47254 Federal Register / Vol. 82, No. 195 / Wednesday, October 11, 2017 / Notices 

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

2 17 CFR 240.19b–4. 

3The Plan for the Purpose of Developing and 

Implementing Procedures Designed to Facilitate the 

Listing and Trading of Standardized Options 

Submitted Pursuant to Section 11a(2)(3)(B) of the 

Securities Exchange Act of 1934 (a/k/a the Options 

Listing Procedures Plan (‘‘OLPP’’)) is a national 

market system plan that, among other things, set 

forth procedures governing the listing of new 

options series. See Securities Exchange Act Release 

No. 44521 (July 6, 2001), 66 FR 36809 (July 13, 

2001) (Order approving OLPP). The sponsors of 

OLPP include Phlx; OCC; BATS Exchange, Inc.; 

BOX Options Exchange LLC; C2 Options Exchange, 

Incorporated; Chicago Board Options Exchange, 

Incorporated; EDGX Exchange, Inc; Miami 

International Securities Exchange, LLC; MIAX 

PEARL LLC; The NASDAQ Stock Market LLC; 

NASDAQ BX, Inc.; Nasdaq GEMX, LLC; Nasdaq 

ISE, LLC; Nasdaq MRX, LLC; NYSE American, LLC; 

and NYSE Arca, Inc. 

4See OLPP at page 3. 

OFFICE OF PERSONNEL 

MANAGEMENT 

Senior Executive Service-Performance 

Review Board 

AGENCY: Office of Personnel 

Management. 

ACTION: Notice. 

SUMMARY: Notice is hereby given of the 

appointment of members of the OPM 

Performance Review Board. 

FOR FURTHER INFORMATION CONTACT: 

Carmen Garcia, Employee Services— 

OPM Human Resources, Office of 

Personnel Management, 1900 E Street 

NW., Washington, DC 20415, (202) 606– 

1048. 

SUPPLEMENTARY INFORMATION: Section 

4314(c) (1) through (5) of Title 5, U.S.C., 

requires each agency to establish, in 

accordance with regulations prescribed 

by the Office of Personnel Management, 

one or more SES performance review 

boards. The board reviews and evaluates 

the initial appraisal of a senior 

executive’s performance by the 

supervisor, and considers 

recommendations to the appointing 

authority regarding the performance of 

the senior executive. 

Office of Personnel Management. 

Kathleen M. McGettigan, 

Acting Director. 

The following have been designated 

as members of the Performance Review 

Board of the U.S. Office of Personnel 

Management: 

Mark Reinhold, Associate Director for 

Employee Services and Chief Human 

Capital Officer 

Jason Simmons, Chief of Staff 

Dennis Coleman, Chief Financial Officer 

Charles Phalen, National Background 

Investigations Bureau Director 

Kenneth Zawodny, Associate Director for 

Retirement Services 

Mark Lambert, Associate Director for Merit, 

Systems, Accountability, and Compliance 

Joseph Kennedy, Associate Director for 

Human Resources Solutions 

Andrea Bright, Deputy Chief Human Capital 

Officer—Executive Secretariat 

[FR Doc. 2017–21923 Filed 10–10–17; 8:45 am] 

BILLING CODE 6325–45–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81814; File No. SR–Phlx– 

2017–75] 

Self-Regulatory Organizations; 

NASDAQ PHLX LLC; Notice of Filing of 

Proposed Rule Change To Amend Rule 

1009 To Modify the Criteria for Listing 

an Option on an Underlying Covered 

Security 

October 4, 2017. 

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 

September 27, 2017, NASDAQ PHLX 

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

the Securities and Exchange 

Commission (‘‘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 

The Exchange proposes to amend 

Commentary .01 to Rule 1009 to modify 

the criteria for listing an option on an 

underlying covered security. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://nasdaqphlx.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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of the proposed rule 

change is to amend Commentary .01 to 

Rule 1009 to modify the criteria for 

listing options on an underlying 

security as defined in Section 

18(b)(1)(A) of the Securities Act of 1933 

(hereinafter ‘‘covered security’’ or 

‘‘covered securities’’). In particular, the 

Exchange proposes to modify Rule 1009, 

Commentary .01(4)(i) to permit the 

listing of an option on an underlying 

covered security that has a market price 

of at least $3.00 per share for the 

previous three consecutive business 

days preceding the date on which the 

Exchange submits a certificate to the 

Options Clearing Corporation (‘‘OCC’’) 

for listing and trading. The Exchange 

does not intend to amend any other 

criteria for listing options on an 

underlying security in Rule 1009 and 

accompanying Commentary. 

Currently the underlying covered 

security must have a closing market 

price of $3.00 per share for the previous 

five consecutive business days 

preceding the date on which the 

Exchange submits a listing certificate to 

OCC. In the proposed amendment, the 

market price will still be measured by 

the closing price reported in the primary 

market in which the underlying covered 

security is traded, but the measurement 

will be the price over the prior three 

consecutive business day period 

preceding the submission of the listing 

certificate to OCC, instead of the prior 

five business day period. 

The Exchange acknowledges that the 

Options Listing Procedures Plan 3

requires that the listing certificate be 

provided to OCC no earlier than 12:01 

a.m. and no later than 11:00 a.m. 

(Chicago time) on the trading day prior 

to the day on which trading is to begin.4


asabaliauskas on DSKBBXCHB2PROD with NOTICES
Federal Register / Vol. 82, No. 195 / Wednesday, October 11, 2017 / Notices 47255 

5See Securities Exchange Act Release No. 47794 

(May 5, 2003), 68 FR 25076 (May 9, 2003) (SR– 

Phlx–2003–27). 

6Such surveillance procedures generally focus on 

detecting securities trading subject to opening price 

manipulation, closing price manipulation, layering, 

spoofing or other unlawful activity impacting an 

underlying security, the option, or both. As it 

relates to IPOs, the Exchange has price movement 

alerts, unusual market activity and order book alerts 

active for all trading symbols. These real-time 

patterns are active for the new security as soon as 

the IPO begins trading. The Nasdaq MarketWatch 

group, which provides such real-time surveillance 

on the Exchange and its affiliated markets, monitors 

trading activity in IPOs to see whether the new 

issue moves substantially above or below the public 

offering price in the first day or several days of 

trading. 

7There were over 750 IPO-related issues on 

Nasdaq within the past five years. Out of all of the 

issues with pricing information, there was only one 

issue that had a price below $3 during the first five 

consecutive business days. The Exchange notes, 

however, that Nasdaq allows for companies to list 

on the Nasdaq Capital Market at $2.00 or $3.00 per 

share in some instances, which was the case for this 

particular issue. See Nasdaq Rule 5500 Series for 

initial listing standards on the Nasdaq Capital 

Market. 

8The number of shareholders of record can be 

verified from large clearing agencies such as The 

Depository Trust and Clearing Corporation 

(‘‘DTCC’’) upon the settlement date (i.e., T+2). 

9See Securities Exchange Act Release No. 78962 

(September 28, 2016), 81 FR 69240 (October 5, 

2016) (Amendment to Securities Transaction 

Settlement Cycle) (File No. S7–22–16). 

10See Exchange Rule 1009(b). The Board 

established specific criteria to consider by the 

Exchange in evaluating potential underlying 

securities for Exchange Option Transactions in its 

Commentary to Exchange Rule 1009. 

11 Id. 

12See Exchange Rule 1009, Commentary .01(5). 

13See Exchange Rule 1009, Commentary .02(d). 

14See Exchange Rule 1009, Commentary .02(e). 

15See Exchange Rule 1009, Commentary .02(c). 

16 15 U.S.C. 78f(b). 

17 15 U.S.C. 78f(b)(5). 

The proposed amendment will still 

comport with that requirement. For 

example, if an initial public offering 

(‘‘IPO’’) occurs at 11 a.m. on Monday, 

the earliest date the Exchange could 

submit its listing certificate to OCC 

would be on Thursday by 12:01 a.m. 

(Chicago time), with the market price 

determined by the closing price over the 

three-day period from Monday through 

Wednesday. The option on the IPO 

would then be eligible for trading on the 

Exchange on Friday. The proposed 

amendment would essentially enable 

options trading within four business 

days of an IPO becoming available 

instead of six business days (five 

consecutive days plus the day the listing 

certificate is submitted to OCC). 

At the time the Exchange adopted the 

‘‘look back’’ period of five consecutive 

business days, it determined that the 

five-day period was sufficient to protect 

against attempts to manipulate the 

market price of the underlying security 

and would provide a reliable test for 

stability.5 Surveillance technologies and 

procedures concerning manipulation 

have evolved since then to provide 

adequate prevention or detection of rule 

or securities law violations within the 

proposed time frame, and the Exchange 

represents that its existing trading 

surveillances are adequate to monitor 

the trading in the underlying security 

and subsequent trading of options on 

the Exchange.6

Furthermore, The NASDAQ Stock 

Market (‘‘Nasdaq’’), the Exchange’s 

affiliated listing market, had no cases 

within the past five years where an IPOrelated issue for which it had pricing 

information qualified for the $3.00 price 

requirement during the first three days 

of trading and did not qualify for the 

$3.00 price requirement during the first 

five days.7 In other words, none of these 

qualifying issues fell below the $3.00 

threshold within the first three or five 

days of trading. As such, the Exchange 

believes that its existing surveillance 

technologies and procedures, coupled 

with its findings related to the IPOrelated issues on Nasdaq as described 

herein, adequately address potential 

concerns regarding possible 

manipulation or price stability within 

the proposed timeframe. 

The Exchange also believes that the 

proposed look back period can be 

implemented in connection with the 

other initial listing criteria for 

underlying covered securities. In 

particular, the Exchange recognizes that 

it may be difficult to verify the number 

of shareholders in the days immediately 

following an IPO due to the fact that 

stock trades generally clear within two 

business days (T+2) of their trade date 

and therefore the shareholder count will 

generally not be known until T+2.8 The 

Exchange notes that the current T+2 

settlement cycle was recently reduced 

from T+3 on September 5, 2017 in 

connection with the Commission’s 

amendments to Exchange Rule 15c6– 

1(a) to adopt the shortened settlement 

cycle,9 and the look back period of three 

consecutive business days proposed 

herein reflects this shortened T+2 

settlement period. As proposed, stock 

trades would clear within T+2 of their 

trade date (i.e., within three business 

days) and therefore the number of 

shareholders could be verified within 

three business days, thereby enabling 

options trading within four business 

days of an IPO (three consecutive 

business days plus the day the listing 

certificate is submitted to OCC). 

Furthermore, the Exchange notes that 

it can verify the shareholder count with 

various brokerage firms that have a large 

retail customer clientele. Such firms can 

confirm the number of individual 

customers who have a position in the 

new issue. The earliest that these firms 

can provide confirmation is usually the 

day after the first day of trading (T+1) 

on an unsettled basis, while others can 

confirm on the third day of trading 

(T+2). The Exchange has confirmed 

with some of these brokerage firms who 

provide shareholder numbers to the 

Exchange that they are able to provide 

these numbers within T+2 after an IPO. 

For the foregoing reasons, the Exchange 

believes that basing the proposed three 

business day look back period on the 

T+2 settlement cycle would allow for 

sufficient verification of the number of 

shareholders. 

The proposed rule change will apply 

to all covered securities that meet the 

criteria of Rule 1009. Pursuant to Rule 

1009, the Exchange’s Board of Directors 

(the ‘‘Board’’) establishes guidelines to 

be considered by the Exchange in 

evaluating the potential underlying 

securities for Exchange option 

transactions.10 However, the fact that a 

particular security may meet the 

guidelines established by the Board 

does not necessarily mean that it will be 

approved as an underlying security.11

As part of the established criteria, the 

issuer must be in compliance with any 

applicable requirement of the Securities 

Exchange Act of 1934.12 Additionally, 

in considering the underlying security, 

the Exchange relies on information 

made publicly available by the issuer 

and/or the markets in which the 

security is traded.13 Also, in 

determining whether to list an option 

that otherwise meets the objective 

listing criteria, the Chairman of the 

Board or his designee may consider, 

inter alia, the name recognition of the 

option or underlying security.14 Even if 

the proposed option meets the objective 

criteria, the Chairman of the Board or 

his designee may decide not to list, or 

place limitations or conditions upon 

listing.15 The Exchange believes that 

these measures, together with its 

existing surveillance procedures, 

provide adequate safeguards in the 

review of any covered security that may 

meet the proposed criteria for 

consideration of the option within the 

timeframe contained in this proposal. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,16 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,17

in particular, in that it is designed to 

promote just and equitable principles of 

trade, to remove impediments to and 


asabaliauskas on DSKBBXCHB2PROD with NOTICES
47256 Federal Register / Vol. 82, No. 195 / Wednesday, October 11, 2017 / Notices 

18See notes 10–15 above. 

19This proposed rule change does not alter any 

obligations of issuers or other investors of an IPO 

that may be subject to a lock-up or other restrictions 

on trading related securities. 20 17 CFR 200.30–3(a)(12). 

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 Exchange believes that the 

proposed changes to its listing standards 

for covered securities would allow the 

Exchange to more quickly list options 

on a qualifying covered security that has 

met the $3.00 eligibility price without 

sacrificing investor protection. As 

discussed above, the Exchange believes 

that its existing trading surveillances 

provide a sufficient measure of 

protection against potential price 

manipulation within the proposed three 

consecutive business day timeframe. 

The Exchange also believes that the 

proposed three consecutive business 

day timeframe would continue to be a 

reliable test for price stability in light of 

its findings that none of the IPO-related 

issues on Nasdaq within the past five 

years that qualified for the $3.00 per 

share price standard during the first 

three trading days fell below the $3.00 

threshold during the fourth or fifth 

trading day. Furthermore, the 

established guidelines to be considered 

by the Exchange in evaluating the 

potential underlying securities for 

Exchange option transactions,18 together 

with existing trading surveillances, 

provide adequate safeguards in the 

review of any covered security that may 

meet the proposed criteria for 

consideration of the option within the 

proposed timeframe. 

In addition, the Exchange believes 

that basing the proposed timeframe on 

the T+2 settlement cycle adequately 

addresses the potential difficulties in 

confirming the number of shareholders 

of the underlying covered security. 

Having some of the largest brokerage 

firms that provide these shareholder 

counts to the Exchange confirm that 

they are able to provide these numbers 

within T+2 further demonstrates that 

the 2,000 shareholder requirement can 

be sufficiently verified within the 

proposed timeframe. For the foregoing 

reasons, the Exchange believes that the 

proposed amendments will remove and 

perfect the mechanism of a free and 

open market and a national market 

system by providing an avenue for 

investors to swiftly hedge their 

investment in the stock in a shorter 

amount of time than what is currently 

in place.19

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. The 

proposed rule change reduces the 

number of days to list options on an 

underlying security, and is intended to 

bring new options listings to the 

marketplace quicker. 

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 

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–2017–75 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–2017–75. 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 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–Phlx– 

2017–75, and should be submitted on or 

before November 1, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–21812 Filed 10–10–17; 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 15c2–7, SEC File No. 270–420, OMB 

Control No. 3235–0479 

Notice is hereby given that pursuant 

to the Paperwork Reduction Act of 1995 

(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the 

Securities and Exchange Commission 

(‘‘Commission’’) is soliciting comments 

on the existing collection of information 

provided for in Rule 15c2–7 (17 CFR 

240.15c2–7) under the Securities 

Exchange Act of 1934 (15 U.S.C. 78a et 

seq.). The Commission plans to submit 

this existing collection of information to 

the Office of Management and Budget 

(‘‘OMB’’) for extension and approval. 


asabaliauskas on DSKBBXCHB2PROD with NOTICES