[Federal Register Volume 80, Number 213 (Wednesday, November 4, 2015)]
[Notices]
[Pages 68347-68354]
[FR Doc No: 2015-28024]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76301; File No. SR-BX-2015-032]

Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing of Amendment No. 2 and Order Granting Accelerated Approval of a
Proposed Rule Change, as Modified by Amendment Nos. 1 and 2, To Adopt a
New Price Improvement Auction, BX PRISM

October 29, 2015.

I. Introduction

    On August 19, 2015, NASDAQ OMX BX, Inc. (``BX'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission''),
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to
establish an options price improvement mechanism (``PRISM''). On
September 2, 2015, BX filed Amendment No. 1 to the proposal. The
proposed rule change, as modified by Amendment No. 1, was published for
comment in the Federal Register on September 10, 2015.\3\ The
Commission received no substantive comments regarding the proposal.\4\
On October 22, 2015, BX granted an extension of time for Commission
action until October 30, 2015. On October 23, 2015, BX filed Amendment
No. 2 to the proposal.\5\ The Commission is publishing this notice to
solicit comment on Amendment No. 2 from interested persons and is
approving the proposed rule change, as modified by Amendment Nos. 1 and
2, on an accelerated basis, with certain provisions subject to a pilot
period scheduled to expire on July 18, 2016.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 75827 (September 3,
2015), 80 FR 54601 (``Notice'').
    \4\ See infra note 5 (noting that when BX submitted Amendment
No. 2, it also submitted the document as a comment letter to the
file to promote the public dissemination of its Amendment).
    \5\ In Amendment No. 2, BX makes certain technical and
clarifying changes to the proposal, which BX believes does not
result in any material differences over its original filing as
modified by Amendment No. 1. Specifically, BX proposes to: (i)
Remove the term ``displayed''; (ii) describe ``rejected'' orders
more accurately as ``immediately cancelled'' in certain
circumstances; (iii) provide more specificity as to the amounts of
allocations for which an Initiating Participant is entitled to be
allocated; (iv) remove an incorrect reference to ``orders'' and
define interest more specifically; (v) add more specificity related
to Customer-to-Customer orders; (vi) correct a citation error; and
(vii) correct typographical errors. Amendment 2 amends and replaces
the original filing, as modified by Amendment 1, in its entirety. To
promote transparency of its proposed amendment, when BX filed
Amendment No. 2 with the Commission, it also submitted Amendment No.
2 as a comment letter to the file, which the Commission posted on
its Web site and placed in the public comment file for SR-BX-2015-
032. The Exchange also posted a copy of its Amendment No. 2 on its
Web site when it filed the amendment with the Commission.
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II. Description of the Proposal

    BX proposes to establish a price-improvement mechanism, ``PRISM,''
on the Exchange's options platform, in which a BX Participant (an
``Initiating Participant'') may electronically submit for execution a
two-sided paired order, where one side is an order it represents as
agent on behalf of a Public Customer,\6\ Professional customer, broker-
dealer, or any other entity (``PRISM Order'') and the other side is
principal interest or any other order it represents as agent (an
``Initiating Order'') provided that the member first exposes the PRISM
Order in the PRISM Auction (``Auction'') pursuant to the proposed Rule.
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    \6\ For purposes of this Rule, a Public Customer order does not
include a Professional order, and therefore a Professional would not
be entitled to Public Customer priority as described herein. A
Public Customer means a person that is not a broker or dealer in
securities. See BX Chapter I, Section 1(a)(50). A Public Customer
order does not include a Professional order for purposes of BX
Chapter VI, Section 10(a)(C)(1)(a), which governs allocation
priority. A ``Professional'' means any person or entity that (i) is
not a broker or dealer in securities, and (ii) places more than 390
orders in listed options per day on average during a calendar month
for its own beneficial account(s). A Participant or a Public
Customer may, without limitation, be a Professional. All
Professional orders shall be appropriately marked by Participants.
See BX Chapter I, Section 1(a)(49).

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A. Auction Eligibility Requirements

    All options traded on the Exchange are eligible for PRISM.\7\ To
initiate a PRISM Auction, an Initiating Participant first must ``stop''
the PRISM Order at a price that is equal to or better than the NBBO. In
addition, the proposed rules governing the eligible stop price
recognize a distinction between PRISM Orders for Public Customers and
PRISM Orders for non-Public Customers. Specifically, a PRISM Order that
is a Public Customer Order must be stopped at an improved price over
any resting a limit orders on the book on the same side as the PRISM
Order. A PRISM Order that is for a non-Customer (account of a broker-
dealer or any other person or entity that is not a Public Customer) is
always required to improve the same side BX BBO as the PRISM Order,
even if there is no resting limit order on the book. PRISM Orders that
do not comply with the aforementioned auction eligibility requirements
will be immediately cancelled. In addition, PRISM Orders submitted at
or before the opening of trading are not eligible to initiate an
Auction and will be rejected. PRISM Orders submitted during the final
two seconds of the trading session are not eligible to initiate an
Auction and will be immediately cancelled. Finally, an Initiating Order
may not be a solicited order for the account of any BX Options Market
Maker assigned in the affected series.\8\
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    \7\ See proposed BX Chapter VI, Section 9(i).
    \8\ See proposed BX Chapter VI, Section 9(i)(C) through (F).
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B. Auction Process

    To initiate the Auction, the Initiating Participant must mark the
PRISM Order for Auction processing, and specify either: (a) A single
price at which it seeks to execute the PRISM Order (a ``stop price'');
(b) that it is willing to automatically match as principal or as agent
on behalf of an Initiating Order the price and size of all PRISM
Auction Notifications (``PAN'') responses, and trading interest
(``auto-match'') in which case the PRISM Order will be stopped at the
NBBO on the Initiating Order side; \9\ or (c) that it is willing to
either: (i) Stop the entire order at a single stop price and auto-match
PAN responses and trading interest at a price or prices that improve
the stop price up to a maximum specified price (a ``No Worse Than'' or
``NWT'' price); (ii) stop the entire order at a single stop price and
auto-match all PAN responses and trading interest at or better than the
stop price; or (iii) stop the entire order at the NBBO on the
Initiating Order side, and auto-match PAN responses and trading
interest at a price or prices that improve the stop price up to the NWT
price. In all cases, if the BX BBO on the same side of the market as
the PRISM Order represents a limit order on the book, the stop price
must be at least one minimum trading increment (specified in Chapter
VI, Section 5) better than the booked limit order's limit price.
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    \9\ This is accomplished by marking the Initiating Order with a
market (MKT) price.
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    Only one Auction would be conducted at a time in any given series.
Once the Initiating Participant has submitted a PRISM Order for
exposure in the Auction, such PRISM Order may not be modified or
cancelled, nor may any Auction be cancelled once it has commenced.
Under any of the circumstances described above, the stop price or NWT
price may be improved to the benefit of the PRISM Order during the
Auction, but may not be cancelled.
    Under the proposal, except for rounding purposes, the Initiating
Participant would not receive an allocation percentage of more than 50%
with one competing quote, order or PAN response, or 40% with multiple
competing quotes, orders or PAN responses at the final price point,
when competing quotes, orders or PAN responses have contracts available
for execution.\10\ However, when starting an Auction, the Initiating
Participant may submit the Initiating Order with a designation of
``surrender'' to other PRISM Participants (``Surrender''), which will
result in the Initiating Participant forfeiting priority and trade
allocation privileges. If Surrender is specified, the Initiating
Participant would trade only if there were not enough interest
available to fully execute the PRISM Order at prices which are equal to
or improve upon the stop price.\11\ Surrender information would not be
available to other market participants and may not be modified after
the order is submitted to the Auction.
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    \10\ See proposed BX Chapter VI, Section 9(ii)(A)(1).
    \11\ Surrender will not be permitted if both the Initiating
Order and PRISM Order are Public Customer Orders. See proposed BX
Chapter VI, Section 9(ii)(A)(1).
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    When the Exchange receives a PRISM Order for Auction, a PAN
detailing the side, size and options series of the PRISM Order would be
sent over the Exchange's Specialized Quote Feed and BX Depth Feed.
PRISM Auctions would be for a specified duration of no less than one
hundred milliseconds and no more than one second, as determined by the
Exchange and announced on the Nasdaq Trader Web site.\12\ Any person or
entity may submit a response to the PAN, provided such response is
properly marked specifying price, size, and side of the market. PAN
responses would not be visible to Auction participants, including the
initiator, and would not be disseminated to OPRA. The minimum price
increment for PAN responses and for an Initiating Participant's stop
price and/or NWT price would be the minimum price improvement increment
established pursuant to proposed Rule Chapter VI, Section 9(i)(A).\13\
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    \12\ In May 2014, NASDAQ OMX PHLX LLC's (``Phlx'') staff
distributed a survey to all Phlx market maker firms inquiring as to
the timeframe within which these market participants respond to an
auction with a duration time ranging from less than fifty (50)
milliseconds to more than one (1) second. According to BX, the
market marker firms on Phlx represent membership similar to BX
Market Makers, and 90 percent of the BX Market Maker firms
participated in the survey. Of the thirty five (35) Phlx market
maker firms that were surveyed, twenty (20) of these market makers
responded to the survey and of those respondents 100% indicated that
that their firm could respond to auctions with a duration time of at
least 50 milliseconds. Based on the results of the survey, the
Exchange believes that allowing for an auction period of no less
than one hundred (100) milliseconds and no more than one (1) second
would provide a meaningful opportunity for BX Participants to
respond to the PRISM Auction while at the same time facilitating the
prompt execution of orders. Based on experience with the Phlx's PIXL
mechanism on BX's affiliated exchange, BX believes that 100
milliseconds will continue to provide all market participants with
sufficient time to respond, compete, and provide price improvement
for orders and will provide investors and other market participants
with more timely executions, thereby reducing their market risk.
    \13\ See proposed BX Chapter VI, Section 9(ii)(A)(2) through
(6).
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    A PAN response size at any given price point may not exceed the
size of the PRISM Order. Any such oversized response would be
immediately cancelled. A PAN response must be equal to or better than
the NBBO at the time of receipt of the PAN response or it would be
immediately cancelled. PAN responses may be modified or cancelled
during the Auction. PAN responses on the same side of the market as the
PRISM Order are considered invalid and will be immediately cancelled.
Finally, multiple PAN responses from the same Participant may be
submitted during the Auction. However, multiple orders at a particular
price point submitted by a Participant in response to a PAN may not
exceed, in the aggregate, the size of the PRISM Order.\14\
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    \14\ See proposed BX Chapter VI, Section 9(ii)(A)(7) through
(10).
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C. Conclusion of an Auction

    The PRISM Auction would conclude at the earlier of: (i) The end of
the Auction period; (ii) any time the BX

BBO crosses the PRISM Order stop price on the same side of the market
as the PRISM Order; \15\ or (iii) any time there is a trading halt \16\
on the Exchange in the affected series.\17\
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    \15\ This provision regarding the BX BBO crossing the PRISM
Order stop price on the same side of the market as the PRISM Order,
as a conclusion to a PRISM Auction, would be subject to a pilot
period scheduled to expire July 18, 2016.
    \16\ This provision regarding the trading halt, as a conclusion
to a PRISM Auction, would be subject to a pilot period scheduled to
expire July 18, 2016.
    \17\ See proposed BX Chapter VI, Section 9(ii)(B).
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    If the PRISM Auction concludes earlier than the end of the
prescribed Auction period, the entire PRISM Order will be executed at:
(i) In the case of the BX BBO crossing the PRISM Order stop price, the
best response price(s) or, if the stop price is the best price in the
Auction, at the stop price, unless the best response price is equal to
or better than the price of a limit order resting on the Order Book on
the same side of the market as the PRISM Order, in which case the PRISM
Order will be executed against that response, but at a price that is at
the minimum trading increment better than the price of such limit order
at the time of the conclusion of the Auction; or (ii) in the case of a
trading halt on the Exchange in the affected series, the stop price, in
which case the PRISM Order will be executed solely against the
Initiating Order.\18\
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    \18\ See proposed BX Chapter VI, Rule 9(ii)(C).
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    Any unexecuted PAN responses will be cancelled.\19\ An unrelated
market or marketable limit order (against the BX BBO) on the opposite
side of the market from the PRISM Order received during the Auction
will not cause the Auction to end early and will execute against
interest outside of the Auction.\20\ If contracts remain from such
unrelated order at the time the auction ends, they will be considered
for participation in the order allocation process.
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    \19\ See id.
    \20\ See proposed BX Chapter VI, Section 9(ii)(D). This
provision would be subject to a pilot period scheduled to expire on
July 18, 2016. The Commission notes that this provision is based on
a similar provision in Phlx's Price Improvement XL (``PIXL'')
auction. See Phlx Rule 1080(n).
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1. Order Allocation--Size Pro-Rata
    At the conclusion of the Auction, for option classes governed under
BX's Size Pro-Rata execution algorithm, the PRISM Order will be
allocated at the best price(s), pursuant to the priority set forth in
Chapter VI, 9(ii)(E)(1) through (5).\21\ First, Public Customer orders
would have time priority at each price level. Next, the Initiating
Participant would receive an allocation after Public Customer
orders.\22\
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    \21\ See Notice, supra note 3, at 54607-54610, for examples
illustrating trade allocations under the Size Pro-Rata execution
algorithm.
    \22\ The Initiating Participant shall receive additional
allocation only if contracts remain after any allocation pursuant to
proposed BX Chapter VI, Section 9(ii)(E)(3) through (5).
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    If the Initiating Participant selected the single stop price
option, PRISM executions will occur first at prices that improve the
stop price, and then at the stop price with up to 40% of the remaining
contracts after Public Customer interest is satisfied being allocated
to the Initiating Participant at the stop price. However, if only one
other quote, order or PAN response matches the stop price, then the
Initiating Participant may be allocated up to 50% of the contracts
executed at such price.
    If the Initiating Participant selected the auto-match option, the
Initiating Participant would be allocated a number of contracts equal
to the aggregate size of all other quotes, orders, and PAN responses at
each price point until a price point is reached where the balance of
the order can be fully executed, except that the Initiating Participant
would be entitled to receive up to 40% (if there are multiple competing
quotes, orders or PAN responses) or 50% (if there is only one competing
quote, order or PAN response) of the contracts remaining at the final
price point (including situations where the stop price is the final
price) after Public Customer interest has been satisfied but before
remaining interest receives an allocation.
    If the Initiating Participant selected the ``stop and NWT'' option,
contracts would be allocated as follows: (i) First to quotes, orders,
and PAN responses at prices better than the NWT price (if any),
beginning with the best price, pursuant to proposed Chapter VI, Section
9(ii)(E)(3) through (5), at each price point; and (ii) next, to quotes,
orders, and PAN responses at prices at the Initiating Participant's NWT
price and better than the Initiating Participant's stop price,
beginning with the NWT price. The Initiating Participant would be
allocated a number of contracts equal to the aggregate size of all
other quotes, orders, and PAN responses at each price point, except
that the Initiating Participant would be entitled to receive up to 40%
(if there are multiple competing quotes, orders or PAN responses) or
50% (if there is only one competing quote, order or PAN response) of
the contracts remaining at the final price point (including situations
where the final price is the stop price), after Public Customer
interest has been satisfied but before remaining interest receives an
allocation. In the case of an Initiating Order with a NWT price at the
market, the Initiating Participant would be allocated a number of
contracts equal to the aggregate size of all other quotes, orders, and
PAN responses at all price points, except that the Initiating
Participant would be entitled to receive up to 40% or 50% of the
contracts remaining at the final price point (including situations
where the final price is the stop price), after Public Customer
interest has been satisfied but before remaining interest receives an
allocation.\23\
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    \23\ See proposed BX Chapter VI, Section 9(ii)(E)(2)(a) through
(c).
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    After Public Customers and the Initiating Participant receive their
allocations, BX Options Market Makers that were at a price equal to the
NBBO on the opposite side of the market from the PRISM Order at the
time of initiation of the PRISM Auction (``Priority Market Makers'')
would have priority up to their quote size in the NBBO which was
present when the PRISM Auction was initiated (``Initial NBBO'') at each
price level at or better than such Initial NBBO.\24\ Priority Market
Maker quotes and PAN responses will be allocated pursuant to the Size
Pro-Rata algorithm set forth in BX Chapter VI, Section 10(1)(B).\25\
Priority Market Maker status is valid only for the duration of the
particular PRISM auction.
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    \24\ Miami International Securities Exchange, LLC (``MIAX'')
allocates executions resulting from Priority Public Customer
interest and priority Market Maker quotes ahead of other interest.
MIAX's system may designate Market Maker quotes as either priority
quotes or non-priority quotes in accordance with the provisions in
MIAX Rule 517(b). BX is prioritizing Priority Market Maker
allocations in the proposed BX PRISM Auction in a similar manner,
ahead of other non-Public Customer interest.
    \25\ See proposed BX Chapter VI, Section 9(ii)(E)(3).
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    Next, Non-Priority Market Makers, as well as Priority Market Maker
PRISM Auction interest which exceeded the Priority Market Maker's size
in the Initial NBBO, would have priority at each price level at or
better than the Initial NBBO after Public Customers, the Initiating
Participant and Priority Market Makers have received allocations. Non-
Priority Market Maker and such excess Priority Market Maker interest
will be allocated pursuant to the Size Pro-Rata algorithm set forth in
BX Chapter VI, Section 10(1)(B).\26\
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    \26\ See proposed BX Chapter VI, Section 9(ii)(E)(4).
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    Finally, all other interest will receive an allocation after the
interest discussed above has been satisfied. Such interest will be
allocated pursuant to the Size

Pro-Rata algorithm set forth in BX Chapter VI, Section 10(1)(B).\27\
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    \27\ See proposed BX Chapter VI, Section 9(ii)(E)(5).
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2. Order Allocation--Price/Time
    At the conclusion of the Auction, for option classes governed under
BX's Price/Time execution algorithm, the PRISM Order will be allocated
at the best price(s), pursuant to the priority set forth in proposed
Chapter VI, Section 9(ii)(F)(1) through (4).\28\ First, Public Customer
orders would have time priority at each price level. Next, the
Initiating Participant would receive an allocation after Public
Customer orders.\29\
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    \28\ See Notice, supra note 3, at 54607-54610, for examples
illustrating trade allocations under the Price/Time execution
algorithm.
    \29\ The Initiating Participant shall receive additional
allocation only if contracts remain after any allocation pursuant to
proposed BX Chapter VI, Section 9(ii)(F)(3) and (4).
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    If the Initiating Participant selected the single stop price
option, PRISM executions will occur first at prices that improve the
stop price, and then at the stop price with up to 40% of the remaining
contracts after Public Customer interest is satisfied being allocated
to the Initiating Participant at the stop price. However, if only one
other quote, order or PAN response matches the stop price, the
Initiating Participant may be allocated up to 50% of the contracts
executed at such price.
    If the Initiating Participant selected the auto-match option, the
Initiating Participant would be allocated a number of contracts equal
to the aggregate size of all other quotes, orders, and PAN responses at
each price point until a price point is reached where the balance of
the order can be fully executed, except that the Initiating Participant
would be entitled to receive up to 40% (if there are multiple competing
quotes, orders or PAN responses) or 50% (if there is only one competing
quote, order or PAN response) of the contracts remaining at the final
price point (including situations where the stop price is the final
price), after Public Customer interest has been satisfied but before
remaining interest receives an allocation.
    If the Initiating Participant selected the ``stop and NWT'' option,
contracts would be allocated as follows: (i) First to quotes, orders,
and PAN responses at prices better than the NWT price (if any),
beginning with the best price, pursuant to proposed Chapter VI, Section
9(ii)(F)(3) and (4), at each price point; and (ii) next, to quotes,
orders, and PAN responses at prices at the Initiating Participant's NWT
price and better than the Initiating Participant's stop price,
beginning with the NWT price. The Initiating Participant would be
allocated a number of contracts equal to the aggregate size of all
other quotes, orders, and PAN responses at each price point, except
that the Initiating Participant would be entitled to receive up to 40%
(if there are multiple competing quotes, orders or PAN responses) or
50% (if there is only one competing quote, order or PAN response) of
the contracts remaining at the final price point (including situations
where the final price is the stop price), after Public Customer
interest has been satisfied but before remaining interest receives an
allocation. In the case of an Initiating Order with a NWT price at the
market, the Initiating Participant would be allocated a number of
contracts equal to the aggregate size of all other quotes, orders, and
PAN responses at all price points, except that the Initiating
Participant would be entitled to receive up to 40% multiple competing
quotes, orders or PAN responses) or 50% (one competing quote, order or
PAN response) of the contracts remaining at the final price point
(including situations where the final price is the stop price), after
Public Customer interest has been satisfied but before remaining
interest receives an allocation.
    After Public Customers and the Initiating Participant receive their
allocations, Priority Market Makers that were at a price equal to the
NBBO on the opposite side of the market from the PRISM Order at the
time of initiation of PRISM Auction would have priority up to their
quote size in the Initial NBBO at each price level better than the
Initial NBBO. Priority Market Maker interest at prices better than the
Initial NBBO will be allocated pursuant to the Size Pro-Rata algorithm
set forth in BX Chapter VI, Section 10(1)(B). Priority Market Maker
interest at a price equal to or inferior to the Initial NBBO will not
have priority over other participants and will be allocated pursuant to
the Price/Time algorithm set forth in BX Chapter VI, Section
10(1)(A).\30\
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    \30\ See proposed BX Chapter VI, Section 9(ii)(F)(3).
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    Finally, all other interest will receive an allocation, after the
interest discussed above has been satisfied. Such interest will be
allocated pursuant to the Price/Time algorithm set forth in BX Chapter
VI, Section 10(1)(A).\31\
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    \31\ See proposed BX Chapter VI, Section 9(ii)(F)(4).
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D. Crossing Agency Orders

    The Exchange also proposes, in lieu of the PRISM Auction procedures
set forth in proposed Chapter VI, Section 9(i)-(ii), to allow an
Initiating Participant to enter a PRISM Order for the account of a
Public Customer paired with an order for the account of another Public
Customer, and such paired orders will be automatically executed without
a PRISM Auction, provided there is not currently an Auction in progress
in the same series, in which case the paired orders would be
cancelled.\32\ In its proposal, the Exchange notes that it would be a
violation of BX Chapter VII, Section 12 for a Participant to circumvent
Chapter VII, Section 12 by providing an opportunity for (i) a Public
Customer affiliated with the Participant, or (ii) a Public Customer
with whom the Participant has an arrangement that allows the
Participant to realize similar economic benefits from the transaction
as the Participant would achieve by executing agency orders as
principal, to regularly execute against agency orders handled by the
firm immediately upon their entry as PRISM Public Customer-to-Public
Customer immediate crosses.\33\
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    \32\ See discussion infra Section VI, Amendment No. 2. As noted
in proposed BX Chapter VI, Section 9(ii), only one Auction may be
conducted at a time in any given series.
    \33\ See Notice, supra note 3, at 54606. See also proposed BX
Chapter VI, Section 9(vi)(a).
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E. Pilot Program Information to the Commission

    Subject to a pilot program expiring July 18, 2016,\34\ there will
be no minimum size requirement for orders to be eligible for the
Auction. The Exchange also has proposed two additional components of
its rules on a pilot basis, expiring on July 18, 2016: (i) The early
conclusion of the PRISM Auction; and (ii) an unrelated market or
marketable limit order (against the BX BBO) on the opposite side of the
market from the PRISM Order received during the Auction will not cause
the Auction to end early and will execute against interest outside of
the Auction.\35\ During this pilot period, the Exchange represents that
it periodically will submit certain data, as requested by the
Commission staff, to provide supporting evidence that, among other
things, there is meaningful competition in PRISM Auctions for all size
orders, there are opportunities for significant price improvement for
orders executed through PRISM, and that there is an active and liquid
market functioning on the Exchange outside of the Auction

mechanism.\36\ The Exchange further noted that it would seek to request
confidential treatment for any raw data that it submits to the
Commission.\37\
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    \34\ See proposed BX Chapter VI, Section 9(viii).
    \35\ See proposed BX Chapter VI, Section 9(ii)(B)(2) through (4)
(governing the early conclusion of a PRISM auction) and proposed BX
Chapter VI, Section 9(ii)(D) (governing the treatment of unrelated
orders on the opposite side of the market from the PRISM Order).
    \36\ See Notice, supra note 3, at 54606-07.
    \37\ See id. See also proposed BX Chapter VI, Section 6(vii).
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    The Exchange represented that it will provide the following
additional information on a monthly basis:
    (i) The number of contracts (of orders of 50 contracts or greater)
entered into the PRISM;
    (ii) The number of contracts (of orders of fewer than 50 contracts)
entered into the PRISM;
    (iii) The number of orders of 50 contracts or greater entered into
the PRISM; and
    (iv) The number of orders of fewer than 50 contracts entered into
the PRISM.

III. Amendment No. 2

    In Amendment No. 2, the Exchange proposes to revise its proposal to
make certain clarifications and representations relating to the use of
Price Improving and Post-Only Orders and to make other clarifying
revisions to the rule text.
    The Exchange proposes to amend its rule text to delete the term
``displayed'' which modifies ``BX BBO'' in proposed Chapter VI, Section
9(i)(B) and the term ``or better than'' in proposed Chapter VI, Section
9(ii)(E)(3) because these references represent the impact of repricing
resulting from Price Improving and Post-Only Orders. The Exchange
represents that it will file a rule change separately with the
Commission to remove Price Improving and Post-Only Order types from its
Rules.\38\ The Exchange also represents that it will not commence
offering BX PRISM until such time as it has an effective and operative
rule in place from the Commission to remove Price Improving and Post-
Only Orders and removes the ability to submit Price Improving and Post-
Only Orders into the Auction.\39\ In the event the Exchange determines
in the future to allow the entry of any type of non-displayed order
types, the Exchange represents that it will file a proposed rule change
pursuant to Section 19(b)(2) under the Exchange Act with the Commission
to seek approval for such rule change.\40\ As there will be no longer
be any repricing order types on BX due to BX's elimination of Price
Improving and Post Only Orders, the Exchange proposes to delete these
terms from the rule text. The Exchange also proposes to delete the term
``displayed'' in other parts of the rule where it modifies the term
``NBBO,'' ``quote size,'' or ``size'' because the Exchange believes the
modifier ``displayed'' is redundant and unnecessary and wishes to avoid
any inference that the NBBO or quote size may be non-displayed, which
it represents is not the case.\41\
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    \38\ See Amendment No. 2, supra note 5, at 3.
    \39\ See id.
    \40\ See id. at 3-4.
    \41\ See id. at 5. The Exchange states that the term
``displayed'' prior to NBBO is simply redundant as the NBBO is
always displayed and therefore unnecessary. The term ``displayed''
before the terms ``quote size'' and ``size'' is not necessary as
such references may create an inference that the quote size may be
non-displayed in certain circumstances, which is not the case.
Additionally, the term ``displayed'' is not utilized in the Phlx
PIXL rule text (Phlx Rule 1080(n)), which auction is similar to
PRISM.
---------------------------------------------------------------------------

    The Exchange also proposes to replace certain uses of the term
``rejected'' in the rule text with the term ``immediately cancelled.''
In Amendment No. 2, BX notes that non-eligible and non-compliant orders
that are submitted into PRISM will be immediately cancelled when those
orders are reviewed for compliance with Exchange Rules. These orders
will not technically be rejected as there will be time, however
miniscule, between the submission of the order and the cancellation of
the order. The Exchange believes this non-substantive change adds more
clarity to the rule text. The Exchange also proposes to amend the rule
text to provide more specificity concerning the allocation guarantee to
which an Initiating Participant is entitled. While the current rule
text clearly states that the Initiating Participant may receive up to
40% if there is multiple competing interest or 50% of there is one
competing quote, order, or response, the amendments add this detail to
other places in the rule where the 40% and 50% guarantees are
referenced to consistently make clear the conditions under which they
apply. The Exchange believes this non-substantive change adds more
clarity to the rule text.
    Further, the Exchange proposes to amend the rule text at proposed
Chapter VI, Section 9(ii)(E)(3) to delete the term ``orders.'' This
amendment will correct the reference to the types of interest that
would be attributed to a Priority Market Maker. While quotes and PAN
responses will be allocated according to Priority Marker Maker status,
orders will be accepted but will not receive Priority Market Maker
status. Therefore, BX proposes to delete the term ``orders'' to make
clear which interest shall be included for calculation within the
allocation.
    In addition, the Exchange proposes to replace the terms ``orders''
or ``participants'' in certain places within the rule text that
reference the Initiating Participant's guarantee with the terms
``quote(s), order(s) or PAN response(s),'' which more fully and
explicitly represent the types of interest that is considered when
PRISM allocates 40% or 50% of the PRISM Order to the Initiating
Participant. The Exchange believes these amendments are non-substantive
changes that add more clarity to the rule text.
    The Exchange also proposes to amend the rule text at proposed
Chapter VI, Section 9(vi) to clarify that a Participant cannot submit a
Public Customer-to-Public customer paired order when there is a PRISM
Auction in progress in the same series. Any attempt to do so will
result in the Exchange canceling the Public Customer-to-Public customer
paired order. In its original notice, the Exchange noted that only one
Auction may be conducted at a time in any given series,\42\ and this
additional text just makes clear that the general prohibition also
applies when a Participant seeks to submit a Public Customer-to-Public
customer paired order. The remaining proposed changes in Amendment No.
2 correct a cross-reference and some typographical errors.
---------------------------------------------------------------------------

    \42\ See Notice, supra note 3, at 54602.
---------------------------------------------------------------------------

IV. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities exchange
and, in particular, with Section 6(b) of the Act.\43\ In particular,
the Commission finds that the proposed rule change is consistent with
Section 6(b)(5) of the Act,\44\ which requires, among other things,
that the rules of a national securities exchange be designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect customers, issuers, brokers and dealers. The Commission
believes that the Exchange's proposal to establish the PRISM Auction
may increase competition among those

options exchanges that offer similar price improvement mechanisms. The
Commission further believes that allowing BX members to enter orders
into the PRISM Auction could provide additional opportunities for such
orders to receive price improvement over the NBBO. The Commission also
believes that the BX's proposal to give priority to a Priority Market
Maker who is quoting at the NBBO before an Auction is initiated may
provide an incentive for BX Market Makers to publicly display their
best quotes with size on the Exchange, which would benefit all options
market participants.
---------------------------------------------------------------------------

    \43\ 15 U.S.C. 78f(b). In approving this proposed rule change,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
    \44\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    BX's proposed PRISM Auction is based in large part on Phlx's PIXL,
and also is similar to existing functionality at other options
exchanges, except that, as discussed further below, it adds a new type
of allocation for Priority Market Makers.\45\ All options traded on BX
are eligible for the PRISM Auction, and PRISM Orders are given the
opportunity for price improvement over the NBBO by being exposed to
members during the PRISM Auction. In addition, BX's proposal protects
resting interest on its limit order book as the Initiating
Participant's stop price \46\ must be at least one minimum trading
increment better than any booked order's limit price on the same side
of the market as the PRISM Order, when the PRISM Order is for a Public
Customer. A PRISM Order for any entity other than a Public Customer
must be stopped at a price better than the same side of the BX BBO even
if there is no resting limit order on the book.
---------------------------------------------------------------------------

    \45\ See, e.g., Phlx Rule 1080(n) (Phlx's PIXL), Chicago Board
Options Exchange (``CBOE'') Rule 6.74A (CBOE's Automated Improvement
Mechanism (``AIM'') auction), and MIAX Rule 515A (MIAX's Price
Improvement Mechanism (``PRIME'') auction).
    \46\ The Initiating Participant may forfeit priority and trade
allocation privileges by designating the Initiating Order as
Surrender, in which case the Initiating Participant would trade only
if there were not enough interest available to fully execute the
PRISM Order at prices which are equal to or improve upon the stop
price. The Commission notes that this feature may encourage use of
the PRISM Auction to provide certain orders with an opportunity for
price improvement that such orders may not otherwise receive.
---------------------------------------------------------------------------

    BX will not accept PRISM Orders during certain times, including
during the final two seconds of the regular trading session, as well as
at or before the opening of trading. BX also would cancel any PRISM
Order that does not meet the Auction eligibility requirements specified
in the proposed rule. Further, once a PRISM Auction has commenced, it
cannot be cancelled.
    When the BX receives an eligible PRISM Order for submission to the
PRISM Auction, it will broadly announce the Auction by sending a PAN
over the BX Depth feed and the Exchange's Specialized Quote Feed
detailing the option, side, and size.\47\ This message is designed to
help attract competitive responses to a PRISM Auction. The PRISM rules
also permit any person or entity to submit responses to the PAN on
behalf of all types of interest.\48\ The Commission believes that these
requirements provide the opportunity for a PRISM Order to be exposed in
an auction designed to attract competitive responses and facilitate
price improvement, and thus may result in ultimately better prices for
the PRISM Order to the extent the PAN is successful in attracting
competitive responses.
---------------------------------------------------------------------------

    \47\ According to the Exchange, SQF is available to Market
Makers at no cost. The Depth Feed is available to all other market
participants that pay to subscribe to the service to receive
broadcast information regarding auctions.
    \48\ Cf. CBOE Rule 6.74A(b)(1)(D)-(E) (only CBOE Market Makers
with an appointment in the relevant option class, and CBOE Members
acting as agent for orders resting at the top of the CBOE book
opposite the Agency Order, may submit responses to the AIM RFR).
---------------------------------------------------------------------------

    All PRISM Auctions will last for a period for a predefined time of
no less than 100 milliseconds and no more than 1 second as determined
by the Exchange and announced on the Nasdaq Trader Web site. As the
Exchange discussed in its proposal, in May 2014, Phlx surveyed its
Market Maker members as to the timeframe within which these firms could
respond to an auction with a duration time ranging from less than 50
milliseconds to more than 1 second.\49\ Of the 20 Market Maker firms
\50\ that responded to the question, 100% indicated that their firm
could respond to auctions with a duration time of at least 50
milliseconds.\51\ Based on BX's statements, the Commission believes
that proposed duration of the PRISM Auction could facilitate the prompt
execution of orders in the PRISM auction, while providing market
participants with an opportunity to compete for exposed bids and
offers. The Commission notes that other exchanges' price improvement
mechanisms provide for auction response periods within the range of the
response duration proposed by BX.\52\
---------------------------------------------------------------------------

    \49\ See Notice, supra note 3, at 54602.
    \50\ The Exchange represents that 90% of the BX market maker
firms participated in the survey (i.e., 90% of BX market maker firms
were also market makers on Phlx who participated in the Phlx
survey). See Notice, supra note 3, at 5460203, n. 19.
    \51\ See Notice, supra note 3, at 54602-03, n. 19-20 and
accompanying text.
    \52\ See International Securities Exchange Rule 723(c)(5)
(auction period of 500 milliseconds), CBOE Rule 6.74A(b)(1)(C)
(auction period of 1 second), Boston Options Exchange Rule
7150(f)(1) (auction period of 100 milliseconds).
---------------------------------------------------------------------------

    At the conclusion of a PRISM Auction, Public Customer orders have
first priority to trade against the PRISM Order. After Public Customer
orders receive their allocation, the Initiating Participant next may be
allocated a limited percentage of the PRISM Order, not to exceed 40% of
the contracts at the applicable final price point if competing quotes,
orders or PAN responses have contracts available for execution
(however, if only one other competing quote, order or PAN response
matches the Initiating Participant's submission at the best price, then
the Initiating Participant may be allocated up to 50% of the PRISM
Order). After the Initiating Participant's primary allocation, quotes
and PAN responses from Priority Market Makers have next priority.
Thereafter, Non-Priority Market Makers, as well as Priority Market
Maker interest which exceeded their displayed size in the Initial NBBO,
would have the next priority at each price level at or better than the
Initial NBBO. Finally, all other interest would receive an allocation
if contracts remained. The Commission believes that the BX PRISM's
proposed matching algorithm is sufficiently clear regarding how orders
are to be allocated in the PRISM Auction and is designed in a manner
that should facilitate a competitive auction process.
    As noted above, the proposed BX rules grant a BX Market Maker
``priority'' status for the duration of an Auction when the Market
Maker is quoting at the NBBO at the time the PRISM Auction was
initiated, up to the size of its quote. The Commission believes that
this provision is designed to encourage BX Market Makers to quote
aggressively with additional size outside of the PRISM Auction and,
therefore, may enhance competition and liquidity on the BX market. The
Commission notes that another exchange, the Miami International
Securities Exchange, offers a similar ``priority quote'' feature in its
general matching system,\53\ and also provides for enhanced priority
for ``priority quotes'' in its PRIME price improvement auction in a
substantially similar manner as to what BX proposes for PRISM.\54\
---------------------------------------------------------------------------

    \53\ See MIAX Rule 517(b)(1)(i).
    \54\ See MIAX Rule 515A(a)(2)(iii)(C).
---------------------------------------------------------------------------

    The Exchange has represented its commitment to submit certain data
on PRISM Auctions at the request of Commission staff. The Commission
expects such data to be used, by both the Exchange and the Commission
staff, to assess the performance of PRISM Auction, including, among
other things, to study whether there is meaningful competition for all
size orders with the

PRISM, the degree of price improvement for all orders executed through
the PRISM, and whether there is an active and liquid market functioning
on the Exchange outside of the PRISM. The data provided will enable the
Commission, as well as the Exchange itself, to evaluate the PRISM
Auction to determine its performance and possible impact on BX and
options market structure in general and the degree to which it is
beneficial to customers and to the options market as a whole.

V. Section 11(a) of the Act

    Section 11(a)(1) of the Act \55\ prohibits a member of a national
securities exchange from effecting transactions on that exchange for
its own account, the account of an associated person, or an account
over which it or its associated person exercises investment discretion
(collectively, ``covered accounts'') unless an exception applies. Rule
11a2-2(T) under the Act,\56\ known as the ``effect versus execute''
rule, provides exchange members with an exemption from the Section
11(a)(1) prohibition. Rule 11a2-2(T) permits an exchange member,
subject to certain conditions, to effect transactions for covered
accounts by arranging for an unaffiliated member to execute
transactions on the exchange. To comply with Rule 11a2-2(T)'s
conditions, a member: (i) Must transmit the order from off the exchange
floor; (ii) may not participate in the execution of the transaction
once it has been transmitted to the member performing the execution;
\57\ (iii) may not be affiliated with the executing member; and (iv)
with respect to an account over which the member or an associated
person has investment discretion, neither the member nor its associated
person may retain any compensation in connection with effecting the
transaction except as provided in the Rule. For the reasons set forth
below, the Commission believes that Exchange members entering orders
into the PRISM Auction would satisfy the requirements of Rule 11a2-
2(T).
---------------------------------------------------------------------------

    \55\ 15 U.S.C. 78k(a)(1).
    \56\ 17 CFR 240.11a2-2(T).
    \57\ This prohibition also applies to associated persons. The
member may, however, participate in clearing and settling the
transaction.
---------------------------------------------------------------------------

    The Rule's first condition is that orders for covered accounts be
transmitted from off the exchange floor. In the context of automated
trading systems, the Commission has found that the off-floor
transmission requirement is met if a covered account order is
transmitted from a remote location directly to an exchange's floor by
electronic means.\58\ BX has represented that the BX trading system and
the proposed PRISM Auction receive all orders electronically through
remote terminals or computer-to-computer interfaces.\59\ The Exchange
also represents that orders for covered accounts from Participants will
be transmitted from a remote location directly to the proposed PRISM
mechanism by electronic means. Because no Exchange members may submit
orders into the PRISM Auction from on the floor of the Exchange, the
Commission believes that the PRISM Auction satisfies the off-floor
transmission requirement.
---------------------------------------------------------------------------

    \58\ See, e.g., Securities Exchange Act Release Nos. 61419
(January 26, 2010), 75 FR 5157 (February 1, 2010) (SR-BATS-2009-031)
(approving BATS options trading); 59154 (December 23, 2008), 73 FR
80468 (December 31, 2008) (SR-BSE-2008-48) (approving equity
securities listing and trading on BSE); 57478 (March 12, 2008), 73
FR 14521 (March 18, 2008) (SR-NASDAQ-2007-004 and SR-NASDAQ-2007-
080) (approving NOM options trading); 53128 (January 13, 2006), 71
FR 3550 (January 23, 2006) (File No. 10-131) (approving The Nasdaq
Stock Market LLC); 44983 (October 25, 2001), 66 FR 55225 (November
1, 2001) (SR-PCX-00-25) (approving Archipelago Exchange); 29237 (May
24, 1991), 56 FR 24853 (May 31, 1991) (SR-NYSE-90-52 and SR-NYSE-90-
53) (approving NYSE's Off-Hours Trading Facility); and 15533
(January 29, 1979), 44 FR 6084 (January 31, 1979) (``1979
Release'').
    \59\ See Notice, supra note 3, at 54612. See also Amendment No.
2, supra note 5.
---------------------------------------------------------------------------

    Second, the Rule requires that the member and any associated person
not participate in the execution of its order after the order has been
transmitted. The Exchange represents that at no time following the
submission of an order is a Participant able to acquire control or
influence over the result or timing of the order's execution.\60\
According to the Exchange, the execution of an order is determined by
what other orders are present in the PRISM and the priority of those
orders.\61\ Accordingly, the Commission believes that a member does not
participate in the execution of an order submitted to the PRISM
mechanism.
---------------------------------------------------------------------------

    \60\ See Notice, supra note 3, at 54612. See also Amendment No.
2, supra note 5 (also representing, among other things, that: (1) No
Participant, including the Initiating Participant, will see a PAN
response submitted into PRISM and therefore and will not be able to
influence or guide the execution of their PRISM Orders, (2) the
Surrender feature will not permit a Participant to have any control
over an order, and that the election to Surrender an order is
available prior to the submission of the order, will not be
broadcast and further, that the Surrender option may not be modified
by the market participant during the auction).
    \61\ See Notice, supra note 3, at 54612. See also Amendment No.
2, supra note 5. The Exchange notes that a Member may cancel or
modify the order, or modify the instructions for executing the
order, but that such instructions would be transmitted from off the
floor of the Exchange. The Commission has stated that the non-
participation requirement is satisfied under such circumstances so
long as such modifications or cancellations are also transmitted
from off the floor. See Securities Exchange Act Release No. 14563
(March 14, 1978), 43 FR 11542 (March 17, 1978) (``1978 Release'')
(stating that the ``non-participation requirement does not prevent
initiating members from canceling or modifying orders (or the
instructions pursuant to which the initiating member wishes orders
to be executed) after the orders have been transmitted to the
executing member, provided that any such instructions are also
transmitted from off the floor'').
---------------------------------------------------------------------------

    Third, Rule 11a2-2(T) requires that the order be executed by an
exchange member who is unaffiliated with the member initiating the
order. The Commission has stated that this requirement is satisfied
when automated exchange facilities, such as the PRISM mechanism, are
used, as long as the design of these systems ensures that members do
not possess any special or unique trading advantages in handling their
orders after transmitting them to the exchange.\62\ BX represents that
the PRISM is designed so that no Member has any special or unique
trading advantage in the handling of its orders after transmitting its
orders to the mechanism.\63\ Based on the Exchange's representation,
the Commission believes that the PRISM mechanism satisfies this
requirement.
---------------------------------------------------------------------------

    \62\ In considering the operation of automated execution systems
operated by an exchange, the Commission noted that, while there is
not an independent executing exchange member, the execution of an
order is automatic once it has been transmitted into the system.
Because the design of these systems ensures that members do not
possess any special or unique trading advantages in handling their
orders after transmitting them to the exchange, the Commission has
stated that executions obtained through these systems satisfy the
independent execution requirement of Rule 11a2-2(T). See 1979
Release, supra note 58.
    \63\ See Notice, supra note 3, at 54612. See also Amendment No.
2, supra note 5.
---------------------------------------------------------------------------

    Fourth, in the case of a transaction effected for an account with
respect to which the initiating member or an associated person thereof
exercises investment discretion, neither the initiating member nor any
associated person thereof may retain any compensation in connection
with effecting the transaction, unless the person authorized to
transact business for the account has expressly provided otherwise by
written contract referring to Section 11(a) of the Act and Rule 11a2-
2(T) thereunder.\64\ BX represents

that Members relying on Rule 11a2-2(T) for transactions effected
through the PRISM must comply with this condition of the Rule and that
the Exchange will enforce this requirement pursuant to its obligations
under Section 6(b)(1) of the Act to enforce compliance with federal
securities laws.\65\
---------------------------------------------------------------------------

    \64\ In addition, Rule 11a2-2(T)(d) requires a member or
associated person authorized by written contract to retain
compensation, in connection with effecting transactions for covered
accounts over which such member or associated persons thereof
exercises investment discretion, to furnish at least annually to the
person authorized to transact business for the account a statement
setting forth the total amount of compensation retained by the
member or any associated person thereof in connection with effecting
transactions for the account during the period covered by the
statement. See 17 CFR 240.11a2-2(T)(d). See also 1978 Release, supra
note 61 (stating ``[t]he contractual and disclosure requirements are
designed to assure that accounts electing to permit transaction-
related compensation do so only after deciding that such
arrangements are suitable to their interests'').
    \65\ See Notice, supra note 3, at 54612. See also Amendment No.
2, supra note 5.
---------------------------------------------------------------------------

VI. Accelerated Approval of Proposal, as Modified by Amendment No. 2

    The Commission finds good cause, pursuant to Section 19(b)(2) of
the Exchange Act, to approve the proposal, as modified by Amendment
Nos. 1 and 2, prior to the 30th day after publication of Amendment No.
2 in the Federal Register. In Amendment No. 2, BX revised the original
proposal, which had been previously amended by Amendment No. 1 before
it was published in the Federal Register, to make the changes discussed
in detail above. Notably, in Amendment No. 2, BX represents that Price
Improving and Post-Only Order types will be removed from its Rules
before BX implements the PRISM Auction mechanism. BX also made changes
to clarify and add detail to the rule text. The Commission believes
that Amendment No. 2 does not raise any novel regulatory issues and
instead provides additional clarity in the rule text, which is
consistent with BX's original proposal, as modified by Amendment No. 1,
and supports BX's analysis of how its proposal is consistent with the
Act, thus facilitating the Commission's ability to make the findings
set forth above to approve the proposal. Accordingly, the Commission
finds that good cause exists to approve the proposal, as modified by
Amendment No. 2, on an accelerated basis.

VII. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether Amendment No. 2
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-BX-2015-032 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-BX-2015-032. 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 20549-1090, 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; 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-BX-2015-032 and should be
submitted on or before November 25, 2015.

VIII. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\66\ that the proposed rule change (SR-BX-2015-032), as modified by
Amendment Nos. 1 and 2, be and hereby is approved on an accelerated
basis, except that BX Chapter VI, Section 9(ii)(B)(2)-(3), Section
9(ii)(D), and Section 9(vii) are approved on a pilot basis until July
18, 2016.
---------------------------------------------------------------------------

    \66\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\67\
---------------------------------------------------------------------------

    \67\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-28024 Filed 11-3-15; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 76, Number 156 (Friday, August 12, 2011)]
[Rules and Regulations]
[Page 50124]
[FR Doc No: 2011-20503]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 117

[Docket No. USCG-2011-0738]

Drawbridge Operation Regulation; China Basin, San Francisco, CA

AGENCY: Coast Guard, DHS.

ACTION: Notice of temporary deviation from regulations.

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

SUMMARY: The Commander, Eleventh Coast Guard District, has issued a
temporary deviation from the regulation governing the operation of the
Third Street Drawbridge across China Basin, mile 0.0, at San Francisco,
CA. The deviation is necessary to allow the bridge to be part of the
race course for the scheduled AT&T Giant Race event. This deviation
allows the bridge to remain in the closed-to-navigation position during
the deviation period.

DATES: This deviation is effective from 7 a.m. to 12 p.m. on August 27,
2011.

ADDRESSES: Documents mentioned in this preamble as being available in
the docket are part of the docket USCG-2011-0738 and are available
online by going to http://www.regulations.gov, inserting USCG-2011-0738
in the ``Keyword'' box and then clicking ``Search''. They are also
available for inspection or copying at the Docket Management Facility
(M-30), U.S. Department of Transportation, West Building Ground Floor,
Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590,
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays.

FOR FURTHER INFORMATION CONTACT: If you have questions on this rule,
call or e-mail David H. Sulouff, Chief, Bridge Section, Eleventh Coast
Guard District; telephone<PHONE_NUMBER>, e-mail
<EMAIL_ADDRESS>If you have questions on viewing the docket,
call Renee V. Wright, Program Manager, Docket Operations, telephone
202-366-9826.

SUPPLEMENTARY INFORMATION: The City of San Francisco requested a
temporary change to the operation of the Third Street Drawbridge, mile
0.0, over China Basin, at San Francisco, CA. The Third Street
Drawbridge navigation span provides a vertical clearance of 7 feet
above Mean High Water in the closed-to-navigation position. The draw
opens on signal if at least one hour notice is given as required by 33
CFR 117.149. Navigation on the waterway is recreational.
    The drawspan will be secured in the closed-to-navigation position 7
a.m. to 12 p.m. on August 27, 2011, to allow running of the AT&T Giant
Race event. This temporary deviation has been coordinated with the
waterway users. No objections to the proposed temporary deviation were
raised. The drawspan can be operated upon one hour advance notice for
emergencies requiring the passage of waterway traffic.
    Vessels that can transit the bridge, while in the closed-to-
navigation position, may continue to do so at any time.
    In accordance with 33 CFR 117.35(e), the drawbridge must return to
its regular operating schedule immediately at the end of the designated
time period. This deviation from the operating regulations is
authorized under 33 CFR 117.35.

    Dated: August 1, 2011.
D.H. Sulouff,
Bridge Section Chief, Eleventh Coast Guard District.
[FR Doc. 2011-20503 Filed 8-11-11; 8:45 am]
BILLING CODE 4910-15-P