Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Clarifying Rule 1014 Regarding Daily Quoting Obligations, 62780-62782 [2013-24664]
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Federal Register / Vol. 78, No. 204 / Tuesday, October 22, 2013 / Notices
Exchange has not received any
unsolicited written comments from
Members or other interested parties.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 8 and Rule 19b–4(f)(2) 9
thereunder. At any time within 60 days
of the filing of such 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.
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:
sroberts on DSK5SPTVN1PROD with FRONT MATTER
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–
EDGX–2013–38 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–EDGX–2013–38. 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
8 15
9 17
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4 (f)(2).
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Jkt 232001
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–EDGX–
2013–38 and should be submitted on or
before November 12, 2013.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–24661 Filed 10–21–13; 8:45 am]
6, 2013, pursuant to Section 19(b)(2) of
the Act,5 the MSRB granted an
extension of time for the Commission to
act on the filing until October 22, 2013.
The MSRB submitted a response to
comments on September 6, 2013.6 On
October 4, 2013, the Exchange withdrew
the proposed rule change (SR–MSRB–
2013–06).
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.7
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–24629 Filed 10–21–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–70673; File No. SR–Phlx–
2013–99]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–70617; File No. SR–MSRB–
2013–06]
Self-Regulatory Organizations;
Municipal Securities Rulemaking
Board; Notice of Withdrawal of
Proposed Rule Change to Amend
MSRB Rule A–3, on Membership on
the Board, To Modify the Standard of
Independence for Public Board
Members
October 7, 2013.
On July 3, 2013, the Municipal
Securities Rulemaking Board (‘‘MSRB’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (the ‘‘Act’’) 1 and
Rule 19b–4 thereunder,2 a proposed rule
change consisting of amendments to
MSRB Rule A–3 to modify the standard
of independence for public Board
members. The proposed rule change
was published for comment in the
Federal Register on July 24, 2013.3 The
Commission received nine comment
letters on the proposal.4 On September
10 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 Securities Exchange Act Release No. 70004 (July
18, 2013), 78 FR 44607.
4 See letters to Elizabeth M. Murphy, Secretary,
Commission, from Jeanine Rodgers Caruso, CIPFA,
President, National Association of Independent
Public Finance Advisors, dated August 14, 2013;
Barbara Roper, Director of Investor Protection,
Consumer Federation of America, dated August 14,
2013; Kerry Korpi, Director of Research and
Collective Bargaining, American Federation of
State, County and Municipal Employees, dated
August 14, 2013; Dustin T. McDonald, Director,
1 15
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Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change Clarifying
Rule 1014 Regarding Daily Quoting
Obligations
October 11, 2013.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 2 thereunder,
notice is hereby given that on October
2, 2013, NASDAQ OMX PHLX LLC
(‘‘Phlx’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I, II,
and III, below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
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 filing with the
Commission a proposal to clarify that
Rule 1014 (Obligations and Restrictions
Federal Liaison Center, Government Finance
Officers Association, dated August 14, 2013;
Americans for Financial Reform, dated August 14,
2013; Lisa S. Good, Executive Director, National
Federation of Municipal Analysts, dated August 26,
2013; Gerald Gold, dated September 4, 2013;
Jeanine Rodgers Caruso, CIPFA, President, National
Association of Independent Public Finance
Advisors, dated September 12, 2013; and Dorothy
Donohue, Deputy General Counsel—Securities
Regulation, Investment Company Institute, dated
September 18, 2013.
5 15 U.S.C. 78s(b)(2).
6 See letter to Elizabeth M. Murphy, Secretary,
Commission, from Gary L. Goldsholle, General
Counsel, MSRB, dated September 6, 2013.
7 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
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Federal Register / Vol. 78, No. 204 / Tuesday, October 22, 2013 / Notices
Applicable to Specialists and Registered
Options Traders) quoting obligations
remain in effect on a daily basis even
though compliance with such
obligations may be determined on a
monthly basis.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://
nasdaqomxphlx.cchwallstreet.com, at
the principal office of the Exchange, and
at the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of this proposed rule
change is to clarify that Rule 1014
quoting obligations remain in effect on
a daily basis even though compliance
with such obligations may be
determined on a monthly basis.
Background
sroberts on DSK5SPTVN1PROD with FRONT MATTER
Market makers on the Exchange
include Registered Options Traders
(‘‘ROTs’’),3 Streaming Quote Traders
(‘‘SQTs’’),4 Remote Streaming Quote
3 An ROT is a regular member or a foreign
currency options participant of the Exchange
located on the trading floor who has received
permission from the Exchange to trade in options
for his own account. See Rule 1014(b)(i).
4 An SQT is an ROT who has received permission
from the Exchange to generate and submit option
quotations electronically in options to which such
SQT is assigned. An SQT may only submit such
quotations while such SQT is physically present on
the floor of the Exchange. See Rule 1014(b)(ii)(A).
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Traders (‘‘RSQTs’’),5 specialists,6 and
Remote Specialists.7 As set forth in Rule
1014, market makers have an obligation
to make two-sided markets in options
products listed on the Exchange. This
rule change proposal does not negate, or
attempt to change, any of the existing
daily market making obligations
established in Rule 1014. These Rule
1014 market making obligations
continue in force. This proposal only
clarifies that Rule 1014 quoting
obligations remain in effect on a daily
basis. This has been the case prior to the
recent Exchange proposal establishing
that compliance with quoting
obligations may be determined on a
monthly basis,8 and remains so without
change.
The daily market making obligations
of market makers on the Exchange are
set forth in Rule 1014. In particular,
subsection (b)(ii)(D)(1) of Rule 1014
states that SQTs and RSQTs (when they
do not function as Remote Specialists)
shall be responsible to quote two-sided
markets in not less than 60% of the
series in which such SQTs or RSQTs are
assigned; provided that, on any given
day, a DRSQT or DSQT shall be
responsible to quote two-sided markets
in the lesser of 99% of the series listed
on the Exchange or 100% of the series
listed on the Exchange minus one callput pair. The sub-section states also that
whenever a DSQT or DRSQT enters a
5 An RSQT is an ROT that is a member or member
organization with no physical trading floor
presence who has received permission from the
Exchange to generate and submit option quotations
electronically in options to which such RSQT has
been assigned. An RSQT may only submit such
quotations electronically from off the floor of the
Exchange. See Rule 1014(b)(ii)(B).
Rule 1014 also discusses other market makers
including Directed SQTs and Directed RSQTs,
which receive Directed Orders as defined in Rule
1080(l)(i)(A). Specialists may likewise receive
Directed Orders.
6 A member may not act as an options specialist
(to include a Remote Specialist as defined in Rule
1020(a)(ii)) in any option unless such member is
registered as an options specialist in such option by
the Exchange pursuant to Rule 501 and such
registration may be revoked or suspended at any
time by the Exchange. See Rule 1020(a)(i).
7 A Remote Specialist is an options specialist in
one or more classes that does not have a physical
presence on an Exchange floor and is approved by
the Exchange pursuant to Rule 501. See Rule
1020(a)(ii).
8 See Securities Exchange Act Release No. 67700
(August 21, 2012) 77 FR 51835 (August 27, 2012)
(SR–Phlx–2012–108) (notice of filing and
immediate effectiveness) (the ‘‘monthly compliance
review proposal’’). In the monthly compliance
review proposal, the Exchange proposed in subsections (b)(ii)(D)(1) and (b)(ii)(D)(2) of Rule 1014
that compliance with the quoting obligation will be
determined on a monthly basis. This puts the
Exchange and its members on an equal footing with
other options markets such as NYSE Arca (Rule
6.37B) and NYSE MKT (Rule 925.1NY) in terms of
monthly compliance with the noted quoting
obligations.
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62781
quotation in an option in which such
DSQT or DRSQT is assigned, such
DSQT or DRSQT must maintain until
the close of that trading day quotations
for the lesser of 99% of the series of the
option listed on the Exchange or 100%
of the series of the option listed on the
Exchange minus one call-put pair. To
satisfy the applicable requirements of
this subparagraph (D)(1) with respect to
quoting a series, an SQT, RSQT, DSQT,
or DRSQT must quote such series 90%
of the trading day (as a percentage of the
total number of minutes in such trading
day) or such higher percentage as the
Exchange may announce in advance.
Subsection (b)(ii)(D)(2) of Rule 1014
states that a specialist (including the
RSQT functioning as a Remote
Specialist in particular options) shall be
responsible to quote two-sided markets
in the lesser of 99% of the series or
100% of the series minus one call-put
pair in each option in which such
specialist is assigned. To satisfy the
requirement of subsection (b)(ii)(D)(2)
with respect to quoting a series, the
specialist must quote such series 90% of
the trading day (as a percentage of the
total number of minutes in such trading
day) or such higher percentage as the
Exchange may announce in advance.9
As discussed, subsections (b)(ii)(D)(1)
and (b)(ii)(D)(2) of Rule 1014 currently
state that compliance with quoting
obligations may be determined on a
monthly basis. To make it clear that
daily quoting obligations remain,
however, the Exchange is adding
language to these subsections to state
that determining compliance with the
continuous quoting requirement on a
monthly basis does not relieve market
makers of their obligation to provide
continuous two-sided quotes on a daily
basis, nor will it prohibit the Exchange
from taking disciplinary action against
market makers for failing to meet the
continuous quoting obligation each
trading day. Compliance on a monthly
basis allows the Exchange to review the
market makers’ daily compliance in the
aggregate and determine the appropriate
disciplinary action for single or multiple
failures to comply with the continuous
quoting requirement during the month
period.
This proposal clarifies that daily
quoting requirements for market makers
per Rule 1014 as specified remain the
same and are not changed.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
9 For all market making obligations, see Rule
1014(b)(ii)(D).
E:\FR\FM\22OCN1.SGM
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62782
Federal Register / Vol. 78, No. 204 / Tuesday, October 22, 2013 / Notices
of the Act 10 in general, and furthers the
objectives of Section 6(b)(5) of the Act 11
in particular, in that it is designed to
promote just and equitable principles of
trade, 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. The
Exchange would do this though a
proposed rule change clarifying that
daily quoting requirements pursuant to
Rule 1014 are not changed by the
monthly compliance review proposal,
and remain the same, to the benefit of
market participants.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange does not believe that this
proposal should have any competitive
impact because the Exchange’s rules as
noted are similar to those of other
options exchanges.
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.
sroberts on DSK5SPTVN1PROD with FRONT MATTER
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange believes that the
foregoing proposed rule change may
take effect upon filing with the
Commission pursuant to Section
19(b)(3)(A) 12 of the Act and Rule 19b–
4(f)(6)(iii) thereunder 13 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.
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
10 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
12 15 U.S.C. 78s(b)(3)(A).
13 17 CFR 240.19b–4(f)(6)(iii). 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.
11 15
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21:08 Oct 21, 2013
Jkt 232001
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.
be submitted on or before November 12,
2013.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–24664 Filed 10–21–13; 8:45 am]
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:
BILLING CODE 8011–01–P
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–2013–99 on the subject line.
Self-Regulatory Organizations;
National Stock Exchange, Inc.; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change To Amend
Rule 11.19 To Extend Pilot Program
Regarding Clearly Erroneous
Executions
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–2013–99. 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 inspection and copying 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–2013–99 and should
October 1, 2013.
PO 00000
Frm 00200
Fmt 4703
Sfmt 4703
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–70589; File No. SR–NSX–
2013–19]
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
September 30, 2013, National Stock
Exchange, Inc. (‘‘NSX®’’ or the
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change, as described in Items I and II
below, which Items have been prepared
by the Exchange. The Commission is
publishing this notice to solicit
comment 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 extend a
pilot program related to Rule 11.19,
entitled ‘‘Clearly Erroneous
Executions.’’ The Exchange also
proposes to remove certain references to
individual stock trading pauses
contained in Rule 11.19(c)(4) and to
amend to Rule 11.19 to make technical
and non-substantive changes in the rule
text. The Exchange has designated this
proposal as non-controversial and
provided the Commission with the
notice required by Rule 19b-4(f)(6)(iii)
under the Act.3
The text of the proposed rule change
is available on the Exchange’s Web site
at https://www.nsx.com, at the principal
office of the Exchange, and at the
Commission’s Public Reference Room.
14 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 17 CFR 240.19b–4(f)(6)(iii).
1 15
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]]>Agencies
[Federal Register Volume 78, Number 204 (Tuesday, October 22, 2013)]
[Notices]
[Pages 62780-62782]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-24664]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-70673; File No. SR-Phlx-2013-99]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change Clarifying
Rule 1014 Regarding Daily Quoting Obligations
October 11, 2013.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given
that on October 2, 2013, NASDAQ OMX PHLX LLC (``Phlx'' or ``Exchange'')
filed with the Securities and Exchange Commission (``SEC'' or
``Commission'') the proposed rule change as described in Items I, II,
and III, below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to 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 is filing with the Commission a proposal to clarify
that Rule 1014 (Obligations and Restrictions
[[Page 62781]]
Applicable to Specialists and Registered Options Traders) quoting
obligations remain in effect on a daily basis even though compliance
with such obligations may be determined on a monthly basis.
The text of the proposed rule change is available on the Exchange's
Web site at https://nasdaqomxphlx.cchwallstreet.com, at the principal
office of the Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of this proposed rule change is to clarify that Rule
1014 quoting obligations remain in effect on a daily basis even though
compliance with such obligations may be determined on a monthly basis.
Background
Market makers on the Exchange include Registered Options Traders
(``ROTs''),\3\ Streaming Quote Traders (``SQTs''),\4\ Remote Streaming
Quote Traders (``RSQTs''),\5\ specialists,\6\ and Remote
Specialists.\7\ As set forth in Rule 1014, market makers have an
obligation to make two-sided markets in options products listed on the
Exchange. This rule change proposal does not negate, or attempt to
change, any of the existing daily market making obligations established
in Rule 1014. These Rule 1014 market making obligations continue in
force. This proposal only clarifies that Rule 1014 quoting obligations
remain in effect on a daily basis. This has been the case prior to the
recent Exchange proposal establishing that compliance with quoting
obligations may be determined on a monthly basis,\8\ and remains so
without change.
---------------------------------------------------------------------------
\3\ An ROT is a regular member or a foreign currency options
participant of the Exchange located on the trading floor who has
received permission from the Exchange to trade in options for his
own account. See Rule 1014(b)(i).
\4\ An SQT is an ROT who has received permission from the
Exchange to generate and submit option quotations electronically in
options to which such SQT is assigned. An SQT may only submit such
quotations while such SQT is physically present on the floor of the
Exchange. See Rule 1014(b)(ii)(A).
\5\ An RSQT is an ROT that is a member or member organization
with no physical trading floor presence who has received permission
from the Exchange to generate and submit option quotations
electronically in options to which such RSQT has been assigned. An
RSQT may only submit such quotations electronically from off the
floor of the Exchange. See Rule 1014(b)(ii)(B).
Rule 1014 also discusses other market makers including Directed
SQTs and Directed RSQTs, which receive Directed Orders as defined in
Rule 1080(l)(i)(A). Specialists may likewise receive Directed
Orders.
\6\ A member may not act as an options specialist (to include a
Remote Specialist as defined in Rule 1020(a)(ii)) in any option
unless such member is registered as an options specialist in such
option by the Exchange pursuant to Rule 501 and such registration
may be revoked or suspended at any time by the Exchange. See Rule
1020(a)(i).
\7\ A Remote Specialist is an options specialist in one or more
classes that does not have a physical presence on an Exchange floor
and is approved by the Exchange pursuant to Rule 501. See Rule
1020(a)(ii).
\8\ See Securities Exchange Act Release No. 67700 (August 21,
2012) 77 FR 51835 (August 27, 2012) (SR-Phlx-2012-108) (notice of
filing and immediate effectiveness) (the ``monthly compliance review
proposal''). In the monthly compliance review proposal, the Exchange
proposed in sub-sections (b)(ii)(D)(1) and (b)(ii)(D)(2) of Rule
1014 that compliance with the quoting obligation will be determined
on a monthly basis. This puts the Exchange and its members on an
equal footing with other options markets such as NYSE Arca (Rule
6.37B) and NYSE MKT (Rule 925.1NY) in terms of monthly compliance
with the noted quoting obligations.
---------------------------------------------------------------------------
The daily market making obligations of market makers on the
Exchange are set forth in Rule 1014. In particular, subsection
(b)(ii)(D)(1) of Rule 1014 states that SQTs and RSQTs (when they do not
function as Remote Specialists) shall be responsible to quote two-sided
markets in not less than 60% of the series in which such SQTs or RSQTs
are assigned; provided that, on any given day, a DRSQT or DSQT shall be
responsible to quote two-sided markets in the lesser of 99% of the
series listed on the Exchange or 100% of the series listed on the
Exchange minus one call-put pair. The sub-section states also that
whenever a DSQT or DRSQT enters a quotation in an option in which such
DSQT or DRSQT is assigned, such DSQT or DRSQT must maintain until the
close of that trading day quotations for the lesser of 99% of the
series of the option listed on the Exchange or 100% of the series of
the option listed on the Exchange minus one call-put pair. To satisfy
the applicable requirements of this subparagraph (D)(1) with respect to
quoting a series, an SQT, RSQT, DSQT, or DRSQT must quote such series
90% of the trading day (as a percentage of the total number of minutes
in such trading day) or such higher percentage as the Exchange may
announce in advance. Subsection (b)(ii)(D)(2) of Rule 1014 states that
a specialist (including the RSQT functioning as a Remote Specialist in
particular options) shall be responsible to quote two-sided markets in
the lesser of 99% of the series or 100% of the series minus one call-
put pair in each option in which such specialist is assigned. To
satisfy the requirement of subsection (b)(ii)(D)(2) with respect to
quoting a series, the specialist must quote such series 90% of the
trading day (as a percentage of the total number of minutes in such
trading day) or such higher percentage as the Exchange may announce in
advance.\9\
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\9\ For all market making obligations, see Rule 1014(b)(ii)(D).
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As discussed, subsections (b)(ii)(D)(1) and (b)(ii)(D)(2) of Rule
1014 currently state that compliance with quoting obligations may be
determined on a monthly basis. To make it clear that daily quoting
obligations remain, however, the Exchange is adding language to these
subsections to state that determining compliance with the continuous
quoting requirement on a monthly basis does not relieve market makers
of their obligation to provide continuous two-sided quotes on a daily
basis, nor will it prohibit the Exchange from taking disciplinary
action against market makers for failing to meet the continuous quoting
obligation each trading day. Compliance on a monthly basis allows the
Exchange to review the market makers' daily compliance in the aggregate
and determine the appropriate disciplinary action for single or
multiple failures to comply with the continuous quoting requirement
during the month period.
This proposal clarifies that daily quoting requirements for market
makers per Rule 1014 as specified remain the same and are not changed.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b)
[[Page 62782]]
of the Act \10\ in general, and furthers the objectives of Section
6(b)(5) of the Act \11\ in particular, in that it is designed to
promote just and equitable principles of trade, 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. The Exchange would do this though a proposed rule change
clarifying that daily quoting requirements pursuant to Rule 1014 are
not changed by the monthly compliance review proposal, and remain the
same, to the benefit of market participants.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange does not believe
that this proposal should have any competitive impact because the
Exchange's rules as noted are similar to those of other options
exchanges.
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
The Exchange believes that the foregoing proposed rule change may
take effect upon filing with the Commission pursuant to Section
19(b)(3)(A) \12\ of the Act and Rule 19b-4(f)(6)(iii) thereunder \13\
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.
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(6)(iii). 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-2013-99 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-2013-99. 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 inspection and
copying 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-2013-99 and should be
submitted on or before November 12, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-24664 Filed 10-21-13; 8:45 am]
BILLING CODE 8011-01-P
