Notice2021-21487
Self-Regulatory Organizations; Nasdaq PHLX LLC; Order Approving a Proposed Rule Change To Permit Monday and Wednesday Expirations for Options Listed Pursuant to the Short Term Options Program on the iShares Russell 2000 ETF (IWM)
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
October 4, 2021
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 86 Issue 189 (Monday, October 4, 2021)</title>
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[Federal Register Volume 86, Number 189 (Monday, October 4, 2021)]
[Notices]
[Pages 54749-54750]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-21487]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93157; File No. SR-Phlx-2021-43]
Self-Regulatory Organizations; Nasdaq PHLX LLC; Order Approving a
Proposed Rule Change To Permit Monday and Wednesday Expirations for
Options Listed Pursuant to the Short Term Options Program on the
iShares Russell 2000 ETF (IWM)
September 28, 2021.
I. Introduction
On August 6, 2021, Nasdaq PHLX LLC (``Phlx'' or ``Exchange'') filed
with the Securities and Exchange Commission (``Commission''), pursuant
to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to
amend Phlx Options 4, Section 5 at Supplementary Material .03 to permit
Monday and Wednesday expirations for options listed pursuant to the
Short Term Option Series Program (``Program'') on the iShares Russell
2000 ETF (``IWM''). The proposed rule change was published for comment
in the Federal Register on August 18, 2021.\3\ The Commission received
comment on the proposal.\4\ This order approves the proposed rule
change.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 92655 (August 12,
2021), 86 FR 46304 (``Notice'').
\4\ Comment on the proposed rule change can be found at: <a href="https://www.sec.gov/comments/sr-phlx-2021-43/srphlx202143.htm">https://www.sec.gov/comments/sr-phlx-2021-43/srphlx202143.htm</a>.
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II. Description of the Proposal
Under the terms of the current Program, after an option class has
been approved for listing and trading on the Exchange, the Exchange may
open for trading, on any Thursday or Friday that is a business day,
series of options on that class that expire on each of the next five
consecutive Fridays that are business days,\5\ provided that such
Friday does not occur in the same week in which monthly options series
on the same class expire or is not a Friday on which Quarterly Options
Series on the same class expire.\6\ If the Exchange is not open for
business on the Friday of the following business week, the series will
expire on the first business day immediately prior to that Friday.\7\
In addition, the Exchange may open for trading, on any Friday or Monday
that is a business day, series of options on the SPDR S&P 500 ETF Trust
(``SPY'') and Invesco QQQ Trust Series (``QQQ'') ETF Trust to expire on
any Monday of the month that is a business day and is not a Monday in
which Quarterly Options Series expire, provided that expirations that
are listed on a Friday must be listed at least one business week and
one business day prior to the expiration.\8\ The Exchange also may open
for trading, on any Tuesday or Wednesday that is a business day, series
of options on SPY and QQQ to expire on any Wednesday of the month that
is a business day and is not a Wednesday in which Quarterly Options
Series expire.\9\
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\5\ See Supplementary Material .03 to Options 4, Section 5.
\6\ Id.
\7\ Id.
\8\ Id.
\9\ Id.
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The Exchange proposes to expand the Program to permit Phlx to open
for trading, on any Monday or Friday that is a business day, series of
options on IWM that expire on any Monday of the month that is a
business day and is not
[[Page 54750]]
a Monday in which Quarterly Options Series on the same class expire
(``Monday IWM Expirations''). In the case of a series that is listed on
a Friday and expires on a Monday, it must be listed at least one
business week and one business day prior to that Monday expiration. If
the Monday IWM Expiration falls on a Monday that is not a business day,
the series shall expire on the first business day immediately following
that Monday.
Similarly, the Exchange also proposes to expand the Program to
permit Phlx to open for trading, on any Tuesday or Wednesday that is a
business day, series of options on IWM to expire on any Wednesday of
the month that is a business day and is not a Wednesday in which
Quarterly Options Series on the same class expire (``Wednesday IWM
Expirations''). If the Wednesday IWM Expiration falls on a Wednesday
that is not a business day, the series shall expire on the first
business day immediately prior to that Wednesday.
In addition, the Exchange proposes to amend Supplementary Material
.03(b) to Options 4, Section 5, to state that it may list up to five
consecutive Monday IWM Expirations at one time and up to five
consecutive Wednesday IWM Expirations at one time, and that there may
be no more than a total of five Monday IWM Expirations and no more than
a total of five Wednesday IWM Expirations.\10\ The Exchange also
proposes to amend Supplementary Material .03(b) to Options 4, Section 5
to permit Monday IWM Expirations and Wednesday IWM Expirations to
expire in the same week in which monthly options series on the same
class expire. Otherwise, Monday IWM Expirations and Wednesday IWM
Expirations will be subject to the same rules as standard Short Term
Option Series.\11\
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\10\ The Exchange also proposes a non-substantive technical
change to the punctuation after the title ``Short Term Options
Series Program'' within Supplementary Material .03 to Options 4,
Section 5.
\11\ For example, the Monday IWM Expirations and Wednesday IWM
Expirations would be subject to the same series limitations and
strike interval rules as standard Short Term Option Series. See
Notice, supra note 3, at 46305.
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III. Discussion and Commission's Findings
The Commission has carefully reviewed the proposed rule change and
finds that it is consistent with the requirements of the Act and the
rules and regulations thereunder applicable to a national securities
exchange and, in particular, the requirements of Section 6(b) of the
Act.\12\ Specifically, the Commission finds that the proposal is
consistent with the requirements of Sections 6(b)(5) of the Act,\13\
which requires, among other things, that a national securities exchange
have rules designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, 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.
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\12\ 15 U.S.C. 78f. In approving this proposed rule change, the
Commission has considered the proposed rule change's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
\13\ 15 U.S.C. 78f(b)(5).
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One commenter expressed support for the proposal, stating that it
permits market participants ``to manage a more tailored and cost
effective hedge for a specific event date'' \14\ and asserting that the
demand for Monday and Wednesday expirations on SPY and QQQ indicates
their utility for market participants.\15\ The Commission believes that
the proposed rule change may provide the investing public and other
market participants more flexibility to closely tailor their investment
and hedging decisions in IWM options, thus allowing them to better
manage their risk exposure. The Commission notes that the proposed rule
change is also similar to the Exchange's existing rules permitting the
listing and trading of Monday and Wednesday expirations on SPY and
QQQ.\16\
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\14\ See Letter from Michael Golding, Head of Trading, Optiver
US LLC, to Vanessa Countryman, Secretary, Commission, dated
September 8, 2021, at 1.
\15\ See id., at 2.
\16\ See Supplementary Material .03 to Options 4, Section 5.
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In approving the proposal, the Commission notes that the Exchange
has represented that it has an adequate surveillance program in place
to detect manipulative trading in Monday IWM Expirations and Wednesday
IWM Expirations.\17\ The Exchange further states that it has the
necessary systems capacity to support the new options series.\18\
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\17\ See Notice, supra note 3, at 46305-06.
\18\ Id.
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IV. Conclusion
It is therefore ordered that pursuant to Section 19(b)(2) of the
Act \19\ that the proposed rule change (SR-Phlx-2021-43) be, and hereby
is, approved.
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\19\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
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\20\ 17 CFR 200.300-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-21487 Filed 10-1-21; 8:45 am]
BILLING CODE 8011-01-P
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