41134 Federal Register / Vol. 86, No. 144 / Friday, July 30, 2021 / Notices 

32 Supra note 4. [sic]. 

33 See Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005). 

34 NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. 

Cir. 2010) (quoting Securities Exchange Act Release 

No. 59039 (December 2, 2008), 73 FR 74770, 74782– 

83 (December 9, 2008) (SR–NYSEArca–2006–21)). 

35 15 U.S.C. 78s(b)(3)(A). 36 17 CFR 240.19b–4(f). 

37 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

than 16% of the market share.32

Therefore, no exchange possesses 

significant pricing power in the 

execution of order flow. Indeed, 

participants can readily choose to send 

their orders to other exchange and offexchange venues if they deem fee levels 

at those other venues to be more 

favorable. Moreover, the Commission 

has repeatedly expressed its preference 

for competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. Specifically, in Regulation 

NMS, the Commission highlighted the 

importance of market forces in 

determining prices and SRO revenues 

and, also, recognized that current 

regulation of the market system ‘‘has 

been remarkably successful in 

promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 33 The 

fact that this market is competitive has 

also long been recognized by the courts. 

In NetCoalition v. Securities and 

Exchange Commission, the D.C. Circuit 

stated as follows: ‘‘[n]o one disputes 

that competition for order flow is 

‘fierce.’ . . . As the SEC explained, ‘[i]n 

the U.S. national market system, buyers 

and sellers of securities, and the brokerdealers that act as their order-routing 

agents, have a wide range of choices of 

where to route orders for execution’; 

[and] ‘no exchange can afford to take its 

market share percentages for granted’ 

because ‘no exchange possesses a 

monopoly, regulatory or otherwise, in 

the execution of order flow from broker 

dealers’. . . .’’.34 Accordingly, the 

Exchange does not believe its proposed 

fee change imposes any burden on 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange neither solicited nor 

received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 35 and paragraph (f) of Rule 

19b–4 36 thereunder. 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 will institute proceedings 

to determine whether the proposed rule 

change 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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

CboeEDGX–2021–034 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–CboeEDGX–2021–034. 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 (http://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 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–CboeEDGX–2021–034, and 

should be submitted on or before 

August 20, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.37

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–16228 Filed 7–29–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92496; File No. SR–Phlx– 

2021–42] 

Self-Regulatory Organizations; Nasdaq 

PHLX LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend the Opening 

Process 

July 26, 2021. 

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 July 19, 

2021, Nasdaq PHLX LLC (‘‘Phlx’’ or 

‘‘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 

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 amend 

Phlx Options 3, Section 8, ‘‘Options 

Opening Process.’’ 

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. 


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3The Exchange may designated a shorter time 

provided it is disseminated to membership on the 

Exchange’s website. 

4 In the case of index options, the timing is within 

two minutes of the receipt of the opening price in 

the underlying index or within two minutes of 

market opening for the underlying security in the 

case of U.S. dollar-settled foreign currency options. 

In both cases the Exchange may designated a 

shorter time provided it is disseminated to 

membership on the Exchange’s website. The 

Exchange proposes an amendment within Options 

3, Section 8(d)(i) as described below. 

5The Exchange proposes an amendment within 

Options 3, Section 8(d)(i)(B) as described below. 

6 In the case of index options, a Lead Market 

Maker must enter a Valid Width Quote in 90% of 

their assigned series, not later than one minute 

following the receipt of the opening price in the 

underlying index. The Lead Market Maker assigned 

in a particular U.S. dollar-settled foreign currency 

option must enter a Valid Width Quote, in 90% of 

their assigned series, not later than one minute after 

the announced market opening. See Options 3, 

Section 8(d)(iii). 

7 In the case of index options, Lead Market 

Makers must promptly enter a Valid Width Quote 

in the remainder of their assigned series, which did 

not open following the receipt of the opening price 

in the underlying index or, with respect to U.S. 

dollar-settled foreign currency options, following 

the announced market opening. See Options 3, 

Section 8(d)(iii). 

8BX Options 3, Section 8(a)(9) provides, ‘‘A 

‘Valid Width Quote’ is a two-sided electronic 

quotation, submitted by a Market Maker, quoted 

with a difference not to exceed $5 between the bid 

and offer regardless of the price of the bid. 

However, respecting in-the-money series where the 

market for the underlying security is wider than $5, 

the bid/ask differential may be as wide as the 

quotation for the underlying security on the 

primary market, or its decimal equivalent rounded 

down to the nearest minimum increment. The 

Exchange may establish differences other than the 

above for one or more series or classes of options.’’ 

See also Securities Exchange Act Release No. 89731 

(September 1, 2020), 85 FR 55524 (September 8, 

2020) (SR–BX–2020–016) (Order Approving 

Proposed Rule Change To Amend BX’s Opening 

Process in Connection With a Technology 

Migration). 

9Phlx Options 2, Section 4(c)(1) provides, 

‘‘Options on equities (including Exchange-Traded 

Fund Shares), index options and options on U.S. 

dollar-settled FCOs may be quoted electronically 

with a difference not to exceed $5 between the bid 

and offer regardless of the price of the bid, provided 

that the foregoing bid/ask differentials shall not 

apply to in-the-money series where the market for 

the underlying security is wider than the 

differentials set forth above. For such series, the 

bid/ask differentials may be as wide as the spread 

between the national best bid and offer in the 

underlying security. The Exchange may establish 

differences other than the above for one or more 

series or classes of options.’’ 

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 Options 3, 

Section 8, ‘‘Options Opening Process.’’ 

Specifically, the Exchange proposes to 

amend the definition of Valid Width 

Quote at Options 3, Section 8(a)(ix). 

Phlx’s Opening Process for an option 

series is conducted pursuant to Options 

3, Section 8 paragraphs (f)–(k), on or 

after 9:30 a.m. Eastern Time the ABBO, 

if any, is not crossed and the System has 

received, within two minutes 3 of the 

opening trade or quote on the market for 

the underlying security,4 a Valid Width 

Quote. The System will accept a Lead 

Market Maker’s Valid Width Quote or 

the Valid Width Quote of at least one 

Phlx Electronic Market Maker.5 Today, 

Phlx requires a Lead Market Maker to 

enter a Valid Width Quote in 90% of 

their assigned series, not later than one 

minute following the dissemination of a 

quote or trade by the market for the 

underlying security.6 Lead Market 

Makers must promptly enter a Valid 

Width Quote in the remainder of their 

assigned series, which did not open 

within one minute following the 

dissemination of a quote or trade by the 

market for the underlying security.7 In 

either case, the Lead Market Maker or 

Phlx Electronic Market Maker must 

enter a Valid Width Quote to open an 

options series. Phlx Options 3, Section 

8(a)(ix) defines a Valid Width Quote as 

follows: 

A Valid Width Quote is a two-sided 

electronic quotation submitted by a Phlx 

Electronic Market Maker that meets the 

following requirements: Options on equities 

and index options bidding and/or offering so 

as to create differences of no more than $.25 

between the bid and the offer for each option 

contract for which the prevailing bid is less 

than $2; no more than $.40 where the 

prevailing bid is $2 or more but less than $5; 

no more than $.50 where the prevailing bid 

is $5 or more but less than $10; no more than 

$.80 where the prevailing bid is $10 or more 

but less than $20; and no more than $1 where 

the prevailing bid is $20 or more, provided 

that, in the case of equity options, the bid/ 

ask differentials stated above shall not apply 

to in-the-money series where the market for 

the underlying security is wider than the 

differentials set forth above. For such series, 

the bid/ask differentials may be as wide as 

the quotation for the underlying security on 

the primary market, or its decimal equivalent 

rounded down to the nearest minimum 

increment. The Exchange may establish 

differences other than the above for one or 

more series or classes of options. 

The Exchange proposes to amend a 

Valid Width Quote to instead provide: 

A Valid Width Quote is a two-sided 

electronic quotation submitted by a Phlx 

Electronic Market Maker that meets the 

following requirements: Options on equities 

and index options bidding and/or offering so 

as to create differences of no more than $5, 

provided that, in the case of equity options, 

the bid/ask differentials stated above shall 

not apply to in-the-money series where the 

market for the underlying security is wider 

than the differentials set forth above. For 

such series, the bid/ask differentials may be 

as wide as the quotation for the underlying 

security on the primary market, or its 

decimal equivalent rounded down to the 

nearest minimum increment. The Exchange 

may establish differences other than the 

above for one or more series or classes of 

options. Such differences will be posted by 

the Exchange on its website. 

This proposed language is similar to 

Nasdaq BX, Inc. (‘‘BX’’).8 The Exchange 

proposes to widen the current bid/ask 

differentials for several reasons. 

First, the proposal would conform the 

Valid Width Quote definition of Phlx to 

that of BX. BX refers to a difference not 

to exceed $5 between the bid and offer 

within the description of a Valid Width 

Quote, similar to BX Options 2, Section 

4(f) and 5(d)(2) that describes intra-day 

quotes. By amending Phlx’s Valid Width 

Quote, the Exchange notes that the $5 

difference is akin to Phlx’s intra-day 

requirement within Phlx Options 2, 

Section 4(c)(1).9

Second, the proposed differential 

would simplify the differential for Lead 

Market Makers, who would continue to 

be required to submit a Valid Width 

Quote during the Opening Process in 

their assigned options series. Widening 

the differentials would allow Lead 

Market Makers, and Electronic Market 

Makers that elect to quote during the 

Opening Process, an ability to quote 

wider during the Opening Process when 

an underlying is volatile. Today, 

pursuant to Options 3, Section 8(a)(ix), 

the Exchange may establish differences 

other than the established bid/ask 

differentials for one or more series or 

classes of options. With this proposal, 

the Exchange is not amending its ability 

to continue to establish differences for 

one or more series or classes of options, 

rather the Exchange may continue to set 

other requirements pursuant to current 

Phlx Options 3, Section 8(a)(ix). Today, 

the Exchange has established Valid 

Width Quote differentials which differ 


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10See https://www.nasdaq.com/docs/2021/03/25/ 

PHLXSystemSettings.pdf. 

11 Id. 

12 15 U.S.C. 78f(b). 

13 15 U.S.C. 78f(b)(5). 

14 Id. 

15See supra note 10. 

16Today, Phlx, Nasdaq GEMX, LLC (‘‘GEMX’’), 

Nasdaq MRX, LLC (‘‘MRX’’), Nasdaq ISE, LLC 

(‘‘ISE’’), Miami International Securities Exchange, 

LLC (‘‘MIAX’’) and MIAX Emerald, LLC 

(‘‘Emerald’’) and are the only options markets that 

require a Primary Market Maker, or Lead Market 

Maker in the case of Phlx, to submit a quote to open 

an options series. 

17See supra note 8. 

18See supra note 9. 

19MIAX and Emerald require Market Makers to 

submit a valid width NBBO in the opening where 

the bid and offer of the NBBO differ no more than 

differences outlined in MIAX and Emerald Rule 

603(b)(4)(i). MIAX and Emerald Rule 603(b)(4)(i) 

provides that bidding and offering so as to create 

differences of no more than $5 between the bid and 

offer. Rule 603(b)(4)(ii) provides MIAX and Emerald 

may establish differences other than the bid/ask 

differentials described in (i) above for one or more 

option series or classes, respectively. See MIAX and 

Emerald Rules 503. 

20See Securities Exchange Act Release No. 87024 

(September 19, 2019), 84 FR 50545 (September 25, 

2019) (SR–Cboe–2019–059) (‘‘2019 Rule Change’’). 

21 Id. 

22 Id. 

from those described within Options 3, 

Section 8(a)(ix),10 they are: 

Bid price low 

end of 

Bid price high 

end of 

Maximum 

bid/ask 

differential 

$0.00 $1.99 $0.75 

2.00 4.99 1.20 

5.00 9.99 1.50 

10.00 19.99 2.40 

20.00 20.00+ 3.00 

Also, options with an expiration more 

than nine months away continue to be 

permitted a Valid Width Quote bid/ask 

differential of $5.00. The Exchange will 

continue to utilize the differentials 

currently posted on its website until 

such time as it provides notice to 

members and member organizations of a 

change. 

Third, the Exchange proposes to add 

rule text to state that such differences 

will be posted by the Exchange on its 

website.11 Posting the current 

differentials on its website would allow 

members and member organizations to 

easily refer to the quoting obligations for 

the Opening Process. 

Technical Amendment 

The Exchange proposes to add 

‘‘Eastern Time’’ after 9:30 a.m. and 

amend the word ‘‘currency’’ to 

security.’’ The Exchange proposes to 

amend ‘‘Quotes’’ to ‘‘Quote’’ within 

Options 3, Section 8(d)(i)(B). 

2. Statutory Basis 

The Exchange believes that its 

proposal to establish a $5 difference is 

consistent with Section 6(b) of the 

Act.12 Specifically, the Exchange 

believes the proposed rule change is 

consistent with the Section 6(b)(5) 13

requirements that the rules of an 

exchange be designed to prevent 

fraudulent and manipulative acts and 

practices, 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. 

Additionally, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) 14 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

The Exchange believes that the 

proposed $5 difference for the Valid 

Width Quote is more appropriate 

because it reflects the Exchange’s 

experience in administering the rule 

and would continue to give Market 

Makers flexibility including during the 

Opening Process. The Exchange notes 

that the current standard is not being 

applied as the Exchange has established 

Valid Width Quote differentials which 

differ from those described within 

Options 3, Section 8(a)(8).15 Widening 

the Valid Width Quote requirement 

would provide Lead Market Makers and 

Electronic Market Makers that elect to 

quote during the Opening Process, 

additional flexibility when submitting 

Valid Width Quotes during the Opening 

Process thereby allowing these Market 

Makers the ability to quote wider in 

instances where the Exchange has not 

established Valid Width Quote 

differentials which differ from those in 

the rule because volatile market 

conditions exist or there is news 

regarding an underlying security which 

may impact pricing. Lead Market 

Makers are integral to the Exchange’s 

Opening Process as Phlx is dependent 

on receiving a Valid Width Quote to 

open an options series. With this 

proposal, Lead Market Makers would 

continue to be required to submit a 

Valid Width Quote during the Opening 

Process in their assigned options 

series.16

The proposal would conform the 

Valid Width Quote definition of Phlx to 

that of BX.17 BX refers to a difference 

not to exceed $5 between the bid and 

offer within the description of a Valid 

Width Quote, similar to BX Options 2, 

Section 4(f) and 5(d)(2) that describes 

intra-day quotes. By amending Phlx’s 

Valid Width Quote, the Exchange notes 

that the $5 difference is akin to Phlx’s 

intra-day requirement within Phlx 

Options 2, Section 4(b)(4).18 Also, 

today, MIAX and Emerald require 

market makers to enter a valid width 

NBBO with a difference of no more than 

$5 between the bid and offer.19

Not all options markets have bid/ask 

differentials. In 2019, Cboe removed its 

quote width requirements while citing 

corresponding rules of its affiliated 

exchanges.20 Cboe noted in the 2019 

Rule Change that the current quote 

width requirement at the time for 

generally all classes was $10, however, 

its Market-Makers consistently 

maintained two-sided quotes that were 

much tighter than the required width. 

Cboe opined that, even if markets 

experienced periods of stress or 

volatility, they remained obligated to 

maintain two sided markets and engage 

in a course of dealings that must be 

reasonably calculated to contribute to 

the maintenance of a fair and orderly 

market, which includes refraining from 

making bids or offers that are 

inconsistent with such course of 

dealings and updating quotations in 

response to changed market 

conditions.21 Cboe noted that it did not 

believe that continuing to provide for a 

quote width requirement was necessary 

nor would it impact the maintenance of 

fair and orderly markets because 

Market-Makers already quoted at a bid/ 

ask spread much narrower than the 

requirements and were required to 

continuously fulfill their obligations to 

engage in a course of dealings 

reasonably calculated to contribute to 

the maintenance of a fair and orderly 

market.22


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23See Options 3, Section 8(a)(8), the Exchange 

may establish differences other than the established 

bid/ask differentials for one or more series or 

classes of options. 

24See MIAX and Emerald Rules 503. 

25See supra note 16. 

26 Id. 

27See supra note 16 citing the options markets 

that require bid/ask differentials. 

28See SR–ISE–2021–17, SR–GEMX–2021–07 and 

SR–MRX–2021–09. These rule changes are not yet 

noticed. 

29 15 U.S.C. 78s(b)(3)(A)(iii). 

30 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. 

Unlike Cboe, Phlx does require its 

Market Makers to quote both during the 

Opening Process and intra-day within 

certain established bid/ask differentials. 

The Exchange notes that widening its 

Valid Width Quote differential during 

the Opening Process will not impact the 

maintenance of fair and orderly markets 

because Market Makers on Phlx, unlike 

other markets that do not require 

quoting during the Opening Process, 

will continue to require that its Market 

Makers provide Valid Width Quotes 

during the Opening Process, thereby 

ensuring liquidity. Also, Market Makers 

may quote tighter than the defined Valid 

Width Quote differential. Finally, 

similar to Cboe’s argument in the 2019 

Rule Change, Market Makers are 

required to continuously fulfill their 

obligations to engage in a course of 

dealings reasonably calculated to 

contribute to the maintenance of a fair 

and orderly market. 

Today, the Exchange has discretion to 

set other differentials,23 similar to MIAX 

and Emerald.24 The Exchange currently 

is utilizing that discretion to set 

different bid/ask differentials based on 

its observation of market openings. 

Currently, the Exchange requires Market 

Makers to submit Valid Width Quotes 

which are tighter than the proposed $5 

difference. 

The Exchange’s robust Opening 

Process seeks to encourage quality 

markets. As noted herein, unlike a 

majority of options markets,25 it requires 

Lead Market Makers to quote during the 

Opening Process to ensure liquidity as 

well as an efficient Opening Process 

where options series are opened quickly 

and at fair prices. 

The proposal to add rule text to state 

that such differences will be posted by 

the Exchange on its website 26 would 

allow members and member 

organizations to easily refer to the 

quoting obligations for the Opening 

Process. 

Technical Amendment 

The Exchange’s proposal to add 

‘‘Eastern Time’’ after 9:30 a.m., amend 

the word ‘‘currency’’ to security,’’ and 

amend ‘‘Quotes’’ to ‘‘Quote’’ within 

Options 3, Section 8(d)(i)(B) will bring 

greater clarity to the Exchange’s Rules. 

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’s proposal to require Lead 

Market Makers and Electronic Market 

Makers to bid and/or offer an option 

series with differences of no more than 

$5 for options on equities and index 

options does not impose an undue 

burden on competition. All Lead Market 

Makers, and Electronic Market Makers 

who elect to quote during the Opening 

Process, would be subject to the same 

requirement to submit a Valid Width 

Quote when submitting quotes during 

the Opening Process. Differentials 

would be available on the Exchange’s 

website and therefore transparent, 

allowing members and member 

organizations to easily refer to the 

quoting obligations for the Opening 

Process. Finally, the proposal would 

also align quoting requirements more 

closely to intra-day requirements within 

Phlx Options 2, Section 4(c)(1). 

With respect to inter-market 

competition, the Exchange notes that 

most options markets do not require 

market makers to quote during the 

opening.27 The Exchange notes that 

MIAX and Emerald have quoting 

requirements in the opening similar to 

the differential proposed herein. Also, 

ISE, GEMX, and MRX are filing similar 

rule changes to this proposal.28

Technical Amendment 

The Exchange’s proposal to add 

‘‘Eastern Time’’ after 9:30 a.m., amend 

the word ‘‘currency’’ to security,’’ and 

amend ‘‘Quotes’’ to ‘‘Quote’’ within 

Options 3, Section 8(d)(i)(B) will bring 

greater clarity to the Exchange’s Rules. 

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 29 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.30

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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

Phlx–2021–42 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–2021–42. 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 (http://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 


lotter on DSK11XQN23PROD with NOTICES1
41138 Federal Register / Vol. 86, No. 144 / Friday, July 30, 2021 / Notices 

31 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Exchange may designated a shorter time 

provided it is disseminated to membership on the 

Exchange’s website. 

4 In the case of index options, the timing is within 

two minutes of the receipt of the opening price in 

the underlying index or within two minutes of 

market opening for the underlying security in the 

case of U.S. dollar-settled foreign currency options. 

In both cases the Exchange may designated a 

shorter time provided it is disseminated to 

membership on the Exchange’s website. 

5The Exchange proposes an amendment within 

Options 3, Section 8(c)(1)(B) as described below. 

6 In the case of index options, a Primary Market 

Maker must enter a Valid Width Quote in 90% of 

their assigned series, not later than one minute 

following the receipt of the opening price in the 

underlying index. The Primary Market Maker 

assigned in a particular U.S. dollar-settled foreign 

currency option must enter a Valid Width Quote, 

in 90% of their assigned series, not later than one 

minute after the announced market opening. See 

Options 3, Section 8(c)(3). The Exchange proposes 

to make a technical amendment to Options 3, 

Section 8(c)(3) which is described below. 

7 In the case of index options, Primary Market 

Makers must promptly enter a Valid Width Quote 

in the remainder of their assigned series, which did 

not open following the receipt of the opening price 

in the underlying index or, with respect to U.S. 

dollar-settled foreign currency options, following 

the announced market opening. See Options 3, 

Section 8(c)(3). 

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 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–Phlx–2021–42 and should 

be submitted on or before August 20, 

2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.31

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–16231 Filed 7–29–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92491; File No. SR–MRX– 

2021–09] 

Self-Regulatory Organizations; Nasdaq 

MRX, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend the Opening 

Process 

July 26, 2021. 

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 July 19, 

2021, Nasdaq MRX, LLC (‘‘MRX’’ or 

‘‘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 

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 amend 

MRX Options 3, Section 8, ‘‘Options 

Opening Process.’’ 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/mrx/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 

MRX proposes to amend Options 3, 

Section 8, ‘‘Options Opening Process.’’ 

Specifically, the Exchange proposes to 

amend the definition of Valid Width 

Quote at Options 3, Section 8(a)(8). 

MRX’s Opening Process for an option 

series is conducted pursuant to Options 

3, Section 8 paragraphs (f)–(j), on or 

after 9:30 a.m. Eastern the ABBO, if any, 

is not crossed and the System has 

received, within two minutes 3 of the 

opening trade or quote on the market for 

the underlying security,4 a Valid Width 

Quote. The System will accept a 

Primary Market Maker’s Valid Width 

Quote or the Valid Width Quote of at 

least one Competitive Market Maker.5

Today, MRX requires a Primary Market 

Maker to enter a Valid Width Quote in 

90% of their assigned series, not later 

than one minute following the 

dissemination of a quote or trade by the 

market for the underlying security.6

Primary Market Makers must promptly 

enter a Valid Width Quote in the 

remainder of their assigned series, 

which did not open within one minute 

following the dissemination of a quote 

or trade by the market for the 

underlying security.7 In either case, the 

Primary Market Maker or Competitive 

Market Maker must enter a Valid Width 

Quote to open an options series. MRX 

Options 3, Section 8(a)(8) defines a 

Valid Width Quote as follows: 

A ‘‘Valid Width Quote’’ is a two-sided 

electronic quotation submitted by a 

Market Maker that meets the following 

requirements: Differentials shall be no 

more than $.25 between the bid and 

offer for each options contract for which 

the bid is less than $2, no more than 

$.40 where the bid is at least $2 but does 

not exceed $5, no more than $.50 where 

the bid is more than $5 but does not 

exceed $10, no more than $.80 where 

the bid is more than $10 but does not 

exceed $20, and no more than $1 where 

the bid is $20 or greater, provided that, 

in the case of equity options, the bid/ask 

differentials stated above shall not apply 

to in-the-money series where the market 

for the underlying security is wider than 

the differentials set forth above. The 

bid/ask differentials for in-the-money 

options series may be as wide as the 

quotation for the underlying security on 

the primary market, or its decimal 

equivalent rounded down to the nearest 

minimum increment. The Exchange 

may establish differences other than the 

above for one or more series or classes 

of options. 

The Exchange proposes to amend a 

Valid Width Quote to instead provide: 

A ‘‘Valid Width Quote’’ is a two-sided 

electronic quotation submitted by a 

Market Maker that meets the following 

requirements: Differentials shall be no 

more than $5, provided that, in the case 

of equity options, the bid/ask 

differential stated above shall not apply 


lotter on DSK11XQN23PROD with NOTICES1