[Federal Register Volume 80, Number 179 (Wednesday, September 16, 2015)]
[Notices]
[Pages 55669-55671]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-23210]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-75874; File No. SR-ISE-2015-25]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change To Amend the Schedule of Fees
September 10, 2015.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on August 27, 2015, the International Securities Exchange, LLC
(the ``Exchange'' or the ``ISE'') filed with the Securities and
Exchange Commission the proposed rule change, as described in Items I
and II below, which items have been prepared by the self-regulatory
organization. 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 ISE proposes to amend its Schedule of Fees to extend its
Managed Data Access Service program for the sale of a number of real-
time market data products. The text of the proposed rule change is
available on the Exchange's Web site (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 self-regulatory organization
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
On June 6, 2013 the ISE implemented a temporary Managed Data Access
Service program that established a new pricing and distribution model
for the sale of a number of real-time market data products.\3\ The
Exchange extended this program for an additional six month period on
December 20, 2013,\4\ and then on September 17, 2014 instituted another
temporary program on the same terms for a one year period set to expire
on August 31, 2015.\5\ The Exchange now proposes to extend its current
Managed Data Access Service program for an additional one year period
ending August 31, 2016 so that the Exchange can continue to provide
this alternative delivery option for ISE data feeds.\6\ Managed Data
Access Service is a pricing and administrative option
[[Page 55670]]
whereby the ISE assesses fees to Managed Data Access Distributors,\7\
who redistribute market data to Managed Data Access Recipients.\8\
Managed Data Access Distributors are required to monitor the delivery
of the data retransmitted to their clients, and must agree to reformat,
redisplay and/or alter the data feeds prior to retransmission without
affecting the integrity of the data feeds and without rendering any of
the feeds inaccurate, unfair, uninformative, fictitious, misleading, or
discriminatory.
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\3\ See Securities Exchange Act Release No. 69806 (June 20,
2013), 78 FR 38424 (June 26, 2013) (ISE-2013-39). The Exchange also
offers a similar Managed Data Access Service program for its Implied
Volatility and Greeks Feed. See Securities Exchange Act Release No.
65678 (November 3, 2011), 76 FR 70178 (November 10, 2011) (ISE-2011-
67). This filing does not apply to the Managed Data Access Service
program for the Implied Volatility and Greeks Feed, which is a
permanent program.
\4\ See Securities Exchange Act Release No. 71230 (January 2,
2014), 79 FR 1405 (January 8, 2014) (ISE-2013-74).
\5\ See Securities Exchange Act Release No. 73276 (October 1,
2014), 79 FR 60545 (October 7, 2014) (ISE-2014-41).
\6\ The current Managed Data Access Service program provides an
alternative delivery option for the Real-time Depth of Market Raw
Data Feed (``Depth Feed''), the Order Feed, the Top Quote Feed, and
the Spread Feed.
\7\ A Managed Data Access Distributor redistributes ISE data
feeds and permits access to the information in those data feeds
through a controlled device. A Managed Data Access Distributor can
also redistribute a data feed solution to specific IP addresses,
including an Application Programming Interface (``API'') or similar
automated delivery solutions, with only limited entitlement controls
(e.g., usernames and/or passwords) to a recipient of the
information.
\8\ A Managed Data Access Recipient is a subscriber to the
Managed Data Access Distributor who receives a reformatted data feed
in a controlled device or at a specific IP address. Market Data
Access Recipients may be Professional or Non-Professional users.
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The current fees for the Managed Data Access Service are as
follows:
The Exchange charges a fee to each Managed Data Access Distributor
of $2,500 per month for the Depth Feed, $1,500 for each of the Top
Quote Feed and Spread Feed, and $1,000 per month for the Order Feed.
The Exchange also charges a fee for each IP address at Managed Data
Access Recipients that receive market data redistributed by a Managed
Data Access Distributor, which is $750 per month for the Depth Feed,
$500 per month for each of the Top Quote Feed and Spread Feed, and $350
per month for the Order Feed.\9\ In addition, the Exchange charges a
controlled device fee for each controlled device permitted to access
market data redistributed by a Managed Data Access Distributor to a
Market Data Access Recipient that is a Professional user,\10\ which is
$50 per month for the Depth Feed, $20 per month for the Top Quote Feed,
$25 per month for the Spread Feed, and $10 per month for the Order
Feed.\11\ Finally, the Exchange charges a controlled device fee of $5
per month for each controlled device permitted to access information in
the Depth Feed redistributed by a Managed Data Access Distributor to a
Market Data Access Recipient that is a Non-Professional user.\12\ For
each of the above ISE data feeds, Market Data Access Distributors are
subject to a minimum fee, which is $5,000 per month for the Depth Feed,
$3,000 per month for each of the Top Quote Feed and Spread Feed, and
$2,000 per month for the Order Feed.
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\9\ This fee is charged per IP address, which covers both
primary and back-up IP addresses at a Managed Data Access Recipient.
\10\ A ``Professional user'' is an authorized end-user of the
ISE data feeds that has not qualified as a Non-Professional user.
\11\ A controlled device is any device that a distributor of an
ISE data feed permits to access the information in that data feed.
\12\ There is no controlled device fee for Non-Professional
users of the Top Quote Feed, Spread Feed, or Order Feed. A ``Non-
Professional user'' is an authorized end-user of the ISE data feeds
who is a natural person and who is neither: (a) Registered or
qualified with the Securities and Exchange Commission, the
Commodities Futures Trading Commission, any state securities agency,
any securities exchange or association, or any commodities or
futures contract market or association; (b) engaged as an
``investment advisor'' as that term is defined Section 202(a)(11) of
the Investment Advisers Act of 1940 (whether or not registered or
qualified under that act); nor (c) employed by a bank or other
organization exempt from registration under Federal and/or state
securities laws to perform functions that would require him/her to
be so registered or qualified if he/she were to perform such
functions for an organization not so exempt.
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The Exchange is not proposing to make any changes to the fees
currently charged under the Managed Data Access Service program.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the requirements of the Securities Exchange Act of 1934 (the
``Act''),\13\ and the rules and regulations thereunder that are
applicable to a national securities exchange, including the
requirements of Section 6(b) of the Act.\14\ In particular, the
proposal is consistent with Section 6(b)(5) of the Act,\15\ because 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. The Exchange believes that the proposed program is
consistent with the protection of investors and the public interest as
the Exchange already runs a Managed Data Access Service program, and is
merely proposing to extend this program for an additional one year
period. The Exchange established the Managed Data Access Service as a
temporary program in order to gauge the level of interest in this new
pricing and distribution model, and now wishes to extend this temporary
program so that it may continue to offer an attractive program that
competes with programs offered by other options exchanges.\16\ The
Exchange is constrained in pricing the Managed Data Access Service as
these services are entirely optional, and firms may choose whether or
not to purchase proprietary ISE market data products or to utilize any
specific pricing alternative. Moreover, the program will continue to
provide an opportunity for all distributors and subscribers, both
Professional and Non-Professional, to access the ISE data feeds at a
potentially lower cost.
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\13\ 15 U.S.C. 78f.
\14\ 15 U.S.C. 78f(b).
\15\ 15 U.S.C. 78f(b)(5).
\16\ A number of other exchanges have adopted managed data
access services to distribute their proprietary market data. See
e.g. Securities Exchange Act Release Nos. 63276 (November 8, 2010),
75 FR 69717 (November 15, 2010) (SR-NASDAQ-2010-138); and 69182
(March 19, 2013), 78 FR 18378 (March 26, 2013) (SR-PHLX-2013-28).
ISE also offers managed data access service on a permanent basis for
the ISE Implied Volatility and Greeks Feed. See supra note 3.
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B. Self-Regulatory Organization's Statement on Burden on Competition
In accordance with Section 6(b)(8) of the Act,\17\ 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. To the contrary,
the Exchange believes that the proposed rule change will promote
competition as it extends a program that provides an attractive
alternative delivery model for ISE market data that is similar to
programs in place on other options exchanges. The vigor of competition
for market data is significant and the Exchange believes that this
proposal clearly evidences such competition. ISE proposes to continue
to offer this optional Managed Access Data Service in order to keep
pace with changes in the industry and evolving customer needs.
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\17\ 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
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 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 if consistent with the protection of
[[Page 55671]]
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \18\ and Rule 19b-
4(f)(6) thereunder.\19\
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\18\ 15 U.S.C. 78s(b)(3)(A).
\19\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written
notice of its 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.
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The Exchange has asked the Commission to waive the 30-day operative
delay so that the proposal may become operative immediately upon
filing. The Exchange stated that waiver of the operative delay will
permit the Exchange to continue to provide access to subscribers
interested in the Managed Data Access Service program. The Commission
believes that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest. Therefore, the
Commission hereby waives the operative delay and designates the
proposed rule change operative upon filing.\20\
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\20\ For purposes only of waiving the 30-day operative delay,
the Commission has also 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 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-ISE-2015-25 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-ISE-2015-25. 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 such 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-ISE-2015-25, and should be
submitted on or before October 7, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
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\21\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-23210 Filed 9-15-15; 8:45 am]
BILLING CODE 8011-01-P