40190 Federal Register / Vol. 82, No. 163 / Thursday, August 24, 2017 / Notices 

7 15 U.S.C. 78s(b)(3)(A)(iii). 

8 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

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

the Commission written notice of its intent to file 

the proposed rule change, along with a brief 

description and text of the proposed rule change, 

at least five business days prior to the date of filing 

of the proposed rule change, or such shorter time 

as designated by the Commission. The Exchange 

has satisfied this requirement. 

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 3See MRX Rule 701. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A)(iii) of the Act 7 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.8

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– 

GEMX–2017–38 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–GEMX–2017–38. 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 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; 

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–GEMX– 

2017–38 and should be submitted on or 

before September 14, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2017–17908 Filed 8–23–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81434; File No. SR–ISE– 

2017–78] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Related to Quoting at the 

Opening 

August 18, 2017. 

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 August 

17, 2017, Nasdaq ISE, LLC (‘‘ISE’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend ISE 

Rule 701, entitled ‘‘Opening.’’ 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at 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 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of this rule change is to 

amend ISE Rule 701, ‘‘Opening’’ to 

specifically amend opening obligations 

for Primary Market Makers or ‘‘PMMs.’’ 

The Exchange notes that the proposed 

rule change is similar to a Nasdaq MRX, 

LLC (‘‘MRX’’) rule.3

Today, ISE Rule 701(c)(3) states that 

the PMM assigned in a particular equity 

option must enter a Valid Width Quote 

not later than one minute following the 

dissemination of a quote or trade by the 

market for the underlying security or, in 

the case of index options, following the 

receipt of the opening price in the 

underlying index. The PMM assigned in 

a particular U.S. dollar-settled foreign 

currency option must enter a Valid 

Width Quote not later than one minute 

after the announced market opening. 

First, the Exchange proposes to add 

the words ‘‘or index’’ to further clarify 

that the requirement applies to equities 

and index options. The Exchange 

proposes this addition to further clarify 


rmajette on DSKBCKNHB2PROD with NOTICES
Federal Register / Vol. 82, No. 163 / Thursday, August 24, 2017 / Notices 40191 

4See proposed Rule 701(c)(1)(i)–(iii). 

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

6 15 U.S.C. 78f(b)(5). 

the requirement in Rule 701(c)(3) clearly 

applies to equity and index options. 

Second, the Exchange proposes to 

modify the PMM’s current obligation to 

enter Valid Width Quotes not later than 

one minute following the dissemination 

of a quote or trade by the market for the 

underlying security or, in the case of 

index options, following the receipt of 

the opening price in the underlying 

index for all assigned options, or in the 

case of a U.S. dollar-settled foreign 

currency option after the announced 

market opening. The Exchange believes 

that the current requirement is very 

burdensome and instead proposes to 

add ‘‘in 90% of their assigned series’’ to 

require a PMM to enter a Valid Width 

Quote not later than one minute 

following the dissemination of a quote 

or trade by the market for the 

underlying security or, in the case of 

index options, following the receipt of 

the opening price in 90% of their 

assigned series, or in the case of a U.S. 

dollar-settled foreign currency option in 

90% of their assigned series not late 

[sic] than one minute after the 

announced market opening. 

Further, the Exchange proposes to 

require PMMs to promptly enter a Valid 

Width Quote in the remainder of their 

assigned series, which did not open 

within one minute following the 

dissemination of a quote or trade by the 

market for the underlying security or, in 

the case of index options, following the 

receipt of the opening price in the 

underlying index, or with respect to a 

U.S. dollar-settled foreign currency 

option, following the announced market 

opening. The Exchange’s proposal is 

intended to account for market 

conditions which may prevent a PMM 

from opening all assigned series, for 

example an extremely volatile market 

which may impact the PMM’s ability to 

enter aggressive quotes. Another 

example would be that news pertaining 

to a specific security is causing the 

underlying price to fluctuate rapidly 

and significantly, thereby causing the 

PMM to await the underlying equity 

price to settle before entering a Valid 

Width Quote. The Exchange’s 

surveillance staff would monitor to 

ensure that PMMs are complying with 

these requirements during the Opening 

Process. 

Today, the Opening Process for an 

options series will be conducted on or 

after 9:30 a.m. if the system has 

received, within two minutes (or such 

shorter time as determined by the 

Exchange and disseminated to 

membership on the Exchange’s Web 

site) of the opening trade or quote on the 

market for the underlying security in the 

case of equity options or, in the case of 

index options, within two minutes of 

the receipt of the opening price in the 

underlying index (or such shorter time 

as determined by the Exchange and 

disseminated to membership on the 

Exchange’s Web site), or within two 

minutes of market opening for the 

underlying currency in the case of a 

U.S. dollar-settled foreign currency 

option (or such shorter time as 

determined by the Exchange and 

disseminated to membership on the 

Exchange’s Web site) the PMM’s Valid 

Width Quote, the Valid Width Quotes of 

two Competitive Market Makers 

(‘‘CMMs’’) or if neither the PMM’s Valid 

Width Quote nor the Valid Width Quote 

of two CMM’s have been submitted 

within such timeframe, if one CMM has 

submitted a Valid Width Quote.4

Implementation 

The Exchange proposes to implement 

this rule change on September 29, 2017. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,5 in general, and furthers the 

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

in particular, in that it is designed to 

promote just and equitable principles of 

trade, to remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system, and, in general to protect 

investors and the public interest for the 

reasons stated below. 

The Exchange’s first proposal at Rule 

701(c)(3) to clarify that the requirement 

applies to equities and index options 

will make clear the applicability of the 

PMM’s requirement to enter Valid 

Width Quotes. This proposed 

amendment is non-substantive and is 

intended to add clarity to the rules. 

The second proposal to amend a 

PMM’s requirement to enter Valid 

Width Quotes during the Opening 

Process is consistent with the Act 

because the 90% requirement to provide 

a Valid Width Quote in a series to 

which the PMM is assigned will 

continue to ensure that options series 

are opened in a timely manner, while 

not imposing a burdensome requirement 

on market participants. PMMs would be 

required to promptly enter a Valid 

Width Quote in the remainder of their 

assigned series, which did not open 

within one minute of the dissemination 

of a quote or trade by the market for the 

underlying security or in the case of 

index options, following the receipt of 

the opening price or, with respect to 

U.S. dollar-settled foreign currency 

options, following the announced 

market opening. The Exchange would 

monitor PMMs to ensure that they 

promptly provided a Valid Width Quote 

for the remainder of the series within a 

reasonable amount of time. The 

Exchange notes that market conditions 

could cause a PMM to experience 

circumstances where opening 100% of 

all of their assigned series within one 

minute of the dissemination of a quote 

or trade by the market for the 

underlying security or, in the case of 

index options, following the receipt of 

the opening price in the underlying 

index or, with respect to U.S. dollarsettled foreign currency options, 

following the announced market 

opening is not feasible. 

The Exchange believes that the 

proposed 90% Valid Width Quoting 

obligation, not later than one minute 

following the dissemination of a quote 

or trade by the market for the 

underlying security or, in the case of 

index options, following the receipt of 

the opening price in the underlying 

index or, with respect to U.S. dollarsettled foreign currency options, 

following the announced market 

opening, along with the ‘‘prompt’’ 

standard for the remaining 10% of their 

assigned series will ensure all series are 

opened in a timely manner. The 

Exchange’s proposal accounts for 

market conditions which may prevent a 

PMM from opening all assigned series, 

for example an extremely volatile 

market which may impact the PMM’s 

ability to enter aggressive quotes. 

Another example would be that news 

pertaining to a specific security is 

causing the underlying price to fluctuate 

rapidly and significantly, thereby 

causing the PMM to await the 

underlying equity price to settle before 

entering a Valid Width Quote. The 

Exchange believes that the time frame 

for PMMs to provide a Valid Width 

Quote in 90% of their assigned series 

not later than one minute following the 

dissemination of a quote or trade by the 

market for the underlying security or, in 

the case of index options, following the 

receipt of the opening price in the 

underlying index or, with respect to 

U.S. dollar-settled foreign currency 

options, following the announced 

market opening will ensure liquidity on 

ISE during the Opening Process. The 

Exchange desires to encourage PMMs to 

continue to make markets on ISE at the 

Opening. The Exchange believes that 

requiring PMMs to provide a Valid 

Width Quote in 90% of their assigned 

options not later than one minute 

following the dissemination of a quote 


rmajette on DSKBCKNHB2PROD with NOTICES
40192 Federal Register / Vol. 82, No. 163 / Thursday, August 24, 2017 / Notices 

7 15 U.S.C. 78s(b)(3)(A)(iii). 

8 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

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

the Commission written notice of its intent to file 

the proposed rule change, along with a brief 

description and text of the proposed rule change, 

at least five business days prior to the date of filing 

of the proposed rule change, or such shorter time 

as designated by the Commission. The Exchange 

has satisfied this requirement. 

or trade by the market for the 

underlying security or, in the case of 

index options, following the receipt of 

the opening price in the underlying 

index or, with respect to U.S. dollarsettled foreign currency options, 

following the announced market 

opening along with the ‘‘prompt’’ 

standard for the remaining 10% will 

enhance the market making functions 

for PMMs and serve to maintain a fair 

and orderly market thereby promoting 

the protection of investors and the 

public interest. 

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. The proposal 

does not change the intense competition 

that exists among the options markets 

for options business including on the 

opening. Nor does the Exchange believe 

that the proposal will impose any 

burden on intra-market competition; the 

Opening Process involves many types of 

participants and interest. 

The Exchange’s proposal to require a 

PMM to enter a Valid Width Quote in 

90% of their assigned series not later 

than one minute time following the 

dissemination of a quote or trade by the 

market for the underlying security or, in 

the case of index options, following the 

receipt of the opening price in the 

underlying index or, with respect to 

U.S. dollar-settled foreign currency 

options, following the announced 

market opening and promptly enter a 

Valid Width quote for the remaining 

10% their assigned series does not 

create an undue burden on competition. 

The proposal will continue to ensure 

that options series are opened in a 

timely manner, while not imposing a 

burdensome requirement on market 

participants. PMMs would be required 

to promptly enter a Valid Width Quote 

in the remainder of their assigned series 

which were not open within one minute 

following the dissemination of a quote 

or trade by the market for the 

underlying security or, in the case of 

index options, following the receipt of 

the opening price in the underlying 

index or, with respect to U.S. dollarsettled foreign currency options, 

following the announced market 

opening. The Exchange would monitor 

PMMs to ensure that they promptly 

entered a Valid Width Quote for the 

remainder of their assigned series 

within a reasonable amount of time. The 

Exchange notes that market conditions 

could cause a PMM to experience 

circumstances where entering a Valid 

Width Quote for 100% of all of their 

assigned series within one minute 

following the dissemination of a quote 

or trade by the market for the 

underlying security or, in the case of 

index options, following the receipt of 

the opening price in the underlying 

index or with respect to U.S. dollarsettled foreign currency options within 

one minute after the announced market 

opening is not feasible. The Exchange 

believes that the proposed 90% 

obligation to enter a Valid Width Quote 

not later than one minute following the 

dissemination of a quote or trade by the 

market for the underlying security or, in 

the case of index options, following the 

receipt of the opening price in the 

underlying index or, with respect to 

U.S. dollar-settled foreign currency 

options, following the announced 

market opening for the underlying 

security along with the ‘‘prompt’’ 

standard for the remaining series will 

ensure all series are opened in a timely 

manner. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A)(iii) of the Act 7 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.8

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–2017–78 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–2017–78. 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 N., 

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; 

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– 

2017–78 and should be submitted on or 

before September 14, 2017. 


rmajette on DSKBCKNHB2PROD with NOTICES
Federal Register / Vol. 82, No. 163 / Thursday, August 24, 2017 / Notices 40193 

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The order routing functionalities permit a 

GEMX Member to provide access and connectivity 

to other Members as well utilize such access for 

themselves. The Exchange notes that under this 

arrangement it will be possible for one GEMX 

Member to be eligible for payments under MARS, 

while another GEMX Member might potentially be 

liable for transaction charges associated with the 

execution of the order, because those orders were 

delivered to the Exchange through a GEMX 

Member’s connection to the Exchange and that 

Member qualified for the MARS Payment. 

Consider the following example: Both Members A 

and B are GEMX Members but A does not utilize 

its own connections to route orders to the 

Exchange, and instead utilizes B’s connections. 

Under this program, B will be eligible for the MARS 

Payment while A is liable for any transaction 

charges resulting from the execution of orders that 

originate from A, arrive at the Exchange via B’s 

connectivity, and subsequently execute and clear at 

The Options Clearing Corporation or ‘‘OCC,’’ where 

A is the valid executing clearing Member or giveup on the transaction. Similarly, where B utilizes 

its own connections to execute transactions, B will 

be eligible for the MARS Payment, but would also 

be liable for any transaction resulting from the 

execution of orders that originate from B, arrive at 

the Exchange via B’s connectivity, and 

subsequently execute and clear at OCC, where B is 

the valid executing clearing Member or give-up on 

the transaction. 

4 If a GEMX Member desires to qualify for MARS, 

that Member must submit an application and certify 

to the System Eligibility requirements for the entire 

time period in which the Member will be eligible 

for MARS Rebates. A GEMX Member may apply 

anytime during the month in which the GEMX 

Member desires to participant in MARS and would 

be eligible for the entire month, provided the GEMX 

Member certified System Eligibility for that entire 

month. For example, a GEMX Member submitting 

an application on the 15th of the month, would 

have to certify System Eligibility for that entire 

month. A form must be submitted no later than the 

last business day of the month in which the GEMX 

Member desires to participate in MARS. The 

application will require the GEMX Member to 

identify the GEMX Member seeking the MARS 

Payment and must list, among other things, the 

connections utilized by the GEMX Member to 

provide Exchange access to other GEMX Members 

and/or itself. MARS Payments would be made one 

month in arrears (i.e., a MARS Payment earned for 

activity in September would be paid to the 

qualifying GEMX Member in October), as is the case 

with all other transactional payments and 

assessments made by the Exchange. 

5A ‘‘Non-Nasdaq GEMX 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. 

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

submitted by a Member for its own proprietary 

account. 

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

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

its own proprietary account. 

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

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

Customer. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2017–17907 Filed 8–23–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81431; File No. SR–GEMX– 

2017–39] 

Self-Regulatory Organizations; Nasdaq 

GEMX, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Create the Market 

Access and Routing Subsidy Program 

August 18, 2017. 

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 August 9, 

2017, Nasdaq GEMX, LLC (‘‘GEMX’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I and II, 

below, which Items have been prepared 

by the Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to create a 

subsidy program, the Market Access and 

Routing Subsidy (‘‘MARS’’), for GEMX 

Members that provide certain order 

routing functionalities 3 to other GEMX 

Members and/or use such 

functionalities themselves. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at 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 

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 

GEMX proposes a new subsidy 

program, MARS, which would pay a 

subsidy to GEMX Members that provide 

certain order routing functionalities to 

other GEMX Members and/or use such 

functionalities themselves. Generally, 

under MARS, GEMX proposes to make 

payments to participating GEMX 

Members to subsidize their costs of 

providing routing services to route 

orders to GEMX. The Exchange believes 

that MARS will attract higher volumes 

of equity and ETF options volume to the 

Exchange from non-GEMX market 

participants as well as GEMX Members. 

MARS System Eligibility 

To qualify for MARS, a GEMX 

Member’s order routing functionality 

would be required to meet certain 

criteria. Specifically the Member’s 

routing system (hereinafter ‘‘System’’) 

would be required to: (1) Enable the 

electronic routing of orders to all of the 

U.S. options exchanges, including 

GEMX; (2) provide current consolidated 

market data from the U.S. options 

exchanges; and (3) be capable of 

interfacing with GEMX’s API to access 

current GEMX match engine 

functionality. The Member’s System 

would also need to cause GEMX to be 

one of the top four default destination 

exchanges for (a) individually executed 

marketable orders if GEMX is at the 

national best bid or offer (‘‘NBBO’’), 

regardless of size or time or (b) orders 

that establish a new NBBO on GEMX’s 

Order Book, but allow any user to 

manually override GEMX as the default 

destination on an order-by-order basis. 

The Exchange would require GEMX 

Members desiring to participate in 

MARS 4 to complete a form, in a manner 

prescribed by the Exchange, and 

reaffirm their information on a quarterly 

basis to the Exchange. Any GEMX 

Member would be permitted to apply 

for MARS, provided the abovereferenced requirements are met, 

including a robust and reliable System. 

The Member would be solely 

responsible for implementing and 

operating its System. 

MARS Eligible Contracts 

A MARS Payment would be made to 

GEMX Members that have System 

Eligibility and have routed the requisite 

number of Eligible Contracts daily in a 

month, which were executed on GEMX. 

For the purpose of qualifying for the 

MARS Payment, Eligible Contracts 

would include Non-Nasdaq GEMX 

Market Maker (FARMM) 5, Firm 

Proprietary 6/Broker-Dealer 7 and 

Professional Customer 8 Orders that are 

executed. Eligible Contracts do not 


rmajette on DSKBCKNHB2PROD with NOTICES