Federal Register / Vol. 83, No. 128 / Tuesday, July 3, 2018 / Notices 31227 

27 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3References herein to rules refer to rules of Phlx, 

unless otherwise noted. 

operational requirements mentioned 

above. 

(C) Clearing Agency’s Statement on 

Comments on the Proposed Rule 

Change Received From Members, 

Participants, or Others 

DTC has not received or solicited any 

written comments relating to this 

proposal. DTC will notify the 

Commission of any written comments 

received by DTC. 

III. Date of Effectiveness of the 

Proposed Rule Change, and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act and paragraph (f) of Rule 

19b–4 thereunder. At any time within 

60 days of the filing of the proposed rule 

change, the Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. 

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– 

DTC–2018–002 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549. 

All submissions should refer to File 

Number SR–DTC–2018–002. 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 DTC and on DTCC’s website 

(http://dtcc.com/legal/sec-rulefilings.aspx). 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–DTC– 

2018–002 and should be submitted on 

or before July 24, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.27

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–14298 Filed 7–2–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83530; File No. SR–Phlx– 

2018–50] 

Self-Regulatory Organizations; Nasdaq 

Phlx LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Extend the 

Exchange’s Penny Pilot Program 

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 25, 

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 

Phlx Rule 1034 (Minimum Increments) 3

to extend through December 31, 2018 or 

the date of permanent approval, if 

earlier, the Penny Pilot Program in 

options classes in certain issues (‘‘Penny 

Pilot’’ or ‘‘Pilot’’), and to change the 

date when delisted classes may be 

replaced in the Penny Pilot. 

The text of the proposed rule change 

is set forth below. Proposed new 

language is italicized and proposed 

deleted language is in brackets. 

* * * * * 

Nasdaq PHLX Rules 

Options Rules 

* * * * * 

Rule 1034. Minimum Increments 

(a) Except as provided in subparagraphs (i)(B) and (iii) below, all 

options on stocks, index options, and 

Exchange Traded Fund Shares quoting 

in decimals at $3.00 or higher shall have 

a minimum increment of $.10, and all 

options on stocks and index options 

quoting in decimals under $3.00 shall 

have a minimum increment of $.05. 

(i)(A) No Change. 

(B) For a pilot period scheduled to 

expire [June 30, 2018]December 31, 

2018 or the date of permanent approval, 

if earlier (the ‘‘pilot’’), certain options 

shall be quoted and traded on the 

Exchange in minimum increments of 

$0.01 for all series in such options with 

a price of less than $3.00, and in 

minimum increments of $0.05 for all 

series in such options with a price of 

$3.00 or higher, except that options 

overlying the PowerShares QQQ Trust 

(‘‘QQQQ’’)®, SPDR S&P 500 Exchange 

Traded Funds (‘‘SPY’’), and iShares 

Russell 2000 Index Funds (‘‘IWM’’) 

shall be quoted and traded in minimum 

increments of $0.01 for all series 

regardless of the price. A list of such 

options shall be communicated to 

membership via an Options Trader Alert 

(‘‘OTA’’) posted on the Exchange’s 

website. 

The Exchange may replace any pilot 

issues that have been delisted with the 

next most actively traded multiply 

listed options classes that are not yet 

included in the pilot, based on trading 

activity in the previous six months. The 

replacement issues may be added to the 

pilot on the second trading day 

following [January 1, 2018]July 1, 2018. 

(C) No Change. 


sradovich on DSK3GMQ082PROD with NOTICES
31228 Federal Register / Vol. 83, No. 128 / Tuesday, July 3, 2018 / Notices 

4The options exchanges in the U.S. that have 

pilot programs similar to the Penny Pilot (together 

‘‘pilot programs’’) are currently working on a 

proposal for permanent approval of the respective 

pilot programs. 

5See Securities Exchange Act Release No. 82370 

(December 20, 2017), 82 FR 61351 (December 27, 

2017) (SR–Phlx–2017–104). 

6The replacement issues will be announced to 

the Exchange’s membership via an Options Trader 

Alert (OTA) posted on the Exchange’s website. 

Penny Pilot replacement issues will be selected 

based on trading activity in the previous six 

months, as is the case today. The replacement 

issues would be identified based on The Options 

Clearing Corporation’s trading volume data. For 

example, for the July replacement, trading volume 

from December 1, 2017 through May 31, 2018 

would be analyzed. The month immediately 

preceding the replacement issues’ addition to the 

Pilot Program (i.e., June) would not be used for 

purposes of the six-month analysis. 

7 15 U.S.C. 78f(b). 

8 15 U.S.C. 78f(b)(5). 

9 15 U.S.C. 78s(b)(3)(A)(iii). 

10 17 CFR 240.19b–4(f)(6). 

11 17 CFR 240.19b–4(f)(6). 

(ii)–(v) No Change. 

* * * * * 

The text of the proposed rule change 

is also available on the Exchange’s 

website at http://

nasdaqomxphlx.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 amend 

Phlx Rule 1034 to extend the Penny 

Pilot through December 31, 2018 or the 

date of permanent approval, if earlier,4

and to change the date when delisted 

classes may be replaced in the Penny 

Pilot. The Exchange believes that 

extending the Penny Pilot will allow for 

further analysis of the Penny Pilot and 

a determination of how the program 

should be structured in the future. 

Under the Penny Pilot, the minimum 

price variation for all participating 

options classes, except for the Nasdaq100 Index Tracking Stock (‘‘QQQQ’’), 

the SPDR S&P 500 Exchange Traded 

Fund (‘‘SPY’’) and the iShares Russell 

2000 Index Fund (‘‘IWM’’), is $0.01 for 

all quotations in options series that are 

quoted at less than $3 per contract and 

$0.05 for all quotations in options series 

that are quoted at $3 per contract or 

greater. QQQQ, SPY and IWM are 

quoted in $0.01 increments for all 

options series. The Penny Pilot is 

currently scheduled to expire on June 

30, 2018.5

The Exchange proposes to extend the 

time period of the Penny Pilot through 

December 31, 2018 or the date of 

permanent approval, if earlier, and to 

provide a revised date for adding 

replacement issues to the Penny Pilot. 

The Exchange proposes that any Penny 

Pilot Program issues that have been 

delisted may be replaced on the second 

trading day following July 1, 2018. The 

replacement issues will be selected 

based on trading activity in the previous 

six months.6

This filing does not propose any 

substantive changes to the Penny Pilot 

Program; all classes currently 

participating in the Penny Pilot will 

remain the same and all minimum 

increments will remain unchanged. The 

Exchange believes the benefits to public 

customers and other market participants 

who will be able to express their true 

prices to buy and sell options have been 

demonstrated to outweigh the potential 

increase in quote traffic. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,7 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,8

in particular, in that it is designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to foster 

cooperation and coordination with 

persons engaged in facilitating 

transactions in securities, and 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. 

In particular, the proposed rule 

change, which extends the Penny Pilot 

for an additional six months through 

December 31, 2018 or the date of 

permanent approval, if earlier, and 

changes the date for replacing Penny 

Pilot issues that were delisted to the 

second trading day following July 1, 

2018, will enable public customers and 

other market participants to express 

their true prices to buy and sell options 

for the benefit of all market participants. 

This is consistent with the Act. 

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. To the 

contrary, this proposal is procompetitive because it allows Penny 

Pilot issues to continue trading on the 

Exchange. 

Moreover, the Exchange believes that 

the proposed rule change will allow for 

further analysis of the Pilot and a 

determination of how the Pilot should 

be structured in the future; and will 

serve to promote regulatory clarity and 

consistency, thereby reducing burdens 

on the marketplace and facilitating 

investor protection. 

The Pilot is an industry-wide 

initiative supported by all other option 

exchanges. The Exchange believes that 

extending the Pilot will allow for 

continued competition between market 

participants on the Exchange trading 

similar products as their counterparts 

on other exchanges, while at the same 

time allowing the Exchange to continue 

to compete for order flow with other 

exchanges in option issues trading as 

part of the Pilot. 

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 and Rule 19b–4(f)(6)(iii) 

thereunder. 

A proposed rule change filed under 

Rule 19b–4(f)(6) 11 normally does not 

become operative prior to 30 days after 


sradovich on DSK3GMQ082PROD with NOTICES
Federal Register / Vol. 83, No. 128 / Tuesday, July 3, 2018 / Notices 31229 

12 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires the Exchange to give the 

Commission written notice of the Exchange’s intent 

to file the proposed rule change along with a brief 

description and the 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 pre-filing requirement. 

13 17 CFR 240.19b–4(f)(6)(iii). 

14See Securities Exchange Act Release No. 61061 

(November 24, 2009), 74 FR 62857 (December 1, 

2009) (SR–NYSEArca–2009–44). 

15For purposes only of waiving the operative 

delay for this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 

16 15 U.S.C. 78s(b)(2)(B). 17 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

5See EDGX Rules 11.6(n)(7), 11.8(b)(7) and 

11.8(d)(5); see also Securities Exchange Act Release 

No. 80841 (June 1, 2017), 82 FR 26559 (June 7, 

2017), (Notice of Filing and Immediate 

Effectiveness To Add a New Optional Order 

Instruction Known as Non-Displayed Swap). 

6See Nasdaq Rule 4703(m) (defining the Trade 

Now order modifier); see also Securities Exchange 

Act Release No. 79282 (November 10, 2016), 81 FR 

81219 (November 17, 2016) (Notice of Filing and 

Immediate Effectiveness of Proposed Rule change to 

Amend Rule 4702 and Rule 4703 to Add a ‘‘Trade 

Now’’ Instruction to Certain Order Types). 

7See Arca Rule 7.31–E(d)(2)(B) (describing the 

Non-Display Remove Modifier); see also Securities 

Exchange Act Release No. 76267 (October 26, 2015), 

80 FR 66951 (October 30, 2015) (Order Approving 

Proposed Rule change Adopting New Equity 

Trading Rules Relating to Orders and Modifiers and 

Retail Liquidity Program To Reflect the 

Implementation of Pillar, the Exchange’s New 

Trading Technology Platform). 

the date of the filing.12 However, 

pursuant to Rule 19b–4(f)(6)(iii),13 the 

Commission may designate a shorter 

time if such action is consistent with the 

protection of investors and the public 

interest. The Exchange has asked the 

Commission to waive the 30-day 

operative delay so that the proposal may 

become operative immediately upon 

filing. The Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest 

because doing so will allow the Pilot 

Program to continue without 

interruption in a manner that is 

consistent with the Commission’s prior 

approval of the extension and expansion 

of the Pilot Program and will allow the 

Exchange and the Commission 

additional time to analyze the impact of 

the Pilot Program.14 Accordingly, the 

Commission designates the proposed 

rule change as operative upon filing 

with the Commission.15

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) 16 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: 

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–2018–50 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–2018–50. 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–2018–50 and should 

be submitted on or before July 24, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–14291 Filed 7–2–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83536; File No. SR– 

CboeBYX–2018–009] 

Self-Regulatory Organizations; Cboe 

BYX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change to Rule 11.9, 

Orders and Modifiers 

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 18, 

2018, Cboe BYX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BYX’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Exchange has 

designated this proposal as a ‘‘noncontroversial’’ proposed rule change 

pursuant to Section 19(b)(3)(A) of the 

Act 3 and Rule 19b–4(f)(6) thereunder,4

which renders it effective upon filing 

with the Commission. The Commission 

is publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange filed a proposal to add 

a new optional order type modifier to be 

known as Non-Displayed Swap. The 

proposed amendments are substantively 

identical to the rules of Cboe EDGX 

Exchange, Inc. (‘‘EDGX’’) 5 and 

substantially similar to the rules of the 

Nasdaq Stock Market LLC (‘‘Nasdaq’’) 6

and NYSE Arca, Inc. (‘‘Arca’’).7


sradovich on DSK3GMQ082PROD with NOTICES