82 FR 32893 - Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Eliminate Fees and Rebates for Trades Executed on June 30, 2017 in INET Launch Symbols

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 136 (July 18, 2017)

[Federal Register Volume 82, Number 136 (Tuesday, July 18, 2017)]
[Notices]
[Pages 32893-32895]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-14981]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81128; File No. SR-ISE-2017-66]


Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Eliminate Fees 
and Rebates for Trades Executed on June 30, 2017 in INET Launch Symbols

July 12, 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 June 30, 2017, Nasdaq ISE, 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 amend the Schedule of Fees to eliminate 
fees and rebates for trades executed on June 30, 2017 in INET Launch 
Symbols.
    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 Schedule of 
Fees to eliminate fees and rebates for trades executed on June 30, 2017 
in the following symbols: ACN, ACOR, AEO, AFSI, AMJ, AOBC, BKD, BTE, 
BV, CBI, CCL, CLR, CME, CNQ, ADM, ADSK, AGNC, ASHR, BBT, BK, BSX, CIEN, 
and IBM (``INET Launch Symbols'').\3\ This change is being made in 
connection with the migration of the Exchange's trading system to the 
Nasdaq INET technology, which began on June 12, 2017.\4\ On June 9, 
2017, the Exchange filed a proposed rule change that eliminated fees 
and rebates for trades in FX Options that began trading on INET with 
the launch of the re-platformed trading system.\5\ In addition, on June 
27, 2017 the Exchange filed another proposed rule change that 
eliminated fees and rebates for trades in symbol KANG that began 
trading on INET on that date.\6\ The Exchange now proposes to similarly 
eliminate fees and rebates for trades in INET Launch Symbols executed 
on the INET trading system on June 30, 2017. With this change, no fees 
or rebates will be charged for executions on INET during the month of 
June. Because the Exchange is eliminating fees and rebates for trades 
in these products, trades in INET Launch Symbols executed on June 30, 
2017 will not be counted towards a member's tier for June activity. In 
addition, activity in the following INET Launch Symbols that are Select 
Symbols \7\ will not be counted for purposes of determining Market 
Maker Plus \8\ tiers: ADM, ADSK,

[[Page 32894]]

AGNC, ASHR, BBT, BK, BSX, CIEN, and IBM. The proposed change would 
allow the Exchange to bill June fees solely based on activity traded on 
the current T7 trading system, and is an inducement for members to 
trade the first symbols launched on the INET trading system as there 
would be no transaction fees for doing so.
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    \3\ The INET Launch Symbols will begin trading on INET on June 
30, 2017.
    \4\ See Securities Exchange Act Release No. 80432 (April 11, 
2017), 82 FR 18191 (April 17, 2017) (SR-ISE-2017-03).
    \5\ See Securities Exchange Act Release No. 80999 (June 22, 
2017) 82 FR 29354 (June 28, 2017) (SR-ISE-2017-59).
    \6\ See SR-ISE-2017-63 (publication pending).
    \7\ ``Select Symbols'' are options overlying all symbols listed 
on the Nasdaq ISE that are in the Penny Pilot Program.
    \8\ 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.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\9\ in general, and Section 
6(b)(4) of the Act,\10\ in particular, in that it is designed to 
provide for the equitable allocation of reasonable dues, fees, and 
other charges among its members and other persons using its facilities.
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    \9\ 15 U.S.C. 78f.
    \10\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that it is reasonable and equitable to 
eliminate fees and rebates for INET Launch Symbols during the initial 
launch of the Exchange's re-platformed trading system. Eliminating fees 
and rebates in the INET Launch System during the launch will simplify 
the Exchange's billing and serve as an inducement for members to trade 
the first symbols migrated to the INET trading system. Because the 
Exchange is offering free executions in these symbols, volume executed 
in INET Launch Symbols on June 30, 2017 will not be counted towards any 
volume based tiers. Similar treatment was afforded to the first symbol 
launched on the Nasdaq GEMX, LLC INET trading system,\11\ and also to 
other symbols traded on ISE INET during the launch.\12\ For the same 
reason, activity in the following INET Launch Symbols that are Select 
Symbols will not be counted for purposes of determining Market Maker 
Plus tiers. The Exchange believes that these changes will be attractive 
to members that trade on the new INET trading system. The Exchange also 
believes that this proposed change is not unfairly discriminatory as it 
will apply to trades in INET Launch Symbols that are executed by all 
members. As noted above, the INET Launch Symbols were selected for this 
treatment as those products, together with the Exchange's proprietary 
FX Options and KANG, will be the first symbols traded on the INET 
trading system.
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    \11\ See Securities Exchange Act Release No. 80184 (March 9, 
2017), 82 FR 13893 (March 15, 2017) (SR-ISEGemini-2017-09)
    \12\ See supra notes 5 and 6.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\13\ the Exchange 
does not believe that the proposed rule change will impose any burden 
on intermarket or intramarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. The proposed 
change is intended to ease members' transition to the re-platformed 
INET trading system and is not designed to have any significant 
competitive impact. 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 changes reflect this 
competitive environment.
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    \13\ 15 U.S.C. 78f(b)(8).
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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,\14\ and Rule 19b-4(f)(2) \15\ 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.
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    \14\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \15\ 17 CFR 240.19b-4(f)(2).
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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-2017-66 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-2017-66. 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-2017-66 and should be 
submitted on or before August 8, 2017.


[[Page 32895]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2017-14981 Filed 7-17-17; 8:45 am]
 BILLING CODE 8011-01-P