82 FR 34723 - Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding Market Maker Quotations
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 142 (July 26, 2017)
Federal Register Volume 82, Issue 142 (July 26, 2017)
| Page Range | 34723-34727 | |
| FR Document | 2017-15629 |
[Federal Register Volume 82, Number 142 (Wednesday, July 26, 2017)] [Notices] [Pages 34723-34727] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-15629] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-81174; File No. SR-GEMX-2017-32] Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding Market Maker Quotations July 20, 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 July 6, 2017, Nasdaq GEMX, LLC (``GEMX'' 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. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- [[Page 34724]] I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Rule 804, entitled ``Market Maker Quotations.'' 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 Exchange proposes to amend GEMX Rule 804, entitled ``Market Maker Quotations'' to amend the current rule text at GEMX Rule 804(g)(1) and (2) to adopt a revised description of the manner in which GEMX removes market maker quotes when certain risk parameters have been triggered. The Exchange believes that the proposed new rule text will provide more detailed information to participants concerning the manner in which these risk features will remove quotes from the Order Book. Today, GEMX Rule 804(g)(1) provides that a market maker must provide parameters by which the Exchange will automatically remove a market maker's quotations in all series of an options class. If a market maker does not provide parameters then the Exchange will apply default parameters announced to members. The Exchange will automatically remove a market maker's quotation when, during a time period established by the market maker, the market maker exceeds: (i) The specified number of total contracts in the class, (ii) the specified percentage of the total size of the market maker's quotes in the class, (iii) the specified absolute value of the net between contracts bought and contracts sold in the class, or (iv) the specified absolute value of the net between (a) calls purchased plus puts sold in the class, and (b) calls sold plus puts purchased in the class. The Exchange proposes to adopt new rule text, which continues to require a market maker to provide parameters by which the Exchange will automatically remove a market maker's quotations in all series of an options class. If a market maker does not provide parameters then the Exchange will apply default parameters announced to members. This is not being amended, rather it is being expanded. The proposed rule text in 804(g)(1) makes clear that market makers are required to utilize the Percentage, Volume, Delta and Vega Thresholds, each a Threshold, described in subsections (A)-(D) in the new rule text. These are the same risk parameters that are offered today by GEMX. The Exchange is seeking to identify each risk parameter specifically and describe the function of each parameter in Rule 804(g)(1)(A)-(D). For each feature, the Exchange's system (``System'') will continue to automatically remove quotes in all series of an options class when a certain threshold for any of the parameters has been exceeded. The Exchange elaborates in the proposed rule that a market maker is required to specify a period of time not to exceed 30 seconds (``Specified Time Period'') during which the system will automatically remove a Market Maker's quotes in all series of an options class. The limitation of not to exceed 30 seconds is new for GEMX Members. In order to establish a reasonable limit to the allowable Specified Time Period, an GEMX Member will be limited to the setting their Specified Time period to no more than 30 seconds for these Thresholds. A Specified Time Period will commence for an options class every time an execution occurs in any series in such options class and will continue until the System removes quotes as described in proposed GEMX Rule 804(g)(2) or (3) or the Specified Time Period expires. This is the case today, and is not changing. The Specified Time Periods will be the same value described in subsections (A)-(D). Also, as is the case today, a Specified Time Period operates on a rolling basis among all series in an options class in that there may be Specified Time Periods occurring simultaneously for each Threshold and such Specified Time Periods may overlap. If a Market Maker does not provide parameters, the Exchange will apply default parameters, which default settings have been announced to Members.\3\ --------------------------------------------------------------------------- \3\ http://business.nasdaq.com/media/GEMXSystemSettings_tcm5044-41351.pdf [sic]. --------------------------------------------------------------------------- Proposed Rule 804(g)(1)(A) describes in greater detail the operation of the Percentage Threshold. As is the case today, a Market Maker must provide a specified percentage of quote size (``Percentage Threshold''), of not less than 1%, by which the System will automatically remove a Market Maker's quotes in all series of an options class. The Exchange is adding more detail about the manner in which the System will calculate percentages and amending the current rule to change its operations. For each series in an options class, the System will determine (i) during a Specified Time Period and for each side in a given series, a percentage calculated by dividing the size of a Market Maker's quote size executed in a particular series (the numerator) by the Marker Maker's quote size available at the time of execution plus the total number of the Market Marker's quote size previously executed during the unexpired Specified Time Period (the denominator) (``Series Percentage''); and (ii) the sum of the Series Percentages in the options class (``Issue Percentage'') during a Specified Time Period. The System will track and calculate the net impact of positions in the same options issue; long call percentages are offset by short call percentages, and long put percentages are offset by short put percentages in the Issue Percentage. The Exchange also notes that in calculating the Percentage the System compares the number of contracts executed in that series relative to the size of the quote at the time of the execution plus the number of executed contracts that have occurred in the current time period. The legacy GEMX system calculated the Percentage risk parameter by comparing the number of contracts executed in that series relative to the size of the original quote only at the time of the execution. This difference is captured within the proposed rule text. The Exchange notes that with the migration from the GEMX legacy system to the INET system the manner in which the System offsets is not the same. The legacy GEMX system did not offset, in that long call percentages are not offset by short call percentages, and long put percentages are not offset by short put percentages. The migration to INET did however cause the System to track and calculate the net impact.\4\ The Exchange notes this difference in the calculation and seeks to memorialize the change in the [[Page 34725]] process. The proposed rule provides participants with greater clarity as to the operation of the Percentage risk feature. The proposed text indicates that if the Issue Percentage exceeds the Percentage Threshold the System will automatically remove a market maker's quotes in all series of the options class. --------------------------------------------------------------------------- \4\ The net impact of positions takes into account the offsets noted herein. --------------------------------------------------------------------------- Proposed Rule 804(g)(1)(B) describes in greater detail the operation of the Volume Threshold. As is the case today, a market maker must provide a Volume Threshold by which the System will automatically remove a market maker's quotes in all series of an underlying security when the market maker executes a number of contracts which exceeds the designated number of contracts in all options series in an options class. Proposed Rule 804(g)(1)(C) describes in greater detail the operation of the Delta Threshold. As is the case today, a market maker must provide a Delta Threshold by which the System will automatically remove a market maker's quotes in all series of an underlying security. For each class of options, the System will maintain a Delta counter, which tracks the absolute value of the difference between (i) purchased call contracts plus sold put contracts and (ii) sold call contracts plus purchased put contracts. If the Delta counter exceeds the Delta Threshold established by the Member, the System will automatically remove a market maker's quotes in all series of the options class. Proposed Rule 804(g)(1)(D) describes in greater detail the operation of the Vega Threshold. As is the case today, a market maker must provide a Vega Threshold by which the System will automatically remove a Market Maker's quotes in all series of an options class. For each series of an options class, the System will maintain a Vega counter, which tracks the absolute value of purchased contracts minus sold contracts. If the Vega counter exceeds the Vega Threshold established by the Member, the System will automatically remove a Market Maker's quotes in all series of the options class. Proposed Rule 804(g)(2) provides more detail about the System's current operation with respect to quote removal. The System will automatically remove quotes in all options in an underlying security when the Percentage Threshold, Volume Threshold, Delta Threshold or Vega Threshold has been exceeded. The System will send a Purge Notification Message to the Market Maker for all affected series when any of the above thresholds have been exceeded. The Percentage Threshold, Volume Threshold, Delta Threshold and Vega Threshold are considered independently of each other. Quotes will be automatically executed up to the Market Maker's size regardless of whether the execution of such quotes would cause the Market Maker to exceed the Percentage Threshold, Volume Threshold, Delta Threshold or Vega Threshold. Proposed Rule 804(g)(3) provides more detail about the manner in which the System resets the counting of the various risk parameters. Notwithstanding the automatic removal of quotes described in the rule, if a market maker requests the System to remove quotes in all options series in an options class, the System will automatically reset all Thresholds. Proposed Rule 804(g)(4) provides more detail about the process to re-initiate quoting. When the System removes quotes because the Percentage Threshold, Volume Threshold, Delta Threshold or Vega Threshold were exceeded, the market maker must send a re-entry indicator to re-enter the System. Proposed Rule 804(g)(5) provides more detail about default parameters as mentioned above. If a market maker does not provide a parameter for each of the automated quotation removal Thresholds described in Rule 804(g)(1)(A-D) above, the Exchange will apply default parameters, which are announced to Members. This language exists today in the current text and is being memorialized herein. Finally, proposed Rule 804(g)(6) describes the interaction between the four Thresholds and the market wide parameter. In addition to the Thresholds described in Rule 804(g)(1)(A)-(D) above, a market maker must provide a market wide parameter by which the Exchange will automatically remove a Market Maker's quotes in all classes when, during a time period established by the Market Maker, the total number of quote removal events specified in Rule 804(g)(1)(A)-(D) exceeds the market wide parameter provided to the Exchange by the market maker. As is the case today, Market Makers may request the Exchange to set the market wide parameter to apply to just GEMX or across GEMX and Nasdaq ISE. Below are some illustrative examples of the Percentage and Volume risk parameters. Example #1: Describes the Percentage risk parameter. Presume the following Order Book: ------------------------------------------------------------------------ Size on bid x Series of underlying XYZ offer for MM1 ------------------------------------------------------------------------ 100 Strike Call......................................... 300x300 100 Strike Put.......................................... 50x50 110 Strike Call......................................... 200x200 110 Strike Put.......................................... 150x150 ------------------------------------------------------------------------ In this example, assume the Specified Time Period designated by the Market Maker #1 is 10 seconds and the Percentage Threshold is set to 100%. Assume at 12:00:00, Market Maker #1 executes 100 contracts of his offer size, 200 contracts, in the 110 Strike Calls. This represents an execution equaling 50% (100 contracts of the 200 contract quote size) of the 100% Percentage Threshold. Assume at 12:00:01, Market Maker #1 executes 50 additional contracts in the same 110 Strike Calls. This execution equates to an additional 25% ((50 contracts/(100 remaining quote size +100 contracts already executed within the Specified Time Period)) for a net 75% Series Percentage count toward the 100% Percentage Threshold. If at 12:00:03, Market Maker #1 executes the full size of his bid (50 contracts) in the 100 Strike Put, the System will automatically remove all of Market Maker #1's quotes in Underlying XYZ since the execution caused his 100% Percentage Threshold to be exceeded; the execution in the 100 Strike Put added 100% Series Percentage to his previously calculated Series Percentage of 75% totaling 175% Issue Percentage. No further quotes for Market Maker #1 in Underlying XYZ will be available until re-entry. The Specified Time Period will be reset for Market Maker #1 in options class XYZ and Market Maker #1 will need to send a re-entry indicator in order to re- enter quotes in options series for options class XYZ into the System. Example #2 is another example of the Percentage Threshold. Presume the following Order Book: In this example, assume Market Maker #1 has Percentage Threshold set at 100% with a Specified Time Period over 5 seconds. Assume at 12:00:00, Market Maker #1 is quoting the XYZ 20 strike calls at 1.00 (10)-1.20 (10). An incoming Order to buy 5 contracts for 1.20 trades against Market Maker #1's quote. Based on this trade, the Series Percentage Threshold calculation is 5/[(10)+(0)] = 5/10 = 50%. Since this is the only execution during the Time Period, 50% also represents the Issue Percentage, therefore Market Maker #1's quote is now 1.00 (10)-1.20 (5). Next, assume at 12:00:01 an Incoming Order to buy 2 contracts for 1.20 trades against Market Maker #1's quote. Based on this trade, the Series Percentage Threshold calculation is 2/[(5)+(5)] = 2/10 = 20%. The Issue Percentage [[Page 34726]] calculation is the sum of Series Percentages during the time period, or 50% + 20% = 70%. Finally, presume Market Maker #1's quote is now 1.00 (10)-1.20 (3). At 12:00:02, Market Maker #1 updates his quote in the XYZ 20 strike calls to increase his offer size back to 10 contracts, 1.00 (10)-1.20 (10). An incoming Order to buy 6 contracts for 1.20 trades against Market Maker #1's quote. Based on this trade, the Series Percentage Threshold calculation: 6/[(10)+(7)] = 6/17 = 35.29%. The Issue Percentage calculation is the sum of Series Percentages during the time period, or 50% + 20% + 35.29% = 105.29%. In this scenario, Market Maler[sic] #1's quotes are removed in all series of XYZ since his setting of 100% over 5 seconds has been exceeded. Example #3 describes the Volume Threshold. Presume the following Order Book: ------------------------------------------------------------------------ Size on bid x Series of underlying XYZ offer for MM1 ------------------------------------------------------------------------ 100 Strike Call......................................... 300x300 100 Strike Put.......................................... 50x50 110 Strike Call......................................... 200x200 110 Strike Put.......................................... 150x150 ------------------------------------------------------------------------ In this example, assume the Specified Time Period designated by the Market Maker #1 is 10 seconds and the designated number of contracts permitted for the Volume-Based Threshold is 250 contracts. Assume at 12:00:00, the Market Maker #1 executes all of his offer size, 200 contracts, in the 110 Strike Calls. The System will initiate the Specified Time Period and for 10 seconds the System will count all volume executed in series of options class XYZ. If at any point during that 10 second period, the Market Maker #1 executes additional contracts in any series of the options class XYZ, those contracts will be added to the initial execution of 200 contracts. To illustrate, assume at 12:00:05 the Market Maker # 1 executes 60 contracts of his offer in the 100 Strike Calls. The total volume executed is now 260 contracts. Since that volume exceeds the Market Maker #1's designated number of contracts for the Volume Threshold (250 contracts), all of his quotes in all series of the options class XYZ over the Specialized Quote Feed \5\ will be removed from the System; no further quotes will be executed until re-entry. The Volume Specified Time Period will be reset for Market Maker #1 in options class XYZ and Market Maker #1 will need to send a re-entry indicator in order to re-enter quotes in options series for options class XYZ into the System. --------------------------------------------------------------------------- \5\ The Specialized Quote Feed interface that allows market makers to connect and send quotes, sweeps and auction responses into GEMX. Data includes the following: (1) Options Auction Notifications (e.g., opening imbalance, Flash, PIM, Solicitation and Facilitation or other information); (2) Options Symbol Directory Messages; (3) System Event Messages (e.g., start of messages, start of system hours, start of quoting, start of opening); (4) Option Trading Action Messages (e.g., halts, resumes); (5) Execution Messages; and (6) Quote Messages (quote/sweep messages, risk protection triggers or purge notifications). --------------------------------------------------------------------------- 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 memorializing, with greater detail, the risk protections available to market makers. The described Thresholds serve to decrease risk and increase stability. Additionally, because the Exchange offers these risk tools to market makers, in order to encourage them to provide as much liquidity as possible and encourage market making generally, the proposal removes impediments to and perfects the mechanism of a free and open market and a national market system and protects investors and the public interest. The Exchange believes that amending Rule 804(g) to add more clarifying text, which explains in greater detail the manner in which the four Thresholds operate, will bring more transparency to the rule which serves to protect investors and the public interest, because market makers will be more informed about the manner in which the functionality operates. --------------------------------------------------------------------------- \6\ 15 U.S.C. 78f(b). \7\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- In addition, the Exchange's proposal to amend the current Percentage Threshold to: (i) Calculate offsets; and (ii) calculate the Percentage Threshold during a Specified Time Period and for each side in a given series, a percentage, by dividing the size of a Market Maker's quote size executed in a particular series (the numerator) by the Marker Maker's quote size available at the time of execution plus the total number of the Market Marker's quote size previously executed during the unexpired Specified Time Period, will provide Market Makers with greater precision in calculating quoting risks. The Exchange believes that providing Market Makers with tools to calculate risk serves to perfect the mechanism of a free and open market and a national market system, and, in general to protect investors and the public interest because Market Makers are better able to manage risks with this risk tool. The Exchange further represents that its proposal will continue to operate consistently with the firm quote obligations of a broker-dealer pursuant to Rule 602 of Regulation NMS and that the functionality is mandatory. Specifically, any interest that is executable against a market maker's quotes that are received \8\ by the Exchange prior to the time any of these functionalities are engaged will be automatically executed at the price up to the market maker's size, regardless of whether such execution results in executions in excess of the market maker's pre-set parameters. --------------------------------------------------------------------------- \8\ The time of receipt is the time such message is processed by the Order Book. --------------------------------------------------------------------------- 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. Specifically, the proposal will not impose a burden on intra-market or inter-market competition, rather it provides market makers with the continued opportunity to avail themselves of risk tools. The proposal does not impose a burden on inter-market competition, because participants may choose to become market makers on a number of other options exchanges, which may have similar but not identical features.\9\ The proposed rule change is meant to continue to protect market makers from inadvertent exposure to excessive risk. Accordingly, the proposed rule change will have no impact on competition. --------------------------------------------------------------------------- \9\ See BATS Rule 21.16, BOX Rules 8100 and 8110, C2 Rule 8.12, CBOE Rule 8.18, MIAX Rule 612, NYSE MKT Rule 928NY and NYSE Arca Rule 6.40. --------------------------------------------------------------------------- The Exchange's proposal to amend the current Percentage Based risk feature to: (i) Calculate offsets; and (ii) calculate the Percentage Threshold during a Specified Time Period and for each side in a given series, a percentage, by dividing the size of a Market Maker's quote size executed in a particular series (the numerator) by the Marker Maker's quote size available at the time of execution plus the total number of the Market Marker's quote size previously executed during the unexpired Specified Time Period, does not impose an undue burden on competition and is non-controversial because the Exchange offers a Percentage Threshold today. The proposed changes to the Percentage [[Page 34727]] risk tool simply add more precision to the existing calculation to permit Marker Makers to better control their risk with respect to quoting. Further, the Exchange is memorializing more detail concerning the function of the Thresholds with this rule proposal and making clear the method in which the Percentage risk tool is calculated. The risk tools will continue to reduce risk for market makers in the event of a systems issue or due to the occurrence of unusual or unexpected market activity. 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 \10\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\11\ --------------------------------------------------------------------------- \10\ 15 U.S.C. 78s(b)(3)(A)(iii). \11\ 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. --------------------------------------------------------------------------- In its filing, GEMX requests that the Commission waive the 30-day operative delay in order to enable the Exchange to accurately reflect in its rules the operation of its risk parameters since the migration to the INET platform. Although the Exchange proposes certain technical changes to how the risk parameters will operate (e.g., limiting the Specified Time Period to 30 seconds), the proposed changes are largely intended to provide more detail about the operation of the existing risk parameters. Accordingly, the Commission believes that granting a waiver of the operative delay is consistent with the protection of investors and the public interest and therefore designates the proposed rule change to be operative upon filing.\12\ --------------------------------------------------------------------------- \12\ 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). --------------------------------------------------------------------------- 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. 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-GEMX-2017-32 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-GEMX-2017-32. 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-GEMX-2017-32, and should be submitted on or before August 16, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\13\ --------------------------------------------------------------------------- \13\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-15629 Filed 7-25-17; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 82, No. 142 / Wednesday, July 26, 2017 / Notices 34723
modestly increased combined competitive standing in the financial communications relating to the
Consolidated Volume criteria required markets. proposed rule change between the
to qualify for the fee does not Commission and any person, other than
C. Self-Regulatory Organization’s
discriminate unfairly and is equitably those that may be withheld from the
Statement on Comments on the
allocated, as eligibility for the fee is tied public in accordance with the
Proposed Rule Change Received From
to the QMM’s performance in provisions of 5 U.S.C. 552, will be
comparison to other participants in Members, Participants, or Others
available for Web site viewing and
aggregate. No written comments were either printing in the Commission’s Public
solicited or received.
B. Self-Regulatory Organization’s Reference Room, 100 F Street NE.,
Statement on Burden on Competition III. Date of Effectiveness of the Washington, DC 20549 on official
The Exchange does not believe that Proposed Rule Change and Timing for business days between the hours of
the proposed rule change will impose Commission Action 10:00 a.m. and 3:00 p.m. Copies of the
any burden on competition not The foregoing rule change has become filing also will be available for
necessary or appropriate in furtherance effective pursuant to Section inspection and copying at the principal
of the purposes of the Act. In terms of 19(b)(3)(A)(ii) of the Act.10 office of the Exchange. All comments
inter-market competition, the Exchange At any time within 60 days of the received will be posted without change;
notes that it operates in a highly filing of the proposed rule change, the the Commission does not edit personal
competitive market in which market Commission summarily may identifying information from
participants can readily favor competing temporarily suspend such rule change if submissions. You should submit only
venues if they deem fee levels at a it appears to the Commission that such information that you wish to make
particular venue to be excessive, or action is: (i) Necessary or appropriate in available publicly. All submissions
rebate opportunities available at other the public interest; (ii) for the protection should refer to File Number SR–
venues to be more favorable. In such an of investors; or (iii) otherwise in NASDAQ–2017–070, and should be
environment, the Exchange must furtherance of the purposes of the Act. submitted on or before August 16, 2017.
continually adjust its fees to remain If the Commission takes such action, the
competitive with other exchanges and Commission shall institute proceedings For the Commission, by the Division of
with alternative trading systems that to determine whether the proposed rule Trading and Markets, pursuant to delegated
have been exempted from compliance should be approved or disapproved. authority.11
with the statutory standards applicable Eduardo A. Aleman,
to exchanges. Because competitors are IV. Solicitation of Comments
Assistant Secretary.
free to modify their own fees in Interested persons are invited to [FR Doc. 2017–15637 Filed 7–25–17; 8:45 am]
response, and because market submit written data, views, and BILLING CODE 8011–01–P
participants may readily adjust their arguments concerning the foregoing,
order routing practices, the Exchange including whether the proposed rule
believes that the degree to which fee change is consistent with the Act. SECURITIES AND EXCHANGE
changes in this market may impose any Comments may be submitted by any of COMMISSION
burden on competition is extremely the following methods:
limited.
In this instance, although the change Electronic Comments [Release No. 34–81174; File No. SR–GEMX–
to the QMM program may limit the • Use the Commission’s Internet 2017–32]
benefits of the program in non-Nasdaq- comment form (http://www.sec.gov/
listed securities to the extent QMMs that rules/sro.shtml); or Self-Regulatory Organizations; Nasdaq
currently qualify for the $0.0029 per • Send an email to rule-comments@ GEMX, LLC; Notice of Filing and
share executed charge are unable to sec.gov. Please include File Number SR– Immediate Effectiveness of Proposed
meet the more stringent combined NASDAQ–2017–070 on the subject line. Rule Change Regarding Market Maker
Consolidated Volume requirement, the Quotations
Paper Comments
incentive in question will remain in
place and is itself reflective of the need • Send paper comments in triplicate July 20, 2017.
for exchanges to offer significant to Secretary, Securities and Exchange Pursuant to Section 19(b)(1) of the
financial incentives to attract order flow Commission, 100 F Street NE., Securities Exchange Act of 1934
in return for meaningful market- Washington, DC 20549–1090. (‘‘Act’’), 1 and Rule 19b–4 thereunder,2
improving behavior. The Exchange All submissions should refer to File notice is hereby given that on July 6,
believes that the proposed qualification Number SR–NASDAQ–2017–070. This 2017, Nasdaq GEMX, LLC (‘‘GEMX’’ or
criteria will not negatively impact who file number should be included on the ‘‘Exchange’’) filed with the Securities
will qualify for the $0.0029 per share subject line if email is used. To help the and Exchange Commission
executed charge but will rather have a Commission process and review your (‘‘Commission’’) the proposed rule
positive impact on overall market comments more efficiently, please use change as described in Items I and II,
quality as QMMs increase their only one method. The Commission will below, which Items have been prepared
participation in the market to qualify for post all comments on the Commission’s by the Exchange. The Commission is
the lower charge. If, however, the Internet Web site (http://www.sec.gov/ publishing this notice to solicit
Exchange is incorrect and the changes rules/sro.shtml). Copies of the
mstockstill on DSK30JT082PROD with NOTICES
comments on the proposed rule change
proposed herein are unattractive to submission, all subsequent
from interested persons.
QMMs, it is likely that Nasdaq will lose amendments, all written statements
market share as a result. Accordingly, with respect to the proposed rule
Nasdaq does not believe that the change that are filed with the
proposed changes will impair the ability Commission, and all written 11 17 CFR 200.30–3(a)(12).
of members or competing order 1 15 U.S.C. 78s(b)(1).
execution venues to maintain their 10 15 U.S.C. 78s(b)(3)(A)(ii). 2 17 CFR 240.19b–4.
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![34724 Federal Register / Vol. 82, No. 142 / Wednesday, July 26, 2017 / Notices
I. Self-Regulatory Organization’s value of the net between (a) calls which default settings have been
Statement of the Terms of Substance of purchased plus puts sold in the class, announced to Members.3
the Proposed Rule Change and (b) calls sold plus puts purchased Proposed Rule 804(g)(1)(A) describes
The Exchange proposes to amend in the class. in greater detail the operation of the
Rule 804, entitled ‘‘Market Maker Percentage Threshold. As is the case
The Exchange proposes to adopt new
Quotations.’’ today, a Market Maker must provide a
rule text, which continues to require a
The text of the proposed rule change specified percentage of quote size
market maker to provide parameters by (‘‘Percentage Threshold’’), of not less
is available on the Exchange’s Web site which the Exchange will automatically
at www.ise.com, at the principal office than 1%, by which the System will
remove a market maker’s quotations in automatically remove a Market Maker’s
of the Exchange, and at the all series of an options class. If a market
Commission’s Public Reference Room. quotes in all series of an options class.
maker does not provide parameters then The Exchange is adding more detail
II. Self-Regulatory Organization’s the Exchange will apply default about the manner in which the System
Statement of the Purpose of, and parameters announced to members. This will calculate percentages and
Statutory Basis for, the Proposed Rule is not being amended, rather it is being amending the current rule to change its
Change expanded. operations. For each series in an options
In its filing with the Commission, the The proposed rule text in 804(g)(1) class, the System will determine (i)
Exchange included statements makes clear that market makers are during a Specified Time Period and for
concerning the purpose of and basis for required to utilize the Percentage, each side in a given series, a percentage
the proposed rule change and discussed Volume, Delta and Vega Thresholds, calculated by dividing the size of a
any comments it received on the each a Threshold, described in Market Maker’s quote size executed in
proposed rule change. The text of these subsections (A)–(D) in the new rule text. a particular series (the numerator) by
statements may be examined at the These are the same risk parameters that the Marker Maker’s quote size available
places specified in Item IV below. The are offered today by GEMX. The at the time of execution plus the total
Exchange has prepared summaries, set Exchange is seeking to identify each risk number of the Market Marker’s quote
forth in sections A, B, and C below, of parameter specifically and describe the size previously executed during the
the most significant aspects of such function of each parameter in Rule unexpired Specified Time Period (the
statements. 804(g)(1)(A)–(D). For each feature, the denominator) (‘‘Series Percentage’’); and
Exchange’s system (‘‘System’’) will (ii) the sum of the Series Percentages in
A. Self-Regulatory Organization’s the options class (‘‘Issue Percentage’’)
Statement of the Purpose of, and continue to automatically remove
quotes in all series of an options class during a Specified Time Period. The
Statutory Basis for, the Proposed Rule System will track and calculate the net
Change when a certain threshold for any of the
impact of positions in the same options
parameters has been exceeded.
1. Purpose issue; long call percentages are offset by
The Exchange elaborates in the short call percentages, and long put
The Exchange proposes to amend proposed rule that a market maker is percentages are offset by short put
GEMX Rule 804, entitled ‘‘Market Maker required to specify a period of time not percentages in the Issue Percentage. The
Quotations’’ to amend the current rule to exceed 30 seconds (‘‘Specified Time Exchange also notes that in calculating
text at GEMX Rule 804(g)(1) and (2) to Period’’) during which the system will the Percentage the System compares the
adopt a revised description of the automatically remove a Market Maker’s number of contracts executed in that
manner in which GEMX removes quotes in all series of an options class. series relative to the size of the quote at
market maker quotes when certain risk The limitation of not to exceed 30 the time of the execution plus the
parameters have been triggered. The seconds is new for GEMX Members. In number of executed contracts that have
Exchange believes that the proposed order to establish a reasonable limit to occurred in the current time period. The
new rule text will provide more detailed the allowable Specified Time Period, an legacy GEMX system calculated the
information to participants concerning
GEMX Member will be limited to the Percentage risk parameter by comparing
the manner in which these risk features
setting their Specified Time period to no the number of contracts executed in that
will remove quotes from the Order
more than 30 seconds for these series relative to the size of the original
Book.
Today, GEMX Rule 804(g)(1) provides Thresholds. A Specified Time Period quote only at the time of the execution.
that a market maker must provide will commence for an options class This difference is captured within the
parameters by which the Exchange will every time an execution occurs in any proposed rule text. The Exchange notes
automatically remove a market maker’s series in such options class and will that with the migration from the GEMX
quotations in all series of an options continue until the System removes legacy system to the INET system the
class. If a market maker does not quotes as described in proposed GEMX manner in which the System offsets is
provide parameters then the Exchange Rule 804(g)(2) or (3) or the Specified not the same. The legacy GEMX system
will apply default parameters Time Period expires. This is the case did not offset, in that long call
announced to members. The Exchange today, and is not changing. The percentages are not offset by short call
will automatically remove a market Specified Time Periods will be the same percentages, and long put percentages
maker’s quotation when, during a time value described in subsections (A)–(D). are not offset by short put percentages.
period established by the market maker, Also, as is the case today, a Specified The migration to INET did however
the market maker exceeds: (i) The Time Period operates on a rolling basis cause the System to track and calculate
mstockstill on DSK30JT082PROD with NOTICES
specified number of total contracts in among all series in an options class in the net impact.4 The Exchange notes
the class, (ii) the specified percentage of that there may be Specified Time this difference in the calculation and
the total size of the market maker’s Periods occurring simultaneously for seeks to memorialize the change in the
quotes in the class, (iii) the specified each Threshold and such Specified
3 http://business.nasdaq.com/media/
absolute value of the net between Time Periods may overlap. If a Market
GEMXSystemSettings_tcm5044-41351.pdf [sic].
contracts bought and contracts sold in Maker does not provide parameters, the 4 The net impact of positions takes into account
the class, or (iv) the specified absolute Exchange will apply default parameters, the offsets noted herein.
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![Federal Register / Vol. 82, No. 142 / Wednesday, July 26, 2017 / Notices 34725
process. The proposed rule provides independently of each other. Quotes Series of Size on bid x
participants with greater clarity as to the will be automatically executed up to the underlying XYZ offer for MM1
operation of the Percentage risk feature. Market Maker’s size regardless of
The proposed text indicates that if the whether the execution of such quotes 110 Strike Call ...................... 200x200
Issue Percentage exceeds the Percentage would cause the Market Maker to 110 Strike Put ....................... 150x150
Threshold the System will exceed the Percentage Threshold,
In this example, assume the Specified
automatically remove a market maker’s Volume Threshold, Delta Threshold or
Time Period designated by the Market
quotes in all series of the options class. Vega Threshold.
Proposed Rule 804(g)(1)(B) describes Maker #1 is 10 seconds and the
Proposed Rule 804(g)(3) provides
in greater detail the operation of the Percentage Threshold is set to 100%.
more detail about the manner in which
Volume Threshold. As is the case today, Assume at 12:00:00, Market Maker #1
the System resets the counting of the
a market maker must provide a Volume executes 100 contracts of his offer size,
various risk parameters.
Threshold by which the System will 200 contracts, in the 110 Strike Calls.
Notwithstanding the automatic removal This represents an execution equaling
automatically remove a market maker’s of quotes described in the rule, if a
quotes in all series of an underlying 50% (100 contracts of the 200 contract
market maker requests the System to quote size) of the 100% Percentage
security when the market maker remove quotes in all options series in an
executes a number of contracts which Threshold. Assume at 12:00:01, Market
options class, the System will Maker #1 executes 50 additional
exceeds the designated number of automatically reset all Thresholds.
contracts in all options series in an contracts in the same 110 Strike Calls.
Proposed Rule 804(g)(4) provides
options class. This execution equates to an additional
more detail about the process to re-
Proposed Rule 804(g)(1)(C) describes 25% ((50 contracts/(100 remaining
initiate quoting. When the System
in greater detail the operation of the quote size +100 contracts already
removes quotes because the Percentage
Delta Threshold. As is the case today, a executed within the Specified Time
Threshold, Volume Threshold, Delta
market maker must provide a Delta Period)) for a net 75% Series Percentage
Threshold or Vega Threshold were
Threshold by which the System will count toward the 100% Percentage
exceeded, the market maker must send
automatically remove a market maker’s Threshold. If at 12:00:03, Market Maker
a re-entry indicator to re-enter the
quotes in all series of an underlying #1 executes the full size of his bid (50
System.
security. For each class of options, the contracts) in the 100 Strike Put, the
Proposed Rule 804(g)(5) provides
System will maintain a Delta counter, System will automatically remove all of
more detail about default parameters as
which tracks the absolute value of the Market Maker #1’s quotes in Underlying
mentioned above. If a market maker
difference between (i) purchased call XYZ since the execution caused his
does not provide a parameter for each of
contracts plus sold put contracts and (ii) 100% Percentage Threshold to be
the automated quotation removal
sold call contracts plus purchased put exceeded; the execution in the 100
Thresholds described in Rule
contracts. If the Delta counter exceeds Strike Put added 100% Series
804(g)(1)(A–D) above, the Exchange will
the Delta Threshold established by the Percentage to his previously calculated
apply default parameters, which are
Member, the System will automatically Series Percentage of 75% totaling 175%
announced to Members. This language
remove a market maker’s quotes in all Issue Percentage. No further quotes for
exists today in the current text and is
series of the options class. Market Maker #1 in Underlying XYZ
being memorialized herein.
Proposed Rule 804(g)(1)(D) describes will be available until re-entry. The
Finally, proposed Rule 804(g)(6)
in greater detail the operation of the Specified Time Period will be reset for
describes the interaction between the
Vega Threshold. As is the case today, a Market Maker #1 in options class XYZ
four Thresholds and the market wide
market maker must provide a Vega and Market Maker #1 will need to send
parameter. In addition to the Thresholds
Threshold by which the System will a re-entry indicator in order to re-enter
described in Rule 804(g)(1)(A)–(D)
automatically remove a Market Maker’s quotes in options series for options class
above, a market maker must provide a
quotes in all series of an options class. XYZ into the System.
market wide parameter by which the Example #2 is another example of the
For each series of an options class, the
Exchange will automatically remove a Percentage Threshold. Presume the
System will maintain a Vega counter,
which tracks the absolute value of Market Maker’s quotes in all classes following Order Book:
purchased contracts minus sold when, during a time period established In this example, assume Market
contracts. If the Vega counter exceeds by the Market Maker, the total number Maker #1 has Percentage Threshold set
the Vega Threshold established by the of quote removal events specified in at 100% with a Specified Time Period
Member, the System will automatically Rule 804(g)(1)(A)–(D) exceeds the over 5 seconds. Assume at 12:00:00,
remove a Market Maker’s quotes in all market wide parameter provided to the Market Maker #1 is quoting the XYZ 20
series of the options class. Exchange by the market maker. As is the strike calls at 1.00 (10)–1.20 (10). An
Proposed Rule 804(g)(2) provides case today, Market Makers may request incoming Order to buy 5 contracts for
more detail about the System’s current the Exchange to set the market wide 1.20 trades against Market Maker #1’s
operation with respect to quote removal. parameter to apply to just GEMX or quote. Based on this trade, the Series
The System will automatically remove across GEMX and Nasdaq ISE. Percentage Threshold calculation is 5/
quotes in all options in an underlying Below are some illustrative examples [(10)+(0)] = 5/10 = 50%. Since this is the
security when the Percentage of the Percentage and Volume risk only execution during the Time Period,
Threshold, Volume Threshold, Delta parameters. 50% also represents the Issue
Threshold or Vega Threshold has been Example #1: Describes the Percentage Percentage, therefore Market Maker #1’s
mstockstill on DSK30JT082PROD with NOTICES
exceeded. The System will send a Purge risk parameter. Presume the following quote is now 1.00 (10)–1.20 (5).
Notification Message to the Market Order Book: Next, assume at 12:00:01 an Incoming
Maker for all affected series when any Order to buy 2 contracts for 1.20 trades
Series of Size on bid x
of the above thresholds have been underlying XYZ offer for MM1 against Market Maker #1’s quote. Based
exceeded. The Percentage Threshold, on this trade, the Series Percentage
Volume Threshold, Delta Threshold and 100 Strike Call ...................... 300x300 Threshold calculation is 2/[(5)+(5)] = 2/
Vega Threshold are considered 100 Strike Put ....................... 50x50 10 = 20%. The Issue Percentage
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![34726 Federal Register / Vol. 82, No. 142 / Wednesday, July 26, 2017 / Notices
calculation is the sum of Series System; no further quotes will be open market and a national market
Percentages during the time period, or executed until re-entry. The Volume system, and, in general to protect
50% + 20% = 70%. Specified Time Period will be reset for investors and the public interest
Finally, presume Market Maker #1’s Market Maker #1 in options class XYZ because Market Makers are better able to
quote is now 1.00 (10)–1.20 (3). At and Market Maker #1 will need to send manage risks with this risk tool.
12:00:02, Market Maker #1 updates his a re-entry indicator in order to re-enter The Exchange further represents that
quote in the XYZ 20 strike calls to quotes in options series for options class its proposal will continue to operate
increase his offer size back to 10 XYZ into the System. consistently with the firm quote
contracts, 1.00 (10)–1.20 (10). An obligations of a broker-dealer pursuant
2. Statutory Basis to Rule 602 of Regulation NMS and that
incoming Order to buy 6 contracts for
1.20 trades against Market Maker #1’s The Exchange believes that its the functionality is mandatory.
quote. Based on this trade, the Series proposal is consistent with Section 6(b) Specifically, any interest that is
Percentage Threshold calculation: 6/ of the Act 6 in general, and furthers the executable against a market maker’s
[(10)+(7)] = 6/17 = 35.29%. The Issue objectives of Section 6(b)(5) of the Act 7 quotes that are received 8 by the
Percentage calculation is the sum of in particular, in that it is designed to Exchange prior to the time any of these
Series Percentages during the time promote just and equitable principles of functionalities are engaged will be
period, or 50% + 20% + 35.29% = trade, to remove impediments to and automatically executed at the price up
105.29%. In this scenario, Market perfect the mechanism of a free and to the market maker’s size, regardless of
Maler[sic] #1’s quotes are removed in all open market and a national market whether such execution results in
series of XYZ since his setting of 100% system, and, in general to protect executions in excess of the market
over 5 seconds has been exceeded. investors and the public interest, by maker’s pre-set parameters.
Example #3 describes the Volume memorializing, with greater detail, the
risk protections available to market B. Self-Regulatory Organization’s
Threshold. Presume the following Order Statement on Burden on Competition
Book: makers. The described Thresholds serve
to decrease risk and increase stability. The Exchange does not believe that
Size on bid x Additionally, because the Exchange the proposed rule change will impose
Series of underlying XYZ any burden on competition not
offer for MM1 offers these risk tools to market makers,
in order to encourage them to provide necessary or appropriate in furtherance
100 Strike Call ...................... 300x300 as much liquidity as possible and of the purposes of the Act. Specifically,
100 Strike Put ....................... 50x50 encourage market making generally, the the proposal will not impose a burden
110 Strike Call ...................... 200x200 on intra-market or inter-market
110 Strike Put ....................... 150x150
proposal removes impediments to and
perfects the mechanism of a free and competition, rather it provides market
In this example, assume the Specified open market and a national market makers with the continued opportunity
Time Period designated by the Market system and protects investors and the to avail themselves of risk tools. The
Maker #1 is 10 seconds and the public interest. The Exchange believes proposal does not impose a burden on
designated number of contracts that amending Rule 804(g) to add more inter-market competition, because
clarifying text, which explains in greater participants may choose to become
permitted for the Volume-Based
detail the manner in which the four market makers on a number of other
Threshold is 250 contracts. Assume at
Thresholds operate, will bring more options exchanges, which may have
12:00:00, the Market Maker #1 executes
similar but not identical features.9 The
all of his offer size, 200 contracts, in the transparency to the rule which serves to
protect investors and the public interest, proposed rule change is meant to
110 Strike Calls. The System will
because market makers will be more continue to protect market makers from
initiate the Specified Time Period and
inadvertent exposure to excessive risk.
for 10 seconds the System will count all informed about the manner in which the
functionality operates. Accordingly, the proposed rule change
volume executed in series of options
In addition, the Exchange’s proposal will have no impact on competition.
class XYZ. If at any point during that 10 The Exchange’s proposal to amend
to amend the current Percentage
second period, the Market Maker #1 Threshold to: (i) Calculate offsets; and the current Percentage Based risk
executes additional contracts in any (ii) calculate the Percentage Threshold feature to: (i) Calculate offsets; and (ii)
series of the options class XYZ, those during a Specified Time Period and for calculate the Percentage Threshold
contracts will be added to the initial each side in a given series, a percentage, during a Specified Time Period and for
execution of 200 contracts. To illustrate, by dividing the size of a Market Maker’s each side in a given series, a percentage,
assume at 12:00:05 the Market Maker # quote size executed in a particular series by dividing the size of a Market Maker’s
1 executes 60 contracts of his offer in (the numerator) by the Marker Maker’s quote size executed in a particular series
the 100 Strike Calls. The total volume quote size available at the time of (the numerator) by the Marker Maker’s
executed is now 260 contracts. Since execution plus the total number of the quote size available at the time of
that volume exceeds the Market Maker Market Marker’s quote size previously execution plus the total number of the
#1’s designated number of contracts for executed during the unexpired Market Marker’s quote size previously
the Volume Threshold (250 contracts), Specified Time Period, will provide executed during the unexpired
all of his quotes in all series of the Market Makers with greater precision in Specified Time Period, does not impose
options class XYZ over the Specialized calculating quoting risks. The Exchange an undue burden on competition and is
Quote Feed 5 will be removed from the believes that providing Market Makers non-controversial because the Exchange
with tools to calculate risk serves to offers a Percentage Threshold today.
mstockstill on DSK30JT082PROD with NOTICES
5 The Specialized Quote Feed interface that
perfect the mechanism of a free and The proposed changes to the Percentage
allows market makers to connect and send quotes,
sweeps and auction responses into GEMX. Data
includes the following: (1) Options Auction Option Trading Action Messages (e.g., halts, 8 The time of receipt is the time such message is
Notifications (e.g., opening imbalance, Flash, PIM, resumes); (5) Execution Messages; and (6) Quote processed by the Order Book.
Solicitation and Facilitation or other information); Messages (quote/sweep messages, risk protection 9 See BATS Rule 21.16, BOX Rules 8100 and
(2) Options Symbol Directory Messages; (3) System triggers or purge notifications). 8110, C2 Rule 8.12, CBOE Rule 8.18, MIAX Rule
6 15 U.S.C. 78f(b).
Event Messages (e.g., start of messages, start of 612, NYSE MKT Rule 928NY and NYSE Arca Rule
system hours, start of quoting, start of opening); (4) 7 15 U.S.C. 78f(b)(5). 6.40.
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![Federal Register / Vol. 82, No. 142 / Wednesday, July 26, 2017 / Notices 34727
risk tool simply add more precision to At any time within 60 days of the 2017–32, and should be submitted on or
the existing calculation to permit filing of the proposed rule change, the before August 16, 2017.
Marker Makers to better control their Commission summarily may For the Commission, by the Division of
risk with respect to quoting. temporarily suspend such rule change if Trading and Markets, pursuant to delegated
Further, the Exchange is it appears to the Commission that such authority.13
memorializing more detail concerning action is necessary or appropriate in the Eduardo A. Aleman,
the function of the Thresholds with this public interest; for the protection of Assistant Secretary.
rule proposal and making clear the investors; or otherwise in furtherance of [FR Doc. 2017–15629 Filed 7–25–17; 8:45 am]
method in which the Percentage risk the purposes of the Act.
BILLING CODE 8011–01–P
tool is calculated. The risk tools will
continue to reduce risk for market IV. Solicitation of Comments
makers in the event of a systems issue Interested persons are invited to
submit written data, views, and SECURITIES AND EXCHANGE
or due to the occurrence of unusual or
arguments concerning the foregoing, COMMISSION
unexpected market activity.
including whether the proposed rule [Release No. 34–81181; File No. SR–ISE–
C. Self-Regulatory Organization’s change is consistent with the Act. 2017–52]
Statement on Comments on the Comments may be submitted by any of
Proposed Rule Change Received From the following methods: Self-Regulatory Organizations; Nasdaq
Members, Participants, or Others ISE, LLC; Notice of Designation of a
No written comments were either Electronic Comments Longer Period for Commission Action
solicited or received. • Use the Commission’s Internet on a Proposed Rule Change To Adopt
comment form (http://www.sec.gov/ Rule 912
III. Date of Effectiveness of the rules/sro.shtml); or
Proposed Rule Change and Timing for • Send an email to rule-comments@ July 20, 2017.
Commission Action sec.gov. Please include File Number SR– On June 9, 2017, Nasdaq ISE, LLC
Because the foregoing proposed rule GEMX–2017–32 on the subject line. (‘‘ISE’’ or the ‘‘Exchange’’) filed with the
change does not: (i) Significantly affect Securities and Exchange Commission
Paper Comments (‘‘Commission’’), pursuant to Section
the protection of investors or the public
interest; (ii) impose any significant • Send paper comments in triplicate 19(b)(1) of the Securities Exchange Act
burden on competition; and (iii) become to Secretary, Securities and Exchange of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and
operative for 30 days from the date on Commission, 100 F Street NE., Rule 19b–4 thereunder,2 a proposed rule
which it was filed, or such shorter time Washington, DC 20549–1090. change to adopt Rule 912 (Consolidated
as the Commission may designate, it has All submissions should refer to File Audit Trail—Fee Dispute Resolution).
become effective pursuant to Section Number SR–GEMX–2017–32. This file The proposed rule change was
19(b)(3)(A)(iii) of the Act 10 and number should be included on the published for comment in the Federal
subparagraph (f)(6) of Rule 19b–4 subject line if email is used. To help the Register on June 23, 2017.3 The
thereunder.11 Commission process and review your Commission received no comment
In its filing, GEMX requests that the comments more efficiently, please use letters on the proposed rule change.
Commission waive the 30-day operative only one method. The Commission will Section 19(b)(2) of the Act 4 provides
delay in order to enable the Exchange to post all comments on the Commission’s that, within 45 days of the publication
accurately reflect in its rules the Internet Web site (http://www.sec.gov/ of notice of the filing of a proposed rule
operation of its risk parameters since the rules/sro.shtml). Copies of the change, or within such longer period up
migration to the INET platform. submission, all subsequent to 90 days as the Commission may
Although the Exchange proposes certain amendments, all written statements designate if it finds such longer period
technical changes to how the risk with respect to the proposed rule to be appropriate and publishes its
parameters will operate (e.g., limiting change that are filed with the reasons for so finding or as to which the
the Specified Time Period to 30 Commission, and all written self-regulatory organization consents,
seconds), the proposed changes are communications relating to the the Commission shall either approve the
largely intended to provide more detail proposed rule change between the proposed rule change, disapprove the
about the operation of the existing risk Commission and any person, other than proposed rule change, or institute
parameters. Accordingly, the those that may be withheld from the proceedings to determine whether the
Commission believes that granting a public in accordance with the proposed rule change should be
waiver of the operative delay is provisions of 5 U.S.C. 552, will be disapproved. The Commission is
consistent with the protection of available for Web site viewing and extending this 45-day time period.
investors and the public interest and printing in the Commission’s Public The Commission finds that it is
therefore designates the proposed rule Reference Room, 100 F Street NE., appropriate to designate a longer period
change to be operative upon filing.12 Washington, DC 20549, on official within which to take action on the
business days between the hours of proposed rule change so that it has
10 15 U.S.C. 78s(b)(3)(A)(iii). 10:00 a.m. and 3:00 p.m. Copies of the sufficient time to consider the proposed
11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
filing also will be available for rule change. The proposed rule change
4(f)(6) requires a self-regulatory organization to give would establish the procedures for
the Commission written notice of its intent to file inspection and copying at the principal
the proposed rule change at least five business days office of the Exchange. All comments resolving potential disputes related to
mstockstill on DSK30JT082PROD with NOTICES
prior to the date of filing of the proposed rule received will be posted without change; CAT Fees charged to Industry Members.
change, or such shorter time as designated by the
Commission. The Exchange has satisfied this the Commission does not edit personal 13 17 CFR 200.30–3(a)(12).
requirement. identifying information from 1 15 U.S.C. 78s(b)(1).
12 For purposes only of waiving the 30-day
submissions. You should submit only 2 17 CFR 240.19b–4.
operative delay, the Commission has also information that you wish to make 3 Securities Exchange Act Release No. 80971
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See available publicly. All submissions (June 19, 2017), 82 FR 28698 (‘‘Notice’’).
15 U.S.C. 78c(f). should refer to File Number SR–GEMX– 4 15 U.S.C. 78s(b)(2).
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Document Created: 2017-07-26 01:30:21
Document Modified: 2017-07-26 01:30:21
| 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 34723 |
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