[Federal Register Volume 78, Number 57 (Monday, March 25, 2013)]
[Notices]
[Page 17969]
[FR Doc No: 2013-06713]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69173; File No. SR-FINRA-2013-013]

Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Designation of a Longer Period for
Commission Action on Proposed Rule Change To Require Members To Report
OTC Equity Transactions as Soon as Practicable, But No Later Than 10
Seconds, Following Execution

March 19, 2013.
    On February 1, 2013, the Financial Industry Regulatory Authority,
Inc. (``FINRA'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to amend FINRA trade reporting rules. The proposed
rule change was published for comment in the Federal Register on
February 12, 2013.\3\ The Commission received five comment letters on
the proposal.\4\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 68842 (February 6,
2013), 78 FR 9963.
    \4\ See Letter from Christopher Nagy, President, KOR Trading LLC
to Elizabeth M. Murphy, Secretary, Commission, dated March 5, 2013;
Letter from David J. Amster, Chief Compliance Officer, CRT Capital
Group to the Commission, dated March 5, 2013; Letter from David S.
Sieradzki, Partner, Bracewell & Giuliani LLP on behalf of GFI
Securities LLC to Elizabeth M. Murphy, Secretary, Commission, dated
March 5, 2013; Letter from Manisha Kimmel, Executive Director,
Financial Information Forum to Elizabeth M. Murphy, Secretary,
Commission, dated March 6, 2013; and Letter from Theodore R. Lazo,
Managing Director and Associate General Counsel, Securities Industry
and Financial Markets Association to Elizabeth M. Murphy, Secretary,
Commission, dated March 18, 2013.
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    Section 19(b)(2) of the Act \5\ provides that, within 45 days of
the publication of notice of the filing of a proposed rule change, or
within such longer period up to 90 days as the Commission may designate
if it finds such longer period to be appropriate and publishes its
reasons for so finding or as to which the self-regulatory organization
consents, the Commission shall either approve the proposed rule change,
disapprove the proposed rule change, or institute proceedings to
determine whether the proposed rule change should be disapproved. The
45th day for this filing is March 29, 2013.
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    \5\ 15 U.S.C. 78s(b)(2).
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    The Commission is extending this time period an additional 45
calendar days. The Commission finds it appropriate to designate a
longer period within which to take action on the proposed rule change.
In particular, the extension will ensure that the Commission has
sufficient time to consider and take action on FINRA's proposal, in
light of, among other things, the comments received on the proposal,
and any response to the comments submitted by FINRA.
    Accordingly, the Commission, pursuant to Section 19(b)(2) of the
Act,\6\ designates May 13, 2013 as the date by which the Commission
should either approve or disapprove, or institute proceedings to
determine whether to disapprove, the proposed rule change (File No. SR-
FINRA-2013-013).
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    \6\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(31).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-06713 Filed 3-22-13; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 82, Number 212 (Friday, November 3, 2017)]
[Notices]
[Pages 51313-51317]
[FR Doc No: 2017-23926]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81980; File No. SR-Phlx-2017-34]

Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing
of Amendment No. 1, and Order Granting Accelerated Approval of a
Proposed Rule Change, as Modified by Amendment No. 1, To add an
Exception to Phlx Rule 1000(f)(iii) for Certain Floor Broker
Transactions and add the Snapshot Functionality to the Options Floor
Broker Management System

October 30, 2017.

I. Introduction

    On July 18, 2017, Nasdaq PHLX LLC (``Phlx'' or ``Exchange'') filed
with the Securities and Exchange Commission (``Commission''), pursuant
to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'')
\1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to add an
exception to Phlx Rule 1000(f)(iii) to permit Floor Brokers to execute
(1) multi-leg orders and (2) simple orders in options on Exchange Trade
Funds (``ETFs'') that are included in the Options Penny Pilot,\3\ in
the

trading crowd using ``Snapshot,'' a new functionality Phlx is proposing
for its Floor Broker Management System (``FBMS''). The proposed rule
change was published for comment in the Federal Register on August 1,
2017.\4\ On September 11, 2017, the Commission extended the time period
within which to approve the proposed rule change, disapprove the
proposed rule change, or institute proceedings to determine whether to
approve or disapprove the proposed rule change to October 30, 2017.\5\
On October 17, 2017, the Exchange filed Amendment No. 1 to the proposed
rule change.\6\ The Commission received no comment letters on the
proposed rule change. This order provides notice of filing of Amendment
No. 1 and approves the proposal, as modified by Amendment No. 1, on an
accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Phlx Rule 1034 (defining terms of the Options Penny
Pilot).
    \4\ See Securities Exchange Act Release No. 81230 (July 27,
2016), 82 FR 35858 (``Notice'').
    \5\ See Securities Exchange Act Release No. 81567, 82 FR 43432
(September 15, 2017).
    \6\ See Amendment No. 1, dated October 17, 2017 (``Amendment No.
1''). Amendment No. 1 updated the original filing to: (1) Reflect
the implementation of the new Snapshot functionality prior to the
end of the fourth quarter of 2017; (2) modify the proposal to allow
Floor Brokers 30 seconds within which to submit a provisionally
executed trade and Snapshot to the Trading System, rather than the
15 seconds that was originally proposed; (3) clarify that if a
Snapshot expires, or if the Floor Broker cancels the Snapshot or
expects that the Trading System will reject the Snapshot, the Floor
Broker must re-announce the order to the trading crowd,
provisionally re-execute the order, and take a new Snapshot; (4)
further explain how limit orders on the limit order book will
interact with the Snapshot functionality; and (5) make conforming
changes to Phlx Rule 1064 and Options Floor Procedure Advices and
Order and Decorum Regulations C-2 (``Options Floor Procedure Advice
C-2'' or ``Advice''). To promote transparency of its proposed
amendment, when Phlx filed Amendment No. 1 with the Commission, it
also submitted Amendment No. 1 as a comment letter to the file,
which the Commission posted on its Web site and placed in the public
comment file for SR-Phlx-2017-34 (available at https://www.sec.gov/comments/sr-phlx-2017-34/phlx201734-2642790-161304.pdf). The
Exchange also posted a copy of its Amendment No. 1 on its Web site
at http://nasdaqphlx.cchwallstreet.com/NASDAQPHLXTools/PlatformViewer.asp?selectednode=chp%5F1%5F1%5F1&manual=%2FNASDAQOMXPHLX%2Ffilings%2Fphlx%2Dfilings%2F) when it filed Amendment No.1 with
the Commission.
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II. Description of the Proposal \7\
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    \7\ A more detailed description of the proposal appears in the
Notice and in Amendment No. 1.
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A. Proposed Exception to Phlx Rule 1000(f)

    Currently, Phlx Rule 1000(f) requires that all Exchange options
transactions be executed in one of the following three ways: ``(i)
[a]utomatically by the [Trading System] pursuant to [Phlx] Rule 1080
and other applicable options rules; (ii) by and among members in the
Exchange's options trading crowd none of whom is a Floor Broker; or
(iii) through the Options [FBMS] for trades involving at least one
Floor Broker.'' \8\ Although a Floor Broker may represent orders in the
trading crowd, a Floor Broker is not permitted to execute an order in
the trading crowd unless one of four exceptions applies.\9\ These
exceptions are listed in Phlx Rule 1000(f)(iii)(A)-(D) and permit a
Floor Broker to execute orders in the trading crowd (rather than
through FBMS) if: (A) There is a problem with the Exchange's systems;
(B) the Floor Broker is executing the trade pursuant to Phlx Rule 1059
(``Accommodation Transactions'') or Phlx Rule 1079 (``FLEX Index,
Equity and Currency Options''); (C) the transaction involves a multi-
leg order with more than 15 legs; or (D) the transaction involves
certain types of split-price orders that, due to FBMS system
limitations, require manual calculation.\10\
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    \8\ See Phlx Rule 1000(f).
    \9\ See Phlx Rule 1000(f)(iii).
    \10\ See Phlx Rule 1000(f)(iii)(A)-(D).
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    The Exchange is proposing to add a new exception to Rule
1000(f)(iii).\11\ Proposed Phlx Rule 1000(f)(iii)(E) would permit Floor
Brokers to execute multi-leg orders \12\ and simple orders in options
on ETFs that are included in the Options Penny Pilot in the trading
crowd using ``Snapshot,'' a new functionality that Phlx is proposing to
add to FBMS.\13\
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    \11\ See Notice, supra note 4, at 35860 n.7.
    \12\ As defined in Phlx Rule 1066(f).
    \13\ See proposed Phlx Rule 1000(f)(iii)(E).
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B. Proposed Snapshot Functionality for FBMS

    Under the proposal, Phlx would permit a Floor Broker to use the
Snapshot functionality at the time the Floor Broker ``provisionally
executes'' a trade in the trading crowd that involves a multi-leg order
or a simple order in an option on an ETF that is included in the
Options Penny Pilot.\14\ For purposes of the proposed Phlx Rule
1000(f)(iii)(E) exception, a ``provisional execution'' would occur in
the trading crowd when either (i) the participants to a trade reach a
verbal agreement in the trading crowd as to the terms of the trade, or
(ii) a Floor Broker announces a cross in accordance with Phlx Rule
1064(a).\15\
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    \14\ See proposed Phlx Rule 1063(e)(v)(A)(1). According to the
Exchange, due to system limitations in FBMS, Floor Brokers are not
able to use Snapshot to execute Multi-leg Orders with more than 15
legs. See Amendment No. 1, supra note 6, at 6 and 8.
    \15\ Phlx Rule 1064(a) allows a Floor Broker who holds orders to
buy and to sell the same options series the opportunity to cross
such orders, provided that he or she satisfies certain requirements.
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    According to the Exchange, Snapshot will record the time when a
Floor Broker triggers the functionality and the prevailing market
conditions for an options class or series,\16\ which includes all
information required to determine compliance with priority and trade-
through requirements, including the Away Best Bid and Offer, the
Exchange Best Bid and Offer, customer orders at the top of the Exchange
book, and the best bid and offer of all-or-none orders.\17\ According
to the Exchange, the market conditions captured by Snapshot will be
derived from the same real-time market information that exists in the
Trading System.\18\ At any given time, Phlx would only permit a Floor
Broker to have one Snapshot outstanding across all options classes and
series.\19\
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    \16\ A Floor Broker ``triggers'' the snapshot by pressing a
button in the FBMS and in doing so captures the market conditions
that exist at the time when the Floor Broker provisionally executes
an order in the trading crowd. See Notice, supra note 4, at 35860-
61.
    \17\ See proposed Phlx Rule 1063(e)(v). See also Notice, supra
note 4, at 35860 n.8.
    \18\ See Amendment No. 1, supra note 6, at 6-7.
    \19\ See proposed Phlx Rule 1063(e)(v)(A)(3).
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    After a Floor Broker triggers Snapshot and captures the prevailing
market conditions, the Floor Broker will have no more than 30 seconds
to enter the final terms of the trade into FBMS and then submit the
provisional execution (along with the prevailing price and market
conditions captured by Snapshot for the options class or series) to the
Trading System.\20\ If the Floor Broker fails to submit this
information to the Trading System by way of FBMS within 30 seconds, the
Snapshot will automatically expire and become unavailable.\21\
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    \20\ See Amendment No. 1, supra note 6, at 8. The Exchange
represents that in most instances, 30 seconds will provide ample
time for Floor Brokers to enter their trades into FBMS. See id. at
5.
    \21\ See proposed Phlx Rule 1063(e)(v)(B). See also Amendment
No. 1, supra note 6, at 13. The Exchange represents that every time
a Floor Broker triggers Snapshot, a record of the Snapshot will be
created and retained for audit trail purposes regardless of whether
the Floor Broker submits the provisional execution and Snapshot to
the Trading System. This record is in addition to the record the
Exchange presently creates upon initiation of an order in FBMS.
Moreover, according to the Exchange, when a Floor Broker submits a
trade subject to a Snapshot to the Trading System and the trade is
thereafter reported to the consolidated tape, an additional
execution record will be created and retained for audit trail
purposes that will contain all of the same details as the other
trade records. See Notice, supra note 4, at 35860 n.9.
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    After the Trading System receives the provisional execution, Phlx
proposes that the Trading System will compare the price and terms of
the provisional execution, as entered into FBMS by the Floor Broker,
against the prevailing

market conditions captured by Snapshot for the options class or series
to determine whether the provisional execution is consistent with
applicable priority and trade-through rules.\22\ If the price and terms
of the provisional execution entered into FBMS by the Floor Broker is
consistent with the applicable priority and trade-through rules based
on the market conditions reflected in the Snapshot, the Trading System
would report the trade to the Consolidated Tape; \23\ if not, the
Trading System will reject the provisional execution.\24\ The Exchange
represents that its Trading System's automated process for verifying
trades for priority and trade-through compliance remains unchanged.\25\
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    \22\ See proposed Phlx Rule 1063(e)(v)(C).
    \23\ See proposed Phlx Rule 1063(e)(v)(C)(1).
    \24\ See proposed Phlx Rule 1063(e)(v)(C)(2). See Notice, supra
note 4, at 35863.
    \25\ See Notice, supra note 4, at 35863.
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    Phlx proposes that, if an order is present on the Exchange's limit
order book that has priority at the time a Floor Broker triggers a
Snapshot, the Trading System would not prevent the Floor Broker from
capturing the Snapshot; however, the Trading System would reject the
provisional execution because the order on the limit order book would
have priority.\26\ In these circumstances, Phlx proposes that the Floor
Broker must clear the order with priority on the limit order book, re-
announce and again provisionally execute the Floor Broker's order, and
take a new Snapshot before submitting the new provisional execution and
Snapshot to the Trading System for validation.\27\
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    \26\ See proposed Phlx Rule 1063(e)(v)(C)(3). See also Amendment
No. 1, supra note 6, at 8.
    \27\ See id.
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    Phlx proposes to allow a Floor Broker to take a new Snapshot when
the original Snapshot becomes invalid in the occasional event a
provisional execution pursuant to Phlx Rule 1000(f)(iii)(E) does not
result in a validated execution in the Trading System; however, the
Floor Broker must re-expose the order to the trading crowd before
triggering a new Snapshot. Specifically, proposed Phlx Rule
1063(e)(v)(D) would allow a Floor Broker to obtain a new Snapshot if:
(1) The original Snapshot expires before the Floor Broker submits the
provisional execution to the Trading System; (2) the Trading System
rejects a provisional execution that was subject to a Snapshot; or (3)
the Floor Broker cancels the Snapshot by taking a new Snapshot or
allows the original Snapshot to expire because the Floor Broker
anticipates that the Trading System will reject a provisional
execution.\28\ In each of these three instances, the Floor Broker must
re-announce and provisionally re-execute the order in the trading
crowd, and take a new Snapshot before submitting the new provisional
execution to the Trading System.\29\
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    \28\ See Amendment No. 1, supra note 6, at 10-12 and 13. The
Trading System would reject a provisionally executed order if, for
example, there was an order on the limit order book with priority at
the time the order was provisionally executed in the trading crowed
or the provisionally executed order did not comply with applicable
trade-through rules. See Notice, supra note 4, at 35860-61
(providing examples of orders executed using the Snapshot
functionality) and Amendment No. 1, supra note 6, at 10-12
(providing examples of when a Floor Broker would be permitted to
take a new Snapshot).
    \29\ In this instance, triggering a new Snapshot would cause a
new 30-second Snapshot timer to begin, and the Floor Broker must
submit the new provisionally executed trade and Snapshot to the
Trading System before the end of that 30-second timer. See Amendment
No. 1, supra note 6, at 10-12.
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    Phlx is proposing Phlx Rule 1063(e)(v)(A)(2), and amending Options
Floor Procedure Advice C-2 to specify, that ``[a] Floor Broker is
prohibited from triggering the Snapshot feature for the purpose of
obtaining favorable priority or trade-through conditions or avoiding
unfavorable priority or trade-through conditions.'' \30\ According to
the Exchange, conduct that would violate this Advice includes repeated
instances in which Floor Brokers cancel, or permit valid Snapshots to
expire, without submitting trades subject to Snapshots to the Trading
System for verification and reporting to the consolidated tape.
According to the Exchange, violations would also include repeated
instances in which a Floor Broker takes more time than is reasonably
necessary under the circumstances to submit provisional executions to
the Trading System that are subject to valid Snapshots.\31\ The
Exchange notes that it expects Floor Brokers to submit a provisional
execution that is subject to a Snapshot as quickly as possible,
notwithstanding the existence of the 30-second time frame within which
to do so, and notes that, in most instances, it should not require a
full 30 seconds for a Floor Broker to submit a simple trade or a cross
to the Trading System.\32\ The Exchange represents that its
Surveillance Staff will monitor Floor Brokers' use of the Snapshot
functionality and the Exchange will take appropriate action if it
determines Floor Brokers are abusing the functionality.\33\
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    \30\ See proposed Phlx Rule 1063(e)(v)(A)(2) and Options Floor
Procedure Advice C-2.
    \31\ See Amendment No. 1, supra note 6, at 9 and 12.
    \32\ See id. at 9.
    \33\ See Notice, supra note 4, at 35860. See Amendment No. 1,
supra note 6, at 9 and 12.
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    The Exchange proposes to make the Snapshot functionality available
to its Floor Brokers during the fourth quarter of 2017. The Exchange
represents that it will notify members via an Options Trader Alert,
which will be posted on the Exchange's Web site, at least seven
calendar days prior to the date on which the Snapshot functionality
will be available for use.\34\
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    \34\ See Amendment No. 1, supra note 6, at 12.
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III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule
change, as modified by Amendment No. 1, is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to a national securities exchange.\35\ In particular, the
Commission finds that the proposed rule change is consistent with
Section 6(b)(5) of the Act,\36\ which requires, among other things,
that the rules of a national securities exchange be designed 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 and, in general, to protect investors and the public
interest, and not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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    \35\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
    \36\ 15 U.S.C. 78f(b)(5).
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    The Commission notes that the Exchange's rules require Floor
Brokers to execute transactions through FBMS and prohibit Floor Brokers
from executing orders in the trading crowd unless an exception
applies.\37\ According to the Exchange, however, transactions involving
multi-leg orders and simple orders in options on ETFs in the Options
Penny Pilot that a Floor Broker submits through FBMS are at a
heightened risk of failing to execute when market conditions change
between the time when Floor Brokers and participants in the crowd agree
upon the terms of the trade and the time when the Trading System
receives the trade for verification and execution. In these
circumstances, the Trading System would reject the Floor Broker's trade
because it is inconsistent with the Exchange's priority or trade-
through rules.\38\ To mitigate this risk, the new exception under Phlx
Rule 1000(f)(iii)(E) is designed to permit Floor Brokers to use the
Snapshot

functionality to execute two types of orders in the trading crowd that
they may not otherwise be able to execute successfully under certain
market conditions given the requirements of Phlx Rule 1000(f).
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    \37\ See Phlx Rule 1000(f).
    \38\ See Notice, supra note 4, at 35859.
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    The Commission notes that the Exchange is proposing several
measures to help ensure that Snapshot operates, and is used by Floor
Brokers, in a manner that is consistent with the Exchange Act and Phlx
rules.
    First, Snapshot is designed to capture the market conditions for
the options class or series at the time of the provisional execution,
which will be the time of execution that the Trading System will use
when verifying the price and terms of the provisional execution, as
entered into FBMS by the Floor Broker, for compliance with applicable
priority rules of the Exchange and the trade-through rules of the
Options Order Protection and Locked/Crossed Market Plan.\39\
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    \39\ See Notice, supra note 4, at 35862-63. The Options Order
Protection and Locked/Crossed Market Plan is available at http://www.optionsclearing.com/components/docs/clearing/services/options_order_protection_plan.pdf. The Commission notes that the
Exchange represents that the market conditions provided by Snapshot
are derived from the same real-time market conditions that exist in
the Trading System and that Snapshot will contain all information
necessary for the Trading System to determine that a provisional
execution is consistent with applicable priority and trade-through
rules. See Amendment No. 1, supra note 6, at 6-7.
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    Second, the Exchange has designed Snapshot so that the price and
market conditions captured for the options class or series will expire
within 30 seconds after the Floor Broker triggers it, and so that a
Floor Broker will only be allowed to have one Snapshot outstanding
across all options classes and series at any given time.\40\ As stated
above, the Exchange anticipates that Floor Brokers will enter their
provisional executions as quickly as possible, notwithstanding the
availability of Snapshot and the 30-second Snapshot timer, and in most
instances, 30 seconds will provide ample time for Floor Brokers to
enter provisional executions into FBMS.\41\
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    \40\ See Notice, supra note 4, at 35861. The Exchange notes that
the limitation to only allow Floor Brokers to have one Snapshot
outstanding at any given time across options classes and series
should contribute to preventing Floor Brokers from engaging in
excessive use of and abuse of Snapshot. See Notice, supra note 4, at
35861.
    \41\ See Amendment No. 1, supra note 6, at 5 and 7.
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    Third, to the extent that a Snapshot expires, the Trading System
rejects a provisional execution, or the Floor Broker cancels or permits
a Snapshot to expire, the Floor Broker must re-announce and
provisionally execute the order again in the trading crowd before
taking a new Snapshot.
    Fourth, the Exchange represents that all relevant trade data
resulting from executions pursuant to proposed Phlx Rule
1000(f)(iii)(E) will be recorded in both Snapshot and on a separate
execution record, which will be created once the trade is reported to
the consolidated tape.\42\
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    \42\ See Notice, supra note 4, at 35860 n.9. See also supra note
21.
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    Finally, the Commission notes that the Exchange's rule will
prohibit Floor Brokers from triggering Snapshot for the purpose of
obtaining favorable, or avoiding unfavorable, priority or trade-through
conditions. In addition, the Exchange represents that its surveillance
staff will monitor Floor Brokers for excessive use or abuse for the
Snapshot functionality (e.g., repeated expirations or cancellations of
the Snapshot) and it will take appropriate action if it determines such
instances are occurring.\43\
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    \43\ See Amendment No. 1, supra note 6, at 9 and 12.
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    For the foregoing reasons, the Commission finds that the proposed
rule change, as modified by Amendment No. 1, is consistent with Section
6(b)(5) of the Act and the rules and regulations thereunder applicable
to national securities exchanges.

IV. Solicitation of Comments on Amendment No. 1 to the Proposed Rule
Change

    Interested persons are invited to submit written data, views, and
arguments concerning whether Amendment No. 1 to the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File No. SR-Phlx-2017-34 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-Phlx-2017-34. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filing 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-Phlx-2017-34 and should be
submitted on or before November 24, 2017.

V. Accelerated Approval of Proposed Rule Change, as Modified by
Amendment No. 1

    The Commission finds good cause to approve the proposed rule
change, as modified by Amendment No. 1, prior to the thirtieth day
after the date of publication of notice of the amended proposal in the
Federal Register. As described above, in Amendment No. 1, Phlx (1)
updated its proposal to state that the new Snapshot functionality will
be made available prior to the end of the fourth quarter of 2017; (2)
modified the proposal to allow Floor Brokers 30 seconds within which to
submit a provisionally executed trade and Snapshot to the Trading
System, rather than the 15 seconds that was originally proposed; (3)
further explained how limit orders on the limit order book will
interact with the Snapshot functionality; (4) clarified the
circumstances when a new Snapshot may be taken and the conditions for
doing so; and (5) made conforming changes to Phlx Rule 1064 and Options
Floor Procedure Advice C-2.\44\ The Commission believes that Amendment
No. 1 provided additional specificity regarding the new proposed
exception in Phlx Rule 1000(f)(iii) and the operation of the Snapshot
functionality. Specifically, Amendment

No. 1 eliminated the concept of ``refreshing'' a Snapshot and instead
clarified the specific circumstances in which a Floor Broker will be
permitted to take a new Snapshot and the conditions that must be
satisfied to do so (e.g., re-announcing the order to the trading crowd
and provisionally re-executing the order). The Exchange states that the
changes in Amendment No. 1 simplify the proposal and will make it
easier for the Exchange to administer and surveil the use of the
Snapshot functionality.\45\ In addition, the Commission notes that the
changes may create additional opportunities for orders to interact in
the trading crowd in those occasional instances when a provisional
execution pursuant to Phlx Rule 1000(f)(iii)(E) does not result in a
validated execution in the Trading System. Accordingly, the Commission
finds good cause, pursuant to Section 19(b)(2) of the Act,\46\ to
approve the proposed rule change, as modified by Amendment No. 1, on an
accelerated basis.
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    \44\ See Amendment No. 1, supra note 6, at 3-7.
    \45\ See id. at 5-6.
    \46\ 15 U.S.C. 78s(b)(2)
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VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\47\ that the proposed rule change (SR-Phlx-2017-34), as modified
by Amendment No. 1, be, and it hereby is, approved on an accelerated
basis.
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    \47\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\48\
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    \48\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-23926 Filed 11-2-17; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 88, Number 221 (Friday, November 17, 2023)]
[Proposed Rules]
[Pages 80220-80222]
[FR Doc No: 2023-24668]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 16

[EPA-HQ-OMS-2019-0371; FRL-10082-03-OMS]

Privacy Act Regulations for EPA-83

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA or Agency) is
proposing to revise the Agency's Privacy Act regulations to exempt a
system of records, EPA-83, the Personnel Security System (PSS) 2.0,
from certain requirements of the Privacy Act because the system will
contain information relevant to insider threat inquiries and background
investigations. If such information is not kept confidential, it could
jeopardize EPA or a referring agency's ability to conduct background
investigations, insider threat inquiries, or any related inquiries. In
the ``Rules and Regulations'' section of this Federal Register, EPA is
simultaneously publishing the revision of the Agency's Privacy Act
Regulations to include EPA-83 as a direct final rule without a prior
proposed rule. If the Agency receives no adverse comment, it will not
take further action on this proposed rule.

DATES: Comments must be received on or before December 18, 2023.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OMS-2019-0371, at https://www.regulations.gov/. Follow the online
instructions for submitting comments. Once submitted, comments cannot
be edited or removed from Regulations.gov. The EPA may publish any
comment received to its public docket. Do not submit electronically any
information you consider to be Confidential Business Information (CBI)
or other information whose disclosure is restricted by statute.
Multimedia submissions (audio, video, etc.) must be accompanied by a
written comment. The written comment is considered the official comment
and should include discussion of all points you wish to make. The EPA
will generally not consider comments or comment contents located
outside of the primary submission (i.e., on the web, cloud, or other
file sharing system). For additional submission methods, the full EPA
public comment policy, information about CBI or multimedia submissions,
and general guidance on making effective comments, please visit https://www.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: John Goldsby, Personnel Security
Branch, Environmental Protection Agency, William Jefferson Clinton
North Building, Mail Code 3206A, 1200 Pennsylvania Avenue NW,
Washington, DC 20460; telephone number:<PHONE_NUMBER>; email address:
[email protected].

SUPPLEMENTARY INFORMATION:

I. Why is EPA issuing this proposed rule?

    The EPA proposes to revise the Agency's Privacy Act regulations in
order to exempt a system of records, EPA-83, the Personnel Security
System (PSS) 2.0, from certain requirements of the Privacy Act. The EPA
has published a direct final rule exempting this system of records in
the ``Rules and Regulations'' section of this Federal Register because
it views this as a noncontroversial action and anticipates no adverse
comment. EPA explains its reasons for the direct final rule in the
preamble to that rule. If EPA receives no adverse comment, it will not
take further action on this proposed rule. If EPA receives adverse
comment, it will withdraw the direct final rule and the rule will not
take effect. EPA will address public comments in any subsequent final
rule based on this proposed rule. EPA does not intend to institute a
second comment period on this action. Any parties interested in
commenting must do so at this time. For further information, please see
the information provided in the ADDRESSES section of this document.

II. General Information

    The EPA published a Privacy Act system of records notice for
information collected and maintained in the Personnel Security System
(PSS) 2.0 (85 FR 32380, May 29, 2020), and a Notice of a Modified
System of Records concurrently with this proposed rule. PSS 2.0
supports the Personnel Security Branch (PSB) with tracking the
documentation associated with background investigations for Federal and
non-Federal personnel working for EPA. PSS 2.0 contains investigatory
material compiled for the purpose of determining suitability,
eligibility, or qualifications for Federal civilian employment, Federal
contracts, or access to classified information. Additionally, the PSB
plans to update PSS 2.0 with a new module focused on providing the
agency with insider threat inquiry management and coordination
capabilities. The Insider Threat Program

module will contain information relevant to insider threat inquiries on
cleared individuals with access to EPA resources, including facilities,
information, equipment, networks, and systems. At a later date, and
once relevant authorities are updated, the insider threat module will
also contain information on uncleared individuals with access to EPA
resources. Information maintained in the Insider Threat Program module
may be directly collected by EPA's Office of Homeland Security (OHS) or
may be obtained by OHS from law enforcement agencies or systems.
Specifically, OHS will use the module to detect, deter, and mitigate
potential insider threats before they harm national security. OHS will
collect and maintain information in the module to identify potential
insider threats, which may form the predicate of law enforcement
investigations conducted by other law enforcement entities. Further, if
an inquiry uncovers insider threat indicators, OHS may share relevant
data from the module with authorized law enforcement organizations,
like EPA's Office of Inspector General or the Federal Bureau of
Investigation, for those organizations to conduct any necessary
investigations.
    Pursuant to the Privacy Act, when information is maintained for the
purpose of civil actions, the relevant provision of the Privacy Act is
5 U.S.C. 552a(d)(5) which states ``nothing in this [Act] shall allow an
individual access to any information compiled in reasonable
anticipation of a civil action or proceeding.'' 5 U.S.C. 552a(d)(5).
    In addition, section (k)(2) of the Privacy Act provides that the
head of an agency may promulgate regulations to exempt the system from
certain provisions of the Act if the system ``is investigatory material
compiled for law enforcement purposes, other than material within the
scope of subsection (j)(2)'' of 5 U.S.C. 552a. Accordingly, EPA
proposes to exempt all such records in the PSS 2.0 system (including
certain background investigation records and records maintained in the
Insider Threat module) from 5 U.S.C. 552a(c)(3); (d); and (e)(1);) for
the following reasons:
    (1) From subsection 552a(c)(3), because making available to a named
individual an accounting of disclosures of records concerning him/her/
them would alert the subjects of an investigation or inquiry to the
existence of the investigation or inquiry. This could allow record
subjects to impede the inquiry, e.g., destroy evidence, intimidate
potential witnesses, or flee the area to avoid inquiries or
apprehension by law enforcement personnel. Further, such a disclosure
could reveal the identity of a confidential source and hamper the
Agency's inquiry.
    (2) From subsection 552(d), which requires an agency to permit an
individual to gain access to records pertaining to him/her/them, to
request amendment to such records, to request a review of an agency
decision not to amend such records, and to contest the information
contained in such records. Granting requesters access to information
compiled for insider threat inquiries, PSS 2.0 background investigation
information compiled to investigate personnel/an applicant that is/
would be responsible for law enforcement and/or national security
matters, or other PSS 2.0 information related to such insider threat
inquiries or background investigations could inform the subject of an
investigation/inquiry of an actual or potential criminal violation, of
the existence of that investigation/inquiry, of the nature and scope of
the information or evidence obtained as to their activities, and of the
identity of confidential sources, witnesses, and law enforcement
personnel. Such a disclosure could enable the subject to avoid
detection or apprehension. Specifically, granting access to such
information could seriously impede or compromise an investigation or
inquiry; endanger the physical safety of confidential sources,
witnesses, law enforcement personnel and their families; lead to the
improper influencing of witnesses, the destruction of evidence, or the
fabrication of testimony; and could disclose sensitive or confidential
investigative techniques and procedures.
    (3) From subsections 552a(e)(1), which requires an agency to
collect/maintain only information about an individual that is relevant
and necessary to accomplish a purpose of the Agency, because the
relevance of information obtained in the course of a background
investigation or insider threat inquiry is not always known when
collected. Material that may seem unrelated, or irrelevant when
collected may take on added meaning or significance as the inquiry
progresses. Also, it is appropriate to retain all information that may
aid in establishing patterns of illegal or insider threat activity.
Therefore, it would impede the inquiry process if it were necessary to
assure the relevance of all information obtained at the time of
collection.
    Additionally, pursuant to 5 U.S.C. 552a(k)(5), an individual's
request for access to his or her or their record(s) may be exempt from
specific access provisions of the Privacy Act where the information is
investigatory material compiled solely for the purpose of determining
suitability, eligibility, or qualifications for Federal civilian
employment, military service, Federal contracts, or access to
classified information if disclosure of such material would reveal the
identity of a confidential source who furnished information to the
Government under an express promise that the source's identity would be
kept confidential. Under 5 U.S.C. 552a(k)(5), EPA is proposing to
exempt such materials stored in PSS 2.0 from 5 U.S.C. 552(a)(c)(3) and
(d) for the following reason(s):
    (1) From subsection 552a(c)(3), because an accounting of
disclosures of records concerning the record subject may contain
information about the identity of a confidential source, and if the
Agency was required to disclose this information to the record subject,
such a disclosure would reveal the identity of the confidential source,
endangering the physical safety of the confidential source. Further,
such a disclosure could allow record subjects to impede a background
investigation or insider threat inquiry by contacting and intimidating
confidential sources and those that are potential witnesses.
    (2) From subsection 552a(d), which requires an agency to permit an
individual to gain access to records pertaining to him/her/them, to
request amendment to such records, to request a review of an agency
decision not to amend such records, and to contest the information
contained in such records. Granting such access could cause the
identity of a confidential source to be revealed, endangering the
physical safety of the confidential source, and could impair the
ability of the EPA to compile, in the future, investigatory material
for the purpose of determining suitability, eligibility, or
qualifications for Federal civilian employment, Federal contracts, or
access to classified information.

III. Statutory and Executive Order Reviews

    Additional information about these statutes and Executive orders
can be found at https://www.epa.gov/laws-regulations/laws-and-executive-orders.

A. Executive Order 12866: Regulatory Planning and Review, and Executive
Order 13563: Improving Regulation and Regulatory Review

    This action is being submitted to the Office of Management and
Budget (OMB) for review.

B. Paperwork Reduction Act (PRA)

    This action does not impose an information collection burden under
the PRA. This action contains no provisions constituting a collection
of information under the PRA.

C. Regulatory Flexibility Act (RFA)

    I certify that this action will not have a significant economic
impact on a substantial number of small entities under the RFA. This
action will not impose any requirements on small entities.

D. Unfunded Mandates Reform Act (UMRA)

    This action does not contain any unfunded mandate as described in
UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect
small governments.

E. Executive Order 13132 (Federalism)

    This action does not have federalism implications. It will not have
substantial direct effects on the states, on the relationship between
the National Government and the states, or on the distribution of power
and responsibilities among the various levels of government.

F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments

    This action does not have tribal implications as specified in
Executive Order 13175. Thus, Executive Order 13175 does not apply to
this action.

G. Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks

    The EPA interprets Executive Order 13045 as applying only to those
regulatory actions that concern environmental health or safety risks
that the EPA has reason to believe may disproportionately affect
children, per the definition of ``covered regulatory action'' in
section 2-202 of the Executive order. This action is not subject to
Executive Order 13045 because it does not concern an environmental
health risk or safety risk.

H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use

    This action is not subject to Executive Order 13211, because it is
not a significant regulatory action under Executive Order 12866.

I. National Technology Transfer and Advancement Act

    This rulemaking does not involve technical standards.

J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations

    The EPA believes that this action does not have disproportionately
high and adverse human health or environmental effects on minority
populations, low-income populations and/or indigenous peoples, as
specified in Executive Order 12898 (59 FR 7629, February 16, 1994).

List of Subjects in 40 CFR Part 16

    Environmental protection, Administrative practice and procedure,
Confidential business information, Government employees, Privacy.

Kimberly Y. Patrick,
Principal Deputy Assistant Administrator, Office of Mission Support.

    For the reasons stated in the preamble, title 40, chapter I, part
16 of the Code of Federal Regulations is proposed to be amended as
follows:

PART 16--IMPLEMENTATION OF PRIVACY ACT OF 1974

0
1. The authority citation for part 16 continues to read as follows:

    Authority: 5 U.S.C. 301, 552a (as revised).

0
2. Amend Sec.  16.12 by:
0
a. Revising paragraphs (a)(1), (a)(4)(i), (a)(5) introductory text, and
(b)(1);
0
b. Adding paragraph (b)(4)(iii); and
0
c. Revising paragraph (b)(5) introductory text.
    The revisions and addition read as follows:

 Sec.  16.12  Specific exemptions.

    (a) * * *
    (1) Systems of records affected. (i) EPA-17 Online Criminal
Enforcement Activities Network (OCEAN).
    (ii) EPA-21 External Compliance Case Tracking System (EXCATS).
    (iii) EPA-30 Inspector General Enterprise Management System (IGEMS)
Hotline Module.
    (iv) EPA-40 Inspector General Enterprise Management System (IGEMS)
Investigative Module.
    (v) EPA-63 eDiscovery Enterprise Tool Suite.
    (vi) EPA-79 NEIC Master Tracking System.
    (vii) EPA-100 OIG Data Analytics Enterprise.
    (viii) EPA-83 Personnel Security System (PSS) 2.0.
* * * * *
    (4) * * *
    (i) EPA systems of records 17, 30, 40, 63, 79, and 100 are exempted
from the following provisions of the PA, subject to the limitations set
forth in 5 U.S.C. 552a(k)(2): 5 U.S.C. 552a(c)(3); (d); and (e)(1). EPA
system of records 21 is exempt from the following provisions of the PA,
subject to limitations set forth in 5 U.S.C. 552a(k)(2): 5 U.S.C
552a(c)(3), (d), and (e)(1). EPA system of records 83 is exempt from
the following provisions of the PA, subject to the limitations set
forth in 5 U.S.C. 552a(k)(2): 5 U.S.C. 552a(c)(3); (d); and (e)(1).
* * * * *
    (5) Reasons for exemption. EPA systems of records 17, 21, 30, 40,
63, 79, 83, and 100 are exempted from the provisions of the PA in
paragraph (a)(4) of this section for the following reasons:
* * * * *
    (b) * * *
    (1) Systems of records affected. (i) EPA 36 Research Grant,
Cooperative Agreement, and Fellowship Application Files.
    (ii) EPA 40 Inspector General Enterprise Management System (IGEMS)
Investigative Module.
    (iii) EPA 83 Personnel Security System (PSS) 2.0.
    (iv) EPA 100 OIG Data Analytics Enterprise.
* * * * *
    (4) * * *
    (iii) EPA 83 is exempted from the following provisions of the PA,
subject to the limitations of 5 U.S.C. 552(a)(k)(5): 5 U.S.C.
552a(c)(3), and (d).
* * * * *
    (5) Reasons for exemption. EPA 36, 40, 83, and 100 are exempted
from the above provisions of the PA for the following reasons:
* * * * *

[FR Doc. 2023-24668 Filed 11-16-23; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 77, Number 34 (Tuesday, February 21, 2012)]
[Notices]
[Page 9914]
[FR Doc No: 2012-3885]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings 1

    Take notice that the Commission received the following electric
rate filings:

    Docket Numbers: ER12-420-000.
    Applicants: Consumers Energy Company.
    Description: Response of Consumers Energy Company to January 12,
2012 Deficiency Letter.
    Filed Date: 2/8/12.
    Accession Number: 20120208-5143.
    Comments Due: 5 p.m. ET 2/29/12.

    Docket Numbers: ER12-1025-000.
    Applicants: AEP Texas North Company.
    Description: 20120208 TNC-Kaiser Creek SUA Cancellation to be
effective 1/10/2012.
    Filed Date: 2/8/12.
    Accession Number: 20120208-5081.
    Comments Due: 5 p.m. ET 2/29/12.

    Docket Numbers: ER12-1026-000.
    Applicants: Midwest Independent Transmission System Operator, Inc.
    Description: C005-P11 FCA Filing to be effective 2/9/2012.
    Filed Date: 2/8/12.
    Accession Number: 20120208-5083.
    Comments Due: 5 p.m. ET 2/29/12.

    Docket Numbers: ER12-1027-000.
    Applicants: AEP Texas North Company.
    Description: 20120208 TNC-FRV Bryan Solar IA to be effective 12/28/
2011.
    Filed Date: 2/8/12.
    Accession Number: 20120208-5087.
    Comments Due: 5 p.m. ET 2/29/12.

    Docket Numbers: ER12-1028-000.
    Applicants: Duke Energy Carolinas, LLC.
    Description: Rutherford PPA Filing to be effective 1/1/2011.
    Filed Date: 2/8/12.
    Accession Number: 20120208-5088.
    Comments Due: 5 p.m. ET 2/29/12.

    Docket Numbers: ER12-1029-000.
    Applicants: Midwest Independent Transmission System Operator, Inc.
    Description: 02-08-12 Schedule 31 Annual Update to be effective 4/
9/2012.
    Filed Date: 2/8/12.
    Accession Number: 20120208-5128.
    Comments Due: 5 p.m. ET 2/29/12.

    Docket Numbers: ER12-1030-000.
    Applicants: Spinning Spur Wind LLC, Spinning Spur Interconnect LLC,
Spinning Spur Wind Two LLC.
    Description: Spinning Spur Baseline Common Facilities Agreement and
Company Agreement Filing to be effective 4/8/2012.
    Filed Date: 2/8/12.
    Accession Number: 20120208-5129.
    Comments Due: 5 p.m. ET 2/29/12.

    Take notice that the Commission received the following land
acquisition reports:

    Docket Numbers: LA11-3-000.
    Applicants: Black Hills Power, Inc., Black Hills/Colorado Electric
Utility Company, LP, Black Hills Wyoming, LLC, Cheyenne Light, Fuel and
Power Company, Enserco Energy, Inc.
    Description: Black Hills Utilities submits revised Third Quarter
2011 Site Control Quarterly Filing.
    Filed Date: 2/8/12.
    Accession Number: 20120208-5142.
    Comments Due: 5 p.m. ET 2/29/12.

    The filings are accessible in the Commission's eLibrary system by
clicking on the links or querying the docket number.
    Any person desiring to intervene or protest in any of the above
proceedings must file in accordance with Rules 211 and 214 of the
Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00
p.m. Eastern time on the specified comment date. Protests may be
considered, but intervention is necessary to become a party to the
proceeding.
    eFiling is encouraged. More detailed information relating to filing
requirements, interventions, protests, service, and qualifying
facilities filings can be found at: http://www.ferc.gov/docs-filing/efiling/filing-req.pdf. For other information, call<PHONE_NUMBER>
(toll free). For TTY, call<PHONE_NUMBER>.

    Dated: February 9, 2012.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2012-3885 Filed 2-17-12; 8:45 am]
BILLING CODE 6717-01-P