83 FR 33966 - Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend The Nasdaq Options Market LLC (“NOM”) Rules and Adopt a Zero Bid Options Rule
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 138 (July 18, 2018)
Federal Register Volume 83, Issue 138 (July 18, 2018)
| Page Range | 33966-33969 | |
| FR Document | 2018-15289 |
[Federal Register Volume 83, Number 138 (Wednesday, July 18, 2018)] [Notices] [Pages 33966-33969] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-15289] ======================================================================= ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-83623; File No. SR-NASDAQ-2018-051] Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend The Nasdaq Options Market LLC (``NOM'') Rules and Adopt a Zero Bid Options Rule July 12, 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 June 29, 2018, The Nasdaq Stock Market LLC (``Nasdaq'' or ``Exchange'') filed with the Securities and Exchange Commission (``SEC'' or ``Commission'') the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend The Nasdaq Options Market LLC (``NOM'') Rules at Chapter V, Section 3, entitled ``Trading Halts'' and Chapter VI, Section [[Page 33967]] 6, entitled ``Acceptance of Quotes and Orders.'' The text of the proposed rule change is available on the Exchange's website at http://nasdaq.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 proposes to amend Chapter V, Section 3, entitled ``Trading Halts'' to remove unnecessary rule text. The Exchange proposes to amend NOM Rules to adopt a zero bid options rule at Chapter VI, Section 6, entitled ``Acceptance of Quotes and Orders.'' The Exchange proposes to adopt a zero bid options rule on NOM within Chapter VI, Section 6, entitled ``Acceptance of Quotes and Orders'' and remove rule text which the Exchange believes is unnecessary. Each proposal is described in more detail below. Chapter V, Section 3 The Exchange proposes to amend Chapter V, Section 3(b), which currently provides, ``In the event Nasdaq Regulation determines to halt trading, all trading in the effected class or classes of options shall be halted. NOM shall disseminate through its trading facilities and over OPRA a symbol with respect to such class or classes of options indicating that trading has been halted, and a record of the time and duration of the halt shall be made available to vendors.'' The Exchange proposes to remove the words ``such class or'' because the Exchange only disseminates over OPRA a symbol with respect to classes of options to indicate a trading halt. By amending this rule, the Exchange will add more transparency as to how it disseminates information regarding trading halts. Chapter VI, Section 6 Today, the Exchange does not have a rule for the handling of options with no bid or zero bid options. The Exchange's handling of zero bid options on NOM is identical to the manner in which zero bid is handled on Phlx.\3\ The Exchange proposes to add this new rule to Chapter VI, Section 6(a)(3). The new rule would provide, ``In the case where the bid price for any options contract is $0.00, a market order accepted into the System to sell that series shall be considered a limit order to sell at a price equal to the minimum trading increment as defined in Chapter VI, Section 5. Orders will be placed on the limit order book in the order in which they were received by the System. With respect to market orders to sell which are submitted prior to the Opening and persist after the Opening, those orders are posted at a price equal to the minimum trading increment as defined in Chapter VI, Section 5.'' --------------------------------------------------------------------------- \3\ See Phlx Rule 1035. --------------------------------------------------------------------------- The Exchange intends to accept and convert market orders to sell allowing them an equal opportunity to trade if interest should arrive in the case of a no bid option. The Exchange notes that the orders would rest on the Order Book at the minimum price increment. The Exchange notes market orders ``accepted into the System'' would be converted to account for market orders that may not be accepted into the System due to Limit Up-Limit Down restrictions, which may prevent the market order from being accepted.\4\ Only after acceptance into the System will market orders be treated as a sell limit order at a price equal to the minimum trading increment. --------------------------------------------------------------------------- \4\ The Limit Up-Limit Down requirements must be met first before the proposed rule would apply. --------------------------------------------------------------------------- Further, the Exchange proposes to add rule text which provides ``Orders will be placed on the limit order book in the order in which they were received by the System.'' \5\ The Exchange proposes to note that with respect to market orders to sell in zero bid options, which are submitted prior to the Opening Process \6\ and persist after the Opening Process, those orders are posted at a price equal to the minimum trading increment as defined in Chapter VI, Section 5.\7\ The Exchange's proposed rule will provide market participants with greater insight into the handling of orders where there is a zero bid. The Exchange believes that this proposed amendment will accurately describe the manner in which a zero-bid options series operates within the System both before and after the Opening Process. --------------------------------------------------------------------------- \5\ The time of receipt for an order is the time such message is processed by the System. \6\ The Exchange's Opening Process is described in Rule 701. \7\ Chapter VI, Section 5, entitled ``Minimum Increments'' provides for the minimum increments of trading. --------------------------------------------------------------------------- The Exchange also proposes to amend Chapter VI, Section 6(b) which currently states, ``All System orders entered by Participants directing or permitting routing to other market centers shall be routed for potential display and/or execution as set forth in Section 11 below. Routing shall be available in System securities as well as Non-System securities listed on other exchanges.'' The Exchange proposes to remove ``Routing shall be available in System securities as well as Non-System securities listed on other exchanges.'' The Exchange defines ``System Securities'' at Chapter VI, Section 1(b) of the NOM Rules and defines ``Non-System Securities'' as all other options. Nasdaq originally programmed the System to differentiate between System Securities and Non-System Securities.\8\ Nasdaq stated in that filing it would accept orders in Non-System Securities for routing but will not execute these orders in the System.\9\ In 2012, NOM's rule were amended to provide that routing is limited to System Securities. System Securities are all options that are currently trading on NOM pursuant to Chapter IV.\10\ Further, the Subsequent Filing provided that only System Securities are traded on NOM pursuant to Chapter IV. All other options are Non-System Securities.\11\ The Subsequent filing noted that at one time, NOM offered routing of Non-System Securities but has not offered such routing since November 30, 2011. Finally, the Subsequent Filing noted that this routing feature was rarely used and was discontinued. Currently, NOM only routes securities that are listed on NOM. The Exchange proposes to [[Page 33968]] remove this sentence related to routing which the Exchange believes should have been removed in connection with the Subsequent Filing. --------------------------------------------------------------------------- \8\ Securities Exchange Act Release No. 57478 (March 12, 2008), 73 FR 14521 (March 18, 208) (SR-NASDAQ-2007-004 and SR-NASDAQ-2007- 080) (Notice of Filing of Amendment No. 2 to a Proposed Rule Change and Order Granting Accelerated Approval to a Proposed Rule Change, as Amended, To Establish Rules Governing the Trading of Options on the NASDAQ Options Market; Order Approving a Proposed Rule Change Relating to the LLC Agreement Establishing the NASDAQ Options Market LLC and Delegation Agreement Delegating to NOM LLC the Authority To Operate the NASDAQ Options Market; Order Granting an Application of The NASDAQ Stock Market LLC for an Exemption Pursuant to Section 36(a) of the Exchange Act from the Requirements of Section 19(b) of the Exchange Act; and Order Granting an Exemption for the NASDAQ Options Market LLC from Section 11A(b) of the Exchange Act.) \9\ Id. \10\ Securities Exchange Act Release No. 67301 (June 28, 2012), 77 FR 39774 (July 5, 2012) (SR-Nasdaq-2012-077) (``Subsequent Filing''). \11\ Id. --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Securities Exchange Act of 1934,\12\ in general, and furthers the objectives of Section 6(b)(5) of the Act,\13\ in particular, in that it is designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism for a free and open market and a national market system, and, in general, to protect investors and the public interest. --------------------------------------------------------------------------- \12\ 15 U.S.C. 78f(b). \13\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- Chapter V, Section 3 The Exchange is providing greater transparency as to the manner in which the Exchange disseminates information over OPRA during a trading halt. The Exchange believes that this rule text is consistent with the Act and the protection of investors and the public interest because it brings greater clarity as to what type of information is provided during a halt. Chapter VI, Section 6 The Exchange's proposal to adopt a zero bid rule is consistent with the Act and designed to promote just and equitable principles of trade and to protect investors and the public interest by adopting text which describes the handling of zero-bid options. The Exchange is treating all market orders to sell in zero bid options in the same fashion by converting all those orders, provided that the Exchange's disseminated bid price in such option is zero for an option listed only on the Exchange or, for an option listed on multiple exchanges and the disseminated NBBO includes a bid price of zero in the series. Market orders to sell in zero bid options will be placed on the limit order book in the order in which they were received by the System. The Exchange desires to prevent members from submitting market orders to sell in no bid series, which would execute at a price of $0.00. The Exchange believes that the proposed rule will achieve this objective and continue to permit the Exchange to execute orders within its System at prices that reflect some value. Adding rule text regarding market orders to sell in zero bid options submitted prior to the Opening Process and persisting after the Opening Process is consistent with the Act because it provides more transparency as to the operation of this rule and as to how those market orders to sell in zero bid options will be handled by the System. Further, the Exchange believes that memorializing its current practice within the rule text will bring more clarity to the manner in which the zero bid rule operates to the benefits of all market participants. Finally, the Exchange believes removing language concerning Non- System Securities in Chapter VI, Section 6(b) is consistent with the Act because it avoids confusion by removing language which should have been removed with the 2006 filing which distinguished System and Non- System Securities. The language discusses a distinction which was removed from the rules in 2012.\14\ --------------------------------------------------------------------------- \14\ See note 10 above. --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,\15\ the Exchange does not believe that the proposed rule change will impose any burden on intermarket or intra-market competition that is not necessary or appropriate in furtherance of the purposes of the Act. --------------------------------------------------------------------------- \15\ 15 U.S.C. 78f(b)(8). --------------------------------------------------------------------------- Chapter V, Section 3 The Exchange's proposal to amend Chapter V, Section 3(b) to more specifically describe the information disseminated during a trading halt do not impose an undue burden on competition because the amendments add more transparency to the trading halt rule. Chapter VI, Section 6 The Exchange's proposal to adopt a zero bid options rule does not impose an undue burden on competition because the proposed rule change will continue to apply uniformly for all market participants who enter market orders to sell into the System when there is a zero-bid options. Finally, the removal of language concerning Non-System Securities in Chapter VI, Section 6(b) does not impose an undue burden on competition because this language references an obsolete functionality in the rulebook that was removed from the rules in 2012.\16\ --------------------------------------------------------------------------- \16\ See note 10 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) of the Act \17\ and Rule 19b- 4(f)(6) thereunder.\18\ --------------------------------------------------------------------------- \17\ 15 U.S.C. 78s(b)(3)(A). \18\ 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 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 pursuant to Rule 19b-4(f)(6) under the Act \19\ normally does not become operative for 30 days after the date of its filing. However, Rule 19b-4(f)(6)(iii) \20\ 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 requested that the Commission waive the 30-day operative delay so that the proposed rule change may become operative upon filing. The Exchange states that waiver of the operative delay would allow the Exchange to update its rules to immediately reflect the operation of zero bid series on NOM. Therefore, 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 operative upon filing.\21\ --------------------------------------------------------------------------- \19\ 17 CFR 240.19b-4(f)(6). \20\ 17 CFR 240.19b-4(f)(6)(iii). \21\ 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). --------------------------------------------------------------------------- At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule change should be approved or disapproved. [[Page 33969]] 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-NASDAQ-2018-051 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-NASDAQ-2018-051. 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-NASDAQ-2018-051, and should be submitted on or before August 8, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\22\ --------------------------------------------------------------------------- \22\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-15289 Filed 7-17-18; 8:45 am] BILLING CODE 8011-01-P
![33966 Federal Register / Vol. 83, No. 138 / Wednesday, July 18, 2018 / Notices
international mail as market dominant However, the Postal Service filed the Commission (Public Representative)
or competitive.11 documents in support of its claims of to represent the interests of the general
The Commission found the Postal competition for the first time when it public in this proceeding.
Service’s arguments for exceptional filed its Motion for Reconsideration. Additional information may be
treatment of inbound international mail Motion for Reconsideration, accessed via the Commission’s website
as neither market dominant nor Attachments 1–4. Despite these claims at http://www.prc.gov.
competitive unpersuasive and of competition, the Postal Service
IV. Ordering Paragraphs
inconsistent with section 3642.12 The acknowledged that the Inbound Letter
Commission concluded, ‘‘[h]ad Post product is on the market dominant It is ordered:
Congress intended to exempt inbound product list and that it has not requested 1. The Commission hereby establishes
international mail from the requirement to transfer all or part of the Inbound Docket No. PI2018–1 to review issues
that all products be categorized as either Letter Post product to the competitive related to the classification of the
market dominant or competitive, it product list. Motion for Reconsideration Inbound Letter Post product and parts
would have done so explicitly, as it did at 6. thereof.
by specifically exempting experimental In its Motion for Reconsideration, the 2. Pursuant to 39 U.S.C. 505, James
products from the requirements of Postal Service stated that it explored the Waclawski is designated as an officer of
section 3642.’’ Order No. 43 at 78 potential transfer of Inbound Letter Post the Commission (Public Representative)
(footnote omitted). The Commission small packets from the market dominant to represent the interests of the general
found that the PAEA unambiguously to the competitive products list. Id. public in this proceeding.
requires the Commission to classify However, the Postal Service stated that 3. The Secretary shall arrange for
inbound international mail products as one obstacle to transferring all or part of publication of this order in the Federal
either market dominant or competitive. the Inbound Letter Post product from Register.
Id. Consistent with section 3621, the the market dominant product list to the By the Commission.
Commission classified Inbound Letter competitive product list relates to the
Stacy L. Ruble,
Post as a market dominant product. Id. ‘‘inability to separate Inbound Letter
Post that is subject to the Private Secretary.
at 85. [FR Doc. 2018–15284 Filed 7–17–18; 8:45 am]
Express Statutes [(PES)] from Inbound
III. Claims of Competition and Letter Post that is not subject to the BILLING CODE 7710–FW–P
Commission Action PES.’’ Id.
In Docket Nos. R2018–1 and Docket These claims raised the question of
ACR2017, the Postal Service repeatedly whether Inbound Letter Post should be SECURITIES AND EXCHANGE
claimed that Inbound Letter Post is wholly or partially transferred from the COMMISSION
subject to ‘‘considerable,’’ ‘‘substantial,’’ market dominant product list to the
[Release No. 34–83623; File No. SR–
and ‘‘intense’’ competition, especially competitive product list. Rather than NASDAQ–2018–051]
Inbound Letter Post small packets.13 attempt to address these issues in
Docket No. ACR2017, the Commission Self-Regulatory Organizations; The
11 Docket No. RM2007–1, Initial Comments of the concluded that the best course of action Nasdaq Stock Market LLC; Notice of
United States Postal Service in Response to Order is to initiate a separate proceeding to Filing and Immediate Effectiveness of
No. 26, September 24, 2007, at 13–22. evaluate these issues, including the non-
12 Docket No. RM2007–1, Order Establishing
Proposed Rule Change To Amend The
public attachments the Postal Service Nasdaq Options Market LLC (‘‘NOM’’)
Ratemaking Regulations for Market Dominant and
Competitive Products, October 29, 2007, at 78 provided with its Motion for Rules and Adopt a Zero Bid Options
(Order No. 43). Reconsideration. Rule
13 See Docket No. ACR2017, United States Postal Accordingly, the Commission
Service Motion for Reconsideration of Order No. establishes the instant proceeding to July 12, 2018.
4451, April 6, 2018, at 4 (Motion for examine the classification of the Pursuant to Section 19(b)(1) of the
Reconsideration) (‘‘Inbound Letter Post is subject to
substantial competition.’’); id. at 8–9 (cited filings Inbound Letter Post product. The Securities Exchange Act of 1934
in other Commission proceedings that allege the Commission is issuing a Commission (‘‘Act’’),1 and Rule 19b–4 thereunder,2
private sector competes in the Inbound Letter Post Information Request (CIR) concurrently notice is hereby given that on June 29,
market); id.at 10 (‘‘the vast majority of Inbound with this Order. Once a sufficient record 2018, The Nasdaq Stock Market LLC
Letter Post mail faces substantial competition’’); id.
at 12–13 (‘‘existing market research regarding has been developed, the Commission (‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the
inbound package volume, which is included in will issue a procedural schedule Securities and Exchange Commission
Nonpublic Attachment 1, illustrates the intense inviting comment. (‘‘SEC’’ or ‘‘Commission’’) the proposed
competition for Inbound Letter Post faced by the Pursuant to 39 U.S.C. 505, James rule change as described in Items I and
Postal Service and foreign postal operators.’’
(footnote omitted)); Docket No. ACR2017, Response Waclawski is designated as an officer of II below, which Items have been
of the United States Postal Service to Order No. prepared by the Exchange. The
4409, February 23, 2018, at 5 (small packets letter and flat mail (P and G Format) can be subject Commission is publishing this notice to
‘‘already face considerable competition today.’’ to competition as well.’’); id. at 3 (‘‘The Postal solicit comments on the proposed rule
(footnote omitted)); id. at 6 (‘‘the Postal Service Service is just one of the participants operating in
operates in a competitive market for inbound the competitive market for inbound international change from interested persons.
international shipping, which includes inbound shipping, which includes inbound small packets
small packets containing merchandise.’’ (footnote containing merchandise.’’); Docket No. R2018–1,
I. Self-Regulatory Organization’s
omitted)); id. at 6 n.13 (‘‘Not only are Inbound United States Postal Service Answer in Opposition Statement of the Terms of Substance of
Letter Post packets subject to considerable to U.S. Chamber of Commerce Motion to Unseal the Proposed Rule Change
amozie on DSK3GDR082PROD with NOTICES1
competition, but bulk international letter and flat Library Reference and Motion to Request Issuance
mail can be subject to competition as well.’’); of Information Request, October 23, 2017, at 4 The Exchange proposes to amend The
Docket No. ACR2017, United States Postal Service (‘‘ ‘inbound letter post . . . face[s] significant Nasdaq Options Market LLC (‘‘NOM’’)
Notice of Filing Nonpublic Folder USPS–FY17– competition from private sector competitors and Rules at Chapter V, Section 3, entitled
NP40 and Application for Nonpublic Treatment, Extraterritorial Offices of Exchange[.]’ The
February 14, 2018, Attachment at 2 (CHIR No. 15 competitive nature of the international market,
‘‘Trading Halts’’ and Chapter VI, Section
Application for Non-Public Treatment) (‘‘Not only particularly with respect to . . . inbound letter post
1 15 U.S.C. 78s(b)(1).
are Inbound Letter Post packets (E Format) subject packets weighing 4.4 pounds or less, is well
to considerable competition, but bulk international established.’’ (footnote omitted)). 2 17 CFR 240.19b–4.
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![Federal Register / Vol. 83, No. 138 / Wednesday, July 18, 2018 / Notices 33969
IV. Solicitation of Comments For the Commission, by the Division of a specific option class.6 The information
Trading and Markets, pursuant to delegated would be verbally provided to
Interested persons are invited to authority.22 Participants for no fee, on a best efforts
submit written data, views, and Eduardo A. Aleman, basis, and would be for advisory
arguments concerning the foregoing, Assistant Secretary. purposes only.7 All BOX Book
including whether the proposed rule [FR Doc. 2018–15289 Filed 7–17–18; 8:45 am] information would be provided on an
change is consistent with the Act. BILLING CODE 8011–01–P anonymous basis.8
Comments may be submitted by any of Under the proposed rule, Floor
the following methods: Brokers would inquire with an Options
SECURITIES AND EXCHANGE Exchange Official or his or her designee,
Electronic Comments COMMISSION and all other Participants would inquire
• Use the Commission’s internet with BOX’s Market Operations Center.9
comment form (http://www.sec.gov/ [Release No. 34–83624; File No. SR–BOX– Participants would be required to
rules/sro.shtml); or 2018–18] request this information each time and
the Exchange would not provide
• Send an email to rule-comments@ Self-Regulatory Organizations; BOX continuous updated information.10 The
sec.gov. Please include File Number SR– Options Exchange LLC; Order Exchange represents that an Options
NASDAQ–2018–051 on the subject line. Granting Approval of a Proposed Rule Exchange Official will provide the
Change To Adopt IM–7130–1 to Rule requested information when doing so
Paper Comments
7130 does not interfere with their regulatory
• Send paper comments in triplicate July 12, 2018.
responsibilities.11
to Secretary, Securities and Exchange The Exchange believes that the
Commission, 100 F Street NE, I. Introduction proposed rule change will provide
Washington, DC 20549–1090. On May 16, 2018, BOX Options Participants greater clarity on the
Exchange LLC (the ‘‘Exchange’’ or composition and availability of liquidity
All submissions should refer to File
‘‘BOX’’) filed with the Securities and on the BOX Book.12 With respect to the
Number SR–NASDAQ–2018–051. This BOX Trading Floor, the Exchange
file number should be included on the Exchange Commission (‘‘Commission’’),
pursuant to Section 19(b)(1) of the believes that the availability of this
subject line if email is used. To help the information will lead to increased
Commission process and review your Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a interaction with the BOX Book, because
comments more efficiently, please use Floor Brokers will be aware of the
proposed rule change to adopt IM–
only one method. The Commission will liquidity available on the BOX Book that
7130–1 to BOX Rule 7130 to provide
post all comments on the Commission’s could interact with their Qualified Open
certain BOX Book 3 information to
internet website (http://www.sec.gov/ Participants 4 upon request. The Outcry Order (‘‘QOO Order’’) 13 and
rules/sro.shtml). Copies of the proposed rule change was published for may choose to use such liquidity when
submission, all subsequent comment in the Federal Register on executing orders from the Trading Floor
amendments, all written statements May 31, 2018.5 The Commission or using a separate order to sweep that
with respect to the proposed rule received no comments on the proposed interest.14
change that are filed with the rule change. This order approves the III. Discussion and Commission
Commission, and all written proposed rule change. Findings
communications relating to the
proposed rule change between the II. Description of the Proposed Rule After careful review, the Commission
Commission and any person, other than Change finds that the proposed rule change is
those that may be withheld from the BOX proposes to adopt new IM– consistent with the requirements of the
public in accordance with the 7130–1 to Rule 7130 to provide that, Act and the rules and regulations
provisions of 5 U.S.C. 552, will be upon request, the Exchange may make thereunder applicable to a national
available for website viewing and available to a Participant the amount of
6 See proposed BOX Rule IM–7130–1. ‘‘Public
printing in the Commission’s Public any priority interest on the BOX Book.
Customer’’ means a person that is not a broker or
Reference Room, 100 F Street NE, For purposes of the proposed new rule, dealer in securities. See BOX Rule 100(a)(52).
Washington, DC 20549 on official the term ‘‘priority interest’’ means the 7 See proposed BOX Rule IM–7130–1.
business days between the hours of number of Public Customer contracts 8 See id.
10:00 a.m. and 3:00 p.m. Copies of the and Non-Public Customer contracts that 9 See id. The term ‘‘Market Operations Center’’ or
filing also will be available for are ranked ahead of such Public ‘‘MOC’’ means the BOX Market Operations Center,
Customer contracts at a given price for which provides market support for Options
inspection and copying at the principal Participants during the trading day. See BOX Rule
office of the Exchange. All comments 100(a)(32).
22 17
CFR 200.30–3(a)(12). 10 See proposed BOX Rule IM–7130–1.
received will be posted without change. 1 15
U.S.C. 78s(b)(1). 11 See Notice, supra note 5, at 25080 n.5.
Persons submitting comments are 2 17 CFR 240.19b–4. 12 See Notice, supra note 5, at 25080.
cautioned that we do not redact or edit 3 The term ‘‘BOX Book’’ means the electronic 13 A QOO Order has two sides; the initiating side
personal identifying information from book of orders on each single option series and the contra-side. The initiating side is the order
comment submissions. You should maintained by the BOX Trading Host. See BOX which must be filled in its entirety. The contra-side
amozie on DSK3GDR082PROD with NOTICES1
Rule 100(a)(10). must guarantee the full size of the initiating side of
submit only information that you wish 4 The term ‘‘Participant’’ means a firm, or the QOO Order and may provide a book sweep size
to make available publicly. All organization that is registered with the Exchange as provided in BOX Rule 7600(h). See BOX Rule
submissions should refer to File pursuant to the BOX Rule 2000 Series for purposes 7600(a)(1). The initiating side of a QOO Order will
Number SR–NASDAQ–2018–051, and of participating in options trading on BOX as an execute against Public Customer Orders on the BOX
‘‘Order Flow Provider’’ or ‘‘Market Maker.’’ See Book and any other orders or quotes ranked ahead
should be submitted on or before BOX Rule 100(a)(41). of such Public Customer Orders at the execution
August 8, 2018. 5 See Securities Exchange Act Release No. 83318 price first. See BOX Rule 7600(d)(2).
(May 24, 2018), 83 FR 25079 (‘‘Notice’’). 14 See Notice, supra note 5, at 25080.
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Document Created: 2018-11-06 10:25:15
Document Modified: 2018-11-06 10:25:15
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| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| Section | Notices | |
| FR Citation | 83 FR 33966 |
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