[Federal Register Volume 86, Number 244 (Thursday, December 23, 2021)]
[Notices]
[Pages 73033-73038]
[FR Doc No: 2021-27808]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93823; File No. SR-Phlx-2021-74]

Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend the
Exchange's Pricing Schedule at Equity 7, Section 3

December 17, 2021.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 9, 2021, Nasdaq PHLX LLC (``Phlx'' or ``Exchange'') filed
with the Securities and Exchange Commission (``SEC'' or ``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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend Equity 7, Section 3 to restate the
Exchange's schedule of transaction credits and charges, to eliminate
the Qualified Market Maker Program (the ``QMM Program''), and to
eliminate the Enhanced Market Quality Program (the ``EMQ Program''), as
described further below. The text of the proposed rule change is
available on the Exchange's website at https://listingcenter.nasdaq
.com/rulebook/phlx/rules, at the principal office of the Exchange, and
at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The purpose of the proposed rule change is to amend Equity 7,
Section 3 to restate the Exchange's schedule of credits and charges, to
eliminate the QMM Program, which the Exchange established in 2019 and
amended in 2021,\3\ and to eliminate the EMQ Program, which the
Exchange both established and modified in 2021.\4\ The Exchange also
proposes to eliminate obsolete text from Equity 7, Section 3(a).
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    \3\ See Securities Exchange Act Release No. 34-91159 (February
18, 2021), 86 FR 11343 (February 24, 2021) (SR-Phlx-2021-09);
Securities Exchange Act Release No. 34-85862 (May 15, 2019), 84 FR
23112 (May 21, 2019) (SR-Phlx-2019-19).
    \4\ See Securities Exchange Act Release No. 34-93406 (October
22, 2021), 86 FR 59767 (October 28, 2021) (SR-Phlx-2021-64);
Securities Exchange Act Release No. 34-92754 (August 25, 2021), 86
FR 48789 (August 31, 2021) (SR-Phlx-2021-47).
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Restatement of Schedule of Credits and Charges
    Pursuant to Equity 7, Section 3, and under the heading ``Order
Execution and Routing,'' the Exchange presently provides a series of
credits to member organizations that enter displayed and non-displayed
orders/quotes that execute on the Exchange and impose charges upon
member organizations that remove liquidity from the Exchange. To the
extent that member organizations satisfy additional volume-based
criteria, they may qualify for credits that are higher than or charges
that are lower than standard transaction rates. As part of its periodic
efforts to invigorate and grow the Exchange by increasing the
attractiveness and effectiveness of the incentives it offers to its
member organizations, the Exchange proposes to substantially restate
its schedule of credits and charges. These changes will provide
increased overall rebate opportunities available to members that

add liquidity to the Exchange, while imposing a single flat fee for
member organizations that remove liquidity from the Exchange.
    Presently, member organizations that enter orders that execute on
the Exchange pay the following fees: (i) $0.0024 per share executed in
securities entered by a member organization that accesses 0.055% or
more of Consolidated Volume \5\ during the month and adds 0.025% or
more of Consolidated Volume during the month; (ii) $0.0025 per share
executed in securities entered by a member organization that accesses
0.01% or more of Consolidated Volume during the month and adds 5,000
shares or more to the Exchange during the month; and (iii) $0.0030 per
share executed for all other member organizations. The Exchange
proposes to eliminate all but the last of these fee tiers, such that
going forward, the Exchange will charge all member organizations that
remove liquidity from the Exchange a flat fee of $0.0030 per share
executed. This change will allow the Exchange to reallocate its limited
resources to increase incentives for adding liquidity to the Exchange--
an activity it believes is needed to improve the quality of the
Exchange's market.
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    \5\ Pursuant to Equity 7, Section 3, the term ``Consolidated
Volume'' means the total consolidated volume reported to all
consolidated transaction reporting plans by all exchanges and trade
reporting facilities during a month in equity securities, excluding
executed orders with a size of less than one round lot. For purposes
of calculating Consolidated Volume and the extent of a member
organization's trading activity, the date of the annual
reconstitution of the Russell Investments Indexes is excluded from
both total Consolidated Volume and the member organization's trading
activity.
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    The Exchange presently offers the following credits to member
organizations that add displayed liquidity to the Exchange: (i) $0.0026
per share executed for Quotes/Orders entered by a member organization
that provides 0.10% or more of total Consolidated Volume during the
month; (ii) $0.0024 per share executed for Quotes/Orders entered by a
member organization that provides 0.07% or more of total Consolidated
Volume during the month; and (iii) $0.0020 per share executed for all
other quotes/orders. The Exchange proposes to restate this schedule, as
follows, with the overall aims of increasing incentives for member
organizations to add substantial volumes of displayed liquidity to the
Exchange and providing a new incentive for member organizations to grow
the extent of their liquidity adding activity relative to a baseline
month.
    First, the Exchange proposes modify its top $0.0026 per share
executed credit by increasing the amount of that credit to $0.0035 per
share executed. It also proposes to modify its $0.0024 per share
executed credit by: (i) Increasing the amount of the credit to $0.0034
per share executed; (ii) decreasing the liquidity add volume threshold
to qualify for the credit from 0.07% to 0.05% of Consolidated Volume;
and (iii) by adding a requirement that the member organization must
remove at least 0.02% of total Consolidated Volume during the month.\6\
Third, the Exchange proposes to establish a new growth tier that will
reward a member organization with a credit of $0.0030 per share
executed to the extent that it adds a daily average of at least 1
million shares of liquidity in all securities on the Exchange during
the month and increases its average daily volume of quotes/orders added
to the Exchange by 100% or more during the month relative to the month
of October 2021. Finally, the Exchange notes that it will not change
its existing baseline credit of $0.0020 per share executed for the
addition of displayed liquidity to the Exchange.
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    \6\ By tying receipt of this liquidity adding credit to a member
organization also achieving a baseline level of liquidity removal
activity, the Exchange intends to continue incenting member
organizations to remove liquidity even as it focuses more of its
resources on adding liquidity to the Exchange.
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    The Exchange presently offers the following credits to member
organizations that add non-displayed liquidity to the Exchange: (i) A
$0.0023 per share executed credit for all orders with midpoint pegging
that provide liquidity; (ii) a $0.0004 per share executed credit for
orders entered by a member organization that provides 0.01% or more of
total Consolidated Volume during the month through non-displayed orders
(other than midpoint orders) that provide liquidity; (iii) a $0.0007
per share executed credit for orders entered by a member organization
that provides 0.02% or more of total Consolidated Volume during the
month through non-displayed orders (other than midpoint orders) that
provide liquidity; (iv) a $0.0012 per share executed credit for orders
entered by a member organization that provides 0.05% or more of total
Consolidated Volume during the month through non-displayed orders
(other than midpoint orders) that provide liquidity; and (v) a $0.0000
per share executed credit for other non-displayed orders that provide
liquidity. The Exchange proposes to restate this schedule of credits
with the aim of increasing overall incentives to add non-displayed
liquidity, while simplifying the credit structure by collapsing the
schedule to three non-displayed tiers.
    First, the Exchange will continue to provide a $0.0023 per share
executed credit for all orders with midpoint pegging that provide
liquidity. Second, the Exchange will continue to provide a credit to a
member organization that provides 0.01% or more of total Consolidated
Volume during the month through non-displayed orders (other than
midpoint orders) that provide liquidity, but it will increase the
amount of that credit from $0.0004 to $0.0015 per share executed.
Third, the Exchange will increase from $0.0000 to $0.0005 the base
credit it provides to member organizations that add non-displayed
liquidity to the Exchange.
    The proposed restatement of the Exchange's schedule of credits will
focus the Exchange's limited resources to incenting member
organizations to add and increase the extent to which they add
liquidity to the Exchange. To the extent that this effort is
successful, the Exchange hopes that additional liquidity will improve
the quality of the market and help to grow it over time.
Elimination of the QMM Program
    As set forth in Equity 7, Section 3, the QMM Program provides
supplemental incentives to member organizations that qualify as
``Qualified Market Makers'' or ``QMMs'' \7\ by making significant
contribution to market quality by providing liquidity at the national
best bid and offer (``NBBO'') \8\ in a large number of securities for a
significant portion of the day. A QMM may be, but is not required to
be, a registered market maker in any security; thus, the QMM
designation does not by itself impose a two-sided quotation obligation
or convey any of the benefits associated with being a registered market
maker.
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    \7\ To be designated as a QMM, a member organization must quote
at the NBBO at least 15% of the time during regular market hours in
an average of at least 400 securities per day during a month.
    \8\ For purposes of the QMM Program, a member organization is
deemed to quote at the NBBO in a security if one of its MPIDs has a
displayed order at either the national best bid or the national best
offer or both the national best bid and offer.
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    The QMM program is designed to attract liquidity both from
traditional market makers and from other firms that are willing to
commit capital to support liquidity at the NBBO. In return for
providing the required contribution of market-improving liquidity, the
Exchange provides a QMM with the following non-cumulative supplemental
credits for executions of displayed orders in securities priced at $1
or more

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per share that provide liquidity on the Exchange:

    1. $0.0001 per share executed with respect to all displayed
orders of a QMM in securities priced at $1 or more per share that
provide liquidity; or
    2. $0.0002 per share executed with respect to all displayed
orders of a QMM in securities priced at $1 or more per share that
provide liquidity, provided that the QMM quotes the NBBO at least
10% of the time during Market Hours in an average of at least 650
securities per day during a month; or
    3. $0.0003 per share executed in Tape A securities and a credit
of $0.0002 per share executed in Tape B and Tape C securities with
respect to all displayed orders of a QMM in securities priced at $1
or more per share that provide liquidity, provided that the QMM
provides 0.12% or more of total Consolidated Volume during the month
and quotes the NBBO at least 10% of the time during Market Hours in
an average of at least 800 securities per day during a month.

    The QMM credits are in addition to any credit that the Exchange
provides under Equity 7, Section 3.
    Through the use of the QMM Program, the Exchange hoped to provide
improved trading conditions for all market participants through
narrower bid-ask spreads and increased depth of liquidity available at
the inside market. In addition, the QMM Program reflected an effort to
use financial incentives to encourage a wider variety of members to
make positive commitments to promote market quality.
    Unfortunately, the QMM Program did not accomplish its objectives,
as it did not meaningfully improve market quality on the Exchange.
Accordingly, and because the Exchange has limited resources to allocate
to incentive programs like this one, the Exchange proposes to eliminate
the QMM Program. Going forward, it plans to develop new incentive
programs that it hopes will be more impactful.
Elimination of the Enhanced Market Quality Program
    The EMQ Program provides supplemental incentives to member
organizations that meet certain quality standards in acting as market
makers for securities on the Exchange. It rewards member organizations
that make significant contributions to market quality by providing
liquidity at the NBBO in a large number of securities for a significant
portion of the day.\9\
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    \9\ For purposes of the Enhanced Market Quality Program, a
member organization is deemed to quote at the NBBO in a security if
it quotes a displayed order of at least 100 shares in the security
and prices the order at either the national best bid or the national
best offer or both the national best bid and offer for the security.
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    Specifically, the Exchange makes a lump sum payment at the end of
each month (a ``Fixed Payment'') to a member organization to the extent
that the member organization, through one or more of its MPIDs, quotes
at the NBBO for at least a threshold percentage of the time during
Market Hours in an average number of qualifying securities per day
during the month, as specified below (satisfying the ``NBBO
requirement'').
    On a daily basis, the Exchange determines the number of securities
in which each of a member organization's MPIDs satisfies the NBBO
requirement. The Exchange aggregates a member organization's MPIDs to
determine the number of securities for purposes of the NBBO
requirement.
    The Exchange determines the amount of the Fixed Payment that it
pays to a qualifying member organization, as follows. First, it
determines which of five Tiers a member organization meets by virtue of
the average daily number of qualifying securities for which it meets
the NBBO requirement during the month (rounded to the nearest whole
number) in Tapes A and B. Qualifying securities are limited to the top
1,500 securities in each of these Tapes, as determined by their total
value traded during the second month prior to the current month. A
member organization meets the NBBO requirement for a qualifying Tape A
security on a given day to the extent that it quotes at the NBBO for at
least 30% of the time during Market Hours on that day, and for a
qualifying Tape B security, a member organization must quote such
security at the NBBO for at least 50% of the time during Market Hours
on that day.
    For each tier of the EMQ Program, the Exchange has three groupings
or ``Classes.'' The Exchange establishes the Classes by dividing the
qualifying 1,500 securities into three equal groups for each Tape, with
the top 500 ranked securities placed in Class 3, the middle 500 ranked
securities placed in Class 2, and the lowest ranked 500 securities
placed in Class 1.
    The Exchange assigns Fixed Payment amounts to each of the three
Classes in each Tape and in each of five Tiers, with these amounts
generally increasing from Class 1 to Class 3, and from Tiers 1-5.
    In sum, a member organization that meets the NBBO requirement for a
requisite number of qualifying securities during a month to qualify for
a particular Tier is entitled to receive the Fixed Payment that
corresponds to the combination of: (i) That Tier; and (ii) the Class in
which the Exchange has placed the qualifying securities for that month.
    A member organization that qualifies for a Fixed Payment for
securities in each of Tapes A and B and in multiple Classes within each
Tape receive Fixed Payments covering qualifying securities in both
Tapes, and within each Tape, for the each of the applicable Classes,
but within each Tape and Class, a member organization may only qualify
for one Tier during a month. The Exchange makes the Fixed Payment in
addition to other rebates or fees provided under Equity 7, Sections 3
(a)-(c).
    The existing schedules of Tiers, Classes, and Fixed Payments are as
follows:

                                                Tape A Securities
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                      Average daily number of
                   securities quoted at the NBBO    Fixed payment for    Fixed payment for    Fixed payment for
      Tiers         for at least 30% of the time  securities in Tape A   securities in Tape   securities in Tape
                     during Market Hours during        in Class 1           A in Class 2         A in Class 3
                             the month
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1................  0-24.........................  $0 per qualified      $0 per qualified     $0 per qualified
                                                   security per month.   security per month.  security per
                                                                                month.
2................  25-49........................  $0 per qualified      $0 per qualified     $200 per qualified
                                                   security per month.   security per month.  security over 24
                                                                                per month.

3................  50-149.......................  $50 per qualified     $200 per qualified   $5,000 + ($450 per
                                                   security [sic] per    security over 49     qualified security
                                                   month.                per month.           over 49) per
                                                                                month.
4................  150-249......................  $5,000 + ($100 per    $20,000 + ($300 per  $50,000 + ($600 per
                                                   qualified security    qualified security   qualified security
                                                   over 149) per month.  over 149) per        over 149) per
                                                                         month.               month.
5................  250 or greater...............  $15,000 + ($150 per   $50,000 + ($350 per  $50,000 + ($600 per
                                                   qualified security    qualified security   qualified security
                                                   over 249) per month.  over 249) per        over 149) per
                                                                         month.               month.
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                                                Tape B Securities
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                      Average daily number of
                   securities quoted at the NBBO    Fixed payment for    Fixed payment for    Fixed payment for
      Tiers         for at least 50% of the time  securities in Tape B   securities in Tape   securities in Tape
                     during Market Hours during        in Class 1           B in Class 2         B in Class 3
                             the month
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1................  0-24.........................  $0 per qualified      $0 per qualified     $0 per qualified
                                                   security per month.   security per month.  security per
                                                                                month.
2................  25-49........................  $0 per qualified      $0 per qualified     $100 per qualified
                                                   security per month.   security per month.  security over 24
                                                                                per month.
3................  50-149.......................  $0 per qualified      $25 per qualified    $2,500 + ($150 per
                                                   security per month.   security over 49     qualified security
                                                                         per month.           over 49) per
                                                                                month.
4................  150-249......................  $50 per qualified     $2,500 + ($50 per    $17,500 + ($300 per
                                                   security over 149     qualified security   qualified security
                                                   per month.            over 149) per        over 149) per
                                                                         month.               month.
5................  250 or greater...............  $5,000 + ($75 per     $7,500 + ($150 per   $17,500 + ($300 per
                                                   qualified security    qualified security   qualified security
                                                   over 249) per month.  over 249) per        over 149) per
                                                                         month.               month.
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    A member organization may, but is not required to be, a registered
market maker in any security to qualify for the EMQ Program; thus, the
EMQ Program does not by itself impose a two-sided quotation obligation
or convey any of the benefits associated with being a registered market
maker. Accordingly, the EMQ Program is designed to attract liquidity
both from traditional market makers and from other firms that are
willing to commit capital to support liquidity at the NBBO.
    In establishing the EMQ Program, the Exchange hoped to provide
improved trading conditions for all market participants through
narrower bid-ask spreads and increased depth of liquidity available at
the inside market. In addition, the EMQ Program reflected an effort by
the Exchange to use its financial incentives to encourage a wider
variety of member organizations other than market makers to make
positive commitments to promote market quality.
    Unfortunately, the Exchange's hopes for the EMQ Program have not
been realized, notwithstanding refinements made to the EMQ Program
earlier this year in an attempt to enhance its effectiveness. Indeed,
while the EMQ Program has succeeded in incenting market participants to
increase their quoting at the NBBO in qualifying securities, the number
of EMQ Program participants has been small, as has been the
corresponding impact on the market quality. Because the EMQ Program has
not been effective in achieving its intended purposes, and because the
Exchange has limited resources to allocate to incentive programs like
this one, the Exchange proposes to eliminate the Enhanced Market
Quality Program. Going forward, it plans to develop new incentive
programs that it hopes will be more impactful.
Deletion of Obsolete Text
    Finally, the Exchange proposes to eliminate text from this Rule
that has become obsolete as it applied solely to Consolidated Volume
calculations during the month of October 2020. The text that the
Exchange proposes to delete is as follows:

    (For purposes of determining which of the execution charges and
credits listed below a member organization qualifies for during the
month of October 2020, the Exchange will calculate the member
organization's total Consolidated Volume on the Exchange for the
full month of October as well as for the month of October excluding
the week of October 26-30, 2020. The Exchange will then assess which
total Consolidated Volume calculations would qualify the member
organization for the most advantageous credits and charges for the
month of October and then it will apply those credits and charges to
the member organization.)
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\10\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,\11\ in particular, in that it
provides for the equitable allocation of reasonable dues, fees and
other charges among member organizations and issuers and other persons
using any facility, and is not designed to permit

unfair discrimination between customers, issuers, brokers, or dealers.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(4) and (5).
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    The Commission and the courts have repeatedly expressed their
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. In Regulation
NMS, while adopting a series of steps to improve the current market
model, the Commission highlighted the importance of market forces in
determining prices and SRO revenues and, also, recognized that current
regulation of the market system ``has been remarkably successful in
promoting market competition in its broader forms that are most
important to investors and listed companies.'' \12\
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    \12\ Securities Exchange Act Release No. 51808 (June 9, 2005),
70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
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    Likewise, in NetCoalition v. Securities and Exchange Commission
\13\ (``NetCoalition'') the D.C. Circuit stated as follows: ``[n]o one
disputes that competition for order flow is `fierce.' . . . As the SEC
explained, `[i]n the U.S. national market system, buyers and sellers of
securities, and the broker-dealers that act as their order-routing
agents, have a wide range of choices of where to route orders for
execution'; [and] `no exchange can afford to take its market share
percentages for granted' because `no exchange possesses a monopoly,
regulatory or otherwise, in the execution of order flow from broker
dealers'. . . .'' \14\
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    \13\ NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010).
    \14\ Id. at 539 (quoting Securities Exchange Act Release No.
59039 (December 2, 2008), 73 FR 74770, 74782-83 (December 9, 2008)
(SR-NYSEArca-2006-21)).
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    The Exchange believes that the proposed elimination of the QMM and
EMQ Programs is reasonable and is an equitable allocation of Exchange
credits because neither program has proven to be effective in meeting
its objectives, which include increasing the extent to which member
organizations quote securities on the Exchange at the NBBO and
improving overall market quality. Insofar as the Exchange has limited
resources to devote to its incentive programs, the Exchange believes
that it is reasonable and equitable for it to eliminate these two
Programs and to reallocate its resources for other, more productive
purposes. For similar reasons, the proposal is not unfairly
discriminatory. The Exchange does not believe that the benefits enjoyed
by the member organizations that participate in the QMM and EMQ Program
are sufficient to justify maintaining them, as the resources the
Exchange allocates to it could be put to broader and more productive
use.
    The Exchange also believes that its proposal is reasonable,
equitable, and not unfairly discriminatory to restate its schedule of
transaction credits and charges. As discussed above, the Exchange
assesses a particular need to increase the extent to which its member
organizations add liquidity to the Exchange as a means of improving
market quality. The proposals serve that purpose by directly increasing
credits for adding displayed and non-displayed liquidity, and by
reallocating some resources that it currently devotes to providing
discounted fees to member organizations which remove liquidity from the
Exchange. Although the proposals will benefit net adders of liquidity
at the expense of net removers of liquidity, the Exchange believes that
this is equitable and not unfairly discriminatory because all market
participants stand to benefit to the extent that the proposals are
successful in increasing liquidity on the Exchange and improving market
quality. The Exchange also believes that it is reasonable, equitable,
and not unfairly discriminatory to simplify its schedule of credits and
charges insofar as the Exchange believes that a simpler credit/fee
structure may be more comprehensible and administrable and thus, more
appealing to, member organizations.
    Finally, the Exchange believes that it is reasonable, equitable,
and not unfairly discriminatory to delete text from the Rule that has
become obsolete insofar as it applied only to calculations of
Consolidated Volume for the month of October 2020. Deletion of obsolete
rule text ensures that the Rulebook remains current and free from
extraneous and potentially confusing text.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. In terms of inter-market
competition, the Exchange notes that it operates in a highly
competitive market in which market participants can readily favor
competing venues if they deem fee levels at a particular venue to be
excessive, or rebate opportunities available at other venues to be more
favorable. In such an environment, the Exchange must continually adjust
its fees to remain competitive with other exchanges and with
alternative trading systems that have been exempted from compliance
with the statutory standards applicable to exchanges. Because
competitors are free to modify their own credits and fees in response,
and because market participants may readily adjust their order routing
practices, the Exchange believes that the degree to which fee changes
in this market may impose any burden on competition is extremely
limited.
    In this instance, the proposals do not impose a burden on
competition because the Exchange's execution services are completely
voluntary and subject to extensive competition both from other
exchanges and from off-exchange venues. Thus, the proposed restatement
of the Exchange's schedule of credits and charges will not unduly
burden competition, even as it will increase overall incentives to net
adders of liquidity to the Exchange and reduce overall incentives to
net removers of liquidity from the Exchange. The Exchange believes that
its need to refocus its limited resources on increasing liquidity on
the Exchange as a means of improving its overall market quality
justifies the costs of this proposal to member organizations that are
net liquidity removers.
    Additionally, given that neither the QMM nor the EMQ Program has
been utilized as extensively as the Exchange expected, the proposed
elimination of those two Programs will not impact more than a handful
of its member organizations. To the extent that elimination of the EMQ
and QMM Programs do impact these member organizations, the Exchange
notes that it continues to provide other financial incentives for
member organizations to participate on the Exchange.
    The Exchange does not believe that any competitive impact will
ensue from its proposal to eliminate obsolete rule text relating to the
calculation of Consolidated Volume in October 2020. Given that the text
no longer applies, its deletion will have no effect on member
organizations or the Exchange whatsoever.
    In sum, the proposals are designed to render the Exchange more
efficient in the allocation of its limited resources and more effective
in improving the quality of the Exchange's market; however, if the
changes proposed herein are unattractive to market participants, it is
likely that the Exchange will lose market share as a result.
Accordingly, the Exchange does not believe that the proposed changes
will impair the ability of member organizations or competing order
execution venues to maintain their competitive standing in the
financial markets.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\15\
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    \15\ 15 U.S.C. 78s(b)(3)(A)(ii).
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    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-Phlx-2021-74 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-Phlx-2021-74. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-Phlx-2021-74 and should be submitted on
or before January 13, 2022.
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    \16\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-27808 Filed 12-22-21; 8:45 am]
BILLING CODE 8011-01-P