Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices 68885 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3Nasdaq-100 Index options trade under the 

symbol (‘‘NDX’’). 

4See Securities Exchange Act Release No. 98451 

(September 20, 2023), 88 FR 66088 (September 26, 

2023) (SR–Phlx–2023–07) (Order Granting 

Approval of a Proposed Rule Change, as Modified 

by Amendment No. 1, to Make Permanent Certain 

P.M.-Settled Pilots). 

5A description of the Nasdaq-100 is available on 

Nasdaq’s website at https://indexes.

nasdaqomx.com/docs/methodology_NDX.pdf. 

6See Securities Exchange Act Release No. 81293 

(August 2, 2017), 82 FR 37138 (August 8, 2017) 

(approving SR–Phlx–2017–04) (Order Granting 

Approval of a Proposed Rule Change, as Modified 

by Amendment Nos. 1 and 2, To Permit the Listing 

and Trading of P.M.-Settled Nasdaq-100 Index 

Options on a Pilot Basis). 

7See Securities Exchange Act Release Nos. 84685 

(November 29, 2019), 83 FR 62942 (December 6, 

2018) (SR–Phlx–2018–76) (Notice of Filing and 

Immediate Effectiveness of Proposed Rule Change 

To Amend the Pilot Period for the Listing of P.M.- 

Settled Nasdaq-100 Index Options Expiring on the 

Third Friday of the Month) and 85692 (April 18, 

2019), 84 FR 17213 (April 24, 2019) (SR–Phlx– 

2019–16) (Notice of Filing and Immediate 

Effectiveness of Proposed Rule Change To Extend 

the Pilot Period for the Listing of P.M.-Settled 

Nasdaq-100 Index Options Expiring on the Third 

Friday of the Month). 

8See Securities Exchange Act Release No. 87517 

(November 13, 2019), 84 FR 63910 (November 19, 

2023) (SR–Phlx–2019–49) (Notice of Filing and 

Immediate Effectiveness of Proposed Rule Change 

To Remove Rule Text From Phlx Rule 1101A). 

9Cboe also lists a.m.-settled S&P 500 Index 

options that have standard third-Friday expirations. 

See Cboe Rule 4.10(e). Cboe’s third-Friday-of-themonth pilot was recently approved. See Securities 

Exchange Act Release No. 98454 (September 20, 

2023) (SR–CBOE–2023–005) (Order Granting 

Approval of a Proposed Rule Change, as Modified 

by Amendment No. 1, to Make Permanent the 

Operation of the Program that Allows the Exchange 

to List P.M.-Settled Third Friday-of-the-Month S&P 

500 Stock Index Options (‘‘SPX’’) Series). 

10See Options 3, Section 3, Minimum 

Increments. 

11See Options 4A, Section 12(a)(3). 

12The Exchange proposes the same expiration 

month options for NDXP as are permitted for the 

Nasdaq-100 Index, since both options classes are 

derived from the Nasdaq-100 Index. 

13Options 4A, Section 12(b) provides that after a 

particular class of stock index options has been 

approved for listing and trading on the Exchange, 

the Exchange shall from time to time open for 

trading series of options therein. Within each 

approved class of stock index options, the Exchange 

shall open for trading a minimum of one expiration 

month and series for each class of approved stock 

Continued 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98644; File No. SR–Phlx– 

2023–45] 

Self-Regulatory Organizations; Nasdaq 

PHLX LLC; Notice of Filing of 

Proposed Rule Change To Permit the 

Listing and Trading of P.M.-Settled 

Nasdaq-100 Index Options With a 

Third-Friday-of-the-Month Expiration 

September 29, 2023. 

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 

September 28, 2023, 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to permit the 

listing and trading of p.m.-settled 

Nasdaq-100 Index® options 3 with a 

third-Friday-of-the-month expiration. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/phlx/rules, 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 

Phlx proposes to amend its rules to 

permit the listing and trading of p.m.- 

settled Nasdaq-100 Index options with a 

third-Friday-of-the-month expiration 

date. The Exchange notes that p.m.- 

settled options were recently approved 

and included a p.m.-settled thirdFriday-of-the-month expiration for 

trading of options based on 1/100 the 

value of the Nasdaq-100 Index.4

By way of background, the Nasdaq100 Index, a modified market 

capitalization-weighted index, includes 

100 of the largest non-financial 

companies listed on The Nasdaq Stock 

Market LLC, based on market 

capitalization. It does not contain 

securities of financial companies 

including investment companies. 

Security types generally eligible for the 

Nasdaq-100 Index include common 

stocks, ordinary shares, American 

Depository Receipts, and tracking 

stocks. Security or company types not 

included in the Nasdaq-100 Index are 

closed-end funds, convertible 

debentures, exchange traded funds, 

limited liability companies, limited 

partnership interests, preferred stocks, 

rights, shares or units of beneficial 

interest, warrants, units and other 

derivative securities.5 Today, the 

Exchange may list a.m.-settled thirdFriday-of-the-month expirations on 

Nasdaq-100 Index options. Previously, 

Phlx received approval to permit the 

listing and trading, on a pilot basis, of 

NASDAQ-100 options with p.m.-settled 

third-Friday-of-the-month expiration 

dates.6 The Exchange extended the pilot 

through May 6, 2019, and, subsequently 

through November 4, 2019, because 

p.m.-settled options on the Nasdaq-100 

Index had not yet been listed by Phlx.7

The Exchange did not renew this Pilot 

a third time and therefore the Pilot 

expired on November 4, 2019.8 Today, 

Cboe Exchange, Inc. (‘‘Cboe’’) lists thirdFriday p.m.-settled options on the 

Standard & Poor’s 500 Index (‘‘S&P 500 

Index’’) under the symbol ‘‘SPXW.’’ 9

At this time, the Exchange proposes to 

amend Options 4A, Section 12 to permit 

the listing of p.m.-settled third-Fridayof-the-month Expiration Dates under the 

trading symbol ‘‘NDXP.’’ Today, the 

Exchange may list a.m.-settled thirdFriday-of-the-month expirations on 

Nasdaq-100 Index options. With this 

proposal, the Exchange would have 

third-Friday-of-the-month expirations 

on Nasdaq-100 Index options that are 

both a.m.-settled and p.m.-settled on the 

same day. The conditions for listing 

p.m.-settled third-Friday-of-the-month 

expirations on Nasdaq-100 Index 

options will be similar to those for a.m.- 

settled third-Friday-of-the-month 

expirations on Nasdaq-100 Index 

options. 

The proposed contract would use a 

$100 multiplier, and the minimum 

trading increment would be $0.05 for 

options trading below $3.00 and $0.10 

for all other series.10 Strike price 

intervals would be set at no less than 

$2.50.11 Consistent with existing rules 

for index options, the Exchange would 

allow up to nine near-term expiration 

months 12 as well as LEAPS.13 The 


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68886 Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices 

index options and may also open for trading series 

of options having not less than twelve and up to 

60 months to expiration (long-term options series) 

as provided in subparagraph (b)(2). Prior to the 

opening of trading in any series of stock index 

options, the Exchange shall fix the expiration 

month and exercise price of option contracts 

included in each such series. Further, Options 4A, 

Section 12(b)(2) provides that the Exchange may 

list, with respect to any class of stock index options 

or Nasdaq-100® Volatility Index options, series of 

options having not less than twelve and up to 60 

months to expiration, adding up to ten expiration 

months. Such series of options may be opened for 

trading simultaneously with series of options 

trading pursuant to this rule. Strike price intervals 

and continuity rules shall not apply to such options 

series until the time to expiration is less than 

twelve months. Bid/ask differentials for long-term 

options contracts are specified within Options 2, 

Section 4(c)(1)(A). 

14Options 4A, Section 12(b)(1) provides that 

additional series of stock index options of the same 

class may be opened for trading on the Exchange 

when the Exchange deems it necessary to maintain 

an orderly market, to meet customer demand or 

when the market price of the underlying index 

moves more than five strike prices from the initial 

exercise price or prices. The opening of a new series 

of options shall not affect the series of options of 

the same class previously opened. New series of 

options on an index may be added until the 

beginning of the month in which the options 

contract will expire. Due to unusual market 

conditions, the Exchange, in its discretion, may add 

a new series of options on indexes until the fourth 

business day prior to the business day of expiration, 

or, in the case of an index option contract expiring 

on a day that is not a business day, up to the fifth 

business day prior to expiration. 

15See Options 3, Section 12(b)(5)(A). 

16Options 3, Section 6(e) provides, 

‘‘Aggregation—Full value, reduced value, micro 

index value, long term and quarterly expiring 

options based on the same index shall be 

aggregated. Reduced value or mini-size and micro 

index contracts shall be aggregated with full value 

or full-size contracts and counted by the amount by 

which they equal a full value contract (e.g., a 

hundredth (1/100th)) value contracts equal one (1) 

full value contract). Positions in Short Term 

Options Series and Quarterly Options Series shall 

be aggregated with positions in options contracts of 

the same index. Nonstandard Expirations (as 

provided for in Options 4A, Section 5(b)(vii)) on a 

broad-based index shall be aggregated with option 

contracts on the same broad-based index and shall 

be subject to the overall position limit.’’ 

17The Exchange notes that NDXP will ordinarily 

cease at 4:00 p.m. on the day on which the exercisesettlement value is calculated. 

18The closing value of the Nasdaq-100 Index may 

change up until 17:15 Easter Time due to 

corrections to prices of the underlying component 

securities. 

19 15 U.S.C. 78f. 

20 15 U.S.C. 78f(b)(5). 

21 15 U.S.C. 78f(b)(8). 

22See supra note 4. 

23See supra note 6. 

24See supra note 7. 

25See supra note 8. 

26See supra note 9. 

product would have European-style 

exercise. Because the product is based 

on the Nasdaq-100 Index there would be 

no position limits. Also, today, the 

Exchange notes that it has the flexibility 

to open for trading additional series in 

response to customer demand.14

NDXP options are series of the NDX 

options class. Currently, these NDXP 

options may expire any day of the week, 

Mondays, Tuesdays, Wednesdays, 

Thursdays, Fridays, as applicable (other 

than third-Friday-of-the-month), and the 

last trading day of the month.15 ThirdFriday p.m.-settled options trading 

under the NDXP symbol will be a new 

type of series under the Nasdaq-100 

Index options class and not a new 

options class, therefore all third-Friday 

p.m.-settled NDXP options will be 

aggregated together with all other 

standard expirations for applicable 

reporting and other requirements.16

As with the Nasdaq-100 Index, 

whenever the Exchange determines that 

additional margin is warranted in light 

of the risks associated with an underhedged NDXP option position, 

including third-Friday-of-the-month 

p.m.-settled NDXP, the Exchange may 

consider imposing additional margin 

upon the account maintaining such 

under-hedged position pursuant to its 

authority pursuant to under Exchange 

Rules Options 6E, Section 2. The trading 

hours for NDXP, including third-Fridayof-the-month p.m.-settled NDXP, will be 

from 9:30 a.m. to 4:15 p.m. Eastern 

Time.17

The Exchange proposes to amend 

Options 4A, Section 12(a)(6) to provide 

that in addition to a.m.-settled Nasdaq100 Index options approved for trading 

on the Exchange, the Exchange may also 

list options on the Nasdaq-100 Index 

whose exercise settlement value is the 

closing value of the Nasdaq-100 Index 

on the expiration day.18

The Exchange does not believe that 

any market disruptions will be 

encountered with the introduction of 

Nasdaq-100 Index options with thirdFriday-of-the-month p.m.-settled 

expiration dates. The Exchange will 

monitor for any such disruptions or the 

development of any factors that could 

cause such disruptions. 

The adoption of trading third-Fridayof-the-month p.m.-settled options on the 

Nasdaq-100 Index on the same exchange 

that lists third-Friday-of-the-month 

a.m.-settled options on the Nasdaq-100 

Index would provide greater spread 

opportunities. This manner of trading in 

different products allows a market 

participant to utilize different expiration 

times, providing expanded trading 

opportunities. In the options market 

currently, market participants regularly 

trade similar or related products in 

conjunction with each other, which 

contributes to overall market liquidity. 

The Exchange represents that it has 

sufficient capacity to handle additional 

traffic associated with listing thirdFriday-of-the-month p.m.-settled 

options, and that it has in place 

adequate surveillance procedures to 

monitor trading in these options thereby 

helping to ensure the maintenance of a 

fair and orderly market. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6 of the Act,19

in general, and with Section 6(b)(5) of 

the Act,20 in that it is designed to 

promote just and equitable principles of 

trade, to foster cooperation and 

coordination with persons engaged in 

regulating, clearing, settling, processing 

information with respect to, and 

facilitating transactions in securities, to 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest; and is not designed to 

permit unfair discrimination between 

customers, issuers, brokers, or dealers, 

or to regulate by virtue of any authority 

conferred by the Act matters not related 

to the purposes of the Act or the 

administration of the Exchange. The 

Exchange believes that the proposed 

rule change is also consistent with 

Section 6(b)(8) of the Act 21 in that it 

does not impose any burden on 

competition not necessary or 

appropriate in furtherance of the 

purposes of the Act. 

P.M.-settled options were recently 

approved and included a p.m.-settled 

third-Friday-of-the-month expiration for 

trading of options on XND.22

Previously, Phlx received approval to 

permit the listing and trading, on a pilot 

basis, of NASDAQ-100 options with 

p.m.-settled third-Friday-of-the-month 

expiration dates.23 The Exchange 

extended the pilot through May 6, 2019, 

and, subsequently through November 4, 

2019, because p.m.-settled options on 

the NASDAQ–100 Index had not yet 

been listed by Phlx.24 The Exchange did 

not renew this Pilot a third time and 

therefore the Pilot expired on November 

4, 2019.25 Today, Cboe lists third-Friday 

p.m.-settled options on the S&P 500 

Index under the symbol ‘‘SPXW.’’ 26 For 

these reasons, the Exchange desires to 

list a p.m.-settled third-Friday-of-themonth expiration for trading of options 

on the Nasdaq-100 Index. The Exchange 

believes that listing this expiry would 

not have any adverse effects or impact 

on market volatility and the operation of 

fair and orderly markets on the 

underlying cash market at or near the 


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Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices 68887 

27See supra note 12. 28 17 CFR 200.30–3(a)(12). 

close of trading in its Nasdaq-100 Index 

options. 

Specifically, the Exchange believes 

that the introduction of Nasdaq-100 

Index options with third-Friday-of-themonth p.m.-settled expiration dates will 

attract order flow to the Exchange, 

increase the variety of listed options to 

investors, and provide a valuable hedge 

tool to investors. Further, the Exchange 

believes this proposal will ensure 

market participants, particularly retail 

customers, have seamless access to 

p.m.-settled Nasdaq-100 Index options 

expiring every Friday of the month, 

which helps to remove impediments to 

and perfect the mechanism of a free and 

open market. The Exchange believes the 

proposed rule change will help to 

protect investors and the public interest 

by allowing market participants to enter 

options positions with the same 

underlying in one symbol that spans 

every Friday expiration in a month, thus 

providing a more efficient way to gain 

exposure and hedge risk. 

The adoption of trading third-Fridayof-the-month p.m.-settled options on the 

Nasdaq-100 Index on the same exchange 

that lists third-Friday-of-the-month 

a.m.-settled options on the Nasdaq-100 

Index would provide greater spread 

opportunities. This manner of trading in 

different products allows a market 

participant to utilize different expiration 

times, providing expanded trading 

opportunities. In the options market 

currently, market participants regularly 

trade similar or related products in 

conjunction with each other, which 

contributes to overall market liquidity. 

Third-Friday p.m. settled options 

trading under the NDXP symbol will be 

a new type of series under the Nasdaq100 Index options class and not a new 

options class, therefore all third-Friday 

p.m.-settled NDXP options will be 

aggregated together with all other 

standard expirations for applicable 

reporting and other requirements.27

The Exchange does not believe that 

any market disruptions will be 

encountered with the introduction of 

Nasdaq-100 Index options with thirdFriday-of-the-month expiration dates. 

The Exchange will monitor for any such 

disruptions or the development of any 

factors that could cause such 

disruptions. 

Finally, the Exchange represents that 

it has sufficient capacity to handle 

additional traffic associated with this 

new listing, and that it has in place 

adequate surveillance procedures to 

monitor trading in these options thereby 

helping to ensure the maintenance of a 

fair and orderly market. 

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 Exchange does not believe the 

rule change will impose a burden on 

intramarket competition because all 

market participants would have access 

to p.m.-settled Nasdaq-100 Index 

options expiring every Friday of the 

month and would be able to trade them 

under the NDXP symbol. The proposal 

will not impose a burden on intermarket 

competition because the options 

affected by this proposal are exclusive 

to the Exchange. Other options 

exchange may elect to adopt a similar 

expiry for a product listed on their 

markets. 

Additionally, the Exchange does not 

believe the proposal will impose any 

burden on intermarket competition as 

market participants on other exchanges 

are welcome to become members and 

trade at Phlx if they determine that this 

proposed rule change has made Phlx 

more attractive or favorable. 

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 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the Exchange consents, the Commission 

will: 

A. by order approve or disapprove 

such proposed rule change, or 

B. institute proceedings to determine 

whether the proposed rule change 

should be 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 

• Use the Commission’s internet 

comment form (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

Phlx–2023–45 on the subject line. 

Paper Comments 

• 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–2023–45. 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 (https://www.sec.gov/ 

rules/sro.shtml). 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–2023–45 and should be 

submitted on or before October 25, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.28

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–22007 Filed 10–3–23; 8:45 am] 

BILLING CODE 8011–01–P 


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