Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Notices 36827 

4Comments received on the proposed rule change 

are available at: https://www.sec.gov/comments/srnysearca-2021-37/srnysearca202137.htm. 

5 15 U.S.C. 78s(b)(2). 

6 Id. 

7 17 CFR 200.30–3(a)(31). 

1 15 U.S.C. 78s(b)(1). 

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4The weekly listing program is known as the 

Short Term Option Series Program and is described 

within Rule 903, Commentary .10. 

5The Exchange will open at least one expiration 

month for each class of options open for trading on 

the Exchange. See Rule 903(a). The monthly 

expirations are subject to certain listing criteria for 

underlying securities described within Rule 915. 

Monthly listings expire the third Friday of the 

month See The Options Clearing Corporation 

(‘‘OCC’’) By-Laws at Section 1. 

6The quarterly listing program is known as the 

Quarterly Options Series Program and is described 

within Rule 903. 

7The interval between strike prices of series of 

options on individual stocks may be $2.50 or 

greater where the strike price is $25 or less, 

provided however, that the Exchange may not list 

$2.50 intervals below $50 (e.g. $12.50, $17.50) for 

any class included within the $1 Strike Price 

Program, as detailed below in Rule 903 

Commentary .06 if the addition of $2.50 intervals 

would cause the class to have strike price intervals 

that are $0.50 apart. For series of options on 

Exchange-Traded Fund Shares that satisfy the 

criteria set forth in Rule 915 Commentary .06, the 

interval of strike prices may be $1 or greater where 

the strike price is $200 or less or $5 or greater where 

the strike price is over $200. Exceptions to the 

strike price intervals above are set forth in Rule 903, 

Commentary .07. 

8The $1 Strike Interval Program is described 

within Rule 903, Commentary .06 

9The $0.50 Strike Program is described within 

Rule 903, Commentary .13 

10The $2.50 Strike Price Program is described 

within Rule 903, Commentary .07 

11The $5 Strike Program is described within Rule 

903, Commentary .12 

12As a result, the proposed rule change 

subsequently updates current Rule 903, 

Commentary .10(e) to (f). In this regard, the 

Exchange also proposes to update a cross-reference 

to this newly re-lettered paragraph .10(g) that 

appears in Rule 903(h). See proposed Rule 903(h). 

comments on the proposed rule 

change.4

Section 19(b)(2) of the Act 5 provides 

that within 45 days of the publication of 

notice of the filing of a proposed rule 

change, or within such longer period up 

to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the self-regulatory organization 

consents, the Commission shall either 

approve the proposed rule change, 

disapprove the proposed rule change, or 

institute proceedings to determine 

whether the proposed rule change 

should be disapproved. The 45th day 

after publication of the notice for this 

proposed rule change is July 11, 2021. 

The Commission is extending this 45- 

day time period. 

The Commission finds that it is 

appropriate to designate a longer period 

within which to take action on the 

proposed rule change so that it has 

sufficient time to consider the proposed 

rule change and the comments received. 

Accordingly, pursuant to Section 

19(b)(2) of the Act,6 the Commission 

designates August 25, 2021, as the date 

by which the Commission shall either 

approve or disapprove, or institute 

proceedings to determine whether to 

disapprove, the proposed rule change 

(File No. SR–NYSEArca–2021–37). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–14790 Filed 7–12–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92336; File No. SR– 

NYSEAMER–2021–32] 

Self-Regulatory Organizations; NYSE 

American LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Rule 903 To 

Limit Short Term Options Series 

Intervals 

July 7, 2021. 

Pursuant to Section 19(b)(1) 1 of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that on June 25, 

2021, NYSE American LLC (‘‘NYSE 

American’’ or 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 change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Rule 903 (Series of Options Open for 

Trading) in connection with limiting the 

number of strikes listed for Short Term 

Option Series which are available for 

quoting and trading on the Exchange. 

The proposed rule change is available 

on the Exchange’s website at 

www.nyse.com, at the principal office of 

the Exchange, and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

set forth in sections A, B, and C below, 

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

Rule 903 (Series of Options Open for 

Trading). Specifically, this proposal 

seeks to widen the intervals between 

strikes in order to limit the number of 

strikes listed for multiply listed equity 

options classes (excluding options on 

Exchange-Traded Funds (‘‘ETFs’’) and 

Section 107 Securities (as described 

herein, see infra n. 13) within the Short 

Term Option Series program that have 

an expiration date more than 21 days 

from the listing date. 

Background 

Current Rule 903 permits the 

Exchange, after a particular class of 

options has been approved for listing 

and trading on the Exchange, to open for 

trading series of options therein. The 

Exchange may list series of options for 

trading on a weekly,4 monthly 5 or 

quarterly 6 basis. Rule 903 (c) sets forth 

the intervals between strike prices of 

series of options on individual stocks 

generally 7 and Rule 903 Commentary 

.10 (d) specifically sets forth intervals 

between strike prices Short Term 

Option Series. Additionally, the 

Exchange may list series of options 

pursuant to the $1 Strike Price Interval 

Program,8 the $0.50 Strike Program,9 the 

$2.50 Strike Price Program,10 and the $5 

Strike Program.11 The Exchange’s 

proposal seeks to amend the listing of 

weekly series of options (i.e. Short Term 

Option Series) by adopting new Rule 

903 Commentary .10 (e),12 which 

widens the permissible intervals 

between strikes, thereby limiting the 

number of strikes listed, for multiply 

listed equity options (excluding options 


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13The term ‘‘ETF’’ (Exchange-Traded Fund) (or 

‘‘Fund Shares’’) has the same meaning as the term 

‘‘exchange-traded fund’’ as defined in Rule 6c–11 

under the Investment Company Act of 1940. See 

Rule 915, Commentary .06(g). Securities deemed 

appropriate for options trading shall include shares 

or other securities (‘‘Fund Shares’’), including but 

not limited to Partnership Units as defined in this 

Rule, that are principally traded on a national 

securities exchange and are defined as an ‘‘NMS 

stock’’ under Rule 600 of Regulation NMS, and that 

(1) represent interests in registered investment 

companies (or series thereof) organized as open-end 

management investment companies, unit 

investment trusts or similar entities, and that hold 

portfolios of securities comprising or otherwise 

based on or representing investments in indexes or 

portfolios of securities (or that hold securities in 

one or more other registered investment companies 

that themselves hold such portfolios of securities) 

(‘‘Funds ’’) and/or financial instruments including, 

but not limited to, stock index futures contracts, 

options on futures, options on securities and 

indexes, equity caps, collars and floors, swap 

agreements, forward contracts, repurchase 

agreements and reverse repurchase agreements (the 

‘‘Financial Instruments’’), and money market 

instruments, including, but not limited to, U.S. 

government securities and repurchase agreements 

(the ‘‘Money Market Instruments’’) constituting or 

otherwise based on or representing an investment 

in an index or portfolio of securities and/or 

Financial Instruments and Money Market 

Instruments, or (2) represent commodity pool 

interests principally engaged, directly or indirectly, 

in holding and/or managing portfolios or baskets of 

securities, commodity futures contracts, options on 

commodity futures contracts, swaps, forward 

contracts and/or options on physical commodities 

and/or non-U.S. currency (‘‘Commodity Pool 

ETFs’’) or (3) represent interests in a trust or similar 

entity that holds a specified non-U.S. currency or 

currencies deposited with the trust or similar entity 

when aggregated in some specified minimum 

number may be surrendered to the trust by the 

beneficial owner to receive the specified non-U.S. 

currency or currencies and pays the beneficial 

owner interest and other distributions on the 

deposited non-U.S. currency or currencies, if any, 

declared and paid by the trust (‘‘Currency Trust 

Shares’’), or (4) represent interests in the SPDR Gold 

Trust or are issued by the iShares COMEX Gold 

Trust or iShares Silver Trust). 

14Securities deemed appropriate for options 

trading shall include shares or other securities 

(‘‘Index-Linked Securities’’, ‘‘Commodity-Linked 

Securities’’, ‘‘Currency-Linked Securities’’, ‘‘Fixed 

Income-Linked Securities’’, ‘‘Futures-Linked 

Securities’’, and ‘‘Combination-Linked Securities’’, 

collectively known as ‘‘Section 107 Securities’’), as 

defined in Sections 107D, 107E, 107F, 107G, 107H 

and 107I of the Company Guide, that are principally 

traded on a national securities exchange and an 

‘‘NMS stock’’ (as defined in Rule 600 of Regulation 

NMS under the Securities and Exchange Act of 

1934), and represent ownership of a security that 

provides for the payment at maturity, as described 

below: Index-Linked Securities are securities that 

provide for the payment at maturity of a cash 

amount based on the performance or the leveraged 

(multiple or inverse) performance of an underlying 

index or indexes of equity securities (‘‘Equity 

Reference Asset’’); Commodity-Linked Securities 

are securities that provide for the payment at 

maturity of a cash amount based on the 

performance or the leveraged (multiple or inverse) 

performance of one or more physical commodities 

or commodity futures, options on commodities, or 

other commodity derivatives or Commodity-Based 

Trust Shares or a basket or index of any of the 

foregoing (‘‘Commodity Reference Asset’’); 

Currency-Linked Securities are securities that 

provide for the payment at maturity of a cash 

amount based on the performance or the leveraged 

(multiple or inverse) performance of one or more 

currencies, or options on currencies or currency 

futures or other currency derivatives or Currency 

Trust Shares (as defined in Rule 1200B—AEMI(b)) 

or a basket or index of any of the foregoing 

(‘‘Currency Reference Asset’’); Fixed Income-Linked 

Securities are securities that provide for the 

payment at maturity of a cash amount based on the 

performance or the leveraged (multiple or inverse) 

performance of one or more notes, bonds, 

debentures or evidence of indebtedness that 

include, but are not limited to, U.S. Department of 

Treasury securities (‘‘Treasury Securities’’), 

government-sponsored entity securities (‘‘GSE 

Securities’’), municipal securities, trust preferred 

securities, supranational debt and debt of a foreign 

country or a subdivision thereof or a basket or index 

of any of the foregoing (‘‘Fixed Income Reference 

Asset’’); Futures-Linked Securities are securities 

that provide for the payment at maturity of a cash 

amount based on the performance or the leveraged 

(multiple or inverse) performance of an index or 

indexes of futures contracts or options or 

derivatives on futures contracts (a ‘‘Futures 

Reference Asset’’); and Combination-Linked 

Securities are securities that provide for the 

payment at maturity of a cash amount based on the 

performance or the leveraged (multiple or inverse) 

performance of any combination of two or more 

Equity Reference Assets, Commodity Reference 

Assets, Currency Reference Assets, Fixed Income 

Reference Assets, or Futures Reference Assets (a 

‘‘Combination Reference Asset’’). 

15The Exchange may have no more than a total 

of five Short Term Option Expiration Dates, not 

including any Monday or Wednesday SPY 

Expirations as provided in paragraph (g). If the 

Exchange is not open for business on the respective 

Thursday or Friday, the Short Term Option 

Opening Date will be the first business day 

immediately prior to that respective Thursday or 

Friday. Similarly, if the Exchange is not open for 

business on the Friday that the options are set to 

expire, the Short Term Option Expiration Date will 

be the first business day immediately prior to that 

Friday. See Rule 903, Commentary .10. The 

Exchange may open for trading on any Friday or 

Monday that is a business day series of options on 

the SPDR S&P 500 ETF Trust (‘‘SPY’’) to expire on 

any Monday of the month that is a business day and 

is not a Monday on which Quarterly Options Series 

expire (‘‘Monday SPY Expirations’’), provided that 

any Friday on which the Exchange opens for 

trading a Monday SPY Expiration is one business 

week and one business day prior to expiration. The 

Exchange may also open for trading on any Tuesday 

or Wednesday that is a business day series of SPY 

options to expire on any Wednesday of the month 

that is a business day and is not a Wednesday on 

which Quarterly Options Series expire 

(‘‘Wednesday SPY Expirations’’). The Exchange 

may list up to five consecutive Monday SPY 

Expirations and up to five consecutive Wednesday 

SPY Expirations at one time; the Exchange may 

have no more than a total of five Monday SPY 

Expirations and no more than a total of five 

Wednesday SPY Expirations. Monday and 

Wednesday SPY Expirations will be subject to the 

provisions of this Rule. See Rule 903, Commentary 

.10(e). With the exception of Monday and 

Wednesday SPY Expirations, no Short Term Option 

Series may expire in the same week in which 

monthly option series on the same class expire or, 

in the case of Quarterly Options Series, on an 

expiration that coincides with an expiration of 

Quarterly Options Series on the same class. See 

Rule 903, Commentary .10(e). 

16See Rule 903, Commentary .10(a). 

17Additionally, Rule 903, Commentary .10 (d) 

provides that the interval between strike prices on 

Short Term Option Series shall be the same as the 

on ETFs 13 and Section 107 Securities 14) that have an expiration date more than 

21 days from the listing date. This 

proposal does not amend the monthly or 

quarterly listing rules, nor does it 

amend the $1 Strike Price Interval 

Program, the $0.50 Strike Program, the 

$2.50 Strike Price Program, or the $5 

Strike Program. 

Short Term Option Series Program 

After an option class has been 

approved for listing and trading on the 

Exchange,15 Rule 903(h) permits the 

Exchange to open for trading on any 

Thursday or Friday that is a business 

day (‘‘Short Term Option Opening 

Date’’) series of options on that class 

that expire at the close of business on 

each of the next five Fridays that are 

business days and are not Fridays on 

which monthly options series or 

Quarterly Options Series expire (‘‘Short 

Term Option Expiration Dates’’). The 

Exchange may select up to fifty 

currently listed option classes on which 

Short Term Option Series may be 

opened on any Short Term Option 

Opening Date. In addition to the fifty 

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 option class 

eligible for participation in the Short 

Term Option Series Program, the 

Exchange may open up to 30 Short 

Term Option Series 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.16 Pursuant to 

Rule 903, Commentary .10 (b), the 

Exchange may open up to 30 initial 

series for each option class that 

participates in the Short Term Option 

Series Program and, pursuant to Rule 

903,Commentary .10 (c), if the Exchange 

opens less than 30 Short Term Option 

Series for a Short Term Option 

Expiration Date, additional series may 

be opened for trading on the Exchange 

when Exchange deems it necessary to 

maintain an orderly market, to meet 

customer demand, or when the market 

price of the underlying security moves 

substantially from the exercise price or 

prices of the series already opened. Rule 

903, Commentary .10 (d) provides that, 

if the class does not trade in $1 strike 

price intervals, the strike price interval 

for Short Term Option Series may be: (i) 

$0.50 or greater where the strike price 

is less than $75; (ii) $1.00 or greater 

where the strike price is between $75 

and $150; or (iii) $2.50 or greater for 

strike prices greater than $150.17


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Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Notices 36829 

strike prices for series in that same option class that 

expire in accordance with the normal monthly 

expiration cycle. During the expiration week of an 

option class that is selected for the Short Term 

Option Series Program pursuant to this rule (‘‘Short 

Term Option’’), the strike price intervals for the 

related non-Short Term Option (‘‘Related non-Short 

Term Option’’) shall be the same as the strike price 

intervals for the Short Term Option. 

18See Securities Exchange Act Release No. 91125 

(February 12, 2021), 86 FR 10375 (February 19, 

2021) (SR–BX–2020–032) (‘‘BX Strike Interval 

Approval Order’’); and SR–2020–BX–032 as 

amended by Amendment No. 1 (February 10, 2021) 

available at: https://www.sec.gov/comments/sr-bx2020-032/srbx2020032-8359799-229182.pdf (‘‘BX 

proposal’’); see also BX Options Strike Proliferation 

Proposal (February 25, 2021) available at: https://

www.nasdaq.com/solutions/bx-options-strikeproliferation-proposal). 

19See BX Strike Interval Approval Order, id. 

20The Exchange notes that corporate actions 

resulting in change ownership would result in a 

surviving company, such as a merger of two 

publicly listed companies, and the Share Price of 

the surviving company would be used to determine 

strike intervals pursuant to the proposed table. 

Corporate actions that do not result in a change of 

ownership, such as stock-splits or distribution of 

special cash dividends, would not result in a 

‘‘surviving company,’’ therefore would not impact 

which Share Price to apply pursuant to the 

proposed Rule. 

21For example, options listed as of April 1, 2021 

would be calculated on April 2, 2021 using the 

Average Daily Volume from October 1, 2020 to 

December 31, 2020. 

22The Exchange notes that any strike intervals 

imposed by the Exchange’s Rules will continue to 

apply. In this example, the strikes would be in $1 

intervals up to (but not including) $150, which is 

the upper limit imposed by Rule 903, Commentary 

.10(d). 

The Exchange notes that listings in 

the weekly program comprise a 

significant part of the standard listing in 

options markets and that the industry 

has observed a notable increase over 

approximately the last five years in 

compound annual growth rate 

(‘‘CAGR’’) of weekly strikes as compared 

to CAGR for standard third-Friday 

expirations.18

Proposal 

The Exchange proposes to widen the 

intervals between strikes in order to 

limit the number of strikes listed for 

equity options (excluding options on 

ETFs and Section 107 Securities) listed 

as part of the Short Term Option Series 

Program that have an expiration date 

more than 21 days from the listing date, 

by adopting proposed Rule 903, 

Commentary .10 (e). The Exchange 

notes that this proposal is substantively 

identical to the strike interval proposal 

recently submitted by Nasdaq BX, Inc. 

(‘‘BX’’) and approved by the Securities 

and Exchange Commission 

(‘‘Commission’’).19

The proposal widens intervals 

between strikes for expiration dates of 

equity option series (excluding options 

on ETFs and Section 107 Securities) 

beyond 21 days utilizing the three-tiered 

table in proposed Rule 903, 

Commentary .10 (e) (presented below) 

which considers both the Share Price 

and Average Daily Volume for the 

option series. The table indicates the 

applicable strike intervals and 

supersedes Rule 903, Commentary .10 

(c), which currently permits 10 

additional series to be opened for 

trading on the Exchange when the 

Exchange deems it necessary to 

maintain an orderly market, to meet 

customer demand or when the market 

price of the underlying security moves 

substantially from the exercise price or 

prices of the series already opened. As 

a result of the proposal Rule 903, 

Commentary .10(e) would not permit an 

additional series of an equity option to 

have an expiration date more than 21 

days from the listing date to be opened 

for trading on the Exchange despite the 

noted circumstances in paragraph (c) 

when such additional series may 

otherwise be added. 

Tier Average daily volume 

Share price 

Less than $25 $25 to less 

than $75 

$75 to less 

than $150 

$150 to less 

than $500 

$500 or 

greater 

1 ........................... Greater than 5,000 ............................ $0.50 $1.00 $1.00 $5.00 $5.00 

2 ........................... Greater than 1,000 to 5,000 .............. 1.00 1.00 1.00 5.00 10.00 

3 ........................... 0 to 1,000 .......................................... 2.50 5.00 5.00 5.00 10.00 

Proposed 903, Commentary .10 (e)(1) 

provides that the Share Price is the 

closing price on the primary market on 

the last day of the calendar quarter. This 

value is used to derive the column from 

which to apply strike intervals 

throughout the next calendar quarter. 

Also, proposed Rule 903, Commentary 

.10 (e)(1) provides that in the event of 

a corporate action, the Share Price of the 

surviving company is utilized.20

Proposed Rule 903, Commentary .10 

(e)(2) provides that the Average Daily 

Volume is the total number of option 

contracts traded in a given security for 

the applicable calendar quarter divided 

by the number of trading days in the 

applicable calendar quarter. Beginning 

on the second trading day in the first 

month of each calendar quarter, the 

Average Daily Volume is calculated by 

utilizing data from the prior calendar 

quarter based on Customer-cleared 

volume at OCC. For options listed on 

the first trading day of a given calendar 

quarter, the Average Daily Volume is 

calculated using the calendar quarter 

prior to the last trading calendar 

quarter.21 Pursuant to current Rule 903, 

Commentary .10, if the Exchange is not 

open for business on the respective 

Thursday or Friday, the Short Term 

Option Opening Date will be the first 

business day immediately prior to that 

respective Thursday or Friday. 

By way of example, if the Share Price 

for a symbol was $142 at the end of a 

calendar quarter, with an Average Daily 

Volume greater than 5,000, thereby, 

requiring strike intervals to be listed 

$1.00 apart, that strike interval would 

apply for the calendar quarter, 

regardless of whether the Share Price 

changed to $150 or greater during that 

calendar quarter.22 The proposed table 

within Rule 903, Commentary .10(e) 

takes into account the notional value of 

a security, as well as Average Daily 

Volume in the underlying stock, in 

order to widen the intervals between 

strikes and thereby limit the number of 

strikes listed for equity options 

(excluding options on ETFs and Section 

107 Securities) in the Short Term 

Option Series listing program. The 

Exchange will utilize OCC Customercleared volume, as customer volume is 

an appropriate proxy for demand. The 

OCC Customer-cleared volume 

represents the majority of options 

volume executed on the Exchange, 

which, in turn, reflects the demand in 

the marketplace. The options series 

listed on the Exchange are intended to 

meet customer demand by offering an 

appropriate number of strikes. NonCustomer cleared OCC volume generally 

represents the supply side. 

The proposal is intended to remove 

repetitive and unnecessary strike 

listings across the weekly expiries. 

Specifically, the proposal seeks to 

reduce the number of strikes listed in 

the furthest weeklies, which generally 

have wider markets and therefore lower 


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23See BX proposal, supra note 18, which presents 

tables that focus on data for 10 of the most and least 

actively traded symbols and demonstrate average 

spreads in weekly options during the month of 

August 2020. 

24The Exchange notes that this proposal is an 

initial attempt at reducing strikes and anticipates 

filing additional proposals to continue reducing 

strikes. The percentage of underlying products and 

percentage of and total number of strikes, are 

approximations and may vary slightly at the time 

of this filing. The Exchange intends to decrease the 

overall number of strikes listed on the NYSE Group 

options exchanges in a methodical fashion, so that 

it may monitor progress and feedback from its ATP 

Holders. The Exchange also notes that its affiliated 

options exchange, NYSE Arca Options, Inc. plans 

to submit an identical proposal. 

25From information drawn from time period 

between January 2020 and May 2020. See BX 

proposal, supra note 18. 

26See BX proposal, supra note 18. 

27For example, two strikes that are densely 

clustered may have the same risk properties and 

may also be the same percentage out-of-the money. 

28For example, if an options class became newly 

eligible for listing pursuant to Rule 5.3–O on March 

1, 2021 (and was actually listed for trading that 

day), the first full quarterly lookback would be 

available on July 1, 2021. This option would 

become subject to the proposed strike intervals on 

July 2, 2021. 29See Rule 925.1NY. 

market quality.23 The proposed strike 

intervals are intended to widen 

permissible strike intervals in multiply 

listed equity options (excluding options 

on ETFs and Section 107 Securities) 

where there is less volume as measured 

by the Average Daily Volume tiers. 

Therefore, the lower the Average Daily 

Volume, the greater the proposed spread 

between strike intervals. Options classes 

with higher volume contain the most 

liquid symbols and strikes, which the 

Exchange believes makes the finer 

proposed spread between strike 

intervals for those symbols appropriate. 

Additionally, lower-priced shares have 

finer strike intervals than higher-priced 

shares when comparing the proposed 

spread between strike intervals. Today, 

weeklies are available on 16% of 

underlying products. The proposal 

limits the density of strikes listed in 

series of options, without reducing the 

classes of options available for trading 

on the Exchange. Short Term Option 

Series with an expiration date greater 

than 21 days from the listing date 

currently equate to 7.5% of the total 

number of strikes in the options market, 

which equals 81,000 strikes.24 The 

Exchange expects this proposal to result 

in the limitation of approximately 

20,000 strikes within the Short Term 

Option Series, which is approximately 

2% of the total strikes in the options 

markets.25 The Exchange understands 

there has been an inconsistency of 

demand for series of options beyond 21 

calendar days.26 The proposal takes into 

account customer demand for certain 

options classes, by considering both the 

Share Price and the Average Daily 

Volume, in order to remove certain 

strike intervals where there exist 

clusters of strikes whose characteristics 

closely resemble one another and, 

therefore, do not serve different trading 

needs,27 rendering these strikes less 

useful. The Exchange also notes that the 

proposal focuses on strikes in multiply 

listed equity options, and excludes ETFs 

and Section 107 Securities, as the 

majority of strikes reside within equity 

options. 

Additionally, proposed Rule 903, 

Commentary .07(e)(3) provides that 

options that are newly eligible for listing 

pursuant to Rule 915 and designated to 

participate in the Short Term Option 

Series program pursuant to Rule 903, 

Commentary .10(e) will not be subject to 

subparagraph (e) (as proposed) until 

after the end of the first full calendar 

quarter following the date the option 

class was first listed for trading on any 

options market.28 As proposed, the 

Exchange is permitted to list options on 

newly eligible listings, without having 

to apply the wider strike intervals, until 

the end of the first full calendar quarter 

after such options were listed. The 

proposal thereby permits the Exchange 

to add strikes to meet customer demand 

in a newly listed options class. A newly 

eligible option class may fluctuate in 

price after its initial listing; such 

volatility reflects a natural uncertainty 

about the security. By deferring the 

application of the proposed wider strike 

intervals until after the end of the first 

full calendar quarter, additional 

information on the underlying security 

will be available to market participants 

and public investors, as the price of the 

underlying has an opportunity to settle 

based on the price discovery that has 

occurred in the primary market during 

this deferment period. Also, the 

Exchange has the ability to list as many 

strikes as are permissible for the Short 

Term Option Series once the expiry is 

no more than 21 days. Short Term 

Option Series that have an expiration 

date no more than 21 days from the 

listing date are not subject to the 

proposed strike intervals, which allows 

the Exchange to list additional, and 

potentially narrower, strikes in the 

event of market volatility or other 

market events. These metrics are 

intended to align expectations for 

determining which strike intervals will 

be utilized. Finally, proposed Rule 903, 

Commentary .10(e)(4) provides that, 

notwithstanding the strike intervals 

imposed in proposed subparagraph (e), 

the proposal does not amend the range 

of strikes that may be listed pursuant to 

subparagraph (d). 

While the current listing rules permit 

the Exchange to list a number of weekly 

strikes on its market, in an effort to 

encourage Market Makers to deploy 

capital more efficiently, as well as 

improve displayed market quality, the 

proposal aims to reduce the density of 

strikes listed in later weeks by widening 

the intervals between strikes listed for 

equity options (excluding options on 

ETFs and Section 107 Securities) which 

have an expiration date more than 21 

days from the listing date. The Exchange 

requires Specialists and e-Specialists 

(‘‘Specialists’’) and Market Makers to 

quote during a certain amount of time 

in the trading day and in a certain 

percentage of series in their assigned 

options classes to maintain liquidity in 

the market.29 With an increasing 

number of strikes being listed across 

options exchanges, Market Makers must 

expend their capital to ensure that they 

have the appropriate infrastructure to 

meet their quoting obligations on all 

options markets in which they are 

assigned in option classes. The 

Exchange believes that by widening the 

intervals between strikes listed for 

equity options (excluding options on 

ETFs and Section 107 Securities), thus 

reducing the number of strikes listed on 

the Exchange, the proposal will likewise 

reduce the number of weekly strikes in 

which Specialists and Market Makers 

are required to quote and, as a result, 

allow Specialists and Market Makers to 

expend their capital in the options 

market in a more efficient manner. Due 

to this increased efficiency, the 

Exchange believes that the proposal may 

improve overall market quality on the 

Exchange by widening the intervals 

between strikes in multiply listed equity 

options (excluding options on ETFs and 

Section 107 Securities) that have an 

expiration date more than 21 days from 

the listing date. The proposal is 

intended to balance the goal of limiting 

the number of listed strikes with the 

needs of market participants. The 

Exchange believes that the various 

permissible strike intervals will 

continue to offer market participants the 

ability to select the appropriate strikes 

to meet their investment objectives. 

Implementation 

The Exchange will announce the 

implementation date of the proposed 

rule change by Trader Update to be 

published no later than 30 days 

following the operative date of the 

proposed rule. The implementation date 


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Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Notices 36831 

30When the Exchange is the first exchange to list 

an option class Rule 6.4–O, Commentary .07 the 

Exchange shall provide a Trader Notice OTP 

Holders regarding the Short Term Option Series to 

be listed. Such notice will include for each eligible 

option class: the closing price of the underlying, the 

Average Daily Volume of the option class; and the 

eligible strike category (per the proposed table) in 

which the eligible option class falls under as a 

result of the closing price and the Average Daily 

Volume. 

31 15 U.S.C. 78f(b). 

32 15 U.S.C. 78f(b)(5). 

33 Id. 34See supra note 30. 

35The Exchange notes that is has discussed the 

proposed strike intervals with various ATP Holders. 

36Options contracts settle one business day after 

trade date. Strike listing determinations are made 

the day prior to the start of trading in each series. 

37See BX Strike Interval Approval Order, supra 

note 18. 

will be no later than 30 days following 

the issuance of the Trader Update. The 

Exchange will issue a Trader Update 30

to its ATP Holders whenever the 

Exchange is the first exchange to list a 

class as eligible for Short Term Option 

Series pursuant to Rule 903, 

Commentary .10(e). 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) and the rules and regulations 

thereunder applicable to the Exchange 

and, in particular, the requirements of 

Section 6(b) of the Act.31 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 32 requirements that the rules of 

an exchange be designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, to foster cooperation 

and coordination with persons engaged 

in regulating, clearing, settling, 

processing information with respect to, 

and facilitating transactions in 

securities, 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. 

Additionally, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) 33 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

The proposal seeks to widen the 

permissible intervals between strikes 

listed for equity options (excluding 

options on ETFs and Section 107 

Securities) in order to limit the number 

of strikes listed in the Short Term 

Option Series program that have an 

expiration date more than 21 days. The 

proposal removes impediments to and 

perfects the mechanism of a free and 

open market and a national market 

system by encouraging Market Makers 

to deploy capital more efficiently, 

which may improve market quality 

overall on the Exchange, by widening 

the intervals between strikes when 

applying the strike interval table to 

multiply listed equity options 

(excluding options on ETFs and Section 

107 Securities) that have an expiration 

date more than 21 days from the listing 

date. As described above, the Exchange 

requires Specialists and Market Makers 

to quote during a certain amount of time 

in the trading day and in a certain 

percentage of series in their assigned 

options classes to maintain liquidity in 

the market.34 With an increasing 

number of strikes due, in part, to tighter 

intervals being listed across options 

exchanges, Market Makers must expend 

their capital to ensure that they have the 

appropriate infrastructure to meet their 

quoting obligations on all options 

markets in which they are assigned in 

options classes. The Exchange believes 

that this proposal will widen the 

intervals between strikes listed on the 

Exchange, thereby reducing the number 

of weekly options listed on its market in 

later weeks in which Market Makers are 

required to quote and, in turn, allowing 

DPMs and Market Makers to expend 

their capital in the options market in a 

more efficient manner. 

The Exchange believes that limiting 

the permissible strikes for multiply 

listed equity options (excluding options 

on ETFs and Section 107 Securities) that 

have an expiration date more than 21 

days from the listing date will not 

significantly disrupt the market, as the 

majority of the volume traded in weekly 

options exists in options series which 

have an expiration date of 21 days or 

less. The proposal will limit the number 

of strikes listed in series of options 

without reducing the number of classes 

of options available for trading on the 

Exchange. The proposal allows the 

Exchange to determine the weekly strike 

intervals for multiply listed equity Short 

Term Option Series listed in the later 

weeks by taking into account customer 

demand for certain options classes by 

considering both the Share Price and the 

Average Daily Volume in the underlying 

security. The Exchange utilizes OCC 

Customer-cleared volume, as customer 

volume is an appropriate proxy for 

demand. Whereas non-Customer cleared 

OCC volume generally represents the 

supply side, the Exchange believes OCC 

Customer-cleared volume represents the 

majority of options volume executed on 

the Exchange, which, in turn, reflects 

the demands in the marketplace and is 

therefore intended to assist the 

Exchange in meeting customer demand 

by offering an appropriate number of 

strikes. 

The proposal is intended to remove 

certain strikes where there exist clusters 

of strikes whose characteristics closely 

resemble one another and, therefore, do 

not serve different trading needs, which 

currently results in less useful strikes. 

As such, the proposal protects investors 

and the general public by removing 

unnecessary choices for an options 

series, which the Exchange believes may 

improve market quality. The proposal 

seeks to reduce the number of strikes in 

the furthest weeklies, which generally 

have wider markets, and, therefore, 

lower market quality. The 

implementation of the Strike Interval 

table is intended to allow for greater 

spreads between strike intervals in 

multiply listed equity options where 

there is less volume as measured by the 

Average Daily Volume tiers. Therefore, 

the lower the Average Daily Volume, the 

wider the proposed spread between 

strike intervals, and the higher the 

Average Daily Volume (i.e., the options 

classes that contain the most liquid 

symbols and strikes), the narrower the 

proposed spread between strike 

intervals. Additionally, the proposed 

strike intervals are finer for lower-priced 

shares than higher-priced shares.35 As a 

result, the Exchange believes that, by 

limiting the permissible strikes for 

multiply listed equity options 

(excluding options on ETFs and Section 

107 Securities) that have an expiration 

date more than 21 days from the listing 

date pursuant to the proposed Strike 

Interval table, the proposal may improve 

overall market quality on the Exchange, 

which serves to protect investors and 

the general public. 

Further, utilizing the second trading 

day of a calendar quarter allows the 

Exchange to accumulate data regarding 

OCC Customer-cleared volume from the 

entire prior calendar quarter and allows 

the calculation of Average Daily Volume 

to account for trades executed on the 

last day of the previous calendar 

quarter, which will have settled by the 

second trading day.36 The Exchange 

believes that applying the previous 

calendar quarter for the calculation is 

appropriate to reduce the impact of 

unusual trading activity as a result of 

unique market events, such as a 

corporate action (i.e., it may result in a 

more reliable measure of Average Daily 

Volume than a shorter period). 

As stated, the proposal is 

substantively identical to the strike 

interval proposal recently submitted by 

BX and approved by the Commission.37


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36832 Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Notices 

38See BX Strike Interval Approval Order, supra 

note 18. 

39 15 U.S.C. 78s(b)(3)(A)(iii). 

40 17 CFR 240.19b–4(f)(6). 

41 In addition, Rule 19b–4(f)(6)(iii) requires the 

Exchange 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. 

42 17 CFR 240.19b–4(f)(6). 

43 17 CFR 240.19b–4(f)(6)(iii). 

44For purposes only of waiving the 30-day 

operative delay, the Commission also has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 

The Exchange believes that varied strike 

intervals will continue to offer market 

participants the ability to select the 

appropriate strike interval to meet that 

market participants’ investment 

objectives. 

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 does not believe that the 

proposed rule change will impose any 

burden on intramarket competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act 

as the proposed rule change limits the 

number of Short Term Option Series 

strikes available for quoting and trading 

on the Exchange for all market 

participants. Therefore, all market 

participants will equally be able to 

transact in options series in the strikes 

listed for trading on the Exchange. The 

proposal is intended to reduce the 

number of strikes for weekly options 

listed in later weeks without reducing 

the number of classes of options 

available for trading on the Exchange 

while also continuing to offer an 

appropriate number of strikes the 

Exchange believes will meet market 

participants’ investment objectives. 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on intermarket competition 

that is not necessary or appropriate in 

furtherance of the purposes of the Act 

as it only impacts the permissible strike 

intervals for certain options series listed 

on the Exchange. Additionally, another 

options exchange has recently 

implemented a substantively identical 

rule for listing Short Term Option Series 

strike intervals on its exchange, 

approved by the Commission.38 The 

proposal is a competitive response that 

will permit the Exchange to list the 

same series in multiply listed options as 

another options exchange. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The Exchange has filed the proposed 

rule change pursuant to Section 

19(b)(3)(A)(iii) 39 of the Act and Rule 

19b–4(f)(6) thereunder.40 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 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.41

A proposed rule change filed 

pursuant to Rule 19b–4(f)(6) under the 

Act 42 normally does not become 

operative for 30 days after the date of its 

filing. However, Rule 19b–4(f)(6)(iii) 43

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 asked 

the Commission to waive the 30-day 

operative delay so that the Exchange 

may implement the proposed rule 

change at the same time that all other 

options exchanges implement their 

respective rule changes. The 

Commission believes that waiver of the 

30-day operative delay is consistent 

with the protection of investors and the 

public interest because the proposed 

rule change is substantively identical to 

rules adopted by each other options 

exchange, and therefore the Exchange’s 

proposal does not raise any new or 

novel issues. Waiver of the operative 

delay will allow the Exchange to 

implement its new rule on the same 

timeline as the other options exchanges, 

and such coordinated implementation 

will reduce potential investor confusion 

and facilitate a harmonized approach to 

strike listings for options within the 

Short Term Option Series program that 

have an expiration date more than 21 

days from the listing date. Therefore, the 

Commission hereby waives the 

operative delay and designates the 

proposal as operative upon filing.44

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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NYSEAMER–2021–32 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSEAMER–2021–32. 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 (http://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 


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Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Notices 36833 

45 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3Capitalized terms not defined herein are defined 

in the Rules, available at https://www.dtcc.com/ 

legal/rules-and-procedures. 

4As provided in the Rules, the term ‘‘Participant’’ 

includes the term ‘‘Limited Participant’’ unless (i) 

the context otherwise requires or (ii) the Procedures 

otherwise provide. Section 1 of Rule 2, id. 

5Rule 2 relates to initial and ongoing 

requirements to become and continue to be a 

Participant and/or Pledgee, including information 

that DTC may require applicants or Participants to 

provide to DTC. Id. 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–NYSEAMER–2021–32, and 

should be submitted on or before 

August 3, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.45

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–14793 Filed 7–12–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92342; File No. SR–DTC– 

2021–011] 

Self-Regulatory Organizations; The 

Depository Trust Company; Notice of 

Filing of Proposed Rule Change 

Relating to Confidential Information, 

Market Disruption Events, and Other 

Changes 

July 7, 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 June 25, 

2021, The Depository Trust Company 

(‘‘DTC’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’) 

the proposed rule change as described 

in Items I, II and III below, which Items 

have been prepared by the clearing 

agency. The Commission is publishing 

this notice to solicit comments on the 

proposed rule change from interested 

persons. 

I. Clearing Agency’s Statement of the 

Terms of Substance of the Proposed 

Rule Change 

The proposed rule change consists of 

modifications to DTC’s Rules, Bylaws 

and Organization Certificate (the 

‘‘Rules’’) 3 to (i) revise certain provisions 

in the Rules relating to the 

confidentiality of information furnished 

by Participants 4 to DTC, (ii) require that 

each Participant maintain confidential 

information furnished by DTC or its 

affiliates in confidence, and restrict use 

and disclosure of such information, (iii) 

add certain officers who are allowed to 

determine that there is a Market 

Disruption Event pursuant to Rule 38 

and (iv) add a new Rule 38(A) to 

address situations in which it is 

necessary to disconnect a Participant, or 

third party service provider, or service 

bureau due to an imminent threat of 

harm to DTC, Participants and/or other 

market participants. Each of the 

proposed changes is described in greater 

detail below. 

II. Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

In its filing with the Commission, the 

clearing agency 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 

clearing agency has prepared 

summaries, set forth in sections A, B, 

and C below, of the most significant 

aspects of such statements. 

(A) Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

1. Purpose 

The proposed rule change consists of 

modifications to (i) revise certain 

provisions in the Rules relating to the 

confidentiality of information furnished 

by Participants to DTC, (ii) require that 

each Participant maintain confidential 

information furnished by DTC or its 

affiliates in confidence and restrict use 

and disclosure of such information, (iii) 

add certain officers who are allowed to 

determine that there is a Market 

Disruption Event pursuant to Rule 38 

and (iv) add a new Rule 38(A) to 

address situations in which it is 

necessary to disconnect a Participant, or 

third party service provider, or service 

bureau due to an imminent threat of 

harm to DTC, Participants and/or other 

market participants. Each of the 

proposed changes is described in greater 

detail below. 

(i) DTC Confidentiality Requirements 

Section 1 of Rule 2 5 contains 

provisions relating to confidentiality of 

information furnished by Participants to 

DTC (collectively, the ‘‘DTC 

Confidentiality Requirements’’). Each of 

the DTC Confidentiality Requirements 

provides that the rights of DTC to 

inspect books and records, or to be 

furnished with information, is subject to 

any applicable laws or rules, or 

regulations of regulatory bodies having 

jurisdiction over the Participant, that 

relate to confidentiality of records. DTC 

is proposing to update the DTC 

Confidentiality Requirements because 

such provisions (i) may result in 

unequal treatment of Participants due to 

differing laws or regulations of 

regulatory bodies, (ii) may result in a 

potential conflict of laws where rules or 

regulations governing a regulatory body 

of a Participant differ from the laws 

applicable to DTC, or a Participant has 

multiple regulatory bodies whose rules 

conflict, (iii) are burdensome as they 

require DTC to track the rules and 

regulations of each regulatory body of 

its Participants to determine what 

applicable laws or rules or regulations 

of regulatory bodies that relate to 

confidentiality of records affect its rights 

to receive information and (iv) are 

unnecessary as DTC has sufficient 

protections in place relating to 

protection and confidentiality of 

Participant data. 

The regulatory bodies that have 

jurisdiction over Participants differ by 

Participant depending on certain criteria 

of each Participant, including the type 

of entity of the Participant, where the 

Participant was organized, the types of 

businesses in which the Participant 

engages and where the Participant is 

doing business. In addition, many 

Participants are regulated by more than 

one regulatory body. As a result, a 

requirement to maintain confidentiality 

standards for information provided by a 

Participant or the right to receive 

information based on the regulatory 

body or bodies that regulate such 

Participant result in varying standards 

of confidentiality for Participants that 

are regulated by different regulatory 

bodies. Such varying standards may 

result in unequal treatment of 

Participants due to differing laws or 

regulations of the regulatory body or 

bodies governing such Participants. In 

addition, such varying standards may 

result in a potential conflict of laws 

where rules or regulations governing a 

regulatory body of a Participant differ 

from the laws applicable to DTC or an 

entity that has multiple regulatory 

bodies whose rules conflict. 

DTC believes that it is unnecessarily 

burdensome to determine the rules and 

regulations of each of the regulatory 

bodies that regulate its Participants. 


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