81 FR 5806 - Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Schedule of Fees
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 22 (February 3, 2016)
Federal Register Volume 81, Issue 22 (February 3, 2016)
| Page Range | 5806-5807 | |
| FR Document | 2016-01927 |
[Federal Register Volume 81, Number 22 (Wednesday, February 3, 2016)] [Notices] [Pages 5806-5807] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-01927] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-76990; File No. SR-ISE-2016-04] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Schedule of Fees January 28, 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 January 19, 2016 the International Securities Exchange, LLC (the ``Exchange'' or the ``ISE'') filed with the Securities and Exchange Commission the proposed rule change, as described in Items I and II below, which items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The ISE proposes to amend the Schedule of Fees to rename its Payment for Order Flow program. The text of the proposed rule change is available on the Exchange's Web site (http://www.ise.com), at the principal office of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The self-regulatory organization has prepared summaries, set forth in sections A, B and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange administers a payment for order flow (``PFOF'') program that helps Market Makers \3\ establish PFOF arrangements with Electronic Access Members (``EAMs'') in exchange for those EAMs routing some or all of their order flow to the Market Maker. This PFOF program is funded through a fee of $0.70 per contract,\4\ which is paid by ISE Market Makers for each regular Priority Customer \5\ contract executed in Non-Select Symbols.\6\ The Exchange now proposes to rename the PFOF fee to ``marketing fee'' to keep the name of this program consistent with usage on other options markets that have adopted this terminology. The Exchange is not proposing any substantive changes to this program. --------------------------------------------------------------------------- \3\ The term ``Market Makers'' refers to ``Competitive Market Makers'' and ``Primary Market Makers'' collectively. See Rule 100(a)(25). \4\ The fee is waived in FX Options, Flash Orders, and for Complex Orders in all symbols. The PFOF fee is rebated proportionately to the members that paid the fee such that on a monthly basis the PFOF fund balance administered by a Primary Market Maker for a Group of options established under Rule 802(b) does not exceed $100,000 and the PFOF fund balance administered by a preferenced Competitive Market Maker for such a Group does not exceed $100,000. A preferenced Competitive Market Maker that elects not to administer a fund will not be charged the PFOF fee. The Exchange assesses an administrative fee of 0.45% on the total amount of the funds collected each month. \5\ A ``Priority Customer'' is a person or entity that is not a broker/dealer in securities, and does not place more than 390 orders in listed options per day on average during a calendar month for its own beneficial account(s), as defined in Rule 100(a)(37A). \6\ ``Non-Select Symbols'' are options overlying all symbols excluding Select Symbols. The Schedule of Fees currently states that PFOF is applicable to ``Non-Penny Pilot Symbols,'' which is an outdated term. The Exchange therefore proposes to update the Schedule of Fees to refer instead to ``Non-Select Symbols.'' --------------------------------------------------------------------------- 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.\7\ In particular, the proposal is consistent with Section 6(b)(5) of the Act,\8\ because it is designed to promote just and equitable principles of trade, to 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. The proposed rule change makes a non-substantive change to the name of the PFOF program operated by the Exchange. The Exchange believes that this change will be beneficial for members and investors who already use this term with respect to trading on other options markets that have already adopted this terminology. The Exchange further notes that the marketing fee program will continue to operate exactly as it does today. --------------------------------------------------------------------------- \7\ 15 U.S.C. 78f(b). \8\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,\9\ the Exchange does not believe that the proposed rule change will impose any burden on intermarket or intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change is a non-substantive name change and is therefore not designed to have any competitive impact. --------------------------------------------------------------------------- \9\ 15 U.S.C. 78f(b)(8). --------------------------------------------------------------------------- C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the 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 [[Page 5807]] become effective pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6) thereunder.\11\ --------------------------------------------------------------------------- \10\ 15 U.S.C. 78s(b)(3)(A). \11\ 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 \12\ normally does not become operative for 30 days after the date of its filing. However, Rule 19b-4(f)(6)(iii) \13\ 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 asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The proposed rule change modifies the name of the PFOF program operated by the Exchange in a manner that is consistent with terminology used on other options markets.\14\ Because the proposal does not raise any new or novel issues and only involves a non-material change in terminology, the Commission believes the waiver of the operative delay is consistent with the protection of investors and the public interest. Therefore, the Commission hereby waives the operative delay and designates the proposal operative upon filing.\15\ --------------------------------------------------------------------------- \12\ 17 CFR 240.19b-4(f)(6). \13\ 17 CFR 240.19b-4(f)(6)(iii). \14\ See e.g., Chicago Board Options Exchange Fee Schedule, available at http://www.cboe.com/publish/feeschedule/CBOEFeeSchedule.pdf. \15\ 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 change 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-2016-04 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-ISE-2016-04. 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 the 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-2016-04, and should be submitted on or before February 24, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\16\ --------------------------------------------------------------------------- \16\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2016-01927 Filed 2-2-16; 8:45 am] BILLING CODE 8011-01-P
![5806 Federal Register / Vol. 81, No. 22 / Wednesday, February 3, 2016 / Notices
inspection and copying at the principal II. Self-Regulatory Organization’s 2. Statutory Basis
office of the Exchange. All comments Statement of the Purpose of, and The Exchange believes that the
received will be posted without change; Statutory Basis for, the Proposed Rule proposed rule change is consistent with
the Commission does not edit personal Change the requirements of the Act and the
identifying information from In its filing with the Commission, the rules and regulations thereunder that
submissions. You should submit only self-regulatory organization included are applicable to a national securities
information that you wish to make statements concerning the purpose of, exchange, and, in particular, with the
available publicly. All submissions and basis for, the proposed rule change requirements of Section 6(b) of the Act.7
should refer to File Number SR– and discussed any comments it received In particular, the proposal is consistent
NYSEMKT–2016–12 and should be on the proposed rule change. The text with Section 6(b)(5) of the Act,8 because
submitted on or before February 24, of these statements may be examined at it is designed to promote just and
2016. the places specified in Item IV below. equitable principles of trade, to remove
The self-regulatory organization has impediments to and perfect the
For the Commission, by the Division of
prepared summaries, set forth in mechanisms of a free and open market
Trading and Markets, pursuant to delegated
sections A, B and C below, of the most and a national market system and, in
authority.10
significant aspects of such statements. general, to protect investors and the
Robert W. Errett, public interest. The proposed rule
Deputy Secretary. A. Self-Regulatory Organization’s change makes a non-substantive change
[FR Doc. 2016–01932 Filed 2–2–16; 8:45 am] Statement of the Purpose of, and the to the name of the PFOF program
BILLING CODE 8011–01–P
Statutory Basis for, the Proposed Rule operated by the Exchange. The
Change Exchange believes that this change will
1. Purpose be beneficial for members and investors
SECURITIES AND EXCHANGE who already use this term with respect
COMMISSION The Exchange administers a payment to trading on other options markets that
for order flow (‘‘PFOF’’) program that have already adopted this terminology.
helps Market Makers 3 establish PFOF The Exchange further notes that the
[Release No. 34–76990; File No. SR–ISE– arrangements with Electronic Access
2016–04] marketing fee program will continue to
Members (‘‘EAMs’’) in exchange for operate exactly as it does today.
those EAMs routing some or all of their
Self-Regulatory Organizations; B. Self-Regulatory Organization’s
order flow to the Market Maker. This
International Securities Exchange, PFOF program is funded through a fee Statement on Burden on Competition
LLC; Notice of Filing and Immediate of $0.70 per contract,4 which is paid by In accordance with Section 6(b)(8) of
Effectiveness of Proposed Rule ISE Market Makers for each regular the Act,9 the Exchange does not believe
Change To Amend the Schedule of Priority Customer 5 contract executed in that the proposed rule change will
Fees Non-Select Symbols.6 The Exchange impose any burden on intermarket or
January 28, 2016. now proposes to rename the PFOF fee intramarket competition that is not
to ‘‘marketing fee’’ to keep the name of necessary or appropriate in furtherance
Pursuant to Section 19(b)(1) of the this program consistent with usage on of the purposes of the Act. The
Securities Exchange Act of 1934 (the other options markets that have adopted proposed rule change is a non-
‘‘Act’’),1 and Rule 19b–4 thereunder,2 this terminology. The Exchange is not substantive name change and is
notice is hereby given that on January proposing any substantive changes to therefore not designed to have any
19, 2016 the International Securities this program. competitive impact.
Exchange, LLC (the ‘‘Exchange’’ or the
‘‘ISE’’) filed with the Securities and 3 The term ‘‘Market Makers’’ refers to
C. Self-Regulatory Organization’s
Exchange Commission the proposed ‘‘Competitive Market Makers’’ and ‘‘Primary Market Statement on Comments on the
rule change, as described in Items I and Makers’’ collectively. See Rule 100(a)(25). Proposed Rule Change Received From
II below, which items have been
4 The fee is waived in FX Options, Flash Orders, Members, Participants, or Others
and for Complex Orders in all symbols. The PFOF
prepared by the self-regulatory fee is rebated proportionately to the members that The Exchange has not solicited, and
organization. The Commission is paid the fee such that on a monthly basis the PFOF does not intend to solicit, comments on
publishing this notice to solicit fund balance administered by a Primary Market this proposed rule change. The
Maker for a Group of options established under
comments on the proposed rule change Rule 802(b) does not exceed $100,000 and the PFOF
Exchange has not received any
from interested persons. fund balance administered by a preferenced unsolicited written comments from
Competitive Market Maker for such a Group does members or other interested parties.
I. Self-Regulatory Organization’s not exceed $100,000. A preferenced Competitive
Statement of the Terms of Substance of Market Maker that elects not to administer a fund III. Date of Effectiveness of the
the Proposed Rule Change will not be charged the PFOF fee. Proposed Rule Change and Timing for
The Exchange assesses an administrative fee of Commission Action
0.45% on the total amount of the funds collected
The ISE proposes to amend the each month. Because the proposed rule change
Schedule of Fees to rename its Payment 5 A ‘‘Priority Customer’’ is a person or entity that does not (i) significantly affect the
for Order Flow program. The text of the is not a broker/dealer in securities, and does not protection of investors or the public
proposed rule change is available on the place more than 390 orders in listed options per day
interest; (ii) impose any significant
on average during a calendar month for its own
mstockstill on DSK4VPTVN1PROD with NOTICES
Exchange’s Web site (http:// burden on competition; and (iii) become
beneficial account(s), as defined in Rule
www.ise.com), at the principal office of 100(a)(37A). operative for 30 days from the date on
the Exchange, and at the Commission’s 6 ‘‘Non-Select Symbols’’ are options overlying all
which it was filed, or such shorter time
Public Reference Room. symbols excluding Select Symbols. The Schedule of as the Commission may designate, it has
Fees currently states that PFOF is applicable to
‘‘Non-Penny Pilot Symbols,’’ which is an outdated
10 17 CFR 200.30–3(a)(12). 7 15 U.S.C. 78f(b).
term. The Exchange therefore proposes to update
1 15 U.S.C. 78s(b)(1). 8 15 U.S.C. 78f(b)(5).
the Schedule of Fees to refer instead to ‘‘Non-Select
2 17 CFR 240.19b–4. Symbols.’’ 9 15 U.S.C. 78f(b)(8).
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![Federal Register / Vol. 81, No. 22 / Wednesday, February 3, 2016 / Notices 5807
become effective pursuant to Section Comments may be submitted by any of SECURITIES AND EXCHANGE
19(b)(3)(A) of the Act 10 and Rule 19b– the following methods: COMMISSION
4(f)(6) thereunder.11
Electronic Comments [Release No. 34–76983; File No. SR–NYSE–
A proposed rule change filed 2015–48]
pursuant to Rule 19b–4(f)(6) under the • Use the Commission’s Internet
Act 12 normally does not become comment form (http://www.sec.gov/ Self-Regulatory Organizations; New
operative for 30 days after the date of its rules/sro.shtml); or York Stock Exchange LLC; Order
filing. However, Rule 19b–4(f)(6)(iii) 13 Approving a Proposed Rule Change
permits the Commission to designate a • Send an email to rule-
Deleting Rule 410B Governing
shorter time if such action is consistent comments@sec.gov. Please include File
Reporting Requirements for Off-
with the protection of investors and the Number SR–ISE–2016–04 on the subject Exchange Transactions
public interest. The Exchange has asked line.
the Commission to waive the 30-day January 28, 2016.
Paper Comments
operative delay so that the proposal may I. Introduction
become operative immediately upon • Send paper comments in triplicate
On October 16, 2015, New York Stock
filing. The proposed rule change to Secretary, Securities and Exchange
Exchange LLC (‘‘NYSE’’ or the
modifies the name of the PFOF program Commission, 100 F Street NE., ‘‘Exchange’’) filed with the Securities
operated by the Exchange in a manner Washington, DC 20549–1090. and Exchange Commission
that is consistent with terminology used (‘‘Commission’’), pursuant to Section
All submissions should refer to File
on other options markets.14 Because the 19(b)(1) of the Securities Exchange Act
Number SR–ISE–2016–04. This file
proposal does not raise any new or of 1934 (‘‘Act’’) 1 and Rule 19b–4
novel issues and only involves a non- number should be included on the
subject line if email is used. To help the thereunder,2 a proposed rule change to
material change in terminology, the delete Rule 410B governing reporting
Commission believes the waiver of the Commission process and review your
comments more efficiently, please use requirements for off-Exchange
operative delay is consistent with the transactions. The proposed rule change
protection of investors and the public only one method. The Commission will
post all comments on the Commission’s was published for comment in the
interest. Therefore, the Commission Federal Register on November 2, 2015.3
hereby waives the operative delay and Internet Web site (http://www.sec.gov/
rules/sro.shtml). Copies of the The Commission received no comment
designates the proposal operative upon letters on the proposed rule change. On
filing.15 submission, all subsequent
December 16, 2015, the Commission
At any time within 60 days of the amendments, all written statements
designated a longer period within which
filing of the proposed rule change, the with respect to the proposed rule
to approve the proposed rule change,
Commission summarily may change that are filed with the
disapprove the proposed rule change, or
temporarily suspend such rule change if Commission, and all written
institute proceedings to determine
it appears to the Commission that such communications relating to the
whether to approve or disapprove the
action is necessary or appropriate in the proposed rule change between the
proposed rule change.4 The Commission
public interest, for the protection of Commission and any person, other than is approving the proposed rule change.
investors, or otherwise in furtherance of those that may be withheld from the
the purposes of the Act. If the public in accordance with the II. Description of the Proposed Rule
Commission takes such action, the provisions of 5 U.S.C. 552, will be Change
Commission shall institute proceedings available for Web site viewing and The Exchange proposes to delete Rule
to determine whether the proposed rule printing in the Commission’s Public 410B, which sets forth certain regulatory
change should be approved or Reference Room, 100 F Street NE., reporting requirements for member or
disapproved. Washington, DC 20549, on official member organizations effecting off-
business days between the hours of Exchange transactions in Exchange
IV. Solicitation of Comments 10:00 a.m. and 3:00 p.m. Copies of the listed securities that are not reported to
Interested persons are invited to filing also will be available for the Consolidated Tape, and to make
submit written data, views, and inspection and copying at the principal conforming amendments to Rule 476A
arguments concerning the foregoing, office of the Exchange. All comments to delete a reference to Rule 410B. The
including whether the proposed rule received will be posted without change; Exchange represents that Rule 410B is
change is consistent with the Act. the Commission does not edit personal no longer necessary in light of changes
identifying information from in trade reporting and regulatory
10 15 U.S.C. 78s(b)(3)(A). submissions. You should submit only requirements that have been put in
11 17 CFR 240.19b–4(f)(6). As required under Rule information that you wish to make place since the Exchange adopted Rule
19b–4(f)(6)(iii), the Exchange provided the available publicly. All submissions 410B.
Commission with written notice of its intent to file should refer to File Number SR–ISE–
the proposed rule change, along with a brief Changes to Regulatory Landscape
description and the text of the proposed rule 2016–04, and should be submitted on or
change, at least five business days prior to the date before February 24, 2016. On July 30, 2007, the National
of filing of the proposed rule change, or such Association of Securities Dealers, Inc.
shorter time as designated by the Commission. For the Commission, by the Division of
(‘‘NASD’’), NYSE, and NYSE
12 17 CFR 240.19b–4(f)(6). Trading and Markets, pursuant to delegated
Regulation, Inc. (‘‘NYSE Regulation’’)
mstockstill on DSK4VPTVN1PROD with NOTICES
13 17 CFR 240.19b–4(f)(6)(iii). authority.16
14 See e.g., Chicago Board Options Exchange Fee
consolidated their member firm
Robert W. Errett,
Schedule, available at http://www.cboe.com/
publish/feeschedule/CBOEFeeSchedule.pdf. Deputy Secretary. 1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
15 For purposes only of waiving the 30-day [FR Doc. 2016–01927 Filed 2–2–16; 8:45 am]
3 See Securities Exchange Act Release No. 76277
operative delay, the Commission has also BILLING CODE 8011–01–P
considered the proposed rule’s impact on (October 27, 2015), 80 FR 67443.
efficiency, competition, and capital formation. See 4 See Securities Exchange Act Release No. 76666,
15 U.S.C. 78c(f). 16 17 CFR 200.30–3(a)(12). 80 FR 79644 (December 22, 2015).
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Document Created: 2016-02-03 00:40:42
Document Modified: 2016-02-03 00:40:42
| 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 5806 |
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