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]

Download as PDF 31638 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 determined. Estimated Average Burden per Response: To be determined. Estimated Total Annual Burden: To be determined. Total Annualized Capital/Startup Costs: n/a. Total Annual Costs: To be determined. 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 4000, Washington, DC 20024. Dr. Toro can be reached by Telephone: 202–653– 4662, Fax: 202–653–4608, or by email at storo@imls.gov, or by teletype (TTY/ TDD) for persons with hearing difficulty at 202/653–4614. Office hours are from 8:00 a.m. to 4:30 p.m., E.T., Monday through Friday, except Federal holidays. Dated: July 3, 2017. Kim Miller, 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 http://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 (http://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 (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 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 07JYN1 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 http:// 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 07JYN1

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 http://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.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f(b).
    \5\ 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. 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\
---------------------------------------------------------------------------

    \6\ See footnote 3 above.
---------------------------------------------------------------------------

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\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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 (http://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 (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

[[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\
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Brent J. Fields,
Secretary.
[FR Doc. 2017-14247 Filed 7-6-17; 8:45 am]
 BILLING CODE 8011-01-P