Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Relocate ISE's Rules From Their Current Place in the Rulebook Into the New Rulebook Shell, 29567-29573 [2019-13305]
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Federal Register / Vol. 84, No. 121 / Monday, June 24, 2019 / Notices
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–86138; File No. SR–ISE–
2019–17]
Self-Regulatory Organizations; Nasdaq
ISE, LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Relocate ISE’s Rules
From Their Current Place in the
Rulebook Into the New Rulebook Shell
June 18, 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 June 6,
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 relocate
rules from its current Rulebook into its
new Rulebook shell.
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.
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 this rule change is to
relocate ISE rules into the new Rulebook
shell with some amendments to the
shell.3 The Exchange is relocating the
ISE Rules first and plans on relocating
the Rulebooks of its Affiliated
Exchanges so that it may harmonize its
rules, where applicable, across Nasdaq
markets. The relocation and
harmonization of the ISE Rules is part
of the Exchange’s continued effort to
promote efficiency and conformity of its
processes with those of its Affiliated
Exchanges. The Exchange believes that
the placement of the ISE Rules into their
new location in the shell will facilitate
the use of the Rulebook by Members.
Universal Changes
The Exchange proposes to amend the
defined term ‘‘System’’ 4 and replace
‘‘trading system’’ or ‘‘system’’ with the
defined term throughout the new rules.
The Exchange proposes to capitalize the
defined term ‘‘market maker’’ within
proposed Options 1, Section 1(a)(21)
and also capitalize the term throughout
the Rulebook. The Exchange proposes to
capitalize the defined term ‘‘Member’’ 5
throughout the new rules where it is not
already capitalized. The Exchange
proposes to correct references to the
non-defined term ‘‘member
organization’’ to the defined term
‘‘Member.’’ The Exchange proposes to
Proposed new rule No.
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Section 3 .............................................................
Section 4 .............................................................
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 Previously, the Exchange added a shell structure
to its Rulebook with the purpose of improving
efficiency and readability and to align its rules
closer to those of its five sister exchanges, Nasdaq
BX, Inc.; Nasdaq PHLX LLC; The Nasdaq Stock
Market LLC; Nasdaq GEMX, LLC; and Nasdaq MRX,
2 17
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capitalize the ‘‘t’’ in the defined term
‘‘Exchange Transactions’’ 6 where the
term is not properly capitalized within
the Rules. The Exchange proposes to
change references to ‘‘Commentary’’ to
‘‘Supplementary Material’’ to conform
the term throughout the Rulebook.
References to the term ‘‘Regulatory
Information Circular’’ are being
amended to the updated term ‘‘Options
Regulatory Alert.’’
The Exchange proposes to update all
cross-references within the Rule to the
new relocated rule cites. The Exchange
proposes to replace internal rule
references to simply state ‘‘this Rule’’
where the rule is citing itself without a
more specific cite included in the Rule.
For example, if ISE Rule 715 refers
currently to ‘‘Rule 715’’ or ‘‘this Rule
715’’ the Exchange will amend the
phrase to simply ‘‘this Rule.’’ The
Exchange proposes to conform
numbering and lettering in certain rules
to the remainder of the Rulebook.
Finally, the Exchange proposes to delete
any current Rules that are reserved in
the Rulebook.
General 1
The Exchange proposes to relocate
certain definitions from Rule 100 into
proposed General 1, Section 1 and the
remainder of the rules into Options 1,
Section 1. The Exchange proposes to
relocate definitions that are specific to
the options product into Options 1,
Section 1 and the more general
definitions will be relocated into the
General provisions.7
General 2
The Exchange will not relocate ISE
Rules 200–203 into General 2
Organization and Administration. The
Exchange will separately file a proposed
rule change to delete these rules.
General 2 would be comprised of the
following rules:
Current rule No.
Section 1 .............................................................
Section 2 (all 4 rules combined) .........................
1 15
29567
Rule
Rule
Rule
Rule
Rule
Rule
Rule
204.
205.
206.
207.
208.
211.
312.
Divisions of the Exchange.
Access Fees.
Transaction Fees.
Communication Fees.
Regulatory Fees or Charges.
Exchange’s Costs of Defending Legal Proceedings.
Limitation on Affiliation between the Exchange and Members.
LLC (‘‘Affiliated Exchanges’’). The shell structure
currently contains eight (8) Chapters which, once
complete, will apply a common set of rules to the
Affiliated Exchanges. See Securities Exchange Act
Release No. 82175 (November 29, 2017), 82 FR
57494 (December 5, 2017) (SR–NASDAQ–2017–
125).
4 The term ‘‘System’’ is defined at Rule 100(a)(63).
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5 The term ‘‘Member’’ is defined at Rule
100(a)(30).
6 The term ‘‘Exchange Transactions’’ is defined at
Rule 100(a)(22).
7 These rules are being relocated into Section 1 of
the General Provisions: Chapter I(a)(4), (9), (10),
(13A), (17), (18), (20), (20A), (22), (25), (26), (27),
(30), (31), (48), (57), (58), (62) and (66).
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The Exchange is combining Rules
205–208 into a single rule to conform
the content to that of other Affiliated
Exchanges.8 Rule 212, Sales Value Fee,
will be relocated into Options 7. The
Exchange intends to locate similar rules
within other Nasdaq Rulebooks in
similar locations when it files to
relocate other Affiliate Exchange
Rulebooks in separate rule changes. The
Exchange proposes to reserve Sections 5
and 6 within General 2.
Proposed new rule No.
Section
Section
Section
Section
Section
Section
1
2
3
4
5
6
General 3
The Exchange proposes to relocate the
following rules into General 3,
‘‘Membership and Access.’’
Current rule No.
.............................................................
.............................................................
.............................................................
.............................................................
.............................................................
.............................................................
Rule
Rule
Rule
Rule
Rule
Rule
301.
302.
304.
305.
306.
310.
Qualification of Members.
Denial of and Conditions to Becoming a Member.
Persons Associated with Members.
Documents Required of Applicants and Members.
Member Application Procedures.
Dissolution and Liquidation of Members.
General 5
The Exchange proposes to relocate the
following rules into General 5
Discipline:
Proposed new rule No.
Current rule No.
Section 1 .............................................................
Section 2 .............................................................
Section 3 .............................................................
Options 1
Rule 1600. Disciplinary Jurisdiction.
80. Investigations and Sanctions.
90. Code of Procedure.
proposed General 1, Section 1 and the
remainder of the rules into Options 1,
Section 1. The Exchange proposes to
relocate definitions that are specific to
the options product into Options 1,
Section 1. Section 2 of Options 1 is
being reserved.
The Exchange proposes to rename
current Options 1 from ‘‘Options
Definitions’’ to ‘‘General Provisions.’’
The Exchange proposes to relocate
certain definitions from Rule 100 into
Proposed new rule No.
Section
Section
Section
Section
Section
Section
Section
Section
1
2
3
4
5
6
7
8
.............................................................
.............................................................
.............................................................
.............................................................
.............................................................
.............................................................
.............................................................
.............................................................
Sections 9 and 10 will be reserved.
Rule
Rule
Rule
Rule
Rule
Rule
Rule
Rule
800.
801.
802.
803.
804.
805.
807.
809.
Registration of Market Makers.
Designated Trading Representatives.
Appointment of Market Makers.
Obligations of Market Makers.
Market Maker Quotations except 804(h) which will be relocated into Options 3.
Market Maker Orders.
Securities Accounts and Orders of Market Makers.
Financial Requirements for Market Makers.
Options Section 2A titled ‘‘ISE Market
Maker Rights’’ and proposes to relocate
the following rules into this chapter:
The Exchange proposes a new
Proposed new rule No.
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1
2
3
4
5
6
The Exchange proposes to rename
Options 2 from ‘‘Options Trading
Rules’’ to ‘‘Options Market Participants’’
and relocate the following rules into this
chapter:
Current rule No.
Options 2A
Section
Section
Section
Section
Section
Section
Options 2
Current rule No.
.............................................................
.............................................................
.............................................................
.............................................................
.............................................................
.............................................................
Section 7 .............................................................
Rule 300. Market Maker Rights.
Rule 303. Approval to Operate Multiple Memberships.
Rule 307. Sale and Transfer of Market Maker Rights.
Rule 308. Leasing Memberships.
Rule 309. Registration of Memberships by Individuals for Members.
Rule 311. Obligations of Terminating Members and Transferors of Market Maker Rights and
Memberships.
Rule 209. Transfer Fees.
8 The Exchange is not proposing any substantive
changes in consolidating these rules.
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Federal Register / Vol. 84, No. 121 / Monday, June 24, 2019 / Notices
Options 3
rename Options 3 from ‘‘Options Market
Participants’’ to ‘‘Options Trading
Rules’’ and relocate the following rules
into this chapter:
The Exchange proposes to
Proposed new rule No.
Current rule No.
Section 1 .............................................................
Section 2 .............................................................
Rule 700. Days and Hours of Business.
Rule 708. Units of Trading/Rule 709. Meaning of Premium Quotes and Orders (combined into
one rule).
Rule 710. Minimum Trading Increments.
Rule 711. Acceptance of Quotes and Orders, except (c) and (d).
Reserved.
Rule 704. Collection and Dissemination of Quotations.
Rule 715. Types of Orders.
Rule 701. Opening.
Rule 702. Trading Halts/Rule 703. Trading Halts Due To Extraordinary Market Volatility.
Rule 713. Priority of Quotes and Orders.
Rule 716. Auction Mechanisms.
Rule 721. Crossing Orders.
Rule 723. Price Improvement Mechanism for Crossing Transactions.
Rule 722. Complex Orders.
Rule 714. Automatic Execution of Orders.
Rule 724. Complex Order Risk Protections.
Kill Switch (relocating 711(c)).
Detection of Loss of Communication (relocating 711(d)).
Reserved.
Rule 720. Nullification and Adjustment of Options Transactions including Obvious Errors/Rule
720A. Erroneous Trades due to System Disruptions and Malfunctions (combined into one
rule).
Rule 706. Access to and Conduct on the Exchange.
Rule 717. Limitations on Orders.
Rule 718. Data Feeds and Trade Information.
Rule 719. Transaction Price Binding.
Reserved.
Message Traffic Mitigation (relocating Rule 804(h)).
Rule 705. Limitation of Liability.
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
3 .............................................................
4 .............................................................
5 .............................................................
6 .............................................................
7 .............................................................
8 .............................................................
9 .............................................................
10 ...........................................................
11 ...........................................................
12 ...........................................................
13 ...........................................................
14 ...........................................................
15 ...........................................................
16 ...........................................................
17 ...........................................................
18 ...........................................................
19 ...........................................................
20 ...........................................................
Section
Section
Section
Section
Section
Section
Section
21
22
23
24
25
26
27
...........................................................
...........................................................
...........................................................
...........................................................
...........................................................
...........................................................
...........................................................
The Exchange proposes to combine
ISE Rules 708 and 709 within Section
2.9 ISE Rule 714 is being relocated into
Options 3, Section 15 and is being
renamed from ‘‘Automatic Execution of
Orders’’ to ‘‘Simple Order Risk
Protections.’’ ISE Rules 702 and 703 are
being combined into Section 9. The
Exchange proposes to combine ISE
Rules 720 and 720A into Section 20.10
The Exchange proposes to relocate ISE
Rule 711(c) and (d) into new separate
Rules at Sections 17 and 18. The
Exchange proposes to create a separate
Proposed new rule No.
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
1 .............................................................
2 .............................................................
3 .............................................................
4 .............................................................
5 .............................................................
6 .............................................................
7 .............................................................
8 .............................................................
9 .............................................................
10 ...........................................................
Rule
Rule
Rule
Rule
Rule
Rule
Rule
Rule
Rule
Rule
Options 4A
The Exchange proposes to relocate
rules within new proposed Options 4A,
9 The Exchange is not proposing any substantive
changes in consolidating these rules.
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which is proposed to be titled ‘‘Options
Index Rules’’ as follows:
Current rule No.
Section 1 .............................................................
Section 2 .............................................................
20:38 Jun 21, 2019
Options 4
The Exchange proposes to relocate
rules within Options 4 Options Listing
Rules as follows:
500. Designation of Securities.
501. Rights and Obligations of Holders and Writers.
502. Criteria for Underlying Securities.
503. Withdrawal of Approval of Underlying Securities.
504. Series of Options Contracts Open for Trading.
504A. Select Provisions of Options Listing Procedures Plan.
505. Adjustments.
506. Long-Term Options Contracts.
507. Limitation on the Liability of Index Licensors for Options on Fund Shares.
508. Back-Up Trading Arrangements.
Proposed new rule No.
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rule in Section 26 relocated from Rule
804(h) and title the rule ‘‘Message
Traffic Mitigation.’’
Current rule No.
Rule 509, ‘‘Authority to Take Action
Under Emergency Conditions’’ is not
being relocated as this rule will be
deleted.
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29569
Rule 2000. Application of Index Rules.
Rule 2001. Definitions.
10 Id.
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Proposed new rule No.
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Current rule No.
3 .............................................................
4 .............................................................
5 .............................................................
6 .............................................................
7 .............................................................
8 .............................................................
9 .............................................................
10 ...........................................................
11 ...........................................................
12 ...........................................................
13 ...........................................................
14 ...........................................................
15 ...........................................................
16 ...........................................................
Rule 2002. Designation of an Index.
Reserved.
Rule 2003. Dissemination of Information.
Rule 2004. Position Limits for Broad-Based Index Options.
Rule 2005. Position Limits for Industry Index Options.
Rule 2005A. Position Limits for Foreign Currency Index Options.
Rule 2006. Exemptions from Position Limits.
Rule 2007. Exercise Limits.
Rule 2008. Trading Sessions.
Rule 2009. Terms of Index Options Contracts.
Rule 2010. Debit Put Spread Cash Account Transactions.
Rule 2011. Disclaimers.
Rule 2012. Exercise of American-Style Index Options.
Rule 2013. Market Maker Trading License.
Administration’’ to ‘‘Order Protection
and Locked and Crossed Markets’’ and
Options 5
The Exchange proposes to rename
Options 5 from ‘‘Options Trade
Proposed new rule No.
Section
Section
Section
Section
Section
1
2
3
4
5
Current rule No.
.............................................................
.............................................................
.............................................................
.............................................................
.............................................................
Options 6
The Exchange proposes rename
Options 6 from ‘‘Order Protection and
Rule
Rule
Rule
Rule
Rule
1900.
1901.
1902.
1903.
1904.
Definitions.
Order Protection.
Locked and Crossed Markets.
Order Routing to Other Exchanges.
Cancellation of Orders and Error Account.
Locked and Cross Markets’’ to ‘‘Options
Trade Administration’’ and relocate
rules within Options 6 as follows:
Proposed new rule No.
Section
Section
Section
Section
1
2
3
4
relocate rules within Options 5 as
follows:
Current rule No.
.............................................................
.............................................................
.............................................................
.............................................................
Rule
Rule
Rule
Rule
707.
712.
806.
808.
Clearing Member Give Up.
Submission of Orders and Clearance of Transactions.
Trade Reporting and Comparison.
Letters of Guarantee.
Options 6A
The Exchange proposes to relocate
rules within new proposed Options 6A
titled ‘‘Closing Transactions’’ as follows:
Proposed new rule No.
Current rule No.
Section 1 .............................................................
Section 2 .............................................................
Options 6B
The Exchange proposes to relocate
rules within new proposed Options 6B
Rule 1000. Contracts of Suspended Members.
Rule 1001. Failure to Pay Premium.
titled ‘‘Exercises and Deliveries’’ as
follows:
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Proposed new rule No.
Current rule No.
Section 1 .............................................................
Section 2 .............................................................
Section 3 .............................................................
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Rule 1100. Exercise of Options Contracts.
Rule 1101. Allocation of Exercise Notices.
Rule 1102. Delivery and Payment.
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29571
Options 6C
The Exchange proposes to relocate
rules within new proposed Options 6C
titled ‘‘Margins’’ as follows:
Proposed new rule No.
Section
Section
Section
Section
Section
Section
1
2
3
4
5
6
Current rule No.
.............................................................
.............................................................
.............................................................
.............................................................
.............................................................
.............................................................
Options 6D
Rule
Rule
Rule
Rule
Rule
Rule
1200.
1201.
1202.
1203.
1204.
1205.
General Rule.
Time Margin Must Be Obtained.
Margin Requirements.
Meeting Margin Calls by Liquidation Prohibited.
Margin Required Is Minimum.
Margin Requirements Exception.
rules within new proposed Options 6D
titled ‘‘Net Capital Requirements’’ as
follows:
The Exchange proposes to relocate
Proposed new rule No.
Section
Section
Section
Section
1
2
3
4
Current rule No.
.............................................................
.............................................................
.............................................................
.............................................................
Options 6E
Rule
Rule
Rule
Rule
1300.
1301.
1302.
1303.
Minimum Requirements.
‘‘Early Warning’’ Notification Requirements.
Power of President to Impose Restrictions.
Joint Back Office Arrangements.
rules within new proposed Options 6E
titled ‘‘Records, Reports and Audits’’ as
follows:
The Exchange proposes to relocate
Proposed new rule No.
Section
Section
Section
Section
Section
Section
Section
Section
1
2
3
4
5
6
7
8
Current rule No.
.............................................................
.............................................................
.............................................................
.............................................................
.............................................................
.............................................................
.............................................................
.............................................................
Rule 1400. Maintenance, Retention and Furnishing of Books, Records and Other Information.
Rule 1401. Reports of Uncovered Short Positions.
Rule 1402. Financial Reports.
Rule 1403. Audits.
Rule 1404. Automated Submission of Trade Data.
Rule 1405. Risk Analysis of Market Maker Accounts.
Rule 1406. Regulatory Cooperation.
Rule 1408. Fingerprint-Based Background Checks of Exchange Employees and Independent
Contractors and Other Service Providers.
The Exchange is updating various
cross-references within Options 7 to
reflect the new rule locations. Within
the definition of Options 7, Section 1,
the Exchange is also deleting rule
references to ‘‘SSF-Option Orders’’
Options 7
The Exchange proposes to relocate
Rule 212 titled ‘‘Sales Value Fee’’ to
Options 7, Options Pricing at new
proposed Section 12.
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Proposed new rule No.
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
which terminology no longer exists
within current Rule 722.11
Options 9
The Exchange proposes to relocate
rules within new proposed Options 9
titled ‘‘Business Conduct’’ as follows:
Current rule No.
1 .............................................................
2 .............................................................
3 .............................................................
4 .............................................................
5 .............................................................
6 .............................................................
7 .............................................................
8 .............................................................
9 .............................................................
10 ...........................................................
11 ...........................................................
12 ...........................................................
13 ...........................................................
14 ...........................................................
15 ...........................................................
16 ...........................................................
Rule
Rule
Rule
Rule
Rule
Rule
Rule
Rule
Rule
Rule
Rule
Rule
Rule
Rule
Rule
Rule
400.
401.
402.
403.
404.
405.
406.
407.
408.
409.
410.
411.
412.
413.
414.
415.
Just and Equitable Principles of Trade.
Adherence to Law.
Sharing of Offices and Wire Connections.
Disruptive Quoting and Trading Activity Prohibited.
False Statements.
Manipulation.
Gratuities.
Rumors.
Prevention of the Misuse of Material Nonpublic Information.
Disciplinary Action by Other Organizations.
Other Restrictions on Members.
Significant Business Transactions.
Position Limits.
Exemptions from Position Limits.
Exercise Limits.
Reports Related to Position Limits.
11 See Securities Exchange Act Release No. 82999
(April 5, 2018), 83 FR 15662 (April 11, 2018) (SR–
ISE–2018–28).
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Federal Register / Vol. 84, No. 121 / Monday, June 24, 2019 / Notices
Proposed new rule No.
Section
Section
Section
Section
Section
Section
Section
17
18
19
20
21
22
23
Current rule No.
...........................................................
...........................................................
...........................................................
...........................................................
...........................................................
...........................................................
...........................................................
Options 10
The Exchange proposes to relocate
rules within new proposed Options 10
Rule 416. Liquidation Positions.
Rule 417. Limit on Outstanding Uncovered Short Positions.
Rule 418. Other Restrictions on Options Transactions and Exercises.
Rule 419. Mandatory Systems Testing.
Rule 420. Anti-Money Laundering Compliance Program.
Rule 421. Proxy Voting.
Reserved.
titled ‘‘Doing Business with the Public’’
as follows:
Proposed new rule No.
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Current rule No.
1 .............................................................
2 .............................................................
3 .............................................................
4 .............................................................
5 .............................................................
6 .............................................................
7 .............................................................
8 .............................................................
9 .............................................................
10 ...........................................................
11 ...........................................................
12 ...........................................................
13 ...........................................................
14 ...........................................................
15 ...........................................................
16 ...........................................................
17 ...........................................................
18 ...........................................................
19 ...........................................................
20 ...........................................................
21 ...........................................................
22 ...........................................................
23 ...........................................................
The Exchange proposes to reserve
Options 10, Sections 24 and 25.
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Options 11
Finally, the Exchange proposes to
relocate Rule 1614, titled ‘‘Imposition of
Fines for Minor Rule Violations’’ to
Options 11 titled ‘‘Minor Rule Plan
Violations’’ at Section 1.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,12 in general, and furthers the
objectives of Section 6(b)(5) of the Act,13
in particular, in that it is designed to
promote just and equitable principles of
trade and to protect investors and the
public interest by bringing greater
transparency to its rules by relocating its
Rules into the new Rulebook shell
together with other rules which have
already been relocated. The Exchange’s
proposal is consistent with the Act and
will protect investors and the public
interest by harmonizing its rules, where
12 15
13 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
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Rule
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Rule
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Rule
Rule
600.
601.
602.
606.
607.
608.
609.
610.
611.
612.
613.
614.
616.
617.
618.
619.
620.
621.
622.
623.
624.
625.
626.
Exchange Approval.
Registration of Options Principals.
Registration of Representatives.
Discipline, Suspension, Expulsion of Registered Persons.
Branch Offices.
Opening of Accounts.
Supervision of Accounts.
Suitability of Recommendations.
Discretionary Accounts.
Confirmation to Customers.
Statement of Accounts to Customers.
Statements of Financial Condition to Customers.
Delivery of Current Options Disclosure Documents and Prospectus.
Restrictions on Pledge and Lending of Customers’ Securities.
Transactions of Certain Customers.
Guarantees.
Profit Sharing.
Assuming Losses.
Transfer of Accounts.
Options Communications.
Brokers’ Blanket Bonds.
Customer Complaints.
Telemarketing.
applicable, across Nasdaq markets so
that Members can readily locate rules
which cover similar topics. The
relocation and harmonization of the ISE
Rules is part of the Exchange’s
continued effort to promote efficiency
and conformity of its processes with
those of its Affiliated Exchanges. The
Exchange believes that the placement of
the ISE Rules into their new location in
the shell will facilitate the use of the
Rulebook by Members. Specifically, the
Exchange believes that market
participants that are members of more
than one Nasdaq market will benefit
from the ability to compare Rulebooks.
The Exchange is not substantively
amending rule text unless noted
otherwise within this rule change. The
renumbering, re-lettering, deleting
reserved rules, amending crossreferences and other minor technical
changes will bring greater transparency
to ISE’s Rules. The Exchange intends to
file other rule change to relocate
Affiliated Exchange Rulebooks to
relocate corresponding rules into the
same location in each Rulebook for ease
PO 00000
Frm 00080
Fmt 4703
Sfmt 4703
of reference. The Exchange believes its
proposal will benefit investors and the
general public by increasing the
transparency of its Rulebook and
promoting easy comparisons among the
various Nasdaq Rulebooks.
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. The
Exchange believes that the proposed
amendments do not impose an undue
burden on competition because the
amendments to relocate the Rules are
non-substantive. This rule change is
intended to bring greater clarity to the
Exchange’s Rules. Renumbering, relettering, deleting reserved rules and
amending cross-references will bring
greater transparency to ISE’s Rules.
E:\FR\FM\24JNN1.SGM
24JNN1
Federal Register / Vol. 84, No. 121 / Monday, June 24, 2019 / Notices
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.
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Vanessa A. Countryman,
Acting Secretary.
IV. Solicitation of Comments
[FR Doc. 2019–13305 Filed 6–21–19; 8:45 am]
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 14 and Rule 19b–
4(f)(6) thereunder.15
A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
Act 16 normally does not become
operative for 30 days after the date of its
filing. However, Rule 19b–4(f)(6)(iii) 17
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 so that the
proposed rule change may become
operative upon filing. As the proposed
rule change raises no novel issues and
is largely organizational, the
Commission believes that waiver of the
30-day operative delay is consistent
with the protection of investors and the
public interest. Accordingly, the
Commission hereby waives the
operative delay and designates the
proposed rule change operative upon
filing.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 necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
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:
14 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
give the Commission written notice of its 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.
16 17 CFR 240.19b–4(f)(6).
17 17 CFR 240.19b–4(f)(6)(iii).
18 For purposes only of waiving the 30-day
operative delay, the Commission also has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
15 17
jbell on DSK3GLQ082PROD with NOTICES
29573
VerDate Sep<11>2014
16:50 Jun 21, 2019
Jkt 247001
BILLING CODE 8011–01–P
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–2019–17 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–2019–17. 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
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–2019–17 and should be
submitted on or before July 15, 2019.
PO 00000
Frm 00081
Fmt 4703
Sfmt 4703
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–132, OMB Control No.
3235–0158]
Submission for OMB Review;
Comment Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
Extension:
Rule 20a–1
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501–3520), the Securities
and Exchange Commission has
submitted to the Office of Management
and Budget a request for extension of
the previously approved collection of
information discussed below.
Rule 20a–1 (17 CFR 270.20a–1) was
adopted under Section 20(a) of the
Investment Company Act of 1940
(‘‘1940 Act’’) (15 U.S.C. 80a–20(a)) and
concerns the solicitation of proxies,
consents, and authorizations with
respect to securities issued by registered
investment companies (‘‘Funds’’). More
specifically, rule 20a–1 under the 1940
Act (15 U.S.C. 80a–1 et seq.) requires
that the solicitation of a proxy, consent,
or authorization with respect to a
security issued by a Fund be in
compliance with Regulation 14A (17
CFR 240.14a–1 et seq.), Schedule 14A
(17 CFR 240.14a–101), and all other
rules and regulations adopted pursuant
to section 14(a) of the Securities
Exchange Act of 1934 (‘‘1934 Act’’) (15
U.S.C. 78n(a)). It also requires, in certain
circumstances, a Fund’s investment
adviser or a prospective adviser, and
certain affiliates of the adviser or
prospective adviser, to transmit to the
person making the solicitation the
information necessary to enable that
person to comply with the rules and
regulations applicable to the
solicitation. In addition, rule 20a–1
instructs Funds that have made a public
offering of securities and that hold
security holder votes for which proxies,
consents, or authorizations are not being
solicited, to refer to section 14(c) of the
19 17
E:\FR\FM\24JNN1.SGM
CFR 200.30–3(a)(12).
24JNN1
]]>Agencies
[Federal Register Volume 84, Number 121 (Monday, June 24, 2019)]
[Notices]
[Pages 29567-29573]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-13305]
[[Page 29567]]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-86138; File No. SR-ISE-2019-17]
Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Relocate ISE's
Rules From Their Current Place in the Rulebook Into the New Rulebook
Shell
June 18, 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 June 6, 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.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to relocate rules from its current Rulebook
into its new Rulebook shell.
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.
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 this rule change is to relocate ISE rules into the
new Rulebook shell with some amendments to the shell.\3\ The Exchange
is relocating the ISE Rules first and plans on relocating the Rulebooks
of its Affiliated Exchanges so that it may harmonize its rules, where
applicable, across Nasdaq markets. The relocation and harmonization of
the ISE Rules is part of the Exchange's continued effort to promote
efficiency and conformity of its processes with those of its Affiliated
Exchanges. The Exchange believes that the placement of the ISE Rules
into their new location in the shell will facilitate the use of the
Rulebook by Members.
---------------------------------------------------------------------------
\3\ Previously, the Exchange added a shell structure to its
Rulebook with the purpose of improving efficiency and readability
and to align its rules closer to those of its five sister exchanges,
Nasdaq BX, Inc.; Nasdaq PHLX LLC; The Nasdaq Stock Market LLC;
Nasdaq GEMX, LLC; and Nasdaq MRX, LLC (``Affiliated Exchanges'').
The shell structure currently contains eight (8) Chapters which,
once complete, will apply a common set of rules to the Affiliated
Exchanges. See Securities Exchange Act Release No. 82175 (November
29, 2017), 82 FR 57494 (December 5, 2017) (SR-NASDAQ-2017-125).
---------------------------------------------------------------------------
Universal Changes
The Exchange proposes to amend the defined term ``System'' \4\ and
replace ``trading system'' or ``system'' with the defined term
throughout the new rules. The Exchange proposes to capitalize the
defined term ``market maker'' within proposed Options 1, Section
1(a)(21) and also capitalize the term throughout the Rulebook. The
Exchange proposes to capitalize the defined term ``Member'' \5\
throughout the new rules where it is not already capitalized. The
Exchange proposes to correct references to the non-defined term
``member organization'' to the defined term ``Member.'' The Exchange
proposes to capitalize the ``t'' in the defined term ``Exchange
Transactions'' \6\ where the term is not properly capitalized within
the Rules. The Exchange proposes to change references to ``Commentary''
to ``Supplementary Material'' to conform the term throughout the
Rulebook. References to the term ``Regulatory Information Circular''
are being amended to the updated term ``Options Regulatory Alert.''
---------------------------------------------------------------------------
\4\ The term ``System'' is defined at Rule 100(a)(63).
\5\ The term ``Member'' is defined at Rule 100(a)(30).
\6\ The term ``Exchange Transactions'' is defined at Rule
100(a)(22).
---------------------------------------------------------------------------
The Exchange proposes to update all cross-references within the
Rule to the new relocated rule cites. The Exchange proposes to replace
internal rule references to simply state ``this Rule'' where the rule
is citing itself without a more specific cite included in the Rule. For
example, if ISE Rule 715 refers currently to ``Rule 715'' or ``this
Rule 715'' the Exchange will amend the phrase to simply ``this Rule.''
The Exchange proposes to conform numbering and lettering in certain
rules to the remainder of the Rulebook. Finally, the Exchange proposes
to delete any current Rules that are reserved in the Rulebook.
General 1
The Exchange proposes to relocate certain definitions from Rule 100
into proposed General 1, Section 1 and the remainder of the rules into
Options 1, Section 1. The Exchange proposes to relocate definitions
that are specific to the options product into Options 1, Section 1 and
the more general definitions will be relocated into the General
provisions.\7\
---------------------------------------------------------------------------
\7\ These rules are being relocated into Section 1 of the
General Provisions: Chapter I(a)(4), (9), (10), (13A), (17), (18),
(20), (20A), (22), (25), (26), (27), (30), (31), (48), (57), (58),
(62) and (66).
---------------------------------------------------------------------------
General 2
The Exchange will not relocate ISE Rules 200-203 into General 2
Organization and Administration. The Exchange will separately file a
proposed rule change to delete these rules. General 2 would be
comprised of the following rules:
------------------------------------------------------------------------
Proposed new rule No. Current rule No.
------------------------------------------------------------------------
Section 1.................... Rule 204. Divisions of the Exchange.
Section 2 (all 4 rules Rule 205. Access Fees.
combined). Rule 206. Transaction Fees.
Rule 207. Communication Fees.
Rule 208. Regulatory Fees or Charges.
Section 3.................... Rule 211. Exchange's Costs of Defending
Legal Proceedings.
Section 4.................... Rule 312. Limitation on Affiliation
between the Exchange and Members.
------------------------------------------------------------------------
[[Page 29568]]
The Exchange is combining Rules 205-208 into a single rule to
conform the content to that of other Affiliated Exchanges.\8\ Rule 212,
Sales Value Fee, will be relocated into Options 7. The Exchange intends
to locate similar rules within other Nasdaq Rulebooks in similar
locations when it files to relocate other Affiliate Exchange Rulebooks
in separate rule changes. The Exchange proposes to reserve Sections 5
and 6 within General 2.
---------------------------------------------------------------------------
\8\ The Exchange is not proposing any substantive changes in
consolidating these rules.
---------------------------------------------------------------------------
General 3
The Exchange proposes to relocate the following rules into General
3, ``Membership and Access.''
------------------------------------------------------------------------
Proposed new rule No. Current rule No.
------------------------------------------------------------------------
Section 1.................... Rule 301. Qualification of Members.
Section 2.................... Rule 302. Denial of and Conditions to
Becoming a Member.
Section 3.................... Rule 304. Persons Associated with
Members.
Section 4.................... Rule 305. Documents Required of
Applicants and Members.
Section 5.................... Rule 306. Member Application Procedures.
Section 6.................... Rule 310. Dissolution and Liquidation of
Members.
------------------------------------------------------------------------
General 5
The Exchange proposes to relocate the following rules into General
5 Discipline:
------------------------------------------------------------------------
Proposed new rule No. Current rule No.
------------------------------------------------------------------------
Section 1.................... Rule 1600. Disciplinary Jurisdiction.
Section 2.................... 80. Investigations and Sanctions.
Section 3.................... 90. Code of Procedure.
------------------------------------------------------------------------
Options 1
The Exchange proposes to rename current Options 1 from ``Options
Definitions'' to ``General Provisions.'' The Exchange proposes to
relocate certain definitions from Rule 100 into proposed General 1,
Section 1 and the remainder of the rules into Options 1, Section 1. The
Exchange proposes to relocate definitions that are specific to the
options product into Options 1, Section 1. Section 2 of Options 1 is
being reserved.
Options 2
The Exchange proposes to rename Options 2 from ``Options Trading
Rules'' to ``Options Market Participants'' and relocate the following
rules into this chapter:
------------------------------------------------------------------------
Proposed new rule No. Current rule No.
------------------------------------------------------------------------
Section 1.................... Rule 800. Registration of Market Makers.
Section 2.................... Rule 801. Designated Trading
Representatives.
Section 3.................... Rule 802. Appointment of Market Makers.
Section 4.................... Rule 803. Obligations of Market Makers.
Section 5.................... Rule 804. Market Maker Quotations except
804(h) which will be relocated into
Options 3.
Section 6.................... Rule 805. Market Maker Orders.
Section 7.................... Rule 807. Securities Accounts and Orders
of Market Makers.
Section 8.................... Rule 809. Financial Requirements for
Market Makers.
------------------------------------------------------------------------
Sections 9 and 10 will be reserved.
Options 2A
The Exchange proposes a new Options Section 2A titled ``ISE Market
Maker Rights'' and proposes to relocate the following rules into this
chapter:
------------------------------------------------------------------------
Proposed new rule No. Current rule No.
------------------------------------------------------------------------
Section 1.................... Rule 300. Market Maker Rights.
Section 2.................... Rule 303. Approval to Operate Multiple
Memberships.
Section 3.................... Rule 307. Sale and Transfer of Market
Maker Rights.
Section 4.................... Rule 308. Leasing Memberships.
Section 5.................... Rule 309. Registration of Memberships by
Individuals for Members.
Section 6.................... Rule 311. Obligations of Terminating
Members and Transferors of Market Maker
Rights and Memberships.
Section 7.................... Rule 209. Transfer Fees.
------------------------------------------------------------------------
[[Page 29569]]
Options 3
The Exchange proposes torename Options 3 from ``Options Market
Participants'' to ``Options Trading Rules'' and relocate the following
rules into this chapter:
------------------------------------------------------------------------
Proposed new rule No. Current rule No.
------------------------------------------------------------------------
Section 1.................... Rule 700. Days and Hours of Business.
Section 2.................... Rule 708. Units of Trading/Rule 709.
Meaning of Premium Quotes and Orders
(combined into one rule).
Section 3.................... Rule 710. Minimum Trading Increments.
Section 4.................... Rule 711. Acceptance of Quotes and
Orders, except (c) and (d).
Section 5.................... Reserved.
Section 6.................... Rule 704. Collection and Dissemination of
Quotations.
Section 7.................... Rule 715. Types of Orders.
Section 8.................... Rule 701. Opening.
Section 9.................... Rule 702. Trading Halts/Rule 703. Trading
Halts Due To Extraordinary Market
Volatility.
Section 10................... Rule 713. Priority of Quotes and Orders.
Section 11................... Rule 716. Auction Mechanisms.
Section 12................... Rule 721. Crossing Orders.
Section 13................... Rule 723. Price Improvement Mechanism for
Crossing Transactions.
Section 14................... Rule 722. Complex Orders.
Section 15................... Rule 714. Automatic Execution of Orders.
Section 16................... Rule 724. Complex Order Risk Protections.
Section 17................... Kill Switch (relocating 711(c)).
Section 18................... Detection of Loss of Communication
(relocating 711(d)).
Section 19................... Reserved.
Section 20................... Rule 720. Nullification and Adjustment of
Options Transactions including Obvious
Errors/Rule 720A. Erroneous Trades due
to System Disruptions and Malfunctions
(combined into one rule).
Section 21................... Rule 706. Access to and Conduct on the
Exchange.
Section 22................... Rule 717. Limitations on Orders.
Section 23................... Rule 718. Data Feeds and Trade
Information.
Section 24................... Rule 719. Transaction Price Binding.
Section 25................... Reserved.
Section 26................... Message Traffic Mitigation (relocating
Rule 804(h)).
Section 27................... Rule 705. Limitation of Liability.
------------------------------------------------------------------------
The Exchange proposes to combine ISE Rules 708 and 709 within
Section 2.\9\ ISE Rule 714 is being relocated into Options 3, Section
15 and is being renamed from ``Automatic Execution of Orders'' to
``Simple Order Risk Protections.'' ISE Rules 702 and 703 are being
combined into Section 9. The Exchange proposes to combine ISE Rules 720
and 720A into Section 20.\10\ The Exchange proposes to relocate ISE
Rule 711(c) and (d) into new separate Rules at Sections 17 and 18. The
Exchange proposes to create a separate rule in Section 26 relocated
from Rule 804(h) and title the rule ``Message Traffic Mitigation.''
---------------------------------------------------------------------------
\9\ The Exchange is not proposing any substantive changes in
consolidating these rules.
\10\ Id.
---------------------------------------------------------------------------
Options 4
The Exchange proposes to relocate rules within Options 4 Options
Listing Rules as follows:
------------------------------------------------------------------------
Proposed new rule No. Current rule No.
------------------------------------------------------------------------
Section 1.................... Rule 500. Designation of Securities.
Section 2.................... Rule 501. Rights and Obligations of
Holders and Writers.
Section 3.................... Rule 502. Criteria for Underlying
Securities.
Section 4.................... Rule 503. Withdrawal of Approval of
Underlying Securities.
Section 5.................... Rule 504. Series of Options Contracts
Open for Trading.
Section 6.................... Rule 504A. Select Provisions of Options
Listing Procedures Plan.
Section 7.................... Rule 505. Adjustments.
Section 8.................... Rule 506. Long-Term Options Contracts.
Section 9.................... Rule 507. Limitation on the Liability of
Index Licensors for Options on Fund
Shares.
Section 10................... Rule 508. Back-Up Trading Arrangements.
------------------------------------------------------------------------
Rule 509, ``Authority to Take Action Under Emergency Conditions''
is not being relocated as this rule will be deleted.
Options 4A
The Exchange proposes to relocate rules within new proposed Options
4A, which is proposed to be titled ``Options Index Rules'' as follows:
------------------------------------------------------------------------
Proposed new rule No. Current rule No.
------------------------------------------------------------------------
Section 1.................... Rule 2000. Application of Index Rules.
Section 2.................... Rule 2001. Definitions.
[[Page 29570]]
Section 3.................... Rule 2002. Designation of an Index.
Section 4.................... Reserved.
Section 5.................... Rule 2003. Dissemination of Information.
Section 6.................... Rule 2004. Position Limits for Broad-
Based Index Options.
Section 7.................... Rule 2005. Position Limits for Industry
Index Options.
Section 8.................... Rule 2005A. Position Limits for Foreign
Currency Index Options.
Section 9.................... Rule 2006. Exemptions from Position
Limits.
Section 10................... Rule 2007. Exercise Limits.
Section 11................... Rule 2008. Trading Sessions.
Section 12................... Rule 2009. Terms of Index Options
Contracts.
Section 13................... Rule 2010. Debit Put Spread Cash Account
Transactions.
Section 14................... Rule 2011. Disclaimers.
Section 15................... Rule 2012. Exercise of American-Style
Index Options.
Section 16................... Rule 2013. Market Maker Trading License.
------------------------------------------------------------------------
Options 5
The Exchange proposes to rename Options 5 from ``Options Trade
Administration'' to ``Order Protection and Locked and Crossed Markets''
and relocate rules within Options 5 as follows:
------------------------------------------------------------------------
Proposed new rule No. Current rule No.
------------------------------------------------------------------------
Section 1.................... Rule 1900. Definitions.
Section 2.................... Rule 1901. Order Protection.
Section 3.................... Rule 1902. Locked and Crossed Markets.
Section 4.................... Rule 1903. Order Routing to Other
Exchanges.
Section 5.................... Rule 1904. Cancellation of Orders and
Error Account.
------------------------------------------------------------------------
Options 6
The Exchange proposes rename Options 6 from ``Order Protection and
Locked and Cross Markets'' to ``Options Trade Administration'' and
relocate rules within Options 6 as follows:
------------------------------------------------------------------------
Proposed new rule No. Current rule No.
------------------------------------------------------------------------
Section 1.................... Rule 707. Clearing Member Give Up.
Section 2.................... Rule 712. Submission of Orders and
Clearance of Transactions.
Section 3.................... Rule 806. Trade Reporting and Comparison.
Section 4.................... Rule 808. Letters of Guarantee.
------------------------------------------------------------------------
Options 6A
The Exchange proposes to relocate rules within new proposed Options
6A titled ``Closing Transactions'' as follows:
------------------------------------------------------------------------
Proposed new rule No. Current rule No.
------------------------------------------------------------------------
Section 1.................... Rule 1000. Contracts of Suspended
Members.
Section 2.................... Rule 1001. Failure to Pay Premium.
------------------------------------------------------------------------
Options 6B
The Exchange proposes to relocate rules within new proposed Options
6B titled ``Exercises and Deliveries'' as follows:
------------------------------------------------------------------------
Proposed new rule No. Current rule No.
------------------------------------------------------------------------
Section 1.................... Rule 1100. Exercise of Options Contracts.
Section 2.................... Rule 1101. Allocation of Exercise
Notices.
Section 3.................... Rule 1102. Delivery and Payment.
------------------------------------------------------------------------
[[Page 29571]]
Options 6C
The Exchange proposes to relocate rules within new proposed Options
6C titled ``Margins'' as follows:
------------------------------------------------------------------------
Proposed new rule No. Current rule No.
------------------------------------------------------------------------
Section 1.................... Rule 1200. General Rule.
Section 2.................... Rule 1201. Time Margin Must Be Obtained.
Section 3.................... Rule 1202. Margin Requirements.
Section 4.................... Rule 1203. Meeting Margin Calls by
Liquidation Prohibited.
Section 5.................... Rule 1204. Margin Required Is Minimum.
Section 6.................... Rule 1205. Margin Requirements Exception.
------------------------------------------------------------------------
Options 6D
The Exchange proposes to relocaterules within new proposed Options
6D titled ``Net Capital Requirements'' as follows:
------------------------------------------------------------------------
Proposed new rule No. Current rule No.
------------------------------------------------------------------------
Section 1.................... Rule 1300. Minimum Requirements.
Section 2.................... Rule 1301. ``Early Warning'' Notification
Requirements.
Section 3.................... Rule 1302. Power of President to Impose
Restrictions.
Section 4.................... Rule 1303. Joint Back Office
Arrangements.
------------------------------------------------------------------------
Options 6E
The Exchange proposes to relocaterules within new proposed Options
6E titled ``Records, Reports and Audits'' as follows:
------------------------------------------------------------------------
Proposed new rule No. Current rule No.
------------------------------------------------------------------------
Section 1.................... Rule 1400. Maintenance, Retention and
Furnishing of Books, Records and Other
Information.
Section 2.................... Rule 1401. Reports of Uncovered Short
Positions.
Section 3.................... Rule 1402. Financial Reports.
Section 4.................... Rule 1403. Audits.
Section 5.................... Rule 1404. Automated Submission of Trade
Data.
Section 6.................... Rule 1405. Risk Analysis of Market Maker
Accounts.
Section 7.................... Rule 1406. Regulatory Cooperation.
Section 8.................... Rule 1408. Fingerprint-Based Background
Checks of Exchange Employees and
Independent Contractors and Other
Service Providers.
------------------------------------------------------------------------
Options 7
The Exchange proposes to relocate Rule 212 titled ``Sales Value
Fee'' to Options 7, Options Pricing at new proposed Section 12.
The Exchange is updating various cross-references within Options 7
to reflect the new rule locations. Within the definition of Options 7,
Section 1, the Exchange is also deleting rule references to ``SSF-
Option Orders'' which terminology no longer exists within current Rule
722.\11\
---------------------------------------------------------------------------
\11\ See Securities Exchange Act Release No. 82999 (April 5,
2018), 83 FR 15662 (April 11, 2018) (SR-ISE-2018-28).
---------------------------------------------------------------------------
Options 9
The Exchange proposes to relocate rules within new proposed Options
9 titled ``Business Conduct'' as follows:
------------------------------------------------------------------------
Proposed new rule No. Current rule No.
------------------------------------------------------------------------
Section 1.................... Rule 400. Just and Equitable Principles
of Trade.
Section 2.................... Rule 401. Adherence to Law.
Section 3.................... Rule 402. Sharing of Offices and Wire
Connections.
Section 4.................... Rule 403. Disruptive Quoting and Trading
Activity Prohibited.
Section 5.................... Rule 404. False Statements.
Section 6.................... Rule 405. Manipulation.
Section 7.................... Rule 406. Gratuities.
Section 8.................... Rule 407. Rumors.
Section 9.................... Rule 408. Prevention of the Misuse of
Material Nonpublic Information.
Section 10................... Rule 409. Disciplinary Action by Other
Organizations.
Section 11................... Rule 410. Other Restrictions on Members.
Section 12................... Rule 411. Significant Business
Transactions.
Section 13................... Rule 412. Position Limits.
Section 14................... Rule 413. Exemptions from Position
Limits.
Section 15................... Rule 414. Exercise Limits.
Section 16................... Rule 415. Reports Related to Position
Limits.
[[Page 29572]]
Section 17................... Rule 416. Liquidation Positions.
Section 18................... Rule 417. Limit on Outstanding Uncovered
Short Positions.
Section 19................... Rule 418. Other Restrictions on Options
Transactions and Exercises.
Section 20................... Rule 419. Mandatory Systems Testing.
Section 21................... Rule 420. Anti-Money Laundering
Compliance Program.
Section 22................... Rule 421. Proxy Voting.
Section 23................... Reserved.
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Options 10
The Exchange proposes to relocate rules within new proposed Options
10 titled ``Doing Business with the Public'' as follows:
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Proposed new rule No. Current rule No.
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Section 1.................... Rule 600. Exchange Approval.
Section 2.................... Rule 601. Registration of Options
Principals.
Section 3.................... Rule 602. Registration of
Representatives.
Section 4.................... Rule 606. Discipline, Suspension,
Expulsion of Registered Persons.
Section 5.................... Rule 607. Branch Offices.
Section 6.................... Rule 608. Opening of Accounts.
Section 7.................... Rule 609. Supervision of Accounts.
Section 8.................... Rule 610. Suitability of Recommendations.
Section 9.................... Rule 611. Discretionary Accounts.
Section 10................... Rule 612. Confirmation to Customers.
Section 11................... Rule 613. Statement of Accounts to
Customers.
Section 12................... Rule 614. Statements of Financial
Condition to Customers.
Section 13................... Rule 616. Delivery of Current Options
Disclosure Documents and Prospectus.
Section 14................... Rule 617. Restrictions on Pledge and
Lending of Customers' Securities.
Section 15................... Rule 618. Transactions of Certain
Customers.
Section 16................... Rule 619. Guarantees.
Section 17................... Rule 620. Profit Sharing.
Section 18................... Rule 621. Assuming Losses.
Section 19................... Rule 622. Transfer of Accounts.
Section 20................... Rule 623. Options Communications.
Section 21................... Rule 624. Brokers' Blanket Bonds.
Section 22................... Rule 625. Customer Complaints.
Section 23................... Rule 626. Telemarketing.
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The Exchange proposes to reserve Options 10, Sections 24 and 25.
Options 11
Finally, the Exchange proposes to relocate Rule 1614, titled
``Imposition of Fines for Minor Rule Violations'' to Options 11 titled
``Minor Rule Plan Violations'' at Section 1.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\12\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\13\ in particular, in that it is designed to
promote just and equitable principles of trade and to protect investors
and the public interest by bringing greater transparency to its rules
by relocating its Rules into the new Rulebook shell together with other
rules which have already been relocated. The Exchange's proposal is
consistent with the Act and will protect investors and the public
interest by harmonizing its rules, where applicable, across Nasdaq
markets so that Members can readily locate rules which cover similar
topics. The relocation and harmonization of the ISE Rules is part of
the Exchange's continued effort to promote efficiency and conformity of
its processes with those of its Affiliated Exchanges. The Exchange
believes that the placement of the ISE Rules into their new location in
the shell will facilitate the use of the Rulebook by Members.
Specifically, the Exchange believes that market participants that are
members of more than one Nasdaq market will benefit from the ability to
compare Rulebooks.
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\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(5).
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The Exchange is not substantively amending rule text unless noted
otherwise within this rule change. The renumbering, re-lettering,
deleting reserved rules, amending cross-references and other minor
technical changes will bring greater transparency to ISE's Rules. The
Exchange intends to file other rule change to relocate Affiliated
Exchange Rulebooks to relocate corresponding rules into the same
location in each Rulebook for ease of reference. The Exchange believes
its proposal will benefit investors and the general public by
increasing the transparency of its Rulebook and promoting easy
comparisons among the various Nasdaq Rulebooks.
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. The Exchange believes that the
proposed amendments do not impose an undue burden on competition
because the amendments to relocate the Rules are non-substantive. This
rule change is intended to bring greater clarity to the Exchange's
Rules. Renumbering, re-lettering, deleting reserved rules and amending
cross-references will bring greater transparency to ISE's Rules.
[[Page 29573]]
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 \14\ and Rule 19b-
4(f)(6) thereunder.\15\
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\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its 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 pursuant to Rule 19b-4(f)(6) under the
Act \16\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \17\ 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 so
that the proposed rule change may become operative upon filing. As the
proposed rule change raises no novel issues and is largely
organizational, the Commission believes that waiver of the 30-day
operative delay is consistent with the protection of investors and the
public interest. Accordingly, the Commission hereby waives the
operative delay and designates the proposed rule change operative upon
filing.\18\
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\16\ 17 CFR 240.19b-4(f)(6).
\17\ 17 CFR 240.19b-4(f)(6)(iii).
\18\ For purposes only of waiving the 30-day operative delay,
the Commission also 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 change 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 (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-ISE-2019-17 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-2019-17. 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 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-2019-17 and should be submitted on
or before July 15, 2019.
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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Vanessa A. Countryman,
Acting Secretary.
[FR Doc. 2019-13305 Filed 6-21-19; 8:45 am]
BILLING CODE 8011-01-P
