Document ID: SEC-2022-1584-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Nasdaq PHLX LLC
Posted Date: 2022-12-07T05:00Z

[Federal Register Volume 87, Number 234 (Wednesday, December 7, 2022)]
[Notices]
[Pages 75096-75098]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-26539]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96432; File No. SR-Phlx-2022-48]

Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend the 
Definition of Short Term Option Series

December 1, 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 November 22, 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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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend certain rule text within Equity 2, 
Market Participants; Options 1, General Provisions; Options 2, Options 
Market Participants; Options 4A, Options Index Rules; Options 7, 
Pricing Schedule; and Options 10, Doing Business with the Public.
    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 the description of the term ``Short 
Term Option Series'' within Options 1, Section 1, Definitions, to 
conform the term to Nasdaq ISE, LLC's (``ISE'') term of Short Term 
Option Series which was recently amended.\3\
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    \3\ See Securities Exchange Act Release No. 96281 (November 9, 
2022), 87 FR 68769 (November 16, 2022) (SR-ISE-2022-18) (Order 
Granting Approval of a Proposed Rule Change to Amend the Short Term 
Option Series Program). Phlx's Options 4 Rules are incorporated by 
reference to ISE's Options 4 Rules and therefore the approval of 
ISE's Options 4 rules permits the listing and trading of options 
series with Tuesday and Thursday expirations for options on SPY and 
QQQ on Phlx.
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    The Exchange also proposes certain other non-substantive 
amendments. Each change is described below.
Short Term Option Series
    Options 1, Section 1(b)(53) describes the term ``Short Term Option 
Series'' as follows:

    The term ``Short Term Option Series'' means a series in an 
option class that is approved for listing and trading on the 
Exchange in which the series is opened for trading on any Monday, 
Tuesday, Wednesday, Thursday or Friday that is a business day and 
that expires on the Monday, Wednesday or Friday of the next business 
week, or, in the case of a series that is listed on a Friday and 
expires on a Monday, is listed one business week and one business 
day prior to that expiration. If a Tuesday, Wednesday, Thursday or 
Friday is not a business day, the series may be opened (or shall 
expire) on the first business day immediately prior to that Tuesday, 
Wednesday, Thursday or Friday, respectively. For a series listed 
pursuant to this Rule for Monday expiration, if a Monday is not a 
business day, the series shall expire on the first business day 
immediately following that Monday.

ISE's Options 4 rules were recently amended to expand the Short Term 
Option Series Program to permit the listing and trading of options 
series with Tuesday and Thursday expirations for options on SPY and QQQ 
listed pursuant to the Short Term Option Series Program.\4\ In 
conjunction with that change, ISE amended its definition of Short Term 
Option Series, within Options 1, Section 1(a)(49), to accommodate the 
listing of options series that expire on Tuesdays and Thursdays.\5\ 
Specifically, the Exchange added Tuesday and Thursday to the permitted 
expiration days, which currently include Monday, Wednesday, and Friday, 
that it may open a series for trading.
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    \4\ See note 3 above. Phlx's Options 4 Rules are incorporated by 
reference to ISE's Options 4 Rules.
    \5\ See note 3 above.
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    At this time, the Exchange proposes to amend the term ``Short Term 
Option Series'' at Options 1, Section 1(b)(53) to provide,

    The term ``Short Term Option Series'' means a series in an 
option class that is approved for listing and trading on the 
Exchange in which the series is opened for trading on any Monday, 
Tuesday, Wednesday, Thursday or Friday that is a business day and 
that expires on the Monday, Tuesday, Wednesday, Thursday, or Friday 
of the next business week, or, in the case of a series that is 
listed on a Friday and expires on a Monday, is listed one business 
week and one business day prior to that expiration. If a Tuesday, 
Wednesday, Thursday or Friday is not a business day, the series may 
be opened (or shall expire) on the first business day immediately 
prior to that Tuesday, Wednesday, Thursday or Friday, respectively. 
For a series listed pursuant to this Rule for Monday expiration, if 
a Monday is not a business day, the series shall expire on the first 
business day immediately following that Monday.

Today, Phlx's listing rules permit the listing and trading of options 
series with Tuesday and Thursday expirations for options on SPY and QQQ 
listed pursuant to the Short Term Option Series Program.
Other Non-Substantive Amendments
    The Exchange proposes to remove and reserve the rules within Equity 
2, Section 3 and Options 2, Section 2 which are both titled, ``Member 
and Member Organization Participation.'' The Nasdaq Stock Market LLC 
(``Nasdaq'') recently filed to relocate a similar Nasdaq Rule into 
General 3, Rule 1032.\6\ Phlx's General 3 is incorporated by reference 
to Nasdaq's General 3. The rules within Equity 2, Section 3 and Options 
2, Section 2 are not necessary as they are nearly identical to Phlx 
General 3, Rule 1000 Series.\7\
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    \6\ See Securities Exchange Act Release No. 96132 (October 24, 
2022), 87 FR 65272 (October 28, 2022) (SR-NASDAQ-2022-058) (Notice 
of Filing and Immediate Effectiveness of Proposed Rule Change To 
Relocate Equity 2, Section 3).
    \7\ While the term ``Floor Based Management System'' or ``FBMS'' 
is not specifically noted within Phlx General 3, Rule 1032, the term 
``System'' is utilized. FBMS is part of the Exchange's System as 
that term is defined within Options 1, Section 1(b)(57).
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    The Exchange proposes to amend a rule citation to Streaming Quote 
Traders

[[Page 75097]]

within Options 2, Section 1(a) and Options 7, Section 1(c). The correct 
citation should be to Options 1, Section 1(b)(55) where Streaming Quote 
Trader is described.
    The Exchange proposes to remove a duplicative reference to Nasdaq-
100[supreg] Volatility Index Options within Options 4A, Section 
12(e)(II)(xi).
    Finally, the Exchange proposes to reserve Options 10, Sections 26 
and 27 to harmonize section numbers across the Nasdaq affiliated 
markets.\8\ These sections contain content in other Nasdaq affiliated 
rulebooks.
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    \8\ ISE, Nasdaq GEMX, LLC (``GEMX'') and Nasdaq MRX, LLC 
(``MRX'') have rules within Options 10, Section 26 and 27.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\9\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\10\ 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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    \9\ 15 U.S.C. 78f(b)
    \10\ 15 U.S.C. 78f(b)(5).
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Short Term Option Series
    The Exchange's proposal to amend the term ``Short Term Option 
Series'' at Options 1, Section 1(b)(53) to reflect the recent change 
\11\ to ISE's listing rules, which Phlx incorporates by reference, to 
permit the listing and trading of options series with Tuesday and 
Thursday expirations for options on SPY and QQQ listed pursuant to the 
Short Term Option Series Program is consistent with the Exchange Act. 
This proposal will align the description of Short Term Option Series 
within Options 1, Section 1(b)(53) to the expirations permitted within 
the Short Term Option Series Program within Supplementary .03 to 
Options 4, Section 5.
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    \11\ See note 3 above.
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Other Non-Substantive Amendments
    The Exchange's proposal to remove and reserve the rules within 
Equity 2, Section 3 and Options 2, Section 2 represent a non-
substantive amendment. Nasdaq recently filed to relocate a similar 
Nasdaq Rule into General 3, Rule 1032.\12\ Phlx's General 3 is 
incorporated by reference to Nasdaq's General 3, therefore the rules 
within Equity 2, Section 3 and Options 2, Section 2 are not necessary 
as a nearly identical \13\ rule exists within Phlx General 3, Rule 1000 
Series.
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    \12\ See note 6 above.
    \13\ See note 7 above.
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    The Exchange's proposal to amend a rule citation to Streaming Quote 
Traders within Options 2, Section 1(a) and Options 7, Section 1(c) is 
non-substantive.
    The Exchange's proposal to remove a duplicative reference to 
Nasdaq-100[supreg] Volatility Index Options within Options 4A, Section 
12(e)(II)(xi) is non-substantive.
    Finally, the Exchange's proposal to reserve Options 10, Sections 26 
and 27 is non-substantive.\14\
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    \14\ See note 9 above.
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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.
Short Term Option Series
    The Exchange's proposal to amend the term ``Short Term Option 
Series'' at Options 1, Section 1(b)(53) to reflect the recent change 
\15\ to ISE's listing rules, which Phlx incorporates by reference, to 
permit the listing and trading of options series with Tuesday and 
Thursday expirations for options on SPY and QQQ listed pursuant to the 
Short Term Option Series Program does not impose an undue burden on 
competition, rather this proposal will align the description of Short 
Term Option Series within Options 1, Section 1(b)(53) to the 
expirations permitted within the Short Term Option Series Program 
within Supplementary .03 to Options 4, Section 5.
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    \15\ See note 3 above.
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Other Non-Substantive Amendments
    The Exchange's proposal to remove and reserve the rules within 
Equity 2, Section 3 and Options 2, Section 2 represent a non-
substantive amendment. Nasdaq recently filed to relocate a similar 
Nasdaq Rule into General 3, Rule 1032.\16\ Phlx's General 3 is 
incorporated by reference to Nasdaq's General 3, therefore the rules 
within Equity 2, Section 3 and Options 2, Section 2 are not necessary 
as a nearly identical \17\ rule exists within Phlx General 3, Rule 1000 
Series.
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    \16\ See note 6 above.
    \17\ See note 7 above.
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    The Exchange's proposal to amend a rule citation to Streaming Quote 
Traders within Options 2, Section 1(a) and Options 7, Section 1(c) is 
non-substantive.
    The Exchange's proposal to remove a duplicative reference to 
Nasdaq-100[supreg] Volatility Index Options within Options 4A, Section 
12(e)(II)(xi) is non-substantive.
    Finally, the Exchange's proposal to reserve Options 10, Sections 26 
and 27 is non-substantive.\18\
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    \18\ See note 9 above.
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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 \19\ and 
subparagraph (f)(6) of Rule 19b-4 \20\ thereunder.
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    \19\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \20\ 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) \21\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\22\ the Commission 
may designate a shorter time of such action is consistent with the 
protection of investor and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposed 
rule change may become operative upon filing. The Exchange states that 
this proposed rule change could immediately benefit market participants 
by avoiding confusion, as the Phlx Options 4 rules are incorporated to 
ISE's Options 4 rules. The Exchange also states that these rules permit 
the listing and trading of options series with Tuesday and Thursday 
expirations for options on SPY and QQQ listed pursuant to the Short 
Term Option Series Program. For these reasons, and because the proposed 
rule change does not raise any novel regulatory issues, the Commission 
believes that waiving the 30-day operative delay is consistent with the 
protection of investors and the

[[Page 75098]]

public interest. Therefore, the Commission hereby waives the operative 
delay and designates the proposal operative upon filing.\23\
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    \21\ 17 CFR 240.19b-4(f)(6).
    \22\ 17 CFR 240.19b-4(f)(6)(iii).
    \23\ For purposes only of waiving the 30-day operative delay, 
the Commission has 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. 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-2022-48 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-2022-48. 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-2022-48 and should be submitted on 
or before December 28, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\24\
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    \24\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-26539 Filed 12-6-22; 8:45 am]
BILLING CODE 8011-01-P