83 FR 39484 - Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend BX Options Rules at Chapter I, Section 1 To Define Certain Terms

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 154 (August 9, 2018)

Page Range		39484-39485
FR Document		2018-17005
Federal Register, Volume 83 Issue 154 (Thursday, August 9, 2018)
[Federal Register Volume 83, Number 154 (Thursday, August 9, 2018)]
[Notices]
[Pages 39484-39485]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-17005]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83770; File No. SR-BX-2018-035]


Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend BX Options 
Rules at Chapter I, Section 1 To Define Certain Terms

August 3, 2018.
    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 July 23, 2018, Nasdaq BX, Inc. (``BX'' or ``Exchange'') filed with 
the Securities and Exchange Commission (``SEC'' or ``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the Exchange. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend BX Options Rules at Chapter I, 
Section 1 to define certain terms.
    The text of the proposed rule change is available on the Exchange's 
website at http://nasdaqbx.cchwallstreet.com/, 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
    BX rules currently do not define an ``in-the-money'' or ``out-of-
the-money'' option. The Exchange proposes to define these terms at 
Chapter I, Section 1 to bring greater transparency to BX rules. In 
addition, the Exchange notes that the terms, ``in-the-money'' and 
``out-of-the-money'' are generally accepted terms in the options 
industry. These terms are utilized throughout the options industry. The 
Exchange desires for its Participants to have a clear understanding of 
how BXs System defines these terms.
    The Exchange proposes to define an ``in-of-the-money'' option at 
Chapter I, Section 1(a)(68). The Exchange proposes that the term ``in-
the-money'' shall mean the following: For call options, all strike 
prices below the offer in the underlying security on the primary 
listing market; for put options, all strike prices above the bid in the 
underlying security on the primary listing market. The Exchange 
proposes to define an ``out-of-the-money'' option at Chapter I, Section 
1(a)(69). The Exchange proposes that the term ``out-of-the-money'' 
shall mean the following: For call options, all strike prices above the 
offer in the underlying security on the primary listing market; for put 
options, all strike prices below the bid in the underlying security on 
the primary listing market.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\3\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\4\ 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. 
The Exchange's proposal to define the terms ``in-the-money'' and ``out-
of-the-money'' options is consistent with the Act and protects 
investors and the public interest by bringing greater transparency to 
the Rulebook. In addition, the Exchange notes that the terms, ``in-the-
money'' and ``out-of-the-money'' are generally accepted terms in the 
options industry. These terms are utilized throughout the options 
industry. The Exchange desires for its Participants to have a clear 
understanding of how BX's System defines these terms.
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    \3\ 15 U.S.C. 78f(b).
    \4\ 15 U.S.C. 78f(b)(5).
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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

[[Page 39485]]

Exchange's proposal to define the terms ``in-the-money'' and ``out-of-
the-money'' options does not unduly burden competition, rather it adds 
greater transparency to the Rulebook.

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 \5\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\6\
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    \5\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \6\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \7\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\8\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange requests 
that the Commission waive the 30-day operative delay so that the 
proposal may become operative immediately upon filing. The Exchange 
represents that immediately defining the terms ``in-the-money'' and 
``out-of-the-money'' options within its Rulebook would provide greater 
transparency to its Participants. For the same reason, the Commission 
believes that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest. Accordingly, the 
Commission waives the 30-day operative delay and designates the 
proposed rule change operative upon filing.\9\
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    \7\ 17 CFR 240.19b-4(f)(6).
    \8\ 17 CFR 240.19b-4(f)(6)(iii).
    \9\ For purposes only of waiving the 30-day operative delay, the 
Commission has considered the proposed rule's impact on efficiency, 
competition, and capital formation. See 15 U.S.C. 78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) otherwise in furtherance of the 
purposes of the Act. If the Commission takes such action, the 
Commission shall institute proceedings to determine whether the 
proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-BX-2018-035 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-BX-2018-035. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (http://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-BX-2018-035 and should be submitted on 
or before August 30, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-17005 Filed 8-8-18; 8:45 am]
 BILLING CODE 8011-01-P
39484 Federal Register / Vol. 83, No. 154 / Thursday, August 9, 2018 / Notices

‘‘Commission’’) has submitted to the SECURITIES AND EXCHANGE define these terms at Chapter I, Section
Office of Management and Budget a COMMISSION 1 to bring greater transparency to BX
request for extension of the previously rules. In addition, the Exchange notes
[Release No. 34–83770; File No. SR–BX–
approved collection of information 2018–035]
that the terms, ‘‘in-the-money’’ and
discussed below. ‘‘out-of-the-money’’ are generally
Form ADV–E (17 CFR 279.8) is the Self-Regulatory Organizations; Nasdaq accepted terms in the options industry.
cover sheet for certificates of accounting BX, Inc.; Notice of Filing and These terms are utilized throughout the
filed pursuant to rule 206(4)–2 under Immediate Effectiveness of Proposed options industry. The Exchange desires
the Investment Advisers Act of 1940 (17 Rule Change To Amend BX Options for its Participants to have a clear
CFR 275.206(4)–2). The rule further Rules at Chapter I, Section 1 To Define understanding of how BXs System
requires that the public accountant file Certain Terms defines these terms.
with the Commission a Form ADV–E The Exchange proposes to define an
August 3, 2018. ‘‘in-of-the-money’’ option at Chapter I,
and accompanying statement within
four business days of the resignation, Pursuant to Section 19(b)(1) of the Section 1(a)(68). The Exchange proposes
dismissal, removal or other termination Securities Exchange Act of 1934 that the term ‘‘in-the-money’’ shall
of its engagement. (‘‘Act’’),1 and Rule 19b–4 thereunder,2 mean the following: For call options, all
notice is hereby given that on July 23, strike prices below the offer in the
The Commission has estimated that 2018, Nasdaq BX, Inc. (‘‘BX’’ or underlying security on the primary
compliance with the requirement to ‘‘Exchange’’) filed with the Securities listing market; for put options, all strike
complete Form ADV–E imposes a total and Exchange Commission (‘‘SEC’’ or prices above the bid in the underlying
burden of approximately 0.05 hours (3 ‘‘Commission’’) the proposed rule security on the primary listing market.
minutes) per respondent. Based on change as described in Items I and II The Exchange proposes to define an
current information from advisers below, which Items have been prepared ‘‘out-of-the-money’’ option at Chapter I,
registered with the Commission, the by the Exchange. The Commission is Section 1(a)(69). The Exchange proposes
Commission staff estimates that 1,749 publishing this notice to solicit that the term ‘‘out-of-the-money’’ shall
filings will be submitted with respect to comments on the proposed rule change mean the following: For call options, all
surprise examinations and 38 filings from interested persons. strike prices above the offer in the
will be submitted with respect to
I. Self-Regulatory Organization’s underlying security on the primary
termination of accountants. Based on
Statement of the Terms of Substance of listing market; for put options, all strike
these estimates, the total estimated
the Proposed Rule Change prices below the bid in the underlying
annual burden would be 89.35 hours
security on the primary listing market.
((1,749 filings × .05 hours) + (38 filings The Exchange proposes to amend BX
× .05 hours)). Options Rules at Chapter I, Section 1 to 2. Statutory Basis
The information provided on Form define certain terms. The Exchange believes that its
ADV–E is mandatory. Responses will The text of the proposed rule change proposal is consistent with Section 6(b)
not be kept confidential. An agency may is available on the Exchange’s website at of the Act,3 in general, and furthers the
not conduct or sponsor a collection of http://nasdaqbx.cchwallstreet.com/, at objectives of Section 6(b)(5) of the Act,4
information unless it displays a the principal office of the Exchange, and in particular, in that it is designed to
currently valid OMB control number. at the Commission’s Public Reference promote just and equitable principles of
No person shall be subject to any Room. trade, to remove impediments to and
penalty for failing to comply with a II. Self-Regulatory Organization’s perfect the mechanism of a free and
collection of information subject to the Statement of the Purpose of, and open market and a national market
PRA that does not display a valid OMB Statutory Basis for, the Proposed Rule system, and, in general to protect
control number. Change investors and the public interest. The
The public may view the background Exchange’s proposal to define the terms
documentation for this information In its filing with the Commission, the
‘‘in-the-money’’ and ‘‘out-of-the-money’’
collection at the following website, Exchange included statements
options is consistent with the Act and
www.reginfo.gov. Comments should be concerning the purpose of and basis for
protects investors and the public
directed to: (i) Desk Officer for the the proposed rule change and discussed
interest by bringing greater transparency
Securities and Exchange Commission, any comments it received on the
to the Rulebook. In addition, the
Office of Information and Regulatory proposed rule change. The text of these
Exchange notes that the terms, ‘‘in-the-
Affairs, Office of Management and statements may be examined at the
money’’ and ‘‘out-of-the-money’’ are
Budget, Room 10102, New Executive places specified in Item IV below. The
generally accepted terms in the options
Office Building, Washington, DC 20503, Exchange has prepared summaries, set
industry. These terms are utilized
or by sending an email to: Shagufta_ forth in sections A, B, and C below, of
throughout the options industry. The
Ahmed@omb.eop.gov; and (ii) Pamela the most significant aspects of such
Exchange desires for its Participants to
Dyson, Director/Chief Information statements.
have a clear understanding of how BX’s
Officer, Securities and Exchange A. Self-Regulatory Organization’s System defines these terms.
Commission, c/o Candace Kenner, 100 F Statement of the Purpose of, and
B. Self-Regulatory Organization’s
Street NE, Washington, DC 20549 or Statutory Basis for, the Proposed Rule
Statement on Burden on Competition
send an email to: PRA_Mailbox@ Change
sradovich on DSK3GMQ082PROD with NOTICES

sec.gov. Comments must be submitted to The Exchange does not believe that
1. Purpose the proposed rule change will impose
OMB within 30 days of this notice.
BX rules currently do not define an any burden on competition not
Dated: August 3, 2018.
‘‘in-the-money’’ or ‘‘out-of-the-money’’ necessary or appropriate in furtherance
Eduardo A. Aleman,
option. The Exchange proposes to of the purposes of the Act. The
Assistant Secretary.
[FR Doc. 2018–16999 Filed 8–8–18; 8:45 am] 1 15 U.S.C. 78s(b)(1). 3 15 U.S.C. 78f(b).
BILLING CODE 8011–01–P 2 17 CFR 240.19b–4. 4 15 U.S.C. 78f(b)(5).

VerDate Sep<11>2014 18:11 Aug 08, 2018 Jkt 244001 PO 00000 Frm 00083 Fmt 4703 Sfmt 4703 E:\FR\FM\09AUN1.SGM 09AUN1
Federal Register / Vol. 83, No. 154 / Thursday, August 9, 2018 / Notices 39485

Exchange’s proposal to define the terms Commission summarily may submit only information that you wish
‘‘in-the-money’’ and ‘‘out-of-the-money’’ temporarily suspend such rule change if to make available publicly. All
options does not unduly burden it appears to the Commission that such submissions should refer to File
competition, rather it adds greater action is: (i) Necessary or appropriate in Number SR–BX–2018–035 and should
transparency to the Rulebook. the public interest; (ii) for the protection be submitted on or before August 30,
of investors; or (iii) otherwise in 2018.
C. Self-Regulatory Organization’s furtherance of the purposes of the Act.
Statement on Comments on the For the Commission, by the Division of
If the Commission takes such action, the Trading and Markets, pursuant to delegated
Proposed Rule Change Received From Commission shall institute proceedings authority.10
Members, Participants, or Others to determine whether the proposed rule Eduardo A. Aleman,
No written comments were either should be approved or disapproved. Assistant Secretary.
solicited or received.
IV. Solicitation of Comments [FR Doc. 2018–17005 Filed 8–8–18; 8:45 am]
III. Date of Effectiveness of the Interested persons are invited to BILLING CODE 8011–01–P
Proposed Rule Change and Timing for submit written data, views, and
Commission Action arguments concerning the foregoing,
SECURITIES AND EXCHANGE
Because the foregoing proposed rule including whether the proposed rule
COMMISSION
change does not: (i) Significantly affect change is consistent with the Act.
the protection of investors or the public Comments may be submitted by any of Submission for OMB Review;
interest; (ii) impose any significant the following methods: Comment Request
burden on competition; and (iii) become Electronic Comments
operative for 30 days from the date on Upon Written Request, Copies Available
which it was filed, or such shorter time • Use the Commission’s internet From: Securities and Exchange
as the Commission may designate, it has comment form (http://www.sec.gov/ Commission, Office of FOIA Services,
become effective pursuant to Section rules/sro.shtml); or 100 F Street NE, Washington, DC
19(b)(3)(A)(iii) of the Act 5 and • Send an email to rule-comments@ 20549–2736
subparagraph (f)(6) of Rule 19b–4 sec.gov. Please include File Number SR– Extension:
thereunder.6 BX–2018–035 on the subject line. Rule 206(4)–3, SEC File No. 270–218, OMB
A proposed rule change filed under Paper Comments Control No. 3235–0242
Rule 19b–4(f)(6) 7 normally does not • Send paper comments in triplicate Notice is hereby given that, pursuant
become operative prior to 30 days after to Secretary, Securities and Exchange to the Paperwork Reduction Act of 1995
the date of the filing. However, pursuant Commission, 100 F Street NE, (44 U.S.C. 3501 et seq.), the Securities
to Rule 19b–4(f)(6)(iii),8 the Commission Washington, DC 20549–1090. and Exchange Commission
may designate a shorter time if such (‘‘Commission’’) has submitted to the
All submissions should refer to File
action is consistent with the protection Office of Management and Budget a
Number SR–BX–2018–035. This file
of investors and the public interest. The request for approval of extension of the
number should be included on the
Exchange requests that the Commission previously approved collection of
subject line if email is used. To help the
waive the 30-day operative delay so that information discussed below.
Commission process and review your Rule 206(4)–3 (17 CFR 275.206(4)–3)
the proposal may become operative
comments more efficiently, please use under the Investment Advisers Act of
immediately upon filing. The Exchange
only one method. The Commission will 1940, which is entitled ‘‘Cash Payments
represents that immediately defining the
post all comments on the Commission’s for Client Solicitations,’’ provides
terms ‘‘in-the-money’’ and ‘‘out-of-the-
internet website (http://www.sec.gov/ restrictions on cash payments for client
money’’ options within its Rulebook
rules/sro.shtml). Copies of the solicitations. The rule requires that an
would provide greater transparency to
submission, all subsequent adviser pay all solicitors’ fees pursuant
its Participants. For the same reason, the
amendments, all written statements to a written agreement. When an adviser
Commission believes that waiving the
with respect to the proposed rule will provide only impersonal advisory
30-day operative delay is consistent
change that are filed with the services to the prospective client, the
with the protection of investors and the
Commission, and all written rule imposes no disclosure
public interest. Accordingly, the
communications relating to the requirements. When the solicitor is
Commission waives the 30-day
proposed rule change between the affiliated with the adviser and the
operative delay and designates the
Commission and any person, other than adviser will provide individualized
proposed rule change operative upon
those that may be withheld from the advisory services to the prospective
filing.9
public in accordance with the client, the solicitor must, at the time of
At any time within 60 days of the
provisions of 5 U.S.C. 552, will be the solicitation or referral, indicate to
filing of the proposed rule change, the
available for website viewing and the prospective client that he is
5 15 U.S.C. 78s(b)(3)(A)(iii).
printing in the Commission’s Public affiliated with the adviser. When the
6 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– Reference Room, 100 F Street NE, solicitor is not affiliated with the
4(f)(6) requires a self-regulatory organization to give Washington, DC 20549, on official adviser and the adviser will provide
the Commission written notice of its intent to file business days between the hours of individualized advisory services to the
the proposed rule change at least five business days 10:00 a.m. and 3:00 p.m. Copies of the
prior to the date of filing of the proposed rule prospective client, the solicitor must, at
filing also will be available for
sradovich on DSK3GMQ082PROD with NOTICES

change, or such shorter time as designated by the the time of the solicitation or referral,
Commission. The Exchange has satisfied this inspection and copying at the principal provide the prospective client with a
requirement. office of the Exchange. All comments copy of the adviser’s brochure and a
7 17 CFR 240.19b–4(f)(6).
received will be posted without change. disclosure document containing
8 17 CFR 240.19b–4(f)(6)(iii).
9 For purposes only of waiving the 30-day
Persons submitting comments are information specified in rule 206(4)–3.
operative delay, the Commission has considered the
cautioned that we do not redact or edit Amendments to rule 206(4)–3, adopted
proposed rule’s impact on efficiency, competition, personal identifying information from
and capital formation. See 15 U.S.C. 78c(f). comment submissions. You should 10 17 CFR 200.30–3(a)(12).

VerDate Sep<11>2014 18:11 Aug 08, 2018 Jkt 244001 PO 00000 Frm 00084 Fmt 4703 Sfmt 4703 E:\FR\FM\09AUN1.SGM 09AUN1
Document Created: 2018-08-09 01:12:00
Document Modified: 2018-08-09 01:12:00
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		83 FR 39484