Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Updating to Certain Phlx Rules, 15831-15834 [2015-06711]
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Federal Register / Vol. 80, No. 57 / Wednesday, March 25, 2015 / Notices
of the Act and Rule 19b–4(f)(6)
thereunder.8
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. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) of the Act 9 to
determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
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 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–2015–18 and should be
submitted on or before April 15, 2015.
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:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Brent J. Fields,
Secretary.
Electronic Comments
BILLING CODE 8011–01–P
• 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–
NYSEMKT–2015–18 on the subject line.
Paper Comments
rljohnson on DSK3VPTVN1PROD with NOTICES
• 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–2015–18. 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
8 17 CFR 240.19b–4(f)(6). As required under Rule
19b–4(f)(6)(iii), the Exchange provided the
Commission with written notice of its intent to file
the proposed rule change, along with a brief
description and the 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.
9 15 U.S.C. 78s(b)(2)(B).
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–74533; File No. SR–Phlx–
2015–023]
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Updating to
Certain Phlx Rules
March 19, 2015.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on March 12,
2015, 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 proposes to amend
Rules 50 entitled ‘‘Failure to Pay Dues,
Fees and Other Charges;’’ 53, entitled
‘‘Liability for Dues Until Transfer or
Military Service;’’ 99 entitled ‘‘Back-Up
Trading Arrangements;’’ and 443
10 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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15831
entitled ‘‘Employees.’’ The Exchange
proposes to delete Rules 51 entitled
‘‘Enforcement of Capital Funding Fees;’’
54 entitled ‘‘Service Fee;’’ 55 entitled
‘‘Claims by Formed or Deceased
Members;’’ and 442 entitled
‘‘Communications.’’
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 update certain Phlx rules
related to the payment of fees to
harmonize the Exchange’s Rulebook text
and modernize Exchange rules. The
Exchange proposes to amend rule text,
make minor technical amendments to
certain rules and to delete other rules.
Each proposed rule change is discussed
in greater detail below.
Amendment to Certain Exchange
Rules
The Exchange proposes to amend
Rule 50, entitled ‘‘Failure to Pay Dues,
Fees and Other Charges.’’ The Exchange
proposes to conform Rule 50(a) to
NASDAQ Stock Market LLC (‘‘Nasdaq’’)
Rule 9553 and NASDAQ OMX BX, Inc.
(‘‘BX’’) Rule 9553(a). The Exchange is
proposing to adopt rule text similar to
Nasdaq Rule 9553 and BX Rule 9553 in
place of the current rule text in Rule
50(a), (d) and (f). The Exchange is also
proposing to modify the headers to
match those of Nasdaq Rule 9553 and
BX Rule 9553. The word ‘‘termination’’
in the Phlx rule is replaced with the
word ‘‘cancellation or bar.’’ The
Exchange’s amendments are not
substantive in nature. The amendments
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Federal Register / Vol. 80, No. 57 / Wednesday, March 25, 2015 / Notices
seek to align these rules with Nasdaq
rules.
The Exchange proposes to amend
Rule 53, entitled ‘‘Liability for Dues
Until Transfer or Military Service’’ to
delete the current rule text and adopt
the language in Nasdaq IM–1002 and BX
IM–1002–2. This rule allows associated
persons to be placed on inactive status,
thereby preserving their registration,
while serving in the Armed Forces of
the United States.3 The current rule
describes the liability for dues of a
member that is active in the military or
naval service. The current rule notes
that the member’s liability continues
unless the permit is transferred or the
Board of Directors waives dues and
assessments. The proposed rule text
permits a member serving in the
military to retain eligibility to receive
transaction related compensation,
provided they do not perform the duties
of a registered person while inactive.
The inactive military member would not
be subject to fees or be required to
complete Regulatory or Firm Elements
requirements. The rule provides similar
relief for sole proprietorships that are
active in the Armed Forces. Finally, the
rule affords relief to persons currently
not registered with a member or member
organization and subsequently is active
in the Armed Forces within two years
after the date a person ceases to be
registered with a member or member
organization with respect to registration
requirements provided notice is given
within a specified time.4 If a person
placed upon inactive status while
serving in the Armed Forces of the
United States ceases to be registered
with a member or member organization,
Phlx will defer the lapse of registration
requirements during the pendency of
3 See
Nasdaq IM–1002 and BX IM–1002–2.
must be properly notified of the person’s
period of active military service within 90 days
following his or her completion of active service or
upon his or her re-registration with a member or
member organization, whichever occurs first. The
deferral will terminate 90 days following the
person’s completion of active service in the Armed
Forces of the United States. Accordingly, if such
person does not re-register with a member or
member organization within 90 days following his
or her completion of active service in the Armed
Forces of the United States, the amount of time in
which the person must become re-registered with
a member or member organization without being
subject to the qualification examination
requirements shall consist of the standard two-year
period provided in Phlx Rules 611, 613, and 3228
reduced by the period of time between the person’s
Phlx is properly notified of the person’s period of
active military service within 90 days following his
or her completion of active service or upon his or
her re-registration with a member or member
organization, whichever occurs first. The deferral
will terminate 90 days following the person’s
completion of active service in the Armed Forces
of the United States.
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4 Phlx
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admittance to the options trading floor
for non-members. The other
amendments to this rule are technical in
nature. There are no substantive
changes proposed to current Phlx Rule
443.
his or her active service in the Armed
Forces of the United States.
Nasdaq based its adoption of the rule
on a National Association of Securities
Dealers (hereinafter ‘‘FINRA’’) rule.
FINRA tolled the two-year licensing
expiration provisions under its rule for
a person previously registered with a
member who commences active military
duty within two years after he or she
has ceased to be registered with the
member, and also tolled the expiration
provisions for a person placed upon
‘‘inactive’’ status, who, while serving in
the Armed Forces of the United States,
ceases to be registered with a member.5
NASD’s Rule IM–1000–2 relieves
active duty professionals from
continuing education requirements.
With respect to the Firm Element
requirement of continuing education,
FINRA provides that only persons who
have ‘‘direct contact with customers’’ in
the conduct of securities activities are
subject to the Firm Element
requirement.6 active duty professionals
are excluded from the Firm Element
requirement because they do not have
contact with customers. FINRA’s rule
expressly states that active duty
professionals are not required to
complete either of the Regulatory or
Firm Elements of the continuing
education requirements during the
pendency of such inactive status.7 The
proposed rule change will harmonize
the Phlx rule with the Nasdaq and BX
rules as well as FINRA’s rule.
The Exchange proposes to amend
Rule 99, entitled ‘‘Back-Up Trading
Arrangements,’’ to make technical
conforming amendments to the rule
text. This rule change is not substantive
in nature; rather, the rule text
amendments seek to conform the word
usage within the text of this rule.
The Exchange proposes to amend
Rule 443, entitled ‘‘Employees’’ by
renaming the rule ‘‘Trading Floor
Admittance’’ and making minor rule
amendments to clarify the rule text.
Rule 443 states, ’’ [n]o employee of a
member or member organization shall
be admitted to the floor unless he is
registered with and approved by the
Exchange, which may in its discretion
require the payment of a fee with
respect to each employee so approved,
and may at any time in its discretion
withdraw any approval so given.’’ The
Exchange proposes to reference Options
Regulation 5 regarding non-member
visitors within this rule to add clarity to
The Exchange proposes to delete Rule
51 entitled ‘‘Enforcement of Capital
Funding Fees.’’ This rule is no longer
applicable today. This rule permits the
Exchange to take certain specified
measures if an owner of a membership
fails to pay (or have paid on its behalf)
any capital funding fee imposed by the
Exchange when due. The rule specifies
what enforcement action may be taken
against an owner for failure to pay any
capital funding fee imposed by the
Exchange. The rule delineates the
remedies that shall be taken by the
Board if the capital funding fee is not
paid and allows for a variety of
remedies ranging from the imposition of
a late fee to reversion and sale by the
Exchange of the equitable title to a
membership. The remedies are set forth
in such a way as to apply the less
onerous remedies (i.e., like fees) first
and the more serious remedies (i.e.,
suspension of right to trade or lease and
reversion of membership) only after the
Exchange has not received payment
within 90 days after the date of the
original invoice (or such longer period
for which a lease agreement is in effect
as a result of the election by a lessee to
continue paying the capital funding fee).
By allowing this graduated scale of
remedies, the owners are put on notice
as to what remedies will be imposed if
payment is not received in a timely
manner, with the more serious remedies
being applied after a longer period of
time. In addition, the rule delineates the
Board’s responsibilities and authority
for handling instances in which an
owner fails to pay the capital funding
fee when due.8
The rule was designed to protect
innocent lessees from being
unexpectedly dispossessed from their
memberships and trading rights in the
event of a nonpayment by their lessors.
This was important in the days when
Phlx had seats, prior to
demutualization; there are no longer any
seats, owners or lessors. Today permits
are issued to members and member
organizations. Permits provide trading
rights 9 today and the Exchange collects
fees via direct debit.10 This rule is
5 See Securities Exchange Act Release No. 53182
(January 26, 2006), 71 FR 5391 (February 1, 2006)
(SR–NASD–2005–135).
6 See FINRA Rule 1250(b)(1).
7 Id.
8 See Securities and Exchange Commission 44872
(September 28, 2001), 66 FR 51084 (October 5,
2001) (SR–Phlx–99–52).
9 See Rule 908.
10 See Rule 909.
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Deleted Rules
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Federal Register / Vol. 80, No. 57 / Wednesday, March 25, 2015 / Notices
outdated and the Exchange proposes to
remove it from the Rulebook.
The Exchange also proposes to delete
Rule 54 entitled ‘‘Service Fee’’ because
the rule is outdated. The rule provides,
‘‘[m]embers and member organizations
who are not also members of a
subsidiary of the Exchange but who use
or benefit from the facilities or services
of such subsidiary, may be required by
the Board of Directors to pay fees or
charges to the Exchange for such use or
benefit; provided, however, that such
fees or charges may be imposed only if
they are similar in structure and rate to
those imposed by such subsidiary on its
own members using or benefiting from
the same facilities or services.’’ The
Exchange does not have any active
subsidiaries today.11 This rule is
therefore not applicable and should be
deleted from the Rulebook. The
Exchange also proposes to remove the
reference to Rule 54 from Rule 3202,
entitled ‘‘Application of Other rules of
the Exchange.’’ Rule 3202 adopts certain
rules into the equity rules. The
Exchange proposes to remove the
reference to Rule 54 from Rule 3202 as
well.
The Exchange proposes to delete Rule
55, entitled ‘‘Claims by Formed or
Deceased Members.’’ This rule states,
‘‘[w]hen a member is in debt to another
member the death of the creditor
member shall not affect the rights of
such creditor or member, his
organization or estate in respect of such
debt.’’ As noted above, the Exchange
issues permits today for access to
trading on the Exchange. At the time,
prior to demutualization, when the
Exchange issued seats, those seats could
be leased. This is no longer the case.
Members are not indebted to other
members in the same manner today.
This rule is no longer applicable and
should be removed from the Rulebook.
The Exchange also proposes to remove
the reference to Rule 55 from Rule 3202,
entitled ‘‘Application of Other Rules of
the Exchange.’’ Rule 3202 adopts certain
rules into the equity rules. The
Exchange proposes to remove the
reference to Rule 55 from Rule 3202 as
well.
The Exchange proposes to delete Rule
442, entitled ‘‘Communications.’’ This
rule provides that ‘‘[c]ommunications
shall not be read to the Exchange nor
posted on the bulletin board without the
consent of the Secretary.’’ This rule is
outdated. Today, the Exchange uses
electronic means such as email,
electronic alerts and its Web site to
issue communications. There is no
longer a bulletin board on the
Exchange’s trading floor as there was
when the rule was enacted. The
Exchange proposes removing this
outdated rule from the Rulebook.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act 12 in general, and furthers the
objectives of Section 6(b)(5) of the Act 13
in particular, in that it 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 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. The Exchange believes
that these proposed rule changes will
harmonize the text of its rules and
modernize the Phlx Rulebook. The
Exchange is updating certain rules in
order to ensure consistency in the rule
text. The Exchange is proposing to
delete other rules because they are
outdated.
The proposed rule change to Rule 53
seeks to harmonize this rule with
Nasdaq and BX Rules. The proposed
new rules addresses not only fees,
which are addressed by the current rule,
but also registration, compensation,
Regulatory and Firm Element
requirements, sole proprietor members
and formerly registered persons. The
proposed rule states that a registered
person placed on inactive status shall
not be included within the scope of fees,
whereas the Phlx rule indicates a
member serving in the military in active
status is liable for dues to the Exchange.
The Exchange desires to conform the
treatment of members serving in the
military to that of other exchanges. The
NASDAQ, BX and NASD rules provide
inactive members serving in the military
with a reprieve from certain obligations
registration and other requirements.14
The Exchange desires to adopt a similar
treatment of these members, which it
believes will foster cooperation and
coordination with persons engaged in
facilitating transactions in securities.
The remaining rule amendment
proposals either modernize the rule text
and add clarity or delete outdated rule
text. The Exchange believes that these
proposals will benefit members and
12 15
11 Phlx’s
only subsidiary is the Stock Clearing
Corporation of Philadelphia. This subsidiary is
inactive.
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U.S.C. 78f(b).
U.S.C. 78f(b)(5).
14 See Nasdaq IM–1002, BX IM–1002–2 and
NASD IM–1002–2.
13 15
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15833
member organizations by bringing
additional clarity to the Rulebook.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The proposed rule change does not
impose any burden on competition that
is not necessary or appropriate in
furtherance of the purposes of the Act.
The Exchange’s proposed amendments
seek to harmonize the Rulebook by
conforming the text of certain rules
throughout the rule and also deleting
certain unnecessary rules. These rule
amendments do not place an undue
burden on competition but rather bring
clarity to the Rulebook.
The proposed amendments to Rule 53
will provide members with a rule
similar to rules on Nasdaq and BX. The
Exchange’s amendment will conform
the treatment of members serving in the
military to that of other exchanges. The
Exchange believes that adopting the
Nasdaq and BX rules will provide
members and member organizations
with processes similar to other selfregulatory organizations and therefore
does not create an undue burden on
either intra-market or inter-market
competition.
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 15 and
subparagraph (f)(6) of Rule 19b–4
thereunder.16
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
15 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.
16 17
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Federal Register / Vol. 80, No. 57 / Wednesday, March 25, 2015 / Notices
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.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Brent J. Fields,
Secretary.
IV. Solicitation of Comments
BILLING CODE 8011–01–P
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–2015–023 on the subject line.
rljohnson on DSK3VPTVN1PROD with NOTICES
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–2015–023. 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 20549–1090, 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
offices 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–
2015–023, and should be submitted on
or before April 15, 2015.
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[FR Doc. 2015–06711 Filed 3–24–15; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–74534; File No. SR–
NYSEArca–2015–01]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Designation of a
Longer Period for Commission Action
on Proposed Rule Change Amending
NYSE Arca Equities Rule 5.2(j)(3),
Commentary .02 Relating to Listing of
Investment Company Units Based on
Municipal Bond Indexes
March 19, 2015.
On January 16, 2015, NYSE Arca, Inc.
filed with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to amend NYSE Arca Equities
Rule 5.2(j)(3), Commentary .02 relating
to the listing of Investment Company
Units based on fixed income securities
indexes. The proposed rule change was
published for comment in the Federal
Register on February 4, 2015.3 The
Commission has received no comment
letters on the proposed rule change.
Section 19(b)(2) of the Act 4 provides
that, within 45 days of the publication
of notice of the filing of a proposed rule
change, or within such longer period up
to 90 days as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding or as to which the
self-regulatory organization consents,
the Commission shall either approve the
proposed rule change, disapprove the
proposed rule change, or institute
proceedings to determine whether the
proposed rule change should be
disapproved. The Commission is
extending this 45-day time period. The
Commission finds that it is appropriate
to designate a longer period within
which to take action on the proposed
rule change so that it has sufficient time
to consider the proposed rule change.
Accordingly, the Commission,
pursuant to Section 19(b)(2) of the Act,5
17 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 74175
(Jan. 29, 2015), 80 FR 6150.
4 15 U.S.C. 78s(b)(2).
5 Id.
1 15
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designates May 5, 2015, as the date by
which the Commission shall either
approve or disapprove or institute
proceedings to determine whether to
disapprove the proposed rule change
(File Number SR–NYSEArca-2015–01).
For the Commission, by the Division
of Trading and Markets, pursuant to
delegated authority.6
Brent J. Fields,
Secretary.
[FR Doc. 2015–06712 Filed 3–24–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–74538; File No. SR–MIAX–
2015–22]
Self-Regulatory Organizations; Miami
International Securities Exchange LLC;
Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change by Miami International
Securities Exchange LLC To Amend Its
Fee Schedule
March 19, 2015.
Pursuant to the provisions of Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 notice is hereby given that
on March 12, 2015, Miami International
Securities Exchange LLC (‘‘MIAX’’ 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 is filing a proposal to
amend the MIAX Options Fee Schedule.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://www.miaxoptions.com/filter/
wotitle/rule_filing, at MIAX’s principal
office, 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
6 17
CFR 200.30–3(a)(31).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
E:\FR\FM\25MRN1.SGM
25MRN1
]]>Agencies
[Federal Register Volume 80, Number 57 (Wednesday, March 25, 2015)]
[Notices]
[Pages 15831-15834]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-06711]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-74533; File No. SR-Phlx-2015-023]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Updating to
Certain Phlx Rules
March 19, 2015.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on March 12, 2015, 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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Rules 50 entitled ``Failure to Pay
Dues, Fees and Other Charges;'' 53, entitled ``Liability for Dues Until
Transfer or Military Service;'' 99 entitled ``Back-Up Trading
Arrangements;'' and 443 entitled ``Employees.'' The Exchange proposes
to delete Rules 51 entitled ``Enforcement of Capital Funding Fees;'' 54
entitled ``Service Fee;'' 55 entitled ``Claims by Formed or Deceased
Members;'' and 442 entitled ``Communications.''
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 update certain Phlx
rules related to the payment of fees to harmonize the Exchange's
Rulebook text and modernize Exchange rules. The Exchange proposes to
amend rule text, make minor technical amendments to certain rules and
to delete other rules. Each proposed rule change is discussed in
greater detail below.
Amendment to Certain Exchange Rules
The Exchange proposes to amend Rule 50, entitled ``Failure to Pay
Dues, Fees and Other Charges.'' The Exchange proposes to conform Rule
50(a) to NASDAQ Stock Market LLC (``Nasdaq'') Rule 9553 and NASDAQ OMX
BX, Inc. (``BX'') Rule 9553(a). The Exchange is proposing to adopt rule
text similar to Nasdaq Rule 9553 and BX Rule 9553 in place of the
current rule text in Rule 50(a), (d) and (f). The Exchange is also
proposing to modify the headers to match those of Nasdaq Rule 9553 and
BX Rule 9553. The word ``termination'' in the Phlx rule is replaced
with the word ``cancellation or bar.'' The Exchange's amendments are
not substantive in nature. The amendments
[[Page 15832]]
seek to align these rules with Nasdaq rules.
The Exchange proposes to amend Rule 53, entitled ``Liability for
Dues Until Transfer or Military Service'' to delete the current rule
text and adopt the language in Nasdaq IM-1002 and BX IM-1002-2. This
rule allows associated persons to be placed on inactive status, thereby
preserving their registration, while serving in the Armed Forces of the
United States.\3\ The current rule describes the liability for dues of
a member that is active in the military or naval service. The current
rule notes that the member's liability continues unless the permit is
transferred or the Board of Directors waives dues and assessments. The
proposed rule text permits a member serving in the military to retain
eligibility to receive transaction related compensation, provided they
do not perform the duties of a registered person while inactive. The
inactive military member would not be subject to fees or be required to
complete Regulatory or Firm Elements requirements. The rule provides
similar relief for sole proprietorships that are active in the Armed
Forces. Finally, the rule affords relief to persons currently not
registered with a member or member organization and subsequently is
active in the Armed Forces within two years after the date a person
ceases to be registered with a member or member organization with
respect to registration requirements provided notice is given within a
specified time.\4\ If a person placed upon inactive status while
serving in the Armed Forces of the United States ceases to be
registered with a member or member organization, Phlx will defer the
lapse of registration requirements during the pendency of his or her
active service in the Armed Forces of the United States.
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\3\ See Nasdaq IM-1002 and BX IM-1002-2.
\4\ Phlx must be properly notified of the person's period of
active military service within 90 days following his or her
completion of active service or upon his or her re-registration with
a member or member organization, whichever occurs first. The
deferral will terminate 90 days following the person's completion of
active service in the Armed Forces of the United States.
Accordingly, if such person does not re-register with a member or
member organization within 90 days following his or her completion
of active service in the Armed Forces of the United States, the
amount of time in which the person must become re-registered with a
member or member organization without being subject to the
qualification examination requirements shall consist of the standard
two-year period provided in Phlx Rules 611, 613, and 3228 reduced by
the period of time between the person's Phlx is properly notified of
the person's period of active military service within 90 days
following his or her completion of active service or upon his or her
re-registration with a member or member organization, whichever
occurs first. The deferral will terminate 90 days following the
person's completion of active service in the Armed Forces of the
United States.
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Nasdaq based its adoption of the rule on a National Association of
Securities Dealers (hereinafter ``FINRA'') rule. FINRA tolled the two-
year licensing expiration provisions under its rule for a person
previously registered with a member who commences active military duty
within two years after he or she has ceased to be registered with the
member, and also tolled the expiration provisions for a person placed
upon ``inactive'' status, who, while serving in the Armed Forces of the
United States, ceases to be registered with a member.\5\
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\5\ See Securities Exchange Act Release No. 53182 (January 26,
2006), 71 FR 5391 (February 1, 2006) (SR-NASD-2005-135).
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NASD's Rule IM-1000-2 relieves active duty professionals from
continuing education requirements. With respect to the Firm Element
requirement of continuing education, FINRA provides that only persons
who have ``direct contact with customers'' in the conduct of securities
activities are subject to the Firm Element requirement.\6\ active duty
professionals are excluded from the Firm Element requirement because
they do not have contact with customers. FINRA's rule expressly states
that active duty professionals are not required to complete either of
the Regulatory or Firm Elements of the continuing education
requirements during the pendency of such inactive status.\7\ The
proposed rule change will harmonize the Phlx rule with the Nasdaq and
BX rules as well as FINRA's rule.
---------------------------------------------------------------------------
\6\ See FINRA Rule 1250(b)(1).
\7\ Id.
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The Exchange proposes to amend Rule 99, entitled ``Back-Up Trading
Arrangements,'' to make technical conforming amendments to the rule
text. This rule change is not substantive in nature; rather, the rule
text amendments seek to conform the word usage within the text of this
rule.
The Exchange proposes to amend Rule 443, entitled ``Employees'' by
renaming the rule ``Trading Floor Admittance'' and making minor rule
amendments to clarify the rule text. Rule 443 states, '' [n]o employee
of a member or member organization shall be admitted to the floor
unless he is registered with and approved by the Exchange, which may in
its discretion require the payment of a fee with respect to each
employee so approved, and may at any time in its discretion withdraw
any approval so given.'' The Exchange proposes to reference Options
Regulation 5 regarding non-member visitors within this rule to add
clarity to admittance to the options trading floor for non-members. The
other amendments to this rule are technical in nature. There are no
substantive changes proposed to current Phlx Rule 443.
Deleted Rules
The Exchange proposes to delete Rule 51 entitled ``Enforcement of
Capital Funding Fees.'' This rule is no longer applicable today. This
rule permits the Exchange to take certain specified measures if an
owner of a membership fails to pay (or have paid on its behalf) any
capital funding fee imposed by the Exchange when due. The rule
specifies what enforcement action may be taken against an owner for
failure to pay any capital funding fee imposed by the Exchange. The
rule delineates the remedies that shall be taken by the Board if the
capital funding fee is not paid and allows for a variety of remedies
ranging from the imposition of a late fee to reversion and sale by the
Exchange of the equitable title to a membership. The remedies are set
forth in such a way as to apply the less onerous remedies (i.e., like
fees) first and the more serious remedies (i.e., suspension of right to
trade or lease and reversion of membership) only after the Exchange has
not received payment within 90 days after the date of the original
invoice (or such longer period for which a lease agreement is in effect
as a result of the election by a lessee to continue paying the capital
funding fee). By allowing this graduated scale of remedies, the owners
are put on notice as to what remedies will be imposed if payment is not
received in a timely manner, with the more serious remedies being
applied after a longer period of time. In addition, the rule delineates
the Board's responsibilities and authority for handling instances in
which an owner fails to pay the capital funding fee when due.\8\
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\8\ See Securities and Exchange Commission 44872 (September 28,
2001), 66 FR 51084 (October 5, 2001) (SR-Phlx-99-52).
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The rule was designed to protect innocent lessees from being
unexpectedly dispossessed from their memberships and trading rights in
the event of a nonpayment by their lessors. This was important in the
days when Phlx had seats, prior to demutualization; there are no longer
any seats, owners or lessors. Today permits are issued to members and
member organizations. Permits provide trading rights \9\ today and the
Exchange collects fees via direct debit.\10\ This rule is
[[Page 15833]]
outdated and the Exchange proposes to remove it from the Rulebook.
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\9\ See Rule 908.
\10\ See Rule 909.
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The Exchange also proposes to delete Rule 54 entitled ``Service
Fee'' because the rule is outdated. The rule provides, ``[m]embers and
member organizations who are not also members of a subsidiary of the
Exchange but who use or benefit from the facilities or services of such
subsidiary, may be required by the Board of Directors to pay fees or
charges to the Exchange for such use or benefit; provided, however,
that such fees or charges may be imposed only if they are similar in
structure and rate to those imposed by such subsidiary on its own
members using or benefiting from the same facilities or services.'' The
Exchange does not have any active subsidiaries today.\11\ This rule is
therefore not applicable and should be deleted from the Rulebook. The
Exchange also proposes to remove the reference to Rule 54 from Rule
3202, entitled ``Application of Other rules of the Exchange.'' Rule
3202 adopts certain rules into the equity rules. The Exchange proposes
to remove the reference to Rule 54 from Rule 3202 as well.
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\11\ Phlx's only subsidiary is the Stock Clearing Corporation of
Philadelphia. This subsidiary is inactive.
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The Exchange proposes to delete Rule 55, entitled ``Claims by
Formed or Deceased Members.'' This rule states, ``[w]hen a member is in
debt to another member the death of the creditor member shall not
affect the rights of such creditor or member, his organization or
estate in respect of such debt.'' As noted above, the Exchange issues
permits today for access to trading on the Exchange. At the time, prior
to demutualization, when the Exchange issued seats, those seats could
be leased. This is no longer the case. Members are not indebted to
other members in the same manner today. This rule is no longer
applicable and should be removed from the Rulebook. The Exchange also
proposes to remove the reference to Rule 55 from Rule 3202, entitled
``Application of Other Rules of the Exchange.'' Rule 3202 adopts
certain rules into the equity rules. The Exchange proposes to remove
the reference to Rule 55 from Rule 3202 as well.
The Exchange proposes to delete Rule 442, entitled
``Communications.'' This rule provides that ``[c]ommunications shall
not be read to the Exchange nor posted on the bulletin board without
the consent of the Secretary.'' This rule is outdated. Today, the
Exchange uses electronic means such as email, electronic alerts and its
Web site to issue communications. There is no longer a bulletin board
on the Exchange's trading floor as there was when the rule was enacted.
The Exchange proposes removing this outdated rule from the Rulebook.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \12\ in general, and furthers the objectives of Section
6(b)(5) of the Act \13\ in particular, in that it 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 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. The Exchange believes that
these proposed rule changes will harmonize the text of its rules and
modernize the Phlx Rulebook. The Exchange is updating certain rules in
order to ensure consistency in the rule text. The Exchange is proposing
to delete other rules because they are outdated.
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\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(5).
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The proposed rule change to Rule 53 seeks to harmonize this rule
with Nasdaq and BX Rules. The proposed new rules addresses not only
fees, which are addressed by the current rule, but also registration,
compensation, Regulatory and Firm Element requirements, sole proprietor
members and formerly registered persons. The proposed rule states that
a registered person placed on inactive status shall not be included
within the scope of fees, whereas the Phlx rule indicates a member
serving in the military in active status is liable for dues to the
Exchange. The Exchange desires to conform the treatment of members
serving in the military to that of other exchanges. The NASDAQ, BX and
NASD rules provide inactive members serving in the military with a
reprieve from certain obligations registration and other
requirements.\14\ The Exchange desires to adopt a similar treatment of
these members, which it believes will foster cooperation and
coordination with persons engaged in facilitating transactions in
securities.
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\14\ See Nasdaq IM-1002, BX IM-1002-2 and NASD IM-1002-2.
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The remaining rule amendment proposals either modernize the rule
text and add clarity or delete outdated rule text. The Exchange
believes that these proposals will benefit members and member
organizations by bringing additional clarity to the Rulebook.
B. Self-Regulatory Organization's Statement on Burden on Competition
The proposed rule change does not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act. The Exchange's proposed amendments seek to harmonize the
Rulebook by conforming the text of certain rules throughout the rule
and also deleting certain unnecessary rules. These rule amendments do
not place an undue burden on competition but rather bring clarity to
the Rulebook.
The proposed amendments to Rule 53 will provide members with a rule
similar to rules on Nasdaq and BX. The Exchange's amendment will
conform the treatment of members serving in the military to that of
other exchanges. The Exchange believes that adopting the Nasdaq and BX
rules will provide members and member organizations with processes
similar to other self-regulatory organizations and therefore does not
create an undue burden on either intra-market or inter-market
competition.
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 \15\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\16\
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\15\ 15 U.S.C. 78s(b)(3)(a)(ii).
\16\ 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
[[Page 15834]]
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-2015-023 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-2015-023. 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 20549-1090, 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 offices 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-2015-023, and should be submitted on or before April 15, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-06711 Filed 3-24-15; 8:45 am]
BILLING CODE 8011-01-P
