Notice2024-00177
Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Exchange's Schedule of Fees at Equity 7, Section 3
Primary source
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Published
January 9, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 6 (Tuesday, January 9, 2024)</title>
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[Federal Register Volume 89, Number 6 (Tuesday, January 9, 2024)]
[Notices]
[Pages 1136-1138]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-00177]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99268; File No. SR-Phlx-2023-58]
Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend the
Exchange's Schedule of Fees at Equity 7, Section 3
January 3, 2024.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 21, 2023, Nasdaq PHLX LLC (``PHLX'' or ``Exchange'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II, and
[[Page 1137]]
III, below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the Exchange's schedule of fees at
Equity 7, Section 3.
The text of the proposed rule change is available on the Exchange's
website at <a href="https://listingcenter.nasdaq.com/rulebook/phlx/rules">https://listingcenter.nasdaq.com/rulebook/phlx/rules</a>, 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
On December 13, 2023, PHLX experienced a technical issue with its
RASH order handling system. The issue involved a duplication of an
internal order identification numbers, which impacted a subset of
orders for some members, including unacknowledged orders, an inability
to cancel open orders, intermittent port disconnects, missing execution
reports, and mismatched execution reports.
Because PHLX's fee and rebate schedule in Equity 7, Section 3
provide that member organizations may achieve better pricing if they
achieve certain specified volumes of activity during a given month (as
measured by Consolidated Volume (defined below) and Average Daily
Volume (``ADV'')), the RASH issue may have impacted the ability of
affected member organizations to reach the required volumes. By way of
illustration, a member with shares of liquidity provided in all
securities through one of its market participant identifiers
(``MPIDs'') that represent more than 0.15% of the total consolidated
volume reported to all consolidated transaction reporting plans by all
exchanges and trade reporting facilities in equity securities of at
least one round lot (``Consolidated Volume'') during a month receives a
rebate of $0.0033 per share executed with respect to liquidity that it
provides during the month through displayed orders. By contrast, member
organizations providing lower volumes of liquidity receive lower
rebates ranging from $0.0032-$0.0020 per share executed. If a member
organization had provided liquidity that represented slightly in excess
of 0.15% of Consolidated Volume on each day of December 2023 other than
December 13, but was prevented from reaching comparable levels on that
date due to the RASH issue, it is possible that the rebate it would
ultimately earn for the entire month would be lower than would
otherwise have been the case.
Accordingly, in order to ensure that fees and rebates are not
adversely impacted by the RASH issue, PHLX proposes to exclude December
13, 2023 from calculations of Consolidated Volume and ADV made under
Equity 7, Section 3 if doing so would allow a member organization to
achieve more favorable pricing than would be the case if the day were
included. Thus, member organizations that are unaffected by the RASH
issue would not have the day arbitrarily excluded from their
calculations. PHLX will perform all calculations needed to implement
the change.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\3\ in general, and furthers the objectives of Sections
6(b)(4) and 6(b)(5) of the Act,\4\ in particular, in that it provides
for the equitable allocation of reasonable dues, fees and other charges
among member organizations and issuers and other persons using any
facility, and is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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\3\ 15 U.S.C. 78f(b).
\4\ 15 U.S.C. 78f(b)(4) and (5).
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PHLX believes that the proposed change is reasonable because it
will allow member organizations to receive December 2023 pricing that
is based on either the exclusion, or the inclusion, of December 13,
whichever is more favorable to the member organization. The proposed
change is equitable and not unfairly discriminatory, because it will
ensure that the fees and rebates applicable to member organizations
that were subject to the RASH issue are not adversely affected by the
issue.
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 change will help to ensure
that member organizations that were affected by the RASH issue are not
required to pay higher fees, or receive lower rebates, during December
2023 than would otherwise be the case. Accordingly, PHLX believes that
the proposed changes will protect member organizations from incurring
unanticipated charges.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\5\
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\5\ 15 U.S.C. 78s(b)(3)(A)(ii).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is: (i)
necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#3240475e571f515d5f5f575c4641724157511c555d44"><span class="__cf_email__" data-cfemail="7301061f165e101c1e1e161d0700330016105d141c05">[email protected]</span></a>. Please include
file number SR-Phlx-2023-58 on the subject line.
Paper Comments
<bullet> Send paper comments in triplicate to Secretary, Securities
and Exchange
[[Page 1138]]
Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-Phlx-2023-58. 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 (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). 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
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-Phlx-2023-58 and should be
submitted on or before January 30, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\6\
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\6\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-00177 Filed 1-8-24; 8:45 am]
BILLING CODE 8011-01-P
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