83_FR_15723 83 FR 15653 - Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Delay of Complex Order Quoting Functionality

83 FR 15653 - Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Delay of Complex Order Quoting Functionality

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 70 (April 11, 2018)

Page Range15653-15655
FR Document2018-07407

Federal Register, Volume 83 Issue 70 (Wednesday, April 11, 2018)
[Federal Register Volume 83, Number 70 (Wednesday, April 11, 2018)]
[Notices]
[Pages 15653-15655]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-07407]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83001; File No. SR-ISE-2018-29]


Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Relating to the 
Delay of Complex Order Quoting Functionality

April 5, 2018.
    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 March 28, 2018, 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 extend the delay for re-introduction of 
functionality which permits Market Makers to enter quotes in certain 
symbols for complex strategies on the complex order book in their 
appointed options classes by an additional one year.
    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 extend the delay for 
re-introduction of functionality which permits Market Makers to enter 
quotes in certain symbols for complex strategies on the complex order 
book in their appointed options classes by an additional one year. The 
Exchange filed a rule change to designate that a symbol would not be 
eligible for Market Maker quotes in the complex order book after the 
symbol migrated to the INET \3\ platform (``May 2017 Rule Change'').\4\ 
In conjunction with the May 2017 Rule Change, the Exchange issued an 
Options Trader Alert notifying Members that complex order quoting 
functionality would no longer be available.\5\ The rule change provided 
that within a year from the date of filing the May 2017 Rule Change, 
the Exchange would offer complex quoting functionality on the ISE INET 
platform.\6\
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    \3\ INET is the proprietary core technology utilized across 
Nasdaq's global markets and utilized on The Nasdaq Options Market 
LLC (``NOM''), Nasdaq PHLX LLC (``Phlx'') and Nasdaq BX, Inc. 
(``BX'') (collectively, ``Nasdaq Exchanges''). The migration of ISE 
to the Nasdaq INET architecture has resulted in higher performance, 
scalability, and more robust architecture.
    \4\ See Securities Exchange Act Release No. 80613 (May 5, 2017), 
82 FR 22022 (May 11, 2017) (SR-ISE-2017-37).
    \5\ Even though the complex quoting functionality would not be 
available, Market Makers would still be able to submit complex 
orders.
    \6\ See note 4 above.
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    By way of background, prior to the delay in re-introducing the 
quoting functionality, ISE's rules permitted Market Makers to enter 
quotes in certain symbols for complex strategies on the complex order 
book in their appointed options classes. Market Maker quotes for 
complex strategies were not automatically executed against bids and 
offers on the Exchange for the individual legs nor marked for price 
improvement.\7\ Market Makers were not required to enter quotes on 
ISE's complex order book. Quotes for complex orders were not subject to 
any quotation requirements that are applicable to Market Maker quotes 
in the regular market for individual options series or classes, nor was 
any volume executed in complex orders taken into consideration when 
determining whether Market Makers met quotation obligations applicable 
to Market Maker quotes in the regular market for individual options 
series.
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    \7\ See Supplementary Material .03 to Rule 722.

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[[Page 15654]]

    When the Exchange initially delayed this functionality which 
permitted Market Makers to enter quotes in certain symbols for complex 
strategies on the complex order book in their appointed options 
classes, the Exchange noted that it would re-introduce the 
functionality within one year from the date of that filing. The 
Exchange filed the initial rule change on April 26, 2017, with a one 
year delay, and the additional one year delay would extend the 
implementation timeframe for this functionality to April 26, 2019. The 
extended delay would provide the Exchange additional time to develop 
and test this functionality on INET. The Exchange will issue an Options 
Trader Alert notifying Members when this functionality would be 
available. Furthermore, in connection with this change, the Exchange 
also proposes to amend Supplementary Material .03 to Rule 722 to remove 
language about the migration of symbols to INET as this migration has 
been completed and all symbols listed by the Exchange are currently 
trading on the INET platform.
    The Exchange is also proposing to amend a typographical error to 
correct a misspelled word in the current Rule text at Supplementary 
Material .03 to Rule 722.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\8\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\9\ 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 
because the Exchange desires to rollout the complex order quoting 
functionality at a later date to allow additional time to rebuild this 
technology on the new platform. Although the Exchange is now fully 
operating on the Nasdaq INET platform, additional time is necessary to 
re-implement this functionality.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
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    Delaying the reintroduction of the quoting functionality will 
provide additional time to test and implement this functionality. 
Today, symbols trade in price/time. Within a year from the date of 
filing this rule change, the Exchange will offer complex quoting 
functionality. Thereafter, the Exchange may offer the complex quoting 
for specified symbols from time to time with notice to members. At the 
time the Exchange designates a symbol as available for complex quoting, 
it would also designate the allocation methodology for that symbol 
pursuant to ISE Rule 722(b)(3)(i).
    Even though the complex quoting functionality will not be 
available, Market Makers will still be able to submit complex orders. 
The Exchange has not experienced any significant impact with respect to 
execution quality. The Exchange notes that Phlx does not offer complex 
order quoting functionality.\10\
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    \10\ See Phlx Rule 1098.
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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. The Exchange does not believe 
that the proposed rule change will impact the intense competition that 
exists in the options market. The Exchange does not believe that the 
proposed delay will impose any significant burden on inter-market 
competition as it does not impact the ability of other markets to offer 
or not offer competing functionality. Members will be able to continue 
to submit complex orders on ISE. The Exchange does not believe that the 
proposed rule change will impose any burden on intra-market competition 
because all members uniformly will not be able to submit Market Maker 
quotes in the complex order book.
    Within a year from the date of filing this rule change, the 
Exchange will offer complex quoting functionality. Thereafter, the 
Exchange may offer complex quoting for specified symbols from time to 
time with notice to members. At the time the Exchange designates a 
symbol as available for complex quoting, it will also designate the 
allocation methodology for that symbol pursuant to ISE Rule 
722(b)(3)(i).

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 \11\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \12\ 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 for 30 days after the date of the filing. However, 
Rule 19b-4(f)(6)(iii) \13\ 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, ISE requests that the 
Commission waive the 30-day operative delay to allow the proposed one-
year extension of the time for re-introducing the complex quoting 
functionality to begin at the conclusion of the current delay period, 
which is scheduled to end on April 26, 2018. As noted above, ISE states 
that extending the delay for re-introducing the complex quoting 
functionality will provide ISE with additional time to develop and test 
this functionality. ISE further states that it has not experienced any 
significant impact with respect to execution quality due to the delayed 
implementation of the complex quoting functionality. The Commission 
believes that waiving the operative delay is consistent with the 
protection of investors and the public interest because it will provide 
ISE with additional time to develop and test the complex quoting 
functionality. Accordingly, the Commission waives the 30-day operative 
delay and designates the proposed rule change operative upon 
filing.\14\
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    \13\ 17 CFR 240.19b-4(f)(6)(iii).
    \14\ For purposes only of waiving the 30-day operative delay, 
the Commission has also 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: (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.

[[Page 15655]]

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-2018-29 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-2018-29. 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-2018-29, and should be submitted on 
or before May 2, 2018.


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12) and (59).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-07407 Filed 4-10-18; 8:45 am]
 BILLING CODE 8011-01-P



                                                                          Federal Register / Vol. 83, No. 70 / Wednesday, April 11, 2018 / Notices                                                     15653

                                             applicable), received in connection with                SECURITIES AND EXCHANGE                                A. Self-Regulatory Organization’s
                                             a Co-Investment Transaction will be                     COMMISSION                                             Statement of the Purpose of, and
                                             distributed to the participating                                                                               Statutory Basis for, the Proposed Rule
                                             Regulated Funds and Affiliated Funds                    [Release No. 34–83001; File No. SR–ISE–                Change
                                             on a pro rata basis based on the amounts                2018–29]                                               1. Purpose
                                             they invested or committed, as the case
                                             may be, in such Co-Investment                           Self-Regulatory Organizations; Nasdaq                     The purpose of the proposed rule
                                             Transaction. If any transaction fee is to               ISE, LLC; Notice of Filing and                         change is to extend the delay for re-
                                             be held by an Adviser pending                           Immediate Effectiveness of Proposed                    introduction of functionality which
                                             consummation of the transaction, the                    Rule Change Relating to the Delay of                   permits Market Makers to enter quotes
                                                                                                                                                            in certain symbols for complex
                                             fee will be deposited into an account                   Complex Order Quoting Functionality
                                                                                                                                                            strategies on the complex order book in
                                             maintained by such Adviser at a bank or
                                                                                                     April 5, 2018.                                         their appointed options classes by an
                                             banks having the qualifications                                                                                additional one year. The Exchange filed
                                             prescribed in section 26(a)(1) of the Act,                 Pursuant to Section 19(b)(1) of the                 a rule change to designate that a symbol
                                             and the account will earn a competitive                 Securities Exchange Act of 1934                        would not be eligible for Market Maker
                                             rate of interest that will also be divided              (‘‘Act’’),1 and Rule 19b–4 thereunder,2                quotes in the complex order book after
                                             pro rata among the participating                        notice is hereby given that on March 28,               the symbol migrated to the INET 3
                                             Regulated Funds and Affiliated Funds                    2018, Nasdaq ISE, LLC (‘‘ISE’’ or                      platform (‘‘May 2017 Rule Change’’).4 In
                                             based on the amounts they invest in                     ‘‘Exchange’’) filed with the Securities                conjunction with the May 2017 Rule
                                             such Co-Investment Transaction. None                    and Exchange Commission                                Change, the Exchange issued an Options
                                             of the Affiliated Funds, the Advisers,                  (‘‘Commission’’) the proposed rule                     Trader Alert notifying Members that
                                             the other Regulated Funds or any                        change as described in Items I and II,                 complex order quoting functionality
                                             affiliated person of the Regulated Funds                below, which Items have been prepared                  would no longer be available.5 The rule
                                             or Affiliated Funds will receive                        by the Exchange. The Commission is                     change provided that within a year from
                                             additional compensation or                              publishing this notice to solicit                      the date of filing the May 2017 Rule
                                             remuneration of any kind as a result of                 comments on the proposed rule change                   Change, the Exchange would offer
                                             or in connection with a Co-Investment                   from interested persons.                               complex quoting functionality on the
                                             Transaction (other than (a) in the case                                                                        ISE INET platform.6
                                                                                                     I. Self-Regulatory Organization’s                         By way of background, prior to the
                                             of the Regulated Funds and Affiliated
                                                                                                     Statement of the Terms of Substance of                 delay in re-introducing the quoting
                                             Funds, the pro rata transaction fees
                                                                                                     the Proposed Rule Change                               functionality, ISE’s rules permitted
                                             described above and fees or other
                                             compensation described in condition                                                                            Market Makers to enter quotes in certain
                                                                                                        The Exchange proposes to extend the
                                             2(c)(iii)(C), and (b) in the case of an                                                                        symbols for complex strategies on the
                                                                                                     delay for re-introduction of
                                             Adviser, investment advisory fees paid                                                                         complex order book in their appointed
                                                                                                     functionality which permits Market                     options classes. Market Maker quotes for
                                             in accordance with the agreement                        Makers to enter quotes in certain                      complex strategies were not
                                             between the Adviser and the Regulated                   symbols for complex strategies on the                  automatically executed against bids and
                                             Fund or Affiliated Fund).                               complex order book in their appointed                  offers on the Exchange for the
                                                14. If the Holders own in the aggregate              options classes by an additional one                   individual legs nor marked for price
                                             more than 25% of the Shares of a                        year.                                                  improvement.7 Market Makers were not
                                             Regulated Fund, then the Holders will                      The text of the proposed rule change                required to enter quotes on ISE’s
                                             vote such Shares as directed by an                      is available on the Exchange’s website at              complex order book. Quotes for
                                             independent third party when voting on                  http://ise.cchwallstreet.com/, at the                  complex orders were not subject to any
                                             (1) the election of directors; (2) the                  principal office of the Exchange, and at               quotation requirements that are
                                             removal of one or more directors; or (3)                the Commission’s Public Reference                      applicable to Market Maker quotes in
                                             any other matter under either the Act or                Room.                                                  the regular market for individual
                                             applicable State law affecting the                                                                             options series or classes, nor was any
                                             Board’s composition, size or manner of                  II. Self-Regulatory Organization’s                     volume executed in complex orders
                                             election.                                               Statement of the Purpose of, and                       taken into consideration when
                                                                                                     Statutory Basis for, the Proposed Rule                 determining whether Market Makers
                                                15. Each Regulated Fund’s chief                      Change                                                 met quotation obligations applicable to
                                             compliance officer, as defined in rule                                                                         Market Maker quotes in the regular
                                             38a-1(a)(4), will prepare an annual                       In its filing with the Commission, the               market for individual options series.
                                             report for its Board that evaluates (and                Exchange included statements
                                             documents the basis of that evaluation)                 concerning the purpose of and basis for                  3 INET is the proprietary core technology utilized

                                             the Regulated Fund’s compliance with                    the proposed rule change and discussed                 across Nasdaq’s global markets and utilized on The
                                                                                                                                                            Nasdaq Options Market LLC (‘‘NOM’’), Nasdaq
                                             the terms and conditions of the                         any comments it received on the                        PHLX LLC (‘‘Phlx’’) and Nasdaq BX, Inc. (‘‘BX’’)
                                             application and the procedures                          proposed rule change. The text of these                (collectively, ‘‘Nasdaq Exchanges’’). The migration
                                             established to achieve such compliance.                 statements may be examined at the                      of ISE to the Nasdaq INET architecture has resulted
                                                                                                     places specified in Item IV below. The                 in higher performance, scalability, and more robust
                                               For the Commission, by the Division of                                                                       architecture.
                                                                                                     Exchange has prepared summaries, set
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                                             Investment Management, under delegated                                                                           4 See Securities Exchange Act Release No. 80613

                                             authority.                                              forth in sections A, B, and C below, of                (May 5, 2017), 82 FR 22022 (May 11, 2017) (SR–
                                             Eduardo A. Aleman,                                      the most significant aspects of such                   ISE–2017–37).
                                                                                                                                                              5 Even though the complex quoting functionality
                                             Assistant Secretary.
                                                                                                     statements.
                                                                                                                                                            would not be available, Market Makers would still
                                             [FR Doc. 2018–07430 Filed 4–10–18; 8:45 am]                                                                    be able to submit complex orders.
                                                                                                       1 15   U.S.C. 78s(b)(1).                               6 See note 4 above.
                                             BILLING CODE 8011–01–P                                    2 17   CFR 240.19b–4.                                  7 See Supplementary Material .03 to Rule 722.




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                                             15654                           Federal Register / Vol. 83, No. 70 / Wednesday, April 11, 2018 / Notices

                                                When the Exchange initially delayed                     available for complex quoting, it would               which it was filed, or such shorter time
                                             this functionality which permitted                         also designate the allocation                         as the Commission may designate, it has
                                             Market Makers to enter quotes in certain                   methodology for that symbol pursuant                  become effective pursuant to Section
                                             symbols for complex strategies on the                      to ISE Rule 722(b)(3)(i).                             19(b)(3)(A)(iii) of the Act 11 and
                                             complex order book in their appointed                        Even though the complex quoting                     subparagraph (f)(6) of Rule 19b–4
                                             options classes, the Exchange noted that                   functionality will not be available,                  thereunder.12
                                             it would re-introduce the functionality                    Market Makers will still be able to                      A proposed rule change filed under
                                             within one year from the date of that                      submit complex orders. The Exchange                   Rule 19b–4(f)(6) normally does not
                                             filing. The Exchange filed the initial                     has not experienced any significant                   become operative for 30 days after the
                                             rule change on April 26, 2017, with a                      impact with respect to execution                      date of the filing. However, Rule 19b–
                                             one year delay, and the additional one                     quality. The Exchange notes that Phlx                 4(f)(6)(iii) 13 permits the Commission to
                                             year delay would extend the                                does not offer complex order quoting                  designate a shorter time if such action
                                             implementation timeframe for this                          functionality.10                                      is consistent with the protection of
                                             functionality to April 26, 2019. The                                                                             investors and the public interest. In its
                                                                                                        B. Self-Regulatory Organization’s
                                             extended delay would provide the                                                                                 filing, ISE requests that the Commission
                                                                                                        Statement on Burden on Competition
                                             Exchange additional time to develop                                                                              waive the 30-day operative delay to
                                             and test this functionality on INET. The                      The Exchange does not believe that
                                                                                                        the proposed rule change will impose                  allow the proposed one-year extension
                                             Exchange will issue an Options Trader
                                                                                                        any burden on competition not                         of the time for re-introducing the
                                             Alert notifying Members when this
                                                                                                        necessary or appropriate in furtherance               complex quoting functionality to begin
                                             functionality would be available.
                                                                                                        of the purposes of the Act. The                       at the conclusion of the current delay
                                             Furthermore, in connection with this
                                                                                                        Exchange does not believe that the                    period, which is scheduled to end on
                                             change, the Exchange also proposes to
                                                                                                        proposed rule change will impact the                  April 26, 2018. As noted above, ISE
                                             amend Supplementary Material .03 to
                                                                                                        intense competition that exists in the                states that extending the delay for re-
                                             Rule 722 to remove language about the
                                                                                                        options market. The Exchange does not                 introducing the complex quoting
                                             migration of symbols to INET as this
                                                                                                        believe that the proposed delay will                  functionality will provide ISE with
                                             migration has been completed and all
                                             symbols listed by the Exchange are                         impose any significant burden on inter-               additional time to develop and test this
                                             currently trading on the INET platform.                    market competition as it does not                     functionality. ISE further states that it
                                                The Exchange is also proposing to                       impact the ability of other markets to                has not experienced any significant
                                             amend a typographical error to correct                     offer or not offer competing                          impact with respect to execution quality
                                             a misspelled word in the current Rule                      functionality. Members will be able to                due to the delayed implementation of
                                             text at Supplementary Material .03 to                      continue to submit complex orders on                  the complex quoting functionality. The
                                             Rule 722.                                                  ISE. The Exchange does not believe that               Commission believes that waiving the
                                                                                                        the proposed rule change will impose                  operative delay is consistent with the
                                             2. Statutory Basis                                                                                               protection of investors and the public
                                                                                                        any burden on intra-market competition
                                                The Exchange believes that its                          because all members uniformly will not                interest because it will provide ISE with
                                             proposal is consistent with Section 6(b)                   be able to submit Market Maker quotes                 additional time to develop and test the
                                             of the Act,8 in general, and furthers the                  in the complex order book.                            complex quoting functionality.
                                             objectives of Section 6(b)(5) of the Act,9                    Within a year from the date of filing              Accordingly, the Commission waives
                                             in particular, in that it is designed to                   this rule change, the Exchange will offer             the 30-day operative delay and
                                             promote just and equitable principles of                   complex quoting functionality.                        designates the proposed rule change
                                             trade, to remove impediments to and                        Thereafter, the Exchange may offer                    operative upon filing.14
                                             perfect the mechanism of a free and                        complex quoting for specified symbols                    At any time within 60 days of the
                                             open market and a national market                          from time to time with notice to                      filing of the proposed rule change, the
                                             system, and, in general to protect                         members. At the time the Exchange                     Commission summarily may
                                             investors and the public interest                          designates a symbol as available for                  temporarily suspend such rule change if
                                             because the Exchange desires to rollout                    complex quoting, it will also designate               it appears to the Commission that such
                                             the complex order quoting functionality                    the allocation methodology for that                   action is: (i) Necessary or appropriate in
                                             at a later date to allow additional time                   symbol pursuant to ISE Rule                           the public interest; (ii) for the protection
                                             to rebuild this technology on the new                      722(b)(3)(i).                                         of investors; or (iii) otherwise in
                                             platform. Although the Exchange is now                                                                           furtherance of the purposes of the Act.
                                             fully operating on the Nasdaq INET                         C. Self-Regulatory Organization’s
                                                                                                                                                              If the Commission takes such action, the
                                             platform, additional time is necessary to                  Statement on Comments on the
                                                                                                                                                              Commission shall institute proceedings
                                             re-implement this functionality.                           Proposed Rule Change Received From
                                                                                                                                                              to determine whether the proposed rule
                                                Delaying the reintroduction of the                      Members, Participants, or Others
                                                                                                                                                              should be approved or disapproved.
                                             quoting functionality will provide                           No written comments were either
                                             additional time to test and implement                      solicited or received.                                  11 15  U.S.C. 78s(b)(3)(A)(iii).
                                             this functionality. Today, symbols trade                                                                           12 17  CFR 240.19b–4(f)(6). In addition, Rule 19b–
                                             in price/time. Within a year from the                      III. Date of Effectiveness of the
                                                                                                                                                              4(f)(6) requires a self-regulatory organization to give
                                             date of filing this rule change, the                       Proposed Rule Change and Timing for                   the Commission written notice of its intent to file
                                             Exchange will offer complex quoting                        Commission Action                                     the proposed rule change at least five business days
                                                                                                                                                              prior to the date of filing of the proposed rule
                                             functionality. Thereafter, the Exchange                       Because the foregoing proposed rule                change, or such shorter time as designated by the
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                                             may offer the complex quoting for                          change does not: (i) Significantly affect             Commission. The Exchange has satisfied this
                                             specified symbols from time to time                        the protection of investors or the public             requirement.
                                                                                                                                                                 13 17 CFR 240.19b–4(f)(6)(iii).
                                             with notice to members. At the time the                    interest; (ii) impose any significant
                                                                                                                                                                 14 For purposes only of waiving the 30-day
                                             Exchange designates a symbol as                            burden on competition; and (iii) become
                                                                                                                                                              operative delay, the Commission has also
                                                                                                        operative for 30 days from the date on                considered the proposed rule’s impact on
                                               8 15   U.S.C. 78f(b).                                                                                          efficiency, competition, and capital formation. See
                                               9 15   U.S.C. 78f(b)(5).                                   10 See   Phlx Rule 1098.                            15 U.S.C. 78c(f).



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                                                                          Federal Register / Vol. 83, No. 70 / Wednesday, April 11, 2018 / Notices                                                       15655

                                             IV. Solicitation of Comments                              For the Commission, by the Division of                concerning the purpose of and basis for
                                                                                                     Trading and Markets, pursuant to delegated              the proposed rule change and discussed
                                               Interested persons are invited to                     authority.15                                            any comments it received on the
                                             submit written data, views, and                         Eduardo A. Aleman,                                      proposed rule change. The text of these
                                             arguments concerning the foregoing,                     Assistant Secretary.                                    statements may be examined at the
                                             including whether the proposed rule                     [FR Doc. 2018–07407 Filed 4–10–18; 8:45 am]             places specified in Item IV below. The
                                             change is consistent with the Act.                      BILLING CODE 8011–01–P                                  Exchange has prepared summaries, set
                                             Comments may be submitted by any of                                                                             forth in sections A, B, and C below, of
                                             the following methods:                                                                                          the most significant aspects of such
                                                                                                     SECURITIES AND EXCHANGE                                 statements.
                                             Electronic Comments                                     COMMISSION
                                                                                                                                                             A. Self-Regulatory Organization’s
                                               • Use the Commission’s internet                       [Release No. 34–83002; File No. SR–ISE–                 Statement of the Purpose of, and
                                             comment form (http://www.sec.gov/                       2018–27]                                                Statutory Basis for, the Proposed Rule
                                             rules/sro.shtml); or                                                                                            Change
                                                                                                     Self-Regulatory Organizations; Nasdaq
                                               • Send an email to rule-comments@                     ISE, LLC; Notice of Filing and                          1. Purpose
                                             sec.gov. Please include File Number SR–                 Immediate Effectiveness of Proposed
                                             ISE–2018–29 on the subject line.                                                                                  The purpose of the proposed rule
                                                                                                     Rule Change To Modify the Rebates
                                                                                                                                                             change is to amend ISE’s Schedule of
                                                                                                     Provided to Members That Send
                                             Paper Comments                                                                                                  Fees to replace the current Member
                                                                                                     Unsolicited Crossing Orders to the
                                                                                                                                                             Order Routing Program (‘‘MORP’’),
                                               • Send paper comments in triplicate                   Exchange
                                                                                                                                                             which provides enhanced rebates to
                                             to Secretary, Securities and Exchange                   April 5, 2018.                                          order routing firms that select the
                                             Commission, 100 F Street NE,                               Pursuant to Section 19(b)(1) of the                  Exchange as the default routing
                                             Washington, DC 20549–1090.                              Securities Exchange Act of 1934                         destination for unsolicited Crossing
                                             All submissions should refer to File                    (‘‘Act’’),1 and Rule 19b–4 thereunder,2                 Orders, and the Customer to Customer
                                             Number SR–ISE–2018–29. This file                        notice is hereby given that on March 23,                Rebate PLUS program,4 which provides
                                             number should be included on the                        2018, Nasdaq ISE, LLC (‘‘ISE’’ or                       an indirect incentive for Members to
                                             subject line if email is used. To help the              ‘‘Exchange’’) filed with the Securities                 direct unsolicited Crossing Orders to the
                                             Commission process and review your                      and Exchange Commission                                 Exchange, with a new rebate program,
                                                                                                     (‘‘Commission’’) the proposed rule                      entitled the ‘‘PIM and Facilitation
                                             comments more efficiently, please use
                                                                                                     change as described in Items I and II                   Rebate’’ program. Through this new
                                             only one method. The Commission will
                                                                                                     below, which Items have been prepared                   program, the Exchange aims to provide
                                             post all comments on the Commission’s                                                                           a more accessible, direct, and effective
                                                                                                     by the Exchange. The Commission is
                                             internet website (http://www.sec.gov/                   publishing this notice to solicit                       incentive to Members to direct their
                                             rules/sro.shtml). Copies of the                         comments on the proposed rule change                    unsolicited Crossing Orders to the
                                             submission, all subsequent                              from interested persons.                                Exchange.
                                             amendments, all written statements
                                             with respect to the proposed rule                       I. Self-Regulatory Organization’s                       MORP
                                             change that are filed with the                          Statement of the Terms of Substance of                    As noted above, the MORP is a
                                             Commission, and all written                             the Proposed Rule Change                                program that provides rebates to firms
                                             communications relating to the                             The Exchange proposes to amend the                   that select the Exchange as their default
                                             proposed rule change between the                        Exchange’s Schedule of Fees to modify                   routing destination for unsolicited
                                             Commission and any person, other than                   the rebates it provides to Members that                 Crossing Orders. To be eligible to
                                             those that may be withheld from the                     send unsolicited Crossing Orders 3 to                   participate in MORP, an Electronic
                                             public in accordance with the                           the Exchange.                                           Access Member (‘‘EAM’’) must: (1)
                                             provisions of 5 U.S.C. 552, will be                        The text of the proposed rule change                 Designate to the Exchange, in writing,
                                             available for website viewing and                       is available on the Exchange’s website at               those sessions (connections to the
                                             printing in the Commission’s Public                     http://ise.cchwallstreet.com/, at the                   Exchange over which the firm submits
                                                                                                     principal office of the Exchange, and at                orders) that meet the following MORP
                                             Reference Room, 100 F Street NE,
                                                                                                     the Commission’s Public Reference                       criteria; (2) provide systems to its clients
                                             Washington, DC 20549, on official
                                                                                                     Room.                                                   that enable the electronic routing of
                                             business days between the hours of
                                             10:00 a.m. and 3:00 p.m. Copies of the                  II. Self-Regulatory Organization’s                      option orders to all of the U.S. options
                                                                                                     Statement of the Purpose of, and                        exchanges, including ISE; (3) interface
                                             filing also will be available for
                                                                                                     Statutory Basis for, the Proposed Rule                  with ISE to access the Exchange’s
                                             inspection and copying at the principal
                                                                                                     Change                                                  electronic options trading platform; (4)
                                             office of the Exchange. All comments                                                                            offer to its clients a customized interface
                                             received will be posted without change.                    In its filing with the Commission, the               and routing functionality such that ISE
                                             Persons submitting comments are                         Exchange included statements                            will be the default destination for all
                                             cautioned that we do not redact or edit                                                                         unsolicited Crossing Orders entered by
                                             personal identifying information from                     15 17  CFR 200.30–3(a)(12) and (59).
                                                                                                                                                             the EAM, provided that market
                                                                                                       1 15  U.S.C. 78s(b)(1).
                                             comment submissions. You should                            2 17 CFR 240.19b–4.                                  conditions allow the Crossing Order to
amozie on DSK30RV082PROD with NOTICES




                                             submit only information that you wish                      3 A ‘‘Crossing Order’’ is an order executed in the   be executed on ISE; (5) configure its
                                             to make available publicly. All                         Exchange’s Facilitation Mechanism, Solicited Order      own option order routing functionality
                                             submissions should refer to File                        Mechanism, Price Improvement Mechanism                  such that ISE will be the default
                                             Number SR–ISE–2018–29, and should                       (‘‘PIM’’) or submitted as a Qualified Contingent        destination for all unsolicited Crossing
                                                                                                     Cross (‘‘QCC’’) order. For purposes of this Fee
                                             be submitted on or before May 2, 2018.                  Schedule, orders executed in the Block Order            Orders, provided that market conditions
                                                                                                     Mechanism are also considered Crossing Orders.
                                                                                                     See Preface to ISE’s Schedule of Fees.                   4 See   Section IV, A of the Schedule of Fees.



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Document Created: 2018-04-10 23:59:19
Document Modified: 2018-04-10 23:59:19
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation83 FR 15653 

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