Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Options 6, Section 5 (Transfer of Positions), 51830-51833 [2020-18350]
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Federal Register / Vol. 85, No. 163 / Friday, August 21, 2020 / Notices
of the purposes of the Act. The
Exchange believes that the proposed
update does not impact competition in
any respect since its purpose is to
enhance transparency with respect to
the operation of the Exchange and its
use of market data feeds, and to update
an away market name.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments were neither
solicited nor 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 21 and Rule 19b–
4(f)(6) thereunder.22
A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
Act 23 normally does not become
operative for 30 days after the date of its
filing. However, Rule 19b–4(f)(6)(iii) 24
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.
The proposed rule change will merely
amend IEX rules to reflect the launch of
MEMX as an away trading center with
a Protected Quote and specify that IEX
will route orders to MEMX and use the
MEMX Market Data Feeds as the
primary source, and the SIP as the
secondary source, to determine MEMX’s
Top of Book quotation.
The Exchange believes that waiver of
the operative delay is consistent with
the protection of investors and the
public interest because it will allow the
Exchange to implement the proposed
rule change concurrent with MEMX’s
exchange launch of equities trading,
thereby facilitating IEX’s compliance
21 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
23 17 CFR 240.19b–4(f)(6).
24 17 CFR 240.19b–4(f)(6)(iii).
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with the applicable requirements of
Regulation NMS and providing clarity
to market participants with respect to
whether IEX routes to MEMX and how
IEX determines MEMX’s Top of Book
quotation. The Commission believes
that waiver of the 30-day operative
delay is consistent with the protection
of investors and the public interest
because the proposed rule change does
not raise any new or novel issues.
Therefore, the Commission hereby
waives the operative delay and
designates the proposal as operative
upon filing.25
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
under Section 19(b)(2)(B) 26 of the Act 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–
IEX–2020–11 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–IEX–2020–11. 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
25 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).
26 15 U.S.C. 78s(b)(2)(B).
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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 will also be available for
inspection and copying at the IEX’s
principal office and on its internet
website at www.iextrading.com. 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–IEX–2020–11 and
should be submitted on or before
September 11, 2020.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.27
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–18349 Filed 8–20–20; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–89578; File No. SR–BX–
2020–020]
Self-Regulatory Organizations; Nasdaq
BX, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend Options 6,
Section 5 (Transfer of Positions)
August 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 August 6,
2020, Nasdaq BX, Inc. (‘‘BX’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission (the
‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Exchange filed the
proposal as a ‘‘non-controversial’’
27 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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Federal Register / Vol. 85, No. 163 / Friday, August 21, 2020 / Notices
proposed rule change pursuant to
Section 19(b)(3)(A)(iii) of the Act 3 and
Rule 19b–4(f)(6) thereunder.4 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 amend
Options 6, Section 5, titled ‘‘Transfer of
Positions.’’
The text of the proposed rule change
is available on the Exchange’s website at
https://listingcenter.nasdaq.com/
rulebook/bx/rules, at the principal office
of the Exchange, and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend
Options 6, Section 5, titled ‘‘Transfer of
Positions.’’ The proposed rule change is
similar to Cboe Exchange, Inc. (‘‘Cboe’’)
Rule 6.7.5
Options 6, Section 5 permits market
participants to move positions from one
account to another without first
exposure of the transaction on the
Exchange, provided certain exceptions
are met. Specifically, Options 6, Section
5(a)(2) 6 provides that transfers of
3 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
5 See Securities and Exchange Act Release No.
89389 (July 23, 2020), 85 FR 45709 (July 29, 2020)
(SR–Cboe–2020–067) (Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change
to Amend Rule 6.7 Concerning Off-Floor Transfers).
6 Options 6, Section 5(a) states, ‘‘Permissible
Transfers. Existing positions in options listed on
the Exchange of a Participant or non-Participant
that are to be transferred on, from, or to the books
of a Clearing Participant may be transferred off the
Exchange if the transfer involves on or more of the
following events:.....(2) the transfer of positions
from one account to another account where no
change in ownership is involved (i.e., accounts of
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positions are permissible if from one
account to another account where no
change in ownership is involved (i.e.,
accounts of the same Person),7 provided
the accounts are not in separate
aggregation units or otherwise subject to
information barrier or account
segregation requirements. These
transfers are subject to, among other
things, the requirement to submit prior
written notice of the transfers to the
Exchange pursuant to Options 6,
Section 5(d) and the restriction on
effecting these transfers repeatedly or
routinely.
The proposed rule change excepts
position transfers effected pursuant to
Options 6, Section(a)(2) from the prior
written notice requirement in paragraph
(d) and from repeated, recurring use
restriction in paragraph (g). Position
transfers pursuant to Options 6,
Section(a)(2) do not involve a change in
ownership. In other words, such
transfers may only occur between the
same individual or legal entity. These
types of transfers are merely transfers of
positions from one account to another,
both of which accounts are attributable
to the same individual or legal entity,
and thus the transferred option
positions will continue to be
attributable to the same Person. A
market participant effecting an position
transfer pursuant to Options 6, Section
5(a)(2) is analogous to an individual
transferring funds from a checking
account to a savings account, or from an
account at one bank to an account at
another bank—the money still belongs
to the same person, who is just holding
it in a different account for personal
financial reasons.
Because there is no change in
ownership of positions transferred
pursuant to Options 6, Section 5(a)(2),
the Exchange believes it is appropriate
to permit them to occur as routinely and
repeatedly as a market participant
would like. These transfers will
continue to be subject to the prohibition
on netting set forth in Options 6,
Section 5(b), and thus may not result in
the closing of any positions. While the
position transfers permitted by Options
6, Section 5 were intended to
accommodate non-routine and nonrecurring transfers, the Exchange
believes permitting routine, recurring
the same Person, provided the accounts are not in
separate aggregation units or otherwise subject to
information barrier or account segregation
requirements;. . .’’
7 For purposes of this rule, the term ‘‘Person’’ as
an individual, partnership (general or limited), joint
stock company, corporation, limited liability
company, trust, or unincorporated organization, or
any governmental entity or agency or political
subdivision thereof. See Options 6, Section 5(a).
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51831
position transfers that do not result in
a change in ownership or reduction in
open interest is consistent with the
purpose of not being used to circumvent
the normal auction purpose.
Additionally, given that these transfers
may occur on a regular basis in
accordance with a market participants’
business needs and procedures, the
Exchange believes prior written notice
would be onerous and would not serve
any purpose given the lack of change in
ownership and in open interest. The
Exchange believes this will provide
market participants with additional
flexibility to structure their option
position accounts as they believe is
appropriate and move their positions
between accounts as they deem
necessary and appropriate for their
business and trading needs, including
for risk management purposes.
The proposed rule change also
corrects an erroneous cross-reference in
Rule Options 6, Section 5(d)(1), as the
method for determining the transfer
price is in paragraph (c) rather than
paragraph (e) of Options 6, Section 5.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,8 in general, and furthers the
objectives of Section 6(b)(5) of the Act.9
Specifically, the Exchange believes the
proposed rule change is consistent with
the Section 6(b)(5) 10 requirements that
the rules of an exchange be designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, to foster
cooperation and coordination with
persons engaged in regulating, clearing,
settling, processing information with
respect to, and facilitating transactions
in securities, 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.
Additionally, the Exchange believes the
proposed rule change is consistent with
the Section 6(b)(5) 11 requirement that
the rules of an exchange not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
In particular, the Exchange believes
the proposed rule change will 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 because it will provide
market participants with a more
8 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
10 Id.
11 Id.
9 15
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efficient process to transfer open
positions between their own accounts in
accordance with their own business and
trading needs, including to respond to
then-current market conditions. Because
these transfers would not result in a
change in ownership or a reduction in
open interest, the Exchange believes the
proposed rule change remains
consistent with the purpose of Options
6, Section 5, which was to prohibit use
of the transfer procedure in
circumvention of the normal auction
process, as the normal auction process
involves the opening or closing of
positions through a transaction among
multiple market participants. Market
participants may maintain different
accounts for a variety of reasons, such
as the structure of their businesses, the
manner in which they trade, their risk
management procedures, and for capital
purposes. Given that these transfers may
occur on a regular basis in accordance
with a market participants’ business
needs and procedures, the Exchange
believes prior written notice would be
onerous and would not serve any
purpose given the lack of change in
ownership and in open interest.
Therefore, the proposed rule change
will benefit investors by permitting
market participants to manage the open
positions in their accounts in a manner
consistent with their businesses.
The Exchange recognizes the
numerous benefits of executing options
transactions on an exchange, including
price transparency, potential price
improvement, and a clearing guarantee.
However, the Exchange believes it is
appropriate to permit position transfers
among accounts of the same individual
or legal entity where there is no impact
on open interest to occur off the
exchange, as these benefits are
inapplicable to those transfers. These
transfers have a narrow scope and are
intended to permit market participants
to achieve their own business needs.
These transfers are not intended to be a
competitive trading tool. There is no
need for price discovery or
improvement, as the transfer merely
moves positions to different accounts
for the same Person and does not open
or close any positions. These transfers
will result in no change in ownership.
The transactions that resulted in the
open positions to be transferred
pursuant to Options 6, Section 5(a)(2)
were already guaranteed by a clearing
member of The Options Clearing
Corporation (‘‘OCC’’), and the positions
may not be closed pursuant to the
transfer and will continue to be subject
to OCC rules, as they will continue to
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be held in an account with an OCC
clearing member.
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. The
proposed rule change is not intended to
address competitive issues. The
Exchange does not believe that the
proposed rule change will impose any
burden on intramarket competition that
is not necessary or appropriate in
furtherance of the purposes of the Act
because the proposed rule change will
apply to all market participants in the
same manner. All market participants
will be able to effect position transfers
pursuant to Options 6, Section 5(a)(2)
on a recurring or routine basis without
providing the Exchange with notice of
such transfers. The Exchange does not
believe the proposed rule change will
impose any burden on intermarket
competition that is not necessary or
appropriate in furtherance of the
purposes of the Act, because it relates
solely to the notice required for transfers
that may occur today, and the frequency
with which those transfers may occur.
These transfers will continue to not
result in a change in ownership or
netting, and thus will have no impact on
outstanding option positions.
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 Rule 19b–
4(f)(6) thereunder.13
12 15
U.S.C. 78s(b)(3)(A).
13 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
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A proposed rule change filed under
Rule 19b–4(f)(6) 14 normally does not
become operative for 30 days after the
date of the filing. However, pursuant to
Rule 19b–4(f)(6)(iii),15 the Commission
may 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 to so
that it may adopt the proposed position
transfer rules as soon as possible which,
according to the Exchange, would
benefit investors and the general public
because it will provide Participants with
the ability to request a transfer, for
limited, non-recurring types of transfers,
without the need for exposing those
orders on the Exchange. The proposed
rule change does not present any unique
or novel regulatory issues and is
substantively identical to provisions in
Cboe Rule 6.7. Accordingly, the
Commission hereby waives the
operative delay and designates the
proposal 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. If the
Commission takes such action, the
Commission will institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
BX–2020–020 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
14 17
CFR 240.19b–4(f)(6).
CFR 240.19b–4(f)(6)(iii).
16 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).
15 17
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Federal Register / Vol. 85, No. 163 / Friday, August 21, 2020 / Notices
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–BX–2020–020. 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;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–BX–
2020–020 and should be submitted on
or before September 11, 2020.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
J. Matthew DeLesDernier,
Assistant Secretary.
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
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[Release No. 34–89586; File No. SR–C2–
2020–012]
Self-Regulatory Organizations; Cboe
C2 Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Relating To Adopt Fees
for a Recently Adopted Data Product
Known as Intraday Open-Close Data
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Cboe C2 Exchange, Inc. (the
‘‘Exchange’’ or ‘‘C2’’) is filing with the
Securities and Exchange Commission
(‘‘Commission’’) a proposed rule change
to adopt fees for a recently adopted data
product known as Intraday Open-Close
Data. 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://markets.cboe.com/us/
options/regulation/rule_filings/ctwo/),
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.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
[FR Doc. 2020–18350 Filed 8–20–20; 8:45 am]
August 17, 2020.
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on August 3,
2020, Cboe C2 Exchange, Inc. (the
‘‘Exchange’’ or ‘‘C2’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
1. Purpose
The Exchange recently adopted a new
data product on C2 to be known as
Intraday Open-Close Data, which will be
available for purchase to C2 Trading
Permit Holders (‘‘TPHS’’) and nonTPHs.3 The Exchange now proposes to
adopt fees for Intraday Open-Close Data.
Cboe LiveVol, LLC (‘‘LiveVol’’), a
wholly owned subsidiary of the
Exchange’s parent company, Cboe
Global Markets, Inc., will make the
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See SR–C2–2020–010.
2 17
17 17
CFR 200.30–3(a)(12).
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51833
Intraday Open-Close Data available for
purchase to TPHs and non-TPHs on the
LiveVol DataShop website
(datashop.cboe.com).
By way of background, the Exchange
historically offered Open-Close Data,
which is an end-of-day volume
summary of trading activity on the
Exchange at the option level by origin
(customer, professional customer,
broker-dealer, and market maker), side
of the market (buy or sell), price, and
transaction type (opening or closing).
The customer and professional customer
volume is further broken down into
trade size buckets (less than 100
contracts, 100–199 contracts, greater
than 199 contracts). The Open-Close
Data is proprietary C2 trade data and
does not include trade data from any
other exchange. It is also a historical
data product and not a real-time data
feed.
The Exchange recently adopted a
similar product: Intraday Open-Close
Data. The Intraday Open-Close Data will
provide similar information to that of
Open-Close Data but will be produced
and updated every 10 minutes during
the trading day. Data is captured in
‘‘snapshots’’ taken every 10 minutes
throughout the trading day and is
available to subscribers within five
minutes of the conclusion of each 10minute period. For example, subscribers
to the intraday product will receive the
first calculation of intraday data by
approximately 9:42 a.m. ET, which
represents data captured from 9:30 a.m.
to 9:40 a.m. Subscribers will receive the
next update at 9:52 a.m., representing
the data previously provided together
with data captured from 9:40 a.m.
through 9:50 a.m., and so forth. Each
update will represent the aggregate data
captured from the current ‘‘snapshot’’
and all previous ‘‘snapshots.’’ The
Intraday Open-Close Data will provide a
volume summary of trading activity on
the Exchange at the option level by
origin (customer, professional customer,
broker-dealer, and market maker), side
of the market (buy or sell), and
transaction type (opening or closing).
The customer and professional customer
volume will be further broken down
into trade size buckets (less than 100
contracts, 100–199 contracts, greater
than 199 contracts). The Intraday OpenClose Data is also proprietary C2 trade
data and does not include trade data
from any other exchange. In contrast to
the existing Open-Close Data product,
the Intraday Open-Close Data will not
provide execution price.
The Exchange anticipates a wide
variety of market participants to
purchase Intraday Open-Close Data,
including, but not limited to, individual
E:\FR\FM\21AUN1.SGM
21AUN1
]]>Agencies
[Federal Register Volume 85, Number 163 (Friday, August 21, 2020)]
[Notices]
[Pages 51830-51833]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-18350]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-89578; File No. SR-BX-2020-020]
Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Options 6,
Section 5 (Transfer of Positions)
August 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 August 6, 2020, Nasdaq BX, Inc. (``BX'' or ``Exchange'') filed
with the Securities and Exchange Commission (the ``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the Exchange. The Exchange filed the proposal as
a ``non-controversial''
[[Page 51831]]
proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act
\3\ and Rule 19b-4(f)(6) thereunder.\4\ The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Options 6, Section 5, titled
``Transfer of Positions.''
The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/bx/rules, at the
principal office of the Exchange, and at the Commission's Public
Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Options 6, Section 5, titled
``Transfer of Positions.'' The proposed rule change is similar to Cboe
Exchange, Inc. (``Cboe'') Rule 6.7.\5\
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\5\ See Securities and Exchange Act Release No. 89389 (July 23,
2020), 85 FR 45709 (July 29, 2020) (SR-Cboe-2020-067) (Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change to
Amend Rule 6.7 Concerning Off-Floor Transfers).
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Options 6, Section 5 permits market participants to move positions
from one account to another without first exposure of the transaction
on the Exchange, provided certain exceptions are met. Specifically,
Options 6, Section 5(a)(2) \6\ provides that transfers of positions are
permissible if from one account to another account where no change in
ownership is involved (i.e., accounts of the same Person),\7\ provided
the accounts are not in separate aggregation units or otherwise subject
to information barrier or account segregation requirements. These
transfers are subject to, among other things, the requirement to submit
prior written notice of the transfers to the Exchange pursuant to
Options 6, Section 5(d) and the restriction on effecting these
transfers repeatedly or routinely.
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\6\ Options 6, Section 5(a) states, ``Permissible Transfers.
Existing positions in options listed on the Exchange of a
Participant or non-Participant that are to be transferred on, from,
or to the books of a Clearing Participant may be transferred off the
Exchange if the transfer involves on or more of the following
events:.....(2) the transfer of positions from one account to
another account where no change in ownership is involved (i.e.,
accounts of the same Person, provided the accounts are not in
separate aggregation units or otherwise subject to information
barrier or account segregation requirements;. . .''
\7\ For purposes of this rule, the term ``Person'' as an
individual, partnership (general or limited), joint stock company,
corporation, limited liability company, trust, or unincorporated
organization, or any governmental entity or agency or political
subdivision thereof. See Options 6, Section 5(a).
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The proposed rule change excepts position transfers effected
pursuant to Options 6, Section(a)(2) from the prior written notice
requirement in paragraph (d) and from repeated, recurring use
restriction in paragraph (g). Position transfers pursuant to Options 6,
Section(a)(2) do not involve a change in ownership. In other words,
such transfers may only occur between the same individual or legal
entity. These types of transfers are merely transfers of positions from
one account to another, both of which accounts are attributable to the
same individual or legal entity, and thus the transferred option
positions will continue to be attributable to the same Person. A market
participant effecting an position transfer pursuant to Options 6,
Section 5(a)(2) is analogous to an individual transferring funds from a
checking account to a savings account, or from an account at one bank
to an account at another bank--the money still belongs to the same
person, who is just holding it in a different account for personal
financial reasons.
Because there is no change in ownership of positions transferred
pursuant to Options 6, Section 5(a)(2), the Exchange believes it is
appropriate to permit them to occur as routinely and repeatedly as a
market participant would like. These transfers will continue to be
subject to the prohibition on netting set forth in Options 6, Section
5(b), and thus may not result in the closing of any positions. While
the position transfers permitted by Options 6, Section 5 were intended
to accommodate non-routine and non-recurring transfers, the Exchange
believes permitting routine, recurring position transfers that do not
result in a change in ownership or reduction in open interest is
consistent with the purpose of not being used to circumvent the normal
auction purpose. Additionally, given that these transfers may occur on
a regular basis in accordance with a market participants' business
needs and procedures, the Exchange believes prior written notice would
be onerous and would not serve any purpose given the lack of change in
ownership and in open interest. The Exchange believes this will provide
market participants with additional flexibility to structure their
option position accounts as they believe is appropriate and move their
positions between accounts as they deem necessary and appropriate for
their business and trading needs, including for risk management
purposes.
The proposed rule change also corrects an erroneous cross-reference
in Rule Options 6, Section 5(d)(1), as the method for determining the
transfer price is in paragraph (c) rather than paragraph (e) of Options
6, Section 5.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\8\ in general, and furthers the objectives of Section
6(b)(5) of the Act.\9\ Specifically, the Exchange believes the proposed
rule change is consistent with the Section 6(b)(5) \10\ requirements
that the rules of an exchange be designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, 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. Additionally, the Exchange
believes the proposed rule change is consistent with the Section
6(b)(5) \11\ requirement that the rules of an exchange not be designed
to permit unfair discrimination between customers, issuers, brokers, or
dealers.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
\10\ Id.
\11\ Id.
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In particular, the Exchange believes the proposed rule change will
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 because it will provide market
participants with a more
[[Page 51832]]
efficient process to transfer open positions between their own accounts
in accordance with their own business and trading needs, including to
respond to then-current market conditions. Because these transfers
would not result in a change in ownership or a reduction in open
interest, the Exchange believes the proposed rule change remains
consistent with the purpose of Options 6, Section 5, which was to
prohibit use of the transfer procedure in circumvention of the normal
auction process, as the normal auction process involves the opening or
closing of positions through a transaction among multiple market
participants. Market participants may maintain different accounts for a
variety of reasons, such as the structure of their businesses, the
manner in which they trade, their risk management procedures, and for
capital purposes. Given that these transfers may occur on a regular
basis in accordance with a market participants' business needs and
procedures, the Exchange believes prior written notice would be onerous
and would not serve any purpose given the lack of change in ownership
and in open interest. Therefore, the proposed rule change will benefit
investors by permitting market participants to manage the open
positions in their accounts in a manner consistent with their
businesses.
The Exchange recognizes the numerous benefits of executing options
transactions on an exchange, including price transparency, potential
price improvement, and a clearing guarantee. However, the Exchange
believes it is appropriate to permit position transfers among accounts
of the same individual or legal entity where there is no impact on open
interest to occur off the exchange, as these benefits are inapplicable
to those transfers. These transfers have a narrow scope and are
intended to permit market participants to achieve their own business
needs. These transfers are not intended to be a competitive trading
tool. There is no need for price discovery or improvement, as the
transfer merely moves positions to different accounts for the same
Person and does not open or close any positions. These transfers will
result in no change in ownership. The transactions that resulted in the
open positions to be transferred pursuant to Options 6, Section 5(a)(2)
were already guaranteed by a clearing member of The Options Clearing
Corporation (``OCC''), and the positions may not be closed pursuant to
the transfer and will continue to be subject to OCC rules, as they will
continue to be held in an account with an OCC clearing member.
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. The proposed rule change is
not intended to address competitive issues. The Exchange does not
believe that the proposed rule change will impose any burden on
intramarket competition that is not necessary or appropriate in
furtherance of the purposes of the Act because the proposed rule change
will apply to all market participants in the same manner. All market
participants will be able to effect position transfers pursuant to
Options 6, Section 5(a)(2) on a recurring or routine basis without
providing the Exchange with notice of such transfers. The Exchange does
not believe the proposed rule change will impose any burden on
intermarket competition that is not necessary or appropriate in
furtherance of the purposes of the Act, because it relates solely to
the notice required for transfers that may occur today, and the
frequency with which those transfers may occur. These transfers will
continue to not result in a change in ownership or netting, and thus
will have no impact on outstanding option positions.
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 Rule 19b-
4(f)(6) 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)(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 under Rule 19b-4(f)(6) \14\ normally
does not become operative for 30 days after the date of the filing.
However, pursuant to Rule 19b-4(f)(6)(iii),\15\ the Commission may
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 to so that it may
adopt the proposed position transfer rules as soon as possible which,
according to the Exchange, would benefit investors and the general
public because it will provide Participants with the ability to request
a transfer, for limited, non-recurring types of transfers, without the
need for exposing those orders on the Exchange. The proposed rule
change does not present any unique or novel regulatory issues and is
substantively identical to provisions in Cboe Rule 6.7. Accordingly,
the Commission hereby waives the operative delay and designates the
proposal 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 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 will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-BX-2020-020 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange
[[Page 51833]]
Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-BX-2020-020. 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; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-BX-2020-020 and should be
submitted on or before September 11, 2020.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
J. Matthew DeLesDernier,
Assistant Secretary.
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\17\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2020-18350 Filed 8-20-20; 8:45 am]
BILLING CODE 8011-01-P
