83 FR 23964 - Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Supplementary Material .03 to Rule 804 To Enhance Anti-Internalization Functionality
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 100 (May 23, 2018)
Federal Register Volume 83, Issue 100 (May 23, 2018)
| Page Range | 23964-23966 | |
| FR Document | 2018-10971 |
[Federal Register Volume 83, Number 100 (Wednesday, May 23, 2018)] [Notices] [Pages 23964-23966] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-10971] [[Page 23964]] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-83270; File No. SR-GEMX-2018-16] Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Supplementary Material .03 to Rule 804 To Enhance Anti-Internalization Functionality May 17, 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 May 2, 2018, Nasdaq GEMX, LLC (``GEMX'' or ``Exchange'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I, II, and III, below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Supplementary Material .03 to Rule 804 to enhance anti-internalization functionality. The text of the proposed rule change is available on the Exchange's website at http://nasdaqgemx.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 enhance the anti- internalization (``AIQ'') functionality provided to Market Makers on the Exchange by giving members the flexibility to choose to have this protection apply at the market participant identifier level (i.e., existing functionality),\3\ at the Exchange account level, or at the member firm level. The Exchange believes that this enhancement will provide helpful flexibility for Market Makers that wish to prevent trading against all quotes and orders entered by their firm, or Exchange account, instead of just quotes and orders that are entered under the same market participant identifier. Similar functionality was also recently introduced on the Exchange's affiliated exchanges, Nasdaq PHLX LLC (``Phlx'') and NOM.\4\ The Exchange believes that introducing this functionality now on GEMX will ensure that GEMX Market Makers on will benefit from similar flexibility in applying this protection. --------------------------------------------------------------------------- \3\ Currently, the rule uses the term ``member identifier'' for this concept. The Exchange proposes to rename ``member identifier'' to ``market participant identifier'' to be consistent with terminology used on the Nasdaq Options Market (``NOM'') and to avoid member confusion that could result in using the similar terms ``member identifier'' and ``member firm identifier'' in this rule. \4\ See Phlx Rule 1080(p)(2); NOM Chapter VI, Sec. 10. See also Securities Exchange Act Release Nos. 82012 (November 3, 3017), 82 FR 52082 (November 9, 2017) (SR-Phlx-2017-93); 81171 (July 19, 2017), 82 FR 34557 (July 25, 2017) (SR-Nasdaq-2017-069). --------------------------------------------------------------------------- Currently, the Exchange provides mandatory AIQ functionality whereby quotes and orders entered by Market Makers using the same market participant identifier will not be executed against quotes and orders entered on the opposite side of the market by the same Market Maker using the same market participant identifier.\5\ When a quote or order entered by a Market Maker would trade with other quotes or orders from the same market participant identifier, the trading system cancels the resting quote or order back to the entering party prior to execution.\6\ This functionality shall not apply in any auction or with respect to complex order transactions. AIQ assists Market Makers in reducing trading costs from unwanted executions potentially resulting from the interaction of executable buy and sell trading interest from the same firm when performing the same market making function. --------------------------------------------------------------------------- \5\ See Supplementary Material .03 to Rule 804. This functionality shall not apply in any auction. \6\ Id. A quote or order entered by a Market Maker only triggers AIQ when it would trade with other quotes or orders from the same Market Maker. Thus, an incoming quote or order entered by a Market Maker may interact with other interest with priority on the book prior to triggering AIQ. After AIQ is triggered, the incoming quote or order may continue to trade with resting interest from other participants. --------------------------------------------------------------------------- Today, this protection prevents Market Makers from trading against their own quotes and orders at the market participant identifier level. The proposed enhancement to this functionality would allow members to choose to have this protection applied at the market participant identifier level as implemented today, at the Exchange account level, or at the member firm level. If members choose to have this protection applied at the Exchange account level, AIQ would prohibit quotes and orders from different market participant identifiers associated with the same Exchange account from trading against one another. Similarly, if the members choose to have this protection applied at the member firm level, AIQ would prohibit quotes and orders from different market participant identifiers within the member firm from trading against one another. Members that do not select to have this protection applied at the Exchange account level or member firm level will have their AIQ protection defaulted to the market participant identifier level protection applied today. The Exchange believes that the proposed AIQ enhancement will provide members with more tailored self-trade functionality that allows them to manage their trading as appropriate based on the members' business needs. While the Exchange believes that some firms will want to restrict AIQ to trading against interest from the same market participant identifier--i.e., as implemented today--the Exchange believes that other firms will find it helpful to be able to configure AIQ to apply at the Exchange account level or at the member firm level so that they are protected regardless of which market participant identifier the order or quote originated from. Similar flexibility is offered on the Exchange's affiliates, Phlx and NOM, and also on the CBOE BZX Exchange, Inc. (``BZX''), which provides members the ability to apply Match Trade Prevention (``MTP'') modifiers--i.e., BZX's version of self-trade protection--based on market participant, Exchange Member, trading group, or Exchange Sponsored Participant identifiers.\7\ --------------------------------------------------------------------------- \7\ See BZX Rule 21.1(g). --------------------------------------------------------------------------- The examples below illustrate how AIQ would operate based on the market [[Page 23965]] participant identifier level protection, the Exchange account level, or for members that choose to apply AIQ at the member firm level: Example 1 1. Member ABC (market participant identifier 123A & 555B) with AIQ configured at the market participant identifier level. 2. 123A Quote: $1.00 (5) x $1.10 (20). 3. 555B Buy Order entered for 10 contracts at $1.10. 4. 555B Buy Order executes 10 contracts against 123A Quote. 123A and 555B are not prevented by the system from trading against one another because Member ABC has configured AIQ to apply at the market participant identifier level. This is the same as existing functionality. Example 2 1. Member ABC (Account 999 with market participant identifiers 123A and 555B, and Account 888 with market participant identifier 789A) with AIQ configured at the Exchange account level 2. 123A Quote: $1.00 (5) x $1.10 (20). 3. 789A Quote: $1.05(10) x $1.10 (20). 4. 555B Buy Order entered for 30 contracts at $1.10. 5. 555B Buy Order executes against 789A Quote but 555B Buy Order does not execute against 123A Quote. AIQ purges the 123A Quote and the remaining contracts of the 555B Buy Order rests on the book at $1.10. 123A and 555B are not permitted trade against one another because Member ABC has configured AIQ to apply at the Exchange account level. This is new functionality as the member has opted to have AIQ operate at the Exchange account level. Example 3 1. Same as Example 2 above but Member ABC has AIQ configured at the member level. 2. AIQ purges the 123A Quote and the 789A Quote and the 555B Buy Order rests on the book at $1.10. This is new functionality as the member has opted to have AIQ operate at the member level. Implementation The Exchange proposes to launch the AIQ functionality described in this proposed rule change in either Q2 or Q4 2018. The Exchange will announce the implementation date of this functionality in an Options Trader Alert issued to members prior to the launch date. 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.\8\ In particular, the proposal is consistent with Section 6(b)(5) of the Act,\9\ 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. --------------------------------------------------------------------------- \8\ 15 U.S.C. 78f(b). \9\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Exchange believes that the proposed rule change is consistent with the protection of investors and the public interest as it is designed to provide Market Makers with additional flexibility with respect to how to implement self-trade protections provided by AIQ. Currently, all Market Makers are provided functionality that prevents quotes and orders from one market participant identifier from trading with quotes and orders from the same market participant identifier. This allows Market Makers to better manage their order flow and prevent undesirable executions where the Market Maker, using the same market participant identifier, would be on both sides of the trade. While this functionality is helpful to our members, some members would prefer not to trade with quotes and orders entered by different market participant identifiers within the same Exchange account or member. Thus, the Exchange is proposing to provide members with flexibility with respect to how AIQ is implemented. While members that like the current functionality can continue to use it, members who would prefer to prevent self-trades across different market participant identifiers within the same Exchange account or at the member level will now be provided with functionality that lets them do this. Similar flexibility is offered on Phlx and NOM, as well as BZX.\10\ The Exchange believes that flexibility to apply AIQ at the Exchange account or member firm level would be useful for the Exchange's members too. The Exchange believes that the proposed rule change is designed to promote just and equitable principles of trade and will remove impediments to and perfect the mechanisms of a free and open market as it will further enhance self-trade protections provided to Market Makers similar to those protections provided on other markets. This functionality does not relieve or otherwise modify the duty of best execution owed to orders received from public customers. --------------------------------------------------------------------------- \10\ See supra notes 4 and 7. --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,\11\ 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. The proposed rule change is designed to enhance AIQ functionality provided to Exchange Market Makers, and will benefit members that wish to protect their quotes and orders against trading with other quotes and orders within the same Exchange account or member, rather than the more limited market participant identifier standard applied today. The new functionality, which provides similar flexibility to that offered on Phlx, NOM, and BZX, is also completely voluntary, and members that wish to use the current functionality can also continue to do so. The Exchange does not believe that providing more flexibility to members will have any significant impact on competition. In fact, the Exchange believes that the proposed rule change is evidence of the competitive environment in the options industry where exchanges must continually improve their offerings to maintain competitive standing. --------------------------------------------------------------------------- \11\ 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 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 \12\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\13\ --------------------------------------------------------------------------- \12\ 15 U.S.C. 78s(b)(3)(A)(iii). \13\ 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. --------------------------------------------------------------------------- [[Page 23966]] 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. 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 rule-comments@sec.gov. Please include File Number SR-GEMX-2018-16 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-GEMX-2018-16. 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-GEMX-2018-16 and should be submitted on or before June 13, 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. 2018-10971 Filed 5-22-18; 8:45 am] BILLING CODE 8011-01-P
![23964 Federal Register / Vol. 83, No. 100 / Wednesday, May 23, 2018 / Notices
SECURITIES AND EXCHANGE A. Self-Regulatory Organization’s This functionality shall not apply in any
COMMISSION Statement of the Purpose of, and auction or with respect to complex
Statutory Basis for, the Proposed Rule order transactions. AIQ assists Market
[Release No. 34–83270; File No. SR–GEMX– Change Makers in reducing trading costs from
2018–16] unwanted executions potentially
1. Purpose
resulting from the interaction of
The purpose of the proposed rule executable buy and sell trading interest
Self-Regulatory Organizations; Nasdaq
change is to enhance the anti- from the same firm when performing the
GEMX, LLC; Notice of Filing and
internalization (‘‘AIQ’’) functionality same market making function.
Immediate Effectiveness of Proposed provided to Market Makers on the Today, this protection prevents
Rule Change To Amend Exchange by giving members the Market Makers from trading against
Supplementary Material .03 to Rule 804 flexibility to choose to have this their own quotes and orders at the
To Enhance Anti-Internalization protection apply at the market market participant identifier level. The
Functionality participant identifier level (i.e., existing proposed enhancement to this
functionality),3 at the Exchange account functionality would allow members to
May 17, 2018.
level, or at the member firm level. The choose to have this protection applied at
Pursuant to Section 19(b)(1) of the Exchange believes that this the market participant identifier level as
Securities Exchange Act of 1934 enhancement will provide helpful implemented today, at the Exchange
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 flexibility for Market Makers that wish account level, or at the member firm
notice is hereby given that on May 2, to prevent trading against all quotes and level. If members choose to have this
2018, Nasdaq GEMX, LLC (‘‘GEMX’’ or orders entered by their firm, or protection applied at the Exchange
‘‘Exchange’’) filed with the Securities Exchange account, instead of just quotes account level, AIQ would prohibit
and Exchange Commission and orders that are entered under the quotes and orders from different market
(‘‘Commission’’) the proposed rule same market participant identifier. participant identifiers associated with
change as described in Items I, II, and Similar functionality was also recently the same Exchange account from trading
III, below, which Items have been introduced on the Exchange’s affiliated against one another. Similarly, if the
prepared by the Exchange. The exchanges, Nasdaq PHLX LLC (‘‘Phlx’’) members choose to have this protection
and NOM.4 The Exchange believes that applied at the member firm level, AIQ
Commission is publishing this notice to
introducing this functionality now on would prohibit quotes and orders from
solicit comments on the proposed rule
GEMX will ensure that GEMX Market different market participant identifiers
change from interested persons. Makers on will benefit from similar within the member firm from trading
I. Self-Regulatory Organization’s flexibility in applying this protection. against one another. Members that do
Statement of the Terms of Substance of Currently, the Exchange provides not select to have this protection
the Proposed Rule Change mandatory AIQ functionality whereby applied at the Exchange account level or
quotes and orders entered by Market member firm level will have their AIQ
The Exchange proposes to amend Makers using the same market protection defaulted to the market
Supplementary Material .03 to Rule 804 participant identifier will not be participant identifier level protection
to enhance anti-internalization executed against quotes and orders applied today. The Exchange believes
functionality. entered on the opposite side of the that the proposed AIQ enhancement
market by the same Market Maker using will provide members with more
The text of the proposed rule change the same market participant identifier.5
is available on the Exchange’s website at tailored self-trade functionality that
When a quote or order entered by a allows them to manage their trading as
http://nasdaqgemx.cchwallstreet.com/, Market Maker would trade with other appropriate based on the members’
at the principal office of the Exchange, quotes or orders from the same market business needs. While the Exchange
and at the Commission’s Public participant identifier, the trading system believes that some firms will want to
Reference Room. cancels the resting quote or order back restrict AIQ to trading against interest
II. Self-Regulatory Organization’s to the entering party prior to execution.6 from the same market participant
Statement of the Purpose of, and identifier—i.e., as implemented today—
3 Currently, the rule uses the term ‘‘member
Statutory Basis for, the Proposed Rule the Exchange believes that other firms
identifier’’ for this concept. The Exchange proposes
Change to rename ‘‘member identifier’’ to ‘‘market
will find it helpful to be able to
participant identifier’’ to be consistent with configure AIQ to apply at the Exchange
In its filing with the Commission, the terminology used on the Nasdaq Options Market account level or at the member firm
(‘‘NOM’’) and to avoid member confusion that level so that they are protected
Exchange included statements could result in using the similar terms ‘‘member
concerning the purpose of and basis for identifier’’ and ‘‘member firm identifier’’ in this regardless of which market participant
the proposed rule change and discussed rule. identifier the order or quote originated
any comments it received on the
4 See Phlx Rule 1080(p)(2); NOM Chapter VI, Sec. from. Similar flexibility is offered on the
10. See also Securities Exchange Act Release Nos. Exchange’s affiliates, Phlx and NOM,
proposed rule change. The text of these 82012 (November 3, 3017), 82 FR 52082 (November
statements may be examined at the 9, 2017) (SR–Phlx–2017–93); 81171 (July 19, 2017),
and also on the CBOE BZX Exchange,
82 FR 34557 (July 25, 2017) (SR–Nasdaq–2017– Inc. (‘‘BZX’’), which provides members
places specified in Item IV below. The
069). the ability to apply Match Trade
Exchange has prepared summaries, set 5 See Supplementary Material .03 to Rule 804.
Prevention (‘‘MTP’’) modifiers—i.e.,
forth in sections A, B, and C below, of This functionality shall not apply in any auction. BZX’s version of self-trade protection—
daltland on DSKBBV9HB2PROD with NOTICES
the most significant aspects of such 6 Id. A quote or order entered by a Market Maker
based on market participant, Exchange
statements. only triggers AIQ when it would trade with other
quotes or orders from the same Market Maker. Thus, Member, trading group, or Exchange
an incoming quote or order entered by a Market Sponsored Participant identifiers.7
Maker may interact with other interest with priority The examples below illustrate how
on the book prior to triggering AIQ. After AIQ is
triggered, the incoming quote or order may continue
AIQ would operate based on the market
1 15 U.S.C. 78s(b)(1). to trade with resting interest from other
2 17 CFR 240.19b–4. participants. 7 See BZX Rule 21.1(g).
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![23966 Federal Register / Vol. 83, No. 100 / Wednesday, May 23, 2018 / Notices
At any time within 60 days of the personal identifying information from Commission extended the time period
filing of the proposed rule change, the comment submissions. You should within which to approve the proposed
Commission summarily may submit only information that you wish rule change, disapprove the proposed
temporarily suspend such rule change if to make available publicly. All rule change, or institute proceedings to
it appears to the Commission that such submissions should refer to File determine whether to disapprove the
action is: (i) Necessary or appropriate in Number SR–GEMX–2018–16 and proposed rule change to June 22, 2018.5
the public interest; (ii) for the protection should be submitted on or before June The Commission received no comments
of investors; or (iii) otherwise in 13, 2018. on the proposed rule change. The
furtherance of the purposes of the Act. For the Commission, by the Division of Commission is publishing this notice to
If the Commission takes such action, the Trading and Markets, pursuant to delegated solicit comment on Amendment No. 1
Commission shall institute proceedings authority.14 to the proposed rule change from
to determine whether the proposed rule Eduardo A. Aleman, interested persons and is approving the
should be approved or disapproved. Assistant Secretary. proposed rule change, as modified by
Amendment No. 1, on an accelerated
IV. Solicitation of Comments [FR Doc. 2018–10971 Filed 5–22–18; 8:45 am]
BILLING CODE 8011–01–P
basis.
Interested persons are invited to
submit written data, views, and II. Description of the Proposed Rule
arguments concerning the foregoing, Change, as Modified by Amendment
SECURITIES AND EXCHANGE No. 1 6
including whether the proposed rule
COMMISSION
change is consistent with the Act. The ATR is a functionality designed
Comments may be submitted by any of [Release No. 34–83278; File No. SR–ISE– to prevent the Exchange’s System 7 from
the following methods: 2018–16] experiencing dramatic price swings by
Electronic Comments preventing the execution of orders
Self-Regulatory Organizations; Nasdaq
beyond set thresholds.8 Pursuant to
• Use the Commission’s internet ISE, LLC; Notice of Filing of
Exchange Rule 714(b)(1), the System
comment form (http://www.sec.gov/ Amendment No. 1 and Order Granting
calculates an ATR to limit the range of
rules/sro.shtml); or Accelerated Approval of a Proposed
prices at which an order or quote will
• Send an email to rule-comments@ Rule Change, as Modified by
be allowed to execute.9 Upon receipt of
sec.gov. Please include File Number SR– Amendment No. 1, To Introduce the
a new order or quote, the ATR is
GEMX–2018–16 on the subject line. ATR Protection for Orders That Are
Routed to Away Markets calculated by taking the reference price,
Paper Comments plus or minus a value to be determined
• Send paper comments in triplicate May 17, 2018. by the Exchange, where the reference
to Secretary, Securities and Exchange price is the NBB for sell orders/quotes
I. Introduction
Commission, 100 F Street NE, and the NBO for buy orders/quotes.10
On February 23, 2018, Nasdaq ISE, Accordingly, the ATR is: The reference
Washington, DC 20549–1090. LLC (‘‘ISE’’ or ‘‘Exchange’’) filed with price¥(x) for sell orders/quotes; and the
All submissions should refer to File the Securities and Exchange reference price + (x) for buy orders.11 If
Number SR–GEMX–2018–16. This file Commission (‘‘Commission’’), pursuant an order or quote reaches the outer limit
number should be included on the to Section 19(b)(1) of the Securities of the ATR without being fully
subject line if email is used. To help the Exchange Act of 1934 (‘‘Act’’) 1 and Rule executed, then any unexecuted balance
Commission process and review your 19b–4 thereunder,2 a proposed rule will be cancelled.12
comments more efficiently, please use change to amend Exchange Rule 714
only one method. The Commission will regarding the Acceptable Trade Range ATR for such orders; and (iv) make other
post all comments on the Commission’s (‘‘ATR’’) functionality for orders that are amendments to the proposed rule text to improve
internet website (http://www.sec.gov/ routed to away markets. The proposed the understandability of the current ATR
rules/sro.shtml). Copies of the calculation. Amendment No. 1 was also submitted
rule change was published for comment as a comment to the proposed rule change.
submission, all subsequent in the Federal Register on March 14, Amendment No. 1 is available at: https://
amendments, all written statements 2018.3 On April 20, 2018, the Exchange www.sec.gov/comments/sr-ise-2018-16/ise201816-
with respect to the proposed rule submitted Amendment No. 1 to the 3483594-162248.pdf.
change that are filed with the proposed rule change, which replaced
5 See Securities Exchange Act Release No. 83119
Commission, and all written (April 26, 2018), 83 FR 19367 (May 2, 2018).
and superseded the original filing in its 6 For a more detailed description of the proposal,
communications relating to the entirety.4 On April 26, 2018, the see Notice, supra note 3; Amendment No. 1, supra
proposed rule change between the note 4.
Commission and any person, other than 14 17 CFR 200.30–3(a)(12). 7 The term ‘‘System’’ means the electronic system
those that may be withheld from the 1 15 U.S.C. 78s(b)(1). operated by the Exchange that receives and
public in accordance with the 2 17 CFR 240.19b–4. disseminates quotes, executes orders and reports
transactions. See Exchange Rule 100(a)(53).
provisions of 5 U.S.C. 552, will be 3 See Securities Exchange Act Release No. 82846
8 See Amendment No. 1, supra note 4.
available for website viewing and (March 9, 2018), 83 FR 11254 (‘‘Notice’’).
9 See Exchange Rule 714(b)(1).
4 See Letter to Brent J. Fields, Secretary,
printing in the Commission’s Public Commission, from Adrian Griffiths, Senior
10 See Notice, supra note 3, at 11254–55. For
Reference Room, 100 F Street NE, Associate General Counsel, Nasdaq, Inc., dated purposes of determining the value that will be
Washington, DC 20549, on official April 20, 2018 (‘‘Amendment No. 1’’). Amendment added or subtracted from the reference price, there
No. 1 revises the proposed rule change to: (i) are three categories of options for the ATR: (1)
business days between the hours of
daltland on DSKBBV9HB2PROD with NOTICES
Provide further discussion of the current Penny Pilot Options trading in one cent increments
10:00 a.m. and 3:00 p.m. Copies of the application of the ATR to orders routed away; (ii) for options trading at less than $3.00 and
filing also will be available for modify the proposed rule text regarding the increments of five cents for options trading at $3.00
inspection and copying at the principal recalculation of the ATR for orders routed away or more, (2) Penny Pilot Options trading in one-cent
pursuant to Supplementary Material to Exchange increments for all prices, and (3) Non-Penny Pilot
office of the Exchange. All comments Options. See id.
Rule 1901, if the applicable National Best Bid
received will be posted without change. (‘‘NBB’’) or the National Best Offer (‘‘NBO’’) price 11 See Exchange Rule 714(b)(1)(i).
Persons submitting comments are is improved at the time of routing; (iii) expand the 12 See Exchange Rule 714(b)(1)(ii). The ATR is not
cautioned that we do not redact or edit discussion and justification for recalculating the available for All-or-None Orders or Complex Orders
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Document Created: 2018-05-22 23:48:57
Document Modified: 2018-05-22 23:48:57
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| FR Citation | 83 FR 23964 |
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