83 FR 31243 - Self-Regulatory Organizations; Nasdaq ISE LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Penny Pilot Program

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 128 (July 3, 2018)

Page Range		31243-31244
FR Document		2018-14292
Federal Register, Volume 83 Issue 128 (Tuesday, July 3, 2018)
[Federal Register Volume 83, Number 128 (Tuesday, July 3, 2018)]
[Notices]
[Pages 31243-31244]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-14292]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83531; File No. SR-ISE-2018-57]


Self-Regulatory Organizations; Nasdaq ISE LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Extend the Penny 
Pilot Program

June 28, 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 25, 2018, Nasdaq ISE LLC (``ISE'' or ``Exchange'') filed with 
the Securities and Exchange Commission (``SEC'' or ``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the Exchange. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its rules to extend a pilot program 
to quote and to trade certain options classes in penny increments 
(``Penny Pilot Program'').
    The text of the proposed rule change is available on the Exchange's 
website at http://ise.cchwallstreet.com/, at the principal office of 
the Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Under the Penny Pilot Program, the minimum price variation for all 
participating options classes, except for the Nasdaq-100 Index Tracking 
Stock (``QQQQ''), the SPDR S&P 500 Exchange Traded Fund (``SPY'') and 
the iShares Russell 2000 Index Fund (``IWM''), is $0.01 for all 
quotations in options series that are quoted at less than $3 per 
contract and $0.05 for all quotations in options series that are quoted 
at $3 per contract or greater. QQQQ, SPY and IWM are quoted in $0.01 
increments for all options series. The Penny Pilot Program is currently 
scheduled to expire on June 30, 2018.\3\ The Exchange proposes to 
extend the Penny Pilot Program through December 31, 2018, and to 
provide a revised date for adding replacement issues to the Penny Pilot 
Program. The Exchange proposes that any Penny Pilot Program issues that 
have been delisted may be replaced on the second trading day following 
July 1, 2018. The replacement issues will be selected based on trading 
activity for the most recent six month period excluding the month 
immediately preceding the replacement (i.e., beginning December 1, 
2017, and ending May 31, 2018). This filing does not propose any 
substantive changes to the Penny Pilot Program: All classes currently 
participating will remain the same and all minimum increments will 
remain unchanged. The Exchange believes the benefits to public 
customers and other market participants who will be able to express 
their true prices to buy and sell options have been demonstrated to 
outweigh any increase in quote traffic.
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    \3\ See Exchange Act Release No. 82357 (December 19, 2017), 82 
FR 61065 (December 26, 2017) (SR-ISE-2017-107).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder that are applicable to a national securities exchange, and, 
in particular, with the requirements of Section 6(b) of the Act.\4\ 
Specifically, the proposed rule change is consistent with Section 
6(b)(5) of the Act,\5\ because it is designed to promote just and 
equitable principles of trade, remove impediments to and perfect the 
mechanisms of a free and open market and a national market system and, 
in general, to protect investors and the public interest. In 
particular, the proposed rule change, which extends the Penny Pilot 
Program for an additional six months, will enable public customers and 
other market participants to express their true prices to buy and sell 
options to the benefit of all market participants.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\6\ the Exchange does 
not believe that the proposed rule change will impose any burden on 
intermarket or intramarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. Specifically, 
the Exchange believes that, by extending the expiration of the Penny 
Pilot Program, the proposed rule change will allow for further analysis 
of the Penny Pilot Program and a determination of how the Penny Pilot 
Program should be structured in the future. In doing so, the proposed 
rule change will also serve to promote regulatory clarity and 
consistency, thereby reducing burdens on the marketplace and 
facilitating investor protection.
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    \6\ 15 U.S.C. 78f(b)(8).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \7\ and Rule 19b-4(f)(6) thereunder.\8\ 
Because the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A)

[[Page 31244]]

of the Act and Rule 19b-4(f)(6)(iii) thereunder.
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    \7\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \8\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \9\ normally 
does not become operative prior to 30 days after the date of the 
filing.\10\ However, pursuant to Rule 19b-4(f)(6)(iii),\11\ the 
Commission may designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has asked the Commission to waive the 30-day operative delay so that 
the proposal may become operative immediately upon filing. The 
Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest 
because doing so will allow the Pilot Program to continue without 
interruption in a manner that is consistent with the Commission's prior 
approval of the extension and expansion of the Pilot Program and will 
allow the Exchange and the Commission additional time to analyze the 
impact of the Pilot Program.\12\ Accordingly, the Commission designates 
the proposed rule change as operative upon filing with the 
Commission.\13\
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    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the Exchange to give the Commission written notice of the 
Exchange's intent to file the proposed rule change along with a 
brief description and the text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission. The 
Exchange has satisfied this pre-filing requirement.
    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ See Securities Exchange Act Release No. 61061 (November 24, 
2009), 74 FR 62857 (December 1, 2009) (SR-NYSEArca-2009-44).
    \13\ For purposes only of waiving the operative delay for this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \14\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \14\ 15 U.S.C. 78s(b)(2)(B).
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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-2018-57 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-2018-57. 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-2018-57 and should be submitted on 
or before July 24, 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).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-14292 Filed 7-2-18; 8:45 am]
BILLING CODE 8011-01-P
Federal Register / Vol. 83, No. 128 / Tuesday, July 3, 2018 / Notices 31243

to make available publicly. All statements may be examined at the Act,5 because it is designed to promote
submissions should refer to File places specified in Item IV below. The just and equitable principles of trade,
Number SR–BX–2018–024, and should Exchange has prepared summaries, set remove impediments to and perfect the
be submitted on or before July 24, 2018. forth in sections A, B, and C below, of mechanisms of a free and open market
For the Commission, by the Division of the most significant aspects of such and a national market system and, in
Trading and Markets, pursuant to delegated statements. general, to protect investors and the
authority.14 A. Self-Regulatory Organization’s public interest. In particular, the
Eduardo A. Aleman, Statement of the Purpose of, and proposed rule change, which extends
Assistant Secretary. Statutory Basis for, the Proposed Rule the Penny Pilot Program for an
[FR Doc. 2018–14277 Filed 7–2–18; 8:45 am] Change additional six months, will enable
BILLING CODE 8011–01–P
public customers and other market
1. Purpose participants to express their true prices
Under the Penny Pilot Program, the to buy and sell options to the benefit of
SECURITIES AND EXCHANGE minimum price variation for all all market participants.
COMMISSION participating options classes, except for B. Self-Regulatory Organization’s
the Nasdaq-100 Index Tracking Stock Statement on Burden on Competition
[Release No. 34–83531; File No. SR–ISE–
2018–57] (‘‘QQQQ’’), the SPDR S&P 500 Exchange
Traded Fund (‘‘SPY’’) and the iShares In accordance with Section 6(b)(8) of
Self-Regulatory Organizations; Nasdaq Russell 2000 Index Fund (‘‘IWM’’), is the Act,6 the Exchange does not believe
ISE LLC; Notice of Filing and $0.01 for all quotations in options series that the proposed rule change will
Immediate Effectiveness of Proposed that are quoted at less than $3 per impose any burden on intermarket or
Rule Change To Extend the Penny contract and $0.05 for all quotations in intramarket competition that is not
Pilot Program options series that are quoted at $3 per necessary or appropriate in furtherance
contract or greater. QQQQ, SPY and of the purposes of the Act. Specifically,
June 28, 2018. IWM are quoted in $0.01 increments for the Exchange believes that, by extending
Pursuant to Section 19(b)(1) of the all options series. The Penny Pilot the expiration of the Penny Pilot
Securities Exchange Act of 1934 Program is currently scheduled to Program, the proposed rule change will
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 expire on June 30, 2018.3 The Exchange allow for further analysis of the Penny
notice is hereby given that on June 25, proposes to extend the Penny Pilot Pilot Program and a determination of
2018, Nasdaq ISE LLC (‘‘ISE’’ or Program through December 31, 2018, how the Penny Pilot Program should be
‘‘Exchange’’) filed with the Securities and to provide a revised date for adding structured in the future. In doing so, the
and Exchange Commission (‘‘SEC’’ or replacement issues to the Penny Pilot proposed rule change will also serve to
‘‘Commission’’) the proposed rule Program. The Exchange proposes that promote regulatory clarity and
change as described in Items I and II any Penny Pilot Program issues that consistency, thereby reducing burdens
below, which Items have been prepared have been delisted may be replaced on on the marketplace and facilitating
by the Exchange. The Commission is the second trading day following July 1, investor protection.
publishing this notice to solicit 2018. The replacement issues will be
comments on the proposed rule change selected based on trading activity for the C. Self-Regulatory Organization’s
from interested persons. most recent six month period excluding Statement on Comments on the
the month immediately preceding the Proposed Rule Change Received From
I. Self-Regulatory Organization’s Members, Participants, or Others
Statement of the Terms of Substance of replacement (i.e., beginning December
the Proposed Rule Change 1, 2017, and ending May 31, 2018). This No written comments were either
filing does not propose any substantive solicited or received.
The Exchange proposes to amend its changes to the Penny Pilot Program: All
rules to extend a pilot program to quote classes currently participating will III. Date of Effectiveness of the
and to trade certain options classes in remain the same and all minimum Proposed Rule Change and Timing for
penny increments (‘‘Penny Pilot increments will remain unchanged. The Commission Action
Program’’). Exchange believes the benefits to public
The text of the proposed rule change The Exchange has filed the proposed
customers and other market participants rule change pursuant to Section
is available on the Exchange’s website at who will be able to express their true
http://ise.cchwallstreet.com/, at the 19(b)(3)(A)(iii) of the Act 7 and Rule
prices to buy and sell options have been
principal office of the Exchange, and at 19b–4(f)(6) thereunder.8 Because the
demonstrated to outweigh any increase
the Commission’s Public Reference proposed rule change does not: (i)
in quote traffic.
Room. Significantly affect the protection of
2. Statutory Basis investors or the public interest; (ii)
II. Self-Regulatory Organization’s impose any significant burden on
Statement of the Purpose of, and The Exchange believes that the
proposed rule change is consistent with competition; and (iii) become operative
Statutory Basis for, the Proposed Rule prior to 30 days from the date on which
Change the requirements of the Act and the
rules and regulations thereunder that it was filed, or such shorter time as the
In its filing with the Commission, the are applicable to a national securities Commission may designate, if
Exchange included statements exchange, and, in particular, with the consistent with the protection of
sradovich on DSK3GMQ082PROD with NOTICES

concerning the purpose of and basis for requirements of Section 6(b) of the Act.4 investors and the public interest, the
the proposed rule change and discussed Specifically, the proposed rule change is proposed rule change has become
any comments it received on the consistent with Section 6(b)(5) of the effective pursuant to Section 19(b)(3)(A)
proposed rule change. The text of these
3 See Exchange Act Release No. 82357 (December 5 15 U.S.C. 78f(b)(5).
14 17 CFR 200.30–3(a)(12). 6 15 U.S.C. 78f(b)(8).
19, 2017), 82 FR 61065 (December 26, 2017) (SR–
1 15 U.S.C. 78s(b)(1). ISE–2017–107). 7 15 U.S.C. 78s(b)(3)(A)(iii).
2 17 CFR 240.19b–4. 4 15 U.S.C. 78f(b). 8 17 CFR 240.19b–4(f)(6).

VerDate Sep<11>2014 17:07 Jul 02, 2018 Jkt 244001 PO 00000 Frm 00127 Fmt 4703 Sfmt 4703 E:\FR\FM\03JYN1.SGM 03JYN1
31244 Federal Register / Vol. 83, No. 128 / Tuesday, July 3, 2018 / Notices

of the Act and Rule 19b–4(f)(6)(iii) change is consistent with the Act. SECURITIES AND EXCHANGE
thereunder. Comments may be submitted by any of COMMISSION
A proposed rule change filed under the following methods:
Rule 19b–4(f)(6) 9 normally does not [[Release No. 34–83545; File No. SR–ICC–
become operative prior to 30 days after Electronic Comments 2018–007]
the date of the filing.10 However, • Use the Commission’s internet Self-Regulatory Organizations; ICE
pursuant to Rule 19b–4(f)(6)(iii),11 the comment form (http://www.sec.gov/ Clear Credit LLC; Notice of Filing of
Commission may designate a shorter rules/sro.shtml); or Proposed Rule Change, Security-
time if such action is consistent with the Based Swap Submission, or Advance
protection of investors and the public • Send an email to rule-comments@
sec.gov. Please include File Number SR– Notice Relating to the Clearance of an
interest. The Exchange has asked the
ISE–2018–57 on the subject line. Additional Credit Default Swap
Commission to waive the 30-day
Contract
operative delay so that the proposal may Paper Comments
become operative immediately upon June 28, 2018
filing. The Commission believes that • Send paper comments in triplicate Pursuant to Section 19(b)(1) of the
waiving the 30-day operative delay is to Secretary, Securities and Exchange Securities Exchange Act of 1934, 15
consistent with the protection of Commission, 100 F Street NE, U.S.C. 78s(b)(1) and Rule 19b–4, 17 CFR
investors and the public interest Washington, DC 20549–1090. 240.19b–4, notice is hereby given that
because doing so will allow the Pilot on June 13, 2018, ICE Clear Credit LLC
All submissions should refer to File
Program to continue without (‘‘ICC’’) filed with the Securities and
Number SR–ISE–2018–57. This file
interruption in a manner that is Exchange Commission the proposed
number should be included on the
consistent with the Commission’s prior rule change, security-based swap
subject line if email is used. To help the
approval of the extension and expansion submission, or advance notice as
Commission process and review your
of the Pilot Program and will allow the described in Items I, II, and III below,
comments more efficiently, please use
Exchange and the Commission which Items have been prepared
only one method. The Commission will
additional time to analyze the impact of primarily by ICC. The Commission is
post all comments on the Commission’s
the Pilot Program.12 Accordingly, the publishing this notice to solicit
internet website (http://www.sec.gov/
Commission designates the proposed comments on the proposed rule change,
rules/sro.shtml). Copies of the
rule change as operative upon filing security-based swap submission, or
submission, all subsequent
with the Commission.13 advance notice from interested persons.
At any time within 60 days of the amendments, all written statements
filing of such proposed rule change, the with respect to the proposed rule I. Clearing Agency’s Statement of the
Commission summarily may change that are filed with the Terms of Substance of the Proposed
temporarily suspend such rule change if Commission, and all written Rule Change, Security-Based Swap
it appears to the Commission that such communications relating to the Submission, or Advance Notice
action is necessary or appropriate in the proposed rule change between the
The principal purpose of the
public interest, for the protection of Commission and any person, other than
proposed rule change is to revise the
investors, or otherwise in furtherance of those that may be withheld from the
ICC Rulebook (the ‘‘Rules’’) to provide
the purposes of the Act. If the public in accordance with the
for the clearance of an additional
Commission takes such action, the provisions of 5 U.S.C. 552, will be
Standard Emerging Market Sovereign
Commission shall institute proceedings available for website viewing and
CDS contract (‘‘EM Contract’’).
under Section 19(b)(2)(B) 14 of the Act to printing in the Commission’s Public
determine whether the proposed rule Reference Room, 100 F Street NE, II. Clearing Agency’s Statement of the
change should be approved or Washington, DC 20549, on official Purpose of, and Statutory Basis for, the
disapproved. business days between the hours of Proposed Rule Change, Security-Based
10:00 a.m. and 3:00 p.m. Copies of the Swap Submission, or Advance Notice
IV. Solicitation of Comments filing also will be available for In its filing with the Commission, ICC
Interested persons are invited to inspection and copying at the principal included statements concerning the
submit written data, views, and office of the Exchange. All comments purpose of and basis for the proposed
arguments concerning the foregoing, received will be posted without change. rule change, security-based swap
including whether the proposed rule Persons submitting comments are submission, or advance notice and
cautioned that we do not redact or edit discussed any comments it received on
9 17 CFR 240.19b–4(f)(6). personal identifying information from the proposed rule change, security-
10 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– comment submissions. You should based swap submission, or advance
4(f)(6)(iii) requires the Exchange to give the submit only information that you wish
Commission written notice of the Exchange’s intent notice. The text of these statements may
to file the proposed rule change along with a brief
to make available publicly. All be examined at the places specified in
description and the text of the proposed rule submissions should refer to File Item IV below. ICC has prepared
change, at least five business days prior to the date Number SR–ISE–2018–57 and should be summaries, set forth in sections (A), (B),
of filing of the proposed rule change, or such submitted on or before July 24, 2018.
shorter time as designated by the Commission. The and (C) below, of the most significant
Exchange has satisfied this pre-filing requirement. For the Commission, by the Division of aspects of these statements.
11 17 CFR 240.19b–4(f)(6)(iii). Trading and Markets, pursuant to delegated
sradovich on DSK3GMQ082PROD with NOTICES

12 See Securities Exchange Act Release No. 61061 authority.15 (A) Clearing Agency’s Statement of the
(November 24, 2009), 74 FR 62857 (December 1, Eduardo A. Aleman,
Purpose of, and Statutory Basis for, the
2009) (SR–NYSEArca–2009–44). Proposed Rule Change, Security-Based
13 For purposes only of waiving the operative Assistant Secretary.
Swap Submission, or Advance Notice
delay for this proposal, the Commission has [FR Doc. 2018–14292 Filed 7–2–18; 8:45 am]
considered the proposed rule’s impact on
BILLING CODE 8011–01–P
(a) Purpose
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f). The purpose of the proposed rule
14 15 U.S.C. 78s(b)(2)(B). 15 17 CFR 200.30–3(a)(12). change is to adopt rules that will

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Document Created: 2018-07-02 23:55:45
Document Modified: 2018-07-02 23:55:45
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 31243