[Federal Register Volume 87, Number 142 (Tuesday, July 26, 2022)]
[Notices]
[Pages 44416-44418]
[FR Doc No: 2022-15915]

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

DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

[Docket ID FEMA-2022-0002]

Final Flood Hazard Determinations

AGENCY: Federal Emergency Management Agency, Department of Homeland
Security.

ACTION: Notice.

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

SUMMARY: Flood hazard determinations, which may include additions or
modifications of Base Flood Elevations (BFEs), base flood depths,
Special Flood Hazard Area (SFHA) boundaries or zone designations, or
regulatory floodways on the Flood Insurance Rate Maps (FIRMs) and where
applicable, in the supporting Flood Insurance Study (FIS) reports have
been made final for the communities listed in the table below. The FIRM
and FIS report are the basis of the floodplain management measures that
a community is required either to adopt or to show evidence of having
in effect in order to qualify or remain qualified for participation in
the Federal Emergency Management Agency's (FEMA's) National Flood
Insurance Program (NFIP).

DATES: The date of December 15, 2022 has been established for the FIRM
and, where applicable, the supporting FIS report showing the new or
modified flood hazard information for each community.

ADDRESSES: The FIRM, and if applicable, the FIS report containing the
final flood hazard information for each community is available for
inspection at the respective Community Map Repository address listed in
the tables below and will be available online through the FEMA Map
Service Center at https://msc.fema.gov by the date indicated above.

FOR FURTHER INFORMATION CONTACT: Rick Sacbibit, Chief, Engineering
Services Branch, Federal Insurance and Mitigation Administration, FEMA,
400 C Street SW, Washington, DC 20472,<PHONE_NUMBER>, or (email)
[email protected]; or visit the FEMA Mapping and Insurance
eXchange (FMIX) online at https://www.floodmaps.fema.gov/fhm/fmx_main.html.

SUPPLEMENTARY INFORMATION: The Federal Emergency Management Agency
(FEMA) makes the final determinations listed below for the new or
modified flood hazard information for each community listed.
Notification of these changes has been published in newspapers of local
circulation and 90 days have elapsed since that publication. The Deputy
Associate Administrator for Insurance and Mitigation has resolved any
appeals resulting from this notification.
    This final notice is issued in accordance with section 110 of the
Flood Disaster Protection Act of 1973, 42 U.S.C. 4104, and 44 CFR part
67. FEMA has developed criteria for floodplain management in floodprone
areas in accordance with 44 CFR part 60.
    Interested lessees and owners of real property are encouraged to
review the new or revised FIRM and FIS report available at the address
cited below for each community or online through the FEMA Map Service
Center at https://msc.fema.gov.

    The flood hazard determinations are made final in the watersheds
and/or communities listed in the table below.

(Catalog of Federal Domestic Assistance No. 97.022, ``Flood
Insurance.'')

Michael M. Grimm,
Assistant Administrator for Risk Management, Department of Homeland
Security, Federal Emergency Management Agency.

------------------------------------------------------------------------
                                             Community map repository
               Community                             address
------------------------------------------------------------------------
            Charlotte County, Florida and Incorporated Areas
                         Docket No.: FEMA-B-2074
------------------------------------------------------------------------
City of Punta Gorda....................  City Hall, 326 West Marion
                                          Avenue, Punta Gorda, FL 33950.
Unincorporated Areas of Charlotte        Charlotte County Building
 County.                                  Department, 18400 Murdock
                                          Circle, Port Charlotte, FL
                                          33948.
------------------------------------------------------------------------
              Walton County, Georgia and Incorporated Areas
                         Docket No.: FEMA-B-2152
------------------------------------------------------------------------
City of Good Hope......................  City Hall, 169 Highway 83, Good
                                          Hope, GA 30641.
City of Monroe.........................  City Hall, 215 North Broad
                                          Street, Monroe, GA 30655.
City of Social Circle..................  City Hall, 166 North Cherokee
                                          Road, Social Circle, GA 30025.
Unincorporated Areas of Walton County..  Walton County Planning and
                                          Development Office, 303 South
                                          Hammond Drive, Suite 98,
                                          Monroe, GA 30655.
------------------------------------------------------------------------
             Cerro Gordo County, Iowa and Incorporated Areas
                         Docket No.: FEMA-B-2162
------------------------------------------------------------------------
City of Clear Lake.....................  Public Works Office, 1419 2nd
                                          Avenue South, Clear Lake, IA
                                          50428.
City of Mason City.....................  City Hall, 10 1st Street
                                          Northwest, Mason City, IA
                                          50401.
City of Ventura........................  City Hall, 101 Sena Street,
                                          Ventura, IA 50482.
Unincorporated Areas of Cerro Gordo      Cerro Gordo County Courthouse,
 County.                                  220 North Washington Avenue,
                                          Mason City, Iowa 50401.
------------------------------------------------------------------------
               Dallas County, Iowa and Incorporated Areas
                         Docket No.: FEMA-B-2165
------------------------------------------------------------------------
City of Adel...........................  City Hall, 301 South 10th
                                          Street, Adel, IA 50003.
City of Van Meter......................  City Hall, 310 Mill Street, Van
                                          Meter, IA 50261.
City of Waukee.........................  City Hall, 230 West Hickman
                                          Road, Waukee, IA 50263.
Unincorporated Areas of Dallas County..  Dallas County Planning and
                                          Development Department, 907
                                          Court Street, Adel, IA 50003.
------------------------------------------------------------------------
              Winnebago County, Iowa and Incorporated Areas
                         Docket No.: FEMA-B-2145
------------------------------------------------------------------------
City of Leland.........................  City Hall, 316 Walnut Street,
                                          Leland, IA 50453.
Unincorporated Areas of Winnebago        Winnebago County Courthouse,
 County.                                  126 South Clark Street, Forest
                                          City, IA 50436.
------------------------------------------------------------------------
              Mackinac County, Michigan (All Jurisdictions)
                         Docket No.: FEMA-B-2128
------------------------------------------------------------------------
City of Mackinac Island................  City Hall, 7358 Market Street,
                                          Mackinac Island, MI 49757.
City of St. Ignace.....................  City Hall, 396 North State
                                          Street, St. Ignace, MI 49781.
Sault Sainte Marie Tribe of the          Sault Tribe Administration
 Chippewa Indians.                        Building, 523 Ashmun Street,
                                          Sault Sainte Marie, MI 49783.
Township of Bois Blanc.................  Bois Blanc Township Hall, 431
                                          Sioux Avenue, Pointe Aux Pins,
                                          MI 49775.
Township of Brevort....................  Brevort Township Community
                                          Center, 4020 Church Road,
                                          Moran, MI 49760.
Township of Clark......................  Clark Township Hall, 207 North
                                          Blindline Road, Cedarville, MI
                                          49719.
Township of Garfield...................  Garfield Township Hall, 6760
                                          State Highway M-117, Engadine,
                                          MI 49827.
Township of Hendricks..................  Hendricks Township Hall, 5115
                                          Hiawatha Trail, Naubinway, MI
                                          49762.
Township of Hudson.....................  Hudson Township Hall, 7961
                                          Church Street, Rexton, MI
                                          49762.
Township of Marquette..................  Marquette Township Hall, 7177
                                          East James Street, Pickford,
                                          MI 49774.
Township of Moran......................  Moran Township Hall, 1362 West
                                          US-2, St. Ignace, MI 49781.
Township of Newton.....................  Newton Township Hall, 6164
                                          South Gould City Road, Gould
                                          City, MI 49838.
Township of St. Ignace.................  Township Hall, 4298 Gorman
                                          Road, St. Ignace, MI 49781.
------------------------------------------------------------------------

              City of Hopewell, Virginia (Independent City)
                         Docket No.: FEMA-B-2152
------------------------------------------------------------------------
City of Hopewell.......................  City Hall, 300 North Main
                                          Street, Hopewell, VA 23860.
------------------------------------------------------------------------
             City of Petersburg, Virginia (Independent City)
                         Docket No.: FEMA-B-2149
------------------------------------------------------------------------
City of Petersburg.....................  City Hall, 135 North Union
                                          Street, Petersburg, VA 23803.
------------------------------------------------------------------------

[FR Doc. 2022-15915 Filed 7-25-22; 8:45 am]
BILLING CODE 9110-12-P


[Federal Register Volume 85, Number 42 (Tuesday, March 3, 2020)]
[Notices]
[Pages 12616-12623]
[FR Doc No: 2020-04290]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-88292; File No. SR-ISE-2020-06]

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

February 26, 2020.
    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 February 12, 2020, Nasdaq ISE, LLC (``ISE'' or ``Exchange'') filed
with the Securities and Exchange Commission (``SEC'' or ``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 the Exchange's Pricing Schedule at
Options 7, as described further below.
    The text of the proposed rule change is available on the Exchange's
website at http://ise.cchwallstreet.com/, at the principal office of
the Exchange, and at the Commission's Public Reference Room.

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

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.

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

1. Purpose
    The purpose of the proposed rule change is to amend the Exchange's
Pricing Schedule at Options 7 with the

objective of attracting additional volume to the Exchange in Non-Select
Symbols,\3\ where the Exchange has seen less activity than it has in
Select Symbols.\4\ Each change is described in detail below.
---------------------------------------------------------------------------

    \3\ ``Non-Select Symbols'' are options overlying all symbols
excluding Select Symbols.
    \4\ ``Select Symbols'' are options overlying all symbols listed
on the Exchange that are in the Penny Pilot Program.
---------------------------------------------------------------------------

    The Exchange initially filed the proposed rule change on February
3, 2020 (SR-ISE-2020-03). On February 12, 2020, the Exchange withdrew
that filing and submitted this filing.
Marketing Fee
    By way of background, the Exchange administers a marketing fee
program that helps Market Makers \5\ establish marketing fee
arrangements with Electronic Access Members (``EAMs'') in exchange for
those EAMs routing some or all of their order flow to the Market
Maker.\6\ This program is funded through a fee of $0.70 per contract,
which is paid by the Market Maker for each regular Priority Customer
\7\ contract executed in Non-Select Symbols.\8\
---------------------------------------------------------------------------

    \5\ The term ``Market Makers'' refers to ``Competitive Market
Makers'' and ``Primary Market Makers'' collectively. See Options 1,
Section 1(a)(21).
    \6\ The marketing fee is rebated proportionally to the Members
that paid the fee such that on a monthly basis the market fee fund
balance administered by the Primary Market Maker for a Group of
options established under Options 2, Section 3(b) does not exceed
$100,000 and the marketing fee fund balance administered by a
preferenced Competitive Market Maker for such a Group does not
exceed $100,000. A preferenced Competitive Market Maker that elects
not to administer a fund will not be charged the marketing fee. The
Exchange assesses an administrative fee of .45% on the total amount
of the funds collected each month. See Options 7, Section 6.E.
    \7\ A ``Priority Customer'' is a person or entity that is not a
broker/dealer in securities, and does not place more than 390 orders
in listed options per day on average during a calendar month for its
own beneficial account(s), as defined in Nasdaq ISE Options 1,
Section 1(a)(37).
    \8\ The Exchange does not charge Market Makers a marketing fee
for regular Priority Customer contracts in Select Symbols.
Furthermore, the marketing fee is currently waived for NDX, NQX,
MNX, Flash Orders and for Complex Orders in all symbols.
---------------------------------------------------------------------------

    In connection with the proposed fee changes to the regular Non-
Select Symbol pricing schedule described below, the Exchange proposes
to set this marketing fee to $0.00 per contract. The Exchange believes
that the proposed fee change will ensure that the total fees paid by
Market Makers for regular executions in Non-Select Symbols will remain
at a level the Exchange believes is appropriate. The Exchange also
proposes in Options 7, Section 6.E to add language that makes clear no
marketing fees will be charged with the proposed changes. In
particular, the Exchange will add that no marketing fees are charged
for Select and Non-Select Symbols. If the Exchange determines to charge
a marketing fee in the future, it will do so pursuant to a rule filing.
Non-Select Regular Order Pricing
    As set forth in Options 7, Section 3, the Exchange currently
charges the following transaction fees for regular orders in Non-Select
Symbols (excluding index options): \9\ $0.25 per contract for Market
Maker orders, $0.20 per contract for Market Maker orders sent by EAMs,
and $0.72 per contract for Non-Nasdaq ISE Market Maker,\10\ Firm
Proprietary \11\/Broker-Dealer,\12\ and Professional Customer \13\
orders. The Exchange applies the foregoing fees to regular transactions
regardless of whether the order adds or removes liquidity on ISE. The
Exchange currently does not charge a fee for regular Priority Customer
orders in Non-Select Symbols.
---------------------------------------------------------------------------

    \9\ Specifically, for all executions in regular NDX and NQX
orders, the Exchange charges the applicable index options fees in
Options 7, Section 5 instead.
    \10\ A ``Non-Nasdaq ISE Market Maker'' is a market maker as
defined in Section 3(a)(38) of the Securities Exchange Act of 1934,
as amended, registered in the same options class on another options
exchange.
    \11\ A ``Firm Proprietary'' order is an order submitted by a
member for its own proprietary account.
    \12\ A ``Broker-Dealer'' order is an order submitted by a member
for a broker-dealer account that is not its own proprietary account.
    \13\ A ``Professional Customer'' is a person or entity that is
not a broker/dealer and is not a Priority Customer.
---------------------------------------------------------------------------

    The Exchange now proposes to replace the existing fee structure
with a maker/taker pricing model where all market participants (except
Priority Customers) will be assessed a uniform per contract ``maker''
fee for Non-Select Symbol executions that add liquidity on the
Exchange, and a separate per contract ``taker'' fee for Non-Select
Symbol executions that remove liquidity.\14\ Generally speaking, the
proposed maker fees will be slightly lower than the proposed taker fees
in order to incentivize Members to increase their liquidity adding
activity in Non-Select Symbols. The Exchange also proposes to charge
all market participants higher taker fees for trades executed against
Priority Customer Orders. The Exchange further proposes to provide a
significant maker rebate for Priority Customer orders in Non-Select
Symbols, and to continue assessing no taker fees for such orders.
---------------------------------------------------------------------------

    \14\ As discussed later in this filing, the Exchange will also
introduce a Market Maker Plus program for Non-Select Symbols whereby
qualifying Market Makers would receive a discounted fee or rebate in
lieu of paying the proposed maker fee if they meet the proposed tier
threshold requirements.
---------------------------------------------------------------------------

    In light of the proposed changes to charge consistent maker/taker
fees across all non-Priority Customer orders, the Exchange proposes to
remove the separate pricing for Market Maker orders sent by EAMs from
the Non-Select Symbol pricing schedule in Options 7, Section 3, and
instead specify that the Market Maker fees in Non-Select Symbols will
also apply to the Market Maker orders sent by EAMs.\15\ With this
change, the Exchange also proposes to reduce the current fee assessed
to Market Makers for Crossing Orders \16\ (except PIM orders) from
$0.25 to $0.20 per contract, which would align this fee with the fee
currently charged to Market Maker orders sent by EAMs, and to all other
non-Priority Customer orders. The Exchange currently charges Market
Makers (including Market Maker orders sent by EAMs) the same fee for
PIM orders and for Responses to Crossing Orders,\17\ and those fees
will remain unchanged with this proposal.
---------------------------------------------------------------------------

    \15\ This is similar to the approach for Select Symbols today.
See Options 7, Section 3, note 8.
    \16\ A ``Crossing Order'' is an order executed in the Exchange's
Facilitation Mechanism, Solicited Order Mechanism, Price Improvement
Mechanism (PIM) or submitted as a Qualified Contingent Cross order.
For purposes of the Pricing Schedule, orders executed in the Block
Order Mechanism are also considered Crossing Orders.
    \17\ ``Responses to Crossing Order'' is any contra-side interest
submitted after the commencement of an auction in the Exchange's
Facilitation Mechanism, Solicited Order Mechanism, Block Order
Mechanism or PIM.
---------------------------------------------------------------------------

    Accordingly, the new Non-Select Symbol pricing in Options 7,
Section 3 will be as follows:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Fee for
                                                                                Fee for                      responses to       Fee for
                   Market participant                      Maker rebate/     Taker fee       crossing       Fee for PIM      crossing      responses to
                                                                fee                       orders  except      Orders      orders  except    PIM orders
                                                                                PIM orders                      PIM orders
--------------------------------------------------------------------------------------------------------------------------------------------------------
Market Maker............................................           $0.70           $0.72           $0.20           $0.10           $0.50           $0.35

Non-Nasdaq ISE Market Maker (FarMM).....................            0.70            0.72            0.20            0.10            0.50            0.35
Firm Proprietary/Broker-Dealer..........................            0.70            0.72            0.20            0.10            0.50            0.35
Professional Customer...................................            0.70            0.72            0.20            0.10            0.50            0.35
Priority Customer.......................................          (0.86)            0.00            0.00            0.00            0.50            0.35
--------------------------------------------------------------------------------------------------------------------------------------------------------

    As noted above, the proposed taker fees set forth in the table will
apply to orders that trade against non-Priority Customer orders. When
trading against Priority Customer orders, the Exchange proposes to
charge a higher taker fee. Specifically, non-Priority Customer orders
will be charged a taker fee of $1.10 per contract for trades executed
against a Priority Customer. Priority Customer orders will be charged a
taker fee of $0.86 per contract for trades executed against a Priority
Customer.\18\
---------------------------------------------------------------------------

    \18\ See proposed Options 7, Section 3, note 3.
---------------------------------------------------------------------------

    As it relates to the new Priority Customer maker rebate, the
Exchange also proposes to offer Members an additional rebate of $0.14
per contract if they execute more than 0.06% of Regular Order Non-
Select Symbol Priority Customer Volume (excluding Crossing Orders and
Responses to Crossing Orders) calculated as a percentage of Customer
Total Consolidated Volume \19\ per day in a given month.\20\ The
Exchange notes that the proposed volume calculation includes all
regular order Priority Customer volume that adds or removes liquidity
in Non-Select Symbols on the Exchange, except for volume executed as
Crossing Orders and Responses to Crossing Orders. Thus, Members that
transact in greater Non-Select Symbol Priority Customer volume on the
Exchange (whether by adding or removing liquidity) may be eligible to
receive rebates up to $1.00 per contract on their Priority Customers
regular orders in Non-Select Symbols that add liquidity to ISE.
---------------------------------------------------------------------------

    \19\ ``Customer Total Consolidated Volume'' means the total
national volume cleared at The Options Clearing Corporation in the
Customer range in equity and ETF options in that month.
    \20\ See proposed Options 7, Section 3, note 15.
---------------------------------------------------------------------------

    Lastly, the Exchange proposes to stipulate that for Priority
Customer orders adding liquidity in Non-Select Symbols, there will be
no fee charged or rebate provided when trading against Priority
Customer complex orders that leg into the regular order book.\21\
Today, the Exchange does not charge any fee to Priority Customer
complex orders in Non-Select Symbols that leg into the regular market
and trade with resting interest on the regular order book, which may
include resting Priority Customer orders. As such, the Exchange
believes it is appropriate to not charge a fee or provide a rebate to a
Non-Select Symbol Priority Customer order resting on the regular order
book when the Non-Select Symbol Priority Customer order legs out of the
complex order book and interacts with such interest.
---------------------------------------------------------------------------

    \21\ See proposed Options 7, Section 3, note 18.
---------------------------------------------------------------------------

Market Maker Plus in Non-Select Symbols
    The Exchange currently operates a Market Maker Plus program for
regular orders in Select Symbols that provides tiered rebates to Market
Makers based on time spent quoting at the national best bid or offer
(``NBBO'').\22\ This program is designed to reward Market Makers that
contribute to market quality by maintaining tight markets in Select
Symbols. Market Makers are evaluated each trading day for the
percentage of time spent on the NBBO for qualifying series that expire
in two successive thirty calendar day periods beginning on that trading
day. A Market Maker Plus is a Market Maker who is on the NBBO a
specified percentage of the time on average for the month based on
daily performance in the qualifying series for each of the two
successive periods described above.\23\ If a Market Maker would qualify
for a different Market Maker Plus tier in each of the two successive
periods described above, then the lower of the two Market Maker Plus
tier rebates shall apply to all contracts.\24\ A Market Maker's worst
quoting day each month for each of the two successive periods described
above, on a per symbol basis, will be excluded in calculating whether a
Market Maker qualifies for this rebate. A Market Maker who qualifies
for Market Maker Plus Tiers 2 or higher in at least four of the
previous six months will be eligible to receive a reduced Tier 2 rebate
in a given month where the Market Maker does not qualify for any Market
Maker Plus tiers. This rebate will be the applicable Tier 2 rebate
reduced by $0.08 per contract.
---------------------------------------------------------------------------

    \22\ See Options 7, Section 3, note 5.
    \23\ Qualifying series are series trading between $0.03 and
$3.00 (for options whose underlying stock's previous trading day's
last sale price was less than or equal to $100) and between $0.10
and $3.00 (for options whose underlying stock's previous trading
day's last sale price was greater than $100) in premium.
    \24\ Market Makers may enter quotes in a symbol using one or
more unique, exchange assigned identifiers--i.e., badge/suffix
combinations. Market Maker Plus status is calculated independently
based on quotes entered in a symbol for each of the Market Maker's
badge/suffix combinations, and the highest tier achieved for any
badge/suffix combination quoting that symbol applies to executions
across all badge/suffix combinations that the member uses to trade
in that symbol. Only badge/suffix combinations quoting a minimum of
ten trading days within the month will be used to determine whether
the Market Maker Plus status has been met and the specific tier to
be applied to the Market Maker's performance for that month.
---------------------------------------------------------------------------

    The Exchange believes that the Market Maker Plus program has been
successful overall in encouraging better market quality and making the
Exchange a more attractive market for Select Symbols. Accordingly, the
Exchange proposes to replicate this success for Non-Select Symbols by
introducing a Market Maker Plus program with substantially similar
qualifications in order to promote and encourage liquidity in those
particular symbols. Specifically, Market Makers that achieve Market
Maker Plus Tiers 1-3 as proposed below for executions in Non-Select
Symbols (excluding index options) will be assessed the following maker
fee or rebate instead of paying the $0.70 per contract maker fee as
proposed above: \25\
---------------------------------------------------------------------------

    \25\ As with all Non-Select Symbol pricing in Options 7, Section
3, the proposed Market Maker Plus program will not apply to NDX and
NQX options, and the Exchange will charge the applicable index
options fees in Options 7, Section 5 instead.

------------------------------------------------------------------------
                                                            Maker fee/
     Market maker plus tier  (specified percentage)           rebate
------------------------------------------------------------------------
Tier 1 (80% to less than 90%)...........................           $0.50
Tier 2 (90% to less than 98%)...........................            0.30
Tier 3 (98% or greater).................................          (0.40)
------------------------------------------------------------------------

    The Market Maker Plus Tier 3 rebate will be provided if the
qualifying Market Maker trades against non-Priority Customer orders.
Qualifying

Market Makers that trade against Priority Customer orders will be
charged a Market Maker Plus Tier 3 fee of $0.10 per contract instead of
receiving the Tier 3 rebate.\26\
---------------------------------------------------------------------------

    \26\ See proposed Options 7, Section 3, note 6.
---------------------------------------------------------------------------

    The Exchange also proposes to amend the existing Market Maker Plus
provisions throughout to provide that Market Makers that meet these
qualifications will be assessed the applicable fee or rebate. Lastly,
the Exchange proposes to amend the language around the reduced Tier 2
incentive currently provided to qualifying Market Makers in Select
Symbols, and expand these provisions to cover the proposed fees in the
Non-Select Market Maker Plus program. The Exchange proposes to specify
that for Select Symbols, this rebate will continue to be the applicable
Tier 2 rebate reduced by $0.08 per contract. For Non-Select Symbols,
this fee will be the Tier 2 fee increased by $0.08 per contract.
Market Maker Discount Tiers in Non-Select Symbols
    Today, as set forth in Options 7, Section 6.D, Market Makers that
execute a monthly volume of 250,000 contracts or more in regular Non-
Select Symbol orders are entitled to a discounted rate of $0.20 per
contract instead of paying the regular $0.25 per contract fee. The
Market Maker discount tiers were originally adopted to incentivize
greater Market Maker activity in Non-Select Symbols. With the
introduction of the new Market Maker Plus program for Non-Select
Symbols as described above, the Exchange now proposes to eliminate the
Market Maker discount tiers.
Flash Orders
    With the introduction of the maker/taker fee structure proposed
above for Non-Select Symbols, the Exchange proposes to amend how Flash
Orders will be charged under this proposal. By way of background, a
``Flash Order'' is an order that is exposed at the NBBO by the Exchange
to all Members for execution, as provided under Supplementary Material
.02 to Options 5, Section 2. Today, Flash Orders are assessed the
applicable taker fee for the initiation of a Flash Order and the
applicable maker rebate (only for Market Makers that qualify for Market
Maker Plus) or maker fee for responses to the Flash Order. Thus, for
the initiation of a Flash Order in Select Symbols, the Exchange
currently assesses a taker fee of $0.45 per contract for Market Maker
orders (including Market Maker orders sent by an EAM), $0.46 per
contract for all other non-Priority Customer orders, and $0.41 per
contract for Priority Customer orders. For responses to a Flash Order
in Select Symbols, the Exchange currently assesses a maker fee of $0.11
per contract for all non-Priority Customer orders and no fee for
Priority Customer orders.\27\ As it relates to Flash Orders in Non-
Select Symbols, because the Exchange does not currently differentiate
between maker and taker fees for Non-Select Symbol executions, Members
today are charged the same fee for initiating and responding to a Flash
Order. Specifically, the fee is $0.25 per contract for Market Maker
orders, $0.20 per contract for Market Maker orders sent by EAMs, $0.72
per contract for all other non-Priority Customer orders, and $0.00 per
contract for Priority Customer orders. In addition to the
aforementioned fees and rebates, the Exchange also pays a credit of
$0.05 per contract to a market participant that responds to a Flash
Order in Select or Non-Select Symbols which executes against a Priority
Customer.
---------------------------------------------------------------------------

    \27\ In addition, the maker fee is currently $0.11 for Market
Makers, except that (i) Market Makers that qualify for Market Maker
Plus would not pay this fee if they meet the applicable tier
thresholds set forth in note 5 of Options 7, Section 3, and would
instead receive a rebate based on the Market Maker Plus tier for
which they qualify; (ii) no fee will be charged or rebate provided
when trading against non-Priority Customer complex orders that leg
into the regular order book; and (iii) a $0.15 per contract would
apply instead of the $0.11 per contract maker fee or applicable
Market Maker Plus rebate when trading against Priority Customer
complex orders that leg into the regular order book.
---------------------------------------------------------------------------

    With the introduction of the maker/taker fee structure proposed
above for Non-Select Symbols, the Exchange now proposes to charge the
applicable taker fee for initiating Flash Orders in Non-Select Symbols.
The fee for initiating Flash Orders will therefore increase from $0.25
to $0.72 per contract for Market Makers and from $0.20 to $0.72 for
Market Maker orders sent by EAMs.\28\ The initiating fee, as proposed,
will remain the same for all other market participants, ($0.72 per
contract for all other non-Priority Customer orders, and $0.00 per
contract for Priority Customer orders).
---------------------------------------------------------------------------

    \28\ As discussed earlier in this filing, the Exchange is
proposing to remove the distinction between Non-Select Symbol
pricing for Market Makers and for Market Maker orders sent by EAMs.
---------------------------------------------------------------------------

    In addition, the Exchange proposes to charge all non-Priority
Customer responses to Flash Orders in Non-Select Symbols a flat fee of
$0.25 per contract, and not charge a fee for Priority Customer
responses. The flash response fee will therefore remain the same for
Market Maker orders, except Market Maker orders sent by EAMs will see
an increase from $0.20 to $0.25 per contract. For all other non-
Priority Customers, the flash response fee in Non-Select Symbols will
decrease from $0.72 per contract to $0.25 per contract. Lastly, for
Priority Customers, the flash response fee will remain the same at
$0.00 per contract.
    The Exchange will continue to charge the applicable Select Symbol
taker fee for initiating Flash Orders in those symbols, which taker
fees are not changing under this proposal. Similarly, the Exchange will
continue to charge the applicable Select Symbol maker rebate or fee for
responses to Flash Orders in those symbols, which maker pricing will
remain the same under this proposal. Accordingly, the Exchange proposes
to amend the existing Flash Order provisions to differentiate pricing
for Select Symbols and Non-Select Symbols where applicable.\29\ Lastly,
the Exchange proposes to remove the $0.05 credit discussed above for
both Select and Non-Select Symbols.
---------------------------------------------------------------------------

    \29\ See proposed Options 7, Section 3, note 17. The Exchange
will also make technical changes to replace the ``Section I''
references therein and to the definition of Flash Order in Options
7, Section 1 to ``Section 3.'' The Exchange will also amend the
first two sentences of note 17 to correct a typo and for better
readability.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\30\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,\31\ in particular, in that it
provides for the equitable allocation of reasonable dues, fees, and
other charges among members and issuers and other persons using any
facility, and is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \30\ 15 U.S.C. 78f(b).
    \31\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange's proposed changes to its Pricing Schedule are
consistent with the Act in several respects. As a threshold matter, the
Exchange is subject to significant competitive forces in the market for
options securities transaction services that constrain its pricing
determinations in that market. The fact that this market is competitive
has long been recognized by the courts. In NetCoalition v. Securities
and Exchange Commission, the D.C. Circuit stated as follows: ``[n]o one
disputes that competition for order flow is `fierce.' . . . As the SEC
explained, `[i]n the U.S. national market system, buyers and sellers of
securities, and the broker-dealers that act as their order-routing
agents, have a wide range of choices of where to route orders for
execution'; [and] `no exchange can afford to take its

market share percentages for granted' because `no exchange possesses a
monopoly, regulatory or otherwise, in the execution of order flow from
broker dealers'. . . .'' \32\
---------------------------------------------------------------------------

    \32\ NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010)
(quoting Securities Exchange Act Release No. 59039 (December 2,
2008), 73 FR 74770, 74782-83 (December 9, 2008) (SR-NYSEArca-2006-
21)).
---------------------------------------------------------------------------

    The Commission and the courts have repeatedly expressed their
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. In Regulation
NMS, while adopting a series of steps to improve the current market
model, the Commission highlighted the importance of market forces in
determining prices and SRO revenues and, also, recognized that current
regulation of the market system ``has been remarkably successful in
promoting market competition in its broader forms that are most
important to investors and listed companies.'' \33\
---------------------------------------------------------------------------

    \33\ Securities Exchange Act Release No. 51808 (June 9, 2005),
70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
---------------------------------------------------------------------------

    Numerous indicia demonstrate the competitive nature of this market.
For example, clear substitutes to the Exchange exist in the market for
equity security transaction services. The Exchange is only one of
sixteen options exchanges to which market participants may direct their
order flow. Within this environment, market participants can freely and
often do shift their order flow among the Exchange and competing venues
in response to changes in their respective pricing schedules. Within
the foregoing context, the proposal represents a reasonable attempt by
the Exchange to increase its liquidity and market share relative to its
competitors.
Marketing Fee
    The Exchange believes that it is reasonable to set the marketing
fee to $0.00 per contract because the Exchange has proposed changes to
its Non-Select Symbol pricing that will result in Market Makers paying
higher maker/taker fees than today.\34\ Eliminating the marketing fee
will keep total execution costs down when Market Makers trade against
regular Priority Customer orders in Non-Select Symbols. The Exchange
also believes that the proposed fee change is equitable and not
unfairly discriminatory as no Market Makers would be charged a
marketing fee under this proposal. The Exchange also believes that it
is reasonable, equitable and not unfairly discriminatory to add the
language proposed in Options 7, Section 6.E as it will make clear that
no marketing fees will be charged for Select and Non-Select Symbols
with the proposed changes, and that if the Exchange determines to
charge a marketing fee in the future, it will do so pursuant to a rule
filing.
---------------------------------------------------------------------------

    \34\ As discussed above, the Non-Select Symbol fee for Market
Makers will increase from $0.25 to $0.70 per contract (maker fee)
and to $0.72 per contract (taker fee).
---------------------------------------------------------------------------

Non-Select Regular Order Pricing
    The Exchange believes that the proposed change to adopt the maker/
taker pricing model for regular Non-Select Symbol orders as described
above is reasonable as it is designed to increase its liquidity and
opportunities for all members to trade on the Exchange. Generally, the
proposed changes will replace the existing fees with a new maker/taker
fee structure where market participants other than Priority Customers
are charged a fee based on whether the market participant adds or
removes liquidity. Priority Customer orders, meanwhile, will be
eligible for highly competitive maker rebates or assessed no taker
fees.\35\ With these changes, all market participants will also be
charged a higher taker fee for trades executed against Priority
Customers. For the reasons discussed in the following paragraphs, the
Exchange believes that the proposed fee structure will be beneficial to
market participants and will encourage an active and liquid market in
Non-Select Symbols on ISE.
---------------------------------------------------------------------------

    \35\ Furthermore, as discussed below for Market Maker Plus,
Market Makers will be eligible to qualify for substantially lower
fees or receive a rebate based on their contribution to the market.
---------------------------------------------------------------------------

    Under the proposed pricing structure, all non-Priority Customer
orders will be charged a uniform base execution fee for adding
liquidity (i.e., maker fee of $0.70 per contract) and for removing
liquidity (i.e., taker fee of $0.72 per contract). The Exchange
believes that the proposed pricing is set at levels that will encourage
market participants to increase their Non-Select Symbol activity,
especially activity that adds liquidity, on the Exchange. While Market
Makers, including Market Maker orders sent by EAMs, will be charged
higher fees than the fees currently assessed, the Exchange believes
that the increased fees are appropriate to offset the proposed
significant Priority Customer maker incentives (as described
below).\36\ Furthermore, the Exchange believes that all market
participants will benefit from additional liquidity created by the
Priority Customer rebates.
---------------------------------------------------------------------------

    \36\ See supra note 35. Non-Select Symbol fees are currently
$0.25 per contract for Market Makers, and $0.20 per contract for
Market Maker orders sent by EAMs.
---------------------------------------------------------------------------

    In addition, Priority Customer orders will be eligible for free
executions for removing liquidity and paid a rebate of $0.86 per
contract for adding liquidity. Members will also have the opportunity
to receive an additional $0.14 rebate if they execute more than 0.06%
of Regular Order Non-Select Symbol Priority Customer Volume (excluding
Crossing Orders and Responses to Crossing Orders) calculated as a
percentage of Customer Total Consolidated Volume per day in a given
month, for a total rebate of up to $1.00 per contract.\37\ Crossing
Orders and Responses to Crossing Orders will be excluded from the
proposed volume calculation as this type of order flow is subject to
separate pricing, with various incentives currently provided to Members
that trade in the Exchange's crossing mechanisms.
---------------------------------------------------------------------------

    \37\ As discussed above, all regular Priority Customer order
volume that adds or removes liquidity in Non-Select Symbols on the
Exchange is included in the proposed volume calculation, except for
volume executed as Crossing Orders and Responses to Crossing Orders.
---------------------------------------------------------------------------

    The Exchange is proposing to base the additional Priority Customer
maker incentive on a percentage of industry volume in recognition of
the fact that the volume executed by a Member may rise or fall with
industry volume. This would allow the volume calculation to be
calibrated to current market volumes rather than requiring the same
amount of volume regardless of market conditions. In addition, by
basing the proposed volume calculation on Priority Customer regular
order volume that adds or removes liquidity in Non-Select Symbols on
the Exchange, the Exchange is seeking to incentivize Members to
increase market participation in Non-Select Symbols to qualify for the
additional rebate. The Exchange believes that the significant rebate
incentives it is proposing to provide for Priority Customer orders,
taken together with the $0.00 per contract taker fee, will incentivize
Members to bring Priority Customer order flow in Non-Select Symbols,
thereby creating additional liquidity to the benefit of all market
participants and investors that trade on the Exchange.
    With respect to the increased taker fees for trades executed
against a Priority Customer, the Exchange believes that the proposed
fees are appropriate as they are designed to offset the proposed maker
rebate.\38\ As described above, Priority Customers will be offered
significant maker incentives.

The Exchange believes that Members will benefit from the additional
liquidity created by the Priority Customer rebates, and it is therefore
appropriate to charge an increased taker fee for trades executed
against a Priority Customer. The Exchange notes that other options
exchanges, including for example its affiliate Nasdaq GEMX, charge
higher taker fees when the counterparty is a Priority Customer.\39\
---------------------------------------------------------------------------

    \38\ As discussed above, non-Priority Customers will be charged
a taker fee of $1.10 per contract when trading against Priority
Customers instead of the $0.72 taker fee. Priority Customers will be
charged a taker fee of $0.86 per contract when trading against
Priority Customers instead of receiving free executions.
    \39\ See Nasdaq GEMX Pricing Schedule at Options 7, Section 3,
note 16.
---------------------------------------------------------------------------

    The Exchange also believes that it is reasonable to stipulate that
for Priority Customer orders adding liquidity in Non-Select Symbols,
there will be no fee charged or rebate provided when trading against
Priority Customer complex orders that leg into the regular order book.
As discussed above, the Exchange currently does not charge any fee to
Priority Customer complex orders in Non-Select Symbols that leg into
the regular market and trade with resting interest on the order book,
which may include resting Priority Customer orders. As such, the
Exchange believes it is reasonable to not charge a fee or provide a
rebate to a Non-Select Symbol Priority Customer order resting on the
regular order book when the Non-Select Symbol Priority Customer order
legs out of the complex order book and interacts with such interest.
    The Exchange believes that the proposed maker/taker pricing model
in Non-Select Symbols is equitable and not unfairly discriminatory as
all non-Priority Customer orders will be assessed consistent maker/
taker fees under the Exchange's proposal, regardless of market
participant category. The Exchange believes it is equitable and not
unfairly discriminatory to charge a lower fee (or no fee), or to offer
a rebate, for Priority Customer orders as the Exchange has historically
offered lower execution fees or rebates to those market participants.
Furthermore, Priority Customer order flow enhances liquidity on the
Exchange for the benefit of all market participants by providing more
trading opportunities, which in turn attracts Market Makers and other
market participants that may trade with this order flow.
    Lastly, the Exchange believes it is reasonable to no longer
differentiate the pricing between Market Makers and Market Maker orders
sent by EAMs in light of the foregoing changes to adopt a more
standardized maker/taker pricing model across all non-Priority
Customers. With this change, both market participant categories will be
charged the same fees across all Non-Select Symbol orders, including
Crossing Orders and Responses to Crossing Orders. As discussed above,
the current fees for PIM Orders and Responses to Crossing Orders are
already consistent across both market participant categories, except
the fee for all other Crossing Orders. The Exchange therefore believes
it is reasonable to decrease this fee for Market Makers as with this
change Market Makers will be charged the same fee as Market Maker
orders sent by EAMs as well as all other non-Priority Customer orders.
The Exchange further believes that the proposed changes to remove the
separate pricing for Market Maker orders sent by EAMs are equitable and
not unfairly discriminatory as the proposed fees for this category will
now be consistent with other non-Priority Customer fees.
Market Maker Plus in Non-Select Symbols
    The Exchange believes that it is reasonable to adopt the Market
Maker Plus program for Non-Select Symbols in the manner discussed above
as this program is designed to encourage better market quality and make
ISE a more attractive market for Non-Select Symbols, similar to the
existing Market Maker Plus program for Select Symbols. Under the
proposed program, Market Makers would be rewarded for providing
liquidity in Non-Select Symbols with discounted fees or a rebate if the
Market Maker achieves a higher Market Maker Plus tier based on time
spent quoting at the NBBO.\40\ The Exchange believes that it is
reasonable to offer these fee incentives to Market Makers that add
liquidity because Market Makers provide an important function to the
market when they provide liquidity to other market participants through
their displayed quotes. The Exchange believes that incentivizing Market
Makers to provide liquidity through the proposed Market Maker Plus
program will create additional displayed liquidity in Non-Select
Symbols, and increase opportunities for market participants to trade,
which benefits all market participants in the quality of order
interaction.
---------------------------------------------------------------------------

    \40\ As discussed above, this discounted fee or rebate will be
provided in lieu of the base maker fee of $0.70 per contract.
---------------------------------------------------------------------------

    The Exchange believes that the proposed program is reasonable
because it is structured similarly to the existing program for Select
Symbols. As proposed, the Market Maker Plus Tier qualifications for
Non-Select Symbols, especially proposed Tier 2 and Tier 3, will be
slightly more stringent than the existing tiers for Select Symbols.\41\
Because Non-Select Symbols generally tend to trade less frequently and
may have wider NBBOs than Select Symbols, the Exchange believes the
proposed tier qualifications are set at appropriate levels that Market
Makers could potentially achieve if they choose to engage in the
program.
---------------------------------------------------------------------------

    \41\ For instance, the qualifications for the Market Maker Plus
Tiers in Select Symbols (other than SPY, QQQ, IWM, AMZN, FB, and
NVDA) are 85% to less than 95% for Tier 2, and 95% or greater for
Tier 3. In Non-Select Symbols, Tier 2 will be 90% to 98%, and Tier 3
will be 98% or greater.
---------------------------------------------------------------------------

    The Exchange believes that it is reasonable to reduce the
incentives for Market Makers that qualify for Tier 3 under the proposed
Market Maker Plus program if they trade against Priority Customer
orders to help offset the significantly competitive maker/taker pricing
proposed above for Priority Customers.\42\ Nonetheless, the proposed
Tier 3 incentives will still be higher than the proposed incentives in
Tier 1 and Tier 2, even if the qualifying Market Maker trades against a
Priority Customer, thereby ensuring that the proposed program will be
attractive to participating Market Makers.
---------------------------------------------------------------------------

    \42\ As proposed, qualifying Market Makers that trade against
Priority Customers will be assessed a fee of $0.10 per contract in
Tier 3 instead of receiving the $0.40 rebate that would be provided
to qualifying Market Makers that trade against non-Priority
Customers.
---------------------------------------------------------------------------

    The Exchange believes that it is reasonable to provide a reduced
incentive in Non-Select Symbols to Market Makers who do not qualify for
any Market Maker Plus tiers in a given month, but qualified for Market
Maker Plus Tier 2 or higher in at least four of the previous six
months. The Exchange provides a similar reduced rebate today for Select
Symbols that is the applicable Tier 2 rebate reduced by $0.08 per
contract. Because the proposed Tier 2 incentive for Non-Select Symbols
will be a fee instead of a rebate, the Exchange believes it is
appropriate to offer a reduced incentive that is the Tier 2 fee
increased by $0.08 per contract. Similar to the existing reduced rebate
for Select Symbols, the Exchange believes that this change will
preserve the intent of the Market Maker Plus program to reward strong
liquidity providers, and avoids penalizing participants while
continuing to require Market Makers to quote significantly at the NBBO.
    The Exchange believes that the proposed Market Maker Plus program
is equitable and not unfairly discriminatory as all Market Makers can
qualify for the same incentives under the proposed program.
Furthermore, the

Exchange believes it is equitable and not unfairly discriminatory to
offer these rebates to only Market Makers because Market Makers, and in
particular Market Makers that achieve Market Maker Plus status as
proposed, are subject to additional requirements and obligations (such
as quoting obligations) that other market participants are not.
Market Maker Discount Tiers in Non-Select Symbols
    The Exchange believes that it is reasonable to eliminate the Market
Maker discount tiers set forth in Options 7, Section 6.D. Because the
objective of the new Market Maker Plus program for Non-Select Symbols,
as discussed above, is to incentivize higher Market Maker activity in
Non-Select Symbols, similar to the discounted fee today, the Exchange
believes it is no longer necessary to offer the current incentive
alongside the new Market Maker Plus program. The Exchange believes that
eliminating the Market Maker discount tiers is equitable and not
unfairly discriminatory as it will apply uniformly to all similarly
situated market participants.
Flash Orders
    The Exchange believes that the proposed Flash Orders changes are
reasonable as they specify how the Exchange will charge Members for
Flash Orders with the introduction of maker/taker pricing in Non-Select
Symbols. Under the Exchange's proposal, all non-Priority Customers will
be charged a uniform taker fee of $0.72 per contract for initiating
Flash Orders in Non-Select Symbols, and a flat fee of $0.25 per
contract for responses to Flash Orders in Non-Select Symbols. Priority
Customers will continue to receive free executions in Non-Select
Symbols, regardless of initiating or responding to a Flash Order. As
discussed above, the pricing for the initiation and response to Flash
Orders in Select Symbols will remain unchanged for all market
participant types under this proposal.
    The Exchange believes that the proposed pricing for initiating and
responding to Flash Orders in Non-Select Symbols is equitable and not
unfairly discriminatory as the proposed fees would be more standardized
across non-Priority Customer market participant types. Furthermore, the
Exchange believes that it is equitable and not unfairly discriminatory
to continue charging no fees to Priority Customers for the initiation
and response to Flash Orders in Non-Select Symbols for the same reasons
discussed above for the proposed Priority Customer maker/taker
pricing--i.e., because Priority Customer order flow enhances liquidity
on the Exchange to the benefit of all market participants by providing
more trading opportunities.
    The Exchange believes it is reasonable to eliminate the $0.05 per
contract flash credit. The Exchange previously adopted this credit to
encourage Members to participate in the flash auction by responding to
a Priority Customer Flash Order. The Exchange no longer believes that
this incentive is necessary with the proposed changes to charge non-
Priority Customers a lower response fee of $0.25 per contract, and is
therefore removing it. The Exchange also believes that the proposed
removal of this credit is equitable and not unfairly discriminatory as
it will apply uniformly to all market participants. As proposed, no
market participant will be eligible for a flash credit.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.
    In terms of intra-market competition, the Exchange does not believe
that its proposal will place any category of market participant at a
competitive disadvantage. The Exchange believes that all of the changes
proposed above will incentivize market participants to direct liquidity
in Non-Select Symbols to the Exchange. While some aspects of the
proposal apply directly to Market Makers (through the new Market Maker
Plus program) and Priority Customers (through rebates or free
executions under the proposed maker/taker pricing model), the Exchange
believes that the proposed changes taken together will fortify and
encourage activity, especially liquidity adding activity, in Non-Select
Symbols. As noted above, all market participants will benefit from any
increase in market activity that the proposal effectuates.
    In terms of inter-market competition, the Exchange operates in a
highly competitive market in which market participants can readily
favor competing venues if they deem fee levels at a particular venue to
be excessive, or rebate opportunities available at other venues to be
more favorable. In such an environment, the Exchange must continually
adjust its fees to remain competitive with other exchanges. Because
competitors are free to modify their own fees in response, and because
market participants may readily adjust their order routing practices,
the Exchange believes that the degree to which fee changes in this
market may impose any burden on competition is extremely limited.
    Moreover, as noted above, price competition between exchanges is
fierce, with liquidity and market share moving freely between exchanges
in reaction to fee and rebate changes. In sum, if the changes proposed
herein are unattractive to market participants, it is likely that the
Exchange will lose market share as a result. Accordingly, the Exchange
does not believe that the proposed changes will impair the ability of
members or competing order execution venues to maintain their
competitive standing in the financial markets.

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

    No written comments were either solicited or received.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act,\43\ and Rule 19b-4(f)(2) \44\ thereunder.
At any time within 60 days of the filing of the proposed rule change,
the Commission summarily may temporarily suspend such rule change if it
appears to the Commission that such action is: (i) Necessary or
appropriate in the public interest; (ii) for the protection of
investors; or (iii) otherwise in furtherance of the purposes of the
Act. If the Commission takes such action, the Commission shall
institute proceedings to determine whether the proposed rule should be
approved or disapproved.
---------------------------------------------------------------------------

    \43\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \44\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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-2020-06 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-2020-06. 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-2020-06 and should be submitted on
or before March 24, 2020.
---------------------------------------------------------------------------

    \45\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\45\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-04290 Filed 3-2-20; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 80, Number 238 (Friday, December 11, 2015)]
[Notices]
[Pages 77072-77075]
[FR Doc No: 2015-31275]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76576; File No. SR-EDGX-2015-59]

Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Delete
Rule 22.10, Limitation on Dealings, Related to the EDGX Options Market

December 8, 2015.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on December 1, 2015, EDGX Exchange, Inc. (the ``Exchange'' or
``EDGX'') 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 Exchange
has designated this proposal as a ``non-controversial'' proposed rule
change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(6)(iii) thereunder,\4\ which renders it 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).
    \4\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

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

    The Exchange filed a proposal for the EDGX Options Market (``EDGX
Options'') to adopt a principles-based approach to prohibit the misuse
of material nonpublic information by Market Makers by deleting Rule
22.10 (Limitations on Dealings). The Exchange has designated this
proposal as non-controversial and provided the Commission with the
notice required by Rule 19b-4(f)(6)(iii) under the Act.\5\
---------------------------------------------------------------------------

    \5\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

    The text of the proposed rule change is available at the Exchange's
Web site at 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
    The Exchange proposes to adopt a principles-based approach to
prohibit the misuse of material non-public information by Market Makers
by deleting Rule 22.10 (Limitations on Dealings). In doing so, the
Exchange, with regard to EDGX Options, would harmonize its rules
governing Market Makers and Options Members that are not Market Makers
relating to the protection against misuse of material, non-public
information. The Exchange believes that Rule 22.10 is no longer
necessary because all Options Members, including Market Makers, are
subject to the Exchange's generally applicable principles-based
requirements governing the protection against the misuse of material,
non-public information, pursuant to Rule 5.5 (Prevention of the Misuse
of Material, Non-Public Information), which obviates the need for
separately prescribed requirements for a subset of Exchange
participants. Additionally, there is no separate regulatory purpose
served by having separate rules for Market Makers. The Exchange notes
that this proposed rule change will not decrease the protections
against the misuse of material, non-public information; instead, it is
designed to provide more flexibility to Options Members. This is a
competitive filing that is based on a proposal recently submitted by
NYSE MKT LLC (``NYSE MKT'') and approved by the Commission.\6\
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 75432 (July 13,
2015), 80 FR 42597 (July 17, 2015) (Order Approving SR-NYSEMKT-2015-
23).
---------------------------------------------------------------------------

Background
    The Exchange has two classes of EDGX Options participants.

Specifically, pursuant to Rule 16.1(a)(38), the term ``Options Member''
means a firm or organization that is registered with the Exchange
pursuant to Chapter XVII of the Rules for the purposes of participating
in options trading on EDGX Options either as an ``Options Order Entry
Firm'' or as an ``Options Market Maker.'' Pursuant to Rule 16.1(a)(36),
the terms ``Options Order Entry Firm'' or ``Order Entry Firm'' or
``OEF'' mean those Options Members representing as agent Customer
Orders on EDGX Options and those non-Market Maker Members conducting
proprietary trading. Pursuant to Rule 16.1(a)(37), the term ``Options
Market Maker'' or ``Market Maker'' means an Options Member registered
with the Exchange for the purpose of making markets in options
contracts traded on the Exchange and that is vested with the rights and
responsibilities specified in Chapter XXII of the Rules.
    Rule 22.5 (Obligations of Market Makers) describes the obligations
of Market Makers. Rule 22.6 (Market Maker Quotations) sets forth
quoting obligations of Market Makers.\7\ Rule 22.10 (Limitations on
Dealings) requires Market Makers to maintain information barriers that
are reasonably designed to prevent the misuse of material, non-public
corporate or markets information in the possession of persons on one
side of the information barrier by persons on the other side of the
information barrier.
---------------------------------------------------------------------------

    \7\ Rule 22.6 generally requires that Market Makers provide
firm, two-sided, continuous quotations, in minimum size, for the
options series to which it is registered.
---------------------------------------------------------------------------

Proposed Rule Change
    The Exchange believes that the particularized guidelines for Market
Makers in Rule 22.10 are no longer necessary and proposes to delete
Rule 22.10. The Exchange believes that Rule 5.5 (Prevention of the
Misuse of Material, Nonpublic Information), which governs the misuse of
material, non-public information and applies to all Members (including
Options Members), provides an appropriate, principles-based approach to
prevent the market abuses that Rule 22.10 seeks to address.
Specifically, Rule 5.5 requires every Member (including Options
Members) to establish, maintain, and enforce written policies and
procedures reasonably designed to prevent the misuse of material, non-
public information by such Member or persons associated with such
Member. For purposes of Rule 5.5, the misuse of material, non-public
information includes, but is not limited to, the following:
    (1) Trading in any securities issued by a corporation, or in any
related securities or related options or other derivative securities,
while in possession of material, non-public information concerning that
issuer;
    (2) Trading in a security or related options or other derivative
securities, while in possession of material, non-public information
concerning imminent transactions in the security or related securities;
and
    (3) Disclosing to another person or entity any material nonpublic
information involving a corporation whose shares are publicly traded or
an imminent transaction in an underlying security or related securities
for the purpose of facilitating the possible misuse of such material
nonpublic information.
    Because Options Members are already subject to the requirements of
Rule 5.5, the Exchange does not believe that it is necessary to
separately require particularized limitations on Market Makers.
Deleting Rule 22.10, with its particularized limitations would provide
Market Makers with the flexibility to adapt their policies and
procedures as appropriate to reflect changes to their business model,
business activities, or the securities market in a manner similar to
how Options Members on the Exchange currently operate in conformity
with Rule 5.5.
    As noted above, Market Makers are distinguished under Exchange
rules from other Options Members only to the extent that Market Makers
have heightened quoting obligations. However, such heightened quoting
obligations do not afford different or greater access to nonpublic
information than any other Options Member of the Exchange.\8\
Therefore, because Market Makers do not have any trading advantages
over Order Entry Firms on EDGX Options, the Exchange believes that they
should be subject to the same rules regarding the protection against
the misuse of material non-public information, which in this case, is
existing Rule 5.5.
---------------------------------------------------------------------------

    \8\ The Exchange notes that by deleting Rule 22.10, the Exchange
would no longer require specific information barriers for Market
Makers; however, as is the case currently with Options Members,
information barriers of new participants would be subject to review
as part of a new firm application. Moreover, the policies and
procedures of Market Makers, including those relating to any
information barriers, would be subject to review by FINRA, on behalf
of the Exchange, pursuant to a Regulatory Services Agreement.
---------------------------------------------------------------------------

    The Exchange notes that its proposed approach to use a principles-
based approach to protecting against the misuse of material non-public
information for all of its registered Options Members is consistent
with recently approved rule changes for NYSE MKT and recently filed
changes for the options platform of BATS Exchange, Inc. (``BATS
Options''), the International Securities Exchange LLC (``ISE''), and
the Boston Options Exchange LLC (``BOX'').\9\ Each of these exchanges
has moved to a principles-based approach to protecting against the
misuse of material non-public information. In connection with approving
those rule changes, the Commission found that, with adequate oversight
by the exchanges of their members, eliminating prescriptive information
barrier requirements should not reduce the effectiveness of exchange
rules requiring its members to establish and maintain systems to
supervise the activities of its members, including written procedures
reasonably designed to ensure compliance with applicable federal
securities law and regulations, and with the rules of the applicable
exchange.\10\
---------------------------------------------------------------------------

    \9\ See Securities Exchange Act Release No. 75432 (July 13,
2015), 80 FR 42597 (July 17, 2015) (Order Approving Adopting a
Principles-Based Approach to Prohibit the Misuse of Material
Nonpublic Information by Specialists and e-Specialists by Deleting
Rule 927.3NY and Section (f) of Rule 927.5NY); See also Securities
Exchange Act Release Nos. 76327 (November 2, 2015), 80 FR 68884
(November 6, 2015) (SR-BATS-2015-93) (Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change To Delete Rule 22.10,
Limitations on Dealings); 75792 (August 31, 2015), 80 FR 53601
(September 4, 2015) (SR-ISE-2015-26) (Notice of Filing and Immediate
Effectiveness of Proposed Rule Change Adopting a Principles-Based
Approach To Prohibit the Misuse of Material, Non-Public Information
by Market Makers by Deleting Rule 810); 75916 (September 14, 2015),
80 FR 56503 (September 18, 2015) (SR-BOX-2015-31) (Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Adopt a
Principles-Based Approach To Prohibit the Misuse of Material
Nonpublic Information by Market Makers).
    \10\ Id.
---------------------------------------------------------------------------

    The Exchange believes that a principles-based rule applicable to
members of options markets would be effective in protecting against the
misuse of material non-public information. Indeed, Exchange Rule 5.5 is
currently applicable to Options Members and already requires policies
and procedures reasonably designed to prevent the misuse of material
nonpublic information. The Exchange believes that Rule 5.5 provides
appropriate protection against the misuse of material nonpublic
information by Options Members and that there is no longer a need for
prescriptive information barrier requirements set forth in Rule 22.10.

    The Exchange notes that even with this proposed rule change and the
elimination of the requirement that the Exchange pre-approve a Member's
policies and procedures, pursuant to Rule 5.5, an Options Member would
still be obligated to ensure that its policies and procedures reflect
the current state of its business and continue to be reasonably
designed to achieve compliance with applicable federal securities law
and regulations, including Section 15(g) of the Act,\11\ and with
applicable Exchange rules, including being reasonably designed to
protect against the misuse of material, non-public information. Thus,
the Exchange does not believe there will be any material change to
Member's information barriers as a result of the Exchange's pre-
approval no longer being required. In fact, the Exchange anticipates
that the lack of such pre-approval would facilitate Market Maker's
ability to more quickly implement changes to their information barrier
as necessary to protect against the misuse of material, non-public
information.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78o(g).
---------------------------------------------------------------------------

    The Exchange is not proposing to change what is considered to be
material, non-public information and, thus, would not expect there to
be any changes to the types of information that an affiliated brokerage
business of a Market Maker could share with such Market Maker. In
addition, the Exchange notes that the proposed rule change would not
permit the affiliates of a Market Maker to have access to any non-
public order or quote information of the Market Maker, including
information regarding the non-displayed size of reserve orders.\12\
Affiliates of Market Makers would only be permitted to have access to
orders and quotes that are publicly available to all market
participants.
---------------------------------------------------------------------------

    \12\ The Exchange notes that, like NYSE MKT, the Exchange does
not offer reserve orders, which are orders with a displayed price
and size as well as a non-displayed size.
---------------------------------------------------------------------------

    While information barriers would not specifically be required under
the proposal, Rule 5.5 already requires that an Options Member consider
its business model or business activities in structuring its policies
and procedures, which may dictate that an information barrier or a
functional separation be part of the appropriate set of policies and
procedures that would be reasonably designed to achieve compliance with
applicable securities law and regulations, and with applicable Exchange
rules.
    The Exchange believes that the proposed reliance on the principles-
based Rule 5.5 would ensure that an Options Member would be required to
protect against the misuse of any material non-public information. As
noted above, Rule 5.5 already requires that Members refrain from
trading while in possession of material non-public information
concerning imminent transactions in the security or related product.
The Exchange believes that moving to a principles-based approach rather
than prescribing particularized information barriers applicable to
Market Makers would provide Market Makers with flexibility when
managing risk across a firm, including integrating options positions
with other positions of the firm or, as applicable, by the respective
independent trading unit.
2. Statutory Basis
    The Exchange believes that its proposal 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(b) of the Act.\13\ In particular,
the proposal is consistent with Section 6(b)(5) of the Act \14\ because
it is designed to prevent fraudulent and manipulative acts and
practices, would promote just and equitable principles of trade, remove
impediments to, and perfect the mechanism of, a free and open market
and a national market system, and, in general protect investors and the
public interest.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change would remove
impediments to and perfect the mechanism of a free and open market by
adopting a principles-based approach to permit an Options Member to
maintain and enforce policies and procedures to, among other things,
prohibit the misuse of material non-public information and provide
flexibility on how a Market Maker structures its operations. The
Exchange notes that the proposed rule change is based upon an approved
rule of the Exchange to which Options Members are subject--Rule 5.5--
and the proposed change harmonizes the rules governing Options Members.
Moreover, Market Makers would continue to be subject to federal and
Exchange requirements for protecting material non-public order
information.\15\ The Exchange believes that the proposed rule change
would remove impediments to and perfect the mechanism of a free and
open market because it would harmonize the Exchange's approach to
protecting against the misuse of material nonpublic information and no
longer subject Market Makers to particularized prescriptive
requirements. The Exchange does not believe that the existing
prescriptive requirements applicable to Options Market Makers are
narrowly tailored to their respective role because Market Makers do not
have access to Exchange trading information in a manner different from
any other Options Member that is not a Market Maker.
---------------------------------------------------------------------------

    \15\ See 15 U.S.C. 78o(g) and Rule 5.5.
---------------------------------------------------------------------------

    The Exchange further believes the proposal is designed to prevent
fraudulent and manipulative acts and practices and to promote just and
equitable principles of trade because existing rules make clear to
Options Members the type of conduct that is prohibited by the Exchange.
While the proposal eliminates certain prescriptive requirements
relating to the misuse of material non-public information, Market
Makers would remain subject to existing Exchange rules requiring them
to establish and maintain systems to supervise their activities, and to
create, implement, and maintain written procedures that are reasonably
designed to comply with applicable securities laws and Exchange rules,
including the prohibition on the misuse of material, nonpublic
information. Additionally, the policies and procedures of Market
Makers, including those relating to information barriers, would be
subject to review by FINRA, on behalf of the Exchange.\16\
---------------------------------------------------------------------------

    \16\ See supra, note 8.
---------------------------------------------------------------------------

    The Exchange notes that the proposed rule change would still
require that Market Makers maintain and enforce policies and procedures
reasonably designed to ensure compliance with applicable federal
securities laws and regulations and with Exchange rules. Even though
there would no longer be particularized Market Maker information
barriers, any Market Maker written policies and procedures would
continue to be subject to oversight by the Exchange and therefore the
elimination of prescribed requirements should not reduce the
effectiveness of the Exchange rules to protect against the misuse of
material non-public information. Rather, all Options Members will be
able to utilize a flexible, principles-based approach to modify their
policies and procedures as appropriate to reflect changes to their
business model, business activities, or to the securities market
itself. Moreover, while particularized information barriers may no
longer be required, an

Options Member's business model or business activities may dictate that
an information barrier or functional separation be part of the
appropriate set of policies and procedures that would be reasonably
designed to achieve compliance with applicable securities laws and
regulations, and with applicable Exchange rules. The Exchange therefore
believes that the proposed rule change will maintain the existing
protection of investors and the public interest that is currently
applicable to Market Makers, while at the same time removing
impediments to and perfecting a free and open market by moving to a
principles-based approach to protect against the misuse of material
non-public information.

(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. In this regard and as
indicated above, the Exchange notes that the rule change is being
proposed as a competitive response to a filing submitted by NYSE MKT
that was recently approved by the Commission.\17\ The Exchange believes
this proposed rule change is necessary to permit fair competition among
the options exchanges.
---------------------------------------------------------------------------

    \17\ See supra, note 6.
---------------------------------------------------------------------------

    The Exchange believes that the proposal will enhance competition by
allowing Market Makers to comply with applicable Exchange rules in a
manner best suited to their business models, business activities, and
the securities markets, thus reducing regulatory burdens while still
ensuring compliance with applicable securities laws and regulations and
Exchange rules. The Exchange believes that the proposal will foster a
fair and orderly marketplace without being overly burdensome upon
Market Makers.

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

    The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any written comments from members or other interested parties.

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

    Because the foregoing proposed rule change does not: (A)
Significantly affect the protection of investors or the public
interest; (B) impose any significant burden on competition; and (C) by
its terms, 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 \18\ and
paragraph (f)(6) of Rule 19b-4 thereunder,\19\ the Exchange has
designated this rule filing as non-controversial. The Exchange has
given the Commission written notice of its intent to file the proposed
rule change, along with a brief description and text of the proposed
rule change at least five business days prior to the date of filing of
the proposed rule change, or such shorter time as designated by the
Commission.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78s(b)(3)(A).
    \19\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

    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: (1)
Necessary or appropriate in the public interest; (2) for the protection
of investors; or (3) 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-EDGX-2015-59 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
    All submissions should refer to File Number SR-EDGX-2015-59. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing will also 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-EDGX-2015-59 and should be
submitted on or before January 4, 2016.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
---------------------------------------------------------------------------

    \20\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-31275 Filed 12-10-15; 8:45 am]
 BILLING CODE 8011-01-P