80 FR 46625 - Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 3301B(a)

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 150 (August 5, 2015)

Page Range		46625-46627
FR Document		2015-19131

Federal Register, Volume 80 Issue 150 (Wednesday, August 5, 2015)

[Federal Register Volume 80, Number 150 (Wednesday, August 5, 2015)]
[Notices]
[Pages 46625-46627]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2015-19131]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75561; File No. SR-Phlx-2015-66]

Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
Rule 3301B(a)

July 30, 2015.
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 July 20, 2015, NASDAQ OMX PHLX LLC (``Phlx'' or ``Exchange'') filed
with the Securities and Exchange Commission (``SEC'' or ``Commission'')
the proposed rule change as described in Items I and II 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 Rule 3301B(a) to remove the Market
Hours Immediate or Cancel Time in Force and to delay implementation of
changes to the Good-til-market close Time in Force, which were recently
adopted by Phlx but are not yet implemented.
The text of the proposed rule change is available on the Exchange's
Web site at http://nasdaqomxphlx.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
Statutory Basis for, the Proposed Rule Change

1. Purpose
The Exchange is proposing to amend Rule 3301B(a) to remove the
Market Hours Immediate or Cancel (``Market Hours IOC'' or ``MIOC'')
Time-in-Force and to delay implementation of changes to the Good-til-
market close (``GTMC'') Time-in-Force, which were recently adopted by
Phlx but are not yet implemented in the NASDAQ OMX PSX System
(``System'' or ``PSX'').\3\ Time-in-Force (``TIF'') is a characteristic
of an order that limits the period of time that the System will hold an
order for potential execution. An Order that is designated to
deactivate immediately after determining whether the Order is
marketable may be referred to as having a TIF of ``Immediate or
Cancel'' or ``IOC''.\4\ Any Order with a TIF of IOC entered between
9:30 a.m. ET and 4:00 p.m. ET is considered as having a TIF of MIOC.\5\
The MIOC TIF is very similar to the SIOC \6\ TIF, but MIOC designated
orders are limited to entry and potential execution only during Regular
Market Hours. An order designated with a TIF of MIOC that is entered
outside of Regular Market Hours would be returned to the entering
member firm without attempting to execute. The Exchange has determined
that, based on a lack of market participant desire for a MIOC TIF and
the cost that would be incurred in developing and implementing it on
the Exchange, it will not implement the MIOC TIF at this juncture.
Accordingly, the Exchange is proposing to delete text under Rule
3301B(a)(1) concerning the MIOC TIF, which is effective but not yet
operative.
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\3\ The Exchange notes that the text at issue in this filing
concerning the MIOC TIF under Rule 3301B(a)(1) is not yet
implemented, but was recently inadvertently incorporated into the
PSX rulebook when the Commission approved certain rules governing
the PSX equities market in order to provide additional detail and
clarity regarding its order type functionality. See Securities
Exchange Act Release No. 75293 (June 24, 2015), 80 FR 37327 (June
30, 2015) (SR-Phlx-2015-29). Notwithstanding its inadvertent
inclusion in the rulebook, the rule text concerning the MIOC TIF is
not yet effective. The Exchange had anticipated implementing the
MIOC and GTMC changes in the second quarter of 2015. See Securities
Exchange Act Release No. 74628 (April 1, 2015), 80 FR 18662 (April
7, 2015) (SR-Phlx-2015-32).
\4\ See Rule 3301B(a)(1).
\5\ Id.
\6\ An Order with a Time-in-Force of IOC that is entered at any
time between 8:00 a.m. ET and 5:00 p.m. ET may be referred to as
having a Time-in-Force of ``System Hours Immediate or Cancel'' or
``SIOC''. Id.
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The Exchange is also proposing to amend Rule 3301B(a)(6) to make it
clear that the Exchange will no longer accept GTMC orders for execution
after 4:00 p.m. Eastern Time, which are currently accepted and
converted to SIOC orders if received after 4:00 p.m. Eastern Time. In
April 2015, the Exchange proposed this change to the predecessor rule
concerning GTMC orders in a prior filing with the Commission,\7\ and
had anticipated implementing the change at some point in the second
quarter of 2015. During that time, the Commission approved a rule
change that renumbered and clarified the rule.\8\ Accordingly, the
Exchange is now amending the renumbered rule to reflect the changes
made in the prior filing. The Exchange

[[Page 46626]]

is also proposing to delay the change to the operation of GTMC orders
after 4:00 p.m. Eastern Time, so that this change will now be
implemented the week of August 17, 2015 and will complete the
implementation the week of August 31, 2015.
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\7\ See Securities Exchange Act Release No. 74628 (April 1,
2015), 80 FR 18662 (April 7, 2015) (SR-Phlx-2015-32).
\8\ The Exchange also made a clarifying change to the rule,
which was incorporated into the renumbered rule. Supra note 3.
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The Exchange is also making a minor technical correction to Rule
3301B(a)(6) by inserting hyphenation in the term ``Time-in-Force'',
which will make it consistent with its use in other paragraphs of the
rule.
2. Statutory Basis
Phlx believes that the proposed rule change is consistent with the
provisions of Section 6 of the Act,\9\ in general, and with Section
6(b)(5) of the Act,\10\ in particular, in that the proposal is 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; and also in that it is not
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers. The Exchange believes that, in light of a lack of
market participant interest and the costs the Exchange would incur in
developing and implementing a MIOC TIF, it would be in the best
interest of the market and market participants not to implement the
change at this juncture. Implementing a change, which will not be used
significantly yet will represent a cost to the Exchange to implement,
could ultimately result in increased costs to market participants in
the form of increased fees. Accordingly, the Exchange is eliminating
the MIOC TIF until such time that the demand for it justifies the
expenditure.
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\9\ 15 U.S.C. 78f.
\10\ 15 U.S.C. 78f(b)(5).
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The proposed change to Rule 3301B(a)(6) is designed 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 because it modifies the rule to reflect a change made
to the predecessor rule, which was filed with the Commission as an
immediately effective filing to be implemented sometime in the second
quarter of 2015. The change, which was subject to the notice and
comment process, had not been implemented prior to the rule's
renumbering. Accordingly, the proposed change to amend Rule 3301B(a)(6)
merely modifies the rule text so that it is consistent with the changes
made to the predecessor rule.
The proposed delay in implementing the changes to the Good-til-
market close TIF is designed 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 because it
will provide the Exchange with a brief extension to adequately program
and test the proposed changes to the TIF. Moreover, the Exchange is
delaying implementation of the changes until after the reconstitution
of the Russell indexes, which is a day of significant volume in the
market and immediately prior to which the Exchange reduces the number
of changes made to the System. Accordingly, the proposed delay will
serve to reduce risk in the market during a time of significant volume
and provide the Exchange adequate time to program and test the proposed
changes, thereby protecting investors and the public interest.

B. Self-Regulatory Organization's Statement on Burden on Competition

The Exchange does not believe that the proposed rule change will
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act. Specifically,
the Exchange notes that there is little interest in MIOC among market
participants on PSX, and accordingly removing MIOC before it is
implemented will not impact the Exchange's competitiveness among
exchanges or other execution venues. In addition, the Exchange does not
believe that briefly delaying the changes to the Good-til-market close
TIF will place any burden on competition whatsoever because the TIF
will continue to be available unchanged until the Exchange has
adequately programmed and tested the proposed changes.

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

The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \11\ and Rule 19b-4(f)(6) thereunder.\12\
Because the 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, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \13\ and Rule 19b-
4(f)(6) thereunder.\14\
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\11\ 15 U.S.C. 78s(b)(3)(A)(iii).
\12\ 17 CFR 240.19b-4(f)(6).
\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change, along with a
brief description and text of 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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A proposed rule change filed under Rule 19b-4(f)(6) \15\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\16\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposed
rule change may become operative immediately. The Exchange represents
that market participants have not expressed interest in the MIOC TIF.
The Exchange therefore argues that waiver of the operative delay is
consistent with the protection of investors and the public interest
because it will allow the Exchange to remove the MIOC TIF prior its
implementation, thereby serving to avoid investor confusion. The
Exchange also reasons that waiving the operative delay would allow the
Exchange to make the required technical and operational changes to the
GTMC TIF after the reconstitution of the Russell Indexes. Based on the
foregoing, the Commission finds that waiving the 30-day operative delay
is consistent with the protection of investors and the public interest
and hereby designates the proposal operative upon filing.\17\
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\15\ 17 CFR 240.19b-4(f)(6).
\16\ 17 CFR 240.19b-4(f)(6)(iii).
\17\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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

[[Page 46627]]

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 change 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 rule-comments@sec.gov. Please include
File Number SR-Phlx-2015-66 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-2015-66. 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 Web site (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 Web site 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 such filing also will be available
for inspection and copying at the principal offices 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-2015-66,
and should be submitted on or before August 26, 2015.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12), (59).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-19131 Filed 8-4-15; 8:45 am]
BILLING CODE 8011-01-P

Federal Register / Vol. 80, No. 150 / Wednesday, August 5, 2015 / Notices 46627

it appears to the Commission that such should refer to File Number SR–Phlx– to the listing of Investment Company
action is necessary or appropriate in the 2015–66, and should be submitted on or Units based on municipal bond indexes.
public interest, for the protection of before August 26, 2015. The proposed rule change was
investors, or otherwise in furtherance of For the Commission, by the Division of published for comment in the Federal
the purposes of the Act. If the Trading and Markets, pursuant to delegated Register on February 4, 2015.3 On
Commission takes such action, the authority.18 March 19, 2015, pursuant to Section
Commission shall institute proceedings Robert W. Errett, 19(b)(2) of the Act,4 the Commission
to determine whether the proposed rule Deputy Secretary. designated a longer period within which
change should be approved or to approve the proposed rule change,
[FR Doc. 2015–19131 Filed 8–4–15; 8:45 am]
disapproved. disapprove the proposed rule change, or
BILLING CODE 8011–01–P
IV. Solicitation of Comments institute proceedings to determine
whether to disapprove the proposed
Interested persons are invited to rule change.5 On May 4, 2015, the
submit written data, views, and SECURITIES AND EXCHANGE
COMMISSION Commission published an order
arguments concerning the foregoing, instituting proceedings under Section
including whether the proposed rule [Release No. 34–75460; File No. SR– 19(b)(2)(B) of the Act 6 to determine
change is consistent with the Act. NYSEMKT–2015–48]
whether to approve or disapprove the
Comments may be submitted by any of
Self-Regulatory Organizations; NYSE proposed rule change.7 The Commission
the following methods:
MKT LLC; Notice of Filing and has received no comment letters on the
Electronic Comments Immediate Effectiveness of Proposed proposed rule change.
• Use the Commission’s Internet Rule Change Extending the Pilot Section 19(b)(2) of the Act 8 provides
comment form (http://www.sec.gov/ Period Applicable to the Customer that, after initiating disapproval
rules/sro.shtml); or Best Execution Auction per Rule proceedings, the Commission shall issue
• Send an email to rule-comments@ 971.1NY Until July 18, 2016 an order approving or disapproving the
sec.gov. Please include File Number SR– proposed rule change not later than 180
Phlx–2015–66 on the subject line. July 15, 2015.
days after the date of publication of
Paper Comments Correction notice of filing of the proposed rule
change. The Commission may, however,
• Send paper comments in triplicate In notice document 2015–17759,
extend the period for issuing an order
to Secretary, Securities and Exchange appearing on pages 43141 through
43143 in the issue of Tuesday, July 21, approving or disapproving the proposed
Commission, 100 F Street NE., rule change by not more than 60 days
Washington, DC 20549–1090. 2015, make the following correction:
On page 43143, in the first column, in if the Commission determines that a
All submissions should refer to File the last paragraph before the signature longer period is appropriate and
Number SR–Phlx–2015–66. This file block, on the 38th line, ‘‘August 10, publishes the reasons for that
number should be included on the 2015.’’ should read ‘‘August 11, 2015.’’ determination. The proposed rule
subject line if email is used. To help the [FR Doc. 2015–17759 Filed 8–4–15; 8:45 am] change was published for notice and
Commission process and review your comment in the Federal Register on
BILLING CODE 1505–01–P
comments more efficiently, please use February 4, 2015.9 The 180th day after
only one method. The Commission will publication of the notice of the filing of
post all comments on the Commission’s SECURITIES AND EXCHANGE the proposed rule change in the Federal
Internet Web site (http://www.sec.gov/ COMMISSION Register is August 3, 2015, and the
rules/sro.shtml). Copies of the 240th day after publication of the notice
submission, all subsequent [Release No. 34–75569; File No. SR– of the filing of the proposed rule change
amendments, all written statements NYSEArca–2015–01]
in the Federal Register is October 2,
with respect to the proposed rule 2015.
Self-Regulatory Organizations; NYSE
change that are filed with the
Arca, Inc.; Notice of Designation of a
Commission, and all written 3 See Securities Exchange Act Release No. 74175
Longer Period for Commission Action
communications relating to the (Jan. 29, 2015), 80 FR 6150.
on Proceedings to Determine Whether
proposed rule change between the 4 15 U.S.C. 78s(b)(2).

Commission and any person, other than to Approve or Disapprove a Proposed 5 See Securities Exchange Act Release No. 74534,

those that may be withheld from the Rule Change Amending NYSE Arca 80 FR 15834 (Mar. 25, 2015). The Commission
public in accordance with the Equities Rule 5.2(j)(3), Commentary .02 designated a longer period within which to take
Relating to Listing of Investment action on the proposed rule change and designated
provisions of 5 U.S.C. 552, will be May 5, 2015, as the date by which it should
available for Web site viewing and Company Units Based on Municipal approve, disapprove, or institute proceedings to
printing in the Commission’s Public Bond Indexes determine whether to disapprove the proposed rule
change.
Reference Room, 100 F Street NE., July 30, 2015. 6 15 U.S.C. 78s(b)(2)(B).
Washington, DC 20549 on official On January 16, 2015, NYSE Arca, Inc. 7 See Securities Exchange Act Release No. 74863
business days between the hours of filed with the Securities and Exchange (May 4, 2015), 80 FR 26591 (May 8, 2015) (‘‘Order
10:00 a.m. and 3:00 p.m. Copies of such Commission (‘‘Commission’’), pursuant Instituting Proceedings’’). Specifically, the
filing also will be available for Commission instituted proceedings to allow for
asabaliauskas on DSK5VPTVN1PROD with NOTICES

to Section 19(b)(1) of the Securities additional analysis of the proposed rule change’s
inspection and copying at the principal Exchange Act of 1934 (‘‘Act’’) 1 and Rule consistency with Section 6(b)(5) of the Act, which
offices of the Exchange. All comments 19b–4 thereunder,2 a proposed rule requires, among other things, that the rules of a
received will be posted without change; change to amend NYSE Arca Equities national securities exchange be ‘‘designed to
the Commission does not edit personal prevent fraudulent and manipulative acts and
Rule 5.2(j)(3), Commentary .02 relating practices, to promote just and equitable principles
identifying information from of trade,’’ and ‘‘to protect investors and the public
submissions. You should submit only 18 17 CFR 200.30–3(a)(12), (59). interest.’’ See id.
information that you wish to make 1 15 U.S.C. 78s(b)(1). 8 15 U.S.C. 78s(b)(2).

available publicly. All submissions 2 17 CFR 240.19b–4. 9 See supra note 3.

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Document Created: 2018-02-23 10:53:11
Document Modified: 2018-02-23 10:53:11

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		80 FR 46625