Notice2022-26539
Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Definition of Short Term Option Series
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Published
December 7, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 87 Issue 234 (Wednesday, December 7, 2022)</title>
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[Federal Register Volume 87, Number 234 (Wednesday, December 7, 2022)]
[Notices]
[Pages 75096-75098]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-26539]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-96432; File No. SR-Phlx-2022-48]
Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend the
Definition of Short Term Option Series
December 1, 2022.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on November 22, 2022, Nasdaq PHLX LLC (``Phlx'' or ``Exchange'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the Exchange. 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 certain rule text within Equity 2,
Market Participants; Options 1, General Provisions; Options 2, Options
Market Participants; Options 4A, Options Index Rules; Options 7,
Pricing Schedule; and Options 10, Doing Business with the Public.
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 the description of the term ``Short
Term Option Series'' within Options 1, Section 1, Definitions, to
conform the term to Nasdaq ISE, LLC's (``ISE'') term of Short Term
Option Series which was recently amended.\3\
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\3\ See Securities Exchange Act Release No. 96281 (November 9,
2022), 87 FR 68769 (November 16, 2022) (SR-ISE-2022-18) (Order
Granting Approval of a Proposed Rule Change to Amend the Short Term
Option Series Program). Phlx's Options 4 Rules are incorporated by
reference to ISE's Options 4 Rules and therefore the approval of
ISE's Options 4 rules permits the listing and trading of options
series with Tuesday and Thursday expirations for options on SPY and
QQQ on Phlx.
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The Exchange also proposes certain other non-substantive
amendments. Each change is described below.
Short Term Option Series
Options 1, Section 1(b)(53) describes the term ``Short Term Option
Series'' as follows:
The term ``Short Term Option Series'' means a series in an
option class that is approved for listing and trading on the
Exchange in which the series is opened for trading on any Monday,
Tuesday, Wednesday, Thursday or Friday that is a business day and
that expires on the Monday, Wednesday or Friday of the next business
week, or, in the case of a series that is listed on a Friday and
expires on a Monday, is listed one business week and one business
day prior to that expiration. If a Tuesday, Wednesday, Thursday or
Friday is not a business day, the series may be opened (or shall
expire) on the first business day immediately prior to that Tuesday,
Wednesday, Thursday or Friday, respectively. For a series listed
pursuant to this Rule for Monday expiration, if a Monday is not a
business day, the series shall expire on the first business day
immediately following that Monday.
ISE's Options 4 rules were recently amended to expand the Short Term
Option Series Program to permit the listing and trading of options
series with Tuesday and Thursday expirations for options on SPY and QQQ
listed pursuant to the Short Term Option Series Program.\4\ In
conjunction with that change, ISE amended its definition of Short Term
Option Series, within Options 1, Section 1(a)(49), to accommodate the
listing of options series that expire on Tuesdays and Thursdays.\5\
Specifically, the Exchange added Tuesday and Thursday to the permitted
expiration days, which currently include Monday, Wednesday, and Friday,
that it may open a series for trading.
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\4\ See note 3 above. Phlx's Options 4 Rules are incorporated by
reference to ISE's Options 4 Rules.
\5\ See note 3 above.
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At this time, the Exchange proposes to amend the term ``Short Term
Option Series'' at Options 1, Section 1(b)(53) to provide,
The term ``Short Term Option Series'' means a series in an
option class that is approved for listing and trading on the
Exchange in which the series is opened for trading on any Monday,
Tuesday, Wednesday, Thursday or Friday that is a business day and
that expires on the Monday, Tuesday, Wednesday, Thursday, or Friday
of the next business week, or, in the case of a series that is
listed on a Friday and expires on a Monday, is listed one business
week and one business day prior to that expiration. If a Tuesday,
Wednesday, Thursday or Friday is not a business day, the series may
be opened (or shall expire) on the first business day immediately
prior to that Tuesday, Wednesday, Thursday or Friday, respectively.
For a series listed pursuant to this Rule for Monday expiration, if
a Monday is not a business day, the series shall expire on the first
business day immediately following that Monday.
Today, Phlx's listing rules permit the listing and trading of options
series with Tuesday and Thursday expirations for options on SPY and QQQ
listed pursuant to the Short Term Option Series Program.
Other Non-Substantive Amendments
The Exchange proposes to remove and reserve the rules within Equity
2, Section 3 and Options 2, Section 2 which are both titled, ``Member
and Member Organization Participation.'' The Nasdaq Stock Market LLC
(``Nasdaq'') recently filed to relocate a similar Nasdaq Rule into
General 3, Rule 1032.\6\ Phlx's General 3 is incorporated by reference
to Nasdaq's General 3. The rules within Equity 2, Section 3 and Options
2, Section 2 are not necessary as they are nearly identical to Phlx
General 3, Rule 1000 Series.\7\
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\6\ See Securities Exchange Act Release No. 96132 (October 24,
2022), 87 FR 65272 (October 28, 2022) (SR-NASDAQ-2022-058) (Notice
of Filing and Immediate Effectiveness of Proposed Rule Change To
Relocate Equity 2, Section 3).
\7\ While the term ``Floor Based Management System'' or ``FBMS''
is not specifically noted within Phlx General 3, Rule 1032, the term
``System'' is utilized. FBMS is part of the Exchange's System as
that term is defined within Options 1, Section 1(b)(57).
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The Exchange proposes to amend a rule citation to Streaming Quote
Traders
[[Page 75097]]
within Options 2, Section 1(a) and Options 7, Section 1(c). The correct
citation should be to Options 1, Section 1(b)(55) where Streaming Quote
Trader is described.
The Exchange proposes to remove a duplicative reference to Nasdaq-
100[supreg] Volatility Index Options within Options 4A, Section
12(e)(II)(xi).
Finally, the Exchange proposes to reserve Options 10, Sections 26
and 27 to harmonize section numbers across the Nasdaq affiliated
markets.\8\ These sections contain content in other Nasdaq affiliated
rulebooks.
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\8\ ISE, Nasdaq GEMX, LLC (``GEMX'') and Nasdaq MRX, LLC
(``MRX'') have rules within Options 10, Section 26 and 27.
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\9\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\10\ in particular, in that it is designed to
promote just and equitable principles of trade, 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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\9\ 15 U.S.C. 78f(b)
\10\ 15 U.S.C. 78f(b)(5).
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Short Term Option Series
The Exchange's proposal to amend the term ``Short Term Option
Series'' at Options 1, Section 1(b)(53) to reflect the recent change
\11\ to ISE's listing rules, which Phlx incorporates by reference, to
permit the listing and trading of options series with Tuesday and
Thursday expirations for options on SPY and QQQ listed pursuant to the
Short Term Option Series Program is consistent with the Exchange Act.
This proposal will align the description of Short Term Option Series
within Options 1, Section 1(b)(53) to the expirations permitted within
the Short Term Option Series Program within Supplementary .03 to
Options 4, Section 5.
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\11\ See note 3 above.
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Other Non-Substantive Amendments
The Exchange's proposal to remove and reserve the rules within
Equity 2, Section 3 and Options 2, Section 2 represent a non-
substantive amendment. Nasdaq recently filed to relocate a similar
Nasdaq Rule into General 3, Rule 1032.\12\ Phlx's General 3 is
incorporated by reference to Nasdaq's General 3, therefore the rules
within Equity 2, Section 3 and Options 2, Section 2 are not necessary
as a nearly identical \13\ rule exists within Phlx General 3, Rule 1000
Series.
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\12\ See note 6 above.
\13\ See note 7 above.
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The Exchange's proposal to amend a rule citation to Streaming Quote
Traders within Options 2, Section 1(a) and Options 7, Section 1(c) is
non-substantive.
The Exchange's proposal to remove a duplicative reference to
Nasdaq-100[supreg] Volatility Index Options within Options 4A, Section
12(e)(II)(xi) is non-substantive.
Finally, the Exchange's proposal to reserve Options 10, Sections 26
and 27 is non-substantive.\14\
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\14\ See note 9 above.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The proposed rule change does not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act.
Short Term Option Series
The Exchange's proposal to amend the term ``Short Term Option
Series'' at Options 1, Section 1(b)(53) to reflect the recent change
\15\ to ISE's listing rules, which Phlx incorporates by reference, to
permit the listing and trading of options series with Tuesday and
Thursday expirations for options on SPY and QQQ listed pursuant to the
Short Term Option Series Program does not impose an undue burden on
competition, rather this proposal will align the description of Short
Term Option Series within Options 1, Section 1(b)(53) to the
expirations permitted within the Short Term Option Series Program
within Supplementary .03 to Options 4, Section 5.
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\15\ See note 3 above.
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Other Non-Substantive Amendments
The Exchange's proposal to remove and reserve the rules within
Equity 2, Section 3 and Options 2, Section 2 represent a non-
substantive amendment. Nasdaq recently filed to relocate a similar
Nasdaq Rule into General 3, Rule 1032.\16\ Phlx's General 3 is
incorporated by reference to Nasdaq's General 3, therefore the rules
within Equity 2, Section 3 and Options 2, Section 2 are not necessary
as a nearly identical \17\ rule exists within Phlx General 3, Rule 1000
Series.
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\16\ See note 6 above.
\17\ See note 7 above.
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The Exchange's proposal to amend a rule citation to Streaming Quote
Traders within Options 2, Section 1(a) and Options 7, Section 1(c) is
non-substantive.
The Exchange's proposal to remove a duplicative reference to
Nasdaq-100[supreg] Volatility Index Options within Options 4A, Section
12(e)(II)(xi) is non-substantive.
Finally, the Exchange's proposal to reserve Options 10, Sections 26
and 27 is non-substantive.\18\
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\18\ See note 9 above.
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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
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 \19\ and
subparagraph (f)(6) of Rule 19b-4 \20\ thereunder.
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\19\ 15 U.S.C. 78s(b)(3)(A)(iii).
\20\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file 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.
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A proposed rule change filed under Rule 19b-4(f)(6) \21\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\22\ the Commission
may designate a shorter time of such action is consistent with the
protection of investor and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposed
rule change may become operative upon filing. The Exchange states that
this proposed rule change could immediately benefit market participants
by avoiding confusion, as the Phlx Options 4 rules are incorporated to
ISE's Options 4 rules. The Exchange also states that these rules permit
the listing and trading of options series with Tuesday and Thursday
expirations for options on SPY and QQQ listed pursuant to the Short
Term Option Series Program. For these reasons, and because the proposed
rule change does not raise any novel regulatory issues, the Commission
believes that waiving the 30-day operative delay is consistent with the
protection of investors and the
[[Page 75098]]
public interest. Therefore, the Commission hereby waives the operative
delay and designates the proposal operative upon filing.\23\
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\21\ 17 CFR 240.19b-4(f)(6).
\22\ 17 CFR 240.19b-4(f)(6)(iii).
\23\ 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).
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At any time within 60 days of the filing of the 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#087a7d646d256b6765656d667c7b487b6d6b266f677e"><span class="__cf_email__" data-cfemail="e795928b82ca84888a8a82899394a7948284c9808891">[email protected]</span></a>. Please include
File Number SR-Phlx-2022-48 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-2022-48. 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-2022-48 and should be submitted on
or before December 28, 2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\24\
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\24\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-26539 Filed 12-6-22; 8:45 am]
BILLING CODE 8011-01-P
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