40188 Federal Register / Vol. 82, No. 163 / Thursday, August 24, 2017 / Notices 

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

2 17 CFR 240.19b–4. 3See MRX Rule 701. 4See Rule 701(c)(1)(i)–(iii). 

other person may file any additional 

statement. 

It is further ordered that the August 9, 

2017 order approving the proposed rule 

change, as modified by Amendment No. 

1 (File No. SR–CHX–2016–20), shall 

remain stayed pending further order of 

the Commission. 

By the Commission. 

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2017–17921 Filed 8–23–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81436; File No. SR–GEMX– 

2017–38] 

Self-Regulatory Organizations; Nasdaq 

GEMX, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Related to Quoting at the 

Opening 

August 18, 2017. 

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 August 

17, 2017, Nasdaq GEMX, LLC (‘‘GEMX’’ 

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 

GEMX Rule 701, entitled ‘‘Opening.’’ 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at www.ise.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 

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 this rule change is to 

amend GEMX Rule 701, ‘‘Opening’’ to 

specifically amend opening obligations 

for Primary Market Makers or ‘‘PMMs.’’ 

The Exchange notes that the proposed 

rule change is similar to a Nasdaq MRX, 

LLC (‘‘MRX’’) rule.3

Today, GEMX Rule 701(c)(3) states 

that the PMM assigned in a particular 

equity option must enter a Valid Width 

Quote not later than one minute 

following the dissemination of a quote 

or trade by the market for the 

underlying security or, in the case of 

index options, following the receipt of 

the opening price in the underlying 

index. The PMM assigned in a 

particular U.S. dollar-settled foreign 

currency option must enter a Valid 

Width Quote not later than one minute 

after the announced market opening. 

First, the Exchange proposes to add 

the words ‘‘or index’’ to further clarify 

that the requirement applies to equities 

and index options. The Exchange 

proposes this addition to further clarify 

the requirement in Rule 701(c)(3) clearly 

applies to equity and index options. 

Second, the Exchange proposes to 

modify the PMM’s current obligation to 

enter Valid Width Quotes not later than 

one minute following the dissemination 

of a quote or trade by the market for the 

underlying security or, in the case of 

index options, following the receipt of 

the opening price in the underlying 

index for all assigned options, or in the 

case of a U.S. dollar-settled foreign 

currency option after the announced 

market opening. The Exchange believes 

that the current requirement is very 

burdensome and instead proposes to 

add ‘‘in 90% of their assigned series’’ to 

require a PMM to enter a Valid Width 

Quote not later than one minute 

following the dissemination of a quote 

or trade by the market for the 

underlying security or, in the case of 

index options, following the receipt of 

the opening price in 90% of their 

assigned series, or in the case of a U.S. 

dollar-settled foreign currency option in 

90% of their assigned series not later 

than one minute after the announced 

market opening. 

Further, the Exchange proposes to 

require PMMs to promptly enter a Valid 

Width Quote in the remainder of their 

assigned series, which did not open 

within one minute following the 

dissemination of a quote or trade by the 

market for the underlying security or, in 

the case of index options, following the 

receipt of the opening price, in the 

underlying index or, with respect to a 

U.S. dollar-settled foreign currency 

option, following the announced market 

opening. The Exchange’s proposal is 

intended to account for market 

conditions which may prevent a PMM 

from opening all assigned series, for 

example an extremely volatile market 

which may impact the PMM’s ability to 

enter aggressive quotes. Another 

example would be that news pertaining 

to a specific security is causing the 

underlying price to fluctuate rapidly 

and significantly, thereby causing the 

PMM to await the underlying equity 

price to settle before entering a Valid 

Width Quote. The Exchange’s 

surveillance staff would monitor to 

ensure that PMMs are complying with 

these requirements during the Opening 

Process. 

Today, the Opening Process for an 

options series will be conducted on or 

after 9:30 a.m. if the system has 

received, within two minutes (or such 

shorter time as determined by the 

Exchange and disseminated to 

membership on the Exchange’s Web 

site) of the opening trade or quote on the 

market for the underlying security in the 

case of equity options or, in the case of 

index options, within two minutes of 

the receipt of the opening price in the 

underlying index (or such shorter time 

as determined by the Exchange and 

disseminated to membership on the 

Exchange’s Web site), or within two 

minutes of market opening for the 

underlying currency in the case of a 

U.S. dollar-settled foreign currency 

option (or such shorter time as 

determined by the Exchange and 

disseminated to membership on the 

Exchange’s Web site) the PMM’s Valid 

Width Quote, the Valid Width Quotes of 

two Competitive Maker [sic] Makers 

(‘‘CMMs’’) or if neither the PMM’s Valid 

Width Quote nor the Valid Width Quote 

of two CMMs have been submitted 

within such timeframe, if one CMM has 

submitted a Valid Width Quote.4

Implementation 

The Exchange proposes to implement 

this rule change on September 29, 2017. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 


rmajette on DSKBCKNHB2PROD with NOTICES
Federal Register / Vol. 82, No. 163 / Thursday, August 24, 2017 / Notices 40189 

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

6 15 U.S.C. 78f(b)(5). 

of the Act,5 in general, and furthers the 

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

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 for the 

reasons stated below. 

The Exchange’s first proposal at Rule 

701(c)(3) to clarify that the requirement 

applies to equities and index options 

will make clear the applicability of the 

PMM’s requirement to enter Valid 

Width Quotes. This proposed 

amendment is non-substantive and is 

intended to add clarity to the rules. 

The second proposal to amend a 

PMM’s requirement to enter Valid 

Width Quotes during the Opening 

Process is consistent with the Act 

because the 90% requirement to provide 

a Valid Width Quote in a series to 

which the PMM is assigned will 

continue to ensure that options series 

are opened in a timely manner, while 

not imposing a burdensome requirement 

on market participants. PMMs would be 

required to promptly enter a Valid 

Width Quote in the remainder of their 

assigned series, which did not open 

within one minute of the dissemination 

of a quote or trade by the market for the 

underlying security or in the case of 

index options, following the receipt of 

the opening price or, with respect to 

U.S. dollar-settled foreign currency 

options, following the announced 

market opening. The Exchange would 

monitor PMMs to ensure that they 

promptly provided a Valid Width Quote 

for the remainder of the series within a 

reasonable amount of time. The 

Exchange notes that market conditions 

could cause a PMM to experience 

circumstances where opening 100% of 

all of their assigned series within one 

minute of the dissemination of a quote 

or trade by the market for the 

underlying security or, in the case of 

index options, following the receipt of 

the opening price in the underlying 

index or, with respect to U.S. dollarsettled foreign currency options, 

following the announced market 

opening, is not feasible. 

The Exchange believes that the 

proposed 90% Valid Width Quoting 

obligation, not later than one minute 

following the dissemination of a quote 

or trade by the market for the 

underlying security or, in the case of 

index options, following the receipt of 

the opening price in the underlying 

index or, with respect to U.S. dollarsettled foreign currency options, 

following the announced market 

opening, along with the ‘‘prompt’’ 

standard for the remaining 10% of their 

assigned series will ensure all series are 

opened in a timely manner. The 

Exchange’s proposal accounts for 

market conditions which may prevent a 

PMM from opening all assigned series, 

for example an extremely volatile 

market which may impact the PMM’s 

ability to enter aggressive quotes. 

Another example would be that news 

pertaining to a specific security is 

causing the underlying price to fluctuate 

rapidly and significantly, thereby 

causing the PMM to await the 

underlying equity price to settle before 

entering a Valid Width Quote. The 

Exchange believes that the time frame 

for PMMs to provide a Valid Width 

Quote in 90% of their assigned series 

not later than one minute following the 

dissemination of a quote or trade by the 

market for the underlying security or, in 

the case of index options, following the 

receipt of the opening price in the 

underlying index or, with respect to 

U.S. dollar-settled foreign currency 

options, following the announced 

market opening will ensure liquidity on 

GEMX during the Opening Process. The 

Exchange desires to encourage PMMs to 

continue to make markets on GEMX at 

the Opening. The Exchange believes 

that requiring PMMs to provide a Valid 

Width Quote in 90% of their assigned 

options not later than one minute 

following the dissemination of a quote 

or trade by the market for the 

underlying security or, in the case of 

index options, following the receipt of 

the opening price in the underlying 

index or, with respect to U.S. dollarsettled foreign currency options, 

following the announced market 

opening along with the ‘‘prompt’’ 

standard for the remaining 10% will 

enhance the market making functions 

for PMMs and serve to maintain a fair 

and orderly market thereby promoting 

the protection of investors and the 

public interest. 

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 proposal 

does not change the intense competition 

that exists among the options markets 

for options business including on the 

opening. Nor does the Exchange believe 

that the proposal will impose any 

burden on intra-market competition; the 

Opening Process involves many types of 

participants and interest. 

The Exchange’s proposal to require a 

PMM to enter a Valid Width Quote in 

90% of their assigned series not later 

than one minute time following the 

dissemination of a quote or trade by the 

market for the underlying security or, in 

the case of index options, following the 

receipt of the opening price in the 

underlying index or, with respect to 

U.S. dollar-settled foreign currency 

options, following the announced 

market opening and promptly enter a 

Valid Width quote for the remaining 

10% their assigned series does not 

create an undue burden on competition. 

The proposal will continue to ensure 

that options series are opened in a 

timely manner, while not imposing a 

burdensome requirement on market 

participants. PMMs would be required 

to promptly enter a Valid Width Quote 

in the remainder of their assigned series 

which were not open within one minute 

following the dissemination of a quote 

or trade by the market for the 

underlying security or, in the case of 

index options, following the receipt of 

the opening price in the underlying 

index or, with respect to U.S. dollarsettled foreign currency options, 

following the announced market 

opening. The Exchange would monitor 

PMMs to ensure that they promptly 

entered a Valid Width Quote for the 

remainder of their assigned series 

within a reasonable amount of time. The 

Exchange notes that market conditions 

could cause a PMM to experience 

circumstances where entering a Valid 

Width Quote for 100% of all of their 

assigned series within one minute 

following the dissemination of a quote 

or trade by the market for the 

underlying security or, in the case of 

index options, following the receipt of 

the opening price in the underlying 

index or with respect to U.S. dollarsettled foreign currency options within 

one minute after the announced market 

opening is not feasible. The Exchange 

believes that the proposed 90% 

obligation to enter a Valid Width Quote 

not later than one minute following the 

dissemination of a quote or trade by the 

market for the underlying security or, in 

the case of index options, following the 

receipt of the opening price in the 

underlying index or, with respect to 

U.S. dollar-settled foreign currency 

options, following the announced 

market opening for the underlying 

security along with the ‘‘prompt’’ 

standard for the remaining series will 

ensure all series are opened in a timely 

manner. 


rmajette on DSKBCKNHB2PROD with NOTICES
40190 Federal Register / Vol. 82, No. 163 / Thursday, August 24, 2017 / Notices 

7 15 U.S.C. 78s(b)(3)(A)(iii). 

8 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, along with a brief 

description and text of 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. 

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 3See MRX Rule 701. 

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 7 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.8

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: (i) Necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) otherwise in 

furtherance of the purposes of the Act. 

If the Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

GEMX–2017–38 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–GEMX–2017–38. 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 Web site (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 Web site 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; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–GEMX– 

2017–38 and should be submitted on or 

before September 14, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2017–17908 Filed 8–23–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81434; File No. SR–ISE– 

2017–78] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Related to Quoting at the 

Opening 

August 18, 2017. 

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 August 

17, 2017, 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 ISE 

Rule 701, entitled ‘‘Opening.’’ 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at www.ise.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 

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 this rule change is to 

amend ISE Rule 701, ‘‘Opening’’ to 

specifically amend opening obligations 

for Primary Market Makers or ‘‘PMMs.’’ 

The Exchange notes that the proposed 

rule change is similar to a Nasdaq MRX, 

LLC (‘‘MRX’’) rule.3

Today, ISE Rule 701(c)(3) states that 

the PMM assigned in a particular equity 

option must enter a Valid Width Quote 

not later than one minute following the 

dissemination of a quote or trade by the 

market for the underlying security or, in 

the case of index options, following the 

receipt of the opening price in the 

underlying index. The PMM assigned in 

a particular U.S. dollar-settled foreign 

currency option must enter a Valid 

Width Quote not later than one minute 

after the announced market opening. 

First, the Exchange proposes to add 

the words ‘‘or index’’ to further clarify 

that the requirement applies to equities 

and index options. The Exchange 

proposes this addition to further clarify 


rmajette on DSKBCKNHB2PROD with NOTICES