[Federal Register Volume 75, Number 145 (Thursday, July 29, 2010)]
[Notices]
[Pages 44832-44833]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-18672]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62562; File No. SR-Phlx-2010-98]
Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
the Rebates and Fees for Adding and Removing Liquidity in Select
Symbols
July 23, 2010.
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 July 15, 2010, NASDAQ OMX PHLX, Inc. (``Phlx'' or ``Exchange'')
filed with the Securities and Exchange Commission (``SEC'' or
``Commission'') the proposed rule change as described in Items I, II,
and 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 Fee Schedule to both
add and remove certain options from the Exchange's current Rebates and
Fees for Adding and Removing Liquidity in Select Symbols in Section I
of the Fee Schedule.
While changes to the Fee Schedule pursuant to this proposal are
effective upon filing, the Exchange has designated these changes to be
operative for transactions settling on or after August 2, 2010.
The text of the proposed rule change is available on the Exchange's
Web site at http://nasdaqtrader.com/micro.aspx?id=PHLXfilings, at the
principal office of the Exchange, on the Commission's Web site at
http://www.sec.gov, 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
The Exchange proposes to increase liquidity and to attract order
flow by increasing the number of options to be included in the
Exchange's current Rebates and Fees for Adding and Removing Liquidity
in Select Symbols as well as removing three options. Currently, the
Exchange has 81 symbols \3\ (``Select Symbols'') to which this applies.
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\3\ These 81 currently include: AA, AAPL, ABK, ABX, AIG, ALL,
AMD, AMR, AMZN, ARIA, AXP, BAC, BRCD, C, CAT, CIEN, CIGX, CSCO,
DELL, DIA, DNDN, DRYS, EBAY, EK, F, FAS, FAZ, GDX, GE, GLD, GLW, GS,
HAL, IBM, INTC, IWM, IYR, JPM, LVS, MGM, MOT, MSFT, MU, NEM, NOK,
NVDA, ONNN, ORCL, PALM, PFE, POT, QCOM, QID, QQQQ, RIG, RIMM, RMBS,
SBUX, SDS, SIRI, SKF, SLV, SMH, SNDK, SPY, T, TBT, TZA, UAUA, UNG,
USO, UYG, V, VALE, VZ, WYNN, X, XHB, XLF, XRX and YHOO (``Select
Symbols'').
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Specifically, the Exchange proposes to add the following four
options to the Select Symbols: (i) BP p.l.c. Common Stock (``BP''),
(ii) Baidu, Inc. (``BIDU''), (iii) IShares FTSE/Xinhua China 25 Index
(``FXI''), and (iv) Exxon Mobil Corp. (``XOM''), collectively (``the
options''). These additional 4 symbols would be subject to the Rebates
and Fees for Adding and Removing Liquidity in Select Symbols.
Additionally, the Exchange proposes to remove the following three
options from the Select Symbols: (i) ARIAD Pharmaceuticals, Inc.
(``ARIA''), (ii) Star Scientific, Inc. (``CIGX'') and (iii) Palm, Inc.
(``PALM'').
The Exchange currently assesses a per-contract transaction charge
in various Select Symbols on six different categories of market
participants that submit orders and/or quotes that ``take,'' liquidity
from the Exchange: (i) Specialists, Registered Options Traders
(``ROTs''),\4\ Streaming Quote Traders (``SQTs'') \5\ and Remote
Streaming Quote Traders (``RSQTs''); \6\ (ii) customers; \7\ (iii)
specialists, SQTs and RSQTs that receive Directed Orders (``Directed
Participants'' \8\ or ``Directed Specialists, RSQTs, or SQTs'' \9\);
(iv) Firms; (v)
[[Page 44833]]
broker-dealers; and (vi) Professionals.\10\ The current per-contract
transaction charge depends on the category of market participant
submitting orders and/or quotes that ``take,'' liquidity from the
Exchange.
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\4\ A ROT includes a SQT, a RSQT and a Non-SQT, which by
definition is neither a SQT or a RSQT. See Exchange Rule 1014 (b)(i)
and (ii).
\5\ An SQT is an Exchange Registered Options Trader (``ROT'')
who has received permission from the Exchange to generate and submit
option quotations electronically through an electronic interface
with AUTOM via an Exchange approved proprietary electronic quoting
device in eligible options to which such SQT is assigned. See
Exchange Rule 1014(b)(ii)(A).
\6\ An RSQT is an ROT that is a member or member organization
with no physical trading floor presence who has received permission
from the Exchange to generate and submit option quotations
electronically through AUTOM in eligible options to which such RSQT
has been assigned. An RSQT may only submit such quotations
electronically from off the floor of the Exchange. See Exchange Rule
1014(b)(ii)(B).
\7\ This applies to all customer orders, directed and non-
directed.
\8\ For purposes of the fees and rebates related to adding and
removing liquidity, a Directed Participant is a Specialist, SQT, or
RSQT that executes a customer order that is directed to them by an
Order Flow Provider and is executed electronically on PHLX XL II.
\9\ See Exchange Rule 1080(l), ``* * * The term `Directed
Specialist, RSQT, or SQT' means a specialist, RSQT, or SQT that
receives a Directed Order.'' A Directed Participant has a higher
quoting requirement as compared with a specialist, SQT or RSQT who
is not acting as a Directed Participant. See Exchange Rule 1014.
\10\ The Exchange defines a ``professional'' as any person or
entity that (i) is not a broker or dealer in securities, and (ii)
places more than 390 orders in listed options per day on average
during a calendar month for its own beneficial account(s)
(hereinafter ``Professional''). See Exchange Rule 1000(b)(14).
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The Exchange also currently provides certain per-contract rebates
for orders or quotations that add liquidity in the Select Symbols. The
amount of the rebate depends on the category of participant whose order
or quote was executed as part of the Phlx Best Bid and Offer. Finally,
the Exchange assesses a $0.05 per contract fee for adding liquidity in
the select Symbols for Firms and Broker-Dealers.
While changes to the Fee Schedule pursuant to this proposal are
effective upon filing, the Exchange has designated these changes to be
operative for transactions settling on or after August 2, 2010.
2. Statutory Basis
The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \11\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \12\ in
particular, in that it is an equitable allocation of reasonable fees
and other charges among Exchange members. The Exchange believes that
the addition and removal of certain options from the Rebates and Fees
for Adding and Removing Liquidity in Select Symbols is both equitable
and reasonable, because the Select Symbols apply to all categories of
participants in the same manner. The Rebates and Fees for Adding and
Removing Liquidity in Select Symbols, which are currently applicable to
each market participant, will continue to apply to the Select Symbols.
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\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(4).
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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.
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 \13\ and paragraph (f)(2) of Rule 19b-4 \14\
thereunder. At any time within 60 days of the filing of such proposed
rule change, the Commission may summarily abrogate such rule change if
it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
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\13\ 15 U.S.C. 78s(b)(3)(A)(ii).
\14\ 17 CFR 240.19b-4(f)(2).
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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 (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. Please include
File Number SR-Phlx-2010-98 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-Phlx-2010-98. This file
number should be included on the subject line if e-mail 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 Web site (http://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 Web site 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 such filing also will be available for
inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File No. SR-Phlx-2010-98 and should be
submitted on or before August 19, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-18672 Filed 7-28-10; 8:45 am]
BILLING CODE 8010-01-P