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Notice2022-00156

Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Adopt a New Options 4A, Sections 4 and 14, Related to Index Options, and Amend Other Phlx Rules

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Published

January 10, 2022

Issuing agencies

Securities and Exchange Commission

Full Text

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<title>Federal Register, Volume 87 Issue 6 (Monday, January 10, 2022)</title>
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[Federal Register Volume 87, Number 6 (Monday, January 10, 2022)]
[Notices]
[Pages 1238-1246]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-00156]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93898; File No. SR-Phlx-2021-76]

Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Adopt a New
Options 4A, Sections 4 and 14, Related to Index Options, and Amend
Other Phlx Rules

January 4, 2022.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the

[[Page 1239]]

``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 23, 2021, Nasdaq PHLX LLC (``Phlx'' or ``Exchange'') filed
with the Securities and Exchange Commission (the ``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the self-regulatory organization. The Commission
is publishing this notice to solicit comments on the proposed rule
change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

The Exchange proposes to amend Phlx Rules at Options 3, Section 1,
Hours of Business; Options 4A, Section 2, Definitions and Section 12,
Terms of Index Options Contracts. The Exchange also proposes to adopt
new Options 4A, Sections 4 and 14, which are currently reserved and
amend Options 8, Section 9 Trading Floor Admittance. Finally, the
Exchange proposes to make technical amendments to various rules within
Options 7 and Options 8.
The text of the proposed rule change is available on the Exchange's
website at <a href="https://listingcenter.nasdaq.com/rulebook/phlx/rules">https://listingcenter.nasdaq.com/rulebook/phlx/rules</a>, at the
principal office of the Exchange, and at the Commission's Public
Reference Room.

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 Phlx Rules at Options 3, Section 1,
Hours of Business; Options 4A, Section 2, Definitions and Section 12,
Terms of Index Options Contracts. The Exchange also proposes to adopt
new Options 4A, Sections 4 and 14, which are currently reserved and
amend Options 8, Section 9 Trading Floor Admittance. Finally, the
Exchange proposes to make technical amendments to various rules within
Options 7 and Options 8. Each change is described below.
Hours of Business
The Exchange proposes to state within new Options 3, Section 1(a),
``General 3, Rule 1030 governs the days the Exchange will be open for
business. This rule will govern the hours of such days during which
transactions may be made on the Exchange.'' Phlx recently filed to
establish General 3, Section 1030.\3\ This proposed text will make
clear that while General 3, Section 1030 governs the days the Exchange
will be open for business, Options 3, Section 1 will describe Phlx's
trading hours by product.
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\3\ See Securities Exchange Act Release No. 93674 (November 29,
2021), 86 FR 68711 (December 3, 2021) (SR-Phlx-2021-69) Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To
Establish Juneteenth National Independence Day as an Exchange
Holiday and Give the Exchange the Authority To Halt or Suspend
Trading or Close Exchange Facilities for Certain Unanticipated
Closures). This rule memorialized all current Exchange holidays and
added a provision to permit the Exchange the authority to halt or
suspend trading or close Exchange facilities for certain
unanticipated closures.
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The Exchange proposes to relocate rule text currently within
Options 3, Section 1(a), concerning Exchange-Traded Fund shares, into
new Options 3, Section 1(b). The Exchange modified the rule text to
state, ``Options on any series of Exchange-Traded Fund Shares, as
defined in Options 4, Section 3(h), so designated by the Exchange,
options on exchange-traded notes including Index-Linked Securities, as
defined in Options 4, Section 3(k)(1), and options on Alpha Indexes, as
defined in Options 4A, Section 3(f), may be traded on the Exchange
until 4:15 P.M. Eastern Time each business day.'' The modified rule
text provides citations within Options 4A to Exchange-Traded Fund
Shares, Index-Linked Securities, and Alpha Indexes.
Next, the Exchange proposes to relocate rule text currently within
Options 3, Section 1(a), concerning broad-based indexes, into new
Options 3, Section 1(c). The Exchange modified the rule text to state,
``Options on any series of Exchange-Traded Fund Shares, as defined in
Options 4, Section 3(h), so designated by the Exchange, options on
exchange-traded notes including Index-Linked Securities, as defined in
Options 4, Section 3(k)(1), and options on Alpha Indexes, as defined in
Options 4A, Section 3(f), may be traded on the Exchange until 4:15 P.M.
Eastern Time each business day.'' The modified rule text amends ``shall
freely trade'' to ``may be traded'' and adds new rule text to account
for p.m.-settled products \4\ and the recently approved Nasdaq-100
Volatility Index Options.\5\ The new rule text provides, ``except that
on the last trading day, transactions in expiring p.m.-settled broad-
based index options and the Nasdaq-100 Volatility Index Options may be
effected on the Exchange between the hours of 9:30 a.m. (Eastern time)
and 4:00 p.m. (Eastern time).'' The hours noted within proposed Options
3, Section 1(c) reflect the current hours for p.m.-settled products and
the hours for Nasdaq-100 Volatility Index Options, as noted within the
approval order for that product.\6\
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\4\ Options 4A, Section 12 includes p.m.-settled products. P.M.-
settled products currently trade until 4:15. See Options 4A, Section
12(b)(5)(D) and Supplementary Material .01 to Options 4A, Section 12
respectively describing the Non-Standard Expirations and Nasdaq 100
Micro Index Options currently listed on Phlx.
\5\ See Securities Exchange Act Release No. 91781 (May 5, 2021),
86 FR 25918 (May 11, 2021) (SR-PHLX-2020-41) (Notice of Filing of
Amendment Nos. 1 and 2 and Order Granting Accelerated Approval of a
Proposed Rule Change, as Modified by Amendment Nos. 1 and 2, To List
and Trade Options on a Nasdaq-100 Volatility Index). The Approval
Order for the VOLQ product provides the 4:00 p.m. timeframe. This
product is operative and not yet effective.
\6\ See note 5 above.
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The Exchange proposes to relocate rule text currently within
Options 3, Section 1(a), concerning foreign currency options, into new
Options 3, Section 1(d). The Exchange modified the rule text to state,
``Except under unusual conditions as may be determined by the Board (or
the Exchange official or officials designated by the Board) foreign
currency option trading sessions shall be conducted at such times as
the Board of Directors shall specify between 6:00 P.M. Eastern Time
Sundays and 3:00. P.M. Eastern Time Fridays, provided that U.S. dollar-
settled foreign currency options shall trade during the same hours as
narrow-based index options.'' The modified rule text removes the
phrase, ``The Board of Directors has resolved that'' as this rule text
is unnecessary. Of note, today, foreign currencies trade from 9:30 a.m.
to 4:00 p.m. the same as narrow-based indexes.
Proposed new Options 3, Section 1(e) memorializes the current hours
for sector indexes that are currently listed on Phlx. The Exchange
proposes to provide, ``Options on a sector index as provided for within
Options 4A, Section 12 may be traded on the Exchange until 4:00 p.m.
each business day.'' This rule text will account for sector indexes,
which are not currently mentioned within Options 3, Section 1. Adding

[[Page 1240]]

sector index hours to Options 3, Section 1 will provide additional
transparency to the rule.
The Exchange proposes to relocate the first two sentences of
current Options 3, Section 1(a), into current Options 8, Section 9,
Trading Floor Admittance, with the exception of the phrase within
``Except as otherwise ordered by the Board of Directors.'' Any future
amendments to this rule would be filed with the Commission, therefore,
this phrase is being removed. Because the first two sentences of
current Options 3, Section 1(a) relate to the Trading Floor, the
Exchange proposes to relocate this rule text within the Options 8 Rules
related to the Trading Floor. The relocated rule text would be placed
within new Options 8, Section 9(a). The Exchange also proposes to re-
letter current Options 8, Section 9 paragraph ``(a)'' as ``(b).''
Finally, the Exchange proposes to amend the title of Options 8, Section
9 to ``Trading Floor Hours of Business and Admittance'' which is a more
descriptive title.
The remainder of the rule text within current Options 3, Section
1(a) is being deleted as unnecessary.\7\ Current Options 3, Section
1(b) would become Supplementary Material .01 to Options 3, Section 1,
with a header added to conform to the Rulebook style. The Exchange
believes that these proposed amendments will bring greater clarity to
the Exchange's Rules.
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\7\ The phrase in the fourth sentence, ``The Board of Directors
has resolved that no option series shall freely trade after 4:00
P.M. Eastern Time'' is being removed as unnecessary as the Exchange
is specifying the hours each product may trade in the new rule.
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Index Options Values for Settlement
The Exchange proposes to adopt a new rule at Options 4A, Section 4,
which is currently reserved, and title the rule ``Index Options Values
for Settlement.'' Proposed Options 4A, Section 4 would specify the way
the Exchange would arrive at index options values in cases where the
Exchange's index rules would not otherwise apply. The Exchange is
relocating certain portions of current Phlx Options 4A rules into
proposed new Options 4A, Section 4 so all related rule text are within
the same rule.
Proposed Options 4A, Section 4(a) rule text is being relocated from
current rule text within Options 4A, Section 12(d). The rule text
provides that where Exchange index options rules do not apply, Phlx
index options would settle based on the current index value used to
settle the exercise of an index options contract, which would be the
closing index value for the day on which the index options contract is
exercised in accordance with the Rules of The Options Clearing
Corporation (``OCC'') or, if such day is not a business day, for the
most recent business day. The rule text is being relocated without
change.
Proposed Options 4A, Section 4(b) rule text is being relocated from
current rule text within Options 4A, Section 12(g). The Exchange
proposes to add the title ``Pricing When Primary Market Does Not Open''
to proposed Options 4A, Section 4(b). The rule text provides for the
current index value in the instance the primary market for a security
underlying the current index value of an index option does not open for
trading on a given day, which is an expiration day. In this case, the
settlement price at expiration shall be the last reported sale price of
the security from the previous trading day, unless the current index
value at expiration is fixed in accordance with the Rules and By-Laws
of OCC. The rule text is being relocated without change.
Proposed Options 4A, Section 4(c) rule text is being relocated from
current rule text within Supplementary Material .01 of Options 4A,
Section 2. The Exchange is proposing to add the title ``Discretion'' to
proposed Options 4A, Section 4(c). The rule text provides that for any
series of index options the Exchange may, in its discretion, provide
that the calculation of the final index settlement value of any index
on which options are traded at the Exchange will be determined by
reference to the prices of the constituent stocks at a time other than
the close of trading on the last trading day before expiration. The
rule text is being relocated without change.
The Exchange proposes to add new rule text within Options 4A,
Section 4(c)(1) which states,

With respect to any securities index on which options are traded
on the Exchange, the source of the prices of component securities
used to calculate the current index level at expiration is
determined by the Reporting Authority for that index.

This rule text is identical to the rule text within Cboe Exchange,
Inc. (``Cboe'') Rule 4.13 at .09 of Interpretations and Policies and
follows the Exchange's current practice.\8\ The purpose of the proposed
rule change is to clarify that the Reporting Authority for a securities
index on which options are traded on the Exchange is the source of
prices of component securities used to calculate the current index
level at expiration. Certain Phlx rules may be interpreted in a manner
that suggests that the current index value at expiration of any
particular securities index is determined by the opening (or closing)
prices of the underlying components as reported by each respective
underlying component's ``primary market'' such as proposed Options 4A,
Section 4(b). Because Options 4A, Section 4(b) could be interpreted to
mean that the primary market for each security that comprises an index
will always be the source of opening and closing prices used in the
calculation of the particular index's value at expiration the Exchange
proposes to adopt the same rule text as Cboe.\9\ In order to avoid
investor confusion, Phlx proposes to provide that the Reporting
Authority for any securities index on which options are traded on Phlx
may determine to use the reported sale prices for one or more
underlying securities from a market that may not necessarily be the
primary market for that security in calculating the appropriate index
value. The Exchange notes that this is the case today and this rule
text is intended to make clear this authority.
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\8\ See Securities Exchange Act Release No. 50269 (August 26,
2004), 69 FR 53755 (September 2, 2004) (SR-CBOE-2004-42) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating
to the Calculation of Securities Indexes Underlying Options).
\9\ See Cboe Rule 4.13 at .09 of Interpretations and Policies.
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The Exchange believes that Options 4A, Section 4 will provide a
transparent reference to the way the Exchange arrives at index options
values for settlement where the Exchange's rules may not apply. With
respect to a particular index, the Reporting Authority is the
institution(s) or reporting service designated by the Exchange as the
official source for calculating and determining the current value or
the closing index value of the index.\10\ The current index value, with
respect of a particular index, is the level of the index that is
derived from the reported prices of the underlying securities that are
the basis of the index that are reported by the Reporting Authority for
the index.\11\ The Exchange has designated a Reporting Authority for
each index as discussed in this rule change. By designating the
Reporting Authority the Exchange is providing the official source for
calculating and determining the current value or the closing index
value of the index. The addition of this information to the rules will
bring greater clarity and transparency to the Exchange's Rules.
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\10\ See Options 4A, Section 2(a)(16).
\11\ See Options 4A, Section 2(a)(7).
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Reporting Authority
The Exchange proposes to amend Options 4A, Section 2 to adopt a new

[[Page 1241]]

Supplementary Material .02 which provides, ``The reporting authorities
designated by the Exchange in respect of each index underlying an index
options contract traded on the Exchange are as provided in the chart
below.'' The Exchange proposes to add the following chart to the rule
text:

------------------------------------------------------------------------
Underlying index Reporting authority
------------------------------------------------------------------------
Full Value Nasdaq 100 Index............ The Nasdaq Stock Market.
Reduced Value Nasdaq 100 Index......... The Nasdaq Stock Market.
Nasdaq-100 Micro Index................. The Nasdaq Stock Market.
PHLX Oil Service Sector Index.......... The Nasdaq Stock Market.
PHLX Semiconductor Sector Index........ The Nasdaq Stock Market.
PHLX Utility Sector Index.............. The Nasdaq Stock Market.
PHLX Gold/Silver Sector Index.......... The Nasdaq Stock Market.
PHLX Housing Sector Index.............. The Nasdaq Stock Market.
KBW Bank Index......................... Keefe, Bruyette & Woods, Inc.
Nasdaq-100[supreg] Volatility Index.... The Nasdaq Stock Market.
------------------------------------------------------------------------

The Exchange believes that the addition of the Reporting Authority
for each index will add clarity to the rule. The proposed reporting
authorities represent the current reporting authorities for each index
without change. As noted above, a Reporting Authority represents the
official source for calculating and determining the current value. The
Exchange determines the Reporting Authority for each index listed on
the Exchange.
Options 4A, Section 12
Generally, pursuant to Options 4A, Section 12(a)(2), index options
listed on the Exchange are subject to strike price intervals of no less
than $5, provided that certain classes of index options have strike
price intervals of no less than $2.50 if the strike price is less than
$200. Today, those classes of strike price intervals that have strike
price intervals of no less than $2.50 if the strike price is less than
$200 are listed within Options 4A, Section 12(a)(2). The Exchange
proposes to amend Options 4A, Section 12(a)(2), to add the Nasdaq-100
Index to the list of classes where strike price intervals of no less
than $2.50 are generally permitted if the strike price is less than
$200. The Nasdaq-100 Index was inadvertently omitted from the current
list. The Exchange notes that Nasdaq 100 Micro Index Options were added
to the list of classes where strike price intervals of no less than
$2.50 are generally permitted if the strike price is less than $200 in
2021.\12\ The Nasdaq 100 Micro Index Options are based on 1/100th of
the value of the Nasdaq-100 Index and therefore derivative of the
Nasdaq-100 Index. Also, the Nasdaq-100 Index is currently permitted to
trade in strike price intervals of no less than $2.50 if the strike
price is less than $200 on Nasdaq ISE, LLC (``ISE''), Nasdaq GEMX, LLC
(``GEMX'') and Nasdaq MRX, LLC (``MRX'').\13\ This amendment reflects
current Exchange practice.
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\12\ See Securities Exchange Act Release No. 91524 (April 9,
2021), 86 FR 19909 (April 15, 2021) (SR-Phlx-2021-07) (Order
Approving a Proposed Rule Change, as Modified by Amendment No. 1, To
Permit the Listing and Trading of Options Based on 1/100th the Value
of the Nasdaq-100 Index).
\13\ See ISE Options 4A, Section 12(c)(1). GEMX and MRX Options
4A is incorporated by reference to ISE Options 4A.
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The Exchange also proposes to amend Options 4A, Section 12(a)(2)(F)
to rename the ``PHLX/KBW Bank Index'' to ``KBW Bank Index'' to reflect
the current name of the Index.
The Exchange proposes to amend Options 4A, Section 12(a)(5)
concerning European-style options, to reword the current rule text to
make clear that the list which follows represents indexes on which
options may be listed. The Exchange is also adding a reference to the
p.m.-settled indexes \14\ which are proposed to be listed within
proposed paragraph (f), described below, and relocating the Nasdaq-100
Micro Index Options, a p.m.-settled product, to new paragraph (f). The
Exchange also proposes to list the following indexes within Options 4A,
Section 12(a)(5) which were inadvertently not listed in the rule today
and, today, have a European-Style Exercise: PHLX Oil Service Sector
Index, PHLX Housing Sector Index, PHLX Gold/Silver Sector Index, PHLX
Utility Sector Index, KBW Bank Index; and Nasdaq-100[supreg] Volatility
Index.\15\ All of the indexes listed within Options 4A, Section
12(a)(5) are European-style a.m.-settled options that are currently
available on Phlx. The European-style p.m.-settled options, which are
all currently listed on Phlx, are proposed to be listed within Options
4A, Section 12(f). Nasdaq-100 Micro Index Options is being relocated to
proposed Options 4A, Section 12(f) because it is a p.m.-settled
product. The proposed amendments merely organize the products as either
a.m.-settled or p.m.-settled within Options 4A, Section 12 for greater
clarity. The proposed changes are non-substantive as they represent the
manner in which these products trade.
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\14\ Currently, the Exchange lists p.m.-settled products. This
new paragraph will expand upon the current p.m.-settled products
which are described in Options 4A, Section 12(a)(6) (an index
option) and (b)(5) (nonstandard program).
\15\ See <a href="https://www.nasdaq.com/solutions/phlx-sector-based-index-options">https://www.nasdaq.com/solutions/phlx-sector-based-index-options</a>.
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The Exchange proposes to relocate rule text from Options 4A,
Section 12(f) to Options 4A, Section 12(d) with a minor change.\16\ The
Exchange proposes to remove the phrase ``A.M.-settled'' as this rule
text for index levels applies to P.M.-settled as well. Options 4A,
Section 12(g) was relocated to proposed Options 4A, Section 4(b). This
amendment is non-substantive because it merely is clarifying in nature.
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\16\ The current rule text within Options 4A, Section 12(d) was
relocated to proposed Options 4A, Section 4(a).
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The Exchange proposes to add the phrase ``on the following
indexes'' to the end of Options 4A, Section 12(e)(II) for clarity. The
Exchange also proposes to remove the word ``Options'' within the list
of indexes at Options 4A, Section 12(e)(II) and add the following
indexes which were inadvertently not on the list: PHLX Utility Sector
Index and PHLX Gold/Silver Sector Index as well as the recently
approved Nasdaq-100[supreg] Volatility Index. These sector indexes are
a.m.-settled products. The only indexes that are p.m.-settled are part
of a pilot program.\17\
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\17\ See Options 4A, Section 12(a)(6) (an index option) and
(b)(5) (nonstandard program).
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The Exchange proposes to add a new paragraph (f) within Options 4A,
Section 12 which describes the p.m.-settled index options.\18\ This new
paragraph would provide:
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\18\ The Nasdaq Options Market LLC (``NOM'') Rules at Options
4A, Section 12(a)(6) contain a paragraph describing p.m.-settled
index options. See Securities Exchange Act Release Nos. 91524 (April
9, 2021), 86 FR 19909 (April 15, 2021) (SR-Phlx-2021-07) (Approval
Order); and 82341 (December 15, 2017), 82 FR 60651 (December 21,
2017) (approving SR-Phlx-2017-79) (Order Approving a Proposed Rule
Change, as Modified by Amendment No. 1 and Granting Accelerated
Approval of Amendment No. 2, of a Proposed Rule Change To Establish
a Nonstandard Expirations Pilot Program).

[[Page 1242]]

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P.M.-Settled Index Options. The last day of trading for P.M.-
settled index options shall be the business day of expiration, or,
in the case of an option contract expiring on a day that is not a
business day, on the last business day before its expiration date.
The current index value at expiration of the index is determined by
the last reported sale price of each component security. In the
event that the primary market for an underlying security does not
open for trading on the expiration date, the price of that security
shall be the last reported sale price prior to the expiration date.
The following P.M.-settled index options are approved for trading on
Phlx:

This paragraph would serve to distinguish a.m.-settled and p.m.-settled
options as there is a similar paragraph regarding a.m.-settled options
in the rule today.\19\ As noted above, the Nasdaq-100 Micro Index
Option would be listed within this section as it is a p.m.-settled
options product. The Non-Standard Program is separately described in
detail within Options 4A, Section 12(b)(5). These are both pilot
programs. Finally, dashes are added in a few places to conform the name
of the ``Nasdaq-100 Index.'' These changes are non-substantive and
merely seek to categorize existing products which were all filed with
the Commission.
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\19\ NOM Options 4A, Section 12(a)(6) contains an identical
paragraph describing p.m.-settled index options listed on that
market. See Securities Exchange Act Release Nos. 91524 (April 9,
2021), 86 FR 19909 (April 15, 2021) (SR-Phlx-2021-07) (Approval
Order); and 82341 (December 15, 2017), 82 FR 60651 (December 21,
2017) (approving SR-Phlx-2017-79) (Order Approving a Proposed Rule
Change, as Modified by Amendment No. 1 and Granting Accelerated
Approval of Amendment No. 2, of a Proposed Rule Change To Establish
a Nonstandard Expirations Pilot Program).
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Disclaimers
The Exchange proposes to adopt a proposed rule at Options 4A,
Section 14 entitled ``Disclaimers.'' \20\ The rule text is identical to
rule text within ISE and NOM at Options 4A, Section 14. Currently,
Options 4A, Section 14 is reserved. The disclaimer provisions are
applicable to the reporting authorities identified in proposed
Supplementary Material .02 to Options 4A, Section 2. The proposed rule
text would provide that no Reporting Authority or affiliate of a
Reporting Authority (each such Reporting Authority, its affiliates, and
any other entity identified in the rule referred to collectively as a
``Reporting Authority'') makes any warranty express or implied, as to
the results to be obtained by any person or entity from the use of an
index it publishes, any opening, intra-day or closing value therefore,
or any data included therein or relating thereto, in connection with
the trading of any options contract based thereon or for any other
purpose. Further, the rule text provides that the Reporting Authority
shall obtain information to be used in the calculation of the index
from sources it believes to be reliable, but the Reporting Authority
does not guarantee the accuracy or completeness of such index,
including any opening, intra-day or closing value therefore, or any
date included therein or related thereto. Also, the Reporting Authority
disclaims all warranties of merchantability or fitness for a particular
purpose or use with respect to such index, any opening, intra-day, or
closing value therefore, any data included therein or relating thereto,
or any options contract based thereon. Finally, the Reporting Authority
shall have no liability for any damages, claims, losses (including any
indirect or consequential losses), expenses, or delays, whether direct
or indirect, foreseen or unforeseen, suffered by any person arising out
of any circumstance or occurrence relating to the person's use of such
index, any opening, intra-day or closing value therefore, any data
included therein or relating thereto, or any options contract based
thereon, or arising out of any errors or delays in calculating or
disseminating such index.
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\20\ See Securities Exchange Act Release No. 47749 (April 25,
2003), 68 FR 23507 (May 2, 2003) (SR-ISE-2003-05) (Notice of Filing
of Proposed Rule Change, and Amendment No. 1 Thereto, by
International Securities Exchange, Inc., Relating to Rules for
Trading Options on Indices).
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Each index has a designated Reporting Authority, which is the
institution or reporting service designated by the Exchange as the
official source for routinely calculating the level of each respective
index. MIAX Pearl LLC (``MIAX Pearl'') added a disclaimer to its rules
in 2018.\21\ The MIAX Pearl 2018 rule filing provided the following
justification for the rule change, ``The proposed rule promotes just
and equitable principles of trade by stating that a Reporting Authority
shall have no liability for any damages, claims, losses (including any
indirect or consequential losses), expenses, or delays, whether direct
or indirect, foreseen or unforeseen, suffered by any person arising out
of any circumstance or occurrence relating to the person's use of an
index, any opening, intra-day or closing value therefore, any data
included therein or relating thereto, or any options contract based
thereon, or arising out of any errors or delays in calculating or
disseminating such index.''
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\21\ See Securities Exchange Act Release No. 82756 (February 21,
2018), 83 FR 8538 (February 27, 2018) (SR-PEARL-2018-02) (Notice of
Filing of a Proposed Rule Change To Adopt Rules Relating to Trading
in Index Options).
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The Exchange believes that the disclaimer, would encourage the
Reporting Authority for each index to develop and maintain indexes that
may qualify for options trading on the Exchange, thereby providing
investors with new investment opportunities.
Technical Amendments
The Exchange proposes to remove the stray word ``Rule'' before
Options 2, Section 12(a) with the description of the term ``Lead Market
Maker'' within Options 7, Section 1. Also, the Exchange proposes to
update the citation with the description of ``Professional'' within
Options 7, Section 1 from ``Exchange Rule 1000(b)(43)'' to ``Options 1,
Section 1(b)(45).'' \22\
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\22\ Exchange Rule 1000(b)(43) was relocated in a prior rule
change. See Securities Exchange Act Release No. 88213 (February 14,
2020), 85 FR 9859 (February 20, 2020) (SR-Phlx-2020-03) (Nasdaq PHLX
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change To Relocate Rules From Its Current Rulebook Into Its New
Rulebook Shell).
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The Exchange proposes to amend Options 7, Section 8, Membership
Fees at Part A, Permit and Registration Fees. Specifically, the
Exchange proposes to remove rule text regarding a waiver of the
Inactive Nominee Fee which was in place from April 1, 2021 through
September 30, 2021.\23\ This rule text is now obsolete and removing the
rule text will avoid confusion as to the effectiveness of the waiver.
---------------------------------------------------------------------------

\23\ See Securities Exchange Act Release No. 91481 (April 6,
2021), 86 FR 19064 (April 12, 2021) (SR-Phlx-2021-19) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
Phlx's Pricing Schedule at Options 7, Section 8, ``Membership
Fees'').
---------------------------------------------------------------------------

The Exchange proposes to amend Options 7, Section 9, D, to add the
phrase ``General 5'' before Rule 9216 to provide the complete citation.
Also, the Exchange proposes to remove the stray word ``Rule'' from
Options 7, Section 9, D.
The Exchange proposes a technical amendment within Options 8,
Section 24, ``Bids And Offer-Premium'' to re-letter the current
paragraphs. As a result of the changes to this section, the Exchange
proposes to update citations to Options 8, Section 24 within E-11,
``Two-Way, Three Way and Multi-Spread Transactions (FOREIGN CURRENCY
OPTION ONLY)''.

[[Page 1243]]

The Exchange proposes technical amendments to Options 8, Section
28, ``Responsibilities of Floor Brokers,'' to update a citation to Rule
1084 to Options 5, Section 2. Similar updates are proposed to B-7,
``Options Floor Based Management System,'' and C-2, ``Options Floor
Based Management System''.
The Exchange proposes technical amendments to Options 8, Section
29, ``Use of Floor Based Management System by Floor Market Makers and
Lead Market Makers,'' to update two citations. The first citation is to
Supplementary Material .08 to Options 10, Section 6, the rule citation
should be to Supplementary Material .01 to Options 10, Section 5.\24\
The second citation is to Rule 1080, the rule citation should be to
Options 3, Section 10.
---------------------------------------------------------------------------

\24\ The Exchange relocated rule text from Supplementary
Material .08 to Options 10, Section 6 to Supplementary Material .01
to Options 10, Section 5. See Securities Exchange Act Release No.
92986 (September 15, 2021), 86 FR 52536 (September 21, 2021) (SR-
Phlx-2021-52) (Notice of Filing and Immediate Effectiveness of
Proposed Rule Change To Adopt Phlx Options 10, Section 5, Branch
Office, and Options 10, Section 17, Profit Sharing Rules).
---------------------------------------------------------------------------

2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\25\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\26\ in particular, in that it is designed to
promote just and equitable principles of trade and to protect investors
and the public interest.
---------------------------------------------------------------------------

\25\ 15 U.S.C. 78f(b).
\26\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

Hours of Business
The Exchange's proposal to amend Options 3, Section 1 is consistent
with the Act as the proposed amendment will make clear the hours within
which various products listed on Phlx currently trade. Phlx recently
filed to establish General 3, Section 1030.\27\ General 3, Section 1030
governs the days the Exchange will be open for business. Amended
Options 3, Section 1 will describe the hours of trading. Further, the
proposed text clearly addresses the hours for the products listed on
Phlx in a transparent manner for members and member organizations to
reference.
---------------------------------------------------------------------------

\27\ See Securities Exchange Act Release No. 93674 (November 29,
2021), 86 FR 68711 (December 3, 2021) (SR-Phlx-2021-69) Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To
Establish Juneteenth National Independence Day as an Exchange
Holiday and Give the Exchange the Authority To Halt or Suspend
Trading or Close Exchange Facilities for Certain Unanticipated
Closures). This rule memorialized all current Exchange holidays and
added a provision to permit the Exchange the authority to halt or
suspend trading or close Exchange facilities for certain
unanticipated closures.
---------------------------------------------------------------------------

The Exchange's proposal to relocate rule text currently within
Options 3, Section 1(a), concerning Exchange-Traded Fund shares, into
new Options 3, Section 1(b) and modify the rule text to provide
citations within Options 4A to Exchange-Traded Fund Shares, Index-
Linked Securities, and Alpha Indexes is consistent with the Act as the
modifications add clarity to existing rule text.
The Exchange's proposal to relocate rule text currently within
Options 3, Section 1(a), concerning broad-based indexes, into new
Options 3, Section 1(c) and modify the rule text from ``shall freely
trade'' to ``may be traded'' is consistent with the Act as that change
is non-substantive. The addition of hours for p.m.-settled products
\28\ and the recently approved Nasdaq-100 Volatility Index Options,\29\
does not represent a change from the current hours, rather the Exchange
is noting these hours within this rule for ease of reference.
---------------------------------------------------------------------------

\28\ Options 4A, Section 12 includes p.m.-settled products.
P.M.-settled products currently trade until 4:15. See Options 4A,
Section 12(b)(5)(D) and Supplementary Material .01 to Options 4A,
Section 12 respectively describing the Non-Standard Expirations and
Nasdaq 100 Micro Index Options currently listed on Phlx.
\29\ See Securities Exchange Act Release No. 91781 (May 5,
2021), 86 FR 25918 (May 11, 2021) (SR-PHLX-2020-41) (Notice of
Filing of Amendment Nos. 1 and 2 and Order Granting Accelerated
Approval of a Proposed Rule Change, as Modified by Amendment Nos. 1
and 2, To List and Trade Options on a Nasdaq-100 Volatility Index).
The Approval Order for the VOLQ product provides the 4:00 p.m.
timeframe. This product is operative and not yet effective.
---------------------------------------------------------------------------

The Exchange's proposal to relocate rule text currently within
Options 3, Section 1(a), concerning foreign currency options, into new
Options 3, Section 1(d) and modify the rule text to remove rule text
that is unnecessary is a non-substantive change.
The addition of proposed new Options 3, Section 1(e) is consistent
with the Act as the rule text memorializes the current hours for sector
indexes that are currently listed on Phlx. This text is consistent with
the Act as the rule text will specifically account for sector indexes
for ease of reference, thereby providing additional transparency to the
rule.
The Exchange's proposal to relocate the first two sentences of
current Options 3, Section 1(a), into current Options 8, Section 9,
Trading Floor Admittance, with the exception of the phrase within
``Except as otherwise ordered by the Board of Directors'' is consistent
with the Act as this text applies to the Trading Floor. The Exchange's
proposal removes the current discretion permitted by the Board of
Directors, thereby adding certainty to the rule text. Any changes to
the rule text would be filed with the Commission. Amending the title of
Options 8, Section 9 to ``Trading Floor Hours of Business and
Admittance'' is a non-substantive change.
Clearly specifying the hours that each Phlx product trades within
Options 3, Section 1 promotes just and equitable principles of trade by
removing any confusion for members as to when the products are
available.
Index Options Values for Settlement
The Exchange's proposal to adopt a new rule at Options 4A, Section
4, which is currently reserved, and title the rule ``Index Options
Values for Settlement'' is consistent with the Act. Proposed Options
4A, Section 4 would specify the way the Exchange would arrive at index
options values in cases where the Exchange's index rules would not
otherwise apply. The Exchange is relocating certain portions of current
Phlx Options 4A rules into proposed new Options 4A, Section 4, without
change, so all related rule text are within the same rule.
The relocation of certain rule text within Options 4A, without
change, is non-substantive. The proposal to add rule text within Phlx's
Options 4A, Section 4(c)(1), which is identical to rule text within
Cboe Rule 4.13 at .09 of Interpretations and Policies,\30\ that follows
the Exchange's current practice is consistent with the Act because the
proposed rule text will clarify the Reporting Authority for a
securities index on which options are traded. The Reporting Authority
is the source of prices of component securities used to calculate the
current index level at expiration. Today, certain Phlx rules may be
interpreted in a manner that suggests that the current index value at
expiration of any particular securities index is determined by the
opening (or closing) prices of the underlying components as reported by
each respective underlying component's ``primary market'' such as
proposed Options 4A, Section 4(b). Because Options 4A, Section 4(b)
could be interpreted to mean that the primary market for each security
that comprises an index will always be the source of opening and
closing prices used in the calculation of the particular index's

[[Page 1244]]

value at expiration the Exchange proposes to adopt rule text identical
to Cboe.\31\ In order to avoid investor confusion, Phlx proposes to
provide that the Reporting Authority for any securities index on which
options are traded on Phlx may determine to use the reported sale
prices for one or more underlying securities from a market that may not
necessarily be the primary market for that security in calculating the
appropriate index value. The Exchange notes that this is the case today
and this rule text is intended to make clear this authority.
---------------------------------------------------------------------------

\30\ See Securities Exchange Act Release No. 50269 (August 26,
2004), 69 FR 53755 (September 2, 2004) (SR-CBOE-2004-42) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating
to the Calculation of Securities Indexes Underlying Options).
\31\ See Cboe Rule 4.13 at .09 of Interpretations and Policies.
---------------------------------------------------------------------------

The Exchange believes that this proposed rule will provide a
transparent reference to the way the Exchange arrives at index options
values for settlement where the Exchange's rules may not apply. With
respect to a particular index, the Reporting Authority is the
institution(s) or reporting service designated by the Exchange as the
official source for calculating and determining the current value or
the closing index value of the index.\32\ The current index value, with
respect of a particular index, is the level of the index that is
derived from the reported prices of the underlying securities that are
the basis of the index that are reported by the Reporting Authority for
the index.\33\ The Exchange has designated a Reporting Authority for
each index as discussed in this rule change. By designating the
Reporting Authority the Exchange is providing the official source for
calculating and determining the current value or the closing index
value of the index. The addition of this information to the rules will
bring greater clarity and transparency to the Exchange's Rules.
---------------------------------------------------------------------------

\32\ See Options 4A, Section 2(a)(16).
\33\ See Options 4A, Section 2(a)(7).
---------------------------------------------------------------------------

Options 4A, Section 12
Today, those classes of strike price intervals that have strike
price intervals of no less than $2.50 if the strike price is less than
$200 are listed within Options 4A, Section 12(a)(2). The Exchange's
proposal to amend Options 4A, Section 12(a)(2), to add the Nasdaq-100
Index to the list of classes where strike price intervals of no less
than $2.50 are generally permitted if the strike price is less than
$200 is consistent with the Act. The Nasdaq-100 Index was inadvertently
omitted from the current list. The Exchange notes that Nasdaq 100 Micro
Index Options were added to the list of classes where strike price
intervals of no less than $2.50 are generally permitted if the strike
price is less than $200 in 2021.\34\ The Nasdaq 100 Micro Index Options
are based on 1/100th of the value of the Nasdaq-100 Index and therefore
derivative of the Nasdaq-100 Index. Also, the Nasdaq-100 Index is
currently permitted to trade in strike price intervals of no less than
$2.50 are generally permitted if the strike price is less than $200 on
ISE, GEMX and MRX.\35\ Aligning the strike prices to the manner in
which the Nasdaq-100 Index trades avoids confusion for investors and
the public.
---------------------------------------------------------------------------

\34\ See Securities Exchange Act Release No. 91524 (April 9,
2021), 86 FR 19909 (April 15, 2021) (SR-Phlx-2021-07) (Order
Approving a Proposed Rule Change, as Modified by Amendment No. 1, To
Permit the Listing and Trading of Options Based on 1/100th the Value
of the Nasdaq-100 Index).
\35\ See ISE Options 4A, Section 12(c)(1).
---------------------------------------------------------------------------

The Exchange's proposal to amend Options 4A, Section 12(a)(2)(F) to
rename the ``PHLX/KBW Bank Index'' to ``KBW Bank Index'' to reflect the
current name of the Index is a non-substantive amendment.
The Exchange's proposal to amend Options 4A, Section 12(a)(5)
concerning European-style options, to reword the sentence to make clear
that the list which follows represents indexes on which options may be
listed is consistent with the Act. The current language does not
distinguish between a.m.-settled and p.m.-settled options. All of the
indexes listed within Options 4A, Section 12(a)(5) are a.m.-settled
options and currently available on Phlx. Adding a reference to the
p.m.-settled indexes \36\ and relocating the Nasdaq-100 Micro Index
Options to new paragraph (f) will make clear which of the indexes
listed today are in fact p.m.-settled. The Exchange also proposes to
list the following indexes within Options 4A, Section 12(a)(5) which
were inadvertently not listed in the rule today and have a European-
Style Exercise: PHLX Oil Service Sector Index, PHLX Housing Sector
Index, PHLX Gold/Silver Sector Index, PHLX Utility Sector Index, KBW
Bank Index; and Nasdaq-100[supreg] Volatility Index.\37\ The European-
style p.m.-settled options, which are all currently listed on Phlx, are
listed within Options 4A, Section 12(f). The proposed amendments merely
organize the products as either a.m.-settled or p.m.-settled within
Options 4A, Section 12 for greater clarity. The proposed changes are
non-substantive.
---------------------------------------------------------------------------

\36\ Currently, the Exchange lists p.m.-settled products. This
new paragraph will expand upon the current p.m.-settled products
which are described in Options 4A, Section 12(a)(6) (an index
option) and (b)(5) (nonstandard program).
\37\ See <a href="https://www.nasdaq.com/solutions/phlx-sector-based-index-options">https://www.nasdaq.com/solutions/phlx-sector-based-index-options</a>.
---------------------------------------------------------------------------

The Exchange's proposal to relocate rule text from Options 4A,
Section 12(f) to Options 4A, Section 12(d), with a minor change,\38\
and amend Options 4A, Section 12(e)(II) are consistent with the Act as
these amendments are non-substantive and clarifying in nature.
---------------------------------------------------------------------------

\38\ The current rule text within Options 4A, Section 12(d) was
relocated to proposed Options 4A, Section 4(a).
---------------------------------------------------------------------------

Removing the word ``Options'' within the list of indexes at Options
4A, Section 12(e)(II) and adding the sector indexes, which were
inadvertently not listed, as well as the recently approved Nasdaq-
100[supreg] Volatility Index is consistent with the Act and non-
substantive in nature. These sector indexes are a.m.-settled products.
The only indexes that are p.m.-settled are part of a pilot program.\39\
---------------------------------------------------------------------------

\39\ See Options 4A, Section 12(a)(6) (an index option) and
(b)(5) (nonstandard program).
---------------------------------------------------------------------------

The proposal to add a new paragraph (f) within Options 4A, Section
12 which describes the p.m.-settled index options \40\ is consistent
with the Act and will bring greater clarity to the rule by describing
the p.m.-settled products. This paragraph would serve to distinguish
a.m.-settled and p.m.-settled options as there is a similar paragraph
regarding a.m.-settled options in the rule today. As noted above, the
Nasdaq 100 Micro Index Option would be listed within this section as it
is a p.m.-settled options product. The Non-Standard Program is
separately described in detail within Phlx Options 4A, Section
12(b)(5). These are both pilot programs. These changes are non-
substantive and merely seek to categorize existing products which were
all filed with the Commission.
---------------------------------------------------------------------------

\40\ See NOM Options 4A, Section 12(a)(6) which contains an
identical paragraph describing p.m.-settled index options.

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

[[Page 1245]]

Disclaimers
The Exchange's proposal to adopt a proposed rule at Options 4A,
Section 14 entitled ``Disclaimers'' \41\ is consistent with the Act.
The text is identical rule text within ISE and NOM at Options 4A,
Section 14. The disclaimer provisions are applicable to the reporting
authorities identified in Supplementary Material .02 to Options 4A,
Section 2. Each index has a designated Reporting Authority, which is
the institution or reporting service designated by the Exchange as the
official source for routinely calculating the level of each respective
index. MIAX Pearl LLC added a disclaimer to its rules in 2018.\42\ The
2018 rule filing provided the following justification for the rule
change, ``The proposed rule promotes just and equitable principles of
trade by stating that a Reporting Authority shall have no liability for
any damages, claims, losses (including any indirect or consequential
losses), expenses, or delays, whether direct or indirect, foreseen or
unforeseen, suffered by any person arising out of any circumstance or
occurrence relating to the person's use of an index, any opening,
intra-day or closing value therefore, any data included therein or
relating thereto, or any options contract based thereon, or arising out
of any errors or delays in calculating or disseminating such index.''
The Exchange believes that the disclaimer, would encourage the
Reporting Authority for each index to develop and maintain indexes that
may qualify for options trading on the Exchange, thereby providing
investors with new investment opportunities.
---------------------------------------------------------------------------

\41\ See Securities Exchange Act Release No. 47749 (April 25,
2003), 68 FR 23507 (May 2, 2003) (SR-ISE-2003-05) (Notice of Filing
of Proposed Rule Change, and Amendment No. 1 Thereto, by
International Securities Exchange, Inc., Relating to Rules for
Trading Options on Indices).
\42\ See Securities Exchange Act Release No. 82756 (February 21,
2018), 83 FR 8538 (February 27, 2018) (SR-PEARL-2018-02) (Notice of
Filing of a Proposed Rule Change To Adopt Rules Relating to Trading
in Index Options).
---------------------------------------------------------------------------

Technical Amendments
The Exchange's proposal to make technical amendments within Options
2, Section 12(a), Options 7, Section 1, Options 7, Section 8, and
Options 7, Section 9, D, Options 8, Section 24, Options 8, Section 28,
Options 8, Section 29, B-7, C-2, and E-11 will bring greater clarity to
these rules.

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 not necessary or appropriate in
furtherance of the purposes of the Act.
Hours of Business
The Exchange's proposal to amend Options 3, Section 1 to make clear
the hours within which various products listed on Phlx currently trade
does not impose an undue burden on competition. The addition of
citations, and hours for p.m-settled products, Nasdaq-100 Volatility
Index Options and sector indexes will make clear when those products
trade. The hours apply uniformly to all members and member
organizations.
Index Options Values for Settlement
The Exchange's proposal to adopt a new rule at Options 4A, Section
4, which is currently reserved, and title the rule ``Index Options
Values for Settlement'' does not impose an undue burden on competition.
Proposed Options 4A, Section 4 would specify the way the Exchange would
arrive at index options values in cases where the Exchange's index
rules would not otherwise apply. The Exchange is relocating certain
portions of current Phlx Options 4A rules into proposed new Options 4A,
Section 4 so that it may locate all the relevant rule text within the
same rule.
The proposal to add new rule text within Options 4A, Section
4(c)(1) is identical to rule text within Cboe Rule 4.13 at .09 of
Interpretations and Policies and follows the Exchange's current
practice.\43\ The proposed rule text will clarify the Reporting
Authority for a securities index on which options are traded on the
Exchange is the source of prices of component securities used to
calculate the current index level at expiration. Also, by designating
the Reporting Authority within Supplementary Material .02 to Options
4A, Section 2 the Exchange is providing the official source for
calculating and determining the current value or the closing index
value of the index. The addition of this information to the rules will
bring greater clarity and transparency to the Exchange's Rules.
---------------------------------------------------------------------------

\43\ See Securities Exchange Act Release No. 50269 (August 26,
2004), 69 FR 53755 (September 2, 2004) (SR-CBOE-2004-42) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating
to the Calculation of Securities Indexes Underlying Options).
---------------------------------------------------------------------------

Options 4A, Section 12
The Exchange's proposed amendments to Options 4A, Section 12 do not
impose an undue burden on competition. The addition of the Nasdaq-100
Index to the list of strike price intervals of no less than $2.50 if
the strike price is less than $200 will make clear the manner in which
the Nasdaq-100 Index trades today. The Nasdaq-100 Index is currently
permitted to trade in strike price intervals of no less than $2.50 are
generally permitted if the strike price is less than $200 on ISE, GEMX
and MRX.\44\
---------------------------------------------------------------------------

\44\ See ISE Options 4A, Section 12(c)(1).
---------------------------------------------------------------------------

Rewording Options 4A, Section 12(a)(5), related to European-style
options, will make clear which indexes are a.m.-settled and those that
are p.m.-settled options. All of the indexes listed within Options 4A,
Section 12(a)(5) are a.m.-settled options and currently available on
Phlx. Adding a reference to the p.m.-settled indexes \45\ and
relocating the Nasdaq-100 Micro Index Options to new paragraph (f) will
make clear which of the indexes listed today are in fact p.m.-settled.
Including the sector indexes will also bring greater clarity to the
rules and identify those indexes as a.m.-settled. The proposed
amendments merely organize the products as either a.m.-settled or p.m.-
settled within Options 4A, Section 12 for greater clarity.
---------------------------------------------------------------------------

\45\ Currently, the Exchange lists p.m.-settled products. This
new paragraph will expand upon the current p.m.-settled products
which are described in Phlx Options 4A, Section 12(a)(6) (an index
option) and (b)(5) (nonstandard program).
---------------------------------------------------------------------------

Disclaimers
The Exchange's proposal to amend Options 4A, Section 14 to adopt a
rule text, identical to ISE and NOM,\46\ at Options 4A, Section 14,
entitled ``Disclaimers'' does not imposes an undue burden on
competition. The disclaimer applies to all index products traded on
Phlx.
---------------------------------------------------------------------------

\46\ See ISE and NOM Options 4A, Section 14.
---------------------------------------------------------------------------

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

Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public

[[Page 1246]]

interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \47\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\48\
---------------------------------------------------------------------------

\47\ 15 U.S.C. 78s(b)(3)(A)(iii).
\48\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires the Exchange to give the Commission written notice of its
intent to file the proposed rule change, along with a brief
description and text of the proposed rule change, at least five
business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
---------------------------------------------------------------------------

A proposed rule change filed under Rule 19b-4(f)(6) \49\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\50\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay to allow the
Exchange to implement the proposal as soon as possible. The Exchange
states that the proposal will increase transparency within Options 4A
by referencing the way the Exchange arrives at index options values for
settlement where the Exchange's rules may not apply, clarify that the
Reporting Authority (identical to Cboe Rule 4.13 at .09 of
Interpretations and Policies) for any securities index on which options
are traded on Phlx may determine to use the reported sale prices for
one or more underlying securities from a market that may not
necessarily be the primary market for that security in calculating the
appropriate index value, add transparency by specifying the reporting
authorities within proposed new Supplementary Material .02 to Options
4A, Section 2, and clarify which options may trade today on Phlx and
the distinctions as between a.m.-settled and p.m.-settled products. The
Exchange also states that proposed Options 4A, Section 12(f) is
identical to NOM Options 4A, Section 12(a)(6) and proposed Options 4A,
Section 14 is identical to ISE and NOM,\51\ at Options 4A, Section 14.
For these reasons, the Commission believes that waiver of the 30-day
operative delay is consistent with the protection of investors and the
public interest. Accordingly, the Commission waives the 30-day
operative delay and designates the proposal operative upon filing.\52\
---------------------------------------------------------------------------

\49\ 17 CFR 240.19b-4(f)(6).
\50\ 17 CFR 240.19b-4(f)(6)(iii).
\51\ See ISE and NOM Options 4A, Section 14.
\52\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or 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

<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#7b090e171e56181416161e150f083b081e18551c140d"><span class="__cf_email__" data-cfemail="ef9d9a838ac28c8082828a819b9caf9c8a8cc1888099">[email&#160;protected]</span></a>. Please include
File Number SR-Phlx-2021-76 on the subject line.

Paper Comments

<bullet> 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-Phlx-2021-76. 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 (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>).
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 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-Phlx-2021-76 and should be
submitted on or before January 31, 2022.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\53\
---------------------------------------------------------------------------

\53\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-00156 Filed 1-7-22; 8:45 am]
BILLING CODE 8011-01-P

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