81 FR 38246 - Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to a Proposal To Relocate and Update the Existing Provisions of Rule 1080.07 to New Rule 1098

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 113 (June 13, 2016)

[Federal Register Volume 81, Number 113 (Monday, June 13, 2016)]
[Notices]
[Pages 38246-38247]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-13822]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78001; File No. SRndash;Phlxndash;2016-63]


Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change to a Proposal To 
Relocate and Update the Existing Provisions of Rule 1080.07 to New Rule 
1098

June 7, 2016.
    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 May 27, 2016, NASDAQ PHLX LLC (``Exchange'') filed with the 
Securities and Exchange Commission (``SEC'' or ``Commission'') the 
proposed rule change as described in Items I, II, a proposal to 
relocate and update the existing provisions of Rule 1080.07 to new Rule 
1098.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 the 
Substance of the Proposed Rule Change

    The Exchange proposes to a proposal to relocate and update the 
existing provisions of Rule 1080.07 to new Rule 1098.
    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 purpose of the proposal is to move the existing provisions 
regarding complex orders from Rule 1080.07 to new Rule 1098, Complex 
Orders. The Exchange intends to update and reorganize its rule book in 
a number of ways. The Exchange believes that the complex orders 
provisions are easier to read and follow if organized into a separate 
rule. Various references to Rule 1080.07 within Rule 1080 and in Rules 
1047 and 1066 will be changed to refer to Rule 1098.\3\
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    \3\ Previously, Rule 1080.07 was Rule 1080.08. Securities 
Exchange Act Release No. 75436 (July 13, 2015), 80 FR 42566 (July 
17, 2015) (SR-Phlx-2015-55). Two incorrect references to Rule 
1080.08 remain in Rule 1080.07(e)(i)(B)(1) and (e)(vi)(B), which is 
now being changed to refer to Rule 1098.
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    In addition, the Exchange proposes to make a few minor changes. 
First, the Exchange proposes to replace incorrect references in 
subparagraph (a)(i) of Rule 1080.07 to Nasdaq Options Services LLC and 
its abbreviation NOS with Nasdaq Execution Services, LLC and NES. The 
Exchange now uses NES for this purpose.\4\ This will be reflected in 
new Rule 1098(a)(i).
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    \4\ The Exchange replaced references to NOS with NES throughout 
its rule book but this particular reference was inadvertently 
omitted. Securities Exchange Act Release No. 71417 (January 28, 
2014), 79 FR 6253 (February 3, 2014) (SR-Phlx-2014-04).
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    Second, the Exchange proposes to amend subparagraph (c)(ii)(E) to 
replace the reference to the risk monitor mechanism with ``automatic 
removal of quotes'' and to delete the reference to Rule 1093, which was 
previously deleted and replaced with Rule 1095.\5\
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    \5\ Rule 1095 now covers various risk tools, including the risk 
monitor mechanism (which is now known as the Percentage-Based 
Threshold), the Volume-Based Threshold and the Multi-Trigger 
Threshold. Securities Exchange Act Release No. 76295 (October 29, 
2015), 80 FR 68338 (November 4, 2015) (SR-Phlx-2015-83).
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    Third, the Exchange proposes to refer to the ``System'' in new Rule 
1098 rather than Phlx XL or Phlx XL II to parallel the rules of its 
affiliated options exchanges \6\ and move away from that specific 
system name in the rules.\7\ As a result, the terms ``Phlx XL 
participant'' will now be referred to as ``participant'' and ``Phlx XL 
market maker'' will now be referred to as a ``Phlx electronic market 
maker.''
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    \6\ See e.g., NOM Chapter VI, Section 1(a) defining ``System'' 
in general terms.
    \7\ Separately, the Exchange intends to make this change 
throughout the rules.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \8\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \9\ in particular, in that it is designed to promote 
just and equitable principles of trade and to protect investors and the 
public interest, by rendering the complex orders provision easier to 
read. The proposed relocation and other changes are minor and 
administrative.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
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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 makes minor 
organizational corrections and 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

    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 \10\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\11\
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    \10\ 15 U.S.C. 78s(b)(3)(a)(iii).
    \11\ 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: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) otherwise in

[[Page 38247]]

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-2016-63 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-2016-63. 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 office 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-2016-63, and should be 
submitted on or before July 5, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-13822 Filed 6-10-16; 8:45 am]
 BILLING CODE 8011-01-P