81 FR 93718 - Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Remove Direct Debit for Market Data Products

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 245 (December 21, 2016)

[Federal Register Volume 81, Number 245 (Wednesday, December 21, 2016)]
[Notices]
[Pages 93718-93719]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-30686]



[[Page 93718]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79563; File No. SR-ISE-2016-28]


Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change To Remove Direct Debit for Market Data Products

December 15, 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 December 1, 2016, the International Securities Exchange, LLC 
(``ISE'' or ``Exchange'') filed with the Securities and Exchange 
Commission (``SEC'' or ``Commission'') the proposed rule change as 
described in Items I and II, below, which Items have been prepared by 
the Exchange. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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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 remove direct debit for market data 
products, as described in more detail below.
    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 remove direct debit 
for market data products. Today, the Exchange requires all of its 
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.\3\ 
Specifically, Rule 213 currently requires 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,\4\ fines, charges and/or other monetary 
sanctions or monies due and owing to the Exchange \5\ or other charges 
related to Rules 205, 206, 207, 208, 209, and 210.\6\ The proposed 
amendment would exclude from Rule 213 the fees set forth in Chapter 
VIII (Market Data) of the Exchange's Schedule of Fees \7\ to harmonize 
the direct debit process across all Nasdaq Exchanges.\8\
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    \3\ See Securities Exchange Act Release No. 79014 (September 30, 
2016), 81 FR 69560 (October 6, 2016) (SR-ISE-2016-24).
    \4\ Exchange fees are noted on the Exchange Schedule of Fees, 
available at: http://www.ise.com/fees.
    \5\ 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.
    \6\ 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).
    \7\ See note 4.
    \8\ The NASDAQ Stock Market LLC, The NASDAQ Options Market LLC, 
NASDAQ PHLX LLC, and NASDAQ BX, Inc. (the ``Nasdaq Exchanges'') do 
not direct debit any fees for market data products.
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    The Exchange proposes that this rule change become operative on 
December 1, 2016. On November 23, 2016, the Exchange applied direct 
debit to its members for October 2016 billing \9\ pursuant to the 
process currently in place. Under the proposed amendment and starting 
December 2016, the Exchange will bill the market data fees separately 
and will continue to direct debit its members for all of the other fees 
that are covered under Rule 213, in each case for the previous month's 
billing.
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    \9\ The debit for October 2016 billing included all outstanding 
fees, including the fees for market data, 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,\10\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\11\ 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 a 
harmonized process to pay undisputed or final fees, fines, charges and/
or monetary sanctions or monies due and owing to the Exchange.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that its proposal to remove the fees for 
market data products from the direct debit process is reasonable 
because it will not place any administrative burden on its members who 
are already subject to the same billing process on all other Nasdaq 
exchanges.\12\
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    \12\ 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.
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    The Exchange believes that its proposal to remove the market data 
fees as described above from the direct debit process is equitable and 
not unfairly discriminatory because it will apply to all members in a 
uniform manner.

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 
amended debit process would apply uniformly to all ISE members.

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

[[Page 93719]]

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 \13\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\14\
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    \13\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \14\ 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 Commission deems this requirement to have been met.
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative for 30 days after the date of filing. However, 
Rule 19b-4(f)(6)(iii) \15\ 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 new billing process become 
operative on December 1, 2016. Starting December 1, 2016, the Exchange 
will bill the market data fees separately and will continue to direct 
debit its members for all of the other fees that are covered under Rule 
213, in each case for the previous month's billing. The Exchange 
represents that waiver of the 30-day operative delay would allow it to 
conform its billing process similar to the process in place at the 
Nasdaq exchanges.\16\ The Commission believes that waiving the 30-day 
operative delay is consistent with the protection of investors and the 
public interest. Therefore, the Commission designates the proposed rule 
change operative upon filing.\17\
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    \15\ 17 CFR 240.19b-4(f)(6)(iii).
    \16\ 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.
    \17\ For purposes only of waiving the 30-day operative delay, 
the Commission 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-2016-28 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-2016-28. 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-2016-28 and should be 
submitted on or before January 11, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2016-30686 Filed 12-20-16; 8:45 am]
 BILLING CODE 8011-01-P