82_FR_61293 82 FR 61047 - Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing of Proposed Rule Change To Amend Rule 1000 and Commentary .11 to Rule 1012

82 FR 61047 - Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing of Proposed Rule Change To Amend Rule 1000 and Commentary .11 to Rule 1012

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 246 (December 26, 2017)

Page Range61047-61050
FR Document2017-27700

Federal Register, Volume 82 Issue 246 (Tuesday, December 26, 2017) 
[Federal Register Volume 82, Number 246 (Tuesday, December 26, 2017)]
[Notices]
[Pages 61047-61050]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-27700]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82363; File No. SR-Phlx-2017-103]


Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing 
of Proposed Rule Change To Amend Rule 1000 and Commentary .11 to Rule 
1012

December 19, 2017.
    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 December 6, 2017, 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 expand the Short Term Option Series 
Program to allow Monday expirations for options listed pursuant to the 
Short Term Option Series Program, including options on the SPDR S&P 500 
ETF Trust.
    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.

[[Page 61048]]

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 Phlx Rules 1000(b)(44) and Rule 1012 
at Commentary .11 to expand the Short Term Option Series Program 
(``Program'') to permit the listing and trading of options series with 
Monday expirations that are listed pursuant to the Program, including 
options on the SPDR S&P 500 ETF Trust (``SPY'').
    As set forth in Rule 1044(b)(44), a Short Term Option Series is 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 Tuesday, 
Wednesday, Thursday or Friday that is a business day and that expires 
on the Wednesday or Friday of the next business week. The Exchange is 
now proposing to amend Rule 1000(b)(44) to permit the listing of 
options series that expire on Mondays. Specifically, the Exchange is 
proposing that it may open for trading series of options on any Monday 
that is a business day and that expires on the Monday of the next 
business week. The Exchange is also proposing to list Monday 
expirations series on Fridays that precede the expiration Monday by one 
business week plus one business day. Since Rule 1000(b)(44) already 
provides for the listing of short term option series on Fridays, the 
Exchange is not modifying this provision to allow for Friday listing of 
Monday expiration series. However, the Exchange is amending Rule 
1000(b)(44) to clarify that, in the case of a series that is listed on 
a Friday and expires on a Monday, that series must be listed one 
business week and one business day prior to that expiration (i.e., two 
Fridays prior to expiration).
    As part of this proposal, the Exchange is also amending Rule 
1000(b)(44) to address the expiration of Monday expiration series when 
the Monday is not a business day. In that case, the rule will provide 
that the series shall expire on the first business day immediately 
following that Monday. This procedure differs from the expiration date 
of Wednesday expiration series that are scheduled to expire on a 
holiday. In that case, the Wednesday expiration series shall expire on 
the first business day immediately prior to that Wednesday, e.g., 
Tuesday of that week.\3\ However, the Exchange believes that it is 
preferable to require Monday expiration series in this scenario to 
expire on the Tuesday of that week rather than the previous business 
day, e.g., the previous Friday, since the Tuesday is closer in time to 
the scheduled expiration date of the series than the previous Friday, 
and therefore may be more representative of anticipated market 
conditions. The Exchange also notes that Cboe Exchange, Inc. (``Cboe'') 
uses the same procedure for options on the S&P 500 index (``SPX'') with 
Monday expirations that listed pursuant to its Nonstandard Expirations 
Pilot Program and that are scheduled to expire on a holiday.\4\
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    \3\ See Phlx Rule 1000(b)(44).
    \4\ See CBOE Rule 24.9(e)(1) (``If the Exchange is not open for 
business on a respective Monday, the normally Monday expiring Weekly 
Expirations will expire on the following business day. If the 
Exchange is not open for business on a respective Wednesday or 
Friday, the normally Wednesday or Friday expiring Weekly Expirations 
will expire on the previous business day.'')
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    The Exchange also proposes to make corresponding changes to 
Commentary .11 to Rule 1012, which sets forth the requirements for SPY 
options that are listed pursuant to the Short Term Options Series 
Program, to permit Monday SPY expirations (``Monday SPY Expirations''). 
Accordingly, the Exchange proposes to amend Commentary .11 to state 
that, with respect to Monday SPY Expirations, the Exchange may open for 
trading on any Friday or Monday that is a business day series of 
options on the SPY 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 Monday SPY Expirations that are listed on a 
Friday must be listed at least one business week and one business day 
prior to the expiration. As with the current rules for Wednesday SPY 
Expirations, the Exchange will also amend Commentary .11 to state that 
it may list up to five consecutive Monday SPY Expirations at one time, 
and may have no more than a total of five Monday SPY Expirations (in 
addition to a maximum of five Short Term Option Series expirations for 
SPY expiring on Friday and five Wednesday SPY Expirations). The 
Exchange will also clarify that, as with Wednesday SPY Expirations, 
Monday SPY Expirations will be subject to the provisions of this Rule.
    The interval between strike prices for the proposed Monday SPY 
Expirations will be the same as those for the current Short Term Option 
Series for Wednesday and Friday SPY Expirations. Specifically, the 
Monday SPY Expirations will have a $0.50 strike interval minimum. As is 
the case with other options series listed pursuant to the Short Term 
Option Series, the Monday SPY Expiration series will be P.M.-settled.
    Currently, for each option class eligible for participation in the 
Program, the Exchange is limited to opening thirty (30) series for each 
expiration date for the specific class. The thirty (30) series 
restriction does not include series that are open by other securities 
exchanges under their respective short term option rules; the Exchange 
may list these additional series that are listed by other exchanges.\5\ 
This thirty (30) series restriction shall apply to Monday SPY 
Expiration series as well. In addition, the Exchange will be able to 
list series that are listed by other exchanges, assuming they file 
similar rules with the Commission to list SPY options expiring on 
Mondays.
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    \5\ See Phlx Rule 1012 at Commentary .11(a).
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    Finally, the Exchange is amending Commentary .11(b) to Rule 1012, 
which addresses the listing of Short Term Options Series that expire in 
the same week as monthly or quarterly options series. Currently, that 
rule states that no Short Term Option Series may expire in the same 
week in which monthly option series on the same class expire (with the 
exception of Wednesday SPY Expirations) or, in the case of Quarterly 
Options Series, on an expiration that coincides with an expiration of 
Quarterly Option Series on the same class. As with Wednesday SPY 
Expirations, the Exchange is proposing to permit Monday SPY Expirations 
to expire in the same week as monthly options series on the same class. 
The Exchange believes that it is reasonable to extend this exemption to 
Monday SPY Expirations because Monday SPY Expirations and standard 
monthly options will not expire on the same trading day, as standard 
monthly options expire on Fridays. Additionally, the Exchange believes 
that not listing Monday SPY Expirations for one week every month 
because there was a monthly SPY expiration on the Friday of that week 
would create investor confusion.
    Relatedly, Phlx is also amending Commentary .11(b) to Rule 1012 to 
clarify that Monday and Wednesday SPY Expirations may expire in the 
same week as monthly option series in the same class expire, but that 
no Short Term Option Series may expire on the same day as an expiration 
of Quarterly Option Series on the same class. This change will make 
that provision more consistent with the existing language in Commentary 
.11 that prohibits Wednesday SPY Expirations from expiring on a 
Wednesday in which Quarterly Options Series expire.

[[Page 61049]]

    The Exchange does not believe that any market disruptions will be 
encountered with the introduction of P.M.-settled Monday expirations. 
The Exchange has the necessary capacity and surveillance programs in 
place to support and properly monitor trading in the proposed Monday 
expiration series, including Monday SPY Expirations. The Exchange 
currently trades P.M.-settled Short Term Option Series that expire 
almost every Wednesday and Friday, which provide market participants a 
tool to hedge special events and to reduce the premium cost of buying 
protection. The Exchange notes that it has been listing Wednesday 
expirations pursuant to Rule 1000 and Rule 1012 since 2016.\6\ With the 
exception of Monday expiration series that are scheduled to expire on a 
holiday, the Exchange does not believe that there are any material 
differences between Monday expirations and Wednesday or Friday 
expirations for Short Term Option Series.
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    \6\ See Securities Exchange Act Release No. 78693 (August 26, 
2016), 81 FR 60074 (August 31, 2016) (SR-Phlx-2016-89).
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    The Exchange seeks to introduce Monday expirations to, among other 
things, expand hedging tools available to market participants and to 
continue the reduction of the premium cost of buying protection. The 
Exchange believes that Monday expirations, similar to Wednesday and 
Friday expirations, will allow market participants to purchase an 
option based on their timing as needed and allow them to tailor their 
investment and hedging needs more effectively.
    While other exchanges do not currently list Monday SPY Expirations, 
the Exchange notes that other exchanges currently permit Monday 
expirations for other options. For example, Cboe lists options on the 
SPX with a Monday expiration as part of its Nonstandard Expirations 
Pilot Program.\7\
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    \7\ See CBOE Rule 24.9(e)(1) (``The Exchange may open for 
trading Weekly Expirations on any broad-based index eligible for 
standard options trading to expire on any Monday, Wednesday, or 
Friday (other than the third Friday-of-the-month or days that 
coincide with an EOM expiration.'').
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\8\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\9\ 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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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
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    In particular, the Exchange believes the Short Term Option Series 
Program has been successful to date and that Monday expirations, 
including Monday SPY Expirations, simply expand the ability of 
investors to hedge risk against market movements stemming from economic 
releases or market events that occur throughout the month in the same 
way that the Short Term Option Series Program has expanded the 
landscape of hedging. Similarly, the Exchange believes Monday 
expirations, including Monday SPY Expirations, should create greater 
trading and hedging opportunities and flexibility, and will provide 
customers with the ability to tailor their investment objectives more 
effectively. While other exchanges do not currently list Monday SPY 
Expirations, the Exchange notes that Cboe currently permits Monday 
expirations for other options with a weekly expiration, such as options 
on the SPX.
    With the exception of Monday expiration series that are scheduled 
to expire on a holiday, the Exchange does not believe that there are 
any material differences between Monday expirations, including Monday 
SPY expirations, and Wednesday or Friday expirations, including 
Wednesday and Friday SPY Expirations, for Short Term Option Series. The 
Exchange notes that it has been listing Wednesday expirations pursuant 
to Rule 1000 and Rule 1012 since 2016. The Exchange believes that it is 
consistent with the Act to treat Monday expiration series that expire 
on a holiday differently than Wednesday or Friday expiration series, 
since the proposed treatment for Monday expiration series will result 
in an expiration date that is closer in time to the scheduled 
expiration date of the series, and therefore may be more representative 
of anticipated market conditions. The Exchange also notes that Cboe 
uses the same procedure for SPX options with Monday expirations that 
are listed pursuant to its Nonstandard Expirations Pilot Program and 
that are scheduled to expire on a holiday.
    Given the similarities between Monday SPY Expiration series and 
Wednesday and Friday SPY Expiration series, the Exchange believes that 
applying the provisions in Commentary .11 to Rule 1012 that currently 
apply to Wednesday SPY Expirations to Monday SPY Expirations is 
justified. For example, the Exchange believes that allowing Monday SPY 
Expirations and monthly SPY expirations in the same week will benefit 
investors and minimize investor confusion by providing Monday SPY 
Expirations in a continuous and uniform manner. The Exchange also 
believes that is appropriate to amend Commentary .11(b) to Rule 1012 to 
clarify that no Short Term Option Series may expire on the same day as 
an expiration of Quarterly Option Series on the same class. This change 
will make that provision more consistent with the existing language in 
Commentary .11 that prohibits Wednesday SPY Expirations from expiring 
on a Wednesday in which Quarterly Options Series expire.
    Finally, the Exchange represents that it has an adequate 
surveillance program in place to detect manipulative trading in Monday 
expirations, including Monday SPY Expirations, in the same way that it 
monitors trading in the current Short Term Option Series. The Exchange 
also represents that it has the necessary systems capacity to support 
the new options series.

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. The Exchange notes that having 
Monday expirations is not a novel proposal, as Cboe currently lists and 
trades short-term SPX options with a Monday expiration. The Exchange 
does not believe the proposal will impose any burden on intra-market 
competition, as all market participants will be treated in the same 
manner under this proposal. Additionally, the Exchange does not believe 
the proposal will impose any burden on inter-market competition, as 
nothing prevents the other options exchanges from proposing similar 
rules to list and trade short-term options series with Monday 
expirations.

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the Exchange consents,

[[Page 61050]]

the Commission shall: (a) By order approve or disapprove such proposed 
rule change, or (b) institute proceedings to determine whether the 
proposed rule change should be 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-2017-103 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-2017-103. 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; the Commission does not edit 
personal identifying information from submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File Number SR-Phlx-2017-103 and should be 
submitted on or before January 16, 2018. For the Commission, by the 
Division of Trading and Markets, pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-27700 Filed 12-22-17; 8:45 am]
 BILLING CODE 8011-01-P

Federal Register / Vol. 82, No. 246 / Tuesday, December 26, 2017 / Notices 61047 domestic shipping services contract to SUMMARY: The Postal Service gives SECURITIES AND EXCHANGE the list of Negotiated Service notice of filing a request with the Postal COMMISSION Agreements in the Mail Classification Regulatory Commission to add a Schedule’s Competitive Products List. domestic shipping services contract to [Release No. 34–82363; File No. SR–Phlx– DATES: Date of notice required under 39 the list of Negotiated Service 2017–103] U.S.C. 3642(d)(1): December 26, 2017. Agreements in the Mail Classification FOR FURTHER INFORMATION CONTACT: Schedule’s Competitive Products List. Self-Regulatory Organizations; Nasdaq Elizabeth A. Reed, 202–268–3179. DATES: Date of notice required under 39 PHLX LLC; Notice of Filing of SUPPLEMENTARY INFORMATION: The U.S.C. 3642(d)(1): December 26, 2017. Proposed Rule Change To Amend Rule United States Postal Service® hereby 1000 and Commentary .11 to Rule 1012 gives notice that, pursuant to 39 U.S.C. FOR FURTHER INFORMATION CONTACT: 3642 and 3632(b)(3), on December 19, Elizabeth A. Reed, 202–268–3179. December 19, 2017. 2017, it filed with the Postal Regulatory SUPPLEMENTARY INFORMATION: The Pursuant to Section 19(b)(1) of the Commission a Request of the United United States Postal Service® hereby Securities Exchange Act of 1934 States Postal Service to Add Parcel gives notice that, pursuant to 39 U.S.C. (‘‘Act’’),1 and Rule 19b–4 thereunder,2 Select Contract 27 to Competitive 3642 and 3632(b)(3), on December 19, notice is hereby given that on December Product List. Documents are available at 2017, it filed with the Postal Regulatory 6, 2017, Nasdaq PHLX LLC (‘‘Phlx’’ or www.prc.gov, Docket Nos. MC2018–71, Commission a Request of the United ‘‘Exchange’’) filed with the Securities CP2018–111. States Postal Service to Add Parcel and Exchange Commission (‘‘SEC’’ or Elizabeth A. Reed, Select Contract 28 to Competitive ‘‘Commission’’) the proposed rule Attorney, Corporate and Postal Business Law. Product List. Documents are available at change as described in Items I, II, and [FR Doc. 2017–27655 Filed 12–22–17; 8:45 am] www.prc.gov, Docket Nos. MC2018–72, III, below, which Items have been BILLING CODE 7710–12–P CP2018–112. prepared by the Exchange. The Commission is publishing this notice to Elizabeth A. Reed, solicit comments on the proposed rule POSTAL SERVICE Attorney, Corporate and Postal Business Law. change from interested persons. [FR Doc. 2017–27656 Filed 12–22–17; 8:45 am] Product Change—Priority Mail BILLING CODE 7710–12–P I. Self-Regulatory Organization’s Negotiated Service Agreement Statement of the Terms of Substance of the Proposed Rule Change AGENCY: Postal ServiceTM. POSTAL SERVICE ACTION: Notice. The Exchange proposes to expand the Product Change—Parcel Select Short Term Option Series Program to SUMMARY: The Postal Service gives allow Monday expirations for options notice of filing a request with the Postal Negotiated Service Agreement listed pursuant to the Short Term Regulatory Commission to add a Option Series Program, including domestic shipping services contract to AGENCY: Postal ServiceTM. options on the SPDR S&P 500 ETF the list of Negotiated Service ACTION: Notice. Trust. Agreements in the Mail Classification Schedule’s Competitive Products List. SUMMARY: The Postal Service gives The text of the proposed rule change DATES: Date of notice required under 39 notice of filing a request with the Postal is available on the Exchange’s website at U.S.C. 3642(d)(1): December 26, 2017. Regulatory Commission to add a http://nasdaqphlx.cchwallstreet.com/, FOR FURTHER INFORMATION CONTACT: domestic shipping services contract to at the principal office of the Exchange, Elizabeth A. Reed, 202–268–3179. the list of Negotiated Service and at the Commission’s Public SUPPLEMENTARY INFORMATION: The Agreements in the Mail Classification Reference Room. United States Postal Service ® hereby Schedule’s Competitive Products List. II. Self-Regulatory Organization’s gives notice that, pursuant to 39 U.S.C. DATES: Date of notice required under 39 Statement of the Purpose of, and 3642 and 3632(b)(3), on December 19, U.S.C. 3642(d)(1): December 26, 2017. Statutory Basis for, the Proposed Rule 2017, it filed with the Postal Regulatory Change Commission a USPS Request to Add FOR FURTHER INFORMATION CONTACT: Priority Mail Contract 399 to Elizabeth A. Reed, 202–268–3179. In its filing with the Commission, the Competitive Product List. Documents Exchange included statements SUPPLEMENTARY INFORMATION: The are available at www.prc.gov, Docket concerning the purpose of and basis for United States Postal Service ® hereby Nos. MC2018–70, CP2018–110. the proposed rule change and discussed gives notice that, pursuant to 39 U.S.C. Elizabeth A. Reed, 3642 and 3632(b)(3), on December 19, any comments it received on the Attorney, Corporate and Postal Business Law. 2017, it filed with the Postal Regulatory proposed rule change. The text of these Commission a Request of the United statements may be examined at the [FR Doc. 2017–27659 Filed 12–22–17; 8:45 am] States Postal Service to Add Parcel places specified in Item IV below. The BILLING CODE 7710–12–P Select Contract 29 to Competitive Exchange has prepared summaries, set Product List. Documents are available at forth in sections A, B, and C below, of ethrower on DSK3G9T082PROD with NOTICES POSTAL SERVICE www.prc.gov, Docket Nos. MC2018–73, the most significant aspects of such CP2018–113. statements. Product Change—Parcel Select Negotiated Service Agreement Elizabeth A. Reed, Attorney, Corporate and Postal Business Law. AGENCY: Postal ServiceTM. [FR Doc. 2017–27657 Filed 12–22–17; 8:45 am] 1 15 U.S.C. 78s(b)(1). ACTION: Notice. 2 17 BILLING CODE 7710–12–P CFR 240.19b–4. VerDate Sep<11>2014 20:21 Dec 22, 2017 Jkt 244001 PO 00000 Frm 00100 Fmt 4703 Sfmt 4703 E:\FR\FM\26DEN1.SGM 26DEN1

61048 Federal Register / Vol. 82, No. 246 / Tuesday, December 26, 2017 / Notices A. Self-Regulatory Organization’s Tuesday of that week rather than the Monday SPY Expiration series will be Statement of the Purpose of, and previous business day, e.g., the previous P.M.-settled. Statutory Basis for, the Proposed Rule Friday, since the Tuesday is closer in Currently, for each option class Change time to the scheduled expiration date of eligible for participation in the Program, the series than the previous Friday, and the Exchange is limited to opening 1. Purpose thirty (30) series for each expiration date therefore may be more representative of The Exchange proposes to amend anticipated market conditions. The for the specific class. The thirty (30) Phlx Rules 1000(b)(44) and Rule 1012 at Exchange also notes that Cboe series restriction does not include series Commentary .11 to expand the Short Exchange, Inc. (‘‘Cboe’’) uses the same that are open by other securities Term Option Series Program procedure for options on the S&P 500 exchanges under their respective short (‘‘Program’’) to permit the listing and index (‘‘SPX’’) with Monday expirations term option rules; the Exchange may list trading of options series with Monday that listed pursuant to its Nonstandard these additional series that are listed by expirations that are listed pursuant to Expirations Pilot Program and that are other exchanges.5 This thirty (30) series the Program, including options on the scheduled to expire on a holiday.4 restriction shall apply to Monday SPY SPDR S&P 500 ETF Trust (‘‘SPY’’). Expiration series as well. In addition, As set forth in Rule 1044(b)(44), a The Exchange also proposes to make the Exchange will be able to list series Short Term Option Series is a series in corresponding changes to Commentary that are listed by other exchanges, an option class that is approved for .11 to Rule 1012, which sets forth the assuming they file similar rules with the listing and trading on the Exchange in requirements for SPY options that are Commission to list SPY options expiring which the series is opened for trading listed pursuant to the Short Term on Mondays. on any Tuesday, Wednesday, Thursday Options Series Program, to permit Finally, the Exchange is amending or Friday that is a business day and that Monday SPY expirations (‘‘Monday SPY Commentary .11(b) to Rule 1012, which expires on the Wednesday or Friday of Expirations’’). Accordingly, the addresses the listing of Short Term the next business week. The Exchange Exchange proposes to amend Options Series that expire in the same is now proposing to amend Rule Commentary .11 to state that, with week as monthly or quarterly options 1000(b)(44) to permit the listing of respect to Monday SPY Expirations, the series. Currently, that rule states that no options series that expire on Mondays. Exchange may open for trading on any Short Term Option Series may expire in Specifically, the Exchange is proposing Friday or Monday that is a business day the same week in which monthly option that it may open for trading series of series of options on the SPY to expire series on the same class expire (with the options on any Monday that is a on any Monday of the month that is a exception of Wednesday SPY business day and that expires on the business day and is not a Monday in Expirations) or, in the case of Quarterly Monday of the next business week. The which Quarterly Options Series expire, Options Series, on an expiration that Exchange is also proposing to list provided that Monday SPY Expirations coincides with an expiration of Monday expirations series on Fridays that are listed on a Friday must be listed Quarterly Option Series on the same that precede the expiration Monday by at least one business week and one class. As with Wednesday SPY one business week plus one business business day prior to the expiration. As Expirations, the Exchange is proposing day. Since Rule 1000(b)(44) already with the current rules for Wednesday to permit Monday SPY Expirations to provides for the listing of short term SPY Expirations, the Exchange will also expire in the same week as monthly option series on Fridays, the Exchange amend Commentary .11 to state that it options series on the same class. The is not modifying this provision to allow may list up to five consecutive Monday Exchange believes that it is reasonable for Friday listing of Monday expiration SPY Expirations at one time, and may to extend this exemption to Monday series. However, the Exchange is have no more than a total of five SPY Expirations because Monday SPY amending Rule 1000(b)(44) to clarify Monday SPY Expirations (in addition to Expirations and standard monthly that, in the case of a series that is listed a maximum of five Short Term Option options will not expire on the same on a Friday and expires on a Monday, Series expirations for SPY expiring on trading day, as standard monthly that series must be listed one business Friday and five Wednesday SPY options expire on Fridays. Additionally, week and one business day prior to that Expirations). The Exchange will also the Exchange believes that not listing expiration (i.e., two Fridays prior to clarify that, as with Wednesday SPY Monday SPY Expirations for one week expiration). Expirations, Monday SPY Expirations every month because there was a As part of this proposal, the Exchange will be subject to the provisions of this monthly SPY expiration on the Friday is also amending Rule 1000(b)(44) to Rule. of that week would create investor address the expiration of Monday The interval between strike prices for confusion. expiration series when the Monday is the proposed Monday SPY Expirations Relatedly, Phlx is also amending not a business day. In that case, the rule will be the same as those for the current Commentary .11(b) to Rule 1012 to will provide that the series shall expire Short Term Option Series for clarify that Monday and Wednesday on the first business day immediately Wednesday and Friday SPY Expirations. SPY Expirations may expire in the same following that Monday. This procedure Specifically, the Monday SPY week as monthly option series in the differs from the expiration date of Expirations will have a $0.50 strike same class expire, but that no Short Wednesday expiration series that are interval minimum. As is the case with Term Option Series may expire on the scheduled to expire on a holiday. In that other options series listed pursuant to same day as an expiration of Quarterly case, the Wednesday expiration series the Short Term Option Series, the Option Series on the same class. This shall expire on the first business day change will make that provision more ethrower on DSK3G9T082PROD with NOTICES immediately prior to that Wednesday, 4 See CBOE Rule 24.9(e)(1) (‘‘If the Exchange is consistent with the existing language in e.g., Tuesday of that week.3 However, not open for business on a respective Monday, the Commentary .11 that prohibits the Exchange believes that it is normally Monday expiring Weekly Expirations will Wednesday SPY Expirations from preferable to require Monday expiration expire on the following business day. If the expiring on a Wednesday in which Exchange is not open for business on a respective series in this scenario to expire on the Wednesday or Friday, the normally Wednesday or Quarterly Options Series expire. Friday expiring Weekly Expirations will expire on 3 See Phlx Rule 1000(b)(44). the previous business day.’’) 5 See Phlx Rule 1012 at Commentary .11(a). 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Federal Register / Vol. 82, No. 246 / Tuesday, December 26, 2017 / Notices 61049 The Exchange does not believe that system, and, in general to protect minimize investor confusion by any market disruptions will be investors and the public interest. providing Monday SPY Expirations in a encountered with the introduction of In particular, the Exchange believes continuous and uniform manner. The P.M.-settled Monday expirations. The the Short Term Option Series Program Exchange also believes that is Exchange has the necessary capacity has been successful to date and that appropriate to amend Commentary and surveillance programs in place to Monday expirations, including Monday .11(b) to Rule 1012 to clarify that no support and properly monitor trading in SPY Expirations, simply expand the Short Term Option Series may expire on the proposed Monday expiration series, ability of investors to hedge risk against the same day as an expiration of including Monday SPY Expirations. The market movements stemming from Quarterly Option Series on the same Exchange currently trades P.M.-settled economic releases or market events that class. This change will make that Short Term Option Series that expire occur throughout the month in the same provision more consistent with the almost every Wednesday and Friday, way that the Short Term Option Series existing language in Commentary .11 which provide market participants a Program has expanded the landscape of that prohibits Wednesday SPY tool to hedge special events and to hedging. Similarly, the Exchange Expirations from expiring on a reduce the premium cost of buying believes Monday expirations, including Wednesday in which Quarterly Options protection. The Exchange notes that it Monday SPY Expirations, should create Series expire. has been listing Wednesday expirations greater trading and hedging Finally, the Exchange represents that pursuant to Rule 1000 and Rule 1012 opportunities and flexibility, and will it has an adequate surveillance program since 2016.6 With the exception of provide customers with the ability to in place to detect manipulative trading Monday expiration series that are tailor their investment objectives more in Monday expirations, including scheduled to expire on a holiday, the effectively. While other exchanges do Monday SPY Expirations, in the same Exchange does not believe that there are not currently list Monday SPY way that it monitors trading in the any material differences between Expirations, the Exchange notes that current Short Term Option Series. The Monday expirations and Wednesday or Cboe currently permits Monday Exchange also represents that it has the Friday expirations for Short Term expirations for other options with a necessary systems capacity to support Option Series. weekly expiration, such as options on the new options series. The Exchange seeks to introduce the SPX. With the exception of Monday B. Self-Regulatory Organization’s Monday expirations to, among other Statement on Burden on Competition things, expand hedging tools available expiration series that are scheduled to to market participants and to continue expire on a holiday, the Exchange does The Exchange does not believe that the reduction of the premium cost of not believe that there are any material the proposed rule change will impose buying protection. The Exchange differences between Monday any burden on competition not expirations, including Monday SPY necessary or appropriate in furtherance believes that Monday expirations, expirations, and Wednesday or Friday of the purposes of the Act. The similar to Wednesday and Friday expirations, including Wednesday and Exchange notes that having Monday expirations, will allow market Friday SPY Expirations, for Short Term expirations is not a novel proposal, as participants to purchase an option based Option Series. The Exchange notes that Cboe currently lists and trades short- on their timing as needed and allow it has been listing Wednesday term SPX options with a Monday them to tailor their investment and expirations pursuant to Rule 1000 and expiration. The Exchange does not hedging needs more effectively. Rule 1012 since 2016. The Exchange believe the proposal will impose any While other exchanges do not believes that it is consistent with the burden on intra-market competition, as currently list Monday SPY Expirations, Act to treat Monday expiration series all market participants will be treated in the Exchange notes that other exchanges that expire on a holiday differently than currently permit Monday expirations for the same manner under this proposal. Wednesday or Friday expiration series, Additionally, the Exchange does not other options. For example, Cboe lists since the proposed treatment for options on the SPX with a Monday believe the proposal will impose any Monday expiration series will result in burden on inter-market competition, as expiration as part of its Nonstandard an expiration date that is closer in time Expirations Pilot Program.7 nothing prevents the other options to the scheduled expiration date of the exchanges from proposing similar rules 2. Statutory Basis series, and therefore may be more to list and trade short-term options representative of anticipated market series with Monday expirations. The Exchange believes that its conditions. The Exchange also notes proposal is consistent with Section 6(b) that Cboe uses the same procedure for C. Self-Regulatory Organization’s of the Act,8 in general, and furthers the SPX options with Monday expirations Statement on Comments on the objectives of Section 6(b)(5) of the Act,9 that are listed pursuant to its Proposed Rule Change Received From in particular, in that it is designed to Nonstandard Expirations Pilot Program Members, Participants, or Others promote just and equitable principles of and that are scheduled to expire on a No written comments were either trade, to remove impediments to and holiday. solicited or received. perfect the mechanism of a free and Given the similarities between open market and a national market Monday SPY Expiration series and III. Date of Effectiveness of the Wednesday and Friday SPY Expiration Proposed Rule Change and Timing for 6 See Securities Exchange Act Release No. 78693 series, the Exchange believes that Commission Action (August 26, 2016), 81 FR 60074 (August 31, 2016) (SR–Phlx–2016–89). applying the provisions in Commentary Within 45 days of the date of ethrower on DSK3G9T082PROD with NOTICES 7 See CBOE Rule 24.9(e)(1) (‘‘The Exchange may .11 to Rule 1012 that currently apply to publication of this notice in the Federal open for trading Weekly Expirations on any broad- Wednesday SPY Expirations to Monday Register or within such longer period (i) based index eligible for standard options trading to SPY Expirations is justified. For as the Commission may designate up to expire on any Monday, Wednesday, or Friday (other than the third Friday-of-the-month or days that example, the Exchange believes that 90 days of such date if it finds such coincide with an EOM expiration.’’). allowing Monday SPY Expirations and longer period to be appropriate and 8 15 U.S.C. 78f(b). monthly SPY expirations in the same publishes its reasons for so finding or 9 15 U.S.C. 78f(b)(5). week will benefit investors and (ii) as to which the Exchange consents, VerDate Sep<11>2014 20:21 Dec 22, 2017 Jkt 244001 PO 00000 Frm 00102 Fmt 4703 Sfmt 4703 E:\FR\FM\26DEN1.SGM 26DEN1

61050 Federal Register / Vol. 82, No. 246 / Tuesday, December 26, 2017 / Notices the Commission shall: (a) By order and Markets, pursuant to delegated Sec. 5 Minimum Increments approve or disapprove such proposed authority.10 rule change, or (b) institute proceedings (a) The Board may establish minimum Eduardo A. Aleman, quoting increments for options contracts to determine whether the proposed rule change should be disapproved. Assistant Secretary. traded on BX Options. Such minimum [FR Doc. 2017–27700 Filed 12–22–17; 8:45 am] increments established by the Board IV. Solicitation of Comments BILLING CODE 8011–01–P will be designated as a stated policy, Interested persons are invited to practice, or interpretation with respect submit written data, views, and to the administration of this Section arguments concerning the foregoing, SECURITIES AND EXCHANGE within the meaning of Section 19 of the including whether the proposed rule COMMISSION Exchange Act and will be filed with the change is consistent with the Act. SEC as a rule change for effectiveness Comments may be submitted by any of [Release No. 34–82367; File No. SR–BX– upon filing. Until such time as the the following methods: 2017–056] Board makes a change in the Electronic Comments increments, the following principles Self-Regulatory Organizations; Nasdaq shall apply: • Use the Commission’s internet BX, Inc.; Notice of Filing and comment form (http://www.sec.gov/ Immediate Effectiveness of Proposed (1)–(2) No Change. rules/sro.shtml); or Rule Change To Extend the Penny (3) For a pilot period scheduled to • Send an email to rule-comments@ Pilot Program expire on [December 31, 2017]June 30, sec.gov. Please include File Number SR– 2018 or the date of permanent approval, December 19, 2017. Phlx–2017–103 on the subject line. if earlier, if the options series is trading Pursuant to Section 19(b)(1) of the pursuant to the Penny Pilot program one Paper Comments Securities Exchange Act of 1934 (1) cent if the options series is trading • Send paper comments in triplicate (‘‘Act’’),1 and Rule 19b–4 thereunder,2 at less than $3.00, five (5) cents if the to Secretary, Securities and Exchange notice is hereby given that on December options series is trading at $3.00 or Commission, 100 F Street NE, 11, 2017, Nasdaq BX, Inc. (‘‘BX’’ or higher, unless for QQQQs, SPY and Washington, DC 20549–1090. ‘‘Exchange’’) filed with the Securities IWM where the minimum quoting All submissions should refer to File and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule increment will be one cent for all series Number SR–Phlx–2017–103. This file regardless of price. A list of such number should be included on the change as described in Items I and II, below, which Items have been prepared options shall be communicated to subject line if email is used. To help the membership via an Options Trader Alert Commission process and review your by the Exchange. The Commission is publishing this notice to solicit (‘‘OTA’’) posted on the Exchange’s comments more efficiently, please use comments on the proposed rule change website. only one method. The Commission will post all comments on the Commission’s from interested persons. The Exchange may replace any pilot internet website (http://www.sec.gov/ I. Self-Regulatory Organization’s issues that have been delisted with the rules/sro.shtml). Statement of the Terms of Substance of next most actively traded multiply Copies of the submission, all the Proposed Rule Change listed options classes that are not yet subsequent amendments, all written included in the pilot, based on trading statements with respect to the proposed The Exchange proposes to amend activity in the previous six months. The rule change that are filed with the Chapter VI, Section 5 (Minimum replacement issues may be added to the Commission, and all written Increments),3 to extend through June 30, pilot on the second trading day communications relating to the 2018 or the date of permanent approval, following [July 1, 2017]January 1, 2018. proposed rule change between the if earlier, the Penny Pilot Program in (4) No Change. Commission and any person, other than options classes in certain issues (‘‘Penny those that may be withheld from the Pilot’’ or ‘‘Pilot’’), and to change the (b) No Change. public in accordance with the date when delisted classes may be * * * * * provisions of 5 U.S.C. 552, will be replaced in the Penny Pilot. available for website viewing and II. Self-Regulatory Organization’s The text of the proposed rule change Statement of the Purpose of, and printing in the Commission’s Public is set forth below. Proposed new Reference Room, 100 F Street NE, Statutory Basis for, the Proposed Rule language is underlined; deleted text is Washington, DC 20549, on official Change in brackets. business days between the hours of * * * * * In its filing with the Commission, the 10:00 a.m. and 3:00 p.m. Copies of the Exchange included statements filing also will be available for Nasdaq BX Rules inspection and copying at the principal concerning the purpose of and basis for Options Rules the proposed rule change and discussed office of the Exchange. All comments received will be posted without change; * * * * * any comments it received on the the Commission does not edit personal proposed rule change. The text of these Chapter VI Trading Systems statements may be examined at the identifying information from ethrower on DSK3G9T082PROD with NOTICES submissions. You should submit only * * * * * places specified in Item IV below. The information that you wish to make Exchange has prepared summaries, set available publicly. All submissions 10 17 CFR 200.30–3(a)(12). forth in sections A, B, and C below, of should refer to File Number SR–Phlx– 1 15 U.S.C. 78s(b)(1). the most significant aspects of such 2 17 CFR 240.19b–4. 2017–103 and should be submitted on statements. 3 References herein to Chapter and Series refer to or before January 16, 2018. For the rules of the BX Options Market (‘‘BX Options’’), Commission, by the Division of Trading unless otherwise noted. VerDate Sep<11>2014 20:21 Dec 22, 2017 Jkt 244001 PO 00000 Frm 00103 Fmt 4703 Sfmt 4703 E:\FR\FM\26DEN1.SGM 26DEN1


Document Created: 2017-12-23 03:08:23
Document Modified: 2017-12-23 03:08:23
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation82 FR 61047 
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