Federal Register / Vol. 80, No. 48 / Thursday, March 12, 2015 / Notices 13049 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The duration of the counting period is the same 

for all options traded on the Exchange and is 

published in an Options Trader Alert, which is 

available on the Exchange’s Web site. 

filing also will be available for 

inspection and copying at the principal 

offices of the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR– 

NYSEMKT–2015–14, and should be 

submitted on or before April 2, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2015–05607 Filed 3–11–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74453; File No. SR–Phlx– 

2015–10] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend Rule 

1082.02 and .03 

March 6, 2015. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on February 

23, 2015, NASDAQ OMX PHLX LLC 

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

Securities and Exchange Commission 

(the ‘‘Commission’’) a 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 

Rule 1082.02 and .03, as described 

below. 

The text of the proposed rule change 

is below. Proposed new language is 

italicized. Proposed deletions are in 

brackets. 

* * * * * 

Rule 1082. Firm Quotations 

(a)–(d) No change. 

.01 No change. 

.02 Locked Markets. In the event that 

an SQT, RSQT, and/or specialist’s 

electronically submitted quotations 

interact with the electronically 

submitted quotations of other SQTs, 

RSQTs and/or the specialist, resulting in 

the dissemination of a ‘‘locked’’ 

quotation (e.g., $1.00 bid—1.00 offer), 

the [following shall occur: 

(a) The Exchange will disseminate the 

locked market and both quotations will 

be deemed ‘‘firm’’ disseminated market 

quotations; 

(b) A ‘‘counting period’’ not to exceed 

.25 of one second will begin during 

which SQTs, RSQTs and/or specialists 

whose quotations are locked may 

eliminate the locked market. Provided, 

however, that in accordance with 

subparagraph (a) above, such SQT, 

RSQT and/or specialist shall be 

obligated to execute orders at their 

disseminated quotation. The duration of 

the counting period will be established 

by the Exchange, will be the same for all 

options traded on the Exchange, and 

will not exceed .25 of one second. The 

duration of the counting period will be 

published in an Options Trader Alert, 

which will be available on the 

Exchange’s Web site. 

During the counting period SQTs and 

specialists located in the Crowd Area in 

which the option that is the subject of 

the locked market is traded will 

continue to be obligated to respond to 

Floor Brokers as set forth in Rule 1014, 

Commentary .05(c), and will continue to 

be obligated for one contract in open 

outcry to other SQTs, non-SQT ROTs, 

and specialists. If at the end of the 

counting period the quotations remain 

locked, the] locked quotations will 

automatically execute against each other 

in accordance with the allocation 

algorithm set forth in Rule 1014(g)(vii). 

[The quotation that is locked may be 

executed by an order during the 

counting period.] 

.03 Crossed Markets. The Exchange 

will not disseminate an internally 

crossed market (e.g., $1.10 bid, 1.00 

offer). If an SQT, RSQT or specialist 

electronically submits a quotation [in a 

Streaming Quote Option] (‘‘incoming 

quotation’’) that would cross an existing 

quotation (‘‘existing quotation’’), the 

Exchange will[: (i)] Change the 

incoming quotation such that it locks 

the existing quotation and automatically 

execute the locked quotations against 

each other in accordance with the 

allocation algorithm set forth in Rule 

1014(g)(vii). 

[; (ii) send a notice to the SQT, RSQT 

or specialist that submitted the existing 

quotation indicating that its quotation 

was crossed; and (iii) send a notice to 

the specialist, SQT or RSQT that 

submitted the incoming quotation, 

indicating that its quotation crossed the 

existing quotation and was changed. 

Such a locked market shall be handled 

in accordance with Commentary .01 

above. During the counting period, if the 

existing quotation is cancelled 

subsequent to the time the incoming 

quotation is changed, the incoming 

quotation will automatically be restored 

to its original terms.] 

* * * * * 

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 the proposal is to 

amend two commentaries to Rule 1082 

because the timers no longer operate. 

Rule 1082.02 currently addresses what 

occurs when a Streaming Quote Trader’s 

(‘‘SQT’’), Remote SQT’s (‘‘RSQT’’), and/ 

or specialist’s electronically submitted 

quotations interact with the 

electronically submitted quotations of 

other SQTs, RSQTs and/or the 

specialist. Under this provision, the 

Exchange disseminates the resulting 

locked market and both quotations are 

deemed ‘‘firm’’ disseminated market 

quotations. Furthermore, a counting 

period not to exceed .25 of one second 

may begin during which SQTs, RSQTs 

and/or specialists whose quotations are 

locked may eliminate the locked market, 

provided, however, that such SQT, 

RSQT and/or specialist shall 

nevertheless be obligated to execute 

orders at that price. The rule provides 

that the duration of the counting period 

is established by the Exchange, will be 

the same for all options traded on the 

Exchange and will not exceed .25 of one 

second.3 In March 2010, the Exchange 

reduced this counting period to zero, 

which is within the range contemplated 

by the rule (does not exceed .25 of one 


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13050 Federal Register / Vol. 80, No. 48 / Thursday, March 12, 2015 / Notices 

4See http://www.nasdaqtrader.com/

MicroNews.aspx?id=OTA2010-16 

5 Id. 

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

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

8 15 U.S.C. 78s(b)(3)(A)(iii). 

9 17 CFR 240.19b–4(f)(6). 

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

11 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 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 requirement. 

12 17 CFR 240.19b–4(f)(6). 

13 17 CFR 240.19b–4(f)(6)(iii). 

14See Securities Exchange Act Release No. 34– 

43863 (August 23, 2002), 67 FR 55897, 55900 n.37 

(August 30, 2002) (SR–NASD–2002–56). 

15For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

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

second).4 The result is that any such 

locking quotations trade immediately 

with no delay. Accordingly, the 

Exchange is proposing to amend Rule 

1080.02 to reflect this. 

Similarly, Rule 1082.03 currently 

addresses what occurs when an SQT’s, 

RSQT’s, and/or specialist’s 

electronically submitted quotations 

cross the electronically submitted 

quotations of other SQTs, RSQTs and/or 

the specialist. Under the rule, the 

resulting crossed market is not 

disseminated, but rather the incoming 

crossing quotation is changed such that 

it locks the existing quotation and the 

crossing SQT, RSQT or specialist is 

notified thereof. The specialist, SQT or 

RSQT that submitted the existing 

quotation is notified that the quotation 

was crossed. The locked market is 

disseminated for the time of the 

counting period. In March 2010, the 

Exchange reduced this counting period 

to zero as well. The result is that any 

such crossing quotations trade 

immediately with no delay at the locked 

price.5 Accordingly, the Exchange is 

proposing to amend Rule 1080.02 [sic] 

to reflect this. As part of deleting the 

counting period respecting crossed 

quotations, the Exchange is also 

eliminating the notice to the SQT, RSQT 

or specialist that submitted the existing 

quotation indicating that its quotation 

was crossed as well as the notice to the 

specialist, SQT or RSQT that submitted 

the incoming quotation indicating that 

its quotation crossed the existing 

quotation, because such notice is no 

longer necessary. The purpose of the 

notice was to inform the SQT, RSQT or 

specialist of the counting period in case 

the SQT, RSQT or specialist sought to 

update the quotation; now that an 

automatic execution occurs, the 

quotation cannot be updated because a 

trade will already have occurred. 

The Exchange believes that 

eliminating the counting period in both 

situations is appropriate because it 

results in an immediate execution; it 

also eliminates potential firm quote 

concerns respecting those quotations 

during the counting period. 

Noting that the counting periods have 

been set to zero, the Exchange 

eliminated the counting period from its 

system altogether and is now updating 

its rule to reflect that. The Exchange 

believes that its electronic quoting 

participants (SQTs, RSQTs and 

specialists) benefit from an immediate 

execution, because they have certainty 

of what has executed right away and can 

determine how to update their quotes 

afterwards. 

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 and protect investors and the 

public interest by permitting locking 

and crossing quotations to trade 

immediately, without a delay. 

Specifically, such immediate execution 

without a delay timer should help the 

market operate more efficiently. 

Moreover, market making participants 

can submit new quotes to the 

marketplace more quickly after such 

executions. 

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. In fact, the 

immediate executions under this 

proposal should help the Exchange 

compete with other exchanges. With 

respect to intra-market competition 

among specialists, SQTs and RSQTs, 

such competition should be enhanced, 

because their respective quotations 

execute immediately, without a delay. 

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 8 and Rule 

19b–4(f)(6) thereunder.9 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 

for 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 10 and Rule 19b–4(f)(6)(iii) 

thereunder.11

A proposed rule change filed under 

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

become operative prior to 30 days after 

the date of the 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. The Exchange has asked the 

Commission to waive the 30-day 

operative delay so that the proposed 

rule change may become operative 

immediately upon filing. The 

Commission previously recognized that 

continued locking and crossing of the 

market can negatively impact market 

quality.14 The Commission notes that 

the Exchange’s proposal is designed to 

trade locked or crossed quotations 

without delay. The Commission 

believes that waiver of the operative 

delay is consistent with the protection 

of investors and the public interest 

because such waiver would allow the 

Exchange to implement a rule that 

would provide for the immediate 

execution of locked or crossed markets. 

Accordingly, the Commission hereby 

waives the 30-day operative delay and 

designates the proposal operative upon 

filing.15

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 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 48 / Thursday, March 12, 2015 / Notices 13051 

16 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)(iii). 

5Exchange Rule 1.5(aa) defines ‘‘System’’ as ‘‘the 

electronic communications and trading facility 

designated by the Board through which securities 

orders of Users are consolidated for ranking, 

execution and, when applicable, routing away.’’ 

6The term ‘‘User’’ is defined as ‘‘any Member or 

Sponsored Participant who is authorized to obtain 

access to the System pursuant to Rule 11.3.’’ See 

Exchange Rule 1.5(cc). 

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

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

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–2015–10 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–2015–10. 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 Web site (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 Web site 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 such 

filing also will be available for 

inspection and copying at the principal 

offices of the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–Phlx– 

2015–10, and should be submitted on or 

before April 2, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2015–05605 Filed 3–11–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74451; File No. SR–BYX– 

2015–14] 

Self-Regulatory Organizations; BATS 

Y-Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend Rule 11.13, 

Order Execution, To Delete References 

to the ROLF Routing Option, Which 

Routed Orders to LavaFlow ECN 

March 6, 2015. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on February 

23, 2015, BATS Y-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)(iii) 

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 the Substance 

of the Proposed Rule Change 

The Exchange filed a proposal to 

amend Rule 11.13, Order Execution, to 

delete references to the ROLF routing 

option, which routed orders to 

LavaFlow ECN. 

The text of the proposed rule change 

is available at the Exchange’s Web site 

at www.batstrading.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 parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

Rule 11.13, Order Execution, to delete 

references under subparagraphs 

(a)(3)(H) and (a)(3)(M) to the ROLF 

routing option, which routed to 

LavaFlow ECN. These changes are being 

proposed in response to LavaFlow ECN 

ceasing market operations on Friday, 

January 30, 2015. Under Rule 

11.13(a)(3)(M), an order utilizing the 

ROLF routing option first checked the 

System 5 for available shares and was 

then routed to the LavaFlow ECN. If 

shares remained unexecuted after being 

routed, they were cancelled, unless 

otherwise instructed by the User.6 In 

addition, under Rule 11.13(a)(3)(H), a 

User was able to couple the Post to 

Away routing option and ROLF routing 

option. The grouping of the Post to 

Away and ROLF routing options 

instructed the System to route and post 

the order on LavaFlow ECN. As of 

February 2, 2015, the Exchange, via 

BATS Trading, the Exchange’s affiliated 

routing broker-dealer, was no longer 

able to route orders to LavaFlow ECN 

because it ceased operations. As a 

result, the Exchange no longer offers the 

ROLF routing option nor permit it to be 

coupled with a Post to Away routing 

option. Therefore, the Exchange 

proposes to delete the ROLF routing 

option under Rule 11.13(a)(3)(M) as well 

as a reference to the ROLF routing 

option under Rule 11.13(a)(3)(H). 

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 

promote just and equitable principles of 

trade, to foster cooperation and 

coordination with persons engaged in 

facilitating transactions in securities, to 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system and, in 


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