81 FR 26275 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Require an Issuer of Securities Listed Under the Rule 5700 Series To Notify Nasdaq About the Replacement of the Index, Portfolio, or Reference Asset Underlying the Security and Pay a Fee in Connection With the Change
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 84 (May 2, 2016)
Federal Register Volume 81, Issue 84 (May 2, 2016)
| Page Range | 26275-26277 | |
| FR Document | 2016-10147 |
[Federal Register Volume 81, Number 84 (Monday, May 2, 2016)] [Notices] [Pages 26275-26277] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-10147] [[Page 26275]] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-77706; File No. SR-NASDAQ-2016-059] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Require an Issuer of Securities Listed Under the Rule 5700 Series To Notify Nasdaq About the Replacement of the Index, Portfolio, or Reference Asset Underlying the Security and Pay a Fee in Connection With the Change April 26, 2016. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on April 20, 2016, The NASDAQ Stock Market LLC (``Nasdaq'' or ``Exchange'') filed with the Securities and Exchange Commission (``SEC'' or ``Commission'') the proposed rule change as described in Items I and II, below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to require that an issuer of securities listed under the Rule 5700 Series notify Nasdaq about the replacement of the index, portfolio, or reference asset underlying the security and pay a fee in connection with the change. The text of the proposed rule change is available on the Exchange's Web site at http://nasdaq.cchwallstreet.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 Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Nasdaq rules require issuers to notify Nasdaq about substitution listing events and impose fees associated with those notifications. Specifically, Rule 5005(a)(40) defines a ``Substitution Listing Event'' as certain changes in the equity or legal structure of a company \3\ and Rule 5250(e)(4) requires a listed company to provide notification to Nasdaq about these events no later than 15 days before implementation of the event. These events generally require Nasdaq to review the entity for compliance with the applicable listing requirements. --------------------------------------------------------------------------- \3\ A ``Substitution Listing Event'' means: A reverse stock split, re-incorporation or a change in the Company's place of organization, the formation of a holding company that replaces a listed Company, reclassification or exchange of a Company's listed shares for another security, the listing of a new class of securities in substitution for a previously-listed class of securities, a business combination described in IM-5101-2 (unless the transaction was publicly announced in a press release or Form 8- K prior to October 15, 2013), or any technical change whereby the Shareholders of the original Company receive a share-for-share interest in the new Company without any change in their equity position or rights. See Rule 5005(a)(40). --------------------------------------------------------------------------- Nasdaq proposes to expand the definition of a Substitution Listing Event to include cases where an issuer of securities listed under the Rule 5700 Series replaces, or significantly modifies, the index, portfolio, or reference asset underlying its security (including, but not limited to, a significant modification to the index methodology, a change in the index provider, or a change in control of the index provider). This type of change requires that Nasdaq review the changes to the index, portfolio, or reference asset for compliance with the applicable listing requirements and may require Nasdaq to make a rule filing with the Commission to continue listing the product with the revised index, portfolio, or reference asset.\4\ --------------------------------------------------------------------------- \4\ Other types of changes may also require Nasdaq to make a rule filing with the Commission to continue listing the changed product. --------------------------------------------------------------------------- Nasdaq believes it is appropriate to require notification of these changes in the same manner as other Substitution Listing Events,\5\ which will increase to 15 days the time available to Nasdaq to conduct its initial review of the revised index, portfolio, or reference asset underlying the security, evaluate compliance with the listing requirements, and determine if a rule filing is required.\6\ --------------------------------------------------------------------------- \5\ Listed companies provide notification of a Substitution Listing Event via Nasdaq's Listing Center on the Company Event Notification Form. \6\ Currently, at a minimum, Nasdaq believes that an issuer must disclose such changes under Rule 5250(b)(1), which requires public disclosure of any material information that would reasonably be expected to affect the value of its securities or influence investors' decisions, and must notify Nasdaq's MarketWatch department 10 minutes prior to such announcement. --------------------------------------------------------------------------- Nasdaq also proposes to modify Rule 5701 to highlight that a change to the index, portfolio, or reference asset underlying a security is a Substitution Listing Event that requires 15 calendar days' notice. The new language also emphasizes that such a change may affect the company's compliance with the listing requirements and may require Nasdaq to file a new rule filing pursuant to Section 19(b)(1) of the Act \7\ and for such rule filing to be approved by the SEC or otherwise take effect (as applicable), before the product can be listed or traded. The new rule language also indicates that Nasdaq will halt trading if a company effectuates a change that requires such a filing before it is approved by the SEC or otherwise takes effect (as applicable). The new rule language would also indicate that Nasdaq will commence delisting proceedings if a company effectuates a change in the case where Nasdaq determines not to submit a rule filing or withdraws a rule filing, or where the SEC disapproves a rule filing.\8\ --------------------------------------------------------------------------- \7\ 15 U.S.C. 78s(b)(1). \8\ The proposed rule change would also add language to Rule 5701 to encourage companies to consult with Nasdaq staff sufficiently in advance of such changes to allow review and preparation of a rule filing and SEC approval, if necessary, and to clarify that Nasdaq has sole discretion as to whether it chooses to submit a rule filing and, if submitted, whether to withdraw such rule filing. --------------------------------------------------------------------------- Nasdaq also believes that it is appropriate in these instances to charge the $5,000 fee assessed for Substitution Listing Events,\9\ which will offset the costs associated with Nasdaq's listing review and, if necessary, rule filing, as well as the costs to maintain and revise Nasdaq's records, and distribute information to market participants about the change. Therefore, Nasdaq is adding language to Rules 5730 and 5740 to clarify that the existing Substitution Listing Event fee also applies to situations where a company changes the index, portfolio, or reference asset underlying its security. --------------------------------------------------------------------------- \9\ See Securities Exchange Act Release No. 76550 (December 3, 2015), 80 FR 76605 (December 9, 2015) (SR-NASDAQ-2015-146, adopting a Substitution Listing Event fee for securities listed under the Rule 5700 Series). --------------------------------------------------------------------------- Finally, Nasdaq proposes to remove transitional language within Rule 5005(a)(40), which excluded a business combination that was publicly announced prior to October 15, 2013, [[Page 26276]] from being considered a Substitution Listing Event. Nasdaq does not believe that any company listed on Nasdaq has an uncompleted business combination announced prior to that date, which would be considered a Substitution Listing Event. As such, Nasdaq believes this is a technical change to remove an expired transition. 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,\10\ in general, and with Sections 6(b)(4) and (5) of the Act,\11\ in particular, in that it provides for the equitable allocation of reasonable dues, fees, and other charges among its members, issuers and other persons using its facilities, and is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest; and is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. --------------------------------------------------------------------------- \10\ 15 U.S.C. 78f. \11\ 15 U.S.C. 78f(b)(4) and (5). --------------------------------------------------------------------------- Nasdaq believes that the proposed requirement that the issuer of securities listed under the Rule 5700 Series notify Nasdaq 15 calendar days in advance of changes to the index, portfolio, or reference asset underlying the security is consistent with the investor protection objectives of Section 6(b)(5) of the Act in that it is designed to promote just and equitable principles of trade, to remove impediments to a free and open market and national market system, and in general to protect investors and the public interest. Specifically, the proposed change will help ensure that Nasdaq has sufficient time to review the revised index, portfolio, or reference asset and determine whether the product complies with Nasdaq's listing requirements and whether a rule filing must be filed by Nasdaq pursuant to Section 19(b)(1) of the Act and approved by the Commission or otherwise take effect (as applicable), which will help protect investors. Moreover, by including this category of changes in the definition of a Substitution Listing Event, Nasdaq will charge a $5,000 fee in connection with the changes, which will help ensure that adequate resources are available for Nasdaq to conduct this review. In addition, the proposed change will clarify that Nasdaq will halt a security if the issuer implements a change that requires a rule filing before that rule filing is approved or effective (as applicable), and delist the security if Nasdaq determines not to file or withdraws the rule filing, or the SEC disapproves the rule filing, thereby protecting investors. Including changes to the index, portfolio, or reference asset underlying a security in the list of Substitution Listing Events subject to a $5,000 fee is reasonable and equitably allocated in that it is designed to compensate Nasdaq for the work required in connection with effecting changes that the issuer has initiated. As noted above, changes made to a security's underlying index, portfolio or reference assets require Nasdaq to review the issuer's listing compliance and may require Nasdaq to submit a rule filing to the Commission. It is reasonable and equitable to allocate the costs of these actions to the issuer that implements the change or event, just as Nasdaq does in connection with other Substitution Listing Events. The proposed change to eliminate transitional language from Rule 5005(a)(40) will simplify Nasdaq's rules, thereby removing a potential impediment to a free and open market and national market system. B. Self-Regulatory Organization's Statement on Burden on Competition Nasdaq does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended. This rule proposal is not primarily based on competition, but rather is designed to ensure that Nasdaq staff has adequate time and resources to review a change to an index, portfolio, or reference asset for compliance with the listing requirements and to file and obtain approval or effectiveness of a rule change, if necessary. As such, Nasdaq believes the proposed change will have no impact on competition. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act \12\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\13\ --------------------------------------------------------------------------- \12\ 15 U.S.C. 78s(b)(3)(A). \13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) requires the Exchange to give the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. --------------------------------------------------------------------------- A proposed rule change filed under Rule 19b-4(f)(6) \14\ normally does not become operative for 30 days after the date of filing. However, pursuant to Rule 19b-4(f)(6)(iii),\15\ the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has requested that the Commission waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Exchange states that such waiver will allow the Exchange to immediately receive the benefit of additional time to review changes to indices, portfolios, or reference assets underlying securities listed under the Rule 5700 Series for compliance with the listing requirements and federal securities law requirements. The Exchange further states that the additional notification time required by the proposal relating to such changes will help to prevent potential disruptions to listings of securities listed under the Rule 5700 Series, thereby helping to protect investors and the public interest. --------------------------------------------------------------------------- \14\ 17 CFR 240.19b-4(f)(6). \15\ 17 CFR 240.19b-4(f)(6)(iii). --------------------------------------------------------------------------- The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest. The Exchange states that the proposal will help ensure that the Exchange has sufficient time to review a revised index, portfolio, or reference asset underlying a security listed under the Rule 5700 Series to determine whether the product complies with the Exchange's listing requirements and [[Page 26277]] whether a rule filing must be filed by the Exchange pursuant to Section 19(b)(1) of the Act. Accordingly, the Commission designates the proposed rule change to be operative upon filing.\16\ --------------------------------------------------------------------------- \16\ For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). --------------------------------------------------------------------------- At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is 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 Number SR-NASDAQ-2016-059 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-NASDAQ-2016-059. 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-NASDAQ-2016-059 and should be submitted on or May 23, 2016. --------------------------------------------------------------------------- \17\ 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\17\ Robert W. Errett, Deputy Secretary. [FR Doc. 2016-10147 Filed 4-29-16; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 81, No. 84 / Monday, May 2, 2016 / Notices 26275
SECURITIES AND EXCHANGE A. Self-Regulatory Organization’s requirements, and determine if a rule
COMMISSION Statement of the Purpose of, and filing is required.6
Statutory Basis for, the Proposed Rule Nasdaq also proposes to modify Rule
[Release No. 34–77706; File No. SR– Change 5701 to highlight that a change to the
NASDAQ–2016–059] index, portfolio, or reference asset
1. Purpose underlying a security is a Substitution
Self-Regulatory Organizations; The Nasdaq rules require issuers to notify Listing Event that requires 15 calendar
NASDAQ Stock Market LLC; Notice of Nasdaq about substitution listing events days’ notice. The new language also
Filing and Immediate Effectiveness of and impose fees associated with those emphasizes that such a change may
Proposed Rule Change To Require an notifications. Specifically, Rule affect the company’s compliance with
Issuer of Securities Listed Under the 5005(a)(40) defines a ‘‘Substitution the listing requirements and may
Rule 5700 Series To Notify Nasdaq Listing Event’’ as certain changes in the require Nasdaq to file a new rule filing
About the Replacement of the Index, equity or legal structure of a company 3 pursuant to Section 19(b)(1) of the Act 7
Portfolio, or Reference Asset and Rule 5250(e)(4) requires a listed and for such rule filing to be approved
Underlying the Security and Pay a Fee company to provide notification to by the SEC or otherwise take effect (as
in Connection With the Change Nasdaq about these events no later than applicable), before the product can be
15 days before implementation of the listed or traded. The new rule language
April 26, 2016.
event. These events generally require also indicates that Nasdaq will halt
Pursuant to Section 19(b)(1) of the trading if a company effectuates a
Nasdaq to review the entity for
Securities Exchange Act of 1934 change that requires such a filing before
compliance with the applicable listing
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 it is approved by the SEC or otherwise
requirements.
notice is hereby given that on April 20, takes effect (as applicable). The new
Nasdaq proposes to expand the
2016, The NASDAQ Stock Market LLC rule language would also indicate that
definition of a Substitution Listing
(‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the Nasdaq will commence delisting
Event to include cases where an issuer
Securities and Exchange Commission proceedings if a company effectuates a
of securities listed under the Rule 5700
(‘‘SEC’’ or ‘‘Commission’’) the proposed change in the case where Nasdaq
Series replaces, or significantly
rule change as described in Items I and determines not to submit a rule filing or
modifies, the index, portfolio, or
II, below, which Items have been withdraws a rule filing, or where the
reference asset underlying its security
prepared by the Exchange. The SEC disapproves a rule filing.8
(including, but not limited to, a
Commission is publishing this notice to Nasdaq also believes that it is
significant modification to the index
solicit comments on the proposed rule appropriate in these instances to charge
methodology, a change in the index
change from interested persons. the $5,000 fee assessed for Substitution
provider, or a change in control of the
I. Self-Regulatory Organization’s index provider). This type of change Listing Events,9 which will offset the
Statement of the Terms of Substance of requires that Nasdaq review the changes costs associated with Nasdaq’s listing
the Proposed Rule Change to the index, portfolio, or reference asset review and, if necessary, rule filing, as
for compliance with the applicable well as the costs to maintain and revise
The Exchange proposes to require that Nasdaq’s records, and distribute
an issuer of securities listed under the listing requirements and may require
Nasdaq to make a rule filing with the information to market participants about
Rule 5700 Series notify Nasdaq about the change. Therefore, Nasdaq is adding
the replacement of the index, portfolio, Commission to continue listing the
product with the revised index, language to Rules 5730 and 5740 to
or reference asset underlying the clarify that the existing Substitution
security and pay a fee in connection portfolio, or reference asset.4
Nasdaq believes it is appropriate to Listing Event fee also applies to
with the change. situations where a company changes the
The text of the proposed rule change require notification of these changes in
index, portfolio, or reference asset
is available on the Exchange’s Web site the same manner as other Substitution
underlying its security.
at http://nasdaq.cchwallstreet.com, at Listing Events,5 which will increase to Finally, Nasdaq proposes to remove
the principal office of the Exchange, and 15 days the time available to Nasdaq to transitional language within Rule
at the Commission’s Public Reference conduct its initial review of the revised 5005(a)(40), which excluded a business
Room. index, portfolio, or reference asset combination that was publicly
underlying the security, evaluate announced prior to October 15, 2013,
II. Self-Regulatory Organization’s compliance with the listing
Statement of the Purpose of, and 6 Currently, at a minimum, Nasdaq believes that
Statutory Basis for, the Proposed Rule 3A ‘‘Substitution Listing Event’’ means: A reverse an issuer must disclose such changes under Rule
Change stock split, re-incorporation or a change in the 5250(b)(1), which requires public disclosure of any
Company’s place of organization, the formation of material information that would reasonably be
In its filing with the Commission, the a holding company that replaces a listed Company, expected to affect the value of its securities or
Exchange included statements reclassification or exchange of a Company’s listed influence investors’ decisions, and must notify
concerning the purpose of and basis for shares for another security, the listing of a new class Nasdaq’s MarketWatch department 10 minutes
of securities in substitution for a previously-listed prior to such announcement.
the proposed rule change and discussed class of securities, a business combination 7 15 U.S.C. 78s(b)(1).
any comments it received on the described in IM–5101–2 (unless the transaction was 8 The proposed rule change would also add
proposed rule change. The text of these publicly announced in a press release or Form 8– language to Rule 5701 to encourage companies to
statements may be examined at the K prior to October 15, 2013), or any technical consult with Nasdaq staff sufficiently in advance of
change whereby the Shareholders of the original such changes to allow review and preparation of a
places specified in Item IV below. The
srobinson on DSK5SPTVN1PROD with NOTICES
Company receive a share-for-share interest in the rule filing and SEC approval, if necessary, and to
Exchange has prepared summaries, set new Company without any change in their equity clarify that Nasdaq has sole discretion as to whether
forth in sections A, B, and C below, of position or rights. See Rule 5005(a)(40). it chooses to submit a rule filing and, if submitted,
the most significant aspects of such 4 Other types of changes may also require Nasdaq whether to withdraw such rule filing.
statements. to make a rule filing with the Commission to 9 See Securities Exchange Act Release No. 76550
continue listing the changed product. (December 3, 2015), 80 FR 76605 (December 9,
5 Listed companies provide notification of a 2015) (SR–NASDAQ–2015–146, adopting a
1 15 U.S.C. 78s(b)(1). Substitution Listing Event via Nasdaq’s Listing Substitution Listing Event fee for securities listed
2 17 CFR 240.19b–4. Center on the Company Event Notification Form. under the Rule 5700 Series).
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![Federal Register / Vol. 81, No. 84 / Monday, May 2, 2016 / Notices 26277
whether a rule filing must be filed by printing in the Commission’s Public execute. The text of the proposed rule
the Exchange pursuant to Section Reference Room, 100 F Street NE., change is available on the Exchange’s
19(b)(1) of the Act. Accordingly, the Washington, DC 20549, on official Web site (http://www.ise.com), at the
Commission designates the proposed business days between the hours of principal office of the Exchange, and at
rule change to be operative upon 10:00 a.m. and 3:00 p.m. Copies of such the Commission’s Public Reference
filing.16 filing also will be available for Room.
At any time within 60 days of the inspection and copying at the principal
filing of the proposed rule change, the II. Self-Regulatory Organization’s
office of the Exchange. All comments
Commission summarily may Statement of the Purpose of, and
received will be posted without change;
temporarily suspend such rule change if Statutory Basis for, the Proposed Rule
the Commission does not edit personal
it appears to the Commission that such identifying information from Change
action is necessary or appropriate in the submissions. You should submit only In its filing with the Commission, the
public interest, for the protection of information that you wish to make self-regulatory organization included
investors, or otherwise in furtherance of available publicly. All submissions statements concerning the purpose of,
the purposes of the Act. If the should refer to File Number SR– and basis for, the proposed rule change
Commission takes such action, the NASDAQ–2016–059 and should be and discussed any comments it received
Commission shall institute proceedings submitted on or May 23, 2016. on the proposed rule change. The text
to determine whether the proposed rule For the Commission, by the Division of of these statements may be examined at
should be approved or disapproved. Trading and Markets, pursuant to delegated the places specified in Item IV below.
authority.17 The self-regulatory organization has
IV. Solicitation of Comments
Robert W. Errett, prepared summaries, set forth in
Interested persons are invited to sections A, B and C below, of the most
Deputy Secretary.
submit written data, views, and significant aspects of such statements.
[FR Doc. 2016–10147 Filed 4–29–16; 8:45 am]
arguments concerning the foregoing,
including whether the proposed rule BILLING CODE 8011–01–P A. Self-Regulatory Organization’s
change is consistent with the Act. Statement of the Purpose of, and
Comments may be submitted by any of Statutory Basis for, the Proposed Rule
SECURITIES AND EXCHANGE Change
the following methods:
COMMISSION
Electronic Comments 1. Purpose
[Release No. 34–77716; File No. SR–
• Use the Commission’s Internet ISEMercury-2016–09] On March 10, 2016, ISE Mercury
comment form (http://www.sec.gov/ introduced fee and rebate tiers for
rules/sro.shtml); or Self-Regulatory Organizations; ISE Market Maker 3 and Priority Customer 4
• Send an email to rule-comments@ Mercury, LLC; Notice of Filing of orders based on the average daily
sec.gov. Please include File Number SR– Proposed Rule Change Relating to volume (‘‘ADV’’) that a member
NASDAQ–2016–059 on the subject line. Preferenced Volume executes in Priority Customer orders.5
The Exchange assesses fees and rebates
Paper Comments April 26, 2016. for Market Maker and Priority Customer
• Send paper comments in triplicate Pursuant to Section 19(b)(1) of the orders based on five tiers of Total
to Secretary, Securities and Exchange Securities Exchange Act of 1934 (the Affiliated Priority Customer ADV, as
Commission, 100 F Street NE., ‘‘Act’’),1 and Rule 19b–4 thereunder,2 described in Table 4 of the Fee
Washington, DC 20549–1090. notice is hereby given that on April 13, Schedule: 6 0—19,999 contracts (‘‘Tier
All submissions should refer to File 2016, ISE Mercury, LLC (the 1’’), 20,000—39,999 contracts (‘‘Tier 2’’),
Number SR–NASDAQ–2016–059. This ‘‘Exchange’’ or ‘‘ISE Mercury’’) filed 40,000—59,999 contracts (‘‘Tier 3’’),
file number should be included on the with the Securities and Exchange 60,000—79,999 contracts (‘‘Tier 4’’), and
subject line if email is used. To help the Commission (‘‘Commission’’) the 80,000 or more contracts (‘‘Tier 5’’).7 As
Commission process and review your proposed rule change as described in
comments more efficiently, please use Items I and II below, which Items have 3 The term Market Makers refers to ‘‘Competitive
only one method. The Commission will been prepared by the self-regulatory Market Makers’’ and ‘‘Primary Market Makers’’
post all comments on the Commission’s organization. The Commission is collectively.
4 A ‘‘Priority Customer’’ is a person or entity that
Internet Web site (http://www.sec.gov/ publishing this notice to solicit
is not a broker/dealer in securities, and does not
rules/sro.shtml). Copies of the comments on the proposed rule change place more than 390 orders in listed options per day
submission, all subsequent from interested persons. on average during a calendar month for its own
beneficial account(s), as defined in ISE Mercury
amendments, all written statements I. Self-Regulatory Organization’s Rule 100(a)(37A).
with respect to the proposed rule Statement of the Terms of the Substance 5 See Securities Exchange Act Release No. 77409
change that are filed with the of the Proposed Rule Change (March 21, 2016), 81 FR 16240 (March 25, 2016)
Commission, and all written The purpose of this proposed rule
(SR–ISE Mercury–2016–05).
6 The Total Affiliated Priority Customer ADV
communications relating to the change is to amend the Exchange’s category includes all Priority Customer volume
proposed rule change between the Schedule of Fees to explain that while executed on the Exchange in all symbols and order
Commission and any person, other than 100% of eligible traded volume types, including volume executed in the PIM,
those that may be withheld from the preferenced to a Market Maker counts Facilitation, and QCC mechanisms.
public in accordance with the 7 The highest tier threshold attained applies
srobinson on DSK5SPTVN1PROD with NOTICES
towards that member’s volume tiers, retroactively in a given month to all eligible traded
provisions of 5 U.S.C. 552, will be Market Makers not preferenced on an contracts and applies to all eligible market
available for Web site viewing and order will receive credit for the volume participants. Any day that the market is not open
those non-preferenced members for the entire trading day or the Exchange instructs
16 For purposes only of waiving the 30-day members in writing to route their orders to other
operative delay, the Commission has also markets may be excluded from the ADV calculation;
17 17 CFR 200.30–3(a)(12).
considered the proposed rule’s impact on provided that the Exchange will only remove the
1 15 U.S.C. 78s(b)(1).
efficiency, competition, and capital formation. See day for members that would have a lower ADV with
15 U.S.C. 78c(f). 2 17 CFR 240.19b–4. the day included.
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Document Created: 2016-04-30 13:35:27
Document Modified: 2016-04-30 13:35:27
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| Section | Notices | |
| FR Citation | 81 FR 26275 |
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