[Federal Register Volume 78, Number 204 (Tuesday, October 22, 2013)]
[Notices]
[Pages 62852-62853]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-24639]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-70629; File No. SR-Phlx-2013-100]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Delay the
Implementation of the Options Floor Broker Management System
October 8, 2013.
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 2, 2013, NASDAQ OMX PHLX LLC (``Phlx'' or ``Exchange'')
filed with the Securities and Exchange Commission (``SEC'' or
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the Exchange. The Commission
is publishing this notice to solicit comments on the proposed rule
change from interested persons.
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\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 the
Substance of the Proposed Rule Change
The Exchange proposes to delay the implementation of its new
Options Floor Broker Management System.
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 proposal is to delay the implementation of the
Exchange's enhancements to the Options Floor Broker Management System
(``FBMS''). The Exchange received approval to implement the
enhancements as of June 1, 2013,\3\ and delayed implementation until
July 2013 \4\ and again until September 2013.\5\ At this time, the
Exchange needs additional time in order to complete the applicable
technology work. The delay is not as a result of major technology
changes from the original proposal and no rule changes are being made;
rather, the Exchange has been working to, generally, provide more
useful interfaces for the ultimate user, the Floor Broker.
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\3\ Securities Exchange Act Release No. 69471 (April 29, 2013),
78 FR 26096 (May 3, 2013) (SR-Phlx-2013-09).
\4\ Securities Exchange Act Release No. 69811 (June 20, 2013),
78 FR 38422 (June 26, 2013) (SR-Phlx-2013-67).
\5\ Securities Exchange Act Release No. 70141 (August 8, 2013),
78 FR 49565 (August 14, 2013) (SR-Phlx-2013-83).
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Accordingly, the Exchange seeks to be able to implement the changes
by the end of December 2013; the Exchange will announce the specific
date in advance through an Options Trader Alert.
Today, FBMS enables Floor Brokers and/or their employees to enter,
route, and report transactions stemming from options orders received on
the Exchange. FBMS also establishes an electronic audit trail for
options orders represented by Floor Brokers on the Exchange. Floor
Brokers can use FBMS to submit orders to Phlx XL, rather than executing
the orders in the trading crowd.
With the new FBMS, all options transactions on the Exchange
involving at least one Floor Broker would be required to be executed
through FBMS. In connection with order execution, the Exchange will
allow FBMS to execute two-sided orders entered by Floor Brokers,
including multi-leg orders up to 15 legs, after the Floor Broker has
represented the orders in the trading crowd. FBMS will also provide
Floor Brokers with an enhanced functionality called the complex
calculator that will calculate and display a suggested price of each
individual component of a multi-leg order, up to 15 legs, submitted on
a net debit or credit basis.
The Exchange still intends to implement these enhancements with a
trial period of two to four weeks, to be determined by the Exchange,
during which the new FBMS enhancements and related rules would operate
along with the existing FBMS and rules. The Exchange will announce the
beginning and end of the trial period in advance.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b)
[[Page 62853]]
of the Act \6\ in general, and furthers the objectives of Section
6(b)(5) of the Act \7\ in particular, in that it is designed to promote
just and equitable principles of trade, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general to protect investors and the public interest,
by enhancing FBMS to make the Exchange's markets more efficient, to the
benefit of the investing public. Although the Exchange needs additional
time to finalize the enhancements, the delay is expected to be short
and will involve advance notice to the Exchange membership.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
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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. The Exchange continues to
believe, as it stated when proposing these enhancements, that these
enhancements to FBMS should result in the Exchange's trading floor
operating in a more efficient way, which should help it compete with
other floor-based exchanges and help the Exchange's Floor Brokers
compete with floor brokers on other options exchanges.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \8\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\9\
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file 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.
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A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days after the date of filing.\10\ However,
Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter
time if such action is consistent with the protection of investors and
the public interest.\11\ The Exchange has requested that the Commission
waive the 30-day operative delay so that the Exchange can implement the
enhancements once they are ready from a technology perspective.
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\10\ 17 CFR 240.19b-4(f)(6)(iii).
\11\ Id.
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The Commission believes that the waiver of the 30-day operative
delay is consistent with the protection of investors and the public
interest as it will clarify that the delayed implementation of the FBMS
will be effective and operative immediately. In addition, because the
proposal only delays the implementation date of the FBMS and does not
make any additional changes to the FBMS itself, it does not raise any
novel regulatory issues. Therefore, the Commission designates the
proposal operative upon filing.\12\
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\12\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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.\13\ If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule change should be approved or disapproved.\14\
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\13\ 15 U.S.C. 78s(b)(3)(C).
\14\ Id.
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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-2013-100 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-Phlx-2013-100. 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 Web site (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 Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available
for inspection and copying at the principal offices of the Exchange.
All comments received will be posted without change; the Commission
does not edit personal identifying information from submissions. You
should submit only information that you wish to make available
publicly. All submissions should refer to File Number SR-Phlx-2013-100,
and should be submitted on or before November 12, 2013.
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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-24639 Filed 10-21-13; 8:45 am]
BILLING CODE 8011-01-P