Document ID: SEC-2020-1035-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Nasdaq PHLX, LLC
Posted Date: 2020-07-02T04:00Z

[Federal Register Volume 85, Number 128 (Thursday, July 2, 2020)]
[Notices]
[Pages 39964-39966]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-14231]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-89164; File No. SR-Phlx-2020-31]

Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Modify the 
Implementation Date of the Proposed Rule Change To Amend Exchange Rules 
3301A and 3301B

June 26, 2020.
    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 June 17, 2020, 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 modify the operative date of SR-Phlx-2020-
15, which proposed to amend Exchange Rules 3301A and 3301B.

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

[[Page 39965]]

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
    On March 26, 2020, the Exchange filed with the Commission a rule 
change to amend Exchange Rule 3301A and Rule 3301B to modify the 
behavior of Order Types and Order Attributes in certain situations.\3\ 
The proposed rule change indicated that the implementation date of the 
modifications would be on or before the end of the Second Quarter of 
2020.\4\ The Exchange proposes to modify the operative date and delay 
the implementation of the modifications until on or before the end of 
the Third Quarter of 2020. The Exchange will announce the new 
implementation date by an Equity Trader Alert, which shall be issued 
prior to the implementation date.
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    \3\ See Securities Exchange Act Release No. 88583 (April 7, 
2020), 85 FR 20533 (April 13, 2020) (SR-Phlx-2020-15).
    \4\ See id. at 20540.
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    Due to the recent market volatility resulting from the novel 
coronavirus pandemic, the Exchange has been adjusting its systems 
testing schedule and assessing any risks to the operation of its 
systems that could potentially be introduced by implementing new 
functionalities during this time. The extension would therefore provide 
the Exchange with flexibility and additional time to adjust its systems 
testing schedule, and to develop and test the new functionalities, to 
safeguard against any such risk. Furthermore, the extension would allow 
the Exchange to implement the Order Type and Order Attribute 
modifications after the Russell Rebalance, a significant market event 
occurring in June 2020, and for which the Exchange will reduce the 
number of changes to its systems. The Exchange has historically limited 
rolling out new functionality before the Russell Rebalance to mitigate 
the operational risk of introducing technology changes before this 
significant market event.
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 
providing the Exchange additional time to implement SR-Phlx-2020-15. As 
discussed above, the proposed delay is in recognition of both the 
recent market volatility and upcoming annual Russell Rebalance in June 
2020. The Exchange believes that the extension would therefore allow 
the Exchange to mitigate any potential risks to the market and the 
operation of its systems by limiting the implementation of new 
functionality until after the Russell Rebalance, which, in turn, 
protects investors and the public interest.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
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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 Exchange's proposal to 
delay the implementation of SR-Phlx-2020-15 does not impose an undue 
burden on competition. Delaying the implementation will simply allow 
the Exchange additional time to properly plan and implement SR-Phlx-
2020-15.

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 \7\ and Rule 19b-
4(f)(6) thereunder.\8\
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 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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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \9\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \10\ permits the 
Commission to designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has requested that the Commission waive the 30-day operative delay. The 
Exchange states that the proposed implementation delay is in 
recognition of both the recent market volatility and upcoming annual 
Russell Rebalance in June 2020, and would allow the Exchange to 
mitigate any potential risks to the market and the operation of its 
systems by limiting the implementation of new functionality until after 
the Russell Rebalance. According to the Exchange, waiver of the 
operative delay would allow the Exchange to provide prior notice of the 
implementation delay by July 1, 2020. The Commission believes that 
waiver of the 30-day operative delay is consistent with the protection 
of investors and the public interest. Therefore, the Commission hereby 
waives the 30-day operative delay and designates the proposed rule 
change operative upon filing.\11\
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    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ 17 CFR 240.19b-4(f)(6)(iii).
    \11\ For purposes only of waiving the 30-day operative delay, 
the Commission also has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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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

     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-2020-31 on the subject line.

[[Page 39966]]

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-2020-31. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (http://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549 on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-Phlx-2020-31, and should be submitted on 
or before July 23, 2020.
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    \12\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-14231 Filed 7-1-20; 8:45 am]
BILLING CODE 8011-01-P