[Federal Register Volume 89, Number 75 (Wednesday, April 17, 2024)]
[Notices]
[Pages 27471-27472]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-08092]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99946; File No. SR-ISE-2024-06]


Self-Regulatory Organizations; Nasdaq ISE, LLC; Order Approving a 
Proposed Rule Change To Amend the Short Term Option Series Program

April 11, 2024.

I. Introduction

    On February 15, 2024, Nasdaq ISE, LLC (``ISE'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission''), 
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to 
amend Supplementary Material .03 of Options 4, Section 5, ``Series of 
Options Contracts Open for Trading'' to allow Tuesday and Thursday 
expirations for options listed pursuant to the Exchange's short term 
option series program (``Short Term Option Series Program'') on the 
iShares Russell 2000 ETF (``IWM''). The proposed rule change was 
published for comment in the Federal Register on March 1, 2024.\3\ The 
Commission did not receive any comments on the proposal. This order 
approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Release No. 99604 (February 26, 
2024), 89 FR 15235 (``Notice'').
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II. Description of the Proposal 4
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    \4\ For a full description of the proposal, refer to the Notice, 
supra note 3.
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    Currently, the Exchange may open for trading series of options on 
certain symbols that expire at the close of business on each of the 
next two Mondays, Tuesdays, Wednesdays, and Thursdays, respectively, 
that are business days beyond the current week and are not business 
days in which standard expiration options series, Monthly Options 
Series, or Quarterly Options Series expire (``Short Term Option Daily 
Expirations'').\5\ Table 1 in Supplementary Material .03 to Options 4, 
Section 5 specifies each symbol that qualifies as a Short Term Option 
Daily Expiration as well as the permitted expiration days.\6\ Today, 
the Exchange may list no more than a total of two Monday and Wednesday 
expirations on IWM and no more than a total of two Monday, Tuesday, 
Wednesday, and Thursday expirations on the SPDR S&P 500 ETF Trust 
(``SPY'') and the Invesco QQQ Trust (``QQQ'').\7\
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    \5\ See Supplementary .03 to Options 4, Section 5.
    \6\ See Table 1, Supplementary .03 to Options 4, Section 5.
    \7\ See id.
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    The Exchange proposes to expand the Short Term Option Series 
Program to permit the Exchange to open for trading on any Monday or 
Tuesday that is a business day series of options on IWM that expire at 
the close of business on each of the next two Tuesdays beyond the 
current week that are business days and are not business days in which 
standard expiration options series, Monthly Options Series, or 
Quarterly Options Series expire (``Tuesday Expirations''). If the 
Tuesday Expiration falls on a Tuesday that is not a business day, the 
series shall expire on the first business day immediately prior to that 
Tuesday.\8\ Similarly, the proposal would permit the Exchange to open 
for trading on any Wednesday or Thursday that is a business day series 
of options on IWM that expire at the close of business on each of the 
next two Thursdays beyond the current week that are business days and 
are not business days in which standard expiration options series, 
Monthly Options Series, or Quarterly Options Series expire (``Thursday 
Expirations''). If the Thursday Expiration falls on a Thursday that is 
not a business day, the series shall expire on the first business day 
immediately prior to that Thursday. The listing and trading of Tuesday 
and Thursday Expirations would be subject to Supplementary Material .03 
of Options 4, Section 5.\9\
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    \8\ The Exchange proposes to amend the Tuesday and Thursday 
expirations for IWM in Table 1 in Supplementary Material .03 to 
Options 4, Section 5 from ``0'' to ``2'' to permit Tuesday and 
Thursday expirations for options on IWM listed pursuant to the Short 
Term Option Series.
    \9\ See Notice, supra note 3 at 15236.
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    The Exchange does not believe that any market disruptions would be 
encountered with the introduction of Tuesday and Thursday 
Expirations.\10\ The Exchange states there are no material differences 
in the treatment of Tuesday and Thursday SPY and QQQ Short Term Daily 
Expirations as compared to the proposed Tuesday and Thursday 
Expirations.\11\ The Exchange believes that it has the necessary 
capacity and surveillance programs in place to support and properly 
monitor trading in the proposed Tuesday and Thursday Expirations.\12\ 
The Exchange currently trades Short Term Option Series that expire 
Monday and Wednesday for SPY, QQQ, and IWM and stated that it has not 
experienced any market disruptions nor issues with capacity.\13\
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    \10\ See Notice, supra note 3 at 15237.
    \11\ See Notice, supra note 3 at 15239. In addition, the 
Exchange states Cboe Exchange, Inc. began listing Tuesday and 
Thursday expirations in the Russell 2000 Index Weeklys and Mini-
Russell 2000 Index Weeklys on January 8, 2024. See Notice, supra 
note 3 at 15236.
    \12\ See Notice, supra note 3 at 15237.
    \13\ See id.
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III. Discussion and Commission's Findings

    The Commission has carefully reviewed the proposed rule change and 
finds that it is consistent with the requirements of the Act and the 
rules and regulations thereunder applicable to a national securities 
exchange and, in particular, the requirements of Section 6(b) of the 
Act.\14\ In particular, the Commission finds that the proposed rule 
change is consistent with Section 6(b)(5) of the Act,\15\ which 
requires, among other things, that the Exchange's rules be designed to 
prevent fraudulent and manipulative acts and practices, 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 
Commission believes that the proposed rule change is reasonably 
designed as a limited expansion of the Short Term Options Series 
Program and may provide the investing public and other market 
participants more flexibility to closely tailor their investment and 
hedging decisions in IWM options, thus allowing them to better manage 
their risk exposure. In addition, the Exchange has similar rules 
permitting the listing and trading of Tuesday and Thursday expirations 
on SPY and QQQ.\16\
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    \14\ 15 U.S.C. 78f. In approving this proposed rule change, the 
Commission has considered the proposed rule change's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
    \15\ 15 U.S.C. 78f(b)(5).
    \16\ See Supplementary .03 to Options 4, Section 5. See also 
Securities Exchange Release No. 96281 (November 9, 2022), 87 FR 
68769 (November 16, 2022) (order approving Tuesday and Thursday 
expirations on SPY and QQQ).
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    In approving the proposal, the Commission notes that the Exchange

[[Page 27472]]

has represented that it has an adequate surveillance program in place 
to detect manipulative trading in Tuesday IWM Expirations and Thursday 
IWM Expirations.\17\ The Exchange further states that it has the 
necessary systems capacity to support the new options series.\18\ The 
Exchange also states that it has not experienced any market disruptions 
nor issues with capacity with trading Short Term Option Series that 
expire on Tuesdays and Thursdays for SPY and QQQ.\19\
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    \17\ See Notice, supra note 3 at 15239.
    \18\ See id.
    \19\ See Notice, supra note 3 at 15237.
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    Accordingly, the Commission finds that the proposed rule change is 
consistent with Section 6(b)(5) of the Act \20\ and the rules and 
regulations thereunder applicable to a national securities exchange.
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    \20\ 15 U.S.C. 78f(b)(5).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\21\ that the proposed rule change (SR-ISE-2024-06) be, and hereby 
is, approved.
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    \21\ 15 U.S.C. 78s(b)(2).
    \22\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\22\
Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-08092 Filed 4-16-24; 8:45 am]
BILLING CODE 8011-01-P