Federal Register / Vol. 83, No. 128 / Tuesday, July 3, 2018 / Notices 31201 

36 17 CFR 200.30–3(a)(12) and (59). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See CBOE Rule 6.74(d). 

4See Securities Exchange Act Release No. 42835 

(May 26, 2000), 65 FR 35683 (June 5, 2000) (SR– 

CBOE–99–10) (Order Approving Proposed Rule 

Change and Notice of Filing and Order Granting 

Accelerated Approval to Amendment Nos. 1, 2, and 

3 to the Proposed Rule Change by the Chicago 

Board Options Exchange, Inc., Relating to 

Participation Rights for Firms Crossing Orders.) 

5 Id. 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is: (i) Necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) otherwise in 

furtherance of the purposes of the Act. 

If the Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

CboeBZX–2018–042 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–CboeBZX–2018–042. 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–CboeBZX–2018–042, and 

should be submitted on or before July 

24, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.36

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–14297 Filed 7–2–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83547; File No. SR–Phlx– 

2018–48] 

Self-Regulatory Organizations; Nasdaq 

PHLX LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend the Firm 

Participation Guarantee for a Floor 

Broker 

June 28, 2018. 

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 June 14, 

2018, 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Commentary .02 to Rule 1064. 

The text of the proposed rule change 

is available on the Exchange’s website at 

http://nasdaqphlx.cchwallstreet.com/, 

at the principal office of the Exchange, 

and at the Commission’s Public 

Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

Rule 1064 entitled ‘‘Crossing, 

Facilitation and Solicited Orders.’’ 

Specifically, the Exchange proposes to 

amend Commentary .02(ii) to Rule 1064 

to amend the firm participation 

guarantee for a Floor Broker. 

Today, Phlx offers certain firm 

participation guarantees to a Floor 

Broker who holds an equity, index or 

U.S. dollar-settled foreign currency 

option order of the eligible order size or 

greater (‘‘original order’’), the Floor 

Broker is entitled to cross a certain 

percentage of the original order with 

other orders that he is holding or in the 

case of a public customer order, with a 

facilitation order of the originating firm 

(i.e., the firm from which the original 

customer order originated). Today, the 

Exchange may determine, on an option 

by option basis, the eligible size for an 

order that may be transacted pursuant to 

this Commentary, however, the eligible 

order size may not be less than 500 

contracts. Orders for less than 500 

contracts may be crossed pursuant to 

Rule 1064 but are not subject to 

Commentary .02, subsection (iii) to Rule 

1064 pertaining to participation 

guarantees. Similar to Cboe Exchange, 

Inc. (‘‘CBOE’’) the Exchange proposes to 

lower the eligible minimum order size 

from 500 to not less than 50 contracts.3

The Commission noted in an approval 

of the reduction from 500 to 50 for 

CBOE that it had already approved the 

facilitation mechanism of ISE, which 

guarantees 40% of orders to facilitating 

firms for order sizes of 50 or more 

contracts.4 In that approval order the 

Exchange approved the reduction in the 

size requirement, from 500 to 50 

contracts, because the CBOE proposal 

raised no new regulatory issues.5 The 

Commission noted that it will benefit 

options market participants by allowing 


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31202 Federal Register / Vol. 83, No. 128 / Tuesday, July 3, 2018 / Notices 

6 Id. 

7See note 4 above. 

8 15 U.S.C. 78f(b). 

9 15 U.S.C. 78f(b)(5). 

10See note 4 above. 

11See Securities Exchange Act Release No. 47819 

(May 8, 2003), 68 FR 25924 (May 14, 2003) (SR– 

Phlx–2002–17) (Approval Order). 

12See note 4 above. 

13 15 U.S.C. 78s(b)(3)(A)(iii). 

14 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. 

15 17 CFR 240.19b–4(f)(6). 

16 17 CFR 240.19b–4(f)(6)(iii). 

for substantially consistent treatment of 

crossing mechanisms under the rules of 

the ISE and the CBOE, and will allow 

the CBOE to compete without 

disadvantage for facilitation orders.6

The Exchange notes that, today, Rule 

1064, Commentary .02 provides that if 

the same member organization is the 

originating firm and also the specialist 

for the particular class of options to 

which the order relates, then the 

specialist is not entitled to any 

Enhanced Specialist Participation with 

respect to the particular cross 

transaction. The Exchange notes that 

this limitation is not being amended 

with this proposal. The specialist would 

not be able to obtain an allocation in 

excess of the 40% allocation. 

The Exchange believes that this 

reduction from 500 to 50 contracts for 

the firm participation guarantee will 

continue to incentivize floor brokers to 

execute crossing orders on Phlx. The 

Exchange continues to reward the 

market participant that brought together 

market participants and executed orders 

on its trading floor. Further, the reduced 

contract size will benefit options market 

participants by allowing for 

substantially consistent treatment of 

crossing mechanisms with competing 

options venues. As noted in the CBOE 

proposal, today other competing 

mechanisms offer guarantees of 40% of 

orders to facilitating firms for order 

sizes of 50 or more contracts.7 The 

Exchange believes that the ability to 

obtain a 40% guarantee on smaller sized 

orders will incentivize market 

participants to competitively price 

trades in order to execute a greater 

number of smaller orders. The Exchange 

believes that the incentive encourages 

competition on Phlx and in turn 

benefits market participants in terms of 

competitive pricing for those orders. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,8 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,9

in particular, in that it is designed to 

promote just and equitable principles of 

trade and to protect investors and the 

public interest by amending the eligible 

minimum order size within 

Commentary .02(ii) of Rule 1064, from 

500 to not less than 50 contracts, to 

promote competition. 

The Exchange’s proposal to lower the 

current eligible minimum order size in 

Commentary .02(ii) of Rule 1064 from 

500 to not less than 50 contracts is 

consistent with the Act as it should 

promote just and equitable principles of 

trade by allowing for substantially 

consistent treatment of crossing 

mechanisms with CBOE. Phlx market 

participants would be permitted to 

compete without disadvantage for 

facilitation orders with CBOE which 

today has the eligibility size proposed 

by Phlx.10

The Exchange believes that this 

reduction from 500 to 50 contracts for 

the firm participation guarantee will 

continue to incentivize floor brokers to 

execute crossing orders on Phlx. The 

Exchange continues to reward the 

market participant that brought together 

market participants and executed orders 

on its trading floor. Further, the reduced 

contract size will benefit options market 

participants by allowing for 

substantially consistent treatment of 

crossing mechanisms with competing 

options venues. 

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 

amendment to Commentary .02(ii) of 

Rule 1064 does not impose an undue 

burden on intra-market competition 

because the proposed rule change will 

apply uniformly to all market 

participants. The Exchange currently 

has a competitive market for orders of 

500 contracts or more, notwithstanding 

the current 40% firm participation 

guarantee for these orders, and therefore 

believes that extending this treatment to 

orders of 50 contracts or more (similar 

to other markets) will not have a 

significant impact on competition. The 

firm participation guarantee is designed 

as an incentive to market participants 

that bring order flow to the Phlx floor 

and is similar to allocation entitlements 

that exist on other floor based and 

electronic markets. The Commission has 

consistently found that rules entitling a 

market participant or participants up to 

40% of an order are not inconsistent 

with the statutory standards of 

competition and free and open markets, 

including in approving the Exchange’s 

own firm participation guarantee.11 The 

Exchange believes that adopting a lower 

size threshold for this guarantee will 

benefit Phlx market participants by 

encouraging greater order flow and 

therefore increased opportunities for all 

market participants to trade, while 

ensuring that the trading crowd can still 

compete for a large portion of such 

orders. Furthermore, the proposal does 

not create an undue burden on intermarket competition because market 

participants would be permitted to 

compete without disadvantage for 

facilitation orders with CBOE. As noted 

in the CBOE proposal, today other 

competing mechanisms offer guarantees 

of 40% of orders to facilitating firms for 

order sizes of 50 or more contracts.12

The Exchange believes the guarantee 

may incentivize an increase in the flow 

of smaller orders to the trading floor 

because it will encourage market 

participants to offer competitive pricing 

in order to interact with that order flow. 

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)(iii) of the Act 13 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.14

A proposed rule change filed under 

Rule 19b–4(f)(6) 15 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b4(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 requests that the Commission 

waive the 30-day operative delay so that 

the proposed rule changes may become 

operative immediately upon filing. The 

Exchange believes that waiver of the 

operative delay would allow the 

Exchange to more effectively compete 


sradovich on DSK3GMQ082PROD with NOTICES
Federal Register / Vol. 83, No. 128 / Tuesday, July 3, 2018 / Notices 31203 

17See supra note 4. 

18See Securities Exchange Act Release No. 82456 

(January, 8, 2008), 83 FR 1651 (January 12, 2018) 

(SR–BOX–2017–33) (Approval Order). 

19For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 

20 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 73702 

(November 28, 2014), 79 FR 72049 (December 4, 

2014) (‘‘RPI Approval Order’’) (SR–BX–2014–048). 

4See id. 

with CBOE by offering a firm 

participation allocation with the same 

eligibility size that CBOE currently 

offers. Additionally, the Commission 

notes that the proposed rule change is 

based on the current rules of CBOE 17

and that it recently approved a similar 

rule change for the BOX Options 

Exchange LLC.18 As such, the 

Commission believes that waiving 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 

proposed rule change operative upon 

filing.19

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: (i) Necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) otherwise in 

furtherance of the purposes of the Act. 

If the Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

Phlx–2018–48 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–2018–48. 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–2018–48 and should 

be submitted on or before July 24, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–14301 Filed 7–2–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83539; File No. SR–BX– 

2018–026] 

Self-Regulatory Organizations; Nasdaq 

BX, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Extend the Pilot 

Period for the Retail Price 

Improvement Program Until December 

31, 2018 

June 28, 2018. 

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 June 21, 

2018, Nasdaq BX, Inc. (‘‘BX’’ 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to extend the 

pilot period for the Exchange’s Retail 

Price Improvement (‘‘RPI’’) Program (the 

‘‘Program’’), which is set to expire on 

June 30, 2018, for an additional period, 

to expire on December 31, 2018. 

The Exchange has designated July 1, 

2018 as the date the proposed rule 

change becomes effective. 

The text of the proposed rule change 

is available on the Exchange’s website at 

http://nasdaqbx.cchwallstreet.com/, at 

the principal office of the Exchange, and 

at the Commission’s Public Reference 

Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of this filing is to extend 

the pilot period of the RPI Program,3

currently scheduled to expire on June 

30, 2018, for an additional period, to 

expire on December 31, 2018. 

Background 

In November 2014, the Commission 

approved the RPI Program on a pilot 

basis.4 The Program is designed to 

attract retail order flow to the Exchange, 

and allow such order flow to receive 

potential price improvement. The 

Program is currently limited to trades 

occurring at prices equal to or greater 

than $1.00 per share. Under the 

Program, a new class of market 

participant called a Retail Member 


sradovich on DSK3GMQ082PROD with NOTICES