Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Permit Monday and Wednesday Expirations for Options Listed Pursuant to the Short Term Option Series Program on the Invesco QQQ TrustSM, 40089-40092 [2021-15819]
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Federal Register / Vol. 86, No. 140 / Monday, July 26, 2021 / Notices
NUCLEAR REGULATORY
COMMISSION
[NRC–2021–0001]
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Dated: July 21, 2021.
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Wesley W. Held,
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[FR Doc. 2021–15894 Filed 7–21–21; 4:15 pm]
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–92454; File No. SR–
NYSEAMER–2021–33]
Self-Regulatory Organizations; NYSE
American LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change to Permit Monday and
Wednesday Expirations for Options
Listed Pursuant to the Short Term
Option Series Program on the Invesco
QQQ TrustSM Series (‘‘QQQ’’) ETF Trust
July 20, 2021.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that on July 12,
2021, NYSE American LLC (‘‘NYSE
American’’ or the ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the self-regulatory
organization. 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
Rule 903 to permit Monday and
Wednesday expirations for options
listed pursuant to the Short Term
Options Series Program on the Invesco
QQQ Trust; Series (‘‘QQQ’’) ETF Trust.
The proposed rule change is available
on the Exchange’s website at
www.nyse.com, at the principal office of
the Exchange, and at the Commission’s
Public Reference Room.
PO 00000
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
40089
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of this filing is to amend
Rule 903, Series of Options Open for
Trading, to permit Monday and
Wednesday expirations for options
listed pursuant to the Short Term
Options Series Program (‘‘Program’’) on
QQQ.
A Short Term Options Series is a
series in an option class that is
approved for listing and trading on the
Exchange in which the series is opened
for trading on any Monday, Tuesday,
Wednesday, Thursday or Friday that is
a business day and that expires on the
Monday, Wednesday or Friday of the
next business week, or, in the case of a
series that is listed on a Friday and
expires on a Monday, is listed one
business week and one business day
prior to that expiration.4 The Exchange
is proposing to amend Rule 903
Commentary .10 (f) to permit the listing
of options series that expire on Mondays
and Wednesdays in QQQ.
Monday Expirations
As proposed, with respect to Monday
QQQ Expirations within Rule 903
Commentary .10, the Exchange may
open for trading on any Friday or
Monday that is a business day series of
options on QQQ to expire on any
Monday of the month that is a business
day and is not a Monday in which
Quarterly Options Series on the same
class expire (‘‘Monday QQQ
Expirations’’), provided that Monday
QQQ Expirations that are listed on a
Friday must be listed at least one
business week and one business day
prior to the expiration. The Exchange
may list up to five consecutive Monday
QQQ Expirations at one time; the
1 15
2 15
Frm 00100
Fmt 4703
4 See NYSE American Rule 900.2NY 50. Short
Term Option Series.
Sfmt 4703
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Federal Register / Vol. 86, No. 140 / Monday, July 26, 2021 / Notices
Exchange may have no more than a total
of five Monday QQQ Expirations.5
Wednesday Expirations
As proposed, with respect to
Wednesday QQQ Expirations within
Rule 903 Commentary .10, the Exchange
may open for trading on any Tuesday or
Wednesday that is a business day series
of options on QQQ to expire on any
Wednesday of the month that is a
business day and is not a Wednesday in
which Quarterly Options Series on the
same class expire (‘‘Wednesday QQQ
Expirations’’). The Exchange may list up
to five consecutive Wednesday QQQ
Expirations at one time; the Exchange
may have no more than a total of five
Wednesday QQQ Expirations.
Monday and Wednesday Expirations
The interval between strike prices for
the proposed Monday and Wednesday
QQQ Expirations will be the same as
those for the current Short Term Option
Series for Wednesday and Friday
expirations applicable to the Program.6
Specifically, the Monday and
Wednesday QQQ Expirations will have
a $0.50 strike interval minimum.7 As is
the case with other equity options series
listed pursuant to the Program, the
Monday and Wednesday QQQ
Expirations series will be P.M. settled.
Pursuant to Rule 900.2NY,8 with
respect to the Program, if Monday is not
a business day the series shall expire on
the first business day immediately
following that Monday. This procedure
differs from the expiration date of
Wednesday expiration series that are
scheduled to expire on a holiday.
Pursuant to Rule 900.2NY 9 a
Wednesday expiration series shall
expire on the first business day
immediately prior to that Wednesday,
e.g., Tuesday of that week, if the
Wednesday is not a business day. For
purposes of QQQ, however, the
Exchange believes that it is preferable to
require Monday expiration series in this
scenario to expire on the Tuesday of
that week rather than the previous
business day, e.g., the previous Friday,
jbell on DSKJLSW7X2PROD with NOTICES
5 The
Exchange proposes to make a clarifying
change to Rule 903 Commentary .10(f) to make clear
that the Exchange may have no more than a total
of five each of Wednesday SPY Expirations and
Wednesday QQQ Expirations and a total of five
each of Monday SPY Expirations and Monday QQQ
Expirations. The Exchange also proposes to make a
non-substantive change to add the word ‘‘business’’
before ‘‘day’’ in the first sentence of Rule 903
Commentary .10(f).
6 See NYSE American Rule 903 Commentary
.10(f).
7 See NYSE American Rule 903 Commentary
.10(d).
8 Rule 900.2NY 50. Definition of ‘‘Short Term
Option Series.’’
9 Id.
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since the Tuesday is closer in time to
the scheduled expiration date of the
series than the previous Friday, and
therefore may be more representative of
anticipated market conditions. Nasdaq
PHLX LLC (‘‘Phlx’’) uses the same
procedure for QQQ with Monday and
Wednesday expirations.10 Nasdaq
Phlx 11 and Nasdaq ISE, LLC (‘‘ISE’’) 12
also use the same procedure for options
on the Nasdaq-100® (‘‘NDX’’) with
Monday expirations that are listed
pursuant to its Nonstandard Expirations
Pilot Programs, respectively. Cboe
Exchange, Inc. (‘‘Cboe’’) uses the same
procedure for options on the S&P500
index (‘‘SPX’’) with Monday expirations
that are listed pursuant to its
Nonstandard Expirations Pilot Program
and that are scheduled to expire on a
holiday.13
Currently, for each option class
eligible for participation in the Program,
the Exchange is limited to opening
thirty (30) series for each expiration date
for the specific class.14 The thirty (30)
series restriction does not include series
that are open by other securities
exchanges under their respective short
term options rules; the Exchange may
list these additional series that are listed
by other exchanges.15 This thirty (30)
series restriction would apply to
Monday and Wednesday QQQ
Expiration series as well. In addition,
the Exchange will be able to list series
that are listed by other exchanges,
assuming they file similar rules with the
Commission to list QQQ options
expiring on Mondays and Wednesdays.
Finally, the Exchange is amending
Rule 903(h), which addresses the listing
of Short Term Options Series that expire
in the same week as monthly or
quarterly options series. Currently, that
rule states that no Short Term Option
Series may expire in the same week in
which monthly option series on the
same class expire (with the exception of
Monday and Wednesday SPY
Expirations) or, in the case of Quarterly
Options Series, on an expiration that
coincides with an expiration of
Quarterly Options Series on the same
10 See Securities Exchange Act Release No. 91238
(March 2, 2021), 86 FR 13404 (March 8, 2021) (SR–
Phlx–2021–10).
11 See Phlx Options 4A, Section 12(b)(5).
12 See ISE Supplementary Material .07 to Options
4A, Section 12.
13 See Cboe Rule 4.13(e)(1) ‘‘. . . If the Exchange
is not open for business on a respective Monday,
the normally Monday expiring Weekly Expirations
will expire on the following business day. If the
Exchange is not open for business on a respective
Wednesday or Friday, the normally Wednesday or
Friday expiring Weekly Expirations will expire on
the previous business day.’’
14 See NYSE American Rule 903 Commentary .10.
15 Id.
PO 00000
Frm 00101
Fmt 4703
Sfmt 4703
class.16 As with Monday and
Wednesday SPY Expirations, the
Exchange is proposing to permit
Monday and Wednesday QQQ
Expirations to expire in the same week
as monthly options series on the same
class. The Exchange believes that it is
reasonable to extend this exemption to
Monday and Wednesday QQQ
Expirations because Monday and
Wednesday QQQ Expirations and
standard monthly options will not
expire on the same trading day, as
standard monthly options expire on
Fridays. Additionally, the Exchange
believes that not listing Monday and
Wednesday QQQ Expirations for one
week every month because there was a
monthly QQQ expiration on the Friday
of that week would create investor
confusion.
The Exchange does not believe that
any market disruptions will be
encountered with the introduction of
P.M.-settled Monday and Wednesday
QQQ expirations. The Exchange has the
necessary capacity and surveillance
programs in place to support and
properly monitor trading in the
proposed Monday and Wednesday QQQ
Expirations. The Exchange currently
trades P.M.-settled Short Term Option
Series that expire Monday and
Wednesday for SPY and has not
experienced any market disruptions nor
issues with capacity. The Exchange
currently has surveillance programs in
place to support and properly monitor
trading in Short Term Option Series that
expire Monday and Wednesday for SPY.
Similar to SPY, the introduction of
Monday and Wednesday QQQ
Expirations will, among other things,
expand hedging tools available to
market participants and continue the
reduction of the premium cost of buying
protection. The Exchange believes that
Monday and Wednesday QQQ
Expirations will allow market
participants to purchase QQQ based on
their timing as needed and allow them
to tailor their investment and hedging
needs more effectively.
2. Statutory Basis
The Exchange believes that its
proposed rule change is consistent with
Section 6(b) of the Act 17 in general, and
furthers the objectives of Section 6(b)(5)
of the Act 18 in particular, in that it is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
16 See
NYSE American Rule 903(h).
U.S.C. 78f(b).
18 15 U.S.C. 78f(b)(5).
17 15
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Federal Register / Vol. 86, No. 140 / Monday, July 26, 2021 / Notices
facilitating transactions in securities, to
remove impediments to and perfect the
mechanisms of a free and open market
and a national market system and, in
general, to protect investors and the
public interest.
The proposed rule change is intended
to provide the investing public and
other market participants more
flexibility to closely tailor their
investment and hedging decisions in
QQQ options, thus allowing them to
better manage their risk exposure.
In particular, the Exchange believes
the Program has been successful to date
and that Monday and Wednesday QQQ
Expirations should simply expand the
ability of investors to hedge risk against
market movements stemming from
economic releases or market events that
occur throughout the month in the same
way that the Program has expanded the
landscape of hedging. Similarly, the
Exchange believes Monday and
Wednesday QQQ Expirations should
create greater trading and hedging
opportunities and flexibility, and will
provide customers with the ability to
tailor their investment objectives more
effectively. The Exchange currently lists
Monday and Wednesday SPY
Expirations.19 Also, Cboe 20 currently
permits Monday and Wednesday
expirations for other options with a
weekly expiration, such as options on
the SPX pursuant to its Nonstandard
Expirations Pilot Program and Phlx 21
and ISE 22 currently permit Monday and
Wednesday expirations for other
options with a weekly expiration on
NDX pursuant to its Nonstandard
Expirations Pilot Programs, respectively.
With the exception of Monday
expiration series that are scheduled to
expire on a holiday, there are no
material differences in the treatment of
Monday and Wednesday QQQ
Expirations for Short Term Option
Series. The Exchange believes that it is
consistent with the Act to treat Monday
expiration series that expire on a
holiday differently than Wednesday or
Friday expiration series, since the
proposed treatment for Monday
expiration series will result in an
expiration date that is closer in time to
the scheduled expiration date of the
series, and therefore may be more
representative of anticipated market
conditions. Monday SPY expirations are
currently treated in this manner.23
Cboe 24 uses the same procedure for SPX
19 Supra
note 14.
note 13.
21 Supra note 11.
22 Supra note 12.
23 Supra note 14.
24 Supra note 13.
options with Monday expirations that
are listed pursuant to its Nonstandard
Expirations Pilot Program and that are
scheduled to expire on a holiday, as do
Phlx 25 and ISE 26 for NDX options with
Monday expirations that are listed
pursuant to their Nonstandard
Expirations Pilot Programs, respectively.
Given the similarities between
Monday and Wednesday SPY
Expirations and the proposed Monday
and Wednesday QQQ Expirations, the
Exchange believes that applying the
provisions in NYSE American Rule 903
Commentary .10 that currently apply to
Monday and Wednesday SPY
Expirations to Monday and Wednesday
QQQ Expirations is justified. For
example, the Exchange believes that
allowing Monday and Wednesday QQQ
Expirations and monthly QQQ
expirations in the same week will
benefit investors and minimize investor
confusion by providing Monday and
Wednesday QQQ Expirations in a
continuous and uniform manner. The
Exchange also believes that it is
appropriate to amend NYSE Arca Rule
903(h) to clarify that no Short Term
Option Series may expire on the same
day as an expiration of Quarterly Option
Series on the same class, same as SPY.
The Exchange represents that it has an
adequate surveillance program in place
to detect manipulative trading in
Monday and Wednesday expirations,
including Monday and Wednesday
QQQ Expirations, in the same way that
it monitors trading in the current Short
Term Option Series and trading in
Monday and Wednesday SPY
Expirations. The Exchange also
represents that it has the necessary
systems capacity to support the new
options series. Finally, the Exchange
does not believe that any market
disruptions will be encountered with
the introduction of Monday and
Wednesday QQQ Expirations.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange notes that having Monday and
Wednesday QQQ Expirations is not a
novel proposal, as Monday and
Wednesday SPY Expirations are
currently listed on the Exchange.27
Cboe 28 uses the same procedure for SPX
options with Monday expirations that
20 Supra
VerDate Sep<11>2014
17:10 Jul 23, 2021
25 Supra
note 11.
note 12.
27 Supra note 14.
28 Supra note 13.
26 Supra
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PO 00000
Frm 00102
Fmt 4703
Sfmt 4703
40091
are listed pursuant to its Nonstandard
Expirations Pilot Program and that are
scheduled to expire on a holiday, as do
Phlx 29 and ISE 30 for NDX options with
Monday expirations that are listed
pursuant to their Nonstandard
Expirations Pilot Programs, respectively.
The Exchange does not believe the
proposal will impose any burden on
intra-market competition, as all market
participants will be treated in the same
manner under this proposal.
Additionally, the Exchange does not
believe the proposal will impose any
burden on inter-market competition, as
nothing prevents the other options
exchanges from proposing similar rules
to list and trade Short-Term Option
Series with Monday and Wednesday
expirations.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 31 and Rule 19b–
4(f)(6) thereunder.32
A proposed rule change filed under
Rule 19b–4(f)(6) 33 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),34 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has requested
that the Commission waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing. The Commission notes that it
29 Supra
note 11.
note 12.
31 15 U.S.C. 78s(b)(3)(A).
32 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
33 17 CFR 240.19b–4(f)(6).
34 17 CFR 240.19b–4(f)(6)(iii).
30 Supra
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Federal Register / Vol. 86, No. 140 / Monday, July 26, 2021 / Notices
recently approved Phlx’s substantially
similar proposal to list and trade
Monday QQQ Expirations and
Wednesday QQQ Expirations.35 The
Exchange has stated that waiver of the
operative delay is consistent with the
protection of investors and the public
interest as it would encourage fair
competition among exchanges by
allowing the Exchange to compete
effectively with Phlx by having the
ability to list and trade the same
Monday and Wednesday QQQ
Expirations that Phlx is able to list and
trade. For these reasons, the
Commission believes that the proposed
rule change presents no novel issues
and that waiver of the 30-day operative
delay is consistent with the protection
of investors and the public interest, and
will allow the Exchange to remain
competitive with other exchanges.
Accordingly, the Commission hereby
waives the operative delay and
designates the proposed rule change
operative upon filing.36
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
jbell on DSKJLSW7X2PROD with NOTICES
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:
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSEAMER–2021–33. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly.
All submissions should refer to File
Number SR–NYSEAMER–2021–33, and
should be submitted on or before
August 16, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.37
J. Matthew DeLesDernier,
Assistant Secretary.
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSEAMER–2021–33 on the subject
line.
[FR Doc. 2021–15819 Filed 7–23–21; 8:45 am]
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Self-Regulatory Organizations; MIAX
PEARL, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend the MIAX Pearl
Equities Fee Schedule
35 See Securities Exchange Act Release No. 91614
(April 20, 2021), 86 FR 22082 (April 26, 2021) (SR–
Phlx–2021–10).
36 For purposes only of waiving the 30-day
operative delay, the Commission also has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
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17:10 Jul 23, 2021
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BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–92452; File No. SR–
PEARL–2021–34]
July 20, 2021.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
PO 00000
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on July 12,
2021, MIAX PEARL, LLC (‘‘MIAX Pearl’’
or ‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘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 is filing a proposal to
amend the fee schedule applicable for
MIAX Pearl Equities, an equities trading
facility of the Exchange (the ‘‘Fee
Schedule’’) 3 to update the Standard
Rates table and the Liquidity Indicator
Codes and Associated Fees table.
The text of the proposed rule change
is available on the Exchange’s website at
https://www.miaxoptions.com/rulefilings/pearl at MIAX Pearl’s principal
office, 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 the Exchange’s Fee
Schedule to (i) make conforming
changes to the rates of certain liquidity
indicator codes that remove liquidity in
the Liquidity Indicator Codes and
Associated Fees table; (ii) amend the
Standard Rates table to increase the
rebate for Non-Displayed Orders that
Add Liquidity from $0.0022 to $0.0025;
and (iii) adopt four Retail Order
liquidity indicator codes and associated
fees and rebates for each.
15 U.S.C. 78s(b)(1).
17 CFR 240.19b–4.
3 See Exchange Rule 1901.
1
2
37 17
CFR 200.30–3(a)(12).
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]]>Agencies
[Federal Register Volume 86, Number 140 (Monday, July 26, 2021)]
[Notices]
[Pages 40089-40092]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-15819]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-92454; File No. SR-NYSEAMER-2021-33]
Self-Regulatory Organizations; NYSE American LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change to Permit
Monday and Wednesday Expirations for Options Listed Pursuant to the
Short Term Option Series Program on the Invesco QQQ TrustSM Series
(``QQQ'') ETF Trust
July 20, 2021.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that on July 12, 2021, NYSE American LLC (``NYSE American'' or
the ``Exchange'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I
and II below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Rule 903 to permit Monday and
Wednesday expirations for options listed pursuant to the Short Term
Options Series Program on the Invesco QQQ Trust; Series (``QQQ'') ETF
Trust. The proposed rule change is available on the Exchange's website
at www.nyse.com, at the principal office of the Exchange, and at the
Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of this filing is to amend Rule 903, Series of Options
Open for Trading, to permit Monday and Wednesday expirations for
options listed pursuant to the Short Term Options Series Program
(``Program'') on QQQ.
A Short Term Options Series is a series in an option class that is
approved for listing and trading on the Exchange in which the series is
opened for trading on any Monday, Tuesday, Wednesday, Thursday or
Friday that is a business day and that expires on the Monday, Wednesday
or Friday of the next business week, or, in the case of a series that
is listed on a Friday and expires on a Monday, is listed one business
week and one business day prior to that expiration.\4\ The Exchange is
proposing to amend Rule 903 Commentary .10 (f) to permit the listing of
options series that expire on Mondays and Wednesdays in QQQ.
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\4\ See NYSE American Rule 900.2NY 50. Short Term Option Series.
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Monday Expirations
As proposed, with respect to Monday QQQ Expirations within Rule 903
Commentary .10, the Exchange may open for trading on any Friday or
Monday that is a business day series of options on QQQ to expire on any
Monday of the month that is a business day and is not a Monday in which
Quarterly Options Series on the same class expire (``Monday QQQ
Expirations''), provided that Monday QQQ Expirations that are listed on
a Friday must be listed at least one business week and one business day
prior to the expiration. The Exchange may list up to five consecutive
Monday QQQ Expirations at one time; the
[[Page 40090]]
Exchange may have no more than a total of five Monday QQQ
Expirations.\5\
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\5\ The Exchange proposes to make a clarifying change to Rule
903 Commentary .10(f) to make clear that the Exchange may have no
more than a total of five each of Wednesday SPY Expirations and
Wednesday QQQ Expirations and a total of five each of Monday SPY
Expirations and Monday QQQ Expirations. The Exchange also proposes
to make a non-substantive change to add the word ``business'' before
``day'' in the first sentence of Rule 903 Commentary .10(f).
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Wednesday Expirations
As proposed, with respect to Wednesday QQQ Expirations within Rule
903 Commentary .10, the Exchange may open for trading on any Tuesday or
Wednesday that is a business day series of options on QQQ to expire on
any Wednesday of the month that is a business day and is not a
Wednesday in which Quarterly Options Series on the same class expire
(``Wednesday QQQ Expirations''). The Exchange may list up to five
consecutive Wednesday QQQ Expirations at one time; the Exchange may
have no more than a total of five Wednesday QQQ Expirations.
Monday and Wednesday Expirations
The interval between strike prices for the proposed Monday and
Wednesday QQQ Expirations will be the same as those for the current
Short Term Option Series for Wednesday and Friday expirations
applicable to the Program.\6\ Specifically, the Monday and Wednesday
QQQ Expirations will have a $0.50 strike interval minimum.\7\ As is the
case with other equity options series listed pursuant to the Program,
the Monday and Wednesday QQQ Expirations series will be P.M. settled.
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\6\ See NYSE American Rule 903 Commentary .10(f).
\7\ See NYSE American Rule 903 Commentary .10(d).
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Pursuant to Rule 900.2NY,\8\ with respect to the Program, if Monday
is not a business day the series shall expire on the first business day
immediately following that Monday. This procedure differs from the
expiration date of Wednesday expiration series that are scheduled to
expire on a holiday. Pursuant to Rule 900.2NY \9\ a Wednesday
expiration series shall expire on the first business day immediately
prior to that Wednesday, e.g., Tuesday of that week, if the Wednesday
is not a business day. For purposes of QQQ, however, the Exchange
believes that it is preferable to require Monday expiration series in
this scenario to expire on the Tuesday of that week rather than the
previous business day, e.g., the previous Friday, since the Tuesday is
closer in time to the scheduled expiration date of the series than the
previous Friday, and therefore may be more representative of
anticipated market conditions. Nasdaq PHLX LLC (``Phlx'') uses the same
procedure for QQQ with Monday and Wednesday expirations.\10\ Nasdaq
Phlx \11\ and Nasdaq ISE, LLC (``ISE'') \12\ also use the same
procedure for options on the Nasdaq-100[supreg] (``NDX'') with Monday
expirations that are listed pursuant to its Nonstandard Expirations
Pilot Programs, respectively. Cboe Exchange, Inc. (``Cboe'') uses the
same procedure for options on the S&P500 index (``SPX'') with Monday
expirations that are listed pursuant to its Nonstandard Expirations
Pilot Program and that are scheduled to expire on a holiday.\13\
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\8\ Rule 900.2NY 50. Definition of ``Short Term Option Series.''
\9\ Id.
\10\ See Securities Exchange Act Release No. 91238 (March 2,
2021), 86 FR 13404 (March 8, 2021) (SR-Phlx-2021-10).
\11\ See Phlx Options 4A, Section 12(b)(5).
\12\ See ISE Supplementary Material .07 to Options 4A, Section
12.
\13\ See Cboe Rule 4.13(e)(1) ``. . . If the Exchange is not
open for business on a respective Monday, the normally Monday
expiring Weekly Expirations will expire on the following business
day. If the Exchange is not open for business on a respective
Wednesday or Friday, the normally Wednesday or Friday expiring
Weekly Expirations will expire on the previous business day.''
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Currently, for each option class eligible for participation in the
Program, the Exchange is limited to opening thirty (30) series for each
expiration date for the specific class.\14\ The thirty (30) series
restriction does not include series that are open by other securities
exchanges under their respective short term options rules; the Exchange
may list these additional series that are listed by other
exchanges.\15\ This thirty (30) series restriction would apply to
Monday and Wednesday QQQ Expiration series as well. In addition, the
Exchange will be able to list series that are listed by other
exchanges, assuming they file similar rules with the Commission to list
QQQ options expiring on Mondays and Wednesdays.
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\14\ See NYSE American Rule 903 Commentary .10.
\15\ Id.
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Finally, the Exchange is amending Rule 903(h), which addresses the
listing of Short Term Options Series that expire in the same week as
monthly or quarterly options series. Currently, that rule states that
no Short Term Option Series may expire in the same week in which
monthly option series on the same class expire (with the exception of
Monday and Wednesday SPY Expirations) or, in the case of Quarterly
Options Series, on an expiration that coincides with an expiration of
Quarterly Options Series on the same class.\16\ As with Monday and
Wednesday SPY Expirations, the Exchange is proposing to permit Monday
and Wednesday QQQ Expirations to expire in the same week as monthly
options series on the same class. The Exchange believes that it is
reasonable to extend this exemption to Monday and Wednesday QQQ
Expirations because Monday and Wednesday QQQ Expirations and standard
monthly options will not expire on the same trading day, as standard
monthly options expire on Fridays. Additionally, the Exchange believes
that not listing Monday and Wednesday QQQ Expirations for one week
every month because there was a monthly QQQ expiration on the Friday of
that week would create investor confusion.
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\16\ See NYSE American Rule 903(h).
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The Exchange does not believe that any market disruptions will be
encountered with the introduction of P.M.-settled Monday and Wednesday
QQQ expirations. The Exchange has the necessary capacity and
surveillance programs in place to support and properly monitor trading
in the proposed Monday and Wednesday QQQ Expirations. The Exchange
currently trades P.M.-settled Short Term Option Series that expire
Monday and Wednesday for SPY and has not experienced any market
disruptions nor issues with capacity. The Exchange currently has
surveillance programs in place to support and properly monitor trading
in Short Term Option Series that expire Monday and Wednesday for SPY.
Similar to SPY, the introduction of Monday and Wednesday QQQ
Expirations will, among other things, expand hedging tools available to
market participants and continue the reduction of the premium cost of
buying protection. The Exchange believes that Monday and Wednesday QQQ
Expirations will allow market participants to purchase QQQ based on
their timing as needed and allow them to tailor their investment and
hedging needs more effectively.
2. Statutory Basis
The Exchange believes that its proposed rule change is consistent
with Section 6(b) of the Act \17\ in general, and furthers the
objectives of Section 6(b)(5) of the Act \18\ in particular, in that it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in
[[Page 40091]]
facilitating transactions in securities, to remove impediments to and
perfect the mechanisms 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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\17\ 15 U.S.C. 78f(b).
\18\ 15 U.S.C. 78f(b)(5).
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The proposed rule change is intended to provide the investing
public and other market participants more flexibility to closely tailor
their investment and hedging decisions in QQQ options, thus allowing
them to better manage their risk exposure.
In particular, the Exchange believes the Program has been
successful to date and that Monday and Wednesday QQQ Expirations should
simply expand the ability of investors to hedge risk against market
movements stemming from economic releases or market events that occur
throughout the month in the same way that the Program has expanded the
landscape of hedging. Similarly, the Exchange believes Monday and
Wednesday QQQ Expirations should create greater trading and hedging
opportunities and flexibility, and will provide customers with the
ability to tailor their investment objectives more effectively. The
Exchange currently lists Monday and Wednesday SPY Expirations.\19\
Also, Cboe \20\ currently permits Monday and Wednesday expirations for
other options with a weekly expiration, such as options on the SPX
pursuant to its Nonstandard Expirations Pilot Program and Phlx \21\ and
ISE \22\ currently permit Monday and Wednesday expirations for other
options with a weekly expiration on NDX pursuant to its Nonstandard
Expirations Pilot Programs, respectively.
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\19\ Supra note 14.
\20\ Supra note 13.
\21\ Supra note 11.
\22\ Supra note 12.
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With the exception of Monday expiration series that are scheduled
to expire on a holiday, there are no material differences in the
treatment of Monday and Wednesday QQQ Expirations for Short Term Option
Series. The Exchange believes that it is consistent with the Act to
treat Monday expiration series that expire on a holiday differently
than Wednesday or Friday expiration series, since the proposed
treatment for Monday expiration series will result in an expiration
date that is closer in time to the scheduled expiration date of the
series, and therefore may be more representative of anticipated market
conditions. Monday SPY expirations are currently treated in this
manner.\23\ Cboe \24\ uses the same procedure for SPX options with
Monday expirations that are listed pursuant to its Nonstandard
Expirations Pilot Program and that are scheduled to expire on a
holiday, as do Phlx \25\ and ISE \26\ for NDX options with Monday
expirations that are listed pursuant to their Nonstandard Expirations
Pilot Programs, respectively.
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\23\ Supra note 14.
\24\ Supra note 13.
\25\ Supra note 11.
\26\ Supra note 12.
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Given the similarities between Monday and Wednesday SPY Expirations
and the proposed Monday and Wednesday QQQ Expirations, the Exchange
believes that applying the provisions in NYSE American Rule 903
Commentary .10 that currently apply to Monday and Wednesday SPY
Expirations to Monday and Wednesday QQQ Expirations is justified. For
example, the Exchange believes that allowing Monday and Wednesday QQQ
Expirations and monthly QQQ expirations in the same week will benefit
investors and minimize investor confusion by providing Monday and
Wednesday QQQ Expirations in a continuous and uniform manner. The
Exchange also believes that it is appropriate to amend NYSE Arca Rule
903(h) to clarify that no Short Term Option Series may expire on the
same day as an expiration of Quarterly Option Series on the same class,
same as SPY.
The Exchange represents that it has an adequate surveillance
program in place to detect manipulative trading in Monday and Wednesday
expirations, including Monday and Wednesday QQQ Expirations, in the
same way that it monitors trading in the current Short Term Option
Series and trading in Monday and Wednesday SPY Expirations. The
Exchange also represents that it has the necessary systems capacity to
support the new options series. Finally, the Exchange does not believe
that any market disruptions will be encountered with the introduction
of Monday and Wednesday QQQ Expirations.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange notes that
having Monday and Wednesday QQQ Expirations is not a novel proposal, as
Monday and Wednesday SPY Expirations are currently listed on the
Exchange.\27\ Cboe \28\ uses the same procedure for SPX options with
Monday expirations that are listed pursuant to its Nonstandard
Expirations Pilot Program and that are scheduled to expire on a
holiday, as do Phlx \29\ and ISE \30\ for NDX options with Monday
expirations that are listed pursuant to their Nonstandard Expirations
Pilot Programs, respectively.
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\27\ Supra note 14.
\28\ Supra note 13.
\29\ Supra note 11.
\30\ Supra note 12.
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The Exchange does not believe the proposal will impose any burden
on intra-market competition, as all market participants will be treated
in the same manner under this proposal. Additionally, the Exchange does
not believe the proposal will impose any burden on inter-market
competition, as nothing prevents the other options exchanges from
proposing similar rules to list and trade Short-Term Option Series with
Monday and Wednesday expirations.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \31\ and Rule 19b-
4(f)(6) thereunder.\32\
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\31\ 15 U.S.C. 78s(b)(3)(A).
\32\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \33\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\34\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has
requested that the Commission waive the 30-day operative delay so that
the proposal may become operative immediately upon filing. The
Commission notes that it
[[Page 40092]]
recently approved Phlx's substantially similar proposal to list and
trade Monday QQQ Expirations and Wednesday QQQ Expirations.\35\ The
Exchange has stated that waiver of the operative delay is consistent
with the protection of investors and the public interest as it would
encourage fair competition among exchanges by allowing the Exchange to
compete effectively with Phlx by having the ability to list and trade
the same Monday and Wednesday QQQ Expirations that Phlx is able to list
and trade. For these reasons, the Commission believes that the proposed
rule change presents no novel issues and that waiver of the 30-day
operative delay is consistent with the protection of investors and the
public interest, and will allow the Exchange to remain competitive with
other exchanges. Accordingly, the Commission hereby waives the
operative delay and designates the proposed rule change operative upon
filing.\36\
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\33\ 17 CFR 240.19b-4(f)(6).
\34\ 17 CFR 240.19b-4(f)(6)(iii).
\35\ See Securities Exchange Act Release No. 91614 (April 20,
2021), 86 FR 22082 (April 26, 2021) (SR-Phlx-2021-10).
\36\ For purposes only of waiving the 30-day operative delay,
the Commission also has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-NYSEAMER-2021-33 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-NYSEAMER-2021-33.
This file number should be included on the subject line if email is
used. To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's internet website (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for website
viewing and printing in the Commission's Public Reference Room, 100 F
Street NE, Washington, DC 20549 on official business days between the
hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be
available for inspection and copying at the principal office of the
Exchange. All comments received will be posted without change. Persons
submitting comments are cautioned that we do not redact or edit
personal identifying information from comment submissions. You should
submit only information that you wish to make available publicly.
All submissions should refer to File Number SR-NYSEAMER-2021-33,
and should be submitted on or before August 16, 2021.
For the Commission, by the Division of Trading and Markets, pursuant
to delegated authority.\37\
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\37\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-15819 Filed 7-23-21; 8:45 am]
BILLING CODE 8011-01-P
