Federal Register / Vol. 83, No. 15 / Tuesday, January 23, 2018 / Notices 3199 

give the Commission written notice of its intent to 

file the proposed rule change, along with a brief 

description and the text of the proposed rule 

change, at least five business days prior to the date 

of filing of the proposed rule change, or such 

shorter time as designated by the Commission. The 

Exchange has satisfied this requirement. 

35 17 CFR 240.19b–4(f)(6). 

36 17 CFR 240.19b–4(f)(6)(iii). 

37For purposes only of waiving the 30-day 

operative delay, the Commission has also 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 38 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Market Makers refers to ‘‘Competitive Market 

Makers’’ and ‘‘Primary Market Makers’’ collectively. 

See ISE Rule 100(a)(25). 

A proposed rule change filed under 

Rule 19b–4(f)(6) 35 normally does not 

become operative prior to 30 days after 

the date of the filing. However, Rule 

19b–4(f)(6)(iii) 36 permits the 

Commission to designate a shorter time 

if such action is consistent with the 

protection of investors and the public 

interest. The Exchange has asked the 

Commission to waive the 30-day 

operative delay so that the proposal may 

become operative immediately upon 

filing. The Exchange states that the 

proposed rule change will permit 

Market Makers additional latitude to 

conduct business on MRX and 

effectively compete with other market 

makers on other options exchanges. The 

Exchange further states that the 

proposed rule will detail and align the 

rule text with the system functionality. 

The Commission believes that waiver of 

the 30-day operative delay is consistent 

with the protection of investors and the 

public interest. Accordingly, the 

Commission hereby waives the 

operative delay and designates the 

proposed rule change as operative upon 

filing.37

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– 

MRX–2018–02 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE, Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–MRX–2018–02. 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–MRX–2018–02 and should 

be submitted on or before February 13, 

2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.38

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–01094 Filed 1–22–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–82521; File No. SR–ISE– 

2018–04] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Relating to Market Maker 

Orders 

January 17, 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 January 5, 

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 ISE 

Rule 805 to permit Market Makers 3 to 

enter additional order types in the 

options classes to which they are 

appointed. 

The text of the proposed rule change 

is set forth below. Proposed new 

language is italicized; deleted text is in 

brackets. 

* * * * * 

Nasdaq ISE Rulebook 

* * * * * 

Rule 805. Market Maker Orders 

(a) Options Classes to Which 

Appointed. Market makers may enter all 

order types defined in Rule 715 in the 

options classes to which they are 

appointed under Rule 802, except 

Stopped Orders, Reserve Orders and 

Customer Cross Orders.[not place 

principal orders to buy or sell options 

in the options classes to which they are 

appointed under Rule 802, other than 

opening only orders, immediate-orcancel orders, market orders, fill-or-kill 

orders, sweep orders, complex orders, 

and block-size orders executed through 

the Block Order Mechanism pursuant to 

Rule 716(c).] Competitive Market 

Makers shall comply with the 

provisions of Rule 804(e)(2)(iii) upon 


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3200 Federal Register / Vol. 83, No. 15 / Tuesday, January 23, 2018 / Notices 

4 ISE Rule 802 concerns the appointment of 

Market Makers. 

5A stopped order is a limit order that meets the 

requirements of Rule 1901(b)(8). To execute 

stopped orders, Members must enter them into the 

Facilitation Mechanism or Solicited Order 

Mechanism pursuant to Rule 716. See ISE Rule 

715(b)(6). 

6A Reserve Order is a limit order that contains 

both a displayed portion and a non-displayed 

portion. Both the displayed and non-displayed 

portions of a Reserve Order are available for 

potential execution against incoming marketable 

orders. A non-marketable Reserve Order will rest on 

the order book. The displayed portion of a Reserve 

Order shall be ranked at the specified limit price 

and the time of order entry. The displayed portion 

of a Reserve Order will trade in accordance with 

Rule 713(c) and (d) for Priority Customer Orders, 

and Rule 713(e) and Supplementary Material .01, 

for Professional Orders. When the displayed portion 

of a Reserve Order is decremented, either in full or 

in part, it shall be refreshed from the non-displayed 

portion of the resting Reserve Order. If the 

displayed portion is refreshed in part, the new 

displayed portion shall include the previously 

displayed portion. Upon any refresh, the entire 

displayed portion shall be ranked at the specified 

limit price and obtain a new time stamp, i.e., the 

time that the new displayed portion of the order 

was refreshed. The new displayed portion will 

trade in accordance with Rule 713(c) and (d) for 

Priority Customer Orders, and Rule 713(e) and 

Supplementary Material .01, for Professional 

Orders. The initial non-displayed portion of a 

Reserve Order rests on the order book and is ranked 

based on the specified limit price and time of order 

entry. Thereafter, non-displayed portions, if any, 

always obtain the same time stamp as that of the 

new displayed portion in subparagraph 4 above. 

The non-displayed portion of any Reserve Order is 

available for execution only after all displayed 

interest has been executed. The non-displayed 

portion of any Reserve Order will trade in 

accordance with Rule 713(c) and (d) for Priority 

Customer Orders, and Rule 713(e) and 

Supplementary Material .01, for Professional 

Orders. See ISE Rule 715(g). 

7A Customer Cross Order is comprised of a 

Priority Customer Order to buy and a Priority 

Customer Order to sell at the same price and for the 

same quantity. See ISE Rule 715(i). 8NYSE Arca, Inc. (‘‘NYSE Arca’’) and NYSE 

American LLC (‘‘NYSE American’’) do not limit the 

types of orders that can be entered by market 

makers. See NYSE Arca Rule 6.37C–O and NYSE 

American Rule 925.2NY. 9An Opening Only order is a limit order that can 

be entered for the opening rotation only. Any 

portion of the order that is not executed during the 

opening rotation is cancelled. See ISE Rules 717(o). 10An immediate-or-cancel order is a limit order 

that is to be executed in whole or in part upon 

receipt. Any portion not so executed is to be treated 

as cancelled. An immediate-or-cancel order entered 

by a Market Maker through the Specialized Quote 

Feed protocol will not be subject to the (i) Limit 

Order Price Protection and Size Limitation 

Protection as defined in ISE Rule 714(b)(2) and (3); 

or (ii) Limit Order Price Protection as defined in 

Supplementary Material .07(d) to ISE Rule 722. See 

ISE Rule 715(b)(2). 

11A fill-or-kill order is a limit order that is to be 

executed in its entirety as soon as it is received and, 

if not so executed, treated as cancelled. See ISE 

Rule 715(b)(2). 

12A Sweep Order is a limit order that is to be 

executed in whole or in part on the Exchange and 

the portion not so executed shall be routed 

pursuant to Supplementary Material .05 to Rule 

1901 to Eligible Exchange(s) for immediate 

execution as soon as the order is received by the 

Eligible Exchange(s). Any portion not immediately 

executed by the Eligible Exchange(s) shall be 

canceled. If a Sweep Order is not marketable when 

it is submitted to the Exchange, it shall be canceled. 

See ISE Rule 715(s). 

13A complex order is any order involving the 

simultaneous purchase and/or sale of two or more 

different options series in the same underlying 

security, for the same account, in a ratio that is 

equal to or greater than one-to-three (.333) and less 

than or equal to three-to-one (3.00) and for the 

purpose of executing a particular investment 

strategy. See ISE Rule 722(a)(1). 

14Block-size orders are orders for fifty (50) 

contracts or more. See ISE Rule 716(a). 

15The Block Order Mechanism is a process by 

which a Member can obtain liquidity for the 

execution of block-size orders. See ISE Rule 716(c). 

16This expansion would include Good-Till-Date 

Orders, GTC Orders, Limit Orders, and Stop Limit 

Orders as new acceptable order types. 

17Cancel and Replace Orders shall mean a single 

message for the immediate cancellation of a 

previously received order and the replacement of 

that order with a new order. If the previously 

placed order is already filled partially or in its 

entirety, the replacement order is automatically 

canceled or reduced by the number of contracts that 

were executed. The replacement order will retain 

the priority of the cancelled order, if the order posts 

to the Order Book, provided the price is not 

amended, size is not increased, or in the case of 

Reserve Orders, size is not changed. If the 

replacement portion of a Cancel and Replace order 

does not satisfy the system’s price or other 

reasonability checks (e.g., ISE Rule 710; ISE Rule 

711(c); ISE Rule 714(b)(2); and ISE Rule 722(b)(1) 

and Supplementary Material .07 (b), (c) and (d) to 

Rule 722) the existing order shall be cancelled and 

not replaced. See Supplementary Material .02 to ISE 

Rule 715. 

the entry of such orders if they were not 

previously quoting in the series. 

(b) Options Classes Other Than Those 

to Which Appointed. 

(1) A market maker may enter all 

order types permitted to be entered by 

non-customer participants under the 

Rules to buy or sell options in classes 

of options listed on the Exchange to 

which the market maker is not 

appointed under Rule 802, except for 

Reserve Orders, provided that: 

(i) and (ii) No change. 

(2) and (3) No change. 

* * * * * 

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 this rule change is to 

permit Market Makers to enter principal 

orders to buy or sell options in the 

options classes to which they are 

appointed under Rule 802 4 for all order 

types listed in Rule 715 except for 

Stopped Orders,5 Reserve Orders 6 and 

Customer Cross Orders.7 This filing is 

intended to permit Market Makers to 

execute most of the same order types, 

which today they are permitted to enter 

on other options markets.8 In addition, 

this filing is intended to amend ISE Rule 

805(b)(1) to indicate that Reserve Orders 

are not permitted to be entered by ISE 

Market Makers in non-appointed 

options classes. Today, ISE Market 

Makers may not enter Reserve Orders in 

either appointed or non-appointed 

options classes. Today, while the 

System prohibits ISE Market Makers 

from entering Reserve Orders, ISE Rule 

805(b)(1) does not indicate the 

restriction. 

Appointed Options Classes 

Today, as noted in ISE Rule 805(a), a 

Market Maker may not place principal 

orders to buy or sell options in the 

options classes to which they are 

appointed under Rule 802, other than 

opening only orders,9 immediate-orcancel orders,10 market orders, fill-orkill orders,11 sweep orders,12 complex 

orders,13 and block-size orders 14

executed through the Block Order 

Mechanism 15 pursuant to Rule 716(c). 

At this time, the Exchange proposes to 

expand the order types which Market 

Makers are permitted to enter on ISE.16

The Exchange is amending ISE Rule 

805(a) to make clear which order types 

a Market Maker in an appointed options 

class may submit. Additionally, ISO 

Orders, All-Or-None Orders, Stop 

Orders, Qualified Contingent Cross 

Orders, Attributable Orders, Do-NotRoute Orders, QCC with Stock Orders, 

Opening Sweep Orders, Cancel and 

Replace Orders,17 and Add Liquidity 

Orders are accepted on ISE today from 

Market Makers as principal orders as 

modifiers of the allowable non-resting 

order types, although they are not 

specifically detailed in the rule. This 

rule change will further detail and align 

the rule text with the system 

functionality by making clear that 

Maker Makers may enter all order types 

defined in Rule 715 in the options 

classes to which they are appointed 

under Rule 802, except Stopped Orders, 

Reserve Orders and Customer Cross 

Orders. 


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18 ISE Rule 1901(b)(8) states, ‘‘The transaction 

that constituted the Trade-Through was the 

execution of an order for which, at the time of 

receipt of the order, a Member had guaranteed an 

execution at no worse than a specified price (a 

‘‘stopped order’’), where: (i) The stopped order was 

for the account of a Customer; (ii) the Customer 

agreed to the specified price on an order-by-order 

basis; and (iii) the price of the Trade-Through was, 

for a stopped buy order, lower than the national 

Best Bid in the options series at the time of 

execution, or, for a stopped sell order, higher than 

the national Best Offer in the options series at the 

time of execution . . .’’ 

19 15 U.S.C. 78f(b). 

20 15 U.S.C. 78f(b)(5). 

21See note 8 above. 

22Today, Market Makers are not eligible to 

execute either Customer Cross Orders, which are 

Customer orders, or Stopped Orders, which are 

intended for the account of a customer. 

23See Securities Exchange Act Release No. 42455 

(February 24, 2000), 65 FR 11388 (March 2, 2000) 

(File No. 10–127) (In the Matter of the Application 

of The International Securities Exchange LLC for 

Registration as a National Securities Exchange; 

Findings and Opinion of the Commission). 

24 Id. 

25See Securities Exchange Act Release No. 49602 

(April 22, 2004), 69 FR 23841 (April 30, 2004) (SR– 

ISE–2003–26). 

26See ISE Rule 715(g). 

27See ISE Rule 803(b)(2). 

28The total number of contracts executed during 

a quarter by a Competitive Market Maker in options 

classes to which it is not appointed may not exceed 

twenty-five percent (25%) of the total number of 

contracts traded by such Competitive Market Maker 

in classes to which it is appointed and with respect 

to which it was quoting pursuant to Rule 804(e)(2). 

See ISE Rule 805(b)(2). 

The total number of contracts executed during a 

quarter by a Primary Market Maker in options 

classes to which it is not appointed may not exceed 

ten percent (10%) of the total number of contracts 

traded per each Primary Market Maker 

Membership. See ISE Rule 805(b)(3). 

Today, ISE Market Makers, who are 

appointed and non-appointed in a 

particular options class, may submit 

orders without limitation, unless 

otherwise restricted by the order type as 

discussed herein. The Exchange 

proposes to permit Market Makers to 

enter all order types, which are listed in 

ISE Rule 715, except for Stopped 

Orders, Reserve Orders and Customer 

Cross Orders. The Exchange notes that 

today Market Makers are not eligible to 

execute either Customer Cross Orders, 

which are Customer orders, or Stopped 

Orders, which are intended for the 

account of a customer.18 With respect to 

Reserve Orders, the Exchange proposes 

to continue to restrict Market Makers 

from entering Reserve Orders in their 

appointed options class. The Exchange 

believes that Market Maker liquidity 

should be displayed liquidity. For these 

reasons, and to remain competitive with 

other markets, the Exchange proposes to 

permit Market Makers to enter all orders 

they are eligible to submit in their 

appointed class with the exception of 

Reserve Orders and also restrict Reserve 

Orders in the non-appointed classes. 

Non-Appointed Options Classes 

Today, for the reasons noted above, 

the Exchange does not permit Market 

Makers to enter Reserve Orders in nonappointed options classes. However, the 

current rule text does not provide this 

limitation. The Exchange proposes to 

amend the current rule text at ISE Rule 

805(b)(1) to codify this limitation. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,19 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,20

in particular, in that it 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, by 

providing Market Makers access to trade 

order types which are currently 

permissible to be traded in on other 

options exchanges today.21 The 

Exchange believes that permitting 

Market Makers to enter all eligible order 

types, except Reserve Orders, in both 

appointed and non-appointed options 

classes offers no advantage to Market 

Makers under the Exchange’s market 

structure, including, but not limited to, 

under the priority and trade allocation 

rules in ISE Rule 713 and various risk 

protection mechanism rules applicable 

to Market Makers in ISE Rule 804.22

Today, other non-Market Maker 

participants may submit these order 

types on ISE. 

The Exchange notes that previously, 

ISE prohibited non-customer trading by 

Electronic Access Members (‘‘EAMs’’) 

for principal or agent transactions.23 At 

that time, ISE represented that, in an 

electronic market, non-customer market 

orders have the potential to create 

market volatility by trading at different 

price levels until their order is fully 

executed. ISE further noted that, 

without this restriction, non-customers 

would be able to use large-size orders to 

quickly take out ISE’s entire order book 

without giving other market participants 

an opportunity to react.24 When the 

restriction was adopted, there were 

various limitations imposed on noncustomer trading. For example, 

displayed quotes were firm only for 

public customer orders. Since that time, 

electronic options trading has evolved. 

With the adoption of trade-through 

protection under the intermarket 

linkage, every order must be executed at 

the best quoted price. Further, ISE has 

also removed restrictions on noncustomer trading. For example, EAMs 

may now submit non-customer limit 

orders regardless of the size of the order 

where previously EAMs were prohibited 

from submitting orders for noncustomers that caused ISE’s best bid and 

offer to be for less than 10 contracts.25

The Exchange does not believe there 

is any reason to restrict Market Makers 

in entering order types, except for the 

restriction related to Reserve Orders, in 

options classes in which they are 

appointed. Unlike other order types, the 

Reserve Order is a limit order that 

contains both a displayed portion and a 

non-displayed portion.26 Both the 

displayed and non-displayed portions of 

a Reserve Order are available for 

potential execution against incoming 

marketable orders. When the displayed 

portion of a Reserve Order is 

decremented, either in full or in part, it 

shall be refreshed from the nondisplayed portion of the resting Reserve 

Order. The Exchange believes that 

because a Reserve Order contains a nondisplayed potion, Market Makers should 

not be permitted to enter this order. 

Market Makers are required to make 

markets that, absent changed market 

conditions, will be honored for the 

number of contracts entered into the 

Exchange’s System in all series of 

options classes to which the market 

maker is appointed.27 The Exchange 

believes that these markets should be 

transparent. Today, ISE Market Makers 

are not permitted to enter Reserve 

Orders in either appointed or nonappointed options classes. The 

Exchange proposes to specifically note 

this limitation in both Rule 805(a) and 

(b) as an exception. The Exchange notes 

that this limitation is specifically not 

noted in Rule 805(b) today despite the 

fact that the limitation exists in the 

System today. 

The Exchange is also amending ISE 

Rule 805(a) to detail the types of nonresting order types and their modifiers 

with respect to ISO Orders, All-Or-None 

Orders, Stop Orders, Qualified 

Contingent Cross Orders, Attributable 

Orders, Do-Not-Route Orders, QCC with 

Stock Orders, Opening Sweep Orders, 

Cancel and Replace Orders, and Add 

Liquidity Orders. This rule change will 

detail and align the rule text with the 

system functionality and make clear 

which order types a Market Maker may 

submit in appointed options classes. 

ISE Market Makers continue to be 

obligated to add liquidity on ISE. The 

Exchange also notes that ISE Rule 

805(b)(2) and (3) restricts the number of 

contracts that a Market Maker may enter 

in an options class to which the Market 

Maker is not appointed.28 The Exchange 


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29See ISE Rule 804(e) and Supplementary 

Material .01 to Rule 804. Orders do not count 

toward meeting continuous quoting obligations. 

30See ISE Rule 804(b). 

31See note 8 above. 

32See note 29 above. 

33See note 28 above. 

34 15 U.S.C. 78s(b)(3)(A)(iii). 

35 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires a self-regulatory organization to 

give the Commission written notice of its intent to 

file the proposed rule change, along with a brief 

description and the text of the proposed rule 

change, at least five business days prior to the date 

of filing of the proposed rule change, or such 

shorter time as designated by the Commission. The 

Exchange has satisfied this requirement. 

36 17 CFR 240.19b–4(f)(6). 

37 17 CFR 240.19b–4(f)(6)(iii). 

38For purposes only of waiving the 30-day 

operative delay, the Commission has also 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

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

notes that it also requires Market Makers 

to abide by certain quoting 

requirements, in the options classes in 

which they are appointed pursuant to 

ISE Rule 802, in order to maintain the 

status of a Market Maker.29 The 

Exchange believes that permitting a 

Market Maker to enter additional order 

types, except Reserve Orders, in their 

appointed options class will permit 

Market Makers additional latitude to 

conduct business on ISE and effectively 

compete with other market makers on 

other options exchanges. Quotes and 

orders entered by a Market Maker may 

not interact against quotes and orders 

entered on the opposite side of the 

market by the same Market Maker.30

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. Today, NYSE 

Arca and NYSE American place no 

limitation on the types of orders that 

can be entered by market makers in 

their appointed class.31 Accordingly, 

the Exchange believes that this proposal 

does not impose an undue burden on 

inter-market competition because each 

options exchange generally determines 

permissible order types for market 

makers in its trading environment based 

on the exchange’s individual business 

policy, objectives, and trading system. 

The Exchange’s proposal reflects its 

policy and objectives, and does not 

impose an undue burden on intramarket competition because it treats all 

market makers uniformly with respect 

to permissible order types. Further, this 

rule change will align the system 

functionality with the rule text to reflect 

the types of orders a Market Maker in 

both appointed and non-appointed 

options class may submit. The current 

rule text is not accurate. This rule filing 

is intended to detail and align the rule 

text with the system functionality in the 

current text of Rule 805(a) and (b). This 

proposal will make clear which order 

types a Market Maker may submit in 

both appointed and non-appointed 

options classes. 

Further, Market Makers, unlike other 

market participants, are required to 

abide by certain quoting requirements, 

in the options classes in which they are 

appointed pursuant to ISE Rule 802, in 

order to maintain the status of a Market 

Maker.32 The Exchange also notes that 

ISE Rule 805(b)(2) and (3) restricts the 

number of orders that a Market Maker 

may enter in an options class to which 

the Market Maker is not appointed.33

The Exchange believes that permitting a 

Market Maker to enter additional order 

types, except Reserve Orders, in their 

appointed options class will permit 

Market Makers additional latitude to 

conduct business on ISE and effectively 

compete with other market makers on 

other options exchanges. 

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 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A)(iii) of the Act 34 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.35

A proposed rule change filed under 

Rule 19b–4(f)(6) 36 normally does not 

become operative prior to 30 days after 

the date of the filing. However, Rule 

19b–4(f)(6)(iii) 37 permits the 

Commission to designate a shorter time 

if such action is consistent with the 

protection of investors and the public 

interest. The Exchange has asked the 

Commission to waive the 30-day 

operative delay so that the proposal may 

become operative immediately upon 

filing. The Exchange states that the 

proposed rule change will permit 

Market Makers additional latitude to 

conduct business on ISE and effectively 

compete with other market makers on 

other options exchanges. The Exchange 

further states that the proposed rule will 

detail and align the rule text with the 

system functionality. The Commission 

believes that waiver of the 30-day 

operative delay is consistent with the 

protection of investors and the public 

interest. Accordingly, the Commission 

hereby waives the operative delay and 

designates the proposed rule change as 

operative upon filing.38

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–2018–04 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE, Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–ISE–2018–04. 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 


sradovich on DSK3GMQ082PROD with NOTICES
Federal Register / Vol. 83, No. 15 / Tuesday, January 23, 2018 / Notices 3203 

39 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6)(iii). 

5See Securities Exchange Act Release No. 79585 

(December 16, 2016), 82 FR 6961 (December 22, 

2016) (SR–BatsEDGX–2016–60; SR–BatsEDGA– 

2016–24; SR–BatsBYX–2017–29; and SR–BatsBYX– 

2016–68). 

6See the Cboe fee schedule available at https:// 

www.cboe.org/general-info/pdfframed?content=/ 

publish/mdxfees/cboe-cds-fees-schedule-for-cboedatafeeds.pdf§ion=SEC_MDX_CSM&title=

Cboe%20CDS%20Fees%20Schedule and the C2 fee 

schedule available at https://www.cboe.org/generalinfo/pdfframed?content=/publish/mdxfees/c2-cdsfees-schedule.pdf§ion=SEC_MDX_CSM&title=

C2%20CDS%20Fees%20Schedule. 

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–2018–04 and should be 

submitted on or before February 13, 

2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.39

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–01092 Filed 1–22–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–82518; File No. SR– 

CboeEDGA–2018–001] 

Self-Regulatory Organizations; Cboe 

EDGA Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Harmonize 

the Definition of Non-Professional User 

in Its Fee Schedule With That of Its 

Affiliates 

January 17, 2018. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on January 8, 

2018, Cboe EDGA Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘EDGA’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Exchange has 

designated this proposal as a ‘‘noncontroversial’’ proposed rule change 

pursuant to Section 19(b)(3)(A) of the 

Act 3 and Rule 19b–4(f)(6)(iii) 

thereunder,4 which renders it effective 

upon filing with the Commission. 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 filed a proposal to 

amend the Market Data section of its fee 

schedule to harmonize the definition of 

‘‘Non-Professional User’’ with that of its 

affiliates, Cboe Exchange, Inc. (‘‘Cboe’’) 

and Cboe C2 Exchange, Inc. (‘‘C2’’). 

The text of the proposed rule change 

is available at the Exchange’s website at 

www.markets.cboe.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 parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend the 

Market Data section of its fee schedule 

to harmonize the definition of ‘‘NonProfessional User’’ with that of its 

affiliates, Cboe and C2. In late 2016, the 

Exchange and its affiliates Cboe EDGX 

Exchange, Inc. (‘‘EDGX’’), Cboe BYX 

Exchange, Inc. (‘‘BYX’’), and Cboe BZX 

Exchange, Inc. (‘‘BZX’’) received 

approval to effect a merger (the 

‘‘Merger’’) of the Exchange’s parent 

company, Bats Global Markets, Inc., the 

parent of EDGA, EDGX, BYX, and BZX 

with CBOE Holding, Inc. (now known as 

Cboe Global Markets, Inc.) the parent 

company of Cboe and C2.5 In order to 

provide consistent rules and 

terminology amongst the Exchange, 

Cboe, and C2, the Exchange proposes to 

amend the definition of ‘‘NonProfessional User’’ to harmonize it with 

that of its affiliates, Cboe and C2. 

The EDGX Option’s fee schedule 

currently defines ‘‘Non-Professional 

User’’ as: 

a natural person who is not: (i) Registered or 

qualified in any capacity with the 

Commission, the Commodity Futures 

Trading Commission, any state securities 

agency, any securities exchange or 

association, or any commodities or futures 

contract market or association; (ii) engaged as 

an ‘‘investment adviser’’ as that term is 

defined in Section 202(a)(11) of the 

Investment Advisers Act of 1940 (whether or 

not registered or qualified under that Act); or 

(iii) employed by a bank or other 

organization exempt from registration under 

federal or state securities laws to perform 

functions that would require registration or 

qualification if such functions were 

performed for an organization not so exempt. 

As amended, ‘‘Non-Professional User’’ 

would be defined as: 

a natural person or qualifying trust that uses 

Data only for personal purposes and not for 

any commercial purpose and, for a natural 

person who works in the United States, is 

not: (i) Registered or qualified in any capacity 

with the Securities and Exchange 

Commission, the Commodities Futures 

Trading Commission, any state securities 

agency, any securities exchange or 

association, or any commodities or futures 

contract market or association; (ii) engaged as 

an ‘‘investment adviser’’ as that term is 

defined in Section 202(a)(11) of the 

Investment Advisors Act of 1940 (whether or 

not registered or qualified under that Act); or 

(iii) employed by a bank or other 

organization exempt from registration under 

federal or state securities laws to perform 

functions that would require registration or 

qualification if such functions were 

performed for an organization not so exempt; 

or, for a natural person who works outside 

of the United States, does not perform the 

same functions as would disqualify such 

person as a Non-Professional User if he or 

she worked in the United States. 

The revised definition is substantially 

identical to the definition of ‘‘NonProfessional User’ included within the 

Cboe and C2 fee schedules.6 The 

Exchange’s current definition of ‘‘NonProfessional User’’ does differ from that 

contained in the Cboe and C2 fee 

schedules in following minor, nonsubstantive ways. First, the harmonized 

definition will make clear that a NonProfessional User may be a natural 

person or qualifying trust that uses Data 

only for personal purposes and not for 

any commercial purpose. To date, the 

Exchange is not aware of any entity that 


sradovich on DSK3GMQ082PROD with NOTICES