[Federal Register Volume 79, Number 5 (Wednesday, January 8, 2014)]
[Notices]
[Pages 1405-1407]
From the Federal Register Online via the Government Publishing 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 [email protected]. 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