Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Further Clarify When Nasdaq PSX Will Utilize the Secondary Source of Data Pursuant to Rule 3304, 39148-39150 [2017-17367]
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39148
Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2017–17366 Filed 8–16–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Self-Regulatory Organizations;
NASDAQ PHLX LLC; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change To Further
Clarify When Nasdaq PSX Will Utilize
the Secondary Source of Data
Pursuant to Rule 3304
August 11, 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 August 2,
2017, NASDAQ PHLX LLC (‘‘Phlx’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
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 a proposed
rule change to further clarify when
Nasdaq PSX (‘‘PSX’’) will utilize the
Secondary Source of data pursuant to
Rule 3304.
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.
sradovich on DSK3GMQ082PROD with NOTICES
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
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
[Release No. 34–81382; File No. SR–Phlx–
2017–65]
16 17
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
The purpose of the proposed rule
change is to clarify when PSX will
utilize the Secondary Source of data
pursuant to Rule 3304. Rule 3304 lists
the proprietary and network processor
feeds that are utilized for the handling,
routing, and execution of orders, as well
as for the regulatory compliance
processes related to those functions.
Rule 3304 also lists Secondary Sources
of data that are utilized in emergency
market conditions, and only until those
emergency conditions are resolved. The
Exchange proposes to amend this rule to
describe how the PSX trading system
decides when to use the Primary or
Secondary Source of data. Specifically,
the Exchange proposes to amend Rule
3304 to clarify that the Primary Source
of data is used unless it is delayed by
a configurable amount compared to the
Secondary Source of data.3 The
Exchange will revert to the Primary
Source of data once the delay has been
resolved. The configurable amount
described in this rule will be made
available to members via Equity Trader
Alert.
The Exchange believes that this
clarification is necessary in light of the
re-launch of NYSE MKT as NYSE
American, which is scheduled for July
24, 2017.4 NYSE American rules
provide for an intentional 350
microsecond access delay to certain
inbound and outbound order messages
on that exchange, including all
outbound communications to
proprietary market data feeds. NYSE
American will not apply a similar delay
to outbound communications to the
securities information processor (‘‘SIP’’).
Due to the intentional delay of
proprietary market data to be
disseminated by NYSE American, the
Exchange believes that fail over to the
Secondary Source of Data may
3 As a conforming change, the Exchange proposes
to remove the current rule text that indicates that
the Secondary Source of data is, where applicable,
utilized only in emergency market conditions and
only until those emergency conditions are resolved.
The Exchange does not believe that this language
is needed as the amended rule would now indicate
with more specificity when the Exchange fails over
to the Secondary Source of data.
4 See Securities Exchange Act Release No 80700
(May 16, 2017), 82 FR 23381 (May 22, 2017) (SR–
NYSEMKT–2017–05) (Approval Order).
PO 00000
Frm 00046
Fmt 4703
Sfmt 4703
sometimes be necessary even during
otherwise normal operation to ensure
that the fastest and most reliable data is
used for the handling, routing, and
execution of orders, and for regulatory
compliance purposes.
Currently, the PSX trading system
utilizes proprietary market data as the
Primary Source for the following
markets that provide a reliable
proprietary data feed: NYSE MKT,
NASDAQ OMX BX, DirectEdge A,
DirectEdge X, CHX, NYSE, NYSE Arca,
NASDAQ, NASDAQ OMX PSX, BATS
Y-Exchange, and BATS Exchange. For
each of these markets, the Exchange
uses SIP data as the Secondary Source.5
The trading system then uses certain
real-time logic to determine whether
emergency market conditions exist that
should result in the failover to the
Secondary Source of data from the
Primary Source. Specifically, the trading
system fails over to the Secondary
Source of data for these markets if the
Primary Source of data is delayed by a
configurable amount compared to the
Secondary Source.6 A significant delay
of the Primary Source of data compared
to the Secondary Source of data
indicates that there is an emergency
market condition pursuant to Rule 4759
[sic]. In such an instance, the Exchange
believes that it is appropriate to fail over
to the Secondary Source of data as the
Secondary Source of data is more
current. If the Exchange fails over to the
Secondary Source of data it will re-elect
the Primary Source of data if the
Primary Source of data is no longer
delayed compared to the Secondary
Source. This process ensures that the
PSX’s trading and other systems have
the most accurate view of the trading
interest available across other markets.
With the upcoming launch of NYSE
American, the Exchange believes that its
current rule should be amended to
better reflect intentional delays to the
Primary Source of data. Specifically, the
Exchange desires to make clear that
even otherwise normal operation of the
Primary Source of data may result in the
Exchange electing the Secondary Source
of data if that operation includes an
intentional delay. This would be the
5 SIP data is used as the Primary Source for NSX,
FINRA ADF, and IEX. There is no Secondary
Source for these markets.
6 A delay is indicated by data being received by
the Exchange from the Secondary Source that has
a more recent timestamp than the Primary Source.
Fail over then occurs once such a delay has reached
a configurable value. The configurable amount
described in this rule will be made available to
members via Equity Trader Alert. Currently, this
configurable value is set to 1.5 seconds. The
Exchange will issue an Equity Trader Alert to
members to notify them of the current value and in
the event that it changes this value.
E:\FR\FM\17AUN1.SGM
17AUN1
sradovich on DSK3GMQ082PROD with NOTICES
Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Notices
case even if such operation would not
normally be deemed an emergency
market condition. Although the
Exchange’s process for determining
which data to use will not change at this
time,7 the Exchange believes that it is
important to clarify that process so that
members and other market participants
are adequately apprised of when the
Exchange will use the Primary or
Secondary Source of data.
As explained earlier in this proposed
rule change, the Exchange employs an
automated, real-time, process to
determine if there is an emergency
market condition pursuant to Rule 4759
[sic]. In particular, the Exchange
determines whether there is an
emergency market condition by
comparing the timestamp of the Primary
Source of data with the timestamp of the
Secondary Source of data. The Exchange
believes that a significant delay in the
Primary Source of data compared to the
Secondary Source is an emergency
market condition because such a delay
is not consistent with normal operation
of such data feeds. The Exchange does
not believe that the current emergency
market conditions language is clear,
however, when dealing with markets
such as NYSE American that have
employed an intentional delay in the
data disseminated over the direct data
feeds utilized by the Exchange as the
Primary Source of data. Currently, the
Primary Source of data is used unless it
is delayed by a configurable amount
compared to the Secondary Source of
data. The Exchange then reverts to the
Primary Source of data once the delay
has been resolved. The Primary Source
of data may be delayed due to technical
issues that would normally be
considered an emergency market
condition, or during otherwise normal
operation of the Primary Source of data
if an intentional delay has been
implemented. In this respect, the
Exchange notes that even NYSE Arca—
an affiliate of NYSE American—has
decided to use SIP data as the primary
source of data for NYSE American due
to the intentional delay of messages on
their proprietary market data.8 Although
the Exchange is not proposing to change
its Primary Source of data for NYSE
American, the Exchange believes that
modifying its rules to clarify the
conditions where the Secondary Source
of data may be elected will increase
7 The Exchange may decrease the amount of delay
required to switch to the Secondary Source of data
at a later date. The Exchange will alert members of
any such change with an Equity Trader Alert. See
id.
8 See Securities Exchange Act Release No. 34–
81061 (June 30, 2017), 82 FR 31642 (July 7, 2017)
(SR–Arca–2017–70).
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19:44 Aug 16, 2017
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transparency of the operation of the
Exchange to the benefit of members and
other market participants.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,9 in general, and furthers the
objectives of Section 6(b)(5) of the Act,10
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 Exchange believes that the
proposed rule change removes
impediments to and perfects the
mechanism of a free and open market
and protects investors and the public
interest because it provides additional
transparency around when PSX will
elect to use the Secondary Source of
data for the handling, routing, and
execution of orders, and for regulatory
compliance purposes. The proposed
rule change does not change the
operation of the Exchange or its use of
data feeds; rather it clarifies when the
Exchange will elect the Secondary
Source of data pursuant to Rule 3304.
Currently, Rule 4759 [sic] indicates that
the Exchange will fail over to the
Secondary Source of data if there is an
emergency market condition but does
not specify what counts as an
emergency market condition pursuant to
the rule. In fact, the Exchange has an
automated, real-time, process for
determining whether an emergency
market condition exists by measuring
the amount of delay between the
Primary and Secondary Sources of data.
The proposed rule change therefore
clarifies that the Exchange will elect the
Secondary Source of data if the Primary
Source of data is delayed by a
configurable amount (made available to
members via Equity Trader Alert), and
will then revert to the Primary Source
of data once the delay has been
resolved. The Secondary Source of data
may be elected even during otherwise
normal operation because of intentional
delays in the dissemination of market
data over an exchange’s proprietary
market data feeds. The Exchange
believes that this change is appropriate
in light of the launch of the NYSE
American exchange, which will come
with an intentional delay of market data
provided through proprietary data
products used by PSX as the Primary
Source of data. The Exchange believes
the additional transparency of the
9 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
10 15
PO 00000
Frm 00047
Fmt 4703
Sfmt 4703
39149
operation of the Exchange as described
in the proposed rule change will remove
impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, protect investors and the public
interest.
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 that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed rule change is not designed to
address any competitive issue but rather
would provide members and other
market participants with information
about when PSX will utilize its
Secondary Source of data. The Exchange
believes that this change will increase
transparency around the operation of
the Exchange without any significant
impact on competition.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A)(iii) of the Act 11 and
subparagraph (f)(6) of Rule 19b–4
thereunder.12
A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
Act 13 normally does not become
operative for 30 days after the date of its
filing. However, Rule 19b–4(f)(6)(iii) 14
permits the Commission to designate a
shorter time if such action is consistent
with the protection of investors and the
public interest. The Exchange has asked
the Commission to waive the 30-day
11 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, along with a brief
description and the text of the proposed rule
change, at least five business days prior to the date
of filing of the proposed rule change, or such
shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
13 17 CFR 240.19b–4(f)(6).
14 17 CFR 240.19b–4(f)(6)(iii).
12 17
E:\FR\FM\17AUN1.SGM
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39150
Federal Register / Vol. 82, No. 158 / Thursday, August 17, 2017 / Notices
operative delay. The Commission
believes that waiving the 30-day
operative delay is consistent with the
protection of investors and the public
interest as it will allow the Exchange to
clarify the conditions under which the
Secondary Source of data may be
elected and increase transparency of the
operation of the Exchange. Accordingly,
the Commission hereby waives the
operative delay and designates the
proposal operative upon filing.15
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:
sradovich on DSK3GMQ082PROD with NOTICES
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
Phlx–2017–65 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–2017–65. 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
15 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
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19:44 Aug 16, 2017
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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–
2017–65 and should be submitted on or
before September 7, 2017.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Robert W. Errett,
Deputy Secretary.
409 3rd Street SW., Suite 6050,
Washington, DC 20416, (202) 205–6734.
SUPPLEMENTARY INFORMATION: Notice is
hereby given that as a result of the
President’s major disaster declaration on
08/09/2017, Private Non-Profit
organizations that provide essential
services of a governmental nature may
file disaster loan applications at the
address listed above or other locally
announced locations.
The following areas have been
determined to be adversely affected by
the disaster:
Primary Counties: Grafton.
The Interest Rates are:
Percent
For Physical Damage:
Non-Profit Organizations With
Credit Available Elsewhere ...
Non-Profit Organizations Without Credit Available Elsewhere .....................................
For Economic Injury:
Non-Profit Organizations Without Credit Available Elsewhere .....................................
2.500
2.500
2.500
[FR Doc. 2017–17367 Filed 8–16–17; 8:45 am]
The number assigned to this disaster
for physical damage is 15245B and for
economic injury is 152460.
BILLING CODE 8011–01–P
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration #15245 and #15246;
NEW HAMPSHIRE Disaster Number NH–
00038]
Presidential Declaration of a Major
Disaster for Public Assistance Only for
the State of New Hampshire
U.S. Small Business
Administration.
ACTION: Notice.
(Catalog of Federal Domestic Assistance
Number 59008)
Rafaela Monchek,
Acting Associate Administrator, Disaster
Assistance.
[FR Doc. 2017–17389 Filed 8–16–17; 8:45 am]
BILLING CODE 8025–01–P
AGENCY:
DEPARTMENT OF STATE
[Public Notice: 10084]
This is a Notice of the
Presidential declaration of a major
disaster for Public Assistance Only for
the State of New Hampshire (FEMA–
4329–DR), dated 08/09/2017.
Incident: Severe Storms and Flooding.
Incident Period: 07/01/2017 through
07/02/2017.
DATES: Issued on 08/09/2017.
Physical Loan Application Deadline
Date: 10/09/2017.
Economic Injury (EIDL) Loan
Application Deadline Date: 05/09/2018.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing And
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
SUMMARY:
16 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00048
Fmt 4703
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In the Matter of the Designation of
Hizbul Mujahideen Also Known as
Hizb-ul-Mujahideen Also Known as HM
as a Foreign Terrorist Organization
Pursuant to Section 219 of the
Immigration and Nationality Act, as
Amended
Based upon a review of the
Administrative Record assembled in
this matter, and in consultation with the
Attorney General and the Secretary of
the Treasury, I conclude that there is a
sufficient factual basis to find that the
relevant circumstances described in
section 219 of the Immigration and
Nationality Act, as amended (hereinafter
‘‘INA’’) (8 U.S.C. 1189), exist with
respect to Hizbul Mujahideen, also
known as Hizb-ul-Mujahideen, also
known as HM.
Therefore, I hereby designate the
aforementioned organization and its
E:\FR\FM\17AUN1.SGM
17AUN1
]]>Agencies
[Federal Register Volume 82, Number 158 (Thursday, August 17, 2017)]
[Notices]
[Pages 39148-39150]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-17367]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-81382; File No. SR-Phlx-2017-65]
Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Further Clarify
When Nasdaq PSX Will Utilize the Secondary Source of Data Pursuant to
Rule 3304
August 11, 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 August 2, 2017, NASDAQ PHLX LLC (``Phlx'' or ``Exchange'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II 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 a proposed rule change to further clarify
when Nasdaq PSX (``PSX'') will utilize the Secondary Source of data
pursuant to Rule 3304.
The text of the proposed rule change is available on the Exchange's
Web site at https://nasdaqphlx.cchwallstreet.com/ com/, at the principal
office of the Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the proposed rule change is to clarify when PSX will
utilize the Secondary Source of data pursuant to Rule 3304. Rule 3304
lists the proprietary and network processor feeds that are utilized for
the handling, routing, and execution of orders, as well as for the
regulatory compliance processes related to those functions. Rule 3304
also lists Secondary Sources of data that are utilized in emergency
market conditions, and only until those emergency conditions are
resolved. The Exchange proposes to amend this rule to describe how the
PSX trading system decides when to use the Primary or Secondary Source
of data. Specifically, the Exchange proposes to amend Rule 3304 to
clarify that the Primary Source of data is used unless it is delayed by
a configurable amount compared to the Secondary Source of data.\3\ The
Exchange will revert to the Primary Source of data once the delay has
been resolved. The configurable amount described in this rule will be
made available to members via Equity Trader Alert.
---------------------------------------------------------------------------
\3\ As a conforming change, the Exchange proposes to remove the
current rule text that indicates that the Secondary Source of data
is, where applicable, utilized only in emergency market conditions
and only until those emergency conditions are resolved. The Exchange
does not believe that this language is needed as the amended rule
would now indicate with more specificity when the Exchange fails
over to the Secondary Source of data.
---------------------------------------------------------------------------
The Exchange believes that this clarification is necessary in light
of the re-launch of NYSE MKT as NYSE American, which is scheduled for
July 24, 2017.\4\ NYSE American rules provide for an intentional 350
microsecond access delay to certain inbound and outbound order messages
on that exchange, including all outbound communications to proprietary
market data feeds. NYSE American will not apply a similar delay to
outbound communications to the securities information processor
(``SIP''). Due to the intentional delay of proprietary market data to
be disseminated by NYSE American, the Exchange believes that fail over
to the Secondary Source of Data may sometimes be necessary even during
otherwise normal operation to ensure that the fastest and most reliable
data is used for the handling, routing, and execution of orders, and
for regulatory compliance purposes.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No 80700 (May 16, 2017),
82 FR 23381 (May 22, 2017) (SR-NYSEMKT-2017-05) (Approval Order).
---------------------------------------------------------------------------
Currently, the PSX trading system utilizes proprietary market data
as the Primary Source for the following markets that provide a reliable
proprietary data feed: NYSE MKT, NASDAQ OMX BX, DirectEdge A,
DirectEdge X, CHX, NYSE, NYSE Arca, NASDAQ, NASDAQ OMX PSX, BATS Y-
Exchange, and BATS Exchange. For each of these markets, the Exchange
uses SIP data as the Secondary Source.\5\ The trading system then uses
certain real-time logic to determine whether emergency market
conditions exist that should result in the failover to the Secondary
Source of data from the Primary Source. Specifically, the trading
system fails over to the Secondary Source of data for these markets if
the Primary Source of data is delayed by a configurable amount compared
to the Secondary Source.\6\ A significant delay of the Primary Source
of data compared to the Secondary Source of data indicates that there
is an emergency market condition pursuant to Rule 4759 [sic]. In such
an instance, the Exchange believes that it is appropriate to fail over
to the Secondary Source of data as the Secondary Source of data is more
current. If the Exchange fails over to the Secondary Source of data it
will re-elect the Primary Source of data if the Primary Source of data
is no longer delayed compared to the Secondary Source. This process
ensures that the PSX's trading and other systems have the most accurate
view of the trading interest available across other markets.
---------------------------------------------------------------------------
\5\ SIP data is used as the Primary Source for NSX, FINRA ADF,
and IEX. There is no Secondary Source for these markets.
\6\ A delay is indicated by data being received by the Exchange
from the Secondary Source that has a more recent timestamp than the
Primary Source. Fail over then occurs once such a delay has reached
a configurable value. The configurable amount described in this rule
will be made available to members via Equity Trader Alert.
Currently, this configurable value is set to 1.5 seconds. The
Exchange will issue an Equity Trader Alert to members to notify them
of the current value and in the event that it changes this value.
---------------------------------------------------------------------------
With the upcoming launch of NYSE American, the Exchange believes
that its current rule should be amended to better reflect intentional
delays to the Primary Source of data. Specifically, the Exchange
desires to make clear that even otherwise normal operation of the
Primary Source of data may result in the Exchange electing the
Secondary Source of data if that operation includes an intentional
delay. This would be the
[[Page 39149]]
case even if such operation would not normally be deemed an emergency
market condition. Although the Exchange's process for determining which
data to use will not change at this time,\7\ the Exchange believes that
it is important to clarify that process so that members and other
market participants are adequately apprised of when the Exchange will
use the Primary or Secondary Source of data.
---------------------------------------------------------------------------
\7\ The Exchange may decrease the amount of delay required to
switch to the Secondary Source of data at a later date. The Exchange
will alert members of any such change with an Equity Trader Alert.
See id.
---------------------------------------------------------------------------
As explained earlier in this proposed rule change, the Exchange
employs an automated, real-time, process to determine if there is an
emergency market condition pursuant to Rule 4759 [sic]. In particular,
the Exchange determines whether there is an emergency market condition
by comparing the timestamp of the Primary Source of data with the
timestamp of the Secondary Source of data. The Exchange believes that a
significant delay in the Primary Source of data compared to the
Secondary Source is an emergency market condition because such a delay
is not consistent with normal operation of such data feeds. The
Exchange does not believe that the current emergency market conditions
language is clear, however, when dealing with markets such as NYSE
American that have employed an intentional delay in the data
disseminated over the direct data feeds utilized by the Exchange as the
Primary Source of data. Currently, the Primary Source of data is used
unless it is delayed by a configurable amount compared to the Secondary
Source of data. The Exchange then reverts to the Primary Source of data
once the delay has been resolved. The Primary Source of data may be
delayed due to technical issues that would normally be considered an
emergency market condition, or during otherwise normal operation of the
Primary Source of data if an intentional delay has been implemented. In
this respect, the Exchange notes that even NYSE Arca--an affiliate of
NYSE American--has decided to use SIP data as the primary source of
data for NYSE American due to the intentional delay of messages on
their proprietary market data.\8\ Although the Exchange is not
proposing to change its Primary Source of data for NYSE American, the
Exchange believes that modifying its rules to clarify the conditions
where the Secondary Source of data may be elected will increase
transparency of the operation of the Exchange to the benefit of members
and other market participants.
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\8\ See Securities Exchange Act Release No. 34-81061 (June 30,
2017), 82 FR 31642 (July 7, 2017) (SR-Arca-2017-70).
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\9\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\10\ 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.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed rule change removes
impediments to and perfects the mechanism of a free and open market and
protects investors and the public interest because it provides
additional transparency around when PSX will elect to use the Secondary
Source of data for the handling, routing, and execution of orders, and
for regulatory compliance purposes. The proposed rule change does not
change the operation of the Exchange or its use of data feeds; rather
it clarifies when the Exchange will elect the Secondary Source of data
pursuant to Rule 3304. Currently, Rule 4759 [sic] indicates that the
Exchange will fail over to the Secondary Source of data if there is an
emergency market condition but does not specify what counts as an
emergency market condition pursuant to the rule. In fact, the Exchange
has an automated, real-time, process for determining whether an
emergency market condition exists by measuring the amount of delay
between the Primary and Secondary Sources of data. The proposed rule
change therefore clarifies that the Exchange will elect the Secondary
Source of data if the Primary Source of data is delayed by a
configurable amount (made available to members via Equity Trader
Alert), and will then revert to the Primary Source of data once the
delay has been resolved. The Secondary Source of data may be elected
even during otherwise normal operation because of intentional delays in
the dissemination of market data over an exchange's proprietary market
data feeds. The Exchange believes that this change is appropriate in
light of the launch of the NYSE American exchange, which will come with
an intentional delay of market data provided through proprietary data
products used by PSX as the Primary Source of data. The Exchange
believes the additional transparency of the operation of the Exchange
as described in the proposed rule change will remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, protect investors and the public interest.
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 that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed rule change is
not designed to address any competitive issue but rather would provide
members and other market participants with information about when PSX
will utilize its Secondary Source of data. The Exchange believes that
this change will increase transparency around the operation of the
Exchange without any significant impact on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \11\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\12\
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\11\ 15 U.S.C. 78s(b)(3)(A)(iii).
\12\ 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, along
with a brief description and the text of the proposed rule change,
at least five business days prior to the date of filing of the
proposed rule change, or such shorter time as designated by the
Commission. The Exchange has satisfied this requirement.
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A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \13\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \14\ permits the
Commission to designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has asked the Commission to waive the 30-day
[[Page 39150]]
operative delay. The Commission believes that waiving the 30-day
operative delay is consistent with the protection of investors and the
public interest as it will allow the Exchange to clarify the conditions
under which the Secondary Source of data may be elected and increase
transparency of the operation of the Exchange. Accordingly, the
Commission hereby waives the operative delay and designates the
proposal operative upon filing.\15\
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\13\ 17 CFR 240.19b-4(f)(6).
\14\ 17 CFR 240.19b-4(f)(6)(iii).
\15\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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-2017-65 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-2017-65. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of 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-2017-65 and should be
submitted on or before September 7, 2017.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2017-17367 Filed 8-16-17; 8:45 am]
BILLING CODE 8011-01-P
