Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Various Rules in Options 3 and Options 5, 12762-12769 [2021-04428]
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Federal Register / Vol. 86, No. 41 / Thursday, March 4, 2021 / Notices
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–NYSENAT–2021–04, and
should be submitted on or before March
25, 2021.
https://listingcenter.nasdaq.com/
rulebook/ise/rules, at the principal
office of the Exchange, and at the
Commission’s Public Reference Room.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.22
J. Matthew DeLesDernier,
Assistant Secretary.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
[FR Doc. 2021–04422 Filed 3–3–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–91223; File No. SR–ISE–
2021–01]
Self-Regulatory Organizations; Nasdaq
ISE, LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend Various Rules
in Options 3 and Options 5
February 26, 2021.
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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 February
18, 2021, Nasdaq ISE, LLC (‘‘ISE’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III, below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
various rules in Options 3 and Options
5.
The text of the proposed rule change
is available on the Exchange’s website at
22 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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II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
1. Purpose
The purpose of the proposed rule
change is to amend various rules in
Options 3 and Options 5. The proposed
changes consist of conforming existing
rules to current System technology,
amending rule text to add greater detail
on how certain Exchange functionality
operate today, and conforming language
within the Exchange’s rules to the rules
of other exchanges. As such, no System
changes to existing functionality are
being made pursuant to this proposal.
Rather, this proposal is designed to
reduce any potential investor confusion
as to the features and applicability of
certain functionality presently available
on the Exchange. These changes are
described in detail below, and include
amending Exchange rules governing: (1)
The Block Order Mechanism (‘‘Block’’),3
(2) the Facilitation Mechanism
(‘‘Facilitation’’),4 (3) the Solicited Order
Mechanism (‘‘Solicitation’’),5 (4) the
Price Improvement Mechanism
(‘‘PIM’’),6 (5) Trade Value Allowance
(‘‘TVA’’),7 (6) Anti-Internalization,8 and
(7) the exposure mechanism
(‘‘Exposure’’).9
Universal Changes
In September 2019, the Exchange
amended its regular allocation rule in
Options 7, Section 10 (Priority of Quotes
3 See
Options 3, Section 11(a).
Options 3, Section 11(b).
5 See Options 3, Section 11(d).
6 See Options 3, Section 13.
7 See Supplementary Material .03 to Options 3,
Section 14.
8 See Options 3, Section 15(a)(3)(A).
9 See Supplementary Material .02 to Options 5,
Section 2.
4 See
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and Orders) to make non-substantive
changes, among other changes, to
replace references to Professional
interest with non-Priority Customer
interest.10 The Exchange now proposes
to make similar changes to replace all
instances of ‘‘Professional’’ interest with
‘‘non-Priority Customer’’ interest
throughout its auction allocation rules
in Options 3, Section 11 and Section 13
to align with the changes made in SR–
ISE–2019–21.11 While the term
‘‘Professional Orders’’ is defined within
Options 1, Section 1(a)(39) as an order
that is for the account of a person or
entity that is not a Priority Customer,
the Exchange believes that using the
term ‘‘non-Priority Customer’’ is more
clear in describing the types of market
participant to which the allocation
applies, and also reduces confusion
regarding any reference to Professional
Orders or Professional Customer orders.
In addition, the Exchange proposes to
make universal changes in its
Facilitation and Solicitation rules 12 to
clearly delineate between orders and
Responses 13 of the same capacity. For
example, where the existing rule text
currently states ‘‘Priority Customer bids
(offers),’’ the Exchange proposes instead
to state ‘‘Priority Customer Orders and
Priority Customer Responses to buy
(sell).’’ The Exchange notes that this is
merely a non-substantive change as
auction orders and Responses of the
same capacity do not get treated
differently for allocation purposes
today. The rules for complex
Facilitation and Solicitation already
distinguish between orders and
Responses, so the Exchange is simply
amending those complex rules to clearly
state how, for example, Priority
Customer Complex Orders and Priority
Customer Responses get allocated
today 14 With the proposed changes, the
Exchange seeks to include a similar
level of detail within its simple and
complex Facilitation and Solicitation
rules in order to bring transparency
10 See Securities Exchange Act Release No. 86947
(September 12, 2019), 84 FR 49165 (September 18,
2019) (SR–ISE–2019–21).
11 Specifically in Options 3, Section 11, the
Exchange will amend current subsections (a)(2)(B),
(b)(3)(A)–(C) (renumbered to (b)(4)(A)–(C) under
this proposal), (c)(7)(A)–(C), (d)(2)(C) (renumbered
to (d)(3)(C) under this proposal), and (e)(4)(D). In
Options 3, Section 13, the Exchange will amend
current subsections (d)(1)–(3) and (e)(5)(i)–(iii).
12 Specifically in Options 3, Section 11,
subsections (b)(3)(A)–(C) (renumbered to (b)(4)(A)–
(C)), and (d)(2)(A) and (C) (renumbered to (d)(3)(A)
and (C)) will be updated.
13 A ‘‘Response’’ is an electronic message that is
sent by Members in response to a broadcast
message. See Options 3, Section 11.
14 See Options 3, Section 11(c)(7) and (e)(4).
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around how allocation takes place in
those auction mechanisms today.
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Block Order Mechanism
The Exchange proposes minor
changes to the current descriptions of
the Block execution and allocation
process in Options 3, Section 11(a). As
discussed below, the proposed Block
changes are non-substantive in nature,
and are intended to harmonize with the
Block rule on its affiliated market, BX
Options (‘‘BX’’) in order to ensure rule
consistency between the Exchange and
its affiliate offering identical
functionality.
First, the Exchange proposes to add
‘‘up to the size of the block order’’ at the
end of subsection (a)(2)(A). As
amended, the rule will provide that bids
(offers) on the Exchange at the time the
block order is time the block order is
executed that are priced higher (lower)
than the block execution price, as well
as Responses that are priced higher
(lower) than the block execution price,
will be executed in full at the block
execution price up to the size of the
block order. The Exchange is making
this non-substantive change to align
with BX’s Block rule,15 which will
ensure rule consistency for identical
functionality across affiliated markets.
The language states that better priced
interest gets executed in full only if
there is sufficient size to execute against
such interest, which is how block orders
are executed and priced on the
Exchange and BX today.
Second, the Exchange proposes a nonsubstantive change in the first sentence
of subsection (a)(2)(B) to replace ‘‘first
and in time priority’’ with ‘‘first in price
time priority.’’ As amended, the rule
will provide that at the block execution
price, Priority Customer Orders and
Priority Customer Responses will be
executed first in price time priority. This
is not a change to the current Block
allocation methodology, but rather a
non-substantive change for better
readability, and to align with BX’s Block
rule 16 in order to ensure rule
consistency for identical functionality
across affiliated markets. Block orders
will continue to trade at a single
execution price that allows the
maximum number of contracts of the
block order to be executed against both
the Responses entered to trade against
the order and unrelated interest on the
Exchange’s order book.
Example 1
Block order is entered to buy 50 contracts @
1.50
The following Responses are received:
15 See
16 See
BX Options 3, Section 11(a)(2)(A).
BX Options 3, Section 11(a)(2)(B).
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Priority Customer Response 1 to sell 40
contracts @1.40
Priority Customer Response 2 to sell 10
contracts @1.40
Priority Customer Response 3 to sell 10
contracts @1.39
The block execution price would be $1.40
(i.e., the price at which the maximum
number of contracts could be executed) and
would be executed as follows:
Block order trades 10 with Priority Customer
Response 3 @1.40
Block order trades 40 with Priority Customer
Response 1 @1.40
As shown above, Priority Customer
Response 3 would be executed in full
since it is priced better than the block
execution price and there is sufficient
size to execute Response 3 against the
block order, while Priority Customer
Responses 1 and 2, which are priced at
the block execution price, would
participate in price time priority—i.e.,
the remaining 40 contracts would go to
Response 1, which was received before
Response 2.
Facilitation Mechanism
The Exchange proposes a number of
changes to its Facilitation rule, none of
which will change the current operation
of this technology offering. Many of the
proposed changes are intended to align
the simple Facilitation rule in Options
3, Section 11(b) with the complex
Facilitation rule in Options 3, Section
11(c) where relevant. In October 2018,
the Exchange amended its complex
order rules to provide greater clarity and
additional detail regarding the operation
and applicability of complex order
functionality, including complex
auction mechanisms like complex
Facilitation.17 Accordingly, the
Exchange seeks to make aligning
changes and update its simple auction
mechanism rules to similarly provide
the level of detail that now exists in its
complex auction mechanism rules. The
proposed changes are also intended to
align with the simple Facilitation rules
of the Exchange’s affiliated markets,
Nasdaq GEMX (‘‘GEMX’’) and Nasdaq
MRX (‘‘MRX’’). The Exchange also
proposes to more accurately describe
how orders will be allocated in
Facilitation’s ‘‘auto-match’’
functionality.
In Options 3, Section 11(b), the
Exchange proposes to add new
17 See Securities Exchange Act Release No. 84373
(October 5, 2018), 83 FR 51730 (October 12, 2018)
(SR–ISE–2018–56) (‘‘Complex Order Filing’’). As
discussed later in this filing, the Complex Order
Filing also clarified the Exchange’s complex
Solicitation and PIM rules, and the Exchange is
proposing to align the simple Solicitation and PIM
rules with the complex rules where possible.
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subsection (b)(1),18 which will provide
that Orders must be entered into the
Facilitation Mechanism at a price that is
(A) equal to or better than the NBBO on
the same side of the market as the
agency order unless there is a Priority
Customer order on the same side
Exchange best bid or offer, in which
case the order must be entered at an
improved price; and (B) equal to or
better than the ABBO 19 on the opposite
side. Orders that do not meet these
requirements are not eligible for the
Facilitation Mechanism and will be
rejected. The Exchange is not proposing
any other changes to the current entry
requirements for Facilitation. The new
subsection (b)(1) would simply provide
additional detail about simple
Facilitation’s existing entry checks, and
align to the level of detail currently
within the complex Facilitation rule
regarding entry checks.20
Example 2
Assume the following market:
ISE BBO: 1 × 2 (also NBBO)
CBOE: 0.75. *times; 2.25 (next best exchange
quote)
Facilitation order is entered to buy 50
contracts @2.05
No Responses are received.
The Facilitation order executes with
resting 50 lot quote @2. In this instance,
the Facilitation order is able to begin
crossed with the contra side ISE BBO
because in execution, the resting 50 lot
quote @2 is able to provide price
improvement to the facilitation order.
In renumbered subsection (b)(2), the
Exchange proposes to add language to
describe the content of the broadcast
message sent to Members upon entry of
an order into simple Facilitation. In
particular, the Exchange proposes to
specify that the broadcast message
includes the series, price and size of the
Agency Order, and whether it is to buy
or sell. Although this change reflects
current functionality, the existing rule is
silent in this regard and only indicates
that a broadcast message is sent upon
the order’s entry into the mechanism.
18 As a result, current subsections (b)(1)—(3) will
be renumbered as (b)(2)—(4). The Exchange will
also renumber current subsection (b)(3)(D) as
subsection (b)(5).
19 The term ‘‘Away Best Bid or Offer’’ or ‘‘ABBO’’
means the displayed National Best Bid or Offer not
including the Exchange’s Best Bid or Offer. See
Options 1, Section 1(a)(4).
20 See Options 3, Section 11(c)(1) and (c)(2).
Complex Facilitation refers to the Exchange’s best
bid or offer instead of the NBBO or ABBO. There
is no NBBO for complex orders as complex orders
may be executed without consideration of any
prices that might be available on other exchanges
trading the same options contracts. See Options 3,
Section 14(d). Additionally, executions of legs of
complex orders are exceptions to the prohibition on
trade-throughs. See Options 5, Section 2(b)(7).
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Identical language currently exists in
the rules governing simple Facilitation
on GEMX and MRX, which operate in
the same way as ISE’s simple
Facilitation.21
In renumbered subsection (b)(3), the
Exchange proposes to replace the words
‘‘must not exceed’’ with ‘‘will only be
considered up to’’ in order to align with
identical language in the complex
Facilitation rule.22 This change more
accurately describes that the System
will cap Responses to the size of the
auction for purposes of allocation
methodology.
In renumbered subsection (b)(4)(A),
the Exchange proposes to provide that
the facilitation order will be cancelled at
the end of the exposure period if an
execution would take place at a price
that is inferior to the best bid (offer) on
the Exchange. This is a non-substantive
change that makes clear that any
executions in Facilitation will comply
with the general prohibition on tradethroughs in Options 5, Section 2(a).
Identical language is included in the
rules governing simple Facilitation on
GEMX and MRX.23
In renumbered subsections (b)(4)(B)
and (b)(4)(C), the Exchange proposes to
amend the rule to provide that the
facilitating Member will be allocated up
to forty percent (40%) (or such lower
percentage requested by the Member) of
the original size of the facilitation order.
If the Member requests a lower
allocation percentage, the contra-side
order would receive an allocation
consistent with the percentage
requested by the Member. Regardless of
the Member’s request, the contra-side
order would still be responsible for
executing up to the full size of the
agency order if there is not enough
interest to execute the agency order at
a particular price. Similar language
indicating that the Member may request
a lower allocation percentage than 40%
is currently included in the complex
Facilitation rule, which operate in the
same way as the simple Facilitation in
this manner.24 For greater consistency
between its simple and complex
Facilitation rules, the Exchange also
proposes to make aligning, nonsubstantive changes in the complex
21 See GEMX and MRX Options 3, Section
11(b)(1).
22 See Options 3, Section 11(c)(6).
23 See GEMX and MRX Options 3, Section
11(b)(3).
24 See Options 3, Section 11(c)(7)(B) and (C).
Other options exchanges such as BX provide similar
functionality that allows members using an auction
mechanism to configure allocation priority. See,
e.g., BX Options 3, Section 13, which provides a
similar feature for the BX Options Price
Improvement Auction (‘‘PRISM’’) called
‘‘Surrender.’’
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Facilitation rule to provide that the
Member will ‘‘be allocated up to’’ forty
percent. The current complex
Facilitation language provides that the
Member will ‘‘execute at least forty
percent’’ or that the Member will ‘‘be
allocated at least forty percent.’’ 25 The
non-substantive language proposed for
complex Facilitation will therefore serve
to harmonize the complex rule with the
amended simple rule.
The Exchange also proposes to more
accurately describe Facilitation’s automatch functionality, which provides an
enhanced price improvement
opportunity for the agency order by
permitting the contra-side order to
further participate in the cross by automatching the price and size of
competing interest providing price
improvement from other market
participants.26 The rule currently
provides that upon entry of an order
into the Facilitation Mechanism, the
facilitating Electronic Access Member
can elect to automatically match the
price and size of orders, quotes and
responses received during the exposure
period up to a specified limit price or
without specifying a limit price. In this
case, the facilitating Electronic Access
Member will be allocated its full size at
each price point, or at each price point
within its limit price is a limit is
specified, until a price point is reached
where the balance of the order can be
fully executed.27 The Exchange
proposes to state that if a Member elects
to auto-match, the facilitating Electronic
Access Member will be allocated the
aggregate size of all competing quotes,
orders, and Responses (instead of ‘‘its
full size’’) at each price point, or at each
price point up to the specified limit
price (instead of ‘‘within its limit price’’)
if a limit is specified, until a price point
is reached where the balance of the
order can be fully executed. The
Exchange believes that the modified
language more accurately explains how
the functionality works today, and
better aligns with how this feature is
described in the Auto-Match Filing.28
25 Id.
26 See
Securities Exchange Act Release No. 62644
(August 4, 2010), 75 FR 48395 (August 10, 2010)
(SR–ISE–2010–61) (‘‘Auto-Match Filing’’). As
discussed later in this filing, the Auto-Match Filing
also introduced the auto-match feature on PIM. As
such, the Exchange is proposing to make similar
changes in PIM’s auto-match rule as proposed for
Facilitation’s auto-match rule.
27 See Options 3, Section 11(b)(3)(C) (renumbered
to Section 11(b)(4)(C) under this proposal).
28 The Auto-Match Filing describes the automatch feature as allowing the initiating member to
submit a contra-side order that will automatically
match the price and size set forth by the competing
interest from other market participants (i.e., auction
responses, quotes, and orders) at any price level
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For greater consistency within its
Rulebook, the Exchange will also make
the same changes in the complex
Facilitation auto-match rule in Options
3, Section 11(c)(7)(C).
Lastly, the Exchange proposes to add
at the end of Supplementary Material
.01 to Options 3, Section 11 that any
solicited contra orders entered by
Members into the Facilitation
Mechanism to trade against Agency
Orders may not be for the account of a
Nasdaq ISE Market Maker that is
assigned to the options class.29 This
language was included in the approval
order to SR–ISE–2006–78 to allow
solicited transactions in ISE’s
Facilitation Mechanism, so the
proposed change will import that
prohibition into the rule text for greater
transparency.
Solicited Order Mechanism
The Exchange proposes a number of
changes to its Solicitation rule, none of
which will change the current operation
of this technology offering.
In Options 3, Section 11(d), the
Exchange proposes to add new
subsection (d)(1),30 which will provide
that orders must be must be entered into
the Solicited Order Mechanism at a
price that is equal to or better than the
NBBO on both sides of the market;
provided that, if there is a Priority
Customer order on the Exchange best
bid or offer, the order must be entered
at an improved price. Orders that do not
meet these requirements are not eligible
for the Solicited Order Mechanism and
will be rejected. The Exchange is not
proposing any other changes to the
current entry requirements for
Solicitation. The new subsection (d)(1)
would simply provide additional detail
about simple Solicitation’s existing
entry checks, and align to the level of
detail currently within the complex
Solicitation rule regarding entry
checks.31
Example 3
Assume the following market:
ISE BBO: 1 × 2 (also NBBO)
during the auction or up to a specified limit price
if a limit is specified.
29 See Securities Exchange Act Release No. 55557
(March 29, 2007), 72 FR 16838 (April 5, 2007) (SR–
ISE–2006–78) (Order Granting Approval of
Proposed Rule Change Relating to Facilitation
Mechanism).
30 As a result, current paragraphs (d)(1)–(3) will
be renumbered accordingly. The Exchange will also
renumber current paragraph (d)(2)(D) as paragraph
(d)(4).
31 See Options 3, Section 11(e)(1). Complex
Solicitation refers to the Exchange’s best bid or offer
instead of the NBBO. As noted above, there is no
NBBO for complex orders, and executions of legs
of complex orders are exceptions to the prohibition
of trade-throughs. See supra note 20.
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CBOE: 0.75. × 2.25 (next best exchange quote)
Solicitation order is entered to buy 500
contracts @ 2.05
The Solicitation order is rejected upon
entry for being crossed with the NBBO
on the contra side. In contrast to
Example 2 above for Facilitation, the
Solicitation order in this instance is not
able to begin crossed with the contra
side ISE BBO because of the all-or-none
contingency of the Solicitation order.32
In renumbered subsection (d)(2), the
Exchange proposes to add language to
describe the content of the broadcast
message sent to Members upon entry of
an order into simple Solicitation. In
particular, the Exchange proposes to
specify that the broadcast message
includes the series, price and size of the
Agency Order, and whether it is to buy
or sell. While this change reflects
current functionality, the existing rule is
silent in this regard and only indicates
that a broadcast message is sent upon
the order’s entry into the mechanism.
Identical language already exists in the
rules governing simple Solicitation on
GEMX and MRX, which operate in the
same way as the ISE’s simple
Solicitation.33
Lastly, the Exchange also proposes
technical changes in renumbered
subsection (d)(3) to correct the internal
lettering and cross-cites within
paragraphs (A) through (C).
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Price Improvement Mechanism
The Exchange proposes a number of
changes to the PIM rule, none of which
will change the current operation of this
technology offering. As noted above,
many of these modifications are similar
to the changes proposed for Facilitation.
The Exchange proposes in Options 3,
Section 13(b)(2) to delete ‘‘national best
bid or offer’’ as NBBO is already defined
in subsection (b)(1) above. The
Exchange proposes in subsection (c)(2)
to provide that responses in the PIM
(i.e., ‘‘Improvement Orders’’) will only
be considered up to the size of the
Agency Order. The proposed
amendment will specifythat the System
will cap the size of the Improvement
Orders to the auction size for purposes
of the allocation methodology. This is
similar to the change proposed above for
simple Facilitation, and also aligns to
identical language in the complex PIM
rule.34 The Exchange also proposes in
subsection (c)(3) to amend the internal
numbering from (1) and (2) to (i) and (ii)
32 See Options 3, Section 11(d) (requiring that
each Solicitation order be designated as all-ornone).
33 See GEMX and MRX Options 3, Section
11(d)(1).
34 See Options 3, Section 13(e)(4)(i).
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for greater numbering consistency
within the PIM rule.
In subsection (d)(3), which describes
how allocation and execution takes
place in simple PIM, the Exchange
proposes that the Counter-Side Order
will be allocated the greater of one
contract or 40% (or such lower
percentage requested by the Member) of
the initial size of the Agency Order.
Similar to Facilitation as discussed
above, the System currently permits
Members entering orders into PIM to
elect to receive a percentage allocation
that is less than 40%, although the
current rule is silent in this regard. If the
Member requests a lower allocation
percentage, the Counter-Side Order
would receive an allocation consistent
with the percentage requested by the
Member. Regardless of the Member’s
request, the Counter-Side Order would
still be responsible for executing up to
the full size of the agency order if there
is not enough interest to execute the
agency order at a particular price.
Complex PIM, which shares the same
allocation feature as simple PIM,
already has this concept within the rule,
so the proposed changes will align the
simple PIM rule with the complex PIM
rule.35
The Exchange also proposes to more
accurately describe PIM’s auto-match
functionality in a similar manner as
Facilitation’s auto-match functionality,
as discussed above. In this instance, the
Exchange proposes to amend the third
sentence of subsection (d)(3) to provide:
‘‘If a Member elects to auto-match, the
Counter-Side Order will be allocated the
aggregate size of all competing quotes,
orders, and Responses at each price
point up to the specified limit price if
a limit is specified, until a price point
is reached where the balance of the
order can be fully executed.’’ Similar to
the proposed amendments to simple
Facilitation’s auto-match, the Exchange
believes that the proposed language for
simple PIM’s auto-match more clearly
explains how the functionality works
today, and better aligns with how this
feature is described in the Auto-Match
Filing. For greater consistency within its
Rulebook, the Exchange will also make
the same changes in the complex PIM
auto-match rule in Options 3, Section
13(e)(5)(iii).
The Exchange further proposes
technical amendments in subsection
(d)(3) to replace all instances of
‘‘Counter-Side order’’ as ‘‘Counter-Side
Order’’ to use the correct terminology.
Lastly, the Exchange proposes to
35 See Options 3, Section 13(e)(5)(iii). As noted
above, BX has a similar feature called Surrender for
its PRISM auction. See supra note 24.
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provide in Supplementary Material .04
to Options 3, Section 13 that PIMs will
not queue or overlap in any manner,
except as described in Options 3,
Section 11(f) and (g). Sections 11(f) and
(g) set forth the governing provisions for
concurrent complex auctions and
concurrent complex and simple
auctions. The proposed changes to add
in the cross-cites to Sections 11(f) and
(g) will make clear that two simple or
two complex PIM auctions are not
permitted to run concurrently, but that
a simple PIM auction may run
concurrently with a complex PIM
auction.
Trade Value Allowance
The Exchange proposes a nonsubstantive change to amend the TVA
rule in Supplementary Material .03 to
Options 3, Section 14 to add a cross-cite
to the complex PIM rule in Options 3,
Section 13, which was inadvertently
omitted when the Exchange relocated
the complex auctions rules in a prior
filing.36 In SR–ISE–2019–05, the
original cross-cite within the TVA rule
was updated from Supplementary
Material .08 to Rule 722 to Rule 716
(now Options 3, Section 11).
Supplementary Material .08 to Rule 722
set forth the complex auction
mechanism rules, namely complex
Facilitation, Solicitation, and PIM. SR–
ISE–2019–05 relocated complex
Facilitation and Solicitation to Rule 716
(now Options 3, Section 11), but moved
complex PIM to Rule 723 (now Options
3, Section 13). As such, the original
cross-cite in the TVA rule should have
been updated to include complex PIM
in Rule 723 but was inadvertently
omitted.
TVA is a functionality that allows
complex orders to trade outside of their
expected notional trade amount by a
specified amount. The amount of TVA
permitted may be determined by the
Member, or a default value determined
by the Exchange and announced to
Members.37 The TVA rule currently
provides, however, that any amount of
TVA is permitted in auction
mechanisms pursuant to Options 3,
Section 11 when auction orders do not
trade solely with their contra-side order.
The Exchange now proposes to add a
cross-cite to Options 3, Section 13 to
specify that TVA also applies to
complex PIM auctions in this manner.
The Exchange will also provide that
TVA applies to ‘‘complex’’ mechanisms
in the cited rules. These changes will
36 See Securities Exchange Release No. 85308
(March 13, 2019), 84 FR 10136 (March 19, 2019)
(SR–ISE–2019–05).
37 See Supplementary Material .03 to Options 3,
Section 14.
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The Exchange proposes to amend its
anti-internalization (‘‘AIQ’’) rule in
Options 3, Section 15(a)(3)(A).
Specifically, the Exchange proposes to
add that AIQ does not apply during the
opening process or reopening process
following a trading halt pursuant to
Options 3, Section 8 to provide more
specificity on how this functionality
currently operates. The Exchange notes
that the same procedures used during
the opening process are used to reopen
an option series after a trading halt, and
therefore proposes to specify that AIQ
will not apply during an Opening
Process (i.e., the opening and halt
reopening process) in addition to an
auction, as currently within the Rule.
AIQ is unnecessary during an Opening
Process due to the high level of control
that Market Makers exercise over their
quotes during this process. The
proposed changes will align the
Exchange’s AIQ rule with BX’s AIQ
rule, which sets forth materially
identical functionality.38
through the ABBO, when the ABBO is
better than the Exchange BBO.
Supplementary Material .02 to
Options 5, Section 2 currently provides
that when the automatic execution of an
incoming order would result in an
impermissible Trade-Through, such
order would be exposed at the current
NBBO to all Exchange Members for a
time period established by the Exchange
not to exceed one (1) second.
Supplementary Material .01 to Options
5, Section 3, however, currently
provides that when the price of an
incoming limit order that is not
executable upon entry would lock or
cross a Protected Quotation, such order
would be handled in accordance with
the Exposure process in Supplementary
Material .02 to Options 5, Section 2.40
The Exchange proposes to modify
Supplementary Material .02 by
removing the portion related to the
automatic execution of an incoming
order that would result in an
impermissible Trade-Through, and
instead providing within this Rule that
Exposure will initiate when an
incoming order is priced at or through
the ABBO, when the ABBO is better
than the Exchange BBO. The current
language in Supplementary Material .02
only specifies that Exposure is initiated
when the price of the incoming order is
crossed with the ABBO (i.e., would
result in an impermissible TradeThrough), but does not specify the
scenario in Supplementary Material .01
to Options 5, Section 3 when the price
is locked. As such, the proposed
changes seek to enhance the accuracy of
the rules by codifying both scenarios
within the Exposure rule in
Supplementary Material .02.
Exposure Mechanism
Technical Amendments
Under the linkage rules, the Exchange
cannot execute orders at a price that is
inferior to the NBBO, nor can the
Exchange place an order on its book that
would cause the Exchange best bid or
offer to lock or cross another exchange’s
quote.39 In these circumstances,
Supplementary Material .02 to Options
5, Section 2 sets forth an Exposure
mechanism for automated order
handling where eligible incoming orders
are exposed at the NBBO to all Members
to give them an opportunity to execute
the order at the NBBO price or better.
The Exchange proposes to make clear
within Supplementary Material .02 that
an incoming order will be eligible for
Exposure if the order is priced at or
The Exchange proposes technical
changes in the Supplementary Material
to Options 3, Section 11. First, the
Exchange proposes in Supplementary
Material .03 to update an incorrect
cross-cite from Options 3, Section 22(d)
to Section 22(b), which limits principal
transactions. Second, the Exchange will
make corrective changes to renumber
Supplementary Material .07 to .05, and
to update the cross-cite to paragraph
(a)(2)(i) therein to paragraph (a)(2)(A).
Third, the Exchange proposes in
renumbered Supplementary Material .07
to update the reference to ‘‘Block
Mechanism’’ to ‘‘Block Order
align the rule text to how TVA is
presently implemented in the System.
The Exchange notes that its complex
auction mechanisms provide an
opportunity for market participants to
respond with better-priced interest that
could execute against an Agency Order.
As such, the Exchange believes that it is
appropriate to ensure that paired orders
entered into complex Facilitation,
Solicitation and PIM that are broken up
due to better-priced interest are actually
executed against such better-priced
interest, and are not restricted from
trading due to TVA settings of one or
more Members.
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Anti-Internalization
38 See
BX Options 3, Section 15(c)(1).
Options 5, Sections 2 and 3. See also
Options 3, Section 5(d).
39 See
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40 Such order would also be handled in
accordance with Supplementary Material .04 (NonCustomer Orders that opt out of the Exposure
mechanism) or .05 (Sweep Orders) to Options 5,
Section 2, as applicable. See Supplementary
Material .01 to Options 5, Section 3.
PO 00000
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Mechanism’’ to use the correct
terminology.
Lastly, the Exchange proposes some
harmonizing changes throughout its
Rulebook to align with the rule
numbering and titles with that of its
affiliates. Specifically, the Exchange
proposes to add a new Options 4B and
reserve it in the Rulebook in order to
harmonize its Options Rule numbering
with that of its affiliates, GEMX and
Nasdaq PHLX LLC (‘‘Phlx’’). The
Exchange also proposes to retitle
General 4 (currently titled ‘‘Regulation’’)
to ‘‘Registration Requirements’’ to
harmonize its General Rule titles with
that of its affiliates The Nasdaq Stock
Market LLC and Nasdaq BX, Inc.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,41 in general, and furthers the
objectives of Section 6(b)(5) of the Act,42
in particular, in that it is designed to
promote just and equitable principles of
trade, to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and, in general to protect
investors and the public interest.
The Exchange believes that its
proposal is consistent with the
protection of investors and public
interest as all of the proposed changes
will increase transparency around how
various existing Exchange mechanisms
work today. As such, no System changes
to existing functionality are being made
pursuant to this proposal. Rather, this
proposal is designed to reduce any
potential investor confusion as to the
features and applicability of certain
functionality presently available on the
Exchange.
Furthermore, many of the proposed
changes seek to provide greater
harmonization between the rules of the
Exchange and its affiliates (notably rules
related to Block, Facilitation,
Solicitation, and AIQ), or between the
Exchange’s own simple and complex
auction rules (notably for simple and
complex Facilitation, Solicitation, and
PIM).43 The Exchange believes that
these harmonizing changes would result
in greater uniformity, and ultimately
less burdensome and more efficient
regulatory compliance by market
participants. As such, the proposed rule
change would foster cooperation and
coordination with persons engaged in
facilitating transactions in securities and
41 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
43 As noted above, the Exchange seeks to add
granularity to its simple auction rules to align with
the level of detail that currently exists within its
complex auction rules. See supra note 17.
42 15
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would remove impediments to and
perfect the mechanism of a free and
open market and a national market
system. The Exchange also believes that
more consistent rules will increase the
understanding of the Exchange’s
operations for Members that are also
members on the Exchange’s affiliates,
thereby contributing to the protection of
investors and the public interest.
Specifically, the Exchange believes
that the proposed universal changes to
replace all instances of Professional
interest with non-Priority Customer
interest throughout the Exchange’s
auction allocation rules will add greater
consistency within the Exchange’s rules.
As discussed above, the Exchange
previously made the same modifications
within its standard allocation rule in
Options 7, Section 10, so the proposed
changes will promote more consistent
terminology in the rules and make them
easier for market participants to
navigate and comprehend. The
Exchange also believes that using the
term ‘‘non-Priority Customer’’ reduces
any potential confusion regarding any
reference to Professional Orders or
Professional Customer orders. In
addition, the Exchange believes that
clearly delineating between orders and
Reponses of the same capacity in the
Facilitation and Solicitation rules will
bring clarity and transparency around
how allocation takes place in those
auction mechanisms. The complex
Facilitation and Solicitation rules
currently differentiate between orders
and Responses,44 so the Exchange is
aligning the simple rule to the level of
granularity already found in the
complex rule while also specifying the
capacity of such order or Response
within the simple and complex rules.
As noted above, the Exchange is not
changing the current allocation
methodology, and auction orders and
Responses of the same capacity do not
get treated differently for allocation
purposes today.
The Exchange believes that the
proposed changes to the Block rule are
consistent with the protection of
investors and the public interest as the
modifications will more accurately
reflect the handling of auctions in
Block, specifically as it relates to
execution and allocation. The proposed
changes will specify that better priced
interest entered into Block gets executed
in full only if there is sufficient size to
execute against such interest, and that
Priority Customer interest gets executed
first in price time priority. This
specificity will be helpful to market
participants utilizing Block and provide
greater certainty as to how their Block
orders will be executed and allocated.
The Exchange also believes that the
proposed changes will continue to
ensure a fair and orderly market by
maintaining and protecting the priority
of Priority Customer orders, while still
affording the opportunity for all market
participants to seek liquidity and
potential price improvement during
each Block auction commenced on the
Exchange. As noted above, the Exchange
is not proposing any changes to the
current execution or allocation
methodology but believes that the
changes will promote consistency with
the rulebook of its affiliated exchange
BX, which offers identical
functionality.45
Similarly, the Exchange believes that
specifying the entry checks for simple
Facilitation and Solicitation is
consistent with the protection of
investors and the public interest by
providing greater consistency to the
level of granularity currently within the
complex Facilitation and Solicitation
entry checks.46 The Exchange also
believes it is appropriate to require that
the Facilitation order be entered at an
improved price if there is a Priority
Customer order on the same side
Exchange best bid or offer as the agency
order. The Exchange believes this will
ensure a fair and orderly market by
maintaining priority of orders and
quotes and protecting Priority Customer
orders, while still affording the
opportunity to seek liquidity and for
potential price improvement during
each Facilitation auction commenced on
the Exchange. For the same reasons, the
Exchange believes that it is appropriate
to require that the Solicitation order be
entered at an improved price if there is
a Priority Customer order on the
Exchange best bid or offer.
The Exchange further believes that it
is consistent with the Act to specify the
contents of the broadcast message sent
to Members upon entry of an order into
simple Facilitation and Solicitation as
the changes will remove any potential
confusion about what type of auction
information is disseminated. Currently,
the broadcast message in simple
Facilitation and Solicitation includes
the series, price, and size of the Agency
Order, and whether it is to buy or sell.
As this information is helpful to auction
participants, the Exchange believes that
codifying this information into the
simple Facilitation and Solicitation
rules may encourage greater
participation within these mechanisms,
45 See
46 See
44 See
supra note 14.
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supra notes 20 and 31, and accompanying
text.
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12767
thereby increasing the opportunity for
options orders to receive executions on
the Exchange. The Exchange is not
proposing any changes to the current
content of the broadcast message but
wants to make this clear in its rules,
which, with this change, would be
consistent with the rules of its affiliated
exchanges that offer identical
functionality.47 Likewise, the proposed
change to add that a facilitation order
would be cancelled at the end of the
exposure period if an execution would
take place at a price that is inferior to
the best bid (offer) on the Exchange is
intended to ensure compliance with the
general prohibition on trade-throughs in
Options 5, Section 2(a), and to ensure
consistency across the rules of the
Exchange and its affiliates that offer
identical functionality.48
The proposed changes to replace
‘‘must not exceed’’ with ‘‘will only be
considered up to’’ in the simple
Facilitation and PIM rules are intended
to more accurately describe that the
System will cap the size of Responses to
the size of the agency order for purposes
of allocation. The Exchange is not
amending current System behavior;
rather, the modifications will more
clearly articulate the handling of
Responses by the System. In addition,
the proposed changes will serve to
harmonize the simple and complex
auction rules, thereby resulting in
greater uniformity and ultimately less
burdensome and more efficient
regulatory compliance by market
participants.49
The Exchange believes that its
proposal to specify in the simple
Facilitation and PIM rules that an
initiating Member may elect to receive
a percentage allocation lower than 40%
is consistent with the Act. This feature
provides an initiating Member that
submits an order into Facilitation or
PIM with the flexibility to configure its
allocation percentage up to the full 40%
entitlement. The Exchange notes that
regardless of the Member’s instruction,
the contra-side order would still be
responsible for executing up to the full
size of the agency order if there is not
enough interest to execute the agency
order at a particular price. The
Exchange continues to believe that the
40% allocation entitlement is consistent
with the statutory standards for
competition and free and open markets
by promoting price competition within
Facilitation and PIM as Members would
still have a reasonable opportunity to
compete for a significant percentage of
47 See
supra notes 21 and 33.
supra note 23.
49 See supra notes 22 and 34.
48 See
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the incoming order. The Exchange also
notes that the configurable 40%
allocation entitlement for simple
Facilitation and PIM is consistent with
the configurable allocation entitlements
in place on complex Facilitation and
PIM as well as on its affiliated exchange,
BX.50 Accordingly, the Exchange
believes that the proposed changes will
promote consistency across the
rulebooks of exchanges offering
identical functionality and within its
own Rulebook as well.
With respect to the proposed changes
to the Facilitation and PIM auto-match
feature, the Exchange is amending the
current rule text so that it more
accurately explains how the Exchange
will allocate an order designated for
auto-match today. As discussed above,
the Exchange is not making any
substantive changes to the allocation
procedure itself; rather the proposed
changes are intended to better align how
this feature is described in the AutoMatch Filing.51 Similarly, the Exchange
believes that the proposed change in
Supplementary Material .01 to Options
3, Section 11 to add the provision that
any solicited contra orders entered by
Members into the Facilitation
Mechanism to trade against Agency
Orders may not be for the account of a
Nasdaq ISE Market Maker that is
assigned to the options class will better
align the rule text with related filing. As
discussed above, this restriction was
included in the approval order to the
rule filing that allowed solicited
transactions in the Facilitation
Mechanism, so the Exchange will
import that language into the rule text
for greater transparency.52
The proposed change in
Supplementary Material .04 to Options
3, Section 13 to provide that PIMs will
not queue or overlap in any manner,
except as described in Options 3,
Section 11(f) and (g) will make clear that
two simple or complex PIM auctions are
not permitted to run concurrently, but
that a simple PIM auction may run
concurrently with a complex PIM
auction. The Exchange believes that this
change will reduce any potential
confusion around how simultaneous
PIM auctions are processed by the
System.
The Exchange believes that the
proposed change to the TVA rule is a
non-substantive change to say that any
amount of TVA is permitted in complex
PIM (in addition to all of the other
complex auction mechanisms in
Options 3, Section 11). This is a
supra notes 24 and 35.
supra note 28.
52 See supra note 29.
corrective change as the cross-cite to
complex PIM within the TVA rule was
inadvertently dropped in a prior filing
that relocated the complex auction
rules.53 As noted above, the Exchange’s
complex auction mechanisms provide
an opportunity for market participants
to respond with better-priced interest
that could execute against an Agency
Order. Accordingly, the Exchange
believes that it is appropriate to ensure
that paired orders entered into complex
Facilitation, Solicitation and PIM that
are broken up due to better-priced
interest are actually executed against
such better-priced interest, and are not
restricted from trading due to TVA
settings of one or more Members.
The Exchange believes its proposal to
provide that AIQ will not apply during
an Opening Process (i.e., the opening
process or halt reopening process) will
more accurately state how this
functionality currently operates. AIQ
prevents Market Makers from trading
against their own quotes and orders.
While the Exchange believes that this
protection is useful for Market Makers
to manage their trading during regular
market hours, applying AIQ is
unnecessary during an Opening Process
due to the high level of control that
Market Makers already exercise over
their quotes during this process.
Furthermore, the proposed AIQ changes
will promote consistency with the
rulebook of its affiliated exchange BX,
which offers identical functionality.54
The Exchange believes that its
proposal to provide that Exposure will
initiate when an incoming order is
priced at or through the ABBO, when
the ABBO is better than the Exchange
BBO, is consistent with the Act. As
discussed above, the current language in
Supplementary Material .02 only
specifies that Exposure is initiated when
the price of the incoming order is
crossed with the ABBO (i.e., would
result in an impermissible TradeThrough), but does not specify the
scenario in Supplementary Material .01
to Options 5, Section 3 when the price
is locked. Supplementary Material .01 to
Options 5, Section 3, however, also
currently provides that when the price
of an incoming limit order that is not
executable upon entry would lock or
cross a Protected Quotation, such order
would be handled in accordance with
the Exposure process in Supplementary
Material .02 to Options 5, Section 2. As
such, the proposed changes will
enhance the accuracy of the rules by
codifying both scenarios within the
Exposure rule in Supplementary
50 See
51 See
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53 See
54 See
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supra note 36.
supra note 38.
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Material .02, and will continue to
ensure that such order complies with
the general prohibition on tradethroughs in Options 5, Section 2(a).
The Exchange further believes that the
technical changes it is proposing
throughout Options 3 are nonsubstantive changes intended to
enhance the accuracy of the Exchange’s
Rulebook, which will alleviate potential
confusion as to the applicability of its
rules. As discussed above, these changes
consist of updating internal rule
lettering and cross-cites, and using
correct terminology. Lastly, the
Exchange believes that the harmonizing
changes to add a new Options 4B in its
Rulebook and to retitle General 4, each
as discussed above, will serve to further
harmonize its Rule numbering and
titling with that of its affiliates, thereby
promoting efficiency and conformity of
its processes with those of its affiliated
exchanges.
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. As indicated
above, no System changes to existing
functionality are being made pursuant
to this proposal; rather, this proposal is
designed to reduce any potential
investor confusion as to the features and
applicability of certain functionality
presently available on the Exchange.
Therefore, the proposed changes are
designed to enhance clarity and
consistency in the Exchange’s Rulebook.
Furthermore, many of the proposed
changes seek to provide greater
harmonization between the rules of the
Exchange and its affiliates, and therefore
promotes fair competition among the
options exchanges. In particular, the
proposed changes discussed above for
Block and AIQ are based on BX rules
governing identical functionality,55 and
the Facilitation and Solicitation changes
around broadcast message content and
trade-through prohibition compliance
(Facilitation only) are based on GEMX
and MRX rules governing identical
functionality.56 The Exchange notes that
it operates in a highly competitive
market in which market participants can
readily direct order flow to competing
venues who offer similar functionality.
The Exchange believes that the
55 See BX Options 3, Section 11(a) (Block) and
Section 15(c)(1) (AIQ).
56 See GEMX and MRX Options 3, Section
11(b)(1) (Facilitation broadcast message), Options 3,
Section 11(d)(1) (Solicitation broadcast message),
and Options 3, Section 11(b)(3) (Facilitation
executions trade-through compliance).
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proposed rule change will enhance
competition among the various markets
for auction execution, potentially
resulting in more active trading in
auction mechanisms across all options
exchanges.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A)(iii) of the Act 57 and
paragraph (f)(6) of Rule 19b–4
thereunder.58
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
• 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–2021–01 on the subject line.
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57 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
the proposed rule change at least five business days
prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Exchange has satisfied this
requirement.
58 17
20:27 Mar 03, 2021
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.59
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–04428 Filed 3–3–21; 8:45 am]
Electronic Comments
VerDate Sep<11>2014
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–2021–01. 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 20549–1090 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–2021–01, and should
be submitted on or before March 25,
2021.
Jkt 253001
BILLING CODE 8011–01–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
NextGen Advisory Committee; Notice
of Public Meeting
Federal Aviation
Administration (FAA), Department of
Transportation.
ACTION: Notice of public meeting.
AGENCY:
59 17
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This notice announces a
meeting of the NextGen Advisory
Committee (NAC).
DATES: The meeting will be held
virtually only, on March 18, 2021, from
10:00 a.m.–1:00 p.m. EDT. Requests to
attend the meeting virtually and request
for accommodations for a disability
must be received by March 5, 2021. If
you wish to make a public statement
during the meeting, you must submit a
written copy of your remarks by March
5, 2021. Requests to submit written
materials, to be reviewed by NAC
Members before the meeting, must be
received no later than March 5, 2021.
ADDRESSES: The meeting will be a
virtual meeting only. Virtual meeting
information will be provided upon
registration. Information on the NAC,
including copies of previous meeting
minutes is available on the NAC
internet website at https://www.faa.gov/
about/office_org/headquarters_offices/
ang/nac/. Members of the public
interested in attending must send the
required information listed in the
SUPPLEMENTARY INFORMATION to 9-AWAANG-NACRegistration@faa.gov.
FOR FURTHER INFORMATION CONTACT: Greg
Schwab, NAC Coordinator, U.S.
Department of Transportation, at
gregory.schwab@faa.gov or 202–267–
1201. Any requests or questions not
regarding attendance registration should
be sent to the person listed in this
section.
SUPPLEMENTARY INFORMATION:
SUMMARY:
I. Background
The Secretary of Transportation
established the NAC under agency
authority in accordance with the
provisions of the Federal Advisory
Committee Act (FACA), as amended,
Public Law 92–463, 5 U.S.C. App. 2, to
provide independent advice and
recommendations to FAA, and to
respond to specific taskings received
directly from FAA. The NAC
recommends consensus-driven advice
for FAA consideration relating to Air
Traffic Management System
modernization.
II. Agenda
At the meeting, the agenda will cover
the following topics:
• NAC Chairman’s Report
• FAA Report
• NAC Subcommittee Chairman’s
Report
Æ Risk and Mitigations update for the
following focus areas: Multiple
Runway Operations, Data
Communications, Performance
Based Navigation, Surface and Data
Sharing, and Northeast Corridor
E:\FR\FM\04MRN1.SGM
04MRN1
]]>Agencies
[Federal Register Volume 86, Number 41 (Thursday, March 4, 2021)]
[Notices]
[Pages 12762-12769]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-04428]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-91223; File No. SR-ISE-2021-01]
Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Various
Rules in Options 3 and Options 5
February 26, 2021.
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 February 18, 2021, Nasdaq ISE, LLC (``ISE'' or ``Exchange'') filed
with the Securities and Exchange Commission (``SEC'' or ``Commission'')
the proposed rule change as described in Items I, II, and III, below,
which Items have been prepared by the Exchange. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend various rules in Options 3 and
Options 5.
The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/ise/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 purpose of the proposed rule change is to amend various rules
in Options 3 and Options 5. The proposed changes consist of conforming
existing rules to current System technology, amending rule text to add
greater detail on how certain Exchange functionality operate today, and
conforming language within the Exchange's rules to the rules of other
exchanges. As such, no System changes to existing functionality are
being made pursuant to this proposal. Rather, this proposal is designed
to reduce any potential investor confusion as to the features and
applicability of certain functionality presently available on the
Exchange. These changes are described in detail below, and include
amending Exchange rules governing: (1) The Block Order Mechanism
(``Block''),\3\ (2) the Facilitation Mechanism (``Facilitation''),\4\
(3) the Solicited Order Mechanism (``Solicitation''),\5\ (4) the Price
Improvement Mechanism (``PIM''),\6\ (5) Trade Value Allowance
(``TVA''),\7\ (6) Anti-Internalization,\8\ and (7) the exposure
mechanism (``Exposure'').\9\
---------------------------------------------------------------------------
\3\ See Options 3, Section 11(a).
\4\ See Options 3, Section 11(b).
\5\ See Options 3, Section 11(d).
\6\ See Options 3, Section 13.
\7\ See Supplementary Material .03 to Options 3, Section 14.
\8\ See Options 3, Section 15(a)(3)(A).
\9\ See Supplementary Material .02 to Options 5, Section 2.
---------------------------------------------------------------------------
Universal Changes
In September 2019, the Exchange amended its regular allocation rule
in Options 7, Section 10 (Priority of Quotes and Orders) to make non-
substantive changes, among other changes, to replace references to
Professional interest with non-Priority Customer interest.\10\ The
Exchange now proposes to make similar changes to replace all instances
of ``Professional'' interest with ``non-Priority Customer'' interest
throughout its auction allocation rules in Options 3, Section 11 and
Section 13 to align with the changes made in SR-ISE-2019-21.\11\ While
the term ``Professional Orders'' is defined within Options 1, Section
1(a)(39) as an order that is for the account of a person or entity that
is not a Priority Customer, the Exchange believes that using the term
``non-Priority Customer'' is more clear in describing the types of
market participant to which the allocation applies, and also reduces
confusion regarding any reference to Professional Orders or
Professional Customer orders.
---------------------------------------------------------------------------
\10\ See Securities Exchange Act Release No. 86947 (September
12, 2019), 84 FR 49165 (September 18, 2019) (SR-ISE-2019-21).
\11\ Specifically in Options 3, Section 11, the Exchange will
amend current subsections (a)(2)(B), (b)(3)(A)-(C) (renumbered to
(b)(4)(A)-(C) under this proposal), (c)(7)(A)-(C), (d)(2)(C)
(renumbered to (d)(3)(C) under this proposal), and (e)(4)(D). In
Options 3, Section 13, the Exchange will amend current subsections
(d)(1)-(3) and (e)(5)(i)-(iii).
---------------------------------------------------------------------------
In addition, the Exchange proposes to make universal changes in its
Facilitation and Solicitation rules \12\ to clearly delineate between
orders and Responses \13\ of the same capacity. For example, where the
existing rule text currently states ``Priority Customer bids
(offers),'' the Exchange proposes instead to state ``Priority Customer
Orders and Priority Customer Responses to buy (sell).'' The Exchange
notes that this is merely a non-substantive change as auction orders
and Responses of the same capacity do not get treated differently for
allocation purposes today. The rules for complex Facilitation and
Solicitation already distinguish between orders and Responses, so the
Exchange is simply amending those complex rules to clearly state how,
for example, Priority Customer Complex Orders and Priority Customer
Responses get allocated today \14\ With the proposed changes, the
Exchange seeks to include a similar level of detail within its simple
and complex Facilitation and Solicitation rules in order to bring
transparency
[[Page 12763]]
around how allocation takes place in those auction mechanisms today.
---------------------------------------------------------------------------
\12\ Specifically in Options 3, Section 11, subsections
(b)(3)(A)-(C) (renumbered to (b)(4)(A)-(C)), and (d)(2)(A) and (C)
(renumbered to (d)(3)(A) and (C)) will be updated.
\13\ A ``Response'' is an electronic message that is sent by
Members in response to a broadcast message. See Options 3, Section
11.
\14\ See Options 3, Section 11(c)(7) and (e)(4).
---------------------------------------------------------------------------
Block Order Mechanism
The Exchange proposes minor changes to the current descriptions of
the Block execution and allocation process in Options 3, Section 11(a).
As discussed below, the proposed Block changes are non-substantive in
nature, and are intended to harmonize with the Block rule on its
affiliated market, BX Options (``BX'') in order to ensure rule
consistency between the Exchange and its affiliate offering identical
functionality.
First, the Exchange proposes to add ``up to the size of the block
order'' at the end of subsection (a)(2)(A). As amended, the rule will
provide that bids (offers) on the Exchange at the time the block order
is time the block order is executed that are priced higher (lower) than
the block execution price, as well as Responses that are priced higher
(lower) than the block execution price, will be executed in full at the
block execution price up to the size of the block order. The Exchange
is making this non-substantive change to align with BX's Block
rule,\15\ which will ensure rule consistency for identical
functionality across affiliated markets. The language states that
better priced interest gets executed in full only if there is
sufficient size to execute against such interest, which is how block
orders are executed and priced on the Exchange and BX today.
---------------------------------------------------------------------------
\15\ See BX Options 3, Section 11(a)(2)(A).
---------------------------------------------------------------------------
Second, the Exchange proposes a non-substantive change in the first
sentence of subsection (a)(2)(B) to replace ``first and in time
priority'' with ``first in price time priority.'' As amended, the rule
will provide that at the block execution price, Priority Customer
Orders and Priority Customer Responses will be executed first in price
time priority. This is not a change to the current Block allocation
methodology, but rather a non-substantive change for better
readability, and to align with BX's Block rule \16\ in order to ensure
rule consistency for identical functionality across affiliated markets.
Block orders will continue to trade at a single execution price that
allows the maximum number of contracts of the block order to be
executed against both the Responses entered to trade against the order
and unrelated interest on the Exchange's order book.
---------------------------------------------------------------------------
\16\ See BX Options 3, Section 11(a)(2)(B).
---------------------------------------------------------------------------
Example 1
Block order is entered to buy 50 contracts @1.50
The following Responses are received:
Priority Customer Response 1 to sell 40 contracts @1.40
Priority Customer Response 2 to sell 10 contracts @1.40
Priority Customer Response 3 to sell 10 contracts @1.39
The block execution price would be $1.40 (i.e., the price at
which the maximum number of contracts could be executed) and would
be executed as follows:
Block order trades 10 with Priority Customer Response 3 @1.40
Block order trades 40 with Priority Customer Response 1 @1.40
As shown above, Priority Customer Response 3 would be executed in
full since it is priced better than the block execution price and there
is sufficient size to execute Response 3 against the block order, while
Priority Customer Responses 1 and 2, which are priced at the block
execution price, would participate in price time priority--i.e., the
remaining 40 contracts would go to Response 1, which was received
before Response 2.
Facilitation Mechanism
The Exchange proposes a number of changes to its Facilitation rule,
none of which will change the current operation of this technology
offering. Many of the proposed changes are intended to align the simple
Facilitation rule in Options 3, Section 11(b) with the complex
Facilitation rule in Options 3, Section 11(c) where relevant. In
October 2018, the Exchange amended its complex order rules to provide
greater clarity and additional detail regarding the operation and
applicability of complex order functionality, including complex auction
mechanisms like complex Facilitation.\17\ Accordingly, the Exchange
seeks to make aligning changes and update its simple auction mechanism
rules to similarly provide the level of detail that now exists in its
complex auction mechanism rules. The proposed changes are also intended
to align with the simple Facilitation rules of the Exchange's
affiliated markets, Nasdaq GEMX (``GEMX'') and Nasdaq MRX (``MRX'').
The Exchange also proposes to more accurately describe how orders will
be allocated in Facilitation's ``auto-match'' functionality.
---------------------------------------------------------------------------
\17\ See Securities Exchange Act Release No. 84373 (October 5,
2018), 83 FR 51730 (October 12, 2018) (SR-ISE-2018-56) (``Complex
Order Filing''). As discussed later in this filing, the Complex
Order Filing also clarified the Exchange's complex Solicitation and
PIM rules, and the Exchange is proposing to align the simple
Solicitation and PIM rules with the complex rules where possible.
---------------------------------------------------------------------------
In Options 3, Section 11(b), the Exchange proposes to add new
subsection (b)(1),\18\ which will provide that Orders must be entered
into the Facilitation Mechanism at a price that is (A) equal to or
better than the NBBO on the same side of the market as the agency order
unless there is a Priority Customer order on the same side Exchange
best bid or offer, in which case the order must be entered at an
improved price; and (B) equal to or better than the ABBO \19\ on the
opposite side. Orders that do not meet these requirements are not
eligible for the Facilitation Mechanism and will be rejected. The
Exchange is not proposing any other changes to the current entry
requirements for Facilitation. The new subsection (b)(1) would simply
provide additional detail about simple Facilitation's existing entry
checks, and align to the level of detail currently within the complex
Facilitation rule regarding entry checks.\20\
---------------------------------------------------------------------------
\18\ As a result, current subsections (b)(1)--(3) will be
renumbered as (b)(2)--(4). The Exchange will also renumber current
subsection (b)(3)(D) as subsection (b)(5).
\19\ The term ``Away Best Bid or Offer'' or ``ABBO'' means the
displayed National Best Bid or Offer not including the Exchange's
Best Bid or Offer. See Options 1, Section 1(a)(4).
\20\ See Options 3, Section 11(c)(1) and (c)(2). Complex
Facilitation refers to the Exchange's best bid or offer instead of
the NBBO or ABBO. There is no NBBO for complex orders as complex
orders may be executed without consideration of any prices that
might be available on other exchanges trading the same options
contracts. See Options 3, Section 14(d). Additionally, executions of
legs of complex orders are exceptions to the prohibition on trade-
throughs. See Options 5, Section 2(b)(7).
---------------------------------------------------------------------------
Example 2
Assume the following market:
ISE BBO: 1 x 2 (also NBBO)
CBOE: 0.75. *times; 2.25 (next best exchange quote)
Facilitation order is entered to buy 50 contracts @2.05
No Responses are received.
The Facilitation order executes with resting 50 lot quote @2. In this
instance, the Facilitation order is able to begin crossed with the
contra side ISE BBO because in execution, the resting 50 lot quote @2
is able to provide price improvement to the facilitation order.
In renumbered subsection (b)(2), the Exchange proposes to add
language to describe the content of the broadcast message sent to
Members upon entry of an order into simple Facilitation. In particular,
the Exchange proposes to specify that the broadcast message includes
the series, price and size of the Agency Order, and whether it is to
buy or sell. Although this change reflects current functionality, the
existing rule is silent in this regard and only indicates that a
broadcast message is sent upon the order's entry into the mechanism.
[[Page 12764]]
Identical language currently exists in the rules governing simple
Facilitation on GEMX and MRX, which operate in the same way as ISE's
simple Facilitation.\21\
---------------------------------------------------------------------------
\21\ See GEMX and MRX Options 3, Section 11(b)(1).
---------------------------------------------------------------------------
In renumbered subsection (b)(3), the Exchange proposes to replace
the words ``must not exceed'' with ``will only be considered up to'' in
order to align with identical language in the complex Facilitation
rule.\22\ This change more accurately describes that the System will
cap Responses to the size of the auction for purposes of allocation
methodology.
---------------------------------------------------------------------------
\22\ See Options 3, Section 11(c)(6).
---------------------------------------------------------------------------
In renumbered subsection (b)(4)(A), the Exchange proposes to
provide that the facilitation order will be cancelled at the end of the
exposure period if an execution would take place at a price that is
inferior to the best bid (offer) on the Exchange. This is a non-
substantive change that makes clear that any executions in Facilitation
will comply with the general prohibition on trade-throughs in Options
5, Section 2(a). Identical language is included in the rules governing
simple Facilitation on GEMX and MRX.\23\
---------------------------------------------------------------------------
\23\ See GEMX and MRX Options 3, Section 11(b)(3).
---------------------------------------------------------------------------
In renumbered subsections (b)(4)(B) and (b)(4)(C), the Exchange
proposes to amend the rule to provide that the facilitating Member will
be allocated up to forty percent (40%) (or such lower percentage
requested by the Member) of the original size of the facilitation
order. If the Member requests a lower allocation percentage, the
contra-side order would receive an allocation consistent with the
percentage requested by the Member. Regardless of the Member's request,
the contra-side order would still be responsible for executing up to
the full size of the agency order if there is not enough interest to
execute the agency order at a particular price. Similar language
indicating that the Member may request a lower allocation percentage
than 40% is currently included in the complex Facilitation rule, which
operate in the same way as the simple Facilitation in this manner.\24\
For greater consistency between its simple and complex Facilitation
rules, the Exchange also proposes to make aligning, non-substantive
changes in the complex Facilitation rule to provide that the Member
will ``be allocated up to'' forty percent. The current complex
Facilitation language provides that the Member will ``execute at least
forty percent'' or that the Member will ``be allocated at least forty
percent.'' \25\ The non-substantive language proposed for complex
Facilitation will therefore serve to harmonize the complex rule with
the amended simple rule.
---------------------------------------------------------------------------
\24\ See Options 3, Section 11(c)(7)(B) and (C). Other options
exchanges such as BX provide similar functionality that allows
members using an auction mechanism to configure allocation priority.
See, e.g., BX Options 3, Section 13, which provides a similar
feature for the BX Options Price Improvement Auction (``PRISM'')
called ``Surrender.''
\25\ Id.
---------------------------------------------------------------------------
The Exchange also proposes to more accurately describe
Facilitation's auto-match functionality, which provides an enhanced
price improvement opportunity for the agency order by permitting the
contra-side order to further participate in the cross by auto-matching
the price and size of competing interest providing price improvement
from other market participants.\26\ The rule currently provides that
upon entry of an order into the Facilitation Mechanism, the
facilitating Electronic Access Member can elect to automatically match
the price and size of orders, quotes and responses received during the
exposure period up to a specified limit price or without specifying a
limit price. In this case, the facilitating Electronic Access Member
will be allocated its full size at each price point, or at each price
point within its limit price is a limit is specified, until a price
point is reached where the balance of the order can be fully
executed.\27\ The Exchange proposes to state that if a Member elects to
auto-match, the facilitating Electronic Access Member will be allocated
the aggregate size of all competing quotes, orders, and Responses
(instead of ``its full size'') at each price point, or at each price
point up to the specified limit price (instead of ``within its limit
price'') if a limit is specified, until a price point is reached where
the balance of the order can be fully executed. The Exchange believes
that the modified language more accurately explains how the
functionality works today, and better aligns with how this feature is
described in the Auto-Match Filing.\28\ For greater consistency within
its Rulebook, the Exchange will also make the same changes in the
complex Facilitation auto-match rule in Options 3, Section 11(c)(7)(C).
---------------------------------------------------------------------------
\26\ See Securities Exchange Act Release No. 62644 (August 4,
2010), 75 FR 48395 (August 10, 2010) (SR-ISE-2010-61) (``Auto-Match
Filing''). As discussed later in this filing, the Auto-Match Filing
also introduced the auto-match feature on PIM. As such, the Exchange
is proposing to make similar changes in PIM's auto-match rule as
proposed for Facilitation's auto-match rule.
\27\ See Options 3, Section 11(b)(3)(C) (renumbered to Section
11(b)(4)(C) under this proposal).
\28\ The Auto-Match Filing describes the auto-match feature as
allowing the initiating member to submit a contra-side order that
will automatically match the price and size set forth by the
competing interest from other market participants (i.e., auction
responses, quotes, and orders) at any price level during the auction
or up to a specified limit price if a limit is specified.
---------------------------------------------------------------------------
Lastly, the Exchange proposes to add at the end of Supplementary
Material .01 to Options 3, Section 11 that any solicited contra orders
entered by Members into the Facilitation Mechanism to trade against
Agency Orders may not be for the account of a Nasdaq ISE Market Maker
that is assigned to the options class.\29\ This language was included
in the approval order to SR-ISE-2006-78 to allow solicited transactions
in ISE's Facilitation Mechanism, so the proposed change will import
that prohibition into the rule text for greater transparency.
---------------------------------------------------------------------------
\29\ See Securities Exchange Act Release No. 55557 (March 29,
2007), 72 FR 16838 (April 5, 2007) (SR-ISE-2006-78) (Order Granting
Approval of Proposed Rule Change Relating to Facilitation
Mechanism).
---------------------------------------------------------------------------
Solicited Order Mechanism
The Exchange proposes a number of changes to its Solicitation rule,
none of which will change the current operation of this technology
offering.
In Options 3, Section 11(d), the Exchange proposes to add new
subsection (d)(1),\30\ which will provide that orders must be must be
entered into the Solicited Order Mechanism at a price that is equal to
or better than the NBBO on both sides of the market; provided that, if
there is a Priority Customer order on the Exchange best bid or offer,
the order must be entered at an improved price. Orders that do not meet
these requirements are not eligible for the Solicited Order Mechanism
and will be rejected. The Exchange is not proposing any other changes
to the current entry requirements for Solicitation. The new subsection
(d)(1) would simply provide additional detail about simple
Solicitation's existing entry checks, and align to the level of detail
currently within the complex Solicitation rule regarding entry
checks.\31\
---------------------------------------------------------------------------
\30\ As a result, current paragraphs (d)(1)-(3) will be
renumbered accordingly. The Exchange will also renumber current
paragraph (d)(2)(D) as paragraph (d)(4).
\31\ See Options 3, Section 11(e)(1). Complex Solicitation
refers to the Exchange's best bid or offer instead of the NBBO. As
noted above, there is no NBBO for complex orders, and executions of
legs of complex orders are exceptions to the prohibition of trade-
throughs. See supra note 20.
---------------------------------------------------------------------------
Example 3
Assume the following market:
ISE BBO: 1 x 2 (also NBBO)
[[Page 12765]]
CBOE: 0.75. x 2.25 (next best exchange quote)
Solicitation order is entered to buy 500 contracts @ 2.05
The Solicitation order is rejected upon entry for being crossed with
the NBBO on the contra side. In contrast to Example 2 above for
Facilitation, the Solicitation order in this instance is not able to
begin crossed with the contra side ISE BBO because of the all-or-none
contingency of the Solicitation order.\32\
---------------------------------------------------------------------------
\32\ See Options 3, Section 11(d) (requiring that each
Solicitation order be designated as all-or-none).
---------------------------------------------------------------------------
In renumbered subsection (d)(2), the Exchange proposes to add
language to describe the content of the broadcast message sent to
Members upon entry of an order into simple Solicitation. In particular,
the Exchange proposes to specify that the broadcast message includes
the series, price and size of the Agency Order, and whether it is to
buy or sell. While this change reflects current functionality, the
existing rule is silent in this regard and only indicates that a
broadcast message is sent upon the order's entry into the mechanism.
Identical language already exists in the rules governing simple
Solicitation on GEMX and MRX, which operate in the same way as the
ISE's simple Solicitation.\33\
---------------------------------------------------------------------------
\33\ See GEMX and MRX Options 3, Section 11(d)(1).
---------------------------------------------------------------------------
Lastly, the Exchange also proposes technical changes in renumbered
subsection (d)(3) to correct the internal lettering and cross-cites
within paragraphs (A) through (C).
Price Improvement Mechanism
The Exchange proposes a number of changes to the PIM rule, none of
which will change the current operation of this technology offering. As
noted above, many of these modifications are similar to the changes
proposed for Facilitation.
The Exchange proposes in Options 3, Section 13(b)(2) to delete
``national best bid or offer'' as NBBO is already defined in subsection
(b)(1) above. The Exchange proposes in subsection (c)(2) to provide
that responses in the PIM (i.e., ``Improvement Orders'') will only be
considered up to the size of the Agency Order. The proposed amendment
will specifythat the System will cap the size of the Improvement Orders
to the auction size for purposes of the allocation methodology. This is
similar to the change proposed above for simple Facilitation, and also
aligns to identical language in the complex PIM rule.\34\ The Exchange
also proposes in subsection (c)(3) to amend the internal numbering from
(1) and (2) to (i) and (ii) for greater numbering consistency within
the PIM rule.
---------------------------------------------------------------------------
\34\ See Options 3, Section 13(e)(4)(i).
---------------------------------------------------------------------------
In subsection (d)(3), which describes how allocation and execution
takes place in simple PIM, the Exchange proposes that the Counter-Side
Order will be allocated the greater of one contract or 40% (or such
lower percentage requested by the Member) of the initial size of the
Agency Order. Similar to Facilitation as discussed above, the System
currently permits Members entering orders into PIM to elect to receive
a percentage allocation that is less than 40%, although the current
rule is silent in this regard. If the Member requests a lower
allocation percentage, the Counter-Side Order would receive an
allocation consistent with the percentage requested by the Member.
Regardless of the Member's request, the Counter-Side Order would still
be responsible for executing up to the full size of the agency order if
there is not enough interest to execute the agency order at a
particular price. Complex PIM, which shares the same allocation feature
as simple PIM, already has this concept within the rule, so the
proposed changes will align the simple PIM rule with the complex PIM
rule.\35\
---------------------------------------------------------------------------
\35\ See Options 3, Section 13(e)(5)(iii). As noted above, BX
has a similar feature called Surrender for its PRISM auction. See
supra note 24.
---------------------------------------------------------------------------
The Exchange also proposes to more accurately describe PIM's auto-
match functionality in a similar manner as Facilitation's auto-match
functionality, as discussed above. In this instance, the Exchange
proposes to amend the third sentence of subsection (d)(3) to provide:
``If a Member elects to auto-match, the Counter-Side Order will be
allocated the aggregate size of all competing quotes, orders, and
Responses at each price point up to the specified limit price if a
limit is specified, until a price point is reached where the balance of
the order can be fully executed.'' Similar to the proposed amendments
to simple Facilitation's auto-match, the Exchange believes that the
proposed language for simple PIM's auto-match more clearly explains how
the functionality works today, and better aligns with how this feature
is described in the Auto-Match Filing. For greater consistency within
its Rulebook, the Exchange will also make the same changes in the
complex PIM auto-match rule in Options 3, Section 13(e)(5)(iii).
The Exchange further proposes technical amendments in subsection
(d)(3) to replace all instances of ``Counter-Side order'' as ``Counter-
Side Order'' to use the correct terminology. Lastly, the Exchange
proposes to provide in Supplementary Material .04 to Options 3, Section
13 that PIMs will not queue or overlap in any manner, except as
described in Options 3, Section 11(f) and (g). Sections 11(f) and (g)
set forth the governing provisions for concurrent complex auctions and
concurrent complex and simple auctions. The proposed changes to add in
the cross-cites to Sections 11(f) and (g) will make clear that two
simple or two complex PIM auctions are not permitted to run
concurrently, but that a simple PIM auction may run concurrently with a
complex PIM auction.
Trade Value Allowance
The Exchange proposes a non-substantive change to amend the TVA
rule in Supplementary Material .03 to Options 3, Section 14 to add a
cross-cite to the complex PIM rule in Options 3, Section 13, which was
inadvertently omitted when the Exchange relocated the complex auctions
rules in a prior filing.\36\ In SR-ISE-2019-05, the original cross-cite
within the TVA rule was updated from Supplementary Material .08 to Rule
722 to Rule 716 (now Options 3, Section 11). Supplementary Material .08
to Rule 722 set forth the complex auction mechanism rules, namely
complex Facilitation, Solicitation, and PIM. SR-ISE-2019-05 relocated
complex Facilitation and Solicitation to Rule 716 (now Options 3,
Section 11), but moved complex PIM to Rule 723 (now Options 3, Section
13). As such, the original cross-cite in the TVA rule should have been
updated to include complex PIM in Rule 723 but was inadvertently
omitted.
---------------------------------------------------------------------------
\36\ See Securities Exchange Release No. 85308 (March 13, 2019),
84 FR 10136 (March 19, 2019) (SR-ISE-2019-05).
---------------------------------------------------------------------------
TVA is a functionality that allows complex orders to trade outside
of their expected notional trade amount by a specified amount. The
amount of TVA permitted may be determined by the Member, or a default
value determined by the Exchange and announced to Members.\37\ The TVA
rule currently provides, however, that any amount of TVA is permitted
in auction mechanisms pursuant to Options 3, Section 11 when auction
orders do not trade solely with their contra-side order. The Exchange
now proposes to add a cross-cite to Options 3, Section 13 to specify
that TVA also applies to complex PIM auctions in this manner. The
Exchange will also provide that TVA applies to ``complex'' mechanisms
in the cited rules. These changes will
[[Page 12766]]
align the rule text to how TVA is presently implemented in the System.
The Exchange notes that its complex auction mechanisms provide an
opportunity for market participants to respond with better-priced
interest that could execute against an Agency Order. As such, the
Exchange believes that it is appropriate to ensure that paired orders
entered into complex Facilitation, Solicitation and PIM that are broken
up due to better-priced interest are actually executed against such
better-priced interest, and are not restricted from trading due to TVA
settings of one or more Members.
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\37\ See Supplementary Material .03 to Options 3, Section 14.
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Anti-Internalization
The Exchange proposes to amend its anti-internalization (``AIQ'')
rule in Options 3, Section 15(a)(3)(A). Specifically, the Exchange
proposes to add that AIQ does not apply during the opening process or
reopening process following a trading halt pursuant to Options 3,
Section 8 to provide more specificity on how this functionality
currently operates. The Exchange notes that the same procedures used
during the opening process are used to reopen an option series after a
trading halt, and therefore proposes to specify that AIQ will not apply
during an Opening Process (i.e., the opening and halt reopening
process) in addition to an auction, as currently within the Rule. AIQ
is unnecessary during an Opening Process due to the high level of
control that Market Makers exercise over their quotes during this
process. The proposed changes will align the Exchange's AIQ rule with
BX's AIQ rule, which sets forth materially identical functionality.\38\
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\38\ See BX Options 3, Section 15(c)(1).
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Exposure Mechanism
Under the linkage rules, the Exchange cannot execute orders at a
price that is inferior to the NBBO, nor can the Exchange place an order
on its book that would cause the Exchange best bid or offer to lock or
cross another exchange's quote.\39\ In these circumstances,
Supplementary Material .02 to Options 5, Section 2 sets forth an
Exposure mechanism for automated order handling where eligible incoming
orders are exposed at the NBBO to all Members to give them an
opportunity to execute the order at the NBBO price or better. The
Exchange proposes to make clear within Supplementary Material .02 that
an incoming order will be eligible for Exposure if the order is priced
at or through the ABBO, when the ABBO is better than the Exchange BBO.
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\39\ See Options 5, Sections 2 and 3. See also Options 3,
Section 5(d).
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Supplementary Material .02 to Options 5, Section 2 currently
provides that when the automatic execution of an incoming order would
result in an impermissible Trade-Through, such order would be exposed
at the current NBBO to all Exchange Members for a time period
established by the Exchange not to exceed one (1) second. Supplementary
Material .01 to Options 5, Section 3, however, currently provides that
when the price of an incoming limit order that is not executable upon
entry would lock or cross a Protected Quotation, such order would be
handled in accordance with the Exposure process in Supplementary
Material .02 to Options 5, Section 2.\40\ The Exchange proposes to
modify Supplementary Material .02 by removing the portion related to
the automatic execution of an incoming order that would result in an
impermissible Trade-Through, and instead providing within this Rule
that Exposure will initiate when an incoming order is priced at or
through the ABBO, when the ABBO is better than the Exchange BBO. The
current language in Supplementary Material .02 only specifies that
Exposure is initiated when the price of the incoming order is crossed
with the ABBO (i.e., would result in an impermissible Trade-Through),
but does not specify the scenario in Supplementary Material .01 to
Options 5, Section 3 when the price is locked. As such, the proposed
changes seek to enhance the accuracy of the rules by codifying both
scenarios within the Exposure rule in Supplementary Material .02.
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\40\ Such order would also be handled in accordance with
Supplementary Material .04 (Non-Customer Orders that opt out of the
Exposure mechanism) or .05 (Sweep Orders) to Options 5, Section 2,
as applicable. See Supplementary Material .01 to Options 5, Section
3.
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Technical Amendments
The Exchange proposes technical changes in the Supplementary
Material to Options 3, Section 11. First, the Exchange proposes in
Supplementary Material .03 to update an incorrect cross-cite from
Options 3, Section 22(d) to Section 22(b), which limits principal
transactions. Second, the Exchange will make corrective changes to
renumber Supplementary Material .07 to .05, and to update the cross-
cite to paragraph (a)(2)(i) therein to paragraph (a)(2)(A). Third, the
Exchange proposes in renumbered Supplementary Material .07 to update
the reference to ``Block Mechanism'' to ``Block Order Mechanism'' to
use the correct terminology.
Lastly, the Exchange proposes some harmonizing changes throughout
its Rulebook to align with the rule numbering and titles with that of
its affiliates. Specifically, the Exchange proposes to add a new
Options 4B and reserve it in the Rulebook in order to harmonize its
Options Rule numbering with that of its affiliates, GEMX and Nasdaq
PHLX LLC (``Phlx''). The Exchange also proposes to retitle General 4
(currently titled ``Regulation'') to ``Registration Requirements'' to
harmonize its General Rule titles with that of its affiliates The
Nasdaq Stock Market LLC and Nasdaq BX, Inc.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\41\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\42\ 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.
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\41\ 15 U.S.C. 78f(b).
\42\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that its proposal is consistent with the
protection of investors and public interest as all of the proposed
changes will increase transparency around how various existing Exchange
mechanisms work today. As such, no System changes to existing
functionality are being made pursuant to this proposal. Rather, this
proposal is designed to reduce any potential investor confusion as to
the features and applicability of certain functionality presently
available on the Exchange.
Furthermore, many of the proposed changes seek to provide greater
harmonization between the rules of the Exchange and its affiliates
(notably rules related to Block, Facilitation, Solicitation, and AIQ),
or between the Exchange's own simple and complex auction rules (notably
for simple and complex Facilitation, Solicitation, and PIM).\43\ The
Exchange believes that these harmonizing changes would result in
greater uniformity, and ultimately less burdensome and more efficient
regulatory compliance by market participants. As such, the proposed
rule change would foster cooperation and coordination with persons
engaged in facilitating transactions in securities and
[[Page 12767]]
would remove impediments to and perfect the mechanism of a free and
open market and a national market system. The Exchange also believes
that more consistent rules will increase the understanding of the
Exchange's operations for Members that are also members on the
Exchange's affiliates, thereby contributing to the protection of
investors and the public interest.
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\43\ As noted above, the Exchange seeks to add granularity to
its simple auction rules to align with the level of detail that
currently exists within its complex auction rules. See supra note
17.
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Specifically, the Exchange believes that the proposed universal
changes to replace all instances of Professional interest with non-
Priority Customer interest throughout the Exchange's auction allocation
rules will add greater consistency within the Exchange's rules. As
discussed above, the Exchange previously made the same modifications
within its standard allocation rule in Options 7, Section 10, so the
proposed changes will promote more consistent terminology in the rules
and make them easier for market participants to navigate and
comprehend. The Exchange also believes that using the term ``non-
Priority Customer'' reduces any potential confusion regarding any
reference to Professional Orders or Professional Customer orders. In
addition, the Exchange believes that clearly delineating between orders
and Reponses of the same capacity in the Facilitation and Solicitation
rules will bring clarity and transparency around how allocation takes
place in those auction mechanisms. The complex Facilitation and
Solicitation rules currently differentiate between orders and
Responses,\44\ so the Exchange is aligning the simple rule to the level
of granularity already found in the complex rule while also specifying
the capacity of such order or Response within the simple and complex
rules. As noted above, the Exchange is not changing the current
allocation methodology, and auction orders and Responses of the same
capacity do not get treated differently for allocation purposes today.
---------------------------------------------------------------------------
\44\ See supra note 14.
---------------------------------------------------------------------------
The Exchange believes that the proposed changes to the Block rule
are consistent with the protection of investors and the public interest
as the modifications will more accurately reflect the handling of
auctions in Block, specifically as it relates to execution and
allocation. The proposed changes will specify that better priced
interest entered into Block gets executed in full only if there is
sufficient size to execute against such interest, and that Priority
Customer interest gets executed first in price time priority. This
specificity will be helpful to market participants utilizing Block and
provide greater certainty as to how their Block orders will be executed
and allocated. The Exchange also believes that the proposed changes
will continue to ensure a fair and orderly market by maintaining and
protecting the priority of Priority Customer orders, while still
affording the opportunity for all market participants to seek liquidity
and potential price improvement during each Block auction commenced on
the Exchange. As noted above, the Exchange is not proposing any changes
to the current execution or allocation methodology but believes that
the changes will promote consistency with the rulebook of its
affiliated exchange BX, which offers identical functionality.\45\
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\45\ See supra notes 15-16, and accompanying text.
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Similarly, the Exchange believes that specifying the entry checks
for simple Facilitation and Solicitation is consistent with the
protection of investors and the public interest by providing greater
consistency to the level of granularity currently within the complex
Facilitation and Solicitation entry checks.\46\ The Exchange also
believes it is appropriate to require that the Facilitation order be
entered at an improved price if there is a Priority Customer order on
the same side Exchange best bid or offer as the agency order. The
Exchange believes this will ensure a fair and orderly market by
maintaining priority of orders and quotes and protecting Priority
Customer orders, while still affording the opportunity to seek
liquidity and for potential price improvement during each Facilitation
auction commenced on the Exchange. For the same reasons, the Exchange
believes that it is appropriate to require that the Solicitation order
be entered at an improved price if there is a Priority Customer order
on the Exchange best bid or offer.
---------------------------------------------------------------------------
\46\ See supra notes 20 and 31, and accompanying text.
---------------------------------------------------------------------------
The Exchange further believes that it is consistent with the Act to
specify the contents of the broadcast message sent to Members upon
entry of an order into simple Facilitation and Solicitation as the
changes will remove any potential confusion about what type of auction
information is disseminated. Currently, the broadcast message in simple
Facilitation and Solicitation includes the series, price, and size of
the Agency Order, and whether it is to buy or sell. As this information
is helpful to auction participants, the Exchange believes that
codifying this information into the simple Facilitation and
Solicitation rules may encourage greater participation within these
mechanisms, thereby increasing the opportunity for options orders to
receive executions on the Exchange. The Exchange is not proposing any
changes to the current content of the broadcast message but wants to
make this clear in its rules, which, with this change, would be
consistent with the rules of its affiliated exchanges that offer
identical functionality.\47\ Likewise, the proposed change to add that
a facilitation order would be cancelled at the end of the exposure
period if an execution would take place at a price that is inferior to
the best bid (offer) on the Exchange is intended to ensure compliance
with the general prohibition on trade-throughs in Options 5, Section
2(a), and to ensure consistency across the rules of the Exchange and
its affiliates that offer identical functionality.\48\
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\47\ See supra notes 21 and 33.
\48\ See supra note 23.
---------------------------------------------------------------------------
The proposed changes to replace ``must not exceed'' with ``will
only be considered up to'' in the simple Facilitation and PIM rules are
intended to more accurately describe that the System will cap the size
of Responses to the size of the agency order for purposes of
allocation. The Exchange is not amending current System behavior;
rather, the modifications will more clearly articulate the handling of
Responses by the System. In addition, the proposed changes will serve
to harmonize the simple and complex auction rules, thereby resulting in
greater uniformity and ultimately less burdensome and more efficient
regulatory compliance by market participants.\49\
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\49\ See supra notes 22 and 34.
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The Exchange believes that its proposal to specify in the simple
Facilitation and PIM rules that an initiating Member may elect to
receive a percentage allocation lower than 40% is consistent with the
Act. This feature provides an initiating Member that submits an order
into Facilitation or PIM with the flexibility to configure its
allocation percentage up to the full 40% entitlement. The Exchange
notes that regardless of the Member's instruction, the contra-side
order would still be responsible for executing up to the full size of
the agency order if there is not enough interest to execute the agency
order at a particular price. The Exchange continues to believe that the
40% allocation entitlement is consistent with the statutory standards
for competition and free and open markets by promoting price
competition within Facilitation and PIM as Members would still have a
reasonable opportunity to compete for a significant percentage of
[[Page 12768]]
the incoming order. The Exchange also notes that the configurable 40%
allocation entitlement for simple Facilitation and PIM is consistent
with the configurable allocation entitlements in place on complex
Facilitation and PIM as well as on its affiliated exchange, BX.\50\
Accordingly, the Exchange believes that the proposed changes will
promote consistency across the rulebooks of exchanges offering
identical functionality and within its own Rulebook as well.
---------------------------------------------------------------------------
\50\ See supra notes 24 and 35.
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With respect to the proposed changes to the Facilitation and PIM
auto-match feature, the Exchange is amending the current rule text so
that it more accurately explains how the Exchange will allocate an
order designated for auto-match today. As discussed above, the Exchange
is not making any substantive changes to the allocation procedure
itself; rather the proposed changes are intended to better align how
this feature is described in the Auto-Match Filing.\51\ Similarly, the
Exchange believes that the proposed change in Supplementary Material
.01 to Options 3, Section 11 to add the provision that any solicited
contra orders entered by Members into the Facilitation Mechanism to
trade against Agency Orders may not be for the account of a Nasdaq ISE
Market Maker that is assigned to the options class will better align
the rule text with related filing. As discussed above, this restriction
was included in the approval order to the rule filing that allowed
solicited transactions in the Facilitation Mechanism, so the Exchange
will import that language into the rule text for greater
transparency.\52\
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\51\ See supra note 28.
\52\ See supra note 29.
---------------------------------------------------------------------------
The proposed change in Supplementary Material .04 to Options 3,
Section 13 to provide that PIMs will not queue or overlap in any
manner, except as described in Options 3, Section 11(f) and (g) will
make clear that two simple or complex PIM auctions are not permitted to
run concurrently, but that a simple PIM auction may run concurrently
with a complex PIM auction. The Exchange believes that this change will
reduce any potential confusion around how simultaneous PIM auctions are
processed by the System.
The Exchange believes that the proposed change to the TVA rule is a
non-substantive change to say that any amount of TVA is permitted in
complex PIM (in addition to all of the other complex auction mechanisms
in Options 3, Section 11). This is a corrective change as the cross-
cite to complex PIM within the TVA rule was inadvertently dropped in a
prior filing that relocated the complex auction rules.\53\ As noted
above, the Exchange's complex auction mechanisms provide an opportunity
for market participants to respond with better-priced interest that
could execute against an Agency Order. Accordingly, the Exchange
believes that it is appropriate to ensure that paired orders entered
into complex Facilitation, Solicitation and PIM that are broken up due
to better-priced interest are actually executed against such better-
priced interest, and are not restricted from trading due to TVA
settings of one or more Members.
---------------------------------------------------------------------------
\53\ See supra note 36.
---------------------------------------------------------------------------
The Exchange believes its proposal to provide that AIQ will not
apply during an Opening Process (i.e., the opening process or halt
reopening process) will more accurately state how this functionality
currently operates. AIQ prevents Market Makers from trading against
their own quotes and orders. While the Exchange believes that this
protection is useful for Market Makers to manage their trading during
regular market hours, applying AIQ is unnecessary during an Opening
Process due to the high level of control that Market Makers already
exercise over their quotes during this process. Furthermore, the
proposed AIQ changes will promote consistency with the rulebook of its
affiliated exchange BX, which offers identical functionality.\54\
---------------------------------------------------------------------------
\54\ See supra note 38.
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The Exchange believes that its proposal to provide that Exposure
will initiate when an incoming order is priced at or through the ABBO,
when the ABBO is better than the Exchange BBO, is consistent with the
Act. As discussed above, the current language in Supplementary Material
.02 only specifies that Exposure is initiated when the price of the
incoming order is crossed with the ABBO (i.e., would result in an
impermissible Trade-Through), but does not specify the scenario in
Supplementary Material .01 to Options 5, Section 3 when the price is
locked. Supplementary Material .01 to Options 5, Section 3, however,
also currently provides that when the price of an incoming limit order
that is not executable upon entry would lock or cross a Protected
Quotation, such order would be handled in accordance with the Exposure
process in Supplementary Material .02 to Options 5, Section 2. As such,
the proposed changes will enhance the accuracy of the rules by
codifying both scenarios within the Exposure rule in Supplementary
Material .02, and will continue to ensure that such order complies with
the general prohibition on trade-throughs in Options 5, Section 2(a).
The Exchange further believes that the technical changes it is
proposing throughout Options 3 are non-substantive changes intended to
enhance the accuracy of the Exchange's Rulebook, which will alleviate
potential confusion as to the applicability of its rules. As discussed
above, these changes consist of updating internal rule lettering and
cross-cites, and using correct terminology. Lastly, the Exchange
believes that the harmonizing changes to add a new Options 4B in its
Rulebook and to retitle General 4, each as discussed above, will serve
to further harmonize its Rule numbering and titling with that of its
affiliates, thereby promoting efficiency and conformity of its
processes with those of its affiliated exchanges.
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. As indicated above, no System
changes to existing functionality are being made pursuant to this
proposal; rather, this proposal is designed to reduce any potential
investor confusion as to the features and applicability of certain
functionality presently available on the Exchange. Therefore, the
proposed changes are designed to enhance clarity and consistency in the
Exchange's Rulebook.
Furthermore, many of the proposed changes seek to provide greater
harmonization between the rules of the Exchange and its affiliates, and
therefore promotes fair competition among the options exchanges. In
particular, the proposed changes discussed above for Block and AIQ are
based on BX rules governing identical functionality,\55\ and the
Facilitation and Solicitation changes around broadcast message content
and trade-through prohibition compliance (Facilitation only) are based
on GEMX and MRX rules governing identical functionality.\56\ The
Exchange notes that it operates in a highly competitive market in which
market participants can readily direct order flow to competing venues
who offer similar functionality. The Exchange believes that the
[[Page 12769]]
proposed rule change will enhance competition among the various markets
for auction execution, potentially resulting in more active trading in
auction mechanisms across all options exchanges.
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\55\ See BX Options 3, Section 11(a) (Block) and Section
15(c)(1) (AIQ).
\56\ See GEMX and MRX Options 3, Section 11(b)(1) (Facilitation
broadcast message), Options 3, Section 11(d)(1) (Solicitation
broadcast message), and Options 3, Section 11(b)(3) (Facilitation
executions trade-through compliance).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \57\ and
paragraph (f)(6) of Rule 19b-4 thereunder.\58\
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\57\ 15 U.S.C. 78s(b)(3)(A)(iii).
\58\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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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 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-2021-01 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-2021-01. 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
20549-1090 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-2021-01, and should be
submitted on or before March 25, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\59\
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\59\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-04428 Filed 3-3-21; 8:45 am]
BILLING CODE 8011-01-P
