81 FR 47459 - Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Price Improvement Mechanism Pilot Program
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 140 (July 21, 2016)
Federal Register Volume 81, Issue 140 (July 21, 2016)
| Page Range | 47459-47461 | |
| FR Document | 2016-17197 |
[Federal Register Volume 81, Number 140 (Thursday, July 21, 2016)] [Notices] [Pages 47459-47461] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-17197] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-78344; File No. SR-ISE-2016-17] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Price Improvement Mechanism Pilot Program July 15, 2016. 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 July 14, 2016, 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 and II below, which Items have been prepared by the self- regulatory organization. The [[Page 47460]] 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 extend two pilot programs related to its Price Improvement Mechanism (``PIM''). The text of the proposed rule change is available on the Exchange's Web site www.ise.com, at the principal office of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The self-regulatory organization has prepared summaries, set forth in sections A, B and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange currently has two pilot programs related to its PIM (collectively, the ``PIM Pilot Programs'' or ``Pilot Programs''). The current Pilot Period provided in paragraphs .03 and .05 of the Supplementary Material to Rule 723 is set to expire on July 18, 2016.\3\ Paragraph .03 provides that there is no minimum size requirement for orders to be eligible for the Price Improvement Mechanism. Paragraph .05 concerns the termination of the exposure period by unrelated orders. The Exchange has continually submitted certain data in support of extending the current Pilot Programs. The Exchange proposes to extend these Pilot Programs in their present form, through January 18, 2017, to give the Exchange and the Commission additional time to evaluate the effects of these Pilot Programs before the Exchange requests permanent approval of the rules. --------------------------------------------------------------------------- \3\ See Securities Exchange Act Release No. 75482 (July 17, 2015), 80 FR 43807 (July 23, 2015) (SR-ISE-2015-23). --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6(b) of the Act.\4\ Specifically, the proposed rule change is consistent with Section 6(b)(5) of the Act,\5\ because it is designed to promote just and equitable principles of trade, remove impediments to and perfect the mechanisms of a free and open market and a national market system and, in general, to protect investors and the public interest. --------------------------------------------------------------------------- \4\ 15 U.S.C. 78f(b). \5\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Exchange believes the Pilot Programs are consistent with the Act because they provide opportunity for price improvement for all orders executed in the Exchange's Price Improvement Mechanism. The proposed extension would allow the Pilot Programs to continue uninterrupted, thereby avoiding any potential investor confusion that could result from a temporary interruption to the pilot. Further, the Exchange believes that the data demonstrates that there is sufficient investor interest and demand to extend the Pilot Programs for an additional six months. The Exchange further believes it is appropriate to extend the Pilot Programs to provide the Exchange and Commission more data upon which to evaluate the rules. With this data, the Commission can evaluate whether the new data shows there is meaningful competition for all size orders within the PIM, whether there is significant price improvement for all orders executed through the PIM, and whether there is an active and liquid market functioning on the Exchange outside of the PIM. B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Specifically, the Exchange believes that, by extending the expiration of the Pilot Programs, the proposed rule change will allow for further analysis of the PIM. In doing so, the proposed rule change will also serve to promote regulatory clarity and consistency, thereby reducing burdens on the marketplace and facilitating investor protection. 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 written comments from members or other interested parties. 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, it has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b- 4(f)(6) thereunder.\6\ --------------------------------------------------------------------------- \6\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b- 4(f)(6)(iii), the Exchange provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and the 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. --------------------------------------------------------------------------- A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the Act \7\ normally does not become operative for 30 days after the date of its filing. However, Rule 19b-4(f)(6)(iii) \8\ permits the Commission to 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 period because the Pilot Programs are set to expire on July 18, 2016. The Exchange noted that such waiver will allow the Pilot Programs to continue uninterrupted. --------------------------------------------------------------------------- \7\ 17 CFR 240.19b-4(f)(6). \8\ 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, as it will allow the Pilot Programs to continue uninterrupted, thereby avoiding any potential investor confusion that could result from a temporary interruption in the Pilot Programs. For this reason, the Commission designates the proposed rule change to be operative on July 18, 2016.\9\ --------------------------------------------------------------------------- \9\ For purposes only of waiving the operative delay for this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). --------------------------------------------------------------------------- [[Page 47461]] 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-ISE-2016-17 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-2016-17. 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-2016-17, and should be submitted on or before August 11, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\10\ --------------------------------------------------------------------------- \10\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2016-17197 Filed 7-20-16; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 81, No. 140 / Thursday, July 21, 2016 / Notices 47459
Members. Making the Tape B Quoting enhance market quality in LMP rules/sro.shtml). Copies of the
Tier more achievable for Members will Securities and Tape B securities. As submission, all subsequent
incentivize more Members to seek to such, the proposal is a competitive amendments, all written statements
meet the Tape B Quoting Tier, which proposal that is intended to add with respect to the proposed rule
will further enhance market quality on additional liquidity to the Exchange, change that are filed with the
the Exchange, to the benefit of all which will, in turn, benefit the Commission, and all written
participants. Stated another way, the Exchange and all Exchange participants. communications relating to the
Exchange believes that the Tape B proposed rule change between the
Quoting Tier enhances market quality (C) Self-Regulatory Organization’s Commission and any person, other than
on the Exchange in two ways: (i) By Statement on Comments on the those that may be withheld from the
incentivizing Members to meet certain Proposed Rule Change Received From public in accordance with the
quoting standards in LMP Securities Members, Participants or Others provisions of 5 U.S.C. 552, will be
designed to narrow spreads, increase The Exchange has not solicited, and available for Web site viewing and
size at the inside, and increase liquidity does not intend to solicit, comments on printing in the Commission’s Public
depth on the Exchange in such LMP this proposed rule change. The Reference Room, 100 F Street NE.,
Securities; and (ii) providing an Exchange has not received any written Washington, DC 20549, on official
additional rebate for all of a qualifying comments from members or other business days between the hours of
Member’s orders that add liquidity in interested parties. 10:00 a.m. and 3:00 p.m. Copies of such
Tape B securities will incentivize filing will also be available for
III. Date of Effectiveness of the
Members to increase their participation inspection and copying at the principal
Proposed Rule Change and Timing for
on the Exchange in Tape B securities. office of the Exchange. All comments
By making the Tape B Quoting Tier Commission Action received will be posted without change;
more achievable for Members, more The foregoing rule change has become the Commission does not edit personal
Members will seek to and will meet the effective pursuant to Section 19(b)(3)(A) identifying information from
quoting tier and thus enhance liquidity of the Act 13 and paragraph (f) of Rule submissions. You should submit only
on the Exchange as described above, to 19b–4 thereunder.14 At any time within information that you wish to make
the benefit of all market participants. 60 days of the filing of the proposed rule available publicly. All submissions
Accordingly, the Exchange also believes change, the Commission summarily may should refer to File Number SR–
that the proposal will act to enhance temporarily suspend such rule change if BatsBZX–2016–41 and should be
liquidity and competition across it appears to the Commission that such submitted on or before August 11, 2016.
exchanges in LMP Securities and action is necessary or appropriate in the For the Commission, by the Division of
enhance liquidity provision in Tape B public interest, for the protection of Trading and Markets, pursuant to delegated
securities on the Exchange by providing investors, or otherwise in furtherance of authority.15
a rebate reasonably related to such the purposes of the Act. Robert W. Errett,
enhanced market quality to the benefit Deputy Secretary.
IV. Solicitation of Comments
of all investors, thereby promoting the [FR Doc. 2016–17193 Filed 7–20–16; 8:45 am]
principles discussed in Section 6(b)(5) Interested persons are invited to
BILLING CODE 8011–01–P
of the Act.12 submit written data, views, and
The Exchange notes that it operates in arguments concerning the foregoing,
a highly competitive market in which including whether the proposed rule SECURITIES AND EXCHANGE
market participants can readily direct change is consistent with the Act. COMMISSION
order flow to competing venues if they Comments may be submitted by any of
deem fee levels at a particular venue to the following methods: [Release No. 34–78344; File No. SR–ISE–
be excessive. 2016–17]
Electronic Comments
(B) Self-Regulatory Organization’s • Use the Commission’s Internet Self-Regulatory Organizations;
Statement on Burden on Competition comment form (http://www.sec.gov/ International Securities Exchange,
The Exchange does not believe that rules/sro.shtml); or LLC; Notice of Filing and Immediate
the proposed rule change will result in • Send an email to rule-comments@ Effectiveness of Proposed Rule
any burden on competition that is not sec.gov. Please include File Number SR– Change To Extend the Price
necessary or appropriate in furtherance BatsBZX–2016–41 on the subject line. Improvement Mechanism Pilot
of the purposes of the Act, as amended. Program
The Exchange does not believe that the Paper Comments
July 15, 2016.
changes burden competition, but • Send paper comments in triplicate Pursuant to Section 19(b)(1) of the
instead, enhance competition, as these to Secretary, Securities and Exchange Securities Exchange Act of 1934 (the
changes are intended to increase the Commission, 100 F Street NE., ‘‘Act’’),1 and Rule 19b–4 thereunder,2
competitiveness of the Exchange as it is Washington, DC 20549–1090. notice is hereby given that on July 14,
designed to draw additional volume to All submissions should refer to File 2016, the International Securities
the Exchange. The Exchange notes that Number SR–BatsBZX–2016–41. This file Exchange, LLC (the ‘‘Exchange’’ or the
it operates in a highly competitive number should be included on the ‘‘ISE’’) filed with the Securities and
market in which market participants can
asabaliauskas on DSK3SPTVN1PROD with NOTICES
subject line if email is used. To help the Exchange Commission (‘‘Commission’’)
readily direct order flow to competing Commission process and review your the proposed rule change as described
venues if the deem fee structures to be comments more efficiently, please use in Items I and II below, which Items
unreasonable or excessive. The only one method. The Commission will have been prepared by the self-
proposed changes are generally post all comments on the Commission’s regulatory organization. The
intended to enhance the rebates in Tape Internet Web site (http://www.sec.gov/
B securities, which is intended to 15 17 CFR 200.30–3(a)(12).
13 15 U.S.C. 78s(b)(3)(A). 1 15 U.S.C. 78s(b)(1).
12 15 U.S.C. 78f(b)(5). 14 17 CFR 240.19b–4(f). 2 17 CFR 240.19b–4.
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![Federal Register / Vol. 81, No. 140 / Thursday, July 21, 2016 / Notices 47461
At any time within 60 days of the submissions. You should submit only eliminate Price Improving Orders, as
filing of the proposed rule change, the information that you wish to make defined below; and (iii) adopt the Step
Commission summarily may available publicly. All submissions Up Mechanism, as described below.
temporarily suspend such rule change if should refer to File Number SR–ISE– The text of the proposed rule change
it appears to the Commission that such 2016–17, and should be submitted on or is available at the Exchange’s Web site
action is necessary or appropriate in the before August 11, 2016. at www.batstrading.com, at the
public interest, for the protection of For the Commission, by the Division of principal office of the Exchange, and at
investors, or otherwise in furtherance of Trading and Markets, pursuant to delegated the Commission’s Public Reference
the purposes of the Act. If the authority.10 Room.
Commission takes such action, the Robert W. Errett, II. Self-Regulatory Organization’s
Commission shall institute proceedings Deputy Secretary. Statement of the Purpose of, and
to determine whether the proposed rule [FR Doc. 2016–17197 Filed 7–20–16; 8:45 am] Statutory Basis for, the Proposed Rule
should be approved or disapproved.
BILLING CODE 8011–01–P Change
IV. Solicitation of Comments In its filing with the Commission, the
Interested persons are invited to Exchange included statements
SECURITIES AND EXCHANGE
submit written data, views, and concerning the purpose of and basis for
COMMISSION
arguments concerning the foregoing, the proposed rule change and discussed
including whether the proposed rule [Release No. 34–78339; File No. SR– any comments it received on the
change is consistent with the Act. BatsEDGX–2016–29] proposed rule change. The text of these
Comments may be submitted by any of statements may be examined at the
the following methods: Self-Regulatory Organizations; Bats
places specified in Item IV below. The
EDGX Exchange, Inc.; Notice of Filing
Electronic Comments Exchange has prepared summaries, set
and Immediate Effectiveness of a
forth in Sections A, B, and C below, of
• Use the Commission’s Internet Proposed Rule Change Related to
the most significant parts of such
comment form (http://www.sec.gov/ Functionality Offered by the
statements.
rules/sro.shtml); or Exchange’s Options Platform To:
• Send an email to rule-comments@ Modify Various Rules To Eliminate the A. Self-Regulatory Organization’s
sec.gov. Please include File Number SR– Display-Price Sliding Option; Modify Statement of the Purpose of, and the
ISE–2016–17 on the subject line. Various Rules To Eliminate Price Statutory Basis for, the Proposed Rule
Improving Orders; and Adopt the Step Change
Paper Comments
Up Mechanism
• Send paper comments in triplicate 1. Purpose
to Brent J. Fields, Secretary, Securities July 15, 2016. The Exchange is filing this proposal
and Exchange Commission, 100 F Street Pursuant to Section 19(b)(1) of the related to functionality offered by EDGX
NE., Washington, DC 20549–1090. Securities Exchange Act of 1934 (the Options to: (i) Modify various rules to
All submissions should refer to File ‘‘Act’’),1 and Rule 19b–4 thereunder,2 eliminate the display-price sliding
Number SR–ISE–2016–17. This file notice is hereby given that on July 11, option; (ii) modify various rules to
number should be included on the 2016, Bats EDGX Exchange, Inc. (the eliminate Price Improving Orders, as
subject line if email is used. To help the ‘‘Exchange’’ or ‘‘EDGX’’) filed with the defined below; and (iii) adopt the Step
Commission process and review your Securities and Exchange Commission Up Mechanism, as described below.
comments more efficiently, please use (‘‘Commission’’) the proposed rule
change as described in Items I and II Elimination of the Display-Price Sliding
only one method. The Commission will Option
post all comments on the Commission’s below, which Items have been prepared
Internet Web site (http://www.sec.gov/ by the Exchange. The Exchange has The Exchange currently offers various
rules/sro.shtml). Copies of the designated this proposal as a ‘‘non- forms of sliding which, in all cases,
submission, all subsequent controversial’’ proposed rule change result in the re-pricing of an order to, or
amendments, all written statements pursuant to Section 19(b)(3)(A) of the ranking and/or display of an order at, a
with respect to the proposed rule Act 3 and Rule 19b–4(f)(6)(iii) price other than an order’s limit price in
change that are filed with the thereunder,4 which renders it effective order to comply with applicable
Commission, and all written upon filing with the Commission. The securities laws and/or Exchange rules.
communications relating to the Commission is publishing this notice to Specifically, the Exchange offers: (i) The
proposed rule change between the solicit comments on the proposed rule display-price sliding process, pursuant
Commission and any person, other than change from interested persons. to Rule 21.1(h); and (ii) the Price Adjust
those that may be withheld from the I. Self-Regulatory Organization’s process, pursuant to Rule 21.1(i). Under
public in accordance with the Statement of the Terms of Substance of the display-price sliding process an
provisions of 5 U.S.C. 552, will be the Proposed Rule Change order that, at the time of entry, would
available for Web site viewing and lock or cross a Protected Quotation of
The Exchange filed a proposal related another options exchange will be ranked
printing in the Commission’s Public
to functionality offered by the at the locking price in the EDGX
Reference Room, 100 F Street NE.,
Exchange’s options platform (‘‘EDGX Options Book and displayed by the
Washington, DC 20549 on official
asabaliauskas on DSK3SPTVN1PROD with NOTICES
Options’’) to: (i) Modify various rules to System 5 at one minimum price
business days between the hours of
eliminate the display-price sliding variation below the current National
10:00 a.m. and 3:00 p.m. Copies of such
option; (ii) modify various rules to Best Offer (‘‘NBO’’) 6 (for bids) or one
filing also will be available for
inspection and copying at the principal 10 17 CFR 200.30–3(a)(12). 5 See Exchange Rule 16.1(a)(59) (defining the term
office of the Exchange. All comments 1 15 U.S.C. 78s(b)(1). System as the automated trading system used by
received will be posted without change; 2 17 CFR 240.19b–4.
EDGX Options for the trading of options contracts).
the Commission does not edit personal 3 15 U.S.C. 78s(b)(3)(A). 6 See Exchange Rule 16.1(a)(29) (defining the
identifying information from 4 17 CFR 240.19b–4(f)(6)(iii). terms ‘‘NBB’’, ‘‘NBO’’, and ‘‘NBBO’’).
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Document Created: 2018-02-08 07:59:17
Document Modified: 2018-02-08 07:59:17
| 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 | 81 FR 47459 |
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