83 FR 28681 - Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Schedule of Fees Related to Complex Orders

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 119 (June 20, 2018)

Page Range		28681-28684
FR Document		2018-13161

Federal Register, Volume 83 Issue 119 (Wednesday, June 20, 2018)

[Federal Register Volume 83, Number 119 (Wednesday, June 20, 2018)]
[Notices]
[Pages 28681-28684]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2018-13161]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83431; File No. SR-ISE-2018-51]

Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend the
Schedule of Fees Related to Complex Orders

June 14, 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 June 1, 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.
---------------------------------------------------------------------------

\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 the Schedule of Fees related to
Complex Orders traded on the Exchange.
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 amend the Schedule of
Fees related to Complex Orders traded on the Exchange. Specifically,
the Exchange

[[Page 28682]]

proposes to: (1) Reduce the volume requirements for Priority Customer
\3\ Complex Tier 9, and (2) eliminate the discount for Market Maker \4\
Complex Orders that trade against Priority Customer Complex Orders
preferenced to them in the complex order book.
---------------------------------------------------------------------------

\3\ A ``Priority Customer'' is a person or entity that is not a
broker/dealer in securities, and does not place more than 390 orders
in listed options per day on average during a calendar month for its
own beneficial account(s), as defined in Nasdaq ISE Rule
100(a)(37A).
\4\ ``Market Maker'' refers to ``Competitive Market Makers'' and
``Primary Market Makers'' collectively. See ISE Rule 100(a)(28).
---------------------------------------------------------------------------

I. Priority Customer Complex Order Rebates

Currently, the Exchange has a fee structure in place for Complex
Orders that provides rebates to Priority Customer Complex Orders in
order to encourage Members to bring that order flow to the Exchange.
Specifically, Priority Customer Complex Orders that trade with non-
Priority Customer orders in the complex order book or trade with quotes
and orders on the regular order book are provided rebates in Select
Symbols \5\ and Non-Select Symbols \6\ (other than NDX and MNX) based
on nine volume tiers, as shown in the table below. The Priority
Customer Complex Tiers are based on Total Affiliated Member \7\ Complex
Order Volume (Excluding Crossing Orders \8\ and Responses to Crossing
Orders \9\) Calculated as a Percentage of Customer Total Consolidated
Volume \10\ (hereinafter, ``Complex Order Volume Percentage''). All
Complex Order volume executed on the Exchange, including volume
executed by Affiliated Members, is included in the volume calculation,
except for volume executed as Crossing Orders and Responses to Crossing
Orders. Rebates are provided per contract per leg, and once the
threshold has been reached the rebate for the highest tier is applied
retroactively to all eligible Priority Customer Complex volume.\11\
---------------------------------------------------------------------------

\5\ ``Select Symbols'' are options overlying all symbols listed
on the Nasdaq ISE that are in the Penny Pilot Program.
\6\ ``Non-Select Symbols'' are options overlying all symbols
excluding Select Symbols.
\7\ An ``Affiliated Member'' is a Member that shares at least
75% common ownership with a particular Member as reflected on the
Member's Form BD, Schedule A.
\8\ A ``Crossing Order'' is an order executed in the Exchange's
Facilitation Mechanism, Solicited Order Mechanism, Price Improvement
Mechanism (PIM) or submitted as a Qualified Contingent Cross order.
For purposes of the Fee Schedule, orders executed in the Block Order
Mechanism are also considered Crossing Orders.
\9\ A ``Response to a Crossing Order'' is any contra-side
interest submitted after the commencement of an auction in the
Exchange's Facilitation Mechanism, Solicited Order Mechanism, Block
Order Mechanism or PIM.
\10\ ``Customer Total Consolidated Volume'' means the total
national volume cleared at The Options Clearing Corporation in the
Customer range in equity and ETF options in that month.
\11\ Members will not receive rebates for net zero complex
orders. For purposes of determining which complex orders qualify as
``net zero'' the Exchange will count all complex orders that leg in
to the regular order book and are executed at a net price per
contract that is within a range of $0.01 credit and $0.01 debit.
\12\ 15 U.S.C. 78f(b).

----------------------------------------------------------------------------------------------------------------
Rebate for Rebate for non-
Priority customer complex tier Complex order volume percentage select symbols select symbols
----------------------------------------------------------------------------------------------------------------
Tier 1..................................... 0.000-0.200........................ ($0.25) ($0.40)
Tier 2..................................... Above 0.200-0.400.................. (0.30) (0.55)
Tier 3..................................... Above 0.400-0.600.................. (0.35) (0.70)
Tier 4..................................... Above 0.600-0.800.................. (0.40) (0.75)
Tier 5..................................... Above 0.800-1.000.................. (0.45) (0.80)
Tier 6..................................... Above 1.000-1.600.................. (0.46) (0.80)
Tier 7..................................... Above 1.600-2.000.................. (0.48) (0.80)
Tier 8..................................... Above 2.000-3.500.................. (0.50) (0.85)
Tier 9..................................... Above 3.500........................ (0.50) (0.85)
----------------------------------------------------------------------------------------------------------------

Currently, a Member must execute a Complex Order Volume Percentage
of above 3.5% to qualify for Priority Customer Complex Tier 9. The
Exchange now proposes to reduce the Complex Order Volume Percentage
requirement to above 3.25%, thereby making Priority Customer Complex
Order Tier 9 easier for Members to achieve. As proposed, Members with a
Complex Order Volume Percentage above 2% and up to 3.25% will qualify
for Priority Customer Complex Tier 8, while Members with a Complex
Order Volume Percentage above 3.25% will qualify for Priority Customer
Complex Tier 9. Although Priority Customer Complex Order Tier 8 and 9
are currently eligible for the same $0.50 per contract rebate in Select
Symbols and $0.85 per contract rebate in Non-Select Symbols, the lower
proposed volume requirements for Priority Customer Complex Tier 9 will
benefit Market Makers that currently receive discounted Complex Order
fees in Select Symbols if they achieve this Priority Customer Complex
Tier. Specifically, Market Maker Complex Orders in Select Symbols are
charged a fee of $0.44 per contract for either taking liquidity, or
providing liquidity to a Priority Customer Complex Order, provided that
the firm achieves Priority Customer Complex Tier 9. This fee is
discounted from the regular taker fee of $0.50 per contract (reduced to
$0.47 per contract for Priority Customer Complex Tier 8) and the maker
fee of $0.47 per contract for trading against a Priority Customer.
Thus, reducing the volume requirements for achieving Priority Customer
Complex Tier 9 will make it easier for Market Makers to achieve the
discounted $0.44 per contract rate.

II. Preferenced Market Maker Complex Order Discount

Currently, Market Makers making or taking liquidity in Select
Symbols or Non-Select Symbols receive a discount of $0.02 when trading
against Priority Customer orders preferenced to them in the complex
order book in equity options that are able to be listed and traded on
more than one options exchange. This discount does not apply to FX
Options Symbols or to option classes designated by the Exchange to
receive a guaranteed allocation pursuant to Nasdaq ISE Rule
722(b)(3)(i)(B). The Exchange now proposes to eliminate this discount.
With the recent introduction of new pricing incentives for Complex
Orders, which include the discounted Market Maker fees described in the
section above, the Exchange does not believe that an additional
incentive for preferenced orders is necessary to attract Complex Order
flow.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\12\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5)

[[Page 28683]]

of the Act,\13\ in particular, in that it provides for the equitable
allocation of reasonable dues, fees, and other charges among members
and issuers and other persons using any facility, and is not designed
to permit unfair discrimination between customers, issuers, brokers, or
dealers.
---------------------------------------------------------------------------

\13\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

I. Priority Customer Complex Order Rebates

The Exchange believes it is reasonable and equitable to reduce the
volume requirements for Priority Customer Complex Order Tier 9 as this
change will make it easier for Members to achieve this tier. The
proposed change is designed to incentivize Members to trade Complex
Orders on the Exchange. While the proposed change will not have any
impact on Priority Customer Complex Order rebates since the rebates are
currently the same for Priority Customer Complex Tier 8 and 9, the
Exchange also offers discounted Complex Order fees in Select Symbols
for Market Makers that achieve higher Priority Customer Complex Tiers.
With the proposed change, Market Makers may find it easier to achieve
the higher tier of discounted fee, and thereby lower their execution
costs when trading on the Exchange. Furthermore, the Exchange believes
that the proposed change to the Priority Customer Complex Order Tiers
is equitable and not unfairly discriminatory as this change is designed
to increase trading by Market Makers, which may benefit other market
participants that will have an increased opportunity to trade in
Complex Orders. Market Makers are subject to additional requirements
and obligations (such as quoting requirements) that other market
participants are not. The Exchange believes that the mix of incentives
that it provides will encourage an active market in Complex Orders from
Market Makers and other market participants.

II. Preferenced Market Maker Complex Order Discount

The Exchange believes that it is reasonable and equitable to
eliminate the preferenced Market Maker Complex Order discount as the
Exchange has recently introduced new incentives for Market Makers that
trade Complex Orders. Specifically, Market Makers are now eligible for
tiered Complex Order taker fees based on achieving Priority Customer
Complex Tier 8 or 9. With the changes to the Priority Customer Complex
Tier 9 volume requirements discussed above, the highest tier of
discount will be even easier for Market Makers to achieve. The Exchange
therefore believes that an additional discount based on receiving
preferenced Priority Customer Complex Orders is no longer necessary.
Furthermore, the Exchange believes that eliminating this fee discount
is equitable and not unfairly discriminatory as this discount will no
longer be available for any Market Makers. Market Makers may instead
qualify for the other Complex Order discounts based on meeting the
applicable volume requirements.

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 believes that its
Complex Order fees and rebates remain competitive with those on other
options markets, and will continue to attract order flow to the
Exchange, thereby encouraging additional volume and liquidity to the
benefit of all market participants. The Exchange operates in a highly
competitive market in which market participants can readily direct
their order flow to competing venues. In such an environment, the
Exchange must continually review, and consider adjusting, its fees and
rebates to remain competitive with other exchanges. For the reasons
described above, the Exchange believes that the proposed fee changes
reflect this competitive environment.

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

No written comments were either solicited or received.

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

The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act,\14\ and Rule 19b-4(f)(2) \15\ thereunder.
At any time within 60 days of the filing of the proposed rule change,
the Commission summarily may temporarily suspend such rule change if it
appears to the Commission that such action is: (i) Necessary or
appropriate in the public interest; (ii) for the protection of
investors; or (iii) otherwise in furtherance of the purposes of the
Act. If the Commission takes such action, the Commission shall
institute proceedings to determine whether the proposed rule should be
approved or disapproved.
---------------------------------------------------------------------------

\14\ 15 U.S.C. 78s(b)(3)(A)(ii).
\15\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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 rule-comments@sec.gov. Please include
File Number SR-ISE-2018-51 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-2018-51. 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-2018-51 and should be submitted on
or before July 11, 2018.

[[Page 28684]]

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
---------------------------------------------------------------------------

\16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-13161 Filed 6-19-18; 8:45 am]
BILLING CODE 8011-01-P

Federal Register / Vol. 83, No. 119 / Wednesday, June 20, 2018 / Notices 28683

of the Act,13 in particular, in that it Makers to achieve. The Exchange to determine whether the proposed rule
provides for the equitable allocation of therefore believes that an additional should be approved or disapproved.
reasonable dues, fees, and other charges discount based on receiving preferenced
among members and issuers and other Priority Customer Complex Orders is no IV. Solicitation of Comments
persons using any facility, and is not longer necessary. Furthermore, the Interested persons are invited to
designed to permit unfair Exchange believes that eliminating this submit written data, views, and
discrimination between customers, fee discount is equitable and not arguments concerning the foregoing,
issuers, brokers, or dealers. unfairly discriminatory as this discount
including whether the proposed rule
will no longer be available for any
I. Priority Customer Complex Order change is consistent with the Act.
Market Makers. Market Makers may
Rebates Comments may be submitted by any of
instead qualify for the other Complex
The Exchange believes it is reasonable Order discounts based on meeting the the following methods:
and equitable to reduce the volume applicable volume requirements. Electronic Comments
requirements for Priority Customer
Complex Order Tier 9 as this change B. Self-Regulatory Organization’s • Use the Commission’s internet
will make it easier for Members to Statement on Burden on Competition comment form (http://www.sec.gov/
achieve this tier. The proposed change The Exchange does not believe that rules/sro.shtml); or
is designed to incentivize Members to the proposed rule change will impose • Send an email to rule-comments@
trade Complex Orders on the Exchange. any burden on competition not
While the proposed change will not sec.gov. Please include File Number SR–
necessary or appropriate in furtherance
have any impact on Priority Customer ISE–2018–51 on the subject line.
of the purposes of the Act. The
Complex Order rebates since the rebates Exchange believes that its Complex Paper Comments
are currently the same for Priority Order fees and rebates remain
Customer Complex Tier 8 and 9, the competitive with those on other options • Send paper comments in triplicate
Exchange also offers discounted markets, and will continue to attract to Secretary, Securities and Exchange
Complex Order fees in Select Symbols order flow to the Exchange, thereby Commission, 100 F Street NE,
for Market Makers that achieve higher encouraging additional volume and Washington, DC 20549–1090.
Priority Customer Complex Tiers. With liquidity to the benefit of all market
the proposed change, Market Makers All submissions should refer to File
participants. The Exchange operates in Number SR–ISE–2018–51. This file
may find it easier to achieve the higher a highly competitive market in which
tier of discounted fee, and thereby lower number should be included on the
market participants can readily direct
their execution costs when trading on subject line if email is used. To help the
their order flow to competing venues. In
the Exchange. Furthermore, the Commission process and review your
such an environment, the Exchange
Exchange believes that the proposed must continually review, and consider comments more efficiently, please use
change to the Priority Customer adjusting, its fees and rebates to remain only one method. The Commission will
Complex Order Tiers is equitable and competitive with other exchanges. For post all comments on the Commission’s
not unfairly discriminatory as this the reasons described above, the internet website (http://www.sec.gov/
change is designed to increase trading Exchange believes that the proposed fee rules/sro.shtml). Copies of the
by Market Makers, which may benefit changes reflect this competitive submission, all subsequent
other market participants that will have environment. amendments, all written statements
an increased opportunity to trade in with respect to the proposed rule
Complex Orders. Market Makers are C. Self-Regulatory Organization’s change that are filed with the
subject to additional requirements and Statement on Comments on the Commission, and all written
obligations (such as quoting Proposed Rule Change Received From communications relating to the
requirements) that other market Members, Participants, or Others proposed rule change between the
participants are not. The Exchange No written comments were either Commission and any person, other than
believes that the mix of incentives that solicited or received. those that may be withheld from the
it provides will encourage an active public in accordance with the
market in Complex Orders from Market III. Date of Effectiveness of the
Proposed Rule Change and Timing for provisions of 5 U.S.C. 552, will be
Makers and other market participants. available for website viewing and
Commission Action
II. Preferenced Market Maker Complex printing in the Commission’s Public
The foregoing rule change has become Reference Room, 100 F Street NE,
Order Discount effective pursuant to Section Washington, DC 20549, on official
The Exchange believes that it is 19(b)(3)(A)(ii) of the Act,14 and Rule business days between the hours of
reasonable and equitable to eliminate 19b–4(f)(2) 15 thereunder. At any time 10:00 a.m. and 3:00 p.m. Copies of the
the preferenced Market Maker Complex within 60 days of the filing of the filing also will be available for
Order discount as the Exchange has proposed rule change, the Commission inspection and copying at the principal
recently introduced new incentives for summarily may temporarily suspend office of the Exchange. All comments
Market Makers that trade Complex such rule change if it appears to the
Orders. Specifically, Market Makers are received will be posted without change.
Commission that such action is: (i)
now eligible for tiered Complex Order Persons submitting comments are
Necessary or appropriate in the public
cautioned that we do not redact or edit
sradovich on DSK3GMQ082PROD with NOTICES

taker fees based on achieving Priority interest; (ii) for the protection of
Customer Complex Tier 8 or 9. With the personal identifying information from
investors; or (iii) otherwise in
changes to the Priority Customer comment submissions. You should
furtherance of the purposes of the Act.
Complex Tier 9 volume requirements If the Commission takes such action, the submit only information that you wish
discussed above, the highest tier of Commission shall institute proceedings to make available publicly. All
discount will be even easier for Market submissions should refer to File
14 15 U.S.C. 78s(b)(3)(A)(ii). Number SR–ISE–2018–51 and should be
13 15 U.S.C. 78f(b)(4) and (5). 15 17 CFR 240.19b–4(f)(2). submitted on or before July 11, 2018.

VerDate Sep<11>2014 17:58 Jun 19, 2018 Jkt 244001 PO 00000 Frm 00077 Fmt 4703 Sfmt 4703 E:\FR\FM\20JNN1.SGM 20JNN1

28684 Federal Register / Vol. 83, No. 119 / Wednesday, June 20, 2018 / Notices

For the Commission, by the Division of II. Self-Regulatory Organization’s accessed via physical ports in Chicago.
Trading and Markets, pursuant to delegated Statement of the Purpose of, and Members and Non-Members may
authority.16 Statutory Basis for, the Proposed Rule maintain physical ports in order to be
Eduardo A. Aleman, Change able to connect to the Disaster Recovery
Assistant Secretary. In its filing with the Commission, the Systems in case of a disaster. Currently,
[FR Doc. 2018–13161 Filed 6–19–18; 8:45 am] Exchange included statements physical ports that are used to connect
BILLING CODE 8011–01–P concerning the purpose of and basis for to the Disaster Recovery Systems are
the proposed rule change and discussed assessed the same fees as physical ports
any comments it received on the used to connect to the Exchange’s
SECURITIES AND EXCHANGE proposed rule change. The text of these trading system. The Exchange proposes
COMMISSION statements may be examined at the to establish separate pricing for physical
places specified in Item IV below. The ports that are used to connect to the
[Release No. 34–83441; File No. SR– Exchange has prepared summaries, set Disaster Recovery Systems (‘‘Disaster
CboeBYX–2018–006] forth in Sections A, B, and C below, of Recovery Physical Ports’’). Specifically,
the most significant parts of such the Exchange proposes to assess a
Self-Regulatory Organizations; Cboe statements. monthly fee of $2,000 per 1 gigabyte
BYX Exchange, Inc.; Notice of Filing Disaster Recovery Physical Port and a
and Immediate Effectiveness of A. Self-Regulatory Organization’s monthly fee of $6,000 per 10 gigabyte
Proposed Rule Change Related to Statement of the Purpose of, and the Disaster Recovery Physical Port. This
Physical Port Fees for BYX Statutory Basis for, the Proposed Rule amount will continue to enable the
Change Exchange to maintain the Disaster
June 14, 2018. Recovery Physical Ports in case they
1. Purpose
Pursuant to Section 19(b)(1) of the become necessary. The Exchange notes
Securities Exchange Act of 1934 (the The Exchange proposes to implement that the Disaster Recovery Physical
‘‘Act’’),1 and Rule 19b–4 thereunder,2 proposed changes to its fee schedule Ports may also be used to access the
notice is hereby given that on June 1, relating to physical connectivity fees, Disaster Recovery Systems for the
2018, Cboe BYX Exchange, Inc. (the effective June 1, 2018. By way of following affiliate exchanges Cboe BZX
‘‘Exchange’’ or ‘‘BYX’’) filed with the background, a physical port is utilized Exchange, Inc., Cboe EDGX Exchange,
Securities and Exchange Commission by a Member or non-Member to connect Inc., Cboe EDGA Exchange, Inc., Cboe
(‘‘Commission’’) the proposed rule to the Exchange at the data centers C2 Exchange, Inc., Cboe Exchange, Inc.
where the Exchange’s servers are and Cboe Futures Exchange, LLC as
change as described in Items I, II and III
located. The Exchange currently well. The Exchange proposes to provide
below, which Items have been prepared
maintains a presence in two third-party that market participants will only be
by the Exchange. The Exchange has
data centers: (i) The primary data center assessed a single fee for any Disaster
designated the proposed rule change as
where the Exchange’s business is Recovery Physical Port that also
one establishing or changing a member
primarily conducted on a daily basis, accesses the Disaster Recover Systems
due, fee, or other charge imposed by the
and (ii) a secondary data center, which for these exchanges.7
Exchange under Section 19(b)(3)(A)(ii)
is predominantly maintained for
of the Act 3 and Rule 19b–4(f)(2) 2. Statutory Basis
business continuity purposes. The
thereunder,4 which renders the Exchange currently assesses the
proposed rule change effective upon The Exchange believes that the
following physical connectivity fees for proposed rule change is consistent with
filing with the Commission. The Members and non-Members on a
Commission is publishing this notice to the objectives of Section 6 of the Act,8
monthly basis: $2,000 per physical port in general, and furthers the objectives of
solicit comments on the proposed rule for a 1 gigabyte circuit and $7,000 per
change from interested persons. Section 6(b)(4),9 in particular, as it is
physical port for a 10 gigabyte circuit. designed to provide for the equitable
I. Self-Regulatory Organization’s The Exchange proposes to increase the allocation of reasonable dues, fees and
Statement of the Terms of Substance of fees per physical ports from (i) $2,000 other charges among its Members and
the Proposed Rule Change to $2,500 per month, per port for a 1 other persons using its facilities. The
gigabyte circuit and (ii) $7,000 to $7,500 Exchange also notes that it operates in
The Exchange filed a proposal to per month, per port for a 10 gigabyte a highly-competitive market in which
amend its fees and rebates applicable to circuit. The Exchange notes the market participants can readily direct
Members 5 and non-Members of the proposed fees enable it to continue to order flow to competing venues if they
Exchange pursuant to BYX Rule 15.1(a) maintain and improve its market deem fee levels at a particular venue to
and (c) to modify its fees for physical technology and services and also notes be excessive. The proposed rule change
ports. that the proposed fee changes are in line reflects a competitive pricing structure
The text of the proposed rule change with the amounts assessed by other designed to incent market participants
is available at the Exchange’s website at exchanges for similar connections.6 to direct their order flow to the
www.markets.cboe.com, at the principal The Exchange also proposes to adopt Exchange.
office of the Exchange, and at the separate physical port fees for The Exchange believes that the
Commission’s Public Reference Room. connection to its secondary data center, proposed changes are equitable and
which is predominantly maintained for non-discriminatory in that it applies
business continuity purposes (‘‘Disaster
sradovich on DSK3GMQ082PROD with NOTICES

16 17 CFR 200.30–3(a)(12). uniformly to all Members. Members and
1 15 U.S.C. 78s(b)(1). Recovery Systems’’). Particularly, the
2 17 CFR 240.19b–4. Disaster Recovery Systems can be 7 For example, if a market participant uses a 1
3 15 U.S.C. 78s(b)(3)(A)(ii). gigabyte Disaster Recovery Physical Port to connect
4 17 CFR 240.19b–4(f)(2). 6 See e.g., NYSE Arca Equities Fees and Charges, to the Disaster Recovery Systems for both BYX and
5 The term ‘‘Member’’ is defined as ‘‘any NYSE Arca Marketplace: Other Fees and Charges, EDGX, the market participant would only be
registered broker or dealer that has been admitted Connectivity Fees. See also, Nasdaq Phlx LLC assessed one monthly fee of $2,000.
8 15 U.S.C. 78f.
to membership in the Exchange.’’ See Exchange Pricing Schedule, Section XI, Direct Connectivity to
Rule 1.5(n). Phlx. 9 15 U.S.C. 78f(b)(4).

VerDate Sep<11>2014 17:58 Jun 19, 2018 Jkt 244001 PO 00000 Frm 00078 Fmt 4703 Sfmt 4703 E:\FR\FM\20JNN1.SGM 20JNN1

Document Created: 2018-06-20 00:19:29
Document Modified: 2018-06-20 00:19:29

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		83 FR 28681