[Federal Register Volume 86, Number 142 (Wednesday, July 28, 2021)]
[Notices]
[Pages 40671-40675]
[FR Doc No: 2021-15994]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-92470; File No. SR-BX-2021-031]

Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Options 2
at Section 4, Obligations of Market Makers and Lead Market Makers and
Section 5, Market Maker Quotations

July 22, 2021.
    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 19, 2021, Nasdaq BX, Inc. (``BX'' 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 Options 2 at Section 4, Obligations
of Market Makers and Lead Market Makers, and Section 5, Market Maker
Quotations. The Exchange also proposes a technical amendment to Options
1, Section 1, Definitions.
    The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/bx/rules, 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 Exchange proposes to amend BX Options 2 at Section 4,
Obligations of Market Makers and Lead Market Makers, and Section 5,
Market Maker Quotations. Currently, the Exchange requires Market Makers
\3\ and Lead Market Makers \4\ to enter bids and offers for the options
to which they are registered, except in an assigned options series
listed intra-day on the Exchange.\5\ Quotations must meet the legal
quote width requirements specified in Options 2, Section 4(f)(4) and
Options 2, Section 5(d)(2).\6\ On a daily basis, a Market Maker must
make markets consistent with the applicable quoting requirements.
Market Makers associated with the same Options Participant \7\ are
collectively required to provide two-sided quotations in 60% of the
cumulative number of seconds, or such higher percentage as BX may
announce in advance, for which that Options Participant's assigned
options series are open for trading.\8\ Notwithstanding the foregoing,
a Market Maker is not required to make two-sided markets pursuant to
Options 2, Section 5(d)(1) in any Quarterly Option Series, any adjusted
option series,\9\ and any option series with an expiration of nine
months or greater.\10\ Lead Market Makers associated with the same
Options Participant, are collectively required to provide two-sided
quotations in 90% of the cumulative number of seconds, or such higher
percentage as BX may announce in advance, for which that Option
Participant's assigned options series are open for trading. Lead Market
Makers are required to make two-sided markets pursuant to Options 2,
Section 5 in any Quarterly Option Series, any Adjusted Option Series,
and any option series with an expiration of nine months or greater.\11\
Finally, a Directed Market Maker is subject to the requirements within
Options 2, Section 10(a)(3)(A).\12\
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    \3\ The term ``BX Options Market Maker'' or ``Options Market
Maker'' means an Options Participant registered with the Exchange
for the purpose of making markets in options contracts traded on the
Exchange and that is vested with the rights and responsibilities
specified in Options 2 of these Rules. See Options 1, Section
1(a)(10).
    \4\ Approved BX Options Market Makers may become Lead Market
Makers. Only one Lead Market Maker may be allocated to an options
class. See Options 2, Section 3(A).
    \5\ Options 2, Section 4(j) and Options 2, Section 5(d)(1).
    \6\ Options 2, Section 4(f)(4) and Options 2, Section 5(d)(2)
describe the required bid/ask differentials for Lead Market Makers
and Market Makers, respectively.
    \7\ The term ``Options Participant'' or ``Participant'' mean a
firm, or organization that is registered with the Exchange pursuant
to Options 2A of these Rules for purposes of participating in
options trading on BX Options as a ``BX Options Order Entry Firm''
or ``BX Options Market Maker.'' See Options 1, Section 1(a)(40).
    \8\ Options 2, Section 5(d)(1)(A).
    \9\ An adjusted option series is defined as an option series
wherein one option contract in the series represents the delivery of
other than 100 shares of underlying stock or Exchange-Traded Fund
Shares (``Adjusted Options Series''). See Options 2, Section
4(j)(1)(a) and Options 2, Section 5(d)(1)(A)(i).
    \10\ Options 2, Section 4(j)(1) and Options 2, Section
5(d)(1)(A).
    \11\ Options 2, Section 4(j)(1).
    \12\ Directed Market Makers, associated with the same Options
Participant, are collectively required to provide two-sided
quotations in 90% of the cumulative number of seconds, or such
higher percentage as BX may announce in advance, for which that
Options Participant's assigned options series are open for trading.
An Options Participant shall be considered directed in all assigned
options once the Options Participant receives a Directed Order in
any option in which they are assigned and shall be considered a
Directed Market Maker until such time as an Options Participant
notifies the Exchange that they are no longer directed.
Notwithstanding the foregoing, an Options Participant shall not be
required to make two-sided markets in any Quarterly Option Series,
any Adjusted Option Series, and any option series with an expiration
of nine months or greater. Notwithstanding the obligations specified
herein, a Directed Market Maker may still receive a participation
entitlement in such series if it elects to quote in any Quarterly
Option Series, any Adjusted Option Series, and any option series
with an expiration of nine months or greater series and otherwise
satisfies the requirements of Options 3, Section 10.
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    An Options Participant is required to meet each market making
obligation separately.\13\ Currently, Options 2, Section 5(d)(1)
states, ``A Market Maker who is also the Lead Market Maker, pursuant to
Options 2, Section 4, will be held to the Lead Market Maker obligations
in options series in which the Lead Market Maker is assigned and will
be held to Market Maker obligations in all other options series where
assigned. A Market Maker who receives a Directed Order, as described in
Options 3, Section 10, shall be held to the standard of a Directed
Market Maker as described in Options 2, Section 10.'' Also, Options 2,
Section 4(j), applicable to Lead Market Makers, provides, ``A Market
Maker who is also the Lead Market Maker, pursuant to Options 2, Section
4, will be held to the Lead Market Maker obligations in options series
in which the Lead Market Maker is assigned and will be held to Market
Maker obligations in all other options series where assigned pursuant
to Options 2, Section 5(d).''
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    \13\ See Options 2, Section 5(d)(1). Today, the Exchange
aggregates all quotes submitted through the Specialized Quote Feed
interface from the Participant, regardless of whether the quote was
submitted by the Participant in its capacity as Lead Market Maker or
Market Maker.
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    Today, the Exchange calculates whether a Participant that is
assigned in an options series as both a Lead Market Maker and a Market
Maker has met its quoting obligations as Lead Market Maker and Market
Maker, respectively, by aggregating all quotes submitted through the
Specialized Quote Feed \14\ interface from the Participant, whether the
quote was submitted by the Participant in its capacity as Lead Market
Maker or Market Maker.
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    \14\ ``Specialized Quote Feed'' or ``SQF'' is an interface that
allows Market Makers to connect, send, and receive messages related
to quotes, Immediate-or-Cancel Orders, and auction responses into
and from the Exchange. Features include the following: (1) Options
symbol directory messages (e.g., underlying instruments); (2) system
event messages (e.g., start of trading hours messages and start of
opening); (3) trading action messages (e.g., halts and resumes); (4)
execution messages; (5) quote messages; (6) Immediate-or-Cancel
Order messages; (7) risk protection triggers and purge
notifications; (8) opening imbalance messages; (9) auction
notifications; and (10) auction responses. The SQF Purge Interface
only receives and notifies of purge requests from the Market Maker.
Market Makers may only enter interest into SQF in their assigned
options series. See Options 3, Section 7(e)(1)(B).
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    The Exchange proposes to amend its calculation to only consider
quotes submitted through the Specialized Quote Feed interface utilizing
badges \15\ and options series \16\ assigned to a Lead Market Maker
when calculating whether a Participant acting as a Lead Market Maker
has satisfied the requirements to provide two-sided quotations in 90%
of the cumulative number of seconds, or such higher percentage as BX
may announce for which that Participant's assigned options series are
open for trading. Similarly, the Exchange proposes to only consider
quotes submitted through the Specialized Quote Feed interface utilizing
badges and options series assigned to a Market Maker when calculating
whether a Participant acting as a Market Maker has satisfied the
requirements to provide two-sided quotations in 60% of the cumulative
number of seconds, or such higher percentage as BX may announce for
which that Participant's assigned options series are open for trading.
With this proposed change, an Options Participant that is a Market
Maker in an options series where the Options Participant is also
assigned as the Lead Market Maker, pursuant to Options 2, Section 4, in
an options series will be

held to both the Lead Market Maker and Market Maker obligations,
pursuant to Options 2, Section 5(d), separately, in that options
series. The Exchange will consider whether an Options Participant,
acting as both Lead Market Maker and Market Maker in an assigned
options series, has complied with each requirement by only considering
quotes in the respective badges.
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    \15\ The term ``badge'' means an account number, which may
contain letters and/or numbers, assigned to BX Market Makers. A BX
Market Maker account may be associated with multiple badges. See
Options 1, Section 1(a)(6).
    \16\ BX currently utilizes a badge with an associated options
series to designate a Lead Market Maker assigned in an options
series and a badge with an associated options series to designate a
Market Maker assigned in an option series.
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    By way of example,
    Current Quoting obligation methodology:
    Lead Market Maker firm 123 is assigned five badges: 123A, 123B,
123C, 123D and 123E.
    Badge 123A is designated the Lead Market Maker badge and badge
123B-E are designated as Market Maker badges.
    Today, all quoting activity from all 5 badges is aggregated in
determining if Firm 123 complied with the requirement to provide two-
sided quotations in 90% of the cumulative number of seconds for which
that Participant's assigned options series are open for trading. The
higher of the two obligations is required today.
    Proposed Quoting obligation methodology:
    Lead Market Maker firm 123 is assigned five badges: 123A, 123B,
123C, 123D and 123E.
    Badge 123A is designated the Lead Market Maker badge and badge
123B-E are designated as Market Maker badges.
    As proposed only quoting activity from badge 123A (and excluding
badges 123B-E) would be counted toward the requirement to provide two-
sided quotations in 90% of the cumulative number of seconds for which
that Participant's assigned options series are open for trading.
    All other badges (123B-E), excluding badge 123A, would be counted
toward the requirement to provide two-sided quotations in 60% of the
cumulative number of seconds for which that Participant's assigned
options series are open for trading.
    An Options Participant may have only one Lead Market Maker badge
per option series.
    The below example explains how the Exchange aggregates quotes from
Lead Market Makers, in their assigned options series, to determine
compliance with quoting requirements, which will not be changing
pursuant to this proposal. The same calculation applies to quotes from
Market Makers in their assigned options series.
    Under the proposal, and as is the case today, by way of example,
assume Lead Market Maker Firm ABC is assigned in five symbols across 2
different badges:
    Badge 123A and B is assigned in symbols QQQ and SPY, respectively.
    Badge 124A, B and C is assigned in symbols IBM, GM, and MSFT,
respectively.
    Quotes submitted through the Specialized Quote Feed interface from
the Firm ABC's Lead Market Maker badges from all 5 symbols will be
counted in determining compliance with Firm ABC's requirement to
provide two-sided quotations in 90% of the cumulative number of seconds
for which Firm ABC's assigned options series are open for trading.
    If Firm ABC Lead Market Maker badge 123A quotes symbol QQQ at 95%
and badge 123B quotes symbol SPY at 90% and Firm ABC Lead Market Maker
badge 124A quotes IBM at 85%, badge 124B quotes GM at 95%, and badge
124C quotes MSFT at 90% then Firm ABC will have met its requirement to
provide two-sided quotations in 90% of the cumulative number of seconds
for which Firm ABC's assigned options series are open for trading
because the percentage across the 5 symbols is 91%.
Technical Amendments
    The Exchange proposes a technical amendment to Options 1, Section
1, Definitions. Specifically, the Exchange proposes to amend Options 1,
Section 1(a)(10) which contains the term ``BX Options Market Maker'' or
``Options Market Maker.'' The Exchange proposes to amend the term
``mean'' to ``means.''
    Also, the Exchange proposes to amend Options 2, Section 4(j) to
correct an inaccurate citation to Options 2, Section 4 subsection
(f)(4)-(6). Subsections (f)(5) and (6) do not exist. The Exchange
proposes to amend the citation to Options 2, Section 4 subsection
(f)(4) which contains intra-day bid/ask differentials.
Implementation
    The Exchange proposes to implement this rule change on August 2,
2021. The Exchange has issued an Options Regulatory Alert notifying
Options Participants of this change.\17\
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    \17\ See Options Regulatory Alert 2021-36.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\18\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\19\ in particular, in that it is designed to
promote just and equitable principles of trade and to protect investors
and the public interest by requiring Lead Market Makers and Market
Makers to separately meet quoting requirements as both a Lead Market
Maker and Market Maker respectively, when the Options Participant is
assigned in both roles in an options series.
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    \18\ 15 U.S.C. 78f(b).
    \19\ 15 U.S.C. 78f(b)(5).
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    The Exchange's proposal to separately calculate Market Maker and
Lead Market Maker quoting obligations where the Participant is assigned
as both Lead Market Maker and Market Maker in an options series is
consistent with the Act. Specifically, the Exchange's proposal would
only consider quotes submitted through the Specialized Quote Feed
interface utilizing badges and options series assigned to a Lead Market
Maker when calculating whether a Participant acting as a Lead Market
Maker has satisfied the requirements to provide two-sided quotations in
90% of the cumulative number of seconds, or such higher percentage as
BX may announce for which that Participant's assigned options series
are open for trading. Similarly, the Exchange's proposal would only
consider quotes submitted through the Specialized Quote Feed interface
utilizing badges and option series assigned to a Market Maker when
calculating whether a Participant acting as a Market Maker has
satisfied the requirements to provide two-sided quotations in 60% of
the cumulative number of seconds, or such higher percentage as BX may
announce for which that Participant's assigned options series are open
for trading.
    The proposed change for calculating the Lead Market Maker
requirement separate from the Market Maker requirement, where a
Participant is assigned in both roles in an options series, would
ensure that the Participant quotes the requisite number of seconds in
an assigned options series, when acting as both Lead Market Maker and
Market Maker. This would ensure that an Options Participant adds the
requisite amount of liquidity in that assigned options series in
exchange for certain benefits offered by the Exchange to the Options
Participant, such as enhanced Lead Market Maker allocation \20\ and
favorable pricing,\21\ in addition to the Options Participant
fulfilling other market making obligations specified in Options 2,
Section 4(a) and (b).\22\
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    \20\ See Options 3, Section 10(a)(1)(C)(1)(b) and Options 3,
Section 10(a)(1)(C)(2)(ii).
    \21\ See Options 7, Pricing Schedule.
    \22\ In registering as a Market Maker, an Options Participant
commits himself to various obligations. Transactions of a Market
Maker in its market making capacity must constitute a course of
dealings reasonably calculated to contribute to the maintenance of a
fair and orderly market, and Market Makers should not make bids or
offers or enter into transactions that are inconsistent with such
course of dealings. Ordinarily, Market Makers are expected to: (1)
During trading hours, a Market Maker must maintain a two-sided
market, pursuant to Section 5(d)(1) of Options 2, in those options
in which the Market Maker is registered to trade, in a manner that
enhances the depth, liquidity and competitiveness of the market. (2)
Engage, to a reasonable degree under the existing circumstances, in
dealings for their own accounts when there exists, or it is
reasonably anticipated that there will exist, a lack of price
continuity, a temporary disparity between the supply of (or demand
for) a particular option contract, or a temporary distortion of the
price relationships between option contracts of the same class. (3)
Compete with other Market Makers in all options in which the Market
Maker is registered to trade. (4) Make markets that will be honored
for the number of contracts entered into BX Options' System in all
options in which the Market Maker is registered to trade. (5) Update
quotations in response to changed market conditions in all options
in which the Market Maker is registered to trade. (6) Maintain
active markets in all options in which the Market Maker is
registered. (7) Honor all orders that the Trading System routes to
away markets pursuant to Options 5 of these Rules. Options Market
Makers should not effect purchases or sales on BX Options except in
a reasonable and orderly manner. See Options 2, Section 4(a) and
(b).

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Technical Amendments
    The Exchange's proposal to amend Options 1, Section 1(a)(10), which
contains the term ``BX Options Market Maker'' or ``Options Market
Maker,'' to amend the term ``mean'' to ``means'' is a non-substantive
amendment. Also, the Exchange's proposal to amend Options 2, Section
4(j) to correct an inaccurate citation is a non-substantive amendment.
Correcting these technical amendments will bring greater clarity to
BX's Rules.

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. Rather, the proposal would
ensure that Options Participants that are assigned in an options series
as both the Lead Market Maker and Market Maker, respectively, are
meeting the same quoting obligations as other Options Participants who
are assigned solely as either the Lead Market Maker or Market Maker in
an option series. Also, this proposal would ensure that an Options
Participant quotes the requisite number of seconds in an assigned
options series, when acting as both Lead Market Maker and Market Maker,
respectively, thereby adding the requisite amount of liquidity in
exchange for certain benefits provided by the Exchange such as enhanced
Lead Market Maker allocation \23\ and favorable pricing,\24\ in
addition to fulfilling its other market making obligations specified in
Options 2, Section 4(a) and (b).\25\
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    \23\ See note 20 above.
    \24\ See note 21 above.
    \25\ See note 22 above.
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Technical Amendments
    The Exchange's proposal to amend Options 1, Section 1(a)(10), which
contains the term ``BX Options Market Maker'' or ``Options Market
Maker,'' to amend the term ``mean'' to ``means'' is a non-substantive
amendment. Also, the Exchange's proposal to amend Options 2, Section
4(j) to correct an inaccurate citation is a non-substantive amendment.
Amending these rules does not impose an undue burden on competition
because the corrections will bring greater clarity to BX's Rules.

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

    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, it has become effective pursuant to Section
19(b)(3)(A) of the Act \26\ and Rule 19b-4(f)(6) thereunder.\27\
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    \26\ 15 U.S.C. 78s(b)(3)(A).
    \27\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of 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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    A proposed rule change filed under Rule 19b-4(f)(6) \28\ normally
does not become operative for 30 days after the date of filing.
However, pursuant to Rule 19b-4(f)(6)(iii),\29\ the Commission may
designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative upon filing. Waiving the operative delay will
allow the Exchange to amend, without delay, its rules regarding Market
Maker quoting obligations to ensure that member organizations assigned
in an options series as both the Lead Market Maker and Market Maker
would have the same quoting obligations as member organizations who are
assigned solely as either Lead Market Maker or Market Maker in an
option series. In addition, such waiver will permit technical
amendments, which bring greater clarity to BX's rules, to be effective
without undue delay. The Commission believes that waiving the 30-day
operative delay is consistent with the protection of investors and the
public interest and hereby designates the proposed rule change to be
operative upon filing.\30\
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    \28\ 17 CFR 240.19b-4(f)(6).
    \29\ 17 CFR 240.19b-4(f)(6)(iii).
    \30\ 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.

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_ADDRESS>Please include
File Number SR-BX-2021-031 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-BX-2021-031. 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 20549-1090, 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-BX-2021-031 and should be
submitted on or before August 18, 2021.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\31\
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    \31\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-15994 Filed 7-27-21; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 86, Number 49 (Tuesday, March 16, 2021)]
[Notices]
[Pages 14482-14484]
[FR Doc No: 2021-05342]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91295; File No. SR-ISE-2021-03]

Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend the
Exchange's Pricing Schedule at Options 7, Section 3

March 10, 2021.
    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 March 2, 2021, 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 Pricing Schedule at
Options 7, Section 3 (Regular Order Fees and Rebates), as described
further below.
    The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/ise/rules, 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 Exchange's
Pricing Schedule at Options 7, Section 3 (Regular Order Fees and
Rebates) to: (i) Decrease the Priority Customer \3\ taker fee in Select
Symbols,\4\ and (ii) increase the Non-Priority Customer \5\ maker fee
in Select Symbols.
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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 Options 1,
Section 1(a)(37).
    \4\ ``Select Symbols'' are options overlying all symbols listed
on the Nasdaq ISE that are in the Penny Interval Program.
    \5\ ``Non-Priority Customers'' include Market Makers, Non-Nasdaq
ISE Market Makers, Firm Proprietary/Broker Dealers, and Professional
Customers.
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    The Exchange initially filed the proposed pricing changes on March
1, 2021 (SR-ISE-2021-02). On March 2, 2021, the Exchange withdrew that
filing and submitted this filing.
    Today, Priority Customers are charged a taker fee of $0.41 per
contract for regular orders in Select Symbols. The Exchange now
proposes to decrease this fee to $0.37 per contract for Priority
Customers.
    Today, all Non-Priority Customers are charged a maker fee of $0.11
per contract for regular orders in Select Symbols. The Exchange now
proposes to increase this fee to $0.18 per contract for all Non-
Priority Customers.\6\
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    \6\ The Exchange notes that under this proposal, Market Makers
that qualify for Market Maker Plus in Select Symbols will continue
to receive the applicable Market Maker Plus rebates in Select
Symbols set forth in note 5 of Options 7, Section 3, and will not
pay the proposed $0.18 per contract maker fee.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) 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).
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    The Exchange's proposed changes to its Pricing Schedule are
reasonable in several respects. As a threshold matter, the Exchange is
subject to significant competitive forces in the market for options
securities transaction services that constrain its pricing
determinations in that market. The fact that this market is competitive
has long been recognized by the courts. In NetCoalition v. Securities
and Exchange Commission, the D.C. Circuit stated as follows: ``[n]o one
disputes that competition for order flow is `fierce.' . . . As the SEC
explained, `[i]n the U.S. national market system, buyers and sellers of
securities, and the broker-dealers that act as their order-routing
agents, have a wide range of choices of where to route orders for
execution'; [and] `no exchange can afford to take its market share
percentages for granted' because `no exchange possesses a monopoly,
regulatory or otherwise, in the execution of order flow from broker
dealers'. . . .'' \9\
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    \9\ NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010)
(quoting Securities Exchange Act Release No. 59039 (December 2,
2008), 73 FR 74770, 74782-83 (December 9, 2008) (SR-NYSEArca-2006-
21)).
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    The Commission and the courts have repeatedly expressed their
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. In Regulation
NMS, while adopting a series of steps to improve the current market
model, the Commission highlighted the importance of market forces in
determining prices and SRO revenues and, also, recognized that current
regulation of the market system ``has been remarkably successful in
promoting market competition in its broader forms that are most
important to investors and listed companies.'' \10\
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    \10\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
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    Numerous indicia demonstrate the competitive nature of this market.
For example, clear substitutes to the Exchange exist in the market for
options security transaction services. The Exchange is only one of
sixteen options exchanges to which market participants may direct their
order flow. Within this environment, market participants can freely and
often do shift their order flow among the Exchange and competing venues
in response to changes in their respective pricing schedules. As such,
the proposal represents a reasonable attempt by the Exchange to
increase its liquidity and market share relative to its competitors.

    The Exchange believes that the proposed decrease for the Priority
Customer taker fee in Select Symbols is reasonable, equitable, and not
unfairly discriminatory. As discussed above, this fee will decrease
from $0.41 to $0.37 per contract for Priority Customers. The Exchange
seeks to incentivize Priority Customer participation, in particular,
Priority Customer activity to remove liquidity in Select Symbols, with
the proposed change. As amended, Priority Customers will continue to be
charged the lowest taker fee in Select Symbols.\11\ The Exchange
believes that it is equitable and not unfairly discriminatory to charge
Priority Customers a lower taker fee than other market participants as
the Exchange has historically offered lower execution fees to Priority
Customers. Furthermore, Priority Customer order flow enhances liquidity
on the Exchange for the benefit of all market participants by providing
more trading opportunities, which in turn attracts Market Makers and
other market participants who may interact with this order flow.
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    \11\ Today, the Exchange charges all Non-Priority Customers
(except Market Makers) a taker fee of $0.46 per contract in Select
Symbols. Marker Makers are currently charged a taker fee of $0.45
per contract in Select Symbols.
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    The Exchange believes that the proposed increase for the Non-
Priority Customer maker fees in Select Symbols is reasonable,
equitable, and not unfairly discriminatory. As discussed above, this
fee will increase from $0.11 to $0.18 per contract for all Non-Priority
Customers. While the maker fee is increasing for Non-Priority
Customers, the proposed increase is intended to offset the cost of
decreasing the Priority Customer taker fee proposed above. Furthermore,
the Exchange notes that the proposed maker fees remain lower than maker
fees at another options exchange.\12\
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    \12\ See, e.g., Nasdaq PHLX (``Phlx'') Pricing Schedule at
Options 7, Section 4, which assesses Lead Market Makers and Market
Makers an electronic options transaction charge of $0.22 per
contract in Penny Symbols, and Professionals, Broker-Dealers, and
Firms an electronic options transaction charge of $0.48 per contract
in Penny Symbols.
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    The Exchange believes that the proposed maker fees in Select
Symbols is equitable and not fairly discriminatory because they will be
increased uniformly for all Non-Priority Customers. Priority Customers
will continue to be assessed no maker fees in Select Symbols under this
proposal. For the same reasons discussed above for the proposed
Priority Customer taker fees, the Exchange believes that it is
equitable and not unfairly discriminatory to continue offering a lower
rate to Priority Customers compared to other market participants.

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. In terms of intra-market
competition, the Exchange does not believe that its proposal will place
any category of market participant at a competitive disadvantage. The
proposed Select Symbol taker fee will be decreased for Priority
Customers, who will continue to be charged at a lower rate than all
other market participants for removing liquidity on the Exchange. The
proposed Select Symbol maker fee will be increased uniformly for all
Non-Priority Customers, while Priority Customers will continue to be
assessed no fee for adding liquidity on the Exchange. As discussed
above, the Exchange has historically charged lower rates to Priority
Customers compared to other market participants. The Exchange believes
that this incentivizes increased Priority Customer order flow, which
enhances liquidity on the Exchange for the benefit of all market
participants by providing more trading opportunities, which in turn
attracts Market Makers and other market participants who may interact
with this order flow.
    In terms of inter-market competition, the Exchange notes that it
operates in a highly competitive market in which market participants
can readily favor competing venues if they deem fee levels at a
particular venue to be excessive, or rebate opportunities available at
other venues to be more favorable. In such an environment, the Exchange
must continually adjust its fees to remain competitive with other
options exchanges. Because competitors are free to modify their own
fees in response, and because market participants may readily adjust
their order routing practices, the Exchange believes that the degree to
which fee changes in this market may impose any burden on competition
is extremely limited. For example, while the Exchange is increasing the
maker fees for Non-Priority Customers in Select Symbols under this
proposal, the Exchange does not believe this will cause an undue burden
on inter-market competition as the proposed fees remain lower than
similar fees charged by other options exchanges such as Phlx.

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 \13\ and Rule 19b-4(f)(2) \14\ 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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    \13\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \14\ 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_ADDRESS>Please include
File Number SR-ISE-2021-03 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-2021-03. 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-2021-03 and should be
submitted on or before April 6, 2021.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-05342 Filed 3-15-21; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: March 5, 2008 (Volume 73, Number 44)]
[Notices]
[Page 11897-11898]
[DOCID:fr05mr08-45]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket Nos. CP05-45-001; CP06-401-001]

TransColorado Gas Transmission Company, LLC; Notice of
Application

February 27, 2008.
    Take notice that on February 12, 2008 TransColorado Gas
Transmission Company, LLC (TransColorado) P.O. Box 281304, Lakewood,
Colorado 80228-8304, filed an application pursuant to section 7(c) of
the NGA and the Commission's regulations to amend its certificates of
public convenience and necessity issued in Docket Nos. CP05-45-000 (111
FERC ] 62,224) and CP06-401-000 (119 FERC ] 61,069). TransColorado
seeks authority to relocate two previously authorized compressor
stations pending at the Greasewood Compressor Station in Rio Blanco
County, Colorado to a new site approximately six miles west called the
Love Ranch Compressor Station, also in Rio Blanco County. TransColorado
further seeks authority to construct and operate a new interconnect
with Rockies Express Pipeline, LLC. TransColorado states that the
reconfiguration will permit TransColorado better to meet the current
market needs of producers and shippers.
    These filings are available for review at the Commission's
Washington, DC offices or may be viewed on the Commission's Web site at
http://www.ferc.gov/ using the ``e-Library'' link. Enter the docket
number, excluding the last three digits, in the docket number field to
access the document. For assistance, please contact FERC Online Support
at<EMAIL_ADDRESS>or Telephone:<PHONE_NUMBER>; Toll-free: 1-
866-208-3676; or for TTY, contact<PHONE_NUMBER>.
    Any questions regarding these applications should be directed to
Skip George, Manager of Certificates, TransColorado Gas Transmission
Company, LLC, P.O. Box 281304, Lakewood, Colorado 80228-8304, phone
(303) 914-4969.
    Pursuant to section 157.9 of the Commission's rules, 18 CFR 157.9,
within 90 days of this Notice the Commission staff will either:
Complete its environmental assessment (EA) and place it into the
Commission's public record (eLibrary) for this proceeding; or issue a
Notice of Schedule for Environmental Review. If a Notice of Schedule
for Environmental Review is issued, it will indicate, among other
milestones, the anticipated date for the Commission staff's issuance of
the final environmental impact statement (FEIS) or EA for this
proposal. The filing of the EA in the Commission's public record for
this proceeding or the issuance of a Notice of Schedule for
Environmental Review will serve to notify federal and state agencies of
the timing for the completion of all necessary reviews, and the
subsequent need to complete all federal authorizations within 90 days
of the date of issuance of the Commission staff's FEIS or EA.
    There are two ways to become involved in the Commission's review of
this Project. First, any person wishing to obtain legal status by
becoming a party to the proceeding for this project should file with
the Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426, a motion to intervene in accordance with the
requirements of the Commission's Rules of Practice and Procedure (18
CFR 385.214 or 385.211) and the Regulations under the NGA (18 CFR
157.10) by the comment date, below. A person obtaining party status
will be placed on the service list maintained by the Secretary of the
Commission and will receive copies of all documents filed by the
applicant and by all other parties. A party must submit 14 copies of
filings made with the Commission and must mail a copy to the applicant
and to every other party in the proceeding. Only parties to the
proceeding can ask for court review of Commission orders in the
proceeding.
    However, a person does not have to intervene to have comments
considered. The second way to participate is by filing with the
Secretary of the Commission, as soon as possible, an original and two
copies of comments in support of or in opposition to this project and/
or associated pipeline. The Commission will consider these comments in
determining the appropriate action to be taken, but the filing of a
comment alone will not serve to make the filer a party to the
proceeding. The Commission's rules require that persons filing comments
in opposition to the project provide copies of their protests only to
the party or parties directly involved in the protest.
    Persons who wish to comment only on the environmental review of
this project should submit an original and two copies of their comments
to the Secretary of the Commission. Environmental commenters will be
placed on the Commission's environmental mailing list, will receive
copies of the environmental documents, and will be notified of meetings
associated with the Commission's environmental review process.

Environmental commenters will not be required to serve copies of filed
documents on all other parties. However, the non-party commenters will
not receive copies of all documents filed by other parties or issued by
the Commission (except for the mailing of environmental documents
issued by the Commission) and will not have the right to seek court
review of the Commission's final order.
    Protests and interventions may be filed electronically via the
Internet in lieu of paper; see 18 CFR 285.2001(a)(1)(iii) and the
instructions on the Commission's Web site under the ``e-filing'' link.
The Commission strongly encourages electronic filings.
    Comment Date: March 19, 2008.

 Kimberly D. Bose,
 Secretary.
 [FR Doc. E8-4169 Filed 3-4-08; 8:45 am]

BILLING CODE 6717-01-P