82 FR 58670 - Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Clarify the Application of the Crossing Fee Cap

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 238 (December 13, 2017)

Page Range		58670-58671
FR Document		2017-26820
Federal Register, Volume 82 Issue 238 (Wednesday, December 13, 2017)
[Federal Register Volume 82, Number 238 (Wednesday, December 13, 2017)]
[Notices]
[Pages 58670-58671]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-26820]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82229; File No. SR-ISE-2017-95]


Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Clarify the 
Application of the Crossing Fee Cap

December 7, 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 28, 2017, Nasdaq ISE, LLC (``ISE'' or ``Exchange'') filed 
with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the Exchange. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the Exchange's Schedule of Fees to 
clarify the application of the Crossing Fee Cap.
    The text of the proposed rule change is available on the Exchange's 
website at http://ise.cchwallstreet.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 provide greater 
clarity as to the manner in which the Exchange applies the Crossing Fee 
Cap.
    By way of background, Crossing Orders are contracts that are 
submitted as part of a Facilitation, Solicitation, PIM, Block or QCC 
Order. Crossing Order fees are capped at $90,000 per month per member 
on all Firm Proprietary and Non-Nasdaq ISE Market Maker transactions 
that are part of the originating or contra side of a Crossing Order.\3\ 
The following fees are not included in the calculation of the monthly 
Crossing Fee Cap: (1) Fees for Responses to Crossing Orders; (2) 
surcharge fees for licensed products and the fees for index options as 
set forth in Section I; and (3) service fee.\4\ The manner in which the 
Exchange calculates the Crossing Fee Cap is not changing.
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    \3\ Members that elect prior to the start of the month to pay 
$65,000 per month will have these crossing fees capped at that level 
instead. All eligible volume from affiliated Members is aggregated 
for purposes of the Crossing Fee Cap, provided there is at least 75% 
common ownership between the Members as reflected on each Member's 
Form BD, Schedule A.
    \4\ A service fee of $0.00 per side applies to all order types 
that are eligible for the fee cap. The service fee does not apply 
once a Member reaches the fee cap level and does apply to every 
contract side above the fee cap. A Member who does not reach the 
monthly fee cap will not be charged the service fee. Once the fee 
cap is reached, the service fee applies to eligible Firm Proprietary 
and Non-Nasdaq ISE market Maker orders in all Nasdaq ISE products. 
The service fee is not calculated in reaching the cap.
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    The Exchange proposes to make clear how it attributes eligible 
volume for purposes of the Crossing Fee Cap. The Exchange proposes to 
add the following language to the rule text, ``For purposes of the 
Crossing Fee Cap the Exchange will attribute eligible volume to the ISE 
Member on whose behalf the Crossing Order was executed.'' Only ISE 
Members are subject to the Crossing Fee Cap. This is the manner in 
which the Exchange attributes eligible volume for purposes of the 
Crossing Fee Cap today. To provide greater transparency to the Schedule 
of Fees, the Exchange proposes to include this language in the rule 
text. While the Exchange is not aware of any confusion with respect to 
this fee with its Members, the Exchange believes this specificity will 
avoid any confusion.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\5\ in general, and furthers the objectives of Sections 
6(b)(4) and 6(b)(5) of the Act,\6\ 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.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange's proposal to add the clarifying language regarding 
the Crossing Fee Cap to the Schedule of Fees is reasonable because the 
proposed rule text will bring greater clarity to the manner in which 
the Exchange attributes eligible volume for purposes of the Crossing 
Fee Cap today and applies the Crossing Fee Cap. The calculation and the 
application of the Crossing Fee Cap are not changing with this 
proposal. This rule text is intended to provide additional clarity to 
the current rule to describe who benefits from the volume for purposes 
of the application of the cap.
    The Exchange's proposal to add the clarifying language regarding 
the Crossing Fee Cap to the Schedule of Fees is equitable and not 
unfairly discriminatory because the Exchange

[[Page 58671]]

will continue to calculate and apply the Crossing Fee Cap in a uniform 
manner to all ISE Members that are eligible for this cap.

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 proposal is intended to 
provide greater transparency to the Schedule of Fees and does not amend 
the current manner in which the Exchange calculates or applies the 
Crossing Fee Cap. The Exchange's proposal to add the clarifying 
language regarding the Crossing Fee Cap to the Schedule of Fees does 
not impose an undue burden on competition because the Exchange will 
continue to calculate and apply the Crossing Fee Cap in a uniform 
manner to all ISE Members that are eligible for this cap.

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,\7\ and Rule 19b-4(f)(2) \8\ thereunder. At 
any time within 60 days of the filing of the proposed rule change, the 
Commission summarily may temporarily suspend such rule change if it 
appears to the Commission that such action is: (i) Necessary or 
appropriate in the public interest; (ii) for the protection of 
investors; or (iii) otherwise in furtherance of the purposes of the 
Act. If the Commission takes such action, the Commission shall 
institute proceedings to determine whether the proposed rule should be 
approved or disapproved.
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    \7\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \8\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-ISE-2017-95 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-2017-95. 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 website (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 website 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-2017-95 and should be submitted on 
or before January 3, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-26820 Filed 12-12-17; 8:45 am]
BILLING CODE 8011-01-P
58670 Federal Register / Vol. 82, No. 238 / Wednesday, December 13, 2017 / Notices

appropriate in the public interest, for comments on the proposed rule change manner in which the Exchange
the protection of investors, and the from interested persons. calculates the Crossing Fee Cap is not
maintenance of a fair and orderly changing.
I. Self-Regulatory Organization’s
market. The Exchange proposes to make clear
Statement of the Terms of Substance of
Finally, the Plan Sponsors propose to how it attributes eligible volume for
the Proposed Rule Change
amend the Plan to make a non- purposes of the Crossing Fee Cap. The
substantive edit to correct an inaccurate The Exchange proposes to amend the Exchange proposes to add the following
cross-reference to ‘‘Section 8’’ in Section Exchange’s Schedule of Fees to clarify language to the rule text, ‘‘For purposes
7(ii) of the Plan with ‘‘Section 9.’’ The the application of the Crossing Fee Cap. of the Crossing Fee Cap the Exchange
Commission believes that it is The text of the proposed rule change will attribute eligible volume to the ISE
appropriate in the public interest, for is available on the Exchange’s website at Member on whose behalf the Crossing
the protection of investors and the http://ise.cchwallstreet.com/, at the Order was executed.’’ Only ISE
maintenance of a fair and orderly principal office of the Exchange, and at Members are subject to the Crossing Fee
market to approve this proposed change the Commission’s Public Reference Cap. This is the manner in which the
because it will clarify and correct an Room. Exchange attributes eligible volume for
inaccuracy in the Plan. II. Self-Regulatory Organization’s purposes of the Crossing Fee Cap today.
For the reasons discussed above, the Statement of the Purpose of, and To provide greater transparency to the
Commission finds that Amendment No. Statutory Basis for, the Proposed Rule Schedule of Fees, the Exchange
4 is consistent with Section 11A of the Change proposes to include this language in the
Act 12 and Rule 608 thereunder.13 rule text. While the Exchange is not
In its filing with the Commission, the aware of any confusion with respect to
IV. Conclusion Exchange included statements this fee with its Members, the Exchange
It is therefore ordered, pursuant to concerning the purpose of and basis for believes this specificity will avoid any
Section 11A of the Act,14 and Rule 608 the proposed rule change and discussed confusion.
thereunder,15 that Amendment No. 4 to any comments it received on the
the OLPP (File No. 4–443) be, and proposed rule change. The text of these 2. Statutory Basis
hereby is, approved. statements may be examined at the The Exchange believes that its
For the Commission, by the Division of
places specified in Item IV below. The proposal is consistent with Section 6(b)
Trading and Markets, pursuant to delegated Exchange has prepared summaries, set of the Act,5 in general, and furthers the
authority.16 forth in sections A, B, and C below, of objectives of Sections 6(b)(4) and 6(b)(5)
Eduardo Aleman, the most significant aspects of such of the Act,6 in particular, in that it
Assistant Secretary.
statements. provides for the equitable allocation of
[FR Doc. 2017–26818 Filed 12–12–17; 8:45 am] A. Self-Regulatory Organization’s reasonable dues, fees, and other charges
Statement of the Purpose of, and among members and issuers and other
BILLING CODE 8011–01–P
Statutory Basis for, the Proposed Rule persons using any facility, and is not
Change designed to permit unfair
SECURITIES AND EXCHANGE discrimination between customers,
COMMISSION 1. Purpose issuers, brokers, or dealers.
The purpose of the proposed rule The Exchange’s proposal to add the
[Release No. 34–82229; File No. SR–ISE– change is to provide greater clarity as to clarifying language regarding the
2017–95] the manner in which the Exchange Crossing Fee Cap to the Schedule of
applies the Crossing Fee Cap. Fees is reasonable because the proposed
Self-Regulatory Organizations; Nasdaq By way of background, Crossing rule text will bring greater clarity to the
ISE, LLC; Notice of Filing and Orders are contracts that are submitted manner in which the Exchange
Immediate Effectiveness of Proposed as part of a Facilitation, Solicitation, attributes eligible volume for purposes
Rule Change To Clarify the Application PIM, Block or QCC Order. Crossing of the Crossing Fee Cap today and
of the Crossing Fee Cap Order fees are capped at $90,000 per applies the Crossing Fee Cap. The
month per member on all Firm calculation and the application of the
December 7, 2017. Crossing Fee Cap are not changing with
Proprietary and Non-Nasdaq ISE Market
Pursuant to Section 19(b)(1) of the this proposal. This rule text is intended
Maker transactions that are part of the
Securities Exchange Act of 1934 to provide additional clarity to the
originating or contra side of a Crossing
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 current rule to describe who benefits
Order.3 The following fees are not
notice is hereby given that on November from the volume for purposes of the
included in the calculation of the
28, 2017, Nasdaq ISE, LLC (‘‘ISE’’ or application of the cap.
monthly Crossing Fee Cap: (1) Fees for
‘‘Exchange’’) filed with the Securities The Exchange’s proposal to add the
Responses to Crossing Orders; (2)
and Exchange Commission clarifying language regarding the
surcharge fees for licensed products and
(‘‘Commission’’) the proposed rule Crossing Fee Cap to the Schedule of
the fees for index options as set forth in
change as described in Items I and II Fees is equitable and not unfairly
Section I; and (3) service fee.4 The
below, which Items have been prepared discriminatory because the Exchange
by the Exchange. The Commission is 3 Members that elect prior to the start of the
publishing this notice to solicit month to pay $65,000 per month will have these the fee cap level and does apply to every contract
sradovich on DSK3GMQ082PROD with NOTICES

crossing fees capped at that level instead. All side above the fee cap. A Member who does not
12 15 eligible volume from affiliated Members is reach the monthly fee cap will not be charged the
U.S.C. 78k–1.
13 17 aggregated for purposes of the Crossing Fee Cap, service fee. Once the fee cap is reached, the service
CFR 242.608. fee applies to eligible Firm Proprietary and Non-
14 15 U.S.C. 78k–1.
provided there is at least 75% common ownership
between the Members as reflected on each Nasdaq ISE market Maker orders in all Nasdaq ISE
15 17 CFR 242.608.
Member’s Form BD, Schedule A. products. The service fee is not calculated in
16 17 CFR 200.30–3(a)(29). 4 A service fee of $0.00 per side applies to all reaching the cap.
1 15 U.S.C. 78s(b)(1). 5 15 U.S.C. 78f(b).
order types that are eligible for the fee cap. The
2 17 CFR 240.19b–4. service fee does not apply once a Member reaches 6 15 U.S.C. 78f(b)(4) and (5).

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Federal Register / Vol. 82, No. 238 / Wednesday, December 13, 2017 / Notices 58671

will continue to calculate and apply the Electronic Comments SECURITIES AND EXCHANGE
Crossing Fee Cap in a uniform manner COMMISSION
to all ISE Members that are eligible for • Use the Commission’s internet
comment form (http://www.sec.gov/ [Release No. 34–82236; File No. SR–
this cap. CboeBZX–2017–009]
rules/sro.shtml); or
B. Self-Regulatory Organization’s
• Send an email to rule-comments@ Self-Regulatory Organizations; Cboe
Statement on Burden on Competition
sec.gov. Please include File Number SR– BZX Exchange, Inc.; Notice of Filing
The Exchange does not believe that ISE–2017–95 on the subject line. and Immediate Effectiveness of a
the proposed rule change will impose Proposed Rule Change Related to
Paper Comments Transaction Fees for the Exchange’s
any burden on competition not
necessary or appropriate in furtherance • Send paper comments in triplicate Equity Platform
of the purposes of the Act. The proposal to Secretary, Securities and Exchange December 7, 2017.
is intended to provide greater Commission, 100 F Street NE, Pursuant to Section 19(b)(1) of the
transparency to the Schedule of Fees Washington, DC 20549–1090. Securities Exchange Act of 1934
and does not amend the current manner (‘‘Act’’),1 and Rule 19b–4 thereunder,2
in which the Exchange calculates or All submissions should refer to File
Number SR–ISE–2017–95. This file notice is hereby given that on November
applies the Crossing Fee Cap. The 30, 2017, Cboe BZX Exchange, Inc.
Exchange’s proposal to add the number should be included on the
(‘‘BZX’’ or ‘‘Exchange’’) filed with the
clarifying language regarding the subject line if email is used. To help the
Securities and Exchange Commission
Crossing Fee Cap to the Schedule of Commission process and review your (‘‘Commission’’) the proposed rule
Fees does not impose an undue burden comments more efficiently, please use change as described in Items I, II and III
on competition because the Exchange only one method. The Commission will below, which Items have been prepared
will continue to calculate and apply the post all comments on the Commission’s by the Exchange. The Exchange has
Crossing Fee Cap in a uniform manner internet website (http://www.sec.gov/ designated the proposed rule change as
to all ISE Members that are eligible for rules/sro.shtml). Copies of the one establishing or changing a member
this cap. submission, all subsequent due, fee, or other charge imposed by the
amendments, all written statements Exchange under Section 19(b)(3)(A)(ii)
C. Self-Regulatory Organization’s with respect to the proposed rule of the Act 3 and Rule 19b–4(f)(2)
Statement on Comments on the change that are filed with the thereunder,4 which renders the
Proposed Rule Change Received From Commission, and all written proposed rule change effective upon
Members, Participants, or Others communications relating to the filing with the Commission. The
No written comments were either proposed rule change between the Commission is publishing this notice to
solicited or received. Commission and any person, other than solicit comments on the proposed rule
those that may be withheld from the change from interested persons.
III. Date of Effectiveness of the public in accordance with the I. Self-Regulatory Organization’s
Proposed Rule Change and Timing for provisions of 5 U.S.C. 552, will be Statement of the Terms of Substance of
Commission Action available for website viewing and the Proposed Rule Change
The foregoing rule change has become printing in the Commission’s Public
The Exchange filed a proposal to
effective pursuant to Section Reference Room, 100 F Street NE,
amend the fee schedule applicable to
19(b)(3)(A)(ii) of the Act,7 and Rule Washington, DC 20549, on official Members 5 and non-Members of the
19b–4(f)(2) 8 thereunder. At any time business days between the hours of Exchange pursuant to BZX Rules 15.1(a)
within 60 days of the filing of the 10:00 a.m. and 3:00 p.m. Copies of the and (c).
proposed rule change, the Commission filing also will be available for The text of the proposed rule change
summarily may temporarily suspend inspection and copying at the principal is available at the Exchange’s website at
such rule change if it appears to the office of the Exchange. All comments www.markets.cboe.com, at the principal
Commission that such action is: (i) received will be posted without change. office of the Exchange, and at the
Necessary or appropriate in the public Persons submitting comments are Commission’s Public Reference Room.
interest; (ii) for the protection of cautioned that we do not redact or edit
II. Self-Regulatory Organization’s
investors; or (iii) otherwise in personal identifying information from
Statement of the Purpose of, and
furtherance of the purposes of the Act. comment submissions. You should Statutory Basis for, the Proposed Rule
If the Commission takes such action, the submit only information that you wish Change
Commission shall institute proceedings to make available publicly. All
submissions should refer to File In its filing with the Commission, the
to determine whether the proposed rule
Number SR–ISE–2017–95 and should be Exchange included statements
should be approved or disapproved.
concerning the purpose of and basis for
submitted on or before January 3, 2018.
IV. Solicitation of Comments the proposed rule change and discussed
For the Commission, by the Division of any comments it received on the
Interested persons are invited to Trading and Markets, pursuant to delegated proposed rule change. The text of these
submit written data, views, and authority.9 statements may be examined at the
arguments concerning the foregoing,
sradovich on DSK3GMQ082PROD with NOTICES

Eduardo A. Aleman,
including whether the proposed rule Assistant Secretary. 1 15 U.S.C. 78s(b)(1).
change is consistent with the Act. [FR Doc. 2017–26820 Filed 12–12–17; 8:45 am]
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(ii).
Comments may be submitted by any of
BILLING CODE 8011–01–P 4 17 CFR 240.19b–4(f)(2).
the following methods: 5 The term ‘‘Member’’ is defined as ‘‘any

registered broker or dealer that has been admitted
7 15 U.S.C. 78s(b)(3)(A)(ii). to membership in the Exchange.’’ See Exchange
8 17 CFR 240.19b–4(f)(2). 9 17 CFR 200.30–3(a)(12). Rule 1.5(n).

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Document Created: 2017-12-13 01:23:28
Document Modified: 2017-12-13 01:23:28
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 58670