[Federal Register Volume 86, Number 78 (Monday, April 26, 2021)]
[Notices]
[Pages 22082-22083]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-08565]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91614; File No. SR-Phlx-2021-10]


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 
Invesco QQQ Trust\SM\ Series ETF Trust

April 20, 2021.

I. Introduction

    On February 22, 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 Commentary .11 to allow Monday and 
Wednesday expirations for options listed pursuant to the Exchange's 
short term option series program (``Short Term Option Series Program'') 
on the Invesco QQQ Trust\SM\ Series (``QQQ'') ETF Trust. The proposed 
rule change was published for comment in the Federal Register on March 
8, 2021.\3\ The Commission received no comments on the proposal. This 
order approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 91238 (March 2, 
2021), 86 FR 13404 (``Notice'').
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II. Description of the Proposal

    Under the terms of the current Short Term Option Series 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,\4\ 
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.\5\ 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.\6\ In addition, the Exchange may open 
for

[[Page 22083]]

trading on any Friday or Monday that is a business day series of 
options on the SPDR S&P 500 ETF Trust (``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 expirations that are 
listed on a Friday must be listed at least one business week and one 
business day prior to the expiration.\7\ The Exchange also may open for 
trading on any Tuesday or Wednesday that is a business day series of 
options on SPY to expire on any Wednesday of the month that is a 
business day and is not a Wednesday in which Quarterly Options Series 
expire.\8\
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    \4\ See Commentary .11 to Phlx Options 4, Section 5.
    \5\ See Commentary .11(b) to Phlx Options 4, Section 5.
    \6\ See Commentary .11 to Phlx Options 4, Section 5.
    \7\ See id.
    \8\ See id.
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    The Exchange proposes to expand the Short Term Option Series 
Program to permit Phlx to open for trading, on any Monday or Friday 
that is a business day, series of options on QQQ that expire on any 
Monday of the month that is a business day and is not a Monday in which 
Quarterly Options Series on the same class expire (``Monday QQQ 
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 QQQ 
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 Short Term 
Option Series Program to permit Phlx to open for trading, on any 
Tuesday or Wednesday that is a business day, series of options on QQQ 
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 QQQ Expirations''). If the Wednesday QQQ 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 Commentary .11 to 
Options 4, Section 5, to state that it may list up to five consecutive 
Monday QQQ Expirations at one time and up to five consecutive Wednesday 
QQQ Expirations at one time, and that there may be no more than a total 
of five Monday QQQ Expirations and no more than a total of five 
Wednesday QQQ Expirations. The Exchange also proposes to amend 
Commentary .11(b) to Options 4, Section 5 to permit Monday QQQ 
Expirations and Wednesday QQQ Expirations to expire in the same week in 
which monthly options series on the same class expire. Otherwise, 
Monday QQQ Expirations and Wednesday QQQ Expirations will be subject to 
the same rules as standard Short Term Option Series.\9\
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    \9\ For example, the Monday QQQ Expirations and Wednesday QQQ 
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 13404-5.
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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.\10\ Specifically, the Commission finds that the proposal is 
consistent with the requirements of Sections 6(b)(5) of the Act,\11\ 
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. 
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 QQQ options, 
thus allowing them to better manage their risk exposure. In addition, 
the Commission notes that the Exchange has similar rules permitting the 
listing and trading of Monday and Wednesday expirations on SPY.\12\
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    \10\ 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).
    \11\ 15 U.S.C. 78f(b)(5).
    \12\ See Commentary .11 to Phlx Options 4, Section 5.
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    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 QQQ Expirations and Wednesday 
QQQ Expirations.\13\ The Exchange further states that it has the 
necessary systems capacity to support the new options series.\14\
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    \13\ See Notice, supra note 3, at 13406.
    \14\ Id.
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IV. Conclusion

    It is therefore ordered that pursuant to Section 19(b)(2) of the 
Act \15\ that the proposed rule change (SR-Phlx-2021-10) be, and hereby 
is, approved.
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    \15\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.300-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-08565 Filed 4-23-21; 8:45 am]
BILLING CODE 8011-01-P


