80848 Federal Register / Vol. 85, No. 240 / Monday, December 14, 2020 / Notices 

30 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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. 

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

symbols excluding Select Symbols. See Options 7, 

Section 1. 

5The term ‘‘Market Makers’’ refers to 

‘‘Competitive Market Makers’’ and ‘‘Primary Market 

Makers’’ collectively. See Options 1, Section 

1(a)(20). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.30

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–27397 Filed 12–11–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90596; File No. SR–ISE– 

2020–40] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend the 

Exchange’s Market Maker Plus 

Program Under Options 7, Section 3, 

Regular Order Fees and Rebates 

December 8, 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 

24, 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 the 

Exchange’s Market Maker Plus program 

under Options 7, Section 3, ‘‘Regular 

Order Fees and Rebates.’’ 

The Exchange originally filed the 

proposed pricing change on November 

2, 2020 (SR–ISE–2020–36). On 

November 12, 2020, the Exchange 

withdrew SR–ISE–2020–36 and 

submitted SR–ISE–2020–35 on 

November 13, 2020. On November 24, 

2020 the Exchange withdrew SR–ISE– 

2020–35 and submitted this 

replacement filing. 

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 the 

Market Maker Plus program under 

Options 7, Section 3, ‘‘Regular Order 

Fees and Rebates.’’ The purpose of the 

proposed rule change is to amend 

certain qualifications for Market Makers 

to achieve Market Maker Plus status in 

order to continue to incentivize Market 

Makers to add liquidity on ISE. 

Background 

As set forth in Options 7, Section 3 of 

the Pricing Schedule, the Exchange 

operates a Market Maker Plus program 

for regular orders in Select Symbols 3

and Non-Select Symbols 4 that provides 

the below tiered rebates to Market 

Makers 5 based on time spent quoting at 

the National Best Bid or National Best 

Offer (‘‘NBBO’’). This program is 

designed to reward Market Makers that 

contribute to market quality by 

maintaining tight markets in Select and 

Non-Select Symbols. 

SELECT SYMBOLS OTHER THAN SPY, QQQ, IWM, AMZN, FB, AND NVDA 

Market maker plus tier (specified percentage) Maker rebate 

Tier 1 (80% to less than 85%) ............................................................................................................................................................ ($0.15) 

Tier 2 (85% to less than 95%) ............................................................................................................................................................ (0.18) 

Tier 3 (95% or greater) ........................................................................................................................................................................ (0.22) 

SPY, QQQ, AND IWM 

Market maker plus tier (specified percentage) Regular maker 

rebate 

Linked maker 

rebate (9) (12)

Tier 1a (50% to less than 65%) .............................................................................................................................. ($0.00) N/A 

Tier 1b (65% to less than 80%) .............................................................................................................................. (0.05) N/A 

Tier 2 (80% to less than 85%) ................................................................................................................................ (0.18) (0.15) 

Tier 3 (85% to less than 90%) ................................................................................................................................ (0.22) (0.19) 

Tier 4 (90% or greater) ............................................................................................................................................ (0.26) (0.23) 

AMZN, FB, AND NVDA 

Market maker plus tier (specified percentage) Maker rebate (14)

Tier 1 (70% to less than 85%) ............................................................................................................................................................ ($0.15) 

Tier 2 (85% to less than 95%) ............................................................................................................................................................ (0.18) 


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6Market 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. 

7 In addition, the Exchange may exclude from any 

member’s monthly Market Maker Plus tier 

calculation any Unanticipated Event; provided that 

the Exchange will only remove the day for members 

that would have a lower time at the NBBO for the 

specified series with the day included. See Options 

7, Section 1(a)(2) for the definition of 

‘‘Unanticipated Event.’’ 

8 0.10% of Customer Total Consolidated Volume 

is approximately 22,000 contracts per day. 

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. See Options 

7, Section 1(b). 

9 0.20% of Customer Total Consolidated Volume 

is approximately 44,000 contracts per day. 

10 0.25% of Customer Total Consolidated Volume 

is approximately 55,000 contracts per day. 

11 0.50% of Customer Total Consolidated Volume 

is approximately 110,000 contracts per day. 

12For example, if a Market Maker adds 40,000 

contracts of liquidity in SPY on ISE and the average 

Customer Total Consolidated Volume for the month 

is 20,000,000 per day, then the Market Maker would 

have a percentage of 0.20% (40,000 divided by 

20,000,000) of Customer Total Consolidated 

Volume and would qualify for Tier 2 in SPY and 

would be entitled to the $0.18 per contract Regular 

Maker Rebate and the $0.15 per contract Linked 

Maker Rebate. The Exchange arrives at 40,000 

contracts by accumulating all executed volume that 

added liquidity (including quotes and orders) by a 

particular Market Maker Participant in SPY. 

AMZN, FB, AND NVDA—Continued 

Market maker plus tier (specified percentage) Maker rebate (14)

Tier 3 (95% or greater) ........................................................................................................................................................................ (0.22) 

NON-SELECT SYMBOLS (EXCLUDING INDEX OPTIONS) (7)

Market maker plus tier (specified percentage) Maker fee/rebate 

Tier 1 (80% to less than 90%) ............................................................................................................................................................ $0.50 

Tier 2 (90% to less than 98%) ............................................................................................................................................................ 0.30 

Tier 3 (98% or greater) ........................................................................................................................................................................ (6) (0.40) 

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. 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. If a Market 

Maker would qualify for a different 

Market Maker Plus tier in each of the 

two successive 30 calendar day periods, 

then the lower of the two Market Maker 

Plus tier rebates shall apply to all 

contracts.6

A Market Maker’s worst quoting day 

each month for each of the two 

successive periods described above, on 

a per symbol basis, is excluded in 

calculating whether a Market Maker 

qualifies for this rebate.7

Proposal 

The Exchange proposes to amend 

Tiers 1b, 2, 3 and Tier 4 of the Market 

Maker Plus qualifications for options 

overlying SPY, QQQ and IWM. Today, 

a Market Maker that is on the NBBO 

65% to less than 80% of the time, on 

average for the month based on daily 

performance in the qualifying series, 

qualifies for the SPY, QQQ and IWM 

Tier 1b. Today, a Market Maker that is 

on the NBBO 80% to less than 85% of 

the time, on average for the month based 

on daily performance in the qualifying 

series, qualifies for the SPY, QQQ and 

IWM Tier 2. Today, a Market Maker that 

is on the NBBO 85% to less than 90% 

of the time, on average for the month 

based on daily performance in the 

qualifying series, qualifies for the SPY, 

QQQ and IWM Tier 3. Today, a Market 

Maker that is on the NBBO 90% or 

greater of the time, on average for the 

month based on daily performance in 

the qualifying series, qualifies for the 

SPY, QQQ and IWM Tier 4. 

The Exchange proposes to amend the 

SPY, QQQ and IWM Market Maker Plus 

qualifications for Tiers 1b, 2, 3 and Tier 

4 by adding an alternative means to 

qualify for these tiers. The Exchange 

proposes for SPY, QQQ and IWM Tier 

1b, that in addition to the current 

qualification, a Market Maker that is on 

the NBBO over 50% of the time, on 

average for the month based on daily 

performance in the qualifying series, 

and adds liquidity in the qualifying 

symbol that is executed at a volume of 

greater than 0.10% of Customer Total 

Consolidated Volume 8 may also qualify 

for the SPY, QQQ and IWM Tier 1b. The 

Exchange proposes for SPY, QQQ and 

IWM Tier 2, that in addition to the 

current qualification, a Market Maker 

that is on the NBBO over 50% of the 

time, on average for the month based on 

daily performance in the qualifying 

series, and adds liquidity in the 

qualifying symbol that is executed at a 

volume of greater than 0.20% of 

Customer Total Consolidated Volume 9

may also qualify for the SPY, QQQ and 

IWM Tier 2. The Exchange proposes for 

SPY, QQQ and IWM Tier 3, that in 

addition to the current qualification, a 

Market Maker that is on the NBBO over 

50% of the time, on average for the 

month based on daily performance in 

the qualifying series, and adds liquidity 

in the qualifying symbol that is 

executed at a volume of greater than 

0.25% of Customer Total Consolidated 

Volume 10 may also qualify for the SPY, 

QQQ and IWM Tier 3. Additionally, the 

Exchange proposes for SPY, QQQ and 

IWM Tier 4, that in addition to the 

current qualification, a Market Maker 

that is on the NBBO over 50% of the 

time, on average for the month based on 

daily performance in the qualifying 

series, and adds liquidity in the 

qualifying symbol that is executed at a 

volume of greater than 0.50% of 

Customer Total Consolidated Volume 11

may also qualify for the SPY, QQQ and 

IWM Tier 4.12 The Exchange believes 

that these alternative qualifications for 

SPY, QQQ and IWM Tiers 1b, 2, 3 and 

4 will provide greater depth of liquidity 


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80850 Federal Register / Vol. 85, No. 240 / Monday, December 14, 2020 / Notices 

13 15 U.S.C. 78f(b). 

14 15 U.S.C. 78f(b)(4) and (5). 

15NetCoalition 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)). 

16Securities Exchange Act Release No. 51808 

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

(‘‘Regulation NMS Adopting Release’’). 

17The Exchange proposes for SPY, QQQ and 

IWM Tier 1b, that in addition to the current 

qualification, a Market Maker that is on the NBBO 

over 50% of the time, on average for the month 

based on daily performance in the qualifying series, 

and adds liquidity in the qualifying symbol that is 

executed at a volume of greater than 0.10% of 

Customer Total Consolidated Volume may also 

qualify for the SPY, QQQ and IWM Tier 1b. The 

Exchange proposes for SPY, QQQ and IWM Tier 2, 

that in addition to the current qualification, a 

Market Maker that is on the NBBO over 50% of the 

time, on average for the month based on daily 

performance in the qualifying series, and adds 

liquidity in the qualifying symbol that is executed 

at a volume of greater than 0.20% of Customer Total 

Consolidated Volume may also qualify for the SPY, 

QQQ and IWM Tier 2. The Exchange proposes for 

SPY, QQQ and IWM Tier 3, that in addition to the 

current qualification, a Market Maker that is on the 

NBBO over 50% of the time, on average for the 

month based on daily performance in the qualifying 

series, and adds liquidity in the qualifying symbol 

that is executed at a volume of greater than 0.25% 

of Customer Total Consolidated Volume may also 

qualify for the SPY, QQQ and IWM Tier 3. 

Additionally, the Exchange proposes for SPY, QQQ 

and IWM Tier 4, that in addition to the current 

qualification, a Market Maker that is on the NBBO 

over 50% of the time, on average for the month 

based on daily performance in the qualifying series, 

and adds liquidity in the qualifying symbol that is 

executed at a volume of greater than 0.50% of 

Customer Total Consolidated Volume may also 

qualify for the SPY, QQQ and IWM Tier 4. 

18See Options 2, Section 5. 

19See Options 2, Section 4 and Options 3, Section 

8(c). 

in SPY, QQQ and IWM, and, in turn, 

attract additional volume on ISE. 

No rate changes are proposed for SPY, 

QQQ and IWM Tiers 1b, 2, 3 or 4 for the 

Regular Maker Rebate or the Linked 

Maker Rebate. 

The Exchange also proposes to add a 

period at the end of Options 7, Section 

3 after note 18 in the Pricing Schedule. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,13 in general, and furthers the 

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

of the Act,14 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 Exchange’s proposed changes to 

its Pricing Schedule are reasonable in 

several respects. As a threshold matter, 

the Exchange is subject to significant 

competitive forces in the market for 

options securities transaction services 

that constrain its pricing determinations 

in that market. The fact that this market 

is competitive has long been recognized 

by the courts. In NetCoalition v. 

Securities and Exchange Commission, 

the D.C. Circuit stated as follows: ‘‘[n]o 

one disputes that competition for order 

flow is ‘fierce.’ . . . As the SEC 

explained, ‘[i]n the U.S. national market 

system, buyers and sellers of securities, 

and the broker-dealers that act as their 

order-routing agents, have a wide range 

of choices of where to route orders for 

execution’; [and] ‘no exchange can 

afford to take its market share 

percentages for granted’ because ‘no 

exchange possesses a monopoly, 

regulatory or otherwise, in the execution 

of order flow from broker 

dealers’. . ..’’ 15

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.’’ 16

Numerous indicia demonstrate the 

competitive nature of this market. For 

example, clear substitutes to the 

Exchange exist in the market for options 

security transaction services. The 

Exchange is only one of sixteen options 

exchanges to which market participants 

may direct their order flow. Within this 

environment, market participants can 

freely and often do shift their order flow 

among the Exchange and competing 

venues in response to changes in their 

respective pricing schedules. As such, 

the proposal represents a reasonable 

attempt by the Exchange to increase its 

liquidity and market share relative to its 

competitors. 

The Exchange’s proposal to amend 

the SPY, QQQ and IWM Tiers 1b, 2, 3 

and Tier 4 qualifications by adding an 

alternative means 17 to qualify for these 

tiers is reasonable. With respect to SPY, 

QQQ and IWM, Market Makers may 

continue to qualify for Tier 1b, by being 

on the NBBO 65% to less than 80% of 

the time, on average for the month based 

on daily performance in the qualifying 

series. Likewise, Market Makers may 

continue to qualify for SPY, QQQ and 

IWM Tier 2, by being on the NBBO 80% 

to less than 85% of the time, on average 

for the month based on daily 

performance in the qualifying series. 

Market Makers may continue to qualify 

for SPY, QQQ and IWM Tier 3 by being 

on the NBBO 85% to less than 90% of 

the time, on average for the month based 

on daily performance in the qualifying 

series. Finally, Market Makers may 

continue to qualify for SPY, QQQ and 

IWM Tier 4 by being on the NBBO 90% 

or greater of the time, on average for the 

month based on daily performance in 

the qualifying series. In summary, 

Market Makers that met the SPY, QQQ 

and IWM Tier 1b, 2, 3 or 4 qualifications 

last month would continue to qualify for 

those tiers, provided each trading day 

they continued to spend the same 

percentage of time on the NBBO for 

qualifying series. With this proposal, the 

Exchange believes that these alternative 

qualifications for SPY, QQQ and IWM 

in Tiers 1b, 2, 3 and 4 will provide an 

opportunity for Market Makers to 

contribute greater depth of liquidity in 

SPY, QQQ and IWM on ISE, and, in 

turn, attract additional customer volume 

on ISE. The Exchange notes that the 

alternative qualifications, which require 

that Market Makers add liquidity in 

Customer volume, will incentivize 

Marker Makers to tighten their quotes to 

execute against an increased number of 

orders, which benefits all Members who 

may interact with that interest on ISE’s 

Order Book. 

The Exchange’s proposal to amend 

the SPY, QQQ and IWM Tiers 1b, 2, 3 

and Tier 4 qualifications by adding an 

alternative means to qualify for these 

tiers is equitable and not unfairly 

discriminatory. The proposal would 

continue to require Market Makers who 

qualify for the Market Maker Plus 

program to quote significantly at the 

NBBO, thereby continuing to contribute 

to market quality in a meaningful way. 

All Market Makers will be subject to the 

same qualification criteria for Market 

Maker Plus. The Exchange also 

continues to believe that it is not 

unfairly discriminatory to offer rebates 

under this program to only Market 

Makers. Market Makers, and in 

particular, those Market Makers that 

participate in the Market Maker Plus 

Program and achieve Market Maker Plus 

status, add value through continuous 

quoting 18 and are subject to additional 

requirements and obligations (such as 

quoting obligations) 19 that other market 

participants are not. 

The Exchange will apply the 

proposed changes to SPY, QQQ, and 

IWM as they are three of the most 

actively traded symbols on ISE. The 

Exchange believes that providing an 

alternative means for Market Makers to 

qualify for Market Maker Plus tiers will 


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20See note 17 above. 

21See Options 2, Section 5. 

22See Options 2, Section 4 and Options 3, Section 

8(c). 

23 15 U.S.C. 78s(b)(3)(A)(ii). 

24 17 CFR 240.19b–4(f)(2). 

incentivize additional liquidity in these 

three names, which will have a 

beneficial impact on market quality on 

the Exchange. Further, the Exchange 

believes that the proposed new Tier 1b, 

2, 3 and 4 qualifications for SPY, QQQ, 

and IWM will continue to require 

Market Makers to quote at the NBBO for 

a significant percentage of time in order 

to glean the benefits of the associated 

incentives. For the foregoing reasons, 

the Exchange believes that its proposal 

will further encourage Market Makers to 

maintain tight markets in SPY, QQQ, 

and IWM, thereby increasing liquidity 

and attracting additional order flow to 

the Exchange and, will benefit all 

market participants in the quality of 

order interaction. 

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 Exchange’s proposal to amend 

the SPY, QQQ and IWM Tiers 1b, 2, 3 

and Tier 4 qualifications by adding an 

alternative means 20 to qualify for these 

tiers does not impose an undue burden 

on competition. The proposal would 

continue to require Market Makers who 

qualify for the Market Maker Plus 

program to quote significantly at the 

NBBO, thereby continuing to contribute 

to market quality in a meaningful way. 

All Market Makers will be subject to the 

same qualification criteria for Market 

Maker Plus. The Exchange also 

continues to believe that it is not 

unfairly discriminatory to offer rebates 

under this program to only Market 

Makers. Market Makers, and in 

particular, those Market Makers that 

participate in the Market Maker Plus 

Program and achieve Market Maker Plus 

status, add value through continuous 

quoting 21 and are subject to additional 

requirements and obligations (such as 

quoting obligations 22) that other market 

participants are not. 

The Exchange will apply the 

proposed changes to SPY, QQQ, and 

IWM as they are three of the most 

actively traded symbols on ISE. The 

Exchange believes that providing an 

alternative means for Market Makers to 

qualify for Market Maker Plus tiers will 

incentivize additional liquidity in these 

three names which will have a 

beneficial impact on market quality on 

the Exchange. Further, the Exchange 

believes that the proposed new Tier 1b, 

2, 3 and 4 qualifications for SPY, QQQ, 

and IWM will continue to require 

Market Makers to quote at the NBBO for 

a significant percentage of time in order 

to glean the benefits of the associated 

incentives. For the foregoing reasons, 

the Exchange believes that its proposal 

will further encourage Market Makers to 

maintain tight markets in SPY, QQQ, 

and IWM, thereby increasing liquidity 

and attracting additional order flow to 

the Exchange, which will benefit all 

market participants in the quality of 

order interaction. 

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 23 and Rule 

19b–4(f)(2) 24 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–2020–40 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–2020–40. 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 


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80852 Federal Register / Vol. 85, No. 240 / Monday, December 14, 2020 / Notices 

25 17 CFR 200.30–3(a)(12). 

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)(4). 

5Capitalized terms not defined herein are defined 

in the Rules, available at 

http://dtcc.com/∼/media/Files/Downloads/legal/ 

rules/nscc_rules.pdf. 

6See Securities Exchange Act Release No. 88474 

(March 25, 2020), 85 FR 17910 (March 31, 2020) 

(SR–NSCC–2020–003). 

7See Securities Exchange Act Release No. 88615 

(April 9, 2020), 85 FR 21037 (April 15, 2020) (SR– 

NSCC–2020–802). 

8See Securities Exchange Act Release No. 90367 

(November 6, 2020) 85 FR 73099 (November 16, 

2020) (SR–NSCC–2020–802). 

9 12 U.S.C. 5465(e)(1). 

10 17 CFR 240.19b–4(n)(1)(i). 

11See Securities Exchange Act Release No. 90502 

(November 24, 2020) (SR–NSCC–2020–003). 

12 15 U.S.C. 78s(b)(2). 

13Rule 1, supra note 5. 

14Procedure XV, supra note 5. 

15 15 U.S.C. 78q–1(b)(3)(F). 

Number SR–ISE–2020–40 and should be 

submitted on or before January 4, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.25

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–27390 Filed 12–11–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90606; File No. SR–NSCC– 

2020–020] 

Self-Regulatory Organizations; Fixed 

Income Clearing Corporation; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change to Establish 

Implementation Date of National 

Securities Clearing Corporation’s 

Enhancements to the Haircut-Based 

Volatility Charge Applicable to Illiquid 

Securities and UITs and Making 

Certain Other Changes to Procedure 

XV 

December 8, 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 December 

7, 2020, National Securities Clearing 

Corporation (‘‘NSCC’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II and III 

below, which Items have been prepared 

by the clearing agency. NSCC filed the 

proposed rule change pursuant to 

Section 19(b)(3)(A) 3 of the Act and 

subparagraph (f)(4) 4 of Rule 19b–4 

thereunder. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Clearing Agency’s Statement of the 

Terms of Substance of the Proposed 

Rule Change 

The proposed rule change consists of 

amendments to the NSCC Rules & 

Procedures (the ‘‘Rules’’) 5 in order to 

establish order to establish the 

implementation date of rule changes 

submitted pursuant to rule filing SR– 

NSCC–2020–003 (‘‘Rule Filing’’) 6 and 

advance notice SR–NSCC–2020–802 

(‘‘Advance Notice’’).7

II. Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

In its filing with the Commission, the 

clearing agency 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 

clearing agency has prepared 

summaries, set forth in sections A, B, 

and C below, of the most significant 

aspects of such statements. 

(A) Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

1. Purpose 

On November 6, 2020, the Securities 

and Exchange Commission (the 

‘‘Commission’’) issued a notice of no 

objection to the Advance Notice,8 which 

was filed with the Commission pursuant 

to Section 806(e)(1) of Title VIII of the 

Dodd-Frank Wall Street Reform and 

Consumer Protection Act entitled the 

Payment, Clearing, and Settlement 

Supervision Act of 2010 9 and Rule 19b– 

4(n)(1)(i) of the Act.10 The Commission 

also issued an order approving the Rule 

Filing on November 24, 2020,11 which 

was filed by NSCC pursuant to Section 

19(b)(2) of the Act.12

The purpose of the Rule Filing and 

the Advance Notice is to amend the 

Rules to enhance the calculation of 

certain components of the Clearing 

Fund formula. 

NSCC is filing this proposed rule 

change to establish the rule changes 

submitted pursuant to the Rule Filing 

and the Advance Notice will be 

implemented by February 28, 2021. 

NSCC would add a legend to Rule 1 

(Definitions and Descriptions) of the 

Rules (‘‘Rule 1’’) 13 and Procedure XV 

(Clearing Fund Formula and Other 

Matters) of the Rules (‘‘Procedure 

XV’’) 14 to state that the rule changes 

submitted pursuant to the Rule Filing 

and the Advance Notice have been 

approved and not objected to, 

respectively, but are not yet 

implemented. The legends would 

provide that these rule changes would 

be implemented by February 28, 2021 

and include the file numbers of the Rule 

Filing and the Advance Notice. The 

legends would also state that when the 

rule changes are implemented, NSCC 

will announce the implementation by 

important notice and the legends would 

automatically be removed from Rule 1 

and Procedure XV. 

2. Statutory Basis 

Section 17A(b)(3)(F) of the Act 

requires, in part, that the Rules be 

designed to (i) promote the prompt and 

accurate clearance and settlement of 

securities transactions and (ii) remove 

impediments to and perfect the 

mechanism of a national system for the 

prompt and accurate clearance and 

settlement of securities transactions, 

and, in general, to protect investors and 

the public interest.15 The proposed rule 

change would establish the 

implementation date of rule changes 

described above and provide Members 

with an understanding of when these 

rule changes will begin to affect them. 

Knowing when the rule changes will 

begin to affect Members would enable 

them to timely fulfill their obligations to 

NSCC, which would in turn ensure 

NSCC’s processes work as intended. 

Therefore, NSCC believes that the 

proposed rule change would promote 

the prompt and accurate clearance and 

settlement of securities transactions as 

well as remove impediments to and 

perfect the mechanism of a national 

system for the prompt and accurate 

clearance and settlement of securities 

transactions, consistent with Section 

17A(b)(3)(F) of the Act cited above. 

(B) Clearing Agency’s Statement on 

Burden on Competition 

NSCC does not believe that the 

proposed rule change to establish an 

implementation date for the rule 

changes described above would have 

any impact, or impose any burden, on 

competition because the proposed rule 

change is intended to provide additional 

clarity in the Rules with respect to when 

these rule changes would be 

implemented. As such, the proposed 

rule change would not affect the rights 

or obligations of the Members or NSCC 

other than establishing when the rule 


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