83 FR 34899 - Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing of Amendment No. 1, and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 1, To Extend the Applicability of the Floor Broker Management System and the Snapshot Functionality to Registered Options Traders and Specialists
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 141 (July 23, 2018)
Federal Register Volume 83, Issue 141 (July 23, 2018)
| Page Range | 34899-34901 | |
| FR Document | 2018-15647 |
[Federal Register Volume 83, Number 141 (Monday, July 23, 2018)] [Notices] [Pages 34899-34901] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-15647] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-83656; File No. SR-Phlx-2018-40] Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing of Amendment No. 1, and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 1, To Extend the Applicability of the Floor Broker Management System and the Snapshot Functionality to Registered Options Traders and Specialists July 17, 2018. I. Introduction On May 24, 2018, Nasdaq PHLX LLC (``Phlx'' or ``Exchange'') filed with the Securities and Exchange Commission (``Commission''), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to extend the applicability of the Floor Broker Management System and the Snapshot functionality to Registered Options Traders (``ROTS'') \3\ and Specialists.\4\ The proposed rule change was published for comment in the Federal Register on June 4, 2018.\5\ On June 4, 2018, the Exchange filed Amendment No. 1 to the proposed rule change.\6\ The Commission received no comment letters on the proposed rule change. This order provides notice of filing of Amendment No. 1 and approves the proposal, as modified by Amendment No. 1, on an accelerated basis. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ See Phlx Rule 1014(b) (defining a ROT). \4\ See Phlx Rule 1020 (describing the functions of a Specialist). \5\ See Securities Exchange Act Release No. 83339 (May 29, 2018), 83 FR 25725 (``Notice''). \6\ In Amendment No. 1 the Exchange: (1) Re-numbered proposed Phlx Rule 1081 as proposed Phlx Rule 1085 and (2) changed the proposed cross-references in proposed Commentary .06 to Phlx Rule 1080 and in Options Floor Procedure Advices and Order & Decorum Regulations (``Floor Advice'') A-9 from Phlx Rule 1081 to Phlx Rule 1085. Amendment No. 1 is available at https://www.sec.gov/comments/sr-phlx-2018-40/phlx201840-3767632-162689.pdf). --------------------------------------------------------------------------- II. Description of the Proposal Currently, ROTs and Specialists executing orders in the trading crowd are required to record such orders and related execution details on paper trading tickets.\7\ ROTS and Specialists must then provide those matched trade tickets to an Exchange Data Entry Technician (``DET''), who manually enters the information written on the trade tickets into the Exchange's electronic trading system.\8\ In contrast, unless one of five exceptions applies, Floor Brokers are required to enter orders originating in the trading crowd using the Exchange's electronic order entry system--the ``Floor Broker Management System'' \9\--and are not permitted to execute orders in the trading crowd. The Exchange proposes to change the order entry process for ROTS and Specialist by requiring them to utilize the same electronic order entry system that is currently used by Floor Brokers. To accomplish this transition, the Exchange proposes to change the name of its electronic order entry system from the ``Floor Broker Management System'' to the ``Floor Based Management System'' (``FBMS'') to reflect its expanded applicability to all members that operate on the Exchange's trading floor--namely, Floor Brokers, ROT, and Specialists.\10\ In addition, the Exchange proposes to apply the same general obligations it currently imposes upon Floor Brokers regarding orders on the trading floor to ROTS and Specialists.\11\ The Exchange also proposes to extend FBMS' Snapshot functionality to ROTs and Specialists.\12\ To effectuate these changes, the Exchange proposes several amendments and additions to its Rules and Floor Advices.\13\ --------------------------------------------------------------------------- \7\ See Notice, supra note 5, at 25726. \8\ See id. \9\ Phlx Rule 1000(f)(iii). \10\ See Notice, supra note 5, at 25726. \11\ See id. at 25725. \12\ See id. at 25726. \13\ A more detailed description of the proposal appears in the Notice and in Amendment No. 1. --------------------------------------------------------------------------- Specifically, the Exchange proposes to amend Phlx Rule 1000(f) to require ROTs and Specialists to execute orders utilizing FBMS and to prohibit ROTs and Specialists from executing orders in the Exchange's options trading crowd, unless one of five exceptions applies.\14\ These exceptions are listed in Phlx Rule 1000(f)(iii)(A)-(E) and would permit a Floor Broker, ROT or Specialist to execute an order in the trading crowd if: (1) There is a problem with the Exchange's systems; (2) the member is executing an order pursuant to Phlx Rule 1059 (``Accommodation Transactions'') or Phlx Rule 1079 (``FLEX Index, Equity, and Currency Options''); (3) the transaction involves a multi- leg order with more than 15 legs; (4) the transaction involves certain split-price orders that, due to FBMS system limitations, require manual calculation; or (5) the member elects to use of the Snapshot functionality to provisionally execute certain designated categories of trades, as described below.\15\ --------------------------------------------------------------------------- \14\ See Notice, supra note 5, at 25726. \15\ See id. --------------------------------------------------------------------------- With respect to Snapshot, the Exchange proposes to allow ROTs and Specialists, like Floor Brokers, to use Snapshot to provisionally execute, in the options trading crowd, multi-leg orders and simple orders in options on exchange-traded funds (``ETFs'') that are included in the Options Penny Pilot, subject to the procedures for and the limitations to the use of Snapshot.\16\ The Exchange represents that it does not anticipate that the use of Snapshot by ROTs or Specialists will pose any increased or unique risks relative to its current use by Floor Brokers.\17\ Therefore, the Exchange proposes to utilize the same methods it currently uses to surveil Floor Brokers' use of Snapshot to also monitor ROTs' and Specialists' uses of the Snapshot functionality.\18\ --------------------------------------------------------------------------- \16\ See id. These procedures and limitations regarding the use of Snapshot are currently set forth in Phlx Rule 1063(e)(v), but the Exchange proposes to move them to a new Phlx Rule 1069, where they will apply broadly to ``members'' rather than only to Floor Brokers. \17\ See id. \18\ See id. at 25726-27. --------------------------------------------------------------------------- To implement the renaming of FBMS and the extension of FBMS (including its Snapshot functionality) to ROTs and Specialists, the Exchange also proposes to make changes to its Rules and Floor Advices, as well as to update multiple cross-references within its Rules and Floor Advices, so that its current requirements regarding the use of FBMS will apply to ROTS and Specialists.\19\ --------------------------------------------------------------------------- \19\ See id. at 25726-28; Amendment No. 1, supra note 6. The Exchange is proposing minor alterations to its Rules that presently govern the use of FBMS by Floor Brokers to, among other things, account for the fact that ROTS and Specialists negotiate orders on the floor for their own account and do not represent orders on behalf of others. See Notice, supra note 5, at 25728. In addition, the Exchange is proposing several changes to remove obsolete language from its Rules and make conforming changes to its Rules. --------------------------------------------------------------------------- [[Page 34900]] The Exchange represents that it will not require ROTs or Specialists to use FBMS until one month after the date on which the Commission approves the Exchange's proposal.\20\ The Exchange will notify Members via an Options Trader Alert, to be posted on the Exchange's website, at least seven calendar days prior to the date when FBMS will be available for use by ROTs and Specialists.\21\ The alert will also contain the mandatory start date.\22\ --------------------------------------------------------------------------- \20\ See Notice, supra note 5, at 25728. See also Amendment No. 1, supra note 6. \21\ See id. \22\ See id. --------------------------------------------------------------------------- III. Discussion and Commission Findings After careful review, the Commission finds that the proposed rule change, as modified by Amendment No. 1, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.\23\ In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act,\24\ which requires, among other things, that the rules of a national securities exchange be designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities and, in general, to protect investors and the public interest, and not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. --------------------------------------------------------------------------- \23\ In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). \24\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Commission notes that the Exchange's rules currently require Floor Brokers to execute transactions through FBMS and prohibit Floor Brokers from executing orders in the trading crowd unless an exception applies.\25\ The Commission also notes that use of the Snapshot functionality is one of the current exceptions set forth in Phlx Rule 1000(f), which allows Floor Brokers to provisionally execute, in the options trading crowd (as opposed to through FBMS), multi-leg orders and simple orders in options on ETFs that are included in the Options Penny Pilot.\26\ --------------------------------------------------------------------------- \25\ See Phlx Rule 1000(f). \26\ See Phlx Rule 1000(f)(iii)(E). --------------------------------------------------------------------------- According to the Exchange, the manual order entry process that ROTs and Specialists currently use has become outmoded in comparison to its electronic order entry process.\27\ Specifically, the Exchange represents that because the manual process is less efficient, manual trades are often reported with a ``Late'' or ``Out of Sequence'' trade condition.\28\ The Exchange further represents that, compared to FBMS, the current manual process is more prone to human error and it does not establish an immediate audit trail for orders.\29\ The Exchange notes that its proposed extension of FBMS to ROTs and Specialists is intended to address these inefficiencies, mitigate risks, and improve the Exchange's compliance record by establishing an immediately available audit trail.\30\ Moreover, the Exchange believes that requiring all members to use the same electronic order entry system (and to do so subject to the same general conditions, requirements, and exceptions) will help ensure fair and equal treatment for all members that operate on the trading floor.\31\ Further, the Exchange represents that it does not anticipate any unique risks associated with ROTs and Specialists use of FBMS and therefore believes that the current exceptions and conditions set forth in Phlx Rule 1000(f) should apply without modification to ROTs and Specialists. --------------------------------------------------------------------------- \27\ See Notice, supra note 5, at 25726. \28\ See id. \29\ See id. \30\ See id. at 25726 and 25728. \31\ See id. at 25728. --------------------------------------------------------------------------- For example, according to the Exchange, FBMS' Snapshot functionality was designed to mitigate the risk that, when engaging in floor-based trading, the market for multi-leg orders and simple orders in options on ETFs that are included in the Options Penny Pilot may move faster than a Floor Broker would be able to manually enter and submit a paper trade ticket on a trade consummated in the trading crowd.\32\ According to the Exchange, ROTs and Specialists are subject to this same risk and the Exchange does not perceive any unique risks or concerns associated with the use of Snapshot by ROTs and Specialists that would necessitate changes to, or restrictions on, market makers' use of the Snapshot functionality.\33\ Therefore, the Exchange believes the Snapshot functionality is appropriate for use by ROTs and Specialists, notwithstanding the fact that ROTS and Specialists trade on a proprietary basis, rather than an agency basis like Floor Brokers.\34\ The Exchange represents that it will monitor ROTs' and Specialists' use of the Snapshot feature using the same methods that it currently uses to surveil Floor Brokers' use of Snapshot.\35\ --------------------------------------------------------------------------- \32\ See id. at 25726. \33\ See id. at 25726 and 25729. \34\ See id. at 25726. \35\ See id. at 25726-27. --------------------------------------------------------------------------- The Commission notes that proposed Phlx Rule 1069(a)(i)(B) will prohibit all members from triggering the Snapshot feature for the purpose of obtaining favorable, or avoiding unfavorable, priority or trade-through conditions. In addition, the Exchange represents that its surveillance staff will monitor ROTs and Specialists to determine whether they exhibit patterns of using Snapshot excessively, including in circumstances where the nature of the orders or movements in the markets for such orders do not reasonably warrant the use of Snapshot or the full extent of its use.\36\ The Exchange will compare the times of provisional executions in the crowd that Snapshot captures with the records of such times that Options Exchange Officials capture to ensure accuracy.\37\ The Exchange will also surveil for patterns of orders subject to Snapshots that ROTs and Specialists abandon without submitting them to the Trading System for final execution.\38\ The Commission notes that these measures were designed to ensure that Snapshot operates, and is used by Floor Brokers, in a manner that is consistent with the Act and Phlx's Rules and notes that these measuer should similarly ensure that ROTs and Specialists electing to use the Snapshot functionality will do so in a manner that is consistent with the Act and Phlx's Rules.\39\ --------------------------------------------------------------------------- \36\ See id. at 25727 n.7. \37\ See id. \38\ See id. \39\ See Securities Exchange Act Release No. 81980 (October 30, 2017), 82 FR 51313 (November 3, 2017) (SR-Phlx-2017-34) (approving the Snapshot functionality as an exception to Phlx Rule 1000(f)). --------------------------------------------------------------------------- For the foregoing reasons, the Commission finds that the proposed rule change, as modified by Amendment No. 1, is consistent with Section 6(b)(5) of the Act and the rules and regulations thereunder applicable to national securities exchanges. IV. Solicitation of Comments on Amendment No. 1 Interested persons are invited to submit written data, views, and arguments concerning whether Amendment No. 1 to 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 [[Page 34901]] Send an email to [email protected]. Please include File No. SR-Phlx-2018-40 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 No. SR-Phlx-2018-40. 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 such filing will also 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 No. SR-Phlx-2018-40 and should be submitted on or before August 13, 2018. V. Accelerated Approval of Proposed Rule Change, as Modified by Amendment No. 1 The Commission finds good cause to approve the proposed rule change, as modified by Amendment No. 1, prior to the thirtieth day after the date of publication of notice of the amended proposal in the Federal Register. As described above, in Amendment No. 1, the Exchange (a) re-numbered proposed Phlx Rule 1081 as proposed Phlx Rule 1085 and (b) changed the proposed cross-references in proposed Commentary .06 to Phlx Rule 1080 and in Floor Advice A-9 from Phlx Rule 1081 to Phlx Rule 1085.\40\ The Commission believes that Amendment No. 1 simply modified certain proposed rule numbering and cross-referencing and does not raise novel regulatory issues. Accordingly, the Commission finds good cause, pursuant to Section 19(b)(2) of the Act,\41\ to approve the proposed rule change, as modified by Amendment No. 1, on an accelerated basis. --------------------------------------------------------------------------- \40\ See Amendment No. 1, supra note 6. \41\ 15 U.S.C. 78s(b)(2). --------------------------------------------------------------------------- VI. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,\42\ that the proposed rule change (SR-Phlx-2018-40), as modified by Amendment No. 1, be, and it hereby is, approved on an accelerated basis. --------------------------------------------------------------------------- \42\ Id. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\43\ --------------------------------------------------------------------------- \43\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-15647 Filed 7-20-18; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 83, No. 141 / Monday, July 23, 2018 / Notices 34899
cautioned that we do not redact or edit comment letters on the proposed rule unless one of five exceptions applies.14
personal identifying information from change. This order provides notice of These exceptions are listed in Phlx Rule
comment submissions. You should filing of Amendment No. 1 and 1000(f)(iii)(A)–(E) and would permit a
submit only information that you wish approves the proposal, as modified by Floor Broker, ROT or Specialist to
to make available publicly. All Amendment No. 1, on an accelerated execute an order in the trading crowd if:
submissions should refer to File basis. (1) There is a problem with the
Number SR-NASDAQ-2018–052 and Exchange’s systems; (2) the member is
II. Description of the Proposal executing an order pursuant to Phlx
should be submitted on or before
August 13, 2018. Currently, ROTs and Specialists Rule 1059 (‘‘Accommodation
For the Commission, by the Division of executing orders in the trading crowd Transactions’’) or Phlx Rule 1079
Trading and Markets, pursuant to delegated are required to record such orders and (‘‘FLEX Index, Equity, and Currency
authority.16 related execution details on paper Options’’); (3) the transaction involves a
Eduardo A. Aleman, trading tickets.7 ROTS and Specialists multi-leg order with more than 15 legs;
Assistant Secretary. must then provide those matched trade (4) the transaction involves certain split-
[FR Doc. 2018–15645 Filed 7–20–18; 8:45 am] tickets to an Exchange Data Entry price orders that, due to FBMS system
Technician (‘‘DET’’), who manually limitations, require manual calculation;
BILLING CODE 8011–01–P
enters the information written on the or (5) the member elects to use of the
trade tickets into the Exchange’s Snapshot functionality to provisionally
SECURITIES AND EXCHANGE electronic trading system.8 In contrast, execute certain designated categories of
COMMISSION unless one of five exceptions applies, trades, as described below.15
Floor Brokers are required to enter With respect to Snapshot, the
[Release No. 34–83656; File No. SR–Phlx–
orders originating in the trading crowd Exchange proposes to allow ROTs and
2018–40] Specialists, like Floor Brokers, to use
using the Exchange’s electronic order
entry system—the ‘‘Floor Broker Snapshot to provisionally execute, in
Self-Regulatory Organizations; Nasdaq the options trading crowd, multi-leg
PHLX LLC; Notice of Filing of Management System’’ 9—and are not
permitted to execute orders in the orders and simple orders in options on
Amendment No. 1, and Order Granting exchange-traded funds (‘‘ETFs’’) that are
Accelerated Approval of a Proposed trading crowd. The Exchange proposes
to change the order entry process for included in the Options Penny Pilot,
Rule Change, as Modified by subject to the procedures for and the
Amendment No. 1, To Extend the ROTS and Specialist by requiring them
to utilize the same electronic order entry limitations to the use of Snapshot.16 The
Applicability of the Floor Broker Exchange represents that it does not
Management System and the Snapshot system that is currently used by Floor
Brokers. To accomplish this transition, anticipate that the use of Snapshot by
Functionality to Registered Options ROTs or Specialists will pose any
Traders and Specialists the Exchange proposes to change the
name of its electronic order entry increased or unique risks relative to its
July 17, 2018. system from the ‘‘Floor Broker current use by Floor Brokers.17
Management System’’ to the ‘‘Floor Therefore, the Exchange proposes to
I. Introduction utilize the same methods it currently
Based Management System’’ (‘‘FBMS’’)
On May 24, 2018, Nasdaq PHLX LLC to reflect its expanded applicability to uses to surveil Floor Brokers’ use of
(‘‘Phlx’’ or ‘‘Exchange’’) filed with the all members that operate on the Snapshot to also monitor ROTs’ and
Securities and Exchange Commission Exchange’s trading floor—namely, Floor Specialists’ uses of the Snapshot
(‘‘Commission’’), pursuant to Section Brokers, ROT, and Specialists.10 In functionality.18
19(b)(1) of the Securities Exchange Act To implement the renaming of FBMS
addition, the Exchange proposes to
of 1934 (‘‘Act’’) 1 and Rule 19b–4 and the extension of FBMS (including
apply the same general obligations it
thereunder,2 a proposed rule change to its Snapshot functionality) to ROTs and
currently imposes upon Floor Brokers
extend the applicability of the Floor Specialists, the Exchange also proposes
regarding orders on the trading floor to
Broker Management System and the to make changes to its Rules and Floor
ROTS and Specialists.11 The Exchange
Snapshot functionality to Registered Advices, as well as to update multiple
also proposes to extend FBMS’
Options Traders (‘‘ROTS’’) 3 and cross-references within its Rules and
Snapshot functionality to ROTs and
Specialists.4 The proposed rule change Floor Advices, so that its current
Specialists.12 To effectuate these
was published for comment in the requirements regarding the use of FBMS
changes, the Exchange proposes several
Federal Register on June 4, 2018.5 On will apply to ROTS and Specialists.19
amendments and additions to its Rules
June 4, 2018, the Exchange filed and Floor Advices.13 14 See Notice, supra note 5, at 25726.
Amendment No. 1 to the proposed rule
Specifically, the Exchange proposes to 15 See id.
change.6 The Commission received no
amend Phlx Rule 1000(f) to require 16 See id. These procedures and limitations
16 17 CFR 200.30–3(a)(12).
ROTs and Specialists to execute orders regarding the use of Snapshot are currently set forth
utilizing FBMS and to prohibit ROTs in Phlx Rule 1063(e)(v), but the Exchange proposes
1 15 U.S.C. 78s(b)(1). to move them to a new Phlx Rule 1069, where they
2 17 CFR 240.19b–4. and Specialists from executing orders in will apply broadly to ‘‘members’’ rather than only
3 See Phlx Rule 1014(b) (defining a ROT). the Exchange’s options trading crowd, to Floor Brokers.
4 See Phlx Rule 1020 (describing the functions of 17 See id.
a Specialist). www.sec.gov/comments/sr-phlx-2018-40/phlx201
18 See id. at 25726–27.
5 See Securities Exchange Act Release No. 83339 19 See id. at 25726–28; Amendment No. 1, supra
840-3767632-162689.pdf).
amozie on DSK3GDR082PROD with NOTICES1
(May 29, 2018), 83 FR 25725 (‘‘Notice’’). 7 See Notice, supra note 5, at 25726. note 6. The Exchange is proposing minor alterations
6 In Amendment No. 1 the Exchange: (1) Re- to its Rules that presently govern the use of FBMS
8 See id.
numbered proposed Phlx Rule 1081 as proposed 9 Phlx Rule 1000(f)(iii). by Floor Brokers to, among other things, account for
Phlx Rule 1085 and (2) changed the proposed cross- 10 See Notice, supra note 5, at 25726.
the fact that ROTS and Specialists negotiate orders
references in proposed Commentary .06 to Phlx on the floor for their own account and do not
11 See id. at 25725.
Rule 1080 and in Options Floor Procedure Advices represent orders on behalf of others. See Notice,
12 See id. at 25726.
and Order & Decorum Regulations (‘‘Floor Advice’’) supra note 5, at 25728. In addition, the Exchange
A–9 from Phlx Rule 1081 to Phlx Rule 1085. 13 A more detailed description of the proposal is proposing several changes to remove obsolete
Amendment No. 1 is available at https:// appears in the Notice and in Amendment No. 1. Continued
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![Federal Register / Vol. 83, No. 141 / Monday, July 23, 2018 / Notices 34901
• Send an email to rule-comments@ Commission believes that Amendment solicit comments on the proposed rule
sec.gov. Please include File No. SR– No. 1 simply modified certain proposed change from interested persons.
Phlx–2018–40 on the subject line. rule numbering and cross-referencing
I. Clearing Agency’s Statement of the
and does not raise novel regulatory
Paper Comments Terms of Substance of the Proposed
issues. Accordingly, the Commission
• Send paper comments in triplicate Rule Change
finds good cause, pursuant to Section
to Secretary, Securities and Exchange 19(b)(2) of the Act,41 to approve the The proposed rule change consists of
Commission, 100 F Street NE, proposed rule change, as modified by modifications to the Rules and
Washington, DC 20549–1090. Amendment No. 1, on an accelerated Procedures of NSCC (‘‘Rules’’) 5 in order
All submissions should refer to File No. basis. to (1) clarify, correct, and enhance the
SR–Phlx–2018–40. This file number description of the procedures by which
should be included on the subject line VI. Conclusion NSCC processes transactions in
if email is used. To help the It is therefore ordered, pursuant to securities that are eligible for its
Commission process and review your Section 19(b)(2) of the Act,42 that the Continuous Net Settlement (‘‘CNS’’)
comments more efficiently, please use proposed rule change (SR–Phlx–2018– system (‘‘CNS Securities’’) 6 and are
only one method. The Commission will 40), as modified by Amendment No. 1, subject to a corporate reorganization
post all comments on the Commission’s be, and it hereby is, approved on an event through the CNS Reorganization
internet website (http://www.sec.gov/ Processing System; and (2) describe
accelerated basis.
rules/sro.shtml). Copies of the NSCC’s authority to identify to Members
submission, all subsequent For the Commission, by the Division of their counterparties for their positions
amendments, all written statements Trading and Markets, pursuant to delegated
in a subject security as of the critical
with respect to the proposed rule authority.43
date of an applicable payment or event,
change that are filed with the Eduardo A. Aleman, as described in greater detail below.
Commission, and all written Assistant Secretary.
communications relating to the [FR Doc. 2018–15647 Filed 7–20–18; 8:45 am] II. Clearing Agency’s Statement of the
proposed rule change between the Purpose of, and Statutory Basis for, the
BILLING CODE 8011–01–P
Commission and any person, other than Proposed Rule Change
those that may be withheld from the In its filing with the Commission, the
public in accordance with the SECURITIES AND EXCHANGE clearing agency included statements
provisions of 5 U.S.C. 552, will be COMMISSION concerning the purpose of and basis for
available for website viewing and the proposed rule change and discussed
printing in the Commission’s Public [Release No. 34–83654; File No. SR–NSCC– any comments it received on the
Reference Room, 100 F Street NE, 2018–003] proposed rule change. The text of these
Washington, DC 20549, on official statements may be examined at the
business days between the hours of Self-Regulatory Organizations; places specified in Item IV below. The
10:00 a.m. and 3:00 p.m. Copies of such National Securities Clearing clearing agency has prepared
filing will also be available for Corporation; Notice of Filing of and summaries, set forth in sections A, B,
inspection and copying at the principal Immediate Effectiveness of a Proposed and C below, of the most significant
office of the Exchange. All comments Rule Change To Clarify and Enhance aspects of such statements.
received will be posted without change. Rules Related to the CNS
Persons submitting comments are Reorganization Processing System (A) Clearing Agency’s Statement of the
cautioned that we do not redact or edit and NSCC’s Authority To Reveal the Purpose of, and Statutory Basis for, the
personal identifying information from Identity of Counterparties in Certain Proposed Rule Change
comment submissions. You should Circumstances 1. Purpose
submit only information that you wish
to make available publicly. All July 17, 2018. NSCC is proposing to make certain
submissions should refer to File No. revisions to Procedure VII, Section H of
Pursuant to Section 19(b)(1) of the
SR–Phlx–2018–40 and should be the Rules, which describes, among other
Securities Exchange Act of 1934
submitted on or before August 13, 2018. matters, NSCC’s CNS Reorganization
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
Processing System.
V. Accelerated Approval of Proposed notice is hereby given that on July 9,
First, the proposed changes would
Rule Change, as Modified by 2018, National Securities Clearing
clarify, correct, and enhance the
Amendment No. 1 Corporation (‘‘NSCC’’) filed with the
description of the CNS Reorganization
Securities and Exchange Commission
The Commission finds good cause to Processing System by (1) revising the
(‘‘Commission’’) the proposed rule
approve the proposed rule change, as description of the scope of corporate
change as described in Items I, II and III
modified by Amendment No. 1, prior to reorganization events that may be
below, which Items have been prepared
the thirtieth day after the date of processed through the CNS
by the clearing agency. NSCC filed the
publication of notice of the amended Reorganization Processing System; (2)
proposed rule change pursuant to
proposal in the Federal Register. As revising the description of the
Section 19(b)(3)(A) of the Act 3 and Rule
described above, in Amendment No. 1, processing of voluntary reorganizations
19b–4(f)(4) thereunder.4 The
the Exchange (a) re-numbered proposed through the CNS Reorganization
Commission is publishing this notice to
Phlx Rule 1081 as proposed Phlx Rule Processing System; and (3) making
amozie on DSK3GDR082PROD with NOTICES1
1085 and (b) changed the proposed 41 15
technical revisions to Section H of
U.S.C. 78s(b)(2).
cross-references in proposed 42 Id.
5 The Rules are available at http://www.dtcc.com/
Commentary .06 to Phlx Rule 1080 and 43 17 CFR 200.30–3(a)(12). legal/rules-and-procedures. Capitalized terms used
in Floor Advice A–9 from Phlx Rule 1 15 U.S.C. 78s(b)(1). herein and not otherwise defined shall have the
1081 to Phlx Rule 1085.40 The 2 17 CFR 240.19b–4.
meaning assigned to such terms in the Rules.
3 15 U.S.C. 78s(b)(3)(A). 6 CNS and its operation are described in Rule 11
40 See Amendment No. 1, supra note 6. 4 17 CFR 240.19b–4(f)(4). and Procedure VII of the Rules. Id.
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Document Created: 2018-07-21 00:48:57
Document Modified: 2018-07-21 00:48:57
| 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 34899 |
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