1446 Federal Register / Vol. 83, No. 8 / Thursday, January 11, 2018 / Notices 

7See Commentary .02 to Phlx Rule 1059. 

8Notice, supra note 3, at 58826. The Exchange 

notes that this is especially true for transactions in 

options classes in the Penny Pilot Program, for 

which cabinet trades are not otherwise permitted. 

See id. 

9 15 U.S.C. 78f. 

10 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). 

11 15 U.S.C. 78f(b)(5). 

12See Notice, supra note 3, at 58826. 

13See id. 

14 Id. See also id. at 58826 (noting that ‘‘in 2016, 

there were a total of 442 [c]abinet [t]rades’’ on the 

Exchange ‘‘comprising 244,734 contracts,’’ and 

‘‘[e]ach contract was executed at a price of $0.01.’’). 

15See Notice, supra note 3, at 58826. 

16 Id. 

17 Id. 

18 15 U.S.C. 78s(b)(2). 

19As noted above, the Notice was published for 

comment in the Federal Register on December 14, 

2017 and the comment period closed on December 

29, 2017. Accordingly, the 30th day after 

publication of the Notice is January 13, 2018. 

20See Securities Exchange Act Release No. 80615 

(May 5, 2017), 82 FR 22036 (May 11, 2017) (SR– 

NYSEArca–2017–24). 

21See Securities Exchange Act Release No. 80616 

(May 5, 2017), 82 FR 22033 (May 11, 2017) (SR– 

NYSEMKT–2017–13). 

22 15 U.S.C. 78s(b)(2). 

23 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

pursuant to the same procedures 

applicable to $1 cabinet trades, except 

that for sub-dollar cabinet trades (i) bids 

and offers for opening transactions are 

permitted only to accommodate closing 

transactions, and (ii) transactions in 

option classes participating in the 

Penny Pilot Program are permitted.7 The 

Exchange believes that ‘‘allowing a price 

of at least $0 but less than $1 better 

accommodates the closing of options 

positions in series that are worthless or 

not actively traded, particularly when 

there has been a significant move in the 

price of the underlying security, 

resulting in a large number of series 

being out-of-the-money.’’ 8

III. Discussion and Commission 

Findings 

After careful review, the Commission 

finds that the proposed rule change is 

consistent with the requirements of the 

Act 9 and the rules and regulations 

thereunder applicable to a national 

securities exchange.10 In particular, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act,11 which requires, 

among other things, that the rules of a 

national securities exchange be 

designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, to foster cooperation and 

coordination with persons engaged in 

regulating, clearing, settling, processing 

information with respect to, and 

facilitating transactions in securities, 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. 

In the Notice, the Exchange explains 

that it initially adopted the sub-dollar 

cabinet trade rule on a pilot basis to 

‘‘evaluate the efficacy of the change and 

to address any operational issues that 

might arise in processing [c]abinet 

trades.’’ 12 The Exchange represents that 

at the time it adopted the pilot, its 

system permitted reporting cabinet 

trades at prices as small as $0.0001, as 

it does today.13 Based on its experience 

with these types of trades, the Exchange 

represents that its system ‘‘allows 

[c]abinet trades to be processed in a 

manner similar to how all other trades 

are processed by the [E]xchange.’’ 14

In support of making the pilot 

program permanent, the Exchange 

represents that ‘‘there are no operational 

issues in processing and clearing 

[c]abinet [t]rades in penny and subpenny increments.’’ 15 The Exchange 

also represents that ‘‘members and 

member organizations have not raised 

any concerns with the processing of 

[c]abinet trades.’’ 16 Finally, the 

Exchange represents that it is ‘‘not 

aware of the Options Clearing 

Corporation (‘‘OCC’’) having operational 

issues with processing [c]abinet trades 

submitted by the Exchange.’’ 17

Based on the representations of the 

Exchange, the Commission believes that 

permanent approval of the sub-dollar 

cabinet trade pilot is consistent with the 

Act. In particular, the Commission notes 

that the Exchange’s system allows it to 

process cabinet trades in the normal 

course. Further, the Exchange has not 

observed any issues or concerns with 

sub-dollar cabinet trades at the 

Exchange level, with and among its 

members, or in processing the trades 

through OCC. Accordingly, the 

Exchange’s rule appears reasonably 

designed to remove impediments, 

prevent fraudulent and manipulative 

acts and practices, and foster 

cooperation and coordination with 

persons engaged in facilitating 

transactions in securities. Further, 

permanent approval will continue to 

provide investors with choice when 

considering a cabinet trade, including 

the ability to price such trades below $1 

per contract. 

IV. Accelerated Approval of Proposed 

Rule Changes 

The Commission finds good cause, 

pursuant to Section 19(b)(2) of the 

Act,18 to approve the proposed rule 

changes prior to the 30th day after the 

date of publication of the Notice in the 

Federal Register.19 The Commission 

believes that the proposed rule change 

does not raise novel regulatory issues. 

The Commission notes that earlier this 

year it approved similar proposed rule 

changes from NYSE Arca, Inc.20 and 

NYSE American LLC (formerly known 

as NYSE MKT LLC) 21 making 

permanent sub-dollar cabinet trade pilot 

programs. The Exchange has 

represented that its system is able to 

process cabinet trades similar to the 

processing of its other trades, it has not 

experienced any issues processing 

cabinet trades at the Exchange or 

through OCC, and its members have not 

expressed concerns. In addition, the 

Commission did not receive any 

comments on the proposed changes. 

Accordingly, the Commission finds that 

good cause exists to approve the 

proposed rule changes on an accelerated 

basis. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,22 that the 

proposed rule change (SR–Phlx–2017– 

99) be, and hereby is, approved on an 

accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.23

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–00304 Filed 1–10–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–82446; File No. SR–ISE– 

2017–112] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Certain NonTransaction Fees in the Exchange’s 

Schedule of Fees 

January 5, 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 December 

22, 2017, 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 


srobinson on DSK9F5VC42PROD with NOTICES
Federal Register / Vol. 83, No. 8 / Thursday, January 11, 2018 / Notices 1447 

3See ISE Schedule of Fees, Section VI.A Access 

Fees. In the event where a single member firm has 

multiple ISE memberships, the monthly access fee 

is charged for each membership. For example, if a 

single member firm is both an EAM and a CMM, 

or owns multiple CMM memberships, the firm is 

subject to the monthly access fee for each of those 

memberships. 

4This fee will only be charged for the first CMM 

membership within each group of affiliated 

companies. Affiliated CMMs will pay the 

incremental regulatory fee charged for additional 

CMM memberships. 

5See ISE Schedule of Fees, Section VII.D 

Regulatory Fee. 

6For example, a PMM currently pays a total of 

$55,500 per year in access and regulatory fees 

($48,000 of annual access fees plus the $7,500 

annual regulatory fee) for one PMM membership 

while an EAM pays a total of $11,000 per year 

($6,000 of annual access fees plus the $5,000 annual 

regulatory fee) for one EAM membership. As 

proposed, the PMM would pay a total of $60,000 

per year in access fees for one PMM membership 

while the EAM would pay a total of $6,000 per year 

for one EAM membership. 

7See Securities Exchange Act Release No. 42370 

(April 28, 2000), 65 FR 26256 (May 5, 2000) (SR– 

ISE–00–02). 

8See Securities Exchange Act Release No. 53634 

(April 12, 2006), 71 FR 20147 (April19, 2006) (SR– 

ISE–2006–16). 

9 15 U.S.C. 78f(b). 

10 15 U.S.C. 78f(b)(4) and (5). 

11See C2 Fee Schedule, Section 3 Access Fees. 

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 

certain non-transaction fees in the 

Exchange’s Schedule of Fees. 

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 certain nontransaction fees in the Exchange’s 

Schedule of Fees. ISE currently charges 

its members various non-transaction 

fees to trade on the Exchange and use 

its facilities, including a monthly access 

fee and an annual regulatory fee. Such 

fees are designed to help defray the 

technical, regulatory, and administrative 

costs associated with a member’s use of 

the Exchange. Specifically, the 

Exchange currently assesses a monthly 

access fee to all its members that is $500 

per month per Electronic Access 

Member (‘‘EAM’’) membership, $4,000 

per month per Primary Market Maker 

(‘‘PMM’’) membership, and $2,000 per 

month per Competitive Market Maker 

(‘‘CMM’’) membership.3 Payment of the 

monthly access fee entitles members to 

trade on ISE as a PMM, CMM, or EAM 

based on their membership type. In 

addition, Exchange currently charges a 

tiered annual regulatory fee to all its 

members that is: (i) For PMMs, a fee of 

$7,500 for the first PMM membership, 

$1,500 for each additional PMM 

membership, and $1,000 for each CMM 

membership; (ii) for CMMs, (who are 

not also PMMs), a fee of $5,000 per 

membership for the first CMM 

membership 4 and $1,000 for each 

additional CMM membership; and (iii) 

for EAMs, a fee of $5,000 for each EAM 

membership.5

In order to keep pace with rising 

overhead, the Exchange now proposes 

to increase the monthly access fee for 

Market Makers (i.e., PMMs and CMMs) 

from $4,000 to $5,000 per PMM 

membership and from $2,000 to $2,500 

per CMM membership. The monthly 

access fee of $500 per membership for 

EAMs will remain unchanged under 

this proposal. In connection with the 

proposed increase in the monthly access 

fees for Market Makers, the Exchange 

also proposes to eliminate the annual 

regulatory fee for all its members. 

As noted above, members are required 

to pay a variety of non-transaction fees, 

including the monthly access fee and 

annual regulatory fee, to be able to trade 

on the Exchange and use its facilities. 

By increasing the monthly access fee 

and eliminating the annual regulatory 

fee in the manner discussed above, the 

Exchange is essentially consolidating 

these fees rather than having members 

pay two separate charges for their use of 

the Exchange. With the proposed 

changes, Market Makers may be 

assessed at a higher rate overall to use 

the Exchange, while EAMs may be 

assessed at a lower rate because the 

Exchange is increasing the monthly 

access fee for Market Makers only, but 

eliminating the annual regulatory fee for 

all members.6 The Exchange will absorb 

the cost of the eliminated annual 

regulatory fee for EAMs going forward. 

The access fee and regulatory fee were 

adopted in 2000 to help recover the 

costs of operating a trading market,7

including the technical, regulatory, and 

administrative costs associated with a 

member’s use of the Exchange. The 

monthly access fee amounts have not 

changed since this fee was adopted, 

while the annual regulatory fee was last 

amended in 2006.8 Accordingly, the 

Exchange believes that the fee changes 

proposed herein should be a more 

accurate reflection of the costs 

associated with a member’s use of the 

Exchange today. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,9 in general, and furthers the 

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

of the Act,10 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 increase in the monthly 

Market Maker access fees to $5,000 per 

PMM membership and $2,500 per CMM 

membership is reasonable and 

equitable. The proposed access fees will 

help the Exchange keep pace with rising 

overhead, and are within the range of 

similar fees charged by other options 

exchanges, including for example, C2 

Options Exchange (‘‘C2’’), which 

charges its market makers a monthly 

access fee of $5,000 per permit.11

Furthermore, while the Exchange is 

increasing the monthly access fees for 

Market Makers, the Exchange believes 

that this is partially offset by the 

elimination of the annual regulatory fees 

for all members. As noted above, 

members are required to pay a variety of 

non-transaction fees, including the 

monthly access fee and annual 

regulatory fee, to be able to trade on the 

Exchange and use its facilities. By 

consolidating the annual regulatory fee 

with the access fee in the manner 

discussed above rather than having 

members pay two separate charges for 

their use of the Exchange, ISE is 

simplifying the Schedule of Fees to the 

benefit of its members. The Exchange 

also believes that the proposed changes 

are reasonable and equitable because the 


srobinson on DSK9F5VC42PROD with NOTICES
1448 Federal Register / Vol. 83, No. 8 / Thursday, January 11, 2018 / Notices 

12 15 U.S.C. 78s(b)(3)(A)(ii). 

13 17 CFR 240.19b–4(f)(2). 14 17 CFR 200.30–3(a)(12). 

fees should be a more accurate 

representation of the costs associated 

with a member’s use of the Exchange 

today for the reasons discussed above. 

As noted above, some members will 

be impacted more than others with this 

proposal because the Exchange is 

increasing the monthly access fee for 

Market Makers only, but eliminating the 

annual regulatory fee for all members. 

The Exchange does not believe that this 

is unfairly discriminatory because the 

resources dedicated to the supporting 

and regulating a member vary on the 

type of membership. Generally, PMMs 

are subject to greater obligations than 

CMMs are and CMMs are subject to 

greater obligations than EAMs are. 

Furthermore, the technical, regulatory, 

and administrative costs associated with 

an EAM’s use of the Exchange are not 

as high as those associated with Market 

Makers. 

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 proposed fee changes are 

designed to more accurately reflect the 

technical, regulatory, and administrative 

costs associated with a member’s use of 

the Exchange, and the fees remain 

competitive with similar fees offered on 

other options exchanges. The Exchange 

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. 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,12 and Rule 

19b–4(f)(2) 13 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–2017–112 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–2017–112. 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–2017–112 and should 

be submitted on or before February 1, 

2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–00305 Filed 1–10–18; 8:45 am] 

BILLING CODE 8011–01–P 

SMALL BUSINESS ADMINISTRATION 

[Disaster Declaration #15399 and #15400; 

MISSISSIPPI Disaster Number MS–00104] 

Presidential Declaration Amendment of 

a Major Disaster for Public Assistance 

Only for the State of Mississippi 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Amendment 1. 

SUMMARY: This is an amendment of the 

presidential declaration of a major 

disaster for public assistance only for 

the state of Mississippi (FEMA–4350– 

DR), dated 11/22/2017. 

Incident: Hurricane Nate. 

Incident Period: 10/06/2017 through 

10/10/2017. 

DATES: Issued on 01/02/2018. 

Physical Loan Application Deadline 

Date: 01/22/2018. 

Economic Injury (EIDL) Loan 

Application Deadline Date: 08/22/2018. 

ADDRESSES: Submit completed loan 

applications to: U.S. Small Business 

Administration, Processing and 

Disbursement Center, 14925 Kingsport 

Road, Fort Worth, TX 76155. 

FOR FURTHER INFORMATION CONTACT:

A. Escobar, Office of Disaster 

Assistance, U.S. Small Business 

Administration, 409 3rd Street SW, 

Suite 6050, Washington, DC 20416, 

(202) 205–6734. 

SUPPLEMENTARY INFORMATION: The notice 

of the President’s major disaster 

declaration for Private Non-Profit 

organizations in the State of Mississippi, 

dated 11/22/2017, is hereby amended to 

include the following areas as adversely 

affected by the disaster. 


srobinson on DSK9F5VC42PROD with NOTICES