[Federal Register Volume 81, Number 33 (Friday, February 19, 2016)]
[Notices]
[Pages 8571-8573]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-03388]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-77125; File No. SR-Phlx-2016-14]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
Rule 1066
February 12, 2016.
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 February 4, 2016, 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, II,
and III, below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to
[[Page 8572]]
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 Substance
of the Proposed Rule Change
The Exchange proposes to amend Rule 1066, Certain Types of Floor-
Based (Non-PHLX XL) Orders Defined, as described further below.
The text of the proposed rule change is available on the Exchange's
Web site at http://nasdaqomxphlx.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 proposal is to update Rule 1066 in several ways
by deleting obsolete provisions. Rule 1066 describes the order types
that can be executed on the options trading floor, as opposed to
electronically through the Phlx XL trading system.\3\
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\3\ See Rule 1080.
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First, the Exchange proposes to delete the following two order
types related to the opening: (i) Opening-only-market order; \4\ and
(ii) limit on opening order.\5\ Both of these order types became
obsolete when the Exchange automated the opening process.\6\ Rule
1017(c), Orders Represented by Floor Brokers, clearly states that to be
considered in the determination of the opening price and to participate
in the opening trade, orders represented by Floor Brokers must be
entered onto the book electronically.\7\ Thus, these order types that
are only valid on the opening can no longer be entered manually under
Rule 1066.\8\
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\4\ An opening-only-market order is a market order which is to
be executed in whole or in part during the opening rotation of an
options series or not at all. See Rule 1066(c)(5).
\5\ A limit on opening order is a limit order which is to be
executed in whole or in part during the opening rotation of an
options series or not at all. See Rule 1066(c)(9).
\6\ In May 2009, the Exchange enhanced its trading system,
including automating the opening process. See Securities Exchange
Act Release No. 59995 (May 28, 2009), 74 FR 26750 (June 3, 2009)
(SR-Phlx-2009-32).
\7\ Floor Brokers enter orders onto the electronic book using
the Options Floor Broker Management System. See Rule 1063(e).
\8\ Rule 1080(b)(i)(A) permits the electronic entry of these
order types.
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Second, the Exchange proposes to delete Commentary .01 to Rule
1066, which governs spread, straddle and combination orders respecting
foreign currency options. This commentary is obsolete because the
Exchange no longer lists American style foreign currency options such
that there can no longer be a spread, straddle or combination order
involving American and European style contracts.\9\ The Exchange
continues to list European style foreign currency options contracts.
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\9\ American style options can be exercised at any time until
they expire. See Rule 1000(b)(34).
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \10\ in general, and furthers the objectives of Section
6(b)(5) of the Act \11\ in particular, in that it is designed to
promote just and equitable principles of trade and to protect investors
and the public interest, by updating Rule 1066 to eliminate obsolete
provisions. Obsolete opening-related order types could potentially
confuse investors, as could references to an expiration style that is
not offered respecting foreign currency options.
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\10\ 15 U.S.C. 78f(b).
\11\ 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 proposal merely updates
obsolete provisions. The proposal affects all participants who trade on
the options trading floor equally, such that it does not impact intra-
market competition.
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 \12\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\13\
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\12\ 15 U.S.C. 78s(b)(3)(a)(iii).
\13\ 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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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 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-2016-14 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-2016-14. 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
[[Page 8573]]
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 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; 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-2016-14 and should be
submitted on or before March 11, 2016.
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\14\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-03388 Filed 2-18-16; 8:45 am]
BILLING CODE 8011-01-P