32994 Federal Register / Vol. 86, No. 118 / Wednesday, June 23, 2021 / Notices 

3The exemption applies to the entrance into, 

performance, renewal, and extension of advisory 

contracts. See rule 205–3(a). 4See rule 205–3(d)(1)(i)–(ii); see also Order 

Approving Adjustment for Inflation of the Dollar 

Amount Tests in Rule 205–3 under the Investment 

Advisers Act of 1940, Advisers Act Release No. 

4421 (June 14, 2016) [81 FR 39985 (June 20, 2016)] 

(‘‘2016 Order’’). Rule 205–3 includes other 

definitions of ‘‘qualified client’’ that do not 

reference specific dollar amount tests. See, e.g., rule 

205–3(d)(1)(ii)(B) and rule 205–3(d)(1)(iii). 

5Public Law 111–203, 124 Stat. 1376 (2010). 

6See section 418 of the Dodd-Frank Act 

(requiring the Commission to issue an order every 

five years revising dollar amount tests in a rule that 

exempts a person or transaction from section 

205(a)(1) of the Advisers Act if the dollar amount 

test was a factor in the Commission’s determination 

that the persons do not need the protections of that 

section). 

7See Order Approving Adjustment for Inflation of 

the Dollar Amount Tests in Rule 205–3 under the 

Investment Advisers Act of 1940, Advisers Act 

Release No. 3236 (July 12, 2011) [76 FR 41838 (July 

15, 2011)] (‘‘2011 Order’’). The 2011 Order was 

effective as of September 19, 2011. Id. 

8See rule 205–3(e). 

9See 2016 Order, supra footnote 4. The 2016 

Order was effective as of August 15, 2016. Id. As 

a result of the 2016 Order, the dollar amount 

threshold of the net worth test was increased to 

$2,100,000, but the dollar amount threshold of the 

assets-under-management test remained at 

$1,000,000. Id. 

10See Performance-Based Investment Advisory 

Fees, Advisers Act Release No. 5733 (May 10, 2021) 

[86 FR 26685 (May 17, 2021)]. Because the amount 

of the Commission’s inflation adjustment 

calculations are larger than the rounding amount 

specified under rule 205–3, the dollar amount of 

both tests would be adjusted as a result of the 

Commission’s inflation adjustment calculation 

effected pursuant to the rule. 

11See id. at section II.A. 

12See rule 205–3(c)(1) (‘‘If a registered investment 

adviser entered into a contract and satisfied the 

conditions of this [section] that were in effect when 

the contract was entered into, the adviser will be 

considered to satisfy the conditions of this [section]; 

Provided, however, that if a natural person or 

company who was not a party to the contract 

becomes a party (including an equity owner of a 

private investment company advised by the 

adviser), the conditions of this [section] in effect at 

that time will apply with regard to that person or 

company.’’); see also Investment Adviser 

Performance Compensation, Advisers Act Release 

No. 3198 (May 10, 2011) [76 FR 27959 (May 13, 

2011)], at section II.B.3. The 2011 Order and 2016 

Order each applied to contractual relationships 

entered into on or after the effective date and did 

not apply retroactively to contractual relationships 

previously in existence. See Investment Adviser 

Performance Compensation, Advisers Act Release 

No. 3372 (Feb. 15, 2012) [77 FR 10358 (Feb. 22, 

2012)], at section I, n.16; 2016 Order, supra footnote 

4, at section III. 

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

2 17 CFR 240.19b–4. 

‘‘qualified client.’’ 3 The rule allows an 

adviser to charge performance fees if the 

client has at least a certain dollar 

amount in assets under management 

(currently, $1,000,000) with the adviser 

immediately after entering into the 

advisory contract (‘‘assets-undermanagement test’’) or if the adviser 

reasonably believes, immediately prior 

to entering into the contract, that the 

client has a net worth of more than a 

certain dollar amount (currently, 

$2,100,000) (‘‘net worth test’’).4

The Dodd-Frank Wall Street Reform 

and Consumer Protection Act (‘‘DoddFrank Act’’) 5 amended section 205(e) of 

the Advisers Act to provide that, by July 

21, 2011 and every five years thereafter, 

the Commission shall, by order, adjust 

for the effects of inflation the dollar 

amount thresholds included in rules 

issued under section 205(e), rounded to 

the nearest multiple of $100,000.6 The 

Commission issued an order to revise 

the dollar amount thresholds of the 

assets-under-management and net worth 

tests (to $1,000,000 and $2,000,000, 

respectively, as discussed above) on July 

12, 2011.7 Rule 205–3 codifies the 

threshold amounts revised by the 2011 

Order and states that the Commission 

will issue an order on or about May 1, 

2016, and approximately every five 

years thereafter, adjusting for inflation 

the dollar amount thresholds of the 

rule’s assets-under-management and net 

worth tests based on the Personal 

Consumption Expenditures Chain-Type 

Price Index (‘‘PCE Index,’’ published by 

the United States Department of 

Commerce).8 On June 14, 2016, the 

Commission issued an order adjusting 

for inflation, as appropriate, the dollar 

amount thresholds of the assets-undermanagement test and the net worth test 

(to $1,000,000 and $2,100,000, 

respectively).9

II. Adjustment of Dollar Amount 

Thresholds 

On May 10, 2021, the Commission 

published a notice of intent to issue an 

order that would adjust for inflation the 

dollar amount thresholds of the assetsunder-management test and the net 

worth test.10 The Commission stated 

that, based on calculations that take into 

account the effects of inflation by 

reference to historic and current levels 

of the PCE Index, the dollar amount of 

the assets-under-management test 

would increase from $1,000,000 to 

$1,100,000, and the dollar amount of the 

net worth test would increase from 

$2,100,000 to $2,200,000.11 These dollar 

amounts—which are rounded to the 

nearest multiple of $100,000 as required 

by section 205(e) of the Advisers Act— 

would reflect inflation from 2016 to the 

end of 2020. 

The Commission’s notice established 

a deadline of June 4, 2021 for 

submission of requests for a hearing. No 

requests for a hearing have been 

received by the Commission. 

III. Effective Date of the Order 

This Order is effective as of August 

16, 2021. To the extent that contractual 

relationships are entered into prior to 

the Order’s effective date, the dollar 

amount test adjustments in the Order 

would not generally apply retroactively 

to such contractual relationships, 

subject to the transition rules 

incorporated in rule 205–3.12

IV. Conclusion 

Accordingly, pursuant to section 

205(e) of the Advisers Act and section 

418 of the Dodd-Frank Act, 

It is hereby ordered that, for purposes 

of rule 205–3(d)(1)(i) under the Advisers 

Act [17 CFR 275.205–3(d)(1)], a 

qualified client means a natural person 

who, or a company that, immediately 

after entering into the contract has at 

least $1,100,000 under the management 

of the investment adviser; and 

It is further ordered that, for purposes 

of rule 205–3(d)(1)(ii)(A) under the 

Advisers Act [17 CFR 275.205– 

3(d)(1)(ii)(A)], a qualified client means a 

natural person who, or a company that, 

the investment adviser entering into the 

contract (and any person acting on his 

behalf) reasonably believes, 

immediately prior to entering into the 

contract, has a net worth (together, in 

the case of a natural person, with assets 

held jointly with a spouse) of more than 

$2,200,000. 

By the Commission. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–13192 Filed 6–22–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92197; File No. SR–ICC– 

2021–013] 

Self-Regulatory Organizations; ICE 

Clear Credit LLC; Order Approving 

Proposed Rule Change Relating to the 

ICC End-of-Day Price Discovery 

Policies and Procedures 

June 16, 2021. 

I. Introduction 

On April 23, 2021, ICE Clear Credit 

LLC (‘‘ICC’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

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

of 1934 (the ‘‘Act’’),1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

revise and update ICC’s End-of-Day 

Price Discovery Policies and Procedures 

(the ‘‘Pricing Policy’’). The Pricing 

Policy formalizes ICC’s end-of-day 

(‘‘EOD’’) price discovery process that 

provides prices for cleared credit default 


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Federal Register / Vol. 86, No. 118 / Wednesday, June 23, 2021 / Notices 32995 

3Capitalized terms used but not defined herein 

have the meanings specified in the Pricing Policy. 4Self-Regulatory Organizations; ICE Clear Credit 

LLC; Notice of Filing of Proposed Rule Change 

Relating to the ICC End-of-Day Price Discovery 

Policies and Procedures, Exchange Act Release No. 

91733 (April 30, 2021); 86 FR 24425 (May 6, 2021) 

(SR–ICC–2021–013) (‘‘Notice’’). 5The description herein is substantially 

excerpted from the Notice. 6Notice, 86 FR at 24426. 

7 15 U.S.C. 78s(b)(2)(C). 

8 17 CFR 240.17Ad–22(e)(2)(i) and (v). 

9 17 CFR 240.17Ad–22(e)(6)(iv). 

10 15 U.S.C. 78q–1(b)(3)(F). 

swap (‘‘CDS’’) contracts based on 

submissions from ICC’s Clearing 

Participants.3 The proposed rule change 

was published for comment in the 

Federal Register on May 6, 2021.4 The 

Commission did not receive comments 

regarding the proposed rule change. For 

the reasons discussed below, the 

Commission is approving the proposed 

rule change. 

II. Description of the Proposed Rule 

Change 

ICC proposes updates related to firm 

trade obligations and certain 

clarifications under the Pricing Policy.5

As part of ICC’s current EOD price 

discovery process, ICC Clearing 

Participants (‘‘CPs’’) are required to 

submit daily EOD prices for cleared CDS 

instruments related to their open 

positions at ICC in accordance with the 

Pricing Policy. To encourage CPs to 

provide the best possible EOD 

submissions, ICC selects a subset of the 

potential trades generated and 

designates them as firm trades, which 

ICC then enters CPs into as cleared 

transactions. ICC selects specific dates 

on which it can require CPs to execute 

firm trades (‘‘firm trade days’’). For each 

firm trade day, ICC specifies the 

instruments that may become firm-trade 

eligible, subject to certain specified 

criteria. As described in more detail 

below, ICC proposes additional criteria 

in the Pricing Policy for EOD firm trades 

with the express purpose of maintaining 

the robustness of the established price 

discovery process and ensuring that onmarket firm trades (i.e., firm trades 

resulting from price submissions close 

to EOD levels that reflect market 

expectations and thus do not provide 

any value-additive market information) 

do not incentivize CPs to correct their 

outlying submissions (i.e., off-market 

price submissions outside the proposed 

EOD range).6 By subjecting potential 

trades to its proposed new criteria for 

designating firm trades, ICC would 

avoid creating a high number of firm 

trades around its EOD levels that may 

unnecessarily introduce operational 

risks and inefficiencies into ICC’s EOD 

price discovery process. 

Specifically, ICC proposes to amend 

Section 2.4.1 of the Pricing Policy 

(Selecting Firm-Trade Days and FirmTrade Eligible Instruments) by adding a 

new subsection (d) (Trade Price 

Deviation Constraint) to Section 2.4.1. 

As proposed, new Section 2.4.1.d of the 

Pricing Policy would incorporate 

additional criteria that must be met for 

ICC to generate firm trades, which ICC 

refers to as the trade price deviation 

constraint (the ‘‘constraint’’). In addition 

to new subsection (d), the proposed rule 

change would add references to the 

constraint throughout the existing 

subsections of Section 2.4.1, specifically 

in subsection (a) with respect to firm 

trade days for index instruments, 

subsection (b) with respect to firm trade 

days for single name instruments, and 

subsection (c) with respect to firm trade 

days for index option instruments. The 

proposed rule change would describe 

the constraint in subsection (d) of 

Section 2.4.1 as follows. Under the 

proposed constraint, ICC would avoid 

creating a high number of trades around 

its EOD levels by not designating 

potential trades as firm trades if the 

magnitude of the hypothetical profit/ 

loss is smaller in magnitude than the 

absolute value of the difference between 

the EOD level and either the bid price 

or offer price. To achieve the stated 

purpose of the constraint, ICC would 

only designate a potential trade as a firm 

trade if the trade level fell outside the 

EOD level plus/minus one half the EOD 

bid-offer width (‘‘BOW’’) for the given 

instrument. Such constraint would not 

apply when the potential firm trade is 

formed by crossing two outlying 

submission trades. 

With respect to credit default index 

swaptions (‘‘Index Options’’), ICC 

proposes additional language in 

amended subsection 2.4.1.c (Index 

Option Firm Trade Days) concerning the 

designation of a potential trade as a firm 

trade by subjecting strips of puts and/or 

calls to the CP open interest and ICC 

open interest requirements. The Pricing 

Policy currently incorporates similar 

open interest requirements for indices 

and single names. Under the proposed 

CP open interest requirement in 

amended subsection 2.4.1.c, for ICC to 

designate a potential trade as a firm 

trade, both parties must have a cleared 

open interest, as of the designated times, 

in one or more Index Option instrument 

sharing the same underlying index 

instrument, expiration date, strike 

convention, exercise style and 

transaction type. Under the proposed 

ICC open interest requirement, ICC 

would only designate a potential trade 

in a given Index Option instrument as 

a firm trade if ICC has a cleared open 

interest in that instrument. 

In addition, ICC proposes several 

clarifications to the Pricing Policy. In 

Section 2.2.2 (Non-Submission 

Assessments), ICC proposes to 

abbreviate the term ‘‘ICC Board of 

Managers’’ to ‘‘Board.’’ In Section 2.6 

(CP’s Use of Third-Party Providers), ICC 

proposes revisions to clarify the 

circumstances under which a CP may 

participate in the EOD price discovery 

process on behalf of another CP. Section 

2.6 currently provides that, subject to 

the prior consent of ICC, a CP may 

designate another CP to participate in 

the EOD price discovery process on its 

behalf. Amended Section 2.6 would 

remove ICC’s prior consent and specify 

that a CP ‘‘may allow an affiliated CP 

(CP B) to participate in the EOD price 

discovery process on its behalf.’’ In 

Section 3 (Governance), ICC proposes to 

memorialize its existing practice by 

adding a new sentence stating that the 

Pricing Policy document is subject to 

review by the Risk Committee and 

review and approval by the Board at 

least annually. 

III. Discussion and Commission 

Findings 

Section 19(b)(2)(C) of the Act directs 

the Commission to approve a proposed 

rule change of a self-regulatory 

organization if it finds that such 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to such organization.7 For the 

reasons given below, the Commission 

finds that the proposed rule change is 

consistent with Section 17A(b)(3)(F) of 

the Act and Rules 17Ad–22(e)(2)(i) and 

(v) 8 and 17Ad–22(e)(6)(iv) thereunder.9

A. Consistency With Section 

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

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

requires, among other things, that the 

rules of ICC be designed to promote the 

prompt and accurate clearance and 

settlement of securities transactions 

and, to the extent applicable, derivative 

agreements, contracts, and transactions, 

as well as to assure the safeguarding of 

securities and funds which are in the 

custody or control of ICC or for which 

it is responsible.10

As noted above, the proposed rule 

change would amend Section 2.4.1 of 

the Pricing Policy by adding new 

subsection (d) to incorporate a new 

trade price deviation constraint as 

additional criteria that must be met for 

the generation of firm trades for each 

type of cleared CDS instrument at ICC 

and to amend the existing subsections of 


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32996 Federal Register / Vol. 86, No. 118 / Wednesday, June 23, 2021 / Notices 

11See SEC Release No. 34–82960 (Mar. 28, 2018), 

83 FR 14300, 14302 (Apr. 3, 2018) (SR–ICC–2018– 

002) (finding improvements to ICC’s end-of-day 

pricing process would improve ‘‘ICC’s risk 

management processes related to the end-of-day 

pricing process, including the calculation and 

collection of certain margin requirements’’ and 

would ‘‘promote the prompt and accurate clearance 

and settlement of the products cleared by ICC, and 

. . . enhance ICC’s ability to assure the 

safeguarding of securities and funds which are in 

the custody or control of ICC or for which it is 

responsible’’). 

12 15 U.S.C. 78q–1(b)(3)(F). 

13 17 CFR 240.17Ad–22(e)(2)(i) and (v). 

14 17 CFR 240.17Ad–22(e)(2)(i) and (v). 

15 17 CFR 240.17Ad–22(e)(6)(iv). 

16 17 CFR 240.17Ad–22(e)(6)(iv). 

Section 2.4.1 to include references to 

the constraint where appropriate; 

namely, index instruments or indices in 

subsection (a), single name instruments 

in subsection (b), and Index Options in 

subsection (c). The Commission believes 

that by amending its Pricing Policy to 

include the proposed constraint in 

subsection (d) as described above, ICC 

would enhance its ability to maintain 

the accuracy, integrity, and effectiveness 

of the EOD price discovery process by 

not designating potential trades as firm 

trades if the magnitude of the 

hypothetical profit/loss is smaller in 

magnitude than the absolute value of 

the difference between the EOD level 

and either the bid price or offer price. 

This in turn could incentivize CPs to 

make EOD price submissions that help 

ICC maintain the robustness of its price 

discovery process and help ensure that 

on-market firm trades do not incentivize 

CPs to correct their outlying 

submissions. By subjecting potential 

trades to the proposed constraint, ICC 

would promote the prompt and accurate 

clearance and settlement of CDS 

contracts by avoiding the creation of an 

unnecessarily high number of firm 

trades around its EOD levels that could 

increase operational risks and 

inefficiencies in ICC’s EOD price 

discovery process. 

The Commission also believes that the 

proposed amendments to subsection 

2.4.1.c (Index Option Firm Trade Days), 

as described above, would ensure that 

the firm trade obligations for Index 

Options are subject to similar CP open 

interest and ICC open interest 

requirements as those that currently 

apply to indices and single names. 

These aspects of the proposed rule 

change should further enhance the 

consistency and integrity of ICC’s EOD 

price discovery process across all three 

types of CDS instruments that ICC 

clears. Consequently, the Commission 

believes that all of the proposed changes 

to Section 2.4.1 should promote the 

prompt and accurate clearance and 

settlement of CDS transactions by ICC. 

As noted above, ICC proposes other 

revisions to clarify that a CP may allow 

an affiliated CP to participate in the 

EOD price discovery process on its 

behalf without ICC’s prior consent, to 

memorialize that the Pricing Policy is 

subject to review by the Risk Committee 

and review and approval by the Board 

at least annually, and to include the 

shorthand reference to the ‘‘Board’’ 

instead of the longer reference to the 

ICC Board of Managers in the Pricing 

Policy document. The Commission 

finds that these proposed drafting 

clarifications and improvements would 

enhance the clarity, transparency, and 

readability of the Pricing Policy for ICC 

management, employees, and CPs that, 

in turn, should help them understand 

their respective authorities, rights, and 

obligations regarding ICC’s EOD price 

discovery process and its role in the 

clearance and settlement of CDS 

transactions. 

The Commission believes that the 

proposed changes, taken as a whole, 

should enhance ICC’s ability to manage 

the overall EOD price discovery process 

and the risks of clearing CDS 

instruments, including the calculation 

and collection of margin requirements 

that will account for each type of 

specific instrument as part of its overall 

risk-based margin system and risk 

management processes which rely, in 

part, on the EOD prices submitted by 

ICC’s CPs.11 Moreover, the Commission 

believes these risks, if mismanaged, 

could threaten ICC’s ability to operate 

and therefore its ability to clear and 

settle transactions and safeguard funds. 

As a result, the Commission believes 

that these proposed changes should 

promote ICC’s ability to assure the 

safeguarding of securities and funds 

which are in the custody or control of 

ICC or for which it is responsible. 

Therefore, the Commission believes 

that the proposed rule change is 

consistent with Section 17A(b)(3)(F) of 

the Act.12

B. Consistency With Rule 17Ad– 

22(e)(2)(i) and (v) Under the Act 

Rules 17Ad–22(e)(2)(i) and (v) 13

require each covered clearing agency to 

establish, implement, maintain and 

enforce written policies and procedures 

reasonably designed to, among other 

things, provide for governance 

arrangements that are clear and 

transparent and specify clear and direct 

lines of responsibility, respectively. As 

noted above, the proposed amendments 

to Section 3 (Governance) would 

memorialize that the Pricing Policy is 

subject to review by the Risk Committee 

and review and approval by ICC’s Board 

of Managers at least annually. The 

Commission believes this aspect of the 

proposed rule change would improve 

the clarity and transparency of the 

Pricing Policy document and its 

governance processes by specifying 

relevant roles and lines of responsibility 

within ICC. The Commission believes 

that the proposed rule change is 

therefore consistent with Rules 17Ad– 

22(e)(2)(i) and (v).14

C. Consistency With Rule 17Ad– 

22(e)(6)(iv) Under the Act 

Rule 17Ad–22(e)(6)(iv) 15 requires 

each covered clearing agency to 

establish, implement, maintain, and 

enforce written policies and procedures 

reasonably designed to cover its credit 

exposures to its participants by 

establishing a risk-based margin system 

that, at a minimum, uses reliable 

sources of timely price data and uses 

procedures and sound valuation models 

for addressing circumstances in which 

pricing data are not readily available or 

reliable. The Commission believes the 

proposed changes to Section 2.4.1 to 

incorporate the proposed constraint in 

the firm trade provisions governing each 

type of cleared CDS instrument should 

help ICC manage the quality and 

quantity of EOD price submissions from 

CPs by only designating a potential 

trade as a firm trade if the trade level 

falls outside the proposed EOD range for 

the given CDS instrument. This, in turn, 

should help ICC establish and maintain 

accurate margin requirements that will 

account for the risks posed by each type 

of CDS instrument as part of its overall 

risk-based margin system and risk 

management processes. 

Further, the proposed changes to 

subsection 2.4.1.c that would designate 

a potential trade as a firm trade by 

subjecting strips of puts and/or calls to 

both the CP open interest and ICC open 

interest requirements would help ensure 

that the firm trade obligations for Index 

Options are subject to similar open 

interest requirements as those that 

currently apply to indices and single 

names. The Commission believes these 

proposed changes should help ICC 

maintain the integrity and effectiveness 

of its EOD price discovery process for 

the provision of reliable prices for Index 

Options, which could, in turn, be used 

to further enhance ICC’s ability to 

establish and maintain risk-based 

margin requirements for such 

instruments which rely, in part, on the 

EOD prices provided by CPs. The 

Commission believes that the proposed 

rule change is therefore consistent with 

Rule 17Ad–22(e)(6)(iv).16


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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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