Federal Register / Vol. 83, No. 8 / Thursday, January 11, 2018 / Notices 1445 

13 15 U.S.C. 78s(b)(3)(A)(iii). 

14 17 CFR 240.19b–4(f)(6). 

15 17 CFR 240.19b–4(f)(6). 

16 17 CFR 240.19b–4(f)(6)(iii). 

17 15 U.S.C. 78s(b)(2)(B). 18 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 82245 

(Dec. 8, 2017), 82 FR 58825 (Dec. 14, 2017) (SR– 

Phlx–2017–99) (‘‘Notice’’). 

4See Phlx Rule 1059. 

5See Securities Exchange Act Release No. 63626 

(Dec. 30, 2010), 76 FR 812 (Jan. 6, 2011) (SR–Phlx– 

2010–185). 

6See Commentary .02 to Phlx Rule 1059. See also 

Securities Exchange Act Release No. 79782 (January 

12, 2017), 82 FR 6667 (January 19, 2017) (SR–Phlx– 

2017–01). 

designed to ensure that resting orders 

with an MTS Modifier would not trade 

through displayed orders or violate 

intra-market priority. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The Exchange has filed the proposed 

rule change pursuant to Section 

19(b)(3)(A)(iii) of the Act 13 and Rule 

19b–4(f)(6) thereunder.14 Because the 

proposed rule change does not: (i) 

Significantly affect the protection of 

investors or the public interest; (ii) 

impose any significant burden on 

competition; and (iii) become operative 

prior to 30 days from the date on which 

it was filed, or such shorter time as the 

Commission may designate, if 

consistent with the protection of 

investors and the public interest, the 

proposed rule change has become 

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

of the Act and Rule 19b–4(f)(6)(iii) 

thereunder. 

A proposed rule change filed under 

Rule 19b–4(f)(6) 15 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b4(f)(6)(iii),16 the Commission 

may designate a shorter time if such 

action is consistent with the protection 

of investors and the public interest. 

At any time within 60 days of the 

filing of such proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

under Section 19(b)(2)(B) 17 of the Act to 

determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NYSEAMER–2017–40 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–NYSEAMER–2017–40. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–NYSEAMER–2017–40 and 

should be submitted on or before 

February 1, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–00306 Filed 1–10–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–82445; File No. SR–Phlx– 

2017–99] 

Self-Regulatory Organizations; Nasdaq 

PHLX LLC; Order Granting Accelerated 

Approval of a Proposed Rule Change 

To Amend Rule 1059 To Make 

Permanent a Program That Allows 

Cabinet Trade Transactions To Take 

Place at a Price Below $1 Per Option 

Contract 

January 5, 2018. 

I. Introduction 

On November 29, 2017, Nasdaq PHLX 

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

with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 (‘‘Act’’) 1 and Rule 

19b–4 thereunder,2 a proposed rule 

change amending the Exchange’s rules 

to make permanent a program that 

allows transactions to take place in open 

outcry trading at prices of at least $0 but 

less than $1 per option contract (‘‘subdollar cabinet trades’’). The proposed 

rule change was published for comment 

in the Federal Register on December 14, 

2017.3 The Commission received no 

comment letters on the proposed rule 

change. This order approves the 

proposed rule change on an accelerated 

basis. 

II. Description of the Proposed Rule 

Change 

Prior to 2010, Phlx Rule 1059 

(Accommodation Transactions) allowed 

cabinet trade transactions at a price of 

$1 per option contract to occur in open 

outcry trading for certain options 

classes.4 In 2010, the Exchange 

amended Phlx Rule 1059 on a pilot 

basis to allow sub-dollar cabinet trades 

to take place at prices of at least $0 but 

less than $1 per option contract.5 The 

Exchange now proposes to amend Phlx 

Rule 1059 to make permanent its subdollar cabinet trade pilot program, 

which currently is scheduled to expire 

on January 5, 2018.6

The Exchange permits sub-dollar 

cabinet trade transactions to be traded 


srobinson on DSK9F5VC42PROD with NOTICES
1446 Federal Register / Vol. 83, No. 8 / Thursday, January 11, 2018 / Notices 

7See Commentary .02 to Phlx Rule 1059. 

8Notice, supra note 3, at 58826. The Exchange 

notes that this is especially true for transactions in 

options classes in the Penny Pilot Program, for 

which cabinet trades are not otherwise permitted. 

See id. 

9 15 U.S.C. 78f. 

10 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

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

11 15 U.S.C. 78f(b)(5). 

12See Notice, supra note 3, at 58826. 

13See id. 

14 Id. See also id. at 58826 (noting that ‘‘in 2016, 

there were a total of 442 [c]abinet [t]rades’’ on the 

Exchange ‘‘comprising 244,734 contracts,’’ and 

‘‘[e]ach contract was executed at a price of $0.01.’’). 

15See Notice, supra note 3, at 58826. 

16 Id. 

17 Id. 

18 15 U.S.C. 78s(b)(2). 

19As noted above, the Notice was published for 

comment in the Federal Register on December 14, 

2017 and the comment period closed on December 

29, 2017. Accordingly, the 30th day after 

publication of the Notice is January 13, 2018. 

20See Securities Exchange Act Release No. 80615 

(May 5, 2017), 82 FR 22036 (May 11, 2017) (SR– 

NYSEArca–2017–24). 

21See Securities Exchange Act Release No. 80616 

(May 5, 2017), 82 FR 22033 (May 11, 2017) (SR– 

NYSEMKT–2017–13). 

22 15 U.S.C. 78s(b)(2). 

23 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

pursuant to the same procedures 

applicable to $1 cabinet trades, except 

that for sub-dollar cabinet trades (i) bids 

and offers for opening transactions are 

permitted only to accommodate closing 

transactions, and (ii) transactions in 

option classes participating in the 

Penny Pilot Program are permitted.7 The 

Exchange believes that ‘‘allowing a price 

of at least $0 but less than $1 better 

accommodates the closing of options 

positions in series that are worthless or 

not actively traded, particularly when 

there has been a significant move in the 

price of the underlying security, 

resulting in a large number of series 

being out-of-the-money.’’ 8

III. Discussion and Commission 

Findings 

After careful review, the Commission 

finds that the proposed rule change is 

consistent with the requirements of the 

Act 9 and the rules and regulations 

thereunder applicable to a national 

securities exchange.10 In particular, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act,11 which requires, 

among other things, that the rules of a 

national securities exchange be 

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. 

In the Notice, the Exchange explains 

that it initially adopted the sub-dollar 

cabinet trade rule on a pilot basis to 

‘‘evaluate the efficacy of the change and 

to address any operational issues that 

might arise in processing [c]abinet 

trades.’’ 12 The Exchange represents that 

at the time it adopted the pilot, its 

system permitted reporting cabinet 

trades at prices as small as $0.0001, as 

it does today.13 Based on its experience 

with these types of trades, the Exchange 

represents that its system ‘‘allows 

[c]abinet trades to be processed in a 

manner similar to how all other trades 

are processed by the [E]xchange.’’ 14

In support of making the pilot 

program permanent, the Exchange 

represents that ‘‘there are no operational 

issues in processing and clearing 

[c]abinet [t]rades in penny and subpenny increments.’’ 15 The Exchange 

also represents that ‘‘members and 

member organizations have not raised 

any concerns with the processing of 

[c]abinet trades.’’ 16 Finally, the 

Exchange represents that it is ‘‘not 

aware of the Options Clearing 

Corporation (‘‘OCC’’) having operational 

issues with processing [c]abinet trades 

submitted by the Exchange.’’ 17

Based on the representations of the 

Exchange, the Commission believes that 

permanent approval of the sub-dollar 

cabinet trade pilot is consistent with the 

Act. In particular, the Commission notes 

that the Exchange’s system allows it to 

process cabinet trades in the normal 

course. Further, the Exchange has not 

observed any issues or concerns with 

sub-dollar cabinet trades at the 

Exchange level, with and among its 

members, or in processing the trades 

through OCC. Accordingly, the 

Exchange’s rule appears reasonably 

designed to remove impediments, 

prevent fraudulent and manipulative 

acts and practices, and foster 

cooperation and coordination with 

persons engaged in facilitating 

transactions in securities. Further, 

permanent approval will continue to 

provide investors with choice when 

considering a cabinet trade, including 

the ability to price such trades below $1 

per contract. 

IV. Accelerated Approval of Proposed 

Rule Changes 

The Commission finds good cause, 

pursuant to Section 19(b)(2) of the 

Act,18 to approve the proposed rule 

changes prior to the 30th day after the 

date of publication of the Notice in the 

Federal Register.19 The Commission 

believes that the proposed rule change 

does not raise novel regulatory issues. 

The Commission notes that earlier this 

year it approved similar proposed rule 

changes from NYSE Arca, Inc.20 and 

NYSE American LLC (formerly known 

as NYSE MKT LLC) 21 making 

permanent sub-dollar cabinet trade pilot 

programs. The Exchange has 

represented that its system is able to 

process cabinet trades similar to the 

processing of its other trades, it has not 

experienced any issues processing 

cabinet trades at the Exchange or 

through OCC, and its members have not 

expressed concerns. In addition, the 

Commission did not receive any 

comments on the proposed changes. 

Accordingly, the Commission finds that 

good cause exists to approve the 

proposed rule changes on an accelerated 

basis. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,22 that the 

proposed rule change (SR–Phlx–2017– 

99) be, and hereby is, approved on an 

accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.23

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–00304 Filed 1–10–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–82446; File No. SR–ISE– 

2017–112] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Certain NonTransaction Fees in the Exchange’s 

Schedule of Fees 

January 5, 2018. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on December 

22, 2017, Nasdaq ISE, LLC (‘‘ISE’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Commission is 

publishing this notice to solicit 


srobinson on DSK9F5VC42PROD with NOTICES