83 FR 63955 - Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Bid/Ask Differentials

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 238 (December 12, 2018)

Page Range		63955-63958
FR Document		2018-26826
Federal Register, Volume 83 Issue 238 (Wednesday, December 12, 2018)
[Federal Register Volume 83, Number 238 (Wednesday, December 12, 2018)]
[Notices]
[Pages 63955-63958]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-26826]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84729; File No. SR-ISE-2018-96]


Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Relating to Bid/Ask 
Differentials

December 6, 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 November 28, 2018, 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 proposes to amend ISE Rule 701, entitled ``Opening,'' 
ISE Rule 803, entitled ``Obligations of Market Makers'' and ISE Rule 
100, entitled ``Definitions.''
    The text of the proposed rule change is available on the Exchange's 
website at http://ise.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
    ISE proposes several amendments in this rule change. First, the 
Exchange proposes to amend ISE Rule 701, entitled ``Opening'' and ISE 
Rule 803, entitled ``Obligations of Market Makers'' to correct 
inconsistencies between the Exchange's rule text and the operation of 
the System. Second, the Exchange proposes to add definitions to ISE 
Rule 100 to define ``in-the-money'' and ``out-of-the-money'' option 
series. Third, the Exchange proposes to correct various cross 
references to Rule 100. Each amendment will be described in more detail 
below.
Rule 701
    Today, for the Opening Process, ISE Rule 701(a)(8) defines a 
``Valid Width Quote'' as a two-sided electronic quotation submitted by 
a Market Maker that consists of a bid/ask differential that is 
compliant with Rule 803(b)(4).\3\

[[Page 63956]]

Specifically, for the Opening Process, ISE Rule 803(b)(4) states that, 
for in-the money option series, the bid/ask differential may be as wide 
as the spread between the national best bid and offer in the underlying 
security. In practice, however, the Exchange's System permits a Valid 
Width Quote in the Opening Process to be as wide as the quotation for 
the underlying security on the primary (listing) market.\4\
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    \3\ ISE Rule 803(b)(4) provides:
     ``To price options contracts fairly by, among other things, 
bidding and offering so as to create differences of no more than $5 
between the bid and offer following the opening rotation in an 
equity or index options contract. Prior to the opening rotation, 
spread differentials shall be no more than $.25 between the bid and 
offer for each options contract for which the bid is less than $2, 
no more than $.40 where the bid is at least $2 but does not exceed 
$5, no more than $.50 where the bid is more than $5 but does not 
exceed $10, no more than $.80 where the bid is more than $10 but 
does not exceed $20, and no more than $1 where the bid is $20 or 
greater, provided that the Exchange may establish differences other 
than the above for one or more options series.
    (i) The bid/offer differentials stated in subparagraph (b)(4) of 
this Rule shall not apply to in-the-money options series where the 
underlying securities market is wider than the differentials set 
forth above. For these series, the bid/ask differential may be as 
wide as the spread between the national best bid and offer in the 
underlying security.''
    \4\ In connection with the ISE migration, the primary market was 
utilized beginning on June 12, 2017 as each symbol migrated to the 
INET platform.
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Proposal
    The Exchange proposes to codify its current practice and correctly 
reflect in its Rules that the Valid Width Quote in the Opening Process 
apply a primary market analysis, not a national best bid or offer 
(``NBBO'') analysis.\5\ Specifically, this proposal would conform the 
current rule text to the current System by amending the definition of a 
Valid Width Quote in Rule 701, ``Opening,'' so that, in the case of in-
the-money option series \6\ where the market for the underlying 
security is wider than the differentials set forth within ISE Rule 
803(b)(4), the bid/ask differential may be as wide as the quotation for 
the underlying security on the primary \7\ (listing) market, or its 
decimal equivalent rounded down to the nearest minimum increment.
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    \5\ The Exchange notes that today ISE utilizes the primary 
market in calculating the bid/ask differential during the Opening 
Process. This rule change would amend the rule to reflect ISE's 
current practice.
    \6\ An at-the-money option series would also qualify. An out-of-
the-money series would not qualify.
    \7\ The term ``primary market'' means the principal market in 
which an underlying security is traded. See ISE Rule 100(a)(48).
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    The Exchange believes that utilizing the primary market in the 
Opening Process is reasonable given the close connection between the 
primary market and the Opening Process. For example, ISE Rule 701(c)(2) 
provides, ``For all options, the underlying security, including 
indexes, must be open on the primary market for a certain time period 
as determined by the Exchange for the Opening Process to commence. The 
time period shall be no less than 100 milliseconds and no more than 5 
seconds.''
    Today, in order to open, the Exchange requires either: (i) The 
Primary Market Maker's (``PMM'') Valid Width Quote; (ii) the Valid 
Width Quotes of at least two Competitive Market Makers (``CMM''); or 
(iii) if neither the PMM's Valid Width Quote nor the Valid Width Quotes 
of two CMMs have been submitted within such timeframe, one CMM has 
submitted a Valid Width Quote. The Exchange notes that it requires 
Market Makers to submit Valid Width Quotes during the Opening Process 
to guarantee liquidity, unlike other markets which may not require 
market makers to quote during the opening.\8\ Further, amending the 
rule text to conform to its current practice will avoid confusion and 
continue to permit ISE to remain one of the strongest openings in the 
industry.
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    \8\ The Nasdaq Options Market (``NOM'') does not require NOM 
Market Makers to quote during the opening, however if a NOM Market 
Maker decided to quote during the opening, the Market Maker would be 
permitted to submit a bid/ask differential with a difference not to 
exceed $5 between the bid and offer regardless of the price of the 
bid. However, respecting in-the-money series where the market for 
the underlying security is wider than $5, the bid/ask differential 
may be as wide as the spread between the national best bid and offer 
in the underlying security. See NOM Rules at Chapter VII, Section 
6(d)(ii).
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Discretion
    The Exchange proposes to codify its current practice and amend ISE 
Rule 803(b)(4) to adopt rule text which permits the Exchange intra-day 
discretion for bid/ask differentials similar to the discretion 
currently permitted in the Opening Process. The Exchange proposes to 
add a sentence to the end of the paragraph in ISE Rule 803(b)(4) 
indicating the Exchange may establish differences other than the above 
for one or more series or classes of options. The Exchange notes that 
it utilizes this discretion today to grant relief for individual 
options classes as well as relief for all option classes based upon 
specific criteria. Today, Market Makers may request quote relief. When 
determining whether to grant quote relief the Exchange considers, among 
other factors, the following: (i) Pending corporate actions with 
undisclosed or uncertain terms; (ii) company or industry news with 
anticipated significant market impact; (iii) government news of a 
sensational nature. The Exchange believes that it is necessary to grant 
quote relief in certain circumstances where a Market Maker may not have 
enough information to maintain fair and orderly markets. The Exchange 
notes that other markets have similar discretion for intra-day quotes 
today.\9\
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    \9\ See Nasdaq Phlx LLC Rule 1014(c)(i)(A)(1)(a), Miami 
International Securities Exchange LLC Rule 604b)(4), Cboe Exchange, 
Inc. Rule 8.7(d), NYSE American LLC Rule 925NY(b)(4), NYSE Arca, 
Inc. 6.37-O(b)(4).
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Rule 100
    ISE rules currently do not define an ``in-the-money'' or ``out-of-
the-money'' option series. As part of this rule change, the Exchange 
proposes to define these above-referenced terms within ISE Rule 100 to 
bring greater transparency to its rules with respect to Market Maker 
quoting. The Exchange proposes to define the term ``in-the-money'' 
option at Rule 100(a)(28), which is currently reserved, as the 
following: For call options, all strike prices at or below the offer in 
the underlying security on the primary listing market; for put options, 
all strike prices at or above the bid in the underlying security on the 
primary listing market. The Exchange proposes to define an ``out-of-
the-money'' option at Rule 100(a)(40), which is currently reserved, to 
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.\10\ Each of these definitions would apply 
for purposes of Market Maker quoting obligations in Rules 701 and 803. 
The Exchange notes that it specifically proposes to reference the rules 
related to Market Maker quoting obligations to avoid any confusion with 
the manner in which ``in-the-money'' and ``out-of-the-money'' options 
series are defined for purposes of other options rules.
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    \10\ The Exchange notes that it does not utilize a last sale 
calculation. The Exchange believes that the quotation for the 
underlying security on the primary market provides an accurate 
reflection of the market. A last sale calculation may not be an 
accurate reflection of the market because the last sale may not be 
representative of the primary market in all cases, particularly if a 
halt were to occur.
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    The Exchange has added these definitions into the existing rules in 
alphabetical order. The Exchange proposes to renumber the rules to 
account for the addition of these two new definitions and proposes to 
amend cross-references to Rule 100 within the Rulebook to reflect the 
proposed new numbering within Rule 100.
Cross References
    The Exchange proposes to amend cross-references to Rule 100 in 
Rules 713, 720 and Rule 1901 to refer to the current definitions.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\11\ in general, and furthers the

[[Page 63957]]

objectives of Section 6(b)(5) of the Act,\12\ 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 notes that today ISE 
utilizes the primary market in calculating the bid/ask differential 
during the Opening Process, although the current rule does not reflect 
this practice. This rule change would amend the rule to reflect ISE's 
current practice.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
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Rules 701 and 803
    The Exchange's proposal to amend the Opening Process to conform to 
current practice is consistent with the Act because while the Exchange 
believes that relying on the primary market or the NBBO accurately 
reflect the current trading environment and take into consideration 
market conditions, the Exchange's current Opening Process is designed 
to utilize the primary standard during the Opening Process.\13\
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    \13\ ISE Rule 701(c)(2) provides, ``For all options, the 
underlying security, including indexes, must be open on the primary 
market for a certain time period as determined by the Exchange for 
the Opening Process to commence. The time period shall be no less 
than 100 milliseconds and no more than 5 seconds.''.''
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Discretion
    The Exchange's proposal to amend its rule to permit intra-day 
discretion to conform to current practice is consistent with the Act 
because such discretion is necessary to permit the Exchange the ability 
to attract liquidity from Market Makers while also maintaining a fair 
and orderly market. Market Makers accept a certain amount of risk when 
quoting on the Exchange. The Exchange imposes quoting and other 
obligations on Market Makers.\14\ The Exchange notes that these risks 
which Market Makers accept each trading day are calculated risks. The 
Exchange notes that it considers certain factors, which are likely 
unforeseen, in determining whether to grant relief either in individual 
options classes or for all option classes based upon specific criteria. 
Specifically, the Exchange considers, among other factors, the 
following: (i) Pending corporate actions with undisclosed or uncertain 
terms; (ii) company or industry news with anticipated significant 
market impact; (iii) government news of a sensational nature. The 
Exchange believes that it is necessary to grant quote relief in certain 
circumstances where a Market Maker may not have enough information to 
maintain fair and orderly markets. The Exchange notes that other 
markets have similar discretion for intra-day quotes today.\15\
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    \14\ See ISE Rules 803 and 804.
    \15\ See note 9 above.
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Rule 100
    The Exchange's proposal to define the terms ``in-the-money'' and 
``out-of-the-money'' for purposes of Market Maker quoting obligations 
in Rules 701 and 803 is consistent with the Act and protects investors 
and the public interest by bringing greater transparency to the 
Rulebook. Each of these defined terms would apply for purposes of 
Market Maker quoting obligations in Rules 701 and 803. The Exchange 
notes that it specifically proposes to reference the rules related to 
Market Maker quoting obligations to avoid any confusion with the manner 
in which ``in-the-money'' and ``out-of-the-money'' options series are 
defined for purposes of other options rules.
Cross-References
    The Exchange's proposal to amend cross-references to Rule 100 
within Rules 713, 720 and Rule 1901 to refer to the current definitions 
is consistent with the Act because it will correct references to 
definitions.

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.
Rules 701 and 803
    The Exchange's proposal to codify its current practice of utilizing 
the primary market in the Opening Process does not unduly burden 
competition because the current practice maintains a close connection 
between the primary market and the Opening Process. The primary market 
reflects the current trading environment. The Exchange notes that the 
proposal does not create an undue burden on intra-market competition 
because Market Makers are the only market participants subject to 
quoting requirements and these participants have valuable information 
with respect to the underlying instrument under the current process to 
make informed decisions and take calculated risks in the marketplace 
when providing liquidity. Market Makers remain responsible for 
maintaining fair and orderly markets.
Discretion
    The Exchange's proposal to codify the Exchange's ability to permit 
intra-day discretion similar to the discretion currently permitted in 
the Opening Process does not impose an undue burden on competition 
because Market Makers are the only market participants subject to 
quoting requirements and the proposal specifically considers the need 
for Market Makers to have information to make informed decisions to 
make calculated risks in the marketplace so that they may provide 
liquidity while maintaining fair and orderly markets. The proposed 
amendments do not create undue burdens on inter-market competition 
because other options markets have the same intra-day requirements.\16\
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    \16\ See note 9 above.
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Rule 100
    The Exchange's proposal to define the terms ``in-the-money'' or 
``out-of-the-money'' for purposes of Market Maker quoting obligations 
in Rules 701 and 803 does not unduly burden competition, rather it adds 
greater transparency to the Rulebook and makes clear the applicability 
of the definitions to avoid confusion with respect to the remainder of 
the options rules.
Cross-References
    The Exchange's proposal to amend cross-references to Rule 100 in 
Rules 713, 720 and Rule 1901 to refer to the current definitions does 
not unduly burden competition because it will correct references to 
definitions.

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 \17\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\18\
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    \17\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \18\ 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 the text of the proposed rule change, 
at least five business days prior to the date of filing of the 
proposed rule change, or such shorter time as designated by the 
Commission. The Exchange has satisfied this requirement.

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[[Page 63958]]

    A proposed rule change filed under Rule 19b-4(f)(6) \19\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, Rule 19b-4(f)(6)(iii)\20\ 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 
immediately codifying its current practice within its rules to 
accurately reflect the operation of the Exchange's System will avoid 
confusion. 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 operative delay 
and designates the proposed rule change as operative upon filing.\21\
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    \19\ 17 CFR 240.19b-4(f)(6).
    \20\ 17 CFR 240.19b-4(f)(6)(iii).
    \21\ 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 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-ISE-2018-96 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-ISE-2018-96. 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-ISE-2018-96 and should be submitted on 
or before January 2, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\22\
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    \22\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-26826 Filed 12-11-18; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 83, No. 238 / Wednesday, December 12, 2018 / Notices 63955

the Exchange. The Commission believes provisions of 5 U.S.C. 552, will be The text of the proposed rule change
that waiver of the 30-day operative available for website viewing and is available on the Exchange’s website at
delay is consistent with the protection printing in the Commission’s Public http://ise.cchwallstreet.com/, at the
of investors and the public interest. Reference Room, 100 F Street NE, principal office of the Exchange, and at
Accordingly, the Commission hereby Washington, DC 20549, on official the Commission’s Public Reference
waives the operative delay and business days between the hours of Room.
designates the proposed rule change as 10:00 a.m. and 3:00 p.m. Copies of the
operative upon filing.10 filing also will be available for II. Self-Regulatory Organization’s
At any time within 60 days of the inspection and copying at the principal Statement of the Purpose of, and
filing of the proposed rule change, the office of the Exchange. All comments Statutory Basis for, the Proposed Rule
Commission summarily may received will be posted without change. Change
temporarily suspend such rule change if Persons submitting comments are In its filing with the Commission, the
it appears to the Commission that such cautioned that we do not redact or edit Exchange included statements
action is: (i) Necessary or appropriate in personal identifying information from concerning the purpose of and basis for
the public interest; (ii) for the protection comment submissions. You should the proposed rule change and discussed
of investors; or (iii) otherwise in submit only information that you wish any comments it received on the
furtherance of the purposes of the Act. to make available publicly. All proposed rule change. The text of these
If the Commission takes such action, the submissions should refer to File statements may be examined at the
Commission shall institute proceedings Number SR–MIAX–2018–37 and should places specified in Item IV below. The
to determine whether the proposed rule be submitted on or before January 2, Exchange has prepared summaries, set
should be approved or disapproved. 2019. forth in sections A, B, and C below, of
IV. Solicitation of Comments For the Commission, by the Division of the most significant aspects of such
Trading and Markets, pursuant to delegated statements.
Interested persons are invited to authority.11
submit written data, views, and Eduardo A. Aleman, A. Self-Regulatory Organization’s
arguments concerning the foregoing, Statement of the Purpose of, and
Assistant Secretary.
including whether the proposed rule Statutory Basis for, the Proposed Rule
[FR Doc. 2018–26831 Filed 12–11–18; 8:45 am]
change is consistent with the Act. Change
BILLING CODE 8011–01–P
Comments may be submitted by any of
the following methods: 1. Purpose

Electronic Comments SECURITIES AND EXCHANGE ISE proposes several amendments in
COMMISSION this rule change. First, the Exchange
• Use the Commission’s internet proposes to amend ISE Rule 701,
comment form (http://www.sec.gov/ [Release No. 34–84729; File No. SR–ISE– entitled ‘‘Opening’’ and ISE Rule 803,
rules/sro.shtml); or 2018–96] entitled ‘‘Obligations of Market Makers’’
• Send an email to rule-comments@ to correct inconsistencies between the
sec.gov. Please include File Number SR– Self-Regulatory Organizations; Nasdaq
Exchange’s rule text and the operation
MIAX–2018–37 on the subject line. ISE, LLC; Notice of Filing and
of the System. Second, the Exchange
Immediate Effectiveness of Proposed
Paper Comments proposes to add definitions to ISE Rule
Rule Change Relating to Bid/Ask
• Send paper comments in triplicate 100 to define ‘‘in-the-money’’ and ‘‘out-
Differentials
to Secretary, Securities and Exchange of-the-money’’ option series. Third, the
Commission, 100 F Street NE, December 6, 2018. Exchange proposes to correct various
Washington, DC 20549–1090. Pursuant to Section 19(b)(1) of the cross references to Rule 100. Each
Securities Exchange Act of 1934 amendment will be described in more
All submissions should refer to File
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 detail below.
Number SR–MIAX–2018–37. This file
number should be included on the notice is hereby given that on November Rule 701
subject line if email is used. To help the 28, 2018, Nasdaq ISE, LLC (‘‘ISE’’ or
‘‘Exchange’’) filed with the Securities Today, for the Opening Process, ISE
Commission process and review your
and Exchange Commission Rule 701(a)(8) defines a ‘‘Valid Width
comments more efficiently, please use
(‘‘Commission’’) the proposed rule Quote’’ as a two-sided electronic
only one method. The Commission will
change as described in Items I and II quotation submitted by a Market Maker
post all comments on the Commission’s
below, which Items have been prepared that consists of a bid/ask differential
internet website (http://www.sec.gov/
by the Exchange. The Commission is that is compliant with Rule 803(b)(4).3
rules/sro.shtml). Copies of the
submission, all subsequent publishing this notice to solicit
3 ISE Rule 803(b)(4) provides:
amendments, all written statements comments on the proposed rule change
from interested persons. ‘‘To price options contracts fairly by, among other
with respect to the proposed rule things, bidding and offering so as to create
change that are filed with the I. Self-Regulatory Organization’s differences of no more than $5 between the bid and
Commission, and all written Statement of the Terms of Substance of offer following the opening rotation in an equity or
index options contract. Prior to the opening
communications relating to the the Proposed Rule Change rotation, spread differentials shall be no more than
proposed rule change between the The Exchange proposes to amend ISE $.25 between the bid and offer for each options
Commission and any person, other than Rule 701, entitled ‘‘Opening,’’ ISE Rule
contract for which the bid is less than $2, no more
amozie on DSK3GDR082PROD with NOTICES1

those that may be withheld from the than $.40 where the bid is at least $2 but does not
803, entitled ‘‘Obligations of Market exceed $5, no more than $.50 where the bid is more
public in accordance with the Makers’’ and ISE Rule 100, entitled than $5 but does not exceed $10, no more than $.80
‘‘Definitions.’’ where the bid is more than $10 but does not exceed
10 For purposes only of waiving the 30-day $20, and no more than $1 where the bid is $20 or
operative delay, the Commission has also greater, provided that the Exchange may establish
11 17 CFR 200.30–3(a)(12).
considered the proposed rule’s impact on differences other than the above for one or more
1 15 U.S.C. 78s(b)(1).
efficiency, competition, and capital formation. See options series.
15 U.S.C. 78c(f). 2 17 CFR 240.19b–4. Continued

VerDate Sep<11>2014 18:39 Dec 11, 2018 Jkt 247001 PO 00000 Frm 00131 Fmt 4703 Sfmt 4703 E:\FR\FM\12DEN1.SGM 12DEN1
63958 Federal Register / Vol. 83, No. 238 / Wednesday, December 12, 2018 / Notices

A proposed rule change filed under Paper Comments SECURITIES AND EXCHANGE
Rule 19b–4(f)(6) 19 normally does not COMMISSION
become operative prior to 30 days after • Send paper comments in triplicate
the date of the filing. However, Rule to Secretary, Securities and Exchange
[Release No. 34–84735; File No. SR–
19b–4(f)(6)(iii)20 permits the Commission, 100 F Street NE,
NYSEArca–2018–87]
Commission to designate a shorter time Washington, DC 20549–1090.
if such action is consistent with the All submissions should refer to File Self-Regulatory Organizations; NYSE
protection of investors and the public Number SR–ISE–2018–96. This file Arca, Inc.; Notice of Filing and
interest. The Exchange has asked the number should be included on the Immediate Effectiveness of Proposed
Commission to waive the 30-day Rule Change To Amend NYSE Arca
subject line if email is used. To help the
operative delay so that the proposal may Rule 5.1–E(a)(2)
Commission process and review your
become operative immediately upon
filing. The Exchange states that comments more efficiently, please use December 6, 2018.
immediately codifying its current only one method. The Commission will
post all comments on the Commission’s Pursuant to Section 19(b)(1) 1 of the
practice within its rules to accurately Securities Exchange Act of 1934
reflect the operation of the Exchange’s internet website (http://www.sec.gov/
rules/sro.shtml). Copies of the (‘‘Act’’) 2 and Rule 19b–4 thereunder,3
System will avoid confusion. The notice is hereby given that, on
Commission believes that waiver of the submission, all subsequent
amendments, all written statements November 27, 2018, NYSE Arca, Inc.
30-day operative delay is consistent (‘‘Exchange’’ or ‘‘NYSE Arca’’) filed
with the protection of investors and the with respect to the proposed rule
with the Securities and Exchange
public interest. Accordingly, the change that are filed with the
Commission (‘‘Commission’’) the
Commission hereby waives the Commission, and all written
proposed rule change as described in
operative delay and designates the communications relating to the
Items I and II below, which Items have
proposed rule change as operative upon proposed rule change between the been prepared by the self-regulatory
filing.21 Commission and any person, other than organization. The Commission is
At any time within 60 days of the those that may be withheld from the publishing this notice to solicit
filing of the proposed rule change, the public in accordance with the comments on the proposed rule change
Commission summarily may provisions of 5 U.S.C. 552, will be from interested persons.
temporarily suspend such rule change if available for website viewing and
it appears to the Commission that such printing in the Commission’s Public I. Self-Regulatory Organization’s
action is: (i) Necessary or appropriate in Reference Room, 100 F Street NE, Statement of the Terms of Substance of
the public interest; (ii) for the protection Washington, DC 20549, on official the Proposed Rule Change
of investors; or (iii) otherwise in business days between the hours of
furtherance of the purposes of the Act. The Exchange proposes to amend
10:00 a.m. and 3:00 p.m. Copies of the NYSE Arca Rule 5.1–E(a)(2) to remove
If the Commission takes such action, the filing also will be available for
Commission shall institute proceedings the requirement that the Exchange file
inspection and copying at the principal with the Securities and Exchange
to determine whether the proposed rule office of the Exchange. All comments
should be approved or disapproved. Commission (the ‘‘Commission’’) a
received will be posted without change. Form 19b–4(e) for each ‘‘new derivative
IV. Solicitation of Comments Persons submitting comments are securities product’’ that will commence
cautioned that we do not redact or edit trading on the Exchange pursuant to
Interested persons are invited to
personal identifying information from unlisted trading privileges. The
submit written data, views, and
comment submissions. You should proposed rule change is available on the
arguments concerning the foregoing,
including whether the proposed rule submit only information that you wish Exchange’s website at www.nyse.com, at
change is consistent with the Act. to make available publicly. All the principal office of the Exchange, and
Comments may be submitted by any of submissions should refer to File at the Commission’s Public Reference
the following methods: Number SR–ISE–2018–96 and should be Room.
submitted on or before January 2, 2019.
Electronic Comments II. Self-Regulatory Organization’s
For the Commission, by the Division of Statement of the Purpose of, and
• Use the Commission’s internet Trading and Markets, pursuant to delegated Statutory Basis for, the Proposed Rule
comment form (http://www.sec.gov/ authority.22 Change
rules/sro.shtml); or Eduardo A. Aleman,
• Send an email to rule-comments@ Assistant Secretary. In its filing with the Commission, the
sec.gov. Please include File Number SR– [FR Doc. 2018–26826 Filed 12–11–18; 8:45 am]
self-regulatory organization included
ISE–2018–96 on the subject line. statements concerning the purpose of,
BILLING CODE 8011–01–P
and basis for, the proposed rule change
give the Commission written notice of its intent to and discussed any comments it received
file the proposed rule change, along with a brief on the proposed rule change. The text
description and the text of the proposed rule of those statements may be examined at
change, at least five business days prior to the date
of filing of the proposed rule change, or such
the places specified in Item IV below.
The Exchange has prepared summaries,
amozie on DSK3GDR082PROD with NOTICES1

shorter time as designated by the Commission. The
Exchange has satisfied this requirement. set forth in sections A, B, and C below,
19 17 CFR 240.19b–4(f)(6).
of the most significant parts of such
20 17 CFR 240.19b–4(f)(6)(iii).
statements.
21 For purposes only of waiving the 30-day

operative delay, the Commission has also
1 15 U.S.C. 78s(b)(1).
considered the proposed rule’s impact on
2 15 U.S.C. 78a.
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f). 22 17 CFR 200.30–3(a)(12). 3 17 CFR 240.19b–4.

VerDate Sep<11>2014 18:39 Dec 11, 2018 Jkt 247001 PO 00000 Frm 00134 Fmt 4703 Sfmt 4703 E:\FR\FM\12DEN1.SGM 12DEN1
Document Created: 2018-12-12 01:39:40
Document Modified: 2018-12-12 01:39:40
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 63955