34896 Federal Register / Vol. 83, No. 141 / Monday, July 23, 2018 / Notices 

38 17 CFR 240.17Ad–22(e)(15)(i)–(ii). 

39 17 CFR 240.17Ad–22(e)(15)(i)–(ii). 

40 15 U.S.C. 78q–1(b)(3)(F). 

41 17 CFR 240.17Ad–22(e)(2); (e)(3)(ii); (e)(15)(i)– 

(ii). 

42 In approving the proposed rule change, the 

Commission considered the proposal’s impacts on 

efficiency, competition, and capital formation. 15 

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

43 In approving the proposed rule change, the 

Commission considered the proposal’s impacts on 

efficiency, competition, and capital formation. 15 

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

44 17 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). 

indicate the potential cost and length of 

recovery, as well as the ability to 

effectuate a wind-down within six 

months of the decision at a lower cost 

than the amount of its liquid resources, 

consistent with Rule 17Ad–22(e)(15)(i)– 

(ii).38

Therefore, the Commission finds that 

the proposed rule changes would 

determine the length of time required to 

achieve a recovery or orderly winddown of ICE Clear Europe and the 

associated costs and would further 

ensure that ICE Clear Europe holds 

liquid net assets greater than these costs, 

consistent with Rule 17Ad–22(e)(15)(i)– 

(ii).39

III. Conclusion 

On the basis of the foregoing, the 

Commission finds that the proposed 

rule changes are consistent with the 

requirements of the Exchange Act, and 

in particular, Section 17A(b)(3)(F) of the 

Exchange Act 40 and Rules 17Ad– 

22(e)(2), 17Ad–22(e)(3)(ii), 17Ad– 

22(e)(15)(i)–(ii) thereunder.41

It is therefore ordered pursuant to 

Section 19(b)(2) of the Exchange Act 

that the proposed rule change (SR– 

ICEEU–2017–016) be, and hereby is, 

approved.42

It is therefore ordered pursuant to 

Section 19(b)(2) of the Exchange Act 

that the proposed rule change (SR– 

ICEEU–2017–017) be, and hereby is, 

approved.43

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.44

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–15644 Filed 7–20–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83653; File No. SR– 

NASDAQ–2018–052] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend The 

Nasdaq Options Market LLC (‘‘NOM’’) 

Rules Relating to Market Maker 

Quotations 

July 17, 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, The Nasdaq Stock Market LLC 

(‘‘Nasdaq’’ 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 The 

Nasdaq Options Market LLC (‘‘NOM’’) 

Rules at Chapter VII, Section 6 related 

to Market Maker quotations. 

The text of the proposed rule change 

is available on the Exchange’s website at 

http://nasdaq.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 

Nasdaq proposes to amend the current 

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

related to quoting obligations, to 

restructure the current rule to conform 

to 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) 

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 NOM. 

The Exchange proposes to retitle 

Section 6(d) as ‘‘Intra-day Quotes.’’ 

The Exchange also proposes to 

remove the word ‘‘continuous’’ from 

Chapter V, Section 3(d)(iv) [sic] and 

replace that word with ‘‘intra-day.’’ The 

Exchange also proposes to amend 

Chapter X, Section 7(c) to replace the 

words ‘‘continuous bids and offers’’ 

with ‘‘intra-day quoting.’’ 

Chapter VII, Section 6(d)(i) 

The Exchange proposes to amend 

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

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 

sentence 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 


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Federal Register / Vol. 83, No. 141 / Monday, July 23, 2018 / Notices 34897 

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. 

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 

excepts 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 intraday 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.’’ 

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 Nasdaq 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 NOM 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 NOM 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 

NOM 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 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. 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 

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 

brings greater clarity to the current rule 

text and aligns the rule with that of 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. 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 


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34898 Federal Register / Vol. 83, No. 141 / Monday, July 23, 2018 / Notices 

5The Exchange intends to file a similar proposal 

for Nasdaq BX, Inc., Nasdaq ISE, LLC, Nasdaq 

GEMX, LLC and Nasdaq MRX, LLC. 

6 15 U.S.C. 78f(b). 

7 15 U.S.C. 78f(b)(5). 

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

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

10 15 U.S.C. 78s(b)(3)(A)(iii). 

11 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. 

12 17 CFR 240.19b–4(f)(6). 

13 17 CFR 240.19b–4(f)(6)(iii). 

14For 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). 15 15 U.S.C. 78s(b)(2)(B). 

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 cross-reference. 

The Exchange believes this proposed 

rule will allow Market Makers to 

quickly compare obligations across 

Nasdaq affiliated markets.5

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,6 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,7

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 on NOM. 

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 

NOM will calculate quoting obligations. 

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,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, 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 for all 

NOM Market Makers. The Exchange’s 

proposal does not modify the current 

quoting obligations on NOM. 

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 10 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.11

A proposed rule change filed under 

Rule 19b–4(f)(6) 12 normally does not 

become operative for 30 days after the 

date of filing. 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. 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.14

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 15 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– 

NASDAQ–2018–052 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–NASDAQ–2018–052. 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 


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16 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Phlx Rule 1014(b) (defining a ROT). 

4See Phlx Rule 1020 (describing the functions of 

a Specialist). 

5See Securities Exchange Act Release No. 83339 

(May 29, 2018), 83 FR 25725 (‘‘Notice’’). 

6 In Amendment No. 1 the Exchange: (1) Renumbered proposed Phlx Rule 1081 as proposed 

Phlx Rule 1085 and (2) changed the proposed crossreferences in proposed Commentary .06 to Phlx 

Rule 1080 and in Options Floor Procedure Advices 

and Order & Decorum Regulations (‘‘Floor Advice’’) 

A–9 from Phlx Rule 1081 to Phlx Rule 1085. 

Amendment No. 1 is available at https://

www.sec.gov/comments/sr-phlx-2018-40/phlx201

840-3767632-162689.pdf). 

7See Notice, supra note 5, at 25726. 

8See id. 

9Phlx Rule 1000(f)(iii). 

10See Notice, supra note 5, at 25726. 

11See id. at 25725. 

12See id. at 25726. 

13A more detailed description of the proposal 

appears in the Notice and in Amendment No. 1. 

14See Notice, supra note 5, at 25726. 

15See id. 

16See id. These procedures and limitations 

regarding the use of Snapshot are currently set forth 

in Phlx Rule 1063(e)(v), but the Exchange proposes 

to move them to a new Phlx Rule 1069, where they 

will apply broadly to ‘‘members’’ rather than only 

to Floor Brokers. 

17See id. 

18See id. at 25726–27. 

19See id. at 25726–28; Amendment No. 1, supra 

note 6. The Exchange is proposing minor alterations 

to its Rules that presently govern the use of FBMS 

by Floor Brokers to, among other things, account for 

the fact that ROTS and Specialists negotiate orders 

on the floor for their own account and do not 

represent orders on behalf of others. See Notice, 

supra note 5, at 25728. In addition, the Exchange 

is proposing several changes to remove obsolete 

Continued 

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-NASDAQ-2018–052 and 

should be submitted on or before 

August 13, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–15645 Filed 7–20–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83656; File No. SR–Phlx– 

2018–40] 

Self-Regulatory Organizations; Nasdaq 

PHLX LLC; Notice of Filing of 

Amendment No. 1, and Order Granting 

Accelerated Approval of a Proposed 

Rule Change, as Modified by 

Amendment No. 1, To Extend the 

Applicability of the Floor Broker 

Management System and the Snapshot 

Functionality to Registered Options 

Traders and Specialists 

July 17, 2018. 

I. Introduction 

On May 24, 2018, Nasdaq PHLX LLC 

(‘‘Phlx’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

extend the applicability of the Floor 

Broker Management System and the 

Snapshot functionality to Registered 

Options Traders (‘‘ROTS’’) 3 and 

Specialists.4 The proposed rule change 

was published for comment in the 

Federal Register on June 4, 2018.5 On 

June 4, 2018, the Exchange filed 

Amendment No. 1 to the proposed rule 

change.6 The Commission received no 

comment letters on the proposed rule 

change. This order provides notice of 

filing of Amendment No. 1 and 

approves the proposal, as modified by 

Amendment No. 1, on an accelerated 

basis. 

II. Description of the Proposal 

Currently, ROTs and Specialists 

executing orders in the trading crowd 

are required to record such orders and 

related execution details on paper 

trading tickets.7 ROTS and Specialists 

must then provide those matched trade 

tickets to an Exchange Data Entry 

Technician (‘‘DET’’), who manually 

enters the information written on the 

trade tickets into the Exchange’s 

electronic trading system.8 In contrast, 

unless one of five exceptions applies, 

Floor Brokers are required to enter 

orders originating in the trading crowd 

using the Exchange’s electronic order 

entry system—the ‘‘Floor Broker 

Management System’’ 9—and are not 

permitted to execute orders in the 

trading crowd. The Exchange proposes 

to change the order entry process for 

ROTS and Specialist by requiring them 

to utilize the same electronic order entry 

system that is currently used by Floor 

Brokers. To accomplish this transition, 

the Exchange proposes to change the 

name of its electronic order entry 

system from the ‘‘Floor Broker 

Management System’’ to the ‘‘Floor 

Based Management System’’ (‘‘FBMS’’) 

to reflect its expanded applicability to 

all members that operate on the 

Exchange’s trading floor—namely, Floor 

Brokers, ROT, and Specialists.10 In 

addition, the Exchange proposes to 

apply the same general obligations it 

currently imposes upon Floor Brokers 

regarding orders on the trading floor to 

ROTS and Specialists.11 The Exchange 

also proposes to extend FBMS’ 

Snapshot functionality to ROTs and 

Specialists.12 To effectuate these 

changes, the Exchange proposes several 

amendments and additions to its Rules 

and Floor Advices.13

Specifically, the Exchange proposes to 

amend Phlx Rule 1000(f) to require 

ROTs and Specialists to execute orders 

utilizing FBMS and to prohibit ROTs 

and Specialists from executing orders in 

the Exchange’s options trading crowd, 

unless one of five exceptions applies.14

These exceptions are listed in Phlx Rule 

1000(f)(iii)(A)–(E) and would permit a 

Floor Broker, ROT or Specialist to 

execute an order in the trading crowd if: 

(1) There is a problem with the 

Exchange’s systems; (2) the member is 

executing an order pursuant to Phlx 

Rule 1059 (‘‘Accommodation 

Transactions’’) or Phlx Rule 1079 

(‘‘FLEX Index, Equity, and Currency 

Options’’); (3) the transaction involves a 

multi-leg order with more than 15 legs; 

(4) the transaction involves certain splitprice orders that, due to FBMS system 

limitations, require manual calculation; 

or (5) the member elects to use of the 

Snapshot functionality to provisionally 

execute certain designated categories of 

trades, as described below.15

With respect to Snapshot, the 

Exchange proposes to allow ROTs and 

Specialists, like Floor Brokers, to use 

Snapshot to provisionally execute, in 

the options trading crowd, multi-leg 

orders and simple orders in options on 

exchange-traded funds (‘‘ETFs’’) that are 

included in the Options Penny Pilot, 

subject to the procedures for and the 

limitations to the use of Snapshot.16 The 

Exchange represents that it does not 

anticipate that the use of Snapshot by 

ROTs or Specialists will pose any 

increased or unique risks relative to its 

current use by Floor Brokers.17

Therefore, the Exchange proposes to 

utilize the same methods it currently 

uses to surveil Floor Brokers’ use of 

Snapshot to also monitor ROTs’ and 

Specialists’ uses of the Snapshot 

functionality.18

To implement the renaming of FBMS 

and the extension of FBMS (including 

its Snapshot functionality) to ROTs and 

Specialists, the Exchange also proposes 

to make changes to its Rules and Floor 

Advices, as well as to update multiple 

cross-references within its Rules and 

Floor Advices, so that its current 

requirements regarding the use of FBMS 

will apply to ROTS and Specialists.19


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