Federal Register / Vol. 82, No. 155 / Monday, August 14, 2017 / Notices 37973 

11See Phlx’s Pricing Schedule and NOM and BX 

Rules at Chapter XV, Sections 5. 12 15 U.S.C. 78s(b)(3)(A)(ii). 

13 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

regulatory program. The Exchange 

proposes assessing higher fees to those 

members that will require more 

Exchange regulatory services based on 

the amount of customer options 

business they conduct. Additionally, the 

dues and fees paid by members go into 

the general funds of the Exchange, a 

portion of which is used to help pay the 

costs of regulation. The Exchange has in 

place a regulatory structure to surveil, 

conduct examinations and monitor the 

marketplace for violations of Exchange 

Rules. The ORF assists the Exchange to 

fund the cost of this regulation of the 

marketplace. 

Proposal 2—Semi-Annual Changes to 

ORF 

The Exchange believes that the 

proposed rule change to remove the 

limit to amend the ORF only semiannually, with advance notice, is 

reasonable because the Exchange will 

continue to provide market participants 

with thirty (30) days advance notice of 

amending the amount of the ORF. Also, 

the Exchange is required to monitor the 

amount of revenue collected from the 

ORF to ensure that it, in combination 

with its other regulatory fees and fines, 

do not exceed regulatory costs. 

Therefore, the Exchange believes it is 

reasonable to remove the semi-annual 

limit to amend its ORF in order to 

permit the Exchange to make 

amendments to its ORF as necessary to 

comply with the Exchange’s obligations. 

This proposed change would conform 

this rule with that of NASDAQ PHLX 

LLC (‘‘Phlx’’), The NASDAQ Options 

Market LLC (‘‘NOM’’) and NASDAQ BX, 

Inc. (‘‘BX’’).11

The Exchange believes that the 

proposed rule change to remove the 

limit to amend the ORF only semiannually, with advance notice, is 

equitable and not unfairly 

discriminatory because it will apply in 

the same manner to all members that are 

subject to the ORF. The Exchange has in 

place a regulatory structure to surveil 

for, conduct examinations and monitor 

the marketplace for violations of 

Exchange Rules. The ORF assists the 

Exchange to fund the cost of this 

regulation of the marketplace. 

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 ORF is 

not intended to have any impact on 

competition. Rather, it is designed to 

enable the Exchange to recover a 

material portion of the Exchange’s cost 

related to its regulatory activities. The 

Exchange is obligated to ensure that the 

amount of regulatory revenue collected 

from the ORF, in combination with its 

other regulatory fees and fines, does not 

exceed regulatory costs. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act.12 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 No. SR– 

GEMX–2017–31 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 No. 

SR–GEMX–2017–31. 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 No. SR–GEMX– 

2017–31, and should be submitted on or 

before September 5, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–17047 Filed 8–11–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81346; File No. SR–IEX– 

2017–25] 

Self-Regulatory Organizations; 

Investors Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Make a 

Correction to the Exchange Fee 

Schedule Related to Fees for 

Executions That Involve Taking 

Resting Interest With Non-Displayed 

Priority With a Displayable Order 

August 8, 2017. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on August 

7, 2017, the Investors Exchange LLC 

(‘‘IEX’’ or the ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 


sradovich on DSK3GMQ082PROD with NOTICES
37974 Federal Register / Vol. 82, No. 155 / Monday, August 14, 2017 / Notices 

4 15 U.S.C. 78s(b)(1). 

5 17 CFR 240.19b–4. 

6Non-displayed priority refers to an order or 

portion of a reserve order that is booked and ranked 

with non-display priority on the Order Book. See 

Rules 11.190(b)(3) and 11.190(b)(2). 

7This pricing is referred to by the Exchange as 

the ‘‘Non-Displayed Match Fee’’ on the Fee 

Schedule with a Fee Code of ‘I’ which is provided 

by the Exchange on execution reports. 

8See Rule 11.190(b)(3). 

9However, in such transactions, the nondisplayed liquidity adding interest will be subject 

to the Non-Displayed Match Fee. The Exchange also 

does not charge a fee where the adding and 

removing order originated from the same Exchange 

Member. 

10See IEX Fee Schedule. 

11The range is from $0.09 to 7811.66. 

12The range is from $1.51 to $29,482.12. 

13 In the event that a Member owed a credit 

declines the credit, IEX will make a charitable 

donation in the amount of such credit. 

14 15 U.S.C. 78f. 

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

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 

Pursuant to the provisions of Section 

19(b)(1) under the Securities Exchange 

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

thereunder,5 Investors Exchange LLC 

(‘‘IEX’’ or ‘‘Exchange’’) is filing with the 

Commission a proposed rule change to 

make a correction to the Exchange Fee 

Schedule related to fees for executions 

that involve taking resting interest with 

non-displayed priority with a 

displayable order. The Exchange 

proposes to implement the change 

beginning on September 1, 2017. 

The text of the proposed rule change 

is available at the Exchange’s Web site 

at www.iextrading.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 the 

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 statement [sic] 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend its 

Fee Schedule, pursuant to IEX Rule 

15.110(a) and (c), to make a correction 

related to the fees for executions that 

involve taking non-displayed resting 

interest with a displayable order. 

Subject to certain exceptions, the 

Exchange charges $0.0009 per share (or 

0.30% of the total dollar value of the 

transaction for securities priced below 

$1.00) to Members for executions on IEX 

that include resting non-displayed 

interest 6 for both the liquidity 

providing and liquidity removing order 

(the ‘‘Non-Displayed Match Fee’’).7 One 

exception relates to certain displayable 

orders that remove non-displayed 

liquidity upon entry. The Exchange Fee 

Schedule provides that the NonDisplayed Match Fee is not charged for 

displayable orders 8 that remove nondisplayed liquidity upon entry if, on a 

monthly basis, at least 90% of the 

liquidity removing Member’s aggregate 

executed shares of displayable orders 

added liquidity during the month in 

question.9

The Fee Schedule describes the 

calculation to determine if the NonDisplayed Match Fee is charged with 

reference to ‘‘TMVD’’ which means 

‘‘total monthly volume displayable 

calculated as the sum of executions 

from the Member’s displayable orders 

during the calendar month.’’ 10

However, the reference to a ‘‘Member’s’’ 

displayable orders was inadvertent, and 

should instead have referred to each of 

a Member’s market participant 

identifiers, or MPIDs, which is how the 

Exchange in practice has been 

calculating TMVD and thus determines 

whether the Non-Displayed Match Fee 

is applicable to particular executions. 

Accordingly, the Exchange proposes 

to correct the IEX Fee Schedule to 

provide that TMVD means ‘‘total 

monthly volume displayable calculated 

as the sum of executions from each of 

the Member’s MPIDs (on a per MPID 

basis) displayable orders during the 

calendar month.’’ In addition, the 

Exchange proposes a clarifying 

amendment to the single asterisked 

footnote related to the Non-Displayed 

Match Fee to specify that the 90% 

calculation will be performed on a per 

MPID basis. Thus, the phrase ‘‘on a per 

MPID basis’’ would be added after the 

phrase ‘‘at least 90% of TMVD’’ in the 

footnote. Finally, the Exchange proposes 

to add a definition of MPID to the Fee 

Schedule. 

With respect to the calculation of the 

Non-Displayed Match Fee and the 

applicable 90% threshold exception for 

executions of displayable orders that 

remove resting non-displayed liquidity 

upon entry, IEX reviewed Member 

invoices since its launch as an exchange 

in August 2016 through June 30, 2017 

to assess whether any Members were 

charged fees that differed from those 

described in the Fee Schedule. In other 

words, IEX recalculated the NonDisplayed Match Fee and the 90% 

threshold exception on a ‘‘per Member’’ 

basis (which is how the Fee Schedule 

currently reads) instead of on a ‘‘per 

MPID’’ basis (which is how IEX in 

practice had been calculating that fee). 

This assessment identified that nine 

Members were charged such differential 

fees in particular months, in some cases 

more than the fees described in the Fee 

Schedule and in some cases less than 

the fees described in the Fee Schedule. 

In total, seven Members were charged 

and paid $18,948.54 in excess fees 11

and eight Members were not charged 

$44,175.28 in fees that should have been 

charged.12 Five Members were 

overcharged and undercharged in 

different months. 

In order to address the discrepancies, 

IEX will charge or credit each impacted 

member for the net amount overpaid or 

underpaid and will be included in the 

August 2017 monthly invoices to be 

sent in September 2017 pursuant to IEX 

Rule 15.120 notwithstanding that fees 

included thereof are for trading activity 

that occurred over prior months.13

The Exchange proposes to implement 

the revised fee on a going forward basis 

as of September 1, 2017, after which IEX 

will assess this fee on a MPID basis. 

Members will be charged for July and 

August based on the current Fee 

Schedule whereby the 90% calculation 

will be performed on a per Member 

basis, aggregating all of the Member’s 

MPIDs. 

2. Statutory Basis 

IEX believes that the proposed rule 

change is consistent with the provisions 

of Section 6(b) 14 of the Act in general, 

and furthers the objectives of Sections 

6(b)(4) 15 of the Act, 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. In addition, the Exchange 

believes that it is consistent with the 

Act to correct the Fee Schedule so that 

the Fee Schedule is accurate, avoiding 


sradovich on DSK3GMQ082PROD with NOTICES
Federal Register / Vol. 82, No. 155 / Monday, August 14, 2017 / Notices 37975 

16See Securities Exchange Act Release No. 78550 

(August 11, 2016), 81 FR 54873 (August 17, 2016) 

(SR–IEX–2016–09). 

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

18 15 U.S.C. 78s(b)(2)(B). 19 17 CFR 200.30–3(a)(12). 

any potential confusion among 

Members. The Exchange further believes 

that the correction to the Fee Schedule 

is reasonable, equitable, and not 

unfairly discriminatory because all 

similar situated Members will be subject 

to the same fee structure. 

The Exchange also believes that it is 

consistent with the Act and an equitable 

allocation of reasonable dues, fees and 

other charges among its members and 

other persons using its facilities to 

measure whether the 90% threshold for 

adding liquidity with displayable orders 

is reached on an MPID basis. As 

explained in IEX’s rule change adopting 

the exception to the Non-Displayed 

Match Fee, the flexibility is designed to 

address limited inadvertent liquidity 

removal by Members who are largely 

adding displayed liquidity and 

generally intend to add displayed 

liquidity on IEX, to further encourage 

aggressively priced displayed orders.16

The Exchange believes that Members 

that utilize multiple MPIDs generally 

use different MPIDs for different trading 

strategies or customers. Therefore, the 

Exchange believes that measuring by 

MPIDs is a more precise manner of 

assessing whether a Member’s trading 

strategy (or that of a customer) is largely 

adding displayed liquidity and 

generally intends to add displayed 

liquidity with displayable orders. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

IEX does not believe that the 

proposed rule change will result in any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

proposed rule change is designed to 

correct an inadvertent error rather than 

a competitive issue. The Exchange does 

not believe the proposed rule change 

will result on a burden on intramarket 

competition because all Members will 

be subject to the Non-Displayed Match 

Fee in the same manner on a fair and 

consistent basis. While different fees 

will be assessed in some circumstances, 

these different fees are not based on the 

type of Member entering the order and 

all Members can submit any type of 

order. Further, assessing whether the 

Non-Displayed Match Fee is applicable 

on a per MPID basis is intended to 

encourage market participants to enter 

aggressively priced displayed orders on 

the Exchange, which enhances price 

discovery and deepens the Exchange’s 

liquidity pool to the benefit of all 

market participants. Further, the 

Exchange operates in a highly 

competitive environment in which 

market participants can readily favor 

competing venues if fee schedules at 

other venues are viewed as more 

favorable. 

The Exchange also does not believe 

that the proposed rule change will result 

in any burden on intermarket 

competition because other venues are 

free to adopt comparable pricing. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) 17 of the Act. 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 

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 under Section 

19(b)(2)(B) 18 of the Act to determine 

whether the proposed rule change 

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– 

IEX–2017–25 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–IEX–2017–25. This file 

number should be included in 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 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–IEX– 

2017–25 and should be submitted on or 

before September 5, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–17051 Filed 8–11–17; 8:45 am] 

BILLING CODE 8011–01–P 

DEPARTMENT OF STATE 

[Delegation of Authority: 245–2] 

Delegation From the Secretary to the 

Deputy Secretary of Authorities of the 

Secretary of State 

By virtue of the authority vested in 

the Secretary of State by the laws of the 

United States, including 22 U.S.C. 

2651a, I hereby delegate to the Deputy 

Secretary, to the extent authorized by 

law, all authorities and functions vested 

in the Secretary of State or the head of 

agency by any act, order, determination, 

delegation of authority, regulation, or 

executive order, now or hereafter 

issued. 

This Delegation includes all 

authorities and functions that have been 

or may be delegated or re-delegated to 


sradovich on DSK3GMQ082PROD with NOTICES