[Federal Register Volume 86, Number 12 (Thursday, January 21, 2021)]
[Notices]
[Pages 6389-6393]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-01129]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-90909; File No. SR-Phlx-2021-02]
Self-Regulatory Organizations; Nasdaq Phlx LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Modify Phlx
Options 8, Section 28, ``Responsibilities of Floor Brokers'' and
Section 30, ``Crossing, Facilitation and Solicited Orders''
January 13, 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 4, 2021, Nasdaq Phlx LLC (``Phlx'' or ``Exchange'')
filed with the Securities and Exchange Commission (``SEC'' or
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the Exchange. The Commission
is publishing this notice to solicit comments on the proposed rule
change from interested persons.
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\1\ 15 U.S.C.78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to modify Phlx Options 8, Section 28,
``Responsibilities of Floor Brokers'' and Section 30, ``Crossing,
Facilitation and Solicited Orders.''
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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
Phlx proposes to amend its Trading Floor rules at Options 8,
Section 28, ``Responsibilities of Floor Brokers'' and Section 30,
``Crossing, Facilitation and Solicited Orders'' to permit Floor Brokers
\3\ to utilize the Options Floor Based Management System (``FBMS''),\4\
remotely,\5\ to enter certain orders that do not require exposure in
open outcry. This proposal is intended to provide greater accessibility
to Floor Brokers for the portion of their business which does not
require the physical infrastructure afforded by the Trading Floor and
allow member organizations to more efficiently staff their operations.
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\3\ The term ``Floor Broker'' means an individual who is
registered with the Exchange for the purpose, while on the Options
Floor, of accepting and handling options orders. See Options 8,
Section 2(2).
\4\ FBMS, an order management system, is the gateway for the
electronic execution of equity, equity index and U.S. dollar-settled
foreign currency option orders represented by Floor Brokers on the
Exchange's Options Floor. Floor Brokers contemporaneously upon
receipt of an order and prior to the representation of such an order
in the trading crowd, record all options orders represented by such
Floor Broker to FBMS, which creates an electronic audit trail. The
execution of orders to Phlx's electronic trading system also occurs
via FBMS. The FBMS application is available on hand-held tablets and
stationary desktops.
\5\ Utilizing FBMS while not physically present on the Trading
Floor would be considered remote access.
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Background
Today, Phlx Rules provide a Business Continuity and Disaster
Recovery Plan for its Trading Floor (``BCP'') which is
[[Page 6390]]
described within Options 8, Section 26(g).\6\ The Exchange may activate
its business continuity and disaster recovery plans to maintain fair
and orderly markets in the event of a System failure, disaster, or
other unusual circumstance that may threaten the ability to conduct
business on the Exchange. On March 17, 2019,\7\ Phlx suspended open
outcry trading as a result of precautions taken with respect to COVID-
19. The Trading Floor re-opened on June 3, 2020.\8\ During that period
from March 17, 2019 to June 3, 2020, open outcry trading was
unavailable.
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\6\ Options 8, Section 26(g) provides:
(1) Loss of Trading Floor. If the physical location designated
as the ``Trading Floor'' becomes unavailable, Phlx will enact its
Business Continuity Plan and designate the Philadelphia Navy Yard as
its ``Back-Up Trading Floor.''
(2) Back-up Trading Floor Unavailable. In the event that the
Back-Up Trading Floor becomes inoperable, the Exchange will only
operate its electronic market and will not operate a Trading Floor.
The Exchange will operate only its electronic market until the
Exchange's Trading Floor facility is operational. Open outcry
trading will not be available in the interim.
(3) Other Back-Up Trading Arrangements. This Rule does not
preclude the Exchange from conducting business, in the event the
Trading Floor and Back-Up Trading Floor are rendered inoperable,
pursuant to Options 4, Section 10.
\7\ See Options Trader Alert #2020-07.
\8\ See Options Trader Alert #2020-13.
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At the time of the Phlx Trading Floor closure in March 2020, the
Exchange permitted Floor Brokers, who otherwise had no means of trading
on Phlx in an electronic environment, to utilize FBMS remotely, solely
for the purpose of submitting limit orders to the electronic limit
order book pursuant to Options 8, Section 28(g), or submitting a Floor
Qualified Contingent Cross Order to the System pursuant to Options 8,
Section 30(e).\9\ Submitting a limit order to the electronic limit
order book does not require exposure of that order in open outcry
trading as the order is immediately exposed on the electronic limit
order book. Similarly, a Floor Qualified Contingent Cross Order
submitted to the System does not require exposure in open outcry as
this order type is immediately executed upon entry to the System,
provided the order complies with the provisions of Options 8, Section
30(e) and therefore a Floor Broker was not required to be present on
the Trading Floor to transact these order types. Floor Brokers were not
permitted to transact other order types within Options 3, Section 32
through FBMS during the floor closure. Phlx Surveillance staff
surveilled Floor Qualified Contingent Cross Orders submitted through
FBMS in real-time. Electronic limit orders must comply with automated
System entry checks for compliance with Exchange rules.
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\9\ See Options Trader Alert #2020-8.
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When the Trading Floor reopened on June 3, 2020, the Exchange
permitted each Trading Floor member organization to be represented on
the Trading Floor. However, due to the social distancing measures that
were put in place to comply with Commonwealth of Pennsylvania health
standards as well as Nasdaq's safety measures designed to prevent the
spread of COVID-19, not all members and employees associated with a
Phlx member organization were able to return to the Trading Floor.
Floor Brokers were permitted to continue remotely submitting the
aforementioned orders through FBMS, due to the Exchange's inability to
allow all Floor Members access to the physical Trading Floor.
Proposal
At this time, the Exchange proposes to amend Options 8, Section
28(g) and Options 8, Section 30(e) to continue to allow Floor Brokers
the ability to submit limit orders to the electronic limit order book
and Floor Qualified Contingent Cross Orders to the System via FBMS
remotely, notwithstanding the existence of BCP measures. Floor Brokers
may continue to submit limit orders to the electronic limit order book
and Floor Qualified Contingent Cross Orders to the System while on the
Trading Floor.
Prior to permitting Floor Brokers to access FBMS remotely for the
limited purpose of submitting limit orders to the electronic limit
order book and Floor Qualified Contingent Cross Orders to the System,
the Exchange permitted Floor Brokers to submit limit orders to the
electronic limit order book and Floor Qualified Contingent Cross Orders
to the System utilizing FBMS while on the Trading Floor.\10\ Phlx
Options 8 Trading Rules apply to members and member organizations
engaging in to transact options transactions while physically located
on the Trading Floor, including trading crowds.\11\ The Options 8
Trading Rules do not permit options transactions to be submitted to the
Trading Floor through FBMS remotely by Floor Brokers.\12\ Today, Phlx
utilizes its Business Continuity Plan to permit Floor Brokers to access
the Exchange's System remotely, through FBMS, for the limited purpose
of submitting limit orders to the electronic limit order book and Floor
Qualified Contingent Cross Orders to the System.
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\10\ See Options 8, Section 28(g) and 30(e).
\11\ See Options 8, Section 1(a).
\12\ See note 3 above, by definition Floor Brokers accept and
handle options orders while on the Options Floor.
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Due to the social distancing measures that were put in place to
comply with Commonwealth of Pennsylvania health standards as well as
Nasdaq's safety measures designed to prevent the spread of COVID-19,
not all members and employees associated with a Phlx member
organization were able to return to the Trading Floor. This proposal
would create an exception to the Options 8 Rules for a limited purpose.
Today, Options 8, Section 28(g) permits a Floor Broker who wishes
to place a limit order on the electronic limit order book to submit
such a limit order electronically through FBMS. This capability exists
to enable Floor Brokers to access electronic liquidity and/or to clear
priority orders on the limit order book prior to transacting an order
in the trading crowd through FBMS.\13\ Placing limit orders on the
order book does not require exposure in open outcry. The Exchange
desires to permit Floor Brokers, by rule, the ability to continue to
remotely submit limit orders to the electronic limit order book on a
permanent basis. This would specifically allow Floor Brokers the
ability to clear resting Customers orders from the limit order book for
their customers in the event that a Customer order had priority on the
limit order book that would otherwise prevent a Floor Qualified
Contingent Cross Order from being entered in compliance with Options 8,
Section 30(e).
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\13\ See Securities Exchange Act Release No. 68960 (February 20,
2013), 78 FR 13132, 13134 (February 26, 2013) (SR-Phlx-2013-09)
(Notice of Filing of Proposed Rule Change To Enhance the
Functionality Offered on Its Options Floor Broker Management System
(``FBMS'') by, Among Other Things, Automating Functions Currently
Performed by Floor Brokers). This filing provided the following
explanation, ``For example, if a Floor Broker enters a two-sided
order through the new FBMS and there is an order on the book at a
price that prevents the Floor Broker's order from executing, FBMS
will indicate to the Floor Broker how many contracts need to be
satisfied before the Floor Broker's order can execute at the agreed-
upon price. If the Floor Broker agrees to satisfy that order,
consistent with the order placed in his care, he can cause FBMS to
send a portion of one of his orders to Phlx XL to trade against the
order on the book, thereby clearing it and permitting the remainder
of the Floor Broker's order to trade. This functionality is optional
in the sense that the Floor Broker can decide not to trade against
the book, consistent with order instructions he has been given, and
therefore not execute his two-sided order at that particular
price.'' Phlx XL refers to the electronic order book.
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Today, Options 8, Section 30(e) permits Floor Qualified Contingent
Cross Orders to be submitted to the System by Floor Brokers on the
Floor via FBMS. These orders are not required to be exposed in open
outcry. In 2011, Phlx established a Floor Qualified
[[Page 6391]]
Contingent Cross Order.\14\ The proposal specifically provided that ``.
. . PHLX proposes to amend Rule 1064 to provide that a PHLX member
effectuating a trade on the floor of the Exchange pursuant to the
Regulation NMS Qualified Contingent Trade Exemption to Rule 611(a)
(``QCT Exemption'') can cross the options legs of the trade on PHLX as
a Floor QCC Order immediately upon entry and without order exposure if
no Customer Orders exist on the Exchange's order book at the same
price. Floor QCC Orders will be electronically entered by a Floor
Broker on the floor of the Exchange using the Floor Broker Management
System and the execution will then be executed electronically. Only
Floor Brokers will be permitted to enter Floor QCC Orders.'' \15\ The
proposal specifically provided for a Floor Qualified Contingent Cross
Order to be entered by Floor Brokers through FBMS while on the Trading
Floor without order exposure. The filing further provides that ``. . .
it would be incorrect to say that the Floor QCC Order differs from the
electronic QCC Order due to the Options Floor Broker's presence on the
Floor.'' \16\
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\14\ See Securities Exchange Act Release No. 64415 (May 5,
2011), 76 FR 27732 (May 12, 2011) (SR-Phlx-2011-56) (Notice of
Filing of Proposed Rule Change To Establish a Qualified Contingent
Cross Order for Execution on the Floor of the Exchange).
\15\ Id at 27732 and 27733.
\16\ Id at 27733.
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The Exchange's proposal seeks to continue to permit Floor Brokers
to enter both limit orders to the electronic limit order book and Floor
Qualified Contingent Cross Orders to the System through FBMS, albeit
remotely, without amending the manner in which these orders, which
require no order exposure, are handled by FBMS or the System.
The Exchange believes that permitting Floor Brokers the ability to
utilize FBMS remotely, for the limited purposes of submitting limit
orders to the electronic limit order book and Floor Qualified
Contingent Cross Order to the System, would allow Floor Brokers to
conduct the portion of their business which does not require the
infrastructure afforded by the Trading Floor remotely and, therefore,
allow member organizations flexibility to more efficiently staff their
operations. The ability to service certain orders, such as limit orders
and Floor Qualified Contingent Cross Orders, which do not require open
outcry exposure, is a relevant part of a Floor Broker's business. The
Exchange is proposing to expand the ability of a member organization to
conduct this limited portion of the Floor Broker business model to
assist firms in being able to continuously operate this portion of
their business, notwithstanding any closures or halts of the Trading
Floor. Every Floor Broker must be registered with the Exchange pursuant
to Options 8, Section 6 and would be assessed applicable fees provided
for within Options 7. The Exchange notes that this proposal does not
amend the manner in which fees or other pricing incentives, such as
caps, apply to Floor Brokers. Any transaction originating from open
outcry on the Trading Floor is considered a floor transaction. With
offering FBMS remotely, the Exchange has not amended the manner in
which fees are assessed or rebates are paid for purposes of Options 7
pricing to Floor Brokers. A limit order entered to the limit order book
via FBMS was subject to electronic fees and rebates prior to the
introduction of remote FBMS and that remains the case with the
introduction of remote FBMS. These transactions are submitted to the
electronic order book directly and are assessed the same fees and
rebates as other limit orders submitted to the electronic order book.
Also, the Exchange does not distinguish the manner in which it assesses
pricing for Floor Qualified Contingent Cross Orders or electronic
Qualified Contingent Cross Orders. The pricing is the same regardless
of the manner in which the Qualified Contingent Cross Order was
submitted. The Exchange proposes to add a sentence to Options 7,
Section 1 to define a floor transaction to add clarity to the manner in
which floor based pricing is assessed. The Exchange proposes to add the
following definition to Options 7, Section 1, ``A `floor transaction'
is a transaction that is effected in open outcry on the Exchange's
Trading Floor.''
Finally, the Exchange represents that it has the proper security
infrastructure in place to offer FBMS remotely and securely to Floor
Brokers.
Technical Amendment
The Exchange proposes a technical amendment to Options 8, Section
1(a) to add the word ``System'' to the end of ``Options Floor Based
Management'' within the first sentence to conform the manner in which
the Exchange utilizes this term within Options 8.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\17\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\18\ in particular, in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest.
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\17\ 15 U.S.C. 78f(b).
\18\ 15 U.S.C. 78f(b)(5).
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The Exchange's proposal to permit Floor Brokers the ability to
utilize FBMS remotely, for the limited purposes of submitting limit
orders to the electronic limit order book and Floor Qualified
Contingent Cross Order to the System, is consistent with the Act. This
proposal would allow member organizations to utilize their Floor
Brokers, who may be located off the Trading Floor to conduct certain
aspects of their business that do not require open outcry, remotely.
Every Floor Broker would continue to be required to be registered with
the Exchange pursuant to Options 8, Section 6 and would be assessed
applicable fees provided for within Options 7.
Prior to permitting Floor Brokers to access FBMS remotely for the
limited purpose of submitting limit orders to the electronic limit
order book and Floor Qualified Contingent Cross Orders to the System,
the Exchange permitted Floor Brokers to submit limit orders to the
electronic limit order book and Floor Qualified Contingent Cross Order
to the System utilizing FBMS while on the Trading Floor.\19\ Phlx
Options 8 Trading Rules require members and member organizations to
transact options transactions while physically located on the Trading
Floor, including trading crowds.\20\ The Options 8 Trading Rules do not
permit options transactions to be submitted to the Trading Floor
through FBMS remotely by Floor Brokers.\21\ This proposal would create
an exception to the Options 8 Rules to allow Floor Brokers to submit
limit orders and Floor Qualified Contingent Cross Orders remotely
through FBMS.
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\19\ See Options 8, Section 28(g) and 30(e).
\20\ See Options 8, Section 1(a).
\21\ See note 3 above, by definition Floor Brokers accept and
handle options orders while on the Options Floor.
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Today, Options 8, Section 28(g) permits a Floor Broker who wishes
to place a limit order on the electronic limit order book to submit
such a limit order electronically through the FBMS. This capability
exists to enable Floor Brokers to access electronic liquidity and/or to
clear a priority orders on the limit order book prior to transacting an
order in the trading crowd with the help of the FBMS.\22\ Placing limit
orders on
[[Page 6392]]
the Order Book does not require exposure in open outcry. The Exchange
desires to continue to grant this capability remotely to allow Floor
Brokers the ability to continue to clear Customer orders on the limit
order book for their customers in the event that a Customer order had
priority on the limit order book and prevents a Floor Qualified
Contingent Cross Order from being entered.
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\22\ See Securities Exchange Act Release No. 68960 (February 20,
2013), 78 FR 13132, 13134 (February 26, 2013) (SR-Phlx-2013-09)
(Notice of Filing of Proposed Rule Change To Enhance the
Functionality Offered on Its Options Floor Broker Management System
(``FBMS'') by, Among Other Things, Automating Functions Currently
Performed by Floor Brokers). This filing provided, ``For example, if
a Floor Broker enters a two-sided order through the new FBMS and
there is an order on the book at a price that prevents the Floor
Broker's order from executing, FBMS will indicate to the Floor
Broker how many contracts need to be satisfied before the Floor
Broker's order can execute at the agreed-upon price. If the Floor
Broker agrees to satisfy that order, consistent with the order
placed in his care, he can cause FBMS to send a portion of one of
his orders to Phlx XL to trade against the order on the book,
thereby clearing it and permitting the remainder of the Floor
Broker's order to trade. This functionality is optional in the sense
that the Floor Broker can decide not to trade against the book,
consistent with order instructions he has been given, and therefore
not execute his two-sided order at that particular price.''
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Today, Options 8, Section 30(e) permits Floor Qualified Contingent
Cross Orders to be submitted to the System by Floor Brokers on the
Floor via FBMS. These orders are not required to be exposed in open
outcry. In 2011, Phlx established a Floor Qualified Contingent Cross
Order.\23\ The proposal specifically provided for a Floor Qualified
Contingent Cross Order to be entered by Floor Brokers through FBMS
while on the Trading Floor without order exposure.
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\23\ See Securities Exchange Act Release No. 64415 (May 5,
2011), 76 FR 27732 (May 12, 2011) (SR-Phlx-2011-56) (Notice of
Filing of Proposed Rule Change To Establish a Qualified Contingent
Cross Order for Execution on the Floor of the Exchange).
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The Exchange's proposal seeks to continue to permit Floor Brokers
to enter both limit orders to the electronic limit order book and Floor
Qualified Contingent Cross Orders to the System through FBMS, albeit
remotely, without amending the manner in which these orders, which
require no order exposure, are handled by FBMS or the System.
Floor Brokers are an essential part of the Trading Floor and their
business is largely dependent on access to the physical Trading Floor
and the ability of market participants to expose orders in open outcry.
Floor Brokers service multiple customer segments and several subsets of
order flow. Their largest customers are bank trading desks, inter-
dealer brokerage desks, liquidity providers, and hedge funds. Each of
these client types direct certain orders to Floor Brokers. Banks and
inter-dealers primarily utilize Floor Brokers for manual handling of
stock-tied Floor Qualified Contingent Cross Orders, complicated order
structures with abnormal ratios (beyond 3:1 allowable electronically)
and ``cash spreads,'' where a notional trade value is negotiated and
relayed to the trading crowd for participation. Banks also look to
facilitate larger bank customer orders that exhibit considerable real-
time risk. While Floor Brokers represent the bank side of these
transactions, Floor Market Makers provide additional liquidity and
efficiently perform the price discovery process through manual handling
and exposure. Inter-dealers will also utilize Floor Brokers for price
discovery and additional sourcing of liquidity for larger orders where
they need assistance. Finally, complicated strategy transactions are
often represented by Floor Brokers. End-users are more inclined to use
their services due to their expertise in order handling and knowledge
of the trading ecosystem.
Notwithstanding the importance of Floor Brokers on the Exchange's
Trading Floor, the ability to service other orders, such as limit
orders and Floor Qualified Contingent Cross Orders, which do not
require open outcry exposure, is a relevant part of a Floor Broker's
business. The Exchange is proposing to expand the ability of a member
organization to conduct this limited portion of the Floor Broker
business model to assist firms in being able to continuously operate
this portion of their business, notwithstanding any closures or halts
of the Trading Floor.
The Exchange notes that a closure of the Trading Floor renders the
Floor Broker business, which is largely reliant on open outcry trading,
inoperable. The Exchange believes that this proposal is designed to
protect investors and the public interest as a form of risk mitigation
as the proposal would allow the portion of the Floor Broker business,
which is not dependent on open outcry, to continue regardless of the
status of the Trading Floor. Further, the proposal would allow member
organizations to more efficiently staff their operations. For example,
member organizations may utilize staff in other locations as the remote
access removes the dependency on physical presence on the Trading
Floor.
This proposal does not amend the manner in which fees or other
pricing incentives, such as caps, apply to Floor Brokers. Any
transaction originating from open outcry on the Trading Floor is
considered a floor transaction. With offering FBMS remotely, the
Exchange has not amended the manner in which fees are assessed or
rebates are paid for purposes of Options 7 pricing to Floor Brokers. A
limit order entered to the limit order book via FBMS was subject to
electronic fees and rebates prior to the introduction of remote FBMS
and that remains the case with the introduction of remote FBMS. These
transactions are submitted to the electronic order book directly and
are assessed the same fees and rebates as other limit orders submitted
to the electronic order book. Also, the Exchange does not distinguish
the manner in which it assesses pricing for Floor Qualified Contingent
Cross Orders or electronic Qualified Contingent Cross Orders. The
pricing is the same regardless of the manner in which the Qualified
Contingent Cross Order was submitted. Phlx Surveillance staff
surveilled Floor Qualified Contingent Cross Orders submitted through
FBMS in real-time. Electronic limit orders must comply with automated
System entry checks for compliance with Exchange rules. Finally, the
Exchange represents that it has the proper security infrastructure in
place to offer FBMS remotely and securely to Floor Brokers.
Technical Amendment
The Exchange's proposal to amend Options 8, Section 1(a) to add the
word ``System'' to the end of ``Options Floor Based Management'' within
the first sentence is consistent with the Act as this term conforms the
manner in which the Exchange utilizes the term ``Options Floor Based
Management System'' throughout Options 8.
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's proposal to permit Floor Brokers the ability to
utilize FBMS remotely, for the limited purposes of submitting limit
orders to the electronic limit order book and Floor Qualified
Contingent Cross Order to the System, does not impose an undue burden
on competition. A Floor Broker, unlike a Market Maker, is mostly
dependent on the infrastructure provided by a Trading Floor in order to
operate its business model. Market Makers on the other hand may
transact their business in either of the two models provide by Phlx,
the Trading Floor or electronic model. Market Makers have the
infrastructure to continue to conduct their business, even in the event
of the closure of the Trading Floor, while Floor Brokers are mostly
reliant on open
[[Page 6393]]
outcry trading and this portion of their business is inoperable if open
outcry is unavailable.
The Exchange's proposal seeks to provide greater accessibility to
Floor Brokers for the portion of their business which does not require
the infrastructure afforded by the Trading Floor while not amending the
manner in which those orders are handled by either FBMS or the System.
This proposal is competitive in that it allows Floor Brokers the
ability to participate more continuously and efficiently on Phlx. All
Floor Brokers have access to FBMS and therefore would be able to
remotely submit limit orders to the electronic limit order book and
Floor Qualified Contingent Cross Orders to the System as well as
continue to submit these types of orders while on the Trading Floor.
Further, the Exchange believes that this proposal, which would allow
member organizations to utilize their Floor Brokers, who may be located
in other locations, to more efficiently staff their operations and also
to conduct their business, even in the event of a closure of the
Trading Floor.
Finally, this proposal does not amend the manner in which fees or
other pricing incentives, such as caps, apply to Floor Brokers.
Technical Amendment
The Exchange's proposal to amend Options 8, Section 1(a) to add the
word ``System'' to the end of ``Options Floor Based Management'' within
the first sentence does not impose an undue burden on competition as
this term conforms the manner in which the Exchange utilizes the term
``Options Floor Based Management System'' throughout Options 8.
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 \24\ and Rule 19b-4(f)(6) thereunder.\25\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.\26\
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\24\ 15 U.S.C. 78s(b)(3)(A)(iii).
\25\ 17 CFR 240.19b-4(f)(6).
\26\ 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 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 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) \27\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\27\ 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 (http://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-Phlx-2021-02 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-2021-02. 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 (http://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-2021-02 and should be submitted on
or before February 11, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\28\
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\28\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-01129 Filed 1-19-21; 8:45 am]
BILLING CODE 8011-01-P