[Federal Register Volume 87, Number 52 (Thursday, March 17, 2022)]
[Notices]
[Pages 15292-15296]
[FR Doc No: 2022-05595]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-94405; File No. SR-CboeEDGX-2022-008]

Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Modify the External Subscriber Fees Applicable To Cboe One Summary
Derived Data API Service

March 11, 2022.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on March 1, 2022, Cboe EDGX Exchange, Inc. (the ``Exchange'' or
``EDGX'') filed with the Securities and Exchange Commission (the
``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

    Cboe EDGX Exchange, Inc. (``EDGX'' or the ``Exchange'') is filing
with the Securities and Exchange Commission (the ``Commission'') a
proposed rule change to modify the External

Subscriber fees applicable to Cboe One Summary Derived Data API
Service. The text of the proposed rule change is provided in Exhibit 5.
    The text of the proposed rule change is also available on the
Exchange's website (http://markets.cboe.com/us/options/regulation/rule_filings/edgx/), at the Exchange's Office of the Secretary, and at
the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to modify fees charged to External
Distributors that distribute Cboe One Summary Derived Data through an
Application Programming Interface (``API'')--i.e., the Derived Data API
Service, effective March 1, 2022.
Background
    By way of background, the Exchange offers a Financial Product
Distribution Program (``Program''), under which a Distributor may
subscribe to one of three Derived Data Service options, White Label
Service,\3\ API Service \4\ or Platform Service,\5\ each of which
offers either EDGX Top Data, which is an uncompressed data feed that
offers top of book quotations and execution information based on equity
orders entered into the System \6\ or Cboe One Summary Data, which is a
proprietary data product that provides the top of book quotations and
execution information for all listed equity securities traded across
the Exchange and its affiliated U.S. equities exchanges (the ``Cboe
equity exchanges'').\7\ Under the Program, regardless of the Service
option selected by a Distributor, the Distributors receive the same
real-time Exchange data (i.e., EDGX Top or Cboe One Summary) as all
other subscribers of such Exchange data. From the Exchange data, a
Distributor may create ``Derived Data'', which is pricing data or other
data that (i) is created in whole or in part from Exchange data, (ii)
is not an index or financial product, and (iii) cannot be readily
reverse[hyphen]engineered to recreate Exchange data or used to create
other data that is a reasonable facsimile or substitute for Exchange
data. Derived Data may be created by Distributors for a number of
different purposes, as determined by the Distributor. The specific use
of Exchange data is determined by the Distributor, as applicable fees
do not depend on the purpose for placing the Derived Data under the
Program.
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    \3\ A ``White Label Service'' is a type of hosted display
solution in which a Distributor hosts or maintains a website or
platform on behalf of a third-party entity. The service allows
Distributors to make Derived Data available on a platform that is
branded with a third-party brand, or co-branded with a third party
and a Distributor. The Distributor maintains control of the
application's data, entitlements and display.
    \4\ An ``API Service'' is a type of data feed distribution in
which a Distributor delivers an API or similar distribution
mechanism to a third-party entity for use within one or more
platforms. The service allows Distributors to provide Derived Data
to a third-party entity for use within one or more downstream
platforms that are operated and maintained by the third-party
entity. The Distributor maintains control of the entitlements, but
does not maintain technical control of the usage or the display.
    \5\ A ``Platform Service'' is a type of hosted display solution
in which a Distributor provides derivative products to Platform
Service Data Users within their infrastructure. The service allows
Distributors to make Derived Data available as part of a platform,
providing users remote access to derivative products based in whole
or in part on Exchange Data.
    \6\ See Exchange Rule 13.8(c).
    \7\ See Exchange Rule 13.8(b). The Cboe One Summary external
distribution fee is equal to the aggregate EDGX Top, BZX, Top, BYX
Top, and EDGA Top fees external distribution fees.
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Cboe One Summary Derived Data API Service External Subscriber Fees
    The Derived Data API Service program offers discounted fees for
Distributors that make Derived Data available through an API, thereby
allowing Distributors to benefit from reduced fees when distributing
Derived Data to subscribers that establish their own platforms (rather
than relying on a hosted display solution). Instead of the regular flat
fee for External Distribution of Exchange data, Distributors of Derived
Data under the API Service are charged a tiered External Subscriber Fee
based on the number of API Service Platforms (i.e., ``External
Subscribers'') that receive Derived Data from the Distributor through a
Derived Data API Service and may benefit from discounted pricing based
on the number of subscribers. Currently, Distributors under this
program are charged a fee of $5,000 per month for each External
Subscriber if the Distributor makes Derived Data available to 1-5
External Subscribers; $4,000 per month for each External Subscriber if
the Distributor makes Derived Data available to 6-20 External
Subscribers, and further lowered to $3,000 per month for each External
Subscriber if the Distributor makes Derived Data available to 21 or
more External Subscribers. The Exchange now proposes to further reduce
the distribution fees for Distributors of Cboe One Summary Derived Data
through a Derived API Service. Particularly, the Exchange proposes to
modify the External Subscriber fees as follows:

------------------------------------------------------------------------
     Number of external subscribers         Current fee    Proposed fee
------------------------------------------------------------------------
1-5.....................................          $5,000          $3,000
6-20....................................           4,000           2,500
21 and above............................           3,000           2,000
------------------------------------------------------------------------

    The Exchange notes that the External Subscriber Fee is non-
progressive and based on the number of External Subscribers that
receive Derived Data from the Distributor. To illustrate how the
discount is applied, the Exchange has codified an example in the Fees
Schedule under the notes section of the Derived Data API Service
section, which it now proposes to update in connection with the
proposed changes to the External Subscriber fees.\8\ Currently, the

example provides that a Distributor providing Derived Data based on
Cboe One Summary to six (6) External Subscribers that are API Service
Platforms would be charged a monthly fee of $24,000 (i.e., 6 External
Subscribers x $4,000 each). The Exchange proposes to update the example
to provide that Distributor providing Derived Data based on Cboe One
Summary to six (6) External Subscribers that are API Service Platforms
would be charged a monthly fee of $15,000 (i.e., 6 External Subscribers
x $2,500 each). The proposal to reduce the External Subscriber fees is
designed to provide a price structure that is competitive and attract
Distributors for its Cboe One Summary data offering through the Derived
Data API Service.
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    \8\ The Exchange notes that it inadvertently omitted appending
three asterisks to the External Subscriber Fee in the ``Cboe One
Summary Derived Data API Service'' table to reference the
corresponding notes section that includes the summary as to how the
discount is applied and seeks to update the Fees Schedule now to
avoid potential confusion.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the objectives of Section 6 of the Act,\9\ in general, and
furthers the objectives of Section 6(b)(4),\10\ in particular, as it is
designed to provide for the equitable allocation of reasonable dues,
fees and other charges among its members and other recipients of
Exchange data.
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    \9\ 15 U.S.C. 78f.
    \10\ 15 U.S.C. 78f(b)(4).
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    The Exchange also believes that the proposed rule change is
consistent with Section 11(A) of the Act.\11\ Specifically, the
proposed rule change supports (i) fair competition among brokers and
dealers, among exchange markets, and between exchange markets and
markets other than exchange markets, and (ii) the availability to
brokers, dealers, and investors of information with respect to
quotations for and transactions in securities. In addition, the
proposed rule change is consistent with Rule 603 of Regulation NMS,\12\
which provides that any national securities exchange that distributes
information with respect to quotations for or transactions in an NMS
stock do so on terms that are not unreasonably discriminatory.
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    \11\ 15 U.S.C. 78k-1.
    \12\ See 17 CFR 242.603.
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    In adopting Regulation NMS, the Commission granted SROs and broker-
dealers increased authority and flexibility to offer new and unique
market data to the public. It was believed that this authority would
expand the amount of data available to consumers, and also spur
innovation and competition for the provision of market data. The
Exchange believes that the proposed fee change would further broaden
the availability of U.S. equity market data to investors, consistent
with the principles of Regulation NMS.
    The Exchange operates in a highly competitive environment. Indeed,
there are 16 registered national securities exchanges that trade U.S.
equities and have the capability to offer associated top of book market
data products to their customers.\13\ Additionally, two other exchange
families specifically offer similar consolidated top of book products
that compete directly with Cboe One Summary.\14\ The Commission has
repeatedly expressed its preference for competition over regulatory
intervention in determining prices, products, and services in the
securities markets. Specifically, in Regulation NMS, 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.'' \15\ The proposed fee change is a result of the
competitive environment, as the Exchange seeks to amend its fees to
attract additional Distributors for its Cboe One Summary data offering
through the Derived Data API Service.
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    \13\ Competing top-of-book products include, Nasdaq Basic, BX
Basic, PSX Basic, NYSE BQT, NYSE BBO/Trades, NYSE Arca BQT, NYSE
Arca BBO/Trades, NYSE American BBO/Trades, NYSE Chicago BBO/Trades,
IEX TOPS, MIAX PEARL Equities Top of Market Feed, and MEMX MEMOIR
Top.
    \14\ Competing consolidated top of book products include Nasdaq
Basic and NYSE BQT. As described on the Nasdaq website, available
here: http://www.nasdaqtrader.com/Trader.aspx?id=nasdaqbasic, Nasdaq
Basic is a ``low cost alternative'' that provides ``Best Bid and
Offer and Last Sale information for all U.S. exchange-listed
securities based on liquidity within the Nasdaq market center, as
well as trades reported to the FINRA Trade Reporting Facility
(``TRF'').'' As described on the NYSE website, available here:
https://www.nyse.com/market-data/real-time/nyse-bqt NYSE Best Quote
and Trades (BQT) ``is a cost efficient, consolidated market data
feed that provides a unified view of quotes and trades from NYSE,
NYSE American, NYSE Arca, NYSE Chicago and NYSE National.''
    \15\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
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    The Exchange believes that the proposed change is reasonable as it
lowers the existing External Subscriber fees and these fee reductions
would continue to facilitate cost effective access to market
information that is used primarily to create certain derivative
instruments rather than to trade U.S. equity securities. As discussed,
the Cboe One Summary data offering through the Derived Data API Service
allows Distributors to create Derived Data that is based on a more
comprehensive view of the U.S. equities market. Because Exchange data
in this context is primarily purchased for the creation of Derived Data
encompassing certain derivative instruments, Distributors do not
require a consolidated view of the market across several exchanges, and
will generally purchase such data from a single or select few
exchange(s) for their purposes. As noted above, Cboe One Summary
includes top of book quotation and transaction data across all four
Cboe equity exchanges, which allows Distributors to create more
meaningful Derived Data than that available from a single exchange's
market data at a potentially reduced price.
    The existence of alternatives to the Program therefore ensures that
the Exchange cannot set unreasonable or unfairly discriminatory fees,
as subscribers are free to elect such alternatives. That is, the
Exchange competes with other exchanges that provide similar top of book
and/or consolidated top of book products and pricing programs for
Derived Data.\16\ The availability of diverse competitive products
promotes additional competition as it ensures that alternative products
from different sources are readily available to Distributors and the
broader market. The Exchange therefore believes that the existing
Derived Data API Service is not only constrained by competition but
also ensures continued competition that acts as a constraint on the
pricing of services provided by other national securities exchanges. If
a competing exchange were to charge less for a similar product than the
Exchange charges under the existing fee structure, even as amended,
prospective subscribers may choose not to subscribe to, or cease
subscribing to, the Program. The Exchange believes that further
lowering the cost of accessing Derived Data may make the Exchange's
market information more attractive, and encourage additional
Distributors to subscribe to Exchange market data instead of competitor
products. While the Exchange has no way of predicting with certainty
the impact of the proposed changes, it anticipates up to two
Distributors will create Derived Data from Cboe One Summary using the
API Service.
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    \16\ See generally, the Nasdaq Basic fees at http://www.nasdaqtrader.com/TraderB.aspx?id=MDDPricingALLN.
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    Moreover, External Subscriber fees only apply to Distributors that
elect to participate in the Program by distributing Derived Data from
Cboe

One Summary through an API Service. Cboe One Summary Feed is
distributed and purchased on a voluntary basis, in that neither the
Exchange nor market data distributors are required by any rule or
regulation purchase this data or to make this data available.
Accordingly, Distributors can discontinue distributing at any time and
for any reason, including due to an assessment of the reasonableness of
fees charged, Cboe One Summary Derived Data under the API Service.
Indeed, there are no Distributors who are currently subscribing to the
API Service for Cboe One Summary Derived Data. Further, as discussed,
firms have a wide variety of alternative market data products from
which to choose, such as similar proprietary consolidated top of book
data products offered by other national securities exchanges,\17\
including those that choose to offer discounted fees for the
distribution of Derived Data in an effort to compete for this business.
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    \17\ Supra note 14.
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    The proposed rule change also continues to provide an alternate,
and as proposed, lower, fee structure for providing Cboe One Summary
market data to Distributors that make Derived Data available to
External Subscribers via API Services. If a Distributor uses an API
Service to distribute Derived Data, the Distributor will still be
charged a fee that is tiered based on the number of External
Subscribers that are provided access to that data instead of the higher
fee normally charged for external distribution. The Exchange believes
that this fee is equitable and not unfairly discriminatory because the
Exchange will apply the same fees to any similarly situated
Distributors that elect to participate in the Program based on the
number of External Subscribers provided access to Derived Data through
an API Service. Also, all Distributors that make Derived Data available
to External Subscribers through an API Service will receive a discount
compared to the current pricing applicable for external distribution of
Cboe One Summary.\18\ The Exchange also believes its equitable and not
unfairly discriminatory to provide incrementally higher discounted
rates to Distributors that provide access to Derived Data to a greater
numbers of Subscribers as the discounted rates are designed to
incentivize firms to grow the number of External Subscribers that
purchase Derived Data from the Distributor.
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    \18\ See Cboe EDGX U.S. Equities Exchange Fee Schedule.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change would
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act. The Exchange
operates in a highly competitive environment, and its ability to price
these data products is constrained by competition among exchanges that
offer similar data products, and pricing options, to their customers.
Top of book data is broadly disseminated by competing U.S. equities
exchanges. There are therefore a number of alternative products
available to market participants and investors. In this competitive
environment potential subscribers are free to choose which competing
product to purchase to satisfy their need for market information.
Often, the choice comes down to price, as broker-dealers or vendors
look to purchase the lowest priced top of book data product, or
quality, as market participants seek to purchase data that represents
significant market liquidity. In order to better compete for this
segment of the market, the Exchange is proposing to reduce fees charged
to Distributors that distribute certain Derived Data through an API
Service. The Exchange believes that this would facilitate greater
access to Exchange data and Derived Data, ultimately benefiting
investors that are provided access to such data.
    The Exchange believes that the proposed fees do not put any market
participants at a relative disadvantage compared to other market
participants. The proposed fees would apply equally to external
distributors of Cboe One Summary that make Derived Data available
through the API Service option offered by the Exchange under the
Program. The continued difference in fees under the Program as compared
to the normal External Distribution fee for Cboe One Summary is
appropriate given that External Subscribers and Users receive Derived
Data, which by definition cannot be readily reverse[hyphen]engineered
to recreate Cboe One Summary data or used to create other data that is
a reasonable facsimile or substitute for Cboe One Summary. The Exchange
therefore believes that the proposed fees neither favor nor penalize
one or more categories of market participants in a manner that would
impose an undue burden on competition. Moreover, a number of national
securities exchanges, including the Exchange and its affiliated Cboe
U.S. equities exchanges offer pricing discounts for Derived Data
today.\19\ These pricing programs reduce the cost of accessing top of
book market information that is used, among other things, to create
derivative instruments rather than to trade U.S. equity securities.
Additionally, the Exchange is proposing to enhance the Program by
reducing the fees for Cboe One Summary Derived Data. The Exchange does
not believe that the proposal would cause any unnecessary or
inappropriate burden on intermarket competition as other exchanges are
free to lower their prices to better compete with the Exchange's
offering. The Exchange believes that the proposed rule change is pro-
competitive as it seeks to offer pricing incentives to customers to
better position the Exchange as it competes to attract additional
market data subscribers.
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    \19\ Supra note 16. See also Cboe EDGX U.S. Equities Exchange
Fee Schedule, Financial Product Distribution Program.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    The Exchange neither solicited nor received comments on the
proposed rule change.

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) of the Act \20\ and paragraph (f) of Rule 19b-4 \21\
thereunder. At any time within 60 days of the filing of the proposed
rule change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
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    \20\ 15 U.S.C. 78s(b)(3)(A).
    \21\ 17 CFR 240.19b-4(f).
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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-CboeEDGX-2022-008 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-CboeEDGX-2022-008. 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-CboeEDGX-2022-008 and should be
submitted on or before April 7, 2022.
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    \22\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\22\
Eduardo Aleman,
Assistant Secretary.
[FR Doc. 2022-05595 Filed 3-16-22; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 83, Number 107 (Monday, June 4, 2018)]
[Notices]
[Pages 25725-25729]
[FR Doc No: 2018-11866]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83339; File No. SR-Phlx-2018-40]

Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing
of Proposed Rule Change To Extend the Applicability of the Floor Broker
Management System and the Snapshot Functionality to Registered Options
Traders and Specialists

May 29, 2018.
    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 May 24, 2018, 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 change the name of the Floor Broker
Management System and to require all members that operate on the
Exchange Floor, including Floor Brokers, Registered Options Traders,
and Specialists, to enter and submit Floor-based trades using that
system.
    The text of the proposed rule change is available on the Exchange's
website at http://nasdaqphlx.cchwallstreet.com/, at the principal
office of the Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to amend its Rules to change the name of its
electronic order entry system, the Floor Broker Management System, to
the Floor Based Management System (``FBMS''). The Exchange also
proposes to extend to the other members that operate on the Exchange
Floor--Registered Options Traders (``ROTs'') \3\ and Specialists \4\--
the same general obligation it imposes upon Floor Brokers regarding
orders on the Floor of the Exchange, which is to enter such orders
using FBMS, rather than by writing paper tickets that memorialize the
orders and then submitting the

matched trade tickets to an Exchange Data Entry Technician (``DET'').
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    \3\ Rule 1014(b) defines a ROT as a ``a regular member or a
foreign currency options participant of the Exchange located on the
trading floor who has received permission from the Exchange to trade
in options for his own account.'' A ROT includes a Streaming Quote
Trader and a Remote Streaming Quote Trader.
    \4\ Rule 1020 describes the functions of a (Options) Specialist.
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    Presently and in most instances, the Exchange requires Floor
Brokers to enter orders using the Floor Broker Management System. The
Floor Broker Management System is an electronic order entry system that
is accessible to Floor Brokers and their employees on the Exchange
floor through desktop and tablet computers. As is described in
Commentary .06 to Rule 1080, FBMS enables Floor Brokers and their
employees to enter, route, and report transactions stemming from
options orders received on the Exchange. It also establishes an
electronic audit trail for options orders represented and executed by
Floor Brokers on the Exchange. Pursuant to Rule 1063(e)(i), Floor
Brokers must enter certain information into the Floor Broker Management
System about each of the orders they receive when they receive them and
prior to representing such orders in the trading crowd.
    At the time when the Exchange introduced FBMS, the Exchange did not
deem it necessary for ROTs or Specialists to use FBMS because the
Exchange specifically intended to use FBMS as an electronic audit trail
for Floor Brokers. Accordingly, ROTs and Specialists presently are
neither required nor permitted to enter or execute orders using the
Floor Broker Management System. Instead, ROTs and Specialists must
record order and related execution details on paper trading tickets.
ROTs and Specialists provide such matched trade tickets to Exchange
DETs who then manually input the information written on the tickets
into the Exchange's electronic trading system, which is included in the
electronic audit trail.
    The manual order entry process that ROTs and Specialists utilize
has become outmoded in comparison to the Floor Broker Management
System. The process of manually recording order and execution
information onto tickets, submitting such tickets to Exchange DETs, and
then the DETs entering the information written on such tickets into the
Exchange's electronic system is less efficient than the entry of order
information into the Floor Broker Management System. Also, manual
trades, often, are reported with a ``Late'' or ``Out Of Sequence''
trade condition due to this manual process. The order entry system used
for trade tickets executed by ROTs and Specialists is also more prone
to human error than is the Floor Broker Management System insofar as
the latter system automatically enforces the Exchange's priority and
trade-through rules, while the former does not. Moreover, unlike the
Floor Broker Management System, the existing process for ROTs and
Specialists does not establish an immediate audit trail for orders due
to the manual handling of orders.
    To address these inefficiencies, mitigate risks, and to improve the
compliance record, the Exchange proposes to modernize the order entry
process for ROTs and Specialists by replacing it with the Floor Broker
Management System, which will be renamed the ``Floor Based Management
System'' or ``FBMS'' to reflect its broader applicability to Floor
Brokers, ROTs and Specialists.
    To effectuate these changes, the Exchange proposes several
amendments and additions to the Exchange's Rules.
    First, the Exchange proposes to amend Rule 1000(f), which sets
forth the means by which options transactions may be executed on the
Exchange, to expressly permit ROTs and Specialists to execute orders
utilizing FBMS.\5\ The proposal would also amend Rule 1000(f) to
prohibit ROTs and Specialists from executing orders in the Exchange's
options trading crowd, with certain exceptions. These exceptions are:
(1) Malfunctions in FBMS or another problem with Exchange systems; (2)
executing orders in the trading crowd pursuant to Rule 1059 (cabinet
trades) and Rule 1079 (FLEX equity, index, and currency options); (3)
multi-leg orders involving more than 15 legs; (4) certain split price
orders; and (5) the use of the Snapshot functionality to provisionally
execute certain categories of trades in the trading crowd. Although the
Exchange established these exemptions with Floor Brokers in mind, they
are also applicable to ROTs and Specialists. For example, malfunctions
in FBMS would impact ROTs and Specialists to the same degree as they
would impact Floor Brokers. Likewise, limitations on the design of FBMS
that prevent it from handling multi-leg orders of more than 15 legs,
cabinet orders, or FLEX orders, or certain split price orders apply
equally to Floor Brokers and to ROTs and Specialists that engage in
such trades.
---------------------------------------------------------------------------

    \5\ The Exchange notes that Rule 1014(g) sets forth the
allocation of responsibility among the parties to a trade to
allocate, match, and time stamp trades executed in open outcry and
to submit matched trade tickets to a DET located on the trading
floor immediately upon execution. The Exchange proposes to amend
Rule 1014(g)(vi) (and Floor Advice F-2) to clarify that this
allocation of responsibility also applies when members execute
trades electronically using FBMS. Thus, in accordance with Rule
1014(g)(vi)(a), if a trade involves a Floor Broker, the Floor Broker
will be responsible for entering trade information into FBMS (or
onto a paper trade ticket, if one of the FBMS exceptions apply),
unless the Floor Broker delegates this responsibility to a
Specialist (and the Specialist accepts this responsibility). In
accordance with Rule 1014(g)(vi)(b), where a trade involves a
Specialist but no Floor Broker is present, the Specialist will be
responsible for entering the trade information into FBMS (or
submitting it using a paper trade ticket). In other cases, where the
trade involves no Floor Brokers or Specialists (for example, where
it involves several ROTs), then the largest on-floor participant
will be responsible for submitting the trade into FBMS (or
submitting it using a paper trade ticket), in accordance with Rule
1014(g)(vi)(c). Finally, as set forth in Rule 1014(g)(vi)(d), where
the trade involves only one seller and buyer and no Floor Broker or
Specialist is involved (e.g., both participants are ROTs), then the
seller will be responsible for entering the trade information into
FBMS (or submitting it using a paper trade ticket), unless either
the seller or the buyer is a Remote Streaming Quote Trader (as
defined in Rule 1014(a)(ii)(B)), in which case the on-floor
participant in the transaction shall do so.
---------------------------------------------------------------------------

    As to Snapshot, the Exchange proposes to authorize ROTs and
Specialists, like Floor Brokers, to use Snapshot to provisionally
execute, in the options trading crowd, multi-leg orders and simple
orders in options on exchange traded funds that are included in the
Options Penny Pilot, subject to the procedures for and the limitations
to the use of Snapshot. These procedures and limitations for Snapshot
are set forth presently in Rule 1063(e)(v), but the Exchange proposes
to move them to a new Section 1069, where they will apply broadly to
``members'' rather than only to Floor Brokers.\6\
---------------------------------------------------------------------------

    \6\ As part of this filing, the Exchange proposes to delete
obsolete language from Rule 1063(e) that announced the initial
implementation date for the Snapshot functionality and described the
manner in which the Exchange would alert members of the availability
of the functionality. This language is obsolete because Snapshot has
been implemented and it is presently available for use by Floor
Brokers.
---------------------------------------------------------------------------

    The Exchange believes that the Snapshot functionality is
appropriate for use by ROTs and Specialists, notwithstanding the fact
that ROTs and Specialists trade on a proprietary basis, rather than on
an agency basis like Floor Brokers. ROTs and Specialists are subject to
the same risk as are Floor Brokers with respect to Floor-based
trading--i.e., the risk that the market will move faster than
participants are able to manually enter and submit paper trade tickets
on trades consummated in open outcry -which Snapshot exists to
mitigate. Furthermore, the Exchange believes that the same parameters
and limitations that the Exchange established for Floor Brokers' use of
Snapshot are appropriate for ROTs and Specialists. The Exchange does
not anticipate that the use of Snapshot by ROTs or Specialists will
pose any increased or unique risks relative to its use by Floor
Brokers. As such, the Exchange proposes to employ the same methods it
utilizes presently to surveil

Floor Brokers' use of Snapshot to also monitor ROTs' and Specialists'
uses of Snapshot.\7\
---------------------------------------------------------------------------

    \7\ For example, the Exchange will monitor ROTs and Specialists
to determine whether they exhibit patterns of using Snapshot
excessively, including in circumstances where the nature of the
orders or movements in the markets for such orders do not reasonably
warrant the use of Snapshot or the full extent of its use. The
Exchange will compare the times of provisional executions in the
crowd that Snapshot captures with the records of such times that
Options Exchange Officials capture to ensure accuracy. The Exchange
will also surveil for patterns of orders subject to Snapshots that
ROTs and Specialists abandon without submitting them to the Trading
System for final execution. The Exchange notes, however, that
Snapshot surveillance that the Exchange performs to protect Floor
Brokers' customers will not be required for ROTs and Specialists
insofar as ROTs and Specialists trade on a proprietary basis and not
on behalf of customers.
---------------------------------------------------------------------------

    The following is an example of how Snapshot would apply to a
hypothetical trade by a ROT. In this example, a ROT enters a multi-leg
order into FBMS to buy 50 MRK Mar 50 calls, buy 50 MRK Mar 53.50 calls,
sell 50 MRK Mar 54 Calls, and sell 50 MRK Mar 52.50 calls for a $3.00
debit and the ROT wants specific prices entered on each leg of this
trade. He enters the trading crowd, lawfully announces the order, and
requests bids and offers from the trading crowd. A Market Maker in the
trading crowd offers to sell 50 contracts at a $3.00 credit while the
National Best Bid or Offer is $2.75 bid and $3.30 offer. At this point,
the ROT will provisionally execute the trade orally in the trading
crowd and contemporaneously clicking the Snapshot button. Within the 30
second time frame in which the Snapshot is active, the ROT will open
the Complex Calculator, enter his specific prices and submit the trade
to the Trading System using FBMS for potential execution.
    Second, the Exchange proposes to establish an analogue for ROTs and
Specialists to Rule 1063(e)(i), which sets forth the responsibilities
of Floor Brokers to enter certain order information into FBMS. Similar
to Rule 1063(e)(i), new Rule 1081 will require ROTs and Specialists,
prior to the negotiation \8\ of such an order in the trading crowd, to
enter certain information into FBMS, which will include the following:
(i) The order type (i.e., market maker \9\) and order receipt time;
(ii) the option symbol; (iii) buy, sell, cross or cancel; (iv) call,
put, or complex (i.e., spread, straddle), or contingency order (as
described in Rule 1066); (v) number of contracts; (vi) limit price or
market order or, in the case of a multi-leg order, net debit or credit,
if applicable; and (vii) whether the transaction is to open or close a
position, as applicable (collectively, the ``required
information'').\10\ It provides that a Registered Options Trader or
Specialist must enter complete alpha/numeric identification assigned by
the Exchange for all orders entered.\11\ It also provides that
additional information with respect to an order shall be inputted into
FBMS contemporaneously upon receipt, which may occur after the
negotiation and execution of the order. Such information might include
badge information for a ROT that trades with another ROT. In the event
that ROTs and Specialists execute orders in the trading crowd pursuant
to Rule 1000(f)(ii),\12\ the Rule requires ROTs and Specialists to
record the required information on trade tickets, to stamp each ticket
with the time of entry on the trading floor before negotiating an order
for execution, to stamp each ticket again upon execution of an order,
and to ensure that the required information that is recorded on such
trade tickets is entered into the Exchange's electronic Trading System
by DETs for inclusion in the electronic audit trail.\13\
---------------------------------------------------------------------------

    \8\ Whereas Rule 1063(e)(i) provides that a Floor Broker must
enter information into FBMS ``contemporaneously upon receipt of an
order'' and prior to its ``representation'' of a trade on behalf of
a client, proposed Rule 1081 (and proposed Floor Advices A-2 and B-
7) will provide that a ROT or Specialist must enter information into
FBMS ``prior to'' their ``negotiation'' of a trade. The Exchange
proposes to use the term ``negotiation'' throughout the proposed
Rules in lieu of ``representation'' to reflect the fact that ROTs
and Specialists trade on a proprietary basis and do not represent
orders on behalf of others. The Exchange also proposes to omit the
requirement that ROTs and Specialists enter information into FBMS
``contemporaneously upon receipt of an order'' because ROTs and
Specialists trade on a proprietary basis and do not receive orders.
    \9\ Rule 1063(e)(i) presently requires a Floor Broker to enter
into FBMS information about whether an order is customer, firm,
broker-dealer, or professional in nature. The Exchange proposes to
add ``market maker'' as another potential order type, given that
Floor Brokers may represent orders on behalf of market makers.
Proposed Rule 1081 and Proposed Floor Advices A-2 and B-7 also will
provide for ROTs and Specialists to enter market maker orders in
FBMS. However, unlike Rule 1063(e)(1), proposed Rule 1081 and
proposed Floor Advices A-2 and B-7 will only permit ROTs and
Specialists to enter market maker orders into FBMS because they will
not enter trades on behalf of customers, firms, broker-dealers, or
professional customers.
    \10\ Proposed Rule 1081(a) omits the requirement in Rule 1063(e)
that information entered into FBMS include the Options Clearing
Corporation clearing number of the broker-dealer that submitted an
order. Proposed Rule 1081(a) omits this requirement because it does
not apply to ROTs and Specialists that will be trading on a
proprietary basis. Proposed Floor Advices A-2 and B-7 also omit this
requirement.
    \11\ Unlike the corresponding provision of Rule 1063(e), this
provision omits the phrase ``on behalf of Exchange Registered
Options Traders'' after requiring entry of ``complete alpha/numeric
identification assigned by the Exchange for all orders.'' The
Exchange proposes this omission because a ROT or Specialist will, in
all instances in which they utilize FBMS, need to enter the alpha-
numeric information that the Exchange has assigned to them as well
as, perhaps, alpha/numeric information that the Exchange has
assigned any other ROT or Specialist with which they are trading.
    \12\ The Exchange also proposes to amend corresponding language
in Rule 1063(e)(ii) that states presently that Floor Brokers must
record information on trade tickets ``[i]n the event of a
malfunction in the FBMS or in the event that the Exchange determines
that Floor Brokers are permitted to execute orders in the Exchange's
options trading crowd for a specific reason pursuant to Rule
1000(f)(iii).'' The proposed amendment will update and clarify this
provision by stating that a Floor Broker must record information on
trade tickets ``[i]n the event that Floor Brokers execute orders in
the Exchange's options trading crowd pursuant to Rule 1000(f)(ii).''
The proposed amended language is more accurate than the existing
language in that most of the exceptions to the use of FBMS set forth
in Rule 1000(f) apply automatically and do not require the prior
permission of the Exchange. The Exchange also proposes to make an
amendment to similar language in Floor Advice C-2.
    \13\ Simultaneously with this proposal, the Exchange proposes to
amend the last sentences of paragraphs (i) and (ii) of Rule 1063(e)
to address unintended inconsistencies between them and to clarify as
well that when Floor Brokers must record trade information on paper
trade tickets, they or their employees must ensure that the recorded
information is entered into the Exchange's electronic Trading System
by DETs for inclusion in the electronic audit trail. Presently, Rule
1063(e)(i) states that Floor Brokers must enter the information into
the Trading System and ensure that it is submitted for inclusion in
the electronic audit trail, but DETs are responsible for entering
this information into the Trading System. Meanwhile, Rule
1063(e)(ii) incorrectly suggests that either Floor Brokers or DETs
may enter the information recorded on trade tickets into the Trading
System. The Exchange's proposals clarify, correct, and harmonize
these two provisions. The Exchange also proposes to apply these
changes to Floor Advice C-2 and include it in proposed Rule 1081 and
proposed Floor Advices A-2 and B-7.
---------------------------------------------------------------------------

    Moreover, proposed Rule 1081(d) states that when ROTs and
Specialists submit orders for execution through FBMS, the order will be
executed based on market conditions that exist at the time of execution
\14\ and otherwise in accordance with the Exchange's Rules. If the
order cannot be executed, the Trading System will attempt to execute
the order a number of times for a period of no more than one second,
which period shall be established by the Exchange and announced by
Options Trader Alert, after which it will be returned to the ROT or
Specialist on the FBMS. Lastly, it states that the Registered Options
Trader or Specialist may resubmit the returned order for execution, as
long as the quotes that comprise the order have not been

withdrawn.\15\ Registered Options Traders and Specialists are
responsible for handling all FBMS orders in accordance with Exchange
priority and trade-through rules, including Rules 1014, 1033 and 1084.
---------------------------------------------------------------------------

    \14\ Simultaneously with this proposal, the Exchange proposes to
make a change to Rule 1063(e)(iv) to clarify that when a Floor
Broker submits an order for execution through FBMS, the order will
be executed based on market conditions at the time of execution.
    \15\ Proposed Rule 1081(d) omits language from Rule 1063(e)(iv)
stating that a Floor Broker may re-submit a returned order, provided
that the quotes/orders that comprise the cross have not been
withdrawn. The Exchange proposes to omit this language from proposed
Rule 1081(d) because ROTs and Specialists will not engage in
crosses. Similarly, proposed Rule 1081(d) differs from Rule
1063(e)(iv) in that proposed Rule 1081(d) excludes language which
states that FBMS is designed to execute ``two-sided'' orders. ROTs
and Specialists act for their own accounts, and not for others, such
that they will not use FBMS to execute two-sided orders.
---------------------------------------------------------------------------

    Additionally, and as discussed earlier, proposed Rule 1081 will
permit ROTs and Specialists to utilize the Snapshot feature of FBMS in
accordance with the procedures and limitations set forth in proposed
Rule 1069. Proposed Rule 1081 also incorporates and adapts Commentary
.01 of Rule 1063, and will provide that a ROT or Specialist that wishes
to place a limit order on the limit order book cannot submit such a
limit order using a paper ticket; instead, the ROT or Specialist must
submit the limit order electronically through the FBMS (unless an
exception to the use of FBMS applies).\16\
---------------------------------------------------------------------------

    \16\ The Exchange notes that it does not propose to incorporate
Commentary .02 to Rule 1063, which requires Floor Brokers to make
reasonable efforts to ascertain when orders entrusted to them are
for the account of a customer or a broker-dealer. This provision
does not apply to ROTs or Specialists, which do not act on an agency
basis.
---------------------------------------------------------------------------

    The Exchange notes that, as set forth in proposed Rule 1081(a), it
anticipates that it will make FBMS available to ROTs and Specialists
during the Second Quarter of 2018. To facilitate the transition to
FBMS, the Exchange will not require ROTs or Specialists to utilize FBMS
until one month after the date on which the Commission approves the
Exchange's proposal. The Exchange will notify Members via an Options
Trader Alert, to be posted on the Exchange's website, at least seven
calendar days prior to the date when FBMS will be available for use by
ROTs and Specialists. The alert will also contain the mandatory start
date.
    Next, the Exchange proposes to amend Rule 1066, which list certain
order types that are eligible for entry on FBMS, to clarify that the
Rule permits all members operating on the Exchange Floor, including
Floor Brokers, ROTs, and Specialists, to enter such orders on FBMS.
    The Exchange proposes to amend Commentary .06 to Rule 1080, which
describes the functions of FBMS, to clarify that it applies to all
members that operate on the Exchange Floor, including Floor Brokers,
ROTs, and Specialists. It also proposes to amend a cross-reference in
the Rules to a description of the features of FBMS to include a cross-
reference to proposed Rule 1081.\17\
---------------------------------------------------------------------------

    \17\ The Exchange proposes to correct a typographical error that
appears in this Commentary. The word ``trial'' in the phrase ``audit
trial'' will be changed to ``trail.''
---------------------------------------------------------------------------

    The Exchange proposes to amend its Option Floor Procedure Advices
and Order & Decorum Regulations (``Advices''), which presently govern
the use of FBMS only by Floor Brokers, so that they also cover the use
of FBMS by ROTs and Specialists as well. Specifically, the proposal
establishes new Advices A-2 and B-7, which largely replicate Advice C-2
(governing use by Floor Brokers of FBMS) for Specialists and ROTs,
respectively. The proposal also amends certain Advices to extend their
references to Floor Brokers to also include ROTs and Specialists,
including Advice A-2 (All-or-None Option Orders), Advice F-2
(Allocation, Time Stamping, Matching and Access to Matched Trades) \18\
and F-4 (Orders Executed as Spreads, Straddles, Combinations or
Synthetics and other Order Ticket Marketing Requirements).
---------------------------------------------------------------------------

    \18\ The Exchange proposes to amend Advice F-2 to include the
same clarification it proposes to make to Rule 1014(g)(vi).
---------------------------------------------------------------------------

    Lastly, the Exchange also proposes to update existing references in
its Rulebook to the ``Floor Broker Management System'' so that they
refer instead to the new name of the system, the ``Floor Based
Management System.'' In addition to the Rules mentioned above, these
conforming changes affect Rules 911, 1063, 1064, and 1098, and Advices
A-9, B-6, B-8, C-2, and C-3.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\19\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\20\ in particular, in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest.
---------------------------------------------------------------------------

    \19\ 15 U.S.C. 78f(b).
    \20\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    In particular, by providing for a uniform system of order entry on
the Exchange floor, the Exchange's proposal to extend FBMS to ROTs and
Specialists will help ensure fair and equal treatment for all members
that operate on the Exchange floor. It will also serve the interests of
investors and the public to establish an electronic order entry system
for ROTs and Specialists that is more accurate, less prone to error,
less time intensive (thereby helping to ensure customer trade
priority), and that establishes an immediately available audit trail.
    The Exchange also believes that it is consistent with the Act for
ROTs and Specialists to utilize FBMS notwithstanding the fact that it
designed FBMS for use by Floor Brokers, and to do so subject to the
same general conditions, requirements, and exceptions which apply
presently to Floor Brokers. The Exchange initially designed FBMS for
use by Floor Brokers because the Exchange sought to establish an
electronic audit trail mechanism for Floor Brokers, in particular;
however, the Exchange never intended to specifically exclude ROTs and
Specialists from FBMS and it perceives no policy basis for doing so
now. Moreover, to the extent that the Exchange proposes to make FBMS
available to all Floor participants, it perceives no basis for doing so
on anything but the same terms. That is, the Exchange anticipates no
unique risks associated with the use of FBMS by ROTs and Specialists,
and it believes that the exceptions to FBMS that exist in Rule 1000(f)
are each applicable to ROTs and Specialists. That said, the Exchange
proposes minor alterations to the Rules that presently govern the use
of FBMS by Floor Brokers to, among other things, account for the fact
that ROTs and Specialists negotiate orders on the Floor on their own
behalf and do not represent orders on the Floor on behalf of others.
    Similarly, the Exchange believes that it is consistent with the Act
to extend the availability of the Snapshot functionality of FBMS to
ROTs and Specialists. The Exchange's rationale for providing Snapshot
to Floor Brokers is equally applicable to ROTs and Specialists. ROTs
and Specialists are subject to the same risk as are Floor Brokers when
trading in open outcry on the Exchange Floor. This risk, which arises
from the manual processes inherent in Floor-based trading, is that the
Exchange's Trading System will reject a trade due to a change in market
conditions that occurs between the time when the parties negotiate a
lawful and valid trade on the Floor, enter the trade information into
FBMS, and submit it to the Trading System. The use of Snapshot by ROTs
and Specialists will promote just and equitable principles of trade and
serve the interests of investors and the public by mitigating this risk
and by increasing the likelihood that ROTs and Specialists will be able
to

execute their orders and do so in line with their expectations and
needs. Again, the Exchange perceives no unique risks or concerns
associated with the use of Snapshot by ROTs or Specialists that would
necessitate proposing any special changes to or restrictions on their
use of the Snapshot functionality.

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.
    The Exchange's proposal to extend FBMS to ROTs and Specialists is
intended to modernize and otherwise improve the Exchange's internal
order entry process; it is neither intended nor expected to materially
affect the competitive position of the Exchange vis-a-vis other
exchanges. If anything, this proposal would improve the options floor
trading environment for ROTs and Specialists, thereby making the
Exchange a more attractive venue for floor trading.
    The Exchange also does not believe that its proposal to extend the
availability of the Snapshot functionality to ROTs and Specialists will
burden competition. To the contrary, the Exchange intends for this
proposal to make its options trading Floor more competitive with other
floor trading venues that have less stringent anti-trade-through
procedures as compared to the Exchange. The proposal is also intended
to make the Floor more competitive with electronic options trading
venues that feature near-instantaneous and autonomous execution
processes which eliminate the risks that Snapshot exists to mitigate.
    The Exchange does not anticipate that its proposals will impact
intra-market competition because the proposals will simply extend the
benefits of FBMS and Snapshot to all categories of its Floor
participants.

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

    No written comments were either solicited or received.

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

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

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-Phlx-2018-40 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-Phlx-2018-40. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (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-2018-40 and should be submitted on
or before June 25, 2018.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
---------------------------------------------------------------------------

    \21\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-11866 Filed 6-1-18; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 84, Number 39 (Wednesday, February 27, 2019)]
[Rules and Regulations]
[Pages 6338-6339]
[FR Doc No: 2019-03356]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[EPA-R07-OAR-2018-0828; FRL 9989-43-Region 7]

Approval of Operating Permits Program; Kansas; Reporting Emission
Data, Emission Fees and Process Information

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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

SUMMARY: The Environmental Protection Agency (EPA) is taking final
action to approve revisions to the Operating Permits Program (OPP) for
the State of Kansas. This final action will amend the Kansas rules to
reorganize, clarify, and update the Class I emission fee, application
fee, and emissions inventory regulations and ensure that Kansas's OPP
is adequately funded. Approval of these revisions ensures consistency
between the State and federally-approved rules and does not impact air
quality.

DATES: This final rule is effective on March 29, 2019.

ADDRESSES: EPA has established a docket for this action under Docket ID
No. EPA-R07-OAR-2018-0828. All documents in the docket are listed on
the https://www.regulations.gov website. Although listed in the index,
some information is not publicly available, i.e., CBI or other
information whose disclosure is restricted by statute. Certain other
material, such as copyrighted material, is not placed on the internet
and will be publicly available only in hard copy form. Publicly
available docket materials are available through https://www.regulations.gov or please contact the person identified in the FOR
FURTHER INFORMATION CONTACT section for additional information.

FOR FURTHER INFORMATION CONTACT: Deborah Bredehoft, Environmental
Protection Agency, Air Planning and Development Branch, 11201 Renner
Boulevard, Lenexa, Kansas 66219 at<PHONE_NUMBER>, or by email at
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Throughout this document ``we,'' ``us,'' and
``our'' refer to EPA.

Table of Contents

I. Background
II. Have the requirements for approval of a part 70 revision been
met?
III. What action is EPA taking?
IV. Statutory and Executive Order Reviews

I. Background

    On December 19, 2018 (83 FR 65115), EPA published a notice of
proposed rulemaking (NPR) for the State of Kansas. In the NPR, EPA
proposed approval of revisions to the Kansas OPP. The revisions were
submitted by the State of Kansas on January 22, 2018. Revisions to the
program include revoking Kansas Administrative Regulation (K.A.R.) 28-
19-202; adding new language to K.A.R. 28-19-517 which parallels
language in the revoked K.A.R. 28-19-202; increasing the annual
emission fee from $37 dollars per ton to $53 dollars per ton;
increasing all application fees in K.A.R. 28-19-516; establishing a
baseline emission fee; and adding additional clarifications to the
Program to address fees, refunds, electronic submittal, and who is
required to submit an annual emissions inventory. A detailed discussion
of Kansas's OPP submission and EPA's rationale for approving the OPP
submission were provided in the NPR and the associated Technical
Support Document in the docket for this rulemaking and will not be
restated here. No comments were received regarding the NPR.

II. Have the requirements for approval of a part 70 revision been met?

    The state provided a public comment period for this OPP revision
from September 7, 2017, to November 15, 2017, and received comments. In
response to the comments, Kansas revised the rule prior to submitting
to the EPA. The revisions are consistent with applicable EPA
requirements in title V of the CAA and 40 CFR part 70.

III. What action is EPA taking?

    The EPA is taking final action to approve revisions to the Kansas
OPP by approving the State's request to revoke K.A.R. 28-19-202, Annual
emissions fees; and to amend K.A.R. 28-19-516, Class I operating
permits, application fees; and K.A.R. 28-19-517, Class I operating
permits, annual emissions inventory and fees. Approval of these
revisions will ensure consistency between the state and federally-
approved rules. EPA has determined that these changes will not
adversely impact air emissions.

IV. Statutory and Executive Order Reviews

    This final action merely approves state law as meeting Federal
requirements and does not impose additional requirements beyond those
imposed by state law. For that reason, this final action:
     Is not a significant regulatory action subject to review
by the Office of Management and Budget under Executive Orders 12866 (58
FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
     Is not an Executive Order 13771 (82 FR 9339, February 2,
2017) regulatory action because Title V approvals are exempted under
Executive Order 12866.
     Does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based
on health or safety risks subject to Executive Order 13045 (62 FR
19885, April 23, 1997);
     Is not a significant regulatory action subject to
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of the National Technology
Transfer and Advancement Act (NTTA) because this rulemaking does not
involve technical standards; and
     Does not provide EPA with the discretionary authority to
address, as appropriate, disproportionate human health or environmental
effects, using practicable and legally permissible methods, under
Executive Order 12898 (59 FR 7629, February 16, 1994).
    In addition, this approval of the revision to Kansas's Title V
Operating Permit Program does not have tribal implications and will not
impose substantial direct costs on tribal governments or preempt tribal
law as specified by Executive Order 13175 (65 FR 67249, November 9,
2000).
    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. EPA will submit a

report containing this action and other required information to the
U.S. Senate, the U.S. House of Representatives, and the Comptroller
General of the United States prior to publication of the rule in the
Federal Register. A major rule cannot take effect until 60 days after
it is published in the Federal Register. This action is not a ``major
rule'' as defined by 5 U.S.C. 804(2).
    Under section 307(b)(1) of the Clean Air Act, petitions for
judicial review of this action must be filed in the United States Court
of Appeals for the appropriate circuit by April 29, 2019. Filing a
petition for reconsideration by the Administrator of this final rule
does not affect the finality of this action for the purposes of
judicial review nor does it extend the time within which a petition for
judicial review may be filed, and shall not postpone the effectiveness
of such rule or action. This action may not be challenged later in
proceedings to enforce its requirements. (See section 307(b)(2).)

List of Subjects in 40 CFR Part 70

    Administrative practice and procedure, Air pollution control,
Intergovernmental relations, Operating permits, Reporting and
recordkeeping requirements.

    Dated: February 22, 2019.
James Gulliford,
Regional Administrator, Region 7.

    For the reasons stated in the preamble, EPA amends 40 CFR part 70
as set forth below:

PART 70--STATE OPERATING PERMIT PROGRAMS

0
1. The authority citation for part 70 continues to read as follows:

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

0
2. Amend appendix A to part 70 by adding paragraph (g) under Kansas to
read as follows:

Appendix A to Part 70--Approval Status of State and Local Operating
Permits Programs

* * * * *

Kansas

* * * * *
    (g) The Kansas Department of Health and Environment submitted
revisions to Kansas rules K.A.R. 28-19-202, K.A.R. 28-19-516, and
K.A.R. 28-19-517, on January 22, 2018. The state effective date is
January 5, 2018. This revision is effective April 29, 2019.
* * * * *
[FR Doc. 2019-03356 Filed 2-26-19; 8:45 am]
 BILLING CODE 6560-50-P