Document ID: SEC-2017-0994-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Nasdaq ISE, LLC
Posted Date: 2017-06-13T04:00Z

[Federal Register Volume 82, Number 112 (Tuesday, June 13, 2017)]
[Notices]
[Pages 27094-27096]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-12152]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80873; File No. SR-ISE-2017-51]

Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Remove Chapter 
21 From the ISE Rulebook

June 7, 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 June 5, 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.

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[[Page 27095]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to remove Chapter 21, entitled ``ISE Stock 
Exchange, LLC Trading Rules'' from the ISE Rulebook.
    The text of the proposed rule change is available on the Exchange's 
Web site at www.ise.com, at the principal office of the Exchange, and 
at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The purpose of this rule change is to remove Chapter 21, entitled 
``ISE Stock Exchange, LLC Trading Rules'' from the ISE Rulebook. The 
Exchange is not currently operating an equities market on ISE. At this 
time, the Exchange proposes to remove Chapter 21 rules related to an 
equities market and reserve that section. The Exchange also proposes to 
remove any cross-references to Chapter 21 within the ISE Rules.\3\
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    \3\ See ISE Rules 100(a)(4), (7), (29), (34), Rule 500 and Rule 
702.
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    In 2006, ISE received approval to adopt rules to govern its 
electronic trading system for equity securities.\4\ The rules in 
Chapter 21 were adopted at that time. These rules govern the operation 
of the ISE Stock Exchange, LLC (``ISE Stock Exchange''),\5\ an 
electronic trading system for equity securities. In addition, certain 
options rules are incorporated into Chapter 21 by reference to those 
rules for the trading of equity securities on the ISE Stock Exchange.
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    \4\ See Securities and Exchange Act Release No. 54528 (September 
28, 2006), 71 FR 58650 (October 4, 2006) (Order Approving Proposed 
Rule Change and Notice of Filing and Order Granting Accelerated 
Approval of Amendment No. 1 Thereto Relating to the Adoption of 
Rules To Govern Its Electronic Trading System for Equities) (SR-ISE-
2006-48).
    \5\ On September 1, 2006, the Commission approved a proposed 
rule change establishing the ISE Stock Exchange as a ``facility,'' 
as defined in Section 3(a)(2) of the Act, of the Exchange. See 
Securities Exchange Act Release No. 54399, 71 FR 53728 (September 
12, 2006) (SR-ISE-2006-45).
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    ISE Stock Exchange operated until December 23, 2008, at which time, 
ISE merged ISE Stock Exchange with a wholly-owned subsidiary of Direct 
Edge Holdings LLC (``Direct Edge'').\6\ For a period of time after 
which ISE ceased operating the equities business, ISE, pursuant to a 
regulatory services agreement, conducted various regulatory services on 
behalf of EDGX Exchange, Inc. until such time as EDGX received its 
registration in 2010.\7\
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    \6\ See Securities and Exchange Act Release No. 59135 (December 
22, 2008); 73 FR 79954 (December 30, 2008) (SR-ISE-2008-85).
    \7\ See Securities and Exchange Act Release No. 61698 (March 12, 
2010); 75 FR 13151 (March 18, 2010) (File Nos. 10-194 and 10-196) 
(In the Matter of the Applications of EDGX Exchange, Inc., and EDGA 
Exchange, Inc. for Registration as National Securities Exchanges; 
Findings, Opinion, and Order of the Commission.)
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    At this time, ISE is proposing to remove all rules in Chapter 21 
from the ISE Rulebook, along with the references to Chapter 21 in other 
ISE rules. The Exchange would file a proposed rule change to adopt new 
rules if it determines to operate an equities market in the future.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\8\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\9\ in particular, in that it is designed to promote 
just and equitable principles of trade, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general to protect investors and the public interest 
for the reasons stated below. The Exchange is currently not operating 
an equities market and has not operated an equities market since 
December 2008. The Exchange desires to remove the rules relating to an 
equities market from its Rulebook at this time as well as references to 
Chapter 21 in other ISE rules. The Exchange believes that the removal 
of the rules and cross-references are consistent with the Act to 
perfect the mechanism of a free and open market and a national market 
system, and, in general to protect investors and the public interest in 
avoiding any confusion the operation of these rules.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
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    Today, ISE operates an options market which will not be impacted by 
the removal of the Chapter 21 rules and cross-references to Chapter 21. 
The remainder of the Rulebook concerns the operation of the options 
product.
    The Exchange does not believe that the remove of Chapter 21 and 
cross-references to Chapter 21 will materially impact members on ISE as 
such trading has not occurred since late 2008.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any undue burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. The proposal would eliminate 
confusion with respect to ISE's offerings. The Exchange does not 
believe that this proposal imposes any burden on competition because 
there are many venues today which offer trading in equities products. 
The Exchange does not believe that the removal of Chapter 21 and cross-
references to Chapter 21 will materially impact members on ISE as such 
trading has not occurred since December 2008. Also, the options market 
will not be impacted by the removal of the Chapter 21 rules and cross-
references to Chapter 21.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \10\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\11\
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    \10\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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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: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection

[[Page 27096]]

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-2017-51 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-ISE-2017-51. 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-2017-51 and should be 
submitted on or before July 5, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-12152 Filed 6-12-17; 8:45 am]
BILLING CODE 8011-01-P