[Federal Register Volume 78, Number 246 (Monday, December 23, 2013)]
[Notices]
[Pages 77545-77547]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-30439]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71087; File No. SR-Topaz-2013-17]


Self-Regulatory Organizations; Topaz Exchange LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Related to 
Market Data Offerings

December 17, 2013.
    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 December 5, 2013, Topaz Exchange LLC (d/b/a ISE Gemini) (the 
``Exchange'' or ``Topaz'') 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. 
Topaz has designated the proposed rule change as constituting a ``non-
controversial'' rule change under paragraph (f)(6) of Rule 19b-4 under 
the Act,\3\ which renders the proposal effective upon receipt of this 
filing by the Commission. 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.
    \3\ 17 CFR 240.19b-4(f)(6).

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[[Page 77546]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Topaz is proposing is proposing [sic] to establish certain market 
data offerings. The proposed rule change is available on the Exchange's 
Internet Web site at http://www.ise.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 self-regulatory organization 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 this proposed rule change is to establish three 
market data offerings: the Topaz order feed (``Order Feed''), the Topaz 
top quote feed (``Top Quote Feed''), and the Topaz depth of market raw 
data feed (``Depth Feed'').
    The Order Feed provides real-time data on every order that rests on 
the Topaz order book. The Top Quote Feed provides real-time aggregated 
volume of all quotes and orders at the top price level on the Exchange, 
i.e., the Best Bid or Offer (``BBO''). Finally, the Depth Feed provides 
real-time aggregated volume of all quotes and orders available at each 
of the top five price levels on the Exchange. Each of these market data 
feeds is described in greater detail below. The feeds provide valuable 
information that can help subscribers make informed investment 
decisions, and operate in the same manner as feeds offered by the 
International Securities Exchange, LLC (``ISE''). Each of these feeds 
is available to members and non-members, and to both professional and 
non-professional subscribers. The Exchange will submit a separate 
proposal to establish fees for these market data offerings, which will 
be provided to market participants for free until such fees are 
adopted.
Order Feed
    The Order Feed provides real-time updates to subscribers every time 
a new limit order that is not immediately executable at the BBO is 
placed on the Topaz order book. The Order Feed also announces the 
commencement of auctions including Flash, Facilitation, Solicitation, 
Block Order and Price Improvement Mechanisms, as well as Directed 
Orders, but does not include Immediate or Cancel (``IOC'') or Fill or 
Kill (``FOK'') orders, quotes, or any non-displayed interest. The 
information included on the Order Feed includes auction type, order 
side (i.e., buy/sell), order price, order size, and a market 
participant (e.g., priority customer) indicator, as well as details for 
each instrument series, including the symbols (series and underlying 
security), put or call indicator, the expiration date, and the strike 
price of the series. While the Options Price Reporting Authority 
(``OPRA'') feed, as well as the Top Quote and Depth Feeds each provide 
aggregated order and quote information, the Order Feed provides each 
individual limit order, not including quote traffic, resulting in lower 
bandwidth usage and less data for subscribers to process.
Top Quote & Depth Feeds
    The Top Quote and Depth Feeds are each real-time market data feeds 
that aggregate non-marketable, displayed quotes and orders on the 
Exchange on both the bid and offer side of the market. The Top Quote 
Feed provides aggregate quotes and orders at the top price level on the 
Exchange, and provides subscribers with a consolidated view of tradable 
prices at the BBO or ``top of book.'' The Depth Feed, on the other 
hand, provides aggregate quotes and orders at the top five price levels 
on the Exchange, and provides subscribers with a consolidated view of 
tradable prices beyond the BBO, showing additional liquidity and 
enhancing transparency for Topaz traded options. The data provided for 
each instrument includes the symbols (series and underlying security), 
put or call indicator, expiration date, the strike price of the series, 
and trading status. In addition, subscribers are provided with total 
quantity, customer quantity (if present), price, and side (i.e., bid/
ask). This information is provided for the top price level on the Top 
Quote Feed, and for each of the five indicated price levels on the 
Depth Feed.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Securities Exchange Act of 1934 
(the ``Act''),\4\ in general and with Section 6(b)(5) of the Act,\5\ in 
particular in that it is designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in regulating, clearing, settling, processing 
information with respect to, and facilitating transactions in 
securities, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system, and, in general, to 
protect investors and the public interest.
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    \4\ 15 U.S.C. 78f.
    \5\ 15 U.S.C. 78f(b)(5).
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    In adopting Regulation NMS, the Commission granted self-regulatory 
organizations and broker-dealers increased authority and flexibility to 
offer new and unique market data to the public. It was believed that 
this authority would expand the amount of data available to consumers, 
and also spur innovation and competition for the provision of market 
data. The Exchange believes that this proposal is in keeping with those 
principles by promoting increased transparency through the 
dissemination of more useful proprietary data and also by clarifying 
its availability to market participants.
    Additionally, the Exchange is making a voluntary decision to make 
this data available as it is not required to furnish this data under 
the Act. The Exchange chooses to make the data available as proposed in 
order to improve market quality, to attract order flow, and to increase 
transparency. The Exchange notes that the data provided on each of 
these feeds is the same as data provided by the ISE with respect to 
options traded on that exchange. The Exchange believes that is in the 
public interest to make similar information available with respect to 
options traded on Topaz.
    The Order, Top Quote, and Depth Feeds are each designed to promote 
just and equitable principles of trade by providing all subscribers 
with data that should enable them to make informed decisions on trading 
in Topaz options by using the data to assess current market conditions 
that directly affect such decisions. The market data provided by each 
of these feeds removes impediments to, and is designed to further 
perfect, the mechanisms of a free and open market and a national market 
system by making the Topaz market

[[Page 77547]]

more transparent and accessible to market participants making routing 
decisions concerning their options orders.
    The market data products are also designed to protect investors and 
the public interest by providing data to subscribers that is already 
currently available on other exchanges, and will enable Topaz to 
compete with such other exchanges, thereby offering market participants 
with additional data in order to seek the market center with the best 
price and the most liquidity on which to execute their transactions, 
all to the benefit of investors and the public interest, and to the 
marketplace as a whole.

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 that is not necessary or appropriate 
in furtherance of the purposes of the Act. On the contrary, the 
Exchange believes that the proposed market data products will enhance 
competition in the U.S. options markets by providing similar data to 
that which is currently provided on other options exchanges. The 
Exchange believes that each of these market data feeds will help 
attract new users and new order flow to the Exchange, thereby improving 
the Exchange's ability to compete in the market for options order flow 
and executions.

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

    The Exchange has not solicited, and does not intend to solicit, 
comments on this proposed rule change. The Exchange has not received 
any unsolicited written comments from members or other interested 
parties.

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

    Because the foregoing proposed rule change does not: (i) 
significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \6\ and Rule 19b-
4(f)(6) thereunder.\7\
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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and 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 requirement.
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is 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 to 
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic 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-Topaz-2013-17 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-Topaz-2013-17. 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 Web site (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 Web site 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; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-Topaz-2013-17 and should be 
submitted on or before January 13, 2014.
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    \8\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-30439 Filed 12-20-13; 8:45 am]
BILLING CODE 8011-01-P