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 Its NASDAQ OMX PSX Facility (“PSX”) in the Event of an Issuer Corporate Action Related to a Dividend, Payment or Distribution, 1544-1546 [2015-00220]
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1544
Federal Register / Vol. 80, No. 7 / Monday, January 12, 2015 / Notices
NYSEMKT–2014–108 on the subject
line.
SECURITIES AND EXCHANGE
COMMISSION
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSEMKT–2014–108. 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 Section, 100 F Street NE.,
Washington, DC 20549–1090, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing will also be available for
inspection and copying at the NYSE’s
principal office and on its Internet Web
site at www.nyse.com. 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–
NYSEMKT–2014–108 and should be
submitted on or before February 2, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.21
Brent J. Fields,
Secretary.
[FR Doc. 2015–00210 Filed 1–9–15; 8:45 am]
tkelley on DSK3SPTVN1PROD with NOTICES
BILLING CODE 8011–01–P
[Release No. 34–74003; File No. SR–Phlx–
2014–79]
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 Its NASDAQ OMX PSX Facility
(‘‘PSX’’) in the Event of an Issuer
Corporate Action Related to a
Dividend, Payment or Distribution
January 6, 2015.
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 December
23, 2014, 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 the Substance
of the Proposed Rule Change
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.
1 15
21 17
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
17:35 Jan 09, 2015
2 17
Jkt 235001
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00052
Fmt 4703
Sfmt 4703
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
PSX Rule 4761 [sic] 3 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. As a general
matter, PSX cancels open quotes/orders
in the event of any corporate action
related to a dividend, payment or
distribution, 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 desires, reenter the order at the
commencement of trading on the exdate.
Prior to 2013, PSX had not had a clear
rule providing for the adjustments of
quotes and orders carried on the PSX
book overnight. In April 2013, Phlx
adopted Rule 3311 to provide that PSX
would cancel all open quotes/orders in
the event of any corporate action.4
Subsequently, in response to member
demand for assistance with order
management with respect to certain
common types of corporate action, Phlx
amended the rule to offer limited,
optional functionality to allow open
orders to be adjusted, rather than
cancelled.5 As written, the rule provides
for the possibility of order adjustment in
the case of cash dividends, forward
stock splits, and combined cash
dividends/forward stock splits.
The proposal will expand the rule
also to provide for adjustment in the
case of stock dividends and combined
cash dividends/stock dividends. The
proposal reflects the conclusion, based
on member feedback, that actions
resulting in the distribution of
additional stock should be treated
similarly, regardless of whether they are
denominated as forward stock splits or
stock dividends. Phlx will make
members aware of the effective date of
the proposed change by the issuance of
a widely disseminated Equity Trader
Alert.
Under the current rule, a member may
designate that all orders with a time-in3 The Commission notes that the correct rule
number for this reference is PSX Rule 3311.
4 Securities Exchange Act Release No. 69632 (May
23, 2013), 78 FR 32501 (May 30, 2013) (SR–Phlx–
2013–56).
5 Securities Exchange Act Release No. 70110
(August 5, 2013), 78 FR 48736 (August 9, 2013)
(SR–Phlx–2013–77).
E:\FR\FM\12JAN1.SGM
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Federal Register / Vol. 80, No. 7 / Monday, January 12, 2015 / Notices
tkelley on DSK3SPTVN1PROD with NOTICES
force of good-till-cancelled 6 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 is 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, the
order is 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 is 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.
Under the change proposed in this
filing, stock dividends will be treated in
the same manner as forward stock splits.
Thus, any corporate action in which
additional shares are issued to holders
of outstanding shares will be treated in
the manner described above.
For example, if a member has entered
a good-till-cancelled order to buy 375
shares at $10.95 per share and the issuer
implemented a split or dividend under
which an additional 1.25 shares would
be issued for each share outstanding, 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 per
share ($10.95 per share × 1/2.25 =
$4.8667 per share, rounded down to
$4.86 per share). An order to sell at the
same price and size would be adjusted
6 Phlx notes that the use of good-till-cancelled
orders is not prevalent, accounting for significantly
less than 1% of all orders entered into PSX. The
vast majority of orders expire by their terms at the
end of regular market hours.
7 The member may opt for this processing on a
port-by-port basis. Thus, the provisions providing
for order adjustment are applied to all good-tillcancelled orders entered through a port that has
been specified by the member for such processing.
Because members may obtain multiple ports,
however, members may opt to apply different
processing to different orders based on the ports
through which they are entered.
VerDate Sep<11>2014
17:35 Jan 09, 2015
Jkt 235001
to 843 shares with a price of $4.87 per
share ($4.8667 per share, rounded up).8
(3) Combination of Cash Dividend and
Forward Stock Split or Stock Dividend.
Under the current rule, 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.9 Under the proposed rule
change, this provision is being
expanded to cover stock dividends as
well as forward stock splits.
As is currently the case, changes to
open orders will continue to be effected
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 are 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.10 Under the proposed
rule change, for corporate actions other
than cash dividends, forward stock
splits, and stock dividends (or any
combination thereof), open orders are
always cancelled, regardless of the port
through which they were entered.
2. Statutory Basis
Phlx believes that the proposed rule
change is consistent with the provisions
of Section 6 of the Act,11 in general, and
with Section 6(b)(5) of the Act 12 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
8 Phlx is also amending the example in the rule
text to make it clear that the prices provided therein
are per share prices.
9 Phlx receives notice of corporate actions from
the listing exchange.
10 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 are
entered simultaneously through multiple order
entry ports, their relative priority is a function of
the duration of system processing associated with
each individual order.
11 15 U.S.C. 78f.
12 15 U.S.C. 78f(b)(5).
PO 00000
Frm 00053
Fmt 4703
Sfmt 4703
1545
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 stock
dividends in a manner similar to the
current functionality with respect to
cash dividends and forward splits.
Because forward splits and stock
dividends both involve the distribution
of additional stock to current
stockholders, providing them with
similar treatment under the rule is
logical and may help to prevent
confusion on the part of members that
expect both types of corporate events to
receive consistent treatment.
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
PSX’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)(ii) of the Act 13 and
subparagraph (f)(6) of Rule 19b–4
thereunder.14
At any time within 60 days of the
filing of the proposed rule change, the
13 15
U.S.C. 78s(b)(3)(a)(ii).
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.
14 17
E:\FR\FM\12JAN1.SGM
12JAN1
1546
Federal Register / Vol. 80, No. 7 / Monday, January 12, 2015 / Notices
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:
tkelley on DSK3SPTVN1PROD with NOTICES
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
Phlx–2014–79 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File
Number SR–Phlx–2014–79. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such
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
VerDate Sep<11>2014
17:35 Jan 09, 2015
Jkt 235001
available publicly. All submissions
should refer to File Number SR–Phlx–
2014–79, and should be submitted on or
before February 2, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Brent J. Fields,
Secretary.
[FR Doc. 2015–00220 Filed 1–9–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–73992; File No. SR–
NYSEARCA–2014–142]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Amending Its Schedule of
Fees and Charges for Exchange
Services To Eliminate Transaction
Fees for Midpoint Passive Liquidity
Orders That Remove Liquidity From
the Exchange and That Are Designated
as ‘‘Retail’’ but Which Are Not
Executed in the Retail Liquidity
Program
January 6, 2015.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on December
22, 2014, NYSE Arca, Inc. (the
‘‘Exchange’’ or ‘‘NYSE Arca’’) 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 selfregulatory organization. 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 amend its
Schedule of Fees and Charges for
Exchange Services (‘‘Fee Schedule’’) to
eliminate transaction fees for Midpoint
Passive Liquidity (‘‘MPL’’) orders that
remove liquidity from the Exchange and
that are designated as ‘‘retail’’ but which
are not executed in the Retail Liquidity
Program. The Exchange proposes to
implement the fee change effective
January 2, 2015. The text of the
proposed rule change is available on the
Exchange’s Web site at www.nyse.com,
15 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 00054
Fmt 4703
Sfmt 4703
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
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 amend its
Fee Schedule to eliminate transaction
fees for MPL orders that remove
liquidity from the Exchange and that are
designated as ‘‘retail’’ orders, but which
are not executed in the Retail Liquidity
Program. The Exchange proposes to
implement the fee change effective
January 2, 2015.
For securities priced $1.00 or greater,
the Exchange currently charges
qualifying ETP Holders and Market
Makers in Tier 1 4 and Tier 2 5 a fee of
$0.0030 per share for MPL orders 6 in
Tape A, B and C securities that remove
liquidity from the NYSE Arca Book.
Similarly, the current basic rate, which
is applicable when tier rates do not
apply, is $0.0030 per share for MPL
orders in Tape A, B and C securities that
remove liquidity from the NYSE Arca
Book. The Exchange proposes to
eliminate the fee for MPL orders that
4 Tier 1 are ETP Holders and Market Makers that
provide liquidity an average daily volume (‘‘ADV’’)
per month of 0.70% or more of the US consolidated
ADV (‘‘CADV’’) or provide liquidity an average
daily share volume per month of 0.15% or more of
the US CADV and are affiliated with an OTP Holder
or OTP Firm that provides an ADV of electronic
posted executions (including all account types) in
Penny Pilot issues on NYSE Arca Options
(excluding mini options) of at least 100,000
contracts, of which at least 25,000 contracts must
be for the account of a market maker.
5 Tier 2 are ETP Holders and Market Makers that
provide liquidity an average daily share volume per
month of 0.30% or more, but less than 0.70% of the
US CADV.
6 MPL Order is defined in Rule 7.31(h)(5) as a
Passive Liquidity Order priced at the midpoint of
the PBBO. Rule 7.31(h)(4) defines a Passive
Liquidity Order as an order to buy or sell a stated
amount of a security at a specified, undisplayed
price.
E:\FR\FM\12JAN1.SGM
12JAN1
]]>Agencies
[Federal Register Volume 80, Number 7 (Monday, January 12, 2015)]
[Notices]
[Pages 1544-1546]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-00220]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-74003; File No. SR-Phlx-2014-79]
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 Its NASDAQ OMX PSX
Facility (``PSX'') in the Event of an Issuer Corporate Action Related
to a Dividend, Payment or Distribution
January 6, 2015.
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 December 23, 2014, 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 the
Substance of the Proposed Rule Change
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
PSX Rule 4761 [sic] \3\ 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. As a general
matter, PSX cancels open quotes/orders in the event of any corporate
action related to a dividend, payment or distribution, 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 desires,
reenter the order at the commencement of trading on the ex-date.
---------------------------------------------------------------------------
\3\ The Commission notes that the correct rule number for this
reference is PSX Rule 3311.
---------------------------------------------------------------------------
Prior to 2013, PSX had not had a clear rule providing for the
adjustments of quotes and orders carried on the PSX book overnight. In
April 2013, Phlx adopted Rule 3311 to provide that PSX would cancel all
open quotes/orders in the event of any corporate action.\4\
Subsequently, in response to member demand for assistance with order
management with respect to certain common types of corporate action,
Phlx amended the rule to offer limited, optional functionality to allow
open orders to be adjusted, rather than cancelled.\5\ As written, the
rule provides for the possibility of order adjustment in the case of
cash dividends, forward stock splits, and combined cash dividends/
forward stock splits.
---------------------------------------------------------------------------
\4\ Securities Exchange Act Release No. 69632 (May 23, 2013), 78
FR 32501 (May 30, 2013) (SR-Phlx-2013-56).
\5\ Securities Exchange Act Release No. 70110 (August 5, 2013),
78 FR 48736 (August 9, 2013) (SR-Phlx-2013-77).
---------------------------------------------------------------------------
The proposal will expand the rule also to provide for adjustment in
the case of stock dividends and combined cash dividends/stock
dividends. The proposal reflects the conclusion, based on member
feedback, that actions resulting in the distribution of additional
stock should be treated similarly, regardless of whether they are
denominated as forward stock splits or stock dividends. Phlx will make
members aware of the effective date of the proposed change by the
issuance of a widely disseminated Equity Trader Alert.
Under the current rule, a member may designate that all orders with
a time-in-
[[Page 1545]]
force of good-till-cancelled \6\ that are entered through one or more
order entry ports specified by the member will be processed in the
manner specified below.\7\
---------------------------------------------------------------------------
\6\ Phlx notes that the use of good-till-cancelled orders is not
prevalent, accounting for significantly less than 1% of all orders
entered into PSX. The vast majority of orders expire by their terms
at the end of regular market hours.
\7\ The member may opt for this processing on a port-by-port
basis. Thus, the provisions providing for order adjustment are
applied to all good-till-cancelled orders entered through a port
that has been specified by the member for such processing. Because
members may obtain multiple ports, however, members may opt to apply
different processing to different orders based on the ports through
which they are entered.
---------------------------------------------------------------------------
(1) Cash Dividend. If an issuer is paying a cash dividend, the
price of an order to buy is 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, the order is 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 is 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.
Under the change proposed in this filing, stock dividends will be
treated in the same manner as forward stock splits. Thus, any corporate
action in which additional shares are issued to holders of outstanding
shares will be treated in the manner described above.
For example, if a member has entered a good-till-cancelled order to
buy 375 shares at $10.95 per share and the issuer implemented a split
or dividend under which an additional 1.25 shares would be issued for
each share outstanding, 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 per share ($10.95 per share x 1/
2.25 = $4.8667 per share, rounded down to $4.86 per share). An order to
sell at the same price and size would be adjusted to 843 shares with a
price of $4.87 per share ($4.8667 per share, rounded up).\8\
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\8\ Phlx is also amending the example in the rule text to make
it clear that the prices provided therein are per share prices.
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(3) Combination of Cash Dividend and Forward Stock Split or Stock
Dividend. Under the current rule, 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.\9\ Under the proposed
rule change, this provision is being expanded to cover stock dividends
as well as forward stock splits.
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\9\ Phlx receives notice of corporate actions from the listing
exchange.
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As is currently the case, changes to open orders will continue to
be effected 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 are 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.\10\ Under the
proposed rule change, for corporate actions other than cash dividends,
forward stock splits, and stock dividends (or any combination thereof),
open orders are always cancelled, regardless of the port through which
they were entered.
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\10\ 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 are entered
simultaneously through multiple order entry ports, their relative
priority is a function of the duration of system processing
associated with each individual order.
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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,\11\ in general, and with Section
6(b)(5) of the Act \12\ 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 stock dividends
in a manner similar to the current functionality with respect to cash
dividends and forward splits. Because forward splits and stock
dividends both involve the distribution of additional stock to current
stockholders, providing them with similar treatment under the rule is
logical and may help to prevent confusion on the part of members that
expect both types of corporate events to receive consistent treatment.
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\11\ 15 U.S.C. 78f.
\12\ 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
PSX'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)(ii) of the Act \13\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\14\
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\13\ 15 U.S.C. 78s(b)(3)(a)(ii).
\14\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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At any time within 60 days of the filing of the proposed rule
change, the
[[Page 1546]]
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-2014-79 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-Phlx-2014-79. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such 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-2014-79, and should be
submitted on or before February 2, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-00220 Filed 1-9-15; 8:45 am]
BILLING CODE 8011-01-P
