Document ID: SEC-2021-0684-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Nasdaq BX, Inc.
Posted Date: 2021-05-11T04:00Z

[Federal Register Volume 86, Number 89 (Tuesday, May 11, 2021)]
[Notices]
[Pages 25911-25913]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-09882]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91773; File No. SR-BX-2021-019]

Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Delay the 
Implementation of BX's Rule Amendment To Limit Short Term Options 
Series Intervals to July 1, 2021

May 5, 2021.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on April 22, 2021, Nasdaq BX, Inc. (``BX'' 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 delay the implementation of BX's rule 
amendment to limit Short Term Options Series intervals between strikes 
which

[[Page 25912]]

are available for quoting and trading from ``prior to June 30, 2021'' 
to ``July 1, 2021.''
    The Exchange also proposes a small amendment to the table within 
Supplementary Material .07 to Options 4, Section 5 to add a ``greater 
than'' to the table.
    The text of the proposed rule change is available on the Exchange's 
website at https://listingcenter.nasdaq.com/rulebook/bx/rules, at the 
principal office of the Exchange, and at the Commission's Public 
Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    BX received approval \3\ to amend the Short Term Options Series 
program, within Options 4, Section 5, ``Series of Options Contracts 
Open for Trading,'' to limit the intervals between strikes for multiply 
listed equity options classes that have an expiration date more than 
twenty-one days from the listing date. At this time, BX proposes to 
delay the implementation of BX's rule amendment to limit Short Term 
Options Series intervals between strikes which are available for 
quoting and trading from ``prior to June 30, 2021'' to ``July 1, 
2021.'' The Exchange also proposes a small amendment to the table 
within Supplementary Material .07 to Options 4, Section 5 to add a 
``greater than'' to the table.
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    \3\ See Securities Exchange Act Release No. 91125 (February 12, 
2021), 86 FR 10375 (February 19, 2021) (SR-BX-2020-032) (Notice of 
Filing of Amendment No. 1 and Order Granting Accelerated Approval of 
Proposed Rule Change, as Modified by Amendment No. 1, To Amend 
Options 4, Section 5, To Limit Short Term Options Series Intervals 
Between Strikes That Are Available for Quoting and Trading on BX).
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Background
    Once implemented, BX's amendment to Options 4, Section 5 will limit 
the intervals between strikes in options listed as part of the Short 
Term Option Series program that have an expiration date more than 
twenty-one days from the listing date. Specifically, BX will limit the 
intervals between strikes by utilizing the table within Supplementary 
Material .07 of Options 4, Section 5 for expiration dates of option 
series beyond twenty-one days.\4\
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    \4\ The table considers both the share price and average daily 
volume for the option series.
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Implementation
    First, the Exchange proposes to amend the implementation date to 
limit Short Term Options Series intervals between strikes which was 
proposed within its Amendment No. 1 to SR-BX-2020-032.\5\ The Exchange 
proposes to amend the date from ``prior to June 30, 2021'' to ``July 1, 
2021.'' The Exchange will issue an Options Trader Alert to Participants 
with the date of implementation.
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    \5\ See supra note 3.
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Proposal
    Second, the Exchange proposes a small amendment to the table within 
Supplementary Material .07 to Options 4, Section 5. The Exchange 
proposes to capitalize the word ``greater'' in Tier 1 and add the words 
``Greater than'' within Tier 2. As proposed the table would appear as 
follows:

                                                                       Share Price
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                                                                                            $25 to less     $75 to less    $150 to less       $500 or
                 Tier                         Average daily volume         Less than $25     than $75        than $150       than $500        greater
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1.....................................  Greater than 5,000..............           $0.50           $1.00           $1.00           $5.00           $5.00
2.....................................  Greater than 1,000 to 5,000.....            1.00            1.00            1.00            5.00           10.00
3.....................................  0 to 1,000......................            2.50            5.00            5.00            5.00           10.00
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This non-substantive amendment is intended to bring greater clarity to 
BX's rule.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\6\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\7\ 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, 
by delaying the implementation to limit the intervals between strikes 
for multiply listed equity options classes within the Short Term 
Options Series program to allow the Exchange additional time to 
implement related functionality. The Exchange notes that the delay is 
one day after the time period of the initial planned implementation.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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    BX's proposed amendment to the table within Supplementary Material 
.07 to Options 4, Section 5 is consistent with the Act because it 
clarifies the tiers by adding the words ``greater than'' to Tier 2. The 
amendment will bring greater clarity to the Exchange's rule.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. The Exchange's proposal to 
delay the implementation to limit the intervals between strikes for 
multiply listed equity options classes within the Short Term Options 
Series program does not impose an undue burden on competition. The 
delay allows the Exchange additional time to implement related 
functionality. Also, the delay is one day after the time period of the 
initial planned implementation.
    The proposed amendment to the table within Supplementary Material 
.07 to Options 4, Section 5 does not impose an undue burden on 
competition. The amendment will bring greater clarity to the Exchange's 
rule.

[[Page 25913]]

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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) \8\ of the Act and Rule 19b-4(f)(6) thereunder.\9\ 
Because the foregoing proposed rule change does not: (i) Significantly 
affect the protection of investors or the public interest; (ii) impose 
any significant burden on competition; and (iii) become operative for 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, it has become effective pursuant to 
Section 19(b)(3)(A)(iii) of the Act and subparagraph (f)(6) of Rule 
19b-4 thereunder.\10\
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    \8\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ In addition, Rule 19b-4(f)(6)(iii) requires the Exchange to 
give the Commission written notice of its intent to file the 
proposed rule change at least five business days prior to the date 
of filing of the proposed rule change, or such shorter time as 
designated by the Commission. The Exchange has satisfied this 
requirement.
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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-BX-2021-019 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-BX-2021-019. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (http://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-BX-2021-019, and should be submitted on 
or before June 1, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-09882 Filed 5-10-21; 8:45 am]
BILLING CODE 8011-01-P