Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding Delivery of Options Disclosure Documents and Special Statement for Uncovered Options Writers, 31638-31640 [2017-14247]
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Federal Register / Vol. 82, No. 129 / Friday, July 7, 2017 / Notices
report of the findings, as well as
recommended actions, will be
published by ATALM.
Agency: Institute of Museum and
Library Services.
Title: 2017 Sustaining Indigenous
Culture Survey: The Structure,
Activities, and Needs of Tribal
Archives, Libraries, and Museums.
OMB Number: To be determined.
Frequency: One-time collection
anticipated.
Affected Public: The target population
is tribal archive, library, and museum
centers, as well as leaders of tribal
communities without cultural programs.
Number of Respondents: To be
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Estimated Total Annual Burden: To
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Total Annual Costs: To be
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Public Comments Invited: Comments
submitted in response to this notice will
be summarized and/or included in the
request for OMB’s clearance of this
information collection.
FOR FURTHER INFORMATION CONTACT: Dr.
Sandra Toro, Senior Program Officer,
Institute of Museum and Library
Services, 955 L’Enfant Plaza SW., Suite
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can be reached by Telephone: 202–653–
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through Friday, except Federal holidays.
Dated: July 3, 2017.
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Grants Management Specialist, Office of Chief
Information Officer.
[FR Doc. 2017–14302 Filed 7–6–17; 8:45 am]
BILLING CODE 7036–01–P
SECURITIES AND EXCHANGE
COMMISSION
asabaliauskas on DSKBBXCHB2PROD with NOTICES
[Release No. 34–81069; File No. SR–Phlx–
2017–49]
Self-Regulatory Organizations;
NASDAQ PHLX LLC; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change Regarding
Delivery of Options Disclosure
Documents and Special Statement for
Uncovered Options Writers
June 30, 2017.
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on June 20,
2017 NASDAQ 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 1029, Delivery of Options
Disclosure Documents.
The text of the proposed rule change
is available on the Exchange’s Web site
at
https://nasdaqphlx.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 Exchanges proposes to amend
Rule 1029 in two respects, first in
connection with the required delivery to
customers of any amended Options
Disclosure Document (‘‘ODD’’), and
second to set forth for the use of
members and member organizations a
Special Statement for Uncovered
Options Writers for delivery to
customers.
Delivery of Amended Options
Disclosure Documents
Rule 1029 currently requires every
member and member organization to
deliver a current ODD to each customer
at or prior to the time such customer’s
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
VerDate Sep<11>2014
20:56 Jul 06, 2017
Jkt 241001
1 15
2 17
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00091
Fmt 4703
Sfmt 4703
account is approved for options trading.
The rule also contains a requirement
that each amended ODD shall be
distributed to every customer having an
account approved for trading the
options class(es) to which such ODD
relates, or, the alternative, shall be
distributed not later than the time a
confirmation of a transaction is
delivered to each customer who enters
into an option transaction pertaining to
such an options class. The language
concerning amended Options Disclosure
Documents is somewhat awkward and
cumbersome, with the required timing
of the provision of the amended ODD
presented as ‘‘an alternative’’ to a
requirement that the amended ODD be
distributed in the first place to every
customer having an account approved
for trading the options classes(es) to
which such ODD relates. The Exchange
proposes to delete this language, and to
replace it with more straightforward
language requiring a copy of each
amendment to an ODD to be furnished
to each customer who was previously
furnished the ODD to which the
amendment pertains, not later than the
time a confirmation of a transaction in
the category of options to which the
amendment pertains is delivered to
such customer. This language is based
upon comparable language in Chapter
11, Section 15(a)(ii), of the Nasdaq
Options Market rules, Nasdaq ISE Rule
616(a)(2), and Chicago Board Options
Exchange (‘‘CBOE’’) Rule 9.15(a). The
Exchange is also making a minor edit to
the introductory sentence, substituting
the word ‘‘transactions’’ for the word
‘‘trading’’ in order to conform to the
terminology used by the foregoing
exchanges.
Special Statement for Uncovered
Options Writers
Rule 1024(c)(v) requires every
member organization transacting
business with the public in uncovered
option contracts develop, implement
and maintain specific written
procedures governing the conduct of
such business, including requirements
that customers approved for writing
uncovered short options transactions be
provided with a special written
description of the risks inherent in
writing uncovered short option
transactions, at or prior to the initial
uncovered short option transaction.
This written disclosure document must
be furnished to customers in addition to
the ODD required to be provided to
customers trading in options pursuant
to Rule 1029(a). Current Rule 1029(b)
states that the written description of
risks required by Rule 1024(c)(v) shall
be in a format prescribed by the
E:\FR\FM\07JYN1.SGM
07JYN1
Federal Register / Vol. 82, No. 129 / Friday, July 7, 2017 / Notices
Exchange or in a format developed by
the member organization, provided it
contains substantially similar
information as the prescribed Exchange
format and has received prior written
approval of the Exchange.
The Exchange now proposes to add
Rule 1029(c), which will set forth a
sample risk description captioned
‘‘Special Statement for Uncovered
Options Writers’’ (the ‘‘Special
Statement’’) for use by member
organizations to satisfy the requirements
of Rule 1029(b). The Special Statement
alerts customers to the special risks
associated with uncovered options
writing which may expose investors to
potentially significant loss, and states
that this type of strategy may therefore
not be suitable for all customers
approved for options transactions. The
Special Statement describes potential
losses of uncovered call and put option
writing, the possibility of significant
margin calls, strategies where the
potential risk is unlimited,
consequences of unavailability of a
secondary market in options, and the
risk born by the writer of an Americanstyle option subject to assignment of an
exercise at any time after he has written
the option until the option expires. The
proposed rules are intended to increase
customer awareness of the risks entailed
in selling uncovered short option
contracts.3 This language is almost
identical to language contained in
Chapter 11, Section 15 (c) of the NOM
rules, CBOE Rule 9.15(b), and ISE Rule
616(d).
asabaliauskas on DSKBBXCHB2PROD with NOTICES
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,4 in general, and furthers the
objectives of Section 6(b)(5) of the Act,5
in particular, in that it is designed to
promote just and equitable principles of
trade, to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and, in general to protect
investors and the public interest. The
3 The Special Statement was originally based
upon a prototype developed by the Options SelfRegulatory Council consisting of representatives of
the American Stock Exchange, Chicago Board
Options Exchange, Midwest Stock Exchange,
National Association of Securities Dealers, New
York Exchange, Philadelphia Stock Exchange and
Pacific Stock Exchange. See Securities Exchange
Act Release No. 26952 (June 21, 1989), 54 FR 27256
(June 28, 1989). The language of the Special
Statement was included as an exhibit to SR–Phlx–
89–24 which was approved in the foregoing
approval order, but was not submitted as part of the
rule text in that filing. The Exchange is now adding
the Special Statement language into the actual rule
text.
4 15 U.S.C. 78f(b).
5 15 U.S.C. 78f(b)(5).
VerDate Sep<11>2014
20:56 Jul 06, 2017
Jkt 241001
31639
amendment of the portion of the rule
requiring the delivery to customers of
any amended ODD should protect
investors by making this regulatory
obligation more clear to members and
member organizations, thus ensuring
that amendments will be delivered to
each customer who was previously
furnished the ODD to which the
amendment pertains. The proposed rule
setting forth the Special Statement is
intended to protect investors by
facilitating increased customer
awareness of the particular risks
associated with selling uncovered short
option contracts. The distribution to
customers of this short succinct written
statement that describes the risks
associated with uncovered options
writing will help ensure investor
protection because it will increase
customer awareness of the potential for
significant losses in writing uncovered
short options contracts. Since disclosure
is an important component of investor
protection under the federal securities
laws, providing investors with this
special uncovered short options risk
statement may help ameliorate problems
associated with uncovered short options
transactions (e.g., significant margin
calls), especially during volatile
markets.
19(b)(3)(A)(iii) of the Act 7 and
subparagraph (f)(6) of Rule 19b–4
thereunder.8
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.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
Paper Comments
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. The language
which is proposed to be added to Rule
1029 has previously been considered
and approved by the Commission for
use in other exchanges’ rulebooks as
discussed above.6
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
PO 00000
6 See
footnote 3 above.
Frm 00092
Fmt 4703
Sfmt 4703
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–2017–49 on the subject line.
• 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–2017–49. 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
7 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.
8 17
E:\FR\FM\07JYN1.SGM
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31640
Federal Register / Vol. 82, No. 129 / Friday, July 7, 2017 / Notices
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–
2017–49 and should be submitted on or
before July 28, 2017.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.9
Brent J. Fields,
Secretary.
[FR Doc. 2017–14247 Filed 7–6–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
32723; 812–14716]
Vertical Capital Income Fund and
Oakline Advisors, LLC
July 3, 2017.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice.
asabaliauskas on DSKBBXCHB2PROD with NOTICES
AGENCY:
Notice of an application under section
6(c) of the Investment Company Act of
1940 (the ‘‘Act’’) for an exemption from
sections 18(a)(2), 18(c) and 18(i) of the
Act, under sections 6(c) and 23(c)(3) of
the Act for an exemption from rule 23c–
3 under the Act, and for an order
pursuant to section 17(d) of the Act and
rule 17d–1 under the Act.
SUMMARY OF APPLICATION: Applicants
request an order to permit certain
registered closed-end management
investment companies to issue multiple
classes of shares and to impose assetbased distribution and shareholder
service fees and early withdrawal
charges.
APPLICANTS: Vertical Capital Income
Fund (the ‘‘Initial Fund’’), and Oakline
Advisors, LLC (the ‘‘Adviser’’).
FILING DATES: The application was filed
on November 21, 2016, and amended on
April 20, 2017.
HEARING OR NOTIFICATION OF HEARING: An
order granting the requested relief will
be issued unless the Commission orders
9 17
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
20:56 Jul 06, 2017
Jkt 241001
a hearing. Interested persons may
request a hearing by writing to the
Commission’s Secretary and serving
applicants with a copy of the request,
personally or by mail. Hearing requests
should be received by the Commission
by 5:30 p.m. on July 28, 2017, and
should be accompanied by proof of
service on the applicants, in the form of
an affidavit, or, for lawyers, a certificate
of service. Pursuant to rule 0–5 under
the Act, hearing requests should state
the nature of the writer’s interest, any
facts bearing upon the desirability of a
hearing on the matter, the reason for the
request, and the issues contested.
Persons who wish to be notified of a
hearing may request notification by
writing to the Commission’s Secretary.
ADDRESSES: Secretary, U.S. Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090;
Applicants: c/o JoAnn Strasser, Esq.,
Thompson Hine LLP, 41 South High
Street, Suite 1700, Columbus, OH
43215–6101.
FOR FURTHER INFORMATION CONTACT:
Laura L. Solomon, Senior Counsel, at
(202) 551–6915, or David J. Marcinkus,
Branch Chief, at (202) 551–6821
(Division of Investment Management,
Chief Counsel’s Office).
SUPPLEMENTARY INFORMATION: The
following is a summary of the
application. The complete application
may be obtained via the Commission’s
Web site by searching for the file
number, or for an applicant using the
Company name box, at https://
www.sec.gov/search/search.htm or by
calling (202) 551–8090.
Applicants’ Representations
1. The Initial Fund is a Delaware
statutory trust that is registered under
the Act as a diversified, closed-end
management investment company. The
Initial Fund’s primary investment
objective is to seek income.
2. The Adviser is a Delaware limited
liability company and is registered as an
investment adviser under the
Investment Advisers Act of 1940
(‘‘Advisers Act’’). The Adviser serves as
investment adviser to the Initial Fund.
3. The applicants seek an order to
permit the Funds (as defined below) to
issue multiple classes of shares, each
having its own fee and expense
structure and to impose early
withdrawal charges and asset-based
distribution and shareholder service
fees with respect to certain classes.
4. Applicants request that the order
also apply to any continuously-offered
registered closed-end management
investment company that has been
previously organized or that may be
PO 00000
Frm 00093
Fmt 4703
Sfmt 4703
organized in the future for which the
Adviser or any entity controlling,
controlled by, or under common control
with the Adviser, or any successor in
interest to any such entity,1 acts as
investment adviser and which operates
as an interval fund pursuant to rule
23c–3 under the Act or provides
periodic liquidity with respect to its
shares pursuant to rule 13e–4 under the
Securities Exchange Act of 1934
(‘‘Exchange Act’’) (each, a ‘‘Future
Fund’’ and together with the Initial
Fund, the ‘‘Funds’’).2
5. Each Fund intends to engage in a
continuous offering of its shares of
beneficial interest. Applicants state that
additional offerings by any Fund relying
on the order may be on a private
placement or public offering basis.
Shares of the Funds will not be listed on
any securities exchange nor publicly
traded. There is currently no secondary
market for the Funds’ shares and the
Funds expect that no secondary market
will develop.
6. If the requested relief is granted, the
Initial Fund intends to redesignate its
common shares as Class A shares and to
commence a continuous offering of
Class I and Class C shares, with each
class having its own fee and expense
structure, and may also offer additional
classes of shares in the future. Because
of the different distribution fees,
services and any other class expenses
that may be attributable to the Class A,
Class I, and Class C shares, the net
income attributable to, and the
dividends payable on, each class of
shares may differ from each other.
7. Applicants state that, from time to
time, the Initial Fund may create
additional classes of shares, the terms of
which may differ from Class A, Class I
and Class C shares in the following
respects: (i) The amount of fees
permitted by different distribution plans
or different shareholder services fee
arrangements; (ii) voting rights with
respect to a distribution plan of a class;
(iii) different class designations; (iv) the
impact of any class expenses directly
attributable to a particular class of
shares allocated on a class basis as
described in the application; (v) any
differences in dividends and net asset
value resulting from differences in fees
under a distribution plan or in class
expenses; (vi) any early withdrawal
1 A successor in interest is limited to an entity
that results from a reorganization into another
jurisdiction or a change in the type of business
organization.
2 Any Fund relying on this relief in the future will
do so in a manner consistent with the terms and
conditions of the application. Applicants represent
that each entity presently intending to rely on the
requested relief is listed as an applicant.
E:\FR\FM\07JYN1.SGM
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]]>Agencies
[Federal Register Volume 82, Number 129 (Friday, July 7, 2017)]
[Notices]
[Pages 31638-31640]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-14247]
=======================================================================
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-81069; File No. SR-Phlx-2017-49]
Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Regarding Delivery
of Options Disclosure Documents and Special Statement for Uncovered
Options Writers
June 30, 2017.
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 June 20, 2017 NASDAQ 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 1029, Delivery of Options
Disclosure Documents.
The text of the proposed rule change is available on the Exchange's
Web site at https://nasdaqphlx.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 Exchanges proposes to amend Rule 1029 in two respects, first in
connection with the required delivery to customers of any amended
Options Disclosure Document (``ODD''), and second to set forth for the
use of members and member organizations a Special Statement for
Uncovered Options Writers for delivery to customers.
Delivery of Amended Options Disclosure Documents
Rule 1029 currently requires every member and member organization
to deliver a current ODD to each customer at or prior to the time such
customer's account is approved for options trading. The rule also
contains a requirement that each amended ODD shall be distributed to
every customer having an account approved for trading the options
class(es) to which such ODD relates, or, the alternative, shall be
distributed not later than the time a confirmation of a transaction is
delivered to each customer who enters into an option transaction
pertaining to such an options class. The language concerning amended
Options Disclosure Documents is somewhat awkward and cumbersome, with
the required timing of the provision of the amended ODD presented as
``an alternative'' to a requirement that the amended ODD be distributed
in the first place to every customer having an account approved for
trading the options classes(es) to which such ODD relates. The Exchange
proposes to delete this language, and to replace it with more
straightforward language requiring a copy of each amendment to an ODD
to be furnished to each customer who was previously furnished the ODD
to which the amendment pertains, not later than the time a confirmation
of a transaction in the category of options to which the amendment
pertains is delivered to such customer. This language is based upon
comparable language in Chapter 11, Section 15(a)(ii), of the Nasdaq
Options Market rules, Nasdaq ISE Rule 616(a)(2), and Chicago Board
Options Exchange (``CBOE'') Rule 9.15(a). The Exchange is also making a
minor edit to the introductory sentence, substituting the word
``transactions'' for the word ``trading'' in order to conform to the
terminology used by the foregoing exchanges.
Special Statement for Uncovered Options Writers
Rule 1024(c)(v) requires every member organization transacting
business with the public in uncovered option contracts develop,
implement and maintain specific written procedures governing the
conduct of such business, including requirements that customers
approved for writing uncovered short options transactions be provided
with a special written description of the risks inherent in writing
uncovered short option transactions, at or prior to the initial
uncovered short option transaction. This written disclosure document
must be furnished to customers in addition to the ODD required to be
provided to customers trading in options pursuant to Rule 1029(a).
Current Rule 1029(b) states that the written description of risks
required by Rule 1024(c)(v) shall be in a format prescribed by the
[[Page 31639]]
Exchange or in a format developed by the member organization, provided
it contains substantially similar information as the prescribed
Exchange format and has received prior written approval of the
Exchange.
The Exchange now proposes to add Rule 1029(c), which will set forth
a sample risk description captioned ``Special Statement for Uncovered
Options Writers'' (the ``Special Statement'') for use by member
organizations to satisfy the requirements of Rule 1029(b). The Special
Statement alerts customers to the special risks associated with
uncovered options writing which may expose investors to potentially
significant loss, and states that this type of strategy may therefore
not be suitable for all customers approved for options transactions.
The Special Statement describes potential losses of uncovered call and
put option writing, the possibility of significant margin calls,
strategies where the potential risk is unlimited, consequences of
unavailability of a secondary market in options, and the risk born by
the writer of an American-style option subject to assignment of an
exercise at any time after he has written the option until the option
expires. The proposed rules are intended to increase customer awareness
of the risks entailed in selling uncovered short option contracts.\3\
This language is almost identical to language contained in Chapter 11,
Section 15 (c) of the NOM rules, CBOE Rule 9.15(b), and ISE Rule
616(d).
---------------------------------------------------------------------------
\3\ The Special Statement was originally based upon a prototype
developed by the Options Self-Regulatory Council consisting of
representatives of the American Stock Exchange, Chicago Board
Options Exchange, Midwest Stock Exchange, National Association of
Securities Dealers, New York Exchange, Philadelphia Stock Exchange
and Pacific Stock Exchange. See Securities Exchange Act Release No.
26952 (June 21, 1989), 54 FR 27256 (June 28, 1989). The language of
the Special Statement was included as an exhibit to SR-Phlx-89-24
which was approved in the foregoing approval order, but was not
submitted as part of the rule text in that filing. The Exchange is
now adding the Special Statement language into the actual rule text.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\4\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\5\ in particular, in that it is designed to promote
just and equitable principles of trade, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general to protect investors and the public interest.
The amendment of the portion of the rule requiring the delivery to
customers of any amended ODD should protect investors by making this
regulatory obligation more clear to members and member organizations,
thus ensuring that amendments will be delivered to each customer who
was previously furnished the ODD to which the amendment pertains. The
proposed rule setting forth the Special Statement is intended to
protect investors by facilitating increased customer awareness of the
particular risks associated with selling uncovered short option
contracts. The distribution to customers of this short succinct written
statement that describes the risks associated with uncovered options
writing will help ensure investor protection because it will increase
customer awareness of the potential for significant losses in writing
uncovered short options contracts. Since disclosure is an important
component of investor protection under the federal securities laws,
providing investors with this special uncovered short options risk
statement may help ameliorate problems associated with uncovered short
options transactions (e.g., significant margin calls), especially
during volatile markets.
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\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The language which is proposed
to be added to Rule 1029 has previously been considered and approved by
the Commission for use in other exchanges' rulebooks as discussed
above.\6\
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\6\ See footnote 3 above.
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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 \7\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\8\
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\7\ 15 U.S.C. 78s(b)(3)(A)(iii).
\8\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) otherwise in furtherance of the
purposes of the Act. 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-2017-49 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-2017-49. 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
[[Page 31640]]
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-2017-49 and should be submitted on or before July
28, 2017.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2017-14247 Filed 7-6-17; 8:45 am]
BILLING CODE 8011-01-P
