82 FR 61065 - Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Penny Pilot Program
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 246 (December 26, 2017)
Federal Register Volume 82, Issue 246 (December 26, 2017)
| Page Range | 61065-61067 | |
| FR Document | 2017-27697 |
[Federal Register Volume 82, Number 246 (Tuesday, December 26, 2017)] [Notices] [Pages 61065-61067] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-27697] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-82357; File No. SR-ISE-2017-107] Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Penny Pilot Program December 19, 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 December 11, 2017, Nasdaq ISE, LLC (``ISE'' or ``Exchange'') filed with the Securities and Exchange Commission (``SEC'' or ``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. --------------------------------------------------------------------------- [[Page 61066]] I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend its rules to extend a pilot program to quote and to trade certain options classes in penny increments (``Penny Pilot Program''). 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 Under the Penny Pilot Program, the minimum price variation for all participating options classes, except for the Nasdaq-100 Index Tracking Stock (``QQQQ''), the SPDR S&P 500 Exchange Traded Fund (``SPY'') and the iShares Russell 2000 Index Fund (``IWM''), is $0.01 for all quotations in options series that are quoted at less than $3 per contract and $0.05 for all quotations in options series that are quoted at $3 per contract or greater. QQQQ, SPY and IWM are quoted in $0.01 increments for all options series. The Penny Pilot Program is currently scheduled to expire on December 31, 2017.\3\ The Exchange proposes to extend the Penny Pilot Program through June 30, 2018, and to provide a revised date for adding replacement issues to the Penny Pilot Program. The Exchange proposes that any Penny Pilot Program issues that have been delisted may be replaced on the second trading day following January 1, 2018. The replacement issues will be selected based on trading activity for the most recent six month period excluding the month immediately preceding the replacement (i.e., beginning June 1, 2017, and ending November 30, 2017). This filing does not propose any substantive changes to the Penny Pilot Program: All classes currently participating will remain the same and all minimum increments will remain unchanged. The Exchange believes the benefits to public customers and other market participants who will be able to express their true prices to buy and sell options have been demonstrated to outweigh any increase in quote traffic. --------------------------------------------------------------------------- \3\ See Exchange Act Release No. 80827 (May 31, 2017), 82 FR 26168 (June 6, 2017) (SR-ISE-2017-48). --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6(b) of the Act.\4\ Specifically, the proposed rule change is consistent with Section 6(b)(5) of the Act,\5\ because it is designed to promote just and equitable principles of trade, remove impediments to and perfect the mechanisms of a free and open market and a national market system and, in general, to protect investors and the public interest. In particular, the proposed rule change, which extends the Penny Pilot Program for an additional six months, will enable public customers and other market participants to express their true prices to buy and sell options to the benefit of all market participants. --------------------------------------------------------------------------- \4\ 15 U.S.C. 78f(b). \5\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,\6\ the Exchange does not believe that the proposed rule change will impose any burden on intermarket or intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. Specifically, the Exchange believes that, by extending the expiration of the Penny Pilot Program, the proposed rule change will allow for further analysis of the Penny Pilot Program and a determination of how the Penny Pilot Program should be structured in the future. In doing so, the proposed rule change will also serve to promote regulatory clarity and consistency, thereby reducing burdens on the marketplace and facilitating investor protection. --------------------------------------------------------------------------- \6\ 15 U.S.C. 78f(b)(8). --------------------------------------------------------------------------- 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 Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act \7\ and Rule 19b-4(f)(6) thereunder.\8\ Because the 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 prior to 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b- 4(f)(6)(iii) thereunder. --------------------------------------------------------------------------- \7\ 15 U.S.C. 78s(b)(3)(A)(iii). \8\ 17 CFR 240.19b-4(f)(6). --------------------------------------------------------------------------- A proposed rule change filed under Rule 19b-4(f)(6) \9\ normally does not become operative prior to 30 days after the date of the filing.\10\ However, pursuant to Rule 19b-4(f)(6)(iii),\11\ the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because doing so will allow the Pilot Program to continue without interruption in a manner that is consistent with the Commission's prior approval of the extension and expansion of the Pilot Program and will allow the Exchange and the Commission additional time to analyze the impact of the Pilot Program. Accordingly, the Commission designates the proposed [[Page 61067]] rule change as operative upon filing with the Commission.\12\ At any time within 60 days of the filing of such 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 under Section 19(b)(2)(B) \13\ of the Act to determine whether the proposed rule change should be approved or disapproved. --------------------------------------------------------------------------- \9\ 17 CFR 240.19b-4(f)(6). \10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) requires the Exchange to give the Commission written notice of the Exchange's intent to file the proposed rule change along with a brief description and the text of 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 pre-filing requirement. \11\ 17 CFR 240.19b-4(f)(6)(iii). \12\ For purposes only of waiving the operative delay for this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). \13\ 15 U.S.C. 78s(b)(2)(B). --------------------------------------------------------------------------- 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-2017-107 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-2017-107. 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. The Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-ISE-2017-107 and should be submitted on or before January 16, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\14\ --------------------------------------------------------------------------- \14\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-27697 Filed 12-22-17; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 82, No. 246 / Tuesday, December 26, 2017 / Notices 61065
data is unavailable, as is consistent with (C) Clearing Agency’s Statement on those that may be withheld from the
Rule 17Ad–(22)(e)(6)(iv); 46 using Comments on the Proposed Rule public in accordance with the
appropriate methods for measuring Change Received From Members, provisions of 5 U.S.C. 552, will be
credit exposures that account for Participants or Others available for website viewing and
relevant product risk factors and Written comments on the proposed printing in the Commission’s Public
portfolio effects across products, as is rule change were not and are not Reference Room, 100 F Street NE,
consistent with Rules 17Ad–22(e)(6)(i) Washington, DC 20549, on official
intended to be solicited with respect to
and (v); 47 and conducting daily business days between the hours of
the proposed rule change and none have
backtests of its margin models, 10:00 a.m. and 3:00 p.m. Copies of such
been received.
conducting sensitivity analyses of the filing also will be available for
underlying parameters and assumptions III. Date of Effectiveness of the inspection and copying at the principal
monthly, or more frequently, and Proposed Rule Change and Timing for office of OCC and on OCC’s website at
engaging in model validation not less Commission Action https://www.theocc.com/components/
frequently than annually, as is Within 45 days of the date of docs/legal/rules_and_bylaws/sr_occ_17_
consistent with Rules 17Ad–22(e)(vi) publication of this notice in the Federal 007.pdf.
and (vii).48 Register or within such longer period All comments received will be posted
The proposed rule change is not
up to 90 days (i) as the Commission may without change. Persons submitting
inconsistent with the existing rules of
designate if it finds such longer period comments are cautioned that we do not
OCC, including any other rules
proposed to be amended. to be appropriate and publishes its redact or edit personal identifying
reasons for so finding or (ii) as to which information from comment submissions.
(B) Clearing Agency’s Statement on the self-regulatory organization You should submit only information
Burden on Competition consents, the Commission will: that you wish to make available
Section 17A(b)(3)(I) of the Act 49 (A) By order approve or disapprove publicly.
requires that the rules of a clearing the proposed rule change, or All submissions should refer to File
agency not impose any burden on (B) institute proceedings to determine Number SR–OCC–2017–007 and should
competition not necessary or whether the proposed rule change be submitted on or before January 16,
appropriate in furtherance of the should be disapproved. 2018.
purposes of the Act. OCC does not IV. Solicitation of Comments For the Commission, by the Division of
believe that the proposed rule change Trading and Markets, pursuant to delegated
would impact or impose any burden on Interested persons are invited to
submit written data, views and Authority.50
competition. The proposed rule change
arguments concerning the foregoing, Eduardo A. Aleman,
sets forth the framework surrounding
OCC’s margin methodologies. The including whether the proposed rule Assistant Secretary.
Margin Policy primarily describes change is consistent with the Act. [FR Doc. 2017–27695 Filed 12–22–17; 8:45 am]
OCC’s existing policies and practices Comments may be submitted by any of BILLING CODE 8011–01–P
with respect to margin, much of which the following methods:
is also addressed in OCC’s By-Laws and Electronic Comments
Rules. All Clearing Members are subject SECURITIES AND EXCHANGE
to the same methodologies for • Use the Commission’s internet COMMISSION
determining their margin requirements, comment form (http://www.sec.gov/
dictated by the overall risk to OCC rules/sro.shtml); or [Release No. 34–82357; File No. SR–ISE–
presented by the positions in their • Send an email to rule-comments@ 2017–107]
respective portfolios. Consequently, no sec.gov. Please include File Number SR–
Clearing Member is provided a OCC–2017–007 on the subject line. Self-Regulatory Organizations; Nasdaq
competitive advantage over any other Paper Comments ISE, LLC; Notice of Filing and
Clearing Member. Further, the Margin Immediate Effectiveness of Proposed
Policy does not affect Clearing • Send paper comments in triplicate Rule Change To Extend the Penny
Members’ access to OCC’s services or to Brent J. Fields, Secretary, Securities Pilot Program
impose any direct burdens on Clearing and Exchange Commission, 100 F Street
Members. Accordingly, the proposed NE, Washington, DC 20549–1090. December 19, 2017.
rule change would not unfairly inhibit All submissions should refer to File Pursuant to Section 19(b)(1) of the
access to OCC’s services or disadvantage Number SR–OCC–2017–007. This file Securities Exchange Act of 1934
or favor any particular user in number should be included on the (‘‘Act’’),1 and Rule 19b–4 thereunder,2
relationship to another user. subject line if email is used. To help the notice is hereby given that on December
For the foregoing reasons, OCC Commission process and review your 11, 2017, Nasdaq ISE, LLC (‘‘ISE’’ or
believes that the proposed rule change comments more efficiently, please use ‘‘Exchange’’) filed with the Securities
is in the public interest, would be only one method. The Commission will and Exchange Commission (‘‘SEC’’ or
consistent with the requirements of the post all comments on the Commission’s ‘‘Commission’’) the proposed rule
Act applicable to clearing agencies, and internet website (http://www.sec.gov/ change as described in Items I and II,
would not impact or impose a burden rules/sro.shtml). Copies of the below, which Items have been prepared
on competition. submission, all subsequent by the Exchange. The Commission is
ethrower on DSK3G9T082PROD with NOTICES
amendments, all written statements publishing this notice to solicit
46 See supra notes 23 and 27 and accompanying with respect to the proposed rule comments on the proposed rule change
text. change that are filed with the
47 See supra notes 16, 17, 20 and 30 and
from interested persons.
accompanying text.
Commission, and all written
48 See supra notes 37 and 38 and accompanying communications relating to the 50 17 CFR 200.30–3(a)(12).
text. proposed rule change between the 1 15 U.S.C. 78s(b)(1).
49 15 U.S.C. 78q–1(b)(3)(I). Commission and any person, other than 2 17 CFR 240.19b–4.
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![Federal Register / Vol. 82, No. 246 / Tuesday, December 26, 2017 / Notices 61067
rule change as operative upon filing Reference Room, 100 F Street NE, I. Self-Regulatory Organization’s
with the Commission.12 Washington, DC 20549, on official Statement of the Terms of Substance of
At any time within 60 days of the business days between the hours of the Proposed Rule Change
filing of such proposed rule change, the 10:00 a.m. and 3:00 p.m. Copies of the The Exchange is filing a proposal to
Commission summarily may filing also will be available for amend Rule 519C, Mass Cancellation of
temporarily suspend such rule change if inspection and copying at the principal Trading Interest, to adopt new rule text
it appears to the Commission that such office of the Exchange. All comments to reflect the proposed MEO Purge Port
action is necessary or appropriate in the received will be posted without change. functionality, as well as to make
public interest, for the protection of Persons submitting comments are clarifying changes to existing rule text to
investors, or otherwise in furtherance of cautioned that we do not redact or edit more accurately describe current
the purposes of the Act. If the personal identifying information from functionality. The Exchange is also
Commission takes such action, the comment submissions. The Commission proposing to amend its Fee Schedule to
Commission shall institute proceedings does not edit personal identifying identify the New MEO Purge Ports.
under Section 19(b)(2)(B) 13 of the Act to information from submissions. You The text of the proposed rule change
determine whether the proposed rule should submit only information that is available on the Exchange’s website at
change should be approved or you wish to make available publicly. http://www.miaxoptions.com/rule-
disapproved. filings/pearl at MIAX PEARL’s principal
All submissions should refer to File office, and at the Commission’s Public
IV. Solicitation of Comments Number SR–ISE–2017–107 and should Reference Room.
Interested persons are invited to be submitted on or before January 16,
submit written data, views, and 2018. II. Self-Regulatory Organization’s
arguments concerning the foregoing, Statement of the Purpose of, and
For the Commission, by the Division of
including whether the proposed rule Statutory Basis for, the Proposed Rule
Trading and Markets, pursuant to delegated
change is consistent with the Act. Change
authority.14
Comments may be submitted by any of In its filing with the Commission, the
Eduardo A. Aleman,
the following methods: Exchange included statements
Assistant Secretary.
Electronic Comments concerning the purpose of and basis for
[FR Doc. 2017–27697 Filed 12–22–17; 8:45 am] the proposed rule change and discussed
• Use the Commission’s internet BILLING CODE 8011–01–P any comments it received on the
comment form (http://www.sec.gov/ proposed rule change. The text of these
rules/sro.shtml); or statements may be examined at the
• Send an email to rule-comments@ SECURITIES AND EXCHANGE places specified in Item IV below. The
sec.gov. Please include File Number SR– COMMISSION Exchange has prepared summaries, set
ISE–2017–107 on the subject line. forth in sections A, B, and C below, of
Paper Comments [Release No. 34–82349; File No. SR– the most significant aspects of such
• Send paper comments in triplicate PEARL–2017–38] statements.
to Secretary, Securities and Exchange Self-Regulatory Organizations; MIAX A. Self-Regulatory Organization’s
Commission, 100 F Street NE, Statement of the Purpose of, and the
PEARL, LLC; Notice of Filing and
Washington, DC 20549–1090. Statutory Basis for, the Proposed Rule
All submissions should refer to File Immediate Effectiveness of a Proposed
Change
Number SR–ISE–2017–107. This file Rule Change To Adopt a New Type of
number should be included on the MIAX Express Orders Interface Port 1. Purpose
subject line if email is used. To help the Known as a MEO Purge Port and To The Exchange proposes to offer
Commission process and review your Amend MIAX PEARL Rule 519C, Mass Members 3 that connect to the Exchange
comments more efficiently, please use Cancellation of Trading Interest, To using the MIAX Express Orders
only one method. The Commission will Adopt a New Purge Message, as Well interface (‘‘MEO Interface’’) 4 a new type
post all comments on the Commission’s as To Amend Its Fee Schedule To of connection port, named MEO Purge
internet website (http://www.sec.gov/ Identify the New MEO Purge Port Port, to be used as a dedicated port for
rules/sro.shtml). sending purge messages to the
December 19, 2017.
Copies of the submission, all Exchange. The Exchange also proposes
subsequent amendments, all written Pursuant to the provisions of Section to amend its Fee Schedule to identify
statements with respect to the proposed 19(b)(1) of the Securities Exchange Act the new MEO Purge Port. Finally, the
rule change that are filed with the of 1934 (‘‘Act’’) 1 and Rule 19b–4 Exchange proposes to amend Exchange
Commission, and all written thereunder,2 notice is hereby given that Rule 519C, Mass Cancellation of
communications relating to the on December 15, 2017, MIAX PEARL, Trading Interest, to adopt new rule text
proposed rule change between the LLC (‘‘MIAX PEARL’’ or ‘‘Exchange’’) to reflect the proposed MEO Purge Port
Commission and any person, other than filed with the Securities and Exchange functionality, as well as to make
those that may be withheld from the Commission (‘‘Commission’’) a clarifying changes to existing rule text to
public in accordance with the proposed rule change as described in
provisions of 5 U.S.C. 552, will be Items II and III below, which Items have 3 The term ‘‘Member’’ means an individual or
available for website viewing and been prepared by the Exchange. The organization that is registered with the Exchange
ethrower on DSK3G9T082PROD with NOTICES
pursuant to Chapter II of the MIAX PEARL Rules
printing in the Commission’s Public Commission is publishing this notice to for purposes of trading on the Exchange as an
solicit comments on the proposed rule ‘‘Electronic Exchange Member’’ or ‘‘Market Maker.’’
12 For purposes only of waiving the operative Members are deemed ‘‘members’’ under the
change from interested persons.
delay for this proposal, the Commission has Exchange Act. See Exchange Rule 100.
considered the proposed rule’s impact on 4 The term ‘‘MEO Interface’’ means a binary order
14 17 CFR 200.30–3(a)(12).
efficiency, competition, and capital formation. See interface used for submitting certain order types (as
15 U.S.C. 78c(f). 1 15 U.S.C. 78s(b)(1). set forth in Rule 516) to the MIAX PEARL System.
13 15 U.S.C. 78s(b)(2)(B). 2 17 CFR 240.19b–4. See Exchange Rule 100.
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Document Created: 2017-12-23 03:08:11
Document Modified: 2017-12-23 03:08:11
| 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 61065 |
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