Federal Register / Vol. 79, No. 211 / Friday, October 31, 2014 / Notices 64857 

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

2 17 CFR 240.19b–4. 

3Crossing Orders include Qualified Contingent 

Cross orders and orders executed in the Facilitation, 

Solicitation, Price Improvement, or Block Order 

Mechanisms. 

4PrecISE fees are billed based on a billing period 

that begins on the 16th of the month and ends on 

the 15th of the following month. The first billing 

period subject to the proposed fee waiver would 

begin on October 16, 2014 and end on November 

15, 2014. 

5A ‘‘sponsored customer’’ is a non-member that 

trades under a sponsoring member’s execution and 

clearing identity. See Securities Exchange Act 

Release No. 55586 (April 5, 2007), 72 FR 18701 

(April 13, 2007) (SR–ISE–2007–19). Market Makers 

must connect to the Exchange via API and are 

therefore not eligible to use PrecISE. 

6See Securities Exchange Act Release No. 62053 

(May 6, 2010), 75 FR 27033 (May 13, 2010) (SR– 

ISE–2010–35). 

7For example, PrecISE fees will be waived based 

on the full November crossing volume for the 

November 16, 2014 to December 15, 2014 billing 

cycle. 

8See note 4 supra. 

9 15 U.S.C. 78f. 

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

11 15 U.S.C. 78f(b)(8). 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73440; File No. SR–ISE– 

2014–48] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change to Amend the Schedule of 

Fees 

October 27, 2014. 

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 October 

15, 2014, the International Securities 

Exchange, LLC (the ‘‘Exchange’’ or the 

‘‘ISE’’) filed with the Securities and 

Exchange Commission the proposed 

rule change, as described in Items I, II, 

and III below, which items have been 

prepared by the self-regulatory 

organization. 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 ISE is proposing to amend its 

Schedule of Fees to adopt a limited 

waiver of PrecISE fees. The text of the 

proposed rule change is available on the 

Exchange’s Web site (http://

www.ise.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 

self-regulatory organization 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 self-regulatory organization has 

prepared summaries, set forth in 

sections A, B and C below, of the most 

significant aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of the proposed rule 

change is to amend the Schedule of Fees 

to adopt a limited waiver of PrecISE 

Trade® (‘‘PrecISE’’) fees for Electronic 

Access Members (‘‘EAMs’’) and 

sponsored customers that execute a high 

volume of Crossing Orders in a given 

month.3 The Exchange designates this 

filing to become effective on October 16, 

2014.4

PrecISE is the Exchange’s proprietary 

front-end order routing terminal used by 

EAMs and/or their sponsored customers 

to send order flow to ISE.5 The 

Exchange charges EAMs and sponsored 

customers that use PrecISE a monthly 

fee of $350 per user for the first 10 

users, and $100 per user for each 

subsequent user. To give new users time 

to become familiar and fully acclimated 

with all of the functionality that PrecISE 

offers, and as an incentive to encourage 

firms to use PrecISE, the Exchange 

currently waives these PrecISE fees for 

the first two months for all new users.6

The Exchange now proposes to 

introduce a further incentive for firms to 

try PrecISE that is tied to Crossing Order 

volume, which comprises a significant 

portion of volume traded via PrecISE. 

Specifically, the Exchange proposes to 

waive the PrecISE fees described above 

for an EAM or sponsored customer’s 

first five (5) users if that EAM or 

sponsored customer executes a 

minimum of 1.5 million crossing 

contracts during the prior calendar 

month.7 For the first billing cycle that 

this waiver is effective only,8 the 

Exchange proposes to waive these fees 

based on a prorated volume threshold of 

750,000 crossing contracts executed in 

the period beginning on the effective 

date of this filing and ending on October 

31, 2014. For firms that find the PrecISE 

functionality useful, and choose to 

purchase additional terminals above the 

free ones offered here, the free terminals 

will count towards the first 10 users 

otherwise subject to the higher $350 per 

user fee. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6 of the Act,9

in general, and Section 6(b)(4) of the 

Act,10 in particular, in that it is designed 

to provide for the equitable allocation of 

reasonable dues, fees, and other charges 

among its members and other persons 

using its facilities. The Exchange 

believes that the proposed fee change is 

reasonable and equitable as it will give 

firms with a high volume of Crossing 

Orders the opportunity to properly 

evaluate PrecISE over an indefinite 

period. While PrecISE is not limited to 

Crossing Orders, this volume accounts 

for a significant portion of PrecISE use 

today. As such, the Exchange believes 

that providing free terminals to firms 

that submit a substantial volume of 

Crossing Order flow will encourage 

those firms to purchase additional paid 

terminals to support their trading needs. 

The proposed fee waiver will also act as 

an inducement for firms that wish to use 

PrecISE to bring additional Crossing 

Order volume to the Exchange in order 

to qualify for the free terminals. The 

Exchange notes that it is adopting a 

prorated crossing volume threshold for 

the first billing cycle, as the proposed 

fee change would become effective 

during the middle of a calendar month, 

and would therefore only include 

volume from half of that month. 

Furthermore, the Exchange believes that 

the proposed fee change is not unfairly 

discriminatory as all firms that meet the 

crossing volume threshold, including 

EAMs and sponsored customers that 

already use PrecISE for trading and 

those who are trying PrecISE for the first 

time, will be eligible to receive the free 

PrecISE terminals. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

In accordance with Section 6(b)(8) of 

the Act,11 the Exchange does not believe 

that the proposed rule change will 

impose any burden on intermarket or 

intramarket competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. To the 

contrary, the Exchange believes that the 

proposed fee change offers a 

competitive incentive for firms to bring 

Crossing Order flow to the ISE and 

migrate to the Exchange’s front-end 

order routing terminal. The Exchange 

operates in a highly competitive market 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
64858 Federal Register / Vol. 79, No. 211 / Friday, October 31, 2014 / Notices 

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

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

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

2 17 CFR 240.19b–4. 

in which market participants can 

readily direct their order flow to 

competing venues. In such an 

environment, the Exchange must 

continually review, and consider 

adjusting, its fees to remain competitive 

with other exchanges. For the reasons 

described above, the Exchange believes 

that the proposed fee changes reflect 

this competitive environment. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

The Exchange has not solicited, and 

does not intend to solicit, comments on 

this proposed rule change. The 

Exchange has not received any 

unsolicited written comments from 

members or other interested parties. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act 12 and 

subparagraph (f)(2) of Rule 19b–4 

thereunder,13 because it establishes a 

due, fee, or other charge imposed by 

ISE. 

At any time within 60 days of the 

filing of such proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or 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 No. SR–ISE– 

2014–48 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–2014–48. 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 Web site (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 Web site 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 such 

filing also will be available for 

inspection and copying at the principal 

office of the ISE. All comments received 

will be posted without change; the 

Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–ISE– 

2014–48 and should be submitted by 

November 21, 2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–25881 Filed 10–30–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73435; File No. SR–CBOE– 

2014–071] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change Relating to the Complex 

Order Book 

October 27, 2014. 

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 October 

15, 2014, Chicago Board Options 

Exchange, Incorporated (the ‘‘Exchange’’ 

or ‘‘CBOE’’) filed with the Securities 

and Exchange Commission (the 

‘‘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 its 

rules related to the complex order book 

(‘‘COB’’). The text of the proposed rule 

change is provided below. 

(additions are italicized; deletions are 

[bracketed]) 

* * * * * 

Chicago Board Options Exchange, 

Incorporated Rules 

* * * * * 

Rule 6.53C. Complex Orders on the 

Hybrid System 

(a)–(d) No change. 

. . . Interpretations and Policies: 

.01–.10 No change. 

.11 Execution of Complex Orders on 

the COB Open: 

(a) Complex orders, including stockoption orders, do not participate in 

opening rotations for individual 

component option series legs conducted 

pursuant to Rule 6.2B. When the last of 

the individual component option series 

legs that make up a complex order 

strategy has opened (and, in the case of 

a stock-option order, the underlying 

stock has opened), the COB for that 

strategy will open. The COB will open 

with no trade, except as follows: 

([a]i) The COB will open with a trade 

against the individual component 

option series legs if there are complex 

orders on only one side of the COB that 

are marketable against the opposite side 

of the derived net market. The resulting 

execution will occur at the derived net 

market price to the extent marketable 

pursuant to the rules of trading priority 

otherwise applicable to incoming 

electronic orders in the individual 

component legs. To the extent there is 

any remaining balance, the complex 

orders will trade pursuant to 

subparagraph (ii) below or, if unable to 

trade, be processed as they would on an 

intra-day basis under Rule 6.53C. [(]This 

subparagraph ([a]i) is not applicable to 


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