69170 Federal Register / Vol. 79, No. 224 / Thursday, November 20, 2014 / Notices 

12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 ‘‘Singly Listed Symbols’’ are options overlying 

FXO, QQEW, PLTM, SMDD and FIW. 

4A ‘‘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 Rule 

100(a)(37A). 

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

symbols excluding Select Symbols. 

6A ‘‘Crossing Order’’ is an order executed in the 

Exchange’s Facilitation Mechanism, Solicited Order 

Mechanism, Price Improvement Mechanism (PIM) 

or submitted as a Qualified Contingent Cross order. 

For purposes of this Fee Schedule, orders executed 

in the Block Order Mechanism are also considered 

Crossing Orders. 

7The term ‘‘Market Makers’’ refers to 

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

Makers’’ collectively. See ISE Rule 100(a)(25). 

8 ‘‘FX Option Symbols’’ are options overlying 

AUM, GBP, EUU and NDO. 

9A ‘‘Flash Order’’ is an order that is exposed at 

the National Best Bid or Offer by the Exchange to 

all members for execution, as provided under 

Supplementary Material .02 to ISE Rule 1901. 

10A Market Maker Plus is a Market Maker who 

is on the National Best Bid or National Best Offer 

at least 80% of the time for series trading between 

$0.03 and $3.00 (for options whose underlying 

stock’s previous trading day’s last sale price was 

less than or equal to $100) and between $0.10 and 

$3.00 (for options whose underlying stock’s 

previous trading day’s last sale price was greater 

than $100) in premium in each of the front two 

expiration months. A Market Maker’s single best 

and single worst quoting days each month based on 

the front two expiration months, on a per symbol 

basis, will be excluded in calculating whether a 

Market Maker qualifies for this rebate, if doing so 

will qualify a Market Maker for the rebate. 

For the Commission, by the Division 

of Trading and Markets, pursuant to 

delegated authority.12

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–27450 Filed 11–19–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73601; File No. SR–ISE– 

2014–51] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change To Amend the Schedule of 

Fees 

November 14, 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 November 

3, 2014, the International Securities 

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

‘‘ISE’’) 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 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 the Substance 

of the Proposed Rule Change 

The ISE is proposing to (1) eliminate 

special fees for Singly Listed Symbols, 

and (2) amend its rules for excluding 

days from its average daily volume 

(‘‘ADV’’) calculations when the market 

is not open for the entire trading day. 

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 Exchange proposes to (1) 

eliminate special fees for Singly Listed 

Symbols,3 and (2) amend its rules for 

excluding days from its ADV 

calculations when the market is not 

open for the entire trading day. Each of 

the proposed changes is described in 

more detail below. The Exchange’s 

Schedule of Fees has separate fees 

applicable to Standard Options and 

Mini Options. The Exchange notes that 

while the discussion below relates to 

fees for Standard Options, the fees for 

Mini Options, which are not discussed 

below, are and shall continue to be 

1/10th of the fees for Standard Options. 

1. Singly Listed Symbols 

Other than applicable response fees, 

simple Priority Customer 4 orders in 

Non-Select symbols 5 executed on the 

Exchange are generally not charged a 

transaction fee or fee for Crossing 

Orders,6 including a fee for Price 

Improvement Mechanism (‘‘PIM’’) 

orders of fewer than 100 contracts. By 

contrast, the Exchange charges Priority 

Customer orders in a special group of 

Non-Select Symbols that trade solely on 

the ISE (‘‘Singly Listed Symbols’’) a fee 

of $0.20 per contract for regular and 

Crossing Orders, including PIM orders 

of 100 or fewer contracts. The Exchange 

now proposes to eliminate the special 

fees for these Singly Listed Symbols, 

which will now be subject to the same 

fees as other Priority Customer orders in 

Non-Select Symbols. 

In connection with this change, the 

Exchange also proposes to remove other 

references to Singly Listed Symbols, 

including the definition of Singly Listed 

Symbols in the Preface to the Schedule 

of Fees, and certain fee waivers that 

apply to Singly Listed Symbols as 

described below. The Exchange has a 

Payment for Order Flow (‘‘PFOF’’) fee of 

$0.70 per contract, which is paid by 

Market Makers 7 for each Priority 

Customer contract executed against the 

Market Maker in Non-Select Symbols 

other than Singly Listed Symbols and 

FX Option Symbols,8 or for Flash 

Orders 9 and Complex Orders. In 

addition, Market Makers making or 

taking liquidity receive a discount of 

$0.02 per contract in Standard Options 

only when trading against Priority 

Customer orders preferenced to them in 

the Complex order book in equity 

options that are able to be listed and 

traded on more than one options 

exchange. This discount similarly does 

not apply to Singly Listed Symbols and 

FX Options Symbols, or to option 

classes designated by the Exchange to 

receive a guaranteed allocation pursuant 

to ISE Rule 722(b)(3)(i)(B). As the 

Exchange is eliminating special fees for 

Singly Listed Symbols, the five symbols 

currently designated as Singly Listed 

Symbols will now be subject to the 

PFOF program and will be eligible for 

the Market Maker complex order 

discount described above. 

2. ADV Calculation 

The Exchange provides a Market 

Maker Plus 10 rebate for adding liquidity 

of $0.22 per contract instead of the 

regular $0.20 per contract for Market 

Makers that meet the quoting 

requirements for Market Maker Plus and 

are affiliated with an Electronic Access 

Member that executes a total affiliated 

Priority Customer ADV of 200,000 

contracts or more in a calendar month. 

Similarly, the Exchange charges a 

discounted Priority Customer taker fee 

of $0.25 per contract instead of the 


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Federal Register / Vol. 79, No. 224 / Thursday, November 20, 2014 / Notices 69171 

11This discounted fee is applied retroactively to 

all eligible PIM volume in that month once the 

threshold has been reached. 12 ‘‘Select Symbols’’ are options overlying all 

symbols listed on the ISE that are in the Penny Pilot 

Program. 

13The Exchange notes that this provision 

currently references ‘‘total affiliated’’ Priority 

Customer ADV and proposes to clarify that this 

encompasses all calculations that include Priority 

Customer ADV, such as Priority Customer PIM ADV 

discussed above, which is a subset of total affiliated 

Priority Customer ADV. 

14 15 U.S.C. 78f. 

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

regular $0.30 per contract for members 

with a total affiliated Priority Customer 

ADV that equals or exceeds 200,000 

contracts. And for PIM orders of 100 or 

fewer contracts, the Exchange charges a 

discounted fee of $0.03 per contract 

instead of the regular $0.05 per contract 

for non-Priority Customer orders 

executed by members that have an ADV 

of 20,000 or more Priority Customer 

contracts in a given month executed in 

the PIM.11

In addition, the Exchange provides 

tiered rebates for Priority Customer 

complex orders when these orders trade 

with non-Priority Customer orders in 

the complex order book, or trade with 

quotes and orders on the regular order 

book, based on the member’s ADV in 

Priority Customer complex contracts as 

shown in the table below. 

PRIORITY CUSTOMER COMPLEX ORDER REBATE

Priority customer complex ADV Select 

symbols 12

Non-select 

symbols 

Tier 1; 0–29,999 ...................................................................................................................................................... ($0.30) ($0.63) 

Tier 2; 30,000–74,999 ............................................................................................................................................. ($0.35) ($0.71) 

Tier 3; 75,000–124,999 ........................................................................................................................................... ($0.39) ($0.75) 

Tier 4; 125,000–224,999 ......................................................................................................................................... ($0.41) ($0.80) 

Tier 5; 225,000–299,999 ......................................................................................................................................... ($0.43) ($0.82) 

Tier 6; 300,000+ ...................................................................................................................................................... ($0.45) ($0.83) 

Currently, for purposes of 

determining Priority Customer ADV 13

and Priority Customer Complex ADV, 

any day that the market is not open for 

the entire trading day may be excluded 

from such calculation. Although the 

regular and complex order books may 

function independently, the Exchange 

interprets this rule to require a general 

halt in trading before days can be 

excluded pursuant to this rule. This 

means, for instance, that if the regular 

market is open for trading but the 

complex order book is not accepting 

orders, the day could not be excluded 

from ADV calculations for complex 

order tiers, even though complex order 

volume on the ISE would be negatively 

impacted for that day. The Exchange 

now proposes to independently exclude 

days from its ADV calculations when 

the regular or complex order books are 

not open for the entire trading day. As 

proposed, days may be excluded from 

the Exchange’s regular and complex 

order ADV calculations, if the 

corresponding order book is not open 

for the entire trading day. 

Furthermore, the Exchange notes that 

some members may be inadvertently 

disadvantaged when the ISE removes a 

day from its ADV calculation if the 

member executes a large volume of 

contracts during that day. As this 

disadvantages members that continue to 

trade significant volume on days where 

the regular or complex order book is 

halted, the Exchange proposes to only 

exclude days for members that would 

have a lower ADV with the day 

included. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6 of the Act,14

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

Act,15 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. 

1. Singly Listed Symbols 

The Exchange believes that it is 

reasonable and equitable to eliminate 

special fees for Singly Listed Symbols as 

this will simplify the Schedule of Fees 

to the benefit of members and investors. 

The Singly Listed Symbols account for 

a negligible amount of volume traded 

and the Exchange believes that it is no 

longer necessary to distinguish between 

multiply- and singly-listed options in 

determining the applicable execution 

fees described above. Furthermore, the 

Exchange believes that this proposed 

change is not unfairly discriminatory as 

members will now pay the same fees 

regardless of whether a particular 

symbol is multiply- or singly-listed. 

2. ADV Calculation 

The Exchange believes that it is 

reasonable and equitable to separately 

account for the regular and complex 

order books when determining whether 

a day may be excluded from its ADV 

calculations. Without this proposed 

change, aberrant low volume days 

would have to be counted for ADV 

purposes if an issue in one order book 

did not affect the entire market at ISE, 

resulting in an unintended cost increase 

for members. The proposed change 

preserves the Exchange’s intent behind 

adopting volume-based pricing by 

adjusting the ADV calculations to 

account for days where there is no 

general trading halt but one or the other 

order book is nevertheless unavailable 

to members. Similarly, the Exchange 

believes that it is reasonable and 

equitable to only exclude a day from its 

ADV calculations for members that 

would otherwise have a lower ADV for 

the month. Without this change, 

members that step up and trade 

significant volume on days where the 

regular or complex order book is 

unavailable for a portion of the trading 

day may be negatively impacted, 

resulting in an effective cost increase for 

those members. The Exchange further 

believes that the proposed changes to its 

ADV calculations are not unfairly 

discriminatory because they apply 

equally to all members and ADV 

calculations. As is the ISE’s current 

practice, the Exchange will provide a 

notice, and post it on the Exchange’s 

Web site, to inform members of any day 

that is to be excluded from its ADV 

calculations in connection with this 

proposed rule change. 

The Exchange notes that it has 

determined to charge fees and provide 

rebates in Mini Options at a rate that is 

1/10th the rate of fees and rebates the 

Exchange provides for trading in 

Standard Options. The Exchange 

believes it is reasonable and equitable 

and not unfairly discriminatory to 

assess lower fees and rebates to provide 

market participants an incentive to trade 

Mini Options on the Exchange. The 


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69172 Federal Register / Vol. 79, No. 224 / Thursday, November 20, 2014 / Notices 

16 15 U.S.C. 78f(b)(8). 

17 15 U.S.C. 78s(b)(3)(A)(ii). 

18 17 CFR 240.19b–4(f)(2). 

19 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. 72170 

(May 15, 2014), 79 FR 29231. 

4See Securities Exchange Act Release No. 72458, 

79 FR 36849 (Jun. 30, 2014). The Commission 

determined that it was appropriate to designate a 

longer period within which to take action on the 

proposed rule change so that it has sufficient time 

to consider the proposed rule change. Accordingly, 

the Commission designated August 19, 2014 as the 

date by which it should approve, disapprove, or 

institute proceedings to determine whether to 

disapprove the proposed rule change. 

5 15 U.S.C. 78s(b)(2)(B). 

Exchange believes the proposed fees 

and rebates are reasonable and equitable 

in light of the fact that Mini Options 

have a smaller exercise and assignment 

value, specifically 1/10th that of a 

standard option contract, and, as such, 

is providing fees and rebates for Mini 

Options that are 1/10th of those 

applicable to Standard Options. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

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

the Act,16 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. The 

Exchange believes that eliminating 

special fees for Singly Listed Symbols 

will reduce the complexity of the 

Schedule of Fees to the benefit of 

members and investors, and will not 

have any competitive impact. In 

addition, the Exchange believes that the 

proposed modifications to its ADV 

calculation are pro-competitive and will 

result in lower total costs to end users, 

a positive outcome of competitive 

markets. The Exchange operates in a 

highly competitive market 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 and rebates 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 17 and 

subparagraph (f)(2) of Rule 19b–4 

thereunder,18 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 Number SR– 

ISE–2014–51 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–2014–51. 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 Exchange. 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– 

2014–51, and should be submitted on or 

before December 11, 2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–27451 Filed 11–19–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73598; File No. SR– 

NYSEArca–2014–56] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Designation of a 

Longer Period for Commission Action 

on Proceedings To Determine Whether 

To Approve or Disapprove a Proposed 

Rule Change Relating to Listing and 

Trading of Shares of the PIMCO 

Income Exchange-Traded Fund Under 

NYSE Arca Equities Rule 8.600 

November 14, 2014. 

On May 1, 2014, NYSE Arca, Inc. filed 

with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

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

19b–4 thereunder,2 a proposed rule 

change to list and trade shares of the 

PIMCO Income Exchange-Traded Fund 

under NYSE Arca Equities Rule 8.600. 

The proposed rule change was 

published for comment in the Federal 

Register on May 21, 2014.3 On June 24, 

2014, 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 

disapprove the proposed rule change.4

On August 19, 2014, the Commission 

instituted proceedings under Section 

19(b)(2)(B) of the Act 5 to determine 

whether to approve or disapprove the 


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