82 FR 56297 - Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Schedule of Fees for Regular Orders in Select Symbols
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 227 (November 28, 2017)
Federal Register Volume 82, Issue 227 (November 28, 2017)
| Page Range | 56297-56300 | |
| FR Document | 2017-25686 |
[Federal Register Volume 82, Number 227 (Tuesday, November 28, 2017)] [Notices] [Pages 56297-56300] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-25686] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-82141; File No. SR-ISE-2017-98] Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Schedule of Fees for Regular Orders in Select Symbols November 22, 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 November 13, 2017, Nasdaq ISE, LLC (``ISE'' or ``Exchange'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the Schedule of Fees for regular orders in Select Symbols to: (1) Adjust rebates and tier thresholds for the Market Maker Plus program, and (2) increase taker fees for certain Firm-Proprietary, Broker-Dealer, and Priority Customer orders. The text of the proposed rule change is available on the Exchange's Web site at www.ise.com, at the principal office of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposed rule change is to amend the Schedule of Fees for regular orders in Select Symbols to: (1) Adjust rebates and tier thresholds for the Market Maker Plus program, and (2) increase taker fees for certain Firm-Proprietary,\3\ Broker-Dealer,\4\ and Priority Customer \5\ orders. --------------------------------------------------------------------------- \3\ A ``Firm Proprietary'' order is an order submitted by a member for its own proprietary account. \4\ A ``Broker-Dealer'' order is an order submitted by a member for a broker-dealer account that is not its own proprietary account. \5\ A ``Priority Customer'' is a person or entity that is not a broker/dealer in securities, and does not place more than 390 orders in listed options per day on average during a calendar month for its own beneficial account(s), as defined in Nasdaq ISE Rule 100(a)(37A). --------------------------------------------------------------------------- The Exchange initially filed the proposed pricing changes on November 1, 2017 (SR-ISE-2017-97). On November 13, 2017, the Exchange withdrew that filing and submitted this filing. Market Maker Plus The Exchange proposes to increase Market Maker Plus rebates in SPY and QQQ, and modify the associated tier thresholds to make it easier for Market Makers \6\ to qualify for higher Market Maker Plus tiers in these symbols. The Market Maker Plus program is designed to attract additional liquidity from Market Makers and encourage Market Makers to maintain tight markets on ISE. The Exchange believes that the proposed fee changes will further these objectives. --------------------------------------------------------------------------- \6\ The term ``Market Makers'' refers to ``Competitive Market Makers'' and ``Primary Market Makers'' collectively. See Rule 100(a)(25). --------------------------------------------------------------------------- A Market Maker Plus is a Market Maker who is on the National Best Bid or National Best Offer (``NBBO'') a specified percentage of the time for series trading between $0.03 and $3.00 (for options whose underlying stock's previous trading day's last sale price was less than or equal to $100) and between $0.10 and $3.00 (for options whose underlying stock's previous trading day's last sale price was greater than $100) in premium in each of the front two expiration months. Currently, the specified percentage for time at the NBBO for all symbols is at least 80% but lower than 85% of the time for Tier 1, at least 85% but lower than 95% of the time for Tier 2 and at least 95% of the time for Tier 3.\7\ The Exchange proposes to modify the tier thresholds for SPY and QQQ only by adding a new Tier 1 and adjusting the other Market Maker Plus tiers such that: (1) Tier 1 rebates are provided to Market Makers that are on the NBBO at least 70% but lower than 80% of the time; (2) Tier 2 rebates are provided to market Makers that are on the NBBO at least 80% but lower than 85% of the time; (3) Tier 3 rebates are provided to Market Makers that are on the NBBO at least 85% but lower than 90% of the time; and (4) Tier 4 and [[Page 56298]] rebates are provided to Market Makers that are on the NBBO at least 90% of the time. --------------------------------------------------------------------------- \7\ A Market Maker's single best and single worst quoting days each month based on the front two expiration months, on a per symbol basis, will be excluded in calculating whether a Market Maker qualifies for this rebate, if doing so will qualify a Market Maker for the rebate. Other than days where the Exchange closes early for holiday observance, any day that the market is not open for the entire trading day or the Exchange instructs members in writing to route their orders to other markets may be excluded from the Market Maker Plus tier calculation; provided that the Exchange will only remove the day for members that would have a lower time at the NBBO for the specified series with the day included. --------------------------------------------------------------------------- The Exchange is not proposing any changes to the tier thresholds for Select Symbols other than SPY and QQQ. However, in connection with the changes described above for SPY and QQQ, the Exchange proposes to reformat the Schedule of Fees so that all Market Maker Plus tier thresholds and rebate amounts, including those for SPY and QQQ, and those for other Select Symbols, are clearly described in footnote 5 under Regular Order Fees and Rebates. With the proposed changes, this footnote will state that Market Makers that qualify for Market Maker Plus will receive rebates based on a table contained therein that separately identifies tier thresholds and rebate amounts for SPY and QQQ, and for Select Symbols other than SPY and QQQ. While tier thresholds and rebate amounts for Select Symbols other than SPY and QQQ are being moved to this section of the Schedule of Fees, the Exchange is not proposing any changes to those values. Therefore, the Market Maker Plus program will continue to operate in the same way that it does today for all symbols other than SPY and QQQ. Currently, Market Makers that qualify for Market Maker Plus are provided a rebate for regular orders in Select Symbols of $0.15 per contract for Tier 1, $0.18 per contract for Tier 2, and $0.22 per contract for Tier 3.\8\ For SPY and QQQ only, this rebate is $0.16 per contract for Tier 2 and $0.20 per contract for Tier 3.\9\ A Market Maker that achieves a higher tier of Market Maker Plus in either SPY or QQQ receives the higher rebate in both SPY and QQQ. Market Makers that do not qualify for Market Maker Plus are not eligible for rebates and are instead charged a fee of $0.10 per contract. With the introduction of a new Tier 1 and adjustment of other tier thresholds for SPY and QQQ, the Exchange proposes to provide an increased Market Maker Plus rebate in SPY and QQQ that is: (1) $0.00 Per contract (i.e., no fee or rebate) for new Tier 1; (2) $0.18 per contract for new Tier 2, (3) $0.22 per contract for new Tier 3, and (3) $0.26 per contract for new Tier 4. Each of these regular maker rebates is increased from current Market Maker Plus rebates provided to Market Makers that are at the NBBO for the same percentage of time today--or in the case of Tier 1, represents the elimination of a fee that would have been charged to Market Makers that are on the NBBO for the same percentage of the time. In addition, the Exchange proposes to adopt a ``linked maker rebate'' for proposed Tiers 2-4 that applies to executions in SPY or QQQ if the Market Maker does not achieve the applicable tier in that symbol but achieves the tier (i.e., proposed Tiers 2-4) in the other symbol. Once the applicable tier--any of proposed Tiers 2, 3 or 4--is achieved for one symbol, the Market Maker will be eligible for the linked maker rebate in the other symbol, regardless of time at the NBBO in that symbol (i.e., there is no minimum tier threshold to be met in that symbol for the proposed linked maker rebate). This linked maker rebate would be $0.16 per contract for Tier 2, $0.20 per contract for Tier 3, and $0.24 per contract for Tier 4. The regular maker rebate will be provided in the symbol that qualifies the Market Maker for the tier based on percentage of time at the NBBO. Thus, for example, if a Market Maker achieves Tier 3 in SPY and Tier 1 in QQQ, the Market Maker would receive the Tier 3 regular maker rebate in SPY (i.e., $0.22 per contract) and the Tier 3 linked maker rebate in QQQ (i.e., $0.20 per contract). This linked maker rebate is similar to how Market Maker Plus rebates are currently provided in SPY and QQQ--i.e., a Market Maker that qualifies for a tier in one qualifies for both--but is more beneficial to the Market Maker because the Market Maker may earn the higher regular maker rebate in the symbol for which they qualify for that tier normally. --------------------------------------------------------------------------- \8\ For all tiers, a $0.10 per contract fee applies when trading against Priority Customer complex orders that leg into the regular order book. There will be no fee charged or rebate provided when trading against non-Priority Customer complex orders that leg into the regular order book. \9\ As with other rebates provided under the Market Maker Plus program, this rebate does not apply when trading against complex orders that leg into the regular book. --------------------------------------------------------------------------- Taker Fees Currently, the Exchange charges a taker fee for regular orders in Select Symbols that is $0.44 per contract for Market Maker and Priority Customer orders (other than Priority Customer orders in SPY, QQQ, IWM, and VXX) and $0.45 per contract for Non-Nasdaq ISE Market Maker,\10\ Firm Proprietary, Broker-Dealer, and Professional Customer \11\ orders. The taker fee for Priority Customer orders is $0.34 per contract in SPY, and $0.35 per contract in QQQ, IWM, and VXX. The Exchange proposes to: (1) Increase the taker fee for Firm Proprietary and Broker-Dealer orders in Select Symbols to $0.46 per contract; and (2) increase the taker fee for Priority Customer orders in SPY, QQQ, IWM, and VXX to $0.37 per contract. --------------------------------------------------------------------------- \10\ A ``Non-Nasdaq ISE Market Maker'' is a market maker as defined in Section 3(a)(38) of the Securities Exchange Act of 1934, as amended, registered in the same options class on another options exchange. \11\ A ``Professional Customer'' is a person or entity that is not a broker/dealer and is not a Priority Customer. --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,\12\ in general, and furthers the objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\13\ in particular, in that it provides for the equitable allocation of reasonable dues, fees, and other charges among members and issuers and other persons using any facility, and is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. --------------------------------------------------------------------------- \12\ 15 U.S.C. 78f(b). \13\ 15 U.S.C. 78f(b)(4) and (5). --------------------------------------------------------------------------- Market Maker Plus The Exchange believes that the proposed changes to the Market Maker Plus program in SPY and QQQ are reasonable and equitable as these changes would increase rebates for Market Makers that qualify for Market Maker Plus in these symbols, including linked maker rebates that will now be provided in a manner more beneficial to members--i.e., by providing the higher maker rebate in the symbol where a member qualifies normally. Furthermore, the proposed rule change would also introduce a new tier that eliminates maker fees for Market Makers that do not meet the current requirements for time at the NBBO in SPY and QQQ, and ease the requirements needed to qualify for higher tiers of Market Maker Plus in these symbols. The Market Maker Plus program is designed to attract liquidity from Market Makers on ISE and provide incentives for those Market Makers to maintain tight markets, measured by time spent quoting at the NBBO. The Exchange believes the proposed rule change will further encourage Market Makers to maintain quality markets in SPY and QQQ, which are two of the most actively traded symbols on ISE, to the benefit of all market participants that trade on the Exchange.\14\ --------------------------------------------------------------------------- \14\ The proposed rule change also reformats the way that Market Maker Plus rebates and tier thresholds are displayed, which will make the program easier to understand. --------------------------------------------------------------------------- The Exchange also believes that these changes are not unfairly discriminatory as all Market Makers can qualify for Market Maker Plus in these symbols by meeting program requirements that are designed to incentivize Market Markets [[Page 56299]] to maintain quality markets. As noted above, SPY and QQQ have been targeted by the Exchange as these are highly active symbols on the Exchange. The proposed rule change will allow Market Makers that would not qualify for Market Maker Plus in SPY or QQQ today to qualify for free maker executions based on a time at the NBBO of at least 70% of the time pursuant to proposed Tier 1. And, as is the case today, Market Makers that show commitment to market quality by maintaining quotes that qualify them for a higher tier in these symbols will earn higher rebates, including more favorably applied linked rebates. Furthermore, the Exchange continues to believe that it is not unfairly discriminatory to offer these rebates only to Market Makers as Market Makers, and, in particular, those Market Makers that achieve Market Maker Plus status, are subject to additional requirements and obligations (such as quoting requirements) that other market participants are not. Taker Fees The Exchange believes that the proposed changes to taker fees are reasonable and equitable as the proposed increases are modest and reflect reasonable charges to access liquidity on the Exchange. The Exchange believes that the increased taker fee for Firm Proprietary and Broker-Dealer orders in Select Symbols and the taker fee for Priority Customer orders in SPY, QQQ, IWM, and VXX will continue to be attractive to market participants. Furthermore, Priority Customers will continue to receive reduced taker fees in SPY, QQQ, IWM, and VXX, which represent some of the most heavily traded symbols on the Exchange. In particular, the proposed taker fees are lower than taker fees charged to Priority Customer orders in other Select Symbols as well as taker fees charged to other market participants. As such, the Exchange believes that the proposed taker fees will continue to attract order flow to the benefit of all market participants that trade on the Exchange. In addition, the Exchange believes that it is equitable and not unfairly discriminatory to increase the taker fees described above, as well as to only offer reduced taker fees in SPY, QQQ, IWM, and VXX to Priority Customer orders. The proposed taker fee increases apply equally to members based on a market participants' type. Furthermore, a Priority Customer is by definition not a broker or dealer in securities, and does not place more than 390 orders in listed options per day on average during a calendar month for its own beneficial account(s). This limitation does not apply to participants on the Exchange whose behavior is substantially similar to that of market professionals, including Professional Customers, who will generally submit a higher number of orders than Priority Customers. 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 proposed changes to the Market Maker Plus program in SPY and QQQ are designed to increase competition by encouraging Market Makers to provide liquidity and maintain tight markets in these symbols. Furthermore, the proposed increases to taker fees are modest and the Exchange does not expect that such minor increases will have any significant impact on competition. The Exchange operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive, or rebate opportunities available at other venues to be more favorable. In such an environment, the Exchange must continually adjust its fees to remain competitive. Because competitors are free to modify their own fees in response, and because market participants may readily adjust their order routing practices, the Exchange believes that the degree to which fee changes in this market may impose any burden on competition is extremely limited. 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,\15\ and Rule 19b-4(f)(2) \16\ thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. --------------------------------------------------------------------------- \15\ 15 U.S.C. 78s(b)(3)(A)(ii). \16\ 17 CFR 240.19b-4(f)(2). --------------------------------------------------------------------------- IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-ISE-2017-98 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-ISE-2017-98. 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. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-ISE-2017-98 and should be submitted on or before December 19, 2017. [[Page 56300]] For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\17\ --------------------------------------------------------------------------- \17\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-25686 Filed 11-27-17; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 82, No. 227 / Tuesday, November 28, 2017 / Notices 56297
number should be included on the 13, 2017, Nasdaq ISE, LLC (‘‘ISE’’ or The Exchange initially filed the
subject line if email is used. To help the ‘‘Exchange’’) filed with the Securities proposed pricing changes on November
Commission process and review your and Exchange Commission 1, 2017 (SR–ISE–2017–97). On
comments more efficiently, please use (‘‘Commission’’) the proposed rule November 13, 2017, the Exchange
only one method. The Commission will change as described in Items I and II withdrew that filing and submitted this
post all comments on the Commission’s below, which Items have been prepared filing.
Internet Web site (http://www.sec.gov/ by the Exchange. The Commission is Market Maker Plus
rules/sro.shtml). Copies of the publishing this notice to solicit
submission, all subsequent comments on the proposed rule change The Exchange proposes to increase
amendments, all written statements from interested persons. Market Maker Plus rebates in SPY and
with respect to the proposed rule QQQ, and modify the associated tier
change that are filed with the I. Self-Regulatory Organization’s thresholds to make it easier for Market
Commission, and all written Statement of the Terms of Substance of Makers 6 to qualify for higher Market
communications relating to the the Proposed Rule Change Maker Plus tiers in these symbols. The
proposed rule change between the The Exchange proposes to amend the Market Maker Plus program is designed
Commission and any person, other than Schedule of Fees for regular orders in to attract additional liquidity from
those that may be withheld from the Select Symbols to: (1) Adjust rebates Market Makers and encourage Market
public in accordance with the and tier thresholds for the Market Maker Makers to maintain tight markets on
provisions of 5 U.S.C. 552, will be Plus program, and (2) increase taker fees ISE. The Exchange believes that the
available for Web site viewing and for certain Firm-Proprietary, Broker- proposed fee changes will further these
printing in the Commission’s Public Dealer, and Priority Customer orders. objectives.
Reference Room, 100 F Street NE., The text of the proposed rule change A Market Maker Plus is a Market
Washington, DC 20549, on official is available on the Exchange’s Web site Maker who is on the National Best Bid
business days between the hours of at www.ise.com, at the principal office or National Best Offer (‘‘NBBO’’) a
10:00 a.m. and 3:00 p.m. Copies of the of the Exchange, and at the specified percentage of the time for
filing also will be available for Commission’s Public Reference Room. series trading between $0.03 and $3.00
inspection and copying at the principal (for options whose underlying stock’s
office of the Exchange. All comments II. Self-Regulatory Organization’s previous trading day’s last sale price
received will be posted without change. Statement of the Purpose of, and was less than or equal to $100) and
Persons submitting comments are Statutory Basis for, the Proposed Rule between $0.10 and $3.00 (for options
cautioned that we do not redact or edit Change whose underlying stock’s previous
personal identifying information from In its filing with the Commission, the trading day’s last sale price was greater
comment submissions. You should Exchange included statements than $100) in premium in each of the
submit only information that you wish concerning the purpose of and basis for front two expiration months. Currently,
to make available publicly. All the proposed rule change and discussed the specified percentage for time at the
submissions should refer to File any comments it received on the NBBO for all symbols is at least 80% but
Number SR–MIAX–2017–46 and should proposed rule change. The text of these lower than 85% of the time for Tier 1,
be submitted on or before December 19, statements may be examined at the at least 85% but lower than 95% of the
2017. places specified in Item IV below. The time for Tier 2 and at least 95% of the
For the Commission, by the Division of Exchange has prepared summaries, set time for Tier 3.7 The Exchange proposes
Trading and Markets, pursuant to delegated forth in sections A, B, and C below, of to modify the tier thresholds for SPY
authority.16 the most significant aspects of such and QQQ only by adding a new Tier 1
Eduardo A. Aleman, statements. and adjusting the other Market Maker
Assistant Secretary. Plus tiers such that: (1) Tier 1 rebates
A. Self-Regulatory Organization’s are provided to Market Makers that are
[FR Doc. 2017–25605 Filed 11–27–17; 8:45 am]
Statement of the Purpose of, and on the NBBO at least 70% but lower
BILLING CODE 8011–01–P Statutory Basis for, the Proposed Rule than 80% of the time; (2) Tier 2 rebates
Change are provided to market Makers that are
SECURITIES AND EXCHANGE 1. Purpose on the NBBO at least 80% but lower
COMMISSION than 85% of the time; (3) Tier 3 rebates
The purpose of the proposed rule are provided to Market Makers that are
[Release No. 34–82141; File No. SR–ISE– change is to amend the Schedule of Fees on the NBBO at least 85% but lower
2017–98] for regular orders in Select Symbols to: than 90% of the time; and (4) Tier 4 and
(1) Adjust rebates and tier thresholds for
Self-Regulatory Organizations; Nasdaq the Market Maker Plus program, and (2) 6 The term ‘‘Market Makers’’ refers to
ISE, LLC; Notice of Filing and increase taker fees for certain Firm- ‘‘Competitive Market Makers’’ and ‘‘Primary Market
Immediate Effectiveness of Proposed Proprietary,3 Broker-Dealer,4 and Makers’’ collectively. See Rule 100(a)(25).
Rule Change To Amend the Schedule Priority Customer 5 orders. 7 A Market Maker’s single best and single worst
of Fees for Regular Orders in Select quoting days each month based on the front two
Symbols expiration months, on a per symbol basis, will be
3 A ‘‘Firm Proprietary’’ order is an order
excluded in calculating whether a Market Maker
submitted by a member for its own proprietary qualifies for this rebate, if doing so will qualify a
November 22, 2017. account. Market Maker for the rebate. Other than days where
Pursuant to Section 19(b)(1) of the
ethrower on DSK3G9T082PROD with NOTICES
4 A ‘‘Broker-Dealer’’ order is an order submitted
the Exchange closes early for holiday observance,
Securities Exchange Act of 1934 by a member for a broker-dealer account that is not any day that the market is not open for the entire
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 its own proprietary account. trading day or the Exchange instructs members in
5 A ‘‘Priority Customer’’ is a person or entity that writing to route their orders to other markets may
notice is hereby given that on November
is not a broker/dealer in securities, and does not be excluded from the Market Maker Plus tier
place more than 390 orders in listed options per day calculation; provided that the Exchange will only
16 17 CFR 200.30–3(a)(12). on average during a calendar month for its own remove the day for members that would have a
1 15 U.S.C. 78s(b)(1). beneficial account(s), as defined in Nasdaq ISE Rule lower time at the NBBO for the specified series with
2 17 CFR 240.19b–4. 100(a)(37A). the day included.
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![56300 Federal Register / Vol. 82, No. 227 / Tuesday, November 28, 2017 / Notices
For the Commission, by the Division of II. Self-Regulatory Organization’s analysis of the data generally showed
Trading and Markets, pursuant to delegated Statement of the Purpose of, and that the Tier Size Pilot had a neutral to
authority.17 Statutory Basis for, the Proposed Rule positive impact on OTC market quality
Eduardo A. Aleman, Change for the majority of OTC Equity
Assistant Secretary. In its filing with the Commission, Securities and tiers; and that there was
[FR Doc. 2017–25686 Filed 11–27–17; 8:45 am] FINRA included statements concerning an overall increase of 13% in the
BILLING CODE 8011–01–P the purpose of and basis for the number of customer limit orders that
proposed rule change and discussed any met the minimum quotation sizes to be
comments it received on the proposed eligible for display under the Pilot tiers.
SECURITIES AND EXCHANGE rule change. The text of these statements In the 2013 Assessment, FINRA
COMMISSION may be examined at the places specified recommended adopting the tiers as
in Item IV below. FINRA has prepared permanent, but extended the Pilot
summaries, set forth in sections A, B, period to allow more time to gather and
[Release No. 34–82153; File No. SR–FINRA–
and C below, of the most significant analyze data after the November 12,
2017–035]
aspects of such statements. 2012 through June 30, 2013 assessment
Self-Regulatory Organizations; A. Self-Regulatory Organization’s period.9 The purpose of this filing is to
Financial Industry Regulatory Statement of the Purpose of, and further extend the operation of the Tier
Authority, Inc.; Notice of Filing and Statutory Basis for, the Proposed Rule Size Pilot until June 7, 2018, to provide
Immediate Effectiveness of a Proposed Change additional time to finalize a permanent
Rule Change To Extend the Tier Size 1. Purpose proposal with regard to the Tier Size
Pilot of Rule 6433 (Minimum Quotation Pilot.10
Size Requirements for OTC Equity FINRA proposes to amend FINRA
Rule 6433 (Minimum Quotation Size FINRA has filed the proposed rule
Securities) change for immediate effectiveness. The
Requirements for OTC Equity
November 22, 2017. Securities) (the ‘‘Rule’’) to extend, until operative date of the proposed rule
June 7, 2018, the amendments set forth change will be December 8, 2017.
Pursuant to Section 19(b)(1) of the
in File No. SR–FINRA–2011–058 (‘‘Tier 2. Statutory Basis
Securities Exchange Act of 1934 Size Pilot’’ or ‘‘Pilot’’), which currently
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 are scheduled to expire on December 8, FINRA believes that the proposed rule
notice is hereby given that on November 2017.4 change is consistent with the provisions
20, 2017, Financial Industry Regulatory The Tier Size Pilot was filed with the of Section 15A(b)(6) of the Act,11 which
Authority, Inc. (‘‘FINRA’’) filed with the SEC on October 6, 2011,5 to amend the requires, among other things, that
Securities and Exchange Commission minimum quotation sizes (or ‘‘tier FINRA rules must be designed to
(‘‘SEC’’ or ‘‘Commission’’) the proposed sizes’’) for OTC Equity Securities.6 The prevent fraudulent and manipulative
rule change as described in Items I and goals of the Pilot were to simplify the acts and practices, to promote just and
II below, which Items have been tier structure, facilitate the display of equitable principles of trade, and, in
prepared by FINRA. FINRA has customer limit orders, and expand the
general, to protect investors and the
designated the proposed rule change as scope of the Rule to apply to additional
public interest. FINRA also believes that
constituting a ‘‘non-controversial’’ rule quoting participants. During the course
of the Pilot, FINRA collected and the proposed rule change is consistent
change under paragraph (f)(6) of Rule with the provisions of Section
19b–4 under the Act,3 which renders provided to the SEC specified data with
which to assess the impact of the Pilot 15A(b)(11) of the Act.12 Section
the proposal effective upon receipt of 15A(b)(11) requires that FINRA rules
this filing by the Commission. The tiers on market quality and limit order
display.7 On September 13, 2013, include provisions governing the form
Commission is publishing this notice to and content of quotations relating to
FINRA provided to the Commission an
solicit comments on the proposed rule securities sold otherwise than on a
assessment on the operation of the Tier
change from interested persons. Size Pilot utilizing data covering the national securities exchange which may
I. Self-Regulatory Organization’s period from November 12, 2012 through be distributed or published by any
Statement of the Terms of Substance of June 30, 2013.8 As noted in the 2013 member or person associated with a
the Proposed Rule Change Assessment, FINRA believed that the member, and the persons to whom such
quotations may be supplied.
FINRA is proposing to amend FINRA 4 See Securities Exchange Act Release No. 80727
FINRA believes that the extension of
Rule 6433 (Minimum Quotation Size (May 18, 2017), 82 FR 23953 (May 24, 2017) (Notice
of Filing and Immediate Effectiveness of File No. the Tier Size Pilot until June 7, 2018, is
Requirements for OTC Equity SR–FINRA–2017–014). consistent with the Act in that it would
Securities) to extend the Tier Size Pilot, 5 See Securities Exchange Act Release No. 65568
provide the Commission and FINRA
which currently is scheduled to expire (October 14, 2011), 76 FR 65307 (October 20, 2011)
(Notice of Filing of File No. SR–FINRA–2011–058). with additional time to finalize a
on December 8, 2017, until June 7, 2018. 6 ‘‘OTC Equity Security’’ means any equity proposal with regard to the Tier Size
The text of the proposed rule change security that is not an ‘‘NMS stock’’ as that term is Pilot.
is available on FINRA’s Web site at defined in Rule 600(b)(47) of SEC Regulation NMS;
provided, however, that the term OTC Equity
http://www.finra.org, at the principal Security shall not include any Restricted Equity
9 See Securities Exchange Act Release No. 70839
(November 8, 2013), 78 FR 68893 (November 15,
ethrower on DSK3G9T082PROD with NOTICES
office of FINRA and at the Security. See FINRA Rule 6420.
7 FINRA ceased collecting Pilot data for 2013) (Notice of Filing and Immediate Effectiveness
Commission’s Public Reference Room. of File No. SR–FINRA–2013–049).
submission to the Commission on February 13,
10 FINRA reviewed the post-June 30, 2013 data,
2015.
17 17 8 The assessment is part of the SEC’s comment file and stated that the impact described in the 2013
CFR 200.30–3(a)(12). Assessment continued to hold (and improved in
1 15
for SR–FINRA–2011–058 and also is available on
U.S.C. 78s(b)(1). certain areas). See June 2016 Extension.
FINRA’s Web site at: http://www.finra.org/Industry/
2 17 CFR 240.19b–4. 11 15 U.S.C. 78o–3(b)(6).
Regulation/RuleFilings/2011/P124615 (‘‘Pilot
3 17 CFR 240.19b–4(f)(6). Assessment’’). 12 15 U.S.C. 78o–3(b)(11).
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Document Created: 2017-11-28 01:50:45
Document Modified: 2017-11-28 01:50:45
| 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 56297 |
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