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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 [www.gpo.gov]
[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 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: (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

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-Phlx-2024-53 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-2024-53. 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 (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-2024-53 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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