Notice2022-10612
Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Routing Functionality in Connection With a Technology Migration
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
May 18, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 87 Issue 96 (Wednesday, May 18, 2022)</title>
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[Federal Register Volume 87, Number 96 (Wednesday, May 18, 2022)]
[Notices]
[Pages 30294-30305]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-10612]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-94897; File No. SR-ISE-2022-11]
Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Routing
Functionality in Connection With a Technology Migration
May 12, 2022.
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 27, 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.
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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 the
Substance of the Proposed Rule Change
The Exchange proposes to amend the following sections within
Options 5, Order Protection and Locked and Crossed Markets: Section 2,
Order Protection; Section 3, Locked and Crossed Markets; and Section 4,
Order Routing to Other Exchanges.
Additionally, the Exchange proposes to make corresponding
amendments to the following sections within Options 3, Options Trading
Rules: Section 5, Entry and Display of Single-Leg Orders; Section 7,
Types of Orders and Order and Quote Protocols; Section 9, Trading
Halts; Section 10, Priority of Quotes and Orders; and Section 11,
Auction Mechanisms. Also, amendments are proposed to the following
sections within Options 7, Pricing Schedule: Section 1, General
Provisions; Section 3, Regular Order Fees and Rebates; and Section 6,
Other Options Fees and Rebates.
[[Page 30295]]
The text of the proposed rule change is available on the Exchange's
website at <a href="https://listingcenter.nasdaq.com/rulebook/ise/rules">https://listingcenter.nasdaq.com/rulebook/ise/rules</a>, 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
In connection with a technology migration to an enhanced Nasdaq,
Inc. (``Nasdaq'') functionality which results in higher performance,
scalability, and more robust architecture, the Exchange intends to
adopt certain trading functionality currently utilized at Nasdaq
affiliate exchanges. Specifically, the Exchange proposes to conform the
routing functionality available on ISE to that of Nasdaq BX, Inc.\3\
The Exchange proposes to amend the following sections within Options 5,
Order Protection and Locked and Crossed Markets: Section 2, Order
Protection; Section 3, Locked and Crossed Markets; and Section 4, Order
Routing to Other Exchanges. Additionally, the Exchange proposes to make
corresponding amendments to the following sections within Options 3,
Options Trading Rules: Section 5, Entry and Display of Single-Leg
Orders; Section 7, Types of Orders and Order and Quote Protocols;
Section 9, Trading Halts; Section 10, Priority of Quotes and Orders;
and Section 11, Auction Mechanisms, to account for the proposed
amendments to Options 5. Also, amendments are proposed within the
following sections of Options 7, Pricing Schedule: Section 1, General
Provisions; Section 3, Regular Order Fees and Rebates; and Section 6,
Other Options Fees and Rebates.
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\3\ GEMX and MRX incorporate ISE Options 5 by reference.
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Today, ISE Options 5 describes how ISE routes orders in options via
Nasdaq Execution Services, LLC (``NES'') \4\ to away markets. Utilizing
NES to route orders to away markets is optional. Today, Members may
elect to not route orders through NES and designate those orders as Do-
Not-Route-Orders pursuant to Options 5, Section 4(b).\5\ In the event
that NES cannot provide Routing Services, the Exchange will cancel
orders that, if processed by the Exchange, would violate Options 5,
Section 2 (prohibition on trade-throughs) or Options 5, Section 3
(prohibition on locked and crossed markets).\6\ Further, ISE Options 5
describes the manner in which ISE may route to another exchange via an
Intermarket Sweep Order (``ISO'') \7\ under certain circumstances.\8\
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\4\ NES is a broker-dealer and the Routing Facility of the
Exchange. NES routes orders in options listed and open for trading
on the System to away markets either directly or through one or more
third-party unaffiliated routing broker-dealers pursuant to Exchange
Rules on behalf of the Exchange. NES is subject to regulation as a
facility of the Exchange, including the requirement to file proposed
rule changes under Section 19 of the Securities Exchange Act of
1934, as amended. See Options 5, Section 4(a).
\5\ A do-not-route order is a market or limit order that is to
be executed in whole or in part on the Exchange only. Due to prices
available on another options exchange (as provided in Options 5
(Order Protection; Locked and Crossed Markets)), any balance of a
do-not-route order that cannot be executed upon entry, or placed on
the Exchange's limit order book, will be automatically cancelled.
See Options 3, Section 7(m).
\6\ See Supplementary Material .02 to Options 5, Section 4.
\7\ Options 5, Section 1(h) provides, ``Intermarket Sweep Order
(``ISO'')'' means a limit order for an options series that,
simultaneously with the routing of the ISO, one or more additional
ISOs, as necessary, are routed to execute against the full displayed
size of any Protected Bid, in the case of a limit order to sell, or
any Protected Offer, in the case of a limit order to buy, for the
options series with a price that is superior to the limit price of
the ISO. A Member may submit an Intermarket Sweep Order to the
Exchange only if it has simultaneously routed one or more additional
Intermarket Sweep Orders to execute against the full displayed size
of any Protected Bid, in the case of a limit order to sell, or
Protected Offer, in the case of a limit order to buy, for an options
series with a price that is superior to the limit price of the
Intermarket Sweep Order. An ISO may be either an Immediate-Or-Cancel
Order or an order that expires on the day it is entered.''
\8\ See Supplementary Material .01 and .07 to Options 5, Section
2.
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Pursuant to Supplementary Material .02 to Options 5, Section 2, ISE
permits certain orders to first be exposed at the NBBO to all Members
for execution at the National Best Bid or Offer (``NBBO'') before the
order would be routed to another market for execution (``flash
functionality''). Currently, with respect to flash functionality, when
an incoming order is priced at or through the Away Best Bid or Offer
(``ABBO''), when the ABBO is better than the Exchange Best Bid or Offer
(``BBO''), such order is exposed at the current NBBO to all Exchange
Members for a period of time established by the Exchange not to exceed
one (1) second. During the exposure period, Exchange Members may enter
responses up to the size of the order being exposed in the regular
trading increment applicable to the option.\9\ If at the end of the
exposure period, the order is executable at the then-current NBBO and
ISE is not at the then-current NBBO, responses that equal or better the
NBBO will be executed in price priority, and at the same price,
allocated pro-rata based on size, after Priority Customer orders are
allocated.\10\ If during the exposure period, the order becomes
executable on ISE at the prevailing NBBO, the exposure period will be
terminated, and the order will be executed against orders and quotes on
the order book and responses received during the exposure period.\11\
If during the exposure period the Exchange receives an unrelated order
on the opposite side of the market from the exposed order that could
trade against the exposed order at the prevailing NBBO price, the
exposure period will be terminated and the orders will be executed.\12\
If after an order is exposed, the order cannot be executed in full on
the Exchange at the then-current NBBO or better, and it is marketable,
the lesser of the full displayed size of the Protected Bid(s) or
Protected Offer(s) that are priced better than ISE's quote or the
balance of the order will be sent to NES and any additional balance
will be executed on ISE if it is marketable.\13\ Any additional
[[Page 30296]]
balance of the order that is not marketable against the then-current
NBBO will be placed on ISE's order book.\14\ A Do-Not-Route Order that
meets the criteria for the flash order functionality will also be
exposed. If the Do-Not-Route Order cannot be executed in full on the
Exchange at the then-current NBBO or better, the balance of the order
will be placed on ISE's order book if it is not marketable against the
then-current NBBO, or the balance of the order will be cancelled.
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\9\ If a trading halt is initiated during the exposure period,
the exposure period will be terminated without execution. See
Supplementary Material .02 to Options 5, Section 2.
\10\ The percentage of the total number of contracts available
at the same price that is represented by the size of a Member's
response. See Supplementary Material .02(a) to Options 5, Section 2.
\11\ Such interest will be executed in price priority. At the
same price, Priority Customer Orders will be executed first in time
priority and then all other interest (orders, quotes and responses)
will be allocated pro-rata based on size. See Supplementary Material
.02(b) to Options 5, Section 2.
\12\ See Supplementary Material .02(c) to Options 5, Section 2.
\13\ Supplementary Material .06 to Options 5, Section 2 provides
that in addressing Public Customer orders that are not automatically
executed because there is a displayed bid or offer on another
exchange trading the same options contract that is better than the
best bid or offer on the Exchange pursuant to the Supplementary
Material of Options 5, Section 2, the Exchange will act in
compliance with its rules and with the provisions of the Exchange
Act and the rules thereunder, including, but not limited to, the
requirements in Section (6)(b)(4) and (5) of the Exchange Act that
the rules of national securities exchange provide for the equitable
allocation of reasonable dues, fees, and other charges among its
Members and issuers and other persons using its facilities, and not
be designed to permit unfair discrimination between customers,
issuers, brokers, or dealers.
\14\ See Supplementary Material .02(d) to Options 5, Section 2.
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Today, Non-Customer orders \15\ may opt out of being processed in
accordance with Supplementary Material .02 of Options 5, Section 2.\16\
If a Non-Customer opts out, when the automatic execution of an incoming
Non-Customer order would result in an impermissible Trade Through, and
it is marketable, the lesser of the full displayed size of the
Protected Bid(s) or Protected Offer(s) that are priced better than
ISE's quote or the balance of the order will be sent to NES and any
additional balance of the order will be executed on ISE if it is
marketable. Any additional balance of the order that is not marketable
against the then-current NBBO will be placed on ISE's order book.\17\
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\15\ The term ``Non-Customer'' means a person or entity that is
a broker or dealer in securities. See Options 1, Section 1(a)(24).
\16\ See Supplementary Material .04 to Options 5, Section 2.
\17\ See Supplementary Material .04(a) to Options 5, Section 2.
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Today, Sweep Orders \18\ will not be processed in accordance with
Supplementary Material .02 of this Options 5, Section 2. Rather, when
the automatic execution of an incoming Sweep Order would result in an
impermissible Trade Through, and it is marketable, the lesser of the
full displayed size of the Protected Bid(s) or Protected Offer(s) that
are priced better than ISE's quote or the balance of the order will be
sent to NES and any additional balance of the order will be executed on
ISE if it is marketable. Any portion of the order not executed shall be
cancelled.\19\ If a Sweep Order is not marketable when it is submitted
to the Exchange, it shall be cancelled.\20\
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\18\ A Sweep Order is a limit order that is to be executed in
whole or in part on the Exchange and the portion not so executed
shall be routed pursuant to Supplementary Material .05 to Options 5,
Section 2 to Eligible Exchange(s) for immediate execution as soon as
the order is received by the Eligible Exchange(s). Any portion not
immediately executed by the Eligible Exchange(s) shall be canceled.
If a Sweep Order is not marketable when it is submitted to the
Exchange, it shall be canceled. See Options 3, Section 7(s).
\19\ See Supplementary Material .05(a) to Options 5, Section 2.
\20\ See Supplementary Material .05(b) to Options 5, Section 2.
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Proposal
The Exchange proposes to amend ISE's order routing functionality to
conform to that of BX Options 5, Section 4. As part of the technology
migration, Nasdaq seeks to conform certain trading functionality to
functionality currently available on other Nasdaq affiliated options
markets to create a similar routing experience for market participants
across the Nasdaq options markets. Similar to BX, ISE would continue to
route orders to away markets via NES. Similar to BX, ISE would offer
the following order types for routing: DNR Order, FIND Order and SRCH
Order. Each order type for routing will be explained below.
ISE would no longer offer flash functionality because the proposed
routing functionality, similar to BX, would permit an order to be
exposed for a period of time that would allow other Members to trade
with the order prior to the order routing to an away market. ISE
proposes to remove the rule text related to flash functionality within
Supplementary Material .02 to Options 5, Section 2.
Sweep Orders were adopted on ISE in 2014, to supplement ISE's away
market routing capabilities.\21\ Sweep Orders do not enter the flash
functionality process of Supplementary Material .02 of Options 5,
Section 2 and are processed separately. This proposal would eliminate
the Sweep Order type within Options 3, Section 7(s) and remove the
Sweep Order routing discussion within Supplementary Material .05 to
Options 5, Section 2. Sweep Orders are not necessary to facilitate the
routing of Public Customer and Non-Customer orders to away markets
because the proposed routing functionality would route all orders to
away markets uniformly. Additionally, uniformly, all orders would be
subject to re-pricing if the order would otherwise lock or cross an
away market. The Exchange would continue to not cancel marketable
orders that could not be executed on ISE because the order would lock
or cross an away market, rather the order would be re-priced with the
new routing functionality.
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\21\ See Securities Exchange Act Release No. 72816 (August 12,
2014), 79 FR 48811 (August 18, 2014) (SR-ISE-2014-37) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change on Non-
Customer Linkage and Sweep Orders). Prior to the introduction of
Sweep Orders, the Exchange only routed Public Customer orders to
away markets and cancelled any marketable Non-Customer orders that
could not be executed on the ISE in compliance with the Options
Order Protection and Locked/Crossed Market Plan. Sweep Orders were
intended to facilitate the routing of Public Customer and Non-
Customer orders to away markets.
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With the new routing process, a Route Timer would begin for each
order that is subject to routing on the Exchange. While Members may not
opt out of the Route Timer, as is the case today, the proposed routing
process would create a uniform streamlined process for routing all
orders (FIND and SRCH) where a market participant has elected to have
an order routed; Member may continue to elect to not have their orders
routed. The new routing process does not distinguish as between Public
Customer orders and Non-Customer orders, rather all orders would be
processed in the same manner. Further, the proposed routing process
would serve to further harmonize routing across Nasdaq affiliated
markets.
The Exchange also proposes to remove Supplementary Material .04 to
Options 5, Section 2, which sets forth routing procedures for Non-
Customer orders that opt out of being processed under the flash
functionality. The Exchange has proposed to replace its current away
routing regime with the proposed FIND and SRCH order routing types. The
processing of Sweep Orders and the routing procedures under
Supplementary Material .04 to Options 5, Section 2 were established as
alternative routing procedures to the flash functionality and because
the Exchange proposes to eliminate the flash order functionality, these
routing procedures are no longer needed under the proposed routing
procedures.
Finally, the rule text within Supplementary Material .06 to Options
5, Section 2,\22\ relating to Public Customer orders that are not
automatically executed because there is a displayed bid or offer on
another exchange trading the same options contract that is better than
the best bid or offer on the Exchange, would be removed as handling of
Public Customer orders is being amended to conform to BX Options 4
handling. The Exchange will explain that handling below. The rule text
within Supplementary Material .06 to Options 5, Section 2 was adopted
in 2009 when ISE adopted new rules to implement the Options Order
Protection and Locked/Crossed Market Plan.\23\ ISE
[[Page 30297]]
continues to be subject to compliance with its Rules, the Act, and the
rules thereunder, including Sections 6(b)(4) and (5) of the Act \24\
which require the Exchange to: (1) Provide for the equitable allocation
of reasonable dues, fees, and other charges among its participants and
other persons using its facilities; and (2) prohibit unfair
discrimination among customers, issuers, brokers or dealers. As noted
in the Approval Order to SR-ISE-2009-27, Customers may choose to avoid
having their orders routed away by entering their order with an
Immediate-or-Cancel \25\ or Fill-or-Kill designation \26\ in addition
to the DNR functionality.
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\22\ See note 13 above.
\23\ See Securities Exchange Act Release No. 60559 (August 21,
2009), 74 FR 44425 (August 28, 2009) (SR-ISE-2009-27) (Order
Granting Approval of a Proposed Rule Change as Modified by Amendment
No. 1 Thereto To Adopt Rules Implementing the Options Order
Protection and Locked/Crossed Market Plan).
\24\ 15 U.S.C. 78f(b)(4) and (5).
\25\ An immediate-or-cancel order is a limit order that is to be
executed in whole or in part upon receipt. Any portion not so
executed is to be treated as cancelled. An immediate-or-cancel order
entered by a Market Maker through the Specialized Quote Feed
protocol will not be subject to the (i) Limit Order Price Protection
and Size Limitation Protection as defined in Options 3, Section
15(b)(2) and (3); or (ii) Limit Order Price Protection as defined in
Supplementary Material .07(d) to Options 3, Section 14. See Options
3, Section 7(b)(3).
\26\ A fill-or-kill order is a limit order that is to be
executed in its entirety as soon as it is received and, if not so
executed, treated as cancelled. See Options 3, Section 7(b)(2).
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The Exchange proposes to remove the Supplementary Material to
Options 5, Section 3 \27\ which describes how an order would be handled
when the price of an incoming limit order that is not executable upon
entry would lock or cross a Protected Quotation because that
functionality is being amended with this filing. Specifically, today,
the order would be handled in accordance with the provisions of
Supplementary Material .02, .04 or .05 to Options 5, Section 2, as
applicable. The Exchange's proposal removes Supplementary Material .02,
.04 and .05 to Options 5, Section 2, therefore this section would no
longer be possible as the current order handling is being amended with
this proposal.
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\27\ Supplementary Material .01 to Options 5, Section 3
provides, ``When the price of an incoming limit order that is not
executable upon entry would lock or cross a Protected Quotation,
such order shall be handled in accordance with the provisions of
Supplementary Material .02, .04 or .05 to Options 5, Section 2, as
applicable.''
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The Exchange also proposes to make certain conforming amendments
within Options 3. First, the Exchange proposes to remove rule text
within Options 3, Section 5(b)(1) which relates to flash functionality.
Options 3, Section 5(b)(1) provides, ``Orders that are not
automatically executed will be handled as provided in Supplementary
Material .02 to Options 5, Section 2; provided that Members may specify
that a Non-Customer order should instead be accepted and immediately
canceled automatically by the System at the time of receipt.'' This
rule text would no longer be necessary as the flash functionality is
being eliminated.
The Exchange also proposes to renumber Options 3, Section 5(b)(2)
as Options 3, Section 5(b)(1).
The Exchange proposes to amend Options 3, Section 9, Trading Halts,
at subparagraph (d)(2). Among other things, the trading halt rule
describes the processing of Market Orders exposed at the NBBO pursuant
to Supplementary Material. 02 to Options 5, Section 2 after a trading
halt. This rule text is no longer necessary with the elimination of
flash functionality.
The Exchange also proposes to amend Options 3, Section 10(a)(ii)
\28\ to remove a reference to the flash functionality that is being
eliminated. The Exchange also proposes to renumber Options 3, Section
10(a)(i) and (ii) as Options 3, Section 10(a)(1) and (2) to conform the
numbering in that rule and correct a citation within Options 3, Section
10(c)(1)(B)(i)(b) from subparagraph (a)(1)(E) to subparagraph
(c)(1)(E). The Exchange proposes to amend Options 3, Section 11(g) \29\
to remove a reference to the flash functionality that is being
eliminated.
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\28\ Options 3, Section 10(a)(ii) provides, ``Applicability.
This rule does not apply to the Block Order Mechanism described
within Options 3, Section 11(a), the Facilitation Mechanism
described within Options 3, Section 11(b), the Solicited Order
Mechanism described within Options 3, Section 11(d), the Price
Improvement Mechanism described within Options 3, Section 13, orders
described within Options 3, Section 12 or an exposure period as
provided in Options 5, Section 2 at Supplementary Material .02,
unless Options 3, Section 10 is specifically referenced within ISE
Rules applicable to the aforementioned functionality.''
\29\ Options 3, Section 11(g) provides, ``Concurrent Complex
Order and single leg auctions. An auction in the Block Order
Mechanism at Options 3, Section 11(a), Facilitation Mechanism at
Options 3, Section 11(b), Solicited Order Mechanism at Options 3,
Section 11(d), or Price Improvement Mechanism at Options 3, Section
13(d), respectively, or an exposure period as provided in
Supplementary Material .02 to Options 5, Section 2, for an option
series may occur concurrently with a Complex Order Exposure Auction
at Supplementary Material .01 to Options 3, Section 14, Complex
Facilitation Auction at Options 3, Section 11(c), Complex Solicited
Order Auction at Options 3, Section 11(e), or Complex Price
Improvement Mechanism auction at Options 11, Section 13(e),
respectively, for a Complex Order that includes that series. To the
extent that there are concurrent Complex Order and single leg
auctions involving a specific option series, each auction will be
processed sequentially based on the time the auction commenced. At
the time an auction concludes, including when it concludes early,
the auction will be processed pursuant to Options 3, Section 11(a),
(b), (d), or Section 13(a) or Supplementary Material .02 to Options
5, Section 2, as applicable, for the single option, or pursuant to
Supplementary Material .01 to Options 3, Section 14, Options 3,
Section 11(c), 11(e), Options 3, Section 13(e), as applicable, for
the Complex Order, except as provided for at Options 3, Section
13(e)(4)(vi).''
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Finally, the Exchange proposes to amend Options 7, Pricing
Schedule, to remove all references to pricing related to the flash
functionality. This would include the description of a Flash Order \30\
within Options 7, Section 1, General Provisions; the pricing for Flash
Orders within Options 7, Section 3, Regular Order Fees and Rebates;
\31\ and the waiver of the Marketing Fee for Flash Orders within
Options 7, Section 6, Other Options Fees and Rebates.\32\
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\30\ A ``Flash Order'' is an order that is exposed at the
National Best Bid or Offer by the Exchange to all members for
execution, as provided under Supplementary Material .02 to Options
5, Section 2. Unless otherwise noted in Section 3 pricing, Flash
Orders will be assessed the applicable ``Taker'' Fee for the
initiation of a Flash Order and will be paid/assessed the applicable
``Maker'' Rebate/Fee for responses. See Options 7, Section 1.
\31\ A market participant's order that initiates a Flash Order
will be assessed the appropriate Taker Fee in Section 3. All market
participant responses to Flash Orders in Select Symbols will be
paid/assessed the appropriate Maker Rebate/Fee in Section 3.
Responses to Flash Orders in Non-Select Symbols will be $0.25 per
contract for non-Priority Customers and $0.00 for Priority
Customers. See Options 7, Section 3 at note 17. The Exchange
proposes to reserve note 17 within Options 7, Section 3.
\32\ Today, Marketing fees are waived NDX, NQX, MNX, Flash
Orders and for Complex Orders in all symbols. See Options 7, Section
6E.
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The Exchange proposes to re-title Options 5, Section 4 as ``Order
Routing'' similar to BX Options 5, Section 4. Proposed new Options 5,
Section 4(a) defines various terms similar to BX such as ``exposure''
and ``exposing'', except for terms specific to ISE such as utilizing
``Member'' instead of ``Participant'' and not capitalizing the term
``Order Book''.\33\
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\33\ The Exchange is not defining a ``System Routing Table''
within this rule similar to BX as that term is not utilized
elsewhere in the rule.
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As noted above, the Exchange proposes to offer 2 new routing
strategies, FIND and SRCH, as well as an option to ``Do Not Route'' or
``DNR.'' Additionally, the Exchange proposes to amend Options 3,
Section 7 to add a new Supplementary Material .04 that provides,
``Routing Strategies. Orders may be entered on the Exchange with a
routing strategy of FIND or SRCH, or, in the alternative, an order may
be marked Do-Not-Route (``DNR'') as provided in Options 5, Section 4
through FIX only.'' The addition of this sentence will make clear which
routing strategies may be utilized when submitting an order type and it
will provide a citation to the routing rule for ease of reference.
Routing options may be combined with all available order types and
times-in-force, with the exception of order types
[[Page 30298]]
and times-in-force whose terms are inconsistent with the terms of a
particular routing option. Also, the Exchange would remove the current
description of ``Do-Not-Route Orders'' within Options 3, Section 7(m).
With respect to order entry protocols, the Exchange notes that FIX
\34\ is the only order entry protocol on ISE that permits routing.
OTTO,\35\ another order entry protocol on ISE, does not permit routing.
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\34\ ``Financial Information eXchange'' or ``FIX'' is an
interface that allows Members and their Sponsored Customers to
connect, send, and receive messages related to orders and auction
orders to the Exchange. Features include the following: (1)
Execution messages; (2) order messages; (3) risk protection triggers
and cancel notifications; and (4) post trade allocation messages.
See Supplementary Material .03(a) to Options 3, Section 7.
\35\ ``Ouch to Trade Options'' or ``OTTO'' is an interface that
allows Members and their Sponsored Customers to connect, send, and
receive messages related to orders, auction orders, and auction
responses to the Exchange. Features include the following: (1)
Options symbol directory messages (e.g., underlying and complex
instruments); (2) System event messages (e.g., start of trading
hours messages and start of opening); (3) trading action messages
(e.g., halts and resumes); (4) execution messages; (5) order
messages; (6) risk protection triggers and cancel notifications; (7)
auction notifications; (8) auction responses; and (9) post trade
allocation messages. See Supplementary Material .03(b) to Options 3,
Section 7.
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Proposed Options 5, Section 4(a) provides that the System \36\ will
route FIND and SRCH Orders with no other contingencies. Of note,
Immediate-or-Cancel Orders (``IOC'') will be canceled immediately if
not executed, and will not be routed. ISE's System would first check
the order book for available contracts for potential execution against
the FIND or SRCH Orders. After the System checks the order book for
available contracts, orders are sent to other available market centers
for potential execution. When checking the order book, the System will
seek to execute at the price at which it would send the order to an
away market.\37\
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\36\ The term ``System'' means the electronic system operated by
the Exchange that receives and disseminates quotes, executes orders
and reports transactions. See Options 1, Section (a)(50).
\37\ See proposed Options 5, Section 4(a). With respect to
Reserve Orders, only the displayed portion of the order would be
exposed.
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The System will initiate a Route Timer for each FIND or SRCH order
it receives that locks/crosses an away market price. An order will not
route to an away market before the conclusion of the Route Timer which
shall not exceed one second and shall begin at the time orders are
accepted into the System. At the conclusion of each Route Timer, the
System will consider whether an order can be routed. While the Route
Timer is running, each order will be exposed \38\ on the Nasdaq ISE
Order Feed.\39\ This exposure allows other Members to interact with the
order before it is routed to an away market. If an incoming order is
joining an already established BBO price when the ABBO is locked or
crossed with the BBO such order will join the established BBO price and
no exposure notification will be sent, otherwise a notification will be
sent. Also, an order exposure will be sent when the order size is
modified. For purposes of this Rule, the Exchange's opening process is
governed by Options 3, Section 8 and includes an opening after a
trading halt (``Opening Process''). The order routing process would be
available to Members from 9:30 a.m. Eastern Time until market close and
shall route orders as described within proposed Options 5, Section 4.
Finally, all routing of orders shall comply with Options 5, Options
Order Protection and Locked and Crossed Market Rules.
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\38\ For purposes of this Rule, ``exposure'' or ``exposing'' an
order shall mean a notification sent to Members with the price,
size, and side of interest that is available for execution. See
proposed Options 5, Section 4(a).
\39\ Nasdaq ISE Order Feed (``Order Feed'') provides information
on new orders resting on the book (e.g., price, quantity and market
participant capacity). In addition, the feed also announces all
auctions. The data provided for each option series includes the
symbols (series and underlying security), put or call indicator,
expiration date, the strike price of the series, and whether the
option series is available for trading on ISE and identifies if the
series is available for closing transactions only. The feed also
provides order imbalances on opening/reopening. See Options 3,
Section 23(a)(2).
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With respect to priority when routing as proposed within Options 5,
Section 4(a)(i), orders sent to other markets do not retain time
priority with respect to other orders in the System and the System
shall continue to execute other orders while routed orders are away at
another market center. Once routed by the System, an order becomes
subject to the rules and procedures of the destination market
including,\40\ but not limited to, order cancellation. A routed order
can be for less than the original incoming order's size. If a routed
order is subsequently returned to the Exchange, in whole or in part,
that routed order, or its remainder, shall receive a new time stamp
reflecting the time of its return to the System, unless any portion of
the original order remains on the System, in which case the routed
order shall retain its timestamp and its priority.\41\ As proposed, the
priority when routing is the same as priority described in BX Options
5, Section 4(a)(i).
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\40\ Members whose orders are routed to away markets shall be
obligated to honor such trades that are executed on away markets to
the same extent they would be obligated to honor a trade executed on
the Exchange. See proposed Options 5, Section 4(a)(ii).
\41\ See proposed Options 5, Section 4(a)(i).
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The Exchange proposes to relocate current Options 5, Section 4(f)
into proposed Options 5, Section 4(a)(ii). This is identical to rule
text within BX Options 5, Section 4(a)(ii).
The Exchange proposes to remove the following sentence within
current Options 5, Section 4, ``The Exchange may automatically route
ISOs to other exchanges under certain circumstances, including pursuant
to Supplementary Material .02 to Options 5, Section 2 (``Routing
Services''). In connection with such services, the following shall
apply:.'' This sentence is no longer necessary and is being replaced by
proposed Options 5, Section 4(a).
The Exchange proposes to retain the current provisions regarding
NES within current Options 5, Section 4(a)-(e) and re-letter those
paragraphs (A)-(E) to correspond with lettering within BX Options 5,
Section 4 which contains similar rule text. No substantive amendments
are proposed to those paragraphs.
The Exchange also proposes to update a citation within new Options
5, Section 4(a)(ii)(B) from Options 3, Section 7(m), which is being
reserved, to proposed Options 5, Section 4(a)(iii)(A). Finally, the
Exchange proposes to conform a citation to subparagraph (d) to ``D''
within new Options 5, Section 4(a)(ii)(E).
The Exchange proposes to add the new routing order types within
proposed Options 5, Section 4(iii). The Exchange proposes to state,
``The following order types are available:''. Of note, a routing option
may be combined with all available order types and times-in-force noted
within Options 3, Section 7, with the exception of order types and
times-in-force whose terms are inconsistent with the terms of a
particular routing option.\42\
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\42\ See proposed Options 5, Section 4(a).
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The proposed first routing option is a DNR Order. The proposed rule
text is substantively the same as BX Options 5, Section 4(iii)(A). The
Exchange proposes to describe a DNR Order within proposed Options 5,
Section 4(iii)(A). A DNR Order will never be routed outside of the
Exchange regardless of the prices displayed by away markets. In order
to avoid trading through, a DNR Order may execute on the Exchange at a
price equal to or better than, but not inferior to, the best away
market price. If an away market is at a better price, the DNR Order
will remain in the Exchange's order book and would display re-priced.
Specifically, the Exchange would re-price the DNR Order
[[Page 30299]]
at a price one minimum price variation (``MPV'') inferior to that away
best bid/offer. For example, if the DNR Order is locking or crossing
the ABBO, the DNR Order shall be entered into the order book at the
ABBO price and displayed one MPV away from the ABBO. The Exchange would
immediately expose the order at the ABBO to Members, provided the
option series has opened for trading. Of note, today, ISE would cancel
any unexecuted balances that cannot be placed on the order book. With
the re-platform, any unexecuted balances may rest on the order book as
the Exchange would re-price an order that locks or crosses an away
market as described within this proposal.
Any incoming order interacting with a DNR Order that is resting on
the Exchange's order book would execute at the ABBO price, unless the
ABBO is improved to a price which crosses the DNR Order's already
displayed price. In the case where the ABBO crosses the DNR Order's
price, the incoming order will execute at the previous ABBO price as
the away market crossed a displayed price. Away markets have similar
obligations not to trade through ISE's market. In the case where the
ABBO is improved to a price which locks the DNR Order's displayed
price, the incoming order will execute at the DNR Order's displayed
price. Should the best away market move to an inferior price level, the
DNR Order will automatically re-price from its one MPV inferior to the
original ABBO and display one MPV away from the new ABBO or its
original limit price, and expose such orders at the new ABBO. Once an
order is booked to the order book at its original limit price, it will
remain at that price until executed or cancelled. Thereafter, should
the best away market improve its price such that it locks or crosses
the DNR Order limit price on the order book, the Exchange will execute
the resulting incoming order that is routed from the away market that
locked or crossed the DNR Order limit price. By way of example,
consider the following sequence of events in the System for a DNR
Order:
9:45:00:00:00--MIAX Quote 0.95 x 1.20
9:45:00:00:10--OPRA updates MIAX BBO 0.95 x 1.20
9:45:00:00:20--ISE Local BBO Quote 1.00 x 1.15
9:45:00:00:30--OPRA disseminates ISE BBO updates: 1.00 x 1.15
9:45:00:00:35: CBOE Quote 1.00 x 1.12
9:45:00:00:45--OPRA disseminates CBOE BBO 1.00 x 1.12
9:45:00:00:50--DNR Order: Buy 5 @1.15 (exposes @ABBO of 1.12,
displays 1 MPV from ABBO @1.11)
9:45:00:00:51--OPRA disseminates ISE BBO updates: 1.11 x 1.15 (1.11
being the DNR Order displaying 1 MPV from ABBO)
9:45:00:00:60--MIAX Quote updates to 1.00 x 1.10 (1.10 crosses the
displayed DNR Order price, violating locked/crossed market rules;
henceforth, we need not protect this price)
9:45:00:00:65--OPRA disseminates MIAX BBO 1.00 x 1.10
9:45:00:00:75--ISE Market Maker Order to Sell 5 @1.09
9:45:00:00:76--Market Maker Order immediately executes against DNR
Order 5 contracts @1.12 (1.12 being the `previous' ABBO price
disseminated by CBOE before the receipt of the DNR Order that was
subsequently and illegally crossed by MIAX's 2nd quote)
9:45:00:00:77--OPRA disseminates ISE BBO updates: 1.00 x 1.15
(reverts back to BBO set by ISE Local Quote since the DNR Order has
executed)
Members may also elect to route their orders. The Exchange proposes
to offer market participants two choices for routing options orders:
FIND and SRCH. At a high level, a FIND Order will only attempt to route
once and then post to the order book; it will not be eligible for
routing until the next time the option series is subject to a new
Opening Process.\43\ In contrast, a SRCH Order may route at any time,
including during and after an Opening Process. A SRCH Order that rests
on the order book may be routed to an away market if it is locked or
crossed by an away market. Each of these proposed options for routing
will be explained in greater detail below.
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\43\ As explained below, FIND Orders that are not marketable
with the ABBO upon receipt will be treated as DNR for the remainder
of the trading day and post to the Order Book, even in the event
that there is a new Opening Process after a trading halt.
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FIND Order
The Exchange proposes to adopt a new routing option at Options 5,
Section 4(a)(iii)(B) for FIND Orders. The routing process for a FIND
Order is the same as BX Options 5, Section 4(a)(iii)(B). As noted
above, a FIND Order is an order that is: (i) Routable at the conclusion
of an Opening Process; and (ii) routable upon receipt during regular
trading, after an option series is open. Each order marked as ``FIND''
that is submitted after an Opening Process would initiate a Route Timer
and route in the order in which its Route Timer ends. FIND Orders that
are not marketable with the ABBO upon receipt will be treated as DNR
for the remainder of the trading day, and will not be subject to
routing even in the event that there is a new Opening Process after a
trading halt. At the end of an Opening Process, any FIND Order that is
priced through the Opening Price, which is defined within ISE Options
3, Section 8(a)(3), will be cancelled, and any FIND Order that is at or
inferior to the Opening Price will execute or book pursuant to ISE
Opening Process at Options 3, Section 8(j). The Opening Process is
described in greater detail within Options 3, Section 8.
With respect to FIND Orders, Options 5, Section 4(a)(iii)(B)(2)
provides that generally, a FIND Order will be included in the displayed
BBO at its limit price, unless the FIND Order locks or crosses the
ABBO, in which case it will be entered into the order book at the ABBO
price and displayed at one MPV inferior to the ABBO. If there exists a
locked ABBO when the FIND Order is entered onto the order book, the
FIND Order will be entered into the order book at the ABBO price and
displayed and re-priced one MPV inferior to the ABBO. If during a Route
Timer, ABBO markets move and the FIND Order becomes non-marketable
against the ABBO and BBO, the FIND Order will post on the order book at
its limit price. If the FIND Order is locked or crossed by away quotes,
it will route at the completion of the Route Timer. However, if the
ABBO worsens but remains better than the BBO, the FIND Order will re-
price and be re-exposed at the new price(s) without interrupting the
Route Timer.
If, during the Route Timer, any new interest arrives opposite the
FIND Order that is equal to or better than the ABBO price, the FIND
Order will trade against such new interest at the ABBO price, unless
the ABBO is improved to a price which crosses the FIND Order's already
displayed price, in which case the incoming order will execute at the
previous ABBO price as the away market crossed a displayed price.
Paragraph (a)(iii)(B)(2) of Options 5, Section 4 is intended to
describe the possible scenarios that may occur during a Route Timer
that has been initiated for a FIND Order. The Exchange believes that
describing these scenarios in this introductory paragraph will provide
a basis to understand certain FIND Order behaviors in certain
circumstances and eliminate the need to have these circumstances
repeated throughout the rule. The proposed remaining paragraphs outline
System behavior in various circumstances taking into consideration away
market pricing to provide market participants with expected outcomes.
Proposed ISE Options 5, Section 4(a)(iii)(B)(3) sets forth a
scenario where a FIND Order received after an Opening Process is not
marketable against the BBO or the ABBO. In this case, the FIND Order
will be entered into the order book at its limit price and treated as
[[Page 30300]]
DNR for the remainder of the trading day, even if there is a new
Opening Process after a trading halt. As noted above, the FIND Order
will only attempt to route once.
Proposed ISE Options 5, Section 4(a)(iii)(B)(4) describes a
scenario where a FIND Order received after an Opening Process is
marketable against the BBO when the ABBO is inferior to the BBO. In
this case the FIND Order will be traded on the Exchange at or better
than the BBO price. If the FIND Order has size remaining after
exhausting the BBO, the Exchange proposes that it may: (1) Trade at the
next BBO price (or prices) if the order price is locking or crossing
that price (or prices) up to and including the ABBO price, (2) be
entered into the order book at its limit price, or (3) if locking or
crossing the ABBO, be entered into the order book at the ABBO price and
displayed one MPV away from the ABBO. The FIND Order will be treated as
DNR for the remainder of the trading day, even in the event that there
is a new Opening Process after a trading halt.
Proposed ISE Options 5, Section 4(a)(iii)(B)(5) describes a
scenario where a FIND Order received after an Opening Process is
marketable against the BBO when the ABBO is equal to the BBO. In this
case, the FIND Order will be traded on the Exchange at the BBO. If the
FIND Order has size remaining after exhausting the BBO, it will
initiate a Route Timer, and expose the FIND Order at the ABBO to allow
market participants an opportunity to interact with the remainder of
the FIND Order. During the Route Timer, the FIND Order will be included
in the BBO at a price one MPV away from the ABBO. If during the Route
Timer, the ABBO markets move such that the FIND Order is no longer
marketable against the ABBO, the Exchange proposes that it may: (i)
Trade at the next BBO price (or prices) if the FIND Order price is
locking or crossing that price (or prices), and/or (ii) be entered into
the order book at its limit price if not locking or crossing the BBO.
Proposed ISE Options 5, Section 4(a)(iii)(B)(6) describes a
scenario where at the end of the Route Timer pursuant to subparagraph
(5) above, the FIND Order is still marketable with the ABBO. In this
case, the FIND Order will route to an away market up to a size equal to
the lesser of either: (1) An away market's size or (2) the remaining
size of the FIND Order. If the FIND Order still has remaining size
after routing, the Exchange proposes that it will (i) trade at the next
BBO price or better, subject to the order's limit price, and, if
contracts still remain unexecuted, the remaining size will be routed to
away markets disseminating the same price as the BBO, or (ii) be
entered into the order book and posted either at its limit price or re-
priced one MPV away if the order would otherwise lock or cross the
ABBO. If size still remains, as is always the case, the FIND Order will
not be eligible for routing until the next time the option series is
subject to a new Opening Process, which may include a re-opening after
a trading halt.
Proposed ISE Options 5, Section 4(a)(iii)(B)(7) describes a
scenario where a FIND Order is received after an Opening Process that
is marketable against the ABBO when the ABBO is better than the BBO. In
this case, the FIND Order will initiate a Route Timer, and expose the
order at the ABBO to allow Members and other market participants an
opportunity to interact with the FIND Order. As described within ISE
Options 5, Section 4(a)(iii)(B)(8), if, at the end of the Route Timer
pursuant to subparagraph (7) above, the ABBO is still at the best price
and is marketable with the FIND Order, the order will route to the away
market(s) whose disseminated price(s) is better than the BBO, up to a
size equal to the lesser of either: (1) The away markets' size, or (2)
the remaining size of the FIND Order. If the FIND Order still has
remaining size after such routing, it will (i) trade at the BBO price
or better, subject to the order's limit price, and, if contracts still
remain unexecuted, the remaining size will be routed to away markets
disseminating the same price as the BBO, or (ii) be entered into the
order book and posted either at its limit price or re-priced one MPV
away if the order would otherwise lock or cross the ABBO. If the FIND
Order still has remaining size it will not be eligible for routing
until the next time the option series is subject to a new Opening
Process, which may include a re-opening after a trading halt.
Finally, proposed ISE Options 5, Section 4(a)(iii)(B)(9) provides
that a FIND Order that is routed to an away market(s) will be marked as
an Intermarket Sweep Order ``ISO'' and designated as an IOC order.
SRCH Orders
The Exchange proposes to adopt a SRCH Order functionality at
proposed Options 5, Section 4(a)(iii)(C). The routing process for a
SRCH Order is the same as BX Options 5, Section 4(a)(iii)(C). A SRCH
Order is routable at any time the option series is open for trading. A
SRCH Order on the order book during an Opening Process (including a re-
opening following a trading halt), whether it is received prior to an
Opening Process or it is a Good-Till-Canceled Order \44\ (``GTC'') SRCH
Order from a prior day, may be routed as part of an Opening Process.
Similar to FIND Orders, SRCH Orders would initiate their own Route
Timers and route in the order in which their Route Timers end.
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\44\ A Good-Till-Canceled Order is an order to buy or sell that
remains in force until the order is filled, canceled or the option
contract expires; provided, however, that GTC Orders will be
canceled in the event of a corporate action that results in an
adjustment to the terms of an option contract. See ISE Options 3,
Section 7(r).
---------------------------------------------------------------------------
Proposed ISE Options 5, Section 4(a)(iii)(C)(1) provides, similar
to a FIND Order, that at the end of an Opening Process, any SRCH Order
that is priced through the Opening Price, as defined within Options 3,
Section 8(a)(iii), will be cancelled, and any SRCH Order that is at or
inferior to the Opening Price will execute or book pursuant to Options
3, Section 8(k). With respect to both FIND and SRCH Orders, Options 3,
Section 8 provides a process whereby ISE arrives at an Opening Price.
The System cancels any order or quote priced through the Opening Price
which was not able to be satisfied either by routing to an away
destination or trading in full as part of the opening trade.\45\
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\45\ See Options 3, Section 8(j)(6)(A). The Exchange notes that
``priced through the Opening Price'' within Options 3, Section 8 is
intended to mean buying interest with a price higher than the
Opening Price and selling interest with a price lower than the
Opening Price.
---------------------------------------------------------------------------
Similar to the FIND Order proposal, the Exchange proposes to add a
paragraph at proposed ISE Options 5, Section 4(a)(iii)(C)(2), which is
intended to describe at the outset possible scenarios that may occur
during a Route Timer, including if the ABBO moves and if marketable new
interest arrives. In the paragraphs that follow, paragraph (C)(2) would
apply in the case where a Route Timer is initiated. Proposed ISE
Options 5, Section 4(a)(iii)(C)(2) would provide that, generally,
during a Route Timer a SRCH Order will be included in the displayed BBO
at its limit price, unless the SRCH Order locks or crosses the ABBO, in
which case it will be entered into the order book at the ABBO price and
displayed one MPV inferior to the ABBO. If there exists a locked ABBO
when the SRCH Order is entered onto the order book, the SRCH Order will
be entered into the order book at the ABBO price and displayed one MPV
inferior to the ABBO. Once on the order book, the SRCH Order may route
if it is locked or crossed by an away market.
If during a Route Timer, ABBO markets move such that the SRCH Order
is no longer marketable against the ABBO or BBO, the SRCH Order will
[[Page 30301]]
book on the order book at its limit price. If, during the Route Timer,
any new interest arrives opposite the SRCH Order that is equal to or
better than the ABBO price, the SRCH Order will trade against such new
interest at the ABBO price, unless the ABBO is improved to a price
which crosses the SRCH Order's already displayed price, in which case
the incoming order will execute at the previous ABBO price as the away
market crossed a displayed price. If the ABBO worsens but remains
better than the BBO, the SRCH Order will re-price and be re-exposed at
the new price(s) without interrupting the Route Timer. If an ABBO locks
or crosses the SRCH Order during a new Route Timer, which would
subsequently initiate at the conclusion of any Route Timer if interest
remains, the SRCH Order may route to the away market at the ABBO at the
conclusion of such Route Timer. Finally, if the SRCH Order is locked or
crossed by away quotes, it will route at the completion of the Route
Timer. The System will route and execute contracts contemporaneously at
the end of the Route Timer.
As noted herein and proposed within proposed ISE Options 5, Section
4(a)(iii)(C)(3), a SRCH Order received after an Opening Process that is
not marketable against the BBO or the ABBO will be entered into the
order book at its limit price. Once on the order book, the SRCH Order
is eligible for routing if it is locked or crossed by an away market.
Proposed ISE Options 5, Section 4(a)(iii)(C)(4) presents a scenario
where a SRCH Order received after an Opening Process is marketable
against the BBO when the ABBO is inferior to the BBO. In this case, the
SRCH Order will trade at or better than the BBO price. If the SRCH
Order has size remaining after exhausting the BBO, the Exchange
proposes that it may: (1) Trade at the next BBO price (or prices) if
the order price is locking or crossing that price (or prices) up to and
including the ABBO price, and/or (2) be routed, subject to a Route
Timer, to away markets if all Exchange interest at better or equal
prices has been exhausted, and/or (3) be entered into the order book at
its limit price if not locking or crossing the BBO or the ABBO.
Proposed ISE Options 5, Section 4(a)(iii)(C)(5) provides a scenario
where the SRCH Order received after an Opening Process is marketable
against the BBO when the ABBO is equal to the BBO. In this case, the
SRCH Order will trade at the BBO. If the SRCH Order has size remaining
after exhausting the BBO, it will initiate a Route Timer and expose the
SRCH Order at the ABBO to allow Members an opportunity to interact with
the remainder of the SRCH Order. During the Route Timer, the SRCH Order
will be included in the BBO at a price one MPV away from the ABBO.
Proposed ISE Options 5, Section 4(a)(iii)(C)(6) provides that if at
the end of the Route Timer pursuant to subparagraph (5), the SRCH Order
is still marketable with the ABBO, the SRCH Order will route to an away
market up to a size equal to the lesser of either: (1) The away
market's size, or (2) the remaining size of the SRCH Order. If after
that the SRCH Order still has remaining size after routing, it may: (i)
Trade at the next BBO price (or prices) if the order price is locking
or crossing that price (or prices) up to the ABBO price, and/or (ii) be
entered into the order book at its limit price if not locking or
crossing the BBO or the ABBO.
Proposed ISE Options 5, Section 4(a)(iii)(C)(7) provides a scenario
where a SRCH Order received after an Opening Process is marketable
against the ABBO when the ABBO is better than the BBO. In this case,
the SRCH Order will initiate a Route Timer, and expose the SRCH Order
at the ABBO to allow Members an opportunity to interact with the SRCH
Order. If during the Route Timer, the ABBO markets move such that the
SRCH Order is no longer marketable against the ABBO, it may: (i) Trade
at the next BBO price (or prices) if the SRCH Order price is locking or
crossing that price (or prices), and/or (ii) be entered into the order
book at its limit price if not locking or crossing the BBO.
Proposed ISE Options 5, Section 4(a)(iii)(C)(8) provides that if at
the end of the Route Timer pursuant to subparagraph (7), the ABBO is
still the best price and is marketable with the SRCH Order, the order
will route to the away market(s) whose disseminated price(s) is better
than the BBO, up to a size equal to the lesser of either: (1) The away
markets' size, or (2) the remaining size of the SRCH Order. However, if
the SRCH Order still has remaining size after such routing, the
Exchange proposes that it may: (i) Trade at the next BBO price (or
prices) if the order price is locking or crossing that price (or
prices) up to the ABBO price, and/or (ii) be entered into the order
book at its limit price if not locking or crossing the BBO or the ABBO.
Finally, as proposed in ISE Options 5, Section 4(a)(iii)(C)(9), and
similar to FIND Orders, a SRCH Order that is routed to an away
market(s) will be marked as an ISO and designated as an IOC Order.
Re-Pricing
Currently, Options 3, Section 5(b) provides that orders, other than
Intermarket Sweep Orders (as defined in Options 5, Section 1(h)), will
not be automatically executed by the System at prices inferior to the
NBBO (as defined in Options 5, Section 1(j)).\46\ Orders that are not
automatically executed are handled pursuant to the flash functionality
as provided in Supplementary Material .02 to Options 5, Section 2;
provided that Members may specify that a Non-Customer order should
instead be accepted and immediately cancelled automatically by the
System at the time of receipt. Orders are not executed at a price that
trades through another market or displayed at a price that would lock
or cross another market. An order that is designated by the Member as
routable is routed in compliance with applicable Trade-Through and
Locked and Crossed Markets restrictions.\47\
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\46\ Options 5, Section 1(j) provides, `` `NBBO' means the
national best bid and offer in an options series as calculated by an
Eligible Exchange.''
\47\ See Options 3, Section 5(d).
---------------------------------------------------------------------------
The Exchange proposes to amend Options 3, Section 5(c) to specify
that the System will automatically execute eligible orders using the
Exchange's displayed BBO or the Exchange's non-displayed order book
(``internal BBO'') if the best bid and/or offer on the Exchange has
been re-priced. With this change, a DNR order that locks or crosses the
ABBO may re-price and rest on the order book. Today, the DNR Order that
locks or crosses the ABBO would be cancelled. The re-pricing itself is
proposed to be described within Options 3, Section 5(c) and (d) similar
to BX Options 3, Section 5(c) and (d). Currently, Options 3, Section
5(d) describes Trade-Through Compliance and Locked or Crossed Market
behavior.
The Exchange proposes to add rule text within Options 3, Section
5(d) to describe how a non-routable order would be re-priced and remove
rule text that describes the flash functionality, which is being
eliminated, and language providing that, in lieu of using the flash
functionality, Members may specify that a Non-Customer order should
instead be cancelled automatically by the System at the time of
receipt.
Specifically, the Exchange proposes to state within Options 3,
Section 5(c), ``The System automatically executes eligible orders using
the Exchange's displayed best bid and offer (``BBO'') or the Exchange's
non-displayed order book (``internal BBO'') if the best bid and/or
offer on the Exchange has been re-priced pursuant to subsection (d)
[[Page 30302]]
below.'' Also, the Exchange proposes to state within Options 3, Section
5(d), ``An order that is designated by a Member as non-routable will be
re-priced in order to comply with applicable Trade-Through and Locked
and Crossed Markets restrictions. If, at the time of entry, an order
that the entering party has elected not to make eligible for routing
would cause a locked or crossed market violation or would cause a
trade-through violation, it will be re-priced to the current national
best offer (for bids) or the current national best bid (for offers) and
displayed at one minimum price variance above (for offers) or below
(for bids) the national best price.'' The Exchange believes that the
addition of this language, similar to language within BX Options 3,
Section 5(d), will provide Members with additional information as to
the manner in which orders are handled by the System when those orders
would lock or cross an away market.
Supplementary Material to Options 5, Section 2
The Exchange proposes to remove the rule text within Supplementary
Material .01 to Options 5, Section 2 that provides,
All public customer ISOs entered by an Electronic Access Member
on behalf of an Eligible Exchange shall be represented on the
Exchange as Priority Customer Orders, as defined in Options 1,
Section 1(a)(38). There shall be no obligation on Electronic Access
Members to determine whether the public customer for whom the
Eligible Exchange is routing an ISO meets the definition of a
Priority Customer.
Current ISE Options 5, Section 4(f) provides, ``Entering Members
whose orders are routed to away markets shall be obligated to honor
such trades that are executed on away markets to the same extent they
would be obligated to honor a trade executed on the Exchange.'' The
Exchange believes that Options 5, Section 4(f), which is proposed to be
relocated to Options 5, Section 4(a)(ii), is more expansive than
Supplementary Material .01 to Options 5, Section 4 and would apply to
the indicator for the type of market participant. Furthermore,
obligations associated with submitting ISO Orders are born by the
member submitting the ISO Order. Each Exchange's rules describe how ISO
Orders may be utilized.\48\
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\48\ See e.g., Phlx Options 3, Section 7(b)(3), The Nasdaq
Options Market LLC Options 3, Section 7(a)(7), and BX Options 3,
Section 7(a)(6).
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The Exchange proposes to remove the rule text within Supplementary
Material .07 to Options 5, Section 2 that provides, ``All orders
entered on the Exchange and routed to another exchange via an ISO
pursuant to the Supplementary Material of this Options 5, Section 2
that result in an execution shall be binding on the Member that entered
such orders.'' As noted above, current ISE Options 5, Section 4(f)
provides that, ``Entering Members whose orders are routed to away
markets shall be obligated to honor such trades that are executed on
away markets to the same extent they would be obligated to honor a
trade executed on the Exchange.'' Supplementary Material .07 to Options
5, Section 2 refers to orders entered pursuant to the flash
functionality pursuant to Supplementary Material .02 to Options 5,
Section 2, which will be eliminated and, therefore, renders the rule
text within Supplementary Material .07 to Options 5, Section 2
unnecessary.
Supplementary Material to Options 5, Section 4
The Exchange proposes to remove the rule text within Supplementary
Material .01 to Options 5, Section 4 that provides, ``Options 5,
Section 4 does not prohibit NES or third-party unaffiliated routing
broker-dealers used by NES from designating a preferred market-maker at
the other exchange to which the order is being routed pursuant to
Options 5, Section 4.'' As noted above, current Options 5, Section 4(f)
provides, ``Entering Members whose orders are routed to away markets
shall be obligated to honor such trades that are executed on away
markets to the same extent they would be obligated to honor a trade
executed on the Exchange.'' The Exchange believes that this rule is
more expansive than Supplementary Material .01 to Options 5, Section 4
and would apply to designating a preferred market-maker.
The Exchange proposes to remove the rule text within the
Supplementary Material .02 to Options 5, Section 4 that provides, ``In
the event that NES cannot provide Routing Services, the Exchange will
cancel orders that, if processed by the Exchange, would violate Options
5, Section 1 (prohibition on trade-throughs) or Options 5, Section 3
(prohibition on locked and crossed markets).'' The Exchange's proposal
to re-price orders which would otherwise lock or cross an away market
would cause an order, that was subject to routing, to rest on the order
book in the event that NES was unable to provide routing services. The
Exchange proposes to remove the rule text within Supplementary Material
.02 to Options 5, Section 4 to permit the Exchange to re-price and rest
such orders on the order book, similar to DNR Orders.
Finally, the Exchange proposes to renumber the rule text within
Supplementary Material .03 to Options 5, Section 4 to .01.
Implementation
The Exchange intends to begin implementation of the proposed rule
change for ISE prior to December 22, 2023. Separately, the Exchange
plans to begin implementation of the proposed rule change prior to
December 23, 2022, with respect to MRX, and prior to September 1, 2023,
with respect to GEMX. Each implementation would commence with a limited
symbol migration and continue to migrate symbols over several weeks.
The Exchange will issue an Options Trader Alert to Members to provide
notification of the symbols that will migrate and the relevant dates
for each exchange.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\49\ in general, and furthers the objectives of
Sections 6(b)(4) and Section 6(b)(5) of the Act,\50\ in particular, in
that it provides for the equitable allocation of reasonable dues, fees,
and other charges among members and issuers and other persons using any
facility, and is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers and is designed to promote just
and equitable principles of trade and to protect investors and the
public interest. The Exchange's proposal to adopt routing strategies,
that are substantially the same as BX, with respect to DNR, FIND, and
SRCH Orders is consistent with the Act because the functionality will
provide ISE Members the same flexibility for routing orders that is
afforded to BX Participants today.\51\ With this proposal, Members
would continue to route orders to away markets to obtain the best
price, while also accessing ISE's order book. Further, with this
proposal, Members will have the added ability to elect a particular
routing strategy, FIND or SRCH, when routing their order. Also, Members
may continue to elect not to route their order, as is the case today.
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\49\ 15 U.S.C. 78f(b).
\50\ 15 U.S.C. 78f(b)(4) and (5).
\51\ See BX Options 5, Section 4, Order Routing.
---------------------------------------------------------------------------
Additionally, today, orders that are not automatically executed are
handled pursuant to the flash functionality as provided in
Supplementary Material .02 to Options 5, Section 2; provided that
Members may specify that a Non-
[[Page 30303]]
Customer order should instead be accepted and immediately cancelled
automatically by the System at the time of receipt. This proposal
eliminates flash functionality and proposes to re-price orders that
would otherwise lock or cross an away market. As is the case today, an
order that is designated by the Member as routable will route in
compliance with applicable Trade-Through and Locked and Crossed Markets
restrictions.
While the Exchange is eliminating the current flash functionality,
ISE is proposing to adopt order routing strategies that include a Route
Timer that, similar to flash functionality, will continue to advertise
orders prior to routing them in an attempt to obtain a local execution.
Unlike the flash functionality where Non-Customer orders may opt out,
the Route Timer will be established for each order that may route.
During the Route Timer, similar to the flash functionality, Members may
enter responses up to the size of the order being exposed. However,
unlike flash functionality, an order that matches the price of an order
during the Route Time will trade against that order without waiting for
the Route Timer to complete. In contrast, with flash functionality,
orders allocate at the end of the timer, with the exception of specific
scenarios that will cause early termination \52\ and allocate pursuant
to Options 3, Section 10, with Priority Customers executing first in
time and all other market participant orders being allocated size pro-
rata.
---------------------------------------------------------------------------
\52\ See Supplementary Material .02(b) and (c) to Options 5,
Section 2.
---------------------------------------------------------------------------
The Exchange's proposal to remove Sweep Orders within Supplementary
Material .05 to Options 5, Section 2 and Options 3, Section 7(s) is
consistent with the Act as a Sweep Order would no longer be necessary
without the flash functionality and Sweep Orders would be discontinued.
Sweep Orders do not enter the flash functionality process of
Supplementary Material .02 of Options 5, Section 2 and are processed
separately. Sweep Orders are not necessary to facilitate the routing of
Public Customer and Non-Customer orders to away markets because the
proposed routing functionality would route all orders to away markets
uniformly. Additionally, uniformly, all orders would be subject to re-
pricing if the order would otherwise lock or cross an away market. The
Exchange would continue to not cancel marketable orders that could not
be executed on ISE because the order would lock or cross an away
market, rather the order would be re-priced with the new routing
functionality. With the new routing process, a Route Timer would begin
for each order that is subject to routing on the Exchange. While
Members may not opt out of the Route Timer, as is the case today, the
proposed routing process would create a uniform streamlined process for
routing all orders (FIND and SRCH) where a market participant has
elected to have an order routed; Members may continue to elect to not
have their orders routed. The new routing process does not distinguish
as between Public Customer orders and Non-Customer orders, rather all
orders would be processed in the same manner. Further, the proposed
routing process would serve to further harmonize routing across Nasdaq
affiliated markets.
The Exchange's proposal to remove Supplementary Material .04 to
Options 5, Section 2, which sets forth routing procedures for Non-
Customer orders that opt out of being processed under the flash
functionality is consistent with the Act. The Exchange's proposal
replaces its current away routing regime with the proposed FIND and
SRCH order routing types; all orders would be processed in a uniform
manner. The processing of Sweep Orders and the routing procedures under
Supplementary Material .04 to Options 5, Section 2 were established as
alternative routing procedures to the flash functionality and because
the Exchange proposes to eliminate the flash order functionality, these
routing procedures are no longer needed under the proposed routing
procedures.
NES will continue to route orders to away markets on behalf of ISE.
Orders executed on ISE would continue to not trade through away
markets. Orders would execute at the best price, whether locally or on
an away market. For these above reasons, the Exchange believes that
eliminating the flash functionality and adopting routing functionality
similar to BX will continue to protect investors and the general public
by continuing to provide Members with an ability to route to away
markets at the best price in the event ISE is not at the best price or
elect not to route.
The Exchange's proposal to offer two new routing strategies to
Members, similar to BX, is consistent with the Act as it will provide
Members with a greater choice when routing. FIND and SRCH Orders will
route away when ISE is not at the best price. All Members may elect to
route orders, as FIND or SRCH, or elect not to route orders (DNR
Orders).
Re-pricing orders that would otherwise lock or cross an away
market, as proposed within Options 3, Section 5 is consistent with the
Act. Today, BX re-prices orders by displaying them one MPV away from
the best bid or offer.\53\ This behavior is consistent with the
protection of investors and the general public because it affords
Participants the ability to obtain the best price offered among the
various options markets while not locking or crossing an away market.
As noted above, the Exchange would continue to not trade through an
away market. Any order that locks or crosses an away market on ISE
would be re-priced as a result of this amendment. This would include
DNR orders resting on the order book and FIND and SRCH Orders that have
not yet routed and are subject to a Route Timer.
---------------------------------------------------------------------------
\53\ See BX Options 3, Section 5.
---------------------------------------------------------------------------
The Exchange's proposal describes a number of potential routing
scenarios to provide Members with greater transparency as to the manner
in which the System would handle their order. The proposed rule also
serves to inform Members about potential outcomes if a member elects to
mark their order as ``DNR.'' The various scenarios are intended to
bring greater transparency to the Exchange's Rules.
The Exchange's proposal to only utilize FIX to route orders is
consistent with the Act because the OTTO protocol is not designed for
routing. Today, Members may not route orders through OTTO and this will
not be changing as a result of the change in routing rules. Members on
ISE may submit and route all orders through FIX. OTTO is an optional
port available to all Members on ISE for the submission of orders.
The Exchange's proposal to remove the rule text within
Supplementary Material .01 to Options 5, Section 2 is consistent with
the Act. Today, ISE Options 5, Section 4(f) requires Members to honor
trades that are executed on away markets to the same extent they would
be obligated to honor a trade executed on the Exchange. This is the
case for all options exchanges that receive routing instructions from
their members. Today, an ISE Member that submits an order and does not
mark that order as DNR would be subject to the flash functionality and
routing rules within Options 5, Section 4. If that order routed to an
away market, the Member would be obligated to honor that trade on the
away market. Supplementary Material .01 to Options 5, Section 2 would
require a public customer ISO entered by an Electronic Access Member to
be represented on the Exchange as a
[[Page 30304]]
Priority Customer Order \54\ pursuant to Options 1, Section 1(a)(38).
On ISE, a public customer order from an away market equates to a
Priority Customer Order on ISE. Supplementary Material .01 to Options
5, Section 2 further states that there is no obligation for an
Electronic Access Member to determine whether the public customer order
from the away market meets the definition of a Priority Customer. As
specified in Options 5, Section 4(f), Members are required to honor
trades from away markets. A trade from an away market from a public
customer would be honored on ISE as a Priority Customer without the
need for additional due diligence. Finally, obligations associated with
submitting ISO Orders are born by the member submitting the ISO Order.
Each Exchange's rules describe how ISO Orders may be utilized.\55\
---------------------------------------------------------------------------
\54\ Options 1, Section 1(a)(38) provides that the term
``Priority Customer'' means a person or entity that (i) is not a
broker or dealer in securities, and (ii) does not place more than
390 orders in listed options per day on average during a calendar
month for its own beneficial account(s).
\55\ See note 48 above.
---------------------------------------------------------------------------
The Exchange's proposal to remove the rule text within
Supplementary Material .07 to Options 5, Section 2 is consistent with
the Act. Supplementary Material .07 to Options 5, Section 2 refers to
orders entered pursuant to the flash functionality within Supplementary
Material .02 to Options 5, Section 2, which will be eliminated, and,
therefore, renders the rule text within Supplementary Material .07 to
Options 5, Section 2 unnecessary.
The Exchange's proposal to remove the rule text within
Supplementary Material .01 to Options 5, Section 4 is consistent with
the Act. Supplementary Material .01 to Options 5, Section 4 states that
Options 5, Section 4 does not prohibit NES or third-party unaffiliated
routing broker-dealers used by NES from designating a preferred market-
maker at the other exchange to which the order is being routed pursuant
to Options 5, Section 4. The Exchange believes that it is not necessary
to retain this rule text, as Options 5, Section 4(f) obligates Members
to honor such trades that are executed on away markets, to the same
extent they would be obligated to honor a trade executed on the
Exchange. The Exchange notes that once an order is routed to an away
market, the rules of the away market are in effect. For example, if an
order was routed from Nasdaq ISE to Nasdaq Phlx LLC (``Phlx''), the
Phlx rules would apply with respect to the execution of that order. The
ISE Member would be required to honor the trade executed on Phlx
pursuant to Phlx's rules.
The Exchange's proposal to remove the rule text within the
Supplementary Material .02 to Options 5, Section 4 is consistent with
the Act because the Exchange proposes to re-price orders which would
otherwise lock or cross an away market. This proposal would permit the
Exchange to re-price and rest such orders on the order book, similar to
DNR Orders.
The Exchange's proposal to remove pricing related to flash
functionality is reasonable, equitable and not unfairly discriminatory
because the flash functionality would no longer be available to any
Member. It is reasonable to remove the fees related to flash orders and
the references to flash orders from the Pricing Schedule because the
Exchange is removing the flash functionality from its Rulebook.
Additionally, it is equitable and not unfairly discriminatory to remove
the fees related to flash orders and the references to flash orders
from the Pricing Schedule because no Exchange Member would be able to
utilize the flash functionality once it is removed from the System.
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 adopt routing, similar to BX,\56\ does
not impose an undue burden on inter-market competition as the proposal
will permit ISE Members to continue to route orders to away markets to
obtain the best price, while also accessing ISE's order book, albeit
with new routing options that are afforded to BX Participants today.
The FIND and SRCH routing options would be available to all ISE
Members. Finally, the options not to route (DNR Order) would continue
to be offered to all ISE Members.
---------------------------------------------------------------------------
\56\ See BX Options 5, Section 4, Order Routing.
---------------------------------------------------------------------------
The Exchange's proposal to remove Sweep Orders within Supplementary
Material .05 to Options 5, Section 2 and Options 3, Section 7(s) does
not impose an undue burden on competition because a Sweep Order would
no longer be necessary without the flash functionality and Sweep Orders
would be discontinued.
The Exchange's proposal to only utilize FIX to route order does not
impose an undue burden on competition because the OTTO protocol is not
designed for routing. Today, Members may not route orders through OTTO
and this will not be changing as a result of the change in routing
rules. Members on ISE may submit and route all orders through FIX. OTTO
is an optional port available to all Members on ISE for submitting
orders.
The Exchange's proposal to re-price orders that would lock or cross
away markets does not impose an undue burden on inter-market
competition. Similar to BX Options 5, Section 4, the Exchange would re-
price orders one MPV away from the best bid or offer. Better priced
orders would continue to be accessible on ISE's order book. ISE would
continue to not trade through an away market. Any order that locks or
crosses an away market on ISE would be re-priced as a result of this
amendment. This would include DNR orders resting on the order book and
FIND and SRCH Orders that have not yet routed and are subject to a
Route Timer.
The Exchange's proposal to remove the rule text within
Supplementary Material .01 to Options 5, Section 2, Supplementary
Material .07 to Options 5, Section 2 and Supplementary Material .01 to
Options 5, Section 4 does not impose an undue burden on competition
because ISE Options 5, Section 4(f) already requires Members to honor
trades that are executed on away markets to the same extent they would
be obligated to honor a trade executed on the Exchange. This would
apply to the indicator for the type of market participant and
designating a preferred market-maker, as well as obviate the need for
redundant or unnecessary rule text.
The proposal to remove Supplementary Material .07 to Options 5,
Section 2 does not impose an undue burden on competition. This rule
discusses the obligation of a member who has entered an order on the
Exchange that is routed away via an ISO pursuant to the flash
functionality. The Exchange is proposing to remove the flash
functionality, so the rule is no longer needed. In addition,
obligations associated with submitting ISO Orders are born by the
member submitting the ISO Order. Each Exchange's rules describe how ISO
Orders may be utilized.\57\ Finally, the Exchange's proposal to remove
the rule text within the Supplementary Material .02 to Options 5,
Section 4 does not impose an undue burden on competition because the
Exchange proposes to re-price orders which would otherwise lock or
cross an away market.
---------------------------------------------------------------------------
\57\ See note 48 above.
---------------------------------------------------------------------------
The Exchange's proposal to remove pricing related to flash
functionality does not impose an undue burden on competition because
the flash
[[Page 30305]]
functionality would no longer be available to any Member.
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, if consistent with
the protection of investors and the public interest, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \58\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\59\
---------------------------------------------------------------------------
\58\ 15 U.S.C. 78s(b)(3)(A).
\59\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
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.
---------------------------------------------------------------------------
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
<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#e597908980c8868a8888808b9196a5968086cb828a93"><span class="__cf_email__" data-cfemail="255750494008464a4848404b5156655640460b424a53">[email protected]</span></a>. Please include
File Number SR-ISE-2022-11 on the subject line.
Paper Comments
<bullet> 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-2022-11. 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 (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>).
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-ISE-2022-11 and should be submitted on
or before June 8, 2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\60\
---------------------------------------------------------------------------
\60\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-10612 Filed 5-17-22; 8:45 am]
BILLING CODE 8011-01-P
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