82_FR_60701 82 FR 60458 - Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Specialist Obligations

82 FR 60458 - Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Specialist Obligations

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 243 (December 20, 2017)

Page Range60458-60460
FR Document2017-27343

Federal Register, Volume 82 Issue 243 (Wednesday, December 20, 2017) 
[Federal Register Volume 82, Number 243 (Wednesday, December 20, 2017)]
[Notices]
[Pages 60458-60460]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-27343]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82322; File No. SR-Phlx-2017-101]


Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Relating to 
Specialist Obligations

December 14, 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 November 29, 2017, Nasdaq PHLX LLC (``Phlx'' or ``Exchange'') filed 
with the Securities and Exchange Commission (``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 Rule 1017, entitled ``Openings in 
Options,'' to specify the obligations of a Specialist when entering 
Valid Width Quotes \3\ during the Opening Process.
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    \3\ A Valid Width Quote is a two-sided electronic quotation 
submitted by a Phlx Electronic Market Maker that consists of a bid/
ask differential that is compliant with Rule 1014(c)(i)(A)(1)(a). 
See Rule 1017(a)(ix).
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    The text of the proposed rule change is available on the Exchange's 
website 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 Exchange is proposing to amend Rule 1017, Openings in Options, 
to amend the obligations of a Specialist when entering Valid Width 
Quotes during the Opening Process. In addition, the Exchange proposes 
to make clear the obligations of a Specialist and a Phlx Electronic 
Market Maker once an options series has opened.
    Currently, Rule 1017(d)(i) provides, the Opening Process for an 
option series will be conducted pursuant to paragraphs (f)-(k) of Phlx 
Rule 1017 below on or after 9:30 a.m. if: The ABBO, if any, is not 
crossed; and the system has received, within two minutes (or such 
shorter time as determined by the Exchange and disseminated to 
membership on the Exchange's website) of the opening trade or quote on 
the market for the underlying security in the case of equity options 
or, in the case of index options, within two minutes of the receipt of 
the opening price in the underlying index (or such shorter time as 
determined by the Exchange and disseminated to membership on the 
Exchange's website), or within two minutes of market opening for the 
underlying currency in the case of U.S. dollar-settled FCO (or such 
shorter time as determined by the Exchange and disseminated to 
membership on the Exchange's website) any of the following: (A) The 
Specialist's Valid Width Quote; (B) the Valid Width Quotes of at least 
two Phlx Electronic Market Makers other than the Specialist; or (C) if 
neither the Specialist's Valid Width Quote nor the Valid Width Quotes 
of two Phlx Electronic Market Makers have been submitted within such 
timeframe, one Phlx Electronic Market Maker has submitted a Valid Width 
Quote.
    Thereafter, Rule 1017(d)(iii) specifies that the Specialist 
assigned in a particular equity or index option must enter a Valid 
Width Quote, in 90% of their assigned series, not later than one minute 
following the dissemination of a quote or trade by the market for the 
underlying security or, in the case of index options, following the 
receipt of the opening price in the underlying index. The Specialist 
assigned in a particular U.S. dollar-settled FCO must enter a Valid 
Width Quote, in 90% of their assigned series, not later than 30 seconds 
after the announced market opening. The Specialist must promptly enter 
a Valid Width Quote in the remainder of their assigned series, which 
did not open within one minute following the dissemination of a quote 
or trade by the market for the underlying security or, in the case of 
index options, following the receipt of the opening price in the 
underlying index or, with respect to a U.S. dollar-settled FCO, 
following the announced market opening.
    The Exchange proposes to make clear that a Specialist has the 
obligations specified in Phlx Rule 1017(d)(iii) to promptly enter a 
Valid Width Quote in the remainder of their assigned series in cases 
where the Specialist's assigned series was not already opened by a Phlx 
Electronic Market Maker as permitted by Rule 1017(d)(i) as noted 
herein. The Specialist would continue to have the ultimate obligation 
to open each assigned series, however this rule change would not 
require the Specialist to enter a Valid Width Quote for the 10% of 
their assigned series, not later than one minute following the 
dissemination of a quote or trade by the market for the underlying 
security or, in the case of index options, following the receipt of the 
opening price in the underlying index during the Opening Process if a 
Phlx Electronic Market Maker entered an order pursuant to Rule 
1017(d)(i)(B) and (C) within the timeframe specified for the Specialist 
to enter a Valid Width Quote as noted in Rule 1017(d)(iii). Also, the 
Specialist assigned in a particular U.S. dollar-settled FCO must enter 
a Valid Width Quote for 10% of their assigned series, not later than 3 
[sic] seconds after the announced market opening during the Opening 
Process if a Phlx Electronic Market Makers entered [sic] an order 
pursuant to Rule 1017(d)(i)(B) and (C)

[[Page 60459]]

within the timeframe specified for the Specialist to enter a Valid 
Width Quote as noted in Rule 1017(d)(iii).
    Today Phlx Rule 1017 requires a Specialist to open the market and 
provides an alternative mechanism to permit an alternative opening by a 
Phlx Electronic Market Maker.\4\ The proposal seeks to make clear the 
obligations of the Specialist with respect to options series that were 
open by a Phlx Electronic Market Maker as well as the quoting 
obligations of a Phlx Electronic Market Maker that opened the options 
series. The Exchange also proposes to amend Rule 1017(d)(iii) [sic] to 
state that a Phlx Electronic Market Maker that submits a quote during 
the opening in any option series pursuant to Rule 1017(d)(i)(B) and (C) 
must submit continuous, two-sided quotes in such options series 
pursuant to Rule 1014(b)(ii)(D)(1) once an option series has opened. 
Specifically, the Exchange proposes to add rule text to Rule 
1017(d)(iii) to provide that ``once an options series has opened 
pursuant to Rule 1017(d)(i)(A)-(C), a Specialist must submit 
continuous, two-sided quotes in such options series pursuant to Rule 
1014(b)(ii)(D)(2).
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    \4\ See Phlx Rule 1017(d)(i)(A)-(C).
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    Further, the Exchange proposes to add rule text to Rule 1017(d)(iv) 
to states that ``A Phlx Electronic Market Maker other than a Specialist 
that submits a quote pursuant to Rule 1017 in any option series when 
the Specialist's quote has not been submitted shall be required, once 
an options series has opened, to submit continuous, two-sided quotes in 
such option series pursuant to Rule 1014(b)(ii)(D)(1).''
    The Exchange proposes to make clear that a Specialist has an 
obligation to enter Valid Width Quotes during the Opening Process 
within the timeframes specified in Rule 1017(d)(iii). In the event that 
an options series opened pursuant to 1017(d)(i)(B) and (C), a 
Specialist would be required to submit continuous, two-sided quotes in 
such options series pursuant to Rule 1014(b)(ii)(D)(2). Also, in this 
instance, a Phlx Electronic Market would be required to submit 
continuous, two-sided quotes in such option series pursuant to Rule 
1014(b)(ii)(D)(1). The purpose of this new rule text is to make clear 
the quoting obligations for both Specialists and Phlx Electronic 
Markets during the opening and the manner in which Rule 1701, relating 
to the Opening Process, and Rule 1014, relating to market maker quoting 
obligations, interact with each other.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\5\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\6\ 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 
amending Phlx Rule 1017(d)(iii) to further specify that a Specialist's 
obligation during the Opening Process and once an option series has 
opened as well as the obligations of a Phlx Electronic Market to the 
extent that an option series opened pursuant to 1017(d)(i)(B) or (C). 
The Exchange believes that this proposal is consistent with the Act 
because a Specialist continues to be responsible to enter Valid Width 
Quotes during the Opening Process and thereafter submit continuous, 
two-sided quotes in such options series pursuant to 1014(b)(ii)(D)(2). 
In the event that an options series opened pursuant to Rule 
1017(d)(i)(B) or (C), the Phlx Electronic Market Maker must submit 
continuous, two-sided quotes in such option series, once the options 
series has opened, pursuant to Rule 1014(b)(ii)(D)(1). The Exchange 
believes that this proposed rule change will make clear the obligations 
of the Specialist with respect to submitting Valid Width Quotes and 
thereafter, once an options series has opened, submitting continuous 
two-sided quotes, when a Phlx Electronic Market Maker may have already 
entered a quote to open an options series. The Exchange's proposal to 
add rule text to clearly specify the quoting obligations of a 
Specialist and a Phlx Electronic Market Maker during the Opening 
Process and once an option series has opened will provide greater 
clarity to the Opening Process and also to the interplay between 
quoting obligations during the Opening Process and intra-day quoting 
obligations noted within Rule 1014.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 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. Once an options series has 
opened, [sic] a Specialist continues to be responsible to enter Valid 
Width Quotes during the Opening Process and thereafter submit 
continuous, two-sided quotes in such options series pursuant to 
1014(b)(ii)(D)(2). Also, if an options series opened pursuant to Rule 
1017(d)(i)(B) or (C), a Phlx Electronic Market Maker shall be required 
to submit continuous, two-sided quotes in such option series, once an 
option series has opened pursuant to 1014(b)(ii)(D)(1). This proposed 
rule text makes clear that Phlx Electronic Market Makers are required 
to submit continuous, two-sided quotes in such option series pursuant 
to 1014(b)(ii)(D)(1), in the event an options series opened pursuant to 
Rule 1017(d)(i)(B) or (C). The proposal provides greater clarity to the 
Opening Process and also to the interplay between quoting obligations 
during the Opening Process and intra-day quoting obligations noted 
within Rule 1014.

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 \7\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\8\
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    \7\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \8\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    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. 
However, Rule 19b-4(f)(6)(iii) \9\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. In its filing with the Commission, 
the Exchange requests that the Commission waive the 30-day operative 
delay. The Exchange represents that the proposed rule change would 
clarify the quoting obligations for both Specialists and Phlx

[[Page 60460]]

Electronic Market Makers during the Opening Process and the manner in 
which Rule 1701, relating to the Opening Process, and Rule 1014, 
relating to market maker quoting obligations, interact with each other. 
According to the Exchange, these obligations should be immediately 
clarified to prevent confusion and uncertainty for market makers 
quoting on the Exchange. For the reasons articulated by the Exchange, 
the Commission believes that waiver of the 30-day operative delay is 
consistent with the protection of investors and the public interest. 
Therefore, the Commission designates the proposed rule change to be 
operative upon filing.\10\
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    \9\ 17 CFR 240.19b-4(f)(6)(iii).
    \10\ For purposes only of waiving the 30-day operative delay, 
the Commission also 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 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-2017-101 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-2017-101. 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 website (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 website 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. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-Phlx-2017-101 and should be submitted on 
or before January 10, 2018.
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    \11\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-27343 Filed 12-19-17; 8:45 am]
 BILLING CODE 8011-01-P

60458 Federal Register / Vol. 82, No. 243 / Wednesday, December 20, 2017 / Notices Washington, DC 20549, on official http://nasdaqphlx.cchwallstreet.com/, Specialist; or (C) if neither the business days between the hours of at the principal office of the Exchange, Specialist’s Valid Width Quote nor the 10:00 a.m. and 3:00 p.m. Copies of the and at the Commission’s Public Valid Width Quotes of two Phlx filing also will be available for Reference Room. Electronic Market Makers have been inspection and copying at the principal submitted within such timeframe, one II. Self-Regulatory Organization’s office of the Exchange. All comments Phlx Electronic Market Maker has Statement of the Purpose of, and received will be posted without change. submitted a Valid Width Quote. Statutory Basis for, the Proposed Rule Thereafter, Rule 1017(d)(iii) specifies Persons submitting comments are Change cautioned that we do not redact or edit that the Specialist assigned in a personal identifying information from In its filing with the Commission, the particular equity or index option must comment submissions. You should Exchange included statements enter a Valid Width Quote, in 90% of submit only information that you wish concerning the purpose of and basis for their assigned series, not later than one to make available publicly. All the proposed rule change and discussed minute following the dissemination of a submissions should refer to File any comments it received on the quote or trade by the market for the Number SR–ISE–2017–103 and should proposed rule change. The text of these underlying security or, in the case of be submitted on or before January 10, statements may be examined at the index options, following the receipt of 2018. places specified in Item IV below. The the opening price in the underlying Exchange has prepared summaries, set index. The Specialist assigned in a For the Commission, by the Division of forth in sections A, B, and C below, of Trading and Markets, pursuant to delegated particular U.S. dollar-settled FCO must authority.23 the most significant aspects of such enter a Valid Width Quote, in 90% of statements. their assigned series, not later than 30 Eduardo A. Aleman, A. Self-Regulatory Organization’s seconds after the announced market Assistant Secretary. Statement of the Purpose of, and opening. The Specialist must promptly [FR Doc. 2017–27340 Filed 12–19–17; 8:45 am] enter a Valid Width Quote in the Statutory Basis for, the Proposed Rule BILLING CODE 8011–01–P Change remainder of their assigned series, which did not open within one minute 1. Purpose following the dissemination of a quote SECURITIES AND EXCHANGE or trade by the market for the COMMISSION The Exchange is proposing to amend Rule 1017, Openings in Options, to underlying security or, in the case of [Release No. 34–82322; File No. SR–Phlx– amend the obligations of a Specialist index options, following the receipt of 2017–101] when entering Valid Width Quotes the opening price in the underlying during the Opening Process. In addition, index or, with respect to a U.S. dollar- Self-Regulatory Organizations; Nasdaq the Exchange proposes to make clear the settled FCO, following the announced PHLX LLC; Notice of Filing and obligations of a Specialist and a Phlx market opening. Immediate Effectiveness of Proposed Electronic Market Maker once an The Exchange proposes to make clear Rule Change Relating to Specialist options series has opened. that a Specialist has the obligations Obligations Currently, Rule 1017(d)(i) provides, specified in Phlx Rule 1017(d)(iii) to the Opening Process for an option series promptly enter a Valid Width Quote in December 14, 2017. will be conducted pursuant to the remainder of their assigned series in Pursuant to Section 19(b)(1) of the cases where the Specialist’s assigned Securities Exchange Act of 1934 paragraphs (f)–(k) of Phlx Rule 1017 below on or after 9:30 a.m. if: The series was not already opened by a Phlx (‘‘Act’’),1 and Rule 19b–4 thereunder,2 Electronic Market Maker as permitted notice is hereby given that on November ABBO, if any, is not crossed; and the system has received, within two by Rule 1017(d)(i) as noted herein. The 29, 2017, Nasdaq PHLX LLC (‘‘Phlx’’ or Specialist would continue to have the ‘‘Exchange’’) filed with the Securities minutes (or such shorter time as determined by the Exchange and ultimate obligation to open each and Exchange Commission assigned series, however this rule (‘‘Commission’’) the proposed rule disseminated to membership on the Exchange’s website) of the opening change would not require the Specialist change as described in Items I and II to enter a Valid Width Quote for the below, which Items have been prepared trade or quote on the market for the underlying security in the case of equity 10% of their assigned series, not later by the Exchange. The Commission is than one minute following the publishing this notice to solicit options or, in the case of index options, within two minutes of the receipt of the dissemination of a quote or trade by the comments on the proposed rule change market for the underlying security or, in from interested persons. opening price in the underlying index (or such shorter time as determined by the case of index options, following the I. Self-Regulatory Organization’s the Exchange and disseminated to receipt of the opening price in the Statement of the Terms of Substance of membership on the Exchange’s website), underlying index during the Opening the Proposed Rule Change or within two minutes of market Process if a Phlx Electronic Market opening for the underlying currency in Maker entered an order pursuant to Rule The Exchange proposes to amend 1017(d)(i)(B) and (C) within the Rule 1017, entitled ‘‘Openings in the case of U.S. dollar-settled FCO (or such shorter time as determined by the timeframe specified for the Specialist to Options,’’ to specify the obligations of a enter a Valid Width Quote as noted in Specialist when entering Valid Width Exchange and disseminated to membership on the Exchange’s website) Rule 1017(d)(iii). Also, the Specialist Quotes 3 during the Opening Process. sradovich on DSK3GMQ082PROD with NOTICES any of the following: (A) The assigned in a particular U.S. dollar- The text of the proposed rule change settled FCO must enter a Valid Width is available on the Exchange’s website at Specialist’s Valid Width Quote; (B) the Valid Width Quotes of at least two Phlx Quote for 10% of their assigned series, 23 17 Electronic Market Makers other than the not later than 3 [sic] seconds after the CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). announced market opening during the 2 17 CFR 240.19b–4. Maker that consists of a bid/ask differential that is Opening Process if a Phlx Electronic 3 A Valid Width Quote is a two-sided electronic compliant with Rule 1014(c)(i)(A)(1)(a). See Rule Market Makers entered [sic] an order quotation submitted by a Phlx Electronic Market 1017(a)(ix). pursuant to Rule 1017(d)(i)(B) and (C) VerDate Sep<11>2014 21:36 Dec 19, 2017 Jkt 244001 PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 E:\FR\FM\20DEN1.SGM 20DEN1

Federal Register / Vol. 82, No. 243 / Wednesday, December 20, 2017 / Notices 60459 within the timeframe specified for the 2. Statutory Basis Opening Process and thereafter submit Specialist to enter a Valid Width Quote The Exchange believes that its continuous, two-sided quotes in such as noted in Rule 1017(d)(iii). proposal is consistent with Section 6(b) options series pursuant to Today Phlx Rule 1017 requires a of the Act,5 in general, and furthers the 1014(b)(ii)(D)(2). Also, if an options Specialist to open the market and objectives of Section 6(b)(5) of the Act,6 series opened pursuant to Rule provides an alternative mechanism to 1017(d)(i)(B) or (C), a Phlx Electronic in particular, in that it is designed to permit an alternative opening by a Phlx Market Maker shall be required to promote just and equitable principles of submit continuous, two-sided quotes in Electronic Market Maker.4 The proposal trade, to remove impediments to and such option series, once an option series seeks to make clear the obligations of perfect the mechanism of a free and has opened pursuant to the Specialist with respect to options open market and a national market 1014(b)(ii)(D)(1). This proposed rule text series that were open by a Phlx system, and, in general to protect makes clear that Phlx Electronic Market Electronic Market Maker as well as the investors and the public interest by Makers are required to submit quoting obligations of a Phlx Electronic amending Phlx Rule 1017(d)(iii) to continuous, two-sided quotes in such Market Maker that opened the options further specify that a Specialist’s option series pursuant to series. The Exchange also proposes to obligation during the Opening Process 1014(b)(ii)(D)(1), in the event an options amend Rule 1017(d)(iii) [sic] to state and once an option series has opened as series opened pursuant to Rule that a Phlx Electronic Market Maker that well as the obligations of a Phlx 1017(d)(i)(B) or (C). The proposal submits a quote during the opening in Electronic Market to the extent that an provides greater clarity to the Opening any option series pursuant to Rule option series opened pursuant to Process and also to the interplay 1017(d)(i)(B) and (C) must submit 1017(d)(i)(B) or (C). The Exchange between quoting obligations during the continuous, two-sided quotes in such believes that this proposal is consistent Opening Process and intra-day quoting options series pursuant to Rule with the Act because a Specialist obligations noted within Rule 1014. 1014(b)(ii)(D)(1) once an option series continues to be responsible to enter has opened. Specifically, the Exchange Valid Width Quotes during the Opening C. Self-Regulatory Organization’s proposes to add rule text to Rule Process and thereafter submit Statement on Comments on the 1017(d)(iii) to provide that ‘‘once an continuous, two-sided quotes in such Proposed Rule Change Received From options series has opened pursuant to options series pursuant to Members, Participants, or Others Rule 1017(d)(i)(A)–(C), a Specialist must 1014(b)(ii)(D)(2). In the event that an No written comments were either submit continuous, two-sided quotes in options series opened pursuant to Rule solicited or received. such options series pursuant to Rule 1017(d)(i)(B) or (C), the Phlx Electronic 1014(b)(ii)(D)(2). Market Maker must submit continuous, III. Date of Effectiveness of the two-sided quotes in such option series, Proposed Rule Change and Timing for Further, the Exchange proposes to add Commission Action rule text to Rule 1017(d)(iv) to states once the options series has opened, pursuant to Rule 1014(b)(ii)(D)(1). The Because the foregoing proposed rule that ‘‘A Phlx Electronic Market Maker Exchange believes that this proposed change does not: (i) Significantly affect other than a Specialist that submits a rule change will make clear the the protection of investors or the public quote pursuant to Rule 1017 in any obligations of the Specialist with respect interest; (ii) impose any significant option series when the Specialist’s to submitting Valid Width Quotes and burden on competition; and (iii) become quote has not been submitted shall be thereafter, once an options series has operative for 30 days from the date on required, once an options series has opened, submitting continuous two- which it was filed, or such shorter time opened, to submit continuous, two- sided quotes, when a Phlx Electronic as the Commission may designate, it has sided quotes in such option series Market Maker may have already entered become effective pursuant to Section pursuant to Rule 1014(b)(ii)(D)(1).’’ 19(b)(3)(A)(iii) of the Act 7 and a quote to open an options series. The The Exchange proposes to make clear Exchange’s proposal to add rule text to subparagraph (f)(6) of Rule 19b–4 that a Specialist has an obligation to clearly specify the quoting obligations of thereunder.8 enter Valid Width Quotes during the a Specialist and a Phlx Electronic A proposed rule change filed under Opening Process within the timeframes Market Maker during the Opening Rule 19b–4(f)(6) normally does not specified in Rule 1017(d)(iii). In the Process and once an option series has become operative prior to 30 days after event that an options series opened opened will provide greater clarity to the date of filing. However, Rule 19b– pursuant to 1017(d)(i)(B) and (C), a the Opening Process and also to the 4(f)(6)(iii) 9 permits the Commission to Specialist would be required to submit interplay between quoting obligations designate a shorter time if such action continuous, two-sided quotes in such during the Opening Process and intra- is consistent with the protection of options series pursuant to Rule day quoting obligations noted within investors and the public interest. In its 1014(b)(ii)(D)(2). Also, in this instance, Rule 1014. filing with the Commission, the a Phlx Electronic Market would be Exchange requests that the Commission required to submit continuous, two- B. Self-Regulatory Organization’s waive the 30-day operative delay. The sided quotes in such option series Statement on Burden on Competition Exchange represents that the proposed pursuant to Rule 1014(b)(ii)(D)(1). The The Exchange does not believe that rule change would clarify the quoting purpose of this new rule text is to make the proposed rule change will impose obligations for both Specialists and Phlx clear the quoting obligations for both any burden on competition not 7 15 U.S.C. 78s(b)(3)(A)(iii). Specialists and Phlx Electronic Markets sradovich on DSK3GMQ082PROD with NOTICES necessary or appropriate in furtherance 8 17 during the opening and the manner in CFR 240.19b–4(f)(6). In addition, Rule 19b– of the purposes of the Act. Once an 4(f)(6) requires a self-regulatory organization to give which Rule 1701, relating to the options series has opened, [sic] a the Commission written notice of its intent to file Opening Process, and Rule 1014, Specialist continues to be responsible to the proposed rule change at least five business days relating to market maker quoting prior to the date of filing of the proposed rule enter Valid Width Quotes during the change, or such shorter time as designated by the obligations, interact with each other. Commission. The Exchange has satisfied this 5 15 U.S.C. 78f(b). requirement. 4 See Phlx Rule 1017(d)(i)(A)–(C). 6 15 U.S.C. 78f(b)(5). 9 17 CFR 240.19b–4(f)(6)(iii). VerDate Sep<11>2014 21:36 Dec 19, 2017 Jkt 244001 PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 E:\FR\FM\20DEN1.SGM 20DEN1

60460 Federal Register / Vol. 82, No. 243 / Wednesday, December 20, 2017 / Notices Electronic Market Makers during the rules/sro.shtml). Copies of the comments on the proposed rule change Opening Process and the manner in submission, all subsequent from interested persons. which Rule 1701, relating to the amendments, all written statements I. Self-Regulatory Organization’s Opening Process, and Rule 1014, with respect to the proposed rule Statement of the Terms of Substance of relating to market maker quoting change that are filed with the Commission, and all written the Proposed Rule Change obligations, interact with each other. According to the Exchange, these communications relating to the The Exchange proposes to amend obligations should be immediately proposed rule change between the Rule 701, entitled ‘‘Openings,’’ to clarified to prevent confusion and Commission and any person, other than specify the obligations of a Primary uncertainty for market makers quoting those that may be withheld from the Market Maker (‘‘PMM’’) when entering on the Exchange. For the reasons public in accordance with the Valid Width Quotes 3 during the articulated by the Exchange, the provisions of 5 U.S.C. 552, will be Opening Process. Commission believes that waiver of the available for website viewing and The text of the proposed rule change 30-day operative delay is consistent printing in the Commission’s Public is available on the Exchange’s website at with the protection of investors and the Reference Room, 100 F Street NE, http://nasdaqmrx.cchwallstreet.com/, at public interest. Therefore, the Washington, DC 20549, on official the principal office of the Exchange, and Commission designates the proposed business days between the hours of at the Commission’s Public Reference rule change to be operative upon 10:00 a.m. and 3:00 p.m. Copies of the Room. filing.10 filing also will be available for II. Self-Regulatory Organization’s At any time within 60 days of the inspection and copying at the principal Statement of the Purpose of, and filing of the proposed rule change, the office of the Exchange. All comments Statutory Basis for, the Proposed Rule Commission summarily may received will be posted without change. Change temporarily suspend such rule change if Persons submitting comments are it appears to the Commission that such cautioned that we do not redact or edit In its filing with the Commission, the action is necessary or appropriate in the personal identifying information from Exchange included statements public interest, for the protection of comment submissions. You should concerning the purpose of and basis for investors, or otherwise in furtherance of submit only information that you wish the proposed rule change and discussed the purposes of the Act. If the to make available publicly. All any comments it received on the Commission takes such action, the submissions should refer to File proposed rule change. The text of these Commission shall institute proceedings Number SR–Phlx–2017–101 and should statements may be examined at the to determine whether the proposed rule be submitted on or before January 10, places specified in Item IV below. The should be approved or disapproved. 2018. Exchange has prepared summaries, set For the Commission, by the Division of forth in sections A, B, and C below, of IV. Solicitation of Comments Trading and Markets, pursuant to delegated the most significant aspects of such Interested persons are invited to authority.11 statements. submit written data, views, and Eduardo A. Aleman, arguments concerning the foregoing, A. Self-Regulatory Organization’s Assistant Secretary. Statement of the Purpose of, and including whether the proposed rule change is consistent with the Act. [FR Doc. 2017–27343 Filed 12–19–17; 8:45 am] Statutory Basis for, the Proposed Rule Comments may be submitted by any of BILLING CODE 8011–01–P Change the following methods: 1. Purpose Electronic Comments SECURITIES AND EXCHANGE The Exchange is proposing to amend • Use the Commission’s internet COMMISSION Rule 701, Openings, to amend the comment form (http://www.sec.gov/ [Release No. 34–82324; File No. SR–MRX– obligations of a PMM when entering rules/sro.shtml); or 2017–27] Valid Width Quotes during the Opening • Send an email to rule-comments@ Process. In addition, the Exchange sec.gov. Please include File Number SR– Self-Regulatory Organizations; Nasdaq proposes to make clear the obligations Phlx–2017–101 on the subject line. MRX, LLC; Notice of Filing and of a PMM and a Competitive Market Immediate Effectiveness of Proposed Maker (‘‘CMM’’) once an options series Paper Comments Rule Change Relating to Primary has opened. • Send paper comments in triplicate Market Maker Obligations Currently, Rule 701(c)(1) provides, the to Secretary, Securities and Exchange Opening Process for an option series December 14, 2017. will be conducted pursuant to Commission, 100 F Street NE, Washington, DC 20549–1090. Pursuant to Section 19(b)(1) of the paragraphs (f)–(j) of MRX Rule 701 on Securities Exchange Act of 1934 or after 9:30 a.m. Eastern Time if: the All submissions should refer to File (‘‘Act’’),1 and Rule 19b–4 thereunder,2 ABBO, if any, is not crossed; and the Number SR–Phlx–2017–101. This file notice is hereby given that on November system has received, within two number should be included on the 29, 2017, Nasdaq MRX, LLC (‘‘MRX’’ or subject line if email is used. To help the minutes (or such shorter time as ‘‘Exchange’’) filed with the Securities determined by the Exchange and Commission process and review your and Exchange Commission comments more efficiently, please use disseminated to membership on the (‘‘Commission’’) the proposed rule Exchange’s website) of the opening only one method. The Commission will sradovich on DSK3GMQ082PROD with NOTICES change as described in Items I and II trade or quote on the market for the post all comments on the Commission’s below, which Items have been prepared internet website (http://www.sec.gov/ underlying security in the case of equity by the Exchange. The Commission is options or, in the case of index options, 10 For purposes only of waiving the 30-day publishing this notice to solicit operative delay, the Commission also has 3 A ‘‘Valid Width Quote’’ is a two-sided electronic 11 17 CFR 200.30–3(a)(12). considered the proposed rule’s impact on quotation submitted by a Market Maker that 1 15 U.S.C. 78s(b)(1). efficiency, competition, and capital formation. See consists of a bid/ask differential that is compliant 15 U.S.C. 78c(f). 2 17 CFR 240.19b–4. with Rule 803(b)(4). See Rule 701(a)(8). VerDate Sep<11>2014 21:36 Dec 19, 2017 Jkt 244001 PO 00000 Frm 00092 Fmt 4703 Sfmt 4703 E:\FR\FM\20DEN1.SGM 20DEN1


Document Created: 2018-10-25 10:57:41
Document Modified: 2018-10-25 10:57:41
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation82 FR 60458 
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