Voglio sapere a riguardo di…

Federal Register / Vol. 86, No. 121 / Monday, June 28, 2021 / Notices Bid/ask differentials shall not apply to any options series until the time to expiration is less than nine 9 months for equity options and exchange-traded products. Bid/ask differentials shall not apply to any options series until the time to expiration is less than twelve 12 months for index options.

Currently, GEMX Options 4 and Options 4A rules are incorporated by reference to Nasdaq ISE, LLC ISE. The Exchange recently filed a rule change 12
to amend ISE Options 4 and Options 4A
rules to relocate text concerning bid/ask differentials for long-term option series from ISE Options 4, Section 8a 13 and ISE Options 4A, Section 12bi.14 The ISE Rule Change added citations to Options 2, Section 4b4iii to ISE
Options 4, Section 8a and ISE Options 4A, Section 12bi. The ISE Rule Change indicated that ISE believes relocating the bid/ask differentials to Options 2, Section 4b4iii will provide Primary Market Makers and Competitive Market Makers with centralized information regarding their bid/ask differential requirements.
Business Continuity and Disaster Recovery Plan The Exchange proposes 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. The Exchange proposes to title General 2, Section 12
as Business Continuity and Disaster Recovery Plan Testing Requirements for Members Pursuant to Regulation SCI.
The rule text is being relocated without change. The Exchange proposes to relocate this rule text to harmonize GEMXs rules with that of Nasdaq PHLX
LLC 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.15 The Exchange also proposes to reserve Sections 711 and 1322 within General 2. 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 market.

khammond on DSKJM1Z7X2PROD with NOTICES

Technical Amendments The Exchange proposes to add new Options 4C and mark it as reserved.
12 See
SRISE202114 ISE Rule Change.
Options 4, Section 8a describes the bid/
ask differentials for long-term options series for equity options and exchange-traded funds.
14 ISE Options 4A, Section 12bi describes the bid/ask differentials for long-term options series for indexes.
15 Similar rule changes will also be made for Nasdaq ISE, LLC and Nasdaq MRX, LLC.
13 ISE

VerDate Sep<11>2014

17:39 Jun 25, 2021

Jkt 253001

Phlx added a 4C to its Rulebook and this rule change will harmonize GEMXs Rulebook structure to Phlxs Rulebook Structure.16
2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6b of the Act,17 in general, and furthers the objectives of Section 6b5 of the Act,18
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.
Options 2, Section 4a The Exchanges proposal to remove certain rule text from Options 2, Section 4a that refrains Market Makers from purchasing a call option or a put option at a price more than $0.25 below parity is consistent with the Act. The Exchange desires to remove this restriction on Market Makers which does not exist on Cboe or other Nasdaq affiliated markets.19 The proposed rule text is currently waived on GEMX
pursuant to Options 2, Section 4a2.
The Exchange believes that this market maker provision is no longer necessary.
Today, GEMX incentivizes Market Makers through allocation 20 to quote tightly in their assigned options series.
Primary Market Makers and Competitive Market Makers also have other obligations with respect to market making 21 in addition to other quoting obligations 22 that they must abide by when quoting on GEMX. Also, since the adoption of the rule, the Exchange has adopted the obvious error rule 23 which permits the Exchange to review a transaction as potentially erroneous based on a theoretical price. Also, GEMX orders are subject to tradethrough compliance, thereby limiting the prices at which orders may execute.24 Market Makers are relied upon to provide liquidity on GEMX, which benefits other Members who have the opportunity to interact with the order flow. The Exchange believes that 16 See Securities Exchange Act Release No. 91488
April 6, 2021, 86 FR 19037 April 12, 2021 SR
Phlx202114 Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Phlx Options Rules at Options 4 Under the Options 4 Title in the Exchanges Rulebooks Shell Structure.
17 15 U.S.C. 78fb.
18 15 U.S.C. 78fb5.
19 See supra note 6.
20 See supra note 7.
21 See supra note 8.
22 See supra note 9.
23 See supra note 10.
24 See supra note 11.

PO 00000

Frm 00139

Fmt 4703

Sfmt 4703

34105

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 GEMX 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 and the removal of this provision would remove an impediment to and perfect the mechanism of a free and open market and a national market system.
Bid/Ask Differentials The Exchanges proposal to amend Options 2, Section 4b4i and Options 4A, Section 12bi to centralize the bid/ask differentials is consistent with the Act. Currently, GEMX Options 4 and Options 4A rules are incorporated by reference to ISE.
The Exchange recently filed a rule change 25 to amend ISE Options 4 and Options 4A rules to relocate text concerning bid/ask differentials for long-term option series from ISE
Options 4, Section 8a and ISE Options 4A, Section 12bi. The ISE Rule Change added citations to Options 2, Section 4b4i to ISE Options 4, Section 8a and ISE Options 4A, Section 12bi. GEMX believes centralizing the bid/ask differentials within new Options 2, Section 4b4i will provide Primary Market Makers and Competitive Market Makers with centralized information regarding their bid/ask differential requirements.
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, is consistent with the Act. This rule text will harmonize GEMXs 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.26 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 market. The Exchange also proposes to reserve Sections 710 and 1322 within General 2. These changes are nonsubstantive as the rule text is not being amended.
25 See 26 See
E:FRFM28JNN1.SGM

supra note 12.
supra note 15.

28JNN1