[Federal Register Volume 85, Number 79 (Thursday, April 23, 2020)]
[Notices]
[Pages 22762-22767]
[FR Doc No: 2020-08591]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-88676; File No. SR-Phlx-2020-22]

Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Options 6,
Section 5, Titled Transfer of Positions

April 17, 2020.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on April 16, 2020, Nasdaq PHLX LLC (``Phlx'' or ``Exchange'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II, below, which Items
have been prepared by the Exchange. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.

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

    The Exchange proposes to amend Options 6, Section 5, titled
``Transfer of Positions.'' The Exchange also proposes to update certain
citations.
    The text of the proposed rule change is available on the Exchange's
website at http://nasdaqphlx.cchwallstreet.com/, at the principal
office of the Exchange, and at the Commission's Public Reference Room.

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

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.

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 Options 6, Section 5, titled
``Transfer of Positions.'' The Exchange also proposes to update certain
citations. This proposed rule would continue to permit market
participants to move positions from one account to another without
first exposure of the transaction on the Phlx. The proposed rule change
is similar to Cboe Rule 6.7.\3\
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    \3\ See Securities and Exchange Act Release No. 88424 (March 19,
2020), 85 FR 16981 (March 25, 2020) (SR-Cboe-2019-035) (Notice of
Filing of Amendment Nos. 1 and 2 and Order Granting Accelerated
Approval of a Proposed Rule Change, as Modified by Amendment Nos. 1
and 2, Regarding Off-Floor Position Transfers).
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    Options 6, Section 5 specifies the circumstances under which a
member or member organization may effect transfers of positions to
permit market participants to move positions from one account to
another and to permit transfers upon the occurrence of significant,
non-recurring events. The proposed rule change is similar to Cboe Rule
6.7.
    Current Phlx Options 6, Section 5 lists the circumstances in which
a member or member organization may transfer positions off the floor in
any class of options listed on its books. The circumstances currently
listed include: (1) The dissolution of a joint account in which the
remaining member or member organization assumes the positions of the
joint account; (2) the dissolution of a corporation or partnership in
which a former nominee of that corporation or partnership assumes the
positions; (3) positions transferred as part of a member or member
organization's capital contribution to a new joint account,
partnership, or corporation; (4) the donation of positions to a not-
for-profit corporation; (5) the transfer of positions to a minor under
the Uniform Gifts to Minors Act; (6) a merger or acquisition resulting
in a continuity of ownership or management; or (7) consolidation of
accounts within a member or member organization.
    The Exchange proposes to amend Options 6, Section 5(a) which
currently provides, ``A member or member organization may transfer
positions off the floor in any class of options listed on its books if
the transfer involves one or more of the following events. . . .'' The
Exchange proposes to instead state, ``Existing positions in options
listed on the Exchange of a member or member organization or non-member
or non-member organization that are to be transferred on, from, or to
the books of a Clearing Member may be transferred off the Exchange if
the transfer involves on or more of the following events. . . .'' The
proposed rule text intends to clarify that Options 6, Section 5 does
not apply to products other than options listed on the Exchange,
consistent with the Exchange's other trading rules.\4\ This new rule
text also clarifies that a member or member organization must be on at
least one side of the transfer. The proposed rule change also clarifies
that transferred positions must be on, from, or to the books of a
Clearing Member. This language is consistent with how transfers are
currently effected. The proposed rule change also clarifies that
existing positions of a member or member organization or a non-member
or non-member organization may be subject to a transfer, except under
specified circumstances in which a transfer may only be effected for
positions of a member or member organization.\5\
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    \4\ Proposed paragraph (h) also clarifies that the transfer
procedure only applies to positions in options listed on the
Exchange, and that transfers of non-Exchange-listed options and
other financial instruments are not governed by Options 6, Section
5.
    \5\ See proposed subparagraphs (a)(5) and (7).
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    The Exchange notes transfers of positions in Exchange-listed
options may also be subject to applicable laws, rules, and regulations,
including rules of other self-regulatory organizations.\6\ Except as
explicitly provided in the proposed rule text, the proposed rule change
is not intended to exempt position transfers from any other applicable
rules or regulations, and proposed paragraph (g) makes this clear in
the rule.
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    \6\ See proposed paragraph (h).
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    The proposed rule change adds four events where an transfer would
be permitted to occur.
     Proposed subparagraph (a)(1) permits an transfer to occur
if it, pursuant to Options 9, Section 1 is an adjustment or transfer in
connection with the correction of a bona fide error in the recording of
a transaction or the transferring of a position to another account,
provided that the original trade documentation confirms the error.
     Proposed subparagraph (a)(2) permits an transfer if it is
a transfer of positions from one account to another account where there
is no change in ownership involved (i.e., the accounts are for the same
Person),\7\ provided the accounts are not in separate aggregation units
or otherwise subject to information barrier or account segregation
requirements. The proposed rule change provides market participants
with flexibility to maintain positions in accounts used for the same
trading purpose in a manner consistent with their businesses. Such
transfers are not intended to be transactions among different market
participants, as there would be no change in ownership permitted under
the provision, and would also not permit transfers among different
trading units for which accounts are otherwise required to be
maintained separately.\8\
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    \7\ The Exchange proposes to define the term ``Person'' within
this proposed Rule 1058 as ``For purposes of this rule, the term
``Person'' shall be defined as an individual, partnership (general
or limited), joint stock company, corporation, limited liability
company, trust or unincorporated organization, or any governmental
entity or agency or political subdivision thereof.'' This definition
is identical to Cboe Rule 1.1.
    \8\ Various rules (for example, Regulation SHO in certain
circumstances) require accounts to be maintained separately, and the
proposed rule change is consistent with those rules.
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     Proposed subparagraph (a)(3) similarly permits an transfer
if it is a consolidation of accounts \9\ where no change in ownership
is involved.
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    \9\ This refers to the consolidation of entire accounts (e.g.,
combining two separate accounts (including the positions in each
account into a single account)).
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     Proposed subparagraph (a)(10) permits an transfer if it is
a transfer of positions through operation of law from death,
bankruptcy, or otherwise. This provision is consistent with applicable

laws, rules, and regulations that legally require transfers in certain
circumstances. This proposed rule change is consistent with the
purposes of other circumstances in the current rule, such as the
transfer of positions to a minor or dissolution of a corporation.
    The Exchange believes these proposed events have similar purposes
as those in current Options 6, Section 5, which is to permit market
participants to move positions from one account to another and to
permit transfers upon the occurrence of significant, non-recurring
events.\10\ As noted above, the proposed rule change is consistent with
current Exchange guidance or rules of other self-regulatory
organizations.
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    \10\ See proposed paragraph (g).
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    The proposed rule change renumbers current subparagraphs (a)(1)
through (5) to be proposed subparagraphs (a)(5) through (9) and moves
current subparagraph (a)(6) to proposed subparagraph (a)(3), with non-
substantive changes.
    Proposed Options 6, Section (b) codifies Exchange guidance
regarding certain restrictions on permissible transfers related to
netting of open positions and to margin and haircut treatment.\11\ No
position may net against another position (``netting''), and no
position transfer may result in preferential margin or haircut
treatment.\12\ Netting occurs when long positions and short positions
in the same series ``offset'' against each other, leaving no or a
reduced position. For example, if a member or member organization
wanted to transfer 100 long calls to another account that contained
short calls of the same options series as well as other positions, even
if the transfer is permitted pursuant to one of the 10 permissible
events listed in the proposed Rule, the member or member organization
could not transfer the offsetting series, as they would net against
each other and close the positions.\13\
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    \11\ See Phlx Options 6, Section 5(c).
    \12\ For example, positions may not transfer from a customer,
joint back office, or firm account to a Market Maker account.
However, positions may transfer from a Market Maker account to a
customer, joint back office, or firm account (assuming no netting of
positions occurs).
    \13\ See Cboe Rule 6.7(b).
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    However, netting is permitted for transfers on behalf of a Market
Maker account for transactions in multiply listed options series on
different options exchanges, but only if the Market Maker nominees are
trading for the same member or member organization, and the options
transactions on the different options exchanges clear into separate
exchange-specific accounts because they cannot easily clear into the
same Market Maker account at the Clearing Corporation. In such
instances, all Market Maker positions in the exchange-specific accounts
for the multiply listed class would be automatically transferred on
their trade date into one central Market Maker account (commonly
referred to as a ``universal account'') at the Clearing Corporation.
Positions cleared into a universal account would automatically net
against each other. Options exchanges permit different naming
conventions with respect to Market Maker account acronyms (for example,
lettering versus numbering and number of characters), which are used
for accounts at the Clearing Corporation. A Market Maker may have a
nominee with an appointment in class XYZ on Phlx, and have another
nominee with an appointment in class XYZ on ISE, but due to account
acronym naming conventions, those nominees may need to clear their
transactions into separate accounts (one for Phlx transactions and
another for ISE transactions) at the Clearing Corporation rather into a
universal account (in which account the positions may net). The
proposed rule change permits transfers from these separate exchange-
specific accounts into the Market Maker's universal account in this
circumstance to achieve this purpose.
Transfer Price
    Currently Options 6, Section 5(c) provides, in part, that ``members
and member organizations must transfer positions pursuant to this Rule
at the same prices that appear on the books of the transferring member
or member organization, and the transfer must indicate the date when
the original trade was made. In the course of transferring positions,
no position shall net itself against another position.'' The Exchange
instead proposes to state within Options 6, Section 5(c) that the
transfer price, to the extent it is consistent with applicable laws,
rules, and regulations, including rules of other self-regulatory
organizations, and tax and accounting rules and regulations, at which
an transfer is effected may be: (1) The original trade prices of the
positions that appear on the books of the trading Clearing Member, in
which case the records of the transfer must indicate the original trade
dates for the positions; provided, transfers to correct bona fide
errors pursuant to proposed subparagraph (a)(1) must be transferred at
the correct original trade prices; (2) mark-to-market prices of the
positions at the close of trading on the transfer date; (3) mark-to-
market prices of the positions at the close of trading on the trade
date prior to the transfer date; \14\ or (4) the then-current market
price of the positions at the time the transfer is effected.\15\ The
proposed rule text regarding permissible transfer prices provides
market participants with flexibility to determine the transfer price at
which the transfer may be effected. The Exchange proposes the four
options noted above with respect to the transfer price.
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    \14\ For example, for a transfer that occurs on a Tuesday, the
transfer price may be based on the closing market price on Monday.
    \15\ See Cboe Rule 6.7(c).
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    This proposed rule change provides market participants that effect
transactions with flexibility to select a transfer price based on
circumstances of the transfer and their business. However, for
corrections of bona fide errors, because those transfers are necessary
to correct processing errors that occurred at the time of transaction,
those transfers would occur at the original transaction price, as the
purpose of the transfer is to create the originally intended result of
the transaction.
Prior Written Notice
    Current Phlx Options 6, Section 5(b) provides, ``members and member
organizations must notify the Exchange in writing prior to effecting an
off the floor transfer. The written notification must indicate the
positions to be transferred and the reason for the transfer.'' Proposed
Options 6, Section 5(d) requires a member or member organization and
its Clearing Member (to the extent that the member or member
organization is not self-clearing) to submit to the Exchange, in a
manner determined by the Exchange, written notice prior to effecting an
transfer from or to the account of a member or member
organization(s).\16\ The notice must indicate: The Exchange-listed
options positions to be transferred; the nature of the transaction; the
enumerated provision(s) under proposed paragraph (a) pursuant to which
the positions are being transferred; the name of the counterparty(ies);
the anticipated transfer date; the method for determining the transfer
price; and any other information requested by the Exchange.\17\ The
proposed notice will continue to ensure the Exchange is

aware of all transfers so that it can monitor and review them
(including the records that must be retained pursuant to proposed
paragraph (e)) to determine whether they are effected in accordance
with the Rules. The proposed rule text requires additional information
with respect to the prior written notification that is required to
effect a transfer.
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    \16\ This notice provision applies only to transfers involving a
member's or member organization's positions and not to positions of
non-member and non-member organization parties, as they are not
subject to the Rules. In addition, no notice would be required to
effect transfers to correct bona fide errors pursuant to proposed
subparagraph (a)(1).
    \17\ See Cboe Rule 6.7(d).
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    Additionally, requiring notice from the member or member
organization(s) and its Clearing Member(s) will ensure both parties are
in agreement with respect to the terms of the transfer. As noted in
proposed subparagraph (d)(2), receipt of notice of an transfer does not
constitute a determination by the Exchange that the transfer was
effected or reported in conformity with the requirements of proposed
Section 10(b). Notwithstanding submission of written notice to the
Exchange, member or member organizations and Clearing Members that
effect transfers that do not conform to the requirements of proposed
Section 10(b) will be subject to appropriate disciplinary action in
accordance with the Rules.
Records
    Current Phlx Rule at Options 6, Section 5(c) provides, in part,
Each member or member organization that is a party to a transfer of
positions must make and retain records stating the nature of the
transaction, the name of the counter-party, and any other information
required by the Exchange. Proposed Options 6, Section 5(e) requires
each member or member organization and each Clearing Member that is a
party to a transfer must make and retain records of the information
provided in the written notice to the Exchange pursuant to proposed
subparagraph (e)(1), as well as information on the actual Exchange-
listed options that are ultimately transferred, the actual transfer
date, and the actual transfer price (and the original trade dates, if
applicable), and any other information the Exchange may request the
member or member organization or Clearing Member provide.\18\ The
records requirement is enhanced to require additional information that
must be maintained by members, member organizations and each Clearing
Member that is a party to a transfer.
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    \18\ See Cboe Rule 6.7(e).
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Presidential Exemption
    Proposed paragraph (f) provides exemptions approved by the
Exchange's Chief Executive Officer or President (or senior-level
designee). Specifically, this provision is in addition to the
exemptions set forth in proposed paragraph (a). The Exchange proposes
that the Exchange Chief Executive Officer or President (or senior-level
designee) may grant an exemption from the requirement of this proposed
Rule, on his or her own motion or upon application of the member or
member organization (with respect to the member's or member
organization's positions) or a Clearing Member (with respect to
positions carried and cleared by the Clearing Members). The Chief
Executive Officer, the President or his or her designee, may permit an
a transfer if necessary or appropriate for the maintenance of a fair
and orderly market and the protection of investors and is in the public
interest, including due to unusual or extraordinary circumstances. For
example, an exemption may be granted if the market value of the
Person's positions would be compromised by having to comply with the
requirement to trade on the Exchange pursuant to the normal auction
process or when, in the judgment of the Chief Executive Officer,
President or his or her designee, market conditions make trading on the
Exchange impractical.\19\
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    \19\ See Cboe Rule 6.7(f).
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Routine, Recurring Transfers
    The Exchange proposes within Options 6, Section 5(g) that that the
transfer procedure set forth in Options 6, Section 5 is intended to
facilitate non-routine, nonrecurring movements of positions.\20\ The
transfer procedure is not to be used repeatedly or routinely in
circumvention of the normal auction market process.
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    \20\ See Cboe Rule 6.7(g).
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Exchange-Listed Options
    The Exchange proposes within Options 6, Section 5(h) notes that the
transfer procedure set forth in Options 6, Section 5 is only applicable
to positions in options listed on the Exchange. Transfers of positions
in Exchange-listed options may also be subject to applicable laws,
rules, and regulations, including rules of other self-regulatory
organizations. Transfers of non-Exchange listed options and other
financial instruments are not governed by this Rule.\21\
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    \21\ See Cboe Rule 6.7(h).
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Updating Citations
    The Exchange recently relocated its rules into a new Rulebook
Shell.\22\ Certain rule citations within General 2, Section 4; Options
2, Section 6; Options 7, Section 4; Options 8, Section 28; Section 39,
B-6 and C-2 were inadvertently not updated. The Exchange proposes to
update those citations and also remove an unnecessary header within
General 9, Section 58.\23\
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    \22\ See Securities Exchange Act Release No. 88213 (February 14,
2020), 85 FR 9859 (February 20, 2020) (SR-Phlx-2020-03) (``Phlx
Rulebook Relocation Rule Change'').
    \23\ The header ``SUPPLEMENTARY INFORMATION REGARDING RULE 605''
is unnecessary as the language which follows explains the text.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\24\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\25\ in particular, in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest.
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    \24\ 15 U.S.C. 78f(b).
    \25\ 15 U.S.C. 78f(b)(5).
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    Specifically, the Exchange believes the proposed transfer rule is
consistent with the Section 6(b)(5) \26\ requirements that the rules of
an exchange be designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest.
Additionally, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) \27\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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    \26\ 15 U.S.C. 78f(b)(5).
    \27\ Id.
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    The Exchange believes that permitting the transfers in very limited
circumstances, such as where there is no change in beneficial
ownership, a transfer by operation of law or an adjustment or transfer
in connection with the correction of a bona fide error, is reasonable
to allow a member or member organization to accomplish certain goals
efficiently. The Exchange currently permits transfers in situations
involving dissolutions of entities or accounts, for purposes of
donations or mergers. For example, a member or member organization that
is undergoing a structural change and a one-time movement of positions
may require a

transfer of positions or a member or member organization that is
leaving a firm that will no longer be in business may require a
transfer of positions to another firm. Also, a member or member
organization may require a transfer of positions to make a capital
contribution. The above-referenced circumstances are non-recurring
situations where the transferor continues to maintain some ownership
interest or manage the positions transferred. By contrast, repeated or
routine transfers between entities or accounts--even if there is no
change in beneficial ownership as a result of the transfer--is
inconsistent with the purposes for which the proposed rule was adopted.
Accordingly, the Exchange believes that such activity should not be
permitted under the rules and thus, seeks to adopt language in proposed
paragraph (f) to proposed Options 6, Section 5 that the transfer of
positions procedures set forth the proposed rule are intended to
facilitate non-recurring movements of positions.
    The Exchange believes the proposed rule change benefits investors,
as it adds transparency to the Rules. The purpose of the additional
circumstances in which market participants may conduct transfers is
consistent with the purpose of the circumstances currently permitted in
the proposed rule. Therefore, the proposed rule change will provide
market participants that experience these limited, non-recurring events
with an efficient and effective means to transfer positions in these
situations. The Exchange believes the proposed rule change regarding
permissible transfer prices provides market participants with
flexibility to determine the price appropriate for their business,
which maintain cost bases in accordance with normal accounting
practices and removes impediments to a free and open market.
    The proposed rule change which requires notice and maintenance of
records will ensure the Exchange is able to review transfers for
compliance with the Rules, which prevents fraudulent and manipulative
acts and practices. The requirement to retain records is consistent
with the requirements of Rule 17a-3 and 17a-4 under the Act.
    Similar to Cboe Rule 6.7, the Exchange would permit a presidential
exemption. The Exchange believes that this exemption is consistent with
the Act because the Exchange's Chief Executive Officer or President (or
senior-level designee) would consider an exemption in very limited
circumstances. The transfer process is intended to facilitate non-
routine, nonrecurring movements of positions and, therefore, is not to
be used repeatedly or routinely in circumvention of the normal auction
market process. Proposed Options 6, Section 5(f) specifically provides
within the rule text that the Exchange's Chief Executive Officer or
President (or senior-level designee) may in his or her judgment allow a
transfer if it is necessary or appropriate for the maintenance of a
fair and orderly market and the protection of investors and is in the
public interest, including due to unusual or extraordinary
circumstances such as the market value of the Person's positions will
be comprised by having to comply with the requirement to trade on the
Exchange pursuant to the normal auction process or, when in the
judgment of President or his or her designee, market conditions make
trading on the Exchange impractical. These standards within proposed
Options 6, Section 5(f) are intended to provide guidance concerning the
use of this exemption which is intended to provide the Exchange with
the ability to utilize the exemption for the maintenance of a fair and
orderly market and the protection of investors and is in the public
interest. The Exchange believes that the exemption is consistent with
the Act because it would allow the Exchange's Chief Executive Officer
or President (or senior-level designee) to act in certain situations
which comply with the guidance within Options 6, Section 5(f) which are
intended to protect investors and the general public. While Cboe grants
an exemption to the President (or senior-level designee),\28\ the
Exchange has elected to grant an exemption to Exchange's Chief
Executive Officer or President (or senior-level designee), who are
similarly situated with the organization as senior-level individuals.
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    \28\ See Cboe Rule 6.7(f).
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Updating Citations
    Updating rule citations and removing unnecessary text will bring
greater clarity to the Rulebook.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
    The Exchange does not believe the proposed rule change will impose
an undue burden on intra-market competition as the transfer procedure
may be utilized by any member or member organization and the rule will
apply uniformly to all members or member organizations. Use of the
transfer procedure is voluntary, and all members or member
organizations may use the procedure to transfer positions as long as
the criteria in the proposed rule are satisfied. With this change, a
member or member organization that experiences limited permissible,
non-recurring events would have an efficient and effective means to
transfer positions in these situations. The Exchange believes the
proposed rule change regarding permissible transfer prices provides
market participants with flexibility to determine the price appropriate
for their business, which determine prices in accordance with normal
accounting practices and removes impediments to a free and open market.
The Exchange does not believe the proposed notice and record
requirements are unduly burdensome to market participants. The Exchange
believes the proposed requirements are reasonable and will ensure the
Exchange is aware of transfers and would be able to monitor and review
the transfers to ensure the transfer falls within the proposed rule.
    Adopting an exemption, similar to Cboe Rule 6.7, to permit the
Exchange's Chief Executive Officer or President (or senior-level
designee) to grant an exemption to Options 6, Section 5(a) prohibition
if, in his or her judgment, does not impose an undue burden on
competition. Circumstances where, due to unusual or extraordinary
circumstances such as the market value of the Person's positions would
be comprised by having to comply with the requirement to trade on the
Exchange pursuant to the normal auction process or, would be taken into
consideration in each case where, in the judgment of the Exchange's
Chief Executive Officer or President (or senior-level designee), market
conditions make trading on the Exchange impractical.
    The Exchange does not believe the proposed rule change will impose
an undue burden on inter-market competition. The proposed position
transfer procedure is not intended to be a competitive trading tool.
The proposed rule change permits, in limited circumstances, a transfer
to facilitate non-routine, nonrecurring movements of positions. As
provided for in proposed Options 6, Section 5(g), it would not be used
repeatedly or routinely in circumvention of the normal auction market
process. Proposed Options 6, Section 5(a) specifically provides within
the rule text that the Exchange's Chief Executive Officer or President
(or senior-level designee) may in his or her judgment allow a transfer
for the maintenance of

a fair and orderly market and the protection of investors and is in the
public interest. The Exchange believes that the exemption does not
impose an undue burden on competition as the Exchange's Chief Executive
Officer or President (or senior-level designee) would apply the
exemption consistent with the guidance within Options 6, Section 5(f).
Additionally, as discussed above, the proposed rule change is similar
to Cboe Rule 6.7. The Exchange believes having similar rules related to
transfer positions to those of other options exchanges will reduce the
administrative burden on market participants of determining whether
their transfers comply with multiple sets of rules.
Updating Citations
    The updates to the rule citations and removal of unnecessary rule
text are non-substantive rule changes.

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

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \29\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\30\
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    \29\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \30\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days from the date of filing. However, Rule
19b-4(f)(6)(iii) \31\ 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. The Commission notes that waiver of the
operative delay would provide members with the ability to request a
transfer, for limited, non-recurring types of transfers, without the
need for exposing those orders on the Exchange, similar to Cboe.\32\
The Commission believes that waiver of the 30-day operative delay is
consistent with the protection of investors and the public interest.
Accordingly, the Commission waives the 30-day operative delay and
designates the proposed rule change operative upon filing.\33\
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    \31\ 17 CFR 240.19b-4(f)(6)(iii).
    \32\ See CBOE Rule 6.7.
    \33\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. 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-Phlx-2020-22 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-2020-22. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-Phlx-2020-22 and should be submitted on
or before May 14, 2020.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\34\
---------------------------------------------------------------------------

    \34\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-08591 Filed 4-22-20; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 75, Number 127 (Friday, July 2, 2010)]
[Notices]
[Pages 38585-38587]
[FR Doc No: 2010-16146]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62396; File No. SR-BX-2010-012]

Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Order
Approving a Proposed Rule Change To Codify Prices for Co-Location
Services

June 28, 2010.

I. Introduction

    On January 29, 2010, NASDAQ OMX BX, Inc. (``BX'' 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
relating to co-location services and related fees. The proposed rule
change was published for comment in the Federal Register on February
10, 2010.\3\ The Commission received no comment letters on the
proposal. This

order approves the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 61487 (February 3,
2010), 75 FR 6746 (``Notice'').
---------------------------------------------------------------------------

II. Description

    As described in the Notice, the Exchange is proposing to codify
fees for its existing co-location services. Co-location services are a
suite of hardware, power, telecommunication, and other ancillary
products and services that allows market participants and vendors to
place their trading and communications equipment in close physical
proximity to the quoting and execution facilities of the Exchange. BX
provides co-location services and imposes fees through Nasdaq
Technology Services LLC and pursuant to agreements with the owner/
operator of its data center where both the Exchange's quoting and
trading facilities and co-located customer equipment are housed.\4\
Users of co-location services include private extranet providers, data
vendors, as well as the Exchange members and non-members. The use of
co-location services is entirely voluntary.
---------------------------------------------------------------------------

    \4\ Currently, NASDAQ OMX BX provides its co-location services
through data centers located in the New York City and Mid-Atlantic
areas.
---------------------------------------------------------------------------

    As detailed in its fee schedule, the Exchange imposes a uniform set
of fees for various co-location services, including: fees for cabinet
space usage, or options for future space usage; installation and
related power provision for hosted equipment; connectivity among
multiple cabinets being used by the same customer as well as customer
connectivity to the Exchange and telecommunications providers; \5\ and
related maintenance and consulting services. Fees related to cabinet
and power usage are incremental, with additional charges being imposed
based on higher levels of cabinet and/or power usage, the use of non-
standard cabinet sizes or special cabinet cooling equipment, or the re-
selling of cabinet space.
---------------------------------------------------------------------------

    \5\ The Exchange states that these fees are for
telecommunications connectivity only. Market data fees are charged
independently by NASDAQ OMX BX and other exchanges.
---------------------------------------------------------------------------

    NASDAQ OMX BX is implementing a Cabinet Proximity Option program
where, for a monthly a fee, customers can obtain an option for future
use on available currently-unused cabinet floor space in proximity to
their existing equipment. Under the program, customers can reserve up
to maximum of 20 cabinets that the Exchange will endeavor to provide as
close as reasonably possible to the customer's existing cabinet space,
taking into consideration power availability within segments of the
datacenter and the overall efficiency of use of datacenter resources as
determined by the Exchange. Should reserved datacenter space be needed
for use, the reserving customer will have three business days to
formally contract with the Exchange for full payment for the reserved
cabinet space in contention or it will be reassigned. In making
determinations to require exercise or relinquishment of reserved space
as among numerous customers, the Exchange will take into consideration
several factors, including: Proximity between available reserved
cabinet space and the existing space of a customer seeking additional
space for actual cabinet usage; a customer's ratio of cabinets in use
to those reserved; the length of time that a particular reservation(s)
has been in place; and any other factor that the Exchange deems
relevant to ensure overall efficiency in use of the datacenter space.
    In the Notice, the Exchange made certain representations regarding
its co-location services. First, the Exchange represents that co-
location customers are not provided any separate or superior means of
direct access to the Exchange quoting and trading facilities, nor does
the Exchange offer any separate or superior means of access to the
Exchange quoting and trading facilities as among co-location customers
themselves within the datacenter. Second, BX represents that it does
not make available to co-located customers any market data or data feed
product or service for data going into, or out of, the Exchange systems
that is not likewise available to all the Exchange members.\6\ Finally,
the Exchange represents that all orders sent to the Exchange market
enter the marketplace through the same central system quote and order
gateway regardless of whether the sender is co-located in the Exchange
data center or not. In short, according to the Exchange, it has created
no special market technology or programming that is available only to
co-located customers and has organized its systems to minimize, to the
greatest extent possible, any advantage for one customer versus
another.
---------------------------------------------------------------------------

    \6\ The Exchange made a 10Gb fiber connection available to co-
located customers early in the first quarter of 2010. On March 26,
2010, the Exchange filed a proposed rule change that would, among
other things, establish pricing for 10Gb fiber connections for
customers who are not co-located in BX's datacenter. See SR-BX-2010-
043.
---------------------------------------------------------------------------

    The Exchange also has represented that co-location services are
generally available to all qualified market participants who desire
them. With the exception of customers participating in the Cabinet
Proximity Option program, the Exchange allocates cabinets and power on
a first-come/first-serve basis. Should available cabinet inventory
shrink to 40 cabinets or less, the Exchange will limit new cabinet
orders to a maximum of 4 cabinets each, and all new cabinets will be
limited to a maximum power level of 5kW. Should available cabinet
inventory shrink to zero, the Exchange will place firms seeking
services on a waiting list based on that date the Exchange receives
signed orders for the services from the firm. In order to be placed on
the waiting list, a firm must have utilized all existing cabinets they
already have in the datacenter. Once on the list, the firms, on a
rolling basis, will be allocated a single 5kW cabinet each time one
becomes available. After receiving a cabinet, the firm will move to the
bottom of the waiting list.

III. Discussion and Commission's Findings

    After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities exchange.\7\
In particular, the Commission finds that the proposed rule change is
consistent with Section 6(b)(4) of the Act,\8\ which requires that the
rules of a national securities exchange provide for the equitable
allocation of reasonable dues, fees and other charges among its members
and issuers and other persons using its facilities, and with Section
6(b)(5) of the Act,\9\ which requires, among other things, that that
the rules of a national securities exchange be designed to promote just
and equitable principles of trade, to remove impediments to and perfect
the mechanism of a free and open market and a national market system
and, in general, to protect investors and the public interest, and not
be designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------

    \7\ In approving this proposal, the Commission has considered
the proposed rule's impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
    \8\ 15 U.S.C. 78f(b)(4).
    \9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission believes that the proposed co-location fees are
reasonable and equitably allocated insofar as they are applied on the
same terms to similarly-situated market participants. The Commission
notes that charges may vary depending on the use of cabinet space and/
or power usage. In addition, the Commission believes that the co-
location services described in the proposed rule change are not
unfairly discriminatory because: (1) Co-location

services are offered to all interested market participants who request
them and pay the appropriate fees; (2) as represented by BX, the
Exchange has architected its systems so as to, as much as possible,
reduce or eliminate differences among users of its systems, whether co-
located or not; and (3) the Exchange has stated that it has sufficient
space to accommodate new co-locaters has set forth in the proposed rule
change objective procedures to allocate space should it become limited
in the future.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\10\ that the proposed rule change (SR-BX-2010-012) be, and hereby
is, approved.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-16146 Filed 7-1-10; 8:45 am]
BILLING CODE 8010-01-P


[Federal Register Volume 84, Number 75 (Thursday, April 18, 2019)]
[Proposed Rules]
[Pages 16222-16223]
[FR Doc No: 2019-07710]

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

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Parts 201, 310, 347, and 352

[Docket No. FDA-1978-N-0018 (formerly Docket No. FDA-1978-N-0038)]
RIN 0910-AF43

Sunscreen Drug Products for Over-the-Counter Human Use; Extension
of Comment Period

AGENCY: Food and Drug Administration, HHS.

ACTION: Proposed rule; extension of comment period.

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

SUMMARY: The Food and Drug Administration (FDA or the Agency) is
extending the comment period for the proposed rule that appeared in the
Federal Register of February 26, 2019. In the proposed rule, FDA
requested comments on its proposals relating to the regulation of over-
the-counter (OTC) sunscreen monograph products. These proposals
described the conditions under which the Agency proposes that OTC
sunscreen monograph products are generally recognized as safe and
effective and not misbranded. The Agency is taking this action in
response to a request for an extension to allow interested persons
additional time to submit comments.

DATES: FDA is extending the comment period on the proposed rule
published February 26, 2019 (84 FR 6204). Submit either electronic or
written comments by June 27, 2019.

ADDRESSES: You may submit comments as follows. Please note that late,
untimely filed comments will not be considered. Electronic comments
must be submitted on or before June 27, 2019. The https://www.regulations.gov electronic filing system will accept comments until
11:59 p.m. Eastern Time at the end of June 27, 2019. Comments received
by mail/hand delivery/courier (for written/paper submissions) will be
considered timely if they are postmarked or the delivery service
acceptance receipt is on or before that date.

Electronic Submissions

    Submit electronic comments in the following way:
     Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments. Comments submitted
electronically, including attachments, to https://www.regulations.gov
will be posted to the docket unchanged. Because your comment will be
made public, you are solely responsible for ensuring that your comment
does not include any confidential information that you or a third party
may not wish to be posted, such as medical information, your or anyone
else's Social Security number, or confidential business information,
such as a manufacturing process. Please note that if you include your
name, contact information, or other information that identifies you in
the body of your comments, that information will be posted on https://www.regulations.gov.
     If you want to submit a comment with confidential
information that you do not wish to be made available to the public,
submit the comment as a written/paper submission and in the manner
detailed (see ``Written/Paper Submissions'' and ``Instructions'').

Written/Paper Submissions

    Submit written/paper submissions as follows:
     Mail/Hand Delivery/Courier (for written/paper
submissions): Dockets Management Staff (HFA-305), Food and Drug
Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.
     For written/paper comments submitted to the Dockets
Management Staff, FDA will post your comment, as well as any
attachments, except for information submitted, marked and identified,
as confidential, if submitted as detailed in ``Instructions.''
    Instructions: All submissions received must include the Docket No.
FDA-1978-N-0018 (formerly Docket No. FDA-1978-N-0038) for ``Sunscreen
Drug Products for Over-the-Counter Human Use.'' Received comments,
those filed in a timely manner (see ADDRESSES), will be placed in the
docket and, except for those submitted as ``Confidential Submissions,''
publicly viewable at https://www.regulations.gov or at the Dockets
Management Staff between 9 a.m. and 4 p.m., Monday through Friday.
     Confidential Submissions--To submit a comment with
confidential information that you do not wish to be made publicly
available, submit your comments only as a written/paper submission. You
should submit two copies total. One copy will include the information
you claim to be confidential with a heading or cover note that states
``THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.'' The Agency will
review this copy, including the claimed confidential information, in
its consideration of comments. The second copy, which will have the
claimed confidential information redacted/blacked out, will be
available for public viewing and posted on https://www.regulations.gov.
Submit both copies to the Dockets Management Staff. If you do not wish
your name and contact information to be made publicly available, you
can provide this information on the cover sheet and not in the body of
your comments and you must identify this information as
``confidential.'' Any information marked as ``confidential'' will not
be disclosed except in accordance with 21 CFR 10.20 and other
applicable disclosure law. For more information about FDA's posting of
comments to public dockets, see 80 FR 56469, September 18, 2015, or
access the information at: https://www.gpo.gov/fdsys/pkg/FR-2015-09-18/pdf/2015-23389.pdf.
    Docket: For access to the docket to read background documents or
the electronic and written/paper comments received, go to https://www.regulations.gov and insert the docket number, found in brackets in
the heading of this document, into the ``Search'' box and follow the
prompts and/or go to the Dockets Management Staff, 5630 Fishers Lane,
Rm. 1061, Rockville, MD 20852.

FOR FURTHER INFORMATION CONTACT: Kristen Hardin, Center for Drug
Evaluation and Research, Food and Drug Administration, 10903 New
Hampshire Ave., Bldg. 22, Rm. 5443, Silver Spring, MD 20993, 240-402-
4246.

SUPPLEMENTARY INFORMATION: In the Federal Register of February 26,
2019, FDA published a proposed rule with a 90-day comment period to
request comments on the Agency's proposals relating to the regulation
of OTC sunscreen monograph products. These proposals described the
conditions under which the Agency proposes that OTC sunscreen monograph
products are generally recognized as safe and effective and not
misbranded. Comments on these proposals will inform FDA's rulemaking to
establish regulations putting into effect a final monograph for
nonprescription, OTC sunscreen drug products. FDA also indicated in the
proposed rule that the Agency would consider requests to defer further
rulemaking with respect to specific sunscreen active ingredients to
allow the submission of new safety and/or effectiveness data to the
record if such requests were submitted to the docket within the initial
90-day comment period. Elsewhere in this issue of the Federal Register,
the Agency is publishing a correction to the proposed rule to clarify
illegible graphics of equations.
    The Agency has received a request for a 60- to 90-day extension of
the comment period for the proposed rule. This request conveyed concern
that the current 90-day comment period does not allow sufficient time
to develop a meaningful or thoughtful response to the proposed rule.
    FDA has considered the request and is extending the comment period
for the proposed rule for 30 days, until June 27, 2019. The Agency
believes that a 30-day extension allows adequate time for interested
persons to submit comments without significantly delaying rulemaking on
these important issues. We note that this 30-day extension applies both
to comments and to requests for the Agency to defer further rulemaking
with respect to specific sunscreen active ingredients.

    Dated: April 12, 2019.
Lowell J. Schiller,
Principal Associate Commissioner for Policy.
[FR Doc. 2019-07710 Filed 4-17-19; 8:45 am]
 BILLING CODE 4164-01-P


ATTACHMENT 2

Copy of Public Comments on ICR Renewal and EPA’s Response

July 17, 2009

MEMORANDUM

FROM:	Oscar Hernandez, Director /s/

		Risk Assessment Division (7403M)

		Office of Pollution Prevention and Toxics

TO:		Angela Hofmann, Director

		Regulatory Coordination Staff (7101M)

		Office of Prevention, pesticides, and Toxic Substances

SUBJECT:	Public Comments on TSCA 8(e) ICR Renewal (#0794.12);

		OMB Control No. 2070-0046

EPA received one public response on the proposed TSCA 8(e) 2009
Information Collection Request renewal published in the Federal Register
on February 13, 2009.  RAD has reviewed these comments, which are from
Steven J. Goldberg of the BASF Corporation.

BASF recommends that information collected should be limited to
commercialized substances on the Inventory or notified to the Agency
(e.g., through LVE or polymer exemption), and that submissions be
delayed until the study is complete.  Also, BASF states that the current
guidance to submit any information within the 30 calendar days results
in submission of preliminary information with additional submission
containing clarifications. They stated that the consequence is greater
numbers of submissions of limited information rather than fewer
submissions with complete information. Therefore, BASF recommends that
submission should be delayed until all the biological endpoints of a
particular study can be evaluated rather than after identification of
every toxicological change.

EPA stands by its decision for reporting requirements. Information that
is reported on chemicals varies from one submitter to another. The
guidance states that full reports or summarized results may be submitted
to the Agency and that limited studies, preliminary results, and draft
reports may constitute sufficient evidence for Section 8(e) reporting.
For consistency, EPA finds it necessary to enforce the current
requirements used in the guidance that will allow for a proper
evaluation of the risk and/or hazard of a substance based upon full and
current disclosure by all involved parties. The Agency collects and will
continue to collect early documentation of potential problems for early
warning of the potential hazard of a chemical.

BASF believes that the Agency has underestimated the clerical time to
prepare and submit confidential information. They stated that the
clerical time could be reduced through electronic submission. Also, BASF
points out that electronic submission can greatly decrease the burden of
submission and reduce the amount of paper that the Agency needs to
handle. Encryption technology is available that would allow secure
transmission, and other forms of electronic submission such as
password-protected CD’s could be used. Furthermore, BASF states that
it is also unclear what the retention policy of the Agency is regarding
paper submission, but if documents are retained for 10 years, there is a
need to reduce the paper that the Agency needs to manage.

EPA is currently looking to move to electronic reporting. However, we
will continue to use the process that is in place at this time.

Attached are copies of the ACC comments and the revised TSCA 8(e) ICR
Part 6.

Attachments