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Notice

Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Eliminate Fees and Rebates for Trades Executed on June 30, 2017 in INET Launch Symbols

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Start Preamble July 12, 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 30, 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 eliminate fees and rebates for trades executed on June 30, 2017 in INET Launch Symbols.

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 amend the Schedule of Fees to eliminate fees and rebates for trades executed on June 30, 2017 in the following symbols: ACN, ACOR, AEO, AFSI, AMJ, AOBC, BKD, BTE, BV, CBI, CCL, CLR, CME, CNQ, ADM, ADSK, AGNC, ASHR, BBT, BK, BSX, CIEN, and IBM (“INET Launch Symbols”).[3] This change is being made in connection with the migration of the Exchange's trading system to the Nasdaq INET technology, which began on June 12, 2017.[4] On June 9, 2017, the Exchange filed a proposed rule change that eliminated fees and rebates for trades in FX Options that began trading on INET with the launch of the re-platformed trading system.[5] In addition, on June 27, 2017 the Exchange filed another proposed rule change that eliminated fees and rebates for trades in symbol KANG that began trading on INET on that date.[6] The Exchange now proposes to similarly eliminate fees and rebates for trades in INET Launch Symbols executed on the INET trading system on June 30, 2017. With this change, no fees or rebates will be charged for executions on INET during the month of June. Because the Exchange is eliminating fees and rebates for trades in these products, trades in INET Launch Symbols executed on June 30, 2017 will not be counted towards a member's tier for June activity. In addition, activity in the following INET Launch Symbols that are Select Symbols [7] will not be counted for purposes of determining Market Maker Plus [8] tiers: ADM, ADSK, Start Printed Page 32894AGNC, ASHR, BBT, BK, BSX, CIEN, and IBM. The proposed change would allow the Exchange to bill June fees solely based on activity traded on the current T7 trading system, and is an inducement for members to trade the first symbols launched on the INET trading system as there would be no transaction fees for doing so.

2. Statutory Basis

The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,[9] in general, and Section 6(b)(4) of the Act,[10] 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 reasonable and equitable to eliminate fees and rebates for INET Launch Symbols during the initial launch of the Exchange's re-platformed trading system. Eliminating fees and rebates in the INET Launch System during the launch will simplify the Exchange's billing and serve as an inducement for members to trade the first symbols migrated to the INET trading system. Because the Exchange is offering free executions in these symbols, volume executed in INET Launch Symbols on June 30, 2017 will not be counted towards any volume based tiers. Similar treatment was afforded to the first symbol launched on the Nasdaq GEMX, LLC INET trading system,[11] and also to other symbols traded on ISE INET during the launch.[12] For the same reason, activity in the following INET Launch Symbols that are Select Symbols will not be counted for purposes of determining Market Maker Plus tiers. The Exchange believes that these changes will be attractive to members that trade on the new INET trading system. The Exchange also believes that this proposed change is not unfairly discriminatory as it will apply to trades in INET Launch Symbols that are executed by all members. As noted above, the INET Launch Symbols were selected for this treatment as those products, together with the Exchange's proprietary FX Options and KANG, will be the first symbols traded on the INET trading system.

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. The proposed change is intended to ease members' transition to the re-platformed INET trading system and is not designed to have any significant competitive impact. 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.

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,[14] and Rule 19b-4(f)(2) [15] 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. Comments may be submitted by any of the following methods:

Electronic Comments

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-2017-66. 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-2017-66 and should be submitted on or before August 8, 2017.

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Start Printed Page 32895

For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.[16]

Jill M. Peterson,

Assistant Secretary.

End Signature End Preamble

Footnotes

3.  The INET Launch Symbols will begin trading on INET on June 30, 2017.

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4.  See Securities Exchange Act Release No. 80432 (April 11, 2017), 82 FR 18191 (April 17, 2017) (SR-ISE-2017-03).

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5.  See Securities Exchange Act Release No. 80999 (June 22, 2017) 82 FR 29354 (June 28, 2017) (SR-ISE-2017-59).

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6.  See SR-ISE-2017-63 (publication pending).

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7.  “Select Symbols” are options overlying all symbols listed on the Nasdaq ISE that are in the Penny Pilot Program.

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8.  A Market Maker Plus is a Market Maker who is on the National Best Bid or National Best Offer a specified percentage of the time for series trading between $0.03 and $3.00 (for options whose underlying stock's previous trading day's last sale price was less than or equal to $100) and between $0.10 and $3.00 (for options whose underlying stock's previous trading day's last sale price was greater than $100) in premium in each of the front two expiration months. The specified percentage is at least 80% but lower than 85% of the time for Tier 1, at least 85% but lower than 95% of the time for Tier 2, and at least 95% of the time for Tier 3. A Market Maker's single best and single worst quoting days each month based on the front two expiration months, on a per symbol basis, will be excluded in calculating whether a Market Maker qualifies for this rebate, if doing so will qualify a Market Maker for the rebate.

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11.  See Securities Exchange Act Release No. 80184 (March 9, 2017), 82 FR 13893 (March 15, 2017) (SR-ISEGemini-2017-09)

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12.  See supra notes 5 and 6.

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14.  15 U.S.C. 78s(b)(3)(A)(ii).

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[FR Doc. 2017-14981 Filed 7-17-17; 8:45 am]

BILLING CODE 8011-01-P