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Federal Register / Vol. 86, No. 26 / Wednesday, February 10, 2021 / Notices or cancel back an order after exhausting its potential to trade upon entry.
The final sentence of Options 3, Section 6aiiB2givA4,6 which is being removed, is no longer relevant in this scenario as the ten second period does not exist.
The Exchange proposes to amend current Options 3, Section 6aiiB4a, which states, If there are no offers both on the Exchange and on away markets in the affected series, Market Orders to buy in the affected series will be cancelled immediately, and an electronic report of such cancellation will be transmitted to the sender. The Exchange proposes to replace cancelled immediately with the term rejected to conform the rule text to conform to other uses of the word rejected in the Rulebook. The System would reject and not accept the order in this case.
Finally, the Exchange proposes to amend Supplementary Material .02 to Options 3, Section 6 which states, In the event that an SQT, RSQT, and/or Lead Market Makers electronically submitted quotations interact with the electronically submitted quotations of other SQTs, RSQTs and/or the Lead Market Maker, resulting in the dissemination of a locked quotation e.g., $1.00 bid1.00 offer, the locked quotations will automatically execute against each other in accordance with the allocation algorithm set forth in Options 3, Section 10. The phrase, resulting in the dissemination of a locked quotation e.g., $1.00 bid1.00
offer is out of date as under the current Options Order Protection and Locked/Crossed Market Plan,7 the Exchange would not disseminate a locked quotation. Rather, the Exchange would reprice its quote as described within Options 3, Section 4b6. As a result, the Exchange proposes to delete this rule text. The Exchange believes that this rule text existed prior to the Locked and Crossed Market Plan and was not updated when the new plan came into existence.
Options 3, Section 7
Similar to the changes proposed within Options 2, Section 6, the Exchange proposes to replace the term Registered Options Traders or 6 During this up to ten second period, the System will disseminate, on the opposite side of the market from remaining unexecuted contracts: i A nonfirm bid for the price and size of the next available bids on the Exchange if the remaining size is a seller, or ii a non-firm offer for the price and size of the next available offers on the Exchange if the remaining size is a buyer.
7 See Securities Exchange Act Release No. 60405
July 30, 2009, 74 FR 39362 August 6, 2009 File No. 4546.

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ROTs with Market Makers and replace Specialists with Lead Market Makers within Options 3, Section 7 to conform to the remainder of the Rulebook.8
The Exchange proposes to amend Allor-None Orders within Options 3, Section 7b5 to add more language to the description of an All-or-None Order to bring greater transparency to this order type. Today, the Exchange provides that All-or-None Orders are non-displayed and non-routable. To expand on this notion, the Exchange proposes to amend the sentence to provide, All-or-None Orders are nonroutable. The Exchange does not disseminate bids or offers of All-orNone Orders to OPRA and the Top of PHLX Options feed, however All-orNone Orders are displayed in the PHLX
Orders 9 and PHLX Depth of Book 10
feed. This additional rule text will make clear that these order types are not disseminated on OPRA or the Top of PHLX Options feed, however All-orNone Orders are displayed in the PHLX
Orders and PHLX Depth of Book feed.11
Further, the Exchange proposes to add, If an All-or-None Order contingency cannot be met, the All-or-None Order would be bypassed until such time as the contingency could be met. This language is intended to make clear that an All-or-None Order will not cause other orders to queue until such time as the All-or-None Order may execute.
Rather, the All-or-None Order will rest on the Order Book until the contingency 8 See
note 3 above.
Phlx Options 3, Section 23a2. PHLX
Orders is a real-time full Limit Order book data feed that provides pricing information for orders on the PHLX Limit Order book. PHLX Orders is currently provided as part of the TOPO Plus Orders data product. PHLX Orders provides real-time information to enable users to keep track of the single order books, single and Complex Orders, and Complex Order Live Auction COLA for all symbols listed on Phlx. The data provided for each options series includes the symbols series and underlying security, put or call indicator, expiration date, the strike price of the series, leg information on complex strategies and whether the option series is available for trading on Phlx and identifies if the series is available for closing transactions only.
10 See Phlx Options 3, Section 23a3. PHLX
Depth of Market is a data product that provides: i Order and quotation information for individual quotes and orders on the PHLX book; ii last sale information for trades executed on Phlx; iii auction; and iv an Imbalance Message which includes the symbol, side of the market, size of matched contracts, size of the imbalance, and price of the affected series. The data provided for each options series includes the symbols series and underlying security, put or call indicator, expiration date, the strike price of the series, and whether the option series is available for trading on Phlx and identifies if the series is available for closing transactions only.
11 The Exchange discusses these data feeds in more detail below.
9 See
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will be met, at which time that Public Customer All-or-None Order will have priority over other orders on the Book.
The Exchange believes the addition of this rule text will bring greater transparency to the current System handling of All-or-None Orders.
The Exchange proposes to amend Options 3, Section 7c3, Opening Only, to correct incorrect rule text, and also add a clarifying sentence. Today, Options 3, Section 7c3 provides, An Opening Only OPG order is entered with a Time in Force TIF of OPG.
This order can only be executed in the Opening Process pursuant to Options 3, Section 8. This order type is not subject to any protections listed in Options 3, Section 15, except for Automated Quotation Adjustments. The Exchange proposes to remove the phrase except for Automated Quotation Adjustments because, today, an OPG order is not subject to Automated Quotation Adjustments. As provided for within Options 3, Section 15c, Automated Quotation Adjustments protections are available to Market Makers and Lead Market Makers only. Any participant may enter an Opening Only Order.
Typically Market Makers and Lead Market Makers submit Valid Width Quotes,12 as provided for within Options 3, Section 8, during the Opening Process. Further, an Opening Sweep,13 which is utilized by Market 12 A Valid Width Quote is a two-sided electronic quotation submitted by a Phlx Electronic Market Maker that meets the following requirements:
Options on equities and index options bidding and/
or offering so as to create differences of no more than $.25 between the bid and the offer for each option contract for which the prevailing bid is less than $2; no more than $.40 where the prevailing bid is $2 or more but less than $5; no more than $.50
where the prevailing bid is $5 or more but less than $10; no more than $.80 where the prevailing bid is $10 or more but less than $20; and no more than $1 where the prevailing bid is $20 or more, provided that, in the case of equity options, the bid/
ask differentials stated above shall not apply to inthe-money series where the market for the underlying security is wider than the differentials set forth above. For such series, the bid/ask differentials may be as wide as the quotation for the underlying security on the primary market, or its decimal equivalent rounded down to the nearest minimum increment. The Exchange may establish differences other than the above for one or more series or classes of options. See Options 3, Section 8aix.
13 An Opening Sweep is a one-sided order entered by a Specialist or ROT through SQF for execution against eligible interest in the System during the Opening Process. This order type is not subject to any protections listed in Options 3, Section 15, except for Automated Quotation Adjustments. The Opening Sweep will only participate in the Opening Process pursuant to Options 3, Section 8
and will be cancelled upon the open if not executed. See Options 3, Section 7b6. This definition is being amended herein to update the terms Specialist and ROT to Lead Market Maker and Market Maker.

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