[Federal Register: July 10, 2008 (Volume 73, Number 133)]
[Notices]
[Page 39769-39776]
[DOCID:fr10jy08-122]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58099; File No. SR-Phlx-2008-50]

Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.;
Notice of Filing of a Proposed Rule Change Relating to Complex Orders

July 3, 2008.
    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 July 1, 2008, the Philadelphia Stock Exchange, Inc. (``Phlx'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') a proposed rule change as described in Items I, II,
and III below, which Items have been prepared substantially by the
Phlx. 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 Phlx proposes to add Commentary .08 to Phlx Rule 1080 to
establish an automated process for handling complex options orders on
the Phlx's electronic trading platform for options, Phlx XL.\3\
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    \3\ See Securities Exchange Act Release No. 50100 (July 27,
2004), 69 FR 44612 (August 3, 2004) (order approving File No. SR-
Phlx-2003-59).
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    The text of the proposed rule change is available at Phlx, the
Commission's Public Reference Room, and http://www.phlx.com.

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 Phlx 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 Phlx has prepared summaries, set forth in sections
A, B, and C below, of the most significant aspects of such statements.

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

1. Purpose
    The purpose of the proposed rule change is to more efficiently
handle complex orders on the Exchange by establishing rules and systems
that would enable the Exchange to handle such orders electronically.
Definitions
    The proposed rule change would establish specific definitions
relevant to the automated handling of complex orders.
Order Types
    Proposed Phlx Rule 1080, Commentary .08(i) would define ``Complex
Order'' to mean any of the following: a spread order; \4\ a straddle
order; \5\ a combination order; \6\ a ratio order; \7\ or a collar
order (risk reversal).\8\
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    \4\ A spread order is an order to buy a stated number of option
contracts and to sell a stated number of option contracts in a
different series of the same option and may be bid for or offered on
a total net debit or credit basis. See Phlx Rule 1066(f)(1).
    \5\ A straddle order is an order to buy a number of call option
contracts and the same number of put option contracts with respect
to the same underlying security (in the case of options on a stock
or Exchange-Traded Fund Share) or the same underlying foreign
currency (in the case of options on a foreign currency) and having
the same exercise price and expiration date; or an order to sell a
number of call option contracts and the same number of put option
contracts with respect to the same underlying security (in the case
of options on a stock or Exchange-Traded Fund Share) or the same
underlying foreign currency (in the case of options on a foreign
currency) and having the same exercise price and expiration date
(e.g., an order to buy two XYZ July 50 calls and to buy two XYZ July
50 puts is a straddle order). In the case of adjusted stock option
contracts, a straddle order need not consist of the same number of
put and call contracts if such contracts both represent the same
number of shares at option. See Phlx Rule 1066(f)(2).
    \6\ A combination order is an order involving a number of call
option contracts and the same number of put option contracts in the
same underlying security and representing the same number of shares
at option (if the underlying security is a stock or Exchange-Traded
Fund Share) or the same number of foreign currency units (if the
underlying security is a foreign currency). A combination order
includes a conversion (generally, buying a put, selling a call and
buying the underlying stock or Exchange-Traded Fund Share) and a
reversal (generally, selling a put, buying a call and selling the
underlying stock or Exchange-Traded Fund Share). In the case of
adjusted option contracts, a combination order need not consist of
the same number of shares at option. See Phlx Rule 1066(f)(3).
    \7\ For purposes of this rule, a ``ratio order'' would be
defined as a spread, straddle or combination order that may consist
of legs that have a different number of contracts. While a ratio
order under this proposed rule may consist of legs that have a
different number of contracts, in order to establish priority
pursuant to Phlx Rules 1033(d) and (g), the number of contracts must
differ only by a permissible ratio. A permissible ratio for purposes
of priority is any ratio that is equal to or greater than one-to-
three (.333) and less than or equal to three-to-one (3.00). For
example, a one-to-two (.5) ratio, a two-to-three (.667) ratio, or a
two-to-one (2.00) ratio is permissible, whereas a one-to-four (.25)
ratio or a four-to-one (4.0) ratio is not.
    \8\ A collar order (risk reversal) is defined as an order
involving the sale (purchase) of a call (put) option coupled with
the purchase (sale) of a put (call) option in equivalent units of
the same underlying security having a lower (higher) exercise price
than, and the same expiration date as, the sold (purchased) call
(put) option.
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Complex Order Strategy
    The term ``Complex Order Strategy'' means any Complex Order
involving any option series which is priced at a net debit or credit
(based on the relative prices of each component). The Exchange will
calculate both a bid price and an offer price for each Complex Order
Strategy based on the current PBBO (as defined below) for each
component of the Complex Order and the bid/ask differential for each
component.
    For example, a Complex Order Strategy might be ``buy one XYZ
January 20 call, sell one XYZ January 20 put.''

The system would assign this Complex Order Strategy a specific
identification number or code that would be used in the system to
identify this Complex Order Strategy. Hypothetically, the
identification number for this particular Complex Order Strategy could
be ``Complex Order Strategy 12345.'' Complex Order Strategy
12345 would have a bid price and an offer price, as stated
above, based on the PBBO and the bid/ask differential for each
component. If an investor wishes to purchase or sell, for example, 10
Complex Order Strategy 12345, such an investor would be bidding for or
offering to buy 10 XYZ January 20 calls and sell 10 XYZ January 20
puts.
Other Definitions
PBBO
    The term ``PBBO'' means the Phlx Best Bid and/or Offer for
individual option series.
cPBBO
    The term ``cPBBO'' means the best net debit or credit price for a
Complex Order Strategy based on the PBBO for the individual components
of such Complex Order Strategy.
NBBO
    The term ``NBBO'' means the National Best Bid and/or Offer for
individual option series.
cNBBO
    The term ``cNBBO'' means the best net debit or credit price for a
Complex Order Strategy based on the NBBO for the individual components
of a Complex Order Strategy.
Phlx XL Participant
    The term ``Phlx XL participant'' includes Streaming Quote Traders
(``SQTs''), Remote Streaming Quote Traders (``RSQTs''), non-SQT
Registered Options Traders (``ROTs''), specialists or non-Phlx market
makers on another exchange; non-broker-dealer customers and non-market-
maker off-floor broker-dealers; and Floor Brokers using the Options
Floor Broker Management System.
Order Entry
    Under the proposal, Complex Orders would be eligible to be entered
in increments of $0.01. Non-broker-dealer customers and non-market-
maker off-floor broker-dealers would be permitted to enter Complex
Orders as Day, Good Till Cancelled (``GTC'') or Immediate or Cancel
(``IOC''). Exchange SQTs,\9\ RSQTs,\10\ non-SQT ROTs,\11\ specialists
and non-Phlx market makers on another exchange would be permitted to
enter Complex Orders as IOC only. Floor Brokers using the Options Floor
Broker Management System \12\ may enter Complex Orders as Day, GTC, or
IOC on behalf of non-broker-dealer customers and non-market maker off-
floor broker-dealers, and as IOC only on behalf of broker-dealers or
affiliates of broker-dealers.
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    \9\ An SQT is an ROT who has received permission from the
Exchange to generate and submit option quotations electronically
through an electronic interface with AUTOM via an Exchange approved
proprietary electronic quoting device in eligible options to which
such SQT is assigned. See Phlx Rule 1014(b)(ii)(A).
    \10\ An RSQT is an ROT that is a member or member organization
with no physical trading floor presence who has received permission
from the Exchange to generate and submit option quotations
electronically through AUTOM in eligible options to which such RSQT
has been assigned. An RSQT may only submit such quotations
electronically from off the floor of the Exchange. See Phlx Rule
1014(b)(ii)(B).
    \11\ A non-SQT ROT is an ROT who is neither an SQT nor an RSQT.
See Phlx Rule 1014(b)(ii)(C).
    \12\ The Options Floor Broker Management System is a component
of the Exchange's electronic options trading system designed to
enable Floor Brokers and/or their employees to enter, route and
report transactions stemming from options orders received on the
Exchange. The Options Floor Broker Management System also is
designed to establish an electronic audit trail for options orders
represented and executed by Floor Brokers on the Exchange, such that
the audit trail provides an accurate, time-sequenced record of
electronic and other orders, quotations and transactions on the
Exchange, beginning with the receipt of an order by the Exchange,
and further documenting the life of the order through the process of
execution, partial execution, or cancellation of that order. See
Phlx Rule 1080, Commentary .06.
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Eligible Complex Orders
    A Complex Order would be eligible to trade on Phlx XL only when
each component of the Complex Order is open for trading on the
Exchange. Complex Orders may be executed against the Complex Order Book
(``CBOOK'') or placed on the CBOOK. Certain Complex Orders will be
entered into a Complex Order Live Auction (``COLA'') either following a
Complex Order Opening Process (``COOP'') or when a Complex Order
improves the cPBBO. Complex Orders would not trade on Phlx XL when: (i)
The Complex Order is received prior to the opening on the Exchange for
each component of the Complex Order; (ii) during an opening rotation
for any component of the Complex Order; (iii) during a trading halt for
any component of the Complex Order; (iv) when the Exchange's automated
execution system is disengaged for any component of the Complex Order;
(v) when the Exchange's Risk Monitor Mechanism \13\ is engaged for any
component of the Complex Order pursuant to Phlx Rule 1093 that
represents all or a portion of the PBBO; or (vi) when the Exchange's
market for any component of the Complex Order is disseminated pursuant
to Phlx Rule 1082(a)(ii)(B).\14\
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    \13\ The Risk Monitor Mechanism automatically removes a Phlx XL
participant's quotations from the Exchange's disseminated quotation
in all series of a particular option once such Phlx XL participant
executes a maximum volume threshold within a specific time period.
In the event that the specialist's quote is removed by the Risk
Monitor Mechanism and there are no other Phlx XL participants
quoting in the particular option, the system will automatically
provide two-sided quotes that comply with the Exchange's rules
concerning quote spread parameters on behalf of the specialist until
such time as the specialist revises the quotation. See Phlx Rule
1093(d).
    \14\ If an SQT's or RSQT's (other than a Directed SQT or RSQT)
quotation size in a particular series in a Streaming Quote Option is
exhausted or removed by the Risk Monitor Mechanism, such SQT's or
RSQT's quotation shall be deleted from the Exchange's disseminated
quotation until the time the SQT or RSQT revises his/her quotation.
If the Exchange's disseminated size in a particular series in a
Streaming Quote Option is exhausted at that particular price level,
and no specialist, SQT, or RSQT has revised their quotation
immediately following the exhaustion of the Exchange's disseminated
size at such price level, the Exchange shall automatically provide
two-sided quotes that comply with the Exchange's rules concerning
quote spread parameters on behalf of the specialist until such time
as the specialist revises the quotation, with a size of one
contract. See Phlx Rule 1082(a)(ii)(B).
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    The Phlx XL system will begin a COOP upon the termination of most
of the above conditions, except that the Phlx XL system will not engage
the COOP Timer upon re-opening Complex Order trading when either: (a)
The Exchange's automated execution system was disengaged and
subsequently re-engaged, or (b) the Phlx XL Risk Monitor Mechanism was
engaged and subsequently disengaged for a quote of any component of the
Complex Order that represents the PBBO. In either event, the Phlx XL
system will immediately begin the COOP Evaluation (defined below) and
will not initiate the COOP Timer (defined below).
COOP
    The Phlx XL system will accept pre-opening Complex Orders, and will
accept Complex Orders prior to re-opening following a halt in trading
on the Exchange. Complex Orders received prior to the opening or during
a trading halt will reside on the CBOOK. Once trading in each component
of a Complex Order has opened (or re-opened following a trading halt),
the Phlx XL system will initiate a COOP, provided that a COOP will only
be conducted for any Complex Order Strategy that has a Complex Order
pending at the opening or re-opening following a trading halt. The COOP
will be conducted in two

phases, the ``COOP Timer'' and the ``COOP Evaluation.''
COOP Timer
    A COOP Timer will begin counting a number of seconds during which
bids and/or offers for a Complex Order Strategy can be received but
during which Complex Orders may not be traded. The COOP Timer would be
configurable to a period ranging from 0 to 600 seconds as determined by
the Exchange and communicated to the Exchange membership via Exchange
Circular. The purpose of the COOP Timer is to allow a time period for
the markets trading the components of the Complex Order to conduct
openings for the components and to establish prices on such markets
after the opening. The Exchange believes that the COOP Timer should
thus contribute to fair and orderly markets in Complex Orders on the
Exchange at the opening or re-opening following a trading halt.
    Multiple Complex Orders that represent the same Complex Order
Strategy would participate in the COOP Timer. The Exchange will
establish a maximum number of Complex Order Strategies that can be
subject to a COOP Timer at any given time. Such maximum number will be
communicated to the membership by Exchange Circular. The purpose of the
``maximum number'' proposal is to enable the Exchange to better manage
system capacity relating to Complex Order Strategies subject to a COOP
Timer. The system would ``stagger'' COOP Timers when the Phlx XL system
has received the maximum number of Complex Order Strategies (i.e.,
begin another round of COOP Timers that would include Complex Order
Strategies that have not yet been the subject of a COOP Timer).
    Complex Orders received during the COOP Timer and COOP Evaluation
will reside on the CBOOK. Complex Orders will be visible to Phlx XL
participants during the COOP Timer and COOP Evaluation.
    The Phlx XL system will not engage the COOP Timer upon re-opening
Complex Order trading when: (a) The Exchange's automated execution
system was disengaged and subsequently re-engaged, or (b) the Phlx XL
Risk Monitor Mechanism was engaged and subsequently disengaged. In
either event, the Phlx XL system will immediately begin the COOP
Evaluation.
COOP Evaluation
    Upon expiration of the COOP Timer, the Phlx XL system will conduct
a COOP Evaluation to determine which Complex Order, if any, on the
CBOOK will be the ``COLA-eligible order'' (as defined below) subject to
a COLA. The Phlx XL system will establish one single COLA-eligible
order \15\ for each COLA, against which Phlx XL participants may submit
bids and offers. The COLA-eligible order, if any, will be identified by
the Phlx XL system among the following Complex Orders: Market and
marketable limit Complex Orders (including Complex Orders that cross
the cPBBO), and Complex Orders that improve the cPBBO.
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    \15\ A single COLA-eligible order would also include multiple
orders at the same (best) price that are aggregated and treated by
the system as one COLA-eligible order pursuant to proposed Phlx Rule
1080, Commentary .08(d)(ii)(B)(2)(b).
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    The purpose of the COOP Evaluation is to enable the system to
determine, based on a ``snap shot'' of all Complex Orders on the CBOOK,
the manner in which orders received during that time period will be
handled. For example, if at the end of the COOP Timer the Phlx XL
system determines that no market or marketable limit Complex Orders,
Complex Orders that improve the cPBBO, and/or Complex Orders that cross
the cPBBO exist on the CBOOK, Complex Orders that were received during
the COOP Timer will remain on the CBOOK.
COLA-Eligible Order
    On the other hand, if at the expiration of the COOP Timer, the Phlx
XL system determines that there are market or marketable limit Complex
Orders (including Complex Orders that cross the cPBBO) and/or Complex
Orders that improve the cPBBO in the Phlx XL system, the Phlx XL system
will conduct a COOP Evaluation to determine which of those orders will
be placed in a COLA as the single ``COLA-eligible order'' for each
particular Complex Order Strategy, against which Phlx XL participants
may enter bids and offers. A ``COLA-eligible order'' means a Complex
Order identified by way of a COOP or that improves the cPBBO respecting
the specific Complex Order Strategy that is the subject of the Complex
Order.
     If a single Complex Order exists in the Phlx XL system
that improves the cPBBO on one side of the market, that order will be
the COLA-eligible order.
     If multiple Complex Orders exist in the Phlx XL system
that improve the cPBBO on one side of the market, the Complex Order at
the best price will be the COLA-eligible order. If there are multiple
Complex Orders at the best price, the Phlx XL system will treat the
aggregate size at that price as a single COLA-eligible order. Such
orders will be executed in the order in which they were received.
     If market and/or marketable limit Complex Orders exist in
the Phlx XL system on both sides of the market, the Complex Order on
the side of the market with the larger marketable size will be the
COLA-eligible order. If the market and/or marketable limit Complex
Orders have the same size on both sides of the market, the market and/
or marketable limit Complex Orders that represent the larger size
associated with market orders will be the COLA-eligible order. If the
size associated with market Complex Orders is the same on both sides of
the market, the side of the market with the first Complex Order
establishing the best price will be the COLA-eligible order. The size
associated with multiple market and marketable limit Complex Orders at
the same price will be aggregated and treated as one COLA-eligible
order at the best price by the system. Such orders will be executed in
the order in which they were received.
     If Complex Orders on opposite sides of the market that
cross through the mid-point of the cPBBO exist in the Phlx XL system,
the side of the market that is priced at the greater amount through the
mid-point of the cPBBO will be the COLA-eligible order. If both sides
of the market are priced at an equal amount through the mid-point of
the cPBBO, or are priced at the cPBBO, the side of the market with the
greater size will be the COLA-eligible order. If both sides of the
market have the same size, the side of the market that was first to
submit the best price will be a COLA-eligible order.
     Orders that are not determined to be the COLA-eligible
order may participate in the COLA pursuant to proposed Phlx Rule 1080,
Commentary .08(e)(iii), as described below.
     If Complex Orders on opposite sides of the market exist in
the Phlx XL system that improve the cPBBO but do not cross the mid-
point of the cPBBO, there will be no COLA-eligible order.
    The purpose of these scenarios is to provide a methodology for
determining which order in the Phlx XL system would qualify as the
COLA-eligible order; the methodology is intended to reward the
participant whose COLA-eligible order was either submitted first in
time or whose COLA-eligible order would create the narrowest spread in
the cPBBO. The Exchange believes that once a COLA has begun, the person
submitting the initial COLA-eligible order should be the one to benefit
from the auction relating to his or her particular COLA-eligible order
during the COLA. Other Complex Orders

representing the same Complex Order Strategy on the same side of the
market as the COLA-eligible order under the scenarios listed above,
regardless of price, would be entitled to executions only after the
COLA-eligible order has been executed in full.
    An order that would otherwise be the COLA-eligible order that is
received in the Phlx XL system during the final ten seconds of any
trading session would not be the COLA-eligible order.
COLA
    Complex Orders on the CBOOK may be subject to an automated COLA
process. A COLA may take place (1) following a COOP, or (2) during
normal trading if the Phlx XL system receives a Complex Order that
improves the cPBBO.
    If the Phlx XL system identifies the existence of a single COLA-
eligible order following a COOP or by way of receipt during normal
trading of a Complex Order that improves the cPBBO, such COLA-eligible
order will initiate a COLA, during which Phlx XL participants may bid
and offer against the COLA-eligible order pursuant to this rule. COLA-
eligible orders will be executed without consideration of any prices
that might be available on other exchanges trading the same options
contracts, unless the Phlx XL participant submitting the COLA-eligible
order designates the COLA-eligible order as ineligible for execution
during the COLA at a price that is inferior to the NBBO for the
individual components of the Complex Order Strategy that is the subject
of the COLA-eligible order. The purpose of this provision is to provide
a method for Phlx XL participants, upon request, to protect each
component of their Complex Order from trading through the NBBO.
However, an otherwise ``NBBO protected'' COLA-eligible order may not be
so designated once placed onto the CBOOK.
    Upon the identification of the COLA-eligible order by the Phlx XL
system, the Exchange will send a broadcast message to Phlx XL
participants indicating that a COLA has been initiated. The broadcast
message will identify the Complex Order Strategy, the size of the COLA-
eligible order, and any contingencies, if applicable (e.g., All-or-
None), but will not identify the side of the market or the price of the
COLA-eligible order. The purpose of this provision is to maintain a
fair and orderly market for Complex Orders on the Exchange by ensuring
a ``blind'' auction in the COLA.
COLA Timer
    Once the Phlx XL system has identified a COLA-eligible order
(either through price-improvement or by way of a COOP), the COLA will
begin with a timing mechanism (a ``COLA Timer''), which is a
configurable counting period not to exceed five seconds, during which
Phlx XL participants may submit bids or offers that improve on the
cPBBO for the particular Complex Order Strategy. In order to be
consistent and to avoid confusion, the COLA Timer will be set for the
same number of seconds for all options trading on the Exchange as
determined by the Exchange and communicated to the membership via
Exchange Circular. Complex Orders may be cancelled at any time prior to
the commencement of a COLA. To ensure the uninterrupted continuity of
the COLA, the proposed rule would provide that no Complex Order(s) in a
particular Complex Order Strategy may be cancelled during the COLA for
that Complex Order Strategy. Such Complex Orders may be cancelled
following the completion of the COLA for that Complex Order Strategy.
Bidding and Offering in Response to a COLA
    Phlx XL participants may bid and/or offer on either or both side(s)
of the market during the COLA Timer by submitting one or more
electronic bids or offers that improve the cPBBO, known as a ``COLA
Sweep.'' Phlx XL participants may also bid and/or offer electronically
using limit orders. Such orders would be handled as described below.
    A single Phlx XL participant may submit multiple COLA Sweeps at
different prices in increments of $0.01 in response to a COLA
broadcast, regardless of the minimum trading increment applicable to
the specific series. A COLA Sweep may be for a size that is less than
the size of the COLA-eligible order, and multiple COLA Sweeps submitted
by the same Phlx XL participant may be for different sizes at different
price levels.
    Phlx XL participants may change the size of a previously submitted
COLA Sweep at the previously submitted COLA price during the COLA
Timer. In the event that a Phlx XL participant submits multiple COLA
Sweeps in a particular Complex Order Strategy, the system will use the
Phlx XL participant's most recently submitted COLA Sweep at each price
level as that participant's response at that price. The Phlx XL
participant's most recently submitted COLA Sweep will be included in
the allocation algorithm described below, unless the newly submitted
COLA Sweep has a size of zero. A COLA Sweep with a size of zero will
remove a Phlx XL participant's previously submitted COLA Sweep from the
COLA at that price level. The purpose of this provision is to reward
Phlx XL participants that are first to bid or offer during the COLA
Timer without penalizing them simply because the Phlx XL participant
changes the size of his/her COLA Sweep. COLA Sweeps will not be visible
to any participant and will not be disseminated by the Exchange. This
is to ensure a fair auction during the COLA Timer, such that all
participants would submit COLA Sweeps at their best price.
    The Exchange's rules regarding exposure of Solicited Transactions
and orders submitted by Order Entry Firms \16\ acting as agent who wish
to trade as principal against such orders will apply to complex orders
trading on Phlx XL.\17\
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    \16\ The term ``Order Entry Firm'' means a member organization
of the Exchange that is able to route orders to AUTOM. See Phlx Rule
1080(c)(ii)(A)(1).
    \17\ Under Exchange rules, 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 three seconds, (b) the Order Entry Firm has been
bidding or offering on the Exchange for at least three seconds prior
to receiving an agency order that is executable against such order,
or (c) the Order Entry Firm proceeds in accordance with the crossing
rules contained in Phlx Rule 1064. See Phlx Rule 1080(c)(ii)(C)(1).
Order Entry Firms must expose orders they represent as agent for at
least three seconds 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. See Phlx
Rule 1080(c)(ii)(C)(2).
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Execution of COLA-Eligible Orders
    Upon the expiration of the COLA Timer, COLA Sweeps and/or any
Complex Orders received during the COLA Timer that improve the cPBBO
may be executed against the COLA-eligible order (unless the cPBBO is
inferior to the cNBBO and the Phlx XL participant submitting the COLA-
eligible order has designated the components of the COLA-eligible order
as ineligible for execution at a price that is inferior to the cNBBO).
The COLA-eligible order will receive the best price or prices available
for the Complex Order Strategy represented by the COLA-eligible order.
The components of a COLA-eligible order may be executed in one cent
increments, regardless of the minimum quoting increments otherwise
appropriate to the individual legs of the order. Executions in the COLA
will comply with the requirements of Phlx Rule 1033(d).\18\
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    \18\ Phlx Rule 1033(d), ``Spread Type Priority,'' states that
when a member holding a hedge order, as defined in Phlx Rule 1066,
and bidding or offering on the basis of a total credit or debit for
the order has determined that the order may not be executed by a
combination of transactions at or within the bids and offers
established in the marketplace, then the order may be executed as a
hedge order at the total credit or debit with one other member with
priority over either the bid or the offer established in the
marketplace that is not better than the bids or offers comprising
such total credit or debit, provided that the member executes at
least one option leg at a better price than the established bid or
offer for that option contract AND no option leg is executed at a
price outside of the established bid or offer for that option
contract.

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Trade Allocation and Priority
    As stated above, COLA-eligible orders, COLA Sweeps, and responsive
Complex Orders will trade first based on the best price or prices
available at the end of the COLA Timer. If no COLA Sweeps or responsive
Complex Orders for the same Complex Order Strategy as the COLA-eligible
order that improve the initial cPBBO were received during the COLA
Timer, each component of the COLA-eligible order may trade at the PBBO
with existing quotes and/or limit orders on the limit order book for
the individual components of the Complex Order, provided that each
component is executed such that the components comprise the Complex
Order Strategy with the correct ratio for the desired net debit or
credit. Trades pursuant to this paragraph will be allocated in
accordance with Phlx Rule 1014(g)(vii), and an SQT or RSQT quoting all
components of the Complex Order will have priority over SQTs and RSQTs
quoting a single component, but not over customer orders.
    If the markets for the individual components of a Complex Order
Strategy independently improve during the COLA Timer and match the best
price of COLA Sweep(s) and/or responsive Complex Order(s), the Phlx XL
system will execute such COLA Sweep(s) and/or responsive Complex Orders
before executing the individual components of the Complex Order
Strategy. A non-broker-dealer customer Complex Order will have priority
over specialists, SQTs, RSQTs, and off-floor broker-dealers bidding for
and/or offering any component(s) of the Complex Order Strategy at the
same price, but not over non-broker-dealer customer orders representing
any component(s) of the Complex Order Strategy at the same price. The
purpose of this provision is to encourage Phlx XL participants to
participate in the Complex Order auction process, in which the Phlx XL
system will create opportunities for price improvement of the COLA-
eligible order, rather than doing so with individual orders. The
Exchange believes that the systemic approach using Complex Orders in
the auction process will foster fair and orderly automated markets for
Complex Orders, with the potential for price improvement each time the
automated auction process is engaged.
    If multiple customer Complex Orders, COLA Sweeps, Phlx XL
participant Complex Orders and/or off-floor broker-dealer Complex
Orders are eligible for execution against the COLA-eligible order at
the same net price, the trade will be allocated, subject to the size of
the COLA-eligible order:
     First, to customer marketable Complex Orders on the CBOOK
(as defined below) in the order in which they were received;
     Second, to COLA Sweeps on a size pro-rata basis;
     Third, to SQTs, RSQTs, and non-SQT ROTs who have submitted
IOC Complex Orders that are marketable against the COLA-eligible order,
on a size pro-rata basis; and
     Fourth, to non-market maker off-floor broker-dealers on a
size pro-rata basis.
    Executions in the COLA will comply with the requirements of Phlx
Rule 1033(d), as described above. For allocation purposes, the size of
a COLA Sweep or responsive Complex Order received during the COLA Timer
would be limited to the size of the COLA-eligible order. For example,
if the size of a COLA-eligible order is 100 contracts, and a COLA Sweep
is received for 500 contracts, the system will calculate the algorithm
using a size of 100 contracts for the COLA Sweep. The purpose of this
provision is to prevent artificially inflated COLA Sweep and Complex
Order sizes intended to increase the size pro rata entitlement
applicable to the Phlx XL participant submitting the COLA Sweep or
Complex Order.
    If a COLA-eligible order cannot be filled in its entirety, any
remaining balance would be placed on the CBOOK unless the COLA-eligible
order has been submitted with other instructions (i.e., cancel).
Enhanced Specialist Participation
    In the situation where the specialist submits a COLA Sweep during
the COLA Timer at the same price as other COLA Sweeps that are eligible
for execution against the COLA-eligible order, after customer
marketable Complex Orders have been executed against the COLA-eligible
order, the specialist would be entitled to receive the greater of the
proportion of the aggregate size at the cPBBO associated with such
specialist's COLA Sweep, SQT, and RSQT COLA Sweeps, and non-SQT ROT
Complex Orders on the CBOOK (i.e., size pro rata); or 40% of the
remainder of the order. The specialist is not entitled to receive an
allocation that would exceed the size of the specialist's COLA Sweep.
Firm Quote Requirement for COLA-Eligible Orders
    COLA Sweeps in response to a COLA broadcast would represent non-
firm interest that can be modified at any time prior to the end of the
COLA Timer. At the end of the COLA Timer, a COLA Sweep would be firm
only with respect to the COLA-eligible order for which it is submitted,
provided that COLA Sweeps that have size remaining after the COLA-
eligible order is exhausted are also eligible to trade with other
incoming COLA-eligible orders in the auction queue that are received
during the COLA Timer after the initial COLA-eligible order has been
executed in its entirety. Any COLA Sweeps not accepted in whole or in a
permissible ratio will expire at the end of the COLA Timer.
Complex Orders Resting on the CBOOK
    The proposed rule describes the handling of Complex Orders resting
on the CBOOK, and incoming electronic Complex Orders that are received
prior to the expiration of the COLA Timer (collectively, for purposes
of this rule, ``incoming Complex Orders'') representing the same
Complex Order Strategy as a COLA-eligible order. At the end of the COLA
Timer, the Phlx XL system will determine the price and size of COLA
Sweeps and any orders that were received during the COLA Timer that are
unrelated to the COLA but nonetheless are eligible to participate in
the COLA as set forth below.
Same Side of the Market as COLA-Eligible Order
    Incoming Complex Orders that were received during the COLA Timer
for the same Complex Order Strategy as the COLA-eligible order that are
on the same side of the market will join the COLA. The original COLA-
eligible order has priority at all price points (i.e., multiple COLA
Sweep Prices) over the incoming Complex Order(s), regardless of the
price of the incoming Complex Order. Therefore, the incoming Complex
Order would not be eligible for execution until the COLA-eligible order
is executed in its entirety. The purpose of this provision is to
provide incentive for, and to reward, customers who submit initial
COLA-eligible orders by systemically completing the COLA for such an
order. In this manner, the entire order may benefit from COLA Sweeps

and price-improving orders on the opposite side of the market. The
Exchange further believes that affording priority to the initial COLA-
eligible order at all price points submitted for the same Complex Order
Strategy fosters a fair and orderly marketplace, is more
technologically sound, and will eliminate the potentially disruptive
effect of other market participants bidding or offering in penny
increments for the purpose of taking advantage of COLA Sweeps and
price-improving orders submitted for execution against the original
COLA-eligible order without having submitted an initial Complex Order
that improves the cPBBO (and thus becomes a COLA-eligible order).
    Incoming Complex Orders on the same side of the market as a COLA-
eligible order are eligible for execution once the entire COLA-eligible
order has been executed. Once the COLA-eligible order has been executed
in its entirety, additional Complex Orders on the same side of the
market as the COLA-eligible order will be executed (if at all) at each
price level in the order in which they were received. If such incoming
Complex Orders are not executed in their entirety, any remaining
contracts will not be considered a COLA-eligible order and the Phlx XL
system will place such remaining bids or offers on the CBOOK, subject
to other instructions. If the incoming Complex Order is not executed in
its entirety, the system will not initiate a new COLA. Any remaining
contracts will be placed on the CBOOK, subject to other instructions.
    If no COLA Sweeps or Complex Orders for the same Complex Order
Strategy as the COLA-eligible order were received during the COLA
Timer, each component of the COLA-eligible order may trade at the PBBO
with existing quotes and/or limit orders on the limit order book for
the individual components of the Complex Order, provided that each
component is executed such that the components comprise the Complex
Order Strategy with the correct ratio for the desired net debit or
credit.
    Trades involving the individual components of a Complex Order would
be allocated in accordance with Exchange Rule 1014(g)(vii).\19\ An SQT
or RSQT quoting all components of the Complex Order would have priority
over SQTs and RSQTs quoting a single component, but not over customer
orders.
---------------------------------------------------------------------------

    \19\ Phlx Rule 1014(g)(vii) is the allocation algorithm
applicable to trades executed on Phlx XL.
---------------------------------------------------------------------------

Customer Complex Orders--Opposite Side of the Market
    Incoming customer Complex Orders that are received during the COLA
Timer on the opposite side of the market from the COLA-eligible order
with a price equal to or better than the best COLA Sweep Price will be
executed against the COLA-eligible order (which will be executed in its
entirety first as described in sub-paragraph (B) above) as follows:
     If such incoming customer Complex Order is a limit order
at the same price as the best COLA Sweep Price, the incoming Complex
Order will be executed at the Sweep Price.
     If such incoming Complex Order is a limit order that
improved the best COLA Sweep Price, the incoming customer Complex Order
will be executed at the mid-point of the best COLA Sweep Price and the
limit order price, rounded, if necessary, to the closest minimum
trading increment to the benefit of the COLA-eligible order.
     If such incoming customer Complex Order is a market order
or a limit order that crosses the cPBBO, the incoming Complex Order
will be executed at the mid-point of the cPBBO on the same side of the
market as the COLA-eligible order and the best Sweep Price, rounded, if
necessary, to the closest minimum trading increment to the benefit of
the COLA-eligible order.
     If multiple customer Complex Orders are received on the
opposite side of the market from the COLA-eligible order, such orders
will be executed in the order in which they were received at each price
level.
     If the COLA-eligible order is executed in its entirety and
there are remaining bids or offers from the incoming Complex Order(s),
the Phlx XL system will place such bids or offers onto the CBOOK,
subject to other instructions.
Non-Customer Complex Orders--Opposite Side of the Market
    Incoming non-customer Complex Orders that are received during the
COLA Timer on the opposite side of the market from the COLA-eligible
order with a price equal to or better than the best COLA Sweep Price
will be executed against the COLA-eligible order as follows:
     If such incoming non-customer Complex Order is a limit
order at the same price as the best COLA Sweep Price, the incoming non-
customer Complex Order will be executed at the Sweep Price.
     If such incoming non-customer Complex Order is a limit
order that improved the best COLA Sweep Price, the incoming non-
customer Complex Order will be executed at the limit order price.
     If such incoming non-customer Complex Order is a market
order or a limit order that crosses the cPBBO, the incoming non-
customer Complex Order will be executed at a price of $0.01 better than
the cPBBO on the same side of the market as the COLA-eligible order.
     If multiple non-customer Complex Orders are received on
the opposite side of the market from the COLA-eligible order, such
orders will be executed in the order in which they were received at
each price level.
     If the COLA-eligible order is executed in its entirety and
there are remaining bids or offers from the incoming non-customer
Complex Order(s), the Phlx XL system will place such bids or offers
onto the CBOOK, subject to other instructions.
    Incoming Complex Orders that were received during the COLA Timer on
the opposite side of the market from the COLA-eligible order with a
price inferior to any other COLA Sweep Price(s) will be executed
against the COLA-eligible order after all interest at the better COLA
Sweep Price(s) has/have been executed. The system will treat any
unexecuted remaining contracts in the incoming Complex Order as a new
Complex Order, and will not initiate a new COLA. Such unexecuted
remaining contracts will be placed on the CBOOK, subject to other
instructions.
CBOOK
    Non-broker-dealer customer Complex Orders and non-market marker
broker-dealer orders are eligible for entry into the CBOOK and may be
designated as Day or GTC. Complex Orders may be entered onto the CBOOK
in increments of $0.01. The individual components of a Complex Order
may be executed in minimum increments of $0.01, regardless of the
minimum increments applicable to such components. Such orders will be
placed on the CBOOK by the system when the following conditions exist:
     The Complex Order does not price-improve upon the cPBBO;
     The order is received before the expiration of the COOP;
     When the Complex Order is received during a trading halt
on the Exchange for any component of the Complex Order;
     When the Complex Order is received while the Exchange's
automated execution system is

disengaged for any component of such Complex Order;
     When any component of the Complex Order is a pre-opening
order; or
     When the Complex Order is received during the final 10
seconds of the trading session.
    A COLA-eligible order designated as ineligible for execution in the
COLA at a price that is inferior to the NBBO at the time of execution
for the individual components of the Complex Order Strategy that is the
subject of the COLA-eligible order may not be so designated once placed
onto the CBOOK. Therefore, any Complex Order initially so designated
would lose this designation once placed onto the CBOOK.
Execution of Complex Orders in the CBOOK
    Complex Orders will be automatically executed against orders on the
CBOOK in price priority and in time priority at the same price. A
Complex Order resting on the CBOOK will execute automatically against:
(i) Quotes or orders on the limit order book for the individual
components of the order, provided that the Complex Order can be
executed in full or in a permissible ratio by such quotes or orders
(allocated in accordance with Phlx Rule 1014(g)(vii), and an SQT or
RSQT quoting all components of the Complex Order will have priority
over SQTs and RSQTs quoting a single component, but not over customer
orders); or (ii) an incoming marketable Complex Order(s) that do(es)
not trigger a COLA Timer, whichever arrives first.
    An incoming marketable Complex Order that does not trigger a COLA
Timer will execute in the following order:
     First, against quotes or orders on the limit order book
for the individual components of the order (provided that the Complex
Order can be executed in full or in a permissible ratio by such quotes
or orders). Trades executed pursuant to this provision will be
allocated in accordance with current Phlx Rule 1014(g)(vii), which sets
forth the allocation algorithm for electronic trades. An SQT or RSQT
quoting all components of the Complex Order will have priority over
SQTs and RSQTs quoting a single component, but not over customer
orders.
     Second, against non-broker-dealer customer Complex Orders
and non-market maker broker-dealer Complex Orders resting in the CBOOK
in price priority and, at the same price, against (i) non-broker-dealer
customer Complex Orders in the order in which they were received; and
(ii) non-market-maker broker-dealer Complex Orders on a size pro rata
basis, provided that any execution pursuant to paragraph (f)(iii)(B)(2)
complies with the requirements of Phlx Rule 1033(d).\20\
---------------------------------------------------------------------------

    \20\ See note 18, supra.
---------------------------------------------------------------------------

    A non-broker-dealer customer Complex Order will have priority over
specialists, SQTs, and RSQTs and off-floor broker-dealers bidding for
and/or offering any component(s) of the Complex Order Strategy at the
same price, but not over non-broker-dealer customer orders representing
any component(s) of the Complex Order Strategy at the same price.
Open Outcry
    Phlx members and Phlx XL participants quoting and trading in open
outcry would not be eligible to participate in the electronic Complex
Order system. In order to participate, such members and Phlx XL
participants must submit COLA Sweeps and/or responsive Complex Orders
electronically.
Phlx XL Strategy Price Protection
    The Exchange recognizes two Complex Order Strategies that could
cause undue risk to market participants. In order to address these
strategies, the Exchange has developed a program in the Phlx XL system
known as Phlx XL Strategy Price Protection (``SPP''). SPP is a feature
of Phlx XL that prevents certain Complex Order Strategies from trading
at prices outside of pre-set standard limits. SPP will apply only to
Vertical Spreads and Time Spreads, as defined below. Vertical Spreads
have a quantifiable minimum and maximum value. Time Spreads have a
quantifiable minimum value. SPP ensures that neither of these
strategies will trade outside of these quantifiable values by more than
a pre-set amount, as described below.
Vertical Spread
    A Vertical Spread is a Complex Order Strategy consisting of the
purchase of one call (put) option and the sale of another call (put)
option overlying the same security that have the same expiration but
different strike prices. The SPP will calculate the maximum possible
value of a Vertical Spread by subtracting the value of the lower strike
price from the value of the higher strike price as between the two
components. For example, a Vertical Spread consisting of the purchase
of one January 30 call and the sale of one January 35 call would have a
maximum value of $5.00. The minimum possible value of a Vertical Spread
is always zero.
    The SPP will ensure that a Vertical Spread will not trade at a net
price of less than the minimum possible value (minus a pre-set value
setting an acceptable range) or greater than the maximum possible value
(plus a pre-set value setting an acceptable range). The pre-set value
and acceptable range will be uniform for all options traded on the
Exchange as determined by the Exchange and communicated to the
membership by Exchange Circular.
Time Spread
    A Time Spread is a Complex Order Strategy consisting of the
purchase of one call (put) option and the sale of another call (put)
option overlying the same security that have different expirations but
the same strike price. The maximum possible value of a Time Spread is
unlimited. The minimum possible value of a Time Spread is zero. The SPP
will ensure that a Time Spread will not trade at a price of less than
zero, minus a pre-set value setting an acceptable range.
    If the limits set forth above would be violated by an execution,
the system will place the Complex Order on the CBOOK.
2. Statutory Basis
    The Phlx believes that its proposal is consistent with Section 6(b)
of the Act,\21\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\22\ 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 establishing a system and rules that permit the automated
handling of Complex Orders, and providing a price improving auction for
Complex Orders that is fair, orderly, and results in customers
receiving timely and quality executions on the Phlx.
---------------------------------------------------------------------------

    \21\ 15 U.S.C. 78f(b).
    \22\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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.

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 35 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 Phlx consents, the Commission will:
    (A) By order approve 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 e-mail to<EMAIL_ADDRESS>Please include
File Number SR-Phlx-2008-50 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-2008-50. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Phlx. 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-2008-50 and should be
submitted on or before July 31, 2008.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
---------------------------------------------------------------------------

    \23\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-15698 Filed 7-9-08; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register Volume 83, Number 170 (Friday, August 31, 2018)]
[Notices]
[Pages 44684-44685]
[FR Doc No: 2018-18895]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83958; File No. SR-CboeEDGX-2018-039]

Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Delete Obsolete Language Regarding the Timing of Listing Long-Term
Options Series

August 27, 2018.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on August 24, 2018, Cboe EDGX Exchange, Inc. (the ``Exchange'' or
``EDGX'') 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.
---------------------------------------------------------------------------

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

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

    The Exchange is proposing to amend Rules 19.8 and 29.11.
    The text of the proposed rule change is available at the Exchange's
website at www.markets.cboe.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 parts of such
statements.

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

1. Purpose
    The purpose of this proposed rule change is to amend Rules 19.8 and
29.11 to delete now obsolete operational language, which dates back to
when long-term options contracts were first adopted. This language
provides that when a new equity or index long-term options contract
series, as applicable, is listed, such series will be opened for
trading either when there is buying or selling interest, or 40 minutes
prior to the close, whichever occurs first. No quotations will be
posted for such option series until they are opened for trading. The
Exchange proposes to delete this language because when this language
was adopted, long-term options contracts were not opened for trading
until late in the trading day unless there was buying or selling
interest. Today, however, technological improvements \3\ allow the
Exchange to open all long-term options contract series at the same time
as all other series in an option class.\4\
---------------------------------------------------------------------------

    \3\ Historically, market participants needed to manually adjust
pricing models when a new long-term options contract series was
added, which was time-consuming and created pricing risk. Market
participants' systems are able to incorporate series added intraday
in an automatic, and thus more timely, manner. Therefore, any
previous operational concerns related to the historic manual process
have been alleviated.
    \4\ See Rule 19.6(a)-(c) and 29.11(c).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\5\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \6\ requirements that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest. Additionally,
the Exchange believes the proposed rule change is consistent with

the Section 6(b)(5) \7\ requirement that the rules of an exchange not
be designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
    \7\ Id.
---------------------------------------------------------------------------

    In particular, the Exchange believes the proposed rule change will
remove impediments to and perfect the mechanism of a free and open
market and a national market system, because deleting obsolete rules
will more clearly identify for market participants currently applicable
rules.\8\ The Exchange believes the proposed rule change will eliminate
confusion regarding which rules apply to current trading, which
ultimately protects investors and the public interest. Additionally,
two other options exchanges recently deleted the same provision.\9\
---------------------------------------------------------------------------

    \8\ See Rule 19.6(a)-(c) and 29.11(c).
    \9\ See Securities Exchange Act Release Nos. 83909 (August 22,
2018) (SR-CBOE-2018-061); and 83837 (August 14, 2018), 83 FR 42183
(August 20, 2018) (SR-NYSEArca-2018-59).
---------------------------------------------------------------------------

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 proposed rule change
deletes an obsolete operation rule, which no longer applies, and thus
will have no impact on trading. Therefore, the proposed rule change has
no impact on competition. The proposed rule change eliminates confusion
with respect to rules applicable to current trading on the Exchange.
Additionally, two other options exchanges recently deleted the same
provision.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others

    The Exchange neither solicited nor received comments on the
proposed rule change.

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 \10\ and Rule 19b-
4(f)(6) thereunder.\11\
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4. 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.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \12\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\13\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing. The Commission notes that
the Exchange's proposal would delete obsolete rule text and conform the
Exchange's rules to the rules of other exchanges.\14\ Accordingly, the
Commission believes that the proposal raises no new or novel regulatory
issues and waiver of the 30-day operative delay is consistent with the
protection of investors and the public interest. The Commission
therefore waives the 30-day operative delay and designates the proposed
rule change to be operative upon filing.\15\
---------------------------------------------------------------------------

    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ 17 CFR 240.19b-4(f)(6)(iii).
    \14\ See supra note 9.
    \15\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

    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.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposal 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 No. SR-CboeEDGX-2018-039 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 No. SR-CboeEDGX-2018-039. 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 a.m. and 3
p.m. Copies of the filing will also 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 No. SR-CboeEDGX-2018-039 and should be submitted
on or before September 21, 2018.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-18895 Filed 8-30-18; 8:45 am]
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Comment Info: =================

General Comment:My name is Tina Brown and this is my testimony as to how vaping has helped me to quit smoking. My husband first started vaping at the beginning of this year. I was very reluctant to start vaping myself. I fought it for about a month before he wore me down. I enjoyed smoking I actually loved it. I also found that I was shorter on breath and was sluggish every day. When I started vaping within a week I could breath better, I had more energy. I could actually go out and play with my kids and my dogs. I am proud to say I have no had a full cigarette in over five months. I can honestly say vaping probably saved my life. I have heard that many people are trying to say that e-cigs are more harmful than actual cigarettes. I don not see that as a truth. With the "juice" I know what is going into my lungs, with cigarettes I have no idea all of the chemicals and preservatives that the tobacco companies are adding. In short I am here to say I support e-cigs and vaping 100%. Thank you for your time and the time you hopefully take to read this statement.

 A 75 day comment period is insufficient time for the vaping industry and the wider vaping community to comment on the proposed deeming regulations. I would respectfully request that the period for comment be extended to 180 days.


[Federal Register: September 23, 2009 (Volume 74, Number 183)]
[Notices]
[Page 48543-48544]
[DOCID:fr23se09-55]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OAR-2007-1145; FRL-8959-6]

Final Risk and Exposure Assessment Report for Secondary National
Ambient Air Quality Standards for Oxides of Nitrogen and Oxides of
Sulfur

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of availability of final report.

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SUMMARY: On or about September 15, 2009, the Office of Air Quality
Planning and Standards (OAQPS) of EPA is making available a final
report, Risk and Exposure Assessment for Review of the Secondary
National Ambient Air Quality Standards for Oxides of Nitrogen and
Oxides of Sulfur: Final Report. The purpose of this document is to
convey the approach taken to assess environmental exposures to ambient
oxides of nitrogen and sulfur and to characterize associated public
welfare risks, as well as to present the results of those assessments.

FOR FURTHER INFORMATION CONTACT: Dr. Anne Rea, Office of Air Quality
Planning and Standards (Mail code C539-02), U.S. Environmental
Protection Agency, Research Triangle Park, NC 27711; e-mail:
<EMAIL_ADDRESS>telephone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>.

General Information

A. How Can I Get Copies of This Document and Other Related Information?

    1. Docket. EPA has established a docket for this action under
Docket ID No. EPA-HQ-OAR-2007-1145. Publicly available docket materials
are available either electronically through http://www.regulations.gov
or in hard copy at the EPA Docket Center (EPA/DC), EPA West, Room 3334,
1301 Constitution Ave., NW., Washington, DC. The EPA Docket Center
Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through
Friday, excluding legal holidays. The telephone number for the Public
Reading Room is<PHONE_NUMBER>, and the telephone number for the Office
of Air and Radiation Docket is<PHONE_NUMBER>.
    2. Electronic Access. You may access this Federal Register document
electronically through the EPA Internet under the ``Federal Register''
listings at http://www.epa.gov/fedrgstr/.
    Under section 108(a) of the Clean Air Act (CAA), the Administrator
identifies and lists certain pollutants which ``cause or contribute to
air pollution which may reasonably be anticipated to endanger public
health or welfare.'' The EPA then issues air quality criteria for
listed pollutants, which are commonly referred to as ``criteria
pollutants.'' The air quality criteria are to ``accurately reflect the
latest scientific knowledge useful in indicating the kind and extent of
all identifiable effects on public health or welfare which may be
expected from the presence of [a] pollutant in the ambient air, in
varying quantities.'' Under section 109 of the CAA, EPA establishes
National Ambient Air Quality Standards (NAAQS) for each listed
pollutant, with the NAAQS based on the air quality criteria. Section
109(d) of the CAA requires periodic review and, if appropriate,
revision of existing air quality criteria. The revised air quality
criteria reflect advances in scientific knowledge on the effects of the
pollutant on public health or welfare. The EPA is also required to
periodically review and revise the NAAQS, if appropriate, based on the
revised criteria.
    The EPA is currently conducting a joint review of the existing
secondary (welfare-based) NAAQS for oxides of nitrogen (NOX)
and oxides of sulfur (SOX). Because NOX,
SOX, and their associated transformation products are linked
from an atmospheric chemistry perspective as well as from an
environmental effects perspective, and because of the National Research
Council's (NRC's) 2004 recommendations to consider multiple pollutants
in forming the scientific basis for the NAAQS, EPA has decided to
jointly assess the science, risks, and policies relevant to protecting
the public welfare associated with oxides of nitrogen and oxides of
sulfur. This is the first time since NAAQS were established in 1971
that a joint review of these two pollutants has been conducted. Since
both the Clean Air Scientific Advisory Committee (CASAC) and EPA have
recognized these interactions historically, and the science related to
these interactions has continued to evolve and grow to the present day,
there is a strong basis for considering them together.
    As part of its review of the secondary NAAQS for NOX and
SOX, EPA is preparing an assessment of exposures and
characterization of risks for adverse ecological effects associated
with atmospheric NOX and SOX deposition. A draft
plan describing the proposed approaches to assessing ecological
exposures and effects is described in the draft document, Draft Scope
and Methods Plan for Risk/Exposure Assessment: Secondary NAAQS Review
for Oxides of Nitrogen and Oxides of Sulfur. This document was released
for public review and comment in March 2008 and was the subject of a
consultation with the CASAC on April 2 and 3, 2008. Comments received
from that consultation were considered in developing the document
titled, Risk and Exposure Assessment to Support the Review of the
Secondary National Ambient Air Quality Standards for Oxides of Nitrogen
and Oxides of Sulfur: First Draft, which was released for public review
and comment in August 2008. This document was the subject of a CASAC
review on October 1-2, 2008. Comments received from that review were
considered in developing the document titled, Risk and Exposure
Assessment to Support the Review of the Secondary National Ambient Air
Quality Standards for Oxides of Nitrogen and Oxides of Sulfur: Second
Draft, which was released for public review and comment in June 2009
and was the subject of a CASAC review on July 22-23, 2009. In preparing
the final risk and exposure assessment report, EPA considered comments
received from CASAC and the public at and subsequent to that meeting.
    The Risk and Exposure Assessment for Review of the Secondary
National Ambient Air Quality Standards for Oxides of Nitrogen and
Oxides of Sulfur: Final Report being released at this time conveys the
approach taken to assess ecological effects due to the deposition of
ambient NOX and SOX,

and presents the results of these analyses. This document will be
available online at: http://www.epa.gov/ttn/naaqs/standards/no2so2sec/
cr_rea.html.

    Dated: September 14, 2009.
Jennifer Noonan Edmonds,
Acting Director, Office of Air Quality Planning and Standards.
[FR Doc. E9-22951 Filed 9-22-09; 8:45 am]

BILLING CODE 6560-50-P