Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Certain Expiration Timeframes in ISE Rule 2009, 7960-7963 [2019-03883]

Download as PDF 7960 Federal Register / Vol. 84, No. 43 / Tuesday, March 5, 2019 / Notices Exchange does not believe the proposal will impose any burden on intermarket competition as market participants are welcome to become Phlx Members and trade at Phlx if they determine that this proposed rule change has made Phlx more attractive or favorable. Finally, all options exchanges are free to compete by listing and trading their own broadbased index options with similar expirations. This proposal will permit Phlx to compete with Cboe with respect to listing expirations on index options. 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) of the Act 8 and Rule 19b– 4(f)(6) thereunder.9 A proposed rule change filed under Rule 19b–4(f)(6) of the Act 10 normally does not become operative for 30 days after the date of filing. However, Rule 19b–4(f)(6)(iii) 11 permits the Commission to designate a shorter time if the 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 so that the proposal may become operative immediately upon filing. The Exchange represents that the proposed rule change will add clarity to Rule 1101A and allow the Exchange to list expirations on index options and in its Nonstandard Program in a manner similar to another exchange. Because the proposed rule change does not present any new or novel issues, the Commission believes that waiving the 30-day operative delay period is consistent with the protection of investors and the public interest. 8 15 U.S.C. 78s(b)(3)(A). 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. 10 17 CFR 240.19b–4(f)(6). 11 17 CFR 240.19b–4(f)(6)(iii). amozie on DSK9F9SC42PROD with NOTICES 9 As VerDate Sep<11>2014 17:54 Mar 04, 2019 Jkt 247001 Accordingly, the Commission designates the proposed rule change to be operative upon filing.12 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. 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–Phlx–2019–02, and should be submitted on or before March 26, 2019. 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: For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Eduardo A. Aleman, Deputy Secretary. Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– Phlx–2019–02 on the subject line. SECURITIES AND EXCHANGE COMMISSION 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–Phlx–2019–02. 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 (https://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 12 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). PO 00000 Frm 00093 Fmt 4703 Sfmt 4703 [FR Doc. 2019–03893 Filed 3–4–19; 8:45 am] BILLING CODE 8011–01–P [Release No. 34–85211; File No. SR–ISE– 2019–02] Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Certain Expiration Timeframes in ISE Rule 2009 February 27, 2019. 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 21, 2019, Nasdaq ISE, LLC (‘‘ISE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘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. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend ISE Rule 2009, ‘‘Terms of Index Options Contracts,’’ to amend certain expiration timeframes and make a technical correction to this rule. The text of the proposed rule change is available on the Exchange’s website at https://ise.cchwallstreet.com/, at the principal office of the Exchange, and at the Commission’s Public Reference Room. 13 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\05MRN1.SGM 05MRN1 Federal Register / Vol. 84, No. 43 / Tuesday, March 5, 2019 / Notices 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 Exchange proposes to amend Rule 2009, ‘‘Terms of Index Options Contracts,’’ to amend expirations for ISE index options. The Exchange also proposes to amend expirations related to the listing and trading, on a pilot basis, of p.m.-settled options on broadbased indexes with nonstandard expiration dates (‘‘Nonstandard Program’’). Finally, the Exchange proposes a technical amendment within ISE Rule 2009. Each rule change will be discussed below. amozie on DSK9F9SC42PROD with NOTICES Expirations of Index Options Rule 2009(a)(3) currently provides, Expiration Months. Index options contracts, including option contracts on a Foreign Currency Index, may expire at three (3)-month intervals or in consecutive months. The Exchange may list up to six (6) expiration months at any one time, but will not list index options that expire more than twelve (12) months out. Notwithstanding the preceding restriction, the Exchange may list up to seven expiration months at any one time for any broad-based security index option contracts (e.g. NDX, RUT) upon which any exchange calculates a constant three-month volatility index. The Exchange proposes to re-title this section ‘‘Expiration Months and Weeks’’ and remove the following rule text, ‘‘. . . including option contracts on a Foreign Currency Index . . .’’ The Exchange currently lists no foreign currency indexes. Further, the Exchange proposes to modify its expiration timeframes, similar to Cboe Exchange, Inc. (‘‘Cboe’’) Rule 24.9(a)(2), in three ways.3 First, the Exchange proposes to 3 Cboe Rule 24.9(a)(2) provides, ‘‘Expiration Months and Weeks. Index option contracts may VerDate Sep<11>2014 17:54 Mar 04, 2019 Jkt 247001 simply reword the provision which refers to 6 standard monthly expirations from, ‘‘The Exchange may list up to six (6) expiration months at any one time, but will not list index options that expire more than twelve (12) months out’’ to ‘‘The Exchange may list: (i) Up to six (6) standard monthly expirations at any one time in a class, but will not list index options that expire more than twelve (12) months out.’’ The meaning of the sentence is not being altered, rather the Exchange is simply rewording the sentence to mirror Cboe’s rule text. Second, the Exchange proposes to add additional provisions for listing index options. The Exchange proposes to enable index options to be listed up to 12 standard monthly expirations at any one time for any class that the Exchange (as the Reporting Authority) uses to calculate a volatility index; and up to 12 standard (monthly) expirations in NDX options similar to Cboe Rule 24.9(a)(2). Third, the Exchange proposes to remove the final sentence of Rule 2009(a)(3), ‘‘Notwithstanding the preceding restriction, the Exchange may list up to seven expiration months at any one time for any broad-based security index option contracts (e.g. NDX, RUT) upon which any exchange calculates a constant three-month volatility index.’’ The Exchange notes that the proposed new rule text would govern the listing of all index options and the new proposed text regarding 12 standard (monthly) expirations will govern the listing of NDX options, similar to Cboe’s VIX product. Nonstandard Expirations Pilot Program The Exchange proposes to amend Rule 2009 at Supplementary Material .07(a) to modify the maximum number of expirations that may be listed for each Weekly expiration in the expire at three-month intervals, in consecutive months or in consecutive weeks (as specified by class below). The Exchange may: • List up to six standard monthly expirations at any one time in a class, but will not list index options that expire more than 12 months out; • list up to 12 standard monthly expirations at any one time for any class that the Exchange (as the Reporting Authority) uses to calculate a volatility index and for CBOE S&P 500 a.m./p.m. Basis, EAFE, EM, FTSE Emerging, FTSE Developed, FTSE 100, China 50, and S&P Select Sector Index (SIXM, SIXE, SIXT, SIXV, SIXU, SIXR, SIXI, SIXY, SIXB, and SIXRE, and SIXC) options; • list up to 12 consecutive weekly expirations in VXST options; and • list up to six weekly expirations and up to 12 standard (monthly) expirations in VIX options. The six weekly expirations shall be for the nearest weekly expirations from the actual listing date and weekly expirations may not expire in the same week in which standard (monthly) VIX options expire. Standard (monthly) expirations in VIX options are not counted as part of the maximum six weekly expirations permitted for VIX options.’’ PO 00000 Frm 00094 Fmt 4703 Sfmt 4703 7961 Nonstandard Program. Today, ISE Rule 2009 at Supplementary Material .07(a) provides, ‘‘The maximum number of expirations that may be listed for each Weekly Expiration (i.e., a Monday expiration, Wednesday expiration, or Friday expiration, as applicable) in a given class is the same as the maximum number of expirations permitted for standard options on the same broadbased index.’’ The Exchange proposes to instead provide, ‘‘The maximum number of expirations that may be listed for each Weekly Expiration (i.e., a Monday expiration, Wednesday expiration, or Friday expiration, as applicable) in a given class is the maximum number of expirations permitted for standard index options in Rule 2009(a)(3).’’ This provision would be modified to reference the proposed new rule text proposed within Rule 2009(a)(3). The Exchange notes that Cboe Rule 24.9(e)(1) references Cboe Rule 24.9(a)(2) for the maximum number of expirations for weekly expirations in the nonstandard expirations pilot program. This proposed amendment to ISE’s Nonstandard Program would amend the maximum expirations so they would be similar to expirations on Cboe. Technical Amendment The Exchange proposes to amend a sentence within Rule 2009 at Supplementary Material .07(a) which currently provides, ‘‘Weekly Expirations that are first listed in a given class may expire up to four weeks from the actual listing date.’’ The Exchange proposes to amend this sentence to replace the word ‘‘first’’ with ‘‘initially.’’ The Exchange is not proposing to amend the meaning of this sentence, rather the Exchange proposes to make clear that the word ‘‘initially’’ applies to the four week expiration period for listing initial weeklies in the Nonstandard Program. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,4 in general, and furthers the objectives of Section 6(b)(5) of the Act,5 in particular, in that it is designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general to protect investors and the public interest, by expanding the permissible expirations periods for index options and the Nonstandard Program to permit the listing of additional expirations. This 4 15 5 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). E:\FR\FM\05MRN1.SGM 05MRN1 7962 Federal Register / Vol. 84, No. 43 / Tuesday, March 5, 2019 / Notices proposal will conform ISE’s ability to list index options expirations similar to Cboe. Expirations of Index Options Today, the Exchange may only list up to six standard monthly expirations at any one time in a class, but will not list index options that expire more than twelve months out and up to seven expiration months at any one time for any broad-based security index option contracts. With this proposal the Exchange may still list up to six standard monthly expirations at any one time in a class but may also list up to twelve standard monthly expirations at any one time for any class that the Exchange (as the Reporting Authority) uses to calculate a volatility index; and up to twelve standard (monthly) expirations in NDX options. This expanded ability will enable the Exchange to offer Members additional expirations on index options and compete more effectively with other markets to offer additional venues to trade index options. Further, this proposal will permit the Exchange to list similar index options as are listed by Cboe today, including in the Nonstandard Program. amozie on DSK9F9SC42PROD with NOTICES Nonstandard Expirations Pilot Program The Exchange’s proposal to amend Rule 2009 at Supplementary Material .07(a) to modify the maximum number of expirations that may be listed for each Weekly expiration in the Nonstandard Program to the proposed new expiration timeframes is consistent with the Act because today those timeframes refer to the timeframes for standard listed options. Providing for the maximum numbers of expirations permitted under the Nonstandard Program within the standard index options rule will clarify the timeframes and eliminate any potential ambiguity about the maximum numbers of expirations permitted under the Nonstandard Program. Additionally, this amendment will align the Exchange’s Nonstandard Program to Cboe’s nonstandard program. Technical Amendment The Exchange’s proposal amend [sic] a sentence within Rule 2009 at Supplementary Material .07(a) by replacing the word ‘‘first’’ with ‘‘initially’’ is consistent with the Act because it will make clear the meaning of the term and the meaning. The Exchange is not proposing to amend the meaning of this sentence, rather the Exchange proposes to make clear that the word ‘‘initially’’ applies to the four week expiration period for listing initial VerDate Sep<11>2014 17:54 Mar 04, 2019 Jkt 247001 weeklies in the Nonstandard Program. Also deleting a reference to foreign currency indexes will clarify Rule 2009(a)(3). 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 not necessary or appropriate in furtherance of the purposes of the Act. Specifically, the Exchange does not believe the proposal will impose any burden on intramarket competition as all market participants will be treated in the same manner with respect to expirations of index options. Additionally, the Exchange does not believe the proposal will impose any burden on intermarket competition as market participants are welcome to become ISE Members and trade at ISE if they determine that this proposed rule change has made ISE more attractive or favorable. Finally, all options exchanges are free to compete by listing and trading their own broadbased index options with similar expirations. This proposal will permit ISE to compete with Cboe with respect to listing expirations on index options. 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) of the Act 6 and Rule 19b– 4(f)(6) thereunder.7 A proposed rule change filed under Rule 19b–4(f)(6) of the Act 8 normally does not become operative for 30 days after the date of filing. However, Rule 19b–4(f)(6)(iii) 9 permits the Commission to designate a shorter time 6 15 U.S.C. 78s(b)(3)(A). 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. 8 17 CFR 240.19b–4(f)(6). 9 17 CFR 240.19b–4(f)(6)(iii). 7 As PO 00000 Frm 00095 Fmt 4703 Sfmt 4703 if the 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 so that the proposal may become operative immediately upon filing. The Exchange represents that the proposed rule change will add clarity to Rule 2009 and allow the Exchange to list expirations on index options and in its Nonstandard Program in a manner similar to another exchange. Because the proposed rule change does not present any new or novel issues, the Commission believes that waiving the 30-day operative delay period is consistent with the protection of investors and the public interest. Accordingly, the Commission designates the proposed rule change to be operative upon filing.10 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. 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 (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– ISE–2019–02 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–2019–02. 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 (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent 10 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). E:\FR\FM\05MRN1.SGM 05MRN1 Federal Register / Vol. 84, No. 43 / Tuesday, March 5, 2019 / Notices 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–2019–02, and should be submitted on or before March 26, 2019. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.11 Eduardo A. Aleman, Deputy Secretary. [FR Doc. 2019–03883 Filed 3–4–19; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–85207; File No. SR– EMERALD–2019–09] Self-Regulatory Organizations; MIAX Emerald, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Establish MIAX Emerald Top of Market (‘‘ToM’’) Data Feed, MIAX Emerald Complex Top of Market (‘‘cToM’’) Data Feed, MIAX Emerald Administrative Information Subscriber (‘‘AIS’’) Data Feed, and MIAX Emerald Order Feed (‘‘MOR’’) amozie on DSK9F9SC42PROD with NOTICES February 27, 2019. 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 26, 2019, MIAX Emerald, LLC (‘‘MIAX Emerald’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) a proposed rule change as described in Items I and II below, 11 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 17:54 Mar 04, 2019 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange is filing a proposal to establish certain market data products. The text of the proposed rule change is available on the Exchange’s website at https://www.miaxoptions.com/rulefilings/emerald, at MIAX Emerald’s principal office, 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 Exchange proposes to establish the MIAX Emerald Top of Market (‘‘ToM’’) data feed, MIAX Emerald Complex Top of Market (‘‘cToM’’) data feed, MIAX Emerald Administrative Information Subscriber (‘‘AIS’’) data feed, and MIAX Emerald Order Feed (‘‘MOR’’). ToM provides market participants with a direct data feed that includes the Exchange’s best bid and offer, with aggregate size, and last sale information, based on order and quoting interest on the Exchange. The ToM data feed includes data that is identical to the data sent to the processor for the Options Price Reporting Authority (‘‘OPRA’’). The ToM and OPRA data leave the MIAX Emerald System 3 at the same time, as required under Section 5.2(c)(iii)(B) of the Limited Liability Company Agreement of the Options Price Reporting Authority LLC (the ‘‘OPRA Plan’’), which prohibits the dissemination of proprietary 3 The term ‘‘System’’ means the automated trading system used by the Exchange for the trading of securities. See Exchange Rule 100. 1 15 VerDate Sep<11>2014 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. Jkt 247001 PO 00000 Frm 00096 Fmt 4703 Sfmt 4703 7963 information on any more timely basis than the same information is furnished to the OPRA system for inclusion in OPRA’s consolidated dissemination of options information. ToM will also contain a feature that provides the number of Priority Customer 4 contracts that are included in the size associated with the Exchange’s best bid and offer. cToM will provide subscribers with the same information as the ToM market data product as it relates to the Strategy Book, i.e., the Exchange’s best bid and offer for a complex strategy, with aggregate size, based on displayable order and quoting interest in the complex strategy on the Exchange. cToM will also provide subscribers with the identification of the complex strategies currently trading on MIAX Emerald; complex strategy last sale information; and the status of securities underlying the complex strategy (e.g., halted, open, or resumed). cToM is distinct from ToM, and anyone wishing to receive cToM data must subscribe to cToM regardless of whether they are a current ToM subscriber. ToM subscribers are not required to subscribe to cToM, and cToM subscribers are not required to subscribe to ToM. AIS provides market participants with a direct data feed that allows subscribers to receive real-time updates of products traded on MIAX Emerald, trading status for MIAX Emerald and products traded on MIAX Emerald, and liquidity seeking event notifications. The AIS market data feed includes opening imbalance condition information, opening routing information, expanded quote range information, post-halt notifications, and liquidity refresh condition information. AIS real-time messages are disseminated over multicast to achieve a fair delivery mechanism. AIS notifications provide current electronic system status allowing subscribers to take necessary actions immediately. MOR provides market participants with a direct data feed that allows subscribers to receive real-time updates of options orders, products traded on MIAX Emerald, MIAX Emerald Options System status, and MIAX Emerald Options Underlying trading status. Subscribers to the data feed will get a list of all options symbols and strategies that will be traded and sourced on that feed at the start of every session. The proposed data products provide valuable information that can help subscribers make informed investment 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 Exchange Rule 100. E:\FR\FM\05MRN1.SGM 05MRN1

Agencies

[Federal Register Volume 84, Number 43 (Tuesday, March 5, 2019)]
[Notices]
[Pages 7960-7963]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-03883]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85211; File No. SR-ISE-2019-02]


Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change To Amend Certain 
Expiration Timeframes in ISE Rule 2009

February 27, 2019.
    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 21, 2019, Nasdaq ISE, LLC (``ISE'' or ``Exchange'') filed 
with the Securities and Exchange Commission (``SEC'' or ``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.
---------------------------------------------------------------------------

    \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 ISE Rule 2009, ``Terms of Index 
Options Contracts,'' to amend certain expiration timeframes and make a 
technical correction to this rule.
    The text of the proposed rule change is available on the Exchange's 
website at https://ise.cchwallstreet.com/, at the principal office of 
the Exchange, and at the Commission's Public Reference Room.

[[Page 7961]]

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 Exchange proposes to amend Rule 2009, ``Terms of Index Options 
Contracts,'' to amend expirations for ISE index options. The Exchange 
also proposes to amend expirations related to the listing and trading, 
on a pilot basis, of p.m.-settled options on broad-based indexes with 
nonstandard expiration dates (``Nonstandard Program''). Finally, the 
Exchange proposes a technical amendment within ISE Rule 2009. Each rule 
change will be discussed below.
Expirations of Index Options
    Rule 2009(a)(3) currently provides,
    Expiration Months. Index options contracts, including option 
contracts on a Foreign Currency Index, may expire at three (3)-month 
intervals or in consecutive months. The Exchange may list up to six (6) 
expiration months at any one time, but will not list index options that 
expire more than twelve (12) months out. Notwithstanding the preceding 
restriction, the Exchange may list up to seven expiration months at any 
one time for any broad-based security index option contracts (e.g. NDX, 
RUT) upon which any exchange calculates a constant three-month 
volatility index.
    The Exchange proposes to re-title this section ``Expiration Months 
and Weeks'' and remove the following rule text, ``. . . including 
option contracts on a Foreign Currency Index . . .'' The Exchange 
currently lists no foreign currency indexes. Further, the Exchange 
proposes to modify its expiration timeframes, similar to Cboe Exchange, 
Inc. (``Cboe'') Rule 24.9(a)(2), in three ways.\3\ First, the Exchange 
proposes to simply reword the provision which refers to 6 standard 
monthly expirations from, ``The Exchange may list up to six (6) 
expiration months at any one time, but will not list index options that 
expire more than twelve (12) months out'' to ``The Exchange may list: 
(i) Up to six (6) standard monthly expirations at any one time in a 
class, but will not list index options that expire more than twelve 
(12) months out.'' The meaning of the sentence is not being altered, 
rather the Exchange is simply rewording the sentence to mirror Cboe's 
rule text. Second, the Exchange proposes to add additional provisions 
for listing index options. The Exchange proposes to enable index 
options to be listed up to 12 standard monthly expirations at any one 
time for any class that the Exchange (as the Reporting Authority) uses 
to calculate a volatility index; and up to 12 standard (monthly) 
expirations in NDX options similar to Cboe Rule 24.9(a)(2). Third, the 
Exchange proposes to remove the final sentence of Rule 2009(a)(3), 
``Notwithstanding the preceding restriction, the Exchange may list up 
to seven expiration months at any one time for any broad-based security 
index option contracts (e.g. NDX, RUT) upon which any exchange 
calculates a constant three-month volatility index.'' The Exchange 
notes that the proposed new rule text would govern the listing of all 
index options and the new proposed text regarding 12 standard (monthly) 
expirations will govern the listing of NDX options, similar to Cboe's 
VIX product.
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    \3\ Cboe Rule 24.9(a)(2) provides, ``Expiration Months and 
Weeks. Index option contracts may expire at three-month intervals, 
in consecutive months or in consecutive weeks (as specified by class 
below). The Exchange may:
     List up to six standard monthly expirations at any one 
time in a class, but will not list index options that expire more 
than 12 months out;
     list up to 12 standard monthly expirations at any one 
time for any class that the Exchange (as the Reporting Authority) 
uses to calculate a volatility index and for CBOE S&P 500 a.m./p.m. 
Basis, EAFE, EM, FTSE Emerging, FTSE Developed, FTSE 100, China 50, 
and S&P Select Sector Index (SIXM, SIXE, SIXT, SIXV, SIXU, SIXR, 
SIXI, SIXY, SIXB, and SIXRE, and SIXC) options;
     list up to 12 consecutive weekly expirations in VXST 
options; and
     list up to six weekly expirations and up to 12 standard 
(monthly) expirations in VIX options. The six weekly expirations 
shall be for the nearest weekly expirations from the actual listing 
date and weekly expirations may not expire in the same week in which 
standard (monthly) VIX options expire. Standard (monthly) 
expirations in VIX options are not counted as part of the maximum 
six weekly expirations permitted for VIX options.''
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Nonstandard Expirations Pilot Program
    The Exchange proposes to amend Rule 2009 at Supplementary Material 
.07(a) to modify the maximum number of expirations that may be listed 
for each Weekly expiration in the Nonstandard Program. Today, ISE Rule 
2009 at Supplementary Material .07(a) provides, ``The maximum number of 
expirations that may be listed for each Weekly Expiration (i.e., a 
Monday expiration, Wednesday expiration, or Friday expiration, as 
applicable) in a given class is the same as the maximum number of 
expirations permitted for standard options on the same broad-based 
index.'' The Exchange proposes to instead provide, ``The maximum number 
of expirations that may be listed for each Weekly Expiration (i.e., a 
Monday expiration, Wednesday expiration, or Friday expiration, as 
applicable) in a given class is the maximum number of expirations 
permitted for standard index options in Rule 2009(a)(3).'' This 
provision would be modified to reference the proposed new rule text 
proposed within Rule 2009(a)(3).
    The Exchange notes that Cboe Rule 24.9(e)(1) references Cboe Rule 
24.9(a)(2) for the maximum number of expirations for weekly expirations 
in the nonstandard expirations pilot program. This proposed amendment 
to ISE's Nonstandard Program would amend the maximum expirations so 
they would be similar to expirations on Cboe.
Technical Amendment
    The Exchange proposes to amend a sentence within Rule 2009 at 
Supplementary Material .07(a) which currently provides, ``Weekly 
Expirations that are first listed in a given class may expire up to 
four weeks from the actual listing date.'' The Exchange proposes to 
amend this sentence to replace the word ``first'' with ``initially.'' 
The Exchange is not proposing to amend the meaning of this sentence, 
rather the Exchange proposes to make clear that the word ``initially'' 
applies to the four week expiration period for listing initial weeklies 
in the Nonstandard Program.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\4\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\5\ in particular, in that it is designed to promote 
just and equitable principles of trade, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general to protect investors and the public interest, 
by expanding the permissible expirations periods for index options and 
the Nonstandard Program to permit the listing of additional 
expirations. This

[[Page 7962]]

proposal will conform ISE's ability to list index options expirations 
similar to Cboe.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
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Expirations of Index Options
    Today, the Exchange may only list up to six standard monthly 
expirations at any one time in a class, but will not list index options 
that expire more than twelve months out and up to seven expiration 
months at any one time for any broad-based security index option 
contracts. With this proposal the Exchange may still list up to six 
standard monthly expirations at any one time in a class but may also 
list up to twelve standard monthly expirations at any one time for any 
class that the Exchange (as the Reporting Authority) uses to calculate 
a volatility index; and up to twelve standard (monthly) expirations in 
NDX options. This expanded ability will enable the Exchange to offer 
Members additional expirations on index options and compete more 
effectively with other markets to offer additional venues to trade 
index options. Further, this proposal will permit the Exchange to list 
similar index options as are listed by Cboe today, including in the 
Nonstandard Program.
Nonstandard Expirations Pilot Program
    The Exchange's proposal to amend Rule 2009 at Supplementary 
Material .07(a) to modify the maximum number of expirations that may be 
listed for each Weekly expiration in the Nonstandard Program to the 
proposed new expiration timeframes is consistent with the Act because 
today those timeframes refer to the timeframes for standard listed 
options. Providing for the maximum numbers of expirations permitted 
under the Nonstandard Program within the standard index options rule 
will clarify the timeframes and eliminate any potential ambiguity about 
the maximum numbers of expirations permitted under the Nonstandard 
Program. Additionally, this amendment will align the Exchange's 
Nonstandard Program to Cboe's nonstandard program.
Technical Amendment
    The Exchange's proposal amend [sic] a sentence within Rule 2009 at 
Supplementary Material .07(a) by replacing the word ``first'' with 
``initially'' is consistent with the Act because it will make clear the 
meaning of the term and the meaning. The Exchange is not proposing to 
amend the meaning of this sentence, rather the Exchange proposes to 
make clear that the word ``initially'' applies to the four week 
expiration period for listing initial weeklies in the Nonstandard 
Program. Also deleting a reference to foreign currency indexes will 
clarify Rule 2009(a)(3).

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 not necessary or appropriate in 
furtherance of the purposes of the Act. Specifically, the Exchange does 
not believe the proposal will impose any burden on intramarket 
competition as all market participants will be treated in the same 
manner with respect to expirations of index options. Additionally, the 
Exchange does not believe the proposal will impose any burden on 
intermarket competition as market participants are welcome to become 
ISE Members and trade at ISE if they determine that this proposed rule 
change has made ISE more attractive or favorable. Finally, all options 
exchanges are free to compete by listing and trading their own broad-
based index options with similar expirations. This proposal will permit 
ISE to compete with Cboe with respect to listing expirations on index 
options.

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) of the Act \6\ and Rule 19b-
4(f)(6) thereunder.\7\
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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 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 under Rule 19b-4(f)(6) of the Act \8\ 
normally does not become operative for 30 days after the date of 
filing. However, Rule 19b-4(f)(6)(iii) \9\ permits the Commission to 
designate a shorter time if the 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 so that 
the proposal may become operative immediately upon filing. The Exchange 
represents that the proposed rule change will add clarity to Rule 2009 
and allow the Exchange to list expirations on index options and in its 
Nonstandard Program in a manner similar to another exchange. Because 
the proposed rule change does not present any new or novel issues, the 
Commission believes that waiving the 30-day operative delay period is 
consistent with the protection of investors and the public interest. 
Accordingly, the Commission designates the proposed rule change to be 
operative upon filing.\10\
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    \8\ 17 CFR 240.19b-4(f)(6).
    \9\ 17 CFR 240.19b-4(f)(6)(iii).
    \10\ 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 necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.

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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-ISE-2019-02 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-2019-02. 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 (https://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent

[[Page 7963]]

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-
2019-02, and should be submitted on or before March 26, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-03883 Filed 3-4-19; 8:45 am]
 BILLING CODE 8011-01-P
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