[Federal Register Volume 79, Number 15 (Thursday, January 23, 2014)]
[Notices]
[Pages 3911-3913]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-01246]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-71324; File No. SR-ISE-2014-01]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change To Amend the Schedule of Fees
January 16, 2014.
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 January 8, 2014, 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 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 the
Substance of the Proposed Rule Change
The ISE proposes to amend its Schedule of Fees to clarify that the
ISE's Ethernet, Gateway, and EAM session fees provide connectivity to
the Topaz Exchange, LLC in addition to the ISE. The text of 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 the
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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the proposed rule change is to amend the Schedule of
Fees to clarify that the ISE's Ethernet, Gateway, and Electronic Access
Member (``EAM'') session fees provide connectivity to the ISE's sister
exchange, the Topaz Exchange, LLC d/b/a ISE Gemini (``Topaz''), in
addition to the ISE. On December 16, 2013 Topaz filed a rule change
that established various non-transaction fees, including Ethernet,
Gateway, and Financial Information eXchange (``FIX'') session fees that
provide access to both Topaz and the ISE.\3\ On January 2, 2014 Topaz
filed another rule change to permit EAMs that connect to that exchange
via an Application Programming Interface (``API'') to also connect to
the ISE for a single fee.\4\ The ISE now proposes to add similar
clarifying text to its fee schedule to reflect the fact that these
connectivity options provide connectivity to both the ISE and Topaz for
a single fee.
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\3\ See Exchange Act Release No. 71149 (December 19, 2013), 78
FR 78447 (December 26, 2013) (SR-Topaz-2013-16).
\4\ See SR-Topaz-2014-01 (citation pending publication by the
Commission).
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[[Page 3912]]
The Exchange charges an Ethernet fee for its four different
Ethernet connection options, which is $500 per month for a 1 Gigabit
(``Gb'') connection, $4,000 per month for a 10 Gb connection, $7,000
per month for a 10 Gb low latency connection, and $12,500 per month for
a 40 Gb low latency connection. The Exchange also charges members a
monthly gateway fee of $250 per gateway for a shared gateway or $2,000
per gateway pair for members that elect to use their own dedicated
gateways as an alternative to using shared gateways. Finally, the
Exchange charges EAMs that connect to the Exchange via API a session
fee of $250 per month each for the first five sessions and $100 per
month each additional session, and charges EAMs that connect to the
Exchange via FIX a session fee of $250 per month each for the first two
sessions and $50 per month for each additional session.\5\ The ISE now
proposes to clarify that each of these connectivity options provides
connectivity to Topaz in addition to the ISE. Members and non-members
that connect to both the ISE and Topaz through any of these
connectivity options will not be required to pay a separate fee to
Topaz for such connectivity. Market participants will pay the same fees
regardless of whether they choose to connect to both exchanges or
solely to the ISE.
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\5\ The Exchange notes that Market Maker API session fees are
separate for ISE and Topaz as Topaz has opted for a different
pricing structure for its Market Maker API session fees. See 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,\6\ in general, and Section
6(b)(4) of the Act,\7\ 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, equitable, and not unfairly
discriminatory to clarify that its fees provide connectivity to both
Topaz and the ISE. The Exchange notes that the fee schedule of its
sister exchange, Topaz, already reflects that its fees provide access
to both exchanges. The ISE now proposes to adopt similar language.
Providing access to both the ISE and Topaz for a single fee will keep
overall fees low for market participants that establish connectivity to
both exchanges. With respect to session fees, the Exchange notes that
only EAM sessions (both FIX and API) provide connectivity to Topaz in
addition to the ISE. The Exchange does not believe that this is
unfairly discriminatory as Topaz has opted for a different pricing
structure for its Market Maker API session fees.\8\
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\6\ 15 U.S.C. 78f.
\7\ 15 U.S.C. 78f(b)(4).
\8\ See supra note 5.
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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 rule change is pro-competitive
as it clarifies that members that connect to both Topaz and the ISE
will be able to do so for a single fee. 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
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\ 5 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 [email protected]. Please include
File No. SR-ISE-2014-01 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 No. SR-ISE-2014-01. 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 such filing also will be available for inspection
and copying at the principal office of the 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 No. SR-ISE-2014-01, and should be submitted on or
before February 13, 2014.
[[Page 3913]]
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. 2014-01246 Filed 1-22-14; 8:45 am]
BILLING CODE 8011-01-P