Self-Regulatory Organizations; Nasdaq ISE, LLC; Order Approving a Proposed Rule Change To Permit the Listing and Trading of P.M.-Settled Nasdasq-100 Index® Options With a Third-Friday-of-the-Month Expiration, 80792-80793 [2023-25547]
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80792
Federal Register / Vol. 88, No. 222 / Monday, November 20, 2023 / Notices
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
a.m. and 3 p.m. Copies of such filing
also will be available for inspection and
copying at the principal office of NSCC
and on the Depository Trust Company’s
website (https://dtcc.com/legal/sec-rulefilings.aspx).
Do not include personal identifiable
information in submissions; you should
submit only information that you wish
to make available publicly. We may
redact in part or withhold entirely from
publication submitted material that is
obscene or subject to copyright
protection.
All submissions should refer to File
Number SR–NSCC–2023–007 and
should be submitted on or before
December 11, 2023. Rebuttal comments
should be submitted by December 26,
2023.
For the Commission, by the Division
of Trading and Markets, pursuant to
delegated authority.29
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–25544 Filed 11–17–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–98935; File No. SR–ISE–
2023–20]
Self-Regulatory Organizations; Nasdaq
ISE, LLC; Order Approving a Proposed
Rule Change To Permit the Listing and
Trading of P.M.-Settled Nasdasq–100
Index® Options With a Third-Friday-ofthe-Month Expiration
ddrumheller on DSK120RN23PROD with NOTICES1
November 14, 2023.
I. Introduction
On September 28, 2023, Nasdaq ISE,
LLC (‘‘ISE’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’),1 and
Rule 19b–4 thereunder,2 a proposed rule
change to permit the listing and trading
of p.m.-settled Nasdaq–100 Index
options with a third-Friday-of-themonth (‘‘Third Friday’’) expiration. The
proposed rule change was published for
comment in the Federal Register on
29 17
CFR 200.30–3(a)(31).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
VerDate Sep<11>2014
17:42 Nov 17, 2023
Jkt 262001
October 4, 2023.3 The Commission did
not receive any comment letters and is
approving the proposed rule change.
II. Description of the Proposal
ISE proposes to amend its rules to
permit the listing and trading of p.m.settled Nasdaq–100 Index (‘‘NDXP’’)
options with a Third Friday expiration.
The Exchange currently can list a.m.settled Third Friday expirations on
Nasdaq–100 Index (‘‘NDX’’) options.4
With this proposal, the Exchange would
have Third Friday expirations on NDX
options that are both a.m.-settled and
p.m.-settled on the same day.5 The
Exchange states that the conditions for
listing options on NDXP with Third
Friday expirations will be similar to the
a.m.-settled NDX Third Friday
expirations.6 The Exchange proposes to
amend Options 4A, Section 12(a)(6) to
provide that in addition to a.m.-settled
Nasdaq–100 Index options approved for
trading on the Exchange, the Exchange
may also list options on the Nasdaq–100
Index whose exercise settlement value
is the closing value of the Nasdaq–100
Index on the expiration day.
The proposed contract would use a
$100 multiplier, and the minimum
trading increment would be $0.05 for
options trading below $3.00 and $0.10
for all other series.7 Strike price
intervals would be set at no less than
$2.50.8 Consistent with existing rules
for index options, the Exchange would
allow up to nine near-term expiration
months 9 as well as LEAPS.10 The
product would have European-style
exercise. Because the product is based
on NDX, there would be no position
limits.11
NDXP options are series of the NDX
options class.12 Currently, these NDXP
options may expire any day of the week:
Mondays, Tuesdays, Wednesdays,
Thursdays, Fridays, as applicable (other
than third-Friday-of-the-month), and the
last trading day of the month.13 Third
Friday p.m.-settled options trading
under the NDXP symbol will be a new
3 See Securities Exchange Act Release No. 98643
(September 29, 2023), 88 FR 68843 (‘‘Notice’’).
4 See Notice, supra note 3 at 68842.
5 See id.
6 See id.
7 See Options 3, Section 3, Minimum Increments.
8 See Options 4A, Section 12(c)(1).
9 The Exchange proposes the same expiration
month options for NDXP as are permitted for the
Nasdaq–100 Index, since both options classes are
derived from the Nasdaq–100 Index.
10 See Options 4A, Section 12(b)(1).
11 For a more detailed description of the proposed
Third Friday NDXP contract, see Notice, supra note
3.
12 See Notice, supra note 3 at 68842.
13 See Supplementary Material .07(a) to Options
4, Section 5.
PO 00000
Frm 00106
Fmt 4703
Sfmt 4703
type of series under the Nasdaq–100
Index options class and not a new
options class—therefore all ThirdFriday NDXP options will be aggregated
together with all other standard
expirations for applicable reporting and
other requirements.14
As with NDX, whenever the Exchange
determines that additional margin is
warranted in light of the risks associated
with an under-hedged NDXP option
position, including Third Friday NDXP,
the Exchange may consider imposing
additional margin upon the account
maintaining such under-hedged
position pursuant to its authority
pursuant to Exchange Rules Options 6E,
Section 2.15 The trading hours for
NDXP, including Third Friday NDXP,
will be from 9:30 a.m. to 4:15 p.m.
Eastern Time.16
III. Discussion and Commission
Findings
After careful review, the Commission
finds that the proposed rule change is
consistent with the Act and the rules
and regulations thereunder applicable to
a national securities exchange.17 In
particular, the Commission finds that
the proposed rule change is consistent
with Section 6(b)(5) of the Act,18 which
requires, among other things, that the
Exchange’s rules be designed to prevent
fraudulent and manipulative acts and
practices, 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.
In support of its proposal, the
Exchange notes that the Commission
recently approved trading of Third
Friday expirations for options based on
1⁄5 the value of the Nasdaq–100 Index
(‘‘NQX’’).19 The Exchange states that the
introduction of Third Friday NDXP will
attract order flow to the Exchange,
increase the variety of listed options to
investors, and provide a valuable hedge
tool to investors.20 The Exchange
14 See
Options 3, Section 6(c) and (d).
Notice, supra note 3 at 68843.
16 The Exchange notes that trading in NDXP will
ordinarily cease at 4:00 p.m. on the day on which
the exercise-settlement value is calculated. See
Notice, supra note 3 at 68843, n. 16.
17 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
18 15 U.S.C. 78f(b)(5).
19 See Securities Exchange Act Release No. 98450
(September 20, 2023), 88 FR 66 111 (September 26,
2023) (SR–ISE–2023–08) (Order Granting Approval
of a Proposed Rule Change, as Modified by
Amendment No. 1, to Make Permanent Certain
P.M.-Settled Pilots) (‘‘ISE Pilot Approval’’).
20 See Notice, supra note 3 at 68843.
15 See
E:\FR\FM\20NON1.SGM
20NON1
Federal Register / Vol. 88, No. 222 / Monday, November 20, 2023 / Notices
further believes that listing Third Friday
NDXP would not have any adverse
effects or impact on market volatility
and the operation of fair and orderly
markets on the underlying cash market
at or near the close of trading in its
Nasdaq–100 Index options.21 Further,
the Exchange states it does not believe
that any market disruptions will be
encountered with the introduction of
Nasdaq–100 Index options with thirdFriday-of-the-month expiration dates.22
The Exchange states it will monitor for
any such disruptions or the
development of any factors that could
cause such disruptions.23 Finally, the
Exchange represents it has sufficient
capacity to handle additional traffic
associated with listing Third Friday
NDXP options and that it has in place
adequate surveillance procedures to
monitor trading in Third Friday NDXP
options.24
The Commission has had concerns
about the adverse effects and impact of
p.m.- settlement upon market volatility
and the operation of fair and orderly
markets on the underlying cash market
at or near the close of trading on
expiration days.25 However, the
Commission recently approved
proposals from several exchanges,
including the Exchange, to permanently
establish programs permitting the listing
and trading of certain p.m.-settled
broad-based index options.26 In
approving these proposals, the
Commission reviewed data provided by
the exchanges in their filings, the
exchanges’ pilot data and reports, as
well as an analysis conducted at the
direction of Staff from the Commission’s
Division of Economic and Risk Analysis
and concluded that analysis of the pilot
data did not identify any significant
economic impact on the underlying
component securities surrounding the
close as a result of expiring p.m.-settled
options nor did it indicate a
deterioration in market quality for an
existing product when a new p.m.-
ddrumheller on DSK120RN23PROD with NOTICES1
21 See
id.
22 See id.
23 See id.
24 See id.
25 See Securities Exchange Act Release No. 65256
(September 2, 2011), 76 FR 55969, at 55972
(September 9, 2011) (SR–C2–2011–008) (Order
approving proposed rule change to establish a pilot
program to list and trade SPXPM options on the C2
Options Exchange, Incorporated).
26 See e.g., ISE Pilot Approval; Securities
Exchange Act Release Nos. 98451 (September 20,
2023), 88 FR 66088 (September 26, 2023) (SR–Phlx–
203–07) (Order approving a nonstandard
expirations pilot program and p.m.-settled XND
options) and 98454 (September 20, 2023), 88 FR
66103 at 66103–04 (September 26, 2023) (SR–
CBOE–2023–005)(Order approving p.m.-settled
Third Friday SPX options).
VerDate Sep<11>2014
17:42 Nov 17, 2023
Jkt 262001
settled expiration was introduced.27
Further, the Commission stated that
significant changes in closing
procedures in the decades since index
options moved to a.m. settlement may
also serve to mitigate the potential
impact of p.m.-settled index options on
the underlying cash markets.28
As noted above, the Exchange
currently may trade Third Friday NQX
options in addition to p.m.-settled NDX
option with nonstandard expirations.29
The Exchange’s proposal, which would
permit p.m.-settled Third Friday NDX,
is reasonably designed as a limited
expansion of existing p.m.-settled
broad-based index option programs and
may provide the investing public and
other market participants more
flexibility to closely tailor their
investment and hedging decisions. The
Exchange has represented that it has an
adequate surveillance program in place
to monitor trading in the Third Friday
NDXP options and has the necessary
systems capacity to support the new
options series.30 The Commission
expects the Exchange to continue to
monitor any potential risks from large
p.m.-settled positions and take
appropriate action on a timely basis if
warranted.
Accordingly, the Commission finds
that the proposed rule change is
consistent with Section 6(b)(5) of the
Act 31 and the rules and regulations
thereunder applicable to a national
securities exchange.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,32 that the
proposed rule change (SR–ISE–2023–20)
be, and hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.33
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–25547 Filed 11–17–23; 8:45 am]
BILLING CODE 8011–01–P
27 See
e.g., ISE Pilot Approval, 88 FR at 66114.
id.
29 See supra note 19. In addition, the Commission
previously approved a pilot program permitting the
listing and trading of Third Friday NDX options on
Nasdaq PHLX LLC (‘‘Phlx’’). See Securities
Exchange Act Release No. 81293 (August 2, 2017),
82 FR 37138 (August 8, 2017) (approving SR–Phlx–
2017–04). Phlx did not list any options under the
program and subsequently removed the rule from
its rule book. See Securities Exchange Act Release
No. 87517 (November 13, 2019), 84 FR 63910
(November 19, 2019) (SR–Phlx–2019–49).
30 See supra note 24 and accompanying text.
31 15 U.S.C. 78f(b)(5).
32 15 U.S.C. 78s(b)(2).
33 17 CFR 200.30–3(a)(12).
28 See
PO 00000
Frm 00107
Fmt 4703
Sfmt 4703
80793
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–98937; File Nos. SR–NYSE–
2023–29, SR–NYSEAMER–2023–39, SR–
NYSEArca–2023–53, SR–NYSECHX–2023–
16, SR–NYSENAT–2023–18]
Self-Regulatory Organizations; New
York Stock Exchange LLC; NYSE
American LLC; NYSEArca, Inc.; NYSE
Chicago, Inc.; NYSE National, Inc.;
Order Approving Proposed Rule
Changes To Establish Certain
Alternative Procedures for the
Allocation of Power in Co-Location
November 14, 2023.
I. Introduction
On August 3, 2023, New York Stock
Exchange LLC, NYSE American LLC,
NYSEArca, Inc., and NYSE Chicago, Inc.
(the ‘‘Exchanges’’) each filed with the
Securities and Exchange Commission
(‘‘Commission’’), pursuant to section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposal to amend its
connectivity fee schedule to include an
alternative procedure to allocate power
in the Mahwah Data Center based on
deposit-guaranteed orders from
colocation Users in certain
circumstances. On August 17, 2023,
NYSE National, Inc., filed with the
Commission the same proposed
amendments to its connectivity fee
schedule. The proposed rule changes
were published for comment in the
Federal Register on August 22, 2023 3
and August 25, 2023.4 The Commission
received no comments on the proposed
rule changes. This order grants approval
of the proposed rule changes.
II. Description of the Proposed Rule
Changes
A. Background
As more fully set forth in the Notice,
the Exchanges represent that in recent
years they have experienced
‘‘unprecedented’’ demand from
colocation Users for cabinet space and
power at the Mahwah Data Center
(‘‘MDC’’).5 The Exchanges filed, and the
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release Nos. 98148
(August 16, 2023), 88 FR 57150 (SR–NYSE–2023–
29); 98149 (August 16, 2023), 88 FR 57154 (SR–
NYSEAMER–2023–39); 98150 (August 16, 2023), 88
FR 57142 (SR–NYSEArca–2023–53); 98151 (August
16, 2023), 88 FR 57159 (SR–NYSECHX–2023–16).
4 See Securities Exchange Act Release No. 98171
(August 21, 2023), 88 FR 58364 (SR–NYSENAT–
2023–18). Each proposal is referred to as the
‘‘Notice’’ and for ease of reference, page citations
are to the Notice for NYSE–2023–29.
5 Notice, supra note 3, at 57150. For purposes of
each Exchange’s colocation services, a ‘‘User’’
2 17
E:\FR\FM\20NON1.SGM
Continued
20NON1
]]>Agencies
[Federal Register Volume 88, Number 222 (Monday, November 20, 2023)]
[Notices]
[Pages 80792-80793]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-25547]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-98935; File No. SR-ISE-2023-20]
Self-Regulatory Organizations; Nasdaq ISE, LLC; Order Approving a
Proposed Rule Change To Permit the Listing and Trading of P.M.-Settled
Nasdasq-100 Index[supreg] Options With a Third-Friday-of-the-Month
Expiration
November 14, 2023.
I. Introduction
On September 28, 2023, Nasdaq ISE, LLC (``ISE'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission''),
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to
permit the listing and trading of p.m.-settled Nasdaq-100 Index options
with a third-Friday-of-the-month (``Third Friday'') expiration. The
proposed rule change was published for comment in the Federal Register
on October 4, 2023.\3\ The Commission did not receive any comment
letters and is approving the proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 98643 (September 29,
2023), 88 FR 68843 (``Notice'').
---------------------------------------------------------------------------
II. Description of the Proposal
ISE proposes to amend its rules to permit the listing and trading
of p.m.-settled Nasdaq-100 Index (``NDXP'') options with a Third Friday
expiration. The Exchange currently can list a.m.-settled Third Friday
expirations on Nasdaq-100 Index (``NDX'') options.\4\ With this
proposal, the Exchange would have Third Friday expirations on NDX
options that are both a.m.-settled and p.m.-settled on the same day.\5\
The Exchange states that the conditions for listing options on NDXP
with Third Friday expirations will be similar to the a.m.-settled NDX
Third Friday expirations.\6\ The Exchange proposes to amend Options 4A,
Section 12(a)(6) to provide that in addition to a.m.-settled Nasdaq-100
Index options approved for trading on the Exchange, the Exchange may
also list options on the Nasdaq-100 Index whose exercise settlement
value is the closing value of the Nasdaq-100 Index on the expiration
day.
---------------------------------------------------------------------------
\4\ See Notice, supra note 3 at 68842.
\5\ See id.
\6\ See id.
---------------------------------------------------------------------------
The proposed contract would use a $100 multiplier, and the minimum
trading increment would be $0.05 for options trading below $3.00 and
$0.10 for all other series.\7\ Strike price intervals would be set at
no less than $2.50.\8\ Consistent with existing rules for index
options, the Exchange would allow up to nine near-term expiration
months \9\ as well as LEAPS.\10\ The product would have European-style
exercise. Because the product is based on NDX, there would be no
position limits.\11\
---------------------------------------------------------------------------
\7\ See Options 3, Section 3, Minimum Increments.
\8\ See Options 4A, Section 12(c)(1).
\9\ The Exchange proposes the same expiration month options for
NDXP as are permitted for the Nasdaq-100 Index, since both options
classes are derived from the Nasdaq-100 Index.
\10\ See Options 4A, Section 12(b)(1).
\11\ For a more detailed description of the proposed Third
Friday NDXP contract, see Notice, supra note 3.
---------------------------------------------------------------------------
NDXP options are series of the NDX options class.\12\ Currently,
these NDXP options may expire any day of the week: Mondays, Tuesdays,
Wednesdays, Thursdays, Fridays, as applicable (other than third-Friday-
of-the-month), and the last trading day of the month.\13\ Third Friday
p.m.-settled options trading under the NDXP symbol will be a new type
of series under the Nasdaq-100 Index options class and not a new
options class--therefore all Third-Friday NDXP options will be
aggregated together with all other standard expirations for applicable
reporting and other requirements.\14\
---------------------------------------------------------------------------
\12\ See Notice, supra note 3 at 68842.
\13\ See Supplementary Material .07(a) to Options 4, Section 5.
\14\ See Options 3, Section 6(c) and (d).
---------------------------------------------------------------------------
As with NDX, whenever the Exchange determines that additional
margin is warranted in light of the risks associated with an under-
hedged NDXP option position, including Third Friday NDXP, the Exchange
may consider imposing additional margin upon the account maintaining
such under-hedged position pursuant to its authority pursuant to
Exchange Rules Options 6E, Section 2.\15\ The trading hours for NDXP,
including Third Friday NDXP, will be from 9:30 a.m. to 4:15 p.m.
Eastern Time.\16\
---------------------------------------------------------------------------
\15\ See Notice, supra note 3 at 68843.
\16\ The Exchange notes that trading in NDXP will ordinarily
cease at 4:00 p.m. on the day on which the exercise-settlement value
is calculated. See Notice, supra note 3 at 68843, n. 16.
---------------------------------------------------------------------------
III. Discussion and Commission Findings
After careful review, the Commission finds that the proposed rule
change is consistent with the Act and the rules and regulations
thereunder applicable to a national securities exchange.\17\ In
particular, the Commission finds that the proposed rule change is
consistent with Section 6(b)(5) of the Act,\18\ which requires, among
other things, that the Exchange's rules be designed to prevent
fraudulent and manipulative acts and practices, 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.
---------------------------------------------------------------------------
\17\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\18\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
In support of its proposal, the Exchange notes that the Commission
recently approved trading of Third Friday expirations for options based
on \1/5\ the value of the Nasdaq-100 Index (``NQX'').\19\ The Exchange
states that the introduction of Third Friday NDXP will attract order
flow to the Exchange, increase the variety of listed options to
investors, and provide a valuable hedge tool to investors.\20\ The
Exchange
[[Page 80793]]
further believes that listing Third Friday NDXP would not have any
adverse effects or impact on market volatility and the operation of
fair and orderly markets on the underlying cash market at or near the
close of trading in its Nasdaq-100 Index options.\21\ Further, the
Exchange states it does not believe that any market disruptions will be
encountered with the introduction of Nasdaq-100 Index options with
third-Friday-of-the-month expiration dates.\22\ The Exchange states it
will monitor for any such disruptions or the development of any factors
that could cause such disruptions.\23\ Finally, the Exchange represents
it has sufficient capacity to handle additional traffic associated with
listing Third Friday NDXP options and that it has in place adequate
surveillance procedures to monitor trading in Third Friday NDXP
options.\24\
---------------------------------------------------------------------------
\19\ See Securities Exchange Act Release No. 98450 (September
20, 2023), 88 FR 66 111 (September 26, 2023) (SR-ISE-2023-08) (Order
Granting Approval of a Proposed Rule Change, as Modified by
Amendment No. 1, to Make Permanent Certain P.M.-Settled Pilots)
(``ISE Pilot Approval'').
\20\ See Notice, supra note 3 at 68843.
\21\ See id.
\22\ See id.
\23\ See id.
\24\ See id.
---------------------------------------------------------------------------
The Commission has had concerns about the adverse effects and
impact of p.m.- settlement upon market volatility and the operation of
fair and orderly markets on the underlying cash market at or near the
close of trading on expiration days.\25\ However, the Commission
recently approved proposals from several exchanges, including the
Exchange, to permanently establish programs permitting the listing and
trading of certain p.m.-settled broad-based index options.\26\ In
approving these proposals, the Commission reviewed data provided by the
exchanges in their filings, the exchanges' pilot data and reports, as
well as an analysis conducted at the direction of Staff from the
Commission's Division of Economic and Risk Analysis and concluded that
analysis of the pilot data did not identify any significant economic
impact on the underlying component securities surrounding the close as
a result of expiring p.m.-settled options nor did it indicate a
deterioration in market quality for an existing product when a new
p.m.-settled expiration was introduced.\27\ Further, the Commission
stated that significant changes in closing procedures in the decades
since index options moved to a.m. settlement may also serve to mitigate
the potential impact of p.m.-settled index options on the underlying
cash markets.\28\
---------------------------------------------------------------------------
\25\ See Securities Exchange Act Release No. 65256 (September 2,
2011), 76 FR 55969, at 55972 (September 9, 2011) (SR-C2-2011-008)
(Order approving proposed rule change to establish a pilot program
to list and trade SPXPM options on the C2 Options Exchange,
Incorporated).
\26\ See e.g., ISE Pilot Approval; Securities Exchange Act
Release Nos. 98451 (September 20, 2023), 88 FR 66088 (September 26,
2023) (SR-Phlx-203-07) (Order approving a nonstandard expirations
pilot program and p.m.-settled XND options) and 98454 (September 20,
2023), 88 FR 66103 at 66103-04 (September 26, 2023) (SR-CBOE-2023-
005)(Order approving p.m.-settled Third Friday SPX options).
\27\ See e.g., ISE Pilot Approval, 88 FR at 66114.
\28\ See id.
---------------------------------------------------------------------------
As noted above, the Exchange currently may trade Third Friday NQX
options in addition to p.m.-settled NDX option with nonstandard
expirations.\29\ The Exchange's proposal, which would permit p.m.-
settled Third Friday NDX, is reasonably designed as a limited expansion
of existing p.m.-settled broad-based index option programs and may
provide the investing public and other market participants more
flexibility to closely tailor their investment and hedging decisions.
The Exchange has represented that it has an adequate surveillance
program in place to monitor trading in the Third Friday NDXP options
and has the necessary systems capacity to support the new options
series.\30\ The Commission expects the Exchange to continue to monitor
any potential risks from large p.m.-settled positions and take
appropriate action on a timely basis if warranted.
---------------------------------------------------------------------------
\29\ See supra note 19. In addition, the Commission previously
approved a pilot program permitting the listing and trading of Third
Friday NDX options on Nasdaq PHLX LLC (``Phlx''). See Securities
Exchange Act Release No. 81293 (August 2, 2017), 82 FR 37138 (August
8, 2017) (approving SR-Phlx-2017-04). Phlx did not list any options
under the program and subsequently removed the rule from its rule
book. See Securities Exchange Act Release No. 87517 (November 13,
2019), 84 FR 63910 (November 19, 2019) (SR-Phlx-2019-49).
\30\ See supra note 24 and accompanying text.
---------------------------------------------------------------------------
Accordingly, the Commission finds that the proposed rule change is
consistent with Section 6(b)(5) of the Act \31\ and the rules and
regulations thereunder applicable to a national securities exchange.
---------------------------------------------------------------------------
\31\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\32\ that the proposed rule change (SR-ISE-2023-20) be, and hereby
is, approved.
---------------------------------------------------------------------------
\32\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\33\
---------------------------------------------------------------------------
\33\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-25547 Filed 11-17-23; 8:45 am]
BILLING CODE 8011-01-P
