82 FR 60453 - Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Primary Market Maker Obligations

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 243 (December 20, 2017)

Page Range		60453-60455
FR Document		2017-27338
Federal Register, Volume 82 Issue 243 (Wednesday, December 20, 2017)
[Federal Register Volume 82, Number 243 (Wednesday, December 20, 2017)]
[Notices]
[Pages 60453-60455]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-27338]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82318; File No. SR-ISE-2017-104]


Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Relating to Primary 
Market Maker Obligations

December 14, 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 29, 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 Rule 701, entitled ``Openings,'' to 
specify the obligations of a Primary Market Maker (``PMM'') when 
entering Valid Width Quotes \3\ during the Opening Process.
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    \3\ A ``Valid Width Quote'' is a two-sided electronic quotation 
submitted by a Market Maker that consists of a bid/ask differential 
that is compliant with Rule 803(b)(4). See Rule 701(a)(8).
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    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 Exchange is proposing to amend Rule 701, Openings, to amend the 
obligations of a PMM when entering Valid Width Quotes during the 
Opening Process. In addition, the Exchange proposes to make clear the 
obligations of a PMM and a Competitive Market Maker (``CMM'') once an 
options series has opened.
    Currently, Rule 701(c)(1) provides, the Opening Process for an 
option series will be conducted pursuant to paragraphs (f)-(j) of ISE 
Rule 701 on or after 9:30 a.m. Eastern Time if: The ABBO, if any, is 
not crossed; and the system has received, within two minutes (or such 
shorter time as determined by the Exchange and disseminated to 
membership on the Exchange's website) of the opening trade or quote on 
the market for the underlying security in the case of equity options 
or, in the case of index options, within two minutes of the receipt of 
the opening price in the underlying index (or such shorter time as 
determined by the Exchange and disseminated to membership on the 
Exchange's website), or within two minutes of market opening for the 
underlying security in the case of U.S. dollar-settled foreign currency 
options (or such shorter time as determined by the Exchange and 
disseminated to membership on the Exchange's website) any of the 
following: (i) The PMM's Valid Width Quote; (ii) the Valid Width Quotes 
of at least two CMM or (iii) if neither the PMM's Valid Width Quote nor 
the Valid Width Quotes of two CMMs have been submitted within such 
timeframe, one CMM has submitted a Valid Width Quote.
    Thereafter, Rule 701(c)(3) specifies that the PMM assigned in a 
particular equity or index option must enter a Valid Width Quote, in 
90% of their assigned series, not later than one minute following the 
dissemination of a quote or trade by the market for the underlying 
security or, in the case of index options, following the receipt of the 
opening price in the underlying index. The PMM assigned in a particular 
U.S. dollar-settled foreign currency option must enter a Valid Width 
Quote, in 90% of their assigned series, not later than one minute after 
the announced market opening. PMMs must promptly enter a Valid Width 
Quote in the remainder of their assigned series, which did not open 
within one minute following the dissemination of a quote or trade by 
the market for the underlying security or, in the case of index 
options, following the receipt of the opening price in the underlying 
index or, with respect to U.S. dollar-settled foreign currency options, 
following the announced market opening.
    The Exchange proposes to make clear that a PMM has the obligations 
specified in ISE Rule 701(c)(3) to promptly enter a Valid Width Quote 
in the remainder of their assigned series in cases where the PMM's 
assigned series was not already opened by a CMM as permitted by Rule 
701(c)(1)(ii) and (iii) as noted herein. The PMM would continue to have 
the ultimate obligation to open each assigned series, however this rule 
change would not require the PMM to enter a Valid Width Quote for the 
10% of their assigned series, not later than one minute following the 
dissemination of a quote or trade by the market for the underlying 
security or, in the case of index options, following the receipt of the 
opening price in the underlying index during the Opening Process if an 
options series has opened pursuant to Rule 701(c)(1)(ii) and (iii) 
within the timeframe specified for the PMM to enter a Valid Width Quote 
as noted in Rule 701(c)(3). Also, the PMM assigned in a particular U.S. 
dollar-settled foreign currency option would not be required to enter a 
Valid Width Quote for 10% of their assigned series, not later than one 
minute after the announced market opening during the Opening Process if 
an options series opened pursuant to Rule 701(c)(1)(ii) and (iii) 
within the timeframe specified for the PMM to enter a Valid Width Quote 
as noted in Rule 701(c)(3).
    Today ISE Rule 701 requires a PMM to open the market and provides 
an alternative mechanism to permit an alternative opening by a CMM.\4\ 
The proposal seeks to make clear the obligations of the PMM with 
respect to options series that were open by a CMM as well as the 
quoting obligations of a CMM that opened the options series. The 
Exchange proposes to amend ISE Rule 701(c)(3) to state that once an 
option series has opened pursuant to Rule 701(c)(1)(i)-(iii), a PMM 
must submit continuous, two-sided quotes in

[[Page 60454]]

such option series pursuant to Supplementary .01 to ISE Rule 804. The 
Exchange also proposes to amend Rule 701(c)(4) to state that a CMM that 
submits a quote during the opening in any option series pursuant to 
Rule 701(c)(1)(ii) or (iii) must submit continuous, two-sided quotes in 
such options series pursuant to ISE Rule 804(e)(2)(iii) once an option 
series has opened. Specifically, the Exchange proposes to add rule text 
to Rule 701(c)(3) to provide that ``once an options series has opened f 
pursuant to Rule 701(c)(1)(i)-(iii), a PMM must submit continuous, two-
sided quotes in such options series pursuant to Supplementary Material 
.01 to Rule 804.'' Further, the Exchange proposes to add rule text to 
Rule 701(c)(4) to states that ``A CMM that submits a quote pursuant to 
Rule 701 in any option series when the PMM's quote has not been 
submitted shall be required, once an options series has opened, to 
submit continuous, two-sided quotes in such option series pursuant to 
Rule 804(e)(2)(iii).''
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    \4\ See ISE Rule 701(c)(1)(i)-(iii).
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    The Exchange proposes to make clear that a PMM has an obligation to 
enter Valid Width Quotes during the Opening Process within the 
timeframes specified in Rule 701(c)(3). In the event that an options 
series opened pursuant to Rule 701(c)(1)(ii) and (iii), a PMM would be 
required to submit continuous, two-sided quotes in such options series 
pursuant to Supplementary Material .01 to Rule 804. Also, in this 
instance, a CMM would be required to submit continuous, two-sided 
quotes in such option series pursuant to Rule 804(e)(2)(iii). The 
Exchange notes that a CMM would not have an obligation to quote in such 
option series pursuant to Rule 804(e)(2)(iii), unless the CMM submitted 
a quote pursuant to Rule 701 or otherwise submitted a quote intra-
day.\5\ The purpose of this new rule text is to make clear the quoting 
obligations for both PMMs and CMMs during the opening and the manner in 
which Rule 701, relating to the Opening Process, and Rule 804, relating 
to Market Maker quoting obligations, interact with each other.
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    \5\ See ISE Rule 804(e)(2)(i) which states, ``On any given day, 
a Competitive Market Maker is not required to enter quotations in 
the options classes to which it is appointed.''
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\6\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\7\ in particular, in that it is designed to promote 
just and equitable principles of trade, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general to protect investors and the public interest by 
amending ISE Rule 701(c)(3) to further specify a PMM's obligations 
during the Opening Process and once an options series as opened as well 
as the obligations of a CMM to the extent that an options series opened 
pursuant to Rule 701(c)(1)(ii) and (iii). The Exchange believes that 
this proposal is consistent with the Act because a PMM continues to be 
responsible to enter Valid Width Quotes during the Opening Process and 
thereafter submit continuous, two-sided quotes in such options series 
pursuant to Supplementary Material .01 to Rule 804. In the event that 
an options series opened pursuant to Rule 701(c)(1)(ii) and (iii), the 
CMM must submit continuous, two-sided quotes in such option series, 
once the options series has opened, pursuant to Rule 804(e)(2)(iii). 
The Exchange believes that this proposed rule change will make clear 
the obligations of the PMM with respect to submitting Valid Width 
Quotes and thereafter, once an options series has opened, submitting 
continuous two-sided quotes, when a CMM may have already entered a 
quote to open an options series. The Exchange's proposal to add rule 
text to clearly specify the quoting obligations of a PMM and CMM during 
the Opening Process and once an option series has opened will provide 
greater clarity to the Opening Process and also to the interplay 
between quoting obligations during the Opening Process and intra-day 
quoting obligations noted within Rule 804.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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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. Once an options series has 
opened, [sic] a PMM continues to be responsible to enter Valid Width 
Quotes during the Opening Process and thereafter submit continuous, 
two-sided quotes in such options series pursuant to Supplementary 
Material .01 to Rule 804. Also, if an options series opened pursuant to 
ISE Rule 701(c)(1)(ii) or (iii), a CMM shall be required to submit 
continuous, two-sided quotes in such option series, once an option 
series has opened. pursuant to Rule 804(e)(2)(iii). This proposed rule 
text makes clear that CMMs are required to submit continuous, two-sided 
quotes in such option series pursuant to Rule 804(e)(2)(iii), in the 
event an options series opened pursuant to Rule 701(c)(1)(ii) and 
(iii). The proposal provides greater clarity to the Opening Process and 
also to the interplay between quoting obligations during the Opening 
Process and intra-day quoting obligations noted within Rule 804.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \8\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\9\
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    \8\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative prior to 30 days after the date of filing. 
However, Rule 19b-4(f)(6)(iii) \10\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. In its filing with the Commission, 
the Exchange requests that the Commission waive the 30-day operative 
delay. The Exchange represents that the proposed rule change would 
clarify the quoting obligations for both PMMs and CMMs during the 
Opening Process and the manner in which Rule 701, relating to the 
Opening Process, and Rule 804, relating to Market Maker quoting 
obligations, interact with each other. According to the Exchange, these 
obligations should be immediately clarified to prevent confusion and 
uncertainty for Market Makers quoting on the Exchange. For the reasons 
articulated by the Exchange, the Commission believes that waiver of the 
30-day operative delay is consistent

[[Page 60455]]

with the protection of investors and the public interest. Therefore, 
the Commission designates the proposed rule change to be operative upon 
filing.\11\
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    \10\ 17 CFR 240.19b-4(f)(6)(iii).
    \11\ For purposes only of waiving the 30-day operative delay, 
the Commission also has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

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

Electronic 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-2017-104 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-2017-104. 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-2017-104 and should be submitted on 
or before January 10, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-27338 Filed 12-19-17; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 82, No. 243 / Wednesday, December 20, 2017 / Notices 60453

be submitted on or before January 10, any comments it received on the particular U.S. dollar-settled foreign
2018. proposed rule change. The text of these currency option must enter a Valid
For the Commission, by the Division of statements may be examined at the Width Quote, in 90% of their assigned
Trading and Markets, pursuant to delegated places specified in Item IV below. The series, not later than one minute after
authority.15 Exchange has prepared summaries, set the announced market opening. PMMs
Eduardo A. Aleman, forth in sections A, B, and C below, of must promptly enter a Valid Width
Assistant Secretary. the most significant aspects of such Quote in the remainder of their assigned
[FR Doc. 2017–27346 Filed 12–19–17; 8:45 am] statements. series, which did not open within one
minute following the dissemination of a
BILLING CODE 8011–01–P A. Self-Regulatory Organization’s quote or trade by the market for the
Statement of the Purpose of, and underlying security or, in the case of
Statutory Basis for, the Proposed Rule index options, following the receipt of
SECURITIES AND EXCHANGE Change
COMMISSION the opening price in the underlying
1. Purpose index or, with respect to U.S. dollar-
[Release No. 34–82318; File No. SR–ISE– settled foreign currency options,
2017–104] The Exchange is proposing to amend
following the announced market
Rule 701, Openings, to amend the
Self-Regulatory Organizations; Nasdaq opening.
obligations of a PMM when entering The Exchange proposes to make clear
ISE, LLC; Notice of Filing and Valid Width Quotes during the Opening that a PMM has the obligations specified
Immediate Effectiveness of Proposed Process. In addition, the Exchange in ISE Rule 701(c)(3) to promptly enter
Rule Change Relating to Primary proposes to make clear the obligations a Valid Width Quote in the remainder
Market Maker Obligations of a PMM and a Competitive Market of their assigned series in cases where
Maker (‘‘CMM’’) once an options series the PMM’s assigned series was not
December 14, 2017
has opened. already opened by a CMM as permitted
Pursuant to Section 19(b)(1) of the Currently, Rule 701(c)(1) provides, the
Securities Exchange Act of 1934 by Rule 701(c)(1)(ii) and (iii) as noted
Opening Process for an option series herein. The PMM would continue to
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 will be conducted pursuant to
notice is hereby given that on November have the ultimate obligation to open
paragraphs (f)–(j) of ISE Rule 701 on or each assigned series, however this rule
29, 2017, Nasdaq ISE, LLC (‘‘ISE’’ or
after 9:30 a.m. Eastern Time if: The change would not require the PMM to
‘‘Exchange’’) filed with the Securities
ABBO, if any, is not crossed; and the enter a Valid Width Quote for the 10%
and Exchange Commission
system has received, within two of their assigned series, not later than
(‘‘Commission’’) the proposed rule
minutes (or such shorter time as one minute following the dissemination
change as described in Items I and II
determined by the Exchange and of a quote or trade by the market for the
below, which Items have been prepared
disseminated to membership on the underlying security or, in the case of
by the Exchange. The Commission is
Exchange’s website) of the opening index options, following the receipt of
publishing this notice to solicit
trade or quote on the market for the the opening price in the underlying
comments on the proposed rule change
from interested persons. underlying security in the case of equity index during the Opening Process if an
options or, in the case of index options, options series has opened pursuant to
I. Self-Regulatory Organization’s within two minutes of the receipt of the Rule 701(c)(1)(ii) and (iii) within the
Statement of the Terms of Substance of opening price in the underlying index timeframe specified for the PMM to
the Proposed Rule Change (or such shorter time as determined by enter a Valid Width Quote as noted in
The Exchange proposes to amend the Exchange and disseminated to Rule 701(c)(3). Also, the PMM assigned
Rule 701, entitled ‘‘Openings,’’ to membership on the Exchange’s website), in a particular U.S. dollar-settled foreign
specify the obligations of a Primary or within two minutes of market currency option would not be required
Market Maker (‘‘PMM’’) when entering opening for the underlying security in to enter a Valid Width Quote for 10%
Valid Width Quotes 3 during the the case of U.S. dollar-settled foreign of their assigned series, not later than
Opening Process. currency options (or such shorter time one minute after the announced market
The text of the proposed rule change as determined by the Exchange and opening during the Opening Process if
is available on the Exchange’s website at disseminated to membership on the an options series opened pursuant to
http://ise.cchwallstreet.com/, at the Exchange’s website) any of the Rule 701(c)(1)(ii) and (iii) within the
principal office of the Exchange, and at following: (i) The PMM’s Valid Width timeframe specified for the PMM to
the Commission’s Public Reference Quote; (ii) the Valid Width Quotes of at enter a Valid Width Quote as noted in
Room. least two CMM or (iii) if neither the Rule 701(c)(3).
PMM’s Valid Width Quote nor the Valid Today ISE Rule 701 requires a PMM
II. Self-Regulatory Organization’s Width Quotes of two CMMs have been to open the market and provides an
Statement of the Purpose of, and submitted within such timeframe, one alternative mechanism to permit an
Statutory Basis for, the Proposed Rule CMM has submitted a Valid Width alternative opening by a CMM.4 The
Change Quote. proposal seeks to make clear the
In its filing with the Commission, the Thereafter, Rule 701(c)(3) specifies obligations of the PMM with respect to
Exchange included statements that the PMM assigned in a particular options series that were open by a CMM
concerning the purpose of and basis for equity or index option must enter a as well as the quoting obligations of a
the proposed rule change and discussed Valid Width Quote, in 90% of their
sradovich on DSK3GMQ082PROD with NOTICES

CMM that opened the options series.
assigned series, not later than one The Exchange proposes to amend ISE
15 17 CFR 200.30–3(a)(12). minute following the dissemination of a Rule 701(c)(3) to state that once an
1 15 U.S.C. 78s(b)(1). quote or trade by the market for the option series has opened pursuant to
2 17 CFR 240.19b–4.
3 A ‘‘Valid Width Quote’’ is a two-sided electronic
underlying security or, in the case of Rule 701(c)(1)(i)–(iii), a PMM must
quotation submitted by a Market Maker that
index options, following the receipt of submit continuous, two-sided quotes in
consists of a bid/ask differential that is compliant the opening price in the underlying
with Rule 803(b)(4). See Rule 701(a)(8). index. The PMM assigned in a 4 See ISE Rule 701(c)(1)(i)–(iii).

VerDate Sep<11>2014 21:36 Dec 19, 2017 Jkt 244001 PO 00000 Frm 00085 Fmt 4703 Sfmt 4703 E:\FR\FM\20DEN1.SGM 20DEN1
60454 Federal Register / Vol. 82, No. 243 / Wednesday, December 20, 2017 / Notices

such option series pursuant to promote just and equitable principles of continuous, two-sided quotes in such
Supplementary .01 to ISE Rule 804. The trade, to remove impediments to and option series pursuant to Rule
Exchange also proposes to amend Rule perfect the mechanism of a free and 804(e)(2)(iii), in the event an options
701(c)(4) to state that a CMM that open market and a national market series opened pursuant to Rule
submits a quote during the opening in system, and, in general to protect 701(c)(1)(ii) and (iii). The proposal
any option series pursuant to Rule investors and the public interest by provides greater clarity to the Opening
701(c)(1)(ii) or (iii) must submit amending ISE Rule 701(c)(3) to further Process and also to the interplay
continuous, two-sided quotes in such specify a PMM’s obligations during the between quoting obligations during the
options series pursuant to ISE Rule Opening Process and once an options Opening Process and intra-day quoting
804(e)(2)(iii) once an option series has series as opened as well as the obligations noted within Rule 804.
opened. Specifically, the Exchange obligations of a CMM to the extent that
C. Self-Regulatory Organization’s
proposes to add rule text to Rule an options series opened pursuant to
Statement on Comments on the
701(c)(3) to provide that ‘‘once an Rule 701(c)(1)(ii) and (iii). The
Proposed Rule Change Received From
options series has opened f pursuant to Exchange believes that this proposal is
Members, Participants, or Others
Rule 701(c)(1)(i)–(iii), a PMM must consistent with the Act because a PMM
submit continuous, two-sided quotes in continues to be responsible to enter No written comments were either
such options series pursuant to Valid Width Quotes during the Opening solicited or received.
Supplementary Material .01 to Rule Process and thereafter submit III. Date of Effectiveness of the
804.’’ Further, the Exchange proposes to continuous, two-sided quotes in such Proposed Rule Change and Timing for
add rule text to Rule 701(c)(4) to states options series pursuant to Commission Action
that ‘‘A CMM that submits a quote Supplementary Material .01 to Rule 804.
pursuant to Rule 701 in any option In the event that an options series Because the foregoing proposed rule
series when the PMM’s quote has not opened pursuant to Rule 701(c)(1)(ii) change does not: (i) Significantly affect
been submitted shall be required, once and (iii), the CMM must submit the protection of investors or the public
an options series has opened, to submit continuous, two-sided quotes in such interest; (ii) impose any significant
continuous, two-sided quotes in such option series, once the options series burden on competition; and (iii) become
option series pursuant to Rule has opened, pursuant to Rule operative for 30 days from the date on
804(e)(2)(iii).’’ 804(e)(2)(iii). The Exchange believes which it was filed, or such shorter time
The Exchange proposes to make clear that this proposed rule change will as the Commission may designate, it has
that a PMM has an obligation to enter make clear the obligations of the PMM become effective pursuant to Section
Valid Width Quotes during the Opening with respect to submitting Valid Width 19(b)(3)(A)(iii) of the Act 8 and
Process within the timeframes specified Quotes and thereafter, once an options subparagraph (f)(6) of Rule 19b–4
in Rule 701(c)(3). In the event that an series has opened, submitting thereunder.9
options series opened pursuant to Rule continuous two-sided quotes, when a A proposed rule change filed under
701(c)(1)(ii) and (iii), a PMM would be CMM may have already entered a quote Rule 19b–4(f)(6) normally does not
required to submit continuous, two- to open an options series. The become operative prior to 30 days after
sided quotes in such options series Exchange’s proposal to add rule text to the date of filing. However, Rule 19b–
pursuant to Supplementary Material .01 clearly specify the quoting obligations of 4(f)(6)(iii) 10 permits the Commission to
to Rule 804. Also, in this instance, a a PMM and CMM during the Opening designate a shorter time if such action
CMM would be required to submit Process and once an option series has is consistent with the protection of
continuous, two-sided quotes in such opened will provide greater clarity to investors and the public interest. In its
option series pursuant to Rule the Opening Process and also to the filing with the Commission, the
804(e)(2)(iii). The Exchange notes that a interplay between quoting obligations Exchange requests that the Commission
CMM would not have an obligation to during the Opening Process and intra- waive the 30-day operative delay. The
quote in such option series pursuant to day quoting obligations noted within Exchange represents that the proposed
Rule 804(e)(2)(iii), unless the CMM Rule 804. rule change would clarify the quoting
submitted a quote pursuant to Rule 701 obligations for both PMMs and CMMs
or otherwise submitted a quote intra- B. Self-Regulatory Organization’s during the Opening Process and the
day.5 The purpose of this new rule text Statement on Burden on Competition manner in which Rule 701, relating to
is to make clear the quoting obligations The Exchange does not believe that the Opening Process, and Rule 804,
for both PMMs and CMMs during the the proposed rule change will impose relating to Market Maker quoting
opening and the manner in which Rule any burden on competition not obligations, interact with each other.
701, relating to the Opening Process, necessary or appropriate in furtherance According to the Exchange, these
and Rule 804, relating to Market Maker of the purposes of the Act. Once an obligations should be immediately
quoting obligations, interact with each options series has opened, [sic] a PMM clarified to prevent confusion and
other. continues to be responsible to enter uncertainty for Market Makers quoting
Valid Width Quotes during the Opening on the Exchange. For the reasons
2. Statutory Basis Process and thereafter submit articulated by the Exchange, the
The Exchange believes that its continuous, two-sided quotes in such Commission believes that waiver of the
proposal is consistent with Section 6(b) options series pursuant to 30-day operative delay is consistent
of the Act,6 in general, and furthers the Supplementary Material .01 to Rule 804.
8 15 U.S.C. 78s(b)(3)(A)(iii).
objectives of Section 6(b)(5) of the Act,7 Also, if an options series opened
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9 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
in particular, in that it is designed to pursuant to ISE Rule 701(c)(1)(ii) or (iii), 4(f)(6) requires a self-regulatory organization to give
a CMM shall be required to submit the Commission written notice of its intent to file
5 See ISE Rule 804(e)(2)(i) which states, ‘‘On any
continuous, two-sided quotes in such the proposed rule change at least five business days
given day, a Competitive Market Maker is not option series, once an option series has prior to the date of filing of the proposed rule
required to enter quotations in the options classes change, or such shorter time as designated by the
to which it is appointed.’’ opened. pursuant to Rule 804(e)(2)(iii). Commission. The Exchange has satisfied this
6 15 U.S.C. 78f(b). This proposed rule text makes clear that requirement.
7 15 U.S.C. 78f(b)(5). CMMs are required to submit 10 17 CFR 240.19b–4(f)(6)(iii).

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Federal Register / Vol. 82, No. 243 / Wednesday, December 20, 2017 / Notices 60455

with the protection of investors and the Reference Room, 100 F Street NE, has received no comment letters on the
public interest. Therefore, the Washington, DC 20549, on official proposed rule change.
Commission designates the proposed business days between the hours of Section 19(b)(2) of the Act 5 provides
rule change to be operative upon 10:00 a.m. and 3:00 p.m. Copies of the that, within 45 days of the publication
filing.11 filing also will be available for of notice of the filing of a proposed rule
At any time within 60 days of the inspection and copying at the principal change, or within such longer period up
filing of the proposed rule change, the office of the Exchange. All comments to 90 days as the Commission may
Commission summarily may received will be posted without change. designate if it finds such longer period
temporarily suspend such rule change if Persons submitting comments are to be appropriate and publishes its
it appears to the Commission that such cautioned that we do not redact or edit reasons for so finding or as to which the
action is necessary or appropriate in the personal identifying information from self-regulatory organization consents,
public interest, for the protection of comment submissions. You should the Commission shall either approve the
investors, or otherwise in furtherance of submit only information that you wish proposed rule change, disapprove the
the purposes of the Act. If the to make available publicly. All proposed rule change, or institute
Commission takes such action, the submissions should refer to File proceedings to determine whether the
Commission shall institute proceedings Number SR–ISE–2017–104 and should proposed rule change should be
to determine whether the proposed rule be submitted on or before January 10, disapproved. The 45th day after
should be approved or disapproved. 2018. publication of the notice for this
IV. Solicitation of Comments proposed rule change is December 15,
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
2017. The Commission is extending this
Interested persons are invited to 45-day time period.
submit written data, views, and authority.12
The Commission finds that it is
arguments concerning the foregoing, Eduardo A. Aleman,
appropriate to designate a longer period
including whether the proposed rule Assistant Secretary. within which to take action on the
change is consistent with the Act. [FR Doc. 2017–27338 Filed 12–19–17; 8:45 am] proposed rule change so that it has
Comments may be submitted by any of BILLING CODE 8011–01–P sufficient time to consider the proposed
the following methods: rule change. Accordingly, the
Electronic Comments Commission, pursuant to Section
SECURITIES AND EXCHANGE 19(b)(2) of the Act,6 designates January
• Use the Commission’s internet COMMISSION 29, 2018, as the date by which the
comment form (http://www.sec.gov/
Commission shall either approve or
rules/sro.shtml); or
• Send an email to rule-comments@
[Release No. 34–82323; File No. SR– disapprove or institute proceedings to
NYSEArca–2017–99] determine whether to disapprove the
sec.gov. Please include File Number SR–
ISE–2017–104 on the subject line. proposed rule change (File Number SR–
Self-Regulatory Organizations; NYSE NYSEArca–2017–99).
Paper Comments Arca, Inc.; Notice of Designation of a
For the Commission, by the Division of
Longer Period for Commission Action
• Send paper comments in triplicate Trading and Markets, pursuant to delegated
on Proposed Rule Change, as Modified authority.7
to Secretary, Securities and Exchange
by Amendment No. 1, To List and Eduardo A. Aleman,
Commission, 100 F Street NE,
Trade Shares of the Hartford
Washington, DC 20549–1090. Assistant Secretary.
Schroders Tax-Aware Bond ETF Under
All submissions should refer to File NYSE Arca Rule 8.600–E [FR Doc. 2017–27344 Filed 12–19–17; 8:45 am]
Number SR–ISE–2017–104. This file BILLING CODE 8011–01–P
number should be included on the December 14, 2017.
subject line if email is used. To help the
On October 11, 2017, NYSE Arca, Inc.
Commission process and review your SECURITIES AND EXCHANGE
(‘‘Exchange’’) filed with the Securities
comments more efficiently, please use COMMISSION
and Exchange Commission
only one method. The Commission will [Release No. 34–82320; File No. SR–ISE–
(‘‘Commission’’), pursuant to Section
post all comments on the Commission’s 2017–103]
19(b)(1) of the Securities Exchange Act
internet website (http://www.sec.gov/
of 1934 (‘‘Act’’) 1 and Rule 19b–4
rules/sro.shtml). Copies of the Self-Regulatory Organizations; Nasdaq
thereunder,2 a proposed rule change to
submission, all subsequent ISE, LLC; Notice of Filing and
list and trade shares of the Hartford
amendments, all written statements Immediate Effectiveness of Proposed
Schroders Tax-Aware Bond ETF under
with respect to the proposed rule Rule Change To Amend the
NYSE Arca Rule 8.600–E. The proposed
change that are filed with the Calculation of the Member Order
rule change was published for comment
Commission, and all written Routing Program
in the Federal Register on October 31,
communications relating to the
2017.3 On November 21, 2017, the December 14, 2017.
proposed rule change between the
Exchange filed Amendment No. 1 to the Pursuant to Section 19(b)(1) of the
Commission and any person, other than
proposed rule change.4 The Commission Securities Exchange Act of 1934
those that may be withheld from the
public in accordance with the (‘‘Act’’),1 and Rule 19b–4 thereunder,2
provisions of 5 U.S.C. 552, will be
12 17 CFR 200.30–3(a)(12). notice is hereby given that on November
sradovich on DSK3GMQ082PROD with NOTICES

1 15 U.S.C. 78s(b)(1).
available for website viewing and 29, 2017, Nasdaq ISE, LLC (‘‘ISE’’ or
2 17 CFR 240.19b–4.
printing in the Commission’s Public ‘‘Exchange’’) filed with the Securities
3 See Securities Exchange Act Release No. 81944

(October 25, 2017), 82 FR 50461. 5 15
11 For purposes only of waiving the 30-day 4 Amendment No. 1, which amended and U.S.C. 78s(b)(2).
6 Id.
operative delay, the Commission also has replaced the proposed rule change in its entirety,
7 17 CFR 200.30–3(a)(31).
considered the proposed rule’s impact on is available on the Commission’s website at: https://
1 15 U.S.C. 78s(b)(1).
efficiency, competition, and capital formation. See www.sec.gov/comments/sr-nysearca-2017-99/
15 U.S.C. 78c(f). nysearca201799-2711017-161518.pdf. 2 17 CFR 240.19b–4.

VerDate Sep<11>2014 21:36 Dec 19, 2017 Jkt 244001 PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 E:\FR\FM\20DEN1.SGM 20DEN1
Document Created: 2018-10-25 10:58:10
Document Modified: 2018-10-25 10:58:10
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 60453