Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Proposal To Permit Monday and Wednesday Expirations for Options Listed Pursuant to the Short Term Option Series Program on the iShares Russell 2000 ETF, 56315-56318 [2021-21995]

Download as PDF Federal Register / Vol. 86, No. 193 / Friday, October 8, 2021 / Notices Comments may be submitted by any of the following methods: SECURITIES AND EXCHANGE COMMISSION 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– ISE–2021–20 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. jspears on DSK121TN23PROD with NOTICES1 All submissions should refer to File Number SR–ISE–2021–20. 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–ISE–2021–20 and should be submitted on or before October 29, 2021. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.33 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2021–21983 Filed 10–7–21; 8:45 am] [Release No. 34–93248; File No. SR–BX– 2021–043] Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Proposal To Permit Monday and Wednesday Expirations for Options Listed Pursuant to the Short Term Option Series Program on the iShares Russell 2000 ETF October 4, 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 30, 2021, Nasdaq BX, Inc. (‘‘BX’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to permit Monday and Wednesday expirations for options listed pursuant to the Short Term Option Series Program on the iShares Russell 2000 ETF. 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. BILLING CODE 8011–01–P 1 15 33 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 17:07 Oct 07, 2021 2 17 Jkt 256001 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00077 Fmt 4703 Sfmt 4703 56315 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend BX Options 4, Section 5 at Supplementary Material .03 to permit Monday and Wednesday expirations for options listed pursuant to the Short Term Option Series Program (‘‘Program’’) on the iShares Russell 2000 ETF (‘‘IWM’’). This rule change is similar to a rule change recently approved for Nasdaq Phlx LLC (‘‘Phlx’’).3 A Short Term Option Series means 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 proposes to amend BX Options 4, Section 5 at Supplementary Material .03 to permit the listing of options series that expire on Mondays and Wednesdays in IWM. Monday Expirations As proposed, with respect to Monday IWM Expirations within Supplementary Material .03 to Options 4, Section 5, the Exchange may open for trading on any Friday or Monday that is a business day series of options on IWM 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 IWM Expirations’’), provided that Monday IWM 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 3 See Securities Exchange Act Release No. 93157 (September 28, 2021) (SR–PHLX–2021–43). 4 BX Options 1, Section 1(a)(58) provides the term ‘‘Short Term Option Series’’ means 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. If a Tuesday, Wednesday, Thursday or Friday is not a business day, the series may be opened (or shall expire) on the first business day immediately prior to that Tuesday, Wednesday, Thursday or Friday, respectively. For a series listed pursuant to this Rule for Monday expiration, if a Monday is not a business day, the series shall expire on the first business day immediately following that Monday. E:\FR\FM\08OCN1.SGM 08OCN1 56316 Federal Register / Vol. 86, No. 193 / Friday, October 8, 2021 / Notices may list up to five consecutive Monday IWM Expirations at one time; the Exchange may have no more than a total of five Monday IWM Expirations. Wednesday Expirations As proposed, with respect to Wednesday IWM Expirations within Supplementary Material .03 to Options 4, Section 5, the Exchange may open for trading on any Tuesday or Wednesday that is a business day series of options on IWM 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 IWM Expirations’’). The Exchange may list up to five consecutive Wednesday IWM Expirations at one time; the Exchange may have no more than a total of five Wednesday IWM Expirations and a total of five Wednesday IWM Expirations will be subject to the provisions of this Rule. jspears on DSK121TN23PROD with NOTICES1 Monday and Wednesday Expirations The interval between strike prices for the proposed Monday and Wednesday IWM Expirations will be the same as those for the current Short Term Option Series for Wednesday and Friday expirations applicable to the Program.5 Specifically, the Monday and Wednesday IWM Expirations will have a $0.50 strike interval minimum.6 As is the case with other equity options series listed pursuant to the Program, the Monday and Wednesday IWM Expiration series will be P.M.-settled. Pursuant to Options 1, Section 1(a)(58), 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 Options 1, Section 1(a)(58) 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 IWM, 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 5 See Supplementary Material .03(e) to Options 4, Section 5. 6 See Supplementary Material .03 at Options 4, Section 5. VerDate Sep<11>2014 17:07 Oct 07, 2021 Jkt 256001 anticipated market conditions. Monday SPY and QQQ expirations 7 are treated in this manner today. Cboe Exchange, Inc. (‘‘Cboe’’) uses the same procedure for options on the S&P 500 index (‘‘SPX’’), Mini-SPX Index Options (‘‘XSP’’), Russell 2000 Index (‘‘RUT’’) and Mini-Russell 200 Index Options (‘‘MRUT’’) and with Monday expirations that are listed pursuant to its Nonstandard Expirations Pilot Program and that are scheduled to expire on a holiday.8 Also, Phlx 9 and Nasdaq ISE, LLC (‘‘ISE’’) 10 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. 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.11 The thirty (30) series restriction does not include series that are open by other securities exchanges under their respective short term option rules; the Exchange may list these additional series that are listed by other exchanges.12 This thirty (30) series restriction would apply to Monday and Wednesday IWM 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 Securities and Exchange Commission (‘‘Commission’’) to list IWM options expiring on Mondays and Wednesdays. Finally, the Exchange is amending Supplementary Material .03(b) to Options 4, Section 5, 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 and QQQ Expirations) or, in the case of Quarterly Options Series, on an expiration that coincides with an expiration of Quarterly Option Series on 7 See Supplementary Material .03 at Options 4, Section 5. 8 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.’’ 9 See Phlx Options 4A, Section 12(b)(5). 10 See ISE Supplementary Material .07 to Options 4A, Section 12. 11 See Supplementary Material .03(a) to Options 4, Section 5. 12 See Supplementary Material .03(a) to Options 4, Section 5. PO 00000 Frm 00078 Fmt 4703 Sfmt 4703 the same class.13 As with Monday and Wednesday SPY and QQQ Expirations, the Exchange proposes to permit Monday and Wednesday IWM 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 IWM Expirations because Monday and Wednesday IWM 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 IWM Expirations for one week every month because there was a monthly IWM 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 IWM expirations. The Exchange has the necessary capacity and surveillance programs in place to support and properly monitor trading in the proposed Monday and Wednesday IWM Expirations. The Exchange currently trades P.M.-settled Short Term Option Series that expire Monday and Wednesday for SPY and QQQ and has not experienced any market disruptions nor issues with capacity. Today, the Exchange has surveillance programs in place to support and properly monitor trading in Short Term Option Series that expire Monday and Wednesday for SPY and QQQ. Similar to SPY and QQQ, the introduction of IWM Monday and Wednesday 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 IWM expirations will allow market participants to purchase IWM based on their timing as needed and allow them to tailor their investment and hedging needs more effectively. The Exchange proposes to amend the ‘‘:’’ to a ‘‘.’’ after the title ‘‘Short Term Options Series Program’’ within Supplementary Material .03 to Options 4, Section 5. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,14 in general, and furthers the objectives of Section 6(b)(5) 13 See Supplementary Material .03(a) to Options 4, Section 5. 14 15 U.S.C. 78f(b). E:\FR\FM\08OCN1.SGM 08OCN1 jspears on DSK121TN23PROD with NOTICES1 Federal Register / Vol. 86, No. 193 / Friday, October 8, 2021 / Notices of the Act,15 in particular, in that it is designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general to protect investors and the public interest by providing the investing public and other market participants more flexibility to closely tailor their investment and hedging decisions in IWM 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 IWM 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 IWM Expirations should create greater trading and hedging opportunities, as well as flexibility that will provide customers with the ability to tailor their investment objectives more effectively. BX currently lists Monday and Wednesday SPY and QQQ Expirations.16 Also, Cboe 17 currently permits Monday and Wednesday expirations for other options with a weekly expiration, such as options on the SPX, XSP, RUT and MRUT pursuant to its Nonstandard Expirations Pilot Program. Phlx 18 and ISE 19 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 IWM 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 U.S.C. 78f(b)(5). Supplementary Material .03 at Options 4, Section 5. 17 See note 8 above. 18 See note 9 above. 19 See note 10 above. conditions. Monday SPY and QQQ expirations are treated in this manner today.20 Cboe 21 uses the same procedure for SPX, XSP, RUT and MRUT 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 22 and ISE 23 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 and QQQ Expirations and the proposed Monday and Wednesday IWM Expirations, the Exchange believes that applying the provisions in Supplementary Material .03 to Options 4, Section 5, which currently apply to Monday and Wednesday SPY and QQQ Expirations, to Monday and Wednesday IWM Expirations is justified. For example, the Exchange believes that allowing Monday and Wednesday IWM Expirations and monthly IWM expirations in the same week will benefit investors and minimize investor confusion by providing Monday and Wednesday IWM Expirations in a continuous and uniform manner. The Exchange also believes that is appropriate to amend Supplementary Material .03(b) to Options 4, Section 5 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 and QQQ. 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 IWM Expirations, in the same way that it monitors trading in the current Short Term Option Series and trading in Monday and Wednesday SPY and QQQ 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 IWM expirations. The Exchange’s proposal to amend the ‘‘:’’ to a ‘‘.’’ after the title ‘‘Short Term Options Series Program’’ within Supplementary Material .03 to Options 4, Section 5 is a non-substantive technical amendment. 15 15 16 See VerDate Sep<11>2014 17:07 Oct 07, 2021 Jkt 256001 20 See Supplementary Material .03 at Options 4, Section 5. 21 See note 8 above. 22 See note 9 above. 23 See note 10 above. PO 00000 Frm 00079 Fmt 4703 Sfmt 4703 56317 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 IWM expirations is not a novel proposal, as Monday and Wednesday SPY and QQQ Expirations are currently listed on BX.24 Cboe 25 uses the same procedure for SPX, XSP, RUT and MRUT 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 26 and ISE 27 for NDX options with Monday expirations that are listed pursuant to their Nonstandard Expirations Pilot Programs, respectively. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 28 and Rule 19b– 4(f)(6) thereunder.29 A proposed rule change filed pursuant to Rule 19b–4(f)(6) under the Act normally does not become operative for 30 days after the date of its filing. However, Rule 19b–4(f)(6)(iii) 30 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has requested that the Commission waive the 30-day operative delay so that the proposal may 24 See Supplementary Material .03 at Options 4, Section 5. 25 See note 8 above. 26 See note 9 above. 27 See note 10 above. 28 15 U.S.C. 78s(b)(3)(A). 29 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. 30 17 CFR 240.19b–4(f)(6)(iii). E:\FR\FM\08OCN1.SGM 08OCN1 56318 Federal Register / Vol. 86, No. 193 / Friday, October 8, 2021 / Notices become operative immediately upon filing. The Commission notes that it recently approved Phlx’s substantially similar proposal to list and trade Monday IWM Expirations and Wednesday IWM Expirations.31 The Exchange has stated that waiver of the operative delay will permit the Exchange to immediately amend BX Options 4, Section 5 at Supplementary Material .03 to permit the Exchange to offer Monday and Wednesday expirations for options listed pursuant to the Program on IWM similar to Phlx. 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.32 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: jspears on DSK121TN23PROD with NOTICES1 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–2021–043 on the subject line. All submissions should refer to File Number SR–BX–2021–043. 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–2021–043 and should be submitted on or before October 29, 2021. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.33 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2021–21995 Filed 10–7–21; 8:45 am] BILLING CODE 8011–01–P 31 See 32 For VerDate Sep<11>2014 17:07 Oct 07, 2021 Jkt 256001 [Release No. 34–93247; File No. SR–BOX– 2021–23] Self-Regulatory Organizations; BOX Exchange 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 iShares Russell 2000 ETF October 4, 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 29, 2021, BOX Exchange LLC (the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘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 from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend BOX Rule IM–5050–6 (Short Term Option Series Program) to permit Monday and Wednesday expirations for options listed pursuant to the Short Term Option Series Program on the iShares Russell 2000 ETF. The text of the proposed rule change is available from the principal office of the Exchange, at the Commission’s Public Reference Room and also on the Exchange’s internet website at https:// boxoptions.com. 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 these statements may be examined at the places specified in Item IV below. The self-regulatory organization has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. supra note 3. purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). SECURITIES AND EXCHANGE COMMISSION 1 15 33 17 PO 00000 CFR 200.30–3(a)(12). Frm 00080 Fmt 4703 Sfmt 4703 2 17 E:\FR\FM\08OCN1.SGM U.S.C. 78s(b)(1). CFR 240.19b–4. 08OCN1

Agencies

[Federal Register Volume 86, Number 193 (Friday, October 8, 2021)]
[Notices]
[Pages 56315-56318]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-21995]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93248; File No. SR-BX-2021-043]


Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change to Proposal To 
Permit Monday and Wednesday Expirations for Options Listed Pursuant to 
the Short Term Option Series Program on the iShares Russell 2000 ETF

October 4, 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 30, 2021, Nasdaq BX, Inc. (``BX'' or ``Exchange'') filed 
with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the Exchange. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to permit Monday and Wednesday expirations 
for options listed pursuant to the Short Term Option Series Program on 
the iShares Russell 2000 ETF.
    The text of the proposed rule change is available on the Exchange's 
website at https://listingcenter.nasdaq.com/rulebook/bx/rules, at the 
principal office of the Exchange, and at the Commission's Public 
Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to amend BX Options 4, Section 5 at 
Supplementary Material .03 to permit Monday and Wednesday expirations 
for options listed pursuant to the Short Term Option Series Program 
(``Program'') on the iShares Russell 2000 ETF (``IWM''). This rule 
change is similar to a rule change recently approved for Nasdaq Phlx 
LLC (``Phlx'').\3\
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 93157 (September 28, 
2021) (SR-PHLX-2021-43).
---------------------------------------------------------------------------

    A Short Term Option Series means 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 
proposes to amend BX Options 4, Section 5 at Supplementary Material .03 
to permit the listing of options series that expire on Mondays and 
Wednesdays in IWM.
---------------------------------------------------------------------------

    \4\ BX Options 1, Section 1(a)(58) provides the term ``Short 
Term Option Series'' means 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. If 
a Tuesday, Wednesday, Thursday or Friday is not a business day, the 
series may be opened (or shall expire) on the first business day 
immediately prior to that Tuesday, Wednesday, Thursday or Friday, 
respectively. For a series listed pursuant to this Rule for Monday 
expiration, if a Monday is not a business day, the series shall 
expire on the first business day immediately following that Monday.
---------------------------------------------------------------------------

Monday Expirations
    As proposed, with respect to Monday IWM Expirations within 
Supplementary Material .03 to Options 4, Section 5, the Exchange may 
open for trading on any Friday or Monday that is a business day series 
of options on IWM 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 IWM Expirations''), provided that 
Monday IWM 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

[[Page 56316]]

may list up to five consecutive Monday IWM Expirations at one time; the 
Exchange may have no more than a total of five Monday IWM Expirations.
Wednesday Expirations
    As proposed, with respect to Wednesday IWM Expirations within 
Supplementary Material .03 to Options 4, Section 5, the Exchange may 
open for trading on any Tuesday or Wednesday that is a business day 
series of options on IWM 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 IWM Expirations''). The 
Exchange may list up to five consecutive Wednesday IWM Expirations at 
one time; the Exchange may have no more than a total of five Wednesday 
IWM Expirations and a total of five Wednesday IWM Expirations will be 
subject to the provisions of this Rule.
Monday and Wednesday Expirations
    The interval between strike prices for the proposed Monday and 
Wednesday IWM Expirations will be the same as those for the current 
Short Term Option Series for Wednesday and Friday expirations 
applicable to the Program.\5\ Specifically, the Monday and Wednesday 
IWM Expirations will have a $0.50 strike interval minimum.\6\ As is the 
case with other equity options series listed pursuant to the Program, 
the Monday and Wednesday IWM Expiration series will be P.M.-settled.
---------------------------------------------------------------------------

    \5\ See Supplementary Material .03(e) to Options 4, Section 5.
    \6\ See Supplementary Material .03 at Options 4, Section 5.
---------------------------------------------------------------------------

    Pursuant to Options 1, Section 1(a)(58), 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 Options 1, Section 
1(a)(58) 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 IWM, 
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. Monday SPY and QQQ 
expirations \7\ are treated in this manner today. Cboe Exchange, Inc. 
(``Cboe'') uses the same procedure for options on the S&P 500 index 
(``SPX''), Mini-SPX Index Options (``XSP''), Russell 2000 Index 
(``RUT'') and Mini-Russell 200 Index Options (``MRUT'') and with Monday 
expirations that are listed pursuant to its Nonstandard Expirations 
Pilot Program and that are scheduled to expire on a holiday.\8\ Also, 
Phlx \9\ and Nasdaq ISE, LLC (``ISE'') \10\ 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.
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    \7\ See Supplementary Material .03 at Options 4, Section 5.
    \8\ 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.''
    \9\ See Phlx Options 4A, Section 12(b)(5).
    \10\ See ISE Supplementary Material .07 to Options 4A, Section 
12.
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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.\11\ The thirty (30) series 
restriction does not include series that are open by other securities 
exchanges under their respective short term option rules; the Exchange 
may list these additional series that are listed by other 
exchanges.\12\ This thirty (30) series restriction would apply to 
Monday and Wednesday IWM 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 Securities and 
Exchange Commission (``Commission'') to list IWM options expiring on 
Mondays and Wednesdays.
---------------------------------------------------------------------------

    \11\ See Supplementary Material .03(a) to Options 4, Section 5.
    \12\ See Supplementary Material .03(a) to Options 4, Section 5.
---------------------------------------------------------------------------

    Finally, the Exchange is amending Supplementary Material .03(b) to 
Options 4, Section 5, 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 and QQQ 
Expirations) or, in the case of Quarterly Options Series, on an 
expiration that coincides with an expiration of Quarterly Option Series 
on the same class.\13\ As with Monday and Wednesday SPY and QQQ 
Expirations, the Exchange proposes to permit Monday and Wednesday IWM 
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 IWM Expirations because Monday and 
Wednesday IWM 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 IWM Expirations for one week every month because there was a 
monthly IWM expiration on the Friday of that week would create investor 
confusion.
---------------------------------------------------------------------------

    \13\ See Supplementary Material .03(a) to Options 4, Section 5.
---------------------------------------------------------------------------

    The Exchange does not believe that any market disruptions will be 
encountered with the introduction of P.M.-settled Monday and Wednesday 
IWM expirations. The Exchange has the necessary capacity and 
surveillance programs in place to support and properly monitor trading 
in the proposed Monday and Wednesday IWM Expirations. The Exchange 
currently trades P.M.-settled Short Term Option Series that expire 
Monday and Wednesday for SPY and QQQ and has not experienced any market 
disruptions nor issues with capacity. Today, the Exchange has 
surveillance programs in place to support and properly monitor trading 
in Short Term Option Series that expire Monday and Wednesday for SPY 
and QQQ.
    Similar to SPY and QQQ, the introduction of IWM Monday and 
Wednesday 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 IWM expirations will allow market participants to 
purchase IWM based on their timing as needed and allow them to tailor 
their investment and hedging needs more effectively.
    The Exchange proposes to amend the ``:'' to a ``.'' after the title 
``Short Term Options Series Program'' within Supplementary Material .03 
to Options 4, Section 5.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\14\ in general, and furthers the 
objectives of Section 6(b)(5)

[[Page 56317]]

of the Act,\15\ in particular, in that it is designed to promote just 
and equitable principles of trade, to remove impediments to and perfect 
the mechanism of a free and open market and a national market system, 
and, in general to protect investors and the public interest by 
providing the investing public and other market participants more 
flexibility to closely tailor their investment and hedging decisions in 
IWM options, thus allowing them to better manage their risk exposure.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78f(b).
    \15\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    In particular, the Exchange believes the Program has been 
successful to date and that Monday and Wednesday IWM 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 IWM Expirations should create greater trading and hedging 
opportunities, as well as flexibility that will provide customers with 
the ability to tailor their investment objectives more effectively.
    BX currently lists Monday and Wednesday SPY and QQQ 
Expirations.\16\ Also, Cboe \17\ currently permits Monday and Wednesday 
expirations for other options with a weekly expiration, such as options 
on the SPX, XSP, RUT and MRUT pursuant to its Nonstandard Expirations 
Pilot Program. Phlx \18\ and ISE \19\ currently permit Monday and 
Wednesday expirations for other options with a weekly expiration on NDX 
pursuant to its Nonstandard Expirations Pilot Programs, respectively.
---------------------------------------------------------------------------

    \16\ See Supplementary Material .03 at Options 4, Section 5.
    \17\ See note 8 above.
    \18\ See note 9 above.
    \19\ See note 10 above.
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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 IWM 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 and QQQ expirations are treated in this manner 
today.\20\ Cboe \21\ uses the same procedure for SPX, XSP, RUT and MRUT 
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 \22\ and ISE \23\ for NDX options with Monday 
expirations that are listed pursuant to their Nonstandard Expirations 
Pilot Programs, respectively.
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    \20\ See Supplementary Material .03 at Options 4, Section 5.
    \21\ See note 8 above.
    \22\ See note 9 above.
    \23\ See note 10 above.
---------------------------------------------------------------------------

    Given the similarities between Monday and Wednesday SPY and QQQ 
Expirations and the proposed Monday and Wednesday IWM Expirations, the 
Exchange believes that applying the provisions in Supplementary 
Material .03 to Options 4, Section 5, which currently apply to Monday 
and Wednesday SPY and QQQ Expirations, to Monday and Wednesday IWM 
Expirations is justified. For example, the Exchange believes that 
allowing Monday and Wednesday IWM Expirations and monthly IWM 
expirations in the same week will benefit investors and minimize 
investor confusion by providing Monday and Wednesday IWM Expirations in 
a continuous and uniform manner. The Exchange also believes that is 
appropriate to amend Supplementary Material .03(b) to Options 4, 
Section 5 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 and QQQ.
    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 IWM Expirations, in the 
same way that it monitors trading in the current Short Term Option 
Series and trading in Monday and Wednesday SPY and QQQ 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 IWM expirations.
    The Exchange's proposal to amend the ``:'' to a ``.'' after the 
title ``Short Term Options Series Program'' within Supplementary 
Material .03 to Options 4, Section 5 is a non-substantive technical 
amendment.

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 IWM expirations is not a novel proposal, as 
Monday and Wednesday SPY and QQQ Expirations are currently listed on 
BX.\24\ Cboe \25\ uses the same procedure for SPX, XSP, RUT and MRUT 
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 \26\ and ISE \27\ for NDX options with Monday 
expirations that are listed pursuant to their Nonstandard Expirations 
Pilot Programs, respectively.
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    \24\ See Supplementary Material .03 at Options 4, Section 5.
    \25\ See note 8 above.
    \26\ See note 9 above.
    \27\ See note 10 above.
---------------------------------------------------------------------------

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \28\ and Rule 19b-
4(f)(6) thereunder.\29\
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    \28\ 15 U.S.C. 78s(b)(3)(A).
    \29\ 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.
---------------------------------------------------------------------------

    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act normally does not become operative for 30 days after the date of 
its filing. However, Rule 19b-4(f)(6)(iii) \30\ permits the Commission 
to designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has 
requested that the Commission waive the 30-day operative delay so that 
the proposal may

[[Page 56318]]

become operative immediately upon filing. The Commission notes that it 
recently approved Phlx's substantially similar proposal to list and 
trade Monday IWM Expirations and Wednesday IWM Expirations.\31\ The 
Exchange has stated that waiver of the operative delay will permit the 
Exchange to immediately amend BX Options 4, Section 5 at Supplementary 
Material .03 to permit the Exchange to offer Monday and Wednesday 
expirations for options listed pursuant to the Program on IWM similar 
to Phlx. 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.\32\
---------------------------------------------------------------------------

    \30\ 17 CFR 240.19b-4(f)(6)(iii).
    \31\ See supra note 3.
    \32\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    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-BX-2021-043 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-2021-043. 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-2021-043 and should be submitted on 
or before October 29, 2021.
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    \33\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\33\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-21995 Filed 10-7-21; 8:45 am]
BILLING CODE 8011-01-P
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