Document ID: SEC-2021-0720-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Nasdaq PHLX, LLC
Posted Date: 2021-05-17T04:00Z

[Federal Register Volume 86, Number 93 (Monday, May 17, 2021)]
[Notices]
[Pages 26748-26750]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-10276]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91839; File No. SR-Phlx-2021-28]

Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend Various 
Phlx Listing Rules Related to Bid/Ask Differentials for Long-Term 
Options Series

May 11, 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 May 4, 2021, Nasdaq PHLX LLC (``Phlx'' or ``Exchange'') filed with 
the Securities and Exchange Commission (``SEC'' or ``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 Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Phlx Rules at Options 2, Section 4, 
Obligations of Market Makers; Options 4, Section 8, Long-Term Options 
Contracts; Options 4A, Section 6, Position Limits; Options 4A, Section 
12, Terms of Index Options Contracts; and Options 4C, Section 5, Series 
of U.S. Dollar-Settled Foreign Currency Options Contracts Open for 
Trading. The Exchange also proposes a technical amendment within Equity 
11, Section 4, Payment on Delivery--Collect on Delivery.
    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 amend Options 2, Section 4, Obligations of 
Market Makers; Options 4, Section 8, Long-Term Options Contracts; 
Options 4A, Section 6, Position Limits; Options 4A, Section 12, Terms 
of Index Options Contracts; and Options 4C, Section 5, Series of U.S. 
Dollar-Settled Foreign Currency Options Contracts Open for Trading.
    The Exchange also proposes a technical amendment within Equity 11, 
Section 4, Payment on Delivery--Collect on Delivery.
Bid/Ask Differentials for Long-Term Options Series
    Phlx Options 4, Section 8(a), Options 4A, Section 12(b)(2) and 
Options 4C, Section 5(a)(1)(C) describes the bid/ask differentials for 
long-term options series for equity options, exchange-traded products, 
indexes, and U.S. dollar-settled foreign currencies, respectively. 
Currently, the bid/ask differentials shall not apply to such options 
series until the time to expiration is less than nine (9) months for 
equity options and exchange-traded products as provided for within 
Options 4, Section 8(a). Currently, bid/ask differentials shall not 
apply to such options series until the time to expiration is less than 
twelve (12) months for index options as provided for within Options 4A, 
Section 12(b)(2). Currently, bid/ask differentials shall not apply to 
such options series until the time to expiration is less than nine (9) 
months for U.S. dollar-settled foreign currency options as provided for 
within Options 4C, Section 5(a)(1)(C).

[[Page 26749]]

    The Exchange proposes to centralize the bid/ask differentials from 
Options 4, Section 8(a), Options 4A, Section 12(b)(2) and Options 4C, 
Section 5(a)(1)(C) within Options 2, Section 4(c)(1)(A) and add a 
sentence to the aforementioned rules that cites to Options 2, Section 
4(b)(4)(i) for information on bid/ask differentials for the various 
products. The Exchange believes that this relocation will provide 
Primary Market Makers and Competitive Market Makers with centralized 
information regarding their bid/ask differential requirements.
Obsolete Listings
    The Exchange proposes to remove references to SIG Oil Exploration & 
Production Index within Options 4A, Section 6(b)(i) and Supplementary 
Material to Options 4A, Section 12. The SIG Oil Exploration & 
Production Index has not been listed by Phlx since 2016. The Exchange 
also proposes to remove a reference to the SIG Energy MLP Index\TM\ 
within Supplementary Material to Options 4A, Section 12 as it has not 
been listed on Phlx since 2017. The Exchange will file a rule change 
with the Commission in the event that it desires to list these products 
in the future.
Technical Amendment
    The Exchange proposes to add the title, ``Supplementary Material to 
Equity 11, Section 4'' within Equity 11, Section 4 and renumber the 
rule text that follows which includes defined terms. The Exchange also 
proposes to correct a lettering issue within the rule. These amendments 
are non-substantive and intended solely to make the rule easier to 
read.
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.
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    \3\ 15 U.S.C. 78f(b).
    \4\ 15 U.S.C. 78f(b)(5).
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Bid/Ask Differentials for Long-Term Options Series
    The Exchange's proposal to amend Options 4, Section 8(a), Options 
4A, Section 12(b)(2) and Options 4C, Section 5(a)(1)(C) to relocate 
text concerning bid/ask differentials for long-term option series is 
consistent with the Act. The Exchange's proposal will centralize the 
bid/ask differentials within Options 2, Section 4(c)(1)(A) and add a 
sentence to Options 4, Section 8(a), Options 4A, Section 12(b)(2) and 
Options 4C, Section 5(a)(1)(C) that cites to Options 2, Section 
4(c)(1)(A) for information on bid/ask differentials for the various 
products. The Exchange believes that this relocation will provide Lead 
Market Makers and Market Makers with centralized information regarding 
their bid/ask differential requirements.
Obsolete Listings
    The Exchange's proposal to remove references to SIG Oil Exploration 
& Production Index within Options 4A, Section 6(b)(i) and Supplementary 
Material to Options 4A, Section 12 and to remove a reference to the SIG 
Oil Exploration & Production Index within Supplementary Material to 
Options 4A, Section 12 is consistent with the Act. These listing have 
not appeared on Phlx for several years.
Technical Amendment
    The Exchange's proposal to add the title, ``Supplementary Material 
to Equity 11, Section 4'' within Equity 11, Section 4 and renumber and 
re-letter rule text are non-substantive and intended solely to make the 
rule easier to read.

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.
Bid/Ask Differentials for Long-Term Options Series
    The Exchange's proposal to amend Options 4, Section 8(a), Options 
4A, Section 12(b)(2) and Options 4C, Section 5(a)(1)(C) to relocate 
text concerning bid/ask differentials for long-term option series does 
not impose an undue burden on competition. The Exchange's proposal will 
centralize the bid/ask differentials within Options 2, Section 
4(c)(1)(A) and add a sentence to Options 4, Section 8(a), Options 4A, 
Section 12(b)(2) and Options 4C, Section 5(a)(1)(C) that cites to 
Options 2, Section 4(c)(1)(A) for information on bid/ask differentials 
for the various products.
Obsolete Listings
    The Exchange's proposal to remove references to SIG Oil Exploration 
& Production Index within Options 4A, Section 6(b)(i) and Supplementary 
Material to Options 4A, Section 12 and to remove a reference to the SIG 
Oil Exploration & Production Index within Supplementary Material to 
Options 4A, Section 12 does not impose an undue burden on competition. 
These listing have not appeared on Phlx for several years.
Technical Amendment
    The Exchange's proposal to add the title, ``Supplementary Material 
to Equity 11, Section 4'' within Equity 11, Section 4 and renumber and 
re-letter rule text are non-substantive and intended solely to make the 
rule easier to read.

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 \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 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:

[[Page 26750]]

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-2021-28 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-2021-28. 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-2021-28 and should be submitted on 
or before June 7, 2021.

    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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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-10276 Filed 5-14-21; 8:45 am]
BILLING CODE 8011-01-P