Document ID: SEC-2014-0028-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX PHLX, LLC
Posted Date: 2014-01-07T05:00Z

[Federal Register Volume 79, Number 4 (Tuesday, January 7, 2014)]
[Notices]
[Pages 888-889]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-31603]

[[Page 888]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71212; File No. SR-Phlx-2013-129]

Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Delay the 
Implementation of the Options Floor Broker Management System Changes

December 31, 2013.
    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 December 27, 2013, 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 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 the 
Substance of the Proposed Rule Change

    The Exchange proposes to delay the implementation of its new 
Options Floor Broker Management System.

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 delay the implementation of the 
Exchange's enhancements to the Options Floor Broker Management System 
(``FBMS''). The Exchange received approval to implement the 
enhancements as of June 1, 2013,\3\ and delayed implementation until 
July 2013,\4\ until September 2013 \5\ and again until December 
2013.\6\ At this time, the Exchange needs additional time in order to 
complete the applicable technology work. The delay is not as a result 
of major technology changes from the original proposal and no rule 
changes are being made; rather, the Exchange continues to work to, 
generally, make the system more user-friendly and provide more useful 
interfaces for the ultimate user, the Floor Broker.
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    \3\ Securities Exchange Act Release No. 69471 (April 29, 2013), 
78 FR 26096 (May 3, 2013) (SR-Phlx-2013-09).
    \4\ Securities Exchange Act Release No. 69811 (June 20, 2013), 
78 FR 38422 (June 26, 2013) (SR-Phlx-2013-67).
    \5\ Securities Exchange Act Release No. 70141 (August 8, 2013), 
78 FR 49565 (August 14, 2013) (SR-Phlx-2013-83).
    \6\ Securities Exchange Act Release No. 70629 (October 8, 2013), 
78 FR 62852 (October 22, 2013) (SR-Phlx-2013-100).
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    Accordingly, the Exchange seeks to be able to implement the changes 
by the end of March 2014; the Exchange will announce the specific date 
in advance through an Options Trader Alert.
    Today, FBMS enables Floor Brokers and/or their employees to enter, 
route, and report transactions stemming from options orders received on 
the Exchange. FBMS also establishes an electronic audit trail for 
options orders represented by Floor Brokers on the Exchange. Floor 
Brokers can use FBMS to submit orders to Phlx XL, rather than executing 
the orders in the trading crowd.
    With the new FBMS, all options transactions on the Exchange 
involving at least one Floor Broker would be required to be executed 
through FBMS. In connection with order execution, the Exchange will 
allow FBMS to execute two-sided orders entered by Floor Brokers, 
including multi-leg orders up to 15 legs, after the Floor Broker has 
represented the orders in the trading crowd. FBMS will also provide 
Floor Brokers with an enhanced functionality called the complex 
calculator that will calculate and display a suggested price of each 
individual component of a multi-leg order, up to 15 legs, submitted on 
a net debit or credit basis.
    In the original filing, the Exchange intended to implement these 
enhancements with a trial period of two to four weeks, to be determined 
by the Exchange, during which the new FBMS enhancements and related 
rules would operate along with the existing FBMS and rules. At this 
time, the Exchange proposes to adopt a longer implementation period of 
up to eight weeks, recognizing from the ongoing technology work that 
the users will need more time to gain experience with the new system. 
The Exchange will announce the beginning and end of the trial period in 
advance.
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 enhancing FBMS to make the Exchange's markets more efficient, to the 
benefit of the investing public. Although the Exchange needs additional 
time to finalize the enhancements, the delay is expected to be short 
and will involve advance notice to the Exchange membership.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 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 continues to 
believe, as it stated when proposing these enhancements, that these 
enhancements to FBMS should result in the Exchange's trading floor 
operating in a more efficient way, which should help it compete with 
other floor-based exchanges and help the Exchange's Floor Brokers 
compete with floor brokers on other options exchanges.

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 \9\ and

[[Page 889]]

subparagraph (f)(6) of Rule 19b-4 thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 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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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative for 30 days after the date of filing.\11\ However, 
Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter 
time if such action is consistent with the protection of investors and 
the public interest.\12\ The Exchange has requested that the Commission 
waive the 30-day operative delay so that the Exchange can implement the 
enhancements once they are ready from a technology perspective.
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    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ Id.
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    The Commission believes that the waiver of the 30-day operative 
delay is consistent with the protection of investors and the public 
interest as it will clarify that the delayed implementation of the FBMS 
will be effective and operative immediately. In addition, because the 
proposal only delays the implementation date of the FBMS and does not 
make any additional changes to the FBMS itself, it does not raise any 
novel regulatory issues. Therefore, the Commission designates the 
proposal operative upon filing.\13\
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    \13\ For purposes only of waiving the 30-day operative delay, 
the Commission 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: (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.\14\ If 
the Commission takes such action, the Commission shall institute 
proceedings to determine whether the proposed rule change should be 
approved or disapproved.\15\
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    \14\ 15 U.S.C. 78s(b)(3)(C).
    \15\ Id.
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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-2013-129 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-Phlx-2013-129. 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 such filing also will be available 
for inspection and copying at the principal offices 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-2013-129, 
and should be submitted on or before January 28, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013-31603 Filed 1-6-14; 8:45 am]
BILLING CODE 8011-01-P [FEDREG][VOL]*[/VOL][NO]*[/NO][DATE]*[/
DATE][NOTICES]