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Federal Register / Vol. 86, No. 121 / Monday, June 28, 2021 / Notices
does not impose an undue burden on competition. The Exchange desires to remove this restriction on Market Makers which does not exist on Cboe or other Nasdaq affiliated markets.33 The proposed rule text is currently waived on ISE pursuant to Options 2, Section 4a2. Market Makers are relied upon to provide liquidity on ISE, which benefits other Members who have an opportunity to interact with the order flow. The Exchange believes that the obligation to refrain from purchasing a call option or a put option at a price more than $0.25 below parity places yet another obligation on ISE Market Makers that is not required on Cboe or other Nasdaq markets. The Exchange believes that this additional obligation is not necessary to maintain fair and orderly markets and notes the Exchange has waived this obligation.
Bid/Ask Differentials The Exchanges proposal to amend Options 2, Section 4b4 and Options 4A, Section 12bi to relocate text concerning bid/ask differentials for long-term option series does not impose an undue burden on competition. The Exchanges proposal will centralize the bid/ask differentials within new Options 2, Section 4b4iii and add a sentence to both Options 4, Section 8a and Options 4A, Section 12bi that cites to Options 2, Section 4b4iii for information on bid/ask differentials for the various products. The Exchange believes that this relocation will provide Primary Market Makers and Competitive Market Makers with centralized information regarding their bid/ask differential requirements.

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Business Continuity and Disaster Recovery Plan The Exchanges proposal to relocate Supplementary Material .02 to Options 2, Section 4, concerning business continuity and disaster recovery plans, to General 2, Section 12, which is currently reserved, does not impose an undue burden on competition. This rule text will harmonize ISEs rules with that of Phlx, Nasdaq BX, Inc. and The Nasdaq Stock Market LLC which all have business continuity and disaster recovery plans located within General 2, Section 12 of their respective rulebooks.34 Harmonizing the rule locations of the rules of the Nasdaq affiliated markets will make it easier for market participants to review and compare the rules of each Nasdaq 33 See 34 See
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market. This change is non-substantive as the rule text is not being amended.
Options 4, Section 3
The Exchanges proposal to remove the following products from Options 4, Section 3h: The ETFS Silver Trust, the ETFS Palladium Trust, the ETFS
Platinum Trust or the Sprott Physical Gold Trust does not impose an undue burden on competition because the Exchange no longer lists these products and proposes to remove them the products from its listing rules. No Member will be permitted to trade these products on ISE.
The Exchanges proposal to amend Options 4, Section 3h by removing the rule text at the end of the paragraph which provides, all of the following conditions are met, and creating separate paragraphs for Options 4, Section 3h1 and 2 does not impose an undue burden on competition. These amendments will de-link these subparagraphs so they are read independently. Today, Options 4, Section 3h1 applies to all ExchangeTraded Fund Shares. The Exchanges proposal to clarify that Options 4, Section 3h2 applies to only international or global Exchange-Traded Fund Shares that include non-U.S.
securities will bring greater clarity to the qualification standards for listing options on Exchange-Traded Fund Shares. Specifically, this language is intended to serve as a guidepost and clarify that 1 subparagraph h2 does not apply to an Exchange-Traded Fund Shares based on a U.S. domestic index or portfolio, and 2 subparagraph h2
includes Exchange-Traded Fund Shares that track a portfolio and do not track an index. This amendment will uniformly apply the criteria within Options 4, Section 3 when it lists options products on ISE.
The Exchanges proposal to amend Options 4, Section 3h2A to remove the phrase for series of portfolio depositary receipts and index fund shares based on international or global indexes, does not impose an undue burden on competition. Today, Options 4, Section 3h, subparagraphs h1 35
and hv 36 permit the Exchange to list options on Exchange-Traded Fund Shares based on generic listing standards for portfolio depositary receipts and index fund shares without applying component based requirements in subparagraphs h2BD. By removing the proposed rule text, the Exchange would make clear that subparagraph h2A applies 35 See 36 See
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to Exchange-Traded Fund Shares based on international or global indexes, or portfolios that include non-U.S.
securities, that are listed pursuant to generic listing standards and comply with Options 4, Section 3h and subparagraph h1. This amendment will uniformly apply the criteria within Options 4, Section 3 when it lists options products on ISE.
The Exchanges proposal to amend the term comprehensive surveillance agreement within Options 4, Section 3h2 AD to instead provide comprehensive surveillance sharing agreement does not impose an undue burden on competition as the amendment will bring greater clarity to the term.
The Exchanges proposal to add the phrase if not available or applicable, the Exchange-Traded Funds to Options 4, Section 3h2B, C, and D does not impose an undue burden on competition as it will clarify that when component securities are not available, the portfolio of securities upon which the Exchange-Traded Fund Share is based can be used instead.
The Exchanges proposal to amend and relocate the rule text within Options 4, Section 3h2B, C, and D will bring greater clarity to the current rule text by explicitly providing that the index being referenced is the one on which the Exchange-Traded Fund Shares is based. Also, adding or portfolio to Options 4, Section 3h2C, and D will bring greater clarity to the rule text by conforming the rule text of C and D to the language within B.
Technical Amendments The Exchanges proposal to make certain non-substantive technical amendment to Options 4, Section 3C2Aii, Options 4, Section 3g2
and Options 4, Section 3h1 does no impose an undue burden on competition. Also, adding Options 4C
and reserving it within the rules is a non-substantive amendment which will harmonize ISEs Rulebook structure to Phlxs Rulebook Structure.37
C. Self-Regulatory Organizations Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received.
37 See
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