[Federal Register Volume 82, Number 238 (Wednesday, December 13, 2017)]
[Notices]
[Pages 58670-58671]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-26820]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-82229; File No. SR-ISE-2017-95]
Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Clarify the
Application of the Crossing Fee Cap
December 7, 2017.
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 November 28, 2017, 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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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the Exchange's Schedule of Fees to
clarify the application of the Crossing Fee Cap.
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 provide greater
clarity as to the manner in which the Exchange applies the Crossing Fee
Cap.
By way of background, Crossing Orders are contracts that are
submitted as part of a Facilitation, Solicitation, PIM, Block or QCC
Order. Crossing Order fees are capped at $90,000 per month per member
on all Firm Proprietary and Non-Nasdaq ISE Market Maker transactions
that are part of the originating or contra side of a Crossing Order.\3\
The following fees are not included in the calculation of the monthly
Crossing Fee Cap: (1) Fees for Responses to Crossing Orders; (2)
surcharge fees for licensed products and the fees for index options as
set forth in Section I; and (3) service fee.\4\ The manner in which the
Exchange calculates the Crossing Fee Cap is not changing.
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\3\ Members that elect prior to the start of the month to pay
$65,000 per month will have these crossing fees capped at that level
instead. All eligible volume from affiliated Members is aggregated
for purposes of the Crossing Fee Cap, provided there is at least 75%
common ownership between the Members as reflected on each Member's
Form BD, Schedule A.
\4\ A service fee of $0.00 per side applies to all order types
that are eligible for the fee cap. The service fee does not apply
once a Member reaches the fee cap level and does apply to every
contract side above the fee cap. A Member who does not reach the
monthly fee cap will not be charged the service fee. Once the fee
cap is reached, the service fee applies to eligible Firm Proprietary
and Non-Nasdaq ISE market Maker orders in all Nasdaq ISE products.
The service fee is not calculated in reaching the cap.
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The Exchange proposes to make clear how it attributes eligible
volume for purposes of the Crossing Fee Cap. The Exchange proposes to
add the following language to the rule text, ``For purposes of the
Crossing Fee Cap the Exchange will attribute eligible volume to the ISE
Member on whose behalf the Crossing Order was executed.'' Only ISE
Members are subject to the Crossing Fee Cap. This is the manner in
which the Exchange attributes eligible volume for purposes of the
Crossing Fee Cap today. To provide greater transparency to the Schedule
of Fees, the Exchange proposes to include this language in the rule
text. While the Exchange is not aware of any confusion with respect to
this fee with its Members, the Exchange believes this specificity will
avoid any confusion.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\5\ in general, and furthers the objectives of Sections
6(b)(4) and 6(b)(5) of the Act,\6\ 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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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange's proposal to add the clarifying language regarding
the Crossing Fee Cap to the Schedule of Fees is reasonable because the
proposed rule text will bring greater clarity to the manner in which
the Exchange attributes eligible volume for purposes of the Crossing
Fee Cap today and applies the Crossing Fee Cap. The calculation and the
application of the Crossing Fee Cap are not changing with this
proposal. This rule text is intended to provide additional clarity to
the current rule to describe who benefits from the volume for purposes
of the application of the cap.
The Exchange's proposal to add the clarifying language regarding
the Crossing Fee Cap to the Schedule of Fees is equitable and not
unfairly discriminatory because the Exchange
[[Page 58671]]
will continue to calculate and apply the Crossing Fee Cap in a uniform
manner to all ISE Members that are eligible for this cap.
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 proposal is intended to
provide greater transparency to the Schedule of Fees and does not amend
the current manner in which the Exchange calculates or applies the
Crossing Fee Cap. The Exchange's proposal to add the clarifying
language regarding the Crossing Fee Cap to the Schedule of Fees does
not impose an undue burden on competition because the Exchange will
continue to calculate and apply the Crossing Fee Cap in a uniform
manner to all ISE Members that are eligible for this cap.
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,\7\ and Rule 19b-4(f)(2) \8\ 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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\7\ 15 U.S.C. 78s(b)(3)(A)(ii).
\8\ 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-2017-95 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-2017-95. 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-2017-95 and should be submitted on
or before January 3, 2018.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-26820 Filed 12-12-17; 8:45 am]
BILLING CODE 8011-01-P