Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend a Quote Spread Parameter Provision, 4724-4726 [2016-01665]

Download as PDF 4724 Federal Register / Vol. 81, No. 17 / Wednesday, January 27, 2016 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–76955; File No. SR– NYSEArca–2015–93] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Designation of a Longer Period for Commission Action on Proposed Rule Change, as Modified by Amendment No. 1, Relating To Listing and Trading of Shares of the Cumberland Municipal Bond ETF Under NYSE Arca Equities Rule 8.600 January 21, 2016. On November 24, 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 list and trade shares of the Cumberland Municipal Bond ETF, a series of the ETF is Series Trust I. The proposed rule change was published for comment in the Federal Register on December 14, 2015.3 On December 29, 2015, the Exchange submitted Amendment No. 1 to the proposed rule change.4 The Commission received no comment letters on the proposed rule change. Section 19(b)(2) of the Act 5 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. 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 76590 (December 8, 2015), 80 FR 77384 (‘‘Notice’’). 4 In Amendment No. 1, which replaces and supersedes the original filing in its entirety, the Exchange made clarifying changes, added a representation regarding municipal bonds, deleted a sentence regarding redemption, and clarified pricing information for certain assets. Amendment No. 1 is not subject to notice and comment because it is a technical amendment that does not materially alter the substance of the proposed rule change or raise any novel regulatory issues. It is available at: http://www.sec.gov/comments/sr-nysearca-2015-93/ nysearca201593-1.pdf. 5 15 U.S.C. 78s(b)(2). asabaliauskas on DSK5VPTVN1PROD with NOTICES 2 17 VerDate Sep<11>2014 19:41 Jan 26, 2016 Jkt 238001 Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,6 designates April 27, 2016, as the date by which the Commission should either approve or disapprove or institute proceedings to determine whether to disapprove the proposed rule change (File Number SR–NYSEArca–2015–93), as modified by Amendment No. 1. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.7 Brent J. Fields, Secretary. [FR Doc. 2016–01536 Filed 1–26–16; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–76966; File No. SR–Phlx– 2016–06] Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend a Quote Spread Parameter Provision January 22, 2016. 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 January 14, 2016, 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 Rule 1014(c)(i)(A)(1)(b) respecting U.S. dollar-settled foreign currency options (‘‘FCO’’) quote spread parameters, also known as bid/ask differentials, as described further below. The text of the proposed rule change is below; proposed new language is italicized. * * * * * NASDAQ OMX PHLX Rules * * * * * 6 Id. 7 17 CFR 200.30–3(a)(31). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00117 Fmt 4703 Sfmt 4703 Rule 1014. Obligations and Restrictions Applicable to Specialists and Registered Options Traders (a)–(b) No change. (c) In Classes of Option Contracts to Which Assigned—Affirmative Obligations. With respect to classes of option contracts to which his assignment extends, a Specialist and an ROT, whenever the ROT (except an RSQT) enters the trading crowd in other than a floor brokerage capacity or is called upon by an Options Exchange Official or a Floor Broker, to make a market, are expected to engage, to a reasonable degree under the existing circumstances, in dealing for his own account when there exists, or it is reasonably anticipated that there will exist, a lack of price continuity, a temporary disparity between the supply of and demand for a particular option contract, or a temporary distortion of the price relationships between option contracts of the same class. Without limiting the foregoing, a Specialist and an ROT is expected to perform the following activities in the course of maintaining a fair and orderly market: (i) Options on Equities (including Exchange-Traded Fund Shares), Index Options, and U.S. dollar-settled Foreign Currency Options. (A)(1) Quote Spread Parameters (Bid/ Ask Differentials)— (a) Options on equities and index options bidding and/or offering so as to create differences of no more than $.25 between the bid and the offer for each option contract for which the prevailing bid is less than $2; no more than $.40 where the prevailing bid is $2 or more but less than $5; no more than $.50 where the prevailing bid is $5 or more but less than $10; no more than $.80 where the prevailing bid is $10 or more but less than $20; and no more than $1 where the prevailing bid is $20 or more, provided that, in the case of equity options, the bid/ask differentials stated above shall not apply to in-the-money series where the market for the underlying security is wider than the differentials set forth above. For such series, the bid/ask differentials may be as wide as the quotation for the underlying security on the primary market, or its decimal equivalent rounded up to the nearest minimum increment. The Exchange may establish differences other than the above for one or more series or classes of options. (b) Options on U.S. dollar-settled FCO. With respect to all U.S. dollarsettled FCO bidding and/or offering so as to create differences of no more than $.25 between the bid and the offer for each option contract for which the E:\FR\FM\27JAN1.SGM 27JAN1 Federal Register / Vol. 81, No. 17 / Wednesday, January 27, 2016 / Notices prevailing bid is less than $2.00; no more than $.40 where the prevailing bid is $2.00 or more but less than $5.00; no more than $.50 where the prevailing bid is $5.00 or more but less than $10.00; no more than $.80 where the prevailing bid is $10.00 or more but less than $20.00; and no more than $1.00 where the prevailing bid is $20.00 or more. The Exchange may establish differences other than the above for one or more series or classes of options. (2) No change. (d)–(g) No change. * * *Commentary: —————— * .01–.19 No change. * * * * 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 asabaliauskas on DSK5VPTVN1PROD with NOTICES 1. Purpose The purpose of the proposal is to update and clarify the quote spread parameters applicable to FCOs. Quote spread parameters establish the maximum permissible width between the bid and the offer in a particular option series. Quote spreads apply to quotes, not orders, and are thus only applicable to the quoting participants who are required to submit two-sided quotes. This includes specialists and the various types of Registered Options Traders (‘‘ROTs’’) enumerated in Rule 1014(b). Specifically, the Exchange proposes to amend Rule 1014(c)(i)(A)(1)(b) respecting FCOs to parallel the following language in Rule 1014(c)(i)(A)(1)(a) respecting equity and index options: the Exchange may establish differences other than the above for one or more series or classes of options. The Exchange inadvertently did not add this language respecting FCOs, even though the ability to establish different quote spread parameters is contemplated in Options VerDate Sep<11>2014 19:41 Jan 26, 2016 Jkt 238001 Floor Procedure Advice (‘‘Advice’’) F– 6,3 Option Quote Parameters. Advice F– 6 provides that relief from the established bid/ask differentials may be granted upon the receipt of an approval of an Options Exchange Official.4 This relief is clearly available for FCOs under Advice F–6 based on the placement of the language. The Exchange believes that, although the relief language in Advice F–6 implies (but does not expressly require) that a request must be made to the Exchange, the result of any such relief would be to establish a different quote spread parameter.5 If relief is granted, such relief applies to all market participants, regardless of whether a request was specifically made or whether it was made by one particular market participant. The Exchange certainly would not require that such relief be doled out participantby-participant. The Exchange commonly announces such relief by issuing an Options Regulatory Alert. Accordingly, the Exchange believes that adopting the proposed language to expressly permit different bid/ask differentials is clearer and parallels the language applicable to other options products, all of which trade on the same trading floor and through the same trading system. There is no reason why different quote spread parameters should be available to equity and index options and not FCOs, much like the relief provision in Advice F–6 applies to all options, including FCOs. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act 6 in general, and furthers the objectives of Section 6(b)(5) of the Act 7 in particular, in that it is designed to promote just and equitable principles of trade and protect investors and the public interest by making it clear that respecting FCOs, just like all other options, different quote spread parameters can be established by the Exchange to address specific requests as well as general market events. This should promote just and equitable principles of trade and protect investors 3 Options floor procedures advices generally correspond to Exchange rules and comprise the Exchange’s minor rule violation plan establishing preset fines for certain violations pursuant to Rule 19d–1(c) under the Act. 17 CFR 240.19d–1(c). 4 An Options Exchange Official is an Exchange staff member or contract employee designated as such by the Chief Regulatory Officer. See Rule 1(w). 5 Some of the circumstances that may result in wider quote spread parameters include volatility in the underlying, recent news affecting the underlying and heavy volume in the underlying or the overlying option. 6 15 U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(5). PO 00000 Frm 00118 Fmt 4703 Sfmt 4703 4725 by having quote spread parameters reflect potential volatility and activity in the underlying currency, and thereby encourage robust market making in FCOs that reflects current market conditions. 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. With respect to intra-market competition, the proposed language will apply to all quoting market participants equally. With respect to inter-market competition, market participants who disagree with the quote spread parameters that the Exchange establishes may choose to trade FCOs on another exchange. 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)(iii) of the Act 8 and subparagraph (f)(6) of Rule 19b–4 thereunder.9 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. 8 15 U.S.C. 78s(b)(3)(a)(iii). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. 9 17 E:\FR\FM\27JAN1.SGM 27JAN1 4726 Federal Register / Vol. 81, No. 17 / Wednesday, January 27, 2016 / Notices IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– Phlx–2016–06 on the subject line. Paper Comments asabaliauskas on DSK5VPTVN1PROD with NOTICES • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–Phlx–2016–06. 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 (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–Phlx– 2016–06 and should be submitted on or before February 17, 2016. 19:41 Jan 26, 2016 [FR Doc. 2016–01665 Filed 1–26–16; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Electronic Comments VerDate Sep<11>2014 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Brent J. Fields, Secretary. Jkt 238001 [Release No. 34–76969; File No. SR– NYSEArca–2016–13] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the Exchange’s Schedule of Fees and Charges To Define the Term ‘‘Exchange Traded Products’’ and To Provide for the Proration of Annual Fees Applicable to Exchange Traded Products That Have Liquidated January 22, 2016. 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 January 14, 2016, NYSE Arca, Inc. (the ‘‘Exchange’’ or ‘‘NYSE Arca’’) 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.3 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 the Exchange’s Schedule of Fees and Charges to define the term ‘‘Exchange Traded Products’’ and to provide for the proration of Annual Fees applicable to Exchange Traded Products that have liquidated. The proposed rule change is available on the Exchange’s Web site at www.nyse.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. 10 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 The Exchange originally filed this proposed rule change on December 23, 2015 under File No. SR– NYSEArca–2015–126, and the Exchange subsequently withdrew that filing on January 5, 2016. The Exchange refiled this proposed rule change on January 5, 2016 under File No. SR– NYSEArca–2016–07. The Exchange subsequently withdrew that filing on January 14, 2016 and filed this filing. 1 15 PO 00000 Frm 00119 Fmt 4703 Sfmt 4703 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 Schedule of Fees and Charges for NYSE Arca Equities listing fees (‘‘Schedule’’) to define the term ‘‘Exchange Traded Products,’’ to revise the Annual Fees paid by issuers of Exchange Traded Products, and to make technical, nonsubstantive changes to the Schedule. The term ‘‘Derivative Securities Products’’ is currently defined in Footnote 3 of the Schedule to mean the securities described in NYSE Arca Equities Rules 5.2(j)(3) (Investment Company Units); 8.100 (Portfolio Depositary Receipts); 8.200 (Trust Issued Receipts); 8.201 (CommodityBased Trust Shares); 8.202 (Currency Trust Shares); 8.203 (Commodity Index Trust Shares); 8.204 (Commodity Futures Trust Shares); 8.300 (Partnership Units); 8.500 (Trust Units); 8.600 (Managed Fund Shares), and 8.700 (Managed Trust Securities). The Exchange proposes to replace the term ‘‘Derivative Securities Products’’ with the term ‘‘Exchange Traded Products’’ as a term that is more commonly used by investors and the public with respect to the equity securities that list and trade on the Exchange and distinguishes them from derivatives, such as futures or swaps. To effect this change, the Exchange proposes to amend footnote 3 of the Schedule and to replace the term ‘‘Derivative Securities Products’’ with the term ‘‘Exchange Traded Products’’ throughout the Schedule. The Schedule includes ‘‘Annual Fees’’ payable by issuers of Exchange Traded Products listed on the Exchange. Pursuant to Footnote 8 of the Schedule, issuers are subject to Annual Fees in the year of listing, pro-rated based on days listed that calendar year. The Annual Fees for Exchange Traded Products are billed in January for the forthcoming E:\FR\FM\27JAN1.SGM 27JAN1

Agencies

[Federal Register Volume 81, Number 17 (Wednesday, January 27, 2016)]
[Notices]
[Pages 4724-4726]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-01665]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76966; File No. SR-Phlx-2016-06]


Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend a 
Quote Spread Parameter Provision

January 22, 2016.
    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 January 14, 2016, 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 proposes to amend Rule 1014(c)(i)(A)(1)(b) respecting 
U.S. dollar-settled foreign currency options (``FCO'') quote spread 
parameters, also known as bid/ask differentials, as described further 
below.
    The text of the proposed rule change is below; proposed new 
language is italicized.
* * * * *

NASDAQ OMX PHLX Rules

* * * * *

Rule 1014. Obligations and Restrictions Applicable to Specialists and 
Registered Options Traders

    (a)-(b) No change.
    (c) In Classes of Option Contracts to Which Assigned--Affirmative 
Obligations. With respect to classes of option contracts to which his 
assignment extends, a Specialist and an ROT, whenever the ROT (except 
an RSQT) enters the trading crowd in other than a floor brokerage 
capacity or is called upon by an Options Exchange Official or a Floor 
Broker, to make a market, are expected to engage, to a reasonable 
degree under the existing circumstances, in dealing for his own account 
when there exists, or it is reasonably anticipated that there will 
exist, a lack of price continuity, a temporary disparity between the 
supply of and demand for a particular option contract, or a temporary 
distortion of the price relationships between option contracts of the 
same class. Without limiting the foregoing, a Specialist and an ROT is 
expected to perform the following activities in the course of 
maintaining a fair and orderly market:
    (i) Options on Equities (including Exchange-Traded Fund Shares), 
Index Options, and U.S. dollar-settled Foreign Currency Options.
    (A)(1) Quote Spread Parameters (Bid/Ask Differentials)--
    (a) Options on equities and index options bidding and/or offering 
so as to create differences of no more than $.25 between the bid and 
the offer for each option contract for which the prevailing bid is less 
than $2; no more than $.40 where the prevailing bid is $2 or more but 
less than $5; no more than $.50 where the prevailing bid is $5 or more 
but less than $10; no more than $.80 where the prevailing bid is $10 or 
more but less than $20; and no more than $1 where the prevailing bid is 
$20 or more, provided that, in the case of equity options, the bid/ask 
differentials stated above shall not apply to in-the-money series where 
the market for the underlying security is wider than the differentials 
set forth above. For such series, the bid/ask differentials may be as 
wide as the quotation for the underlying security on the primary 
market, or its decimal equivalent rounded up to the nearest minimum 
increment. The Exchange may establish differences other than the above 
for one or more series or classes of options.
    (b) Options on U.S. dollar-settled FCO. With respect to all U.S. 
dollar-settled FCO bidding and/or offering so as to create differences 
of no more than $.25 between the bid and the offer for each option 
contract for which the

[[Page 4725]]

prevailing bid is less than $2.00; no more than $.40 where the 
prevailing bid is $2.00 or more but less than $5.00; no more than $.50 
where the prevailing bid is $5.00 or more but less than $10.00; no more 
than $.80 where the prevailing bid is $10.00 or more but less than 
$20.00; and no more than $1.00 where the prevailing bid is $20.00 or 
more. The Exchange may establish differences other than the above for 
one or more series or classes of options.
    (2) No change.
    (d)-(g) No change.
* * *Commentary: ------------
    .01-.19 No change.
* * * * *

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 the proposal is to update and clarify the quote 
spread parameters applicable to FCOs. Quote spread parameters establish 
the maximum permissible width between the bid and the offer in a 
particular option series. Quote spreads apply to quotes, not orders, 
and are thus only applicable to the quoting participants who are 
required to submit two-sided quotes. This includes specialists and the 
various types of Registered Options Traders (``ROTs'') enumerated in 
Rule 1014(b).
    Specifically, the Exchange proposes to amend Rule 
1014(c)(i)(A)(1)(b) respecting FCOs to parallel the following language 
in Rule 1014(c)(i)(A)(1)(a) respecting equity and index options: the 
Exchange may establish differences other than the above for one or more 
series or classes of options. The Exchange inadvertently did not add 
this language respecting FCOs, even though the ability to establish 
different quote spread parameters is contemplated in Options Floor 
Procedure Advice (``Advice'') F-6,\3\ Option Quote Parameters. Advice 
F-6 provides that relief from the established bid/ask differentials may 
be granted upon the receipt of an approval of an Options Exchange 
Official.\4\ This relief is clearly available for FCOs under Advice F-6 
based on the placement of the language. The Exchange believes that, 
although the relief language in Advice F-6 implies (but does not 
expressly require) that a request must be made to the Exchange, the 
result of any such relief would be to establish a different quote 
spread parameter.\5\ If relief is granted, such relief applies to all 
market participants, regardless of whether a request was specifically 
made or whether it was made by one particular market participant. The 
Exchange certainly would not require that such relief be doled out 
participant-by-participant. The Exchange commonly announces such relief 
by issuing an Options Regulatory Alert.
---------------------------------------------------------------------------

    \3\ Options floor procedures advices generally correspond to 
Exchange rules and comprise the Exchange's minor rule violation plan 
establishing preset fines for certain violations pursuant to Rule 
19d-1(c) under the Act. 17 CFR 240.19d-1(c).
    \4\ An Options Exchange Official is an Exchange staff member or 
contract employee designated as such by the Chief Regulatory 
Officer. See Rule 1(w).
    \5\ Some of the circumstances that may result in wider quote 
spread parameters include volatility in the underlying, recent news 
affecting the underlying and heavy volume in the underlying or the 
overlying option.
---------------------------------------------------------------------------

    Accordingly, the Exchange believes that adopting the proposed 
language to expressly permit different bid/ask differentials is clearer 
and parallels the language applicable to other options products, all of 
which trade on the same trading floor and through the same trading 
system. There is no reason why different quote spread parameters should 
be available to equity and index options and not FCOs, much like the 
relief provision in Advice F-6 applies to all options, including FCOs.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \6\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \7\ in particular, in that it is designed to promote 
just and equitable principles of trade and protect investors and the 
public interest by making it clear that respecting FCOs, just like all 
other options, different quote spread parameters can be established by 
the Exchange to address specific requests as well as general market 
events. This should promote just and equitable principles of trade and 
protect investors by having quote spread parameters reflect potential 
volatility and activity in the underlying currency, and thereby 
encourage robust market making in FCOs that reflects current market 
conditions.
---------------------------------------------------------------------------

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

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. With respect to intra-market 
competition, the proposed language will apply to all quoting market 
participants equally. With respect to inter-market competition, market 
participants who disagree with the quote spread parameters that the 
Exchange establishes may choose to trade FCOs on another exchange.

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)(iii) of the Act \8\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\9\
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(a)(iii).
    \9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) otherwise in furtherance of the 
purposes of the Act. If the Commission takes such action, the 
Commission shall institute proceedings to determine whether the 
proposed rule should be approved or disapproved.

[[Page 4726]]

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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-Phlx-2016-06 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-Phlx-2016-06. 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 (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-Phlx-2016-06 and should be 
submitted on or before February 17, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2016-01665 Filed 1-26-16; 8:45 am]
 BILLING CODE 8011-01-P