Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify the Rule Governing Modification of Orders on NASDAQ OMX PSX in the Event of an Issuer Corporate Action Related to a Dividend, Payment or Distribution, 48736-48738 [2013-19256]
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48736
Federal Register / Vol. 78, No. 154 / Friday, August 9, 2013 / Notices
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not significantly affect the
protection of investors or the public
interest, does not impose any significant
burden on competition, and, by its
terms, does not 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 10 and Rule 19b–
4(f)(6) thereunder.11
The Exchange has requested that the
Commission waive the 30-day operative
delay. The Commission believes that
waiver of the 30-day operative delay is
consistent with the protection of
investors and the public interest in that
it will allow the Exchange to open
additional series of individual stocks
and ETF options until the close of
trading on the second business day prior
to a monthly expiration in unusual
market conditions in the same manner
as NYSE MKT, NYSE Arca, CBOE, and
Phlx. In sum, the proposed rule change
presents no novel issues, and waiver
will allow the Exchange to remain
competitive with other exchanges.
Therefore, the Commission designates
the proposal operative upon filing.12
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 necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 13 of the Act to
determine whether the proposed rule
change 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
10 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b-4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires the Exchange to give the
Commission written notice of the Exchange’s intent
to file the proposed rule change, along with a brief
description and text of 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.
12 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
13 15 U.S.C. 78s(b)(2)(B).
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change is consistent with the Act.
Comments may be submitted by any of
the following methods:
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
[Release No. 34–70110; File No. SR–Phlx–
2013–77]
• 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–BX–2013–045 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–BX–2013–045. 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–BX–
2013–045 and should be submitted on
or before August 30, 2013.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–19254 Filed 8–8–13; 8:45 am]
BILLING CODE 8011–01–P
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Modify the
Rule Governing Modification of Orders
on NASDAQ OMX PSX in the Event of
an Issuer Corporate Action Related to
a Dividend, Payment or Distribution
August 5, 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 July 22,
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 modify the
rule governing modification of orders on
NASDAQ OMX PSX (‘‘PSX’’) in the
event of an issuer corporate action
related to a dividend, payment or
distribution.
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.
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
14 17
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CFR 200.30–3(a)(12).
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A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
pmangrum on DSK3VPTVN1PROD with NOTICES
1. Purpose
Phlx Rule 3311 addresses the
treatment of quotes/orders in securities
that are the subject of issuer corporate
actions related to a dividend, payment
or distribution. The rule applies to any
trading interest that is carried on the
PSX book overnight.4 Phlx adopted the
rule through a recent proposed rule
change.5 The rule provides that in the
event of any corporate action related to
a dividend, payment or distribution,
Phlx will cancel open quotes/orders on
the ex-date of the action. The
cancellation occurs immediately prior to
the opening of trading at 8 a.m. on the
ex-date of the corporate action, and the
member receives a cancellation notice,
so that it can, if it desired, reenter the
order at the commencement of trading
on the ex-date.
Phlx is now proposing to implement
limited, optional functionality to allow
open orders to be adjusted, rather than
cancelled. The change is responsive to
member input indicating that such
functionality may assist with order
management with respect to cash
dividends and forward splits, the most
common type of corporate action.6
Under the proposal, a member may
designate that all orders with a time-inforce of good-till-cancelled that are
entered through one or more order entry
ports specified by the member will be
processed in the manner specified
below.7
(1) Cash Dividend. If an issuer is
paying a cash dividend, the price of an
order to buy will be reduced by the
amount of the sum of all dividends
payable, rounded up to the nearest
whole cent; provided, however, that
there will be no adjustment if the sum
of all dividends is less than $0.01. For
example, if the sum of all dividends is
$0.381, the price of the order will be
reduced by $0.39. An order to sell will
be retained but will receive no price
adjustment.
4 Phlx notes that the use of such good-tillcancelled trading interest is not prevalent and that
the majority of quotes/orders expire by their terms
at the end of regular market hours.
5 Securities Exchange Act Release No. 69632 (May
23, 2013), 78 FR 32501 (May 30, 2013) (SR–Phlx–
2013–56).
6 For other corporate actions, open orders will be
cancelled, regardless of the port through which they
were entered.
7 The member may opt for this processing on a
port-by-port basis, but not an order-by-order basis.
Thus, the new provisions providing for order
adjustment will apply to all good-till-cancelled
orders entered through a port that has been
specified by the member for such processing.
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(2) Forward Stock Split. If an issuer is
implementing a forward stock split (i.e.,
a stock split in which shares
outstanding are exchanged for a larger
number of shares), the order will be
cancelled if its size is less than one
round lot. If the order’s size is greater
than one round lot, (i) the size of the
order will be multiplied by the ratio of
post-split shares to pre-split shares, with
the result rounded downward to the
nearest whole share, and (ii) the price of
the order will be multiplied by the ratio
of pre-split shares to post-split shares,
with the result rounded down to the
nearest whole penny in the case of
orders to buy and rounded up to the
nearest whole penny in the case of
orders to sell. For example, if a member
has entered a good-till-cancelled order
to buy 375 shares at $10.95 and the
issuer implemented a split under which
each share would be exchanged for 2.25
shares, the size of the order would be
adjusted to 843 shares (375 × 2.25/1 =
843.75, rounded down to 843) and the
price of the order would be adjusted to
$4.86 ($10.95 × 1/2.25 = $4.8667,
rounded down to $4.86). An order to
sell at the same price and size would be
adjusted to 843 shares with a price of
$4.87.
(3) Combination of Cash Dividend and
Forward Stock Split. If an issuer is
implementing a cash dividend and a
forward stock split on the same date, the
adjustments described above will both
be applied, in the order described in the
notice of the corporate actions received
by Phlx.8
All of the foregoing changes will be
affected immediately prior to the
opening of the System at 8:00 a.m. on
the ex-date of the applicable corporate
action. Open orders that are retained
will be re-entered by the System (as
adjusted above) immediately prior to the
opening of the System, such that they
will retain time priority over new orders
entered at or after 8:00 a.m.9
Phlx is also amending the language
that describes corporate actions to
which Rule 3311 applies to clarify and
expand the scope of the rule. Currently,
the rule refers to ‘‘issuer corporate
actions related to a dividend, payment
or distribution.’’ This rule change
proposes to add text to the rule language
that would make it clear that the term
8 Phlx receives notice of corporate actions from
the listing exchange for the security.
9 To the extent that multiple good-till-cancelled
orders in a particular security are adjusted and reentered, such orders may not retain the same time
`
priority vis-a-vis one another that they had on the
preceding day. Rather, because such orders will be
entered simultaneously through multiple order
entry ports, their relative priority will be a function
of the duration of system processing associated with
each individual order.
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48737
‘‘dividend’’ encompasses dividends
payable in stock, securities, or both, and
that the term distribution has been
interpreted to include forward or
reverse stock splits.10 In addition, Phlx
is adding language to the rule to include
symbol changes and changes in the
primary listing venue of a stock, which
have not previously been covered by
Rule 3311, within the scope of corporate
actions resulting in the cancellation of
good-till-cancelled orders. Phlx believes
that this change will assist market
participants in managing their orders,
because the receipt of a cancellation
message will alert the member to the
need to evaluate whether to reenter the
cancelled order with a new symbol or in
a different trading venue.11
2. Statutory Basis
Phlx believes that the proposed rule
change is consistent with the provisions
of Section 6 of the Act,12 in general, and
with Section 6(b)(5) of the Act 13 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, which is
responsive to member input, will
facilitate transactions in securities and
perfect the mechanism of a free and
open market by providing members
with additional optional functionality
that may assist them with order
management with respect to cash
dividends and forward splits, the most
common type of corporate actions. The
change will also facilitate transactions
in securities and perfect the mechanism
of a free and open market by assisting
10 Cf. Securities Exchange Act Release No. 54613
(October 17, 2006), 71 FR 62325 (October 24, 2006)
(SR–NASDAQ–2006–043) (similar NASDAQ rule
adopting the phrase ‘‘dividend, payment or
distribution’’ and including stock splits as an
example of corporate actions covered by the rule).
11 Notably, in some instances, such as a corporate
spinoff, the old symbol may be immediately reused
for a different security. Therefore, maintaining an
order with that symbol on the book could result in
the market participant maintaining an order in a
stock in which it did not wish to maintain a trading
interest. Also, to the extent that a market participant
wishes to trade a security in its listing venue, the
cancellation of its open order in the event of a
change in listing venue will provide it with the
opportunity to do so.
12 15 U.S.C. 78f.
13 15 U.S.C. 78f(b)(5).
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Federal Register / Vol. 78, No. 154 / Friday, August 9, 2013 / Notices
market participants in managing their
orders in the event of symbol changes
and changes in listing venue, by
cancelling open orders and thereby
alerting members to the need to evaluate
whether to reenter the cancelled order.
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, by offering market
participants additional options with
regard to management of open orders,
the change has the potential to enhance
Phlx’s competitiveness with respect to
other trading venues, thereby promoting
greater competition. Moreover, the
change does not burden competition in
that it 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 14 and Rule 19b–
4(f)(6) thereunder.15
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.
pmangrum on DSK3VPTVN1PROD with NOTICES
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
14 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.
15 17
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14:54 Aug 08, 2013
Jkt 229001
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 rulecomments@sec.gov. Please include File
Number SR–Phlx–2013–77 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–2013–77. 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–
2013–77 and should be submitted on or
before August 30, 2013.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–19256 Filed 8–8–13; 8:45 am]
BILLING CODE 8011–01–P
16 17
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–70112; File No. SR–C2–
2013–029]
Self-Regulatory Organizations; C2
Options Exchange, Incorporated;
Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change Relating to the Technical
Disconnect Functionality
August 5, 2013.
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 July 29,
2013, C2 Options Exchange,
Incorporated (the ‘‘Exchange’’ or ‘‘C2’’)
filed with the Securities and Exchange
Commission (the ‘‘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 is proposing to amend
its rules to codify the Technical
Disconnect Mechanism. The text of the
proposed rule change is available on the
Exchange’s Web site (https://
www.c2exchange.com/Legal/), at the
Exchange’s Office of the Secretary, 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
U.S.C. 78s(b)(1).
CFR 240.19b–4. The Commission notes that
the Exchange filed the proposed rule change
pursuant to Section 19(b)(3)(A)(ii) of the Act (15
U.S.C. 78s(b)(3)(A)(ii)) and Rule 19b–4(f)(5)
thereunder (17 CFR 240.19b–4(f)(5)), which renders
the proposal effective upon filing with the
Commission.
2 17
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]]>Agencies
[Federal Register Volume 78, Number 154 (Friday, August 9, 2013)]
[Notices]
[Pages 48736-48738]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-19256]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-70110; File No. SR-Phlx-2013-77]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Modify
the Rule Governing Modification of Orders on NASDAQ OMX PSX in the
Event of an Issuer Corporate Action Related to a Dividend, Payment or
Distribution
August 5, 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 July 22, 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 modify the rule governing modification of
orders on NASDAQ OMX PSX (``PSX'') in the event of an issuer corporate
action related to a dividend, payment or distribution.
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.
[[Page 48737]]
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Phlx Rule 3311 addresses the treatment of quotes/orders in
securities that are the subject of issuer corporate actions related to
a dividend, payment or distribution. The rule applies to any trading
interest that is carried on the PSX book overnight.\4\ Phlx adopted the
rule through a recent proposed rule change.\5\ The rule provides that
in the event of any corporate action related to a dividend, payment or
distribution, Phlx will cancel open quotes/orders on the ex-date of the
action. The cancellation occurs immediately prior to the opening of
trading at 8 a.m. on the ex-date of the corporate action, and the
member receives a cancellation notice, so that it can, if it desired,
reenter the order at the commencement of trading on the ex-date.
---------------------------------------------------------------------------
\4\ Phlx notes that the use of such good-till-cancelled trading
interest is not prevalent and that the majority of quotes/orders
expire by their terms at the end of regular market hours.
\5\ Securities Exchange Act Release No. 69632 (May 23, 2013), 78
FR 32501 (May 30, 2013) (SR-Phlx-2013-56).
---------------------------------------------------------------------------
Phlx is now proposing to implement limited, optional functionality
to allow open orders to be adjusted, rather than cancelled. The change
is responsive to member input indicating that such functionality may
assist with order management with respect to cash dividends and forward
splits, the most common type of corporate action.\6\ Under the
proposal, a member may designate that all orders with a time-in-force
of good-till-cancelled that are entered through one or more order entry
ports specified by the member will be processed in the manner specified
below.\7\
---------------------------------------------------------------------------
\6\ For other corporate actions, open orders will be cancelled,
regardless of the port through which they were entered.
\7\ The member may opt for this processing on a port-by-port
basis, but not an order-by-order basis. Thus, the new provisions
providing for order adjustment will apply to all good-till-cancelled
orders entered through a port that has been specified by the member
for such processing.
---------------------------------------------------------------------------
(1) Cash Dividend. If an issuer is paying a cash dividend, the
price of an order to buy will be reduced by the amount of the sum of
all dividends payable, rounded up to the nearest whole cent; provided,
however, that there will be no adjustment if the sum of all dividends
is less than $0.01. For example, if the sum of all dividends is $0.381,
the price of the order will be reduced by $0.39. An order to sell will
be retained but will receive no price adjustment.
(2) Forward Stock Split. If an issuer is implementing a forward
stock split (i.e., a stock split in which shares outstanding are
exchanged for a larger number of shares), the order will be cancelled
if its size is less than one round lot. If the order's size is greater
than one round lot, (i) the size of the order will be multiplied by the
ratio of post-split shares to pre-split shares, with the result rounded
downward to the nearest whole share, and (ii) the price of the order
will be multiplied by the ratio of pre-split shares to post-split
shares, with the result rounded down to the nearest whole penny in the
case of orders to buy and rounded up to the nearest whole penny in the
case of orders to sell. For example, if a member has entered a good-
till-cancelled order to buy 375 shares at $10.95 and the issuer
implemented a split under which each share would be exchanged for 2.25
shares, the size of the order would be adjusted to 843 shares (375 x
2.25/1 = 843.75, rounded down to 843) and the price of the order would
be adjusted to $4.86 ($10.95 x 1/2.25 = $4.8667, rounded down to
$4.86). An order to sell at the same price and size would be adjusted
to 843 shares with a price of $4.87.
(3) Combination of Cash Dividend and Forward Stock Split. If an
issuer is implementing a cash dividend and a forward stock split on the
same date, the adjustments described above will both be applied, in the
order described in the notice of the corporate actions received by
Phlx.\8\
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\8\ Phlx receives notice of corporate actions from the listing
exchange for the security.
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All of the foregoing changes will be affected immediately prior to
the opening of the System at 8:00 a.m. on the ex-date of the applicable
corporate action. Open orders that are retained will be re-entered by
the System (as adjusted above) immediately prior to the opening of the
System, such that they will retain time priority over new orders
entered at or after 8:00 a.m.\9\
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\9\ To the extent that multiple good-till-cancelled orders in a
particular security are adjusted and re-entered, such orders may not
retain the same time priority vis-[agrave]-vis one another that they
had on the preceding day. Rather, because such orders will be
entered simultaneously through multiple order entry ports, their
relative priority will be a function of the duration of system
processing associated with each individual order.
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Phlx is also amending the language that describes corporate actions
to which Rule 3311 applies to clarify and expand the scope of the rule.
Currently, the rule refers to ``issuer corporate actions related to a
dividend, payment or distribution.'' This rule change proposes to add
text to the rule language that would make it clear that the term
``dividend'' encompasses dividends payable in stock, securities, or
both, and that the term distribution has been interpreted to include
forward or reverse stock splits.\10\ In addition, Phlx is adding
language to the rule to include symbol changes and changes in the
primary listing venue of a stock, which have not previously been
covered by Rule 3311, within the scope of corporate actions resulting
in the cancellation of good-till-cancelled orders. Phlx believes that
this change will assist market participants in managing their orders,
because the receipt of a cancellation message will alert the member to
the need to evaluate whether to reenter the cancelled order with a new
symbol or in a different trading venue.\11\
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\10\ Cf. Securities Exchange Act Release No. 54613 (October 17,
2006), 71 FR 62325 (October 24, 2006) (SR-NASDAQ-2006-043) (similar
NASDAQ rule adopting the phrase ``dividend, payment or
distribution'' and including stock splits as an example of corporate
actions covered by the rule).
\11\ Notably, in some instances, such as a corporate spinoff,
the old symbol may be immediately reused for a different security.
Therefore, maintaining an order with that symbol on the book could
result in the market participant maintaining an order in a stock in
which it did not wish to maintain a trading interest. Also, to the
extent that a market participant wishes to trade a security in its
listing venue, the cancellation of its open order in the event of a
change in listing venue will provide it with the opportunity to do
so.
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2. Statutory Basis
Phlx believes that the proposed rule change is consistent with the
provisions of Section 6 of the Act,\12\ in general, and with Section
6(b)(5) of the Act \13\ 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, which is responsive to member input, will facilitate
transactions in securities and perfect the mechanism of a free and open
market by providing members with additional optional functionality that
may assist them with order management with respect to cash dividends
and forward splits, the most common type of corporate actions. The
change will also facilitate transactions in securities and perfect the
mechanism of a free and open market by assisting
[[Page 48738]]
market participants in managing their orders in the event of symbol
changes and changes in listing venue, by cancelling open orders and
thereby alerting members to the need to evaluate whether to reenter the
cancelled order.
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\12\ 15 U.S.C. 78f.
\13\ 15 U.S.C. 78f(b)(5).
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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, by
offering market participants additional options with regard to
management of open orders, the change has the potential to enhance
Phlx's competitiveness with respect to other trading venues, thereby
promoting greater competition. Moreover, the change does not burden
competition in that it 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 \14\ and Rule 19b-
4(f)(6) thereunder.\15\
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\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 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.
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-2013-77 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-2013-77. 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-2013-77 and should be
submitted on or before August 30, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-19256 Filed 8-8-13; 8:45 am]
BILLING CODE 8011-01-P
