Document ID: SEC-2021-1302-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: The Nasdaq Stock Market, LLC
Posted Date: 2021-09-24T04:00Z

[Federal Register Volume 86, Number 183 (Friday, September 24, 2021)]
[Notices]
[Pages 53121-53125]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-20655]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93069; File No. SR-NASDAQ-2021-074]

Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Options 3, Section 26, Message Traffic Mitigation

September 20, 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 September 14, 2021, The Nasdaq Stock Market LLC (``Nasdaq'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as described in 
Items I and II, below, which Items have been prepared by the Exchange. 
The Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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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 The Nasdaq Options Market LLC 
(``NOM'') Rules at Options 3, Section 26, Message Traffic Mitigation, 
and Options 3, Section 27 Limitation of Liability.
    The Exchange also proposes to amend Options 10, Doing Business With 
The Public: Section 5, Branch Offices, Section 6, Opening of Accounts, 
and Section 9, Discretionary Accounts.
    The text of the proposed rule change is available on the Exchange's 
website at https://listingcenter.nasdaq.com/rulebook/nasdaq/rules, at 
the principal office of the Exchange, and at the Commission's Public 
Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to amend Options 3, Section 26, Message 
Traffic Mitigation. The Exchange also proposes to amend Options 10, 
Doing Business With The Public: Section 5, Branch Offices, Section 6, 
Opening of Accounts, and Section 9, Discretionary Accounts. Each change 
is described below.
Options 3, Section 26
    The Exchange proposes to amend Options 3, Section 26, Message 
Traffic Mitigation, to replace its current rule with a rule identical 
to Nasdaq Phlx LLC (``Phlx'') Options 3, Section 26.
    Currently, NOM Options 3, Section 26 provides,

    For the purpose of message traffic mitigation, based on NOM's 
traffic with respect to target traffic levels and in accordance with 
NOM's overall objective of reducing both peak and overall traffic:
    (a) NOM will periodically delist options with an average daily 
volume (``ADV'') of less than 100 contracts. Nasdaq will, on a 
monthly basis, determine the ADV for each series listed on NOM and 
delist the current series and not list the next series after 
expiration where the ADV is less than 100 contracts. For options 
series traded solely on NOM, Nasdaq will delay delisting until there 
is no open interest in that options series.
    (b) NOM will implement a process by which an outbound quote 
message that has not been sent, but is about to be sent, will not be 
sent if a more current quote message for the same series is 
available for sending. This replace on queue functionality will be 
applied to all options series listed on the Nasdaq Options Market in 
real time and will not delay the sending of any messages.
    (c) When the size associated with a bid or offer increases by an 
amount less than or equal to a percentage (never to exceed 20%) of 
the size associated with the previously disseminated bid or offer, 
NOM will not disseminate the new bid or offer
    (d) All message traffic mitigation mechanisms which are used on 
NOM will be identical for the OPRA ``top of the book'' broadcast.

    With this proposal, the Exchange proposes to provide:

    (a) The Exchange shall disseminate an updated bid and offer 
price, together with the size associated with such bid and offer, 
when:
    (1) the Exchange's disseminated bid or offer price increases or 
decreases;
    (2) the size associated with the Exchange's disseminated bid or 
offer decreases; or
    (3) the size associated with the Exchange's bid (offer) 
increases by an amount greater than or equal to a percentage (never 
to exceed 20%) of the size associated with previously disseminated 
bid (offer). Such percentage, which shall never exceed 20%, will be 
determined by the Exchange on an issue-by-issue basis and posted on 
the Exchange's website.

    Current NOM Options 3, Section 26(a) describes how NOM would 
periodically delist options with an average daily volume of less than 
100 contracts. Further, pursuant to Options 3, Section 26(a), NOM would 
determine the ADV for each series listed on NOM and monthly, delist the 
current series, and not list the next series after expiration where the 
ADV is less than 100 contracts.\3\ Options 3, Section 26(a) was

[[Page 53122]]

intended to mitigate message traffic by requiring the Exchange to 
delist certain options. While, today, NOM does not delist options in 
accordance with Options 3, Section 26(a), NOM does delist options 
pursuant to Options 4, Section 5.\4\ Specifically, NOM periodically 
delists options across its various listing programs pursuant to Options 
4, Section 5 at Supplementary Material .01(d), Supplementary Material 
.03(d), and Supplementary Material .04(f). In addition, NOM recently 
filed to delist additional intervals across its weekly programs to 
further reduce message traffic.\5\ The Exchange notes that other Nasdaq 
affiliated markets also delist according to similar listing rules.\6\ 
The Exchange's process for delisting options pursuant to Options 4, 
Section 5 accomplishes the same objectives as originally intended for 
delisting pursuant to subparagraph (a). The current delisting process 
utilized by NOM ensures mitigation of message traffic. At this time, 
the Exchange proposes to remove the rule text within Options 3, Section 
26(a), as NOM does not delist in that manner today, and, instead, NOM 
proposes to continue to delist pursuant to Options 4, Section 5. NOM's 
message traffic mitigation would not be impacted by the removal of 
Options 3, Section 26(a) because, today, NOM is not delisting in that 
manner, rather it delists according to Options 4, Section 5 and will 
continue to delist in that manner.
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    \3\ For options series traded solely on NOM, the Exchange will 
delay delisting until there is no open interest in that options 
series. See NOM Options 3, Section 26(a).
    \4\ NOM currently delists options pursuant to Options 4, Section 
5 at Supplementary Material .01(d), Supplementary Material .03(d), 
Supplementary Material .04(f), and Supplementary Material .07.
    \5\ See Securities Exchange Act Release No. 91931 (May 18, 
2021), 86 FR 27929 (May 24, 2021) (SR-NASDAQ-2021-032) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend 
Options 4, Section 5, ``Series of Options Contracts Open for 
Trading'' To Limit Short Term Options Series Intervals Between 
Strikes).
    \6\ See Phlx, Nasdaq ISE, LLC (``ISE''), Nasdaq GEMX, LLC 
(``GEMX'') and Nasdaq MRX, LLC (``MRX'') Options 4, Section 5.
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    Current NOM Options 3, Section 26(b) provides that NOM will 
implement a replace on queue functionality whereby an outbound quote 
message that has not been sent, but is about to be sent, will not be 
sent if a more current quote message for the same series is available 
for sending. Further, the rule provides that this replace on queue 
functionality will be applied to all options series listed on NOM in 
real time and will not delay the sending of any messages. Options 3, 
Section 26(b) was intended to mitigate message traffic by implementing 
the replace on queue functionality to reduce the message traffic by 
disseminating only the most current quote in certain instances where a 
quote was recently updated. The Exchange did not implement the replace 
on queue functionality, so it is unavailable and has never been 
utilized on NOM. To date, NOM has been mitigating quotations by 
delisting pursuant to Options 4, Section 5 and mitigating pursuant to 
Options 3, Section 26(c) as described below in greater detail. NOM's 
quote mitigation process would remain unchanged with this proposal. 
Also, NOM's quote mitigation process is consistent with Phlx's current 
process for mitigating quotes. The Exchange believes that despite not 
implementing the replace on queue functionality, it continues to 
mitigate quotes in a fair and equitable manner consistent with Phlx's 
process for mitigating quotes. At this time, the Exchange proposes to 
delete Options 3, Section 26(b). NOM's message traffic mitigation would 
not be impacted by the removal of Options 3, Section 26(b) because, 
today, NOM does not have the functionality described within Options 3, 
Section 26(b) and would not be changing its quote mitigation practice 
as a result of deleting the rule text.
    Current Options 3, Section 26(c) provides that when the size 
associated with a bid or offer increases by an amount less than or 
equal to a percentage (never to exceed 20%) of the size associated with 
the previously disseminated bid or offer, NOM will not disseminate the 
new bid or offer. Options 3, Section 26(c) was intended to mitigate 
message traffic by disseminating quotes only when the size associated 
with a bid or offer increases by an amount greater than or equal to a 
certain percentage established by the Exchange. Today, the Exchange's 
System is not disseminating quotes as specified within Options 3, 
Section 26(c), rather NOM is disseminating quotes as specified in Phlx 
Options 3, Section 26.\7\ The Exchange's current practice is aligned 
with the original intent. Today, NOM mitigates quotes by disseminating 
them only when the size associated with a bid or offer increases by an 
amount greater than or equal to a certain percentage established by the 
Exchange. At this time, the Exchange proposes to update NOM Options 3, 
Section 26 to reflect NOM's current practice, which is identical to 
Phlx's practice, and adopt rule text identical to Phlx Options 3, 
Section 26. Because NOM is not amending its practice with respect to 
the dissemination of quotes, the Exchange notes that there would be no 
change in the number of quotes that will be disseminated by the 
Exchange and the proposed change aligns with the original intent of the 
rule.
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    \7\ Current Options 3, Section 26(c) refers to an amount ``less 
than or equal to a percentage.'' The phrase ``equal to'' is 
incorrect. Today, when the size associated with a bid or offer 
increases by an amount less [sic] than a percentage (never to exceed 
20%) of the size associated with the previously disseminated bid or 
offer, NOM does not and will not disseminate the new bid or offer. 
This substantive change also adopts rule text identical to Phlx 
Options 3, Section 26.
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    NOM's rule also proposes to adopt rule text identical to Phlx to 
permit it to determine the percentage by which it will disseminate an 
updated bid or offer price based on the size on an issue-by-issue 
basis.\8\ Phlx Options 3, Section 26(a)(3) permits it to determine the 
percentage in this matter. NOM proposes to amend its rule to provide 
for the same flexibility as Phlx to permit it to determine the way it 
will mitigate quotes among options. Also, with this proposed change, 
NOM would commence posting the percentage specified within proposed 
Options 3, Section 26(a)(3) on the Exchange's website. The Exchange 
believes that posting the percentage will provide transparency to 
Participants.
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    \8\ NOM's current rule is silent regarding the Exchange's 
ability to set the percentage on an issue-by-issue basis and post 
the percentage to its website. Today, Phlx and NOM both specify the 
percentage on the Exchange's website. Today, the Exchange has set 
the same percentage for all options listed on NOM.
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    Finally, Options 3, Section 26(d) provides that all message traffic 
mitigation mechanisms which are used on NOM will be identical for the 
OPRA ``top of the book'' broadcast. The text of Options 3, Section 
26(d) is unnecessary as OPRA publishes messages disseminated by each 
options exchange in a similar fashion. Further, NOM Options 5, Section 
1(17) describes the type of information disseminated by OPRA.
    Today, and over the years, Phlx's number of listed underlyings 
exceeds the underlyings listed on NOM and, therefore, utilizing a 
message traffic protocol identical to Phlx Options 3, Section 26(c) 
would permit NOM to sufficiently mitigate quotes.
Options 3, Section 27
    The Exchange proposes to update a citation to Rule 4626 within 
Options 3, Section 27, Limitation of Liability. The Exchange relocated 
Rule 4626 to Equity 2, Section 17 in a prior rule change.\9\

[[Page 53123]]

The Exchange proposes to update the erroneous citation. The proposed 
amendment is non-substantive.
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    \9\ See Securities Exchange Act Release No. 90577 (December 7, 
2020), 85 FR 80202 (December 11, 2020) (SR-NASDAQ-2020-079) (Notice 
of Filing and Immediate Effectiveness of Proposed Rule Change To 
Relocate Its Equity and General Rules From Its Current Rulebook Into 
Its New Rulebook Shell).
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Options 10, Sections 5, 6 and 9
    In 2018, NOM's registration requirements \10\ were updated to 
mirror changes made by FINRA to its qualification rules.\11\ At that 
time, NOM Options 10, Sections 5, 6 and 9 should have been amended to 
update certain terminology to align with General 4 terminology.\12\ At 
this time, the Exchange proposes to update the terminology within 
Options 10, Sections 5, 6 and 9 so that it is consistent with General 4 
terminology. The proposed amendments are non-substantive. Specifically, 
with respect to Options 10, Section 5, Branch Offices, the manager must 
be registered as an Options Principal or General Securities Sales 
Supervisor in accordance with Nasdaq General 4, Section 1220(a)(8) \13\ 
and Supplementary Material .04 of that rule.\14\ The Exchange proposes 
to replace the qualification ``Registered Options and Security Futures 
Principal'' with ``Registered Options Principal or General Securities 
Sales Supervisor.'' With respect to Options 10, Section 6, Opening of 
Accounts and Options 10, Section 9, Discretionary Accounts, the 
Exchange proposes to replace the qualification ``Registered Options and 
Security Futures Principal'' with ``Registered Options Principal'' to 
align with the current terminology with General 4, Rule 1220.\15\
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    \10\ See Securities Exchange Act Release No. 84386 (October 9, 
2018), 83 FR 51988 (October 9, 2018) (SR-NASDAQ-2018-078) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend, 
Reorganize and Enhance Its Membership, Registration and 
Qualification Rules).
    \11\ See Securities Exchange Act Release No. 81098 (July 7, 
2017), 82 FR 32419 (July 13, 2017) (SR-FINRA-2017-007) (Order 
Approving Proposed Rule Change To Adopt Consolidated Registration 
Rules, Restructure the Representative-Level Qualification 
Examination Program, Allow Permissive Registration, Establish Exam 
Waiver Process for Persons Working for Financial Services Affiliate 
of Member, and Amend the Continuing Education Requirements).
    \12\ Specifically, in 2018, NOM amended then Chapter II, Section 
(2)(g) as Rule 1220(a)(8) (current General 4, Section 1220) to 
rename the registration category from ``Registered Options and 
Security Futures Principal'' to ``Registered Options Principal.'' 
Further, Rule 1220(b), Supplementary Material .02 was amended to 
provide that each person who is registered with the Exchange as a 
Registered Options Principal (or as a General Securities 
Representative, Options Representative, or General Securities Sales 
Supervisor) shall be eligible to engage in security futures 
activities as a principal, as applicable, provided that such 
individual completes a Firm Element program as set forth in proposed 
Rule 1240 that addresses security futures products before such 
person engages in security futures activities. All references to a 
revised examination that includes security futures products were 
removed and FINRA shortened references to ``Registered Options and 
Security Futures Principal'' in its rulebook to ``Registered Options 
Principal''. See Securities Exchange Act Release No. 58932 (November 
12, 2008), 73 FR 69696 (November 19, 2008) (SR-FINRA-2008-032).
    \13\ General 4, Rule 1220(a)(8) provides, in part, ``Each member 
that is engaged in transactions in options with the public shall 
have at least one Registered Options Principal. In addition, each 
principal as defined in paragraph (a)(1) of this Rule who is 
responsible for supervising a member's options sales practices with 
the public shall be required to register with the Exchange as a 
Registered Options Principal, subject to the following exception. If 
a principal's options activities are limited solely to those 
activities that may be supervised by a General Securities Sales 
Supervisor, then such person may register as a General Securities 
Sales Supervisor pursuant to paragraph (a)(10) of this Rule in lieu 
of registering as a Registered Options Principal.''
    \14\ Supplementary Material .04 to General 4, Rule 1220 
provides, in part, ``Any person required to be registered as a 
principal who supervises sales activities in corporate, municipal 
and option securities, investment company products, variable 
contracts, direct participation program securities and security 
futures may be registered solely as a General Securities Sales 
Supervisor. In addition to branch office managers, other persons 
such as regional and national sales managers may also be registered 
solely as General Securities Sales Supervisors as long as they 
supervise only sales activities.''
    \15\ The Exchange also proposes to renumber a paragraph within 
Options 10, Section 9(a) from ``2'' to ``3'' as there are currently 
two sections numbered as ``2.''
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\16\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\17\ in particular, in that it is designed to 
promote just and equitable principles of trade and to protect investors 
and the public interest.
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    \16\ 15 U.S.C. 78f(b).
    \17\ 15 U.S.C. 78f(b)(5).
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Options 3, Section 26
    The Exchange's proposal to amend Options 3, Section 26, Message 
Traffic Mitigation, to replace its current rule with a rule identical 
to Phlx Options 3, Section 26 is consistent with the Act. The proposal 
will harmonize NOM's Options 3, Section 26 with Phlx's Options 3, 
Section 26 without an impact to the way NOM mitigates message traffic 
today.
    Removing current Options 3, Section 26(a), which describes how NOM 
would periodically delist options with an average daily volume of less 
than 100 contracts and determine the ADV for each series listed on NOM 
and monthly, delist the current series and not list the next series 
after expiration where the ADV is less than 100 contracts, is 
consistent with the Act. Options 3, Section 26(a) was intended to 
mitigate message traffic by requiring the Exchange to delist certain 
options. While, today, NOM does not delist options in accordance with 
Options 3, Section 26(a), NOM does delist options pursuant to Options 
4, Section 5.\18\ In addition, NOM recently filed to delist additional 
intervals across its weekly programs to further reduce message 
traffic.\19\ The Exchange notes that other Nasdaq affiliated markets 
also delist according to similar rules.\20\ The Exchange's process for 
delisting options pursuant to Options 4, Section 5 protects investors 
and the public interest because it accomplishes the same objectives as 
originally intended for delisting pursuant to subparagraph (a) and 
ensures mitigation of message traffic by delisting according to Options 
4, Section 5.
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    \18\ NOM currently delists options pursuant to Options 4, 
Section 5 at Supplementary Material .01(d), Supplementary Material 
.03(d), Supplementary Material .04(f), and Supplementary Material 
.07.
    \19\ See Securities Exchange Act Release No. 91931 (May 18, 
2021), 86 FR 27929 (May 24, 2021) (SR-NASDAQ-2021-032) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend 
Options 4, Section 5, ``Series of Options Contracts Open for 
Trading'' To Limit Short Term Options Series Intervals Between 
Strikes).
    \20\ See Phlx, Nasdaq ISE, LLC (``ISE''), Nasdaq GEMX, LLC 
(``GEMX'') and Nasdaq MRX, LLC (``MRX'') Options 4, Section 5.
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    Removing current NOM Options 3, Section 26(b), which describes how 
NOM will implement a replace on queue functionality whereby an outbound 
quote message that has not been sent, but is about to be sent, will not 
be sent if a more current quote message for the same series is 
available for sending is consistent with the Act. Options 3, Section 
26(b) was intended to mitigate message traffic by implementing the 
replace on queue functionality to reduce the message traffic by 
disseminating only the most current quote in certain instances where a 
quote was recently updated. While the Exchange did not implement the 
replace on queue functionality, NOM has been mitigating quotations by 
delisting pursuant to Options 4, Section 5 and mitigating pursuant to 
Options 3, Section 26(c). The proposal would protect investors and the 
public interest because NOM's quote mitigation process would remain 
unchanged with this proposal. Also, NOM's quote mitigation process is 
consistent with Phlx's current process for mitigating quotes. The 
Exchange believes that despite not implementing the replace on queue 
functionality, it continues to mitigate quotes in a fair and equitable 
manner consistent with Phlx's process for mitigating quotes.
    Amending current Options 3, Section 26(c), as described above, is 
consistent with the Act because Options 3, Section

[[Page 53124]]

26(c) was intended to mitigate message traffic by disseminating quotes 
only when the size associated with a bid or offer increases by an 
amount greater than or equal to a certain percentage established by the 
Exchange. While, today, the Exchange's System is not disseminating 
quotes as specified within Options 3, Section 26(c), it is 
disseminating quotes as specified in Phlx Options 3, Section 26. The 
Exchange's current practice is aligned with the original intent. Today, 
NOM mitigates quotes by disseminating them only when the size 
associated with a bid or offer increases by an amount greater than or 
equal to a certain percentage established by the Exchange. Because NOM 
is not amending its practice with respect to the dissemination of 
quotes, the Exchange notes that there would be no change in the number 
of quotes that will be disseminated by the Exchange and the proposed 
change aligns with the original intent of the rule.
    NOM's proposal to amend its rule text identical to Phlx to permit 
it to determine the percentage by which it will disseminate an updated 
bid or offer price based on the size on an issue-by-issue basis is 
consistent with the Act. This proposal would provide NOM the same 
flexibility as Phlx to permit it to determine the way it will mitigate 
quotes among options. NOM's proposal to commence posting the percentage 
specified within proposed Options 3, Section 26(a)(3) on the Exchange's 
website will continue to provide transparency to Participants.
    Finally, removing current Options 3, Section 26(d) which provides 
that all message traffic mitigation mechanisms which are used on NOM 
will be identical for the OPRA ``top of the book'' broadcast, is 
consistent with the Act. The Exchange will mitigate quotes pursuant to 
its rules for all quotes on the Exchange, including those that 
constitute the Exchange's best bid and offer. The text of Options 3, 
Section 26(d) is unnecessary as OPRA publishes messages disseminated by 
each options exchange in a similar fashion. Further, NOM Options 5, 
Section 1(17) describes the type of information disseminated by OPRA.
    Today, and over the years, Phlx's number of listed underlyings 
exceeds the underlyings listed on NOM and, therefore, utilizing a 
message traffic protocol identical to Phlx Options 3, Section 26(c) 
would permit NOM to sufficiently mitigate quotes.
Options 3, Section 27
    The Exchange's proposal to update a citation to Rule 4626 within 
Options 3, Section 27, Limitation of Liability, from Rule 4626 to 
Equity 2, Section 17 will bring greater clarity to the rule and is 
therefore consistent with the Act. The proposed amendment is non-
substantive.
Options 10, Sections 5, 6, and 9
    The Exchange's proposal to amend Options 10, Sections 5, 6, and 9 
to amend the certain terminology in those rules to align with General 4 
terminology is consistent with the Act. These non-substantive 
amendments will bring greater clarity to the current registration 
requirements.

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.
Options 3, Section 26
    The Exchange's proposal to amend Options 3, Section 26, Message 
Traffic Mitigation, to replace its current rule with a rule identical 
to Phlx Options 3, Section 26 does not create an undue burden on 
competition. Specifically, removing the rule text within Options 3, 
Section 26(a), (b) and (d) and amending the rule text within (c) aligns 
with NOM's current practice for mitigating message traffic. NOM's 
current practice will remain unchanged with this proposal. NOM would 
continue to utilize its current quote mitigation strategies without 
amending the quantity of messages disseminated.
    Amending NOM's rule text identical to Phlx to permit it to 
determine the percentage by which it will disseminate an updated bid or 
offer price based on the size on an issue-by-issue basis does not 
impose an undue burden on competition, rather the amendment would 
provide NOM the same flexibility as Phlx to permit it to determine the 
way it will mitigate quotes among options. Posting the percentage 
specified within proposed Options 3, Section 26(a)(3) on the Exchange's 
website, does not impose an undue burden on competition, rather the 
proposal will continue to provide transparency to Participants.
Options 3, Section 27
    The Exchange's proposal to update a citation to Rule 4626 within 
Options 3, Section 27, Limitation of Liability, from Rule 4626 to 
Equity 2, Section 17 does not impose an undue burden on competition. 
The proposal will bring greater clarity to the rule. This amendment is 
non-substantive.
Options 10, Sections 5, 6 and 9
    The Exchange's proposal to amend Options 10, Sections 5, 6, and 9 
to conform the terminology to General 4 terminology does not impose and 
undue burden on competition, rather it will bring greater clarity to 
the current registration requirements. These amendments are non-
substantive.

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 \21\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\22\
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    \21\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \22\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \23\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, Rule 19b-4(f)(6)(iii) \24\ permits the Commission to 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has 
requested that the Commission waive the operative delay to permit the 
Exchange to immediately amend Options 3, Section 26 to adopt a rule 
identical to Phlx's current rule, which would reflect NOM's current 
quote mitigation practice. According to the Exchange, current Options 
3, Section 26 does not correctly explain the way NOM mitigates quote 
messages and the Exchange believes its proposal will provide clarity 
regarding how NOM currently mitigates quote messages.
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    \23\ 17 CFR 240.19b-4(f)(6).
    \24\ 17 CFR 240.19b-4(f)(6)(iii).
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    Further, the Exchange believes that updating the citations and 
terminology within Options 3, Section 27 and

[[Page 53125]]

Options 10, Sections 5, 6 and 9 will clarify its Rulebook.
    The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest 
because it will allow the Exchange to immediately implement changes to 
its Rulebook that are designed to reflect the Exchange's current 
practice with respect to quote mitigation. According to the Exchange, 
the proposal will not impact NOM's current quote mitigation practice 
and therefore will neither alter the quantity of quotes the Exchanges 
disseminates, nor the manner in which the Exchange disseminates quote 
messages. In addition, the Commission believes the proposed changes to 
Options 3, Section 27, and Options 10, Sections 5, 6, and 9 are 
designed to bring greater clarity to the Exchange's Rulebook. 
Therefore, the Commission hereby waives the 30-day operative delay and 
designates the proposed rule change as operative upon filing.\25\
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    \25\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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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-NASDAQ-2021-074 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-NASDAQ-2021-074. 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-NASDAQ-2021-074 and 
should be submitted on or before October 15, 2021.
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    \26\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\26\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-20655 Filed 9-23-21; 8:45 am]
BILLING CODE 8011-01-P