Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Temporarily Extend the Filing Requirements for Certain Written Reports, Currently Due April 1, 2020 Pursuant to Options 10, Section 7, to June 1, 2020, 19198-19200 [2020-07080]
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19198
Federal Register / Vol. 85, No. 66 / Monday, April 6, 2020 / Notices
proposed rule change operative upon
filing.17
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.
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–2020–029 and
should be submitted on or before April
27, 2020.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
J. Matthew DeLesDernier,
Assistant Secretary.
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
CBOE–2020–029 on the subject line.
SECURITIES AND EXCHANGE
COMMISSION
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–CBOE–2020–029. 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
17 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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[FR Doc. 2020–07084 Filed 4–3–20; 8:45 am]
BILLING CODE 8011–01–P
[Release No. 34–88524; File No. SR–ISE–
2020–14]
Self-Regulatory Organizations; Nasdaq
ISE, LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Temporarily Extend
the Filing Requirements for Certain
Written Reports, Currently Due April 1,
2020 Pursuant to Options 10, Section
7, to June 1, 2020
March 31, 2020.
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 March 27,
2020, Nasdaq ISE, LLC (‘‘ISE’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to temporarily
extend the filing requirements for
certain written reports, currently due
April 1, 2020 pursuant to Options 10,
Section 7, to June 1, 2020.
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.
18 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
PO 00000
Frm 00067
Fmt 4703
Sfmt 4703
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
Given current market conditions, the
Exchange proposes to provide its
members temporary relief from filing
certain supervision-related reports
pursuant to Options 10, Section 7
(Supervision of Accounts).3
In December 2019, COVID–19 began
to spread and disrupt company
operations and supply chains and
impact consumers and investors,
resulting in a dramatic slowdown in
production and spending.4 By March
11, 2020, the World Health Organization
characterized COVID–19 as a
pandemic.5 To slow the spread of the
disease, federal and state officials
implemented social-distancing
measures, placed significant limitations
on large gatherings, limited travel, and
closed non-essential businesses. These
3 The Exchange notes that ISE Options 10,
including Section 7, is incorporated by reference
into the rulebooks of Nasdaq GEMX, LLC (‘‘GEMX’’)
and Nasdaq MRX, LLC (‘‘MRX’’). As such, the
amendments to ISE Options 10, Section 7 proposed
herein will also impact GEMX and MRX Options
10, Section 7.
4 See, e.g., Chairman Jay Clayton, Proposed
Amendments to Modernize and Enhance Financial
Disclosures; Other Ongoing Disclosure
Modernization Initiatives; Impact of the
Coronavirus; Environmental and Climate-Related
Disclosure (Jan. 30, 2020), available at https://
www.sec.gov/news/public-statement/clayton-mda2020-01-30. (‘‘Yesterday, I asked the staff to monitor
and, to the extent necessary or appropriate, provide
guidance and other assistance to issuers and other
market participants regarding disclosures related to
the current and potential effects of the coronavirus.
We recognize that such effects may be difficult to
assess or predict with meaningful precision both
generally and as an industry- or issuer-specific
basis. This is an uncertain issue where actual effects
will depend on many factors beyond the control
and knowledge of issuers.’’).
5 See WHO Director-General’s Opening Remarks
at the Media Briefing on COVID–19 (March 11,
2020), available at https://www.who.int/dg/
speeches/detail/who-director-general-s-openingremarks-at-the-media-briefing-on-covid-19---11march-2020.
E:\FR\FM\06APN1.SGM
06APN1
Federal Register / Vol. 85, No. 66 / Monday, April 6, 2020 / Notices
jbell on DSKJLSW7X2PROD with NOTICES
measures have affected the U.S.
markets.6 In the United States, Level 1
market wide circuit breaker halts were
triggered on March 9, March 12, March
16, and March 18, 2020. While markets
have seen significant declines,
governments around the world are
undertaking efforts to stabilize the
economy and assist affected companies
and their employees.7
Amidst this market uncertainty, the
Exchange is seeking to address potential
challenges that members may face in
timely meeting their obligations to
submit to the Exchange annual
supervision-related reports under
Options 10, Sections 7(g) and (h)
(‘‘Supervision Reporting
Requirements’’), especially in light of
unforeseen and uncertain demands on
resources required to respond to
COVID–19. Options 10, Section 7(g)
requires each Exchange member that
conducts a non-member customer
business to submit to the Exchange a
written report on the member’s
supervision and compliance effort
during the preceding year and on the
adequacy of the member’s ongoing
compliance processes and procedures.
Each member that conducts a public
customer options business is also
required to specifically include its
options compliance program in the
report.8 The Section 7(g) report is due
on April 1 of each year. Options 10,
Section 7(h) requires that each member
submit, by April 1 of each year, a copy
of the Section 7(g) report to one or more
control persons or, if the member has no
control person, to the audit committee
of its board of directors or its equivalent
committee or group.9
Accordingly, the Exchange proposes
to provide temporary relief for members
from the Supervision Reporting
Requirements by extending the April 1,
2020 filing deadlines described above to
June 1, 2020. The Exchange believes
that this temporary relief will permit
members to focus on running their
6 ‘‘Analysts showed that we saw the fastest
‘correction’ in history (down 10% from a high),
occurring in a matter of days. In the last week of
February, the Dow fell 12.36% with notional
trading of $3.6 trillion.’’ See Phil Mackintosh,
Putting the Recent Volatility in Perspective,
available at https://www.nasdaq.com/articles/
putting-the-recent-volatility-in-perspective-2020-0305.
7 See, e.g., the list of actions undertaken by the
Board of Governors of the Federal Reserve System
at https://www.federalreserve.gov/covid-19.htm. See
also Families First Coronavirus Response Act,
Public Law 116–127.
8 The report shall include, but not be limited to,
the information set out in Options 10, Section
7(g)(1)–(6).
9 See Options 10, Section 7(h) for the meaning of
the term ‘‘control person’’ and requirements in the
case of a control person that is an organization.
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17:47 Apr 03, 2020
Jkt 250001
businesses and the immediate health
crisis caused by the COVID–19
pandemic, including its impact on their
employees, customers, and
communities.
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. As a
result of uncertainty related to the
ongoing spread of the COVID–19 virus,
the U.S. exchanges are experiencing
unprecedented market volatility. The
proposed rule change would allow the
Exchange to provide temporary relief for
members from the Supervision
Reporting Requirements, which
currently requires members to provide
written reports to the Exchange by April
1, 2020, and extend that deadline to
June 1, 2020. The Exchange believes
that this temporary relief is necessary
and appropriate in the public interest,
and consistent with the protection of
investors, given the unforeseen and
uncertain challenges, including
business continuity implementation and
market volatility, posed by COVID–19 to
members that must comply with the
Supervision Reporting Requirements.
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
proposed rule change is not designed to
address any competitive issues but
rather to provide temporary relief for all
members that are required to comply
with the Supervision Reporting
Requirements.
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
10 15
11 15
PO 00000
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
Frm 00068
Fmt 4703
Sfmt 4703
19199
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 12 and
subparagraph (f)(6) of Rule 19b–4
thereunder.13
A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
Act 14 normally does not become
operative for 30 days after the date of its
filing. However, Rule 19b–4(f)(6)(iii) 15
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. The Commission
notes that the proposed rule change
would allow the Exchange, in light of
the COVID–19 pandemic, to provide
temporary relief for members by
extending the deadline for written
reports pursuant to the Supervision
Reporting Requirements from April 1,
2020 to June 1, 2020. 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.16
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
12 15
U.S.C. 78s(b)(3)(A).
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 Commission has waived this
requirement.
14 17 CFR 240.19b–4(f)(6).
15 17 CFR 240.19b–4(f)(6)(iii).
16 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).
13 17
E:\FR\FM\06APN1.SGM
06APN1
19200
Federal Register / Vol. 85, No. 66 / Monday, April 6, 2020 / Notices
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
ISE–2020–14 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.
jbell on DSKJLSW7X2PROD with NOTICES
All submissions should refer to File
Number SR–ISE–2020–14. 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–2020–14 and should be
submitted on or before April 27, 2020.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
J. Matthew DeLesDernier,
Assistant Secretary.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–88526; File No. SR–CBOE–
2020–024]
Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Relating To Amend Its
Fees Schedule
March 31, 2020.
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 March 23,
2020, Cboe Exchange, Inc. (the
‘‘Exchange’’ or ‘‘Cboe Options’’) 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.
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
its fees schedule. 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/CBOELegalRegulatory
Home.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.
[FR Doc. 2020–07080 Filed 4–3–20; 8:45 am]
BILLING CODE 8011–01–P
1 15
17 17
CFR 200.30–3(a)(12).
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17:47 Apr 03, 2020
2 17
Jkt 250001
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00069
Fmt 4703
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend
Footnote 12 of the Fees Schedule, which
governs pricing changes in the event the
Exchange trading floor becomes
inoperable. In the event the trading floor
becomes inoperable, the Exchange will
continue to operate in a screen-based
only environment using a floorless
configuration of the System that is
operational while the trading floor
facility is inoperable. The Exchange
would operate using that configuration
only until the Exchange’s trading floor
facility became operational. Open
outcry trading would not be available in
the event the trading floor becomes
inoperable. Particularly, the Exchange
proposes to incorporate into Footnote
12, changes related to Related Future
Cross (‘‘RFC’’) transactions.
By way of background, the Exchange
recently adopted Rule 5.24(e)(1)(D),
which provides that in the event the
trading floor is inoperable, a Trading
Permit Holder (‘‘TPH’’) may execute an
RFC order, which is comprised of an
SPX or VIX option combo order coupled
with a contra-side order or orders
totaling an equal number of option
combo orders, which is identified to the
Exchange as being part of an exchange
of option contracts for related futures
positions.3 Particularly, Rule
5.24(e)(1)(D) permits unexposed crosses
of riskless packaged transactions (i.e.,
RFC transactions) which include SPX/
SPXW or VIX option combos offset by
futures contracts. The proposal to allow
RFC transactions was adopted to
replicate functionality that is otherwise
available when the Exchange is
operating with an open outcry
environment. RFC transactions are
intended to provide means for
transferring risk from futures positions
into related combo positions for
purposes of reducing capital
requirements on portfolios held at bank
clearing firms.
The Exchange first proposes to
provide that in the event the trading
floor becomes inoperable, the Exchange
shall waive the SPX and SPXW
Execution Surcharges for SPX and
SPXW volume executed as an RFC order
for the duration of time the Exchange
operates in a screen-based only
environment. The Exchange currently
assesses a SPX Execution Surcharge of
$0.21 per contract and a SPXW
Execution Surcharge of $0.13 per
3 See
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SR–CBOE–2020–023.
06APN1
]]>Agencies
[Federal Register Volume 85, Number 66 (Monday, April 6, 2020)]
[Notices]
[Pages 19198-19200]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-07080]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-88524; File No. SR-ISE-2020-14]
Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Temporarily
Extend the Filing Requirements for Certain Written Reports, Currently
Due April 1, 2020 Pursuant to Options 10, Section 7, to June 1, 2020
March 31, 2020.
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 March 27, 2020, Nasdaq ISE, LLC (``ISE'' or ``Exchange'') filed with
the Securities and Exchange Commission (``Commission'') the proposed
rule change as described in Items I and II below, which Items have been
prepared by the Exchange. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\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 temporarily extend the filing requirements
for certain written reports, currently due April 1, 2020 pursuant to
Options 10, Section 7, to June 1, 2020.
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
Given current market conditions, the Exchange proposes to provide
its members temporary relief from filing certain supervision-related
reports pursuant to Options 10, Section 7 (Supervision of Accounts).\3\
---------------------------------------------------------------------------
\3\ The Exchange notes that ISE Options 10, including Section 7,
is incorporated by reference into the rulebooks of Nasdaq GEMX, LLC
(``GEMX'') and Nasdaq MRX, LLC (``MRX''). As such, the amendments to
ISE Options 10, Section 7 proposed herein will also impact GEMX and
MRX Options 10, Section 7.
---------------------------------------------------------------------------
In December 2019, COVID-19 began to spread and disrupt company
operations and supply chains and impact consumers and investors,
resulting in a dramatic slowdown in production and spending.\4\ By
March 11, 2020, the World Health Organization characterized COVID-19 as
a pandemic.\5\ To slow the spread of the disease, federal and state
officials implemented social-distancing measures, placed significant
limitations on large gatherings, limited travel, and closed non-
essential businesses. These
[[Page 19199]]
measures have affected the U.S. markets.\6\ In the United States, Level
1 market wide circuit breaker halts were triggered on March 9, March
12, March 16, and March 18, 2020. While markets have seen significant
declines, governments around the world are undertaking efforts to
stabilize the economy and assist affected companies and their
employees.\7\
---------------------------------------------------------------------------
\4\ See, e.g., Chairman Jay Clayton, Proposed Amendments to
Modernize and Enhance Financial Disclosures; Other Ongoing
Disclosure Modernization Initiatives; Impact of the Coronavirus;
Environmental and Climate-Related Disclosure (Jan. 30, 2020),
available at https://www.sec.gov/news/public-statement/clayton-mda-2020-01-30. (``Yesterday, I asked the staff to monitor and, to the
extent necessary or appropriate, provide guidance and other
assistance to issuers and other market participants regarding
disclosures related to the current and potential effects of the
coronavirus. We recognize that such effects may be difficult to
assess or predict with meaningful precision both generally and as an
industry- or issuer-specific basis. This is an uncertain issue where
actual effects will depend on many factors beyond the control and
knowledge of issuers.'').
\5\ See WHO Director-General's Opening Remarks at the Media
Briefing on COVID-19 (March 11, 2020), available at https://www.who.int/dg/speeches/detail/who-director-general-s-opening-remarks-at-the-media-briefing-on-covid-19---11-march-2020.
\6\ ``Analysts showed that we saw the fastest `correction' in
history (down 10% from a high), occurring in a matter of days. In
the last week of February, the Dow fell 12.36% with notional trading
of $3.6 trillion.'' See Phil Mackintosh, Putting the Recent
Volatility in Perspective, available at https://www.nasdaq.com/articles/putting-the-recent-volatility-in-perspective-2020-03-05.
\7\ See, e.g., the list of actions undertaken by the Board of
Governors of the Federal Reserve System at https://www.federalreserve.gov/covid-19.htm. See also Families First
Coronavirus Response Act, Public Law 116-127.
---------------------------------------------------------------------------
Amidst this market uncertainty, the Exchange is seeking to address
potential challenges that members may face in timely meeting their
obligations to submit to the Exchange annual supervision-related
reports under Options 10, Sections 7(g) and (h) (``Supervision
Reporting Requirements''), especially in light of unforeseen and
uncertain demands on resources required to respond to COVID-19. Options
10, Section 7(g) requires each Exchange member that conducts a non-
member customer business to submit to the Exchange a written report on
the member's supervision and compliance effort during the preceding
year and on the adequacy of the member's ongoing compliance processes
and procedures. Each member that conducts a public customer options
business is also required to specifically include its options
compliance program in the report.\8\ The Section 7(g) report is due on
April 1 of each year. Options 10, Section 7(h) requires that each
member submit, by April 1 of each year, a copy of the Section 7(g)
report to one or more control persons or, if the member has no control
person, to the audit committee of its board of directors or its
equivalent committee or group.\9\
---------------------------------------------------------------------------
\8\ The report shall include, but not be limited to, the
information set out in Options 10, Section 7(g)(1)-(6).
\9\ See Options 10, Section 7(h) for the meaning of the term
``control person'' and requirements in the case of a control person
that is an organization.
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Accordingly, the Exchange proposes to provide temporary relief for
members from the Supervision Reporting Requirements by extending the
April 1, 2020 filing deadlines described above to June 1, 2020. The
Exchange believes that this temporary relief will permit members to
focus on running their businesses and the immediate health crisis
caused by the COVID-19 pandemic, including its impact on their
employees, customers, and communities.
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. As a result of uncertainty related to the ongoing spread of
the COVID-19 virus, the U.S. exchanges are experiencing unprecedented
market volatility. The proposed rule change would allow the Exchange to
provide temporary relief for members from the Supervision Reporting
Requirements, which currently requires members to provide written
reports to the Exchange by April 1, 2020, and extend that deadline to
June 1, 2020. The Exchange believes that this temporary relief is
necessary and appropriate in the public interest, and consistent with
the protection of investors, given the unforeseen and uncertain
challenges, including business continuity implementation and market
volatility, posed by COVID-19 to members that must comply with the
Supervision Reporting Requirements.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
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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 proposed rule change is not
designed to address any competitive issues but rather to provide
temporary relief for all members that are required to comply with the
Supervision Reporting Requirements.
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 \12\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\13\
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\12\ 15 U.S.C. 78s(b)(3)(A).
\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 Commission has waived this requirement.
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A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \14\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \15\ 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. The
Commission notes that the proposed rule change would allow the
Exchange, in light of the COVID-19 pandemic, to provide temporary
relief for members by extending the deadline for written reports
pursuant to the Supervision Reporting Requirements from April 1, 2020
to June 1, 2020. 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.\16\
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\14\ 17 CFR 240.19b-4(f)(6).
\15\ 17 CFR 240.19b-4(f)(6)(iii).
\16\ 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.
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.
[[Page 19200]]
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-2020-14 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-2020-14. 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-2020-14 and should be submitted on
or before April 27, 2020.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-07080 Filed 4-3-20; 8:45 am]
BILLING CODE 8011-01-P
