Document ID: SEC-2014-0032-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: International Securities Exchange, LLC
Posted Date: 2014-01-08T05:00Z

[Federal Register Volume 79, Number 5 (Wednesday, January 8, 2014)]
[Notices]
[Pages 1405-1407]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-00074]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71230; File No. SR-ISE-2013-74]

Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change To Amend the Schedule of Fees

January 2, 2014.
    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 December 20, 2013, the International Securities Exchange, LLC (the 
``Exchange'' or the ``ISE'') filed with the Securities and Exchange 
Commission (``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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The ISE proposes to amend its Schedule of Fees to extend its 
Managed Data Access Service Pilot for the sale of a number of real-time 
market data products. The text of the proposed rule change is available 
on the Exchange's Web site (http://www.ise.com), at the principal 
office of the Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of these statements may be examined at 
the places specified in Item IV below. The self-regulatory organization 
has prepared summaries, set forth in sections A, B, and C below, of the 
most significant aspects of such statements.

[[Page 1406]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    On June 6, 2013 the ISE implemented a Managed Data Access Service 
Pilot that established a new pricing and distribution model for the 
sale of a number of real-time market data products.\3\ The Exchange now 
proposes to extend that pilot for an additional 6 month period ending 
May 30, 2014 so that the Exchange can continue to provide this 
alternative delivery option for ISE data feeds.\4\ Managed Data Access 
Service is a pricing and administrative option whereby the ISE assesses 
fees to Managed Data Access Distributors,\5\ who redistribute market 
data to Managed Data Access Recipients.\6\ Managed Data Access 
Distributors are required to monitor the delivery of the data 
retransmitted to their clients, and must agree to reformat, redisplay 
and/or alter the data feeds prior to retransmission without affecting 
the integrity of the data feeds and without rendering any of the feeds 
inaccurate, unfair, uninformative, fictitious, misleading, or 
discriminatory.
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    \3\ See Securities Exchange Act Release No. 69806 (June 20, 
2013), 78 FR 38424 (June 26, 2013) (ISE-2013-39). The Exchange also 
offers a similar Managed Data Access Service program for its Implied 
Volatility and Greeks Feed. See Securities Exchange Act Release No. 
65678 (November 3, 2011), 76 FR 70178 (November 10, 2011) (ISE-2011-
67). This filing does not apply to the Managed Data Access Service 
program for the Implied Volatility and Greeks Feed, which is not 
operated as a pilot.
    \4\ The current Managed Data Access Service pilot provides an 
alternative delivery option for the Real-time Depth of Market Raw 
Data Feed (``Depth Feed''), the Order Feed, the Top Quote Feed, and 
the Spread Feed.
    \5\ A Managed Data Access Distributor redistributes ISE data 
feeds and permits access to the information in those data feeds 
through a controlled device. A Managed Data Access Distributor can 
also redistribute a data feed solution to specific IP addresses, 
including an Application Programming Interface (``API'') or similar 
automated delivery solutions, with only limited entitlement controls 
(e.g., usernames and/or passwords) to a recipient of the 
information.
    \6\ A Managed Data Access Recipient is a subscriber to the 
Managed Data Access Distributor who receives a reformatted data feed 
in a controlled device or at a specific IP address. Market Data 
Access Recipients may be Professional or Non-Professional users.
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    The current fees for the Managed Data Access Service, which are 
proposed to be extended for another 6 month pilot period, are as 
follows:
    The Exchange charges a fee to each Managed Data Access Distributor 
of $2,500 per month for the Depth Feed, $1,500 for each of the Top 
Quote Feed and Spread Feed, and $1,000 per month for the Order Feed. 
The Exchange also charges a fee for each IP address at Managed Data 
Access Recipients that receive market data redistributed by a Managed 
Data Access Distributor, which is $750 per month for the Depth Feed, 
$500 per month for each of the Top Quote Feed and Spread Feed, and $350 
per month for the Order Feed.\7\ In addition, the Exchange charges a 
controlled device fee for each controlled device permitted to access 
market data redistributed by a Managed Data Access Distributor to a 
Market Data Access Recipient that is a Professional user,\8\ which is 
$50 per month for the Depth Feed, $20 per month for the Top Quote Feed, 
$25 per month for the Spread Feed, and $10 per month for the Order 
Feed.\9\ Finally, the Exchange charges a controlled device fee of $5 
per month for each controlled device permitted to access information in 
the Depth Feed redistributed by a Managed Data Access Distributor to a 
Market Data Access Recipient that is a Non-Professional user.\10\ For 
each of the above ISE data feeds, Market Data Access Distributors are 
subject to a minimum fee, which is $5,000 per month for the Depth Feed, 
$3,000 per month for each of the Top Quote Feed and Spread Feed, and 
$2,000 per month for the Order Feed.
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    \7\ This fee is charged per IP address, which covers both 
primary and back-up IP addresses at a Managed Data Access Recipient.
    \8\ A ``Professional user'' is an authorized end-user of the ISE 
data feeds that has not qualified as a Non-Professional user.
    \9\ A controlled device is any device that a distributor of an 
ISE data feed permits to access the information in that data feed.
    \10\ There is no controlled device fee for Non-Professional 
users of the Top Quote Feed, Spread Feed, or Order Feed. A ``Non-
Professional user'' is an authorized end-user of the ISE data feeds 
who is a natural person and who is neither: (a) Registered or 
qualified with the Securities and Exchange Commission, the 
Commodities Futures Trading Commission, any state securities agency, 
any securities exchange or association, or any commodities or 
futures contract market or association; (b) engaged as an 
``investment advisor'' as that term is defined Section 202(a)(11) of 
the Investment Advisers Act of 1940 (whether or not registered or 
qualified under that act); nor (c) employed by a bank or other 
organization exempt from registration under Federal and/or state 
securities laws to perform functions that would require him/her to 
be so registered or qualified if he/she were to perform such 
functions for an organization not so exempt.
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    The Exchange is not proposing to make any changes to the fees 
currently charged under the Managed Data Access Service program.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\11\ in general, and 
Section 6(b)(4) of the Act,\12\ 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. 
The Exchange already runs a Managed Data Access Service program, and is 
merely proposing to extend its pilot for an additional 6 month period. 
The Exchange initially established this program on a pilot basis in 
order gauge the level of interest in this new pricing and distribution 
model, and now wishes to extend this pilot so that it may continue to 
offer this product. The Exchange continues to believe that the fees for 
this program, which will be extended for an additional 6 month period, 
are fair and equitable. The Managed Data Access Service promotes 
broader distribution of controlled data, while offering a pricing 
option that should result in lower fees for subscribers. The Exchange 
is constrained in pricing the Managed Data Access Service as these 
services are entirely optional, and firms may choose whether or not to 
purchase proprietary ISE market data products or to utilize any 
specific pricing alternative. Moreover, the program is not unfairly 
discriminatory because it provides an opportunity for all distributors 
and subscribers, both Professional and Non-Professional, to access the 
ISE data feeds at a potentially lower cost.
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    \11\ 15 U.S.C. 78f.
    \12\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\13\ the Exchange 
does not believe that the proposed rule change will impose any burden 
on intermarket or intramarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. To the contrary, 
the Exchange believes that the proposed rule change will promote 
competition as it extends a pilot that provides an attractive 
alternative pricing model for ISE market data. The vigor of competition 
for market data is significant and the Exchange believes that this 
proposal clearly evidences such competition. ISE proposes to continue 
to offer this optional Managed Access Data Service pricing model in 
order to keep pace with changes in the industry and evolving customer 
needs.
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    \13\ 15 U.S.C. 78f(b)(8).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange has not solicited, and does not intend to solicit, 
comments on this proposed rule change. The Exchange has not received 
any

[[Page 1407]]

unsolicited written comments from members or other interested parties.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act \14\ and Rule 19b-4(f)(2) thereunder,\15\ 
because it establishes a due, fee, or other charge imposed by ISE.
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    \14\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \15\ 17 CFR 240.19b-4(f)(2).
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    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 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-2013-74 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-ISE-2013-74. 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 ISE. 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-2013-74 and should be 
submitted on or before January 29, 2014.
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    \16\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-00074 Filed 1-7-14; 8:45 am]
BILLING CODE 8011-01-P