18452 Federal Register / Vol. 80, No. 65 / Monday, April 6, 2015 / Notices 

17See note 15. 

18 15 U.S.C. 78s(b)(3)(A)(ii). 19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

recoup for certain of its connectivity 

costs, while continuing to offer 

competitive rates to NOM Participants. 

With respect to the OTTO Port and 

SQF Port Fees, the increase in the port 

fees from $600 to $750 is greater. These 

ports are utilized by NOM Market 

Makers in connection with marking 

markets. NOM Market Makers utilize 

the OTTO and SQF ports, which ports 

require a greater throughput as 

compared to the other ports mentioned 

herein. The Exchange expends greater 

resources to provide the OTTO and SQF 

ports, which is the reason for the 

increased fee as compared to other 

ports. The increased Port Fees reflect 

the increased costs that the Exchange 

bears with respect to maintaining ports. 

The Exchange does not believe these fee 

increases create an undue burden on 

competition. Moreover, the Exchange 

believes that its fee increases are 

competitive with similar fees at other 

options exchanges.17

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 foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act.18 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 

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–2015–027 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NASDAQ–2015–027. 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 

a.m. and 3 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; 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– 

NASDAQ–2015–027 and should be 

submitted on or before April 27, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–07749 Filed 4–3–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74618; File No. SR–Phlx– 

2015–29] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Proposed Rule Change To Amend and 

Restate Certain Rules That Govern the 

NASDAQ OMX PSX 

March 31, 2015. 

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 March 20, 

2015, NASDAQ OMX PHLX LLC 

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

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change as described in Items I, II, 

and III 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 

PHLX proposes to amend and restate 

certain rules that govern NASDAQ OMX 

PSX (‘‘PSX’’) in order to provide a 

clearer and more detailed description of 

certain aspects of its functionality. The 

text of the proposed rule change is 

available at nasdaq.cchwallstreet.com, 

at the Exchange’s principal office, 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, 

Phlx 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. Phlx has prepared 

summaries, set forth in Sections A, B, 

and C below, of the most significant 

aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend and 

restate certain Exchange rules that 

govern PSX in order to provide a clearer 

and more detailed description of certain 


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3See Mary Jo White, Chair, Commission, Speech 

at the Sandler O’Neill & Partners, L.P. Global 

Exchange and Brokerage Conference (June 5, 2014), 

available at http://www.sec.gov/News/Speech/

Detail/Speech/1370542004312. 

4Other definitions in current Rule 3301 are being 

superseded by descriptions of Order Types and 

Order Attributes in Rules 3301A and 3301B, or are 

being eliminated because they are no longer used. 

In addition, Rule 3305 (Order Entry Parameters) is 

being deleted because the material contained 

therein is superseded by proposed Rules 3301A and 

3301B. 

5 17 CFR 242.600. 

6 17 CFR 242.600. 

7The modified definitions of ‘‘Quotes’’ and 

‘‘Orders’’ are described below. The term 

‘‘Participant’’, which is being amended only to add 

a clarifying reference to Regulation NMS and to 

Market Makers, means an entity that fulfills the 

obligations contained in Rule 3211 regarding 

participation in the System, and includes Equities 

ECNs, Market Makers, and Order Entry Firms. 

8As provided in proposed Rule 3301B, a 

Displayed Order is an Order with a Display Order 

Attribute that allows its price and size to be 

disseminated to Participants. 

9The definition of a ‘‘System Security,’’ which is 

not being modified, includes ‘‘any NMS stock, as 

defined in SEC Rule 600 except securities 

specifically excluded from trading via a list of 

excluded securities posted on 

www.nasdaqtrader.com.’’ 

10The proposed definition further notes that in 

certain contexts, times cited in the Exchange Rules 

may be approximate. 

aspects of its functionality. The 

proposed rule change is responsive to 

the request of Commission Chair White 

that each self-regulatory organization 

(‘‘SRO’’) conduct a comprehensive 

review of each order type offered to 

members, and how it operates in 

practice.3 The Exchange believes that its 

current rules and other public 

disclosures provide a comprehensive 

description of the operation of PSX, so 

that members and the investing public 

have an accurate understanding of its 

market structure. Nevertheless, the 

Exchange has concluded that a 

restatement of certain rules will further 

enhance their clarity. In particular, the 

Exchange believes that providing 

additional examples of order type 

operation in the rule text will promote 

greater understanding of the Exchange’s 

market structure. In addition, the 

Exchange notes that certain 

functionality added to its market in past 

years has been described as an ‘‘order 

type’’ but would be more precisely 

described as an attribute that may be 

added to a particular order. 

Accordingly, the restated rules will 

distinguish between ‘‘Order Types’’ and 

‘‘Order Attributes,’’ while providing a 

full description of the Order Attributes 

that may be attached to particular Order 

Types. Except where specifically stated 

otherwise, all proposed rules are 

restatements of existing rules and 

therefore do not reflect substantive 

changes in the rule text or in the 

operation of PSX. 

General Framework for Rule 

Restatement 

At present, most of the rules 

governing Order Types and Order 

Attributes are found in Rule 3301 

(Definitions). The Exchange is 

proposing to thoroughly amend Rule 

3301. The Exchange is also proposing to 

remove definitions pertaining to Order 

Types and Order Attributes and adopt 

them as separate new Rules 3301A 

(Order Types) and 3302B (Order 

Attributes). While the Exchange is also 

proposing certain conforming changes 

to other rules, in subsequent proposed 

rule changes the Exchange plans to 

restate the remainder of the rules 

numbered 3302 through 3316 so that 

they appear sequentially following Rule 

3301B. 

Definitions 

Amended Rule 3301 will adopt 

revised definitions applicable to the 

Rule 3200 and 3300 Series of the 

Exchange rules: 4

• The terms ‘‘Best Bid’’, ‘‘Best Offer’’, 

‘‘National Best Bid and National Best 

Offer’’, ‘‘Protected Bid’’, ‘‘Protected 

Offer’’, ‘‘Protected Quotation’’, and 

‘‘Intermarket Sweep Order’’ shall have 

the meanings assigned to them under 

Rule 600 under SEC Regulation NMS; 5 6

[sic] provided, however, that the terms 

‘‘Best Bid’’, ‘‘Best Offer’’, ‘‘Protected 

Bid’’, ‘‘Protected Offer’’, and ‘‘Protected 

Quotation’’ shall, unless otherwise 

stated, refer to the bid, offer, or 

quotation of a market center other than 

PSX. The term ‘‘NBBO’’ shall mean the 

‘‘National Best Bid and National Best 

Offer’’. 

• The term ‘‘PSX,’’ or ‘‘System’’, 

which defines the components of the 

securities execution and trade reporting 

system owned and operated by the 

Exchange, is being modified to state that 

the System includes a montage for 

‘‘Quotes’’ and ‘‘Orders’’, referred to as 

the ‘‘PSX Book’’, that collects and ranks 

all Quotes and Orders submitted by 

‘‘Participants’’.7 The definition is 

further being modified to make it clear 

that data feeds made available with 

respect to the System disseminate 

depth-of-book data regarding Quotes 

and ‘‘Displayed’’ Orders 8 and also such 

additional information about Quotes, 

Orders, and transactions within the 

System as shall be reflected in the 

Exchange Rules. 

• The term ‘‘Quote’’ is being modified 

to make it clear that a Quote is an Order 

with Attribution (as defined in Rule 

3301B) entered by a Market Maker or 

Equities ECN for display (price and size) 

next to the Participant’s MPID in the 

PSX Book. Accordingly, all Quotes are 

also Orders. 

• The definition of the term ‘‘Order’’ 

is being amended to mean an 

instruction to trade a specified number 

of shares in a specified System 

Security 9 submitted to the System by a 

Participant. An ‘‘Order Type’’ is a 

standardized set of instructions 

associated with an Order that define 

how it will behave with respect to 

pricing, execution, and/or posting to the 

PSX Book when submitted to the 

Exchange. An ‘‘Order Attribute’’ is a 

further set of variable instructions that 

may be associated with an Order to 

further define how it will behave with 

respect to pricing, execution, and/or 

posting to the PSX Book when 

submitted to the Exchange. The 

available Order Types and Order 

Attributes, and the Order Attributes that 

may be associated with particular Order 

Types, are described in Rules 3301A 

and 3301B. 

• The term ‘‘ET’’ means Eastern 

Standard Time or Eastern Daylight 

Time, as applicable. 

• The term ‘‘Market Hours’’ is being 

defined to mean the period of time 

beginning at 9:30 a.m. ET and ending at 

4 p.m. ET (or such earlier time as may 

be designated by the Exchange on a day 

when PSX closes early). The term 

‘‘System Hours’’ means the period of 

time beginning at 8 a.m. ET and ending 

at 5 p.m. ET (or such earlier time as may 

be designated by the Exchange on a day 

when PSX closes early). The term ‘‘PreMarket Hours’’ means the period of time 

beginning at 8 a.m. ET and ending 

immediately prior to the 

commencement of Market Hours. The 

term ‘‘Post-Market Hours’’ means the 

period of time beginning immediately 

after the end of Market Hours and 

ending at 5 p.m. ET.10

• The term ‘‘marketable’’ with respect 

to an Order to buy (sell) means that, at 

the time it is entered into the System, 

the Order is priced at the current Best 

Offer or higher (at the current Best Bid 

or lower). 

• The term ‘‘market participant 

identifier’’ or ‘‘MPID’’ means a unique 

four-letter mnemonic assigned to each 

Participant in the System. A Participant 

may have one or more than one MPID. 

• The term ‘‘minimum price 

increment’’ means $0.01 in the case of 

a System Security priced at $1 or more 

per share, and $0.0001 in the case of a 

System Security priced at less than $1 

per share. 

• The definition of the term ‘‘System 

Book Feed’’, which means a data feed 


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11 It should be noted that Rule 3213(e), the 

Exchange’s rule with respect to locked and crossed 

markets, as adopted pursuant to Rule 610(d) under 

Regulation NMS and approved by the Commission, 

applies only during Market Hours (approved in 

Securities Exchange Act Release No. 62877 

(September 9, 2010), 75 FR 56633 (September 16, 

2010) (SR-Phlx-2010–79)). Note also that Rule 600 

under Regulation NMS defines a ‘‘trade-through’’ as 

‘‘the purchase or sale of an NMS stock during 

regular trading hours, either as principal or agent, 

at a price that is lower than a protected bid or 

higher than a protected offer.’’ ‘‘Regular trading 

hours’’ are defined, in pertinent part, as ‘‘the time 

between 9:30 a.m. and 4 p.m. Eastern Time.’’ 17 

CFR 242.600. 

12These Order Types are described below and in 

proposed Rule 3301A. 

13The Routing Order Attribute is described 

below, in proposed Rule 3301B, and in current Rule 

3315. 

14Available Times-in-Force are described below 

and in proposed Rule 3301B. 

15Accordingly, there are no circumstances in 

which an Order that was previously entered but not 

displayed on the PSX Book would be displayed 

without also receiving a new timestamp, and thus 

no possibility for a Participant to ‘‘jump the queue’’ 

with respect to other Orders. 

The Exchange is amending Rule 3306 to make it 

clear that the redesignation of a sell Order as a long 

sale, short sale, or exempt short sale can be done 

only with respect to Orders entered through OUCH 

or FLITE; Orders entered through RASH or FIX 

would have to be cancelled and reentered to change 

their designation. Similarly, Rule 3306 is being 

amended to clarify that modification of an Order by 

the Participant to decrease its size is not possible 

with respect to a Pegged Order (including a 

Discretionary Order that is Pegged). Such an Order 

would have to be cancelled and reentered by the 

Participant to reduce its size. 

16The Pegging Order Attribute adjusts the price 

of the Order based on changes in the NBBO and is 

described below and in proposed Rule 3301B. 

17The Reserve Size Order Attribute is described 

below and in Rule 3301B. 18This is the case because when Orders are 

repriced, multiple instructions to reprice are sent 

simultaneously through multiple System gateways 

in order to modify the Orders as quickly as possible 

and thereby minimize the possibility that they will 

be disadvantaged vis-a`-vis newly entered Orders. 19 Governing handling of Price to Comply and 

Post-Only Orders when formerly unavailable price 

levels become available. 

for System Securities, is being amended 

to clarify that it is the data feed 

generally known as the PSX TotalView 

ITCH feed. 

Order Types 

Proposed Rule 3301A provides that 

Participants may express their trading 

interest in PSX by entering Orders. PSX 

offers a range of Order Types that 

behave in the manner specified for each 

particular Order Type. Each Order Type 

may be assigned certain Order 

Attributes that further define its 

behavior. All Order Types and Order 

Attributes operate in a manner that is 

reasonably designed to comply with the 

requirements of Rules 610 and 611 

under Regulation NMS. Specifically, 

Orders are reasonably designed to 

prevent trade-throughs of Protected 

Quotations to the extent required by 

Rule 611 under Regulation NMS, and to 

prevent the display of quotations that 

lock or cross Protected Quotations to the 

extent required by Rule 610 under 

Regulation NMS.11 Each Order must 

designate whether it is to effect a buy, 

a long sale, a short sale, or an exempt 

short sale. 

Proposed Rule 3301A further provides 

that the Exchange maintains several 

communications protocols for 

Participants to use in entering Orders 

and sending other messages to the 

System: 

• OUCH is an Exchange proprietary 

protocol. 

• RASH is an Exchange proprietary 

protocol. 

• FLITE is an Exchange proprietary 

protocol. 

• FIX is a non-proprietary protocol. 

Except where otherwise stated, all 

protocols are available for all Order 

Types and Order Attributes. 

Upon entry, an Order is processed to 

determine whether it may execute 

against any contra-side Orders on the 

PSX Book in accordance with the 

parameters applicable to the Order Type 

and Order Attributes selected by the 

Participant and in accordance with the 

priority for Orders on the PSX Book as 

provided in Rule 3307. Thus, for 

example, a ‘‘Price to Comply Order’’ 

would be evaluated for potential 

execution in accordance with different 

criteria than a ‘‘Post-Only Order.’’ 12 In 

addition, the Order may have its price 

adjusted in accordance with applicable 

parameters and may be routed to other 

market centers for potential execution if 

designated as ‘‘Routable.’’ 13 The Order 

may then be posted to the PSX Book if 

consistent with the parameters of the 

Order Type and Order Attributes 

selected by the Participant. For 

example, an Order with a ‘‘Time-inForce’’ of ‘‘Immediate or Cancel’’ would 

not be posted.14

Thereafter, as detailed in proposed 

Rules 3301A and 3301B, and current 

Rule 3315 (Order Routing), there are 

numerous circumstances in which the 

Order on the PSX Book may be modified 

and receive a new timestamp. The sole 

instances in which the modification of 

an Order on the PSX Book will not 

result in a new timestamp are: (i) A 

decrease in the size of the Order due to 

execution or modification by the 

Participant or by the System, and (ii) a 

redesignation of a sell Order as a long 

sale, a short sale, or an exempt short 

sale.15 Whenever an Order receives a 

new timestamp for any reason, it is 

processed by the System as a new Order 

with respect to potential execution 

against Orders on the PSX Book, price 

adjustment, routing, reposting to the 

PSX Book, and subsequent execution 

against incoming Orders, except where 

otherwise stated. Thus, for example, if 

an Order with a ‘‘Pegging’’ Order 

Attribute had its price changed due to 

a change in the NBBO,16 it would be 

processed by the System as a new Order 

with respect to potential execution, 

price adjustment, routing, reposting to 

the PSX Book, and subsequent 

execution against incoming Orders. An 

exception to the general rule is noted in 

Rule 3301B(h) with respect to Orders 

with ‘‘Reserve Size’’ 17 that have a 

Routing Order Attribute; such Orders 

are not routed if reentered due to a 

replenishment of the Order’s Displayed 

Size. 

In addition, the proposed rule notes 

that all Orders are also subject to 

cancellation and/or repricing and 

reentry onto the PSX Book in the 

circumstances described in Rule 

3100(a)(5) (providing for compliance 

with Plan to Address Extraordinary 

Market Volatility) and Rule 3303 

(providing for compliance with 

Regulation SHO). In all circumstances 

where an Order is repriced pursuant to 

those provisions, it is processed by the 

System as a new Order with respect to 

potential execution against Orders on 

the PSX Book, price adjustment, 

routing, reposting to the PSX Book, and 

subsequent execution against incoming 

Orders. If multiple Orders at a given 

price are repriced, the Order in which 

they are reentered is random, based on 

the respective processing time for each 

such Order; 18 provided, however, that 

in the case of Price to Comply Orders 

and Post-Only Orders that have their 

prices adjusted upon entry because they 

lock a Protected Quotation but that are 

subsequently displayed at their original 

entered limit price as provided in Rules 

4702(b)(1)(B) and (4)(B),19 they are 

processed in accordance with the time 

priority under which they were 

previously ranked on the PSX Book. If 

an Order is repriced and/or reentered 

10,000 times for any reason, the Order 

will be cancelled. This restriction is 

designed to conserve System resources 

by limiting the persistence of Orders 

that update repeatedly without any 

reasonable prospect of execution. 

Proposed Rule 3301A further 

describes the behavior of each Order 

Type. Except where otherwise stated, 

each Order Type is available to all 

Participants, although certain Order 

Types and Order Attributes may require 

the use of a specific protocol. As a 

result, a Participant would be required 

to use that protocol in order to use 

Order Types and Order Attributes 


tkelley on DSK4VPTVN1PROD with NOTICES
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20See Rules 3301B(f) and 3315. 

21Unless the incoming Order was an Order Type 

that was not immediately executable, in which case 

the incoming Order would behave in the manner 

specified for that Order Type. For example, as 

discussed below, a Post-Only Order to sell priced 

at $11 would be repriced and posted at $11.01. 

22See supra n. 10. 

23This means that, in general, the price of the 

Price to Comply Order will move toward, but not 

away from, its original entered limit price. Because 

a Price to Comply Order is removed from the PSX 

Book while it is being repriced, however, it is 

possible that the Order’s price will move away from 

its original entered limit price in the case of a ‘‘race 

condition’’ where the NBBO changes again while 

the Order is not on the PSX Book. 

24Thus, the price of the Order will not move 

beyond its limit price. 

available through it. Moreover, a small 

number of Order Types and Order 

Attributes are available only to 

registered Market Makers in the security 

for which they are registered. 

Price to Comply Order 

The Price to Comply Order is an 

Order Type designed to comply with 

Rule 610(d) under Regulation NMS by 

having its price and display 

characteristics adjusted to avoid the 

display of quotations that lock or cross 

any Protected Quotation in a System 

Security during Market Hours. The Price 

to Comply Order is also designed to 

provide potential price improvement. 

PSX does not have a ‘‘plain vanilla’’ 

limit order that attempts to execute at its 

limit price and is then posted at its price 

or rejected if it cannot be posted; rather, 

the Price to Comply Order, with its 

price and display adjustment features, is 

one of the primary Order Types used by 

Participants to access and display 

liquidity in the System. The price and 

display adjustment features of the Order 

Type enhance efficiency and investor 

protection by offering an Order Type 

that first attempts to access available 

liquidity and then to post the remainder 

of the Order at prices that are designed 

to maximize their opportunities for 

execution. 

When a Price to Comply Order is 

entered, the Price to Comply Order will 

be executed against previously posted 

Orders on the PSX Book that are priced 

equal to or better than the price of the 

Price to Comply Order, up to the full 

amount of such previously posted 

Orders, unless such executions would 

trade through a Protected Quotation. 

Any portion of the Order that cannot be 

executed in this manner will be posted 

on the PSX Book (and/or routed if it has 

been designated as Routable).20

During Market Hours, the price at 

which a Price to Comply Order is posted 

is determined in the following manner. 

If the entered limit price of the Price to 

Comply Order would lock or cross a 

Protected Quotation and the Price to 

Comply Order could not execute against 

an Order on the PSX Book at a price 

equal to or better than the price of the 

Protected Quotation, the Price to 

Comply Order will be displayed on the 

PSX Book at a price one minimum price 

increment lower than the current Best 

Offer (for a Price to Comply Order to 

buy) or higher than the current Best Bid 

(for a Price to Comply Order to sell) but 

will also be ranked on the PSX Book 

with a non-displayed price equal to the 

current Best Offer (for a Price to Comply 

Order to buy) or to the current Best Bid 

(for a Price to Comply Order to sell). 

The posted Order will then be available 

for execution at its non-displayed price, 

thus providing opportunities for price 

improvement to incoming Orders. 

For example, if a Price to Comply 

Order to buy at $11 would lock a 

Protected Offer of $11, the Price to 

Comply Order will be ranked at a nondisplayed price of $11 but will be 

displayed at $10.99. An incoming Order 

to sell at a price of $11 or lower would 

execute against the Price to Comply 

Order at $11.21

During Pre-Market Hours and PostMarket Hours, a Price to Comply Order 

will be ranked and displayed at its 

entered limit price without adjustment. 

This is the case because PSX’s rule with 

respect to locked and crossed markets, 

as adopted pursuant to Rule 610(d) 

under Regulation NMS and approved by 

the Commission, applies only during 

Market Hours.22

Depending on the protocol used to 

enter a Price to Comply Order, 

Participants have different options with 

respect to adjustment of the Price to 

Comply Order following its initial entry 

and posting to the PSX Book. 

Specifically, if a Price to Comply Order 

is entered through RASH or FIX, during 

Market Hours the price of the Price to 

Comply Order will be adjusted in the 

following manner after initial entry and 

posting to the PSX Book (unless the 

Order is assigned a Routing Order 

Attribute that would cause it to be 

routed to another market center rather 

than remaining on the PSX Book): 

• If the entered limit price of the 

Price to Comply Order locked or crossed 

a Protected Quotation and the NBBO 

changes, the displayed and nondisplayed price of the Price to Comply 

Order will be adjusted repeatedly in 

accordance with changes to the NBBO; 

provided, however, that if the quotation 

of another market center moves in a 

manner that would lock or cross the 

displayed price of a Price to Comply 

Order, the prices of the Price to Comply 

Order will not be adjusted. For example, 

if a Price to Comply Order to buy at 

$11.02 would cross a Protected Offer of 

$11, the Order will be ranked at a nondisplayed price of $11 but will be 

displayed at $10.99. If the Best Offer 

then moves to $11.01, the displayed 

price will be changed to $11 and the 

Order will be ranked at a non-displayed 

price of $11.01. However, if another 

market center then displays an offer of 

$11 (thereby locking the previously 

displayed price of the Price to Comply 

Order, notwithstanding Rule 610(d) 

under Regulation NMS), the price of the 

Price to Comply Order will not be 

changed.23 The Order may be repriced 

repeatedly until such time as the Price 

to Comply Order is able to be ranked 

and displayed at its original entered 

limt price ($11.02 in the example). The 

Price to Comply Order receives a new 

timestamp each time its price is 

changed. 

• If the original entered limit price of 

the Price to Comply Order would no 

longer lock or cross a Protected 

Quotation, the Price to Comply Order 

will be ranked and displayed at that 

price and will receive a new timestamp, 

and will not thereafter be adjusted 

under this provision.24

If a Price to Comply Order is entered 

through OUCH or FLITE, during Market 

Hours the price of the Price to Comply 

Order may be adjusted in the following 

manner after initial entry and posting to 

the PSX Book: 

• If the entered limit price of the 

Price to Comply Order crossed a 

Protected Quotation and the NBBO 

changes so that the Price to Comply 

Order could be displayed at a price at 

or closer to its entered limit price 

without locking or crossing a Protected 

Quotation, the Price to Comply Order 

may either remain on the PSX Book 

unchanged or may be cancelled back to 

the Participant, depending on its choice. 

For example, if a Price to Comply Order 

to buy at $11.02 would cross a Protected 

Offer of $11, the Order will be ranked 

at a non-displayed price of $11 but will 

be displayed at $10.99. If the Best Offer 

changes to $11.01, the Order will not be 

repriced, but rather will either remain 

with a displayed price of $10.99 but 

ranked at a non-displayed price of $11 

or be cancelled back to the Participant, 

depending on its choice. A Participant’s 

choice with regard to maintaining the 

Price to Comply Order or cancelling it 

is set in advance for each port through 

which the Participant enters Orders. 

• If the entered limit price of the 

Price to Comply Order locked a 

Protected Quotation, the price of the 

Price to Comply Order will be adjusted 

after initial entry only as follows. If the 


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25Thus, the price of the Order will not move 

beyond its limit price. 

26As a result, it is possible that a new Order that 

is entered while previously booked Orders are being 

repriced may be place on the PSX Book ahead of 

them. 

27As discussed below, IOC is a Time-in-Force 

under which an Order is evaluated to determine if 

it is marketable, with unexecuted shares cancelled. 

A Price to Comply Order entered with a Time-inForce of IOC would be accepted but would be 

processed as a Non-Displayed Order with a Timein-Force of IOC. 

28Primary Pegging, Market Pegging, and 

Discretion are discussed below and in proposed 

Rule 3301B. 

29As described below and in proposed Rule 

3301B, Attribution is an Order Attribute that allows 

for display of the price and size of an Order next 

to a Market Maker’s MPID. In the current rule, the 

Price to Display Order is referred to as the ‘‘Price 

to Comply Post Order.’’ The fact that this Order 

Type is Attributable and available only to registered 

Market Makers reflects a substantive clarification to 

the language of the existing rule. 

30See Rules 3301B(f) and 3315. 

31These adjustments reflect a substantive 

clarification to the language of the existing rule. 

32This means that, in general, the price of the 

Price to Display Order will move toward, but not 

away from, its original entered limit price. Because 

a Price to Display Order is removed from the PSX 

Book while it is being repriced, however, it is 

possible that the Order’s price will move away from 

its original entered limit price in the case of a ‘‘race 

entered limit price would no longer lock 

a Protected Quotation, the Price to 

Comply Order may either remain on the 

PSX Book unchanged, may be cancelled 

back to the Participant, or may be 

ranked and displayed at its original 

entered limit price, depending on the 

Participant’s choice. For example, if a 

Price to Comply Order to buy at $11 

would lock a Protected Offer of $11, the 

Price to Comply Order will be ranked at 

a non-displayed price of $11 but will be 

displayed at $10.99. If the Best Offer 

changes to $11.01, the Price to Comply 

Order may either remain with a 

displayed price of $10.99 but ranked at 

a non-displayed price of $11, be 

cancelled back to the Participant, or be 

ranked and displayed at $11, depending 

on the Participant’s choice. A 

Participant’s choice with regard to 

maintaining the Price to Comply Order, 

cancelling it, or allowing it to be 

displayed is set in advance for each port 

through which the Participant enters 

Orders. If the Price to Comply Order is 

ranked and displayed at its original 

entered limit price, it will receive a new 

timestamp and will not thereafter be 

adjusted under this provision.25

With regard to the foregoing options, 

it is important to emphasize that the 

Price to Comply Order receives a new 

timestamp whenever its price is 

changed, and also receives a new 

timestamp if the Price to Comply Order 

would no longer lock a Protected 

Quotation and is therefore displayed at 

its original entered limit price. Thus, 

there are no circumstances under which 

a Price to Comply Order that originally 

locked or crossed a Protected Quotation 

would ‘‘jump the queue’’ and be 

displayed at its original entered limit 

price while retaining its original time 

priority. In fact, as discussed throughout 

this filing, PSX does not offer any 

functionality that enables a Participant 

to ‘‘jump the queue’’ by displaying a 

previously entered non-displayed 

Orders without also receiving a new 

timestamp.26

The following Order Attributes may 

be assigned to a Price to Comply Order. 

The effect of each Order Attribute is 

discussed in detail below with respect 

to proposed new Rule 3301B. 

• Price. As described above, the price 

of the Order may be adjusted to avoid 

locking or crossing a Protected 

Quotation, and may include a displayed 

price as well as a non-displayed price. 

• Size. 

• Reserve Size (available through 

RASH and FIX only). 

• A Time-in-Force other than 

‘‘Immediate or Cancel’’ (‘‘IOC’’).27

• Designation as an ‘‘ISO’’. In 

accordance with Regulation NMS, a 

Price to Comply Order designated as an 

ISO would be processed at its entered 

limit price, since such a designation 

reflects a representation by the 

Participant that it has simultaneously 

routed one or more additional limit 

orders, as necessary, to execute against 

the full displayed size of any Protected 

Quotations that the Price to Comply 

Order would lock or cross. 

• Routing (available through RASH 

and FIX only). 

• ‘‘Primary Pegging’’ and ‘‘Market 

Pegging’’ (available through RASH and 

FIX only). 

• ‘‘Discretion’’ (available through 

RASH and FIX only).28

• Display. A Price to Comply Order is 

always displayed, although, as provided 

above, it may also have a non-displayed 

price and/or Reserve Size. 

Price to Display Order 

A ‘‘Price to Display Order’’ is an 

Order Type designed to comply with 

Rule 610(d) under Regulation NMS by 

avoiding the display of quotations that 

lock or cross any Protected Quotation in 

a System Security during Market Hours. 

Price to Display Orders are available 

solely to Participants that are Market 

Makers for System Securities and are 

always attributable.29 Like a Price to 

Comply Order, a Price to Display Order 

is another form of priced Order that first 

accesses available liquidity and then 

posts remaining shares, with price 

adjustment features similar to those of 

the Price to Comply Order that provide 

a means to post displayed Orders at 

prices that are designed to maximize 

their opportunities for execution. 

When a Price to Display Order is 

entered, if its entered limit price would 

lock or cross a Protected Quotation, the 

Price to Display Order will be repriced 

to one minimum price increment lower 

than the current Best Offer (for a Price 

to Display Order to buy) or higher than 

the current Best Bid (for a Price to 

Display Order to sell). For example, if a 

Price to Display Order to buy at $11 

would cross a Protected Offer of $10.99, 

the Price to Display Order will be 

repriced to $10.98. The Price to Display 

Order (whether repriced or not repriced) 

will then be executed against previously 

posted Orders on the PSX Book that are 

priced equal to or better than the 

adjusted price of the Price to Display 

Order, up to the full amount of such 

previously posted Orders, unless such 

executions would trade through a 

Protected Quotation. Any portion of the 

Order that cannot be executed in this 

manner will be posted on the PSX Book 

(and/or routed if it has been designated 

as Routable).30

During Market Hours, the price at 

which a Price to Display Order is 

displayed and ranked on the PSX Book 

will be its entered limit price if the Price 

to Display Order was not repriced upon 

entry, or the adjusted price if the Price 

to Comply Order was repriced upon 

entry, such that the price will not lock 

or cross a Protected Quotation. During 

Pre-Market Hours and Post-Market 

Hours, a Price to Display Order will be 

displayed and ranked at its entered limit 

price without adjustment. 

As is the case with a Price to Comply 

Order, a Price to Display Order may be 

adjusted after initial entry.31

Specifically, if a Price to Display Order 

is entered through RASH or FIX, during 

Market Hours the Price to Display Order 

may be adjusted in the following 

manner after initial entry and posting to 

the PSX Book (unless the Order is 

assigned a Routing Order Attribute that 

would cause it to be routed to another 

market center rather than remaining on 

the PSX Book): 

• If the entered limit price of the 

Price to Display Order locked or crossed 

a Protected Quotation and the NBBO 

changes, the price of the Order will be 

adjusted repeatedly in accordance with 

changes to the NBBO; provided, 

however, that if the quotation of another 

market center moves in a manner that 

would lock or cross the price of a Price 

to Display Order, the price of the Price 

to Display Order will not be adjusted.32


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condition’’ where the NBBO changes again while 

the Order is not on the PSX Book. 

33Thus, the price of the Order will not move 

beyond its limit price. 

34A Price to Display Order entered with a Timein-Force of IOC would be processed as a NonDisplayed Order with a Time-in-Force of IOC. 

35The availability of routing for Price to Display 

Orders reflects a substantive clarification to the 

language of the existing rule. 

36Rule 611 requires exchanges to adopt rules that 

‘‘require . . . members reasonably to avoid . . . 

[d]isplaying quotations that lock or cross any 

protected quotations’’ (emphasis added). Similarly, 

under Rule 600, a Non-Displayed Order is not a 

Protected Quotation because it is not displayed. 

Accordingly, the definition of trade-through does 

not apply to a transaction at a price that is worse 

than the price of a Non-Displayed Order. Thus, in 

opting to use a Non-Displayed Order, a Participant 

must balance the benefits of not disclosing its 

trading intentions against the loss of trade-through 

protection. However, because a Non-Displayed 

Order may not itself trade-through a Protected 

Quotation, as described below, the System protects 

against such trade-throughs by repricing and/or 

cancelling Non-Displayed Orders that cross or are 

crossed by a Protected Quotation. 

37See Rules 3301B(f) and 3315. 

38Repricing the crossing Non-Displayed Order 

helps ensure that the Non-Displayed Order will not 

trade-through the Protected Quotation. 

39These adjustments reflect a substantive 

clarification to the language of the existing rule. 

For example, if a Price to Display Order 

to buy at $11.02 would cross a Protected 

Offer of $11, the Order will be displayed 

and ranked at $10.99. If the Best Offer 

then moves to $11.01, the displayed/

ranked price will be changed to $11. 

However, if another market center then 

displays an offer of $11 (thereby locking 

the previously displayed price of the 

Price to Display Order, notwithstanding 

Rule 610(d) under Regulation NMS), the 

price of the Price to Display Order will 

not be changed. The Order may be 

repriced repeatedly until such time as 

the Price to Display Order is able to be 

displayed and ranked at its original 

entered limit price ($11.02 in the 

example). The Price to Display Order 

receives a new timestamp each time its 

price is changed. 

• If the original entered limit price of 

the Price to Display Order would no 

longer lock or cross a Protected 

Quotation, the Price to Display Order 

will be displayed and ranked at that 

price and will receive a new timestamp, 

and will not thereafter be adjusted 

under this provision.33

If a Price to Display Order is entered 

through OUCH or FLITE, during Market 

Hours the Price to Display Order may be 

adjusted in the following manner after 

initial entry and posting to the PSX 

Book: 

• If the entered limit price of the 

Price to Display Order locked or crossed 

a Protected Quotation and the NBBO 

changes so that the Price to Display 

Order could be ranked and displayed at 

a price at or closer to its original entered 

limit price without locking or crossing 

a Protected Quotation, the Price to 

Display Order may either remain on the 

PSX Book unchanged or may be 

cancelled back to the Participant, 

depending on the Participant’s choice. 

For example, if a Price to Display Order 

to buy at $11.02 would cross a Protected 

Offer of $11, the Order will be ranked 

and displayed at $10.99. If the Best 

Offer changes to $11.01, the Price to 

Display Order will not be repriced, but 

rather will either remain at its current 

price or be cancelled back to the 

Participant, depending on its choice. A 

Participant’s choice with regard to 

maintaining the Price to Display Order 

or cancelling it is set in advance for 

each port through which the Participant 

enters Orders. 

The following Order Attributes may 

be assigned to a Price to Display Order: 

• Price. As described above, the price 

of the Order may be adjusted to avoid 

locking or crossing a Protected 

Quotation. 

• Size. 

• Reserve Size (available through 

RASH and FIX only). 

• A Time-in-Force other than IOC.34

• Designation as an ISO. In 

accordance with Regulation NMS, a 

Price to Display Order designated as an 

ISO would be processed at its entered 

limit price, since such a designation 

reflects a representation by the 

Participant that it has simultaneously 

routed one or more additional limit 

orders, as necessary, to execute against 

the full displayed size of any Protected 

Quotations that the Price to Display 

Order would lock or cross. 

• Routing (available through RASH 

and FIX only).35

• Primary Pegging and Market 

Pegging (available through RASH and 

FIX only). 

• Discretion (available through RASH 

and FIX only). 

• Attribution. All Price to Display 

Orders are Attributable Orders. 

• Display. A Price to Display Order is 

always displayed (but may also have 

Reserve Size). 

Non-Displayed Order 

A ‘‘Non-Displayed Order’’ is an Order 

Type that is not displayed to other 

Participants, but nevertheless remains 

available for potential execution against 

incoming Orders until executed in full 

or cancelled. Thus, the Order Type 

provides a means by which Participants 

may access and/or offer liquidity 

without signaling to other Participants 

the extent of their trading interest. The 

Order may also serve to provide price 

improvement vis-a`-vis the NBBO. Under 

Regulation NMS, a Non-Displayed 

Order may lock a Protected Quotation 

and may be traded-through by other 

market centers.36 In addition to the NonDisplayed Order Type, there are other 

Order Types that are not displayed on 

the PSX Book. Thus, ‘‘Non-Display’’ is 

both a specific Order Type and an Order 

Attribute of certain other Order Types. 

When a Non-Displayed Order is 

entered, the Non-Displayed Order will 

be executed against previously posted 

Orders on the PSX Book that are priced 

equal to or better than the price of the 

Non-Displayed Order, up to the full 

amount of such previously posted 

Orders, unless such executions would 

trade through a Protected Quotation. 

Any portion of the Non-Displayed Order 

that cannot be executed in this manner 

will be posted to the PSX Book (unless 

the Non-Displayed Order has a Time-inForce of IOC) and/or routed if it has 

been designated as Routable.37

During Market Hours, the price at 

which a Non-Displayed Order is posted 

is determined in the following manner. 

If the entered limit price of the NonDisplayed Order would lock a Protected 

Quotation, the Non-Displayed Order 

will be placed on the PSX Book at the 

locking price. If the Non-Displayed 

Order would cross a Protected 

Quotation, the Non-Displayed Order 

will be repriced to a price that would 

lock the Protected Quotation and will be 

placed on the PSX Book at that price.38

For example, if a Non-Displayed Order 

to buy at $11 would cross a Protected 

Offer of $10.99, the Non-Displayed 

Order will be repriced and posted at 

$10.99. A Non-Displayed Order to buy 

at $10.99 would also be posted at 

$10.99. During Pre-Market Hours and 

Post-Market Hours, a Non-Displayed 

Order will be posted at its entered limit 

price without adjustment. 

As is the case with a Price to Comply 

Order, a Non-Displayed Order may be 

adjusted after initial entry.39

Specifically, if a Non-Displayed Order is 

entered through RASH or FIX, during 

Market Hours the Non-Displayed Order 

may be adjusted in the following 

manner after initial entry and posting to 

the PSX Book (unless the Order is 

assigned a Routing Order Attribute that 

would cause it to be routed to another 

market center rather than remaining on 

the PSX Book): 

• If the original entered limit price of 

a Non-Displayed Order is higher than 

the Best Offer (for an Order to buy) or 

lower than the Best Bid (for an Order to 

sell) and the NBBO moves toward the 

original entered limit price of the NonDisplayed Order, the price of the NonVerDate Sep<11>2014 18:14 Apr 03, 2015 Jkt 235001 PO 00000 Frm 00106 Fmt 4703 Sfmt 4703 E:\FR\FM\06APN1.SGM 06APN1

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40Note that because the Order receives a new 

timestamp, it is processed like a new Order when 

it is repriced. 

41 Id. As noted above, the cancellation of a NonDisplayed Order in this circumstance helps ensure 

that the Non-Displayed Order will not trade through 

a Protected Quotation. 

42Midpoint Pegging is described below and in 

proposed Rule 3301B. Specifically, an Order with 

the Midpoint Pegging Attribute that is entered 

through OUCH or FLITE is priced upon entry but 

is not repriced based on changes to the NBBO. 

Accordingly, the Order is cancelled if it is no longer 

at the midpoint between the NBBO. 

43The Minimum Quantity Order Attribute is 

described below and in proposed Rule 3301B. 

44For example, if a Non-Displayed Order to buy 

at $11 would lock the price of a Protected Offer at 

$11, the Non-Displayed Order could be posted at 

$11 regardless of whether it was marked as an ISO. 

Accordingly, even if the Non-Displayed Order was 

marked as an ISO, the System would not accept a 

Displayed Order priced at $11 unless (i) the 

Displayed Order was itself marked as an ISO, or (ii) 

market data received by the System demonstrated 

that the Protected Offer had been removed. 

45Pegging to the Midpoint is described below and 

in proposed Rule 3301B. The full functionality of 

Midpoint Pegging is available through RASH and 

FIX, and more limited functionality is available 

through OUCH and FLITE. 

46Securities Exchange Act Release No. 73333 

(October 9, 2014), 79 FR 62223 (October 16, 2014) 

(SR–NYSE–2014–32 and SR–NYSEMKT–2014–56) 

(hereinafter ‘‘SR–NYSE–2014–32 Approval Order’’) 

(approving ‘‘Add Liquidity Only’’ modifier that 

operates in a manner similar to Post-Only Order). 

Displayed Order will be adjusted 

repeatedly in accordance with changes 

to the NBBO. For example, if a NonDisplayed Order to buy at $11.02 would 

cross a Protected Offer of $11, the NonDisplayed Order will be priced and 

posted at $11. If the Best Offer then 

changes to $11.01, the price of the NonDisplayed Order will be changed to 

$11.01. The Order may be repriced 

repeatedly in this manner, receiving a 

new timestamp each time its price is 

changed, until the Non-Displayed Order 

is posted at its original entered limit 

price.40 The Non-Displayed Order will 

not thereafter be repriced under this 

provision, except as provided below 

with respect to crossing a Protected 

Quotation. 

• If, after being posted to the PSX 

Book, the NBBO changes so that the 

Non-Displayed Order would cross a 

Protected Quotation, the Non-Displayed 

Order will be repriced at a price that 

would lock the new NBBO and receive 

a new timestamp.41 For example, if a 

Non-Displayed Order to buy at $11 

would lock a Protected Offer of $11, the 

Non-Displayed Order will be posted at 

$11. If the Best Offer then changes to 

$10.99, the Non-Displayed Order will be 

repriced at $10.99, receiving a new 

timestamp. The Non-Displayed Order 

may be repriced and receive a new 

timestamp repeatedly. 

If a Non-Displayed Order is entered 

through OUCH or FLITE, during Market 

Hours the Non-Displayed Order may be 

adjusted in the following manner after 

initial entry and posting to the PSX 

Book: 

• If the original entered limit price of 

the Non-Displayed Order locked or 

crossed a Protected Quotation and the 

NBBO changes so that the NonDisplayed Order could be posted at a 

price at or closer to its original entered 

limit price without crossing a Protected 

Quotation, the Non-Displayed Order 

may either remain on the PSX Book 

unchanged or may be cancelled back to 

the Participant, depending on its choice. 

For example, if a Non-Displayed Order 

to buy at $11.02 would cross a Protected 

Offer of $11, the Order will be priced at 

$11. If the Best Offer changes to $11.01, 

the Order will not be repriced, but 

rather will either remain at its current 

$11 price or be cancelled back to the 

Participant, depending on its choice. A 

Participant’s choice with regard to 

maintaining the Non-Displayed Order or 

cancelling it is set in advance for each 

port through which the Participant 

enters Orders. 

• If, after a Non-Displayed Order is 

posted to the PSX Book, the NBBO 

changes so that the Non-Displayed 

Order would cross a Protected 

Quotation, the Non-Displayed Order 

will be cancelled back to the 

Participant. For example, if a NonDisplayed Order to buy at $11 would 

lock a Protected Offer of $11, the NonDisplayed Order will be posted at $11. 

If the Best Offer then changes to $10.99, 

the Non-Displayed Order will be 

cancelled back to the Participant. 

• If a Non-Displayed Order entered 

through OUCH or FLITE is assigned a 

Midpoint Pegging Order Attribute,42

and if, after being posted to the PSX 

Book, the NBBO changes so that the 

Non-Displayed Order is no longer at the 

Midpoint between the NBBO, the NonDisplayed Order will be cancelled back 

to the Participant. In addition, if a NonDisplayed Order entered through OUCH 

or FLITE is assigned a Midpoint Pegging 

Attribute and also has a limit price that 

is lower than the midpoint between the 

NBBO for an Order to buy (higher than 

the midpoint between the NBBO for an 

Order to sell), the Order will 

nevertheless be accepted at its limit 

price and will be cancelled if the 

midpoint between the NBBO moves 

lower than (higher than) the price of an 

Order to buy (sell). 

The following Order Attributes may 

be assigned to a Non-Displayed Order: 

• Price. As described above, the price 

of the Order may be adjusted to avoid 

crossing a Protected Quotation. 

• Size. 

• ‘‘Minimum Quantity’’.43

• Time-in-Force. 

• Designation as an ISO. In 

accordance with Regulation NMS, a 

Non-Displayed Order designated as an 

ISO would be processed at its entered 

limit price, since such a designation 

reflects a representation by the 

Participant that it has simultaneously 

routed one or more additional limit 

orders, as necessary, to execute against 

the full displayed size of any Protected 

Quotations that the Non-Displayed 

Order would cross. As discussed above, 

a Non-Displayed Order would be 

accepted at a price that locked a 

Protected Quotation, even if the Order 

was not designated as an ISO, because 

the non-displayed nature of the Order 

allows it to lock a Protected Quotation 

under Regulation NMS. Accordingly, 

the System would not interpret receipt 

of a Non-Displayed Order marked ISO 

that locked a Protected Quotation as the 

basis for determining that the Protected 

Quotation had been executed for 

purposes of accepting additional Orders 

at that price level.44

• Routing (available through RASH 

and FIX only). 

• Primary Pegging and Market 

Pegging (available through RASH and 

FIX only). 

• Pegging to the Midpoint.45

• Discretion (available through RASH 

and FIX only). 

Post-Only Orders 

A ‘‘Post-Only Order’’ is an Order Type 

designed to have its price adjusted as 

needed to post to the PSX Book in 

compliance with Rule 610(d) under 

Regulation NMS by avoiding the display 

of quotations that lock or cross any 

Protected Quotation in a System 

Security during Market Hours, or to 

execute against locking or crossing 

quotations in circumstances where 

economically beneficial to the 

Participant entering the Post-Only 

Order. Post-Only Orders are always 

displayed, although as discussed below, 

they may also have a non-displayed 

price in circumstances similar to a Price 

to Comply Order. Post-Only Orders are 

thus designed to allow Participants to 

help control their trading costs, while 

also ‘‘provid[ing] displayed liquidity to 

the market and thereby contribut[ing] to 

public price discovery—an objective 

that is fully consistent with the Act.’’ 46

In addition, under some circumstances, 

Post-Only Orders provide price 

improvement. 

During Market Hours, a Post-Only 

Order is evaluated at the time of entry 

with respect to locking or crossing other 

Orders on the PSX Book, Protected 


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47 Details regarding the processing of a Post-Only 

Order that locks or crosses both a Protected 

Quotation and an Order on the PSX Book; the 

potential execution of a Post-Only Order priced at 

more than $1 per share; and the processing of a 

Post-Only Order with a Time-in-Force of IOC reflect 

substantive clarifications to the language of the 

existing rule. 

48Thus, in circumstances where a Post-Only 

Order would lock or cross an Order on the PSX 

Book, the Post-Only Order will either execute or 

post and offer displayed liquidity. A Post-Only 

Order is not cancelled back to the Participant that 

entered it if it cannot post at its original price. Thus, 

the Order Type does not provide a means to 

ascertain the existence of locking or crossing Orders 

on the PSX Book with the Participant also 

committing to execute against such Orders or 

display and potentially provide liquidity at the 

Exchange’s best price. 

49This functionality reflects the overall purpose 

of the Post-Only Order, which is not to post to the 

PSX Book in all circumstances, but rather to assist 

Participants in controlling execution costs by 

allowing consideration of price improvement, fees, 

and rebates in the handling of the Order. Thus, 

entering a Post-Only Order with a Time-in-Force of 

IOC allows a Participant to stipulate that an Order 

will execute only if it receives price improvement. 

50These adjustments reflect a substantive 

clarification to the language of the existing rule. 

51This means that, in general, the price of the 

Post-Only Order will move toward, but not away 

from, its original entered limit price. Because a 

Post-Only Order is removed from the PSX Book 

while it is being repriced, however, it is possible 

Continued 

Quotations, and potential execution as 

follows: 47

• If a Post-Only Order would lock or 

cross a Protected Quotation, the price of 

the Order will first be adjusted. If the 

Order is Attributable, its adjusted price 

will be one minimum price increment 

lower than the current Best Offer (for 

bids) or higher than the current Best Bid 

(for offers). If the Order is not 

Attributable, its adjusted price will be 

equal to the current Best Offer (for bids) 

or the current Best Bid (for offers). 

However, the Order will not post or 

execute until the Order, as adjusted, is 

evaluated with respect to Orders on the 

PSX Book. 

Æ If the adjusted price of the PostOnly Order would not lock or cross an 

Order on the PSX Book, the Order will 

be posted in the same manner as a Price 

to Comply Order (if it is not 

Attributable) or a Price to Display Order 

(if it is Attributable). Specifically, if the 

Post-Only Order is not Attributable, it 

will be displayed on the PSX Book at a 

price one minimum price increment 

lower than the current Best Offer (for 

bids) or higher than the current Best Bid 

(for offers) but will be ranked on the 

PSX Book with a non-displayed price 

equal to the current Best Offer (for bids) 

or to the current Best Bid (for offers). 

For example, if a Post-Only Order to buy 

at $11 would lock a Protected Offer of 

$11, the Order will be ranked at a nondisplayed price of $11 but will be 

displayed at $10.99. If the Post-Only 

Order is Attributable, it will be ranked 

and displayed on the PSX Book at a 

price one minimum increment lower 

than the current Best Offer (for bids) or 

higher than the current Best Bid (for 

offers). Thus, in the preceding example, 

the Post-Only Order to buy would be 

ranked and displayed at $10.99. 

Æ If the adjusted price of the PostOnly Order would lock or cross an 

Order on the PSX Book, the Post Only 

Order will be repriced, ranked, and 

displayed at one minimum price 

increment below the current best-priced 

Order to sell on the PSX Book (for bids) 

or above the current best-priced Order 

to buy on the PSX Book (for offers); 

provided, however, the Post-Only Order 

will execute if (i) it is priced below 

$1.00 and the value of price 

improvement associated with executing 

against an Order on the PSX Book (as 

measured against the original limit price 

of the Order) equals or exceeds the sum 

of fees charged for such execution and 

the value of any rebate that would be 

provided if the Order posted to the PSX 

Book and subsequently provided 

liquidity, or (ii) it is priced at $1.00 or 

more and the value of price 

improvement associated with executing 

against an Order on the PSX Book (as 

measured against the original limit price 

of the Order) equals or exceeds $0.01 

per share. For example, if a Participant 

entered a Non-Attributable Post-Only 

Order to buy at $11.01, another market 

center is displaying a Protected Offer at 

$11, and there is a Non-Displayed Order 

on the PSX Book to sell at $11, the 

adjusted price of the Post-Only Order 

will be $11. However, because the PostOnly Order would be executable against 

the Non-Displayed Order on the PSX 

Book and would receive $0.01 price 

improvement (as measured against the 

original $11.01 price of the Post-Only 

Order), the Post-Only Order would 

execute. 

• If the Post-Only Order would not 

lock or cross a Protected Quotation but 

would lock or cross an Order on the 

PSX Book, the Post Only Order will be 

repriced, ranked, and displayed at one 

minimum price increment below the 

current best-priced Order to sell on the 

PSX Book (for bids) or above the current 

best-priced Order to buy on the PSX 

Book (for offers); provided, however, the 

Post-Only Order will execute if (i) it is 

priced below $1.00 and the value of 

price improvement associated with 

executing against an Order on the PSX 

Book equals or exceeds the sum of fees 

charged for such execution and the 

value of any rebate that would be 

provided if the Order posted to the PSX 

Book and subsequently provided 

liquidity, or (ii) it is priced at $1.00 or 

more and the value of price 

improvement associated with executing 

against an Order on the PSX Book 

equals or exceeds $0.01 per share. For 

example, if a Participant entered a PostOnly Order to buy at $11.02, the Best 

Offer was $11.04, and there was a NonDisplayed Order on the PSX Book to sell 

at $11.02, the Post-Only Order would be 

ranked and displayed at $11.01. 

However, if a Participant entered a PostOnly Order to buy at $11.03, the Order 

would execute against the Order on the 

PSX Book at $11.02, receiving $0.01 per 

share price improvement.48

• If a Post-Only Order is entered with 

a Time-in-Force of IOC, the price of an 

Order to buy (sell) will be repriced to 

the lower of (higher of) (i) one minimum 

price increment below (above) the price 

of the Order or (ii) the current Best Offer 

(Best Bid). The Order will execute 

against any Order on the PSX Book with 

a price equal to or better than the 

adjusted price of the Post-Only Order. If 

the Post-Only Order cannot execute, it 

will be cancelled. For example, if a PostOnly Order to buy at $11 with a Timein-Force of IOC was entered and the 

current Best Offer was $11.01, the Order 

would be repriced to $10.99; however, 

if the Best Offer was $10.98, the Order 

would be repriced to $10.98.49

• If a Post-Only Order would not lock 

or cross an Order on the PSX Book or 

any Protected Quotation, it will be 

posted on the PSX Book at its entered 

limit price. 

During Pre-Market and Post-Market 

Hours, a Post-Only Order will be 

processed in a manner identical to 

Market Hours with respect to locking or 

crossing Orders on the PSX Book, but 

will not have its price adjusted with 

respect to locking or crossing the 

quotations of other market centers. 

If a Post-Only Order is entered 

through RASH or FIX, during System 

Hours the Post-Only Order may be 

adjusted in the following manner after 

initial entry and posting to the PSX 

Book: 50

• If the original entered limit price of 

the Post-Only Order is not being 

displayed, the displayed (and nondisplayed price, if any) of the Order will 

be adjusted repeatedly in accordance 

with changes to the NBBO or the best 

price on the PSX Book, as applicable; 

provided, however, that if the quotation 

of another market center moves in a 

manner that would lock or cross the 

displayed price of a Post-Only Order, 

the price(s) of the Post-Only Order will 

not be adjusted.51 For example, if a NonVerDate Sep<11>2014 18:14 Apr 03, 2015 Jkt 235001 PO 00000 Frm 00108 Fmt 4703 Sfmt 4703 E:\FR\FM\06APN1.SGM 06APN1

tkelley on DSK4VPTVN1PROD with NOTICES
18460 Federal Register / Vol. 80, No. 65 / Monday, April 6, 2015 / Notices 

that the Order’s price will move away from its 

original entered limit price in the case of a ‘‘race 

condition’’ where the NBBO changes again while 

the Order is not on the PSX Book. 

52Thus, the price of the Order will not move 

beyond its limit price. 

53These adjustments reflect a substantive 

clarification to the language of the existing rule. 

54Thus, the price of the Order will not move 

beyond its limit price. 

55 In the SR–NYSE–2014–32 Approval Order, the 

Commission affirmed that exchanges may adopt 

rules allowing market participants to ‘‘ship and 

post’’ (i.e., to ship limit orders, as necessary, to 

remove Protected Quotations while posting an order 

at the formerly locking price). The Commission 

further determined that a Day Order with an 

‘‘Access Liquidity Only’’ (similar to a Post-Only 

Order) modifier could be marked as an ISO. Of 

course, as required by its obligations as a selfregulatory organization, the Exchange maintains an 

active regulatory surveillance and enforcement 

program to verify that Participants are not 

improperly designating Orders as ISOs. 

56The price level would be considered open if a 

subsequent Displayed Order marked ISO was 

received at that price or if market data received by 

the System demonstrated that the Protected 

Quotation had been removed. 

Attributable Post-Only Order to buy at 

$11.02 would cross a Protected Offer of 

$11, the Order will be ranked at a nondisplayed price of $11 but will be 

displayed at $10.99. If the Best Offer 

then moves to $11.01, the displayed 

price will be changed to $11 and the 

non-displayed price at which the Order 

is ranked will be changed to $11.01. 

However, if another market center then 

displays an offer of $11 (thereby locking 

the previously displayed price of the 

Post-Only Order, notwithstanding Rule 

610(d) under Regulation NMS), the 

price of the Post-Only Order will not be 

changed. The Order may be repriced 

repeatedly until such time as the PostOnly Order is able to be displayed at its 

original entered limit price ($11.02 in 

the example). The Post-Only Order 

receives a new timestamp each time its 

price is changed. If the original entered 

limit price of the Post-Only Order 

would no longer lock or cross a 

Protected Quotation or an Order on the 

PSX Book, the Post-Only Order will be 

ranked and displayed at that price and 

will receive a new timestamp, and will 

not thereafter be adjusted under this 

provision.52

If a Post-Only Order is entered 

through OUCH or FLITE, the Post-Only 

Order may be adjusted in the following 

manner after initial entry and posting to 

the PSX Book: 53

• During Market Hours, if the original 

entered limit price of the Post-Only 

Order locked or crossed a Protected 

Quotation, the Post-Only Order may be 

adjusted after initial entry in the same 

manner as a Price to Comply Order (or 

a Price to Display Order, if it is 

Attributable). Thus, in the case of a 

Non-Attributable Post-Only Order that 

crossed a Protected Quotation, if the 

NBBO changed so that the Post-Only 

Order could be ranked and displayed at 

a price at or closer to its original entered 

limit price without locking or crossing 

a Protected Quotation, the Post-Only 

Order may either remain on the PSX 

Book unchanged or may be cancelled 

back to the Participant, depending on its 

choice. In the case of a Non-Attributable 

Post-Only Order that locked a Protected 

Quotation, if the limit price would no 

longer lock a Protected Quotation, the 

Post-Only Order may either remain on 

the PSX Book unchanged, may be 

cancelled back to the Participant, or 

may be ranked and displayed at its 

original entered limit price, depending 

on the Participant’s choice, and will not 

thereafter be adjusted under this 

provision.54 If the Post-Only Order is 

displayed at its original entered limit 

price, it will receive a new timestamp. 

Finally, in the case of an Attributable 

Post-Only Order that locked or crossed 

a Protected Quotation, if the NBBO 

changed so that the Post-Only Order 

could be ranked and displayed at a price 

at or closer to its original entered limit 

price without locking or crossing a 

Protected Quotation, the Post-Only 

Order may either remain on the PSX 

Book unchanged or may be cancelled 

back to the Participant, depending on 

the Participant’s choice. A Participant’s 

choice with regard to adjustment of 

Post-Only Orders is set in advance for 

each port through which the Participant 

enters Orders. 

• During System Hours, if the original 

entered limit price of the Post-Only 

Order locked or crossed an Order on the 

PSX Book and the PSX Book changes so 

that the original entered limit price 

would no longer lock or cross an Order 

on the PSX Book, the Post-Only Order 

may either remain on the PSX Book 

unchanged or may be cancelled back to 

the Participant, depending on the 

Participant’s choice. For example, if a 

Post-Only Order to buy at $11 would 

lock an Order on the PSX Book priced 

at $11, the Post-Only Order will be 

ranked and displayed at $10.99. If the 

Order at $11 is cancelled or executed, 

the Post-Only Order may either remain 

with a displayed price of $10.99 or be 

cancelled back to the Participant, 

depending on the Participant’s choice. 

A Participant’s choice with regard to 

maintaining the Post-Only Order or 

cancelling it is set in advance for each 

port through which the Participant 

enters Orders. 

The following Order Attributes may 

be assigned to a Post-Only Order: 

• Price. As described above, the price 

of the Order may be adjusted to avoid 

locking or crossing a Protected 

Quotation, and may include a displayed 

price as well as a non-displayed price. 

• Size. 

• Time-in-Force. 

• Designation as an ISO. In 

accordance with Regulation NMS, a 

Post-Only Order designated as an ISO 

that locked or crossed a Protected 

Quotation would be processed at its 

entered limit price, since such a 

designation reflects a representation by 

the Participant that it has 

simultaneously routed one or more 

additional limit orders, as necessary, to 

execute against the full displayed size of 

any Protected Quotations that the PostOnly Order would lock or cross.55

However, as described above, a PostOnly Order designated as an ISO that 

locked or crossed an Order on the PSX 

Book would either execute at time of 

entry or would have its price adjusted 

prior to posting. Accordingly, the 

System would not interpret receipt of a 

Post-Only Order marked ISO that had its 

price adjusted prior to posting as the 

basis for determining that any Protected 

Quotation at the Order’s original entered 

limit price level had been executed for 

purposes of accepting additional Orders 

at that price level.56 However, if the 

Post-Only Order is ranked and 

displayed at its adjusted price, the 

System would consider the adjusted 

price level to be open for purposes of 

accepting additional Orders at that price 

level. For example, assume that there is 

a Protected Offer at $11 and a 

Participant enters a Post-Only Order 

marked ISO to buy at $11. If there are 

no Orders to sell at $11 on the PSX 

Book, the Order to buy will be displayed 

and ranked at $11, since the designation 

of the Order as an ISO reflects the 

Participant’s representation that it has 

routed one or more additional limit 

orders, as necessary, to execute against 

the full displayed size of any Protected 

Quotations that the Post-Only Order 

would lock or cross. However, if there 

was also an Order to sell at $11 on the 

PSX Book, the Post-Only Order will be 

repriced, ranked, and displayed at 

$10.99. In that case, the mere fact that 

the Post-Only Order was designated as 

an ISO would not allow the Exchange to 

conclude that the $11 price level was 

‘‘open’’ for receiving orders to buy at 

that price; the $11 price level would be 

considered open only if market data 

received by the System demonstrated 

that the Protected Offer at $11 had been 

removed or if a subsequent Displayed 

Order marked ISO was received and 

ranked at that price. 

• Attribution. 


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57As with other Order Types, the Market Maker 

Peg Order must be an Order either to buy or to sell; 

thus, at least two Orders would be required to 

maintain a two-sided quotation. 

• Display. A Post-Only Order is 

always displayed, although as provided 

above, may also have a non-displayed 

price. 

Market Maker Peg Order 

A ‘‘Market Maker Peg Order’’ is an 

Order Type designed to allow a Market 

Maker to maintain a continuous twosided quotation at a price that is 

compliant with the quotation 

requirements for Market Makers set 

forth in Rule 3213(a)(2).57 The price of 

the Market Maker Peg Order is set with 

reference to a ‘‘Reference Price’’ in order 

to keep the price of the Market Maker 

Peg Order within a bounded price range. 

A Market Maker Peg Order may be 

entered through RASH or FIX only. A 

Market Maker Peg Order must be 

entered with a limit price beyond which 

the Order may not be priced. The 

Reference Price for a Market Maker Peg 

Order to buy (sell) is the then-current 

Best Bid (Best Offer) (including PSX), or 

if no such Best Bid or Best Offer, the 

most recent reported last-sale eligible 

trade from the responsible single plan 

processor for that day, or if none, the 

previous closing price of the security as 

adjusted to reflect any corporate actions 

(e.g., dividends or stock splits) in the 

security. 

Upon entry, the price of a Market 

Maker Peg Order to buy (sell) is 

automatically set by the System at the 

Designated Percentage (as defined in 

Rule 3213) away from the Reference 

Price in order to comply with the 

quotation requirements for Market 

Makers set forth in Rule 3213(a)(2). For 

example, if the Best Bid is $10 and the 

Designated Percentage for the security is 

8%, the price of a Market Marker Peg 

Order to buy would be $9.20. If the limit 

price of the Order is not within the 

Designated Percentage, the Order will be 

sent back to the Participant. 

Once a Market Maker Peg Order has 

posted to the PSX Book, its price is 

adjusted if needed as the Reference 

Price changes. Specifically, if as a result 

of a change to the Reference Price, the 

difference between the price of the 

Market Maker Peg Order and the 

Reference Price reaches the Defined 

Limit (as defined in Rule 3213), the 

price of a Market Maker Peg Order to 

buy (sell) will be adjusted to the 

Designated Percentage away from the 

Reference Price. In the foregoing 

example, if the Defined Limit is 9.5% 

and the Best Bid increased to $10.17, 

such that the price of the Market Maker 

Peg Order would be more than 9.5% 

away, the Order will be repriced to 

$9.35, or 8% away from the Best Bid. 

Note that calculated prices of less than 

the minimum increment will be 

rounded in a manner that ensures that 

the posted price will be set at a level 

that complies with the percentages 

stipulated by this rule. If the limit price 

of the Order is outside the Defined 

Limit, the Order will be sent back to the 

Participant. 

Similarly, if as a result of a change to 

the Reference Price, the price of a 

Market Maker Peg Order to buy (sell) is 

within one minimum price variation 

more than (less than) a price that is 4% 

less than (more than) the Reference 

Price, rounded up (down), then the 

price of the Market Maker Peg Order to 

buy (sell) will be adjusted to the 

Designated Percentage away from the 

Reference Price. For example, if the Best 

Bid is $10 and the Designated 

Percentage for the security is 8%, the 

price of a Market Marker Peg Order to 

buy would initially be $9.20. If the Best 

Bid then moved to $9.57, such that the 

price of the Market Maker Peg Order 

would be a minimum of $0.01 more 

than a price that is 4% less than the Best 

Bid, rounded up (i.e. $9.57¥($9.57 × 

0.04) = $9.1872, rounding up to $9.19), 

the Order will be repriced to $8.81, or 

8% away from the Best Bid. 

A Market Maker may enter a Market 

Maker Peg Order with a more aggressive 

offset than the Designated Percentage, 

but such an offset will be expressed as 

a price difference from the Reference 

Price. Such a Market Maker Peg Order 

will be repriced in the same manner as 

a Price to Display Order with 

Attribution and Primary Pegging. As a 

result, the price of the Order will be 

adjusted whenever the price to which 

the Order is pegged is changed. 

A new timestamp is created for a 

Market Maker Peg Order each time that 

its price is adjusted. In the absence of 

a Reference Price, a Market Maker Peg 

Order will be cancelled or rejected. If, 

after entry, a Market Maker Peg Order is 

priced based on a Reference Price other 

than the NBBO and such Market Maker 

Peg Order is established as the Best Bid 

or Best Offer, the Market Maker Peg 

Order will not be subsequently adjusted 

in accordance with this rule until a new 

Reference Price is established. If a 

Market Maker Peg Order is repriced 

1,000 times, it will be cancelled. This 

restriction is designed to conserve 

System resources by limiting the 

persistence of Orders that update 

repeatedly without any reasonable 

prospect of execution. 

Notwithstanding the availability of 

Market Maker Peg Order functionality, a 

Market Maker remains responsible for 

entering, monitoring, and resubmitting, 

as applicable, quotations that meet the 

requirements of Rule 3213. 

The following Order Attributes may 

be assigned to a Market Maker Peg 

Order: 

• Price. As discussed above, the price 

of Market Maker Peg Order is 

established by the PSX based on the 

Reference Price, the Designated 

Percentage (or a narrower offset 

established by the Market Maker), the 

Defined Limit, and the 4% minimum 

difference from the Reference Price. 

• Size. 

• A Time-in-Force other than IOC or 

‘‘Good-till-Cancelled’’. 

• If the Market Maker designates a 

more aggressive offset, Primary Pegging 

is required. 

• Attribution. All Market Maker Peg 

Orders are Attributable. 

• Display. Market Marker Peg Orders 

are always Displayed. 

Order Attributes 

Proposed Rule 3301A lists the Order 

Attributes that may be assigned to 

specific Order Types. Proposed Rule 

3301B details the parameters of each 

Order Attribute. 

Time-in-Force 

The ‘‘Time-in-Force’’ assigned to an 

Order means the period of time that PSX 

will hold the Order for potential 

execution. Participants specify an 

Order’s Time-in-Force by designating a 

time at which the Order will become 

active and a time at which the Order 

will cease to be active. The available 

times for activating Orders are: 

• The time of the Order’s receipt by 

the System; 

• the beginning of Market Hours; 

• the end of Market Hours; 

• the resumption of trading, in the 

case of a security that is the subject of 

a trading halt. 

The available times for deactivating 

Orders are: 

• ‘‘Immediate’’ (i.e., immediately after 

determining whether the Order is 

marketable); 

• the end of Market Hours; 

• the end of System Hours; 

• one year after entry; or 

• a specific time identified by the 

Participant; provided, however, that an 

Order specifying an expire time beyond 

the current trading day will be cancelled 

at the end of the current trading day. 

Notwithstanding the Time-in-Force 

originally designated for an Order, a 

Participant may always cancel an Order 

after it is entered. 

The following Times in Force are 

referenced elsewhere in PSX’s Rules by 

the designations noted below: 


tkelley on DSK4VPTVN1PROD with NOTICES
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58This is the case because otherwise the Pegged 

Order would become pegged to itself if it set the 

NBBO. 

59For example, if an Order to buy with Primary 

Pegging is entered with a limit price of $11.05 at 

a time when the Inside Bid is $11, the initial price 

of the Order will be $11. If, thereafter, the Inside 

Bid changes to $11.05, $11.06, and $11.04, the price 

of the Order at such times will be $11.05, $11.05, 

and $11.04. 

• An Order that is designated to 

deactivate immediately after 

determining whether the Order is 

marketable may be referred to as having 

a Time in Force of ‘‘Immediate or 

Cancel’’ or ‘‘IOC’’. Any Order with a 

Time-in-Force of IOC entered between 

9:30 a.m. ET and 4 p.m. ET may be 

referred to as having a Time-in-Force of 

‘‘Market Hours Immediate or Cancel’’ or 

‘‘MIOC’’. An Order with a Time-inForce of IOC that is entered at any time 

between 8 a.m. ET and 5 p.m. ET may 

be referred to as having a Time-in-Force 

of ‘‘System Hours Immediate or Cancel’’ 

or ‘‘SIOC’’. 

• An Order that is designated to 

deactivate at 8 p.m. may be referred to 

as having a Time in Force of ‘‘System 

Hours Day’’ or ‘‘SDAY’’. 

• An Order that is designated to 

deactivate one year after entry may be 

referred to as a ‘‘Good-till-Cancelled’’ or 

‘‘GTC’’ Order. If a GTC Order is 

designated as eligible for execution 

during Market Hours only, it may be 

referred to as having a Time in Force of 

‘‘Market Hours Good-till-Cancelled’’ or 

‘‘MGTC’’. If a GTC is designated as 

eligible for execution during System 

Hours, it may be referred to as having 

a Time in Force of ‘‘System Hours Goodtill-Cancelled’’ or ‘‘SGTC’’. 

• An Order that is designated to 

deactivate at the time specified in 

advance by the entering Participant may 

be referred to as having a Time-in-Force 

of ‘‘System Hours Expire Time’’ or 

‘‘SHEX’’. 

• An Order that is designated to 

activate at any time during Market 

Hours and deactivate at 4 p.m. ET may 

be referred to as having a Time-in-Force 

of ‘‘Market Hours Day’’ or ‘‘MDAY’’. An 

Order entered with a Time-in-Force of 

MDAY after 4 p.m. ET will be accepted 

but given a Time-in-Force of IOC,. 

• An Order that is designated to 

activate when entered and deactivate at 

4 p.m. ET may be referred to as having 

a Time in Force of ‘‘Good-till-Market 

Close’’ or ‘‘GTMC’’. GTMC Orders 

entered after 4 p.m. ET will be treated 

as having a Time-in-Force of SIOC. 

Size 

Except as otherwise provided, an 

Order may be entered in any whole 

share size between one share and 

999,999 shares. Orders for fractional 

shares are not permitted. The following 

terms may be used to describe particular 

Order sizes: 

• ‘‘normal unit of trading’’ or ‘‘round 

lot’’ means the size generally employed 

by traders when trading a particular 

security, which is 100 shares in most 

instances; 

• ‘‘mixed lot’’ means a size of more 

than one normal unit of trading but not 

a multiple thereof; and 

• ‘‘odd lot’’ means a size of less than 

one normal unit of trading. 

Price 

With limited exceptions, all Orders 

must have a price, such that they will 

execute only if the price available is 

equal to or better than the price of the 

Order. The maximum price that the 

System will accept is $199,999.99. 

Certain Orders have a price that is 

determined by the System based on the 

NBBO or other reference prices, rather 

than by the Participant. As described 

below with respect to the Pegging Order 

Attribute, an Order may have a price 

that is pegged to the opposite side of the 

market, in which case the Order will 

behave like a ‘‘market order’’ or 

‘‘unpriced order’’ (i.e., an Order that 

executes against accessible liquidity on 

the opposite side of the market, 

regardless of its price). 

Pegging 

Pegging is an Order Attribute that 

allows an Order to have its price 

automatically set with reference to the 

NBBO; provided, however, that if PSX 

is the sole market center at the Best Bid 

or Best Offer (as applicable), then the 

price of any Displayed Order with 

Pegging will be set with reference to the 

highest bid or lowest offer disseminated 

by a market center other than PSX.58 An 

Order with a Pegging Order Attribute 

may be referred to as a ‘‘Pegged Order.’’ 

The price to which an Order is pegged 

is referred to as the Inside Quotation, 

the Inside Bid, or the Inside Offer, as 

appropriate. There are three varieties of 

Pegging: 

• Primary Pegging means Pegging 

with reference to the Inside Quotation 

on the same side of the market. For 

example, if the Inside Bid was $11, an 

Order to buy with Primary Pegging 

would be priced at $11. 

• Market Pegging means Pegging with 

reference to the Inside Quotation on the 

opposite side of the market. For 

example, if the Inside Offer was $11.06, 

an Order to buy with Market Pegging 

would be priced at $11.06. 

• Midpoint Pegging means Pegging 

with reference to the midpoint between 

the Inside Bid and the Inside Offer (the 

‘‘Midpoint’’). Thus, if the Inside Bid was 

$11 and the Inside Offer was $11.06, an 

Order with Midpoint Pegging would be 

priced at $11.03. An Order with 

Midpoint Pegging is not displayed. An 

Order with Midpoint Pegging may be 

executed in sub-pennies if necessary to 

obtain a midpoint price. 

Pegging is available only during 

Market Hours. An Order with Pegging 

may specify a limit price beyond which 

they Order may not be executed; 

provided, however, that if an Order has 

been assigned a Pegging Order Attribute 

and a Discretion Order Attribute, the 

Order may execute at any price within 

the discretionary price range, even if 

beyond the limit price specified with 

respect to the Pegging Order Attribute. 

If an Order with Pegging is priced at its 

limit price, the price of the Order may 

nevertheless be changed to a less 

aggressive price based on changes to the 

Inside Quotation.59 In addition, an 

Order with Primary Pegging or Market 

Pegging may specify an Offset Amount, 

such that the price of the Order will 

vary from the Inside Quotation by the 

selected Offset Amount. The Offset 

Amount may be either aggressive or 

passive. Thus, for example, if a 

Participant entered an Order to buy with 

Primary Pegging and a passive Offset 

Amount of $0.05 and the Inside Bid was 

$11, the Order would be priced at 

$10.95. If the Participant selected an 

aggressive Offset Amount of $0.02, 

however, the Order would be priced at 

$11.02. An Order with Primary Pegging 

and an Offset Amount will not be 

Displayed, unless the Order is 

Attributable. An Order with Midpoint 

Pegging will not be Displayed. An Order 

with Market Pegging and no Offset 

behaves as a ‘‘market order’’ with 

respect to any liquidity on the PSX Book 

at the Inside Quotation on the opposite 

side of the market because it is 

immediately executable at that price. If, 

at the time of entry, there is no price to 

which a Pegged Order can be pegged, 

the Order will be rejected. In the case of 

an Order with Midpoint Pegging, if the 

Inside Bid and Inside Offer are locked, 

the Order will be priced at the locking 

price, if the Inside Bid and Inside Offer 

are crossed, the Order will nevertheless 

be priced at the midpoint between the 

Inside Bid and Inside Offer, and if there 

is no Inside Bid and/or Inside Offer, the 

Order will be rejected. 

Primary Pegging and Market Pegging 

are available through RASH or FIX only. 

An Order entered through OUCH or 

FLITE with Midpoint Pegging will have 

its price set upon initial entry to the 

Midpoint, unless the Order has a limit 


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60As reflected in the proposed rule, the System 

currently allows an incoming Order with a 

Minimum Quantity to execute if one or more Orders 

on the PSX Book satisfy the Minimum Quantity 

condition. 

61The proposed rule text reflects a substantive 

clarification to the existing description of 

Discretionary Orders. 

price that is lower than the Midpoint for 

an Order to buy (higher than the 

Midpoint for an Order to sell), in which 

case the Order will be ranked on the 

PSX Book at its limit price. Thereafter, 

if the NBBO changes so that the 

Midpoint is lower than (higher than) the 

price of an Order to buy (sell), the 

Pegged Order will be cancelled back to 

the Participant. 

An Order entered through RASH or 

FIX with Pegging will have its price set 

upon initial entry and will thereafter 

have its price reset in accordance with 

changes to the relevant Inside 

Quotation. An Order with Pegging 

receives a new timestamp whenever its 

price is updated and therefore will be 

evaluated with respect to possible 

execution (and routing, if it has been 

assigned a Routing Order Attribute) in 

the same manner as a newly entered 

Order. If the price to which an Order is 

pegged is not available, the Order will 

be rejected. 

Pegging functionality allows a 

Participant to have the System adjust 

the price of the Order continually in 

order to keep the price within defined 

parameters. Thus, the System performs 

price adjustments that would otherwise 

be performed by the Participant through 

cancellation and reentry of Orders. The 

fact that a new timestamp is created for 

a Pegged Order whenever it has its price 

adjusted allows the Order to seek 

additional execution opportunities and 

ensures that the Order does not ‘‘jump 

the queue’’ with respect to any Orders 

that were previously at the Pegged 

Order’s new price level. 

If an Order with Primary Pegging is 

updated 1,000 times, it will be 

cancelled; if an Order with other forms 

of Pegging is updated 10,000 times, it 

will be cancelled. This restriction is 

designed to conserve System resources 

by limiting the persistence of Orders 

that update repeatedly without any 

reasonable prospect of execution. 

Minimum Quantity 

Minimum Quantity is an Order 

Attribute that allows a Participant to 

provide that an Order will not execute 

unless a specified minimum quantity of 

shares can be obtained. Thus, the 

functionality serves to allow a 

Participant that may wish to buy or sell 

a large amount of a security to avoid 

signaling its trading interest unless it 

can purchase a certain minimum 

amount. An Order with a Minimum 

Quantity Order Attribute may be 

referred to as a ‘‘Minimum Quantity 

Order.’’ For example, a Participant 

could enter an Order with a Size of 1000 

shares and specify a Minimum Quantity 

of 500 shares. In that case, upon entry, 

the System would determine whether 

there were posted Orders executable 

against the incoming Order with a size 

of at least 500 shares.60 If there were 

not, the Order would post on the PSX 

Book in accordance with the 

characteristics of its underlying Order 

Type. Once posted to the PSX Book, the 

Minimum Quantity Order retains its 

Minimum Quantity Order Attribute, 

such that the Order may execute only 

against incoming Orders with a size of 

at least the minimum quantity 

condition. An Order that has a 

Minimum Quantity Order Attribute and 

that posts to the PSX Book will not be 

displayed. 

Upon entry, an Order with a 

Minimum Quantity Order Attribute 

must have a size of at least one round 

lot. An Order entered through OUCH or 

FLITE may have a minimum quantity 

condition of any size of at least one 

round lot. An Order entered through 

RASH or FIX must have a minimum 

quantity of one round lot or any 

multiple thereof, and a mixed lot 

minimum quantity condition will be 

rounded down to the nearest round lot. 

In the event that the shares remaining in 

the size of an Order with a Minimum 

Quantity Order Attribute following a 

partial execution thereof are less than 

the minimum quantity specified by the 

Participant entering the Order, the 

minimum quantity value of the Order 

will be reduced to the number of shares 

remaining. An Order with a Minimum 

Quantity Order Attribute may not be 

displayed; if a Participant marks an 

Order with both a Minimum Quantity 

Order Attribute and a Display Order 

Attribute, the System will accept the 

Order but will give a Time-in-Force of 

IOC, regardless of the Time-in-Force 

marked by the Participant. An Order 

marked with a Minimum Quantity 

Order Attribute and a Routing Order 

Attribute will be rejected. 

Routing 

Routing is an Order Attribute that 

allows a Participant to designate an 

Order to employ one of several Routing 

Strategies offered by PSX, as described 

in Rule 3315; such an Order may be 

referred to as a ‘‘Routable Order.’’ Upon 

receipt of an Order with the Routing 

Order Attribute, the System will process 

the Order in accordance with the 

applicable Routing Strategy. In the case 

of a limited number of Routing 

Strategies, the Order will be sent 

directly to other market centers for 

potential execution. For most other 

Routing Strategies, the Order will 

attempt to access liquidity available on 

PSX in the manner specified for the 

underlying Order Type and will then be 

routed in accordance with the 

applicable Routing Strategy. Shares of 

the Order that cannot be executed are 

then returned to PSX, where they will 

(i) again attempt to access liquidity 

available on PSX and (ii) post to the 

PSX Book or be cancelled, depending on 

the Time-in-Force of the Order. Under 

certain Routing Strategies, the Order 

may be routed again if the System 

observes an accessible quotation of 

another market center, and returned to 

PSX again for potential execution and/ 

or posting to the PSX Book. 

In connection with the trading of 

securities governed by Regulation NMS, 

all Orders shall be routed for potential 

execution in compliance with 

Regulation NMS. Where appropriate, 

Routable Orders will be marked as 

Intermarket Sweep Orders. 

Discretion 

Discretion is an Order Attribute under 

which an Order has a non-displayed 

discretionary price range within which 

the entering Participant is willing to 

trade; such an Order may be referred to 

as a ‘‘Discretionary Order.’’ 61 Thus, an 

Order with Discretion has both a price 

(for example, buy at $11) and a 

discretionary price range (for example, 

buy up to $11.03). Depending on the 

Order Type used, the price may be 

displayed (for example, a Price to 

Display Order) or non-displayed (for 

example, a Non-Displayed Order). The 

discretionary price range is always nondisplayed. In addition, it should be 

noted that the Discretion Order 

Attribute may be combined with the 

Pegging Order Attribute, in which case 

either the price of the Order or the 

discretionary price range or both may be 

pegged in the ways described in Rule 

3301A(d) with respect to the Pegging 

Order Attribute. For example, an Order 

with Discretion to buy might be pegged 

to the Best Bid with a $0.05 passive 

Offset and might have a discretionary 

price range pegged to the Best Bid with 

a $0.02 passive Offset. In that case, if the 

Best Bid was $11, the price of the Order 

would be $10.95, with a discretionary 

price range up to $10.98. If the Best Bid 

moved to $10.99, the price of the Order 

would then be $10.94, with a 

discretionary price range up to $10.97. 

Alternatively, if the price of the Order 

was pegged but the discretionary price 


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62 It should be noted that a Discretionary IOC is 

deemed to be accessing liquidity for purposes of the 

Exchange’s schedule of fees and rebates, unless one 

Discretionary IOC executes against another 

Discretionary IOC, in which case the Order that had 

reached the PSX Book first would be deemed to 

provide liquidity. See Rule 7018(d). Thus, a 

Participant may not use a Discretionary IOC to 

obtain a rebate for accessing previously posted 

liquidity. 

63The PSCN routing strategy is described in Rule 

3315. 

64The PSTG routing strategy is described in Rule 

3315. 

range was not, the price of the Order 

would be $10.94, but the discretionary 

price range would continue to range up 

to $10.98. Likewise, if the discretionary 

price range was pegged but the price of 

the Order was not, the Order would 

remain priced at $10.95 but with a 

discretionary price range of up to 

$10.97. A Participant may also specify 

a limit price beyond which the 

discretionary price range may not 

extend. 

Under the circumstances described 

below, the System processes an Order 

with Discretion by generating a NonDisplayed Order with a Time-in-Force 

of IOC (a ‘‘Discretionary IOC’’) that will 

attempt to access liquidity available 

within the discretionary price range. 

The Discretionary IOC will not be 

permitted to execute, however, if the 

price of the execution would trade 

through a Protected Quotation. If more 

than one Order with Discretion satisfies 

conditions that would cause the 

generation of a Discretionary IOC 

simultaneously, the order in which such 

Discretionary IOCs are presented for 

execution is random, based on the 

respective processing time for each such 

Order. Whenever a Discretionary IOC is 

generated, the underlying Order with 

Discretion will be withheld or removed 

from the PSX Book and will then be 

routed and/or placed on the PSX Book 

if the Discretionary IOC does not 

exhaust the full size of the underlying 

Order with Discretion, with its price 

determined by the underlying Order 

Type and Order Attributes selected by 

the Participant.62 Because the 

circumstances under which a 

Discretionary IOC will be generated are 

dependent upon a range of factors, 

several specific scenarios are described 

below. 

• If an Order has been assigned a 

Discretion Order Attribute, but has not 

been assigned a Routing Order 

Attribute, upon entry of the Order, the 

System will automatically generate a 

Discretionary IOC with a price equal to 

the highest price for an Order with 

Discretion to buy (lowest price for an 

Order with Discretion to sell) within the 

discretionary price range and a size 

equal to the full size of the underlying 

Order to determine if there are any 

Orders within the discretionary price 

range on the PSX Book. If the 

Discretionary IOC does not exhaust the 

full size of the Order with Discretion, 

the remaining size of the Order with 

Discretion will post to the PSX Book in 

accordance with the parameters that 

apply to the underlying Order Type. 

Thus, for example, if a Participant 

enters a Price to Display Order to buy 

at $11 with a discretionary price range 

of up to $11.03, upon entry the System 

will generate a Discretionary IOC to buy 

priced at $11.03. If there is an Order on 

the PSX Book to sell priced at $11.02 

and an execution at $11.02 would not 

trade through a Protected Quotation, the 

Discretionary IOC will execute against 

the Order on the PSX Book, up to the 

full size of each Order. Any remaining 

size of the Price to Display Order would 

post to the PSX Book in accordance 

with its parameters. 

• After the Order posts to the PSX 

Book, the System will examine whether 

at any time there is an Order on the PSX 

Book with a price in the discretionary 

price range against which the Order 

with Discretion could execute. In doing 

so, the System will examine all Orders 

(including Orders that are not 

Displayed). If the System observes such 

an Order, it will generate a 

Discretionary IOC with a price equal to 

the highest price for an Order to buy 

(lowest price for an Order to sell) within 

the discretionary price range and a size 

equal to the full size of the Order. 

• If an Order that uses a passive 

routing strategy (i.e., a strategy such as 

PSCN 63 that does not seek routing 

opportunities after posting to the PSX 

Book) has been assigned a Discretion 

Order Attribute but does not have a 

pegged discretionary price range, upon 

entry of the Order, the System will 

examine all Orders (including Orders 

that are not Displayed) on the PSX Book 

to determine if there is an Order on the 

PSX Book with a price in the 

discretionary price range against which 

the Order with Discretion could 

execute. If the System observes such an 

Order, it will generate a Discretionary 

IOC with a price equal to the price of 

the Order on the PSX Book and a size 

equal to the applicable size of the Order 

on the PSX Book. The System will also 

determine if there are any accessible 

quotations with prices that are within 

the discretionary price range at 

destinations on the applicable routing 

table for the selected routing strategy. If 

there are such quotations, the System 

will generate one or more Discretionary 

IOCs to route to such destinations, with 

a price and size that match the price and 

size of the market center’s quotation. If 

necessary to maximize execution 

opportunities and comply with 

Regulation NMS, the System’s routing 

broker may mark such Discretionary 

IOCs as Intermarket Sweep Orders. If 

the Discretionary IOC(s) do not exhaust 

the full size of the Order with 

Discretion, the remaining size of the 

Order with Discretion will post to the 

PSX Book in accordance with the 

parameters that apply to the underlying 

Order Type. The System will then 

examine whether at any time there is an 

Order on the PSX Book with a price in 

the discretionary price range against 

which the Order with Discretion could 

execute. In doing so, the System will 

examine all Orders (including Orders 

that are not Displayed). If the System 

observes such an Order, it will generate 

a Discretionary IOC with a price equal 

to the price of the Order on the PSX 

Book and a size equal to the applicable 

size of the Order on the PSX Book. 

• If an Order that uses a reactive 

routing strategy (i.e., a strategy such as 

PSTG 64 that seeks routing opportunities 

after posting to the PSX Book) has been 

assigned a Discretion Order Attribute 

but does not have a pegged 

discretionary price range, upon entry of 

the Order, the System will examine all 

Orders (including Orders that are not 

Displayed) on the PSX Book to 

determine if there is an Order on the 

PSX Book with a price in the 

discretionary price range against which 

the Order with Discretion could 

execute. If the System observes such an 

Order, it will generate a Discretionary 

IOC with a price equal to the price of 

the Order on the PSX Book and a size 

equal to the applicable size of the Order 

on the PSX Book. The System will also 

determine if there are any accessible 

quotations with prices that are within 

the discretionary price range at 

destinations on the applicable routing 

table for the selected routing strategy. If 

there are such quotations, the System 

will generate one or more Discretionary 

IOCs to route to such destinations, with 

a price and size that match the price and 

size of the market center’s quotation. If 

necessary to maximize execution 

opportunities and comply with 

Regulation NMS, the System may mark 

such Discretionary IOCs as Intermarket 

Sweep Orders. If the Discretionary 

IOC(s) do not exhaust the full size of the 

Order with Discretion, the remaining 

size of the Order with Discretion will 

post to the PSX Book in accordance 

with the parameters that apply to the 

underlying Order Type. The System will 

then examine whether at any time there 


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65Of course, if the Order uses a reactive routing 

strategy, such as PSTG, that routes out whenever 

the System observes a quotation against which the 

Order is marketable at another market center, the 

Order could be routed out at any time. 

66Because the Displayed Order is reentered and 

the Non-Displayed Order is not, there are 

circumstances in which the Displayed Order may 

Continued 

is an Order on the PSX Book or an 

accessible quotation at another trading 

venue with a price in the discretionary 

price range against which the Order 

with Discretion could execute. In 

examining the PSX Book, the System 

will examine all Orders (including 

Orders that are not Displayed). If the 

System observes such an Order or 

quotation, it will generate a 

Discretionary IOC with a price equal to 

the price of such the Order or quotation 

and a size equal to the applicable size 

of the Order on the PSX Book or the 

displayed size of the quotation. 

• If an Order that uses a passive 

routing strategy has been assigned a 

Discretion Order Attribute and does 

have a pegged discretionary price range, 

upon entry of the Order, the System will 

examine all Orders (including Orders 

that are not Displayed) on the PSX Book 

to determine if there is an Order on the 

PSX Book with a price in the 

discretionary price range against which 

the Order with Discretion could 

execute. If the System observes such an 

Order, it will generate a Discretionary 

IOC with a price equal to the price of 

the Order on the PSX Book and a size 

equal to the applicable size of the Order 

on the PSX Book. The System will also 

determine if there are any accessible 

quotations with prices that are within 

the discretionary price range at 

destinations on the applicable routing 

table for the selected routing strategy. If 

there are such quotations, the System 

will generate one or more Discretionary 

IOCs to route to such destinations, with 

a price and size that match the price and 

size of the market center’s quotation. If 

necessary to maximize execution 

opportunities and comply with 

Regulation NMS, the System may mark 

such Discretionary IOCs as Intermarket 

Sweep Orders. If the Discretionary 

IOC(s) do not exhaust the full size of the 

Order with Discretion, the remaining 

size of the Order with Discretion will 

post to the PSX Book in accordance 

with the parameters that apply to the 

underlying Order Type. Thereafter, the 

Order will not generate further 

Discretionary IOCs unless the Order is 

updated in a manner that causes it to 

receive a new timestamp, in which case 

the Order will behave in the same 

manner as a newly entered Order. 

• If an Order that uses a reactive 

routing strategy has been assigned a 

Discretion Order Attribute and does 

have a pegged discretionary price range, 

upon entry of the Order, the System will 

examine all Orders (including Orders 

that are not Displayed) on the PSX Book 

to determine if there is an Order on the 

PSX Book with a price in the 

discretionary price range against which 

the Order with Discretion could 

execute. If the System observes such an 

Order, it will generate a Discretionary 

IOC with a price equal to the price of 

the Order on the PSX Book and a size 

equal to the applicable size of the Order 

on the PSX Book. The System will also 

determine if there are any accessible 

quotations with prices that are within 

the discretionary price range at 

destinations on the applicable routing 

table for the selected routing strategy. If 

there are such quotations, the System 

will generate one or more Discretionary 

IOCs to route to such destinations, with 

a price and size that match the price and 

size of the market center’s quotation. If 

necessary to maximize execution 

opportunities and comply with 

Regulation NMS, the System may mark 

such Discretionary IOCs as Intermarket 

Sweep Orders. If the Discretionary 

IOC(s) do not exhaust the full size of the 

Order with Discretion, the remaining 

size of the Order with Discretion will 

post to the PSX Book in accordance 

with the parameters that apply to the 

underlying Order Type. The System will 

then examine whether at any time there 

is an Order on the PSX Book or an 

accessible quotation at another trading 

venue with a price in the discretionary 

price range against which the Order 

with Discretion could execute. In 

examining the PSX Book, the System 

will examine Displayed Orders but will 

not examine Non-Displayed Orders. If 

the System observes such an Order or 

quotation, it will generate a 

Discretionary IOC with a price equal to 

the price of such the Order or quotation 

and a size equal to the applicable size 

of the Order on the PSX Book or the 

displayed size of the quotation. 

Reserve Size 

Reserve Size is an Order Attribute that 

permits a Participant to stipulate that an 

Order Type that is displayed may have 

its displayed size replenished from 

additional non-displayed size. An Order 

with Reserve Size may be referred to as 

a ‘‘Reserve Order.’’ At the time of entry, 

the displayed size of such an Order 

selected by the Participant must be one 

or more normal units of trading; an 

Order with a displayed size of a mixed 

lot will be rounded down to the nearest 

round lot. A Reserve Order with 

displayed size of an odd lot will be 

accepted but with the full size of the 

Order displayed. Reserve Size is not 

available for Orders that are not 

displayed; provided, however, that if a 

Participant enters Reserve Size for a 

Non-Displayed Order with a Time-inForce of IOC, the full size of the Order, 

including Reserve Size, will be 

processed as a Non-Displayed Order. 

Whenever a Participant enters an 

Order with Reserve Size, the System 

will process the Order as two Orders: a 

Displayed Order (with the 

characteristics of its selected Order 

Type) and a Non-Displayed Order. Upon 

entry, the full size of each such Order 

will be processed for potential 

execution in accordance with the 

parameters applicable to the Order 

Type. For example, a Participant might 

enter a Price to Display Order with 200 

shares displayed and an additional 

3,000 shares non-displayed. Upon entry, 

the Order would attempt to execute 

against available liquidity on the PSX 

Book, up to 3,200 shares. Thereafter, 

unexecuted portions of the Order would 

post to the PSX Book as a Displayed 

Price to Display Order and a NonDisplayed Order; provided, however, 

that if the remaining total size is less 

than the display size stipulated by the 

Participant, the Displayed Order will 

post without Reserve Size. Thus, if 

3,050 shares executed upon entry, the 

Price to Display Order would post with 

a size of 150 shares and no Reserve Size. 

When an Order with Reserve Size is 

posted, if there is an execution against 

the Displayed Order that causes its size 

to decrease below a normal unit of 

trading, another Displayed Order will be 

entered at the level stipulated by the 

Participant while the size of the NonDisplayed Order will be reduced by the 

same amount. Any remaining size of the 

original Displayed Order will remain on 

the PSX Book. The new Displayed Order 

will receive a new timestamp, but the 

Non-Displayed Order (and the original 

Displayed Order, if any) will not; 

although the new Displayed Order will 

be processed by the System as a new 

Order in most respects at that time, if it 

was designated as Routable, the System 

will not automatically route it upon 

reentry.65 For example, if a Price to 

Comply Order with Reserve Size posted 

with a Displayed Size of 200 shares, 

along with a Non-Displayed Order of 

3,000 and the 150 shares of the 

Displayed Order was executed, the 

remaining 50 shares of the original Price 

to Comply Order would remain, a new 

Price to Comply Order would post with 

a size of 200 shares and a new 

timestamp, and the Non-Displayed 

Order would be decremented to 2,800 

shares.66


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receive a different price than the Non-Displayed 

Order. For example, if, upon reentry, a Price to 

Display Order would lock or cross a newly posted 

Protected Quotation, the price of the Order will be 

adjusted but its associated Non-Displayed Order 

would not be adjusted. In that circumstance, it 

would be possible for the better priced NonDisplayed Order to execute prior to the Price to 

Display Order. 

67The ability to specify a random size reflects a 

substantive clarification of existing rules. 

68However, Orders that are assigned a Routing 

Order Attribute may be designated as ISOs by the 

Exchange when routed to other market centers to 

maximize their opportunities for execution. 

69Thus, for example, a Non-Displayed Order with 

a Time-in-Force of IOC marked ISO could execute 

against Orders on the PSX Book. However, the price 

level of the Non-Displayed Order would be 

considered open for Orders to post only if 

applicable market data showed that the price level 

was available. 

70 Data about executions reflect both sides of a 

trade in instances where trades executed on the 

Exchange and one side of a trade in instances where 

a Routable Order executed at another market center. 

The data does not include information about Orders 

with a Time-in-Force of GTC to the extent that such 

Orders executed on a day after the day of their 

original entry. 

A Participant may stipulate that the 

Displayed Order should be replenished 

to its original size. Alternatively, the 

Participant may stipulate that the 

original and subsequent displayed size 

will be an amount randomly determined 

based on factors selected by the 

Participant.67 Specifically, the 

Participant would select both a 

theoretical displayed size and a range 

size, which may be any share amount 

less than the theoretical displayed size. 

The actual displayed size will then be 

determined by the System within a 

range in which the minimum size is the 

theoretical displayed size minus the 

range size, and the maximum size is (i) 

the minimum size plus (ii) an amount 

that is two times the range size minus 

one round lot. For example, if the 

theoretical displayed size is 600 shares 

and the range size is 500, the minimum 

displayed size will be 100 shares 

(600¥500), and the maximum size will 

be 1,000 shares ((600¥500) + ((2 × 

500)¥100)). 

When the Displayed Order with 

Reserve Size is executed and 

replenished, applicable market data 

disseminated by the Exchange will 

show the execution and decrementation 

of the Displayed Order, followed by 

replenishment of the Displayed Order. 

In all cases, if the remaining size of the 

Non-Displayed Order is less than the 

fixed or random amount stipulated by 

the Participant, the full remaining size 

of the Non-Displayed Order will be 

displayed and the Non-Displayed Order 

will be removed. 

Attribution 

Attribution is an Order Attribute that 

permits a Participant to designate that 

the price and size of the Order will be 

displayed next to the Participant’s MPID 

in market data disseminated by PSX. An 

Order with Attribution is referred to as 

an ‘‘Attributable Order’’ and an Order 

without attribution is referred to as a 

‘‘Non-Attributable Order.’’ 

Intermarket Sweep Order 

Designation of an Order as an 

Intermarket Sweep Order, or ISO, is an 

Order Attribute that allows the Order to 

be executed within the System by 

Participants at multiple price levels 

without respect to Protected Quotations 

of other market centers within the 

meaning of Rule 600(b) under 

Regulation NMS. ISOs are immediately 

executable within the System against 

Orders against which they are 

marketable. An Order designated as an 

ISO may not be assigned a Routing 

Order Attribute.68 In connection with 

the trading of securities governed by 

Regulation NMS, Intermarket Sweep 

Orders shall be executed exclusively 

within the System and the entering 

Participant shall be responsible for 

compliance with Rules 610 and 611 

under Regulation NMS with respect to 

order protection and locked and crossed 

markets with respect to such Orders. 

Simultaneously with the routing of an 

ISO to the System, one or more 

additional limit orders, as necessary, are 

routed by the entering Participant to 

execute against the full displayed size of 

any Protected Quotation with a price 

that is superior to the price of the Order 

identified as an Intermarket Sweep 

Order (as defined in Rule 600(b) under 

Regulation NMS). These additional 

routed orders must be identified as 

Intermarket Sweep Orders. 

Upon receipt of an ISO, the System 

will consider the stated price of the ISO 

to be available for other Orders to be 

entered at that price, unless the ISO is 

not itself accepted at that price level (for 

example, a Post-Only Order that has its 

price adjusted to avoid executing 

against an Order on the PSX Book) or 

the ISO is not Displayed.69

In addition, as described with respect 

to various Order Types, such as the 

Price to Comply Order, Orders on the 

PSX Book that had their price adjusted 

may be eligible to be reentered at the 

stated price of the ISO. For example, if 

a Price to Comply Order to buy at $11 

would lock a Protected Offer at $11, the 

Price to Comply Order will be posted 

with a non-displayed price of $11 and 

a displayed price of $10.99. If the 

System then receives an ISO to buy at 

$11, the ISO will be posted at $11 and 

the Price to Comply Order will be 

reentered at $11 (if the Participant opted 

to have its Orders reentered). The 

respective priority of such reentered 

Orders will be maintained among 

multiple repriced Orders; however, 

other new Orders may also be received 

after receipt of the ISO but before the 

repricing of the Price to Comply Order 

is complete; accordingly, the priority of 

an Order on the PSX Book vis-a`-vis a 

newly entered Order is not guaranteed. 

Display 

Display is an Order Attribute that 

allows the price and size of an Order to 

be displayed to market participants via 

market data feeds. All Orders that are 

Attributable are also displayed, but an 

Order may be displayed without being 

Attributable. As discussed in Rule 

3301A, a Non-Displayed Order is a 

specific Order Type, but other Order 

Types may also be non-displayed if they 

are not assigned a Display Order 

Attribute; however, depending on 

context, all Orders that are not 

displayed may be referred to as ‘‘NonDisplayed Orders.’’ An Order with a 

Display Order Attribute may be referred 

to as a ‘‘Displayed Order.’’ 

Statistics on Order Types Usage 

Although the Exchange, like many 

exchanges, offers a wide range of 

possible combinations of Order Types 

and Order Attributes in order to provide 

options that support of a range of 

legitimate trading strategies, the 

Exchange believes that an analysis of 

the extent of usage of particular Order 

Type permutations is important to 

promoting a deeper understanding of 

current market structure. Based on 

analysis of a month of data for the 

period from August 26, 2013 through 

September 29, 2013, the Exchange offers 

the following observations about the 

usage of different Order Types on its 

market: 

• 19.53% of entered Order volume 

was Price to Comply Orders with no 

Order Attributes other than price and 

size. Such Orders were involved in 

17.53% of execution volume.70

• 45.54% of entered Order volume 

was Post-Only Orders with no Order 

Attributes other than price and size. 

Such Orders were involved in 14.70% 

of execution volume. 

• Non-Displayed Orders with a Timein-Force of IOC and no special Order 

Attributes accounted for 2.11% of 

entered Order volume and 11.20% of 

execution volume. Non-Displayed 

Orders with a Time-in-Force of IOC 

marked as ISOs but with no other 

special Order Attributes accounted for 

0.65% of entered Order volume and 

34.66% of execution volume. 


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71 15 U.S.C. 78f. 

72 15 U.S.C. 78f(b)(5). 73 15 U.S.C. 78k-1(a)(1). 

• Non-Displayed Orders with a Timein-Force longer than IOC but no special 

Order Attributes accounted for 3.78% of 

entered Order volume and 0.50% of 

execution volume. 

• Post-Only Orders marked ISO but 

with no other special Order Attributes 

accounted for 13.66% of entered Order 

volume and 13.59% execution volume. 

Price to Comply Orders marked ISO but 

with no other special Order Attributes 

accounted for 4.01% of entered Order 

volume and 1.15% of execution volume. 

• All other Order Type and Order 

Attribute combinations accounted for 

14.72% of entered Order volume and 

7.82% of execution volume. 

Thus, while a range of combinations 

of Order Types and Order Attributes can 

exist on PSX, the Exchange believes that 

these data support the conclusion that 

many of these possible combinations are 

not used to any appreciable extent. 

Rather, the vast majority of Order entry 

and Order execution volume is 

attributable to a small number of simple 

combinations: IOC Orders designed to 

access posted liquidity and various 

forms of priced limit Orders designed to 

access available liquidity and thereafter 

post to the PSX Book to provide 

liquidity, which promote price 

discovery by offering displayed 

liquidity at a price that may narrow the 

bid/offer spread on PSX and/or provide 

price improvement to subsequent 

Orders. The inclusion of an ISO Order 

Attribute on Orders is done in full 

compliance with Regulation NMS and 

serves to provide notice to the Exchange 

that liquidity has been accessed 

liquidity on other markets at a given 

price level in order to allow it to post 

liquidity on PSX at that price. While the 

Exchange does not believe that its Order 

Type offerings are excessively complex, 

given the relatively limited usage of 

certain Order Types and Order 

Attributes, the Exchange is continuing 

to analyze whether changes may be 

made to eliminate any Order Types, 

Order Attributes, or permissible 

combinations in a manner that would 

further promote the goals of 

transparency and ease of use for 

Participants. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6 of the Act,71

in general, and with Section 6(b)(5) of 

the Act 72 in particular, in that the 

proposal is designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, to foster cooperation 

and coordination with persons engaged 

in regulating, clearing, settling, 

processing information with respect to, 

and 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 general, to protect 

investors and the public interest. The 

proposed rule change also is designed to 

support the principles of Section 

11A(a)(1) 73 of the Act in that it seeks to 

assure fair competition among brokers 

and dealers and among exchange 

markets. In particular, the Exchange 

believes that the reorganized and 

enhanced descriptions of its Order 

Types, Order Attributes, and related 

System functionality will promote just 

and equitable principles of trade and 

perfect the mechanisms of a free and 

open market and the national market 

system by providing greater clarity 

concerning certain aspects of the 

System’s operations. The Exchange 

further believes that the proposed rule 

change will contribute to the protection 

of investors and the public interest by 

making the Exchange’s rules easier to 

understand. The Exchange further 

believes that the proposed rules, 

together with the presented statistics 

regarding Order Type and Order 

Attribute usage, will promote the 

efficient execution of investor 

transactions and further enhance public 

understanding of the Exchange’s 

operations, and thereby strengthen 

investor confidence in the Exchange and 

in the national market system. In 

addition, the Exchange believes that 

additional specificity in its rules will 

promote a better understanding of the 

Exchange’s operation, thereby 

facilitating fair competition among 

brokers and dealers and among 

exchange markets. 

Most of the System functionality 

described in the proposed rule change 

has already been described in previous 

proposed rule changes by the Exchange 

and approved or permitted to take effect 

on an immediate basis by the 

Commission. However, the Exchange 

believes that the reiteration of several 

principles underlying its Order Types 

and Order Attributes might be helpful in 

promoting a fuller understanding of 

these rules’ operation and their 

consistency with the Act. 

The functionality underlying Price to 

Comply Orders and Price to Display 

Orders provides a means by which 

Participants may enter a displayed limit 

order in compliance with Regulation 

NMS without the Participant 

definitively ascertaining whether the 

price of the Order would lock or cross 

a Protected Quotation. In the absence of 

the repricing functionality associated 

with the Order, PSX would need to 

reject the Order if it locked or crossed 

a Protected Quotation. 

By accepting a Price to Comply Order 

with a locking, non-displayed price and 

displayed price that is one minimum 

increment inferior to the locking price, 

the Exchange allows this Order Type to 

achieve several purposes. First, the 

displayed price of the Order promotes 

price discovery by establishing a new 

NBBO or adding to liquidity available at 

the NBBO. Second, the non-displayed 

price of the Order allows the Order to 

provide price improvement when the 

Order is executed. A Price to Display 

Order similarly promotes price 

discovery by establishing a new NBBO 

or adding liquidity available at the 

NBBO. It also provides one of the Order 

Types through which a Market Maker 

may offer displayed liquidity that is 

Attributable to its MPID. Notably, given 

the price adjustment functionality of the 

Order, it allows a Market Maker to offer 

Attributable liquidity at the NBBO. 

In addition, the repricing 

functionality associated with Price to 

Comply Orders and Price to Display 

Orders, whereby an Order that has been 

repriced by the System upon entry may 

be cancelled or reentered if a previously 

unavailable price level becomes 

available, promotes price discovery and 

provision of greater liquidity by 

facilitating the display of an Order at its 

chosen limit price. Because a reentered 

Order always receives a new timestamp, 

moreover, the functionality does not 

present fairness concerns that might 

arise if an Order that was not displayed 

became displayed at a different price 

level while retaining the timestamp that 

it received when originally entered. 

The Non-Displayed Order provides a 

means by which Participants may access 

and/or offer liquidity without signaling 

to other Participants the extent of their 

trading interest. Moreover, because the 

Non-Displayed Order may lock a 

Protected Quotation, it provides a 

means by which a Participant may 

provide price improvement. For 

example, if the Best Bid was $11 and the 

Best Offer was $11.01, a Non-Displayed 

Order to buy at $11.01 would provide 

$0.01 price improvement to an 

incoming sell Order priced at the Best 

Bid. 

In addition, the repricing 

functionality associated with NonDisplayed Order promotes provision of 

greater liquidity and eventual price 

discovery (via reporting of Order 

executions) because it facilitates the 


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74SR–NYSE–2014–32 Approval Order. 

75See SR–NYSE–2014–32 Approval Order 

(affirming that exchanges may adopt rules allowing 

market participants to ‘‘ship and post’’). 

posting of a Non-Displayed Order at its 

chosen limit price. In addition, the 

functionality that cancels NonDisplayed Orders when crossed by a 

Protected Quotation helps to prevent 

trade-throughs by ensuring that a NonDisplayed Order will not execute at a 

price inferior to the Price of a Protected 

Quotation. Because a reentered Order 

always receives a new timestamp, 

moreover, the functionality does not 

present fairness concerns that might 

arise if an Order was able to move price 

while retaining an earlier timestamp. 

The primary purpose of Post-Only 

Orders is to ‘‘provide displayed 

liquidity to the market and thereby 

contribute to public price discovery—an 

objective that is fully consistent with 

the Act.’’ 74 Under the prevailing 

‘‘maker/taker’’ cost structure of most 

exchanges, the Post-Only Order also 

allows a Participant to control its 

trading costs by giving consideration to 

costs in determining whether the Order 

should execute upon entry. However, 

the manner in which the Post-Only 

Order operates ensures that a Post-Only 

Order that locks or crosses an Order on 

the PSX Book will either execute upon 

entry or post at a displayed price that 

potentially provides liquidity. 

Moreover, because a Post-Only Order 

does not cancel back to the Participant 

if it cannot post at its entered limit 

price, it does not provide a means to 

ascertain the existence of locking or 

crossing Orders without also reflecting a 

commitment to execute or post and 

display. Similarly, the functionality that 

allows a Post-Only Order to be marked 

IOC does not provide information 

regarding the existence of locking or 

crossing Orders on the PSX Book since 

the Order has its price adjusted 

automatically, without reference to the 

price of any other Orders other than 

Orders at the NBBO. 

In addition, the processing of PostOnly Orders with respect to locking or 

crossing Protected Quotations serves the 

same purposes as the processing 

discussed above with respect to Price to 

Comply Orders and Price to Display 

Orders. By accepting a Non-Attributable 

Post-Only Order that locks or crosses a 

Protected Quotation with a locking, 

non-displayed price and displayed price 

that is one minimum increment inferior 

to the locking price, the Exchange 

allows the displayed price of the Order 

to promote price discovery by 

establishing a new NBBO or adding to 

liquidity available at the NBBO, while 

also allowing the non-displayed price of 

the Order to provide price improvement 

when the Order is executed. An 

Attributable Post-Only Order similarly 

promotes price discovery by 

establishing a new NBBO or adding 

liquidity available at the NBBO. 

The repricing functionality associated 

with Post-Only Orders, whereby an 

Order that has been repriced by the 

System upon entry may be cancelled or 

reentered if a previously unavailable 

price level becomes available, promotes 

price discovery and provision of greater 

liquidity by facilitating the display of an 

Order at its chosen limit price. Because 

a reentered Order always receives a new 

timestamp, moreover, the functionality 

does not present fairness concerns that 

might arise if an Order that was not 

displayed became displayed at a 

different price level while retaining the 

timestamp that it received when 

originally entered. 

A Post-Only Order may be designated 

as an ISO and accepted at a price that 

locks or crosses a Protected Quotation, 

since such designation reflects a 

representation by the Participant that it 

has simultaneously routed one or more 

additional limit orders, as necessary, to 

execute against the full displayed size of 

any Protected Quotations that the PostOnly Order would lock or cross.75

Because the Exchange maintains an 

active regulatory surveillance and 

enforcement program to verify that 

Participants are not improperly 

designating Orders as ISOs, the 

possibility for a Participant to 

systematically use a Post-Only Order 

marked ISO to occupy a price level 

while locking Protected Quotations is 

mitigated. Moreover, the System does 

not interpret a Post-Only Order that is 

marked ISO but that has its price 

adjusted prior to posting as the basis for 

accepting additional Orders at the 

Order’s limit price level, thereby 

providing further assurance against the 

use of an ISO designation for an 

improper purpose. 

Market Maker Peg Orders allow a 

Market Maker to maintain a continuous 

two-sided quotation at a price that is 

compliant with the requirements for 

Market Makers set forth in Rule 

4613(a)(2). Thus, the Order Type serves 

the function of ensuring that Market 

Makers offer Displayed and Attributable 

liquidity at prices that bear a reasonable 

relation to the NBBO. Of course, Market 

Makers may also provide liquidity at 

prices closer to the NBBO than those 

established by the Market Maker Peg 

Order, but the Order Type enables the 

Market Maker to provide a backstop of 

liquidity at prices that are not 

unreasonably distant from the NBBO. 

Several of the available Order 

Attributes merely provide means to 

designate the basic parameters of any 

Order: these include price, size, Timein-Force, Attribution, and Display. The 

proposed rules clearly state limitations 

applicable to each of these parameters, 

such as available Times-in-Force and 

limitations on the permissible prices 

and sizes of Orders. 

The Pegging Order Attribute allows a 

Participant to have the System adjust 

the price of the Order continually in 

order to keep the price within defined 

parameters. Thus, the System performs 

price adjustments that would otherwise 

be performed by the Participant through 

cancellation and reentry of Orders. The 

fact that a new timestamp is created for 

a Pegged Order whenever it has its price 

adjusted allows the Order to seek 

additional execution opportunities and 

ensures that the Order does not ‘‘jump 

the queue’’ with respect to any Orders 

that were previously at the Pegged 

Order’s new price level. Thus, while the 

Order Attribute may be seen as 

introducing additional complexity with 

respect to the operation of the Exchange, 

it is in effect merely a process for 

removing and entering Orders at new 

prices based on changed market 

conditions. 

The Minimum Quantity Order 

Attribute allows a Participant that may 

wish to buy or sell a large amount of a 

security to avoid signaling its trading 

interest unless it can purchase a certain 

minimum amount. Thus, the Order 

Attribute supports the interest of 

institutional investors and others in 

being able to minimize the impact of 

their trading on the price of securities. 

The Routing Order Attribute, which is 

thoroughly described in existing Rule 

3315, provides an optional means by 

which a Participant may direct the 

Exchange to seek opportunities to 

execute an Order at other market 

centers. The System is designed to 

pursue execution opportunities on 

behalf of Participants in an aggressive 

manner by, in most instances, first 

obtaining shares available on the PSX 

Book, then routing to other market 

centers in accordance with the strategy 

designated by the Participant, then 

returning the PSX Book as if a new 

Order before posting to the PSX Book. 

In addition, to maximize execution 

opportunities, the System will, as 

appropriate and in accordance with 

Regulation NMS, designate a Routable 

Order as an Intermarket Sweep Order. 

The Discretion Order Attribute allows 

a Participant to expand opportunities 

for an Order to access liquidity by 


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Federal Register / Vol. 80, No. 65 / Monday, April 6, 2015 / Notices 18469 

76SR–NYSE–2014–32 Approval Order. 

77 Id. 

allowing it to execute at any price 

within a specified range. Thus, while 

there is some complexity associated 

with the processing of Discretionary 

Orders, the Order Attribute merely 

allows the System to ascertain whether, 

under the conditions provided for in the 

rule, the Participant could access 

liquidity at a price within the range that 

the Participant has designated. If so, the 

Order Attribute generates an IOC Order 

to access the liquidity. Moreover, it 

should be noted that although in some 

circumstances, the System will examine 

Orders on the PSX Book that are not 

Displayed to ascertain the existence of 

execution opportunities, the System 

would convey information to the 

Participant regarding such Orders only 

by executing against them. Thus, the 

discretionary price range reflects an 

actionable commitment by the 

Participant to trade at prices in that 

range. As a result, the Order Attribute 

promotes price discovery through 

executions that occur in the price range. 

Finally, it should be noted that 

Discretionary IOCs access liquidity, and 

therefore the Order Attribute does not 

present an opportunity for a Participant 

to obtain a rebate with respect to 

executions against previously posted 

Orders. 

The Reserve Size Order Attribute 

allows a Participant to display trading 

interest at a given price while also 

posting additional non-displayed 

trading interest. The functionality 

assists the Participant in managing this 

trading interest by eliminating the need 

for the Participant to enter additional 

size following the execution of the 

displayed trading interest. Thus, the 

functionality achieves a balance 

between promoting price discovery 

through displayed size and allowing a 

Participant to guard against price impact 

by hiding the full extent of its trading 

interest. The random reserve feature of 

the Order further assists a Participant in 

not revealing the extent of its trading 

interest because it diminishes the 

likelihood that other Participants will 

conclude that the Order is a Reserve 

Size Order if they repeatedly view it 

being replenished at the same size. 

Similarly, the manner in which the 

Exchange disseminates data regarding 

the execution and replenishment of a 

Reserve Size Order ensures that the 

process is indistinguishable to other 

Participants from the execution of an 

Order without Reserve Size followed by 

the entry of a new Order; this processing 

also ensures that only the displayed 

portion of the Reserve Size Order is 

treated as a Protected Quotation. 

The Intermarket Sweep Order 

attribute is a function of Regulation 

NMS, which provides for an Order to 

execute without respect to Protected 

Quotations if it is designated as an ISO 

and if one or more additional limit 

orders, as necessary, are routed to 

execute against the full displayed size of 

any Protected Quotation with a price 

that is superior to the price of the Order 

identified as an ISO. As recently 

reaffirmed by the Commission, 

Regulation NMS allows such additional 

orders to be routed by an exchange or 

by the Participant that enters the ISO.76

Accordingly, the exchange receiving an 

ISO may accept the receipt of the Order 

as a representation that the Participant 

entering it has satisfied its obligations; 

provided, however, that the exchange 

itself maintains a surveillance and 

enforcement program to verify that the 

Participant is not acting in violation of 

this requirement. For this reason, it is 

also consistent with the Act for a 

Participant to designate an Order with a 

Time-in-Force longer than IOC, or an 

Order with functionality such as the 

Post-Only Order, as an ISO.77

Specifically, attaching an ISO 

designation to such Order reflects a 

representation that the Participant has 

determined that Protected Quotations at 

the price of the Order have been 

eliminated, such that the Order is 

entitled to post and provide liquidity. In 

the case of a Post-Only Order, however, 

if the Order’s price is adjusted to avoid 

executing against an Order on the PSX 

Book, PSX will not consider the ISO 

designation in determining whether the 

Post-Only Order’s limit price level is 

now open, since the Post-Only ISO itself 

is not actually posting at that price. 

Accordingly, in that circumstance the 

use of a Post-Only ISO cannot be used 

to open a price level to additional 

Orders unless the Exchange ascertains 

through market data provided by other 

exchanges that the price level actually is 

open. 

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 that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. As 

previously stated, the Exchange is not 

proposing substantively to modify the 

operation of any of its current Order 

Types or Order Attributes or the 

operation of the System; rather, the 

proposed rule change is intended to 

provide more detail regarding the 

System’s functionality. The proposed 

rule change is not designed to address 

any competitive issues, but rather to 

provide additional specificity and 

transparency to Participants and the 

investing public regarding PSX’s Order 

Types, Order Attributes, and System 

functionality. Since the Exchange does 

not proposed substantively to modify 

the operation of Order Types, Order 

Attributes, or System functionality, the 

proposed changes will not impose any 

burden on competition. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the Exchange consents, 

the Commission shall: (a) By order 

approve or disapprove such proposed 

rule change, or (b) institute proceedings 

to determine whether the proposed rule 

change should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

Phlx–2015–29 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–2015–29. 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 


tkelley on DSK4VPTVN1PROD with NOTICES
18470 Federal Register / Vol. 80, No. 65 / Monday, April 6, 2015 / Notices 

78 17 CFR 200.30–3(a)(12). 

1The rule requires a contract with the FCM to 

contain two provisions requiring the FCM to 

comply with existing requirements under the CEA 

and rules adopted thereunder. Thus, to the extent 

these provisions could be considered collections of 

information, the hours required for compliance 

would be included in the collection of information 

burden hours submitted by the CFTC for its rules. 

2This estimate is based on the number of funds 

that reported on Form N–SAR from June 1, 2014– 

November 30, 2014, in response to items (b) 

through (i) of question 70, that they engaged in 

futures and commodity option transactions. 

3These estimates are based on the assumption 

that 10% of fund complexes and funds enter into 

new FCM contracts each year. This assumption 

encompasses fund complexes and funds that enter 

into FCM contracts for the first time, as well as fund 

complexes and fund that change the FCM with 

whom they maintain margin accounts for 

commodities transactions. 

4This estimate is based upon the following 

calculation: (29 fund complexes × 1 hour) + (97 

funds × 0.1 hours) = 39 hours. 

5The $380 per hour figure for an attorney is from 

SIFMA’s Management & Professional Earnings in 

the Securities Industry 2013, modified by 

Commission staff to account for an 1800-hour workyear and multiplied by 5.35 to account for bonuses, 

firm size, employee benefits and overhead. 

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 

a.m. and 3 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-Phlx2015–29, and should be submitted on or 

before April 27, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.78

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–07751 Filed 4–3–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Proposed Collection; Comment 

Request 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE., Washington, DC 

20549–2736. 

Extension: 

Rule 17f–6, SEC File No. 270–392, OMB 

Control No. 3235–0447. 

Notice is hereby given that, pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501–3520), the Securities 

and Exchange Commission (the 

‘‘Commission’’) is soliciting comments 

on the collection of information 

summarized below. The Commission 

plans to submit this existing collection 

of information to the Office of 

Management and Budget for extension 

and approval. 

Rule 17f–6 (17 CFR 270.17f–6) under 

the Investment Company Act of 1940 

(15 U.S.C. 80a) permits registered 

investment companies (‘‘funds’’) to 

maintain assets (i.e., margin) with 

futures commission merchants 

(‘‘FCMs’’) in connection with 

commodity transactions effected on 

both domestic and foreign exchanges. 

Prior to the rule’s adoption, funds 

generally were required to maintain 

these assets in special accounts with a 

custodian bank. 

The rule requires a written contract 

that contains certain provisions 

designed to ensure important safeguards 

and other benefits relating to the 

custody of fund assets by FCMs. To 

protect fund assets, the contract must 

require that FCMs comply with the 

segregation or secured amount 

requirements of the Commodity 

Exchange Act (‘‘CEA’’) and the rules 

under that statute. The contract also 

must contain a requirement that FCMs 

obtain an acknowledgment from any 

clearing organization that the fund’s 

assets are held on behalf of the FCM’s 

customers according to CEA provisions. 

Because rule 17f–6 does not impose 

any ongoing obligations on funds or 

FCMs, Commission staff estimates there 

are no costs related to existing contracts 

between funds and FCMs. This estimate 

does not include the time required by an 

FCM to comply with the rule’s contract 

requirements because, to the extent that 

complying with the contract provisions 

could be considered ‘‘collections of 

information,’’ the burden hours for 

compliance are already included in 

other PRA submissions.1

Thus, Commission staff estimates that 

any burden of the rule would be borne 

by funds and FCMs entering into new 

contracts pursuant to the rule. 

Commission staff estimates that 

approximately 291 fund complexes and 

965 funds currently effect commodities 

transactions and could deposit margin 

with FCMs in connection with those 

transactions pursuant to rule 17f–6.2

Staff further estimates that of this 

number, 29 fund complexes and 97 

funds enter into new contracts with 

FCMs each year.3

Based on conversations with fund 

representatives, Commission staff 

understands that fund complexes 

typically enter into contracts with FCMs 

on behalf of all funds in the fund 

complex that engage in commodities 

transactions. Funds covered by the 

contract are typically listed in an 

attachment, which may be amended to 

encompass new funds. Commission staff 

estimates that the burden for a fund 

complex to enter into a contract with an 

FCM that contains the contract 

requirements of rule 17f–6 is one hour, 

and further estimates that the burden to 

add a fund to an existing contract 

between a fund complex and an FCM is 

6 minutes. 

Accordingly, Commission staff 

estimates that funds and FCMs spend 39 

burden hours annually complying with 

the information collection requirements 

of rule 17f–6.4 At $380 per hour of 

professional (attorney) time, 

Commission staff estimates that the 

annual dollar cost for the 39 hours is 

$14,820.5 These estimates are made 

solely for the purposes of the Paperwork 

Reduction Act, and are not derived from 

a comprehensive or even a 

representative survey or study of the 

costs of Commission rules and forms. 

Compliance with the collection of 

information requirements of the rule is 

necessary to obtain the benefit of relying 

on the rule. An agency may not conduct 

or sponsor, and a person is not required 

to respond to, a collection of 

information unless it displays a 

currently valid control number. 

Written comments are invited on: (a) 

Whether the collection of information is 

necessary for the proper performance of 

the functions of the Commission, 

including whether the information has 

practical utility; (b) the accuracy of the 

Commission’s estimate of the burden of 

the collection of information; (c) ways to 

enhance the quality, utility, and clarity 

of the information collected; and (d) 

ways to minimize the burden of the 

collection of information on 

respondents, including through the use 

of automated collection techniques or 

other forms of information technology. 

Consideration will be given to 

comments and suggestions submitted in 

writing within 60 days after this 

publication. 


tkelley on DSK4VPTVN1PROD with NOTICES