83_FR_56604 83 FR 56385 - Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to New Derivative Securities Products

83 FR 56385 - Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to New Derivative Securities Products

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 219 (November 13, 2018)

Page Range56385-56387
FR Document2018-24636

Federal Register, Volume 83 Issue 219 (Tuesday, November 13, 2018)
[Federal Register Volume 83, Number 219 (Tuesday, November 13, 2018)]
[Notices]
[Pages 56385-56387]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-24636]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84542; File No. SR-Phlx-2018-67]


Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Relating to New 
Derivative Securities Products

November 6, 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 October 24, 2018, Nasdaq PHLX LLC (``Phlx'' or ``Exchange'') filed 
with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the Exchange. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Phlx Rule 803 related to derivative

[[Page 56386]]

securities traded under unlisted trading privileges (``UTP'') to remove 
the requirement in Rule 803(o)(3) for the Exchange to file with the 
Commission a Form 19b-4(e) for each ``new derivative securities 
product'' as defined in Rule 19b-4(e) under the Act \3\ (``Derivative 
Security'') traded under UTP and renumber the remaining provisions of 
Rule 803(o) to maintain an organized rule structure. The Exchange has 
designated this rule change as ``non-controversial'' under Section 
19(b)(3)(A) of the Act \4\ and provided the Commission with the notice 
required by Rule 19b-4(f)(6) thereunder.\5\
---------------------------------------------------------------------------

    \3\ 17 CFR 240.19b-4(e)
    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 17 CFR 240.19b-4(f)(6).
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    The text of the proposed rule change is available on the Exchange's 
website at http://nasdaqphlx.cchwallstreet.com/, at the principal 
office of the Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposed rule change is to amend Rule 803 
related to derivative securities traded under UTP by removing the 
requirement in Rule 803(o)(3) for the Exchange to file with the 
Commission a Form 19b-4(e) for each Derivative Security, and 
renumbering the remaining rules of Rule 803(o) to maintain an organized 
rule structure, as described below.
    Rule 803(o)(3) sets forth the requirement for Phlx to file with the 
Commission a Form 19b-4(e) with respect to each Derivative Security 
that is traded under UTP. However, Phlx believes that it should not be 
necessary to file a Form 19b-4(e) with the Commission if it begins 
trading a Derivative Security on a UTP basis, because Rule 19b- 4(e)(1) 
under the Act refers to the ``listing and trading'' of a ``new 
derivative securities product.''
    The Exchange believes that the requirements of that rule refers 
[sic] to when an exchange lists and trades a Derivative Security, and 
not when an exchange seeks only to trade such product on a UTP basis 
pursuant to Rule 12f-2 under the Act.\6\ Therefore, Phlx proposes to 
delete the requirement in current Rule 803(o)(3) for Phlx to file a 
Form 19b-4(e) with the Commission with respect to each Derivative 
Security it begins trading on a UTP basis. In addition, as a result of 
the deletion of current Rule 803(a)(1) Phlx proposes to renumber 
current Rule 803(o)(4), as Rule 803(o)(3).
---------------------------------------------------------------------------

    \6\ 17 CFR 240.12f-2.
---------------------------------------------------------------------------

2. Statutory Basis
    Phlx believes that the proposed rule change is consistent with the 
provisions of Section 6(b) \7\ of the Act in general, and furthers the 
objectives of Section 6(b)(5) of the Act \8\ in particular, in that it 
is designed to prevent fraudulent and manipulative acts and practices, 
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. Specifically, eliminating the requirement to file a 
Form 19b-4(e) for each Derivative Security the Exchange begins trading 
on a UTP basis removes an unnecessary regulatory requirement thereby 
providing for a more efficient process for adding Derivative Securities 
to trading on the Exchange on a UTP basis.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    In addition, the Exchange notes that a substantially identical 
proposed rule change by NYSE National, Inc. (``NYSE National'') was 
recently approved by the Commission.\9\ In particular, the Commission 
noted in the approval order that it ``believes that the filing of a 
Form 19b-4(e) is not required when an Exchange is trading a new 
derivative securities product on a UTP basis only'' \10\ and also found 
that the NYSE National's proposed rule change is ``consistent with the 
requirements of Section 6(b)(5) of the Act.'' \11\
---------------------------------------------------------------------------

    \9\ See Securities Exchange Act Release No. 83289 (May 17, 
2018), 83 FR 23968 (May 23, 2018) (Order Approving File No. SR-
NYSENAT-2018-02).
    \10\ See supra note 9 at page 23975 at footnote 149.
    \11\ See supra note 9 at page 23975-6.
---------------------------------------------------------------------------

    With respect to the renumbering of current Rule 803(o)(4) as Rule 
803(o)(3), the Exchange believes that this change is consistent with 
the Act because they [sic] will allow the Exchange to maintain a clear 
and organized rule structure, thus preventing investor confusion.
    For these reasons, Phlx believes the proposed rule change is 
consistent with the requirements of Section 6(b)(5) of the Act.

B. Self-Regulatory Organization's Statement on Burden on Competition

    Phlx does not believe that the proposed rule change will result in 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. To the contrary, removing the 
requirement to file a Form 19b-4(e) will serve to enhance competition 
by providing for the efficient addition of Derivative Securities for 
trading under UTP on Phlx. To the extent that a competitor marketplace 
believes that the proposed rule change places it at a competitive 
disadvantage, it may file with the Commission a proposed rule change to 
adopt the same or similar rule.
    In addition, the proposal to renumber the current Rules [sic] 
803(o)(4) as Rule 803(o)(3) does not impact competition in any respect 
since it merely maintains a clear and organized rule structure.

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 proposed rule change does not: (i) Significantly affect 
the protection of investors or the public interest; (ii) impose any 
significant burden on competition; or (iii) become operative prior to 
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 \12\ and Rule 19b-4(f)(6) 
thereunder.\13\
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 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.
---------------------------------------------------------------------------

    The Exchange has asked the Commission to waive the 30-day operative 
delay so that the proposal may become operative immediately upon 
filing. Waiving the 30-day delay would permit the Exchange to more 
efficiently add Derivative Securities to the

[[Page 56387]]

Exchange under UTP without the unnecessary requirement to file a 19b-
4(e) with the Commission. The Commission also notes that because Phlx 
is adopting a rule that is substantially identical to a similar NYSE 
National rule, the proposed change does not present any new or novel 
issues. Thus, the Commission believes that waiver of the 30-day 
operative delay is consistent with the protection of investors and the 
public interest and hereby waives the 30-day operative delay and 
designates the proposed rule change to be operative upon filing.\14\
---------------------------------------------------------------------------

    \14\ 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 necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-Phlx-2018-67 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-Phlx-2018-67. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (http://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549 on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-Phlx-2018-67 and should be submitted on 
or before December 4, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-24636 Filed 11-9-18; 8:45 am]
BILLING CODE 8011-01-P



                                                                           Federal Register / Vol. 83, No. 219 / Tuesday, November 13, 2018 / Notices                                                    56385

                                              discrimination between customers,                        investors or the public interest; (ii)                    Commission and any person, other than
                                              issuers, brokers, or dealers. As noted                   impose any significant burden on                          those that may be withheld from the
                                              above, the effect of the proposed rule                   competition; and (iii) become operative                   public in accordance with the
                                              change is to change the threshold for                    prior to 30 days from the date on which                   provisions of 5 U.S.C. 552, will be
                                              listed companies to benefit from the                     it was filed, or such shorter time as the                 available for website viewing and
                                              exemptions from the NYSE                                 Commission may designate, if                              printing in the Commission’s Public
                                              compensation committee requirements                      consistent with the protection of                         Reference Room, 100 F Street NE,
                                              applicable to smaller reporting                          investors and the public interest, the                    Washington, DC 20549 on official
                                              companies so that all companies that                     proposed rule change has become                           business days between the hours of
                                              qualify for smaller reporting company                    effective pursuant to Section 19(b)(3)(A)                 10:00 a.m. and 3:00 p.m. Copies of such
                                              status under the revised SEC definition                  of the Act and Rule 19b–4(f)(6)(iii)                      filing also will be available for
                                              will qualify for those exemptions. Listed                thereunder.                                               inspection and copying at the principal
                                              smaller reporting companies must                            At any time within 60 days of the                      office of the Exchange. All comments
                                              comply with all other applicable                         filing of such proposed rule change, the                  received will be posted without change.
                                              Exchange corporate governance                            Commission summarily may                                  Persons submitting comments are
                                              requirements, including all other                        temporarily suspend such rule change if                   cautioned that we do not redact or edit
                                              applicable compensation committee                        it appears to the Commission that such                    personal identifying information from
                                              requirements. The Commission has                         action is necessary or appropriate in the                 comment submissions. You should
                                              already determined through its own                       public interest, for the protection of                    submit only information that you wish
                                              rulemaking that the revised thresholds                   investors, or otherwise in furtherance of                 to make available publicly. All
                                              for smaller reporting company status                     the purposes of the Act. If the                           submissions should refer to File
                                              proposed in this rule proposal are                       Commission takes such action, the                         Number SR–NYSE–2018–51, and
                                              consistent with the goal of the Act to                   Commission shall institute proceedings                    should be submitted on or before
                                              further the protection of investors and                  under Section 19(b)(2)(B) 15 of the Act to                December 4, 2018.
                                              the public interest 12 and the Exchange                  determine whether the proposed rule                         For the Commission, by the Division of
                                              believes that its own proposal is                        change should be approved or                              Trading and Markets, pursuant to delegated
                                              consistent with Section 6(b)(5) of the                   disapproved.                                              authority.16
                                              Act for the same reasons.                                IV. Solicitation of Comments                              Eduardo A. Aleman,
                                                                                                                                                                 Assistant Secretary.
                                              B. Self-Regulatory Organization’s                          Interested persons are invited to
                                                                                                                                                                 [FR Doc. 2018–24637 Filed 11–9–18; 8:45 am]
                                              Statement on Burden on Competition                       submit written data, views, and
                                                                                                                                                                 BILLING CODE 8011–01–P
                                                 The Exchange does not believe that                    arguments concerning the foregoing,
                                              the proposed rule change will impose                     including whether the proposed rule
                                              any burden on competition that is not                    change is consistent with the Act.                        SECURITIES AND EXCHANGE
                                              necessary or appropriate in furtherance                  Comments may be submitted by any of                       COMMISSION
                                              of the purposes of the Act. The                          the following methods:
                                                                                                                                                                 [Release No. 34–84542; File No. SR–Phlx–
                                              proposed rule change will not impose                     Electronic Comments                                       2018–67]
                                              any burden competition as its sole
                                              purpose is to change the threshold for                     • Use the Commission’s internet
                                                                                                       comment form (http://www.sec.gov/                         Self-Regulatory Organizations; Nasdaq
                                              listed companies to benefit from the                                                                               PHLX LLC; Notice of Filing and
                                              exemptions from the NYSE                                 rules/sro.shtml); or
                                                                                                         • Send an email to rule-comments@                       Immediate Effectiveness of Proposed
                                              compensation committee requirements                                                                                Rule Change Relating to New
                                                                                                       sec.gov. Please include File Number SR–
                                              applicable to smaller reporting                                                                                    Derivative Securities Products
                                                                                                       NYSE–2018–51 on the subject line.
                                              companies so that all companies that
                                              qualify for smaller reporting company                    Paper Comments                                            November 6, 2018.
                                              status under the revised SEC definition                                                                               Pursuant to Section 19(b)(1) of the
                                                                                                         • Send paper comments in triplicate
                                              will qualify for those exemptions.                                                                                 Securities Exchange Act of 1934
                                                                                                       to Secretary, Securities and Exchange
                                                                                                                                                                 (‘‘Act’’),1 and Rule 19b–4 thereunder,2
                                              C. Self-Regulatory Organization’s                        Commission, 100 F Street NE,
                                                                                                                                                                 notice is hereby given that on October
                                              Statement on Comments on the                             Washington, DC 20549–1090.
                                                                                                                                                                 24, 2018, Nasdaq PHLX LLC (‘‘Phlx’’ or
                                              Proposed Rule Change Received From                       All submissions should refer to File                      ‘‘Exchange’’) filed with the Securities
                                              Members, Participants, or Others                         Number SR–NYSE–2018–51. This file                         and Exchange Commission
                                                No written comments were solicited                     number should be included on the                          (‘‘Commission’’) the proposed rule
                                              or received with respect to the proposed                 subject line if email is used. To help the                change as described in Items I and II
                                              rule change.                                             Commission process and review your                        below, which Items have been prepared
                                                                                                       comments more efficiently, please use                     by the Exchange. The Commission is
                                              III. Date of Effectiveness of the                        only one method. The Commission will                      publishing this notice to solicit
                                              Proposed Rule Change and Timing for                      post all comments on the Commission’s                     comments on the proposed rule change
                                              Commission Action                                        internet website (http://www.sec.gov/                     from interested persons.
                                                 The Exchange has filed the proposed                   rules/sro.shtml). Copies of the
                                              rule change pursuant to Section                          submission, all subsequent                                I. Self-Regulatory Organization’s
                                              19(b)(3)(A)(iii) of the Act 13 and Rule                  amendments, all written statements                        Statement of the Terms of Substance of
amozie on DSK3GDR082PROD with NOTICES1




                                              19b–4(f)(6) thereunder.14 Because the                    with respect to the proposed rule                         the Proposed Rule Change
                                              proposed rule change does not: (i)                       change that are filed with the                               The Exchange proposes to amend
                                              Significantly affect the protection of                   Commission, and all written                               Phlx Rule 803 related to derivative
                                                                                                       communications relating to the
                                                12 See footnote 4, supra.                              proposed rule change between the                            16 17 CFR 200.30–3(a)(12).
                                                13 15 U.S.C. 78s(b)(3)(A)(iii).                                                                                    1 15 U.S.C. 78s(b)(1).
                                                14 17 CFR 240.19b–4(f)(6).                               15 15   U.S.C. 78s(b)(2)(B).                              2 17 CFR 240.19b–4.




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                                              56386                      Federal Register / Vol. 83, No. 219 / Tuesday, November 13, 2018 / Notices

                                              securities traded under unlisted trading                refers to the ‘‘listing and trading’’ of a             maintain a clear and organized rule
                                              privileges (‘‘UTP’’) to remove the                      ‘‘new derivative securities product.’’                 structure, thus preventing investor
                                              requirement in Rule 803(o)(3) for the                      The Exchange believes that the                      confusion.
                                              Exchange to file with the Commission a                  requirements of that rule refers [sic] to                 For these reasons, Phlx believes the
                                              Form 19b–4(e) for each ‘‘new derivative                 when an exchange lists and trades a                    proposed rule change is consistent with
                                              securities product’’ as defined in Rule                 Derivative Security, and not when an                   the requirements of Section 6(b)(5) of
                                              19b–4(e) under the Act 3 (‘‘Derivative                  exchange seeks only to trade such                      the Act.
                                              Security’’) traded under UTP and                        product on a UTP basis pursuant to Rule
                                                                                                                                                             B. Self-Regulatory Organization’s
                                              renumber the remaining provisions of                    12f–2 under the Act.6 Therefore, Phlx
                                                                                                                                                             Statement on Burden on Competition
                                              Rule 803(o) to maintain an organized                    proposes to delete the requirement in
                                              rule structure. The Exchange has                        current Rule 803(o)(3) for Phlx to file a                 Phlx does not believe that the
                                              designated this rule change as ‘‘non-                   Form 19b–4(e) with the Commission                      proposed rule change will result in any
                                              controversial’’ under Section 19(b)(3)(A)               with respect to each Derivative Security               burden on competition that is not
                                              of the Act 4 and provided the                           it begins trading on a UTP basis. In                   necessary or appropriate in furtherance
                                              Commission with the notice required by                  addition, as a result of the deletion of               of the purposes of the Act. To the
                                              Rule 19b–4(f)(6) thereunder.5                           current Rule 803(a)(1) Phlx proposes to                contrary, removing the requirement to
                                                 The text of the proposed rule change                 renumber current Rule 803(o)(4), as                    file a Form 19b–4(e) will serve to
                                              is available on the Exchange’s website at               Rule 803(o)(3).                                        enhance competition by providing for
                                              http://nasdaqphlx.cchwallstreet.com/,                                                                          the efficient addition of Derivative
                                                                                                      2. Statutory Basis                                     Securities for trading under UTP on
                                              at the principal office of the Exchange,
                                              and at the Commission’s Public                             Phlx believes that the proposed rule                Phlx. To the extent that a competitor
                                              Reference Room.                                         change is consistent with the provisions               marketplace believes that the proposed
                                                                                                      of Section 6(b) 7 of the Act in general,               rule change places it at a competitive
                                              II. Self-Regulatory Organization’s                      and furthers the objectives of Section                 disadvantage, it may file with the
                                              Statement of the Purpose of, and                        6(b)(5) of the Act 8 in particular, in that            Commission a proposed rule change to
                                              Statutory Basis for, the Proposed Rule                  it is designed to prevent fraudulent and               adopt the same or similar rule.
                                              Change                                                  manipulative acts and practices, to                       In addition, the proposal to renumber
                                                 In its filing with the Commission, the               promote just and equitable principles of               the current Rules [sic] 803(o)(4) as Rule
                                              Exchange included statements                            trade, to remove impediments to and                    803(o)(3) does not impact competition
                                              concerning the purpose of and basis for                 perfect the mechanism of a free and                    in any respect since it merely maintains
                                              the proposed rule change and discussed                  open market and a national market                      a clear and organized rule structure.
                                              any comments it received on the                         system, and, in general, to protect
                                                                                                                                                             C. Self-Regulatory Organization’s
                                              proposed rule change. The text of these                 investors and the public interest.
                                                                                                                                                             Statement on Comments on the
                                              statements may be examined at the                       Specifically, eliminating the
                                                                                                                                                             Proposed Rule Change Received From
                                              places specified in Item IV below. The                  requirement to file a Form 19b–4(e) for
                                                                                                                                                             Members, Participants, or Others
                                              Exchange has prepared summaries, set                    each Derivative Security the Exchange
                                              forth in sections A, B, and C below, of                 begins trading on a UTP basis removes                    No written comments were either
                                              the most significant aspects of such                    an unnecessary regulatory requirement                  solicited or received.
                                              statements.                                             thereby providing for a more efficient                 III. Date of Effectiveness of the
                                                                                                      process for adding Derivative Securities               Proposed Rule Change and Timing for
                                              A. Self-Regulatory Organization’s
                                                                                                      to trading on the Exchange on a UTP                    Commission Action
                                              Statement of the Purpose of, and
                                                                                                      basis.
                                              Statutory Basis for, the Proposed Rule                     In addition, the Exchange notes that a                 Because the proposed rule change
                                              Change                                                  substantially identical proposed rule                  does not: (i) Significantly affect the
                                              1. Purpose                                              change by NYSE National, Inc. (‘‘NYSE                  protection of investors or the public
                                                                                                      National’’) was recently approved by the               interest; (ii) impose any significant
                                                 The purpose of the proposed rule                                                                            burden on competition; or (iii) become
                                              change is to amend Rule 803 related to                  Commission.9 In particular, the
                                                                                                      Commission noted in the approval order                 operative prior to 30 days from the date
                                              derivative securities traded under UTP                                                                         on which it was filed, or such shorter
                                              by removing the requirement in Rule                     that it ‘‘believes that the filing of a Form
                                                                                                      19b–4(e) is not required when an                       time as the Commission may designate,
                                              803(o)(3) for the Exchange to file with                                                                        it has become effective pursuant to
                                              the Commission a Form 19b–4(e) for                      Exchange is trading a new derivative
                                                                                                      securities product on a UTP basis                      Section 19(b)(3)(A) of the Act 12 and
                                              each Derivative Security, and
                                                                                                      only’’ 10 and also found that the NYSE                 Rule 19b–4(f)(6) thereunder.13
                                              renumbering the remaining rules of Rule                                                                           The Exchange has asked the
                                              803(o) to maintain an organized rule                    National’s proposed rule change is
                                                                                                      ‘‘consistent with the requirements of                  Commission to waive the 30-day
                                              structure, as described below.                                                                                 operative delay so that the proposal may
                                                 Rule 803(o)(3) sets forth the                        Section 6(b)(5) of the Act.’’ 11
                                                                                                         With respect to the renumbering of                  become operative immediately upon
                                              requirement for Phlx to file with the
                                                                                                      current Rule 803(o)(4) as Rule 803(o)(3),              filing. Waiving the 30-day delay would
                                              Commission a Form 19b–4(e) with
                                                                                                      the Exchange believes that this change                 permit the Exchange to more efficiently
                                              respect to each Derivative Security that
                                                                                                      is consistent with the Act because they                add Derivative Securities to the
                                              is traded under UTP. However, Phlx
                                              believes that it should not be necessary                [sic] will allow the Exchange to
                                                                                                                                                               12 15  U.S.C. 78s(b)(3)(A).
                                              to file a Form 19b–4(e) with the
amozie on DSK3GDR082PROD with NOTICES1




                                                                                                                                                               13 17  CFR 240.19b–4(f)(6). In addition, Rule 19b–
                                                                                                        6 17 CFR 240.12f–2.
                                              Commission if it begins trading a                         7 15 U.S.C. 78f(b).                                  4(f)(6)(iii) requires a self-regulatory organization to
                                              Derivative Security on a UTP basis,                       8 15 U.S.C. 78f(b)(5).
                                                                                                                                                             give the Commission written notice of its intent to
                                              because Rule 19b– 4(e)(1) under the Act                                                                        file the proposed rule change, along with a brief
                                                                                                        9 See Securities Exchange Act Release No. 83289
                                                                                                                                                             description and text of the proposed rule change,
                                                                                                      (May 17, 2018), 83 FR 23968 (May 23, 2018) (Order      at least five business days prior to the date of filing
                                                3 17 CFR 240.19b–4(e)                                 Approving File No. SR–NYSENAT–2018–02).                of the proposed rule change, or such shorter time
                                                4 15 U.S.C. 78s(b)(3)(A).                               10 See supra note 9 at page 23975 at footnote 149.
                                                                                                                                                             as designated by the Commission. The Exchange
                                                5 17 CFR 240.19b–4(f)(6).                               11 See supra note 9 at page 23975–6.                 has satisfied this requirement.



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                                                                         Federal Register / Vol. 83, No. 219 / Tuesday, November 13, 2018 / Notices                                                     56387

                                              Exchange under UTP without the                          Commission and any person, other than                 Audit Trail System to make conforming
                                              unnecessary requirement to file a 19b–                  those that may be withheld from the                   and technical changes.
                                              4(e) with the Commission. The                           public in accordance with the                            The text of the proposed rule change
                                              Commission also notes that because                      provisions of 5 U.S.C. 552, will be                   is available on the Exchange’s website at
                                              Phlx is adopting a rule that is                         available for website viewing and                     http://nasdaqphlx.cchwallstreet.com/,
                                              substantially identical to a similar NYSE               printing in the Commission’s Public                   at the principal office of the Exchange,
                                              National rule, the proposed change does                 Reference Room, 100 F Street NE,                      and at the Commission’s Public
                                              not present any new or novel issues.                    Washington, DC 20549 on official                      Reference Room.
                                              Thus, the Commission believes that                      business days between the hours of
                                              waiver of the 30-day operative delay is                 10:00 a.m. and 3:00 p.m. Copies of the                II. Self-Regulatory Organization’s
                                              consistent with the protection of                       filing also will be available for                     Statement of the Purpose of, and
                                              investors and the public interest and                   inspection and copying at the principal               Statutory Basis for, the Proposed Rule
                                              hereby waives the 30-day operative                      office of the Exchange. All comments                  Change
                                              delay and designates the proposed rule                  received will be posted without change.                 In its filing with the Commission, the
                                              change to be operative upon filing.14                   Persons submitting comments are                       Exchange included statements
                                                 At any time within 60 days of the                    cautioned that we do not redact or edit               concerning the purpose of and basis for
                                              filing of the proposed rule change, the                 personal identifying information from                 the proposed rule change and discussed
                                              Commission summarily may                                comment submissions. You should                       any comments it received on the
                                              temporarily suspend such rule change if                 submit only information that you wish                 proposed rule change. The text of these
                                              it appears to the Commission that such                  to make available publicly. All                       statements may be examined at the
                                              action is necessary or appropriate in the               submissions should refer to File                      places specified in Item IV below. The
                                              public interest, for the protection of                  Number SR–Phlx–2018–67 and should                     Exchange has prepared summaries, set
                                              investors, or otherwise in furtherance of               be submitted on or before December 4,                 forth in sections A, B, and C below, of
                                              the purposes of the Act.                                2018.                                                 the most significant aspects of such
                                              IV. Solicitation of Comments                              For the Commission, by the Division of              statements.
                                                                                                      Trading and Markets, pursuant to delegated
                                                Interested persons are invited to                     authority.15
                                                                                                                                                            A. Self-Regulatory Organization’s
                                              submit written data, views, and                                                                               Statement of the Purpose of, and
                                                                                                      Eduardo A. Aleman,
                                              arguments concerning the foregoing,                                                                           Statutory Basis for, the Proposed Rule
                                                                                                      Assistant Secretary.
                                              including whether the proposed rule                                                                           Change
                                                                                                      [FR Doc. 2018–24636 Filed 11–9–18; 8:45 am]
                                              change is consistent with the Act.                                                                            1. Purpose
                                              Comments may be submitted by any of                     BILLING CODE 8011–01–P

                                              the following methods:                                                                                           The Exchange is proposing to amend
                                                                                                                                                            the Rule 3400 Series concerning the
                                              Electronic Comments                                     SECURITIES AND EXCHANGE                               Order Audit Trail System to: (1)
                                                • Use the Commission’s internet                       COMMISSION                                            Renumber the Rule 3400 Series to
                                              comment form (http://www.sec.gov/                       [Release No. 34–84545; File No. SR–Phlx–              conform it to the numbering convention
                                              rules/sro.shtml); or                                    2018–68]                                              used by the Nasdaq Stock Market LLC
                                                • Send an email to rule-comments@                                                                           (‘‘Nasdaq’’) and FINRA; (2) amend Rule
                                              sec.gov. Please include File Number SR–                 Self-Regulatory Organizations; Nasdaq                 7410A to expand two existing
                                              Phlx–2018–67 on the subject line.                       PHLX LLC; Notice of Filing and                        exemptions and to make technical
                                                                                                      Immediate Effectiveness of Proposed                   changes to text under the rule; (3)
                                              Paper Comments                                          Rule Change To Amend the Rule 3400                    incorporate by reference FINRA Rules
                                                • Send paper comments in triplicate                   Series                                                7430, 7440 and 7450 in Rules 7430A,
                                              to Secretary, Securities and Exchange                                                                         7440A and 7450A, respectively, and
                                              Commission, 100 F Street NE,                            November 6, 2018.
                                                                                                         Pursuant to Section 19(b)(1) of the                make conforming changes thereto; and
                                              Washington, DC 20549–1090.                                                                                    (4) delete Rule 3407.3
                                              All submissions should refer to File                    Securities Exchange Act of 1934
                                                                                                      (‘‘Act’’),1 and Rule 19b–4 thereunder,2                  The Exchange’s Rule 3400 Series
                                              Number SR–Phlx–2018–67. This file                                                                             imposes an obligation on Exchange
                                              number should be included on the                        notice is hereby given that on October
                                                                                                      25, 2018, Nasdaq PHLX LLC (‘‘Phlx’’ or                members to record in electronic form
                                              subject line if email is used. To help the                                                                    and report to FINRA on a daily basis
                                              Commission process and review your                      ‘‘Exchange’’) filed with the Securities
                                                                                                      and Exchange Commission (‘‘SEC’’ or                   certain information with respect to
                                              comments more efficiently, please use                                                                         orders originated, received, transmitted,
                                              only one method. The Commission will                    ‘‘Commission’’) the proposed rule
                                                                                                      change as described in Items I, II, and               modified, canceled, or executed by
                                              post all comments on the Commission’s                                                                         members in Nasdaq- and Exchange-
                                              internet website (http://www.sec.gov/                   III below, which Items have been
                                                                                                      prepared by the Exchange. The                         listed stocks. FINRA’s Order Audit Trail
                                              rules/sro.shtml). Copies of the                                                                               System (‘‘OATS’’) captures this order
                                              submission, all subsequent                              Commission is publishing this notice to
                                                                                                      solicit comments on the proposed rule                 information and integrates it with quote
                                              amendments, all written statements                                                                            and transaction information to create a
                                              with respect to the proposed rule                       change from interested persons.
                                                                                                                                                            time-sequenced record of orders, quotes,
                                              change that are filed with the                          I. Self-Regulatory Organization’s                     and transactions. This information is
                                              Commission, and all written                             Statement of the Terms of Substance of                used by FINRA staff to conduct
amozie on DSK3GDR082PROD with NOTICES1




                                              communications relating to the                          the Proposed Rule Change                              surveillance and investigations of
                                              proposed rule change between the                           The Exchange proposes to amend the
                                                                                                                                                              3 The Exchange is filing a request for an
                                                14 For
                                                                                                      Rule 3400 Series concerning the Order
                                                       purposes only of waiving the 30-day                                                                  exemption under Section 36 of the Act from the
                                              operative delay, the Commission has also                                                                      rule filing requirements of Section 19(b) of the Act
                                                                                                        15 17 CFR 200.30–3(a)(12).
                                              considered the proposed rule’s impact on                                                                      for certain rules included in this proposal, and will
                                                                                                        1 15 U.S.C. 78s(b)(1).
                                              efficiency, competition, and capital formation. See                                                           implement the changes proposed herein upon
                                              15 U.S.C. 78c(f).                                         2 17 CFR 240.19b–4.                                 approval of the exemption request.



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Document Created: 2018-11-10 03:18:47
Document Modified: 2018-11-10 03:18:47
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation83 FR 56385 

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