Document ID: SEC-2014-1608-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX PHLX, LLC
Posted Date: 2014-09-25T04:00Z

[Federal Register Volume 79, Number 186 (Thursday, September 25, 2014)]
[Notices]
[Pages 57632-57639]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-22789]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73152; File No. SR-Phlx-2014-54]

Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of 
Filing of Proposed Rule Change To Add a New Complex Order Process 
Called Legging Orders

September 19, 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 September 10, 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 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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

    The Exchange proposes to amend Rule 1080.08(f)(iii) to add a new 
Complex Order process called Legging Orders.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://nasdaqomxphlx.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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to implement functionality to provide 
additional liquidity for Complex Orders resting on top of the Complex 
Order Book (``CBOOK'') at a price which improves the cPBBO.\3\ Today, a 
Complex Order resting on the CBOOK may be executed either by: (i) 
trading against an incoming Complex Order that is marketable against 
the resting Complex Order,\4\ or (ii) legging into the market when the 
net price of the Complex Order can be satisfied by executing all of the 
legs against the best bids or offers on the Exchange for the individual 
options series.\5\ Legging Orders are designed to increase the 
opportunity for Complex Orders to ``leg'' into the market.
---------------------------------------------------------------------------

    \3\ The term ``cPBBO'' means the best net debit or credit price 
for a Complex Order Strategy based on the PBBO for the individual 
options components of such Complex Order Strategy, 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).
    \4\ See Rule 1080.08(f)(iii)(A)(2).
    \5\ See Rule 1080.08(f)(iii)(A)(1).
---------------------------------------------------------------------------

    As proposed herein, a Legging Order is a limit order on the regular 
order book in an individual series that represents one leg of a two-
legged Complex Order (which improves the cPBBO) to buy or sell an equal 
quantity of two option series resting on the CBOOK.\6\ As explained 
further below, Legging Orders may be automatically generated on behalf 
of Complex Orders resting on the top of the CBOOK so that they are 
represented at the best bid and/or offer on the Exchange for the 
individual legs. Accordingly, Legging Orders serve to attract interest 
to trade, while the existing functionality that legs into the market is 
merely reacting to liquidity that arrives and is placed on the book.
---------------------------------------------------------------------------

    \6\ See proposed Rule 1080.08(f)(iii)(C). Legging Orders may 
only be generated for two-legged Complex Orders involving a one-to-
one ratio. This is the same as ISE Rule 715(k). Also, both 
components must be options, and therefore stock-option orders are 
not permitted.
---------------------------------------------------------------------------

    The system will evaluate the CBOOK when a Complex Order enters the 
CBOOK and at a regular time interval to be determined by the Exchange 
(which interval shall not exceed 1 second) following a change in the 
National Best Bid/Offer (``NBBO'') or PHLX Best Bid/Offer (``PBBO'') in 
any component of a Complex Order eligible to generate Legging Orders to 
determine whether Legging Orders may be generated. The

[[Page 57633]]

Exchange may determine to limit the number of Legging Orders generated 
on an objective basis and may determine to remove existing Legging 
Orders in order to maintain a fair and orderly market in times of 
extreme volatility or uncertainty.\7\
---------------------------------------------------------------------------

    \7\ See proposed Rule 1080.08(f)(iii)(C).
---------------------------------------------------------------------------

    Legging Orders are firm orders that are included in the Exchange's 
displayed best bid or offer. The Exchange will determine the options 
for which, if any, Legging Order functionality will be available and 
will communicate this to its participants.
Generating Legging Orders
    A Legging Order may be automatically generated for one leg of a 
Complex Order at a price: (i) That matches or improves upon the best 
Phlx displayed bid or offer; and (ii) at which the net price can be 
achieved when the other leg is executed against the best displayed bid 
or offer (other than against a Legging Order).\8\ For example:
---------------------------------------------------------------------------

    \8\ See proposed Rule 1080.08(f)(iii)(C)(1).

    A Complex Order to buy 10 series A and to buy 10 series B at a 
net price of $2.25 is entered into the CBOOK and there is no 
offsetting Complex Order to sell. The Complex Order cannot leg into 
the regular market because the net price available for the Complex 
Order on the PHLX's regular order book is $2.40 as follows:

------------------------------------------------------------------------
                 PHLX bid                            PHLX offer
------------------------------------------------------------------------
A 10 at $1.00............................  20 at $1.20.
B 10 at $1.00............................  20 at $1.20.
------------------------------------------------------------------------

    Buying A and B at $1.20 would result in a net price of $2.40, 
but the Complex Order is only willing to pay $2.25.
    Legging Orders to buy 10 A at $1.05 and 10 B at $1.05 may be 
automatically generated, improving the PHLX's best bid for both A 
and B to $1.05:

------------------------------------------------------------------------
                 PHLX bid                            PHLX offer
------------------------------------------------------------------------
A 10 at $1.05 (Legging Order)............  20 at $1.20.
B 10 at $1.05 (Legging Order)............  20 at $1.20.
------------------------------------------------------------------------

    If a marketable order to sell 10 A is received, it will execute 
against the Legging Order to buy A at $1.05, there will be an 
automatic execution of the other leg of the Complex Order against 
the displayed offer for B at $1.20, and the Legging Order to buy B 
at $1.05 will be automatically removed. As a result, the net price 
of $2.25 is achieved for the Complex Order (buy A at $1.05 + buy B 
at $1.20 = $2.25 net).\9\ Following the execution of the Complex 
Order, the PHLX BBO is:
---------------------------------------------------------------------------

    \9\ If a marketable order to sell 10 B is received, it will 
execute against the Legging Order to buy B at $1.05, there will be 
an automatic execution of the other leg of the Complex Order against 
the displayed offer for A at $1.20, and the Legging Order to buy A 
at $1.05 will be automatically removed. As a result, the net price 
of $2.25 is achieved for the Complex Order (buy A at $1.20 + buy B 
at $1.05 = $2.25 net).

------------------------------------------------------------------------
                 PHLX bid                            PHLX offer
------------------------------------------------------------------------
A 10 at $1.00............................  20 at $1.20.
B 10 at $1.00............................  10 at $1.20.
------------------------------------------------------------------------

    In addition to enabling the execution of the Complex Order at a net 
price of $2.25, the Legging Order enhanced execution for orders in the 
regular order book as (i) the incoming marketable order to sell A 
received a better price ($1.05 instead of $1.00), and (ii) liquidity to 
execute resting interest to sell 10 B at $1.20 was provided by the 
Complex Order.
    As explained above, the proposed rule specifies when a Legging 
Order can be generated. Specifically, Legging Orders may be generated 
only for two-legged options orders with the same quantity on both 
legs.\10\ A Legging Order may be automatically generated for one leg of 
a Complex Order at a price: (i) That matches or improves upon the best 
displayed bid or offer; and (ii) at which the net price can be achieved 
when the other leg is executed against the best Phlx displayed bid or 
offer (other than against a Legging Order).\11\ Two Legging Orders 
relating to the same Complex Order can be generated, but only one of 
those can execute as part of the execution of a particular Complex 
Order.\12\
---------------------------------------------------------------------------

    \10\ This is the same as ISE Rule 715(k).
    \11\ See proposed Rule 1080.08(f)(iii)(C)(1). CBOE similarly 
does not generate its version of this order when there is a 
``legging order'' that comprises the best bid/offer for the other 
leg.
    \12\ See proposed Rule 1080.08(f)(iii)(C)(2).
---------------------------------------------------------------------------

    However, Legging Orders will not be generated at a price that would 
lock or cross the price of an away market. Nor will a Legging Order be 
generated if there is an auction, including but not limited to a 
Complex Order Live Auction (``COLA'') or a PIXL auction in either side 
or Posting Period under Rule 1080(p) regarding Acceptable Trade Range 
(``ATR'') on the same side in progress in the series.\13\ Furthermore, 
a Legging Order will not be generated if the price of the Complex Order 
is outside of the Acceptable Complex Execution (``ACE'') Parameter of 
Rule 1080.08(i), which is explained further below. Legging Orders will 
not be generated respecting a Complex Order that is an all-or-none 
order, because of the difficulty of fulfilling an order size 
contingency.\14\ Finally, Legging Orders will not be generated for a 
Complex Order if it will immediately cause Legging Orders to be removed 
pursuant to proposed Rule 1080.08(f)(iii)(C)(4)(ix).\15\
---------------------------------------------------------------------------

    \13\ See Phlx Rules 1080.08, 1080(n) and 1080(p) regarding COLA, 
PIXL auction and ATR, respectively.
    \14\ Rule 1080.08 (b)(v) provides that Complex Orders may be 
submitted as All-or-None orders--to be executed in their entirety or 
not at all. These orders can only be submitted for non-broker-dealer 
customers. -Notwithstanding this rule language, All-or-None Complex 
Orders are not affirmatively permitted to be submitted at this time. 
The Exchange anticipates that it will file a proposed rule change in 
the near future to permit the trading system to accept All-or-None 
Complex Orders. See SR-Phlx-2014-42P at footnote 21. The instant 
proposed rule change describes how All-or-None Complex Orders, once 
they are permitted under Exchange rules, will not generate Legging 
Orders.
    \15\ See proposed Rule 1080.08(f)(iii)(C)(2).
---------------------------------------------------------------------------

    There can be only one Legging Order on the same side of the market 
in a series, unless a Legging Order, if generated, would have priority 
at the same price over an existing Legging Order based on the 
participant (in which case the lower priority order would be removed). 
For example, an order for a broker-dealer has a lower priority under 
Exchange rules than an order for a customer.\16\ A Legging Order with a 
higher priority may be generated and cause a lower priority Legging 
Order at the same price to be removed. If a Legging Order would have 
the same priority as another Legging Order at the same price, the 
second Legging Order would not be generated, because Legging Orders 
would only be generated in the same series on the same side of the 
market respecting the first Complex Order received. This discussion 
applies to the priority of generating orders, as opposed to execution 
priority, which is discussed below.
---------------------------------------------------------------------------

    \16\ See Phlx Rule 1014(g)(vii).
---------------------------------------------------------------------------

    In addition to these limitations, the Exchange will carefully 
manage and curtail the number of Legging Orders being generated so that 
they do not negatively impact system capacity and performance.\17\ 
Accordingly, Legging Orders may not be generated for all eligible 
Complex Orders resting on the CBOOK.
---------------------------------------------------------------------------

    \17\ The Exchange will curtail the number of Legging Orders on 
an objective basis, such as limiting the number of orders generated 
in a particular option. The Exchange will not limit the generation 
of Legging Orders on the basis of the entering participant or the 
participant category of the order (e.g., professional or public 
customer).
---------------------------------------------------------------------------

    A Legging Order may be generated and executed in an increment other 
than the minimum increment for that series and will be ranked on the 
order book at its generated price and displayed at a price that is 
rounded, down for Legging Orders to buy and up for Legging Orders to 
sell, to the nearest minimum increment allowable for that series. In

[[Page 57634]]

other words, although the Legging Order may be displayed at a rounded 
price, it will be ranked on the order book and executed at its actual 
price.\18\ This is the same as BOX Rule 7240(c)(1).
---------------------------------------------------------------------------

    \18\ See proposed Rule 1080.08(f)(iii)(C)(2).
---------------------------------------------------------------------------

    Legging Orders, like all regular orders, will be disseminated by 
the Exchange to the Options Price Reporting Authority (``OPRA'') as 
part of its best bid and offer, as well as over the Exchange's own data 
feeds, TOPO Plus Orders and PHLX Orders. TOPO Plus Orders and PHLX 
Orders will indicate that an order is a Legging Order. Currently, 
orders on TOPO Plus Orders and PHLX Orders are indicated to be simple 
orders or Complex Orders. Indicating an order is a Legging Order is 
consistent with that behavior.
    Of course, Legging Orders will not be generated if the Exchange or 
a particular option has not opened, is halted or is otherwise not 
available for trading. Similarly, the particular Complex Order Strategy 
must be available for trading. Legging Orders are not routable and are 
limit orders with a time-in-force of DAY, as they represent an 
individual component of a Complex Order.
Execution of Legging Orders
    In terms of execution priority, a Legging Order is executed only 
after all other executable orders (including any non-displayed size) 
and quotes at the same price are executed in full pursuant to the Phlx 
priority rule applicable to Phlx XL non-Complex Orders, rather than 
based on the time of receipt of the Complex Order.\19\ Accordingly, the 
generation of a Legging Order will not affect the existing priority, or 
execution opportunities, currently provided to participants in the 
regular market in any way. When a Legging Order is executed, the other 
leg of the Complex Order will be automatically executed against the 
displayed best bid or offer on the Exchange and any other Legging Order 
based on that Complex Order will be removed.\20\
---------------------------------------------------------------------------

    \19\ See proposed Rule 1080.08(f)(iii)(C)(3).
    \20\ This is the same as ISE Rule 715(k).
---------------------------------------------------------------------------

    For example:

    A Complex Order to buy 50 A and to buy 50 B at a net price of 
$2.25 (buy A/B 50 at $2.25) is entered into the CBOOK and there is 
no off-setting Complex Order to sell.
    The Complex Order cannot leg into the regular market because the 
PBBO net price available for the Complex Order on the PHLX's regular 
order book is $2.40 as follows:

------------------------------------------------------------------------
                 PHLX bid                            PHLX offer
------------------------------------------------------------------------
A 40 at $1.05............................  60 at $1.20.
B 20 at $1.05............................  80 at $1.20.
------------------------------------------------------------------------

    Legging Orders to buy 50 A at $1.05 and 50 B at $1.05 may be 
automatically generated, increasing the size of the PHLX's best bid 
for both A and B as follows:

------------------------------------------------------------------------
                 PHLX bid                            PHLX offer
------------------------------------------------------------------------
A 90 at $1.05 (50 Legging Order).........  60 at $1.20.
B 70 at $1.05 (50 Legging Order).........  80 at $1.20.
------------------------------------------------------------------------

    If a marketable order to sell 30 A is received, it will execute 
against the orders and/or quotes at $1.05 other than the Legging 
Order pursuant to the Exchange's regular allocation algorithm,\21\ 
and the size of the bid for A will be reduced to 60 contracts as 
follows:
---------------------------------------------------------------------------

    \21\ See Rule 1014(g)(vii), which is the Phlx XL priority 
provision that allocates orders based on participant type.

------------------------------------------------------------------------
                 PHLX bid                            PHLX offer
------------------------------------------------------------------------
A 60 at $1.05 (50 Legging order).........  60 at $1.20.
B 70 at $1.05 (50 Legging order).........  80 at $1.20.
------------------------------------------------------------------------

    If a marketable order to sell 50 A were then received, it would 
first execute the remaining 10 A from the orders and/or quotes at 
$1.05 that are not the Legging Order, and then execute 40 A against 
the Legging Order.
    At this time, the Complex Order will also execute 40 B at $1.20. 
The residual 10 contracts of the Legging Orders in A and the Legging 
Order for 50 contracts of B will be removed. As a result, the net 
price of $2.25 is achieved for a partial execution of the Complex 
Order (buy 40 A at $1.05 + buy 40 B at $1.20 = 40 at $2.25 net).
    Following the partial execution of the Complex Order, the PHLX 
BBO is:

------------------------------------------------------------------------
                 PHLX bid                            PHLX offer
------------------------------------------------------------------------
A $0.00..................................  60 at $1.20.
B 20 at $1.05............................  40 at $1.20.
------------------------------------------------------------------------

Removal
    Pursuant to proposed Rule 1080.08(f)(iii)(C)(4), a Legging Order 
will be removed from the regular limit order book automatically: (i) If 
the price of the Legging Order is no longer at the Exchange's displayed 
best bid or offer on the regular limit order book; (ii) if execution of 
the Legging Order would no longer achieve the net price of the Complex 
Order when the other leg is executed against the Exchange's best 
displayed bid or offer on the regular limit order book (other than 
another Legging Order); (iii) if the Complex Order is executed in full 
or in part; (iv) if the Complex Order is cancelled or modified; (v) if 
the price of the Complex Order is outside of the ACE Parameter of Rule 
1080.08(i); (vi) upon receipt of a Qualified Contingent Cross Order or 
an order that will trigger an auction under Exchange rules in a 
component in which there is a Legging Order (whether a buy order or a 
sell order); (vii) if a Legging Order is generated by a different 
Complex Order in the same leg at a better price or the same price for a 
participant with a higher priority; (viii) if a Complex Order is 
marketable against the cPBBO where a Legging Order is present and has 
more than one leg in common with the existing Complex Order that 
generated the Legging Order; (ix) if a Complex Order becomes marketable 
against multiple Legging Orders; (x) if a Complex Order consisting of 
an unequal quantity of components is marketable against the cPBBO where 
a Legging Order is present but cannot be executed due to insufficient 
size in at least one of the components of the cPBBO; or (xi) if an 
incoming all-or-none order is entered onto the order book at a price 
which is equal to or crosses the price of a Legging Order. Once a 
Legging Order is removed, it no longer exists as an order, even though 
the ``parent'' Complex Order may still exist. Upon occurrence of any of 
these conditions, the system will recognize the condition and remove 
the Legging Order accordingly.
    For example:

    A Complex Order to buy 20 A and to buy 20 B at a net price of 
$2.25 (buy A/B 20 at $2.25) is entered into the CBOOK and there is 
no offsetting Complex Order to sell.
    The Complex Order cannot leg into the regular market because the 
PBBO net price available for the Complex Order is $2.40 as follows:

------------------------------------------------------------------------
                 PHLX bid                            PHLX offer
------------------------------------------------------------------------
A 10 at $1.05............................  20 at $1.20.
B 10 at $1.05............................  50 at $1.20.
------------------------------------------------------------------------

    Legging Orders to buy 20 A at $1.05 and 20 B at $1.05 may be 
automatically generated, increasing the size of the PHLX's best Bid 
for both A and B as follows:

------------------------------------------------------------------------
                 PHLX bid                            PHLX offer
------------------------------------------------------------------------
A 30 at $1.05 (20 Legging Order).........  20 at $1.20.
B 30 at $1.05 (20 Legging Order).........  50 at $1.20.
------------------------------------------------------------------------

    If a limit order to buy 10 A at $1.10 is received, the Legging 
Order to buy 20 A at $1.05 will be removed because it is no longer 
at the PHLX best Bid.

------------------------------------------------------------------------
                 PHLX bid                            PHLX offer
------------------------------------------------------------------------
A 10 at $1.10............................  20 at $1.20.
B 30 at $1.05 (20 Legging Order).........  50 at $1.20.
------------------------------------------------------------------------

    If a marketable order to buy 20 A is received, the PHLX best 
Offer will move

[[Page 57635]]

above $1.20, resulting in the removal of the Legging Order to buy B 
at $1.05 because the net price of $2.25 can no longer be achieved.

------------------------------------------------------------------------
                 PHLX bid                            PHLX offer
------------------------------------------------------------------------
A 10 at $1.10............................  20 at $1.25.
B 10 at $1.05............................  50 at $1.20. (buy A at $1.25
                                            + buy B at $1.05 = $2.30
                                            net)
------------------------------------------------------------------------

    As noted above,\22\ a Legging Order is also removed from the 
regular order book if the price of the Complex Order is outside the ACE 
Parameter of Rule 1080.08(i). The ACE Parameter feature is designed to 
help maintain a fair and orderly market by helping to mitigate the 
potential risk of executions at prices which are extreme and 
potentially erroneous. Specifically, the ACE Parameter prevents Complex 
Orders from automatically executing at potentially erroneous prices by 
establishing a price range outside of which a Complex Order will not be 
executed. The ACE Parameter is based on the Complex National Best Bid 
or Offer (``cNBBO'') \23\ at the time an order would be executed. A 
Complex Order to sell will not be executed at a price that is lower 
than the cNBBO Bid by more than the ACE Parameter. A Complex Order to 
buy will not be executed at a price that is higher than the cNBBO Offer 
by more than the ACE Parameter. A Complex Order or a portion of a 
Complex Order that cannot be executed within the ACE Parameter will be 
placed on the CBOOK. This proposal does not change the ACE Parameter.

    \22\ See proposed Rule 1080.08(f)(iii)(C)(4)(v).
    \23\ See Rule 1080.08(a)(vi).
---------------------------------------------------------------------------

    For example:

    A Complex Order to buy 20 A and to buy 20 B at a net price of 
$3.25 (buy A/B 20 at $3.25) is entered into the CBOOK and there is 
no offsetting Complex Order to sell. Assume legging orders to buy 20 
A at $1.05 and 20 B at $1.05 were automatically generated.

------------------------------------------------------------------------
                 PHLX bid                            PHLX offer
------------------------------------------------------------------------
A 20 at $1.05 (legging order)............  20 at $2.20.
B 20 at $1.05 (legging order)............  20 at $2.20.
------------------------------------------------------------------------

    Now, assume the away markets move and the NBBO is as follows,

------------------------------------------------------------------------
                 NBBO bid                            NBBO offer
------------------------------------------------------------------------
A 50 at $1.05............................  20 at $1.20.
B 50 at $1.05............................  50 at $1.20.
------------------------------------------------------------------------

    The cNBBO for the Complex Order strategy is $2.10 Bid, Offered 
at $2.40.

    Assuming an ACE Parameter setting of 5%, the Exchange will not 
allow the Complex Order to buy 20 A and to buy 20 B to execute more 
than 5% above the cNBBO Offer of $2.40, or no higher than $2.52 
[$2.40+($2.40*.05)]. Since the Complex Order is no longer executable at 
its limit price of $3.25 due to the ACE Parameter protection, the 
legging orders associated with the Complex Order are removed from the 
limit order book.
    As noted above,\24\ a Legging Order is also removed from the 
regular order book upon receipt by the Exchange of an order that will 
trigger an auction under Exchange rules in a component where a Legging 
Order (whether a buy order or a sell order) has been generated, such as 
a COLA-eligible Order or PIXL Order, or upon receipt of a Qualified 
Contingent Cross (``QCC'') Order.\25\ These types of orders may involve 
multiple option components which may have multiple Legging Orders for 
various Complex Orders included in the option BBOs. In order to ensure 
that Legging Orders do not adversely affect the execution of these 
orders and in order to avoid the system complexities that would result 
from combining the execution of Legging Orders and thus Complex Orders 
with the already complex auction processes, the Exchange will remove 
Legging Orders upon acceptance of an auctionable order or QCC order and 
will not consider generation of any new Legging Orders until the 
auction has been completed or the QCC order has been executed. For 
example, assume two separate Complex Orders have generated Legging 
Orders which are represented in the PBBO. Complex Order 1 has generated 
a Legging Order in A and Complex Order 2 has generated a Legging Order 
in B.
---------------------------------------------------------------------------

    \24\ See proposed Rule 1080.08(f)(iii)(C)(4)(vi).
    \25\ See Rule 1080(o), which defines a QCC Order as an 
originating order to buy or sell at least 1000 contracts (or 10,000 
contracts in the case of mini options) that is identified as being 
part of a qualified contingent trade coupled with a contra-side 
order or orders totaling an equal number of contracts.

------------------------------------------------------------------------
                 PHLX bid                            PHLX offer
------------------------------------------------------------------------
A 20 at $1.05 (legging order 1)..........  20 at $1.20.
B 20 at $0.50 (legging order 2)..........  20 at $0.80.
C 20 at $0.25............................  20 at $0.50.
------------------------------------------------------------------------

    Assume an auctionable Complex Order is received. Upon receipt of an 
auctionable order, a Complex Auction is initiated. The Legging Orders 
in A and B are therefore removed from the system and no new Legging 
Orders will be generated until the end of the Auction. This removal 
eliminates system complexities that would result from combining regular 
Complex Auction executions and Legging Orders executions. In addition, 
scenarios could arise in which incoming Complex Orders or QCC Orders 
consist of the same components as the Complex Orders which generated 
Legging Orders and are reliant on the execution of the same interest as 
the Legging Orders. Since the purpose of Legging Orders is to provide 
additional liquidity for Complex Orders resting on the CBOOK without 
negatively affecting the trading opportunities of unrelated interest, 
the Exchange believes that removing Legging Orders upon receipt of an 
auctionable order or QCC order eliminates the need for system 
complexities and ensures trading opportunities remain unaffected for 
auctions and QCC Orders.
    In order to ensure Complex Orders are executed in accordance with 
the priority rules associated with such order, the Exchange proposes to 
remove a Legging Order from the limit order book when another Legging 
Order is generated by a different Complex Order in the same leg at a 
better price or at the same price for a participant with a higher 
priority.\26\ For example the system will remove a Legging Order 
representing a leg of a Complex Order for a Market Maker when a Legging 
Order is also generated in that leg at the same price for a Customer 
Complex Order.
---------------------------------------------------------------------------

    \26\ See proposed Rule 1080.08(f)(iii)(C)(4)(vii).
---------------------------------------------------------------------------

    As noted above, a Legging Order will be removed when a Complex 
Order is marketable against the cPBBO where a Legging Order is present 
and has more than one leg in common with the existing Complex Order 
that generated the Legging Order.\27\ This behavior ensures there is no 
risk of resting Complex Orders which have generated Legging Orders and 
incoming Complex Orders both relying on executions against the same 
displayed interest in order to satisfy all of their component legs. 
Consider the following example, with the following Legging Orders 
already generated by Complex Order 1:
---------------------------------------------------------------------------

    \27\ See proposed Rule 1080.08(f)(iii)(C)(3)(viii).

------------------------------------------------------------------------
                 PHLX bid                            PHLX offer
------------------------------------------------------------------------
A 30 at $1.05 (20 Legging Order).........  20 at $1.20.
B 30 at $1.05 (20 Legging Order).........  50 at $1.20.
------------------------------------------------------------------------

    Consider a scenario where the Exchange then received Complex Order 
2 to buy 20 contracts of A and sell 20 contracts of B for a net debit 
of $0.15. Complex Order 2 has more than one leg in common with Complex 
Order 1.

[[Page 57636]]

Complex Order 2 would need to execute against all 20 contracts of A 
Offered at $1.20 and 20 contracts of B at $1.05 (10 contracts against 
the $1.05 regular quote in B and 10 contracts against the Legging Order 
in B). However, when the 10 contracts of the Legging Order of B are 
executed at $1.05, an execution of 10 contracts of A at $1.20 must 
occur in order to satisfy Complex Order 1. There is now an issue 
because Complex Order 2 will have already executed all available 
contracts of A at $1.20 making it impossible for Complex Order 1 to be 
executed in accordance with the component strategy. To avoid this 
situation, the Legging Order in B to buy 20 for $1.05 which was 
generated by Complex Order 1 will be removed upon receipt of Complex 
Order 2. To illustrate the rule further, if the example above were 
revised such that Complex Order 2 is to sell 20 contracts of A and to 
sell 20 contracts of B for a net credit of $2.25, the system will 
cancel the Legging Orders in A and B and trade Complex Order 2 against 
Complex Order 1. In this particular scenario the system has Complex 
Order 1 on the book in the same strategy as Complex Order 2 which 
Complex Order 2 is marketable against. Upon receipt of Complex Order 2, 
the system will trade the order against the buy Complex Order. There is 
no need to trade with the Legging Orders.
    Similarly, a Legging Order will also be removed when a Complex 
Order becomes marketable against multiple Legging Orders.\28\ Legging 
Orders will be removed in this instance in order to minimize system 
complexities as well as to mitigate any risk of Complex Orders 
executing only certain components. For example, assume a Legging Order 
in A and a Legging Order in B represent two unique Complex Orders 
(Complex Order 1 and Complex Order 2 respectively) both reliant on the 
quoted market of another option, C, and a third Complex Order (Complex 
Order 3) arrived consisting of options A, B, and C. The execution of 
Complex Order 3 could result in the inability of Complex Orders 1 and 2 
to execute if Complex Order 3 executes against the interest in C, which 
Complex Orders 1 and 2 were also reliant upon. In order to mitigate any 
risk of Complex Orders executing only certain components, in both 
cases, the Exchange will remove the existing Legging Orders created by 
Complex Orders 1 and 2. Thereafter, if conditions change, new Legging 
Orders could be generated. To illustrate the application of the rule to 
a different scenario, assume the existence of Complex Order 1 to Buy A 
and Buy B, with a Legging Order generated in A, and Complex Order 2 to 
Buy C and Buy D, with a Legging Order generated in C. Assume the system 
then receives a marketable Complex Order 3 to Sell A and Sell C. Since 
Complex Order 3 is marketable against multiple Legging Orders (in A and 
C), the Legging Orders in both A and C are removed.
---------------------------------------------------------------------------

    \28\ See proposed Rule 1080.08(f)(iii)(C)(4)(ix).
---------------------------------------------------------------------------

    As noted above, the Exchange also proposes to remove Legging Orders 
from the limit order book if a Complex Order consisting of an unequal 
quantity of components is marketable against the cPBBO where a Legging 
Order is present but cannot be executed due to insufficient size in at 
least one of the components of the cPBBO.\29\ Since Complex Orders are 
accepted by the Exchange consisting of ratios of up to 3:1,\30\ a 
Complex Order may appear to be executable against the cPBBO but in fact 
cannot trade due to the ratio of the components of the strategy and the 
size available in each component in the cPBBO. In order to mitigate the 
risk of incoming Complex Orders appearing to be tradable against 
Legging Orders and to limit the complexity of the system in relation to 
Legging Orders, the Exchange proposes to remove Legging Orders from the 
limit order book if a Complex Order consisting of an unequal quantity 
of components is marketable against the cPBBO where a Legging Order is 
present but cannot be executed due to insufficient size in at least one 
of the components of the cPBBO. For example, assume the following 
example of a Complex Order (Complex Order 1) to buy 1 A and buy 1 B for 
$2.25 on the CBOOK which has generated Legging Orders,
---------------------------------------------------------------------------

    \29\ See proposed Rule 1080.08(f)(iii)(C)(4)(x).
    \30\ See Rule 1080.08(a)(ix).

------------------------------------------------------------------------
                 PHLX bid                            PHLX offer
------------------------------------------------------------------------
A 1 at $1.05 (Legging Order).............  20 at $1.20.
B 1 at $1.05 (Legging Order).............  20 at $1.20.
C 5 at $0.50.............................  5 at $0.60.
------------------------------------------------------------------------

    Assume a second Complex Order (Complex Order 2) arrives to sell 3 A 
and sell 1 C at a net price of $3.65. The limit price of $3.65 is 
marketable against the cPBBO bid of $3.65 ((3*$1.05)+$0.50). However, 
Complex Order 2 cannot be executed because the volume available at the 
cPBBO does not line up correctly with the ratio of the legs. Complex 
Order 2 requires the sale of 3 contracts of A for every sale of a 
contract in C. However, there is only one contract in A (the Legging 
Order bidding $1.05 for one contract) available. Since Complex Order 2 
cannot be executed, it will go onto the CBOOK. The Legging Order in A 
will be removed. In order to minimize the appearance that a Complex 
Order (in this example, Complex Order 2) is tradable against a Legging 
Order when in fact it is not tradable due to the ratio of the 
components of the Complex Order, the Exchange proposes to remove a 
Legging Order (in the example, the Legging Order to buy A associated 
with Complex Order 1) when another Complex Order consisting of an 
unequal quantity of components is marketable against the cPBBO where a 
Legging Order is present but cannot be executed due to insufficient 
size in at least one of the components of the cPBBO. The purpose of 
removing the Legging Order in this case is to minimize any possible 
misperception on the part of market participants that Complex Order 2 
is tradable against a Legging Order, when in fact it is not. 
Elimination of the Legging Order will thus mitigate possible investor 
confusion due to market participants' focus on price alone rather than 
price and size. In situations in which Complex Orders consisting of an 
unequal quantity of components are in fact tradable against Legging 
Orders, an execution will occur.
    Lastly, the Exchange proposes to remove Legging Orders from the 
limit order book when an incoming all-or-none order is entered onto the 
order book at a price which is equal to or crosses the price of a 
Legging Order.\31\ An all-or-none order received at a price which can 
be executed against PBBO interest, inclusive of Legging Orders, will 
execute against such interest. However, if an all-or-none order is 
received which cannot be executed due to the size of the all-or-none 
contingency, such all-or-none order will rest on the order book and 
cause any Legging Order which it crosses or is equal to in price to be 
removed. This removal eliminates the risk of the system having to 
handle and maintain Legging Orders which cross the order book.
---------------------------------------------------------------------------

    \31\ See proposed Rule 1080.08(f)(iii)(C)(4)(xi).
---------------------------------------------------------------------------

    To summarize, proposed Rule 1080.08(f)(iii)(C)(4) addresses when a 
Legging Order will be removed from the regular limit order book 
automatically, which results in the Legging Order no longer existing as 
such. In each case of removal, the system removes the Legging Order 
when one of the conditions in subparagraph (C)(4) occurs, which the 
system assesses continuously.

[[Page 57637]]

2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \32\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \33\ 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 increasing the opportunity for Complex Orders to receive 
an execution, while also enhancing execution quality for orders in the 
regular market.
---------------------------------------------------------------------------

    \32\ 15 U.S.C. 78f(b).
    \33\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    In particular, the Exchange believes that automatically generating 
Legging Orders, which will only be executed after all other executable 
interest at the same price (including non-displayed interest and 
quotes) is executed in full, will provide additional execution 
opportunities for Complex Orders, without negatively impacting any 
investors in the regular market. In fact, the generation of Legging 
Orders may enhance execution quality for investors in the regular 
market by improving the price and/or size of the PBBO and by providing 
additional execution opportunity for resting orders on the regular 
order book. The Exchange believes Legging Orders will provide market 
participants with another tool for adding trading interest on Phlx. 
Legging Orders may serve to increase liquidity to the extent market 
participants find Legging Orders result in better executions. This may 
result in more aggressive trading interest in the overall Phlx market, 
thereby perfecting the mechanism of a free and open market.
    The Exchange believes Legging Orders will increase opportunities 
for execution of Complex Orders, potentially increase executions of 
interest on the regular order book, and lead to tighter spreads and 
finer pricing on Phlx, which will benefit investors. Legging Orders may 
provide investors with opportunities to trade at better prices than 
would otherwise be available--possibly inside the otherwise existing 
PBBO in a leg series. The Exchange believes that the potential for 
investors to receive executions inside the otherwise existing PBBO 
could result in better executions for investors, thus making Legging 
Orders consistent with the Act.
    The Exchange also believes that the generation of Legging Orders is 
fully compliant with all regulatory requirements. In particular, 
Legging Orders are firm orders that will be displayed within the PBBO. 
A Legging Order will be automatically removed if it is no longer 
displayable at the PBBO, if the net price of the Complex Order can no 
longer be achieved, or in other limited situations which could cause 
normal trading to be adversely affected or unnecessary system 
complexities to arise.\34\ Moreover, to assure compliance with inter-
market rules,\35\ a Legging Order will not be generated at a price that 
would lock or cross another market. Finally, the generation of Legging 
Orders is limited in scope, as they may be generated only for Complex 
Orders with two legs. Additionally, the Exchange will closely manage 
and curtail the generation of Legging Orders if needed to assure that 
they do not negatively impact system capacity and performance.
---------------------------------------------------------------------------

    \34\ In particular, Legging Orders will be removed when a 
Complex Order is marketable against the cPBBO where a Legging Order 
is present and has more than one leg in common with the existing 
Complex Order that generated the Legging Order, as well as when a 
Complex Order becomes marketable against multiple Legging Orders. 
Elimination of Legging Orders in those instances should eliminate 
the operational difficulties that may otherwise result from those 
executions and the potential for those executions to interfere with 
the system and other trading. The Exchange notes that its existing 
rules contain provisions that prevent the execution of Complex 
Orders that might otherwise be executable. See, e.g., Rule 
1080.08(i), Acceptable Complex Execution (``ACE'') parameter. 
Legging Orders are not firm on Phlx with respect to other Complex 
Orders and will not trade against legs of other Complex Orders, 
which is consistent with the existing Complex Order execution 
provisions in Rule 1080.08 that do not allow execution of 
overlapping legs of Complex Orders. See also Securities and Exchange 
Act Release No. 69364 (April 11, 2013), 78 FR 22926 (April 17, 2013) 
(Notice of CBOE Filing of a Proposed Rule Change, as Modified by 
Amendment No. 1, Relating to Complex Orders), at footnote 25: ``Leg 
orders are thus not firm with respect to other complex orders and 
will not trade against legs of other complex orders, which is 
consistent with the existing complex order execution provisions in 
Rule 6.53C that do not allow execution of overlapping legs of 
complex orders.''
    \35\ See, e.g., Phlx Rule 1084, Order Protection.
---------------------------------------------------------------------------

    Furthermore, the Exchange notes that its proposed rule change is 
similar to International Securities Exchange LLC's (``ISE's'') 
previously approved Legging Orders, as well as certain aspects of the 
Chicago Board Options Exchange (``CBOE'') and BOX Options Exchange LLC 
(``BOX'') rules, which the Commission has previously found to be 
consistent with the Act. In most respects, the proposal is similar to 
ISE Rules 715(k) and 722(b)(3)(ii). However, the Exchange proposes to 
handle its proposed Legging Orders the same way that BOX does 
respecting: (i) Orders that are generated in an increment other than 
the minimum increment allowable for that series,\36\ and (ii) executing 
Complex Orders outside a certain price.\37\ The Exchange believes that 
its application of its ACE Parameter to both generating and removing 
Legging Orders is akin to BOX's NBBO protection, but does not believe 
that this is a material difference because the Exchange believes that 
users would expect an exchange's normal price protections to apply to 
its execution of Complex Orders, regardless of the particular 
circumstance that caused the execution. Moreover, the ACE parameter is 
a protection intended to benefit users submitting Complex Orders.
---------------------------------------------------------------------------

    \36\ See BOX Rule 7240(c)(1). Specifically, BOX will price and 
rank a Legging Order at its generated price to buy (sell) but it 
will be displayed at the minimum trading increment permitted for the 
series below (above) its price. If an incoming order is executable 
against such Legging Order, it will be executed at the Legging 
Order's generated price.
    \37\ BOX does not permit Complex Order executions outside the 
NBBO for the Complex Order, which is akin to the Exchange applying 
its ACE parameter. See BOX Rule 7130(b) and (c).
---------------------------------------------------------------------------

    In addition, the Exchange proposes to handle the following aspects 
of Legging Orders in the same manner as CBOE: \38\ (i) The Exchange 
will not generate Legging Orders with an all-or-none contingency; \39\ 
(ii) the Exchange will not generate a Legging Order unless the other 
leg can be executed against the PBBO without regard to another Legging 
Order; \40\ (iii) the Exchange will periodically evaluate whether a 
Legging Order should be generated or removed; \41\ and (iv) when a 
Legging Order is executed, the other leg is executed against the PBBO 
and the second Legging Order, if generated, of the Complex Order 
represented by the executed Legging Order is removed.\42\
---------------------------------------------------------------------------

    \38\ The Exchange cannot discern from ISE's rules how these 
particular aspects are specifically handled.
    \39\ See CBOE Rule 6.53(x).
    \40\ See CBOE Rule 6.53C(c)(iv)(1)(A) referring to ``other than 
leg orders.''
    \41\ See CBOE Rule 6.53C(c)(iv)(1). The evaluation methodologies 
differ somewhat. CBOE's evaluation occurs ``when a Complex Order 
enters the COB, when the Exchange BBO changes and at a regular time 
interval to be determined by the Exchange (which interval shall not 
exceed one (1) second . . . (emphasis added)''. Phlx, however, will 
evaluate ``when a Complex Order enters the CBOOK and at a regular 
time interval, to be determined by the Exchange (which interval 
shall not exceed 1 second) following a change in the NBBO or PBBO in 
any component of a Complex Order eligible to generate Legging Orders 
. . .''. Phlx's evaluation methodology avoids complexities 
associated with evaluation of flickering quotes while still updating 
Legging Orders regularly to provide liquidity to the market.
    \42\ See CBOE Rule 6.53C(c)(iv)(2)(B).
---------------------------------------------------------------------------

    Certain aspects of the Exchange's proposal potentially differ from 
the rules of other options exchanges in a few minor ways, but these 
differences are not material. First, if a Legging Order

[[Page 57638]]

would otherwise be generated, the Exchange will not do so if there is 
an auction on the either side in progress in the series. The Exchange 
will also remove existing Legging Orders when an order arrives that 
will trigger an auction in a component in which there is a Legging 
Order (whether a buy order or a sell order), or upon receipt of a QCC 
Order which includes a component in which there is a Legging Order.\43\ 
The Exchange does not believe the way in which removal or generation of 
Legging Orders is affected by auctions is a material difference, 
because the Exchange does not believe that there is one particular 
expectation on the part of market participants about how orders like 
Legging Orders should co-exist with auctions. Further, there are 
certain system complexities associated with having to coordinate 
Legging Orders with an ongoing auction or complex execution.\44\ The 
Exchange believes it will be simpler from both a system processing and 
user acceptance standpoint to wait for an auction in that series to be 
complete or a QCC Order to be executed, which is a minimal amount of 
time.
---------------------------------------------------------------------------

    \43\ Auctions include a COLA as well as a PIXL auction.
    \44\ CBOE, on the other hand, considers which side of the market 
is affected when an auction could impact one of its legging orders. 
See CBOE Rule 6.53C.07.
---------------------------------------------------------------------------

    In addition, the Exchange will not generate a Legging Order if 
there is already a Legging Order in that series on the same side of the 
market at the same price unless it has priority based on the 
participant type under existing Exchange rules. Likewise, a Legging 
Order will be automatically removed if a Legging Order is generated by 
a different Complex Order in the same leg at a better price or the same 
price for a participant with a higher priority. The Exchange does not 
believe that this is a material difference, because this behavior 
serves to ensure that the priority rules relating to resting Complex 
Orders are maintained.\45\ The Exchange will also remove the Legging 
Order when (1) a Complex Order is marketable against the cPBBO where a 
Legging Order is present and has more than one leg in common with the 
existing Complex Order that generated a Legging Order or (2) if a 
Complex Order becomes marketable against multiple Legging Orders. 
Moreover, pursuant to proposed Rule 1080.08(f)(iii)(C)(2)(vi), no 
Legging Orders will be created for a Complex Order if the Complex Order 
will immediately cause existing Legging Orders to be removed under Rule 
1080.08(f)(iii)(C)(4)(ix)--i.e., because the Complex Order has become 
marketable against multiple Legging Orders. The Exchange does not 
believe that this is a material difference, because the situation of 
overlapping Legging Orders and Legging Order dependencies on other 
components has to be addressed and the Exchange believes its approach 
is reasonable.\46\
---------------------------------------------------------------------------

    \45\ CBOE addresses priority in its Rule 6.53C(c)(iv)(2)(A).
    \46\ CBOE takes into account the size of an order. See CBOE Rule 
6.53C(c)(iv)(3)(A).
---------------------------------------------------------------------------

    The Exchange will remove a Legging Order when a Complex Order 
consisting of components of unequal quantities is marketable against 
the cPBBO where a Legging Order is present but cannot be executed due 
to insufficient size in at least one of the components of the cPBBO. 
The Exchange does not believe that this is a material difference, 
because this behavior serves to minimize occurrences where there may be 
the appearance of potential execution when in fact, there is no 
potential execution due to the ratio of the components. Lastly, the 
Exchange proposes to remove Legging Orders from the limit order book 
when an incoming all-or-none order is entered onto the order book at a 
price which is equal to or crosses the price of a Legging Order. This 
removal eliminates the risk of the system having to handle and maintain 
Legging Orders which cross the order book, thereby eliminating 
unnecessary system complexity to the benefit of investors.
    In conclusion, the Exchange believes that its proposed rules are 
similar to rules of other exchanges that the Commission has already 
determined to be consistent with the Act and in the public interest, 
with any differences raising no new regulatory issues.

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. To the contrary, the proposal 
is pro-competitive. The proposal will permit the Exchange to compete 
against other options exchanges with similar functionality, such as 
BOX, CBOE and ISE.\47\ The Exchange believes the proposed rule change 
could result in improved liquidity, finer pricing, better executions 
and increased competition within its Complex Order market to the 
benefit of the Exchange and market participants and thus allow the 
Exchange to better compete with other options exchanges for Complex 
Order flow. The Exchange also believes Legging Orders may facilitate 
additional executions and enhance execution quality for investors in 
the regular market by improving the price and/or size of the PBBO and 
by providing additional execution opportunities for resting orders on 
the regular order book. Within the Exchange's market for Complex 
Orders, the Legging Order functionality will be available to all 
participants who participate in the Complex Orders system. All market 
participants have the option to send their Complex Orders to Phlx in 
order to take advantage of this order type.
---------------------------------------------------------------------------

    \47\ See ISE Rules 715(k) and 722(b)(3)(ii), BOX Rule 7240(c) 
and CBOE Rule 6.53C(c)(iv).
---------------------------------------------------------------------------

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 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-2014-54 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-2014-54. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your

[[Page 57639]]

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-2014-54, and should be submitted on or before 
October 16, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\48\
---------------------------------------------------------------------------

    \48\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-22789 Filed 9-24-14; 8:45 am]
BILLING CODE 8011-01-P