Notice2023-26486
Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Options 4, Section 5 Related to a Low Priced Stock Strike Price Interval Program
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
December 1, 2023
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 88 Issue 230 (Friday, December 1, 2023)</title>
</head>
<body><pre>
[Federal Register Volume 88, Number 230 (Friday, December 1, 2023)]
[Notices]
[Pages 84010-84014]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-26486]
[[Page 84010]]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99029; File No. SR-ISE-2023-30]
Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Options 4,
Section 5 Related to a Low Priced Stock Strike Price Interval Program
November 28, 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 November 20, 2023, 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.
---------------------------------------------------------------------------
\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 4, Section 5, Series of
Options Contracts Open for Trading.
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
The Exchange proposes to amend Options 4, Section 5, Series of
Options Contracts Open for Trading. Miami International Securities
Exchange, LLC (``MIAX'') recently received approval to amend its Rule
404 to implement a new strike interval program for stocks that are
priced less than $2.50 and have an average daily trading volume of at
least 1,000,000 shares per day for the 3 preceding calendar months.\3\
At this time, the Exchange proposes to adopt rules substantively
identical to MIAX at new Supplementary Material .08 to Options 4,
Section 5 and also amend Supplementary Material .07 to Options 4,
Section 5 to harmonize the table to the proposed rule text.
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 98917 (November 13,
2023), 88 FR 80361 (November 17, 2023) (SR-MIAX-2023-36) (Order
Approving a Proposed Rule Change To Amend Exchange Rule 404, Series
of Option Contracts Open for Trading).
---------------------------------------------------------------------------
Background
Currently, Options 4, Section 5, Series of Options Contracts Open
for Trading, describes the process and procedures for listing and
trading series of options \4\ on the Exchange. Supplementary Material
.02 to Options 4, Section 5 provides for a $2.50 Strike Price Program,
where the Exchange may select up to 60 option classes \5\ on individual
stocks for which the interval of strike prices will be $2.50 where the
strike price is greater than $25.00 but less than $50.00.\6\
Supplementary Material .01 to Options 4, Section 5 also provides for a
$1 Strike Price Interval Program, where the interval between strike
prices of series of options \7\ on individual stocks may be $1.00 or
greater provided the strike price is $50.00 or less, but not less than
$1.00.\8\ Additionally, Supplementary Katerial .05 to Options 4,
Section 5 provides for a $0.50 Strike Program.\9\ The interval of
strike prices of series of options on individual stocks may be $0.50 or
greater beginning at $0.50 where the strike price is $5.50 or less, but
only for options classes whose underlying security closed at or below
$5.00 in its primary market on the previous trading day and which have
national average daily volume that equals or exceeds 1,000 contracts
per day as determined by The Options Clearing Corporation during the
preceding three calendar months. The listing of $0.50 strike prices is
limited to options classes overlying no more than 20 individual stocks
(the ``$0.50 Strike Program'') as specifically designated by the
Exchange. The Exchange may list $0.50 strike prices on any other option
classes if those classes are specifically designated by other
securities exchanges that employ a similar $0.50 Strike Program under
their respective rules. A stock shall remain in the $0.50 Strike
Program until otherwise designated by the Exchange.\10\
---------------------------------------------------------------------------
\4\ The term ``options contract'' means a put or a call issued,
or subject to issuance by the Clearing Corporation pursuant to the
Rules of the Clearing Corporation. See Options 1, Section 1(a)(31).
\5\ The terms ``class of options'' means all options contracts
covering the same underlying security. See Options 1, Section
1(a)(8).
\6\ See Supplementary Material .02 to Options 4, Section 5.
\7\ The term ``series of options'' means all options contracts
of the same class having the same exercise price and expiration
date. See Options 1, Section 1(a)(47).
\8\ See Supplementary Material .01(a) to Options 4, Section 5.
\9\ See Supplementary Material .05 to Options 4, Section 5.
\10\ Id.
---------------------------------------------------------------------------
Proposal
At this time, the Exchange proposes to adopt a new strike interval
program for stocks that are not in the aforementioned $0.50 Strike
Program (or the Short Term Option Series Program) \11\ and that close
below $2.50 and have an average daily trading volume of at least
1,000,000 shares per day for the three (3) preceding calendar months.
The $0.50 Strike Program considers stocks that have a closing price at
or below $5.00 whereas the Exchange's proposal will consider stocks
that have a closing price below $2.50. Currently, there is a subset of
stocks that are not included in the $0.50 Strike Program as a result of
the limitations of that program which provides that the listing of
$0.50 strike prices shall be limited to option classes overlying no
more than 20 individual stocks as specifically designated by the
Exchange and requires a national average daily volume that equals or
exceeds 1,000 contracts per day as determined by The Options Clearing
Corporation during the preceding three calendar months.\12\ Therefore,
the Exchange is proposing to implement a new strike interval program
termed the ``Low Priced Stock Strike Price Interval Program.''
---------------------------------------------------------------------------
\11\ See Supplementary Material .03 to Options 4, Section 5.
\12\ See Supplementary Material .05 to Options 4, Section 5.
---------------------------------------------------------------------------
To be eligible for the inclusion in the Low Priced Stock Strike
Price Interval Program, an underlying stock must (i) close below $2.50
in its primary market on the previous trading day; and (ii) have an
average daily trading volume of at least 1,000,000 shares per day for
the three (3) preceding calendar months. The Exchange notes that there
is no limit to the number of classes that will be eligible for
inclusion in the proposed program, provided, of course, that the
underlying stocks satisfy both the price
[[Page 84011]]
and average daily trading volume requirements of the proposed program.
The Exchange also proposes that after a stock is added to the Low
Priced Stock Strike Price Interval Program, the Exchange may list $0.50
strike price intervals from $0.50 up to $2.00.\13\ For the purpose of
adding strikes under the Low Priced Stock Strike Price Interval
Program, the ``price of the underlying stock'' shall be measured in the
same way as ``the price of the underlying security'' as set forth in
Options 4, Section 6(b)(i).\14\ Further, no additional series in $0.50
intervals may be listed if the underlying stock closes at or above
$2.50 in its primary market. Additional series in $0.50 intervals may
not be added until the underlying stock again closes below $2.50.
---------------------------------------------------------------------------
\13\ While the Exchange may list new strikes on underlying
stocks that meet the eligibility requirements of the new program the
Exchange will exercise its discretion and will not list strikes on
underlying stocks the Exchange believes are subject to imminent
delisting from their primary exchange.
\14\ The Exchange notes this is the same methodology used in the
$1 Strike Price Interval Program. See Supplementary Material
.01(b)(3) of Options 4, Section 5.
---------------------------------------------------------------------------
The Exchange's proposal addresses a gap in strike coverage for low
priced stocks. The $0.50 Strike Program considers stocks that close
below $5.00 and limits the number of option classes listed to no more
than 20 individual stocks (provided that the open interest criteria is
also satisfied). Whereas, the Exchange's proposal has a narrower focus,
with respect to the underlying's stock price, and is targeted on those
stocks that close below $2.50 and does not limit the number of stocks
that may participate in the program (provided that the average daily
trading volume is also satisfied). The Exchange does not believe that
any market disruptions will be encountered with the addition of these
new strikes. The Exchange represents that it has the necessary capacity
and surveillance programs in place to support and properly monitor
trading in the proposed Low Priced Stock Strike Price Interval Program.
The Exchange believes that its average daily trading volume
requirement of 1,000,000 shares is a reasonable threshold to ensure
adequate liquidity in eligible underlying stocks as it is substantially
greater than the thresholds used for listing options on equities,
American Depository Receipts, and broad-based indexes. Specifically,
underlying securities with respect to which put or call option
contracts are approved for listing and trading on the Exchange must
meet certain criteria as determined by the Exchange. One of those
requirements is that trading volume (in all markets in which the
underlying security is traded) has been at least 2,400,000 shares in
the preceding twelve (12) months.\15\ Options 4, Section 3(f) provides
the criteria for listing options on American Depositary Receipts
(``ADRs'') if they meet certain criteria and guidelines set forth in
Options 4, Section 3 One of the requirements is that the average daily
trading volume for the security in the U.S. markets over the three (3)
months preceding the selection of the ADR for options trading is
100,000 or more shares.\16\ Finally, the Exchange may trade options on
a broad-based index pursuant to Rule 19b-4(e) of the Act provided a
number of conditions are satisfied. One of those conditions is that
each component security that accounts for at least one percent (1%) of
the weight of the index has an average daily trading volume of at least
90,000 shares during the last six month period.\17\
---------------------------------------------------------------------------
\15\ See Options 4, Section 3(b)(4).
\16\ See Options 4, Section 3(f)(3)(ii).
\17\ See Options 4A, Section 3(d)(7).
---------------------------------------------------------------------------
Additionally, the Exchange proposes to amend the table in
Supplementary Material .07 of Options 4, Section 5 to insert a new
column to harmonize the Exchange's proposal to the strike intervals for
Short Term Options Series as described in Supplementary Material .03 to
Options 4, Section 5. The table in Supplementary Material .03 is
intended to limit the intervals between strikes for multiply listed
equity options within the Short Term Options Series program that have
an expiration date more than twenty-one days from the listing date.
Specifically, the table defines the applicable strike intervals for
options on underlying stocks given the closing price on the primary
market on the last day of the calendar quarter, and a corresponding
average daily volume of the total number of options contracts traded in
a given security for the applicable calendar quarter divided by the
number of trading days in the applicable calendar quarter.\18\ However,
the lowest share price column is titled ``less than $25.'' The Exchange
now proposes to insert a column titled ``Less than $2.50'' and to set
the strike interval at $0.50 for each average daily volume tier
represented in the table. Also, the Exchange proposes to amend the
heading of the column currently titled ``less than $25,'' to ``$2.50 to
less than $25'' as a result of the adoption of the new proposed column,
``Less than $2.50.'' The Exchange believes this change will remove any
potential conflict between the strike intervals under the Short Term
Options Series Program and those described herein under the Exchange's
proposal.
---------------------------------------------------------------------------
\18\ See Securities Exchange Release Act No. 91125 (February 21,
2021), 86 FR 10375 (February 19, 2021) (SR-BX-2020-032) (Order
Granting Accelerated Approval of a Proposed Rule Change, as Modified
by Amendment No. 1, To Amend Options 4, Section 5, To Limit Short
Term Options Series Intervals Between Strikes That Are Available for
Quoting and Trading on BX) (``BX-2020-032'').
---------------------------------------------------------------------------
Impact of Proposal
The Exchange recognizes that its proposal will introduce new
strikes in the marketplace and further acknowledges that there has been
significant effort undertaken by the industry to curb strike
proliferation. This initiative has been spearheaded by Nasdaq BX, Inc.
(``BX'') when it filed an initial proposal focused on the removal, and
prevention of the listing, of strikes which are extraneous and do not
add value to the marketplace (the ``Strike Interval Proposal'').\19\
The Strike Interval Proposal was intended to remove repetitive and
unnecessary strike listings across the weekly expiries. Specifically,
the Strike Interval Proposal aimed to reduce the density of strike
intervals that would be listed in the later weeks, by creating
limitations for intervals between strikes which have an expiration date
more than twenty-one days from the listing date.\20\ The Strike
Interval Proposal took into account OCC customer-cleared volume, using
it as an appropriate proxy for demand. The Strike Interval Proposal was
designed to maintain strikes where there was customer demand and
eliminate strikes where there was not demand. At the time of its
proposal, BX estimated that the Strike Interval Proposal would reduce
the number of listed strikes in the options market by approximately
81,000 strikes.\21\ The Exchange proposes to amend the table to define
the strike interval at $0.50 for underlying stocks with a share price
of less than $2.50. The Exchange believes this amendment will harmonize
the Exchange's proposal with the Strike Interval Proposal described
above.
---------------------------------------------------------------------------
\19\ See BX-2020-032. See also <a href="https://www.nasdaq.com/solutions/bx-options-strike-proliferation-proposal">https://www.nasdaq.com/solutions/bx-options-strike-proliferation-proposal</a>.
\20\ See BX-2020-032.
\21\ See BX-2020-032.
---------------------------------------------------------------------------
The Exchange recognizes that its proposal will moderately increase
the total number of option series available on the Exchange. However,
the Exchange's proposal is designed to only add strikes where there is
investor demand \22\ which will improve market
[[Page 84012]]
quality. Under the requirements for the Low Priced Stock Strike Price
Interval Program as described herein, MIAX determined that as of August
9, 2023, 106 symbols met the proposed criteria. Of those symbols, MIAX
noted that 36 are currently in the $1 Strike Price Interval Program
with $1.00 and $2.00 strikes listed. Under the Exchange's proposal, the
$0.50 and $1.50 strikes for these symbols would be added for the
current expiration terms. Similar to MIAX, the remaining 70 symbols
eligible under the proposal would have $0.50, $1.00, $1.50 and $2.00
strikes added to their current expiration terms. Therefore, MIAX noted
that for the 106 symbols eligible for the Low Priced Stock Strike Price
Interval Program, a total of approximately 3,250 options would be
added. As of August 9, 2023, MIAX noted it listed 1,106,550 options,
and therefore, the additional options that would be listed under this
proposal would represent a relatively minor increase of 0.294% in the
number of options listed.
---------------------------------------------------------------------------
\22\ See proposed Supplementary Material .08(a) of Options 4,
Section 5 that requires that an underlying stock must (i) close
below $2.50 in its primary market on the previous trading day; and
(ii) have an average daily trading volume of at least 1,000,000
shares per day for the three (3) preceding calendar months.
---------------------------------------------------------------------------
The Exchange does not believe that its proposal contravenes the
industry's efforts to curtail unnecessary strikes. The Exchange's
proposal is targeted to only underlying stocks that close at less than
$2.50 and that also meet the average daily trading volume requirement.
Additionally, because the strike increment is $0.50 there are only a
total of four strikes that may be listed under the program ($0.50,
$1.00, $1.50, and $2.00) for an eligible underlying stock. Finally, if
an eligible underlying stock is in another program (e.g., the $0.50
Strike Program or the $1 Strike Price Interval Program) the number of
strikes that may be added is further reduced if there are pre-existing
strikes as part of another strike listing program. Therefore, the
Exchange does not believe that it will list any unnecessary or
repetitive strikes as part of its program, and that the strikes that
will be listed will improve market quality and satisfy investor demand.
The Exchange further believes that the Options Price Reporting
Authority (``OPRA''), has the necessary systems capacity to handle any
additional messaging traffic associated with this proposed rule change.
The Exchange also believes that Members will not have a capacity issue
as a result of the proposed rule change. Finally, the Exchange believes
that the additional options will serve to increase liquidity, provide
additional trading and hedging opportunities for all market
participants, and improve market quality.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\23\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\24\ in particular, in that it is designed to
prevent fraudulent and manipulative acts and practices, to promote just
and equitable principles of trade, to foster cooperation and
coordination with persons engaged in regulating, clearing, settling,
processing information with respect to, and facilitating transactions
in securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest. Additionally, the Exchange
believes the proposed rule change is consistent with the Section
(6)(b)(5) \25\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------
\23\ 15 U.S.C. 78f(b).
\24\ 15 U.S.C. 78f(b)(5).
\25\ 15 U.S.C. 78(f)(b)(5).
---------------------------------------------------------------------------
The Exchange believes its proposal promotes just and equitable
principles of trade and removes impediments to and perfects the
mechanisms of a free and open market and a national market system as
the Exchange has identified a subset of stocks that are trading under
$2.50 and do not have meaningful strikes available. For example, on
August 9, 2023, symbol SOND closed at $0.50 and had open interest of
over 44,000 contracts and an average daily trading volume in the
underlying stock of over 1,900,000 shares for the three preceding
calendar months.\26\ Currently the lowest strike listed is for $2.50,
making the lowest strike 400% away from the closing stock price.
Another symbol, CTXR, closed at $0.92 on August 9, 2023, and had open
interest of 63,000 contracts and an average daily trading volume in the
underlying stock of over 1,900,000 shares for the three preceding
calendar months.\27\ Similarly, the lowest strike listed is for $2.50,
making the lowest strike more than 170% away from the closing stock
price. Currently, such products have no at-the-money options, as well
as no in-the-money calls or out-of-the-money puts. The Exchange's
proposal will provide additional strikes in $0.50 increments from $0.50
up to $2.00 to provide more meaningful trading and hedging
opportunities for this subset of stocks. Given the increased
granularity of strikes as proposed under the Exchange's proposal out-
of-the-money puts and in-the-money calls will be created. The Exchange
believes this will allow market participants to tailor their investment
and hedging needs more effectively.
---------------------------------------------------------------------------
\26\ See Yahoo! Finance, <a href="https://finance.yahoo.com/quote/SOND/history?p=SOND">https://finance.yahoo.com/quote/SOND/history?p=SOND</a> (last visited August 10, 2023).
\27\ See Yahoo! Finance, <a href="https://finance.yahoo.com/quote/CTXR/history?p=CTXR">https://finance.yahoo.com/quote/CTXR/history?p=CTXR</a> (last visited August 10, 2023).
---------------------------------------------------------------------------
The Exchange believes its proposal promotes just and equitable
principles of trade and removes impediments to and perfects the
mechanisms of a free and open market and a national market system and,
in general, protects investors and the public interest by adding
strikes that improves market quality and satisfies investor demand. The
Exchange does not believe that the number of strikes that will be added
under the program will negatively impact the market. Additionally, the
proposal does not run counter to the efforts undertaken by the industry
to curb strike proliferation as that effort focused on the removal and
prevention of extraneous strikes where there was no investor demand.
The Exchange's proposal requires the satisfaction of an average daily
trading volume threshold in addition to the underlying stock closing at
a price below $2.50 to be eligible for the program. The Exchange
believes that the average daily trading volume threshold of the program
ensures that only strikes with investor demand will be listed and fills
a gap in strike interval coverage as described above. Further, being
that the strike interval is $0.50, there are only a maximum of four
strikes that may be added ($0.50, $1.00, $1.50, and $2.00). Therefore,
the Exchange does not believe that its proposal will undermine the
industry's efforts to eliminate repetitive and unnecessary strikes in
any fashion.
The Exchange believes that its average daily trading volume
threshold promotes just and equitable principles of trade and removes
impediments to and perfects the mechanisms of a free and open market
and a national market system and, in general, protects investors and
the public interest as it is designed to permit only those stocks with
demonstrably high levels of trading activity to participate in the
program. The Exchange notes that its average daily trading volume
requirement is substantially greater than the average daily trading
requirement currently in place on the Exchange for options on
[[Page 84013]]
equity underlyings,\28\ ADRs,\29\ and broad-based indexes.\30\
---------------------------------------------------------------------------
\28\ See supra note 15.
\29\ See supra note 16.
\30\ See supra note 17.
---------------------------------------------------------------------------
The Exchange believes that the proposed rule change is consistent
with Section 6(b)(1) of the Act, which provides that the Exchange be
organized and have the capacity to be able to carry out the purposes of
the Act and the rules and regulations thereunder, and the rules of the
Exchange. The proposed rule change allows the Exchange to respond to
customer demand to provide meaningful strikes for low priced stocks.
The Exchange does not believe that the proposed rule would create any
capacity issue or negatively affect market functionality. Additionally,
the Exchange represents that it has the necessary systems capacity to
support the new options series and handle additional messaging traffic
associated with this proposed rule change. The Exchange also believes
that its Members will not experience any capacity issues as a result of
this proposal. In addition, the Exchange represents that it believes
that additional strikes for low priced stocks will serve to increase
liquidity available as well as improve price efficiency by providing
more trading opportunities for all market participants. The Exchange
believes that the proposed rule change will benefit investors by giving
them increased opportunities to execute their investment and hedging
decisions.
Finally, the Exchange believes its proposal is designed to prevent
fraudulent and manipulative acts and practices as options may only be
listed on underlyings that satisfy the listing requirements of the
Exchange as described in Options 4, Section 3, Criteria for Underlying
Securities. Specifically, Options 4, Section 3 requires that underlying
securities for which put or call option contracts are approved for
listing and trading on the Exchange must meet the following criteria:
(1) the security must be registered and be an ``NMS stock'' as defined
in Rule 600 of Regulation NMS under the Exchange Act; (2) the security
shall be characterized by a substantial number of outstanding shares
that are widely held and actively traded.\31\ Additionally, Options 4,
Section 3 provides that absent exceptional circumstances, an underlying
security will not be selected for options transactions unless: (1)
there are a minimum of seven (7) million shares of the underlying
security which are owned by persons other than those required to report
their stock holdings under Section 16(a) of the Exchange Act; (2) there
are a minimum of 2,000 holders of the underlying security; (3) the
issuer is in compliance with any applicable requirements of the
Exchange Act; and (4) trading volume (in all markets in which the
underlying security is traded) has been at least 2,400,000 shares in
the preceding twelve (12) months.\32\ The Exchange's proposal does not
impact the eligibility of an underlying stock to have options listed on
it, but rather addresses only the listing of new additional option
classes on an underlying listed on the Exchange in accordance to the
Exchange's listings rules. As such, the Exchange believes that the
listing requirements described in Options 4, Section 3 address
potential concerns regarding possible manipulation. Additionally, in
conjunction with the proposed average daily volume requirement
described herein, the Exchange believes any possible market
manipulation is further mitigated.
---------------------------------------------------------------------------
\31\ See Options 4, Section 3(a)(1) and (2).
\32\ See Options 4, Section 3(b)(1), (2), (3) and (4).
---------------------------------------------------------------------------
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 that is not necessary or appropriate
in furtherance of the purposes of the Act.
The Exchange does not believe that its proposed rule change will
impose any burden on intra-market competition as the Rules of the
Exchange apply equally to all Members of the Exchange and all Members
may trade the new proposed strikes if they so choose. Specifically, the
Exchange believes that investors and market participants will
significantly benefit from the availability of finer strike price
intervals for stocks priced below $2.50, which will allow them to
tailor their investment and hedging needs more effectively. The
Exchange's proposal is substantively identical to MIAX Interpretations
and Policies .11 and .12 to Rule 404.
The Exchange does not believe that its proposed rule change will
impose any burden on inter-market competition, as nothing prevents
other options exchanges from proposing similar rules to list and trade
options on low priced stocks. Rather the Exchange believes that its
proposal will promote inter-market competition, as the Exchange's
proposal will result in additional opportunities for investors to
achieve their investment and trading objectives, to the benefit of
investors, market participants, and the marketplace in general.
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
Pursuant to Section 19(b)(3)(A) of the Act \33\ and Rule 19b-
4(f)(6) \34\ thereunder, the Exchange has designated this proposal as
one that effects a change that: (i) does not significantly affect the
protection of investors or the public interest; (ii) does not impose
any significant burden on competition; and (iii) by its terms, does not
become operative for 30 days after the date of the filing, or such
shorter time as the Commission may designate if consistent with the
protection of investors and the public interest.\35\
---------------------------------------------------------------------------
\33\ 15 U.S.C. 78s(b)(3)(A).
\34\ 17 CFR 240.19b-4(f)(6).
\35\ 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.
---------------------------------------------------------------------------
A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act normally does not become operative for 30 days after the date of
its filing. However, Rule 19b-4(f)(6)(iii) \36\ permits the Commission
to designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange requested
that the Commission waive the 30-day operative delay so that the
proposal may become operative immediately upon filing. The Commission
notes it has approved a proposed rule change substantially identical to
the one proposed by the Exchange.\37\ The proposed change raises no
novel legal or regulatory issues. Therefore, the Commission believes
that waiver of the 30-day operative delay is consistent with the
protection of investors and the public interest. Accordingly, the
Commission hereby waives the 30-day operative delay and designates the
proposed rule change operative upon filing.\38\
---------------------------------------------------------------------------
\36\ 17 CFR 240.19b-4(f)(6)(iii).
\37\ See supra note 3.
\38\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------
At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if
[[Page 84014]]
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="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#d1a3a4bdb4fcb2bebcbcb4bfa5a291a2b4b2ffb6bea7"><span class="__cf_email__" data-cfemail="f587809990d8969a9898909b8186b5869096db929a83">[email protected]</span></a>. Please include
file number SR-ISE-2023-30 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-2023-30. 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="https://www.sec.gov/rules/sro.shtml">https://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-ISE-2023-30 and should be
submitted on or before December 22, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\39\
---------------------------------------------------------------------------
\39\ 17 CFR 200.30-3(a)(12), (59).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-26486 Filed 11-30-23; 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 December 1, 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.