Notice2024-26866
Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Options 9, Section 13, Position Limits, and Options 8, Section 34, FLEX Trading, Regarding Options on the iShares Bitcoin Trust ETF
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
November 19, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 223 (Tuesday, November 19, 2024)</title>
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[Federal Register Volume 89, Number 223 (Tuesday, November 19, 2024)]
[Notices]
[Pages 91470-91471]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-26866]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-101613; File No. SR-Phlx-2024-53]
Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Options 9,
Section 13, Position Limits, and Options 8, Section 34, FLEX Trading,
Regarding Options on the iShares Bitcoin Trust ETF
November 13, 2024.
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 4, 2024, 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 Options 9, Section 13, Position
Limits, and Options 8, Section 34, FLEX Trading.
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: (1) amend Options 9, Section 13, Position
Limits, to limit the position limits for options on iShares Bitcoin
Trust ETF (``IBIT'') to 25,000 contracts; \3\ and (2) except a FLEX
option on iShares Bitcoin Trust ETF from trading as a FLEX option
contract.
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\3\ In the absence of this proposal, position and exercise
limits would be governed by Phlx Options 9, Section 13(a).
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Options 9, Section 13
Recently, Nasdaq ISE, LLC (``ISE'') received approval to list
options on IBIT.\4\ Phlx's Options 4 Rules were amended as those Rules
are incorporated by reference to ISE's Options 4 Rules, so Phlx has the
ability to list IBIT options. ISE's IBIT Approval Order \5\ stated that
the position and exercise limits for IBIT options shall be 25,000
contracts. At this time, the Exchange proposes to amend Phlx Option 9,
Section 13 to similarly note that IBIT options position limits shall be
25,000 contracts to mirror ISE's Approval Order. Phlx Options 9,
Section 15(a) provides that the exercise limits shall be determined in
the manner described in Options 9, Section 13, therefore the exercise
limits would also be 25,000 contracts.
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\4\ See Securities Exchange Act Release No. 101128 (September
20, 2024), 89 FR 78942 (September 26, 2024) (SR-ISE-2024-03) (Notice
of Filing of Amendment Nos. 4 and 5 and Order Granting Accelerated
Approval of a Proposed Rule Change, as Modified by Amendment Nos. 1,
4, and 5, To Permit the Listing and Trading of Options on the
iShares Bitcoin Trust) (``IBIT Approval Order'').
\5\ See IBIT Approval Order.
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Options 8, Section 34
Today, all options series listed on Phlx may trade as a FLEX Order
on Phlx's trading floor.\6\ At this time, the Exchange proposes to note
within Options 8, Section 34(a) that it will not authorize for trading
a FLEX option on iShares Bitcoin Trust ETF (``IBIT''). The Exchange
proposes this amendment in light of the position and exercise limits of
25,000 contracts that were set for IBIT options in the IBIT Approval
Order. Permitting trading a FLEX option on IBIT would otherwise
establish different position and exercise limits than those set by the
IBIT Approval Order.
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\6\ Phlx Options 8, Section 34 rule text was previously amended
by two rule changes which are effective, but not yet operative.
These two prior rule changes will be implemented at the same time as
the rule changes proposed herein. See Securities Exchange Act
Release Nos. 97658 (June 7, 2023), 88 FR 38562 (June 13, 2023) (SR-
Phlx-2023-22); and 100321 (June 12, 2024), 89 FR 51580 (June 18,
2024) (SR-Phlx-2024-24). Phlx further delayed the implementation so
that it could implement SR-Phlx-2023-22 while also completing an OCC
industry rule change prior.
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\7\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\8\ 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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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
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The Exchange's proposal to amend Options 9, Section 13, Position
Limits, to provide that the position and exercise limits for IBIT
options shall be 25,000 contracts is consistent with the Act as it will
conform Phlx's IBIT options position and exercise limits with ISE's
IBIT options position and exercise limits in order that IBIT options
have the same position and exercise limits on Phlx and ISE.\9\ Phlx
Options 9, Section 15(a) provides that the exercise limits shall be
determined in the manner described in Options 9, Section 13, therefore
the exercise limits would also be 25,000 contracts and also consistent
with ISE's IBIT options exercise limits.
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\9\ The Exchange believes that other exchanges will adopt
position and exercise limits of 25,000 contracts for IBIT Option
ETPs. All Nasdaq affiliated markets have filed to adopt a 25,000
contract position and exercise limit for IBIT options.
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The Exchange's proposal to amend Options 8, Section 34 to note that
it will
[[Page 91471]]
not authorize for trading a FLEX option on IBIT is consistent with the
spirit of the IBIT Approval Order, which limited the position and
exercise limits for IBIT options to 25,000 contracts. The proposal will
protect investors and the general public because without this
prohibition, trading a FLEX option in IBIT would otherwise establish
different position and exercise limits than those set by the IBIT
Approval Order.
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.
Amending Options 9, Section 13 to provide that the position and
exercise limits for IBIT options shall be 25,000 contracts does not
impose an undue burden on competition as the position and exercise
limits will apply to all trading for IBIT options on the Exchange as
well as other exchanges that file a similar proposal.\10\
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\10\ All Nasdaq affiliated markets have filed to adopt a 25,000
contract position and exercise limit for IBIT options.
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The Exchange's proposal to note that it will not authorize for
trading a FLEX option on IBIT does not impose an undue burden on
competition as no Phlx member will be able to transact a FLEX option on
IBIT.
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 \11\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\12\
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\11\ 15 U.S.C. 78s(b)(3)(A)(iii).
\12\ 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, 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.
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A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act normally does not become operative for 30 days after the date of
its filing. However, Rule 19b-4(f)(6)(iii) \13\ permits the Commission
to designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has
requested that the Commission waive the 30-day operative delay so that
the proposal may become operative immediately upon filing. The
Commission notes that the proposal will conform the Exchange's IBIT
options position and exercise limits with ISE's IBIT options position
and exercise limits.\14\ In addition, the proposal will establish a
rule prohibiting FLEX options on IBIT on Phlx, and without such rule,
options on IBIT on Phlx may have different position and exercise limits
than those permitted pursuant to the IBIT Approval Order.\15\
Therefore, the proposal raises no novel legal or regulatory issues.
Thus, 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 hereby waives the 30-day operative delay
and designates the proposed rule change operative upon filing.\16\
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\13\ 17 CFR 240.19b-4(f)(6)(iii).
\14\ See supra notes 4 and 5 and accompanying text.
\15\ See supra Section A.
\16\ For purposes only of waiving the 30-day operative delay,
the Commission has also 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.
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="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#5220273e377f313d3f3f373c2621122137317c353d24"><span class="__cf_email__" data-cfemail="a0d2d5ccc58dc3cfcdcdc5ced4d3e0d3c5c38ec7cfd6">[email protected]</span></a>. Please include
file number SR-Phlx-2024-53 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-2024-53. 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="https://www.sec.gov/rules/sro.shtml">https://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
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-Phlx-2024-53 and should be
submitted on or before December 10, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-26866 Filed 11-18-24; 8:45 am]
BILLING CODE 8011-01-P
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