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Federal Register / Vol. 86, No. 26 / Wednesday, February 10, 2021 / Notices
Equity 2
The Exchange proposes to relocate the following rules into Equity 2 which is titled Equity Market Participants. The Exchange proposes to instead title this section Market Participants to conform to Nasdaqs Rulebook Structure.9
Shell rule Section Section Section Section
1 2
3 4

Section 5
Section 6
Section 7
Section 8
Section 9
Section 10
Section 11
Section 12
Section 13
Section 14
Section 15
Section 16
Section 17
Section 18
Section 19
Section 20

Current rule 3201. Scope.
3203. Definitions.
Reserved.
3212. Registration as a Market Maker.
3213. Market Maker Obligations.
3214. Stabilizing Bids.
3216. Reports.
3217. Normal Business Hours.
3218. Clearance and Settlement.
3219. Withdrawal of Quotations.
3220. Voluntary Termination of Registration.
3221. Suspension and Termination of Quotations and Order Entry.
3222. Termination of PSX
Service.
3223. Alternative Trading Systems.
3224. Penalty Bids and Syndicate Covering Transactions.
3225. Obligation to Provide Information.
3226. Limitation of Liability.
3227. Obligation to Honor System Trades.
3228. Compliance with Rules and Registration Requirements.
3231. Customer Disclosures.

The Exchange is amending the first sentence of new Equity 2, Section 1 to provide, Unless otherwise specified, the Equity Rules apply only to the quoting and trading of System Securities via PSX. Current Rule 3201 references the 3200 Series Requirements for PSX
Participants. However all equity rules apply to equities trading on PSX.
Broadening the language of Equity 2, Section 1 is consistent with the manner in which equities rules are applied today with respect to trading and other aspects of conducting business on PSX.
The Exchange also proposes to amend Equity 2, Section 2a to provide, For purposes of the Equity Rules, unless the context requires otherwise:. The original reference was to the 3000
Series, although the definitions which follow relate to federal rules which would apply to all Equity Rules. The 9 See
note 5 above.

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Exchange proposes to amend the current text to apply the relocated definitions to the entire section related to the equity market to distinguish these rules from the General Rules and Options Rules.
The Exchange also proposes to update a rule citation within proposed Equity 2, Section 10, Withdrawal of Quotations, at paragraph d. This paragraph d which discusses withdrawal status, relates to quotations, and provides, Excused withdrawal status may be granted to a PSX Market Maker that fails to maintain a clearing arrangement with a registered clearing agency or with a member of such an agency and is withdrawn from participation in the trade reporting service of PSX, thereby terminating its registration as a PSX Market Maker; provided, however, that if the Exchange finds that the PSX Market Makers failure to maintain a clearing arrangement is voluntary, the withdrawal of quotations will be considered voluntary and unexcused pursuant to Rule 3220 and the Rule 3300
Series governing PSX. PSX Market Makers that fail to maintain a clearing relationship will have their PSX system status set to suspend and be thereby prevented from entering, or executing against, any quotes/
orders in the system.

The Exchange proposes to replace Rule 3220 Voluntary Termination of Registration with its relocated rule reference, Equity 2, Section 11. The Exchange proposes to replace the Rule 3300 Series rules reference with Equity 4. The Rule 3300 Series was relocated to Equity 4 with the exception of the Equity 6, Section 3, Phlx Kill Switch.
The Phlx Kill Switchs relocation to Equity 6 does not impact its reference within this rule which described a PSX
Market Makers voluntary failure to maintain a clearing arrangement and its impact on the withdrawal of quotations.
Equity 3
The Exchange proposes to reserve Equity 3, currently titled Equity Trading Rules.
Equity 4
The Exchange proposes to re-title Equity 4, currently titled Limit UpLimit Down, to Equity Trading Rules. The Exchange proposes to relocate the following rules into Equity 4 and retain the current rule numbering:
Current rule
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3306. Entry and Display of Quotes and Orders.
3307. Processing of Orders.
3309. Trade Reporting.
3310. Anonymity.
3311. Issuer Corporate Actions Related to a Dividend, Payment or Distribution.
3312. Clearly Erroneous Transactions.
3315. Order Routing.
3317. Compliance with Regulation NMS Plan to Implement a Tick Size Pilot.
3102. Limitation of Exchange Liability and Reimbursement of Certain Expenses.

The Exchange proposes to delete Rule 3202, Application of Other Rules of the Exchange, as The Limited Liability Company Agreement of the Exchange and The By-Laws of the Exchange are part of the Phlx Rulebook and therefore apply to PSX already. As such, the Exchange believes that the rule is duplicative and not necessary.
The Exchange proposes to delete the reference to Sec. 44 FINRA Jurisdiction Over Arbitrations Against Exchange Members within PSX Rule 3202, Application of Other Rules of the Exchange, as that rule is not located in the Phlx Rulebook. Rule 950 describes Arbitration rules related to members on Phlx and PSX.
The Exchange proposes to update an erroneous citation to PSX Rule 0120x, currently within PSX Rule 3303, to Equity 1, Section 1a.
The Exchange also proposes to delete PSX Rules 3210 and 3211 because these rules do not contain substantive text.
The Exchange proposes to remove an outdated reference to Rule 4770 within Supplementary Material .01 to PSX Rule 3317 and instead utilize the term Rule to refer to Rule 3317. There is no Rule 4770 within the current Phlx Rulebook.
Equity 5
The Exchange proposes to relocate the below rules into Equity 5, Order Audit Trail Services:
Shell rule Section 1
Section 2
Section 3
Section 4

3100. Limit Up-Limit Down Plan and Trading Halts on PSX.
3101. Trading Halts Due to Extraordinary Market Volatility.
3301A. Order Types.
3301B. Order Attributes.
3302. Opening Process.
3303. Short Sale Price Test Pursuant to Rule 201 of Regulation SHO.
3304. Data Feeds Utilized.

PO 00000

Current rule
Section 5
Section 6

Current rule 7410A. Definitions.
7420A. Applicability.
7430A. Synchronization of Member Organization Business Clocks.
7440A. Recording of Order Information.
7450A. Order Data Transmission Requirements.
7460A. Violation of Order Audit Trail System Rules.

The Exchange proposes to amend a rule citation within Equity 5, Section 6, Violation of Order Audit Trail System Rules. The definition of System is being
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