[Federal Register Volume 84, Number 131 (Tuesday, July 9, 2019)]
[Notices]
[Pages 32794-32802]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-14494]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-86286; File No. SR-Phlx-2019-25]


Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend Rule 1019, 
Adopt a New Rule 1073, Adopt a New Rule 1074, Rule 1080, Adopt a New 
Rule 1096, and Adopt a New Rule 1097

July 2, 2019.
    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 20, 2019, Nasdaq 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.
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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 a proposal to amend Rule 1019, 
``Acceptance of Bid and Offer,'' adopt a new Rule 1073, ``Kill 
Switch,'' adopt a new Rule 1074 ``Detection of Loss of Communication,'' 
Rule 1080, ``Electronic Acceptance of Quotes and Orders,'' adopt a new 
Rule 1096, ``Entry and Display of Orders'' and adopt a new Rule 1097, 
``Limitations on Order Entry.''
    The text of the proposed rule change is available on the Exchange's 
website at http://nasdaqphlx.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.

[[Page 32795]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes several amendments within this rule change: 
(i) Amend Rule 1019, ``Acceptance of Bid and Offer''; (ii) adopt a new 
Rule 1073, ``Kill Switch,'' and Rule 1074 ``Detection of Loss of 
Communication,'' from relocated rule text from Rule 1080, ``Electronic 
Acceptance of Quotes and Orders,''; (iii) adopt a new Rule 1096, 
``Entry and Display of Orders''; and (iv) adopt a new Rule 1097, 
``Limitations on Order Entry.'' With this proposal, the Exchange 
intends to create a rule that concerns the requirements for submitting 
a quote and a separate rule that concerns the requirements for 
submitting an order. The Exchange also is proposing to relocate rules 
to reorganize its Rulebook and conform certain rule text within Rule 
1097 to rules of other Nasdaq markets.\3\
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    \3\ The Exchange intends to file a separate rule change for each 
Nasdaq market to amend rules as described herein.
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Rule 1019, Acceptance of Bid or Offer
    Currently, Rule 1019 is titled ``Acceptance of Bid or Offer.'' The 
Exchange proposes to retitle Rule 1019 as ``Entry and Display of 
Quotes.'' The Exchange proposes to amend Rule 1019(a) to revise the 
text of (a) from ``All bids or offers for option contracts dealt in on 
the Exchange made and accepted in accordance with these Rules shall 
constitute binding contracts between the parties thereto but shall be 
subjected to the exercise by the Board of Directors of the powers in 
respect thereto vested in said Board by the By-Laws, and to the Rules 
of the Exchange, and said contracts shall also be subject to the rules 
of The Options Clearing Corporation and to the exercise by The Options 
Clearing Corporation of the powers reserved to it in its by-laws and 
rules'' to more simply ``All bids or offers for option contracts dealt 
in on the Exchange made and accepted in accordance with these Rules 
shall constitute binding contracts between the parties thereto but 
shall be subjected to applicable requirements and the rules of the 
Clearing Corporation. The Exchange is proposing to removing the 
requirement for the Board of Directors to Act and retain the 
applicability of the rules of the Clearing Corporation.
    The Exchange proposes to add a new Rule 1019(b) to describe the 
current requirements and conditions for submitting quotes. These 
requirements reflect the current System operation today. The Exchange 
proposes to memorialize the various requirements for the submission of 
quotes into the System for greater transparency. The Exchange proposes 
to provide at new Rule 1019(b), ``Quotes are subject to the following 
requirements and conditions:''. The Exchange proposes to add at Rule 
1019(b)(1) that ``RSQTs or Remote Specialists may generate and submit 
option quotations.'' Current Rule 1080(k) provides,

    Electronic Streaming Quotations. SQTs may generate and submit 
option quotations if such SQT is physically present on the Exchange 
floor, and RSQTs may generate and submit option quotations from off 
the floor of the Exchange, electronically.
    Respecting options trading on Phlx XL II, specialists, SQTs and 
RSQTs who are quoting in an option may also submit Sweeps, which are 
defined in and governed by Rule 1082.

    The Exchange proposes removing this rule text within Rule 1080(k) 
and memorializing the quoting requirements within Rule 1019. The first 
paragraph within Rule 1080(k) describes SQTs and RSQTs that stream 
quotations. These participants are currently defined within Rule 
1014(b). This language in the first paragraph of Rule 1080(k) is 
redundant and unnecessary. The second paragraph of Rule 1080(k) 
references Sweeps within Phlx Rule 1082, ``Firm Quotations,'' which 
describes sweeps within that rule in relation to Quote Exhaust. The 
Exchange proposes to provide at proposed new Rule 1019(b)(2) that ``The 
System shall time-stamp a quote which shall determine the time ranking 
of the quote for purposes of processing the quote.'' The Exchange notes 
that all quotes today are time-stamped for purposes of processing 
quotes. Proposed Rule 1019(b)(3) states that ``Specialists, Remote 
Specialists and ROTs may enter bids and/or offers in the form of a two-
sided quote. Only one quote may be submitted at a time for an option 
series.'' The Exchange believes that this information will provide 
Specialists, Remote Specialists and ROTs with information on submitting 
a quote. The Exchange notes that bid or offer size may be a ``0,'' 
however a price is required to be entered for both the bid and offer to 
be entered into the System. Further, the Exchange proposes at Rule 
1019(b)(4) to provide clarity for entering quotes and proposes to 
specify, ``The System accepts quotes for the Opening Process as 
specified in Rule 1017.'' \4\ The Exchange believes that this 
information will bring greater transparency to the Rulebook with 
respect to limitations for submitting quotations into the System.
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    \4\ Rule 1017(d) provides, ``Phlx Electronic Market Maker Valid 
Width Quotes and Opening Sweeps received starting at 9:25 a.m. are 
included in the Opening Process. Orders entered at any time before 
an option series opens are included in the Opening Process.''
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    The Exchange proposes a provision regarding firm quote within 
proposed Rule 1019(b)(5):

    Firm Quote. When quotes in options on another market or markets 
are subject to relief from the firm quote requirement set forth in 
the SEC Quote Rule,\5\ orders and quotes will receive an automatic 
execution at or better than the NBBO based on the best bid or offer 
in markets whose quotes are not subject to such relief. Such 
determination may be made by way of notification from another market 
that its quotes are not firm or are unreliable; administrative 
message from the Option Price Reporting Authority (``OPRA''); quotes 
received from another market designated as ``not firm'' using the 
appropriate indicator; and/or telephonic or electronic inquiry to, 
and verification from, another market that its quotes are not firm. 
The Exchange shall maintain a record of each instance in which 
another exchange's quotes are excluded from the Exchange's 
calculation of NBBO, and shall notify such other exchange that its 
quotes have been so excluded. Where quotes in options on another 
market or markets previously subject to relief from the firm quote 
requirement set forth in the Quote Rule are no longer subject to 
such relief, such quotations will be included in the calculation of 
NBBO for such options. Such determination may be made by way of 
notification from another market that its quotes are firm; 
administrative message from OPRA; and/or telephonic or electronic 
inquiry to, and verification from, another market that its quotes 
are firm.

    \5\ The term ``SEC Quote rule'' shall mean rule 602 of 
Regulation NMS under the Securities Exchange Act of 1934, as 
amended. See Phlx Rule 1082(a)(iii).

    Phlx Rule 1082 describes Firm Quote for purposes of quote 
submission. The Exchange proposes to memorialize within its Rules the 
requirement for the dissemination of quotations pursuant to Reg NMS.\6\ 
The Exchange is proposing to add the above rule text to provide context 
as to this restriction for submitting quotes. The Exchange proposes to 
make clear the manner in which quote relief will occur. Specifically, 
this proposed rule text indicates the manner in which a determination 
for quote relief is made. Further, the rule notes the Exchange shall 
maintain a record of each instance in which another exchange's quotes 
are excluded from the Exchange's calculation of NBBO, and shall notify 
such other exchange that its quotes have been so excluded. Also, when 
relief is no longer available, such quotations will be included in the 
calculation of NBBO for such options. The Exchange notes

[[Page 32796]]

how the determination is made that relief is no longer available. The 
proposed rule text adds greater context to the manner in which Firm 
Quote relief is applied. This rule text represents the current 
practice.
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    \6\ 17 CFR 242.602.
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    Similarly, the Exchange proposes to provide the following at 
proposed new Rule 1019(b)(6):

    Trade-Through Compliance and Locked or Crossed Markets. A quote 
will not be executed at a price that trades through another market 
or displayed at a price that would lock or cross another market. If, 
at the time of entry, a quote would cause a locked or crossed market 
violation or would cause a trade-through violation, it will be re-
priced to the current national best offer (for bids) or the current 
national best bid (for offers) and displayed at one minimum price 
variance above (for offers) or below (for bids) the national best 
price.

    Today, quotations may not be executed against prices that trade-
through an away market as provided for in the Options Order Protection 
and Locked/Crossed Market Plan which is also described within Phlx 
Rules 1083, 1084 and 1086. Also, quotations may not lock or cross an 
away market. The repricing is provided for today within Phlx Rule 
1093.\7\ By stating this limitation in the rule, Specialists and ROTs 
will have greater clarity as to this limitation. Further, the Exchange 
is making clear that a quote that would cause a locked or crossed 
market violation or would cause a trade-through violation will be re-
priced. The Exchange would display the quote at one minimum price 
variation (``MPV'') above (for offers) or below (for bids) the national 
best price. Repricing quotes is consistent with the Act because the 
Exchange is not permitted to lock or cross an away market's quote or 
order. The Exchange reprices the quotes one MPV inferior to cause the 
displayed price to reflect the available market on Phlx.
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    \7\ Phlx Rule 1093(a)(iii)(A) provides that a DNR Order may 
execute on the Exchange at a price equal to or better than, but not 
inferior to, the best away market price but, if that best away 
market remains, the DNR Order will remain in the Phlx Order Book and 
be displayed at a price one minimum price variation (``MPV'') 
inferior to that away best bid/offer. If the DNR Order is locking or 
crossing the ABBO, the DNR Order shall be entered into the Order 
Book at the ABBO price and displayed one MPV away from the ABBO. 
Similar language is provided for with respect to the routable orders 
(FIND and SRCH). Phlx Rule 1093(a)(iii)(B)(4) provides ``A FIND 
Order received after an Opening Process that is marketable against 
the internal PBBO when the ABBO is inferior to the internal PBBO 
will be traded at the Exchange at or better than the PBBO price. If 
the FIND Order has size remaining after exhausting the PBBO, it may: 
(1) Trade at the next PBBO price (or prices) if the order price is 
locking or crossing that price (or prices) up to and including the 
ABBO price, (2) be entered into the Order Book at its limit price, 
or (3) if locking or crossing the ABBO, be entered into the Order 
Book at the ABBO price and displayed one MPV away from the ABBO.'' 
This is also the case for a SRCH Order. See Phlx Rule 
1093(a)(iii)(C)(4).
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    Finally, the Exchange proposes at Rule 1019(b)(7) to provide, 
``Quotes submitted to the System are subject to the following: minimum 
increments provided for in Rule 1034, risk protections provided for in 
Rule 1099 and Quote Exhaust provided for in Rule 1082.'' The Exchange 
is noting herein the manner in which a quote may be rejected by the 
System to provide market participants with expectations as to the 
interplay among the various Phlx Rules. Specifically, if the Specialist 
or ROT does not submit a quotation compliant with Rule 1034, the quote 
will not be accepted by the System because market participants are 
required to abide by Rule 1034 which describes the increments with 
which options series are to be quoted. Rule 1099 provides a list of all 
protections applicable to quotes that may be rejected. Finally, 
Specialists and ROTs are subject to the Exchange's rule regarding quote 
exhaust within Rule 1082(a)(ii)(B)(3). The Exchange believes that this 
rule will provide Members with requirements and conditions for 
submitting quotations and provide transparency as to limitations that 
cause a quote to be rejected.
    The Exchange proposes to provide at Rule 1019(c), ``Quotes will be 
displayed in the System as described in Rule 1070.'' Rule 1070, titled 
``Data Fees and Trade Information'' provides for the available feeds 
that Members may access on the Exchange. This list represents the 
available data feeds and the content of those data feeds which are 
offered today by Phlx.
    The amendment to Phlx Rule 1019 to create a list of all the 
requirements and conditions for submitting quotes on Phlx within one 
rule is consistent with the Act because it will provide greater 
transparency to market participants of the applicable requirements. 
Further, this proposal will make the current rule clear and 
understandable for market participants thereby protecting investors and 
the general public. The Exchange notes that while some of these 
requirements appear in other rules, for ease of reference the 
requirements are located within a single rule with this proposal. The 
proposal reflects the Exchange's current practice with respect to 
quoting requirements. This proposal will conform this Rule to other 
Nasdaq affiliated markets filing similar rules.\8\ The Exchange's 
proposal is intended to provide greater information with respect to 
Firm Quote within new Rule 1019(b)(5) and regarding trade-through and 
locked and crossed markets 1019(b)(6). The addition rule text is 
consistent with the Act because the Exchange is adding detail regarding 
the method in which orders which are firm or locked and crossed will be 
handled in the System. The notifications for Firm Quote are made clear 
with the proposed rule text. The Exchange believes that it is 
consistent with the Act to specify when quotes are firm and the 
handling of such quotes by the System for the protection of investors 
and the general public. The clarity is designed to promote just and 
equitable principles of trade by notifying all participants engaged in 
market making of potential outcomes. Today, quotations may not be 
executed against at prices that trade-through an away market. Also, 
quotations may not lock or cross an away market. The repricing of 
quotations is consistent with the Act because repricing prevents the 
Exchange from disseminating a price which locks or crosses another 
market. Phlx is required avoiding displaying a quotation that would 
lock or cross a quotation of another market center at the time it is 
displayed. Preventing inferior prices from displaying perfects the 
mechanism of a free and open market and a national market system, and, 
in general to protect investors and the public interest.
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    \8\ Nasdaq ISE, LLC, Nasdaq GEMX, LLC, Nasdaq MRX, LLC, Nasdaq 
BX, Inc. and Nasdaq Stock Market LLC intend to file similar rules to 
proposed Phlx Rule 1019.
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Relocation of Kill Switch and Detection of Loss of Communication
    The Exchange also proposes to relocate the rule text at Rule 
1019(b), Kill Switch, and (c), Detection of Loss of Communication, to 
new Rules 1073 and 1074, respectively. The relocations are consistent 
with the Act because the proposed changes are intended to provide 
greater transparency to these rules by making them easier to locate 
which benefits investors and the public interest. The Exchange is not 
proposing to amend the Kill Switch or Detection of Loss of 
Communication rules; this rule change is non-substantive. The Exchange 
proposes to update internal cross-references.
Rule 1080, Electronic Acceptance of Quotes and Orders
    The Exchange proposes to amend Rule 1080(a)(i)(B) to add the 
following sentence to Specialized Quote Feed (``SQF''), ``Specialists, 
SQTs and RSQTs may only enter interest into SQF in their

[[Page 32797]]

assigned options series.'' The Exchange notes that today these 
participants may utilize SQF to quote only in their assigned options 
series.\9\ This proposed rule text is consistent with the Act because 
it will add greater clarity to the current rule for the protection of 
investors and the public interest.
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    \9\ Rules 501, ``Specialist Appointment'' and 507 ``Application 
for Approval as an SQT, RSQT, or RSQTO and Assignment in Options'' 
govern option assignments.
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    The Exchange proposes to delete certain rule text within Rule 
1080(c)(ii)(C) and 1080(j) and relocate that language to new Rule 1097, 
as described below.
    The Exchange also proposes to delete Rule 1080(k), as discussed 
above, and Rule 1080(l) which is currently reserved. These proposed 
amendments are consistent with the Act because they are simply 
administrative and non-substantive.
Rule 1096, Entry and Display of Orders
    Similar to Rule 1019, which describes requirements for quotes, the 
Exchange proposes to adopt a new Rule 1096, ``Entry and Display of 
Orders'' and describe the current requirements and conditions for 
entering orders. The Exchange notes that the requirements provided for 
within this rule represent the current practice. The purpose of Rule 
1096 is to memorialize this information within a single rule.
    The Exchange proposes to state within new Rule 1096(a), ``Members 
can enter orders into the System, subject to the following requirements 
and conditions:''. The Exchange proposes within new Rule 1096(a)(1), 
``Members shall be permitted to transmit to the System multiple orders 
at a single as well as multiple price levels.'' The Exchange's new rule 
text at 1096(a) proposes to make clear that multiple orders may be 
transmitted to the System as single or multiple price levels. This is 
the case today. The Exchange proposes to memorialize the manner in 
which orders may be submitted to the System to add more detail to its 
rules. The Exchange proposes at new Rule 1096(a)(2), ``The System 
accepts orders beginning at a time specified by the Exchange and 
communicated on the Exchange's website.'' The System accepts orders 
beginning at a time specified by the Exchange and communicated on the 
Exchange's website.\10\
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    \10\ The Exchange's website makes the timeframes in which orders 
may be submitted to the System: http://www.nasdaqtrader.com/content/phlx/phlx_systemtime.pdf.
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    The Exchange proposes new Rule 1096(a)(3), ``The System shall time-
stamp an order which shall determine the time ranking of the order for 
purposes of processing the order.'' Further, all orders are time-
stamped to determine the time ranking of the order for purposes of 
processing the order within the System. This is also the case today and 
the Exchange is adding this detail to its rules to describe the time-
stamp.
    The Exchange proposes to add new Rule 1096(a)(4), ``Orders 
submitted to the System are subject to the following: minimum 
increments provided for in Rule 1034, risk protections provided for in 
Rule 1099, and the restrictions of any order type as provided for in 
Rule 1080(b). Orders may execute at multiple prices.'' All orders must 
adhere to other rule requirements such as minimum increments, risk 
protection rules and order types. Similar to the rule text for quotes, 
order are currently subject the minimum increment requirements in Rule 
1034 and also the risk protections for orders which are listed within 
current Rule 1099. This rule provides a list of other requirements 
which may impact the execution of an order. Finally, orders may execute 
at multiple prices.
    The Exchange proposes to add new Rule 1096(a)(5) the following, 
``Nullification by Mutual Agreement. Trades may be nullified if all 
parties participating in the trade agree to the nullification. In such 
case, one party must notify the Exchange and the Exchange promptly will 
disseminate the nullification to OPRA. It is considered conduct 
inconsistent with just and equitable principles of trade for a party to 
use the mutual adjustment process to circumvent any applicable Exchange 
rule, the Act or any of the rules and regulations thereunder.'' The 
rule text of new Rule 1096(a)(5) is similar to Nasdaq ISE, LLC 
(``ISE'') Options 3, Section 4(b). Trades may be nullified today by 
agreement of the parties. The Exchange believes that it is consistent 
with the Act to permit parties to agree to a nullification provided the 
nullification does not violate other exchange rules. The Exchange notes 
that parties may not agree to a mutual agreement for purposes that 
would cause another rule to be violated. The Exchange believes that it 
is consistent with the Act and protection of investors and general 
public to make clear the expected behavior with respect to 
nullifications.
    Proposed Rule 1096(b) is similar to ISE Options 3, Section 15(a). 
This proposed rule provides,

    NBBO Price Protection. Orders, other than Intermarket Sweep 
Orders (as defined in Rule 1083(h)), will not be automatically 
executed by the System at prices inferior to the NBBO (as defined in 
Rule 1083(j)). There is no NBBO price protection with respect to any 
other market whose quotations are Non-Firm (as defined in Rule 
1083(k)).

    The Exchange believes that although Phlx Rule 1084 \11\ makes clear 
that simple orders may not execute at prices inferior to the NBBO, this 
rule text will provide that limitation in this proposed list of 
limitations for ease of reference. The Exchange notes that this NBBO 
Protection applies to orders and therefore is being discussed within 
proposed Rule 1096, which applies to all market participants. In 
contrast, Rule 1019, which applies to quotes entered by those members 
that conduct market marking, Specialists and ROTs, describes the Firm 
Quote protections and the interplay of NBBO with respect to quotes. 
Trade-Through is described in both Rules 1019 and 1096.
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    \11\ Phlx Rule 1084 describes the avoidance of trade-through and 
Rule 1083(h) described ISOs.
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    Proposed Rule 1096(c) seeks to define the Exchange's best bid and 
offer as the ``PBBO'' and distinguish the displayed book from the non-
displayed book for reference. The Exchange provides that the System 
automatically executes eligible orders using the Exchange's displayed 
best bid and offer (``PBBO''). Phlx also permits members to enter non-
displayed orders. The non-displayed orders are available on the 
Exchange's order book (``internal PBBO''). The Phlx contingency orders, 
which are non-displayed are exclusively: (i) All-or-None Orders; \12\ 
and (ii) stop orders \13\ (collectively ``Non-Displayed Contingency 
Orders''). Finally, Phlx reprices orders to avoid locking or crossing 
another market as explained below. Therefore, on Phlx, eligible orders 
will execute at the best price available, the PBBO or the internal 
PBBO. The Exchange believes that this information will provide Members 
with additional information to how the Exchange describes its displayed 
and non-displayed orders. Further the proposal to add information 
related to NBBO Protection and define the Exchange's best bid and offer 
as the

[[Page 32798]]

``PBBO'' and distinguish the displayed book from the non-displayed book 
for reference will bring greater transparency and clarity to the 
Exchange's rules. The Exchange disseminates its PBBO which does not 
contain non-displayed information. The Exchange believes that 
describing the ``internal PBBO'' will bring greater transparency to the 
rule as the Order Book may contain non-displayed orders which may offer 
better prices than the PBBO. The Exchange believes describing the 
displayed and non-displayed order book will inform members as to 
availability of orders on the Order Book and protect investors and the 
general public by providing additional information about non-displayed 
order types.
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    \12\ An All-or-None Order is a limit or market order that is to 
be executed in its entirety or not at all. An All-or None Order may 
only be submitted by a public customer. All-or-None Orders are non-
displayed and non-routable. All-or-None Orders are executed in 
price-time priority among all public customer orders if the size 
contingency can be met. The Acceptable Trade Range protection in 
Rule 1099(a) is not applied to All-Or-None Orders. See Phlx Rule 
1078.
    \13\ A stop order is a limit or market order to buy or sell at a 
limit price when a trade or quote on the Exchange for a particular 
option contract reaches a specified price. A stop-market or stop-
limit order shall not be triggered by a trade that is reported late 
or out of sequence or by a complex order trading with another 
complex order. See Phlx Rule 1080(b).
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    Similar to Rule 1019(b)(6), the Exchange proposes to note at new 
Rule 1096(d),

    Trade-Through Compliance and Locked or Crossed Markets. An order 
will not be executed at a price that trades through another market 
or displayed at a price that would lock or cross another market. An 
order that is designated by the member as routable will be routed in 
compliance with applicable Trade-Through and Locked and Crossed 
Markets restrictions. An order that is designated by a member as 
non-routable will be re-priced in order to comply with applicable 
Trade-Through and Locked and Crossed Markets restrictions. If, at 
the time of entry, an order that the entering party has elected not 
to make eligible for routing would cause a locked or crossed market 
violation or would cause a trade-through violation, it will be re-
priced to the current national best offer (for bids) or the current 
national best bid (for offers) and displayed at one minimum price 
variance above (for offers) or below (for bids) the national best 
price.

    Today, orders may not be executed at a price that trades through an 
away market. Also, orders may not lock or cross an away market. 
Routable orders must comply with Trade-Through and Locked and Crossed 
Markets restrictions. The Exchange reprices orders that are non-
routable. The Exchange proposes to make clear the manner in which 
orders are repriced on the order book. This repricing is described 
today within Rule 1093(a)(iii)(A), (B) and (C) which describes routing. 
This rule text is similar to rule text within BX Chapter VI, Section 
7(b)(3)(C). Today, orders may not be executed at prices that trades 
through an away market. Also, orders may not lock or cross an away 
market. Routable orders must comply with Trade-Through and Locked and 
Crossed Markets restrictions within Phlx Rule 1084. The Exchange 
reprices orders that are non-routable. The Exchange's proposal to 
memorialize rule text related to trade-throughs will make clear the 
manner in which orders are repriced on the order book and protect 
investors and general public by further describing this restriction 
with respect to orders specifically. This repricing is described today 
within Rule 1093(a)(iii)(A), (B) and (C) which describes routing. The 
Exchange would re-price an order to the current national best offer 
(for bids) or the current national best bid (for offers) and displayed 
at one MPV above (for offers) or below (for bids) the national best 
price. The Exchange reprices orders one MPV inferior to cause the 
displayed price to reflect the available market on Phlx.\14\ The 
repricing of orders is consistent with the Act because repricing 
prevents the Exchange from disseminating a price which locks or crosses 
another market. Phlx is required avoiding displaying an order that 
would lock or cross a quotation of another market center at the time it 
is displayed. Preventing inferior prices from displaying perfects the 
mechanism of a free and open market and a national market system, and, 
in general to protect investors and the public interest.
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    \14\ See Phlx Rule 1086.
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    Finally, the Exchange proposes to provide at new Rule 1096(e), 
similar to Rule 1019(c) which states, ``Orders will be displayed in the 
System as described in Rule 1099.''
    The Exchange's proposal to adopt a new Rule 1096, ``Entry and 
Display of Orders'' and describe the current requirements and 
conditions for entering orders, similar to proposed changes to Rule 
1019 for quotes is consistent with the Act because it will provide 
transparency as to manner in which orders may be submitted to the 
System. The Exchange's new rule reflects the current requirements for 
submitting orders into the System. Similar to proposed Rule 1019, the 
Exchange proposes to memorialize requirements and limitations within 
one rule for ease of reference.
Rule 1097, Limitations on Order Entry
    The Exchange proposes to adopt a new Rule 1097, titled 
``Limitations on Order Entry,'' and relocate rule text from Rule 1080. 
The Exchange proposes to adopt rule text within new Rule 1097(a) which 
rule is similar to ISE Options 3, Section 22(b) as follows:

    Limit Orders. Members shall not enter public customer limit 
orders into the System in the same options series, for the account 
or accounts of the same or related beneficial owners, in such a 
manner that the beneficial owner(s) effectively is operating as a 
market maker by holding itself out as willing to buy and sell such 
options contract on a regular or continuous basis. In determining 
whether a beneficial owner effectively is operating as a market 
maker, the Exchange will consider, among other things: The 
simultaneous or near-simultaneous entry of limit orders to buy and 
sell the same options contract and the entry of multiple limit 
orders at different prices in the same options series.

    Specifically, Phlx Rule 1080(j) is similar to ISE Options 3, 
Section 22(b) in that it prohibits public customers,\15\ which are 
equivalent to ISE Priority Customers, from entering limit orders into 
the Order Book in the same option series in a manner where the public 
customer is effectively operating as a market maker by holding itself 
out as willing to buy and sell such options contract on a regular or 
continuous basis. Both rules are [sic] extend to beneficial owners. 
Phlx rule [sic] 1080(j) provides, ``[i]n determining whether an off 
floor member or beneficial owner effectively is operating as a market 
maker, the Exchange will consider, among other things: The simultaneous 
or near-simultaneous entry of limit orders to buy and sell the same 
options contract; the multiple acquisition and liquidation of positions 
in the same options series during the same day; and the entry of 
multiple limit orders at different prices in the same options series.'' 
This language is the same as ISE's Options 3, Section 22(b). Because 
Phlx has a trading floor, the ``off floor'' references are in Phlx Rule 
1080(j) and no such references are in the ISE Rules. Further, Phlx's 
Rule 1080(j) provides, ``The limitation set forth in this Rule 1080(j) 
does not apply to the accounts of off-floor broker dealers or 
Professionals as the term is defined in Rule 1000(b)(14).'' Phlx Rule 
1080(j) therefore would apply to accounts for public customers, and 
prevent public customers from conducting business as a market maker. 
ISE Options 3, Section 22(b) was adopted to limit the ability of 
Electronic Access Members that are not market makers to compete on 
preferential terms within ISE's automated systems,\16\ including 
Priority Customers, who are provided with certain benefits, such as 
priority of bids and offers. ISE's Prior Rule Change noted that it did 
not believe it was necessary to impose Options 3, Section 22 
restrictions on the entry of Professional or broker-dealer orders 
because the same priority does not exist.

[[Page 32799]]

Both rules therefore apply to same market participants. The Exchange 
notes that the Phlx and ISE Rules are substantively the same, despite 
the difference in the rule text.
---------------------------------------------------------------------------

    \15\ For purposes of this rule change, the term ``public 
customer'' shall mean a person or entity that is not a broker or 
dealer in securities and is not a Professional, as that term is 
defined within Phlx Rule 1000(b)(14).
    \16\ See Securities Exchange Act Release No. 63017 (September 
29, 2010), 75 FR 61795 (October 6, 2010) (SR-ISE-2010-95) (``Prior 
Rule Change'').
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    On Phlx, ROTs (as well as Specialists) are required to register 
with the Exchange.\17\ On Phlx, ROTs are entitled to certain 
allocations \18\ and preferential pricing \19\ and are obligated to 
submit Valid Width Quotes during the opening \20\ and quotes intra-
day.\21\ The Exchange believes that public customers that desire to 
make markets on Phlx should register with the Exchange. The Exchange 
also notes that ROTs are restricted from entering orders on Phlx as 
described within Rule 1080(b). The Exchange also proposes to amend the 
title from ``Limitations on Orders'' to ``Limit Orders.'' The Exchange 
notes that the term ``Phlx XL'' is the same as the defined term 
``System.'' \22\ Finally, the Exchange proposes to remove the final 
sentence, ``Notwithstanding the foregoing, the limitation in Rule 
1080(j) above will continue to apply to all-or-none orders submitted by 
Professionals to the Exchange.'' Rule 1078 notes that All-or-None 
Orders may be only be entered by Public Customers. This order type was 
recently amended and therefore this limitation is unnecessary.\23\
---------------------------------------------------------------------------

    \17\ See Phlx Rule 507.
    \18\ See Rule 100(g)(vi).
    \19\ See Phlx's Pricing Schedule at Options 8.
    \20\ See Phlx Rule 1017.
    \21\ See Phlx Rule 1081.
    \22\ The term ``System'' shall mean the automated system for 
order execution and trade reporting owned and operated by the 
Exchange which comprises: (A) An order execution service that 
enables members to automatically execute transactions in System 
Securities; and provides members with sufficient monitoring and 
updating capability to participate in an automated execution 
environment; (B) a trade reporting service that submits ``locked-
in'' trades for clearing to a registered clearing agency for 
clearance and settlement; transmits last-sale reports of 
transactions automatically to the Options Price Reporting Authority 
(``OPRA'') for dissemination to the public and industry; and 
provides participants with monitoring and risk management 
capabilities to facilitate participation in a ``locked-in'' trading 
environment; and (C) the data feeds described at Rule 1070. See Phlx 
Rule 1000(b)(45).
    \23\ See Securities Exchange Act Release No. 85262 (March 7, 
2019), 84 FR 9192 (March 13, 2019) (SR-Phlx-2019-03).
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    The Exchange proposes to relocate rule text from current Rule 
1080(c)(ii)(C)(2) to proposed Rule 1097(b). Current Rule 
1080(c)(ii)(C)(2) provides,

    Principal Transactions: Order Entry Firms may not execute as 
principal against orders on the limit order book they represent as 
agent unless: (a) Agency orders are first exposed on the limit order 
book for at least one (1) second, (b) the Order Entry Firm has been 
bidding or offering on the Exchange for at least one (1) second 
prior to receiving an agency order that is executable against such 
order, (c) the Order Entry Firm proceeds in accordance with the 
crossing rules contained in Rule 1064, (d) the orders are entered 
into Price Improvement XL or ``PIXL'' pursuant to Rule 1087, (e) the 
orders are entered into the Complex Order Live Auction or ``COLA'' 
pursuant to Rule 1080, Commentary .02(c)(ii)(e), or (f) orders 
entered into the Qualified Contingent Cross or ``QCC'' mechanism 
pursuant to Rules 1080(o).

    This rule provides for the exposure of orders entered on Phlx. 
Specifically, with respect to orders entered as where a Phlx member is 
acting as agent and principal on an order, the order must be exposed 
for one second prior to execution to allow an opportunity for price 
improvement. The Exchange has filed for certain functionalities which 
are exceptions to the general standard of one second exposure. These 
functionalities have provisions which describe the manner in which 
orders can be entered into the Price Improvement XL or ``PIXL'' 
mechanism \24\ the Complex Order Live Auction or ``COLA'' \25\ pursuant 
to Rule 1098(e); or the Qualified Contingent Cross or ``QCC'' 
mechanism.\26\ Further, Phlx Rule 1064 permits members to cross orders 
provided certain contingencies are met. This rule is intended to 
encourage price discovery and price improvement of all orders entered 
on Phlx. The Exchange proposes to utilize the broader term ``members'' 
instead of the specific term ``Order Entry Firms'' \27\ as this rule 
applies to all members. The Exchange has updated the current rule 
references.
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    \24\ See Phlx Rule 1087.
    \25\ See Rule 1098(e) or (f).
    \26\ See Rule 1088.
    \27\ The term ``Order Entry Firms'' is described in Rule 
1080(c)(ii) as a member organization of the Exchange that is able to 
route orders to AUTOM. Replacing the term ``Order Entry Firm'' with 
``member'' does not change the meaning on the sentence.
---------------------------------------------------------------------------

    The Exchange proposes to delete the rule text from current Rule 
1080(c)(ii)(C)(2) and (3) which provides,

    Solicitation Orders. Order Entry Firms must expose orders they 
represent as agent for at least one (1) second before such orders 
may be automatically executed, in whole or in part, against orders 
solicited from members and non-member broker-dealers to transact 
with such orders, except for: (a) Orders entered into PIXL pursuant 
to Rule 1087, (b) orders entered into COLA pursuant to Rule 1080, 
Commentary .02(c)(ii)(e), or (c) orders entered into the QCC 
mechanism pursuant to Rules 1080(o).
    (3) It shall be a violation of Rule 1080(c)(ii)(C) for any 
Exchange member or member organization to be a party to any 
arrangement designed to circumvent Rule 1080(c)(ii)(C) by providing 
an opportunity for a customer, member, member organization, or non-
member broker-dealer to execute immediately against agency orders 
delivered to the Exchange, whether such orders are delivered via 
AUTOM or represented in the trading crowd by a member or a member 
organization, except for: (a) Orders entered into PIXL pursuant to 
Rule 1087, (b) orders entered into COLA pursuant to Rule 1080, 
Commentary .02(c)(ii)(e), or (c) orders entered into the QCC 
mechanism pursuant to Rules 1080(o).

    This language is repetitive of language currently within current 
Rule 1080(c)(ii)(C)(1). Current Rule 1080(c)(ii)(C)(1) requires 
exposure similar to of one second and describes the same behavior as 
current Rule 1080(c)(ii)(C)(2) and (3) and lists the same exceptions. 
The Exchange does not believe that this rule text is necessary or 
covers a scenario that is not contemplated by current Rule 
1080(c)(ii)(C)(2) and (3). The Exchange believes that this rule was 
merely the inverse of the rule for principal transactions.
    The Exchange proposes new rule text at proposed Rule 1097(c)(1) 
which is the same rule text within ISE Options 3, Section 22 at 
Supplementary Material .01 and is similar to rule text at Phlx Rule 
1087(f), related to PIXL. Rule 1097(b)(1) would provide,

    This Rule prevents a member from executing agency orders to 
increase its economic gain from trading against the order without 
first giving other trading interest on the Exchange an opportunity 
to either trade with the agency order or to trade at the execution 
price when the Member was already bidding or offering on the book. 
However, the Exchange recognizes that it may be possible for an 
member to establish a relationship with a customer or other person 
(including affiliates) to deny agency orders the opportunity to 
interact on the Exchange and to realize similar economic benefits as 
it would achieve by executing agency orders as principal. It will be 
a violation of this Rule for a member to be a party to any 
arrangement designed to circumvent this Rule by providing an 
opportunity for a customer or other person (including affiliates) to 
regularly execute against agency orders handled by the member 
immediately upon their entry into the System.

    The Exchange believes that specifically noting this prohibition 
within the proposed rule will assist members in understanding the type 
of behavior that would violate Exchange rules when executing agency 
orders. Specifically, today pursuant to Phlx Rule 707, ``Conduct 
Inconsistent with Just and Equitable Principles of Trade,'' it would be 
violative for members to execute agency orders to increase its economic 
gain from trading against the order without first giving other trading

[[Page 32800]]

interest on Phlx an opportunity to either trade with the agency order 
or to trade at the execution price when the member was already bidding 
or offering on the book. The Exchange proposes to make clear with this 
Rule that members may not gain by failing to expose orders submitted on 
an agency basis. The Exchange is promoting transparency of orders to 
prevent members from seeking price discovery and potentially preventing 
price improvement which may result from exposing an order.
    The Exchange proposes to add a new rule at 1097(c) which provides, 
``Prior to or after submitting an order to Phlx, a member cannot inform 
another member or any other third party of any of the terms of the 
order for purposes of violating Rule 1095.'' Similar rule text is 
contained in The Nasdaq Options Market LLC (``NOM'') Rules.\28\ The 
Exchange believes that adding this language will better information 
participants that Rule 1097 prohibits such behavior. The Exchange 
desires to conform the language in this rule to that of affiliated 
Nasdaq markets.
---------------------------------------------------------------------------

    \28\ See NOM Rules at Chapter VII, Section 12 at Commentary .04.
---------------------------------------------------------------------------

    The Exchange's proposal to adopt a new Rule 1097 will conform 
proposed Rule 1097 to other Nasdaq affiliated markets filing similar 
rules.\29\ The Exchange's proposal to add rule text to describe 
potential violations of this rule will bring greater clarity to current 
limitations that exist when entering orders. Proposed Rule 1097 is 
consistent with the Act because it provides one rule for ease of 
reference which list the current limitations within Rule 1080 and some 
additional limitations. The Exchange believes the proposed rule will 
promote just and equitable principles of trade and remove impediments 
to and perfect the mechanism of a free and open market and a national 
market system because it will continue to make clear the requirement to 
expose orders as well as present more specific limitations on order 
entry which would violate Phlx Rules. Providing members with more 
information as to the type of behavior that is violative with respect 
to order exposure will prevent inadvertent violations of Exchange rules 
and ensure that orders are subject to appropriate price discovery.
---------------------------------------------------------------------------

    \29\ Nasdaq ISE, LLC, Nasdaq GEMX, LLC, Nasdaq MRX, LLC, Nasdaq 
BX, Inc. and Nasdaq Stock Market LLC are adopting similar rules to 
proposed Phlx Rule 1097.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\30\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\31\ 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 as provided for within the purpose section.
---------------------------------------------------------------------------

    \30\ 15 U.S.C. 78f(b).
    \31\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    Phlx proposes amendments to Phlx Rule 1019 to create a list of all 
the requirements and conditions for submitting quotes on Phlx within 
one rule is consistent with the Act because it will provide greater 
transparency to market participants of the applicable requirements. The 
Exchange's proposal is intended to provide greater information with 
respect to Firm Quote within new Rule 1019(b)(5) and regarding trade-
through and locked and crossed markets 1019(b)(6). The addition rule 
text is consistent with the Act because the Exchange is adding detail 
regarding the method in which orders which are firm or locked and 
crossed will be handled in the System. The notifications for Firm Quote 
are made clear with the proposed rule text. The Exchange believes that 
it is consistent with the Act to specify when quotes are firm and the 
handling of such quotes by the System for the protection of investors 
and the general public. The clarity is designed to promote just and 
equitable principles of trade by notifying all participants engaged in 
market making of potential outcomes. Today, quotations may not be 
executed against at prices that trade-through an away market. Also, 
quotations may not lock or cross an away market. The repricing of 
quotations is consistent with the Act because repricing prevents the 
Exchange from disseminating a price which locks or crosses another 
market. Phlx is required avoiding displaying a quotation that would 
lock or cross a quotation of another market center at the time it is 
displayed. Preventing inferior prices from displaying perfects the 
mechanism of a free and open market and a national market system, and, 
in general to protect investors and the public interest.
    Similar to Rule 1019, which describes requirements for quotes, the 
Exchange proposes to adopt a new Rule 1096, ``Entry and Display of 
Orders'' and describe the current requirements and conditions for 
entering orders. The Exchange notes that the requirements provided for 
within this rule represent the current practice. The purpose of Rule 
1096 is to memorialize this information within a single rule to provide 
a list of other requirements which may impact the execution of an 
order. Trades may be nullified today by agreement of the parties. The 
Exchange believes that it is consistent with the Act to permit parties 
to agree to a nullification provided the nullification does not violate 
other exchange rules. The Exchange notes that parties may not agree to 
a mutual agreement for purposes that would cause another rule to be 
violated. The Exchange believes that it is consistent with the Act and 
protection of investors and general public to make clear the expected 
behavior with respect to nullifications.
    Today, orders may not be executed at a price that trades through an 
away market. Also, orders may not lock or cross an away market. 
Routable orders must comply with Trade-Through and Locked and Crossed 
Markets restrictions. The repricing of orders is consistent with the 
Act because repricing prevents the Exchange from disseminating a price 
which locks or crosses another market. Phlx is required avoiding 
displaying an order that would lock or cross a quotation of another 
market center at the time it is displayed. Preventing inferior prices 
from displaying perfects the mechanism of a free and open market and a 
national market system, and, in general to protect investors and the 
public interest. The Exchange's proposal to adopt a new Rule 1096, 
``Entry and Display of Orders'' and describe the current requirements 
and conditions for entering orders, similar to proposed changes to Rule 
1019 for quotes is consistent with the Act because it will provide 
transparency as to manner in which orders may be submitted to the 
System. The Exchange's new rule reflects the current requirements for 
submitting orders into the System. Similar to proposed Rule 1019, the 
Exchange proposes to memorialize requirements and limitations within 
one rule for ease of reference.
    The Exchange's proposal to adopt a new Rule 1097 will conform 
proposed Rule 1097 to other Nasdaq affiliated markets filing similar 
rules.\32\ The Exchange's proposal to add rule text to describe 
potential violations of this rule will bring greater clarity to current 
limitations that exist when entering orders. Proposed Rule 1097 is 
consistent with the Act because it provides one rule for ease of 
reference which list the current limitations within Rule 1080

[[Page 32801]]

and some additional limitations. The Exchange believes the proposed 
rule will promote just and equitable principles of trade and remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system because it will continue to make clear the 
requirement to expose orders as well as present more specific 
limitations on order entry which would violate Phlx Rules. Providing 
members with more information as to the type of behavior that is 
violative with respect to order exposure will prevent inadvertent 
violations of Exchange rules and ensure that orders are subject to 
appropriate price discovery.
---------------------------------------------------------------------------

    \32\ Nasdaq ISE, LLC, Nasdaq GEMX, LLC, Nasdaq MRX, LLC, Nasdaq 
BX, Inc. and Nasdaq Stock Market LLC are adopting similar rules to 
proposed Phlx Rule 1097.
---------------------------------------------------------------------------

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 that is not necessary or appropriate 
in furtherance of the purposes of the Act. The Exchange notes that 
other options markets have similar rules with respect to order and 
quote entry and the requirements to expose orders. The implementation 
of such rules may vary across options markets. Despite the variation in 
implementation, the Exchange does not believe this proposal creates an 
undue burden on inter-market competition because the requirements for 
order exposure are consistent with respect to all markets as well as 
the ability to submit quotes and orders on all options markets.
Rule 1019, Acceptance of Quote and Orders
    The Exchange's proposal to add Rule 1019(b) to describe the current 
requirements and conditions for submitting quotes does not impose an 
undue burden on competition and all Specialists and ROTs are subject to 
these requirements today. The Exchange is memorializing its current 
practice by reflecting the various requirements and limitations for 
quote entry in one rule for ease of reference and clarity. The Exchange 
is also proposing to conform this rule to similar rules across other 
Nasdaq affiliated exchanges.
Rule 1080, Electronic Acceptance of Quotes and Orders
    The Exchange's proposal to amend Rule 1080(a)(i)(B) to add the 
following sentence to Specialized Quote Feed (``SQF''), ``Specialists, 
SQTs and RSQTs may only enter interest into SQF in their assigned 
options series'' is consistent with the Act because it will make clear 
the manner in which quotes may be submitted to the System.
    The Exchange's proposal to remove rule text within Rule 1080(k) and 
memorializing the quoting requirements within Rule 1019 does not impose 
an undue burden on competition and all Specialists and ROTs are subject 
to these requirements today.
Rule 1096, Entry and Display of Orders
    The Exchange's proposal to adopt a new Rule 1096, ``Entry and 
Display of Orders'' and describe the current requirements and 
conditions for entering orders, similar to proposed changes to Rule 
1019 for quotes does not impose an undue burden on competition because 
it applies uniformly to all members. This rule memorializes the manner 
in which orders may be submitted to the System and provides 
transparency as to manner in which orders may be submitted to the 
System. The Exchange's new rule text memorializes the current 
requirements for submitting orders into the System. Similar to proposed 
Rule 1019, the Exchange proposes to memorialize requirements and 
limitations within one rule for ease of reference. The Exchange is also 
proposing to conform this rule to similar rules across other Nasdaq 
affiliated exchanges.
    Adding new rules for ``Nullification by Mutual Agreement and new 
Rule 1096(a)(5) does not impose an undue burden on competition as these 
rules apply to all members today and would be considered conduct 
violate of Rule 707, ``Conduct Inconsistent with Just and Equitable 
Principles of Trade.''
Rule 1097, Limitations on Order Entry
    The Exchange's proposal to adopt a new Rule 1097, titled 
``Limitations on Orders,'' and relocate rule text from current Rule 
1080 will conform proposed Rule 1097 to other Nasdaq affiliated markets 
filing similar rules.\33\ This rule will apply uniformly to all 
members. The Exchange' proposal add new rule text at proposed Rule 
1097(c)(1) which is the same rule text within ISE Options 3, Section 22 
at Supplementary Material .01 and is similar to rule text at Rule 
1087(f) related to PIXL will provide members greater transparency as to 
the type of behavior that would violate Exchange rules when executing 
agency orders. Additionally, adding a new rule at 1097(d), similar to 
rule text is contained in NOM Rules,\34\ will better inform 
participants that Rule 1097 prohibits such behavior. The Exchange 
desires to conform the language in this rule to that of affiliated 
Nasdaq markets.
---------------------------------------------------------------------------

    \33\ Nasdaq ISE, LLC, Nasdaq GEMX, LLC, Nasdaq MRX, LLC, Nasdaq 
BX, Inc. and Nasdaq Stock Market LLC intend to adopt similar rules 
to proposed Phlx Rule 1097.
    \34\ See NOM Rules at Chapter VII, Section 12 at Commentary .04.
---------------------------------------------------------------------------

Relocation of Kill Switch and Detection of Loss of Communication
    The Exchange's proposal to relocate the rule text at Rule 1019(b), 
Kill Switch, and (c), Detection of Loss of Communication, to new Rules 
1073 and 1074, respectively does not impose an undue burden on 
competition. The relocations are non-substantive and intended to 
provide greater transparency to these rules by making them easier to 
locate.

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)(iii) of the Act \35\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\36\
---------------------------------------------------------------------------

    \35\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \36\ 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.
---------------------------------------------------------------------------

    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 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:

[[Page 32802]]

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-2019-25 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-2019-25. 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-2019-25, and should be submitted on 
or before July 30, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\37\
---------------------------------------------------------------------------

    \37\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-14494 Filed 7-8-19; 8:45 am]
 BILLING CODE 8011-01-P


