83 FR 3235 - Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Market Maker Orders
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 15 (January 23, 2018)
Federal Register Volume 83, Issue 15 (January 23, 2018)
| Page Range | 3235-3238 | |
| FR Document | 2018-01087 |
[Federal Register Volume 83, Number 15 (Tuesday, January 23, 2018)] [Notices] [Pages 3235-3238] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-01087] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-82516; File No. SR-GEMX-2018-01] Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Market Maker Orders January 17, 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 January 5, 2018, Nasdaq GEMX, LLC (``GEMX'' 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. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- The text of the proposed rule change is set forth below. Proposed new language is italicized; deleted text is in [brackets]. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend GEMX Rule 805 to permit Market Makers \3\ to enter additional order types in the options classes to which they are appointed. --------------------------------------------------------------------------- \3\ Market Makers refers to ``Competitive Market Makers'' and ``Primary Market Makers'' collectively. See GEMX Rule 100(a)(25). --------------------------------------------------------------------------- * * * * * Nasdaq GEMX Rulebook * * * * * Rule 805. Market Maker Orders (a) Options Classes to Which Appointed. Market makers may enter all order types defined in Rule 715 in the options classes to which they are appointed under Rule 802, except Stopped Orders, Reserve Orders and Customer Cross Orders.[not place principal orders to buy or sell options in the options classes to which they are appointed under Rule 802, other than opening only orders, immediate-or-cancel orders, market orders, fill-or-kill orders, sweep orders, and block-size orders executed through the Block Order Mechanism pursuant to Rule 716(c).] Competitive Market Makers shall comply with the provisions of Rule 804(e)(2)(iii) upon the entry of such orders if they were not previously quoting in the series. (b) Options Classes Other Than Those to Which Appointed. (1) A market maker may enter all order types permitted to be entered by non-customer participants under the Rules to buy or sell options in classes of options listed on the Exchange to which the market maker is not appointed under Rule 802, except for Reserve Orders, provided that: (i) and (ii) No change. (2) and (3) No change. * * * * * 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. [[Page 3236]] A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of this rule change is to permit Market Makers to enter principal orders to buy or sell options in the options classes to which they are appointed under Rule 802 \4\ for all order types listed in Rule 715 except for Stopped Orders,\5\ Reserve Orders \6\ and Customer Cross Orders.\7\ This filing is intended to permit Market Makers to execute most of the same order types, which today they are permitted to enter on other options markets.\8\ In addition, this filing is intended to amend GEMX Rule 805(b)(1) to indicate that Reserve Orders are not permitted to be entered by GEMX Market Makers in non-appointed options classes. Today, GEMX Market Makers may not enter Reserve Orders in either appointed or non-appointed options classes. Today, while the System prohibits GEMX Market Makers from entering Reserve Orders, GEMX Rule 805(b)(1) does not indicate the restriction. --------------------------------------------------------------------------- \4\ GEMX Rule 802 concerns the appointment of Market Makers. \5\ A stopped order is a limit order that meets the requirements of Rule 1901(b)(8). To execute stopped orders, Members must enter them into the Facilitation Mechanism or Solicited Order Mechanism pursuant to Rule 716. See GEMX Rule 715(b)(6). \6\ A Reserve Order is a limit order that contains both a displayed portion and a non-displayed portion. Both the displayed and non-displayed portions of a Reserve Order are available for potential execution against incoming marketable orders. A non- marketable Reserve Order will rest on the order book. The displayed portion of a Reserve Order shall be ranked at the specified limit price and the time of order entry. The displayed portion of a Reserve Order will trade in accordance with Rule 713(c) and (d) for Priority Customer Orders, and Rule 713(e) and Supplementary Material .01, for Professional Orders. When the displayed portion of a Reserve Order is decremented, either in full or in part, it shall be refreshed from the non-displayed portion of the resting Reserve Order. If the displayed portion is refreshed in part, the new displayed portion shall include the previously displayed portion. Upon any refresh, the entire displayed portion shall be ranked at the specified limit price and obtain a new time stamp, i.e., the time that the new displayed portion of the order was refreshed. The new displayed portion will trade in accordance with Rule 713(c) and (d) for Priority Customer Orders, and Rule 713(e) and Supplementary Material .01, for Professional Orders. The initial non-displayed portion of a Reserve Order rests on the order book and is ranked based on the specified limit price and time of order entry. Thereafter, non-displayed portions, if any, always obtain the same time stamp as that of the new displayed portion in subparagraph 4 above. The non-displayed portion of any Reserve Order is available for execution only after all displayed interest has been executed. The non-displayed portion of any Reserve Order will trade in accordance with Rule 713(c) and (d) for Priority Customer Orders, and Rule 713(e) and Supplementary Material .01, for Professional Orders. See GEMX Rule 715(g). \7\ A Customer Cross Order is comprised of a Priority Customer Order to buy and a Priority Customer Order to sell at the same price and for the same quantity. See Gemx Rule 715(i). \8\ NYSE Arca, Inc. (``NYSE Arca'') and NYSE American LLC (``NYSE American'') do not limit the types of orders that can be entered by market makers. See NYSE Arca Rule 6.37C-O and NYSE American Rule 925.2NY. --------------------------------------------------------------------------- Appointed Options Classes Today, as noted in GEMX Rule 805(a), a Market Maker may not place principal orders to buy or sell options in the options classes to which they are appointed under Rule 802, other than opening only orders,\9\ immediate-or-cancel orders,\10\ market orders, fill-or-kill orders,\11\ sweep orders,\12\ and block-size orders \13\ executed through the Block Order Mechanism \14\ pursuant to Rule 716(c). At this time, the Exchange proposes to expand the order types which Market Makers are permitted to enter on GEMX.\15\ The Exchange is amending GEMX Rule 805(a) to make clear which order types a Market Maker in an appointed options class may submit. Additionally, ISO Orders, All-Or-None Orders, Stop Orders, Qualified Contingent Cross Orders, Attributable Orders, Do-Not-Route Orders, Opening Sweep Orders, Cancel and Replace Orders,\16\ and Add Liquidity Orders are accepted on GEMX today from Market Makers as principal orders as modifiers of the allowable non- resting order types, although they are not specifically detailed in the rule. This rule change will further detail and align the rule text with the system functionality by making clear that Maker Makers may enter all order types defined in Rule 715 in the options classes to which they are appointed under Rule 802, except Stopped Orders, Reserve Orders and Customer Cross Orders. --------------------------------------------------------------------------- \9\ An Opening Only order is a limit order that can be entered for the opening rotation only. Any portion of the order that is not executed during the opening rotation is cancelled. See GEMX Rules 717(o). \10\ An immediate-or-cancel order is a limit order that is to be executed in whole or in part upon receipt. Any portion not so executed is to be treated as cancelled. An immediate-or-cancel order entered by a Market Maker through the Specialized Quote Feed protocol will not be subject to the Limit Order Price Protection and Size Limitation Protection as defined in GEMX Rule 714(b)(2) and (3). See GEMX Rule 715(b)(2). \11\ A fill-or-kill order is a limit order that is to be executed in its entirety as soon as it is received and, if not so executed, treated as cancelled. See GEMX Rule 715(b)(2). \12\ A Sweep Order is a limit order that is to be executed in whole or in part on the Exchange and the portion not so executed shall be routed pursuant to Supplementary Material .05 to Rule 1901 to Eligible Exchange(s) for immediate execution as soon as the order is received by the Eligible Exchange(s). Any portion not immediately executed by the Eligible Exchange(s) shall be canceled. If a Sweep Order is not marketable when it is submitted to the Exchange, it shall be canceled. See GEMX Rule 715(s). \13\ Block-size orders are orders for fifty (50) contracts or more. See GEMX Rule 716(a). \14\ The Block Order Mechanism is a process by which a Member can obtain liquidity for the execution of block-size orders. See GEMX Rule 716(c). \15\ This expansion would include Good-Till-Date Orders, GTC Orders, Limit Orders, and Stop Limit Orders as new acceptable order types. \16\ Cancel and Replace Orders shall mean a single message for the immediate cancellation of a previously received order and the replacement of that order with a new order. If the previously placed order is already filled partially or in its entirety, the replacement order is automatically canceled or reduced by the number of contracts that were executed. The replacement order will retain the priority of the cancelled order, if the order posts to the Order Book, provided the price is not amended, size is not increased, or in the case of Reserve Orders, size is not changed. If the replacement portion of a Cancel and Replace order does not satisfy the system's price or other reasonability checks (e.g., GEMX Rule 710; GEMX Rule 711(c); GEMX Rule 714(b)(2); and GEMX Rule 722(b)(1) and Supplementary Material .07 (b), (c) and (d) to Rule 722) the existing order shall be cancelled and not replaced. See Supplementary Material .02 to GEMX Rule 715. --------------------------------------------------------------------------- Today, GEMX Market Makers, who are appointed and non-appointed in a particular options class, may submit orders without limitation, unless otherwise restricted by the order type as discussed herein. The Exchange proposes to permit Market Makers to enter all order types, which are listed in GEMX Rule 715, except for Stopped Orders, Reserve Orders and Customer Cross Orders. The Exchange notes that today Market Makers are not eligible to execute either Customer Cross Orders, which are Customer orders, or Stopped Orders, which are intended for the account of a customer.\17\ With respect to Reserve Orders, the Exchange proposes to continue to restrict Market Makers from entering Reserve Orders in their appointed options class. The Exchange believes that Market Maker liquidity should be displayed liquidity. For these reasons, and to remain competitive with other markets, the Exchange proposes to permit Market Makers to enter all orders they are eligible to submit in their appointed class with the exception of Reserve Orders and also restrict Reserve Orders in the non-appointed classes. --------------------------------------------------------------------------- \17\ GEMX Rule 1901(b)(8) states, ``The transaction that constituted the Trade-Through was the execution of an order for which, at the time of receipt of the order, a Member had guaranteed an execution at no worse than a specified price (a ``stopped order''), where: (i) The stopped order was for the account of a Customer; (ii) the Customer agreed to the specified price on an order-by-order basis; and (iii) the price of the Trade-Through was, for a stopped buy order, lower than the national Best Bid in the options series at the time of execution, or, for a stopped sell order, higher than the national Best Offer in the options series at the time of execution . . .'' --------------------------------------------------------------------------- [[Page 3237]] Non-Appointed Options Classes Today, for the reasons noted above, the Exchange does not permit Market Makers to enter Reserve Orders in non-appointed options classes. However, the current rule text does not provide this limitation. The Exchange proposes to amend the current rule text at GEMX Rule 805(b)(1) to codify this limitation. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,\18\ in general, and furthers the objectives of Section 6(b)(5) of the Act,\19\ 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 providing Market Makers access to trade order types which are currently permissible to be traded in on other options exchanges today.\20\ The Exchange believes that permitting Market Makers to enter all eligible order types, except Reserve Orders, in both appointed and non-appointed options classes offers no advantage to Market Makers under the Exchange's market structure, including, but not limited to, under the priority and trade allocation rules in GEMX Rule 713 and various risk protection mechanism rules applicable to Market Makers in GEMX Rule 804.\21\ Today, other non-Market Maker participants may submit these order types on GEMX. --------------------------------------------------------------------------- \18\ 15 U.S.C. 78f(b). \19\ 15 U.S.C. 78f(b)(5). \20\ See note 8 above. \21\ Today, Market Makers are not eligible to execute either Customer Cross Orders, which are Customer orders, or Stopped Orders, which are intended for the account of a customer. --------------------------------------------------------------------------- The Exchange notes that previously, Nasdaq ISE, LLC prohibited non- customer trading by Electronic Access Members (``EAMs'') for principal or agent transactions.\22\ At that time, ISE represented that, in an electronic market, non-customer market orders have the potential to create market volatility by trading at different price levels until their order is fully executed. ISE further noted that, without this restriction, non-customers would be able to use large-size orders to quickly take out ISE's entire order book without giving other market participants an opportunity to react.\23\ Today, EAMs on ISE may submit non-customer limit orders regardless of the size of the order where previously EAMs were prohibited from submitting orders for non- customers that caused ISE's best bid and offer to be for less than 10 contracts.\24\ --------------------------------------------------------------------------- \22\ See Securities Exchange Act Release No. 42455 (February 24, 2000), 65 FR 11388 (March 2, 2000) (File No. 10-127) (In the Matter of the Application of The International Securities Exchange LLC for Registration as a National Securities Exchange; Findings and Opinion of the Commission). \23\ Id. When the restriction was adopted, there were various limitations imposed on non-customer trading. For example, displayed quotes were firm only for public customer orders. Since that time, electronic options trading has evolved. With the adoption of trade- through protection under the intermarket linkage, every order must be executed at the best quoted price. Further, ISE has also removed restrictions on non-customer trading. \24\ See Securities Exchange Act Release No. 49602 (April 22, 2004), 69 FR 23841 (April 30, 2004) (SR-ISE-2003-26). --------------------------------------------------------------------------- The Exchange notes that these restrictions never existed on GEMX. GEMX believes that these restrictions should not exist today because there is no reason to restrict Market Makers in entering order types, except for the restriction related to Reserve Orders, in options classes in which they are appointed. Unlike other order types, the Reserve Order is a limit order that contains both a displayed portion and a non-displayed portion.\25\ Both the displayed and non-displayed portions of a Reserve Order are available for potential execution against incoming marketable orders. When the displayed portion of a Reserve Order is decremented, either in full or in part, it shall be refreshed from the non-displayed portion of the resting Reserve Order. The Exchange believes that because a Reserve Order contains a non- displayed potion, Market Makers should not be permitted to enter this order. Market Makers are required to make markets that, absent changed market conditions, will be honored for the number of contracts entered into the Exchange's System in all series of options classes to which the market maker is appointed.\26\ The Exchange believes that these markets should be transparent. Today, GEMX Market Makers are not permitted to enter Reserve Orders in either appointed or non-appointed options classes. The Exchange proposes to specifically note this limitation in both Rule 805(a) and (b) as an exception. The Exchange notes that this limitation is specifically not noted in Rule 805(b) today despite the fact that the limitation exists in the System today. --------------------------------------------------------------------------- \25\ See GEMX Rule 715(g). \26\ See GEMX Rule 803(b)(2). --------------------------------------------------------------------------- The Exchange is also amending GEMX Rule 805(a) to detail the types of non-resting order types and their modifiers with respect to ISO Orders, All-Or-None Orders, Stop Orders, Qualified Contingent Cross Orders, Attributable Orders, Do-Not-Route Orders, Opening Sweep Orders, Cancel and Replace Orders, and Add Liquidity Orders. This rule change will detail and align the rule text with the system functionality and make clear which order types a Market Maker may submit in appointed options classes. GEMX Market Makers continue to be obligated to add liquidity on GEMX. The Exchange also notes that GEMX Rule 805(b)(2) and (3) restricts the number of contracts that a Market Maker may enter in an options class to which the Market Maker is not appointed.\27\ The Exchange notes that it also requires Market Makers to abide by certain quoting requirements, in the options classes in which they are appointed pursuant to GEMX Rule 802, in order to maintain the status of a Market Maker.\28\ The Exchange believes that permitting a Market Maker to enter additional order types, except Reserve Orders, in their appointed options class will permit Market Makers additional latitude to conduct business on GEMX and effectively compete with other market makers on other options exchanges. Quotes and orders entered by a Market Maker may not interact against quotes and orders entered on the opposite side of the market by the same Market Maker.\29\ --------------------------------------------------------------------------- \27\ The total number of contracts executed during a quarter by a Competitive Market Maker in options classes to which it is not appointed may not exceed twenty-five percent (25%) of the total number of contracts traded by such Competitive Market Maker in classes to which it is appointed and with respect to which it was quoting pursuant to Rule 804(e)(2). See GEMX Rule 805(b)(2). The total number of contracts executed during a quarter by a Primary Market Maker in options classes to which it is not appointed may not exceed ten percent (10%) of the total number of contracts traded per each Primary Market Maker Membership. See GEMX Rule 805(b)(3). \28\ See GEMX Rule 804(e) and Supplementary Material .01 to Rule 804. Orders do not count toward meeting continuous quoting obligations. \29\ See GEMX Rule 804(b). --------------------------------------------------------------------------- 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. Today, NYSE Arca and NYSE American place no limitation on the types of orders that can be entered by market makers in their appointed class.\30\ Accordingly, the Exchange believes that this proposal does not impose an undue burden on inter-market competition because each options exchange generally determines permissible order types for market makers in its trading environment based [[Page 3238]] on the exchange's individual business policy, objectives, and trading system. The Exchange's proposal reflects its policy and objectives, and does not impose an undue burden on intra-market competition because it treats all market makers uniformly with respect to permissible order types. Further, this rule change will align the system functionality with the rule text to reflect the types of orders a Market Maker in both appointed and non-appointed options class may submit. The current rule text is not accurate. This rule filing is intended to detail and align the rule text with the system functionality in the current text of Rule 805(a) and (b). This proposal will make clear which order types a Market Maker may submit in both appointed and non-appointed options classes. --------------------------------------------------------------------------- \30\ See note 8 above. --------------------------------------------------------------------------- Further, Market Makers, unlike other market participants, are required to abide by certain quoting requirements, in the options classes in which they are appointed pursuant to GEMX Rule 802, in order to maintain the status of a Market Maker.\31\ The Exchange also notes that GEMX Rule 805(b)(2) and (3) restricts the number of orders that a Market Maker may enter in an options class to which the Market Maker is not appointed.\32\ The Exchange believes that permitting a Market Maker to enter additional order types, except Reserve Orders, in their appointed options class will permit Market Makers additional latitude to conduct business on GEMX and effectively compete with other market makers on other options exchanges. --------------------------------------------------------------------------- \31\ See note 28 above. \32\ See note 27 above. --------------------------------------------------------------------------- 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 \33\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\34\ --------------------------------------------------------------------------- \33\ 15 U.S.C. 78s(b)(3)(A)(iii). \34\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change, along with a brief description and the text of 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. --------------------------------------------------------------------------- A proposed rule change filed under Rule 19b-4(f)(6) \35\ normally does not become operative prior to 30 days after the date of the filing. However, Rule 19b-4(f)(6)(iii) \36\ permits the Commission to 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 proposal may become operative immediately upon filing. The Exchange states that the proposed rule change will permit Market Makers additional latitude to conduct business on GEMX and effectively compete with other market makers on other options exchanges. The Exchange further states that the proposed rule will detail and align the rule text with the system functionality. The Commission believes that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest. Accordingly, the Commission hereby waives the operative delay and designates the proposed rule change as operative upon filing.\37\ --------------------------------------------------------------------------- \35\ 17 CFR 240.19b-4(f)(6). \36\ 17 CFR 240.19b-4(f)(6)(iii). \37\ For purposes only of waiving the 30-day operative delay, the Commission has also 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 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 rule-comments@sec.gov. Please include File Number SR-GEMX-2018-01 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-GEMX-2018-01. 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-GEMX-2018-01 and should be submitted on or before February 13, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\38\ --------------------------------------------------------------------------- \38\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-01087 Filed 1-22-18; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 83, No. 15 / Tuesday, January 23, 2018 / Notices 3235
amongst market data subscribers Commission and any person, other than I. Self-Regulatory Organization’s
regarding the type of User they may be those that may be withheld from the Statement of the Terms of Substance of
considered by the Exchange. The public in accordance with the the Proposed Rule Change
Commission believes that such waiver is provisions of 5 U.S.C. 552, will be The Exchange proposes to amend
consistent with the protection of available for website viewing and GEMX Rule 805 to permit Market
investors and the public interest. printing in the Commission’s Public Makers 3 to enter additional order types
Therefore, the Commission designates Reference Room, 100 F Street NE, in the options classes to which they are
the proposed rule change to be operative Washington, DC 20549 on official appointed.
upon filing. For purposes only of business days between the hours of
waiving the 30-day operative delay, the 10:00 a.m. and 3:00 p.m. Copies of the * * * * *
Commission has also considered the filing also will be available for Nasdaq GEMX Rulebook
proposed rule’s impact on efficiency, inspection and copying at the principal
competition, and capital formation.11 * * * * *
office of the Exchange. All comments
At any time within 60 days of the received will be posted without change. Rule 805. Market Maker Orders
filing of the proposed rule change, the Persons submitting comments are
Commission summarily may (a) Options Classes to Which
cautioned that we do not redact or edit Appointed. Market makers may enter all
temporarily suspend such rule change if personal identifying information from
it appears to the Commission that such order types defined in Rule 715 in the
comment submissions. You should options classes to which they are
action is: (i) Necessary or appropriate in submit only information that you wish
the public interest; (ii) for the protection appointed under Rule 802, except
to make available publicly. All Stopped Orders, Reserve Orders and
of investors; or (iii) otherwise in submissions should refer to File
furtherance of the purposes of the Act. Customer Cross Orders.[not place
Number CboeEDGX–2018–002 and principal orders to buy or sell options
If the Commission takes such action, the should be submitted on or before
Commission shall institute proceedings in the options classes to which they are
February 13, 2018. appointed under Rule 802, other than
to determine whether the proposed rule
For the Commission, by the Division of opening only orders, immediate-or-
should be approved or disapproved. Trading and Markets, pursuant to delegated cancel orders, market orders, fill-or-kill
IV. Solicitation of Comments authority.12 orders, sweep orders, and block-size
Eduardo A. Aleman, orders executed through the Block
Interested persons are invited to
submit written data, views, and Assistant Secretary. Order Mechanism pursuant to Rule
arguments concerning the foregoing, [FR Doc. 2018–01090 Filed 1–22–18; 8:45 am] 716(c).] Competitive Market Makers
including whether the proposed rule BILLING CODE 8011–01–P shall comply with the provisions of
change is consistent with the Act. Rule 804(e)(2)(iii) upon the entry of
Comments may be submitted by any of such orders if they were not previously
the following methods: SECURITIES AND EXCHANGE quoting in the series.
COMMISSION (b) Options Classes Other Than Those
Electronic Comments to Which Appointed.
• Use the Commission’s internet [Release No. 34–82516; File No. SR–GEMX– (1) A market maker may enter all
comment form (http://www.sec.gov/ 2018–01] order types permitted to be entered by
rules/sro.shtml); or non-customer participants under the
• Send an email to rule-comments@ Self-Regulatory Organizations; Nasdaq Rules to buy or sell options in classes
sec.gov. Please include File Number SR– GEMX, LLC; Notice of Filing and of options listed on the Exchange to
CboeEDGX–2018–002 on the subject Immediate Effectiveness of Proposed which the market maker is not
line. Rule Change Relating to Market Maker appointed under Rule 802, except for
Orders Reserve Orders, provided that:
Paper Comments
(i) and (ii) No change.
• Send paper comments in triplicate January 17, 2018.
(2) and (3) No change.
to Secretary, Securities and Exchange Pursuant to Section 19(b)(1) of the
* * * * *
Commission, 100 F Street NE, Securities Exchange Act of 1934
Washington, DC 20549–1090. (‘‘Act’’),1 and Rule 19b–4 thereunder,2 II. Self-Regulatory Organization’s
All submissions should refer to File notice is hereby given that on January 5, Statement of the Purpose of, and
Number CboeEDGX–2018–002. This file 2018, Nasdaq GEMX, LLC (‘‘GEMX’’ or Statutory Basis for, the Proposed Rule
number should be included on the ‘‘Exchange’’) filed with the Securities Change
subject line if email is used. To help the and Exchange Commission In its filing with the Commission, the
Commission process and review your (‘‘Commission’’) the proposed rule Exchange included statements
comments more efficiently, please use change as described in Items I and II concerning the purpose of and basis for
only one method. The Commission will below, which Items have been prepared the proposed rule change and discussed
post all comments on the Commission’s by the Exchange. The Commission is any comments it received on the
internet website (http://www.sec.gov/ publishing this notice to solicit proposed rule change. The text of these
rules/sro.shtml). Copies of the comments on the proposed rule change statements may be examined at the
submission, all subsequent from interested persons. places specified in Item IV below. The
sradovich on DSK3GMQ082PROD with NOTICES
amendments, all written statements The text of the proposed rule change Exchange has prepared summaries, set
with respect to the proposed rule is set forth below. Proposed new forth in sections A, B, and C below, of
change that are filed with the language is italicized; deleted text is in the most significant aspects of such
Commission, and all written [brackets]. statements.
communications relating to the
proposed rule change between the 12 17 CFR 200.30–3(a)(12). 3 Market Makers refers to ‘‘Competitive Market
1 15 U.S.C. 78s(b)(1). Makers’’ and ‘‘Primary Market Makers’’ collectively.
11 See 15 U.S.C. 78c(f). 2 17 CFR 240.19b–4. See GEMX Rule 100(a)(25).
VerDate Sep<11>2014 17:59 Jan 22, 2018 Jkt 244001 PO 00000 Frm 00126 Fmt 4703 Sfmt 4703 E:\FR\FM\23JAN1.SGM 23JAN1](https://thefederalregister.org/doc/83_FR_3250/page/1.svg)
![3238 Federal Register / Vol. 83, No. 15 / Tuesday, January 23, 2018 / Notices
on the exchange’s individual business subparagraph (f)(6) of Rule 19b–4 Electronic Comments
policy, objectives, and trading system. thereunder.34
The Exchange’s proposal reflects its • Use the Commission’s internet
A proposed rule change filed under
policy and objectives, and does not comment form (http://www.sec.gov/
Rule 19b–4(f)(6) 35 normally does not
impose an undue burden on intra- rules/sro.shtml); or
become operative prior to 30 days after
market competition because it treats all the date of the filing. However, Rule • Send an email to rule-comments@
market makers uniformly with respect 19b–4(f)(6)(iii) 36 permits the sec.gov. Please include File Number SR–
to permissible order types. Further, this Commission to designate a shorter time GEMX–2018–01 on the subject line.
rule change will align the system if such action is consistent with the
Paper Comments
functionality with the rule text to reflect protection of investors and the public
the types of orders a Market Maker in interest. The Exchange has asked the • Send paper comments in triplicate
both appointed and non-appointed Commission to waive the 30-day to Brent J. Fields, Secretary, Securities
options class may submit. The current operative delay so that the proposal may and Exchange Commission, 100 F Street
rule text is not accurate. This rule filing become operative immediately upon NE, Washington, DC 20549–1090.
is intended to detail and align the rule filing. The Exchange states that the
text with the system functionality in the proposed rule change will permit All submissions should refer to File
current text of Rule 805(a) and (b). This Market Makers additional latitude to Number SR–GEMX–2018–01. This file
proposal will make clear which order conduct business on GEMX and number should be included on the
types a Market Maker may submit in effectively compete with other market subject line if email is used. To help the
both appointed and non-appointed makers on other options exchanges. The Commission process and review your
options classes. Exchange further states that the comments more efficiently, please use
proposed rule will detail and align the only one method. The Commission will
Further, Market Makers, unlike other rule text with the system functionality. post all comments on the Commission’s
market participants, are required to The Commission believes that waiver of internet website (http://www.sec.gov/
abide by certain quoting requirements, the 30-day operative delay is consistent rules/sro.shtml). Copies of the
in the options classes in which they are with the protection of investors and the submission, all subsequent
appointed pursuant to GEMX Rule 802, public interest. Accordingly, the amendments, all written statements
in order to maintain the status of a Commission hereby waives the with respect to the proposed rule
Market Maker.31 The Exchange also operative delay and designates the change that are filed with the
notes that GEMX Rule 805(b)(2) and (3) proposed rule change as operative upon Commission, and all written
restricts the number of orders that a filing.37
Market Maker may enter in an options communications relating to the
At any time within 60 days of the proposed rule change between the
class to which the Market Maker is not filing of the proposed rule change, the
appointed.32 The Exchange believes that Commission and any person, other than
Commission summarily may those that may be withheld from the
permitting a Market Maker to enter temporarily suspend such rule change if
additional order types, except Reserve public in accordance with the
it appears to the Commission that such provisions of 5 U.S.C. 552, will be
Orders, in their appointed options class action is: (i) Necessary or appropriate in
will permit Market Makers additional available for website viewing and
the public interest; (ii) for the protection printing in the Commission’s Public
latitude to conduct business on GEMX of investors; or (iii) otherwise in
and effectively compete with other Reference Room, 100 F Street NE,
furtherance of the purposes of the Act.
market makers on other options Washington, DC 20549, on official
If the Commission takes such action, the
exchanges. Commission shall institute proceedings business days between the hours of
to determine whether the proposed rule 10:00 a.m. and 3:00 p.m. Copies of the
C. Self-Regulatory Organization’s filing also will be available for
Statement on Comments on the should be approved or disapproved.
inspection and copying at the principal
Proposed Rule Change Received From IV. Solicitation of Comments office of the Exchange. All comments
Members, Participants, or Others received will be posted without change.
Interested persons are invited to
No written comments were either submit written data, views, and Persons submitting comments are
solicited or received. arguments concerning the foregoing, cautioned that we do not redact or edit
including whether the proposed rule personal identifying information from
III. Date of Effectiveness of the change is consistent with the Act. comment submissions. You should
Proposed Rule Change and Timing for Comments may be submitted by any of submit only information that you wish
Commission Action the following methods: to make available publicly. All
submissions should refer to File
Because the foregoing proposed rule
34 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– Number SR–GEMX–2018–01 and
change does not: (i) Significantly affect
the protection of investors or the public
4(f)(6)(iii) requires a self-regulatory organization to should be submitted on or before
give the Commission written notice of its intent to February 13, 2018.
interest; (ii) impose any significant file the proposed rule change, along with a brief
burden on competition; and (iii) become description and the text of the proposed rule For the Commission, by the Division of
operative for 30 days from the date on change, at least five business days prior to the date Trading and Markets, pursuant to delegated
of filing of the proposed rule change, or such
authority.38
sradovich on DSK3GMQ082PROD with NOTICES
which it was filed, or such shorter time shorter time as designated by the Commission. The
as the Commission may designate, it has Exchange has satisfied this requirement. Eduardo A. Aleman,
become effective pursuant to Section 35 17 CFR 240.19b–4(f)(6).
Assistant Secretary.
36 17 CFR 240.19b–4(f)(6)(iii).
19(b)(3)(A)(iii) of the Act 33 and [FR Doc. 2018–01087 Filed 1–22–18; 8:45 am]
37 For purposes only of waiving the 30-day
operative delay, the Commission has also BILLING CODE 8011–01–P
31 See note 28 above. considered the proposed rule’s impact on
32 See note 27 above.
efficiency, competition, and capital formation. See
33 15 U.S.C. 78s(b)(3)(A)(iii). 15 U.S.C. 78c(f). 38 17 CFR 200.30–3(a)(12).
VerDate Sep<11>2014 17:59 Jan 22, 2018 Jkt 244001 PO 00000 Frm 00129 Fmt 4703 Sfmt 9990 E:\FR\FM\23JAN1.SGM 23JAN1](https://thefederalregister.org/doc/83_FR_3250/page/4.svg)
Document Created: 2018-01-23 01:08:41
Document Modified: 2018-01-23 01:08:41
| 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 | 83 FR 3235 |
2024 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR