81 FR 69560 - Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Adopt a New Rule 213

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 194 (October 6, 2016)

Page Range		69560-69562
FR Document		2016-24147
Federal Register, Volume 81 Issue 194 (Thursday, October 6, 2016)
[Federal Register Volume 81, Number 194 (Thursday, October 6, 2016)]
[Notices]
[Pages 69560-69562]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-24147]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79014; File No. SR-ISE-2016-24]


Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change To Adopt a New Rule 213

September 30, 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 September 28, 2016, the International Securities Exchange, LLC 
(``ISE'' or ``Exchange'') 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 Exchange. 
The Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to adopt a new Rule 213 entitled, 
``Collection of Exchange Fees and Other Claims'' to require Members to 
provide a clearing account number at the National Securities Clearing 
Corporation (``NSCC'') for purposes of permitting the Exchange to debit 
any undisputed or final fees, fines, charges and/or other monetary 
sanctions or monies due and owing to the Exchange.
    The text of the proposed rule change is available on the Exchange's 
Web site at 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 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
    The purpose of the proposed rule change is to collect undisputed or 
final fees, fines, charges and/or other monetary sanctions or monies 
due and owing to the Exchange through NSCC.\3\ This proposal will 
provide a cost savings to the Exchange in that it will alleviate 
administrative processes related to the collection of monies owed to 
the Exchange.\4\ Collection matters divert staff resources away from 
the Exchange's regulatory and business purposes. In addition, the 
debiting process will prevent Member accounts from becoming overdue. 
The Exchange notes that it has a billing dispute policy.
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    \3\ The Exchange will not debit accounts for fees that are 
unusually large or for special circumstances, unless such debiting 
is requested by the Member.
    \4\ Today, some fees are collected through The Options Clearing 
Corporation, but not all fees.
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    The Exchange proposes to adopt new Rule 213 and require Members, 
and all applicants for registration as such to provide a clearing 
account number for an account at NSCC for purposes of permitting the 
Exchange to debit any undisputed or final fees, fines, charges and/or 
other monetary sanctions or monies due and owing to the Exchange or 
other charges related to Rules 205, 206, 207, 208, 209, and 210.\5\
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    \5\ See ISE Rules 205 (Access Fees), 206 (Transaction Fees), 207 
(Communication Fees), 208 (Regulatory Fees or Charges), 209 
(Transfer Fees) and 210 (Liability for Payment of Fees).
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    The Exchange will send a monthly invoice \6\ to each Member on 
approximately the 4th-6th business day of the following month.\7\ The 
Exchange will also send a file to NSCC each month on approximately the 
23rd of the following month to initiate the debit of the appropriate 
amount stated on the Member's invoice for the prior month. Because the 
Members will receive an invoice well before any monies are debited 
(normally within two weeks), the Members will have adequate time to 
contact the staff with any questions concerning their invoice. If a 
Member disputes an invoice, the Exchange will not include the disputed 
amount in the debit if the Member has disputed the amount in writing to 
the Exchange's designated staff by the 15th of the month, or the 
following business day if the 15th is not a business day, and the 
amount in dispute is at least $10,000 or greater.
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    \6\ The monthly invoice will indicate that the amount on the 
invoice will be debited from the designated NSCC account. Each 
month, the Exchange will send a file to the Member's clearing firm 
which will indicate the amounts to be debited from each Member. If a 
Member is ``self-clearing,'' no such file would be sent as the 
Member would receive the invoice, as noted above, which would 
indicate the amount to be debited.
    \7\ By way of example, October invoices would be sent on 
November 7th.
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    Once NSCC receives the file from the Exchange, NSCC would proceed 
to debit the amounts indicated from the Clearing Members' account. In 
the instance where the Member clears through an Exchange Clearing 
Member, the estimated transactions fees owed to the Exchange are 
reconciled daily by the Clearing Member to ensure adequate funds have 
been escrowed. The Exchange would debit any monies owed including 
undisputed or final fees,\8\ fines, charges and/or other monetary 
sanctions or monies due and owing to the Exchange.\9\
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    \8\ Exchange fees are noted on the Exchange Fee Schedule.
    \9\ This includes, among other things, fines which result from 
the imposition of fines pursuant to Rules 1611, Judgment and 
Sanction; and 1614, Imposition of Fines for Minor Rules Violations. 
With respect to disciplinary sanctions that are imposed by either 
the Business Conduct Committee or a Hearing Panel, the Exchange 
would not debit any monies until such action is final. The Exchange 
would not consider an action final until all appeal periods have run 
and/or all appeal timeframes are exhausted. With respect to non-
disciplinary actions, the Exchange would similarly not take action 
to debit a Member account until all appeal periods have run and/or 
all appeal timeframes are exhausted. Any uncontested disciplinary or 
non-disciplinary actions will be debited, and the amount due will 
appear on the Member's invoice prior to the actual NSCC debit.
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    The Exchange proposes this rule change become operative on October 
1, 2016. On November 23, 2016, the Exchange will debit October 2016 
billing pursuant to the process described in this rule change.\10\ The

[[Page 69561]]

Exchange will notify Members of this rule change to provide its Members 
ample time to provide the Exchange with the information necessary for 
the direct debit and prepare for the change to the collection process.
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    \10\ The initial debit will include all outstanding fees through 
October 1, 2016.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\11\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\12\ in particular, in that it is designed to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in 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 by providing Members with an 
efficient process to pay undisputed or final fees, fines, charges and/
or monetary sanctions or monies dues and owing to the Exchange.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that its proposal to debit NSCC accounts is 
reasonable because it would ease the Member's administrative burden in 
paying monthly invoices, avoid overdue balances and provide same day 
collection from all Members who owe monies to the Exchange. The 
Exchange has a billing dispute. [sic] The Member may dispute the 
invoice prior to the debit. This policy also lowers the Exchange's 
administrative costs because staff resources would not be diverted to 
review of untimely requests regarding billing.
    The Exchange believes that its proposal to debit NSCC accounts is 
equitable and not unfairly discriminatory because it will apply to all 
Members in a uniform manner. Today, the debit process is applied at all 
Nasdaq exchanges.\13\
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    \13\ See NASDAQ Phlx LLC Rule 909, The NASDAQ Stock Market LLC 
Rule 7007, NASDAQ Options Market LLC Rules at Chapter XV, Section 1, 
NASDAQ BX, Inc. Rule 7011 and BX Option Rules at Chapter XV, Section 
1 (collectively ``Nasdaq exchanges.'')
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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. With this proposal, the 
proposed debit process would apply uniformly to all Members.
    Further, this proposal would provide a cost savings to the Exchange 
in that it would alleviate administrative processes related to the 
collection of monies owed to the Exchange. Collection matters divert 
staff resources away from the Exchange's regulatory and business 
purposes. In addition, the debiting process would prevent Member 
accounts from becoming overdue.

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, it has become 
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \14\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\15\
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    \14\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \15\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file 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.
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative prior to 30 days after the date of filing. 
However, Rule 19b-4(f)(6)(iii) \16\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. In its filing with the Commission, 
the Exchange requests that the Commission waive the 30-day operative 
delay. The Exchange proposes that the proposed rule change become 
operative on October 1, 2016. On November 23, 2016, the Exchange would 
debit October 2016 billing pursuant to the process set forth in the 
proposed rule change. The Exchange represents that waiver of the 30-day 
operative delay would allow it to conform its billing processes similar 
to the process in place at the various Nasdaq exchanges.\17\ The 
Exchange notes that all ISE Members have an NSCC account or have a 
clearing firm with an NSCC account. Direct debit is an options industry 
standard. According to the Exchange, all members should be able to 
provide ISE with an NSCC account prior to the date of the November 23, 
2016 debit. Further, the Exchange believes that this process will 
alleviate administrative processes related to the collection of monies 
owed to the Exchange. For these reasons, the Commission believes that 
waiver of the 30-day operative delay is consistent with the protection 
of investors and the public interest. Therefore, the Commission 
designates the proposed rule change to be operative upon filing.\18\
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    \16\ 17 CFR 240.19b-4(f)(6)(iii).
    \17\ See supra note 13.
    \18\ For purposes only of waiving the 30-day operative delay, 
the Commission also has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    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 Comments

     Use 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-2016-24 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-2016-24. 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

[[Page 69562]]

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-2016-24 and should be 
submitted on or before October 27, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-24147 Filed 10-5-16; 8:45 am]
BILLING CODE 8011-01-P
69560 Federal Register / Vol. 81, No. 194 / Thursday, October 6, 2016 / Notices

Redmond Reinsurance Investment The text of the proposed rule change approximately the 4th–6th business day
Interval Fund [File No. 811–23041] is available on the Exchange’s Web site of the following month.7 The Exchange
Summary: Applicant, a closed-end at www.ise.com, at the principal office will also send a file to NSCC each
investment company, seeks an order of the Exchange, and at the month on approximately the 23rd of the
declaring that it has ceased to be an Commission’s Public Reference Room. following month to initiate the debit of
investment company. Applicant has the appropriate amount stated on the
II. Self-Regulatory Organization’s Member’s invoice for the prior month.
never made a public offering of its Statement of the Purpose of, and
securities and does not propose to make Because the Members will receive an
Statutory Basis for, the Proposed Rule invoice well before any monies are
a public offering or engage in business Change
of any kind. debited (normally within two weeks),
Filing Date: The application was filed In its filing with the Commission, the the Members will have adequate time to
on September 15, 2016. Exchange included statements contact the staff with any questions
Applicant’s Address: 101 East concerning the purpose of and basis for concerning their invoice. If a Member
Lancaster Avenue, Suite 201, Wayne, the proposed rule change and discussed disputes an invoice, the Exchange will
PA 19087. any comments it received on the not include the disputed amount in the
proposed rule change. The text of these debit if the Member has disputed the
For the Commission, by the Division of
Investment Management, pursuant to statements may be examined at the amount in writing to the Exchange’s
delegated authority. places specified in Item IV below. The designated staff by the 15th of the
Brent J. Fields, Exchange has prepared summaries, set month, or the following business day if
Secretary. forth in sections A, B, and C below, of the 15th is not a business day, and the
the most significant aspects of such amount in dispute is at least $10,000 or
[FR Doc. 2016–24150 Filed 10–5–16; 8:45 am]
statements. greater.
BILLING CODE 8011–01–P Once NSCC receives the file from the
A. Self-Regulatory Organization’s Exchange, NSCC would proceed to debit
Statement of the Purpose of, and the amounts indicated from the Clearing
SECURITIES AND EXCHANGE Statutory Basis for, the Proposed Rule Members’ account. In the instance
COMMISSION Change where the Member clears through an
[Release No. 34–79014; File No. SR–ISE– 1. Purpose Exchange Clearing Member, the
2016–24] estimated transactions fees owed to the
The purpose of the proposed rule Exchange are reconciled daily by the
Self-Regulatory Organizations; change is to collect undisputed or final Clearing Member to ensure adequate
International Securities Exchange, fees, fines, charges and/or other funds have been escrowed. The
LLC; Notice of Filing and Immediate monetary sanctions or monies due and Exchange would debit any monies owed
Effectiveness of Proposed Rule owing to the Exchange through NSCC.3 including undisputed or final fees,8
Change To Adopt a New Rule 213 This proposal will provide a cost fines, charges and/or other monetary
savings to the Exchange in that it will sanctions or monies due and owing to
September 30, 2016. alleviate administrative processes
Pursuant to Section 19(b)(1) of the the Exchange.9
related to the collection of monies owed The Exchange proposes this rule
Securities Exchange Act of 1934 to the Exchange.4 Collection matters
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 change become operative on October 1,
divert staff resources away from the 2016. On November 23, 2016, the
notice is hereby given that on Exchange’s regulatory and business
September 28, 2016, the International Exchange will debit October 2016
purposes. In addition, the debiting billing pursuant to the process
Securities Exchange, LLC (‘‘ISE’’ or process will prevent Member accounts
‘‘Exchange’’) filed with the Securities described in this rule change.10 The
from becoming overdue. The Exchange
and Exchange Commission notes that it has a billing dispute policy. designated NSCC account. Each month, the
(‘‘Commission’’) the proposed rule The Exchange proposes to adopt new Exchange will send a file to the Member’s clearing
change as described in Items I and II Rule 213 and require Members, and all firm which will indicate the amounts to be debited
below, which Items have been prepared applicants for registration as such to
from each Member. If a Member is ‘‘self-clearing,’’
by the Exchange. The Commission is no such file would be sent as the Member would
provide a clearing account number for receive the invoice, as noted above, which would
publishing this notice to solicit an account at NSCC for purposes of indicate the amount to be debited.
comments on the proposed rule change 7 By way of example, October invoices would be
permitting the Exchange to debit any
from interested persons. sent on November 7th.
undisputed or final fees, fines, charges 8 Exchange fees are noted on the Exchange Fee
I. Self-Regulatory Organization’s and/or other monetary sanctions or Schedule.
Statement of the Terms of Substance of monies due and owing to the Exchange 9 This includes, among other things, fines which

the Proposed Rule Change or other charges related to Rules 205, result from the imposition of fines pursuant to
Rules 1611, Judgment and Sanction; and 1614,
The Exchange proposes to adopt a 206, 207, 208, 209, and 210.5 Imposition of Fines for Minor Rules Violations.
new Rule 213 entitled, ‘‘Collection of The Exchange will send a monthly With respect to disciplinary sanctions that are
Exchange Fees and Other Claims’’ to invoice 6 to each Member on imposed by either the Business Conduct Committee
or a Hearing Panel, the Exchange would not debit
require Members to provide a clearing 3 The Exchange will not debit accounts for fees any monies until such action is final. The Exchange
account number at the National that are unusually large or for special
would not consider an action final until all appeal
Securities Clearing Corporation periods have run and/or all appeal timeframes are
circumstances, unless such debiting is requested by
exhausted. With respect to non-disciplinary actions,
sradovich on DSK3GMQ082PROD with NOTICES

(‘‘NSCC’’) for purposes of permitting the the Member. the Exchange would similarly not take action to
Exchange to debit any undisputed or 4 Today, some fees are collected through The
debit a Member account until all appeal periods
final fees, fines, charges and/or other Options Clearing Corporation, but not all fees. have run and/or all appeal timeframes are
5 See ISE Rules 205 (Access Fees), 206
monetary sanctions or monies due and exhausted. Any uncontested disciplinary or non-
(Transaction Fees), 207 (Communication Fees), 208 disciplinary actions will be debited, and the
owing to the Exchange. (Regulatory Fees or Charges), 209 (Transfer Fees) amount due will appear on the Member’s invoice
and 210 (Liability for Payment of Fees). prior to the actual NSCC debit.
1 15 U.S.C. 78s(b)(1). 6 The monthly invoice will indicate that the 10 The initial debit will include all outstanding
2 17 CFR 240.19b–4. amount on the invoice will be debited from the fees through October 1, 2016.

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Federal Register / Vol. 81, No. 194 / Thursday, October 6, 2016 / Notices 69561

Exchange will notify Members of this processes related to the collection of November 23, 2016 debit. Further, the
rule change to provide its Members monies owed to the Exchange. Exchange believes that this process will
ample time to provide the Exchange Collection matters divert staff resources alleviate administrative processes
with the information necessary for the away from the Exchange’s regulatory related to the collection of monies owed
direct debit and prepare for the change and business purposes. In addition, the to the Exchange. For these reasons, the
to the collection process. debiting process would prevent Member Commission believes that waiver of the
accounts from becoming overdue. 30-day operative delay is consistent
2. Statutory Basis with the protection of investors and the
The Exchange believes that its C. Self-Regulatory Organization’s
public interest. Therefore, the
proposal is consistent with Section 6(b) Statement on Comments on the
Commission designates the proposed
of the Act,11 in general, and furthers the Proposed Rule Change Received From
rule change to be operative upon
objectives of Section 6(b)(5) of the Act,12 Members, Participants, or Others
filing.18
in particular, in that it is designed to No written comments were either At any time within 60 days of the
promote just and equitable principles of solicited or received. filing of the proposed rule change, the
trade, to foster cooperation and III. Date of Effectiveness of the Commission summarily may
coordination with persons engaged in Proposed Rule Change and Timing for temporarily suspend such rule change if
facilitating transactions in securities, to Commission Action it appears to the Commission that such
remove impediments to and perfect the action is necessary or appropriate in the
mechanism of a free and open market Because the foregoing proposed rule public interest, for the protection of
and a national market system, and, in change does not: (i) Significantly affect investors, or otherwise in furtherance of
general to protect investors and the the protection of investors or the public the purposes of the Act. If the
public interest by providing Members interest; (ii) impose any significant Commission takes such action, the
with an efficient process to pay burden on competition; and (iii) become Commission shall institute proceedings
undisputed or final fees, fines, charges operative for 30 days from the date on to determine whether the proposed rule
and/or monetary sanctions or monies which it was filed, or such shorter time should be approved or disapproved.
dues and owing to the Exchange. as the Commission may designate, it has
become effective pursuant to Section IV. Solicitation of Comments
The Exchange believes that its
proposal to debit NSCC accounts is 19(b)(3)(A)(iii) of the Act 14 and Interested persons are invited to
reasonable because it would ease the subparagraph (f)(6) of Rule 19b–4 submit written data, views, and
Member’s administrative burden in thereunder.15 arguments concerning the foregoing,
A proposed rule change filed under including whether the proposed rule
paying monthly invoices, avoid overdue
Rule 19b–4(f)(6) normally does not change is consistent with the Act.
balances and provide same day
become operative prior to 30 days after Comments may be submitted by any of
collection from all Members who owe
the date of filing. However, Rule 19b– the following methods:
monies to the Exchange. The Exchange
4(f)(6)(iii) 16 permits the Commission to
has a billing dispute. [sic] The Member Electronic Comments
designate a shorter time if such action
may dispute the invoice prior to the
is consistent with the protection of • Use the Commission’s Internet
debit. This policy also lowers the
investors and the public interest. In its comment form (http://www.sec.gov/
Exchange’s administrative costs because
filing with the Commission, the rules/sro.shtml); or
staff resources would not be diverted to Exchange requests that the Commission • Send an email to rule-comments@
review of untimely requests regarding waive the 30-day operative delay. The sec.gov. Please include File Number SR–
billing. Exchange proposes that the proposed ISE–2016–24 on the subject line.
The Exchange believes that its
rule change become operative on Paper Comments
proposal to debit NSCC accounts is
October 1, 2016. On November 23, 2016,
equitable and not unfairly • Send paper comments in triplicate
the Exchange would debit October 2016
discriminatory because it will apply to to Secretary, Securities and Exchange
billing pursuant to the process set forth
all Members in a uniform manner. in the proposed rule change. The Commission, 100 F Street NE.,
Today, the debit process is applied at all Exchange represents that waiver of the Washington, DC 20549–1090.
Nasdaq exchanges.13 30-day operative delay would allow it to All submissions should refer to File
B. Self-Regulatory Organization’s conform its billing processes similar to Number SR–ISE–2016–24. This file
Statement on Burden on Competition the process in place at the various number should be included on the
Nasdaq exchanges.17 The Exchange subject line if email is used. To help the
The Exchange does not believe that
notes that all ISE Members have an Commission process and review your
the proposed rule change will impose
NSCC account or have a clearing firm comments more efficiently, please use
any burden on competition that is not
with an NSCC account. Direct debit is only one method. The Commission will
necessary or appropriate in furtherance
an options industry standard. According post all comments on the Commission’s
of the purposes of the Act. With this
to the Exchange, all members should be Internet Web site (http://www.sec.gov/
proposal, the proposed debit process
able to provide ISE with an NSCC rules/sro.shtml). Copies of the
would apply uniformly to all Members.
Further, this proposal would provide account prior to the date of the submission, all subsequent
a cost savings to the Exchange in that it amendments, all written statements
would alleviate administrative
14 15 U.S.C. 78s(b)(3)(A)(iii). with respect to the proposed rule
15 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– change that are filed with the
sradovich on DSK3GMQ082PROD with NOTICES

4(f)(6) requires a self-regulatory organization to give
11 15 U.S.C. 78f(b). the Commission written notice of its intent to file
Commission, and all written
12 15 U.S.C. 78f(b)(5). the proposed rule change at least five business days communications relating to the
13 See NASDAQ Phlx LLC Rule 909, The prior to the date of filing of the proposed rule
NASDAQ Stock Market LLC Rule 7007, NASDAQ change, or such shorter time as designated by the 18 For purposes only of waiving the 30-day

Options Market LLC Rules at Chapter XV, Section Commission. The Exchange has satisfied this operative delay, the Commission also has
1, NASDAQ BX, Inc. Rule 7011 and BX Option requirement. considered the proposed rule’s impact on
16 17 CFR 240.19b–4(f)(6)(iii).
Rules at Chapter XV, Section 1 (collectively efficiency, competition, and capital formation. See
‘‘Nasdaq exchanges.’’) 17 See supra note 13. 15 U.S.C. 78c(f).

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69562 Federal Register / Vol. 81, No. 194 / Thursday, October 6, 2016 / Notices

proposed rule change between the Commission pursuant to Rule 608 of A. Amendments to System Functionality
Commission and any person, other than Regulation NMS 4 under the Act; (2) To Implement the Plan
those that may be withheld from the clarify the operation of certain 1. Trade-at Intermarket Sweep Orders
public in accordance with the exceptions to the Trade-at Prohibition 5 (‘‘TA ISO’’) 10
provisions of 5 U.S.C. 552, will be on Pilot Securities in Test Group Three;
available for Web site viewing and (3) amend the Limit Up/Limit Down The Exchange proposes to accept TA
printing in the Commission’s Public (‘‘LULD’’) price controls pursuant to the ISOs in all securities. Further, TA ISOs
Reference Room, 100 F Street NE., Regulation NMS Plan to Address must be designated as Immediate or
Washington, DC 20549, on official Cancel (‘‘IOC’’), may be designated with
Extraordinary Market Volatility (‘‘LULD
business days between the hours of a ‘‘no midpoint execution’’ modifier,
Plan’’); 6 and (4) amend the Exchange’s
10:00 a.m. and 3:00 p.m. Copies of the may not be designated with a minimum
limit order price protection rule. The trade size, and do not route. TA ISO
filing also will be available for
inspection and copying at the principal proposed rule change was published for would be immediately traded with
office of the Exchange. All comments comment in the Federal Register on contra-side displayed and non-
received will be posted without change; September 15, 2016.7 The Commission displayed interest in the NYSE Arca
the Commission does not edit personal received two comment letters in Book up to its full size and limit price
identifying information from response to the Notice.8 On September and the quantity not so traded will be
submissions. You should submit only 27, 2016, the Exchange filed a partial immediately and automatically
information that you wish to make amendment to the proposed rule change cancelled.
available publicly. All submissions (‘‘Amendment No. 1’’).9
2. Permitted Price Increment for Pilot
should refer to File Number SR–ISE– This order provides notice of filing of
2016–24 and should be submitted on or Securities 11
Amendment No. 1 and approves the
before October 27, 2016. proposal, as modified by Amendment The Exchange proposes that
For the Commission, by the Division of references in Exchange rules to the
No. 1, on an accelerated basis.
Trading and Markets, pursuant to delegated minimum price variation (‘‘MPV’’) 12
authority.19 II. Description of the Amended would mean $0.05 instead of the current
Robert W. Errett, Proposal $0.01 for Pilot Securities in Test Groups
Deputy Secretary. One, Two, and Three. Further,
The Exchange proposes to: (1) Change references to truncating to the MPV in
[FR Doc. 2016–24147 Filed 10–5–16; 8:45 am]
system functionality to implement the Exchange rules would mean rounding
BILLING CODE 8011–01–P
Plan; (2) clarify the operation of certain down to the applicable quoting MPV for
exceptions to the Trade-at Prohibition Pilot Securities in Test Groups One,
SECURITIES AND EXCHANGE on Pilot Securities in Test Group Three; Two, and Three. Mid-Point Liquidity
COMMISSION (3) amend the LULD price controls Orders 13 must be entered with a limit
pursuant to the LULD Plan; and (4) price in a $0.05 pricing increment.
[Release No. 34–79017; File No. SR– amend the Exchange’s limit order price
NYSEARCA–2016–123] 3. Rejection of Market Pegged Orders in
protection rule. Pilot Securities 14
Self-Regulatory Organizations; NYSE
4 17 CFR 242.608.
The Exchange proposes that Market
Arca, Inc.; Notice of Filing of Partial
5 Exchange Rule 7.46(e)(4)(A) defines the ‘‘Trade- Pegged Orders 15 will be rejected for all
Amendment No. 1 and Order Granting
at Prohibition’’ to mean the prohibition against Pilot Securities.
Accelerated Approval of a Proposed
executions by a Trading Center of a sell order for
Rule Change, as Modified by Partial a Pilot Security at the price of a Protected Bid or
4. Retail Price Improvement Orders
Amendment No. 1, Amending Rule 7.46 the execution of a buy order for a Pilot Security at Increment 16
Relating to the Exchange’s Order the price of a Protected Offer during regular trading The Exchange proposes that for Test
Types To Implement the Tick Size Pilot hours. See also Plan Section I(LL) and Plan Section
Group Two and Test Group Three,
Program VI(D).
6 See Securities Exchange Act Release No. 67091 Retail Price Improvement Orders 17
September 30, 2016. (May 31, 2012), 77 FR 33498 (June 6, 2012) (File
10 See proposed Exchange Rule 7.46(f)(1).
No. 4–631).
I. Introduction 7 Securities Exchange Act Release No. 78801 11 See proposed Exchange Rule 7.46(f)(2).
12 See Exchange Rule 7.6 for a definition of the
On August 25, 2016, NYSE Arca, Inc. (September 9, 2016), 81 FR 63525 (‘‘Notice’’).
MPV.
(‘‘Exchange’’ or ‘‘NYSE Arca’’) filed 8 See Letters from Eric Swanson, EVP, General
13 A Mid-Point Liquidity Order is a Limit Order
with the Securities and Exchange Counsel, Bats Global Markets, Inc., Elizabeth K.
King, General Counsel and Corporate Secretary, that is not displayed, does not route, and has with
Commission (‘‘Commission’’) pursuant New York Stock Exchange; and Thomas A.
a working price at the midpoint of the PBBO. See
to Section 19(b)(1) of the Securities Exchange Rule 7.31P(d)(3).
Wittman, EVP, Global Head of Equities, Nasdaq, 14 See proposed Exchange Rule 7.46(f)(3). See also
Exchange Act of 1934 (‘‘Act’’) 1 and Rule Inc., dated September 9, 2016 (‘‘Comment Letter
Amendment No. 1.
19b–4 thereunder,2 a proposed rule No. 1’’); and Eric Swanson, EVP, General Counsel, 15 A Market Pegged Order is an order to buy (sell)
change to: (1) Change system Bats Global Markets, Inc., dated September 12, 2016
with a working price that is pegged to the PBO
functionality to implement the Plan to (‘‘Comment Letter No. 2’’).
(PBB). See Exchange Rule 7.31P(h). A Market
9 In Amendment No. 1, the Exchange proposes to
Implement a Tick Size Pilot Program Pegged Order to buy (sell) will be rejected on
do the following: (1) Delete the proposal to amend arrival, or cancelled when resting, if there is no
(‘‘Plan’’ or ‘‘Pilot’’) 3 submitted to the Rule 7.35P because the Exchange recently filed a PBO (PBB) against which to peg. Market Pegged
sradovich on DSK3GMQ082PROD with NOTICES

separate proposed rule change to make the same Orders will not participate in any auctions. Market
19 17 CFR 200.30–3(a)(12). amendment, which is now operative. See Securities Pegged Orders are not displayed and are ranked
1 15 U.S.C. 78s(b)(1). Exchange Act Release No. 78861 (September 16, ‘‘Priority 3—Non-Display Orders.’’ A Market Pegged
2 17 CFR 240.19b–4. 2016) (SR–NYSEArca–2016–129) (‘‘Rule 7.35P Order to buy (sell) may include an offset value that
3 See Securities Exchange Act Release No. 74892 Filing’’); (2) modify Rule 7.46(f)(3) to provide that will set the working price below (above) the PBO
(May 6, 2015), 80 FR 27513 (May 13, 2015) Market Pegged Orders in all Pilot Securities would (PBB) by a specified offset.
be rejected and delete references to Market Pegged 16 See proposed Exchange Rule 7.46(f)(4).
(‘‘Approval Order’’). Unless otherwise specified,
capitalized terms used in this rule filing are defined Orders in Rule 7.46(f)(5)(H); and (3) correct 17 A Retail Price Improvement Order consists of

as set forth in the Plan. typographical errors in the original proposal. non-displayed interest in NYSE Arca-listed

VerDate Sep<11>2014 18:46 Oct 05, 2016 Jkt 241001 PO 00000 Frm 00054 Fmt 4703 Sfmt 4703 E:\FR\FM\06OCN1.SGM 06OCN1
Document Created: 2016-10-06 02:38:02
Document Modified: 2016-10-06 02:38:02
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 69560