Federal Register / Vol. 82, No. 202 / Friday, October 20, 2017 / Notices 48865 

31The Exchange represents that the Fund will 

include appropriate risk disclosure in its offering 

documents, including leveraging risk. Leveraging 

risk is the risk that certain transactions of a fund, 

including a fund’s use of derivatives, may give rise 

to leverage, causing a fund to be more volatile than 

if it had not been leveraged. To mitigate leveraging 

risk, the Adviser will segregate or earmark liquid 

assets or otherwise cover the transactions that give 

rise to such risk. 

32 15 U.S.C. 78f(b)(5). 

33 15 U.S.C. 78s(b)(2). 

34 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3SQF is an interface that allows market makers 

to connect and send quotes, sweeps and auction 

responses into the Exchange. Data includes the 

following: (1) Options Auction Notifications (e.g., 

opening imbalance, Flash, PIM, Solicitation and 

Facilitation or other information); (2) Options 

Symbol Directory Messages; (3) System Event 

Messages (e.g., start of messages, start of system 

hours, start of quoting, start of opening); (4) Option 

Trading Action Messages (e.g., halts, resumes); (5) 

Execution Messages; (6) Quote Messages (quote/ 

sweep messages, risk protection triggers or purge 

notifications). 

4SQF Purge is a specific port for the SQF 

interface that only receives and notifies of purge 

requests from the market maker. 

5The term ‘‘Market Makers’’ refers to 

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

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

assets in illiquid assets (calculated at 

the time of investment). 

(7) A minimum of 100,000 Shares for 

the Fund will be outstanding at the 

commencement of trading on the 

Exchange. 

(8) All futures contracts (and options 

on futures), listed options, and ETPs 

held by the Fund will be traded on U.S. 

exchanges, all of which are members of 

ISG or are exchanges with which the 

Exchange has in place a comprehensive 

surveillance sharing agreement. 

(9) The Fund will not invest in any 

non-U.S. equity securities. 

(10) The Fund’s investments will be 

consistent with the Fund’s investment 

objective and will not be used to 

enhance leverage.31 The Fund will not 

invest in leveraged (e.g., 2X, –2X, 3X, or 

–3X) ETPs. 

(11) The Fund’s investments in total 

return swap agreements will be backed 

by investments in U.S. government 

securities in an amount equal to the 

exposure of those contracts. 

(12) The Fund may invest up to 10% 

of its assets in over-the-counter Russell 

2000 put options. 

(13) All money market instruments 

acquired by the Fund will be rated 

investment grade, except that a Fund 

may invest in unrated money market 

instruments that are deemed by the 

Adviser or Sub-Adviser to be of 

comparable quality to money market 

securities rated investment grade. 

(14) The Russell 2000 Index options 

traded on CBOE are highly liquid, with 

average daily trading volume in 2016 of 

71,365 contracts and a notional size per 

contract of $117,169. CBOE is a member 

of the Option Price Regulatory 

Surveillance Authority, which was 

established to provide efficiencies in 

looking for insider trading and serves as 

a central organization to facilitate 

collaboration in insider trading and 

investigations for the U.S. options 

exchanges. 

The Exchange further represents that 

all statements and representations made 

in the filing regarding the index 

composition, the description of the 

portfolio or reference assets, limitations 

on portfolio holdings or reference assets, 

dissemination and availability of index, 

reference asset, and intraday indicative 

values, and the applicability of 

Exchange rules specified in the filing 

constitute continued listing 

requirements for the Fund. The issuer 

has represented to the Exchange that it 

will advise the Exchange of any failure 

by the Fund to comply with the 

continued listing requirements, and, 

pursuant to its obligations under 

Section 19(g)(1) of the Act, the Exchange 

will monitor for compliance with the 

continued listing requirements. The 

Exchange further represents that FINRA 

conducts certain cross-market 

surveillances on behalf of the Exchange 

pursuant to a regulatory services 

agreement, and the Exchange is 

responsible for FINRA’s performance 

under this regulatory services 

agreement. If the Fund is not in 

compliance with the applicable listing 

requirements, the Exchange will 

commence delisting procedures under 

Rule 14.12. 

This approval order is based on all of 

the Exchange’s representations, 

including those set forth above and in 

the Notice. For the foregoing reasons, 

the Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act 32 and the rules and 

regulations thereunder applicable to a 

national securities exchange. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,33 that the 

proposed rule change (SR–BatsBZX– 

2017–53) be, and it hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.34

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–22752 Filed 10–19–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81882; File No. SR–ISE– 

2017–87] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Assess Fees for 

Specialized Quote Feed and SQF 

Purge Ports 

October 16, 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 October 

2, 2017, Nasdaq ISE, LLC (‘‘ISE’’ or 

‘‘Exchange’’) 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 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 proposal to 

amend its Schedule of Fees, as 

described further below. 

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 Exchange is proposing to amend 

its Schedule of Fees to assess fees for 

Specialized Quote Feed (‘‘SQF’’) 3 and 

SQF Purge 4 Ports that Market Makers 5

utilize to connect to the Exchange. The 

Exchange recently completed the 

migration of the Exchange’s T7 trading 


srobinson on DSKBC5CHB2PROD with NOTICES
48866 Federal Register / Vol. 82, No. 202 / Friday, October 20, 2017 / Notices 

6See Securities Exchange Act Release No. 80432 

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

ISE–2017–03). 

7When the Exchange adopted these new ports, it 

initially did not assess any fees so that members 

would not be double charged for connectivity to the 

old Exchange architecture and the new Nasdaq 

INET architecture. See Securities Exchange Act 

Release No. 81095 (July 7, 2017), 82 FR 32409 (July 

13, 2017) (SR–ISE–2017–62). 

8See GEMX Schedule of Fees, IV. Access 

Services, Port Fees, 3. Ports; NOM Rules, Chapter 

XV Options Pricing, Sec. 3 NOM—Ports and other 

Services; BX Rules, Chapter XV Options Pricing, 

Sec. 3 BX—Ports and other Services; and Phlx 

Pricing Schedule, VII. Other Member Fees, B. Port 

Fees. 

9The Exchange migrated on a symbol by symbol 

basis thereby requiring the use of both the old API 

Ports on T7 and the new SQF Ports on INET for a 

period of time. 

10See Securities Exchange Act Release No. 81213 

(July 26, 2017), 82 FR 35855 (August 1, 2017) (SR– 

ISE–2017–73) (hereinafter ‘‘Prior SQF Filing’’). 

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

12 15 U.S.C. 78f(b)(4) and (5). 

13See Prior SQF Filing at 35856. 

14 Id. 

15 Id. at 35858. 

16See GEMX Schedule of Fees, IV. Access 

Services, Port Fees, 3. Ports. 

17See Bats BZX Fee Schedule at: https://

www.bats.com/us/options/membership/fee_

schedule/bzx/. 

system to the Nasdaq INET 

architecture.6 This technology replatform included the adoption of new 

connectivity options, including SQF 

and SQF Purge Ports,7 which are the 

same as the connectivity options 

currently used to connect to the 

Exchange’s affiliates, including Nasdaq 

GEMX (‘‘GEMX’’), Nasdaq Options 

Market (‘‘NOM’’), Nasdaq BX (‘‘BX’’), 

and Nasdaq Phlx (‘‘Phlx’’).8 During the 

migration period, Market Makers had to 

use both old application programming 

interface (‘‘API’’) sessions (‘‘old API 

Ports’’) and new SQF Ports to connect 

to the Exchange.9 To help its members 

transition through the migration period, 

the Exchange filed a fee proposal 

regarding the old API Ports and the new 

SQF Ports.10 As part of that filing, the 

Exchange added the following language 

in Section V of the Schedule of Fees in 

order to avoid double charging Market 

Makers who were using both the old 

and new connectivity options to access 

the Exchange while also allowing the 

Exchange to recoup the costs of 

supporting its architecture (‘‘migration 

accommodation language’’): 

(1) In Section V.D of the Schedule of 

Fees, it is currently noted for the 

monthly $1,000 SQF Port Fee that: ‘‘A 

Market Maker who was not subject to 

the API Session Fee in Section V.C.1 

prior to July 3, 2017 will be assessed the 

above SQF Port Fee from July 3, 2017 

through September 29, 2017. This SQF 

Port Fee will not apply to Market 

Makers that are subject to the Fixed Fee 

in Section V.E.’’ 

(2) Section V.E of the Schedule of 

Fees presently reads: ‘‘Market Makers 

that are subject to the API Session Fee 

in Section V.C.1 as of July 3, 2017 will 

be subject a monthly fixed fee that 

reflects the average of API Session Fees 

assessed to that Market Maker for the 

months of March, April, and May 2017 

(‘‘Fixed Fee’’) in lieu of the API Session 

Fee. This Fixed Fee will be assessed to 

these Market Makers from July 3, 2017 

through September 29, 2017, and 

applies both to API sessions and SQF 

ports used to connect to Nasdaq ISE. 

The Fixed Fee will be charged for all of 

the API sessions and SQF ports used in 

a given month during this time period, 

not per port.’’ 

As discussed above, the Exchange 

completed its migration to INET, and 

the old API Ports have accordingly been 

eliminated and only the new SQF Ports 

are being utilized. As such, these 

instances of the migration 

accommodation language are no longer 

needed and are therefore being deleted. 

The Exchange also seeks to amend 

Section V.D of the Schedule of Fees to 

increase the monthly $1,000 SQF Port 

Fee to $1,100 per SQF Port and to begin 

assessing a monthly $1,100 SQF Purge 

Port Fee per SQF Purge Port. The 

proposed SQF and SQF Purge Port Fees 

will apply to all Market Makers. The 

Exchange believes that its pricing 

remains competitive. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,11 in general, and furthers the 

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

of the Act,12 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. 

As discussed above, the Exchange 

added the migration accommodation 

language and the associated Fixed Fee 

and $1,000 SQF Port Fee in Section V 

of the Schedule of Fees in order to avoid 

double charging members while also 

allowing the Exchange to recoup the 

costs of supporting its architecture. At 

the time these fees were put into place, 

the Exchange recognized that there may 

not be a one-to-one relationship 

between the number of the old API Ports 

and the new SQF Ports needed to 

connect to the Exchange due to the 

different infrastructure of the two 

trading systems.13 The Exchange 

expected, however, that the quoting 

needs and other trading activity of 

Market Makers would remain relatively 

constant throughout the migration and 

across the two platforms.14 As such, the 

Exchange stated that it would use the 

time period between July 3, 2017 and 

September 29, 2017 to monitor the 

manner in which all Market Makers 

connect to the new INET trading system, 

and would reassess whether the related 

fees assessed to Market Makers were 

adequate and reasonable.15 During this 

three-month time frame, the Exchange 

has looked at the manner in which all 

Market Makers connect to INET to 

determine the proposed $1,100 SQF and 

SQF Purge Port Fees, and believes that 

these fees are adequate and reasonable 

in light of how all Market Makers use 

these ports to access the Exchange. 

Furthermore, the Exchange believes that 

assessing all Market Makers the 

proposed fees is reasonable because 

members no longer have connectivity to 

the old Exchange architecture (and 

therefore no longer need to maintain 

two sets of ports), and are using only the 

new SQF Ports to connect to the 

Exchange. 

In addition, the Exchange believes 

that the proposed SQF and SQF Purge 

Port Fees of $1,100 per port, per month 

are reasonable because they are in line 

with the fees assessed by other 

exchanges. For example, GEMX assesses 

a fee of $1,250 per port, per month for 

SQF and SQF Purge Ports today.16 The 

Exchange also notes that Bats BZX 

Exchange, Inc. (‘‘Bats BZX’’) assesses a 

$1,500 fee to its market makers for Ports 

with Bulk Quoting Capabilities.17

The Exchange also believes that the 

proposed fees are an equitable 

allocation and not unfairly 

discriminatory because the Exchange 

will apply these fees uniformly to all 

similarly situated members. 

The Exchange believes that deleting 

the migration accommodation language 

from Section V of the Schedule of Fees 

is reasonable, equitable and not unfairly 

discriminatory because the migration is 

now completed and the migration 

accommodation language is therefore no 

longer needed. Deleting outdated rule 

text will bring greater clarity to the 

Exchange’s Schedule of Fees. 

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. As explained 

above, the proposed SQF and SQF Purge 

Port Fees are assessed uniformly to all 

Market Makers at a rate that is 


srobinson on DSKBC5CHB2PROD with NOTICES
Federal Register / Vol. 82, No. 202 / Friday, October 20, 2017 / Notices 48867 

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

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

2 17 CFR 240.19b–4. 

representative of their typical usage of 

the new ports. Moreover, the proposed 

fees are in line with the fees assessed by 

other exchanges for the same or similar 

connectivity. 

The Exchange notes that it operates in 

a highly competitive market in which 

market participants can readily favor 

competing venues if they deem fee 

levels at a particular venue to be 

excessive, or rebate opportunities 

available at other venues to be more 

favorable. In such an environment, the 

Exchange must continually adjust its 

fees to remain competitive with other 

exchanges and with alternative trading 

systems that have been exempted from 

compliance with the statutory standards 

applicable to exchanges. Because 

competitors are free to modify their own 

fees in response, and because market 

participants may readily adjust their 

order routing practices, the Exchange 

believes that the degree to which fee 

changes in this market may impose any 

burden on competition is extremely 

limited. In sum, if the changes proposed 

herein are unattractive to market 

participants, it is likely that the 

Exchange will lose market share as a 

result. Accordingly, the Exchange does 

not believe that the proposed fee 

changes will impair the ability of 

members or competing order execution 

venues to maintain their competitive 

standing in the financial markets. 

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.18 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–2017–87 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–2017–87. 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–ISE– 

2017–87 and should be submitted on or 

before November 13, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–22757 Filed 10–19–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81878; File No. SR–ISE– 

2017–88] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend the Schedule 

of Fees To Increase the Crossing Fee 

Cap 

October 16, 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 October 

2, 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 the 

Schedule of Fees to increase the 

Crossing Fee Cap for members that do 

not commit in advance to paying the 

full Crossing Fee Cap at the end of each 

month. 

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. 


srobinson on DSKBC5CHB2PROD with NOTICES