81 FR 50759 - Self-Regulatory Organizations; International Securities Exchange, LLC; Order Disapproving a Proposed Rule Change To Amend Rule 804(g)
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 148 (August 2, 2016)
Federal Register Volume 81, Issue 148 (August 2, 2016)
| Page Range | 50759-50761 | |
| FR Document | 2016-18207 |
[Federal Register Volume 81, Number 148 (Tuesday, August 2, 2016)] [Notices] [Pages 50759-50761] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-18207] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-78423; File No. SR-ISE-2015-30] Self-Regulatory Organizations; International Securities Exchange, LLC; Order Disapproving a Proposed Rule Change To Amend Rule 804(g) July 27, 2016. I. Introduction On November 10, 2015, the International Securities Exchange, LLC (``ISE'' or the ``Exchange'') filed with the Securities and Exchange Commission (the ``Commission''), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to require Clearing Member \3\ approval for a market maker \4\ to resume trading after the activation of a market-wide speed bump under ISE Rule 804(g). The proposed rule change was published for comment in the Federal Register on November 30, 2015.\5\ --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ A ``Clearing Member'' is a Member that is self-clearing or an Electronic Access Member that clears transactions executed on or through the facilities of the Exchange for other Members of the Exchange. See ISE Rule 100(a)(8). An ``Electronic Access Member'' is an Exchange Member that is approved to exercise trading privileges associated with EAM Rights. See Article XIII, Section 13.1(l) of the Second Amended and Restated Constitution of ISE. \4\ ISE has two categories of market makers: Primary Market Makers (``PMMs'') and Competitive Market Makers (``CMMs''). A PMM is appointed to each options class traded on the Exchange, but a CMM may or may not be appointed to each such options class. See ISE Rule 802. \5\ See Securities Exchange Act Release No. 76506 (November 23, 2015), 80 FR 74829 (``Notice''). --------------------------------------------------------------------------- On January 13, 2016, the Commission extended the time period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change to February 28, 2016.\6\ On February 26, 2016, the Commission instituted proceedings under Section 19(b)(2)(B) of the Act \7\ to determine whether to approve or disapprove the proposed rule change.\8\ Specifically, the Commission instituted proceedings to allow for additional analysis of, and input from commenters with respect to, the proposed rule change's consistency with Section 6(b)(5) of the Act.\9\ On May [[Page 50760]] 26, 2016, the Commission extended the time period for Commission action on the proceedings to determine whether to disapprove the proposed rule change.\10\ The Commission did not receive any comments on the proposed rule change and the Exchange did not submit a response to the Commission's order instituting proceedings. This order disapproves the proposed rule change. --------------------------------------------------------------------------- \6\ See Securities Exchange Act Release No. 76893, 81 FR 3217 (January 20, 2016). \7\ 15 U.S.C. 78s(b)(2)(B). \8\ See Securities Exchange Act Release No. 77246, 81 FR 11305 (March 3, 2016) (``Order Instituting Proceedings''). \9\ 15 U.S.C. 78f(b)(5). \10\ See Securities Exchange Act Release No. 77928, 81 FR 35409 (June 2, 2016). --------------------------------------------------------------------------- II. Description of the Proposal The Exchange has an automated quotation adjustment functionality that is governed by its Rule 804(g)(1) (for regular orders) and Supplementary Material .04 to Rule 722 (for complex orders). Pursuant to these Rules, the Exchange will automatically remove a market maker's quotations in all series of an options class or in all complex order strategies of an options class when, during a specified time period, the market maker exceeds certain execution parameters.\11\ All market makers are required by ISE to provide these specific parameters. Additionally, the Exchange will automatically remove a market maker's quotes in all classes when, during a specified time period, the total number of quote removal events (``curtailment events'') described in Rule 804(g)(1) and in Supplementary Material .04 to Rule 722 exceed a specified market-wide parameter (``market-wide speed bump'').\12\ As with the functionality to remove all option series of an options class or complex order strategies of an options class, all market makers are required by ISE to specify a market-wide parameter. The market-wide speed bump is available for quotes only on ISE or across both ISE and ISE's affiliated exchange, ISE Gemini, LLC.\13\ The Exchange states that, after a market-wide speed bump is triggered and the trading system removes all of a market maker's quotes, the market maker may re- enter the market and resume trading upon notification to the Exchange's Market Operations.\14\ --------------------------------------------------------------------------- \11\ See ISE Rule 804(g)(1) and Supplementary Material .04 to Rule 722 for a description of the parameters. The time period is specified by the market maker. \12\ See ISE Rule 804(g)(2). The time period for a market-wide speed bump is also specified by the market maker. \13\ Id. \14\ See Notice, supra note 5, at 74830. --------------------------------------------------------------------------- Under the proposal, the Exchange seeks to amend the process by which market makers can re-enter the market. Specifically, the proposal requires Clearing Member approval before a market maker can resume trading after triggering a market-wide speed bump.\15\ Following a market-wide speed bump, the proposed rule requires: (1) A market maker to notify its Clearing Member(s) when it is ready to resume trading; and (2) each applicable Clearing Member to inform the Exchange directly when its authorization has been given for the market maker to resume trading.\16\ In order to ``facilitate a better response time'' from Clearing Members so that a market maker can re-enter the market, the proposal also allows the Exchange staff to notify Clearing Member(s) when a market maker's quotes have been removed pursuant to the market- wide speed bump.\17\ --------------------------------------------------------------------------- \15\ See proposed Rule 804(g)(2). \16\ See id. \17\ See id. --------------------------------------------------------------------------- III. Discussion and Commission Findings Under Section 19(b)(2)(C) of the Act,\18\ the Commission shall approve a proposed rule change of a self-regulatory organization if it finds that such proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to such organization.\19\ The Commission shall disapprove a proposed rule change if it does not make such a finding.\20\ Rule 700(b)(3) of the Commission's Rules of Practice states that the ``burden to demonstrate that a proposed rule change is consistent with the Exchange Act and the rules and regulations issued thereunder . . . is on the self-regulatory organization that proposed the rule change'' and that a ``mere assertion that the proposed rule change is consistent with those requirements . . . is not sufficient.'' \21\ --------------------------------------------------------------------------- \18\ 15 U.S.C. 78s(b)(2)(C). \19\ See 15 U.S.C. 78s(b)(2)(C)(i). \20\ See 15 U.S.C. 78s(b)(2)(C)(ii); see also 17 CFR 201.700(b)(3). \21\ See 17 CFR 201.700(b)(3). ``The description of a proposed rule change, its purpose and operation, its effect, and a legal analysis of its consistency with applicable requirements must all be sufficiently detailed and specific to support an affirmative Commission finding. Any failure of a self-regulatory organization to provide the information elicited by Form 19b-4 may result in the Commission not having a sufficient basis to make an affirmative finding that a proposed rule change is consistent with the Exchange Act and the rules and regulations issued thereunder that are applicable to the self-regulatory organization.'' Id. --------------------------------------------------------------------------- After careful consideration, the Commission does not find that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.\22\ In particular, the Commission does not find that the proposed rule change is consistent with Section 6(b)(5) of the Act,\23\ which, among other things, requires that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, 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. --------------------------------------------------------------------------- \22\ In disapproving the proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). \23\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Commission has stated in the past that, because market makers receive favorable treatment from an exchange, they must also be subject to sufficient and commensurate affirmative obligations, including the obligation to hold themselves out as willing to buy and sell options for their own account on a regular or continuous basis.\24\ Accordingly, under ISE's current rules, a market maker must enter continuous quotations for the options classes to which it is appointed.\25\ In return, the market maker receives certain benefits, including participation entitlements \26\ and an exception from the prohibition in Section 11(a) of the Act.\27\ --------------------------------------------------------------------------- \24\ See, e.g., Securities Exchange Act Release No. 68341 (December 3, 2012), 77 FR 73065, 73076 (December 7, 2012) (approving the application of Miami International Securities Exchange, LLC for registration as a national securities exchange); Securities Exchange Act Release No. 70050 (July 26, 2013), 78 FR 46622 (August 1, 2013) (approving the application of Topaz Exchange, LLC for registration as a national securities exchange); Securities Exchange Act Release No. 76998 (January 29, 2016), 81 FR 6066 (February 4, 2016) (approving the application of ISE Mercury, LLC for registration as a national securities exchange). \25\ See ISE Rule 804(e). \26\ See, e.g., ISE Rule 713. \27\ 15 U.S.C. 78k(a). --------------------------------------------------------------------------- The Exchange proposes to require Clearing Member approval before a market maker can resume trading after triggering a market-wide speed bump. The Exchange states in its filing that the Clearing Member should approve a market maker's re-entry into the market after a market-wide speed bump because the Clearing Member guarantees the market maker's trades and bears the ultimate financial risk associated with the transactions.\28\ The Exchange notes that, while not all market makers are Clearing Members, all market makers require a Clearing Member's consent to clear transactions on their behalf in order to conduct business on the Exchange.\29\ The Exchange asserts that [[Page 50761]] the proposed rule change will permit Clearing Members to better monitor and manage the potential risks assumed by market makers and will provide Clearing Members with greater control and flexibility over their risk tolerance and exposure.\30\ The Exchange further contends that, ``[w]hile in some cases [the proposed rule change] may result in a minimal delay for a market maker that wants to reenter the market quickly following a market-wide speed bump, the Exchange believes that Clearing Member approval . . . ensure[s] that the market maker does not prematurely enter the market without adequate safeguards . . . '' \31\ --------------------------------------------------------------------------- \28\ See Notice, supra note 5, at 74830. \29\ Each market maker authorized to trade on the Exchange must obtain from a Clearing Member a ``Market Maker Letter of Guarantee'' wherein the Clearing Member accepts financial responsibility for all Exchange transactions made by the market maker. See ISE Rule 808. \30\ See Notice, supra note 5, at 74830. Under ISE's current rules, the Exchange may share any Member-designated risk settings in the trading system with the Clearing Member that clears transactions on behalf of the Member. See ISE Rule 706(a). \31\ See Notice, supra note 5, at 74830. --------------------------------------------------------------------------- As noted above, on February 26, 2016, the Commission instituted proceedings under Section 19(b)(2)(B) of the Act \32\ to determine whether to approve or disapprove the proposed rule change.\33\ In the order instituting proceedings, the Commission noted that the Exchange does not address how the proposal would impact the continuous quoting obligations of market makers and provided no basis for its statement that the proposed rule would result in only a ``minimal delay'' for a market maker seeking to resume quoting following a market-wide speed bump. Accordingly, the Commission stated that the proposed rule change raises questions regarding the ability of market makers to meet their quoting obligations, and whether the proposed rule change is consistent with the requirements of Section 6(b)(5) of the Act. The Exchange did not respond to the issues raised in the Commission's order instituting proceedings. --------------------------------------------------------------------------- \32\ 15 U.S.C. 78s(b)(2)(B). \33\ See Securities Exchange Act Release No. 77246, 81 FR 11305 (March 3, 2016) (``Order Instituting Proceedings''). --------------------------------------------------------------------------- The Commission does not believe the Exchange has met its burden to demonstrate that the proposed rule change is consistent with the Act and the rules and regulations issued thereunder. The Exchange proposes to require Clearing Member approval before a market maker can resume trading following a market-wide speed bump so that Clearing Members can better monitor and manage their potential risks. Providing this additional risk management tool to Clearing Members, however, necessarily will delay the resumption of quoting by market makers and the resulting potential market quality benefits to all users of the Exchange. Although the Exchange states that any delay would be minimal, it provides no evidence to support that assertion. The Exchange also has not explained why Clearing Member risks cannot effectively be addressed through other means, such as bilateral, contractual arrangements between Clearing Members and market makers that do not impede a market maker's ability to promptly resume quoting and enhance the Exchange's market quality. Accordingly, the Commission does not believe that the Exchange has met its burden to demonstrate that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder. In particular, the Commission does not find that the proposed rule change is consistent with the requirements of Section 6(b)(5) of the Act, which requires that the rules of an exchange, among other things, be designed to promote just and equitable principles of trade, 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.\34\ --------------------------------------------------------------------------- \34\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- IV. Conclusion For the foregoing reasons, the Commission does not find that the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to a national securities exchange and, in particular, with Section 6(b)(5) of the Act. IT IS THEREFORE ORDERED, pursuant to Section 19(b)(2) of the Act,\35\ that the proposed rule change (SR-ISE-2015-30) be, hereby is, disapproved. --------------------------------------------------------------------------- \35\ 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\36\ --------------------------------------------------------------------------- \36\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2016-18207 Filed 8-1-16; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 81, No. 148 / Tuesday, August 2, 2016 / Notices 50759
Member risks cannot effectively be with the Securities and Exchange SECURITIES AND EXCHANGE
addressed through other means, such as Commission (‘‘Commission’’), pursuant COMMISSION
bilateral, contractual arrangements to Section 19(b)(1) of the Securities
between Clearing Members and market Exchange Act of 1934 (‘‘Act’’) 1 and Rule [Release No. 34–78423; File No. SR–ISE–
makers that do not impede a market 19b–4 thereunder,2 a proposed rule 2015–30]
maker’s ability to promptly resume change to list and trade shares of the
quoting and enhance the Exchange’s Global Currency Gold Fund under Self-Regulatory Organizations;
market quality. International Securities Exchange,
NYSE Arca Equities Rule 8.201. The
Accordingly, the Commission does LLC; Order Disapproving a Proposed
proposed rule change was published for
not believe that the Exchange has met Rule Change To Amend Rule 804(g)
comment in the Federal Register on
its burden to demonstrate that the
proposed rule change is consistent with June 21, 2016.3 July 27, 2016.
the requirements of the Act and the Section 19(b)(2) of the Act 4 provides I. Introduction
rules and regulations thereunder. In that, within 45 days of the publication
On November 10, 2015, the
particular, the Commission does not of notice of the filing of a proposed rule
International Securities Exchange, LLC
find that the proposed rule change is change, or within such longer period up
(‘‘ISE’’ or the ‘‘Exchange’’) filed with the
consistent with the requirements of to 90 days as the Commission may Securities and Exchange Commission
Section 6(b)(5) of the Act, which designate if it finds such longer period (the ‘‘Commission’’), pursuant to
requires that the rules of an exchange, to be appropriate and publishes its Section 19(b)(1) of the Securities
among other things, be designed to reasons for so finding or as to which the Exchange Act of 1934 (the ‘‘Act’’) 1 and
promote just and equitable principles of self-regulatory organization consents, Rule 19b–4 thereunder,2 a proposed rule
trade, to remove impediments to and the Commission shall either approve the change to require Clearing Member 3
perfect the mechanism of a free and proposed rule change, disapprove the approval for a market maker 4 to resume
open market and a national market proposed rule change, or institute trading after the activation of a market-
system, and, in general, to protect proceedings to determine whether the wide speed bump under ISE Rule
investors and the public interest.34 proposed rule change should be 804(g). The proposed rule change was
IV. Conclusion disapproved. The Commission is published for comment in the Federal
For the foregoing reasons, the extending this 45-day time period. The Register on November 30, 2015.5
Commission does not find that the Commission finds that it is appropriate On January 13, 2016, the Commission
proposed rule change is consistent with to designate a longer period within extended the time period within which
the Act and the rules and regulations which to take action on the proposed to approve the proposed rule change,
thereunder applicable to a national rule change so that it has sufficient time disapprove the proposed rule change, or
securities exchange and, in particular, to consider the proposed rule change. institute proceedings to determine
with Section 6(b)(5) of the Act. whether to disapprove the proposed
Accordingly, the Commission,
IT IS THEREFORE ORDERED, rule change to February 28, 2016.6 On
pursuant to Section 19(b)(2) of the Act,5 February 26, 2016, the Commission
pursuant to Section 19(b)(2) of the designates September 19, 2016, as the
Act,35 that the proposed rule change instituted proceedings under Section
date by which the Commission shall 19(b)(2)(B) of the Act 7 to determine
(SR–ISE Gemini-2015–17) be, hereby is, either approve or disapprove or institute
disapproved. whether to approve or disapprove the
proceedings to determine whether to proposed rule change.8 Specifically, the
For the Commission, by the Division of disapprove the proposed rule change
Trading and Markets, pursuant to delegated
Commission instituted proceedings to
(File Number SR–NYSEArca–2016–84). allow for additional analysis of, and
authority.36
Robert W. Errett, For the Commission, by the Division of input from commenters with respect to,
Trading and Markets, pursuant to delegated the proposed rule change’s consistency
Deputy Secretary.
authority.6 with Section 6(b)(5) of the Act.9 On May
[FR Doc. 2016–18202 Filed 8–1–16; 8:45 am]
BILLING CODE 8011–01–P
Robert W. Errett,
1 15 U.S.C. 78s(b)(1).
Deputy Secretary. 2 17 CFR 240.19b–4.
[FR Doc. 2016–18203 Filed 8–1–16; 8:45 am] 3 A ‘‘Clearing Member’’ is a Member that is self-
SECURITIES AND EXCHANGE BILLING CODE 8011–01–P clearing or an Electronic Access Member that clears
COMMISSION transactions executed on or through the facilities of
the Exchange for other Members of the Exchange.
[Release No. 34–78425; File No. SR– See ISE Rule 100(a)(8). An ‘‘Electronic Access
NYSEArca–2016–84] Member’’ is an Exchange Member that is approved
to exercise trading privileges associated with EAM
Self-Regulatory Organizations; NYSE Rights. See Article XIII, Section 13.1(l) of the
Arca, Inc.; Notice of Designation of a Second Amended and Restated Constitution of ISE.
4 ISE has two categories of market makers:
Longer Period for Commission Action Primary Market Makers (‘‘PMMs’’) and Competitive
on a Proposed Rule Change to List and Market Makers (‘‘CMMs’’). A PMM is appointed to
Trade Shares of the Global Currency each options class traded on the Exchange, but a
Gold Fund Under NYSE Arca Equities CMM may or may not be appointed to each such
options class. See ISE Rule 802.
Rule 8.201
mstockstill on DSK3G9T082PROD with NOTICES
5 See Securities Exchange Act Release No. 76506
July 27, 2016. 1 15 U.S.C. 78s(b)(1). (November 23, 2015), 80 FR 74829 (‘‘Notice’’).
6 See Securities Exchange Act Release No. 76893,
On June 1, 2016, NYSE Arca, Inc. 2 17 CFR 240.19b–4.
81 FR 3217 (January 20, 2016).
(‘‘NYSE Arca’’ or ‘‘Exchange’’) filed 3 See Securities Exchange Act Release No. 78075
7 15 U.S.C. 78s(b)(2)(B).
(June 15, 2016), 81 FR 40381. 8 See Securities Exchange Act Release No. 77246,
34 15 4 15 U.S.C. 78s(b)(2).
U.S.C. 78f(b)(5). 81 FR 11305 (March 3, 2016) (‘‘Order Instituting
35 15 5 Id.
U.S.C. 78s(b)(2). Proceedings’’).
36 17 CFR 200.30–3(a)(12). 6 17 CFR 200.30–3(a)(31). 9 15 U.S.C. 78f(b)(5).
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![Federal Register / Vol. 81, No. 148 / Tuesday, August 2, 2016 / Notices 50761
the proposed rule change will permit users of the Exchange. Although the SECURITIES AND EXCHANGE
Clearing Members to better monitor and Exchange states that any delay would be COMMISSION
manage the potential risks assumed by minimal, it provides no evidence to
[Release No. 34–78428; File No. SR–BOX–
market makers and will provide support that assertion. The Exchange 2016–36]
Clearing Members with greater control also has not explained why Clearing
and flexibility over their risk tolerance Member risks cannot effectively be Self-Regulatory Organizations; BOX
and exposure.30 The Exchange further addressed through other means, such as Options Exchange LLC; Notice of
contends that, ‘‘[w]hile in some cases bilateral, contractual arrangements Filing and Immediate Effectiveness of
[the proposed rule change] may result in between Clearing Members and market a Proposed Rule Change To Amend
a minimal delay for a market maker that makers that do not impede a market the Fee Schedule on the BOX Market
wants to reenter the market quickly LLC (‘‘BOX’’) Options Facility
maker’s ability to promptly resume
following a market-wide speed bump,
quoting and enhance the Exchange’s
the Exchange believes that Clearing July 27, 2016.
Member approval . . . ensure[s] that the market quality. Pursuant to Section 19(b)(1) of the
market maker does not prematurely Accordingly, the Commission does Securities Exchange Act of 1934 (the
enter the market without adequate not believe that the Exchange has met ‘‘Act’’),1 and Rule 19b–4 thereunder,2
safeguards . . . ’’ 31 its burden to demonstrate that the notice is hereby given that on July 25,
As noted above, on February 26, 2016, proposed rule change is consistent with 2016, BOX Options Exchange LLC (the
the Commission instituted proceedings the requirements of the Act and the ‘‘Exchange’’) filed with the Securities
under Section 19(b)(2)(B) of the Act 32 to rules and regulations thereunder. In and Exchange Commission
determine whether to approve or particular, the Commission does not (‘‘Commission’’) the proposed rule
disapprove the proposed rule change.33 find that the proposed rule change is change as described in Items I, II, and
In the order instituting proceedings, the consistent with the requirements of III below, which Items have been
Commission noted that the Exchange Section 6(b)(5) of the Act, which prepared by the Exchange. The
does not address how the proposal requires that the rules of an exchange, Exchange filed the proposed rule change
would impact the continuous quoting among other things, be designed to pursuant to Section 19(b)(3)(A)(ii) of the
obligations of market makers and Act,3 and Rule 19b–4(f)(2) thereunder,4
promote just and equitable principles of
provided no basis for its statement that which renders the proposal effective
trade, to remove impediments to and
the proposed rule would result in only upon filing with the Commission. The
perfect the mechanism of a free and
a ‘‘minimal delay’’ for a market maker Commission is publishing this notice to
seeking to resume quoting following a open market and a national market
solicit comments on the proposed rule
market-wide speed bump. Accordingly, system, and, in general, to protect change from interested persons.
the Commission stated that the investors and the public interest.34
I. Self-Regulatory Organization’s
proposed rule change raises questions IV. Conclusion Statement of the Terms of the Substance
regarding the ability of market makers to
For the foregoing reasons, the of the Proposed Rule Change
meet their quoting obligations, and
whether the proposed rule change is Commission does not find that the The Exchange is filing with the
consistent with the requirements of proposed rule change is consistent with Securities and Exchange Commission
Section 6(b)(5) of the Act. The Exchange the Act and the rules and regulations (‘‘Commission’’) a proposed rule change
did not respond to the issues raised in thereunder applicable to a national to amend the Fee Schedule to adjust the
the Commission’s order instituting securities exchange and, in particular, fee assessed in Section IV (Eligible
proceedings. with Section 6(b)(5) of the Act. Orders Routed to an Away Exchange) on
The Commission does not believe the the BOX Market LLC (‘‘BOX’’) options
Exchange has met its burden to IT IS THEREFORE ORDERED, facility. While changes to the fee
demonstrate that the proposed rule pursuant to Section 19(b)(2) of the schedule pursuant to this proposal will
change is consistent with the Act and Act,35 that the proposed rule change be effective upon filing, the changes will
the rules and regulations issued (SR–ISE–2015–30) be, hereby is, become operative on August 1, 2016.
thereunder. The Exchange proposes to disapproved. The text of the proposed rule change is
require Clearing Member approval For the Commission, by the Division of available from the principal office of the
before a market maker can resume Trading and Markets, pursuant to delegated Exchange, at the Commission’s Public
trading following a market-wide speed authority.36 Reference Room and also on the
bump so that Clearing Members can Robert W. Errett, Exchange’s Internet Web site at http://
better monitor and manage their boxexchange.com.
Deputy Secretary.
potential risks. Providing this additional
[FR Doc. 2016–18207 Filed 8–1–16; 8:45 am] II. Self-Regulatory Organization’s
risk management tool to Clearing
BILLING CODE 8011–01–P Statement of the Purpose of, and
Members, however, necessarily will
Statutory Basis for, the Proposed Rule
delay the resumption of quoting by
Change
market makers and the resulting
potential market quality benefits to all In its filing with the Commission, the
Exchange included statements
30 See Notice, supra note 5, at 74830. Under ISE’s concerning the purpose of and basis for
mstockstill on DSK3G9T082PROD with NOTICES
current rules, the Exchange may share any Member- the proposed rule change and discussed
designated risk settings in the trading system with any comments it received on the
the Clearing Member that clears transactions on
behalf of the Member. See ISE Rule 706(a). proposed rule change. The text of these
31 See Notice, supra note 5, at 74830.
32 15 U.S.C. 78s(b)(2)(B). 1 15 U.S.C. 78s(b)(1).
34 15 U.S.C. 78f(b)(5). 2 17
33 See Securities Exchange Act Release No. 77246, CFR 240.19b–4.
35 15 U.S.C. 78s(b)(2). 3 15 U.S.C. 78s(b)(3)(A)(ii).
81 FR 11305 (March 3, 2016) (‘‘Order Instituting
Proceedings’’). 36 17 CFR 200.30–3(a)(12). 4 17 CFR 240.19b–4(f)(2).
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Document Created: 2016-08-02 01:47:47
Document Modified: 2016-08-02 01:47:47
| Category | Regulatory Information | |
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| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| FR Citation | 81 FR 50759 |
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