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Federal Register / Vol. 86, No. 210 / Wednesday, November 3, 2021 / Notices
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.

The Exchange believes that the proposed extension of the Program will not have an adverse impact on capacity.

A. Self-Regulatory Organizations Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
The Exchange currently makes public on its website the data and analysis previously submitted to the Commission on the Program and will continue to make public any data or analysis it submits under the Program in the future. The Exchange will be submitting a rule change to request that the Program become permanent. In lieu of submitting any additional annual reports, the Exchange would provide additional information requested by the Commission in connection with the permanency rule change for this Program. The Exchange would continue to provide the Commission with ongoing data unless and until the Program is made permanent or discontinued.

1. Purpose
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ISE filed a rule change to permit the listing and trading of index options on the Nasdaq 100 Reduced Value Index NQX on a twelve month pilot basis 3
Program.
NQX options trade independently of and in addition to NDX options, and the NQX options are subject to the same rules that presently govern the trading of index options based on the Nasdaq100, including sales practice rules, margin requirements, trading rules, and position and exercise limits. Similar to NDX, NQX options are European-style and cash-settled, and have a contract multiplier of 100. The contract specifications for NQX options mirror in all respects those of the NDX options contract listed on the Exchange, except that NQX options are based on 15 of the value of the Nasdaq-100, and are P.M.settled pursuant to Options 4A, Section 12a6.
The Exchange proposes to amend ISE
Options 4A, Section 12a6 to extend the current NQX pilot period to May 4, 2022. This pilot was previously extended with the last extension through November 4, 2021.4 The Exchange continues to have sufficient capacity to handle additional quotations and message traffic associated with the listing and trading of NQX options. In addition, index options are integrated into the Exchanges existing surveillance system architecture and are thus subject to the relevant surveillance processes. The Exchange also continues to have adequate surveillance procedures to monitor trading in NQX
options thereby aiding in the maintenance of a fair and orderly market. Additionally, there is continued investor interest in these products and this extension will provide additional time to collect data related to the pilot.
3 See Securities Exchange Act Release No. 82911
March 20, 2018, 83 FR 12966 March 26, 2018
SRISE2017106 Approval Order.
4 See Securities Exchange Act Release Nos. 86071
June 10, 2019, 84 FR 27822 June 14, 2019 SR
ISE201918; 87379 October 22, 2019, 84 FR
57793 October 28, 2019 SRISE201927; 88683
April 17, 2020, 85 FR 22768 April 23, 2020 SR
ISE202018; 90257 October 22, 2020, 85 FR
68387 October 28, 2020 SRISE202033; and 91485 April 6, 2021, 86 FR 19052 April 12, 2021
SRISE202105.

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Pilot Report
2. Statutory Basis The Exchange believes that the proposed rule change 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, 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. In particular, the Exchange believes that the Program has been successful to date. The Exchange has not encountered any problems with the Program. By extending the pilot, the Exchange believes it will attract order flow to the Exchange, increase the variety of listed options, and provide a valuable hedge tool to retail and other investors. Specifically, the Exchange believes that the pilot will provide additional trading and hedging opportunities for investors while providing the Commission with data to monitor for and assess any potential for adverse market effects of allowing P.M.settlement for NQX options, including on the underlying component stocks.
B. Self-Regulatory Organizations Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. NQX options would be available for trading to all market participants and therefore would 5 15
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not impose an undue burden on intramarket competition.
The Exchange believes that the proposed rule change will not impose an undue burden on inter-market competition as this rule change will continue to facilitate the listing and trading of a new option product that will enhance competition among market participants, to the benefit of investors and the marketplace. The continued listing of NQX will enhance competition by providing investors with an additional investment vehicle, in a fully-electronic trading environment, through which investors can gain and hedge exposure to the Nasdaq-100.
Furthermore, this product could offer a competitive alternative to other existing investment products that seek to allow investors to gain broad market exposure.
Finally, it is possible for other exchanges to develop or license the use of a new or different index to compete with the Nasdaq-100 and seek Commission approval to list and trade options on such an index.
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 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 7 and subparagraph f6 of Rule 19b4
thereunder.8
A proposed rule change filed pursuant to Rule 19b4f6 under the Act 9 normally does not become operative for 30 days after the date of its filing. However, Rule 19b4f6iii 10
permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the 7 15

U.S.C. 78sb3A.
CFR 240.19b4f6. In addition, Rule19b 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 of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement.
9 17 CFR 240.19b4f6.
10 17 CFR 240.19b4f6iii.
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