83_FR_42354 83 FR 42193 - Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Schedule of Fees at Section II

83 FR 42193 - Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Schedule of Fees at Section II

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 161 (August 20, 2018)

Page Range42193-42195
FR Document2018-17828

Federal Register, Volume 83 Issue 161 (Monday, August 20, 2018)
[Federal Register Volume 83, Number 161 (Monday, August 20, 2018)]
[Notices]
[Pages 42193-42195]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-17828]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83841; File No. SR-ISE-2018-72]


Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend the 
Schedule of Fees at Section II

August 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 July 30, 2018, Nasdaq ISE, LLC (``ISE'' or ``Exchange'') filed with 
the Securities and Exchange Commission (``Commission'') the proposed 
rule change as described in Items I and II below, which Items have been 
prepared by the Exchange. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.

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[[Page 42194]]

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 at Section II 
entitled ``Complex Orders Fees and Rebates.''
    While the changes proposed herein are effective upon filing, the 
Exchange has designated the amendments become operative on August 1, 
2018.
    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 at Section II entitled ``Complex Orders Fees and Rebates.'' 
Specifically, the Exchange is proposing to lower the qualifying Complex 
Order Volume in Tiers 4-7, as explained in more detail below, to 
attract a greater amount of Priority Customer \3\ Complex Order flow on 
ISE by paying the same rebates, but requiring less qualifying volume in 
those tiers.
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    \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). Unless otherwise noted, when used in this Schedule of 
Fees the term ``Priority Customer'' includes ``Retail'' as defined 
below.
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    Currently, the Exchange has a pricing 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 are provided 
rebates in Select Symbols \4\ and Non-Select Symbols.\5\ Rebates are 
provided per contract per leg if the order trades with non-Priority 
Customer orders in the Complex Order Book or trades with quotes and 
orders on the regular order book. Customer Complex Order rebates are 
paid a rebate based on a percentage of industry volume. Priority 
Customer Complex Tiers are based on Total Affiliated Member Complex 
Order Volume (excluding Crossing Orders and Responses to Crossing 
Orders) and are calculated as a percentage of Customer Total 
Consolidated Volume. 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.\6\ Currently, there are nine Priority 
Customer Complex Order Tiers based on the percentage of industry volume 
calculation:
---------------------------------------------------------------------------

    \4\ ``Select Symbols'' are options overlying all symbols listed 
on the Nasdaq ISE that are in the Penny Pilot Program.
    \5\ ``Non-Select Symbols'' are options overlying all symbols 
excluding Select Symbols. For Non-Select Symbols, no rebates will be 
paid for orders in NDX, NQX and MNX
    \6\ 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. Furthermore, ``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.

 
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
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%-3.250%................          (0.50)          (0.85)
Tier 9.....................................  Above 3.250%.......................          (0.50)          (0.85)
----------------------------------------------------------------------------------------------------------------

    At this time the Exchange proposes to amend the Total Affiliated 
Member Complex Order Volume, which excludes Crossing Orders and 
Responses to Crossing Orders, that are calculated as a percentage of 
Customer Total Consolidated Volume in Tiers 4-7. Today, Tier 4 requires 
Total Affiliated Member Complex Order Volume between 0.600% and 0.800%. 
The Exchange is amending Tier 4 to require Total Affiliated Member 
Complex Order Volume between 0.600% and 0.750%. Today, Tier 5 requires 
Total Affiliated Member Complex Order Volume between 0.800% and 1.000%. 
The Exchange is amending Tier 5 to require Total Affiliated Member 
Complex Order Volume between 0.750% and 1.000%. So, today a portion of 
Complex Order volume which qualified for Tier 4 volume would qualify as 
Tier 5 volume pursuant to this proposal. Today, Tier 6 requires Total 
Affiliated Member Complex Order Volume between 1.000%-1.600%. The 
Exchange is amending Tier 6 to require Total Affiliated Member Complex 
Order Volume between 1.000%-1.500%. So, today a portion of Complex 
Order volume which qualified as Tier 5 volume would qualify for Tier 6 
volume pursuant to this proposal. Today, Tier 7 requires Total 
Affiliated Member Complex Order Volume between 1.600%-2.000%. The 
Exchange is amending Tier 7 to require Total Affiliated Member Complex 
Order Volume between 1.500%-2.000%. So, today a portion of Complex 
Order volume which qualified as Tier 6 volume would qualify as Tier 7 
volume pursuant to this proposal. Members may earn greater rebates in 
Select and Non-Select Symbols simply by sending in certain of the same 
volume in Tiers 4-7 today, provided it would qualify for the higher 
tier pursuant to this proposal which lowers volume in Tier 4-7. No 
changes are proposed to Tier 1-3 or Tiers 8 and 9. No changes are 
proposed to any corresponding rebates in either Select or Non-Select 
Symbols.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b)

[[Page 42195]]

of the Act,\7\ in general, and furthers the objectives of Sections 
6(b)(4) and 6(b)(5) of the Act,\8\ 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.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed changes to the Priority 
Customer Complex Order Tiers are reasonable as these changes are 
designed to incentivize Members to trade Complex Orders, and, in 
particular Priority Customer Complex Orders, on the Exchange. The 
Exchange's proposal, which lowers the qualifying Total Affiliated 
Member Complex Order Volume in Tiers 4-7, is intended to encourage 
Members to submit the same or a greater amount of Priority Customer 
Complex Order flow to obtain a higher rebate.
    In addition, the Exchange believes that the proposed changes are 
equitable and not unfairly discriminatory as these changes are designed 
to encourage Members to transact more Complex Order flow, and in 
particular, Priority Customer Complex Orders, on ISE. The Exchange does 
not believe that it is unfairly discriminatory to provide rebates only 
to Priority Customer Complex Orders as this type of order flow enhances 
liquidity on the Exchange for the benefit of all market participants by 
providing more trading opportunities, which attracts Market Makers. The 
Exchange believes that the proposed changes to the Priority Customer 
Complex Tiers will benefit all market participants that trade on ISE by 
increasing their opportunities to trade and earn rebates.

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 the 
proposed changes will enhance both inter-market and intra-market 
competition by increasing opportunities for Members to obtain rebates 
by transacting Priority Customer Complex Orders. The Exchange believes 
that the proposed 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. Priority Customer Complex Order 
flow enhances liquidity on the Exchange for the benefit of all market 
participants by providing more trading opportunities, which attracts 
Market Makers.
    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 \9\ and Rule 19b-4(f)(2) \10\ 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.
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    \9\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \10\ 17 CFR 240.19b-4(f)(2).
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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-2018-72 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-2018-72. 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-2018-72 and should be submitted on 
or before September 10, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2018-17828 Filed 8-17-18; 8:45 am]
 BILLING CODE 8011-01-P



                                                                            Federal Register / Vol. 83, No. 161 / Monday, August 20, 2018 / Notices                                                  42193

                                                  The website for the Fund will include                competition among market participants,                proposed rule change between the
                                               the prospectus for the Fund and                         to the benefit of investors and the                   Commission and any person, other than
                                               additional data relating to NAV and                     marketplace.                                          those that may be withheld from the
                                               other applicable quantitative                                                                                 public in accordance with the
                                                                                                       C. Self-Regulatory Organization’s
                                               information. Moreover, prior to                                                                               provisions of 5 U.S.C. 552, will be
                                                                                                       Statement on Comments on the
                                               commencement of trading, the Exchange                                                                         available for website viewing and
                                               will inform its ETP Holders in an                       Proposed Rule Change Received From
                                                                                                       Members, Participants, or Others                      printing in the Commission’s Public
                                               Information Bulletin of the special                                                                           Reference Room, 100 F Street NE,
                                               characteristics and risks associated with                 No written comments were solicited
                                                                                                                                                             Washington, DC 20549 on official
                                               trading the Shares. Trading in Shares of                or received with respect to the proposed
                                                                                                                                                             business days between the hours of
                                               the Fund will be halted if the circuit                  rule change.
                                                                                                                                                             10:00 a.m. and 3:00 p.m. Copies of such
                                               breaker parameters in NYSE Arca Rule                    III. Date of Effectiveness of the
                                               7.12–E have been reached or because of                                                                        filing also will be available for
                                                                                                       Proposed Rule Change and Timing for                   inspection and copying at the principal
                                               market conditions or for reasons that, in
                                                                                                       Commission Action                                     office of the Exchange. All comments
                                               the view of the Exchange, make trading
                                               the Shares inadvisable. In addition, as                    Within 45 days of the date of                      received will be posted without change.
                                               noted above, investors will have ready                  publication of this notice in the Federal             Persons submitting comments are
                                               access to information regarding the                     Register or within such longer period                 cautioned that we do not redact or edit
                                               Fund’s holdings, the IIV, the Fund’s                    up to 90 days (i) as the Commission may               personal identifying information from
                                               portfolio, and quotation and last sale                  designate if it finds such longer period              comment submissions. You should
                                               information for the Shares.                             to be appropriate and publishes its                   submit only information that you wish
                                                  The proposed rule change is designed                 reasons for so finding or (ii) as to which            to make available publicly. All
                                               to perfect the mechanism of a free and                  the self-regulatory organization                      submissions should refer to File
                                               open market and, in general, to protect                 consents, the Commission will:                        Number SR–NYSEArca–2018–57, and
                                               investors and the public interest in that                  (A) By order approve or disapprove                 should be submitted on or before
                                               it will facilitate the listing and trading              the proposed rule change, or                          September 10, 2018.
                                               of an additional type of exchange-traded                   (B) institute proceedings to determine
                                               product that will enhance competition                   whether the proposed rule change                        For the Commission, by the Division of
                                               among market participants, to the                       should be disapproved.                                Trading and Markets, pursuant to delegated
                                               benefit of investors and the marketplace.                                                                     authority.27
                                                                                                       IV. Solicitation of Comments                          Robert W. Errett,
                                               As noted above, the Shares will be
                                               subject to the existing trading                            Interested persons are invited to                  Deputy Secretary.
                                               surveillances administered by the                       submit written data, views, and                       [FR Doc. 2018–17832 Filed 8–17–18; 8:45 am]
                                               Exchange or FINRA on behalf of the                      arguments concerning the foregoing,
                                                                                                                                                             BILLING CODE 8011–01–P
                                               Exchange, which are designed to detect                  including whether the proposed rule
                                               violations of Exchange rules and federal                change, as modified by Amendment No.
                                               securities laws applicable to trading on                1, is consistent with the Act. Comments
                                                                                                                                                             SECURITIES AND EXCHANGE
                                               the Exchange. The Exchange or FINRA,                    may be submitted by any of the
                                                                                                                                                             COMMISSION
                                               on behalf of the Exchange, will                         following methods:
                                               communicate as needed regarding                         Electronic Comments
                                               trading in the Shares and LEAPS with                                                                          [Release No. 34–83841; File No. SR–ISE–
                                               other market and other entities that are                  • Use the Commission’s internet                     2018–72]
                                               members of ISG, and the Exchange or                     comment form (http://www.sec.gov/
                                                                                                       rules/sro.shtml); or                                  Self-Regulatory Organizations; Nasdaq
                                               FINRA, on behalf of the Exchange, may
                                               obtain trading information in the Shares                  • Send an email to rule-comments@                   ISE, LLC; Notice of Filing and
                                               and LEAPS from such markets and other                   sec.gov. Please include File Number SR–               Immediate Effectiveness of Proposed
                                               entities. In addition, the Exchange may                 NYSEArca–2018–57 on the subject line.                 Rule Change To Amend the Schedule
                                               obtain information regarding trading in                                                                       of Fees at Section II
                                                                                                       Paper Comments
                                               the Shares and LEAPS from markets and
                                               other entities that are members of ISG or                  • Send paper comments in triplicate                August 14, 2018.
                                               with which the Exchange has in place                    to Secretary, Securities and Exchange                    Pursuant to Section 19(b)(1) of the
                                               a comprehensive surveillance sharing                    Commission, 100 F Street NE,                          Securities Exchange Act of 1934
                                               agreement. In addition, as noted above,                 Washington, DC 20549–1090.                            (‘‘Act’’),1 and Rule 19b–4 thereunder,2
                                               investors will have ready access to                     All submissions should refer to File                  notice is hereby given that on July 30,
                                               information regarding the Fund’s                        Number SR–NYSEArca–2018–57. This                      2018, Nasdaq ISE, LLC (‘‘ISE’’ or
                                               holdings, the IIV, and quotation and last               file number should be included on the                 ‘‘Exchange’’) filed with the Securities
                                               sale information for the Shares.                        subject line if email is used. To help the            and Exchange Commission
                                                                                                       Commission process and review your                    (‘‘Commission’’) the proposed rule
                                               B. Self-Regulatory Organization’s                       comments more efficiently, please use
                                               Statement on Burden on Competition                                                                            change as described in Items I and II
                                                                                                       only one method. The Commission will                  below, which Items have been prepared
                                                 The Exchange does not believe that                    post all comments on the Commission’s
                                                                                                                                                             by the Exchange. The Commission is
                                               the proposed rule change will impose                    internet website (http://www.sec.gov/
daltland on DSKBBV9HB2PROD with NOTICES




                                                                                                                                                             publishing this notice to solicit
                                               any burden on competition that is not                   rules/sro.shtml). Copies of the
                                                                                                                                                             comments on the proposed rule change
                                               necessary or appropriate in furtherance                 submission, all subsequent
                                               of the purpose of the Act. The Exchange                 amendments, all written statements                    from interested persons.
                                               notes that the proposed rule change will                with respect to the proposed rule
                                               facilitate the listing and trading of an                change that are filed with the                          27 17 CFR 200.30–3(a)(12).
                                               additional type of Units that can hold                  Commission, and all written                             1 15 U.S.C. 78s(b)(1).
                                               options contracts and that will enhance                 communications relating to the                          2 17 CFR 240.19b–4.




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                                               42194                                       Federal Register / Vol. 83, No. 161 / Monday, August 20, 2018 / Notices

                                               I. Self-Regulatory Organization’s                                           places specified in Item IV below. The                                   flow to the Exchange. Specifically,
                                               Statement of the Terms of Substance of                                      Exchange has prepared summaries, set                                     Priority Customer Complex Orders are
                                               the Proposed Rule Change                                                    forth in sections A, B, and C below, of                                  provided rebates in Select Symbols 4
                                                  The Exchange proposes to amend the                                       the most significant aspects of such                                     and Non-Select Symbols.5 Rebates are
                                               Schedule of Fees at Section II entitled                                     statements.                                                              provided per contract per leg if the
                                               ‘‘Complex Orders Fees and Rebates.’’                                        A. Self-Regulatory Organization’s                                        order trades with non-Priority Customer
                                                  While the changes proposed herein                                        Statement of the Purpose of, and                                         orders in the Complex Order Book or
                                               are effective upon filing, the Exchange                                     Statutory Basis for, the Proposed Rule                                   trades with quotes and orders on the
                                               has designated the amendments become                                        Change                                                                   regular order book. Customer Complex
                                               operative on August 1, 2018.                                                                                                                         Order rebates are paid a rebate based on
                                                  The text of the proposed rule change                                     1. Purpose                                                               a percentage of industry volume.
                                               is available on the Exchange’s website at                                      The purpose of the proposed rule                                      Priority Customer Complex Tiers are
                                               http://ise.cchwallstreet.com/, at the                                       change is to amend the Schedule of Fees                                  based on Total Affiliated Member
                                               principal office of the Exchange, and at                                    at Section II entitled ‘‘Complex Orders                                  Complex Order Volume (excluding
                                               the Commission’s Public Reference                                           Fees and Rebates.’’ Specifically, the                                    Crossing Orders and Responses to
                                               Room.                                                                       Exchange is proposing to lower the                                       Crossing Orders) and are calculated as a
                                                                                                                           qualifying Complex Order Volume in                                       percentage of Customer Total
                                               II. Self-Regulatory Organization’s                                                                                                                   Consolidated Volume. All Complex
                                                                                                                           Tiers 4–7, as explained in more detail
                                               Statement of the Purpose of, and                                                                                                                     Order volume executed on the
                                                                                                                           below, to attract a greater amount of
                                               Statutory Basis for, the Proposed Rule                                                                                                               Exchange, including volume executed
                                                                                                                           Priority Customer 3 Complex Order flow
                                               Change                                                                                                                                               by Affiliated Members, is included in
                                                                                                                           on ISE by paying the same rebates, but
                                                 In its filing with the Commission, the                                    requiring less qualifying volume in                                      the volume calculation, except for
                                               Exchange included statements                                                those tiers.                                                             volume executed as Crossing Orders and
                                               concerning the purpose of and basis for                                        Currently, the Exchange has a pricing                                 Responses to Crossing Orders.6
                                               the proposed rule change and discussed                                      structure in place for Complex Orders                                    Currently, there are nine Priority
                                               any comments it received on the                                             that provides rebates to Priority                                        Customer Complex Order Tiers based on
                                               proposed rule change. The text of these                                     Customer Complex Orders in order to                                      the percentage of industry volume
                                               statements may be examined at the                                           encourage Members to bring that order                                    calculation:



                                               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%–3.250% ...............................................................................................               (0.50)              (0.85)
                                               Tier   9   ..............................    Above 3.250% .............................................................................................................        (0.50)              (0.85)



                                                  At this time the Exchange proposes to                                    So, today a portion of Complex Order                                     Volume between 1.500%–2.000%. So,
                                               amend the Total Affiliated Member                                           volume which qualified for Tier 4                                        today a portion of Complex Order
                                               Complex Order Volume, which                                                 volume would qualify as Tier 5 volume                                    volume which qualified as Tier 6
                                               excludes Crossing Orders and                                                pursuant to this proposal. Today, Tier 6                                 volume would qualify as Tier 7 volume
                                               Responses to Crossing Orders, that are                                      requires Total Affiliated Member                                         pursuant to this proposal. Members may
                                               calculated as a percentage of Customer                                      Complex Order Volume between                                             earn greater rebates in Select and Non-
                                               Total Consolidated Volume in Tiers 4–                                       1.000%–1.600%. The Exchange is                                           Select Symbols simply by sending in
                                               7. Today, Tier 4 requires Total Affiliated                                  amending Tier 6 to require Total                                         certain of the same volume in Tiers 4–
                                               Member Complex Order Volume                                                 Affiliated Member Complex Order                                          7 today, provided it would qualify for
                                               between 0.600% and 0.800%. The                                              Volume between 1.000%–1.500%. So,                                        the higher tier pursuant to this proposal
                                               Exchange is amending Tier 4 to require                                      today a portion of Complex Order                                         which lowers volume in Tier 4–7. No
                                               Total Affiliated Member Complex Order                                       volume which qualified as Tier 5                                         changes are proposed to Tier 1–3 or
                                               Volume between 0.600% and 0.750%.                                           volume would qualify for Tier 6 volume                                   Tiers 8 and 9. No changes are proposed
                                               Today, Tier 5 requires Total Affiliated                                     pursuant to this proposal. Today, Tier 7                                 to any corresponding rebates in either
                                               Member Complex Order Volume                                                 requires Total Affiliated Member                                         Select or Non-Select Symbols.
                                               between 0.800% and 1.000%. The                                              Complex Order Volume between                                             2. Statutory Basis
                                               Exchange is amending Tier 5 to require                                      1.600%–2.000%. The Exchange is
                                               Total Affiliated Member Complex Order                                       amending Tier 7 to require Total                                           The Exchange believes that its
                                               Volume between 0.750% and 1.000%.                                           Affiliated Member Complex Order                                          proposal is consistent with Section 6(b)
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                                                  3 A ‘‘Priority Customer’’ is a person or entity that                       4 ‘‘Select Symbols’’ are options overlying all                            6 An ‘‘Affiliated Member’’ is a Member that shares

                                               is not a broker/dealer in securities, and does not                          symbols listed on the Nasdaq ISE that are in the                         at least 75% common ownership with a particular
                                               place more than 390 orders in listed options per day                        Penny Pilot Program.                                                     Member as reflected on the Member’s Form BD,
                                               on average during a calendar month for its own                                5 ‘‘Non-Select Symbols’’ are options overlying all                     Schedule A. Furthermore, ‘‘Customer Total
                                               beneficial account(s), as defined in Nasdaq ISE Rule                                                                                                 Consolidated Volume’’ means the total national
                                                                                                                           symbols excluding Select Symbols. For Non-Select
                                               100(a)(37A). Unless otherwise noted, when used in                                                                                                    volume cleared at The Options Clearing
                                               this Schedule of Fees the term ‘‘Priority Customer’’                        Symbols, no rebates will be paid for orders in NDX,                      Corporation in the Customer range in equity and
                                               includes ‘‘Retail’’ as defined below.                                       NQX and MNX                                                              ETF options in that month.



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                                                                                Federal Register / Vol. 83, No. 161 / Monday, August 20, 2018 / Notices                                                    42195

                                               of the Act,7 in general, and furthers the                  benefit of all market participants.                      Commission, 100 F Street NE,
                                               objectives of Sections 6(b)(4) and 6(b)(5)                 Priority Customer Complex Order flow                     Washington, DC 20549–1090.
                                               of the Act,8 in particular, in that it                     enhances liquidity on the Exchange for
                                               provides for the equitable allocation of                   the benefit of all market participants by                All submissions should refer to File
                                               reasonable dues, fees, and other charges                   providing more trading opportunities,                    Number SR–ISE–2018–72. This file
                                               among members and issuers and other                        which attracts Market Makers.                            number should be included on the
                                               persons using any facility, and is not                       The Exchange operates in a highly                      subject line if email is used. To help the
                                               designed to permit unfair                                  competitive market in which market                       Commission process and review your
                                               discrimination between customers,                          participants can readily direct their                    comments more efficiently, please use
                                               issuers, brokers, or dealers.                              order flow to competing venues. In such                  only one method. The Commission will
                                                  The Exchange believes that the                          an environment, the Exchange must                        post all comments on the Commission’s
                                               proposed changes to the Priority                           continually review, and consider                         internet website (http://www.sec.gov/
                                               Customer Complex Order Tiers are                           adjusting, its fees and rebates to remain                rules/sro.shtml). Copies of the
                                               reasonable as these changes are                            competitive with other exchanges. For                    submission, all subsequent
                                               designed to incentivize Members to                         the reasons described above, the                         amendments, all written statements
                                               trade Complex Orders, and, in particular                   Exchange believes that the proposed fee                  with respect to the proposed rule
                                               Priority Customer Complex Orders, on                       changes reflect this competitive                         change that are filed with the
                                               the Exchange. The Exchange’s proposal,                     environment.                                             Commission, and all written
                                               which lowers the qualifying Total                                                                                   communications relating to the
                                               Affiliated Member Complex Order                            C. Self-Regulatory Organization’s
                                                                                                          Statement on Comments on the                             proposed rule change between the
                                               Volume in Tiers 4–7, is intended to
                                                                                                          Proposed Rule Change Received From                       Commission and any person, other than
                                               encourage Members to submit the same
                                               or a greater amount of Priority Customer                   Members, Participants, or Others                         those that may be withheld from the
                                               Complex Order flow to obtain a higher                                                                               public in accordance with the
                                                                                                            No written comments were either
                                               rebate.                                                                                                             provisions of 5 U.S.C. 552, will be
                                                                                                          solicited or received.
                                                  In addition, the Exchange believes                                                                               available for website viewing and
                                               that the proposed changes are equitable                    III. Date of Effectiveness of the                        printing in the Commission’s Public
                                               and not unfairly discriminatory as these                   Proposed Rule Change and Timing for                      Reference Room, 100 F Street NE,
                                               changes are designed to encourage                          Commission Action                                        Washington, DC 20549, on official
                                               Members to transact more Complex                              The foregoing rule change has become                  business days between the hours of
                                               Order flow, and in particular, Priority                    effective pursuant to Section                            10:00 a.m. and 3:00 p.m. Copies of the
                                               Customer Complex Orders, on ISE. The                       19(b)(3)(A)(ii) of the Act 9 and Rule 19b–               filing also will be available for
                                               Exchange does not believe that it is                       4(f)(2) 10 thereunder. At any time within                inspection and copying at the principal
                                               unfairly discriminatory to provide                         60 days of the filing of the proposed rule               office of the Exchange. All comments
                                               rebates only to Priority Customer                          change, the Commission summarily may                     received will be posted without change.
                                               Complex Orders as this type of order                       temporarily suspend such rule change if                  Persons submitting comments are
                                               flow enhances liquidity on the                             it appears to the Commission that such                   cautioned that we do not redact or edit
                                               Exchange for the benefit of all market                     action is: (i) Necessary or appropriate in               personal identifying information from
                                               participants by providing more trading                     the public interest; (ii) for the protection             comment submissions. You should
                                               opportunities, which attracts Market                       of investors; or (iii) otherwise in                      submit only information that you wish
                                               Makers. The Exchange believes that the                     furtherance of the purposes of the Act.                  to make available publicly. All
                                               proposed changes to the Priority                           If the Commission takes such action, the                 submissions should refer to File
                                               Customer Complex Tiers will benefit all                    Commission shall institute proceedings                   Number SR–ISE–2018–72 and should be
                                               market participants that trade on ISE by                   to determine whether the proposed rule
                                               increasing their opportunities to trade                                                                             submitted on or before September 10,
                                                                                                          should be approved or disapproved.                       2018.
                                               and earn rebates.
                                                                                                          IV. Solicitation of Comments                               For the Commission, by the Division of
                                               B. Self-Regulatory Organization’s
                                                                                                            Interested persons are invited to                      Trading and Markets, pursuant to delegated
                                               Statement on Burden on Competition
                                                                                                          submit written data, views, and                          authority.11
                                                 The Exchange does not believe that                       arguments concerning the foregoing,                      Robert W. Errett,
                                               the proposed rule change will impose                       including whether the proposed rule                      Deputy Secretary.
                                               any burden on competition not                              change is consistent with the Act.                       [FR Doc. 2018–17828 Filed 8–17–18; 8:45 am]
                                               necessary or appropriate in furtherance                    Comments may be submitted by any of
                                               of the purposes of the Act. The                            the following methods:
                                                                                                                                                                   BILLING CODE 8011–01–P

                                               Exchange believes that the proposed
                                               changes will enhance both inter-market                     Electronic Comments
                                               and intra-market competition by                              • Use the Commission’s internet
                                               increasing opportunities for Members to                    comment form (http://www.sec.gov/
                                               obtain rebates by transacting Priority                     rules/sro.shtml); or
                                               Customer Complex Orders. The                                 • Send an email to rule-comments@
                                               Exchange believes that the proposed                        sec.gov. Please include File Number SR–
                                               fees and rebates remain competitive                        ISE–2018–72 on the subject line.
daltland on DSKBBV9HB2PROD with NOTICES




                                               with those on other options markets,
                                               and will continue to attract order flow                    Paper Comments
                                               to the Exchange, thereby encouraging                         • Send paper comments in triplicate
                                               additional volume and liquidity to the                     to Secretary, Securities and Exchange
                                                 7 15   U.S.C. 78f(b).                                      9 15   U.S.C. 78s(b)(3)(A)(ii).
                                                 8 15   U.S.C. 78f(b)(4) and (5).                           10 17   CFR 240.19b–4(f)(2).                             11 17   CFR 200.30–3(a)(12).



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Document Created: 2018-08-18 01:28:24
Document Modified: 2018-08-18 01:28:24
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation83 FR 42193 

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