Federal Register #SR-Phlx-2026-49

SEC Notice: Nasdaq PHLX LLC Proposed Rule Change for FLEX ETF Options

This notice concerns a proposed rule change by Nasdaq PHLX LLC, published by the Securities and Exchange Commission (SEC), regarding FLEX Electronic Options Listing Rules. - Government buyer: - Securities and Exchange Commission (SEC) - OEMs and vendors: - No OEMs or vendors are mentioned, as this is a regulatory notice, not a procurement - Products/services requested: - No products or services are being requested - Notable requirements and details: - The rule change amends FLEX Equity Options rules for Exchange-Traded Funds (ETFs) eligible for cash settlement - Newly FLEX-eligible ETFs must meet heightened eligibility thresholds ($600 million average daily notional value and 5,616,000 shares average daily volume over the previous month) to qualify for cash settlement - Introduces tiered criteria for handling cash-settled FLEX ETF Options when an ETF loses eligibility during bi-annual reviews - Removes the cap that previously limited cash settlement as a contract term to no more than 50 underlying ETFs - The rule change is effective immediately and is identical to a similar proposal by Cboe - No procurement, purchase quantities, or part numbers are provided

Description

The Securities and Exchange Commission published a notice regarding a proposed rule change by Nasdaq PHLX LLC to amend the FLEX Electronic Options Listing Rules. The amendments include permitting newly FLEX-eligible ETFs that meet heightened eligibility thresholds to be eligible for cash settlement as a contract term, establishing tiered criteria for cash-settled FLEX ETF Options when the underlying ETF ceases to meet requirements, and eliminating the cap limiting cash settlement to no more than 50 underlying ETFs. The filing is effective immediately and aims to refine the existing framework while maintaining protections against market manipulation.

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