[Federal Register Volume 86, Number 135 (Monday, July 19, 2021)]
[Notices]
[Pages 38147-38151]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-15186]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-92377; File No. SR-Phlx-2021-40]


Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend Equity 4, 
Rules 3301A and 3301B

July 13, 2021.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on July 2, 2021, Nasdaq PHLX LLC (``Phlx'' 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 comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Equity 4, Rule 3301B, as described 
further below.
    The text of the proposed rule change is available on the Exchange's 
website at https://listingcenter.nasdaq.com/rulebook/phlx/rules, at the 
principal office of the Exchange, and at the Commission's Public 
Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Presently, the Exchange is making functional enhancements and 
improvements to specific Order Attributes \3\ that are currently only 
available via the RASH Order entry protocol.\4\ Specifically, the 
Exchange will be upgrading the logic and implementation of these Order 
Types and Order Attributes so that the features are more streamlined 
across the Exchange Systems and order entry protocols, and will enable 
the Exchange to process these Orders more quickly and efficiently. 
Additionally, this System upgrade will pave the way for the Exchange to 
enhance the OUCH Order entry protocol \5\ so that Participants may 
enter such Order Types and Order Attributes via OUCH, in addition to 
the RASH Order entry protocols.\6\ The Exchange plans to implement its 
enhancement of the OUCH protocol sequentially, by Order Type and Order 
Attribute.\7\
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    \3\ An ``Order Attribute'' is a 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 
Exchange Book when submitted to the System. See Equity 1, Section 
1(b)(7).
    \4\ The RASH (Routing and Special Handling) Order entry protocol 
is a proprietary protocol that allows members to enter Orders, 
cancel existing Orders and receive executions. RASH allows 
participants to use advanced functionality, including discretion, 
random reserve, pegging and routing. See http://nasdaqtrader.com/content/technicalsupport/specifications/TradingProducts/rash_sb.pdf.
    \5\ The OUCH Order entry protocol is a proprietary protocol that 
allows subscribers to quickly enter orders into the System and 
receive executions. OUCH accepts limit Orders from members, and if 
there are matching Orders, they will execute. Non-matching Orders 
are added to the Limit Order Book, a database of available limit 
Orders, where they are matched in price-time priority. OUCH only 
provides a method for members to send Orders and receive status 
updates on those Orders. See https://www.nasdaqtrader.com/Trader.aspx?id=OUCH.
    \6\ The Exchange designed the OUCH protocol to enable members to 
enter Orders quickly into the System. As such, the Exchange 
developed OUCH with simplicity in mind, and it therefore lacks more 
complex order handling capabilities. By contrast, the Exchange 
specifically designed RASH to support advanced functionality, 
including discretion, random reserve, pegging and routing. Once the 
System upgrades occur, then the Exchange intends to propose further 
changes to its Rules to permit participants to utilize OUCH, in 
addition to RASH, to enter order types that require advanced 
functionality.
    \7\ The Exchange notes that its sister exchange, The Nasdaq 
Stock Market, LLC (``Nasdaq''), has already filed similar proposed 
rule changes with the Commission. See Securities Exchange Act 
Release No. 34-92180 (June 15, 2021), 86 FR 33420 (June 24, 2021) 
(SR-NASDAQ-2021-044).
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    To support and prepare for these upgrades and enhancements, the 
Exchange recently submitted two rule filings to the Commission that 
amended its rules pertaining to, among other things, Market Maker Peg 
Orders and Orders with Reserve Size.\8\ The Exchange now proposes to 
further amend its Rules governing Order Attributes, at Rule 3301B. In 
particular, the Exchange proposes to adjust the current functionality 
of the Pegging \9\ and Trade Now Attributes,\10\ as described below, so 
that they align with how the System, once upgraded, will handle these 
Order Attributes going forward. The Exchange also proposes to amend the 
Midpoint Peg Post-Only Order Type, at Rule 3301A, to accommodate 
changes to the Trade Now Attribute.
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    \8\ See Securities Exchange Act Release No. 34-91263 (March 5, 
2021), 86 FR 13950 (March 11, 2021) (SR-Phlx-2021-11); Securities 
Exchange Act Release No. 34-90558 (December 3, 2020), 85 FR 79231 
(December 9, 2020) (SR-Phlx-2020-51).
    \9\ See Rule 3301B(d).
    \10\ See Rule 3301B(l).

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[[Page 38148]]

Changes to Pegging Order Attribute
    First, the Exchange proposes to amend Rule 3301B(d), which governs 
the Pegging Order Attribute. The Exchange offers three types of 
Pegging: Primary Pegging, Market Pegging, and Midpoint Pegging.\11\ The 
Rule presently provides that if, at the time of entry, there is no 
price to which a Pegged Order can be pegged, the Order will be 
rejected, provided, however, that a Displayed Order that has Market 
Pegging, or an Order with a Non-Display Attribute that has Primary 
Pegging or Market Pegging, will be accepted at its limit price. The 
Exchange proposes to replace this text by stating that if, at the time 
of entry, there is no price to which a Pegged Order, that has not been 
assigned a Routing Order Attribute, can be pegged or pegging would lead 
to a price at which the Order cannot be posted, then the Order will not 
be immediately available on the Exchange Book and will be entered once 
there is a permissible price.\12\ The Exchange proposes this change so 
as to enhance the manner in which the Exchange presently handles Pegged 
Orders in this scenario. Rather than reject such Orders outright, and 
require customers to continuously reenter the Orders thereafter until a 
pegging price emerges, which may cost them queue priority, the Exchange 
believes that it would be more efficient and customer-friendly to 
simply hold a Pegged Order until a permissible pegging price 
emerges.\13\
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    \11\ See Rule 3301B(d) (defining ``Primary Pegging'' as pegging 
with reference to the inside quotation on the same side of the 
market, ``Market Pegging'' as pegging with reference to the inside 
quotation on the opposite side of the market, and ``Midpoint 
Pegging'' as pegging with reference to the midpoint between the 
inside bid and the inside offer).
    \12\ This change is applicable to Primary, Market and Midpoint 
Pegging Orders entered via RASH/FIX; OUCH/FLITE Midpoint Pegging 
behavior is not affected by this change. The Exchange also proposes 
to amend existing language in this provision which states that ``if 
the Inside Bid and Inside Offer are crossed or if there is no Inside 
Bid and/or Inside Offer, the Order will not be accepted.'' The 
proposed amendment would specify that this language applies only to 
Orders with Midpoint Pegging entered through OUCH or FLITE. The 
proposed changes to pegged orders entered through RASH or FIX will 
allow the Exchange to handle the Order more consistent with the 
customer intended instruction, and are necessary to facilitate 
forthcoming System enhancements.
    \13\ Meanwhile, the Exchange proposes to amend the Rule to state 
that if a Pegged Order is assigned a Routing Order Attribute, and a 
permissible pegging price is not available upon entry, then the 
Order will continue to be rejected. The Exchange proposes to retain 
existing practice for Pegged Orders with Routing Order Attributes 
because the Exchange is not yet prepared to make similar changes to 
such Orders, although it contemplates doing so in the near future.
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    A similar rationale applies to the Exchange's proposal to cease 
accepting certain Market or Primary Pegged Orders at their limit prices 
if no pegging price is available. Because participants presumably 
prefer for their orders to post at the pegging price, the Exchange 
believes that participants would prefer for the Exchange to hold such 
orders until a permissible pegging price emerges, rather than post the 
orders at their limit prices.<SUP>14 15</SUP>
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    \14\ When a Pegged Order lacks a pegging price or a permissible 
pegging price, the System will not wait indefinitely for a pegging 
price or a permissible pegging price to become available. Instead, 
the System will cancel the Order if no permissible pegging price 
becomes available within one second after Order entry or after the 
Order was removed due to the lack of a permissible pegging price and 
no longer available on the Book. The Exchange may, in the exercise 
of its discretion, modify the length of this maximum time period by 
posting advance notice of the applicable new time period on its 
website.
    \15\ In this paragraph of Rule 3301B(d), the Exchange again 
proposes to state that it will continue to reject a Pegged Order 
entered through RASH or FIX when a permissible pegging price is 
unavailable, if the Pegged Order is assigned a Routing Order 
Attribute. The Exchange will continue to accept certain Market and 
Primary Pegged Orders at their limit price where they have Routing 
Order Attributes. The Exchange proposes to retain existing practice 
for Pegged Orders with Routing Order Attributes because the Exchange 
is not yet prepared to make similar changes to such Orders, although 
it contemplates doing so in the near future.
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    The Exchange proposes similar changes to the paragraph of Rule 
3301B(d) that applies to Pegged Orders entered through RASH or FIX that 
posted to the Exchange Book. The text presently provides that if the 
price to which an Order is pegged is not available, the Order will be 
rejected. The Exchange proposes instead to state that if the price to 
which an Order is pegged becomes unavailable or pegging would lead to a 
price at which the Order cannot be posted,\16\ then the Exchange will 
remove the Order from the Exchange Book and re-enter it once there is a 
permissible price. Again, the Exchange proposes this change to enhance 
and make the System more efficient by providing for the Exchange to re-
post the Pegged Orders rather than rejecting them when there is no 
permissible pegging price and requiring participants to re-enter them 
once a valid price becomes available.\17\ The Exchange notes that the 
proposed change will not apply to Pegged Orders with Routing Attributes 
assigned to them; the existing Rule functionality will continue to 
apply to those Orders.
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    \16\ An example of a scenario where pegging would lead to a 
price at which an Order cannot be posted is as follows. Assume that 
the NBBO is $0.0002 x $0.0003. A Primary Pegged Order to buy is 
entered with a passive offset amount of $0.0003. This would result 
in the Order being made unavailable by the Exchange as -$0.0001 is 
not a permissible price. Currently, the Exchange accepts such Orders 
at its limit price, and will post the Orders to the Exchange Book in 
accordance with the parameters that apply to the underlying Order 
Type.
    \17\ The Exchange proposes to apply a similar time limitation to 
the holding period prescribed above. Similarly, for an Order with 
Midpoint Pegging, if the Inside Bid and Inside Offer become crossed, 
or there is no Inside Bid or Inside Offer, the System will cancel 
the Order if no permissible price becomes available within one 
second after the Order was removed and no longer available on the 
Exchange Book (the Exchange may, in the exercise of its discretion 
modify the length of this one second time period by posting advance 
notice of the applicable time period on its website). For an Order 
with Midpoint Pegging with a Routing Attribute, the new one second 
time period will be applicable.
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    Rule 3301B(d) also subjects Pegging Orders to collars, meaning that 
any portion of a Pegging Order that would \18\ execute, either on the 
Exchange or when routed to another market center, at a price of more 
than $0.25 or 5 percent worse than the NBBO at the time when the order 
reaches the System, whichever is greater, will be cancelled. Although 
the Rule states that it applies this collar to Orders with Primary and 
Market Pegging, the Exchange has always intended for the collar to also 
apply to Orders with Midpoint Pegging, and in practice, it does so. The 
failure of the Rule to reflect the application of the collar to 
Midpoint Pegged Orders was an unintended omission. The Exchange now 
proposes to revise Rule 3301B(d) to correct this omission.
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    \18\ Additionally, the Exchange proposes to replace the word 
``would'' with ``could'' in this provision, so as to clarify that 
collars apply in circumstances in which Pegged Orders might execute, 
but do not necessarily do so. An example of a circumstance in which 
such Orders do not execute is as follows. Assume that the NBBO is 
$10.00 x $10.01. A Market Pegged Order to buy posts at $10.01. The 
NBBO then updates to $10.00 x $11.00. Because re-pricing and posting 
the Market Pegged Order would result in the Order being available on 
the Book and executable at $11.00 (outside of the collars), the 
Order will be canceled.
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Changes to the Trade Now Order Attribute
    Additionally, the Exchange proposes to amend its rules governing 
the Trade Now Attribute, at Rule 3301B(l). Pursuant to Rule 3301B(l), 
Trade Now is an Order Attribute that allows a resting Order that 
becomes locked by an incoming Displayed Order to execute against a 
locking or crossing Order as a liquidity taker. The Exchange proposes 
to amend Trade Now in several respects.
    First, the Exchange proposes to incorporate so-called ``Midpoint 
Trade Now'' functionality into the Trade Now Attribute, similar what 
Nasdaq did in a recent corresponding rule filing.\19\ This

[[Page 38149]]

functionality would allow a resting Order that becomes locked at its 
non-displayed price by an incoming Midpoint Peg Post-Only Order to 
execute against a locking or crossing Order as a liquidity taker. This 
functionality will allow market participants to have their Orders 
executed as a taker of liquidity should that Order become locked at its 
non-displayed price by a contra-side incoming Midpoint Peg Post-Only 
Order. This functionality will therefore promote an efficient and 
orderly market by allowing Orders in this scenario to execute and 
resolve a locked market. Similarly, allowing a subsequent Order to 
execute against a locking Midpoint Peg Post-Only Order if the resting 
Order that is locked by the Midpoint Peg Post-Only Order has not 
enabled the Trade Now functionality will also promote an efficient and 
orderly market by allowing the incoming Order in that scenario to 
execute and resolve an instance where Orders with a non-displayed price 
on both the buy and sell side of the market are priced equally but not 
executing against each other.
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    \19\ See Securities Exchange Act Release No. 34-92180 (June 15, 
2021), 86 FR 33420 (June 24, 2021) (SR-NASDAQ-2021-044). The 
Exchange notes that prior to SR-NASDAQ-2021-044, Midpoint Trade Now 
was a distinct Order Attribute in the Nasdaq rulebook, first 
introduced in 2018. See Securities Exchange Act Release No. 34-84621 
(November 19, 2018), 83 FR 60514 (November 26, 2018) (SR-NASDAQ-
2018-090). SR-NASDAQ-2021-044 incorporated Midpoint Trade Now into 
Trade Now.
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    Next, the Exchange proposes to amend Rule 3301B(l) by streamlining 
and simplifying the instructions that participants must enter to 
address the handling of their orders in various locking or crossing 
scenarios.\20\ Specifically, rather than require a participant to 
manually send a Trade Now instruction whenever an Order entered through 
OUCH or FLITE becomes locked, the proposed amended Rule will allow for 
a participant to enable Trade Now functionality on a port-level basis 
for all Order entry protocols and for all Order Types that support 
Trade Now, as well as on an order-by-order basis, for the Non-Displayed 
Order Type, when entered through OUCH or FLITE.\21\ For Orders entered 
through RASH or FIX, Trade Now will be available on an order-by-order 
basis for all Order Types that support Trade Now. The proposal will not 
extend Trade Now functionality to new Order Types.\22\ However, the 
Exchange notes that it proposes conforming changes to the Midpoint Peg 
Post-Only Order Type, at Rule 3301A, which already includes Trade Now, 
to accommodate the adoption of Midpoint Trade Now functionality.
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    \20\ An example of a crossing scenario is as follows. A non-
displayed Order to buy rests on the Book at $0.9995. Thereafter, a 
Post Only Order to sell is entered at $0.9994, which would post on 
the Book and display at $0.9994, thereby crossing the non-displayed 
Order as the price improvement requirements were not met.
    \21\ This proposed change in functionality for OUCH and FLITE is 
enabled by the migration of Trade Now to the Exchange's matching 
System.
    \22\ The Exchange proposes to add language to Rule 3301B(l) to 
state that Trade Now allows a resting Order that becomes locked ``or 
crossed, as applicable at its non-displayed price'' by the ``posted 
price'' of an incoming Displayed Order to execute against a locking 
or crossing Order(s) automatically. The Exchange proposes to add the 
phrase ``or crossed, as applicable,'' for completeness. It also 
proposes to add the phrases ``at its non-displayed price'' and 
``posted price'' for purposes of clarity. They merely communicate 
that the incoming Displayed Order or Midpoint Peg Post-Only Order 
first posts to the Exchange Book, thereby locking or crossing the 
resting Order at its non-displayed price.
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    The Exchange intends to implement the foregoing changes during the 
Third Quarter of 2021. The Exchange will issue an Equity Trader Alert 
at least 7 days in advance of implementing the changes.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\23\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\24\ in particular, in that it is designed to 
promote just and equitable principles of trade, to remove impediments 
to and perfect the mechanism of a free and open market and a national 
market system, and, in general to protect investors and the public 
interest.
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    \23\ 15 U.S.C. 78f(b).
    \24\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that its proposed amendments to the Pegging 
Order Attribute, at Rule 3301B(d), are consistent with the Act. The 
proposals to eliminate the functionality that provides for the System 
to reject certain Pegged Orders that lack a permissible pegging price, 
or to post the Orders at their limit price, are consistent with the Act 
because they eliminate unwarranted inefficiencies that arise when 
participants must repeatedly re-enter rejected Pegged Orders until a 
permissible price becomes available.<SUP>25 26</SUP> It is also 
consistent with the Act to maintain the existing practice in the Rule 
of rejecting a Pegged Order without a permissible pegging price where 
the Order has been assigned a Routing Attribute. The Exchange is not 
yet prepared to hold such Orders in the same way that it proposes to do 
so for Pegged Orders without Routing Attributes, although it 
contemplates doing so in the near future.
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    \25\ The Exchange notes that as part of this proposed change, if 
there is no Pegging Price upon entry for a Displayed Order that has 
Market Pegging, or an Order with a Non-Display Attribute that has 
Primary Pegging or Market Pegging, then it will no longer accept 
such Orders at their limit price. The Exchange believes that this 
proposed change is consistent with the Act because it better aligns 
with customer intentions for Pegged Orders to post at a Pegging 
Price. That is, the Exchange believes that participants prefer for 
Pegged Orders to be entered at a Pegging Price, rather than its 
entered limit price, even if that means that the Order must wait for 
a Pegging Price to become available. As discussed above, the 
Exchange does not propose this change for Pegged Orders with Routing 
Attributes.
    \26\ It is also consistent with the Act to limit the time period 
for which the Exchange will hold, without canceling, Pegged Orders 
for which there is no pegging price or permissible pegging price 
because the Exchange does not believe that customers would want the 
Exchange to hold their orders indefinitely. Moreover, holding such 
orders indefinitely would encumber the Exchange's System. The 
Exchange believes that a one second holding period for such orders 
is long enough to provide the above-stated efficiencies for 
participants, but not too long as to encumber them. However, the 
Exchange believes that it is reasonable to reserve discretion to 
alter the holding period, from time to time, should it determine 
that doing so better meets the needs of customers or its System 
resources.
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    Moreover, the proposal to amend Rule 3301B(d) to state expressly 
that Midpoint Pegging Orders are subject to price collars, like Orders 
with Primary and Market Pegging, will correct an unintended omission 
and ensure that the Rule is consistent with existing Exchange practice 
and with customer expectations. The application of these collars will 
prevent Pegged Orders from having prices that deviate too far away from 
where the security was trading when the Order was first entered.\27\
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    \27\ Additionally, the Exchange believes that it is consistent 
with the Act to replace the word ``would'' with ``could'' in this 
provision, because doing so would clarify that collars apply in 
circumstances in which Pegged Orders might execute, but do not 
necessarily do so. See supra, n.19.
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    The Exchange's proposals to amend its rules governing the Trade Now 
Attribute, at Rule 3301B(l), is consistent with the Act. First, it is 
consistent with the Act to add to Trade Now so-called ``Midpoint Trade 
Now'' functionality, which presently exists on Nasdaq. This 
functionality will allow market participants to have their Orders 
executed as a taker of liquidity should that Order become locked at its 
non-displayed price by a contra-side Midpoint Peg Post-Only Order. This 
functionality will therefore promote an efficient and orderly market by 
allowing Orders in this scenario to execute and resolve a locked 
market. Similarly, allowing a subsequent Order to execute against a 
locking Midpoint Peg Post-Only Order if the resting Order that is 
locked by the Midpoint Peg Post-Only Order has not enabled the Trade 
Now functionality will also promote an efficient and orderly market by 
allowing the incoming Order in that scenario to execute and resolve an 
instance where Orders with a non-displayed price on both the buy and 
sell side of the market

[[Page 38150]]

are priced equally but not executing against each other.
    The proposed amendments to Trade Now will also streamline and 
simplify the instructions that participants must enter to address the 
handling of their orders in various locking or crossing scenarios. 
Rather than require a participant to manually send a Trade Now 
instruction whenever an Order entered through OUCH or FLITE becomes 
locked, the proposed amended Rule will allow for a participant to 
enable Trade Now functionality on a port-level basis for all Order 
entry protocols and for all Order Types that support Trade Now, as well 
as on an order-by-order basis, for the Non-Displayed Order Type, when 
entered through OUCH and FLITE.\28\ Furthermore, it is consistent with 
the Act to add language to Rule 3301B(l) to state that Trade Now allows 
a resting Order that becomes locked ``or crossed, as applicable, at its 
non-displayed price'' by the ``posted price'' of an incoming Displayed 
Order to execute against a locking or crossing Order(s) automatically. 
The Exchange proposes to add the phrase ``or crossed, as applicable,'' 
for completeness. The Exchange also proposes to add the phrases ``at 
its non-displayed price'' and [sic] for purposes of clarity. They 
merely communicate that the incoming Displayed Order or Midpoint Peg 
Post-Only Order first posts to the Exchange Book, thereby locking or 
crossing the resting Order at its non-displayed price.
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    \28\ As noted above, for Orders entered through RASH or FIX, 
Trade Now will be available on an order-by-order basis for all Order 
Types that support Trade Now.
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    Finally, the Exchange believes that it is consistent with the Act 
to make conforming changes to the Midpoint Peg Post-Only Order Type, at 
Rule 3301A, which already includes Trade Now, to accommodate the 
adoption of Midpoint Trade Now functionality.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. As a general principle, the 
proposed changes are reflective of the significant competition among 
exchanges and non-exchange venues for order flow. In this regard, 
proposed changes that facilitate enhancements to the Exchange's System 
and order entry protocols as well as those that amend and clarify the 
Exchange's Rules regarding its Order Attributes, are pro-competitive 
because they bolster the efficiency, integrity, and overall 
attractiveness of the Exchange in an absolute sense and relative to its 
peers.
    Moreover, none of the proposed changes will unduly burden intra-
market competition among various Exchange participants. Participants 
will experience no competitive impact from its proposals to hold (up to 
one second), rather than reject (or accept at their limit price), 
Pegging Orders (other than those with Routing Attributes) in 
circumstances in which no permissible pegging price is available, as 
these proposals will merely eliminate unwarranted inefficiencies that 
ensue from the System requiring participants to repeatedly re-enter 
Pegged Orders until a price becomes available, or the System posting 
Pegged Orders at their limit prices, if there is no pegging price. 
Moreover, the proposal to amend Rule 3301B(d) to state expressly that 
Midpoint Pegging Orders are subject to price collars, like Orders with 
Primary and Market Pegging, will have no competitive impact as the 
proposal is consistent with existing Exchange practice and with 
customer expectations.
    The Exchange's proposals to amend its rules governing Trade Now 
will have no adverse competitive impact on participants. The proposed 
addition of Midpoint Trade Now functionality will expand the Exchange's 
capabilities relative to competitors, thereby rendering it a more 
attractive trading venue. Moreover, this new functionality is optional 
for participants to employ. Meanwhile, the other proposed changes to 
Rule 3301B(l) will render the Trade Now Order Attribute more efficient 
and easier for participants to utilize. The proposed conforming changes 
to the Midpoint Peg Post-Only Order Type, at Rule 3301A, will merely 
accommodate the adoption of Midpoint Trade Now functionality.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \29\ and Rule 19b-
4(f)(6) thereunder.\30\
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    \29\ 15 U.S.C. 78s(b)(3)(A).
    \30\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of the proposed rule change, at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    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 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

    <bullet> Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
    <bullet> Send an email to <a href="/cdn-cgi/l/email-protection#b0c2c5dcd59dd3dfddddd5dec4c3f0c3d5d39ed7dfc6"><span class="__cf_email__" data-cfemail="c8babda4ade5aba7a5a5ada6bcbb88bbadabe6afa7be">[email protected]</span></a>. Please include 
File Number SR-Phlx-2021-40 on the subject line.

Paper Comments

    <bullet> 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-2021-40. 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

[[Page 38151]]

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-Phlx-2021-40, and should be 
submitted on or before August 9, 2021.
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    \31\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\31\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-15186 Filed 7-16-21; 8:45 am]
BILLING CODE 8011-01-P


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