Document ID: SEC-2014-0985-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX PHLX LLC
Posted Date: 2014-06-13T04:00Z

[Federal Register Volume 79, Number 114 (Friday, June 13, 2014)]
[Notices]
[Pages 33977-33981]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-13823]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72351; File No. SR-Phlx-2014-39]

Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change to Rule 
1080.08

June 9, 2014.
    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 3, 2014, NASDAQ OMX 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.

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[[Page 33978]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Rule 1080.08 as follows: (1) To 
exclude the existence of any contingencies from the broadcast message; 
(2) to address the priority of orders/COLA Sweeps executing after a 
COLA; and (3) to add reference to specific order types and 
contingencies applicable to Complex Orders.
    The text of the proposed rule change is below; proposed new 
language is italicized; proposed deletions are in brackets.

* * * * *
    Rule 1080. Phlx XL and Phlx XL II
    (a)-(p) No change.
     Commentary: ------------
    .01-.07 No change.
    .08 Complex Orders on Phlx XL.
    (a) No change.
    (b) Complex orders may be entered in increments of $0.01 with 
certain ``time in force'' designations and as certain order types 
with certain contingencies as follows:
    (i)-(iv) No change.
    (v) Complex Orders may be submitted as:
    All-or-none orders--to be executed in its entirety or not at 
all. These orders can only be submitted for non-broker-dealer 
customers.
    Cancel-replacement orders--require the immediate cancellation of 
a previously received order prior to the replacement of a new order 
with new terms and conditions. If the previously placed order is 
already filled partially or in its entirety the replacement order is 
automatically canceled or reduced by such number.
    Limit orders--to be executed at a specified price or better.
    Market orders--to be executed at the best price available at the 
time of execution.
    (c)-(d) No change.
    (e) Process for Complex Order Live Auction (``COLA''). Complex 
Orders on the Complex Order Book (``CBOOK,'' as defined below) may 
be subject to an automated auction process.
    (i) No change.
    (ii) Initiation of a COLA. Upon the identification of the COLA-
eligible order by the Phlx XL system, the Exchange will send a 
broadcast message to Phlx XL participants indicating that a COLA has 
been initiated. The broadcast message will identify the Complex 
Order Strategy, and the size, side and price of the COLA-eligible 
order [and any contingencies, if applicable (such as, without 
limitation, All-Or-None)].
    (iii) COLA Timer. The COLA will begin with a timing mechanism (a 
``COLA Timer''), which is a counting period not to exceed five (5) 
seconds during which Phlx XL participants may submit bids or offers 
that improve the cPBBO. The COLA Timer will be set for the same 
number of seconds for all options trading on the Exchange as 
determined by the Exchange and communicated to membership on the 
Exchange's Web site. Complex Orders may be cancelled at any time 
prior to the commencement of a COLA.
    (iv) Bidding and Offering in Response to a COLA. Phlx XL 
participants may bid and/or offer on either or both side(s) of the 
market during the COLA Timer by submitting one or more bids or 
offers that improve the cPBBO, known as a ``COLA Sweep.''
    (A)-(D) No change.
    (v) No change.
    (vi) Allocation and Priority. As stated above, COLA-eligible 
orders, COLA Sweeps, and responsive Complex Orders will trade first 
based on the best price or prices available at the end of the COLA 
Timer.
    (A) (1)-(3) No change.
    (B) If multiple customer Complex Orders, COLA Sweeps, Phlx XL 
participant Complex Orders and/or non-customer off-floor broker-
dealer Complex Orders are eligible for execution against the COLA-
eligible order at the same price, the trade will be allocated among 
participants submitting electronic Complex Orders and COLA Sweeps as 
set forth below. Executions in the COLA will comply with the 
requirements of Exchange Rule 1080.08(c)(iii) above. For allocation 
purposes, the size of a COLA Sweep or responsive Complex Order 
received during the COLA Timer shall be limited to the size of the 
COLA-eligible order.
    (1) First, to customer marketable Complex Orders on the CBOOK 
(as defined below) in the order in which they were received;
    (2) Second, to COLA Sweeps [on a size pro-rata basis;
    (3) Third, to] and SQTs, RSQTs, and non-SQT ROTs who have 
submitted Complex Orders that are marketable against the COLA-
eligible order, on a size pro-rata basis; and
    [(4) Fourth](3) Third, to non-market maker off-floor broker-
dealers on a size pro-rata basis.
    (C)-(D) No change.
    (vii)-(ix) No change.
    (f)-(i) No change.
* * * * *

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 purpose of the proposal is to correct the rule text to provide 
clarity to Phlx Participants regarding the trading of Complex Orders on 
the Exchange. The Exchange's Complex Order System, which is governed by 
Rule 1080.08, includes the Complex Order Live Auction (``COLA''), an 
automated auction for seeking additional liquidity and price 
improvement for Complex Orders. When the Exchange receives a COLA-
eligible order that triggers a COLA, the system broadcasts information 
about the COLA-eligible order--the ``COLA Message.'' The duration of 
the COLA is fixed and measured by a COLA Timer. During the COLA Timer, 
the rule provides that Phlx XL participants \3\ may submit ``COLA 
Sweeps,'' which are bids and/or offers on either or both side(s) of the 
market by submitting one or more bids or offers that improve the 
cPBBO.\4\ Also during the COLA Timer, Phlx members may enter other 
Complex Orders at any price. While COLA Sweeps are submitted in direct 
response to a COLA-eligible order, Complex Orders may or may not be 
submitted in direct response to a COLA-eligible order.
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    \3\ COLA Sweeps can only be entered by Phlx XL Participants who 
quote electronically as market makers for their own account 
(Streaming Quote Traders (``SQTs''), Remote Streaming Quote Traders 
(``RSQTs'') and specialists). Because non-SQT ROTs do not quote 
electronically, they cannot enter COLA Sweeps, which are electronic. 
See Rule 1014(b)(ii)(C) and Rule 1080.08(e)(ix).
    \4\ The cPBBO is the best net debit or credit price for a 
Complex Order based on the PBBO for the individual options 
components of such Complex Order, and, where the underlying security 
is a component of the Complex Order, the National Best Bid and/or 
Offer for the underlying security. See Rule 1080.08(a)(iv).
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COLA Message
    Currently, upon the identification of the COLA-eligible order by 
the Phlx XL system, the Exchange will broadcast a COLA Message to Phlx 
XL participants indicating that a COLA has been initiated. The COLA 
Message identifies the Complex Order Strategy, the size, side and price 
of the COLA-eligible order.\5\ The COLA Message is sent over TOPO Plus 
Orders,\6\ the Exchange's market data feed for subscribers interested 
in the detailed information it offers, including messages relating to 
Complex Orders. The Specialized Quote Feed (``SQF'') also contains COLA 
Messages.\7\ Like auction messages on multiple exchanges, the COLA 
Message

[[Page 33979]]

is designed to attract responsive interest.
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    \5\ The Exchange recently added the price and side of the market 
to the COLA Message. See Securities Exchange Act Release No. 70271 
(August 27, 2013), 78 FR 54340 (September 3, 2013) (SR-Phlx-2013-
88).
    \6\ Securities Exchange Act Release No. 60877 (October 26, 
2009), 74 FR 56255 (October 30, 2009) (SR-Phlx-2009-92).
    \7\ Securities Exchange Act Release No. 63034 (October 2, 2010), 
75 FR 62441 (October 8, 2010) (SR-Phlx-2010-124).
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    The Exchange now proposes to delete reference in the rule text to 
the contingencies that an order might have. Testing has recently 
revealed that the rule text is inaccurate; contingencies are not 
included in the COLA Message.\8\ Two contingencies apply to Complex 
Orders: all-or-none and cancel-replace. An all-or-none order is a 
contingency order that is a market or limit order which is to be 
executed in its entirety or not at all.\9\ An all-or-none order can 
execute against multiple orders, as long as it is executed in full. 
All-or-none Complex Orders can only be submitted for non-broker-dealer 
customers, the same as for non-Complex Orders.\10\ A cancel-replacement 
order is a contingency order that require the immediate cancellation of 
a previously received order prior to the replacement of a new order 
with new terms and conditions. If the previously placed order is 
already filled partially or in its entirety the replacement order is 
automatically canceled or reduced by such number.
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    \8\ However, contingencies are included in the order message 
sent over TOPO Plus Orders. Complex Order messages merely show that 
a Complex Order was received, including the details of those orders, 
and are sent when such order is received; COLA Messages indicate 
that a COLA is beginning and are therefore sent when a COLA begins. 
Both Complex Order messages and COLA messages are available to all 
who subscribe to the PHLX Orders feed (which is a subset of the TOPO 
Plus Orders feed); the feed is available to all participants seeking 
to subscribe. See http://nasdaqtrader.com/Trader.aspx?id=DPSpecs#options_x for a description of Exchange 
feeds.
    \9\ See Rule 1066(c)(4).
    \10\ See Phlx Rule 1080(b)(i), which covers non-Complex Orders 
and provides that the following types of agency orders are eligible: 
day, GTC, Immediate or Cancel (``IOC''), Intermarket Sweep Order 
(``ISO''), market, limit, stop, stop-limit, all or none, or better, 
simple cancel, simple cancel to reduce size (cancel leaves), cancel 
to change price, cancel with replacement order, opening-only-market 
order, limit on opening order, and possible duplicate orders. The 
following types of off-floor broker-dealer limit orders may be 
entered: day, GTC, IOC, ISO, stop, stop-limit, simple cancel, simple 
cancel to reduce size (cancel leaves), cancel to change price, 
cancel with replacement order, limit on opening order. SQTs and 
RSQTs can enter limit on opening, IOC, ISO, and DAY limit order for 
their proprietary account(s). Non-SQT ROTs and specialists can enter 
orders for their proprietary account(s) as GTC, DAY limit, IOC, ISO, 
limit on opening and simple cancel as well as orders for less than 
10 contracts marked as IOC.
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    The Exchange believes that it is appropriate to broadcast a COLA 
Message without revealing a Complex Order's contingencies, because such 
contingencies are not a material term of the order. The Exchange does 
not believe that including or excluding that an order is an all-or-none 
order or a cancel-replacement order significantly affects whether a 
participant will respond to a particular COLA, which is the purpose of 
the COLA Message. Of course, the fact than an order is an all-or-none 
order will affect what order it can execute against, depending upon the 
size of each order. Nevertheless, the Exchange believes that 
participants would not decide whether to respond to a COLA based on the 
all-or-none contingency on the order initiating the COLA. If a 
participant could see that a particular order is an all-or-none order 
for a large size and such participant intended to submit a smaller 
order, the participant might assume that an execution would be 
unlikely; however, another participant could enter an order that caused 
there to be enough size to execute the all-or-none order. Thus, the 
information that an order is an all-or-none order is not enough 
information for a participant submitting an order for a size smaller 
than the all-or-none order to definitively predict whether it will 
execute, because of other orders \11\ and market factors. Although a 
participant might choose to response with an order for a size equal to 
or greater than the all-or-none order, the Exchange believes that 
participants enter orders for a size that reflects their true interest, 
strategy and risk profile and are not influenced by the existence of an 
all-or-none contingency on an order.
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    \11\ Participants cannot see others' responses so they are 
effectively ``blind'' to other responsive interest when making their 
own responsive decisions.
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    The Exchange notes that all-or-none orders are rare. Specifically, 
in August 2013, only 0.04% of COLAs were initiated by all-or-none 
orders. Furthermore, from February 2013 through July 2013, less than 
.05% of COLAs were initiated by all-or-none orders. In addition, only 
0.12% of all Complex Orders from February 2013 through July 2013 were 
entered as all-or-none orders. Accordingly, excluding from the COLA 
message that an order is an all-or-none should not have a significant 
impact on participants or on COLAs.
    With respect to cancel-replacement orders, the cancellation aspect 
of the order has no impact on the contra-side. The way the contingency 
operates is that the first order is entered as a normal Complex Order 
without a contingency, and it is later followed by a second order with 
has a cancel-replace contingency. The first order is then cancelled, 
fulfilling the contingency on the second order.\12\ Therefore, if the 
first order starts a COLA, even if the Exchange displayed contingencies 
in a COLA Message, such order would not have one. If the second order 
starts a COLA, it no longer has a contingency and therefore display of 
the contingency would not be relevant. Accordingly, the Exchange does 
not believe there would be any impact on responses whether or not the 
cancellation contingency is shown in the COLA message.
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    \12\ The replacement order does not retain the priority of the 
order it replaces. While the replacement order is eligible to trade 
at the end of the COLA, it is no longer treated as the COLA-eligible 
order and thus does not have the priority associated with a COLA-
eligible order.
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    Although the Exchange stated in its rule that contingency 
information would be included in the COLA message, the Exchange did not 
build a field to include that information and did not therefore include 
reference to this information in its specification document to 
participants seeking to receive its data feeds. The Exchange is not 
aware that any participant asked for such contingency information, even 
though it appears in the rule text.
    Other types of contingencies are listed in Rule 1066,\13\ but these 
do not apply to Complex Orders, because they are inconsistent with 
having multiple components. For example, stop and stop-limit 
orders,\14\ Opening-Only-Market Orders and Limit on Opening orders are 
all particular to one option series. The Exchange has not received 
requests for these order types to be made available. The Exchange 
proposes to make clear what order designations are available respecting 
Complex Orders by adopting Rule 1080.08(b)(v), which will provide that 
Complex Orders may be submitted as: All-or-none orders; \15\

[[Page 33980]]

cancel-replacement orders; \16\ limit orders; \17\ and market 
orders.\18\
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    \13\ Rule 1066(c) has been amended to delete the order types in 
(2), (3) and (6). See Securities Exchange Act Release No. 70629 
(October 8, 2013), 78 FR 62852 (October 22, 2013) (SR-Phlx-2013-
100). Although Rule 1066(c)(8) lists immediate-or-cancel (``IOC'') 
orders as a type of contingency order, the Exchange believes that 
IOC is better described as a time-in-force and it is therefore 
included with other time-in-force conditions like DAY and GTC in the 
Complex Order Rule. See Rule 1080.08(b). The Exchange does not 
indicate in the COLA Message the time-in-force of an order.
    \14\ With respect to stop and stop-limit orders, although such 
Complex Orders could conceivably be tied to a net debit/credit 
price, developing a transparent way to effect the stop price would 
be difficult, because Complex Order net prices are not disseminated 
to OPRA, nor are the Complex Order prices disseminated as a quote to 
OPRA. Thus, the Exchange does not believe it would be practicable to 
accept stop or stop limit orders as Complex Orders.
    \15\ All-or-none orders are to be executed in its entirety or 
not at all. This is the same definition as currently found in Rule 
1066(c)(4). These orders are only available to non-broker-dealer 
customers.
    \16\ Cancel-replacement orders require the immediate 
cancellation of a previously received order prior to the replacement 
of a new order with new terms and conditions. If the previously 
placed order is already filled partially or in its entirety the 
replacement order is automatically canceled or reduced by such 
number. This is the same definition as Rule 1066(c)(7).
    \17\ Limit orders are to be executed at a specified price or 
better. This is the same definition as Rule 1066(b).
    \18\ Market orders are to be executed at the best price 
available at the time of execution. This is the same definition as 
Rule 1066(a).
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Priority Change
    In addition, the Exchange proposes to amend Rule 1080.08(e)(vi)(B) 
to provide that market maker \19\ COLA Sweeps and market maker Complex 
Orders are treated the same in the COLA, meaning one does not have 
execution priority over the other. The Rule incorrectly states that 
COLA Sweeps have priority over market maker Complex Orders. The 
Exchange believes that it is appropriate for market maker COLA Sweeps 
and market maker Complex Orders to be treated the same way for priority 
purposes, because they are both coming from market makers.\20\
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    \19\ Market maker COLA Sweeps include those entered by SQTs and 
RSQTs. Non-SQT ROTs cannot enter COLA Sweeps. See supra note 3. 
Specialists' COLA Sweeps are addressed in Rule 1080.08(e)(vi)(C).
    \20\ See supra note 3.
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the provisions of Section 6 of the Act,\21\ in general, and with 
Section 6(b)(5) of the Act,\22\ in particular, which requires, among 
other things, that the rules of an exchange be designed to promote just 
and equitable principles of trade. Specifically, the Exchange is 
proposing that the COLA Message will not include a COLA-eligible 
order's contingencies. Nevertheless, the Exchange believes that, even 
without contingencies, the COLA message should promote just and 
equitable principles of trade, because market participants will 
continue to receive information that is material to responding to a 
COLA-eligible order. The Exchange believes that contingency information 
is rather extraneous and notes that market participants have not asked 
why it is not currently made available, despite the current reference 
to it in the rule text. Even if the Exchange included contingency 
information in the COLA message, the Exchange does not believe that 
participants would use it or rely on it to make trading decisions. 
Accordingly, the Exchange believes it is consistent with just and 
equitable principles of trade to not include contingency information. 
In addition, the Exchange notes that contingency information respecting 
each Complex Order is available on its order feed, TOPO Plus Orders, 
which contains Complex Order information.\23\ Because the same 
information is available on that feed, the Exchange does not believe 
that participants are adversely impacted and all participants have 
access to the same message, such that it is consistent with just and 
equitable principles of trade to not include this information in the 
COLA Message.
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    \21\ 15 U.S.C. 78f.
    \22\ 15 U.S.C. 78f(b)(5).
    \23\ Securities Exchange Act Release Nos. 60877 (October 26, 
2009), 74 FR 56255 (October 30, 2009) (SR-Phlx-2009-92); and 66693 
(May 15, 2012), 77 FR 30043 (May 21, 2012) (SR-Phlx-2012-63).
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    The Exchange also notes that all-or-none Complex Orders are not 
common. It is consistent with just and equitable principles of trade, 
because it would not have any impact on participants whether or not 
this information is provided. Similarly, the Exchange believes that it 
is consistent with just and equitable principles of trade to not 
include the cancel-replace contingency in a COLA Message. Because the 
first order, as explained above, does not have a contingency nor does 
the second order (the cancel-replacement order) once it is live, the 
Exchange does not believe it is relevant to display the cancel-replace 
contingency, because there would be no impact on responses.
    The Exchange is also proposing to provide that COLA Sweeps do not 
have priority over market maker Complex Orders. This is a correction to 
the rule text. The Exchange believes that it is appropriate for market 
maker COLA Sweeps and Complex Orders to be treated the same way for 
priority purposes, because they are coming from the same type of market 
participant, a market maker.\24\ The Exchange believes that this should 
promote just and equitable principles of trade, because market 
participants could reasonably expect that their interest should be 
treated the same way whether entered as an order or as a COLA 
Sweep.\25\
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    \24\ Although non-SQT ROTs cannot submit COLA Sweeps, their 
Complex Orders are treated the same way as the Complex Orders of 
other market makers, including that their orders can interact with a 
COLA-eligible order.
    \25\ Complex Orders could be responsive to a particular COLA or 
could be an unrelated order. Because Complex Orders are not 
specifically marked as ``COLA responses,'' the Phlx XL System cannot 
identify which Complex Orders are truly intended to respond to the 
auction and which are merely coincidental.
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    Furthermore, this priority treatment is similar to the Exchange's 
priority rule respecting orders other than Complex Orders, as well as 
the comparable rules of other options exchanges, because a market 
maker's interest at a particular price is combined regardless of the 
method of entry (quote, COLA Sweep or order).\26\ Specifically, Rule 
1014(g)(vii), in calculating a market maker's participation, takes into 
account both quotes and orders, as indicated by the following language 
in the formula of the rule: based on the number of Phlx XL Participants 
quoting or with limit orders at BBO. Accordingly, the Exchange believes 
that the correction to the priority provision does not significantly 
affect the protection of investors or the public interest, and does not 
impose a significant burden on competition.
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    \26\ See Phlx Rule 1014(g)(vii)(B)(1)(b). Like COLA Sweeps, 
Sweeps are treated the same way as other market maker quotes in the 
Phlx XL System. See also BX Options Rules, Chapter VI, Section 
10(1)(A) and (B).
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    In addition, this priority change is not unfairly discriminatory 
with respect to non-SQT ROTs (who cannot submit COLA Sweeps); in fact, 
it is fairer to them, because it will no longer give COLA Sweeps 
priority over other market maker Complex Orders.
    The Exchange is also proposing to make the Complex Order rule, Rule 
1080.08, more complete by listing in subparagraph (b)(v) the types of 
orders and contingencies that can be accepted as Complex Orders. The 
four types to be listed (all-or-none, cancel-replacement, limit and 
market) are all existing orders types and contingencies on Phlx. The 
Exchange believes that this should promote just and equitable 
principles of trade as well as protect investors and the public 
interest by making more clear how specifically Complex Orders can be 
designated. The Exchange notes that although all-or-none Complex Orders 
are only available to non-broker-dealer customers, this is not unfairly 
discriminatory, because it is common for certain types of orders to be 
available to certain participant types. For example, all-or-none orders 
that are not Complex Orders can only be entered for non-broker-dealer 
customers in the Exchange's Phlx XL system.\27\ Similarly, with respect 
to complex order programs on other options exchanges, at the discretion 
of the exchange, some participants may not be able to initiate \28\ or 
respond \29\ to a complex order auction.
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    \27\ See Phlx Rule 1080(b)(i)(A).
    \28\ See CBOE Rule 6.53C(d)(i)(2), NYSE Arca Rule 6.91(c)(1) and 
NYSE MKT Rule 980NY(e)(1).
    \29\ See CBOE Rule 6.53C(d)(iii), NYSE Arca Rule 6.91(c)(4) and 
NYSE MKT Rule 980NY(e)(4).

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[[Page 33981]]

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

    The Exchange 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, the proposal does not impose an intra-market burden on 
competition, because the same COLA Message with the same information 
will be available to all Phlx participants who receive Complex Order 
Messages and such messages are available to those who choose to 
subscribe, for a fee. Nor will the proposal impose a burden on 
competition among the options exchanges, because of the vigorous 
competition for order flow among the options exchanges. Market 
participants who find contingency information respecting complex orders 
important will continue to be able to receive that information when 
participating on competing exchanges.
    With respect to the aspect of the proposal that addresses the 
priority of market maker Complex Orders and COLA Sweeps executing after 
a COLA, the Exchange believes that this change does not impose a burden 
on competition, because it treats all interest received from a market 
maker the same way and does not change the way other intra-market 
interest is handled. To the extent that market participants disagree 
with the particular approach taken by the Exchange herein, market 
participants can easily and readily direct complex order flow to 
competing venues.
    With respect to the aspect of the proposal that adopts specific 
order types and contingencies applicable to Complex Orders, the 
Exchange does not believe that the proposal imposes a burden on inter-
market competition. Most of these order types and contingencies are 
available to all participants. Although all-or-none Complex Orders can 
only be entered by non-broker-dealer customers, the Exchange does not 
believe that this imposes a burden on competition, because: (i) As 
stated above, all-or-none Complex Orders are rare, both in terms of how 
many start a COLA and how many are received; and (ii) it is common both 
on the Exchange (respecting non-Complex Orders) and on other options 
exchanges to offer only certain functionality to certain 
participants.\30\ The Exchange notes that this particular functionality 
is only available for non-Complex Orders on Phlx to non-broker-dealer 
customers.\31\ Nor does the proposal impose a burden on intra-market 
competition, because most of these order types are available to all 
participants.
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    \30\ See supra notes 27-29.
    \31\ See supra note 27.
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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 \32\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\33\
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    \32\ 15 U.S.C. 78s(b)(3)(a)(ii).
    \33\ 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.
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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: (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-2014-39 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-2014-39. 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-2014-39 and should be 
submitted on or before July 7, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\34\
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    \34\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-13823 Filed 6-12-14; 8:45 am]
BILLING CODE 8011-01-P