Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Definition of Short Term Option Series, 75102-75105 [2022-26534]

Download as PDF 75102 Federal Register / Vol. 87, No. 234 / Wednesday, December 7, 2022 / Notices will operate. The Exchange’s proposal does not otherwise amend any functionality of the affected peg order types. In addition, because the Alternative CQI Calculation will activate without further action from the User, all Users will benefit equally regardless of their technological capabilities and ability to take action within a short prescribed period. To the extent the Alternative CQI Calculation is successful in incentivizing more firms to post nondisplayed peg orders on the Exchange, it will contribute to liquidity that all market participants can access and increase opportunities for investors to receive improved prices on their liquidity taking orders. Accordingly, the proposal promotes just and equitable principles of trade, removes impediments to and perfects the mechanism of a free and open market and a national market, and, in general, protects investors and the public interest. Finally, the Alternative CQI Calculation cannot be used to trigger the repricing of any displayed orders, specifically, the D-Limit Order type. As such, market participants seeking to execute against displayed liquidity on IEX, including protected quotes, will not be adversely affected by the addition of the Alternative CQI Calculation to the Exchange’s rules because use of the Alternative CQI Calculation is limited to the P-Peg, D-Peg, and C-Peg order types. For the reasons discussed above, the Commission finds that the proposal will not impair access to quotations and is narrowly tailored to not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Exchange Act, and is reasonably designed to remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, protect investors and the public interest. Accordingly, the Commission finds the proposed rule change to be consistent with the Act, including the requirements of Section 6(b)(5) and Section 6(b)(8) of the Act. ddrumheller on DSK6VXHR33PROD with NOTICES IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Exchange Act,35 that the proposed rule change (SR–IEX– 2022–06), be, and it hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.36 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2022–26533 Filed 12–6–22; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–96422; File No. SR–BX– 2022–024] Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Definition of Short Term Option Series December 1, 2022. 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 November 22, 2022, 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 amend certain rule text within General 2, Organization and Administration; Equity 2. Market Participants; Options 1, General Provisions; Options 4A, Options Index Rules; and Options 10, Doing Business with the Public. 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 36 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 35 15 U.S.C. 78s(b)(2). VerDate Sep<11>2014 19:54 Dec 06, 2022 Jkt 259001 PO 00000 Frm 00081 Fmt 4703 Sfmt 4703 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 the description of the term ‘‘Short Term Option Series’’ within Options 1, Section 1, Definitions, to conform the term to Nasdaq ISE, LLC’s (‘‘ISE’’) term of Short Term Option Series which was recently amended.3 The Exchange also proposes to amend certain rule text within Options 4A, Section 12, Terms of Index Options Contracts, related to the Short Term Option Series Program. Finally, the Exchange propose certain other non-substantive amendments. Each change is described below. Short Term Option Series Options 1, Section 1(a)(58) describes the term ‘‘Short Term Option Series’’ as follows: 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. ISE’s Options 4 rules were recently amended to expand the Short Term Option Series Program to permit the listing and trading of options series with Tuesday and Thursday expirations for options on SPY and QQQ listed pursuant to the Short Term Option Series Program.4 In conjunction with 3 See Securities Exchange Act Release No. 96281 (November 9, 2022), 87 FR 68769 (November 16, 2022) (SR–ISE–2022–18) (Order Granting Approval of a Proposed Rule Change to Amend the Short Term Option Series Program). BX’s Options 4 Rules are incorporated by reference to ISE’s Options 4 Rules and therefore the approval of ISE’s Options 4 rules permit the listing and trading of options series with Tuesday and Thursday expirations for options on SPY and QQQ on BX. 4 See note 3 above. BX’s Options 4 Rules are incorporated by reference to ISE’s Options 4 Rules. E:\FR\FM\07DEN1.SGM 07DEN1 Federal Register / Vol. 87, No. 234 / Wednesday, December 7, 2022 / Notices that change, ISE amended its definition of Short Term Option Series, within Options 1, Section 1(a)(49), to accommodate the listing of options series that expire on Tuesdays and Thursdays.5 Specifically, the Exchange added Tuesday and Thursday to the permitted expiration days, which currently include Monday, Wednesday, and Friday, that it may open a series for trading. At this time, the Exchange proposes to amend the term ‘‘Short Term Option Series’’ at Options 1, Section 1(a)(58) to provide, 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, Tuesday, Wednesday, Thursday, 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. ddrumheller on DSK6VXHR33PROD with NOTICES Today, ISE’s listing rules, which BX incorporates by reference, permit the listing and trading of options series with Tuesday and Thursday expirations for options on SPY and QQQ listed pursuant to the Short Term Option Series Program. Options 4A, Section 12 In 2014, BX amended the Short Term Option Series Program for equity options within Chapter IV, Section 6 (currently Supplementary Material .03 to Options 4, Section 5) to change the number of currently listed option classes on which Short Term Option Series may be opened on any Short Term Option Opening Date from thirty to fifty options classes.6 Further, BX also amended the number of Short Term Option Series that the Exchange may open for each expiration date in that class from twenty to thirty.7 At that time, the Exchange neglected to update the index options rules to make similar changes to the Short Term Option Series 5 See note 3 above. Securities Exchange Act Release No. 72700 (July 29, 2014), 79 FR 45515 (August 5, 2014) (SR– BX–2014–038) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Short Term Options Series). 7 Id. 6 See VerDate Sep<11>2014 19:54 Dec 06, 2022 Jkt 259001 Program given that the amount of options classes that may participate in the Short Term Option Series Program is aggregated between equity options and index options instead of between equity and index options. Today, Options 4A, Section 12(h)(1)(i) provides, The Exchange may select up to thirty (30) currently listed option classes on which Short Term Option Series may be opened on any Short Term Option Opening Date. In addition to the 30 option class restriction, the Exchange may also list Short Term Option Series on any option classes that are selected by other securities exchanges that employ a similar program under their respective rules. For each index option class eligible for participation in the Short Term Option Series Program, the Exchange may open up to 20 Short Term Option Series on index options for each expiration date in that class. The Exchange may also open Short Term Option Series that are opened by other securities exchanges in option classes selected by such exchanges under their respective short term option rules. At this time, the Exchange proposes to amend Options 4A, Section 12(h)(1)(i) to increase the number of currently listed options classes on which Short Term Option Series may be opened on any Short Term Option Opening Date from thirty to fifty options classes for index options. Additionally, the Exchange proposes to amend the number of Short Term Option Series the Exchange may open on index options for each expiration date in that class from twenty to thirty. These amendments would align the limitations within Options 4A, Section 12(h)(1)(i) with those currently within Supplementary .03 to Options 4, Section 5. The Exchange also proposes to add certain titles before Options 4A, Section 12(h)(1)(i)–(v) to indicate the subject matter of the paragraphs. Those amendments are non-substantive amendments intended to bring clarity to the rule text. As noted above, this amendment will not result in a greater number of listings in the Short Term Option Series Program because the amount of options classes that may participate in the Short Term Option Series Program is aggregated between equity options and index options instead of apportioned between equity and index options. Amending Options 4A, Section 12(h)(1)(i) to conform to the limitations provided within Supplementary .03 to Options 4, Section 5 will avoid confusion by making clear the aggregate limitations within equity and index options for listing Short Term Option Series. Today, ISE, Nasdaq Phlx LLC (‘‘Phlx’’) and Cboe Exchange, Inc. (‘‘Cboe’’) have similar limitations within PO 00000 Frm 00082 Fmt 4703 Sfmt 4703 75103 their equity and index Short Term Option Series Program.8 Other Non-Substantive Amendments The Exchange proposes to remove and reserve Equity 2, Section 3, ‘‘Nasdaq BX Market Participant Registration.’’ The Nasdaq Stock Market LLC (‘‘Nasdaq’’) recently filed to relocate a similar Nasdaq Rule into General 3, Rule 1032.9 BX’s General 3 is incorporated by reference to Nasdaq’s General 3, therefore the rule within Equity 2, Section 3 is not necessary as an identical rule exists within BX General 3, Rule 1000 Series. The Exchange proposes to make other amendments to reserve certain sections of the Rulebook. These sections contain content in other Nasdaq affiliated rulebooks. To harmonize the section numbers across the Nasdaq affiliated markets, the Exchange proposes to reserve General 2, Sections 23 and 24 as well as Options 10, Sections 26 and 27.10 These amendments are nonsubstantive. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,11 in general, and furthers the objectives of Section 6(b)(5) of the Act,12 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. Short Term Option Series The Exchange’s proposal to amend the term ‘‘Short Term Option Series’’ at Options 1, Section 1(a)(58) to reflect the recent change 13 to ISE’s listing rules, which BX incorporates by reference, to permit the listing and trading of options series with Tuesday and Thursday expirations for options on SPY and QQQ listed pursuant to the Short Term 8 See ISE and Phlx Options 4A, Section 12(b)(4) and Cboe Exchange, Inc. Rules 4.5 and 4.13. See also Securities Exchange Act Release No. 95077 (June 9, 2022), 87 FR 36188 (June 15, 2022) (SR– Phlx-2022–25) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Options 4A, Section 12, Terms of Index Options Contracts). 9 See Securities Exchange Act Release No. 96132 (October 24, 2022), 87 FR 65272 (October 28, 2022) (SR–NASDAQ–2022–058) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Relocate Equity 2, Section 3). 10 Phlx has rules within General 2, Sections 23 and 24. ISE, Nasdaq GEMX, LLC (‘‘GEMX’’) and Nasdaq MRX, LLC (‘‘MRX’’) have rules within Options 10, Section 26 and 27. 11 15 U.S.C. 78f(b) 12 15 U.S.C. 78f(b)(5). 13 See note 3 above. E:\FR\FM\07DEN1.SGM 07DEN1 75104 Federal Register / Vol. 87, No. 234 / Wednesday, December 7, 2022 / Notices Option Series Program is consistent with the Exchange Act. This proposal will align the description of Short Term Option Series within Options 1, Section 1(a)(58) to the expirations permitted within the Short Term Option Series Program within Supplementary .03 to Options 4, Section 5. ddrumheller on DSK6VXHR33PROD with NOTICES Options 4A, Section 12 In 2014, BX amended the Short Term Option Series Program for equity options within Chapter IV, Section 6 (currently Options 4, Section 5) to change the number of currently listed option classes on which Short Term Option Series may be opened on any Short Term Option Opening Date from thirty to fifty options classes.14 Further, BX also amended the number of Short Term Option Series that the Exchange may open for each expiration date in that class from twenty to thirty.15 At that time, the Exchange neglected to update the index options rules to make similar changes to the Short Term Option Series Program given that the amount of options classes that may participate in the Short Term Option Series Program is aggregated between equity options and index options instead of between equity and index options. Amending Options 4A, Section 12(h)(1)(i) to conform to the limitations provided within Supplementary .03 to Options 4, Section 5 will avoid confusion by making clear the aggregate limitations within equity and index options for listing Short Term Option Series. Also, aligning the limitations within Options 4A, Section 12(h)(1)(i) with those currently within Supplementary .03 to Options 4, Section 5 will not result in a greater number of listings in the Short Term Option Series Program because the amount of options classes that may participate in the Short Term Option Series Program is aggregated between equity options and index options instead of between equity and index options. Today, ISE, Phlx and Cboe have similar limitations within their equity and index Short Term Option Series Program.16 Other Non-Substantive Amendments The Exchange’s proposal to remove and reserve Equity 2, Section 3, ‘‘Nasdaq BX Market Participant Registration’’ represents a nonsubstantive amendment. Nasdaq recently filed to relocate a similar Nasdaq Rule into General 3, Rule 1032.17 BX’s General 3 is incorporated note 6 above. note 6 above. 16 See note 8 above. 17 See note 9 above. by reference to Nasdaq’s General 3, therefore the rule within Equity 2, Section 3 is not necessary as an identical rule exists within BX General 3, Rule 1000 Series. The Exchange’s proposal to make other amendments to reserve certain sections of the Rulebook, namely General 2, Sections 23 and 24 as well as Options 10, Sections 26 and 27, to harmonize section numbers across the Nasdaq affiliated markets are nonsubstantive.18 B. Self-Regulatory Organization’s Statement on Burden on Competition The proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Short Term Option Series The Exchange’s proposal to amend the term ‘‘Short Term Option Series’’ at Options 1, Section 1(a)(58) to reflect the recent change 19 to ISE’s listing rules, which BX incorporates by reference, to permit the listing and trading of options series with Tuesday and Thursday expirations for options on SPY and QQQ listed pursuant to the Short Term Option Series Program does not impose an undue burden on competition, rather this proposal will align the description of Short Term Option Series within Options 1, Section 1(a)(58) to the expirations permitted within the Short Term Option Series Program within Supplementary .03 to Options 4, Section 5. Options 4A, Section 12 Amending Options 4A, Section 12(h)(1)(i) to conform to the limitations provided within Supplementary .03 to Options 4, Section 5 will avoid confusion by making clear the aggregate limitations within equity and index options for listing Short Term Option Series. Also, aligning the limitations within Options 4A, Section 12(h)(1)(i) with those currently within Supplementary .03 to Options 4, Section 5 will not result in a greater number of listings in the Short Term Option Series Program because the amount of options classes that may participate in the Short Term Option Series Program is aggregated between equity options and index options instead of between equity and index options. Today, ISE, Phlx and Cboe has similar limitations within its equity and index Short Term Option Series Program.20 14 See 15 See VerDate Sep<11>2014 19:54 Dec 06, 2022 18 See note 10 above. note 3 above. 20 See note 8 above. 19 See Jkt 259001 PO 00000 Frm 00083 Fmt 4703 Sfmt 4703 Other Non-Substantive Amendments The Exchange’s proposal to remove and reserve Equity 2, Section 3, ‘‘Nasdaq BX Market Participant Registration’’ represents a nonsubstantive amendment. Nasdaq recently filed to relocate a similar Nasdaq Rule into General 3, Rule 1032.21 BX’s General 3 is incorporated by reference to Nasdaq’s General 3, therefore the rule within Equity 2, Section 3 is not necessary as an identical rule exists within BX General 3, Rule 1000 Series. The Exchange’s proposal to make other amendments to reserve certain sections of the Rulebook, namely General 2, Sections 23 and 24 as well as Options 10, Sections 26 and 27, to harmonize section numbers across the Nasdaq affiliated markets are nonsubstantive.22 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 23 and subparagraph (f)(6) of Rule 19b–4 24 thereunder. A proposed rule change filed under Rule 19b–4(f)(6) 25 normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b–4(f)(6)(iii),26 the Commission may designate a shorter time of such action is consistent with the protection of investor and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposed 21 See note 9 above. note 10 above. 23 15 U.S.C. 78s(b)(3)(A)(iii). 24 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. 25 17 CFR 240.19b–4(f)(6). 26 17 CFR 240.19b–4(f)(6)(iii). 22 See E:\FR\FM\07DEN1.SGM 07DEN1 Federal Register / Vol. 87, No. 234 / Wednesday, December 7, 2022 / Notices rule change may become operative upon filing. The Exchange states that this proposed rule change could immediately benefit market participants by avoiding confusion, as the BX Options 4 rules are incorporated to ISE’s Options 4 rules. The Exchange also states that these rules permit the listing and trading of options series with Tuesday and Thursday expirations for options on SPY and QQQ listed pursuant to the Short Term Option Series Program. For these reasons, and because the proposed rule change does not raise any novel regulatory issues, the Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest. Therefore, the Commission hereby waives the operative delay and designates the proposal operative upon filing.27 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. 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–2022–024 and should be submitted on or before December 28, 2022. IV. Solicitation of Comments For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.28 Sherry R. Haywood, Assistant Secretary. 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–2022–024 on the subject line. ddrumheller on DSK6VXHR33PROD with NOTICES 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–2022–024. 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 27 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). VerDate Sep<11>2014 19:54 Dec 06, 2022 Jkt 259001 [FR Doc. 2022–26534 Filed 12–6–22; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–96426; File No. SR–NSCC– 2022–005] Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing of Partial Amendment No. 2 and Amendment No. 3 and of Designation of Longer Period for Commission Action on Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change To Revise the Excess Capital Premium Charge Order December 1, 2022. On May 20, 2022, National Securities Clearing Corporation (‘‘NSCC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) proposed rule change SR–NSCC–2022–005 28 17 PO 00000 pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder.2 The proposed rule change was published for comment in the Federal Register on June 8, 2022,3 and the Commission has received comments regarding the changes proposed in the proposed rule change.4 On July 11, 2022, pursuant to Section 19(b)(2) of the Act,5 the Commission designated a longer period within which to approve, disapprove, or institute proceedings to determine whether to approve or disapprove the Proposed Rule Change.6 On September 1, 2022, the Commission instituted proceedings, pursuant to Section 19(b)(2)(B) of the Act,7 to determine whether to approve or disapprove the Proposed Rule Change.8 On July 6, 2022, NSCC filed a partial amendment (‘‘Amendment No. 2’’) to modify the proposed rule change.9 On November 28, 2022, NSCC filed another amendment (‘‘Amendment No. 3’’) to modify the proposed rule change as described in Items I, II and III below, which Items have been prepared primarily by the clearing agency.10 1 15 U.S.C. 78s(b)(1). CFR 240.19b-4. 3 Securities Exchange Act Release No. 95026 (June 2, 2022), 87 FR 34913 (June 8, 2022) (File No. SR–NSCC–2022–005). The Notice referred to an incorrect filing date of May 30, 2022; however, the proposal was filed on May 20, 2022, as indicated here. Moreover, the Notice reflected the filing of Amendment No. 1, which made a correction to Exhibit 5 of the filing, specifically, to insert an additional cross-reference into a proposed definition that had been omitted. 4 Comments are available at https://www.sec.gov/ comments/sr-nscc-2022-005/srnscc2022005.htm. 5 15 U.S.C. 78s(b)(2). 6 Securities Exchange Act Release No. 95245 (July 11, 2022), 87 FR 42523 (July 15, 2022) (SR–NSCC– 2022–005). 7 15 U.S.C. 78s(b)(2)(B). 8 Securities Exchange Act Release No. 95656 (Sept. 1, 2022), 87 FR 55058 (Sept. 8, 2022) (File No. SR–NSCC–2022–005). 9 Amendment No. 2 partially amended the proposed rule change to update the description of the impact of the proposal. The contents of that Amendment are reflected in Section II(A)(1)(vii) below. In Amendment No. 2, NSCC also provided a revised version of the confidential impact study that it included as Exhibit 3a to the proposed rule change. 10 Amendment No. 3 amends and replaces the proposed rule change in its entirety. Specifically, it would clarify the particular circumstances in which NSCC would retain the ability to waive the ECP charge, rather than remove NSCC’s discretion to waive or reduce the charge as was initially proposed in the proposed rule change. As described in greater detail below in Section II.(iv), this Amendment describes why NSCC believes it is appropriate for NSCC to retain discretion to waive an ECP charge in certain defined circumstances, defines the circumstances in which NSCC may waive the ECP charge, and discloses both the information that NSCC would review in deciding whether to waive the ECP charge as well as the 2 17 CFR 200.30–3(a)(12). Frm 00084 Fmt 4703 Sfmt 4703 75105 Continued E:\FR\FM\07DEN1.SGM 07DEN1

Agencies

[Federal Register Volume 87, Number 234 (Wednesday, December 7, 2022)]
[Notices]
[Pages 75102-75105]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-26534]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96422; File No. SR-BX-2022-024]


Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend the 
Definition of Short Term Option Series

December 1, 2022.
    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 November 22, 2022, 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 amend certain rule text within General 2, 
Organization and Administration; Equity 2. Market Participants; Options 
1, General Provisions; Options 4A, Options Index Rules; and Options 10, 
Doing Business with the Public.
    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 the description of the term ``Short 
Term Option Series'' within Options 1, Section 1, Definitions, to 
conform the term to Nasdaq ISE, LLC's (``ISE'') term of Short Term 
Option Series which was recently amended.\3\ The Exchange also proposes 
to amend certain rule text within Options 4A, Section 12, Terms of 
Index Options Contracts, related to the Short Term Option Series 
Program. Finally, the Exchange propose certain other non-substantive 
amendments. Each change is described below.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 96281 (November 9, 
2022), 87 FR 68769 (November 16, 2022) (SR-ISE-2022-18) (Order 
Granting Approval of a Proposed Rule Change to Amend the Short Term 
Option Series Program). BX's Options 4 Rules are incorporated by 
reference to ISE's Options 4 Rules and therefore the approval of 
ISE's Options 4 rules permit the listing and trading of options 
series with Tuesday and Thursday expirations for options on SPY and 
QQQ on BX.
---------------------------------------------------------------------------

Short Term Option Series
    Options 1, Section 1(a)(58) describes the term ``Short Term Option 
Series'' as follows:

    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.

    ISE's Options 4 rules were recently amended to expand the Short 
Term Option Series Program to permit the listing and trading of options 
series with Tuesday and Thursday expirations for options on SPY and QQQ 
listed pursuant to the Short Term Option Series Program.\4\ In 
conjunction with

[[Page 75103]]

that change, ISE amended its definition of Short Term Option Series, 
within Options 1, Section 1(a)(49), to accommodate the listing of 
options series that expire on Tuesdays and Thursdays.\5\ Specifically, 
the Exchange added Tuesday and Thursday to the permitted expiration 
days, which currently include Monday, Wednesday, and Friday, that it 
may open a series for trading.
---------------------------------------------------------------------------

    \4\ See note 3 above. BX's Options 4 Rules are incorporated by 
reference to ISE's Options 4 Rules.
    \5\ See note 3 above.
---------------------------------------------------------------------------

    At this time, the Exchange proposes to amend the term ``Short Term 
Option Series'' at Options 1, Section 1(a)(58) to provide,

    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, Tuesday, Wednesday, Thursday, 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.

    Today, ISE's listing rules, which BX incorporates by reference, 
permit the listing and trading of options series with Tuesday and 
Thursday expirations for options on SPY and QQQ listed pursuant to the 
Short Term Option Series Program.
Options 4A, Section 12
    In 2014, BX amended the Short Term Option Series Program for equity 
options within Chapter IV, Section 6 (currently Supplementary Material 
.03 to Options 4, Section 5) to change the number of currently listed 
option classes on which Short Term Option Series may be opened on any 
Short Term Option Opening Date from thirty to fifty options classes.\6\ 
Further, BX also amended the number of Short Term Option Series that 
the Exchange may open for each expiration date in that class from 
twenty to thirty.\7\ At that time, the Exchange neglected to update the 
index options rules to make similar changes to the Short Term Option 
Series Program given that the amount of options classes that may 
participate in the Short Term Option Series Program is aggregated 
between equity options and index options instead of between equity and 
index options.
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 72700 (July 29, 
2014), 79 FR 45515 (August 5, 2014) (SR-BX-2014-038) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Relating 
to Short Term Options Series).
    \7\ Id.
---------------------------------------------------------------------------

    Today, Options 4A, Section 12(h)(1)(i) provides,

    The Exchange may select up to thirty (30) currently listed 
option classes on which Short Term Option Series may be opened on 
any Short Term Option Opening Date. In addition to the 30 option 
class restriction, the Exchange may also list Short Term Option 
Series on any option classes that are selected by other securities 
exchanges that employ a similar program under their respective 
rules. For each index option class eligible for participation in the 
Short Term Option Series Program, the Exchange may open up to 20 
Short Term Option Series on index options for each expiration date 
in that class. The Exchange may also open Short Term Option Series 
that are opened by other securities exchanges in option classes 
selected by such exchanges under their respective short term option 
rules.

    At this time, the Exchange proposes to amend Options 4A, Section 
12(h)(1)(i) to increase the number of currently listed options classes 
on which Short Term Option Series may be opened on any Short Term 
Option Opening Date from thirty to fifty options classes for index 
options. Additionally, the Exchange proposes to amend the number of 
Short Term Option Series the Exchange may open on index options for 
each expiration date in that class from twenty to thirty. These 
amendments would align the limitations within Options 4A, Section 
12(h)(1)(i) with those currently within Supplementary .03 to Options 4, 
Section 5. The Exchange also proposes to add certain titles before 
Options 4A, Section 12(h)(1)(i)-(v) to indicate the subject matter of 
the paragraphs. Those amendments are non-substantive amendments 
intended to bring clarity to the rule text.
    As noted above, this amendment will not result in a greater number 
of listings in the Short Term Option Series Program because the amount 
of options classes that may participate in the Short Term Option Series 
Program is aggregated between equity options and index options instead 
of apportioned between equity and index options. Amending Options 4A, 
Section 12(h)(1)(i) to conform to the limitations provided within 
Supplementary .03 to Options 4, Section 5 will avoid confusion by 
making clear the aggregate limitations within equity and index options 
for listing Short Term Option Series. Today, ISE, Nasdaq Phlx LLC 
(``Phlx'') and Cboe Exchange, Inc. (``Cboe'') have similar limitations 
within their equity and index Short Term Option Series Program.\8\
---------------------------------------------------------------------------

    \8\ See ISE and Phlx Options 4A, Section 12(b)(4) and Cboe 
Exchange, Inc. Rules 4.5 and 4.13. See also Securities Exchange Act 
Release No. 95077 (June 9, 2022), 87 FR 36188 (June 15, 2022) (SR-
Phlx-2022-25) (Notice of Filing and Immediate Effectiveness of 
Proposed Rule Change To Amend Options 4A, Section 12, Terms of Index 
Options Contracts).
---------------------------------------------------------------------------

Other Non-Substantive Amendments
    The Exchange proposes to remove and reserve Equity 2, Section 3, 
``Nasdaq BX Market Participant Registration.'' The Nasdaq Stock Market 
LLC (``Nasdaq'') recently filed to relocate a similar Nasdaq Rule into 
General 3, Rule 1032.\9\ BX's General 3 is incorporated by reference to 
Nasdaq's General 3, therefore the rule within Equity 2, Section 3 is 
not necessary as an identical rule exists within BX General 3, Rule 
1000 Series.
---------------------------------------------------------------------------

    \9\ See Securities Exchange Act Release No. 96132 (October 24, 
2022), 87 FR 65272 (October 28, 2022) (SR-NASDAQ-2022-058) (Notice 
of Filing and Immediate Effectiveness of Proposed Rule Change To 
Relocate Equity 2, Section 3).
---------------------------------------------------------------------------

    The Exchange proposes to make other amendments to reserve certain 
sections of the Rulebook. These sections contain content in other 
Nasdaq affiliated rulebooks. To harmonize the section numbers across 
the Nasdaq affiliated markets, the Exchange proposes to reserve General 
2, Sections 23 and 24 as well as Options 10, Sections 26 and 27.\10\ 
These amendments are non-substantive.
---------------------------------------------------------------------------

    \10\ Phlx has rules within General 2, Sections 23 and 24. ISE, 
Nasdaq GEMX, LLC (``GEMX'') and Nasdaq MRX, LLC (``MRX'') have rules 
within Options 10, Section 26 and 27.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\11\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\12\ 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.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78f(b)
    \12\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

Short Term Option Series
    The Exchange's proposal to amend the term ``Short Term Option 
Series'' at Options 1, Section 1(a)(58) to reflect the recent change 
\13\ to ISE's listing rules, which BX incorporates by reference, to 
permit the listing and trading of options series with Tuesday and 
Thursday expirations for options on SPY and QQQ listed pursuant to the 
Short Term

[[Page 75104]]

Option Series Program is consistent with the Exchange Act. This 
proposal will align the description of Short Term Option Series within 
Options 1, Section 1(a)(58) to the expirations permitted within the 
Short Term Option Series Program within Supplementary .03 to Options 4, 
Section 5.
---------------------------------------------------------------------------

    \13\ See note 3 above.
---------------------------------------------------------------------------

Options 4A, Section 12
    In 2014, BX amended the Short Term Option Series Program for equity 
options within Chapter IV, Section 6 (currently Options 4, Section 5) 
to change the number of currently listed option classes on which Short 
Term Option Series may be opened on any Short Term Option Opening Date 
from thirty to fifty options classes.\14\ Further, BX also amended the 
number of Short Term Option Series that the Exchange may open for each 
expiration date in that class from twenty to thirty.\15\ At that time, 
the Exchange neglected to update the index options rules to make 
similar changes to the Short Term Option Series Program given that the 
amount of options classes that may participate in the Short Term Option 
Series Program is aggregated between equity options and index options 
instead of between equity and index options. Amending Options 4A, 
Section 12(h)(1)(i) to conform to the limitations provided within 
Supplementary .03 to Options 4, Section 5 will avoid confusion by 
making clear the aggregate limitations within equity and index options 
for listing Short Term Option Series. Also, aligning the limitations 
within Options 4A, Section 12(h)(1)(i) with those currently within 
Supplementary .03 to Options 4, Section 5 will not result in a greater 
number of listings in the Short Term Option Series Program because the 
amount of options classes that may participate in the Short Term Option 
Series Program is aggregated between equity options and index options 
instead of between equity and index options. Today, ISE, Phlx and Cboe 
have similar limitations within their equity and index Short Term 
Option Series Program.\16\
---------------------------------------------------------------------------

    \14\ See note 6 above.
    \15\ See note 6 above.
    \16\ See note 8 above.
---------------------------------------------------------------------------

Other Non-Substantive Amendments
    The Exchange's proposal to remove and reserve Equity 2, Section 3, 
``Nasdaq BX Market Participant Registration'' represents a non-
substantive amendment. Nasdaq recently filed to relocate a similar 
Nasdaq Rule into General 3, Rule 1032.\17\ BX's General 3 is 
incorporated by reference to Nasdaq's General 3, therefore the rule 
within Equity 2, Section 3 is not necessary as an identical rule exists 
within BX General 3, Rule 1000 Series.
---------------------------------------------------------------------------

    \17\ See note 9 above.
---------------------------------------------------------------------------

    The Exchange's proposal to make other amendments to reserve certain 
sections of the Rulebook, namely General 2, Sections 23 and 24 as well 
as Options 10, Sections 26 and 27, to harmonize section numbers across 
the Nasdaq affiliated markets are non-substantive.\18\
---------------------------------------------------------------------------

    \18\ See note 10 above.
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The proposed rule change does not impose any burden on competition 
that is not necessary or appropriate in furtherance of the purposes of 
the Act.
Short Term Option Series
    The Exchange's proposal to amend the term ``Short Term Option 
Series'' at Options 1, Section 1(a)(58) to reflect the recent change 
\19\ to ISE's listing rules, which BX incorporates by reference, to 
permit the listing and trading of options series with Tuesday and 
Thursday expirations for options on SPY and QQQ listed pursuant to the 
Short Term Option Series Program does not impose an undue burden on 
competition, rather this proposal will align the description of Short 
Term Option Series within Options 1, Section 1(a)(58) to the 
expirations permitted within the Short Term Option Series Program 
within Supplementary .03 to Options 4, Section 5.
---------------------------------------------------------------------------

    \19\ See note 3 above.
---------------------------------------------------------------------------

Options 4A, Section 12
    Amending Options 4A, Section 12(h)(1)(i) to conform to the 
limitations provided within Supplementary .03 to Options 4, Section 5 
will avoid confusion by making clear the aggregate limitations within 
equity and index options for listing Short Term Option Series. Also, 
aligning the limitations within Options 4A, Section 12(h)(1)(i) with 
those currently within Supplementary .03 to Options 4, Section 5 will 
not result in a greater number of listings in the Short Term Option 
Series Program because the amount of options classes that may 
participate in the Short Term Option Series Program is aggregated 
between equity options and index options instead of between equity and 
index options. Today, ISE, Phlx and Cboe has similar limitations within 
its equity and index Short Term Option Series Program.\20\
---------------------------------------------------------------------------

    \20\ See note 8 above.
---------------------------------------------------------------------------

Other Non-Substantive Amendments
    The Exchange's proposal to remove and reserve Equity 2, Section 3, 
``Nasdaq BX Market Participant Registration'' represents a non-
substantive amendment. Nasdaq recently filed to relocate a similar 
Nasdaq Rule into General 3, Rule 1032.\21\ BX's General 3 is 
incorporated by reference to Nasdaq's General 3, therefore the rule 
within Equity 2, Section 3 is not necessary as an identical rule exists 
within BX General 3, Rule 1000 Series.
---------------------------------------------------------------------------

    \21\ See note 9 above.
---------------------------------------------------------------------------

    The Exchange's proposal to make other amendments to reserve certain 
sections of the Rulebook, namely General 2, Sections 23 and 24 as well 
as Options 10, Sections 26 and 27, to harmonize section numbers across 
the Nasdaq affiliated markets are non-substantive.\22\
---------------------------------------------------------------------------

    \22\ 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)(iii) of the Act \23\ and 
subparagraph (f)(6) of Rule 19b-4 \24\ thereunder.
---------------------------------------------------------------------------

    \23\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \24\ 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 under Rule 19b-4(f)(6) \25\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\26\ the Commission 
may designate a shorter time of such action is consistent with the 
protection of investor and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposed

[[Page 75105]]

rule change may become operative upon filing. The Exchange states that 
this proposed rule change could immediately benefit market participants 
by avoiding confusion, as the BX Options 4 rules are incorporated to 
ISE's Options 4 rules. The Exchange also states that these rules permit 
the listing and trading of options series with Tuesday and Thursday 
expirations for options on SPY and QQQ listed pursuant to the Short 
Term Option Series Program. For these reasons, and because the proposed 
rule change does not raise any novel regulatory issues, the Commission 
believes that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest. Therefore, the 
Commission hereby waives the operative delay and designates the 
proposal operative upon filing.\27\
---------------------------------------------------------------------------

    \25\ 17 CFR 240.19b-4(f)(6).
    \26\ 17 CFR 240.19b-4(f)(6)(iii).
    \27\ For purposes only of waiving the 30-day operative delay, 
the Commission has 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 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-2022-024 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-2022-024. 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-2022-024 and should be submitted on 
or before December 28, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\28\
---------------------------------------------------------------------------

    \28\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-26534 Filed 12-6-22; 8:45 am]
BILLING CODE 8011-01-P
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