[Federal Register Volume 83, Number 34 (Tuesday, February 20, 2018)]
[Notices]
[Page 7287]
[FR Doc No: 2018-03399]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

Office of Commercial Space Transportation: Millennium Engineering
and Integration Company Safety Approval Performance Criteria

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice.

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SUMMARY: This is notification of criteria used to evaluate the
Millennium Engineering and Integration Company (MEI) safety approval
application. This Notice publishes the criteria that the FAA used to
evaluate the safety approval application pursuant to FAA regulations.
    Background: MEI applied for, and received, a safety approval for
its ability to provide its Flight Analyst Workstation (FAWS) as a
component of the process to build flight rules, generate the Mission
Data Load (MDL), and verify the MDL prior to loading it onto a launch
vehicle's autonomous flight safety unit (AFSU).
    The FAA issued MEI the safety approval, subject to the provisions
of Title 51 U.S.C. Subtitle V, ch. 509, and the orders, rules and
regulations issued under it. This Notice is published pursuant to Title
14 Code of Federal Regulations (14 CFR 414.35).
    MEI may offer FAWS as a component of the process of generating and
verifying MDLs for AFSUs to a prospective launch or reentry operator to
meet the applicable requirements of 14 CFR 417.123(b), (d), and (e),
and Sec.  417.309(h).
    Criteria Used To Evaluate Safety Approval Application: The
performance criteria used to evaluate the FAWS as a component of the
process of generating and verifying MDLs for AFSUs included the
following FAA regulations, NASA standard, U.S. Air Force manuals or
instructions, industry standard, and MEI-developed standards:
    14 CFR 417.309(h) Flight Safety System Analysis--Software and
Firmware and 14 CFR 417.123 Computing Systems and Software.
    NASA-STD-8719.13C Software Safety Standard.
    AFSPCMAN 91-710 (v1) Range Safety Policies and Procedures, AFSPCMAN
91-710 (v2) Range Safety User Requirements Manual, Volume 2--Flight
Safety Requirements, AFSPCMAN 91-712 Launch Safety Software and
Computing System Requirements, and 45 SWI 91-701 45th Space Wing Launch
Safety Software Management.
    CMMI-Dev (ML3) Capability Maturity Model Integration.
    MEI-000071 Configuration Management, MEI-000120 Requirements
Development and Management, MEI-000124 Technical Solution, MEI-000149
Agile Software Development Process, and MEI-000125 Verification and
Validation.

FOR FURTHER INFORMATION CONTACT: For questions about the performance
criteria, you may contact Randal Maday, Licensing and Evaluation
Division (AST-200), FAA Office of Commercial Space Transportation
(AST), 800 Independence Avenue SW, Room 331, Washington, DC 20591,
telephone<PHONE_NUMBER>; Email [email protected].

    Issued in Washington, DC, on 9 February 2018.
George C. Nield,
Associate Administrator for Commercial Space Transportation.
[FR Doc. 2018-03399 Filed 2-16-18; 8:45 am]
BILLING CODE 4910-13-P


Pyraflufen-ethyl (030090)

Screening Level Usage Analysis (SLUA)

Date: April 15, 2013

What is a Screening Level Usage Analysis (SLUA)?

Available estimates of pesticide usage data for a particular active
ingredient that is used on agricultural crops in the United States.

Pesticide usage data obtained from various sources.  The data are then
merged, averaged, and rounded so that the presented information is not
proprietary, business confidential, or trade secret.

What does it contain?

Pesticide usage data for a single active ingredient only.

Agricultural use sites (crops) that the pesticide is reported to be used
on.

Available pesticide usage information from U.S. states that produce 80%
or more of a crop, in most cases, or less than 80%, in rare cases,
depending on the scope of the survey and available resources.

Annual percent of crop treated (average & maximum) for each agricultural
crop.

Average annual pounds of the pesticide applied for each agricultural
crop (i.e., for the states surveyed, not for the entire United States).

What assumptions can I make about the reported data?

Average pounds of active ingredient applied - Values are calculated by
merging pesticide usage data sources together; averaging across all
observations, then rounding.  Note:  If the estimated value is less than
500, then that value is labeled <500.  Estimated values between 500 &
<1,000,000 are rounded to 1 significant digit.  Estimated values of
1,000,000 or greater are rounded to 2 significant digits.)

Average percent of crop treated - Values are calculated by merging data
sources together; averaging by year, averaging across all years, &
rounding to the nearest multiple of 5.  Note:  If the estimated value is
less than 2.5, then the value is labeled <2.5.  If the estimated value
is less than 1, then the value is labeled <1.

Maximum percent of crop treated - Value is the single maximum value
reported across all data sources, across all years, & rounded up to the
nearest multiple of 5.  Note:  If the estimated value is less than 2.5,
then the value is labeled <2.5.

What are the data sources used?

USDA-NASS (United States Department of Agriculture’s National
Agricultural Statistics Service) – pesticide usage data from 2004 to
2011.

Private pesticide market research – pesticide usage data from 2004 to
2011.

California Department of Pesticide Regulation (DPR) Pesticide Use
Reporting (PUR) data for 2004 to 2010.

What are the limitations to the data?

Additional registered uses may exist but are not included because the
available surveys do not report usage (e.g., small acreage crops).

Lack of reported usage data for the pesticide on a crop does not imply
zero usage.

Usage data on a particular site may be noted in data sources, but not
quantified.  In these instances, the site would not be reported in the
SLUA.

Non-agricultural use sites (e.g., turf, post-harvest, mosquito control,
etc.) are not reported in the SLUA.  A separate request must be made to
receive these estimates.

Some sites show some use, even though they are not on the label.  This
usage could be due to various factors, including, but not limited to
Section 18 requests, existing stocks of the chemical, data collection
errors, and experimental use permits (EUPs).

Date: April 15, 2013

Screening Level Estimates of Agricultural Uses of Pyraflufen-ethyl
(030090)

Sorted Alphabetically

Reporting Years: 2004-2011

	Percent Crop Treated

	Crop	Lbs. A.I.	Avg.	Max.

1	Alfalfa	        <500	  <1	<2.5

2	Almonds	        <500	  <1	<2.5

3	Apples	        <500	  <1	<2.5

4	Apricots *	        <500	NC	NC

5	Cherries	        <500	  <1	<2.5

6	Corn	        <500	  <1	<2.5

7	Cotton	       2,000	   5	  10

8	Dry Beans/Peas	        <500	  <1	<2.5

9	Fallow	        <500	  <1	<2.5

10	Grapes	        <500	  <1	<2.5

11	Kiwifruit * 	        <500	NC	NC

12	Nectarines * 	        <500	NC	NC

13	Olives * 	        <500	NC	NC

14	Onions	        <500	  <1	<2.5

15	Pasture	        <500	  <1	<2.5

16	Peaches	        <500	<2.5	<2.5

17	Peanuts	        <500	  <1	<2.5

18	Pecans	        <500	  <1	<2.5

19	Pistachios	        <500	<2.5	<2.5

20	Plums/Prunes	        <500	<2.5	<2.5

21	Pomegranates * 	        <500	NC	NC

22	Potatoes	        <500	  <1	<2.5

23	Sorghum	        <500	  <1	<2.5

24	Soybeans	        <500	  <1	<2.5

25	Squash	        <500	  <1	<2.5

26	Sunflowers	        <500	  <1	<2.5

27	Tomatoes	        <500	  10	  20

28	Walnuts	        <500	  <1	<2.5

29	Wheat	        <500	  <1	<2.5

All numbers are rounded.

<500: indicates less than 500 pounds of active ingredient.

	  <2.5: indicates less than 2.5 percent of crop is treated.

	  <1: indicates less than 1 percent of crop is treated.

*  Based on CA DPR data only (80% or more of U.S. acres grown are in
California)

	NC: not calculated, only pounds a.i. available.

SLUA data sources include:

USDA-NASS (United States Department of Agriculture's National
Agricultural Statistics Service)

Private Pesticide Market Research

California DPR (Department of Pesticide Regulation)

These results reflect amalgamated data developed by the Agency and are
releasable to the public.


[Federal Register Volume 78, Number 124 (Thursday, June 27, 2013)]
[Rules and Regulations]
[Page 38555]
[FR Doc No: 2013-15286]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 71

[Docket No. FAA-2013-0074; Airspace Docket No. 13-ASO-3]

Amendment of Class E Airspace; Selmer, TN

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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SUMMARY: This action amends Class E Airspace at Selmer, TN, as the
Sibley Non-Directional Beacon (NDB) has been decommissioned and new
standard instrument approach procedures developed for Instrument Flight
Rules (IFR) operations at Robert Sibley Airport. This enhances the
safety and management of aircraft operations at the airport. This
action also updates the geographic coordinates of the airport.

DATES: Effective 0901 UTC, August 22, 2013. The Director of the Federal
Register approves this incorporation by reference action under title 1,
Code of Federal Regulations, part 51, subject to the annual revision of
FAA Order 7400.9 and publication of conforming amendments.

FOR FURTHER INFORMATION CONTACT: John Fornito, Operations Support
Group, Eastern Service Center, Federal Aviation Administration, P.O.
Box 20636, Atlanta, Georgia 30320; telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

History

    On March 14, 2013, the FAA published in the Federal Register a
notice of proposed rulemaking (NPRM) to amend Class E airspace at
Robert Sibley Airport, Selmer, TN. (78 FR 16202). Interested parties
were invited to participate in this rulemaking effort by submitting
written comments on the proposal to the FAA. No comments were received.
    Class E airspace designations are published in paragraph 6005 of
FAA Order 7400.9W dated August 8, 2012, and effective September 15,
2012, which is incorporated by reference in 14 CFR 71.1. The Class E
airspace designations listed in this document will be published
subsequently in the Order.

The Rule

    This amendment to Title 14, Code of Federal Regulations (14 CFR)
part 71 amends Class E airspace extending upward from 700 feet above
the surface within a 6.7-mile radius of Robert Sibley Airport, Selmer,
TN. Airspace reconfiguration is necessary due to the decommissioning of
the Sibley NDB and cancellation of the NDB approach, and for continued
safety and management of IFR operations at the airport. The geographic
coordinates of the airport also are adjusted to be in concert with FAAs
aeronautical database.
    The FAA has determined that this regulation only involves an
established body of technical regulations for which frequent and
routine amendments are necessary to keep them operationally current, is
non-controversial and unlikely to result in adverse or negative
comments. It, therefore, (1) is not a ``significant regulatory action''
under Executive Order 12866; (2) is not a ``significant rule'' under
DOT Regulatory Policies and Procedures (44 FR 11034; February 26,
1979); and (3) does not warrant preparation of a Regulatory Evaluation
as the anticipated impact is so minimal. Since this is a routine matter
that only affects air traffic procedures and air navigation, it is
certified that this rule, when promulgated, does not have a significant
economic impact on a substantial number of small entities under the
criteria of the Regulatory Flexibility Act.
    The FAA's authority to issue rules regarding aviation safety is
found in Title 49 of the United States Code. Subtitle I, Section 106
describes the authority of the FAA Administrator. Subtitle VII,
Aviation Programs, describes in more detail the scope of the agency's
authority. This rulemaking is promulgated under the authority described
in Subtitle VII, Part A, Subpart I, Section 40103. Under that section,
the FAA is charged with prescribing regulations to assign the use of
airspace necessary to ensure the safety of aircraft and the efficient
use of airspace. This regulation is within the scope of that authority
as it amends controlled airspace at Robert Sibley Airport, Selmer, TN.

Environmental Review

    The FAA has determined that this action qualifies for categorical
exclusion under the National Environmental Policy Act in accordance
with FAA Order 1050.1E, ``Environmental Impacts: Policies and
Procedures,'' paragraph 311a. This airspace action is not expected to
cause any potentially significant environmental impacts, and no
extraordinary circumstances exist that warrant preparation of an
environmental assessment

Lists of Subjects in 14 CFR Part 71

    Airspace, Incorporation by reference, Navigation (Air).

Adoption of the Amendment

    In consideration of the foregoing, the Federal Aviation
Administration amends 14 CFR part 71 as follows:

PART 71--DESIGNATION OF CLASS A, B, C, D, AND E AIRSPACE AREAS; AIR
TRAFFIC SERVICE ROUTES; AND REPORTING POINTS

0
1. The authority citation for Part 71 continues to read as follows:

    Authority: 49 U.S.C. 106(g); 40103, 40113, 40120; E.O. 10854, 24
FR 9565, 3 CFR, 1959-1963 Comp., p. 389.

Sec.  71.1  [Amended]

0
2. The incorporation by reference in 14 CFR 71.1 of Federal Aviation
Administration Order 7400.9W, Airspace Designations and Reporting
Points, dated August 8, 2012, effective September 15, 2012, is amended
as follows:

Paragraph 6005. Class E Airspace Areas Extending Upward from 700
feet or More Above the Surface of the Earth.

* * * * *

ASO TN E5 Selmer, TN [Amended]

Robert Sibley Airport, TN
    (Lat. 35[deg]12'11'' N., long. 88[deg]29'54'' W.)

    That airspace extending upward from 700 feet above the surface
within a 6.7-mile radius of Robert Sibley Airport.

    Issued in College Park, Georgia, on June 19, 2013.
Barry A. Knight,
Manager, Operations Support Group, Eastern Service Center, Air Traffic
Organization.
[FR Doc. 2013-15286 Filed 6-26-13; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 88, Number 41 (Thursday, March 2, 2023)]
[Notices]
[Page 13137]
[FR Doc No: 2023-04275]

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

[Internal Agency Docket No. FEMA-4683-DR; Docket ID FEMA-2023-0001]

California; Amendment No. 6 to Notice of a Major Disaster
Declaration

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Notice.

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SUMMARY: This notice amends the notice of a major disaster declaration
for the State of California (FEMA-4683-DR), dated January 14, 2023, and
related determinations.

DATES: This amendment was issued February 1, 2023.

FOR FURTHER INFORMATION CONTACT: Dean Webster, Office of Response and
Recovery, Federal Emergency Management Agency, 500 C Street SW,
Washington, DC 20472,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: The notice of a major disaster declaration
for the State of California is hereby amended to include the following
areas among those areas determined to have been adversely affected by
the event declared a major disaster by the President in his declaration
of January 14, 2023.

    Alameda, Contra Costa, and Mendocino Counties for Individual
Assistance.
    Ventura County for Individual Assistance (already designated for
Public Assistance).
    Alameda, Butte, Colusa, Fresno, Glenn, Humboldt, Los Angeles,
Marin, Mendocino, Placer, Santa Clara, Siskiyou, Sonoma, Trinity,
and Yolo Counties for Public Assistance.
    Calaveras and San Joaquin Counties for Public Assistance
(already designated for Individual Assistance).
    San Luis Obispo County for permanent work [Categories C-G]
(already designated for Individual Assistance and assistance for
debris removal and emergency protective measures [Categories A and
B], including direct federal assistance, under the Public Assistance
program).

    The following Catalog of Federal Domestic Assistance Numbers
(CFDA) are to be used for reporting and drawing funds: 97.030,
Community Disaster Loans; 97.031, Cora Brown Fund; 97.032, Crisis
Counseling; 97.033, Disaster Legal Services; 97.034, Disaster
Unemployment Assistance (DUA); 97.046, Fire Management Assistance
Grant; 97.048, Disaster Housing Assistance to Individuals and
Households In Presidentially Declared Disaster Areas; 97.049,
Presidentially Declared Disaster Assistance--Disaster Housing
Operations for Individuals and Households; 97.050, Presidentially
Declared Disaster Assistance to Individuals and Households--Other
Needs; 97.036, Disaster Grants--Public Assistance (Presidentially
Declared Disasters); 97.039, Hazard Mitigation Grant.

Deanne Criswell,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2023-04275 Filed 3-1-23; 8:45 am]
BILLING CODE 9111-23-P


[Federal Register Volume 80, Number 120 (Tuesday, June 23, 2015)]
[Notices]
[Pages 35997-36006]
[FR Doc No: 2015-15339]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75189; File No. SR-Phlx-2015-49]

Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing of Proposed Rule Change to Rule 1080.07

June 17, 2015.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on June 5, 2015, NASDAQ OMX PHLX LLC (``Phlx'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II, and III below, which
Items have been prepared by the Exchange. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
---------------------------------------------------------------------------

    \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 and correct Rule 1080.07 in a number
of ways, as described further below.
    The text of the proposed rule change is available on the Exchange's
Web site at http://nasdaqomxphlx.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 parts of such
statements.

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

1. Purpose
    The purpose of the proposal is to amend and correct certain rule
text and provide additional clarity to Phlx Participants regarding the
trading of Complex Orders on the Exchange. The Exchange's Complex Order
System (``System''), which is governed by Rule 1080.07 includes an
opening process called the Complex Order Opening Process or ``COOP,''
the Complex Order Live Auction (``COLA''), an automated auction for
seeking additional liquidity and price improvement for Complex Orders,
and a Complex Limit Order book, the CBOOK.
    Except for the time period referred to in Rule 1080.07(f)(i)(F) and
the acceptance and treatment of all-or-none orders (both of which are
discussed below), the Exchange proposes to correct several
inconsistencies between the existing Complex Orders rule, Rule 1080.07,
and the operation of the Complex Orders System today.
Opening Inconsistencies
    First, the Exchange proposes to amend the rule text applicable to
its opening process. Specifically, Rule 1080.07(d) currently provides
for performing a COOP Evaluation in order to identify a COLA-eligible
order and then operating an auction respecting that order, similar to
the way the COLA operates.\3\ The Exchange proposes to amend Rule
1080.07(d) to reflect that the System operates the opening auction
process for Complex Orders differently than the COLA.\4\ Specifically,
the COOP identifies a price at which the maximum number of contracts
can trade on the opening based on interest received in the Complex
Order Strategy.\5\ Thus, the COOP operates like a traditional opening
process for non-Complex Orders (meaning, single leg orders),
considering buys and sells, taking all interest into account (without
bias toward any participant) to determine which interest is executable
and identifying any imbalance.\6\
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    \3\ The COLA is an auction intended to solicit interest in a
particular Complex Order other than on the opening. See Rule
1080.07(e).
    \4\ The rule provides that the System determines which Complex
Order, if any, on the CBOOK will be the ``COLA-eligible order''
subject to a COLA. This is not correct.
    \5\ A Complex Order Strategy means a particular combination of
components of a Complex Order and their ratios to one another. The
Exchange will calculate both a bid price and an offer price for each
Complex Order Strategy based on the current PBBO (as defined below)
for each component of the Complex Order. Each Complex Order Strategy
will be assigned a strategy identifier by the System. See Rule
1080.07(a)(ii).
    \6\ An imbalance is the number of contracts that cannot be
matched with other interest at a particular price. See e.g. NOM
Chapter VI, Section 8(a)(1).
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    Despite the current rule text, a Complex Order on the opening would
not have been designated as the COLA-eligible Order with priority over
all other same-side orders. Instead, such order would have been
considered for execution alongside other same-priced same-side orders
received in the same Complex Order Strategy, both before and during the
COOP, consistent with a normal opening process. Specifically, for each
Complex Order Strategy, the System will take into consideration all
Complex Orders, identify the price at which the maximum number of
contracts can trade and calculate the imbalance, if any, as follows:
     Pursuant to existing Rule 1080.07(d)(i), the System will
accept pre-opening Complex Orders, and will accept Complex Orders prior
to re-opening following a halt in trading on the Exchange. Complex
Orders received prior to the opening or during a trading halt will
reside on the CBOOK (as defined above). There will be one such COOP per
Complex Order Strategy. These provisions are not changing.
     Rule 1080.07(d)(ii) will be amended to add reference to a
timer. Specifically, new rule text will provide that once trading in
each option component of a Complex Order Strategy has opened (or re-
opened following a trading halt) for a certain configurable time not to
exceed 60 seconds \7\ (and none of the conditions described in Rule
1080.07(c)(ii) exist),\8\ the System will initiate the COOP, provided
that a COOP will only be conducted for any Complex Order Strategy that
has a Complex Order received before the opening \9\ of that Complex
Order Strategy. The Exchange is proposing to add new rule text to
provide that the Exchange will not conduct a COOP when a particular
Complex Order Strategy is already open as a result of another
electronic auction process, such as PIXL pursuant to Rule 1080(n) or
the Exchange's Solicitation mechanism or if another electronic auction
involving the same Complex

Order Strategy is in progress.\10\ If that Complex Order Strategy is
already open, a COOP is not needed and will not occur.
---------------------------------------------------------------------------

    \7\ This is known as the opening delay timer, which is intended
to allow a brief period of time for the prices for the various
series of an option to stabilize after the opening of those series.
    \8\ These include: the Complex Order is received prior to the
opening on the Exchange of any options component of the Complex
Order; during an opening rotation for any options component of the
Complex Order; during a trading halt for any options component of
the Complex Order; when the Exchange's Risk Monitor Mechanism is
engaged for any options component of the Complex Order that
represents all of the PBBO pursuant to Rule 1093; or when the
Exchange's market for any options component of the Complex Order is
disseminated pursuant to Rule 1082(a)(ii)(B).
    \9\ Currently, the Rule provides that the COOP is conducted if a
Complex Order is pending at the opening or re-opening. However, such
Complex Order may no longer be pending (perhaps it was canceled),
such that a COOP is actually triggered by receipt of the order.
    \10\ See SR-Phlx-2014-66.
---------------------------------------------------------------------------

     The Exchange is also proposing to add to Rule
1080.07(d)(ii) that following a trading halt, a COOP will be conducted
for any Complex Order Strategy where a Complex Order was received
before or during a trading halt or that Complex Order Strategy had
previously opened prior to the trading halt.
     The COOP will be conducted in two phases, the ``COOP
Timer'' (as defined below) and the ``COOP Evaluation'' (also defined
below). A COOP can be occurring at the same time in different Complex
Order Strategies.
     To add specificity, the Exchange is proposing to add to
Rule 1080.07(d)(ii)(A)(1) that the Exchange will send a broadcast
message indicating that a COOP has been initiated. The broadcast
message will identify the Complex Order Strategy,\11\ the opening price
(based on the maximum number of contracts that can be executed at one
particular price, except if there is no price at which any orders can
be executed), and the imbalance side and volume, if any. This broadcast
message is called the Complex Order Opening Auction Notification and is
sent over an order feed, PHLX Orders, which contains Complex Order
information, as well as over the Specialized Quote Feed (``SQF'').\12\
---------------------------------------------------------------------------

    \11\ Each Complex Order Strategy has an identifier. See Rule
1080.07(a)(ii).
    \12\ Securities Exchange Act Release Nos. 60877 (October 26,
2009), 74 FR 56255 (October 30, 2009) (SR-Phlx-2009-92) and 66993
(May 15, 2012), 77 FR 30043 (May 21, 2012) (SR-Phlx-2012-63)
(addressing TOPO Plus Orders/PHLX Orders).
---------------------------------------------------------------------------

     Pursuant to Rule 1080.07(d)(ii)(A)(1), the Complex Order
Opening Auction Notification starts a COOP Timer, which will begin
counting a number of seconds during which the Complex Order, if any,
may not be traded. The COOP Timer is configurable to a period ranging
from 0 to 600 seconds as determined by the Exchange and communicated to
Exchange membership on the Exchange's Web site. The COOP Timer will be
configured for the same number of seconds for all options trading on
the Exchange. During the COOP Timer, Phlx XL Participants can submit
responses to the Complex Order Opening Auction Notification pursuant to
subparagraph (B).
    The Exchange is proposing to delete Rule 1080.07(d)(ii)(A)(2),
which currently provides that the System will not engage the COOP Timer
upon re-opening Complex Order trading when either: (a) The Exchange's
automated execution system was disengaged and subsequently re-engaged,
or (b) the Phlx XL Risk Monitor Mechanism was engaged and subsequently
disengaged. It further provides that, instead, the System will
immediately begin the COOP Evaluation and will not initiate the COOP
Timer. This provision is incorrect and obsolete because the Exchange
does not and cannot disengage its automatic execution system; automatic
execution is a fundamental aspect of the System. With respect to the
Risk Monitor Mechanism, its operation has no impact on the COOP Timer.
    The Exchange proposes to amend Rule 1080.07(d)(ii)(A)(4) to specify
in more detail that Complex Orders received prior to the COOP Timer and
Complex Orders received during the COOP Timer (other than COOP Sweeps
and Complex Order Responses marked as a response) will be visible to
Phlx XL participants upon receipt.
Opening--Immediate-or-Cancel Orders and DNA Orders
    Currently, Complex Orders marked as Immediate-or-Cancel (``IOC'')
\13\ and Do Not Auction (``DNA'') \14\ can be submitted. The Exchange
proposes to adopt into Rule 1080.07(d)(ii)(A)(5) how both IOC and DNA
orders are handled on the opening. Complex Orders marked as IOC or DNA
received before the COOP is initiated will be cancelled and will not
participate in the COOP; however, a COOP will nevertheless occur in
that Complex Order Strategy. The Exchange believes that it is
appropriate for the COOP to occur even though the IOC or DNA order that
triggered it is cancelled,\15\ because the opening process is intended
to open key strategies in which participants are interested. From a
system perspective and as a practical matter, not every Complex Order
Strategy can be opened each day, as there are millions of possible
permutations, based on the number of options and option series
available for trading today. This way, the System can focus on the
Complex Order Strategies that attract interest and prepare to open
those, making them available for trading on a particular day.
---------------------------------------------------------------------------

    \13\ See Rule 1080.07(b)(i)-(iii).
    \14\ See Rule 1080.07(a)(viii).
    \15\ A Complex Order Opening Auction Notification is sent with a
price and size of zero, and a buy side.
---------------------------------------------------------------------------

    The Exchange believes it is appropriate for the COOP to occur,
because responsive interest on both sides of the market can
nevertheless trade against other responding interest. In fact, today,
if an order that is not an IOC order (like a Day order) initiates a
COOP and then is cancelled by the entering participant before the end
of the COOP, responsive interest can nevertheless trade.
    IOC and DNA orders are handled differently when received during a
COOP. IOC Complex Orders received during a COOP will join the COOP and
be treated like any other Complex Order, except such orders will be
cancelled at the end of the COOP Timer if not executed. This is
intended to try to execute the order, because the order may be
responding to the Complex Order Opening Auction Notification. The
Exchange notes that IOC Complex Orders are handled similarly in the
Exchange's PIXL system for similar reasons; \16\ that is, an attempt is
made to execute the IOC Complex PIXL order, and therefore there is a
delay in executing the order, even though it is marked IOC.
Accordingly, the Exchange does not believe that participants will be
surprised about this handling.
---------------------------------------------------------------------------

    \16\ See Phlx Rule 1080(n) governing PIXL; the Exchange notes
that this provision does not expressly describe how IOC orders are
handled.
---------------------------------------------------------------------------

    The Exchange also notes that participants who want their order
handled in a more immediate way during a COOP can submit a DNA order,
which would not join a COOP that is in progress and instead be
cancelled right away, because that would involve a delay. Consistent
with the rule language that DNA Orders are cancelled if not immediately
executed,\17\ DNA Orders do not participate in a COOP.
---------------------------------------------------------------------------

    \17\ See Phlx Rule 1080.07(a)(viii)(B).
---------------------------------------------------------------------------

Opening--Responses During COOP Timer
    Pursuant to proposed Rule 1080.07(d)(ii)(B), Phlx XL participants
\18\ may bid and/or offer on either or both side(s) of the market
during the COOP Timer by submitting one or more Complex Orders
(``Complex Order Response''). In addition, Phlx XL market makers \19\
may also bid and/or offer on either or both side(s) of the market

during the COOP Timer by submitting one or more COOP Sweeps. The
Exchange is proposing to codify COOP Sweeps in Rule 1080.07(d)(ii)(B).
COOP Sweeps are one-sided and always have a limit price. Like COLA
Sweeps, COOP Sweeps can only be entered by Phlx XL market makers,
participants who quote electronically as market makers for their own
account (SQTs, RSQTs and specialists). Because non-SQT ROTs do not
quote electronically, they cannot enter COOP Sweeps or COLA Sweeps,
which are electronic.\20\ Specifically, a COOP Sweep is a one-sided
electronic quotation for execution against opening trading interest in
a particular Complex Order Strategy; this definition is proposed to be
added to the rule text.\21\
---------------------------------------------------------------------------

    \18\ This term is currently defined in Rule 1080.07(a)(vii) as
Streaming Quote Traders (``SQTs''), Remote Streaming Quote Traders
(``RSQTs''), non-SQT Registered Options Traders (``non-SQT ROTs''),
specialists and non-Phlx market makers on another exchange; non-
broker-dealer customers and non-market-maker off-floor broker-
dealers; and Floor Brokers using the Options Floor Broker Management
System. Once amended to include Firms (as proposed herein), this
term will cover all potential users of the Complex Orders system.
    \19\ This is a new term that the Exchange believes will help
distinguish Phlx XL market makers (which include specialists, SQTs
and RSQTs) from other types of Phlx participants. See proposed Rule
1080.07(a)(vii).
    \20\ See Rule 1014(b)(ii)(C) and Rule 1080.07(e)(ix).
    \21\ This definition parallels the definition of an opening
sweep in Rule 1017(l)(vii)(A).
---------------------------------------------------------------------------

    The Exchange believes it is appropriate to permit Phlx XL market
makers to submit COOP Sweeps, in addition to Complex Orders, for
several reasons. Today, Phlx XL market makers are the only participants
who can submit quotes, sweeps of non-Complex Orders, COLA Sweeps and
COOP Sweeps (``Sweeps'').\22\ All of these, including COOP Sweeps, are
submitted over the Specialized Quote Feed, SQF, which is a method of
submitting quoting information and receiving information back about
those quotes and Sweeps. Quotes and Sweeps can only be submitted over
SQF, the quoting protocol, because this protocol is designed to handle
quotes and Sweeps. Some Phlx XL market makers choose to submit their
interest in the form of a Complex Order, which is submitted through a
different interface than SQF and is geared toward the submission of
orders (rather than quotes) to the Exchange. The Exchange developed
Sweeps in order for Phlx XL market makers to be able to expeditiously
submit one-sided responsive interest without having to enter an order,
which involves an entirely different protocol and method of entry; this
was intended to encourage Phlx XL market makers to submit responsive
interest while managing risk, utilizing a single protocol, which should
promote just and equitable principles of trade.
---------------------------------------------------------------------------

    \22\ Although Rule 1080.07(e)(iv) states that Phlx XL
participants can submit COLA Sweeps, this is not correct. Only Phlx
XL market makers can submit COLA Sweeps. The Exchange proposes to
correct this in Rule 1080.07(a)(vii) and (e)(iv).
---------------------------------------------------------------------------

    There is no advantage to submitting a COOP Sweep versus a Complex
Order; Phlx XL market maker interest is handled the same once it is
submitted regardless of how it is submitted, including for priority
purposes.\23\ Furthermore, there is no timing advantage of submitting a
COOP Sweep versus a Complex Order (whether for a Phlx XL market maker
or not), because none of the interest is processed until after the COOP
Timer ends and all Phlx XL market maker interest is executed on a pro-
rata basis, not in time priority. Conversely, there is no disadvantage
to non-Phlx XL market makers that they cannot submit a COOP Sweep, just
like there is no such disadvantage that such participants cannot submit
a quote. By definition, Phlx XL market makers submit, and are obligated
to submit, quotes; this is the core distinction between market makers
and other market participants.
---------------------------------------------------------------------------

    \23\ See e.g., proposed Rule 1080.07(d)(ii)(C).
---------------------------------------------------------------------------

    A Phlx XL market maker may submit multiple COOP Sweeps at different
prices (but not multiple COOP Sweeps at the same price, except as
provided in sub-paragraph (2)), in increments of $0.01 in response to a
Complex Order Opening Auction Notification, regardless of the minimum
trading increment applicable to the specific series.\24\
---------------------------------------------------------------------------

    \24\ See proposed Rule 1080.07(d)(ii)(B)(1).
---------------------------------------------------------------------------

    In addition, Phlx XL market makers may change the size of a
previously submitted COOP Sweep during the COOP Timer. The System will
use the Phlx XL market maker's most recently submitted COOP Sweep at
each price level as that market maker's response at that price level,
unless the COOP Sweep has a size of zero. A COOP Sweep with a size of
zero will remove a Phlx XL market maker's COOP Sweep from that COOP at
that price level.\25\ COOP Sweeps will not be visible to any
participant and will not be disseminated by the Exchange.\26\ This is
because COOP Sweeps are only available to trade during the COOP and
will expire if unexecuted at the end of the COOP Timer once all
executions are complete. Similarly, Complex Order Responses are not
visible if marked as a response. A Complex Order Response will expire
if unexecuted at the end of the COOP Timer once all executions are
complete, but a Complex Order submitted during the COOP Timer which is
not marked as a response will be available to be traded after the
opening of a Complex Order Strategy unless it is marked IOC.
---------------------------------------------------------------------------

    \25\ See Rule 1080.07(d)(ii)(B)(2).
    \26\ See Rule 1080.07(d)(ii)(B)(3).
---------------------------------------------------------------------------

Opening--COOP Evaluation
    Upon expiration of the COOP Timer,\27\ the System will conduct a
COOP Evaluation to determine, for a particular Complex Order Strategy,
the price at which the maximum number of contracts can trade, taking
into account Complex Orders marked all-or-none, unless the maximum
number of contracts can only trade without including all-or-none
orders.\28\ The Exchange will open at that price, executing marketable
trading interest, in the following order: First, to non-broker-dealer
customers in time priority; next to Phlx XL market makers on a pro-rata
basis; and then to all other participants on a pro-rata basis.\29\ The
imbalance of Complex Orders that are unexecutable at that price are
placed on the CBOOK.
---------------------------------------------------------------------------

    \27\ See Rule 1080.07(d)(ii)(C).
    \28\ The Exchange stopped accepting all-or-none Complex Orders
on March 17, 2014 in order to align the System with the rule. The
Exchange has incorporated a definition of all-or-none orders in
Securities Exchange Act Release No. 72351 (June 9, 2014), 79 FR
33977 (June 13, 2014) (SR-Phlx-2014-39). Now, the Exchange proposes
to begin accepting them again and explain how they are handled,
including how they are treated on the opening and that they do not
leg. See Rule 1080.07(d)(ii)(C), (e)(vi)(A)(1) and (f)(iii)(A).
    \29\ This is consistent with the Exchange's normal priority
allocation process. See e.g., Rule 1080.07(e)(vi)(B) and Rule
1014(g)(vii).
---------------------------------------------------------------------------

    The following examples illustrate the handling of an all-or-none
order on the opening.

    Example 1:
Complex Order #1: Buy 40 for $1.05 AON customer
Complex Order #2: Buy 30 for $1.05 customer
Complex Order #3: Buy 20 for $1.05 customer
Complex Order #4: Sell 50 at $1.04 AON customer

    The result is that Complex Order #4 will trade against the full
size of Complex Order #1 (because it was first) and 10 contracts of
Complex Order #2.

    Example 2:
Complex Order #1: Buy 40 for $1.05 AON customer
Complex Order #2: Buy 30 for $1.05 customer
Complex Order #3: Buy 20 for $1.05 customer
Complex Order #4: Sell 20 at $1.04 AON customer

    The result is that Complex Order #4 will trade against 20 contracts
of Complex Order #2 since the all-or-none contingency of Order #1
cannot be satisfied.
    Opening--No trade possible. If at the end of the COOP Timer the
System determines that no market or marketable limit Complex Orders or
COOP Sweeps, Complex Orders or COOP Sweeps that are equal to or improve
the cPBBO,\30\

and/or Complex Orders or COOP Sweeps that cross within the cPBBO exist
in the System, all Complex Orders received during the COOP Timer will
be placed on the CBOOK, as described in Rule 1080.07(f). This is
because, without an opening execution possible based on the prices of
orders and COOP Sweeps in a particular strategy, such Complex Orders
shall rest on the CBOOK for potential execution later while COOP Sweeps
expire.
---------------------------------------------------------------------------

    \30\ The term ``cPBBO'' means the best net debit or credit price
for a Complex Order Strategy based on the Phlx Best Bid and/or Offer
(``PBBO'') for the individual options components of such Complex
Order Strategy, and, where the underlying security is a component of
the Complex Order, the National Best Bid and/or Offer for the
underlying security. The cPBBO is a calculated number and does not
include orders on the CBOOK or interest on other exchanges. See Rule
1080.07(a)(iv).
---------------------------------------------------------------------------

    Opening--Trade is possible. If at the end of the COOP Timer the
System determines that there are market or marketable limit Complex
Orders or COOP Sweeps, Complex Orders or COOP Sweeps that are equal to
or improve the cPBBO, and/or Complex Orders or COOP Sweeps that cross
within the cPBBO in the Phlx XL System, the System will do the
following: If such interest crosses and does not match in size, the
execution price is based on the highest (lowest) executable offer (bid)
price when the larger sized interest is offering (bidding), provided,
however, that if there is more than one price at which the interest may
execute, the execution price when the larger sized interest is offering
(bidding) is the midpoint of the highest (lowest) executable offer
(bid) price and the next available executable offer (bid) price
rounded, if necessary, down (up) to the closest minimum trading
increment.\31\ If the crossing interest is equal in size, the execution
price is the midpoint of lowest executable bid price and the highest
executable offer price, rounded, if necessary, up to the closest
minimum trading increment. This process maximizes the interest which is
traded during the opening process and delivers a rational price for the
available interest on the opening. The opening price logic maximizes
the number of contracts executed during the opening process and ensures
that residual contracts of partially executed orders or quotes are at a
price equal to or inferior to the opening price, in other words, the
logic ensures there is no remaining unexecuted interest available at a
price which crosses the opening price. If multiple prices exist that
ensure that there is no remaining unexecuted interest available through
such price(s), the opening logic chooses the midpoint of such price
points.
---------------------------------------------------------------------------

    \31\ See Rule 1080.07(d)(ii)(C)(2).
---------------------------------------------------------------------------

    In determining the execution price and which interest will trade,
the System affords priority to customers on the opening as well.
Executable bids/offers include any interest which could be executed
without trading through residual interest or the cPBBO, or without
trading at the cPBBO where there is non-broker-dealer customer
interest. This is consistent with Rule 1080.07(c)(iii).
    To illustrate ``if such interest crosses and does not match in
size, the execution price is based on the highest (lowest) executable
offer (bid) price when the larger sized interest is offering
(bidding)'' as referenced above, assume the following is present at the
end the COOP Timer for a given Complex Order Strategy:

cPBBO = 3.50 (10)-3.90 (10)
Complex Order #1: Buy 30 for $3.79
Complex Order #2: Sell 20 at $3.56

    COOP Opening execution will be for 20 strategies at a price of
$3.79 because there were more contracts to buy than there were to sell.
In this example, while there are multiple price points at which the
System can open the same number of contracts, there is only one price
point, $3.79, at which there will be no residual contracts available
after the opening process at a price which crosses the opening price.
After the System executes 20 strategies at $3.79, there will remain 10
unexecuted strategies to buy for $3.79.
    If the example were changed slightly such that Complex Order #1 was
a market order instead of a limit order, the market order is limited by
the cPBBO assuming no customer interest is present, and the COOP
execution price for 20 strategies would be $3.90. The remaining 10
strategies of Complex Order #1 will then leg to the simple market at
$3.90.
    To illustrate ``if there is more than one price at which the
interest may execute, the execution price when the larger sized
interest is offering (bidding) is the midpoint of the highest (lowest)
executable offer (bid) price and the next available executable offer
(bid) price rounded, if necessary, down (up) to the closest minimum
trading increment'' as referenced above, assume the following is
present at the end the COOP Timer for a given Complex Order Strategy:

cPBBO = 3.50 (10)-3.90 (10)
Complex Order #1: Buy 20 for $3.79
Complex Order #2: Buy 20 for $3.77
Complex Order #3: Buy 20 at $3.74
Complex Order #4: Sell 20 at $3.60
Complex Order #5: Sell 20 at $3.62

    COOP Opening execution will be for 40 strategies at a price of
$3.76. The execution price of $3.76 is derived from the midpoint of the
lowest executable bid price of $3.74 and the next available executable
bid price of $3.77, rounded up to the closest minimum trading
increment. In this example, 40 strategies can be opened at multiple
price points ranging from $3.74 up to $3.77. None of these potential
opening prices will cause the unexecuted $3.74 buy order to be
available at a price which crosses the opening price, therefore, the
System opens at the midpoint of such prices, $3.76.
    If the example were changed slightly such that Complex Order #1 and
Complex Order #2 were market orders instead of a limit orders, the COOP
Opening execution price for the 40 strategies would be $3.82, which is
the midpoint of the potential opening prices ranging from $3.74 to
$3.90.
    To illustrate ``if the crossing interest is equal in size, the
execution price is the midpoint of lowest executable bid price and the
highest executable offer price, rounded, if necessary, up to the
closest minimum trading increment'' as referenced above, assume the
following is present at the end the COOP Timer for a given Complex
Order Strategy:

cPBBO = 3.50 (10)-3.90 (10)
Complex Order #1: Buy 10 for $3.78
Complex Order #2: Buy 20 for $3.74
Complex Order #3: Buy 10 at $3.71
Complex Order #4: Sell 20 at $3.64
Complex Order #5: Sell 20 at $3.66

    COOP Opening execution will be for 40 strategies at a price of
$3.69. The execution price of $3.69 is derived from the midpoint of the
lowest executable bid price of $3.71 and the highest executable offer
price of $3.66, rounded up to the closest minimum trading increment. If
the example were changed slightly such that Complex Order #4 and
Complex Order #5 were market orders rather than limit orders, the COOP
Opening execution price for the 40 strategies would be $3.61, which is
derived from the midpoint of the lowest executable bid price of $3.71
and the highest executable offer of $3.50, rounded to the closest
minimum trading increment.
    To illustrate the application of the Acceptable Complex Execution
(ACE) parameter as defined in Rule 1080.07(i), assume the following is
present at the end the COOP Timer for a given Complex Order Strategy:

ACE Parameter of $0.05
cPBBO = 3.50 (10)-4.00 (10)
cNBBO = 3.70 (10)-3.90 (10)
Complex Order #1: Buy 10 for $3.78
Complex Order #2: Buy 20 for $3.74
Complex Order #3: Buy 10 at $3.71
Complex Order #4: Sell 20 at market
Complex Order #5: Sell 20 at market

    The COOP Opening execution may not occur more than $0.05 outside of
the

cNBBO, and thus cannot occur at a price of less than $3.65 or more than
$3.95. In this case, Complex Order #4 and Complex Order #5 will both be
considered in determining the COOP Opening execution price as orders to
sell limited by the contra side cNBBO ACE limit of $3.65. Therefore,
the COOP Opening execution price for the 40 strategies would be $3.68,
which is derived from the midpoint of the lowest executable bid price
of $3.71 and the highest executable offer of $3.65.
    If there is any remaining interest after complex interest has
traded against other complex interest and there is no component that
consists of the underlying security,\32\ such interest may ``leg''
whereby each options component may trade at the PBBO with existing
quotes and/or limit orders on the limit order book for the individual
components of the Complex Order; provided that remaining interest may
execute against any eligible Complex Orders received before legging
occurs.\33\ If the remaining interest has a component that consists of
the underlying security or is an all-or-none Complex Order, such
Complex Order will be placed on the CBOOK. Although the current rule
text does not provide for legging on the opening, the System is
currently programmed to consider whether legging is possible in order
to maximize the number of executions. Accordingly, the Exchange
proposes to add rule text regarding legging to Rule
1080.07(d)(ii)(C)(2).
---------------------------------------------------------------------------

    \32\ Complex Orders that are not executable at the opening
price, including those that could not leg because there is a
component that consists of the underlying security, will be placed
on the CBOOK. See proposed Rule 1080.07(d)(ii)(C).
    \33\ Remaining interest includes Complex Orders that did not
execute at the opening price and are therefore on the CBOOK and
available to be traded before legging occurs as well as any new
interest that may have arrived during the legging process.
---------------------------------------------------------------------------

    The Exchange also proposes to add that the Complex Order Strategy
will be open for trading after the COOP even if no executions occur.
This is intended to attract additional interest to a Complex Order
Strategy. If additional interest arrives, the Exchange does not believe
another COOP is needed, because such interest will under the normal
processes of the System either be subject to a COLA, be placed on the
CBOOK (both of which are disseminated), or be cancelled.
Other Inconsistencies
    Second, Rule 1080.07(e)(vi)(C) currently provides that when
executing against the COLA-eligible order after a COLA, a participating
specialist shall be entitled to receive, respecting an option in which
he is the specialist, the greater of: (1) The proportion of the
aggregate size at the cPBBO associated with such specialist's COLA
Sweep, SQT and RSQT COLA Sweeps, and non-SQT ROT Complex Orders on the
CBOOK; \34\ (2) the Enhanced Specialist Participation as described in
Rule 1014(g)(ii) \35\ (60/40/30%); or (3) 40% of the remainder of the
order.\36\
---------------------------------------------------------------------------

    \34\ This is commonly known as size pro-rata allocation.
    \35\ Rule 1014(g)(ii) provides that when the registered
specialist is on parity with a controlled account, in accordance
with Exchange Rules 119 and 120 and the number of contracts to be
bought or sold is greater than five, the specialist is entitled to
receive an enhanced participation of 30% of the Remainder of the
Order (``Enhanced Specialist Participation''), except in the
following circumstances: (1) Where there is one controlled account
on parity, the specialist is entitled to receive 60% of the
Remainder of the Order; or (2) where there are two controlled
accounts on parity, in which case, the specialist is entitled to
receive 40% of the Remainder of the Order. See also ISE Rule 722.05.
    \36\ A specialist is not entitled to this enhanced allocation in
options in which he is not registered as the specialist.
---------------------------------------------------------------------------

    The Exchange proposes to better define a COLA Sweep in Rule
1080.07(e)(iv). Specifically, a COLA Sweep, similar but not identical
to a COOP Sweep,\37\ is a one-sided electronic quotation submitted for
execution against other trading interest in a particular Complex Order
Strategy. Any COLA Sweeps which remain unexecuted at the end of the
COLA Timer once all executions are complete will expire.
---------------------------------------------------------------------------

    \37\ See proposed Rule 1080.07(d)(ii)(B).
---------------------------------------------------------------------------

    The Exchange proposes to amend Rule 1080.07(e)(vi)(C) to eliminate
the 40% component, because it does not currently operate.\38\ The
Exchange believes that the 40% language being deleted may have been an
error, because, given the ``greater of'' language in this provision,
the 30% guarantee would never have operated. Accordingly, the Exchange
proposes to amend this provision to reflect that the specialist would
be entitled to receive the greater of: (1) The proportion of the
aggregate size associated with such specialist's COLA Sweep, SQT and
RSQT COLA Sweeps, and non-SQT ROT Complex Orders on the CBOOK; or (2)
the 60/40/30% Enhanced Specialist Participation described in Rule
1014(g)(ii). The Exchange believes that the specialist guarantee of 60/
40/30% is a sufficient incentive for participants to become specialists
and make continuous markets in individual options. The Exchange notes
that this is the same enhanced pro-rata specialist allocation that
applies to non-Complex Orders.\39\
---------------------------------------------------------------------------

    \38\ Because the minimum 40% allocation did not operate, the
specialist may have received less of an allocation than expected
when executing against COLA-eligible interest in a limited number of
situations.
    \39\ Unlike regular, single component options listed and traded
on the Exchange, Complex Orders do not have a specialist or required
market maker providing continuous markets. Complex Orders operate as
an order-driven process, with the prices derived from the prices of
the individual components.
---------------------------------------------------------------------------

    In addition, the Exchange proposes to amend Rule 1080.07(e)(vi)(C)
to correct it by deleting the limitation of aggregating size only at
the cPBBO; the size of the specialist's COLA Sweep, SQT and RSQT COLA
Sweeps, and non-SQT ROT Complex Orders on the CBOOK are all aggregated
at the execution price, regardless whether the price is at cPBBO or
not. Today, the System looks at all of a specialist's COLA Sweeps at a
particular price, not just at the cPBBO and compares it to all other
Phlx XL market maker interest at that price, so the Exchange proposes
to correct the rule.
    In short, the Specialist would be entitled to receive the greater
of: (1) The proportion of the aggregate size associated with such
specialist's COLA Sweep, SQT and RSQT COLA Sweeps, and non-SQT ROT
Complex Orders on the CBOOK; or (2) the 60/40/30% Enhanced Specialist
Participation described in Rule 1014(g)(ii). The Exchange believes that
the specialist guarantee of 60/40/30% is a sufficient incentive for
participants to become specialists and make continuous markets in
individual options. The Exchange notes that this is the same enhanced
pro-rata specialist allocation that applies to non-Complex Orders.\40\
---------------------------------------------------------------------------

    \40\ Rule 1014(g)(vii).
---------------------------------------------------------------------------

    Furthermore, pursuant to Rule 1080.07(e)(vi)(B), for allocation
purposes, the rule states that the size of a COLA Sweep or responsive
Complex Order received during the COLA Timer shall be limited to the
size of the COLA-eligible order. In actuality, the Exchange will accept
size in excess of the COLA-eligible order size and such size can be
executed against remaining interest \41\ after the COLA-eligible order
has been executed to the fullest extent possible.\42\ For example,
where there is a COLA-eligible order bidding $2.00 for 20 contracts,
and the other interest consists of a $2.10 bid for 10 contracts, a
$2.10 offer for 10 contracts and a $2.00 offer

for 10 contracts, even though only 10 contracts of the COLA-eligible
order are executable, the buy and sell orders at $2.10 can nevertheless
execute against each other; thus, although the COLA-eligible order was
not fully executed, it was executed to the fullest extent possible,\43\
which permitted additional executions of responsive interest at a
different price, to the benefit of those orders.
---------------------------------------------------------------------------

    \41\ The remaining interest consists of any potential interest
that has been received, including orders, quotes and COLA Sweeps, as
well as the individual leg market.
    \42\ The Exchange notes that this reflects an internal
inconsistency in this rule, because another sub-paragraph in the
rule addresses the execution of remaining bids or offers from the
incoming non-customer Complex Order(s). See Rule
1080.07(e)(viii)(C)(2)(e).
    \43\ The Exchange is replacing the term ``in its entirety'' with
``to the fullest extent possible'' respecting COLA-eligible orders,
because COLA-eligible orders to [sic] not have to be fully executed
in order for other interest to be executed; such interest might, for
example, be at a different price than the price of the COLA-eligible
order. See Rule 1080.07(e)(vii), (e)(viii)(B), (e)(viii)(C)(1),
(e)(viii)(C)(1)(e), (e)(viii)(C)(2), (e)(viii)(C)(2)(e) and
(e)(viii)(C)(3).
---------------------------------------------------------------------------

    As a result, participants would have had a greater opportunity for
execution and may have received executions in excess of the COLA-
eligible order volume, up to the full size of their order. If the
System operated as stated in the current rule text, fewer contracts
would have been executed, because fewer contracts would have been
available for execution against the COLA-eligible order and other
responsive interest. It is likely that some of the interest in that
Complex Order Strategy would not have traded but for the ability for
COLA Sweeps and Complex Orders to be submitted for any size.
    The Exchange is proposing to amend the rule to reflect the current
practice and permit the full size of responding interest to trade
against non-COLA-eligible interest. This change is intended to have as
many contracts trade as possible. The Exchange does not believe that
the current size limitation in the rule is useful.\44\ The Exchange
notes that the size of a COLA Sweep or responsive Complex Order is only
relevant where the resulting allocation of a trade is conducted on a
pro-rata basis, but not respecting non-broker-dealer customer
allocations, which are based on time priority. The Exchange believes
that permitting interest in excess of the COLA-eligible volume benefits
market participants, because it helps ensure that as many contracts as
possible are executed. The Exchange does not believe that there is any
negative effect from permitting responsive interest of any size.
Although in a pro-rata allocation, a greater allocation might result,
this is not harmful, but rather enhances the liquidity in the
marketplace. It should also be noted that the Exchange considers non-
responsive interest present in the system when executing and allocating
in a COLA and such non-responsive interest is also not restricted to
the size of the COLA-eligible volume.
---------------------------------------------------------------------------

    \44\ The Exchange notes that this is similar to NYSEArca Rule
6.91(c)(7), which permits executions above such size.
---------------------------------------------------------------------------

    Fourth, Rule 1080.07(e)(viii) determines the price at which orders
are executed while Rule 1080.07(e)(vi) determines the execution
priority of such orders; the Exchange seeks to make the interaction of
these two provisions clearer by adding descriptive language to that
effect in Rule 1080.07(e)(viii). Rule 1080.07(e)(viii)(C)(1)(d)
currently provides that if multiple customer Complex Orders are
received on the opposite side of the market from the COLA-eligible
order, customer orders will be executed in the order in which they were
received. This provision operates to determine the price at which the
COLA-eligible order is executed against customer Complex Orders and
defines the allocation algorithm utilized for each type of customer. In
the context of determining the execution price of such interest, the
Exchange uses the term ``customer'' to include both non-broker-dealer
customer orders as well as non-market maker off-floor broker-dealer
orders, because in this context non-market maker off-floor broker-
dealer orders seek liquidity and are therefore more like customer
orders versus other participants, which generally provide liquidity.
    With respect to Rule 1080.07(e)(vi) regarding the allocation within
a participant category, the System executes non-broker-dealer customer
orders in the order in which they were received and non-market maker
off-floor broker-dealer orders on a pro-rata basis at each price level.
Thus, non-market maker off-floor broker-dealer orders may have received
a higher or lower allocation at a particular price than they would have
received in time priority allocation, which is required under the
current rule, depending on their particular time and size.
    The Exchange proposes to change Rule 1080.07(e)(viii)(C)(1)(d) to
reflect that off-floor broker- dealer orders at the same price are
executed on a pro-rata basis, consistent with the priority rules
applicable in other aspects of the execution of Complex Orders \45\ and
simple orders.\46\
---------------------------------------------------------------------------

    \45\ See e.g., Rule 1080.07(e)(vi)(B).
    \46\ See Rule 1014(g)(vii).
---------------------------------------------------------------------------

    Fifth, pursuant to Rule 1080.07(e)(viii)(C)(2)(d), if multiple non-
customer \47\ Complex Orders are received on the opposite side of the
market from the COLA-eligible order, such orders will be executed in
the order in which they were received. Instead, the System executes
non-customer orders on a pro-rata basis among Phlx market maker
interest and then, again on a pro-rata basis, among remaining Phlx XL
participants at each price level, as described in Rule
1080.07(e)(vi)(B). Non-customer orders may have received a higher or
lower allocation at a particular price than they would have received in
time priority allocation, depending on their particular time and size.
---------------------------------------------------------------------------

    \47\ In the context of executing these orders, the Exchange uses
the term ``non-customer'' to include all interest other than non-
broker-dealer customer interest and non-market-maker off-floor
broker-dealer interest.
---------------------------------------------------------------------------

    The Exchange proposes to amend the rule to reflect that non-
customer orders are executed on a pro-rata basis, consistent with the
priority rules applicable in other aspects of the execution of Complex
Orders and simple orders.\48\
---------------------------------------------------------------------------

    \48\ See supra note 29.
---------------------------------------------------------------------------

    Sixth, the System recently operated such that when a Complex Order
was received during the final 3 seconds of the trading session, it was
placed onto the CBOOK.\49\ Pursuant to Rule 1080.07(f)(i)(F), a Complex
Order an order should go on the CBOOK when is received during the final
10 seconds of the trading session, rather than 3 seconds. Accordingly,
more Complex Orders may have started a COLA than the rule provides for
and were perhaps executed rather than resting on the CBOOK, which the
Exchange believes may have been considered a benefit for those orders.
---------------------------------------------------------------------------

    \49\ In order to comply with the current rule, the System was
changed on March 7, 2014 to 10 seconds to align with the rule.
---------------------------------------------------------------------------

    At this time, the Exchange proposes to change the rule to reflect a
configurable time period (for all options) to determine how many
seconds before the end of the trading session that an order is placed
on the CBOOK. The Exchange believes that this should maximize
executions rather than applying a fixed time period of 10 seconds. The
Exchange will notify participants on its Web site in advance when the
number of seconds will change. The Exchange believes that this is a
useful change, because the Exchange believes that 10 seconds may be too
long and may prevent executions from occurring; a COLA can be triggered
and completed in less than 3 seconds so the Exchange believes a smaller
number than 10 seconds is appropriate to maximize executions.
    In addition, the Exchange is adding to this provision a reference
to any marketable portion of the Complex Order being executed, because
the System seeks to execute any portion that

can be traded before placing a Complex Order on the CBOOK.
    Seventh, after the COLA-eligible order has been executed in its
entirety, Rule 1080.07(e)(viii)(C)(3) provides that the execution price
of crossing interest is based on the price of the smaller sized
interest. Crossing interest refers to any buy or sell interest that
crosses in price such that a buyer order is at a higher price than the
best sell price, for example. If such interest crosses and does not
match in size, the execution price of the remaining interest is based
on the highest (lowest) executable offer (bid) price when the larger
sized interest is offering (bidding), provided, however, that if there
is more than one price at which the interest may execute, the execution
price when the larger sized interest is offering (bidding) is the
midpoint of the highest (lowest) executable offer (bid) price and the
next available executable offer (bid) price rounded, if necessary, down
(up) to the closest minimum trading increment. If the crossing interest
is equal in size, the execution price is the midpoint of lowest
executable bid price and the highest executable offer price, rounded,
if necessary, up to the closest minimum trading increment.
    In determining the execution price and which interest will trade,
the System affords priority to non-broker-dealer customers. Executable
bids/offers include any interest which could be executed without
trading through residual interest or the cPBBO, or without trading at
the cPBBO where there is non-broker-dealer customer interest. This is
consistent with Rule 1080.07(c)(iii).
    While participants are ``blind'' to the determination of the
execution price because they do not know the size of all eligible
interest, the participants that were part of the smaller sized interest
would likely have received a better execution price than the rule
states.
    The Exchange proposes to amend Rule 1080.07(e)(viii)(C)(3) to
reflect the use of larger sized interest, because it is indicative of
the price of remaining unexecuted interest. The Exchange believes that
this correction and level of detail should help participants understand
how their execution prices are determined, and this method is fair and
orderly, based on both size and midpoint, which reflect the totality of
the remaining interest. This is the same process used in the COOP as
proposed in Rule 1080.07(d)(ii)(C)(2).
    This provision is also proposed to state that if there is any
remaining interest, which means any interest present in the System in
that Complex Order Strategy at that time provided that it is not an
all-or-none order and there is no component that consists of the
underlying security,\50\ such interest may ``leg'' whereby each options
component may trade at the PBBO with existing quotes and/or limit
orders on the limit order book for the individual components of the
Complex Order; provided that remaining interest may execute against any
eligible Complex Orders received before legging occurs. This is
intended to maximize the number of contracts that execute.
---------------------------------------------------------------------------

    \50\ Complex Orders that are not executable, including those
that could not leg because there is a component that consists of the
underlying security, will be placed on the CBOOK. See proposed Rule
1080.07(d)(ii)(C).
---------------------------------------------------------------------------

    Eighth, Rule 1080.07(b)(i) governs the types of Complex Orders that
different participants may submit to the Exchange. The rule does not
currently specify a category of participant known as Firms. Because the
current rule does not define a Firm, under the current language Firms
are broker-dealers that fit the definition of non-market maker off-
floor broker-dealer.
    At this time, the Exchange is proposing to adopt a definition of
Firm in Rule 1080.07(a)(x), based on the current definition in the Phlx
fee schedule.\51\ Specifically, the Exchange is proposing to define the
term ``Firm'' to mean a broker-dealer trading for its own (proprietary)
account that is: (i) A member of The Options Clearing Corporation
(``OCC''); or (ii) maintains a Joint Back Office (``JBO'') \52\
arrangement with an OCC member. Firms are distinct from non-market
maker off-floor broker-dealers because of their OCC membership, which
implies that Firms, and thus the JBO participants with whom they have
established JBO arrangements are large, well-capitalized entities.
---------------------------------------------------------------------------

    \51\ See Securities Exchange Act Release No. 62140 (May 20,
2010), 75 FR 29788 (May 27, 2010) (SR-Phlx-2010-69).
    \52\ A member organization can establish and maintain a JBO
arrangement with a clearing broker-dealer subject to the
requirements of Regulation T Section 220.7 of the Federal Reserve
System if each JBO participant is registered as a broker-dealer,
maintains a minimum account equity requirement of $1,000,000, and
comply with certain ownership standards. See Rule 703(a)(vi).
---------------------------------------------------------------------------

    The pricing schedule currently provides that Firm means a non-
customer broker-dealer for which orders are identified by a member or
member organization as clearing in the firm range at OCC.\53\ The term
``clearing in the firm range at OCC'' refers to what type of an account
is held at OCC and is commonly used by exchanges.\54\ The participants
that clear in the firm range at OCC are Firms, including both broker-
dealers trading for their own (proprietary) account who are OCC members
as well as JBO participants. In contrast, broker-dealers trading for
their own (proprietary) account who are not OCC members (and do not
have a JBO arrangement) must have their trades cleared via an OCC
member and do not clear in the firm range.\55\ Accordingly, the
proposed definition of Firm comports with the definition used in the
pricing schedule, with respect to which dozens of proposed rule changes
have taken effect based on such pricing differentiation being
consistent with the Act, including not being unfairly
discriminatory.\56\
---------------------------------------------------------------------------

    \53\ See preface to Phlx Pricing Schedule.
    \54\ See e.g., http://www.cboe.com/publish/RegCir/RG13-038.pdf.
    \55\ These broker-dealer orders are ultimately cleared as
customer orders at OCC.
    \56\ See e.g., Securities Exchange Act Release Nos. 68880
(February 8, 2013), 78 FR 10664 (February 14, 2013) (SR-Phlx-2013-
10); and 67189 (June 12, 2012), 77 FR 36310 (June 18, 2012) (SR-
Phlx-2012-77).
---------------------------------------------------------------------------

    In addition, the Exchange proposes to specify the two ways in which
Firm orders are handled like Phlx XL market maker orders rather than
non-market maker off-floor broker-dealer orders. Specifically, the
Exchange proposes to amend Rule 1080.07(e)(i)(B)(1) to provide that
Firm orders, like Phlx market maker orders, are not COLA-eligible
orders and therefore cannot start a COLA; \57\ non-market-maker off-
floor broker-dealer orders can start a COLA. In addition, for purposes
of Rule 1080.07(e)(viii)(C)(2), Firms orders are proposed to be treated
as ``non-customer'' orders. Specifically, when the System determines
how Complex Orders on the opposite side of the market from a COLA-
eligible order are executed, the System executes Firm orders on a pro-
rata basis along with non-Phlx market maker orders. Non-market-maker
off-floor broker-dealer orders are executed along with non-broker-
dealer customer orders. In these two ways, Firm orders are proposed to
be treated the same way as non-Phlx market makers, rather than the same
way as off-floor broker-dealers, because the Exchange believes that the
trading style and needs of Firms are more like market makers. Firms are
large, well-capitalized broker-dealers trading for their own account,
generally submitting large orders, including orders that facilitate
their clients' orders or offset often large positions taken to

accommodate their customers; \58\ in order to do so, Firms must have
the financial wherewithal that this role necessitates, which by OCC
rule applicable to OCC clearing members, generally requires a certain
amount of net capital, risk management procedures addressing certain
risks and margin requirements, among other things.\59\ Thus, in
general, Firms are commonly viewed as providers of liquidity, much like
market makers.
---------------------------------------------------------------------------

    \57\ See Rule 1080.07(e)(i)(B)(1) which defines a COLA-eligible
order. The Exchange is deleting from this provision the requirement
that such order improve the cPBBO, because that requirement is
already stated in Rule 1080.07(e)(i)(A).
    \58\ Of course, the clients/customers of a Firm could be other
broker-dealers.
    \59\ See OCC Rules 301, 311 and 601.
---------------------------------------------------------------------------

    Ninth, the Exchange proposes to accept all-or-none orders \60\ and
specify how they are handled. The handling of all-or-none orders on the
opening is explained above.\61\ Specifically, Rule 1080.07(e)(vi)(A)(1)
will provide that all-or-none Complex Orders will not leg into the
prices of the individual components of such Complex Order. In addition,
Rule 1080.07(f)(iii)(A) will similarly provide that all-or-none Complex
Orders on the CBOOK will not leg.
---------------------------------------------------------------------------

    \60\ The Exchange stopped accepting all-or-none Complex Orders
on March 17, 2014 in order to align the System with the rule. The
Exchange has incorporated a definition of all-or-none orders in
Securities Exchange Act Release No. 72351 (June 9, 2014), 79 FR
33977 (June 13, 2014) (SR-Phlx-2014-39).
    \61\ See proposed Rule 1080.07(d)(ii)(C).
---------------------------------------------------------------------------

    Tenth, the Exchange proposes to amend 1080.07(b)(iii) to specify in
more detail that only IOC Complex Orders can be accepted by Floor
Brokers from SQTs, RSQTs, non-SQT ROTs, specialists, non-Phlx market
makers on another exchange and Firms. Currently, this provision refers
to broker-dealers or affiliates of broker-dealers; these terms are not
used elsewhere in the rule and is thus confusing.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the provisions of Section 6 of the Act,\62\ in general, and with
Section 6(b)(5) of the Act,\63\ in particular, which requires, among
other things, that the rules of an exchange be designed to promote just
and equitable principles of trade as well as protect investors and the
public interest. Specifically, the Exchange is proposing various
changes that should promote just and equitable principles of trade,
because Complex Orders will be handled in a fair and orderly manner by
the System, as described above. The Exchange believes that the proposed
changes are consistent with how participants could reasonably expect
that their complex interest should be treated. The various corrections
are, together, intended to improve the rule overall. The Exchange
believes that this should promote just and equitable principles of
trade as well as protect investors and the public interest by making
more clear how specifically Complex Orders are handled on the Exchange.
---------------------------------------------------------------------------

    \62\ 15 U.S.C. 78f.
    \63\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    More specifically, the opening changes are intended to promote just
and equitable principles of trade by seeking to execute as much
interest as possible at the best possible price(s). The opening process
maximizes price discovery and liquidity while employing price priority,
which the Exchange believes is a fairer process on the opening when
dealing with potentially different sources of interest, versus a single
Complex Order triggering a COLA during the day's trading. Although the
COOP operates differently than the COLA, the Exchange notes that the
COOP operates like a traditional opening process, seeking to execute as
much interest as possible, which is consistent with just and equitable
principles of trade.
    The opening delay timer promotes just and equitable principles of
trade by allowing options prices to stabilize after the options
opening, before permitting Complex Orders to become available for
trading. If a particular Complex Order Strategy is already open, the
COOP does not occur, which is consistent with just and equitable
principles of trade, because there is no need for an opening process.
The Complex Order Opening Auction Notification is intended to attract
interest to the opening process and encourage the opening of a Complex
Order Strategy, like the COLA message is intended to attract interest
to the COLA. Accordingly, the Complex Order Opening Auction
Notification, which contains the opening price, imbalance, if any, and
volume, promotes just and equitable principles of trade.
    The change to Rule 1080.07(d)(ii)(B)(3) enumerating that COOP
responses are not visible promotes just and equitable principles of
trade by making this clear to participants and because the temporary,
quick nature of the COOP would not render this information useful. The
Complex Order Opening Auction Notification is sufficient notification
of the forthcoming opening of a particular Complex Order Strategy.
    The Exchange noted above that Complex Orders marked IOC do not
participate in an auction that such order may trigger if that order
would be the first order in that Complex Order Strategy, thereby
opening that Strategy for the day. The Exchange does not believe that
this raises regulatory issues, such as the potential for manipulation
or abuse relating to the opening auction. The Exchange similarly treats
non-Complex Orders marked IOC, in that such orders, if received prior
to the opening in an option, are cancelled upon receipt. Thus, the fact
that Complex Orders marked IOC do not participate in the opening
auction does not raise new concerns for manipulation; today, if a
participant enters a DAY or GTC order and then immediately cancels it,
an auction will ensue without that order. Accordingly, the Exchange
believes that its proposed handling of IOC orders should promote just
and equitable principles of trade. Similarly, the proposal addresses
how DNA orders are handled, which also promotes just and equitable
principles of trade by providing an order type that involves immediate
handling.
    The Exchange believes that COOP Sweeps, as described above, promote
just and equitable principles of trade by providing an opportunity for
a single sided quote to be entered by Phlx XL market makers responding
to a COOP, much like opening sweeps in Rule 1017 and regular sweeps in
Rule 1080. The Exchange does not believe it is unfairly discriminatory
for COOP Sweeps to be available only to Phlx XL market makers, because
the ability to enter two-sided quotes is also available only to Phlx XL
market makers, who use a particular protocol to submit quotes and
sweeps to the Exchange. Other Phlx XL participants can submit orders
over the protocol specific to orders, specifically IOC orders, which
behave in the same manner as a sweep. Accordingly, such other
participants are not disadvantaged by the inability to submit sweeps,
much like they are not disadvantaged by the inability to submit quotes
or sweeps respecting non-Complex Orders.
    With respect to the provision in Rule 1080.07(d)(ii)(C)(3) that
provides that a Complex Order Strategy will be open after a COOP even
if no executions occur, the Exchange believes that this proposed
language should promote just and equitable principles of trade by
opening a Complex Order Strategy based on the fact that interest was
received, regardless of whether the responsive interest resulted in an
execution. In addition, it promotes just and equitable principles of
trade for the rule to reflect this.
    With respect to any priority provisions addressed herein, the
proposed treatment is similar to the Exchange's priority rule
respecting orders other than Complex Orders, as well as the comparable
rules of other

options exchanges.\64\ This includes allocating to the specialist based
on all of his interest at a particular price pursuant to proposed Rule
1080.07(e)(vi)(C), off-floor broker-dealer customer orders on a pro-
rata basis pursuant to proposed Rule 1080.07(e)(viii)(C)(1)(d), and to
Phlx XL market makers and other non-customers each on a pro-rata basis
pursuant to proposed Rule 1080.07(e)(viii)(C)(2)(d). The deletion of
the 40% allocation promotes just and equitable principles of trade both
by correcting the rule text as well as by rendering meaning to the
reference to Rule 1014(g)(ii), which is otherwise pointless.
---------------------------------------------------------------------------

    \64\ See Phlx Rule 1014(g)(vii)(B)(1)(b). See also CBOE Rule
6.53C(d)(v).
---------------------------------------------------------------------------

    The deletion of aggregating size only at the cPBBO in Rule
1080.07(e)(vi)(C)(1) for purposes of determining the pro rata
allocation promotes just and equitable principles of trade by taking
into account all expressed interest (the specialist's COLA Sweep, SQT
and RSQT COLA Sweeps and non-SQT ROT Complex Orders on the CBOOK) at
each price instead of only at one price, the cPBBO. This should
maximize the number of contracts executed, to the benefit of those
participating in that Complex Order Strategy.
    The change to Rule 1080.07(e)(vi)(B) permitting responses for a
size greater than the size of the COLA-eligible orders is consistent
with just and equitable principles of trade, because it enables as many
contracts as possible to trade, which is also consistent with
protecting investors and the public interest. Restricting responses to
the size of the COLA-eligible order serves no regulatory purpose and,
instead, merely limits the number of contracts that can trade.
Restricting responses to the size of the COLA-eligible order could also
provide interest that has been submitted coincidentally, without
intentionally responding to an auction, to have an unfair advantage
since this interest would not be restricted to the size of the COLA-
eligible order.
    The Exchange believes a configurable end of day timer as proposed
in Rule 1080.07(f)(i)(F) is consistent with just and equitable
principles of trade, because it can be tailored to maximize the number
of executions but is still limited to 600 seconds, as originally
approved.
    The Exchange also believes that the proposed execution process in
proposed Rule 1080.07(d)(ii)(C)(2) and (e)(viii)(C)(3) for crossing
interest is consistent with just and equitable principles of trade,
because it is based on the price of the larger sized interest, which
affects more options contracts and is likely to result in more
executions than the current rule provides, because the current rule is
based on the mid-point, regardless of size.
    The reference to legging remaining interest in these same
subparagraphs promotes just and equitable principles of trade by
providing an opportunity for additional Complex Orders to trade. The
additional executions would be expected by users who expressed an
interest to trade by submitting their interest; their expression of
interest is not limited to the COLA-eligible order but rather to the
Complex Order Strategy as a whole.
    In addition, this proposal is not unfairly discriminatory,
including to the new category of Firm orders, because it proposes to
deal with Complex Orders and responsive interest in a reasonable way.
As explained above, it is not uncommon to have certain order types and
time-in-force conditions available only to certain participant types,
both on the Exchange \65\ as well as other exchanges.\66\ Indeed, the
Exchange's pricing schedule has long distinguished Firms from other
broker-dealers.\67\ The Exchange believes that certain order types and
time-in-force conditions, if made available, would likely not be used
by certain market participants, because of the particular trading style
of those participants. For example, Phlx XL market makers are not
permitted to send in GTC orders; the Exchange does not believe that
Phlx XL market makers would be interested in submitting GTC orders, as
they generally participate in the marketplace using electronic
quotations, which are updated and replaced frequently, unlike GTC
orders.
---------------------------------------------------------------------------

    \65\ See Phlx Rule 1080(b).
    \66\ See CBOE Rule 6.53C(d)(iii).
    \67\ See supra note 53.
---------------------------------------------------------------------------

    Similarly, the Exchange believes that Firms do not expect or need
their Complex Orders to trigger a COLA nor to submit GTC orders,
because these are features commonly associated with customers rather
than liquidity providers who function to accommodate trading interest.
Both of these features involve a temporal component; both a delay and
long-lasting interest are inconsistent with the sort of accommodation
that Firms provide. Firms are interested in trading in a manner that
offers liquidity to their customers. Accordingly, the Exchange believes
that by tailoring its offerings to the needs and trading style of
Firms, Firms are more likely to send orders to the Exchange, which
should increase order interaction with other market participants,
consistent with promoting just and equitable principles of trade.
    The Exchange believes that its proposal to accept all-or-none
Complex Orders should promote just and equitable principles of trade by
offering this order type, commonly available for non-Complex Orders as
well as complex orders on other options exchanges, to market
participants, who may want a certain minimum size. This contingency is
particularly appropriate respecting Complex Orders, because of the
complexity of the strategies employed by users; the size of the order
may be relevant to such strategy. The Exchange believes that its
proposal to not leg all-or-none Complex Orders promotes just and
equitable principles of trade, because the all-or-none contingency
complicates the execution of such orders expeditiously against the
individual components of such orders; the Exchange does not believe
that users would expect such orders to leg, as all-or-none orders are
often treated differently than other orders because of the nature of
that contingency.\68\
---------------------------------------------------------------------------

    \68\ See e.g., Options Floor Advice A-9.
---------------------------------------------------------------------------

    The Exchange believes that its proposal to amend 1080.07(b)(iii) to
specify in more detail that Floor Brokers can only accept IOC Complex
Orders from SQTs, RSQTs, non-SQT ROTs, specialists, non-Phlx market
makers on another exchange and Firms is merely replacing vague terms
(broker-dealers or affiliates of broker-dealers) to more precise ones
that are linked to definitions within the rule. Using defined terms
should promote just and equitable principles of trade.
    The Exchange believes that deleting reference in Rule
1080.07(d)(ii)(A)(2) to disengaging the automated execution system and
the Phlx XL Risk Monitor Mechanism clarifies that the COOP Timer
nevertheless occurs in these situations. The COOP Timer facilitates
price discovery and opening interest in a Complex Order Strategy, which
should, in turn, promote just and equitable principles of trade.
    The Exchange believes that specifying in more detail that Complex
Orders received prior to the COOP Timer and Complex Orders received
during the COOP Timer (other than COOP Sweeps and Complex Order
Responses marked as a response) are visible to Phlx XL participants
upon receipt should promote just and equitable principles of trade by
further attracting additional interest in a particular Complex Order
Strategy.

(B) Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act, as amended.
Specifically, the proposal does not impose an intra-market burden on
competition, because these changes make the rule clearer and more
complete for all participants. Nor will the proposal impose a burden on
competition among the options exchanges, because of the vigorous
competition for order flow among the options exchanges. To the extent
that market participants disagree with the particular approach taken by
the Exchange herein, market participants can easily and readily direct
complex order flow to competing venues.

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

    No written comments were either solicited or received.

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

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission will: (a) By order approve
or disapprove such proposed rule change, or (b) institute proceedings
to determine whether the proposed rule change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-Phlx-2015-49 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-Phlx-2015-49. 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 the filing will also be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-Phlx-2015-49 and should be
submitted on or before July 14, 2015.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\69\
---------------------------------------------------------------------------

    \69\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Brent J. Fields,
Secretary.
[FR Doc. 2015-15339 Filed 6-22-15; 8:45 am]
BILLING CODE 8011-01-P