 [Federal Register Volume 82, Number 159 (Friday, August 18, 2017)] [Notices] [Pages 39466-39469] [FR Doc No: 2017-17436]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81391; File No. SR-BOX-2017-27]

Self-Regulatory Organizations; BOX Options Exchange LLC; Notice

of Filing and Immediate Effectiveness of a Proposed Rule Change To

Amend BOX Rule 5050 (Series of Options Contracts Open for Trading), IM-

5050-1, To Include the iShares S&P 500 Index ETF in the List of

Exchange-Traded Funds Eligible for $1 Strike Price Intervals

August 14, 2017.

    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 August 10, 2017, BOX Options Exchange LLC (``BOX'' or the

``Exchange'') filed with the Securities and Exchange Commission

(``Commission'') the proposed rule change as described in Items I and

II below, which Items have been prepared by the self-regulatory

organization. The Commission is publishing this notice to solicit

comments on the proposed rule change from interested persons.

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    \1\ 15 U.S.C. 78s(b)(1).

    \2\ 17 CFR 240.19b-4.

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

of the Proposed Rule Change

    The Exchange proposes to amend BOX Rule 5050 (Series of Options

Contracts Open for Trading), IM-5050-1, to include the iShares S&P 500

Index ETF (``IVV'') in the list of Exchange-Traded Funds (``ETFs'')

that are eligible for $1 strike price intervals. The text of the

proposed rule change is available from the principal office of the

Exchange, at the Commission's Public Reference Room and also on the

Exchange's Internet Web site at http://boxexchange.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 self-regulatory organization

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 self-regulatory organization

has prepared summaries, set forth in Sections A, B, and C below, of the

most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule Change

1. Purpose

    The Exchange proposes to amend BOX Rule 5050 (Series of Options

Contracts Open for Trading), to modify the strike setting regime for

IVV options by including IVV in the list of ETFs that are eligible for

$1 strike price intervals under IM-5050-1(b). This is a competitive

filing that is based on an immediately effective filing recently

submitted by the Chicago Board Options Exchange, Incorporated

(``CBOE'').\3\

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    \3\ See Securities Exchange Act Release No. 80913 (June 13,

2017), 82 FR 27907 (June 19, 2017) (SR-CBOE-2017-048).

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    Specifically, the Exchange proposes to modify the interval setting

regime for IVV options to allow $1 strike price intervals above $200.

The Exchange believes that the proposed rule change would make IVV

options easier for investors and traders to use and more tailored to

their investment needs. Additionally, the interval setting regime the

Exchange proposes to apply to IVV options is currently applied to

options on units of the Standard & Poor's Depository Receipts Trust

(``SPY''),\4\ which is an ETF that is identical in all material

respects to the IVV ETF.

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    \4\ See IM-5050-1(b).

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    The SPY and IVV ETFs are identical in all material respects. The

SPY and IVV ETFs are designed to roughly track the performance of the

S&P 500 Index with the price of SPY and IVV designed to roughly

approximate 1/10th of the price of the S&P 500 Index. Accordingly, SPY

and IVV strike prices having a multiplier of $100 reflect a value

roughly equal to 1/10th of the value of the S&P 500 Index. For example,

if the S&P 500 Index is at 1972.56, SPY and IVV options might have a

value of approximately 197.26 with a notional value of $19,726. In

general, SPY and IVV options provide retail investors and traders with

the benefit of trading the broad market in a manageably sized contract.

As options with an ETF underlying, SPY and IVV options are listed in

the same manner as equity options under the Rules.

    However, under current IM-5050-1(d), the interval between strike

prices in series of options on Index-Linked Securities,\5\ as defined

in Rule 5020(k), will be $1 or greater where the strike price is $200

or less and $5 or greater where the strike price is greater than

$200. In addition, under IM-5050-6(b)(5),

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    \5\ The Exchange notes that IVV is treated as an Index-Linked

Security under current Exchange rules.

    The interval between strike prices on Short Term Option Series

may be (i) $0.50 or greater where the strike price is less than

$100, and $1 or greater where the strike price is between $100 and

$150 for all option classes that participate in the Short Term

Options Series Program; (ii) $0.50 for option classes that trade in

one dollar increments in Related non-short Term Options and are in

the Short Term Option Series Program; or (iii) $2.50 or greater

where the strike price is above $150. During the month prior to

expiration of an option class that is selected for the Short Term

Option Series Program pursuant to this rule (Short Term Option), the

strike price intervals for the related non- Short Term Option shall

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be the same as the strike price intervals for the Short Term Option.

    The Exchange's proposal seeks to narrow the strike price intervals

to $1 for IVV options above $200, in effect matching the strike setting

regime for strike intervals in IVV options below $200 and matching the

strike setting regime applied to SPY options.

    Currently, the S&P 500 Index is above 2000. The S&P 500 Index is

widely regarded as the best single gauge of large cap U.S. equities and

is widely quoted as an indicator of stock prices and investor

confidence in the securities market. As a result, individual investors

often use S&P 500 Index-related products to diversify their portfolios

and benefit from market trends. Accordingly, the Exchange believes that

offering a wider range of S&P 500 Index-based option strikes affords

traders and investors important hedging and trading opportunities. The

Exchange believes that not having the proposed $1 strike price

intervals above $200 in IVV significantly constricts investors' hedging

and trading possibilities.

    The Exchange proposes to amend IM-5050-1(b) to allow IVV options to

trade in $1 increments above a strike price of $200. Specifically, the

Exchange proposes to amend IM-5050-1(b) to state that,

``[n]otwithstanding any other provision regarding the interval of

strike prices of series of options on Exchange-Traded Fund Shares in

this rule, the interval of strike prices on SPDR S&P 500 ETF (``SPY''),

iShares S&P 500 Index ETF (``IVV''), and the SPDR Dow Jones Industrial

Average ETF (``DIA'') options will be $1 or greater.'' The Exchange

believes that by having smaller strike intervals in IVV, investors

would have more efficient hedging and trading opportunities due to the

lower $1 interval ascension. The proposed $1 intervals, particularly

above the $200 strike price, will result in having at-the-money series

based upon the underlying moving less than 1%. The Exchange believes

that the proposed strike setting regime is in line with the slower

movements of broad-based indices. Furthermore, the proposed $1

intervals would allow option trading strategies (such as, for example,

risk reduction/hedging strategies using IVV weekly options), to remain

viable. Considering the fact that $1 intervals already exist below the

$200 price point and that IVV is above the $200 level, the Exchange

believes that continuing to maintain the artificial $200 level (above

which intervals increase 500% to $5), would have a negative effect on

investing, trading and hedging opportunities, and volume. The Exchange

believes that the investing, trading, and hedging opportunities

available with IVV options far outweighs any potential negative impact

of allowing IVV options to trade in more finely tailored intervals

above the $200 price point.

    The proposed strike setting regime would permit strikes to be set

to more closely reflect values in the underlying S&P 500 Index and

allow investors and traders to roll open positions from a lower strike

to a higher strike in conjunction with the price movement of the

underlying. Under the current rule, where the next higher available

series would be $5 away above a $200 strike price, the ability to roll

such positions is effectively negated. Accordingly, to move a position

from a $200 strike to a $205 strike under the current rule, an investor

would need for the underlying product to move 2.5%, and would not be

able to execute a roll up until such a large movement occurred. With

the proposed rule change, however, the investor would be in a

significantly safer position of being able to roll his open options

position from a $200 to a $201 strike price, which is only a 0.5% move

for the underlying. The proposed rule change will allow the Exchange to

better respond to customer demand for IVV strike prices more precisely

aligned with current S&P 500 Index values. The Exchange believes that

the proposed rule change, like the other strike price programs

currently offered by the Exchange, will benefit investors by providing

investors the flexibility to more closely tailor their investment and

hedging decisions using IVV options.

    By allowing series of IVV options to be listed in $1 intervals

between strike prices over $200, the proposal will moderately augment

the potential total number of option series available on the Exchange.

However, the Exchange believes it and the Options Price Reporting

Authority (``OPRA'') have the necessary systems capacity to handle any

potential additional traffic associated with this proposed rule change.

The Exchange also believes that Participants will not have a capacity

issue due to the proposed rule change. In addition, the Exchange

represents that it does not believe that this expansion will cause

fragmentation of liquidity.

    In addition, the interval setting regime the Exchange proposes to

apply to IVV options is currently applied to options on SPY \6\ 7 [sic]

which is an ETF that is identical in all material respects to the IVV

ETF.

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    \6\ See IM-5050-1(b).

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2. Statutory Basis

    The Exchange believes that the proposal is consistent with the

requirements of Section 6(b) of the Securities Exchange Act of 1934

(the ``Act''),\7\ in general, and Section 6(b)(5) of the Act,\8\ in

particular, in that it is 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 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) \9\ requirement that the

rules of an exchange not be designed to permit unfair discrimination

between customers, issuers, brokers, or dealers.

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    \7\ 15 U.S.C. 78f(b).

    \8\ 15 U.S.C. 78f(b)(5).

    \9\ Id.

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    In particular, the proposed rule change will allow investors to

more easily use IVV options. Moreover, the proposed rule change would

allow investors to better trade and hedge positions in IVV options

where the strike price is greater than $200, and ensure that IVV

options investors are not at a disadvantage simply because of the

strike price.

    The Exchange also believes the proposed rule change is consistent

with Section 6(b)(1) of the Act, which provides that the Exchange be

organized and have the capacity to be able to carry out the purposes of

the Act and the rules and regulations thereunder, and the rules of the

Exchange. The rule change proposal allows the Exchange to respond to

customer demand to allow IVV options to trade in $1 intervals above a

$200 strike price. The Exchange does not believe that the proposed rule

would create additional capacity issues or affect market functionality.

    As noted above, some ETF options trade in wider $5 intervals above

a $200 strike price, whereby options at or below a $200 strike price

trade in $1 intervals. This creates a situation where contracts on the

same option class effectively may not be able to execute certain

strategies such as, for example, rolling to a higher strike price,

simply because of the arbitrary $200 strike price above which options

intervals increase by 500%. This proposal remedies this situation by

establishing an exception to the current interval regime for IVV

options to allow such options to trade in $1 or greater intervals at

all strike prices.

    The Exchange believes that the proposed rule change, like other

strike price programs currently offered by the Exchange, will benefit

investors by giving them increased flexibility to more closely tailor

their investment and hedging decisions. Moreover, the proposed rule

change is consistent with the rules of other exchanges.\10\

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    \10\ See Nasdaq Phlx Rule 1012.05(a)(iv)(C) and CBOE Rule

5.5.08(b).

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    With regard to the impact of this proposal on system capacity, the

Exchange believes it and OPRA have the necessary systems capacity to

handle any potential additional traffic associated with this proposed

rule change. The Exchange believes that its Members will not have a

capacity issue as a result of this proposal. In addition, the interval

setting regime the Exchange proposes to apply to IVV options is

currently applied to options on SPY,\11\ which is an ETF that is

identical in all material respects to the IVV ETF.

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    \11\ See IM-5050-1(b).

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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will

impose any burden on competition not necessary or appropriate in

furtherance of the purposes of the Act. Rather, the Exchange believes

that the proposed rule change will result in additional investment

options and opportunities to achieve the investment and trading

objectives of market participants seeking efficient trading and hedging

vehicles, to the benefit of investors, market participant, and the

marketplace in general. Specifically, the Exchange believes that IVV

options investors and traders will significantly benefit from the

availability of finer strike price intervals above a $200 price point.

In addition, the interval setting regime the Exchange proposes to apply

to IVV options is currently applied to options on SPY,\12\ which is an

ETF that is identical in all material respects to the IVV ETF. Thus,

applying the same strike setting regime to SPY and IVV options will

help level the playing field for options on similar, competing ETFs.

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    \12\ Id.

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C. Self-Regulatory Organization's Statement on Comments on the Proposed

Rule Change Received From Members, Participants, or Others

    The Exchange has 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, the proposed rule

change has become effective pursuant to Section 19(b)(3)(A) of the Act

\13\ and Rule 19b-4(f)(6) thereunder.\14\

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    \13\ 15 U.S.C. 78s(b)(3)(A).

    \14\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)

requires a self-regulatory organization to give the Commission

written notice of its intent to file the proposed rule change, along

with a brief description and the text of the proposed rule change,

at least five business days prior to the date of filing of the

proposed rule change, or such shorter time as designated by the

Commission. The Exchange has satisfied this requirement.

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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the

Act \15\ normally does not become operative for 30 days after the date

of its filing. However, Rule 19b-4(f)(6)(iii) \16\ permits the

Commission to designate a shorter time if such action is consistent

with the protection of investors and the public interest. The Exchange

has asked the Commission to waive the 30-day operative delay because

this proposal permits listing IVV options in a manner permitted by the

Chicago Board Options Exchange, Incorporated,\17\ and will provide

investors with an alternative venue for trading IVV options. The

Commission also notes that the proposed rule change is consistent with

the strike price intervals in IVV options that is permitted on other

exchanges and thus raises no new novel or substantive issues.\18\

Accordingly, the Commission hereby waives the operative delay and

designates the proposal operative upon filing.\19\

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    \15\ 17 CFR 240.19b-4(f)(6).

    \16\ 17 CFR 240.19b-4(f)(6)(iii).

    \17\ See supra note 3.

    \18\ See supra note 10. See also Miami International Securities

Exchange, LLC Rule 404, Interpretations and Policies .10; The Nasdaq

Options Market LLC Rules, Chapter IV, Section 6, Supplementary

Material .01(c).

    \19\ 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).

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    At any time within 60 days of the filing of the proposed rule

change, the Commission summarily may temporarily suspend such rule

change if it appears to the Commission that such action is necessary or

appropriate in the public interest, for the protection of investors, or

otherwise in furtherance of the purposes of the Act. If the Commission

takes such action, the Commission shall institute proceedings to

determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and

arguments concerning the foregoing, including whether the proposed rule

change is consistent with the Act. Comments may be submitted by any of

the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or

     Send an email to<EMAIL_ADDRESS>Please include

File Number SR-BOX-2017-27 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-BOX-2017-27. 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 also will be available for inspection and copying at the

principal office of the Exchange. All comments received will be posted

without change; the Commission does not edit personal identifying

information from submissions. You should submit only information that

you wish to make available publicly. All submissions should refer to

File Number SR-BOX-2017-27 and should be submitted on or before

September 8, 2017.

    For the Commission, by the Division of Trading and Markets,

pursuant to delegated authority.\20\

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    \20\ 17 CFR 200.30-3(a)(12).

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Eduardo A. Aleman,

Assistant Secretary.

[FR Doc. 2017-17436 Filed 8-17-17; 8:45 am]

BILLING CODE 8011-01-P


[Federal Register Volume 77, Number 236 (Friday, December 7, 2012)]
[Rules and Regulations]
[Pages 72966-72968]
[FR Doc No: 2012-29611]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R03-OAR-2010-0154; FRL-9760-1]

Approval and Promulgation of Air Quality Implementation Plans;
Maryland; The 2002 Base Year Emissions Inventory for the Washington
County, MD Nonattainment Area for the 1997 Fine Particulate Matter
National Ambient Air Quality Standard

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is approving the fine particulate matter
(PM2.5) 2002 base year emissions inventory portion of the
Maryland State Implementation Plan (SIP) revision submitted by the
State of Maryland, through the Maryland Department of the Environment
(MDE), on June 6, 2008. The emissions inventory is part of the June 6,
2008 SIP revision that was submitted to meet nonattainment requirements
related to the Washington County, Maryland nonattainment area for the
1997 PM2.5 National Ambient Air Quality Standard (NAAQS)
SIP. EPA is approving the 2002 base year PM2.5 emissions
inventory in accordance with the requirements of the Clean Air Act
(CAA).

DATES: This final rule is effective on January 7, 2013.

ADDRESSES: EPA has established a docket for this action under Docket ID
Number EPA-R03-OAR-2010-0154. All documents in the docket are listed in
the www.regulations.gov Web site. Although listed in the electronic
docket, some information is not publicly available, i.e., confidential
business information (CBI) or other information whose disclosure is
restricted by statute. Certain other material, such as copyrighted
material, is not placed on the Internet and will be publicly available
only in hard copy form. Publicly available docket materials are
available either electronically through www.regulations.gov or in hard
copy for public inspection during normal business hours at the Air
Protection Division, U.S. Environmental Protection Agency, Region III,
1650 Arch Street, Philadelphia, Pennsylvania 19103. Copies of the State
submittal are available at the Maryland Department of the Environment,
1800 Washington Boulevard, Suite 705, Baltimore, Maryland 21230.

FOR FURTHER INFORMATION CONTACT: Asrah Khadr,<PHONE_NUMBER>, or by
email at<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. Background

    On September 26, 2012 (77 FR 59156), EPA published a notice of
proposed rulemaking (NPR) for the State of Maryland. The NPR proposed
approval of the 2002 base year emissions inventory portion of the
Maryland SIP revision. The formal SIP revision was submitted by the
State of Maryland on June 6, 2008 (Revision 08-05).

II. Summary of SIP Revision

    The 2002 base year emissions inventory submitted by MDE on June 6,
2008 includes emissions estimates that cover the general source
categories of point sources, non-road mobile sources, area sources, on-
road mobile sources, and biogenic sources. The pollutants that comprise
the inventory are nitrogen oxides (NOX), volatile organic

compounds (VOCs), PM2.5, coarse particles (PM10),
ammonia (NH3), and sulfur dioxide (SO2). EPA has
reviewed the results, procedures and methodologies for the base year
emissions inventory submitted by MDE. The year 2002 was selected by MDE
as the base year for the emissions inventory per 40 CFR 51.1008(b). A
discussion of the emissions inventory development as well as the
emissions inventory can be found in the June 6, 2008 SIP submittal and
in the NPR. Specific requirements of the base year inventory and the
rationale for EPA's action are explained in the NPR and will not be
restated here. No public comments were received on the NPR.

III. Final Action

    EPA is approving the 2002 base year PM2.5 emissions
inventory as a revision to the Maryland SIP.

IV. Statutory and Executive Order Reviews

A. General Requirements

    Under the CAA, the Administrator is required to approve a SIP
submission that complies with the provisions of the CAA and applicable
Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in
reviewing SIP submissions, EPA's role is to approve state choices,
provided that they meet the criteria of the CAA. Accordingly, this
action merely approves state law as meeting Federal requirements and
does not impose additional requirements beyond those imposed by state
law. For that reason, this action:
     Is not a ``significant regulatory action'' subject to
review by the Office of Management and Budget under Executive Order
12866 (58 FR 51735, October 4, 1993);
     Does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based
on health or safety risks subject to Executive Order 13045 (62 FR
19885, April 23, 1997);
     Is not a significant regulatory action subject to
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) because application of those requirements would be inconsistent
with the CAA; and
     Does not provide EPA with the discretionary authority to
address, as appropriate, disproportionate human health or environmental
effects, using practicable and legally permissible methods, under
Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, this rule does not have tribal implications as specified
by Executive Order 13175 (65 FR 67249, November 9, 2000), because the
SIP is not approved to apply in Indian country located in the state,
and EPA notes that it will not impose substantial direct costs on
tribal governments or preempt tribal law. 804(2).

B. Submission to Congress and the Comptroller General

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. EPA will submit a report containing this action and
other required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register. A major rule cannot
take effect until 60 days after it is published in the Federal
Register. This action is not a ``major rule'' as defined by 5 U.S.C.
804(2).

C. Petitions for Judicial Review

    Under section 307(b)(1) of the CAA, petitions for judicial review
of this action must be filed in the United States Court of Appeals for
the appropriate circuit by February 5, 2013. Filing a petition for
reconsideration by the Administrator of this final rule does not affect
the finality of this action for the purposes of judicial review nor
does it extend the time within which a petition for judicial review may
be filed, and shall not postpone the effectiveness of such rule or
action. This action pertaining to the PM2.5 2002 base year
emissions inventory portion of the Maryland SIP may not be challenged
later in proceedings to enforce its requirements. (See section
307(b)(2).)

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide,
Incorporation by reference, Nitrogen dioxide, Particulate matter,
Reporting and recordkeeping requirements, Sulfur oxides, Volatile
organic compounds.

    Dated: November 21, 2012.
W.C. Early,
Acting Regional Administrator, Region III.

    40 CFR part 52 is amended as follows:

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

0
1. The authority citation for part 52 continues to read as follows:

     Authority:  42 U.S.C. 7401 et seq.

Subpart V--Maryland

0
2. In Sec.  52.1070, the table in paragraph (e) is amended by adding at
the end of the table an entry for 2002 Base Year Emissions Inventory
for the 1997 fine particulate matter (PM2.5) standard to
read as follows:

Sec.  52.1070  Identification of plan.

* * * * *
    (e) * * *

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    Name of non-regulatory SIP      Applicable geographic       State
             revision                        area          submittal date             EPA approval date                    Additional explanation
--------------------------------------------------------------------------------------------------------------------------------------------------------

                                                                      * * * * * * *
--------------------------------------------------------------------------------------------------------------------------------------------------------
2002 Base Year Emissions Inventory  Washington County,             6/6/08  12/7/12 [Insert page number where the   Sec.   52.1075(m)
 for the 1997 fine particulate       Maryland 1997 PM2.5                    document begins].
 matter (PM2.5) standard.            nonattainment area.
--------------------------------------------------------------------------------------------------------------------------------------------------------

0
3. In Sec.  52.1075, paragraph (m) is added to read as follows:

Sec.  52.1075  Base year emissions inventory.

* * * * *
    (m) EPA approves as a revision to the Maryland State Implementation
Plan the 2002 base year emissions inventory for the Washington County,
Maryland 1997 fine particulate matter (PM2.5) nonattainment
area submitted by the Maryland Department of Environment on June 6,
2008. The 2002 base year emissions inventory includes emissions
estimates that cover the general source categories of point sources,
non-road mobile sources, area sources, on-road mobile sources, and
biogenic sources. The pollutants that comprise the inventory are
nitrogen oxides (NOX), volatile organic compounds (VOCs),
PM2.5, coarse particles (PM10), ammonia
(NH3), and sulfur dioxide (SO2).
[FR Doc. 2012-29611 Filed 12-6-12; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 86, Number 119 (Thursday, June 24, 2021)]
[Notices]
[Pages 33261-33262]
[FR Doc No: 2021-13438]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. AD10-12-012]

Increasing Market and Planning Efficiency Through Improved
Software; Second Supplemental Notice of Technical Conference on
Increasing Real-Time and Day-Ahead Market Efficiency Through Improved
Software

    As first announced in the Notice of Technical Conference issued in
this proceeding on March 11, 2021, Commission staff will convene a
technical conference on June 22, 23, and 24, 2021 to discuss
opportunities for increasing real-time and day-ahead market efficiency
of the bulk power system through improved software. Attached to this
Second Supplemental Notice is a final agenda for the technical
conference and speakers' summaries of their presentations.
    While the intent of the technical conference is not to focus on any
specific matters before the Commission, some conference discussions
might include topics at issue in proceedings that are currently pending
before the Commission, including topics related to capacity valuation
methodologies for renewable, hybrid, or storage resources. These
proceedings include, but are not limited to:

------------------------------------------------------------------------
                                                   Docket Nos.
------------------------------------------------------------------------
PJM Interconnection, L.L.C............  ER20-584-000.
PJM Interconnection, L.L.C............  EL19-100-000.
PJM Interconnection, L.L.C............  ER21-278-000 and ER21-278-001.
------------------------------------------------------------------------

    The conference will take place virtually via WebEx, with remote
participation from both presenters and attendees. Further details on
remote attendance and participation will be released prior to the
conference. Attendees must register through the Commission's website on
or before June 11, 2021.\1\ WebEx connections may not be available to
those who do not register.
---------------------------------------------------------------------------

    \1\ The attendee registration form is located at https://ferc.webex.com/ferc/onstage/g.php?MTID=e97c1ef8334b1f4db52394fe644edfe57. Click ``Register'' to
be taken to the form.
---------------------------------------------------------------------------

    The Commission will accept comments following the conference, with
a deadline of July 30, 2021.
    There is an ``eSubscription'' link on the Commission's website that
enables subscribers to receive email notification when a document is
added to a subscribed docket(s). For assistance with any FERC Online
service, please email<EMAIL_ADDRESS>or call (866) 208-
3676 (toll free). For TTY, call<PHONE_NUMBER>.
    FERC conferences are accessible under section 508 of the
Rehabilitation Act of 1973. For accessibility accommodations please
send an email to<EMAIL_ADDRESS>or call toll free (866) 208-
3372 (voice) or<PHONE_NUMBER> (TTY), or send a fax to<PHONE_NUMBER>
with the required accommodations.
    For further information about these conferences, please contact:

Sarah McKinley (Logistical Information), Office of External

Affairs,<PHONE_NUMBER><EMAIL_ADDRESS>Alexander Smith (Technical Information), Office of Energy Policy and
Innovation,<PHONE_NUMBER><EMAIL_ADDRESS>
    Dated: June 17, 2021.
Debbie-Anne A. Reese,
Deputy Secretary.
[FR Doc. 2021-13438 Filed 6-23-21; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 88, Number 236 (Monday, December 11, 2023)]
[Notices]
[Pages 85964-85967]
[FR Doc No: 2023-27064]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99083; File No. SR-PHLX-2023-40]

Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing
of Partial Amendment No. 1 and Order Instituting Proceedings To
Determine Whether To Approve or Disapprove a Proposed Rule Change, as
Modified by Partial Amendment No. 1, To Amend Equity 4, Rules 3301A and
3301B To Establish New ``Contra Midpoint Only'' and ``Contra Midpoint
Only With Post-Only'' Order Types and To Make Other Corresponding
Changes to the Rulebook

December 5, 2023.
    On August 28, 2023, 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
(``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule
change to amend Equity 4, Rules 3301A and 3301B \3\ to establish new
``Contra Midpoint Only'' (``CMO'') and ``Contra Midpoint Only with
Post-Only'' (``CMO+PO'') order types and to make other corresponding
changes to the Phlx Rulebook. The proposed rule change was published
for comment in the Federal Register on September 8, 2023.\4\ On
September 26, 2023, pursuant to section 19(b)(2) of the Exchange
Act,\5\ the Commission designated a longer period within which to
approve the proposed rule change, disapprove the proposed rule change,
or institute proceedings to determine whether to disapprove the
proposed rule change.\6\ On November 2, 2023, the Exchange filed
partial Amendment No.1 to the proposed rule change.\7\ The Commission
has received three comment letters on the proposed rule change, and the
Exchange submitted a response to comments when it filed partial
Amendment No. 1.\8\
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ References herein to Phlx Rules in the 3000 Series shall
mean rules in Phlx Equity 4.
    \4\ See Securities Exchange Act Release No. 98280 (Sept. 1,
2023), 88 FR 62129 (``Notice'').
    \5\ 15 U.S.C. 78s(b)(2).
    \6\ See Securities Exchange Act Release No. 98528, 88 FR 67846
(Oct. 2, 2023). The Commission designated December 7, 2023, as the
date by which the Commission shall approve or disapprove, or
institute proceedings to determine whether to approve or disapprove,
the proposed rule change.
    \7\ In partial Amendment No. 1, the Exchange (i) modified an
example that illustrates the operation of the CMO order type; (ii)
added in Rule 3301A(7)(B) that a user may enter a CMO using OUCH,
RASH, and FIX; and (iii) added in Rule 3301A(8) that FIX, in
addition to OUCH and RASH, may be used to enter a CMO+PO. When it
submitted Amendment No. 1, the Exchange also submitted it as a
comment letter to the filing. See Letter from Brett Kitt, Associate
Vice President and Principal and Associate General Counsel, Nasdaq,
Inc., to Vanessa Countryman, Secretary, Commission, dated November
2, 2023 (``PHLX Response Letter''), available at: https://www.sec.gov/comments/sr-phlx-2023-40/srphlx202340-293100-713082.pdf.
    \8\ Comments and the Exchange's response to comments are
available at: https://www.sec.gov/comments/sr-phlx-2023-40/srphlx202340-299539-740902.pdf.
---------------------------------------------------------------------------

    The Commission is publishing this notice to solicit comments on the
proposed rule change, as modified by partial Amendment No. 1, from
interested persons and is instituting proceedings pursuant to section
19(b)(2)(B) of the Act \9\ to determine whether to approve or
disapprove the proposed rule change, as modified by partial Amendment
No. 1.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

I. Description of the Proposal, as Modified by Partial Amendment No. 1

    The Exchange proposes to amend Equity 4, Rule 3301A(b) to establish
``CMO'' and ``CMO+PO'' as new order types on the Exchange. The Exchange
states that a CMO is a Non-Displayed Order Type priced at the midpoint
between the National Best Bid and the National Best Offer (the ``NBBO''
and the midpoint of the NBBO, the ``Midpoint'').\10\ The Exchange
states it will remove a CMO resting on the Order Book upon entry of
certain types of incoming Orders that are likely to result in
unfavorable executions, including because the incoming Orders are
likely to indicate price movements that would be more favorable to the
resting CMO user than the prevailing price.\11\ According to the
Exchange, the CMO provides protection to the resting CMO user against
executions at the prevailing Midpoint price that the user may deem
unfavorable.\12\ The Exchange states that once the System removes a CMO
under these circumstances, it would submit a new CMO at the then-
current Midpoint price automatically on behalf of the user.\13\ The
Exchange states that when it removes a CMO from its Order Book, it
would not send a cancellation message, thus limiting the potential for
information leakage.\14\
---------------------------------------------------------------------------

    \10\ See Notice, supra note 4, at 62130.
    \11\ See id.
    \12\ See id.
    \13\ See id.
    \14\ See id. at 62130 n.4.
---------------------------------------------------------------------------

    According to the Exchange, a CMO+PO is like a CMO, except that it
provides for ``post-only'' functionality, meaning that like a Midpoint
Peg Post-Only Order,\15\ a CMO+PO will execute upon entry only in
circumstances where economically beneficial to the party entering the
Order.\16\ The Exchange states that the CMO and CMO+PO are Order Types
that it has developed to provide market participants with options to
make their own determinations on various trade-offs that exist when
executing their strategies in the markets (e.g., the amount of
liquidity they can obtain in the near term versus the potential for
market movement relative to the Midpoint price).\17\ The Exchange
states that some participants may value avoiding immediate executions
in order to wait for a better price while others would rather obtain
the liquidity instead of waiting.\18\
---------------------------------------------------------------------------

    \15\ See id. at 62130. See also Rule 3301A(b)(6).
    \16\ See Notice, supra note 4, at 62130.
    \17\ See id.
    \18\ See id.
---------------------------------------------------------------------------

    The Exchange states that a CMO is a non-displayed Order Type with
the Midpoint Pegging Attribute that will be priced and ranked in time
order at the Midpoint and that a user may cancel a CMO at any time.
According to the Exchange, the System will remove a CMO Order
automatically if a CMO is resting at the Midpoint on the Exchange Book,
an incoming Order is priced through the price of the CMO, the CMO would
otherwise trade against the incoming Order,\19\ and one or more of the
following conditions apply, which the Exchange anticipates are
indicative of a pending price shift in favor of the CMO user: the
incoming Order is Displayed and its size is greater than that of the
resting CMO; \20\ or the incoming Order is not Displayed, it is priced
at or better than the far side of the NBBO, and its size is greater
than that of the resting CMO.\21\
---------------------------------------------------------------------------

    \19\ See id. The Exchange states, as an example, that the
incoming Order is filled fully by resting interest with price/time
priority ahead of the resting CMO Order, then the System will not
remove the CMO Order from the Order Book. See id. at 62130 n.9.
    \20\ See id. at 62130. The Exchange states that in this
scenario, the Exchange observes that the incoming Order has the
potential to cause the NBBO to shift, such that removal of the CMO
will be preferable to allowing the CMO to execute at a Midpoint
price that may be stale. The System will then automatically re-
submit a new CMO on behalf of the user after removing the original
CMO. See id.
    \21\ See id. at 62130. The Exchange states that in this
scenario, the incoming Order may not cause a shift in the NBBO, due
to its hidden nature, but because it is priced aggressively at the
far side of the NBBO, it still offers a CMO user an opportunity for
an execution that is more favorable than the prevailing midpoint
price. CMO functionality enables a participant to avail itself of
this opportunity. See id.
---------------------------------------------------------------------------

    The Exchange provides the following two examples to illustrate the
concept. In the first example, the National Best Bid is $10.00 and the
National Best

Offer is $11.00 and Participant A enters Order 1, which is a CMO to buy
100 shares of X that is priced at $10.50, the midpoint of the NBBO.
While Order 1 is resting on the Exchange Book, Participant B enters
Order 2, which is a Displayed Order to sell 200 shares of X at $10.40.
The Exchange explains that in this instance, Order 2 is larger than
Order 1 and that if Order 1 was not a CMO and it had executed against
Order 2 at $10.50, then Participant A would have missed out on the
favorable impact of Order 2 shifting the midpoint of the NBBO lower to
$10.20. The Exchange states that, to avoid the outcome, the System
would remove Order 1 from the Exchange Book and resubmit it as Order 3,
priced at $10.20. If Participant C then enters Order 4 to sell 100
shares of X at $10.20, Order 3 would execute against Order 4 at $10.20,
thus providing Participant A with price improvement.\22\
---------------------------------------------------------------------------

    \22\ See id. at 62130-31.
---------------------------------------------------------------------------

    The Exchange provides a second example, in which the National Best
Bid is $10.00 and the National Best Offer is $11.00, and Participant A
again enters Order 1, which is a CMO to buy 100 shares of X that is
priced at $10.50. While Order 1 is resting on the Exchange Book,
Participant B enters Order 2, which this time is a Non-Displayed Order
to sell 200 shares at $10.00. CMO functionality would activate for
Order 1 both because Order 2 is larger than Order 1 and because Order 2
is priced at the far side of the NBBO. The System would resubmit Order
1 as Order 3, priced at $10.50. Order 3 would then execute at $10.00,
again providing Participant A with price improvement relative to the
prevailing midpoint price. The Exchange states it would permit
Participant A to receive the benefit of Order 2, which is priced
aggressively at the far side of the NBBO, even though Order 2 is a non-
displayed Order that would not shift the NBBO or the midpoint.\23\
---------------------------------------------------------------------------

    \23\ See PHLX Response Letter, supra note 7, at 7. The Exchange
further states there also may be scenarios where use of CMO might
not ultimately benefit market participants, such as where the amount
of price improvement associated with use of CMO is outweighed by the
fee a participant would incur when its CMO is deemed to remove
liquidity from the Exchange Book. See Notice, supra note 4, at 62131
n.10.
---------------------------------------------------------------------------

    Additionally, the Exchange states that because a CMO inherently
possesses the Midpoint Pegging Attribute, it will behave in accordance
with Rule 3301B(d), which governs Orders with Midpoint Pegging.\24\
According to the Exchange, a user may enter a CMO (and a CMO+PO) using
RASH or OUCH or FIX.\25\ Unlike other Orders with the Midpoint Pegging
Attribute, however, CMOs cannot be assigned a Routing Attribute, such
that provisions of the Midpoint Pegging Rule that govern Midpoint
Pegged Orders with Routing do not apply to CMOs.\26\ The Exchange
states that a CMO will not be accepted outside of Market Hours, and a
CMO remaining unexecuted at the end of Market Hours will be cancelled
by the System.\27\ Further, the Exchange states that the System will
cancel CMOs when a trading halt is declared, and the System will reject
any CMOs entered during a trading halt.\28\
---------------------------------------------------------------------------

    \24\ See Notice, supra note 4, at 62131.
    \25\ See PHLX Response Letter, supra note 7, at 7-8.
    \26\ See Notice, supra note 4, at 62131.
    \27\ See id.
    \28\ See id. In addition, the Exchange also proposes to amend
the Exchange's Rule governing Midpoint Pegging, at Rule 3301B(d), to
add language stating that ``Orders with Midpoint Pegging will be
cancelled by the System when a trading halt is declared, and any
Orders with Midpoint Pegging entered during a trading halt will be
rejected.'' The Exchange states that such language exists in a
corresponding rule of the rulebook of the Exchange's sister
exchange, the Nasdaq Stock Market, LLC (Nasdaq Rule 4703(d)), but
was mistakenly omitted from Rule 3301B(d). See id. at 62131 n.13.
---------------------------------------------------------------------------

    A CMO user may opt to apply the Minimum Quantity, Trade Now, or
Discretion Order Attributes and a Time-In-Force to a CMO.\29\ The
Exchange states that CMO+PO will possess all the characteristics and
attributes of a CMO, as well as those of a Managed Midpoint Peg Post-
Only Order, as set forth in Rule 3301A(b)(6), with certain
exceptions.\30\ Like a Midpoint Peg Post-Only Order, a CMO+PO is a Non-
Displayed Order that is priced at the Midpoint and executes upon entry
only in circumstances where economically beneficial to the party
entering the Order, and the price of the CMO+PO will be updated
repeatedly to equal the midpoint between the NBBO, provided, however,
that the CMO+PO will not be priced higher (lower) than its limit
price.\31\ According to the Exchange, if the Midpoint between the NBBO
becomes higher than (lower than) the limit price of a CMO+PO to buy
(sell), the price of the CMO+PO will stop updating and the CMO+PO will
post (with a Non-Display Attribute) at its limit price, but will resume
updating if the Midpoint becomes lower than (higher than) the limit
price of the CMO+PO to buy (sell).\32\ Similarly, if a CMO+PO is on the
Exchange Book and subsequently the NBBO is crossed, or if there is no
NBBO, the Order will be removed from the Exchange Book and will be re-
entered at the new Midpoint once there is a valid NBBO that is not
crossed.\33\ The Exchange states that CMO+PO receives a new timestamp
each time its price is changed, and CMO+POs will be cancelled if they
remain on the Exchange Book at the end of Market Hours.\34\
---------------------------------------------------------------------------

    \29\ See id. at 62131.
    \30\ See id.
    \31\ See id. Also like a Midpoint Peg Post-Only Order, a CMO+PO
may not possess the Discretion or Routing Order Attributes, and a
CMO+PO must be priced at more than $1 per share. See id.
    \32\ See id.
    \33\ See id.
    \34\ See id. According to the Exchange, CMO+PO entered prior to
the beginning of Market Hours will be rejected, and a CMO+PO will be
cancelled by the System when a trading halt is declared, and any
CMO+PO entered during a trading halt will be rejected. See id. at
62131 n.14.
---------------------------------------------------------------------------

    The Exchange states that CMO and CMO+PO executions will be reported
to Securities Information Processors and provided in the Exchange's
proprietary data feed without any new or special indication.\35\
Further, as part of the surveillance the Exchange currently performs,
CMOs and CMO+POs will be subject to real-time surveillance to determine
if they are being abused by market participants.\36\ The Exchange
states that it plans to implement CMO and CMO+PO within thirty days
after Commission approval of the proposal and will make the CMO and
CMO+PO available to all members and to all securities upon
implementation.\37\ The Exchange plans to propose a fee structure for
the CMO and CMO+PO in a subsequent Commission rule filing.\38\
---------------------------------------------------------------------------

    \35\ See id. at 62132.
    \36\ See id. The Exchange states that it is committed to
determining whether there is opportunity or prevalence of behavior
that is inconsistent with normal risk management behavior. The
Exchange further states that manipulative abuse is subject to
potential disciplinary action under the Exchange's Rules, and other
behavior that is not necessarily manipulative but nonetheless
frustrates the purposes of the CMO or CMO+PO may be subject to
penalties or other participant requirements to discourage such
behavior, should it occur. See id. In addition, the Exchange states
punitive fees or other participant requirements tied to CMO and
CMO+PO usage will be implemented by rule filing under section 19(b)
of the Act, 15 U.S.C. 78s(b), should the Exchange determine that
they are necessary to maintain a fair and orderly market. See id. at
62132 n.15.
    \37\ See id. at 62132. The Exchange states it will announce the
implementation date by Equity Trader Alert. See id.
    \38\ See id. at 62132 n.16.
---------------------------------------------------------------------------

II. Proceedings To Determine Whether To Approve or Disapprove SR-PHLX-
2023-40, as Modified by Partial Amendment No. 1, and Grounds for
Disapproval Under Consideration

    The Commission is instituting proceedings pursuant to section
19(b)(2)(B) of the Act \39\ to determine whether the proposed rule
change, as modified by partial Amendment No.1, should be approved or
disapproved.

Institution of proceedings is appropriate at this time in view of the
legal and policy issues raised by the proposed rule change and the
comments received thereon. Institution of proceedings does not indicate
that the Commission has reached any conclusions with respect to any of
the issues involved. Rather, the Commission seeks and encourages
interested persons to provide additional comment on the proposed rule
change, as modified by partial Amendment No. 1, to inform the
Commission's analysis of whether to approve or disapprove the proposed
rule change, as modified by partial Amendment No. 1.
---------------------------------------------------------------------------

    \39\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

    Pursuant to section 19(b)(2)(B) of the Act,\40\ the Commission is
providing notice of the grounds for possible disapproval under
consideration. As noted above, the Commission received three comments
on the proposal and the Exchange simultaneously filed a response to
comments along with partial Amendment No. 1.\41\ Of note, one commenter
raises unfair discrimination concerns, stating that the commenter is
not aware of another exchange order type that would discriminate
against orders to access liquidity in the specific way the CMO and
CMO+PO order types do and that CMO would introduce a new form of
segmentation without any indication that investors would stand to
benefit.\42\ Another commenter states that it is troubled by the
asymmetric information provided to the CMO order sender, as non-public
information is provided to the CMO order sender when the CMO order is
removed that no other participant will have.\43\ Similarly, another
commenter states that CMO provides ample opportunities for information
leakage, particularly when a user is able to detect the presence of a
large order by observing executions on the exchange while the CMO order
is on the order book.\44\
---------------------------------------------------------------------------

    \40\ Id.
    \41\ See supra note 7.
    \42\ See Letter from John Ramsay, Chief Market Policy Officer,
Investors Exchange LLC, dated September 28, 2023 (``IEX Letter'') at
2-3.
    \43\ See Letter from Joanna Mallers, Secretary, FIA Principal
Traders Group, dated November 17, 2023 at 2. This commenter states
that the originator of the CMO order knows that the contra side
order is larger than the CMO order because trades occurred that
would have executed against the resting CMO order had the size of
the contra side order been equal to or smaller than the resting CMO
order's size. See id. The commenter expresses concern that CMO order
sender could discern that the opposing, unexecuted order exists, and
profit from that information without the need to trade with it. See
id. See also Letter from Joseph Saluzzi, Partner, Themis Trading
LLC, dated September 29, 2023 at 2 (stating that the Exchange needs
to provide a more detailed explanation of how it plans on removing
CMO orders without leaking information, as according to the
commenter, the originator of the CMO order is still going to need to
be notified that its order was removed).
    \44\ See IEX Letter at 3-4. The commenter provides the following
example where a CMO to buy 100 shares is resting at the midpoint,
when the NBBO for that stock is at $10.00-$11.00. If the exchange
reports an execution, to which the user is not a party, for 100
shares at $10.00, the CMO user can deduce that an order in that
symbol larger than its own has arrived (otherwise, it would have
traded with the order). It can also compare the size of the
execution to the size of its CMO order to determine that the order
has a remaining size that has not been executed on the exchange. The
commenter further states that the user will receive this information
as quickly as it could have received a cancelation message and that
this is information that no other participant is in a position to
have (other than possibly another CMO user with an order in the same
symbol at the same time). See id.
---------------------------------------------------------------------------

    The Exchange replied to these comments with its own comment letter
and by filing partial Amendment No. 1.\45\ The Exchange states, among
other things, that CMO is not intended to benefit market makers at the
expense of large incoming institutional investors' orders, and instead,
it is designed to encourage market participants, including
institutional investors, to rest and seek midpoint liquidity on the
Exchange, rather than off-exchange, by reducing the probability of
trading when market prices are likely to shift.\46\ The Exchange
further states that there is ample precedent for order types like
CMO.\47\ The Exchange refutes the comments that it would be novel for
the exchange to alter orders without sending corresponding messages of
such alterations.\48\ Further, the Exchange states that precedents
exists for the Commission permitting an exchange to utilize proprietary
data to determine the behavior of one of its order types.\49\ Regarding
the information leakage concerns, the Exchange states that when the CMO
fails execute, it does not reveal the details of the incoming order,
including its size, its time-in-force, or whether the order is still
available after the trade, and any information to be gleaned from this
scenario would be knowable to all market participants at the time it is
published on the SIP and the other market data feeds.\50\ Therefore,
the Exchange states CMO user would have no information advantage over
the rest of the market.\51\
---------------------------------------------------------------------------

    \45\ See PHLX Response Letter, supra note 7, at 2.
    \46\ See id. at 1.
    \47\ See id. at 1-2 (stating, as an example, that minimum
quantity orders also enable users to avoid trading with incoming
orders when they are too small and NYSE Arca Inc.'s Passive
Liquidity Select Order, which the Commission approved, did not
interact with an incoming order that was larger than the size of the
Passive Liquidity Select Order). The commenter also states that
IEX's D-Limit and D-Peg order types avoid trading when its system
believes that market prices will shift via a complex formula that
attempts to predict pending price movements. See id. at 1.
    \48\ See id. at 3 (stating that the Commission already permits
the Exchange and Nasdaq to engage in the same process of informal
order removal and resubmission without dissemination of cancellation
messages, for example, in handling Managed Midpoint Peg Post-Only
Orders and Midpoint Extended Life Order and Imbalance-Only order
types).
    \49\ See id. at 3 (providing examples of Nasdaq's late Limit on
Close and Imbalance-Only order types).
    \50\ See id.
    \51\ See id.
---------------------------------------------------------------------------

    The Commission is instituting proceedings to allow for additional
analysis of, and input from commenters with respect to, the consistency
of the proposal, as modified by partial Amendment No. 1, with sections
6(b)(5) \52\ and 6(b)(8) of the Exchange Act.\53\ section 6(b)(5) of
the Exchange Act requires that the rules of a national securities
exchange be designed, among other things, 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, and not be designed to
permit unfair discrimination between customers, issuers, brokers, or
dealers. section 6(b)(8) of the Exchange Act requires that the rules of
a national securities exchange not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act.
---------------------------------------------------------------------------

    \52\ 15 U.S.C. 78f(b)(5).
    \53\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

III. Procedure: Request for Written Comments

    The Commission requests that interested persons provide written
submissions of their views, data, and arguments with respect to the
issues identified above, as well as any other concerns they may have
with the proposal. In particular, the Commission invites the written
views of interested persons concerning whether the proposal is
consistent with sections 6(b)(5) and section 6(b)(8), or any other
provision of the Exchange Act, and the rules and regulations
thereunder. Although there do not appear to be any issues relevant to
approval or disapproval that would be facilitated by an oral
presentation of views, data, and arguments, the Commission will
consider, pursuant to Rule 19b-4, any request for an opportunity to
make an oral presentation.\54\
---------------------------------------------------------------------------

    \54\ Section 19(b)(2) of the Act, as amended by the Securities
Acts Amendments of 1975, Public Law 94-29 (June 4, 1975), grants the
Commission flexibility to determine what type of proceeding--either
oral or notice and opportunity for written comments--is appropriate
for consideration of a particular proposal by a self-regulatory
organization. See Securities Acts Amendments of 1975, Senate Comm.
on Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st
Sess. 30 (1975).

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

    Interested persons are invited to submit written data, views, and
arguments regarding whether the proposed rule change should be approved
or disapproved by January 2, 2024. Any person who wishes to file a
rebuttal to any other person's submission must file that rebuttal by
January 16, 2024.
    Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
file number SR-PHLX-2023-40 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-2023-40. 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 (https://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 also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-PHLX-2023-40 and should be
submitted on or before January 2, 2024. Rebuttal comments should be
submitted by January 16, 2024.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\55\
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    \55\ 17 CFR 200.30-3(a)(57).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-27064 Filed 12-8-23; 8:45 am]
BILLING CODE 8011-01-P