Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Various Phlx Rules

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<title>Federal Register, Volume 91 Issue 164 (Wednesday, August 26, 2026)</title>
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[Federal Register Volume 91, Number 164 (Wednesday, August 26, 2026)]
[Notices]
[Pages 55130-55132]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-17361]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-106173; File No. SR-Phlx-2026-52]


Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend Various 
Phlx Rules

August 21, 2026.
    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 August 19, 2026, Nasdaq PHLX LLC (``Phlx'' or ``Exchange'') filed 
with the Securities and Exchange Commission (``SEC'' or ``Commission'') 
the proposed rule change as described in Items I, II, and III, 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 1, Section 1, Applicability, 
Definitions and References; Options 2, Section 1, Application for 
Approval as an SQT, RSQT, or RSQTO and Assignment in Options; Options 
4A, Section 6, Position Limits; Options 7, Section 1, General 
Provisions; and Options 8, Section 11, Floor Market Maker and Lead 
Market Maker Appointment, Section 25, Floor Allocation, and Section 39, 
B-6, Priority of Options Orders for Equity Options, Index Options and 
U.S. Dollar-Settled Foreign Currency Options by Account Type (EQUITY 
OPTION, INDEX OPTION AND U.S. DOLLAR-SETTLED FOREIGN CURRENCY OPTION 
ONLY).
    The text of the proposed rule change is available on the Exchange's 
website at <a href="https://listingcenter.nasdaq.com/rulebook/phlx/rulefilings">https://listingcenter.nasdaq.com/rulebook/phlx/rulefilings</a>, 
and at the principal office of the Exchange.

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
    Phlx proposes to amend the following Rules: Options 1, Section 1, 
Applicability, Definitions and References; Options 2, Section 1, 
Application for Approval as an SQT, RSQT, or RSQTO and Assignment in 
Options; Options 4A, Section 6, Position Limits; Options 7, Section 1, 
General Provisions; and Options 8, Section 11, Floor Market Maker and 
Lead Market Maker Appointment, Section 25, Floor Allocation, and 
Section 39, B-6, Priority of Options Orders for Equity Options, Index 
Options and U.S. Dollar-Settled Foreign Currency Options by Account 
Type (EQUITY OPTION, INDEX OPTION AND U.S. DOLLAR-SETTLED FOREIGN 
CURRENCY OPTION ONLY).
Alphabetize Definitions and Amend Rule Citations
    The Exchange proposes to amend Options 1, Section 1, Applicability, 
Definitions and References, to alphabetize the defined terms and make 
corresponding rule citation corrections at: Options 2, Section 1 
(Application for Approval as an SQT, RSQT, or RSQTO and Assignment in 
Options); Options 7, Section 1 (General Provisions); and Options 8, 
Section 11 (Floor Market Maker and Lead Market Maker Appointment). The 
Exchange also proposes to amend Options 1, Section 1(b)(49) to change 
``an'' to ``a'' within the description. These proposed amendments are 
non-substantive.
Remove Extraneous Text
    The Exchange proposes to remove extraneous words from Options 4A, 
Section 6, Options Index Rules. The phrase ``in excess of 100,000 
contracts for its own account or for the account of a customer'' is 
repeated twice in a row within the rule text. The Exchange proposes to 
remove the inadvertently repeated text. This proposed amendment is non-
substantive.
Undefined Term and Conforming Usage of Term
    The Exchange proposes to amend Options 8, Section 25, Floor 
Allocation, to replace the legacy term ``Off-Floor Broker-Dealer'' with 
``broker-dealer.'' The term ``Off-Floor Broker-Dealer'' was removed 
from Phlx's Rules in 2025.\3\ Phlx noted in that rule proposal that 
off-floor broker-dealers should be treated the same as other market 
participants. Therefore, Phlx believes the term ``broker-dealer'' is 
the appropriate replacement for this term because the term ``Off-Floor 
Broker-Dealer'' was not meant to refer to any specific floor 
participant currently defined in the

[[Page 55131]]

floor trading rules. The Exchange also proposes to lowercase ``Limit 
Orders'' to conform the use of the term Options 8 and remove the dated 
reference to Options 1, Section 1(b)(34). The Exchange also proposes to 
replace the lowercase ``off-floor broker-dealer'' references in Options 
8, Section 39 at B-6, Priority of Options Orders for Equity Options, 
Index Options and U.S. Dollar-Settled Foreign Currency Options by 
Account Type (EQUITY OPTION, INDEX OPTION AND U.S. DOLLAR-SETTLED 
FOREIGN CURRENCY OPTION ONLY) with ``broker-dealer'' to conform the 
terms and remove the references to ``off-floor broker-dealer.'' The 
Exchange also proposes to remove the dated reference to Options 3, 
Section 7(b)(i)(C).
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    \3\ See Securities Exchange Act Release No. 101989 (December 30, 
2024), 89 FR 106888 (December 31, 2024) (SR-Phlx-2024-71). The term 
``Off-Floor Broker-Dealer Order'' meant an order delivered from off 
the floor of the Exchange by or on behalf of a broker-dealer for the 
proprietary account(s) of such broker-dealer, including an order for 
a market maker located on an exchange or trading floor other than 
the Exchange's trading floor delivered electronically for the 
proprietary account(s) of such market maker.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\4\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\5\ 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. 
The Exchange believes that each of the proposed non-substantive 
amendments furthers these objectives by improving the clarity, 
accuracy, and internal consistency of the Exchange's rulebook, on which 
members, member organizations, and other market participants rely. The 
proposed amendments correct organizational, drafting, grammatical, and 
terminology errors without altering the substance of any rule.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
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    The proposal to alphabetize the defined terms in Options 1, Section 
1, Applicability, Definitions and References, and to make corresponding 
rule citation corrections at Options 2, Section 1, Options 7, Section 
1, and Options 8, Section 11 should make it easier for market 
participants to locate the defined terms, and the amendments also 
ensure that cross-references throughout the rulebook accurately point 
to the renumbered definitions. The related amendment to Options 1, 
Section 1(b)(49) to change ``an'' to ``a'' is a grammatical correction 
that improves the readability of that provision.
    The proposal to eliminate a repetition of the phrase ``in excess of 
100,000 contracts for its own account or for the account of a 
customer'' is consistent with the Act because the repetition could 
create confusion among members and member organizations regarding their 
reporting obligations for options on market indexes.
    The proposal to replace the legacy term ``Off-Floor Broker-Dealer'' 
and its lowercase variants (``off-floor broker-dealer'') with ``broker-
dealer'' in Options 8, Section 25, Floor Allocation, and Options 8, 
Section 39 at B-6, Priority of Options Orders for Equity Options, Index 
Options and U.S. Dollar-Settled Foreign Currency Options by Account 
Type, conforms these floor rules to the Exchange's current rulebook. 
The defined term ``Off-Floor Broker-Dealer'' was removed from Phlx's 
Rules in 2025, and its continued use in Options 8, Section 25 and 
Section 39 at B-6 could confuse members and member organizations 
regarding the class of participants to which the applicable allocation 
and priority provisions refer. Replacing this legacy term with 
``broker-dealer'' protects investors and the public interest by 
ensuring that the Exchange's floor rules reference a class of market 
participants that is currently used throughout the rulebook, consistent 
with the Exchange's stated intent, when it removed the ``Off-Floor 
Broker-Dealer'' definition, that off-floor broker-dealers be treated 
the same as other market participants. Finally, lowercasing ``Limit 
Order'' and removing dated references is consistent with the Act 
because it will conform the Rules and remove confusion.

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. The proposed amendments are 
non-substantive. Alphabetizing the defined terms in Options 1, Section 
1 and updating the corresponding rule citations at Options 2, Section 
1, Options 7, Section 1, and Options 8, Section 11, correcting the 
article in Options 1, Section 1(b)(49), removing the inadvertently 
duplicative phrase in Options 4A, Section 6, and replacing the legacy 
term ``Off-Floor Broker-Dealer'' and its lowercase variants with 
``broker-dealer'' in Options 8, Section 25 and Options 8, Section 39 at 
B-6 are corrective and organizational changes that leave the substance 
of each affected rule unchanged. The proposed amendments will apply 
uniformly to all similarly situated members and member organizations. 
For these reasons, the Exchange does not believe that the proposed rule 
change will impose any burden on intra-market or inter-market 
competition.

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 \6\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\7\
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    \6\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \7\ 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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    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="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#83f1f6efe6aee0eceeeee6edf7f0c3f0e6e0ade4ecf5"><span class="__cf_email__" data-cfemail="c0b2b5aca5eda3afadada5aeb4b380b3a5a3eea7afb6">[email&#160;protected]</span></a>. Please include 
file number SR-Phlx-2026-52 on the subject line.

Paper Comments

    <bullet> Send paper comments in triplicate to Secretary, Securities 
and Exchange

[[Page 55132]]

Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to file number SR-Phlx-2026-52. 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 filing 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-2026-52 and should be submitted on 
or before September 16, 2026.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2026-17361 Filed 8-25-26; 8:45 am]
BILLING CODE 8011-01-P


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