Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Delay the Protocol “Ouch To Trade Options” or “OTTO”, 37486-37488 [2020-13309]

Download as PDF 37486 Federal Register / Vol. 85, No. 120 / Monday, June 22, 2020 / Notices 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, security-based swap submission, or advance notice that are filed with the Commission, and all written communications relating to the proposed rule change, security-based swap submission, or advance notice 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 such filings will also be available for inspection and copying at the principal office of ICE Clear Credit and on ICE Clear Credit’s website at https:// www.theice.com/clear-credit/regulation. 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–ICC–2020–008 and should be submitted on or before July 13, 2020. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.19 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2020–13308 Filed 6–19–20; 8:45 am] SECURITIES AND EXCHANGE COMMISSION [Release No. 34–89077; File No. SR– NASDAQ–2020–031] Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Delay the Protocol ‘‘Ouch To Trade Options’’ or ‘‘OTTO’’ June 16, 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 June 11, 2020, The Nasdaq Stock Market LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Sep<11>2014 18:08 Jun 19, 2020 Jkt 250001 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to delay the protocol ‘‘Ouch to Trade Options’’ or ‘‘OTTO’’ on The Nasdaq Options Market LLC (‘‘NOM’’). The text of the proposed rule change is available on the Exchange’s website at https://nasdaq.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 Nasdaq filed a rule change 3 which adopted a new protocol ‘‘Ouch to Trade Options’’ or ‘‘OTTO’’ 4 and proposed to rename and modify the current OTTO protocol as ‘‘Quote Using Orders’’ or BILLING CODE 8011–01–P 19 17 Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 3 See Securities Exchange Act Release No. 83888 (August 20, 2018), 83 FR 42954 (August 24, 2018) (SR–NASDAQ–2018–069) (‘‘Prior Rule Change’’). In the Prior Rule Change the Exchange stated that it would issue an Options Trader Alert introducing the new OTTO protocol in Q4 of 2018. The rule numbers were amended in 2019 when the Rulebook was relocated. See Securities Exchange Act Release No. 87778 (December 17, 2019), 84 FR 70590 (December 23, 2019) (SR–NASDAQ–2019–098). 4 As modified by the Prior Rule Change, OTTO is an interface that allows Participants and their Sponsored Customers to connect, send, and receive messages related to orders to and from the Exchange. Features include the following: (1) Options symbol directory messages (e.g., underlying); (2) system event messages (e.g., start of trading hours messages and start of opening); (3) trading action messages (e.g., halts and resumes); (4) execution messages; (5) order messages; and (6) risk protection triggers and cancel notifications. See NOM Rules at Options 3, Section 7(d)(1)(C). PO 00000 Frm 00071 Fmt 4703 Sfmt 4703 ‘‘QUO.’’ 5 The Exchange subsequently filed a rule change to amend Options 3, Section 18, titled ‘‘Detection of Loss of Communication’’ which describes the impact to NOM protocols in the event of a loss of a communication. The Exchange accounted for both the new OTTO and renamed and modified QUO within this rule. Similarly, the Exchange amended Options 3, Section 8, ‘‘Nasdaq Opening and Halt Cross’’ to account for the new OTTO and renamed and modified QUO within this rule. Finally, the Exchange amended Options 3, Section 23, ‘‘Data Feeds and Trade Information’’ to amend ‘‘OTTO DROP’’ to ‘‘QUO DROP’’ and noted within Options 3, Section 15(a)(1) related to Order Price Protection rule or ‘‘OPP’’ that OPP shall not apply to orders entered through QUO.6 Both the Prior Rule Change and the Subsequent Rule Change indicated the aforementioned rule changes would be implemented for QUO and OTTO in Q4 of 2018 with the date announced via an Options Traders Alert. The Exchange filed a rule change implementing QUO and delaying the introduction of the OTTO functionality until Q3 2019 by announcing the date of implementation via an Options Traders Alert.7 The Exchange further delayed the implementation of OTTO functionality until Q3 2019 and then Q2 2020, respectively.8 At this time, the Exchange proposes to further delay the implementation of OTTO functionality until Q2 2021. The Exchange will issue an Options Trader Alert notifying Participants when this functionality will be available. 5 QUO is an interface that allows NOM Market Makers to connect, send, and receive messages related to single-sided orders to and from the Exchange. Order Features include the following: (1) Options symbol directory messages (e.g., underlying); (2) system event messages (e.g., start of trading hours messages and start of opening); (3) trading action messages (e.g., halts and resumes); (4) execution messages; (5) order messages; and (6) risk protection triggers and cancel notifications. Orders submitted by NOM Market Makers over this interface are treated as quotes. See Options 3, Section 7(d)(1)(D). 6 See Securities Exchange Act Release No. 84559 (November 9, 2019), 83 FR 57774 (November 16, 2018) (SR–NASDAQ–2018–085) (‘‘Subsequent Rule Change’’). 7 See Securities Exchange Act Release No. 84723 (December 4, 2018), 83 FR 63692 (December 11, 2018) (SR–NASDAQ–2018–097). The Exchange proposed to immediately implement QUO as of the effectiveness of SR–NASDAQ–2018–097 and delay the implementation of OTTO by issuing an Options Trader Alert announcing the implementation date in Q1 2019. The QUO implementation became effective upon filing on November 26, 2018. 8 See Securities Exchange Act Release Nos. 85386 (March 21, 2019), 84 FR 11597 (March 27, 2019) (SR–NASDAQ–2019–016); and 87160 (September 30, 2019), 84 FR 53186 (October 4, 2019) (SR– NASDAQ–2019–078). E:\FR\FM\22JNN1.SGM 22JNN1 Federal Register / Vol. 85, No. 120 / Monday, June 22, 2020 / Notices Nasdaq is considering enhancing OTTO features to provide members with other capabilities, which are currently not offered with OTTO, in the area of risk enhancements. Nasdaq would need time to file a proposal with the Commission with respect to any enhancement. Nasdaq proposes to delay the implementation of OTTO in order to receive additional feedback from market participants regarding the protocol. Also, Nasdaq proposes this delay to account for a change in its timeline to deliver this product, as a result of the market events in 2020 enhancement. Nasdaq proposes to delay the implementation of OTTO in order to receive additional feedback from market participants regarding the protocol. Also, Nasdaq proposes this delay to account for a change in its timeline to deliver this product, as a result of the market events in 2020. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,9 in general, and furthers the objectives of Section 6(b)(5) of the Act,10 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 delaying the OTTO functionality to allow the Exchange additional time to implement this functionality. Nasdaq is considering enhancing OTTO features to provide members with other capabilities, which are currently not offered with OTTO, in the area of risk enhancements. Nasdaq would need time to file a proposal with the Commission with respect to any enhancement. Nasdaq proposes to delay the implementation of OTTO in order to receive additional feedback from market participants regarding the protocol. Also, Nasdaq proposes this delay to account for a change in its timeline to deliver this product, as a result of the market events in 2020. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action A proposed rule change filed under Rule 19b–4(f)(6) 11 normally does not become operative prior to 30 days after the date of the filing. However, Rule 19b–4(f)(6)(iii) 12 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 the proposal may become operative immediately upon filing. The Exchange states that the waiver will allow the Exchange to immediately delay the implementation of the OTTO functionality. The Exchange notes that it is considering enhancing OTTO features to provide members with other risk-enhancement capabilities, which are currently not offered with OTTO, and that Nasdaq would need time to file a proposal with the Commission with respect to any such enhancement. The Exchange further notes that a delay in the implementation of OTTO would allow the Exchange to receive additional feedback from market participants regarding the protocol. Finally, Nasdaq notes this delay is needed to account for a change in its timeline to deliver this product, as a result of the market events in 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 as operative upon filing.13 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The Exchange’s proposal to delay the adoption of the OTTO functionality does not impose an undue burden on competition as no Participant has access to OTTO today on NOM. Nasdaq is considering enhancing OTTO features to provide members with other capabilities, which are currently not offered with OTTO, in the area of risk enhancements. Nasdaq would need time to file a proposal with the Commission with respect to any 9 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 10 15 VerDate Sep<11>2014 18:08 Jun 19, 2020 Jkt 250001 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. 11 17 CFR 240.19b–4(f)(6). CFR 240.19b–4(f)(6). 13 For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 12 17 PO 00000 Frm 00072 Fmt 4703 Sfmt 4703 37487 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– NASDAQ–2020–031 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–NASDAQ–2020–031. 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 E:\FR\FM\22JNN1.SGM 22JNN1 37488 Federal Register / Vol. 85, No. 120 / Monday, June 22, 2020 / Notices submit only information that you wish to make available publicly. All submissions should refer to File Number SR–NASDAQ–2020–031 and should be submitted on or before July 13, 2020. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.14 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2020–13309 Filed 6–19–20; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–89076; File No. SR– CboeBZX–2020–036] Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Designation of a Longer Period for Commission Action on a Proposed Rule Change To Amend Rule 14.11, Other Securities For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.7 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2020–13310 Filed 6–19–20; 8:45 am] June 16, 2020. On April 29, 2020, Cboe BZX Exchange, Inc. (‘‘Exchange’’ or ‘‘BZX’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to amend continued listing requirements applicable to certain exchange-traded products listed on the Exchange by extending the period of time after which an exchange-traded product would need to have at least 50 beneficial holders or be subject to delisting proceedings under BZX Rule 14.12. The proposed rule change was published for comment in the Federal Register on May 7, 2020.3 The Commission has received comment letters on the proposed rule change.4 Section 19(b)(2) of the Act 5 provides that within 45 days of the publication of notice of the filing of a proposed rule change, or within such longer period up to 90 days as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding, or as to which the self-regulatory organization consents, the Commission will either approve the proposed rule change, disapprove the 14 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 88795 (May 1, 2020), 85 FR 27254. 4 Comments on the proposed rule change can be found on the Commission’s website at: https:// www.sec.gov/comments/sr-cboebzx-2020-036/ srcboebzx2020036.htm. 5 15 U.S.C. 78s(b)(2). 1 15 VerDate Sep<11>2014 proposed rule change, or institute proceedings to determine whether the proposed rule change should be disapproved. The 45th day after publication of the notice for this proposed rule change is June 21, 2020. The Commission is extending this 45day time period. The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change. Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,6 designates August 5, 2020 as the date by which the Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change (File No. SR–CboeBZX–2020–036). 18:08 Jun 19, 2020 Jkt 250001 BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–89073; File No. SR– NYSEArca–2020–46] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change To Amend NYSE Arca Rule 5.2–E(j)(6) Relating to OptionsLinked Securities June 16, 2020. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on June 10, 2020, NYSE Arca, Inc. (‘‘NYSE Arca’’ or the ‘‘Exchange’’) 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 self-regulatory organization. The Commission is publishing. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend NYSE Arca Rule 5.2–E(j)(6) (‘‘IndexLinked Securities’’) to accommodate Exchange listing and trading of Options6 Id. 7 17 CFR 200.30–3(a)(31). U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00073 Fmt 4703 Sfmt 4703 Linked Securities. The proposed rule change is available on the Exchange’s website at www.nyse.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 self-regulatory organization 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 those 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 parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose NYSE Arca Rule 5.2–E(j)(6) provides for Exchange listing and trading, including listing pursuant to Rule 19b– 4(e) under the Act,4 of ‘‘Index-Linked Securities.’’ 5 The Exchange proposes to amend NYSE Arca Rule 5.2–E(j)(6) to add Options-Linked Securities to the type of Index-Linked Securities permitted to list and trade on the Exchange.6 Proposed Rule 5.2–E(j)(6)(vii) would provide that the payment at maturity with respect to Options-Linked Securities would be based on the performance of one or more U.S. exchange-traded options on any one or combination of the following: (a) Investment Company Units; (b) Exchange-Traded Fund Shares; (c) Index-Linked Securities; (d) securities defined in Section 2 of Rule 8–E; 7 (e) 4 Rule 19b–4(e) under the Act provides that the listing and trading of a new derivative securities product by a self-regulatory organization (‘‘SRO’’) shall not be deemed a proposed rule change, pursuant to section (c)(1) of Rule 19b–4, if the Commission has approved, pursuant to Section 19(b) of the Act, the SRO’s trading rules, procedures, and listing standards for the product class and the SRO has a surveillance program for the product class. 5 Rule 5.2–E(j)(6) currently accommodates Exchange listing of Equity Index-Linked Securities, Commodity-Linked Securities, Currency-Linked Securities, Fixed Income Index-Linked Securities, Futures-Linked Securities and Multifactor IndexLinked Securities. 6 Index-Linked Securities are sometimes referred to as ‘‘exchange-traded notes’’ or ‘‘ETNs.’’ 7 The following securities currently are included in Section 2 of NYSE Arca Rule 8–E: Portfolio Depositary Receipts (Rule 8.100); Trust Issued Receipts (Rule 8.200); Commodity-Based Trust E:\FR\FM\22JNN1.SGM 22JNN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 85, Number 120 (Monday, June 22, 2020)]
[Notices]
[Pages 37486-37488]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-13309]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-89077; File No. SR-NASDAQ-2020-031]


Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Delay the Protocol ``Ouch To Trade Options'' or ``OTTO''

June 16, 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 June 11, 2020, The Nasdaq Stock Market LLC (``Nasdaq'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as described in 
Items I and II below, which Items have been prepared by the Exchange. 
The Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to delay the protocol ``Ouch to Trade 
Options'' or ``OTTO'' on The Nasdaq Options Market LLC (``NOM'').
    The text of the proposed rule change is available on the Exchange's 
website at https://nasdaq.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
    Nasdaq filed a rule change \3\ which adopted a new protocol ``Ouch 
to Trade Options'' or ``OTTO'' \4\ and proposed to rename and modify 
the current OTTO protocol as ``Quote Using Orders'' or ``QUO.'' \5\ The 
Exchange subsequently filed a rule change to amend Options 3, Section 
18, titled ``Detection of Loss of Communication'' which describes the 
impact to NOM protocols in the event of a loss of a communication. The 
Exchange accounted for both the new OTTO and renamed and modified QUO 
within this rule. Similarly, the Exchange amended Options 3, Section 8, 
``Nasdaq Opening and Halt Cross'' to account for the new OTTO and 
renamed and modified QUO within this rule. Finally, the Exchange 
amended Options 3, Section 23, ``Data Feeds and Trade Information'' to 
amend ``OTTO DROP'' to ``QUO DROP'' and noted within Options 3, Section 
15(a)(1) related to Order Price Protection rule or ``OPP'' that OPP 
shall not apply to orders entered through QUO.\6\
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    \3\ See Securities Exchange Act Release No. 83888 (August 20, 
2018), 83 FR 42954 (August 24, 2018) (SR-NASDAQ-2018-069) (``Prior 
Rule Change''). In the Prior Rule Change the Exchange stated that it 
would issue an Options Trader Alert introducing the new OTTO 
protocol in Q4 of 2018. The rule numbers were amended in 2019 when 
the Rulebook was relocated. See Securities Exchange Act Release No. 
87778 (December 17, 2019), 84 FR 70590 (December 23, 2019) (SR-
NASDAQ-2019-098).
    \4\ As modified by the Prior Rule Change, OTTO is an interface 
that allows Participants and their Sponsored Customers to connect, 
send, and receive messages related to orders to and from the 
Exchange. Features include the following: (1) Options symbol 
directory messages (e.g., underlying); (2) system event messages 
(e.g., start of trading hours messages and start of opening); (3) 
trading action messages (e.g., halts and resumes); (4) execution 
messages; (5) order messages; and (6) risk protection triggers and 
cancel notifications. See NOM Rules at Options 3, Section 
7(d)(1)(C).
    \5\ QUO is an interface that allows NOM Market Makers to 
connect, send, and receive messages related to single-sided orders 
to and from the Exchange. Order Features include the following: (1) 
Options symbol directory messages (e.g., underlying); (2) system 
event messages (e.g., start of trading hours messages and start of 
opening); (3) trading action messages (e.g., halts and resumes); (4) 
execution messages; (5) order messages; and (6) risk protection 
triggers and cancel notifications. Orders submitted by NOM Market 
Makers over this interface are treated as quotes. See Options 3, 
Section 7(d)(1)(D).
    \6\ See Securities Exchange Act Release No. 84559 (November 9, 
2019), 83 FR 57774 (November 16, 2018) (SR-NASDAQ-2018-085) 
(``Subsequent Rule Change'').
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    Both the Prior Rule Change and the Subsequent Rule Change indicated 
the aforementioned rule changes would be implemented for QUO and OTTO 
in Q4 of 2018 with the date announced via an Options Traders Alert. The 
Exchange filed a rule change implementing QUO and delaying the 
introduction of the OTTO functionality until Q3 2019 by announcing the 
date of implementation via an Options Traders Alert.\7\ The Exchange 
further delayed the implementation of OTTO functionality until Q3 2019 
and then Q2 2020, respectively.\8\ At this time, the Exchange proposes 
to further delay the implementation of OTTO functionality until Q2 
2021. The Exchange will issue an Options Trader Alert notifying 
Participants when this functionality will be available.
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    \7\ See Securities Exchange Act Release No. 84723 (December 4, 
2018), 83 FR 63692 (December 11, 2018) (SR-NASDAQ-2018-097). The 
Exchange proposed to immediately implement QUO as of the 
effectiveness of SR-NASDAQ-2018-097 and delay the implementation of 
OTTO by issuing an Options Trader Alert announcing the 
implementation date in Q1 2019. The QUO implementation became 
effective upon filing on November 26, 2018.
    \8\ See Securities Exchange Act Release Nos. 85386 (March 21, 
2019), 84 FR 11597 (March 27, 2019) (SR-NASDAQ-2019-016); and 87160 
(September 30, 2019), 84 FR 53186 (October 4, 2019) (SR-NASDAQ-2019-
078).

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[[Page 37487]]

    Nasdaq is considering enhancing OTTO features to provide members 
with other capabilities, which are currently not offered with OTTO, in 
the area of risk enhancements. Nasdaq would need time to file a 
proposal with the Commission with respect to any enhancement. Nasdaq 
proposes to delay the implementation of OTTO in order to receive 
additional feedback from market participants regarding the protocol. 
Also, Nasdaq proposes this delay to account for a change in its 
timeline to deliver this product, as a result of the market events in 
2020
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\9\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\10\ 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 delaying the OTTO functionality to allow the Exchange 
additional time to implement this functionality.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    Nasdaq is considering enhancing OTTO features to provide members 
with other capabilities, which are currently not offered with OTTO, in 
the area of risk enhancements. Nasdaq would need time to file a 
proposal with the Commission with respect to any enhancement. Nasdaq 
proposes to delay the implementation of OTTO in order to receive 
additional feedback from market participants regarding the protocol. 
Also, Nasdaq proposes this delay to account for a change in its 
timeline to deliver this product, as a result of the market events in 
2020.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. The Exchange's proposal to 
delay the adoption of the OTTO functionality does not impose an undue 
burden on competition as no Participant has access to OTTO today on 
NOM.
    Nasdaq is considering enhancing OTTO features to provide members 
with other capabilities, which are currently not offered with OTTO, in 
the area of risk enhancements. Nasdaq would need time to file a 
proposal with the Commission with respect to any enhancement. Nasdaq 
proposes to delay the implementation of OTTO in order to receive 
additional feedback from market participants regarding the protocol. 
Also, Nasdaq proposes this delay to account for a change in its 
timeline to deliver this product, as a result of the market events in 
2020.

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

    A proposed rule change filed under Rule 19b-4(f)(6) \11\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, Rule 19b-4(f)(6)(iii) \12\ 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 the proposal 
may become operative immediately upon filing. The Exchange states that 
the waiver will allow the Exchange to immediately delay the 
implementation of the OTTO functionality. The Exchange notes that it is 
considering enhancing OTTO features to provide members with other risk-
enhancement capabilities, which are currently not offered with OTTO, 
and that Nasdaq would need time to file a proposal with the Commission 
with respect to any such enhancement. The Exchange further notes that a 
delay in the implementation of OTTO would allow the Exchange to receive 
additional feedback from market participants regarding the protocol. 
Finally, Nasdaq notes this delay is needed to account for a change in 
its timeline to deliver this product, as a result of the market events 
in 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 as operative upon filing.\13\
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    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. 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-NASDAQ-2020-031 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-NASDAQ-2020-031. 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

[[Page 37488]]

submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NASDAQ-2020-031 and should 
be submitted on or before July 13, 2020.

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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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-13309 Filed 6-19-20; 8:45 am]
BILLING CODE 8011-01-P

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