(a) General. All transactions will automatically clear through the Participant's guarantor at the time of the trade. For each transaction in which a Participant participates, the Participant may indicate, through post-trade allocation,
any Options Clearing Corporation ("OCC") number of a Clearing Participant through which a transaction will be cleared ("Give Up"), provided the Clearing Participant has not elected to Opt In, as defined and described in paragraph (b) below, and restrict one
or more of its OCC number(s) ("Restricted OCC Number"). A Participant may Give Up a Restricted OCC Number provided the Participant has written authorization as described in paragraph (b)(ii) below ("Authorized Participant").
(b) Opt In. Clearing Participants may request the Exchange restrict one or more of their OCC clearing numbers ("Opt In") as described in subparagraph (i) below. If a Clearing Participant Opts In, the Exchange will require written
authorization from the Clearing Participant permitting a Participant to Give Up a Clearing Participant's Restricted OCC Number. An Opt In would remain in effect until the Clearing Participant terminates the Opt In as described in subparagraph (iii) below.
If a Clearing Participant does not Opt In, that Clearing Participant's OCC number would be subject to Give Up by any Participant.
(i) Clearing Participant Process to Opt In. A Clearing Participant may Opt In by sending a completed "Clearing Member Restriction Form" listing all Restricted OCC Numbers and Authorized Participants. A Clearing Participant
may elect to restrict one or more OCC clearing numbers that are registered in its name at OCC. The Clearing Participant would be required to submit the Clearing Member Restriction Form to the Exchange's Membership Department as described on the form. Once
submitted, the Exchange requires ninety days before a Restricted OCC Number is effective within the System.
(ii) Participant Give Up Process for Restricted OCC Numbers. A Participant desiring to Give Up a Restricted OCC Number must become an Authorized Participant. The Clearing Participant will be required to authorize a Participant
as described in subparagraph (i) or (iii), unless the Restricted OCC Number is already subject to a Letter of Guarantee that the Participant is a party to, as set forth in paragraph (d) below.
(iii) Amendments to Authorized Participants or Restricted OCC Numbers. A Clearing Participant may amend its Authorized Participants or Restricted OCC Numbers by submitting a new Clearing Member Restriction Form to the Exchange's
Membership Department indicating the amendment as described on the form. Once a Restricted OCC Number is effective within the System pursuant to paragraph (i) above, the Exchange may permit the Clearing Participant to authorize, or remove authorization for,
a Participant to Give Up the Restricted OCC Number intra-day only in unusual circumstances, and on the next business day in all regular circumstances. The Exchange will promptly notify Participants if they are no longer authorized to Give Up a Clearing Participant's
Restricted OCC Number. If a Clearing Participant removes a Restricted OCC Number, any Participant may Give Up that OCC clearing number once the removal has become effective on or before the next business day.
(c) System. The System will not allow an unauthorized Give Up with a Restricted OCC Number to be submitted at the firm mnemonic level at the point of order entry.
(d) Letter of Guarantee. A clearing arrangement subject to a Letter of Guarantee would immediately permit the Give Up of a Restricted OCC Number by the Participant that is party to the arrangement.
(e) An intentional misuse of this rule is impermissible, and may be treated as a violation of General 9, Section 1 and Options 9, Section 2.
Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098).
(a) All options transactions effected on NOM shall be submitted for clearance to the Clearing Corporation, and all such transactions shall be subject to the Rules of the Clearing Corporation. Every Clearing Participant shall be responsible
for the clearance of NOM Transactions of such Clearing Participant and of each Options Participant that gives up such Clearing Participant's name pursuant to a Letter of Guarantee, written authorization to become an Authorized Participant under Options 6,
Section 1, or other authorization given by such Clearing Participant to such Options Participant, which authorization must be submitted to Nasdaq.
(b) On each business day at or prior to such time as may be prescribed by the Clearing Corporation, NOM shall furnish the Clearing Corporation a report of each Clearing Participant's matched trades.
Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098).
(a) Required of Each Options Participant. No Options Participant shall make any transactions on NOM unless a Letter of Guarantee has been issued for such Participant by a Clearing Participant and filed with Nasdaq Regulation,
and unless such Letter of Guarantee has not been revoked pursuant to paragraph (c) of this Rule.
(b) Terms of Letter of Guarantee. A Letter of Guarantee shall provide that the issuing Clearing Participant accepts financial responsibilities for all NOM Transactions made by the guaranteed Participant.
(c) Revocation of Letter of Guarantee. A Letter of Guarantee filed with Nasdaq Regulation shall remain in effect until a written notice of revocation has been filed with Nasdaq Regulation by the Guarantor Clearing Participant.
A revocation shall in no way relieve a Clearing Participant of responsibility for transactions guaranteed prior to the effective date of such revocation.
Adopted Dec. 6, 2019 (SR-NASDAQ-2019-098).
(a) Permissible Transfers. Existing positions in options listed on the Exchange of a Participant or non-Participant that are to be transferred on, from, or to the books of a Clearing Participant may be transferred off the Exchange if the transfer
involves on or more of the following events:
(1) pursuant to General 9, Section 1, an adjustment or transfer in connection with the correction of a bona fide error in the recording of a transaction or the transferring of a position to another account,
provided that the original trade documentation confirms the error;
(2) the transfer of positions from one account to another account where no change in ownership is involved (i.e., accounts of the same Person, provided the accounts are not in separate aggregation units
or otherwise subject to information barrier or account segregation requirements;
(3) the consolidation of accounts where no change in ownership is involved;
(4) a merger, acquisition, consolidation, or similar non-recurring transaction for a Person;
(5) the dissolution of a joint account in which the remaining Member assumes the positions of the joint account;
(6) the dissolution of a corporation or partnership in which a former nominee of the corporation or partnership assumes the positions;
(7) positions transferred as part of a Participant's capital contribution to a new joint account, partnership, or corporation;
(8) the donation of positions to a not-for-profit corporation;
(9) the transfer of positions to a minor under the Uniform Gifts to Minors Act; or
(10) the transfer of positions through operation of law from death, bankruptcy, or otherwise.
For purposes of this rule, the term "Person" shall be defined as an individual, partnership (general or limited), joint stock company, corporation, limited liability company, trust or unincorporated organization, or any governmental entity or agency or political
subdivision thereof.
(b) Netting. Unless otherwise permitted by paragraph (f), when effecting a transfer pursuant to paragraph (a), no position may net against another position ("netting"), and no position transfer may result in preferential margin or haircut treatment.
(c) Transfer Price. The transfer price, to the extent it is consistent with applicable laws, rules, and regulations, including rules of other self-regulatory organizations, and tax and accounting rules and regulations, at which a transfer is effected
may be:
(1) the original trade prices of the positions that appear on the books of the transferring Clearing Member, in which case the records of the transfer must indicate the original trade dates for the positions;
provided, transfers to correct errors under subparagraph (a)(1) must be transferred at the correct original trade prices;
(2) mark-to-market prices of the positions at the close of trading on the transfer date;
(3) mark-to-market prices of the positions at the close of trading on the trade date prior to the transfer date; or
(4) the then-current market price of the positions at the time the transfer is effected.
(d) Prior Written Notice. A Member(s) and its Clearing Participant(s) (to the extent that the Participant is not self-clearing) must submit to the Exchange, in a manner determined by the Exchange, written notice prior to effecting a transfer from
or to the account(s) of a Participant(s), except that notification is not required for transfers effected pursuant to subparagraph (a)(1) or (a)(2) of this Rule.
(1) The notice must indicate (A) the Exchange-listed options positions to be transferred, (B) the nature of the transaction, (C) the enumerated provision(s) under paragraph (a) pursuant to which the
positions are being transferred, (D) the name of the counterparty(ies), (E) the anticipated transfer date, (F) the method for determining the transfer price under paragraph (c) above, and (G) any other information requested by the Exchange.
(2) Receipt of notice of a transfer does not constitute a determination by the Exchange that the transfer was effected or reported in conformity with the requirements of this Rule. Notwithstanding submission
of written notice to Exchange, Participants and Clearing Participants that effect transfers that do not conform to the requirements of this Rule will be subject to appropriate disciplinary action in accordance with the Rules.
(e) Records. Each Participant and each Clearing Participant that is a party to a transfer must make and retain records of the information provided in the notice to the Exchange pursuant to subparagraph (d)(1), as well as information on (1) the actual
Exchange-listed options transferred; (2) the actual transfer date; and (3) the actual transfer price (and the original trade dates, if applicable). The Exchange may also request the Participant Holder or Clearing Participant to provide other information.
(f) Presidential Exemptions. In addition to the exemptions set forth in paragraph (a) of this Rule, the Exchange Chief Executive Officer or President (or senior-level designee) may grant an exemption from the requirement of this Rule, on his or her
own motion or upon application of the Participant (with respect to the Participant's positions) or a Clearing Member (with respect to positions carried and cleared by the Clearing Members), when, in the judgment of the Chief Executive Officer or the President
or his or her designee, allowing the transfer is necessary or appropriate for the maintenance of a fair and orderly market and the protection of investors and is in the public interest, including due to unusual or extraordinary circumstances, such as the possibility
that the market value of the Person's positions will be compromised by having to comply with the requirement to trade on the Exchange pursuant to the normal auction process or when, in the judgment of the Chief Executive Officer, President or his or her designee,
market conditions make trading on the Exchange impractical.
(g) Routine, Recurring Transfers. The transfer procedure set forth in this Rule is intended to facilitate non-routine, nonrecurring movements of positions and is not to be used repeatedly or routinely, except for transfers between accounts of the
same Person pursuant to subparagraph (a)(2). The transfer procedure may not be used in circumvention of the normal auction process.
(h) Exchange-Listed Options. The transfer procedure set forth in this Rule is only applicable to positions in options listed on the Exchange. Transfers of positions in Exchange-listed options may also be subject to applicable laws, rules, and regulations,
including rules of other self-regulatory organizations. Transfers of non-Exchange listed options and other financial instruments are not governed by this Rule.
Adopted Dec. 17, 2019 (SR-NASDAQ-2019-097); amended April 14, 2020 (SR-NASDAQ-2020-016); amended August 6, 2020 (SR-NASDAQ-2020-050).
(a) Existing positions in options listed on the Exchange of a Participant or non-Participant (including an affiliate of a Participant) may be transferred on, from, or to the books of a Clearing Participant off the Exchange if the transfer establishes a net
reduction of riskweighted assets attributable to the Participant or non-Participant's options positions (an "RWA Transfer"). For purposes of this rule, the term "Person" shall be defined as an individual, partnership (general or limited), joint stock company,
corporation, limited liability company, trust or unincorporated organization, or any governmental entity or agency or political subdivision thereof.
(1) RWA Transfers include, but are not limited to: (a) a transfer of options positions from Clearing Corporation member A to Clearing Corporation member B that net (offset) with positions held at Clearing
Corporation member B, and thus closes all or part of those positions, and (b) a transfer of positions from a bankaffiliated Clearing Corporation member to a non-bank-affiliated Clearing Corporation member.
(2) RWA Transfers may occur on a routine, recurring basis.
(3) RWA Transfers may result in the netting of positions.
(4) No RWA Transfer may result in preferential margin or haircut treatment.
(5) No RWA Transfer may result in a change in ownership (i.e., an RWA transfer must occur between accounts of the same Person).
(6) No prior written notice to the Exchange is required for RWA Transfers.
(7) Off-exchange transfers of positions in Exchange-listed options may be subject to applicable laws, rules, and regulations, including rules of other self-regulatory organizations. Transfers of non-Exchange
listed options and other financial instruments are not governed by this Rule.
Adopted Dec. 17, 2019 (SR-NASDAQ-2019-097).