Notice2023-20803
Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Options 3, Section 13 Related to PIM
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
September 26, 2023
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 88 Issue 185 (Tuesday, September 26, 2023)</title>
</head>
<body><pre>
[Federal Register Volume 88, Number 185 (Tuesday, September 26, 2023)]
[Notices]
[Pages 66114-66118]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-20803]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-98444; File No. SR-GEMX-2023-11]
Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Options 3,
Section 13 Related to PIM
September 20, 2023.
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 8, 2023, Nasdaq GEMX, LLC (``GEMX'' or ``Exchange'') filed
with the Securities and Exchange Commission (the ``Commission'') the
proposed rule change as described in Items I, II, and III, 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Options 3, Section 7, Types of
Orders and Order and Quote Protocols; Options 3, Section 11, Auction
Mechanisms; and Options 3, Section 13, Price Improvement Mechanism for
Crossing Transactions.
The text of the proposed rule change is available on the Exchange's
website at <a href="https://listingcenter.nasdaq.com/rulebook/gemx/rules">https://listingcenter.nasdaq.com/rulebook/gemx/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
The Exchange proposes to amend Options 3, Section 7, Types of
Orders and Order and Quote Protocols; Options 3, Section 11, Auction
Mechanisms; and Options 3, Section 13, Price Improvement Mechanism for
Crossing Transactions. Each change is described below.
Options 3, Section 7
Opening Only
The Exchange proposes to amend Options 3, Section 7(t), Opening
Sweep \3\ and Supplementary Material .02(e) to Options 3, Section 7
related to Opening Only \4\ or ``OPG'' orders. The proposed rule text
was adopted as part of a planned System migration.\5\ Options 3,
Section 7(t) currently provides that an Opening Sweep would not be
subject to any protections listed in Options 3, Section 15, except
Automated Quotation Adjustments in Options 3, Section 15. Supplementary
Material .02(e) to Options 3, Section 7 currently provides that an OPG
Order would not be subject to any protections listed in Options 3,
Section 15, except Size Limitation. At this time, the Exchange proposes
to amend the rule text to specify that an Opening Sweep and an OPG
Order would be subject to the Market Wide Risk Protection in Options 3,
Section 15.
---------------------------------------------------------------------------
\3\ An Opening Sweep is a one-sided order entered by a Market
Maker through SQF for execution against eligible interest in the
System during the Opening Process. This order type is not subject to
any protections listed in Options 3, Section 15, except for
Automated Quotation Adjustments. The Opening Sweep will only
participate in the Opening Process pursuant to Options 3, Section
8(b)(1) and will be cancelled upon the open if not executed. See
Options 3, Section 7(t).
\4\ An Opening Only (``OPG'') order is entered with a TIF of
``OPG''. This order can only be executed in the Opening Process
pursuant to Options 3, Section 8. This order type is not subject to
any protections listed in Options 3, Section 15, except Size
Limitation. Any portion of the order that is not executed during the
Opening Process is cancelled. OPG orders may not route. See
Supplementary Material .02(e) to Options 3, Section 7.
\5\ See Securities Exchange Act Release No. 96817(February 6,
2023), 88 FR 8922 (February 10, 2023) (SR-GEMX-2023-02) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
Its Rules in Connection With a Technology Migration to Enhanced
Nasdaq Functionality) (``SR-GEMX-2023-02'').
---------------------------------------------------------------------------
The Market Wide Risk Protection in Options 3, Section 15(a)(1)(C)
[[Page 66115]]
automatically removes Member orders when certain firm-set thresholds
are met. Specifically, the Market Wide Risk Protection requires all
Members to provide parameters for the order entry and execution rate
protections. The Market Wide Risk Protection would apply to an Opening
Sweep and an OPG Order because it captures the order entry and
execution rate for both Opening Sweeps and OPG Orders that are entered
in the Opening Process as described in Options 3, Section 8. The
Exchange believes the availability of the Market Wide Risk Protection
during the Opening Process would assist Members in managing their pre-
open risk by allowing Members to adhere to their firm thresholds. The
Exchange notes that other risk protections within Options 3, Section 15
do not apply to either an Opening Sweep or an Opening Only Order
because the risk protection either relies on the BBO, which is
available after the Opening Process, or the risk protection is
optional. Finally, the Exchange also proposes a technical amendment to
capitalize the word ``orders'' in Supplementary Material .02(e) to
Options 3, Section 7.
Options 3, Sections 11 and 13
The Exchange proposes to amend Options 3, Section 11(b)(4)(i)
related to the Facilitation Mechanism. Currently, the last sentence in
Options 3, Section 11(b)(4)(i) provides that a facilitation order will
be cancelled at the end of an exposure period if an execution would
take place at a price that is inferior to the best bid (offer) on GEMX.
The Exchange proposes to amend this sentence to state, the ``Exchange
best bid (offer)'' and remove the phrase ``on Nasdaq GEMX.''
Additionally, the Exchange proposes to add the following rule text to
the end of the sentence, ``or if there is a Priority Customer order on
the same side Exchange best bid (offer) at the same price as the
facilitation price unless the Facilitation Order can execute at a price
that is better than the same side Priority Customer Order.'' Today, a
facilitation order must execute at a price that is better than the same
side BBO if there is a Priority Customer order on the same side. The
proposed rule text is being amended to align to current System
functionality which prevents a Facilitation Order from trading ahead of
a Priority Customer Order. As such, a Priority Customer order on the
same side of the offer must be considered when executing a Facilitation
Order. The Exchange proposes to add similar language to the last
sentence of Options 3, Section 11(d)(3)(A) related to the Solicited
Order Mechanism. The Exchange notes that these amendments do not amend
the current System functionality.
The Exchange proposes to add a new Options 3, Section 11(b)(4)(iv)
to describe the allocation percentage that an Electronic Access Member
is able to obtain in the Facilitation Mechanism. Today, under the
current System operation, the facilitating Electronic Access Member may
not receive an allocation percentage, at the final price point, of more
than 40% of the original size of the Facilitation Order with one or
multiple competing quote(s), order(s), or Response(s), except for
rounding,\6\ when competing quotes, orders, or Responses have contracts
available for execution. Options 3, Section 11(b)(4)(ii) makes clear
that the facilitating Electronic Access Member will be allocated up to
forty percent (40%) (or such lower percentage requested by the Member)
of the original size of the facilitation order, but only after better-
priced Responses, orders and quotes, as well as Priority Customer
Orders and Priority Customer Responses at the facilitation price, are
executed in full at such price point. The proposed rule text expressly
notes that the allocation percentage will not be exceeded except for
rounding purposes. This language represents current System
functionality. The Exchange proposes to add similar language to Options
3, Section 13(d)(7) related to the Price Improvement Mechanism for
Crossing Transactions to note the limitations with respect to
allocations.
---------------------------------------------------------------------------
\6\ GEMX's System will round up to the nearest whole number
during allocation in the Facilitation Mechanism.
---------------------------------------------------------------------------
The Exchange proposes to amend Supplementary Material .04 to
Options 3, Section 11 to replace the word ``quotes'' with ``Responses''
in the Split Price description. Orders and responses in the market that
receive the benefit of the facilitation price may receive executions at
Split Prices. This change to the rule text is intended to utilize the
defined term ``Response'' which pursuant to Options 3, Section 11(b)(3)
may be priced at the price of the order to be facilitated or at a
better price and will only be considered up to the size of the order to
be facilitated.
The Exchange proposes to add a new Supplementary Material .08 to
Options 3, Section 11 to provide that, today, if an allocation would
result in less than one contract, then one contract will be allocated.
The Exchange does not allocate fractional contracts. This language
represents the current System functionality. The Exchange proposes to
add the same sentence within new Supplementary Material .09 to Options
3, Section 13 regarding a PIM. Phlx has similar language.\7\
---------------------------------------------------------------------------
\7\ See Phlx Options 3, Section 13(b)(1)(D).
---------------------------------------------------------------------------
The Exchange proposes to amend Options 3, Section 13(b)(1) through
(3) to harmonize the language within the PIM entry checks with language
within Nasdaq ISE, LLC's (``ISE'') PIM, Nasdaq MRX, LLC's (``MRX'')
PIM, Nasdaq Phlx LLC's (``Phlx'') PIXL and BX's PRISM, without changing
the substantive operations of these price improvement auctions. The
Exchange believes that by utilizing similar language, Members will be
able to compare GEMX's PIM entry checks with similar mechanisms on
Nasdaq affiliated markets.
GEMX proposes to add ``a price that is'' to the end of Options 3,
Section 13(b)(1) and add new subparagraphs (A) and (B) to distinguish
opposite and same side checks. The opposite side check is currently
spelled out in the current rule text, however the same side check does
not specify the NBBO check. Today, if the Agency Order is for less than
50 option contracts, and if the difference between the NBBO or the
difference between the internal best bid and the internal best offer is
$0.01, the Crossing Transaction must be entered at a price that is, on
the same side of the Agency Order equal or better than the NBBO and
better than any Limit Order or quote on GEMX's order book. The Exchange
believes that the addition of the NBBO check will add clarity to the
rule text because the NBBO check is always relevant in the same side
check to avoid a trade-through. The Exchange also proposes to
capitalize ``Limit Order,'' remove the word ``Nasdaq'' before ``GEMX''
and remove other extraneous words as the sentence has been rearranged.
Next, the Exchange proposes to bifurcate the entry check for Agency
Orders of 50 options contracts or more for the account of a Priority
Customer from the entry checks for the account of a broker dealer or
any other person or entity that is not a Priority Customer similar to
other Nasdaq affiliated markets to provide consistent formatting. While
the entry checks for new Options 3, Section 13(b)(2) and (b)(3) will
not differ, the Exchange believes that retaining the same rule text
format across its Nasdaq affiliated markets will allow for an easier
comparison. To that end, the Exchange proposes to amend Options 3,
Section 13(b)(2) to format it similar to Options 3, Section 13(b)(1).
The Exchange proposes to add ``for the account of a Priority Customer''
to (b)(2) to distinguish it from (b)(3) which addresses the account of
a broker dealer
[[Page 66116]]
or any other person or entity that is not a Priority Customer. Options
3, Section 13(b)(2)(A) will also add rule text to address the opposite
side of the market, which is not explicitly noted. Proposed Options 3,
Section 13(b)(2)(A) will provide that if the Agency Order is for the
account of a Priority Customer, and such order is for 50 option
contracts or more, or if the difference between the NBBO or the
difference between the internal BBO is greater than $0.01, a Crossing
Transaction must be entered only at a price that is equal to or better
than the internal BBO and NBBO on the opposite side of the market from
the Agency Order. Further, Options 3, Section 13(b)(2)(B) will
explicitly note the entry check on the same side of the market and
similar to Options 3, Section 13(b)(1) will include the NBBO check.
Proposed Options 3, Section 13(b)(2)(B) will provide that if the Agency
Order is for the account of a Priority Customer, and such order is for
50 option contracts or more, or if the difference between the NBBO or
the difference between the internal BBO is greater than $0.01, a
Crossing Transaction must be entered only on the same side of the
market as the Agency Order, at a price that is at least $0.01 better
than any Limit Order or quote on the GEMX order book and equal to or
better than the NBBO.\8\ The Exchange believes that the addition of the
NBBO check will add clarity to the rule text because the NBBO check is
always relevant in the same side check to avoid a trade-through. The
Exchange also proposes to capitalize ``Limit Order,'' remove the word
``Nasdaq'' before ``GEMX'' and remove other extraneous words as the
sentence has been rearranged.
---------------------------------------------------------------------------
\8\ For example, if the market is 0.98 bid and 0.99 offer, a
Priority Customer PIM Order to buy for less than 50 contracts must
be stopped at 0.98 cents in this scenario to be accepted into a PIM
Auction, provided there is no resting order or quote on the Exchange
order book at 0.98 in which case the PIM Order would be rejected.
---------------------------------------------------------------------------
As noted herein, proposed Options 3, Section 13(b)(3) will mirror
Options 3, Section 13(b)(2) except that it will refer to the account of
a broker dealer or any other person or entity that is not a Priority
Customer. The Exchange also proposes to renumber the remainder of the
paragraphs within Options 3, Section 13(b).
Implementation
The Exchange proposes to amend the Opening Sweep and Opening Only
rule text only, within Options 3, Section 7, with its planned migration
to enhanced Nasdaq functionality. Similar to SR-GEMX-2023-04,\9\ the
Exchange intends to begin implementation of the amendments to the
Opening Sweep and Opening Only rule text within Options 3, Section 7
prior to December 29, 2023. The Exchange would commence its
implementation 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. The other rule amendments would be
operative 30 days from the effective date.
---------------------------------------------------------------------------
\9\ See Securities Exchange Act Release No. 97126 (March 13,
2023), 88 FR 16485 (March 17, 2023) (SR-GEMX-2023-04) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Delay
the Implementation of Certain Trading Functionality) (``SR-GEMX-
2023-04'').
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that its proposal is consistent with section
6(b) of the Act,\10\ in general, and furthers the objectives of section
6(b)(5) of the Act,\11\ in particular, in that it is designed to
promote just and equitable principles of trade and to protect investors
and the public interest.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
Options 3, Section 7
Opening Only
The Exchange's proposal to amend Options 3, Section 7(t), Opening
Sweeps and Supplementary Material .02(e) to Options 3, Section 7
related to OPG Orders is consistent with the Act and the protection of
investors and the general public because the Market Wide Risk
Protection would capture the order entry and execution rate for those
Opening Sweeps and OPG Orders entered in the Opening Process, which is
described in Options 3, Section 8, and would assist Members in managing
their pre-open risk by allowing Members to adhere to their firm
thresholds. The Exchange is providing both order and quote risk
protections in the Opening Process to allow Members to manage their
risk. The Exchange notes that other risk protections within Options 3,
Section 15 do not apply to either an Opening Sweep or an Opening Only
Order because the risk protection either relies on the BBO, which is
available after the Opening Process or the risk protection is optional.
Options 3, Sections 11 and 13
The Exchange's proposal to amend Options 3, Section 11(b)(4)(A)
related to the Facilitation Mechanism is consistent with the Act and
the protection of investors and the general public because the System
ensures that the facilitation order is at a price that is not inferior
to the Exchange best bid (offer) or if there is a Priority Customer on
the same side Exchange best bid (offer) at the same price as the
facilitation price, otherwise the order would be cancelled. This price
check ensures that the auction order may not trade at or through the
Priority Customer order on the same side. This language represents the
current System functionality. Similar changes are proposed to Options
3, Section 11(d)(3)(A) related to the Solicited Order Mechanism with
respect to the contra-side. These amendments represent current System
functionality and similarly ensure that the auction order may not trade
at or through the Priority Customer order on the contra side. This is
consistent with the treatment of Priority Customer in GEMX's order book
allocation, described in Options 3, Section 10, wherein Priority
Customer interest is executed within PIM ahead of any other interest of
Members.\12\
---------------------------------------------------------------------------
\12\ See also GEMX Options 3, Section 13(d)(1), ``At a given
price, `Priority Customer Interest' (Priority Customer Orders and
Improvement Orders from Priority Customers) is executed in full
before `non-Priority Customer Interest' (non-Priority Customer
Orders, Improvement Orders from non-Priority Customers and Market
Maker quotes).''
---------------------------------------------------------------------------
The Exchange's proposal to amend new Options 3, Section
11(b)(4)(iv) related to the Facilitation Mechanism and Options 3,
Section 13(d)(7) related to the Price Improvement Mechanism for
Crossing Transactions is consistent with the Act and the protection of
investors and the general public by permitting rounding to occur as
specified in the Exchange's rules. The proposal states how rounding
interacts with the allocation percentages. The Exchange proposes to
state that it will not permit an allocation percentage greater than the
stated amounts in the auction rules, unless rounding is necessary. This
proposed rule text represents the current System functionality.
The Exchange's proposal to amend Supplementary Material .04 to
Options 3, Section 11 to replace the word ``quotes'' with ``Responses''
in the Split Price description is consistent with the Act and the
protection of investors and the general public because orders and
Responses in the market that receive the benefit of the facilitation
price may receive executions at Split Prices. This change to the rule
text is intended to utilize the defined term Response which pursuant to
Options 3, Section 11(b)(3) may be priced at the price of the order to
be facilitated or at a better price and
[[Page 66117]]
will only be considered up to the size of the order to be facilitated.
The Exchange's proposal to add a new Supplementary Material .08 to
Options 3, Section 11 and a new Supplementary Material .09 to Options
3, Section 13 to provide that if an allocation would result in less
than one contract, then one contract would be allocated is consistent
with the Act and the protection of investors and the general public
because one contract is the minimum unit in which an option may trade
on GEMX. This language represents the current System functionality.
Phlx has similar language.\13\
---------------------------------------------------------------------------
\13\ See Phlx Options 3, Section 13(b)(1)(D).
---------------------------------------------------------------------------
The Exchange's proposal to amend Options 3, Section 13(b)(1)
through (3) to harmonize the language within the PIM entry checks with
language within ISE's PIM, MRX's PIM, Phlx's PIXL and BX's PRISM,
without changing the substantive operations of these price improvement
auctions, is consistent with the Act and the protection of investors
and the general public because by utilizing similar language, Members
will be able to compare GEMX PIM entry checks with similar mechanisms
on Nasdaq affiliated markets.
Amending Options 3, Section 13(b)(1) to add new subparagraphs (A)
and (B) to distinguish opposite and same side checks and add within the
same side check a reference to the NBBO check, is consistent with the
Act and the protection of investors and the general public because the
NBBO check is always relevant in the same side check to avoid a trade-
through. The Exchange believes that the addition of the NBBO check will
add clarity to the rule text because the NBBO check is always relevant
in the same side check to avoid a trade-through. The remainder of the
changes are non-substantive.
The Exchange's proposal to bifurcate the entry check for Agency
Orders of 50 options contracts or more for the account of a Priority
Customer from the entry checks for the account of a broker dealer or
any other person or entity that is not a Priority Customer into two new
paragraphs, a (b)(2) and a (b)(3), is consistent with the Act and the
protection of investors and the general public because retaining the
same rule text format across its Nasdaq affiliated markets will allow
for an easier comparison.
The Exchange's proposal to add ``for the account of a Priority
Customer'' to new subparagraph (b)(2) to explicitly address the
opposite side of the market and also note the NBBO entry check on the
same side of the market is consistent with the Act and the protection
of investors and the general public because the new format will provide
the parameters for each check. Further, the NBBO check is always
relevant in the same side check to avoid a trade-through. The remainder
of the changes are non-substantive. Mirroring the same language within
Options 3, Section 13(b)(2)(B), except to note that it is for the
account of a broker dealer or any other person or entity that is not a
Priority Customer will allow Members to compare GEMX's PIM entry checks
with similar mechanisms on Nasdaq affiliated markets.
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 7
Opening Only
The Exchange's proposal to amend Options 3, Section 7(t), Opening
Sweeps and Supplementary Material .02(e) to Options 3, Section 7
related to OPG Orders does not impose an intra-market burden on
competition because the Market Wide Risk Protection is available to all
Members in the Opening Process. The Exchange's proposal to amend
Opening Sweeps and OPG Orders does not impose an inter-market burden on
competition because other options exchanges may similarly offer such
risk protections on their opening order types.
Options 3, Sections 11 and 13
The Exchange's proposal to amend Options 3, Section 11(b)(4)(A)
related to the Facilitation Mechanism and Options 3, Section
11(d)(3)(A) related to the Solicited Order Mechanism to state that that
the order must execute at a price that is better than the same side BBO
if these is a Priority Customer on the same side does not impose an
intra-market burden on competition because all auction orders in these
aforementioned auction mechanisms would be handled in a uniform manner
by the System such that those orders would not be permitted to trade at
or through the Priority Customer order on the same side. The Exchange's
proposal to amend Options 3, Section 11(b)(4)(A) related to the
Facilitation Mechanism and Options 3, Section 11(d)(3)(A) related to
the Solicited Order Mechanism to state that that the order must execute
at a price that is better than the same side BBO if these is a Priority
Customer on the same side does not impose an inter-market burden on
competition because other options markets similarly have customer
overlay priorities.
The Exchange's proposal to amend new Options 3, Section
11(b)(4)(iv) related to the Facilitation Mechanism and Options 3,
Section 13(d)(7) related to the Price Improvement Mechanism for
Crossing Transactions does not impose an intra-market burden on
competition because the Exchange's rules regarding rounding are applied
in a uniform manner to all Members submitting an order into an auction
mechanism. The Exchange's proposal to amend new Options 3, Section
11(b)(4)(iv) related to the Facilitation Mechanism and Options 3,
Section 13(d)(7) related to the Price Improvement Mechanism for
Crossing Transactions does not impose an inter-market burden on
competition because other options exchanges similarly round in excess
of allocation percentages such as BX.\14\
---------------------------------------------------------------------------
\14\ See BX Options 3, Section 13(ii)(A)(1).
---------------------------------------------------------------------------
The Exchange's proposal to amend Supplementary Material .04 to
Options 3, Section 11 to replace the word ``quotes'' with ``Responses''
in the Split Price description does not impose an intra-market burden
on competition because orders and responses in the market that receive
the benefit of the facilitation price may receive executions at Split
Prices. This clarification to the rule text is intended to correct the
current language. The Exchange's proposal to amend Supplementary
Material .04 to Options 3, Section 11 to replace the word ``quotes''
with ``Responses'' in the Split Price description does not impose an
inter-market burden on competition because this rule text change is
specific to GEMX's rule language.
The Exchange's proposal to add a new Supplementary Material .08 to
Options 3, Section 11 and a new Supplementary Material .09 to Options
3, Section 13 to provide that, today, if an allocation would result in
less than one contract, then one contract will be allocated does not
impose an intra-market burden on competition because the System would
uniformly allocate contracts with a minimum unit of one contract. The
Exchange's proposal to add a new Supplementary Material .08 to Options
3, Section 11 and a new Supplementary Material .09 to Options 3,
Section 13 to provide that, today, if an allocation would result in
less than one contract, then one contract will be allocated does not
impose an inter-market burden on competition because other options
[[Page 66118]]
markets similarly specify a minimum unit of rounding such as Phlx.\15\
---------------------------------------------------------------------------
\15\ See Phlx Options 3, Section 13(b)(1)(D).
---------------------------------------------------------------------------
The Exchange's proposal to amend Options 3, Section 13(b)(1)
through (3) to harmonize the language within the PIM entry checks
within ISE's PIM, MRX's PIM, Phlx's PIXL and BX's PRISM, without
changing the substantive operations of these price improvement
auctions, distinguishing opposite and same side checks, and adding the
NBBO check reference within the same side check do not impose an intra-
market undue burden on competition because harmonizing the language
will enable Members to compare GEMX's PIM entry checks with similar
mechanisms on Nasdaq affiliated markets. Further, the NBBO check is
always relevant in the same side check to avoid a trade-through. The
Exchange's proposal to amend Options 3, Section 13(b)(1) through (3) to
harmonize the language within the PIM entry checks within ISE's PIM,
MRX's PIM, Phlx's PIXL and BX's PRISM, without changing the substantive
operations of these price improvement auctions, distinguishing opposite
and same side checks, and adding the NBBO check reference within the
same side check do not impose an inter-market undue burden on
competition because other options markets have their own price
improvement auctions and are free to denote their entry checks in a
similar fashion and have both same and opposite side entry checks which
may differ from GEMX's rule.
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 \16\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\17\
---------------------------------------------------------------------------
\16\ 15 U.S.C. 78s(b)(3)(A)(iii).
\17\ 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.
---------------------------------------------------------------------------
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#344641585119575b5959515a4047744751571a535b42"><span class="__cf_email__" data-cfemail="f587809990d8969a9898909b8186b5869096db929a83">[email protected]</span></a>. Please include
file number SR-GEMX-2023-11 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-GEMX-2023-11. 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 a.m. and 3 p.m.
Copies of the filing also will be available for inspection and copying
at the principal office of the Exchange. Do not include personal
identifiable information in submissions; you should submit only
information that you wish to make available publicly. We may redact in
part or withhold entirely from publication submitted material that is
obscene or subject to copyright protection. All submissions should
refer to file number SR-GEMX-2023-11 and should be submitted on or
before October 17, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
---------------------------------------------------------------------------
\18\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-20803 Filed 9-25-23; 8:45 am]
BILLING CODE 8011-01-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on September 26, 2023.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.