Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule ChangeTo Amend Rule 1064


Federal Register, Volume 81 Issue 70 (Tuesday, April 12, 2016)

Federal Register Volume 81, Number 70 (Tuesday, April 12, 2016)


Pages 21631-21632

From the Federal Register Online via the Government Publishing Office

FR Doc No: 2016-08305



Release No. 34-77545; File No. SR-Phlx-2016-44

Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule ChangeTo Amend Rule 1064

April 6, 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 April 1, 2016, NASDAQ 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 solicit comments on the proposed rule change from interested persons.


\1\ 15 U.S.C. 78s(b)(1).

\2\ 17 CFR 240.19b-4.


  1. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change

    The Exchange proposes to delete two incorrect cross-references in Rule 1064, Crossing, Facilitation and Solicited Orders.

    The text of the proposed rule change is detailed below: Proposed new language is in italics and proposed deletions are in brackets.

    * * * * *


    * * * * *

    Options Rules

    Rules Applicable To Trading of Options on Stocks, Exchange-Traded Fund Shares and Foreign Currencies (Rules 1000-1095)

    * * * * *

    Rule 1064. Crossing, Facilitation and Solicited Orders

    (a)-(c) No change.

    (d) No change.

    (i)-(ii) No change.

    (iii) No change.

    (A)-(F) No change.

    (G) prior to entering tied hedge orders on behalf of customers, the member or member organization must deliver to the customer a written notification informing the customer that his order may be executed using the Exchange's tied hedge procedures. The written notification must disclose the terms and conditions contained in this Commentary herein and be in a form approved by the Exchange. A combination option and hedging position offered in reliance on this Commentary .04 provision shall be referred to as a ``tied hedge'' order.

    (H)-(I) No change.

    (e) No change.

    Commentary: ------------------

    .01-.02 No change.

    * * * * *

  2. 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.

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

      1. Purpose

        The purpose of the filing is to correct Rule 1064 by deleting two references to the ``commentary'' to the rule, which no longer exists. The Exchange recently deleted Commentary .04 \3\ by incorporating its provisions into paragraph (d)(iii), because it was related to the anticipatory hedging provisions in paragraph (d). The Exchange inadvertently omitted the deletion of these two references to Commentary .04 in new Rule 1064(d)(iii)(G). Accordingly, this provision refers to a commentary that does not exist.


        \3\ Securities Exchange Act Release No. 76984 (January 28, 2016), 81 FR 5796 (February 3, 2016) (SR-Phlx-2016-07).


      2. Statutory Basis

        The Exchange believes that its proposal is consistent with Section 6(b) of the Act \4\ in general, and furthers the objectives of Section 6(b)(5) of the Act \5\ in particular, in that it is designed to promote just and equitable principles of trade and to protect investors and the public interest by correcting a provision, which should help prevent confusion and ensure the accuracy of the rulebook.


        \4\ 15 U.S.C. 78f(b).

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


        Page 21632

    2. 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. This minor correction does not impact competition.

    3. 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.

  3. 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 \6\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\7\


    \6\ 15 U.S.C. 78s(b)(3)(a)(iii).

    \7\ 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.


    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.

  4. 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 (; or

    Send an email to Please include File Number SR-Phlx-2016-44 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-2016-44. 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 ( 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 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-2016-44 and should be submitted on or before May 3, 2016.

    For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\8\


    \8\ 17 CFR 200.30-3(a)(12).


    Robert W. Errett,

    Deputy Secretary.

    FR Doc. 2016-08305 Filed 4-11-16; 8:45 am

    BILLING CODE 8011-01-P