83 FR 63937 - Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Bid/Ask Differentials
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 238 (December 12, 2018)
Federal Register Volume 83, Issue 238 (December 12, 2018)
| Page Range | 63937-63939 | |
| FR Document | 2018-26824 |
[Federal Register Volume 83, Number 238 (Wednesday, December 12, 2018)] [Notices] [Pages 63937-63939] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-26824] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-84727; File No. SR-Phlx-2018-77] Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Bid/Ask Differentials December 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 November 28, 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. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Phlx Rule 1017, entitled ``Openings in Options,'' Phlx Rule 1014, entitled ``Obligations and Restrictions Applicable to Specialists and Registered Options Traders,'' and Rule 1000, entitled ``Applicability, Definitions an References.'' 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 Phlx proposes several amendments in this rule change. First, the Exchange proposes to amend Phlx Rule 1017, entitled ``Openings in Options'' and Phlx Rule 1014, entitled ``Obligations and Restrictions Applicable to Specialists and Registered Options Traders'' to correct inconsistencies between the Exchange's rule text and the operation of the System. Second, the Exchange proposes to add definitions to Phlx Rule 1000 to define ``in-the-money'' and ``out-of-the-money'' option series. Third, the Exchange proposes to amend Rule 1014 to correct an error regarding rounding. Each amendment will be described in more detail below. Rule 1017 Today, Phlx Rule 1017(a)(ix) defines a Valid Width Quotes as a two- sided electronic quotation submitted by a Phlx Electronic Market Maker (which includes a Specialist \3\ and a Registered Options Trader \4\ or ``ROT'') that consists of a bid/ask differential that is compliant with Rule 1014(c)(i)(A)(1)(a).\5\ Specifically, for the Opening Process, Phlx Rule 1014(c)(i)(A)(1)(a) states that, for in-the-money series, the bid/ask differentials may be as wide as the spread between the national best bid and offer in the underlying security, or its decimal equivalent rounded up to the nearest minimum increment. In practice, however, the Exchange's System permits a Valid Width Quote in the Opening Process to be as wide as the quotation for the underlying security on the primary (listing) market.\6\ --------------------------------------------------------------------------- \3\ A Specialist is an Exchange member who is registered as an options Specialist. See Phlx Rule 1020(a). \4\ Rule 1014(b) defines a ROT as ``a regular member or a foreign currency options participant of the Exchange located on the trading floor who has received permission from the Exchange to trade in options for his own account.'' For purposes of Rule 1014, the term ``ROT'' shall include a Streaming Quote Trader and a Remote Streaming Quote Trader, as defined in Rule 1014. \5\ Phlx Rule 1014(c)(i)(A)(1)(a) provides, ``[o]ptions on equities and index options bidding and/or offering so as to create differences of no more than $.25 between the bid and the offer for each option contract for which the prevailing bid is less than $2; no more than $.40 where the prevailing bid is $2 or more but less than $5; no more than $.50 where the prevailing bid is $5 or more but less than $10; no more than $.80 where the prevailing bid is $10 or more but less than $20; and no more than $1 where the prevailing bid is $20 or more, provided that, in the case of equity options, the bid/ask differentials stated above shall not apply to in-the- money series where the market for the underlying security is wider than the differentials set forth above. For such series, the bid/ask differentials may be as wide as the spread between the national best bid and offer in the underlying security, or its decimal equivalent rounded up to the nearest minimum increment. The Exchange may establish differences other than the above for one or more series or classes of options.'' \6\ The primary market has always been utilized on Phlx since the migration to Phlx XLII. --------------------------------------------------------------------------- Proposal The Exchange proposes to codify its current practice and correctly reflect in its Rules that the Valid Width Quote in the Opening Process apply a primary market analysis, not a national best bid or offer (``NBBO'') analysis.\7\ Specifically, this proposal would conform the current rule text to the current System by amending the definition of a Valid Width Quote in Rule 1017, ``Opening in Options,'' so that, in the case of in-the-money option series \8\ where the market for the underlying security is wider than the differentials set forth above, the bid/ask differential set forth in Phlx Rule 1017(a)(ix) may be as wide as the quotation for the underlying security on the primary \9\ (listing) market, or its decimal equivalent rounded down to the nearest minimum increment. --------------------------------------------------------------------------- \7\ The Exchange notes that today Phlx utilizes the primary market in calculating the bid/ask differential during the Opening Process. This rule change would amend the rule to reflect Phlx's current practice. \8\ An at-the-money option series would also qualify. An out-of- the-money series would not qualify. \9\ The term ``primary market'' means, in the case of securities listed on The Nasdaq Stock Market, the market that is identified as the listing market pursuant to Section X(d) of the approved national market system plan governing the trading of Nasdaq-listed securities, and, in the case of securities listed on another national securities exchange, the market that is identified as the listing market pursuant to Section XI of the Consolidated Tape Association Plan. See Phlx Rule 1000(b)(31). --------------------------------------------------------------------------- The Exchange believes that utilizing the primary market in the Opening Process is reasonable given the close connection between the primary market and the Opening Process. For example, Phlx Rule 1017(d)(ii) provides, ``For all options, the underlying security, including indexes, must be open on the primary market for a certain time period as determined by the Exchange for the Opening Process to commence. The time period shall be no less than 100 milliseconds and no more than 5 seconds.'' Today, in order to open, the Exchange requires either: (i) The Specialist's Valid [[Page 63938]] Width Quote; (ii) the Valid Width Quotes of at least two Phlx Electronic Market Makers other than the Specialist; or (iii) if neither the Specialist's Valid Width Quote nor the Valid Width Quotes of two Phlx Electronic Market Makers have been submitted within such timeframe, one Phlx Electronic Market Maker has submitted a Valid Width Quote. The Exchange notes that it requires Specialists to submit Valid Width Quotes during the Opening Process to guarantee liquidity, unlike other markets which may not require market makers to quote during the opening.\10\ Further, amending the rule text to conform to its current practice will avoid confusion and continue to permit Phlx to remain one of the strongest openings in the industry. --------------------------------------------------------------------------- \10\ The Nasdaq Options Market (``NOM'') permits a bid/ask differential for options on equities and on index options to be quoted with a difference not to exceed $5 between the bid and offer regardless of the price of the bid, including before and during the opening. See NOM Rules at Chapter VII, Section 6(d)(ii). --------------------------------------------------------------------------- Rule 1000 Phlx rules currently do not define an ``in-the-money'' or ``out-of- the-money'' option series. As part of this rule change, the Exchange proposes to define these above-referenced terms within Phlx Rule 1000(b) to bring greater transparency to its rules with respect to Phlx Electronic Market Maker quoting. The Exchange proposes to define the term ``in-the-money'' at Rule 1000(b)(51) as the following: For call options, all strike prices at or below the offer in the underlying security on the primary listing market; for put options, all strike prices at or above the bid in the underlying security on the primary listing market. The Exchange proposes to define the term ``out-of-the- money'' option at Rule 1000(b)(52), which is currently reserved, to mean the following: For call options, all strike prices above the offer in the underlying security on the primary listing market; for put options, all strike prices below the bid in the underlying security on the primary listing market.\11\ Each of these definitions would apply for purposes of Phlx Electronic Market Maker quoting obligations in Rules 1014 and 1017. The Exchange notes that it specifically proposes to reference the rules related to Phlx Electronic Market Maker quoting obligations to avoid any confusion with the manner in which ``in-the- money'' and ``out-of-the-money'' options series are defined for purposes of other options rules. --------------------------------------------------------------------------- \11\ The Exchange notes that it does not utilize a last sale calculation. The Exchange believes that the quotation for the underlying security on the primary market provides an accurate reflection of the market. A last sale calculation may not be an accurate reflection of the market because the last sale may not be representative of the primary market in all cases, particularly if a halt were to occur. --------------------------------------------------------------------------- Rule 1014 The Exchange proposes to codify current rounding practice by amending Rule 1014(c)(i)(A)(1)(a). Today, Rule 1014(c)(i)(A)(1)(a) provides that rounding is up when referring to decimal equivalent. Today, the decimal equivalent is rounded down not up. The Exchange proposes to conform its rule text to the current practice. The Exchange believes that the manner in which the Exchange rounds is immaterial, however the Exchange believes that it is important to disclose its method of rounding and uniformly apply such rounding. The Exchange proposes this amendment to make clear the manner in which it rounds the decimal equivalent. Today the Exchange uniformly applies this rounding to all market maker participants and will continue to apply it in a uniform manner. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,\12\ in general, and furthers the objectives of Section 6(b)(5) of the Act,\13\ in particular, in that it is designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general to protect investors and the public interest. The Exchange notes that today Phlx utilizes the primary market in calculating the bid/ask differential during the Opening Process, although the current rule does not reflect this practice. This rule change would amend the rule to reflect Phlx's current practice. --------------------------------------------------------------------------- \12\ 15 U.S.C. 78f(b). \13\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- Rule 1017 The Exchange's proposal to amend the Opening Process to conform to current practice is consistent with the Act because while the Exchange believes that relying on the primary market or the NBBO accurately reflect the current trading environment and take into consideration market conditions, the Exchange's current Opening Process is designed to utilize the primary standard during the Opening Process.\14\ --------------------------------------------------------------------------- \14\ Phlx Rule 1017(d)(ii) provides, ``For all options, the underlying security, including indexes, must be open on the primary market for a certain time period as determined by the Exchange for the Opening Process to commence. The time period shall be no less than 100 milliseconds and no more than 5 seconds.'' --------------------------------------------------------------------------- Rule 1000 The Exchange's proposal to define the terms ``in-the-money'' and ``out-of-the-money'' for purposes of Phlx Electronic Market Maker quoting obligations in Rules 1014 and 1017 is consistent with the Act and protects investors and the public interest by bringing greater transparency to the Rulebook. Each of these defined terms would apply for purposes of Phlx Electronic Market Maker quoting obligations in Rules 1014 and 1017. The Exchange notes that it specifically proposes to reference the rules related to Phlx Electronic Market Maker quoting obligations to avoid any confusion with the manner in which ``in-the- money'' and ``out-of-the-money'' options series are defined for purposes of other options rules. Rule 1014 The Exchange's proposal to amend Rule 1014(c)(i)(A)(1)(a) to codify the Exchange's current practice of rounding down when referring to decimal equivalent is consistent with the protection of investor and the public interest because the Exchange is adding transparency to its current rule by disclosing its method of rounding. B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. Rule 1017 The Exchange's proposal to codify its current practice of utilizing the primary market in the Opening Process does not unduly burden competition because the current practice maintains a close connection between the primary market and the Opening Process. The primary market reflects the current trading environment. The Exchange notes that the proposal does not create an undue burden on intra-market competition because Phlx Electronic Market Makers are the only market participants subject to quoting requirements and these participants have valuable information with respect to the underlying instrument under the current process to make informed decisions and take calculated risks in the marketplace when providing liquidity. Phlx Electronic Market Makers remain responsible for maintaining fair and orderly markets. [[Page 63939]] Rule 1000 The Exchange's proposal to define the terms ``in-the-money'' or ``out-of-the-money'' for purposes of Phlx Electronic Market Maker quoting obligations in Rules 1014 and 1017 does not unduly burden competition, rather it adds greater transparency to the Rulebook and makes clear the applicability of the definitions to avoid confusion with respect to the remainder of the options rules. Rule 1014 The Exchange's proposal to codify its current practice of rounding down when referring to decimal equivalent within Rule 1014(c)(i)(A)(1)(a) does not impose an unduly burden competition because the Exchange continues to uniformly apply its rounding methodology with respect to its market making participants. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act \15\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\16\ --------------------------------------------------------------------------- \15\ 15 U.S.C. 78s(b)(3)(A)(iii). \16\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change, along with a brief description and the text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. --------------------------------------------------------------------------- A proposed rule change filed under Rule 19b-4(f)(6) \17\ normally does not become operative prior to 30 days after the date of the filing. However, Rule 19b-4(f)(6)(iii) \18\ permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Exchange states that immediately codifying its current practice within its rules to accurately reflect the operation of the Exchange's System will avoid confusion. The Commission believes that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest. Accordingly, the Commission hereby waives the operative delay and designates the proposed rule change as operative upon filing.\19\ --------------------------------------------------------------------------- \17\ 17 CFR 240.19b-4(f)(6). \18\ 17 CFR 240.19b-4(f)(6)(iii). \19\ For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). --------------------------------------------------------------------------- At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic CommentsUse the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-Phlx-2018-77 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-2018-77. 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-2018-77 and should be submitted on or before January 2, 2019. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\20\ --------------------------------------------------------------------------- \20\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-26824 Filed 12-11-18; 8:45 am] BILLING CODE 8011-01-P
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be submitted on or before January 2, proposed rule change. The text of these Phlx Rule 1014(c)(i)(A)(1)(a) states that,
2019. statements may be examined at the for in-the-money series, the bid/ask
For the Commission, by the Division of places specified in Item IV below. The differentials may be as wide as the
Trading and Markets, pursuant to delegated Exchange has prepared summaries, set spread between the national best bid
authority.8 forth in sections A, B, and C below, of and offer in the underlying security, or
Eduardo A. Aleman, the most significant aspects of such its decimal equivalent rounded up to
Assistant Secretary. statements. the nearest minimum increment. In
[FR Doc. 2018–26915 Filed 12–11–18; 8:45 am] A. Self-Regulatory Organization’s practice, however, the Exchange’s
BILLING CODE 8011–01–P Statement of the Purpose of, and System permits a Valid Width Quote in
Statutory Basis for, the Proposed Rule the Opening Process to be as wide as the
Change quotation for the underlying security on
SECURITIES AND EXCHANGE the primary (listing) market.6
COMMISSION 1. Purpose
Proposal
[Release No. 34–84727; File No. SR–Phlx–
Phlx proposes several amendments in
this rule change. First, the Exchange The Exchange proposes to codify its
2018–77] current practice and correctly reflect in
proposes to amend Phlx Rule 1017,
Self-Regulatory Organizations; Nasdaq entitled ‘‘Openings in Options’’ and its Rules that the Valid Width Quote in
PHLX LLC; Notice of Filing and Phlx Rule 1014, entitled ‘‘Obligations the Opening Process apply a primary
Immediate Effectiveness of Proposed and Restrictions Applicable to market analysis, not a national best bid
Rule Change Relating to Bid/Ask Specialists and Registered Options or offer (‘‘NBBO’’) analysis.7
Differentials Traders’’ to correct inconsistencies Specifically, this proposal would
between the Exchange’s rule text and conform the current rule text to the
December 6, 2018. the operation of the System. Second, the current System by amending the
Pursuant to Section 19(b)(1) of the Exchange proposes to add definitions to definition of a Valid Width Quote in
Securities Exchange Act of 1934 Phlx Rule 1000 to define ‘‘in-the- Rule 1017, ‘‘Opening in Options,’’ so
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 money’’ and ‘‘out-of-the-money’’ option that, in the case of in-the-money option
notice is hereby given that on November series. Third, the Exchange proposes to series 8 where the market for the
28, 2018, Nasdaq PHLX LLC (‘‘Phlx’’ or amend Rule 1014 to correct an error underlying security is wider than the
‘‘Exchange’’) filed with the Securities regarding rounding. Each amendment differentials set forth above, the bid/ask
and Exchange Commission will be described in more detail below. differential set forth in Phlx Rule
(‘‘Commission’’) the proposed rule 1017(a)(ix) may be as wide as the
change as described in Items I and II Rule 1017 quotation for the underlying security on
below, which Items have been prepared Today, Phlx Rule 1017(a)(ix) defines a the primary 9 (listing) market, or its
by the Exchange. The Commission is Valid Width Quotes as a two-sided decimal equivalent rounded down to
publishing this notice to solicit electronic quotation submitted by a Phlx the nearest minimum increment.
comments on the proposed rule change Electronic Market Maker (which The Exchange believes that utilizing
from interested persons. includes a Specialist 3 and a Registered the primary market in the Opening
Options Trader 4 or ‘‘ROT’’) that consists Process is reasonable given the close
I. Self-Regulatory Organization’s of a bid/ask differential that is connection between the primary market
Statement of the Terms of Substance of compliant with Rule 1014(c)(i)(A)(1)(a).5 and the Opening Process. For example,
the Proposed Rule Change Specifically, for the Opening Process, Phlx Rule 1017(d)(ii) provides, ‘‘For all
The Exchange proposes to amend options, the underlying security,
Phlx Rule 1017, entitled ‘‘Openings in 3 A Specialist is an Exchange member who is
including indexes, must be open on the
Options,’’ Phlx Rule 1014, entitled registered as an options Specialist. See Phlx Rule primary market for a certain time period
1020(a).
‘‘Obligations and Restrictions 4 Rule 1014(b) defines a ROT as ‘‘a regular as determined by the Exchange for the
Applicable to Specialists and Registered member or a foreign currency options participant of Opening Process to commence. The
Options Traders,’’ and Rule 1000, the Exchange located on the trading floor who has time period shall be no less than 100
entitled ‘‘Applicability, Definitions an received permission from the Exchange to trade in milliseconds and no more than 5
options for his own account.’’ For purposes of Rule
References.’’ 1014, the term ‘‘ROT’’ shall include a Streaming seconds.’’
The text of the proposed rule change Quote Trader and a Remote Streaming Quote Today, in order to open, the Exchange
is available on the Exchange’s website at Trader, as defined in Rule 1014. requires either: (i) The Specialist’s Valid
http://nasdaqphlx.cchwallstreet.com/, 5 Phlx Rule 1014(c)(i)(A)(1)(a) provides,
at the principal office of the Exchange, ‘‘[o]ptions on equities and index options bidding 6 The primary market has always been utilized on
and/or offering so as to create differences of no
and at the Commission’s Public more than $.25 between the bid and the offer for
Phlx since the migration to Phlx XLII.
7 The Exchange notes that today Phlx utilizes the
Reference Room. each option contract for which the prevailing bid
is less than $2; no more than $.40 where the primary market in calculating the bid/ask
II. Self-Regulatory Organization’s prevailing bid is $2 or more but less than $5; no differential during the Opening Process. This rule
Statement of the Purpose of, and more than $.50 where the prevailing bid is $5 or change would amend the rule to reflect Phlx’s
more but less than $10; no more than $.80 where current practice.
Statutory Basis for, the Proposed Rule 8 An at-the-money option series would also
the prevailing bid is $10 or more but less than $20;
Change and no more than $1 where the prevailing bid is qualify. An out-of-the-money series would not
$20 or more, provided that, in the case of equity qualify.
In its filing with the Commission, the 9 The term ‘‘primary market’’ means, in the case
options, the bid/ask differentials stated above shall
Exchange included statements
amozie on DSK3GDR082PROD with NOTICES1
not apply to in-the-money series where the market of securities listed on The Nasdaq Stock Market, the
concerning the purpose of and basis for for the underlying security is wider than the market that is identified as the listing market
the proposed rule change and discussed differentials set forth above. For such series, the pursuant to Section X(d) of the approved national
any comments it received on the bid/ask differentials may be as wide as the spread market system plan governing the trading of
between the national best bid and offer in the Nasdaq-listed securities, and, in the case of
underlying security, or its decimal equivalent securities listed on another national securities
8 17 CFR 200.30–3(a)(12). rounded up to the nearest minimum increment. The exchange, the market that is identified as the listing
1 15 U.S.C. 78s(b)(1). Exchange may establish differences other than the market pursuant to Section XI of the Consolidated
2 17 CFR 240.19b–4. above for one or more series or classes of options.’’ Tape Association Plan. See Phlx Rule 1000(b)(31).
VerDate Sep<11>2014 18:39 Dec 11, 2018 Jkt 247001 PO 00000 Frm 00113 Fmt 4703 Sfmt 4703 E:\FR\FM\12DEN1.SGM 12DEN1](https://thefederalregister.org/doc/83_FR_64175/page/1.svg)
![Federal Register / Vol. 83, No. 238 / Wednesday, December 12, 2018 / Notices 63939
Rule 1000 filing. The Exchange states that communications relating to the
The Exchange’s proposal to define the immediately codifying its current proposed rule change between the
terms ‘‘in-the-money’’ or ‘‘out-of-the- practice within its rules to accurately Commission and any person, other than
money’’ for purposes of Phlx Electronic reflect the operation of the Exchange’s those that may be withheld from the
Market Maker quoting obligations in System will avoid confusion. The public in accordance with the
Rules 1014 and 1017 does not unduly Commission believes that waiver of the provisions of 5 U.S.C. 552, will be
burden competition, rather it adds 30-day operative delay is consistent available for website viewing and
greater transparency to the Rulebook with the protection of investors and the printing in the Commission’s Public
and makes clear the applicability of the public interest. Accordingly, the Reference Room, 100 F Street NE,
definitions to avoid confusion with Commission hereby waives the Washington, DC 20549, on official
respect to the remainder of the options operative delay and designates the business days between the hours of
rules. proposed rule change as operative upon 10:00 a.m. and 3:00 p.m. Copies of the
filing.19 filing also will be available for
Rule 1014 At any time within 60 days of the inspection and copying at the principal
The Exchange’s proposal to codify its filing of the proposed rule change, the office of the Exchange. All comments
current practice of rounding down when Commission summarily may received will be posted without change.
referring to decimal equivalent within temporarily suspend such rule change if Persons submitting comments are
Rule 1014(c)(i)(A)(1)(a) does not impose it appears to the Commission that such cautioned that we do not redact or edit
an unduly burden competition because action is: (i) Necessary or appropriate in personal identifying information from
the Exchange continues to uniformly the public interest; (ii) for the protection comment submissions. You should
apply its rounding methodology with of investors; or (iii) otherwise in submit only information that you wish
respect to its market making furtherance of the purposes of the Act. to make available publicly. All
participants. If the Commission takes such action, the submissions should refer to File
Commission shall institute proceedings Number SR–Phlx–2018–77 and should
C. Self-Regulatory Organization’s to determine whether the proposed rule
Statement on Comments on the be submitted on or before January 2,
should be approved or disapproved. 2019.
Proposed Rule Change Received From
Members, Participants, or Others IV. Solicitation of Comments For the Commission, by the Division of
Interested persons are invited to Trading and Markets, pursuant to delegated
No written comments were either authority.20
solicited or received. submit written data, views, and
arguments concerning the foregoing, Eduardo A. Aleman,
III. Date of Effectiveness of the including whether the proposed rule Assistant Secretary.
Proposed Rule Change and Timing for change is consistent with the Act. [FR Doc. 2018–26824 Filed 12–11–18; 8:45 am]
Commission Action Comments may be submitted by any of BILLING CODE 8011–01–P
Because the foregoing proposed rule the following methods:
change does not: (i) Significantly affect Electronic Comments
the protection of investors or the public SECURITIES AND EXCHANGE
interest; (ii) impose any significant • Use the Commission’s internet COMMISSION
burden on competition; and (iii) become comment form (http://www.sec.gov/
operative for 30 days from the date on rules/sro.shtml); or [Release No. 34–84752; File No. SR–
which it was filed, or such shorter time • Send an email to rule-comments@ NASDAQ–2018–100]
as the Commission may designate, it has sec.gov. Please include File Number SR–
become effective pursuant to Section Phlx–2018–77 on the subject line. Self-Regulatory Organizations; The
19(b)(3)(A)(iii) of the Act 15 and Paper Comments Nasdaq Stock Market LLC; Notice of
subparagraph (f)(6) of Rule 19b–4 Filing and Immediate Effectiveness of
thereunder.16 • Send paper comments in triplicate Proposed Rule Change To Amend the
A proposed rule change filed under to Secretary, Securities and Exchange Defined Terms ‘‘In-the-Money’’ and
Rule 19b–4(f)(6) 17 normally does not Commission, 100 F Street NE, ‘‘Out-of-the-Money’’ in Chapter I,
become operative prior to 30 days after Washington, DC 20549–1090. Section 1
the date of the filing. However, Rule All submissions should refer to File
19b–4(f)(6)(iii) 18 permits the Number SR–Phlx–2018–77. This file December 7, 2018.
Commission to designate a shorter time number should be included on the Pursuant to Section 19(b)(1) of the
if such action is consistent with the subject line if email is used. To help the Securities Exchange Act of 1934
protection of investors and the public Commission process and review your (‘‘Act’’),1 and Rule 19b–4 thereunder,2
interest. The Exchange has asked the comments more efficiently, please use notice is hereby given that on November
Commission to waive the 30-day only one method. The Commission will 30, 2018, The Nasdaq Stock Market LLC
operative delay so that the proposal may post all comments on the Commission’s (‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the
become operative immediately upon internet website (http://www.sec.gov/ Securities and Exchange Commission
rules/sro.shtml). Copies of the (‘‘Commission’’) the proposed rule
15 15 U.S.C. 78s(b)(3)(A)(iii). submission, all subsequent change as described in Items I, II, and
16 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– amendments, all written statements III, below, which Items have been
4(f)(6)(iii) requires a self-regulatory organization to with respect to the proposed rule prepared by the Exchange. The
amozie on DSK3GDR082PROD with NOTICES1
give the Commission written notice of its intent to
file the proposed rule change, along with a brief change that are filed with the Commission is publishing this notice to
description and the text of the proposed rule Commission, and all written solicit comments on the proposed rule
change, at least five business days prior to the date change from interested persons.
of filing of the proposed rule change, or such 19 For purposes only of waiving the 30-day
shorter time as designated by the Commission. The operative delay, the Commission has also
Exchange has satisfied this requirement. 20 17 CFR 200.30–3(a)(12).
considered the proposed rule’s impact on
17 17 CFR 240.19b–4(f)(6). 1 15 U.S.C. 78s(b)(1).
efficiency, competition, and capital formation. See
18 17 CFR 240.19b–4(f)(6)(iii). 15 U.S.C. 78c(f). 2 17 CFR 240.19b–4.
VerDate Sep<11>2014 18:39 Dec 11, 2018 Jkt 247001 PO 00000 Frm 00115 Fmt 4703 Sfmt 4703 E:\FR\FM\12DEN1.SGM 12DEN1](https://thefederalregister.org/doc/83_FR_64175/page/3.svg)
Document Created: 2018-12-12 01:40:00
Document Modified: 2018-12-12 01:40:00
| 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 63937 |
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