[Federal Register Volume 83, Number 76 (Thursday, April 19, 2018)]
[Notices]
[Pages 17451-17454]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-08158]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-83051; File No. SR-ISE-2018-32]
Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Codify Within
Rule 718 the Data Feeds on ISE
April 13, 2018.
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 April 4, 2018, 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.
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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 a proposed rule change to codify within
Rule 718, which rule is currently reserved, the data feeds that are
currently offered on ISE.
The text of the proposed rule change is available on the Exchange's
website at http://ise.cchwallstreet.com/, at the principal office of
the Exchange, and at the Commission's Public Reference Room.
[[Page 17452]]
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 codify within Rule
718, which rule is currently reserved, the data feeds that are
currently offered on ISE and previously described in prior rule changes
as described in more detail below. The Exchange proposes to rename Rule
718 ``Data Feeds'' and list the various data feed offerings within that
rule.
The Exchange has previously filed a rule change which describes the
various data offerings.\3\ The data offerings contained in that rule
change included: Nasdaq ISE Real-time Depth of Market Raw Data Feed
(``Depth of Market Feed''), the Nasdaq ISE Order Feed (``Order Feed''),
the Nasdaq ISE Top Quote Feed (``Top Quote Feed''), the Nasdaq ISE
Trades Feed (``Trades Feed''), and the Nasdaq ISE Spread Feed (``Spread
Feed''). Each of the data offerings are described in more detail below.
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\3\ See Securities Exchange Act Release No. 81095 (July 7,
2017), 82 FR 32409 (July 13, 2017) (SR-ISE-2017-62) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To
Establish Ports and Gateways That Members Use To Connect to the
Exchange)(``Prior Filing'').
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Universal Changes
The Exchange notes it proposes various universal amendments to its
data feeds for consistency and clarity. References to ``instrument''
will be replaced by the more specific language ``options series.''
Where the Exchange previously referred to ``trading status'' those
words will be replaced with language which specifically explains the
information for status, which is, ``whether the option series is
available for trading on ISE and identifies if the series is available
for closing transactions only.'' The word ``customer'' will be replaced
with the defined term ``Priority Customer.'' \4\ References to the word
``cumulative,'' when referring to volume, will be replaced with more
specific language namely, ``daily trading,'' to refer to the volume.
These aforementioned amendments are made, where applicable, within the
data feeds described below in more detail. Finally, the Exchange is
adding language in Rule 718(a) to make clear that the data feeds
pertain to ISE trading information.
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\4\ The term ``Priority Customer'' means a person or entity that
(i) is not a broker or dealer in securities, and (ii) does not place
more than 390 orders in listed options per day on average during a
calendar month for its own beneficial account(s). See ISE Rule
100(a)(41A).
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Depth of Market Feed
In a Prior Filing the Exchange described the Depth Feed as
providing 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 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, 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.
In codifying the feed description, the Exchange proposes a few
amendments to the description in the Prior Filing in addition to the
universal changes mentioned above. For the Depth of Market Feed, the
Exchange is removing the words ``''Real-time'' and ``Raw'' because all
the feeds are real-time and contain raw data. Removing these words
conforms the language of all the feeds. The Exchange proposes to
replace ``Exchange'' with ``ISE'' for clarity. Also, the Exchange is
expanding the description of total quantity to ``total aggregate
quantity'' including Public Customer \5\ aggregate quantity and
Priority Customer aggregate quantity. The Exchange is amending a
description of the imbalances on opening/reopening to note the
imbalances are order and not participant imbalances. Finally a
typographical error is being amended in the last sentence of this data
feed to remove an extraneous ``of'' in the sentence.
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\5\ The term ``Public Customer'' means a person or entity that
is not a broker or dealer in securities. See Rule 100(a)(42).
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Order Feed
In a Prior Filing the Exchange described the Order Feed as
providing information on new orders resting on the book. In addition,
the feed also announces auctions. 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. The feed also provides participants of imbalances on opening/
reopening.
In codifying the feed description, the Exchange proposes a few
amendments to the description in the Prior Filing in addition to the
universal changes mentioned above. The Exchange is amending the order
feed to include the word ``all'' before auctions to make clear all
auction information is included. The Exchange is adding examples of the
information provided on new orders resting on the book, e.g. price,
quantity and market participant capacity. The words ``market
participant'' are intended to make clear which capacity is referred to
for the information. The Exchange is amending a description of the
imbalances on opening/reopening to note the imbalances are order and
not participant imbalances. Also, a typographical error is being
amended in the last sentence of this data feed to remove an extraneous
``of'' in the sentence.
Top Quote Feed
In a Prior Filing the Exchange described the Top Quote Feed as one
that calculates and disseminates its best bid and offer position, with
aggregated size (Total & Customer), based on displayable order and
quote interest in the options market system. The feed also provides
last trade information along with opening price, cumulative volume,
high and low prices for the day. 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 codifying the feed description, the Exchange proposes a few
amendments to the description in the Prior Filing in addition to the
universal changes mentioned above. The Exchange proposes to amend the
Top Quote Feed to make clear that aggregated size included total size,
Public Customer size in the aggregate and also Priority Customer size
in the aggregate. The Exchange is replacing the term ``options market
system'' with the defined term
[[Page 17453]]
``System.'' \6\ The Exchange also proposes to add a sentence, similar
to the Depth of Market Feed and Order Feed which provides ``The feed
also provides order imbalances on opening/reopening.'' This sentence
should have been included with this feed as well. The universal changes
described above apply as well.
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\6\ See Rule 100(a)(53).
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Trades Feed
In a Prior Filing the Exchange described the Trades Feed as
displaying last trade information along with opening price, cumulative
volume, high and low prices for the day. 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.
The Exchange is only amending the description of the Trades Feed as
described in the universal changes.
Spread Feed
In a Prior Filing the Exchange described the Spread Feed as a real-
time feed that consists of options quotes and orders for all Complex
Orders (i.e., spreads, buy-writes, delta neutral strategies, etc.)
aggregated at the top price level on both the bid and offer side of the
market as well as all aggregated quotes and orders for complex orders
at the top five price levels on both the bid and offer side of the
market. In addition, the Spread Feed provides real-time updates every
time a new complex limit order that is not immediately executable at
the BBO is placed on the ISE complex order book. The Spread Feed shows
aggregate bid/ask quote size for Customer and Professional Customer
option orders for ISE traded options.
In codifying the Trades Feed description, the Exchange proposes a
few amendments to the description in the Prior Filing in addition to
the universal changes mentioned above. The Exchange is also removing a
reference to ``real-time'' as not necessary. The Exchange is also
capitalizing the term ``Complex Order,'' which is a defined term.\7\
The Exchange is also amending the sentence which currently provides,
``Nasdaq ISE Spread is a real-time feed that consists of options quotes
and orders for all Complex Orders (i.e., spreads, buy-writes, delta
neutral strategies, etc.) aggregated at the top price level on both the
bid and offer side of the market as well as all aggregated quotes and
orders for complex orders at the top five price levels on both the bid
and offer side of the market.'' The Exchange proposes to provide,
``Nasdaq ISE Spread Feed (``Spread Feed'') is a feed that consists of
options quotes and orders for all Complex Orders (i.e., spreads, buy-
writes, delta neutral strategies, etc.) aggregated at the top five
price levels (BBO) on both the bid and offer side of the market as well
as last trades information.'' The Exchange believes that the proposed
sentence is clear with respect to the fact that the data takes into
account the top five price levels or ``BBO.'' The Exchange is adding
``last trades information'' to make clear that the execution
information is contained in this data feed as well. Finally, the
Exchange is making clear that the Spread Feed shows bid/ask quote size
for Public Customer and Priority Customer option orders for ISE traded
options. The universal changes described above apply as well.
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\7\ A complex order is any order involving the simultaneous
purchase and/or sale of two or more different options series in the
same underlying security, for the same account, in a ratio that is
equal to or greater than one-to-three (.333) and less than or equal
to three-to-one (3.00) and for the purpose of executing a particular
investment strategy. See ISE Rule 722(a)(1).
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The Exchange notes that market participants are charged for
subscriptions to these products.\8\ The Exchange believes that
codifying these data feeds within the Exchange's Rulebook will bring
greater transparency to its Rules as well as the data which is
available on the Exchange. The amendments are also intended to provide
greater clarity and transparency concerning the data offerings.
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\8\ See Schedule of Fees, Section VIII, Market Data.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Securities Exchange Act of 1934 (the
``Act''),\9\ in general, and furthers the objectives of Section 6(b)(5)
of the Act,\10\ in particular, in that it is designed to promote just
and equitable principles of trade, to remove impediments to and perfect
the mechanism for a free and open market and a national market system,
and, in general, to protect investors and the public interest. By
codifying the various data feed offerings, which have already been
filed for in another rule change,\11\ will bring greater transparency
to the Exchange's Rules. Also, the content of each data feed is
described within the Rule for ease of reference. The Exchange believes
that the proposed rule change is consistent with the protection of
investors and the public interest as it provides information relating
to the data available on the Exchange for the benefit of its Members
within its Rules and adds greater transparency to these offerings.
Finally, the amendments seeks to add greater clarity to the data
offerings and conform the text of the offerings.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
\11\ See note 3 above.
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B. Self-Regulatory Organization's Statement on Burden on Competition
In accordance with Section 6(b)(8) of the Act,\12\ the Exchange
does not believe that the proposed rule change will impose any burden
on intermarket or intra-market competition that is not necessary or
appropriate in furtherance of the purposes of the Act. The data feed
offerings are available to any market participant. The Exchange's
proposal seeks to codify the data offerings in a rule for ease of
reference and transparency within the Rulebook. The amendments seeks to
add greater clarity to the data offerings and conform the text of the
offerings.
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\12\ 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
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \13\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\14\
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\13\ 15 U.S.C. 78s(b)(3)(A)(iii).
\14\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change, along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \15\ normally
does not become operative prior to 30 days after the date of the
filing. However, Rule 19b-4(f)(6)(iii) \16\ permits the Commission to
designate a shorter time if such action is consistent with the
protection of investors and the public
[[Page 17454]]
interest. The Exchange has asked the Commission to waive the 30-day
operative delay so that the proposal may become operative immediately
upon filing. The Exchange states that waiving the operative delay will
allow it to immediately reflect the Exchange's data feed offerings
within its Rules and bring greater transparency to these data feed
offerings. The Commission believes that waiver of the 30-day operative
delay is consistent with the protection of investors and the public
interest. Therefore, the Commission hereby waives the operative delay
and designates the proposed rule change as operative upon filing.\17\
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\15\ 17 CFR 240.19b-4(f)(6).
\16\ 17 CFR 240.19b-4(f)(6)(iii).
\17\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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: (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
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-2018-32 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-ISE-2018-32. 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 website (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 website 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. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-ISE-2018-32 and should be submitted on
or before May 10, 2018.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-08158 Filed 4-18-18; 8:45 am]
BILLING CODE 8011-01-P