Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Equity 4, Rules 3301A and 3301B, 64504-64506 [2023-20169]
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Federal Register / Vol. 88, No. 180 / Tuesday, September 19, 2023 / Notices
appropriate in furtherance of the
purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange has neither solicited
nor received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period (i)
as the Commission may designate up to
90 days of such date if it finds such
longer period to be appropriate and
publishes its reasons for so finding or
(ii) as to which the Exchange consents,
the Commission shall: (a) by order
approve or disapprove such proposed
rule change, or (b) institute proceedings
to determine whether the proposed rule
change should be 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:
ddrumheller on DSK120RN23PROD with NOTICES1
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–
BOX–2023–20 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–BOX–2023–20. 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
VerDate Sep<11>2014
18:21 Sep 18, 2023
Jkt 259001
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
a.m. and 3 p.m. Copies of the filing also
will be available for inspection and
copying at the principal office of the
Exchange. Do not include personal
identifiable information in submissions;
you should submit only information
that you wish to make available
publicly. We may redact in part or
withhold entirely from publication
submitted material that is obscene or
subject to copyright protection. All
submissions should refer to file number
SR–BOX–2023–20 and should be
submitted on or before October 10,
2023.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.245
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–20171 Filed 9–18–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–98377; File No. SR–Phlx–
2023–43]
Self-Regulatory Organizations; Nasdaq
PHLX LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend Equity 4,
Rules 3301A and 3301B
September 13, 2023.
Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on
September 5, 2023, Nasdaq PHLX LLC
(‘‘Phlx’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(the ‘‘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 amend
Equity 4, Rules 3301A and 3301B.3
245 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 References herein to Phlx Rules in the 3000
Series shall mean Rules in Phlx Equity 4.
1 15
PO 00000
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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 Exchange proposes amendments
to its Rules to address inconsistencies
between the Rule Text and observed
System behavior as well as behavior
unaccounted for in the existing Rule
text, as follows. This proposal is similar
to a rule change filed by the Exchange’s
sister exchange, the Nasdaq Stock
Market, LLC, on August 16, 2023.4
First Rule Change
The first proposed rule change
addresses an edge case of inconsistency
between the Rule text and System
behavior, this time regarding Market
Maker Peg Orders.5 Rule 3301A states
that, if after entry of a Market Maker Peg
4 See Securities Exchange Act Release No. 34–
98225 (August 16, 2023), 88 FR 60255 (August 31,
2023) (SR–NASDAQ–2023–030). The Exchange’s
proposal differs from that of Nasdaq in that it
excludes changes to Order Types and Attributes
that are inapplicable to the Exchange due to its
absence of opening and closing crosses.
5 Pursuant to Rule 3301B(b)(5)(A), a ‘‘Market
Maker Peg Order’’ is an Order Type designed to
allow a Market Maker to maintain a continuous
two-sided quotation at a displayed price that is
compliant with the quotation requirements for
Market Makers set forth in Equity 2, Section 5(a)(2).
The displayed price of the Market Maker Peg Order
is set with reference to a ‘‘Reference Price’’ in order
to keep the displayed price of the Market Maker Peg
Order within a bounded price range. The Reference
Price for a Market Maker Peg Order to buy (sell) is
the then-current National Best Bid (National Best
Offer), or if no such National Best Bid or National
Best Offer, the most recent reported last-sale eligible
trade from the responsible single plan processor for
that day, or if none, the previous closing price of
the security as adjusted to reflect any corporate
actions (e.g., dividends or stock splits) in the
security.
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Federal Register / Vol. 88, No. 180 / Tuesday, September 19, 2023 / Notices
Order that has a displayed price based
on the NBBO, and the NBBO
subsequently shifts such that the
displayed price of the Market Maker Peg
Order to buy (sell) is equal to or greater
(less) than the National Best Bid (or
National Best Offer), the Market Maker
Peg Order will not be subsequently
repriced until a new reference price is
established that is more aggressive than
the displayed price of the Market Maker
Peg Order. System testing revealed that
the System does not reprice Market
Maker Peg Orders in this scenario, but
only if such Orders are in round lot
sizes, whereas it does reprice such
Orders when they are in odd lot sizes.
After evaluation, the Exchange
determined to maintain this System
behavior and amend the Rule to
conform to it. The Exchange proposes to
do so because the existing language
proscribing repricing only makes sense
within the context of round lot Market
Maker Peg Orders, which this scenario
would set a new NBBO and when they
do so, cannot reprice with respect to the
reference price they just set. By contrast,
odd lot Market Maker Peg Orders are
ineligible to set the NBBO, and do not
have this same problem. Accordingly,
the Exchange proposes to amend Rule
3301A to clarify that the prohibition
against repricing only applies to Market
Maker Peg Orders in round lot sizes.
Second Rule Change
The second proposal would amend
Equity 4, Rule 3301B(h), to correct its
description of behavior of the NonDisplayed portion of Orders with the
Reserve Attribute.6 Rule 3301B(h)
provides as follows, in pertinent part:
In all cases, if the remaining size of the
Non-Displayed Order is less than the fixed or
random amount stipulated by the Participant,
the full remaining size of the Non-Displayed
Order will be displayed and the NonDisplayed Order will be removed.
ddrumheller on DSK120RN23PROD with NOTICES1
As stated, this Rule requires that the
entire Non-Displayed portion of a
Reserve Order will become Displayed
the moment the size of the Non6 ‘‘Reserve Size’’ is, in part, an Order Attribute
that ‘‘permits a Participant to stipulate that an
Order Type that is displayed may have its displayed
size replenished from additional non-displayed
size.’’ Rule 3301B(h). The Rule also states that
Reserve ‘‘is not available for Orders that are not
displayed; provided, however, that if a Participant
enters Reserve Size for a Non-Displayed Order with
a Time-in-Force of IOC, the full size of the Order,
including Reserve Size, will be processed as a NonDisplayed Order.’’ Id. In addition to the change
proposed above, the Exchange proposes to
eliminate from the immediately preceding language
‘‘with a Time-in-Force of IOC’’ because the
Exchange does not assess a reason to include this
qualifier. The statement that a Non-Displayed Order
with Reserve will be entirely non-displayed is true
even as to Non-Displayed Orders with other TIFs.
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18:21 Sep 18, 2023
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Displayed portion drops below an
amount that a participant designates or
has directed the System to randomly
designate (the ‘‘Max Floor’’). In
conducting a test of System behavior,
however, the Exchange observed that
the System does not, in fact, operate in
this manner. Instead, the System
maintains the Non-Displayed portion of
a Reserve Order as such when the size
of that Non-Displayed Portion drops
below the Max Floor. Rather than
correct the current System behavior to
match the Rule, the Exchange
determined that users of Reserve Orders
prefer the current System behavior
because it is true to the underlying
intent of Reserve functionality, which is
to help limit the price impacts of trading
large quantities of shares by displaying
only small portions of such shares at a
given time, while hiding the rest in
reserve. Thus, the Exchange proposes to
address the inconsistency between the
Rule text and the behavior of the System
by deleting the aforementioned language
from Rule 3301B(h). Going forward, the
System will not convert to a Displayed
Order the Non-Displayed remainder of a
Reserve Order that falls below the Max
Floor, and the System will not remove
it.
2. Statutory Basis
The Exchange believes that its
proposals are consistent with section
6(b) of the Act,7 in general, and further
the objectives of section 6(b)(5) of the
Act,8 in particular, in that they are
designed to promote just and equitable
principles of trade, to remove
impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general to protect investors and the
public interest.
It is consistent with the Act to amend
the Exchange’s Rules to address
inconsistencies between the Rule text
and observed System behavior,
including by adapting the Rule text to
codify observed System behavior, where
the observed behavior is more
consistent with the underlying purpose
of an Order Attribute than is the Rule
text (maintaining the Non-Displayed
status of a reserve portion of a Reserve
Order that drops below the Max Floor)
and where System behavior reflects a
nuance not contemplated by the existing
Rules (clarifying that the prohibition
against repricing Market Maker Peg
Orders that have prices equal to or
better than the NBBO only applies to
round lot Market Maker Peg Orders, and
not to odd lots).
7 15
8 15
PO 00000
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
Frm 00105
Fmt 4703
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64505
Finally, it is consistent with the Act
to amend Rule 3301B(h) to delete
qualifying language which erroneously
suggests that Non-Displayed Orders
with Reserve are only non-displayed
when such Orders have a TIF of IOC.
Investors and the public have an interest
in the Exchange maintaining a Rulebook
that is accurate.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule changes will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposals merely address
inconsistencies between Rule text and
System behavior. The Exchange neither
intends nor perceives that these rule
changes will have any impact on
competition.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to section
19(b)(3)(A)(iii) of the Act 9 and Rule
19b–4(f)(6) thereunder.10 Because the
proposed rule change does not: (i)
significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) become operative
prior to 30 days from the date on which
it was filed, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to section 19(b)(3)(A)
of the Act 11 and Rule 19b–4(f)(6)(iii)
thereunder.12
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
9 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
11 15 U.S.C. 78s(b)(3)(A).
12 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
the proposed rule change, along with a brief
description and 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.
10 17
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64506
Federal Register / Vol. 88, No. 180 / Tuesday, September 19, 2023 / Notices
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under section 19(b)(2)(B) 13 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
ddrumheller on DSK120RN23PROD with NOTICES1
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–2023–43 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–2023–43. 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
a.m. and 3 p.m. Copies of the filing also
will be available for inspection and
copying at the principal office of the
Exchange. Do not include personal
identifiable information in submissions;
you should submit only information
that you wish to make available
publicly. We may redact in part or
withhold entirely from publication
13 15
U.S.C. 78s(b)(2)(B).
VerDate Sep<11>2014
18:21 Sep 18, 2023
submitted material that is obscene or
subject to copyright protection. All
submissions should refer to file number
SR–Phlx–2023–43 and should be
submitted on or before October 10,
2023.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–20169 Filed 9–18–23; 8:45 am]
BILLING CODE 8011–01–P
SMALL BUSINESS ADMINISTRATION
Annual Meeting of the Regional Small
Business Regulatory Fairness Boards
Office of the National
Ombudsman, U.S. Small Business
Administration (SBA).
ACTION: Notice of open meeting of the
Regional Small Business Regulatory
Fairness Boards.
AGENCY:
The SBA, Office of the
National Ombudsman, is issuing this
notice to announce the location, date,
time and agenda for the annual board
meeting of the ten Regional Small
Business Regulatory Fairness Boards.
The meeting is open to the public.
DATES: The meeting will be held on
Thursday, September 28, 2023, from
9:30 a.m. to 4 p.m. EDT, and Friday,
September 29, 2023, from 9:30 a.m. to
4 p.m. EDT.
ADDRESSES: The meeting will be held
virtually through Microsoft Teams.
FOR FURTHER INFORMATION CONTACT: The
meeting is open to the public; however
advance notice of attendance is
requested. Anyone wishing to attend
must contact John Kelly, Case
Management Specialist, by September
21, 2023. If you need accommodations
because of a disability, translation
services, or require additional
information, please contact John Kelly,
by phone (888) 734–3247, by fax (202)
481–5719 or email ombudsman@
sba.gov.
For more information on the Office of
the National Ombudsman, please visit
our website at www.sba.gov/
ombudsman.
SUPPLEMENTARY INFORMATION: Pursuant
to the Small Business Regulatory
Enforcement Fairness Act (Pub. L. 104–
121), sec. 222, SBA announces the
meeting of the Regional Small Business
Regulatory Fairness Boards (Regional
Regulatory Fairness Boards). The
Regional Regulatory Fairness Boards are
SUMMARY:
14 17
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CFR 200.30–3(a)(12).
Frm 00106
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tasked to advise the National
Ombudsman on matters of concern to
small businesses relating to enforcement
activities of agencies and to report on
substantiated instances of excessive
enforcement actions against small
business concerns, including any
findings or recommendations of the
Board as to agency enforcement practice
or policy.
The purpose of the meeting is to
discuss the following topics related to
the Regional Regulatory Fairness
Boards:
—Introduction of the Regional
Regulatory Fairness Boards and the
staff of the Office of the National
Ombudsman
—Facilitated discussion of ongoing
regulatory issues for small business
—Annual Report to Congress Update
—Office of Advocacy regulatory review
—SBA update and future outreach
planning
Dated: September 13, 2023.
Andrienne Johnson,
SBA Committee Management Officer.
[FR Doc. 2023–20166 Filed 9–18–23; 8:45 am]
BILLING CODE 8026–09–P
TENNESSEE VALLEY AUTHORITY
Spring Valley II Solar Project
Tennessee Valley Authority.
Notice of intent.
AGENCY:
ACTION:
The Tennessee Valley
Authority (TVA) intends to prepare an
environmental impact statement (EIS)
for the purchase of electricity generated
by the proposed Spring Valley II Solar
Project in Colbert County, Alabama. The
EIS will assess the potential
environmental effects of constructing,
operating, and maintaining the
proposed 178-megawatt (MW)
alternating current (AC) solar facility
that would occupy approximately 943
acres of the 1,629-acre project study
area. Public comments are invited
concerning the scope of the EIS,
alternatives being considered, and
environmental issues that should be
addressed as a part of this EIS. TVA is
also requesting data, information, and
analysis relevant to the proposed action
from the public; affected federal, state,
tribal, and local governments, agencies,
and offices; the scientific community;
industry; or any other interested party.
DATES: The public scoping period begins
with the publication of this Notice of
Intent in the Federal Register. To ensure
consideration, comments must be
postmarked, emailed, or submitted
online no later than October 19, 2023.
SUMMARY:
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]]>Agencies
[Federal Register Volume 88, Number 180 (Tuesday, September 19, 2023)]
[Notices]
[Pages 64504-64506]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-20169]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-98377; File No. SR-Phlx-2023-43]
Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Equity 4,
Rules 3301A and 3301B
September 13, 2023.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on September 5, 2023, Nasdaq PHLX LLC (``Phlx'' or ``Exchange'')
filed with the Securities and Exchange Commission (the ``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 amend Equity 4, Rules 3301A and 3301B.\3\
---------------------------------------------------------------------------
\3\ References herein to Phlx Rules in the 3000 Series shall
mean Rules in Phlx Equity 4.
---------------------------------------------------------------------------
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 Exchange proposes amendments to its Rules to address
inconsistencies between the Rule Text and observed System behavior as
well as behavior unaccounted for in the existing Rule text, as follows.
This proposal is similar to a rule change filed by the Exchange's
sister exchange, the Nasdaq Stock Market, LLC, on August 16, 2023.\4\
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 34-98225 (August 16,
2023), 88 FR 60255 (August 31, 2023) (SR-NASDAQ-2023-030). The
Exchange's proposal differs from that of Nasdaq in that it excludes
changes to Order Types and Attributes that are inapplicable to the
Exchange due to its absence of opening and closing crosses.
---------------------------------------------------------------------------
First Rule Change
The first proposed rule change addresses an edge case of
inconsistency between the Rule text and System behavior, this time
regarding Market Maker Peg Orders.\5\ Rule 3301A states that, if after
entry of a Market Maker Peg
[[Page 64505]]
Order that has a displayed price based on the NBBO, and the NBBO
subsequently shifts such that the displayed price of the Market Maker
Peg Order to buy (sell) is equal to or greater (less) than the National
Best Bid (or National Best Offer), the Market Maker Peg Order will not
be subsequently repriced until a new reference price is established
that is more aggressive than the displayed price of the Market Maker
Peg Order. System testing revealed that the System does not reprice
Market Maker Peg Orders in this scenario, but only if such Orders are
in round lot sizes, whereas it does reprice such Orders when they are
in odd lot sizes. After evaluation, the Exchange determined to maintain
this System behavior and amend the Rule to conform to it. The Exchange
proposes to do so because the existing language proscribing repricing
only makes sense within the context of round lot Market Maker Peg
Orders, which this scenario would set a new NBBO and when they do so,
cannot reprice with respect to the reference price they just set. By
contrast, odd lot Market Maker Peg Orders are ineligible to set the
NBBO, and do not have this same problem. Accordingly, the Exchange
proposes to amend Rule 3301A to clarify that the prohibition against
repricing only applies to Market Maker Peg Orders in round lot sizes.
---------------------------------------------------------------------------
\5\ Pursuant to Rule 3301B(b)(5)(A), a ``Market Maker Peg
Order'' is an Order Type designed to allow a Market Maker to
maintain a continuous two-sided quotation at a displayed price that
is compliant with the quotation requirements for Market Makers set
forth in Equity 2, Section 5(a)(2). The displayed price of the
Market Maker Peg Order is set with reference to a ``Reference
Price'' in order to keep the displayed price of the Market Maker Peg
Order within a bounded price range. The Reference Price for a Market
Maker Peg Order to buy (sell) is the then-current National Best Bid
(National Best Offer), or if no such National Best Bid or National
Best Offer, the most recent reported last-sale eligible trade from
the responsible single plan processor for that day, or if none, the
previous closing price of the security as adjusted to reflect any
corporate actions (e.g., dividends or stock splits) in the security.
---------------------------------------------------------------------------
Second Rule Change
The second proposal would amend Equity 4, Rule 3301B(h), to correct
its description of behavior of the Non-Displayed portion of Orders with
the Reserve Attribute.\6\ Rule 3301B(h) provides as follows, in
pertinent part:
---------------------------------------------------------------------------
\6\ ``Reserve Size'' is, in part, an Order Attribute that
``permits a Participant to stipulate that an Order Type that is
displayed may have its displayed size replenished from additional
non-displayed size.'' Rule 3301B(h). The Rule also states that
Reserve ``is not available for Orders that are not displayed;
provided, however, that if a Participant enters Reserve Size for a
Non-Displayed Order with a Time-in-Force of IOC, the full size of
the Order, including Reserve Size, will be processed as a Non-
Displayed Order.'' Id. In addition to the change proposed above, the
Exchange proposes to eliminate from the immediately preceding
language ``with a Time-in-Force of IOC'' because the Exchange does
not assess a reason to include this qualifier. The statement that a
Non-Displayed Order with Reserve will be entirely non-displayed is
true even as to Non-Displayed Orders with other TIFs.
In all cases, if the remaining size of the Non-Displayed Order
is less than the fixed or random amount stipulated by the
Participant, the full remaining size of the Non-Displayed Order will
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be displayed and the Non-Displayed Order will be removed.
As stated, this Rule requires that the entire Non-Displayed portion
of a Reserve Order will become Displayed the moment the size of the
Non-Displayed portion drops below an amount that a participant
designates or has directed the System to randomly designate (the ``Max
Floor''). In conducting a test of System behavior, however, the
Exchange observed that the System does not, in fact, operate in this
manner. Instead, the System maintains the Non-Displayed portion of a
Reserve Order as such when the size of that Non-Displayed Portion drops
below the Max Floor. Rather than correct the current System behavior to
match the Rule, the Exchange determined that users of Reserve Orders
prefer the current System behavior because it is true to the underlying
intent of Reserve functionality, which is to help limit the price
impacts of trading large quantities of shares by displaying only small
portions of such shares at a given time, while hiding the rest in
reserve. Thus, the Exchange proposes to address the inconsistency
between the Rule text and the behavior of the System by deleting the
aforementioned language from Rule 3301B(h). Going forward, the System
will not convert to a Displayed Order the Non-Displayed remainder of a
Reserve Order that falls below the Max Floor, and the System will not
remove it.
2. Statutory Basis
The Exchange believes that its proposals are consistent with
section 6(b) of the Act,\7\ in general, and further the objectives of
section 6(b)(5) of the Act,\8\ in particular, in that they are designed
to promote just and equitable principles of trade, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system, and, in general to protect investors and the
public interest.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
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It is consistent with the Act to amend the Exchange's Rules to
address inconsistencies between the Rule text and observed System
behavior, including by adapting the Rule text to codify observed System
behavior, where the observed behavior is more consistent with the
underlying purpose of an Order Attribute than is the Rule text
(maintaining the Non-Displayed status of a reserve portion of a Reserve
Order that drops below the Max Floor) and where System behavior
reflects a nuance not contemplated by the existing Rules (clarifying
that the prohibition against repricing Market Maker Peg Orders that
have prices equal to or better than the NBBO only applies to round lot
Market Maker Peg Orders, and not to odd lots).
Finally, it is consistent with the Act to amend Rule 3301B(h) to
delete qualifying language which erroneously suggests that Non-
Displayed Orders with Reserve are only non-displayed when such Orders
have a TIF of IOC. Investors and the public have an interest in the
Exchange maintaining a Rulebook that is accurate.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule changes will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The proposals merely address
inconsistencies between Rule text and System behavior. The Exchange
neither intends nor perceives that these rule changes will have any
impact on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to section
19(b)(3)(A)(iii) of the Act \9\ and Rule 19b-4(f)(6) thereunder.\10\
Because the proposed rule change does not: (i) significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to section 19(b)(3)(A) of the Act \11\ and Rule 19b-
4(f)(6)(iii) thereunder.\12\
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\9\ 15 U.S.C. 78s(b)(3)(A)(iii).
\10\ 17 CFR 240.19b-4(f)(6).
\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and 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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At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the
[[Page 64506]]
public interest, for the protection of investors, or otherwise in
furtherance of the purposes of the Act. If the Commission takes such
action, the Commission shall institute proceedings under section
19(b)(2)(B) \13\ of the Act to determine whether the proposed rule
change should be approved or disapproved.
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\13\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
file number SR-Phlx-2023-43 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-2023-43. 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
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-Phlx-2023-43 and should be
submitted on or before October 10, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-20169 Filed 9-18-23; 8:45 am]
BILLING CODE 8011-01-P
