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Federal Register / Vol. 86, No. 158 / Thursday, August 19, 2021 / Notices LEAPs on index options from nine to sixty months to twelve to sixty months.
Likewise, the Exchange proposes to amend the time to expiration for strike price interval, continuity rules and bid/
ask differentials for LEAPS on index options from less than nine to less than twelve months.
Today, other options markets have terms similar to those proposed herein.3
The proposal would align BXs rules with other options markets with respect to the opening month for LEAPs on index options and the time to expiration for strike price interval, continuity rules and bid/ask differentials for LEAPS on index options by changing nine to twelve months.
The Exchange also proposes to amend Options 2, Sections 4 and 5 concerning a Market Makers or Lead Market Makers obligation to make two-sided markets in any option series with an expiration of nine months or greater.
Today, Market Makers and Lead Market Makers are not required to make twosided markets in Quarterly Option Series, any Adjusted Option Series, and any option series with an expiration of nine months or greater in equities, ETFs or indexes. With this proposal, Market Makers and Lead Market Makers are not required to make two-sided markets in Quarterly Option Series, any Adjusted Option Series, and any option series with an expiration of nine months or greater in equities, and ETFs. With respect to indexes, Market Makers and Lead Market Makers would not be required to make two-sided markets in Quarterly Option Series, any Adjusted Option Series, and any option series with an expiration of twelve months or greater. The Exchange proposes to add rule text within Options 2, Sections 4
and 5 to make clear a Lead Market Makers and Market Makers obligation, respectively, to make two-sided markets with respect to LEAPs. Today, Nasdaq ISE, LLC ISE, Nasdaq GEMX, LLC
GEMX and Nasdaq MRX, LLC
MRX have similar rules which describe the way LEAPs on index options should be quoted.4

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Implementation The Exchange proposes to implement this amendment on or before September 30, 2021. The Exchange will issue an Options Trader Alert announcing the date the amendment will be operative.
3 See Cboe Options Exchange, Inc. Rule 4.13b.
See also Nasdaq Phlx LLC and Nasdaq ISE, LLC
Options 4A, Section 12b.
4 See ISE, GEMX and MRX Options 2, Section 5e1.

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2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6b of the Act,5 in general, and furthers the objectives of Section 6b5 of the Act,6
in particular, in that it is designed to promote just and equitable principles of trade and to protect investors and the public interest by amending its rules, in part, to align BXs rules with other options markets with respect to the opening month of acceptable months for LEAPs on index options and the time to expiration for strike price interval, continuity rules and bid/ask differentials for LEAPS on index options. Today, other options markets have terms similar to those proposed herein.7
Amending Options 2, Section 5d2A and Options 4A, Section 12b would harmonize BXs rules with respect to LEAPs on index options to permit BX to list these options in the same manner as other options markets that have similar rules.8 The Exchange notes that this rule change will allow BX to list more non-LEAP expirations as the front-months for LEAP expirations would begin with month twelve instead of month nine. The Exchange believes that this proposal would allow it to list more months where there is greater customer demand as this proposal would amend the opening month for LEAPs on index options from nine to twelve months. Harmonizing BXs rules with respect to LEAPs on index options will allow BX to list these options in the same manner as other options markets that have similar rules.9
Amending Options 2, Sections 4 and 5 to specifically note that the opening month for LEAPs on index options would be twelve months by adding a separate sentence to address LEAPs for index options is consistent with the Act.
The proposal would align the Exchange with the way other options markets require market makers to quote LEAPs on index options.10 BX Lead Market Makers and Market Makers would be required to provide two-sided quotations in additional months with this proposal as the opening month for LEAPs on index options is changing from nine to twelve months.
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U.S.C. 78fb.
U.S.C. 78fb5.
7 See supra note 3.
8 See supra note 3.
9 See supra note 3.
10 See ISE, GEMX and MRX Options 2, Section 5e1.
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B. Self-Regulatory Organizations Statement on Burden on Competition The Exchange does not believe that the proposed rule change will not impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. Specifically, the Exchange does not believe the proposal to amend Options 2, Section 5d2A and Options 4A, Section 12b will impose any burden on intra-market competition as all Participants will be treated in the same manner with respect to time to expiration for strike price interval, continuity rules and bid/ask differentials for LEAPs on index options. Additionally, the Exchange does not believe the proposal will impose any burden on inter-market competition as market participants are welcome to become BX Participants if they determine that this proposed rule change has made BX more attractive or favorable. Finally, all options exchanges are free to compete by listing and trading index options with similar expirations.
Amending Options 2, Sections 4 and 5 to specifically note that the opening month for LEAPs on index options would be twelve months by adding a separate sentence to address LEAPs on index options does not impose an undue burden on competition, rather the proposal aligns the Exchanges rule with rules of other options markets with respect to quoting LEAPs.11
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.
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 19b3A of the Act 12 and Rule 19b 4f6 thereunder.13
11 See ISE, GEMX and MRX Options 2, Section 5e1.
12 15 U.S.C. 78sb3A.
13 17 CFR 240.19b4f6. In addition, Rule 19b 4f6iii 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
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