80 FR 64037 - 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 204 (October 22, 2015)
Federal Register Volume 80, Issue 204 (October 22, 2015)
| Page Range | 64037-64038 | |
| FR Document | 2015-26806 |
[Federal Register Volume 80, Number 204 (Thursday, October 22, 2015)] [Notices] [Pages 64037-64038] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-26806] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-76173; File No. SR-ISE-2015-32] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Schedule of Fees October 16, 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 October 1, 2015, the International Securities Exchange, LLC (the ``Exchange'' or ``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 ISE proposes to amend the Schedule of Fees as described in more detail below. The text of the proposed rule change is available on the Exchange's Internet Web site at 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 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 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 this proposed rule change is to amend the Schedule of Fees to modify the route-out fee applicable to Priority Customer\3\ orders in Non-Select Symbols.\4\ The Exchange presently charges Priority Customers route-out fees for orders routed to away markets pursuant to the Options Order Protection and Locked/Crossed Market Plan (the ``Plan''). Specifically, Priority Customer orders pay a route-out fee of $0.48 per contract in Select Symbols (including SPY),\5\ and $0.48 per contract in Non-Select Symbols. --------------------------------------------------------------------------- \3\ A Priority Customer is defined in ISE Rule 100(a)(37A) as a person or entity that (i) is not a broker or dealer in securities, and (ii) does not place more than 390 orders in listed options per day on average during a calendar month for its own beneficial account(s). \4\ ``Non- Select Symbols'' are options overlying all symbols excluding Select Symbols. \5\ ``Select Symbols'' are options overlying all symbols listed on ISE that are in the Penny Pilot Program. --------------------------------------------------------------------------- The Exchange now proposes to charge Priority Customers a route-out fee of $0.70 per contract for orders in Non-Select Symbols. The route- out fee applicable to Priority Customer orders in Select Symbols (including SPY) is not being changed. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,\6\ in general, and Section 6(b)(4) of the Act,\7\ 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. --------------------------------------------------------------------------- \6\ 15 U.S.C. 78f. \7\ 15 U.S.C. 78f(b)(4). --------------------------------------------------------------------------- In particular, the Exchange believes the proposed route-out fee is reasonable and equitable because it offsets costs incurred by the Exchange in connection with using unaffiliated broker-dealers to route Priority Customer orders to other exchanges for linkage executions. Furthermore, the Exchange believes that the proposed fee is not unfairly discriminatory because the route-out fee for Priority Customer orders in Non-Select Symbols, as has historically been the case, remains lower than fees for orders from other market participants, including Professional Customer and Non-Customer orders. The Exchange believes that it is equitable and not unfairly discriminatory to charge a lower route-out fee applicable to Priority Customer orders than Professional Customer and Non-Customer orders because 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). Further, the Exchange believes that the proposed fees are not unfairly discriminatory because these fees would be uniformly applied to all Priority Customer orders. As fees to access liquidity for Priority Customer orders have risen at other exchanges, it has become necessary for the Exchange to raise routing fees in order to recoup the higher costs. B. Self-Regulatory Organization's Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,\8\ 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 as it simply increases fees for routing Priority Customer orders in Non-Select Symbols and will uniformly apply to all Priority Customer orders that are routed out to other exchanges for linkage executions. Furthermore, the fee change does not impact intra-market competition as the route out fee applies to orders routed to away markets. --------------------------------------------------------------------------- \8\ 15 U.S.C. 78f(b)(8). --------------------------------------------------------------------------- The Exchange notes that members can and do route these orders to other markets or specify that ISE not route orders away on their behalf. As such, the Exchange operates in a highly competitive market in which market participants can readily direct their [[Page 64038]] order flow to competing venues. In such an environment, the Exchange must continually review, and consider adjusting, its fees to remain competitive with other exchanges. For the reasons described above, the Exchange believes that the proposed fee change reflects this competitive environment. 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,\9\ and subparagraph (f)(2) of Rule 19b-4 thereunder,\10\ because it establishes a due, fee, or other charge imposed by ISE. --------------------------------------------------------------------------- \9\ 15 U.S.C. 78s(b)(3)(A)(ii). \10\ 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 [email protected]. Please include File No. SR-ISE-2015-32 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-2015-32. 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-2015-32 and should be submitted by November 12, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\11\ --------------------------------------------------------------------------- \11\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Brent J. Fields, Secretary. [FR Doc. 2015-26806 Filed 10-21-15; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 80, No. 204 / Thursday, October 22, 2015 / Notices 64037
Commission and any person, other than below. The text of the proposed rule to provide for the equitable allocation of
those that may be withheld from the change is available on the Exchange’s reasonable dues, fees, and other charges
public in accordance with the Internet Web site at http://www.ise.com, among its members and other persons
provisions of 5 U.S.C. 552, will be at the principal office of the Exchange, using its facilities.
available for Web site viewing and and at the Commission’s Public In particular, the Exchange believes
printing in the Commission’s Public Reference Room. the proposed route-out fee is reasonable
Reference Room, 100 F Street NE., and equitable because it offsets costs
II. Self-Regulatory Organization’s incurred by the Exchange in connection
Washington, DC 20549 on official
Statement of the Purpose of, and with using unaffiliated broker-dealers to
business days between the hours of
Statutory Basis for, the Proposed Rule route Priority Customer orders to other
10:00 a.m. and 3:00 p.m. Copies of such
Change exchanges for linkage executions.
filing also will be available for
inspection and copying at the principal In its filing with the Commission, the Furthermore, the Exchange believes that
office of the Exchange. All comments Exchange included statements the proposed fee is not unfairly
received will be posted without change; concerning the purpose of, and basis for, discriminatory because the route-out fee
the Commission does not edit personal the proposed rule change and discussed for Priority Customer orders in Non-
identifying information from any comments it received on the Select Symbols, as has historically been
submissions. You should submit only proposed rule change. The text of these the case, remains lower than fees for
information that you wish to make statements may be examined at the orders from other market participants,
available publicly. All submissions places specified in Item IV below. The including Professional Customer and
should refer to File Number SR–ISE self-regulatory organization has Non-Customer orders.
Gemini–2015–20 and should be prepared summaries, set forth in The Exchange believes that it is
submitted by November 12, 2015. Sections A, B and C below, of the most equitable and not unfairly
significant aspects of such statements. discriminatory to charge a lower route-
For the Commission, by the Division of
Trading and Markets, pursuant to delegated out fee applicable to Priority Customer
A. Self-Regulatory Organization’s
authority.15 orders than Professional Customer and
Statement of the Purpose of, and
Brent J. Fields, Non-Customer orders because a Priority
Statutory Basis for, the Proposed Rule
Customer is by definition not a broker
Secretary. Change
or dealer in securities, and does not
[FR Doc. 2015–26805 Filed 10–21–15; 8:45 am]
1. Purpose place more than 390 orders in listed
BILLING CODE 8011–01–P
The purpose of this proposed rule options per day on average during a
change is to amend the Schedule of Fees calendar month for its own beneficial
SECURITIES AND EXCHANGE to modify the route-out fee applicable to account(s). Further, the Exchange
COMMISSION Priority Customer3 orders in Non-Select believes that the proposed fees are not
Symbols.4 The Exchange presently unfairly discriminatory because these
[Release No. 34–76173; File No. SR–ISE– charges Priority Customers route-out fees would be uniformly applied to all
2015–32] Priority Customer orders. As fees to
fees for orders routed to away markets
pursuant to the Options Order access liquidity for Priority Customer
Self-Regulatory Organizations;
Protection and Locked/Crossed Market orders have risen at other exchanges, it
International Securities Exchange,
Plan (the ‘‘Plan’’). Specifically, Priority has become necessary for the Exchange
LLC; Notice of Filing and Immediate
Customer orders pay a route-out fee of to raise routing fees in order to recoup
Effectiveness of Proposed Rule
$0.48 per contract in Select Symbols the higher costs.
Change To Amend the Schedule of
Fees (including SPY),5 and $0.48 per contract B. Self-Regulatory Organization’s
in Non-Select Symbols. Statement on Burden on Competition
October 16, 2015. The Exchange now proposes to charge
Pursuant to Section 19(b)(1) of the Priority Customers a route-out fee of In accordance with Section 6(b)(8) of
Securities Exchange Act of 1934 (the $0.70 per contract for orders in Non- the Act,8 the Exchange does not believe
‘‘Act’’),1 and Rule 19b–4 thereunder,2 Select Symbols. The route-out fee that the proposed rule change will
notice is hereby given that on October applicable to Priority Customer orders impose any burden on intermarket or
1, 2015, the International Securities in Select Symbols (including SPY) is not intramarket competition that is not
Exchange, LLC (the ‘‘Exchange’’ or being changed. necessary or appropriate in furtherance
‘‘ISE’’) filed with the Securities and of the purposes of the Act as it simply
2. Statutory Basis increases fees for routing Priority
Exchange Commission the proposed
rule change, as described in Items I, II, The Exchange believes that the Customer orders in Non-Select Symbols
and III below, which Items have been proposed rule change is consistent with and will uniformly apply to all Priority
prepared by the self-regulatory the provisions of Section 6 of the Act,6 Customer orders that are routed out to
organization. The Commission is in general, and Section 6(b)(4) of the other exchanges for linkage executions.
publishing this notice to solicit Act,7 in particular, in that it is designed Furthermore, the fee change does not
comments on the proposed rule change impact intra-market competition as the
from interested persons.
3 A Priority Customer is defined in ISE Rule route out fee applies to orders routed to
100(a)(37A) as a person or entity that (i) is not a away markets.
I. Self-Regulatory Organization’s broker or dealer in securities, and (ii) does not place
more than 390 orders in listed options per day on
The Exchange notes that members can
Statement of the Terms of Substance of average during a calendar month for its own and do route these orders to other
tkelley on DSK3SPTVN1PROD with NOTICES
the Proposed Rule Change beneficial account(s). markets or specify that ISE not route
ISE proposes to amend the Schedule
4 ‘‘Non- Select Symbols’’ are options overlying all
orders away on their behalf. As such,
symbols excluding Select Symbols. the Exchange operates in a highly
of Fees as described in more detail 5 ‘‘Select Symbols’’ are options overlying all
symbols listed on ISE that are in the Penny Pilot
competitive market in which market
15 17 CFR 200.30–3(a)(12). Program. participants can readily direct their
1 15 U.S.C. 78s(b)(1). 6 15 U.S.C. 78f.
2 17 CFR 240.19b–4. 7 15 U.S.C. 78f(b)(4). 8 15 U.S.C. 78f(b)(8).
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![64038 Federal Register / Vol. 80, No. 204 / Thursday, October 22, 2015 / Notices
order flow to competing venues. In such All submissions should refer to File On May 27, 2014, the law judge found
an environment, the Exchange must Number SR–ISE–2015–32. This file that ZPRIM violated Sections 206(1), (2),
continually review, and consider number should be included on the and (4) of the Investment Advisers Act
adjusting, its fees to remain competitive subject line if email is used. To help the of 1940 and Advisers Act Rule 206(4)–
with other exchanges. For the reasons Commission process and review your 1(a)(5), by misrepresenting compliance
described above, the Exchange believes comments more efficiently, please use with the Global Investment Performance
that the proposed fee change reflects only one method. The Commission will Standards (‘‘GIPS’’) in magazine
this competitive environment. post all comments on the Commission’s advertisements and investment report
Internet Web site (http://www.sec.gov/ newsletters. The initial decision also
C. Self-Regulatory Organization’s
rules/sro.shtml). Copies of the found that Zavanelli aided, abetted, and
Statement on Comments on the
submission, all subsequent caused, and was primarily liable under
Proposed Rule Change Received From
amendments, all written statements Sections 206(1) and (2) for, each of
Members, Participants or Others
with respect to the proposed rule ZPRIM’s violations based on these
The Exchange has not solicited, and change that are filed with the misrepresentations.
does not intend to solicit, comments on Commission, and all written In addition, the law judge found that
this proposed rule change. The communications relating to the ZPRIM violated Sections 206(2) and (4)
Exchange has not received any proposed rule change between the and Rule 206(4)–1(a)(5) by negligently
unsolicited written comments from Commission and any person, other than claiming in a Morningstar report for the
members or other interested parties. those that may be withheld from the period ended September 30, 2010 that
III. Date of Effectiveness of the public in accordance with the (a) an independent third party had
Proposed Rule Change and Timing for provisions of 5 U.S.C. 552, will be verified ZPRIM’s compliance with GIPS
Commission Action available for Web site viewing and ‘‘to the present,’’ and (b) ZPRIM was not
printing in the Commission’s Public under Commission investigation,
The foregoing rule change has become Reference Room, 100 F Street NE., although neither of these things was
effective pursuant to Section Washington, DC 20549 on official true. The law judge also found that
19(b)(3)(A)(ii) of the Act,9 and business days between the hours of ZPRIM violated Sections 206(1), (2), and
subparagraph (f)(2) of Rule 19b–4 10:00 a.m. and 3:00 p.m. Copies of such (4) and Rule 206(4)–1(a)(5) by repeating
thereunder,10 because it establishes a filing also will be available for its false claim that it was not under
due, fee, or other charge imposed by inspection and copying at the principal Commission investigation in a
ISE. office of the Exchange. All comments Morningstar report for the period ended
At any time within 60 days of the received will be posted without change; March 31, 2011. The initial decision
filing of such proposed rule change, the the Commission does not edit personal found that Zavanelli caused each of
Commission summarily may identifying information from ZPRIM’s Morningstar violations but did
temporarily suspend such rule change if submissions. You should submit only not aid and abet them.
it appears to the Commission that such information that you wish to make For these violations, the law judge
action is necessary or appropriate in the available publicly. All submissions barred Zavanelli from association with
public interest, for the protection of should refer to File Number SR–ISE– any investment adviser, broker, dealer,
investors, or otherwise in furtherance of 2015–32 and should be submitted by municipal securities dealer, municipal
the purposes of the Act. If the November 12, 2015. advisor, transfer agent, or nationally
Commission takes such action, the
For the Commission, by the Division of recognized statistical rating
Commission shall institute proceedings
Trading and Markets, pursuant to delegated organization; ordered ZPRIM to cease
to determine whether the proposed rule authority.11 and desist from committing, and
should be approved or disapproved.
Brent J. Fields, Zavanelli to cease and desist from
IV. Solicitation of Comments Secretary. committing, aiding, abetting, or causing
Interested persons are invited to [FR Doc. 2015–26806 Filed 10–21–15; 8:45 am] the commission of, any violations or
submit written data, views, and BILLING CODE 8011–01–P future violations of Advisers Act
arguments concerning the foregoing, Sections 206(1), (2), and (4) and Rule
including whether the proposed rule 206(4)–1(a)(5); and imposed civil money
change is consistent with the Act. SECURITIES AND EXCHANGE penalties of $250,000 on ZPRIM and
Comments may be submitted by any of COMMISSION $660,000 on Zavanelli.
the following methods: Respondents appealed the initial
Sunshine Act Meeting decision’s findings of violation and the
Electronic Comments sanctions imposed. The issues likely to
• Use the Commission’s Internet Notice is hereby given, pursuant to be considered at oral argument include,
comment form (http://www.sec.gov/ the provisions of the Government in the among other things, whether
rules/sro.shtml); or Sunshine Act, Public Law 94–409, that Respondents violated the antifraud
• Send an email to rule-comments@ the Securities and Exchange provisions as alleged and, if so, what
sec.gov. Please include File No. SR–ISE– Commission will hold an Open Meeting sanction, if any, is appropriate in the
2015–32 on the subject line. on Monday, October 26, 2015, at 1:00 public interest.
p.m., in the Auditorium (L–002) at the For further information, please
Paper Comments Commission’s headquarters building, to contact the Office of the Secretary at
tkelley on DSK3SPTVN1PROD with NOTICES
• Send paper comments in triplicate hear oral argument in an appeal from an (202) 551–5400.
to Secretary, Securities and Exchange initial decision of an administrative law
judge by Respondents ZPR Investment Dated: October 19, 2015.
Commission, 100 F Street NE.,
Management, Inc. (‘‘ZPRIM’’), and Max Brent J. Fields,
Washington, DC 20549–1090.
E. Zavanelli (‘‘Zavanelli’’). Secretary.
9 15 U.S.C. 78s(b)(3)(A)(ii). [FR Doc. 2015–26972 Filed 10–20–15; 11:15 am]
10 17 CFR 240.19b–4(f)(2). 11 17 CFR 200.30–3(a)(12). BILLING CODE 8011–01–P
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Document Created: 2015-12-14 15:33:57
Document Modified: 2015-12-14 15:33:57
| 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 64037 |
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