Federal Register / Vol. 83, No. 161 / Monday, August 20, 2018 / Notices 42193 

27 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

The website for the Fund will include 

the prospectus for the Fund and 

additional data relating to NAV and 

other applicable quantitative 

information. Moreover, prior to 

commencement of trading, the Exchange 

will inform its ETP Holders in an 

Information Bulletin of the special 

characteristics and risks associated with 

trading the Shares. Trading in Shares of 

the Fund will be halted if the circuit 

breaker parameters in NYSE Arca Rule 

7.12–E have been reached or because of 

market conditions or for reasons that, in 

the view of the Exchange, make trading 

the Shares inadvisable. In addition, as 

noted above, investors will have ready 

access to information regarding the 

Fund’s holdings, the IIV, the Fund’s 

portfolio, and quotation and last sale 

information for the Shares. 

The proposed rule change is designed 

to perfect the mechanism of a free and 

open market and, in general, to protect 

investors and the public interest in that 

it will facilitate the listing and trading 

of an additional type of exchange-traded 

product that will enhance competition 

among market participants, to the 

benefit of investors and the marketplace. 

As noted above, the Shares will be 

subject to the existing trading 

surveillances administered by the 

Exchange or FINRA on behalf of the 

Exchange, which are designed to detect 

violations of Exchange rules and federal 

securities laws applicable to trading on 

the Exchange. The Exchange or FINRA, 

on behalf of the Exchange, will 

communicate as needed regarding 

trading in the Shares and LEAPS with 

other market and other entities that are 

members of ISG, and the Exchange or 

FINRA, on behalf of the Exchange, may 

obtain trading information in the Shares 

and LEAPS from such markets and other 

entities. In addition, the Exchange may 

obtain information regarding trading in 

the Shares and LEAPS from markets and 

other entities that are members of ISG or 

with which the Exchange has in place 

a comprehensive surveillance sharing 

agreement. In addition, as noted above, 

investors will have ready access to 

information regarding the Fund’s 

holdings, the IIV, and quotation and last 

sale information for the Shares. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purpose of the Act. The Exchange 

notes that the proposed rule change will 

facilitate the listing and trading of an 

additional type of Units that can hold 

options contracts and that will enhance 

competition among market participants, 

to the benefit of investors and the 

marketplace. 

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, as modified by Amendment No. 

1, 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– 

NYSEArca–2018–57 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–NYSEArca–2018–57. 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 such 

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–NYSEArca–2018–57, and 

should be submitted on or before 

September 10, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.27

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2018–17832 Filed 8–17–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83841; File No. SR–ISE– 

2018–72] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend the Schedule 

of Fees at Section II 

August 14, 2018. 

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 July 30, 

2018, Nasdaq ISE, LLC (‘‘ISE’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 


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42194 Federal Register / Vol. 83, No. 161 / Monday, August 20, 2018 / Notices 

3A ‘‘Priority Customer’’ is a person or entity that 

is not a broker/dealer in securities, and does not 

place more than 390 orders in listed options per day 

on average during a calendar month for its own 

beneficial account(s), as defined in Nasdaq ISE Rule 

100(a)(37A). Unless otherwise noted, when used in 

this Schedule of Fees the term ‘‘Priority Customer’’ 

includes ‘‘Retail’’ as defined below. 

4 ‘‘Select Symbols’’ are options overlying all 

symbols listed on the Nasdaq ISE that are in the 

Penny Pilot Program. 

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

symbols excluding Select Symbols. For Non-Select 

Symbols, no rebates will be paid for orders in NDX, 

NQX and MNX 

6An ‘‘Affiliated Member’’ is a Member that shares 

at least 75% common ownership with a particular 

Member as reflected on the Member’s Form BD, 

Schedule A. Furthermore, ‘‘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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

Schedule of Fees at Section II entitled 

‘‘Complex Orders Fees and Rebates.’’ 

While the changes proposed herein 

are effective upon filing, the Exchange 

has designated the amendments become 

operative on August 1, 2018. 

The text of the proposed rule change 

is available on the Exchange’s website at 

http://ise.cchwallstreet.com/, at the 

principal office of the Exchange, and at 

the Commission’s Public Reference 

Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of the proposed rule 

change is to amend the Schedule of Fees 

at Section II entitled ‘‘Complex Orders 

Fees and Rebates.’’ Specifically, the 

Exchange is proposing to lower the 

qualifying Complex Order Volume in 

Tiers 4–7, as explained in more detail 

below, to attract a greater amount of 

Priority Customer 3 Complex Order flow 

on ISE by paying the same rebates, but 

requiring less qualifying volume in 

those tiers. 

Currently, the Exchange has a pricing 

structure in place for Complex Orders 

that provides rebates to Priority 

Customer Complex Orders in order to 

encourage Members to bring that order 

flow to the Exchange. Specifically, 

Priority Customer Complex Orders are 

provided rebates in Select Symbols 4

and Non-Select Symbols.5 Rebates are 

provided per contract per leg if the 

order trades with non-Priority Customer 

orders in the Complex Order Book or 

trades with quotes and orders on the 

regular order book. Customer Complex 

Order rebates are paid a rebate based on 

a percentage of industry volume. 

Priority Customer Complex Tiers are 

based on Total Affiliated Member 

Complex Order Volume (excluding 

Crossing Orders and Responses to 

Crossing Orders) and are calculated as a 

percentage of Customer Total 

Consolidated Volume. All Complex 

Order volume executed on the 

Exchange, including volume executed 

by Affiliated Members, is included in 

the volume calculation, except for 

volume executed as Crossing Orders and 

Responses to Crossing Orders.6

Currently, there are nine Priority 

Customer Complex Order Tiers based on 

the percentage of industry volume 

calculation: 

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%–0.600% ............................................................................................... (0.35) (0.70) 

Tier 4 .............................. Above 0.600%–0.800% ............................................................................................... (0.40) (0.75) 

Tier 5 .............................. Above 0.800%–1.000% ............................................................................................... (0.45) (0.80) 

Tier 6 .............................. Above 1.000%–1.600% ............................................................................................... (0.46) (0.80) 

Tier 7 .............................. Above 1.600%–2.000% ............................................................................................... (0.48) (0.80) 

Tier 8 .............................. Above 2.000%–3.250% ............................................................................................... (0.50) (0.85) 

Tier 9 .............................. Above 3.250% ............................................................................................................. (0.50) (0.85) 

At this time the Exchange proposes to 

amend the Total Affiliated Member 

Complex Order Volume, which 

excludes Crossing Orders and 

Responses to Crossing Orders, that are 

calculated as a percentage of Customer 

Total Consolidated Volume in Tiers 4– 

7. Today, Tier 4 requires Total Affiliated 

Member Complex Order Volume 

between 0.600% and 0.800%. The 

Exchange is amending Tier 4 to require 

Total Affiliated Member Complex Order 

Volume between 0.600% and 0.750%. 

Today, Tier 5 requires Total Affiliated 

Member Complex Order Volume 

between 0.800% and 1.000%. The 

Exchange is amending Tier 5 to require 

Total Affiliated Member Complex Order 

Volume between 0.750% and 1.000%. 

So, today a portion of Complex Order 

volume which qualified for Tier 4 

volume would qualify as Tier 5 volume 

pursuant to this proposal. Today, Tier 6 

requires Total Affiliated Member 

Complex Order Volume between 

1.000%–1.600%. The Exchange is 

amending Tier 6 to require Total 

Affiliated Member Complex Order 

Volume between 1.000%–1.500%. So, 

today a portion of Complex Order 

volume which qualified as Tier 5 

volume would qualify for Tier 6 volume 

pursuant to this proposal. Today, Tier 7 

requires Total Affiliated Member 

Complex Order Volume between 

1.600%–2.000%. The Exchange is 

amending Tier 7 to require Total 

Affiliated Member Complex Order 

Volume between 1.500%–2.000%. So, 

today a portion of Complex Order 

volume which qualified as Tier 6 

volume would qualify as Tier 7 volume 

pursuant to this proposal. Members may 

earn greater rebates in Select and NonSelect Symbols simply by sending in 

certain of the same volume in Tiers 4– 

7 today, provided it would qualify for 

the higher tier pursuant to this proposal 

which lowers volume in Tier 4–7. No 

changes are proposed to Tier 1–3 or 

Tiers 8 and 9. No changes are proposed 

to any corresponding rebates in either 

Select or Non-Select Symbols. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 


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Federal Register / Vol. 83, No. 161 / Monday, August 20, 2018 / Notices 42195 

7 15 U.S.C. 78f(b). 

8 15 U.S.C. 78f(b)(4) and (5). 

9 15 U.S.C. 78s(b)(3)(A)(ii). 

10 17 CFR 240.19b–4(f)(2). 11 17 CFR 200.30–3(a)(12). 

of the Act,7 in general, and furthers the 

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

of the Act,8 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 believes that the 

proposed changes to the Priority 

Customer Complex Order Tiers are 

reasonable as these changes are 

designed to incentivize Members to 

trade Complex Orders, and, in particular 

Priority Customer Complex Orders, on 

the Exchange. The Exchange’s proposal, 

which lowers the qualifying Total 

Affiliated Member Complex Order 

Volume in Tiers 4–7, is intended to 

encourage Members to submit the same 

or a greater amount of Priority Customer 

Complex Order flow to obtain a higher 

rebate. 

In addition, the Exchange believes 

that the proposed changes are equitable 

and not unfairly discriminatory as these 

changes are designed to encourage 

Members to transact more Complex 

Order flow, and in particular, Priority 

Customer Complex Orders, on ISE. The 

Exchange does not believe that it is 

unfairly discriminatory to provide 

rebates only to Priority Customer 

Complex Orders as this type of order 

flow enhances liquidity on the 

Exchange for the benefit of all market 

participants by providing more trading 

opportunities, which attracts Market 

Makers. The Exchange believes that the 

proposed changes to the Priority 

Customer Complex Tiers will benefit all 

market participants that trade on ISE by 

increasing their opportunities to trade 

and earn rebates. 

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 believes that the proposed 

changes will enhance both inter-market 

and intra-market competition by 

increasing opportunities for Members to 

obtain rebates by transacting Priority 

Customer Complex Orders. The 

Exchange believes that the proposed 

fees and rebates remain competitive 

with those on other options markets, 

and will continue to attract order flow 

to the Exchange, thereby encouraging 

additional volume and liquidity to the 

benefit of all market participants. 

Priority Customer Complex Order flow 

enhances liquidity on the Exchange for 

the benefit of all market participants by 

providing more trading opportunities, 

which attracts Market Makers. 

The Exchange operates in a highly 

competitive market in which market 

participants can readily direct their 

order flow to competing venues. In such 

an environment, the Exchange must 

continually review, and consider 

adjusting, its fees and rebates to remain 

competitive with other exchanges. For 

the reasons described above, the 

Exchange believes that the proposed fee 

changes reflect this competitive 

environment. 

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 9 and Rule 19b– 

4(f)(2) 10 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–2018–72 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–2018–72. 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–2018–72 and should be 

submitted on or before September 10, 

2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2018–17828 Filed 8–17–18; 8:45 am] 

BILLING CODE 8011–01–P 


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