[Federal Register Volume 86, Number 121 (Monday, June 28, 2021)]
[Notices]
[Pages 34096-34101]
[FR Doc No: 2021-13654]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-92226; File No. SR-ISE-2021-14]

Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Options 2,
Section 4 (Obligations of Market Makers), Options 4, Section 3
(Criteria for Underlying Securities), Options 4, Section 8 (Long-Term
Options Contracts), and Options 4A, Section 12 (Terms of Index Options
Contracts)

June 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 June 9, 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 Options 2, Section 4, Obligations of
Market Makers; Options 4, Section 3, Criteria for Underlying
Securities; Options 4, Section 8, Long-Term Options Contracts; and
Options 4A, Section 12, Terms of Index Options Contracts.
    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 Exchange proposes to amend Options 2, Section 4, Obligations of
Market Makers; Options 4, Section 3, Criteria for Underlying
Securities; Options 4, Section 8, Long-Term Options Contracts; and
Options 4A, Section 12, Terms of Index Options Contracts. Each change
will be described below.
Options 2, Section 4(a)
    The Exchange proposes to remove the following rule text from
Options 2, Section 4(a), which has been in place since ISE's inception:
\3\
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    \3\ See Securities Exchange Act Release No. 42455 (February 24,
2000), 65 FR 11388 (March 2, 2000) (In the Matter of the Application
of The International Securities Exchange LLC for Registration as a
National Securities Exchange; Findings and Opinion of the
Commission).

. . . Ordinarily, Market Makers are expected to:
    (1) Refrain from purchasing a call option or a put option at a
price more than $0.25 below parity, although a larger amount may be
appropriate considering the particular market conditions. In the
case of calls, parity is measured by the bid in the underlying
security, and in the case of puts, parity is measured by the offer
in the underlying security.
    (2) The $0.25 amount above may be increased, or the provisions
of this Rule may be waived, by the Exchange on a series-by-series
basis.

This proposed rule text also previously existed on Cboe Exchange, Inc.
within prior Rule 8.7 \4\ and was removed from Cboe's Rulebook in
2019.\5\ The

Exchange likewise desires to remove this restriction on Market Makers
which does not exist on Cboe or other Nasdaq affiliated markets.\6\ The
proposed rule text is currently waived on ISE pursuant to Options 2,
Section 4(a)(2). The Exchange proposes to remove this rule text from
Options 2, Section 4 as the Exchange does not desire to enforce this
provision in the future. The Exchange believes that this market maker
provision is no longer necessary. Today, ISE incentivizes Market Makers
through pricing \7\ and allocation \8\ to quote tightly in their
assigned options series. Primary Market Makers and Competitive Market
Makers also have other obligations with respect to market making \9\ in
addition to other quoting obligations \10\ that they must abide by when
quoting on ISE. Also, since the adoption of the rule, the Exchange has
adopted the obvious error rule \11\ which permits the Exchange to
review a transaction as potentially erroneous based on a theoretical
price. Also, ISE orders are subject to trade-through compliance,
thereby limiting the prices at which orders may execute.\12\ Market
Makers are relied upon to provide liquidity on ISE, which benefits
other Members who have an opportunity to interact with the order flow.
The Exchange believes that the obligation to refrain from purchasing a
call option or a put option at a price more than $0.25 below parity
places yet another obligation on ISE Market Makers that is not required
on Cboe or other Nasdaq markets. The Exchange believes that this
additional obligation is not necessary to maintain fair and orderly
markets and notes the Exchange has waived this obligation.
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    \4\ Prior Interpretation and Policy .02 to Rule 8.7 provided,
``Market-Makers are expected ordinarily to refrain from purchasing a
call option or a put option at a price more than $0.25 below parity,
although a larger amount may be appropriate considering the
particular market conditions. In the case of calls, parity is
measured by the bid in the underlying security, and in the case of
puts, parity is measured by the offer in the underlying security.
The $0.25 amount above may be increased, or the provisions of this
Interpretation may be waived, by the Exchange on a series-by-series
basis.''
    \5\ Cboe's rule change merely noted, with respect to the removal
of Cboe's parity rule, that the filing makes non-substantive changes
to the rule governing a Market-Maker's general obligations (current
Rule 8.7, in part), most of which remove redundant provisions that
are already covered under the umbrella of a Market-Maker's
obligation to engage in dealing to maintain fair and orderly
markets. No specific argument is provided with respect to removing
this provision. See Securities Exchange Act 87024 (September 19,
2019), 84 FR 50545 (September 25, 2019) (SR-CBOE-2019-059) (Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend Certain Rules Relating To Market-Makers Upon Migration to the
Trading System Used by Cboe Affiliated Exchanges).
    \6\ See Nasdaq Phlx LLC, The Nasdaq Options Market LLC and
Nasdaq BX, Inc. at Options 2, Section 4 (Obligations of Market
Makers).
    \7\ See Options 7 (Option Pricing). ISE offers lower fees and
rebates to Market Makers based on the percentage of time spent on
the National Best Bid or National Best Offer (``NBBO'') for certain
qualifying series.
    \8\ See Options 3, Section 10 (Priority of Quotes and Orders).
Primary Market Makers are offered an enhanced allocation provided
the Primary Market Maker is quoting at same price as a non-Priority
Customer Order or Market Maker quote.
    \9\ See Options 2, Section 4. ISE Market Makers must for
example: (1) Compete with other Market Makers to improve the market
in all series of options classes to which the Market Maker is
appointed; (2) make markets that, absent changed market conditions,
will be honored for the number of contracts entered into the
Exchange's System in all series of options classes to which the
Market Maker is appointed; (3) update market quotations in response
to changed market conditions in all series of options classes to
which the Market Maker is appointed; and (4) price options contracts
fairly by, among other things, bidding and offering so as to create
differences of no more than $5 between the bid and offer following
the opening rotation in an equity or index options contract. See
Options 2, Section 4(b).
    \10\ See Options 2, Section 5 (Electronic Market Maker
Obligations and Quoting Requirements). Further, Options 3, Section
8(c)(3) requires Primary Market Makers to submit a Valid Width Quote
during the Opening Process.
    \11\ See Options 3, Section 20 (Nullification and Adjustment of
Options Transactions including Obvious Errors).
    \12\ See Options 3, Section 4(b)(6).
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Bid/Ask Differentials
    The Exchange proposes to amend Options 2, Section 4(b)(4) and
Options 4A, Section 12(b)(i) to relocate text concerning bid/ask
differentials for long-term option series. Currently, Options 4,
Section 8(a) describes the bid/ask differentials for long-term options
series for equity options and exchange-traded products and Options 4A,
Section 12(b)(i) describes the bid/ask differentials for long-term
options series for indexes. Currently, the bid/ask differentials shall
not apply to any options series until the time to expiration is less
than nine (9) months for equity options and exchange-traded funds as
provided for within Options 4, Section 8(a). Currently, bid/ask
differentials shall not apply to any options series until the time to
expiration is less than twelve (12) months for index options as
provided for within Options 4A, Section 12(b)(i).
    The Exchange proposes to centralize the bid/ask differentials
within new Options 2, Section 4(b)(4)(iii) and add a sentence to both
Options 4, Section 8(a) and Options 4A, Section 12(b)(i) that cites to
Options 2, Section 4(b)(4)(iii) for information on bid/ask
differentials for the various products. The Exchange believes that this
relocation will provide Primary Market Makers and Competitive Market
Makers with centralized information regarding their bid/ask
differential requirements. The Exchange is not amending the bid/ask
differentials; the rule text is simply being relocated.
Business Continuity and Disaster Recovery Plan
    The Exchange proposes to relocate Supplementary Material .02 to
Options 2, Section 4, concerning business continuity and disaster
recovery plans, to General 2, Section 12, which is currently reserved.
The Exchange proposes to title General 2, Section 12 as ``Business
Continuity and Disaster Recovery Plan Testing Requirements for Members
Pursuant to Regulation SCI.'' The rule text is being relocated without
change. The Exchange proposes to relocate this rule text to harmonize
ISE's rules with that of Nasdaq PHLX LLC (``Phlx''), Nasdaq BX, Inc.
and The Nasdaq Stock Market LLC which all have business continuity and
disaster recovery plans located within General 2, Section 12 of their
respective rulebooks.\13\ The Exchange also proposes to reserve
Sections 7-10 and 13-22 within General 2.\14\ Harmonizing the rule
locations of the rules of the Nasdaq affiliated markets will make it
easier for market participants to review and compare the rules of each
Nasdaq market.
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    \13\ Similar rule changes will also be made for Nasdaq GEMX, LLC
and Nasdaq MRX, LLC.
    \14\ General 2, Sections 5 and 6 are currently reserved. These
sections are proposed to be deleted. The proposed text would instead
reflect General 2, Sections 5-10 are reserved.
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Options 4, Section 3
    The Exchange proposes to remove the following products from Options
4, Section 3(h): The ETFS Silver Trust, the ETFS Palladium Trust, the
ETFS Platinum Trust or the Sprott Physical Gold Trust. The Exchange no
longer lists these products and proposes to remove them the products
from its listing rules. The Exchange will file a proposal with the
Commission if it determines to list these products in the future.
    The Exchange proposes to amend Options 4, Section 3(h) by removing
the rule text at the end of the paragraph which provides, ``all of the
following conditions are met.'' Paragraph (h) would simply end with
``provided that:'' and direct market participants to subparagraphs (1)
and (2). The Exchange also proposes to capitalize ``the'' at the
beginning of Options 4, Section 3(h)(1) and remove ``; and'' at the end
of the paragraph and instead at a period so that subparagraphs (1) and
(2) are not linked, but rather read independently. Today, Options 4,
Section 3(h)(1) applies to all Exchange-Traded Fund Shares. The
Exchange proposes to clarify that Options 4, Section 3(h)(2) applies to
only international or global Exchange-Traded Fund Shares. Specifically,
the Exchange proposes to amend Options 4, Section 3(h)(2) to provide,
``Exchange-Traded Fund Shares based on international or global indexes,
or portfolios that include non-U.S. securities, shall meet the
following criteria.'' Phlx Options 4, Section 3(h) currently has
similar rule text.\15\ Proposed Options 4, Sections 3(h) generally
concerns securities deemed appropriate for options trading. The
proposed new rule text adds language stating that subparagraph (h)(2)
of Options 4, Section 3 applies to the extent the Exchange-Traded Fund
Share is based on international or global indexes, or portfolios that
include non-U.S. securities. This language is

intended to serve as a guidepost and clarify that (1) subparagraph
(h)(2) does not apply to an Exchange-Traded Fund Shares based on a U.S.
domestic index or portfolio, and (2) subparagraph (h)(2) includes
Exchange-Traded Fund Shares that track a portfolio and do not track an
index.
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    \15\ Phlx will also file to conform its rule text to the
proposed text within Options 4, Section 3(h)(2).
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    The Exchange proposes to amend Options 4, Section 3(h)(2)(A) to
remove the phrase ``for series of portfolio depositary receipts and
index fund shares based on international or global indexes,''. Today,
Options 4, Section 3(h), subparagraphs (h)(1) \16\ and (h)(v) \17\
permit the Exchange to list options on Exchange-Traded Fund Shares
based on generic listing standards for portfolio depositary receipts
and index fund shares without applying component based requirements in
subparagraphs (h)(2)(B)-(D). By removing the proposed rule text, the
Exchange would make clear that subparagraph (h)(2)(A) applies to
Exchange-Traded Fund Shares based on international or global indexes,
or portfolios that include non-U.S. securities, that are listed
pursuant to generic listing standards and comply with Options 4,
Section 3(h) and subparagraph (h)(1).
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    \16\ Subsection (h)(i) concerns passive Exchange-Traded Fund
Shares. Subsection (h)(1) provides, ``represent interests in
registered investment companies (or series thereof) organized as
open-end management investment companies, unit investment trusts or
similar entities that hold portfolios of securities and/or financial
instruments, including, but not limited to, stock index futures
contracts, options on futures, options on securities and indices,
equity caps, collars and floors, swap agreements, forward contracts,
repurchase agreements and reverse repurchase agreements (the
``Financial Instruments''), and money market instruments, including,
but not limited to, U.S. government securities and repurchase
agreements (the ``Money Market Instruments'') comprising or
otherwise based on or representing investments in broad-based
indexes or portfolios of securities and/or Financial Instruments and
Money Market Instruments (or that hold securities in one or more
other registered investment companies that themselves hold such
portfolios of securities and/or Financial Instruments and Money
Market Instruments).''
    \17\ Subsection (h)(v) concerns active Exchange-Traded Fund
Shares. Subsection (h)(v) Provides, ``represents an interest in a
registered investment company (``Investment Company'') organized as
an open-end management company or similar entity, that invests in a
portfolio of securities selected by the Investment Company's
investment adviser consistent with the Investment Company's
investment objectives and policies, which is issued in a specified
aggregate minimum number in return for a deposit of a specified
portfolio of securities and/or a cash amount with a value equal to
the next determined net asset value (``NAV''), and when aggregated
in the same specified minimum number, may be redeemed at a holder's
request, which holder will be paid a specified portfolio of
securities and/or cash with a value equal to the next determined NAV
(``Managed Fund Share'').
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    The Exchange also proposes to amend the term ``comprehensive
surveillance agreement'' within Options 4, Section 3(h)(2)(A)-(D) to
instead provide ``comprehensive surveillance sharing agreement.'' This
amendment will bring greater clarity to the term.
    Further, the Exchange proposes to add the phrase ``if not available
or applicable, the Exchange-Traded Fund's'' within Options 4, Section
3(h)(2)(B), (C), and (D) to clarify that when component securities are
not available, the portfolio of securities upon which the Exchange-
Traded Fund Share is based can be used instead. The Exchange notes that
``not available'' is intended for cases where the Exchange does not
have access to the index components, in those cases the Exchange would
look to the portfolio components. The term ``not applicable'' is
intended if the fund is active and does not track an index and only the
portfolio is available. As noted above, this rule text currently exists
within Phlx Options 4, Section 3(h).
    The Exchange also proposes to wordsmith Options 4, Section
3(h)(2)(B) to amend the phrase to provide, ``any non-U.S. component
securities of an index on which the Exchange-Traded Fund Shares are
based or if not available or applicable, the Exchange-Traded Fund's
portfolio of securities that are not subject to comprehensive
surveillance sharing agreements do not in the aggregate represent more
than 50% of the weight of the index or portfolio;''. The Exchange
believes that the revised wording will bring greater clarity to the
rule text.
    Similarly, the Exchange proposes to wordsmith Options 4, Section
3(h)(2)(C) and (D) to relocate the phrase ``on which the Exchange-
Traded Fund Shares are based'' and add ``or portfolio'' to bring
greater clarity to the rule text by conforming the rule text of (C) and
(D) to the language within (B).
Technical Amendments
    The Exchange proposes a non-substantive technical amendment to
Options 4, Section 3(C)(2)(A)(ii) to correct a typographical error by
changing a ``than'' to a ``that''. The Exchange proposes a non-
substantive technical amendment to Options 4, Section 3(g)(2) to
capitalize ``section''. The Exchange proposes a non-substantive
technical amendment to Options 4, Section 3(h)(1) to change ``In'' to
``in''.
    Finally, the Exchange proposes to add new Options 4C and mark it as
reserved. Phlx added a 4C to its Rulebook and this rule change will
harmonize ISE's Rulebook structure to Phlx's Rulebook Structure.\18\
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    \18\ See Securities Exchange Act Release No. 91488 (April 6,
2021), 86 FR 19037 (April 12, 2021) (SR-Phlx-2021-14) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
the Phlx Options Rules at Options 4 Under the Options 4 Title in the
Exchanges Rulebooks Shell Structure).
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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.
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    \19\ 15 U.S.C. 78f(b).
    \20\ 15 U.S.C. 78f(b)(5).
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Options 2, Section 4(a)
    The Exchange's proposal to remove certain rule text from Options 2,
Section 4(a) that refrains Market Makers from purchasing a call option
or a put option at a price more than $0.25 below parity is consistent
with the Act. The Exchange desires to remove this restriction on Market
Makers which does not exist on Cboe or other Nasdaq affiliated
markets.\21\ The proposed rule text is currently waived on ISE pursuant
to Options 2, Section 4(a)(2). The Exchange believes that this market
maker provision is no longer necessary. Today, ISE incentivizes Market
Makers through pricing \22\ and allocation \23\ to quote tightly in
their assigned options series. Primary Market Makers and Competitive
Market Makers also have other obligations with respect to market making
\24\ in addition to other quoting obligations \25\ that they must abide
by when quoting on ISE. Also, since the adoption of the rule, the
Exchange has adopted the obvious error rule \26\ which permits the
Exchange to review a transaction as potentially erroneous based on a
theoretical price. Also, ISE orders are subject to trade-through
compliance, thereby limiting the prices at which orders may
execute.\27\ Market Makers are relied upon to provide liquidity on ISE,
which benefits other Members who have an opportunity to interact with
the order flow. The Exchange believes that the obligation to refrain
from purchasing a call option or

a put option at a price more than $0.25 below parity places yet another
obligation on ISE Market Makers that is not required on Cboe or other
Nasdaq markets. The Exchange believes that this additional obligation
is not necessary to maintain fair and orderly markets and notes the
Exchange has waived this obligation and the removal of this provision
would remove an impediment to and perfect the mechanism of a free and
open market and a national market system.
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    \21\ See supra note 5.
    \22\ See supra note 7.
    \23\ See supra note 8.
    \24\ See supra note 9.
    \25\ See supra note 10.
    \26\ See supra note 11.
    \27\ See supra note 12.
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Bid/Ask Differentials
    The Exchange's proposal to amend Options 2, Section 4(b)(4) and
Options 4A, Section 12(b)(i) to relocate text concerning bid/ask
differentials for long-term option series is consistent with the Act.
The Exchange's proposal will centralize the bid/ask differentials
within new Options 2, Section 4(b)(4)(iii) and add a sentence to both
Options 4, Section 8(a) and Options 4A, Section 12(b)(i) that cites to
Options 2, Section 4(b)(4)(iii) for information on bid/ask
differentials for the various products. The Exchange is not amending
the bid/ask differentials; the rule text is simply being relocated. The
Exchange believes that this relocation will provide Primary Market
Makers and Competitive Market Makers with centralized information
regarding their bid/ask differential requirements.
Business Continuity and Disaster Recovery Plan
    The Exchange's proposal to relocate Supplementary Material .02 to
Options 2, Section 4, concerning business continuity and disaster
recovery plans, to General 2, Section 12, which is currently reserved,
is consistent with the Act. This rule text will harmonize ISE's rules
with that of Phlx, Nasdaq BX, Inc. and The Nasdaq Stock Market LLC
which all have business continuity and disaster recovery plans located
within General 2, Section 12 of their respective rulebooks.\28\
Harmonizing the rule locations of the rules of the Nasdaq affiliated
markets will make it easier for market participants to review and
compare the rules of each Nasdaq market. The Exchange also proposes to
reserve Sections 7-10 and 13-22 within General 2. These changes are
non-substantive as the rule text is not being amended.
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    \28\ See supra note 13.
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Options 4, Section 3
    The Exchange's proposal to remove the following products from
Options 4, Section 3(h): The ETFS Silver Trust, the ETFS Palladium
Trust, the ETFS Platinum Trust or the Sprott Physical Gold Trust is
consistent with the Act because the Exchange no longer lists these
products and proposes to remove them the products from its listing
rules. The Exchange will file a proposal with the Commission if it
determines to list these products in the future.
    The Exchange's proposal to amend Options 4, Section 3(h) by
removing the rule text at the end of the paragraph which provides,
``all of the following conditions are met,'' and creating separate
paragraphs for Options 4, Section 3(h)(1) and (2) is consistent with
the Act. These amendments will de-link these subparagraphs so they are
read independently. Today, Options 4, Section 3(h)(1) applies to all
Exchange-Traded Fund Shares. The Exchange's proposal to clarify that
Options 4, Section 3(h)(2) applies to only international or global
indexes or portfolios that include non-U.S. securities will bring
greater clarity to the qualification standards for listing options on
Exchange-Traded Fund Shares. Phlx Options 4, Section 3(h) currently has
similar rule text.\29\ Proposed Options 4, Sections 3(h) generally
concerns securities deemed appropriate for options trading. The
proposed new rule text adds language stating that subparagraph (h)(2)
of Options 4, Section 3 applies to the extent the Exchange-Traded Fund
Share is based on international or global indexes or portfolios that
include non-U.S. securities. This language is intended to serve as a
guidepost and clarify that (1) subparagraph (h)(2) does not apply to an
Exchange-Traded Fund Shares based on a U.S. domestic index or
portfolio, and (2) subparagraph (h)(2) includes Exchange-Traded Fund
Shares that track a portfolio and do not track an index.
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    \29\ Phlx will also file to conform its rule text to the
proposed text within Options 4, Section 3(h)(2).
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    The Exchange's proposal to amend Options 4, Section 3(h)(2)(A) to
remove the phrase ``for series of portfolio depositary receipts and
index fund shares based on international or global indexes,'' is
consistent with the Act. Today, Options 4, Section 3(h), subparagraphs
(h)(1) \30\ and (h)(v) \31\ permit the Exchange to list options on
Exchange-Traded Fund Shares based on generic listing standards for
portfolio depositary receipts and index fund shares without applying
component based requirements in subparagraphs (h)(2)(B)-(D). By
removing the proposed rule text, the Exchange would make clear that
subparagraph (h)(2)(A) applies to Exchange-Traded Fund Shares based on
international or global indexes, or portfolios that include non-U.S.
securities, that are listed pursuant to generic listing standards and
comply with Options 4, Section 3(h) and subparagraph (h)(1).
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    \30\ See supra note 16.
    \31\ See supra note 17.
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    The Exchange's proposal to amend the term ``comprehensive
surveillance agreement'' within Options 4, Section 3(h)(2) (A)-(D) to
instead provide ``comprehensive surveillance sharing agreement'' is
consistent with the Act as the amendment will bring greater clarity to
the term.
    The Exchange's proposal to add the phrase ``if not available or
applicable, the Exchange-Traded Fund's'' to Options 4, Section
3(h)(2)(B), (C), and (D) is consistent with the Act as it will clarify
that when component securities are not available, the portfolio of
securities upon which the Exchange-Traded Fund Share is based can be
used instead. This rule text currently exists within Phlx Options 4,
Section 3(h).
    The Exchange's proposal to amend and relocate the rule text within
Options 4, Section 3(h)(2)(B), (C), and (D) will bring greater clarity
to the current rule text by explicitly providing that the index being
referenced is the one on which the Exchange-Traded Fund Shares is
based. Also, adding ``or portfolio'' to Options 4, Section 3(h)(2)(C),
and (D) will bring greater clarity to the rule text by conforming the
rule text of (C) and (D) to the language within (B).
Technical Amendments
    The Exchange's proposal to make certain non-substantive technical
amendment to Options 4, Section 3(C)(2)(A)(ii), Options 4, Section
3(g)(2) and Options 4, Section 3(h)(1) are consistent with the Act.
Also, adding Options 4C and reserving it within the rules is a non-
substantive amendment which will harmonize ISE's Rulebook structure to
Phlx's Rulebook Structure.\32\
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    \32\ See supra note 18.
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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 burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.
Options 2, Section 4(a)
    The Exchange's proposal to remove certain rule text from Options 2,
Section 4(a) that refrains Market Makers from purchasing a call option
or a put option at a price more than $0.25 below parity

does not impose an undue burden on competition. The Exchange desires to
remove this restriction on Market Makers which does not exist on Cboe
or other Nasdaq affiliated markets.\33\ The proposed rule text is
currently waived on ISE pursuant to Options 2, Section 4(a)(2). Market
Makers are relied upon to provide liquidity on ISE, which benefits
other Members who have an opportunity to interact with the order flow.
The Exchange believes that the obligation to refrain from purchasing a
call option or a put option at a price more than $0.25 below parity
places yet another obligation on ISE Market Makers that is not required
on Cboe or other Nasdaq markets. The Exchange believes that this
additional obligation is not necessary to maintain fair and orderly
markets and notes the Exchange has waived this obligation.
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    \33\ See supra note 5.
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Bid/Ask Differentials
    The Exchange's proposal to amend Options 2, Section 4(b)(4) and
Options 4A, Section 12(b)(i) to relocate text concerning bid/ask
differentials for long-term option series does not impose an undue
burden on competition. The Exchange's proposal will centralize the bid/
ask differentials within new Options 2, Section 4(b)(4)(iii) and add a
sentence to both Options 4, Section 8(a) and Options 4A, Section
12(b)(i) that cites to Options 2, Section 4(b)(4)(iii) for information
on bid/ask differentials for the various products. The Exchange
believes that this relocation will provide Primary Market Makers and
Competitive Market Makers with centralized information regarding their
bid/ask differential requirements.
Business Continuity and Disaster Recovery Plan
    The Exchange's proposal to relocate Supplementary Material .02 to
Options 2, Section 4, concerning business continuity and disaster
recovery plans, to General 2, Section 12, which is currently reserved,
does not impose an undue burden on competition. This rule text will
harmonize ISE's rules with that of Phlx, Nasdaq BX, Inc. and The Nasdaq
Stock Market LLC which all have business continuity and disaster
recovery plans located within General 2, Section 12 of their respective
rulebooks.\34\ Harmonizing the rule locations of the rules of the
Nasdaq affiliated markets will make it easier for market participants
to review and compare the rules of each Nasdaq market. This change is
non-substantive as the rule text is not being amended.
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    \34\ See supra note 13.
---------------------------------------------------------------------------

Options 4, Section 3
    The Exchange's proposal to remove the following products from
Options 4, Section 3(h): The ETFS Silver Trust, the ETFS Palladium
Trust, the ETFS Platinum Trust or the Sprott Physical Gold Trust does
not impose an undue burden on competition because the Exchange no
longer lists these products and proposes to remove them the products
from its listing rules. No Member will be permitted to trade these
products on ISE.
    The Exchange's proposal to amend Options 4, Section 3(h) by
removing the rule text at the end of the paragraph which provides,
``all of the following conditions are met,'' and creating separate
paragraphs for Options 4, Section 3(h)(1) and (2) does not impose an
undue burden on competition. These amendments will de-link these
subparagraphs so they are read independently. Today, Options 4, Section
3(h)(1) applies to all Exchange-Traded Fund Shares. The Exchange's
proposal to clarify that Options 4, Section 3(h)(2) applies to only
international or global Exchange-Traded Fund Shares that include non-
U.S. securities will bring greater clarity to the qualification
standards for listing options on Exchange-Traded Fund Shares.
Specifically, this language is intended to serve as a guidepost and
clarify that (1) subparagraph (h)(2) does not apply to an Exchange-
Traded Fund Shares based on a U.S. domestic index or portfolio, and (2)
subparagraph (h)(2) includes Exchange-Traded Fund Shares that track a
portfolio and do not track an index. This amendment will uniformly
apply the criteria within Options 4, Section 3 when it lists options
products on ISE.
    The Exchange's proposal to amend Options 4, Section 3(h)(2)(A) to
remove the phrase ``for series of portfolio depositary receipts and
index fund shares based on international or global indexes,'' does not
impose an undue burden on competition. Today, Options 4, Section 3(h),
subparagraphs (h)(1) \35\ and (h)(v) \36\ permit the Exchange to list
options on Exchange-Traded Fund Shares based on generic listing
standards for portfolio depositary receipts and index fund shares
without applying component based requirements in subparagraphs
(h)(2)(B)-(D). By removing the proposed rule text, the Exchange would
make clear that subparagraph (h)(2)(A) applies to Exchange-Traded Fund
Shares based on international or global indexes, or portfolios that
include non-U.S. securities, that are listed pursuant to generic
listing standards and comply with Options 4, Section 3(h) and
subparagraph (h)(1). This amendment will uniformly apply the criteria
within Options 4, Section 3 when it lists options products on ISE.
---------------------------------------------------------------------------

    \35\ See supra note 16.
    \36\ See supra note 17.
---------------------------------------------------------------------------

    The Exchange's proposal to amend the term ``comprehensive
surveillance agreement'' within Options 4, Section 3(h)(2) (A)-(D) to
instead provide ``comprehensive surveillance sharing agreement'' does
not impose an undue burden on competition as the amendment will bring
greater clarity to the term.
    The Exchange's proposal to add the phrase ``if not available or
applicable, the Exchange-Traded Fund's'' to Options 4, Section
3(h)(2)(B), (C), and (D) does not impose an undue burden on competition
as it will clarify that when component securities are not available,
the portfolio of securities upon which the Exchange-Traded Fund Share
is based can be used instead.
    The Exchange's proposal to amend and relocate the rule text within
Options 4, Section 3(h)(2)(B), (C), and (D) will bring greater clarity
to the current rule text by explicitly providing that the index being
referenced is the one on which the Exchange-Traded Fund Shares is
based. Also, adding ``or portfolio'' to Options 4, Section 3(h)(2)(C),
and (D) will bring greater clarity to the rule text by conforming the
rule text of (C) and (D) to the language within (B).
Technical Amendments
    The Exchange's proposal to make certain non-substantive technical
amendment to Options 4, Section 3(C)(2)(A)(ii), Options 4, Section
3(g)(2) and Options 4, Section 3(h)(1) does no impose an undue burden
on competition. Also, adding Options 4C and reserving it within the
rules is a non-substantive amendment which will harmonize ISE's
Rulebook structure to Phlx's Rulebook Structure.\37\
---------------------------------------------------------------------------

    \37\ See supra note 18.
---------------------------------------------------------------------------

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 Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A) of the Act \38\ and Rule 19b-4(f)(6) \39\ thereunder.
Because the foregoing proposed rule change does not: (i) Significantly
affect the protection of investors or the public interest; (ii) impose
any significant burden on competition; and (iii) become operative for
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, it has become effective pursuant to
Section 19(b)(3)(A) of the Act \40\ and Rule 19b-4(f)(6) \41\
thereunder.
---------------------------------------------------------------------------

    \38\ 15 U.S.C. 78(b)(3)(A).
    \39\ 17 CFR 240.19b-4(f)(6).
    \40\ 15 U.S.C. 78s(b)(3)(A).
    \41\ 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 the
Exchange's 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.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \42\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\43\ the Commission
may designate a shorter time if such action is consistent with
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposed
rule change may become operative upon filing. The Exchange's proposal
does not raise any new or novel issues. Therefore, the Commission
believes that waving the 30-day operative delay is consistent with the
protection of investors and the public interest. Accordingly, the
Commission designates the proposed rule change to be operative on upon
filing.\44\
---------------------------------------------------------------------------

    \42\ 17 CFR 240.19b-4(f)(6).
    \43\ 17 CFR 240.19b-4(f)(6).
    \44\ For purposes only of waiving the 30-day operative delay,
the Commission also has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

    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 will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
    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 \45\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\46\
---------------------------------------------------------------------------

    \45\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \46\ 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-2021-14 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-2021-14. 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-2021-14 and should be submitted on
or before July 19, 2021.
---------------------------------------------------------------------------

    \47\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\47\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-13654 Filed 6-25-21; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 77, Number 246 (Friday, December 21, 2012)]
[Notices]
[Pages 75686-75689]
[FR Doc No: 2012-30793]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68450; File No. SR-BYX-2012-024]

Self-Regulatory Organizations; BATS Y-Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Related to
Fees for Use of BATS Y-Exchange, Inc.

December 17, 2012.
    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 December 6, 2012, BATS Y-Exchange, Inc. (the ``Exchange'' or
``BYX'') 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
Exchange has designated the proposed rule change as one establishing or
changing a member due, fee, or other charge imposed by the Exchange
under Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2)
thereunder,\4\ which renders the proposed rule change effective upon
filing with the Commission. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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

    The Exchange proposes to amend the fee schedule applicable to
Members \5\ and non-members of the Exchange pursuant to BYX Rules
15.1(a) and (c). Changes to the fee schedule pursuant to this proposal
will be effective upon filing.
---------------------------------------------------------------------------

    \5\ A Member is any registered broker or dealer that has been
admitted to membership in the Exchange.
---------------------------------------------------------------------------

    The text of the proposed rule change is available at the Exchange's
Web site at http://www.batstrading.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 parts of such
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    On August 14, 2012, the Exchange filed with the Commission a
proposed rule change to establish on a one-year pilot basis the Retail
Price Improvement (``RPI'') Program (the ``Program'').\6\ The Program
seeks to establish a venue for the execution of retail orders with
greater price competition and transparency than existing execution
arrangements. The Exchange filed an amendment to the proposal on
November 13, 2012, proposing to make various minor amendments to the
Proposal, including an amendment to limit the Program to a group of up
to 25 securities for the first 90 days of the pilot period, and to
gradually expand the program on a monthly basis for the remainder of
the pilot period.
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 67734 (August 27,
2012), 77 FR 53242 (SR-BYX-2012-019) (the ``Proposal'').
---------------------------------------------------------------------------

    The Program establishes a new class of market participants (Retail
Member Organizations) and two new order types (Retail Orders and Retail
Price Improvement Orders). Retail Member Organizations will submit
Retail Orders to the Exchange. All Exchange Users \7\ will be permitted
to provide potential price improvement for Retail Orders in the form of
non-displayed interest that is better than the national best bid that
is a Protected Quotation (``Protected NBB'') or the national best offer
that is a Protected Quotation (``Protected NBO'', and together with the
Protected NBB, the ``Protected NBBO'').\8\ Such price improving
interest can be entered either in the form of Retail Price Improvement
Orders (or ``RPI Orders'') or as other non-displayed interest.
---------------------------------------------------------------------------

    \7\ A ``User'' is defined in BYX Rule 1.5(cc) as any member or
sponsored participant of the Exchange who is authorized to obtain
access to the System.
    \8\ The term Protected Quotation is defined in BYX Rule 1.5(t)
and has the same meaning as is set forth in Regulation NMS Rule
600(b)(58). The terms Protected NBB and Protected NBO are defined in
BYX Rule 1.5(s). The Protected NBB is the best-priced protected bid
and the Protected NBO is the best-priced protected offer. Generally,
the Protected NBB and Protected NBO and the national best bid
(``NBB'') and national best offer (``NBO'', together with the NBB,
the ``NBBO'') will be the same. However, a market center is not
required to route to the NBB or NBO if that market center is subject
to an exception under Regulation NMS Rule 611(b)(1) or if such NBB
or NBO is otherwise not available for an automatic execution. In
such case, the Protected NBB or Protected NBO would be the best-
priced protected bid or offer to which a market center must route
interest pursuant to Regulation NMS Rule 611.
---------------------------------------------------------------------------

    The Commission recently approved the Program's operation on a pilot
basis.\9\ Accordingly, the Exchange proposes to modify its fee schedule
effective December 6, 2012, in order to adopt pricing for the Program,
which will be applicable to the first set of securities selected by the
Exchange for inclusion in the Program.\10\
---------------------------------------------------------------------------

    \9\ See Securities Exchange Act Release No. 68303 (November 27,
2012), 77 FR 71652 (December 3, 2012) (SR-BYX-2012-019).
    \10\ The Exchange currently plans to implement the Program on
December 17, 2012. Although the Program is not yet operative, the
Exchange is adopting the applicable fees in anticipation of the
Program's operation.
---------------------------------------------------------------------------

    The Exchange proposes to provide a rebate to Retail Member
Organizations for executions of their Retail Orders and to charge Users
a fee for executions of their orders against Retail Orders. Further,
the Exchange proposes to bifurcate into ``Group 1'' and ``Group 2'' the
original 20 securities selected by the Exchange to be included in the
Program, and to differentiate rebates and fees between such Groups.
    Group 1, as proposed, will initially include 10 securities, as
follows: Apple Inc. (AAPL), SPDR S&P ETF Trust (SPY), Facebook Inc.
(FB), Direxion Daily Financial Bull 3X Shares (FAS), Direxion Daily
Financial Bear 3X Shares (FAZ), iShares Russell 2000 Index (IWM),
Citigroup Inc. (C), General Electric Company (GE), Google Inc. (GOOG),
and SPDR Gold Trust (GLD) (``Group 1 Securities''). The Exchange
proposes to provide a rebate of $0.0025 per share for a Retail Order
that removes liquidity from the BYX Exchange order book in an RPI Group
1 Security. Similarly, the Exchange proposes to charge $0.0025 per
share for any Retail Price Improving Order or non-displayed order that
adds liquidity to the BYX Exchange order book in an RPI Group 1
Security and is removed by a Retail Order.
    Group 2, as proposed, will initially include 10 securities, as
follows: Sirius XM Radio Inc. (SIRI), Bank of America Corp. (BAC),
Nokia Corporation-ADR (NOK), Sprint Nextel Corporation (S), Micron
Technology, Inc. (MU), Ford Motor Company (F), Advanced Micro Devices,
Inc. (AMD), JPMorgan Chase & Co. (JPM), Hewlett-Packard Company (HPQ),
and Financial Select Sector SPDR (XLF) (``Group 2 Securities''). The
Exchange proposes to provide a rebate of $0.0010 per share for a Retail
Order that removes liquidity from the BYX Exchange order book in an RPI
Group 2 Security. Similarly, the Exchange proposes to charge $0.0010
per share for any Retail Price Improving Order or non-displayed order
that adds liquidity to the BYX Exchange order book in an RPI Group 2
Security and is removed by a Retail Order.
    As proposed, the rebates for Retail Orders described above will not
apply to Type 2 Retail Orders that remove displayed liquidity from the
BYX Exchange order book. Instead, such Retail Orders, when removing
displayed liquidity, will receive the standard rebate of $0.0002 per
share for orders that remove liquidity. Similarly, a liquidity provider
that enters a displayed order that is removed by a Retail Order will be
charged the standard fee for adding displayed liquidity (either $0.0003
per share or $0.0002 per share depending on whether such liquidity
provider qualifies for tiered pricing incentives).
    The Exchange is proposing the higher remove rebate and fee to add
liquidity for Group 1 Securities because the Exchange believes that,
while both Group 1 and Group 2 Securities attract heavy retail investor
interest, liquidity providers in the over-the-counter market are
generally willing to pay retail brokers higher fees for retail orders
in Group 1 Securities. The Exchange's rebate for Group 1 Securities is
designed to compete with such higher fees.
    The Exchange currently charges a fee of $0.0010 per share to add
non-displayed liquidity to the BYX order book. As explained in the
Proposal, the Exchange proposes to execute incoming Retail Orders
against all available contra-side interest that will provide price
improvement to the Retail Order, including non-displayed orders other
than RPI Orders. In the event non-displayed interest other than an RPI
Order interacts with a Retail Order, the Exchange proposes to charge
the User that entered such non-displayed interest the same fee as is
imposed for an RPI Order execution. As set forth above, the Exchange
proposes to charge a fee of $0.0025 per share for any Retail Price
Improving Order or non-displayed order that adds liquidity to the BYX
Exchange order book in an RPI Group 1 Security and is removed by a
Retail Order. Accordingly, the Exchange proposes

language to the existing text related to liquidity fees to make clear
that any non-displayed order removed by a Retail Order will pay the
applicable fee under the Retail Pricing Improvement program for such
execution.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder that are applicable to a national securities exchange, and,
in particular, with the requirements of Section 6 of the Act.\11\
Specifically, the Exchange believes that the proposed rule change is
consistent with Sections 6(b)(4) and (b)(5) of the Act,\12\ in that it
provides for the equitable allocation of reasonable dues, fees and
other charges among issuers, and it does not unfairly discriminate
between customers, issuers, brokers or dealers.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78f.
    \12\ 15 U.S.C. 78f(b)(4) and (b)(5).
---------------------------------------------------------------------------

    The Program is intended to increase competition among execution
venues, encourage additional liquidity, and offer the potential for
price improvement to retail investors. The Exchange notes that a
significant percentage of the orders of individual investors are
executed over-the-counter.\13\ The Exchange believes that it is
appropriate to create a financial incentive to bring more retail order
flow to a public market where it may be subject to greater competition
from multiple liquidity providers.
---------------------------------------------------------------------------

    \13\ See Concept Release on Equity Market Structure, Securities
Exchange Act Release No. 61358 (January 14, 2010), 75 FR 3594
(January 21, 2010) (noting that dark pools and internalizing broker-
dealers executed approximately 25.4% of share volume in September
2009). See also Mary L. Schapiro, Strengthening Our Equity Market
Structure (Speech at the Economic Club of New York, Sept. 7, 2010)
(available on the Commission's Web site). In her speech, Chairman
Schapiro noted that nearly 30 percent of volume in U.S.-listed
equities was executed in venues that do not display their liquidity
or make it generally available to the public and the percentage was
increasing nearly every month.
---------------------------------------------------------------------------

    The Exchange understands that Section 6(b)(5) of the Act \14\
prohibits an exchange from establishing rules that treat market
participants in an unfairly discriminatory manner. However, Section
6(b)(5) of the Act does not prohibit exchange members or other broker-
dealers from discriminating, so long as their activities are otherwise
consistent with the federal securities laws. Nor does Section 6(b)(5)
of the Act require exchanges to preclude discrimination by broker-
dealers. Broker-dealers commonly differentiate between customers based
on the nature and profitability of their business. The differentiation
established by the Exchange in connection with the Program is not
designed to permit unfair discrimination, but instead to promote a
competitive process around retail executions such that retail investors
would receive better prices than they currently do through bilateral
internalization arrangements.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rebates for Retail Orders
are fair and equitable in that they are designed to compete with
internalization arrangements established by executing broker-dealers.
The Exchange further believes that differentiation between the two
types of securities (Groups 1 and 2) is fair and equitable and not
unreasonably discriminatory because this differentiation is based on
the Exchange's belief as to relative economic value of order flow,
namely, that order flow in Group 1 Securities is more valuable, and in
turn, is rewarded with better economic arrangements by broker-dealers,
than is order flow in Group 2 Securities.
    As set forth above, in addition to establishing pricing for orders
particularly designated to participate in the Program, namely Retail
Orders and RPI Orders, the proposal will impact non-displayed orders
that interact with Retail Orders in Group 1 Securities in that such
orders will be charged a higher fee than they do today. The Exchange
believes that the proposal to treat non-displayed orders differently
depending on the parties with whom they interact is consistent with
Section 6(b)(5) of the Act,\15\ which requires that the rules of an
exchange are not designed to permit unfair discrimination. The Exchange
believes that such a differential pricing structure for non-displayed
orders is not unfairly discriminatory. As stated in the NYSE RLP
Approval Order, the ``Commission has previously recognized that the
markets generally distinguish between individual retail investors,
whose orders are considered desirable by liquidity providers because
such retail investors are presumed on average to be less informed about
short-term price movements, and professional traders, whose orders are
presumed on average to be more informed.'' \16\ The Exchange's proposed
differential pricing structure for non-displayed orders recognizes that
not only are liquidity providers willing to provide better prices to
retail investors, they are also willing to pay higher fees to trade
certain securities with retail investors and, hence, raises
substantively identical policy considerations as the rules approved by
the Commission in the NYSE RLP Approval Order, which account for the
difference of assumed information and sophistication level between
different trading participants by providing Retail Orders access to
better execution prices as well as more favorable access fees.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78f(b)(5).
    \16\ See Securities Exchange Act Release No. 67347 (July 3,
2012), 77 FR 40673, at 40679-40680 (July 10, 2012) (SR-NYSE-2011-55;
SR-NYSEAmex-2011-84) (citing Concept Release on Equity Market
Structure and approval of an options exchange program related to
price improvement for retail orders). Certain options exchanges
deploy this same rationale today through pricing structures that
vary for a trading participant based on the capacity of the contra-
side trading participant. See, e.g., Securities Exchange Act Release
No. 63632 (January 3, 2011), 76 FR 1205 (January 7, 2011) (SR-BATS-
2010-038) (notice of filing and immediate effectiveness of proposal
to modify fees for BATS Options, including liquidity rebates that
are variable depending on the capacity of the contra-party to the
transaction; see also Securities Exchange Act Release No. 67171
(June 8, 2012), 77 FR 35732 (June 14, 2012) (SR-NASDAQ-2012-068)
(notice of filing and immediate effectiveness of proposal to modify
fees for the NASDAQ Options Market, including certain fees and
rebates that are variable depending on the capacity of the contra-
party to the transaction).
---------------------------------------------------------------------------

    Finally, as set forth above, the rebates for Retail Orders
described above will not apply to Type 2 Retail Orders that remove
displayed liquidity from the BYX Exchange order book. Instead, such
Retail Orders, when removing displayed liquidity, will receive the
standard rebate of $0.0002 per share for orders that remove liquidity.
Type 2 Retail Orders under the Program are designated by the entering
Member as willing to remove all available liquidity, after receiving
any available price improving liquidity, including removing the
Exchange's displayed best bid or offer. The Exchange believes that Type
2 Retail Orders that remove displayed liquidity should receive the same
pricing as any other order that removes displayed liquidity from the
Exchange and that applying its existing pricing structure for any
executions of Retail Orders against displayed quotations is fair and
equitable and not unreasonably discriminatory.

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.

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

    No written comments were solicited or received.

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

    Pursuant to Section 19(b)(3)(A)(ii) of the Act \17\ and Rule 19b-
4(f)(2) thereunder,\18\ the Exchange has designated this proposal as
establishing or changing a due, fee, or other charge applicable to the
Exchange's Members and non-members, which renders the proposed rule
change effective upon filing.
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \18\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    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-BYX-2012-024 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-BYX-2012-024. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549-1090, 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 offices of BYX.
All comments received will be posted without change; the Commission
does not edit personal identifying information from submissions. You
should submit only information that you wish to make available
publicly. All submissions should refer to File Number SR-BYX-2012-024,
and should be submitted on or before January 11, 2013.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
---------------------------------------------------------------------------

    \19\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-30793 Filed 12-20-12; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 78, Number 110 (Friday, June 7, 2013)]
[Notices]
[Page 34364]
[FR Doc No: 2013-13584]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings 1

    Take notice that the Commission received the following electric
rate filings:

    Docket Numbers: ER12-2554-003.
    Applicants: Transource Missouri, LLC.
    Description: Transource Missouri Compliance Filing to be effective
10/30/2012.
    Filed Date: 5/30/13.
    Accession Number: 20130530-5084.
    Comments Due: 5 p.m. ET 6/20/13.

    Docket Numbers: ER13-1249-002.
    Applicants: Myotis Power Marketing LLC.
    Description: Myotis Power Marketing LLC MBR Tariff to be effective
6/1/2013.
    Filed Date: 5/29/13.
    Accession Number: 20130529-5146.
    Comments Due: 5 p.m. ET 6/19/13.

    Docket Numbers: ER13-1579-000.
    Applicants: Wisconsin Electric Power Company.
    Description: FERC Electric Rate Schedule 500 to be effective 6/1/
2013.
    Filed Date: 5/29/13.
    Accession Number: 20130529-5152.
    Comments Due: 5 p.m. ET 6/19/13.

    Docket Numbers: ER13-1580-000.
    Applicants: PJM Interconnection, L.L.C.
    Description: Original Service Agreement No. 3564--Queue Position
Y2-099 to be effective 4/30/2013.
    Filed Date: 5/29/13.
    Accession Number: 20130529-5153.
    Comments Due: 5 p.m. ET 6/19/13.

    Docket Numbers: ER13-1581-000.
    Applicants: Cleco Power LLC.
    Description: Amendment to RS35/RS36 for Acadia Pipeline to be
effective 5/30/2013.
    Filed Date: 5/30/13.
    Accession Number: 20130530-5000.
    Comments Due: 5 p.m. ET 6/20/13.

    Docket Numbers: ER13-1582-000.
    Applicants: Southern California Edison Company.
    Description: Amended SGIA Sunshine Gas Producers LLC to be
effective 5/31/2013.
    Filed Date: 5/30/13.
    Accession Number: 20130530-5003.
    Comments Due: 5 p.m. ET 6/20/13.

    Docket Numbers: ER13-1583-000.
    Applicants: DATC Path 15, LLC.
    Description: Notice of Succession to be effective 4/30/2013.
    Filed Date: 5/30/13.
    Accession Number: 20130530-5032.
    Comments Due: 5 p.m. ET 6/20/13.

    Docket Numbers: ER13-1584-000.
    Applicants: Southwest Power Pool, Inc.
    Description: Revisions to Attachment AD--SPA 2012 Amendatory
Agreement to be effective 5/1/2013.
    Filed Date: 5/30/13.
    Accession Number: 20130530-5046.
    Comments Due: 5 p.m. ET 6/20/13.

    Docket Numbers: ER13-1585-000.
    Applicants: Longfellow Wind, LLC.
    Description: Longfellow Wind, LLC submits Application for Market-
Based Rate Authorization to be effective 7/30/2013.
    Filed Date: 5/30/13.
    Accession Number: 20130530-5108.
    Comments Due: 5 p.m. ET 6/20/13.

    Docket Numbers: ER13-1586-000.
    Applicants: TGP Energy Management, LLC.
    Description: TGP Energy Management, LLC submits MBR Application to
be effective 7/1/2013.
    Filed Date: 5/30/13.
    Accession Number: 20130530-5110.
    Comments Due: 5 p.m. ET 6/20/13.

    Take notice that the Commission received the following electric
securities filings:

    Docket Numbers: ES13-27-000.
    Applicants: The United Illuminating Company.
    Description: Application for Securities Issuance of The United
Illuminating Company.
    Filed Date: 5/30/13.
    Accession Number: 20130530-5106.
    Comments Due: 5 p.m. ET 6/20/13.

    The filings are accessible in the Commission's eLibrary system by
clicking on the links or querying the docket number.
    Any person desiring to intervene or protest in any of the above
proceedings must file in accordance with Rules 211 and 214 of the
Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00
p.m. Eastern time on the specified comment date. Protests may be
considered, but intervention is necessary to become a party to the
proceeding.
    eFiling is encouraged. More detailed information relating to filing
requirements, interventions, protests, service, and qualifying
facilities filings can be found at: http://www.ferc.gov/docs-filing/efiling/filing-req.pdf. For other information, call<PHONE_NUMBER>
(toll free). For TTY, call<PHONE_NUMBER>.

    Dated: May 30, 2013.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2013-13584 Filed 6-6-13; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 81, Number 144 (Wednesday, July 27, 2016)]
[Notices]
[Page 49237]
[FR Doc No: 2016-17755]

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

[Internal Agency Docket No. FEMA-4273-DR; Docket ID FEMA-2016-0001]

West Virginia; Amendment No. 6 to Notice of a Major Disaster
Declaration

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: This notice amends the notice of a major disaster declaration
for the State of West Virginia (FEMA-4273-DR), dated June 25, 2016, and
related determinations.

DATES: Effective on July 13, 2016.

FOR FURTHER INFORMATION CONTACT: Dean Webster, 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 West Virginia is hereby amended to include the
following areas among those areas determined to have been adversely
affected by the event declared a major disaster by the President in his
declaration of June 25, 2016.

    Braxton, Gilmer, Lewis, Randolph, Upshur, and Wayne Counties for
Public Assistance. Lincoln County for Public Assistance [Categories
A and C-G] (already designated for Individual Assistance and
emergency protective measures [Category B], including direct federal
assistance, under the Public Assistance program).
    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. 2016-17755 Filed 7-26-16; 8:45 am]
 BILLING CODE 9111-23-P


[Federal Register Volume 79, Number 24 (Wednesday, February 5, 2014)]
[Notices]
[Page 6985]
[FR Doc No: 2014-02338]

=======================================================================
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DEPARTMENT OF TRANSPORTATION

Connected Vehicle Reference Implementation Architecture Workshop;
Notice of Public Meeting

AGENCY: ITS Joint Program Office, Office of the Assistant Secretary for
Research and Technology, U.S. Department of Transportation.

ACTION: Notice.

-----------------------------------------------------------------------

    The U.S. Department of Transportation (USDOT) Intelligent
Transportation System Joint Program Office (ITS JPO) will host a free
Connected Vehicle Reference Implementation Architecture (CVRIA) public
workshop meeting to present and seek input on candidate Connected
Vehicle (CV) interfaces for standardization. The public meeting will
take place February 19, 2014, 8:30 a.m.-5:00 p.m. PST and February 20,
2014, 8:30 a.m.-4:00 p.m. PST at the Holiday Inn Golden Gateway Hotel,
1500 Van Ness Ave, San Francisco, California 94109.
    To register for the CVRIA Workshop, please visit www.itsa.org/cvriaregistration.
    The workshop is designed to solicit feedback from stakeholders who
will be involved with the development, implementation, or operation of
CV technologies and applications. The results of an initial analysis
will be presented and feedback sought during this public workshop. A
preliminary draft plan will be provided to registrants before the
workshop in order to facilitate technical discussions. Participants are
encouraged to sign up early to ensure that they receive the read-ahead
materials in a timely fashion. The workshop will focus on discussion of
the CV applications captured in the CVRIA; the interfaces identified
and defined in the CVRIA; a crosswalk between candidate interfaces and
standards; standards gap analysis and emerging standards needs; and
USDOT policy in pursuing standardization. The project is sponsored and
led by the USDOT's ITS JPO as part of ITS Architecture and Standards
and Systems Engineering and Test Bed Program efforts.

About the Connected Vehicle Research Program at USDOT

    Connected Vehicle research at USDOT is a multimodal program that
involves using wireless communication between vehicles, infrastructure,
and personal communications devices to improve safety, mobility, and
environmental sustainability. The CVRIA project is sponsored and led by
the ITS JPO, under the management of the ITS Architecture and Standards
Programs and in cooperation with the Systems Engineering and Test Bed
Programs. To learn more about the Connected Vehicle program please
visit www.its.dot.gov.
    For further information, please contact Carlos Alban,
Transportation Program Specialist, Intelligent Transportation Society
of America, 1100 New Jersey Ave. SE., Suite 850, Washington, DC 20003,
202-721-4223<EMAIL_ADDRESS>
    Issued in Washington, DC, on the 30th day of January 2014.
John Augustine,
Managing Director, ITS Joint Program Office.
[FR Doc. 2014-02338 Filed 2-4-14; 8:45 am]
BILLING CODE 4910-HY-P


[Federal Register: August 24, 2009 (Volume 74, Number 162)]
[Notices]
[Page 42660-42661]
[DOCID:fr24au09-47]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project No. 13552-000]

Free Flow Power Ohio River 15, LLC; Notice of Preliminary Permit
Application Accepted for Filing and Soliciting Comments, Motions To
Intervene, and Competing Applications

August 14, 2009.

    On July 14, 2009, Free Flow Power Ohio River 15, LLC filed an
application for a preliminary permit, pursuant to section 4(f) of the
Federal Power Act, proposing to study the feasibility of the South
Myette Point Hydrokinetic Energy Project, located on the Atchafalaya
River, Saint Mary Parish, Louisiana. The sole purpose of a preliminary
permit, if issued, is to grant the permit holder priority to file a
license application during the permit term. A preliminary permit does
not authorize the permit holder to perform any land disturbing
activities or otherwise enter upon lands or waters owned by others
without the owners'' express permission.
    The proposed project would consist of: (1) 680 turbine-generator
units configured in a series of turbine arrays which in turn will be
grouped to form turbine fields; (2) a combination of freestanding
pilings, a floating barge-like platform, or existing shore
infrastructure such as dock pilings onto which the turbine arrays will
be moored; (3) submersible electric cables interconnecting the arrays
within each turbine field and transmit the turbine field's generation
to a shore station; (4) several shore stations each consisting of less
than 100 square meters which will transition the submersible cabling to
the overhead transmission; (5) a 2.4 mile, 69 kV line interconnecting
the shore stations and delivering power to the project substation; and
(6) appurtenant facilities. The proposed project would generate about
59 gigawatt-hours annually.
    Applicant contact: Ramya Swaminathan, Free Flow Power Corporation,
33 Commercial Street, Gloucester, Massachusetts 01930, phone: (978)
226-1531.

    FERC Contact: Sergiu Serban,<PHONE_NUMBER>.
    Deadline for filing comments, motions to intervene, competing
applications (without notices of intent), or notices of intent to file
competing applications: 60 days from the issuance of this notice.
Comments, motions to intervene, notices of intent, and competing
applications may be filed electronically via the Internet. See 18 CFR
385.2001(a)(1)(iii) and the instructions on the Commission's Web site
under the ``e-Filing'' link. If unable to be filed electronically,
documents may be paper-filed. To paper-file, an original and eight
copies should be mailed to: Kimberly D. Bose, Secretary, Federal Energy
Regulatory Commission, 888 First Street, NE., Washington, DC 20426. For
more information on how to submit these types of filings please go to
the Commission's Web site located at  http://www.ferc.gov/filing-
comments.asp. More information about this project, including a copy of
the application, can be viewed or printed on the ``eLibrary'' link of
Commission's Web site at  http://www.ferc.gov/docs-filing/elibrary.asp.
Enter the docket number (P13552) in the docket number field to access
the document. For assistance, call toll-free 1-866-208-3372.

Kimberly D. Bose,
Secretary.
 [FR Doc. E9-20231 Filed 8-21-09; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register: December 3, 2008 (Volume 73, Number 233)]
[Notices]
[Page 73681-73683]
[DOCID:fr03de08-43]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59027; File No. SR-NYSEALTR-2008-11]

Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by NYSE Alternext US LLC To
Establish the Minimum Price Variation of $0.0001 for Orders and
Quotations in Equity Securities that are Priced Below $1.00 Per Share

November 28, 2008.
    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 November 26, 2008, NYSE Alternext US LLC (the ``Exchange'' or
``NYSE Alternext'') 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C.78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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

    The Exchange proposes to amend Rule 62-NYSE Alternext Equities to
conform with amendments to NYSE Rule 62 recently filed by the New York
Stock Exchange LLC (``NYSE'').

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those 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 parts of such statements. The text of the proposed rule
change is available on the Exchange's Web site, at the Exchange's
principal office, and at the Commission's Public Reference Room.

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 Rule 62-NYSE
Alternext Equities to conform with amendments to NYSE Rule 62 recently
filed by the NYSE.

Background

    As described more fully in a related rule filing, NYSE Euronext
acquired The Amex Membership Corporation (``AMC'') pursuant to an
Agreement and Plan of Merger, dated January 17, 2008 (the ``Merger'').
In connection with the Merger, the Exchange's predecessor, the American
Stock Exchange LLC (``Amex''), a subsidiary of AMC, became a subsidiary
of NYSE Euronext called NYSE Alternext U.S. LLC,\3\ and will continue
to operate as a national securities exchange registered under Section 6
of the Act.\4\ The effective date of the Merger was October 1, 2008.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 58673 (September 29,
2008), 73 FR 57707 (October 3, 2008) (SR-NYSE-2008-60 and SR-Amex
2008-62) (approving the Merger).
    \4\ 15 U.S.C. 78f.
---------------------------------------------------------------------------

    In connection with the Merger, the Exchange will relocate all
equities trading conducted on the Exchange legacy trading systems and
facilities located at 86 Trinity Place, New York, New York (the ``86
Trinity Trading Systems''), to trading systems and facilities located
at 11 Wall Street, New York, New York (the ``Equities Relocation'').
The Exchange's equity trading systems and facilities at 11 Wall Street
(the ``NYSE Alternext Trading Systems'') will be operated by the NYSE
on behalf of the Exchange.\5\
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 58705 (October 1,
2008), 73 FR 58995 (October 8, 2008) (SR-Amex 2008-63) (approving
the Equities Relocation).
---------------------------------------------------------------------------

    Similarly, the Exchange will relocate the trading of certain debt
securities currently conducted on the 86 Trinity Trading Systems to an
automated bond trading system (``NYSE Alternext Bonds'') that will be
operated by the NYSE on behalf of the Exchange (the ``Bonds
Relocation''). The Exchange will also relocate all options trading
currently conducted on the 86 Trinity Trading Systems to new facilities
of the Exchange to be located at 11 Wall Street, which will use a
trading system based on the options trading system used by NYSE Arca,
Inc. (the ``Options Relocation'').\6\
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 58833 (October 22,
2008), 73 FR 64642 (October 30, 2008) (SR-NYSE-2008-106) and
Securities Exchange Act Release No. 58839 (October 23, 2008), 73 FR
64645 (October 30, 2008) (SR-NYSEALTR-2008-03) (together, approving
the Bonds Relocation). The Exchange will submit a separate rule
filing to adopt a new rule set to govern NYSE Alternext options
trading following the Options Relocation.

---------------------------------------------------------------------------

    Post-Merger, all Exchange members and member organizations that
were authorized to trade on the Exchange before the Merger will receive
trading permits (referred to as ``86 Trinity Permits'') that authorize
continued trading on the 86 Trinity Trading Systems. Holders of the 86
Trinity Permits are eligible to apply for NYSE Alternext equities
trading licenses or options trading permits upon the Equities or
Options Relocation, as applicable.\7\ In addition, pursuant to the
Merger, all NYSE Alternext members and member organizations that apply
for NYSE Alternext equities trading licenses are automatically waived
in as NYSE members and member organizations.\8\ Similarly, all NYSE
members and member organizations are automatically waived in as NYSE
Alternext members and member organizations.\9\
---------------------------------------------------------------------------

    \7\ See Securities Exchange Act Release No. 58706 (October 1,
2008), 73 FR 59019 (October 8, 2008) (SR-NYSE-2008-70) (describing
and approving membership rule changes related to the Merger);
Securities Exchange Act Release No. 58705 (October 1, 2008), 73 FR
58995 (October 8, 2008) (SR-Amex 2008-63) (approving the Equities
Relocation).
    \8\ See NYSE Rules 2.10 and 2.20. NYSE Alternext members and
member organizations will have a six-month grace period within which
to meet NYSE and NYSE Alternext Equities membership requirements.
See NYSE Rule 300.10T and NYSE Alternext Equities Rule 300.10T.
    \9\ See NYSE Alternext Equities Rules 2.10 and .20.
---------------------------------------------------------------------------

The NYSE Alternext Equities Rules

    In order to implement the Equities and Bonds Relocations, the
Exchange adopted NYSE Rules 1-1004 as the NYSE Alternext Equities Rules
to govern all trading on the NYSE Alternext Trading Systems and NYSE
Alternext Bonds. Because the NYSE Alternext Trading Systems and NYSE
Alternext Bonds will be operated by the NYSE on behalf of the Exchange,
the NYSE Alternext Equities Rules, which will become operative as of
the date of the Equities and Bonds Relocations, are substantially
identical to the current NYSE Rules 1-1004, subject to such changes as
were necessary to apply the rules to the Exchange.\10\
---------------------------------------------------------------------------

    \10\ See Securities Exchange Act Release No. 58705 (October 1,
2008), 73 FR 58995 (October 8, 2008) (SR-Amex 2008-63) (approving
the Equities Relocation); Securities Exchange Act Release No. 58833
(October 22, 2008), 73 FR 64642 (October 30, 2008) (SR-NYSE-2008-
106) and Securities Exchange Act Release No. 58839 (October 23,
2008), 73 FR 64645 (October 30, 2008) (SR-NYSEALTR-2008-03)
(together, approving the Bonds Relocation); and SR-NYSEALTR-2008-10
(formally filed November 26, 2008) (adopting amendments to NYSE
Alternext Equities Rules to track changes to corresponding NYSE
Rules).
---------------------------------------------------------------------------

Proposed Amendments to Rule 62-NYSE Alternext Equities

    The Exchange proposes to amend Rule 62-NYSE Alternext Equities to
conform to amendments recently filed by the NYSE for its Rule 62.\11\
---------------------------------------------------------------------------

    \11\ In its rule filing the NYSE proposed, in accordance with
SEC Rule 612, to establish a minimum price variation of $0.0001 for
orders and quotations in equity securities that are priced below
$1.00 per share in order to enable the NYSE to accept orders in sub-
penny increments for those securities. See SR-NYSE-2008-123
(formally filed November 26, 2008). The Exchange understands that
the NYSE is in the process of modifying its trading systems to, in
addition to accepting sub-penny orders, enable quotation and trading
in sub-penny increments on the NYSE. These modifications to the NYSE
trading systems will similarly modify the NYSE Alternext Trading
Systems, and the Exchange will submit a companion rule filing at the
same time the NYSE submits its rule filing for these system
modifications.
---------------------------------------------------------------------------

    The Exchange therefore proposes to amend Supplementary Material .10
of Rule 62-NYSE Alternext Equities to include the following table of
minimum price variation (MPV) values:

------------------------------------------------------------------------
                                                               Minimum
                 Price of order or interest                     price
                                                              variation
------------------------------------------------------------------------
Less than $1.00............................................       $.0001
$1.00-99,999.99............................................          .01
$100,000 and greater.......................................          .10
------------------------------------------------------------------------

    The Exchange further proposes to amend Supplementary Material .20
of Rule 62-NYSE Alternext Equities to provide that, when an order for a
security containing a sub-penny component (i.e., with MPV of $.0001) is
received by the Exchange, the Exchange will round any bid price down to
the next round penny and round any offer price up to the next round
penny. The order will be sent to the NYSE Alternext Trading Systems and
the Consolidated Quotation System with the rounded price, which will be
used for all order handling purposes, including routing and execution.

Operative Date

    The Exchange proposes that the operative date of the proposed rule
change be the date of the Equities and Bonds Relocations, currently
scheduled for December 1, 2008.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\12\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\13\ in particular, in that it is designed to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in, securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest. The proposal
also supports the principles of Section 11A(a)(1) \14\ of the Act in
that it seeks to ensure the economically efficient execution of
securities transactions, to make it practicable for brokers to execute
investors' orders in the best market, and to provide an opportunity for
investors' orders to be executed without the participation of a dealer.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(5).
    \14\ 15 U.S.C. 78k-1(a)(1).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change is necessary
and appropriate to update the NYSE Alternext Trading Systems in
conformity with changes made to the NYSE trading systems on which they
are based, and, specifically, to conform Rule 62-NYSE Alternext
Equities with the provisions of SEC Rule 612 by establishing the
minimum price variation for securities trading on the Exchange below a
$1.00.

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.

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

    No written comments were solicited or received with respect to the
proposed rule change.

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

    The Exchange believes that this proposal qualifies for immediate
effectiveness upon filing as a non-controversial rule change pursuant
to Section 19(b)(3)(A) of the Act \15\ and Rule 19b-4(f)(6)
thereunder.\16\ The Exchange asserts that the proposed rule change (i)
will not significantly affect the protection of investors or the public
interest, (ii) will not impose any significant burden on competition,
and (iii) by its terms, will not become operative for 30 days after the
date of

this filing, or such shorter time as the Commission may designate, if
consistent with the protection of investors and the public
interest.\17\
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 17 CFR 240.19b-4(f)(6).
    \17\ 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 Commission has determined to
waive the five-day pre-filing period in this case.
---------------------------------------------------------------------------

    The Exchange has requested that the Commission waive the 30-day
operative delay, and designate the proposal as operative as of December
1, 2008. NYSE Alternext notes that it has previously announced its
intention to relocate its equities and bonds trading from the 86
Trinity Trading Systems to the NYSE Alternext Trading Systems and NYSE
Alternext Bonds on December 1, 2008, and has previously advised the
Commission staff of its intention to harmonize the rules between NYSE
and NYSE Alternext in order to facilitate this transition. Moreover,
the Exchange believes that this filing is non-controversial because it
is consistent with one that was previously submitted by NYSE for
immediate effectiveness.\18\
---------------------------------------------------------------------------

    \18\ See Securities Exchange Act Release No. 59025 (November 26,
2008) (SR-NYSE-2008-123).
---------------------------------------------------------------------------

    The Commission hereby grants the Exchange's request \19\ and
believes that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest. The rule being adopted
through this filing is based on a previously established rule of NYSE,
and does not appear to raise any novel or significant issues.
Furthermore, waiving the operative delay will facilitate the Equities
Relocation, which is scheduled to occur on December 1, 2008. Therefore,
the Commission designates the proposal operative as of December 1,
2008.
---------------------------------------------------------------------------

    \19\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

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-NYSEALTR-2008-11 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-NYSEALTR-2008-11. 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, on official
business days between the hours of 10 a.m. and 3 p.m. Copies of the
filing also will be available for inspection and copying at the
principal office of the Exchange. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-NYSEALTR-2008-11 and should be submitted on or before
December 24, 2008.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).

J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E8-28679 Filed 12-2-08; 8:45 am]

BILLING CODE 8011-01-P