[Federal Register Volume 86, Number 189 (Monday, October 4, 2021)]
[Notices]
[Pages 54749-54750]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-21487]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93157; File No. SR-Phlx-2021-43]


Self-Regulatory Organizations; Nasdaq PHLX LLC; Order Approving a 
Proposed Rule Change To Permit Monday and Wednesday Expirations for 
Options Listed Pursuant to the Short Term Options Program on the 
iShares Russell 2000 ETF (IWM)

September 28, 2021.

I. Introduction

    On August 6, 2021, Nasdaq PHLX LLC (``Phlx'' or ``Exchange'') filed 
with the Securities and Exchange Commission (``Commission''), pursuant 
to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to 
amend Phlx Options 4, Section 5 at Supplementary Material .03 to permit 
Monday and Wednesday expirations for options listed pursuant to the 
Short Term Option Series Program (``Program'') on the iShares Russell 
2000 ETF (``IWM''). The proposed rule change was published for comment 
in the Federal Register on August 18, 2021.\3\ The Commission received 
comment on the proposal.\4\ This order approves the proposed rule 
change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 92655 (August 12, 
2021), 86 FR 46304 (``Notice'').
    \4\ Comment on the proposed rule change can be found at: https://www.sec.gov/comments/sr-phlx-2021-43/srphlx202143.htm.
---------------------------------------------------------------------------

II. Description of the Proposal

    Under the terms of the current Program, after an option class has 
been approved for listing and trading on the Exchange, the Exchange may 
open for trading, on any Thursday or Friday that is a business day, 
series of options on that class that expire on each of the next five 
consecutive Fridays that are business days,\5\ provided that such 
Friday does not occur in the same week in which monthly options series 
on the same class expire or is not a Friday on which Quarterly Options 
Series on the same class expire.\6\ If the Exchange is not open for 
business on the Friday of the following business week, the series will 
expire on the first business day immediately prior to that Friday.\7\ 
In addition, the Exchange may open for trading, on any Friday or Monday 
that is a business day, series of options on the SPDR S&P 500 ETF Trust 
(``SPY'') and Invesco QQQ Trust Series (``QQQ'') ETF Trust to expire on 
any Monday of the month that is a business day and is not a Monday in 
which Quarterly Options Series expire, provided that expirations that 
are listed on a Friday must be listed at least one business week and 
one business day prior to the expiration.\8\ The Exchange also may open 
for trading, on any Tuesday or Wednesday that is a business day, series 
of options on SPY and QQQ to expire on any Wednesday of the month that 
is a business day and is not a Wednesday in which Quarterly Options 
Series expire.\9\
---------------------------------------------------------------------------

    \5\ See Supplementary Material .03 to Options 4, Section 5.
    \6\ Id.
    \7\ Id.
    \8\ Id.
    \9\ Id.
---------------------------------------------------------------------------

    The Exchange proposes to expand the Program to permit Phlx to open 
for trading, on any Monday or Friday that is a business day, series of 
options on IWM that expire on any Monday of the month that is a 
business day and is not

[[Page 54750]]

a Monday in which Quarterly Options Series on the same class expire 
(``Monday IWM Expirations''). In the case of a series that is listed on 
a Friday and expires on a Monday, it must be listed at least one 
business week and one business day prior to that Monday expiration. If 
the Monday IWM Expiration falls on a Monday that is not a business day, 
the series shall expire on the first business day immediately following 
that Monday.
    Similarly, the Exchange also proposes to expand the Program to 
permit Phlx to open for trading, on any Tuesday or Wednesday that is a 
business day, series of options on IWM to expire on any Wednesday of 
the month that is a business day and is not a Wednesday in which 
Quarterly Options Series on the same class expire (``Wednesday IWM 
Expirations''). If the Wednesday IWM Expiration falls on a Wednesday 
that is not a business day, the series shall expire on the first 
business day immediately prior to that Wednesday.
    In addition, the Exchange proposes to amend Supplementary Material 
.03(b) to Options 4, Section 5, to state that it may list up to five 
consecutive Monday IWM Expirations at one time and up to five 
consecutive Wednesday IWM Expirations at one time, and that there may 
be no more than a total of five Monday IWM Expirations and no more than 
a total of five Wednesday IWM Expirations.\10\ The Exchange also 
proposes to amend Supplementary Material .03(b) to Options 4, Section 5 
to permit Monday IWM Expirations and Wednesday IWM Expirations to 
expire in the same week in which monthly options series on the same 
class expire. Otherwise, Monday IWM Expirations and Wednesday IWM 
Expirations will be subject to the same rules as standard Short Term 
Option Series.\11\
---------------------------------------------------------------------------

    \10\ The Exchange also proposes a non-substantive technical 
change to the punctuation after the title ``Short Term Options 
Series Program'' within Supplementary Material .03 to Options 4, 
Section 5.
    \11\ For example, the Monday IWM Expirations and Wednesday IWM 
Expirations would be subject to the same series limitations and 
strike interval rules as standard Short Term Option Series. See 
Notice, supra note 3, at 46305.
---------------------------------------------------------------------------

III. Discussion and Commission's Findings

    The Commission has carefully reviewed the proposed rule change and 
finds that it is consistent with the requirements of the Act and the 
rules and regulations thereunder applicable to a national securities 
exchange and, in particular, the requirements of Section 6(b) of the 
Act.\12\ Specifically, the Commission finds that the proposal is 
consistent with the requirements of Sections 6(b)(5) of the Act,\13\ 
which requires, among other things, that a national securities exchange 
have rules designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, 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.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78f. In approving this proposed rule change, the 
Commission has considered the proposed rule change's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
    \13\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    One commenter expressed support for the proposal, stating that it 
permits market participants ``to manage a more tailored and cost 
effective hedge for a specific event date'' \14\ and asserting that the 
demand for Monday and Wednesday expirations on SPY and QQQ indicates 
their utility for market participants.\15\ The Commission believes that 
the proposed rule change may provide the investing public and other 
market participants more flexibility to closely tailor their investment 
and hedging decisions in IWM options, thus allowing them to better 
manage their risk exposure. The Commission notes that the proposed rule 
change is also similar to the Exchange's existing rules permitting the 
listing and trading of Monday and Wednesday expirations on SPY and 
QQQ.\16\
---------------------------------------------------------------------------

    \14\ See Letter from Michael Golding, Head of Trading, Optiver 
US LLC, to Vanessa Countryman, Secretary, Commission, dated 
September 8, 2021, at 1.
    \15\ See id., at 2.
    \16\ See Supplementary Material .03 to Options 4, Section 5.
---------------------------------------------------------------------------

    In approving the proposal, the Commission notes that the Exchange 
has represented that it has an adequate surveillance program in place 
to detect manipulative trading in Monday IWM Expirations and Wednesday 
IWM Expirations.\17\ The Exchange further states that it has the 
necessary systems capacity to support the new options series.\18\
---------------------------------------------------------------------------

    \17\ See Notice, supra note 3, at 46305-06.
    \18\ Id.
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered that pursuant to Section 19(b)(2) of the 
Act \19\ that the proposed rule change (SR-Phlx-2021-43) be, and hereby 
is, approved.
---------------------------------------------------------------------------

    \19\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
---------------------------------------------------------------------------

    \20\ 17 CFR 200.300-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-21487 Filed 10-1-21; 8:45 am]
BILLING CODE 8011-01-P