[Federal Register Volume 85, Number 128 (Thursday, July 2, 2020)]
[Notices]
[Pages 39964-39966]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-14231]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-89164; File No. SR-Phlx-2020-31]
Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Modify the
Implementation Date of the Proposed Rule Change To Amend Exchange Rules
3301A and 3301B
June 26, 2020.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on June 17, 2020, Nasdaq PHLX LLC (``Phlx'' or ``Exchange'') filed with
the Securities and Exchange Commission (``Commission'') the proposed
rule change as described in Items I and II below, which Items have been
prepared by the Exchange. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to modify the operative date of SR-Phlx-2020-
15, which proposed to amend Exchange Rules 3301A and 3301B.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the
[[Page 39965]]
places specified in Item IV below. The Exchange has prepared summaries,
set forth in sections A, B, and C below, of the most significant
aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
On March 26, 2020, the Exchange filed with the Commission a rule
change to amend Exchange Rule 3301A and Rule 3301B to modify the
behavior of Order Types and Order Attributes in certain situations.\3\
The proposed rule change indicated that the implementation date of the
modifications would be on or before the end of the Second Quarter of
2020.\4\ The Exchange proposes to modify the operative date and delay
the implementation of the modifications until on or before the end of
the Third Quarter of 2020. The Exchange will announce the new
implementation date by an Equity Trader Alert, which shall be issued
prior to the implementation date.
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\3\ See Securities Exchange Act Release No. 88583 (April 7,
2020), 85 FR 20533 (April 13, 2020) (SR-Phlx-2020-15).
\4\ See id. at 20540.
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Due to the recent market volatility resulting from the novel
coronavirus pandemic, the Exchange has been adjusting its systems
testing schedule and assessing any risks to the operation of its
systems that could potentially be introduced by implementing new
functionalities during this time. The extension would therefore provide
the Exchange with flexibility and additional time to adjust its systems
testing schedule, and to develop and test the new functionalities, to
safeguard against any such risk. Furthermore, the extension would allow
the Exchange to implement the Order Type and Order Attribute
modifications after the Russell Rebalance, a significant market event
occurring in June 2020, and for which the Exchange will reduce the
number of changes to its systems. The Exchange has historically limited
rolling out new functionality before the Russell Rebalance to mitigate
the operational risk of introducing technology changes before this
significant market event.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\5\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\6\ in particular, in that it is designed to promote
just and equitable principles of trade, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general to protect investors and the public interest by
providing the Exchange additional time to implement SR-Phlx-2020-15. As
discussed above, the proposed delay is in recognition of both the
recent market volatility and upcoming annual Russell Rebalance in June
2020. The Exchange believes that the extension would therefore allow
the Exchange to mitigate any potential risks to the market and the
operation of its systems by limiting the implementation of new
functionality until after the Russell Rebalance, which, in turn,
protects investors and the public interest.
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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange's proposal to
delay the implementation of SR-Phlx-2020-15 does not impose an undue
burden on competition. Delaying the implementation will simply allow
the Exchange additional time to properly plan and implement SR-Phlx-
2020-15.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \7\ and Rule 19b-
4(f)(6) thereunder.\8\
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\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \9\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \10\ permits the
Commission to designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has requested that the Commission waive the 30-day operative delay. The
Exchange states that the proposed implementation delay is in
recognition of both the recent market volatility and upcoming annual
Russell Rebalance in June 2020, and would allow the Exchange to
mitigate any potential risks to the market and the operation of its
systems by limiting the implementation of new functionality until after
the Russell Rebalance. According to the Exchange, waiver of the
operative delay would allow the Exchange to provide prior notice of the
implementation delay by July 1, 2020. The Commission believes that
waiver of the 30-day operative delay is consistent with the protection
of investors and the public interest. Therefore, the Commission hereby
waives the 30-day operative delay and designates the proposed rule
change operative upon filing.\11\
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\9\ 17 CFR 240.19b-4(f)(6).
\10\ 17 CFR 240.19b-4(f)(6)(iii).
\11\ For purposes only of waiving the 30-day operative delay,
the Commission also has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-Phlx-2020-31 on the subject line.
[[Page 39966]]
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-Phlx-2020-31. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-Phlx-2020-31, and should be submitted on
or before July 23, 2020.
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\12\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-14231 Filed 7-1-20; 8:45 am]
BILLING CODE 8011-01-P