
[Federal Register Volume 80, Number 141 (Thursday, July 23, 2015)]
[Notices]
[Pages 43807-43809]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-18031]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75482; File No. SR-ISE-2015-23]


Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change to Extend the Price Improvement Mechanism Pilot Program

July 17, 2015.
    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 July 16, 2015, 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 and II 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 Substance 
of the Proposed Rule Change

    The ISE proposes to extend two pilot programs related to its Price 
Improvement Mechanism (``PIM''). The text of the proposed rule change 
is available on the Exchange's Web site 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.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange currently has two pilot programs related to its PIM 
(collectively, the ``PIM Pilot Programs'' or ``Pilot Programs'').\3\ 
The current Pilot Period provided in paragraphs .03 and .05 of the 
Supplementary Material to Rule 723 is set to expire on July 17, 
2015.\4\ Paragraph .03 provides that there is no minimum size 
requirement for orders to be eligible for the Price Improvement 
Mechanism. Paragraph .05 concerns the termination of the exposure 
period by unrelated orders. In accordance with the Approval Order, the 
Exchange has continually submitted certain data in support of extending 
the current Pilot Programs. The Exchange proposes to extend these Pilot 
Programs in their present form, through July 18, 2016, to give the 
Exchange and the Commission additional time to evaluate the effects of 
these Pilot Programs before the Exchange requests permanent approval of 
the rules. To aid the Commission in its evaluation of the PIM 
Functionality, ISE represents that it will provide

[[Page 43808]]

certain additional data requested by the Commission regarding trading 
in the PIM for the six (6) month period from January 1, 2015 through 
June 30, 2015. The Exchange agrees to provide this data by January 18, 
2016 and to make the summary of the data provided to the Commission 
publicly available.
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    \3\ See Securities Exchange Act Release Nos. 50819 (December 8, 
2004), 69 FR 75093 (December 15, 2004) (SR-ISE-2003-06) (Approving 
the PIM pilot (the ``Approval Order'')); 52027 (July 13, 2005), 70 
FR 41804 (July 20, 2005) (SR-ISE-2005-30); 54146 (July 14, 2006), 71 
FR 41490 (July 21, 2006) (SR-ISE-2006-39); 56106 (July 19, 2007), 72 
FR 40914 (July 25, 2007) (SR-ISE-2007-62); 56156 (July 27, 2007), 72 
FR 43305 (August 3, 2007) (SR-ISE-2007-66); 58197 (July 18, 2008), 
73 FR 43810 (July 28, 2008) (SR-ISE-2008-60); 60333 (July 17, 2009), 
74 FR 36792 (July 24, 2009) (SR-ISE-2009-52); 62513 (July 16, 2010), 
75 FR 43221 (July 23, 2010) (SR-ISE-2010-75); 64931 (July 20, 2011), 
76 FR 44642 (July 26, 2011) (SR-ISE-2011-41); 67202 (June 14, 2012), 
77 FR 36589 (June 19, 2012) (SR-ISE-2012-54); 69853 (June 25, 2013), 
78 FR 39390 (July 1, 2013) (SR-ISE-2013-41); and 72467 (June 25, 
2014), 79 FR 37377 (July 1, 2014) (SR-ISE-2014-33).
    \4\ See Securities Exchange Act Release No. 34-72467 (June 25, 
2014), 79 FR 37377 (July 1, 2014) (SR-ISE-2014-33).
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2. Statutory Basis
    The basis under the Securities Exchange Act of 1934 (the ``Exchange 
Act'') for this proposed rule change is found in Section 6(b)(5), in 
that the proposed rule change is designed to promote just and equitable 
principles of trade, remove impediments to and perfect the mechanisms 
of a free and open market and a national market system and, in general, 
to protect investors and the public interest.
    The Exchange believes the Pilot Programs are consistent with the 
Exchange Act because they provide opportunity for price improvement for 
all orders executed in the Exchange's Price Improvement Mechanism. The 
proposed extension would allow the Pilot Programs to continue 
uninterrupted, thereby avoiding any potential investor confusion that 
could result from a temporary interruption to the pilot. Further, the 
Exchange believes that the data demonstrates that there is sufficient 
investor interest and demand to extend the Pilot Programs for an 
additional twelve months. The Exchange further believes it is 
appropriate to extend the Pilot Programs to provide the Exchange and 
Commission more data upon which to evaluate the rules. With this data, 
the Commission can evaluate whether the new data shows there is 
meaningful competition for all size orders within the PIM, whether 
there is significant price improvement for all orders executed through 
the PIM, and whether there is an active and liquid market functioning 
on the Exchange outside of the PIM.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Exchange Act. Specifically, the 
Exchange believes that, by extending the expiration of the Pilot 
Programs, the proposed rule change will allow for further analysis of 
the PIM. In doing so, the proposed rule change will also serve to 
promote regulatory clarity and consistency, thereby reducing burdens on 
the marketplace and facilitating investor protection.

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 written comments from members or other interested parties.

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) of the Act and Rule 19b-
4(f)(6) thereunder.\5\
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    \5\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written 
notice of its intent to file the proposed rule change, along with a 
brief description and the 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.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \6\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \7\ permits the 
Commission to designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has requested that the Commission waive the 30-day operative delay 
period because the Pilot Programs are set to expire on July 17, 2015. 
The Exchange noted that such waiver will allow the Pilot Programs to 
continue uninterrupted.
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    \6\ 17 CFR 240.19b-4(f)(6).
    \7\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest, as 
it will allow the Pilot Programs to continue uninterrupted, thereby 
avoiding any potential investor confusion that could result from a 
temporary interruption in the Pilot Programs. For this reason, the 
Commission designates the proposed rule change to be operative on July 
17, 2015.\8\
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    \8\ For purposes only of waiving the operative delay for this 
proposal, the Commission has 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 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 rule-comments@sec.gov. Please include 
File Number SR-ISE-2015-23 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-ISE-2015-23. 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 Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal

[[Page 43809]]

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-2015-23, and should be submitted on 
or before August 13, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-18031 Filed 7-22-15; 8:45 am]
BILLING CODE 8011-01-P


