Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Incorporate BX Options 4 Rules By Reference to Nasdaq ISE, LLC Options 4 Rules, 52511-52513 [2021-20326]

Download as PDF Federal Register / Vol. 86, No. 180 / Tuesday, September 21, 2021 / Notices also will be available for inspection and copying at the principal office of FINRA. 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–FINRA–2021–023 and should be submitted on or before October 12, 2021. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2021–20333 Filed 9–20–21; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–92987; File No. SR–BX– 2021–038] Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Incorporate BX Options 4 Rules By Reference to Nasdaq ISE, LLC Options 4 Rules September 15, 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 September 3, 2021, Nasdaq BX, Inc. (‘‘BX’’ 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. lotter on DSK11XQN23PROD with NOTICES1 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to incorporate the BX Options 4 Rules by reference to Nasdaq ISE, LLC (‘‘ISE’’) Options 4 Rules. The text of the proposed rule change is available on the Exchange’s website at https://listingcenter.nasdaq.com/ rulebook/bx/rules, at the principal office of the Exchange, and at the Commission’s Public Reference Room. 17 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Sep<11>2014 21:03 Sep 20, 2021 Jkt 253001 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 BX Options 4 Listing Rules provide for the options that may be listed and traded on BX. The Exchange proposes to incorporate the BX Options 4 Rules by reference to Nasdaq ISE, LLC (‘‘ISE’’) Options 4 Rules. Currently, the BX Options 4 Rules are very similar to the ISE Options 4 Rules. The differences between the BX and ISE Options 4 Rules are non-substantive technical differences.3 Other changes 3 BX Options 4, Section 2 has an extra ‘‘as’’. BX Options 4, Section 3(a)(1) contains a ‘‘The’’ instead of ‘‘the.’’ BX Options 4, Section 3(b) uses the term foregoing’’ as compared to ‘‘forgoing’’ on ISE. BX Options 4, Section 3(h) defines the term ‘‘NMS stock’’ whereas ISE defines the term ‘‘NMS.’’ BX Options 4, Section 3(k)(1)(B) has an extra ‘‘this.’’ The term ‘‘such’’ within BX Options 4, Section 4(f)(5) is lowercase. BX Options 4, Section 5(a) has an extra ‘‘by the Exchange.’’ BX Options 4, Section 5(b) has a ‘‘the’’ and ISE Options 4, Section 5(b) has a ‘‘that.’’ Options 4, Section 5(e) has a lowercase ‘‘rule’’ and unlike the same rule in ISE does not have the registered trademarks. BX Supplementary .01(a) to Options 4, Section 5 uses ‘‘$50’’ instead of ‘‘$50.00,’’ has the term ‘‘option’’ instead of ‘‘options,’’ spells out ‘‘one hundred fifty’’ and incorrectly uses the term ‘‘LEAPS’’ instead of ‘‘LEAPs.’’ BX Supplementary .01(b) to Options 4, Section 5 has the terms ‘‘security’’ instead of ‘‘stock’’ and ‘‘the’’ instead of ‘‘its.’’ BX Supplementary .01(d) to Options 4, Section 5 uses the term ‘‘Strike Program’’ instead of ‘‘Strike Price Program;’’ uses an extra ‘‘the’’; and phrases the last paragraph as, ‘‘Notwithstanding the above delisting policy, the Exchange may grant member requests to add strikes and/or maintain strikes in series of options classes traded pursuant to the $1 Strike Program that are eligible for delisting.’’ The last paragraph of ISE Supplementary .01(d) to Options 4, Section 5 states, ‘‘Notwithstanding the above delisting policy, Member requests to add strikes and/or maintain strikes in series of options classes traded pursuant to the $1 Strike Price Interval Program that are eligible for delisting may be granted.’’ These differences are non-substantive. BX Supplementary .02(d) to Options 4, Section 5 has the term ‘‘section’’ instead of ‘‘Rule.’’ BX Supplementary .03(e) to Options 4, Section 5 has rule in lowercase. BX Options 4, Section 6(a) uses a different phrase than ISE Options 4, Section 6(a), ‘‘Select provisions of the OLPP’’ versus ‘‘The PO 00000 Frm 00074 Fmt 4703 Sfmt 4703 52511 are non-substantive word choice differences.4 Finally, certain rules utilize the phrase ‘‘this Rule’’ instead of a citation.5 Of note, BX Options 4, Section 3(h) does not list reverse repurchase agreements in the defined term ‘‘Financial Instruments’’. The Exchange proposes to include ‘‘reverse repurchase agreements’’ within the list of securities deemed appropriate for options trading on BX in order that the Exchange may list the same products as ISE may list today. Also, BX Options 4, Section 8(a) should include the words ‘‘and continuity.’’ BX’s continuity rules utilize the LEAP term. ISE has this rule text within its Options 4, Section 8(a). The Exchange proposes to incorporate by reference the BX Options 4 Rules to ISE Options 4 Rules. To that end, BX proposes to replace the current BX Options 4 Rules with the following rule text: The rules contained in Nasdaq ISE Options 4, as such rules may be in effect from time to time (the ‘‘Options 4 Rules’’), are hereby incorporated by reference into this BX Options 4, and are thus BX Rules and thereby applicable to BX Participants and associated persons. BX Participants shall comply with the Options 4 Rules as though such rules were fully set forth herein. All defined terms, including any variations thereof, contained in the Options 4 Rules shall be read to refer to the BX related meaning of such term. Solely by way of example, and not in limitation or in exhaustion: The defined term ‘‘Exchange’’ in the Options 4 Rules shall be read to refer to BX; the defined term ‘‘Rule’’ in the Options 4 Rules shall be read to refer to the BX Rule; the defined terms ‘‘Competitive Market Maker’’ and ‘‘Market provisions set forth in this Rule.’’ This aforementioned difference is non-substantive. BX Options 4, Section 6(b)(3) uses the term ‘‘options’’ instead of ‘‘option.’’ BX Options 4, Section 6(b)(ii)(1) uses the term ‘‘options’’ instead of ‘‘option,’’ the term ‘‘Strike Program’’ instead of ‘‘Strike Price Interval Program’’ and, ‘‘rules’’ instead of ‘‘Rules.’’ BX Options 4, Section 9 uses the term ‘‘Fund Shares’’ instead of ‘‘Exchange-Traded Fund Shares.’’ 4 BX Options 4, Section 4(b)(5) should cite to ‘‘Options 4, Section 3(c)’’ instead of ‘‘Options 4, Section 3.’’ In addition, BX Options 4, Section 4(b)(5) has two stray commas. BX Options 4, Section 4(f) has an extra ‘‘in’’. BX Options 4, Section 4(g)(2) has an extra ‘‘of Options 4’’ and two stray commas. BX Options 4, Section 5(d) incorrectly cites to Section 3(i) instead of Section 3(h). BX Options 4, Section 6(b) incorrectly cites to Section 3(i) instead of Section 3(h). BX Options 4, Section 6(b)(i) incorrectly cites to Supplementary Material .03(d) instead of Supplementary Material .02(d). This paragraph also uses the term ‘‘options’’ instead of ‘‘option.’’ Options 3, Section 6(b)(ii) incorrectly cites to subparagraph (a) instead of subparagraph (i). 5 See BX Options 4, Section 3(c)(2). BX utilizes citations to Options 4, Section 3(b)(1) and Options 4, Section 3(b)(2) instead of simply citing to ‘‘this Rules’’ as is the case with ISE Options 4, Section 3(c)(2). Other examples include BX Options 4, Section 3(c)(3) which cites to Options 4, Section 3(b)(4), BX Options 4, Section 3(c)(4)(B)(ii) which cites to Options 4, Section 3(b)(5)(i). E:\FR\FM\21SEN1.SGM 21SEN1 52512 Federal Register / Vol. 86, No. 180 / Tuesday, September 21, 2021 / Notices Maker’’ in the Options 4 Rules shall be read to refer to the BX Market Maker; the defined term ‘‘Primary Market Maker’’ in the Options 4 Rules shall be read to refer to the BX Lead Market Maker; and the defined terms ‘‘Electronic Access Member,’’ ‘‘EAM,’’ or ‘‘Member’’ in the Options 4 Rules shall be read to refer to the BX Participant. will benefit investors, the public, and the markets, because the new rules will be clearer, better organized, and simpler. Also, the proposal is just and equitable because it will render the Exchange’s listing rules easier for Participants to read and understand. This rule text will account for differences that may exist in the usage of terms as between BX and ISE. The proposed rule text list instances in which cross references in the ISE Options 4 Rules to BX Options 4 Rules shall be read to refer instead to the Exchange Rules, and references to ISE terms (whether or not defined) shall be read to refer to the Exchange-related meanings of those terms. For instance, references to defined terms ‘‘Exchange’’ or ‘‘ISE’’ shall be read to refer to ISE. The Exchange proposes to delete in their entirety the BX Options 4 Rules and incorporate by reference the ISE Options 4 Rules.6 Today, the rules of Nasdaq GEMX, LLC and Nasdaq MRX, LLC are incorporated by reference to the rules of ISE. The Exchange will also separately file to incorporate the Options 4 Rules of The Nasdaq Options Market LLC and Nasdaq Phlx LLC to the ISE Options 4 Rules, respectively, to ISE. The Exchange believes that harmonizing the Options 4 Rules across its 6 Nasdaq Affiliated Options Exchanges will assist the Exchange in listing options across its affiliated markets. Also, incorporating by reference the ISE Options 4 Rules into the Exchange’s rulebook will organize those listing rules in a more logical order, thereby eliminating unnecessary complexity in the listing process and otherwise streamlining the Exchange’s existing listing rules and their associated procedures. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not expect that its proposed changes to incorporate BX’s Options 4 Rules to ISE’s Options 4 Rules will have any competitive impact on BX’s listing rules, to the contrary, the Exchange hopes that by clarifying, reorganizing, and streamlining its listing rules, the Exchange’s listing process will be clear. The proposed changes will apply equally to all market participants. lotter on DSK11XQN23PROD with NOTICES1 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,7 in general, and furthers the objectives of Section 6(b)(5) of the Act,8 in particular, in that it is designed to promote just and equitable principles of trade and to protect investors and the public interest. The Exchange believes that its proposal to delete its existing listing rules and incorporate by reference the ISE Options 4 Rules will promote a free and open market, and 6 The Exchange will separately request an exemption from the rule filing requirements of Section 19(b) of the Act for changes to BX Options 4 Rules to the extent such rules are affected solely by virtue of a change to ISE Options 4 Rules. The Exchange’s proposed rule change will not become effective unless and until the Commission grants this exemption request. 7 15 U.S.C. 78f(b). 8 15 U.S.C. 78f(b)(5). VerDate Sep<11>2014 21:03 Sep 20, 2021 Jkt 253001 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 9 and subparagraph (f)(6) of Rule 19b–4 thereunder.10 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. 9 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. 10 17 PO 00000 Frm 00075 Fmt 4703 Sfmt 4703 IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– BX–2021–038 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–BX–2021–038. 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–BX–2021–038 and should be submitted on or before October 12, 2021. 11 17 E:\FR\FM\21SEN1.SGM CFR 200.30–3(a)(12). 21SEN1 Federal Register / Vol. 86, No. 180 / Tuesday, September 21, 2021 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.11 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2021–20326 Filed 9–20–21; 8:45 am] 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 BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–92990; File No. SR–Phlx– 2021–53] Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Incorporate the Phlx Options 4 Rules By Reference to Nasdaq ISE, LLC Options 4 Rules September 15, 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 September 3, 2021, Nasdaq PHLX LLC (‘‘Phlx’’ 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 incorporate the Phlx Options 4 Rules by reference to Nasdaq ISE, LLC (‘‘ISE’’) Options 4 Rules. The text of the proposed rule change is available on the Exchange’s website at https://listingcenter.nasdaq.com/ rulebook/phlx/rules, at the principal office of the Exchange, and at the Commission’s Public Reference Room. lotter on DSK11XQN23PROD with NOTICES1 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 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Sep<11>2014 21:03 Sep 20, 2021 Jkt 253001 1. Purpose The Phlx Options 4 Listing Rules provide for the options that may be listed and traded on Phlx. The Exchange proposes to incorporate the Phlx Options 4 Rules by reference to Nasdaq ISE, LLC (‘‘ISE’’) Options 4 Rules. Options 4, Section 3, Criteria for Underlying Securities Currently, the Phlx Options 4 Rules are very similar to the ISE Options 4 Rules, except for Options 4, Section 3(h). The differences between the Phlx and ISE Options 4 Rules are nonsubstantive technical differences.3 Other changes are non-substantive word choice differences.4 Finally, certain 3 Phlx capitalizes the ‘‘of’’ and ‘‘and’’ in title to Options 4, Section 2, while ISE does not capitalize those words. Phlx Options 4, Section 3(c)(2)(A)(ii) uses a ‘‘that’’ instead of a ‘‘than’’ like ISE. Phlx Options 4, Section 3(c)(3) has an extra phrase ‘‘of this Rule’’ as does Phlx Options 4, Section 3(c)(4)(B)(ii). Also, Phlx Options 4, Section 3(c)(4)(B)(ii) cites to ‘‘Options 4, Section 3(b)(5)(i)’’ instead of ‘‘Options 4, Section 3(b)(5)(l)’’ like ISE. Phlx defines a ‘‘market information sharing agreement’’ within Options 4, Section 3(g)(2), whereas ISE defines the same term within Options 4, Section 3(i). ISE Options 4, Section 4(b)(5) has a reference to ‘‘paragraph (b)’’ where Phlx does not have the reference to (b) it only states of this paragraph. Options 4, Section 4(g) lacks an ‘‘if’’ similar to ISE. Phlx Options 4, Section 4(f)(1) lacks an ‘‘of’’ similar to ISE. ISE Options 4, Section 5(a), unlike Phlx, has an extra ‘‘as’’, specific reference to ‘‘Options 4, Section 6(b)’’ and use of the phrase ‘‘to this Section 5’’ in two places. ISE Options 4, Section 5(d) has an extra ‘‘the.’’ Phlx Options 4, Section 5 at Supplementary Material .03 is missing a reference to ‘‘and QQQ’’ which should appear as it does in the remainder of the rule filing. Phlx Options 4, Section 5 at Supplementary Material .04 has the term ‘‘P.M. settled’’ where ISE does not and capitalizes some terms that ISE does not capitalize. The word ‘‘approximate’’ appears in Phlx Options 4, Section 5 at Supplementary Material .04(c) and not in ISE. Phlx Options 4, Section 5 at Supplementary Material .04(d) references Options 1, Section 1(b)(13) when it should reference Options 4, Section 3(h) similar to ISE. Options 4, Section 3(f)(1) should have an ‘‘and’’ and an ‘‘a’’ similar to ISE instead of an ‘‘or.’’ Phlx Options 4, Section 5 at Supplementary Material .06 uses the term ‘‘Strike Price Program’’ instead of ‘‘Strike Program’’ like ISE. Phlx Options 4, Section 8 uses the term ‘‘intervals’’ instead of the singular ‘‘interval’’ like ISE and references Options 2, Section 4(c)(1)(A) instead of Options 2, Section 4(b)(4)(i)(A) like ISE. Phlx Options 4, Section 9 uses the term ‘‘Exchange-Traded Fund Shares’’ and ISE uses the term ‘‘Fund Shares.’’ Options 4, Section 10 references different exchange names and terms for members and market makers. 4 Options 4, Section 3(f)(4) states, ‘‘the SEC has otherwise authorized the listing’’ whereas ISE states ‘‘the SEC has otherwise authorized the listing.’’ Unlike ISE, Phlx does not have the phrase ‘‘In the case of options covering Fund Shares approved pursuant to’’ at the beginning of Options 4, Section PO 00000 Frm 00076 Fmt 4703 Sfmt 4703 52513 rules utilize the phrase ‘‘this Rule’’ instead of a citation.5 Also, ISE recently amended its Options 4, Section 3(h) 6 to make certain amendments which Phlx proposes to adopt in order that its rules may be identical. First, Phlx would remove rule text within Options 4, Section 3(h) at the end of the paragraph which provides, ‘‘all of the following conditions are met.’’ Paragraph (h) would simply end with ‘‘provided that:’’ and direct market participants to subparagraphs (1) and (2). Second, the Exchange proposes to capitalize ‘‘the’’ at the beginning of Options 4, Section 3(h)(1) and remove ‘‘; and’’ at the end of the paragraph and instead at a period so that subparagraphs (1) and (2) are not linked, but rather read independently. Today, Options 4, Section 3(h)(1) applies to all Exchange-Traded Fund Shares. Third, the Exchange proposes to clarify that Options 4, Section 3(h)(2) applies to only international or global Exchange-Traded Fund Shares. Specifically, the Exchange proposes to provide within Options 4, Section 3(h)(2) that, ‘‘Exchange-Traded Fund Shares based on international or global indexes, or portfolios that include nonU.S. securities, shall meet the following criteria.’’ Proposed Options 4, Sections 3(h) generally concerns securities deemed appropriate for options trading. The proposed rule text adds language stating that subparagraph (h)(2) of Options 4, Section 3 applies to the extent the Exchange-Traded Fund Share is based on international or global indexes, or portfolios that include nonU.S. securities. This language is intended to serve as a guidepost and clarify that (1) subparagraph (h)(2) does not apply to an Exchange-Traded Fund Shares based on a U.S. domestic index or portfolio, and (2) subparagraph (h)(2) includes Exchange-Traded Fund Shares that track a portfolio and do not track an index. 4(g)(2). ISE Options 4, Section 5(b) uses ‘‘shall’’ and Phlx uses ‘‘will.’’ Phlx Options 4, Section 5 at Supplementary .01 has an extra phrase, ‘‘(a) The interval of strike prices of series of options on individual stocks may be:’’ and a period after Strike Price Interval Program. Phlx Options 4, Section 5 at Supplementary .01(b) uses the term ‘‘security’’ instead of ‘‘stock’’ and numbers the subsections differently. Phlx has the sentence, ‘‘A security shall remain in the $1 Strike Price Interval Program until otherwise designated by the Exchange’’ and ISE does not have the same sentence, although ISE has the same ability to determine what listings are in the $1 Strike Price Interval Program. Also, ISE uses the phrase ‘‘Strike Price Interval Program’’ in that paragraph and Phlx uses ‘‘Strike Program.’’ 5 See Phlx Options 4, Section 3(c)(2). 6 See Securities Exchange Act Release No. 92226 (June 22, 2021) (SR–ISE–2021–14). E:\FR\FM\21SEN1.SGM 21SEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 86, Number 180 (Tuesday, September 21, 2021)]
[Notices]
[Pages 52511-52513]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-20326]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-92987; File No. SR-BX-2021-038]


Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Incorporate BX 
Options 4 Rules By Reference to Nasdaq ISE, LLC Options 4 Rules

September 15, 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 September 3, 2021, Nasdaq BX, Inc. (``BX'' 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 incorporate the BX Options 4 Rules by 
reference to Nasdaq ISE, LLC (``ISE'') Options 4 Rules.
    The text of the proposed rule change is available on the Exchange's 
website at https://listingcenter.nasdaq.com/rulebook/bx/rules, at the 
principal office of the Exchange, and at the Commission's Public 
Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The BX Options 4 Listing Rules provide for the options that may be 
listed and traded on BX. The Exchange proposes to incorporate the BX 
Options 4 Rules by reference to Nasdaq ISE, LLC (``ISE'') Options 4 
Rules.
    Currently, the BX Options 4 Rules are very similar to the ISE 
Options 4 Rules. The differences between the BX and ISE Options 4 Rules 
are non-substantive technical differences.\3\ Other changes are non-
substantive word choice differences.\4\ Finally, certain rules utilize 
the phrase ``this Rule'' instead of a citation.\5\ Of note, BX Options 
4, Section 3(h) does not list reverse repurchase agreements in the 
defined term ``Financial Instruments''. The Exchange proposes to 
include ``reverse repurchase agreements'' within the list of securities 
deemed appropriate for options trading on BX in order that the Exchange 
may list the same products as ISE may list today. Also, BX Options 4, 
Section 8(a) should include the words ``and continuity.'' BX's 
continuity rules utilize the LEAP term. ISE has this rule text within 
its Options 4, Section 8(a).
---------------------------------------------------------------------------

    \3\ BX Options 4, Section 2 has an extra ``as''. BX Options 4, 
Section 3(a)(1) contains a ``The'' instead of ``the.'' BX Options 4, 
Section 3(b) uses the term foregoing'' as compared to ``forgoing'' 
on ISE. BX Options 4, Section 3(h) defines the term ``NMS stock'' 
whereas ISE defines the term ``NMS.'' BX Options 4, Section 
3(k)(1)(B) has an extra ``this.'' The term ``such'' within BX 
Options 4, Section 4(f)(5) is lowercase. BX Options 4, Section 5(a) 
has an extra ``by the Exchange.'' BX Options 4, Section 5(b) has a 
``the'' and ISE Options 4, Section 5(b) has a ``that.'' Options 4, 
Section 5(e) has a lowercase ``rule'' and unlike the same rule in 
ISE does not have the registered trademarks. BX Supplementary .01(a) 
to Options 4, Section 5 uses ``$50'' instead of ``$50.00,'' has the 
term ``option'' instead of ``options,'' spells out ``one hundred 
fifty'' and incorrectly uses the term ``LEAPS'' instead of 
``LEAPs.'' BX Supplementary .01(b) to Options 4, Section 5 has the 
terms ``security'' instead of ``stock'' and ``the'' instead of 
``its.'' BX Supplementary .01(d) to Options 4, Section 5 uses the 
term ``Strike Program'' instead of ``Strike Price Program;'' uses an 
extra ``the''; and phrases the last paragraph as, ``Notwithstanding 
the above delisting policy, the Exchange may grant member requests 
to add strikes and/or maintain strikes in series of options classes 
traded pursuant to the $1 Strike Program that are eligible for 
delisting.'' The last paragraph of ISE Supplementary .01(d) to 
Options 4, Section 5 states, ``Notwithstanding the above delisting 
policy, Member requests to add strikes and/or maintain strikes in 
series of options classes traded pursuant to the $1 Strike Price 
Interval Program that are eligible for delisting may be granted.'' 
These differences are non-substantive. BX Supplementary .02(d) to 
Options 4, Section 5 has the term ``section'' instead of ``Rule.'' 
BX Supplementary .03(e) to Options 4, Section 5 has rule in 
lowercase. BX Options 4, Section 6(a) uses a different phrase than 
ISE Options 4, Section 6(a), ``Select provisions of the OLPP'' 
versus ``The provisions set forth in this Rule.'' This 
aforementioned difference is non-substantive. BX Options 4, Section 
6(b)(3) uses the term ``options'' instead of ``option.'' BX Options 
4, Section 6(b)(ii)(1) uses the term ``options'' instead of 
``option,'' the term ``Strike Program'' instead of ``Strike Price 
Interval Program'' and, ``rules'' instead of ``Rules.'' BX Options 
4, Section 9 uses the term ``Fund Shares'' instead of ``Exchange-
Traded Fund Shares.''
    \4\ BX Options 4, Section 4(b)(5) should cite to ``Options 4, 
Section 3(c)'' instead of ``Options 4, Section 3.'' In addition, BX 
Options 4, Section 4(b)(5) has two stray commas. BX Options 4, 
Section 4(f) has an extra ``in''. BX Options 4, Section 4(g)(2) has 
an extra ``of Options 4'' and two stray commas. BX Options 4, 
Section 5(d) incorrectly cites to Section 3(i) instead of Section 
3(h). BX Options 4, Section 6(b) incorrectly cites to Section 3(i) 
instead of Section 3(h). BX Options 4, Section 6(b)(i) incorrectly 
cites to Supplementary Material .03(d) instead of Supplementary 
Material .02(d). This paragraph also uses the term ``options'' 
instead of ``option.'' Options 3, Section 6(b)(ii) incorrectly cites 
to subparagraph (a) instead of subparagraph (i).
    \5\ See BX Options 4, Section 3(c)(2). BX utilizes citations to 
Options 4, Section 3(b)(1) and Options 4, Section 3(b)(2) instead of 
simply citing to ``this Rules'' as is the case with ISE Options 4, 
Section 3(c)(2). Other examples include BX Options 4, Section 
3(c)(3) which cites to Options 4, Section 3(b)(4), BX Options 4, 
Section 3(c)(4)(B)(ii) which cites to Options 4, Section 3(b)(5)(i).
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    The Exchange proposes to incorporate by reference the BX Options 4 
Rules to ISE Options 4 Rules. To that end, BX proposes to replace the 
current BX Options 4 Rules with the following rule text:

    The rules contained in Nasdaq ISE Options 4, as such rules may 
be in effect from time to time (the ``Options 4 Rules''), are hereby 
incorporated by reference into this BX Options 4, and are thus BX 
Rules and thereby applicable to BX Participants and associated 
persons. BX Participants shall comply with the Options 4 Rules as 
though such rules were fully set forth herein. All defined terms, 
including any variations thereof, contained in the Options 4 Rules 
shall be read to refer to the BX related meaning of such term. 
Solely by way of example, and not in limitation or in exhaustion: 
The defined term ``Exchange'' in the Options 4 Rules shall be read 
to refer to BX; the defined term ``Rule'' in the Options 4 Rules 
shall be read to refer to the BX Rule; the defined terms 
``Competitive Market Maker'' and ``Market

[[Page 52512]]

Maker'' in the Options 4 Rules shall be read to refer to the BX 
Market Maker; the defined term ``Primary Market Maker'' in the 
Options 4 Rules shall be read to refer to the BX Lead Market Maker; 
and the defined terms ``Electronic Access Member,'' ``EAM,'' or 
``Member'' in the Options 4 Rules shall be read to refer to the BX 
Participant.

This rule text will account for differences that may exist in the usage 
of terms as between BX and ISE. The proposed rule text list instances 
in which cross references in the ISE Options 4 Rules to BX Options 4 
Rules shall be read to refer instead to the Exchange Rules, and 
references to ISE terms (whether or not defined) shall be read to refer 
to the Exchange-related meanings of those terms. For instance, 
references to defined terms ``Exchange'' or ``ISE'' shall be read to 
refer to ISE.
    The Exchange proposes to delete in their entirety the BX Options 4 
Rules and incorporate by reference the ISE Options 4 Rules.\6\ Today, 
the rules of Nasdaq GEMX, LLC and Nasdaq MRX, LLC are incorporated by 
reference to the rules of ISE. The Exchange will also separately file 
to incorporate the Options 4 Rules of The Nasdaq Options Market LLC and 
Nasdaq Phlx LLC to the ISE Options 4 Rules, respectively, to ISE. The 
Exchange believes that harmonizing the Options 4 Rules across its 6 
Nasdaq Affiliated Options Exchanges will assist the Exchange in listing 
options across its affiliated markets. Also, incorporating by reference 
the ISE Options 4 Rules into the Exchange's rulebook will organize 
those listing rules in a more logical order, thereby eliminating 
unnecessary complexity in the listing process and otherwise 
streamlining the Exchange's existing listing rules and their associated 
procedures.
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    \6\ The Exchange will separately request an exemption from the 
rule filing requirements of Section 19(b) of the Act for changes to 
BX Options 4 Rules to the extent such rules are affected solely by 
virtue of a change to ISE Options 4 Rules. The Exchange's proposed 
rule change will not become effective unless and until the 
Commission grants this exemption request.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\7\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\8\ in particular, in that it is designed to promote 
just and equitable principles of trade and to protect investors and the 
public interest. The Exchange believes that its proposal to delete its 
existing listing rules and incorporate by reference the ISE Options 4 
Rules will promote a free and open market, and will benefit investors, 
the public, and the markets, because the new rules will be clearer, 
better organized, and simpler. Also, the proposal is just and equitable 
because it will render the Exchange's listing rules easier for 
Participants to read and understand.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. The Exchange does not expect 
that its proposed changes to incorporate BX's Options 4 Rules to ISE's 
Options 4 Rules will have any competitive impact on BX's listing rules, 
to the contrary, the Exchange hopes that by clarifying, reorganizing, 
and streamlining its listing rules, the Exchange's listing process will 
be clear. The proposed changes will apply equally to all market 
participants.

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 \9\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 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-BX-2021-038 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-BX-2021-038. 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-BX-2021-038 and should be submitted on 
or before October 12, 2021.
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    \11\ 17 CFR 200.30-3(a)(12).


[[Page 52513]]


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    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-20326 Filed 9-20-21; 8:45 am]
BILLING CODE 8011-01-P

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