1544 Federal Register / Vol. 80, No. 7 / Monday, January 12, 2015 / Notices 

21 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Commission notes that the correct rule 

number for this reference is PSX Rule 3311. 

4Securities Exchange Act Release No. 69632 (May 

23, 2013), 78 FR 32501 (May 30, 2013) (SR–Phlx– 

2013–56). 

5Securities Exchange Act Release No. 70110 

(August 5, 2013), 78 FR 48736 (August 9, 2013) 

(SR–Phlx–2013–77). 

NYSEMKT–2014–108 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–NYSEMKT–2014–108. 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 Section, 100 F Street NE., 

Washington, DC 20549–1090, on official 

business days between the hours of 

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

filing will also be available for 

inspection and copying at the NYSE’s 

principal office and on its Internet Web 

site at www.nyse.com. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR– 

NYSEMKT–2014–108 and should be 

submitted on or before February 2, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–00210 Filed 1–9–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74003; File No. SR–Phlx– 

2014–79] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Modify the 

Rule Governing Modification of Orders 

on Its NASDAQ OMX PSX Facility 

(‘‘PSX’’) in the Event of an Issuer 

Corporate Action Related to a 

Dividend, Payment or Distribution 

January 6, 2015. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on December 

23, 2014, 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 the Substance 

of the Proposed Rule Change 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://

nasdaqomxphlx.cchwallstreet.com/, at 

the principal office of the Exchange, and 

at the Commission’s Public Reference 

Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

PSX Rule 4761 [sic] 3 addresses the 

treatment of quotes/orders in securities 

that are the subject of issuer corporate 

actions related to a dividend, payment 

or distribution. The rule applies to any 

trading interest that is carried on the 

PSX book overnight. As a general 

matter, PSX cancels open quotes/orders 

in the event of any corporate action 

related to a dividend, payment or 

distribution, on the ex-date of the 

action. The cancellation occurs 

immediately prior to the opening of 

trading at 8 a.m. on the ex-date of the 

corporate action, and the member 

receives a cancellation notice, so that it 

can, if it desires, reenter the order at the 

commencement of trading on the exdate. 

Prior to 2013, PSX had not had a clear 

rule providing for the adjustments of 

quotes and orders carried on the PSX 

book overnight. In April 2013, Phlx 

adopted Rule 3311 to provide that PSX 

would cancel all open quotes/orders in 

the event of any corporate action.4

Subsequently, in response to member 

demand for assistance with order 

management with respect to certain 

common types of corporate action, Phlx 

amended the rule to offer limited, 

optional functionality to allow open 

orders to be adjusted, rather than 

cancelled.5 As written, the rule provides 

for the possibility of order adjustment in 

the case of cash dividends, forward 

stock splits, and combined cash 

dividends/forward stock splits. 

The proposal will expand the rule 

also to provide for adjustment in the 

case of stock dividends and combined 

cash dividends/stock dividends. The 

proposal reflects the conclusion, based 

on member feedback, that actions 

resulting in the distribution of 

additional stock should be treated 

similarly, regardless of whether they are 

denominated as forward stock splits or 

stock dividends. Phlx will make 

members aware of the effective date of 

the proposed change by the issuance of 

a widely disseminated Equity Trader 

Alert. 

Under the current rule, a member may 

designate that all orders with a time-inVerDate Sep<11>2014 17:35 Jan 09, 2015 Jkt 235001 PO 00000 Frm 00052 Fmt 4703 Sfmt 4703 E:\FR\FM\12JAN1.SGM 12JAN1

tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 7 / Monday, January 12, 2015 / Notices 1545 

6Phlx notes that the use of good-till-cancelled 

orders is not prevalent, accounting for significantly 

less than 1% of all orders entered into PSX. The 

vast majority of orders expire by their terms at the 

end of regular market hours. 

7The member may opt for this processing on a 

port-by-port basis. Thus, the provisions providing 

for order adjustment are applied to all good-tillcancelled orders entered through a port that has 

been specified by the member for such processing. 

Because members may obtain multiple ports, 

however, members may opt to apply different 

processing to different orders based on the ports 

through which they are entered. 

8Phlx is also amending the example in the rule 

text to make it clear that the prices provided therein 

are per share prices. 

9Phlx receives notice of corporate actions from 

the listing exchange. 

10To the extent that multiple good-till-cancelled 

orders in a particular security are adjusted and reentered, such orders may not retain the same time 

priority vis-a`-vis one another that they had on the 

preceding day. Rather, because such orders are 

entered simultaneously through multiple order 

entry ports, their relative priority is a function of 

the duration of system processing associated with 

each individual order. 

11 15 U.S.C. 78f. 

12 15 U.S.C. 78f(b)(5). 

13 15 U.S.C. 78s(b)(3)(a)(ii). 

14 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

the proposed rule change at least five business days 

prior to the date of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. The Exchange has satisfied this 

requirement. 

force of good-till-cancelled 6 that are 

entered through one or more order entry 

ports specified by the member will be 

processed in the manner specified 

below.7

(1) Cash Dividend. If an issuer is 

paying a cash dividend, the price of an 

order to buy is reduced by the amount 

of the sum of all dividends payable, 

rounded up to the nearest whole cent; 

provided, however, that there will be no 

adjustment if the sum of all dividends 

is less than $0.01. For example, if the 

sum of all dividends is $0.381, the price 

of the order will be reduced by $0.39. 

An order to sell will be retained but will 

receive no price adjustment. 

(2) Forward Stock Split. If an issuer is 

implementing a forward stock split, the 

order is cancelled if its size is less than 

one round lot. If the order’s size is 

greater than one round lot, (i) the size 

of the order is multiplied by the ratio of 

post-split shares to pre-split shares, with 

the result rounded downward to the 

nearest whole share, and (ii) the price of 

the order will be multiplied by the ratio 

of pre-split shares to post-split shares, 

with the result rounded down to the 

nearest whole penny in the case of 

orders to buy and rounded up to the 

nearest whole penny in the case of 

orders to sell. 

Under the change proposed in this 

filing, stock dividends will be treated in 

the same manner as forward stock splits. 

Thus, any corporate action in which 

additional shares are issued to holders 

of outstanding shares will be treated in 

the manner described above. 

For example, if a member has entered 

a good-till-cancelled order to buy 375 

shares at $10.95 per share and the issuer 

implemented a split or dividend under 

which an additional 1.25 shares would 

be issued for each share outstanding, the 

size of the order would be adjusted to 

843 shares (375 × 2.25/1 = 843.75, 

rounded down to 843) and the price of 

the order would be adjusted to $4.86 per 

share ($10.95 per share × 1/2.25 = 

$4.8667 per share, rounded down to 

$4.86 per share). An order to sell at the 

same price and size would be adjusted 

to 843 shares with a price of $4.87 per 

share ($4.8667 per share, rounded up).8

(3) Combination of Cash Dividend and 

Forward Stock Split or Stock Dividend. 

Under the current rule, if an issuer is 

implementing a cash dividend and a 

forward stock split on the same date, the 

adjustments described above will both 

be applied, in the order described in the 

notice of the corporate actions received 

by Phlx.9 Under the proposed rule 

change, this provision is being 

expanded to cover stock dividends as 

well as forward stock splits. 

As is currently the case, changes to 

open orders will continue to be effected 

immediately prior to the opening of the 

System at 8:00 a.m. on the ex-date of the 

applicable corporate action. Open 

orders that are retained are re-entered by 

the System (as adjusted above) 

immediately prior to the opening of the 

System, such that they will retain time 

priority over new orders entered at or 

after 8:00 a.m.10 Under the proposed 

rule change, for corporate actions other 

than cash dividends, forward stock 

splits, and stock dividends (or any 

combination thereof), open orders are 

always cancelled, regardless of the port 

through which they were entered. 

2. Statutory Basis 

Phlx believes that the proposed rule 

change is consistent with the provisions 

of Section 6 of the Act,11 in general, and 

with Section 6(b)(5) of the Act 12 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. Specifically, Phlx 

believes that the change, which is 

responsive to member input, will 

facilitate transactions in securities and 

perfect the mechanism of a free and 

open market by providing members 

with additional optional functionality 

that may assist them with order 

management with respect to stock 

dividends in a manner similar to the 

current functionality with respect to 

cash dividends and forward splits. 

Because forward splits and stock 

dividends both involve the distribution 

of additional stock to current 

stockholders, providing them with 

similar treatment under the rule is 

logical and may help to prevent 

confusion on the part of members that 

expect both types of corporate events to 

receive consistent treatment. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

Phlx does not believe that the 

proposed rule change will result in any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, as amended. 

Specifically, by offering market 

participants additional options with 

regard to management of open orders, 

the change has the potential to enhance 

PSX’s competitiveness with respect to 

other trading venues, thereby promoting 

greater competition. Moreover, the 

change does not burden competition in 

that it does not restrict the ability of 

members to enter and update trading 

interest in PSX. 

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)(ii) of the Act 13 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.14

At any time within 60 days of the 

filing of the proposed rule change, the 


tkelley on DSK3SPTVN1PROD with NOTICES
1546 Federal Register / Vol. 80, No. 7 / Monday, January 12, 2015 / Notices 

15 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4Tier 1 are ETP Holders and Market Makers that 

provide liquidity an average daily volume (‘‘ADV’’) 

per month of 0.70% or more of the US consolidated 

ADV (‘‘CADV’’) or provide liquidity an average 

daily share volume per month of 0.15% or more of 

the US CADV and are affiliated with an OTP Holder 

or OTP Firm that provides an ADV of electronic 

posted executions (including all account types) in 

Penny Pilot issues on NYSE Arca Options 

(excluding mini options) of at least 100,000 

contracts, of which at least 25,000 contracts must 

be for the account of a market maker. 

5Tier 2 are ETP Holders and Market Makers that 

provide liquidity an average daily share volume per 

month of 0.30% or more, but less than 0.70% of the 

US CADV. 

6MPL Order is defined in Rule 7.31(h)(5) as a 

Passive Liquidity Order priced at the midpoint of 

the PBBO. Rule 7.31(h)(4) defines a Passive 

Liquidity Order as an order to buy or sell a stated 

amount of a security at a specified, undisplayed 

price. 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is: (i) Necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) 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– 

Phlx–2014–79 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–Phlx–2014–79. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE., 

Washington, DC 20549 on official 

business days between the hours of 

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

filing also will be available for 

inspection and copying at the principal 

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–Phlx– 

2014–79, and should be submitted on or 

before February 2, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–00220 Filed 1–9–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73992; File No. SR– 

NYSEARCA–2014–142] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Amending Its Schedule of 

Fees and Charges for Exchange 

Services To Eliminate Transaction 

Fees for Midpoint Passive Liquidity 

Orders That Remove Liquidity From 

the Exchange and That Are Designated 

as ‘‘Retail’’ but Which Are Not 

Executed in the Retail Liquidity 

Program 

January 6, 2015. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on December 

22, 2014, NYSE Arca, Inc. (the 

‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the selfregulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend its 

Schedule of Fees and Charges for 

Exchange Services (‘‘Fee Schedule’’) to 

eliminate transaction fees for Midpoint 

Passive Liquidity (‘‘MPL’’) orders that 

remove liquidity from the Exchange and 

that are designated as ‘‘retail’’ but which 

are not executed in the Retail Liquidity 

Program. The Exchange proposes to 

implement the fee change effective 

January 2, 2015. The text of the 

proposed rule change is available on the 

Exchange’s Web site at www.nyse.com, 

at the principal office of the Exchange, 

and at the Commission’s Public 

Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization 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 those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

set forth in sections A, B, and C below, 

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend its 

Fee Schedule to eliminate transaction 

fees for MPL orders that remove 

liquidity from the Exchange and that are 

designated as ‘‘retail’’ orders, but which 

are not executed in the Retail Liquidity 

Program. The Exchange proposes to 

implement the fee change effective 

January 2, 2015. 

For securities priced $1.00 or greater, 

the Exchange currently charges 

qualifying ETP Holders and Market 

Makers in Tier 1 4 and Tier 2 5 a fee of 

$0.0030 per share for MPL orders 6 in 

Tape A, B and C securities that remove 

liquidity from the NYSE Arca Book. 

Similarly, the current basic rate, which 

is applicable when tier rates do not 

apply, is $0.0030 per share for MPL 

orders in Tape A, B and C securities that 

remove liquidity from the NYSE Arca 

Book. The Exchange proposes to 

eliminate the fee for MPL orders that 


tkelley on DSK3SPTVN1PROD with NOTICES