82 FR 12381 - Self-Regulatory Organizations; ISE Gemini, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Related to All-or-None Orders

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 40 (March 2, 2017)

[Federal Register Volume 82, Number 40 (Thursday, March 2, 2017)]
[Notices]
[Pages 12381-12383]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-04031]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80102; File No. SR-ISEGemini-2017-08]


Self-Regulatory Organizations; ISE Gemini, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Related to All-or-
None Orders

February 24, 2017.
    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 February 24, 2017, ISE Gemini, LLC (``ISE Gemini'' 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 provide that All-Or-None Orders may only 
be entered into the trading system with a time-in-force designation of 
Immediate-Or-Cancel.
    The Exchange requests that the Commission waive the 30-day 
operative delay period contained in Exchange Act Rule 19b-
4(f)(6)(iii).\3\
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    \3\ 17 CFR 240.19b-4(f)(6)(iii).
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    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

[[Page 12382]]

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 Exchange proposes to amend Rule 715(c) to provide that an All-
Or-None Order may only be entered into the trading system with a time-
in-force designation of Immediate-Or-Cancel order in connection with 
the Exchange's technology migration to INET.
    An All-Or-None Order is a limit or market order that is to be 
executed in its entirety or not at all. Today, an All-Or-None Order may 
be designated as a market or limit order with any time-in-force 
designation. The Exchange proposes to limit All-Or-None Orders to only 
be accepted with a time-in-force designation of Immediate-Or-Cancel. An 
Immediate-Or-Cancel Order is a limit order that is to be executed in 
whole or in part upon receipt. Any portion not so executed is to be 
treated as cancelled.
    The Exchange also proposes to amend Supplementary Material .02 to 
Rule 713 to make clear that All-Or-None Orders will only be accepted 
with a time-in-force designation of Immediate-Or-Cancel and, therefore, 
would not persist in the Order Book. The Exchange also proposes to 
amend Supplementary Material .03 to Rule 717 to reserve this section as 
All-Or-None Orders would not be subject to exposure because they would 
be cancelled if not executed in their entirety.\4\
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    \4\ The Exchange notes that Rule 716(e), Solicited Order 
Mechanism, is not being amended because only All-Or-None Orders are 
accepted into this mechanism. The proposed rule change does not 
impact the manner in which the Solicited Order Mechanism operates.
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Implementation
    The Exchange will begin a system migration to Nasdaq INET in Q1 of 
2017.\5\ The migration will be on a symbol by symbol basis as specified 
by the Exchange in a notice to Members. The Exchange is proposing to 
implement this rule change on the INET platform as the symbols migrate 
to that platform. Members could continue to submit orders with any 
time-in-force designation until the symbol migrates to the INET 
platform. Once the symbol migrates to INET an All-Or-None Order could 
only be submitted with a time-in-force designation of Immediate-Or-
Cancel.
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    \5\ See Securities Exchange Act Release No. 80011 (February 10, 
2017), 82 FR 10927 (SR-ISEGemini-2016-17) (Order Approving Proposed 
Rule Change, as Modified by Amendment Nos. 1 and 2, To Amend Various 
Rules in Connection With a System Migration to Nasdaq INET 
Technology).
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\6\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\7\ in particular, in that it is 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 by 
mitigating risks to market participants. The Exchange believes that the 
proposal is appropriate and reasonable, because the time-in-force 
designation of Immediate-Or-Cancel will offer Members certainty with 
respect to their order handling. With this proposal, an All-Or-None 
Order will either execute immediately or be cancelled back to the 
Member. All-Or-None Orders are contingency orders that have no priority 
on the Order Book. These orders would receive an execution after all 
other trading interest at the same price has been exhausted. This 
proposal would remove uncertainty with respect to the manner in which 
these orders would be handled in the Order Book by cancelling back an 
All-Or-None Order if it cannot be immediately executed in its entirety. 
Today, the NASDAQ Options Market, LLC (``NOM'') only permits All-Or-
None Orders to be submitted with a time-in-force designation of 
Immediate-Or-Cancel.\8\
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
    \8\ See NOM Rules, Chapter VI, Section 1(g)(2).
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    The Exchange notes that Members are aware of the Exchange's efforts 
to replatform to the INET technology. Members have been involved in 
testing the system and providing feedback to the Exchange throughout 
this migration process. Members were provided notice of this proposed 
change to the trading system on February 23, 2017. The Exchange intends 
to make clear the implementation of this functionality within its 
Rulebook.

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 not necessary or appropriate in 
furtherance of the purposes of the Act. The Exchange does not believe 
that the proposed rule change will impact the intense competition that 
exists in the options market. No market participant would be able to 
submit an All-Or-None Order on the INET system without a time-in-force 
designation of Immediate-Or-Cancel. The Exchange believes the All-Or-
None Order type, as proposed, will continue to offer Members a 
competitive alternative on ISE Gemini for submitting orders for 
execution.

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 \9\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 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 has waived the five-day prefiling requirement in this 
case.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \11\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \12\ 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 
Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest. 
The Exchange represents that waiver of the operative delay would allow 
the Exchange to launch its transition to the INET technology on the 
schedule previously announced to Members. The Exchange states that it 
provided notice of the proposed rule change to Members on February 23, 
2017. The Exchange also represents that the Exchange has directly 
contacted the Members

[[Page 12383]]

responsible for over 99 percent of All-Or-None Orders on an average 
trading date on the Exchange and confirmed that the proposed rule 
change would have little impact on the Members' operations on the 
Exchange. The Exchange also represents that the primary impact of the 
proposal will not occur until later in the INET transition process. 
According to the Exchange, All-Or-None Orders are typically utilized 
for more liquid symbols, which will not begin to migrate to INET until 
the third week of the transition schedule and thereafter. Accordingly, 
the Commission hereby waives the operative delay and designates the 
proposal operative upon filing.\13\
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    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ 17 CFR 240.19b-4(f)(6)(iii).
    \13\ 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).
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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: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) 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-ISEGemin-2017-08 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-ISEGemini-2017-08. 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-ISEGemini-2017-08 and should 
be submitted on or before March 23, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2017-04031 Filed 3-1-17; 8:45 am]
 BILLING CODE 8011-01-P