82 FR 37971 - Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend GEMX's Schedule of Fees With Respect to the Options Regulatory Fee

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 155 (August 14, 2017)

Page Range		37971-37973
FR Document		2017-17047
Federal Register, Volume 82 Issue 155 (Monday, August 14, 2017)
[Federal Register Volume 82, Number 155 (Monday, August 14, 2017)]
[Notices]
[Pages 37971-37973]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-17047]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81342; File No. SR-GEMX-2017-31]


Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend GEMX's 
Schedule of Fees 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 GEMX, LLC (``GEMX'' 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to revise GEMX's Schedule of Fees to: (i) 
More closely reflect the manner in which GEMX assesses and collects its 
ORF; and (ii) remove rule text related to the timing when the Exchange 
may increase or decrease the amount of the ORF.
    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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    GEMX initially filed to establish its ORF in 2013.\3\ At this time, 
the Exchange proposes to: (i) More closely reflect the manner in which 
GEMX assesses and collects its ORF; and (ii) remove rule text related 
to the timing when the Exchange may increase or decrease the amount of 
its ORF.
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    \3\ See Securities Exchange Act Release Nos. 70200 (August 14, 
2013), 74 FR 51242 (August 20, 2013) (SR-Topaz-2013-01) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change to 
Establish the Schedule of Fees).
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    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.
Proposal 1--Reflect the Manner in Which GEMX Assesses and Collects Its 
ORF
    Currently, GEMX assesses an ORF of $0.0010 per contract side. This 
proposed rule change does not seek to amend the amount of the ORF. 
Currently, GEMX assesses its ORF for each customer option transaction 
that is either: (1) Executed by a member on GEMX; or (2) cleared by a 
GEMX member at The Options Clearing Corporation (``OCC'') in the 
customer range,\4\ even if the transaction was executed by a non-member 
of GEMX, regardless of the exchange on which the transaction occurs.\5\ 
If the OCC clearing member is a GEMX member, ORF is assessed and 
collected on all cleared customer contracts (after adjustment for CMTA 
\6\); and (2) if the OCC clearing member is not a GEMX member, ORF is 
collected only on the cleared customer contracts executed at GEMX, 
taking into account any CMTA instructions which may result in 
collecting the ORF from a non-member.
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    \4\ Members must record the appropriate account origin code on 
all orders at the time of entry in order. The Exchange represents 
that it has surveillances in place to verify that members mark 
orders with the correct account origin code.
    \5\ The Exchange uses reports from OCC when assessing and 
collecting the ORF.
    \6\ 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.
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    By way of example, if Broker A, a GEMX 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 GEMX from Broker A's 
clearing account at OCC via direct debit. While this transaction was 
executed on a market other than GEMX, it was cleared by a GEMX member 
in the member's OCC clearing account in the customer range, therefore 
there is a regulatory nexus between GEMX and the transaction. If Broker 
A was not a GEMX member, then no ORF should be assessed and collected 
because there is no nexus; the transaction did not execute on GEMX nor 
was it cleared by a GEMX 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. 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 GEMX 
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

[[Page 37972]]

and a regulatory function. 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 GEMX's Schedule of 
Fees to remove certain rule text and include new rule text to make 
clear the manner in which ORF is assessed and collected on GEMX.
Proposal 2--Semi-Annual Changes to ORF
    The Exchange's current ORF rule text provides that, ``The Exchange 
may only increase or decrease the Options Regulatory Fee semi-annually, 
and any such fee change will be effective on the first business day of 
February or August.'' The Exchange is proposing to eliminate the 
requirement that its ORF may be only increased or decreased semi-
annually because the Exchange believes it requires the flexibility to 
amend its ORF as needed to meet its regulatory requirements and adjust 
its ORF to account for the regulatory revenue that it receives and the 
costs that it incurs. While the Exchange is eliminating the requirement 
to adjust only semi-annually, it will continue to submit a rule 
proposal with the Commission for each modification to the ORF and 
notify participants via an Options Trader Alert of any proposed change 
in the amount of the fee at least thirty (30) calendar days prior to 
the effective date. The Exchange believes that the prior notification 
to market participants will provide guidance on the timing of any 
changes to the ORF and ensure market participants are prepared to 
configure their systems to properly account for the ORF.
    The Exchange also notes it now issues Options Trader Alerts instead 
of circulars to provide notification to members. The Exchange is 
amending the rule text to reflect this change.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \7\ in general, and furthers the objectives of Sections 
6(b)(4) and 6(b)(5) of the Act \8\ 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.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4) and (5).
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    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.
Proposal 1--Reflect the Manner in Which GEMX 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'') 
\9\ system in order to surveil a member's activities across 
markets.\10\
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    \9\ COATS effectively enhances intermarket options surveillance 
by enabling the options exchanges to reconstruct the market promptly 
to effectively surveil certain rules.
    \10\ 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.
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    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 GEMX 
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 GEMX from Exchange 
clearing members for all customer transactions they clear or from non-
members for all customer transactions they clear that were executed on 
GEMX. 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 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

[[Page 37973]]

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.
Proposal 2--Semi-Annual Changes to ORF
    The Exchange believes that the proposed rule change to remove the 
limit to amend the ORF only semi-annually, with advance notice, is 
reasonable because the Exchange will continue to provide market 
participants with thirty (30) days advance notice of amending the 
amount of the ORF. Also, the Exchange is required to monitor the amount 
of revenue collected from the ORF to ensure that it, in combination 
with its other regulatory fees and fines, do not exceed regulatory 
costs. Therefore, the Exchange believes it is reasonable to remove the 
semi-annual limit to amend its ORF in order to permit the Exchange to 
make amendments to its ORF as necessary to comply with the Exchange's 
obligations. This proposed change would conform this rule with that of 
NASDAQ PHLX LLC (``Phlx''), The NASDAQ Options Market LLC (``NOM'') and 
NASDAQ BX, Inc. (``BX'').\11\
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    \11\ See Phlx's Pricing Schedule and NOM and BX Rules at Chapter 
XV, Sections 5.
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    The Exchange believes that the proposed rule change to remove the 
limit to amend the ORF only semi-annually, with advance notice, is 
equitable and not unfairly discriminatory because it will apply in the 
same manner to all members that are subject to the ORF. The Exchange 
has in place a regulatory structure to surveil for, 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.\12\ At any time within 60 days of the 
filing of the proposed rule change, the Commission summarily may 
temporarily suspend such rule change if it appears to the Commission 
that such action is: (i) Necessary or appropriate in the public 
interest; (ii) for the protection of investors; or (iii) otherwise in 
furtherance of the purposes of the Act. If the Commission takes such 
action, the Commission shall institute proceedings to determine whether 
the proposed rule should be approved or disapproved.
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    \12\ 15 U.S.C. 78s(b)(3)(A)(ii).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File No. SR-GEMX-2017-31 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-GEMX-2017-31. 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-GEMX-2017-31, and should be 
submitted on or before September 5, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
Eduardo A. Aleman,
Assistant Secretary.
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    \13\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2017-17047 Filed 8-11-17; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 82, No. 155 / Monday, August 14, 2017 / Notices 37971

available publicly. All submissions the proposed rule change and discussed collected only on the cleared customer
should refer to File Number SR– any comments it received on the contracts executed at GEMX, taking into
NYSEAMER–2017–02 and should be proposed rule change. The text of these account any CMTA instructions which
submitted on or before September 5, statements may be examined at the may result in collecting the ORF from a
2017. places specified in Item IV below. The non-member.
For the Commission, by the Division of Exchange has prepared summaries, set By way of example, if Broker A, a
Trading and Markets, pursuant to delegated forth in sections A, B, and C below, of GEMX member, routes a customer order
authority.14 the most significant aspects of such to CBOE and the transaction executes on
Eduardo A. Aleman, statements. CBOE and clears in Broker A’s OCC
Assistant Secretary. Clearing account, ORF will be collected
A. Self-Regulatory Organization’s by GEMX from Broker A’s clearing
[FR Doc. 2017–17042 Filed 8–11–17; 8:45 am] Statement of the Purpose of, and the account at OCC via direct debit. While
BILLING CODE 8011–01–P Statutory Basis for, the Proposed Rule this transaction was executed on a
Change market other than GEMX, it was cleared
SECURITIES AND EXCHANGE 1. Purpose by a GEMX member in the member’s
COMMISSION GEMX initially filed to establish its OCC clearing account in the customer
ORF in 2013.3 At this time, the range, therefore there is a regulatory
[Release No. 34–81342; File No. SR–GEMX– nexus between GEMX and the
2017–31] Exchange proposes to: (i) More closely
reflect the manner in which GEMX transaction. If Broker A was not a GEMX
assesses and collects its ORF; and (ii) member, then no ORF should be
Self-Regulatory Organizations; Nasdaq assessed and collected because there is
GEMX, LLC; Notice of Filing and remove rule text related to the timing
when the Exchange may increase or no nexus; the transaction did not
Immediate Effectiveness of Proposed execute on GEMX nor was it cleared by
Rule Change To Amend GEMX’s decrease the amount of its ORF.
The Exchange supports a common a GEMX member.
Schedule of Fees With Respect to the In the case where a member both
Options Regulatory Fee approach for the assessment and
collection of ORF among the various executes a transaction and clears the
August 8, 2017. options exchanges that assess such a fee. transaction, the ORF is assessed to and
Pursuant to Section 19(b)(1) of the Furthermore, the Exchange supports collected from the member only. In the
Securities Exchange Act of 1934 guidance from the Commission case where a member executes a
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 regarding regulatory cost structures to transaction and a different member
notice is hereby given that on July 26, ensure equal knowledge and treatment clears the transaction, the ORF is
2017, Nasdaq GEMX, LLC (‘‘GEMX’’ or among options markets assessing ORF. assessed to and collected from the
‘‘Exchange’’) filed with the Securities member who clears the transaction and
Proposal 1—Reflect the Manner in not the member who executes the
and Exchange Commission (‘‘SEC’’ or
Which GEMX Assesses and Collects Its transaction. In the case where a non-
‘‘Commission’’) the proposed rule
ORF member executes a transaction at an
change as described in Items I, II, and
III, below, which Items have been Currently, GEMX assesses an ORF of away market and a member clears the
prepared by the Exchange. The $0.0010 per contract side. This transaction, the ORF is assessed to and
Commission is publishing this notice to proposed rule change does not seek to collected from the member who clears
solicit comments on the proposed rule amend the amount of the ORF. the transaction. In the case where a
change from interested persons. Currently, GEMX assesses its ORF for member executes a transaction on
each customer option transaction that is GEMX and a non-member clears the
I. Self-Regulatory Organization’s either: (1) Executed by a member on transaction, the ORF is assessed to the
Statement of the Terms of Substance of GEMX; or (2) cleared by a GEMX member that executed the transaction
the Proposed Rule Change member at The Options Clearing and collected from the non-member
The Exchange proposes to revise Corporation (‘‘OCC’’) in the customer who cleared the transaction. In the case
GEMX’s Schedule of Fees to: (i) More range,4 even if the transaction was where a member executes a transaction
closely reflect the manner in which executed by a non-member of GEMX, at an away market and a non-member
GEMX assesses and collects its ORF; regardless of the exchange on which the clears the transaction, the ORF is not
and (ii) remove rule text related to the transaction occurs.5 If the OCC clearing assessed to the member who executed
timing when the Exchange may increase member is a GEMX member, ORF is the transaction or collected from the
or decrease the amount of the ORF. assessed and collected on all cleared non-member who cleared the
The text of the proposed rule change customer contracts (after adjustment for transaction because the Exchange does
is available on the Exchange’s Web site CMTA 6); and (2) if the OCC clearing not have access to the data to make
at www.ise.com, at the principal office member is not a GEMX member, ORF is absolutely certain that ORF should
of the Exchange, and at the apply. Further, the data does not allow
Commission’s Public Reference Room. 3 See Securities Exchange Act Release Nos. 70200 the Exchange to identify the member
(August 14, 2013), 74 FR 51242 (August 20, 2013) executing the trade at an away market.
II. Self-Regulatory Organization’s (SR-Topaz-2013–01) (Notice of Filing and
Statement of the Purpose of, and Immediate Effectiveness of Proposed Rule Change ORF Revenue and Monitoring of ORF
Statutory Basis for, the Proposed Rule to Establish the Schedule of Fees). The Exchange monitors the amount of
4 Members must record the appropriate account
Change revenue collected from the ORF to
sradovich on DSK3GMQ082PROD with NOTICES

origin code on all orders at the time of entry in
In its filing with the Commission, the order. The Exchange represents that it has ensure that it, in combination with other
Exchange included statements surveillances in place to verify that members mark regulatory fees and fines, does not
orders with the correct account origin code. exceed regulatory costs. In determining
concerning the purpose of and basis for 5 The Exchange uses reports from OCC when
whether an expense is considered a
assessing and collecting the ORF.
14 17 CFR 200.30–3(a)(12). 6 CMTA or Clearing Member Trade Assignment is regulatory cost, the Exchange reviews
1 15 U.S.C. 78s(b)(1). a form of ‘‘give-up’’ whereby the position will be all costs and makes determinations if
2 17 CFR 240.19b–4. assigned to a specific clearing firm at OCC. there is a nexus between the expense

VerDate Sep<11>2014 16:45 Aug 11, 2017 Jkt 241001 PO 00000 Frm 00133 Fmt 4703 Sfmt 4703 E:\FR\FM\14AUN1.SGM 14AUN1
Federal Register / Vol. 82, No. 155 / Monday, August 14, 2017 / Notices 37973

regulatory program. The Exchange competition. Rather, it is designed to Internet Web site (http://www.sec.gov/
proposes assessing higher fees to those enable the Exchange to recover a rules/sro.shtml). Copies of the
members that will require more material portion of the Exchange’s cost submission, all subsequent
Exchange regulatory services based on related to its regulatory activities. The amendments, all written statements
the amount of customer options Exchange is obligated to ensure that the with respect to the proposed rule
business they conduct. Additionally, the amount of regulatory revenue collected change that are filed with the
dues and fees paid by members go into from the ORF, in combination with its Commission, and all written
the general funds of the Exchange, a other regulatory fees and fines, does not communications relating to the
portion of which is used to help pay the exceed regulatory costs. proposed rule change between the
costs of regulation. The Exchange has in Commission and any person, other than
place a regulatory structure to surveil, C. Self-Regulatory Organization’s those that may be withheld from the
conduct examinations and monitor the Statement on Comments on the public in accordance with the
marketplace for violations of Exchange Proposed Rule Change Received From provisions of 5 U.S.C. 552, will be
Rules. The ORF assists the Exchange to Members, Participants, or Others available for Web site viewing and
fund the cost of this regulation of the No written comments were either printing in the Commission’s Public
marketplace. solicited or received. Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
Proposal 2—Semi-Annual Changes to III. Date of Effectiveness of the
business days between the hours of
ORF Proposed Rule Change and Timing for
10:00 a.m. and 3:00 p.m. Copies of the
The Exchange believes that the Commission Action
filing also will be available for
proposed rule change to remove the The foregoing rule change has become inspection and copying at the principal
limit to amend the ORF only semi- effective pursuant to Section office of the Exchange. All comments
annually, with advance notice, is 19(b)(3)(A)(ii) of the Act.12 At any time received will be posted without change;
reasonable because the Exchange will within 60 days of the filing of the the Commission does not edit personal
continue to provide market participants proposed rule change, the Commission identifying information from
with thirty (30) days advance notice of summarily may temporarily suspend submissions. You should submit only
amending the amount of the ORF. Also, such rule change if it appears to the information that you wish to make
the Exchange is required to monitor the Commission that such action is: (i) available publicly. All submissions
amount of revenue collected from the Necessary or appropriate in the public should refer to File No. SR–GEMX–
ORF to ensure that it, in combination interest; (ii) for the protection of 2017–31, and should be submitted on or
with its other regulatory fees and fines, investors; or (iii) otherwise in before September 5, 2017.
do not exceed regulatory costs. furtherance of the purposes of the Act. For the Commission, by the Division of
Therefore, the Exchange believes it is If the Commission takes such action, the Trading and Markets, pursuant to delegated
reasonable to remove the semi-annual Commission shall institute proceedings authority.13
limit to amend its ORF in order to to determine whether the proposed rule Eduardo A. Aleman,
permit the Exchange to make should be approved or disapproved. Assistant Secretary.
amendments to its ORF as necessary to IV. Solicitation of Comments [FR Doc. 2017–17047 Filed 8–11–17; 8:45 am]
comply with the Exchange’s obligations. BILLING CODE 8011–01–P
This proposed change would conform Interested persons are invited to
this rule with that of NASDAQ PHLX submit written data, views, and
LLC (‘‘Phlx’’), The NASDAQ Options arguments concerning the foregoing, SECURITIES AND EXCHANGE
Market LLC (‘‘NOM’’) and NASDAQ BX, including whether the proposed rule COMMISSION
Inc. (‘‘BX’’).11 change is consistent with the Act.
The Exchange believes that the Comments may be submitted by any of [Release No. 34–81346; File No. SR–IEX–
the following methods: 2017–25]
proposed rule change to remove the
limit to amend the ORF only semi- Electronic Comments Self-Regulatory Organizations;
annually, with advance notice, is Investors Exchange LLC; Notice of
equitable and not unfairly • Use the Commission’s Internet
comment form (http://www.sec.gov/ Filing and Immediate Effectiveness of
discriminatory because it will apply in Proposed Rule Change To Make a
the same manner to all members that are rules/sro.shtml); or
• Send an email to rule-comments@ Correction to the Exchange Fee
subject to the ORF. The Exchange has in Schedule Related to Fees for
place a regulatory structure to surveil sec.gov. Please include File No. SR–
GEMX–2017–31 on the subject line. Executions That Involve Taking
for, conduct examinations and monitor Resting Interest With Non-Displayed
the marketplace for violations of Paper Comments Priority With a Displayable Order
Exchange Rules. The ORF assists the
• Send paper comments in triplicate August 8, 2017.
Exchange to fund the cost of this
to Secretary, Securities and Exchange Pursuant to Section 19(b)(1) 1 of the
regulation of the marketplace.
Commission, 100 F Street NE., Securities Exchange Act of 1934 (the
B. Self-Regulatory Organization’s Washington, DC 20549–1090. ‘‘Act’’) 2 and Rule 19b–4 thereunder,3
Statement on Burden on Competition All submissions should refer to File No. notice is hereby given that, on August
The Exchange does not believe that SR–GEMX–2017–31. This file number 7, 2017, the Investors Exchange LLC
sradovich on DSK3GMQ082PROD with NOTICES

the proposed rule change will impose should be included on the subject line (‘‘IEX’’ or the ‘‘Exchange’’) filed with the
any burden on competition not if email is used. To help the Securities and Exchange Commission
necessary or appropriate in furtherance Commission process and review your (the ‘‘Commission’’) the proposed rule
of the purposes of the Act. The ORF is comments more efficiently, please use
not intended to have any impact on only one method. The Commission will 13 17 CFR 200.30–3(a)(12).
post all comments on the Commission’s 1 15 U.S.C. 78s(b)(1).
11 See Phlx’s Pricing Schedule and NOM and BX 2 15 U.S.C. 78a.

Rules at Chapter XV, Sections 5. 12 15 U.S.C. 78s(b)(3)(A)(ii). 3 17 CFR 240.19b–4.

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Document Created: 2018-10-24 11:51:44
Document Modified: 2018-10-24 11:51:44
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 37971