44010 Federal Register / Vol. 82, No. 181 / Wednesday, September 20, 2017 / Notices 

11 17 CFR 200.30–3(a)(12). 

1Chicago Stock Exchange, Inc. filed its proposed 

rule change on June 5, 2017. 

2Financial Industry Regulatory Authority, Inc. 

filed its proposed rule change on June 19, 2017. 

3The Commission notes that Bats BYX Exchange, 

Inc. (‘‘Bats BYX’’), Bats BZX Exchange, Inc. (‘‘Bats 

BZX’’), Bats EDGA Exchange, Inc. (‘‘Bats EDGA’’), 

Bats EDGX Exchange, Inc. (‘‘Bats EDGX’’), BOX 

Options Exchange LLC (‘‘BOX’’), C2 Options 

Exchange, Inc., Chicago Board Options Exchange, 

Incorporated (‘‘CBOE’’), Investors Exchange LLC 

(‘‘IEX’’), Nasdaq ISE, LLC (‘‘ISE’’), Nasdaq MRX, 

LLC (‘‘MRX’’), Miami International Securities 

Exchange, LLC (‘‘MIAX’’), MIAX PEARL, LLC, The 

NASDAQ Stock Market LLC (‘‘Nasdaq’’), NASDAQ 

BX, Inc. (‘‘BX’’), Nasdaq GEMX, LLC (‘‘GEMX’’), 

NASDAQ PHLX LLC (‘‘Phlx’’), New York Stock 

Exchange LLC (‘‘NYSE’’), NYSE Arca, Inc. (‘‘NYSE 

Arca’’), NYSE MKT LLC (‘‘NYSE MKT’’) and NYSE 

National, Inc. are also deemed ‘‘Participants’’ for 

purposes of this Order as they, like CHX and 

FINRA, are also Participants of the National Market 

System Plan Governing the Consolidated Audit 

Trail (‘‘CAT NMS Plan’’ or ‘‘Plan’’). See infra note 

17. The Commission also notes that CHX refers to 

Participants of the Plan as ‘‘Plan Participants’’ in its 

proposal. 

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

5 17 CFR 240.19b–4. 

6Bats BYX, Bats BZX, Bats EDGA, Bats EDGX, 

BOX, CBOE, IEX, ISE, MRX, MIAX, Nasdaq, BX, 

GEMX, Phlx, NYSE, NYSE Arca and NYSE MKT 

also submitted proposed rule changes to establish 

procedures for resolving potential disputes related 

to CAT Fees charged to Industry Members. See 

Securities Exchange Act Release Nos. 80780 (May 

26, 2017), 82 FR 25382 (June 1, 2017); 80781 (May 

26, 2017), 82 FR 25369 (June 1, 2017); 80782 (May 

26, 2017), 82 FR 25379 (June 1, 2017); 80837 (June 

1, 2017), 82 FR 26526 (June 7, 2017); 80836 (June 

1, 2017), 82 FR 26539 (June 7, 2017); 80834 (June 

1, 2017), 82 FR 26542 (June 7, 2017); 80835 (June 

1, 2017), 82 FR 26549 (June 7, 2017); 80833 (June 

1, 2017), 82 FR 26529 (June 7, 2017); 80831 (June 

1, 2017), 82 FR 26536 (June 7, 2017); 80832 (June 

1, 2017), 82 FR 26523 (June 7, 2017); 80936 (June 

15, 2017), 82 FR 28153 (June 20, 2017); 80952 (June 

16, 2017), 82 FR 28540 (June 22, 2017); 80967 (June 

19, 2017), 82 FR 28719 (June 23, 2017); 80968 (June 

19, 2017), 82 FR 28705 (June 23, 2017); 80970 (June 

19, 2017), 82 FR 28708 (June 23, 2017); 80971 (June 

19, 2017), 82 FR 28698 (June 23, 2017); and 80966 

(June 19, 2017), 82 FR 28702 (June 23, 2017). 

7See Securities Exchange Act Release No. 80916 

(June 13, 2017), 82 FR 27904 (‘‘Notice’’). 

8See Securities Exchange Act Release No. 81053 

(June 29, 2017), 82 FR 31366. 

9 15 U.S.C. 78s(b)(2). 

10See Securities Exchange Act Release No. 81163 

(July 18, 2017), 82 FR 34343 (July 24, 2017); 81275 

(August 1, 2017), 82 FR 36836 (August 7, 2017). See 

also Securities Exchange Act Release No. 81110 

(July 10, 2017), 82 FR 32598 (July 14, 2017); 81112 

(July 10, 2017), 82 FR 32592 (July 14, 2017); 81113 

(July 10, 2017), 82 FR 32596 (July 14, 2017); 81156 

(July 18, 2017), 82 FR 34337 (July 24, 2017); 81157 

(July 18, 2017), 82 FR 34338 (July 24, 2017); 81158 

(July 18, 2017), 82 FR 34339 (July 24, 2017); 81159 

(July 18, 2017), 82 FR 34338 (July 24, 2017); 81161 

(July 18, 2017), 82 FR 34337 (July 24, 2017); 81162 

(July 18, 2017), 82 FR 34336 (July 24, 2017); 81164 

(July 18, 2017), 82 FR 34346 (July 24, 2017); 81165 

(July 18, 2017), 82 FR 34345 (July 24, 2017); 81166 

(July 18, 2017), 82 FR 34345 (July 24, 2017); 81167 

(July 18, 2017), 82 FR 34337 (July 24, 2017); 81178 

(July 20, 2017), 82 FR 34715 (July 26, 2017); 81179 

(July 20, 2017), 82 FR 34716 (July 26, 2017); 81180 

(July 20, 2017), 82 FR 34728 (July 26, 2017); and 

81181 (July 20, 2017), 82 FR 34727 (July 26, 2017). 

11Amendment No. 1 is available on the 

Commission’s Web site for CHX at: https://

www.sec.gov/comments/sr-chx-2017-11/chx201711- 

2433023-161039.pdf. 12Amendment No. 2 replaced and superseded 

Amendment No. 1 in its entirety. Amendment No. 

2 is available on the Commission’s Web site for 

FINRA at: https://www.sec.gov/comments/sr-finra2017-020/finra2017020-2442749-161061.pdf. 13The Amendments amended the original filings 

to make technical changes to the proposed rule 

changes. Specifically, each Participant amended the 

proposed rule text to remove references to proposed 

‘‘Consolidated Audit Trail Funding Fees,’’ as such 

fees are currently suspended, and replaced such 

term with the phrase ‘‘any fees contemplated by the 

CAT NMS Plan and imposed on Industry Members 

pursuant to [SRO] Rules.’’ See infra note 18. Each 

Participant also removed references to 

‘‘Consolidated Audit Trail Funding Fees’’ from 

paragraphs (a)(1), (b) and (c)(1) of the proposed rule 

text. The Amendments are not subject to notice and 

comment because they are technical amendments 

that do not materially alter the substance of the 

proposed rule changes or raise any novel regulatory 

issues. The Commission notes that on August 30, 

2017, the Commission approved the proposed rule 

changes filed by the other Participants to the CAT 

NMS Plan to establish procedures for resolving 

potential disputes related to CAT Fees charged to 

Industry Members, as modified by such 

amendments. See Securities Exchange Act Release 

No. 81500 (August 30, 2017), 82 FR 42143 

(September 6, 2017) (order approving proposed rule 

changes by Bats BYX, Bats BZX, Bats EDGA, Bats 

EDGX, BOX, CBOE, IEX, ISE, MRX, MIAX, Nasdaq, 

BX, GEMX, Phlx, NYSE, NYSE Arca and NYSE 

MKT to adopt a Consolidated Audit Trail Fee 

Dispute Resolution Process), at 42144 n.19. See also 

supra note 6. 

14The Commission notes that for purposes of this 

Order, unless otherwise specified, capitalized terms 

used in this Order are defined as set forth in the 

proposals, as modified by the Amendments, or in 

the CAT NMS Plan. See supra notes 11–12; see also 

infra note 17. 

15 15 U.S.C. 78k–1. 

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–CBOE– 

2017–060 and should be submitted on 

or before October 11, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–19966 Filed 9–19–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81616; File Nos. SR–CHX– 

2017–11; SR–FINRA–2017–020] 

Self-Regulatory Organizations; 

Chicago Stock Exchange, Inc.; 

Financial Industry Regulatory 

Authority, Inc.; Order Approving 

Proposed Rule Changes, as Modified 

by Amendments, To Adopt a 

Consolidated Audit Trail Fee Dispute 

Resolution Process 

September 14, 2017. 

I. Introduction 

On June 5, 2017 1 and June 19, 2017,2

Chicago Stock Exchange, Inc. (‘‘CHX’’) 

and Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) (each, ‘‘SRO’’ 

or ‘‘Participant;’’ collectively, the 

‘‘Participants’’) 3 filed with the 

Securities and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

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

of 1934 (‘‘Act’’) 4 and Rule 19b–4 

thereunder,5 proposed rule changes to 

establish the procedures for resolving 

potential disputes related to CAT Fees 

charged to Industry Members.6 The 

proposed rule change submitted by CHX 

was published for comment in the 

Federal Register on June 19, 2017.7 The 

proposed rule change submitted by 

FINRA was published for comment in 

the Federal Register on July 6, 2017.8

Pursuant to Section 19(b)(2) of the Act,9

the Commission designated a longer 

period within which to approve, 

disapprove, or institute proceedings to 

determine whether to approve or 

disapprove the proposed rule changes.10

The Commission received no comments 

in response to the proposed rule 

changes. On September 6, 2017, CHX 

filed Amendment No. 1 to its proposed 

rule change,11 and on September 13, 

2017, FINRA filed Amendment No. 2 to 

its proposed rule change.12 This order 

approves the proposed rule changes, as 

modified by the Amendments.13

II. Description of the Proposed Rule 

Changes, as Modified by the 

Amendments 14

The Participants filed with the 

Commission, pursuant to Section 11A of 

the Act 15 and Rule 608 of Regulation 


sradovich on DSKBBY8HB2PROD with NOTICES
Federal Register / Vol. 82, No. 181 / Wednesday, September 20, 2017 / Notices 44011 

16 17 CFR 242.608. 17See Letter from the Participants to Brent J. 

Fields, Secretary, Commission, dated September 30, 

2014; and Letter from Participants to Brent J. Fields, 

Secretary, Commission, dated February 27, 2015. 

On December 24, 2015, the Participants submitted 

an amendment to the CAT NMS Plan. See Letter 

from Participants to Brent J. Fields, Secretary, 

Commission, dated December 23, 2015. The Plan 

was published for comment in the Federal Register 

on May 17, 2016, and approved by the Commission, 

as modified, on November 15, 2016. See Securities 

Exchange Act Release Nos. 77724 (April 27, 2016), 

81 FR 30614 (May 17, 2016); 79318 (November 15, 

2016), 81 FR 84696 (November 23, 2016). 

18Section 11.1(b) of the CAT NMS Plan. The 

Commission notes that the Participants filed 

proposed rule changes to adopt fees to be charged 

to Industry Members, including Industry Members 

that are Execution Venues. See Securities Exchange 

Act Release Nos. 80691 (May 16, 2017), 82 FR 

23344 (May 22, 2017); 80710 (May 17, 2017), 82 FR 

23639 (May 23, 2017). See also Securities Exchange 

Act Release Nos. 80675 (May 15, 2017), 82 FR 

23100 (May 19, 2017); 80697 (May 16, 2017), 82 FR 

23398 (May 22, 2017); 80692 (May 16, 2017), 82 FR 

23325 (May 22, 2017); 80696 (May 16, 2017), 82 FR 

23439 (May 22, 2017); 80693 (May 16, 2017), 82 FR 

23363 (May 22, 2017) 80698 (May 16, 2017), 82 FR 

23457 (May 22, 2017); 80694 (May 16, 2017), 82 FR 

23416 (May 22, 2017); 80721 (May 18, 2017), 82 FR 

23864 (May 24, 2017); 80713 (May 18, 2017), 82 FR 

23956 (May 24, 2017); 80715 (May 18, 2017), 82 FR 

23895 (May 24, 2017); 80726 (May 18, 2017), 82 FR 

23915 (May 24, 2017); 80725 (May 18, 2017), 82 FR 

23935 (May 24, 2017); 80785 (May 26, 2017), 82 FR 

25404 (June 1, 2017); 80784 (May 26, 2017), 82 FR 

25448 (June 1, 2017); 80809 (May 30, 2017), 82 FR 

25837 (June 5, 2017); 80822 (May 31, 2017), 82 FR 

26148 (June 6, 2017); and 80821 (May 31, 2017), 82 

FR 26177 (June 6, 2017). On June 30, 2017, the 

Commission temporarily suspended the proposed 

rule changes and instituted proceedings to 

determine whether to approve or disapprove the 

proposed rule changes. See Securities Exchange Act 

Release No. 81067, 82 FR 31656 (July 7, 2017). 

19 17 CFR 242.608. 20See, e.g., Notice, supra note 7, at 27905. The 

Participants also represent that the Fee Dispute 

Resolution Procedures were modeled after the 

adverse action procedures adopted by various 

exchanges and that such Procedures will be posted 

on the CAT NMS Plan Web site 

(www.catnmsplan.com). See, e.g., id. 

21See, e.g., id. 

22See, e.g., id. 

23See, e.g., id. 

24See, e.g., id. 

25See, e.g., id. The Participants further indicate 

that the members of the Fee Review Subcommittee 

will be subject to the provisions of Section 4.3(d) 

of the CAT NMS Plan regarding recusal and 

Conflicts of Interest. See, e.g., id. 

26See, e.g., id. 

27See, e.g., id. 

28See, e.g., id. 

29See, e.g., id. 

30See, e.g., id. 

31See, e.g., id. The proposed rule changes note, 

however, that the formal rules of evidence will not 

apply. 

32See, e.g., id. 

33See, e.g., id. 

34See, e.g., id. 

NMS thereunder,16 the CAT NMS 

Plan.17 The Plan is designed to create, 

implement and maintain a consolidated 

audit trail (‘‘CAT’’) that would capture 

customer and order event information 

for orders in NMS Securities and OTC 

Equity Securities, across all markets, 

from the time of order inception through 

routing, cancellation, modification, or 

execution in a single consolidated data 

source. The Plan accomplishes this by 

creating CAT NMS, LLC (‘‘Company’’), 

of which each Participant is a member, 

to operate the CAT. 

Under the CAT NMS Plan, the 

Operating Committee of the Company 

(‘‘Operating Committee’’) has the 

discretion to establish funding for the 

Company to operate the CAT, including 

establishing fees that the Participants 

and Industry Members will pay (‘‘CAT 

Fees’’).18 Section 11.5 of the CAT NMS 

Plan requires the Participants to adopt 

rules requiring that disputes with 

respect to fees charged to Industry 

Members pursuant to the CAT NMS 

Plan be determined by the Operating 

Committee or a designated 

Subcommittee. Section 11.5 of the CAT 

NMS Plan also states that decisions by 

the Operating Committee or a 

designated Subcommittee on such 

matters shall be binding on Industry 

Members, without prejudice to the right 

of any Industry Member to seek redress 

from the Commission pursuant to Rule 

608 19 or in any other appropriate 

forum. The Participants filed the 

proposed rule changes to establish the 

procedures for resolving potential 

disputes related to CAT Fees charged to 

Industry Members. 

Fee Dispute Resolution 

The proposals state that disputes 

initiated by an Industry Member with 

respect to CAT Fees charged to such 

Industry Member, including disputes 

related to the designated tier and the fee 

calculated pursuant to such tier, shall be 

resolved by the Operating Committee, or 

a Subcommittee designated by the 

Operating Committee, pursuant to the 

Fee Dispute Resolution Procedures 

adopted by the Operating Committee 

pursuant to the CAT NMS Plan.20 The 

proposals further indicate that decisions 

on such matters shall be binding on 

Industry Members, without prejudice to 

the rights of any such Industry Member 

to seek redress from the Commission or 

in any other appropriate forum.21

Under the Fee Dispute Resolution 

Procedures, an Industry Member that 

disputes CAT Fees charged to such 

Industry Member and that desires to 

have an opportunity to be heard with 

respect to such disputed CAT Fees must 

file a written application with the 

Company within 15 business days after 

being notified of such disputed CAT 

Fees.22 The application must identify 

the disputed CAT Fees, state the 

specific reasons why the applicant takes 

exception to such CAT Fees, and set 

forth the relief sought.23 In addition, if 

the applicant intends to submit any 

additional documents, statements, 

arguments or other material in support 

of the application, the same should be 

so stated and identified under the Fee 

Dispute Resolution Procedures.24

The Participants state that the 

Company will refer applications for 

hearing and review promptly to the Fee 

Review Subcommittee designated by the 

Operating Committee with 

responsibility for conducting the 

reviews of CAT Fee disputes pursuant 

to these Fee Dispute Resolution 

Procedures.25 The proposals note that 

the Fee Review Subcommittee will keep 

a record of the proceedings.26

The proposals further specify that the 

Fee Review Subcommittee will hold 

hearings promptly and will set a hearing 

date.27 Under the proposed rule 

changes, the parties to the hearing shall 

furnish the Fee Review Subcommittee 

with all materials relevant to the 

proceedings at least 72 hours prior to 

the hearing, and each party will have 

the right to inspect and copy the other 

party’s materials prior to the hearing.28

The Participants state that the parties 

to the hearing will consist of the 

applicant and a representative of the 

Company who shall present the reasons 

for the action taken by the Company 

that allegedly aggrieved the applicant.29

The applicant is entitled to be 

accompanied, represented and advised 

by counsel at all stages of the 

proceedings under the proposed rule 

changes.30

The proposals further indicate that 

the Fee Review Subcommittee will 

determine all questions concerning the 

admissibility of evidence and will 

otherwise regulate the conduct of the 

hearing.31 Each of the parties will be 

permitted, under the proposed rule 

changes, to make an opening statement, 

present witnesses and documentary 

evidence, cross examine opposing 

witnesses and present closing 

arguments orally or in writing as 

determined by the Fee Review 

Subcommittee.32 In addition, the Fee 

Review Subcommittee will have the 

right to question all parties and 

witnesses to the proceeding.33 The 

proposals require the Fee Review 

Subcommittee to keep a record of the 

hearing, to set forth its decision in 

writing, and to send the written 

decision to the parties to the 

proceeding.34 Such decisions must 

contain the reasons supporting the 

conclusions of the Fee Review 


sradovich on DSKBBY8HB2PROD with NOTICES
44012 Federal Register / Vol. 82, No. 181 / Wednesday, September 20, 2017 / Notices 

35See, e.g., id. 

36See, e.g., id. at 27905–27906. 

37See, e.g., id. at 27906. 

38See, e.g., id. 

39See, e.g., id. 

40See, e.g., id. 

41See, e.g., id. 

42See, e.g., id. 

43See, e.g., id. 

44See, e.g., id. 

45See, e.g., id. 

46See, e.g., id. 

47See, e.g., id. The Participants clarify that the 

Industry Member may only withhold any invoiced 

CAT Fees that the Industry Member has disputed; 

under the proposed rule changes, the Industry 

Member must pay any invoiced CAT Fees that are 

not disputed when such fees are due, as set forth 

in the invoice. See, e.g., id. 

48See, e.g., id. 

49 In approving these proposed rule changes, the 

Commission has considered the proposed rules’ 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). The Commission 

notes that on August 30, 2017, the Commission 

approved the proposed rule changes filed by the 

other Participants to the CAT NMS Plan to establish 

procedures for resolving potential disputes related 

to CAT Fees charged to Industry Members, as 

modified by such amendments. See Securities 

Exchange Act Release No. 81500 (August 30, 2017), 

82 FR 42143 (September 6, 2017). 

50 15 U.S.C. 78f(b)(5). 

51 15 U.S.C. 78o–3(b)(6). 

52 15 U.S.C. 78f(b)(8). 53 15 U.S.C. 78o–3(b)(9). 54 15 U.S.C. 78f(b). 55 15 U.S.C. 78o–3(b). 56 15 U.S.C. 78f(b)(5). 57 15 U.S.C. 78o–3(b)(6). 58The Commission previously approved the CAT 

NMS Plan. See supra note 17. 

Subcommittee under the proposed rule 

changes.35

The Participants state that the 

decision of the Fee Review 

Subcommittee will be subject to review 

by the Operating Committee either on 

its own motion within 20 business days 

after issuance of the decision or upon 

written request submitted by the 

applicant within 15 business days after 

issuance of the decision.36 The 

applicant’s petition for review must be 

in writing and must specify the findings 

and conclusions to which the applicant 

objects, together with the reasons for 

such objections.37 According to the 

proposed rule changes, any objection to 

a decision not specified in writing will 

be considered to have been abandoned 

and may be disregarded.38 The 

proposed rule changes allow parties to 

petition to submit a written argument to 

the Operating Committee and to request 

an opportunity to make an oral 

argument before the Operating 

Committee.39 The Operating Committee 

will then have sole discretion to grant 

or deny either request.40

Under the proposed rule changes, any 

review conducted by the Operating 

Committee will be made upon the 

record and will be made after such 

further proceedings, if any, as the 

Operating Committee may order.41

Based upon such record, the Operating 

Committee may affirm, reverse or 

modify, in whole or in part, the decision 

of the Fee Review Subcommittee.42 The 

Participants state that the decision of 

the Operating Committee will be in 

writing, will be sent to the parties to the 

proceeding, and will be final.43

A final decision regarding the 

disputed CAT Fees by the Operating 

Committee, or the Fee Review 

Subcommittee (if there is no review by 

the Operating Committee), must be 

provided within 90 days of the date on 

which the Industry Member filed a 

written application regarding disputed 

CAT Fees with the Company.44 The 

proposed rule changes indicate, 

however, that the Operating Committee 

may extend the 90-day time limit at its 

discretion.45 The Fee Dispute 

Resolution Procedures also state that 

any time limits for the submission of 

answers, petitions or other materials 

may be extended by permission of the 

Operating Committee.46

Finally, the Participants state that an 

Industry Member that files a written 

application with the Company disputing 

CAT Fees in accordance with the Fee 

Dispute Resolution Procedures is not 

required to pay such CAT Fees until the 

dispute is resolved in accordance with 

the Procedures, including any review by 

the Commission or in any other 

appropriate forum.47 The Participants 

state that, if it is determined that the 

Industry Member owes any of the 

disputed CAT Fees, then the Industry 

Member must pay such disputed CAT 

Fees that are owed as well as interest on 

such disputed CAT Fees from the 

original due date until such disputed 

CAT Fees are paid at a per annum rate 

equal to the lesser of (i) the Prime Rate 

plus 300 basis points, or (ii) the 

maximum rate permitted by applicable 

law.48

III. Discussion and Commission 

Findings 

After carefully considering the 

proposed rule changes, the Commission 

finds that the proposals, as modified by 

the Amendments, are consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to national securities 

exchanges and national securities 

associations.49 Specifically, the 

Commission finds that the proposed 

rule changes are consistent with Section 

6(b)(5) 50 and Section 15A(b)(6) 51 of the 

Act, which require, among other things, 

that the rules of a national securities 

exchange or national securities 

association be designed to prevent 

fraudulent and manipulative acts and 

practices, 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, and are not designed to 

permit unfair discrimination between 

customers, issuers, brokers or dealers. In 

addition, the Commission finds that the 

proposed rule changes are consistent 

with Section 6(b)(8) 52 and Section 

15A(b)(9) 53 of the Act, which require 

that the rules of a national securities 

exchange or national securities 

association not impose any burden on 

competition that is not necessary or 

appropriate. 

The Commission believes that the 

proposals are consistent with Section 

6(b) 54 and Section 15A(b) 55 of the Act 

in general, and furthers the objectives of 

Section 6(b)(5) 56 and Section 

15A(b)(6) 57 of the Act in particular, 

because they are 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, by providing a uniform 

mechanism by which Industry Members 

may dispute CAT Fees and receive a 

timely review of such disputes. The 

Commission notes that the Fee Dispute 

Resolution Procedures provide for a 

hearing before the Fee Review 

Subcommittee, and if the Industry 

Member is not satisfied with the 

decision of the Fee Review 

Subcommittee, it may request a review 

of the decision by the Operating 

Committee. Further, the proposals 

provide that, although the decisions of 

the Operating Committee or Fee Review 

Subcommittee are binding on an 

Industry Member, the Industry Member 

may seek redress from the Commission 

or in any other appropriate forum. 

The Commission also notes that the 

proposals implement Section 11.5 of the 

CAT NMS Plan.58 Specifically, Section 

11.5 states that the Participants will 

adopt rules requiring that disputes with 

respect to fees charged to Industry 

Members pursuant to Article XI of the 

CAT NMS Plan be determined by the 

Operating Committee or a designated 

Subcommittee. Section 11.5 further 

provides that such fee disputes will be 

determined by the Operating Committee 

or a designated Subcommittee, and that 

decisions on such matters will be 

binding on Industry Members without 

prejudice to the rights of any Industry 

Member to seek redress from the 


sradovich on DSKBBY8HB2PROD with NOTICES
Federal Register / Vol. 82, No. 181 / Wednesday, September 20, 2017 / Notices 44013 

59 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. 80432 

(April 11, 2017), 82 FR 18191 (April 17, 2017) (SR– 

ISE–2017–03). 

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

5 15 U.S.C. 78f(b)(4) and (5). 

6 15 U.S.C. 78s(b)(3)(A)(ii). 

7 17 CFR 240.19b–4(f)(2). 

Commission pursuant to Rule 608 of 

Regulation NMS or in any other 

appropriate forum. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act, that the 

proposed rule changes (SR–CHX–2017– 

11; SR–FINRA–2017–020), as modified 

by the Amendments, are approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.59

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–19968 Filed 9–19–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81610; File No. SR–ISE– 

2017–82] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Eliminate Third Party 

Developer Fees From the Schedule of 

Fees 

September 14, 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 

September 1, 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 eliminate 

third party developer fees from the 

Schedule of Fees. 

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 the proposed rule 

change is to eliminate third party 

developer fees from the Schedule of 

Fees. Currently, the Schedule of Fees 

contains third party developer fees, 

which were previously charged for third 

party developer access to the ISE T7 test 

environment. Specifically, the Schedule 

of Fees includes the following fees for 

third party developers: (1) A $1,000 per 

month one time set-up fee, and (2) a 

$1,000 per month usage fee. With the 

migration of the Exchange to Nasdaq 

INET technology,3 which was 

completed on July 31, 2017, and the 

upcoming decommissioning of the T7 

trading system, including the test 

environment, the Exchange no longer 

charges these third party developer fees. 

The Exchange therefore proposes to 

remove these fees from the Schedule of 

Fees. The Exchange believes that 

removing these fees from the Schedule 

of Fees will reduce member confusion 

about services offered by the Exchange, 

and the fees charged for those services, 

as with the migration to Nasdaq INET 

no services are currently offered that 

could incur these charges. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,4 in general, and furthers the 

objectives of Sections 6(b)(4) and 6(b)(5) 

of the Act,5 in particular, in that it 

provides for the equitable allocation of 

reasonable dues, fees, and other charges 

among members and issuers and other 

persons using any facility, and is not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. The 

Exchange believes that the proposed fee 

change is reasonable, equitable, and not 

unfairly discriminatory as it eliminates 

third party developer fees that are no 

longer charged with the migration of the 

Exchange’s trading system to Nasdaq 

INET technology. As explained above, 

the Exchange completed its migration to 

Nasdaq INET on July 31, 2017 and 

therefore does not provide access to the 

ISE T7 test facility that was the subject 

of this fee. Since the Exchange no longer 

provides this service, the Exchange 

believes that removing the associated 

fee from the Schedule of Fees will 

reduce member confusion about 

services offered by the Exchange, and 

the fees charged for those services. 

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 that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

Exchange is removing outdated third 

party developer fees from the Schedule 

of Fees as the related services will no 

long be offered with the completed 

migration of the Exchange to Nasdaq 

INET. As such, the Exchange does not 

believe that the proposed rule change 

will have any significant impact on 

competition. 

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,6 and Rule 

19b–4(f)(2) 7 thereunder. 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. 


sradovich on DSKBBY8HB2PROD with NOTICES