Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Phlx Rule 3312, 18606-18608 [2020-06858]
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18606
Federal Register / Vol. 85, No. 64 / Thursday, April 2, 2020 / Notices
Comments may be submitted by any of
the following methods:
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
[Release No. 34–88503; File No. SR–Phlx–
2020–13]
• 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–
CboeEDGA–2020–009 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–CboeEDGA–2020–009. 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–CboeEDGA–2020–009 and
should be submitted on or before April
23, 2020.
jbell on DSKJLSW7X2PROD with NOTICES
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–06848 Filed 4–1–20; 8:45 am]
Self-Regulatory Organizations; Nasdaq
PHLX LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change to Phlx Rule 3312
March 27, 2020.
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 March 23,
2020, 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 proposal
to extend the current pilot program
related to Phlx Rule 3312 (Clearly
Erroneous Transactions) by six months,
to the close of business on October 20,
2020.
The text of the proposed rule change
is available on the Exchange’s website at
https://nasdaqphlx.cchwallstreet.com/,
at the principal office of the Exchange,
and at the Commission’s Public
Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of the proposed rule
change is to extend the current pilot
BILLING CODE 8011–01–P
1 15
19 17
CFR 200.30–3(a)(12).
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
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program related to Rule 3312, Clearly
Erroneous Transactions, to the close of
business on October 20, 2020. This
change is being proposed to allow the
Exchange to further consider a
permanent proposal for clearly
erroneous execution reviews.
On September 10, 2010, the
Commission approved, on a pilot basis,
changes to Rule 3312 that, among other
things: (i) Provided for uniform
treatment of clearly erroneous execution
reviews in multi-stock events involving
twenty or more securities; and (ii)
reduced the ability of the Exchange to
deviate from the objective standards set
forth in the rule.3 Following this, on
September 30, 2010, the Exchange
adopted changes to conform its Rule
3312 to Nasdaq’s and BX’s rules 11890.4
In 2013, the Exchange adopted a
provision designed to address the
operation of the Plan.5 Finally, in 2014,
the Exchange adopted two additional
provisions providing that: (i) A series of
transactions in a particular security on
one or more trading days may be viewed
as one event if all such transactions
were effected based on the same
fundamentally incorrect or grossly
misinterpreted issuance information
resulting in a severe valuation error for
all such transactions; and (ii) in the
event of any disruption or malfunction
in the operation of the electronic
communications and trading facilities of
an Exchange, another SRO, or
responsible single plan processor in
connection with the transmittal or
receipt of a trading halt, an Officer,
acting on his or her own motion, shall
nullify any transaction that occurs after
a trading halt has been declared by the
primary listing market for a security and
before such trading halt has officially
ended according to the primary listing
market.6 These changes are currently
scheduled to operate for a pilot period
that concludes on April 20, 2020.7
If the pilot period is not either
extended, replaced or approved as
permanent, the prior versions of
paragraphs (a)(2)(C), (c)(1), (b)(i), and
(b)(ii) shall be in effect, and the
provisions of paragraphs (g) through (i)
3 See Securities Exchange Act Release No. 62886
(September 10, 2010), 75 FR 56613 (September 16,
2010) (SR–NASDAQ–2010–076).
4 See Securities Exchange Act Release No. 63023
(September 30, 2010), 75 FR 61802 (October 6,
2010) (SR–Phlx–2010–125).
5 See Securities Exchange Act Release No. 68820
(February 1, 2013), 78 FR 9436 (February 8, 2013)
(SR–Phlx–2013–12).
6 See Securities Exchange Act Release No. 72434
(June 19, 2014), 79 FR 36110 (June 25, 2014) (SR–
Phlx–2014–27).
7 See Securities Exchange Act Release No. 87356
(October 18, 2019), 84 FR 57133 (October 24, 2019)
(SR–Phlx–2019–44).
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Federal Register / Vol. 85, No. 64 / Thursday, April 2, 2020 / Notices
jbell on DSKJLSW7X2PROD with NOTICES
shall be null and void.8 In such an
event, the remaining sections of Rule
3312 would continue to apply to all
transactions executed on the Exchange.
The Exchange understands that the
other national securities exchanges and
Financial Industry Regulatory Authority
(‘‘FINRA’’) will also file similar
proposals to extend their respective
clearly erroneous execution pilot
programs, the substance of which are
identical to Rule 3312.
The Exchange does not propose any
additional changes to Rule 3312. The
Exchange believes the benefits to market
participants from the more objective
clearly erroneous executions rule
should continue on a limited six month
pilot basis after the current expiration
date to allow the Exchange to continue
to assess whether additional changes
should also be made to the operation of
the clearly erroneous execution rules.
Extending the effectiveness of Rule 3312
for an additional six months should
provide the Exchange, other national
securities exchanges and FINRA
additional time to consider further
amendments to the clearly erroneous
execution rules.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
requirements of Section 6(b) of the Act,9
in general, and Section 6(b)(5) of the
Act,10 in particular, in that it is designed
to remove impediments to and perfect
the mechanism of a free and open
market and a national market system, to
promote just and equitable principles of
trade, and, in general, to protect
investors and the public interest and not
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
The Exchange believes that the
proposed rule change promotes just and
equitable principles of trade in that it
promotes transparency and uniformity
across markets concerning review of
transactions as clearly erroneous. The
Exchange believes that extending the
clearly erroneous execution pilot under
Rule 3312 for an additional six months
would help assure that the
determination of whether a clearly
erroneous trade has occurred will be
based on clear and objective criteria,
and that the resolution of the incident
will occur promptly through a
transparent process. The proposed rule
change would also help assure
consistent results in handling erroneous
8 See notes 3–6, supra. The prior versions of
paragraphs (a)(2)(C), (c)(1), (b)(i), and (b)(ii)
generally provided greater discretion to the
Exchange with respect to breaking erroneous trades.
9 15 U.S.C. 78f(b).
10 15 U.S.C. 78f(b)(5).
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trades across the U.S. equities markets,
thus furthering fair and orderly markets,
the protection of investors and the
public interest. Based on the foregoing,
the Exchange believes the amended
Clearly Erroneous Transactions rule
should continue to be in effect on a pilot
basis while the Exchange, other national
securities exchanges and FINRA
consider a permanent proposal for
clearly erroneous execution reviews.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change would impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The proposal
would ensure the continued,
uninterrupted operation of harmonized
clearly erroneous execution rules across
the U.S. equities markets while the
Exchange, other national securities
exchanges and FINRA consider further
amendments to these rules. The
Exchange understands that the other
national securities exchanges and
FINRA will also file similar proposals to
extend their respective clearly
erroneous execution pilot programs.
Thus, the proposed rule change will
help to ensure consistency across
market centers without implicating any
competitive issues.
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) of the Act 11 and Rule 19b–
4(f)(6) thereunder.12
A proposed rule change filed under
Rule 19b–4(f)(6) 13 normally does not
11 15
U.S.C. 78s(b)(3)(A).
12 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) 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 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).
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18607
become operative prior to 30 days after
the date of the 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
operative delay so that the proposed
rule change may become effective and
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, as it will allow the
current clearly erroneous execution
pilot program to continue
uninterrupted, without any changes,
while the Exchange and the other
national securities exchanges consider a
permanent proposal for clearly
erroneous execution reviews. For this
reason, the Commission hereby waives
the 30-day operative delay and
designates the proposed rule change as
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 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
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–2020–13 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.
14 17
CFR 240.19b–4(f)(6)(iii).
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).
15 For
E:\FR\FM\02APN1.SGM
02APN1
18608
Federal Register / Vol. 85, No. 64 / Thursday, April 2, 2020 / Notices
All submissions should refer to File
Number SR–Phlx–2020–13. 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-2020–13 and should
be submitted on or before April 23,
2020.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–06858 Filed 4–1–20; 8:45 am]
jbell on DSKJLSW7X2PROD with NOTICES
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
and C below, of the most significant
aspects of such statements.
[Release No. 34–88495; File No. SR–FINRA–
2020–008]
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Extend the Pilot
Program Related to FINRA Rule 11892
(Clearly Erroneous Transactions in
Exchange-Listed Securities)
March 27, 2020.
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 March 18,
2020, Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) 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 FINRA. FINRA has
designated the proposed rule change as
constituting a ‘‘non-controversial’’ rule
change under paragraph (f)(6) of Rule
19b–4 under the Act,3 which renders
the proposal effective upon receipt of
this filing by the Commission. 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
FINRA is proposing to extend the
current pilot program related to FINRA
Rule 11892 (Clearly Erroneous
Transactions in Exchange-Listed
Securities) (‘‘Clearly Erroneous
Transaction Pilot’’ or ‘‘Pilot’’) until
October 20, 2020.
The text of the proposed rule change
is available on FINRA’s website at
https://www.finra.org, at the principal
office of FINRA 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,
FINRA 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. FINRA has prepared
summaries, set forth in sections A, B,
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 17 CFR 240.19b–4(f)(6).
2 17
16 17
CFR 200.30–3(a)(12).
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1. Purpose
FINRA is proposing a rule change to
extend the current pilot program related
to FINRA Rule 11892 governing clearly
erroneous transactions in exchangelisted securities until the close of
business on October 20, 2020. Extending
the Pilot would provide FINRA and the
national securities exchanges additional
time to consider a permanent proposal
for clearly erroneous transaction
reviews.
On September 10, 2010, the
Commission approved, on a pilot basis,
changes to FINRA Rule 11892 that,
among other things: (i) Provided for
uniform treatment of clearly
erroneous transaction reviews in multistock events involving twenty or more
securities; and (ii) reduced the ability of
FINRA to deviate from the objective
standards set forth in the rule.4 In 2013,
FINRA adopted a provision designed to
address the operation of the Plan to
Address Extraordinary Market Volatility
Pursuant to Rule 608 of Regulation NMS
(‘‘Plan’’).5 Finally, in 2014, FINRA
adopted two additional provisions
addressing (i) erroneous transactions
that occur over one or more trading days
that were based on the same
fundamentally incorrect or grossly
misinterpreted information resulting in
a severe valuation error; and (ii) a
disruption or malfunction in the
operation of the facilities of a selfregulatory organization or responsible
single plan processor in connection
with the transmittal or receipt of a
trading halt.6
On April 9, 2019, FINRA filed a
proposed rule change to untie the
effectiveness of the Clearly Erroneous
Transaction Pilot from the effectiveness
of the Plan, and to extend the Pilot’s
effectiveness to the close of business on
October 18, 2019.7 On October 18, 2019,
FINRA filed a proposed rule change to
4 See Securities Exchange Act Release No. 62885
(September 10, 2010), 75 FR 56641 (September 16,
2010) (Order Approving File No. SR–FINRA–2010–
032).
5 See Securities Exchange Act Release No. 68808
(February 1, 2013), 78 FR 9083 (February 7, 2013)
(Notice of Filing and Immediate Effectiveness of
File No. SR–FINRA–2013–012).
6 See Securities Exchange Act Release No. 72434
(June 19, 2014), 79 FR 36110 (June 25, 2014) (Order
Approving File No. SR–FINRA–2014–021).
7 See Securities Exchange Act Release No. 85612
(April 11, 2019), 84 FR 16107 (April 17, 2019)
(Notice of Filing and Immediate Effectiveness of
File No. SR–FINRA–2019–011).
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]]>Agencies
[Federal Register Volume 85, Number 64 (Thursday, April 2, 2020)]
[Notices]
[Pages 18606-18608]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-06858]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-88503; File No. SR-Phlx-2020-13]
Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change to Phlx Rule 3312
March 27, 2020.
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 March 23, 2020, 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 proposal to extend the current pilot
program related to Phlx Rule 3312 (Clearly Erroneous Transactions) by
six months, to the close of business on October 20, 2020.
The text of the proposed rule change is available on the Exchange's
website at https://nasdaqphlx.cchwallstreet.com/, at the principal
office of the Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the proposed rule change is to extend the current
pilot program related to Rule 3312, Clearly Erroneous Transactions, to
the close of business on October 20, 2020. This change is being
proposed to allow the Exchange to further consider a permanent proposal
for clearly erroneous execution reviews.
On September 10, 2010, the Commission approved, on a pilot basis,
changes to Rule 3312 that, among other things: (i) Provided for uniform
treatment of clearly erroneous[thinsp]execution reviews in multi-stock
events involving twenty or more securities; and (ii) reduced the
ability of the Exchange to deviate from the objective standards set
forth in the rule.\3\ Following this, on September 30, 2010, the
Exchange adopted changes to conform its Rule 3312 to Nasdaq's and BX's
rules 11890.\4\ In 2013, the Exchange adopted a provision designed to
address the operation of the Plan.\5\ Finally, in 2014, the Exchange
adopted two additional provisions providing that: (i) A series of
transactions in a particular security on one or more trading days may
be viewed as one event if all such transactions were effected based on
the same fundamentally incorrect or grossly misinterpreted issuance
information resulting in a severe valuation error for all such
transactions; and (ii) in the event of any disruption or malfunction in
the operation of the electronic communications and trading facilities
of an Exchange, another SRO, or responsible single plan processor in
connection with the transmittal or receipt of a trading halt, an
Officer, acting on his or her own motion, shall nullify any transaction
that occurs after a trading halt has been declared by the primary
listing market for a security and before such trading halt has
officially ended according to the primary listing market.\6\ These
changes are currently scheduled to operate for a pilot period that
concludes on April 20, 2020.\7\
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 62886 (September 10,
2010), 75 FR 56613 (September 16, 2010) (SR-NASDAQ-2010-076).
\4\ See Securities Exchange Act Release No. 63023 (September 30,
2010), 75 FR 61802 (October 6, 2010) (SR-Phlx-2010-125).
\5\ See Securities Exchange Act Release No. 68820 (February 1,
2013), 78 FR 9436 (February 8, 2013) (SR-Phlx-2013-12).
\6\ See Securities Exchange Act Release No. 72434 (June 19,
2014), 79 FR 36110 (June 25, 2014) (SR-Phlx-2014-27).
\7\ See Securities Exchange Act Release No. 87356 (October 18,
2019), 84 FR 57133 (October 24, 2019) (SR-Phlx-2019-44).
---------------------------------------------------------------------------
If the pilot period is not either extended, replaced or approved as
permanent, the prior versions of paragraphs (a)(2)(C), (c)(1), (b)(i),
and (b)(ii) shall be in effect, and the provisions of paragraphs (g)
through (i)
[[Page 18607]]
shall be null and void.\8\ In such an event, the remaining sections of
Rule 3312 would continue to apply to all transactions executed on the
Exchange. The Exchange understands that the other national securities
exchanges and Financial Industry Regulatory Authority (``FINRA'') will
also file similar proposals to extend their respective clearly
erroneous execution pilot programs, the substance of which are
identical to Rule 3312.
---------------------------------------------------------------------------
\8\ See notes 3-6, supra. The prior versions of paragraphs
(a)(2)(C), (c)(1), (b)(i), and (b)(ii) generally provided greater
discretion to the Exchange with respect to breaking erroneous
trades.
---------------------------------------------------------------------------
The Exchange does not propose any additional changes to Rule 3312.
The Exchange believes the benefits to market participants from the more
objective clearly erroneous executions rule should continue on a
limited six month pilot basis after the current expiration date to
allow the Exchange to continue to assess whether additional changes
should also be made to the operation of the clearly erroneous execution
rules. Extending the effectiveness of Rule 3312 for an additional six
months should provide the Exchange, other national securities exchanges
and FINRA additional time to consider further amendments to the clearly
erroneous execution rules.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the requirements of Section 6(b) of the Act,\9\ in general, and Section
6(b)(5) of the Act,\10\ in particular, in that it is designed to remove
impediments to and perfect the mechanism of a free and open market and
a national market system, to promote just and equitable principles of
trade, and, in general, to protect investors and the public interest
and not to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange believes that the proposed rule change promotes just
and equitable principles of trade in that it promotes transparency and
uniformity across markets concerning review of transactions as clearly
erroneous. The Exchange believes that extending the clearly erroneous
execution pilot under Rule 3312 for an additional six months would help
assure that the determination of whether a clearly erroneous trade has
occurred will be based on clear and objective criteria, and that the
resolution of the incident will occur promptly through a transparent
process. The proposed rule change would also help assure consistent
results in handling erroneous trades across the U.S. equities markets,
thus furthering fair and orderly markets, the protection of investors
and the public interest. Based on the foregoing, the Exchange believes
the amended Clearly Erroneous Transactions rule should continue to be
in effect on a pilot basis while the Exchange, other national
securities exchanges and FINRA consider a permanent proposal for
clearly erroneous execution reviews.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change would
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposal would ensure
the continued, uninterrupted operation of harmonized clearly erroneous
execution rules across the U.S. equities markets while the Exchange,
other national securities exchanges and FINRA consider further
amendments to these rules. The Exchange understands that the other
national securities exchanges and FINRA will also file similar
proposals to extend their respective clearly erroneous execution pilot
programs. Thus, the proposed rule change will help to ensure
consistency across market centers without implicating any competitive
issues.
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) of the Act \11\ and Rule 19b-
4(f)(6) thereunder.\12\
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
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 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 under Rule 19b-4(f)(6) \13\ normally
does not become operative prior to 30 days after the date of the
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 operative delay so that the proposed
rule change may become effective and 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, as
it will allow the current clearly erroneous execution pilot program to
continue uninterrupted, without any changes, while the Exchange and the
other national securities exchanges consider a permanent proposal for
clearly erroneous execution reviews. For this reason, the Commission
hereby waives the 30-day operative delay and designates the proposed
rule change as 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 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 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 [email protected]. Please include
File Number SR-Phlx-2020-13 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.
[[Page 18608]]
All submissions should refer to File Number SR-Phlx-2020-13. 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-2020-13 and should be submitted on
or before April 23, 2020.
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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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-06858 Filed 4-1-20; 8:45 am]
BILLING CODE 8011-01-P
