Document ID: SEC-2022-0452-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Nasdaq PHLX, LLC
Posted Date: 2022-04-01T04:00Z

[Federal Register Volume 87, Number 63 (Friday, April 1, 2022)]
[Notices]
[Pages 19144-19146]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-06853]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-94533; File No. SR-Phlx-2022-13]

Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend the 
Implementation Date Related to the Launch of Options on the Nasdaq-100 
Volatility Index

March 28, 2022.
    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 March 15, 2022, 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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[[Page 19145]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the implementation date related to 
the launch of options on the Nasdaq-100[supreg] Volatility Index.

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 amend the implementation date related to 
the launch of options on the Nasdaq-100[supreg] Volatility Index 
(``VOLQ''). In 2021, Phlx received approval \3\ to list and trade 
options on VOLQ. Phlx subsequently received approval \4\ in 2021 to 
amend the calculation of its final settlement price for options on 
VOLQ. When Phlx amended the calculation of its final settlement price 
for options on VOLQ, it also amended its implementation date to ``on or 
before March 31, 2022.'' At this time the Exchange proposes to delay 
the launch of VOLQ to ``on or before June 30, 2022.'' The Exchange 
proposes the additional time to ensure market readiness and to allow a 
third-party vendor additional time to test before launch. The Exchange 
will issue an Options Trader Alert announcing the day it will list 
options on VOLQ on Phlx at least thirty days prior to the launch date.
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    \3\ See Securities Exchange Act Release No. 91781 (May 5, 2021), 
86 FR 25918 (May 11, 2021) (SR-Phlx-2020-41) (Notice of Filing of 
Amendment Nos. 1 and 2 and Order Granting Accelerated Approval of a 
Proposed Rule Change, as Modified by Amendment Nos. 1 and 2, To List 
and Trade Options on a Nasdaq-100 Volatility Index).
    \4\ See Securities Exchange Act Release No. 93628 (November 19, 
2021), 86 FR 67555 (November 26, 2021) (SR-Phlx-2021-56) (Order 
Approving a Proposed Rule Change To Amend Options 4A, Section 12 
Regarding the Calculation of the Closing Volume Weighted Average 
Price for Options on the Nasdaq-100 Volatility Index in Certain 
Circumstances).
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Background
    VOLQ is a new options index product that would enable retail and 
institutional investors to manage volatility versus price risk. This 
index will measure ``at-the-money'' volatility, a precise measure of 
volatility used by investors. Unlike other indexes, this proposed novel 
product isolates at-the-money volatility for precise trading and 
hedging strategies. This product will provide investors information on 
volatility index returns by allowing them to observe increases and 
decreases of the Volatility Index. Specifically, VOLQ options will 
measure changes in 30-day implied volatility of the Nasdaq-100 Index 
(commonly known as and referred to by its ticker symbol, NDX). Options 
on the Volatility Index will be cash-settled and will have European-
style exercise provisions.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\5\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\6\ 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 delaying the launch of options on VOLQ from ``on or before March 31, 
2022'' to ``on or before June 30, 2022.'' This delay will provide 
additional time to ensure market readiness and to allow a third-party 
vendor additional time to test before launch, thereby ensuring a 
successful launch of this new product.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    This proposed rule change does not impose any burden on competition 
that is not necessary or appropriate in furtherance of the purposes of 
the Act. The Exchange's proposal to delay the launch of options on VOLQ 
does not impose an undue burden on competition. Delaying the launch 
from ``on or before March 31, 2022'' to ``on or before June 30, 2022'' 
will provide Phlx additional time to ensure market readiness as well as 
allow a third-party vendor additional time to test before launch. The 
Exchange will issue an Options Trader Alert announcing the day it will 
list options on VOLQ on Phlx at least thirty days prior to the launch 
date.

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 \7\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\8\
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    \7\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \8\ 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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    A proposed rule change filed under Rule 19b-4(f)(6) \9\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\10\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay. Waiver of the 
operative delay would allow the Exchange to immediately delay the 
launch of options on VOLQ, which would provide additional time to 
ensure market readiness and allow a third-party vendor additional time 
to test before launch. 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 
operative delay and designates the proposed rule change operative upon 
filing.\11\
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    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ 17 CFR 240.19b-4(f)(6)(iii).
    \11\ 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

[[Page 19146]]

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 [email protected]. Please include 
File Number SR-Phlx-2022-13 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-2022-13. 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-Phlx-2022-13 and should be submitted on 
or before April 22, 2022.
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    \12\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-06853 Filed 3-31-22; 8:45 am]
BILLING CODE 8011-01-P