77642 Federal Register / Vol. 88, No. 217 / Monday, November 13, 2023 / Notices 

68 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

thereby stimulate greater competition 

among existing DMM units and 

potential new entrants, to the benefit the 

investing public, issuers, and the 

marketplace. In addition, to the extent 

that the proposal would lead to 

additional member organizations 

becoming fully-operational DMM units, 

the Exchange believes the proposal 

would expand and diversify the pool of 

Exchange DMMs. The Exchange also 

believes that the proposed changes 

would continue to foster competition 

and optimal performance among DMM 

units, thereby enhancing the quality of 

the services DMMs provide to issuers 

and promoting intermarket competition, 

particularly for issuers in connection 

with their determination of which 

exchange to select as a primary listing 

exchange. The Exchange does not 

believe that the proposed rule change 

would impose any burden on intramarket competition that is not necessary 

or appropriate in furtherance of the 

purposes of the Act. The proposal is 

designed to address the DMM unit’s 

operations on the Trading Floor, access 

to non-public information, and unique 

role in facilitating trading on the 

Exchange without diminishing the 

balance of benefits and obligations, or 

altering or diminishing the numerous 

obligations currently imposed by 

Exchange rules, on DMM units. 

Finally, the Exchange believes that 

member organizations eligible for the 

Program may be able to deploy their 

existing market-making strategies on the 

Exchange and qualify for credits offered 

by the Exchange based on increased 

quoting and liquidity-providing activity. 

The Exchange therefore believes that the 

proposed rule change would promote 

competition by encouraging additional 

displayed liquidity, facilitating price 

discovery, and increasing the range and 

diversity of market making activity on 

the Exchange. Further, the Exchange 

does not believe that the proposed rule 

would impose any burden on intramarket competition because adding a 

new, temporary market participant 

would allow eligible member 

organizations an opportunity to access 

the benefits available to fullyoperational DMM units when trading 

ETPs electronically for a brief ramp up 

period, subject to the same registration 

and regulatory obligations as those 

DMM units. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the self-regulatory organization 

consents, the Commission will: 

(A) by order approve or disapprove 

the proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be 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 (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

NYSE–2023–36 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–NYSE–2023–36. 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 (https://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 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–NYSE–2023–36 and should be 

submitted on or before December 4, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.68

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–24868 Filed 11–9–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98865; File No. SR–ISE– 

2023–23] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend the Pricing 

Schedule at Options 7 To Specify 

Pricing Related to Unrelated Market or 

Marketable Interest 

November 6, 2023. 

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 October 

23, 2023, Nasdaq ISE, LLC (‘‘ISE’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend its 

Pricing Schedule at Options 7 to specify 

pricing related to unrelated market or 

marketable interest. 

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. 


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Federal Register / Vol. 88, No. 217 / Monday, November 13, 2023 / Notices 77643 

3The Facilitation Mechanism is a process by 

which an Electronic Access Member can execute a 

transaction wherein the Electronic Access Member 

seeks to facilitate a block-size order it represents as 

agent, and/or a transaction wherein the Electronic 

Access Member solicited interest to execute against 

a block-size order it represents as agent. Electronic 

Access Members must be willing to execute the 

entire size of orders entered into the Facilitation 

Mechanism. See Options 3, Section 11(b). 

Additionally, Electronic Access Members may use 

the Facilitation Mechanism to execute block-size 

Complex Orders at a net price. See Options 3, 

Section 11(c) for the rules governing complex 

Facilitation Mechanism. 

4The Solicited Order Mechanism is a process by 

which an Electronic Access Member can attempt to 

execute orders of 500 or more contracts it represents 

as agent (the ‘‘Agency Order’’) against contra orders 

that it solicited. Each order entered into the 

Solicited Order Mechanism shall be designated as 

all-or-none. See Options 3, Section 11(d). 

Additionally, Electronic Access Members may use 

the Solicited Order Mechanism to execute Complex 

Orders at a net price. See Options 3, Section 11(e) 

for the rules governing complex Solicited Order 

Mechanism. 

5The Price Improvement Mechanism is a process 

by which an Electronic Access Member can provide 

price improvement opportunities for a transaction 

wherein the Electronic Access Member seeks to 

facilitate an order it represents as agent, and/or a 

transaction wherein the Electronic Access Member 

solicited interest to execute against an order it 

represents as agent. See Options 3, Section 13. 

Additionally, Electronic Access Members may use 

the Price Improvement Mechanism to execute 

Complex Orders at a net price. See Options 3, 

Section 13(e) for the rules governing complex Price 

Improvement Mechanism. 

6A ‘‘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 this Pricing Schedule, 

orders executed in the Block Order Mechanism are 

also considered Crossing Orders. 

7 ‘‘Responses to Crossing Order’’ is any contraside interest (i.e., orders & quotes) submitted after 

the commencement of an auction in the Exchange’s 

Facilitation Mechanism, Solicited Order 

Mechanism, Block Order Mechanism or Price 

Improvement Mechanism. Contra-side interest in 

this context therefore includes both contra-side 

interest submitted specifically in response to an 

auction notification, and unrelated market and 

marketable contra-side interest submitted to the 

order book during the auction. 

8See Section 3 (regular order fees for Responses 

to Crossing Orders); and Section 4 (complex order 

fees for Responses to Crossing Orders). 

9 ‘‘Select Symbols’’ are options overlying all 

symbols listed on the Nasdaq ISE that are in the 

Penny Interval Program. ‘‘Non-Select Symbols’’ are 

options overlying all symbols excluding Select 

Symbols. 

10Currently, the transaction fees are $0.75 per 

contract for all non-Priority Customer NDX orders 

and $0.00 for all Priority Customer NDX orders. In 

addition, the transaction fees are $0.25 per contract 

for all non-Priority Customer NQX orders and $0.00 

for all Priority Customer NQX orders. 

11Today, for both regular and complex orders, 

this fee is $0.20 per contract for all non-Priority 

Customer orders executed in FAC and SOL, except 

Professional Customer orders executed in SOL are 

assessed a $0.10 per contract fee instead. See 

Options 7, Section 3, note 16 and Section 4, note 

14. Regular and complex Priority Customer orders 

executed in FAC and SOL currently receive free 

executions. 

12Today, for both regular and complex orders, 

this rebate is $0.15 per contract for all market 

participants except Market Makers who are not 

eligible for the rebate. The rebate is provided to the 

originating FAC or SOL Order that executes with 

any response other than the contra-side of the FAC 

or SOL Order. 

13Today, solicited FAC and SOL Orders are 

eligible to receive rebates ranging from $0.00 to 

$0.11 per contract according to the volume 

threshold table in Section 6.A. Rebates are applied 

to the originating side. All solicited market 

participant orders executed in FAC and SOL are 

eligible for the rebate, except solicited SOL or FAC 

Orders between two Priority Customers will not 

receive the rebate. 

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 

Exchange’s Pricing Schedule at Options 

7 to specify pricing related to unrelated 

market or marketable interest. 

Specifically, the Exchange proposes to 

specify the current manner in which the 

Exchange assesses fees and rebates with 

respect to unrelated market or 

marketable interest received prior to the 

commencement of an auction in the 

Facilitation Mechanism (‘‘FAC’’),3

Solicited Order Mechanism (‘‘SOL’’),4

and Price Improvement Mechanism 

(‘‘PIM’’),5 and during such auctions. In 

addition, the Exchange also proposes a 

few non-substantive amendments to 

Options 7 that will bring more clarity to 

the Exchange’s Pricing Schedule. Each 

change is discussed below. 

Unrelated Interest 

As a general rule, today, if an order 

executed in FAC (‘‘FAC Order’’), SOL 

(‘‘SOL Order’’), or PIM (‘‘PIM Order’’) 

executes against unrelated market or 

marketable interest received during an 

auction, the Exchange would assess the 

applicable Crossing Order 6 pricing in 

its Pricing Schedule. If the FAC, SOL, or 

PIM Order executes against unrelated 

market or marketable interest received 

prior to an auction, the Exchange would 

assess applicable order book pricing in 

its Pricing Schedule. As discussed 

below, the Exchange applies these 

concepts to unrelated market or 

marketable interest in line with Member 

expectations and to treat similarly 

situated Members in a uniform manner. 

The Exchange notes that it currently 

denotes in the Pricing Schedule that it 

would apply separate Crossing Order 

pricing for any contra-side interest 

submitted after the commencement of 

an auction in FAC, SOL, or PIM (which 

includes unrelated market and 

marketable interest received during the 

auction) by grouping such interest as 

Responses to Crossing Orders.7 The 

Exchange further notes that today, it 

specifies throughout Options 7 how it 

will price Responses to Crossing 

Orders.8 While the Exchange has 

delineated the treatment of unrelated 

market and marketable interest received 

by the Exchange during a FAC, SOL, 

and PIM auction in its Pricing Schedule, 

the Exchange believes that further 

clarity would be beneficial to Members 

as to how the Exchange currently 

assesses pricing for such interest 

received prior to the commencement of 

the auction. As such, the Exchange 

proposes to memorialize these concepts 

in its Pricing Schedule by adding new 

paragraph (d) to Options 7, Section 1, 

titled ‘‘Unrelated Market or Marketable 

Interest Pricing.’’ Proposed paragraph 

(d) would state that the following 

concepts would apply to FAC, SOL, and 

PIM Orders in Select Symbols and NonSelect Symbols (excluding Index 

Options).9 The Exchange also proposes 

to note that all transactions in Index 

Options are subject to separate pricing 

in Options 7, Section 5. Today, the 

Exchange charges separate transaction 

fees for all executions (including 

executions in FAC, SOL, and PIM) in 

Index Options.10 As such, the Exchange 

believes it is appropriate to clarify that 

these Index Options fees are excluded 

from the unrelated interest concepts in 

new paragraph (d). 

Specifically, under new paragraph 

(d)(1), when the FAC Order or SOL 

Order executes against unrelated market 

or marketable interest received during 

an auction, the FAC Order or SOL Order 

will be assessed the applicable Fees for 

Crossing Orders (except PIM Orders) 11

or Facilitation and Solicitation Break-up 

Rebates 12 in Options 7, Section 3 (for 

regular FAC Orders and SOL Orders) 

and Section 4 (for complex FAC Orders 

and SOL Orders). Qualifying FAC 

Orders and SOL Orders may also be 

assessed the applicable Solicitation 

Rebate in Options 7, Section 6.A 13 or 

PIM and Facilitation Rebate in Section 


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14Today, unsolicited FAC Orders are eligible to 

receive rebates ranging from $0.02 to $0.03 per 

contract based on the volume threshold table in 

Section 6.C. Rebates are applied to the originating 

side. Only Firm Proprietary or Broker-Dealer orders 

executed in FAC and PIM are eligible for this 

rebate. 

15Today, for both regular and complex orders, 

this fee is $0.50 per contract for all market 

participants in Select Symbols and $1.10 per 

contract for all market participant in Non-Select 

Symbols. 

16Today, this fee is $0.10 per contract for all nonPriority Customer PIM Orders. Priority Customer 

PIM Orders currently receive free executions. 

17Today, this rebate is $0.00 for regular Priority 

Customer PIM Orders that execute with any 

response other than the contra-side of the PIM 

Order. In addition, this rebate can increase to $0.26 

per contract (Select Symbols) and $0.60 per contract 

(Non-Select Symbols) if the volume and size 

requirements in note 19 of Options 7, Section 3 are 

met. 

18Today, this fee is $0.10 per contract for all nonPriority Customer PIM Orders. Priority Customer 

PIM Orders currently receive free executions. 

19Once the requisite volume and size 

qualifications in Section 6.C are met, an $0.11 per 

contract rebate is currently provided to eligible 

regular Priority Customer PIM Orders. Rebates are 

applied to originating (i.e., ‘‘Agency’’) side. This 

rebate is not provided to regular PIM Orders 

between two Priority Customers. In addition, today, 

unsolicited PIM Orders are eligible to receive the 

same rebates as described above for unsolicited 

FAC Orders. See supra note 14. 

20Today, for both regular and complex orders, 

this fee is $0.50 per contract for all market 

participants in Select Symbols and $1.10 per 

contract for all market participant in Non-Select 

Symbols. 

21Today, the regular Select Symbol taker fees 

range from $0.37 to $0.46 per contract based on 

market participant category. In addition, the regular 

Non-Select Symbol taker fees range from $0.00 to 

$0.90 based on market participant category. 

22Today, the complex taker fees are $0.50 per 

contract (Select Symbols) and $0.98 per contract 

(Non-Select Symbols) for all non-Priority 

Customers. Priority Customers receive free complex 

executions in all symbols. 

23Today, the regular Select Symbol maker fees 

are $0.18 per contract (Select Symbols) and $0.70 

per contract (Non-Select) for all non-Priority 

Customers. Market Makers are also eligible to 

receive maker rebates instead paying the maker fee 

if they qualify for Market Maker Plus. Lastly, 

Priority Customers currently receive free regular 

executions in Select Symbols and a maker rebate of 

$0.86 per contract in Non-Select Symbols. 

24Today, the complex maker fees in Select 

Symbols range from $0.00 to $0.20 per contract 

based on market participant category, except when 

trading against Priority Customers, these fees range 

from $0.00 to $0.50 per contract based on market 

participant category. In addition, the complex 

maker fees in Non-Select Symbols range from $0.00 

to $0.20 based on market participant category, 

except when trading against a Priority Customer, 

these fees range from $0.00 to $0.88 per contract 

based on market participant category. 

25Members become aware of ongoing FAC, SOL, 

and PIM auctions as the Exchange disseminates an 

auction notification in the form of a ‘‘broadcast 

message’’ when the Exchange receives a FAC, SOL, 

and PIM Order for auction processing. The 

broadcast message is sent by the Exchange to all 

Members and includes the series, price, side, and 

size of the Agency Order. See Options 3, Sections 

11(b)(2), 11(d)(2), and 13(c). 

26See supra note 25. 

6.C.14 Lastly, the unrelated market or 

marketable interest received during an 

auction will be assessed the applicable 

fees for Responses to Crossing Orders 

(except PIM Orders) in Options 7, 

Section 3 (for regular interest) and 

Section 4 (for complex interest).15

Under new paragraph (d)(2), when the 

order executed in PIM (‘‘PIM Order’’) 

executes against unrelated market or 

marketable interest received during an 

auction, the PIM Order will be assessed 

the applicable (1) Fees for PIM Orders 16

or PIM Break-up Rebates 17 in Section 3 

below (for regular PIM Orders) and (2) 

Fees for PIM Orders in Section 4 below 

(for complex PIM Orders).18 Qualifying 

PIM Orders may also be assessed the 

applicable PIM and Facilitation Rebate 

in Options 7, Section 6.C.19 Lastly, the 

unrelated market or marketable interest 

received during an auction will be 

assessed the applicable Fees for 

Responses to PIM Orders in Section 3 

(for regular interest) and Section 4 (for 

complex interest).20

Under new paragraph (d)(3), when the 

FAC Order, SOL Order, or PIM Order 

executes against unrelated market or 

marketable interest received prior to the 

commencement of an auction, the FAC 

Order, SOL Order, or PIM Order would 

be subject to the applicable taker pricing 

in Section 3 (for regular FAC Orders, 

SOL Orders, and PIM Orders) 21 and 

Section 4 (for complex FAC Orders, SOL 

Orders, and PIM Orders).22 The 

unrelated market or marketable interest 

received prior to the commencement of 

an auction will be assessed the 

applicable maker pricing in Section 3 

(for regular interest),23 and Section 4 

below (for complex interest).24

Unrelated market or marketable 

interest resting on the Exchange’s order 

book, whether received prior to the 

commencement of a FAC, SOL, or PIM 

auction or during such auction, would 

be allocated in accordance with Options 

3, Section 11(b)(4) and (c)(7) (for regular 

and complex FAC), Section 11(d)(3) and 

(e)(4) (for regular and complex SOL), 

and Section 13(d) and (e)(5) (for regular 

and complex PIM). 

The Exchange applies order book 

pricing in accordance with Options 7, 

Sections 3 and 4 to interest received 

prior to a FAC, SOL, and PIM auction 

that subsequently trades with a FAC, 

SOL, or PIM Order (which is considered 

unrelated market or marketable interest 

for purposes of the auction) because the 

Exchange seeks to treat the Member who 

submitted such interest in a similar 

manner as any other Member who 

submits interest to the order book. The 

Member that submitted such interest 

would not have been aware at the time 

that a FAC, SOL, or PIM auction was in 

progress, and therefore would not have 

expected to be assessed separate 

Crossing Order pricing.25 In such 

instances, the unrelated market or 

marketable interest that posted to the 

order book prior to the commencement 

of the auction would be treated as 

posting liquidity to the order book 

(makers of liquidity) and assessed maker 

pricing in accordance with Options 7, 

Section 3 and Section 4. The FAC, SOL, 

and PIM Order that trades against the 

unrelated interest would be considered 

as removing liquidity from the order 

book (takers of liquidity) and assessed 

taker pricing in accordance with 

Options 7, Section 3 and Section 4. This 

is consistent with taker pricing assessed 

to any Member that removes liquidity 

from the order book. 

In contrast, the Exchange applies 

Crossing Order pricing in Options 7, 

Sections 3 and 4 to the unrelated market 

or marketable interest when the interest 

arrived during a FAC, SOL, and PIM 

auction. Members submitting interest to 

the order book during one of these 

auctions are aware that they may be 

allocated in the auction.26 The Exchange 

assesses the applicable response fee in 

Options 7, Section 3 and Section 4 to 

Members submitting such interest in the 

same manner that responders to the 

FAC, SOL, and PIM auction are assessed 

fees for their auction responses. In other 

words, the unrelated market or 

marketable interest that received an 

allocation within the FAC, SOL, or PIM 

auction would be uniformly subject to 

the same fees as those Members that 

submitted auction responses and were 

allocated. 

The Exchange’s pricing models for the 

regular/complex order book and FAC/ 

SOL/PIM auctions each seek to attract 

liquidity to the Exchange and reward 

Members differently for the different 

types of order flow. To this end, the 

Exchange’s pricing considers the 

manner in which orders interact with 

the FAC/SOL/PIM auction based on the 

timing of when the order entered which 

order book. The Exchange’s pricing is 

consistent with its current practice of 

assigning the applicable pricing for 

auctions versus order book pricing 

depending on how and when the order 

was submitted to the Exchange. 

Technical Amendments 

The Exchange proposes a few 

technical, non-substantive amendments 

throughout Options 7. Specifically, the 

Exchange proposes to title paragraph (b) 

in Options 7, Section 1 as ‘‘Fee 

Disputes’’ and paragraph (c) as 

‘‘Definitions’’ to more clearly identify 


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27 15 U.S.C. 78f(b). 

28 15 U.S.C. 78f(b)(4) and (5). 

29See supra note 25. 

30See supra note 25. 31See supra note 10. 

the applicable rules within the Pricing 

Schedule. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with section 6(b) 

of the Act,27 in general, and furthers the 

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

of the Act,28 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. Further the 

proposal is designed to promote just and 

equitable principles of trade, to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general to protect investors and the 

public interest. 

Unrelated Interest 

The Exchange believes that its 

proposal to specify how the Exchange 

currently prices unrelated market or 

marketable interest received is 

consistent with the Act because 

memorializing these concepts in new 

paragraph (d) of Options 7, Section 1 

will promote greater clarity and 

transparency in the rules and make the 

Pricing Schedule easier to navigate for 

market participants. As discussed 

above, the Exchange already denotes 

how unrelated market or marketable 

interest received during a FAC, SOL, 

and PIM auction is priced by grouping 

such interest as Responses to Crossing 

Orders and Responses to PIM Orders 

today. How the Exchange prices 

unrelated market or marketable interest 

received prior to a FAC, SOL, and PIM 

auction, however, is not currently 

detailed in the Exchange’s Pricing 

Schedule. As such, the Exchange 

believes that by consolidating and 

describing these concepts in one place 

in the Pricing Schedule, Members can 

more easily locate the related rules and 

avoid any potential investor confusion. 

As discussed above, the Exchange 

will memorialize that it will assess book 

pricing for unrelated market or 

marketable interest received prior to the 

commencement of a FAC, SOL, or PIM 

auction by stating that such interest 

would be assessed the applicable maker 

pricing. The FAC, SOL and PIM Order 

that such interest executes against 

would be assessed applicable taker 

pricing. The Exchange applies order 

book pricing in this scenario because at 

the time the unrelated market or 

marketable interest was submitted and 

posted to the order book, Members 

would not have been aware of an 

ongoing FAC/SOL/PIM auction and 

therefore would not expect to be subject 

to the applicable Fees for Responses to 

Crossing Orders (including PIM Orders) 

set forth in Sections 3 and 4.29 In 

contrast, the Exchange applies the 

applicable Fees for Responses to 

Crossing Orders (including PIM Orders) 

in Sections 3 and 4 to the unrelated 

market or marketable interest when it 

arrives during the FAC/SOL/PIM 

auction because Members submitting 

interest to the order book at that time 

would be aware that they may be 

allocated in the FAC/SOL/PIM 

auction.30 Additionally, the Exchange’s 

pricing models for the regular/complex 

order book and FAC/SOL/PIM auctions 

each seek to attract liquidity to the 

Exchange and reward Members 

differently for different types of order 

flow. To this end, the Exchange’s 

pricing considers the manner in which 

interest interacts with the FAC/SOL/ 

PIM auction based on the timing of 

when such interest entered which order 

book. The Exchange’s pricing is 

consistent with its current practice of 

assigning the applicable pricing for 

auctions versus order book pricing 

depending on how and when the order 

was submitted to the Exchange. 

Further, the Exchange’s proposal to 

memorialize current practice that 

unrelated market or marketable interest 

received prior to the commencement of 

a FAC/SOL/PIM auction would be 

assessed the applicable maker pricing is 

reasonable, equitable, and not unfairly 

discriminatory because all Members 

who submitted such interest that posted 

to the order book prior to the 

commencement of the auction (and 

executes against the FAC/SOL/PIM 

Order) would be uniformly assessed the 

same pricing as any other Member who 

posted liquidity on the order book. 

Further, all Members who submitted a 

FAC/SOL/PIM Order that executed 

against such interest would be 

uniformly assessed the same pricing as 

any other Member who removed 

liquidity from the order book. 

Similarly, the Exchange believes that 

its proposal to specify current practice 

that unrelated market or marketable 

interest received during a FAC/SOL/ 

PIM auction would be assessed the 

applicable Responses to Crossing Order 

(including PIM Order) pricing as 

described above is reasonable, equitable, 

and not unfairly discriminatory because 

all Members who submitted such 

interest would be uniformly assessed 

the same pricing as any other Member 

who submitted responses into the FAC/ 

SOL/PIM auction. 

Lastly, the Exchange believes that its 

proposal to specify that Index Options 

fees are excluded from the unrelated 

interest concepts in new paragraph (d) 

is reasonable, equitable, and not 

unfairly discriminatory because all 

transactions in Index Options (including 

transactions in FAC, SOL, and PIM) are 

presently subject to separate pricing in 

Options 7, Section 3.31 By clarifying this 

exclusion, the Exchange believes it will 

avoid potential confusion as to the 

applicability of its Pricing Schedule to 

the benefit of all market participants. 

Technical Amendments 

The Exchange believes that adding 

titles to paragraphs (b) and (c) of 

Options 7, Section 1 is consistent with 

the Act because they will promote 

clarity so that market participants can 

more easily locate the relevant rules in 

the Pricing Schedule. 

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. 

The Exchange does not believe that its 

proposal would impose an undue 

burden on intra-market competition. 

The pricing of unrelated interest in the 

manner described above uniformly 

treats similarly situated market 

participants. Specifically, all Members 

who submitted unrelated market or 

marketable interest that posted to the 

order book prior to the commencement 

of the auction (and executes against the 

FAC/SOL/PIM Order) would be 

uniformly assessed the same pricing as 

any other Member who posted liquidity 

on the order book. All Members who 

submitted a FAC/SOL/PIM Order that 

executed against such interest would be 

uniformly assessed the same pricing as 

any other Member who removed 

liquidity from the order book. 

Additionally, all Members who 

submitted unrelated market or 

marketable interest to the order book 

during the FAC/SOL/PIM auction 

(which ends up participating and 

executing against the auction order) 

would be uniformly assessed the same 

pricing as any other Member who 

submitted responses into the FAC/SOL/ 

PIM auction. 

In terms of inter-market competition, 

the Exchange continues to believe that 


khammond on DSKJM1Z7X2PROD with NOTICES
77646 Federal Register / Vol. 88, No. 217 / Monday, November 13, 2023 / Notices 

32 15 U.S.C. 78s(b)(3)(A)(ii). 

33 17 CFR 240.19b–4(f)(2). 34 17 CFR 200.30–3(a)(12). 

the way that it prices unrelated market 

or marketable interest remains 

competitive with other options markets 

given that the Exchange’s current 

pricing models for the regular and 

complex order books and for FAC/SOL/ 

PIM auctions are all designed to attract 

order flow to the Exchange. 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. 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. 

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 32 and Rule 

19b–4(f)(2) 33 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 (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

ISE–2023–23 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to file 

number SR–ISE–2023–23. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (https://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 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–ISE–2023–23 and should be 

submitted on or before December 4, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.34

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–24866 Filed 11–9–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–173, OMB Control No. 

3235–0178] 

Submission for OMB Review; 

Comment Request; Extension: Rule 

31a–1 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE, Washington, DC 

20549–2736 

Notice is hereby given that, pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501–3520), the Securities 

and Exchange Commission 

(‘‘Commission’’) has submitted to the 

Office of Management and Budget a 

request for extension of the previously 

approved collection of information 

discussed below. 

Rule 31a–1 (17 CFR 270.31a–1) under 

the Investment Company Act of 1940 

(the ‘‘Act’’) (15 U.S.C. 80a) is entitled 

‘‘Records to be maintained by registered 

investment companies, certain majorityowned subsidiaries thereof, and other 

persons having transactions with 

registered investment companies.’’ Rule 

31a–1 requires registered investment 

companies (‘‘funds’’), and every 

underwriter, broker, dealer, or 

investment adviser that is a majorityowned subsidiary of a fund, to maintain 

and keep current accounts, books, and 

other documents which constitute the 

record forming the basis for financial 

statements required to be filed pursuant 

to section 31 of the Act (15 U.S.C. 80a– 

30) and of the auditor’s certificates 

relating thereto. The rule lists specific 

records to be maintained by funds. The 

rule also requires certain underwriters, 

brokers, dealers, depositors, and 

investment advisers to maintain the 

records that they are required to 

maintain under federal securities laws. 

The Commission periodically inspects 

the operations of funds to insure their 

compliance with the provisions of the 

Act and the rules thereunder. The books 

and records required to be maintained 

by rule 31a–1 constitute a major focus 

of the Commission’s inspection 

program. 

There are approximately 2,766 

investment companies registered with 

the Commission, all of which are 

required to comply with rule 31a–1. For 

purposes of determining the burden 

imposed by rule 31a–1, the Commission 

staff estimates that each fund is divided 

into approximately four series, on 

average, and that each series is required 

to comply with the recordkeeping 

requirements of rule 31a–1. Based on 


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