[Federal Register Volume 82, Number 50 (Thursday, March 16, 2017)]
[Notices]
[Pages 14066-14068]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-05220]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-80213; File No. SR-ISEGemini-2017-10]
Self-Regulatory Organizations; ISE Gemini, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Adopt Fees for
New Ports
March 10, 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 February 27, 2017, ISE Gemini, LLC (``ISE Gemini'' 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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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 adopt fees
for the new ports that members will use to connect to the Exchange
following the migration of the Exchange's trading system to the Nasdaq
INET architecture.
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 adopt fees for the new ports that members will use to connect
to the Exchange following the migration of the Exchange's trading
system to the Nasdaq INET architecture.\3\ In particular, the Exchange
proposes to adopt fees for the following connectivity options that will
become available in connection with the re-platform of the Exchange's
trading system: Specialized Quote Feed (``SQF''),\4\ SQF Purge,\5\ Ouch
to Trade Options (``OTTO''),\6\ Clearing Trade Interface (``CTI''),\7\
Financial Information eXchange (``FIX''),\8\ FIX Drop,\9\ Disaster
Recovery,\10\ and ITCH-to-Trade Options (``ITTO'').\11\
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\3\ See Securities Exchange Act Release No. 80011 [sic]
(February 10, 2017), 82 FR 10927 (February 16, 2017) (SR-ISEGemini-
2016-17 [sic]).
\4\ SQF is an interface that allows market makers to connect and
send quotes, sweeps and auction responses into ISE Gemini. Data
includes the following: (1) Options Auction Notifications (e.g.,
opening imbalance, Flash, PIM, Solicitation and Facilitation or
other information); (2) Options Symbol Directory Messages; (3)
System Event Messages (e.g., start of messages, start of system
hours, start of quoting, start of opening); (4) Option Trading
Action Messages (e.g., halts, resumes); (5) Execution Messages (6)
Quote Messages (quote/sweep messages, risk protection triggers or
purge notifications).
\5\ SQF Purge is a specific port for the SQF interface that only
receives and notifies of purge requests from the market maker.
\6\ OTTO is an interface that allows market participants to
connect and send orders, auction orders and auction responses into
ISE Gemini. Data includes the following: (1) Options Auction
Notifications (e.g., Flash, PIM, Solicitation and Facilitation or
other information); (2) Options Symbol Directory Messages; (3)
System Event Messages (e.g., start of messages, start of system
hours, start of quoting, start of opening); (5) Option Trading
Action Messages (e.g., halts, resumes); (6) Execution Messages (7)
Order Messages (order messages, risk protection triggers or purge
notifications).
\7\ CTI is a real-time clearing trade update is a message that
is sent to a member after an execution has occurred and contains
trade details. The message containing the trade details is also
simultaneously sent to The Options Clearing Corporation. The
information includes, among other things, the following: (i) The
Clearing Member Trade Agreement or ``CMTA'' or The Options Clearing
Corporation or ``OCC'' number; (ii) Exchange badge or house number;
(iii) the Exchange internal firm identifier; and (iv) an indicator
which will distinguish electronic and non-electronically delivered
orders; (v) liquidity indicators and transaction type for billing
purposes; (vi) capacity.
\8\ FIX is an interface that allows market participants to
connect and send orders and auction orders into ISE Gemini. Data
includes the following: (1) Options Symbol Directory Messages; (2)
System Event Messages (e.g., start of messages, start of system
hours, start of quoting, start of opening); (3) Option Trading
Action Messages (e.g., halts, resumes); (4) Execution Messages (5)
Order Messages (order messages, risk protection triggers or purge
notifications).
\9\ FIX Drop is a real-time order and execution update is a
message that is sent to a member after an order been received/
modified or an execution has occurred and contains trade details.
The information includes, among other things, the following: (1)
Executions (2) cancellations (3) modifications to an existing order
(4) busts or post-trade corrections.
\10\ Disaster Recovery ports provide connectivity to the
exchange's disaster recovery data center in Chicago to be utilized
in the event the exchange has to fail over during the trading day.
DR Ports are available for SQF, SQF Purge, CTI, OTTO, FIX and FIX
Drop.
\11\ ITTO ports provide connectivity to the ISE Gemini
Real[hyphen]time Depth of Market Raw Data Feed (``Depth Feed''). The
Depth Feed, provides aggregate quotes and orders at the top five
price levels on the Exchange, and provides subscribers with a
consolidated view of tradable prices beyond the BBO, showing
additional liquidity and enhancing transparency for ISE Gemini
traded options. The data provided for each instrument includes the
symbols (series and underlying security), put or call indicator,
expiration date, the strike price of the series, and trading status.
In addition, subscribers are provided with total quantity, customer
quantity (if present), price, and side (i.e., bid/ask). This
information is provided for each of the five indicated price levels
on the Depth Feed. The feed also provides participants of imbalances
on opening/reopening.
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[[Page 14067]]
Currently, the Exchange charges Market Makers, i.e., Primary Market
Makers (``PMMs'') and Competitive Market Makers (``CMM''), an API
session fee of $100 per month per API for sessions used for quoting,
order entry and listening. In addition, the Exchange charges Electronic
Access Members (``EAMs'') that connect to the Exchange via API a
session fee of $100 per session for month for access to ISE Gemini
only, and $250 per month each for the first five sessions and $100 per
month each additional session for connectivity to both ISE Gemini and
the Exchange's affiliate, the International Securities Exchange, LLC
(``ISE''). Finally, the Exchange charges EAMs that connect to the
Exchange via FIX a session fee of $50 per session per month for access
to ISE Gemini only, and $250 per month each for the first two sessions
and $50 per month for each additional session for connectivity to both
ISE Gemini and ISE.
With the re-platform of the Exchange's trading system, the Exchange
will now be offering a new set of ports for connecting to ISE Gemini--
i.e., SQF, SQF Purge, OTTO, and CTI, FIX, FIX Drop, Disaster Recovery,
and ITTO. These connectivity options are the same as connectivity
options currently used to connect to the Exchange's affiliates,
including Nasdaq Phlx (``Phlx''), Nasdaq Options Market (``NOM''), and
Nasdaq BX (``BX'').\12\ The Exchange now proposes to adopt fees for
these ports.\13\ The proposed fees for these ports will be $0 per port
per month. The Exchange believes that it is appropriate to provide
these ports without charge during this initial migration period to
avoid double charging members that are connected to both the current T7
trading system and the new INET trading system. In addition, adding
these port fees to the Schedule of Fees now will alert members to the
fact that they will not be charged for access through these new
connectivity options at this time. The current API/FIX session fees
will remain in place as members are still using these connectivity
options to connect to the Exchange during the migration of the
Exchange's trading system to INET.\14\
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\12\ See Phlx Pricing Schedule, VII. Other Member Fees, B. Port
Fees; NOM Rules, Chapter XV Options Pricing, Sec. 3 NOM--Ports and
other Services; BX Rules, Chapter XV Options Pricing, Sec. 3 BX--
Ports and other Services.
\13\ Fees apply only to connectivity to the ISE Gemini INET
trading system.
\14\ The Exchange will eliminate current API/FIX session fees at
a later date when those connectivity options are no longer available
to members.
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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,\15\ in general, and
Section 6(b)(4) of the Act,\16\ 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.
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\15\ 15 U.S.C. 78f.
\16\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that it is reasonable and equitable to adopt
fees for the various ports used to connect to the Exchange's new INET
trading system. As explained above, the ports that will be used to
connect to the INET trading system are the same as ports currently used
by the Exchange's affiliates. The Exchange has determined to offer
these ports free of cost for the time being in order to aid in the
migration of the Exchange's trading system to INET technology. Adding
these port fees to the Schedule of Fees will clarify to members that
they will not have to pay for access to both T7 and INET trading
systems. The Exchange also does not believe that the proposed fee
change is unfairly discriminatory as each of the proposed port fees are
initially proposed to be free of charge for all members.
B. Self-Regulatory Organization's Statement on Burden on Competition
In accordance with Section 6(b)(8) of the Act,\17\ 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
port fees will be offered initially free of cost to aid in the
migration of the Exchange's trading system to Nasdaq INET technology.
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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\17\ 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
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.\18\ 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.
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\18\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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-ISEGemini-2017-10 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-ISEGemini-2017-10. 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
[[Page 14068]]
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-ISEGemini-2017-10 and should
be submitted on or before April 6, 2017.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-05220 Filed 3-15-17; 8:45 am]
BILLING CODE 8011-01-P