Federal Register / Vol. 87, No. 103 / Friday, May 27, 2022 / Notices 32203 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

with different power system 

characteristics, and potentially 

electrifying significant sectors of the 

economy. The Council grappled 

throughout the power plan process, 

including through consideration of the 

comments received on the draft, with a 

host of issues arising out of that 

transformation. 

At the Council’s regularly scheduled 

public meeting in February 2022, held 

in Portland, Oregon via webinar, the 

Council formally adopted the 2021 

Northwest Power Plan. The revised 

power and conservation plan meets the 

requirements of the Northwest Power 

Act, which specifies the components the 

power plan is to have, including an 

energy conservation program, a 

recommendation for research and 

development; a methodology for 

determining quantifiable environmental 

costs and benefits; a 20-year demand 

forecast; a forecast of power resources 

that the Bonneville Power 

Administration will need to meet its 

obligations; and an analysis of reserve 

and reserve reliability requirements. 

The power and conservation plan also 

includes the Council’s Columbia River 

Basin Fish and Wildlife Program, as 

amended pursuant to Section 4(h) under 

the Northwest Power Act prior to 

beginning this review of the power plan. 

The Council followed the adoption of 

the 2021 Northwest Power Plan with a 

decision at its regular monthly meeting 

in May 2022, in Whitefish, Montana, to 

approve a Statement of Basis and 

Purpose and Response to Comments to 

accompany the final plan. 

(Authority: 16 U.S.C. 839 et seq.) 

John Shurts, 

General Counsel. 

[FR Doc. 2022–11472 Filed 5–26–22; 8:45 am] 

BILLING CODE P 

OFFICE OF PERSONNEL 

MANAGEMENT 

Submission for Review: RI 20–126, 

Certification of Qualifying District of 

Columbia Service Under Section 1905 

of Public Law 111–84 (OMB No. 3206– 

0268) 

AGENCY: Office of Personnel 

Management. 

ACTION: 60-Day notice and request for 

comments. 

SUMMARY: The U.S. Office of Personnel 

Management (OPM) offers the public 

and other federal agencies the 

opportunity to comment on an expiring 

information collection request (ICR), RI 

20–126, Certification of Qualifying 

District of Columbia Service. (OMB No. 

3206–0268). 

DATES: Comments are encouraged and 

will be accepted until July 26, 2022. 

ADDRESSES: You may submit comments, 

identified by docket number and title, 

by the following method: 

• Federal Rulemaking Portal: http://

www.regulations.gov. Follow the 

instructions for submitting comments. 

All submissions received must 

include the agency name and docket 

number for this document. The general 

policy for comments and other 

submissions from members of the public 

is to make these submissions available 

for public viewing at http://

www.regulations.gov as they are 

received without change, including any 

personal identifiers or contact 

information. 

FOR FURTHER INFORMATION CONTACT: A 

copy of this ICR with applicable 

supporting documentation may be 

obtained by contacting the Retirement 

Services Publications Team, U.S. Office 

of Personnel Management, 1900 E Street 

NW, Room 3316–L, Washington, DC 

20415, Attention: Cyrus S. Benson, or 

you may obtain this information by 

emailing Cyrus.Benson@opm.gov, 

sending a fax to (202)-606–0910, or 

calling (202)–606–4808. 

SUPPLEMENTARY INFORMATION: Form RI 

20–126, ‘‘Certification of Qualifying 

District of Columbia Service Under 

Section 1905 of Public Law 118–84,’’ is 

used to certify that an employee 

performed certain service with the 

District of Columbia (DC) that qualifies 

under 5 U.S.C. 8332, note, for 

determining retirement eligibility. 

However, this service cannot be used in 

the computation of a Civil Service 

Retirement System (CSRS) or Federal 

Employees’ Retirement System (FERS) 

retirement benefit. 

As required by the Paperwork 

Reduction Act of 1995, Public Law 104– 

13, 109 Stat. 163 (1995) (codified at 44 

U.S.C. chapter 35), and as amended by 

the Clinger-Cohen Act of 1994, Public 

Law 104–106, divs. D and E, 110 Stat. 

642 (1996), OPM is soliciting comments 

for this collection of information (OMB 

No. 3206–0268). The Office of 

Management and Budget is particularly 

interested in comments that consider 

the following: 

1. Whether the proposed collection of 

information is necessary for the proper 

performance of functions of the agency, 

including whether the information will 

have practical utility; 

2. The accuracy of the agency’s 

estimate of the burden of the proposed 

collection of information, including the 

validity of the methodology and 

assumptions used; 

3. Whether the quality, utility, and 

clarity of the information collected 

could be enhanced; and 

4. Whether the burden of the 

collection of information could be 

minimized on those who are responsible 

for providing this information, 

including through the use of appropriate 

automated, electronic, mechanical, or 

other technological collection 

techniques or other forms of information 

technology (e.g., permitting electronic 

submissions of responses). 

Analysis 

Agency: Retirement Services, Office of 

Personnel Management. 

Title: Certification of Qualifying 

District of Columbia Service under 

Section 1905 of Public Law 111–84. 

OMB Number: 3206–0268. 

Frequency: On occasion. 

Affected Public: Individuals or 

Households. 

Number of Respondents: 1,000. 

Estimated Time per Respondent: 30 

minutes. 

Total Burden Hours: 500. 

U.S. Office of Personnel Management. 

Kellie Cosgrove Riley, 

Director, Office of Privacy and Information 

Management. 

[FR Doc. 2022–11466 Filed 5–26–22; 8:45 am] 

BILLING CODE 6325–38–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94959; File No. SR– 

NYSEArca–2022–31] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of Proposed 

Rule Change To Amend Rule 6.64P–O 

May 23, 2022. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that, on May 20, 

2022, NYSE Arca, Inc. (‘‘NYSE Arca’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the self-regulatory 

organization. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 


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32204 Federal Register / Vol. 87, No. 103 / Friday, May 27, 2022 / Notices 

4Rule 6.64P–O (the ‘‘Pillar Rule’’) covers the 

opening and reopening of option series, which 

process is identical on the Pillar trading platform. 

As such, the Exchange will simply refer to the 

‘‘opening’’ of a series herein. The Exchange notes 

that because it has not yet migrated to the Pillar 

platform, Rule 6.64–O continues to apply to the 

opening process, which rule is not being modified 

by this filing. The Exchange has announced July 11, 

2022 as the planned migration date for Pillar, as 

announced here: https://www.nyse.com/traderupdate/history#110000421498. 

5 ‘‘Auction Process’’ refers to the process that 

begins when the Exchange receives an Auction 

Trigger for a series and ends when the Auction is 

conducted. See Rule 6.64P–O(a)(5). 

6 ‘‘Auction Trigger’’ refers to the information 

disseminated by the Primary Market in the 

underlying security that triggers the Auction 

Process for a series to begin. See Rule 6.64P–O(a)(7). 

7 ‘‘Rotational Quote’’ refers to the highest Market 

Maker bid and lowest Market Maker offer on the 

Exchange when the Auction Process begins and 

such a Rotational Quote will be updated (for price 

and size) during the Auction Process. See Rule 

6.64P–O(a)(13). 

8 ‘‘Auction’’ refers to the opening or reopening of 

a series for trading either with or without a trade. 

See Rule 6.64P–O(a)(1). 

9See Rule 6.64P–O(d)(2). Rule 6.64P–O(d)(3) 

specifies the parameters of the Opening MMQ 

Timers, which are designed to encourage (but not 

require) any Market Maker(s) assigned to an option 

series to submit Legal Width Quotes in connection 

with the Auction Process. The Exchange proposes 

a non-substantive change of ‘‘30’’ to ‘‘thirty’’ 

regarding the Opening MMQ Timer(s), which 

would add clarity and internal consistency to the 

to rule. See proposed Rule 6.64P–O(d)(3). 

10See Rule 6.64P–O(a)(10)(A)–(C). The maximum 

spread differential for a given series or class of 

options may be modified by a Trading Official. See 

Rule 6.64P–O(a)(10)(C). 

11See Rule 6.64P–O(a)(8) (defining Calculated 

NBBO). 

12 ‘‘Matched Volume’’ refers to the number of buy 

and sell contracts that can be matched at the 

Indicative Match Price, excluding IO Orders. See 

Rule 6.64P–O(a)(11). An Imbalance Offset Order 

(‘‘IO Order’’) is a Limit Order that is to be traded 

only in an Auction. See Rule 6.62P–O(c)(3). 

13 ‘‘Auction Collar’’ refers to the price collar 

thresholds for the Indicative Match Price for an 

Auction, with the upper Auction Collar being the 

offer of the Legal Width Quote and the lower 

Auction Collar being the bid of the Legal Width 

Quote, provided that if the bid of the Legal Width 

Quote is zero, the lower Auction Collar will be one 

MPV above zero for the series. And, if there is no 

Legal Width Quote, the Auction Collars will be 

published in the Auction Imbalance Information as 

zero. See Rule 6.64P–O(a)(2). 

14See Rule 6.64P–O(d)(2)(A). ‘‘Indicative Match 

Price’’ refers to the price at which the maximum 

number of contracts can be traded in an Auction, 

including the non-displayed quantity of Reserve 

Orders and excluding IO Orders, subject to the 

Auction Collars. If there is no Legal Width Quote, 

the Indicative Match Price included in the Auction 

Imbalance Information will be calculated without 

Auction Collars. See Rule 6.64P–O(a)(9). 

15See Rule 6.64P–O(d)(2)(B). 

16See Rule 6.64P–O(d)(4)(A). 

17See Rule 6.64P–O(d)(4)(B). 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Rule 6.64P–O (Auction Process). The 

proposed change is available on the 

Exchange’s website at www.nyse.com, at 

the principal office of the Exchange, and 

at the Commission’s Public Reference 

Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

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

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to modify 

Rule 6.64P–O regarding the automated 

process for both opening and reopening 

trading in a series on the Exchange on 

Pillar as set forth below.4

Current Pillar Auction Process 

Rule 6.64P–O(d) sets forth the 

Auction Process.5 Per Rule 6.64P– 

O(d)(1), once the Exchange receives the 

Auction Trigger for a series,6 the 

Auction Process begins and the 

Exchange sends a Rotational Quote 7 to 

both OPRA and proprietary data feeds 

indicating that the Exchange is in the 

process of transitioning from a pre-open 

state to continuous trading for that 

series. 

Per Rule 6.64P–O(d)(2), once a 

Rotational Quote has been sent, the 

Exchange conducts an Auction,8

provided ‘‘there is both a Legal Width 

Quote and, if applicable, Market Maker 

quotes with a non-zero offer in the 

series’’ within the Opening Timer(s), per 

Rule 6.64P–O(d)(3).9 The Exchange 

deems the Legal Width Quote 

requirement satisfied if the Calculated 

NBBO (described below) for the series is 

uncrossed, contains a non-zero offer, 

and has a spread that does not exceed 

a maximum differential that is 

determined by the Exchange on a class 

basis and announced by Trader 

Update.10 The Calculated NBBO is 

comprised of the highest bid and lowest 

offer among all Market Maker quotes 

and the ABBO during the Auction 

Process.11 A Calculated NBBO does not 

require both Market Maker quotes and 

ABBO to be present, and may be 

composed of Market Maker quotes only, 

of the ABBO only, or a combination 

thereof. 

If the foregoing requirements are met 

(i.e., per Rule 6.64P–O(d)(2)), the 

Exchange will conduct an Auction that 

will either result in a trade or in a quote 

depending on whether there is (or is 

not) Matched Volume 12 that can trade at 

or within the Auction Collars.13 If there 

is Matched Volume that can trade at or 

within the Auction Collars, the Auction 

will result in a trade at the Indicative 

Match Price.14 However, if there is no 

Matched Volume that can trade at or 

within the Auction Collars, the Auction 

will instead result in a quote and the 

Exchange transitions to continuous 

trading as set forth in Rule 6.64P–O(f).15

Finally, per Rule 6.64P–O(d)(4), 

unless otherwise specified by Trader 

Update, for the first ninety seconds of 

the Auction Process (inclusive of the 

thirty-second Opening MMQ Timer(s)), 

if there is no Legal Width Quote, the 

Exchange will not conduct an Auction, 

even if there is Matched Volume, i.e., 

the series will not open. After the first 

ninety seconds of the Auction Process, 

if there is no Matched Volume and the 

Calculated NBBO is wider than the 

Legal Width Quote, is not crossed, and 

does not contain a zero offer, the 

Exchange will first cancel any Market 

Orders and MOO Orders and then 

transition the option series to 

continuous trading per Rule 6.64P– 

O(f).16 Thus, per Rule 6.64P–O(d)(4)(A), 

if after the first ninety seconds of the 

Auction Process there is Matched 

Volume but the other elements of this 

provision are satisfied, the series will 

not open and will remain unopened and 

the Exchange will not transition to 

continuous trading until the earlier of (i) 

a Legal Width Quote is established and 

an Auction can be conducted; (ii) the 

series can be opened as provided for in 

paragraph (d)(4)(A); (iii) the series is 

halted; or (iv) the end of Core Trading 

Hours.17 In other words, a series that 

does not meet the requirements of Rule 

6.64P–O(d)(4)(A) may be delayed in 

opening until one of the conditions set 

forth in Rule 6.64P–O(d)(4)(B) occur. 

Proposed Change to Auction Process 

The Exchange notes that waiting for 

market conditions to change before 

transitioning to continuous trading per 

the current Pillar Rule may result in 

missed execution opportunities for 

eligible interest submitted to the 

Exchange during the pre-open state. 

Moreover, this potential (indefinite) 

delay is inconsistent with the 

Exchange’s intention of providing a 

timely and efficient Auction Process. As 


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18As described further below, consistent with 

Rule 6.64P–O(d)(2)(B), an Auction conducted per 

proposed Rule 6.64P–O(d)(4)(A) would open on a 

quote if there is no Matched Volume). 19See proposed Rule 6.64P–O(a)(5)(i). See Rule 

6.64P–O(d)(4) (providing that ‘‘[u]nless otherwise 

specified by Trader Update, for the first ninety 

seconds of the Auction Process . . . .’’ and 

‘‘[n]inety seconds after the Auction Process 

begins:’’). 

20See id. See proposed Rule 6.64P–O(d)(4)(A) 

(replacing reference to the first ninety-seconds after 

the Auction Process with the proposed definition of 

the ‘‘initial Auction Process time period,’’ which 

would add clarity and internal consistency to the 

Rule, making it easier to navigate and comprehend). 

21See Rule 6.64P–O(a)(10)(C) (which also 

provides a Trading Official may establish maximum 

differentials for one or more series or classes of 

options, which differ from those established by the 

Exchange). 

22To qualify as a Legal Width Quote, the 

Calculated NBBO must also be uncrossed and must 

contain a non-zero offer, which requirements are 

not being modified by this rule change. See Rule 

6.64P–O(a)(10)(A)–(B). 

23See proposed Rule 6.64P–O(a)(10)(D). 

24Similar to the Exchange, other options 

exchanges have rules granting them broad 

discretion to modify the opening parameters for 

each option series, which modifications are 

disseminated or announced to market participants 

over data feeds or trader notice. See, e.g., Cboe 

Options Exchange, Inc. (‘‘Cboe’’) Rule 5.31(a) 

(definitions of Maximum Composite Width and 

Opening Collar, each of which the exchange ‘‘may 

modify during the opening auction process (which 

modifications the Exchange disseminates to all 

subscribers to the Exchange’s data feeds that deliver 

opening auction updates)’’); Cboe EDGX Options 

Exchange, Inc. (‘‘EDGX’’) Rule 21.7(a) (same); Cboe 

BZX Options Exchange, Inc. (‘‘BZX’’) Rule 21.7(a) 

(definitions of Maximum Composite Width and 

Opening Collar); Cboe C2 Exchange Inc. (‘‘C2’’) Rule 

6.11(a) (same); see also Miami Securities Exchange, 

Inc. (‘‘MIAX’’) Rule 503(f)(2) (which permits MIAX 

to determine by circular an acceptable range in 

which openings are permissible if there is no valid 

width national best bid or offer (‘‘NBBO’’)). 

25See, e.g., Rule 6.64P–O(d)(2)(A)–(B) (describing 

the process of opening a series with a trade or a 

quote depending on whether there is Matched 

Volume). 

26See proposed Rule 6.64P–O(d)(4) (which 

includes the aforementioned non-substantive 

change to refer to the newly defined ‘‘initial 

Auction Process time period’’ rather than the first 

ninety seconds after the Auction Process). The 

Exchange is not altering Auction functionality for 

the initial Auction Process time period. See id. 

27See proposed Rule 6.64P–O(d)(4)(B) (setting 

forth the necessary market conditions to open a 

series that has not opened per paragraph (d)(4) of 

the Pillar Rule). If the Exchange opens a series per 

Rule 6.64P–O(d)(4)(A), it first cancels any Market 

Order or MOO Orders before conducting an Auction 

and transitioning to continuous trading. See 

proposed Rule 6.64P–O(d)(4). 

28See proposed Rule 6.64P–O(d)(4)(A). See also 

proposed Rule 6.64P–O(a)(10)(D). 

such, the Exchange proposes to modify 

Rule 6.64P–O. In short, the Exchange 

proposes that after the first ninety 

seconds of the Auction Process, the 

Exchange would conduct an Auction of 

marketable interest based on the spread 

of the then-current market conditions 

(i.e., a Calculated NBBO that is 

uncrossed with a non-zero offer), 

provided that if the Calculated NBBO 

exceeds the Legal Width Quote 

differential established per Rule 6.64P– 

O(a)(10)(C) the Exchange would cancel 

any Market Orders or MOO Orders 

before conducting the Auction. As 

further proposed, marketable Limit 

Orders would trade in the Auction 

bound by the Calculated NBBO (i.e., the 

highest bid and lowest offer among all 

Market Maker quotes and the ABBO), 

which executions may be earlier and 

more efficient than afforded under the 

current Pillar Rule. If there is no 

marketable interest after such 

cancelation, the Exchange would open 

on a quote.18

The Exchange believes the proposed 

change to the Pillar Rule (the details of 

which are described below) would 

promote competitive liquidity by 

allowing series to open at then-current 

market prices and would promote a fair 

and orderly opening process by 

improving the speed and efficiency of 

the Auction Process without impairing 

price discovery. 

First, the Exchange proposes to codify 

existing rule text into the defined phrase 

the ‘‘initial Auction Process time 

period’’ in proposed Rule 6.64P– 

O(a)(5)(i). As proposed, the initial 

Auction Process time period would 

mean, ‘‘unless otherwise specified by 

Trader Update, the first ninety seconds 

after the commencement of the Auction 

Process,’’ which definition simply 

codifies (and relocates) identical text 

that appears in the preamble of both 

sentences in Rule 6.64P–O(d)(4).19 The 

Exchange believes this proposed change 

is non-substantive and would 

streamline and add clarity to the 

existing rule.20

Next, the Exchange proposes to 

modify the definition of Legal Width 

Quote, including by leveraging the 

newly defined ‘‘initial Auction Process 

time period.’’ Rule 6.64P–O(a)(10)(C) 

provides that, to be deemed a Legal 

Width Quote, the spread of the 

Calculated NBBO may not exceed a 

maximum differential that is 

determined by the Exchange on a class 

basis and announced by Trader 

Update.21

As such, by rule, the Exchange has 

discretion to establish for each option 

class the maximum allowable spread of 

the Calculated NBBO within which the 

Exchange will conduct an Auction, 

provided that the other elements of a 

Legal Width Quote are met.22 Nothing in 

Rule 6.64P–O(a)(10)(C) precludes the 

Exchange from establishing one set of 

Calculated NBBO spreads for the first 

ninety seconds of the Auction Process 

and a second (wider) set of Calculated 

NBBO spreads for any time after the first 

ninety seconds. However, in the interest 

of clarity and for the avoidance of 

potential confusion, the Exchange 

proposes to expand the definition of 

Legal Width Quote (rather than modify 

by Trader Update) in the Pillar Rule to 

provide that ‘‘after the initial Auction 

Process time period, the Exchange will 

not impose limits for the maximum 

differential for the spread between the 

Calculated NBBO.’’ 23

The Exchange believes adopting Rule 

6.64P–O(a)(10)(D) is consistent with its 

authority under the Pillar Rule to 

determine the maximum allowable 

Calculated NBBO spread to qualify a 

series as having a Legal Width Quote. 

However, this rule change would make 

clear that the Exchange would no longer 

impose these established spread limits 

(as announced by Trader Notice per 

Rule 6.64P–O(a)(10)(C)) after the initial 

Auction Process time period. The 

Exchange believes this rule change 

would add clarity and transparency to 

the Auction Process to the benefit of all 

market participants.24 Because the 

Auction Process, including the Auction 

Collars, the presence of Matched 

Volume, and the determination of the 

Indicative Match Price, are dependent 

upon a Calculated NBBO that qualifies 

as a Legal Width Quote, the Exchange 

proposes that any Auction conducted 

consistent with proposed 6.64P– 

O(a)(10)(D) would follow the current 

Auction Process except as described 

below.25

The Exchange proposes to amend 

Rule 6.64P–O(d)(4) regarding the 

conduct of an Auction after the 

conclusion of the initial Auction 

Process time period (i.e., after the first 

ninety seconds).26 As noted herein, the 

Pillar functionality (per Rule 6.64P– 

O(d)(4)(A)) permits a series to open 

based on a ‘‘wide’’ Calculated NBBO 

(that is uncrossed with a non-zero offer), 

but only if there is no Matched Volume, 

which requirement may delay openings 

and result in missed execution 

opportunities.27 To address this 

unintended potential delay, the 

Exchange proposes that after the initial 

Auction Process time period and 

consistent with proposed paragraph 

(a)(10)(D) of this Rule (which removes 

the limit on the maximum allowable 

Calculated NBBO spread), the Exchange 

would conduct an Auction regardless of 

Matched Volume as long as the 

Calculated NBBO is not crossed, and 

does not contain a zero offer.28 This 

proposed functionality would allow 

marketable Limit Orders to execute in 

the Auction, which may result in certain 

option series opening earlier than are 

opened under the current rule and 


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29See id. See also Rule 6.64P–O(a)(9)(A) 

(providing, in relevant part, that ‘‘the Indicative 

Match Price would not be lower (higher) than the 

highest (lowest) price of a Limit Order to buy (sell) 

ranked Priority 2—Display Orders that is eligible to 

participate in the Auction’’). In addition, consistent 

with the proposal, the Exchange proposes to remove 

as inapplicable the text in current Rule 6.64P– 

O(d)(4)(A) indicating that the ‘‘Auction is not 

intended to end with a trade, but it may result in 

a trade even if there is no Legal Width Quote if 

orders or quotes arrive during the period when the 

Exchange is evaluating the status of orders and 

quotes’’ as well as text indicating that the Exchange 

would ‘‘transition to continuous trading as 

described in paragraph (f) of this Rule.’’ See 

proposed Rule 6.64P–O(d)(4)(A). 

30See Rule 6.64P–O(d)(4)(A)(i) (providing that 

Market Orders and MOO Orders are cancelled 

‘‘[a]ny time a series is opened or reopened when 

there is no Legal Width Quote,’’ i.e., when the 

Calculated NBBO exceeds the maximum allowable 

spread limit set forth in Rule 6.64P–O(a)(10)(C)’’). 

31See id. To avoid potential confusion regarding 

the distinct handling of Market Orders and MOO 

Orders under proposed Rule 6.64P–O(d)(4)(A) 

depending upon whether an Auction is conducted 

based on a Calculated NBBO spread that is in 

compliance with Rule 6.64P–O(a)(10)(C) or with 

proposed Rule 6.64P–O(a)(10)(D), the Exchange has 

intentionally avoided reference to the presence of 

a Legal Width Quote in the proposed Rule. See 

proposed Rule 6.64P–O(d)(4)(A). 

32See, e.g., Rule 6.64P–O(d)(2)(A)–(B) (providing 

that ‘‘[i]f there is Matched Volume that can trade 

at or within the Auction Collars, the Auction will 

result in a trade at the Indicative Match Price’’ or, 

‘‘[i]f there is no Matched Volume that can trade at 

or within the Auction Collars,’’ the Auction will not 

result in a trade and the Exchange will transition 

to continuous trading as described in paragraph (f) 

of this Rule and the Auction will result in a quote’’). 

33See proposed Rule 6.64P–O(d)(4)(A). See 

proposed Rule 6.64P–O(d)(4)(B). The Exchange also 

proposes conforming changes to re-number the 

remaining paragraphs in light of the proposed 

deletion, which would add clarity and internal 

consistency to the Rule. See id. 

34Options exchanges have varying opening 

processes and have made separate determinations 

on what constitutes individual, reasonable opening 

market widths. Thus, if other options exchanges 

opened a series with a market width, it is 

reasonable to open the series for trading on the 

Exchange as well (as orders submitted to other 

exchanges may be trading at those widths). 

35Although the intermarket linkage rules exempt 

from trade-through liability trades occurring during 

the opening process, the Exchange would continue 

to restrict transactions occurring at the open to the 

NBBO. See Rule 6.94–O(b)(2) (exempting from 

trade-through liability those transactions that 

‘‘traded through a Protected Quotation being 

disseminated by an Eligible Exchange during a 

trading rotation’’). A ‘‘Protected Quotation’’ is the 

Best Bid or Best Offer disseminated by OPRA and 

displayed by an Eligible Exchange. See Rule 6.92– 

O(15)–(16). 

36See Rule 6.64P–O(b)(2)(A) (A) (providing that, 

‘[i]f there is Matched Volume that can trade at or 

within the Auction Collars, the Auction will result 

in a trade at the Indicative Match Price). See also 

Rule 6.64–O(a)(3),(9), and (11) (defining Auction 

Collars, Indicative Match Price, and Matched 

Volume, respectively). 

increase execution opportunities for 

Limit Orders at then-current market 

prices.29

Although Limit Orders would be 

eligible to execute based on this 

proposed functionality, whether a 

Market Order or MOO Order may 

participate in the proposed Auction 

depends on the width of the market at 

the time of the Auction. Specifically, as 

further proposed, if the Calculated 

NBBO spread is wider than the 

differential established per paragraph 

(a)(10)(C) of this Rule, the Exchange 

would cancel Market Orders and MOO 

Orders before conducting the Auction, 

which proposed handling is consistent 

with the current Pillar Rule.30

Conversely, as proposed, and consistent 

with the current Pillar Rule, Market 

Orders and MOO Orders are not 

canceled and will participate in an 

Auction that is based on a Calculated 

NBBO that is less than or equal to the 

Calculated NBBO spread limit 

established per Rule 6.64P– 

O(a)(10)(C).31 As further proposed, after 

the cancelation of any Market Orders or 

MOO Orders as applicable, the Auction 

Process will proceed consistent with 

paragraph (d)(2)(A)–(B) of this Rule and 

the Exchange will execute Matched 

Volume (if any) to the extent possible 

before transitioning to continuous 

trading.32

Taken together, the proposed changes 

to Rule 6.64P–O(a)(10)(D) and (d)(4) 

would allow any series that has not 

opened by the end of the initial Auction 

Process time period the ability to open 

based on a Legal Width Quote derived 

from then-market conditions. As such, 

the Exchange proposes to modify Rule 

6.64P–O(d)(4)(B) to update the crossreference from paragraph (d)(4)(A) to 

paragraph (d)(4) and to eliminate as 

superfluous paragraph (d)(4)(B)(ii), 

which refers to waiting until ‘‘the series 

can be opened as provided for in 

paragraph (d)(4)(A).’’ 33 The Exchange 

believes these proposed conforming 

changes are necessary given that the 

proposed changes to Rule 6.64P– 

O(a)(10)(D) (removing the limit on the 

Calculated NBBO spread to qualify as 

Legal Width Quote) and (d)(4)(A) 

(addressing the conduct of an Auction 

after the initial Auction Process time 

period under the expanded definition of 

Legal Width Quote) render paragraph 

(d)(4)(B)(ii) of the Rule unnecessary. 

The Exchange notes that it is not 

making any changes to the requirements 

to conduct an Auction during the initial 

Auction Process time period. Instead, 

the proposed changes relate solely to 

those series that remain unopened after 

the conclusion of the initial Auction 

Process time period because the 

Calculated NBBO spread is too wide. 

The Exchange believes that the initial 

Auction Process time period affords 

market participants sufficient 

opportunity to absorb available pricing 

information, including Market Makers 

that are generally responsible for pricing 

the market. If the Calculated NBBO 

remains wide by the end of the initial 

Auction Process time period, the 

Exchange believes it is unlikely to 

tighten if the Exchange were to further 

delay the opening of a series. The 

Exchange has observed that on a typical 

trading day, in the current system, 

nearly 98% of all series are opened by 

9:32 a.m. Eastern Time. As such, the 

Exchange anticipates that the majority 

of series would be opened within ninety 

seconds of the Auction Process and 

would not be impacted by the proposed 

rule change. However, for the minority 

of option series that have not opened 

within the first ninety seconds, the 

Exchange believes it is necessary and 

appropriate to allow such series to open 

based on prices consistent with thencurrent market conditions, provided the 

Calculated NBBO for the series is not 

crossed, and does not contain a zero 

offer. 

The Exchange believes the proposed 

modification to the Auction Process 

would continue to protect Market 

Orders and MOO Orders from being 

executed (by cancelling such orders 

before conducting the proposed 

Auction) when the Calculated NBBO 

spread exceeds the spread differential 

established per current Rule 6.64P– 

O(a)(10)(C) before conducting the 

proposed Auction. In addition, the 

proposed modification would allow any 

eligible Limit Orders to be executed in 

the proposed Auction, bound by the 

Calculated NBBO. The Calculated 

NBBO (even if wide) represents the bestpriced quotes by Market Makers (which 

participants generally are responsible 

for pricing the market) and/or the 

ABBO, the presence of which indicates 

that another market has opened.34

Consistent with current functionality 

(and with the approved Pillar Rule), the 

Exchange would not permit any opening 

transactions to trade through any betterpriced interest on any Away Market, 

even it is permitted to do so.35 Rather, 

because interest in the Auction would 

not trade outside of the Calculated 

NBBO (which defines the then-current 

market for the series), any Limit Orders 

executed in the proposed Auction 

would, bound by Auction Collars, 

would trade at a price that is equal to 

or better than the price(s) available at 

other exchanges.36 Per Rule 6.64P– 

O(f)(3)(A), any interest remaining after 

such Action is then evaluated for 

potential routing prior to being posted 

to the Consolidated Book. Further, the 

Exchange notes that there are other 

price protections available to limit the 


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37See Rule 6.41P–O(a)(1), (b) (regarding the 

Arbitrage Check, which is applied pre-open). The 

Exchange notes that the price protection 

mechanisms it employs during continuous trading 

are based on the NBBO, or Auction Prices as 

applicable. See, e.g., Rules 6.41P–O(c)(4)(B) 

(regarding the Intrinsic Value Check); Rule 6.62P– 

O(a)(4)(A) (regarding Limit Order Price Protection); 

and Rule 6.62P–O(a)(4)(B) (regarding Trading 

Collars). 

38See proposed Rule 6.64P–O(d)(2) (providing 

that ‘‘[o]nce a Rotational Quote has been sent, the 

Exchange will conduct an Auction when there is 

both a Legal Width Quote and, if applicable, Market 

Maker quotes with a non-zero offer in the series 

(subject to the Opening MMQ Timer(s) 

requirements in paragraph (d)(3) of this Rule’’) and 

Rule 6.64P–O(d)(3)(C)(i) (providing that ‘‘[t]he 

Exchange will conduct the Auction, without 

waiting for the Opening MMQ Timer to end, as 

soon as there is both a Legal Width Quote and at 

least two quotes with a non-zero offer submitted by 

assigned Market Maker(s)’’) and (d)(3)(C)(ii) 

(providing that ‘‘[i]f the Exchange has not received 

at least two quotes with a non-zero offer from any 

Market Maker(s) assigned to a series by the end of 

the Opening MMQ Timer, the Exchange will begin 

a second Opening MMQ Timer’’). 

39See proposed Rule 6.37–O(c). 

40See proposed Rule 6.62P–O(e)(3)(C)(ii). 

41See proposed Rule 6.62P–O(h)(6)(B). 

42 15 U.S.C. 78f(b). 

43 15 U.S.C. 78f(b)(5). 

44See supra note 24 (citing the discretion of Cboe 

and its affiliates and MIAX to modify the opening 

auction parameters). 

risk of executions at a wider market 

price.37 Thus, the Exchange believes 

that the risk of an extreme execution 

based on the Calculated NBBO available 

after the initial Auction Process time 

period may be mitigated for the 

aforementioned reasons. The Exchange 

believes that, on balance, the benefits to 

market participants of having the series 

open earlier outweighs this mitigated 

risk. 

Finally, the Exchange also proposes to 

modify the requirements to open a 

series during the initial Auction Process 

time period for option series with two 

or more assigned Market Makers, per 

Rule 6.64P–O(d)(3)(C). Per Rule 6.64P– 

O(3)(C)(i), if there are two or more 

Market Makers assigned to a series, the 

Exchange will conduct the Auction, 

without waiting for the Opening MMQ 

Timer to end, as soon as there is both 

a Legal Width Quote and at least two 

assigned Market Makers have submitted 

a quote with a non-zero offer. Per Rule 

6.64P–O(3)(C)(ii), if at least two Market 

Makers assigned to a series have not 

submitted a quote with a non-zero offer 

by the end of the Opening MMQ Timer, 

the Exchange will begin a second 

Opening MMQ Timer. The Exchange 

proposes to modify these provisions to 

provide that the Exchange would 

require that at least two quotes with 

non-zero offers be submitted during the 

Opening MMQ Timer, which quotes 

may be sent by one or more Market 

Makers.38

The Exchange believes that the 

proposed change continues to encourage 

(but not require) Market Makers to 

participate at the open, which may 

increase the availability of Legal Width 

Quotes in more series, thereby allowing 

more series to open in a timely manner. 

The Exchange believes that expanding 

the opportunities for each Market Maker 

to enter the market—whether by each 

Market Maker submitting one quote or 

a single Market Maker submitting two 

quotes—could result in the depth of 

liquidity that market participants have 

come to expect in options with multiple 

assigned Market Makers, and a more 

stable trading environment. The 

Exchange believes the proposed rule 

change would provide more flexibility 

in terms of how market depth is 

achieved (i.e., based on quotes from a 

single Market Maker as opposed to two) 

and may result in a more timely and 

efficient opening process. Further, the 

proposed change may increase the 

availability of Legal Width Quotes in 

more series and would add clarity and 

transparency to Exchange rules. 

Other Exchange Rules: Proposed NonSubstantive or Clarifying Changes 

The Exchange also proposes to make 

several clarifying or non-substantive 

changes to certain of its rules. First, the 

Exchange proposes to modify paragraph 

(c) of Rule 6.37–O (Obligations of 

Market Makers) regarding ‘‘Unusual 

Conditions—Auctions’’ to add an open 

parenthesis in the cross reference to 

Rule 6.64P–O(a)(10).39 The Exchange 

believes this proposed change would 

correct an inadvertent omission and 

would add clarity and transparency to 

Exchange rules. 

Next, the Exchange proposes to 

correct several cross-references in Rule 

6.62P–O (Orders and Modifiers). The 

Exchange proposes to update the 

reference in Rule 6.62P–O(e)(3)(C)(ii) 

regarding Day ISO ALO Orders to 

correctly cross-reference paragraphs 

(e)(2)(C)–(F) (rather than to paragraphs 

(e)(2)(C)–(G)) to cover the processing of 

such ALO Orders once resting.40 The 

proposed change would correct an 

inadvertent error adding clarity and 

transparency to Exchange rules. 

Similarly, the Exchange proposes to 

update the reference in Rule 6.62P– 

O(h)(6)(B) to correctly cross-reference 

the defined term Complex Order, which 

is set forth in Rule 6.62P–O(f) (rather 

than paragraph (e)).41 The proposed 

change would correct an inadvertent 

error adding clarity and transparency to 

Exchange rules. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),42 in general, and furthers the 

objectives of Section 6(b)(5),43 in 

particular, because it is designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to foster 

cooperation and coordination with 

persons engaged in facilitating 

transactions in securities, to remove 

impediments to, and perfect the 

mechanism of, a free and open market 

and a national market system and, in 

general, to protect investors and the 

public interest. 

Proposed Change to Pillar Auction 

Process 

Overall, the Exchange believes the 

proposed changes to its Auction Process 

would promote a fair and orderly 

market by improving the speed and 

efficiency of the Exchange’s opening 

process without impairing price 

discovery, which should result in better 

and more consistent prices on Auction 

executions and facilitate a fair and 

orderly transition to continuous trading. 

As noted herein, the Exchange believes 

that the (continued) requirement that 

interest executed in an Auction must 

trade at or within the Calculated NBBO 

(which defines the then-current market 

for the series) would provide protection 

for such interest. 

The Exchange believes modifying the 

definition of Legal Width Quote to make 

clear that after the initial Auction 

Process time period the Exchange would 

no longer impose its own established 

limits on the maximum allowable 

Calculated NBBO spread to qualify a 

series as having a Legal Width Quote 

would promote just and equitable 

principles of trade and remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system and 

protect investors because it would add 

clarity and transparency to the Auction 

Process to the benefit of all market 

participants.44 The Exchange notes that 

it currently has discretion to establish 

for each option class the maximum 

allowable spread of the Calculated 

NBBO within which the Exchange will 

conduct an Auction, provided that the 

other elements of a Legal Width Quote 

are met, which authority is consistent 

with other options exchanges. Although 

the Exchange has rule authority (per 

current Rule 6.64P–O(a)(10)(C)) to 

establish one set of Calculated NBBO 

spreads for the first ninety seconds of 


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45Options exchanges have varying opening 

processes and have made separate determinations 

on what constitutes individual, reasonable opening 

market widths. Thus, if other options exchanges 

opened a series with a market width, it is 

reasonable to open the series for trading on the 

Exchange as well (as orders submitted to other 

exchanges may be trading at those widths). 

46Although the intermarket linkage rules exempt 

from trade-through liability trades occurring during 

the opening process, the Exchange would continue 

to restrict transactions occurring at the open to the 

NBBO. See Rule 6.94–O(b)(2) (exempting from 

trade-through liability those transactions that 

‘‘traded through a Protected Quotation being 

disseminated by an Eligible Exchange during a 

trading rotation’’). A ‘‘Protection Quotation’’ is the 

Best Bid or Best Offer disseminated by OPRA and 

displayed by an Eligible Exchange. See Rule 6.92– 

O(15)–(16). 

47See Rule 6.64P–O(b)(2)(A) (A) (providing that, 

‘[i]f there is Matched Volume that can trade at or 

within the Auction Collars, the Auction will result 

in a trade at the Indicative Match Price). See also 

Rule 6.64–O(a)(3),(9), and (11) (defining Auction 

Collars, Indicative Match Price, and Matched 

Volume, respectively). 

48See Rule 6.41P–O(a)(1), (b) (regarding the 

Arbitrage Check, which is applied pre-open). The 

Exchange notes that the price protection 

mechanisms it employs during continuous trading 

are based on the NBBO, or Auction Prices as 

applicable. See, e.g., Rules 6.41P–O(c)(4)(B) 

(regarding the Intrinsic Value Check); Rule 6.62P– 

O(a)(4)(A) (regarding Limit Order Price Protection); 

and Rule 6.62P–O(a)(4)(B) (regarding Trading 

Collars). 

49See supra notes 20, 26, 29 and 33. 

the Auction Process and a second 

(wider) set of Calculated NBBO spreads 

for any time after the first ninety 

seconds, it believes the proposed change 

to the definition of Legal Width Quote 

would help avoid potential investor 

confusion to the benefit of all market 

participants. 

The Exchange believes the proposal to 

amend Rule 6.64P–O(d)(4) to allow the 

Exchange to conduct an Auction after 

the conclusion of the initial Auction 

Process time period and consistent with 

proposed paragraph (a)(10)(D) of this 

Rule (i.e., without imposing certain 

limits established on the Calculated 

NBBO spread) would promote just and 

equitable principles of trade and remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system and 

protect investors. First, the Exchange 

believes that the proposal to wait a 

ninety-second initial Auction Process 

time period before removing the limits 

on the permissible Calculated NBBO 

spread to open a series (i.e., proposed 

Rule 6.64P–O(a)(10)(D)) would continue 

to provide opportunities for price 

discovery based on then-current market 

conditions, including affording 

sufficient time to Market Makers (who 

are generally responsible for pricing the 

market) to absorb available pricing 

information and, if so inclined, to 

update their quotes potentially resulting 

in tighter spreads. The Exchange has 

observed that on a typical trading day, 

in the current system, nearly 98% of all 

series are opened by 9:32 a.m. Eastern 

Time. As such, the Exchange anticipates 

that the majority of series would be 

opened within ninety seconds of the 

Auction Process and would not be 

impacted by the proposed rule change. 

For the minority of option series that 

have not opened within the first ninety 

seconds because of a ‘‘wide’’ Calculated 

NBBO, the Exchange believes it is 

unlikely that such spread would tighten 

if the Exchange were to further delay the 

opening of a series. Thus, the Exchange 

believes it is necessary and appropriate 

to allow such series to open based on 

prices consistent with then-current 

market conditions, provided the 

Calculated NBBO for the series is not 

crossed, and does not contain a zero 

offer. 

Further, the Exchange believes the 

proposed modification would promote 

just and equitable principles of trade 

and remove impediments to and perfect 

the mechanism of a free and open 

market and a national market system 

and protect investors because the 

proposed Auction Process would 

continue to protect Market Orders and 

MOO Orders from being executed (by 

cancelling such orders before 

conducting the proposed Auction) when 

the Calculated NBBO spread exceeds 

the spread differential established per 

(current) Rule 6.64P–O(a)(10)(C) before 

conducting the proposed Auction. In 

addition, the proposed modification 

would allow any eligible Limit Orders 

to be executed in the proposed Auction, 

bound by the Calculated NBBO. The 

Calculated NBBO (even if wide) 

represents the best-priced quotes by 

Market Makers (which participants 

generally are responsible for pricing the 

market) and/or the ABBO, the presence 

of which indicates that another market 

has opened.45

Consistent with current functionality 

(and with the approved Pillar Rule), the 

Exchange would not permit any opening 

transactions to trade through any betterpriced interest on any Away Market, 

even it is permitted to do so.46 Rather, 

because interest in the Auction would 

not trade outside of the Calculated 

NBBO (which defines the then-current 

market for the series), any Limit Orders 

executed in the proposed Auction 

would, bound by Auction Collars, 

would trade at a price that is equal to 

or better than the price(s) available at 

other exchanges.47 Per Rule 6.64P– 

O(f)(3)(A), any interest remaining after 

such Action is then evaluated for 

potential routing prior to being posted 

to the Consolidated Book. Further, the 

Exchange notes that there are other 

price protections available to limit the 

risk of executions at a wider market 

price.48 Thus, the Exchange believes 

that the risk of an extreme execution 

based on the Calculated NBBO available 

after the initial Auction Process time 

period may be mitigated for the 

aforementioned reasons. The Exchange 

believes that, on balance, the benefits to 

market participants of having the series 

open earlier outweighs this mitigated 

risk. 

The Exchange believes its proposal to 

modify the requirements to open a 

series for option series that have two or 

more assigned Market Makers would 

promote just and equitable principles of 

trade and remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system and protect investors because it 

would continue to provide Market 

Makers assigned to such series the 

opportunity to submit a quote while 

potentially promoting a more timely 

opening once at least two quotes (even 

if from a single Market Maker) have 

been submitted and would add clarity 

and transparency to Exchange rules. The 

Exchange believes the proposed rule 

change would provide more flexibility 

in terms how of market depth in the 

affected series is achieved (i.e., based on 

quotes from a single Market Maker as 

opposed to two) and may result in a 

more timely and efficient opening 

process. Further, the proposed change 

may increase the availability of Legal 

Width Quotes in more series and would 

add clarity and transparency to 

Exchange rules. Improving the validity 

of the opening price benefits all market 

participants and also benefits the 

reputation of the Exchange as being a 

venue that provides accurate price 

discovery. To the extent that this 

proposed rule change results in an 

option series opening sooner, which, in 

turn would increase the times during 

which investors may conduct trading in 

these options, this proposed change 

would benefit investors and the 

investing public. 

The Exchange believes that the 

proposed non-substantive and 

conforming changes to Rule 6.64P–O 

(including to paragraph (d)(4)(B)) would 

promote just and equitable principles of 

trade because such changes would 

streamline Rule 6.64P–O, thus adding 

clarity to the Auction Process making it 

easier to comprehend and navigate to 

the benefit of market participants and 

would promote transparency and 

internal consistency within Exchange 

rules making them easier to 

comprehend and navigate.49


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Federal Register / Vol. 87, No. 103 / Friday, May 27, 2022 / Notices 32209 

50See supra notes 39–41. 

51See, e.g., supra note 24 (citing the discretion of 

Cboe and its affiliates and MIAX to modify the 

opening auction parameters). 52See, e.g., Cboe and its affiliated exchanges. 

Additional Proposed Non-Substantive 

or Clarifying Changes to Exchange Rules 

The Exchange believes that the 

proposed non-substantive and clarifying 

changes that update/correct inaccurate 

references would promote transparency 

and internal consistency within 

Exchange rules making them easier to 

comprehend and navigate.50

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

Exchange operates in a competitive 

market and regularly competes with 

other options exchanges for order flow. 

The Exchange does not believe that the 

proposed rule change would impose any 

burden on intra-market competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act 

because all market participants may 

trade in any series that opens subject to 

the proposed (modified) opening 

process. 

The Exchange does not believe that 

the proposed rule change would impose 

any burden on intermarket competition 

that is not necessary or appropriate in 

furtherance of the purposes of the Act 

because it is designed to open series on 

the Exchange in a fair and orderly 

manner. The Exchange believes the 

proposed opening process will continue 

to provide market participants with an 

opportunity for price discovery based 

on then-current market conditions when 

the Exchange opens series for trading. 

This will facilitate the presence of 

sufficient liquidity in a series when it 

opens, and increase the ability of series 

to open at prices consistent with thencurrent market conditions (at the 

Exchange and on other exchanges). As 

noted herein, several options exchanges 

likewise have discretion to modify their 

opening procedures to address thencurrent market conditions.51 Further, 

the Exchange does not believe that the 

proposed rule change will impose any 

burden on intra-market competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act, 

as all market participants that 

participate in the opening process may 

benefit equally from the proposal, as the 

rules of the Exchange apply equally to 

all market participants. 

The Exchange does not believe that 

the proposed change to open those 

series with more than one assigned 

Market Maker based on two quotes 

regardless of the source would result in 

an undue burden on competition. 

Market Makers are encouraged but not 

required to quote in their assigned series 

at the open regardless of whether a 

Market Maker is one of several assigned 

to a series or is the only one. As such, 

this proposal would not subject any 

Market Maker to additional obligations. 

Thus, the Exchange does not believe 

this proposed change would result in an 

undue burden on intra-market 

competition as it would apply equally to 

all similarly-situated Market Makers 

regarding their assigned series. The 

Exchange believes that the proposal to 

allow a series with more than one 

assigned Market Maker to open based on 

two quotes regardless of the source 

would continue to encourage 

participation of Market Makers at the 

open, may increase the availability of 

Legal Width Quotes in more series, 

thereby allowing more series to open 

(sooner). Improving the validity of the 

opening price benefits all market 

participants and also benefits the 

reputation of the Exchange as being a 

venue that provides accurate price 

discovery. With respect to inter-market 

competition, the Exchange notes that 

most options exchanges do not require 

Market Makers to quote during the 

opening.52

Additionally, the non-substantive 

changes proposed by the Exchange 

provide additional clarity and detail in 

the Exchange’s rules and are not 

changes made for any competitive 

purpose. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or up to 90 days (i) as the 

Commission may designate if it finds 

such longer period to be appropriate 

and publishes its reasons for so finding 

or (ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve or disapprove 

the proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NYSEArca–2022–31 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–NYSEArca–2022–31. 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–NYSEArca–2022–31 and 

should be submitted on or before June 

17, 2022. 


jspears on DSK121TN23PROD with NOTICES1
32210 Federal Register / Vol. 87, No. 103 / Friday, May 27, 2022 / Notices 

53 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Nasdaq owns 100% of the equity interest in U.S. 

Exchange Holdings, Inc., which in turn owns 100% 

of the equity interest in International Securities 

Exchange Holdings, Inc., which in turn owns 100% 

of the equity interest in the Exchange. The 

Exchange’s affiliates, Boston Stock Exchange 

Clearing Corporation, Nasdaq BX, Inc., Nasdaq 

GEMX, LLC, Nasdaq MRX, LLC, The Nasdaq Stock 

Market LLC, Nasdaq PHLX LLC, and Stock Clearing 

Corporation of Philadelphia will each concurrently 

submit substantially the same rule filings to 

propose the changes described herein. 

4Nasdaq currently has no Preferred Stock 

outstanding. 

5The price of one share of Common Stock on 

March 31, 2017 was $69.45 and the closing market 

price of one share of Common Stock on April 1, 

2022 was $181.92 as reported on the Nasdaq Stock 

Market. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.53

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–11396 Filed 5–26–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94971; File No. SR–ISE– 

2022–12] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend the Nasdaq 

Amended and Restated Certificate of 

Incorporation 

May 23, 2022. 

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

Securities Exchange Act of 1934 (‘‘Act’’ 

or ‘‘Exchange Act’’),1 and Rule 19b–4 

thereunder,2 notice is hereby given that 

on May 16, 2022, Nasdaq ISE, LLC 

(‘‘ISE’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

Amended and Restated Certificate of 

Incorporation (‘‘Certificate’’) of its 

parent corporation, Nasdaq, Inc. 

(‘‘Nasdaq’’ or the ‘‘Company’’), to 

increase Nasdaq’s authorized share 

capital. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/ise/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 purpose of the proposed rule 

change is to amend the Nasdaq 

Certificate 3 to increase the total number 

of authorized shares of Nasdaq common 

stock, par value $0.01 per share 

(‘‘Common Stock’’). Specifically, the 

Exchange proposes to amend Article 

Fourth, Section A such that the total 

number of shares of Stock (i.e., capital 

stock) that Nasdaq is authorized to issue 

would be increased from 330,000,000 to 

930,000,000 shares, and the portion of 

that total constituting Common Stock 

would be changed from 300,000,000 to 

900,000,000 shares. As amended, 

Article Fourth, Section A of the 

Certificate would provide: 

The total number of shares of Stock which 

Nasdaq shall have the authority to issue is 

Nine Hundred Thirty Million (930,000,000), 

consisting of Thirty Million (30,000,000) 

shares of Preferred Stock, par value $.01 per 

share (hereinafter referred to as ‘‘Preferred 

Stock’’), and Nine Hundred Million 

(900,000,000) shares of Common Stock, par 

value $.01 per share (hereinafter referred to 

as ‘‘Common Stock’’).4

As noted above, the proposed 

amendments to the Certificate were 

approved by the Nasdaq Board of 

Directors (‘‘Nasdaq Board’’) on March 

23, 2022. The proposed amendments to 

the Certificate would be effective when 

filed with the Secretary of State of 

Delaware, which would not occur until 

approval of the amendments by the 

stockholders of Nasdaq is obtained at 

the 2022 Annual Meeting of the 

Stockholders on June 22, 2022 and until 

this proposed rule change becomes 

effective and operative. 

The trading price of Nasdaq’s 

Common Stock has risen significantly 

over the past several years. Since 

Nasdaq first became a publicly traded 

company in 2002, the total number of 

authorized shares of Common Stock has 

remained constant at 300,000,000 

shares. However, over the last five years, 

the trading price of Nasdaq’s Common 

Stock has increased by approximately 

162%.5 As the trading price of Nasdaq’s 

Common Stock has risen, the Nasdaq 

Board has carefully evaluated the effect 

of the trading price of the Common 

Stock on the liquidity and marketability 

of the Common Stock. The Nasdaq 

Board believes that this price 

appreciation may be affecting the 

liquidity of the Common Stock, making 

it more difficult to efficiently trade and 

potentially less attractive to certain 

investors. Accordingly, the Nasdaq 

Board approved pursuing a 3-for-1 stock 

split by way of a stock dividend, 

pursuant to which the holders of record 

of shares of Common Stock would 

receive, by way of a dividend, two 

shares of Common Stock for each share 

of Common Stock held by such holder 

(the ‘‘Stock Dividend’’). The Nasdaq 

Board’s approval of the Stock Dividend 

was contingent upon this proposed rule 

change becoming effective and 

operative, and Nasdaq stockholder 

approval of the proposed amendments 

to the Certificate. 

The number of shares of Common 

Stock proposed to be issued in the Stock 

Dividend exceeds Nasdaq’s authorized 

but unissued shares of Common Stock. 

The proposed rule change would 

increase Nasdaq’s authorized shares of 

Common Stock and shares of capital 

stock sufficient to allow Nasdaq to 

effectuate the Stock Dividend. 

The proposed changes would not 

otherwise alter the Certificate, including 

the limitations on voting and ownership 

set forth in Article Fourth, Section C of 

the Certificate that generally provides 

no person who beneficially owns shares 

of common stock or preferred stock of 

Nasdaq in excess of 5% of the thenoutstanding securities generally entitled 

to vote may vote the shares in excess of 

5%. This limitation mitigates the 

potential for any Nasdaq shareholder to 

exercise undue control over the 

operations of Nasdaq’s self-regulatory 

subsidiaries, and facilitates the selfregulatory subsidiaries’ and the 

Commission’s ability to carry out their 

regulatory obligations under the Act. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 


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