Document ID: SEC-2016-0976-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ PHLX LLC
Posted Date: 2016-06-07T04:00Z

[Federal Register Volume 81, Number 109 (Tuesday, June 7, 2016)]
[Notices]
[Pages 36646-36647]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-13319]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77970; File No. SR-Phlx-2016-60]

Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend Rule 
1000A(b)(8)

June 1, 2016.
    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 May 24, 2016, NASDAQ PHLX LLC (``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.
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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 the 
Substance of the Proposed Rule Change

    The Exchange proposes to amend section (b)(8) of Rule 1000A, 
Applicability and Definitions. The rule applies to index options.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://nasdaqomxphlx.cchwallstreet.com/, 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 is amending Rule 1000A(b)(8) which defines the term 
``closing index value'' to provide greater clarity. Currently Rule 
1000A(b)(8) defines ``closing index value'' to mean the current index 
value calculated at the close of business on the day of exercise, or, 
if the day of exercise is not a trading day, on the last trading day 
before exercise (P.M.-settled), unless the settlement value of the 
index is based on the opening price of each component issue on the 
primary market (A.M.-settled).
    Accordingly, the definition of ``closing index value'' applicable 
to P.M.-settled options--the current index value calculated at the 
close of business on the day of exercise, or, if the day of exercise is 
not a trading day, on the last trading day before exercise--clearly 
does not apply to options where the settlement value of the index is 
based on the opening price of each component issue on the primary 
market (A.M.-settled).
    It is understood that the ``closing index value'' for such options 
is to be ``the settlement value of the index based on the opening price 
of each component issue on the primary market,'' but the Exchange 
believes the provision could be more tightly drafted and less awkward. 
Therefore, the Exchange proposes to redefine ``closing index value'' 
separately for P.M.-settled options and A.M.-settled options as (a) 
with respect to P.M.-settled options, the current index value 
calculated at the close of business on the day of exercise, or, if the 
day of exercise is not a trading day, on the last trading day before 
exercise, or (b) with respect to A.M.-settled options, the opening 
price of each component issue on the primary market on the day of 
exercise, or, if the day of exercise is not a trading day, on the last 
trading day before exercise. The rule amendment is intended to improve 
readability and provide greater clarity. No substantive change is 
intended.
    Additionally, the Commentary to Rule 1009A(b)(8) [sic] is proposed 
to be updated. Currently, the Commentary recites that for any series of 
index options first opened after March 30, 1987, the Exchange may, in 
its discretion, provide that the calculation of the final index 
settlement value of any index on which options are traded at the 
Exchange will be determined by reference to the prices of the 
constituent stocks at a time other than the close of trading on the 
last trading day before expiration. The Exchange is deleting the words 
``first opened after March 30, 1987'' as archaic and no longer 
necessary.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with section 
6(b) of the Act,\3\ in general, and furthers the objectives of section 
6(b)(5) of the Act,\4\ 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, 
by improving the readability and clarity of its definition of closing 
index value and the related commentary. The change benefits members by 
providing better access to clear rules.
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    \3\ 15 U.S.C. 78f(b).
    \4\ 15 U.S.C. 78f(b)(5).
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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 because the rule merely 
clarifies the defined term ``closing index value'' which is not a 
substantive change, and removes archaic language from the Rule 
1009A(b)(8) [sic] Commentary. Neither proposed change has an impact on 
competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

[[Page 36647]]

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 \5\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\6\
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    \5\ 15 U.S.C. 78s(b)(3)(a)(iii).
    \6\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) 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-2016-60 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-2016-60. 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 Web site (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 Web site 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 such filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-Phlx-2016-60, and should be 
submitted on or before June 28, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2016-13319 Filed 6-6-16; 8:45 am]
 BILLING CODE 8011-01-P