82 FR 13910 - 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 82, Issue 49 (March 15, 2017)
Federal Register Volume 82, Issue 49 (March 15, 2017)
| Page Range | 13910-13913 | |
| FR Document | 2017-05089 |
[Federal Register Volume 82, Number 49 (Wednesday, March 15, 2017)] [Notices] [Pages 13910-13913] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-05089] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-80188; File No. SR-ISE-2017-16] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Schedule of Fees March 9, 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, 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. --------------------------------------------------------------------------- \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 Exchange proposes to amend the Exchange's Schedule of Fees, as described in further 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 amend the Exchange's Schedule of Fees to make changes to (1) the Market Maker Plus \3\ program, (2) Priority Customer \4\ regular order taker fees in Select Symbols,\5\ (3) Priority Customer complex order rebates in Select Symbols and Non-Select Symbols,\6\ and (4) the threshold of net zero complex contracts. Each of these changes is described below. --------------------------------------------------------------------------- \3\ A ``Market Maker Plus'' is a Market Maker who is on the National Best Bid or National Best Offer a specified percentage of the time for series trading between $0.03 and $3.00 (for options whose underlying stock's previous trading day's last sale price was less than or equal to $100) and between $0.10 and $3.00 (for options whose underlying stock's previous trading day's last sale price was greater than $100) in premium in each of the front two expiration months. The specified percentage is at least 80% but lower than 85% of the time for Tier 1, at least 85% but lower than 95% of the time for Tier 2, and at least 95% of the time for Tier 3. A Market Maker's single best and single worst quoting days each month based on the front two expiration months, on a per symbol basis, will be excluded in calculating whether a Market Maker qualifies for this rebate, if doing so will qualify a Market Maker for the rebate. \4\ 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 ISE Rule 100(a)(37A). \5\ ``Select Symbols'' are options overlying all symbols listed on the ISE that are in the Penny Pilot Program. \6\ ``Non-Select Symbols'' are options overlying all symbols, excluding Select Symbols. --------------------------------------------------------------------------- Market Maker Plus In order to promote and encourage liquidity in Select Symbols, the Exchange offers Market Makers \7\ that meet the quoting requirements for Market Maker Plus enhanced rebates for adding liquidity in those symbols. These Market Maker Plus rebates are provided on a per symbol basis in three tiers based on the time the Market Maker is quoting at the national best bid or offer (``NBBO'').\8\ Currently, the rebate is $0.10 per contract for Tier 1, $0.18 per contract for Tier 2, and $0.22 per contract for Tier 3.\9\ The Exchange now proposes to increase the rebate for Tier 1 to $0.15 per contract. The rebates for Tier 2 and Tier 3, including the special rebates for Market Makers that achieve Market Maker Plus in SPY or QQQ, will remain at the same amounts as described herein. --------------------------------------------------------------------------- \7\ The term ``Market Makers'' refers to ``Competitive Market Makers'' and ``Primary Market Makers'' collectively. See ISE Rule 100(a)(25). \8\ For all Market Maker Plus tiers, a $0.30 per contract fee applies when trading against Priority Customer complex orders that leg into the regular order book. No fee is charged or rebate provided when trading against non[hyphen]Priority Customer complex orders that leg into the regular order book). \9\ In addition, the Exchange also offers lower rebates for Market Makers that achieve Market Maker Plus in SPY or QQQ. Specifically, Market Makers that achieve Tier 2 or Tier 3 of Market Maker Plus in either SPY or QQQ will receive the SPY or QQQ rebate based on the highest Market Maker tier achieved in either product. For example, a Market Maker that achieves Tier 1 Market Maker Plus in QQQ but Tier 3 Market Maker Plus in SPY will receive a Tier 3 rebate in both SPY and QQQ. Instead of the Tier 2 and Tier 3 rebates described above, however, Market Maker Plus orders in SPY or QQQ are entitled to a rebate of $0.16 per contract for Tier 2, and $0.20 per contract for Tier 3. --------------------------------------------------------------------------- Priority Customer Taker Fees The Exchange charges a taker fee for regular orders in Select Symbols. This fee is $0.44 per contract for Market Maker orders, and $0.45 per contract for Non-ISE Market Maker,\10\ Firm Proprietary \11\/ Broker-Dealer,\12\ and Professional Customer \13\ orders. For Priority Customer orders this fee is $0.31 per contract, or $0.26 per contract for members with a total affiliated Priority Customer average daily volume (``ADV'') that equals or exceeds 200,000 contracts.\14\ The Exchange now [[Page 13911]] proposes to increase the taker fee for Priority Customer orders in Select Symbols to $0.40 per contract for all such orders regardless of volume. As such, the Exchange also proposes to delete the volume-based incentive for Priority Customer orders in Select Symbols, specifically the taker fee of $0.26 per contract for members that achieve the higher Priority Customer ADV tier. --------------------------------------------------------------------------- \10\ A ``Non[hyphen]ISE Market Maker'' is a market maker as defined in Section 3(a)(38) of the Securities Exchange Act of 1934, as amended, registered in the same options class on another options exchange. \11\ A ``Firm Proprietary'' order is an order submitted by a member for its own proprietary account. \12\ A ``Broker[hyphen]Dealer'' order is an order submitted by a member for a broker[hyphen]dealer account that is not its own proprietary account. \13\ A ``Professional Customer'' is a person or entity that is not a broker/dealer and is not a Priority Customer. \14\ Priority Customer ADV includes all volume in all symbols and order types. All eligible volume from affiliated members will be aggregated in determining total affiliated Priority Customer ADV, provided there is at least 75% common ownership between the members as reflected on each member's Form BD, Schedule A. For purposes of determining Priority Customer ADV, any day that the regular order book is not open for the entire trading day or the Exchange instructs members in writing to route their orders to other markets may be excluded from such calculation; provided that the Exchange will only remove the day for members that would have a lower ADV with the day included. --------------------------------------------------------------------------- Priority Customer Complex Order Rebates Currently, the Exchange provides rebates to Priority Customer complex orders that trade with non-Priority Customer complex orders in the complex order book or trade with quotes and orders on the regular order book. Rebates are tiered based on a member's ADV executed during a given month as follows: 0 to 29,999 contracts (``Tier 1''), 30,000 to 59,999 contracts (``Tier 2''), 60,000 to 99,999 contracts (``Tier 3''), 100,000 to 149,999 (``Tier 4''), 150,000 to 199,999 contracts (``Tier 5''), and 200,000 or more contracts (``Tier 6''). In Select Symbols the rebate is $0.30 per contract for Tier 1, $0.35 per contract for Tier 2, $0.41 per contract for Tier 3, $0.44 per contract for Tier 4, $0.46 per contract for Tier 5, and $0.47 per contract for Tier 6. In Non-Select Symbols the rebate is $0.63 per contract for Tier 1, $0.71 per contract for Tier 2, $0.79 per contract for Tier 3, $0.81 per contract for Tier 4, $0.83 per contract for Tier 5, and $0.84 per contract for Tier 6.\15\ --------------------------------------------------------------------------- \15\ For both Select Symbols and Non-Select Symbols, these rebates are provided per contract per leg if the order trades with non-Priority Customer orders in the complex order book, or trades with quotes and orders on the regular order book. --------------------------------------------------------------------------- The Exchange now proposes to (i) introduce two additional volume- based tiers of Priority Customer complex order rebates and (ii) in the existing tiers, amend the volume requirements necessary for achieving higher Priority Customer complex order rebates. As proposed, the ADV thresholds will be as follows: 0 to 14,999 contracts (``Tier 1''), 15,000 to 44,999 contracts (``Tier 2''), 45,000 to 59,999 contracts (``Tier 3''), 60,000 to 74,999 contracts (``Tier 4''), 75,000 to 99,999 contracts (``Tier 5''), 100,000 to 124,999 contracts (``Tier 6''), 125,000 to 224,999 contracts (``Tier 7''), and 225,000 or more contracts (``Tier 8''). Under the proposal, the rebate amounts provided for Priority Customer complex orders in both Select Symbols and Non-Select Symbols will be amended to reflect the tier changes described above. In Select Symbols, the proposed rebate will be $0.26 per contract for Tier 1, $0.30 per contract for Tier 2, $0.36 per contract for Tier 3, $0.41 per contract for Tier 4, $0.42 per contract for Tier 5, $0.44 per contract for Tier 6, $0.46 per contract for Tier 7, and $0.49 per contract for Tier 8. In Non-Select Symbols, the proposed rebate will be $0.40 per contract for Tier 1, $0.60 per contract for Tier 2, $0.70 per contract for Tier 3, $0.75 per contract for Tier 4, $0.75 per contract for Tier 5, $0.80 per contract for Tier 6, $0.81 per contract for Tier 7, and $0.85 per contract for Tier 8. Other rebate amounts--specifically, the Price Improvement Mechanism (``PIM'') Break-up Rebates for both Select and Non-Select Symbols and the Facilitation and Solicitation Break-up Rebate for Select Symbols--will remain unchanged from their current levels, including the rebate amounts for the two proposed additional tiers. Net Zero Complex Orders Today, the Exchange does not provide rebates for Priority Customer complex orders that trade at a net price at or near $0.00 (i.e., net zero complex orders) that are entered on behalf of originating market participants that execute an ADV of at least 10,000 net zero complex orders in a given month. For purposes of determining which complex orders qualify as ``net zero,'' the Exchange counts all complex orders that leg in to the regular order book and are executed at a net price that is within a range of $0.01 credit and $0.01 debit.\16\ While these complex orders would generally not find a counterparty in the complex order book, they may leg in to the regular market where they are executed by Market Makers or other market participants on the individual legs who pay a fee to trade with this order flow. The fee Market Makers pay when a complex order legs into their quote is substantially higher than their fee or rebate for non-complex orders that trade against their quotes. The 10,000 contract threshold exists to differentiate market participants that are entering legitimate complex orders from those that are entering net zero complex orders solely to earn a rebate. --------------------------------------------------------------------------- \16\ For example, a market participant could enter a net zero complex order that buys 500 contracts of the $193 March 6, 2016 SPY Put at a price of $0.03 and sells 500 contracts of the $193.50 March 6, 2016 SPY Put at a price of $0.03 for a net price of $0.00. --------------------------------------------------------------------------- The Exchange now proposes to lower the threshold of net zero complex contracts from 10,000 to 2,000 contracts. As such, net zero priced complex orders that leg into the regular order book and are entered by firms with an ADV in this type of activity of 2,000 contracts or more in a given month will not earn the Priority Customer complex order rebate. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,\17\ in general, and furthers the objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\18\ in particular, in that it provides for the equitable allocation of reasonable dues, fees, and other charges among members and issuers and other persons using any facility, and is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. --------------------------------------------------------------------------- \17\ 15 U.S.C. 78f(b). \18\ 15 U.S.C. 78f(b)(4) and (5). --------------------------------------------------------------------------- Market Maker Plus Program The Exchange believes that it is reasonable and equitable to increase the Tier 1 Market Maker Plus rebate because it will encourage Market Makers to post tighter markets in Select Symbols and thereby maintain liquidity and attract additional order flow to the ISE, which will ultimately benefit all market participants that trade on the Exchange. The Tier 1 Market Maker Plus rebate has proven to be an effective incentive for Market Makers to provide liquidity in Select Symbols. The Exchange believes that the proposed Tier 1 Market Maker Plus rebate is reasonable and equitably allocated to those members that direct orders to the Exchange rather than to a competing exchange. The Exchange also believes that the proposed Tier 1 Market Maker Plus rebate is not unfairly discriminatory because all Market Makers can achieve the higher rebate by satisfying the applicable Market Maker Plus requirements. Priority Customer Taker Fees The Exchange believes that the proposed changes to increase the Priority Customer taker fee and eliminate the Priority Customer taker fee discount program for members with a total affiliated Priority Customer ADV of more than 200,000 contracts are reasonable and equitable because the proposed fees remain lower than the fees charged to other market participants that remove liquidity on the Exchange. In addition, the Exchange believes that it is equitable and not unfairly discriminatory to continue to provide lower fees for Priority Customer orders. A Priority Customer is by definition not a broker or dealer in securities, and does not place more than [[Page 13912]] 390 orders in listed options per day on average during a calendar month for its own beneficial account(s). This limitation does not apply to participants whose behavior is substantially similar to that of market professionals, including Professional Customers, who will generally submit a higher number of orders than Priority Customers. Priority Customer Complex Order Rebates The Exchange believes that it is reasonable and equitable to make the proposed changes, both to the volume requirements necessary to achieve the Priority Customer complex order rebates and to the rebate amounts, as the proposals are designed to attract additional Priority Customer complex order volume to the Exchange. Although the Exchange is lowering the rebates for Priority Customer complex orders, it is also generally lowering the associated volume thresholds to make it easier for members to achieve the higher tiers. While the proposed rebate amounts are lower in some categories, the Exchange believes that the proposed changes are reasonable and equitable when looking at the overall program for both Non-Select Symbol and Select Symbol rebates. For example, a member who received a $0.71 Non-Select Symbol rebate for executing an ADV of 45,000 Non-Select Symbol contracts in a given month under the existing program would receive a $0.70 Non-Select Symbol rebate under the proposed program. However, a member who would have received a $0.35 Select Symbol rebate under the existing program for executing the same ADV for Select Symbol contracts in a given month would receive a $0.36 Select Symbol rebate under the proposed program. Therefore, the Exchange believes that the overall amendments to its rebate program for Priority Customer complex orders is reasonable and equitable as proposed. In addition, the Exchange believes that introducing an additional volume-based tier with higher rebate amounts will incentivize members to send additional order flow to the Exchange in order to achieve these rebates for their Priority Customer complex order volume, creating additional liquidity to the benefit of all members that trade complex orders on the Exchange. The Exchange further believes that it is equitable and not unfairly discriminatory to continue to provide a rebate only for Priority Customer complex orders. A Priority Customer is by definition not a broker or 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). This limitation does not apply to participants whose behavior is substantially similar to that of market professionals, including Professional Customers, who will generally submit a higher number of orders (many of which do not result in executions) than Priority Customers. Net Zero Complex Orders The Exchange believes that the proposed change to lower the threshold of net zero complex contracts is reasonable, equitable, and not unfairly discriminatory as it is designed to remove financial incentives for market participants to engage in rebate arbitrage by entering valueless complex orders on the Exchange that do not have any economic purpose. The Exchange has determined that the current threshold is still too high to effectively discourage market participants from engaging in rebate arbitrage, and believes that the lower threshold proposed in this filing more accurately reflects the Exchange's original intent. No market participants meet the current ADV threshold, as firms have modified their activity to ensure that their complex ADV in the net zero range is lower than the 10,000 ADV threshold set in the original net zero filing. In January 2017, for example, the market participant with the largest ADV in net zero contracts executed an ADV of 1,250 net zero contracts. By comparison the average net zero ADV of market participants that traded complex orders in January 2017 was only 12 contracts, with the vast majority of these market participants executing no net zero contracts. The continued submission of a high volume of net zero complex orders that leg into the regular order book by these firms has generated complaints from the Market Makers that trade against these orders in the regular order book, as firms recognize these net zero complex orders as essentially non-economic. The Exchange believes that lowering the threshold will make it more difficult for firms to continue to enter net zero complex orders purely to earn a rebate. In particular, the Exchange notes that any firm that engages in this activity will be prevented from doing so with an ADV of more than 2,000 net zero complex orders. This will reduce the cost of these trades to the Exchange and its members as firms are limited in the amount of this net zero complex order activity that they can conduct on the Exchange. While the proposed threshold is still higher than current activity seen in January 2017, the Exchange believes that it is important to lower the ADV threshold to ensure that market participants do not further increase this activity. The Exchange believes that market participants will stop entering net zero complex orders when they reach the proposed ADV threshold as these firms are entering these orders solely for the purpose of earning a rebate. Indeed, this is consistent with the Exchange's experience with this rule to date, as firms that were previously entering a high volume of net zero complex orders have reduced their volume in activity covered by this rule. To the extent that market participants enter legitimate complex orders, however, they will continue to receive the same rebates that they do today. In addition, market participants that enter an insubstantial volume of net zero complex orders will also continue to receive rebates. The Exchange believes that it is reasonable, equitable, and not unfairly discriminatory to continue to provide rebates where appropriate based on the market participant executing only a low ADV of net zero complex orders. While the Exchange could prohibit rebates for any net zero complex orders without an ADV threshold, doing so would disadvantage innocent market participants that are not engaged in rebate arbitrage. The Exchange believes that the decision to allow rebates for firms with a limited ADV in net zero complex orders properly balances the need to encourage market participants to send order flow to the Exchange, and the need to prevent activity that is harmful to the market. Moreover, all market participants will be treated the same based on their net zero ADV. B. Self-Regulatory Organization's Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,\19\ 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 Exchange believes that the proposed fees and rebates remain competitive with those on other options markets, and will continue to attract order flow to the Exchange. The Exchange operates in a highly competitive market in which market participants can readily direct their order flow to competing venues. In such an environment, the Exchange must continually review, and consider adjusting, its fees and rebates to remain competitive with other exchanges. For the reasons described above, the Exchange believes that the proposed fee [[Page 13913]] changes reflect this competitive environment. --------------------------------------------------------------------------- \19\ 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 No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act,\20\ and Rule 19b-4(f)(2) \21\ thereunder. 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. --------------------------------------------------------------------------- \20\ 15 U.S.C. 78s(b)(3)(A)(ii). \21\ 17 CFR 240.19b-4(f)(2). --------------------------------------------------------------------------- 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-2017-16 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-2017-16. 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-2017-16 and should be submitted on or before April 5, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\22\ --------------------------------------------------------------------------- \22\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-05089 Filed 3-14-17; 8:45 am] BILLING CODE 8011-01-P
![13910 Federal Register / Vol. 82, No. 49 / Wednesday, March 15, 2017 / Notices
10:00 a.m. and 3:00 p.m. Copies of the II. Self-Regulatory Organization’s adding liquidity in those symbols.
filing also will be available for Statement of the Purpose of, and These Market Maker Plus rebates are
inspection and copying at the principal Statutory Basis for, the Proposed Rule provided on a per symbol basis in three
office of the Exchange. All comments Change tiers based on the time the Market
received will be posted without change; In its filing with the Commission, the Maker is quoting at the national best bid
the Commission does not edit personal Exchange included statements or offer (‘‘NBBO’’).8 Currently, the
identifying information from concerning the purpose of and basis for rebate is $0.10 per contract for Tier 1,
submissions. You should submit only the proposed rule change and discussed $0.18 per contract for Tier 2, and $0.22
information that you wish to make any comments it received on the per contract for Tier 3.9 The Exchange
available publicly. All submissions proposed rule change. The text of these now proposes to increase the rebate for
should refer to File Number SR–ISE– statements may be examined at the Tier 1 to $0.15 per contract. The rebates
2017–20 and should be submitted on or places specified in Item IV below. The for Tier 2 and Tier 3, including the
before April 5, 2017. Exchange has prepared summaries, set special rebates for Market Makers that
forth in sections A, B, and C below, of achieve Market Maker Plus in SPY or
For the Commission, by the Division of
Trading and Markets, pursuant to delegated the most significant aspects of such QQQ, will remain at the same amounts
authority.11 statements. as described herein.
Eduardo A. Aleman, A. Self-Regulatory Organization’s Priority Customer Taker Fees
Assistant Secretary. Statement of the Purpose of, and The Exchange charges a taker fee for
[FR Doc. 2017–05083 Filed 3–14–17; 8:45 am] Statutory Basis for, the Proposed Rule regular orders in Select Symbols. This
BILLING CODE 8011–01–P Change fee is $0.44 per contract for Market
Maker orders, and $0.45 per contract for
1. Purpose
Non-ISE Market Maker,10 Firm
SECURITIES AND EXCHANGE The purpose of the proposed rule Proprietary 11/Broker-Dealer,12 and
COMMISSION change is to amend the Exchange’s Professional Customer 13 orders. For
Schedule of Fees to make changes to (1) Priority Customer orders this fee is
[Release No. 34–80188; File No. SR–ISE–
the Market Maker Plus 3 program, (2) $0.31 per contract, or $0.26 per contract
2017–16] Priority Customer 4 regular order taker for members with a total affiliated
fees in Select Symbols,5 (3) Priority Priority Customer average daily volume
Self-Regulatory Organizations; Customer complex order rebates in (‘‘ADV’’) that equals or exceeds 200,000
International Securities Exchange, Select Symbols and Non-Select contracts.14 The Exchange now
LLC; Notice of Filing and Immediate Symbols,6 and (4) the threshold of net
Effectiveness of Proposed Rule zero complex contracts. Each of these 8 For all Market Maker Plus tiers, a $0.30 per
changes is described below. contract fee applies when trading against Priority
Change To Amend the Schedule of Customer complex orders that leg into the regular
Fees Market Maker Plus order book. No fee is charged or rebate provided
when trading against non-Priority Customer
March 9, 2017. In order to promote and encourage complex orders that leg into the regular order book).
liquidity in Select Symbols, the 9 In addition, the Exchange also offers lower
Pursuant to Section 19(b)(1) of the
Exchange offers Market Makers 7 that rebates for Market Makers that achieve Market
Securities Exchange Act of 1934 Maker Plus in SPY or QQQ. Specifically, Market
meet the quoting requirements for
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 Makers that achieve Tier 2 or Tier 3 of Market
Market Maker Plus enhanced rebates for Maker Plus in either SPY or QQQ will receive the
notice is hereby given that on February
SPY or QQQ rebate based on the highest Market
24, 2017, the International Securities 3 A ‘‘Market Maker Plus’’ is a Market Maker who Maker tier achieved in either product. For example,
Exchange, LLC (‘‘ISE’’ or ‘‘Exchange’’) is on the National Best Bid or National Best Offer a Market Maker that achieves Tier 1 Market Maker
filed with the Securities and Exchange a specified percentage of the time for series trading Plus in QQQ but Tier 3 Market Maker Plus in SPY
Commission (‘‘SEC’’ or ‘‘Commission’’) between $0.03 and $3.00 (for options whose will receive a Tier 3 rebate in both SPY and QQQ.
underlying stock’s previous trading day’s last sale Instead of the Tier 2 and Tier 3 rebates described
the proposed rule change as described above, however, Market Maker Plus orders in SPY
price was less than or equal to $100) and between
in Items I and II, below, which Items $0.10 and $3.00 (for options whose underlying or QQQ are entitled to a rebate of $0.16 per contract
have been prepared by the Exchange. stock’s previous trading day’s last sale price was for Tier 2, and $0.20 per contract for Tier 3.
The Commission is publishing this greater than $100) in premium in each of the front 10 A ‘‘Non-ISE Market Maker’’ is a market maker
notice to solicit comments on the two expiration months. The specified percentage is as defined in Section 3(a)(38) of the Securities
at least 80% but lower than 85% of the time for Tier Exchange Act of 1934, as amended, registered in the
proposed rule change from interested 1, at least 85% but lower than 95% of the time for same options class on another options exchange.
persons. Tier 2, and at least 95% of the time for Tier 3. A 11 A ‘‘Firm Proprietary’’ order is an order
Market Maker’s single best and single worst quoting submitted by a member for its own proprietary
I. Self-Regulatory Organization’s days each month based on the front two expiration account.
Statement of the Terms of Substance of months, on a per symbol basis, will be excluded in 12 A ‘‘Broker-Dealer’’ order is an order submitted
the Proposed Rule Change calculating whether a Market Maker qualifies for by a member for a broker-dealer account that is not
this rebate, if doing so will qualify a Market Maker its own proprietary account.
for the rebate.
The Exchange proposes to amend the 4 A ‘‘Priority Customer’’ is a person or entity that
13 A ‘‘Professional Customer’’ is a person or entity
Exchange’s Schedule of Fees, as that is not a broker/dealer and is not a Priority
is not a broker/dealer in securities, and does not Customer.
described in further detail below. place more than 390 orders in listed options per day 14 Priority Customer ADV includes all volume in
asabaliauskas on DSK3SPTVN1PROD with NOTICES2
on average during a calendar month for its own
The text of the proposed rule change beneficial account(s), as defined in ISE Rule
all symbols and order types. All eligible volume
is available on the Exchange’s Web site from affiliated members will be aggregated in
100(a)(37A). determining total affiliated Priority Customer ADV,
at www.ise.com, at the principal office 5 ‘‘Select Symbols’’ are options overlying all
provided there is at least 75% common ownership
of the Exchange, and at the symbols listed on the ISE that are in the Penny Pilot between the members as reflected on each
Commission’s Public Reference Room. Program. member’s Form BD, Schedule A. For purposes of
6 ‘‘Non-Select Symbols’’ are options overlying all
determining Priority Customer ADV, any day that
symbols, excluding Select Symbols. the regular order book is not open for the entire
11 17 CFR 200.30–3(a)(12). 7 The term ‘‘Market Makers’’ refers to trading day or the Exchange instructs members in
1 15 U.S.C. 78s(b)(1). ‘‘Competitive Market Makers’’ and ‘‘Primary Market writing to route their orders to other markets may
2 17 CFR 240.19b-4. Makers’’ collectively. See ISE Rule 100(a)(25). be excluded from such calculation; provided that
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![Federal Register / Vol. 82, No. 49 / Wednesday, March 15, 2017 / Notices 13913
changes reflect this competitive change that are filed with the (OMB)
environment. Commission, and all written Office of Management and Budget, Attn:
communications relating to the Desk Officer for SSA, Fax: 202–395–
C. Self-Regulatory Organization’s
proposed rule change between the 6974, Email address: OIRA_
Statement on Comments on the
Commission and any person, other than Submission@omb.eop.gov
Proposed Rule Change Received From
those that may be withheld from the
Members, Participants, or Others (SSA)
public in accordance with the
No written comments were either provisions of 5 U.S.C. 552, will be Social Security Administration, OLCA,
solicited or received. available for Web site viewing and Attn: Reports Clearance Director, 3100
III. Date of Effectiveness of the printing in the Commission’s Public West High Rise, 6401 Security Blvd.,
Proposed Rule Change and Timing for Reference Room, 100 F Street NE., Baltimore, MD 21235, Fax: 410–966–
Commission Action Washington, DC 20549, on official 2830, Email address:
business days between the hours of OR.Reports.Clearance@ssa.gov
The foregoing rule change has become 10:00 a.m. and 3:00 p.m. Copies of the
effective pursuant to Section Or you may submit your comments
filing also will be available for online through www.regulations.gov,
19(b)(3)(A)(ii) of the Act,20 and Rule inspection and copying at the principal
19b–4(f)(2) 21 thereunder. At any time referencing Docket ID Number [SSA–
office of the Exchange. All comments 2017–0012].
within 60 days of the filing of the received will be posted without change;
proposed rule change, the Commission The information collections below are
the Commission does not edit personal pending at SSA. SSA will submit them
summarily may temporarily suspend identifying information from
such rule change if it appears to the to OMB within 60 days from the date of
submissions. You should submit only this notice. To be sure we consider your
Commission that such action is: (i) information that you wish to make
Necessary or appropriate in the public comments, we must receive them no
available publicly. All submissions later than May 15, 2017. Individuals can
interest; (ii) for the protection of should refer to File Number SR–ISE–
investors; or (iii) otherwise in obtain copies of the collection
2017–16 and should be submitted on or instruments by writing to the above
furtherance of the purposes of the Act. before April 5, 2017.
If the Commission takes such action, the email address.
Commission shall institute proceedings For the Commission, by the Division of Authorization for the Social Security
Trading and Markets, pursuant to delegated Administration To Obtain Wage and
to determine whether the proposed rule authority.22
should be approved or disapproved. Employment Information From Payroll
Eduardo A. Aleman, Data Providers—0960–NEW. Section
IV. Solicitation of Comments Assistant Secretary. 824 of the Bipartisan Budget Act (BBA)
Interested persons are invited to [FR Doc. 2017–05089 Filed 3–14–17; 8:45 am] of 2015, Public Law 114–74, authorizes
submit written data, views, and BILLING CODE 8011–01–P the Social Security Administration
arguments concerning the foregoing, (SSA) to enter into information
including whether the proposed rule exchanges with payroll data providers
change is consistent with the Act. for the purposes of improving program
Comments may be submitted by any of SOCIAL SECURITY ADMINISTRATION administration and preventing improper
the following methods: payments in the Social Security
[Docket No. SSA–2017–0012] Disability Insurance (SSDI) and
Electronic Comments Supplemental Security Income (SSI)
• Use the Commission’s Internet Agency Information Collection programs. SSA will use Form SSA–
comment form (http://www.sec.gov/ Activities: Proposed Request 8240, ‘‘Authorization for the Social
rules/sro.shtml); or Security Administration to Obtain Wage
• Send an email to rule-comments@ The Social Security Administration and Employment Information from
sec.gov. Please include File Number SR– (SSA) publishes a list of information Payroll Data Providers,’’ to secure the
ISE–2017–16 on the subject line. collection packages requiring clearance authorization needed from the relevant
by the Office of Management and members of the public to obtain their
Paper Comments Budget (OMB) in compliance with wage and employment information from
• Send paper comments in triplicate Public Law 104–13, the Paperwork payroll data providers. Ultimately, SSA
to Secretary, Securities and Exchange Reduction Act of 1995, effective October will use this wage and employment
Commission, 100 F Street NE., 1, 1995. This notice includes a new information to help determine program
Washington, DC 20549–1090. information collection. eligibility and payment amounts.
All submissions should refer to File SSA is soliciting comments on the The public will be able to complete
Number SR–ISE–2017–16. This file accuracy of the agency’s burden form SSA–8240 using the following
number should be included on the estimate; the need for the information; modalities: a paper form; the Internet;
subject line if email is used. To help the its practical utility; ways to enhance its and an in-office or telephone interview,
Commission process and review your quality, utility, and clarity; and ways to during which an SSA employee will
comments more efficiently, please use minimize burden on respondents, document the wage and employment
only one method. The Commission will including the use of automated information authorization information
asabaliauskas on DSK3SPTVN1PROD with NOTICES2
post all comments on the Commission’s collection techniques or other forms of on one of SSA’s internal systems ((the
Internet Web site (http://www.sec.gov/ information technology. Mail, email, or Modernized Claims System (MCS); the
rules/sro.shtml). Copies of the fax your comments and Modernized Supplemental Security
submission, all subsequent recommendations on the information Income Claims System (MSSICS);
amendments, all written statements collection(s) to the OMB Desk Officer eWork; or iMain)). The individual’s
with respect to the proposed rule and SSA Reports Clearance Officer at authorization will remain effective until
the following addresses or fax numbers. one of the following four events occurs:
20 15 U.S.C. 78s(b)(3)(A)(ii). • SSA makes a final adverse decision
21 17 CFR 240.19b–4(f)(2). 22 17 CFR 200.30–3(a)(12). on the application for benefits, and the
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Document Created: 2017-03-15 06:04:19
Document Modified: 2017-03-15 06:04:19
| 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 | 82 FR 13910 |
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