by the Division of
                                              Market Maker orders as Market Makers                    to determine whether the proposed rule                  Trading and Markets, pursuant to delegated
                                              are subject to additional requirements                                                                          authority.21
                                                                                                      should be approved or disapproved.
                                              and obligations (such as quoting                                                                                Brent J. Fields,
                                              requirements) that other market                         IV. Solicitation of Comments                            Secretary.
                                              participants are not.                                     Interested persons are invited to                     [FR Doc. 2015–23398 Filed 9–17–15; 8:45 am]

                                              B. Self-Regulatory Organization’s                       submit written data, views, and                         BILLING CODE 8011–01–P

                                              Statement on Burden on Competition                      arguments concerning the foregoing,
                                                                                                      including whether the proposed rule
                                                In accordance with Section 6(b)(8) of                 change is consistent with the Act.                      SECURITIES AND EXCHANGE
                                              the Act,18 the Exchange does not believe                Comments may be submitted by any of                     COMMISSION
                                              that the proposed rule change will                      the following methods:                                  [Release No. 34–75919]
                                              impose any burden on intermarket or
                                              intramarket competition that is not                     Electronic Comments                                     Order Pursuant to Sections 15F(b)(6)
                                              necessary or appropriate in furtherance                   • Use the Commission’s Internet                       and 36 of the Securities Exchange Act
                                              of the purposes of the Act. The                         comment form (http://www.sec.gov/                       of 1934 Extending Certain Temporary
                                              Exchange believes that the proposed                     rules/sro.shtml); or                                    Exemptions and a Temporary and
                                              complex order fees and rebates remain                     • Send an email to rule-comments@                     Limited Exception Related to Security-
                                              competitive with fees and rebates                       sec.gov. Please include File Number SR–                 Based Swaps
                                              offered on other options exchanges. The                 ISE–2015–27 on the subject line.
                                              Exchange operates in a highly                                                                                   September 15, 2015.
                                              competitive market in which market                      Paper Comments                                          I. Introduction
                                              participants can readily direct their
                                                                                                        • Send paper comments in triplicate
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                                              order flow to competing venues. In such                                                                            On June 15, 2011, the Securities and
                                                                                                      to Brent J. Fields, Secretary, Securities               Exchange Commission (‘‘Commission’’)
                                              an environment, the Exchange must
                                                                                                      and Exchange Commission, 100 F Street                   issued an order granting temporary
                                                17 With the exception of responses to complex
                                                                                                      NE., Washington, DC 20549–1090.                         exemptions and exceptions from
                                              crossing orders where Priority Customers are                                                                    compliance with certain provisions of
                                              charged a fee like other market participants.             19   15 U.S.C. 78s(b)(3)(A)(ii).
                                                18 15 U.S.C. 78f(b)(8).                                 20   17 CFR 240.19b–4(f)(2).                            21   17 CFR 200.30–3(a)(12).



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Document Created: 2015-12-15 09:28:03
Document Modified: 2015-12-15 09:28:03
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation80 FR 56517 

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