81 FR 92916 - Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 3317 (Compliance With Regulation NMS Plan To Implement a Tick Size Pilot)
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 244 (December 20, 2016)
Federal Register Volume 81, Issue 244 (December 20, 2016)
| Page Range | 92916-92919 | |
| FR Document | 2016-30551 |
[Federal Register Volume 81, Number 244 (Tuesday, December 20, 2016)] [Notices] [Pages 92916-92919] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-30551] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-79545; File No. SR-Phlx-2016-118] Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 3317 (Compliance With Regulation NMS Plan To Implement a Tick Size Pilot) December 14, 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 November 30, 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 amend Phlx Rule 3317 to modify the Web site data publication requirements relating to the Regulation NMS Plan to Implement a Tick Size Pilot Program (``Plan'') and to clarify a provision related to the reporting of certain Market Maker profitability data. Phlx also proposes to amend Rule 3317(b)(5) to clarify the timing and format of publication of data related to Market Maker registration. The text of the proposed rule change is available on the Exchange's Web site at http://nasdaqphlx.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 On August 25, 2014, Phlx and several other self-regulatory organizations (the ``Participants'') filed with the Commission, pursuant to Section 11A of the Act \3\ and Rule 608 of Regulation NMS thereunder,\4\ the Plan to Implement a Tick Size Pilot Program.\5\ The Participants filed the Plan to comply with an order issued by the Commission on June 24, 2014.\6\ The Plan was published for comment in the Federal Register on November 7, 2014, and approved by the Commission, as modified, on May 6, 2015.\7\ The Commission approved the Pilot on a two-year basis, with implementation to begin no later than May 6, 2016.\8\ On November 6, 2015, the SEC exempted the Participants from implementing the Pilot until October 3, 2016.\9\ Under the revised Pilot implementation date, the Pre-Pilot data collection period commenced on April 4, 2016. On September 13, 2016, the SEC exempted the Participants from the requirement to fully implement the Pilot on October 3, 2016, to permit the Participants to implement the pilot on a phased-in basis, as described in the Participants' exemptive request.\10\ --------------------------------------------------------------------------- \3\ 15 U.S.C. 78k-1. \4\ 17 CFR 242.608. \5\ See Letter from Brendon J. Weiss, Vice President, Intercontinental Exchange, Inc., to Secretary, Commission, dated August 25, 2014. \6\ See Securities Exchange Act Release No 72460 (June 24, 2014), 79 FR 36840 (June 30, 2014). \7\ See Securities Exchange Act Release No. 74892 (May 6, 2015), 80 FR 27513 (May 13, 2015) (``Approval Order''). \8\ See Approval Order at 27533 and 27545. \9\ See Securities Exchange Act Release No. 76382 (November 6, 2015), 80 FR 70284 (November 13, 2015). \10\ See Letter from David S. Shillman, Associate Director, Division of Trading and Markets, Commission, to Eric Swanson, EVP, General Counsel and Secretary, Bats Global Markets, Inc., dated September 13, 2016; see also Letter from Eric Swanson, EVP, General Counsel and Secretary, Bats Global Markets, Inc., to Brent J. Fields, Secretary, Commission, dated September 9, 2016. --------------------------------------------------------------------------- [[Page 92917]] The Plan is designed to allow the Commission, market participants, and the public to study and assess the impact of increment conventions on the liquidity and trading of the common stock of small- capitalization companies. Each Participant is required to comply, and to enforce compliance by its member organizations, as applicable, with the provisions of the Plan. Phlx adopted rule amendments to implement the requirements of the Plan, including relating to the Plan's data collection requirements and requirements relating to Web site data publication.\11\ Specifically, with respect to the Web site data publication requirements pursuant to Section VII and Appendices B and C to the Plan, Phlx Rule 3317(b)(2)(B) provides, among other things, that Phlx shall make the data required by Items I and II of Appendix B to the Plan, and collected pursuant to paragraph (b)(2) of Rule 3317, publicly available on the Exchange Web site on a monthly basis at no charge and shall not identify the Trading Center that generated the data. Rule 3317(b)(3)(C), provides, among other things, that Phlx shall make the data required by Item IV of Appendix B to the Plan, and collected pursuant to paragraph (b)(3) of Rule 3317, publicly available on the Exchange Web site on a monthly basis at no charge and shall not identify the Trading Center that generated the data. Commentary .08 to Rule 3317 provides, among other things, that the requirement that Phlx make certain data publicly available on the Exchange Web site pursuant to Appendix B and C to the Plan shall commence at the beginning of the Pilot Period. --------------------------------------------------------------------------- \11\ See, e.g., Securities Exchange Act Release No. 77458 (March 28, 2016), 81 FR 18919 (April 1, 2016) (SR-Phlx-2016-39); see also Letter from David S. Shillman, Associate Director, Division of Trading and Markets, Commission, to Marcia E. Asquith, Senior Vice President and Corporate Secretary, FINRA, dated February 17, 2016. --------------------------------------------------------------------------- Phlx is proposing amendments to Rule 3317(b)(2)(B) (regarding Appendix B.I and B.II data) and Rule 3317(b)(3)(C) (regarding Appendix B.IV data) to provide that data required to be made available on Phlx's Web site be published within 120 calendar days following month end. In addition, the proposed amendments to Commentary .08 to Rule 3317 would provide that, notwithstanding the provisions of paragraphs (b)(2)(B), (b)(3)(C), and (b)(5), Phlx shall make data for the Pre-Pilot period publicly available on the Phlx Web site pursuant to Appendix B and C to the Plan by February 28, 2017.\12\ --------------------------------------------------------------------------- \12\ With respect to data for the Pilot Period, the requirement that Phlx make data publicly available on the Phlx Web site pursuant to Appendix B and C to the Plan shall continue to commence at the beginning of the Pilot Period. Thus, the first Web site publication date for Pilot Period data (covering October 2016) would be published on the Phlx Web site by February 28, 2017, which is 120 days following the end of October 2016. --------------------------------------------------------------------------- The purpose of delaying the publication of the Web site data is to address confidentiality concerns by providing for the passage of additional time between the market information reflected in the data and the public availability of such information. Phlx also proposes to amend Rule 3317(b)(4), which relates to the reporting of Market Maker profitability data for members for the Exchange is the Designated Examining Authority (``DEA''). Currently, Rule 3317(b)(4)(A) states that a Member that is a Market Maker shall collect and transmit to their DEA the data described in Item I of Appendix C of the Plan with respect to executions on any Trading Center that have settled or reached settlement date. Information related to Market Maker profitability will be collected by FINRA and transmitted to the SEC and, on an aggregate basis, also be made publicly available.\13\ --------------------------------------------------------------------------- \13\ See FINRA Rule 6191(b)(4)(B). --------------------------------------------------------------------------- The Financial Industry Regulatory Authority, Inc. (``FINRA'') recently submitted a proposed rule change amending FINRA Rule 6191(b), which sets forth FINRA's obligations with respect to data collection and reporting under the Plan. With this rule change, FINRA proposes to publish (1) Market Maker profitability statistics for Market Makers for which FINRA is the DEA; (2) Market Maker profitability statistics collected from other Participants that are DEAs, and (iii) Market Maker profitability statistics for Market Makers whose DEA is not a Participant.\14\ As part of its rule change, FINRA also stated that it would make this data publicly available on the FINRA Web site within 120 calendar days following month end at no charge. In its proposal, FINRA noted that the publication by FINRA of Market Maker profitability data on the FINRA Web site, including Market Makers for which FINRA is not the DEA, is intended to address confidentiality concerns with respect to the Appendix C data required to be made publicly available by the Participants. Although the Participants that are DEAs also would not have identified the Market Makers when publishing required Appendix C data, FINRA noted that some of the Participants are DEAs for a very small number of Market Makers, and the published data from these DEAs raised concerns regarding the potential for identifying the Market Makers that correspond to those statistics.\15\ --------------------------------------------------------------------------- \14\ See SR-FINRA-2016-042. \15\ Id. --------------------------------------------------------------------------- Although the Exchange is currently a DEA for certain member firms, Rule 3317 does not currently require Phlx as DEA to report the information collected pursuant to paragraph (b)(4) to FINRA for publication. Given FINRA's recent proposed rule change, the Exchange is therefore proposing to adopt Rule 3317(b)(4)(C) to address the reporting of Market Maker profitability data for members for which Phlx is the DEA. Rule 3317(b)(4)(C) states that the Exchange, as DEA, shall collect the data required by Item I of Appendix C to the Plan and paragraph (b)(4)(A) for those Members that are Market Makers for which the Exchange is DEA, and on a monthly basis transmit such data, categorized by the Control Group and each Test Group, to the SEC in a pipe delimited format. Rule 3317(b)(4)(C) also provides that the Exchange, as DEA, shall make the data collected pursuant to subparagraph (4) of Rule 3317(b) available to FINRA for aggregation and publication, categorized by the Control Group and each Test Group, on the FINRA Web site pursuant to FINRA Rules. Rule 3317(b)(4)(C) does not alter the information required to be submitted to the SEC. Finally, Phlx proposes to amend Rule 3317(b)(5), which relates to the collection and transmission of Market Maker registration statistics. Currently, Rule 3317(b)(5) provides that the Exchange shall collect and transmit to the SEC the data described in Item III of Appendix B of the Plan relating to daily Market Maker registration statistics in a pipe delimited format within 30 calendar days following month end for (1) transactions in each Pre-Pilot Data Collection Security for the period beginning six months prior to the Pilot Period through the trading day immediately preceding the Pilot Period; and (2) transactions in each Pilot Security for the period beginning on the first day of the Pilot Period through six months after the end of the Pilot Period. Although the Plan requires that such data be made publicly available,\16\ Rule 3317(b)(5) does not currently include a provision requiring the Exchange to publish such data to its Web site. The Exchange therefore proposes to amend Rule 3317(b)(5) to provide that the Exchange shall make Market Maker [[Page 92918]] registration data publicly available on the Exchange Web site within 120 calendar days following month end at no charge. --------------------------------------------------------------------------- \16\ See Section VII.A. 4 of the Plan. --------------------------------------------------------------------------- Phlx has filed the proposed rule change for immediate effectiveness and has requested that the Commission waive the 30-day operative delay. If the Commission waives the 30-day operative delay, the operative date of the proposed rule change will be the date of filing. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,\17\ in general, and furthers the objectives of Section 6(b)(5) of the Act,\18\ 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, because it is designed to assist the Participants in meeting their regulatory obligations pursuant to the Plan and is in furtherance of the objectives of the Plan, as identified by the SEC. --------------------------------------------------------------------------- \17\ 15 U.S.C. 78f(b). \18\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- In approving the Plan, the Commission recognized that requiring the publication of Market Maker data may raise confidentiality concerns, especially for Pilot Securities that may have a relatively small number of designated Market Makers.\19\ For this reason, the Commission modified the Plan so that the data that would be made publicly available would not contain profitability measures for each security, but would be aggregated by the Control Group and each Test Group. Phlx believes that this proposal is consistent with the Act in that it is designed to address confidentiality concerns by permitting Phlx to delay Web site publication to provide for passage of additional time between the market information reflected in the data and the public availability of such information. With respect to the change to Rule 3317(b)(5), the Exchange believes this change will clarify the timing and format of publication of data related to Market Maker registration. --------------------------------------------------------------------------- \19\ See Approval Order at 27543--27544. --------------------------------------------------------------------------- Phlx believes that the addition of Rule 3317(b)(4)(C) relating to the reporting of Market Maker profitability data to FINRA is consistent with the Act because it effectuates FINRA's recent proposal, which itself is designed to further address confidentiality concerns by permitting FINRA to aggregate and publish Market Maker profitability data for all Participant DEAs, including Market Makers for which FINRA is not the DEA.\20\ Phlx notes that this proposal also does not alter the information required to be submitted to the SEC. --------------------------------------------------------------------------- \20\ See SR-FINRA-2016-042. --------------------------------------------------------------------------- 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. Phlx notes that the proposed rule change implements the provisions of the Plan, and is designed to assist the Participants in meeting their regulatory obligations pursuant to the Plan. The proposal is intended to address confidentiality concerns that may adversely impact competition, especially for Pilot Securities that may have a relatively small number of designated Market Makers, by (1) permitting Phlx to delay Web site publication to provide for passage of additional time between the market information reflected in the data and the public availability of such information; and (2) making Market Maker profitability statistics that Phlx has gathered as DEA available to FINRA for aggregation and publication. The proposal also does not alter the information required to be submitted to the SEC. 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.\21\ --------------------------------------------------------------------------- \21\ Phlx notes that Financial Information Forum (FIF) submitted a letter to the staff of the Commission raising concerns regarding the publication of certain Appendix B statistics on a disaggregated basis using a unique masked market participant identifier. See Letter from Mary Lou Von Kaenel, Managing Director, FIF, to David S. Shillman, Associate Director, Division of Trading and Markets, Commission, dated August 16, 2016, available at https://www.fif.com/ comment-letters. --------------------------------------------------------------------------- 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 \22\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\23\ --------------------------------------------------------------------------- \22\ 15 U.S.C. 78s(b)(3)(A)(iii). \23\ 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 the filing. However, pursuant to Rule 19b-4(f)(6)(iii), the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has filed the proposed rule change for immediate effectiveness and has requested that the Commission waive the requirement that the proposed rule change not become operative for 30 days after the date of the filing so that it may become operative immediately. The Exchange notes that the proposed rule change implements the provisions of the Plan, and is designed to assist the Participants in meeting their regulatory obligations pursuant to the Plan. The proposal is intended to address confidentiality concerns by permitting the Exchange to (i) Delay Web site publication to provide for passage of additional time between the market information reflected in the data and the public availability of such information; and (ii) allow for FINRA to aggregate and publish Market Maker profitability data for all Participant DEAs. The Exchange notes that the proposed change will not affect the data reporting requirements for members for which PHLX is the DEA. The proposal also does not alter the information required to be submitted to the Commission. 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 these proposed changes that are intended to address confidentiality concerns. The Commission notes that some Pilot data was scheduled to be published on November 30, 2016. Therefore, the Commission hereby waives the 30-day operative delay and designates the proposed rule change to be operative on November 30, 2016.\24\ --------------------------------------------------------------------------- \24\ 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 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 [[Page 92919]] 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-2016-118 on the subject line. Paper Comments Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-Phlx-2016-118. 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-2016-118 and should be submitted on or before January 10, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\25\ --------------------------------------------------------------------------- \25\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2016-30551 Filed 12-19-16; 8:45 am] BILLING CODE 8011-01-P
![92916 Federal Register / Vol. 81, No. 244 / Tuesday, December 20, 2016 / Notices
granting MIAX PEARL’s request for conditions specified in this order that II. Self-Regulatory Organization’s
exemption, pursuant to Section 36 of MIAX PEARL provide written notice to Statement of the Purpose of, and
the Act, from the rule filing MIAX PEARL members whenever MIAX Statutory Basis for, the Proposed Rule
requirements of Section 19(b) of the Act Exchange, CBOE, NYSE or FINRA Change
with respect to the rules that MIAX proposes to change an incorporated by In its filing with the Commission, the
PEARL proposes to incorporate by reference rule and when the Exchange included statements
reference. The exemption is conditioned Commission approves any such concerning the purpose of and basis for
upon MIAX PEARL providing written changes. the proposed rule change and discussed
notice to MIAX PEARL members By the Commission. any comments it received on the
whenever MIAX Exchange, CBOE, Brent J. Fields, proposed rule change. The text of these
NYSE or FINRA proposes to change an statements may be examined at the
Secretary.
incorporated by reference rule and places specified in Item IV below. The
[FR Doc. 2016–30538 Filed 12–19–16; 8:45 am]
when the Commission approves any Exchange has prepared summaries, set
such changes. The Commission believes BILLING CODE 8011–01–P
forth in sections A, B, and C below, of
that the exemption is appropriate in the the most significant aspects of such
public interest and consistent with the statements.
SECURITIES AND EXCHANGE
protection of investors because it will
COMMISSION A. Self-Regulatory Organization’s
promote more efficient use of
Commission’s and SROs’ resources by [Release No. 34–79545; File No. SR–Phlx– Statement of the Purpose of, and
avoiding duplicative rule filings based 2016–118] Statutory Basis for, the Proposed Rule
on simultaneous changes to identical Change
rule text sought to be implemented by Self-Regulatory Organizations;
NASDAQ PHLX LLC; Notice of Filing 1. Purpose
more than one SRO.
and Immediate Effectiveness of On August 25, 2014, Phlx and several
V. Conclusion Proposed Rule Change To Amend Rule other self-regulatory organizations (the
It is ordered that the application of 3317 (Compliance With Regulation ‘‘Participants’’) filed with the
MIAX PEARL for registration as a NMS Plan To Implement a Tick Size Commission, pursuant to Section 11A of
national securities exchange be, and it Pilot) the Act 3 and Rule 608 of Regulation
hereby is, granted. NMS thereunder,4 the Plan to
December 14, 2016.
It is furthered ordered that operation Implement a Tick Size Pilot Program.5
of MIAX PEARL is conditioned on the Pursuant to Section 19(b)(1) of the The Participants filed the Plan to
satisfaction of the requirements below: Securities Exchange Act of 1934 comply with an order issued by the
A. Participation in National Market (‘‘Act’’),1 and Rule 19b–4 thereunder,2 Commission on June 24, 2014.6 The
System Plans Relating to Options notice is hereby given that on November Plan was published for comment in the
Trading. MIAX PEARL must join: (1) 30, 2016, NASDAQ PHLX LLC (‘‘Phlx’’ Federal Register on November 7, 2014,
The Plan for the Reporting of or ‘‘Exchange’’) filed with the Securities and approved by the Commission, as
Consolidated Options Last Sale Reports and Exchange Commission (‘‘SEC’’ or modified, on May 6, 2015.7 The
and Quotation Information (Options ‘‘Commission’’) the proposed rule Commission approved the Pilot on a
Price Reporting Authority); (2) the change as described in Items I and II two-year basis, with implementation to
OLPP; (3) the Linkage Plan; (4) the Plan below, which Items have been prepared begin no later than May 6, 2016.8 On
of the Options Regulatory Surveillance by the Exchange. The Commission is November 6, 2015, the SEC exempted
Authority; and (5) the Plan Governing publishing this notice to solicit the Participants from implementing the
the Consolidated Audit Trail; comments on the proposed rule change Pilot until October 3, 2016.9 Under the
B. Participation in Multiparty Rule from interested persons. revised Pilot implementation date, the
17d–2 Plans. MIAX PEARL must I. Self-Regulatory Organization’s Pre-Pilot data collection period
become a party to the multiparty Rule Statement of the Terms of Substance of commenced on April 4, 2016. On
17d–2 agreements concerning options the Proposed Rule Change September 13, 2016, the SEC exempted
sales practice regulation and market the Participants from the requirement to
surveillance, and covered Regulation The Exchange proposes to amend
fully implement the Pilot on October 3,
NMS rules; Phlx Rule 3317 to modify the Web site
2016, to permit the Participants to
C. Participation in the Options data publication requirements relating
implement the pilot on a phased-in
Clearing Corporation. MIAX PEARL to the Regulation NMS Plan to
basis, as described in the Participants’
must become an Options Clearing Implement a Tick Size Pilot Program
exemptive request.10
Corporation participant exchange; and (‘‘Plan’’) and to clarify a provision
D. Participation in the Intermarket related to the reporting of certain Market 3 15 U.S.C. 78k–1.
Surveillance Group. MIAX PEARL must Maker profitability data. Phlx also 4 17 CFR 242.608.
join the Intermarket Surveillance Group. proposes to amend Rule 3317(b)(5) to 5 See Letter from Brendon J. Weiss, Vice
It is further ordered, pursuant to clarify the timing and format of President, Intercontinental Exchange, Inc., to
publication of data related to Market Secretary, Commission, dated August 25, 2014.
Section 36 of the Act,242 that MIAX 6 See Securities Exchange Act Release No 72460
PEARL shall be exempted from the rule Maker registration. (June 24, 2014), 79 FR 36840 (June 30, 2014).
filing requirements of Section 19(b) of The text of the proposed rule change 7 See Securities Exchange Act Release No. 74892
mstockstill on DSK3G9T082PROD with NOTICES
the Act with respect to the MIAX is available on the Exchange’s Web site (May 6, 2015), 80 FR 27513 (May 13, 2015)
Exchange, CBOE, NYSE and FINRA at http://nasdaqphlx.cchwallstreet. (‘‘Approval Order’’).
8 See Approval Order at 27533 and 27545.
rules that MIAX PEARL proposes to com/, at the principal office of the
9 See Securities Exchange Act Release No. 76382
incorporate by reference, subject to the Exchange, and at the Commission’s
(November 6, 2015), 80 FR 70284 (November 13,
Public Reference Room. 2015).
Nasdaq Order, supra note 27, and NOM Approval 10 See Letter from David S. Shillman, Associate
Order, supra note 112. 1 15 U.S.C. 78s(b)(1). Director, Division of Trading and Markets,
242 15 U.S.C. 78mm. 2 17 CFR 240.19b–4. Commission, to Eric Swanson, EVP, General
VerDate Sep<11>2014 19:36 Dec 19, 2016 Jkt 241001 PO 00000 Frm 00147 Fmt 4703 Sfmt 4703 E:\FR\FM\20DEN1.SGM 20DEN1](https://thefederalregister.org/doc/81_FR_93160/page/1.svg)
![Federal Register / Vol. 81, No. 244 / Tuesday, December 20, 2016 / Notices 92919
to determine whether the proposed rule For the Commission, by the Division of prepared summaries, set forth in
should be approved or disapproved. Trading and Markets, pursuant to delegated Sections A, B, and C below, of the most
authority.25 significant aspects of such statements.
IV. Solicitation of Comments
Robert W. Errett, A. Self-Regulatory Organization’s
Interested persons are invited to Statement of the Purpose of, and
Deputy Secretary.
submit written data, views, and Statutory Basis for, the Proposed Rule
[FR Doc. 2016–30551 Filed 12–19–16; 8:45 am]
arguments concerning the foregoing, Change
BILLING CODE 8011–01–P
including whether the proposed rule
1. Purpose
change is consistent with the Act.
Comments may be submitted by any of The purpose of the proposed rule
SECURITIES AND EXCHANGE change is to detail how the Solicitation
the following methods: COMMISSION Auction mechanism will treat Complex
Electronic Comments [Release No. 34–79557; File No. SR–BOX– Orders on the Exchange.3 Pursuant to
2016–57] BOX Rule 7270, the Exchange has two
• Use the Commission’s Internet block-sized auction mechanisms, the
comment form (http://www.sec.gov/ Self-Regulatory Organizations; BOX Solicitation Auction Mechanism and the
rules/sro.shtml); or Options Exchange LLC; Notice of Facilitation Auction Mechanism
• Send an email to rule- Filing and Immediate Effectiveness of whereby Order Flow Providers (OFPs)
comments@sec.gov. Please include File a Proposed Rule Change To Detail can provide price improvement
Number SR–Phlx–2016–118 on the How Complex Orders Will Execute opportunities for a transaction where
subject line. Through the Solicitation Auction the OFP seeks to facilitate an order it
Mechanism represents as agent, and/or a transaction
Paper Comments where the OFP solicited interest to
December 14, 2016.
• Send paper comments in triplicate execute against an order it represents as
Pursuant to Section 19(b)(1) of the agent. Transactions executed through
to Brent J. Fields, Secretary, Securities Securities Exchange Act of 1934 (the
and Exchange Commission, 100 F Street the Solicitation or Facilitation auction
‘‘Act’’),1 and Rule 19b–4 thereunder,2 mechanisms are comprised of the order
NE., Washington, DC 20549–1090. notice is hereby given that on December the OFP represents as agent (the
All submissions should refer to File 7, 2016, BOX Options Exchange LLC ‘‘Agency Order’’) and the contra order
Number SR–Phlx–2016–118. This file (the ‘‘Exchange’’) filed with the for the full size of the Agency Order
number should be included on the Securities and Exchange Commission (either the ‘‘Solicitation’’ or ‘‘Solicited’’
subject line if email is used. To help the (‘‘Commission’’) the proposed rule Order).4 The contra order may represent
change as described in Items I and II interest for the Participant’s own
Commission process and review your
below, which Items have been prepared account or interest the Participant has
comments more efficiently, please use
by the Exchange. The Commission is solicited from one or more other parties,
only one method. The Commission will
publishing this notice to solicit or a combination of both.
post all comments on the Commission’s
comments on the proposed rule change This proposal only addresses how the
Internet Web site (http://www.sec.gov/
from interested persons. Solicitation Auction mechanism will
rules/sro.shtml).
I. Self-Regulatory Organization’s treat Complex Orders on the Exchange.5
Copies of the submission, all Similar to the ISE’s Block-Trade rules,6
subsequent amendments, all written Statement of the Terms of Substance of
the Proposed Rule Change Complex Orders 7 executed through the
statements with respect to the proposed Solicitation auction mechanism on BOX
rule change that are filed with the The Exchange proposes to detail how function in substantially the same
Commission, and all written Complex Orders will execute through manner as single-leg orders executed
communications relating to the the Solicitation Auction mechanism. through this mechanism. To detail how
proposed rule change between the The text of the proposed rule change is the Solicitation mechanism treats
Commission and any person, other than available from the principal office of the
those that may be withheld from the Exchange, at the Commission’s Public 3 Complex Orders are not currently traded
public in accordance with the Reference Room and also on the through the Solicitation Auction mechanism. Prior
provisions of 5 U.S.C. 552, will be Exchange’s Internet Web site at http:// to implementation, BOX will issue an informational
circular to inform Participants of the
available for Web site viewing and boxexchange.com. implementation date for Complex Orders to trade
printing in the Commission’s Public II. Self-Regulatory Organization’s through the Solicitation Auction.
Reference Room, 100 F Street NE., Statement of the Purpose of, and
4 The Exchange notes that it does not trade stock
Washington, DC 20549, on official option orders.
Statutory Basis for, the Proposed Rule 5 The Exchange recently adopted rules to allow
business days between the hours of Change Complex Orders to execute through the Facilitation
10:00 a.m. and 3:00 p.m. Copies of the Auction mechanism. See Securities Release No.
filing also will be available for In its filing with the Commission, the 78444 (July 29, 2016), 81 FR 51533 (August 4,
inspection and copying at the principal self-regulatory organization included 2016)(Notice of Filing and Immediate Effectiveness
statements concerning the purpose of, of file Number SR–BOX–2016–37).
office of the Exchange. All comments 6 See International Securities Exchange Rule 716
and basis for, the proposed rule change
received will be posted without change; and Supplementary Material .08 to Rule 716.
and discussed any comments it received
the Commission does not edit personal 7 Under Rule 7240(a)(5) a ‘‘Complex Order’ is
mstockstill on DSK3G9T082PROD with NOTICES
on the proposed rule change. The text
identifying information from defined as ‘‘any order involving the simultaneous
of these statements may be examined at purchase and/or sale of two or more different
submissions. You should submit only
the places specified in Item IV below. options series in the same underlying security, for
information that you wish to make the same account, in a ratio that is equal to or
The self-regulatory organization has
available publicly. All submissions greater than one-to-three (.333) and less than or
should refer to File Number SR–Phlx– equal to three-to-one (3.00) and for the purpose of
25 17 CFR 200.30–3(a)(12). executing a particular investment strategy.) A
2016–118 and should be submitted on 1 15 U.S.C. 78s(b)(1). Complex Order that does not meet this definition
or before January 10, 2017. 2 17 CFR 240.19b–4. will be automatically rejected.
VerDate Sep<11>2014 19:36 Dec 19, 2016 Jkt 241001 PO 00000 Frm 00150 Fmt 4703 Sfmt 4703 E:\FR\FM\20DEN1.SGM 20DEN1](https://thefederalregister.org/doc/81_FR_93160/page/4.svg)
Document Created: 2018-02-14 09:10:21
Document Modified: 2018-02-14 09:10:21
| 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 92916 |
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