Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Penny Pilot Program, 61351-61353 [2017-27831]
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Federal Register / Vol. 82, No. 247 / Wednesday, December 27, 2017 / Notices
or in connection with a Co-Investment
Transaction other than (i) in the case of
the Regulated Funds, the Affiliated
Funds and the Capital Markets
Affiliates, the pro rata transaction fees
described above and fees or other
compensation described in Condition
2(c)(iii)(B)(z), (ii) brokerage or
underwriting compensation permitted
by Section 17(e) or 57(k) or (iii) in the
case of the Advisers, investment
advisory compensation paid in
accordance with investment advisory
agreements between the applicable
Regulated Fund(s) or Affiliated Fund(s)
and its Adviser.
15. Independence. If the Holders own
in the aggregate more than 25 percent of
the Shares of a Regulated Fund, then the
Holders will vote such Shares as
directed by an independent third party
when voting on (1) the election of
directors; (2) the removal of one or more
directors; or (3) any other matter under
either the Act or applicable State law
affecting the Board’s composition, size
or manner of election.
16. Capital Markets Affiliates. The
Capital Markets Affiliates will not be
permitted to invest in a Potential CoInvestment Transaction except to the
extent the aggregate Internal Orders for
a Potential Co-Investment Transaction,
as described in Section III.A.1.b. of the
application, are less than the total
investment opportunity.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–27825 Filed 12–26–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82370; File No. SR–Phlx–
2017–104]
Self-Regulatory Organizations; Nasdaq
PHLX LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Extend the Penny
Pilot Program
daltland on DSKBBV9HB2PROD with NOTICES
December 20, 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 December
12, 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 and II,
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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21:43 Dec 26, 2017
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
Phlx Rule 1034 (Minimum Increments)3
to extend through June 30, 2018 or the
date of permanent approval, if earlier,
the Penny Pilot Program in options
classes in certain issues (‘‘Penny Pilot’’
or ‘‘Pilot’’), and to change the date when
delisted classes may be replaced in the
Penny Pilot.
The text of the proposed rule change
is set forth below. Proposed new
language is underlined; deleted text is
in brackets.
*
*
*
*
*
Nasdaq PHLX Rules
Options Rules
*
*
*
*
*
Rule 1034. Minimum Increments
(a) Except as provided in subparagraphs (i)(B) and (iii) below, all
options on stocks, index options, and
Exchange Traded Fund Shares quoting
in decimals at $3.00 or higher shall have
a minimum increment of $.10, and all
options on stocks and index options
quoting in decimals under $3.00 shall
have a minimum increment of $.05.
(i)(A) No Change.
(B) For a pilot period scheduled to
expire June 30, 2018[December 31,
2017] or the date of permanent
approval, if earlier (the ‘‘pilot’’), certain
options shall be quoted and traded on
the Exchange in minimum increments
of $0.01 for all series in such options
with a price of less than $3.00, and in
minimum increments of $0.05 for all
series in such options with a price of
$3.00 or higher, except that options
overlying the PowerShares QQQ Trust
(‘‘QQQQ’’)®, SPDR S&P 500 Exchange
Traded Funds (‘‘SPY’’), and iShares
Russell 2000 Index Funds (‘‘IWM’’)
shall be quoted and traded in minimum
increments of $0.01 for all series
regardless of the price. A list of such
options shall be communicated to
membership via an Options Trader Alert
(‘‘OTA’’) posted on the Exchange’s
website.
The Exchange may replace any pilot
issues that have been delisted with the
next most actively traded multiply
listed options classes that are not yet
included in the pilot, based on trading
activity in the previous six months. The
3 References herein to rules refer to rules of Phlx,
unless otherwise noted.
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61351
replacement issues may be added to the
pilot on the second trading day
following January 1, 2018[July 1, 2017].
(C) No Change.
(ii)–(v) No Change.
*
*
*
*
*
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of this filing is to amend
Phlx Rule 1034 to extend the Penny
Pilot through June 30, 2018 or the date
of permanent approval, if earlier,4 and
to change the date when delisted classes
may be replaced in the Penny Pilot. The
Exchange believes that extending the
Penny Pilot will allow for further
analysis of the Penny Pilot and a
determination of how the program
should be structured in the future.
Under the Penny Pilot, the minimum
price variation for all participating
options classes, except for the Nasdaq100 Index Tracking Stock (‘‘QQQQ’’),
the SPDR S&P 500 Exchange Traded
Fund (‘‘SPY’’) and the iShares Russell
2000 Index Fund (‘‘IWM’’), is $0.01 for
all quotations in options series that are
quoted at less than $3 per contract and
$0.05 for all quotations in options series
that are quoted at $3 per contract or
greater. QQQQ, SPY and IWM are
quoted in $0.01 increments for all
options series. The Penny Pilot is
currently scheduled to expire on
December 31, 2017.5
The Exchange proposes to extend the
time period of the Penny Pilot through
June 30, 2018 or the date of permanent
approval, if earlier, and to provide a
revised date for adding replacement
4 The options exchanges in the U.S. that have
pilot programs similar to the Penny Pilot (together
‘‘pilot programs’’) are currently working on a
proposal for permanent approval of the respective
pilot programs.
5 See Securities Exchange Act Release No. 80755
(May 24, 2017), 82 FR 25025 (May 31, 2017) (SR–
Phlx–2017–36).
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Federal Register / Vol. 82, No. 247 / Wednesday, December 27, 2017 / Notices
issues to the Penny Pilot. The Exchange
proposes that any Penny Pilot Program
issues that have been delisted may be
replaced on the second trading day
following January 1, 2018. The
replacement issues will be selected
based on trading activity in the previous
six months.6
This filing does not propose any
substantive changes to the Penny Pilot
Program; all classes currently
participating in the Penny Pilot will
remain the same and all minimum
increments will remain unchanged. The
Exchange believes the benefits to public
customers and other market participants
who will be able to express their true
prices to buy and sell options have been
demonstrated to outweigh the potential
increase in quote traffic.
2. Statutory Basis
daltland on DSKBBV9HB2PROD with NOTICES
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,7 in general, and furthers the
objectives of Section 6(b)(5) of the Act,8
in particular, in that it is designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, to foster
cooperation and coordination with
persons engaged in facilitating
transactions in securities, and 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.
In particular, the proposed rule
change, which extends the Penny Pilot
for an additional six months through
June 30, 2018 or the date of permanent
approval, if earlier, and changes the date
for replacing Penny Pilot issues that
were delisted to the second trading day
following January 1, 2018, will enable
public customers and other market
participants to express their true prices
to buy and sell options for the benefit
of all market participants. This is
consistent with the Act.
6 The replacement issues will be announced to
the Exchange’s membership via an Options Trader
Alert (OTA) posted on the Exchange’s website.
Penny Pilot replacement issues will be selected
based on trading activity in the previous six
months, as is the case today. The replacement
issues would be identified based on The Options
Clearing Corporation’s trading volume data. For
example, for the January replacement, trading
volume from May 30, 2017 through November 30,
2017 would be analyzed. The month immediately
preceding the replacement issues’ addition to the
Pilot Program (i.e., December) would not be used for
purposes of the six-month analysis.
7 15 U.S.C. 78f(b).
8 15 U.S.C. 78f(b)(5).
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21:43 Dec 26, 2017
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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. To the
contrary, this proposal is procompetitive because it allows Penny
Pilot issues to continue trading on the
Exchange.
Moreover, the Exchange believes that
the proposed rule change will allow for
further analysis of the Pilot and a
determination of how the Pilot should
be structured in the future; and will
serve to promote regulatory clarity and
consistency, thereby reducing burdens
on the marketplace and facilitating
investor protection.
The Pilot is an industry-wide
initiative supported by all other option
exchanges. The Exchange believes that
extending the Pilot will allow for
continued competition between market
participants on the Exchange trading
similar products as their counterparts
on other exchanges, while at the same
time allowing the Exchange to continue
to compete for order flow with other
exchanges in option issues trading as
part of the Pilot.
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
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 9 and Rule
19b–4(f)(6) thereunder.10 Because the
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
prior to 30 days from the date on which
it was filed, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act and Rule 19b–4(f)(6)(iii)
thereunder.
A proposed rule change filed under
Rule 19b–4(f)(6) 11 normally does not
become operative prior to 30 days after
9 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
11 17 CFR 240.19b–4(f)(6).
10 17
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the date of the filing.12 However,
pursuant to Rule 19b–4(f)(6)(iii),13 the
Commission may 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
operative delay so that the proposal may
become operative immediately upon
filing. The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest
because doing so will allow the Pilot
Program to continue without
interruption in a manner that is
consistent with the Commission’s prior
approval of the extension and expansion
of the Pilot Program and will allow the
Exchange and the Commission
additional time to analyze the impact of
the Pilot Program. Accordingly, the
Commission designates the proposed
rule change as operative upon filing
with the Commission.14
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 15 of the Act to
determine whether the proposed rule
change 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
12 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires the Exchange to give the
Commission written notice of the Exchange’s 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 pre-filing requirement.
13 17 CFR 240.19b–4(f)(6)(iii).
14 For purposes only of waiving the operative
delay for this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
15 15 U.S.C. 78s(b)(2)(B).
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Federal Register / Vol. 82, No. 247 / Wednesday, December 27, 2017 / Notices
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
Phlx–2017–104 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–2017–104. 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 website (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 website 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.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly.
All submissions should refer to File
Number SR–Phlx–2017–104 and should
be submitted on or before January 17,
2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Eduardo A. Aleman,
Assistant Secretary.
daltland on DSKBBV9HB2PROD with NOTICES
BILLING CODE 8011–01–P
16 17
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
21:43 Dec 26, 2017
Jkt 244001
Notice of an application under
Section 6(c) of the Investment Company
Act of 1940 (‘‘Act’’) for an exemption
from Section 15(a) of the Act and Rule
18f–2 under the Act, as well as from
certain disclosure requirements in Rule
20a–1 under the Act, Item 19(a)(3) of
Form N–1A, Items 22(c)(1)(ii),
22(c)(1)(iii), 22(c)(8) and 22(c)(9) of
Schedule 14A under the Securities
Exchange Act of 1934, and Sections 6–
07(2)(a), (b), and (c) of Regulation S–X
(‘‘Disclosure Requirements’’). The
requested exemption would permit an
investment adviser to hire and replace
certain sub-advisers without
shareholder approval and grant relief
from the Disclosure Requirements as
they relate to fees paid to the subadvisers. The order would supersede a
prior order.1
APPLICANTS: The Hartford Mutual
Funds, Inc.; The Hartford Mutual Funds
II, Inc.; Hartford Series Fund, Inc.;
Hartford HLS Series Fund II, Inc.;
Hartford Funds Exchange-Traded Trust;
Hartford Funds NextShares Trust; and
Hartford Funds Master Trust
(collectively, the ‘‘Hartford
Companies’’), each either a Maryland
corporation or a Delaware statutory trust
registered under the Act as an open-end
management investment company with
multiple series, and each of HIMCO
Variable Insurance Trust (‘‘HVI Trust’’)
and Lattice Strategies Trust (‘‘LS
Trust’’), each a Delaware statutory trust
and each also registered under the Act
as an open-end management investment
company with multiple series (together,
the ‘‘Trusts’’ and collectively with the
Hartford Companies, the ‘‘Companies’’);
Hartford Funds Management Company,
LLC (‘‘HFMC’’), a Delaware limited
liability company; Hartford Investment
Management Company (‘‘HIMCO’’), a
Delaware corporation; and Lattice
Strategies LLC (‘‘Lattice’’), a Delaware
limited liability company, each
registered as an investment adviser
under the Investment Advisers Act of
1940 (each, an ‘‘Adviser’’ and together
with the Companies, the ‘‘Applicants’’).
FILING DATES: The application was filed
October 13, 2015, and amended on
March 21, 2016, September 30, 2016,
February 10, 2017, and November 14,
2017.
HEARING OR NOTIFICATION OF HEARING: An
order granting the application will be
issued unless the Commission orders 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 January 15, 2018, 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: Walter F. Garger, Hartford
Funds Management Company, LLC and
Lattice Strategies LLC, 690 Lee Road,
Wayne, PA 19087; and Brenda J. Page,
Hartford Investment Management
Company, One Hartford Plaza, Hartford,
CT 06155.
FOR FURTHER INFORMATION CONTACT:
Stephan N. Packs, Senior Counsel, at
(202) 551–6853, or David J. Marcinkus,
Branch Chief, at (202) 551–6825
(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
website by searching for the file number
of an applicant using the Company
name box, at https://www.sec.gov/
search/search.htm or by calling (202)
551–8090.
1 In the Matter of Fortis Series Fund, Inc. and
Fortis Advisers, Inc., Investment Company Act
Release Nos. 24158 (November 23, 1999) (notice)
and 24211 (December 21, 1999) (order) (the ‘‘Prior
Order’’). If the requested order is granted, SubAdvised Series currently relying on the Prior Order
may continue to do so, other than with respect to
Wholly-Owned Subadvisers. Shareholder approval
shall be required before such Series can rely on the
relief requested with respect to Wholly-Owned
Subadvisers.
Paper Comments
[FR Doc. 2017–27831 Filed 12–26–17; 8:45 am]
61353
Summary of the Application
1. HFMC will serve as the investment
adviser to the Hartford Companies,
HIMCO will serve as the investment
adviser to the HVI Trust, and Lattice
will serve as the investment adviser to
the LS Trust, pursuant to an investment
advisory agreement with, respectively,
the Hartford Companies, the HVI Trust,
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
32944; 812–14564]
The Hartford Mutual Funds, Inc., et al.
December 20, 2017.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice.
AGENCY:
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]]>Agencies
[Federal Register Volume 82, Number 247 (Wednesday, December 27, 2017)]
[Notices]
[Pages 61351-61353]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-27831]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-82370; File No. SR-Phlx-2017-104]
Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Extend the Penny
Pilot Program
December 20, 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 December 12, 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 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.
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I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
The Exchange proposes to amend Phlx Rule 1034 (Minimum
Increments)\3\ to extend through June 30, 2018 or the date of permanent
approval, if earlier, the Penny Pilot Program in options classes in
certain issues (``Penny Pilot'' or ``Pilot''), and to change the date
when delisted classes may be replaced in the Penny Pilot.
---------------------------------------------------------------------------
\3\ References herein to rules refer to rules of Phlx, unless
otherwise noted.
---------------------------------------------------------------------------
The text of the proposed rule change is set forth below. Proposed
new language is underlined; deleted text is in brackets.
* * * * *
Nasdaq PHLX Rules
Options Rules
* * * * *
Rule 1034. Minimum Increments
(a) Except as provided in sub-paragraphs (i)(B) and (iii) below,
all options on stocks, index options, and Exchange Traded Fund Shares
quoting in decimals at $3.00 or higher shall have a minimum increment
of $.10, and all options on stocks and index options quoting in
decimals under $3.00 shall have a minimum increment of $.05.
(i)(A) No Change.
(B) For a pilot period scheduled to expire June 30, 2018[December
31, 2017] or the date of permanent approval, if earlier (the
``pilot''), certain options shall be quoted and traded on the Exchange
in minimum increments of $0.01 for all series in such options with a
price of less than $3.00, and in minimum increments of $0.05 for all
series in such options with a price of $3.00 or higher, except that
options overlying the PowerShares QQQ Trust (``QQQQ'')[supreg], SPDR
S&P 500 Exchange Traded Funds (``SPY''), and iShares Russell 2000 Index
Funds (``IWM'') shall be quoted and traded in minimum increments of
$0.01 for all series regardless of the price. A list of such options
shall be communicated to membership via an Options Trader Alert
(``OTA'') posted on the Exchange's website.
The Exchange may replace any pilot issues that have been delisted
with the next most actively traded multiply listed options classes that
are not yet included in the pilot, based on trading activity in the
previous six months. The replacement issues may be added to the pilot
on the second trading day following January 1, 2018[July 1, 2017].
(C) No Change.
(ii)-(v) No Change.
* * * * *
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of this filing is to amend Phlx Rule 1034 to extend the
Penny Pilot through June 30, 2018 or the date of permanent approval, if
earlier,\4\ and to change the date when delisted classes may be
replaced in the Penny Pilot. The Exchange believes that extending the
Penny Pilot will allow for further analysis of the Penny Pilot and a
determination of how the program should be structured in the future.
---------------------------------------------------------------------------
\4\ The options exchanges in the U.S. that have pilot programs
similar to the Penny Pilot (together ``pilot programs'') are
currently working on a proposal for permanent approval of the
respective pilot programs.
---------------------------------------------------------------------------
Under the Penny Pilot, the minimum price variation for all
participating options classes, except for the Nasdaq-100 Index Tracking
Stock (``QQQQ''), the SPDR S&P 500 Exchange Traded Fund (``SPY'') and
the iShares Russell 2000 Index Fund (``IWM''), is $0.01 for all
quotations in options series that are quoted at less than $3 per
contract and $0.05 for all quotations in options series that are quoted
at $3 per contract or greater. QQQQ, SPY and IWM are quoted in $0.01
increments for all options series. The Penny Pilot is currently
scheduled to expire on December 31, 2017.\5\
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 80755 (May 24,
2017), 82 FR 25025 (May 31, 2017) (SR-Phlx-2017-36).
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The Exchange proposes to extend the time period of the Penny Pilot
through June 30, 2018 or the date of permanent approval, if earlier,
and to provide a revised date for adding replacement
[[Page 61352]]
issues to the Penny Pilot. The Exchange proposes that any Penny Pilot
Program issues that have been delisted may be replaced on the second
trading day following January 1, 2018. The replacement issues will be
selected based on trading activity in the previous six months.\6\
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\6\ The replacement issues will be announced to the Exchange's
membership via an Options Trader Alert (OTA) posted on the
Exchange's website. Penny Pilot replacement issues will be selected
based on trading activity in the previous six months, as is the case
today. The replacement issues would be identified based on The
Options Clearing Corporation's trading volume data. For example, for
the January replacement, trading volume from May 30, 2017 through
November 30, 2017 would be analyzed. The month immediately preceding
the replacement issues' addition to the Pilot Program (i.e.,
December) would not be used for purposes of the six-month analysis.
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This filing does not propose any substantive changes to the Penny
Pilot Program; all classes currently participating in the Penny Pilot
will remain the same and all minimum increments will remain unchanged.
The Exchange believes the benefits to public customers and other market
participants who will be able to express their true prices to buy and
sell options have been demonstrated to outweigh the potential increase
in quote traffic.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\7\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\8\ in particular, in that it is designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in facilitating transactions in securities, and 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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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
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In particular, the proposed rule change, which extends the Penny
Pilot for an additional six months through June 30, 2018 or the date of
permanent approval, if earlier, and changes the date for replacing
Penny Pilot issues that were delisted to the second trading day
following January 1, 2018, will enable public customers and other
market participants to express their true prices to buy and sell
options for the benefit of all market participants. This is consistent
with the Act.
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. To the contrary, this proposal
is pro-competitive because it allows Penny Pilot issues to continue
trading on the Exchange.
Moreover, the Exchange believes that the proposed rule change will
allow for further analysis of the Pilot and a determination of how the
Pilot should be structured in the future; and will serve to promote
regulatory clarity and consistency, thereby reducing burdens on the
marketplace and facilitating investor protection.
The Pilot is an industry-wide initiative supported by all other
option exchanges. The Exchange believes that extending the Pilot will
allow for continued competition between market participants on the
Exchange trading similar products as their counterparts on other
exchanges, while at the same time allowing the Exchange to continue to
compete for order flow with other exchanges in option issues trading as
part of the Pilot.
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
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \9\ and Rule 19b-4(f)(6) thereunder.\10\
Because the 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 prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
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\9\ 15 U.S.C. 78s(b)(3)(A)(iii).
\10\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \11\ normally
does not become operative prior to 30 days after the date of the
filing.\12\ However, pursuant to Rule 19b-4(f)(6)(iii),\13\ the
Commission may 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 operative delay so that
the proposal may become operative immediately upon filing. The
Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
because doing so will allow the Pilot Program to continue without
interruption in a manner that is consistent with the Commission's prior
approval of the extension and expansion of the Pilot Program and will
allow the Exchange and the Commission additional time to analyze the
impact of the Pilot Program. Accordingly, the Commission designates the
proposed rule change as operative upon filing with the Commission.\14\
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\11\ 17 CFR 240.19b-4(f)(6).
\12\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's 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 pre-filing requirement.
\13\ 17 CFR 240.19b-4(f)(6)(iii).
\14\ For purposes only of waiving the operative delay for this
proposal, the Commission has 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 such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \15\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\15\ 15 U.S.C. 78s(b)(2)(B).
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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
[[Page 61353]]
Send an email to [email protected]. Please include
File Number SR-Phlx-2017-104 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-2017-104. 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 website (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 website 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. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly.
All submissions should refer to File Number SR-Phlx-2017-104 and
should be submitted on or before January 17, 2018.
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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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-27831 Filed 12-26-17; 8:45 am]
BILLING CODE 8011-01-P
