Document ID: SEC-2013-2146-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Topaz Exchange LLC
Posted Date: 2013-12-17T05:00Z

[Federal Register Volume 78, Number 242 (Tuesday, December 17, 2013)]
[Notices]
[Pages 76349-76350]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-29961]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71054; File No. SR-Topaz-2013-12]

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

December 12, 2013.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that, on November 27, 2013, the Topaz Exchange, LLC (d/b/a ISE Gemini) 
(the ``Exchange'' or ``Topaz'') filed with the Securities and Exchange 
Commission the proposed rule 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.
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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

    Topaz is proposing to amend its Schedule of Fees to exclude from 
its ADV calculations any trading day on which the Exchange is closed 
early for holiday observance. The proposed rule change is available on 
the Exchange's Internet Web site at 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 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 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to exclude from its average daily volume 
(``ADV'') calculations any trading day on which the Exchange is closed 
early for holiday observance. The Exchange provides tiered rebates to 
market participants that add liquidity in Standard Options and Mini 
Options based on members' ADV in a given month. On October 1, 2013 the 
Exchange filed with the Commission an immediately effective rule filing 
that, among other things, amended its Schedule of Fees to permit the 
Exchange to exclude from its ADV calculation, when determining 
applicable rebate tiers, any day that the market is not open for the 
entire trading day.\3\ Currently, this allows the Exchange to exclude 
days where the Exchange declares a trading halt in all securities or 
honors a market-wide trading halt declared by another market. In that 
filing, however, the Exchange noted that, in contrast to the NASDAQ OMX 
PHLX, LLC (``PHLX'') and NASDAQ Options Market (``NOM'') filings on 
which this language was based,\4\ it would not exclude days on which 
the Exchange is closed early for holiday observance. The Exchange has 
since determined that it would be more equitable to exclude these days 
as well. While members are aware in advance of days subject to an early 
scheduled close--for example, the Friday after Thanksgiving--these are 
still low volume days, and including these days in the ADV calculation 
would have the detrimental effect of lowering members' daily and 
monthly ADV and thereby qualifying members for lower rebates. The 
Exchange believes that this effective cost increase during months where 
the Exchange has scheduled early market closes is undesirable to the 
Exchange and its members, and is therefore proposing to interpret this 
provision in the same manner as NOM and PHLX.\5\ The Exchange notes 
that it will not be making any textual changes to its fees as this 
proposed change brings its interpretation in line with that of other 
markets with substantially similar language to that already included in 
the Schedule Fees [sic].\6\
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    \3\ See Securities Exchange Act Release No. 70670 (October 11, 
2013), 78 FR 62815 (October 22, 2013) (Topaz-2013-08).
    \4\ See Securities Exchange Act Release Nos. 70472 (September 
23, 2013), 78 FR 59738 (September 27, 2013) (PHLX-2013-93); 70470 
(September 23, 2013), 78 FR 59740 (September 27, 2013) (NASDAQ-2013-
117).
    \5\ Id.
    \6\ Id.
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 2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\7\ in general, and Section 
6(b)(4) of the Act,\8\ 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 believes that it is equitable and reasonable to eliminate days 
subject to an early scheduled closed [sic] from its ADV calculation 
because it preserves the Exchange's intent behind adopting volume-based 
pricing, and conforms the rules of the Exchange with those of other 
markets. The Exchange further believes that the proposed change is non-
discriminatory because it applies equally to all members and to all 
volume tiers.
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    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(4).

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[[Page 76350]]

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

    In accordance with Section 6(b)(8) of the Act,\9\ 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 modification to its ADV 
calculation is pro-competitive and will result in lower total costs to 
end users, a positive outcome of competitive markets. Moreover, this 
proposed rule change conforms the rules of the Exchange with those of 
other markets that have adopted substantially similar rules for 
excluding certain days from their ADV calculations. The Exchange 
operates in a highly competitive market in which market participants 
can readily direct their order flow to competing venues. In such an 
environment, the Exchange must continually review, and consider 
adjusting, its fees and rebates to remain competitive with other 
exchanges. For the reasons described above, the Exchange believes that 
the proposed fee changes reflect this competitive environment.
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    \9\ 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 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,\10\ and subparagraph (f)(2) of Rule 19b-4 
thereunder,\11\ because it establishes a due, fee, or other charge 
imposed by Topaz.
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    \10\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \11\ 17 CFR 240.19b-4(f)(2).
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    At any time within 60 days of the filing of such 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-Topaz-2013-12 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-Topaz-2013-12. 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-Topaz-2013-12 and should be 
submitted on or before January 7, 2014.

    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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-29961 Filed 12-16-13; 8:45 am]
BILLING CODE 8011-01-P