81 FR 42024 - Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Risk Monitor Mechanism
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 124 (June 28, 2016)
Federal Register Volume 81, Issue 124 (June 28, 2016)
| Page Range | 42024-42027 | |
| FR Document | 2016-15177 |
[Federal Register Volume 81, Number 124 (Tuesday, June 28, 2016)] [Notices] [Pages 42024-42027] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-15177] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-78129; File No. SR-Phlx-2016-67] Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Risk Monitor Mechanism June 22, 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 June 9, 2016, NASDAQ PHLX LLC (``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. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to proposal to amend Rule 1095, entitled ``Automated Removal of Quotes.'' 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 the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend Rule 1095, entitled ``Automated Removal of Quotes'' to modify the minimum Specified Percentage (as described below) determined by a Market Maker \3\ to enable a Market [[Page 42025]] Maker to enhance their risk management for an underlying security as market conditions warrant, based on their own risk tolerance level and quoting behavior. The manner in which Rule 1095 operates is not being amended in this rule change. The Exchange proposes to permit the Market Maker to set the Specified Percentage more broadly, at not less than 1% with this rule change. The Exchange also proposes to memorialize the definition of disseminated size in the rule text. --------------------------------------------------------------------------- \3\ Market Makers include Specialists and Registered Options Traders or ``ROTs.'' An ROT is defined in Exchange Rule 1014(b) as a is a regular member or a foreign currency options participant of the Exchange located on the trading floor who has received permission from the Exchange to trade in options for his own account. A ROT includes Streaming Quote Traders or ``SQTs'' and Remote Streaming Quote Traders or ``RSQTs'' as well as on and off-floor ROTS. An SQT is defined in Exchange Rule 1014(b)(ii)(A) as an ROT who has received permission from the Exchange to generate and submit option quotations electronically in options to which such SQT is assigned. An RSQT is defined in Exchange Rule in 1014(b)(ii)(B) as an ROT that is a member affiliated with an RSQTO with no physical trading floor presence who has received permission from the Exchange to generate and submit option quotations electronically in options to which such RSQT has been assigned. A Remote Streaming Quote Trader Organization or ``RSQTO,'' which may also be referred to as a Remote Market Making Organization (``RMO''), is a member organization in good standing that satisfies the RSQTO readiness requirements in Rule 507(a). RSQTs may also be referred to as Remote Market Markers (``RMMs''). --------------------------------------------------------------------------- Background Today, Rule 1095 permits Market Makers to monitor risk arising from multiple executions across multiple options series of a single underlying security. A Market Maker may provide a specified time period and a specified percentage by which the Exchange's Phlx XL System (``System'') will automatically remove a Market Maker's quotes in all series of an underlying security submitted through designated Phlx protocols, as specified by the Exchange, during a specified time period not to exceed 15 seconds (``Percentage-Based Specified Time Period'').\4\ --------------------------------------------------------------------------- \4\ A specified time period commences for an option when a transaction occurs in any series in such option. --------------------------------------------------------------------------- For each series in an option, the System determines: (i) The percentage that the number of contracts executed in that series represents relative to the Market Maker's disseminated \5\ size of each side in that series (``Series Percentage''); and (ii) the sum of the Series Percentage in the option issue (``Issue Percentage''). The System tracks and calculates the net impact of positions in the same option issue during the Percentage-Based Specified Time Period. The System tracks transactions, i.e., the sum of buy-side put percentages, the sum of sell-side put percentages, the sum of buy-side call percentages, and the sum of sell-side call percentages, and then calculates the absolute value of the difference between the buy-side puts and the sell-side puts plus the absolute value of the difference between the buy-side calls and the sell-side calls. If the Issue Percentage, rounded to the nearest integer, equals or exceeds a percentage established by the Market Maker, not less than 100% (``Specified Percentage''), the System automatically removes a Market Maker's quotes in all series of an underlying security submitted through designated Phlx protocols, as specified by the Exchange, during the Percentage-Based Specified Time. The Exchange counts Specialized Quote Feed (``SQF'') \6\ quotes only in determining the number of contracts traded and removed by the System. --------------------------------------------------------------------------- \5\ The disseminated size is the original size quoted by the Market Maker. \6\ SQF permits the receipt of quotes. SQF Auction Responses and market sweeps are also not included. --------------------------------------------------------------------------- The Percentage-Based Specified Time Period commences for an option every time an execution occurs in any series in such option and continues until the System removes quotes as described in current Rule 1095(iv) or (v) or the Percentage-Based Time Period expires. The Percentage-Based Specified Time Period operates on a rolling basis among all series in an option in that there may be multiple Percentage- Based Specified Time Periods occurring simultaneously and such Percentage-Based Specified Time periods may overlap. Proposal The Exchange proposes to lower the Specified Percentage from 100% to 1%. The proposal would provide that if the Issue Percentage, rounded to the nearest integer, equals or exceeds a percentage established by the Market Maker, not less than 1% (``Specified Percentage''), the System automatically removes a Market Maker's quotes in all series of an underlying security submitted through designated Phlx protocols, as specified by the Exchange, during the Percentage-Based Specified Time. This proposal would allow a Market Maker to establish a Specified Percentage at any percentage level no less than 1% for an option in which the Market Maker is appointed. Today, the Specified Percentage would be set at greater than or equal to 100%. This amendment will allow Market Makers to better manage their risk and assist them to avoid trading a number of contracts that exceeds the Marker Maker's risk tolerance level across multiple series of a single underlying when such series are executed in rapid succession. Market Makers will be able to more precisely customize their risk management within the System, taking into account such factors as present and anticipated market conditions, news in an option sudden change in volatility of an option without any limitation regarding the Specified Percentage. Market Makers will be able to adopt more precise controls based on the Market Maker's risk tolerance level. Market Makers must utilize either the Percentage-Based \7\ or Volume-Based risk controls. Market Makers must contact Market Operations to set their percentage and specified time period. --------------------------------------------------------------------------- \7\ Market Makers selecting the Percentage-Based risk control in Rule 1095(i) are required to provide a specified time period, up to 15 seconds, and a specified percentage with a number of 1% or greater, as proposed herein, to the Market Operations staff to select this risk control. If a Market Maker does not desire to utilize the Percentage-Based risk control the Market Maker must utilize the Volume-Based risk control. Market Makers must set-up their risk control settings initially, when they become a Phlx Market Maker, and then subsequent changes by contacting Market Operations. --------------------------------------------------------------------------- By way of example, if a Market Maker has a rapid fire percentage setting of 50% and a Specified Time Period of 15 seconds and the Order Book reflects: MM1 has a displayed quote of 1.10 (100) x 1.20 (100) for IBM May 20, 2016 70 puts and MM1 is the only displayed size on Phlx and an order is submitted to buy 75 IBM May 20, 2016 70 Puts for 1.20 Rule 1095 would: (1) Provide MM1 with an execution--Sld 75 @ 1.20; and (2) Trigger the Percentage-Based Threshold and remove MM1's quotes in IBM. Another example is with multiple executions. Presume MM1 has a rapid fire percentage setting of 80% by 5 seconds and MM1 has a displayed quote of 2.00 (100) x 2.25 (100) for IBM May 20, 2016 70 puts and he is the only displayed size on the Phlx. Also, presume an order comes in to buy 50 IBM May 20, 2016 70 puts for 2.25. The following executions would result: MM1 receives an execution Sold 50 @2.25 MM1 quote updates to 2.00 (100) x 2.25 (50) Within 1 second an order comes in to buy 45 IBM May 20, 2016 70 puts for 2.25 MM1 receives an execution Sold 45 @2.25 MM1 receives rapid fire for IBM The Exchange also proposes to memorialize the definition of disseminated size, which is the original size quoted by the Market Maker, within Rule 1095. 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, 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. --------------------------------------------------------------------------- \8\ 15 U.S.C. 78f(b). \9\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- Market Makers are obligated to submit continuous two-sided quotations in a [[Page 42026]] certain number of series in their appointed option classes for a certain percentage of each trading session,\10\ rendering them vulnerable to risk from unusual market condition, volatility in specific options, and other market events that may cause them to receive multiple, extremely rapid automatic executions before they can adjust their quotations and overall risk exposure in the market. Without adequate risk management tools in place on the Exchange, the incentive for Market Makers to quote aggressively, respecting both price and size could be diminished. Such a result may undermine the quality of the markets, which are enhanced by the depth and liquidity such Market Makers provide in the marketplace. --------------------------------------------------------------------------- \10\ See Rule 1014 titled ``Obligations and Restrictions Applicable to Specialists and Registered Options Traders.'' --------------------------------------------------------------------------- By allowing the percentage to be reduced from 100% to 1%, the Exchange provides its Market Makers the desired flexibility to take into account such factors as present and anticipated market conditions, news in an option or sudden change in volatility of an option without any limitation regarding the Specified Percentage. This should encourage Market Makers to provide additional depth and liquidity to the Exchange's markets, thereby removing impediments to and perfecting the mechanisms of a free and open market and a national market system and, in general, protecting investors and the public interest. The proposal is consistent with the Act because the reduction of the Specified Percentage to not less than 1% provides more alternatives to Market Makers in setting their percentage without impacting their firm quote obligations. The System operates consistently with the firm quote obligations of a broker-dealer pursuant to Rule 602 of Regulation NMS. Specifically, with respect to Market Makers, their obligation to provide continuous two-sided quotes on a daily basis is not diminished by the removal of such quotes by the Percentage-Based Threshold. Market Makers are required to provide continuous two-sided quotes on a daily basis.\11\ Market Makers that utilize the Percentage-Based Threshold will not be relieved of the obligation to provide continuous two-sided quotes on a daily basis, nor will it prohibit the Exchange from taking disciplinary action against a Market Maker for failing to meet the continuous quoting obligation each trading day. All quotes entered into the System are considered firm. Quotes will only be removed from the System once the Percentage-Based Threshold has been met if the quote was not otherwise executed by an incoming order. --------------------------------------------------------------------------- \11\ Id. --------------------------------------------------------------------------- This risk feature will continue to remove impediments to and perfect the mechanism of a free and open market and a national market system and protect investors and the public interest by allowing Market Makers to remove their quotes in the event that market conditions warrant, based on their own risk tolerance level. Market Makers provide liquidity to the market place and have obligations unlike other market participants.\12\ This risk feature is important because it will enable Market Makers to manage their exposure at the Exchange. Further, permitting a broader setting would continue to allow Market Makers to have flexibility in setting their risk exposure to prevent unintended triggers of the Percentage-Based Threshold and it continues to allow Market Makers to set a Specified Time Period. Each Market Maker has different levels of sensitivity and their own system safeguards as well. The proposed setting would permit each Market Maker to select a setting that is appropriate to capture the needs of that Market Maker. --------------------------------------------------------------------------- \12\ Id. --------------------------------------------------------------------------- Further, it is important to note that any interest that is executable against a Market Maker's quotes that is received \13\ by the Exchange prior to the trigger of the Percentage-Based Threshold, which is processed by the System, automatically executes at the price up to the Market Maker's size. Further, the Purge Notification Message is accepted by the System in the order of receipt in the queue and is processed in that order so that interest that is already accepted into the System is processed prior to the message. --------------------------------------------------------------------------- \13\ The time of receipt for an order or quote is the time such message is processed by the Exchange book. --------------------------------------------------------------------------- The Exchange notes that Miami International Securities Exchange, LLC (``MIAX'') implemented a rule which changed its Allowable Engagement Percentage from 100% to any percentage established by the Market Maker.\14\ The Phlx rule is similar to MIAX in that a member is required to have a setting, although MIAX has a default setting in place in the instance that no percentage is provided. Market Makers that select the Percentage-Based risk tool must provide the Exchange with a specified time period and a percentage greater than or equal to 1%. --------------------------------------------------------------------------- \14\ See Securities Exchange Act Release No. 77817 (May 12, 2016), 81 FR 31286 (May 18, 2016) (SR-MIAX-2016-10). --------------------------------------------------------------------------- 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 Percentage-Based Threshold is meant to protect Market Makers from inadvertent exposure to excessive risk. This proposal will foster competition by providing Exchange Market Makers with the ability to enhance and customize their percentage in order to compete for executions and order flow. Specifically, the proposal does not impose a burden on intra-market or inter-market competition, rather, it provides Market Makers with the opportunity to avail themselves of similar risk tools which are currently available on other exchanges.\15\ Market Makers quote across many series in an option creating the possibility of ``rapid fire'' executions that can create large, unintended principal positions that expose Market Makers. The Percentage-Based Threshold permits Market Makers to monitor risk arising from multiple executions across multiple options series of a single underlying security. --------------------------------------------------------------------------- \15\ See Section 8 of the 19b-4. --------------------------------------------------------------------------- The Exchange is proposing this rule change to continue to permit Market Makers to reduce their risk in the event the Market Maker is suffering from a system issue or due to the occurrence of unusual or unexpected market activity. Reducing such risk will enable Market Makers to enter quotations without any fear of inadvertent exposure to excessive risk, which in turn will benefit investors through increased liquidity for the execution of their orders. Reducing risk by utilizing the proposed risk protections enables Market Makers, specifically, to enter quotations with larger size, which in turn will benefit investors through increased liquidity for the execution of their orders. Such increased liquidity benefits investors because they receive better prices and because it lowers volatility in the options market. 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. [[Page 42027]] 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 \16\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\17\ The Exchange has requested that the Commission waive the thirty-day operative delay so that the proposal may become operative immediately. The Commission believes that waiving the thirty-day operative delay is consistent with the protection of investors and the public interest. The Exchange proposes to change a setting in an existing risk protection feature to enhance market makers' ability to protect against excessive risk arising from multiple executions across multiple options series of a single underlying security. The Commission notes that another options exchange currently has a similar setting for a like risk protection feature for market makers. Therefore, the Commission hereby waives the thirty-day operative delay and designates the proposal effective upon filing.\18\ --------------------------------------------------------------------------- \16\ 15 U.S.C. 78s(b)(3)(a)(iii). \17\ 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. \18\ For purposes 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). --------------------------------------------------------------------------- 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 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 CommentsUse 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-2016-67 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-2016-67. 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 the 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-2016-67, and should be submitted on or before July 19, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\19\ --------------------------------------------------------------------------- \19\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Brent J. Fields, Secretary. [FR Doc. 2016-15177 Filed 6-27-16; 8:45 am] BILLING CODE 8011-01-P
![42024 Federal Register / Vol. 81, No. 124 / Tuesday, June 28, 2016 / Notices
of the purposes of the Act. The All submissions should refer to File (‘‘Exchange’’) filed with the Securities
Exchange operates in a highly Number SR–CHX–2016–10. This file and Exchange Commission (‘‘SEC’’ or
competitive market in which market number should be included on the ‘‘Commission’’) the proposed rule
participants can readily direct order subject line if email is used. To help the change as described in Items I and II
flow to competing venues if they deem Commission process and review your below, which Items have been prepared
fee levels set by the Exchange to be comments more efficiently, please use by the Exchange. The Commission is
excessive. The Exchange believes that only one method. The Commission will publishing this notice to solicit
the proposed rule change will further post all comments on the Commission’s comments on the proposed rule change
encourage market participants to submit Internet Web site (http://www.sec.gov/ from interested persons.
orders to the Exchange through rules/sro.shtml). Copies of the
Institutional Brokers, which will submission, all subsequent I. Self-Regulatory Organization’s
enhance competition in the national amendments, all written statements Statement of the Terms of Substance of
market system. with respect to the proposed rule the Proposed Rule Change
change that are filed with the The Exchange proposes to proposal to
C. Self-Regulatory Organization’s
Commission, and all written amend Rule 1095, entitled ‘‘Automated
Statement on Comments Regarding the
communications relating to the Removal of Quotes.’’
Proposed Rule Changes Received From The text of the proposed rule change
proposed rule change between the
Members, Participants or Others is available on the Exchange’s Web site
Commission and any person, other than
No written comments were either those that may be withheld from the at http://
solicited or received. public in accordance with the nasdaqomxphlx.cchwallstreet.com/, at
III. Date of Effectiveness of the provisions of 5 U.S.C. 552, will be the principal office of the Exchange, and
Proposed Rule Changes and Timing for available for Web site viewing and at the Commission’s Public Reference
Commission Action printing in the Commission’s Public Room.
Reference Room, 100 F Street NE.,
The foregoing rule change is effective II. Self-Regulatory Organization’s
Washington, DC 20549, on official
upon filing pursuant to Section Statement of the Purpose of, and
business days between the hours of
19(b)(3)(A)(ii) of the Act 12 and Statutory Basis for, the Proposed Rule
10:00 a.m. and 3:00 p.m. Copies of such
subparagraph(f)(2) of Rule 19b–4 Change
filing will also be available for
thereunder 13 because it establishes or inspection and copying at the principal In its filing with the Commission, the
changes a due, fee or other charge office of the Exchange. All comments Exchange included statements
imposed by the Exchange. received will be posted without change; concerning the purpose of and basis for
At any time within 60 days of the the Commission does not edit personal the proposed rule change and discussed
filing of the proposed rule change, the identifying information from any comments it received on the
Commission summarily may submissions. You should submit only proposed rule change. The text of these
temporarily suspend such rule change if information that you wish to make statements may be examined at the
it appears to the Commission that such available publicly. All submissions places specified in Item IV below. The
action is necessary or appropriate in the should refer to File Number SR–CHX– Exchange has prepared summaries, set
public interest, for the protection of 2016–10 and should be submitted on or forth in sections A, B, and C below, of
investors, or otherwise in furtherance of before July 19, 2016. the most significant aspects of such
the purposes of the Act. If the statements.
Commission takes such action, the For the Commission, by the Division of
Commission shall institute proceedings Trading and Markets, pursuant to delegated A. Self-Regulatory Organization’s
authority.14
to determine whether the proposed rule Statement of the Purpose of, and the
Brent J. Fields, Statutory Basis for, the Proposed Rule
should be approved or disapproved.
Secretary. Change
IV. Solicitation of Comments [FR Doc. 2016–15176 Filed 6–27–16; 8:45 am]
Interested persons are invited to BILLING CODE 8011–01–P
1. Purpose
submit written data, views, and The Exchange proposes to amend
arguments concerning the foregoing, Rule 1095, entitled ‘‘Automated
including whether the proposed rule SECURITIES AND EXCHANGE Removal of Quotes’’ to modify the
change is consistent with the Act. COMMISSION minimum Specified Percentage (as
Comments may be submitted by any of [Release No. 34–78129; File No. SR–Phlx– described below) determined by a
the following methods: 2016–67] Market Maker 3 to enable a Market
Electronic Comments
Self-Regulatory Organizations; 3 Market Makers include Specialists and
• Use the Commission’s Internet NASDAQ PHLX LLC; Notice of Filing Registered Options Traders or ‘‘ROTs.’’ An ROT is
comment form (http://www.sec.gov/ defined in Exchange Rule 1014(b) as a is a regular
and Immediate Effectiveness of member or a foreign currency options participant of
rules/sro.shtml); or Proposed Rule Change Relating to the the Exchange located on the trading floor who has
• Send an email to rule-comments@ Risk Monitor Mechanism received permission from the Exchange to trade in
sec.gov. Please include File Number SR– options for his own account. A ROT includes
CHX–2016–10 on the subject line. June 22, 2016. Streaming Quote Traders or ‘‘SQTs’’ and Remote
asabaliauskas on DSK3SPTVN1PROD with NOTICES
Pursuant to Section 19(b)(1) of the Streaming Quote Traders or ‘‘RSQTs’’ as well as on
Paper Comments Securities Exchange Act of 1934
and off-floor ROTS. An SQT is defined in Exchange
Rule 1014(b)(ii)(A) as an ROT who has received
• Send paper comments in triplicate (‘‘Act’’),1 and Rule 19b–4 thereunder,2 permission from the Exchange to generate and
to Secretary, Securities and Exchange notice is hereby given that on June 9, submit option quotations electronically in options
Commission, 100 F Street NE., 2016, NASDAQ PHLX LLC to which such SQT is assigned. An RSQT is defined
in Exchange Rule in 1014(b)(ii)(B) as an ROT that
Washington, DC 20549–1090. is a member affiliated with an RSQTO with no
14 17 CFR 200.30–3(a)(12). physical trading floor presence who has received
12 15 U.S.C. 78s(b)(3)(A)(ii). 1 15 U.S.C. 78s(b)(1). permission from the Exchange to generate and
13 17 CFR 240.19b–4(f)(2). 2 17 CFR 240.19b–4. submit option quotations electronically in options
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![Federal Register / Vol. 81, No. 124 / Tuesday, June 28, 2016 / Notices 42027
III. Date of Effectiveness of the Comments may be submitted by any of SECURITIES AND EXCHANGE
Proposed Rule Change and Timing for the following methods: COMMISSION
Commission Action
Electronic Comments [Release No. 34–78121; File No. SR-
Because the foregoing proposed rule BatsEDGA–2016–12]
change does not: (i) Significantly affect • Use the Commission’s Internet
the protection of investors or the public comment form (http://www.sec.gov/ Self-Regulatory Organizations; Bats
interest; (ii) impose any significant rules/sro.shtml); or EDGA Exchange, Inc.; Notice of Filing
burden on competition; and (iii) become and Immediate Effectiveness of a
• Send an email to rule-comments@ Proposed Rule Change Related to Fees
operative for 30 days from the date on sec.gov. Please include File Number SR–
which it was filed, or such shorter time Phlx–2016–67 on the subject line. June 22, 2016.
as the Commission may designate, it has Pursuant to Section 19(b)(1) of the
become effective pursuant to Section Paper Comments Securities Exchange Act of 1934 (the
19(b)(3)(A)(iii) of the Act 16 and ‘‘Act’’),1 and Rule 19b–4 thereunder,2
subparagraph (f)(6) of Rule 19b–4 • Send paper comments in triplicate
to Secretary, Securities and Exchange notice is hereby given that on June 8,
thereunder.17 The Exchange has 2016, Bats EDGA Exchange, Inc. (the
requested that the Commission waive Commission, 100 F Street NE.,
‘‘Exchange’’ or ‘‘EDGA’’) filed with the
the thirty-day operative delay so that the Washington, DC 20549–1090.
Securities and Exchange Commission
proposal may become operative All submissions should refer to File (‘‘Commission’’) the proposed rule
immediately. The Commission believes Number SR–Phlx–2016–67. This file change as described in Items I, II and III
that waiving the thirty-day operative number should be included on the below, which Items have been prepared
delay is consistent with the protection by the Exchange. The Exchange has
subject line if email is used. To help the
of investors and the public interest. The designated the proposed rule change as
Commission process and review your
Exchange proposes to change a setting one establishing or changing a member
in an existing risk protection feature to comments more efficiently, please use
only one method. The Commission will due, fee, or other charge imposed by the
enhance market makers’ ability to Exchange under Section 19(b)(3)(A)(ii)
protect against excessive risk arising post all comments on the Commission’s
Internet Web site (http://www.sec.gov/ of the Act 3 and Rule 19b–4(f)(2)
from multiple executions across thereunder,4 which renders the
multiple options series of a single rules/sro.shtml). Copies of the
submission, all subsequent proposed rule change effective upon
underlying security. The Commission filing with the Commission. The
notes that another options exchange amendments, all written statements
Commission is publishing this notice to
currently has a similar setting for a like with respect to the proposed rule
solicit comments on the proposed rule
risk protection feature for market change that are filed with the change from interested persons.
makers. Therefore, the Commission Commission, and all written
hereby waives the thirty-day operative communications relating to the I. Self-Regulatory Organization’s
delay and designates the proposal proposed rule change between the Statement of the Terms of Substance of
effective upon filing.18 Commission and any person, other than the Proposed Rule Change
At any time within 60 days of the those that may be withheld from the The Exchange filed a proposal to
filing of the proposed rule change, the public in accordance with the amend the fee schedule applicable to
Commission summarily may provisions of 5 U.S.C. 552, will be Members 5 and non-members of the
temporarily suspend such rule change if available for Web site viewing and Exchange pursuant to EDGA Rules
it appears to the Commission that such printing in the Commission’s Public 15.1(a) and (c) (‘‘Fee Schedule’’) to: (i)
action is: (i) Necessary or appropriate in Reference Room, 100 F Street NE., Add fee codes NA and NB; (ii) add new
the public interest; (ii) for the protection Washington, DC 20549, on official Volume Tier 3; and (iii) delete the
of investors; or (iii) otherwise in business days between the hours of MidPoint Discretionary Order Add
furtherance of the purposes of the Act. 10:00 a.m. and 3:00 p.m. Copies of the Volume Tier.
If the Commission takes such action, the filing also will be available for The text of the proposed rule change
Commission shall institute proceedings inspection and copying at the principal is available at the Exchange’s Web site
to determine whether the proposed rule at www.batstrading.com, at the
office of the Exchange. All comments
should be approved or disapproved. principal office of the Exchange, and at
received will be posted without change;
the Commission’s Public Reference
IV. Solicitation of Comments the Commission does not edit personal
Room.
Interested persons are invited to identifying information from
submit written data, views, and submissions. You should submit only II. Self-Regulatory Organization’s
arguments concerning the foregoing, information that you wish to make Statement of the Purpose of, and
including whether the proposed rule available publicly. All submissions Statutory Basis for, the Proposed Rule
change is consistent with the Act. should refer to File Number SR–Phlx– Change
2016–67, and should be submitted on or In its filing with the Commission, the
16 15 U.S.C. 78s(b)(3)(a)(iii). before July 19, 2016. Exchange included statements
17 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– For the Commission, by the Division of concerning the purpose of and basis for
4(f)(6) requires a self-regulatory organization to give the proposed rule change and discussed
asabaliauskas on DSK3SPTVN1PROD with NOTICES
Trading and Markets, pursuant to delegated
the Commission written notice of its intent to file
the proposed rule change at least five business days authority.19
1 15 U.S.C. 78s(b)(1).
prior to the date of filing of the proposed rule Brent J. Fields, 2 17 CFR 240.19b–4.
change, or such shorter time as designated by the
Commission. The Exchange has satisfied this Secretary. 3 15 U.S.C. 78s(b)(3)(A)(ii).
requirement. [FR Doc. 2016–15177 Filed 6–27–16; 8:45 am] 4 17 CFR 240.19b–4(f)(2).
18 For purposes of waiving the 30-day operative 5 The term ‘‘Member’’ is defined as ‘‘any
BILLING CODE 8011–01–P
delay, the Commission has considered the proposed registered broker or dealer that has been admitted
rule’s impact on efficiency, competition, and capital to membership in the Exchange.’’ See Exchange
formation. See 15 U.S.C. 78c(f). 19 17 CFR 200.30–3(a)(12). Rule 1.5(n).
VerDate Sep<11>2014 17:49 Jun 27, 2016 Jkt 238001 PO 00000 Frm 00100 Fmt 4703 Sfmt 4703 E:\FR\FM\28JNN1.SGM 28JNN1](https://thefederalregister.org/doc/81_FR_42148/page/4.svg)
Document Created: 2016-06-28 00:53:25
Document Modified: 2016-06-28 00:53:25
| 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 | 81 FR 42024 |
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