Document ID: SEC-2014-0886-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX PHLX LLC
Posted Date: 2014-05-29T04:00Z

[Federal Register Volume 79, Number 103 (Thursday, May 29, 2014)]
[Notices]
[Pages 30906-30908]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-12425]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72229; File No. SR-Phlx-2014-35]

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

May 22, 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 May 12, 2014, NASDAQ OMX PHLX LLC (``Phlx'' or ``Exchange'') filed 
with the Securities and Exchange Commission (``SEC'' or ``Commission'') 
the proposed rule change as described in Items I, II and III, below, 
which Items have been prepared by the Exchange. The

[[Page 30907]]

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 amend Rule 1022 (``Securities Accounts and 
Orders of Specialists and Registered Options Traders'') to require 
firms to report all of the accounts for which they engage in trading 
activities or which they exercise investment discretion upon request, 
rather than on a continuing basis.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://www.nasdaqtrader.com/micro.aspx?id=PHLXRulefilings, 
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 amend Rule 1022, entitled ``Securities 
Accounts and Orders of Specialists and Registered Options Traders,'' 
regarding the identification and filing of a list of accounts 
identifying all accounts in which a Specialist \3\ or Registered 
Options Trader \4\ may engage in trading activity for or over which 
they exercise investment discretion. This filing is similar to Chicago 
Board Options Exchange (``CBOE'') rule 8.9.
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    \3\ A Specialist is an Exchange member who is registered as an 
options specialist pursuant to Rule 1020(a). An options Specialist 
includes a Remote Specialist which is defined as an options 
specialist in one or more classes that does not have a physical 
presence on an Exchange floor and is approved by the Exchange 
pursuant to Rule 501.
    \4\ A Registered Option Trader (``ROT'') is defined in Exchange 
Rule 1014(b) as a regular member of the Exchange located on the 
trading floor who has received permission from the Exchange to trade 
in options for his own account. A ROT includes SQTs and RSQTs as 
well as on and off-floor ROTS.
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    The Exchange is proposing to make the change in order eliminate the 
obligation for members or member organizations (collectively 
``member'') to continuously provide nonessential regulatory 
documentation. The Exchange would retain the ability to request the 
information from the member upon request when needed.
    The Exchange recognizes the importance of requiring Specialists and 
ROTs to keep a current list of all accounts for stock, options, or 
related securities or physical commodities or other derivatives which 
they trade or over which they have discretion. The proposed rule change 
would require members to keep this information accessible and updated. 
However, it should be noted, that the Exchange does not have an 
immediate and ongoing regulatory need for the information described 
herein. The information which is required, should be available to 
members today if requested by the Exchange. If the Exchange requests 
such information today, the Exchange may utilize other rules \5\ to 
request the information that is being provided today to CBOE pursuant 
to its rule 8.9. The Exchange believes this proposed rule will make 
clear that account identification information for Specialists and ROTs 
is to be retained by and should be provided to the Exchange upon 
request.
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    \5\ Rule 960.2(b) Cooperation with Investigation or Examination 
and Rule 760 Maintenance, Retention and Furnishing of Books, Records 
and Other Information.
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Securities Exchange Act of 1934 (the ``Act'') and the rules and 
regulations thereunder applicable to the Exchange and, in particular, 
the requirements of Section 6(b) of the Act.\6\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \7\ requirements that the rules of an exchange be 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in regulating, clearing, 
settling, processing information with respect to, and facilitating 
transactions in securities, to remove impediments to and perfect the 
mechanism of a free and open market and a national market system, and, 
in general, to protect investors and the public interest. This proposed 
change will remove an impediment to a free and open market by 
eliminating an unnecessary ongoing reporting process to PHLX members 
which is not required of members conducting similar transactions on 
CBOE and will retain the regulatory obligation to provide the 
information when needed in order to effectively regulate the market. 
Additionally, the Exchange believes the proposed rule change is 
consistent with the Section 6(b)(5) \8\ requirement that the rules of 
an exchange not be designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers as this requirement continues 
to apply to both Specialists and ROTs.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
    \8\ Id.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    Phlx does not believe that the proposed rule change will impose any 
burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. The proposed change does not 
impose any burden on intramarket competition because it applies to all 
members and member organizations. There is no burden on intermarket 
competition as the proposed change is merely attempting to remove an 
additional reporting document that the Exchange will continue to 
require members to retain and produce upon request.

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 \9\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \10\ 17 CFR 240.19b-4(f)(6).
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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

[[Page 30908]]

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. 
The Exchange has provided 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.

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-2014-35 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-2014-35. 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-2014-35 and should be 
submitted on or before June 19, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-12425 Filed 5-28-14; 8:45 am]
BILLING CODE 8011-01-P