Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Adopt a Rule Governing Cancellation of Orders in the Event of an Issuer Corporate Action Related to a Dividend, Payment or Distribution, and To Make Related Clarifications to Rule Text, 32501-32503 [2013-12794]

Download as PDF Federal Register / Vol. 78, No. 104 / Thursday, May 30, 2013 / Notices 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: • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rulecomments@sec.gov. Please include File Number SR-Phlx-2013–55 on the subject line. Paper Comments TKELLEY on DSK3SPTVN1PROD with NOTICES • 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-2013–55. 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-Phlx2013–55 and should be submitted on or before June 20, 2013. 16:25 May 29, 2013 [FR Doc. 2013–12795 Filed 5–29–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Electronic Comments VerDate Mar<15>2010 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.20 Kevin M. O’Neill, Deputy Secretary. Jkt 229001 [Release No. 34–69632; File No. SR–Phlx– 2013–56] Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Adopt a Rule Governing Cancellation of Orders in the Event of an Issuer Corporate Action Related to a Dividend, Payment or Distribution, and To Make Related Clarifications to Rule Text May 23, 2013. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on May 16, 2013, NASDAQ OMX PHLX LLC (‘‘Phlx’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) a 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 adopt a rule governing cancellation of orders in the event of an issuer corporate action related to a dividend, payment or distribution, and to make related clarifications to rule text. The text of the proposed rule change is available on the Exchange’s Web site at https:// nasdaqomxphlx.cchwallstreet.com/ nasdaqomxphlx/phlx/, 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 20 17 CFR 200.30–3(a)(12). U.S.C.78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00137 Fmt 4703 Sfmt 4703 32501 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 is proposing to adopt Rule 3311 to address the treatment of quotes/ orders in securities that are the subject of issuer corporate actions related to a dividend, payment or distribution (a ‘‘corporate action’’). The rule will apply to any trading interest that is carried on the PSX book overnight.4 The proposed Phlx rule would provide that in the event of any corporate action, Phlx will cancel open quote/orders on the ex-date of the action, thereby imposing on the member that entered the order the responsibility for determining whether it wishes to reenter the order and if so, at what price and size. The cancellation would occur immediately prior to the opening of the Phlx Equities Market at 8 a.m. on the ex-date of the corporate action, and the member would receive a cancellation notice, so that it could, if it desired, reenter the order at the commencement of trading on the exdate. In addition, Phlx is proposing to amend Rule 3306(b) to make it clear that quotes do not necessarily remain open overnight. Specifically, Phlx is modifying a description of open quotes, the original intent of which is unclear and that accordingly may result in confusion.5 The sentence in question 4 Phlx notes that its market participants have not historically made use of such good-‘till-cancelled trading interest, but believes that a rule should be adopted to ensure that the treatment of such orders is clearly specified by its rules. The Commission notes that Phlx stated in Form 19b–4 regarding SR– Phlx–2013–56 that the term ‘‘PSX’’ refers to NASDAQ OMX PSX. 5 The rule in question was adopted recently as part of a proposed rule change that adopted rules in effect at The NASDAQ Stock Market (‘‘NASDAQ’’) and/or NASDAQ OMX BX (‘‘BX’’) with respect to market making. Securities Exchange Act Release No. 69452 (April 25, 2013), 78 FR 25512 (May 1, 2013) (SR–Phlx–2013–24). Proposed rule changes to amend the corresponding NASDAQ and BX rules in a manner similar to this proposed rule change were filed while SR–Phlx–2013–24 was awaiting approval. See Securities Exchange Act Release No. 69454 (April 25, 2013), 78 FR 25506 (May 1, 2013) (SR–NASDAQ–2013–068); Securities Exchange Act Release No. 69456 (April 25, 2013), 78 FR 25510 (May 1, 2013) (SR–BX–2013–031). Continued E:\FR\FM\30MYN1.SGM 30MYN1 32502 Federal Register / Vol. 78, No. 104 / Thursday, May 30, 2013 / Notices appears to reflect the idea that an open quote (i.e., a quote designated to remain open at the end of the trading day) would be processed in the same manner as a System Hours GTC Order. While accurate, this statement does not reflect the fact that a quote may also accurately be described as an Attributable Order entered by a PSX Market Maker or Equities ECN (i.e., trading interest that is identified as having been entered by a particular market participant). Moreover, although an Attributable Order may be entered with a time-inforce of good-‘till-cancelled and thereby remain open overnight, such orders have not historically been used by Phlx market participants. Accordingly, Phlx believes that the focus of the current sentence on orders remaining open might imply that all quotes would remain open overnight, when as a factual matter this would be the case only to the extent a quote was designated as good-‘till-cancelled. Phlx proposes to amend the sentence to provide that ‘‘Quotes will be processed as Attributable Orders, with such timein-force designation as the PSX Market Maker or Equities ECN may assign.’’ Finally, Phlx proposes to amend the rule to capitalize the word ‘‘System’’ to reflect that it is a defined term in the rules governing PSX. TKELLEY on DSK3SPTVN1PROD with NOTICES 2. Statutory Basis Phlx believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,6 in general, and with Section 6(b)(5) of the Act 7 in particular, in that the proposal is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, 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. Specifically, Phlx believes that the change will simplify Phlx’s rule governing adjustment of open quotes/orders in the event of corporate actions by making it clear that It should be noted that although Phlx rules now permit members to register and trade as PSX Market Makers or Equities ECNs, no member has yet currently registered with such a status. Accordingly, the following discussion regarding the use and processing of quotes should be understood as not having a direct impact on any current Phlx market participants. Rather, the proposed rule change is intended to ensure that the rules that would govern such matters are clear. 6 15 U.S.C. 78f. 7 15 U.S.C. 78f(b)(5). VerDate Mar<15>2010 16:25 May 29, 2013 Jkt 229001 all such quotes/orders will be cancelled, thereby ensuring that market participants have appropriate notice of the possibility that they may either deem it advisable not to reenter such quotes/orders, or to reenter them with such adjustments to price and/or size as the market participant deems advisable to reflect the corporate action. Thus, the change will facilitate transactions in securities and perfect the mechanism of a free and open market by providing additional assurance that market participants carefully manage the trading interest that they enter into Phlx. In addition, the proposed changes to Rule 3306 are designed to improve the clarity and accuracy of that rule. 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. B. Self-Regulatory Organization’s Statement on Burden on Competition Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml ); or • Send an email to rulecomments@sec.gov. Please include File Number SR–Phlx–2013–56 on the subject line. Phlx does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended. Specifically, Phlx believes that the rule change does not affect the availability or pricing of goods or services offered by the Exchange, and therefore does not impact competition between the Exchange and others. Rather, the change is designed to adopt and clarify rules to better describe the operation of the Exchange’s trading systems, but in a manner that does not restrict the ability of members to enter and update trading interest in PSX. 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 Rule 19b– 4(f)(6) thereunder.9 8 15 U.S.C. 78s(b)(3)(A). 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. 9 17 PO 00000 Frm 00138 Fmt 4703 Sfmt 4703 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: 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–2013–56. 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 E:\FR\FM\30MYN1.SGM 30MYN1 Federal Register / Vol. 78, No. 104 / Thursday, May 30, 2013 / Notices available publicly. All submissions should refer to File Number SR–Phlx– 2013–56 and should be submitted on or before June 20, 2013. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–12794 Filed 5–29–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–69636; File No. SR–NYSEArca–2013–52] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change Proposing To List and Trade Shares of the First Trust Morningstar Futures Strategy Fund Under NYSE Arca Equities Rule 8.600 May 24, 2013. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Exchange Act’’ or ‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that, on May 15, 2013, NYSE Arca, Inc. (‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with the Securities and Exchange Commission (‘‘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. TKELLEY on DSK3SPTVN1PROD with NOTICES I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to list and trade shares of the following under NYSE Arca Equities Rule 8.600 (‘‘Managed Fund Shares’’): First Trust Morningstar Futures Strategy Fund. The text of the proposed rule change is available on the Exchange’s Web site at www.nyse.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 self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received 10 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Mar<15>2010 16:25 May 29, 2013 Jkt 229001 on the proposed rule change. The text of those 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. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to list and trade the shares (‘‘Shares’’) of the following under NYSE Arca Equities Rule 8.600, which governs the listing and trading of Managed Fund Shares on the Exchange: 3 First Trust Morningstar Futures Strategy Fund (the ‘‘Fund’’).4 The Shares will be offered by First Trust Exchange-Traded Fund V (the ‘‘Trust’’), a statutory trust organized under the laws of the State of Massachusetts and registered with the Commission as an open-end management investment company.5 The investment adviser to 3 A Managed Fund Share is a security that represents an interest in an investment company registered under the Investment Company Act of 1940 (15 U.S.C. 80a–1) (the ‘‘1940 Act’’) organized as an open-end investment company or similar entity that invests in a portfolio of securities selected by its investment adviser consistent with its investment objectives and policies. In contrast, an open-end investment company that issues Investment Company Units, listed and traded on the Exchange under NYSE Arca Equities Rule 5.2(j)(3), seeks to provide investment results that correspond generally to the price and yield performance of a specific foreign or domestic stock index, fixed income securities index or combination thereof. 4 The Commission approved NYSE Arca Equities Rule 8.600 and the listing and trading of certain funds of the PowerShares Actively Managed Exchange-Traded Fund Trust on the Exchange pursuant to Rule 8.600 in Securities Exchange Act Release No. 57619 (April 4, 2008), 73 FR 19544 (April 10, 2008) (SR–NYSEArca–2008–25). The Commission also previously approved listing and trading on the Exchange of a number of actively managed funds under Rule 8.600. See, e.g., Securities Exchange Act Release Nos. 62502 (July 15, 2010), 75 FR 42471 (July 21, 2010) (SR– NYSEArca–2010–57) (order approving listing and trading of AdvisorShares WCM/BNY Mellon Focused Growth ADR ETF); 63598 (December 22, 2010), 75 FR 82106 (December 29, 2010) (SR– NYSEArca–2010–98) (order approving listing and trading of WisdomTree Managed Futures Strategy Fund); and 66343 (February 7, 2012), 77 FR 7647 (February 13, 2012) (SR–NYSEArca–2011–85) (order approving listing and trading of five SPDR SSgA ETFs). 5 The Trust is registered under the 1940 Act. On May 18, 2012, the Trust filed with the Commission an initial registration statement on Form N–1A under the Securities Act of 1933 (15 U.S.C. 77a) (the ‘‘1933 Act’’) and under the 1940 Act relating to the Fund (File Nos. 333–181507 and 811–22709) (‘‘Registration Statement’’). The description of the operation of the Trust and the Fund herein is based, in part, on the Registration Statement. In addition, the Commission has issued an order granting certain exemptive relief to the Trust under the 1940 Act. See Investment Company Act Release No. PO 00000 Frm 00139 Fmt 4703 Sfmt 4703 32503 the Fund is First Trust Advisors L.P. (the ‘‘Adviser’’). First Trust Portfolios L.P. (the ‘‘Distributor’’) will be the principal underwriter and distributor of the Fund Shares. The Bank of New York Mellon Corporation (the ‘‘Administrator,’’ ‘‘Transfer Agent’’ or ‘‘Custodian’’) will serve as administrator, custodian and transfer agent for the Fund. Commentary .06 to Rule 8.600 provides that, if the investment adviser to the investment company issuing Managed Fund Shares is affiliated with a broker-dealer, such investment adviser shall erect a ‘‘fire wall’’ between the investment adviser and the brokerdealer with respect to access to information concerning the composition and/or changes to such investment company portfolio. In addition, Commentary .06 further requires that personnel who make decisions on the open-end fund’s portfolio composition must be subject to procedures designed to prevent the use and dissemination of material nonpublic information regarding the open-end fund’s portfolio.6 Commentary .06 to Rule 8.600 is similar to Commentary .03(a)(i) and (iii) to NYSE Arca Equities Rule 5.2(j)(3); however, Commentary .06 in connection with the establishment of a ‘‘fire wall’’ between the investment adviser and the broker-dealer reflects the applicable open-end fund’s portfolio, not an underlying benchmark index, as is the case with index-based funds. The Adviser is not a brokerdealer but is affiliated with a brokerdealer and has implemented a fire wall with respect to its broker-dealer affiliate 30029 (April 10, 2012) (File No. 812–13795) (the ‘‘Exemptive Order’’). 6 An investment adviser to an open-end fund is required to be registered under the Investment Advisers Act of 1940 (the ‘‘Advisers Act’’). As a result, the Adviser and its related personnel are subject to the provisions of Rule 204A–1 under the Advisers Act relating to codes of ethics. This Rule requires investment advisers to adopt a code of ethics that reflects the fiduciary nature of the relationship to clients as well as compliance with other applicable securities laws. Accordingly, procedures designed to prevent the communication and misuse of non-public information by an investment adviser must be consistent with Rule 204A–1 under the Advisers Act. In addition, Rule 206(4)–7 under the Advisers Act makes it unlawful for an investment adviser to provide investment advice to clients unless such investment adviser has (i) adopted and implemented written policies and procedures reasonably designed to prevent violation, by the investment adviser and its supervised persons, of the Advisers Act and the Commission rules adopted thereunder; (ii) implemented, at a minimum, an annual review regarding the adequacy of the policies and procedures established pursuant to subparagraph (i) above and the effectiveness of their implementation; and (iii) designated an individual (who is a supervised person) responsible for administering the policies and procedures adopted under subparagraph (i) above. E:\FR\FM\30MYN1.SGM 30MYN1

Agencies

[Federal Register Volume 78, Number 104 (Thursday, May 30, 2013)]
[Notices]
[Pages 32501-32503]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-12794]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69632; File No. SR-Phlx-2013-56]


Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Adopt a 
Rule Governing Cancellation of Orders in the Event of an Issuer 
Corporate Action Related to a Dividend, Payment or Distribution, and To 
Make Related Clarifications to Rule Text

May 23, 2013.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that, on May 16, 2013, NASDAQ OMX PHLX LLC (``Phlx'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission'') a 
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\ 15 U.S.C. 78a.
    \3\ 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 adopt a rule governing cancellation of 
orders in the event of an issuer corporate action related to a 
dividend, payment or distribution, and to make related clarifications 
to rule text.
    The text of the proposed rule change is available on the Exchange's 
Web site at https://nasdaqomxphlx.cchwallstreet.com/nasdaqomxphlx/phlx/, 
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 is proposing to adopt Rule 3311 to address the treatment of 
quotes/orders in securities that are the subject of issuer corporate 
actions related to a dividend, payment or distribution (a ``corporate 
action''). The rule will apply to any trading interest that is carried 
on the PSX book overnight.\4\ The proposed Phlx rule would provide that 
in the event of any corporate action, Phlx will cancel open quote/
orders on the ex-date of the action, thereby imposing on the member 
that entered the order the responsibility for determining whether it 
wishes to reenter the order and if so, at what price and size. The 
cancellation would occur immediately prior to the opening of the Phlx 
Equities Market at 8 a.m. on the ex-date of the corporate action, and 
the member would receive a cancellation notice, so that it could, if it 
desired, reenter the order at the commencement of trading on the ex-
date.
---------------------------------------------------------------------------

    \4\ Phlx notes that its market participants have not 
historically made use of such good-`till-cancelled trading interest, 
but believes that a rule should be adopted to ensure that the 
treatment of such orders is clearly specified by its rules. The 
Commission notes that Phlx stated in Form 19b-4 regarding SR-Phlx-
2013-56 that the term ``PSX'' refers to NASDAQ OMX PSX.
---------------------------------------------------------------------------

    In addition, Phlx is proposing to amend Rule 3306(b) to make it 
clear that quotes do not necessarily remain open overnight. 
Specifically, Phlx is modifying a description of open quotes, the 
original intent of which is unclear and that accordingly may result in 
confusion.\5\ The sentence in question

[[Page 32502]]

appears to reflect the idea that an open quote (i.e., a quote 
designated to remain open at the end of the trading day) would be 
processed in the same manner as a System Hours GTC Order. While 
accurate, this statement does not reflect the fact that a quote may 
also accurately be described as an Attributable Order entered by a PSX 
Market Maker or Equities ECN (i.e., trading interest that is identified 
as having been entered by a particular market participant). Moreover, 
although an Attributable Order may be entered with a time-in-force of 
good-`till-cancelled and thereby remain open overnight, such orders 
have not historically been used by Phlx market participants. 
Accordingly, Phlx believes that the focus of the current sentence on 
orders remaining open might imply that all quotes would remain open 
overnight, when as a factual matter this would be the case only to the 
extent a quote was designated as good-`till-cancelled. Phlx proposes to 
amend the sentence to provide that ``Quotes will be processed as 
Attributable Orders, with such time-in-force designation as the PSX 
Market Maker or Equities ECN may assign.'' Finally, Phlx proposes to 
amend the rule to capitalize the word ``System'' to reflect that it is 
a defined term in the rules governing PSX.
---------------------------------------------------------------------------

    \5\ The rule in question was adopted recently as part of a 
proposed rule change that adopted rules in effect at The NASDAQ 
Stock Market (``NASDAQ'') and/or NASDAQ OMX BX (``BX'') with respect 
to market making. Securities Exchange Act Release No. 69452 (April 
25, 2013), 78 FR 25512 (May 1, 2013) (SR-Phlx-2013-24). Proposed 
rule changes to amend the corresponding NASDAQ and BX rules in a 
manner similar to this proposed rule change were filed while SR-
Phlx-2013-24 was awaiting approval. See Securities Exchange Act 
Release No. 69454 (April 25, 2013), 78 FR 25506 (May 1, 2013) (SR-
NASDAQ-2013-068); Securities Exchange Act Release No. 69456 (April 
25, 2013), 78 FR 25510 (May 1, 2013) (SR-BX-2013-031).
     It should be noted that although Phlx rules now permit members 
to register and trade as PSX Market Makers or Equities ECNs, no 
member has yet currently registered with such a status. Accordingly, 
the following discussion regarding the use and processing of quotes 
should be understood as not having a direct impact on any current 
Phlx market participants. Rather, the proposed rule change is 
intended to ensure that the rules that would govern such matters are 
clear.
---------------------------------------------------------------------------

2. Statutory Basis
    Phlx believes that the proposed rule change is consistent with the 
provisions of Section 6 of the Act,\6\ in general, and with Section 
6(b)(5) of the Act \7\ in particular, in that the proposal is designed 
to prevent fraudulent and manipulative acts and practices, to promote 
just and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in regulating, clearing, settling, 
processing information with respect to, and facilitating transactions 
in securities, 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. Specifically, Phlx believes 
that the change will simplify Phlx's rule governing adjustment of open 
quotes/orders in the event of corporate actions by making it clear that 
all such quotes/orders will be cancelled, thereby ensuring that market 
participants have appropriate notice of the possibility that they may 
either deem it advisable not to reenter such quotes/orders, or to 
reenter them with such adjustments to price and/or size as the market 
participant deems advisable to reflect the corporate action. Thus, the 
change will facilitate transactions in securities and perfect the 
mechanism of a free and open market by providing additional assurance 
that market participants carefully manage the trading interest that 
they enter into Phlx. In addition, the proposed changes to Rule 3306 
are designed to improve the clarity and accuracy of that rule.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    Phlx does not believe that the proposed rule change will result in 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act, as amended. Specifically, Phlx 
believes that the rule change does not affect the availability or 
pricing of goods or services offered by the Exchange, and therefore 
does not impact competition between the Exchange and others. Rather, 
the change is designed to adopt and clarify rules to better describe 
the operation of the Exchange's trading systems, but in a manner that 
does not restrict the ability of members to enter and update trading 
interest in PSX.

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 Rule 19b-
4(f)(6) thereunder.\9\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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.

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-2013-56 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-2013-56. 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

[[Page 32503]]

available publicly. All submissions should refer to File Number SR-
Phlx-2013-56 and should be submitted on or before June 20, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-12794 Filed 5-29-13; 8:45 am]
BILLING CODE 8011-01-P
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