Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend a Pilot on the Nasdaq 100 Reduced Value Index, 22768-22770 [2020-08590]
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Federal Register / Vol. 85, No. 79 / Thursday, April 23, 2020 / Notices
comment in the Federal Register on
October 23, 2019.3
On December 5, 2019, pursuant to
Section 19(b)(2) of the Act,4 the
Commission designated a longer period
within which to approve the proposed
rule change, disapprove the proposed
rule change, or institute proceedings to
determine whether to disapprove the
proposed rule change.5 On January 17,
2020, the Commission instituted
proceedings under Section 19(b)(2)(B) of
the Act 6 to determine whether to
approve or disapprove the proposed
rule change.7 The Commission has
received no comment letters on the
proposal.
Section 19(b)(2) of the Act 8 provides
that, after initiating disapproval
proceedings, the Commission shall issue
an order approving or disapproving the
proposed rule change not later than 180
days after the date of publication of
notice of filing of the proposed rule
change. The Commission may extend
the period for issuing an order
approving or disapproving the proposed
rule change, however, by not more than
60 days if the Commission determines
that a longer period is appropriate and
publishes the reasons for such
determination. The date of publication
of notice of filing of the proposed rule
change was October 23, 2019. April 20,
2020, is 180 days from that date, and
June 19, 2020, is 240 days from that
date.
The Commission finds it appropriate
to designate a longer period within
which to issue an order approving or
disapproving the proposed rule change
so that it has sufficient time to consider
this proposed rule change. Accordingly,
the Commission, pursuant to Section
19(b)(2) of the Act,9 designates June 19,
2020, as the date by which the
Commission shall either approve or
disapprove the proposed rule change
(File No. SR–NYSE–2019–54).
lotter on DSKBCFDHB2PROD with NOTICES
3 See
Securities Exchange Act Release No. 87329
(Oct. 17, 2019), 84 FR 56864 (‘‘Notice’’).
4 15 U.S.C. 78s(b)(2).
5 See Securities Exchange Act Release No. 87671,
84 FR 67763 (Dec. 11, 2019).
6 15 U.S.C. 78s(b)(2)(B).
7 See Securities Exchange Act Release No. 88003,
85 FR 4051 (Jan. 23, 2020). Specifically, the
Commission instituted proceedings to allow for
additional analysis of the proposed rule change’s
consistency with Section 6(b)(5) of the Act, which
requires, among other things, that the rules of a
national securities exchange be ‘‘designed to
prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles
of trade,’’ and ‘‘to protect investors and the public
interest.’’ See id. at 4053 (citing 15 U.S.C. 78f(b)(5)).
8 15 U.S.C. 78s(b)(2).
9 Id.
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For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–08593 Filed 4–22–20; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–88683; File No. SR–ISE–
2020–18]
Self-Regulatory Organizations; Nasdaq
ISE, LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Extend a Pilot on the
Nasdaq 100 Reduced Value Index
April 17, 2020.
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 April 16,
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 a proposed
rule to extend the pilot to permit the
listing and trading of options based on
1⁄5 the value of the Nasdaq-100 Index
(‘‘Nasdaq-100’’) currently set to expire
on May 4, 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
10 17
CFR 200.30–3(a)(57).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
PO 00000
Frm 00053
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Sfmt 4703
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
ISE filed a proposed rule change to
permit the listing and trading of index
options on the Nasdaq 100 Reduced
Value Index (‘‘NQX’’) on a twelve
month pilot basis.3
NQX options trade independently of
and in addition to NDX options, and the
NQX options are subject to the same
rules that presently govern the trading
of index options based on the Nasdaq100, including sales practice rules,
margin requirements, trading rules, and
position and exercise limits. Similar to
NDX, NQX options are European-style
and cash-settled, and have a contract
multiplier of 100. The contract
specifications for NQX options mirror in
all respects those of the NDX options
contract listed on the Exchange, except
that NQX options are based on 1⁄5 of the
value of the Nasdaq-100, and are P.M.settled pursuant to Options 4A, Section
12(a)(6).
The Exchange proposes to amend ISE
Options 4A, Section 12(a)(6) to extend
the current NQX pilot period to
November 2, 2020. This pilot was
previously extended with the last
extension through May 4, 2020.4 The
Exchange continues to have sufficient
capacity to handle additional quotations
and message traffic associated with the
proposed listing and trading of NQX
options. In addition, index options are
integrated into the Exchange’s existing
surveillance system architecture and are
thus subject to the relevant surveillance
processes. The Exchange also continues
to have adequate surveillance
procedures to monitor trading in NQX
options thereby aiding in the
maintenance of a fair and orderly
market. Additionally, there is continued
investor interest in these products and
this extension will provide additional
time to collect data related to the pilot.
Pilot Report
The Exchange currently makes public
on its website the data and analysis
previously submitted to the Commission
on the Pilot Program and will continue
to make public any data or analysis it
3 See Securities Exchange Act Release No. 82911
(March 20, 2018), 83 FR 12966 (March 26, 2018)
(SR–ISE–2017–106) (Approval Order).
4 See Securities Exchange Act Release Nos.86071
(June 10, 2019), 84 FR 27822 (June 14, 2019) (SR–
ISE–2019–18); 87379 (October 22, 2019), 84 FR
57793 (October 28, 2019) (SR–ISE–2019–27).
E:\FR\FM\23APN1.SGM
23APN1
Federal Register / Vol. 85, No. 79 / Thursday, April 23, 2020 / Notices
submits under the Pilot Program in the
future. If in the future the Exchange
proposes an additional extension of the
Pilot Program or proposes to make the
Pilot Program permanent, the Exchange
will submit an annual report to the
Commission consistent with the order
approving the establishment of the Pilot
Program at least two months prior to the
expiration date of the Pilot Program.
Conditional on the findings in the Pilot
Report, the Exchange will file with the
Commission a proposal to extend the
pilot program, adopt the pilot program
on a permanent basis or terminate the
pilot.
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2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,5 in general, and
furthers the objectives of Section 6(b)(5)
of the Act,6 in particular, in that it is
designed to promote just and equitable
principles of trade, to remove
impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general to protect investors and the
public interest. By extending the pilot,
the Exchange believes it will attract
order flow to the Exchange, increase the
variety of listed options, and provide a
valuable hedge tool to retail and other
investors. Specifically, the Exchange
believes that the pilot will provide
additional trading and hedging
opportunities for investors while
providing the Commission with data to
monitor for and assess any potential for
adverse market effects of allowing P.M.settlement for NQX options, including
on the underlying component stocks.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. NQX options
would be available for trading to all
market participants and therefore would
not impose an undue burden on intramarket competition. The Exchange
believes that the proposed rule change
will not impose an undue burden on
inter-market competition as this rule
change will continue to facilitate the
listing and trading of a new option
product that will enhance competition
among market participants, to the
benefit of investors and the marketplace.
The continued listing of NQX will
enhance competition by providing
investors with an additional investment
5 15
6 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
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19:28 Apr 22, 2020
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vehicle, in a fully-electronic trading
environment, through which investors
can gain and hedge exposure to the
Nasdaq-100. Furthermore, this product
could offer a competitive alternative to
other existing investment products that
seek to allow investors to gain broad
market exposure. Finally, it is possible
for other exchanges to develop or
license the use of a new or different
index to compete with the Nasdaq-100
and seek Commission approval to list
and trade options on such an index.
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 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 7 and
subparagraph (f)(6) of Rule 19b–4
thereunder.8
A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
Act 9 normally does not become
operative for 30 days after the date of its
filing. However, Rule 19b–4(f)(6)(iii) 10
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 asked
the Commission to waive the 30-day
operative delay so that investors may
continue to trade NQX options listed by
the Exchange as part of the pilot
program on an uninterrupted basis. The
Commission believes that waiving the
30-day operative delay is consistent
with the protection of investors and the
public interest as it will allow the pilot
program to continue uninterrupted,
thereby avoiding investor confusion that
could result from a temporary
interruption in the pilot program.
7 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule19b–
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.
9 17 CFR 240.19b–4(f)(6).
10 17 CFR 240.19b–4(f)(6)(iii).
8 17
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22769
Accordingly, the Commission hereby
waives the operative delay and
designates the proposed rule change
operative upon filing.11
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 rule-comments@
sec.gov. Please include File Number SR–
ISE–2020–18 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–2020–18. 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
11 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).
E:\FR\FM\23APN1.SGM
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Federal Register / Vol. 85, No. 79 / Thursday, April 23, 2020 / Notices
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–2020–18, and should
be submitted on or before May 14, 2020.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
J. Matthew DeLesDernier,
Assistant Secretary.
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–88678; File No. SR–CBOE–
2020–033]
Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Amending Its Fees
Schedule
April 17, 2020.
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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 April 16,
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/
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
19:28 Apr 22, 2020
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 amend Footnote 12 to waive
fees incurred from certain transactions
executed in electronic compression
forums.
By way of background, the Exchange
recently adopted Rule 5.24(e)(1)(E),
which provides that in the event the
trading floor is inoperable, the Exchange
will make available an electronic
‘‘compression forum’’ in the same
manner as an open outcry ‘‘compression
forum’’ as set forth in Rule 5.88, subject
to certain exceptions.3 When the trading
floor is open, the Exchange facilitates
compression forums on the trading floor
at the end of each calendar week,
month, and quarter in which Trading
Permit Holders (‘‘TPHs’’) may reduce
open positions in series of SPX options
in order to mitigate the effects of capital
3 See Securities and Exchange Act Release No.
88490 (March 26, 2020), 85 FR 18318 (April 1,
2020) (SR–CBOE–2020–026).
1 15
VerDate Sep<11>2014
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
[FR Doc. 2020–08590 Filed 4–22–20; 8:45 am]
12 17
AboutCBOE/
CBOELegalRegulatoryHome.aspx), at
the Exchange’s Office of the Secretary,
and at the Commission’s Public
Reference Room.
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constraints on market participants,
which may contribute to continued
depth of liquidity in the SPX options
market.4 The Exchange adopted Rule
5.24(e)(1)(E) to provide for an electronic
forum that replicates the compression
forum that is available when the
Exchange is operating with an open
outcry environment. Particularly, an
electronic compression forum would
continue to provide TPHs an
opportunity to efficiently reduce their
open SPX positions and free up capital
in the event the Exchange must operate
in an all-electronic environment (as it
currently is), which is particularly
important in volatile market conditions.
The Exchange currently waives
transaction fees (and surcharges)
incurred as a result of transactions that
compress or reduce certain open
positions.5 One such waiver in
particular is for transactions involving
SPX and SPXW compression-list
positions executed in a floor
compression forum (pursuant to Rule
5.88).6 Particularly, the Exchange
waives SPX/SPXW transaction fees,
including surcharges, in order to
encourage TPHs to submit compressionlist positions in advance of monthly
compression forums and compress these
positions during compression forums.7
The Exchange wishes to similarly waive
all transaction fees, including any
applicable surcharges (e.g., Index
License Surcharge and SPX/SPXW
Execution Surcharges), for closing
transactions involving SPX and SPXW
compression-list positions executed in
an electronic compression forum
(pursuant to Rule 5.24).
The Exchange believes compression
of these positions may improve market
4 In general, under the floor Compression Forum
process, each month, TPHs may submit to the
Exchange lists of open SPX positions (these
positions are referred to in Rule 5.88 as
‘‘compression-list positions’’) they wish to close
against opposing (long/short) positions of other
TPHs. The Exchange would then aggregate these
positions into a single list to allow TPHs to more
easily identify those positions with counterparty
interest on the Exchange. The Exchange then
provides a forum on the Exchange’s trading floor
during which TPHs could conduct closing-only
transactions in series of SPX options. The Exchange
holds compression forums on the last three trading
days of each calendar month.
5 See CBOE Fees Schedule, Footnote 41.
6 See Cboe Options Fees Schedule, Footnote 41.
The Exchange notes it inadvertently failed to
update the rule references in Footnote 41, including
Rule 5.88, when it relocated the rules upon
migration. See Securities and Exchange Act Release
No. 86772 (August 27, 2019), 84 FR 46069
(September 3, 2019) (SR–CBOE–2019–042). The
Exchange proposes to update those rule references
now.
7 See Cboe Options Fees Schedule, Footnote 41.
A rebate of transaction fees would include the
transaction fee assessed along with any other
surcharges assessed per contract (e.g., the Index
License Surcharge).
E:\FR\FM\23APN1.SGM
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]]>Agencies
[Federal Register Volume 85, Number 79 (Thursday, April 23, 2020)]
[Notices]
[Pages 22768-22770]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-08590]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-88683; File No. SR-ISE-2020-18]
Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Extend a Pilot
on the Nasdaq 100 Reduced Value Index
April 17, 2020.
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 April 16, 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 a proposed rule to extend the pilot to
permit the listing and trading of options based on \1/5\ the value of
the Nasdaq-100 Index (``Nasdaq-100'') currently set to expire on May 4,
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
ISE filed a proposed rule change to permit the listing and trading
of index options on the Nasdaq 100 Reduced Value Index (``NQX'') on a
twelve month pilot basis.\3\
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 82911 (March 20,
2018), 83 FR 12966 (March 26, 2018) (SR-ISE-2017-106) (Approval
Order).
---------------------------------------------------------------------------
NQX options trade independently of and in addition to NDX options,
and the NQX options are subject to the same rules that presently govern
the trading of index options based on the Nasdaq-100, including sales
practice rules, margin requirements, trading rules, and position and
exercise limits. Similar to NDX, NQX options are European-style and
cash-settled, and have a contract multiplier of 100. The contract
specifications for NQX options mirror in all respects those of the NDX
options contract listed on the Exchange, except that NQX options are
based on \1/5\ of the value of the Nasdaq-100, and are P.M.-settled
pursuant to Options 4A, Section 12(a)(6).
The Exchange proposes to amend ISE Options 4A, Section 12(a)(6) to
extend the current NQX pilot period to November 2, 2020. This pilot was
previously extended with the last extension through May 4, 2020.\4\ The
Exchange continues to have sufficient capacity to handle additional
quotations and message traffic associated with the proposed listing and
trading of NQX options. In addition, index options are integrated into
the Exchange's existing surveillance system architecture and are thus
subject to the relevant surveillance processes. The Exchange also
continues to have adequate surveillance procedures to monitor trading
in NQX options thereby aiding in the maintenance of a fair and orderly
market. Additionally, there is continued investor interest in these
products and this extension will provide additional time to collect
data related to the pilot.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release Nos.86071 (June 10,
2019), 84 FR 27822 (June 14, 2019) (SR-ISE-2019-18); 87379 (October
22, 2019), 84 FR 57793 (October 28, 2019) (SR-ISE-2019-27).
---------------------------------------------------------------------------
Pilot Report
The Exchange currently makes public on its website the data and
analysis previously submitted to the Commission on the Pilot Program
and will continue to make public any data or analysis it
[[Page 22769]]
submits under the Pilot Program in the future. If in the future the
Exchange proposes an additional extension of the Pilot Program or
proposes to make the Pilot Program permanent, the Exchange will submit
an annual report to the Commission consistent with the order approving
the establishment of the Pilot Program at least two months prior to the
expiration date of the Pilot Program. Conditional on the findings in
the Pilot Report, the Exchange will file with the Commission a proposal
to extend the pilot program, adopt the pilot program on a permanent
basis or terminate the pilot.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\5\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\6\ in particular, in that it
is designed to promote just and equitable principles of trade, to
remove impediments to and perfect the mechanism of a free and open
market and a national market system, and, in general to protect
investors and the public interest. By extending the pilot, the Exchange
believes it will attract order flow to the Exchange, increase the
variety of listed options, and provide a valuable hedge tool to retail
and other investors. Specifically, the Exchange believes that the pilot
will provide additional trading and hedging opportunities for investors
while providing the Commission with data to monitor for and assess any
potential for adverse market effects of allowing P.M.-settlement for
NQX options, including on the underlying component stocks.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. NQX options would be
available for trading to all market participants and therefore would
not impose an undue burden on intra-market competition. The Exchange
believes that the proposed rule change will not impose an undue burden
on inter-market competition as this rule change will continue to
facilitate the listing and trading of a new option product that will
enhance competition among market participants, to the benefit of
investors and the marketplace. The continued listing of NQX will
enhance competition by providing investors with an additional
investment vehicle, in a fully-electronic trading environment, through
which investors can gain and hedge exposure to the Nasdaq-100.
Furthermore, this product could offer a competitive alternative to
other existing investment products that seek to allow investors to gain
broad market exposure. Finally, it is possible for other exchanges to
develop or license the use of a new or different index to compete with
the Nasdaq-100 and seek Commission approval to list and trade options
on such an index.
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 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 \7\ and subparagraph (f)(6) of Rule 19b-4
thereunder.\8\
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\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 17 CFR 240.19b-4(f)(6). In addition, Rule19b-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 \9\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \10\ 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 asked the Commission to waive the 30-day operative delay so that
investors may continue to trade NQX options listed by the Exchange as
part of the pilot program on an uninterrupted basis. The Commission
believes that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest as it will allow the
pilot program to continue uninterrupted, thereby avoiding investor
confusion that could result from a temporary interruption in the pilot
program. Accordingly, the Commission hereby waives the operative delay
and designates the proposed rule change operative upon filing.\11\
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\9\ 17 CFR 240.19b-4(f)(6).
\10\ 17 CFR 240.19b-4(f)(6)(iii).
\11\ 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-2020-18 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-2020-18. 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
[[Page 22770]]
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-
2020-18, and should be submitted on or before May 14, 2020.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-08590 Filed 4-22-20; 8:45 am]
BILLING CODE 8011-01-P
