Federal Register / Vol. 86, No. 9 / Thursday, January 14, 2021 / Notices 3217

included on the subject line if email is extension of the previously approved SECURITIES AND EXCHANGE used. To help us process and review collection of information provided for in COMMISSION your statement more efficiently, please Rule 15c1–5 (17 CFR 240.15c1–5) under use only one method. The Commission the Securities Exchange Act of 1934 (15 [Release No. 34–90880; File No. SR–Phlx– will post all statements on the SEC’s U.S.C. 78a et seq.). 2021–03] website at www.sec.gov. Rule 15c1–5 states that any broker- Statements also will be available for Self-Regulatory Organizations; website viewing and printing in the dealer controlled by, controlling, or under common control with the issuer PHLX LLC; Notice of Filing of Commission’s Public Reference Room, Proposed Rule Change To Modify Phlx 100 F Street NE, Washington, DC 20549, of a that the broker-dealer is Options 8, Section 26, ‘‘Trading Halts, on official business days between the trying to sell to or buy from a customer Business Continuity and Disaster hours of 10:00 a.m. and 3:00 p.m. (ET). must give the customer written Recovery’’ All statements received will be posted notification disclosing the control relationship at or before completion of without change; we do not edit personal January 8, 2021. identifying information from the transaction. The Commission submissions. You should submit only estimates that 181 respondents provide Pursuant to Section 19(b)(1) of the information that you wish to make notifications annually under Rule 15c1– Securities Exchange Act of 1934 available publicly. 5 and that each respondent would (‘‘Act’’),1 and Rule 19b–4 thereunder,2 FOR FURTHER INFORMATION CONTACT: Julie spend approximately 10 hours per year notice is hereby given that on January 7, Z. Davis, Senior Special Counsel, Office complying with the requirements of the 2021 Nasdaq PHLX LLC (‘‘Phlx’’ or of the Advocate for Small Business rule for a total burden of approximately ‘‘Exchange’’) filed with the Securities Capital Formation, at (202) 551–5407, 1,810 hours per year. There is no and Exchange Commission (‘‘SEC’’ or Securities and Exchange Commission, retention period requirement under ‘‘Commission’’) the proposed rule 100 F Street NE, Washington, DC Rule 15c1–5. This Rule does not involve change as described in Items I, II, and 20549–3628. the collection of confidential III, below, which Items have been SUPPLEMENTARY INFORMATION: The information. prepared by the Exchange. The Commission is publishing this notice to meeting will be open to the public. An agency may not conduct or solicit comments on the proposed rule Persons needing special sponsor, and a person is not required to change from interested persons. accommodations because of a disability respond to, a collection of information should notify the contact person listed under the PRA unless it displays a I. Self-Regulatory Organization’s FOR in the section above entitled currently valid OMB control number. Statement of the Terms of Substance of FURTHER INFORMATION CONTACT. The the Proposed Rule Change agenda for the meeting includes matters The public may view background relating to rules and regulations documentation for this information The Exchange proposes to modify affecting small and emerging companies collection at the following website: Phlx Options 8, Section 26, ‘‘Trading and their under the federal www.reginfo.gov. Find this particular Halts, Business Continuity and Disaster securities laws. information collection by selecting Recovery’’ to permit a Virtual Trading Dated: January 11, 2021. ‘‘Currently under 30-day Review—Open Crowd in the event that the Trading for Public Comments’’ or by using the Vanessa A. Countryman, Floor is unavailable. search function. Written comments and Secretary. recommendations for the proposed The text of the proposed rule change [FR Doc. 2021–00764 Filed 1–13–21; 8:45 am] information collection should be sent is available on the Exchange’s website at BILLING CODE P within 30 days of publication of this https://listingcenter.nasdaq.com/ notice to (i) www.reginfo.gov/public/do/ rulebook/phlx/rules, at the principal office of the Exchange, and at the SECURITIES AND EXCHANGE PRAMain and (ii) David Bottom, COMMISSION Director/Chief Information Officer, Commission’s Public Reference Room. Securities and Exchange Commission, c/ II. Self-Regulatory Organization’s [SEC File No. 270–422, OMB Control No. o Cynthia Roscoe, 100 F Street NE, 3235–0471] Statement of the Purpose of, and Washington, DC 20549, or by sending an Statutory Basis for, the Proposed Rule _ Submission for OMB Review; email to: PRA [email protected]. Change Comment Request Dated: January 11, 2021. In its filing with the Commission, the J. Matthew DeLesDernier, Upon Written Request, Copies Available Exchange included statements From: U.S. Securities and Exchange Assistant Secretary. concerning the purpose of and basis for Commission, Office of FOIA Services, [FR Doc. 2021–00732 Filed 1–13–21; 8:45 am] the proposed rule change and discussed 100 F Street NE, Washington, DC BILLING CODE 8011–01–P any comments it received on the 20549–2736 proposed rule change. The text of these Extension: statements may be examined at the Rule 15c1–5 places specified in Item IV below. The Notice is hereby given that pursuant Exchange has prepared summaries, set to the Paperwork Reduction Act of 1995 forth in sections A, B, and C below, of (‘PRA’’) (44 U.S.C. 3501 et seq.), the the most significant aspects of such Securities and Exchange Commission statements. (‘‘Commission’’) has submitted to the Office of Management and Budget 1 15 U.S.C. 78s(b)(1). (‘‘OMB’’) a request for approval of 2 17 CFR 240.19b–4.

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A. Self-Regulatory Organization’s period. Since that time, Phlx has been guidelines and would provide Statement of the Purpose of, and exploring alternatives to permit open institutional investors with a means to Statutory Basis for, the Proposed Rule outcry trading in the event of an execute orders that are unable to meet Change extended closure related to COVID–19 guidelines of the electronic market.9 or potentially a second closure in 2020 Specifically, this proposal would further 1. Purpose and/or 2021 given the uncertainty enhance the Exchange’s trading Phlx proposes to modify Phlx Options related to the ongoing pandemic. Phlx environment when the Trading Floor is 8, Section 26, ‘‘Trading Halts, Business notes that an all-electronic trading unavailable, the Back-up Trading Floor Continuity and Disaster Recovery.’’ This environment cannot fully replicate open is inoperable or the Exchange otherwise proposal creates an additional outcry trading, and therefore, the determines not to operate the Back-Up contingency within Phlx’s Business Exchange continues to evaluate Trading Floor, by permitting market Continuity Plan (‘‘BCP’’) to prepare for potential enhancements that it believes participants that generally operate on potential closure of its physical Trading would permit trading, in the event the the physical Trading Floor to continue Floor in light of COVID–19. Specifically, Trading Floor is inoperable, to more to interact in a substantially similar the Exchange proposes to amend closely replicate its trading environment manner as they do on the Trading Floor. Options 8, Section 26(g) to permit Phlx that exists during normal operations.7 Specifically, the Exchange proposes to to operate a newly proposed Virtual Phlx proposes to amend Options 8, further amend Options 7, Section 26(g) Trading Crowd in the event the physical Section 26(g)(2) to provide, to permit it to make available an audio Trading Floor is unavailable. Back-up Trading Floor Unavailable. In the and video communication program to serve as a ‘‘Virtual Trading Crowd’’ if Background event that the Back-Up Trading Floor becomes inoperable, or the Exchange the physical Trading Floor is Currently, Options 8, Section 26(g) otherwise determines not to operate its Back- unavailable, the Back-Up Trading Floor describes certain actions the Exchange Up Trading Floor the Exchange will operate becomes inoperable or the Exchange may take as part of its BCP, if its its electronic market and may elect to enact otherwise determines not to operate the Trading Floor became inoperable, so a Virtual Trading Crowd pursuant to Back-Up Trading Floor. The Exchange subsection (g)(3). that it may maintain fair and orderly would create ‘‘Virtual Trading Crowds,’’ markets if unusual circumstances were Today, Options 8, Section 26(g)(2) in each of which the Exchange will to occur which may impact the provides that if the Back-Up Trading determine which options class(es) will Exchange’s ability to conduct its options Floor becomes inoperable, the Exchange be available for trading. This is similar floor business. Specifically, in the event will only operate its electronic market to the Exchange’s authority with respect of loss of the Trading Floor, if the and will not operate a Trading Floor. to trading on the Trading physical location 3 designated as the Further, the rule provides the Exchange Floor.10 Phlx members will access a ‘‘Trading Floor’’ becomes unavailable will operate only its electronic market Virtual Trading Crowd via ‘‘zones.’’ 11 Phlx will enact its BCP and designate until the Exchange’s Trading Floor Multiple classes may trade in a single the Philadelphia Navy Yard as its facility is operational. Open outcry Virtual Trading Crowd available for ‘‘Back-Up Trading Floor.’’ Further, in trading will not be available in the trading in a single zone. This is similar the event that the Back-Up Trading interim. to the physical Trading Floor today. The Floor becomes unavailable or At this time, the Exchange desires to Exchange may determine to have only inoperable, the Exchange will only adopt a virtual option in the event the one zone or several zones as necessary operate its electronic market and will physical Trading Floor is unavailable, to ensure a fair and orderly market. The not operate a Trading Floor. The the Back-Up Trading Floor becomes Exchange will assign each Floor Market Exchange will operate only its inoperable or the Exchange otherwise Maker to a zone and Floor Brokers may electronic market until the Exchange’s determines not to operate the Back-Up determine in which zone(s) they will be Trading Floor facility is operational. Trading Floor.8 Specifically, Phlx’s present. This is similar to the Open outcry trading will not be proposal would permit certain aspects arrangement on the Exchange’s physical available in the interim.4 of open outcry trading, which are Trading Floor. Unlike Cboe, Phlx has a Phlx’s Trading Floor closed on March normally conducted in-person on the requirement that each trading crowd 17, 2019,5 as a result of precautions Trading Floor, to be conducted in a have a Floor present.12 taken with respect to COVID–19.6 The virtual trading crowd (‘‘Virtual Trading Phlx ensures that this requirement is Exchange continued to operate in an all- Crowd’’). This proposal is intended to met by assigning Floor Market Makers to electronic configuration during this time enhance Phlx’s BCP by offering an a trading crowd.13 If a Floor Market alternative which comports with 3 Phlx’s physical Trading Floor is located at 2929 shelter-in-place and social distancing 9 For example, there are certain aspects of trading Walnut Street, Philadelphia, PA. where the rules differ electronically and on the 4 This Rule does not preclude the Exchange from 7 Certain aspects of open outcry trading, Trading Floor. Complex Orders are traded conducting business, in the event the Trading Floor particularly the ability for persons to negotiate differently electronically versus on the Trading and Back-Up Trading Floor are rendered pricing and to facilitate executions of larger orders Floor based on Exchange rules. inoperable, pursuant to Options 4, Section 10. in a trading crowd as well as the handling of high- 10 See Options 8, Section 25(l) which provides, Current Options 4, Section 10, Backup Trading risk and complicated strategies, are not easily ‘‘In the interest of fair and orderly markets, the Arrangements, outlines rules applicable to hosting replicated in electronic markets. Exchange may adopt policies affecting the location Phlx at another exchange in the event Phlx is 8 The proposed rule regarding the Virtual Trading of members in the trading crowd on a crowd-by- disabled. Crowd is located in the Exchange’s broader rule crowd basis.’’ 5 See Options Trader Alert #2020–07. Phlx’s regarding disaster recovery and business continuity, 11 A ‘‘zone’’ is a virtual room representing a Trading Floor did not re-open until June 3, 2020. as the Exchange currently only plans to use the Virtual Trading Crowd. For example, each trading See Options Trader Alert #2020–08. Virtual Trading Crowd for business continuity crowd will have its own zoom password-protected 6 On March 11, 2020, the World Health purposes if the physical Trading Floor becomes log-in. Organization characterized COVID–19 as a unavailable, the Back-Up Trading Floor becomes 12 See Options 8, Section 28, ‘‘. . . An Options pandemic and to slow the spread of the disease, inoperable or the Exchange otherwise determines shall ascertain that at least one Floor federal and state officials implemented social- not to operate the Back-Up Trading Floor. If the Market Maker is present at the trading post prior to distancing measures, placed significant limitations Exchange were to determine to use the Virtual representing an order for execution. . . .’’ on large gatherings, limited travel, and closed non- Trading Crowd in more permanent manner, it 13 The Exchange notes that as a result of COVID– essential businesses. would submit a separate rule filing. 19, the Exchange implemented various safety

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Maker hears a Floor Broker located in functionalities.15 Today, FBMS is employees, and any other persons the another trading crowd represent an designed to execute orders entered by Exchange authorizes admission to the order, the Floor Market Maker may Floor Brokers,16 including multi-leg Virtual Trading Crowd.’’ attempt to trade with that order. The orders up to 15 legs, after representation The Exchange proposes to limit the Exchange intends that the concept of a in the trading crowd. When a Floor number of members, per member zone replicate a crowd on the physical Broker submits an order for execution organization, that may participate in a Trading Floor. through FBMS, the order will be Virtual Trading Crowd based on the Phlx proposes to replicate the open executed based on market conditions at ability of Phlx to accommodate outcry features on the physical Trading the time of execution and in accordance members within the remote Floor within a Virtual Trading Crowd. with Phlx rules. FBMS execution conferencing feature in an orderly The Exchange will use a communication functionality checks the to fashion. The Exchange would limit program that has audio, video, and ensure compliance with priority rules. personnel in a fair and equitable manner ‘‘chat’’ functionality.14 Floor members Orders that do not comply with priority ensuring there is fair and equal would log into the Virtual Trading and trade-through rules will not be representation from each member and Crowd, as described in more detail executed. All FBMS order and member organization. This proposal below, and would communicate trades transaction data that would normally be would allow each of the trading crowds within the conferencing feature. This available from the physical Trading that exist on Phlx’s physical Trading will allow the same communication Floor would continue to be captured by Floor to participate in this ‘‘Virtual capabilities floor members generally FBMS and the System. These Trading Crowd’’ in one or more separate have on the physical Trading Floor so compliance checks, which are crucial to zones as described above. ensuring compliance with Exchange that they may conduct open outcry While clerks may access the Virtual rules, will continue with the Virtual trading in the Virtual Trading Crowd in Trading Crowd, they may only perform the same manner as they do on the Trading Crowd model. Access to the Virtual Trading Crowd the same functions for their associated physical Trading Floor. will be substantially similar to access to member organizations in connection All Options 8 Rules will apply to the physical Trading Floor. Only with open outcry trading in the Virtual open outcry trading in the Virtual members registered to access Phlx’s Trading Crowd as they do for open Trading Crowd, in the same manner as Trading Floor would be permitted to outcry trading on the physical Trading they apply to open outcry trading on the participate. The Exchange is not Floor. The Exchange understands physical Trading Floor, except as proposing to amend its membership permitting access to Clerks to access the otherwise provided for in proposed requirements with respect to virtual Virtual Trading Crowd will provide Options 8, Section 26(g)(3)(E). The open outcry trading. Currently, them with access to the information that proposed changes are described below. admission to the physical Trading Floor they normally have access to on the The Exchange proposes to adopt a new is limited to members and member physical Trading Floor, which will Options 8, Section 26(g)(3) to permit the organizations, Exchange employees, make it more efficient for them to Exchange to make available an audio clerks employed by members and perform their tasks. Also, the Exchange and video communication program to member organizations, Inactive would not permit visitors into the serve as a ‘‘Virtual Trading Crowd’’ if Nominees, and Exchange visitors that Virtual Trading Crowd as the Exchange the physical Trading Floor is not receive authorized admission to the believes that allowing these types of available. Trading Floor pursuant to Exchange persons to have access to the Virtual Proposed Options 8, Section policy, and any other persons that the Trading Crowd is unnecessary as these 26(g)(3)(A) lists certain terms in the Exchange authorizes admission to the persons are not essential to the Rules related to open outcry trading on Trading Floor.17 Persons and entities functioning of the Virtual Trading the physical Trading Floor that will be may apply to become a Phlx member by Crowd. As is the case with the physical deemed to refer to corresponding terms complying with the membership Trading Floor, the Exchange will related to trading in the Virtual Trading requirements noted within Phlx General provide access to the Virtual Trading Crowd. Specifically, 3, Membership and Access. Proposed Crowd to members the Exchange has • References in the Rules to the Options 8, Section 26(g)(3)(B) provides, approved to perform a Trading Floor ‘‘floor,’’ ‘‘Trading Floor,’’ and ‘‘Admission to the Virtual Trading function (including Floor Brokers and ‘‘Exchange floor’’ (and any other terms Crowd is limited to members and Floor Market Makers). with the same meaning) will be deemed member organizations, Clerks, Exchange While floor members would not be to refer to the ‘‘Virtual Trading Crowd’’; required to display badges, pursuant to and 15 FBMS, an order management system, is the Options 8, Section 39 at Regulation 3, in gateway for the electronic execution of equity, the Virtual Trading Crowd, as the size • References in the Rules to ‘‘physical equity index and U.S. dollar-settled foreign of the view on the communication presence’’ or ‘‘on-floor’’ or ‘‘floor’’ (and currency option orders represented by Floor program may not permit badges to be any other terms with the same meaning) Brokers on the Exchange’s Options Floor. Floor Brokers contemporaneously upon receipt of an visible, members would be required to will be deemed to refer to ‘‘presence’’ in order and prior to the representation of such an join the Virtual Trading Crowd in a a Virtual Trading Crowd. order in the trading crowd, record all options orders manner that clearly identifies the The proposal does not amend or represented by such Floor Broker to FBMS, which creates an electronic audit trail. The execution of member or member’s employee. replace any aspects of Phlx’s Options orders to Phlx’s electronic trading system also Pursuant to proposed Options 3, Floor Based Management System occurs via FBMS. The FBMS application is Section 26(g)(3)(E)(8)(a), prior to (‘‘FBMS’’) or order execution available on hand-held tablets and stationary desktops. speaking on remote conferencing, each 16 The term ‘‘Floor Broker’’ means an individual member must announce themselves protocols including socially distancing floor who is registered with the Exchange for the each time.18 As specified within members by assigning spaces to all floor market purpose, while on the Options Floor, of accepting participants on the physical Trading Floor. and handling options orders. See Options 8, Section 14 Currently available programs with this 2(2). 18 Members would also be visible on video, functionality include Zoom, Webex, Microsoft 17 See General 3, Section 1, Options 8, Sections however the Exchange will still require members to Teams, and others. 5–9, and Options 8, Sections 11 and 12. announce themselves.

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proposed Options 8, Section feature in addition to consenting to require members and member 26(g)(3)(E)(2), members must join via a voice recording. organizations to register devices they computer and either (a) computer audio; Today, pursuant to Options 8, Section use while in the Virtual Trading Crowd. (b) cell phone; or (c) hard-wired phone, 38, floor members must register their Options 8, Section 38 will otherwise as determined by Nasdaq. Phlx will means of communication with the apply in the same manner to the Virtual send a password-protected invitation to Exchange.20 Pursuant to proposed Trading Crowd as it does to the physical each floor participant permitted access Options 8, Section 26(g)(3)(E)(4), Trading Floor (to the extent the context to the Virtual Trading Crowd. This members and member organizations requires). This includes requirements invitation will permit each permitted may use any equipment to access the related to audit trail and record participant to access the Virtual Trading Virtual Trading Crowd and do not need retention, prohibition on using any Crowd in a safe and secure manner. Any to register devices they use while in the device for the purpose of recording floor member may access any zone Virtual Trading Crowd. Floor members activities in the Virtual Trading Crowd within the Virtual Trading Crowd, and member organizations would be or maintaining an open line of although Floor Market Makers will be permitted remote access to FBMS when continuous communication whereby a required to be present in their assigned the Virtual Trading Floor is enacted.21 person not located in the trading crowd zone if present within the Virtual The Exchange proposes to provide may continuously monitor the activities Trading Crowd. Any unidentified within Options 8, Section 26(g)(3)(C) in the trading crowd, and the attendee will be removed from the that, ‘‘. . . Notwithstanding Options 8, prohibition on using devices to Virtual Trading Crowd. The Exchange Section 28(g) and Options 8, Section disseminate quotes or last sale reports. will have an audit trail of the telephone 30(e), members and member Surveillance staff will be present in numbers that have joined each remote organizations would be permitted each Virtual Trading Crowd to monitor conferencing session in order to ensure remote access to the Options Floor the activity of each participant, who that only members join the remote Based Management System (‘‘FBMS’’) must be present by video, and to conferencing feature. Every member in when the Virtual Trading Floor is observe participant behavior. The the Virtual Trading Crowd must provide enacted for the purpose of executing Exchange will continue to surveil Market Operations with a contact transactions which require exposure in options transactions, as it does today, to open outcry.’’ Floor members must use identify transactions which are violative number where Market Operations will 22 be able to reach them during the trading Exchange-provided FBMS, to the extent of Phlx Rules. Phlx surveils for transactions which have been executed day. The contact number may not be the applicable, while transacting in the on its market to determine if those same number that is being used to Virtual Trading Crowd. As noted above, transactions utilized information which connect to the Virtual Trading Crowd. prior to using a communications device would have been available in open Floor members are responsible for for business purposes on the Trading outcry trading and was not yet public or maintaining updated contact Floor of the Exchange, members and otherwise ascertainable due to the information. This number must be member organizations must register the execution of a transaction. The updated immediately if it changes. communications device in a form and Exchange notes that in both the Nasdaq staff must be able to reach a manner prescribed by the Exchange. electronic market and on the trading member if there is an issue with Because individuals in the Virtual floor, members and member trading.19 Trading Crowd will not be on the Nasdaq non-regulatory staff organizations must ensure that they would be responsible for the operation Exchange’s premises (and thus will not be using Exchange-provided bandwidth have procedures reasonably designed to of the remote conferencing feature, prevent the misuse of material, non- which includes monitoring members to to be shared with all market participants public information by employees.23 ensure that only floor members and and do not pose the same security risks), Further, the Exchange proposes to member’s employees are admitted into the proposed rule change will not provide within proposed Options 8, remote conferencing and are properly 20 Section 26(g)(3)(E)(8)(g) that ‘‘A member identified. Options 8, Section 38(a) provides, ‘‘No member or member organization shall establish or maintain may not permit any unauthorized other As specified within proposed Options any private wire connection, private radio, person to gain audio or video access to 3, Section 26(g)(3)(E)(1), every member television or wireless system, between the Exchange Trading Floor and a nonmember without the Virtual Trading Crowd. A member and the member’s employees in the application to and approval by the Exchange. Every shall not record any trading sessions,’’ Virtual Trading Crowd must consent to such means of communication shall be registered to make clear that the Exchange will video and audio recording in order to with the Exchange. Notice of the discontinuance of enforce the prohibitions of Options 8, participate in the Virtual Trading any such means of communication shall be promptly given to the Exchange.’’ Section 38 with respect to the remote Crowd. Members and members’ 21 At the time of the Phlx Trading Floor closure conferencing aspects as well. Finally, employees will be asked to provide this in March 2020, the Exchange permitted Floor the Exchange represents that it has the consent, as well as other consents, Brokers, who otherwise had no means of trading on proper security infrastructure in place to before being permitted to join the Phlx in an electronic environment, to utilize FBMS offer FBMS remotely and securely to remotely, solely for the purpose of submitting limit Virtual Trading Crowd. For example, orders to the electronic limit order book pursuant floor participants. member organizations would be to Options 8, Section 28(g), or submitting a Floor Today, members on the physical required to execute an addendum to the Qualified Contingent Cross Order to the System Trading Floor only verbalize their Nasdaq Services Agreement regarding pursuant to Options 8, Section 30(e). See Options interest to trade against a represented their use of the remote conferencing Trader Alert #2020–8. order, so not requiring bids and offers to Recently, the Exchange filed a proposal to amend Options 8, Section 28(g) and Options 8, Section be included in a chat conforms to 19 The conferencing room would be password 30(e) to continue to allow Floor Brokers the ability current practice on the Trading Floor. protected and equipped with audio, video and text to submit limit orders to the electronic limit order However, given potential limitations of capabilities. Attendance control requirements book and Floor Qualified Contingent Cross Orders communication software (such as would be in place. Private chat features will not be to the System via FBMS remotely, notwithstanding permitted on the platform. Unknown callers would the existence of BCP measures. See SR–Phlx–2021– be removed from the conferencing room. Nasdaq 01. This recent proposal did not permit FBMS to 22 See Phlx Options 9, Section 1; and Options 9, non-regulatory staff would be in control of the be utilized remotely for the purpose of executing Section 5. See also Options 3, Section 22(d). conference room. transactions which require exposure in open outcry. 23 See Phlx General 9, Section 21.

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limitations on how many people may be the quote were provided and the parties establish a break-out room within the heard at the same time in a Virtual did not have a Meeting of the Minds remote conferencing for each dispute. Trading Crowd or potential buffering or with respect to the terms of the This would provide an effective manner echoing), the Exchange believes it may transaction. in which to communicate disputes and be appropriate to require members to Today, Floor Market Maker quotes are maintain a record of those disputes. use a chat tool in the communication considered firm when announced in Pursuant to proposed Options 8, program to indicate their interest in open outcry 25 and once accepted the Section 26(g)(3)(E)(8)(f) disruptive or participating in a trade so that the transaction may be effectuated within unnecessary conversations or comments representing Floor Broker is able to FBMS. A Floor Market Maker may in the remote conferencing or on chat know the market from the trading crowd declare he or she is ‘‘out’’ prior to a feature will not be permitted. This type and fairly allocate the trade pursuant to Meeting of the Minds occurring in open of behavior would subject a member to the Rules.24 The Exchange would outcry and the Floor Broker submitting disciplinary action. Today, disruptive require members to utilize the chat the trade into FBMS.26 Today, a Floor behavior on the Trading Floor is subject function if Surveillance determines that Market Maker that experiences issues to Options 8, Section 39 at Regulation increased volume or activity in the with internet connection,27 makes an 4.28 Virtual Trading Crowd warrant error or otherwise is unaware of recent As noted above, the Exchange may mandatory use of the chat feature for news in a particular option, would be determine to make the Virtual Trading members to maintain a fair and orderly held to a quote verbalized in open Crowd available if the physical Trading market. Chats will be visible to all outcry. In the event that the negotiation Floor is unavailable, the Back-Up participants in a zone and will not be continues and the terms change, the Trading Floor becomes inoperable or the permitted directly between individual Floor Marker Maker would not be held Exchange otherwise determines not to participants (i.e., the Exchange will to the new terms without additional operate the Back-Up Trading Floor. disable direct messaging functionality acceptance of those terms. In the event Proposed Options 8, Section 26(g)(3) within the communication program). that the transaction is not effectuated in provides that ‘‘The Exchange may elect The Exchange believes the flexibility to FBMS, the trade would not stand. To to permit open outcry trading to take impose this requirement in a Virtual that end, the Exchange believes place in a Virtual Trading Crowd if the Trading Crowd is appropriate, as these continuing to require quotes to remain Trading Floor becomes unavailable, the limitations may ultimately not interfere firm once the parties have arrived at a Back-Up Trading Floor becomes with a Floor Broker’s ability to hear all Meeting of the Minds with respect to the inoperable or the Exchange otherwise interest (particularly in Virtual Trading terms of the transaction creates fair and determines not to operate the Back-Up Crowd) and thus the additional equitable expectations for members Trading Floor.’’ These amendments to requirement may potentially slow down trading in the Virtual Trading Crowd. the Options 8 Rules are intended to Today, FLEX transactions are executions. Flexibility will permit the make trading in a Virtual Trading permitted on the Trading Floor in Exchange to balance system limitations Crowd similar to open outcry trading accordance with Options 3, Section 34. with the additional burden of a new when open outcry trading is not With this proposal, FLEX Trade tickets workflow step for each class, some of available by replicating certain features must be sent by email to the Phlx which have different open outcry of open outcry trading in the Virtual Correction Post pursuant to proposed trading environments than others. Trading Crowd. The Virtual Trading Options 8, Section 26(g)(3)(E)(8)(d). This The Exchange will retain records of Crowd will permit open outcry trading the chats as well as consents, and any proposal would allow the Exchange to to continue in a separate environment if other records related to the Virtual receive these in a timely manner. the physical Trading Floor becomes Trading Crowds that are subject to the The Exchange notes within proposed unavailable, the Back-Up Trading Floor Exchange’s record retention obligations Options 8, Section 26(g)(3)(E)(8)(e) that becomes inoperable or the Exchange under the Exchange Act. a break-out room may be utilized to Pursuant to Options 3, Section declare a dispute or otherwise notify an otherwise determines not to operate the 26(g)(3)(E)(8)(b), if a member Options Floor Official of any required Back-Up Trading Floor. Therefore, experiences a technical issue accessing notifications. The Exchange would trading opportunities that are generally the remote conferencing, the Exchange only available in open outcry trading will not be responsible for unexecuted 25 See Options 8, Section 22(c) Public Outcry— will continue to be available in the trades. Also, pursuant to Options 3, Pursuant to Options 8, Section 24 (this citation is Virtual Trading Crowd. being amended in this rule change from Section 35 Section 26(g)(3)(E)(8)(c), Floor Market All trading in the Virtual Trading to the correct Section 24) at Supplementary Crowd will occur in the same manner, Maker quotes will be considered firm in Material .01, bids and offers must be made in an the event the Floor Market Maker is audible tone of voice. A member shall be including priority and allocation 29 disconnected from the Virtual Trading considered ‘‘in’’ on a bid or offer, while he remains rules. The Exchange will make the at the post, unless he shall distinctly and audibly same order types and instructions Crowd and the parties have a meeting of say ‘‘out.’’ A member bidding and offering in the minds with respect to the terms of immediate and rapid succession shall be deemed available in the Virtual Trading Crowd the transaction. A ‘‘Meeting of the ‘‘in’’ until he shall say ‘‘out’’ on either bid or offer. as it makes available on the physical Minds’’ means the contra-side(s) Once the trading crowd has provided a quote, it Trading Floor.30 Floor Brokers will be will remain in effect until: (A) A reasonable amount subject to the responsibilities in each verbally confirmed participation in the of time has passed, or (B) there is a significant trade. In the event that a Floor Market change in the price of the underlying security, or Maker is disconnected from the Virtual (C) the market given in response to the request has 28 Options 8, Section 39, Regulation 4(a) provides, Trading Crowd, a Floor Market Maker been improved. In the case of a dispute, the term ‘‘Members and associated persons shall not conduct ‘‘significant change’’ will be interpreted on a case- themselves in a disorderly manner on the trading quote would not be considered firm if by-case basis by an Options Exchange Official based floor or on the premises immediately adjacent to the upon the extent of the recent trading in the option trading floor. Further, members, participants and 24 The Exchange would issue an Options Trader and, in the case of equity and index options, in the associated persons shall not conduct themselves in Alert announcing any determination to require bids underlying security, and any other relevant factors. an indecorous manner that is disruptive to the and offers to be expressed in a chat within the 26 Id at 25. conduct of business on the trading floor, including communication program pursuant to proposed 27 The Exchange notes that today members are but not limited to the use of profanity.’’ Options 8, Section 26(g)(3)(D). The Exchange will responsible for the operation of their own 29 See Options 8, Sections 25 and 30. provide such notice with sufficient advance notice. equipment while on the Trading Floor. 30 See Options 8, Section 32.

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environment.31 Additionally, members experience on the physical Trading proposed rule change may facilitate and member organizations participating Floor as much as possible. The continued trading of these orders if and in the Virtual Trading Crowd will be Exchange believes this will provide the when the physical Trading Floor is subject to the same regulatory opportunity for as seamless a rollout as unavailable, the Back-Up Trading Floor requirements as they are on the physical possible if circumstances cause the becomes inoperable or the Exchange Trading Floor.32 Orders must be Exchange to make the Virtual Trading otherwise determines not to operate the systematized, and represented, and Crowd available. Back-Up Trading Floor. As a result, the transactions reported, in connection Technical Amendments Exchange believes providing continuous with the Virtual Trading Crowd floor in access to open outcry trading when the the same manner as they are when The Exchange proposes to amend physical Trading Floor is unavailable, trading on the physical Trading Floor.33 Options 8, Section 22, Execution of the Back-Up Trading Floor becomes Therefore, the audit trail for open outcry Options Transactions on the Trading inoperable or the Exchange otherwise trading in the Virtual Trading Crowd Floor, to correct two citations in determines not to operate the Back-Up will capture the same information that Options 8, Sections 22(b) and (c). The Trading Floor will remove impediments it does for open outcry trading on the citations to Options 8, Section 35 to a free and open market and will physical Trading Floor. should be to Options 8, Section 24. ultimately benefit investors, particularly These corrections will ensure the rule Surveillance those desiring to execute high-risk and text is accurate. complex trading strategies. Phlx Surveillance staff would 2. Statutory Basis The Virtual Trading Crowd would remotely surveil transactions in the The Exchange believes that its have the same capability to utilize Virtual Trading Crowd, in real-time. FBMS as the primary Trading Floor Specifically, there would be an Options proposal is consistent with Section 6(b) of the Act,34 in general, and furthers the today with the availability of remote Floor Official present in each Virtual FBMS.36 The Exchange also believes the Trading Crowd. Nasdaq Surveillance objectives of Section 6(b)(5) of the Act,35 in particular, in that it is designed to proposed rule change will promote just would conduct real-time surveillance and equitable principles of trade as for violations of Phlx rules, as is the promote just and equitable principles of trade, to foster cooperation and open outcry trading in a Virtual Trading case with physical open outcry. Floor Crowd will occur in accordance with Surveillance Procedures would be coordination with persons engaged in regulating, clearing, settling, processing the same trading rules and be subject to updated to account for the conferencing the same regulatory requirements that and chat requirements, as well as any information with respect to, and facilitating transactions in securities, to apply to open outcry trading on the changes to surveil a Virtual Trading physical Trading Floor, all of which Crowd. All surveillance patterns would remove impediments to and perfect the mechanism of a free and open market have previously been filed with the be operable and function normally. Commission. The proposed rule change The Exchange also proposes to re- and a national market system, and, in will merely permit this open outcry number current Options 3, Section general, to protect investors and the trading to occur in a virtual setting 26(g)(3) as (4). The Exchange notes that public interest. rather than a physical setting (which this proposal does not amend the In particular, the Exchange believes may be appropriate for health and safety manner in which fees or other pricing the proposed rule change will remove purposes). For the Virtual Trading incentives, such as caps, apply to floor impediments to and perfect the Crowd, open outcry trading will occur participants. Any transaction originating mechanism of a free and open market while market participants operate from open outcry on the Trading Floor and a national market system, and, in remotely as they do when they trade is considered a floor transaction and general, to protect investors and the electronically. Open outcry trading on a would continue to be considered a floor public interest, as it will permit open physical Trading Floor or in a Virtual transaction for purposes of the Virtual outcry trading to continue in the event Trading Crowd will be subject to the Trading Crowd. With offering FBMS the Exchange’s Trading Floor is same priority and allocation rules as remotely, the Exchange does not unavailable, the Back-Up Trading Floor open trading on the physical Trading propose to amend the manner in which becomes inoperable or the Exchange Floor, as set forth in Options 8, Sections fees are assessed or rebates are paid for otherwise determines not to operate the 25 and 30. purposes of Options 7 pricing to Floor Back-Up Trading Floor. As discussed Brokers. above, there are certain features of open As is the case for open outcry trading The Exchange has conducted several outcry trading that are difficult to on a physical Trading Floor, open town halls with floor members in which replicate in an electronic trading outcry trading in a Virtual Trading the Exchange presented the environment. The Exchange has Crowd is consistent with Section 11(a) functionality of the Virtual Trading observed, and understands from various of the Act, as Rule 5.85(a)(2)(E) (which Crowd and has made the Virtual market participants, that they have had will apply to open outcry trading in a Trading Crowd available for testing so difficulty executing certain orders, such Virtual Trading Crowd) requires that the Exchange will be ready to as larger orders and high-risk and members and member organizations implement it if necessary. The Exchange complicated strategies, in an all- relying on Section 11(a)(1)(G) of the Act has received positive feedback from electronic trading configuration without and Rule 11a1–1(T) thereunder (the so floor members regarding the Virtual the element of human interaction to called ‘‘G exemption rule’’) as an Trading Crowd and will continue to negotiate pricing for these orders. The exemption must priority to any make updates as necessary and proposed rule change would provide an bid (offer) at the same price of Public appropriate in response to comments it environment in which this interaction Customer orders and broker-dealer receives to make the Virtual Trading would be available despite the potential orders resting in the Order Book, as well Crowd replicate the open outcry trading unavailability of the physical Trading as any other bid (offer) that has priority Floor. The Exchange believes the over those broker-dealer orders under 31 See Options 8, Sections 18 and 28. this Rule. 32 See Options 8 generally. 34 15 U.S.C. 78f(b). 33 See Options 8 generally. 35 15 U.S.C. 78f(b)(5). 36 See note 15 above.

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The Exchange further believes the the quote were provided and the parties by automated enforcement of priority proposed rule change will remove did not have a Meeting of the Minds and trade-through rules. The Exchange impediments to and perfect the with respect to the terms of the would continue to cancel orders that mechanism of a free and open market transaction. Today, Floor Market Maker failed to meet these compliance checks, and a national market system, and, in quotes are considered firm when as is the case today. These compliance general, to protect investors and the announced in open outcry 37 and once checks ensure that allocation rules are public interest by permitting the accepted the transaction may be complied with and that the proposed Exchange to establish zones. As effectuated within FBMS. A Floor execution would not cause Phlx to discussed above, the zones are intended Market Maker may declare he or she is trade-through an away market. to replicate the physical Trading Floor’s ‘‘out’’ prior to a Meeting of the Minds Surveillance staff would remotely organization and will permit floor occurring in open outcry and the Floor surveil transactions in a Virtual Trading members to interact in a substantially Broker submitting the trade into Crowd, in real-time. Specifically, there similar way as they do on the physical FBMS.38 Today, a Floor Market Maker would be an Options Floor Official Trading Floor. The zones will also that experiences issues with internet present in each Virtual Trading Crowd. encourage interaction of a reasonable connection,39 makes an error or Nasdaq Surveillance would conduct number of people within the otherwise is unaware of recent news in real-time surveillance for violations of communication program. While the a particular option, would be held to a Phlx rules, as is the case with physical zones will include additional quote verbalized in open outcry. In the open outcry. Floor Surveillance functionality that is not otherwise event that the negotiation continues and Procedures would be updated to available on the physical Trading Floor, the terms change, the Floor Marker account for the conferencing and chat such as the chat functionality, the Maker would not be held to the new requirements, as well as any changes to Exchange believes the creation of zones terms without additional acceptance of surveil a Virtual Trading Crowd. All and inclusion of this functionality will those terms. In the event that the surveillance patterns would be operable create a virtual environment that transaction is not effectuated in FBMS, and function normally. The Exchange promotes fair and orderly trading given the trade would not stand. To that end, believes that the proposed rule change the potential limitations of the Exchange believes continuing to would remove impediments to and communication software. require quotes to remain firm once the perfect the mechanism of a free and The Exchange will make the same parties have arrived at a Meeting of the open market and a national market order types and instructions available in Minds with respect to the terms of the system because it would promote fair a Virtual Trading Crowd as it makes transaction is consistent with the Act as and orderly trading. The Exchange available on a physical Trading Floor it creates fair and equitable expectations believes it will promote just and pursuant to Options 8, Section 32. Floor for members trading in the Virtual equitable principles of trading for all Brokers will be subject to the Trading Crowd as a Meeting of the open outcry trading to occur in responsibilities set forth in Options 8, Minds was arrived out between the substantially the same manner, whether Sections 18 and 28 in a Virtual Trading parties, each of whom had an it occurs while market participants are Crowd, as they are on a physical opportunity to participate in the trade. in the same physical setting or in remote Trading Floor. Additionally, members The audit trail for open outcry trading settings being connected through a and member organizations participating in a Virtual Trading Crowd will capture technological solution. in a Virtual Trading Crowd will be the same information that it does for Controls and security features are subject to the same regulatory open outcry trading on a physical proposed to ensure that the appropriate requirements in a Virtual Trading Trading Floor. The FBMS execution market participants are participating in Crowd as they are on a physical Trading checks for compliance with priority and trades and to minimize any disruptions. Floor, including those set forth trade-through rules remain intact. The Nasdaq non-surveillance staff would be generally within Options 8. Orders must Exchange’s proposal only seeks to responsible for the operation of the be systematized and represented, and replace the open outcry negotiations remote conferencing feature, which transactions reported, in connection with a Virtual Trading Crowd. FBMS includes monitoring members to ensure with a Virtual Trading Crowd in the compliance checks were adopted to that only floor members and members’ same manner as they are when trading protect and the general public employees are admitted into remote on a physical Trading Floor. The conferencing and are properly Exchange will retain records of the chats 37 See Options 8, Section 22(c) Public Outcry— identified. Member organizations would as well as consents, and any other Pursuant to Options 8, Section 35 at Supplementary be required to execute an addendum to records related to the Virtual Trading Material .01, bids and offers must be made in an the Nasdaq Services Agreement audible tone of voice. A member shall be Crowd that are subject to the Exchange’s considered ‘‘in’’ on a bid or offer, while he remains regarding their use of the remote record retention obligations under the at the post, unless he shall distinctly and audibly conferencing feature in addition to Exchange Act. say ‘‘out.’’ A member bidding and offering in consenting to voice recording. Pursuant to Options 3, Section immediate and rapid succession shall be deemed In addition, the Exchange believes the 26(g)(3)(E)(8)(c), Floor Market Maker ‘‘in’’ until he shall say ‘‘out’’ on either bid or offer. proposed rule change will not be Once the trading crowd has provided a quote, it quotes will be considered firm in the will remain in effect until: (A) A reasonable amount designed to permit unfair event the Floor Market Maker is of time has passed, or (B) there is a significant discrimination between customers, disconnected from the Virtual Trading change in the price of the underlying security, or issuers, brokers, or dealers, as all Crowd and the parties have a Meeting (C) the market given in response to the request has individuals authorized to act on the been improved. In the case of a dispute, the term of the Minds with respect to the terms ‘‘significant change’’ will be interpreted on a case- physical Trading Floor (both member of the transaction. A ‘‘Meeting of the by-case basis by an Options Exchange Official based organizations authorized at the time the Minds’’ means the contra-side(s) upon the extent of the recent trading in the option physical Trading Floor becomes verbally confirmed participation in the and, in the case of equity and index options, in the unavailable, the Back-Up Trading Floor trade. In the event that a Floor Market underlying security, and any other relevant factors. becomes inoperable or the Exchange 38 Id at 25. Maker is disconnected from the Virtual 39 The Exchange notes that today members are otherwise determines not to operate the Trading Crowd, a Floor Market Maker responsible for the operation of their own Back-Up Trading Floor and any member quote would not be considered firm if equipment while on the Trading Floor. organization that becomes authorized

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after the physical Trading Floor assessed or rebates are paid for purposes Floor is operating in its normal state. becomes unavailable) will be provided of Options 7 pricing to floor Maintenance of this level of liquidity at with access to the Virtual Trading participants. all times, even when the Trading Floor Crowd. Additionally, the proposed rule Technical Amendments is unavailable, may promote change to permit the Exchange to elect competition by providing these a Virtual Trading Crowd if the physical The Exchange’s proposal to update customer orders with increased citations to Options 8, Section 35 to Trading Floor is unavailable will liquidity than may otherwise be Options 8, Section 24 are consistent provide individuals unable to trade on available, and thus increased execution the physical Trading Floor as a result of with the Act as these non-substantive amendments will ensure the rule text is opportunities and . certain restrictions to participate in Every Floor Market Maker and Floor open outcry trading remotely. accurate. Broker is permitted access to FBMS. Surveillance staff will be present in B. Self-Regulatory Organization’s With respect to inter-market each Virtual Trading Crowd to monitor Statement on Burden on Competition the activity of each participant, who competition, the Exchange notes that must be present by video, and to The Exchange does not believe that each options market has a business observe participant behavior. The the proposed rule change will impose continuity plan. Because the options Exchange will continue to surveil any burden on competition not markets are physically located in options transactions, as it does today, to necessary or appropriate in furtherance different regions of the United States, of the purposes of the Act. The identify transactions which are violative the conditions under which a business 40 Exchange does not believe that the of Phlx Rules. Phlx surveils for continuity plan is deployed may differ, proposed rule change will impose any transactions which have been executed based on regional differences. In on its market to determine if those burden on intra-market competition that is not necessary or appropriate in addition, any options exchange with a transactions utilized information which trading floor could amend its rules to would have been available in open furtherance of the purposes of the Act, as all member organizations authorized adopt similar business continuity plans outcry trading and was not yet public or that engaged similar controls. otherwise ascertainable due to the by the Exchange, or that become execution of a transaction. The authorized by the Exchange, to transact Technical Amendments Exchange notes that in both the on the Trading Floor will receive access electronic market and on the trading to the Virtual Trading Crowd. The Exchange’s proposal to update floor, members and member The Exchange does not believe that citations to Options 8, Section 35 to organizations must ensure that they the proposed rule change will impose Options 8, Section 24 do not impose an have procedures reasonably designed to any burden on inter-market competition undue burden on competition as these prevent the misuse of material, non- that is not necessary or appropriate in non-substantive amendments will public information by employees.41 furtherance of the purposes of the Act, ensure the rule text is accurate. The Exchange has conducted several as it relates solely to the location of C. Self-Regulatory Organization’s town halls with floor members in which open outcry trading on the Exchange. Statement on Comments on the the Exchange presented the The proposed rule change will merely functionality of the Virtual Trading permit open outcry trading that Proposed Rule Change Received From Crowd and has made the Virtual generally occurs while market Members, Participants, or Others Trading Crowd available for testing so participants are located in the same physical setting to occur while market No written comments were either that the Exchange will be ready to solicited or received. implement it if necessary. The Exchange participants are in a remote setting, has received positive feedback from connected by a technological solution III. Date of Effectiveness of the floor members regarding the Virtual (as electronic trading does). Proposed Rule Change and Timing for Trading Crowd and will continue to The Exchange believes that the Commission Action make updates as necessary and proposed rule change will relieve any appropriate in response to comments it burden on, or otherwise promote, Within 45 days of the date of receives to make the Virtual Trading competition. The Exchange believes the publication of this notice in the Federal Crowd replicate the open outcry trading proposed rule change will provide Register or within such longer period (i) experience on the physical Trading market participants with continuous as the Commission may designate up to Floor as much as possible. The access to open outcry trading when the 90 days of such date if it finds such Exchange believes this will provide the physical Trading Floor is unavailable, longer period to be appropriate and opportunity for as seamless a rollout as the Back-Up Trading Floor becomes publishes its reasons for so finding or possible if circumstances cause the inoperable or the Exchange otherwise (ii) as to which the Exchange consents, Exchange to make the Virtual Trading determines not to operate the Back-Up the Commission shall: (a) By order Crowd available. Trading Floor. The Exchange believes approve or disapprove such proposed this may facilitate continued, Finally, this proposal does not amend rule change, or (b) institute proceedings competitive price negotiations and the manner in which fees or other to determine whether the proposed rule trading of orders that the Exchange pricing incentives, such as caps, apply change should be disapproved. to floor participants. Any transaction understands are more difficult to originating from open outcry on the execute in an all-electronic trading IV. Solicitation of Comments Trading Floor is considered a floor environment without human Interested persons are invited to transaction. With offering FBMS interaction. Additionally, the proposed submit written data, views, and remotely, the Exchange has not rule change will provide customer arguments concerning the foregoing, amended the manner in which fees are orders represented for open outcry execution with access to the same pool including whether the proposed rule 40 See Phlx Options 9, Section 1; and Options 9, of liquidity when the Trading Floor is change is consistent with the Act. Section 5. See also Options 3, Section 22(d). unavailable to which those orders Comments may be submitted by any of 41 See Phlx General 9, Section 21. would have access when the Trading the following methods:

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Electronic Comments SECURITIES AND EXCHANGE further estimates that this information collection imposes a burden of one • COMMISSION Use the Commission’s internet hour, resulting in a total annual burden comment form (http://www.sec.gov/ [SEC File No. 270–184, OMB Control No. of eight hours. Based on the estimated 3235–0236] rules/sro.shtml); or wage rate, the total cost to the business • Send an email to rule-comments@ Submission for OMB Review; development company industry of the sec.gov. Please include File Number SR– Comment Request hour burden for complying with Form Phlx–2021–03 on the subject line. N–54C would be approximately $2,944.3 Upon Written Request, Copies Available The Commission also estimates that cost Paper Comments From: Securities and Exchange burden for outside professionals Commission, Office of FOIA Services, • associated with the filing of Form N– Send paper comments in triplicate 100 F Street NE, Washington, DC 54C increased to $560 because the to Secretary, Securities and Exchange 20549–2736 Commission believes that filers use Commission, 100 F Street NE, Extension: third-party vendors to comply with this Washington, DC 20549–1090. Form N–54C requirement. The collection of information under All submissions should refer to File Notice is hereby given that, pursuant Number SR–Phlx–2021–03. This file Form N–54C is mandatory. The to the Paperwork Reduction Act of 1995 information provided by the form is not number should be included on the (44 U.S.C. 3501 et seq.), the Securities kept confidential. An agency may not subject line if email is used. To help the and Exchange Commission (the conduct or sponsor, and a person is not Commission process and review your ‘‘Commission’’) has submitted to the required to respond to, a collection of comments more efficiently, please use Office of Management and Budget a information unless it displays a only one method. The Commission will request for extension of the previously currently valid control number. post all comments on the Commission’s approved collection of information The public may view the background internet website (http://www.sec.gov/ discussed below. documentation for this information rules/sro.shtml). Copies of the Certain investment companies can collection at the following website, submission, all subsequent elect to be regulated as business www.reginfo.gov. Comments should be amendments, all written statements development companies, as defined in directed to: (i) Desk Officer for the with respect to the proposed rule section 2(a)(48) of the Investment Securities and Exchange Commission, change that are filed with the Company Act of 1940 (‘‘Investment Office of Information and Regulatory Commission, and all written Company Act’’), under sections 55 Affairs, Office of Management and communications relating to the through 65 of the Investment Company Budget, Room 10102, New Executive proposed rule change between the Act. Under section 54(a) of the Office Building, Washington, DC 20503, Investment Company Act,1 any Commission and any person, other than or by sending an email to: company defined in section 2(a)(48)(A) those that may be withheld from the [email protected]; and (ii) and (B) of the Investment Company Act public in accordance with the David Bottom, Director/Chief may, if it meets certain enumerated provisions of 5 U.S.C. 552, will be Information Officer, Securities and eligibility requirements, elect to be Exchange Commission, c/o Cynthia available for website viewing and subject to the provisions of Sections 55 Roscoe, 100 F Street NE, Washington, printing in the Commission’s Public through 65 of the Investment Company DC 20549 or send an email to: PRA_ Reference Room, 100 F Street NE, Act by filing with the Commission a [email protected]. Written comments Washington, DC 20549, on official notification of election. Under section and recommendations for the proposed business days between the hours of 54(c) of the Investment Company Act,2 information collection should be sent 10:00 a.m. and 3:00 p.m. Copies of the any business development company within 30 days of publication of this filing also will be available for may voluntarily withdraw its election notice to www.reginfo.gov/public/do/ inspection and copying at the principal under section 54(a) of the Investment PRAMain. Find this particular office of the Exchange. All comments Company Act by filing a notice of information collection by selecting received will be posted without change. withdrawal of election with the ‘‘Currently under 30-day Review—Open Persons submitting comments are Commission. The Commission has for Public Comments’’ or by using the cautioned that we do not redact or edit adopted Form N–54C as the form for the search function. personal identifying information from notification of withdrawal of election to Dated: January 11, 2021. comment submissions. You should be subject to Sections 55 through 65 of J. Matthew DeLesDernier, the Investment Company Act. The submit only information that you wish Assistant Secretary. purpose of Form N–54C is to notify the to make available publicly. All [FR Doc. 2021–00733 Filed 1–13–21; 8:45 am] submissions should refer to File Commission that the business BILLING CODE 8011–01–P Number SR–Phlx–2021–03 and should development company withdraws its election to be subject to Sections 55 be submitted on or before February 4, 3 through 65 of the Investment Company The industry burden is calculated by 2021. multiplying the total annual hour burden to prepare Act. Form N–54C (eight) by the estimated hourly wage For the Commission, by the Division of The Commission estimates that on rate of $368 for a compliance attorney or other Trading and Markets, pursuant to delegated average approximately eight business business development company employee with authority.42 development companies file similar duties and responsibilities. The estimated wage figure is based on published rates for J. Matthew DeLesDernier, notifications on Form N–54C each year. compliance attorneys from the Securities Industry Assistant Secretary. Each of those business development and Financial Markets Association’s Report on [FR Doc. 2021–00591 Filed 1–13–21; 8:45 am] companies need only make a single Management & Professional Earnings in the filing of Form N–54C. The Commission Securities Industry 2013, modified by Commission BILLING CODE 8011–01–P staff to account for an 1800 hour work-year and inflation, and multiplied by 5.35 to account for 1 15 U.S.C. 80a–53(a). bonuses, firm size, employee benefits and overhead, 42 17 CFR 200.30–3(a)(12). 2 15 U.S.C. 80a–53(c). yielding an effective hourly rate of $2,944.

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