80 FR 64041 - 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)

Page Range		64041-64042
FR Document		2015-26809

Federal Register, Volume 80 Issue 204 (Thursday, October 22, 2015)

[Federal Register Volume 80, Number 204 (Thursday, October 22, 2015)]
[Notices]
[Pages 64041-64042]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2015-26809]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76177; File No. SR-ISE-2015-31]

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 the ``ISE'') filed with the Securities and
Exchange Commission (``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 Substance
of the Proposed Rule Change

The ISE proposes to amend language in the Schedule of Fees related
to excluding days from its average daily volume calculations when the
market is not open for the entire trading day. 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
Currently, for purposes of determining a member's average daily
volume (``ADV''), any day that the regular or complex order books are
not open for the entire trading day may be excluded from such
calculation. The Exchange proposes to amend language in the Schedule of
Fees related to excluding days from the ADV calculations used to
determine applicable fee and rebate tiers. Specifically, the Exchange
proposes to permit days to be excluded from its ADV calculations where
the Exchange is technically open for the entire trading day, but has
instructed members to route away due to a systems or other error that
ultimately does not impact trading on the Exchange. Currently, the
Exchange's ability to remove days from its ADV calculations is limited
to days where the market is not open for the entire trading day. This
allows the Exchange to exclude days, for example, where the Exchange
declares a trading halt in all securities, honors a market-wide trading
halt declared by another market, or closes early for holiday
observance. Because these days generally have artificially lower
trading volume, the Exchange believes that it is reasonable and
equitable to not include such days in determining fee and rebate tiers.
The Exchange notes, however, that if it has a systems issue in the
morning before the market opens, it may instruct members to route away
to other markets. If the systems issue continues into trading hours,
the Exchange is permitted to exclude the day for all members that would
have a lower ADV with the day included. If, however, the systems issue
is resolved prior to the opening of trading, the Exchange is not
permitted to exclude the day from its ADV calculations. This is the
case regardless of the fact that many members would have already made
arrangements to route away in accordance with the Exchange's
instructions. To prevent this undesirable result, and preserve the
Exchange's intent behind adopting volume-based pricing, the Exchange
proposes to allow days to be excluded from its ADV calculation whenever
all members are instructed, in writing, to route their orders to other
markets.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\3\ in general, and Section
6(b)(4) of the Act,\4\ 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. The
Exchange believes that it is reasonable and equitable to exclude a day
from its ADV calculations when members are instructed to route their
orders to other markets as this preserves the Exchange's intent behind
adopting volume-based pricing, and avoids penalizing members that
follow this instruction. Without this change, members that route away
in accordance with the Exchange's instructions may be negatively
impacted, resulting in an effective cost increase for those members.
The Exchange further believes that the proposed rule change is not
unfairly discriminatory because it applies equally to all members and
ADV calculations. As is the Exchange's current practice, the Exchange
will inform members of any day to be excluded from its ADV calculations
by sending members a notice and posting such notice on the Exchange's
Web site.
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\3\15 U.S.C. 78f.
\4\15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

In accordance with Section 6(b)(8) of the Act,\5\ 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 modifications to its ADV calculation are
pro-competitive and will result in lower total costs to end users, a
positive outcome of competitive markets. 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

[[Page 64042]]

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.
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\5\ 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 \6\ and subparagraph (f)(2) of Rule 19b-4
thereunder,\7\ because it establishes a due, fee, or other charge
imposed by ISE.
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\6\ 15 U.S.C. 78s(b)(3)(A)(ii).
\7\ 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-2015-31 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-2015-31. 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-2015-31, and should be
submitted on or before November 12, 2015.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-26809 Filed 10-21-15; 8:45 am]
BILLING CODE 8011-01-P

Federal Register / Vol. 80, No. 204 / Thursday, October 22, 2015 / Notices 64041

should refer to File Number SR–FINRA– II. Self-Regulatory Organization’s of the fact that many members would
2015–026, and should be submitted on Statement of the Purpose of, and have already made arrangements to
or before November 12, 2015. Statutory Basis for, the Proposed Rule route away in accordance with the
Change Exchange’s instructions. To prevent this
VII. Conclusion
In its filing with the Commission, the undesirable result, and preserve the
It is therefore ordered, pursuant to self-regulatory organization included Exchange’s intent behind adopting
Section 19(b)(2) of the Act,20 that the statements concerning the purpose of, volume-based pricing, the Exchange
proposed rule change (SR–FINRA– and basis for, the proposed rule change proposes to allow days to be excluded
2015–026), as modified by Amendment and discussed any comments it received from its ADV calculation whenever all
No. 1, be, and hereby is, approved on an on the proposed rule change. The text members are instructed, in writing, to
accelerated basis. of these statements may be examined at route their orders to other markets.
For the Commission, by the Division of the places specified in Item IV below. 2. Statutory Basis
Trading and Markets, pursuant to delegated The self-regulatory organization has
The Exchange believes that the
authority.21 prepared summaries, set forth in
proposed rule change is consistent with
Brent J. Fields, sections A, B and C below, of the most
the provisions of Section 6 of the Act,3
Secretary. significant aspects of such statements.
in general, and Section 6(b)(4) of the
[FR Doc. 2015–26808 Filed 10–21–15; 8:45 am] A. Self-Regulatory Organization’s Act,4 in particular, in that it is designed
BILLING CODE 8011–01–P Statement of the Purpose of, and to provide for the equitable allocation of
Statutory Basis for, the Proposed Rule reasonable dues, fees, and other charges
Change among its members and other persons
SECURITIES AND EXCHANGE using its facilities. The Exchange
COMMISSION 1. Purpose
believes that it is reasonable and
Currently, for purposes of equitable to exclude a day from its ADV
[Release No. 34–76177; File No. SR–ISE– determining a member’s average daily calculations when members are
2015–31] volume (‘‘ADV’’), any day that the instructed to route their orders to other
regular or complex order books are not markets as this preserves the Exchange’s
Self-Regulatory Organizations; open for the entire trading day may be intent behind adopting volume-based
International Securities Exchange, excluded from such calculation. The pricing, and avoids penalizing members
LLC; Notice of Filing and Immediate Exchange proposes to amend language that follow this instruction. Without this
Effectiveness of Proposed Rule in the Schedule of Fees related to change, members that route away in
Change To Amend the Schedule of excluding days from the ADV accordance with the Exchange’s
Fees calculations used to determine instructions may be negatively
applicable fee and rebate tiers. impacted, resulting in an effective cost
October 16, 2015. Specifically, the Exchange proposes to increase for those members. The
Pursuant to Section 19(b)(1) of the permit days to be excluded from its Exchange further believes that the
Securities Exchange Act of 1934 (the ADV calculations where the Exchange is proposed rule change is not unfairly
‘‘Act’’),1 and Rule 19b–4 thereunder,2 technically open for the entire trading discriminatory because it applies
notice is hereby given that on October day, but has instructed members to equally to all members and ADV
1, 2015, the International Securities route away due to a systems or other calculations. As is the Exchange’s
Exchange, LLC (the ‘‘Exchange’’ or the error that ultimately does not impact current practice, the Exchange will
‘‘ISE’’) filed with the Securities and trading on the Exchange. Currently, the inform members of any day to be
Exchange Commission (‘‘Commission’’) Exchange’s ability to remove days from excluded from its ADV calculations by
the proposed rule change, as described its ADV calculations is limited to days sending members a notice and posting
in Items I, II, and III below, which Items where the market is not open for the such notice on the Exchange’s Web site.
have been prepared by the self- entire trading day. This allows the
regulatory organization. The Exchange to exclude days, for example, B. Self-Regulatory Organization’s
Commission is publishing this notice to where the Exchange declares a trading Statement on Burden on Competition
solicit comments on the proposed rule halt in all securities, honors a market- In accordance with Section 6(b)(8) of
change from interested persons. wide trading halt declared by another the Act,5 the Exchange does not believe
market, or closes early for holiday that the proposed rule change will
I. Self-Regulatory Organization’s observance. Because these days
Statement of the Terms of Substance of impose any burden on intermarket or
generally have artificially lower trading intramarket competition that is not
the Proposed Rule Change volume, the Exchange believes that it is necessary or appropriate in furtherance
The ISE proposes to amend language reasonable and equitable to not include of the purposes of the Act. The
in the Schedule of Fees related to such days in determining fee and rebate Exchange believes that the proposed
excluding days from its average daily tiers. The Exchange notes, however, that modifications to its ADV calculation are
volume calculations when the market is if it has a systems issue in the morning pro-competitive and will result in lower
not open for the entire trading day. The before the market opens, it may instruct total costs to end users, a positive
text of the proposed rule change is members to route away to other markets. outcome of competitive markets. The
available on the Exchange’s Web site If the systems issue continues into Exchange operates in a highly
(http://www.ise.com), at the principal trading hours, the Exchange is permitted competitive market in which market
tkelley on DSK3SPTVN1PROD with NOTICES

office of the Exchange, and at the to exclude the day for all members that participants can readily direct their
Commission’s Public Reference Room. would have a lower ADV with the day order flow to competing venues. In such
included. If, however, the systems issue an environment, the Exchange must
20 15U.S.C. 78s(b)(2). is resolved prior to the opening of
21 17CFR 200.30–3(a)(12). trading, the Exchange is not permitted 315 U.S.C. 78f.
115 U.S.C.78s(b)(1) to exclude the day from its ADV 415 U.S.C. 78f(b)(4).
217 CFR 240.19b–4. calculations. This is the case regardless 5 15 U.S.C. 78f(b)(8).

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Document Created: 2015-12-14 15:33:55
Document Modified: 2015-12-14 15:33:55

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 64041