81 FR 75473 - Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Add Commentary .14 to Rule 3317 (Compliance With Regulation NMS Plan To Implement a Tick Size Pilot)
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 210 (October 31, 2016)
Federal Register Volume 81, Issue 210 (October 31, 2016)
| Page Range | 75473-75476 | |
| FR Document | 2016-26139 |
[Federal Register Volume 81, Number 210 (Monday, October 31, 2016)] [Notices] [Pages 75473-75476] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-26139] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-79156; File No. SR-Phlx-2016-106] Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Add Commentary .14 to Rule 3317 (Compliance With Regulation NMS Plan To Implement a Tick Size Pilot) October 25, 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 October 17, 2016, NASDAQ 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. --------------------------------------------------------------------------- \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 add Commentary .14 to Rule 3317 (Compliance with Regulation NMS Plan to Implement a Tick Size Pilot) to provide the SEC with notice of its efforts to re-program its systems to eliminate a re-pricing functionality for certain orders in Test Group Three securities in connection with the Regulation NMS Plan to Implement a Tick Size Pilot Program (``Plan'' or ``Pilot'').\3\ Phlx also [[Page 75474]] proposes to re-number current Commentary .12 relating to the Block Size exception to Commentary .13 as a technical correction. --------------------------------------------------------------------------- \3\ See Securities Exchange Act Release No. 74892 (May 6, 2015), 80 FR 27513 (May 13, 2015) (``Approval Order''). --------------------------------------------------------------------------- The text of the proposed rule change is set forth below. Proposed new language is in italics; deleted text is in brackets. * * * * * NASDAQ PHLX Rules * * * * * 3317. Compliance with Regulation NMS Plan to Implement a Tick Size Pilot (a) through (d) No Change. Commentary: .01-.12 No change. .1[2]3 For purposes of qualifying for the Block Size exception under paragraph (c)(3)(D)(iii) of this Rule, the Order must have a size of 5,000 shares or more and the resulting execution upon entry must have a size of 5,000 shares or more in aggregate. .14 Until October 31, 2016, the treatment of Price to Comply Orders, Price to Display Orders, Non-Displayed Orders, and Post-Only Orders that are entered through the OUCH or FLITE protocols in Test Group Three securities shall be as follows: Following entry, and if market conditions allow, a Price to Comply Order in a Test Group Three Pilot Security will be adjusted repeatedly in accordance with changes to the NBBO until such time as the Price to Comply Order is able to be ranked and displayed at its original entered limit price. Following entry, and if market conditions allow, a Price to Display Order in a Test Group Three Pilot Security will be adjusted repeatedly in accordance with changes to the NBBO until such time as the Price to Display Order is able to be ranked and displayed at its original entered limit price. Following entry, and if market conditions allow, a Non-Displayed Order in a Test Group Three Pilot Security will be adjusted repeatedly in accordance with changes to the NBBO up (down) to the Order's limit price. Following entry, and if market conditions allow, the Post-Only Order in a Test Group Three Pilot Security will be adjusted repeatedly in accordance with changes to the NBBO or the best price on the Exchange Book, as applicable until such time as the Post-Only Order is able to be ranked and displayed at its original entered limit price. * * * * * 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 On September 7, 2016, the Exchange filed with the Securities and Exchange Commission (``SEC'' or ``Commission'') a proposed rule change (``Proposal'') to adopt paragraph (d) and Commentary .12 to Exchange Rule 3317 to describe changes to system functionality necessary to implement the Plan. The Exchange also proposed amendments to Rule 3317(a) and (c) to clarify how the Trade-at exception may be satisfied. The SEC published the Proposal in the Federal Register for notice and comment on September 20, 2016.\4\ Phlx subsequently filed three Partial Amendments to clarify aspects of the Proposal. The Commission approved the Proposal, as amended, on October 7, 2016.\5\ --------------------------------------------------------------------------- \4\ See Securities Exchange Act Release No. 78835 (September 14, 2016), 81 FR 64552 (September 20, 2016) (SR-Phlx-2016-92). \5\ See Securities Exchange Act Release No. 79074 (October 7, 2016) (SR-Phlx-2016-92). --------------------------------------------------------------------------- In SR-Phlx-2016-92, Phlx had initially proposed a re-pricing functionality for Price to Comply Orders, Non-Displayed Orders, and Post-Only Orders entered through the OUCH and FLITE protocols in Group Three securities.\6\ Phlx subsequently determined that it would not offer this re-pricing functionality for Price to Comply Orders, Non- Displayed Orders, and Post-Only Orders entered through the OUCH and FLITE protocols in Group Three securities. As part of Partial Amendment No. 2 to SR-Phlx-2016-92, Phlx proposed to delete the relevant language from Rule 4770 [sic] related to this re-pricing functionality. --------------------------------------------------------------------------- \6\ As originally proposed, Rule 3317(d)(2) stated that Price to Comply Orders in a Test Group Three Pilot Security will be adjusted repeatedly in accordance with changes to the NBBO until such time as the Price to Comply Order is able to be ranked and displayed at its original entered limit price. Rule 3317(d)(3) stated that, if market conditions allow, a Non-Displayed Order in a Test Group Three Pilot Security will be adjusted repeatedly in accordance with changes to the NBBO up (down) to the Order's limit price. Rule 3317(d)(4) stated that, if market conditions allow, the Post-Only Order in a Test Group Three Pilot Security will be adjusted repeatedly in accordance with changes to the NBBO or the best price on the Phlx Book, as applicable until such time as the Post-Only Order is able to be ranked and displayed at its original entered limit price. --------------------------------------------------------------------------- In that amendment, Phlx noted that this change would only impact the treatment of Price to Comply Orders, Non-Displayed Orders, and Post-Only orders that are submitted through the OUCH and FLITE protocols in Test Group Three Pilot Securities, as these types of Orders that are currently submitted to Phlx through the RASH or FIX protocols are already subject to this re-pricing functionality and will remain subject to this functionality under the Pilot. In the Amendment, Phlx further noted that its systems are currently programmed so that Price to Comply Orders, Non-Displayed Orders and Post-Only Orders entered through the OUCH and FLITE protocols in Test Group Three Securities may be adjusted repeatedly to reflect changes to the NBBO and/or the best price on the Phlx book. Phlx stated that it is re-programming its systems to remove this functionality for Price to Comply Orders, Non-Displayed Orders and Post-Only Orders entered through the OUCH and FLITE protocols in Test Group Three Securities.\7\ In the Amendment, Phlx stated that it anticipated that this re- programming shall be completed no later than November 30, 2016. If it appears that this functionality will remain operational by October 17, 2016, Phlx indicated that it would file a proposed rule change with the SEC and will provide notice to market participants sufficiently in advance of that date to provide effective notice. The rule change and the notice to market participants will describe the current operation of the Phlx systems in this regard, and the timing related to the re- programming. --------------------------------------------------------------------------- \7\ BX [sic] has become aware that this re-pricing functionality also applies to Price to Display Orders that are entered through the OUCH and FLITE protocols in Test Group Three Securities, and is including those Orders as part of this proposal accordingly. Price to Display Orders will be treated in the same manner as Price to Comply Orders under the re-pricing functionality. --------------------------------------------------------------------------- At this time, Phlx is still in the process of re-programming its systems to eliminate the re-pricing functionality in Test Group Three securities for Price to Comply Orders, Non-Displayed Orders, and Post- Only Orders that are entered through the OUCH or FLITE protocols. Phlx anticipates that this re-programming shall be complete on or before October 31, 2016. Therefore, the current treatment of Price to Comply Orders, Price to Display Orders, Non-Displayed Orders, and Post-Only Orders that are entered through the OUCH or FLITE protocols in Test Group Three securities shall be as follows: Following entry, and if market conditions allow, a Price to Comply Order in a Test Group Three Pilot Security will be adjusted repeatedly in accordance with changes to the NBBO until such time as the Price to Comply [[Page 75475]] Order is able to be ranked and displayed at its original entered limit price. Following entry, and if market conditions allow, a Price to Display Order in a Test Group Three Pilot Security will be adjusted repeatedly in accordance with changes to the NBBO until such time as the Price to Display Order is able to be ranked and displayed at its original entered limit price. Following entry, and if market conditions allow, a Non-Displayed Order in a Test Group Three Pilot Security will be adjusted repeatedly in accordance with changes to the NBBO up (down) to the Order's limit price. Following entry, and if market conditions allow, a Post-Only Order in a Test Group Three Pilot Security will be adjusted repeatedly in accordance with changes to the NBBO or the best price on the Phlx Book, as applicable until such time as the Post-Only Order is able to be ranked and displayed at its original entered limit price. In addition to this proposal, Phlx will also issue an Equity Trader Alert that describes the current operation of the Phlx systems in this regard, and the timing related to the removal of this re-pricing functionality.\8\ --------------------------------------------------------------------------- \8\ Phlx anticipates providing additional specificity to market participants as to the timing of the new functionality at a later date. --------------------------------------------------------------------------- Phlx also proposes to re-number Commentary .12, which relates to the Block Size exception, to Commentary .13. A previous filing (SR- Phlx-2016-90) added Commentary to Rule 3317 that resulted in Commentary .11, which addresses the effective date of the Rule, being re-numbered as Commentary .12. Phlx therefore proposes to re-number the Commentary .12 that addresses the Block Size exception as Commentary .13. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,\9\ in general, and furthers the objectives of Section 6(b)(5) of the Act,\10\ 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. The purpose of this filing is to inform the SEC and market participants of the status of Phlx's attempts to re-program its systems to remove the re-pricing functionality in Test Group Three securities for Price to Comply Orders, Price to Display Orders, Non-Displayed Orders, and Post-Only Orders that are entered through the OUCH or FLITE protocols, and the current treatment of such orders pending the removal of this functionality. This proposal is consistent with the Act because it provides the SEC and market participants with notice of Phlx's efforts in this regard, and is being submitted in connection with the statements made by Phlx in SR-Phlx-2016-92 in proposing the removal of this functionality. --------------------------------------------------------------------------- \9\ 15 U.S.C. 78f(b). \10\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- Phlx also believes that the proposal is consistent with the Act because the re-pricing functionality will not significantly impact the data gathered pursuant to the Pilot. Phlx notes that this re-pricing functionality only affects Price to Comply Orders, Price to Display Orders, Non-Displayed Orders, and Post-Only Orders that are entered through the OUCH or FLITE protocols for Test Group Three securities until the re-pricing functionality is eliminated, and only becomes relevant when an Order in a Test Group Three security would cross a Protected Quotation of another market center. Phlx has analyzed data relating to the frequency with which Orders in Test Group Three securities are entered with a limit price that would cross a Protected Quotation of another market center, and believes that the re-pricing functionality will be triggered infrequently once Test Group Three becomes operational.\11\ The Exchange also notes that it is diligently working to re-program its systems to remove this re-pricing functionality, and that it anticipates this re-programming to be complete on or before October 31, 2016. --------------------------------------------------------------------------- \11\ For example, on September 23, 2016, 0.3% of orders in Test Group Three securities were entered on the NASDAQ Stock Market LLC at a price that crossed the NBBO. Phlx believes that this number will be even lower starting October 17, 2016, when the $0.05 tick increment for Test Group Three securities is in place. --------------------------------------------------------------------------- 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 purpose of this proposal is to provide the SEC and market participants with notice of Phlx's efforts to remove its re-pricing functionality in Test Group Three securities for Price to Comply Orders, Price to Display Orders, Non- Displayed Orders, and Post-Only Orders that are entered through the OUCH or FLITE protocols, consistent with its statements in SR-Phlx- 2016-92. 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 \12\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\13\ --------------------------------------------------------------------------- \12\ 15 U.S.C. 78s(b)(3)(A)(iii). \13\ 17 CFR 240.19b-4(f)(6). --------------------------------------------------------------------------- A proposed rule change filed under Rule 19b-4(f)(6) normally does not become operative prior to 30 days after the date of filing. Rule 19b-4(f)(6)(iii), however, permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange requests that the Commission waive the 30-day operative delay contained in Rule 19b- 4(f)(6)(iii) so that this proposed change will be in operative as of October 17, 2016, the date that Test Group Three securities begin to be subject to the quoting and trading restrictions of the Plan and, therefore, the relevant language in Rule 3317. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because it will allow the Exchange to implement the proposed rules immediately thereby preventing delays in the implementation of the Plan. The Commission notes that the Pilot started implementation on October 3, 2016, Test Group Three securities were phased into the Pilot starting on October 17, 2016, and waiving the 30-day operative delay would ensure that the rules of the Exchange would be in place during implementation. Therefore, the Commission hereby waives the 30-day operative delay and designates the proposed rule change to be operative upon filing with the Commission.\14\ --------------------------------------------------------------------------- \14\ For purposes only of waiving the operative delay for this proposal, 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 [[Page 75476]] 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-2016-106 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-2016-106. 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-2016-106, and should be submitted on or before November 21, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\15\ --------------------------------------------------------------------------- \15\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Brent J. Fields, Secretary. [FR Doc. 2016-26139 Filed 10-28-16; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 81, No. 210 / Monday, October 31, 2016 / Notices 75473
protocols, consistent with its statements At any time within 60 days of the received will be posted without change;
in SR–NASDAQ–2016–126. filing of the proposed rule change, the the Commission does not edit personal
Commission summarily may identifying information from
C. Self-Regulatory Organization’s
temporarily suspend such rule change if submissions. You should submit only
Statement on Comments on the
it appears to the Commission that such information that you wish to make
Proposed Rule Change Received From
action is: (i) Necessary or appropriate in available publicly. All submissions
Members, Participants, or Others
the public interest; (ii) for the protection should refer to File Number SR–
No written comments were either of investors; or (iii) otherwise in NASDAQ–2016–143, and should be
solicited or received. furtherance of the purposes of the Act. submitted on or before November 21,
III. Date of Effectiveness of the If the Commission takes such action, the 2016.
Proposed Rule Change and Timing for Commission shall institute proceedings For the Commission, by the Division of
Commission Action to determine whether the proposed rule Trading and Markets, pursuant to delegated
should be approved or disapproved. authority.16
Because the foregoing proposed rule Brent J. Fields,
change does not: (i) Significantly affect IV. Solicitation of Comments
Secretary.
the protection of investors or the public Interested persons are invited to
[FR Doc. 2016–26138 Filed 10–28–16; 8:45 am]
interest; (ii) impose any significant submit written data, views, and
arguments concerning the foregoing, BILLING CODE 8011–01–P
burden on competition; and (iii) become
operative for 30 days from the date on including whether the proposed rule
which it was filed, or such shorter time change is consistent with the Act.
SECURITIES AND EXCHANGE
as the Commission may designate, it has Comments may be submitted by any of
COMMISSION
become effective pursuant to Section the following methods:
19(b)(3)(A)(iii) of the Act13 and Electronic Comments
[Release No. 34–79156; File No. SR–Phlx–
subparagraph (f)(6) of Rule 19b–4 2016–106]
thereunder.14 • Use the Commission’s Internet
A proposed rule change filed under comment form (http://www.sec.gov/ Self-Regulatory Organizations;
Rule 19b–4(f)(6) normally does not rules/sro.shtml); or NASDAQ PHLX LLC; Notice of Filing
become operative prior to 30 days after • Send an email to rule-comments@ and Immediate Effectiveness of
the date of filing. Rule 19b–4(f)(6)(iii), sec.gov. Please include File Number SR– Proposed Rule Change to Add
however, permits the Commission to NASDAQ–2016–143 on the subject line. Commentary .14 to Rule 3317
designate a shorter time if such action (Compliance With Regulation NMS
Paper Comments
is consistent with the protection of Plan To Implement a Tick Size Pilot)
• Send paper comments in triplicate
investors and the public interest. The to Secretary, Securities and Exchange October 25, 2016.
Exchange requests that the Commission Commission, 100 F Street NE., Pursuant to Section 19(b)(1) of the
waive the 30-day operative delay Washington, DC 20549–1090. Securities Exchange Act of 1934
contained in Rule 19b–4(f)(6)(iii) so that (‘‘Act’’),1 and Rule 19b–4 thereunder,2
this proposed change will be in All submissions should refer to File
Number SR–NASDAQ–2016–143. This notice is hereby given that on October
operative as of October 17, 2016, the 17, 2016, NASDAQ PHLX LLC (‘‘Phlx’’
date that Test Group Three securities file number should be included on the
subject line if email is used. To help the or ‘‘Exchange’’) filed with the Securities
begin to be subject to the quoting and and Exchange Commission (‘‘SEC’’ or
trading restrictions of the Plan and, Commission process and review your
comments more efficiently, please use ‘‘Commission’’) the proposed rule
therefore, the relevant language in Rule change as described in Items I and II,
4770. only one method. The Commission will
post all comments on the Commission’s below, which Items have been prepared
The Commission believes that by the Exchange. The Commission is
Internet Web site (http://www.sec.gov/
waiving the 30-day operative delay is publishing this notice to solicit
rules/sro.shtml). Copies of the
consistent with the protection of comments on the proposed rule change
submission, all subsequent
investors and the public interest from interested persons.
amendments, all written statements
because it will allow the Exchange to
with respect to the proposed rule I. Self-Regulatory Organization’s
implement the proposed rules
change that are filed with the Statement of the Terms of Substance of
immediately thereby preventing delays
Commission, and all written the Proposed Rule Change
in the implementation of the Plan. The
communications relating to the
Commission notes that the Pilot started The Exchange proposes to add
proposed rule change between the
implementation on October 3, 2016, Commentary .14 to Rule 3317
Commission and any person, other than
Test Group Three securities were (Compliance with Regulation NMS Plan
those that may be withheld from the
phased into the Pilot starting on October to Implement a Tick Size Pilot) to
public in accordance with the
17, 2016, and waiving the 30-day provide the SEC with notice of its efforts
provisions of 5 U.S.C. 552, will be
operative delay would ensure that the to re-program its systems to eliminate a
available for Web site viewing and
rules of the Exchange would be in place re-pricing functionality for certain
printing in the Commission’s Public
during implementation. Therefore, the orders in Test Group Three securities in
Reference Room, 100 F Street NE.,
Commission hereby waives the 30-day connection with the Regulation NMS
Washington, DC 20549, on official
operative delay and designates the Plan to Implement a Tick Size Pilot
sradovich on DSK3GMQ082PROD with NOTICES
business days between the hours of
proposed rule change to be operative Program (‘‘Plan’’ or ‘‘Pilot’’).3 Phlx also
10:00 a.m. and 3:00 p.m. Copies of the
upon filing with the Commission.15
filing also will be available for 16 17 CFR 200.30–3(a)(12).
13 15 U.S.C. 78s(b)(3)(A)(iii). inspection and copying at the principal 1 15 U.S.C. 78s(b)(1).
14 17 CFR 240.19b–4(f)(6). office of the Exchange. All comments 2 17 CFR 240.19b–4.
15 For purposes only of waiving the operative 3 See Securities Exchange Act Release No. 74892
delay for this proposal, the Commission has efficiency, competition, and capital formation. See (May 6, 2015), 80 FR 27513 (May 13, 2015)
considered the proposed rule’s impact on 15 U.S.C. 78c(f). (‘‘Approval Order’’).
VerDate Sep<11>2014 17:53 Oct 28, 2016 Jkt 241001 PO 00000 Frm 00104 Fmt 4703 Sfmt 4703 E:\FR\FM\31OCN1.SGM 31OCN1](https://thefederalregister.org/doc/81_FR_75683/page/1.svg)
![75474 Federal Register / Vol. 81, No. 210 / Monday, October 31, 2016 / Notices
proposes to re-number current A. Self-Regulatory Organization’s types of Orders that are currently
Commentary .12 relating to the Block Statement of the Purpose of, and submitted to Phlx through the RASH or
Size exception to Commentary .13 as a Statutory Basis for, the Proposed Rule FIX protocols are already subject to this
technical correction. Change re-pricing functionality and will remain
The text of the proposed rule change subject to this functionality under the
is set forth below. Proposed new 1. Purpose
Pilot.
language is in italics; deleted text is in On September 7, 2016, the Exchange In the Amendment, Phlx further noted
brackets. filed with the Securities and Exchange that its systems are currently
* * * * * Commission (‘‘SEC’’ or ‘‘Commission’’) programmed so that Price to Comply
a proposed rule change (‘‘Proposal’’) to Orders, Non-Displayed Orders and Post-
NASDAQ PHLX Rules adopt paragraph (d) and Commentary Only Orders entered through the OUCH
* * * * * .12 to Exchange Rule 3317 to describe and FLITE protocols in Test Group
3317. Compliance with Regulation NMS changes to system functionality Three Securities may be adjusted
Plan to Implement a Tick Size Pilot necessary to implement the Plan. The repeatedly to reflect changes to the
(a) through (d) No Change. Exchange also proposed amendments to NBBO and/or the best price on the Phlx
Commentary: .01–.12 No change. Rule 3317(a) and (c) to clarify how the book. Phlx stated that it is re-
.1[2]3 For purposes of qualifying for the Trade-at exception may be satisfied. The
programming its systems to remove this
Block Size exception under paragraph SEC published the Proposal in the
(c)(3)(D)(iii) of this Rule, the Order must have
functionality for Price to Comply
Federal Register for notice and
a size of 5,000 shares or more and the Orders, Non-Displayed Orders and Post-
comment on September 20, 2016.4 Phlx
resulting execution upon entry must have a Only Orders entered through the OUCH
subsequently filed three Partial
size of 5,000 shares or more in aggregate. and FLITE protocols in Test Group
Amendments to clarify aspects of the
.14 Until October 31, 2016, the treatment Three Securities.7 In the Amendment,
of Price to Comply Orders, Price to Display Proposal. The Commission approved the
Phlx stated that it anticipated that this
Orders, Non-Displayed Orders, and Post- Proposal, as amended, on October 7,
re-programming shall be completed no
Only Orders that are entered through the 2016.5
In SR–Phlx–2016–92, Phlx had later than November 30, 2016. If it
OUCH or FLITE protocols in Test Group
Three securities shall be as follows: initially proposed a re-pricing appears that this functionality will
Following entry, and if market conditions functionality for Price to Comply remain operational by October 17, 2016,
allow, a Price to Comply Order in a Test Orders, Non-Displayed Orders, and Phlx indicated that it would file a
Group Three Pilot Security will be adjusted Post-Only Orders entered through the proposed rule change with the SEC and
repeatedly in accordance with changes to the will provide notice to market
NBBO until such time as the Price to Comply OUCH and FLITE protocols in Group
Three securities.6 Phlx subsequently participants sufficiently in advance of
Order is able to be ranked and displayed at that date to provide effective notice. The
its original entered limit price. determined that it would not offer this
Following entry, and if market conditions re-pricing functionality for Price to rule change and the notice to market
allow, a Price to Display Order in a Test Comply Orders, Non-Displayed Orders, participants will describe the current
Group Three Pilot Security will be adjusted and Post-Only Orders entered through operation of the Phlx systems in this
repeatedly in accordance with changes to the the OUCH and FLITE protocols in regard, and the timing related to the re-
NBBO until such time as the Price to Display programming.
Order is able to be ranked and displayed at
Group Three securities. As part of
Partial Amendment No. 2 to SR–Phlx– At this time, Phlx is still in the
its original entered limit price.
Following entry, and if market conditions 2016–92, Phlx proposed to delete the process of re-programming its systems
allow, a Non-Displayed Order in a Test relevant language from Rule 4770 [sic] to eliminate the re-pricing functionality
Group Three Pilot Security will be adjusted related to this re-pricing functionality. in Test Group Three securities for Price
repeatedly in accordance with changes to the In that amendment, Phlx noted that to Comply Orders, Non-Displayed
NBBO up (down) to the Order’s limit price. this change would only impact the Orders, and Post-Only Orders that are
Following entry, and if market conditions treatment of Price to Comply Orders, entered through the OUCH or FLITE
allow, the Post-Only Order in a Test Group protocols. Phlx anticipates that this re-
Three Pilot Security will be adjusted
Non-Displayed Orders, and Post-Only
orders that are submitted through the programming shall be complete on or
repeatedly in accordance with changes to the
NBBO or the best price on the Exchange OUCH and FLITE protocols in Test before October 31, 2016.
Book, as applicable until such time as the Group Three Pilot Securities, as these Therefore, the current treatment of
Post-Only Order is able to be ranked and Price to Comply Orders, Price to Display
displayed at its original entered limit price. 4 See Securities Exchange Act Release No. 78835 Orders, Non-Displayed Orders, and
* * * * * (September 14, 2016), 81 FR 64552 (September 20, Post-Only Orders that are entered
2016) (SR–Phlx–2016–92).
through the OUCH or FLITE protocols
II. Self-Regulatory Organization’s 5 See Securities Exchange Act Release No. 79074
(October 7, 2016) (SR–Phlx–2016–92). in Test Group Three securities shall be
Statement of the Purpose of, and
6 As originally proposed, Rule 3317(d)(2) stated as follows:
Statutory Basis for, the Proposed Rule
Change
that Price to Comply Orders in a Test Group Three Following entry, and if market
Pilot Security will be adjusted repeatedly in conditions allow, a Price to Comply
In its filing with the Commission, the accordance with changes to the NBBO until such
time as the Price to Comply Order is able to be Order in a Test Group Three Pilot
Exchange included statements ranked and displayed at its original entered limit Security will be adjusted repeatedly in
concerning the purpose of and basis for price. Rule 3317(d)(3) stated that, if market accordance with changes to the NBBO
the proposed rule change and discussed conditions allow, a Non-Displayed Order in a Test until such time as the Price to Comply
any comments it received on the Group Three Pilot Security will be adjusted
sradovich on DSK3GMQ082PROD with NOTICES
repeatedly in accordance with changes to the NBBO
proposed rule change. The text of these up (down) to the Order’s limit price. Rule 7 BX [sic] has become aware that this re-pricing
statements may be examined at the 3317(d)(4) stated that, if market conditions allow, functionality also applies to Price to Display Orders
places specified in Item IV below. The the Post-Only Order in a Test Group Three Pilot that are entered through the OUCH and FLITE
Exchange has prepared summaries, set Security will be adjusted repeatedly in accordance protocols in Test Group Three Securities, and is
with changes to the NBBO or the best price on the including those Orders as part of this proposal
forth in sections A, B, and C below, of Phlx Book, as applicable until such time as the accordingly. Price to Display Orders will be treated
the most significant aspects of such Post-Only Order is able to be ranked and displayed in the same manner as Price to Comply Orders
statements. at its original entered limit price. under the re-pricing functionality.
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![75476 Federal Register / Vol. 81, No. 210 / Monday, October 31, 2016 / Notices
Commission summarily may available publicly. All submissions without edit, including any personal
temporarily suspend such rule change if should refer to File Number SR–Phlx– information the commenter provides, to
it appears to the Commission that such 2016–106, and should be submitted on http://www.regulations.gov, as
action is: (i) Necessary or appropriate in or before November 21, 2016. described in the system of records
the public interest; (ii) for the protection For the Commission, by the Division of notice (DOT/ALL–14 FDMS), which can
of investors; or (iii) otherwise in Trading and Markets, pursuant to delegated be reviewed at http://www.dot.gov/
furtherance of the purposes of the Act. authority.15 privacy.
If the Commission takes such action, the Brent J. Fields,
Commission shall institute proceedings Docket: Background documents or
Secretary. comments received may be read at
to determine whether the proposed rule
[FR Doc. 2016–26139 Filed 10–28–16; 8:45 am] http://www.regulations.gov at any time.
should be approved or disapproved.
BILLING CODE 8011–01–P Follow the online instructions for
IV. Solicitation of Comments accessing the docket or go to the Docket
Interested persons are invited to Operations in Room W12–140 of the
submit written data, views, and DEPARTMENT OF TRANSPORTATION West Building Ground Floor at 1200
arguments concerning the foregoing, New Jersey Avenue SE., Washington,
including whether the proposed rule Federal Aviation Administration
DC, between 9 a.m. and 5 p.m., Monday
change is consistent with the Act. [Summary Notice No. 2016–108] through Friday, except Federal holidays.
Comments may be submitted by any of
the following methods: Petition for Exemption; Summary of FOR FURTHER INFORMATION CONTACT:
Petition Received; Douglas Myers Christopher Morris, Office of
Electronic Comments Rulemaking, Federal Aviation
• Use the Commission’s Internet AGENCY: Federal Aviation Administration, 800 Independence Ave.
comment form (http://www.sec.gov/ Administration (FAA), DOT. SW., Washington, DC 20591; (202) 267–
rules/sro.shtml); or ACTION: Notice. 4418; chris.morris@faa.gov.
• Send an email to rule-comments@
sec.gov. Please include File Number SR– SUMMARY: This notice contains a This notice is published pursuant to
Phlx–2016–106 on the subject line. summary of a petition seeking relief 14 CFR 11.85.
from specified requirements of Title 14 Issued in Washington, DC, on October 25,
Paper Comments of the Code of Federal Regulations. The 2016.
• Send paper comments in triplicate to purpose of this notice is to improve the
Dale A. Bouffiou,
Secretary, Securities and Exchange public’s awareness of, and participation
Commission, 100 F Street NE., in, the FAA’s exemption process. Director, Office of Rulemaking.
Washington, DC 20549–1090. Neither publication of this notice nor Petition for Exemption
All submissions should refer to File the inclusion or omission of information
Number SR–Phlx–2016–106. This file in the summary is intended to affect the Docket No.: FAA–2016–8684.
number should be included on the legal status of the petition or its final Petitioner: Douglas Myers.
subject line if email is used. To help the disposition.
Section(s) of 14 CFR Affected:
Commission process and review your DATES: Comments on this petition must § 107.65.
comments more efficiently, please use identify the petition docket number and
only one method. The Commission will must be received on or before November Description of Relief Sought: The
post all comments on the Commission’s 21, 2016. petitioner, a Certificated Flight
Internet Web site (http://www.sec.gov/ ADDRESSES: Send comments identified
Instructor, requests relief from 14 CFR
rules/sro.shtml). Copies of the by docket number FAA–2016–8684: 107.65, which provides that a holder of
submission, all subsequent • Federal eRulemaking Portal: Go to a part 61 pilot certificate (other than
amendments, all written statements http://www.regulations.gov and follow student pilot) may establish
with respect to the proposed rule the online instructions for sending your aeronautical knowledge recency by
change that are filed with the comments electronically. meeting the flight review requirements
Commission, and all written • Mail: Send comments to Docket specified in § 61.56 within the previous
communications relating to the Operations, M–30; U.S. Department of 24 months and completing either an
proposed rule change between the Transportation (DOT), 1200 New Jersey initial or recurrent training course
Commission and any person, other than Avenue SE., Room W12–140, West covering the areas of knowledge
those that may be withheld from the Building Ground Floor, Washington, DC specified in § 107.74(a) or (b) in a
public in accordance with the 20590–0001. manner acceptable to the Administrator.
provisions of 5 U.S.C. 552, will be • Hand Delivery or Courier: Take The petitioner proposes instead that he,
available for Web site viewing and comments to Docket Operations in and others similarly situated, be
printing in the Commission’s Public Room W12–140 of the West Building permitted to establish aeronautical
Reference Room, 100 F Street NE., Ground Floor at 1200 New Jersey knowledge recency by holding an
Washington, DC 20549, on official Avenue SE., Washington, DC, between 9
business days between the hours of unexpired flight instructor certificate
a.m. and 5 p.m., Monday through and completing a flight instructor
10:00 a.m. and 3:00 p.m. Copies of the Friday, except Federal holidays.
refresher course in accordance with 14
filing also will be available for • Fax: Fax comments to Docket
sradovich on DSK3GMQ082PROD with NOTICES
inspection and copying at the principal Operations at 202–493–2251. CFR 61.197(a).
office of the Exchange. All comments Privacy: In accordance with 5 U.S.C. [FR Doc. 2016–26239 Filed 10–28–16; 8:45 am]
received will be posted without change; 553(c), DOT solicits comments from the BILLING CODE 4910–13–P
the Commission does not edit personal public to better inform its rulemaking
identifying information from process. DOT posts these comments,
submissions. You should submit only
information that you wish to make 15 17 CFR 200.30–3(a)(12).
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Document Created: 2018-02-02 12:13:22
Document Modified: 2018-02-02 12:13:22
| 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 75473 |
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