Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Options 2 (Options Market Participants) and Options 3 (Options Trading Rules), 35436-35438 [2019-15563]

Download as PDF 35436 Federal Register / Vol. 84, No. 141 / Tuesday, July 23, 2019 / Notices B. Self-Regulatory Organization’s Statement on Burden on Competition jspears on DSK30JT082PROD with NOTICES 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 does not believe that the proposed rule change will impose an unnecessary burden on intramarket competition because it would apply equally to all similarly situated TPHs. The Exchange also notes that, should the proposed changes make the Exchange more attractive for trading, market participants trading on other exchanges can always elect to become TPHs on the Exchange to take advantage of the trading opportunities. Furthermore, the proposed rule change does not address any competitive issues and ultimately, the target of the Exchange’s proposal is to reduce risk for Clearing TPHs under the current give up model. Clearing firms make financial decisions based on risk and reward, and while it is generally in their beneficial interest to clear transactions for market participants in order to generate profit, it is the Exchange’s understanding from SIFMA and clearing firms that the current process can create significant risk when the clearing firm can be given up on any market participant’s transaction, even where there is no prior customer relationship or authorization for that designated transaction. In the absence of a mechanism that governs a market participant’s use of a Clearing TPH’s services, the Exchange’s proposal may indirectly facilitate the ability of a Clearing TPH to manage their existing customer relationships while continuing to allow market participant choice in broker execution services. While Clearing TPHs may compete with executing brokers for order flow, the Exchange does not believe this proposal imposes an undue burden on competition. Rather, the Exchange believes that the proposed rule change balances the need for Clearing TPHs to manage risks and allows them to address outlier behavior from executing brokers while still allowing freedom of choice to select an executing broker. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange neither solicited nor received written comments on the proposed rule change. VerDate Sep<11>2014 16:43 Jul 22, 2019 Jkt 247001 III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: A. Significantly affect the protection of investors or the public interest; B. impose any significant burden on competition; and C. 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 15 and Rule 19b–4(f)(6) 16 thereunder. 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 will 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 rule-comments@ sec.gov. Please include File Number SR– CBOE–2019–036 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–CBOE–2019–036. 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–CBOE–2019–036 and should be submitted on or before August 13, 2019. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 Jill M. Peterson, Assistant Secretary. [FR Doc. 2019–15559 Filed 7–22–19; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–86398; File No. SR–ISE– 2019–20] Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Options 2 (Options Market Participants) and Options 3 (Options Trading Rules) July 17, 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 July 10, 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, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 17 17 15 15 U.S.C. 78s(b)(3)(A). 16 17 CFR 240.19b–4(f)(6). PO 00000 Frm 00068 Fmt 4703 Sfmt 4703 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\23JYN1.SGM 23JYN1 Federal Register / Vol. 84, No. 141 / Tuesday, July 23, 2019 / Notices I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Options 2 (Options Market Participants) and Options 3 (Options Trading Rules) relating to certain order types. 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 jspears on DSK30JT082PROD with NOTICES 1. Purpose The purpose of the proposed rule change is amend Options 2 (Options Market Participants) and Options 3 (Options Trading Rules) relating to certain order types. Each change is described in more detail below. Stopped Orders The Exchange proposes to amend its rules to remove Stopped Orders as an order type. A Stopped Order is a limit order that meets the requirements of Options 5, Section 2(b)(8).3 As provided in Options 5, Section 2(b)(8), a ‘‘stopped order’’ is defined as an order for which, at the time of receipt for the order, a Member had guaranteed an execution at no worse than a specified price, where: (i) The stopped order was for the account of a Customer; (ii) the Customer agreed to the specified price on an order-by-order basis; and (iii) the price of the Trade-Through was, for a stopped buy order, lower than the national Best Bid in the options series at the time of execution, or, for a stopped sell order, higher than the national Best Offer in the options series at the time of execution. To execute Stopped Orders, 3 See Options 3, Section 7(b)(5). The current rule text erroneously refers to Options 1, Section 2(b)(8) instead of Options 5, Section 2(b)(8). VerDate Sep<11>2014 16:43 Jul 22, 2019 Jkt 247001 Members must enter them into the Facilitation Mechanism or Solicited Order Mechanism pursuant to Options 3, Section 11.4 Due to a lack of demand for Stopped Orders, the Exchange plans to decommission the functionality supporting this order type.5 To reflect this elimination, the Exchange proposes to delete all references to Stopped Orders as follows: • Options 2, Section 6(a), which currently allows Market Makers to enter all order types in the options classes to which they are appointed, except for Stopped Orders, Reserve Orders, and Customer Cross Orders. • Options 3, Section 7(b)(5), which defines a Stopped Order. The Exchange proposes to implement the amendments relating to Stopped Orders by November 1, 2019. All-Or-None Orders The Exchange also proposes to amend Options 3, Section 8 (Opening) to remove specific references to the manner in which All-Or-None Orders 6 (‘‘AONs’’) will be treated in the Exchange’s opening process. The Exchange previously amended its rules to provide that an AON may only be entered into the System with a time-inforce designation of Immediate-OrCancel,7 and deleted related rule text that described an AON as persisting in the Exchange’s order book.8 The Exchange, however, inadvertently did not remove such AON references from the opening rule in Options 3, Section 8. At the time the Exchange’s opening process was adopted, AONs were not restricted and could trade as a limit or 4 Stopped orders were originally introduced on the Exchange as a Trade-Through exception under the Options Order Protection and Locked/Crossed Market Plan (the ‘‘Plan’’). See Securities Exchange Act Release No. 60559 (August 21, 2009), 74 FR 44425 (August 28, 2009) (SR–ISE–2009–27) (stating that customer stopped orders permit broker-dealers to execute large orders over time at a price agreed upon by a customer, even though the price of the option may change before the order is executed in its entirety). The Exchange subsequently amended its rules to implement the Trade-Through exception for stopped orders as an order type. See Securities Exchange Act Release No. 62027 (May 4, 2010), 75 FR 25897 (May 10, 2010) (SR–ISE–2010–28). 5 No member has used this order type since the Exchange’s previous trading system migrated over to Nasdaq INET technology in 2017. 6 An All-Or-None Order is a limit or market order that is to be executed in its entirety or not at all. An All-Or-None Order may only be entered as an Immediate-or-Cancel Order. See Options 3, Section 7(c). 7 An Immediate-Or-Cancel Order is a limit order that is to be executed in whole or in part upon receipt. Any portion not so executed is to be treated as cancelled. See Options 3, Section 7(b)(3). 8 See Securities Exchange Act Release No. 80432 (April 11, 2017), 82 FR 18191 (April 17, 2017) (SR– ISE–2017–03). PO 00000 Frm 00069 Fmt 4703 Sfmt 4703 35437 market order to be executed in its entirety or not at all.9 With the amendments in SR–ISE–2017–03, an AON does not persist in the order book and is therefore treated the same as any other Immediate-or-Cancel Order. As such, the carve-outs specified in Section 8(b), (g) and (j)(6) are unnecessary since an All-or-None Order would execute immediately or cancel similar to other orders which trade in the same manner. The Exchange believes removing these references will eliminate confusion. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,10 in general, and furthers the objectives of Section 6(b)(5) of the Act,11 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. The Exchange believes that removing Stopped Orders as an order type is consistent with the Act because it would simplify the functionality available on the Exchange and reduce the complexity of its order types. The Exchange’s affiliated options markets, Nasdaq BX (‘‘BX’’), The Nasdaq Options Market (‘‘NOM’’), and Nasdaq PHLX (‘‘Phlx’’) do not offer stopped orders as an order type. The Exchange also believes that it is consistent with the Act to remove unnecessary and confusing references to AONs in the opening rule set forth in Options 3, Section 8 as AONs will now immediately trade or cancel. The Exchange originally specified the manner in which AONs would trade in the opening because at the time the opening process was adopted, this order type traded differently as compared to other order types. That distinction has become unnecessary because AONs trade the same as other Immediate-orCancel Orders. Updating Options 3, Section 8 to remove an unnecessary and inaccurate distinction will protect investors and the public interest by clarifying the rule. 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 9 See Securities Exchange Act Release No. 80225 (March 13, 2017), 82 FR 14243 (March 17, 2017) (SR–ISE–2017–02). 10 15 U.S.C. 78f(b). 11 15 U.S.C. 78f(b)(5). E:\FR\FM\23JYN1.SGM 23JYN1 35438 Federal Register / Vol. 84, No. 141 / Tuesday, July 23, 2019 / Notices proposed rule change would allow the Exchange to remove an order type that no Member uses today, and eliminate unnecessary and inaccurate references to AONs within its opening rule, thereby making clear the order types available for trading on the Exchange and reducing potential confusion. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act 12 and subparagraph (f)(6) of Rule 19b–4 thereunder.13 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: jspears on DSK30JT082PROD with NOTICES 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–2019–20 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–2019–20. 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–2019–20 and should be submitted on or before August 13, 2019. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.14 Jill M. Peterson, Assistant Secretary. [FR Doc. 2019–15563 Filed 7–22–19; 8:45 am] BILLING CODE 8011–01–P 12 15 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file 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. 13 17 VerDate Sep<11>2014 16:43 Jul 22, 2019 Jkt 247001 PO 00000 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–86400; File No. SR–CBOE– 2019–035] Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing of a Proposed Rule Change To Amend Rule 6.49A Concerning Off-Floor Position Transfers Including RWA Transfers July 17, 2019. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on July 3, 2019, Cboe Exchange, Inc. (the ‘‘Exchange’’ or ‘‘Cboe Options’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Cboe Exchange, Inc. (the ‘‘Exchange’’ or ‘‘Cboe Options’’) proposes to amend Rule 6.49A. The text of the proposed rule change is provided in Exhibit 5. The text of the proposed rule change is also available on the Exchange’s website (https://www.cboe.com/ AboutCBOE/CBOELegal RegulatoryHome.aspx), at the Exchange’s Office of the Secretary, 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. 1 15 14 17 CFR 200.30–3(a)(12). Frm 00070 Fmt 4703 Sfmt 4703 2 17 E:\FR\FM\23JYN1.SGM U.S.C. 78s(b)(1). CFR 240.19b–4. 23JYN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 84, Number 141 (Tuesday, July 23, 2019)]
[Notices]
[Pages 35436-35438]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-15563]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-86398; File No. SR-ISE-2019-20]


Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend Options 2 
(Options Market Participants) and Options 3 (Options Trading Rules)

July 17, 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 July 10, 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, II, and III below, which 
Items have been prepared by the Exchange. The Commission is publishing 
this notice to solicit comments on the proposed rule change from 
interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.

---------------------------------------------------------------------------

[[Page 35437]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Options 2 (Options Market 
Participants) and Options 3 (Options Trading Rules) relating to certain 
order types.
    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 the proposed rule change is amend Options 2 (Options 
Market Participants) and Options 3 (Options Trading Rules) relating to 
certain order types. Each change is described in more detail below.
Stopped Orders
    The Exchange proposes to amend its rules to remove Stopped Orders 
as an order type. A Stopped Order is a limit order that meets the 
requirements of Options 5, Section 2(b)(8).\3\ As provided in Options 
5, Section 2(b)(8), a ``stopped order'' is defined as an order for 
which, at the time of receipt for the order, a Member had guaranteed an 
execution at no worse than a specified price, where: (i) The stopped 
order was for the account of a Customer; (ii) the Customer agreed to 
the specified price on an order-by-order basis; and (iii) the price of 
the Trade-Through was, for a stopped buy order, lower than the national 
Best Bid in the options series at the time of execution, or, for a 
stopped sell order, higher than the national Best Offer in the options 
series at the time of execution. To execute Stopped Orders, Members 
must enter them into the Facilitation Mechanism or Solicited Order 
Mechanism pursuant to Options 3, Section 11.\4\
---------------------------------------------------------------------------

    \3\ See Options 3, Section 7(b)(5). The current rule text 
erroneously refers to Options 1, Section 2(b)(8) instead of Options 
5, Section 2(b)(8).
    \4\ Stopped orders were originally introduced on the Exchange as 
a Trade-Through exception under the Options Order Protection and 
Locked/Crossed Market Plan (the ``Plan''). See Securities Exchange 
Act Release No. 60559 (August 21, 2009), 74 FR 44425 (August 28, 
2009) (SR-ISE-2009-27) (stating that customer stopped orders permit 
broker-dealers to execute large orders over time at a price agreed 
upon by a customer, even though the price of the option may change 
before the order is executed in its entirety). The Exchange 
subsequently amended its rules to implement the Trade-Through 
exception for stopped orders as an order type. See Securities 
Exchange Act Release No. 62027 (May 4, 2010), 75 FR 25897 (May 10, 
2010) (SR-ISE-2010-28).
---------------------------------------------------------------------------

    Due to a lack of demand for Stopped Orders, the Exchange plans to 
decommission the functionality supporting this order type.\5\ To 
reflect this elimination, the Exchange proposes to delete all 
references to Stopped Orders as follows:
---------------------------------------------------------------------------

    \5\ No member has used this order type since the Exchange's 
previous trading system migrated over to Nasdaq INET technology in 
2017.
---------------------------------------------------------------------------

     Options 2, Section 6(a), which currently allows Market 
Makers to enter all order types in the options classes to which they 
are appointed, except for Stopped Orders, Reserve Orders, and Customer 
Cross Orders.
     Options 3, Section 7(b)(5), which defines a Stopped Order.
    The Exchange proposes to implement the amendments relating to 
Stopped Orders by November 1, 2019.
All-Or-None Orders
    The Exchange also proposes to amend Options 3, Section 8 (Opening) 
to remove specific references to the manner in which All-Or-None Orders 
\6\ (``AONs'') will be treated in the Exchange's opening process. The 
Exchange previously amended its rules to provide that an AON may only 
be entered into the System with a time-in-force designation of 
Immediate-Or-Cancel,\7\ and deleted related rule text that described an 
AON as persisting in the Exchange's order book.\8\ The Exchange, 
however, inadvertently did not remove such AON references from the 
opening rule in Options 3, Section 8. At the time the Exchange's 
opening process was adopted, AONs were not restricted and could trade 
as a limit or market order to be executed in its entirety or not at 
all.\9\ With the amendments in SR-ISE-2017-03, an AON does not persist 
in the order book and is therefore treated the same as any other 
Immediate-or-Cancel Order. As such, the carve-outs specified in Section 
8(b), (g) and (j)(6) are unnecessary since an All-or-None Order would 
execute immediately or cancel similar to other orders which trade in 
the same manner. The Exchange believes removing these references will 
eliminate confusion.
---------------------------------------------------------------------------

    \6\ An All-Or-None Order is a limit or market order that is to 
be executed in its entirety or not at all. An All-Or-None Order may 
only be entered as an Immediate-or-Cancel Order. See Options 3, 
Section 7(c).
    \7\ An Immediate-Or-Cancel Order is a limit order that is to be 
executed in whole or in part upon receipt. Any portion not so 
executed is to be treated as cancelled. See Options 3, Section 
7(b)(3).
    \8\ See Securities Exchange Act Release No. 80432 (April 11, 
2017), 82 FR 18191 (April 17, 2017) (SR-ISE-2017-03).
    \9\ See Securities Exchange Act Release No. 80225 (March 13, 
2017), 82 FR 14243 (March 17, 2017) (SR-ISE-2017-02).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\10\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\11\ 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.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that removing Stopped Orders as an order type 
is consistent with the Act because it would simplify the functionality 
available on the Exchange and reduce the complexity of its order types. 
The Exchange's affiliated options markets, Nasdaq BX (``BX''), The 
Nasdaq Options Market (``NOM''), and Nasdaq PHLX (``Phlx'') do not 
offer stopped orders as an order type.
    The Exchange also believes that it is consistent with the Act to 
remove unnecessary and confusing references to AONs in the opening rule 
set forth in Options 3, Section 8 as AONs will now immediately trade or 
cancel. The Exchange originally specified the manner in which AONs 
would trade in the opening because at the time the opening process was 
adopted, this order type traded differently as compared to other order 
types. That distinction has become unnecessary because AONs trade the 
same as other Immediate-or-Cancel Orders. Updating Options 3, Section 8 
to remove an unnecessary and inaccurate distinction will protect 
investors and the public interest by clarifying the rule.

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

[[Page 35438]]

proposed rule change would allow the Exchange to remove an order type 
that no Member uses today, and eliminate unnecessary and inaccurate 
references to AONs within its opening rule, thereby making clear the 
order types available for trading on the Exchange and reducing 
potential confusion.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \12\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\13\
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file 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.
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-ISE-2019-20 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-2019-20. 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-2019-20 and should be submitted on 
or before August 13, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-15563 Filed 7-22-19; 8:45 am]
 BILLING CODE 8011-01-P

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