Federal Register / Vol. 86, No. 118 / Wednesday, June 23, 2021 / Notices 32997 

17 17 CFR 240.17Ad–22(e)(6)(iv). 18 15 U.S.C. 78s(b)(2). 19 In approving the proposed rule change, the 

Commission considered the proposal’s impact on 

efficiency, competition, and capital formation. 15 

U.S.C. 78c(f). 20 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 ‘‘Select Symbols’’ are options overlying all 

symbols listed on the Nasdaq ISE that are in the 

Penny Interval Program. See Options 7, Section 1. 

4This fee applies to Market Maker orders sent to 

the Exchange by Electronic Access Members. 

Market Makers that qualify for Market Maker Plus 

will not pay this fee if they meet the applicable tier 

thresholds set forth in Options 7, Section 3. Market 

Makers will instead be assessed fees or rebates 

based on the applicable tier for which they qualify. 

See notes 5 and 8 within Options 7, Section 3. 

Market Maker Plus for Select Symbols is not being 

amended. The term ‘‘Market Makers’’ refers to 

‘‘Competitive Market Makers’’ and ‘‘Primary Market 

Makers’’ collectively. See Options 1, Section 

1(a)(21). 

5A ‘‘Non-Nasdaq ISE Market Maker’’ is a market 

maker as defined in Section 3(a)(38) of the 

Securities Exchange Act of 1934, as amended, 

registered in the same options class on another 

options exchange. See Options 7, Section 1. 

6A ‘‘Firm Proprietary’’ order is an order 

submitted by a member for its own proprietary 

account. See Options 7, Section 1. 

7A ‘‘Broker-Dealer’’ order is an order submitted 

by a member for a broker-dealer account that is not 

its own proprietary account. See Options 7, Section 

1. 

8A ‘‘Professional Customer’’ is a person or entity 

that is not a broker/dealer and is not a Priority 

Customer. See Options 7, Section 1. 

9 A ‘‘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 ISE Options 1, 

Section 1(a)(37). Unless otherwise noted, when 

used in the Pricing Schedule the term ‘‘Priority 

Customer’’ includes ‘‘Retail.’’ A ‘‘Retail’’ order is a 

Priority Customer order that originates from a 

natural person, provided that no change is made to 

the terms of the order with respect to price or side 

of market and the order does not originate from a 

trading algorithm or any other computerized 

methodology. See Options 7, Section 1. 

10A ‘‘Complex Order’’ is any order involving the 

simultaneous purchase and/or sale of two or more 

different options series in the same underlying 

security, as provided in Nasdaq ISE Options 3, 

Section 14, as well as Stock-Option Orders. See 

Options 7, Section 1. 

11A ‘‘Regular Order’’ is an order that consists of 

only a single option series and is not submitted 

with a stock leg. See Options 7, Section 1. 

IV. Conclusion 

On the basis of the foregoing, the 

Commission finds that the proposed 

rule change is consistent with the 

requirements of the Act, and in 

particular, with the requirements of 

Section 17A(b)(3)(F) of the Act and 

Rules 17Ad–22(e)(2)(i) and (v) and 

17Ad–22(e)(6)(iv) thereunder.17

It is therefore ordered pursuant to 

Section 19(b)(2) of the Act 18 that the 

proposed rule change (SR–ICC–2021– 

013), be, and hereby is, approved.19

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–13102 Filed 6–22–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92190; File No. SR–ISE– 

2021–13] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend ISE’s Pricing 

Schedule at Options 7, Section 3, 

‘‘Regular Order Fees and Rebates’’ and 

Section 4, ‘‘Complex Order Fees and 

Rebates’’ 

June 16, 2021. 

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 June 8, 

2021, Nasdaq ISE, LLC (‘‘ISE’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the 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 proposes to amend 

ISE’s Pricing Schedule at Options 7, 

Section 3, ‘‘Regular Order Fees and 

Rebates’’ and Section 4, ‘‘Complex 

Order Fees and Rebates.’’ 

The Exchange originally filed the 

proposed pricing change on June 1, 

2021 (SR–ISE–2021–12). On June 8, 

2021, the Exchange withdrew that filing 

and submitted this filing. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/ise/rules, at the principal 

office of the Exchange, and at the 

Commission’s Public Reference Room. 

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 

ISE’s Pricing Schedule at Options 7, 

Section 3, ‘‘Regular Order Fees and 

Rebates’’ and Section 4, ‘‘Complex 

Order Fees and Rebates.’’ Each change 

is described below. 

Options 7, Section 3 Regular Order Fees 

and Rebates 

Today, the Exchange assesses a Maker 

Fee of $0.18 per contract in Select 

Symbols 3 for Market Maker,4 NonNasdaq ISE Market Maker (FarMM),5

Firm Proprietary 6/Broker-Dealer,7 and 

Professional Customer 8 orders. Priority 

Customer 9 orders are not assessed a 

Select Symbol Maker Fee. 

Further, today, pursuant to Options 7, 

Section 3, note 10, a Market Maker is 

not charged a fee or paid a rebate when 

trading against non-Priority Customer 

Complex Orders 10 that leg into the 

regular 11 order book. Also, today, 

pursuant to Options 7, Section 3, note 

11, a Market Maker, FarMM, Firm 

Proprietary/Broker Dealer, and 

Professional Customer are assessed a 

$0.25 per contract fee, instead of the 

applicable fee or rebate, when trading 

against Priority Customer Complex 

Orders that leg into the regular order 

book. Today, Market Makers that qualify 

for Market Maker Plus in Select 

Symbols pay a $0.15 per contract fee in 

the symbols for which they qualify for 

Market Maker Plus when trading against 

Priority Customer Complex Orders of 

less than 50 contracts in Select Symbols 

that leg into the regular order book. 

Further, Market Makers that qualify for 

Market Maker Plus in Select Symbols do 

not pay any fee nor receive any rebate 

in the symbols for which they qualify 

for Market Maker Plus when trading 

against Priority Customer Complex 

Orders of 50 contracts or more in Select 

Symbols that leg into the regular order 

book. 

The Exchange proposes to remove 

rule text from Options 7, Section 3, note 

11, which provides that Market Makers 

that qualify for Market Maker Plus in 

Select Symbols will pay a $0.15 per 

contract fee in symbols for which they 


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32998 Federal Register / Vol. 86, No. 118 / Wednesday, June 23, 2021 / Notices 

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

symbols excluding Select Symbols. See Options 7, 

Section 1. 

13See tiered rebates within Options 7, Section 4. 

14For example, a Market Maker providing 

liquidity on the individual leg would typically pay 

a maker fee of only $0.18 per contract for trading 

with orders originating from the regular order book, 

or in the case of Market Makers that achieve Market 

Maker Plus status, would earn certain maker rebates 

instead of paying the $0.18 per contract maker fee. 

See Options 7, Section 3, note 5. 

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

16 15 U.S.C. 78f(b)(4) and (5). 

qualify for Market Maker Plus when 

trading against Priority Customer 

Complex Orders of less than 50 

contracts in Select Symbols that leg into 

the regular order book. Additionally, the 

Exchange proposes to modify the 

remainder of note 11 to provide, 

‘‘Market Makers that qualify for Market 

Maker Plus in Select Symbols will not 

pay this fee nor receive any rebate in 

symbols for which they qualify for 

Market Maker Plus when trading against 

Priority Customer Complex Orders leg 

into the regular order book.’’ 

With the proposed amendments to 

note 11 of Options 7, Section 3, a 

Market Maker that qualifies for Market 

Maker Plus when trading against 

Priority Customer Complex Orders leg 

into the regular order book would no 

longer pay a $0.15 per contract fee, 

rather, the Market Maker would pay no 

fee, nor receive any rebate similar to the 

manner in which Market Makers are 

priced today for orders of 50 contracts 

or more in Select Symbols, when those 

Market Makers qualify for Market Maker 

Plus and trade against Priority Customer 

Complex Orders leg into the regular 

order book. This proposal would align 

pricing for Market Makers that qualify 

for Market Maker Plus when trading 

against Priority Customer Complex 

Orders leg into the regular order book, 

irrespective of the size of the order. 

Market Makers that do not qualify for 

Market Maker Plus would continue to 

pay a $0.25 per contract fee when 

trading against Priority Customer 

Complex Orders that leg into the regular 

order book similar to other market 

participants. 

The Exchange believes this pricing 

will continue to incentivize Market 

Makers to qualify for Market Maker Plus 

in order to earn the associated rebates 

for Market Maker Plus and also pay no 

fees when trading against Priority 

Customer Complex Orders leg into the 

regular order book in Select Symbols. 

The Exchange also proposes to make 

a non-substantive amendment to 

capitalize the term ‘‘Complex Order’’ in 

current note 10 of Options 7, Section 3. 

Options 7, Section 4, Complex Order 

Fees and Rebates 

Currently, Options 7, Section 4 

provides a fee structure 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 and 

Non-Select Symbols 12 (other than NDX, 

NQX, and MNX as noted within note 4 

of Options 7, Section 4) based on 

Priority Customer average daily volume 

(‘‘ADV’’).13

Today, Options 7, Section 4, note 1 

provides, ‘‘Rebate provided per contract 

per leg if the order trades with nonPriority Customer orders in the Complex 

Order Book. Rebate provided per 

contract leg in Select Symbols where the 

largest leg of the Complex Order is 

under fifty (50) contracts and trades 

with quotes and orders on the regular 

order book. No Priority Customer 

Complex Order rebates will be provided 

in Select Symbols if any leg of the order 

that trades with interest on the regular 

order book is fifty (50) contracts or 

more. No Priority Customer Complex 

Order rebates will be provided in NonSelect Symbols if any leg of the order 

trades with interest on the regular order 

book, irrespective of order size.’’ 

The Exchange proposes to amend the 

second sentence in note 1 of Options 7, 

Section 4 to state, ‘‘This rebate will be 

reduced by $0.15 per contract in Select 

Symbols where the largest leg of the 

complex order is under fifty (50) 

contracts and trades with quotes and 

orders on the regular order book.’’ The 

proposed amendment to the second 

sentence of note 1 of Options 7, Section 

4, would reduce the current rebate paid 

in Select Symbols, per contract, when 

the largest leg of the Complex Order is 

under fifty contracts and trades with 

quotes and orders on the regular order 

book. Today, the Exchange pays no 

Priority Customer Complex Order 

rebates in Select Symbols if any leg of 

the order that trades with interest on the 

regular order book is fifty contracts or 

more, nor does the Exchange pay a 

Priority Customer Complex Order rebate 

in Non-Select Symbols if any leg of the 

order trades with interest on the regular 

order book, irrespective of order size. 

The Exchange has observed in the past 

that several market participants have 

entered larger sized Priority Customer 

Complex Orders with a leg of fifty or 

more contracts to earn a rebate. When 

these Complex Orders do not find a 

counterparty in the Complex Order 

Book, the orders may leg into the regular 

order book where they are typically 

executed by Market Makers on the 

individual legs who pay a fee to trade 

with this order flow.14 As a result, the 

Market Maker’s ability to provide 

liquidity on the Exchange is adversely 

affected as they are charged to trade 

against these larger complex orders 

when they leg into the regular market 

and execute against their quotes. For 

this reason, the Exchange continues to 

not pay Priority Customer Complex 

Order rebates in Select Symbols if any 

leg of the order that trades with interest 

on the regular order book is fifty 

contracts or more, including for Select 

Symbols which do not pay a Priority 

Customer Complex Order rebate if any 

leg of the order trades with interest on 

the regular order book, irrespective of 

order size. 

The Exchange’s proposal to reduce 

the Select Symbol rebate when the 

largest leg of the Complex Order is 

under fifty contracts and trades with 

quotes and orders on the regular order 

book, by $0.15 per contract, is intended 

to continue to incentivize Members to 

send order flow to the Exchange despite 

the reduction. Also, the Exchange will 

continue to pay Priority Customer 

rebates for Priority Customer Complex 

Orders of any size which trades with 

non-Priority Customer orders in the 

Complex Order Book, based on the 

Priority Customer Complex Tier 

achieved, thereby continuing to 

incentivize Members to bring Complex 

Order flow to the Exchange to earn the 

rebate on their Priority Customer 

Complex Order volume. 

Further, the proposal would close the 

pricing gap as between Members who 

receive a Priority Customer rebate, 

which is being reduced by this proposal, 

in Select Symbols where the largest leg 

of the Complex Order is under fifty (50) 

contracts and trades with quotes and 

orders on the regular order book as 

compared to both Members that do not 

receive a Priority Customer rebate in 

non-Select Symbols if any leg of the 

order trades with interest on the regular 

order book, irrespective of order size, 

and Members that do not receive a 

Priority Customer rebate in Select 

Symbols where the largest leg of the 

Complex Order is fifty contracts or more 

and trades with quotes and orders on 

the regular order book. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,15 in general, and furthers the 

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

of the Act,16 in particular, in that it 


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Federal Register / Vol. 86, No. 118 / Wednesday, June 23, 2021 / Notices 32999 

17NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. 

Cir. 2010) (quoting Securities Exchange Act Release 

No. 59039 (December 2, 2008), 73 FR 74770, 74782– 

83 (December 9, 2008) (SR–NYSEArca–2006–21)). 

18Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) 

(‘‘Regulation NMS Adopting Release’’). 

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 proposed changes to the Pricing 

Schedule are reasonable in several 

respects. As a threshold matter, the 

Exchange is subject to significant 

competitive forces in the market for 

options securities transaction services 

that constrain its pricing determinations 

in that market. The fact that this market 

is competitive has long been recognized 

by the courts. In NetCoalition v. 

Securities and Exchange Commission, 

the D.C. Circuit stated as follows: ‘‘[n]o 

one disputes that competition for order 

flow is ‘fierce.’ . . . As the SEC 

explained, ‘[i]n the U.S. national market 

system, buyers and sellers of securities, 

and the broker-dealers that act as their 

order-routing agents, have a wide range 

of choices of where to route orders for 

execution’; [and] ‘no exchange can 

afford to take its market share 

percentages for granted’ because ‘no 

exchange possesses a monopoly, 

regulatory or otherwise, in the execution 

of order flow from broker 

dealers’. . . .’’ 17

The Commission and the courts have 

repeatedly expressed their preference 

for competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. In Regulation NMS, while 

adopting a series of steps to improve the 

current market model, the Commission 

highlighted the importance of market 

forces in determining prices and SRO 

revenues and, also, recognized that 

current regulation of the market system 

‘‘has been remarkably successful in 

promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 18

Numerous indicia demonstrate the 

competitive nature of this market. For 

example, clear substitutes to the 

Exchange exist in the market for options 

security transaction services. The 

Exchange is only one of sixteen options 

exchanges to which market participants 

may direct their order flow. Within this 

environment, market participants can 

freely and often do shift their order flow 

among the Exchange and competing 

venues in response to changes in their 

respective pricing schedules. As such, 

the proposal represents a reasonable 

attempt by the Exchange to increase its 

liquidity and market share relative to its 

competitors. 

Options 7, Section 3 Regular Order Fees 

and Rebates 

The Exchange’s proposal to remove 

certain rule text from Options 7, Section 

3, note 11, and amend the remaining 

rule text is reasonable as a Market 

Maker that qualifies for Market Maker 

Plus when trading against Priority 

Customer Complex Orders that leg into 

the regular order book would no longer 

pay a $0.15 per contract fee, rather, the 

Market Maker would pay no fee, nor 

receive any rebate. This proposal would 

align the pricing to the manner in which 

Market Makers are priced today for 

orders of 50 contracts or more in Select 

Symbols, when those Market Makers 

qualify for Market Maker Plus and trade 

against Priority Customer Complex 

Orders leg into the regular order book. 

Specifically, Market Makers that qualify 

for Market Maker Plus when trading 

against Priority Customer Complex 

Orders that leg into the regular order 

book, would pay no fee, nor receive any 

rebate, irrespective of the size of the 

order. The Exchange believes this 

pricing will continue to incentivize 

Market Makers to qualify for Market 

Maker Plus in order to earn the 

associated rebates for Market Maker 

Plus and also pay no fees when trading 

against Priority Customer Complex 

Orders leg into the regular order book in 

Select Symbols. Market Makers that do 

not qualify for Market Maker Plus 

would continue to pay a $0.25 per 

contract fee when trading against 

Priority Customer Complex Orders that 

leg into the regular order book similar 

to other market participants. 

The Exchange’s proposal to remove 

certain rule text from Options 7, Section 

3, note 11, and amend the remaining 

rule text is equitable and not unfairly 

discriminatory. Market Makers that 

qualifies for Market Maker Plus when 

trading against Priority Customer 

Complex Orders leg into the regular 

order book would uniformly pay no fee, 

nor receive any rebate, irrespective of 

the size of the order. The Exchange will 

continue to assess a $0.25 per contract 

fee to all other non-Priority Customer 

market participants, including Market 

Makers that do not qualify for Market 

Maker Plus, when trading against 

Priority Customer Complex Orders that 

leg into the regular order book. The 

Exchange believes that it is not unfairly 

discriminatory to not assess Market 

Makers a fee if they qualify for Market 

Maker Plus because those Market 

Makers are paid rebates within the 

Market Maker Plus Program for adding 

value for quoting at the NBBO for a 

significant percentage of time. Further, 

all Market Makers are subject to the 

same qualification criteria for Market 

Maker Plus. 

The Exchange’s proposal to capitalize 

the term ‘‘Complex Order’’ in current 

note 10 of Options 7, Section 3 is nonsubstantive. 

Options 7, Section 4, Complex Order 

Fees and Rebates 

The Exchange’s proposal to amend 

the second sentence in note 1 of Options 

7, Section 4 to state, ‘‘This rebate will 

be reduced by $0.15 per contract in 

Select Symbols where the largest leg of 

the complex order is under fifty (50) 

contracts and trades with quotes and 

orders on the regular order book,’’ is 

reasonable. The proposed amendment to 

note 1 of Options 7, Section 4, would 

reduce the current rebate paid in Select 

Symbols, per contract, when the largest 

leg of the Complex Order is under fifty 

contracts and trades with quotes and 

orders on the regular order book. 

Overall, the Exchange believes that the 

Priority Customer Complex Order rebate 

program, as modified, is reasonable 

because the program is optional and all 

Members can choose to participate or 

not. The Exchange’s proposal to reduce 

the Select Symbol rebate when the 

largest leg of the Complex Order is 

under fifty contracts and trades with 

quotes and orders on the regular order 

book, by $0.15 per contract, is intended 

to continue to incentivize Members to 

send order flow to the Exchange despite 

the reduction. Also, the Exchange will 

continue to pay Priority Customer 

rebates for Priority Customer Complex 

Orders of any size which trades with 

non-Priority Customer orders in the 

Complex Order Book, based on the 

Priority Customer Complex Tier 

achieved, thereby continuing to 

incentivize Members to bring Complex 

Order flow to the Exchange to earn the 

rebate on their Priority Customer 

Complex Order volume. Further, the 

proposal would close the pricing gap as 

between Members who receive a 

Priority Customer rebate, which is being 

reduced by this proposal, in Select 

Symbols where the largest leg of the 

Complex Order is under fifty (50) 

contracts and trades with quotes and 

orders on the regular order book as 

compared to both Members that do not 

receive a Priority Customer rebate in 

non-Select Symbols if any leg of the 

order trades with interest on the regular 

order book, irrespective of order size, 

and Members that do not receive a 

Priority Customer rebate in Select 

Symbols where the largest leg of the 


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33000 Federal Register / Vol. 86, No. 118 / Wednesday, June 23, 2021 / Notices 

19MIAX Emerald, LLC’s (‘‘Emerald’’) Pricing 

Schedule provides that Priority Customer Complex 

Orders contra to Priority Customer Complex Orders 

are neither charged nor rebated for Penny and NonPenny Classes. Priority Customer Complex Orders 

that leg into the Simple book are neither charged 

nor rebated. See Emerald’s Pricing Schedule. 20 15 U.S.C. 78s(b)(3)(A)(ii). 

Complex Order is fifty contracts or more 

and trades with quotes and orders on 

the regular order book. This fee remains 

competitive with other options 

markets.19

The Exchange’s proposal to amend 

the second sentence in note 1 of Options 

7, Section 4 to state, ‘‘This rebate will 

be reduced by $0.15 per contract in 

Select Symbols where the largest leg of 

the complex order is under fifty (50) 

contracts and trades with quotes and 

orders on the regular order book,’’ is 

equitable and not unfairly 

discriminatory. The Exchange will 

continue to uniformly pay rebates to 

Priority Customer Complex Orders 

trading with non-Priority Customer 

orders in the Complex Order Book, 

regardless of size, based on the Priority 

Customer Complex Tier achieved. 

Further, the Exchange would uniformly 

pay a reduced rebate (reduced by $0.15 

per contract) in Select Symbols where 

the largest leg of the complex order is 

under fifty contracts and trades with 

quotes and orders on the regular order 

book. 

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. 

Inter-Market Competition 

The proposal does not impose an 

undue burden on inter-market 

competition. The Exchange believes its 

proposal remains competitive with 

other options markets and will offer 

market participants with another choice 

of where to transact options. The 

Exchange notes that it operates in a 

highly competitive market in which 

market participants can readily favor 

competing venues if they deem fee 

levels at a particular venue to be 

excessive, or rebate opportunities 

available at other venues to be more 

favorable. In such an environment, the 

Exchange must continually adjust its 

fees to remain competitive with other 

exchanges that have been exempted 

from compliance with the statutory 

standards applicable to exchanges. 

Because competitors are free to modify 

their own fees in response, and because 

market participants may readily adjust 

their order routing practices, the 

Exchange believes that the degree to 

which fee changes in this market may 

impose any burden on competition is 

extremely limited. 

Options 7, Section 3 Regular Order Fees 

and Rebates 

The Exchange’s proposal to remove 

certain rule text from Options 7, Section 

3, note 11, and amend the remaining 

rule text does not impose an undue 

burden on competition. Market Makers 

that qualifies for Market Maker Plus 

when trading against Priority Customer 

Complex Orders leg into the regular 

order book would uniformly pay no fee, 

nor receive any rebate, irrespective of 

the size of the order. The Exchange will 

continue to assess a $0.25 per contract 

fee to all other non-Priority Customer 

market participants, including Market 

Makers that do not qualify for Market 

Maker Plus, when trading against 

Priority Customer Complex Orders that 

leg into the regular order book. Today, 

Market Makers that qualify for Market 

Maker Plus are paid rebates based on 

their tier qualification for adding value 

for quoting at the NBBO for a significant 

percentage of time. All Market Makers 

are subject to the same qualification 

criteria for Market Maker Plus. 

The Exchange’s proposal to capitalize 

the term ‘‘Complex Order’’ in current 

note 10 of Options 7, Section 3 is nonsubstantive. 

Options 7, Section 4, Complex Order 

Fees and Rebates 

The Exchange’s proposal to amend 

the second sentence in note 1 of Options 

7, Section 4 to state, ‘‘This rebate will 

be reduced by $0.15 per contract in 

Select Symbols where the largest leg of 

the complex order is under fifty (50) 

contracts and trades with quotes and 

orders on the regular order book,’’ does 

not impose an undue burden on 

competition. The Exchange uniformly 

pay rebates to Priority Customer 

Complex Orders trading with nonPriority Customer orders in the Complex 

Order Book, regardless of size, based on 

the Priority Customer Complex Tier 

achieved and will continue to pay 

rebates. Further, the Exchange would 

uniformly pay a reduced rebate 

(reduced by $0.15 per contract) in Select 

Symbols where the largest leg of the 

complex order is under fifty contracts 

and trades with quotes and orders on 

the regular order book. 

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.20 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–2021–13 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–2021–13. 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, 


jbell on DSKJLSW7X2PROD with NOTICES
Federal Register / Vol. 86, No. 118 / Wednesday, June 23, 2021 / Notices 33001 

21 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. 90776 

(Dec. 22, 2020), 85 FR 86625 (Dec. 30, 2020) 

(‘‘Notice’’). 

4See Securities Exchange Act Release No. 91084 

(Feb. 9, 2020), 86 FR 9545 (Feb. 16, 2021). 

5Amendment No. 1 is available on the 

Commission’s website at https://www.sec.gov/ 

comments/sr-nyse-2020-105/srnyse2020105- 

8545367-230641.pdf. 

6See Securities Exchange Act Release No. 91442 

(Mar. 30, 2021), 86 FR 17658 (Apr. 5, 2021) (Notice 

of Filing of Amendment No. 1 and Order Instituting 

Proceedings (‘‘OIP’’)). 

7See Letter from David De Gregorio, Associate 

General Counsel, New York Stock Exchange to 

Vanessa Countryman, Secretary, Office of the 

Secretary, Commission (May 10, 2021) (‘‘OIP 

Response Letter’’). 

8NYSE Rule 2(a) states that the term ‘‘member,’’ 

when referring to a natural person, means a natural 

person associated with a member organization who 

has been approved by the Exchange and designated 

by such member organization to effect transactions 

on the Exchange Trading Floor or any facility 

thereof. 

9NYSE Rule 46 (Floor Officials—Appointment) 

and NYSE Rule 46A (Executive Floor Governors) 

currently set forth the process for the Exchange to 

appoint active NYSE members as Floor Officials. In 

addition, Rule 46 permits the Exchange to appoint 

qualified employees to as act as Floor Governors. 

10The title ‘‘Floor Official’’ includes a broad 

category of titles that include, in order of increasing 

seniority, Floor Officials, Senior Floor Officials, 

Executive Floor Officials, Floor Governors, and 

Executive Floor Governors. See NYSE Rules 46 and 

46A (defining Floor Official, Floor Governor, 

Executive Floor Official, Senior Floor Official, and 

Executive Floor Governor). 

11The term ‘‘Trading Floor’’ is defined in Rule 6A 

to mean the restricted-access physical areas 

designated by the Exchange for the trading of 

securities, commonly known as the ‘‘Main Room’’ 

and the ‘‘Buttonwood Room.’’ 

12Currently, Floor Officials are appointed by the 

Board annually and must complete a mandatory 

education program and pass a qualifications exam. 

See NYSE Rules 46 and 46A. 

13Regulatory employees are not permitted to be 

Staff Governors. See NYSE Rule 46.10. 

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–2021–13 and should be 

submitted on or before July 14, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–13098 Filed 6–22–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92193; File No. SR–NYSE– 

2020–105] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Order 

Approving a Proposed Rule Change, 

as Modified by Amendment No. 1, To 

Revise Rules 46 and 46A To Permit the 

Appointment of Trading Officials 

June 16, 2021. 

I. Introduction 

On December 15, 2020, New York 

Stock Exchange LLC (‘‘NYSE’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Exchange Act’’) 1 and Rule 

19b–4 thereunder,2 a proposed rule 

change to amend NYSE Rules 46 and 

46A, and other related rules, to provide 

for the appointment of Trading Officials. 

The proposed rule change was 

published for comment in the Federal 

Register on December 30, 2020.3

On February 9, 2020, the Commission 

designated a longer period within which 

to approve the proposed rule change, 

disapprove the proposed rule change, or 

institute proceedings to determine 

whether to approve or disapprove the 

proposed rule change, extending the 

date for Commission action until March 

30, 2021.4 On March 25, 2021, the 

Exchange submitted Amendment No. 1 

to the proposed rule change.5

On March 30, 2021, the Commission 

published notice of Amendment No. 1 

and instituted proceedings to determine 

whether to approve or disapprove the 

proposed rule change, as modified by 

Amendment No. 1.6 The Commission 

has received one comment on the 

proposed rule change.7 This order 

approves the proposed rule change, as 

modified by Amendment No. 1. 

II. Description of the Proposed Rule 

Change 

The Exchange proposes to eliminate 

NYSE member 8 and non-member 

employee Floor Officials 9 and transition 

the related duties to the newly created 

position of Trading Official, which 

would be filled by Exchange employees 

appointed by the NYSE CEO or his or 

her designee. In order to effectuate this 

proposed rule change, the Exchange 

would: (1) Delete current NYSE Rules 

46 and 46A, (2) replace those rules with 

new NYSE Rule 46, which would define 

Trading Officials and provide for their 

appointment, and (3) make conforming 

changes to other Exchange rules related 

to the duties and responsibilities of 

Trading Officials. As a result of this 

proposal, the various seniority-based 

gradations of Floor Official would be 

eliminated,10 and the Floor-related 

functions that are currently delegated by 

Exchange Rules to member Floor 

Officials and Staff Governors would be 

performed only by Trading Officials. 

Only Exchange employees, not active 

Exchange members, would be eligible to 

serve as Trading Officials. 

The Exchange anticipates that the 

current Staff Governors, who are 

Exchange employees, would be 

appointed as Trading Officials. 

According to the Exchange, Trading 

Officials, like current Staff Governors, 

would be appointed based on 

experience and necessary business and 

rule knowledge that would enable them 

to participate in and supervise various 

trading situations on the Trading 

Floor,11 and the Exchange would train 

and supervise them.12 In addition, 

Trading Officials, like the current Staff 

Governors, would report to the Head of 

Equities. The Exchange states that this 

reporting structure is appropriate 

because Trading Officials, like Staff 

Governors, will supervise trading on the 

Exchange and will not have any 

regulatory role or responsibility.13

The Exchange is also proposing 

certain technical and conforming 

changes to NYSE Rules 7.35A, 7.35B, 

18(d), 37, 47, 75, 91.50, 93(b), 103.10, 

103A, 103B(G), 104, 112(a)(i), 124(e), 

128B.10, 308(g), and 903(d)(ii), which 

relate to the duties of Trading Officials 

and Floor supervision. Additionally, the 

Exchange proposes to amend NYSE 

Listed Company Manual Section 202.04. 

• NYSE Rule 7.35A (DMM-Facilitated 

Core Open and Trading Halt Auctions) 

sets forth the responsibility of 

designated market makers (‘‘DMMs’’) to 

ensure that registered securities open as 

close to the beginning of Core Trading 

Hours as possible or reopen at the end 

of the halt or pause. 

Æ Subsection (a)(4) provides for Floor 

Official participation in the opening and 

reopening process to provide an 

impartial professional assessment of 

unusual situations, as well as to provide 

guidance with respect to pricing when 

a significant disparity in supply and 

demand exists. The rule also 

contemplates DMM consultations with 

Floor Officials under certain specific 

circumstances. References to Floor 

Official in NYSE Rule 7.35A(a)(4) and 


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