[Federal Register Volume 89, Number 6 (Tuesday, January 9, 2024)]
[Notices]
[Pages 1136-1138]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[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 https://listingcenter.nasdaq.com/rulebook/phlx/rules, at the 
principal office of the Exchange, and at the Commission's Public 
Reference Room.

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

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

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

1. Purpose
    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

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-Phlx-2023-58 on the subject line.

Paper Comments

     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 (https://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 
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