Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 925 To Create a Limited Exception to the Exchange's Procedures To Designate an Inactive Nominee as an Effective Permit Holder Intra-Day and Make a Non-Substantive Change to the Pricing Schedule, 39639-39641 [2017-17548]
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Federal Register / Vol. 82, No. 160 / Monday, August 21, 2017 / Notices
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
ISE–2017–79 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–ISE–2017–79. 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 (https://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 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–ISE–
2017–79 and should be submitted on or
before September 11, 2017.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–17550 Filed 8–18–17; 8:45 am]
asabaliauskas on DSKBBXCHB2PROD with NOTICES
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–81401; File No. SR–Phlx–
2017–68]
Self-Regulatory Organizations;
NASDAQ PHLX LLC; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change To Amend Rule
925 To Create a Limited Exception to
the Exchange’s Procedures To
Designate an Inactive Nominee as an
Effective Permit Holder Intra-Day and
Make a Non-Substantive Change to the
Pricing Schedule
August 15, 2017.
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 August 7,
2017 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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to (i) amend
Rule 925 to create a limited exception
to the Exchange’s existing procedures to
designate an Inactive Nominee as an
effective permit holder and (ii) make a
non-substantive change to its Pricing
Schedule related to the fees assessed to
Inactive Nominees.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://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.
1 15
18 17
CFR 200.30–3(a)(12).
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18:37 Aug 18, 2017
2 17
Jkt 241001
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00084
Fmt 4703
Sfmt 4703
39639
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 (i) amend Rule 925 to create
a limited exception to the Exchange’s
existing procedures to designate an
Inactive Nominee 3 as an effective
permit holder and (ii) make a nonsubstantive change to its Pricing
Schedule related to the fees assessed to
Inactive Nominees.
Rule 925
Today, the Exchange allows members
on the Exchange’s trading floor to
designate an ‘‘Inactive Nominee’’
pursuant to Rule 925. Rule 925(i)
requires, among other criteria, that an
individual must be approved as eligible
to hold a permit in accordance with the
Exchange’s By-Laws and Rules in order
to be eligible for Inactive Nominee
status. Additionally, the member
organization with whom an Inactive
Nominee is affiliated must pay an
Inactive Nominee Fee for the privilege
of maintaining the Inactive Nominee
status.4 Furthermore, the Rule stipulates
that an Inactive Nominee does not have
any rights or privileges of a permit
holder unless and until the Inactive
Nominee becomes an effective permit
holder and all applicable Exchange fees
are paid.
When a member organization desires
to designate an Inactive Nominee as an
effective permit holder, Rule 925(ii)(a)
states that the member organization is
required to notify the Exchange’s
3 The term ‘‘inactive nominee’’ shall mean a
natural person associated with and designated as
such by a member organization and who has been
approved for such status and is registered as such
with the Membership Department. An inactive
nominee shall have no rights or privileges under a
permit unless and until said inactive nominee
becomes admitted as a member of the Exchange
pursuant to the By-Laws and Rules of the Exchange.
An inactive nominee merely stands ready to
exercise rights under a permit upon notice by the
member organization to the Membership
Department on an expedited basis. See Rule 1(l).
4 The Exchange currently charges an Inactive
Nominee Fee of $600 for a six month period, which
will be assessed to the member organization at a
rate of $100 per month for the applicable six month
period unless the member organization provides
proper notice of its intent to terminate an inactive
nominee prior to the first day of the next billing
month. An inactive nominee’s status expires after
six months unless it has been reaffirmed in writing
by the member organization or is sooner terminated.
A member organization will be assessed the
Inactive Nominee Fee every time the status is
reaffirmed. See the Exchange’s Pricing Schedule at:
https://nasdaqphlx.cchwallstreet.com/
NASDAQPHLXTools/
PlatformViewer.asp?selectednode=chp_1_4_
10&manual=%2Fnasda
qomxphlx%2Fphlx%2Fphlx-rulesbrd%2F.
E:\FR\FM\21AUN1.SGM
21AUN1
39640
Federal Register / Vol. 82, No. 160 / Monday, August 21, 2017 / Notices
Membership Department, in writing,
prior to the opening of trading on any
business day the name of such Inactive
Nominee. Further, the notice must
identify the name of the permit holder
that the Inactive Nominee will be acting
on behalf of as well as the expected
duration that such Inactive Nominee
will remain activated.5
The Exchange now proposes to create
a limited exception to the Exchange’s
existing procedures to designate an
Inactive Nominee as an effective permit
holder. In particular, the Exchange
proposes to adopt a new provision at
Rule 925(ii)(b) to permit member
organizations to designate an Inactive
Nominee intra-day in the event of an
unforeseen emergency,6 provided that
such intra-day designations must be
approved by the Exchange’s Chief
Regulatory Officer (‘‘CRO’’) or his/her
designee prior to such Inactive Nominee
becoming an effective permit holder.
Other than to reduce the time period
and to require prior approval of the CRO
or his/her designee in the manner
described above, the Exchange is not
proposing any other changes to its
existing procedures to designate an
Inactive Nominee as an effective permit
holder. Therefore, if a member
organization seeks to obtain coverage on
the trading floor intra-day due to
unforeseen circumstances such as
sudden illness, the proposed rule would
still require the member organization to
notify the Membership Department, in
writing, of its desire to designate an
Inactive Nominee as an effective permit
holder intra-day. The notice must
contain all of the information required
under paragraph (ii)(a) (i.e., the name of
such Inactive Nominee, the name of the
permit holder that the Inactive Nominee
will be acting on behalf of, and the
expected duration that such Inactive
Nominee will remain activated). Finally,
the CRO or his/her designee must
approve the member organization’s
intra-day designation in order for the
asabaliauskas on DSKBBXCHB2PROD with NOTICES
5 Inactive
Nominees are essentially a pool of
eligible individuals who can substitute for traders
on the Exchange trading floor. The Inactive
Nominee allows a member to have flexibility in
obtaining coverage on the trading floor. An Inactive
Nominee stands ready to assume a membership
upon notice by the member requesting that a
specific permit be transferred intra-firm on an
expedited and temporary basis. This transfer allows
an Inactive Nominee to become an effective member
of the Exchange. For example, an Inactive Nominee
might serve on behalf of a trader who needs to take
leave for surgery, or could serve when a trader takes
vacation leave. This allows a member organization
to have full staff available to conduct business on
the Exchange trading floor.
6 Such circumstances include sudden illness,
family emergencies or other unavoidable factors.
VerDate Sep<11>2014
18:37 Aug 18, 2017
Jkt 241001
Inactive Nominee to become an effective
permit holder.
The Exchange believes that the
proposed rule change is reasonable and
would serve to enhance the application
of Rule 925 by allowing members to
quickly obtain coverage on the trading
floor in limited cases where an
unforeseen emergency arises intra-day,
therefore making it impossible for a
member to notify the Membership
Department within the required time
period under the current Rule. While
these extraordinary circumstances rarely
arise, the proposed rule change would
give the CRO (or his/her designee in the
CRO’s absence) the flexibility to
approve the intra-day designation so
that members are not adversely affected
by unforeseen factors that prevented
them from notifying the Exchange
within the allotted time period. Because
each individual on the floor is required
to have a permit in order to trade, such
emergencies could especially affect
members who have small propriety
businesses on the Exchange trading
floor and therefore rely on these Inactive
Nominees as their only substitutes.
Similarly, since the time the Exchange
adopted rules establishing the Inactive
Nominee,7 the number of permit holders
associated with a member organization
on the Exchange trading floor has
decreased. For the foregoing reasons, the
Exchange seeks to address these
extraordinary circumstances and allow
its members to obtain coverage in such
cases so that they may continue to
conduct their businesses efficiently. The
Exchange further believes that requiring
the CRO’s approval of the intra-day
designation would serve as a check to
ensure that such designations would be
made on a limited case-by-case basis.
Pricing Schedule
The Exchange is also proposing a nonsubstantive amendment to its Pricing
Schedule at Section VI.A relating to the
fees assessed to Inactive Nominees. In
particular, Section VI.A of the
Exchange’s Pricing Schedule states that
an Inactive Nominee is also assessed the
Trading Floor Personnel Registration
Fee.8 As part of a previous filing, the
Exchange renamed this fee as a ‘‘Clerk
Fee’’ but inadvertently retained the
reference to ‘‘Trading Floor Personnel
Registration Fee’’ in Section VI.A.9 The
7 See Securities Exchange Act Release No. 39851
(April 10, 1998), 63 FR 19282 (April 17, 1998) (SR–
PHLX–97–35) (order approving rule changes to
establish the Inactive Nominee).
8 This fee is in addition to the Inactive Nominee
Fee. See note 4 above.
9 See Securities Exchange Release No. 66004
(December 19, 2011), 76 FR 80442 (December 23,
2011) (SR–Phlx–2011–155).
PO 00000
Frm 00085
Fmt 4703
Sfmt 4703
Exchange now proposes to replace the
term ‘‘Trading Floor Personnel
Registration Fee’’ with ‘‘Clerk Fee’’ in
this section. The Exchange will
continue to assess Inactive Nominees
the Clerk Fee as it is being assessed
today.10
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,11 in general, and furthers the
objectives of Section 6(b)(5) of the Act,12
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.
As discussed above, the Exchange
believes that the proposed changes will
allow members additional flexibility in
obtaining coverage on the trading floor.
Inactive Nominees are essentially a pool
of eligible individuals who can
substitute for traders on the Exchange’s
floor. By allowing members flexibility in
obtaining coverage intra-day in limited
circumstances as described above, the
Exchange believes that the proposal
would assist in facilitating the smooth
functioning of its market operations,
consistent with Section 6(b)(5) of the
Act. The Exchange further believes that
the proposed changes would allow
members to have a prepared roster of
substitute traders who are available
even in unforeseen emergencies, which
should help to facilitate transactions in
securities and remove impediments to,
and perfect the mechanism of, a free and
open market, also consistent with
Section 6(b)(5) of the Act.
Finally, the Exchange believes it is
appropriate to make the non-substantive
change in its Pricing Schedule to
replace the obsolete reference to
‘‘Trading Floor Personnel Registration
Fee’’ with ‘‘Clerk Fee’’ so that members
and investors have a clear and accurate
understanding of the Exchange’s rules.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
Because the purpose of the proposal
is to provide members with additional
flexibility to obtain coverage intra-day
in limited circumstances and to make a
non-substantive change as discussed
10 Today, an Inactive Nominee is assessed a Clerk
Fee of $100 per month. See Section VI.A of the
Pricing Schedule at: https://nasdaqphlx.cchwall
street.com/NASDAQPHLXTools/
PlatformViewer.asp?selectednode=chp_1_4_
10&manual=%2Fnasda
qomxphlx%2Fphlx%2Fphlx-rulesbrd%2F.
11 15 U.S.C. 78f(b).
12 15 U.S.C. 78f(b)(5).
E:\FR\FM\21AUN1.SGM
21AUN1
Federal Register / Vol. 82, No. 160 / Monday, August 21, 2017 / Notices
above, 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.
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 13 and
subparagraph (f)(6) of Rule 19b–4
thereunder.14
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:
asabaliauskas on DSKBBXCHB2PROD with NOTICES
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
Phlx–2017–68 on the subject line.
U.S.C. 78s(b)(3)(A)(iii).
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.
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–2017–68. 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 (https://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 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–
2017–68 and should be submitted on or
before September 11, 2017.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–17548 Filed 8–18–17; 8:45 am]
BILLING CODE 8011–01–P
13 15
14 17
VerDate Sep<11>2014
18:37 Aug 18, 2017
Jkt 241001
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–81404; File No. SR–
BatsBZX–2017–52]
Self-Regulatory Organizations; Bats
BZX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change to Rule 21.2,
Days and Hours of Business
August 15, 2017.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on August 2,
2017, Bats BZX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BZX’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Exchange has
designated this proposal as a ‘‘noncontroversial’’ proposed rule change
pursuant to Section 19(b)(3)(A) of the
Act 3 and Rule 19b–4(f)(6)(iii)
thereunder,4 which renders it effective
upon filing with the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange filed a proposal to
amend Rule 21.2, Days and Hours of
Business.
The text of the proposed rule change
is available at the Exchange’s Web site
at www.bats.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 parts of such
statements.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6)(iii).
2 17
15 17
PO 00000
CFR 200.30–3(a)(12).
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39641
E:\FR\FM\21AUN1.SGM
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]]>Agencies
[Federal Register Volume 82, Number 160 (Monday, August 21, 2017)]
[Notices]
[Pages 39639-39641]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-17548]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-81401; File No. SR-Phlx-2017-68]
Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Rule 925
To Create a Limited Exception to the Exchange's Procedures To Designate
an Inactive Nominee as an Effective Permit Holder Intra-Day and Make a
Non-Substantive Change to the Pricing Schedule
August 15, 2017.
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 August 7, 2017 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.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to (i) amend Rule 925 to create a limited
exception to the Exchange's existing procedures to designate an
Inactive Nominee as an effective permit holder and (ii) make a non-
substantive change to its Pricing Schedule related to the fees assessed
to Inactive Nominees.
The text of the proposed rule change is available on the Exchange's
Web site at https://nasdaqphlx.cchwallstreet.com/ 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 (i) amend Rule 925 to
create a limited exception to the Exchange's existing procedures to
designate an Inactive Nominee \3\ as an effective permit holder and
(ii) make a non-substantive change to its Pricing Schedule related to
the fees assessed to Inactive Nominees.
---------------------------------------------------------------------------
\3\ The term ``inactive nominee'' shall mean a natural person
associated with and designated as such by a member organization and
who has been approved for such status and is registered as such with
the Membership Department. An inactive nominee shall have no rights
or privileges under a permit unless and until said inactive nominee
becomes admitted as a member of the Exchange pursuant to the By-Laws
and Rules of the Exchange. An inactive nominee merely stands ready
to exercise rights under a permit upon notice by the member
organization to the Membership Department on an expedited basis. See
Rule 1(l).
---------------------------------------------------------------------------
Rule 925
Today, the Exchange allows members on the Exchange's trading floor
to designate an ``Inactive Nominee'' pursuant to Rule 925. Rule 925(i)
requires, among other criteria, that an individual must be approved as
eligible to hold a permit in accordance with the Exchange's By-Laws and
Rules in order to be eligible for Inactive Nominee status.
Additionally, the member organization with whom an Inactive Nominee is
affiliated must pay an Inactive Nominee Fee for the privilege of
maintaining the Inactive Nominee status.\4\ Furthermore, the Rule
stipulates that an Inactive Nominee does not have any rights or
privileges of a permit holder unless and until the Inactive Nominee
becomes an effective permit holder and all applicable Exchange fees are
paid.
---------------------------------------------------------------------------
\4\ The Exchange currently charges an Inactive Nominee Fee of
$600 for a six month period, which will be assessed to the member
organization at a rate of $100 per month for the applicable six
month period unless the member organization provides proper notice
of its intent to terminate an inactive nominee prior to the first
day of the next billing month. An inactive nominee's status expires
after six months unless it has been reaffirmed in writing by the
member organization or is sooner terminated. A member organization
will be assessed the Inactive Nominee Fee every time the status is
reaffirmed. See the Exchange's Pricing Schedule at: https://nasdaqphlx.cchwallstreet.com/NASDAQPHLXTools/PlatformViewer.asp?selectednode=chp_1_4_10&manual=%2Fnasdaqomxphlx%2Fphlx%2Fphlx-rulesbrd%2F.
---------------------------------------------------------------------------
When a member organization desires to designate an Inactive Nominee
as an effective permit holder, Rule 925(ii)(a) states that the member
organization is required to notify the Exchange's
[[Page 39640]]
Membership Department, in writing, prior to the opening of trading on
any business day the name of such Inactive Nominee. Further, the notice
must identify the name of the permit holder that the Inactive Nominee
will be acting on behalf of as well as the expected duration that such
Inactive Nominee will remain activated.\5\
---------------------------------------------------------------------------
\5\ Inactive Nominees are essentially a pool of eligible
individuals who can substitute for traders on the Exchange trading
floor. The Inactive Nominee allows a member to have flexibility in
obtaining coverage on the trading floor. An Inactive Nominee stands
ready to assume a membership upon notice by the member requesting
that a specific permit be transferred intra-firm on an expedited and
temporary basis. This transfer allows an Inactive Nominee to become
an effective member of the Exchange. For example, an Inactive
Nominee might serve on behalf of a trader who needs to take leave
for surgery, or could serve when a trader takes vacation leave. This
allows a member organization to have full staff available to conduct
business on the Exchange trading floor.
---------------------------------------------------------------------------
The Exchange now proposes to create a limited exception to the
Exchange's existing procedures to designate an Inactive Nominee as an
effective permit holder. In particular, the Exchange proposes to adopt
a new provision at Rule 925(ii)(b) to permit member organizations to
designate an Inactive Nominee intra-day in the event of an unforeseen
emergency,\6\ provided that such intra-day designations must be
approved by the Exchange's Chief Regulatory Officer (``CRO'') or his/
her designee prior to such Inactive Nominee becoming an effective
permit holder. Other than to reduce the time period and to require
prior approval of the CRO or his/her designee in the manner described
above, the Exchange is not proposing any other changes to its existing
procedures to designate an Inactive Nominee as an effective permit
holder. Therefore, if a member organization seeks to obtain coverage on
the trading floor intra-day due to unforeseen circumstances such as
sudden illness, the proposed rule would still require the member
organization to notify the Membership Department, in writing, of its
desire to designate an Inactive Nominee as an effective permit holder
intra-day. The notice must contain all of the information required
under paragraph (ii)(a) (i.e., the name of such Inactive Nominee, the
name of the permit holder that the Inactive Nominee will be acting on
behalf of, and the expected duration that such Inactive Nominee will
remain activated). Finally, the CRO or his/her designee must approve
the member organization's intra-day designation in order for the
Inactive Nominee to become an effective permit holder.
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\6\ Such circumstances include sudden illness, family
emergencies or other unavoidable factors.
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The Exchange believes that the proposed rule change is reasonable
and would serve to enhance the application of Rule 925 by allowing
members to quickly obtain coverage on the trading floor in limited
cases where an unforeseen emergency arises intra-day, therefore making
it impossible for a member to notify the Membership Department within
the required time period under the current Rule. While these
extraordinary circumstances rarely arise, the proposed rule change
would give the CRO (or his/her designee in the CRO's absence) the
flexibility to approve the intra-day designation so that members are
not adversely affected by unforeseen factors that prevented them from
notifying the Exchange within the allotted time period. Because each
individual on the floor is required to have a permit in order to trade,
such emergencies could especially affect members who have small
propriety businesses on the Exchange trading floor and therefore rely
on these Inactive Nominees as their only substitutes. Similarly, since
the time the Exchange adopted rules establishing the Inactive
Nominee,\7\ the number of permit holders associated with a member
organization on the Exchange trading floor has decreased. For the
foregoing reasons, the Exchange seeks to address these extraordinary
circumstances and allow its members to obtain coverage in such cases so
that they may continue to conduct their businesses efficiently. The
Exchange further believes that requiring the CRO's approval of the
intra-day designation would serve as a check to ensure that such
designations would be made on a limited case-by-case basis.
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\7\ See Securities Exchange Act Release No. 39851 (April 10,
1998), 63 FR 19282 (April 17, 1998) (SR-PHLX-97-35) (order approving
rule changes to establish the Inactive Nominee).
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Pricing Schedule
The Exchange is also proposing a non-substantive amendment to its
Pricing Schedule at Section VI.A relating to the fees assessed to
Inactive Nominees. In particular, Section VI.A of the Exchange's
Pricing Schedule states that an Inactive Nominee is also assessed the
Trading Floor Personnel Registration Fee.\8\ As part of a previous
filing, the Exchange renamed this fee as a ``Clerk Fee'' but
inadvertently retained the reference to ``Trading Floor Personnel
Registration Fee'' in Section VI.A.\9\ The Exchange now proposes to
replace the term ``Trading Floor Personnel Registration Fee'' with
``Clerk Fee'' in this section. The Exchange will continue to assess
Inactive Nominees the Clerk Fee as it is being assessed today.\10\
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\8\ This fee is in addition to the Inactive Nominee Fee. See
note 4 above.
\9\ See Securities Exchange Release No. 66004 (December 19,
2011), 76 FR 80442 (December 23, 2011) (SR-Phlx-2011-155).
\10\ Today, an Inactive Nominee is assessed a Clerk Fee of $100
per month. See Section VI.A of the Pricing Schedule at: https://nasdaqphlx.cchwallstreet.com/NASDAQPHLXTools/PlatformViewer.asp?selectednode=chp_1_4_10&manual=%2Fnasdaqomxphlx%2Fphlx%2Fphlx-rulesbrd%2F.
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\11\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\12\ 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.
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\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(5).
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As discussed above, the Exchange believes that the proposed changes
will allow members additional flexibility in obtaining coverage on the
trading floor. Inactive Nominees are essentially a pool of eligible
individuals who can substitute for traders on the Exchange's floor. By
allowing members flexibility in obtaining coverage intra-day in limited
circumstances as described above, the Exchange believes that the
proposal would assist in facilitating the smooth functioning of its
market operations, consistent with Section 6(b)(5) of the Act. The
Exchange further believes that the proposed changes would allow members
to have a prepared roster of substitute traders who are available even
in unforeseen emergencies, which should help to facilitate transactions
in securities and remove impediments to, and perfect the mechanism of,
a free and open market, also consistent with Section 6(b)(5) of the
Act.
Finally, the Exchange believes it is appropriate to make the non-
substantive change in its Pricing Schedule to replace the obsolete
reference to ``Trading Floor Personnel Registration Fee'' with ``Clerk
Fee'' so that members and investors have a clear and accurate
understanding of the Exchange's rules.
B. Self-Regulatory Organization's Statement on Burden on Competition
Because the purpose of the proposal is to provide members with
additional flexibility to obtain coverage intra-day in limited
circumstances and to make a non-substantive change as discussed
[[Page 39641]]
above, 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.
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 \13\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\14\
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\13\ 15 U.S.C. 78s(b)(3)(A)(iii).
\14\ 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 (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-Phlx-2017-68 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-2017-68. 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 (https://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 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-2017-68 and should be
submitted on or before September 11, 2017.
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. 2017-17548 Filed 8-18-17; 8:45 am]
BILLING CODE 8011-01-P
