Federal Register / Vol. 86, No. 148 / Thursday, August 5, 2021 / Notices 42945 

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

2 17 CFR 240.19b–4. 

in reliance on section 3(c)(1) of the 1940 

Act. 

Filing Dates: The application was 

filed on February 16, 2021 and amended 

on July 8, 2021. 

Applicant’s Address: Brad.Rodgers@

protective.com. 

For the Commission, by the Division of 

Investment Management, pursuant to 

delegated authority. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–16658 Filed 8–4–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92535; File No. SR–BX– 

2021–032] 

Self-Regulatory Organizations; Nasdaq 

BX, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend the Options 4 

Listing Rules 

July 30, 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 July 20, 

2021, Nasdaq BX, Inc. (‘‘BX’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I, 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 

BX’s Rules at Options 2, Section 5, 

Market Maker Quotations; Options 4, 

Options Listing Rules; and Options 4A, 

Section 12, Terms of Index Options 

Contracts. This proposal also reserves 

Options 4C. Finally, the Exchange 

proposes to reserve some sections with 

the Equity Rules. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/bx/rules, at the principal office 

of the Exchange, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend the 

Options 4, Options Listing Rules, to 

conform BX’s Options 4 Listing Rules to 

Nasdaq ISE, LLC’s (‘‘ISE’’) Options 4 

Listing Rules. The Exchange also 

proposes to amend BX Options 4A, 

Section 12, Terms of Index Options 

Contracts and reserve BX Options 4C. 

Finally, the Exchange also proposes to 

amend Options 2, Section 5, Market 

Maker Quotations to relocate rule text 

concerning bid/ask differentials for 

long-term options contracts from BX 

Options 4 and Options 4A, similar to 

ISE. 

The Exchange also proposes a 

technical amendment to General 9, 

Section 51, Research Analysts and 

remove stray periods through Options 4. 

Each rule change is described below. 

Options 4, Options Listing Rules 

Conforming BX’s Options 4 Listing 

Rules to that of ISE Options 4 is part of 

the Exchange’s continued effort to 

promote efficiency in the manner in 

which it administers its rules. The 

Exchange proposes to amend these rules 

to conform to ISE Options 4 Rules. 

Section 1. Designation of Securities 

The Exchange proposes to replace the 

current rule text of Options 4, Section 

1 which states, 

Securities traded on the Exchange are 

options contracts, each of which is 

designated by reference to the issuer of 

the underlying security or name of 

underlying foreign currency, expiration 

month or expiration date, exercise price 

and type (put or call). 

with the following rule text, 

The Exchange trades options 

contracts, each of which is designated 

by reference to the issuer of the 

underlying security, expiration month 

or expiration date, exercise price and 

type (put or call). 

The Exchange proposes to amend this 

sentence within Options 4, Section 1 to 

conform to ISE Options 4, Section 1. 

The revised wording does not 

substantively amend the paragraph. 

Section 2. Rights and Obligations of 

Holders and Writers 

The Exchange proposes to replace the 

current rule text of Options 4, Section 

1 which states, 

Subject to the provisions of this 

Chapter, the rights and obligations of 

holders and writers of option contracts 

of any class of options dealt in on the 

Exchange shall be as set forth in the 

Rules of the Clearing Corporation. 

with the following rule text, 

The rights and obligations of holders 

and writers shall be as set forth in the 

Rules of the Clearing Corporation. 

The Exchange proposes to amend this 

sentence within Options 4, Section 2 to 

conform to ISE Options 4, Section 1. 

The revised wording does not 

substantively amend the paragraph. 

Section 3. Criteria for Underlying 

Securities 

Options 4, Section 3 of the Options 

Listing Rules is being updated to 

conform to ISE Options 4, Section 3. 

The Exchange proposes to amend 

Options 4, Section 3(a)(i) and (ii) to 

conform to ISE Options 4, Section 

3(a)(1) and (2) by changing the ‘‘i. and 

ii.’’ to ‘‘(1) and (2),’’ respectively. Also, 

the Exchange proposes to remove the 

phrase ‘‘with the SEC’’ within current 

BX Options 4, Section 3(a)(i). These 

amendments are non-substantive. 

The Exchange proposes to amend 

Options 4, Section 3(b) to reword the 

rule text to ISE Options 4, Section 3(b). 

The Exchange proposes to replace the 

current rule text of Options 4, Section 

3(b) which states, 

In addition, the Exchange shall from 

time to time establish standards to be 

considered in evaluating potential 

underlying securities for the Exchange 

options transactions. There are many 

relevant factors which must be 

considered in arriving at such a 

determination, and the fact that a 

particular security may meet the 

standards established by the Exchange 

does not necessarily mean that it will be 

selected as an underlying security. The 

Exchange may give consideration to 

maintaining diversity among various 

industries and issuers in selecting 

underlying securities. Notwithstanding 

the foregoing, an underlying security 

will not be selected unless: 


khammond on DSKJM1Z7X2PROD with NOTICES
42946 Federal Register / Vol. 86, No. 148 / Thursday, August 5, 2021 / Notices 

3The proposed changes replace the word 

‘‘standards’’ with ‘‘guidelines,’’ insert ‘‘Options 4’’ 

before ‘‘Section 3,’’ and remove 2 extraneous uses 

of ‘‘this.’’ Similar replacements are made 

throughout current Options 4, Section 3(c), 

including amending a capitalized ‘‘Paragraph.’’ 

4The proposed changes replace the word 

‘‘standards’’ with ‘‘guidelines,’’ insert ‘‘Rule’’ 

instead of ‘‘Section 3,’’ and remove an unnecessary 

‘‘or.’’ 

5The amendment to current Options 4, Section 

3(i)(B)(4) to add, ‘‘. . . which the Exchange-Traded 

Fund shares are based . . .’’ makes clear that this 

text applies to Exchange-Traded Fund shares. Also 

the word ‘‘indexes’’ is being changes to ‘‘indices’’ 

within this paragraph and ‘‘similar entity’’ is being 

relocated within the paragraph. 

with the following rule text, 

In addition, the Exchange shall from 

time to time establish guidelines to be 

considered in evaluating potential 

underlying securities for Exchange 

options transactions. There are many 

relevant factors which must be 

considered in arriving at such a 

determination, and the fact that a 

particular security may meet the 

guidelines established by the Exchange 

does not necessarily mean that it will be 

selected as an underlying security. 

Further, in exceptional circumstances 

an underlying security may be selected 

by the Exchange even though it does not 

meet all of the guidelines. The Exchange 

may also give consideration to 

maintaining diversity among various 

industries and issuers in selecting 

underlying securities. Notwithstanding 

the foregoing, however absent 

exceptional circumstances, an 

underlying security will not be selected 

unless: 

The new rule text permits the 

Exchange, in exceptional circumstances, 

to select an underlying security even 

though it does not meet all of the 

guidelines. Today, the Exchange may 

establish guidelines to be considered in 

evaluating potential underlying 

securities for Exchange options 

transactions. Providing BX with the 

same ability to select an underlying 

security even though it does not meet all 

of the guidelines as ISE will permit BX 

to list similar options as ISE for 

competitive purposes. The proposal to 

replace the term ‘‘standards’’ with 

‘‘guidelines’’ within paragraph 3(b) is 

non-substantive. 

The Exchange is amending numbering 

within Options 4, Section 3(b) as well 

as removing extraneous rule text within 

current Options 4, Section 3(b)(iii), 

namely ‘‘or Rules thereunder.’’ The 

Exchange proposes to relocate Options 

4, Section 3(k) into new Options 4, 

Section 3(b)(6) without change. This 

would align BX Options 4, Section 

3(b)(6) with ISE Options 4, Section 

3(b)(6). This provision states, 

Notwithstanding the requirements set 

forth in Paragraphs 1, 2, 4 and 5 above, 

the Exchange may list and trade an 

options contract if (i) the underlying 

security meets the guidelines for 

continued approval in Options 4, 

Section 4; and (ii) options on such 

underlying security are traded on at 

least one other registered national 

securities exchange. 

The Exchange proposes to renumber 

BX Options 4, Section 3(c) and make 

minor amendments to rule text within 

current Options 4, Section 3(c)(ii), (iii), 

(iv) and (v), Sections 3(d), 3(f) and 3(g) 

to conform the rule text to ISE Options 

4, Section 3(c)(ii), (iii), (iv) and (v), 

Sections 3(d), 3(f) and 3(g). The 

proposed changes are non-substantive.3

The Exchange proposes to amend an 

‘‘up’’ to ‘‘on’’ within BX Options 4, 

Section 3(d). This proposed change is 

non-substantive. 

The Exchange proposes nonsubstantive amendments to amend BX 

Options 4, Section 3(f) and (g) 4 in 

addition to conforming the numbering 

to ISE Options 4, Section 3(f) and (g). 

The Exchange proposes to relocate 

current BX Options 4, Section 3(h) 

describing a market information sharing 

agreement to proposed BX Options 4, 

Section 3(i). This text is currently 

located within ISE rules at Options 4, 

Section 3(i). 

Current BX Options 4, Section 3(i) is 

being re-lettered as proposed Options 4, 

Section 3(h). The Exchange proposes to 

add the defined term ‘‘Financial 

Instruments’’ within Options 4, Section 

3(h) and also account for money market 

instruments, U.S. government securities 

and repurchase agreements, defined by 

the term ‘‘Money Market Instruments’’ 

similar to ISE Options 4, Section 3(h). 

The addition of money market 

instruments, U.S. government securities 

and repurchase agreements as securities 

deemed appropriate for options trading 

will make clear that these agreements 

are included in the acceptable 

securities. The Exchange notes that this 

rule text is clarifying in nature and will 

more explicitly provide for money 

market instruments, U.S. government 

securities and repurchase agreements as 

a separate category from what is being 

defined as ‘‘Financial Instruments’’ with 

this proposal. Today, these instruments 

are eligible as securities deemed 

appropriate for options trading. The 

remainder of the changes are nonsubstantive in nature and simply 

conform the location of words similar to 

ISE.5 The Exchange also proposes to 

remove the following products from 

Options 4, Section 3(h): The ETFS 

Silver Trust, the ETFS Palladium Trust, 

the ETFS Platinum Trust or the Sprott 

Physical Gold Trust. The Exchange no 

longer lists these products and proposes 

to remove them the products from its 

listing rules. The Exchange will file a 

proposal with the Commission if it 

determines to list these products in the 

future. 

The Exchange will file a proposal 

with the Commission if it determines to 

list these products in the future. Finally, 

the Exchange proposes to amend 

Options 4, Section 3(h) by removing the 

rule text at the end of the paragraph 

which provides, ‘‘all of the following 

conditions are met.’’ Paragraph (h) 

would simply end with ‘‘provided that:’’ 

and direct market participants to 

subparagraphs (1) and (2). 

The Exchange proposes to capitalize 

‘‘the’’ at the beginning of Options 4, 

Section 3(h)(1) and remove ‘‘; and’’ at 

the end of the paragraph and instead at 

a period so that subparagraphs (1) and 

(2) are not linked, but rather read 

independently. Today, Options 4, 

Section 3(h)(1) applies to all ExchangeTraded Fund Shares. Similar to ISE 

Options 4, Section 3(h)(2), the Exchange 

proposes to clarify that Options 4, 

Section 3(h)(2) applies to only 

international or global Exchange-Traded 

Fund Shares. Specifically, the Exchange 

proposes to amend Options 4, Section 

3(h)(2) to provide, ‘‘Exchange-Traded 

Fund Shares based on international or 

global indexes, or portfolios that include 

non-U.S. securities, shall meet the 

following criteria.’’ ISE Options 4, 

Section 3(h) has the identical text. 

Proposed Options 4, Sections 3(h) 

generally concerns securities deemed 

appropriate for options trading. The 

proposed new rule text adds language 

stating that subparagraph (h)(2) of 

Options 4, Section 3 applies to the 

extent the Exchange-Traded Fund Share 

is based on international or global 

indexes, or portfolios that include nonU.S. securities. This language is 

intended to serve as a guidepost and 

clarify that (1) subparagraph (h)(2) does 

not apply to an Exchange-Traded Fund 

Shares based on a U.S. domestic index 

or portfolio, and (2) subparagraph (h)(2) 

includes Exchange-Traded Fund Shares 

that track a portfolio and do not track 

an index. 

The Exchange proposes to amend 

Options 4, Section 3(h)(2)(A) to remove 

the phrase ‘‘for series of portfolio 

depositary receipts and index fund 

shares based on international or global 

indexes,’’. Today, Options 4, Section 


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6Subsection (h)(i) concerns passive ExchangeTraded Fund Shares. Subsection (h)(1) provides, 

‘‘represent interests in registered investment 

companies (or series thereof) organized as open-end 

management investment companies, unit 

investment trusts or similar entities that hold 

portfolios of securities and/or financial instruments, 

including, but not limited to, stock index futures 

contracts, options on futures, options on securities 

and indices, 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’’) comprising or 

otherwise based on or representing investments in 

broad-based indexes or portfolios of securities and/ 

or Financial Instruments and Money Market 

Instruments (or that hold securities in one or more 

other registered investment companies that 

themselves hold such portfolios of securities and/ 

or Financial Instruments and Money Market 

Instruments).’’ 

7Subsection (h)(v) concerns active ExchangeTraded Fund Shares. Subsection (h)(v) Provides, 

‘‘represents an interest in a registered investment 

company (‘‘Investment Company’’) organized as an 

open-end management company or similar entity, 

that invests in a portfolio of securities selected by 

the Investment Company’s investment adviser 

consistent with the Investment Company’s 

investment objectives and policies, which is issued 

in a specified aggregate minimum number in return 

for a deposit of a specified portfolio of securities 

and/or a cash amount with a value equal to the next 

determined net asset value (‘‘NAV’’), and when 

aggregated in the same specified minimum number, 

may be redeemed at a holder’s request, which 

holder will be paid a specified portfolio of 

securities and/or cash with a value equal to the next 

determined NAV (‘‘Managed Fund Share’’). 

8The amendment to current Options 4, Section 

3(j) replace the word ‘‘standards’’ with 

‘‘guidelines.’’ 

9The Exchange proposes to remove ‘‘Section 4’’, 

lowercase the term ‘‘Customer,’’ add ‘‘options 4’’ 

and remove ‘‘thereof’’ within Options 4, Section 

4(d)–(f). 

3(h), subparagraphs (h)(1) 6 and (h)(v) 7

permit the Exchange to list options on 

Exchange-Traded Fund Shares based on 

generic listing standards for portfolio 

depositary receipts and index fund 

shares without applying component 

based requirements in subparagraphs 

(h)(2)(B)–(D). By removing the proposed 

rule text, the Exchange would make 

clear that subparagraph (h)(2)(A) applies 

to Exchange-Traded Fund Shares based 

on international or global indexes, or 

portfolios that include non-U.S. 

securities, that are listed pursuant to 

generic listing standards and comply 

with Options 4, Section 3(h) and 

subparagraph (h)(1). The identical rule 

text exists within ISE Options 4, Section 

3(h)(2)(A). 

The Exchange also proposes to amend 

the term ‘‘comprehensive surveillance 

agreement’’ within Options 4, Section 

3(h)(2) (A)–(D) to instead provide 

‘‘comprehensive surveillance sharing 

agreement.’’ This amendment will bring 

greater clarity to the term. Further, the 

Exchange proposes to add the phrase ‘‘if 

not available or applicable, the 

Exchange-Traded Fund’s’’ within 

Options 4, Section 3(h)(2)(B), (C), and 

(D) to clarify that when component 

securities are not available, the portfolio 

of securities upon which the ExchangeTraded Fund Share is based can be used 

instead. The Exchange notes that ‘‘not 

available’’ is intended for cases where 

the Exchange does not have access to 

the index components, in those cases 

the Exchange would look to the 

portfolio components. The term ‘‘not 

applicable’’ is intended if the fund is 

active and does not track an index and 

only the portfolio is available. These 

amendments will conform the rule text 

to ISE Options 4, Section 3(h)(2)(A)–(D). 

The Exchange also proposes to 

wordsmith Options 4, Section 3(h)(2)(B) 

to amend the phrase to provide, ‘‘any 

non-U.S. component securities of an 

index on which the Exchange-Traded 

Fund Shares are based or if not available 

or applicable, the Exchange-Traded 

Fund’s portfolio of securities that are 

not subject to comprehensive 

surveillance sharing agreements do not 

in the aggregate represent more than 

50% of the weight of the index or 

portfolio;’’. Finally, the Exchange 

proposes to wordsmith Options 4, 

Section 3(h)(2)(C) and (D) to relocate the 

phrase ‘‘on which the Exchange-Traded 

Fund Shares are based’’ and add ‘‘or 

portfolio’’ to bring greater clarity to the 

rule text by conforming the rule text of 

(C) and (D) to the language within (B). 

The Exchange believes that the revised 

wording will bring greater clarity to the 

rule text and conform the rule text to 

ISE Options 4, Section 3(h)(2)(B)–(D). 

The Exchange proposes a nonsubstantive technical amendment to 

Options 4, Section 3(C)(2)(A)(ii) to 

correct a typographical error by 

changing a ‘‘than’’ to a ‘‘that.’’ The 

Exchange proposes a non-substantive 

technical amendment to Options 4, 

Section 3(h)(1) to change ‘‘In’’ to ‘‘in.’’ 

As noted above BX Options 4, Section 

3(h), which describes a market 

information sharing agreement, was 

relocated to proposed Options 4, 

Section 3(i), similar to ISE Options 4, 

Section 3(i). 

The Exchange proposes to amend 

Options 4, Section 3(j) to conform the 

rule text to ISE Options 4, Section 3(j). 

The proposed changes are nonsubstantive.8

As noted, above, Options 4, Section 

3(k) was relocated to new Options 4, 

Section 3(b)(6). 

The Exchange proposes to remove the 

header ‘‘Index-Linked Securities’’ 

within Options 4, Section 3(l), and reletter Options 4, Section 3(l)(i) as 

Section 3(k). Proposed Options 4, 

Section 3(k) has non-substantive 

numbering and citation amendments. 

Options 4, Section 3(m) is being 

removed as BX does not list U.S. DollarSettled Foreign Currency Options. 

Section 4. Withdrawal of Approval of 

Underlying Securities 

The Exchange proposes to remove the 

first sentence of Options 4, Section 4(a), 

which provides, ‘‘If put or call options 

contracts with respect to an underlying 

security are approved for listing and 

trading on the Exchange, such approval 

shall continue in effect until such 

approval is affirmatively withdrawn by 

the Exchange.’’ This sentence is 

unnecessary as the second sentence 

within Options 4, Section 4(a) makes 

clear that approval continues until it 

does not meet the requirements. Also, 

the Exchange proposes to add the 

following text to the end of this 

paragraph: ‘‘When all options contracts 

with respect to any underlying security 

that is no longer approved have expired, 

the Exchange may make application to 

the SEC to strike from trading and 

listing all such options contracts.’’ This 

text makes clear that options contracts 

that are no longer approved will not be 

listed. The remainder of the changes to 

Options 4, Section 4(a) are nonsubstantive. This proposal is intended 

to conform BX’s Options 4, Section 4(a) 

with ISE Options 4, Section 4(a). 

The Exchange proposes to amend 

Options 4, Section 4(b) to add ‘‘Absent 

exceptional circumstances . . .’’ at the 

beginning of the section. This phrase 

adds clarity to the rule text. The 

remainder of the numbering changes as 

well as capitalization are nonsubstantive and intended to conform 

BX’s Options 4, Section 4(b) with ISE 

Options 4, Section 4(b). The Exchange 

also proposes to remove reserved 

sections. 

Options 4, Section 4(c), which is 

currently reserved, is proposed to be 

deleted and current Options 4, Section 

4(d) is proposed to be re-lettered as ‘‘c’’. 

Minor non-substantive conforming 

changes are proposed to current Options 

4, Section 4(d)–(f).9

The Exchange proposes to amend 

current Options 4, Section 4(h) to reletter it ‘‘g’’ and replace ‘‘security’’ with 

‘‘Exchange-Traded Fund Shares’’ similar 

to ISE Options 4, Section 4(g). The 

Exchange proposes to add halt or 

suspension as other circumstances in 

which the Exchange shall not open for 

trading any additional series of option 

contracts of the class to clarify that this 

scenario may also exist. The other 


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10The Exchange proposes to amend Options 4, 

Section 4(h) to add ‘‘Options 4’’ and replace 

‘‘Section 4’’ with ‘‘Rule;’’ and replace an ‘‘or’’ with 

an ‘‘and.’’ 

11The term Options 4 is being relocated within 

the proposed new paragraph (h). Also, the term 

‘‘Rule’’ is being used within proposed new 

paragraph (h)(1) instead of ‘‘Section 4,’’ and 

‘‘Section 3.’’ ‘‘Upon annual review’’ is being 

removed from proposed new paragraph (h)(2). 

12Options 4, Section 4(b), as amended, 

establishes requirements for continued listing, 

similar to ISE. See proposed Phlx Options 3, 

Section 4(b) which provides, ‘‘Absent exceptional 

circumstances, an underlying security will not be 

deemed to meet the Exchange’s requirements for 

continued approval whenever any of the following 

occur: (1) There are fewer than 6,300,000 shares of 

the underlying security held by persons other than 

those who are required to report their security 

holdings under Section 16(a) of the Exchange Act. 

(2) There are fewer than 1,600 holders of the 

underlying security. (3) The trading volume (in all 

markets in which the underlying security is traded) 

has been less than 1,800,000 shares in the preceding 

twelve (12) months. (4) The underlying security 

ceases to be an ‘‘NMS stock’’ as defined in Rule 600 

of Regulation NMS under the Exchange Act. (5) If 

an underlying security is approved for options 

listing and trading under the provisions of Options 

4, Section 3(c), the trading volume of the Original 

Security (as therein defined) prior to but not after 

the commencement of trading in the Restructure 

Security (as therein defined), including ‘‘whenissued’’ trading, may be taken into account in 

determining whether the trading volume 

requirement of (3) of this paragraph (b) is satisfied.’’ 

13See ISE Options 4, Section 4 and Cboe Rule 4.4. 

proposed changes to current Options 4, 

Section 4(h) are non-substantive.10

The Exchange proposes to amend 

current Options 4, Section 4(i) to reletter it ‘‘h’’ and add ‘‘Absent 

exceptional circumstances, securities 

. . .’’ at the beginning of the section. 

This phrase adds clarity to the rule text. 

The remainder of the numbering 

changes are non-substantive 11 and 

conform current BX’s Options 4, Section 

4(i) with ISE Options 4, Section 4(h). 

The Exchange proposes to adopt new 

Options 4, Section 4(i) similar to ISE, 

Options 4, Section 4(i). The proposed 

new section would provide, 

For Holding Company Depositary 

Receipts (HOLDRs), the Exchange will 

not open additional series of options 

overlying HOLDRs (without prior 

Commission approval) if: 

(1) The proportion of securities 

underlying standardized equity options 

to all securities held in a HOLDRs trust 

is less than 80% (as measured by their 

relative weightings in the HOLDRs 

trust); or 

(2) less than 80% of the total number 

of securities held in a HOLDRs trust 

underlie standardized equity options. 

Current Options 4, Section 4 does not 

describe the withdrawal of HOLDRs. 

This new text, similar to ISE, would 

provide for provisions wherein the 

Exchange will not open additional 

series of options overlying HOLDRs. 

The Exchange proposes to delete 

current Options 4, Section 4(j), which is 

reserved, as well as the lettering for 

Options 4, Section 4(k) which states, 

‘‘Index Linked Securities.’’ The next 

existing paragraph is proposed to be 

Options 4, Section 4(j). The remainder 

of the numbering changes to this section 

are non-substantive and conform 

proposed Options 4, Section 4(j) with 

ISE Options 4, Section 4(j). 

The Exchange proposes to remove 

Options 4, Section 4(l) related to 

inadequate volume delisting. To remain 

competitive with other options markets, 

the Exchange proposes to adopt the 

same obligations for continuance of 

trading.12 Also, pursuant to proposed 

new Options 4, Section 5(e) the 

Exchange will announce securities that 

have been withdrawn. With this 

proposal, the Exchange would eliminate 

the requirement that an option must be 

trading for more than 6 months. The 

Exchange notes that this condition is 

not present on other options markets 

such as ISE and Cboe Exchange, Inc. 

(‘‘Cboe’’).13 This also applies to the 

requirement that the average daily 

volume of the entire class of options 

over the last six (6) month period was 

less than twenty (20) contracts. The 

Exchange notes that BX’s requirements 

are different than other options markets. 

To remain competitive the Exchange 

proposes to adopt the same standards as 

ISE and Cboe to remain competitive in 

order that it may list options similar to 

other markets. 

While the Exchange may in the future 

determine to delist an option that is 

singly listed, the Exchange proposes to 

remove the rule text which provides 

that ‘‘If the option is singly listed only 

on the Exchange, the Exchange will 

cease to add new series and may delist 

the class of options when there is no 

remaining open interest.’’ This rule text 

does not exist on ISE and Cboe. The 

Exchange today provides notification of 

a delisting to all Participants so 

therefore it is not necessary to retain the 

provisions within (b)(2). Also, proposed 

new Options 4, Section 4(e) establishes 

the rules by which the Exchange will 

announce securities that have been 

withdrawn. The rule text within 

Options 4, Section 4(b), as amended to 

conform to ISE rule text, will continue 

to govern the continued approval of 

options on the Exchange. 

The reference to Options 4, Section 

4(m) is proposed to be deleted. The 

provision that is currently Options 4, 

Section 4(m) is proposed to become 

proposed Supplementary Material .01 to 

Options 4, Section 6 with a minor nonsubstantive change to the current rule 

text to capitalize ‘‘rules.’’ 

Section 5. Series of Options Contracts 

Open for Trading 

The Exchange proposes to update 

citations within Options 4, Section 5 to 

reflect the replacement of current rule 

text. These changes are non-substantive. 

Section 7. Adjustments 

The Exchange proposes nonsubstantive amendments to Options 4, 

Section 7. The current text states, 

Options contracts shall be subject to 

adjustments in accordance with the 

Rules of the Clearing Corporation. The 

Exchange will announce adjustments, 

and such changes will be effective for 

all subsequent transactions in that series 

at the time specified in the 

announcement. 

The Exchange proposes to instead 

provide, 

Options contracts shall be subject to 

adjustments in accordance with the 

Rules of the Clearing Corporation. When 

adjustments have been made, the 

Exchange will announce that fact, and 

such changes will be effective for all 

subsequent transactions in that series at 

the time specified in the announcement. 

The proposal conforms BX Options 4, 

Section 7 with ISE Options 4, Section 7. 

Section 8. Long-Term Options Contracts 

The Exchange proposes to conform 

the BX Options 4, Section 8 to ISE 

Options 4, Section 8. The proposed 

changes are non-substantive. BX’s 

current rule text provides that with 

respect to long-term options series, bid/ 

ask differential rules do not apply. The 

Exchange proposes to add this rule text 

to Options 4, Section 5(d)(2) within new 

‘‘A’’ as the bid/ask differential 

requirements can be found within this 

rule. The Exchange also proposes to add 

a new sentence to Options 4, Section 

8(a) to refer to Options 4, Section 

5(d)(2)(A), which states, ‘‘Bid/ask 

differentials for long-term options 

contracts are specified within Options 3, 

Section 5(d)(2)(A)’’ for ease of reference. 

Section 9. Limitation on the Liability of 

Index Licensors for Options on Fund 

Shares 

The Exchange proposes to remove 

current Options 4, Section 9, U.S. 

Dollar-Settled Foreign Currency Option 

Closing Settlement Value as BX does not 

list U.S. Dollar-Settled Foreign Currency 

Options. 

The Exchange proposes to adopt a 

new Section 9, titled ‘‘Limitation on the 

Liability of Index Licensors for Options 

on Fund Shares’’ identical to ISE 


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14See Securities Exchange Act Release No. 45817 

(April 24, 2002), 67 FR 21785 (May 1, 2002) (SR– 

CBOE–2002–19) (Notice of Filing and Immediate 

Effectiveness of Proposed Rule Change by the 

Chicago Board Options Exchange, Incorporated To 

Amend Its Rules Relating to the Limitation of 

Liability for Index Licensors) and 14729 (March 19, 

2003), 68 FR 14729 (March 26, 2003) (SR–ISE– 

2003–09) (Notice of Filing and Immediate 

Effectiveness of Proposed Rule Change by 

International Securities Exchange, Inc., Relating to 

Limiting the Liability of Index Licensors for 

Options on Fund Shares). 

15See Securities Exchange Act Release No. 71092 

(December 17, 2013), 78 FR 77510 (December 23, 

2013) (SR–ISE–2013–61) (Notice of Filing and 

Immediate Effectiveness of Proposed Rule Change 

Relating to Back-Up Trading Arrangements). 

Options 4, Section 9. ISE and Cboe have 

similar provisions.14 The new rule 

would provide, 

(a) The term ‘‘index licensor’’ as used 

in this Rule refers to any entity that 

grants the Exchange a license to use one 

or more indexes or portfolios in 

connection with the trading of options 

on Exchange-Traded Fund Shares (as 

defined in Options 4, Section 3(h)). 

(b) No index licensor with respect to 

any index or portfolio underlying an 

option on Exchange-Traded Fund 

Shares traded on the Exchange makes 

any warranty, express or implied, as to 

the results to be obtained by any person 

or entity from the use of such index or 

portfolio, any opening, intra-day or 

closing value therefor, or any data 

included therein or relating thereto, in 

connection with the trading of any 

option contract on Exchange-Traded 

Fund Shares based thereon or for any 

other purpose. The index licensor shall 

obtain information for inclusion in, or 

for use in the calculation of, such index 

or portfolio from sources it believes to 

be reliable, but the index licensor does 

not guarantee the accuracy or 

completeness of such index or portfolio, 

any opening, intra-day or closing value 

therefor, or any data included therein or 

related thereto. The index licensor 

hereby disclaims all warranties of 

merchantability or fitness for a 

particular purpose or use with respect to 

any such index or portfolio, any 

opening, intra-day or closing value 

therefor, any data included therein or 

relating thereto, or any option contract 

on Exchange-Traded Fund Shares based 

thereon. The index licensor shall have 

no liability for any damages, claims, 

losses (including any indirect or 

consequential losses), expenses or 

delays, whether direct or indirect, 

foreseen or unforeseen, suffered by any 

person arising out of any circumstance 

or occurrence relating to the person’s 

use of such index or portfolio, any 

opening, intra-day or closing value 

therefor, any data included therein or 

relating thereto, or any option contract 

on Exchange-Traded Fund Shares based 

thereon, or arising out of any errors or 

delays in calculating or disseminating 

such index or portfolio. 

Proposed Section 9(a) defines the 

term ‘‘index licensor’’ as any entity that 

grants the Exchange a license to use one 

or more indexes or portfolios in 

connection with the trading of options 

on Exchange-Traded Fund Shares (as 

defined in Options 4, Section 3(h)). 

Proposed Options 4, Section 9(b) 

provides that no index licensor with 

respect to any index or portfolio 

underlying an option on ExchangeTraded Fund Shares traded on the 

Exchange makes any warranty, express 

or implied, as to the results to be 

obtained by any person or entity from 

the use of such index or portfolio, any 

opening, intra-day or closing value 

therefor, or any data included therein or 

relating thereto, in connection with the 

trading of any option contract on 

Exchange-Traded Fund Shares based 

thereon or for any other purpose. The 

index licensor will obtain information 

for inclusion in, or for use in the 

calculation of, such index or portfolio 

from sources it believes to be reliable, 

but the index licensor does not 

guarantee the accuracy or completeness 

of such index or portfolio, any opening, 

intra-day or closing value therefor, or 

any data included therein or related 

thereto. The index licensor disclaims all 

warranties of merchantability or fitness 

for a particular purpose or use with 

respect to any such index or portfolio, 

any opening, intra-day or closing value 

therefor, any data included therein or 

relating thereto, or any option contract 

on Exchange-Traded Fund Shares based 

thereon. The index licensor will have no 

liability for any damages, claims, losses 

(including any indirect or consequential 

losses), expenses or delays, whether 

direct or indirect, foreseen or 

unforeseen, suffered by any person 

arising out of any circumstance or 

occurrence relating to the person’s use 

of such index or portfolio, any opening, 

intra-day or closing value therefor, any 

data included therein or relating thereto, 

or any option contract on ExchangeTraded Fund Shares based thereon, or 

arising out of any errors or delays in 

calculating or disseminating such index 

or portfolio. 

Section 10. Back-Up Trading 

Arrangements 

The Exchange proposes to add a new 

rule to Options 4, Section 10, titled 

‘‘Back-Up Trading Arrangements.’’ 

Section 10 is currently reserved. This 

proposed rule is identical to ISE 

Options 4, Section 10.15 This rule would 

permit BX to enter into arrangements 

with one or more other exchanges (each 

a ‘‘Back-up Exchange’’) to permit BX 

and its Participants to use a portion of 

a Back-up Exchange’s facilities to 

conduct the trading of BX exclusively 

listed options in the event of a Disabling 

Event, and permits BX to provide 

trading facilities at BX for another 

exchange’s exclusively listed options if 

that exchange (a ‘‘Disabled Exchange’’) 

is prevented from trading due to a 

Disabling Event. Also, the proposed rule 

would permit BX to enter into 

arrangements with a Back-up Exchange 

to provide for the listing and trading of 

BX singly listed options by the Back-up 

Exchange if BX’s facility becomes 

disabled, and conversely provide for the 

listing and trading by BX of the singly 

listed options of a Disabled Exchange. 

The back-up trading arrangements 

contemplated by Options 4, Section 10 

represent BX’s immediate plan to ensure 

that its exclusively listed and singly 

listed options will have a trading venue 

if a catastrophe renders its primary 

facility inaccessible or inoperable. 

Section 10(a) describes the back-up 

trading arrangements that would apply 

if BX were the Disabled Exchange. An 

‘‘exclusively listed option’’ is defined 

within Section 10(a)(1)(i) to mean an 

option that is listed exclusively by an 

exchange (because the exchange has an 

exclusive license to use, or has 

proprietary rights in, the interest 

underlying the option). Proposed 

paragraph(a)(1)(ii) provides that the 

facility of the Back-up Exchange used by 

BX to trade some or all of BX’s 

exclusively listed options will be 

deemed to be a facility of BX, and such 

option classes shall trade as listings of 

BX. Since the trading of BX exclusively 

listed options will be conducted using 

the systems of the Back-up Exchange, 

proposed paragraph (a)(1)(iii) provides 

that the trading of BX listed options on 

BX’s facility at the Back-up Exchange 

shall be conducted in accordance with 

the rules of the Back-up Exchange, and 

proposed paragraph (a)(1)(iv) provides 

that the Back-up Exchange has agreed to 

perform the related regulatory functions 

with respect to such trading, in each 

case except as BX and the Back-up 

Exchange may specifically agree 

otherwise. The Back-up Exchange rules 

that govern trading on BX’s facility at 

the Back-up Exchange shall be deemed 

to be BX rules for purposes of such 

trading. Proposed paragraph (a)(1)(v) 

provides that BX shall have the right to 

designate its members that will be 

authorized to trade BX exclusively 

listed options on BX’s facility at the 

Back-up Exchange and, if applicable, its 

member(s) that will be a BX Market 


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16Of note, unlike Phlx, BX does not have rules 

to appoint Lead Market Makers. 

Maker in those options.16 If the Back-up 

Exchange is unable to accommodate all 

BX Participants that desire to trade on 

BX’s facility at the Back-up Exchange, 

BX may determine which Participants 

shall be eligible to trade at that facility 

by considering factors such as whether 

the Participant is a BX Market Maker in 

the applicable product(s), the number of 

contracts traded by the member in the 

applicable product(s), market 

performance, and other factors relating 

to a member’s contribution to the 

market in the applicable product(s). 

Under proposed paragraph (a)(1)(vi), 

Participants of the Back-up Exchange 

shall not be authorized to trade in any 

BX exclusively listed options, except 

that (i) BX may deputize willing brokers 

of the Back-up Exchange as temporary 

BX Participants to permit them to 

execute orders as brokers in BX 

exclusively listed options traded on 

BX’s facility at the Back-up Exchange, 

and (ii) the Back-up Exchange has 

agreed that it will, at the instruction of 

BX, select members of the Back-up 

Exchange that are willing to be 

deputized by BX as temporary BX 

Participants authorized to trade BX 

exclusively listed options on BX’s 

facility at the Back-up Exchange for 

such period of time following a 

Disabling Event as BX determines to be 

appropriate, and BX may deputize such 

members of the Back-up Exchange as 

temporary BX Participants for that 

purpose. 

The foregoing exceptions would 

permit members of the Back-up 

Exchange to trade BX exclusively listed 

options on the BX facility on the Backup Exchange, if, for example, 

circumstances surrounding a Disabling 

Event result in BX Participants being 

delayed in connecting to the Back-up 

Exchange in time for prompt 

resumption of trading. Options 4, 

Section 10(a)(2) of the proposed rule 

provides for the continued trading of BX 

singly listed options at the Back-up 

Exchange in the event of a Disabling 

Event at BX. Proposed paragraph 

(a)(2)(ii) provides that BX may enter into 

arrangements with a Back-up Exchange 

under which the Back-up Exchange will 

agree, in the event of a Disabling Event, 

to list for trading option classes that are 

then singly listed only by BX. Such 

option classes would trade on the Backup Exchange as listings of the Back-up 

Exchange and in accordance with the 

rules of the Back-up Exchange. Under 

proposed paragraph (a)(2)(iii), any such 

options class listed by the Back-up 

Exchange that does not satisfy the 

standard listing and maintenance 

criteria of the Back-up Exchange will be 

subject, upon listing by the Back-up 

Exchange, to delisting (and, thus, 

restrictions on opening new series, and 

engaging in opening transactions in 

those series with open interest, as may 

be provided in the rules of the Back-up 

Exchange). BX singly listed option 

classes would be traded by members of 

the Back-up Exchange and by BX 

Participants selected by BX to the extent 

the Back-up Exchange can accommodate 

BX Participants in the capacity of 

temporary members of the Back-up 

Exchange. If the Back-up Exchange is 

unable to accommodate all BX 

Participants that desire to trade BX 

singly listed options at the Back-up 

Exchange, BX may determine which 

Participants shall be eligible to trade 

such options at the Back-up Exchange 

by considering the same factors used to 

determine which BX Participants are 

eligible to trade BX exclusively listed 

options at the BX facility at the Back-up 

Exchange. 

Proposed Section (a)(3) provides that 

BX may enter into arrangements with a 

Back-up Exchange to permit BX 

Participants to conduct trading on a 

Back-up Exchange of some or all of BX’s 

multiply listed options in the event of 

a Disabling Event. While continued 

trading of multiply listed options upon 

the occurrence of a Disabling Event is 

not likely to be as great a concern as the 

continued trading of exclusively and 

singly listed options, BX nonetheless 

believes a provision for multiply listed 

options should be included in the rule 

so that the exchanges involved will have 

the option to permit members of the 

Disabled Exchange to trade multiply 

listed options on the Back-up Exchange. 

Such options shall trade as a listing of 

the Back-up Exchange in accordance 

with the rules of the Back-up Exchange. 

Options 4, Section 10(b) describes the 

back-up trading arrangements that 

would apply if BX were the Back-up 

Exchange. In general, the provisions in 

Section (b) are the converse of the 

provisions in Section (a). With respect 

to the exclusively listed options of the 

Disabled Exchange, the facility of BX 

used by the Disabled Exchange to trade 

some or all of the Disabled Exchange’s 

exclusively listed options will be 

deemed to be a facility of the Disabled 

Exchange, and such option classes shall 

trade as listings of the Disabled 

Exchange. Trading of the Disabled 

Exchange’s exclusively listed options on 

the Disabled Exchange’s facility at BX 

shall be conducted in accordance with 

BX rules, and BX will perform the 

related regulatory functions with respect 

to such trading, in each case except as 

the Disabled Exchange and BX may 

specifically agree otherwise. BX rules 

that govern trading on the Disabled 

Exchange’s facility at BX shall be 

deemed to be rules of the Disabled 

Exchange for purposes of such trading. 

Sections (b)(2) and (b)(3) describe the 

arrangements applicable to trading of 

the Disabled Exchange’s singly and 

multiply listed options at BX, and are 

the converse of Sections (a)(2) and 

(a)(3). Paragraph (b)(2)(i) includes a 

provision that would permit BX to 

allocate singly listed option classes of 

the Disabled Exchange to a BX Market 

Maker in advance of a Disabling Event, 

without utilizing the allocation process 

under BX Rule Options 2, Section 1, to 

enable BX to quickly list such option 

classes upon the occurrence of a 

Disabling Event. 

Options 4, Section 10(c) describes the 

obligations of Participants with respect 

to the trading by ‘‘temporary members’’ 

on the facilities of another exchange. 

Section (c)(1) sets forth the obligations 

applicable to Participants of a Back-up 

Exchange who act in the capacity of 

temporary Participants of the Disabled 

Exchange on the facility of the Disabled 

Exchange at the Back-up Exchange. 

Section (c)(1) provides that a temporary 

Participant of the Disabled Exchange 

shall be subject to, and obligated to 

comply with, the rules that govern the 

operation of the facility of the Disabled 

Exchange at the Back-up Exchange. This 

would include the rules of the Disabled 

Exchange to the extent applicable 

during the period of such trading, 

including the rules of the Disabled 

Exchange limiting its liability for the 

use of its facilities that apply to 

members of the Disabled Exchange. 

Additionally, (i) such temporary 

Participant shall be deemed to have 

satisfied, and the Disabled Exchange has 

agreed to waive specific compliance 

with, rules governing or applying to the 

maintenance of a person’s or a firm’s 

status as a Participant of the Disabled 

Exchange, including all dues, fees and 

charges imposed generally upon 

members of the Disabled Exchange 

based on their status as such, (ii) such 

temporary Participant shall have none 

of the rights of a member of the Disabled 

Exchange except the right to conduct 

business on the facility of the Disabled 

Exchange at the Back-up Exchange to 

the extent described in the Rule, (iii) the 

Participant associated with such 

temporary Participant, if any, shall be 

responsible for all obligations arising 

out of that temporary Participant’s 

activities on or relating to the Disabled 

Exchange, and (iv) the clearing member 

of such temporary Participant shall 


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17 15 U.S.C. 78f(b). 

18 15 U.S.C. 78f(b)(5). 

guarantee and clear the transactions of 

such temporary Participant on the 

Disabled Exchange. 

Section (c)(2) sets forth the obligations 

applicable to members of a Disabled 

Exchange who act in the capacity of 

temporary Participants of the Back-up 

Exchange for the purpose of trading 

singly listed and multiply listed options 

of the Disabled Exchange. Such 

temporary Participants shall be subject 

to, and obligated to comply with, the 

rules of the Back-up Exchange that are 

applicable to the Back-up Exchange’s 

own members, including the rules of the 

Back-up Exchange limiting its liability 

for the use of its facilities that apply to 

members of the Back-up Exchange. 

Temporary Participants of the Back-up 

Exchange have the same obligations as 

those set forth in Section (c)(1) that 

apply to temporary Participants of the 

Disabled Exchange, except that, in 

addition, temporary Participants of the 

Back-up Exchange shall only be 

permitted (i) to act in those capacities 

on the Back-up Exchange that are 

authorized by the Back-up Exchange 

and that are comparable to capacities in 

which the temporary Participant has 

been authorized to act on the Disabled 

Exchange, and (ii) to trade in those 

option classes in which the temporary 

Participant is authorized to trade on the 

Disabled Exchange. 

Options 4, Section 10 provides that 

the rules of the Back-up Exchange shall 

apply to the trading of the singly and 

multiply listed options of the Disabled 

Exchange traded on the Back-up 

Exchange’s facilities, and (with certain 

limited exceptions) the trading of 

exclusively listed options of the 

Disabled Exchange traded on the facility 

of the Disabled Exchange at the Back-up 

Exchange. The Back-up Exchange has 

agreed to perform the related regulatory 

functions with respect to such trading 

(except as the Back-up Exchange and 

the Disabled Exchange may specifically 

agree otherwise). Section (d) provides 

that if a Back-up Exchange initiates an 

enforcement proceeding with respect to 

the trading during a back-up period of 

singly or multiply listed options of the 

Disabled Exchange by a temporary 

Participant of the Back-up Exchange, or 

exclusively listed options of the 

Disabled Exchange by a member of the 

Disabled Exchange (other than a 

member of the Back-up Exchange who 

is a temporary member of the Disabled 

Exchange), and such proceeding is in 

process upon the conclusion of the 

back-up period, the Back-up Exchange 

may transfer responsibility for such 

proceeding to the Disabled Exchange 

following the conclusion of the back-up 

period. This approach to the exercise of 

enforcement jurisdiction is also 

consistent with past precedent. 

With respect to arbitration 

jurisdiction, proposed Section (d) 

provides that arbitration of any disputes 

with respect to any trading during a 

back-up period of singly or multiply 

listed options of the Disabled Exchange 

or of exclusively listed options of the 

Disabled Exchange on the Disabled 

Exchange’s facility at the Back-up 

Exchange will be conducted in 

accordance with the rules of the Backup Exchange, unless the parties to an 

arbitration agree that it shall be 

conducted in accordance with the rules 

of the Disabled Exchange. 

Proposed Supplementary Material .01 

to Options 4, Section 10 clarifies that to 

the extent Options 4, Section 10 

provides that another exchange will take 

certain action, the Rule is reflecting 

what that exchange has agreed to do by 

contractual agreement with BX, but 

Options 4, Section 10 is not binding on 

the other exchange. 

Options 4C 

The Exchange proposes to reserve 4C 

as BX does not list U.S. Dollar-Settled 

Foreign Currency Options. 

Bid/Ask Differentials 

The Exchange proposes to amend 

Options 4, Section 8(a), and Options 4A, 

Section 12(b)(1)(i) to relocate text 

concerning bid/ask differentials for 

long-term option series. Currently, 

Options 4, Section 8(a) describes the 

bid/ask differentials for long-term 

options series for equity options and 

exchange-traded products and Options 

4A, Section 12(b)(1)(i) describes the bid/ 

ask differentials for long-term options 

series for indexes. Currently, the bid/ask 

differentials shall not apply to such 

options series until the time to 

expiration is less than nine (9) months 

for equity options and exchange-traded 

funds as provided for within Options 4, 

Section 8(a). Currently, bid/ask 

differentials shall not apply to such 

options series until the time to 

expiration is less than nine (9) months 

for index options as provided for within 

Options 4A, Section 12(b)(1)(i). 

The Exchange proposes to centralize 

the bid/ask differentials within Options 

2, Section 5(d)(2)(A) and add a sentence 

to both Options 4, Section 8(a) and 

Options 4A, Section 12(b)(1)(i) that cites 

to Options 2, Section 5(d)(2)(A) for 

information on bid/ask differentials for 

the various products. The Exchange also 

proposes to capitalize ‘‘ask’’ in the title 

of Options 2, Section 5(d)(2). The 

Exchange believes that this relocation 

will provide Market Makers with 

centralized information regarding their 

bid/ask differential requirements. The 

Exchange is not amending the bid/ask 

differentials; the rule text is simply 

being relocated. 

Technical Amendment 

The Exchange proposes to amend 

General 9, Section 51, Research 

Analysts, to update an improper citation 

to ‘‘General 9, Section 50’’ to ‘‘this 

Rule.’’ The citation is to General 9, 

Section 51. The Exchange also proposes 

to remove stray periods throughout 

Options 4 in the section headings. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,17 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,18

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. 

Conforming BX’s Options 4 Listing 

Rules to that of ISE Options 4 is part of 

the Exchange’s continued effort to 

promote efficiency in the manner in 

which it administers its rules. 

The Exchange’s proposal to amend 

Options 4, Sections 1, 2, 5, and 7 reflect 

non-substantive amendments to 

conform those rules to similar ISE rules. 

These proposed changes removes 

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 since the changes are 

intended to ease the Participants’, 

market participants’, and the general 

public’s navigation and reading of the 

rules and lessen potential confusion and 

add clarity for market participants. 

The proposed amendments to ISE 

Options 3, Section 3(b) to permit the 

Exchange, in exceptional circumstances, 

to select an underlying security even 

though it does not meet all of the 

guidelines, is consistent with the Act. 

Today, the Exchange may establish 

guidelines to be considered in 

evaluating potential underlying 

securities for Exchange options 

transactions. Providing BX with the 

same ability to select an underlying 

security even though it does not meet all 

of the guidelines as ISE will permit BX 

to list similar options as ISE for 

competitive purposes. 

The Exchange’s proposal to add the 

defined term ‘‘Financial Instruments’’ 

within Options 4, Section 3(h) and also 


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19Options 4, Section 4(b), as amended, 

establishes requirements for continued listing, 

similar to ISE. 

20See ISE Options 4, Section 4 and Cboe Rule 4.4. 

account for money market instruments, 

U.S. government securities and 

repurchase agreements, defined by the 

term ‘‘Money Market Instruments’’ 

similar to ISE Options 4, Section 3(h) is 

consistent with the Act. The addition of 

money market instruments, U.S. 

government securities and repurchase 

agreements as securities deemed 

appropriate for options trading will 

make clear that these agreements are 

included in the acceptable securities. 

The Exchange notes that this rule text is 

clarifying in nature and will more 

explicitly provide for money market 

instruments, U.S. government securities 

and repurchase agreements as a separate 

category from what is being defined as 

‘‘Financial Instruments’’ with this 

proposal. Today, these instruments are 

eligible as securities deemed 

appropriate for options trading. 

The Exchange’s proposal to remove 

the following products from Options 4, 

Section 3(h): The ETFS Silver Trust, the 

ETFS Palladium Trust, the ETFS 

Platinum Trust or the Sprott Physical 

Gold Trust is consistent with the Act 

because the Exchange no longer lists 

these products and proposes to remove 

them the products from its listing rules. 

The Exchange will file a proposal with 

the Commission if it determines to list 

these products in the future. 

The Exchange’s proposal to amend 

Options 4, Section 3(h) by removing the 

rule text at the end of the paragraph 

which provides, ‘‘all of the following 

conditions are met,’’ and creating 

separate paragraphs for Options 4, 

Section 3(h)(1) and (2) is consistent with 

the Act. These amendments will de-link 

these subparagraphs so they are read 

independently. Today, Options 4, 

Section 3(h)(1) applies to all ExchangeTraded Fund Shares. The Exchange’s 

proposal to clarify that Options 4, 

Section 3(h)(2) applies to only 

international or global indexes or 

portfolios that include non-U.S. 

securities will bring greater clarity to the 

qualification standards for listing 

options on Exchange-Traded Fund 

Shares. ISE Options 4, Section 3(h) 

currently has similar rule text. Proposed 

Options 4, Sections 3(h) generally 

concerns securities deemed appropriate 

for options trading. The proposed new 

rule text adds language stating that 

subparagraph (h)(2) of Options 4, 

Section 3 applies to the extent the 

Exchange-Traded Fund Share is based 

on international or global indexes or 

portfolios that include non-U.S. 

securities. This language is intended to 

serve as a guidepost and clarify that (1) 

subparagraph (h)(2) does not apply to an 

Exchange-Traded Fund Shares based on 

a U.S. domestic index or portfolio, and 

(2) subparagraph (h)(2) includes 

Exchange-Traded Fund Shares that track 

a portfolio and do not track an index. 

The Exchange’s proposal to amend 

Options 4, Section 3(h)(2)(A) to remove 

the phrase ‘‘for series of portfolio 

depositary receipts and index fund 

shares based on international or global 

indexes,’’ is consistent with the Act. 

Today, Options 4, Section 3(h), 

subparagraphs (h)(1) and (h)(v) permit 

the Exchange to list options on 

Exchange-Traded Fund Shares based on 

generic listing standards for portfolio 

depositary receipts and index fund 

shares without applying component 

based requirements in subparagraphs 

(h)(2)(B)–(D). By removing the proposed 

rule text, the Exchange would make 

clear that subparagraph (h)(2)(A) applies 

to Exchange-Traded Fund Shares based 

on international or global indexes, or 

portfolios that include non-U.S. 

securities, that are listed pursuant to 

generic listing standards and comply 

with Options 4, Section 3(h) and 

subparagraph (h)(1). 

The Exchange’s proposal to amend 

the term ‘‘comprehensive surveillance 

agreement’’ within Options 4, Section 

3(h)(2) (A)–(D) to instead provide 

‘‘comprehensive surveillance sharing 

agreement’’ is consistent with the Act as 

the amendment will bring greater clarity 

to the term. 

The Exchange’s proposal to add the 

phrase ‘‘if not available or applicable, 

the Exchange-Traded Fund’s’’ to 

Options 4, Section 3(h)(2)(B), (C), and 

(D) is consistent with the Act as it will 

clarify that when component securities 

are not available, the portfolio of 

securities upon which the ExchangeTraded Fund Share is based can be used 

instead. This rule text currently exists 

within ISE Options 4, Section 3(h). 

The Exchange’s proposal to amend 

and relocate the rule text within 

Options 4, Section 3(h)(2)(B), (C), and 

(D) will bring greater clarity to the 

current rule text by explicitly providing 

that the index being referenced is the 

one on which the Exchange-Traded 

Fund Shares is based. Also, adding ‘‘or 

portfolio’’ to Options 4, Section 

3(h)(2)(C), and (D) will bring greater 

clarity to the rule text by conforming the 

rule text of (C) and (D) to the language 

within (B). 

The proposed amendments to Options 

4, Section 3(h) will conform BX’s rule 

text to ISE Options 4, Section 3(h). 

The remainder of the change to 

Options 3, Section 3 are non-substantive 

and intended to conform to ISE Options 

3, Section 3. These proposed changes 

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 since the changes are 

intended to ease the Participants’, 

market participants’, and the general 

public’s navigation and reading of the 

rules and lessen potential confusion and 

add clarity for market participants. 

The proposed amendments to Options 

4, Section 4 remove unnecessary rule 

text and make clear that options 

contracts that are no longer approved 

will not be listed. The proposed 

amendments to adopt new Options 4, 

Section 4(i) similar to ISE, Options 4, 

Section 4(i), are consistent with the Act. 

Today, the Exchange would not open 

additional series of HOLDRs without 

filing a rule change with the 

Commission and adopting a 

corresponding rule. This rule text, 

similar to ISE, explicitly provides that 

the Exchange would not open additional 

series of options overlying HOLDRs 

(without prior Commission approval) if: 

(1) The proportion of securities 

underlying standardized equity options 

to all securities held in a HOLDRs trust 

is less than 80% (as measured by their 

relative weightings in the HOLDRs 

trust); or (2) less than 80% of the total 

number of securities held in a HOLDRs 

trust underlie standardized equity 

options. This rule text bring greater 

clarity to BX’s rules in that HOLDRs 

would not be in certain circumstances. 

The Exchange’s proposal to remove 

the rule text within Options 4, Section 

4(l), related to inadequate volume 

delisting, is consistent with the Act. To 

remain competitive with other options 

markets, the Exchange proposes to 

adopt the same obligations for 

continuance of trading.19 Also, pursuant 

to proposed new Options 4, Section 5(e) 

the Exchange will announce securities 

that have been withdrawn. With this 

proposal, the Exchange would eliminate 

the requirement that an option must be 

trading for more than 6 months. The 

Exchange notes that this condition is 

not present on other options markets 

such as ISE and Cboe.20 This also 

applies to the requirement that the 

average daily volume of the entire class 

of options over the last six (6) month 

period was less than twenty (20) 

contracts. The Exchange notes that BX’s 

requirements are different than other 

options markets and to remain 

competitive the Exchange proposes to 

adopt the same standards as ISE and 

Cboe to remain competitive and list 

similar options as the other markets. 

While the Exchange may in the future 


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21See ISE Options Listing Rule Section 9. 

22As defined within the proposed rule, the term 

‘‘exclusively listed option’’ means an option that is 

listed exclusively by an exchange (because the 

exchange has an exclusive license to use, or has 

proprietary rights in, the interest underlying the 

option). 23See Phlx and ISE Rules Options 3, Section 10. 

determine to delist an option that is 

singly listed, the Exchange’s proposal to 

remove the rule text which provides 

that ‘‘If the option is singly listed only 

on the Exchange, the Exchange will 

cease to add new series and may delist 

the class of options when there is no 

remaining open interest’’ is consistent 

with the Act. This rule text does not 

exist on ISE and Cboe. The Exchange 

today provides notification of a delisting 

to all members so therefore it is not 

necessary to retain the provisions 

within (b)(2). Also, proposed new 

Options 4, Section 4(e) establishes the 

rules by which the Exchange will 

announce securities that have been 

withdrawn. The rule text within 

Options 4, Section 4(b), as amended to 

conform to ISE rule text, will continue 

to govern the continued approval of 

options on the Exchange. 

The remainder of the changes to 

Options 3, Section 3 remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general protects investors and the public 

interest. Overall, these changes are of a 

non-substantive nature and either 

modify, clarify or relocate the existing 

Rulebook language to reflect the 

language of the ISE version of the rule 

and are intended to ease the 

Participants’, market participants’, and 

the general public’s navigation and 

reading of the rules and lessen potential 

confusion and add clarity for market 

participants. 

The Exchange believes that the 

changes to proposed Options 4, Section 

8 removes impediments to and perfects 

the mechanism of a free and open 

market and a national market system, 

and, in general protects investors and 

the public interest because the changes 

are mainly of a non-substantive nature 

with much of the rule text largely 

simply being relocated from current 

Options 4, Section 5(a)(i)(D) to new 

Options 4, Section 8(a) with some minor 

amendments and is intended to ease the 

Participants’, market participants’, and 

the general public’s navigation and 

reading of the rules and lessen potential 

confusion and add clarity for market 

participants. 

The Exchange’s proposal to amend 

Options 3, Section 8 and Options 4A, 

Section 12(b)(1)(i) to relocate text 

concerning bid/ask differentials for 

long-term option series is consistent 

with the Act. The Exchange’s proposal 

will centralize the bid/ask differentials 

within Options 2, Section 5(d)(2)(A) and 

add a sentence to both Options 3, 

Section 8 and Options 4A, Section 

12(b)(1)(i) that cites to Options 2, 

Section 5(d)(2)(A) for information on 

bid/ask differentials for the various 

products. The Exchange is not 

amending the bid/ask differentials; the 

rule text is simply being relocated. The 

Exchange believes that this relocation 

will provide Market Makers with 

centralized information regarding their 

bid/ask differential requirements. 

The remainder of the changes to 

Options 3, Section 8 are nonsubstantive. 

The Exchange believes that adopting 

a new Section 9, Limitation on the 

Liability of Index Licensors for Option 

on Fund Share, similar to ISE, is 

consistent with the Act. Specifically, 

this proposal seeks to limit the liability 

of index licensors who grant the BX a 

license to use their underlying indexes 

or portfolios in connection with the 

trading of options on Fund Shares. This 

rule text is identical to ISE rule text.21

Proposed Section 9(b) provides that no 

index licensor with respect to any index 

or portfolio underlying an option on 

Exchange-Traded Fund Shares traded 

on the Exchange makes any warranty, 

express or implied, as to the results to 

be obtained by any person or entity from 

the use of such index or portfolio, any 

opening, intra-day or closing value 

therefor, or any data included therein or 

relating thereto, in connection with the 

trading of any option contract on 

Exchange-Traded Fund Shares based 

thereon or for any other purpose. The 

disclaimers within proposed Section 9 

are consistent with the Act in that these 

disclaimers provide market participants 

with relevant information as to the 

liabilities on option contracts on 

Exchange-Traded Fund Shares. 

The Exchange believes that the 

adoption of Options 4, Section 10, Backup Trading Arrangements, will provide 

BX with similar abilities as ISE to 

permit BX to enter into arrangements 

with one or more other exchanges (each 

a ‘‘Back-up Exchange’’) to permit BX 

and its Participants to use a portion of 

a Back-up Exchange’s facilities to 

conduct the trading of BX exclusively 

listed 22 options in the event of a 

Disabling Event, and similarly to permit 

BX to provide trading facilities for 

another exchange’s exclusively listed 

options if that exchange (a ‘‘Disabled 

Exchange’’) is prevented from trading 

due to a Disabling Event. With this 

proposal, BX is proposing to adopt 

listing rules similar to Phlx to list and 

trade U.S. Dollar-Settled Foreign 

Currency Options. BX believes that it is 

important that it develop back-up 

trading arrangements to minimize the 

potential disruption and market impact 

that a Disabling Event could cause. The 

proposed rule changes are designed to 

address the key elements necessary to 

mitigate the effects of a Disabling Event 

affecting the Exchange, minimize the 

impact of such an event on market 

participants, and provide for a liquid 

and orderly marketplace for securities 

listed and traded on the Exchange if a 

Disabling Event occurs. In particular, 

the proposed rule change is intended to 

ensure that BX’s exclusively listed and 

singly listed products will have a 

trading venue in the event that trading 

at BX is prevented due to a Disabling 

Event. The Exchange believes that 

having these back-up trading 

arrangements in place will minimize 

potential disruptions to the markets and 

investors if a catastrophe occurs that 

requires the Exchange’s primary facility 

to be closed for an extended period. 

Phlx and ISE has a similar rule,23 and 

the Exchange believes that it is 

important to the protection of investors 

and the public interest that it also adopt 

rules that allow BX exclusively and 

singly listed options to continue to trade 

in the event of a Disabling Event. The 

proposed rule change also provides 

authority for the BX to provide a backup trading venue should another 

exchange be affected by a Disabling 

Event, which will benefit the markets 

and investors if a Disabling Event were 

to happen on another exchange that has 

entered into a back-up trading 

arrangement with the BX. Finally, the 

proposed rule change grants authority to 

Exchange officials to take action under 

emergency conditions, which should 

enable key actions to be taken by BX 

representatives in the event of a 

Disabling Event, and clarifies the fees 

that will apply if these back-up trading 

arrangements are invoked, which will 

reduce investor confusion and minimize 

the disruption to investors associated 

with a Disabling Event. Under proposed 

paragraph (a)(1)(vi), members of the 

Back-up Exchange shall not be 

authorized to trade in any BX 

exclusively listed options, except that (i) 

BX may deputize willing brokers of the 

Back-up Exchange as temporary BX 

Participants to permit them to execute 

orders as Participants in BX exclusively 

listed options traded on BX’s facility at 

the Back-up Exchange, and (ii) the Backup Exchange has agreed that it will, at 

the instruction of BX, select members of 

the Back-up Exchange that are willing to 

be deputized by BX as temporary BX 


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members authorized to trade BX 

exclusively listed options on BX’s 

facility at the Back-up Exchange for 

such period of time following a 

Disabling Event as BX determines to be 

appropriate, and BX may deputize such 

members of the Back-up Exchange as 

temporary BX members for that 

purpose. The foregoing exceptions 

would permit members of the Back-up 

Exchange to trade BX exclusively listed 

options on the BX facility on the Backup Exchange, if, for example, 

circumstances surrounding a Disabling 

Event result in BX members being 

delayed in connecting to the Back-up 

Exchange in time for prompt 

resumption of trading. 

The Exchange’s proposal to reserve 

Options 4C will make clear that BX does 

not list U.S. Dollar-Settled Foreign 

Currency Options. Other Nasdaq 

Affiliated exchanges, such as Nasdaq 

Phlx LLC, list U.S. Dollar-Settled 

Foreign Currency Options and would 

therefore have rules in that section. By 

marking Options 4C reserved, market 

participants will be given additional 

insight into the types of products 

available on BX. 

Technical Amendment 

The Exchange’s proposal to amend 

General 9, Section 51, Research 

Analysts, to update an improper citation 

to ‘‘General 9, Section 50’’ to ‘‘this 

Rule’’ and remove stray periods 

throughout Options 4 in the section 

headings are consistent with the Act. 

This non-substantive amendment will 

bring greater clarity to the rule. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

relocation of the Options Listing Rules 

will facilitate the use of the Rulebook by 

Participants of the Exchange, who are 

members of other Affiliated Exchanges; 

other market participants; and the 

public in general. The changes are 

consistent with the ISE Rulebook. 

The Exchange’s proposal to amend 

Options 4, Sections 1, 2, 5, and 7 

reflects non-substantive amendments to 

conform those rules to similar ISE rules 

at Options 4, Sections 1, 2, 5, and 7. 

These proposed changes do not impose 

an undue burden on competition since 

the changes are intended to ease the 

Participants’, market participants’, and 

the general public’s navigation and 

reading of the rules and lessen potential 

confusion and add clarity for market 

participants. 

The proposed amendments to ISE 

Options 3, Section 3(b) to permits the 

Exchange, in exceptional circumstances, 

to select an underlying security even 

though it does not meet all of the 

guidelines do not impose an undue 

burden on competition. Today, the 

Exchange may establish guidelines to be 

considered in evaluating potential 

underlying securities for Exchange 

options transactions. Providing BX with 

the same ability to select an underlying 

security even though it does not meet all 

of the guidelines as ISE will permit BX 

to list similar options as ISE for 

competitive purposes. 

The Exchange’s proposal to add the 

defined term ‘‘Financial Instruments’’ 

within Options 4, Section 3(h) and also 

account for money market instruments, 

U.S. government securities and 

repurchase agreements, defined by the 

term ‘‘Money Market Instruments’’ 

similar to ISE Options 4, Section 3(h) do 

not impose an undue burden on 

competition. The addition of money 

market instruments, U.S. government 

securities and repurchase agreements as 

securities deemed appropriate for 

options trading will make clear that 

these agreements are included in the 

acceptable securities. 

The Exchange’s proposal to remove 

the following products from Options 4, 

Section 3(h): The ETFS Silver Trust, the 

ETFS Palladium Trust, the ETFS 

Platinum Trust or the Sprott Physical 

Gold Trust do not impose an undue 

burden on competition. The Exchange 

no longer lists these products and 

proposes to remove them the products 

from its listing rules. 

The Exchange’s proposal to amend 

Options 4, Section 3(h) by removing the 

rule text at the end of the paragraph 

which provides, ‘‘all of the following 

conditions are met,’’ and creating 

separate paragraphs for Options 4, 

Section 3(h)(1) and (2) does not impose 

an undue burden on competition. These 

amendments will de-link these 

subparagraphs so they are read 

independently. Today, Options 4, 

Section 3(h)(1) applies to all ExchangeTraded Fund Shares. The Exchange’s 

proposal to clarify that Options 4, 

Section 3(h)(2) applies to only 

international or global Exchange-Traded 

Fund Shares that include non-U.S. 

securities will bring greater clarity to the 

qualification standards for listing 

options on Exchange-Traded Fund 

Shares. Specifically, this language is 

intended to serve as a guidepost and 

clarify that (1) subparagraph (h)(2) does 

not apply to an Exchange-Traded Fund 

Shares based on a U.S. domestic index 

or portfolio, and (2) subparagraph (h)(2) 

includes Exchange-Traded Fund Shares 

that track a portfolio and do not track 

an index. This amendment will 

uniformly apply the criteria within 

Options 4, Section 3 when it lists 

options products on BX. 

The Exchange’s proposal to amend 

Options 4, Section 3(h)(2)(A) to remove 

the phrase ‘‘for series of portfolio 

depositary receipts and index fund 

shares based on international or global 

indexes,’’ does not impose an undue 

burden on competition. Today, Options 

4, Section 3(h), subparagraphs (h)(1) and 

(h)(v) permit the Exchange to list 

options on Exchange-Traded Fund 

Shares based on generic listing 

standards for portfolio depositary 

receipts and index fund shares without 

applying component based 

requirements in subparagraphs 

(h)(2)(B)–(D). By removing the proposed 

rule text, the Exchange would make 

clear that subparagraph (h)(2)(A) applies 

to Exchange-Traded Fund Shares based 

on international or global indexes, or 

portfolios that include non-U.S. 

securities, that are listed pursuant to 

generic listing standards and comply 

with Options 4, Section 3(h) and 

subparagraph (h)(1). This amendment 

will uniformly apply the criteria within 

Options 4, Section 3 when it lists 

options products on BX. 

The Exchange’s proposal to amend 

the term ‘‘comprehensive surveillance 

agreement’’ within Options 4, Section 

3(h)(2) (A)–(D) to instead provide 

‘‘comprehensive surveillance sharing 

agreement’’ does not impose an undue 

burden on competition as the 

amendment will bring greater clarity to 

the term. 

The Exchange’s proposal to add the 

phrase ‘‘if not available or applicable, 

the Exchange-Traded Fund’s’’ to 

Options 4, Section 3(h)(2)(B), (C), and 

(D) does not impose an undue burden 

on competition as it will clarify that 

when component securities are not 

available, the portfolio of securities 

upon which the Exchange-Traded Fund 

Share is based can be used instead. 

The Exchange’s proposal to amend 

and relocate the rule text within 

Options 4, Section 3(h)(2)(B), (C), and 

(D) will bring greater clarity to the 

current rule text by explicitly providing 

that the index being referenced is the 

one on which the Exchange-Traded 

Fund Shares is based. Also, adding ‘‘or 

portfolio’’ to Options 4, Section 

3(h)(2)(C), and (D) will bring greater 

clarity to the rule text by conforming the 

rule text of (C) and (D) to the language 

within (B). 

The proposed amendments to Options 

4, Section 4 remove unnecessary rule 

text and make clear that options 

contracts that are no longer approved 


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24Options 4, Section 4(b), as amended, 

establishes requirements for continued listing, 

similar to ISE. 

25See ISE Options 4, Section 4 and Cboe Rule 4.4. 

26See ISE Options Listing Rule Section 9. 

27As defined within the proposed rule, the term 

‘‘exclusively listed option’’ means an option that is 

listed exclusively by an exchange (because the 

exchange has an exclusive license to use, or has 

proprietary rights in, the interest underlying the 

option). 

28 15 U.S.C. 78s(b)(3)(A)(iii). 

29 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

the proposed rule change at least five business days 

prior to the date of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. The Exchange has satisfied this 

requirement. 

30 17 CFR 240.19b–4(f)(6). 

31 17 CFR 240.19b–4(f)(6). 

will not be listed. The proposed 

amendments to adopt new Options 4, 

Section 4(i) similar to ISE, Options 4, 

Section 4(i), does not impose an undue 

burden on competition. The 

amendments would provide for 

provisions wherein the Exchange will 

not open additional series of options 

overlying HOLDRs similar to ISE, which 

provisions do not currently exist. 

The Exchange’s proposal to remove 

the rule text within Options 4, Section 

4(l), related to inadequate volume 

delisting, does not impose an undue 

burden on competition. To remain 

competitive with other options markets, 

the Exchange proposes to adopt the 

same obligations for continuance of 

trading.24 Also, pursuant to proposed 

new Options 4, Section 5(e) the 

Exchange will announce securities that 

have been withdrawn. With this 

proposal, the Exchange would eliminate 

the requirement that an option must be 

trading for more than 6 months. The 

Exchange notes that this condition is 

not present on other options markets 

such as ISE and Cboe.25 This also 

applies to the requirement that the 

average daily volume of the entire class 

of options over the last six (6) month 

period was less than twenty (20) 

contracts. The Exchange notes that BX’s 

requirements are different than other 

options markets and to remain 

competitive the Exchange proposes to 

adopt the same standards as ISE and 

Cboe to remain competitive and list 

similar options as the other markets. 

The Exchange’s proposal removes the 

rule text which provides that ‘‘If the 

option is singly listed only on the 

Exchange, the Exchange will cease to 

add new series and may delist the class 

of options when there is no remaining 

open interest’’ does not impose an 

undue burden on competition. This rule 

text does not exist on ISE and Cboe. The 

Exchange today provides notification of 

a delisting to all members so therefore 

it is not necessary to retain the 

provisions within (b)(2). Also, proposed 

new Options 4, Section 4(e) establishes 

the rules by which the Exchange will 

announce securities that have been 

withdrawn. 

The Exchange believes that the 

changes to proposed Options 4, Section 

8 do not impose an undue burden on 

competition as the changes are mainly 

of a non-substantive nature with much 

of the rule text largely simply being 

relocated from current Options 4, 

Section 5(a)(i)(D) to new Options 4, 

Section 8(a) with some minor 

amendments. 

The Exchange’s proposal to amend 

Options 3, Section 8 and Options 4A, 

Section 12(b)(1)(i) to relocate text 

concerning bid/ask differentials for 

long-term option series does not impose 

an undue burden on competition. The 

Exchange believes that this relocation 

will provide Market Makers with 

centralized information regarding their 

bid/ask differential requirements. 

Adopting a new Section 9, Limitation 

on the Liability of Index Licensors for 

Option on Fund Share, similar to ISE 

does not impose an undue burden on 

competition. The proposal seeks to limit 

the liability of index licensors who grant 

the BX a license to use their underlying 

indexes or portfolios in connection with 

the trading of options on Fund Shares. 

This rule text is identical to ISE rule 

text.26 Proposed Section 9(b) provides 

that no index licensor with respect to 

any index or portfolio underlying an 

option on Exchange-Traded Fund 

Shares traded on the Exchange makes 

any warranty, express or implied, as to 

the results to be obtained by any person 

or entity from the use of such index or 

portfolio, any opening, intra-day or 

closing value therefor, or any data 

included therein or relating thereto, in 

connection with the trading of any 

option contract on Exchange-Traded 

Fund Shares based thereon or for any 

other purpose. 

The Exchange believes that the 

adoption of Options 4, Section 10, Backup Trading Arrangements, will provide 

BX with similar abilities as ISE to 

permit BX to enter into arrangements 

with one or more other exchanges (each 

a ‘‘Back-up Exchange’’) to permit BX 

and its Participants to use a portion of 

a Back-up Exchange’s facilities to 

conduct the trading of BX exclusively 

listed 27 options in the event of a 

Disabling Event, and similarly to permit 

BX to provide trading facilities for 

another exchange’s exclusively listed 

options if that exchange (a ‘‘Disabled 

Exchange’’) is prevented from trading 

due to a Disabling Event. Permitting BX 

to list U.S. Dollar-Settled Foreign 

Currency Options similar to Phlx would 

allow market participants another venue 

in which to transact U.S. Dollar-Settled 

Foreign Currency Options. 

Technical Amendment 

The Exchange’s proposal to amend 

General 9, Section 51, Research 

Analysts, to update an improper citation 

to ‘‘General 9, Section 50’’ to ‘‘this 

Rule’’ and remove stray periods 

throughout Options 4 in the section 

headings do not impose an undue 

burden on competition. This nonsubstantive amendment will bring 

greater clarity to the rule. 

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 28 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.29

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. 

A proposed rule change filed under 

Rule 19b–4(f)(6) 30 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b–4(f)(6)(iii),31 the 

Commission may designate a shorter 

time if such action is consistent with 

protection of investors and the public 

interest. The Exchange has asked the 

Commission to waive the 30-day 

operative delay so that the proposed 


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32For 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). 

33 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 91044 

(February 2, 2021), 86 FR 8662 (SR–NYSEArca– 

2021–07) (‘‘Notice’’). 

4See Securities Exchange Act Release No. 91360, 

86 FR 15763 (March 24, 2021) (SR–NYSEArca– 

2021–07). 

5See Securities Exchange Act Release No. 91785 

(May 6, 2021), 86 FR 26082 (May 12, 2021) (SR– 

NYSE–2021–05, SR–NYSENAT–2021–01, SR– 

NYSEArca–2021–07, SR–NYSEAMER–2021–04, 

NYSECHX–2021–01). 

6See, respectively, letter dated July 6, 2021 from 

Elizabeth K. King, Chief Regulatory Officer, ICE, 

General Counsel and Corporate Secretary, NYSE to 

Vanessa Countryman, Secretary, Commission. All 

comments received by the Commission on the 

proposed rule change are available on the 

Commission’s website at: https://www.sec.gov/ 

comments/sr-nyse-2021-05/srnyse202105.htm. 

7 15 U.S.C. 78s(b)(2). 

8See supra note 3. 

9 15 U.S.C. 78s(b)(2). 

10 17 CFR 200.30–3(a)(12). 

rule change may become operative upon 

filing. The Exchange’s proposal does not 

raise any new or novel issues. 

Therefore, the Commission believes that 

waving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest. 

Accordingly, the Commission 

designates the proposed rule change to 

be operative on upon filing.32

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– 

BX–2021–032 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–BX–2021–032. 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 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–BX–2021–032 and should 

be submitted on or before August 26, 

2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.33

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–16677 Filed 8–4–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92531; File No. SR– 

NYSEArca–2021–07] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Designation of a 

Longer Period for Commission Action 

on Proceedings To Determine Whether 

To Approve or Disapprove a Proposed 

Rule Change To Amend NYSE Arca’s 

Co-Location Services and Fee 

Schedule To Add Two Partial Cabinet 

Solution Bundles 

July 30, 2021. 

On January 19, 2021, NYSE Arca, Inc. 

(‘‘NYSE Arca’’ 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 amend the Exchange’s colocation rules to add two partial cabinet 

solution bundles. The proposed rule 

change was published for comment in 

the Federal Register on February 8, 

2021.3 On March 18, 2021, the 

Commission extended the time period 

within which to approve the proposed 

rule change, disapprove the proposed 

rule change, or institute proceedings to 

determine whether to approve or 

disapprove the proposed rule change, to 

May 9, 2021.4 On May 6, 2021, the 

Commission instituted proceedings to 

determine whether to approve or 

disapprove the proposed rule change.5

The Commission received a comment 

letter on the proposal from the 

Exchange.6

Section 19(b)(2) of the Act 7 provides 

that, after initiating proceedings, the 

Commission shall issue an order 

approving or disapproving the proposed 

rule change not later than 180 days after 

the date of publication of notice of the 

filing of the proposed rule change. The 

Commission may extend the period for 

issuing an order approving or 

disapproving the proposed rule change, 

however, by not more than 60 days if 

the Commission determines that a 

longer period is appropriate and 

publishes the reasons for such 

determination. The proposed rule 

change was published for comment in 

the Federal Register on February 8, 

2021.8 The 180th day after publication 

of the Notice is August 7, 2021. The 

Commission is extending the time 

period for approving or disapproving 

the proposal for an additional 60 days. 

The Commission finds that it is 

appropriate to designate a longer period 

within which to issue an order 

approving or disapproving the proposed 

rule change so that it has sufficient time 

to consider the proposed rule changes 

along with the comment received. 

Accordingly, the Commission, pursuant 

to Section 19(b)(2) of the Act,9

designates October 6, 2021, as the date 

by which the Commission should either 

approve or disapprove the proposed 

rule change (File No. SR–NYSEArca– 

2021–07). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–16674 Filed 8–4–21; 8:45 am] 

BILLING CODE 8011–01–P 


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