August 5, 2025

Ms. Vanessa Countryman
Secretary
U.S. Securities and Exchange Commission
100 F Street NE
Washington, D.C. 20549-1090

RE: Nasdaq ISE, LLC, Notice of Filing of Proposed Rule Change to Amend the Short Term Option Series Program to List Qualifying Securities

Dear Ms. Countryman:

The Securities Industry and Financial Markets Association (“SIFMA”)¹ appreciates the opportunity to submit this letter to the Securities and Exchange Commission (the “Commission”) regarding the proposal by Nasdaq ISE (“Nasdaq” or the “Exchange”) to amend its Short Term Option Series Program rules to permit the listing of up to two Monday and Wednesday expirations for options on individual stocks or Exchange-Traded Fund (“ETF”) Shares that meet certain eligibility thresholds (the “Proposal”).² The new Monday and Wednesday expirations will expand investors’ ability to trade options on individual stocks on the date of expiration beyond the current weekly expirations on Fridays. Broker-dealers employ position tracking and risk management techniques to address the potential financial and operational risks to investors, broker-dealers, and the markets associated with post-close price moves in individual stocks on the date of expiration.³ As further discussed below, SIFMA generally supports the Proposal and recommends that Nasdaq consider listing Monday and Wednesday expirations in one or two individual securities initially to allow it reasonable time to assess and analyze the impact the trading of such options has on customers and the listed options markets before expanding Monday and Wednesday expirations to additional stocks. This sensible approach to eventual broader adoption of these products also will provide broker-dealers with sufficient time to enhance and scale their risk management processes to handle the trading activity in these products.

Executive Summary

• There are financial and operational risks associated with additional expirations on individual stocks—particularly arising from post-close price movements—and broker-dealers and other market participants will need time to evaluate and potentially enhance and scale their risk management processes to account for the expected increase in trading activity on expiration date.
• SIFMA generally supports the Proposal and recommends that Nasdaq take a thoughtful approach by initially listing new Monday and Wednesday expirations on one or two individual securities and adding additional names after a reasonable evaluation period.
• The Commission should evaluate the sufficiency of firm capital and margin requirements in connection with expected trading activity in the new expirations, including by consulting with other regulators and clearing organizations.

Nasdaq’s Proposal

If approved, Nasdaq’s Proposal will permit certain “Qualifying Securities” to list expirations on each Monday and Wednesday for up to two weeks in the future, subject to certain conditions.⁴ Monday and Wednesday expirations in these securities will be in addition to the current weekly expirations in options on individual securities, which take place on most Fridays.

As discussed in the Proposal, in addition to Friday expirations for single stocks, there are options on ETFs that expire every day of the week.⁵ These broad-based ETFs are priced based on the weighting of a large number of securities such that price movements in a single security included in the ETF have a much smaller impact on the price of the ETF’s shares. Certain exchanges also list weekly expirations for index options, but unlike index options, which settle via cash delivery, options based on single stocks settle via physical delivery of the underlying security. For these reasons, daily single-stock options likely will require broker-dealers to enhance existing risk management procedures and controls to address scenarios when the price of the underlying security at the cut-off time for submitting exercise notices for an option (5:30 p.m. ET) may differ from the price of the underlying security at the close of the market (4:00 p.m. ET) when the option is designated for automatic exercise under Options Clearing Corporation (“OCC”) rules (i.e., the option is at least $.01 in-the-money (“ITM”) at that close time) or not so designated (i.e., the option is out-of-the-money (“OTM”) at that close time and therefore would not be automatically exercised). Post-close price changes could cause options positions to be exercised and assigned based on the 4:00 p.m. ET closing price where the resulting positions in the underlying securities are immediately unprofitable (or profitable) based on the underlying price of the security at 5:30 p.m. ET.

1. SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s one million employees, we advocate on legislation, regulation and business policy affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit http://www.sifma.org. [↩]
2. Release No. 34-103048, File No. SR-ISE-2025-15 (May 15, 2025), 90 FR 21805 (May 21, 2025). On July 10, 2025, the Commission published notice that Nasdaq submitted Amendment No. 1 to the Proposal. Release No. 34-103434 (July 10, 2025), 90 FR 31716 (July 15, 2025) (the “Amended Proposal”). [↩]
3. The Proposal notes that Nasdaq ISE Options 4, Section 5 is incorporated into the options rules of all five of Nasdaq’s affiliated options exchanges, Nasdaq, Phlx, BX, GEMX, and MRX. Therefore, the Proposal also will apply to those markets. [↩]
4. “Qualifying Securities” is a defined term based on minimum thresholds described in the Proposal. See Proposal, 90 FR at 21806. [↩]
5. Id. [↩]