83 FR 53699 - Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Section (a)(i)(D) of Rule 1012

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 206 (October 24, 2018)

Page Range		53699-53701
FR Document		2018-23173
Federal Register, Volume 83 Issue 206 (Wednesday, October 24, 2018)
[Federal Register Volume 83, Number 206 (Wednesday, October 24, 2018)]
[Notices]
[Pages 53699-53701]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-23173]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84449; File No. SR-Phlx-2018-64]


Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend Section 
(a)(i)(D) of Rule 1012

October 18, 2018.
    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 October 17, 2018, Nasdaq PHLX LLC (``Exchange'') filed with the 
Securities and Exchange Commission

[[Page 53700]]

(``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 Section (a)(i)(D) of Rule 1012, 
Series of Options Open for Trading, to permit the listing and trading 
of up to ten expiration months for long term options on the 
SPDR[supreg] S&P 500[supreg] exchange-traded fund (the ``SPY ETF'').
    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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Section (a)(i)(D) of Rule 1012 currently provides that the Exchange 
may list, with respect to any class of stock or Exchange-Traded Fund 
Share options series, options having from twelve up to thirty-nine 
months from the time they are listed (``LEAPS'') until expiration. 
There may be up to six expiration months.\3\ The Exchange proposes to 
amend Section (a)(i)(D) of Rule 1012 to permit up to ten LEAPS 
expiration months for options on the SPDR[supreg] S&P 500[supreg] 
exchange-traded fund (``SPY'') in response to customer demand.\4\ The 
proposal will add liquidity to the SPY options market by allowing 
market participants to hedge risks relating to SPY positions over a 
longer time period with a known and limited cost.
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    \3\ Strike price interval, bid/ask differential and continuity 
rules shall not apply to such options series until the time to 
expiration is less than nine months.
    \4\ In contrast to Section (a)(i)(D) of Rule 1012, Exchange Rule 
1101A(b)(iii) which applies to index options permits to the Exchange 
to list LEAPS on any class of stock index options, adding up to ten 
expiration months. The Exchange seeks to list ten expiration months 
of LEAPS on the SPY ETF, just as it now may list ten LEAPS 
expiration months on index options, in order to provide investors 
with a wider choice of investments.
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    The SPY options market today is characterized by its tremendous 
daily and annual liquidity. As a consequence the Exchange believes that 
the listing of additional SPY LEAPS expiration months would be well 
received by investors. This proposal to expand the number of permitted 
SPY long-term expiration months would not apply to LEAPS on any other 
class of stock or Exchange-Traded Fund Share.\5\
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    \5\ Historically, SPY is the largest and most actively traded 
ETF in the United States as measured by its assets under management 
and the value of shares traded.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\6\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\7\ 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, 
by offering market participants additional LEAPS on SPY options for 
their investment and risk management purposes. The proposal is intended 
simply to provide additional trading opportunities which have been 
requested by customers, thereby facilitating transactions in options 
and contributing to the protection of investors and the maintenance of 
fair and orderly markets. The proposed rule change responds to the 
continuing needs of market participants, particularly portfolio 
managers and other institutional customers, by providing protection 
from long-term market moves and by offering an alternative to hedging 
portfolios with futures positions or off-exchange customized derivative 
instruments.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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    Rule 1012 has permitted up to six expiration months in LEAPS since 
1991, when the Exchange increased the number of permissible expiration 
months from four to six. In approving the increase to six expiration 
months, the Commission stated that it did not believe that increasing 
the number of expiration months to six would cause, by itself, a 
proliferation of expiration months. The Commission also required that 
the Exchange monitor the volume of additional options series listed as 
a result of the rule change, and the effect on the Exchange's system 
capacity and quotation dissemination displays.\8\ The Exchange believes 
that the addition today of four additional expiration months for SPY 
LEAPS likewise does not represent a proliferation of expiration months, 
but is instead a very modest expansion of LEAPS options in response to 
stated customer demand. Significantly, the proposal would feature new 
LEAPS expiration months in only a single class of options that are very 
liquid and heavily traded, as discussed above. Additionally, the 
Exchange notes by way of precedent that ten expiration months are 
already permitted for stock index LEAPS options. Further, the Exchange 
has the necessary systems capacity to support the new SPY expiration 
months.
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    \8\ See Securities Exchange Act Release No. 29103 (April 18, 
1991), 56 FR 19132 (April 25, 1991) (approving SR-Phlx-91-18).
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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. The proposal merely provides 
investors additional investment and risk management opportunities by 
providing flexibility to the Exchange to list additional long term 
options expiration series, expanding the number of SPY LEAPS offered on 
the Exchange from six expiration months to ten expiration months.

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 \9\ and

[[Page 53701]]

subparagraph (f)(6) of Rule 19b-4 thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 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:

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-2018-64 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-2018-64. 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-2018-64, and should be submitted on 
or before November 14, 2018.
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    \11\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-23173 Filed 10-23-18; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 83, No. 206 / Wednesday, October 24, 2018 / Notices 53699

changes to the rule text would provide size, and would not impose a Commission process and review your
clarity and transparency to Exchange competitive burden on any participant. comments more efficiently, please use
rules and would promote just and The proposed quote designations, only one method. The Commission will
equitable principles of trade and remove which provide Market Makers with post all comments on the Commission’s
impediments to, and perfect the enhanced determinism over their internet website (http://www.sec.gov/
mechanism of, a free and open market quotes, may contribute to more rules/sro.shtml). Copies of the
and a national market system.46 The aggressive quoting by Market Makers, submission, all subsequent
proposed rule amendments would also resulting in more trading opportunities amendments, all written statements
provide internal consistency within and tighter spreads. To the extent this with respect to the proposed rule
Exchange rules and operate to protect purpose is achieved, the proposed quote change that are filed with the
investors and the investing public by designations would enhance the market Commission, and all written
making the Exchange rules easier to making function on the Exchange, communications relating to the
navigate and comprehend. which would improve overall market proposed rule change between the
quality and improve competition on the Commission and any person, other than
B. Self-Regulatory Organization’s
Exchange to the benefit of all market those that may be withheld from the
Statement on Burden on Competition
participants. public in accordance with the
The Exchange does not believe that provisions of 5 U.S.C. 552, will be
the proposed rule change would impose C. Self-Regulatory Organization’s available for website viewing and
any burden on competition that is not Statement on Comments on the printing in the Commission’s Public
necessary or appropriate in furtherance Proposed Rule Change Received From Reference Room, 100 F Street NE,
of the purposes of the Act. The Members, Participants, or Others Washington, DC 20549 on official
Exchange believes the proposed quote No written comments were solicited business days between the hours of
designations would add value to market or received with respect to the proposed 10:00 a.m. and 3:00 p.m. Copies of the
making on the Exchange and the rule change. filing also will be available for
proposed order types would provide inspection and copying at the principal
market participants the option of III. Date of Effectiveness of the office of the Exchange. All comments
exercising greater control over how Proposed Rule Change and Timing for received will be posted without change.
orders interact with contra-side Commission Action Persons submitting comments are
liquidity both on the Exchange and on Within 45 days of the date of cautioned that we do not redact or edit
away markets. The proposed quotations publication of this notice in the Federal personal identifying information from
and order types would allow market Register or within such longer period comment submissions. You should
participants to exert greater control over up to 90 days (i) as the Commission may submit only information that you wish
how their quotes and orders interact designate if it finds such longer period to make available publicly. All
with liquidity on the Exchange, thereby to be appropriate and publishes its submissions should refer to File
attracting more investors to the reasons for so finding or (ii) as to which Number SR–NYSEArca–2018–74 and
Exchange, which, in turn, leads to the self-regulatory organization should be submitted on or before
greater price discovery and improves consents, the Commission will: November 14, 2018.
overall market quality. (A) By order approve or disapprove For the Commission, by the Division of
The Exchange does not believe the the proposed rule change, or Trading and Markets, pursuant to delegated
proposal would impose a burden on (B) institute proceedings to determine authority.47
competition among the options whether the proposed rule change Eduardo A. Aleman,
exchanges but instead, because the should be disapproved. Assistant Secretary.
Exchange would be offering the
proposed optional quotes and order IV. Solicitation of Comments [FR Doc. 2018–23174 Filed 10–23–18; 8:45 am]
types, the proposal would add to the BILLING CODE 8011–01–P
Interested persons are invited to
existing competitive landscape. In this submit written data, views, and
highly competitive market, the arguments concerning the foregoing, SECURITIES AND EXCHANGE
Exchange would be at a competitive including whether the proposed rule COMMISSION
disadvantage absent this proposal, change is consistent with the Act.
which adopts functionality available on Comments may be submitted by any of [Release No. 34–84449; File No. SR–Phlx–
other options exchanges. Permitting the the following methods: 2018–64]
Exchange to operate on an even playing
field relative to other exchanges that Electronic Comments Self-Regulatory Organizations; Nasdaq
have similar functionality removes • Use the Commission’s internet PHLX LLC; Notice of Filing and
impediments to and perfects the comment form (http://www.sec.gov/ Immediate Effectiveness of Proposed
mechanism for a free and open market rules/sro.shtml); or Rule Change To Amend Section
and a national market system. The • Send an email to rule-comments@ (a)(i)(D) of Rule 1012
proposal does not impose an undue sec.gov. Please include File Number SR– October 18, 2018.
burden on intramarket competition NYSEArca–2018–74 on the subject line. Pursuant to Section 19(b)(1) of the
because the proposed quote Paper Comments Securities Exchange Act of 1934
designations would be available to all (‘‘Act’’),1 and Rule 19b–4 thereunder,2
Market Makers on the Exchange and the • Send paper comments in triplicate notice is hereby given that on October
amozie on DSK3GDR082PROD with NOTICES1

proposed order types would be available to Secretary, Securities and Exchange 17, 2018, Nasdaq PHLX LLC
to all market participants. The proposal Commission, 100 F Street NE, (‘‘Exchange’’) filed with the Securities
is structured to offer the same Washington, DC 20549–1090. and Exchange Commission
enhancement to all Market Makers and/ All submissions should refer to File
or market participants, regardless of Number SR–NYSEArca-2018–74. This 47 17 CFR 200.30–3(a)(12).
file number should be included on the 1 15 U.S.C. 78s(b)(1).
46 See, e.g., supra nn. 4, 5, 16, 17, 24. subject line if email is used. To help the 2 17 CFR 240.19b–4.

VerDate Sep<11>2014 17:43 Oct 23, 2018 Jkt 247001 PO 00000 Frm 00096 Fmt 4703 Sfmt 4703 E:\FR\FM\24OCN1.SGM 24OCN1
Federal Register / Vol. 83, No. 206 / Wednesday, October 24, 2018 / Notices 53701

subparagraph (f)(6) of Rule 19b–4 Reference Room, 100 F Street NE, 10/16/2018, Private Non-Profit
thereunder.10 Washington, DC 20549, on official organizations that provide essential
At any time within 60 days of the business days between the hours of services of a governmental nature may
filing of the proposed rule change, the 10:00 a.m. and 3:00 p.m. Copies of the file disaster loan applications at the
Commission summarily may filing also will be available for address listed above or other locally
temporarily suspend such rule change if inspection and copying at the principal announced locations.
it appears to the Commission that such office of the Exchange. All comments The following areas have been
action is necessary or appropriate in the received will be posted without change. determined to be adversely affected by
public interest, for the protection of Persons submitting comments are the disaster:
investors, or otherwise in furtherance of cautioned that we do not redact or edit Primary Counties: Berkeley, Calhoun,
the purposes of the Act. If the personal identifying information from Chesterfield, Clarendon, Colleton,
Commission takes such action, the comment submissions. You should Darlington, Dillon, Florence,
Commission shall institute proceedings submit only information that you wish Georgetown, Horry, Lancaster,
to determine whether the proposed rule to make available publicly. All Marion, Marlboro, Williamsburg.
should be approved or disapproved. submissions should refer to File The Interest Rates are:
Number SR–Phlx–2018–64, and should
IV. Solicitation of Comments
be submitted on or before November 14, Percent
Interested persons are invited to 2018.
submit written data, views, and For Physical Damage:
For the Commission, by the Division of
arguments concerning the foregoing, Trading and Markets, pursuant to delegated Non-Profit Organizations with
including whether the proposed rule authority.11 Credit Available Elsewhere ... 2.500
change is consistent with the Act. Eduardo A. Aleman,
Non-Profit Organizations with-
Comments may be submitted by any of out Credit Available Else-
Assistant Secretary. where ..................................... 2.500
the following methods:
[FR Doc. 2018–23173 Filed 10–23–18; 8:45 am] For Economic Injury:
Electronic Comments BILLING CODE 8011–01–P Non-Profit Organizations with-
out Credit Available Else-
• Use the Commission’s internet
where ..................................... 2.500
comment form (http://www.sec.gov/
rules/sro.shtml); or SMALL BUSINESS ADMINISTRATION The number assigned to this disaster
• Send an email to rule-comments@
[Disaster Declaration #15750 and #15751; for physical damage is 157508 and for
sec.gov. Please include File Number SR–
South Carolina Disaster Number SC–00056] economic injury is 157510.
Phlx–2018–64 on the subject line.
(Catalog of Federal Domestic Assistance
Paper Comments Presidential Declaration of a Major Number 59008)
Disaster for Public Assistance Only for
• Send paper comments in triplicate the State of South Carolina James Rivera,
to Secretary, Securities and Exchange Associate Administrator for Disaster
Commission, 100 F Street NE, AGENCY: U.S. Small Business Assistance.
Washington, DC 20549–1090. Administration. [FR Doc. 2018–23240 Filed 10–23–18; 8:45 am]
All submissions should refer to File ACTION: Notice. BILLING CODE 8025–01–P
Number SR–Phlx–2018–64. This file
number should be included on the SUMMARY: This is a Notice of the
subject line if email is used. To help the Presidential declaration of a major SMALL BUSINESS ADMINISTRATION
Commission process and review your disaster for Public Assistance Only for
comments more efficiently, please use the State of South Carolina (FEMA– [Disaster Declaration #15744 and #15745;
4394–DR), dated 10/16/2018. Georgia Disaster Number GA–00108]
only one method. The Commission will
post all comments on the Commission’s Incident: Hurricane Florence.
Incident Period: 09/08/2018 through Presidential Declaration Amendment of
internet website (http://www.sec.gov/ a Major Disaster for the State of
rules/sro.shtml). Copies of the 10/08/2018.
Georgia
submission, all subsequent DATES: Issued on 10/16/2018.
amendments, all written statements Physical Loan Application Deadline AGENCY: U.S. Small Business
with respect to the proposed rule Date: 12/17/2018. Administration.
change that are filed with the Economic Injury (EIDL) Loan ACTION: Amendment 1.
Commission, and all written Application Deadline Date: 07/16/2019.
communications relating to the ADDRESSES: Submit completed loan SUMMARY: This is an amendment of the
proposed rule change between the applications to: U.S. Small Business Presidential declaration of a major
Commission and any person, other than Administration, Processing and disaster for the State of Georgia (FEMA–
those that may be withheld from the Disbursement Center, 14925 Kingsport 4400–DR), dated 10/14/2018.
public in accordance with the Road, Fort Worth, TX 76155. Incident: Hurricane Michael.
provisions of 5 U.S.C. 552, will be Incident Period: 10/09/2018 and
FOR FURTHER INFORMATION CONTACT: A.
available for website viewing and continuing.
Escobar, Office of Disaster Assistance,
printing in the Commission’s Public U.S. Small Business Administration, DATES: Issued on 10/16/2018.
amozie on DSK3GDR082PROD with NOTICES1

10 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
409 3rd Street SW, Suite 6050, Physical Loan Application Deadline
4(f)(6) requires a self-regulatory organization to give Washington, DC 20416, (202) 205–6734. Date: 12/13/2018.
the Commission written notice of its intent to file SUPPLEMENTARY INFORMATION: Notice is Economic Injury (EIDL) Loan
the proposed rule change at least five business days hereby given that as a result of the Application Deadline Date: 07/15/2019.
prior to the date of filing of the proposed rule
President’s major disaster declaration on ADDRESSES: Submit completed loan
change, or such shorter time as designated by the
Commission. The Exchange has satisfied this applications to: U.S. Small Business
requirement. 11 17 CFR 200.30–3(a)(12). Administration, Processing and

VerDate Sep<11>2014 17:43 Oct 23, 2018 Jkt 247001 PO 00000 Frm 00098 Fmt 4703 Sfmt 4703 E:\FR\FM\24OCN1.SGM 24OCN1
Document Created: 2018-10-24 00:23:40
Document Modified: 2018-10-24 00:23:40
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		83 FR 53699