Notice2024-28259
Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend FLEX Options Listing
Primary source
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Published
December 3, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 232 (Tuesday, December 3, 2024)</title>
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[Federal Register Volume 89, Number 232 (Tuesday, December 3, 2024)]
[Notices]
[Pages 95851-95852]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-28259]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-101765; File No. SR-ISE-2024-55]
Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend FLEX
Options Listing
November 26, 2024.
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 25, 2024, 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 Substance
of the Proposed Rule Change
The Exchange [sic] to amend Options 3A, Section 3, FLEX Options
Listings.
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 3A, Section 3, FLEX Options
Listings, to reflect the addition of the listing of options on: (1) the
Fidelity Wise Origin Bitcoin Fund; (2) the ARK21Shares Bitcoin ETF; (3)
the Grayscale Bitcoin Trust (BTC); (4) the Grayscale Bitcoin Mini Trust
BTC; (5) and the Bitwise Bitcoin ETF (collectively ``Bitcoin Trusts'').
Specifically, ISE proposes to except FLEX Options on the Bitcoin Trusts
from trading as a [sic] FLEX Options contracts. ISE separately filed a
rule proposal to list and trade the options on the Bitcoin Trusts.\3\
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\3\ See SR-ISE-2024-054 (not yet noticed).
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ISE recently received approval to list and trade Flexible Exchange
Options (``FLEX Options'') on the Exchange's electronic market.\4\ At
this time, the Exchange proposes to amend Options 3A, Section 3, FLEX
Options Listings, to specify that ISE will not authorize for trading a
FLEX Option on each of the Bitcoin Trusts. For clarity, this exclusion
will apply to both physically-settled and cash-settled FLEX ETF
options, such that options on the Bitcoin Trusts will be excluded from
being eligible to trade as a physically-settled or a cash-settled FLEX
ETF option. Options 3A, Section 3 currently provides that the Exchange
will not authorize FLEX Options on shares of the iShares Bitcoin Trust
ETF.\5\ The Exchange proposes this amendment in light of the position
and exercise limits of 25,000 contracts that were set for the Fidelity
Wise Origin Bitcoin Fund, the ARK21Shares Bitcoin ETF, the Grayscale
Bitcoin Trust (BTC), the Grayscale Bitcoin Mini Trust BTC, and the
Bitwise Bitcoin ETF in the Cboe Approval Order \6\ and the NYSE
American Approval Order,\7\ respectively. If the Exchange determines to
allow FLEX Options on the Bitcoin Trusts at a later date, it will do so
by submitting a 19b-4 rule change with the Commission.
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\4\ See Securities Exchange Act Release No. 101720 (November 22,
2024), (SR-ISE-2024-12) (not yet noticed). This rule change is
approved, but not yet implemented.
\5\ Id.
\6\ See Securities Exchange Act Release No. 101387 (October 18,
2024), 89 FR 84948 (October 24, 2024) (SR-Cboe-2024-035) (Notice of
Filing of Amendment Nos. 2 and 3 and Order Granting Accelerated
Approval of a Proposed Rule Change, as Modified by Amendment Nos. 2
and 3, To Permit the Listing and Trading of Options on Bitcoin
Exchange-Traded Funds) (``Cboe Approval Order'').
\7\ See Securities Exchange Act Release No. 101386 (October 18,
2024), 89 FR 84960 (October 24, 2024) (SR-NYSEAMER-2024-49) (Notice
of Filing of Amendment No. 3 and Order Granting Accelerated Approval
of a Proposed Rule Change, as Modified by Amendment No. 3, To Permit
the Listing and Trading of Options on Bitcoin Exchange-Traded Funds)
(``NYSE American Approval Order'').
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\8\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\9\ in particular, in that it is designed to promote
just and equitable principles of trade, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general to protect investors and the public interest.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
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The Exchange's proposal to amend Options 3A, Section 3, FLEX
Options Listings, to note that it will not authorize for trading a FLEX
Option on each of the Bitcoin Trusts is consistent with the spirit of
the Cboe Approval Order \10\ and the NYSE American Approval Order,\11\
respectively, that limited the position and exercise limits for each of
the Bitcoin Trusts to 25,000 contracts. The proposal will protect
investors and the general public because without this prohibition,
trading a FLEX Option on the Bitcoin Trusts would otherwise establish
different position and exercise limits than those set by the
aforementioned approval orders. For clarity, this exclusion will apply
to both physically-settled and cash-settled FLEX ETF options, such that
options on the Bitcoin Trusts will be excluded from
[[Page 95852]]
being eligible to trade as a physically-settled or a cash-settled FLEX
ETF option.
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\10\ See supra note 5.
\11\ See supra note 6.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The proposed rule change does not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act.
The Exchange's proposal to amend Options 3A, Section 3 to specify
that it will not authorize for trading a FLEX Option on any of the
Bitcoin Trusts does not impose an intra-market burden on competition as
no ISE Member will be able to transact a FLEX Option on any of Bitcoin
Trusts.
The proposal does not impose inter-market burden on competition
because other exchanges have not authorized FLEX Options on the Bitcoin
Trusts.\12\
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\12\ See e.g. Cboe Rule 4.20 and NYSE American Rule 903G(a)(1).
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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) of the Act \13\ and Rule 19b-
4(f)(6) thereunder.\14\
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 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 Commission waives this requirement.
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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) \15\ permits the Commission
to designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing. The Exchange states that
the not authorizing FLEX options on the Bitcoin Trusts will maintain
the 25,000-contract position and exercise limits established for
options on the Bitcoin Trusts in the Cboe Approval Order and the NYSE
American Approval Order because FLEX options would be subject to
different position and exercise limits.\16\ The Exchange states that
the exclusion will apply to both physically-settled and cash-settled
FLEX ETF options, such that options on the Bitcoin Trusts will be
excluded from being eligible to trade as a physically-settled or a
cash-settled FLEX ETF option. As discussed above, the rules of other
option exchanges currently prohibit the listing of FLEX options on the
Bitcoin Trusts.\17\ The proposal will align the Exchange's rules with
the rules of these exchanges and will ensure that all options listed on
the Bitcoin Trusts are subject to position and exercise limits of
25,000 contracts. The proposal does not raise new or novel 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.\18\
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\15\ 17 CFR 240.19b-4(f)(6)(iii).
\16\ See supra notes 6 and 7.
\17\ See supra note 12.
\18\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of such 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.
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#3745425b521a54585a5a525943447744525419505841"><span class="__cf_email__" data-cfemail="1163647d743c727e7c7c747f6562516274723f767e67">[email protected]</span></a>. Please include
file number SR-ISE-2024-55 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-2024-55. 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-2024-55 and should be
submitted on or before December 24, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-28259 Filed 12-2-24; 8:45 am]
BILLING CODE 8011-01-P
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