82 FR 37964 - Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Exchange's Pricing Schedule With Respect to the Options Regulatory Fee
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 155 (August 14, 2017)
Federal Register Volume 82, Issue 155 (August 14, 2017)
| Page Range | 37964-37966 | |
| FR Document | 2017-17048 |
[Federal Register Volume 82, Number 155 (Monday, August 14, 2017)] [Notices] [Pages 37964-37966] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-17048] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-81343; File No. SR-Phlx-2017-54] Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Exchange's Pricing Schedule With Respect to the Options Regulatory Fee August 8, 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 26, 2017, NASDAQ PHLX LLC (``Phlx'' or ``Exchange'') filed with the Securities and Exchange Commission (``SEC'' or ``Commission'') the proposed rule change as described in Items I, II, and III, 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 revise Section IV, Part D of the Pricing Schedule to more closely reflect the manner in which Phlx assesses and collects its Options Regulatory Fee (``ORF''). The text of the proposed rule change is available on the Exchange's Web site at http://nasdaqphlx.cchwallstreet.com/ 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 the Statutory Basis for, the Proposed Rule Change 1. Purpose Phlx initially filed to establish its ORF in 2009.\3\ The Exchange has amended its ORF several times since the inception of this fee.\4\ At this time, the Exchange proposes to revise Section IV, Part D of the Pricing Schedule to more closely reflect the manner in which Phlx assesses and collects its ORF. --------------------------------------------------------------------------- \3\ See Securities Exchange Act Release No. 61133 (December 9, 2009), 74 FR 66715 (December 16, 2009) (SR-Phlx-2009-100) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to an Options Regulatory Fee). \4\ See Securities Exchange Act Release Nos. 61529 (February 17, 2010), 75 FR 8421 (February 24, 2010) (SR-Phlx-2010-17); 62619 (July 30, 2010), 75 FR 47874 (August 9, 2010) (SR-Phlx-2010-100); 63436 (December 6, 2010), 75 FR 77021 (December 10, 2010) (SR-Phlx-2010- 166); 65897 (December 6, 2011), 76 FR 77277 (December 12, 2011) (SR- Phlx-2011-163); 66664 (March 27, 2012), 77 FR 19743 (April 2, 2012) (SR-Phlx-2012-36); 71569 (February 19, 2014), 79 FR 10593 (February 25, 2014) (SR-Phlx-2014-12); 75749 (August 21, 2015), 80 FR 52073 (August 27, 2017) (SR-Phlx-2015-71); 77032 (February 2, 2016), 81 FR 6560 (February 8, 2016) (SR-Phlx-2016-04); and 79751 (January 6, 2017), 82 FR 3826 (January 12, 2017) (SR-Phlx-2017-02). --------------------------------------------------------------------------- The Exchange supports a common approach for the assessment and collection of ORF among the various options exchanges that assess such a fee. Furthermore, the Exchange supports guidance from the Commission regarding regulatory cost structures to ensure equal knowledge and treatment among options markets assessing ORF. The Exchange assesses an ORF of $0.0045 per contract side. This proposed rule change does not seek to amend the amount of the ORF. Currently, Phlx assesses its ORF for each Customer option transaction that is either: (1) Executed by a member \5\ on Phlx; or (2) cleared by a Phlx member at The Options Clearing Corporation (``OCC'') in the Customer range,\6\ even if the transaction was executed by a non-member of Phlx, regardless of the exchange on which the transaction occurs.\7\ If the OCC clearing member is a Phlx member, ORF is assessed and collected on all cleared Customer contracts (after adjustment for CMTA \8\); and (2) if the OCC clearing member is not a Phlx member, ORF is collected only on the cleared Customer contracts executed at Phlx, taking into account any CMTA instructions which may result in collecting the ORF from a non-member. --------------------------------------------------------------------------- \5\ For purposes of this filing the term ``member'' shall mean either a ``member'' or a ``member organization.'' \6\ Exchange Rules require each member to record the appropriate account origin code on all orders at the time of entry in order to allow the Exchange to properly prioritize and route orders and assess transaction fees pursuant to the Rules of the Exchange and report resulting transactions to OCC. The Exchange represents that it has surveillances in place to verify that members mark orders with the correct account origin code. \7\ The Exchange uses reports from OCC when assessing and collecting the ORF. \8\ CMTA or Clearing Member Trade Assignment is a form of ``give-up'' whereby the position will be assigned to a specific clearing firm at OCC. Phlx Rule 1052 provides that every Clearing Member is responsible for the clearance of the Exchange options transactions of such Clearing Member and of each member who gives up the name of such Clearing Member in an Exchange options transaction, provided the Clearing Member has authorized such member to give up its name with respect to Exchange options transactions. --------------------------------------------------------------------------- By way of example, if Broker A, a Phlx member, routes a Customer order to CBOE and the transaction executes on CBOE and clears in Broker A's OCC Clearing account, ORF will be collected by Phlx from Broker A's clearing account at OCC via direct debit. While this transaction was executed on a market other than Phlx, it was cleared by a Phlx member in the member's OCC clearing account in the Customer range, therefore there is a regulatory nexus between Phlx and the transaction. If Broker A was not a Phlx member, then no ORF should be assessed and collected because there is no nexus; the [[Page 37965]] transaction did not execute on Phlx nor was it cleared by a Phlx member. In the case where a member both executes a transaction and clears the transaction, the ORF is assessed to and collected from the member only once. In the case where a member executes a transaction and a different member clears the transaction, the ORF is assessed to and collected from the member who clears the transaction and not the member who executes the transaction. In the case where a non-member executes a transaction at an away market and a member clears the transaction, the ORF is assessed to and collected from the member who clears the transaction. In the case where a member executes a transaction on Phlx and a non-member clears the transaction, the ORF is assessed to the member that executed the transaction and collected from the non-member who cleared the transaction. In the case where a member executes a transaction at an away market and a non-member clears the transaction, the ORF is not assessed to the member who executed the transaction or collected from the non-member who cleared the transaction because the Exchange does not have access to the data to make absolutely certain that ORF should apply. Further, the data does not allow the Exchange to identify the member executing the trade at an away market. ORF Revenue and Monitoring of ORF The Exchange monitors the amount of revenue collected from the ORF to ensure that it, in combination with other regulatory fees and fines, does not exceed regulatory costs. In determining whether an expense is considered a regulatory cost, the Exchange reviews all costs and makes determinations if there is a nexus between the expense and a regulatory function. For example, a cost related to PSX, the Exchange's equity platform, would not be considered an expense that is compared to ORF revenue. An options surveillance employee's cost, however would be an expense that is compared to ORF revenue. The Exchange notes that fines collected by the Exchange in connection with a disciplinary manner offset ORF. The ORF is designed to recover a material portion of the costs to the Exchange of the supervision and regulation of its members, including performing routine surveillances, investigations, examinations, financial monitoring, and policy, rulemaking, interpretive, and enforcement activities. The Exchange believes that revenue generated from the ORF, when combined with all of the Exchange's other regulatory fees, will cover a material portion, but not all, of the Exchange's regulatory costs. The Exchange will continue to monitor the amount of revenue collected from the ORF to ensure that it, in combination with its other regulatory fees and fines, does not exceed regulatory costs. If the Exchange determines regulatory revenues exceed regulatory costs, the Exchange will adjust the ORF by submitting a fee change filing to the Commission. Finally, the Exchange notes that it is amending its rule text at Section IV, Part D to remove outdated rule text and include new rule text to make clear the manner in which ORF is assessed and collected on Phlx. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act \9\ in general, and furthers the objectives of Sections 6(b)(4) and 6(b)(5) of the Act\10\ 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 its facility and is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. --------------------------------------------------------------------------- \9\ 15 U.S.C. 78f(b). \10\ 15 U.S.C. 78f(b)(4) and (5). --------------------------------------------------------------------------- The Exchange believes the proposed clarifications in the Fee Schedule to the ORF further the objectives of Section 6(b)(4) of the Act and are equitable and reasonable since they expressly describe the Exchange's existing practices regarding the manner in which the Exchange assesses and collects its ORF. The Exchange believes it is reasonable and appropriate for the Exchange to charge the ORF for options transactions regardless of the exchange on which the transactions occur. The Exchange has a statutory obligation to enforce compliance by members and their associated persons under the Act and the rules of the Exchange and to surveil for other manipulative conduct by market participants (including non- members) trading on the Exchange. The Exchange cannot effectively surveil for such conduct without looking at and evaluating activity across all options markets. Many of the Exchange's market surveillance programs require the Exchange to look at and evaluate activity across all options markets, such as surveillance for position limit violations, manipulation, front-running and contrary exercise advice violations/expiring exercise declarations. The Exchange, because it lacks access to information on the identity of the entering firm for executions that occur on away markets, believes it is appropriate to assess the ORF on its member's clearing activity, based on information the Exchange receives from OCC, including for away market activity. Among other reasons, doing so better and more accurately captures activity that occurs away from the Exchange over which the Exchange has a degree of regulatory responsibility. In so doing, the Exchange believes that assessing ORF on member clearing firms in certain instances equitably distributes the collection of ORF in a fair and reasonable manner. Also, the Exchange and the other options exchanges are required to populate a consolidated options audit trail (``COATS'') \11\ system in order to surveil a member's activities across markets.\12\ --------------------------------------------------------------------------- \11\ COATS effectively enhances intermarket options surveillance by enabling the options exchanges to reconstruct the market promptly to effectively surveil certain rules. \12\ In addition to its own surveillance programs, the Exchange works with other SROs and exchanges on intermarket surveillance related issues. Through its participation in the Intermarket Surveillance Group (``ISG''), the Exchange shares information and coordinates inquiries and investigations with other exchanges designed to address potential intermarket manipulation and trading abuses. The Exchange's participation in ISG helps it to satisfy the requirement that it has coordinated surveillance with markets on which security futures are traded and markets on which any security underlying security futures are traded to detect manipulation and insider trading. See Section 6(h)(3)(I) of the Act. ISG is an industry organization formed in 1983 to coordinate intermarket surveillance among the SROs by co-operatively sharing regulatory information pursuant to a written agreement between the parties. The goal of the ISG's information sharing is to coordinate regulatory efforts to address potential intermarket trading abuses and manipulations. --------------------------------------------------------------------------- The Exchange believes that assessing the ORF to each Exchange member for options transactions cleared by OCC in the Customer range where the execution occurs on another exchange and is cleared by a Phlx member is an equitable allocation of reasonable dues, fees, and other charges among its members and issuers and other persons using its facilities. The ORF is collected by OCC on behalf of Phlx from Exchange clearing members for all Customer transactions they clear or from non- members for all Customer transactions they clear that were executed on Phlx. The Exchange believes that this collection practice is reasonable and appropriate because higher fees are assessed to those members that require more Exchange regulatory services based on the amount of Customer options business they conduct. Regulating Customer trading activity is more labor intensive and requires greater expenditure of human and [[Page 37966]] technical resources than regulating non-Customer trading activity, which tends to be more automated and less labor intensive. As a result, the costs associated with administering the Customer component of the Exchange's overall regulatory program are anticipated to be typically higher than the costs associated with administering the non-Customer component of its regulatory program. The Exchange proposes assessing higher fees to those members that will require more Exchange regulatory services based on the amount of Customer options business they conduct. Additionally, the dues and fees paid by members go into the general funds of the Exchange, a portion of which is used to help pay the costs of regulation. The Exchange has in place a regulatory structure to surveil, conduct examinations and monitor the marketplace for violations of Exchange Rules. The ORF assists the Exchange to fund the cost of this regulation of the marketplace. B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The ORF is not intended to have any impact on competition. Rather, it is designed to enable the Exchange to recover a material portion of the Exchange's cost related to its regulatory activities. The Exchange is obligated to ensure that the amount of regulatory revenue collected from the ORF, in combination with its other regulatory fees and fines, does not exceed regulatory costs. 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.\13\ --------------------------------------------------------------------------- \13\ 15 U.S.C. 78s(b)(3)(A)(ii). --------------------------------------------------------------------------- At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File No. SR-Phlx-2017-54 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 No. SR-Phlx-2017-54. 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 No. SR-Phlx-2017-54, and should be submitted on or before September 5, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\14\ --------------------------------------------------------------------------- \14\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-17048 Filed 8-11-17; 8:45 am] BILLING CODE 8011-01-P
![37964 Federal Register / Vol. 82, No. 155 / Monday, August 14, 2017 / Notices
Internet Web site (http://www.sec.gov/ solicit comments on the proposed rule collection of ORF among the various
rules/sro.shtml). Copies of the change from interested persons. options exchanges that assess such a fee.
submission, all subsequent Furthermore, the Exchange supports
I. Self-Regulatory Organization’s
amendments, all written statements guidance from the Commission
Statement of the Terms of Substance of
with respect to the proposed rule regarding regulatory cost structures to
the Proposed Rule Change
change that are filed with the ensure equal knowledge and treatment
Commission, and all written The Exchange proposes to revise among options markets assessing ORF.
communications relating to the Section IV, Part D of the Pricing The Exchange assesses an ORF of
proposed rule change between the Schedule to more closely reflect the $0.0045 per contract side. This
Commission and any person, other than manner in which Phlx assesses and proposed rule change does not seek to
those that may be withheld from the collects its Options Regulatory Fee amend the amount of the ORF.
public in accordance with the (‘‘ORF’’). Currently, Phlx assesses its ORF for
provisions of 5 U.S.C. 552, will be The text of the proposed rule change each Customer option transaction that is
available for Web site viewing and is available on the Exchange’s Web site either: (1) Executed by a member 5 on
printing in the Commission’s Public at http://nasdaqphlx.cchwallstreet. Phlx; or (2) cleared by a Phlx member
Reference Room, 100 F Street NE., com/, at the principal office of the at The Options Clearing Corporation
Washington, DC 20549 on official Exchange, and at the Commission’s (‘‘OCC’’) in the Customer range,6 even if
business days between the hours of Public Reference Room. the transaction was executed by a non-
10:00 a.m. and 3:00 p.m. Copies of such II. Self-Regulatory Organization’s member of Phlx, regardless of the
filing also will be available for Statement of the Purpose of, and exchange on which the transaction
inspection and copying at the principal Statutory Basis for, the Proposed Rule occurs.7 If the OCC clearing member is
office of the Exchange. All comments Change a Phlx member, ORF is assessed and
received will be posted without change; collected on all cleared Customer
the Commission does not edit personal In its filing with the Commission, the
contracts (after adjustment for CMTA 8);
identifying information from Exchange included statements
and (2) if the OCC clearing member is
submissions. You should submit only concerning the purpose of and basis for
not a Phlx member, ORF is collected
information that you wish to make the proposed rule change and discussed
only on the cleared Customer contracts
available publicly. All submissions any comments it received on the
executed at Phlx, taking into account
should refer to File Number SR–GEMX– proposed rule change. The text of these
any CMTA instructions which may
2017–36, and should be submitted on or statements may be examined at the
result in collecting the ORF from a non-
before September 5, 2017. places specified in Item IV below. The
member.
Exchange has prepared summaries, set
For the Commission, by the Division of By way of example, if Broker A, a
forth in sections A, B, and C below, of
Trading and Markets, pursuant to delegated Phlx member, routes a Customer order
the most significant aspects of such
authority.26 to CBOE and the transaction executes on
statements.
Eduardo A. Aleman, CBOE and clears in Broker A’s OCC
Assistant Secretary. A. Self-Regulatory Organization’s Clearing account, ORF will be collected
[FR Doc. 2017–17069 Filed 8–11–17; 8:45 am] Statement of the Purpose of, and the by Phlx from Broker A’s clearing
BILLING CODE 8011–01–P
Statutory Basis for, the Proposed Rule account at OCC via direct debit. While
Change this transaction was executed on a
1. Purpose market other than Phlx, it was cleared
SECURITIES AND EXCHANGE by a Phlx member in the member’s OCC
COMMISSION Phlx initially filed to establish its ORF clearing account in the Customer range,
in 2009.3 The Exchange has amended its therefore there is a regulatory nexus
[Release No. 34–81343; File No. SR–Phlx– ORF several times since the inception of between Phlx and the transaction. If
2017–54] this fee.4 At this time, the Exchange Broker A was not a Phlx member, then
proposes to revise Section IV, Part D of no ORF should be assessed and
Self-Regulatory Organizations;
the Pricing Schedule to more closely collected because there is no nexus; the
NASDAQ PHLX LLC; Notice of Filing
reflect the manner in which Phlx
and Immediate Effectiveness of
assesses and collects its ORF. 5 For purposes of this filing the term ‘‘member’’
Proposed Rule Change To Amend the The Exchange supports a common shall mean either a ‘‘member’’ or a ‘‘member
Exchange’s Pricing Schedule With approach for the assessment and organization.’’
Respect to the Options Regulatory Fee 6 Exchange Rules require each member to record
3 See Securities Exchange Act Release No. 61133 the appropriate account origin code on all orders at
August 8, 2017. the time of entry in order to allow the Exchange to
(December 9, 2009), 74 FR 66715 (December 16,
Pursuant to Section 19(b)(1) of the 2009) (SR–Phlx–2009–100) (Notice of Filing and properly prioritize and route orders and assess
Securities Exchange Act of 1934 Immediate Effectiveness of Proposed Rule Change transaction fees pursuant to the Rules of the
(‘‘Act’’) 1, and Rule 19b–4 thereunder,2 Relating to an Options Regulatory Fee). Exchange and report resulting transactions to OCC.
4 See Securities Exchange Act Release Nos. 61529 The Exchange represents that it has surveillances in
notice is hereby given that on July 26, place to verify that members mark orders with the
(February 17, 2010), 75 FR 8421 (February 24, 2010)
2017, NASDAQ PHLX LLC (‘‘Phlx’’ or (SR–Phlx–2010–17); 62619 (July 30, 2010), 75 FR correct account origin code.
‘‘Exchange’’) filed with the Securities 47874 (August 9, 2010) (SR–Phlx–2010–100); 63436
7 The Exchange uses reports from OCC when
and Exchange Commission (‘‘SEC’’ or (December 6, 2010), 75 FR 77021 (December 10, assessing and collecting the ORF.
8 CMTA or Clearing Member Trade Assignment is
‘‘Commission’’) the proposed rule 2010) (SR–Phlx–2010–166); 65897 (December 6,
2011), 76 FR 77277 (December 12, 2011) (SR–Phlx– a form of ‘‘give-up’’ whereby the position will be
sradovich on DSK3GMQ082PROD with NOTICES
change as described in Items I, II, and 2011–163); 66664 (March 27, 2012), 77 FR 19743 assigned to a specific clearing firm at OCC. Phlx
III, below, which Items have been (April 2, 2012) (SR–Phlx–2012–36); 71569 Rule 1052 provides that every Clearing Member is
prepared by the Exchange. The (February 19, 2014), 79 FR 10593 (February 25, responsible for the clearance of the Exchange
Commission is publishing this notice to 2014) (SR–Phlx–2014–12); 75749 (August 21, 2015), options transactions of such Clearing Member and
80 FR 52073 (August 27, 2017) (SR–Phlx–2015–71); of each member who gives up the name of such
77032 (February 2, 2016), 81 FR 6560 (February 8, Clearing Member in an Exchange options
26 17 CFR 200.30–3(a)(12). 2016) (SR–Phlx–2016–04); and 79751 (January 6, transaction, provided the Clearing Member has
1 15 U.S.C. 78s(b)(1). 2017), 82 FR 3826 (January 12, 2017) (SR–Phlx– authorized such member to give up its name with
2 17 CFR 240.19b–4. 2017–02). respect to Exchange options transactions.
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![37966 Federal Register / Vol. 82, No. 155 / Monday, August 14, 2017 / Notices
technical resources than regulating non- If the Commission takes such action, the For the Commission, by the Division of
Customer trading activity, which tends Commission shall institute proceedings Trading and Markets, pursuant to delegated
to be more automated and less labor to determine whether the proposed rule authority.14
intensive. As a result, the costs should be approved or disapproved. Eduardo A. Aleman,
associated with administering the Assistant Secretary.
IV. Solicitation of Comments
Customer component of the Exchange’s [FR Doc. 2017–17048 Filed 8–11–17; 8:45 am]
overall regulatory program are Interested persons are invited to BILLING CODE 8011–01–P
anticipated to be typically higher than submit written data, views, and
the costs associated with administering arguments concerning the foregoing,
the non-Customer component of its including whether the proposed rule SECURITIES AND EXCHANGE
regulatory program. The Exchange change is consistent with the Act. COMMISSION
proposes assessing higher fees to those Comments may be submitted by any of [Release No. 34–81350; File No. SR–ISE–
members that will require more the following methods: 2017–77]
Exchange regulatory services based on
the amount of Customer options Electronic Comments
Self-Regulatory Organizations; Nasdaq
business they conduct. Additionally, the • Use the Commission’s Internet ISE, LLC; Notice of Filing and
dues and fees paid by members go into comment form (http://www.sec.gov/ Immediate Effectiveness of Proposed
the general funds of the Exchange, a rules/sro.shtml); or Rule Change To Amend Its Schedule of
portion of which is used to help pay the • Send an email to rule-comments@ Fees
costs of regulation. The Exchange has in sec.gov. Please include File No. SR–
place a regulatory structure to surveil, August 8, 2017.
Phlx–2017–54 on the subject line. Pursuant to Section 19(b)(1) of the
conduct examinations and monitor the
marketplace for violations of Exchange Paper Comments Securities Exchange Act of 1934
Rules. The ORF assists the Exchange to (‘‘Act’’),1 and Rule 19b–4 thereunder,2
• Send paper comments in triplicate notice is hereby given that on August 1,
fund the cost of this regulation of the
to Secretary, Securities and Exchange 2017, Nasdaq ISE, LLC (‘‘ISE’’ or
marketplace.
Commission, 100 F Street NE., ‘‘Exchange’’) filed with the Securities
B. Self-Regulatory Organization’s Washington, DC 20549–1090. and Exchange Commission (‘‘SEC’’ or
Statement on Burden on Competition All submissions should refer to File No. ‘‘Commission’’) the proposed rule
The Exchange does not believe that SR–Phlx–2017–54. This file number change as described in Items I and II,
the proposed rule change will impose should be included on the subject line below, which Items have been prepared
any burden on competition not if email is used. To help the by the Exchange. The Commission is
necessary or appropriate in furtherance Commission process and review your publishing this notice to solicit
of the purposes of the Act. The ORF is comments more efficiently, please use comments on the proposed rule change
not intended to have any impact on only one method. The Commission will from interested persons.
competition. Rather, it is designed to post all comments on the Commission’s I. Self-Regulatory Organization’s
enable the Exchange to recover a Internet Web site (http://www.sec.gov/ Statement of the Terms of Substance of
material portion of the Exchange’s cost rules/sro.shtml). Copies of the the Proposed Rule Change
related to its regulatory activities. The submission, all subsequent
Exchange is obligated to ensure that the amendments, all written statements The Exchange proposes to amend its
amount of regulatory revenue collected with respect to the proposed rule Schedule of Fees to (1) eliminate
from the ORF, in combination with its change that are filed with the Priority Customer complex order rebates
other regulatory fees and fines, does not Commission, and all written for all net zero complex orders without
exceed regulatory costs. communications relating to the any associated average daily volume
proposed rule change between the requirement, and (2) reduce the maker
C. Self-Regulatory Organization’s fee charged to Market Makers and Non-
Statement on Comments on the Commission and any person, other than
those that may be withheld from the Nasdaq ISE Market Makers for Regular
Proposed Rule Change Received From Orders in Select Symbols when trading
Members, Participants, or Others public in accordance with the
provisions of 5 U.S.C. 552, will be against Priority Customer complex
No written comments were either available for Web site viewing and orders that leg into the regular order
solicited or received. printing in the Commission’s Public book.
III. Date of Effectiveness of the Reference Room, 100 F Street NE., The text of the proposed rule change
Proposed Rule Change and Timing for Washington, DC 20549, on official is available on the Exchange’s Web site
Commission Action business days between the hours of at www.ise.com, at the principal office
10:00 a.m. and 3:00 p.m. Copies of the of the Exchange, and at the
The foregoing rule change has become Commission’s Public Reference Room.
filing also will be available for
effective pursuant to Section
inspection and copying at the principal II. Self-Regulatory Organization’s
19(b)(3)(A)(ii) of the Act.13
At any time within 60 days of the office of the Exchange. All comments Statement of the Purpose of, and
filing of the proposed rule change, the received will be posted without change; Statutory Basis for, the Proposed Rule
Commission summarily may the Commission does not edit personal Change
identifying information from
sradovich on DSK3GMQ082PROD with NOTICES
temporarily suspend such rule change if In its filing with the Commission, the
it appears to the Commission that such submissions. You should submit only
information that you wish to make Exchange included statements
action is: (i) Necessary or appropriate in concerning the purpose of and basis for
the public interest; (ii) for the protection available publicly.
the proposed rule change and discussed
of investors; or (iii) otherwise in All submissions should refer to File No.
furtherance of the purposes of the Act. SR–Phlx–2017–54, and should be 14 17 CFR 200.30–3(a)(12).
submitted on or before September 5, 1 15 U.S.C. 78s(b)(1).
13 15 U.S.C. 78s(b)(3)(A)(ii). 2017. 2 17 CFR 240.19b–4.
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Document Created: 2018-10-24 11:50:24
Document Modified: 2018-10-24 11:50:24
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