[Federal Register: April 14, 2009 (Volume 74, Number 70)]
[Notices]
[Page 17259-17262]
[DOCID:fr14ap09-120]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59723; File No. SR-NSX-2009-02]

Self-Regulatory Organizations; National Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend the Fee and Rebate Schedule Relating to Liquidity Adding Rebates

April 7, 2009.
    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 March 31, 2009, National Stock Exchange, Inc. filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change, as described in Items I, II and III 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

    National Stock Exchange, Inc. (``NSX[supreg]'' or ``Exchange'') is
proposing to (i) amend the Fee and Rebate Schedule (the ``Fee
Schedule'') issued pursuant to Exchange Rule 16.1(c) in order to
increase the displayed order liquidity adding rebate for Tape A and C
securities executed at one dollar or above in the Automatic Execution
Mode of order interaction in the event that certain volume thresholds
are achieved, (ii) provide a rebate for adding liquidity in displayed
orders at one dollar or above in the Order Delivery Mode of order
interaction in the event that certain volume thresholds are achieved
and (iii) establish a new Rule 16.3 to provide that, for purposes of
applying the provisions of the Fee Schedule and Exchange Rule 16, an
ETP Holder may request that the Exchange aggregate its activity with
the activity of its affiliates.
    The text of the proposed rule change is available on the Exchange's
Web site at http://www.nsx.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
    With this rule change, the Exchange is proposing to increase the
liquidity provider rebate for displayed orders (i.e., those orders
other than Zero Display Reserve Orders) \3\ (``Displayed Orders'')
executed in the Automatic Execution Mode of order interaction
(``AutoEx'').\4\ The proposed increased rebate applies only to Tape A
and C securities executed at a price of one dollar and higher in
AutoEx, and only after certain volume thresholds are achieved. In
addition, the Exchange is proposing to establish a liquidity provider
rebate for Displayed Orders executed in the Order Delivery Mode of
order interaction (``Order Delivery'' or ``O/D'').\5\ This rebate
applies only to securities priced one dollar and higher in Order
Delivery, and only after certain volume thresholds are achieved. The
proposed rebate for Displayed Orders in Order Delivery mirrors the
rebate for liquidity adding Zero Display Orders established pursuant to
a rule change submitted by the Exchange for effectiveness on March 2,
2009.\6\ Finally, with this rule change the Exchange is proposing to
adopt a new Rule 16.3 to allow for the aggregation among affiliated ETP
Holders of average daily volumes and other activity.
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    \3\ As specified in Rule 11.11(c)(2)(A).
    \4\ The Exchange's two modes of order interaction are described
in NSX Rule 11.13(b).
    \5\ The Exchange's two modes of order interaction are described
in NSX Rule 11.13(b).
    \6\ See SR-NSX-2009-01.
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Increase in AutoEx Displayed Order Liquidity Adding Rebate for Tapes A
and C

    Prior to effectiveness of the instant rule filing, the AutoEx
rebate for liquidity adding Displayed Orders in securities one dollar
and above was $0.0026 per share in Tapes A and C, and $0.0030 per share
in Tape B. The instant rule filing proposes to increase the rebate for
Tape A and C securities in cases where certain average daily volume
thresholds are achieved. Specifically, ETP Holders who achieve
Liquidity Adding ADV \7\ of less than 25 million will continue to
receive the previously established liquidity adding rebate for executed
Tape A and C Displayed Orders in AutoEx of $0.0026 per share.\8\
However, under the instant rule filing, ETP Holders who achieve a
Liquidity Adding ADV of 25 million and 40 million shares will receive
higher rebates of $0.0027 and $0.0028, respectively, with respect to
their executed liquidity adding displayed AutoEx Tape A and C
securities priced at one dollar and higher.\9\
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    \7\ As used elsewhere in the Fee Schedule, ``Liquidity Adding
ADV'' means, with respect to an ETP Holder, ``the number of shares
such ETP Holder has executed as a liquidity provider on average per
trading day (excluding partial trading days and securities under one
dollar) across all tapes on NSX for the calendar month (or partial
month, as applicable) in which the executions occurred'' (see the
Explanatory Endnotes to the Fee Schedule).
    \8\ Similarly, no change is proposed with respect to the
liquidity adding rebate applicable to Tape B securities in AutoEx.
    \9\ The instant rule filing proposes to establish tiered rebates
for executed liquidity adding Tape A and C Displayed Orders in
AutoEx. The first rebate tier is $0.0026 per share, applicable to
Tape A and C shares executed at one dollar or more in AutoEx which
added liquidity as Displayed Orders, where the ETP Holder's
Liquidity Adding ADV is less than 25 million. The second tier is
$0.0027 per share, applicable to Tape A and C shares executed at one
dollar or more in AutoEx which added liquidity as Displayed Orders,
where the ETP Holder's Liquidity Adding ADV is at least 25 million
and less than 40 million. The third tier is $0.0028 per share,
applicable to Tape A and C shares executed at one dollar or more in
AutoEx which added liquidity as Displayed Orders, where the ETP
Holder's Liquidity Adding ADV is at least 40 million.
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    Like other calculations of ``average daily volume'' in the Fee
Schedule, the measurement period for calculating the proposed rebate is
generally the calendar month. However, in the event a pricing or rebate
program utilizing this definition is implemented, modified or
discontinued on other than month's end, the period of measurement used
to determine ``average daily volume'' with respect to the rebate (as
used in the definition of ``Liquidity Adding ADV'' and elsewhere in the
Fee Schedule) shall be that partial month during which the program's
terms are in effect. This is further explained in the Explanatory
Endnotes to the Fee Schedule.

O/D Liquidity Adding Displayed Order Rebate

    In addition, for securities trading at one dollar or higher in
Order Delivery, this rule change proposes to provide a progressively
higher rebate applicable to shares executed as liquidity providing
Displayed Orders in O/D. ETP Holders who achieve an average daily
volume of shares executed as Displayed Orders in O/D (``Liquidity
Adding ADV (O/D Displayed)'') of 1 million,\10\ 10 million \11\ and 20
million \12\ shares will receive rebates of $0.0008, $0.0010 and
$0.0012, respectively, with respect to such shares (any such rebate
hereinafter referred to as an ``O/D Liquidity Adding Displayed Order
Rebate''). Liquidity Adding ADV (O/D Displayed) means, with respect to
an ETP Holder, ``the number of Displayed Order shares such ETP Holder
has executed as a liquidity provider on average per trading day
(excluding partial trading days and securities under one dollar) across
all tapes in Order Delivery for the calendar month (or partial month,
as applicable) in which the executions occurred'' (see the Explanatory
Endnotes to the Fee Schedule).
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    \10\ The first tier is $0.0008 per share, applicable to shares
executed in O/D which added liquidity as Displayed Orders, where the
number of such shares is greater than or equal to 1 million and less
than 10 million.
    \11\ The second tier is $0.0010 per share, applicable to shares
executed in O/D which added liquidity as Displayed Orders, where the
number of such shares is greater than or equal to 10 million and
less than 20 million.
    \12\ The third tier is $0.0012 per share, applicable to shares
executed in O/D which added liquidity as Displayed Orders, where the
number of such shares is greater than or equal to 20 million.
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    For purposes of clarity, if an ETP Holder fails to achieve
Liquidity Adding ADV (O/D Displayed) of at least 1 million shares in a
given month (or partial month, as applicable), then no O/D Liquidity
Adding Displayed Order Rebate applies. In addition, for purposes of
calculating an ETP Holder's Liquidity Adding ADV (O/D Displayed), only
such ETP Holder's liquidity adding Displayed Orders executed in O/D in
the given time frame are counted. Finally, the O/D Liquidity Adding
Displayed Order Rebate applies only to those shares of an ETP Holder
executed in O/D as liquidity adding Displayed Orders (i.e., the rebate
does not apply to shares of Zero Display Orders that add liquidity in
O/D, nor to shares of liquidity providing Displayed Orders in AutoEx).
These details are set forth in an explanatory endnote to the Fee
Schedule.
    Like other calculations of ``average daily volume'' in the Fee
Schedule, the measurement period for calculating the O/D Liquidity
Adding Displayed Order Rebate is generally the calendar month. However,
in the event a pricing or rebate program utilizing this definition is
implemented, modified or discontinued on other than month's end, the
period of measurement used to determine ``average daily volume'' with
respect to the rebate (as used in the definition of Liquidity Adding
ADV (O/D Displayed) and elsewhere in the Fee

Schedule) shall be that partial month during which the program's terms
are in effect.

Examples of Order Delivery Liquidity Adding Displayed Order Rebate \13\
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    \13\ These examples merely illustrate the calculation of the
rebates for Displayed Orders that Add Liquidity in Order Delivery.
They do not calculate, nor show, the rebates and fees applicable to
displayed orders that add liquidity [sic], Zero Display Orders that
add liquidity in AutoEx or Order Delivery, orders that take
liquidity, or fees for routing.
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    The following charts may be used to illustrate application of the
O/D Liquidity Adding Displayed Order Rebate. In a given calendar month
(or other applicable period), the following ETP Holders achieve the
following average daily volumes of executed shares (in each case,
counting only securities priced at one dollar or higher and excluding
partial trading days):

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 1               2               3               4         5 (Threshold)         6
                                                         -----------------------------------------------------------------------------------------------
                                                              AutoEx        AutoEx Zero       AutoEx        AutoEx Zero
                       ETP Holder                            Displayed        Display        Displayed        Display        Liquidity       Liquidity
                                                             Liquidity       Liquidity       Liquidity       Liquidity    Adding ADV (O/  Adding ADV (O/
                                                              Adding          Adding          Taking          Taking       D Displayed)       D Dark)
--------------------------------------------------------------------------------------------------------------------------------------------------------
A.......................................................          30,000          30,000          30,000          30,000          30,000          30,000
B.......................................................         920,000          30,000          30,000          30,000          30,000          30,000
C.......................................................          30,000         920,000          30,000          30,000          30,000          30,000
--------------------------------------------------------------------------------------------------------------------------------------------------------

    ETP Holder A will not receive an O/D Liquidity Adding Displayed
Order Rebate. ETP Holder A fails to satisfy the eligibility requirement
(ETP Holder A's Liquidity Adding ADV (O/D Displayed) of 30,000 (column
5) falls short of the first rebate tier of at least 1 million). ETP
Holder B and ETP Holder C similarly fail to achieve the first tier of
the O/D Liquidity Adding Displayed Order Rebate.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 1               2               3               4         5 (Threshold)         6
                                                         -----------------------------------------------------------------------------------------------
                                                              AutoEx        AutoEx Zero       AutoEx        AutoEx Zero
                       ETP Holder                            Displayed        Display        Displayed        Display        Liquidity       Liquidity
                                                             Liquidity       Liquidity       Liquidity       Liquidity    Adding ADV (O/  Adding ADV (O/
                                                              Adding          Adding          Taking          Taking       D Displayed)       D Dark)
--------------------------------------------------------------------------------------------------------------------------------------------------------
D.......................................................       1 million       1 million          30,000          30,000      10 million      10 million
--------------------------------------------------------------------------------------------------------------------------------------------------------

    ETP Holder D will receive an O/D Liquidity Adding Displayed Order
Rebate. ETP Holder D's Liquidity Adding ADV (O/D Displayed) of 10
million meets the second tier of the rebate. Accordingly, ETP Holder
D's O/D Liquidity Adding Displayed Order Rebate for the given period
will equal the number of full trading days in the measurement period
multiplied by 10 million multiplied by $0.0010 (the second rebate tier
for which ETP Holder D is eligible based on Liquidity Adding ADV (O/D
Displayed) of at least 10 million and less than 20 million).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 1               2               3               4         5 (Threshold)         6
                                                         -----------------------------------------------------------------------------------------------
                                                              AutoEx        AutoEx Zero       AutoEx        AutoEx Zero
                       ETP Holder                            Displayed        Display        Displayed        Display        Liquidity       Liquidity
                                                             Liquidity       Liquidity       Liquidity       Liquidity    Adding ADV (O/  Adding ADV (O/
                                                              Adding          Adding          Taking          Taking       D Displayed)       D Dark)
--------------------------------------------------------------------------------------------------------------------------------------------------------
E.......................................................               0      10 million               0               0      20 million      10 million
--------------------------------------------------------------------------------------------------------------------------------------------------------

    ETP Holder E will receive an O/D Liquidity Adding Displayed Order
Rebate. ETP Holder E has achieved the third tier of the Liquidity
Adding ADV (O/D Displayed) eligibility threshold (with 20 million
shares). Accordingly, ETP Holder E's O/D Liquidity Adding Displayed
Order Rebate for the given period will equal the number of full trading
days in the measurement period multiplied by 20 million multiplied by
$0.0012.

Aggregation of Activity of Affiliated ETP Holders

    This rule change also proposes to adopt a new Rule 16.3 (and delete
the obsolete text formerly contained therein) which would allow an ETP
Holder to request that the Exchange aggregate its activity with the
activity of certain of its affiliates for purposes of applying Chapter
16 and the terms of the Fee Schedule, including for purposes of
achieving the volume rebates and discounts applicable in the various
formulations of ``average daily volume'' used in the Fee Schedule. An
ETP Holder requesting aggregation of affiliate activity shall be
required to certify to the Exchange the affiliate status of entities
whose activity it seeks to aggregate prior to receiving approval for
aggregation, and shall be required to inform the Exchange immediately
of any event that causes an entity to cease to be an affiliate.
Proposed Rule 16.3 further provides that the Exchange reserves the
right to request information to verify the affiliate status of an
entity. Upon verification and approval by the Exchange, an ETP Holder's
activity would include, for purposes of calculating, among other
things, average daily volumes, the activity of its approved wholly
owned subsidiary, parent and sister entities that are also ETP Holders.

Rationale

    The Exchange has determined that these changes are necessary to
increase the volume of Displayed Orders in both

AutoEx and Order Delivery for the purpose of increasing the revenue of
the Exchange and adequately funding its regulatory and general business
functions. In addition, with respect to the O/D Liquidity Adding
Displayed Order Rebate, this rule change will provide ETP Holders with
equal incentive to submit Displayed Orders (relative to Zero Display
Orders) in Order Delivery. With respect to aggregation of affiliated
ETP Holder activity, the changes are necessary in order to effectively
compete with other trading centers \14\. The proposed modifications are
reasonable and equitably allocated to those ETP Holders that opt to
provide and take liquidity in Displayed Orders and Zero Display Orders
in either AutoEx or Order Delivery, and is not discriminatory because
ETP Holders are free to elect whether or not to send displayed orders
or Zero Display Orders via Order Delivery or AutoEx, in Tape A, B and/
or C, and as a liquidity provider or liquidity taker. In addition, the
proposed aggregation of affiliate activity is reasonable and equitably
allocated among ETP Holders based on clearly establish standards in
Rule 16.3, and is not discriminatory for the same reason. Based upon
the information above, the Exchange believes that the proposed rule
change is consistent with the protection of investors and the public
interest.
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    \14\ See, e.g., NASDAQ Rule 7027 (adopted by SEC Release 34-
53128 (Jan. 13, 2006)).
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Operative Date and Notice

    The Exchange intends to make the proposed credit and rebate
structure effective on filing of this proposed rule for trading on
April 1, 2009. Pursuant to Exchange Rule 16.1(c), the Exchange will
``provide ETP Holders with notice of all relevant dues, fees,
assessments and charges of the Exchange'' through the issuance of a
Regulatory Circular of the changes to the Fee Schedule and will post a
copy of the rule filing on the Exchange's Web site (http://
www.nsx.com).
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6(b) of the Act,\15\ in general, and
Section 6(b)(4) of the Act,\16\ in particular, in that it is designed
to provide for the equitable allocation of reasonable dues, fees and
other charges among its members and other persons using the facilities
of the Exchange. Moreover, the proposed fee and rebate structure is not
discriminatory in that all ETP Holders are eligible to submit (or not
submit) liquidity adding trades and quotes in Order Delivery or AutoEx,
in any tape, and as either displayed or undisplayed, and may do so at
their discretion in the daily volumes they choose during the course of
the measurement period. All ETP Holders are further eligible to apply
for affiliate aggregation pursuant to the objective criteria set forth
in Rule 16.3.
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    \15\ 15 U.S.C. 78f(b).
    \16\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will
impose any inappropriate burden on competition.

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

    The Exchange has neither solicited nor received written comments on
the proposed rule change.

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

    The foregoing rule change has taken effect upon filing pursuant to
Section 19(b)(3)(A)(ii) of the Act \17\ and subparagraph (f)(2) of Rule
19b-4 \18\ thereunder, because, as provided in (f)(2), it changes ``a
due, fee or other charge applicable only to a member'' (known on the
Exchange as an ETP Holder). At any time within sixty (60) days of the
filing of such proposed rule change, the Commission may summarily
abrogate 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.
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    \17\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \18\ 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 e-mail to<EMAIL_ADDRESS>Please include
File Number SR-NSX-2009-02 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NSX-2009-02. This file
number should be included on the subject line if e-mail 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 inspection and
copying in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 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 publicly available. All
submissions should refer to File Number SR-NSX-2009-02 and should be
submitted on or before May 5, 2009.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E9-8424 Filed 4-13-09; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register Volume 84, Number 194 (Monday, October 7, 2019)]
[Notices]
[Pages 53489-53496]
[FR Doc No: 2019-21736]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-87181; File No. SR-ISE-2019-23]

Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Relating to the
Submission of Quotes and Orders

October 1, 2019.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on September 17, 2019, Nasdaq ISE, LLC (``ISE'' or
``Exchange'') filed with the Securities and Exchange Commission (the
``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\ 15 U.S.C. 78a.
    \3\ 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 3 at Section 4, ``Acceptance
of Quotes and Orders,'' adopt a new Section 5, ``Entry and Display of
Single-Leg Orders,'' Section 7, ``Types of Order,'' at Supplementary
Material .03 and Section 22 titled ``Limitations on Orders.'' The
Exchange proposes to amend Options 3, Section 15, ``Simple Order Risk
Protections'' and Supplementary Material of Options 5, Section 2,
``Order Protection
    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 Exchange proposes to amend Options 3 at Section 4, ``Acceptance
of Quotes and Orders,'' adopt a new Section 5, ``Entry and Display of
Single-Leg Orders,'' Section 7, ``Types of Order,'' at Supplementary
Material .03 and Section 22 titled ``Limitations on Orders.'' The
Exchange proposes to amend Options 3, Section 15, ``Simple Order Risk
Protections'' and Supplementary Material of Options 5, Section 2,
``Order Protection.'' Each rule change will be discussed in greater
detail below.
Options 3, Section 4, Acceptance of Orders and Quotes
    Currently, Options 3, Section 4 is titled ``Acceptance of Quotes or
Orders.'' The Exchange proposes to retitle Options 3, Section 4 as
``Entry and Display of Quotes.'' The Exchange proposes to add a new
section (b) to Options 3, Section 4 to describe the current
requirements and conditions for submitting quotes. These requirements
reflect the current System operation today. The Exchange proposes to
memorialize the various requirements for the submission of quotes into
the System for greater transparency. The Exchange proposes to provide
at new Options 3, Section 4(b), ``Quotes are

subject to the following requirements and conditions:''. The Exchange
proposes to add at Options 3, Section 4(b)(1) that ``Market Makers may
generate and submit option quotations.'' Current Options 2, Section 5
makes clear that Market Makers may submit quotes.\4\ The Exchange
proposes to create a list of rules related to quote submission within
this rule for ease of reference. The Exchange proposes to provide at
proposed new Options 3, Section 4(b)(2) that ``The System shall time-
stamp a quote which shall determine the time ranking of the quote for
purposes of processing the quote.'' The Exchange notes that all quotes
today are time-stamped for purposes of processing quotes. Proposed
Options 3, Section 4(b)(3) states that ``Market Makers may enter bids
and/or offers in the form of a two-sided quote. Only one quote may be
submitted at a time for an option series.'' The Exchange believes that
this information will provide Market Makers with information on
submitting a quote. The Exchange notes that bid or offer may be a
``0,'' however a price is required to be entered for both the bid and
offer to be entered into the System. Further, the Exchange proposes at
Options 3, Section 4(b)(4) to provide clarity for entering quotes and
proposes to specify, ``The System accepts quotes for the Opening
Process as specified in Options 3, Section 8.'' \5\ The Exchange
believes that this information will bring greater transparency to the
Rulebook with respect to limitations for submitting quotations into the
System.
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    \4\ Options 2, Section 5(a) provides, ``Options Classes. A
quotation only may be entered by a Market Maker, and only in the
options classes to which the market maker is appointed under Options
2, Section 3.'' Options 2, Section 5(d) provides for Firm Quotes.
    \5\ Options 3, Section 8(c) provides, ``Market Maker Valid Width
Quotes and Opening Sweeps received starting at 9:25 a.m. Eastern
Time are included in the Opening Process. Orders entered at any time
before an option series opens are included in the Opening Process.''
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    The Exchange proposes a provision regarding firm quote within
proposed Options 3, Section 4(b)(5):

    Firm Quote. Where quotes in options on another market or markets
are subject to relief from the firm quote requirement set forth in
the Rule 602 of Regulation NMS under the Exchange Act orders and
quotes will receive an automatic execution at or better than the
NBBO based on the best bid or offer in markets whose quotes are not
subject to such relief. Such determination may be made by way of
notification from another market that its quotes are not firm or are
unreliable; administrative message from the Option Price Reporting
Authority (``OPRA''); quotes received from another market designated
as ``not firm'' using the appropriate indicator; and/or telephonic
or electronic inquiry to, and verification from, another market that
its quotes are not firm. The Exchange shall maintain a record of
each instance in which another exchange's quotes are excluded from
the Exchange's calculation of NBBO, and shall notify such other
exchange that its quotes have been so excluded. Where quotes in
options on another market or markets previously subject to relief
from the firm quote requirement set forth in the Quote Rule are no
longer subject to such relief, such quotations will be included in
the calculation of NBBO for such options. Such determination may be
made by way of notification from another market that its quotes are
firm; administrative message from OPRA; and/or telephonic or
electronic inquiry to, and verification from, another market that
its quotes are firm.

    ISE's Options 2, Section 5(d) describes Firm Quote for purposes of
Market Maker quote submission. The Exchange proposes to memorialize
within its Rules the requirement for the dissemination of quotations
pursuant to Reg NMS.\6\ The Exchange is proposing to add the above rule
text to provide context as to this restriction for submitting quotes.
The Exchange proposes to make clear the manner in which quote relief
will occur. Specifically, this proposed rule text indicates the manner
in which a determination for quote relief is made. Further, the rule
notes the Exchange shall maintain a record of each instance in which
another exchange's quotes are excluded from the Exchange's calculation
of NBBO, and shall notify such other exchange that its quotes have been
so excluded. Also, when relief is no longer available, such quotations
will be included in the calculation of NBBO for such options. The
Exchange notes how the determination is made that relief is no longer
available. The proposed rule text adds greater context to the manner in
which Firm Quote relief is applied. This rule text represents the
current practice.
---------------------------------------------------------------------------

    \6\ 17 CFR 242.602.
---------------------------------------------------------------------------

    Similarly, the Exchange proposes to provide the following at
proposed new Options 3, Section 4(b)(6):

    Trade-Through Compliance and Locked or Crossed Markets. A quote
will not be executed at a price that trades through another market
or displayed at a price that would lock or cross another market. If,
at the time of entry, a quote would cause a locked or crossed market
violation or would cause a trade-through violation, it will either
re-priced and displayed at one minimum price variance above (for
offers) or below (for bids) the national best price or immediately
cancelled, as configured by the Member.

    Today, quotations may not be executed against at prices that trade-
through an away market as provided for in the Options Order Protection
and Locked/Crossed Market Plan which is also described within Options
5. Also, quotations may not lock or cross an away market. By stating
this limitation in the rule, Market Makers will have greater clarity as
to this limitation. Further, the Exchange is making clear that a quote
that would cause a locked or crossed market violation or would cause a
trade-through violation will be re-priced. The Exchange would display
the quote at one minimum price variation (``MPV'') above (for offers)
or below (for bids) the national best price or the quote would be
immediately cancelled if requested by the Member. Repricing quotes is
consistent with the Act because the Exchange is not permitted to lock
or cross an away market's quote or order. The Exchange reprices the
quotes one MPV inferior to cause the displayed price to reflect the
available market on the Exchange.
    Finally, the Exchange proposes at Options 3, Section 4(b)(7) to
provide, ``Quotes submitted to the System are subject to the following:
Minimum increments provided for in Options 3, Section 3 and risk
protections provided for in Options 3, Section 15.'' If the Market
Maker does not submit a quotation compliant with Options 3, Section 3,
the quote will not be accepted by the System. The Exchange is noting
herein the manner in which a quote may be rejected by the System to
provide market participants with expectations as to the interplay among
the various Exchange Rules. Specifically, if the Market Maker does not
submit a quotation compliant with Options 3, Section 3, the quote will
not be accepted by the System because market participants are required
to abide by Options 3, Section 3 which describes the increments with
which options series are to be quoted. Options 3, Section 15 provides a
list of all protections applicable to quotes that may be rejected. The
Exchange believes that this rule will provide Members with requirements
and conditions for submitting quotations and provide transparency as to
limitations that cause a quote to be rejected.
    The Exchange proposes to provide at Options 3, Section 4(c),
``Quotes will be displayed in the System as described in Options 3,
Section 23.'' Options 3, Section 23, titled ``Data Fees and Trade
Information'' provides for the available feeds that Members may access
on the Exchange. This list represents the available data feeds and the
content of those data feeds which are offered today by the Exchange.
    As discussed in more detail below, the Exchange proposes to
relocate

current Options 3, Section 4(b) \7\ to new Options 3, Section 5(a)(5)
as described below in greater detail.
---------------------------------------------------------------------------

    \7\ Current Options 3, Section 4(b) provides, ``A trade may be
nullified if all parties participating in the trade agree to the
nullification. In such case, one party must notify the Exchange and
the Exchange promptly will disseminate the nullification to OPRA.''
---------------------------------------------------------------------------

    The amendment to Options 3, Section 4 to create a list of all the
requirements and conditions for submitting quotes on the Exchange
within one rule is consistent with the Act because it will provide
greater transparency to market participants of the applicable
requirements. Further, this proposal will make the current rule clear
and understandable for market participants thereby protecting investors
and the general public. The Exchange notes that while some of these
requirements appear in other rules, for ease of reference the
requirements are located within a single rule with this proposal. The
proposal reflects the Exchange's current practice with respect to
quoting requirements. This proposal will conform this Rule to other
Nasdaq affiliated markets filing similar rules.\8\ The Exchange's
proposal is intended to provide greater information with respect to
Firm Quote within new Options 3, Section 4(b)(5) and regarding trade-
through and locked and crossed markets Options 3, Section 4(b)(6). The
addition rule text is consistent with the Act because the Exchange is
adding detail regarding the method in which orders which are firm or
locked and crossed will be handled in the System. The notifications for
Firm Quote are made clear with the proposed rule text. The Exchange
believes that it is consistent with the Act to specify when quotes are
firm and the handling of such quotes by the System for the protection
of investors and the general public. The clarity is designed to promote
just and equitable principles of trade by notifying all participants
engaged in market making of potential outcomes. Today, quotations may
not be executed against at prices that trade-through an away market.
Also, quotations may not lock or cross an away market. The repricing of
quotations is consistent with the Act because repricing prevents the
Exchange from disseminating a price which locks or crosses another
market. The Exchange is required avoiding displaying a quotation that
would lock or cross a quotation of another market center at the time it
is displayed. Preventing inferior prices from displaying perfects the
mechanism of a free and open market and a national market system, and,
in general to protect investors and the public interest.
---------------------------------------------------------------------------

    \8\ See Phlx Rule 1019. Nasdaq BX, Inc. and Nasdaq Stock Market
LLC intend to file similar rules. Phlx Rule 1019 is similar to ISE
Options 3, Section 4 except that Phlx displays and reprices quotes
differently than ISE for purposes of trade-through. Phlx re-prices
to the current national best offer (for bids) or the current
national best bid (for offers) but displays at one minimum price
variance above (for offers) or below (for bids) the national best
price. ISE re-prices and displays quotes at one minimum price
variance above (for offers) or below (for bids) the national best
price, or, in the alternative if elected by the Member, the quote is
otherwise immediately cancelled if it would cause a locked or
crossed market. Further, while Phlx has a Quote Exhaust feature as
described in Phlx Rule 1082, ISE has no similar feature.
---------------------------------------------------------------------------

Options 3, Section 5, Entry and Display of Single-Leg Orders
    Similar to Options 3, Section 4, which describes requirements for
quotes, the Exchange proposes to adopt a new Options 3, Section 5,
``Entry and Display of Single-Leg Orders'' and describe the current
requirements and conditions for entering orders. The Exchange notes
that the requirements provided for within this rule represent the
current practice. The purpose of Options 3, Section 5 is to memorialize
this information within a single rule.
    The Exchange proposes to state within new Options 3, Section 5(a),
``Members can enter orders into the System, subject to the following
requirements and conditions:''. The Exchange proposes within new
Options 3, Section 5(a)(1), ``Members shall be permitted to transmit to
the System multiple orders at a single as well as multiple price
levels.'' The Exchange's new rule text at Options 3, Section 5(a)
proposes to make clear that multiple orders may be transmitted to the
System as single or multiple price levels. This is the case today. The
Exchange proposes to memorialize the manner in which orders may be
submitted to the System to add more detail to its rules. The Exchange
proposes at new Options 3, Section 5(a)(2), ``The System accepts orders
beginning at a time specified by the Exchange and communicated on the
Exchange's website.'' The System accepts orders beginning at a time
specified by the Exchange and communicated on the Exchange's
website.\9\
---------------------------------------------------------------------------

    \9\ The Exchange's website makes the timeframes in which orders
may be submitted to the System: https://business.nasdaq.com/media/ISESystemSettings_tcm5044-44183.pdf.
---------------------------------------------------------------------------

    The Exchange proposes at new Options 3, Section 5(a)(3), ``The
System shall time-stamp an order which shall determine the time ranking
of the order for purposes of processing the order.'' Further, all
orders are time-stamped to determine the time ranking of the order for
purposes of processing the order within the System. This is also the
case today and the Exchange is adding this detail to its rules to
describe the time-stamp.
    The Exchange proposes to add at new Options 3, Section 5(a)(4),
``Orders submitted to the System are subject to the following: Minimum
increments provided for in Options 3, Section 3, risk protections
provided for in Options 3, Section 15, and the restrictions of any
order type as provided for in Options 3, Section 7. Orders may execute
at multiple prices.'' All orders must adhere to other rule requirements
such as minimum increments, risk protection rules and order types.
Similar to the rule text for quotes, order are currently subject the
minimum increment requirements in Options 3, Section 3 and also the
risk protections for orders which are listed within current Options 3,
Section 15. This rule provides a list of other requirements which may
impact the execution of an order. Finally, orders may execute at
multiple prices.
    The Exchange proposes to add to new Options 3, Section 5(a)(5) the
following, ``Nullification by Mutual Agreement. Trades may be nullified
if all parties participating in the trade agree to the nullification.
In such case, one party must notify the Exchange and the Exchange
promptly will disseminate the nullification to OPRA. It is considered
conduct inconsistent with just and equitable principles of trade for a
party to use the mutual adjustment process to circumvent any applicable
Exchange rule, the Act or any of the rules and regulations
thereunder.'' The rule text of new Options 3, Section 5(a)(5) is
relocated from Options 3, Section 4(b) because it related to orders.
The Exchange proposes to caption proposed Options 3, Section 5(a)(5) as
``Nullification by Mutual Agreement'' and add the following sentence to
this provision, ``It is considered conduct inconsistent with just and
equitable principles of trade for a party to use the mutual adjustment
process to circumvent any applicable Exchange rule, the Act or any of
the rules and regulations thereunder.'' The Exchange believes that it
is consistent with the Act to permit parties to agree to a
nullification provided the nullification does not violate other
exchange rules. The Exchange notes that parties may not agree to a
mutual agreement for purposes that would cause another rule to be
violated. The Exchange believes that it is consistent with the Act and
protection of investors and general public to make clear the expected
behavior with respect to nullifications.

    The rule text at proposed Options 3, Section 5(b) is relocated from
Options 3, Section 15(a). The Exchange notes that this NBBO Protection
applies to orders and therefore is being discussed within proposed
Options 3, Section 5, which applies to all market participants. In
contrast, Options 3, Section 4, which applies to quotes entered by
Market Makers, describes the Firm Quote protections and the interplay
of NBBO with respect to quotes. Trade-Through is described in both
Options 3, Sections 4 and 5. The Exchange proposes to change the word
``rejected'' to ``cancelled'' within new Options 3, Section 5(b)
because an order may be accepted by the System and then immediately
cancelled. New Options 3, Section 5(c) seeks to define the Exchange's
best bid and offer as the ``BBO.'' The Exchange provides, ``The System
automatically executes eligible orders using the Exchange's displayed
best bid and offer (``BBO'').''
    Similar to Options 3, Section 4(b)(6), the Exchange proposes to
note at new Options 3, Section 5(d),

    Trade-Through Compliance and Locked or Crossed Markets. An order
will not be executed at a price that trades through another market
or displayed at a price that would lock or cross another market. An
order that is designated by the Member as routable will be routed in
compliance with applicable Trade-Through and Locked and Crossed
Markets restrictions. Orders that are not automatically executed
will be handled as provided in Supplementary Material .02 to Options
5, Section 2; provided that Members may specify that a Non-Customer
order should instead be cancelled automatically by the System at the
time of receipt.

    Today, orders may not be executed at a price that trades through an
away market. Also, orders may not lock or cross an away market.
Routable orders must comply with Trade-Through and Locked and Crossed
Markets restrictions. Finally, the Exchange proposes to cross-reference
Supplementary Material .02 to Options 5, Section 2 to describe the
manner in which orders that are not automatically executed are handled.
Today, Members may specify that a Non-Customer order should instead be
cancelled automatically by the System at the time of receipt. By
including this information within this rule, the Exchange proposes to
provide Members with information related to trade-through in one
location with cross-references to provide transparency. This rule text
is similar to rule text within BX Chapter VI, Section 7(b)(3)(C).
Noting these limitations within the rule is consistent with the Act
because Members will have greater clarity as to limitations.
    Finally, the Exchange proposes to add rule text at new Options 3,
Section 5(e), similar to Options 3, Section 4(c) which states, ``Orders
will be displayed in the System as described in Options 3, Section
23.''
    The Exchange's proposal to adopt a new Options 3, Section 5,
``Entry and Display of Orders'' and describe the current requirements
and conditions for entering orders, similar to proposed changes to
Options 3, Section 4 for quotes is consistent with the Act because it
will provide transparency as to manner in which orders may be submitted
to the System. The Exchange's new rule reflects the current
requirements for submitting orders into the System. Similar to proposed
Options 3, Section 4, the Exchange proposes to memorialize requirements
and limitations within one rule for ease of reference.\10\
---------------------------------------------------------------------------

    \10\ Phlx Rule 1096 is similar to ISE Options 3, Section 5. With
respect to NBBO Protection, unlike Phlx, ISE Orders that are not
automatically executed will be handled as provided in Supplementary
Material .02 to Options 5, Section 2; provided that Members may
specify that a Non-Customer order should instead be accepted and
immediately cancelled automatically by the System at the time of
receipt. Phlx does not have a similar exposure mechanism. Also, with
respect to trade-through, Phlx re-prices an order that would cause a
locked or crossed market violation or would cause a trade-through
violation to the current national best offer (for bids) or the
current national best bid (for offers) and displayed at one minimum
price variance above (for offers) or below (for bids) the national
best price. While ISE will not execute an order at a price that
trades through another market or display an order at a price that
would lock or cross another market, ISE does not re-price orders.
ISE Members may specify that a Non-Customer order should instead be
cancelled automatically by the System at the time of receipt.
---------------------------------------------------------------------------

Options 3, Section 7, Types of Orders
    The Exchange proposes to amend Supplementary Material .03(c) to
Options 3, Section 7 to add the following sentence to Specialized Quote
Feed (``SQF''), ``Market Makers may only enter interest into SQF in
their assigned options series.'' The Exchange notes that today Market
Makers may utilize SQF to quote only in their assigned options series
as provided for in Options 2, Section 3, Appointment of Market Makers.
Adding this information to the SQF protocol is consistent with the Act
because the Exchange desires to make clear the manner in which Market
Makers may submit quotes through the protocol. Market Makers are
obligated to provide liquidity on ISE in the options series to which
they are assigned, which liquidity benefits all market participants.
This amendment is similar to language currently within Phlx Rule
1080(a)(i)(B).
Options 3, Section 15 Simple Order Risk Protections
    The Exchange proposes to delete the first sentence introductory
sentence of Options 3, Section 15 which provides, ``Incoming orders
that are executable against orders and quotes in the System will be
executed automatically by the System subject to the following:'' and
relocate the rule text to Options 3, Section 5 as described herein as
well as Section 15(a)(1) and (a)(2), into proposed new Options 3,
Section 5(b) and renumber Options 3, Section 15(b) as new ``a.'' The
Exchange proposes to relocate current Options 3, Section 15(b)(1)(C) to
Options 3, Section 15(b)(2)(B). Current Options 3, Section 15(b)(1)(D)
will be re-lettered as ``C''. Options 3, Section 15(b)(1) provides for
single-leg order risk protections. The Exchange proposes to relocate
the Size Limitation protection to Options 3, Section 15(b)(2) because
this section applies to order and quote risk protections. Size
Limitation protection applies to both orders and quotes and is
therefore properly placed within this section. The Exchange proposes to
add the words ``or quote'' to the description to make clear that this
protection applies to both orders and quotes.
    The Exchange believes that relocating this rule and adding ``or
quotes'' is consistent with the Act because the Exchange will make
clear that the Size Limitation risk protection would apply to all
interest on the Exchange.
Options 3, Section 22, Limitation on Orders
    The Exchange proposes to amend Options 3, Section 22 to retitle the
Section from ``Limitations on Orders'' to ``Limitations on Order
Entry.'' The Exchange believes that this title is more appropriate for
these rules.
    The Exchange proposes to amend Options 3, Section 22(b) to amend
the title of the section from ``Principal Transactions'' to
``Limitations on Principal Transactions.'' This rule provides for the
exposure of orders entered on the Exchange. Specifically, with respect
to orders entered when a Member is acting as agent and principal on an
order, the order must be exposed for one second prior to execution to
allow an opportunity for price improvement. The Exchange has filed for
certain functionalities which are exceptions to the general standard of
one second exposure. These functionalities have provisions which
describe the manner in which orders can be entered into the
Facilitation

Mechanism,\11\ Price Improvement Mechanism,\12\ Qualified Contingent
Cross Orders,\13\ Customer Cross Orders \14\ and Complex Order
Exposure.\15\ The Exchange proposes to separately note that with
respect to the Solicitation Mechanism,\16\ that an Options Member may
electronically submit for execution an order it represents as agent
against solicited order(s). Options 3, Section 11(d) and (e) provide
that an Agency Order must be for at least the minimum size designated
by the Exchange, which may not be less than 500 standard option
contracts, and the order be entered into the Solicited Order Mechanism
shall be designated as all-or-none. Because a Member may not execute as
principal on the order, there must be an Agency Order which executes
against the solicited order; therefore, the Solicitation Mechanism is
explicitly carved out from proposed Options 3, Section 22(b), whereas
the other auctions noted are exceptions to the general one second rule.
The Exchange believes it is consistent with the Act and the protection
of investors and the general public to describe the functionalities
available on the Exchange into which a Member may enter principal
orders they represent as agent. Options 3, Section 22 is intended to
encourage price discovery and price improvement of all orders entered
on the Exchange.
---------------------------------------------------------------------------

    \11\ See Options 3, Section 11(b) and (c).
    \12\ See Options 3, Section 13.
    \13\ See Options 3, Section 12(c) and (d).
    \14\ See Options 3, Section 12(a) and (b).
    \15\ See Supplementary Material .01 to Options 3, Section 14.
    \16\ See Options 3, Section 11(d) and (e).
---------------------------------------------------------------------------

    The Exchange proposes to relocate Supplementary Material .01 to
Options 3, Section 22 to new Section 22(b)(i) and state ``This Rule''
instead of ``Options 3, Section 22(d).'' The Exchange notes that the
references to ``d'' should refer to ``b'' and those cross-references
are being updated.
    The Exchange proposes to amend the title of Options 3, Section
22(c), from ``Solicitation Orders'' to ``Limitation on Solicitation
Orders.'' The Exchange proposes to add exceptions for Qualified
Contingent Cross Orders pursuant to Options 3, Section 12(c) and (d),
Customer Cross Order pursuant to Options 3, Sections 12(a) or (b) and a
Complex Order Exposure pursuant to Supplementary Material .01 to
Options 3, Section 14 similar to proposed Options 3, Section 22(b).
    The Exchange proposes to re-letter current ``d'' as ``e'' as the
Exchange proposes new rule text at proposed Options 3, Section 22(d)
which provides, ``Prior to or after submitting an order to ISE, a
Member cannot inform another Member or any other third party of any of
the terms of the order for purposes of violating this Rule.'' Similar
rule text is contained in The Nasdaq Options Market LLC (``NOM'')
Rules.\17\ The Exchange believes that adding this language will better
information participants that Options 3, Section 22 prohibits such
behavior. The Exchange desires to conform the language in this rule to
that of affiliated Nasdaq markets. The Exchange notes that similar
language is currently contained within Supplementary Material .02 to
Options 3, Section 22 which provides,

    It will be a violation of Options 3, Section 22(e) for an
Electronic Access Member to cause the execution of an order it
represents as agent on the Exchange by orders it solicited from
Members and non-Member broker-dealers to transact with such orders,
whether such solicited orders are entered into the System directly
by the Electronic Access Member or by the solicited party (either
directly or through another Member), if the Member fails to expose
orders on the Exchange as required by Options 3, Section 22(e).
---------------------------------------------------------------------------

    \17\ See NOM Rules at Chapter VII, Section 12 at Commentary .04.

    This rule text is repetitive of the provisions within current
Options 3, Section 22(c). The Exchange is clearly providing within
Options 3, Section 22(c) that a Member must expose an order for one
second. Further, the Member cannot inform another Member or third party
of the terms of the order, which would be a violation of the rule
pursuant to proposed Options 3, Section 22(c). The Exchange does not
believe that the rule text within Supplementary Material .02 to Options
3, Section 22 provides additional information, but rather is repetitive
of the prohibitions within the rule, as proposed.
    The Exchange proposes to update the rule citations in Supplementary
Material .01 to Options 3, Section 22 to refer to paragraph ``b''
instead of ``d''. The Exchange proposes to update the rule numbers for
the remainder of the Rule and also update the cross-reference in
Supplementary Material .04 to Options 3, Section 22.
    The Exchange proposes to make clear with this Rule that Members may
not gain by failing to expose orders submitted on an agency basis. The
Exchange is promoting transparency of orders to prevent Members from
seeking price discovery and potentially preventing price improvement,
which may result from exposing an order. The Exchange's proposal to
amend Options 3, Section 22 will conform this Rule to other Nasdaq
affiliated markets filing similar rules.\18\ The Exchange's proposal to
add rule text to describe potential violations of this Rule will bring
greater clarity to current limitations that exist when entering orders.
The amendments to Options 3, Section 22 are consistent with the Act
because the Rule provides a list of limitations when entering order on
the Exchange. The Exchange believes the proposed rule will promote just
and equitable principles of trade and remove impediments to and perfect
the mechanism of a free and open market and a national market system
because it will continue to make clear the requirement to expose orders
as well as present more specific limitations on order entry which would
violate Exchange Rules. Providing Members with more information as to
the type of behavior that is violative with respect to order exposure
will prevent inadvertent violations of Exchange rules and ensure that
orders are subject to appropriate price discovery.
---------------------------------------------------------------------------

    \18\ Nasdaq BX, Inc. and Nasdaq Stock Market LLC are also
adopting similar rules to Phlx Rule 1097.
---------------------------------------------------------------------------

Options 5, Section 2 Order Protection
    The Exchange proposes to amend Supplementary Material .02(f) within
Options 5, Section 2. This rule currently states, ``A pattern or
practice of submitting unrelated orders that cause an exposure period
to conclude early will be deemed conduct inconsistent with just and
equitable principles of trade and a violation of Options 9, Section 1
and other Exchange Rules.'' The Exchange proposes to cross-reference
Options 3, Section 22 to provide further clarity on the manner in which
Members may be found to have violated Supplementary Material .02 to
Options 5, Section 2. Specifically, the Exchange proposes to remove the
word ``unrelated'' and more specifically indicate all submitting orders
that cause an exposure period to conclude early for the purposes of
violating Options 3, Section 22 will also be deemed conduct
inconsistent with just and equitable principles of trade and a
violation of Options 9, Section 1 and other Exchange Rules. The
Exchange believes that this additional language referencing Options 3,
Section 22 will provide context for the violation as Options 3, Section
22 describes the exposure requirements for orders. Further, the
Exchange believes all orders, not just ``unrelated'' orders may cause a
rule violation. The Exchange believes that it is consistent with the
Act to make clear the manner in which a Member may violate Options

3, Section 2 which respect to order exposure.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\19\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\20\ in particular, in that it is designed to
promote just and equitable principles of trade, 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.
---------------------------------------------------------------------------

    \19\ 15 U.S.C. 78f(b).
    \20\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

Options 3, Section 4, Acceptance of Quote and Orders
    The Exchange's proposal to add a new section (b) to Options 3,
Section 4 to describe the current requirements and conditions for
submitting quotes are consistent with the Act. The Exchange is
memorializing its current practice by reflecting the various
requirements and limitations for quote entry in one rule for ease of
reference and clarity. The Exchange is also proposing to conform this
rule to similar rules across other Nasdaq affiliated exchanges. Making
clear the manner in which Market Makers may generate and submit option
quotations will provide these market participants with clear guidance
within the rules. The Exchange notes that other rules already limit the
use of quotations on the Exchange. Options 2, Section 5 makes clear
that Market Makers may submit quotes.\21\ Supplementary Material .03(c)
to Options 3, Section 7 describes the SQF interface.\22\ Options 2,
Section 4(b)(4) provides the allowable spread for entering bids and
offers on the Exchange. Further, the Exchange is making clear that only
one quote may be submitted at a time for a series. The Exchange
believes that memorializing these restrictions will bring greater
clarity to the Exchange's rules. Also, the Exchange believes that
making clear that quotes may be entered as specified by the Exchange
makes clear that all Market Makers are subject to uniform requirements
for quoting.
---------------------------------------------------------------------------

    \21\ Options 2, Section 5(a) provides, ``Options Classes. A
quotation only may be entered by a market maker, and only in the
options classes to which the market maker is appointed under Options
2, Section 3.'' Options 2, Section 5(d) provides for Firm Quote.
    \22\ Supplementary Material .03(c) to Options 3, Section 7
provides ``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 to the
Exchange. Market Makers on ISE can only submit quotes and orders
through SQF in their assigned options series.
---------------------------------------------------------------------------

    The Exchange's proposal to add a provision regarding Firm Quote
within new Options 3, Section 4(b)(5) will bring greater transparency
to the limitations that Market Makers have today with respect to firm
quote. ISE's Options 2, Section 5(d) describes firm quote for purposes
of Market Maker quote submission. The Exchange is proposing to add rule
text to provide context as to this restriction for submitting quotes.
The proposed rule text makes clear the manner in which Firm Quote
relief is applied. The Exchange believes it is consistent with the Act
to provide greater detail as to the current obligations for Market
Makers with respect to firm quote. The addition rule text is consistent
with the Act because the Exchange is adding detail regarding the method
in which orders which are firm or locked and crossed will be handled in
the System.
    The notifications for Firm Quote are made clear with the proposed
rule text. The Exchange believes that it is consistent with the Act to
specify when quotes are firm and the handling of such quotes by the
System for the protection of investors and the general public. The
clarity is designed to promote just and equitable principles of trade
by notifying all participants engaged in market making of potential
outcomes. Further, the Exchange's proposal to add more detail at
proposed new Options 3, Section 4(b)(6) regarding trade-through and
locked and crossed markets is consistent with the Act. Today,
quotations may not be executed against at prices that trade-through an
away market. Also, quotations may not lock or cross an away market.
Also, quotations may not lock or cross an away market. By stating this
limitation in the rule, Members will have greater clarity as to this
limitation. The repricing of quotations is consistent with the Act
because repricing prevents the Exchange from disseminating a price
which locks or crosses another market. The Exchange's proposal to note
that quotes are subject to minimum increments provided for in Options
3, Section 3 and risk protections provided for in Options 3, Section 15
is consistent with the Act because this rule brings greater
transparency to these requirements which are already noted in the
aforementioned rules. Options 2, Section 5(b)(1) similarly requires a
Market Maker to quote in the minimum increments specified in Options 3,
Section 3. Options 3, Section 15, titled ``Simple Order Risk
Protections'' provides a list of all protections applicable to quotes
that may cause an order to be rejected. The Exchange believes that this
rule will provide Market Makers with requirements and conditions for
submitting quotations and provide transparency as to limitations that
cause a quote to be rejected.
    The Exchange's proposal to make clear that quotes will be displayed
in the System as described in Options 3, Section 23 is intended to
bring greater transparency as to the data available on the Exchange.
Options 3, Section 23, titled ``Data Fees and Trade Information''
provides for the available feeds that Members may access on the
Exchange.
Options 3, Section 5, Entry and Display of Single-Leg Orders
    The Exchange proposes to retitle Options 3, Section 5 as ``Entry
and Display of Single-Leg Orders'' to describe the current requirements
and conditions for entering orders, similar to proposed changes to
Options 3, Section 5 for quotes is consistent with the Act because it
will provide transparency as to manner in which orders may be submitted
to the System. The Exchange's new rule text memorializes the current
requirements for submitting orders into the System. Similar to proposed
Options 3, Section 4, the Exchange proposes to memorialize requirements
and limitations within one rule for ease of reference.
    The Exchange's new rule text at Options 3, Section 5(a) proposes to
make clear that multiple orders may be transmitted to the System as
single or multiple price levels to add greater transparency to the
Exchange's rules. The Exchange proposes to memorialize the manner in
which orders may be submitted to the System to add more detail to its
rules. For example, the time the System begins accepting orders,
information concerning the time-stamp, which determines the time
ranking of the order, as well as restrictions to order entry. Orders
submitted to the System are subject to minimum increments specified in
Options 3, Section 3 risk protections provided for in Options 3,
Section 15, and the restrictions of any order type as provided for in
Options 3, Section 7. The Exchange believes that listing the
requirements and limitations is consistent with the Act because it will
provide Members with the information necessary to process orders on
ISE. In addition, noting that parties may not agree to a mutual
agreement for purposes that would cause another rule to be violated is
consistent with the Act because it provides transparency to Members
that certain behavior would cause a rule violation. The Exchange
believes that this provision protects

investors and the public interest because it specifically prohibits
market manipulation within propose new rule. The Exchange's proposal to
define both the Exchange's best bid and offer as the ``BBO'' is
consistent with the Act because it provides context to the usage of
these terms in the Rulebook. The Exchange notes, within Options 3,
Section 7, the orders are displayed and non-displayed.
    Further, the Exchange's proposal to add more detail at proposed new
Options 3, Section 5(d) regarding trade-through and locked and crossed
markets is consistent with the Act. Today, orders may not be executed
against at prices that trade-through an away market. Also, orders may
not lock or cross an away market. Routable orders must comply with
Trade-Through and Locked and Crossed Markets restrictions. By stating
this limitation in the rule, Members will have greater clarity as to
this limitation. The rule also seeks to aggregate information relating
to trading-through so as to provide Members with clear guidelines for
submitting orders.
    The Exchange's proposal to make clear that orders will be displayed
in the System as described in Options 3, Section 23 is intended to
bring greater transparency as to the data available on the Exchange.
Options 3, Section 23 titled ``Data Fees and Trade Information''
provides for the available feeds that Members may access on the
Exchange.
Options 3, Section 7, Types of Orders
    The Exchange's proposal to amend Supplementary Material .03(c) to
Options 3, Section 7 to make clear that Market Makers may only enter
interest into SQF in their assigned options series is consistent with
the Act. Options 2, Section 3, Appointment of Market Makers, describes
the manner in which Market Makers are appointed in options series. This
sentence simply provides that SQF may only be utilized for quoting in
assigned options series.
Options 3, Section 15, Simple Order Risk Protections
    The Exchange's proposal to relocate Options 3, Section 15(a) \23\
into proposed new Options 3, Section 5(b) is consistent with the Act
because this rule text relates to orders, which topic is described
within new Options 3, Section 5. The proposal to relocate Size
Limitation to make clear that this risk protection impacts orders and
quotes will bring greater transparency to this risk protection.
---------------------------------------------------------------------------

    \23\ Options 5, Section 15(a) provides, ``NBBO Price Protection.
Orders, other than Intermarket Sweep Orders (as defined in Options
5, Section 1(h)), will not be automatically executed by the System
at prices inferior to the NBBO (as defined in Options 5, Section
1(j)). (1) Orders that are not automatically executed will be
handled as provided in Supplementary Material .02 to Options 5,
Section 3; provided that Members may specify that a Non-Customer
order should instead be rejected automatically by the System at the
time of receipt. (2) There is no NBBO price protection with respect
to any other market whose quotations are Non-Firm (as defined in
Options 5, Section 1(k)).''
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Options 3, Section 22, Limitation on Orders
    The Exchange's proposal to amend Options 3, Section 22 to list all
the exceptions to the exposure requirement is consistent with the Act
because this rule change will bring greater clarity to the Rulebook.
The Exchange is adding rule text currently contained in a NOM rule to
describe the required period that orders are to be exposed.\24\ The
Exchange believes the additional language provided context and further
explains the exceptions. The Exchange believes that this rule is
consistent with the Act because with the addition of this language the
rule more specifically describes the limitations to behavior on the
Exchange with respect to order exposure and the necessity to conduct
price discovery. The rule also describes behavior that would violate
Options 3, Section 22 depending on the relationship of the parties and
exchange of information. Listing all of the relevant mechanisms
available on the Exchange will make clear the manner in which a Member
may execute as principal orders they represent as agent. Further,
explicitly excluding the Solicitation Mechanism will make clear that
the particular auction is not an exception to the one second rule. The
Exchange's proposal to relocate rule text to create topic headings and
discuss each topic discretely will bring greater clarity to this rule
text. The Exchange's proposal to add a new Options 3, Section 22(c)
will make clear that a Member cannot inform another Member or any other
third party of any of the terms of the order in violation of this rule.
Options 9, Section 9, titled ``Prevention of the Misuse of Material
Nonpublic Information,'' prohibits such activity today. This rule text
is contained in NOM Rules.\25\ The Exchange desires to conform the
language in this rule to that of affiliated Nasdaq markets. Finally,
updating the cross-references will make clear the manner in which a
Member may enter orders on the Exchange.
---------------------------------------------------------------------------

    \24\ See Chapter VII, Section 12.
    \25\ See Chapter VII, Section 12 at Commentary .04.
---------------------------------------------------------------------------

Options 5, Section 2, Order Protection
    The Exchange's proposal to amend Supplementary Material .02(f)
within Rule Options 5, Section 2 to make clear behavior that would
violate this rule is consistent with the Act because the Exchange seeks
to provide Members with specific information as to the type of behavior
the rule seeks to limit. This rule currently states, ``A pattern or
practice of submitting unrelated orders that cause an exposure period
to conclude early will be deemed conduct inconsistent with just and
equitable principles of trade and a violation of Options 9, Section 1
and other Exchange Rules.'' The Exchange proposes to cross-reference
Options 3, Section 22 to provide further clarity on the manner in which
Members may be found to have violated Options 5, Section 2.
Specifically, the Exchange proposes to remove the word ``unrelated''
and more specifically indicate all submitting orders that cause an
exposure period to conclude early for the purposes of violating Options
3, Section 22 will also be deemed conduct inconsistent with just and
equitable principles of trade and a violation of Options 9, Section 1
and other Exchange Rules. The Exchange believes that this additional
language referencing Options 3, Section 22 will provide context for the
violation as Options 3, Section 22 describes the exposure requirements
for orders.

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.
Options 3, Section 4, Acceptance of Quote and Orders
    The Exchange's proposal to add a new section (b) to Options 3,
Section 4 to describe the current requirements and conditions for
submitting quotes does not impose an undue burden on competition
because the Exchange is memorializing its current practice by
reflecting the various requirements and limitations in one rule for
ease of reference and clarity and all Market Makers are subject to the
these requirements today. The Exchange is memorializing its current
practice by reflecting the various requirements and limitations for
quote entry in one rule for ease of reference and clarity. The Exchange
is also proposing to conform this rule to similar rules across other
Nasdaq affiliated exchanges.

Options 3, Section 5, Entry and Display of Orders
    The Exchange's proposed new Options 3, Section 5 describes the
requirements and conditions pursuant to which Members can enter orders
into the System. The Exchange's proposal does not impose an undue
burden on competition because it applies uniformly to all Members. This
rule memorializes the manner in which orders may be submitted to the
System and provides transparency as to manner in which orders may be
submitted to the System. The Exchange is also proposing to conform this
rule to similar rules across other Nasdaq affiliated exchanges.
Options 3, Section 7, Types of Order
    The Exchange's proposal to amend Supplementary Material .03(c) to
Options 3, Section 7 to make clear that Market Makers may only enter
interest into SQF in their assigned options series does not impose an
undue burden on competition, rather it makes clear that SQF may only be
utilized for quoting in assigned options series. This rule is
applicable to all Market Makers.
Options 3, Section 15, Simple Order Risk Protections
    The Exchange's proposal to relocate Options 3, Section 15(a) into
proposed new Options 3, Section 5(b) does not impose an undue burden on
competition because this rule text relates to orders, which topic is
described within new Options 3, Section 5. Relocating the Size
Limitation protection to another section of the rule to make clear it
applies to quotes and orders will bring greater transparency to this
rule.
Options 3, Section 22, Limitation on Orders
    The Exchange's proposal to amend Options 3, Section 22 to list all
the exceptions to the exposure requirement does not impose an undue
burden on competition because this rule change will bring greater
clarity to the Rulebook. The Exchange's proposal to relocate rule text
to create topic headings and discuss each topic discretely will bring
greater clarity to this rule text. The Exchange's proposal to add a new
Options 3, Section (c) will make clear the type of behavior that would
cause a Member to violate Options 3, Section 22 when disclosing
information to another Member or any other third party with respect to
the terms of the order.
Options 5, Section 2, Order Protection
    The Exchange's proposal to amend Supplementary Material .02(f)
within Rule Options 5, Section 2 to make clear behavior that would
violate this rule does not impose an undue burden on competition
because it seeks to provide Members with specific information as to the
type of behavior the rule seeks to limit. This rule would apply
uniformly to all Members.

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 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)(iii) of the Act \26\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\27\
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    \26\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \27\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file 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.
---------------------------------------------------------------------------

    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_ADDRESS>Please include
File Number SR-ISE-2019-23 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-2019-23. 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 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. 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-2019-23, and should be submitted on
or before October 28, 2019.
---------------------------------------------------------------------------

    \28\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\28\
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-21736 Filed 10-4-19; 8:45 am]
 BILLING CODE 8011-01-P


Letourneau Inc., Marine Group 2401 South High Street, Longview, Texas 75602 Robert Rimlinger, Sr. VP GM ( 903) 237 7546 E mail: phendrix@ letourneau inc. com Julian Bowes, VP Marine Technology, Sales & Marketing ( 903) 237 7558 E mail: jfbowes@ aol. com Friede & Goldman, Ltd Mr. Paul R. Geiger, Jr., President Friede & Goldman, Ltd 10375 Richmond Ave., Suite 1200 Houston, TX 77042 + 1 ( 713) 952 3444 E mail: p. geigerjr@ fgh. com Zentech Engineering, Inc. Mr. Ramesh Maini, President Zentech Engineering, Inc. 8582 Katy Freeway, Suite 205 Houston, TX 77024 + 1 ( 713) 984 9171 E mail: ramesh@ zentech usa. com Marine Structure Consultants bv Ir C. J. Mommaas, Managing Director Marine Structure Consultants bv P. O. Box 687 3100 AR Schiedam Netherlands + 31 ( 10) 246 6940 E mail: msc@ mscoffshore. nl ABS Group, Inc. Mr. John Stiff Head Offshore Engineering ABS Group, Inc. 16855 Northchase Drive Houston, TX 77060 6008 + 1 ( 281) 877 6252 E mail: jstiff@ eagle. org


[Federal Register Volume 76, Number 185 (Friday, September 23, 2011)]
[Notices]
[Pages 59148-59149]
[FR Doc No: 2011-24448]

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

[Internal Agency Docket No. FEMA-4022-DR; Docket ID FEMA-2011-0001]

Vermont; Amendment No. 7 to Notice of a Major Disaster
Declaration

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Notice.

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SUMMARY: This notice amends the notice of a major disaster declaration
for the State of Vermont (FEMA-4022-DR), dated September 1, 2011, and
related determinations.

DATES: Effective Date: September 16, 2011.

FOR FURTHER INFORMATION CONTACT: Peggy Miller, Office of Response and
Recovery, Federal Emergency Management Agency, 500 C Street, SW.,
Washington, DC 20472,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: The notice of a major disaster declaration
for the State of Vermont is hereby amended to include the following
area among those areas determined to have been adversely affected by
the event declared a major disaster by the President in his declaration
of September 1, 2011.

    Grand Isle County for Public Assistance, including direct
federal assistance.

    The following Catalog of Federal Domestic Assistance Numbers
(CFDA) are to be used for reporting and drawing funds: 97.030,
Community Disaster Loans; 97.031, Cora Brown Fund; 97.032, Crisis
Counseling; 97.033, Disaster Legal Services; 97.034,

Disaster Unemployment Assistance (DUA); 97.046, Fire Management
Assistance Grant; 97.048, Disaster Housing Assistance to Individuals
and Households in Presidentially Declared Disaster Areas; 97.049,
Presidentially Declared Disaster Assistance--Disaster Housing
Operations for Individuals and Households; 97.050, Presidentially
Declared Disaster Assistance to Individuals and Households--Other
Needs; 97.036, Disaster Grants--Public Assistance (Presidentially
Declared Disasters); 97.039, Hazard Mitigation Grant.

W. Craig Fugate,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2011-24448 Filed 9-22-11; 8:45 am]
BILLING CODE 9111-23-P