Federal Register / Vol. 82, No. 211 / Thursday, November 2, 2017 / Notices 50921 

38 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3P.M.-settled NASDAQ–100 index options with 

standard third Friday of the month expiration dates 

(‘‘NDXPM’’) have previously been approved for 

listing on the Exchange on a pilot basis. NDXPM 

and NDX are separate option classes. See Securities 

Exchange Act Release No. 81293 (August 2, 2017), 

82 FR 37138 (August 8, 2017) (Order Granting 

Approval of a Proposed Rule Change, as Modified 

by Amendment Nos. 1 and 2, To Permit the Listing 

and Trading of P.M.-Settled NASDAQ–100 Index(R) 

Options on a Pilot Basis). The Exchange anticipates 

that it will file a proposed rule change in the near 

future to move these NDXPM index options with 

standard third Friday of the month expiration dates 

to the NDX index option class. The Exchange notes 

that the Chicago Board Options Exchange (‘‘CBOE’’) 

recently did likewise with its P.M.-settled S&P 500 

Index Options (‘‘SPXPM’’). See Securities Exchange 

Act Release No. 80060 (February 17, 2017), 82 FR 

11673 (February 24, 2017) (approving SR–CBOE– 

2016–091). 

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– 

MIAX–2017–44 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–MIAX–2017–44. 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. 

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–MIAX–2017–44 and should 

be submitted on or before November 24, 

2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.38

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–23825 Filed 11–1–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81975; File No. SR–Phlx– 

2017–79] 

Self-Regulatory Organizations; Nasdaq 

PHLX LLC; Notice of Filing of 

Proposed Rule Change, as Modified by 

Amendment No. 1, To Establish a 

Nonstandard Expirations Pilot 

Program on a Pilot Basis, for an Initial 

Period of Twelve Months From the 

Date of Approval of This Proposed 

Rule Change 

October 27, 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 October 

12, 2017 Nasdaq 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. On October 

26, 2017, the Exchange filed 

Amendment No.1 to the proposal to 

amend and replace the original filing of 

SR–Phlx–2017–79 in its entirety. The 

Commission is publishing this notice, as 

modified by Amendment No. 1, 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 [sic] a [sic] 

proposal [sic] to establish a 

Nonstandard Expirations Pilot Program 

on a pilot basis, for an initial period of 

twelve months from the date of approval 

of this proposed rule change. 

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 this rule filing is to 

permit the listing and trading, on a pilot 

basis, of p.m.-settled options on broadbased indexes with nonstandard 

expiration dates for an initial period of 

twelve months (the ‘‘Nonstandard 

Expirations Pilot Program’’ or ‘‘Pilot 

Program’’) from the date of approval of 

this proposed rule change.3 The Pilot 

Program would permit both weekly 

expirations (‘‘Weekly Expirations’’) and 

end of month (‘‘EOM’’) expirations as 

explained below. Contract terms for the 

Weekly Expirations and EOM 

expirations will be similar to those of 

the a.m. settled broad-based index 

options, except that the exercise 

settlement value will be based on the 

index value derived from the closing 

prices of component stocks. 

Weekly Expirations 

The Exchange proposes to add new 

subsection (b)(vii)(1), Weekly 

Expirations, to Rule 1101A, Terms of 

Options Contracts. Under the proposed 

new rule the Exchange would be 

permitted to open for trading Weekly 

Expirations on any broad-based index 

eligible for standard options trading to 

expire on any Monday, Wednesday, or 

Friday (other than the third Friday-ofthe-month or days that coincide with an 

EOM expiration). Weekly Expirations 

would be subject to all provisions of 

Rule 1101A and would be treated the 

same as options on the same underlying 

index that expire on the third Friday of 

the expiration month. Unlike the 

standard monthly options, however, 

Weekly Expirations would be p.m.- 

settled. New series in Weekly 


asabaliauskas on DSKBBXCHB2PROD with NOTICES
50922 Federal Register / Vol. 82, No. 211 / Thursday, November 2, 2017 / Notices 

4See Rule 1001A(d) which sets forth the 

reporting requirements for certain market indexes 

that do not have position limits, including NDX. 

The Exchange is adding Nonstandard Expirations to 

Rule 1001A(e), Aggregation, to reflect the 

aggregation requirement. The Exchange notes that 

the proposed aggregation is consistent with the 

aggregation requirements for other types of option 

series (e.g. quarterly expiring options) that are listed 

on the Exchange and which do not expires on the 

customary ‘‘third Friday’’. 

Expirations could be added up to and 

including on the expiration date for an 

expiring Weekly Expiration. 

The maximum number of expirations 

that could be listed for each Weekly 

Expiration (i.e., a Monday expiration, 

Wednesday expiration, or Friday 

expiration, as applicable) in a given 

class would be the same as the 

maximum number of expirations 

permitted for standard options on the 

same broad-based index. Weekly 

Expirations would not need to be for 

consecutive Monday, Wednesday, or 

Friday expirations as applicable. 

However, the expiration date of a nonconsecutive expiration would not be 

permitted beyond what would be 

considered the last expiration date if the 

maximum number of expirations were 

listed consecutively. Weekly 

Expirations that are first listed in a 

given class could expire up to four 

weeks from the actual listing date. If the 

last trading day of a month were a 

Monday, Wednesday, or Friday and the 

Exchange were to list EOMs and Weekly 

Expirations as applicable in a given 

class, the Exchange would list an EOM 

instead of a Weekly Expiration in the 

given class. Other expirations in the 

same class would not be counted as part 

of the maximum number of Weekly 

Expirations for a broad-based index 

class. If the Exchange were not open for 

business on a respective Monday, the 

normally Monday expiring Weekly 

Expirations would expire on the 

following business day. If the Exchange 

were not open for business on a 

respective Wednesday or Friday, the 

normally Wednesday or Friday expiring 

Weekly Expirations would expire on the 

previous business day. 

End of Month (‘‘EOM’’) Expirations 

Under the proposal, the Exchange 

could open for trading EOMs on any 

broad-based index eligible for standard 

options trading to expire on last trading 

day of the month. EOMs would be 

subject to all provisions of Rule 1101A 

and treated the same as options on the 

same underlying index that expire on 

the third Friday of the expiration 

month. However, the EOMs would be 

P.M.-settled and new series in EOMs 

could be added up to and including on 

the expiration date for an expiring EOM. 

The maximum number of expirations 

that could be listed for EOMs in a given 

class would be the same as the 

maximum number of expirations 

permitted for standard options on the 

same broad-based index. EOM 

expirations would not need to be for 

consecutive end of month expirations. 

However, the expiration date of a nonconsecutive expiration may not be 

beyond what would be considered the 

last expiration date if the maximum 

number of expirations were listed 

consecutively. EOMs that are first listed 

in a given class could expire up to four 

weeks from the actual listing date. Other 

expirations would not be counted as 

part of the maximum numbers of EOM 

expirations for a broad-based index 

class. 

Contract Terms Trading Rules 

Weekly Expirations and EOMs would 

be subject to the same rules that 

currently govern the trading of standard 

monthly broad-based index options, 

including sales practice rules, margin 

requirements, and floor trading 

procedures. Contract terms for Weekly 

Expirations and EOMs would be the 

same as those for standard monthly 

broad-based index options. Since 

Weekly Expirations and EOMs will be a 

new type of series, and not a new class, 

the Exchange proposes that Weekly 

Expirations and EOMs shall be 

aggregated for any applicable reporting 

and other requirements.4 Pursuant to 

new subsection (b)(vii)(4) of Rule 

1101A, transactions in Weekly 

Expirations and EOMs could be effected 

on the Exchange between the hours of 

9:30 a.m. (Eastern Time) and 4:15 p.m. 

(Eastern Time). 

The Exchange has analyzed its 

capacity and represents that it believes 

the Exchange and the Options Price 

Reporting Authority (‘‘OPRA’’) have the 

necessary systems capacity to handle 

any additional traffic associated with 

the listing of the maximum number 

nonstandard expirations permitted 

under the Pilot. 

Pilot Program 

As stated above, this proposal is to 

establish a Nonstandard Expirations 

Pilot Program for broad-based index 

options on a pilot basis, for an initial 

period of twelve months from the date 

of approval of this proposed rule 

change. If the Exchange were to propose 

an extension of the Pilot or should the 

Exchange propose to make the Pilot 

permanent, the Exchange would submit 

a filing proposing such amendments to 

the Pilot. 

Further, any positions established 

under the Pilot would not be impacted 

by the expiration of the Pilot. For 

example, if the Exchange lists a Weekly 

Expiration or EOM that expires after the 

Pilot expires (and is not extended) then 

those positions would continue to exist. 

However, any further trading in those 

series would be restricted to 

transactions where at least one side of 

the trade is a closing transaction. 

As part of the Pilot, the Exchange will 

submit a Pilot report to the Commission 

at least two months prior to the 

expiration date of the Pilot (the ‘‘annual 

report’’). The annual report will contain 

an analysis of volume, open interest and 

trading patterns. In addition, for series 

that exceed certain minimum open 

interest parameters, the annual report 

will provide analysis of index price 

volatility and, if needed, share trading 

activity. The annual report will be 

provided to the Commission on a 

confidential basis. 

Analysis of Volume and Open Interest 

For all Weekly Expirations and EOM 

series, the annual report will contain the 

following volume and open interest data 

for each broad-based index overlying 

Weekly Expiration and EOM options: 

(1) Monthly volume aggregated for all 

Weekly Expiration and EOM series, 

(2) Volume in Weekly Expiration and 

EOM series aggregated by expiration 

date, 

(3) Month-end open interest 

aggregated for all Weekly Expiration and 

EOM series, 

(4) Month-end open interest for EOM 

series aggregated by expiration date and 

open interest for Weekly Expiration 

series aggregated by expiration date, 

(5) Ratio of monthly aggregate volume 

in Weekly Expiration and EOM series to 

total monthly class volume, and 

(6) Ratio of month-end open interest 

in EOM series to total month-end class 

open interest and ratio of open interest 

in each Weekly Expiration series to total 

class open interest. 

In addition, the annual report will 

contain the information noted above for 

standard Expiration Friday, AM-settled 

series, if applicable, for the period 

covered in the pilot report as well as for 

the six-month period prior to the 

initiation of the pilot. 

Upon request by the SEC, the 

Exchange will provide a data file 

containing: (1) Weekly Expiration and 

EOM option volume data aggregated by 

series, and (2) Weekly Expiration open 

interest for each expiring series and 

EOM month-end open interest for 

expiring series. 


asabaliauskas on DSKBBXCHB2PROD with NOTICES
Federal Register / Vol. 82, No. 211 / Thursday, November 2, 2017 / Notices 50923 

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

6 15 U.S.C. 78f(b)(5). 

Monthly Analysis of Weekly Expiration 

and EOM Trading Patterns 

In the annual report, the Exchange 

also proposes to identify Weekly 

Expiration and EOM trading patterns by 

undertaking a time series analysis of 

open interest in Weekly Expiration and 

EOM series aggregated by expiration 

date compared to open interest in nearterm standard Expiration Friday A.M.- 

settled series in order to determine 

whether users are shifting positions 

from standard series to Weekly 

Expiration and EOM series. Declining 

open interest in standard series 

accompanied by rising open interest in 

Weekly Expiration and EOM series 

would suggest that users are shifting 

positions. 

Provisional Analysis of Index Price 

Volatility and Share Trading Activity 

For each Weekly Expiration and EOM 

expiration that has open interest that 

exceeds certain minimum thresholds, 

the annual report will contain the 

following analysis related to index price 

changes and, if needed, underlying 

share trading volume at the close on 

expiration dates: 

(1) a comparison of index price 

changes at the close of trading on a 

given expiration date with comparable 

price changes from a control sample. 

The data will include a calculation of 

percentage price changes for various 

time intervals and compare that 

information to the respective control 

sample. Raw percentage price change 

data as well as percentage price change 

data normalized for prevailing market 

volatility, as measured by an 

appropriate index agreed by the 

Commission and the Exchange, will be 

provided; and 

(2) if needed, a calculation of share 

volume for a sample set of the 

component securities representing an 

upper limit on share trading that could 

be attributable to expiring in-the-money 

Weekly Expiration and EOM 

expirations. The data, if needed, will 

include a comparison of the calculated 

share volume for securities in the 

sample set to the average daily trading 

volumes of those securities over a 

sample period. 

The minimum open interest 

parameters, control sample, time 

intervals, method for selecting the 

component securities, and sample 

periods will be determined by the 

Exchange and the Commission. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,5 in general, and furthers the 

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

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, by 

expanding the ability of investors to 

hedge risks against market movements 

stemming from economic releases or 

market events that occur during the 

month and at the end of the month. 

Accordingly, the Exchange believes that 

weekly expirations and EOMs should 

create greater trading and hedging 

opportunities and flexibility, and 

provide customers with the ability to 

more closely tailor their investment 

objectives. 

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. Specifically, 

the Exchange does not believe the 

proposal will impose any burden on 

intramarket competition as all market 

participants will be treated in the same 

manner with respect to Weekly 

Expirations and EOMs. Additionally, 

the Exchange does not believe the 

proposal will impose any burden on 

intermarket competition as market 

participants are welcome to become 

members and trade at Phlx if they 

determine that this proposed rule 

change has made Phlx more attractive or 

favorable. Finally, all options exchanges 

are free to compete by listing and 

trading their own broad-based index 

options with weekly or end of month 

expirations. 

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, as modified by Amendment 

No.1, is consistent with the Act. In 

particular, the Commission solicits 

comment on the following: 

• Will the pilot data contemplated in 

this notice allow the Commission to 

determine whether the weekly and 

monthly PM-settled options proposed in 

this filing have adverse effects on 

market volatility and the operation of 

fair and orderly markets in the 

underlying cash market? 

• Will the pilot data contemplated in 

this notice allow the Commission to 

determine whether the weekly and 

monthly PM-settled options proposed in 

this filing have adverse effects on 

liquidity, volume, open interest, trading 

patterns, and volatility in other option 

contracts with standard expirations? 

• Will the pilot data contemplated in 

this notice allow the Commission to 

determine whether the weekly and 

monthly PM-settled options proposed in 

this filing have adverse effects on index 

price volatility? 

• Will the weekly and monthly PMsettled options proposed in this filing 

affect the market for options contracts 

with nonstandard expirations offered by 

CBOE? If so, how? In addition, how 

would this proposal affect the data and 

information related to nonstandard 

expirations that are provided by CBOE? 

• What concerns do market 

participants have related to the 

proposed Nonstandard Expirations Pilot 

Program? If any, please be specific in 

describing your concerns. If any, will 

the pilot data contemplated in this 

notice allow the Commission to 

examine whether the concerns are 

valid? 

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–2017–79 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 


asabaliauskas on DSKBBXCHB2PROD with NOTICES
50924 Federal Register / Vol. 82, No. 211 / Thursday, November 2, 2017 / Notices 

7 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Today, this feature is offered to Members. MRX 

transitioned from its legacy trading system to INET, 

the current technology, in 2017. While MRX offered 

this feature on its legacy system, the feature was not 

codified in the MRX Rulebook. At this time, the 

Exchange is codifying the Kill Switch feature to 

reflect the functionality. 

4Members are able to send a message to the 

Exchange to initiate the Kill Switch or they may 

contact the Exchange directly. A message to remove 

orders may be sent through FIX, OTTO or Precise. 

5Opening Sweep Orders will also be cancelled. 

Consistent with current auction functionality, PIM 

auction orders and responses will not be cancelled. 

See MRX Rule 723. Other auctions orders and 

responses would cancel. Quotes are unaffected. 

6The Member must directly and verbally contact 

the Exchange to request the re-set. 

7 15 U.S.C. 78f(b). 

8 15 U.S.C. 78f(b)(5). 

Commission, 100 F Street NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–Phlx–2017–79. 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 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–2017–79, and should 

be submitted on or before November 24, 

2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–23831 Filed 11–1–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81969; File No. SR–MRX– 

2017–23] 

Self-Regulatory Organizations; Nasdaq 

MRX, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Relating to an Optional 

Kill Switch Protection 

October 27, 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 October 

18, 2017, Nasdaq MRX, LLC (‘‘MRX’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

The Exchange proposes to 

memorialize an optional Kill Switch 

protection.3 The Kill Switch allows 

Members to cancel open orders and 

prevent new order submission. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at www.ise.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 

The Exchange proposes to 

memorialize its Kill Switch risk 

protection which is applicable to all 

Members at MRX Rule 711(d). The Kill 

Switch allows Members to cancel open 

orders and prevent new order 

submission. This feature provides 

Members with a powerful risk 

management tool for immediate control 

of their order activity. 

The Kill Switch is an optional tool 

that enables Members to initiate a 

message(s) 4 [sic] to the trading system 

(‘‘System’’) to promptly cancel orders 

and restrict entry of new orders until reentry has been enabled. Members may 

submit a request to the System to cancel 

orders for that Member. Members may 

not remove orders by symbol using the 

Kill Switch. The System will send an 

automated message to the Member when 

a Kill Switch request has been 

processed by the Exchange’s System.5

The Member must send a message to 

the Exchange to request the cancellation 

of all orders for the Member. The 

Member is unable to enter additional 

orders until re-entry has been enabled 

pursuant to subsection (d)(2) of Rule 

711. 

Proposed subsection (d)(2) stipulates 

that after orders are cancelled by the 

Member utilizing the Kill Switch, the 

Member is unable to enter additional 

orders until the Member has made a 

request to the Exchange and Exchange 

staff has set a re-entry indicator to 

enable re-entry.6 Once enabled for reentry, the System will send a Re-entry 

Notification Message to the Member. 

The applicable Clearing Member for that 

Member also is notified of the re-entry 

into the System after orders are 

cancelled as a result of the Kill Switch, 

provided the Clearing Member has 

requested to receive such notification. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 7 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 8

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, by 

memorializing a risk protection 

available to Exchange Members. This 

risk feature promotes policy goals of the 

Commission which has encouraged 

execution venues, exchange and nonexchange alike, to offer risk protection 

tools and other mechanisms to decrease 

risk and increase stability. The 


asabaliauskas on DSKBBXCHB2PROD with NOTICES