41124 Federal Register / Vol. 83, No. 160 / Friday, August 17, 2018 / Notices 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 83639 

(July 16, 2018) (SR–ISE–2018–61). 

4 ‘‘Non-Priority Customers’’ include Market 

Makers, Non-Nasdaq ISE Market Makers, Firm 

Proprietary/Broker-Dealers, and Professional 

Customers. 

5A ‘‘Crossing Order’’ is an order executed in the 

Exchange’s Facilitation Mechanism, Solicited Order 

Mechanism, Price Improvement Mechanism (PIM) 

or submitted as a Qualified Contingent Cross order. 

For purposes of the fee schedule, orders executed 

in the Block Order Mechanism are also considered 

Crossing Orders. 

6 ‘‘Responses to Crossing Order’’ is any contraside interest submitted after the commencement of 

an auction in the Exchange’s Facilitation 

Mechanism, Solicited Order Mechanism, Block 

Order Mechanism or PIM. 

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–BX–2018–037 and should 

be submitted on or before September 7, 

2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2018–17742 Filed 8–16–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83830; File No. SR–ISE– 

2018–66] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend the 

Exchange’s Schedule of Fees Relating 

to Crossing Orders and Responses to 

Crossing Orders in Index Options on 

the Nasdaq 100 Reduced Value Index 

August 13, 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 August 1, 

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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

Exchange’s Schedule of Fees to provide 

further explanation on how the 

Exchange charges Crossing Orders and 

Responses to Crossing Orders in index 

options on the Nasdaq 100 Reduced 

Value Index (‘‘NQX’’). 

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 Exchange recently adopted 

transaction fees and rebates for adding 

or removing liquidity from ISE (i.e., 

maker/taker fees and rebates) in NQX 

options, which apply to executions in 

both the regular and complex order 

book, according to the following 

schedule: 3

Market participant Maker 

fee/rebate 

Taker 

fee/rebate 

Market Maker ........................................................................................................................................................... ($0.25) $0.00 

Market Maker (for orders sent by Electronic Access Members) ............................................................................. (0.25) 0.00 

Non-Nasdaq ISE Market Maker (FarMM) ............................................................................................................... 0.25 0.25 

Firm Proprietary/Broker-Dealer ................................................................................................................................ 0.25 0.25 

Professional Customer ............................................................................................................................................ 0.25 0.25 

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

In SR–ISE–2018–61, the Exchange 

stated that the above pricing would 

apply to all executions in NQX, 

including Non-Priority Customer 4

Crossing Orders 5 in NQX. The 

Exchange now proposes to clarify that 

the taker fee applies to Crossing Orders 

(i.e., both the originating and contra side 

of the order) in NQX as well as 

responses to such orders by noting the 

following in Section III.B: ‘‘Fee will also 

apply to the originating and contra side 

of Crossing Orders, and to Responses to 

Crossing Orders.’’ 6

The Exchange does not seek to amend 

the manner in which Crossing Orders in 

NQX and responses thereto are 

currently charged, rather the Exchange 


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Federal Register / Vol. 83, No. 160 / Friday, August 17, 2018 / Notices 41125 

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

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

9A ‘‘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). 

10 15 U.S.C. 78s(b)(3)(A)(ii). 

11 17 CFR 240.19b–4(f)(2). 

seeks to more clearly state in its 

Schedule of Fees that taker pricing 

applies for such orders. While the 

Exchange is not aware of any member 

confusion with respect to this fee, the 

Exchange believes this specificity will 

help preclude any potential confusion 

in how its fees will apply. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

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 language relating to the 

application of taker fees to Crossing 

Orders and Responses to Crossing 

Orders in NQX is reasonable because 

the proposed rule text will bring greater 

transparency to the manner in which 

the Exchange charges NQX orders 

submitted in ISE’s various crossing 

mechanisms. As discussed above, the 

Exchange charges members the 

applicable taker fee to both the 

originating and contra side of Crossing 

Orders in NQX as well charging the 

NQX taker pricing for Responses to 

Crossing Orders. The Exchange believes 

it is reasonable and appropriate to 

charge taker and not maker pricing for 

these orders because the Exchange seeks 

to encourage market making activity in 

NQX by providing the $0.25 per 

contract maker rebate to Market Maker 

orders that post liquidity in the 

Exchange’s new proprietary product 

during the initial months of trading. 

Furthermore, the manner in which the 

Exchange applies the NQX taker fees in 

Section III.B is not changing with this 

proposal, and the proposed changes are 

intended to bring greater clarity to ISE’s 

Schedule of Fees, to the benefit of all 

market participants. 

The Exchange’s proposal to add the 

clarifying language is also equitable and 

not unfairly discriminatory because the 

Exchange will continue to apply the 

taker fees for Crossing Orders and 

Responses to Crossing Orders in NQX in 

a uniform manner for all similarly 

situated participants. The Exchange also 

believes that it is equitable and not 

unfairly discriminatory to assess no 

taker fees to Market Maker Crossing 

Orders and Responses to Crossing 

Orders in NQX as compared to other 

Non-Priority Customers, who are 

currently assessed the $0.25 per contract 

taker fee for such orders. Market 

Makers, unlike other market 

participants, take on a number of 

obligations, including quoting 

obligations, that other market 

participants do not have. Further, the 

Exchange believes that it is equitable 

and not unfairly discriminatory to 

assess no transaction fees to Priority 

Customer 9 Crossing Orders and 

Responses to Crossing Orders in NQX 

because Priority Customer order flow 

enhances liquidity on the Exchange for 

the benefit of all market participants. 

Priority Customer liquidity provides 

more trading opportunities, which 

attracts Market Makers. An increase in 

the activity of these market participants 

in turn facilitates tighter spreads, which 

may cause an additional corresponding 

increase in order flow from other market 

participants. 

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. As discussed 

above, the proposal is intended to 

eliminate ambiguity from the Schedule 

of Fees by further explaining how ISE 

charges the originating and contra side 

of Crossing Orders in NQX as well as 

Responses to Crossing Orders in NQX. 

The proposal does not amend the 

current manner in which the Exchange 

assesses fees for Crossing Orders and 

Responses to Crossing Orders in NQX, 

and the Exchange will continue to 

assess the applicable taker fees in 

Section III.B for such NQX orders in a 

uniform manner to all market 

participants. For the foregoing reasons, 

the Exchange believes that the proposed 

changes do not impose an undue burden 

on competition. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act 10 and Rule 

19b–4(f)(2) 11 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–2018–66 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–2018–66. 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 


amozie on DSK3GDR082PROD with NOTICES1
41126 Federal Register / Vol. 83, No. 160 / Friday, August 17, 2018 / Notices 

12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The term ‘‘Member’’ means an individual or 

organization that is registered with the Exchange 

pursuant to Chapter II of MIAX PEARL Rules for 

purposes of trading on the Exchange as an 

‘‘Electronic Exchange Member’’ or ‘‘Market Maker.’’ 

Members are deemed ‘‘members’’ under the 

Exchange Act. See Exchange Rule 100. 

4The term ‘‘MPID’’ means unique market 

participant identifier. See Exchange Rule 100. 

5The term ‘‘Market Maker’’ or ‘‘MM’’ means a 

Member registered with the Exchange for the 

purpose of making markets in options contracts 

traded on the Exchange and that is vested with the 

rights and responsibilities specified in Chapter VI 

of the MIAX PEARL Rules. See Exchange Rule 100. 

6The term ‘‘MEO Interface’’ means a binary order 

interface used for submitting certain order types (as 

set forth in Rule 516) to the MIAX PEARL System. 

See Exchange Rule 100. 

7The term ‘‘FIX Interface’’ means the Financial 

Information Exchange interface used for submitting 

certain order types (as set forth in Rule 516) to the 

MIAX PEARL System. See Exchange Rule 100. 

8See Exchange Rule 514(c)(1). 

9The term ‘‘System’’ means the automated 

trading system used by the Exchange for the trading 

of securities. See Exchange Rule 100. 

10The term ‘‘Electronic Exchange Member’’ or 

‘‘EEM’’ means the holder of a Trading Permit who 

is a Member representing as agent Public Customer 

Orders or Non-Customer Orders on the Exchange 

and those non-Market Maker Members conducting 

proprietary trading. Electronic Exchange Members 

are deemed ‘‘members’’ under the Exchange Act. 

See Exchange Rule 100. 

11The Exchange notes that if requested by an 

EEM, orders entered by an EEM via the MEO 

Interface using the same MPID will not be executed 

against orders entered on the opposite side of the 

market by the same EEM using the same MPID via 

the MEO Interface. In such a case, the System will 

cancel the oldest of the orders back to the entering 

party prior to execution. See Exchange Rule 

514(c)(2). 

12See Nasdaq Stock Market Rule, Chapter VI, Sec. 

18(c)(1). 

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–2018–66 and should be 

submitted on or before September 7, 

2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2018–17738 Filed 8–16–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83835; File No. SR– 

PEARL–2018–15] 

Self-Regulatory Organizations; MIAX 

PEARL, LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change to the Exchange Rule 514 

Priority on the Exchange 

August 13, 2018. 

Pursuant to the provisions of 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 August 1, 2018, MIAX PEARL, LLC 

(‘‘MIAX PEARL’’ or ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) a 

proposed rule change as described in 

Items I, II, and III 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 is filing a proposal to 

amend Exchange Rule 514, Priority on 

the Exchange. 

The text of the proposed rule change 

is available on the Exchange’s website at 

http://www.miaxoptions.com/rulefilings/pearl at MIAX PEARL’s principal 

office, 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 

Exchange Rule 514, Priority on the 

Exchange. Specifically, the Exchange 

proposes to amend subsection (c), SelfTrade Protection, to broaden the 

protection afforded under the current 

rule by giving Members 3 the option to 

have this protection apply at the market 

participant identifier (‘‘MPID’’) 4 level 

(i.e., currently existing functionality), or 

at the firm level. The Exchange believes 

that this enhancement will provide 

helpful flexibility for market making 

firms that wish to prevent trading 

against all orders entered by their firm 

under any MPID, instead of just those 

entered under the same MPID. 

Currently, the rule prevents orders 

entered by a Market Maker 5 via the 

MEO Interface 6 or the FIX Interface 7

using the same MPID from executing 

against orders entered on the opposite 

side of the market by the same Market 

Maker using the same MPID via the 

MEO Interface or the FIX Interface.8 In 

such a case, the System 9 will cancel the 

oldest of the orders back to the entering 

party prior to execution. 

Members of the Exchange may either 

be Market Makers or Electronic 

Exchange Members.10 Each Market 

Maker and Electronic Exchange Member 

is assigned an MPID by the Exchange for 

identification purposes. A Member may 

have multiple Market Maker MPIDs on 

the Exchange, therefore the possibility 

exists that a Member may cross its own 

Market Maker’s orders.11

The Exchange now proposes to allow 

members to choose to have this 

protection applied at either the MPID 

level, as currently implemented, or at 

the member firm level. If members 

choose to have this protection applied at 

the member firm level, the System will 

prohibit orders entered from different 

MPIDs within the Member’s firm from 

trading against one another. The 

Exchange believes that the proposed 

enhancement will provide Members 

with more tailored self-trade 

functionality that will allow Members to 

manage their trading as appropriate 

based on the Member’s business needs. 

While the Exchange believes that some 

firms will want to restrict trading 

interest from the same MPID, (as 

currently implemented), the Exchange 

believes that other firms will find it 

helpful to apply self-trade protection 

across all MPIDs of the same firm. 

The Exchange note that similar 

functionality also exists on the Nasdaq 

Stock Market (‘‘NASDAQ’’) which 

prevents self-trades by MPID, or 

alternatively, if selected by the member, 

self-trade protection for all MPIDs of the 

firm.12 Cboe BZX Exchange 

(‘‘CboeBZX’’) also has a similar rule in 

place which provides members the 

ability to apply Match Trade Prevention 

(‘‘MTP’’) modifiers (CboeBZX’s version 


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