(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).