Federal Register / Vol. 83, No. 140 / Friday, July 20, 2018 / Notices 34639 

1117 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 3Phlx Rule 1081(c)(ii). 

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– 

CboeBYX–2018–011 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–CboeBYX–2018–011. 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–CboeBYX–2018–011, and 

should be submitted on or before 

August 10, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–15497 Filed 7–19–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83642; File No. SR–BX– 

2018–029] 

Self-Regulatory Organizations; Nasdaq 

BX, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend BX Rules at 

Chapter VII, Section 6 Related to 

Market Maker Quotations, Section 14 

Related to Lead Market Maker 

Quotations and Section 15 Related to 

Directed Market Maker Quotations 

July 16, 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 July 2, 

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 amend BX 

Rules at Chapter VII, Section 6 related 

to Market Maker quotations, Section 14 

related to Lead Market Maker quotations 

and Section 15 related to Directed 

Market Maker quotations. 

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 

BX proposes to amend the current 

rule text of Chapter VII, Section 6(d), 

Section 14 and Section 15 related to 

quoting obligations for Market Makers, 

Lead Market Makers and Directed 

Market Makers, to restructure the 

current rule to mirror rule text utilized 

on Nasdaq Phlx LLC.3 The Exchange 

does not propose to amend the current 

quoting obligations, rather the Exchange 

proposes to more clearly state the 

current quoting obligations utilizing the 

same format as Phlx Rule 1081(c). 

Chapter VII, Section 6(d)(i) 

The Exchange proposes to amend 

Chapter VII, Section 6(d) to remove the 

word ‘‘continuous’’ from this first 

sentence in the rule. The Exchange is 

removing the word ‘‘continuous’’ 

because the Exchange notes that Market 

Makers quote a percentage of the day 

and therefore the word continuous may 

not accurately reflect the manner in 

which Market Makers quote on BX. The 

Exchange proposes to retitle Section 

6(d) as ‘‘Intra-day Quotes.’’ 

The Exchange also proposes to 

replace references to ‘‘continuous’’ with 

‘‘intra-day’’ within the Rulebook. The 

Exchange proposes to amend Chapter V, 

Section 3 to replace ‘‘continuous 

quoting’’ with ‘‘intra-day quoting.’’ The 

Exchange proposes to amend proposed 

Chapter VII, Section 14(f)(4) to replace 

‘‘continuous electronic quote 

obligation’’ with ‘‘intra-day electronic 

quote obligation.’’ The Exchange 

proposes to amend proposed Chapter 

VII, Section 14(g) to replace 

‘‘continuous quotes’’ with ‘‘intra-day 

quotes.’’ The Exchange proposes to 

amend Chapter VII, Section 15(iii)(d) to 

replace ‘‘continuous electronic quote 

obligation’’ with ‘‘intra-day electronic 

quote obligation.’’ The Exchange 

proposes to amend Chapter X, Section 

7(c) to replace ‘‘continuous quotes’’ and 

‘‘continuous bids and offers’’ with 

‘‘intra-day quotes’’ and ‘‘intra-day bids 

and offers.’’ 

The Exchange proposes to amend 

Chapter VII, Section 6(d)(i) to delete the 


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4An intra-day add of a series shall be defined, for 

purposes of this Phlx Rule 1081 [sic], as an option 

series that is added manually on the same day the 

series begins trading. 

5See Phlx Rule 1081(c). 

6The term ‘‘Directed Order’’ means an order to 

buy or sell which has been directed, provided it is 

properly marked as such, to a particular market 

maker (‘‘Directed Market Maker’’). Directed Orders 

are handled within the System pursuant to Chapter 

VII [sic], Section 10. Directed Orders may be 

available only in certain options. See Chapter VII 

[sic], Section 1(e)(2). 

first sentence of this paragraph, ‘‘On a 

daily basis, a Market Maker must during 

regular market hours make markets 

consistent with the applicable quoting 

requirements specified in these rules, on 

a continuous basis in options in which 

the Market Maker is registered.’’ The 

Exchange believes that a Market Maker’s 

obligation to enter bids and offers for 

the options to which it is registered is 

currently noted in proposed Chapter 

VII, Section 6(d). The Exchange 

proposes to specifically detail a Market 

Maker’s quoting obligations in the 

proposed rule text and therefore 

believes that this sentence is not 

necessary because the following 

sentences replaces this sentence with 

the exception of the intra-day aspect as 

described below. 

The Exchange proposes to add new 

rule text to Chapter VII, Section 6(d)(i). 

The first new sentence will provide ‘‘A 

Market Maker must enter bids and offers 

for the options to which it is registered, 

except in an assigned options series 

listed intra-day 4 on the Exchange.’’ The 

Exchange believes this sentence is more 

specific than Section 6(d) because it 

accepts [sic] the intra-day quotes. 

Today, a Market Maker is not held to 

quote an intra-day add of a series 

because the options series was not 

available for trading the entire day. The 

Exchange is adding this exception to the 

rule text to make clear that Market 

Makers would not be responsible for 

quoting an intra-day addition. The 

Exchange believes that not counting 

intra-day adds of a series that were not 

available for the entire day of trading is 

consistent with the Act because the 

Market Maker would not have the 

opportunity to trade that particular 

options series for the entire trading day. 

The Exchange also proposes to note, 

‘‘On a daily basis, a Market Maker must 

make markets consistent with the 

applicable quoting requirements 

specified below.’’ The Exchange 

proposes to note within the new rule 

text the specific quoting obligations for 

each type of Market Maker. 

The Exchange is also adding rule text 

to explain the interplay between the 

quoting obligations for BX Market 

Makers who may also qualify as a Lead 

Market Maker, pursuant to Chapter VII, 

Section 14 or Directed Market Maker 

pursuant to Chapter VII, Section 15. 

Specifically, the Exchange proposes to 

add, similar to Phlx Rules,5 ‘‘An 

Options Participant will be required to 

meet each market making obligation 

separately. A Market Maker who is also 

the Lead Market Maker, pursuant to 

Chapter VII, Section 14, will be held to 

the Lead Market Maker obligations in 

options series in which the Lead Market 

Maker is assigned and will be held to 

Market Maker obligations in all other 

options series where assigned. A Market 

Maker who receives a Directed Order,6

as described in Chapter VII [sic], Section 

10, shall be held to the standard of a 

Directed Market Maker, as described in 

Chapter VII, Section 15.’’ The Exchange 

proposes to make clear that a BX 

Options Participant who is a Market 

Maker, Lead Market Maker and Directed 

Market Maker will have quoting 

obligations which may need to be 

separately met depending on the role. 

Chapter VII, Section 6(d)(i)(1) 

The Exchange proposes to remove the 

following sentence from Chapter VII, 

Section (d)(i)(1), ‘‘To satisfy this 

requirement, a Market Maker must 

quote 60% of the trading day (as a 

percentage of the total number of 

minutes in such trading day) or such 

higher percentage as BX may announce 

in advance.’’ The Exchange proposes to 

replace this language with language that 

more technically defines the quoting 

obligation. The Exchange proposes the 

following rule text: 

Market Makers, associated with the same 

Options Participant, are collectively required 

to provide two-sided quotations in 60% of 

the cumulative number of seconds, or such 

higher percentage as BX may announce in 

advance, for which that Options Participant’s 

assigned options series are open for trading. 

Notwithstanding the foregoing, a Market 

Maker shall not be required to make twosided markets pursuant to this Chapter VII, 

Section 6(d)(i)(1) in any Quarterly Option 

Series, any Adjusted Option Series, and any 

option series with an expiration of nine 

months or greater. 

The 60% requirement and the manner 

in which it is calculated is not being 

amended. The Exchange does not 

propose to amend the current quoting 

obligations, rather the Exchange 

proposes to more clearly state the 

current quoting obligations utilizing the 

same format as Phlx Rule 1081(c)(ii)(A). 

The Exchange notes the quoting 

obligations expressed as the cumulative 

number of seconds rather than 60% of 

the trading day. While the current rule 

indicates that the Exchange currently 

reviews quoting as a percentage of the 

total number of minutes, the two 

standards are otherwise equivalent. 

Adding ‘‘associated with the same 

Options Participant’’ to the first 

sentence also makes clear that the 

obligation is at the firm level and that 

all associated Market Makers will be 

counted in arriving at the calculation for 

quoting obligations. The Exchange also 

states, ‘‘Notwithstanding the foregoing, 

a Market Maker shall not be required to 

make two-sided markets pursuant to 

this Chapter VII, Section 6(d)(i)(1) in 

any Quarterly Option Series, any 

Adjusted Option Series, and any option 

series with an expiration of nine months 

or greater.’’ This exception exists today 

for BX and is simply being carried over 

into the new text from current Section 

6(d)(i)(2). The definition of an adjusted 

option series is currently defined at 

Section 6(d)(i)(2) as an option series 

wherein one option contract in the 

series represents the delivery of other 

than 100 shares of underlying stock or 

Exchange-Traded Fund Shares. This 

definition is being relocated to 

6(d)(i)(1)(a), similar to Phlx’s structure 

and is defined as ‘‘Adjusted Options 

Series’’ throughout this rule. 

Chapter VII, Section 6(d)(i)(2) 

The Exchange proposes to add new 

rule text at Chapter VII, Section 

6(d)(i)(2) which provides the method by 

which the Exchange will calculate the 

BX Market Maker quoting obligations. 

The Exchange proposes to state, that the 

Exchange will (i) take the total number 

of seconds the Options Participant 

disseminates quotes in each assigned 

options series, excluding Quarterly 

Option Series, any Adjusted Option 

Series, and any option series with an 

expiration of nine months or greater; 

and (ii) divide that time by the eligible 

total number of seconds each assigned 

option series is open for trading that 

day. Similar to Phlx Rule 1081(c)(ii)(D), 

the Exchange believes that the addition 

of this language will bring greater 

transparency to the manner in which 

the Exchange calculated the quoting 

obligation. The Exchange is not 

amending the manner in which the 

quoting obligation is calculated, rather 

the Exchange is simply adding to the 

current rule the exact manner in which 

the Exchange determines the quoting 

percentage. The Exchange proposes to 

add, ‘‘Quoting is not required in every 

assigned options series.’’ This sentence 

is not currently contained in the rule. 

The Exchange is not proposing to 

amend its current practice, rather the 

Exchange is clearly stating that quoting 

is not required in every assigned options 

series to make clear the current 


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7See note 4 above. 

obligation. Also, the Exchange proposes 

to state, ‘‘Compliance with this 

requirement is determined by reviewing 

the aggregate of quoting in assigned 

options series for the Options 

Participant.’’ This language is similar to 

the language currently being removed 

from Chapter VII, Section 6(d)(i)(1), 

‘‘This obligation will apply to all of a 

Market Maker’s registered options 

collectively to all appointed issues, 

rather than on an option-by-option 

basis.’’ The proposed new language 

simply conforms the text to Phlx’s Rule 

1081(c)(ii)(D). 

Chapter VII, Section 6(d)(i)(3) 

The Exchange proposes to also delete 

the following language from Chapter 

VII, Section 6(d)(i)(3), ‘‘This obligation 

will apply to all of a Market Maker’s 

registered options collectively to all 

appointed issues, rather than on an 

option-by-option basis. Compliance 

with this obligation will be determined 

on a monthly basis. However, 

determining compliance with the 

continuous quoting requirement on a 

monthly basis does not relieve a Market 

Maker of the obligation to provide 

continuous two-sided quotes on a daily 

basis, nor will it prohibit the Exchange 

from taking disciplinary action against a 

Market Maker for failing to meet the 

continuous quoting obligation each 

trading day.’’ The Exchange proposes to 

replace this language with the following 

language proposed in Section 6(d)(i)(3), 

‘‘For purposes of the Exchange’s 

surveillance of an Options Participant 

compliance with this rule, the Exchange 

may determine compliance on a 

monthly basis. The Exchange’s monthly 

compliance evaluation of the quoting 

requirement does not relieve an Options 

Participant of the obligation to provide 

two-sided quotes on a daily basis, nor 

will it prohibit the Exchange from 

taking disciplinary action against an 

Options Participant for failing to meet 

the quoting obligation each trading 

day.’’ The Exchange’s amendment is not 

substantive, rather the amendment 

conforms the rule text to Phlx Rule 

1081(c)(iii). 

The Exchange proposes to remove the 

entire paragraph at current Section 

6(d)(i)(2). As explained above this 

language is being relocated within the 

proposed rule text to Section 6(d)(i)(1) 

and subsection (a) to that paragraph. 

The Exchange notes that the sentence 

‘‘Accordingly, the continuous quotation 

obligations set forth in this rule shall 

not apply to Market Makers respecting 

Quarterly Option Series, adjusted option 

series, and series with an expiration of 

nine months or greater’’ is being deleted 

and not relocated because this sentence 

is redundant. Also, the Exchange 

proposes to amend current Section 

6(d)(i)(3) by renumbering it (4) and also 

capitalizing ‘‘System’’ which is a 

defined term and renumbering a crossreference. 

Chapter VII, Section 14(f) 

BX’s Rules at Chapter VII, Section 

14(f) related to Lead Market Maker or 

‘‘LMM’’ quotations. The Exchange is 

amending BX’s Rules to conform to 

Phlx’s Rules with respect to Specialists 

which are the equivalent of an LMM on 

BX. Similar to the changes for BX 

Market Makers, the Exchange proposes 

to more specifically state within Section 

14(f) that an LMM must enter two-sided 

quotations. Further, ‘‘An LMM that 

enters a bid (offer) in a series of an 

option in which he is registered on BX 

must enter an offer (bid), except in an 

assigned options series listed intra-day 7

on BX. These quotations must meet the 

legal quote width requirements 

specified in Chapter VII, Section 

14(b)(iv), (v) and (vi).’’ 

The Exchange is removing the words 

‘‘may enter quotations only in the issues 

included in its appointment.’’ The 

Exchange is revising this paragraph to 

state, ‘‘An LMM must enter two-sided 

quotations. An LMM that enters a bid 

(offer) in a series of an option in which 

he is registered on BX must enter an 

offer (bid), except in an assigned options 

series listed intra-day on BX. These 

quotations must meet the legal quote 

width requirements specified in Chapter 

VII, Section 14(b)(iv), (v) and (vi). A 

Market Maker who is also the Lead 

Market Maker, pursuant to this Chapter 

VII, Section 14, will be held to the Lead 

Market Maker obligations in options 

series in which the Lead Market Maker 

is assigned and will be held to Market 

Maker obligations in all other options 

series where assigned pursuant to 

Chapter VII, Section 6(d).’’ The deletion 

of the words from this paragraph are 

replaced with the same concept in the 

new sentences where it is stating that 

the LMM enter a bid (offer) in a series 

of an options in which he is registered 

on BX. 

Today, an LMM is not held to quote 

an intra-day add of a series because the 

options series was not available for 

trading the entire day. The Exchange is 

adding this exception to the rule text to 

make clear that LMMs would not be 

responsible for quoting an intra-day 

addition. The Exchange believes that 

not counting intra-day adds of a series 

that were not available for the entire day 

of trading is consistent with the Act 

because the LMM would not have the 

opportunity to trade that particular 

options series for the entire trading day. 

As is the case today, an LMM must meet 

the legal quote width requirements 

specified in Section 14(b)(iv), (v) and 

(vi). 

The Exchange also proposes to add to 

this paragraph the following sentence, 

‘‘A Market Maker who is also the Lead 

Market Maker, pursuant to this Chapter 

VII, Section 14, will be held to the Lead 

Market Maker obligations in options 

series in which the Lead Market Maker 

is assigned and will be held to Market 

Maker obligations in all other options 

series where assigned pursuant to 

Chapter VII, Section 6(d).’’ This 

language will parallel the language 

currently proposed on Chapter VII, 

Section 6(d) and make clear that a BX 

Options Participant who is a Market 

Maker and a Lead Market Maker will 

have quoting obligations, which may 

need to be separately met depending on 

the role. 

Chapter VII, Section 14(f)(1) 

The Exchange proposes to remove the 

following sentence from Chapter VII, 

Section 14(f)(1), ‘‘An LMM must 

provide continuous two-sided 

quotations throughout the trading day in 

its appointed issues for 90% of the time 

the Exchange is open for trading in each 

issue. Such quotations must meet the 

legal quote width requirements herein. 

These obligations will apply to all of the 

LMMs appointed issues collectively, 

rather than on an option-by-option 

basis. Compliance with this obligation 

will be determined on a monthly basis.’’ 

The Exchange proposes to replace this 

language with language that more 

technically defines the quoting 

obligation. The Exchange proposes the 

following rule text: 

LMMs, associated with the same Options 

Participant, are collectively required to 

provide two-sided quotations in 90% of the 

cumulative number of seconds, or such 

higher percentage as BX may announce in 

advance, for which that Option Participant’s 

assigned options series are open for trading. 

An LMM shall not be required to make twosided markets in any Quarterly Option 

Series, any Adjusted Option Series, and any 

option series with an expiration of nine 

months or greater. However, a LMM may still 

receive a participation entitlement in such 

series if it elects to quote in such series and 

otherwise satisfies the requirements of 

Chapter VI, Section 10. 

The 90% requirement and the manner 

in which it is calculated is not being 

amended. The Exchange does not 

propose to amend the current quoting 

obligations, rather the Exchange 

proposes to more clearly state the 

current quoting obligations utilizing the 

same format as Phlx Rule 1081(c)(ii)(B). 


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8See Phlx Rule 1081(c)(ii)(A)(i). 

9Chapter VII, Section 14(f)(4) provides the 

following definition for an adjusted options series, 

‘‘For purposes of this Rule, an adjusted option 

series is an option series wherein, as a result of a 

corporate action by the issuer of the underlying 

security, one option contract in the series represents 

the delivery of other than 100 shares of underlying 

security.’’ 

The Exchange notes the quoting 

obligations expressed as the cumulative 

number of seconds rather than 90% of 

the trading day. The two standards are 

equivalent. The rule text in current 

Section 14(f)(1) is being revised and 

certain text is being relocated. The legal 

quote width obligations are now in 

Section 14(f) generally and the 

compliance obligations are being 

relocated to Section 14(f)(3) as described 

in more detail below. The rule text 

related to making a two-sided market in 

Quarterly Option Series, any adjusted 

option series, and any option series with 

an expiration of nine months or greater 

is being relocated from Section 14(f)(4) 

along with the definition for an 

Adjusted Option Series which is being 

relocated to Section 14(f)(1)(a) and is 

being defined. The Exchange is also 

relocating this sentence ‘‘However, a 

LMM may still receive a participation 

entitlement in such series if it elects to 

quote in such series and otherwise 

satisfies the requirements of Chapter VI, 

Section 10’’ from current Chapter VII, 

Section 14(f)(4). The Exchange is 

conforming the adjusted series 

definition to that of Phlx,8 which 

provides ‘‘An adjusted option series is 

an option series wherein one option 

contract in the series represents the 

delivery of other than 100 shares of 

underlying stock or Exchange-Traded 

Fund Shares.’’ 9 The amendment of the 

definition will not result in an adjusted 

option series being treated differently 

for purposes of BX Rules. 

Chapter VII, Section 14(f)(2) 

The Exchange proposes to add new 

rule text at Chapter VII, Section 14(f)(2) 

which provides the method by which 

the Exchange will calculate the BX 

LMM quoting obligations. The Exchange 

proposes to state, that the Exchange will 

(i) take the total number of seconds the 

Options Participant disseminates quotes 

in each assigned options series, 

excluding Quarterly Option Series, any 

Adjusted Option Series, and any option 

series with an expiration of nine months 

or greater for Market Makers; and (ii) 

divide that time by the eligible total 

number of seconds each assigned option 

series is open for trading that day. This 

language conforms to the language also 

proposed for Chapter VII, Section 

6(d)(i)(2). Similar to Phlx, the Exchange 

believes that the addition of this 

language will bring greater transparency 

to the manner in which the Exchange 

calculated the quoting obligation. The 

Exchange proposes to add, ‘‘Quoting is 

not required in every assigned options 

series.’’ This sentence is not currently 

contained in the rule. The Exchange is 

not proposing to amend its current 

practice, rather the Exchange is clearly 

stating that quoting is not required in 

every assigned options series to make 

clear the current obligation. Also, the 

Exchange proposes to state, 

‘‘Compliance with this requirement is 

determined by reviewing the aggregate 

of quoting in assigned options series for 

the Options Participant.’’ This language 

is similar to the language currently 

being removed from Chapter VII, 

Section 14(f)(1), ‘‘These obligations will 

apply to all of the LMMs appointed 

issues collectively, rather than on an 

option-by-option basis.’’ The proposed 

new language simply conforms the text 

to Phlx’s Rule 1081(c)(ii)(D). 

Chapter VII, Section 14(f)(3) 

The Exchange proposes to relocate the 

following rule text from current Section 

14(f)(1) to new (f)(3) ‘‘BX Regulation 

may consider exceptions to the 

requirement to quote 90% (or higher) of 

the trading day based on demonstrated 

legal or regulatory requirements or other 

mitigating circumstances.’’ The 

Exchange proposes to replace this rule 

text in current Section 14(f)(1), 

‘‘However, determining compliance 

with the continuous quoting 

requirement on a monthly basis does 

not relieve an LMM of the obligation to 

provide continuous two-sided quotes on 

a daily basis, nor will it prohibit the 

Exchange from taking disciplinary 

action against an LMM for failing to 

meet the continuous quoting obligation 

each trading day’’ with the following 

rule text: 

For purposes of the Exchange’s 

surveillance of an Options Participant 

compliance with this rule, the Exchange may 

determine compliance on a monthly basis. 

The Exchange’s monthly compliance 

evaluation of the quoting requirement does 

not relieve an Options Participant of the 

obligation to provide two-sided quotes on a 

daily basis, nor will it prohibit the Exchange 

from taking disciplinary action against an 

Options Participant for failing to meet the 

quoting obligation each trading day. 

The Exchange is not amending the 

manner in which the surveillance 

functions today. The Exchange proposes 

to conform this rule text throughout the 

rule to mirror language utilized in Phlx 

Rule 1081(c)(iii) and also proposed new 

Chapter VII, Section 6(d)(i)(3). This rule 

text mirrors language currently 

contained in Section 14(f)(1). 

Chapter VII, Section 14(f)(2), (3) and (4) 

The Exchange proposes to renumber 

current Section 14(f)(1)(i) as Section 

14(f)(4). As noted herein, current 

Section 14(f)(4) is being relocated to 

within the rule text as explained above. 

The Exchange also proposes to 

renumber Section 14(f)(2) and (3), 

which are not being amended, as 14(g) 

and (h), respectively. 

Chapter VII, Section 15(iii) 

The Exchange proposes to amend 

Section 15(iii) related to Directed 

Market Maker quoting requirements to 

similarly add text to conform to Phlx 

Rule 1081(c)(ii)(C). The Exchange 

proposes to add to Section 15(iii), ‘‘A 

Directed Market Maker must enter twosided quotations. A Directed Market 

Maker that enters a bid (offer) in a series 

of an option in which he is registered on 

BX must enter an offer (bid), except in 

an assigned options series listed intraday on BX. These quotations must meet 

the legal quote width requirements 

specified in Chapter VII, Section 

6(d)(ii).’’ Similar to the changes for BX 

Market Makers and Lead Market 

Makers, the Exchange proposes to more 

specifically state within Section 15(iii) 

that an Directed Market Maker must 

enter two-sided quotations. Today, a 

Directed Market Maker is not held to 

quote an intra-day add of a series 

because the options series was not 

available for trading the entire day. The 

Exchange is adding this exception to the 

rule text to make clear that Directed 

Market Makers would not be 

responsible for quoting an intra-day 

addition. The Exchange believes that 

not counting intra-day adds of a series 

that were not available for the entire day 

of trading is consistent with the Act 

because the Directed Market Maker 

would not have the opportunity to trade 

that particular options series for the 

entire trading day. As is the case today, 

a Directed Market Maker must meet the 

legal quote width requirements 

specified in Chapter VII, Section 6(d)(ii). 

The Exchange also proposes to add to 

this paragraph the following sentence, 

‘‘A Market Maker who receives a 

Directed Order, as described in Chapter 

VII [sic], Section 10, shall be held to the 

standard of a Directed Market Maker as 

described in Chapter VII, Section 15.’’ 

This language will make clear where a 

Market Maker receives a Directed Order 

and what the quoting standard shall be 

for that Directed Market Maker. 


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Federal Register / Vol. 83, No. 140 / Friday, July 20, 2018 / Notices 34643 

10See current Chapter VII, Section 15(iv). 

11See Phlx Rule 1081(c)(ii)(A)(i). 

12Chapter VII, Section 15(iv) provides the 

following definition for an adjusted options series, 

‘‘For purposes of this Rule, an adjusted option 

series is an option series wherein, as a result of a 

corporate action by the issuer of the underlying 

security, one option contract in the series represents 

the delivery of other than 100 shares of underlying 

security.’’ 

13The Exchange intends to file a similar proposal 

for The Nasdaq Stock Market, LLC, Nasdaq ISE, 

LLC, Nasdaq GEMX, LLC and Nasdaq MRX, LLC. 

Chapter VII, Section 15(iii)(a) 

The Exchange proposes to adopt a 

new Section 15(iii)(a) and provide, 

Directed Market Makers, associated with 

the same Options Participant, are 

collectively required to provide twosided quotations in 90% of the 

cumulative number of seconds, or such 

higher percentage as BX may announce 

in advance, for which that Options 

Participant’s assigned options series are 

open for trading. An Options Participant 

shall be considered directed in all 

assigned options once the Options 

Participant receives a Directed Order in 

any option in which they are assigned 

and shall be considered a Directed 

Market Maker until such time as an 

Options Participant notifies the 

Exchange that they are no longer 

directed. Notwithstanding the foregoing, 

an Options Participant shall not be 

required to make two-sided markets in 

any Quarterly Option Series, any 

Adjusted Option Series, and any option 

series with an expiration of nine months 

or greater. Notwithstanding the 

obligations specified in subparagraph 

(iii) above, a DMM may still receive a 

participation entitlement in such series 

if it elects to quote in such series and 

otherwise satisfies the requirements of 

Chapter VII [sic], Section 10. 

The Exchange notes that it is not 

amending the quoting obligations for 

Directed Market Makers. The Exchange 

is simply conforming the text to Phlx 

Rule 1081(c)(ii)(C). The Exchange is 

adding rule text to make clear, similar 

to Phlx Rule 1081(c)(ii)(C), when a 

Directed Market [sic] is considered to be 

directed. Similar to Phlx, an Options 

Participant shall be considered directed 

in all assigned options once the Options 

Participant receives a Directed Order in 

any option in which they are assigned 

and shall be considered a Directed 

Market Maker until such time as an 

Options Participant notifies the 

Exchange that they are no longer 

directed. The Exchange, similar to 

today, shall not apply quoting 

obligations to Quarterly Option Series, 

any Adjusted Option Series, and any 

option series with an expiration of nine 

months or greater.10 The Exchange is 

relocating language to Section 15(iii)(a) 

from Section 15(iv) which states, ‘‘a 

DMM may still receive a participation 

entitlement in such series if it elects to 

quote in any Quarterly Option Series, 

any Adjusted Option Series, and any 

option series with an expiration of nine 

months or greater series and otherwise 

satisfies the requirements of Chapter VII 

[sic], Section 10.’’ 

Chapter VII, Section 15(iii)(a)(i) 

The Exchange proposes to adopt a 

definition of an adjusted option series in 

subparagraph (i) similar to Phlx 11

which provides ‘‘An adjusted option 

series is an option series wherein one 

option contract in the series represents 

the delivery of other than 100 shares of 

underlying stock or Exchange-Traded 

Fund Shares,’’ 12 and define it. The 

amendment of the definition will not 

result in an adjusted option series being 

treated differently for purposes of BX 

Rules. 

Chapter VII, Section 15(iii)(b) 

The Exchange proposes to add new 

rule text at Chapter VII, Section 

15(iii)(b) which provides the method by 

which the Exchange will calculate the 

BX Directed Market Maker quoting 

obligations. The Exchange proposes to 

state, that the Exchange will (i) take the 

total number of seconds the Options 

Participant disseminates quotes in each 

assigned options series, excluding 

Quarterly Option Series, any Adjusted 

Option Series, and any option series 

with an expiration of nine months or 

greater; and (ii) divide that time by the 

eligible total number of seconds each 

assigned option series is open for 

trading that day. Similar to Phlx, the 

Exchange believes that the addition of 

this language will bring greater 

transparency to the manner in which 

the Exchange calculated the quoting 

obligation. 

The Exchange proposes to add, 

‘‘Quoting is not required in every 

assigned options series.’’ This sentence 

is not currently contained in the rule. 

The Exchange is not proposing to 

amend its current practice, rather the 

Exchange is clearly stating that quoting 

is not required in every assigned options 

series to make clear the current 

obligation. 

Also, the Exchange proposes to state, 

‘‘Compliance with this requirement is 

determined by reviewing the aggregate 

of quoting in assigned options series for 

the Options Participant.’’ This language 

is similar to the language currently 

being removed from Chapter VII, 

Section 15(iii) ‘‘These obligations will 

apply collectively to all series in all of 

the issues, rather than on an issue-byissue basis.’’ The proposed new 

language simply conforms the text to 

Phlx’s Rule 1081(c)(ii)(D). 

Chapter VII, Section 15(iii)(c) 

The Exchange proposes to relocate the 

following rule text from current Section 

15(iii) to new 15(iii)(c) ‘‘BX Regulation 

may consider exceptions to the 

requirement to quote 90% (or higher) of 

the trading day based on demonstrated 

legal or regulatory requirements or other 

mitigating circumstances.’’ The 

Exchange proposes to add, 

For purposes of the Exchange’s 

surveillance of an Options Participant 

compliance with this rule, the Exchange may 

determine compliance on a monthly basis. 

The Exchange’s monthly compliance 

evaluation of the quoting requirement does 

not relieve an Options Participant of the 

obligation to provide two-sided quotes on a 

daily basis, nor will it prohibit the Exchange 

from taking disciplinary action against an 

Options Participant for failing to meet the 

quoting obligation each trading day. 

The Exchange is not amending the 

manner in which the surveillance 

functions today. The Exchange proposes 

to conform this rule text throughout the 

rule to mirror language utilized in Phlx 

Rule 1081(c)(iii). The Exchange 

proposes to relocate and revise this 

language, ‘‘provide continuous twosided quotations throughout the trading 

day in all options issues for which the 

Directed Market Maker is assigned for 

90% of the time the Exchange is open 

for trading in each issue. Such 

quotations must meet the legal quote 

width requirements of Chapter VII, 

Section 6. These obligations will apply 

collectively to all series in all of the 

issues, rather than on an issue-by-issue 

basis. Compliance with this obligation 

will be determined on a monthly basis’’ 

as described herein into Sections 15(iii) 

and Section 15(iii)(a). 

Chapter VII, Section 15(iii)(d) 

The rule text concerning a technical 

failure is being relocated from Section 

15(iii) to Section 15(iii)(d). The word 

‘‘system’’ is being capitalized as that 

term is defined within the Rulebook. As 

noted herein, Section 15(iv) is being 

relocated to Section 15(iii)(a) and 

Sections 15(iii)(a)(i). 

The Exchange believes this proposed 

rule will allow Market Makers to 

quickly compare obligations across 

Nasdaq affiliated markets.13


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34644 Federal Register / Vol. 83, No. 140 / Friday, July 20, 2018 / Notices 

14 15 U.S.C. 78f(b). 

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

16 15 U.S.C. 78f(b). 

17 15 U.S.C. 78f(b)(5). 

18 15 U.S.C. 78s(b)(3)(A)(iii). 

19 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. 

20 17 CFR 240.19b–4(f)(6). 

21 17 CFR 240.19b–4(f)(6)(iii). 

22For purposes only of waiving the operative 

delay, the Commission has considered the proposed 

rule’s impact on efficiency, competition, and capital 

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

23 15 U.S.C. 78s(b)(2)(B). 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,14 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,15

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. The 

Exchange believes that its proposed rule 

change provides further detail as to 

obligations of Market Makers, LMMs 

and Directed Market Makers on BX. The 

Exchange is not amending its current 

quoting obligations, rather the Exchange 

is proposing to amend its current rule 

text to bring greater transparency to the 

current quoting obligations by adding 

clear language which explains the 

manner in which BX will calculate the 

various quoting obligations for each 

type of Market Maker. The Exchange 

believes the proposed rule text is 

consistent with the Act because the 

proposed rule text protect investors and 

the public interest by providing clear 

language that will be utilized on all 

Nasdaq affiliate markets for easy 

comparison. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,16 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,17

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. The 

proposal does not impose a burden on 

competition because the Exchange will 

continue to uniformly calculate and 

apply the quoting obligations to all BX 

Market Makers as provided for in the 

proposed rule text. The Exchange’s 

proposal does not modify the current 

quoting obligations on BX. 

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 18 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.19

A proposed rule change filed under 

Rule 19b–4(f)(6) 20 normally does not 

become operative for 30 days after the 

date of filing. However, pursuant to 

Rule 19b–4(f)(6)(iii),21 the Commission 

may designate a shorter time if such 

action is consistent with the protection 

of investors and the public interest. In 

its filing with the Commission, the 

Exchange has asked the Commission to 

waive the 30-day operative delay so that 

the proposal to amend its Market Maker 

quoting obligations to add more detail to 

the current quoting requirements may 

become operative immediately upon 

filing. The Exchange believes that the 

proposal will bring greater transparency 

to the Exchange’s rules. The 

Commission notes that the changes are 

substantially similar to Phlx Rule 

1081(c). As such, the Commission 

believes that waiving the 30-day 

operative delay is consistent with the 

protection of investors and the public 

interest. Therefore, the Commission 

designates the proposed rule change 

operative upon filing.22

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

under Section 19(b)(2)(B) of the Act 23 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– 

BX–2018–029 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–BX–2018–029. 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–BX–2018–029 and should 

be submitted on or before August 10, 

2018. 


daltland on DSKBBV9HB2PROD with NOTICES
Federal Register / Vol. 83, No. 140 / Friday, July 20, 2018 / Notices 34645 

24 17 CFR 200.30–3(a)(12). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.24

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–15502 Filed 7–19–18; 8:45 am] 

BILLING CODE 8011–01–P 

SMALL BUSINESS ADMINISTRATION 

[Disaster Declaration #15584 and #15585; 

Texas Disaster Number TX–00500] 

Presidential Declaration of a Major 

Disaster for the State of Texas 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Notice. 

SUMMARY: This is a Notice of the 

Presidential declaration of a major 

disaster for the State of Texas (FEMA– 

4377–DR), dated 07/06/2018. 

Incident: Severe Storms and Flooding. 

Incident Period: 06/19/2018 and 

continuing. 

DATES: Issued on 07/06/2018. 

Physical Loan Application Deadline 

Date: 09/04/2018. 

Economic Injury (EIDL) Loan 

Application Deadline Date: 04/08/2019. 

ADDRESSES: Submit completed loan 

applications to: U.S. Small Business 

Administration, Processing and 

Disbursement Center, 14925 Kingsport 

Road, Fort Worth, TX 76155. 

FOR FURTHER INFORMATION CONTACT: A. 

Escobar, Office of Disaster Assistance, 

U.S. Small Business Administration, 

409 3rd Street SW, Suite 6050, 

Washington, DC 20416, (202) 205–6734. 

SUPPLEMENTARY INFORMATION: Notice is 

hereby given that as a result of the 

President’s major disaster declaration on 

07/06/2018, applications for disaster 

loans may be filed at the address listed 

above or other locally announced 

locations. 

The following areas have been 

determined to be adversely affected by 

the disaster: 

Primary Counties (Physical Damage and 

Economic Injury Loans): Cameron, 

Hidalgo 

Contiguous Counties (Economic Injury 

Loans Only): 

Texas: Brooks, Kenedy, Starr, Willacy. 

The Interest Rates are: 

Percent 

For Physical Damage: 

Homeowners with Credit Available Elsewhere ...................... 3.875 

Homeowners without Credit 

Available Elsewhere .............. 1.938 

Percent 

Businesses with Credit Available Elsewhere ...................... 7.220 

Businesses without Credit 

Available Elsewhere .............. 3.610 

Non-Profit Organizations with 

Credit Available Elsewhere ... 2.500 

Non-Profit Organizations without Credit Available Elsewhere ..................................... 2.500 

For Economic Injury: 

Businesses & Small Agricultural 

Cooperatives without Credit 

Available Elsewhere .............. 3.610 

Non-Profit Organizations without Credit Available Elsewhere ..................................... 2.500 

The number assigned to this disaster 

for physical damage is 155846 and for 

economic injury is 155850. 

(Catalog of Federal Domestic Assistance 

Number 59008) 

James Rivera, 

Associate Administrator for Disaster 

Assistance. 

[FR Doc. 2018–15587 Filed 7–19–18; 8:45 am] 

BILLING CODE 8025–01–P 

SMALL BUSINESS ADMINISTRATION 

[Disaster Declaration #15553 and #15554; 

NEW JERSEY Disaster Number NJ–00048] 

Presidential Declaration Amendment of 

a Major Disaster for Public Assistance 

Only for the State of New Jersey 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Amendment 1. 

SUMMARY: This is an amendment of the 

Presidential declaration of a major 

disaster for Public Assistance Only for 

the State of New Jersey (FEMA–4368– 

DR), dated 06/08/2018. 

Incident: Severe Winter Storm and 

Snowstorm. 

Incident Period: 03/06/2018 through 

03/07/2018. 

DATES: Issued on 07/13/2018. 

Physical Loan Application Deadline 

Date: 08/07/2018. 

Economic Injury (EIDL) Loan 

Application Deadline Date: 03/08/2019. 

ADDRESSES: Submit completed loan 

applications to: U.S. Small Business 

Administration, Processing and 

Disbursement Center, 14925 Kingsport 

Road, Fort Worth, TX 76155. 

FOR FURTHER INFORMATION CONTACT: A. 

Escobar, Office of Disaster Assistance, 

U.S. Small Business Administration, 

409 3rd Street SW, Suite 6050, 

Washington, DC 20416, (202) 205–6734. 

SUPPLEMENTARY INFORMATION: The notice 

of the President’s major disaster 

declaration for Private Non-Profit 

organizations in the State of NEW 

JERSEY, dated 06/08/2018, is hereby 

amended to include the following areas 

as adversely affected by the disaster. 

Primary Counties: Burlington 

All other information in the original 

declaration remains unchanged. 

(Catalog of Federal Domestic Assistance 

Number 59008) 

James Rivera, 

Associate Administrator for Disaster 

Assistance. 

[FR Doc. 2018–15588 Filed 7–19–18; 8:45 am] 

BILLING CODE 8025–01–P 

SMALL BUSINESS ADMINISTRATION 

[Disaster Declaration #15590 and #15591; 

WEST VIRGINIA Disaster Number WV– 

00049] 

Presidential Declaration of a Major 

Disaster for Public Assistance Only for 

the State of West Virginia 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Notice. 

SUMMARY: This is a Notice of the 

Presidential declaration of a major 

disaster for Public Assistance Only for 

the State of West Virginia (FEMA–4378– 

DR), dated 07/12/2018. 

Incident: Severe Storms, Flooding, 

Landslides, and Mudslides. 

Incident Period: 05/28/2018 through 

06/03/2018. 

DATES: Issued on 07/12/2018. 

Physical Loan Application Deadline 

Date: 09/10/2018. 

Economic Injury (EIDL) Loan 

Application Deadline Date: 04/12/2019. 

ADDRESSES: Submit completed loan 

applications to: U.S. Small Business 

Administration, Processing and 

Disbursement Center, 14925 Kingsport 

Road, Fort Worth, TX 76155. 

FOR FURTHER INFORMATION CONTACT: A. 

Escobar, Office of Disaster Assistance, 

U.S. Small Business Administration, 

409 3rd Street SW, Suite 6050, 

Washington, DC 20416, (202) 205–6734. 

SUPPLEMENTARY INFORMATION: Notice is 

hereby given that as a result of the 

President’s major disaster declaration on 

07/12/2018, Private Non-Profit 

organizations that provide essential 

services of a governmental nature may 

file disaster loan applications at the 

address listed above or other locally 

announced locations. 

The following areas have been 

determined to be adversely affected by 

the disaster: 


daltland on DSKBBV9HB2PROD with NOTICES