[Federal Register Volume 84, Number 223 (Tuesday, November 19, 2019)]
[Notices]
[Pages 63910-63912]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-24978]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-87517; File No. SR-Phlx-2019-49]
Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Remove Rule Text
From Phlx Rule 1101A
November 13, 2019.
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 8, 2019, 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 remove rule text from Phlx Rule 1101A,
``Terms of Options Contracts'' at Commentary .05 in connection to the
listing of P.M.-settled Nasdaq-100 Index Options expiring on the third
Friday of the month (``NDXPM'').
The Exchange also proposes to remove other obsolete rule text
regarding indices within Rule 1101A(1)(2), Rule 1104A, ``SIG Indices,
LLLP'', Rule 1106A, ``Lehman Brothers Inc. Indexes'', Rule 1108A,
``MSCI EM Index'' and Rule 1109A ``MSCI EAFE Index.''
The text of the proposed rule change is available on the Exchange's
website at http://nasdaqphlx.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
Phlx proposes to remove rule text from Phlx Rule 1101A, ``Terms of
Options Contracts'' at Commentary .05 in connection to the listing of
P.M.-settled Nasdaq-100 Index Options expiring on the third Friday of
the month (``NDXPM''). The Exchange also proposes to remove other
obsolete rule text regarding indices within Rule 1101A(1)(2), Rule
1104A, ``SIG Indices, LLLP'', Rule 1106A, ``Lehman Brothers Inc.
Indexes'', Rule 1108A, ``MSCI EM Index'' and Rule 1109A ``MSCI EAFE
Index.''
Pilot
In August 2017, the Commission approved a proposed rule change for
the listing of NDXPM options on a pilot basis on Phlx, with the Pilot
to terminate on the earlier to occur of (i) 12 months following the
date of the first listing of the NDXPM options, or (ii) December 29,
2018 pursuant to Phlx Rule 1101A, ``Terms of Options Contracts''
Commentary .05.\3\ By way of background, the Pilot permitted the
listing and trading, on a pilot basis, of NASDAQ-100 options with
third-Friday-of-the month expiration dates, whose exercise settlement
value was based on the closing index value, symbol XQC, of the NASDAQ-
100 on the expiration day (``P.M.-settled'').
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\3\ See Securities Exchange Act Release No. 81293 (August 2,
2017), 82 FR 37138 (August 8, 2017) (approving SR-Phlx-2017-04)
(Order Granting Approval of a Proposed Rule Change, as Modified by
Amendment Nos. 1 and 2, To Permit the Listing and Trading of P.M.-
Settled Nasdaq-100 Index Options on a Pilot Basis) See also
Securities Exchange Act Release No. 85692 (April 18, 2019), 84 FR
17213 (April 24, 2019) (Notice of Filing and Immediate Effectiveness
of Proposed Rule Change To Extend the Pilot Period for the Listing
of P.M.-Settled Nasdaq-100 Index Options Expiring on the Third
Friday of the Month)(``Pilot'').
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[[Page 63911]]
The Exchange extended the pilot through May 6, 2019, and,
subsequently through November 4, 2019, because P.M.-settled options on
the NASDAQ-100 Index (``NASDAQ-100'') had not yet been listed by
Phlx.\4\ The Exchange did not renew this Pilot a third time and
therefore the Pilot expired on November 4, 2019.
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\4\ See Securities Exchange Act Release Nos. 84685 (November 29,
2019), 83 FR 62942 (December 6, 2018) (SR-Phlx-2018-76) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
the Pilot Period for the Listing of P.M.-Settled Nasdaq-100 Index
Options Expiring on the Third Friday of the Month) and 85692 (April
18, 2019), 84 FR 17213 (April 24, 2019) (SR-Phlx-2019-16) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Extend
the Pilot Period for the Listing of P.M.-Settled Nasdaq-100 Index
Options Expiring on the Third Friday of the Month).
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At this time, the Exchange proposes to remove Commentary .05 to
Phlx Rule 1101A as this Pilot has expired. The Exchange also proposes
to renumber Commentary .06 to Phlx 1101A as .05.
Other Amendments
The Exchange proposes to remove the following indexes at Rule
1001A(a)(2)(xxii) SIG Oil Exploration & Production Index\TM\, (xxiv)
KBW Capital Markets Index, (xxv) KBW Insurance Index, (xxvi) KBW
Mortgage Finance Index, (xxvii) KBW Regional Banking Index, (xxxiii)
NASDAQ China Index\SM\, and (xxxiv) SIG Energy MLP Index\TM\. The
Exchange proposes to remove the reserved rules and re-letter the
remaining rule text. These indexes are no longer traded so the rule
text is obsolete. There is no outstanding interest in any of the
aforementioned indexes. If Phlx determines to list any of these indexes
at a future date the Exchange will file a proposal with the Commission.
The Exchange proposes to remove other obsolete rule text regarding
indices. The Exchange no longer lists SIG Indices and therefore
proposes to remove rule text which permits the listing of such index
options within Rule 1104A, ``SIG Indices, LLLP.'' The Exchange no
longer lists Lehman Brothers Indexes and therefore proposes to remove
rule text which permits the listing of such index options within Rule
1106A, ``Lehman Brothers Inc. Indexes.'' The Exchange also no longer
lists the MSCI EM or MSCI EAFE index options. The Exchange proposes to
remove Rule 1108A, ``MSCI EM Index'' and Rule 1109A ``MSCI EAFE
Index.'' There is no outstanding interest in any of the aforementioned
indexes. These indexes have not been listed in some time on Phlx. If
Phlx determines to list any of these indexes at a future date the
Exchange will file a proposal with the Commission.
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.
The Exchange believes that removing the rule text related to the
expired Pilot within Commentary .05 to Phlx Rule 1101A will protect
investors and the public interest by avoiding confusion as to the
existence of this Pilot. Further the Exchange believes that removing
obsolete language related to the listing of index options which have
not been listed for some time on Phlx will also protect investors and
the public interest by avoiding confusion as to the availability of
these listings. There is no outstanding interest in any of the
aforementioned indexes. If Phlx determines to list any of these indexes
at a future date the Exchange will file a proposal with the Commission.
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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
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. With the expiration of the
Pilot, NDXPM options would not be listed by Phlx and therefore would
not be available to any market participant. Further, no market
participant may trade any of the index options which are being deleted.
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 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) 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).
\8\ 17 CFR 240.19b-4(f)(6). In addition, Rule19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of 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 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 [email protected]. Please include
File Number SR-Phlx-2019-49 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-2019-49. 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
[[Page 63912]]
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-2019-49 and should be submitted on or before December 10, 2019.
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\9\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-24978 Filed 11-18-19; 8:45 am]
BILLING CODE 8011-01-P