Looking at the description of prismatic wall, it doesn't say anything about where it has to be placed. It seems to me it could be cast in the air or underwater.
Is there any restriction on where you can place it?
Like the similar spell wall of force, the only real restriction on the placement of a prismatic wall effect is that if the spell's "cast to materialize [the wall effect] in a space occupied by a creature… the spell is wasted."
In fact, the prismatic wall spell is even a spell of the abjuration school that creates an effect, so the prismatic wall effect is not bound by the limits of a spell of the conjuration school that creates an effect:
A[n] object brought into being or transported to your location by a conjuration spell cannot appear inside another… object, nor can it appear floating in an empty space. It must arrive in an open location on a surface capable of supporting it.
(Emphasis mine.) However, as a spell that creates an effect, as per Aiming a Spell on Line of Effect, the caster "must have a clear line of effect… to any space in which [the caster] wish[es] to create an effect," and this may limit the placement and size of the prismatic wall effect.
Compare the spell prismatic wall with the spell wall of stone that "must merge with and be solidly supported by existing stone" and the spell wall of iron that either "inserts itself into any surrounding nonliving material" or is "created vertically resting on a flat surface but not attached to the surface."