82 FR 13371 - Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Related to Billing Ports and Other Services

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 46 (March 10, 2017)

Page Range		13371-13372
FR Document		2017-04726
Federal Register, Volume 82 Issue 46 (Friday, March 10, 2017)
[Federal Register Volume 82, Number 46 (Friday, March 10, 2017)]
[Notices]
[Pages 13371-13372]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-04726]



[[Page 13371]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80162; File No. SR-Phlx-2017-18]


Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Related to Billing 
Ports and Other Services

March 6, 2017.
    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 February 21, 2017, 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Port Fees in Chapter VII at Part B 
to indicate those fees are not prorated.
    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
    The purpose of the proposed rule change is to include language 
within Chapter VII, entitled ``Other Membership Fees'' at Part B, 
entitled ``Port Fees'' to clarify that the port fees in this section 
are not subject to proration.
    Chapter VII, Part B includes pricing for Order Entry Ports,\3\ 
Active SQF Port Fees,\4\ CTI Ports,\5\ and SQF Purge Ports.\6\ Today, 
the Exchange does not prorate any of these per month port fees. The 
Exchange proposes to add a clarifying sentence to make clear that port 
fees are assessed in full month increments and are not prorated, to 
avoid any confusion.
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    \3\ The Order Entry Port Fee is a connectivity fee in connection 
with routing orders to the Exchange via an external order entry 
port. Phlx members access the Exchange's network through order entry 
ports. A Phlx member may have more than one order entry port.
    \4\ SQF is an interface that allows Specialists, Streaming Quote 
Traders (``SQTs'') and Remote Streaming Quote Traders (``RSQTs'') to 
connect and send quotes and sweeps into Phlx XL. Data includes the 
following: (1) Options Auction Notifications (e.g., opening 
imbalance, market exhaust, Price Improvement XL or PIXL\SM\ 
(``PIXL'') Auction information, or other information); (2) Options 
Symbol Directory Messages; (3) System Event Messages (e.g., start of 
messages, start of system hours, start of quoting, start of 
opening); (4) Complex Order Strategy Auction Notifications (COLA); 
(5) Complex Order Strategy messages; (6) Option Trading Action 
Messages (e.g., halts, resumes); (7) Complex Strategy Trading Action 
Message (e.g., halts, resumes) and (8) Quote Messages (quote/sweep 
messages, risk protection triggers or purge notifications). Active 
SQF ports are ports that receive inbound quotes at any time within 
that month.
    \5\ CTI offers real-time clearing trade updates. A real-time 
clearing trade update is a message that is sent to a member after an 
execution has occurred and contains trade details. The message 
containing the trade details is also simultaneously sent to The 
Options Clearing Corporation. The trade messages are routed to a 
member's connection containing certain information. The 
administrative and market event messages include, but are not 
limited to: System event messages to communicate operational-related 
events; options directory messages to relay basic option symbol and 
contract information for options traded on the Exchange; complex 
strategy messages to relay information for those strategies traded 
on the Exchange; trading action messages to inform market 
participants when a specific option or strategy is halted or 
released for trading on the Exchange; and an indicator which 
distinguishes electronic and non-electronically delivered orders.
    \6\ An Active SQF Purge Port may be configured as a ``Purge-
only'' port of purging option interest from the Exchange's system 
and allowing entry of underlying-level purges for a specified range 
of options and delivery of Purge Notification messages identifying 
the identification of who submitted the purge and the underlying 
symbol.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\7\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\8\ 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, 
by clearly specifying in Chapter VII, Part B that the Exchange's 
pricing regarding ports is not prorated. The Exchange believes that its 
decision to not prorate is consistent with the Act because prorating 
billing results in complexity and increased costs associated with the 
billing process.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. The Exchange will uniformly 
assess the fees in Chapter VII, Part B to all Phlx members and member 
organizations in a uniform manner.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \9\ and Rule 19b-4(f)(6) thereunder.\10\ 
Because the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative for 30 
days from the date on which it was filed, or such shorter time as the 
Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act \11\ and Rule 19b-
4(f)(6) thereunder.\12\
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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \13\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\14\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposed 
rule change may become operative

[[Page 13372]]

immediately. The Exchange requests that the Commission waive the 30-day 
operative delay contained in Rule 19b-4(f)(6)(iii) so that the Exchange 
may implement the change upon filing specifying that the port fees in 
Chapter VII, Part B of the Exchange's Pricing Schedule will not be 
prorated. The Commission believes that adding the sentence to Chapter 
VII, Part B of the Exchange's Pricing Schedule to state that port fees 
are assessed in full-month increments, i.e., they are not prorated, 
will avoid confusion and thus serve to protect investors and the public 
interest. For this reason, the Commission hereby waives the 30-day 
operative delay and designates the proposal operative upon filing.\15\
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    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 17 CFR 240.19b-4(f)(6)(iii).
    \15\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule change should be approved or 
disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-Phlx-2017-18 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-2017-18. 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-2017-18 and 
should be submitted on or before March 31, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
Eduardo A. Aleman,
Assistant Secretary.
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    \16\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2017-04726 Filed 3-9-17; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 82, No. 46 / Friday, March 10, 2017 / Notices 13371

SECURITIES AND EXCHANGE ‘‘Port Fees’’ to clarify that the port fees system, and, in general to protect
COMMISSION in this section are not subject to investors and the public interest, by
proration. clearly specifying in Chapter VII, Part B
[Release No. 34–80162; File No. SR–Phlx– Chapter VII, Part B includes pricing
2017–18]
that the Exchange’s pricing regarding
for Order Entry Ports,3 Active SQF Port ports is not prorated. The Exchange
Self-Regulatory Organizations; Fees,4 CTI Ports,5 and SQF Purge Ports.6 believes that its decision to not prorate
NASDAQ PHLX LLC; Notice of Filing Today, the Exchange does not prorate is consistent with the Act because
and Immediate Effectiveness of any of these per month port fees. The prorating billing results in complexity
Proposed Rule Change Related to Exchange proposes to add a clarifying and increased costs associated with the
Billing Ports and Other Services sentence to make clear that port fees are billing process.
assessed in full month increments and
March 6, 2017. are not prorated, to avoid any confusion. B. Self-Regulatory Organization’s
Pursuant to Section 19(b)(1) of the Statement on Burden on Competition
Securities Exchange Act of 1934 2. Statutory Basis The Exchange does not believe that
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 The Exchange believes that its the proposed rule change will impose
notice is hereby given that on February proposal is consistent with Section 6(b) any burden on competition not
21, 2017, NASDAQ PHLX LLC (‘‘Phlx’’ of the Act,7 in general, and furthers the necessary or appropriate in furtherance
or ‘‘Exchange’’) filed with the Securities objectives of Section 6(b)(5) of the Act,8 of the purposes of the Act. The
and Exchange Commission (‘‘SEC’’ or in particular, in that it is designed to Exchange will uniformly assess the fees
‘‘Commission’’) the proposed rule promote just and equitable principles of in Chapter VII, Part B to all Phlx
change as described in Items I and II, trade, to remove impediments to and members and member organizations in
below, which Items have been prepared perfect the mechanism of a free and a uniform manner.
by the Exchange. The Commission is open market and a national market
C. Self-Regulatory Organization’s
publishing this notice to solicit Statement on Comments on the
comments on the proposed rule change 3 The Order Entry Port Fee is a connectivity fee
Proposed Rule Change Received From
from interested persons. in connection with routing orders to the Exchange
via an external order entry port. Phlx members Members, Participants, or Others
I. Self-Regulatory Organization’s access the Exchange’s network through order entry
ports. A Phlx member may have more than one No written comments were either
Statement of the Terms of Substance of order entry port. solicited or received.
the Proposed Rule Change 4 SQF is an interface that allows Specialists,

Streaming Quote Traders (‘‘SQTs’’) and Remote III. Date of Effectiveness of the
The Exchange proposes to amend Port Proposed Rule Change and Timing for
Streaming Quote Traders (‘‘RSQTs’’) to connect and
Fees in Chapter VII at Part B to indicate send quotes and sweeps into Phlx XL. Data includes Commission Action
those fees are not prorated. the following: (1) Options Auction Notifications
The text of the proposed rule change (e.g., opening imbalance, market exhaust, Price The Exchange has filed the proposed
is available on the Exchange’s Web site Improvement XL or PIXLSM (‘‘PIXL’’) Auction rule change pursuant to Section
at http://nasdaqphlx.cchwallstreet.com/ information, or other information); (2) Options 19(b)(3)(A)(iii) of the Act 9 and Rule
Symbol Directory Messages; (3) System Event 19b–4(f)(6) thereunder.10 Because the
, at the principal office of the Exchange, Messages (e.g., start of messages, start of system
and at the Commission’s Public hours, start of quoting, start of opening); (4) proposed rule change does not: (i)
Reference Room. Complex Order Strategy Auction Notifications Significantly affect the protection of
(COLA); (5) Complex Order Strategy messages; (6) investors or the public interest; (ii)
II. Self-Regulatory Organization’s Option Trading Action Messages (e.g., halts, impose any significant burden on
Statement of the Purpose of, and resumes); (7) Complex Strategy Trading Action
Message (e.g., halts, resumes) and (8) Quote competition; and (iii) become operative
Statutory Basis for, the Proposed Rule Messages (quote/sweep messages, risk protection for 30 days from the date on which it
Change triggers or purge notifications). Active SQF ports are was filed, or such shorter time as the
In its filing with the Commission, the ports that receive inbound quotes at any time Commission may designate, if
within that month.
Exchange included statements 5 CTI offers real-time clearing trade updates. A
consistent with the protection of
concerning the purpose of and basis for real-time clearing trade update is a message that is investors and the public interest, the
the proposed rule change and discussed sent to a member after an execution has occurred proposed rule change has become
any comments it received on the and contains trade details. The message containing effective pursuant to Section 19(b)(3)(A)
the trade details is also simultaneously sent to The of the Act 11 and Rule 19b–4(f)(6)
proposed rule change. The text of these Options Clearing Corporation. The trade messages
statements may be examined at the are routed to a member’s connection containing thereunder.12
places specified in Item IV below. The certain information. The administrative and market A proposed rule change filed under
Exchange has prepared summaries, set event messages include, but are not limited to: Rule 19b–4(f)(6) 13 normally does not
System event messages to communicate become operative prior to 30 days after
forth in sections A, B, and C below, of operational-related events; options directory
the most significant aspects of such messages to relay basic option symbol and contract
the date of the filing. However, pursuant
statements. information for options traded on the Exchange; to Rule 19b–4(f)(6)(iii),14 the
complex strategy messages to relay information for Commission may designate a shorter
A. Self-Regulatory Organization’s those strategies traded on the Exchange; trading time if such action is consistent with the
Statement of the Purpose of, and action messages to inform market participants when protection of investors and the public
Statutory Basis for, the Proposed Rule a specific option or strategy is halted or released for
trading on the Exchange; and an indicator which interest. The Exchange has asked the
Change distinguishes electronic and non-electronically Commission to waive the 30-day
1. Purpose delivered orders. operative delay so that the proposed
sradovich on DSK3GMQ082PROD with NOTICES

6 An Active SQF Purge Port may be configured as
rule change may become operative
The purpose of the proposed rule a ‘‘Purge-only’’ port of purging option interest from
change is to include language within the Exchange’s system and allowing entry of
9 15 U.S.C. 78s(b)(3)(A)(iii).
underlying-level purges for a specified range of
Chapter VII, entitled ‘‘Other options and delivery of Purge Notification messages 10 17 CFR 240.19b–4(f)(6).
Membership Fees’’ at Part B, entitled identifying the identification of who submitted the 11 15 U.S.C. 78s(b)(3)(A).

purge and the underlying symbol. 12 17 CFR 240.19b–4(f)(6).
1 15 U.S.C. 78s(b)(1). 7 15 U.S.C. 78f(b). 13 17 CFR 240.19b–4(f)(6).
2 17 CFR 240.19b–4. 8 15 U.S.C. 78f(b)(5). 14 17 CFR 240.19b–4(f)(6)(iii).

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Document Created: 2018-02-01 14:52:37
Document Modified: 2018-02-01 14:52:37
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		82 FR 13371