83 FR 18360 - Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Exchange's Pricing Schedule at Section II To Clarify Fees Applicable To Correcting “As/of” or “Reversal” Trades
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 81 (April 26, 2018)
Federal Register Volume 83, Issue 81 (April 26, 2018)
| Page Range | 18360-18362 | |
| FR Document | 2018-08729 |
[Federal Register Volume 83, Number 81 (Thursday, April 26, 2018)] [Notices] [Pages 18360-18362] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-08729] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-83080; File No. SR-18-31] Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Exchange's Pricing Schedule at Section II To Clarify Fees Applicable To Correcting ``As/of'' or ``Reversal'' Trades April 20, 2018. 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 April 17, 2018, Nasdaq PHLX LLC (``Phlx'' or ``Exchange'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I, II, and III, 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 the Exchange's Pricing Schedule at Section II to clarify fees applicable to correcting ``as/of'' or ``reversal'' trades, as described below. 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 purpose of the proposed rule change is to amend Section II of the Exchange's Pricing Schedule to clarify that when the Exchange processes an ``as/of'' or ``reversal'' trade at the request of a member to correct clearing, the new trade will incur the ``Floor'' category of Options Transaction Charges for the correction, even if the underlying trade that the Exchange is correcting was electronic, because the Exchange must process all corrections manually and in accordance with procedures applicable to Floor trades. Pursuant to its Policy for Amended Billing Information, which is set forth in the introduction to the Pricing Schedule, the Exchange entertains written requests (with supporting documentation) that its members submit [[Page 18361]] to correct or reverse erroneous trades after the date when such trades clear. The corrections that the Exchange makes in response to such requests are to errors that the requesting member or other members associated with the trade have made with respect to executed orders. These errors are not Exchange errors. Provided that the Exchange determines that the correction or reversal request is valid, the Exchange must process the correction or reversal manually, using a paper trade ticket, even if the underlying trade that the Exchange is correcting or reversing was electronic in nature. The Exchange presently does not possess a means of electronically correcting or reversing a trade after settlement date of the trade. Accordingly, even if the Exchange originally charged a member the ``Electronic'' rate for the Options Transaction Charge that applied to the underlying trade, the Exchange will charge the member the ``Floor'' rate to correct or reverse the trade. Although this is the existing practice of the Exchange, the Exchange now proposes to make this practice explicit in its Pricing Schedule. Specifically, the Exchange proposes adding a footnote 8 to Section II of the Pricing Schedule stating that ``Floor transaction fees will apply to any `as of' or `reversal' adjustments for manually processed trades originally submitted electronically or through FBMS.'' \3\ --------------------------------------------------------------------------- \3\ For the avoidance of doubt, the Exchange notes that the transaction fee that the Exchange charges to reverse or correct a trade is in addition to, rather than in lieu of, the transaction fee charged to execute the underlying trade that is subject to reversal or correction. --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,\4\ in general, and furthers the objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\5\ in particular, in that it provides for the equitable allocation of reasonable dues, fees and other charges among members and issuers and other persons using any facility, and is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. --------------------------------------------------------------------------- \4\ 15 U.S.C. 78f(b). \5\ 15 U.S.C. 78f(b)(4) and (5). --------------------------------------------------------------------------- The Exchange believes that it is reasonable to charge members an Options Transactions Charge to correct or reverse erroneous trades because processing such corrections and reversals requires the Exchange to execute additional options transactions. Moreover, the trade corrections and reversals at issue occur at the request of members and pursuant to errors for which members, rather than the Exchange, are responsible. Additionally, it is reasonable for the Exchange to charge members the ``Floor'' rate to correct or reverse trades--including to correct or reverse both Floor-based and electronic trades--because the Exchange must process all such requests manually, using trade tickets, and in accordance with its Floor-based procedures. The Exchange believes that its proposal is an equitable allocation and is not unfairly discriminatory because the ``Floor'' rate that the Exchange charges for corrections or reversals is reflective of the Exchange's manual process of correcting or reversing a trade rather than the nature of the underlying trade that the Exchange is correcting or reversing. Moreover, the Exchange notes that it will assess the same fee to all similarly situated members that request corrections or reversals. 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. In terms of inter-market competition, the Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive. In such an environment, the Exchange must continually adjust its fees to remain competitive with other exchanges and with alternative trading systems that have been exempted from compliance with the statutory standards applicable to exchanges. Because competitors are free to modify their own fees in response, and because market participants may readily adjust their order routing practices, the Exchange believes that the degree to which fee changes in this market may impose any burden on competition is extremely limited. In this instance, the proposed changes to the Pricing Schedule compensate the Exchange for effecting transactions, using a manual process, that are necessary to correct or reverse trades at a member's request. The proposals also clarify and render more transparent the existing practices of the Exchange with respect to its fees for processing member requests for corrections and reversals. The Exchange does not intend or expect that the proposals will have any impact on inter-market or intra-market competition. 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 foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act.\6\ --------------------------------------------------------------------------- \6\ 15 U.S.C. 78s(b)(3)(A)(ii). --------------------------------------------------------------------------- At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic CommentsUse the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-Phlx-2018-31 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-2018-31. 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 [[Page 18362]] 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-2018-31 and should be submitted on or before May 17, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\7\ --------------------------------------------------------------------------- \7\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-08729 Filed 4-25-18; 8:45 am] BILLING CODE 8011-01-P
![18360 Federal Register / Vol. 83, No. 81 / Thursday, April 26, 2018 / Notices
C. Self-Regulatory Organization’s number should be included on the 2018, Nasdaq PHLX LLC (‘‘Phlx’’ or
Statement on Comments on the subject line if email is used. To help the ‘‘Exchange’’) filed with the Securities
Proposed Rule Change Received From Commission process and review your and Exchange Commission
Members, Participants, or Others comments more efficiently, please use (‘‘Commission’’) the proposed rule
No written comments were either only one method. The Commission will change as described in Items I, II, and
solicited or received. post all comments on the Commission’s III, below, which Items have been
internet website (http://www.sec.gov/ prepared by the Exchange. The
III. Date of Effectiveness of the rules/sro.shtml). Copies of the Commission is publishing this notice to
Proposed Rule Change and Timing for submission, all subsequent solicit comments on the proposed rule
Commission Action amendments, all written statements change from interested persons.
Because the foregoing proposed rule with respect to the proposed rule
change that are filed with the I. Self-Regulatory Organization’s
change does not: (i) Significantly affect Statement of the Terms of Substance of
the protection of investors or the public Commission, and all written
communications relating to the the Proposed Rule Change
interest; (ii) impose any significant
burden on competition; and (iii) become proposed rule change between the The Exchange proposes to amend the
operative for 30 days from the date on Commission and any person, other than Exchange’s Pricing Schedule at Section
which it was filed, or such shorter time those that may be withheld from the II to clarify fees applicable to correcting
as the Commission may designate, it has public in accordance with the ‘‘as/of’’ or ‘‘reversal’’ trades, as
become effective pursuant to Section provisions of 5 U.S.C. 552, will be described below. The text of the
19(b)(3)(A)(iii) of the Act 11 and available for website viewing and proposed rule change is available on the
subparagraph (f)(6) of Rule 19b–4 printing in the Commission’s Public Exchange’s website at http://
thereunder.12 Reference Room, 100 F Street NE, nasdaqphlx.cchwallstreet.com/, at the
At any time within 60 days of the Washington, DC 20549, on official principal office of the Exchange, and at
filing of the proposed rule change, the business days between the hours of the Commission’s Public Reference
Commission summarily may 10:00 a.m. and 3:00 p.m. Copies of the Room.
temporarily suspend such rule change if filing also will be available for
it appears to the Commission that such inspection and copying at the principal II. Self-Regulatory Organization’s
action is: (i) Necessary or appropriate in office of the Exchange. All comments Statement of the Purpose of, and
the public interest; (ii) for the protection received will be posted without change. Statutory Basis for, the Proposed Rule
of investors; or (iii) otherwise in Persons submitting comments are Change
furtherance of the purposes of the Act. cautioned that we do not redact or edit In its filing with the Commission, the
If the Commission takes such action, the personal identifying information from Exchange included statements
Commission shall institute proceedings comment submissions. You should concerning the purpose of and basis for
to determine whether the proposed rule submit only information that you wish the proposed rule change and discussed
should be approved or disapproved. to make available publicly. All any comments it received on the
submissions should refer to File proposed rule change. The text of these
IV. Solicitation of Comments Number SR–Phlx–2018–30 and should statements may be examined at the
Interested persons are invited to be submitted on or before May 17, 2018. places specified in Item IV below. The
submit written data, views, and For the Commission, by the Division of Exchange has prepared summaries, set
arguments concerning the foregoing, Trading and Markets, pursuant to delegated forth in sections A, B, and C below, of
including whether the proposed rule authority.13 the most significant aspects of such
change is consistent with the Act. Eduardo A. Aleman, statements.
Comments may be submitted by any of Assistant Secretary.
the following methods: A. Self-Regulatory Organization’s
[FR Doc. 2018–08727 Filed 4–25–18; 8:45 am]
Statement of the Purpose of, and
Electronic Comments BILLING CODE 8011–01–P Statutory Basis for, the Proposed Rule
• Use the Commission’s internet Change
comment form (http://www.sec.gov/
SECURITIES AND EXCHANGE 1. Purpose
rules/sro.shtml); or
• Send an email to rule-comments@ COMMISSION The purpose of the proposed rule
sec.gov. Please include File Number SR– [Release No. 34–83080; File No. SR–18–31] change is to amend Section II of the
Phlx–2018–30 on the subject line. Exchange’s Pricing Schedule to clarify
Self-Regulatory Organizations; Nasdaq that when the Exchange processes an
Paper Comments PHLX LLC; Notice of Filing and ‘‘as/of’’ or ‘‘reversal’’ trade at the request
• Send paper comments in triplicate Immediate Effectiveness of Proposed of a member to correct clearing, the new
to Secretary, Securities and Exchange Rule Change To Amend the trade will incur the ‘‘Floor’’ category of
Commission, 100 F Street NE, Exchange’s Pricing Schedule at Options Transaction Charges for the
Washington, DC 20549–1090. Section II To Clarify Fees Applicable correction, even if the underlying trade
All submissions should refer to File To Correcting ‘‘As/of’’ or ‘‘Reversal’’ that the Exchange is correcting was
Number SR–Phlx–2018–30. This file Trades electronic, because the Exchange must
April 20, 2018. process all corrections manually and in
11 15 U.S.C. 78s(b)(3)(A)(iii).
Pursuant to Section 19(b)(1) of the accordance with procedures applicable
amozie on DSK30RV082PROD with NOTICES
12 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
Securities Exchange Act of 1934 to Floor trades.
4(f)(6)(iii) requires the Exchange to give the
Commission written notice of the Exchange’s intent (‘‘Act’’),1 and Rule 19b–4 thereunder,2 Pursuant to its Policy for Amended
to file the proposed rule change, along with a brief notice is hereby given that on April 17, Billing Information, which is set forth in
description and text of the proposed rule change, the introduction to the Pricing
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
13 17 CFR 200.30–3(a)(12). Schedule, the Exchange entertains
as designated by the Commission. The Exchange 1 15 U.S.C. 78s(b)(1). written requests (with supporting
has satisfied this requirement. 2 17 CFR 240.19b–4. documentation) that its members submit
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![18362 Federal Register / Vol. 83, No. 81 / Thursday, April 26, 2018 / Notices
those that may be withheld from the the Commission that issuers that have (‘‘Act’’),1 and Rule 19b–4 thereunder,2
public in accordance with the conducted Tier 2 offering are notice is hereby given that on April 10,
provisions of 5 U.S.C. 552, will be suspending their duty to file reports 2018, Nasdaq ISE, LLC (‘‘ISE’’ or
available for website viewing and under Regulation A and to provide such ‘‘Exchange’’) filed with the Securities
printing in the Commission’s Public information to the investing public. We and Exchange Commission
Reference Room, 100 F Street NE, estimate that approximately 12 issuers (‘‘Commission’’) the proposed rule
Washington, DC 20549, on official file Form 1–Z annually. We estimate change as described in Items I and II
business days between the hours of that Form 1–Z takes approximately 1.5 below, which Items have been prepared
10:00 a.m. and 3:00 p.m. Copies of the hours to prepare. We estimate that by the Exchange. The Commission is
filing also will be available for 100% of the 1.5 hours per response is publishing this notice to solicit
inspection and copying at the principal prepared by the company for a total comments on the proposed rule change
office of the Exchange. All comments annual burden of 18 hours (1.5 hours from interested persons.
received will be posted without change. per response × 12 responses).
Persons submitting comments are I. Self-Regulatory Organization’s
Written comments are invited on: (a)
cautioned that we do not redact or edit Statement of the Terms of Substance of
Whether the proposed collection of
personal identifying information from the Proposed Rule Change
information is necessary for the proper
comment submissions. You should performance of the functions of the The Exchange proposes to incorporate
submit only information that you wish agency, including whether the by reference The Nasdaq Stock Market
to make available publicly. All information will have practical utility; LLC’s (‘‘Nasdaq’’) rule at General 7,
submissions should refer to File (b) the accuracy of the agency’s estimate entitled ‘‘Consolidated Audit Trail
Number SR–Phlx–2018–31 and should of the burden imposed by the collection Compliance’’ into ISE’s General 7.
be submitted on or before May 17, 2018. of information; (c) ways to enhance the The text of the proposed rule change
For the Commission, by the Division of quality, utility, and clarity of the is available on the Exchange’s website at
Trading and Markets, pursuant to delegated information collected; and (d) ways to http://ise.cchwallstreet.com/, at the
authority.7 minimize the burden of the collection of principal office of the Exchange, and at
Eduardo A. Aleman, information on respondents, including the Commission’s Public Reference
Assistant Secretary. through the use of automated collection Room.
[FR Doc. 2018–08729 Filed 4–25–18; 8:45 am] techniques or other forms of information
II. Self-Regulatory Organization’s
BILLING CODE 8011–01–P technology. Consideration will be given
Statement of the Purpose of, and
to comments and suggestions submitted
Statutory Basis for, the Proposed Rule
in writing within 60 days of this
Change
SECURITIES AND EXCHANGE publication.
COMMISSION An agency may not conduct or In its filing with the Commission, the
sponsor, and a person is not required to Exchange included statements
Proposed Collection; Comment respond to, a collection of information concerning the purpose of and basis for
Request unless it displays a currently valid the proposed rule change and discussed
Upon Written Request Copies Available control number. any comments it received on the
From: Securities and Exchange Please direct your written comments proposed rule change. The text of these
Commission, Office of FOIA Services, to Pamela Dyson, Director/Chief statements may be examined at the
100 F Street NE, Washington, DC Information Officer, Securities and places specified in Item IV below. The
20549–2736. Exchange Commission, c/o Remi Pavlik- Exchange has prepared summaries, set
Simon, 100 F Street NE, Washington, forth in sections A, B, and C below, of
Extension: the most significant aspects of such
Form 1–Z, SEC File No. 270–659, OMB DC 220549; or send an email to: PRA_
Control No. 3235–0723. Mailbox@sec.gov. statements.
Notice is hereby given that, pursuant Dated: April 23, 2018. A. Self-Regulatory Organization’s
to the Paperwork Reduction Act of 1995 Eduardo A. Aleman, Statement of the Purpose of, and
(44 U.S.C. 3501 et seq.), the Securities Assistant Secretary. Statutory Basis for, the Proposed Rule
and Exchange Commission [FR Doc. 2018–08820 Filed 4–25–18; 8:45 am] Change
(‘‘Commission’’) is soliciting comments BILLING CODE 8011–01–P 1. Purpose
on the collection of information
summarized below. The Commission The Exchange proposes to incorporate
plans to submit this existing collection SECURITIES AND EXCHANGE by reference Nasdaq’s rule at General 7,
of information to the Office of COMMISSION entitled ‘‘Consolidated Audit Trail
Management and Budget for extension Compliance’’ into ISE’s General 7. The
and approval. [Release No. 34–83079; File No. SR–ISE– rule sets are identical.3 ISE proposes to
Form 1–Z (17 CFR 239.94) is used to 2018–35] remove the current rule text from
report terminated or completed offerings
or to suspend the duty to file ongoing Self-Regulatory Organizations; Nasdaq 1 15 U.S.C. 78s(b)(1).
reports under Regulation A, an ISE, LLC; Notice of Filing and 2 17 CFR 240.19b–4.
exemption from registration under the Immediate Effectiveness of Proposed 3 See Securities Exchange Act Release Nos. 82601
Rule Change To Incorporate by (January 30, 2018), 83 FR 4949 (February 2, 2018)
Securities Act of 1933 (15 U.S.C 77a et (SR–Phlx–2018–11); 82604 (January 30, 2018), 83
amozie on DSK30RV082PROD with NOTICES
seq.). The purpose of the Form 1–Z is Reference The Nasdaq Stock Market FR 5154 (February 5, 2018) (SR–NASDAQ–2018–
to collect empirical data for the LLC’s Consolidated Audit Trail Rules 007); 82597 (January 30, 2018), 83 FR 4942
Commission on offerings conducted Into the Rules of Nasdaq ISE (February 2, 2018) (SR–BX–2018–007); 82599
under Regulation A that have (January 30, 2017), 83 FR 4947 (February 2, 2018)
April 20, 2018. (SR–ISE–2018–09); 82598 (January 30, 2018), 83 FR
terminated or completed, to indicate to 4936 (February 2, 2018) (SR–GEMX–2018–02); and
Pursuant to Section 19(b)(1) of the 82600 (January 30, 2018), 83 FR 4934 (February 2,
7 17 CFR 200.30–3(a)(12). Securities Exchange Act of 1934 2018) (SR–MRX–2018–03).
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Document Created: 2018-11-02 08:19:50
Document Modified: 2018-11-02 08:19:50
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| Section | Notices | |
| FR Citation | 83 FR 18360 |
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