Document ID: SEC-2020-0456-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Nasdaq ISE, LLC
Posted Date: 2020-03-26T04:00Z

[Federal Register Volume 85, Number 59 (Thursday, March 26, 2020)]
[Notices]
[Pages 17126-17129]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-06385]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-88456; File No. SR-ISE-2020-11]

Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Related to the 
Removal of Obsolete Listing Rules

March 23, 2020.
    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 March 18, 2020, 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its Rules at Options 2, Options 
Market Participants; Options 3, Section 2, Units of Trading and Meaning 
of Premium Quotes and Orders; Options 3, Section 3, Minimum Trading 
Increments; Options 4, Section 5, Series of Options Contracts Open for 
Trading; Options 4A, Section 2, Definitions; Options 4A, Section 6, 
Position Limits for Broad-Based Index Options; Options 4A, Section 8, 
Position Limits for Foreign Currency Index Options; Options 4A, Section 
10, Exercise Limits; Options 4A, Section 11, Trading Sessions; Options 
4A, Section 12, Terms of Index Options Contracts; Options 6, Options 
Trade Administration; Options 6C, Section 3, Margin Requirements; 
Options 6C, Section 4, Meeting Margin Calls by Liquidation Prohibited; 
Options 9, Section 4, Disruptive Quoting and Trading Activity 
Prohibited; Options 9, Section 13, Position Limits; Options 9, Section 
14, Exemptions from Position Limits; and Options 9, Section 15,

[[Page 17127]]

Exercise Limits. Additionally, the Exchange proposes to add new 
sections at General 9 and Options 4B and reserve those sections.
    The text of the proposed rule change is available on the Exchange's 
website at http://ise.cchwallstreet.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 Exchange proposes to amend its Rules at Options 2, Options 
Market Participants; Options 3, Section 2, Units of Trading and Meaning 
of Premium Quotes and Orders; Options 3, Section 3, Minimum Trading 
Increments; Options 4, Section 5, Series of Options Contracts Open for 
Trading; Options 4A, Section 2, Definitions; Options 4A, Section 6, 
Position Limits for Broad-Based Index Options; Options 4A, Section 8, 
Position Limits for Foreign Currency Index Options; Options 4A, Section 
10, Exercise Limits; Options 4A, Section 11, Trading Sessions; Options 
4A, Section 12, Terms of Index Options Contracts; Options 6, Options 
Trade Administration; Options 6C, Section 3, Margin Requirements; 
Options 6C, Section 4, Meeting Margin Calls by Liquidation Prohibited; 
Options 9, Section 4, Disruptive Quoting and Trading Activity 
Prohibited; Options 9, Section 13, Position Limits; Options 9, Section 
14, Exemptions from Position Limits; and Options 9, Section 15, 
Exercise Limits. Additionally, the Exchange proposes to add new 
sections at General 9 and Options 4B and reserve those sections. The 
various proposed changes will be discussed below.
Mini Options
    The Exchange has not listed Mini Options in several years and is 
proposing to delete Mini Options listing rules and other ancillary 
trading rules related to the listing of Mini Options. The Exchange 
notes that it has no open interest in Mini Options.
    Specifically, the Exchange proposes to amend the following ISE 
Rules related to Mini Options by deleting references to Mini Options 
within these rules: Options 3, Section 2(d), Units of Trading and 
Meaning of Premium Quotes and Orders; Options 3, Section 3, Minimum 
Trading Increments, at Supplementary Material .03; Options 4, Section 
5, Series of Options Contracts Open for Trading, at Supplementary 
Material .13; Options 9, Section 13, Position Limits. at Supplementary 
Material .03; and Options 9, Section 14, Exemptions From Position 
Limits.
Foreign Currency Index
    The Exchange removed \3\ prior ISE Section 22, which was titled 
``Rate-Modified Foreign Currency Options Rules'' and governed the 
listing and trading of foreign currency options on ISE. At this time, 
the Exchange is removing Options 4A, Section 8, which is being 
reserved, as well as the definition of Foreign Currency Index, within 
Options 4A, Section 2(h), as that reference is no longer necessary 
because the product is not available to be listed on ISE. References to 
Foreign Currency Index are also being removed from Options 3, Section 
3, Minimum Trading Increments, at Supplementary Material .04; Options 
4A, Section 10(a); Options 4A, Section 11(a) and (c); Options 4A, 
Section 12(e)(1); and Options 6C, Section 3(e).
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    \3\ See Securities Exchange Act Release No. 84516 (November 1, 
2018), 83 FR 55771 (November 7, 2018) (SR-ISE-2018-91) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Delete 
ISE Section 22 of the Rulebook Entitled ``Rate-Modified Foreign 
Currency Options Rules'').
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Other Obsolete Listings
    The Exchange proposes to amend Options 4A, Section 2 at 
Supplementary Material .01; Options 4A, Section 6(a); Options 4A, 
Sections 12(a)(4),\4\ (a)(5)(ii), (b)(2) and (c)(1); and Options 4A, 
Section 12 at Supplementary Material .06 to remove a list of index 
options contracts that are no longer listed on ISE and have no open 
interest. The Exchange also proposes to list the reporting authority 
for Mini Nasdaq 100 Index, which currently does not appear on the list 
of index options with reporting authorities. The reporting authority 
for the Mini Nasdaq 100 is The Nasdaq Stock Market.
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    \4\ The Exchange is relocating and renumbering the remaining 
listings within Options 4A, Section 12.
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Rulebook Harmonization
    The Exchange recently harmonized its Rulebook in connection with 
other Nasdaq affiliated markets. The Exchange proposes to reserve 
sections General 9 and Options 4B and certain other rules \5\ within 
the ISE Rulebook to represent the presence of rules in similar 
locations in other Nasdaq affiliated Rulebooks (e.g., Nasdaq Phlx 
LLC).\6\ The addition of these reserved sections will align the various 
Nasdaq affiliated market Rulebooks.
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    \5\ The Exchange proposes to reserve Options 2, Sections 11-14; 
Options 4A, Sections 17-21; Options 6, Sections 8-13; Options 6C, 
Section 7; and Options 9, Section 24.
    \6\ See Securities Exchange Act Release No. 88213 (February 14, 
2020), 85 FR 9859 (February 20, 2020) (SR-Phlx-2020-03) (``Phlx 
Rulebook Relocation Rule Change'').
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Other Non-Substantive Amendments
    The Exchange proposes to correct a typographical error within 
Options 6C, Section 4, Meeting Margin Calls by Liquidation Prohibited. 
The Exchange proposes to correct cross-references and numbering within 
Options 9, Section 4, Disruptive Quoting and Trading Activity 
Prohibited. Finally, the Exchange proposes to amend the names of 
certain securities which have been renamed within Options 9, Section 13 
at Supplementary Material .01 and Options 9, Section 15 at 
Supplementary Material .01.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\7\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\8\ 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.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
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Mini Options
    The Exchange's proposal to removal references to the listing and 
handling of Mini Options is consistent with the Act because Mini 
Options have not been listed in several years and thereby removing the 
references to the rules would render the rules more accurate and reduce 
potential investor confusion. Also, the Exchange notes that it has no 
open interest in Mini Options. In the event that the Exchange desires 
to list Mini Options in the future, it would file a rule change with 
the Commission to adopt rules to list Mini Options.

[[Page 17128]]

Foreign Currency Index
    The Exchange's proposal to remove rules and references to the 
listing and handling of Foreign Currency Indexes is consistent with the 
Act because the listing rules for these products have been removed. 
Also, the Exchange notes that it has no open interest in Foreign 
Currency Indexes. In the event that the Exchange desires to list 
Foreign Currency Indexes in the future, it would file a rule change 
with the Commission.
Other Obsolete Listings
    The Exchange's proposal to remove obsolete index options listings 
within Options 4A, Section 2 at Supplementary Material .01; Options 4A, 
Section 6(a); Options 4A, Sections 12(a)(4),\9\ (a)(5)(ii), (b)(2) and 
(c)(1); and Options 4A, Section 12 at Supplementary Material .06 is 
consistent with the Act. These index option listings have not been 
listed in some time and there is no open interest. In the event that 
the Exchange desires to list any of the removed index options listings 
in the future, it would file a rule change with the Commission. 
Further, the proposal to list the reporting authority for Mini Nasdaq 
100 Index, which is The Nasdaq Stock Market, will bring greater 
transparency to the Exchange's Rules and provide investors with greater 
information about that index.
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    \9\ The Exchange is relocating and renumbering the remaining 
listings within Options 4A, Section 12.
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Rulebook Harmonization
    The Exchange's proposal to reserve new sections at General 9 and 
Options 4B within the Rulebook is a non-substantive amendment which 
aligns the numbering across Nasdaq affiliated Rulebooks to provide 
market participants with an ability to more readily locate rules.
Other Non-Substantive Amendments
    The Exchange's proposal to correct typographical errors, correct 
cross-references and numbering and amend names of securities are non-
substantive. These amendments are intended to reduce investor 
confusion.

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.
Mini Options
    The Exchange's proposal to removal references to the listing and 
handling of Mini Options does not impose an undue burden on 
competition. Mini Options have not been listed in several years. Also, 
the Exchange notes that it has no open interest in Mini Options.
Foreign Currency Index
    The Exchange's proposal to removal references to the listing and 
handling of Foreign Currency Indexes does not impose an undue burden on 
competition. Foreign Currency Indexes have not been listed in several 
years. Also, the Exchange notes that it has no open interest in Foreign 
Currency Indexes.
Other Obsolete Listings
    The Exchange's proposal to remove obsolete index options listings 
within Options 4A, Section 2 at Supplementary Material .01; Options 4A, 
Section 6(a); Options 4A, Sections 12(a)(4),\10\ (a)(5)(ii), (b)(2) and 
(c)(1); and Options 4A, Section 12 at Supplementary Material .06 does 
not impose an undue burden on competition. These index options listings 
have not been listed in some time and there is no open interest. 
Further, the proposal to list a reporting authority for Mini Nasdaq 100 
Index, which is The Nasdaq Stock Market, will bring greater 
transparency to the Exchange's Rules.
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    \10\ The Exchange is relocating and renumbering the remaining 
listings within Options 4A, Section 12.
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Rulebook Harmonization
    The Exchange's proposal to add reserved sections General 9 and 
Options 4B to the Rulebook is a non-substantive amendment which aligns 
the numbering across Nasdaq affiliated Rulebooks to provide market 
participants with an ability to more readily locate rules.
Other Non-Substantive Amendments
    The Exchange's proposal to correct typographical errors, correct 
cross-references and numbering and amend names of securities are non-
substantive amendments.

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\11\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \12\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires the Exchange 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.
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-ISE-2020-11 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-ISE-2020-11. 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

[[Page 17129]]

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-ISE-2020-11 and should be 
submitted on or before April 16, 2020.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-06385 Filed 3-25-20; 8:45 am]
 BILLING CODE 8011-01-P