[Federal Register Volume 79, Number 222 (Tuesday, November 18, 2014)]
[Notices]
[Pages 68680-68681]
[FR Doc No: 2014-27335]

-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Sunshine Act Meeting

    The following notice of meeting is published pursuant to section
3(a) of the government in the Sunshine Act (Pub. L. 94-409), 5 U.S.C.
552b:
AGENCY: Federal Energy Regulatory Commission, DOE.

Date and Time: November 20, 2014, 10:00 a.m.

Place: Room 2C, 888 First Street NE., Washington, DC 20426.

Status: Open.

Matters To Be Considered: Agenda

* NOTE--Items listed on the agenda may be deleted without further
notice.

Contact Person for More Information: Kimberly D. Bose, Secretary,
Telephone<PHONE_NUMBER>.
    For a recorded message listing items struck from or added to the
meeting, call<PHONE_NUMBER>.
    This is a list of matters to be considered by the Commission. It
does not include a listing of all documents

relevant to the items on the agenda. All public documents, however, may
be viewed on line at the Commission's Web site at http://www.ferc.gov
using the eLibrary link, or may be examined in the Commission's Public
Reference Room.

1010TH--MEETING

REGULAR MEETING

November 20, 2014, 10:00 a.m.

------------------------------------------------------------------------
        Item No.                Docket No.                Company
------------------------------------------------------------------------
                             ADMINISTRATIVE
------------------------------------------------------------------------
A-1....................  AD02-1-000.............  Agency Business
                                                   Matters.
A-2....................  AD02-7-000.............  Customer Matters,
                                                   Reliability, Security
                                                   and Market
                                                   Operations.
A-3....................  AD07-13-008............  2014 Report on
                                                   Enforcement.
------------------------------------------------------------------------
                                ELECTRIC
------------------------------------------------------------------------
E-1....................  EC14-96-000............  Exelon Corporation and
                                                   Pepco Holdings, Inc.
E-2....................  AD13-7-000.............  Centralized Capacity
                                                   Markets in Regional
                                                   Transmission
                                                   Organizations and
                                                   Independent System
                                                   Operators.
                         AD14-8-000.............  Winter 2013-2014
                                                   Operations and Market
                                                   Performance In
                                                   Regional Transmission
                                                   Organizations and
                                                   Independent System
                                                   Operators.
E-3....................  AD14-16-000............  Kansas City Board of
                                                   Public Utilities.
E-4....................  RM14-15-000............  Physical Security
                                                   Reliability Standard.
E-5....................  OMITTED................
E-6....................  RM14-10-000............  Real Power Balancing
                                                   Control Performance
                                                   Reliability Standard.
E-7....................  ER14-2936-000..........  Sunbury Generation LP.
E-8....................  ER14-2963-000..........  California Independent
                                                   System Operator
                                                   Corporation.
E-9....................  OA14-3-000.............  FPL Energy Oklahoma
                                                   Wind, LLC.
E-10...................  RR14-5-000.............  North American
                                                   Electric Reliability
                                                   Corporation.
E-11...................  EL15-15-000............  PJM Interconnection,
                                                   L.L.C.
------------------------------------------------------------------------
                                   GAS
------------------------------------------------------------------------
G-1....................  PL15-1-000.............  Cost Recovery
                                                   Mechanisms for
                                                   Modernization of
                                                   Natural Gas
                                                   Facilities.
G-2....................  RM14-21-000............  Natural Gas Act
                                                   Pipeline Maps.
G-3....................  RP12-318-003...........  Texas Eastern
                                                   Transmission, LP.
                         RP12-318-005...........
G-4....................  RP13-431-003...........  Dominion Transmission,
                                                   Inc.
G-5....................  OR14-6-000.............  BP Pipelines (Alaska)
                                                   Inc., ConocoPhillips
                                                   Transportation.
                         OR14-6-001.............  Alaska, Inc. and
                                                   ExxonMobil Pipeline
                                                   Company.
------------------------------------------------------------------------
                                  HYDRO
------------------------------------------------------------------------
H-1....................  P-12588-010............  Hydraco Power, Inc.
                                                   and Warren David
                                                   Long.
H-2....................  P-12690-007............  Public Utility
                                                   District No. 1 of
                                                   Snohomish County,
                                                   Washington.
                         P-12690-009............
                         EL14-47-001............
H-3....................  P-13997-002............  Richard A. Glover, Jr.
H-4....................  P-2210-248.............  Appalachian Power
                                                   Company.
------------------------------------------------------------------------
                              CERTIFICATES
------------------------------------------------------------------------
C-1....................  RM12-11-002............  Revisions to Auxiliary
                                                   Installations,
                                                   Replacement
                                                   Facilities, and
                                                   Siting and
                                                   Maintenance
                                                   Regulations.
                                                  A free webcast of this
                                                   event is available
                                                   through www.ferc.gov.
                                                   Anyone with Internet
                                                   access who desires to
                                                   view this event can
                                                   do so by navigating
                                                   to www.ferc.gov's
                                                   Calendar of Events
                                                   and locating this
                                                   event in the
                                                   Calendar.
                                                  The event will contain
                                                   a link to its
                                                   Webcast. The Capitol
                                                   Connection provides
                                                   technical support for
                                                   the free webcasts. It
                                                   also offers access to
                                                   this event via
                                                   television in the DC
                                                   area and via phone
                                                   bridge for a fee. If
                                                   you have any
                                                   questions, visit
                                                   www.CapitolConnection.org or contact
                                                   Danelle Springer or
                                                   David Reininger at
<PHONE_NUMBER>.
                                                  Immediately following
                                                   the conclusion of the
                                                   Commission Meeting, a
                                                   press briefing will
                                                   be held in the
                                                   Commission Meeting
                                                   Room. Members of the
                                                   public may view this
                                                   briefing in the
                                                   designated overflow
                                                   room. This statement
                                                   is intended to notify
                                                   the public that the
                                                   press briefings that
                                                   follow Commission
                                                   meetings may now be
                                                   viewed remotely at
                                                   Commission
                                                   headquarters, but
                                                   will not be telecast
                                                   through the Capitol
                                                   Connection service.
------------------------------------------------------------------------

    Dated: November 13, 2014.
Kimberly D. Bose,
Secretary.
[FR Doc. 2014-27335 Filed 11-14-14; 11:15 am]
BILLING CODE 6717-01-P


[Federal Register: November 29, 2010 (Volume 75, Number 228)]
[Rules and Regulations]
[Page 72963]
[DOCID:fr29no10-11]

-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R03-OAR-2010-0594; FRL-9231-9]

Approval and Promulgation of Air Quality Implementation Plans;
Maryland; Control of Volatile Organic Compound Emissions From
Industrial Solvent Cleaning Operations; Withdrawal of Direct Final Rule

AGENCY: Environmental Protection Agency (EPA).

ACTION: Withdrawal of direct final rule.

-----------------------------------------------------------------------

SUMMARY: Due to an adverse comment, EPA is withdrawing the direct final
rule to approve revisions to Maryland's State Implementation Plan
(SIP). This SIP revision consists of an addition to Maryland's Volatile
Organic Compounds from Specific Processes Regulation. Maryland
Department of the Environment (MDE) adopted standards for industrial
solvent cleaning operations that satisfy the reasonably available
control technology (RACT) requirements for sources of volatile organic
compounds (VOCs) covered by control techniques guidelines (CTG). In the
direct final rule published on September 29, 2010 (75 FR 59973), we
stated that if we received any adverse comments by October 29, 2010,
the rule would be withdrawn and would not take effect. EPA received an
adverse comment within the comment period. EPA will address the comment
received in a subsequent final action based upon the proposed action
also published on September 29, 2010 (75 FR 60013). EPA will not
institute a second comment period on this action.

DATES: The direct final rule published at 75 FR 59973, September 29,
2010, is withdrawn as of November 29, 2010.

ADDRESSES: EPA has established docket number EPA-R03-OAR-2010-0594 for
this action. The index to the docket is available electronically at
http://www.regulations.gov and in hard copy at Air Protection Division,
U.S. Environmental Protection Agency, Region III, 1650 Arch Street,
Philadelphia, Pennsylvania 19103.

FOR FURTHER INFORMATION CONTACT: Jacqueline Lewis,<PHONE_NUMBER>, or
by e-mail at<EMAIL_ADDRESS>
List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by
reference, Ozone, Reporting and recordkeeping requirements, Volatile
organic compounds.

    Dated: November 16, 2010.
W.C. Early,
Acting, Regional Administrator, Region III.

0
Accordingly, the amendment to the table in 40 CFR 52.1070(c), published
on September 29, 2010 (75 FR 59973) on page 59975 is withdrawn as of
November 29, 2010.

[FR Doc. 2010-29815 Filed 11-26-10; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 80, Number 181 (Friday, September 18, 2015)]
[Rules and Regulations]
[Pages 56381-56384]
[FR Doc No: 2015-23537]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 117

[Docket No. USCG-2015-0046]
RIN 1625-AA09

Drawbridge Operation Regulation; Snake Creek, Islamorada, FL

AGENCY: Coast Guard, DHS.

ACTION: Temporary interim rule and request for comments.

-----------------------------------------------------------------------

SUMMARY: The Coast Guard is modifying the operating schedule that
governs the Snake Creek Bridge across Snake Creek, Islamorada, FL. This
temporary interim rule will change the drawbridge operation schedule to
determine whether a permanent change to the schedule is needed. This
temporary interim rule will allow Snake Creek Bridge to open on signal,
except that from 8 a.m. to 6 p.m., the draw need open only on the hour.
The Bridge owner, Florida Department of Transportation, and local
officials requested this action to assist in reducing vehicle traffic
caused by frequent bridge openings.

DATES: This temporary interim rule will be effective from 8 a.m. on
September 18, 2015 to 6 p.m. on May 10, 2016.
    Comments and related material must reach the Coast Guard on or
before January 15, 2016. Requests for public meetings must be received
by the Coast Guard on or before November 1, 2015.

ADDRESSES: You may submit comments identified by docket number USCG-
2015-0046 using any one of the following methods:
    (1) Federal eRulemaking Portal: http://www.regulations.gov.
    (2) Fax:<PHONE_NUMBER>.
    (3) Mail or Delivery: Docket Management Facility (M-30), U.S.
Department of Transportation, West Building Ground Floor, Room W12-140,
1200 New Jersey Avenue SE., Washington, DC 20590-0001. Deliveries
accepted between 9 a.m. and 5 p.m., Monday through Friday, except
federal holidays. The telephone number is<PHONE_NUMBER>.
    See the ``Public Participation and Request for Comments'' portion
of the SUPPLEMENTARY INFORMATION section below for instructions on
submitting comments. To avoid duplication, please use only one of these
methods.

FOR FURTHER INFORMATION CONTACT: If you have questions on this
temporary interim rule, call or email Coast Guard Sector Key West
Waterways Management Division; telephone<PHONE_NUMBER>, email<EMAIL_ADDRESS>If you have questions on viewing or
submitting material to the docket, call Cheryl Collins, Program
Manager, Docket Operations, telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Table of Acronyms

CFR Code of Federal Regulations
DHS Department of Homeland Security
FR Federal Register
Sec.  Section Symbol
U.S.C. United States Code

A. Public Participation and Request for Comments

    We encourage you to participate in this rulemaking by submitting
comments and related materials. All comments received will be posted,
without change, to http://www.regulations.gov and will include any
personal information you have provided.

1. Submitting Comments

    If you submit a comment, please include the docket number for this
rulemaking (USCG-2015-0046), indicate the specific section of this
document to which each comment applies, and give the reason for each
suggestion or recommendation. You may submit your comments and material
online, or by fax, mail or hand delivery, but please use only one of
these means. If you submit a comment online via http://www.regulations.gov, it will be considered received by the Coast Guard
when you successfully transmit the comment. If you fax, hand deliver,
or mail your comment, it will be considered as having been received by
the Coast Guard when it is received at the Docket Management Facility.
We recommend that you include your name and a mailing address, an email
address, or a phone number in the body of your document so that we can
contact you if we have questions regarding your submission.
    To submit your comment online, go to http://www.regulations.gov,
type the

docket number [USCG-2015-0046] in the ``SEARCH'' box and click
``SEARCH.'' Click on ``Submit a Comment'' on the line associated with
this rulemaking. If you submit your comments by mail or hand delivery,
submit them in an unbound format, no larger than 8\1/2\ by 11 inches,
suitable for copying and electronic filing. If you submit them by mail
and would like to know that they reached the Facility, please enclose a
stamped, self-addressed postcard or envelope. We will consider all
comments and material received during the comment period and may change
this rule based on your comments.

2. Viewing Comments and Documents

    To view comments, as well as documents mentioned in this preamble
as being available in the docket, go to http://www.regulations.gov,
type the docket number (USCG-2015-0046) in the ``SEARCH'' box and click
``SEARCH.'' Click on Open Docket Folder on the line associated with
this rulemaking. You may also visit the Docket Management Facility in
Room W12-140 on the ground floor of the Department of Transportation
West Building, 1200 New Jersey Avenue SE., Washington, DC 20590,
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays.

3. Privacy Act

    Anyone can search the electronic form of all comments received into
any of our dockets by the name of the individual submitting the comment
(or signing the comment, if submitted on behalf of an association,
business, labor union, etc.). You may review a Privacy Act notice
regarding our public dockets in the January 17, 2008, issue of the
Federal Register (73 FR 3316).

4. Public Meeting

    We do not now plan to hold a public meeting. But you may submit a
request for one on or before November 1, 2015, using one of the methods
specified under ADDRESSES. Please explain why one would be beneficial.
If we determine that one would aid this rulemaking, we will hold one at
a time and place announced by a later notice in the Federal Register.
Regulatory History and Information
    On March 27, 2015, we published a test deviation entitled
``Drawbridge Operation Regulations; Snake Creek, Islamorada, FL'' in
the Federal Register (80 FR 16280). The comment period for the test
deviation remains open until September 14, 2015.
    The Coast Guard is issuing this temporary interim rule without
prior notice and opportunity to comment pursuant to authority under
section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C.
553(b)). This provision authorizes an agency to issue a rule without
prior notice and opportunity to comment when the agency for good cause
finds that those procedures are ``impracticable, unnecessary, or
contrary to the public interest.'' Under 5 U.S.C. 553(b)(B), the Coast
Guard finds that good cause exists for not publishing a notice of
proposed rulemaking (NPRM) with respect to this rule because delaying
an amendment to the Snake Creek Bridge schedule would be impracticable
and contrary to public interest. Pursuant to the temporary deviation
published on March 27, 2015, the Snake Creek Bridge operating schedule
was modified to determine if vehicular traffic congestion could be
reduced while accommodating the reasonable needs of navigation. While
the comment period for that deviation remains open, the Coast Guard is
implementing this rule and seeks additional comment because the test
deviation did not offer insight on the impacts of an alternate
operating schedule during fall or winter months. Preliminary evidence
shows that the revised schedule is beneficial to the commuting public
and reverting to the schedule published in 33 CFR 117.331 may not be
necessary to provide for the reasonable needs of navigation on Snake
Creek.
    Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause
exists for making this rule effective less than 30 days after
publication in the Federal Registerfor the same reasons discussed
above.

B. Basis and Purpose

    The Snake Creek Bridge in Islamorada, Florida has a vertical
clearance of 27 feet in the closed position. The normal operating
schedule as published in 33 CFR 117.331 is as follows: The draw of the
Snake Creek Bridge, at Islamorada, Florida, shall open on signal,
except that from 8 a.m. to 4 p.m., the draw need open only on the hour
and half-hour. This schedule has been in effect since 2001.
    The Bridge owner, Florida Department of Transportation, and local
officials requested a change in the operating schedule to assist in
reducing vehicle traffic caused by frequent bridge openings.
    The Coast Guard initiated a test of a new schedule for the Snake
Creek Bridge that was based on the following input:
    1. As reported by village and city councils, vehicle traffic near
the Snake Creek Bridge has negatively impacted Islamorada and
surrounding communities during peak vehicle traffic time periods. A
temporary deviation initiated a test of a new bridge operation schedule
to reduce vehicle traffic caused by bridge openings.
    2. On January 8-10, 2013, the Florida Department of Transportation
conducted a traffic monitoring study 1400 feet south of the Snake Creek
Bridge on US-1. The study found peak traffic volumes occurring at 8:45
a.m. and between 12:15 p.m. and 3:15 p.m. By reducing the number of
scheduled openings between 8 a.m. and 6 p.m., this rule seeks to reduce
vehicle traffic on US-1 while maintaining the reasonable needs of
navigation on Snake Creek.
    The types of vessels navigating Snake Creek include sport fishing
vessels and catamaran sailboats.
    During the test deviation, vessels signaled the bridge to open on
the top of the hour from 8 a.m. to 6 p.m.
    Any vessel that can safely transit under the Snake Creek Bridge
while closed may continue to navigate under the bridge during this
deviation.
    Vessel operators may also consider the use of Channel Five, a
navigable channel above Long Key, Florida 5.7 nautical miles southwest
of Snake Creek Bridge. The fixed US-1 bridge across Channel Five has a
vertical clearance of 65 feet.

C. Discussion of the Temporary Interim Rule

    A test deviation published on March 27, 2015 allowed the Snake
Creek Bridge to remain closed with the exception of on-demand openings
once an hour schedule between 8 a.m. and 6 p.m. seven days a week. The
deviation called for on-demand openings at all other times. The Coast
Guard is initiating this temporary interim rule to allow the time
necessary to review the impacts of the test schedule and how it will
impact all modes of traffic during seasonal traffic.
    Comments on the temporary deviation as well as any others received
during the temporary interim rule comment period may be used to
determine if a final rule should be implemented to modify the operating
schedule.

D. Regulatory Analyses

    We developed this temporary interim rule after considering numerous
statutes and executive orders related to rulemaking. Below we summarize
our analyses based on these statutes or executive orders.

1. Regulatory Planning and Review

    This rule is not a significant regulatory action under section 3(f)
of Executive Order 12866, Regulatory Planning and Review, as
supplemented by Executive Order 13563, Improving Regulation and
Regulatory Review, and does not require an assessment of potential
costs and benefits under section 6(a)(3) of Order 12866 or under
section 1 of Executive Order 13563. The Office of Management and Budget
has not reviewed it under those Orders. This rule is not a significant
regulatory action because it allows for openings every hour and meets
the reasonable needs of navigation while helping to decongest vehicular
traffic on US-1. Vessels capable of transiting under the Bridge may do
so at any time.

2. Impact on Small Entities

    The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as
amended, requires federal agencies to consider the potential impact of
regulations on small entities during rulemaking. The term ``small
entities'' comprises small businesses, not-for-profit organizations
that are independently owned and operated and are not dominant in their
fields, and governmental jurisdictions with populations of less than
50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule
will not have a significant economic impact on a substantial number of
small entities.
    This action will not have a significant economic impact on a
substantial number of small entities because it will allow for once an
hour openings and vessels that can safely transit under the bridge may
do so at any time.

3. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small
entities in understanding this rule. If the rule would affect your
small business, organization, or governmental jurisdiction and you have
questions concerning its provisions or options for compliance, please
contact the person listed in the FOR FURTHER INFORMATION CONTACT,
above.
    Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
regulations to the Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR
(1-888-734-3247). The Coast Guard will not retaliate against small
entities that question or complain about this rule or any policy or
action of the Coast Guard.

4. Collection of Information

    This rule calls for no new collection of information under the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

5. Federalism

    A rule has implications for federalism under Executive Order 13132,
Federalism, if it has a substantial direct effect on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government. We have analyzed this rule under that Order and have
determined that it does not have implications for federalism.

6. Protest Activities

    The Coast Guard respects the First Amendment rights of protesters.
Protesters are asked to contact the person listed in the FOR FURTHER
INFORMATION CONTACT section to coordinate protest activities so that
your message can be received without jeopardizing the safety or
security of people, places or vessels.

7. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or tribal government, in
the aggregate, or by the private sector of $100,000,000 (adjusted for
inflation) or more in any one year. Though this rule will not result in
such an expenditure, we do discuss the effects of this rule elsewhere
in this preamble.

8. Taking of Private Property

    This rule will not cause a taking of private property or otherwise
have taking implications under Executive Order 12630, Governmental
Actions and Interference with Constitutionally Protected Property
Rights.

9. Civil Justice Reform

    This rule meets applicable standards in sections 3(a) and 3(b)(2)
of Executive Order 12988, Civil Justice Reform, to minimize litigation,
eliminate ambiguity, and reduce burden.

10. Protection of Children

    We have analyzed this rule under Executive Order 13045, Protection
of Children from Environmental Health Risks and Safety Risks. This rule
is not an economically significant rule and does not create an
environmental risk to health or risk to safety that might
disproportionately affect children.

11. Indian Tribal Governments

    This rule does not have tribal implications under Executive Order
13175, Consultation and Coordination with Indian Tribal Governments,
because it does not have a substantial direct effect on one or more
Indian tribes, on the relationship between the Federal Government and
Indian tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian tribes.

12. Energy Effects

    This rule is not a ``significant energy action'' under Executive
Order 13211, Actions Concerning Regulations That Significantly Affect
Energy Supply, Distribution, or Use.

13. Technical Standards

    This rule does not use technical standards. Therefore, we did not
consider the use of voluntary consensus standards.

14. Environment

    We have analyzed this rule under Department of Homeland Security
Management Directive 023-01 and Commandant Instruction M16475.lD, which
guides the Coast Guard in complying with the National Environmental
Policy Act of 1969 (NEPA)(42 U.S.C. 4321-4370f), and have made a
determination that this action is one of a category of actions which do
not individually or cumulatively have a significant effect on the human
environment. This rule simply promulgates the operating regulations or
procedures for drawbridges. This rule is categorically excluded, under
figure 2-1, paragraph (32)(e), of the Instruction.
    Under figure 2-1, paragraph (32)(e), of the Instruction, an
environmental analysis checklist and a categorical exclusion
determination are not required for this rule.

List of Subjects in 33 CFR Part 117

    Bridges.

    For the reasons discussed in the preamble, the Coast Guard amends
33 CFR part 117 as follows:

PART 117--DRAWBRIDGE OPERATION REGULATIONS

0
1. The authority citation for part 117 continues to read as follows:

    Authority:  33 U.S.C. 499; 33 CFR 1.05-1; Department of Homeland
Security Delegation No. 0170.1.

0
2. Effective 8 a.m. on September 18, 2015 to 6 p.m. on May 10, 2016,
suspend Sec.  117.331 and add Sec.  117.T331 to read as follows:

Sec.  117.T331  Snake Creek.

    The draw of the Snake Creek Bridge, at Islamorada, Florida will
open on signal, except that from 8 a.m. to 6 p.m., the draw need open
only on the hour.

    Dated: September 8, 2015.
S. A. Buschman,
Rear Admiral, U.S. Coast Guard, Commander, Seventh Coast Guard
District.
[FR Doc. 2015-23537 Filed 9-17-15; 8:45 am]
BILLING CODE 9110-04-P


[Federal Register Volume 85, Number 221 (Monday, November 16, 2020)]
[Notices]
[Pages 73113-73121]
[FR Doc No: 2020-25179]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90384; File No. SR-BX-2020-032]

Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing
of Proposed Rule Change To Amend Options 4, Section 5, To Limit Short
Term Options Series Intervals Between Strikes Which are Available for
Quoting and Trading on BX

November 9, 2020.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''), \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on November 6, 2020, Nasdaq BX, Inc. (``BX'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II, and III below, which
Items have been prepared by the Exchange. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend Options 4, Section 5, ``Series of
Options Contracts Open for Trading.'' This proposal seeks to limit
Short Term Options Series intervals between strikes which are available
for quoting and trading on BX.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the 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.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend Options 4, Section 5, ``Series of
Options Contracts Open for Trading.'' Specifically, this proposal seeks
to limit the intervals between strikes for multiply listed equity
options classes within the Short Term Options Series program that have
an expiration date more than twenty-one days from the listing date.
Background
    Today, BX's listing rules within Options 4, Section 5 permits the
Exchange, after a particular class of options (call option contracts or
put option contracts relating to a specific underlying stock, Exchange-
Traded

Fund Share,\3\ or ETN \4\) has been approved for listing and trading on
the Exchange, to open for trading series of options therein. The
Exchange may list series of options for trading on a weekly,\5\ monthly
\6\ or quarterly \7\ basis. Options 4, Section 5(d) sets forth the
intervals between strike prices of series of options on individual
stocks.\8\ In addition to those intervals, the Exchange may list series
of options pursuant to the $1 Strike Price Interval Program,\9\ the
$0.50 Strike Program,\10\ the $2.50 Strike Price Program,\11\ and the
$5 Strike Program.\12\
---------------------------------------------------------------------------

    \3\ Exchange-Traded Fund Share shall include shares or other
securities that are traded on a national securities exchange and are
defined as an ``NMS stock'' under Rule 600 of Regulation NMS, and
that (i) represent interests in registered investment companies (or
series thereof) organized as open-end management investment
companies, unit investment trusts or similar entities, that hold
portfolios of securities and/or financial instruments including, but
not limited to, stock index futures contracts, options on futures,
options on securities and indexes, equity caps, collars and floors,
swap agreements, forward contracts, repurchase agreements and
reverse repurchase agreements comprising or otherwise based on or
representing investments in broad-based indexes or portfolios of
securities and/or Financial Instruments and Money Market Instruments
(the ``Money Market Instruments'') (or that hold securities in one
or more other registered investment companies that themselves hold
such portfolios of securities and/or Financial Instruments and Money
Market Instruments (ii) represent interests in a trust or similar
entity that holds a specified non-U.S. currency or currencies
deposited with the trust or similar entity when aggregated in some
specified minimum number may be surrendered to the trust by the
beneficial owner to receive the specified non-U.S. currency or
currencies and pays the beneficial owner interest and other
distributions on the deposited non-U.S. currency or currencies, if
any, declared and paid by the trust (``Currency Trust Shares''),
(iii) represent commodity pool interests principally engaged,
directly or indirectly, in holding and/or managing portfolios or
baskets of securities, commodity futures contracts, options on
commodity futures contracts, swaps, forward contracts and/or options
on physical commodities and/or non-U.S. currency (``Commodity Pool
ETFs''), (iv) represent interests in the SPDR[supreg] Gold Trust,
the iShares COMEX Gold Trust, the iShares Silver Trust, the ETFS
Gold Trust, the ETFS Silver Trust, the ETFS Palladium Trust, the
ETFS Platinum Trust or the Sprott Physical Gold Trust or (v)
represents an interest in a registered investment company
(``Investment Company'') organized as an open-end management company
or similar entity, that invests in a portfolio of securities
selected by the Investment Company's investment adviser consistent
with the Investment Company's investment objectives and policies,
which is issued in a specified aggregate minimum number in return
for a deposit of a specified portfolio of securities and/or a cash
amount with a value equal to the next determined net asset value
(``NAV''), and when aggregated in the same specified minimum number,
may be redeemed at a holder's request, which holder will be paid a
specified portfolio of securities and/or cash with a value equal to
the next determined NAV (``Managed Fund Share''); provided the
conditions within Options 4, Section 3(i)(A) and (B) are met. See
Options 4, Section 3(i).
    \4\ Securities deemed appropriate for options trading shall
include shares or other securities (``Equity Index-Linked
Securities,'' ``Commodity-Linked Securities,'' ``Currency-Linked
Securities,'' ``Fixed Income Index-Linked Securities,'' ``Futures-
Linked Securities,'' and ``Multifactor Index-Linked Securities,''
collectively known as ``Index-Linked Securities'' or ``ETNs'') that
are principally traded on a national securities exchange and an
``NMS Stock'' (as defined in Rule 600 of Regulation NMS under the
Securities Exchange Act of 1934), and represent ownership of a
security that provides for the payment at maturity, as described
within Options 4, Section 3(l)(i)(1)-(6). See Options 4, Section
3(l)(i).
    \5\ The weekly listing program is known as the Short Term
Options Series Program and is described within Supplementary
Material .03 of Options 4, Section 5.
    \6\ The Exchange will open at least one expiration month for
each class of options open for trading on the Exchange. See Options
4, Section 5(g). The monthly expirations are subject to certain
listing criteria for underlying securities described within Options
4, Section 3. Monthly listings expire the third Friday of the month.
The term ``expiration date'' when used in respect of a series of
binary options other than event options means the last day on which
the options may be automatically exercised. In the case of a series
of event options (other than credit default options or credit
default basket options) that are be automatically exercised prior to
their expiration date upon receipt by the Corporation of an event
confirmation, the expiration date is the date specified by the
listing Exchange; provided, however, that when an event confirmation
is deemed to have been received by the Corporation with respect to
such series of options, the expiration date will be accelerated to
the date on which such event confirmation is deemed to have been
received by the Corporation or such later date as the Corporation
may specify. In the case of a series of credit default options or
credit default basket options, the expiration date is the fourth
business day after the last trading day for such series as such
trading day is specified by the Exchange on which the series of
options is listed; provided, however, that when an event
confirmation is deemed to have been received by the Corporation with
respect to a series of credit default options or single payout
credit default basket options prior to the last trading day for such
series, the expiration date for options of that series will be
accelerated to the second business day following the day on which
such event confirmation is deemed to have been received by the
Corporation. ``Expiration date'' means, in respect of a series of
range options expiring prior to February 1, 2015, the Saturday
immediately following the third Friday of the expiration month of
such series, and, in respect of a series of range options expiring
on or after February 1, 2015 means the third Friday of the
expiration month of such series, or if such Friday is a day on which
the Exchange on which such series is listed is not open for
business, the preceding day on which such Exchange is open for
business. See The Options Clearing Corporation (``OCC'') By-Laws at
Section 1.
    \7\ The quarterly listing program is known as the Quarterly
Options Series Program and is described within Supplementary
Material .04 of Options 4, Section 5.
    \8\ Except as otherwise provided in the Supplementary Material
of Options 4, Section 5, the interval between strike prices of
series of options on individual stocks will be: (1) $2.50 or greater
where the strike price is $25.00 or less; (2) $5.00 or greater where
the strike price is greater than $25.00; and (3) $10.00 or greater
where the strike price is greater than $200.00.
    The interval between strike prices of series of options on
Exchange-Traded Fund Shares approved for options trading pursuant to
Section 3(i) of this Options 4 shall be fixed at a price per share
which is reasonably close to the price per share at which the
underlying security is traded in the primary market at or about the
same time such series of options is first open for trading on the
Exchange, or at such intervals as may have been established on
another options exchange prior to the initiation of trading on the
Exchange.
    Pursuant to Options 4, Section 5(e), notwithstanding any other
provision regarding the interval of strike prices of series of
options on Exchange-Traded Fund Shares in this rule, the interval of
strike prices on SPDR[supreg] S&P 500[supreg] ETF (``SPY''), iShares
Core S&P 500 ETF (``IVV''), PowerShares QQQ Trust (``QQQ''), iShares
Russell 2000 Index Fund (``IWM''), and the SPDR[supreg] Dow
Jones[supreg] Industrial Average ETF (``DIA'') options will be $1 or
greater.
    \9\ The $1 Strike Interval Program is described within
Supplementary Material .01 of Options 4, Section 5.
    \10\ The $0.50 Strike Interval Program is described within
Supplementary Material .05 of Options 4, Section 5.
    \11\ The $2.50 Strike Interval Program is described within
Supplementary Material .02 of Options 4, Section 5.
    \12\ The $5.00 Strike Interval Program is described within
Supplementary Material .06 of Options 4, Section 5.
---------------------------------------------------------------------------

    The Exchange's proposal seeks to amend the listing of weekly series
of options as proposed within new Supplementary Material .03(f) of
Options 4, Section 5, by limiting the intervals between strikes in
multiply listed equity options, excluding Exchange-Traded Fund Shares
and ETNs, that have an expiration date more than twenty-one days from
the listing date. This proposal does not amend monthly or quarterly
listing rules nor does it amend the $1 Strike Price Interval Program,
the $0.50 Strike Program, the $2.50 Strike Price Program, or the $5
Strike Program.
Short Term Options Series Program
    Today, Supplementary Material .03 of Options 4, Section 5 permits
BX to open for trading on any Thursday or Friday that is a business day
(``Short Term Option Opening Date'') series of options on an option
class that expires at the close of business on each of the next five
Fridays that are business days and are not Fridays in which monthly
options series or Quarterly Options Series expire (``Short Term Option
Expiration Dates''), provided an option class has been approved for
listing and trading on the Exchange.\13\ Today, the

Exchange may open up to thirty initial series for each option class
that participates in the Short Term Option Series Program.\14\ Further,
if the Exchange opens less than thirty (30) Short Term Option Series
for a Short Term Option Expiration Date, additional series may be
opened for trading on the Exchange when the Exchange deems it necessary
to maintain an orderly market, to meet customer demand or when the
market price of the underlying security moves substantially from the
exercise price or prices of the series already opened.\15\
---------------------------------------------------------------------------

    \13\ The Exchange may have no more than a total of five Short
Term Option Expiration Dates, not including any Monday or Wednesday
SPY Expirations as provided below. If the Exchange is not open for
business on the respective Thursday or Friday, the Short Term Option
Opening Date will be the first business day immediately prior to
that respective Thursday or Friday. Similarly, if the Exchange is
not open for business on a Friday, the Short Term Option Expiration
Date will be the first business day immediately prior to that
Friday. With respect to Wednesday SPY Expirations, the Exchange may
open for trading on any Tuesday or Wednesday that is a business day
series of options on the SPDR S&P 500 ETF Trust (SPY) to expire on
any Wednesday of the month that is a business day and is not a
Wednesday in which Quarterly Options Series expire (``Wednesday SPY
Expirations''). With respect to Monday SPY Expirations, the Exchange
may open for trading on any Friday or Monday that is a business day
series of options on the SPY to expire on any Monday of the month
that is a business day and is not a Monday in which Quarterly
Options Series expire (``Monday SPY Expirations''), provided that
Monday SPY Expirations that are listed on a Friday must be listed at
least one business week and one business day prior to the
expiration. The Exchange may list up to five consecutive Wednesday
SPY Expirations and five consecutive Monday SPY Expirations at one
time; the Exchange may have no more than a total of five Wednesday
SPY Expirations and a total of five Monday SPY Expirations. Monday
and Wednesday SPY Expirations will be subject to the provisions of
this Rule. See Supplementary Material .03 of Options 4, Section 5.
    \14\ See Supplementary Material .03 of Options 4, Section 5(c).
    \15\ See Supplementary Material .03 of Options 4, Section 5(d).
---------------------------------------------------------------------------

    The Exchange may open for trading Short Term Option Series on the
Short Term Option Opening Date that expire on the Short Term Option
Expiration Date at strike price intervals of (i) $0.50 or greater where
the strike price is less than $100, and $1 or greater where the strike
price is between $100 and $150 for all option classes that participate
in the Short Term Options Series Program; (ii) $0.50 for option classes
that trade in one dollar increments and are in the Short Term Option
Series Program; or (iii) $2.50 or greater where the strike price is
above $150. During the month prior to expiration of an option class
that is selected for the Short Term Option Series Program (``Short Term
Option''), the strike price intervals for the related non-Short Term
Option (``Related non-Short Term Option'') shall be the same as the
strike price intervals for the Short Term Option.\16\
---------------------------------------------------------------------------

    \16\ See Options 4, Section 5(e).
---------------------------------------------------------------------------

    The Exchange may select up to fifty currently listed option classes
on which Short Term Option Series may be opened on any Short Term
Option Opening Date. In addition to the fifty option class restriction,
the Exchange may also list Short Term Option Series on any option
classes that are selected by other securities exchanges that employ a
similar program under their respective rules. For each option class
eligible for participation in the Short Term Option Series Program, the
Exchange may open up to thirty Short Term Option Series for each
expiration date in that class. The Exchange may also open Short Term
Option Series that are opened by other securities exchanges in option
classes selected by such exchanges under their respective short term
option rules.\17\
---------------------------------------------------------------------------

    \17\ See Supplementary Material .03(a) of Options 4, Section 5.
---------------------------------------------------------------------------

    BX notes that listings in the weekly program comprise a significant
part of the standard listing in options markets. The below diagrams
demonstrate the percentage of weekly listings as compared to Long-Term
Option Series or LEAPs and quarterly listings in 2015 as compared to
2020. The weekly strikes increased 8.9% compound annual growth rate
(``CAGR'') from 2015 as compared to a 4.3% CAGR for standard
expirations using 3rd 2015 Friday expirations.
[GRAPHIC] [TIFF OMITTED] TN16NO20.022

[GRAPHIC] [TIFF OMITTED] TN16NO20.023

Proposal
    BX proposes to limit the intervals between strikes in options
listed as part of the Short Term Option Series Program that have an
expiration date more than twenty-one days from the listing date, by
adopting proposed Supplementary Material .03(f) of Options 4, Section 5
as well as proposed Supplementary Material .07 of Options 4, Section 5,
with respect to listing Short Term Option Series in equity options,
excluding Exchange-Traded Fund Shares and ETNs) (collectively ``Strike
Interval Proposal''). BX's Strike Interval Proposal would limit the
intervals between strikes by utilizing the table proposed within
Supplementary Material .07 of Options 4, Section 5. With the Strike
Interval Proposal, BX would limit intervals between strikes for
expiration dates of option series beyond twenty-one days utilizing the
below three-tiered table which considers both the share price and
average daily volume for the option series.\18\
---------------------------------------------------------------------------

    \18\ Additional information comparing the current listing
program to this proposal is available at: https://www.nasdaq.com/solutions/bx-options-strike-proliferation-proposal.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Share price
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                $25 to less     $75 to less    $150 to less       $500 or
                 Tier                         Average daily volume         Less than $25     than $75        than $150       than $500        greater
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.....................................  greater than 5,000..............           $0.50           $1.00           $1.00           $5.00           $5.00
2.....................................  1,000 to 5,000..................            1.00            1.00            1.00            5.00           10.00
3.....................................  0 to 1,000......................            2.50            5.00            5.00            5.00           10.00
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The Share Price would be the closing price on the primary market on
the last day of the calendar quarter. This value would be used to
derive the column from which to apply strike intervals throughout the
next calendar quarter. The Average Daily Volume would be the total
number of options contracts traded in a given security for the
applicable calendar quarter divided by the number of trading days in
the applicable calendar quarter. Beginning on the second trading day in
the first month of each calendar quarter, the Average Daily Volume
shall be calculated by utilizing data from the prior calendar quarter
based on Customer-cleared volume at OCC. For options listed on the
first trading day of a given calendar quarter, the Average Daily Volume
shall be calculated using the calendar quarter prior to the last
trading calendar quarter.\19\ In the event of a corporate action, the
Share Price of the surviving company would be utilized. These metrics
are intended to align expectations for determining which strike
intervals will be utilized. Finally, notwithstanding the limitations
imposed by Options 4, Section 5 at proposed Supplementary Material .07,
this Strike Interval Proposal does not amend the range of strikes that
may be listed pursuant to Options 4, Section 5 at Supplementary
Material .03, regarding the Short Term Option Series Program.
---------------------------------------------------------------------------

    \19\ For example, options listed as of January 4, 2021 would be
calculated on January 5, 2021 using the Average Daily Volume from
July 1, 2020 to September 30, 2020.
---------------------------------------------------------------------------

    By way of example, if the Share Price for a symbol was $142 at the
end of a calendar quarter, with an Average Daily Volume greater than
5,000, thereby, requiring strike intervals to be listed $1.00 apart,
that strike interval would apply for the calendar quarter, regardless
of whether the Share Price changed to greater than $150 during that
calendar quarter.\20\
---------------------------------------------------------------------------

    \20\ The Exchange notes that any limits on intervals imposed by
the Exchange's Rules will continue to apply. In this example, the
strikes would be in $1 intervals up to $150, which is the upper
limit imposed by Supplementary Material .03(e) of Options 4, Section
5.
---------------------------------------------------------------------------

    The proposed table within Supplementary Material .07 of Options 4,
Section 5 takes into account the notional value of a security, as well
as Average Daily Volume in the underlying stock, in order to limit the
intervals between strikes in the Short Term Options listing program.
The Exchange utilizes OCC Customer-cleared volume, as customer volume
is an appropriate proxy for demand. The OCC Customer-cleared volume
represents the majority of options volume executed on the Exchange
that, in turn, reflects the demand in the marketplace. The options
series listed on BX are intended to meet customer demand by offering an
appropriate number of strikes. Non-Customer cleared OCC volume
represents the supply side. The strike intervals for listing strikes in
certain

options are intended to remove repetitive and unnecessary strike
listings across the weekly expiries. BX's Strike Interval Proposal
seeks to reduce the number of strikes in the furthest weeklies, where
there exist wider markets and therefore lower market quality. Below are
two tables which focus on data for 10 of the most and least actively
traded symbols \21\ and demonstrate average spreads in weekly options
during the month of August 2020.
---------------------------------------------------------------------------

    \21\ The table represents stock in the following securities:
Apple, Tesla, Microsoft Corporation, Advanced Micro Devices, Inc.,
Bank of America Corp., NRG Energy Inc., Ferrari NV, Community Health
Systems Inc., Navistar International Corp, and Jabil Inc.
[GRAPHIC] [TIFF OMITTED] TN16NO20.024

    The proposed table within Supplementary Material .07 of Options 4,
Section 5 is intended to distribute strike intervals in multiply listed
equity options where there is less volume as measured by the Average
Daily Volume tiers. Therefore, the lower the Average Daily Volume, the
greater the proposed spread between strike intervals. Options classes
with higher volume contain the most liquid symbols and strikes,
therefore the finer the proposed spread between strike intervals.
Additionally, lower-priced shares have finer strike intervals than
higher-priced shares when comparing the proposed spread between strike
intervals.\22\
---------------------------------------------------------------------------

    \22\ The Exchange notes that is has discussed the proposed
strike intervals with various members. The Exchange has gathered
information regarding where trading in weeklies generally occurs to
arrive at the proposed strike intervals.
---------------------------------------------------------------------------

    Today, weeklies are available on 16% of underlying products. The
Exchange's Strike Interval Proposal curtails the density of strike
intervals listed in series of options, without reducing the classes of
options available for trading on BX. The Exchange's Strike Interval
Proposal would reduce 2% of the total number of strikes that equates to
81,000 strikes.\23\
---------------------------------------------------------------------------

    \23\ The Exchange notes that this proposal is an initial attempt
at reducing strikes and anticipates filing additional proposals to
continue reducing strikes. The above-referenced data, specifically
the percentage of underlying products and percentage of and total
number of strikes, are approximations and may vary slightly at the
time of this filing.

---------------------------------------------------------------------------

[GRAPHIC] [TIFF OMITTED] TN16NO20.025

[GRAPHIC] [TIFF OMITTED] TN16NO20.026

    The above table represents the inconsistency of demand for series
of options beyond twenty-one calendar days.
    BX's Strike Interval Proposal focuses on strikes in multiply listed
equity options, and excludes Exchange-Traded Fund Shares and ETNs, as
the majority of strikes reside within equity options.

[GRAPHIC] [TIFF OMITTED] TN16NO20.027

    While the current listing rules permit BX to list a number of
weekly strikes on its market, in an effort to encourage Market Makers
to deploy capital more efficiently, as well as improve displayed market
quality, BX's Strike Interval Proposal reduces the number of listed
weekly options. As BX's Strike Interval Proposal seeks to reduce the
number of weekly options that would be listed on its market in later
weeks, Market Makers would be required to quote in fewer weekly strikes
as a result of the Strike Interval Proposal. Specifically, the Strike
Interval Proposal aims to reduce the density of strike intervals that
would be listed in later weeks, by creating limitations for intervals
between strikes which have an expiration date more than twenty-one days
from the listing date. The table takes into account customer demand for
certain options classes, by considering both the Share Price and the
Average Daily Volume, to arrive at the manner which weekly strike
intervals may be listed. The intervals for listing strikes in equity
options is intended to remove certain strike intervals where there
exist clusters of strikes whose characteristics closely resemble one
another and, therefore, do not serve different trading needs,\24\
rendering these strikes less useful.
---------------------------------------------------------------------------

    \24\ For example, two strikes that are densely clustered may
have the same risk properties and may also be the same percentage
out-of-the money.
---------------------------------------------------------------------------

    This Strike Interval Proposal serves to respond to comments
received from industry members with respect to the increasing number of
strikes that are required to be quoted by market makers in the options
industry. BX requires Lead Market Makers and Market Makers to quote a
certain amount of time in the trading day in their assigned options
series to maintain liquidity in the market.\25\ With an increasing
number of strikes being listed across options exchanges, Market Makers
must expend their capital to ensure that they have the appropriate
infrastructure to meet their quoting obligations on all options markets
in which they are assigned in options series. The Exchange believes
that this Strike Interval Proposal would limit the intervals between
strikes, reducing the number of strikes listed on BX, and thereby allow
Lead Market Makers and Market Makers to expend their capital in the
options market in a more efficient manner. Due to this increased
efficiency, the Exchange believes that this Strike Interval Proposal
would improve overall market quality on BX by limiting the intervals
between strikes in multiply listed equity options that have an
expiration date more than twenty-one days, from the listing date.
---------------------------------------------------------------------------

    \25\ See Options 2, Sections 4(j) and 5.
---------------------------------------------------------------------------

    This Strike Interval Proposal is intended to be the first in a
series of proposals to limit the number of listed options series listed
on BX and other Nasdaq affiliated markets. The Exchange intends to
decrease the overall number of strikes listed on Nasdaq exchanges in a
methodical fashion, so that it may monitor progress and feedback from
its membership. While limiting the intervals between listed strikes is
the goal of this rule change, BX's Strike Interval Proposal is intended
to balance that goal with the needs of market participants. BX believes
that various strike intervals continue to offer market participants the
ability to select the appropriate strike interval to meet that market
participant's investment objective.
Implementation
    The Exchange intends to begin implementation of the proposed rule
change prior to March 31, 2021. The Exchange will issue an Options
Trader Alert to Participants to provide notification of the
implementation date.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b)

of the Act,\26\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\27\ 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. The Strike Proposal seeks to limit the intervals between
strikes listed in the Short Term Options Series program that have an
expiration date more than twenty-one days. While the current listing
rules permit BX to list a number of weekly strikes on its market, the
Exchange's Strike Interval Proposal removes impediments to and perfects
the mechanism of a free and open market and a national market system by
encouraging Market Makers to deploy capital more efficiently and
improving market quality overall on BX through limiting the intervals
between strikes when applying the strike interval table to multiply
listed equity options that have an expiration date more than twenty-one
days from the listing date. Also, as BX's Strike Interval Proposal
seeks to reduce the number of weekly options that would be listed on
its market in later weeks, Market Makers would be required to quote in
fewer weekly strikes as a result of the Strike Interval Proposal.
Amending BX's listing rules to limit the intervals between strikes for
multiply listed equity options that have an expiration date more than
twenty-one days causes less disruption in the market as the majority of
the volume traded in weekly options exists in options series which have
an expiration date of twenty-one days or less. The Exchange's Strike
Interval Proposal curtails the number of strike intervals listed in
series of options without reducing the number of classes of options
available for trading on BX.
---------------------------------------------------------------------------

    \26\ 15 U.S.C. 78f(b).
    \27\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Strike Interval Proposal takes into account customer demand for
certain options classes by considering both the Share Price and the
Average Daily Volume in the underlying security to arrive at the manner
in which weekly strike intervals would be listed in the later weeks for
each multiply listed equity options class. The Exchange utilizes OCC
Customer-cleared volume, as customer volume is an appropriate proxy for
demand. The OCC Customer-cleared volume represents the majority of
options volume executed on the Exchange that, in turn, reflects the
demands in the marketplace. The options series listed on BX is intended
to meet customer demand by offering an appropriate number of strikes.
Non-Customer cleared OCC volume represents the supply side.
    The Strike Interval Proposal for listing strikes in certain
multiply listed equity options is intended to remove certain strikes
where there exist clusters of strikes whose characteristics closely
resemble one another and, therefore, do not serve different trading
needs that renders the strikes less useful and thereby protects
investors and the general public by removing an abundance of
unnecessary choices for an options series, while also improving market
quality. BX's Strike Interval Proposal seeks to reduce the number of
strikes in the furthest weeklies, where there exist wider markets, and,
therefore, lower market quality. The implementation of the proposed
table is intended to spread strike intervals in multiply listed equity
options, where there is less volume that is measured by the average
daily volume tiers. Therefore, the lower the average daily volume, the
greater the proposed spread between strike intervals. Options classes
with higher volume contain the most liquid symbols and strikes,
therefore the finer the proposed spread between strike intervals.
Additionally, lower-priced shares have finer strike intervals than
higher-priced shares when comparing the proposed spread between strike
intervals.\28\
---------------------------------------------------------------------------

    \28\ The Exchange notes that is has discussed the proposed
strike intervals with various members. The Exchange has gathered
information regarding where trading in weeklies generally occurs to
arrive at the proposed strike intervals.
---------------------------------------------------------------------------

    Beginning on the second trading day in the first month of each
calendar quarter, the Average Daily Volume shall be calculated by
utilizing data from the prior calendar quarter based on OCC Customer-
cleared volume. Utilizing the second trading day allows the Exchange to
accumulate data regarding OCC Customer-cleared volume from the entire
prior quarter. Beginning on the second trading day would allow trades
executed on the last day of the previous calendar quarter to have
settled \29\ and be accounted for in the calculation of Average Daily
Volume. Utilizing the previous three months is appropriate because this
time period would help reduce the impact of unusual trading activity as
a result of unique market events, such as a corporate action (i.e., it
would result in a more reliable measure of average daily trading volume
than would a shorter period).
---------------------------------------------------------------------------

    \29\ Options contracts settle one business day after trade date.
Strike listing determinations are made the day prior to the start of
trading in each series.
---------------------------------------------------------------------------

    This Strike Interval Proposal serves to respond to comments
received from industry members with respect to the increasing number of
strikes that are required to be quoted by market makers in the options
industry. Today, BX requires Lead Market Makers and Market Makers to
quote a certain amount of time in the trading day in their assigned due
options series to maintain liquidity in the market.\30\ With an
increasing number of strikes due to tighter intervals being listed
across options exchanges, Market Makers must expend their capital to
ensure that they have the appropriate infrastructure to meet their
quoting obligations on all options markets in which they are assigned
in options series. The Exchange believes that this Strike Interval
Proposal would limit the intervals between strikes listed on BX and
thereby allow Lead Market Makers and Market Makers to expend their
capital in the options market in a more efficient manner that removes
impediments to and perfect the mechanism of a free and open market and
a national market system. The Exchange also believes that this Strike
Interval Proposal would improve overall market quality on BX for the
protection of investors and the general public by limiting the
intervals between strikes when applying the strike interval table to
multiply listed equity options which have an expiration date more than
twenty-one days from the listing date.
---------------------------------------------------------------------------

    \30\ See Options 2, Sections 4(j) and 5.
---------------------------------------------------------------------------

    This Strike Interval Proposal is intended to be the first in a
series of proposals to limit the number of listed options series listed
on BX and other Nasdaq affiliated markets. The Exchange intends to
decrease the overall number of strikes listed on Nasdaq exchanges in a
methodical fashion in order that it may monitor progress and feedback
from its membership. While limiting the intervals between strikes
listed is the goal of this rule change, BX's Strike Interval Proposal
is intended to balance that goal with the needs of market participants.
The Exchange believes that varied strike intervals continue to offer
market participants the ability to select the appropriate strike
interval to meet that market participant's investment objective.

B. Self-Regulatory Organization's 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. The Strike Interval Proposal
limits the number of Short Term Options Series strike intervals
available for quoting and

trading on BX for all BX Participants. While the current listing rules
permit BX to list a number of weekly strikes on its market, in an
effort to encourage Market Makers to deploy capital more efficiently,
as well as improve displayed market quality, BX's Strike Interval
Proposal seeks to reduce the number of weekly options that would be
listed on its market in later weeks, without reducing the number of
series or classes of options available for trading on BX. As BX's
Strike Interval Proposal seeks to reduce the number of weekly options
that would be listed on its market in later weeks, Market Makers would
be required to quote in fewer weekly strikes as a result of the Strike
Interval Proposal.
    The Exchange's Strike Interval Proposal, which is intended to
decrease the overall number of strikes listed on BX, does not impose an
undue burden on intra-market competition as all Participants may only
transact options in the strike intervals listed for trading on BX.
While limiting the intervals of strikes listed on BX is the goal of
this Strike Interval Proposal, the goal continues to balance the needs
of market participants by continuing to offer a number of strikes to
meet a market participant's investment objective.
    The Exchange's Strike Interval Proposal does not impose an undue
burden on inter-market competition as this Strike Interval Proposal
does not impact the listings available at another self-regulatory
organization. In fact, BX is proposing to list a smaller amount of
weekly equity options in an effort to curtail the increasing number of
strikes that are required to be quoted by market makers in the options
industry. Other options markets may choose to replicate the Exchange's
Strike Interval Proposal and, thereby, further decrease the overall
number of strikes within the options industry.

C. Self-Regulatory Organization's 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

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission shall: (a) By order approve
or disapprove such proposed rule change, or (b) institute proceedings
to determine whether the proposed rule change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-BX-2020-032 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-BX-2020-032. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549-1090 on official business days between the hours of 10:00 a.m.
and 3:00 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. All
comments received will be posted without change. Persons submitting
comments are cautioned that we do not redact or edit personal
identifying information from comment submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-BX-2020-032, and should be
submitted on or before December 7, 2020.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\31\
---------------------------------------------------------------------------

    \31\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-25179 Filed 11-13-20; 8:45 am]
BILLING CODE 8011-01-P