Federal Register / Vol. 89, No. 214 / Tuesday, November 5, 2024 / Notices 87919 

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

2 17 CFR 240.19b–4. 

3The term ‘‘Clearing Member’’ means a member 

organization which has been admitted to 

membership in The Options Clearing Corporation 

pursuant to the provisions of the rules of The 

Options Clearing Corporation. See Options 1, 

Section 1(b)(10). 

4See Nasdaq General 3, Rule 1032. Phlx General 

3 Rules are incorporated by reference to Nasdaq 

General 3 Rules. See also Nasdaq’s membership 

form (https://www.nasdaqtrader.com/content/ 

marketregulation/membership/ 

NASDAQSROMembershipApplicationFinal.pdf) 

which states that all options participants must 

provide an executed clearing letter of guarantee. 

5See Phlx Options 6D, Section 1(a)(iii) provides 

that each member organization or foreign currency 

options participant organization exempt from SEC 

Rule 15c3–1 and whose principal business is as a 

registered options trader on the Exchange, shall, 

subject to subparagraph (iv) below, at all times 

maintain a minimum of $25,000 in net liquid assets. 

6See Phlx Options 6D Section 1(a)(iv). This rule 

is intended to make clear that member 

organizations or other participants that are exempt 

from SEC Rule 15c3–1 must also have a letter of 

guarantee. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

under the PRA unless it displays a 

currently valid OMB control number. 

The public may view background 

documentation for this information 

collection at the following website: 

www.reginfo.gov. Find this particular 

information collection by selecting 

‘‘Currently under 30-day Review—Open 

for Public Comments’’ or by using the 

search function. Written comments and 

recommendations for the proposed 

information collection should be sent 

within 30 days of publication of this 

notice by December 5, 2024 to (i) 

www.reginfo.gov/public/do/PRAMain or 

MBX.OMB.OIRA.SEC_desk_officer@

omb.eop.gov, and (ii) Austin Gerig, 

Director/Chief Data Officer, Securities 

and Exchange Commission, c/o Tanya 

Ruttenberg, 100 F Street NE, 

Washington, DC 20549, or by sending an 

email to: PRA_Mailbox@sec.gov. 

Dated: October 31, 2024. 

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2024–25670 Filed 11–4–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101482; File No. SR–Phlx– 

2024–56] 

Self-Regulatory Organizations; Nasdaq 

PHLX LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Adopt New Rules at 

Options 6 and 6C 

October 30, 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 October 

18, 2024, Nasdaq PHLX LLC (‘‘Phlx’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) a 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to adopt a 

new rule titled ‘‘Letters of Guarantee’’ in 

Options 6, Options Trade 

Administration, and a new rule entitled 

‘‘Margin Required Is Minimum’’ in 

Options 6C, Margins. 

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 

The Exchange proposes to adopt a 

new rule titled ‘‘Letters of Guarantee’’ in 

Options 6, Options Trade 

Administration and a new rule entitled 

‘‘Margin Required Is Minimum’’ in 

Options 6C, Margins. Each proposed 

change is described below. 

Options 6 

The Exchange proposes to adopt a 

new rule titled, ‘‘Letters of Guarantee,’’ 

at Options 6, Section 4, which is 

currently reserved. The adoption of 

Options 6, Section 4 is not intended to 

expand the current requirements 

imposed on members and member 

organizations, rather it is intended to 

make clear the current requirement to 

maintain a letter of guarantee. By way 

of background, the letter of guarantee 

provides that the Clearing Member 3

accepts financial responsibility for all 

Exchange transactions made by the Phlx 

member organization on whose behalf 

the Clearing Member submits the letter 

of guarantee. Clearing Members 

guarantee all transactions on behalf of a 

member and member organizations, and 

therefore bear the risk associated with 

those transactions. 

Today, all Phlx members and member 

organizations are required to have a 

membership in, or access arrangement 

with a participant of a clearing agency 

registered with the Commission that 

maintains facilities through which 

compared trades may be settled.4

Further, today, Phlx Options 6D, 

Section 1 makes clear that each member 

organization referred to in paragraph 

(iii) 5 shall at all times maintain positive 

net liquid assets and, in its clearing 

account(s), positive equity, provided 

that said organization has filed with the 

Exchange a letter of guarantee issued on 

its behalf by a clearing member 

organization of this Exchange which is 

also a clearing member of The Options 

Clearing Corporation.6 At this time, the 

Exchange proposes to adopt a ‘‘Letters 

of Guarantee’’ rule at Options 6, Section 

4, which is substantively identical to 

Nasdaq ISE, LLC (‘‘ISE’’) Options 6, 

Section 4, to make clear that member 

organizations have an obligation to 

obtain a letter of guarantee. 

Similar to ISE, the Exchange proposes 

to specifically note at Options 6, Section 

4(a) that no Phlx Market Maker shall 

make any transactions on the Exchange 

unless a letter of guarantee has been 

issued for such member organization by 

a Clearing Member and filed with the 

Exchange, and unless such letter of 

guarantee has not been revoked 

pursuant to paragraph (c) of Options 6, 

Section 4. This language is consistent 

with Phlx General 3, Rule 1032 and 

Phlx Options 6D, Section 1(a)(iv), and 

the language is substantively identical 

to ISE Options 6, Section 4(a). Further, 

the Exchange proposes to state at 

Options 6, Section 4(b) that a letter of 

guarantee shall provide that the issuing 

Clearing Member accepts financial 

responsibilities for all Exchange 

transactions made by the guaranteed 

member organization. This language is 

consistent with Phlx Options 6D, 

Section 1(a)(iv), and the language is 

substantively identical to ISE Options 6, 


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87920 Federal Register / Vol. 89, No. 214 / Tuesday, November 5, 2024 / Notices 

7Nasdaq GEMX, LLC (‘‘GEMX’’) and Nasdaq 

MRX, LLC (‘‘MRX’’) incorporate by reference ISE’s 

Options 6 rules. 

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

9 15 U.S.C. 78f(b)(5). 

10 GEMX and MRX incorporate by reference ISE’s 

Options 6 rules. 

11 Id. 

12The Exchange notes that higher margin 

requirements would be imposed in times of market 

volatility and with respect to a particular 

product(s). 

Section 4(b). Finally, the Exchange 

proposes to state at Options 6, Section 

4(c) that a letter of guarantee filed with 

the Exchange shall remain in effect until 

a written notice of revocation has been 

filed with the Exchange. A revocation 

shall in no way relieve a Clearing 

Member of responsibility for 

transactions guaranteed prior to the 

effective date of such revocation. This 

language is consistent with Phlx 

Options 6D, Section 1(a)(iv), and the 

language is substantively identical to 

ISE Options 6, Section 4(c). 

The proposed rule creates a new rule, 

separate and apart from the financial 

responsibility rules, which makes clear 

a Market Maker’s obligation to obtain a 

letter of guarantee. Further, the rule will 

further harmonize the Exchange’s rule 

with that of other Nasdaq affiliated 

exchanges.7

Options 6C 

The Exchange proposes to adopt a 

new rule titled, ‘‘Margin Required Is 

Minimum,’’ at Options 6C, Section 5, 

which is currently reserved. By way of 

background, margin requirements help 

to offset the risk that brokers take when 

allowing investors to use margin. There 

are two types of margin requirements: 

initial margin and maintenance margin. 

Initial margin is the minimum amount 

of equity required to open a new margin 

position and maintenance margin is the 

minimum amount of equity that must be 

maintained in the account at all times. 

This proposed rule would be 

substantively identical to Nasdaq BX, 

Inc. (‘‘BX’’) and The Nasdaq Options 

Market LLC (‘‘NOM’’) Options 6C, 

Section 5. 

The Exchange proposes to provide at 

Phlx Options 6C, Section 5(a) that the 

amount of margin prescribed by Options 

6C is the minimum which must be 

required initially and subsequently 

maintained with respect to each account 

affected thereby; but nothing in these 

Rules shall be construed to prevent a 

member organization from requiring 

margin in an amount greater than that 

specified. Further, the Exchange 

proposes to provide at Phlx Options 6C, 

Section 5(b) that the Exchange may at 

any time impose higher margin 

requirements with respect to such 

positions when it deems such higher 

margin requirements to be advisable. 

Today, Phlx Options 6C, Section 3(a) 

provides that no member organization 

shall effect a transaction or accept or 

carry an account for a customer, 

whether a member or non-member of 

the Exchange, without proper and 

adequate margin in accordance with the 

Margin Rules set forth in Options 6C, 

Sections 3 and 7 and Regulation T. The 

Exchange also proposes to amend Phlx 

Options 6C, Section 3(a) to note 

compliance with proposed Section 5. 

With this rule, Phlx, similar to BX and 

NOM, would be able to impose higher 

margin requirements. This rule will 

further harmonize the Exchange’s rule 

with that of other Nasdaq affiliated 

exchanges. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,8 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,9

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. 

Options 6 

The Exchange’s proposal to adopt a 

new rule titled, ‘‘Letters of Guarantee,’’ 

at Options 6, Section 4, is consistent 

with the Act because it will create a new 

rule, separate and apart from the 

financial responsibility rules, that 

makes clear a Market Maker’s current 

obligation to obtain a letter of guarantee. 

Additionally, the proposed rule will 

harmonize Phlx’s rule text with other 

Nasdaq affiliated exchanges 10 with 

respect to requirements to obtain a letter 

of guarantee. The proposed rule makes 

clear that Market Makers are required to 

obtain a letter of guarantee from a 

Clearing Member. Similar to Phlx 

General 3, Rule 1032, which specifies 

membership requirements, and Phlx 

Options 6D, Section 1(a)(iv), which 

govern financial responsibilities, each 

Market Maker must obtain a letter of 

guarantee from a Clearing Member, and 

such letter must be filed with the 

Exchange. Additionally, the letter of 

guarantee shall provide that the issuing 

Clearing Member accepts financial 

responsibilities for all Exchange 

transactions made by the guaranteed 

member organization. Finally, the letter 

of guarantee shall remain in effect until 

a written notice of revocation has been 

filed with the Exchange and specifies 

that it in no way relieves a Clearing 

Member of responsibility for 

transactions guaranteed prior to the 

effective date of such revocation. The 

proposed rule will further harmonize 

the Exchange’s rule with that of other 

Nasdaq affiliated exchanges.11

Options 6C 

The Exchange’s proposal to adopt a 

new rule, titled ‘‘Margin Required Is 

Minimum,’’ at Options 6C, Section 5 is 

consistent with the Act as it would 

permit Phlx to impose higher margin 

requirements 12 similar to other options 

markets; the proposed rule would be 

substantively identical to BX and NOM 

Options 6C, Section 5. As proposed in 

Options 6C, Section 5(a), the amount of 

margin prescribed by Options 6C would 

be the minimum which must be 

required initially and subsequently with 

respect to each account affected thereby; 

but nothing in these Rules shall be 

construed to prevent a member 

organization from requiring margin in 

an amount greater than that specified. 

As proposed in Options 6C, Section 

5(b), the Exchange may at any time 

impose higher margin requirements 

with respect to such positions when it 

deems such higher margin requirements 

to be advisable. Today, Phlx Options 6C, 

Section 3(a) provides that no member 

organization shall effect a transaction or 

accept or carry an account for a 

customer, whether a member or nonmember of the Exchange, without 

proper and adequate margin in 

accordance with the Margin Rules set 

forth in Options 6C, Sections 3 and 7 

and Regulation T. The Exchange’s 

proposal to amend Phlx Options 6C, 

Section 3(a) to note compliance with 

proposed Section 5 will make clear the 

applicable margin rules that a member 

organization must comply with when 

trading on Phlx. This rule will further 

harmonize the Exchange’s rule with that 

of other Nasdaq affiliated exchanges. 

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. 

Options 6 

The Exchange’s proposal to adopt a 

new rule titled, ‘‘Letters of Guarantee,’’ 

at Options 6, Section 4, does not impose 

an intra-market burden on competition 

because all Market Makers will have to 

uniformly comply with this proposed 

rule which makes clear the current 

requirement that each member 

organization must provide a letter of 


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Federal Register / Vol. 89, No. 214 / Tuesday, November 5, 2024 / Notices 87921 

13See supra note 4. 

14See supra note 6. 

15 15 U.S.C. 78s(b)(3)(A)(iii). 

16 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. 

17 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A)(ii). 

4 17 CFR 240.19b–4(f)(2). 

guarantee from a Clearing Member as 

specified in the membership 

requirements 13 and Options 6D, Section 

1.14 The Exchange notes that this rule 

would apply the same standards to 

Market Makers similar to ISE. 

The Exchange’s proposal to adopt a 

new rule titled, ‘‘Letters of Guarantee,’’ 

at Options 6, Section 4, does not impose 

an inter-market burden on competition 

because other options exchanges may 

adopt a similar rule. Today, ISE has 

substantively identical rule at Options 

6, Section 4. 

Options 6C 

The Exchange’s proposal to adopt a 

new rule titled, ‘‘Margin Required Is 

Minimum,’’ at Options 6C, Section 5 

does not impose an intra-market burden 

on competition because all member 

organizations would be subject to the 

proposed rule and the application of the 

rule would apply uniformly to all 

member based on the affected product. 

The proposed rule is substantively 

identical to BX and NOM Options 6C, 

Section 5. 

The Exchange’s proposal to adopt a 

new rule titled, ‘‘Margin Required Is 

Minimum,’’ at Options 6C, Section 5 

does not impose an inter-market burden 

on competition because other options 

exchanges may adopt a similar rule. 

Today, BX and NOM have a 

substantively identical rule at Options 

6C, Section 5. 

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 15 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.16

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 

• 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–2024–56 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–2024–56. 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–2024–56 and should be 

submitted on or before November 26, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–25638 Filed 11–4–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101480; File No. SR–BOX– 

2024–25] 

Self-Regulatory Organizations; BOX 

Exchange LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend the Fee 

Schedule for Trading on the BOX 

Options Market LLC Facility (‘‘BOX’’) 

October 30, 2024 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on October 

15, 2024, BOX Exchange LLC (the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III, below, which Items have been 

prepared by the Exchange. The 

Exchange filed the proposed rule change 

pursuant to Section 19(b)(3)(A)(ii) of the 

Act,3 and Rule 19b–4(f)(2) thereunder,4

which renders the proposal effective 

upon filing with the Commission. 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 the Substance 

of the Proposed Rule Change 

The Exchange is filing with the 

Securities and Exchange Commission 

(‘‘Commission’’) a proposed rule change 

to amend the Fee Schedule to assess a 

$0.00 Complex Surcharge for certain 

Complex Order transactions on the BOX 

Options Market LLC (‘‘BOX’’) options 


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