Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Relocate Its PSX Equity and General Rules From Its Current Rulebook Into Its New Rulebook Shell and Make Other Changes to the Phlx Rules, 8966-8970 [2021-02709]
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Federal Register / Vol. 86, No. 26 / Wednesday, February 10, 2021 / Notices
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–2021–05 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Securities and Exchange Commission,
100 F Street NE, Washington, DC
20549–1090.
All submissions should refer to File
Number SR–Phlx–2021–05. 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–2021–05 and should
be submitted on or before March 3,
2021.
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For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.51
J. Matthew DeLesDernier,
Assistant Secretary.
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.
[FR Doc. 2021–02710 Filed 2–9–21; 8:45 am]
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–91058; File No. SR–Phlx–
2021–04]
Self-Regulatory Organizations; Nasdaq
PHLX LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Relocate Its PSX
Equity and General Rules From Its
Current Rulebook Into Its New
Rulebook Shell and Make Other
Changes to the Phlx Rules
February 4, 2021.
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 January
22, 2021, 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 relocate its
PSX equity and general rules from its
current Rulebook into its new Rulebook
shell and make other changes to the
Phlx Rules.
The text of the proposed rule change
is available on the Exchange’s website at
https://listingcenter.nasdaq.com/
rulebook/phlx/rules, 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
51 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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1. Purpose
The purpose of this rule change is to
relocate the PSX equity and general
rules from the current Rulebook into the
new Rulebook shell 3 and also make
other amendments to the Phlx Rules.
The Exchange also proposes a number
of minor, non-substantive changes to the
Rulebook shell as described below. The
relocation and harmonization of these
rules is part of the Exchange’s continued
effort to promote efficiency and
conformity of its processes with those of
its affiliated exchanges. The Exchange
believes that the placement of these
rules into their new location in the
Rulebook shell will facilitate the use of
the Rulebook by members and member
organizations.
Universal Changes
The Exchange proposes to update all
cross-references within the Rulebook
shell to the new relocated rule cites. The
Exchange proposes to replace internal
rule references to simply state ‘‘this
Rule’’ where the rule is citing itself
without a more specific cite included in
the Rule. For example, if PSX Rule 4619
refers currently to ‘‘Rule 4619’’ or ‘‘this
Rule 4619’’ the Exchange will amend
the phrase to simply ‘‘this Rule.’’ Except
where the Exchange specifies below that
it will retain the current rule
numbering, the Exchange also proposes
to conform the paragraph numbering
and lettering to that used in the
Rulebook shell for greater consistency,
and to correct punctuation. The
Exchange proposes to replace ‘‘PSX
Rules’’ with ‘‘Equity Rules’’ where
applicable as the title of the ruleset is
proposed to be ‘‘Equity Rules.’’
Furthermore, the Exchange proposes to
delete any empty reserved rules and
already deleted rules in the current
Rulebook. Finally, the Exchange
proposes to make certain technical
corrections to add hyphens and spacing
where necessary.
In addition to updating rule citations
impacted by the proposed rule
relocations herein, the Exchange
3 Previously, the Exchange filed to relocate other
rules within its Rulebook. See Securities Exchange
Act Release No. 88213 (February 14, 2020), 85 FR
9859 (February 20, 2020) (SR–Phlx–2020–03)
(‘‘Prior Relocation Rule Change’’).
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proposes to update several rule citations
to rules which were previously
relocated in the Prior Relocation Rule
Change. Accordingly, rule citations to
the following rules are being updated
with this proposal: Rule 133 (now Rule
3101); Rule 703 (now Options 6D,
Section 1); Rule 707 (currently PSX Rule
3503); 4 Rule 765 (now General 9,
Section 1(a)); Rule 910 (now General 3,
Section 1); Rule 911 (now General 3,
Section 12); Rule 985 (now General 2,
Section 4); and Rule 1092 (now Options
3, Section 20).
General 1
The Exchange proposes to add a title
under ‘‘General 1 General Provisions’’
which states ‘‘Section 1 Definitions.’’
Also, the Exchange proposes to update
rule citations to relocated rules as well
as rule citations to rules which were
previously relocated in the Prior
Relocation Rule Change. The Exchange
notes that The Nasdaq Stock Market
LLC (‘‘Nasdaq’’) recently amended
certain rule citations which also impact
proposed changes herein, particularly
with respect to General 4 rule
numbering.5
General 2
The Exchange proposes to relocate
Rule 3600. Regulatory Services
Agreements to General 2, Section 5,
which was reserved. The Exchange
proposes to update rule citations to
rules which were previously relocated
in the Prior Relocation Rule Change.
General 4
The Exchange proposes to re-title
General 4 as ‘‘Registration
Requirements.’’ The rule is currently
titled ‘‘Regulation.’’ The Exchange
proposes to add a period at the end of
General 4, Section 1. The Exchange also
proposes to amend rule numbering to
conform with a recent Nasdaq rule
change.6
General 5
The Exchange proposes to relocate the
text of Minor Rule Violations rules into
General 5. Today, the Minor Rule
Violations, except for violations of
General 7, are delineated within General
5. The Exchange proposes to relocate
the rule text of each Minor Rule
violation rule from the PSX Rulebook
into General 5 and remove the
duplicative list of Minor Rule Violations
from the PSX Rulebook. With respect to
violations of General 7, the Exchange
proposes to add General 7, Failure to
Comply with the Consolidated Audit
Trail Compliance Rule requirements,
into the list of Equity Floor Procedure
Advices within General 5, Section 3,
Code of Procedure. General 7 was
recently added to The Equity Minor
Rule Violations.7 The Exchange also
proposes to remove the reference in
General 5 to A–5 Training as there is no
corresponding Minor Rule Plan for A–
5.
The Exchange proposes to remove
‘‘Floor’’ from the title ‘‘Equity Floor
Procedure Advices’’ as PSX is an
electronic only market.
The Exchange proposes to delete the
title ‘‘A. Miscellaneous,’’ ‘‘E. Staffing,’’
‘‘F. Miscellaneous,’’ and ‘‘S. PreOpening Procedures,’’ ‘‘Rule 60
Regulations’’ including Regulation 1–
Regulations 7 from the PSX Rulebook.
General 9
The Exchange proposes to relocate the
below rules into General 9.
Shell rule
Current rule
General 9, Section 1(c) ...................
3503. Conduct Inconsistent with Just and Equitable Principles of
Trade.
3504. Acts Detrimental to the Interest or Welfare of the Exchange .....
3507. Telemarketing ..............................................................................
3506. Anti-Money Laundering Compliance Program ............................
General 9, Section 1(d) ...................
General 9, Section 5 .......................
General 9, Section 37 .....................
Deleted options rule
Today, the Rulebook contains both an
equity and option rule, which are
identical, for Conduct Inconsistent with
Just and Equitable Principles of Trade,
Acts Detrimental to the Interest or
Welfare of the Exchange, Telemarketing,
and Anti-Money Laundering
Compliance Program. The Exchange is
relocating a version of each of these
rules to General 9 and eliminating the
corresponding options and equity rules.
The General 9 rules apply to both the
equity and options markets.
The Exchange also proposes a number
of corrective changes to Disruptive
Quoting and Trading Activity
Prohibited which was relocated to
General 9, Section 53 in the Prior
Relocation Rule Change. First, in
Section 53(a), the Exchange proposes to
update the references to ‘‘subsections (i)
and (ii)’’ to ‘‘subsections (1) and (2).’’
Second, the Exchange proposes in
Section 53(a)(1)(B)(ii) to update the
reference to ‘‘paragraph (b)(i)’’ to
‘‘paragraph (B)(i).’’ The Exchange
proposes to reserve Section 71 to
harmonize Phlx’s rule numbers with
Nasdaq.
4 PSX Rule 3503 is being relocated to General 9,
Section 1(c) as proposed herein.
5 See Securities Exchange Act Release No. 90577
(December 7, 2020), 85 FR 80202 (December 11,
2020) (SR–NASDAQ–2020–079) (Notice of Filing
and Immediate Effectiveness of Proposed Rule
Change To Relocate Its Equity and General Rules
From Its Current Rulebook Into Its New Rulebook
Shell).
6 Id.
7 See Securities Exchange Act Release No. 89667
(August 25, 2020), 85 FR 53876 (August 31, 2020)
(SR–Phlx–2020–40) (Notice of Filing and Order
Granting Accelerated Approval of Proposed Rule
Change To Add the Consolidated Audit Trail
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Equity 1
The Exchange proposes to relocate
Rule 3301, Equity Definitions, into new
Equity 1, Section 1. The Exchange is
amending the first sentence of new
Equity 1, Section 1 to provide, ‘‘The
following definitions apply to the
Equity Rules for the trading of securities
on PSX.’’ While Rule 3301 currently
provides that the definitions apply to
the Rule 3200 and 3300 Series, the
Exchange notes that the definitions
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8967
Options 9, Section 1.
Options 9, Section 5.
Options 10, Section 23.
Options 9, Section 21.
apply to all rules under the heading
Equity Rules and therefore proposes to
amend the current text further to apply
the relocated definitions to the entire
section related to the equity market.
The definition for ‘‘PSX Participant’’
currently is defined to mean, ‘‘. . . an
entity that fulfills the obligations
contained in Rule 3211 regarding
participation in the System, and shall
include: . . .’’. PSX Rule 3211 was
previously deleted.8 Phlx Rule 1094
became applicable to the market
participants trading on PSX with the
Rule 3211 Removal Rule Change. Phlx
Rule 1094 was relocated to General 2,
Section 22 in the Prior Phlx Relocation
Rule Change.
Industry Member Compliance Rules to the List of
Minor Rule Violations).
8 See Securities Exchange Act Release No. 76452
(November 17, 2015), 80 FR 73019 (November 23,
2015) (SR–Phlx–2015–93) (Notice of Filing and
Immediate Effectiveness of Proposed Rule Change
Relating to Sponsored Access) (‘‘Rule 3211 Removal
Rule Change’’).
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Equity 2
The Exchange proposes to relocate the
following rules into Equity 2 which is
titled Equity Market Participants. The
Exchange proposes to instead title this
section ‘‘Market Participants’’ to
conform to Nasdaq’s Rulebook
Structure.9
Shell rule
Section
Section
Section
Section
1
2
3
4
........
........
........
........
Section 5 ........
Section 6 ........
Section 7 ........
Section 8 ........
Section 9 ........
Section 10 ......
Section 11 ......
Section 12 ......
Section 13 ......
Section 14 ......
Section 15 ......
Section 16 ......
Section 17 ......
Section 18 ......
Section 19 ......
Section 20 ......
Current rule
3201. Scope.
3203. Definitions.
Reserved.
3212. Registration as a Market Maker.
3213. Market Maker Obligations.
3214. Stabilizing Bids.
3216. Reports.
3217. Normal Business
Hours.
3218. Clearance and Settlement.
3219. Withdrawal of
Quotations.
3220. Voluntary Termination
of Registration.
3221. Suspension and Termination of Quotations
and Order Entry.
3222. Termination of PSX
Service.
3223. Alternative Trading
Systems.
3224. Penalty Bids and Syndicate Covering Transactions.
3225. Obligation to Provide
Information.
3226. Limitation of Liability.
3227. Obligation to Honor
System Trades.
3228. Compliance with
Rules and Registration
Requirements.
3231. Customer Disclosures.
The Exchange is amending the first
sentence of new Equity 2, Section 1 to
provide, ‘‘Unless otherwise specified,
the Equity Rules apply only to the
quoting and trading of System Securities
via PSX.’’ Current Rule 3201 references
the 3200 Series (Requirements for PSX
Participants). However all equity rules
apply to equities trading on PSX.
Broadening the language of Equity 2,
Section 1 is consistent with the manner
in which equities rules are applied
today with respect to trading and other
aspects of conducting business on PSX.
The Exchange also proposes to amend
Equity 2, Section 2(a) to provide, ‘‘For
purposes of the Equity Rules, unless the
context requires otherwise:’’. The
original reference was to the 3000
Series, although the definitions which
follow relate to federal rules which
would apply to all Equity Rules. The
9 See
note 5 above.
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Exchange proposes to amend the current
text to apply the relocated definitions to
the entire section related to the equity
market to distinguish these rules from
the General Rules and Options Rules.
The Exchange also proposes to update
a rule citation within proposed Equity 2,
Section 10, Withdrawal of Quotations,
at paragraph (d). This paragraph (d)
which discusses withdrawal status,
relates to quotations, and provides,
Excused withdrawal status may be granted
to a PSX Market Maker that fails to maintain
a clearing arrangement with a registered
clearing agency or with a member of such an
agency and is withdrawn from participation
in the trade reporting service of PSX, thereby
terminating its registration as a PSX Market
Maker; provided, however, that if the
Exchange finds that the PSX Market Maker’s
failure to maintain a clearing arrangement is
voluntary, the withdrawal of quotations will
be considered voluntary and unexcused
pursuant to Rule 3220 and the Rule 3300
Series governing PSX. PSX Market Makers
that fail to maintain a clearing relationship
will have their PSX system status set to
‘‘suspend’’ and be thereby prevented from
entering, or executing against, any quotes/
orders in the system.
The Exchange proposes to replace
Rule 3220 (Voluntary Termination of
Registration) with its relocated rule
reference, Equity 2, Section 11. The
Exchange proposes to replace the Rule
3300 Series rules reference with Equity
4. The Rule 3300 Series was relocated
to Equity 4 with the exception of the
Equity 6, Section 3, Phlx Kill Switch.
The Phlx Kill Switch’s relocation to
Equity 6 does not impact its reference
within this rule which described a PSX
Market Maker’s voluntary failure to
maintain a clearing arrangement and its
impact on the withdrawal of quotations.
Equity 3
The Exchange proposes to reserve
Equity 3, currently titled ‘‘Equity
Trading Rules.’’
Equity 4
The Exchange proposes to re-title
Equity 4, currently titled ‘‘Limit UpLimit Down,’’ to ‘‘Equity Trading
Rules.’’ The Exchange proposes to
relocate the following rules into Equity
4 and retain the current rule numbering:
Current rule
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3306. Entry and Display of Quotes and Orders.
3307. Processing of Orders.
3309. Trade Reporting.
3310. Anonymity.
3311. Issuer Corporate Actions Related to a
Dividend, Payment or Distribution.
3312. Clearly Erroneous Transactions.
3315. Order Routing.
3317. Compliance with Regulation NMS Plan
to Implement a Tick Size Pilot.
3102. Limitation of Exchange Liability and
Reimbursement of Certain Expenses.
The Exchange proposes to delete Rule
3202, Application of Other Rules of the
Exchange, as The Limited Liability
Company Agreement of the Exchange
and The By-Laws of the Exchange are
part of the Phlx Rulebook and therefore
apply to PSX already. As such, the
Exchange believes that the rule is
duplicative and not necessary.
The Exchange proposes to delete the
reference to ‘‘Sec. 44 FINRA Jurisdiction
Over Arbitrations Against Exchange
Members’’ within PSX Rule 3202,
Application of Other Rules of the
Exchange, as that rule is not located in
the Phlx Rulebook. Rule 950 describes
Arbitration rules related to members on
Phlx and PSX.
The Exchange proposes to update an
erroneous citation to PSX Rule 0120(x),
currently within PSX Rule 3303, to
Equity 1, Section 1(a).
The Exchange also proposes to delete
PSX Rules 3210 and 3211 because these
rules do not contain substantive text.
The Exchange proposes to remove an
outdated reference to Rule 4770 within
Supplementary Material .01 to PSX Rule
3317 and instead utilize the term ‘‘Rule’’
to refer to Rule 3317. There is no Rule
4770 within the current Phlx Rulebook.
Equity 5
The Exchange proposes to relocate the
below rules into Equity 5, ‘‘Order Audit
Trail Services’’:
Shell rule
Section 1 ........
Section 2 ........
Section 3 ........
Section 4 ........
3100. Limit Up-Limit Down Plan and Trading
Halts on PSX.
3101. Trading Halts Due to Extraordinary
Market Volatility.
3301A. Order Types.
3301B. Order Attributes.
3302. Opening Process.
3303. Short Sale Price Test Pursuant to Rule
201 of Regulation SHO.
3304. Data Feeds Utilized.
PO 00000
Current rule
Section 5 ........
Section 6 ........
Current rule
7410A. Definitions.
7420A. Applicability.
7430A. Synchronization of
Member Organization
Business Clocks.
7440A. Recording of Order
Information.
7450A. Order Data Transmission Requirements.
7460A. Violation of Order
Audit Trail System Rules.
The Exchange proposes to amend a
rule citation within Equity 5, Section 6,
Violation of Order Audit Trail System
Rules. The definition of System is being
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relocated to from current Rule 3301 as
proposed herein. The current Phlx
Rulebook does not contain PSX Rule
0120.
Equity 6
The Exchange proposes to title Equity
6, which is currently reserved, as ‘‘PSX
Risk Management Services; Other
Systems and Programs,’’ and to relocate
the following rules into Equity 6:
Shell rule
Section
Section
Section
Section
1
2
3
4
........
........
........
........
Section 5 ........
Section 6 ........
Current rule
Reserved.
Reserved.
3316. PHLX Kill Switch.
3215. Exchange Sharing of
PSX Participant Risk Settings (excluding Commentary).
Commentary to 3215. Exchange Sharing of PSX
Participant Risk Settings.
Reserved.
Equity 9
The Exchange proposes to re-title
Equity 9, currently ‘‘Supplementary
Conduct Rules,’’ to ‘‘Business Conduct,’’
and to relocate the following rules into
Equity 9:
Shell rule
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Current rule
1 ........
2 ........
3 ........
4 ........
5 ........
6 ........
7 ........
8 ........
9 ........
10 ......
11 ......
12 ......
13 ......
14 ......
15 ......
Section 16 ......
Equity 8
Section 17 ......
Section 18 ......
The Exchange proposes to reserve
Equity 8 which is currently titled
‘‘Uniform Practice Code.’’
Section 19 ......
Equity 8A
Section 20 ......
The Exchange proposes to title Equity
8A as ‘‘Unlisted Trading Privileges,
Proxy and Other Rules.’’ The Exchange
proposes to relocate the following rules
into Equity 8A:
Section 21 ......
Shell rule
Section
Section
Section
Section
Section
1
2
3
4
5
........
........
........
........
........
Section 6 ........
Section 7 ........
Section 8 ........
Section 9 ........
Section 10 ......
Section 11 ......
Section 12 ......
Section 13 ......
Section 14 ......
Section 15 ......
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Reserved.
Reserved.
Reserved.
Reserved.
3204. Securities Traded
under Unlisted Trading
Privileges.
3232. Advertising Practices.
3233. Prevention of the Misuse of Material, Nonpublic
Information.
3234. Additional Requirements for Securities
Issued by Nasdaq or its
Affiliates.
3236. Restriction.
3237. Voting Instructions.
3238. Proxies at Direction of
Owner.
3239. Proxy to Show Number of Shares.
3240. Transfer to Facilitate
Solicitation.
3241. Rule Applicable to Individual Members and
Nominees.
3242. Transmission of Interim Reports and Other
Material.
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Section 23 ......
Equity 10
Current rule
18:53 Feb 09, 2021
Section 22 ......
Reserved.
Reserved.
Reserved.
Reserved.
Reserved.
Reserved.
Reserved.
Reserved.
Reserved.
Reserved.
Reserved.
Reserved.
Reserved.
Reserved.
3410. Limitations on Members’ Trading Because of
Customers’ Orders.
3411. Successive Transactions by Members.
3412. Short Sales.
3413. Proper and Adequate
Margin.
3414. Prohibition on FreeRiding in Cash Accounts.
3500. Financial Responsibility and Reporting.
3502. Automated Submission of Trading Data.
3505. Restrictions on Pledge
of Customers’ Securities.
3501. Independent Audit.
The Exchange proposes to title Equity
10, which is currently reserved, to
‘‘Other Products and Securities,’’ and to
relocate the following rules into Equity
10:
Shell rule
Section
Section
Section
Section
Section
Section
Section
Section
1
2
3
4
5
6
7
8
Current rule
........
........
........
........
........
........
........
........
Reserved.
Reserved.
Reserved.
Reserved.
Reserved.
Reserved.
Reserved.
3230. Trading in CommodityRelated Securities.
Equity 11
The Exchange proposes to adopt a
new Equity 11 and title this section
‘‘Uniform Practice Code.’’ The following
rules will be relocated into Equity 11:
Shell rule
Current rule
Section 1 ........
Section 2 ........
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3400. Dealings on the Exchange—Securities.
3401. Bids and Offers—
‘‘When Issue‘‘.
Fmt 4703
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Shell rule
Current rule
Section 3 ........
3402. Price of Execution
Binding.
3403. Payment on Delivery—Collect on Delivery.
3404. Book-Entry Settlement.
3405. Ex-dividend, Ex-rights.
3406. Ex-warrants.
3407. Buyer Entitled to Dividend, etc.
3408. Claims for Dividend,
etc.
3409. Taking or Supplying
Securities Named in
Order.
Section 4 ........
Section 5 ........
Section 6 ........
Section 7 ........
Section 8 ........
Section 9 ........
Section 10 ......
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,10 in general, and furthers the
objectives of Section 6(b)(5) of the Act,11
in particular, in that it is designed to
promote just and equitable principles of
trade and to protect investors and the
public interest by bringing greater
transparency to its rules by relocating
the equity and general rules into the
new Rulebook shell together with other
rules which have already been
relocated.12 The Exchange’s proposal is
consistent with the Act and will protect
investors and the public interest by
harmonizing its rules, where applicable,
across Nasdaq markets so that members
can readily locate rules which cover
similar topics. The relocation and
harmonization of the Exchange’s Rules
are part of the Exchange’s continued
effort to promote efficiency and
conformity of its processes with those of
its affiliated exchanges. The Exchange
believes that the placement of the PSX
Rules into their new location in the
shell will facilitate the use of the
Rulebook by members. Specifically, the
Exchange believes that market
participants that are members of more
than one Nasdaq market will benefit
from the ability to compare Rulebooks.
The Exchange is not substantively
amending rule text. The renumbering,
re-lettering, deleting reserved and
already deleted rules, amending crossreferences and other minor technical
changes will bring greater transparency
to the Exchange’s Rules. The Exchange’s
affiliates intend to file similar rule
changes to relocate their respective
equity and general rules into the same
location in each Rulebook for ease of
reference. The Exchange believes its
proposal will benefit investors and the
general public by increasing the
transparency of its Rulebook and
10 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
12 See supra note 3.
11 15
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Federal Register / Vol. 86, No. 26 / Wednesday, February 10, 2021 / Notices
promoting easy comparisons among the
various Nasdaq affiliated exchanges’
Rulebooks.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange believes that the proposed
amendments do not impose an undue
burden on competition because the
amendments to relocate the equity and
general rules are non-substantive. This
rule change is intended to bring greater
clarity to the Exchange’s Rules and to
promote easy comparisons among the
various Nasdaq affiliated exchanges’
Rulebooks. Renumbering, re-lettering,
deleting reserved rules and amending
cross-references will bring greater
transparency to the Exchange’s Rules.
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 13 and Rule 19b4(f)(6) thereunder.14
A proposed rule change filed under
Rule 19b–4(f)(6) 15 normally does not
become operative for 30 days after the
date of the filing. However, pursuant to
Rule 19b-4(f)(6)(iii),16 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.
Waiver of the operative delay would
allow the Exchange to immediately
13 15
U.S.C. 78s(b)(3)(A).
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.
15 17 CFR 240.19b–4(f)(6).
16 17 CFR 240.19b–4(f)(6)(iii).
14 17
VerDate Sep<11>2014
18:53 Feb 09, 2021
Jkt 253001
relocate its rules and continue to file
other rules that are affected by this
relocation in a timely manner. The
Commission believes that waiver of the
30-day operative delay is consistent
with the protection of investors and the
public interest. Accordingly, the
Commission waives the 30-day
operative delay and designates the
proposal operative upon filing.17
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
change should be approved or
disapproved.
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–2021–04 and should
be submitted on or before March 3,
2021.
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:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
J. Matthew DeLesDernier,
Assistant Secretary.
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–2021–04 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–2021–04. 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
17 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).
PO 00000
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[FR Doc. 2021–02709 Filed 2–9–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–91066; File No. SR–FINRA–
2020–038]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing of
Amendment No. 1 and Order Instituting
Proceedings To Determine Whether To
Approve or Disapprove the Proposed
Rule Change, as Modified by
Amendment No. 1, to FINRA Rules
5122 (Private Placements of Securities
Issued by Members) and 5123 (Private
Placements of Securities) That Would
Require Members To File Retail
Communications Concerning Private
Placement Offerings That Are Subject
to Those Rules’ Filing Requirements
February 4, 2021.
I. Introduction
On October 28, 2020, Financial
Industry Regulatory Authority, Inc.
(‘‘FINRA’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
the proposed rule change SR–FINRA–
2020–038 (‘‘Proposed Rule Change’’)
pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
18 17
E:\FR\FM\10FEN1.SGM
CFR 200.30–3(a)(12).
10FEN1
]]>Agencies
[Federal Register Volume 86, Number 26 (Wednesday, February 10, 2021)]
[Notices]
[Pages 8966-8970]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-02709]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-91058; File No. SR-Phlx-2021-04]
Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Relocate Its PSX
Equity and General Rules From Its Current Rulebook Into Its New
Rulebook Shell and Make Other Changes to the Phlx Rules
February 4, 2021.
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 January 22, 2021, 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 relocate its PSX equity and general rules
from its current Rulebook into its new Rulebook shell and make other
changes to the Phlx Rules.
The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/phlx/rules, 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 this rule change is to relocate the PSX equity and
general rules from the current Rulebook into the new Rulebook shell \3\
and also make other amendments to the Phlx Rules. The Exchange also
proposes a number of minor, non-substantive changes to the Rulebook
shell as described below. The relocation and harmonization of these
rules is part of the Exchange's continued effort to promote efficiency
and conformity of its processes with those of its affiliated exchanges.
The Exchange believes that the placement of these rules into their new
location in the Rulebook shell will facilitate the use of the Rulebook
by members and member organizations.
---------------------------------------------------------------------------
\3\ Previously, the Exchange filed to relocate other rules
within its Rulebook. See Securities Exchange Act Release No. 88213
(February 14, 2020), 85 FR 9859 (February 20, 2020) (SR-Phlx-2020-
03) (``Prior Relocation Rule Change'').
---------------------------------------------------------------------------
Universal Changes
The Exchange proposes to update all cross-references within the
Rulebook shell to the new relocated rule cites. The Exchange proposes
to replace internal rule references to simply state ``this Rule'' where
the rule is citing itself without a more specific cite included in the
Rule. For example, if PSX Rule 4619 refers currently to ``Rule 4619''
or ``this Rule 4619'' the Exchange will amend the phrase to simply
``this Rule.'' Except where the Exchange specifies below that it will
retain the current rule numbering, the Exchange also proposes to
conform the paragraph numbering and lettering to that used in the
Rulebook shell for greater consistency, and to correct punctuation. The
Exchange proposes to replace ``PSX Rules'' with ``Equity Rules'' where
applicable as the title of the ruleset is proposed to be ``Equity
Rules.'' Furthermore, the Exchange proposes to delete any empty
reserved rules and already deleted rules in the current Rulebook.
Finally, the Exchange proposes to make certain technical corrections to
add hyphens and spacing where necessary.
In addition to updating rule citations impacted by the proposed
rule relocations herein, the Exchange
[[Page 8967]]
proposes to update several rule citations to rules which were
previously relocated in the Prior Relocation Rule Change. Accordingly,
rule citations to the following rules are being updated with this
proposal: Rule 133 (now Rule 3101); Rule 703 (now Options 6D, Section
1); Rule 707 (currently PSX Rule 3503); \4\ Rule 765 (now General 9,
Section 1(a)); Rule 910 (now General 3, Section 1); Rule 911 (now
General 3, Section 12); Rule 985 (now General 2, Section 4); and Rule
1092 (now Options 3, Section 20).
---------------------------------------------------------------------------
\4\ PSX Rule 3503 is being relocated to General 9, Section 1(c)
as proposed herein.
---------------------------------------------------------------------------
General 1
The Exchange proposes to add a title under ``General 1 General
Provisions'' which states ``Section 1 Definitions.'' Also, the Exchange
proposes to update rule citations to relocated rules as well as rule
citations to rules which were previously relocated in the Prior
Relocation Rule Change. The Exchange notes that The Nasdaq Stock Market
LLC (``Nasdaq'') recently amended certain rule citations which also
impact proposed changes herein, particularly with respect to General 4
rule numbering.\5\
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 90577 (December 7,
2020), 85 FR 80202 (December 11, 2020) (SR-NASDAQ-2020-079) (Notice
of Filing and Immediate Effectiveness of Proposed Rule Change To
Relocate Its Equity and General Rules From Its Current Rulebook Into
Its New Rulebook Shell).
---------------------------------------------------------------------------
General 2
The Exchange proposes to relocate Rule 3600. Regulatory Services
Agreements to General 2, Section 5, which was reserved. The Exchange
proposes to update rule citations to rules which were previously
relocated in the Prior Relocation Rule Change.
General 4
The Exchange proposes to re-title General 4 as ``Registration
Requirements.'' The rule is currently titled ``Regulation.'' The
Exchange proposes to add a period at the end of General 4, Section 1.
The Exchange also proposes to amend rule numbering to conform with a
recent Nasdaq rule change.\6\
---------------------------------------------------------------------------
\6\ Id.
---------------------------------------------------------------------------
General 5
The Exchange proposes to relocate the text of Minor Rule Violations
rules into General 5. Today, the Minor Rule Violations, except for
violations of General 7, are delineated within General 5. The Exchange
proposes to relocate the rule text of each Minor Rule violation rule
from the PSX Rulebook into General 5 and remove the duplicative list of
Minor Rule Violations from the PSX Rulebook. With respect to violations
of General 7, the Exchange proposes to add General 7, Failure to Comply
with the Consolidated Audit Trail Compliance Rule requirements, into
the list of Equity Floor Procedure Advices within General 5, Section 3,
Code of Procedure. General 7 was recently added to The Equity Minor
Rule Violations.\7\ The Exchange also proposes to remove the reference
in General 5 to A-5 Training as there is no corresponding Minor Rule
Plan for A-5.
---------------------------------------------------------------------------
\7\ See Securities Exchange Act Release No. 89667 (August 25,
2020), 85 FR 53876 (August 31, 2020) (SR-Phlx-2020-40) (Notice of
Filing and Order Granting Accelerated Approval of Proposed Rule
Change To Add the Consolidated Audit Trail Industry Member
Compliance Rules to the List of Minor Rule Violations).
---------------------------------------------------------------------------
The Exchange proposes to remove ``Floor'' from the title ``Equity
Floor Procedure Advices'' as PSX is an electronic only market.
The Exchange proposes to delete the title ``A. Miscellaneous,''
``E. Staffing,'' ``F. Miscellaneous,'' and ``S. Pre-Opening
Procedures,'' ``Rule 60 Regulations'' including Regulation 1-
Regulations 7 from the PSX Rulebook.
General 9
The Exchange proposes to relocate the below rules into General 9.
------------------------------------------------------------------------
Deleted options
Shell rule Current rule rule
------------------------------------------------------------------------
General 9, Section 1(c)....... 3503. Conduct Options 9,
Inconsistent with Section 1.
Just and Equitable
Principles of Trade.
General 9, Section 1(d)....... 3504. Acts Detrimental Options 9,
to the Interest or Section 5.
Welfare of the
Exchange.
General 9, Section 5.......... 3507. Telemarketing... Options 10,
Section 23.
General 9, Section 37......... 3506. Anti-Money Options 9,
Laundering Compliance Section 21.
Program.
------------------------------------------------------------------------
Today, the Rulebook contains both an equity and option rule, which
are identical, for Conduct Inconsistent with Just and Equitable
Principles of Trade, Acts Detrimental to the Interest or Welfare of the
Exchange, Telemarketing, and Anti-Money Laundering Compliance Program.
The Exchange is relocating a version of each of these rules to General
9 and eliminating the corresponding options and equity rules. The
General 9 rules apply to both the equity and options markets.
The Exchange also proposes a number of corrective changes to
Disruptive Quoting and Trading Activity Prohibited which was relocated
to General 9, Section 53 in the Prior Relocation Rule Change. First, in
Section 53(a), the Exchange proposes to update the references to
``subsections (i) and (ii)'' to ``subsections (1) and (2).'' Second,
the Exchange proposes in Section 53(a)(1)(B)(ii) to update the
reference to ``paragraph (b)(i)'' to ``paragraph (B)(i).'' The Exchange
proposes to reserve Section 71 to harmonize Phlx's rule numbers with
Nasdaq.
Equity 1
The Exchange proposes to relocate Rule 3301, Equity Definitions,
into new Equity 1, Section 1. The Exchange is amending the first
sentence of new Equity 1, Section 1 to provide, ``The following
definitions apply to the Equity Rules for the trading of securities on
PSX.'' While Rule 3301 currently provides that the definitions apply to
the Rule 3200 and 3300 Series, the Exchange notes that the definitions
apply to all rules under the heading Equity Rules and therefore
proposes to amend the current text further to apply the relocated
definitions to the entire section related to the equity market.
The definition for ``PSX Participant'' currently is defined to
mean, ``. . . an entity that fulfills the obligations contained in Rule
3211 regarding participation in the System, and shall include: . . .''.
PSX Rule 3211 was previously deleted.\8\ Phlx Rule 1094 became
applicable to the market participants trading on PSX with the Rule 3211
Removal Rule Change. Phlx Rule 1094 was relocated to General 2, Section
22 in the Prior Phlx Relocation Rule Change.
---------------------------------------------------------------------------
\8\ See Securities Exchange Act Release No. 76452 (November 17,
2015), 80 FR 73019 (November 23, 2015) (SR-Phlx-2015-93) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating
to Sponsored Access) (``Rule 3211 Removal Rule Change'').
---------------------------------------------------------------------------
[[Page 8968]]
Equity 2
The Exchange proposes to relocate the following rules into Equity 2
which is titled Equity Market Participants. The Exchange proposes to
instead title this section ``Market Participants'' to conform to
Nasdaq's Rulebook Structure.\9\
---------------------------------------------------------------------------
\9\ See note 5 above.
------------------------------------------------------------------------
Shell rule Current rule
------------------------------------------------------------------------
Section 1............................ 3201. Scope.
Section 2............................ 3203. Definitions.
Section 3............................ Reserved.
Section 4............................ 3212. Registration as a Market
Maker.
Section 5............................ 3213. Market Maker Obligations.
Section 6............................ 3214. Stabilizing Bids.
Section 7............................ 3216. Reports.
Section 8............................ 3217. Normal Business Hours.
Section 9............................ 3218. Clearance and Settlement.
Section 10........................... 3219. Withdrawal of Quotations.
Section 11........................... 3220. Voluntary Termination of
Registration.
Section 12........................... 3221. Suspension and Termination
of Quotations and Order Entry.
Section 13........................... 3222. Termination of PSX Service.
Section 14........................... 3223. Alternative Trading
Systems.
Section 15........................... 3224. Penalty Bids and Syndicate
Covering Transactions.
Section 16........................... 3225. Obligation to Provide
Information.
Section 17........................... 3226. Limitation of Liability.
Section 18........................... 3227. Obligation to Honor System
Trades.
Section 19........................... 3228. Compliance with Rules and
Registration Requirements.
Section 20........................... 3231. Customer Disclosures.
------------------------------------------------------------------------
The Exchange is amending the first sentence of new Equity 2,
Section 1 to provide, ``Unless otherwise specified, the Equity Rules
apply only to the quoting and trading of System Securities via PSX.''
Current Rule 3201 references the 3200 Series (Requirements for PSX
Participants). However all equity rules apply to equities trading on
PSX. Broadening the language of Equity 2, Section 1 is consistent with
the manner in which equities rules are applied today with respect to
trading and other aspects of conducting business on PSX.
The Exchange also proposes to amend Equity 2, Section 2(a) to
provide, ``For purposes of the Equity Rules, unless the context
requires otherwise:''. The original reference was to the 3000 Series,
although the definitions which follow relate to federal rules which
would apply to all Equity Rules. The Exchange proposes to amend the
current text to apply the relocated definitions to the entire section
related to the equity market to distinguish these rules from the
General Rules and Options Rules.
The Exchange also proposes to update a rule citation within
proposed Equity 2, Section 10, Withdrawal of Quotations, at paragraph
(d). This paragraph (d) which discusses withdrawal status, relates to
quotations, and provides,
Excused withdrawal status may be granted to a PSX Market Maker
that fails to maintain a clearing arrangement with a registered
clearing agency or with a member of such an agency and is withdrawn
from participation in the trade reporting service of PSX, thereby
terminating its registration as a PSX Market Maker; provided,
however, that if the Exchange finds that the PSX Market Maker's
failure to maintain a clearing arrangement is voluntary, the
withdrawal of quotations will be considered voluntary and unexcused
pursuant to Rule 3220 and the Rule 3300 Series governing PSX. PSX
Market Makers that fail to maintain a clearing relationship will
have their PSX system status set to ``suspend'' and be thereby
prevented from entering, or executing against, any quotes/orders in
the system.
The Exchange proposes to replace Rule 3220 (Voluntary Termination
of Registration) with its relocated rule reference, Equity 2, Section
11. The Exchange proposes to replace the Rule 3300 Series rules
reference with Equity 4. The Rule 3300 Series was relocated to Equity 4
with the exception of the Equity 6, Section 3, Phlx Kill Switch. The
Phlx Kill Switch's relocation to Equity 6 does not impact its reference
within this rule which described a PSX Market Maker's voluntary failure
to maintain a clearing arrangement and its impact on the withdrawal of
quotations.
Equity 3
The Exchange proposes to reserve Equity 3, currently titled
``Equity Trading Rules.''
Equity 4
The Exchange proposes to re-title Equity 4, currently titled
``Limit Up-Limit Down,'' to ``Equity Trading Rules.'' The Exchange
proposes to relocate the following rules into Equity 4 and retain the
current rule numbering:
------------------------------------------------------------------------
Current rule
-------------------------------------------------------------------------
3100. Limit Up-Limit Down Plan and Trading Halts on PSX.
3101. Trading Halts Due to Extraordinary Market Volatility.
3301A. Order Types.
3301B. Order Attributes.
3302. Opening Process.
3303. Short Sale Price Test Pursuant to Rule 201 of Regulation SHO.
3304. Data Feeds Utilized.
3306. Entry and Display of Quotes and Orders.
3307. Processing of Orders.
3309. Trade Reporting.
3310. Anonymity.
3311. Issuer Corporate Actions Related to a Dividend, Payment or
Distribution.
3312. Clearly Erroneous Transactions.
3315. Order Routing.
3317. Compliance with Regulation NMS Plan to Implement a Tick Size
Pilot.
3102. Limitation of Exchange Liability and Reimbursement of Certain
Expenses.
------------------------------------------------------------------------
The Exchange proposes to delete Rule 3202, Application of Other
Rules of the Exchange, as The Limited Liability Company Agreement of
the Exchange and The By-Laws of the Exchange are part of the Phlx
Rulebook and therefore apply to PSX already. As such, the Exchange
believes that the rule is duplicative and not necessary.
The Exchange proposes to delete the reference to ``Sec. 44 FINRA
Jurisdiction Over Arbitrations Against Exchange Members'' within PSX
Rule 3202, Application of Other Rules of the Exchange, as that rule is
not located in the Phlx Rulebook. Rule 950 describes Arbitration rules
related to members on Phlx and PSX.
The Exchange proposes to update an erroneous citation to PSX Rule
0120(x), currently within PSX Rule 3303, to Equity 1, Section 1(a).
The Exchange also proposes to delete PSX Rules 3210 and 3211
because these rules do not contain substantive text.
The Exchange proposes to remove an outdated reference to Rule 4770
within Supplementary Material .01 to PSX Rule 3317 and instead utilize
the term ``Rule'' to refer to Rule 3317. There is no Rule 4770 within
the current Phlx Rulebook.
Equity 5
The Exchange proposes to relocate the below rules into Equity 5,
``Order Audit Trail Services'':
------------------------------------------------------------------------
Shell rule Current rule
------------------------------------------------------------------------
Section 1............................ 7410A. Definitions.
Section 2............................ 7420A. Applicability.
Section 3............................ 7430A. Synchronization of Member
Organization Business Clocks.
Section 4............................ 7440A. Recording of Order
Information.
Section 5............................ 7450A. Order Data Transmission
Requirements.
Section 6............................ 7460A. Violation of Order Audit
Trail System Rules.
------------------------------------------------------------------------
The Exchange proposes to amend a rule citation within Equity 5,
Section 6, Violation of Order Audit Trail System Rules. The definition
of System is being
[[Page 8969]]
relocated to from current Rule 3301 as proposed herein. The current
Phlx Rulebook does not contain PSX Rule 0120.
Equity 6
The Exchange proposes to title Equity 6, which is currently
reserved, as ``PSX Risk Management Services; Other Systems and
Programs,'' and to relocate the following rules into Equity 6:
------------------------------------------------------------------------
Shell rule Current rule
------------------------------------------------------------------------
Section 1............................ Reserved.
Section 2............................ Reserved.
Section 3............................ 3316. PHLX Kill Switch.
Section 4............................ 3215. Exchange Sharing of PSX
Participant Risk Settings
(excluding Commentary).
Section 5............................ Commentary to 3215. Exchange
Sharing of PSX Participant Risk
Settings.
Section 6............................ Reserved.
------------------------------------------------------------------------
Equity 8
The Exchange proposes to reserve Equity 8 which is currently titled
``Uniform Practice Code.''
Equity 8A
The Exchange proposes to title Equity 8A as ``Unlisted Trading
Privileges, Proxy and Other Rules.'' The Exchange proposes to relocate
the following rules into Equity 8A:
------------------------------------------------------------------------
Shell rule Current rule
------------------------------------------------------------------------
Section 1............................ Reserved.
Section 2............................ Reserved.
Section 3............................ Reserved.
Section 4............................ Reserved.
Section 5............................ 3204. Securities Traded under
Unlisted Trading Privileges.
Section 6............................ 3232. Advertising Practices.
Section 7............................ 3233. Prevention of the Misuse of
Material, Nonpublic Information.
Section 8............................ 3234. Additional Requirements for
Securities Issued by Nasdaq or
its Affiliates.
Section 9............................ 3236. Restriction.
Section 10........................... 3237. Voting Instructions.
Section 11........................... 3238. Proxies at Direction of
Owner.
Section 12........................... 3239. Proxy to Show Number of
Shares.
Section 13........................... 3240. Transfer to Facilitate
Solicitation.
Section 14........................... 3241. Rule Applicable to
Individual Members and Nominees.
Section 15........................... 3242. Transmission of Interim
Reports and Other Material.
------------------------------------------------------------------------
Equity 9
The Exchange proposes to re-title Equity 9, currently
``Supplementary Conduct Rules,'' to ``Business Conduct,'' and to
relocate the following rules into Equity 9:
------------------------------------------------------------------------
Shell rule Current rule
------------------------------------------------------------------------
Section 1............................ Reserved.
Section 2............................ Reserved.
Section 3............................ Reserved.
Section 4............................ Reserved.
Section 5............................ Reserved.
Section 6............................ Reserved.
Section 7............................ Reserved.
Section 8............................ Reserved.
Section 9............................ Reserved.
Section 10........................... Reserved.
Section 11........................... Reserved.
Section 12........................... Reserved.
Section 13........................... Reserved.
Section 14........................... Reserved.
Section 15........................... 3410. Limitations on Members'
Trading Because of Customers'
Orders.
Section 16........................... 3411. Successive Transactions by
Members.
Section 17........................... 3412. Short Sales.
Section 18........................... 3413. Proper and Adequate Margin.
Section 19........................... 3414. Prohibition on Free-Riding
in Cash Accounts.
Section 20........................... 3500. Financial Responsibility
and Reporting.
Section 21........................... 3502. Automated Submission of
Trading Data.
Section 22........................... 3505. Restrictions on Pledge of
Customers' Securities.
Section 23........................... 3501. Independent Audit.
------------------------------------------------------------------------
Equity 10
The Exchange proposes to title Equity 10, which is currently
reserved, to ``Other Products and Securities,'' and to relocate the
following rules into Equity 10:
------------------------------------------------------------------------
Shell rule Current rule
------------------------------------------------------------------------
Section 1............................ Reserved.
Section 2............................ Reserved.
Section 3............................ Reserved.
Section 4............................ Reserved.
Section 5............................ Reserved.
Section 6............................ Reserved.
Section 7............................ Reserved.
Section 8............................ 3230. Trading in Commodity-
Related Securities.
------------------------------------------------------------------------
Equity 11
The Exchange proposes to adopt a new Equity 11 and title this
section ``Uniform Practice Code.'' The following rules will be
relocated into Equity 11:
------------------------------------------------------------------------
Shell rule Current rule
------------------------------------------------------------------------
Section 1............................ 3400. Dealings on the Exchange--
Securities.
Section 2............................ 3401. Bids and Offers--``When
Issue``.
Section 3............................ 3402. Price of Execution Binding.
Section 4............................ 3403. Payment on Delivery--
Collect on Delivery.
Section 5............................ 3404. Book-Entry Settlement.
Section 6............................ 3405. Ex-dividend, Ex-rights.
Section 7............................ 3406. Ex-warrants.
Section 8............................ 3407. Buyer Entitled to Dividend,
etc.
Section 9............................ 3408. Claims for Dividend, etc.
Section 10........................... 3409. Taking or Supplying
Securities Named in Order.
------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\10\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\11\ in particular, in that it is designed to
promote just and equitable principles of trade and to protect investors
and the public interest by bringing greater transparency to its rules
by relocating the equity and general rules into the new Rulebook shell
together with other rules which have already been relocated.\12\ The
Exchange's proposal is consistent with the Act and will protect
investors and the public interest by harmonizing its rules, where
applicable, across Nasdaq markets so that members can readily locate
rules which cover similar topics. The relocation and harmonization of
the Exchange's Rules are part of the Exchange's continued effort to
promote efficiency and conformity of its processes with those of its
affiliated exchanges. The Exchange believes that the placement of the
PSX Rules into their new location in the shell will facilitate the use
of the Rulebook by members. Specifically, the Exchange believes that
market participants that are members of more than one Nasdaq market
will benefit from the ability to compare Rulebooks.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
\12\ See supra note 3.
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The Exchange is not substantively amending rule text. The
renumbering, re-lettering, deleting reserved and already deleted rules,
amending cross-references and other minor technical changes will bring
greater transparency to the Exchange's Rules. The Exchange's affiliates
intend to file similar rule changes to relocate their respective equity
and general rules into the same location in each Rulebook for ease of
reference. The Exchange believes its proposal will benefit investors
and the general public by increasing the transparency of its Rulebook
and
[[Page 8970]]
promoting easy comparisons among the various Nasdaq affiliated
exchanges' Rulebooks.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange believes that the
proposed amendments do not impose an undue burden on competition
because the amendments to relocate the equity and general rules are
non-substantive. This rule change is intended to bring greater clarity
to the Exchange's Rules and to promote easy comparisons among the
various Nasdaq affiliated exchanges' Rulebooks. Renumbering, re-
lettering, deleting reserved rules and amending cross-references will
bring greater transparency to the Exchange's Rules.
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 \13\ and Rule 19b-
4(f)(6) thereunder.\14\
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 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) \15\ normally
does not become operative for 30 days after the date of the filing.
However, pursuant to Rule 19b-4(f)(6)(iii),\16\ 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. Waiver of the
operative delay would allow the Exchange to immediately relocate its
rules and continue to file other rules that are affected by this
relocation in a timely manner. The Commission believes that waiver of
the 30-day operative delay is consistent with the protection of
investors and the public interest. Accordingly, the Commission waives
the 30-day operative delay and designates the proposal operative upon
filing.\17\
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\15\ 17 CFR 240.19b-4(f)(6).
\16\ 17 CFR 240.19b-4(f)(6)(iii).
\17\ 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 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
Send an email to [email protected]. Please include
File Number SR-Phlx-2021-04 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-2021-04. 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-2021-04 and should be submitted on
or before March 3, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-02709 Filed 2-9-21; 8:45 am]
BILLING CODE 8011-01-P
