77328 Federal Register / Vol. 85, No. 231 / Tuesday, December 1, 2020 / Notices 

7See Securities Exchange Act Release No. 89536 

(August 12, 2020), 85 FR 51250 (August 19, 2020). 

8 15 U.S.C. 78s(b)(2). 

9See Original Notice, supra note 3. 10 Id. 

11 17 CFR 200.30–3(a)(57). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

proposed rule change, as modified by 

Amendment No. 1.7

Section 19(b)(2) of the Act 8 provides 

that, after initiating disapproval 

proceedings, the Commission shall issue 

an order approving or disapproving the 

proposed rule change not later than 180 

days after the date of publication of 

notice of filing of the proposed rule 

change. The Commission may extend 

the period for issuing an order 

approving or disapproving the proposed 

rule change, however, by not more than 

60 days if the Commission determines 

that a longer period is appropriate and 

publishes the reasons for such 

determination. The proposed rule 

change was published for notice and 

comment in the Federal Register on 

June 1, 2020.9 November 28, 2020 is 180 

days from that date, and January 27, 

2021 is 240 days from that date. The 

Commission finds it appropriate to 

designate a longer period within which 

to issue an order approving or 

disapproving the proposed rule change 

so that it has sufficient time to consider 

the proposed rule change. Accordingly, 

the Commission, pursuant to Section 

19(b)(2) of the Act,10 designated January 

27, 2021 as the date by which the 

Commission shall either approve or 

disapprove the proposed rule change, as 

modified by Amendment No. 1 (File No. 

SR–BOX–2020–14). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–26411 Filed 11–30–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90501; File No. SR–ISE– 

2020–39] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change to an Amendment to 

Options 7, Section 4, Related to 

Complex Orders Fees and Rebates, 

and Options 7, Section 9 

November 24, 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 November 

13, 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Options 7, Section 4, ‘‘Complex Order 

Fees and Rebates,’’ and Options 7, 

Section 9, ‘‘Legal & Regulatory.’’ 

The Exchange originally filed the 

proposed pricing change on November 

2, 2020 (SR–ISE–2020–37). On 

November 12, 2020, the Exchange 

withdrew that filing and is submitting 

this replacement filing on November 13, 

2020. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/ise/rules, at the principal 

office of the Exchange, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

Options 7, Section 4, ‘‘Complex Order 

Fees and Rebates,’’ and Options 7, 

Section 9, ‘‘Legal & Regulatory.’’ Each 

change will be described below. 

Options 7, Section 4 

Priority Customer Rebates for Complex 

Orders 

The Exchange’s proposal to amend 

Options 7, Section 4, ‘‘Complex Order 

Fees and Rebates’’ is intended to offer 

Members an ability to earn higher 

Priority Customer Complex Order 

rebates. Specifically, the Exchange 

proposes to amend Priority Customer 

Complex Order Tiers 8 and 9 and add 

a new Tier 10. Today, the Exchange 

pays rebates to Priority Customers 

pursuant to the below tier schedule. 

PRIORITY CUSTOMER REBATES

Priority customer 

complex tier(7) (13) (16)

Total affiliated member or affiliated entity complex order volume (excluding 

crossing orders and responses to crossing orders) calculated as a percentage 

of customer total consolidated volume 

Rebate 

for select 

symbols (1)

Rebate for 

non-select 

symbols (1) (4)

Tier 1 .................................. 0.000%–0.200% ...................................................................................................... ($0.25) ($0.40) 

Tier 2 .................................. Above 0.200%–0.400% .......................................................................................... (0.30) (0.55) 

Tier 3 .................................. Above 0.400%–0.450% .......................................................................................... (0.35) (0.70) 

Tier 4 .................................. Above 0.450%–0.750% .......................................................................................... (0.40) (0.75) 

Tier 5 .................................. Above 0.750%–1.000% .......................................................................................... (0.45) (0.80) 

Tier 6 .................................. Above 1.000%–1.350% .......................................................................................... (0.47) (0.80) 

Tier 7 .................................. Above 1.350%–2.000% .......................................................................................... (0.48) (0.80) 

Tier 8 .................................. Above 2.000%–2.600% .......................................................................................... (0.50) (0.85) 

Tier 9 .................................. Above 2.600% ........................................................................................................ (0.52) (0.85) 


khammond on DSKJM1Z7X2PROD with NOTICES4
Federal Register / Vol. 85, No. 231 / Tuesday, December 1, 2020 / Notices 77329 

3 ‘‘Select Symbols’’ are options overlying all 

symbols listed on the Nasdaq ISE that are in the 

Penny Interval Program. See Options 7, Section 

1(b). 

4 ‘‘Non-Select Symbols’’ are options overlying all 

symbols excluding Select Symbols. See Options 7, 

Section 1(b). 

First, the Exchange proposes to 

amend the criteria to qualify for Tiers 8 

and 9 and certain rebates as discussed 

below. 

Today, Tier 8 of the Complex Order 

Priority Customer Rebates requires 

Members to submit above 2.000%– 

2.60% of Total Affiliated Member or 

Affiliated Entity Complex Order Volume 

(Excluding Crossing Orders and 

Responses to Crossing Orders) 

Calculated as a Percentage of Customer 

Total Consolidated Volume in order to 

receive a $0.50 per contract rebate for 

Select Symbols 3 and an $0.85 per 

contract rebate for Non-Select Symbols.4

The Exchange proposes to amend the 

qualifications of Tier 8 to require 

Members to submit above 2.000%– 

2.750% of Total Affiliated Member or 

Affiliated Entity Complex Order Volume 

(Excluding Crossing Orders and 

Responses to Crossing Orders) 

Calculated as a Percentage of Customer 

Total Consolidated Volume to receive 

an increased $0.52 per contract rebate 

for Select Symbols and continue to 

receive an $0.85 per contract rebate for 

Non-Select Symbols. The Exchange is 

both amending the qualifications for 

Tier 8 and increasing the rebate for 

Select Symbols with this proposal. A 

Member who qualified for Tier 8 in a 

prior month, with above 2.000% to 

2.60% of Total Affiliated Member or 

Affiliated Entity Complex Order Volume 

(Excluding Crossing Orders and 

Responses to Crossing Orders) 

Calculated as a Percentage of Customer 

Total Consolidated Volume (‘‘Current 

Tier 8 Volume’’), would continue to 

qualify for Tier 8 rebates with this 

proposal if that same amount of volume 

was submitted. The Member would 

qualify for an increased Tier 8 Rebate 

for Select Symbols of $0.52 per contract 

when submitting Current Tier 8 Volume 

and the same $0.85 per contract Tier 8 

Rebate for Non-Select Symbols. 

Today, Tier 9 of the Complex Order 

Priority Customer Rebates requires 

Members to submit above 2.600% of 

Total Affiliated Member or Affiliated 

Entity Complex Order Volume 

(Excluding Crossing Orders and 

Responses to Crossing Orders) 

Calculated as a Percentage of Customer 

Total Consolidated Volume in order to 

receive a $0.52 per contract rebate for 

Select Symbols and an $0.85 per 

contract rebate for Non-Select Symbols. 

The Exchange proposes to amend the 

qualifications of Tier 9 to require 

Members to submit above 2.750%– 

4.500% of Total Affiliated Member or 

Affiliated Entity Complex Order Volume 

(Excluding Crossing Orders and 

Responses to Crossing Orders) 

Calculated as a Percentage of Customer 

Total Consolidated Volume to continue 

to receive a $0.52 per contract rebate for 

Select Symbols and an increased $0.86 

per contract rebate for Non-Select 

Symbols. The Exchange is both 

amending the qualifications for Tier 9 

and increasing the rebate for Non-Select 

Symbols with this proposal. A Member 

who qualified for Tier 9 in a prior 

month, with above 2.600% of Total 

Affiliated Member or Affiliated Entity 

Complex Order Volume (Excluding 

Crossing Orders and Responses to 

Crossing Orders) Calculated as a 

Percentage of Customer Total 

Consolidated Volume (‘‘Current Tier 9 

Volume’’), may continue to qualify for 

Tier 9 rebates with this proposal if the 

Member submitted greater than 2.750% 

volume Calculated as a Percentage of 

Customer Total Consolidated Volume. A 

Member who submitted the same 

amount of volume as in the prior month 

would receive either: (1) An increased 

Tier 8 Rebate for Select Symbols of 

$0.52 per contract and the same $0.85 

per contract Rebate for Non-Select 

Symbols; or (2) the same Tier 9 Rebate 

for Select Symbols of $0.52 per contract 

and an increased $0.86 per contract 

Rebate for Non-Select Symbols, 

depending on the Member’s volume 

Calculated as a Percentage of Customer 

Total Volume. Also, with this proposal, 

a Member would have the opportunity 

to qualify for increased Tier 10 rebates 

of $0.53 per contract for Select Symbols 

and $0.88 per contract for Non-Select 

Symbols by submitting above 4.500% of 

Total Affiliated Member or Affiliated 

Entity Complex Order Volume 

(Excluding Crossing Orders and 

Responses to Crossing Orders) 

Calculated as a Percentage of Customer 

Total Consolidated Volume. 

Second, the Exchange proposes to add 

a new Priority Customer Complex Order 

Tier 10 which requires Members to 

submit above 4.500% of Total Affiliated 

Member or Affiliated Entity Complex 

Order Volume (Excluding Crossing 

Orders and Responses to Crossing 

Orders) Calculated as a Percentage of 

Customer Total Consolidated Volume to 

receive a $0.53 per contract rebate for 

Select Symbols and an $0.88 per 

contract rebate for Non-Select Symbols. 

This new Tier 10 would offer Members 

an opportunity to earn higher Priority 

Customer Complex Order rebates on 

ISE. 

The Exchange believes that amending 

Priority Customer Complex Order 

Rebate Tiers 8 and 9 and adding a new 

Tier 10 will attract a greater amount of 

Priority Customer Complex Order 

volume to ISE. 

Maker and Taker Fees for Complex 

Orders 

Today, the Exchange assesses certain 

Maker and Taker Fees for Complex 

Orders transacted on ISE as follows: 

MAKER AND TAKER FEES

Market participant 

Maker fee 

for select 

symbols 

Maker fee for 

non-select 

symbols 

Maker fee 

for select 

symbols 

when trading 

against 

priority 

customer 

Maker fee for 

non-select 

symbols 

when trading 

against 

priority 

customer 

Taker fee for 

select 

symbols 

Taker fee for 

non-select 

symbols 

Market Maker ........................................... $0.10 $0.20 (3) $0.47 $0.86 (3) $0.50 (8) $0.86 

Non-Nasdaq ISE Market Maker (FarMM) 0.20 0.20 0.48 0.88 0.50 (8) 0.88 

Firm Proprietary/Broker-Dealer ................ 0.10 0.20 0.48 0.88 0.50 (8) 0.88 

Professional Customer ............................. 0.10 0.20 0.48 0.88 0.50 (8) 0.88 

Priority Customer ..................................... 0.00 0.00 0.00 0.00 0.00 0.00 


khammond on DSKJM1Z7X2PROD with NOTICES4
77330 Federal Register / Vol. 85, No. 231 / Tuesday, December 1, 2020 / Notices 

5 15 U.S.C. 78f(b). 

6 15 U.S.C. 78f(b)(4) and (5). 

7Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) 

(‘‘Regulation NMS Adopting Release’’). 

8NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 

2010). 

9See NetCoalition, at 534–535. 

10 Id. at 537. 

11 Id. at 539 (quoting Securities Exchange Act 

Release No. 59039 (December 2, 2008), 73 FR 

74770, 74782–83 (December 9, 2008) (SR– 

NYSEArca–2006–21)). 

Current note 3 of Options 7, Section 

4, which applies to orders for Market 

Makers who qualify for the Complex 

Order Maker Fee for Select Symbols 

when trading against Priority Customer 

Complex Orders and the Complex Order 

Taker Fee for Select Symbols, states, 

‘‘This fee is $0.47 per contract for 

Market Makers that achieve Priority 

Customer Complex Tier 8 and $0.44 per 

contract for Market Makers that achieve 

Priority Customer Complex Tier 9.’’ 

Current note 8 of Options 7, Section 4 

which applies to Complex Orders of 

Market Makers, Non-Nasdaq ISE Market 

Makers (FarMM), Firm Proprietary/ 

Broker-Dealers, and Professional 

Customers who qualify for the Complex 

Order Taker Fee for Non-Select 

Symbols, states, ‘‘A $0.05 per contract 

surcharge will be assessed to nonPriority Customer Complex Orders that 

take liquidity from the Complex Order 

Book, excluding Complex Orders 

executed in the Facilitation Mechanism, 

Solicited Order Mechanism, Price 

Improvement Mechanism and 

‘‘exposure’’ auctions pursuant to 

Options 3, Section 14(c)(3).’’ 

The Exchange proposes to increase 

the Complex Order Maker Fees for 

Select Symbols when trading against 

Priority Customer for Market Makers 

from $0.47 to $0.50 per contract. The 

Exchange also proposes to increase the 

Complex Order Maker Fees for Select 

Symbols when trading against Priority 

Customer for Non-Nasdaq ISE Market 

Makers (FarMM), Firm Proprietary/ 

Broker-Dealers, and Professional 

Customers from $0.48 to $0.50 per 

contract. Priority Customers would 

continue to pay no Complex Order 

Maker Fees for Select Symbols when 

trading against Priority Customer. 

In addition, the Exchange proposes to 

amend note 3 which is applicable to the 

aforementioned Complex Order Maker 

and Taker Fees by instead providing, 

‘‘This fee is $0.49 per contract for 

Market Makers that achieve Priority 

Customer Complex Tier 8, $0.47 per 

contract for Market Makers that achieve 

Priority Customer Complex Tier 9, and 

$0.44 per contract for Market Makers 

that achieve Priority Customer Complex 

Tier 10.’’ 

While the Exchange is increasing the 

Complex Order Maker Fees for Select 

Symbols when trading against Priority 

Customers, Market Makers, Non-Nasdaq 

ISE Market Makers (FarMM), Firm 

Proprietary/Broker-Dealers, and 

Professional Customers who qualify for 

Priority Customer Complex Order Tiers 

8 and 9 or new Tier 10, would continue 

to receive lower Complex Order Maker 

Fees, which is intended to incentive 

these Members to transact a greater 

amount of Priority Customer Complex 

Orders on ISE. 

Technical Amendments 

The Exchange proposes to remove 

reserved note 17 within Options 7, 

Section 4 because this note is not 

necessary. The Exchange also proposes 

to remove obsolete date references and 

an obsolete rate within Options 7, 

Section 9.C. related to the Options 

Regulatory Fee. The dates refer to past 

dates. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,5 in general, and furthers the 

objectives of Sections 6(b)(4) and 6(b)(5) 

of the Act,6 in particular, in that it 

provides for the equitable allocation of 

reasonable dues, fees and other charges 

among members and issuers and other 

persons using any facility, and is not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

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.’’ 7

Likewise, in NetCoalition v. Securities 

and Exchange Commission 8

(‘‘NetCoalition’’) the D.C. Circuit upheld 

the Commission’s use of a market-based 

approach in evaluating the fairness of 

market data fees against a challenge 

claiming that Congress mandated a costbased approach.9 As the court 

emphasized, the Commission ‘‘intended 

in Regulation NMS that ‘market forces, 

rather than regulatory requirements’ 

play a role in determining the market 

data . . . to be made available to 

investors and at what cost.’’ 10

Further, ‘‘[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 brokerdealers 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’. . . .’’ 11 Although the court 

and the SEC were discussing the cash 

equities markets, the Exchange believes 

that these views apply with equal force 

to the options markets. 

Options 7, Section 4 

Priority Customer Rebates for Complex 

Orders 

The Exchange’s proposal to amend 

the qualifications of Tier 8, to require 

Members to submit above 2.000%– 

2.750% of Total Affiliated Member or 

Affiliated Entity Complex Order Volume 

(Excluding Crossing Orders and 

Responses to Crossing Orders) 

Calculated as a Percentage of Customer 

Total Consolidated Volume in order to 

receive an increase $0.52 per contract 

rebate for Select Symbols and continue 

to receive an $0.85 per contract rebate 

for Non-Select Symbols, and its 

proposal to amend the qualifications of 

Tier 9, to require Members to submit 

above 2.750%–4.500% of Total 

Affiliated Member or Affiliated Entity 

Complex Order Volume (Excluding 

Crossing Orders and Responses to 

Crossing Orders) Calculated as a 

Percentage of Customer Total 

Consolidated Volume to continue to 

receive a $0.52 per contract rebate for 

Select Symbols and an increased $0.86 

per contract rebate for Non-Select 

Symbols, are reasonable. The Exchange 

believes amending Priority Customer 

Complex Order Tiers 8 and 9 will attract 

a greater amount of Priority Customer 

Complex Order volume to ISE. 

Specifically, Members who desire to 

qualify for the increased $0.52 per 

contract rebate for Select Symbols in 

Tier 8 or continue to qualify for an $0.85 

per contract rebate for Non-Select 

Symbols in Tier 8 or Members who 

desire to continue to qualify for the 

$0.52 per contract rebate in Select 

Symbols for Tier 9 or an increased $0.86 

per contract rebate for Non-Select 

Symbols in Tier 9 will be encouraged to 

submit the requisite order flow to obtain 

the same or higher rebates. With respect 

to Priority Customer Complex Order 

Tier 8, the Exchange notes that the 


khammond on DSKJM1Z7X2PROD with NOTICES4
Federal Register / Vol. 85, No. 231 / Tuesday, December 1, 2020 / Notices 77331 

12Today, Tier 8 of the Complex Order Priority 

Customer Rebates pays rebates to Members who 

submit above 2.000%–2.60% of Total Affiliated 

Member or Affiliated Entity Complex Order Volume 

(Excluding Crossing Orders and Responses to 

Crossing Orders) Calculated as a Percentage of 

Customer Total Consolidated Volume. With this 

proposal, Members who submit above 2.000%– 

2.750% of Total Affiliated Member or Affiliated 

Entity Complex Order Volume (Excluding Crossing 

Orders and Responses to Crossing Orders) 

Calculated as a Percentage of Customer Total 

Consolidated Volume are entitled to rebates. 

13The Exchange notes that the propose Tier 8 

Rebate for Select Symbols and the Tier 9 Rebate for 

Select Symbols, which remains unchanged, are both 

$0.52 per contract. 

proposed amendment should not result 

in lower rebates for any Member 

submitting the same Complex Order 

volume as the Member submitted in the 

prior month. With respect to Priority 

Customer Complex Order Tier 9, 

Members who qualified for Tier 8 in a 

prior month with Current Tier 8 

Volume 12 would continue to qualify for 

Tier 8 rebates with this proposal if that 

same amount of volume was submitted 

and would receive an increased Tier 8 

Rebate for Select Symbols of $0.52 per 

contract and the same $0.85 per contract 

Rebate for Non-Select Symbols. In 

addition, the Member may earn 

increased Tier 9 13 or Tier 10 rebates if 

the Member submitted additional 

qualifying volume. Therefore, the 

Member would receive the same or 

higher Tier 8 rebates. 

Members who qualified for Tier 9 in 

a prior month with Current Tier 9 

Volume may continue to qualify for Tier 

9 rebates with this proposal if the 

Member submitted greater than 2.750% 

volume and would receive either: (1) An 

increased Tier 8 Rebate for Select 

Symbols of $0.52 per contract and the 

same $0.85 per contract Rebate for NonSelect Symbols; or (2) the same Tier 9 

Rebate for Select Symbols of $0.52 per 

contract and an increased $0.86 per 

contract Rebate for Non-Select Symbols, 

depending on the Member’s volume 

Calculated as a Percentage of Customer 

Total Consolidated Volume. Despite the 

increase required in Complex Order 

volume for Priority Customer Complex 

Order Tier 9, the Exchange’s proposal 

offers Members an opportunity to earn 

the same or higher Tier 9 rebates. Also, 

with this proposal, a Member would 

have the opportunity to qualify for 

increased Tier 10 rebates of $0.53 per 

contract for Select Symbols and $0.88 

per contract for Non-Select Symbols by 

submitting above 4.500% of Total 

Affiliated Member or Affiliated Entity 

Complex Order Volume (Excluding 

Crossing Orders and Responses to 

Crossing Orders) Calculated as a 

Percentage of Customer Total 

Consolidated Volume. The Priority 

Customer Complex Order rebate 

program is optional and available to all 

Members that choose to transact 

Complex Order flow on ISE in order to 

earn a rebate on their Priority Customer 

Complex Order volume. To the extent 

the program, as modified, continues to 

attract Complex Order volume to the 

Exchange, the Exchange believes that 

the proposed changes would improve 

the Exchange’s overall competitiveness 

and strengthen its market quality for all 

market participants. 

The Exchange’s proposal to add a new 

Priority Customer Complex Order Tier 

10, which requires Members to submit 

above 4.500% of Total Affiliated 

Member or Affiliated Entity Complex 

Order Volume (Excluding Crossing 

Orders and Responses to Crossing 

Orders) Calculated as a Percentage of 

Customer Total Consolidated Volume in 

order to receive a $0.53 per contract 

rebate for Select Symbols and an $0.88 

per contract rebate for Non-Select 

Symbols is reasonable. The Exchange 

believes proposed new Tier 10 will 

attract a greater amount of Priority 

Customer Complex Order volume to ISE 

as the Exchange proposes to pay $0.53 

per contract rebate for Select Symbols 

and $0.88 per contract rebate for NonSelect Symbols, the highest Priority 

Customer Complex Order rebates for 

that order flow. 

The Exchange’s proposals to amend 

the tier qualifications for Priority 

Customer Complex Order Tiers 8 and 9, 

increase the Select Symbol rebate in 

Tier 8, increase the Non-Select Symbol 

rebate in Tier 9, and add a new Priority 

Customer Complex Order Tier 10 with 

rebates of $0.53 per contract for Select 

Symbols and $0.88 per contract for NonSelect Symbols are equitable and not 

unfairly discriminatory. Any ISE 

Member may qualify for a Priority 

Customer Complex Order rebate tier, 

provided the qualifications are met. By 

encouraging all Members to transact 

significant amounts of Priority Customer 

Complex Order flow (i.e., to qualify for 

the higher tiers) in order to earn a higher 

rebate on their Priority Customer 

Complex Orders, the Exchange seeks to 

provide more trading opportunities for 

all market participants, thereby 

promoting price discovery, and 

improving the overall market quality of 

the Exchange. ISE would uniformly pay 

rebates to Members that qualified for 

Priority Customer Complex Order 

rebates. The Exchange anticipates all 

Members that currently qualify for the 

Tier 8 or 9 Priority Customer Complex 

Order rebates will receive the same or 

higher rebates with this proposal. Also, 

any Member may qualify for the new 

Tier 10 Priority Customer Complex 

Order rebate to earn even higher rebates. 

To the extent the proposed changes 

encourage additional Members to strive 

for the modified tiers and thus attract 

more Priority Customer Complex Order 

volume to the Exchange, this increased 

order flow would improve the overall 

quality and attractiveness of the 

Exchange. 

Maker and Taker Fees for Complex 

Orders 

The Exchange’s proposal to increase 

the Complex Order Maker Fees for 

Select Symbols when trading against 

Priority Customer for Market Makers 

from $0.47 to $0.50 per contract and to 

increase the Complex Order Maker Fees 

for Select Symbols when trading against 

Priority Customer for Non-Nasdaq ISE 

Market Makers (FarMM), Firm 

Proprietary/Broker-Dealers, and 

Professional Customers from $0.48 to 

$0.50 per contract is reasonable because 

while the Exchange is proposing to 

increase these fees, the Exchange 

believes that market participants will 

continue to be incentivized to send 

Priority Customer order flow to ISE to 

obtain rebates offered by the Exchange. 

Additionally, Market Makers would 

continue to be offered the opportunity 

to reduce their Complex Order Maker 

Fees. If a Market Maker qualifies for 

Priority Customer Complex Order Tiers 

8 and 9, the Complex Order Maker Fee 

would be reduced to $0.49 and $0.47 

per contract, respectively. In addition, a 

Market Maker that qualifies for Priority 

Customer Complex Order Tier 10 would 

reduce the Complex Order Maker Fees 

to $0.44 per contract. Finally, Priority 

Customers will continue to pay no 

Maker Fees for Select Symbols when 

trading against Priority Customer. 

The Exchange’s proposal to increase 

the Complex Order Maker Fees for 

Select Symbols when trading against 

Priority Customer for Market Makers 

from $0.47 to $0.50 per contract and to 

increase the Complex Order Maker Fees 

for Select Symbols when trading against 

Priority Customer for Non-Nasdaq ISE 

Market Makers (FarMM), Firm 

Proprietary/Broker-Dealers, and 

Professional Customers from $0.48 to 

$0.50 per contract is equitable and not 

unfairly discriminatory as all NonPriority Customers would be assessed 

the same Complex Order Maker Fees for 

Select Symbols when trading against 

Priority Customer. Priority Customer 

orders bring valuable liquidity to the 

market which liquidity benefits other 

market participants. Priority Customers 

are not assessed Complex Order Maker 

Fees for Select Symbols when trading 

against Priority Customer. 


khammond on DSKJM1Z7X2PROD with NOTICES4
77332 Federal Register / Vol. 85, No. 231 / Tuesday, December 1, 2020 / Notices 

14Today, the Exchange offers Market Makers the 

opportunity to reduce the Complex Order Maker 

Fee for Select Symbols when trading against 

Priority Customer and the Complex Order Taker Fee 

for Select Symbols to $0.47 per contract for Tier 8 

and $0.44 per contract for Tier 9. With this 

proposal, the fee discount within note 3 would 

decrease. The Exchange would offer Market Makers 

that qualify for Priority Customer Complex Order 

Tier 8 a rate of $0.49 per contract, and the Exchange 

would offer Market Makers that qualify for Priority 

Customer Complex Order Tier 9 a rate of $0.47 per 

contract. 

15The Exchange would offer Market Makers that 

qualify for Priority Customer Complex Order Tier 

10 a rate of $0.44 per contract. 16See ISE, Options 2, Section 5. 

The Exchange’s proposal to amend 

note 3 of Options 7, Section 4 with 

respect to Complex Order Maker Fees 

for Select Symbols when trading against 

Priority Customer for Market Makers as 

well as Complex Order Taker Fees for 

Select Symbols for Market Makers is 

reasonable because while the Exchange 

is reducing the fee discount for 

Members who qualify for Priority 

Customer Complex Order Tiers 8 and 

9,14 Market Makers will continue to 

have the opportunity to reduce their 

costs when they qualify for Priority 

Customer Complex Order Tiers 8 and 9. 

The Exchange will continue to offer 

Market Makers the opportunity to 

reduce Complex Order Maker Fees for 

Select Symbols when trading against 

Priority Customers, as well as Complex 

Order Taker Fees for Select Symbols. 

The Exchange’s proposal also offers 

Market Makers a fee discount when 

trading against Priority Customer 

Complex Orders if the qualifications for 

new Tier 10 are met.15

The Exchange’s proposal to amend 

note 3 of Options 7, Section 4 with 

respect to Complex Order Maker Fees 

for Select Symbols when trading against 

Priority Customer for Market Makers as 

well as Complex Order Taker Fees for 

Select Symbols for Market Makers is 

equitable and not unfairly 

discriminatory. Market Makers would 

continue to be permitted to lower their 

Maker Fees for Select Symbols when 

trading against Priority Customers, as 

well as Taker Fees for Select Symbols, 

provided the Market Maker qualified for 

Priority Customer Complex Order Tiers 

8, 9 or 10. Today, Market Makers are 

able to lower their Maker Fees for Select 

Symbols when trading against Priority 

Customers, as well as Taker Fees for 

Select Symbols, provided they qualify 

for Priority Customer Complex Order 

Tiers 8 or 9. With this proposal Market 

Makers would also be able to lower their 

Maker Fees for Select Symbols when 

trading against Priority Customers, as 

well as Taker Fees for Select Symbols, 

if they qualify for new Priority Customer 

Complex Order Tier 10. Unlike other 

market participants, Market Makers 

have an obligation to maintain quotes 16

and provide liquidity in the regular 

market. The Exchange is providing 

Market Makers the opportunity to 

reduce their Maker Fees for Select 

Symbols when trading against Priority 

Customers, as well as Taker Fees for 

Select Symbols, provided the Market 

Maker qualified for Priority Customer 

Complex Order Tiers 8, 9 or 10, to 

incentivize these market participants to 

continue to provide liquidity on ISE. 

Technical Amendments 

The Exchange’s proposal to remove 

reserved note 17 within Options 7, 

Section 4 is reasonable, equitable and 

not unfairly discriminatory as this note 

is not necessary and the amendment is 

non-substantive. The Exchange’s 

proposal to remove obsolete date 

references and an obsolete rate within 

Options 7, Section 9.C. related to the 

Options Regulatory Fee is reasonable, 

equitable and not unfairly 

discriminatory as the dates have passed 

and the rate is obsolete. 

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. 

Inter-Market Competition 

The proposal does not impose an 

undue burden on inter-market 

competition. The Exchange believes its 

proposal remains competitive with 

other options markets and will offer 

market participants with another choice 

of where to transact options. The 

Exchange notes that it operates in a 

highly competitive market in which 

market participants can readily favor 

competing venues if they deem fee 

levels at a particular venue to be 

excessive, or rebate opportunities 

available at other venues to be more 

favorable. In such an environment, the 

Exchange must continually adjust its 

fees to remain competitive with other 

exchanges that have been exempted 

from compliance with the statutory 

standards applicable to 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. 

Intra-Market Competition 

The proposed amendments do not 

impose an undue burden on intramarket competition. 

Options 7, Section 4 

Priority Customer Rebates for Complex 

Orders 

The Exchange’s proposals to amend 

the tier qualifications for Priority 

Customer Complex Order Tiers 8 and 9, 

increase the Select Symbol rebate in 

Tier 8, increase the Non-Select Symbol 

rebate in Tier 9, and add a new Priority 

Customer Complex Order Tier 10 with 

rebates of $0.53 per contract for Select 

Symbols and $0.88 per contract for NonSelect Symbols does not impose an 

undue burden on competition. Any ISE 

Member may qualify for a Priority 

Customer Complex Order rebate tier, 

provided the qualifications are met. By 

encouraging all Members to transact 

significant amounts of Priority Customer 

Complex Order flow (i.e., to qualify for 

the higher tiers) in order to earn a higher 

rebate on their Priority Customer 

Complex Orders, the Exchange seeks to 

provide more trading opportunities for 

all market participants, thereby 

promoting price discovery, and 

improving the overall market quality of 

the Exchange. ISE would uniformly pay 

rebates to Members that qualified for 

Priority Customer Complex Order 

rebates. The Exchange anticipates all 

Members that currently qualify for the 

Tier 8 Priority Customer Complex Order 

rebates will receive the same or higher 

Tier 8 rebates with this proposal. 

Members that currently qualify for Tier 

9 Priority Customer Complex Order 

rebates may need to submit additional 

Priority Customer Complex Order flow 

to continue to qualify for the same or 

higher Tier 9 rebates. Also, any Member 

may qualify for the new Tier 10 Priority 

Customer Complex Order rebate to earn 

even higher rebates. To the extent the 

proposed changes encourage additional 

Members to strive for the modified tiers 

and thus attract more Priority Customer 

Complex Order volume to the Exchange, 

this increased order flow would 

improve the overall quality and 

attractiveness of the Exchange. 

Maker and Taker Fees for Complex 

Orders 

The Exchange’s proposal to increase 

the Complex Order Maker Fees for 

Select Symbols when trading against 

Priority Customer for Market Makers 

from $0.47 to $0.50 per contract and to 

increase the Complex Order Maker Fees 

for Select Symbols when trading against 

Priority Customer for Non-Nasdaq ISE 

Market Makers (FarMM), Firm 


khammond on DSKJM1Z7X2PROD with NOTICES4
Federal Register / Vol. 85, No. 231 / Tuesday, December 1, 2020 / Notices 77333 

17See ISE, Options 2, Section 5. 

18 15 U.S.C. 78s(b)(3)(A)(ii). 

19 17 CFR 240.19b–4(f)(2). 20 17 CFR 200.30–3(a)(12). 

Proprietary/Broker-Dealers, and 

Professional Customers from $0.48 to 

$0.50 per contract does not impose an 

undue burden on competition as all 

Non-Priority Customers would be 

assessed the same Complex Order 

Maker Fees for Select Symbols when 

trading against Priority Customer. 

Priority Customer orders bring valuable 

liquidity to the market which liquidity 

benefits other market participants. 

Priority Customers are not assessed 

Complex Order Maker Fees for Select 

Symbols when trading against Priority 

Customer. 

The Exchange’s proposal to amend 

note 3 of Options 7, Section 4 with 

respect to Complex Order Maker Fees 

for Select Symbols when trading against 

Priority Customer for Market Makers as 

well as Complex Order Taker Fees for 

Select Symbols for Market Makers does 

not impose an undue burden on 

competition. Market Makers would 

continue to be permitted to lower their 

Maker Fees for Select Symbols when 

trading against Priority Customers, as 

well as Taker Fees for Select Symbols, 

provided the Market Maker qualified for 

Priority Customer Complex Order Tiers 

8, 9 or 10. Today, Market Makers are 

able to lower their Maker Fees for Select 

Symbols when trading against Priority 

Customers, as well as Taker Fees for 

Select Symbols, provided they qualify 

for Priority Customer Complex Order 

Tiers 8 or 9. With this proposal Market 

Makers would also be able to lower their 

Maker Fees for Select Symbols when 

trading against Priority Customers, as 

well as Taker Fees for Select Symbols, 

if they qualify for new Priority Customer 

Complex Order Tier 10. Unlike other 

market participants, Market Makers 

have an obligation to maintain quotes 17

and provide liquidity in the regular 

market. The Exchange is providing 

Market Makers the opportunity to 

reduce their Maker Fees for Select 

Symbols when trading against Priority 

Customers, as well as Taker Fees for 

Select Symbols, provided the Market 

Maker qualified for Priority Customer 

Complex Order Tiers 8, 9 or 10, to 

incentivize these market participants to 

continue to provide liquidity on ISE. 

Technical Amendments 

The Exchange’s proposal to remove 

reserved note 17 within Options 7, 

Section 4 does not impose an undue 

burden on competition as this note is 

not necessary and the amendment is 

non-substantive. The Exchange’s 

proposal to remove obsolete date 

references and an obsolete rate within 

Options 7, Section 9.C. related to the 

Options Regulatory Fee does not impose 

an undue burden on competition. 

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 18 and Rule 

19b–4(f)(2) 19 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. 

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 rule-comments@

sec.gov. Please include File Number SR– 

ISE–2020–39 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–2020–39. 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–2020–39 and should be 

submitted on or before December 22, 

2020. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–26400 Filed 11–30–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–625, OMB Control No. 

3235–0686] 

Proposed Collection; Comment 

Request 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE, Washington, DC 

20549–2736 

Extension: 

Form TCR 

Notice is hereby given that, pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.), the Securities 

and Exchange Commission 

(‘‘Commission’’) is soliciting comments 

on the collection of information 

summarized below. The Commission 

plans to submit an extension for this 

current collection of information to the 

Office of Management and Budget for 

approval. 

The Commission invites comment on 

updates to Form TCR, which is a hard 

copy form adopted by the Commission 


khammond on DSKJM1Z7X2PROD with NOTICES4