[Federal Register Volume 75, Number 153 (Tuesday, August 10, 2010)]
[Notices]
[Pages 48391-48393]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-19716]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62631; File No. SR-Phlx-2010-102]
Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Routing Fees
August 3, 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 21, 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 its fees governing pricing for
Exchange members using the Phlx XL II system,\3\ for routing
standardized equity and index option customer and professional orders
to away markets for execution.
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\3\ For a complete description of Phlx XL II, see Securities
Exchange Act Release No. 59995 (May 28, 2009), 74 FR 26750 (June 3,
2009) (SR-Phlx-2009-32). The instant proposed fees will apply only
to option orders entered into, and routed by, the Phlx XL II system.
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[[Page 48392]]
The text of the proposed rule change is available on the Exchange's
Web site at http://www.nasdaqtrader.com/micro.aspx?id=PHLXRulefilings,
at the principal office of the Exchange, at the Commission's Public
Reference Room, and on the Commission's Web site at http://www.sec.gov.
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 purpose of the proposed rule change is to recoup costs that the
Exchange incurs for routing and executing customer and professional
orders in equity and index options to away markets.
In May 2009, the Exchange adopted Rule 1080(m)(iii)(A) to establish
Nasdaq Options Services LLC (``NOS''), a member of the Exchange, as the
Exchange's exclusive order router.\4\ NOS is utilized by the Phlx XL II
system solely to route orders in options listed and open for trading on
the Phlx XL II system to destination markets.
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\4\ See Securities Exchange Act Release No. 59995 (May 28,
2009), 74 FR 26750 (June 3, 2009) (SR-Phlx-2009-32).
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Currently, the Exchange's Fee Schedule includes Routing Fees for
both customer and professional orders. The Exchange proposes to assess
a Routing Fee of $.26 per contract in customer option orders that are
routed to the International Securities Exchange LLC (``ISE'') and
subject to the ISE's Rebates and Fees for Adding and Removing Liquidity
in Select Symbols to apply only for orders of 100 contracts or more.
The Exchange proposes to assess a Routing Fee of $.31 per contract in
professional option orders that are routed to the International
Securities Exchange LLC (``ISE'') and subject to the ISE's Rebates and
Fees for Adding and Removing Liquidity in Select Symbols.
The Exchange would continue to assess $.06 for all other customer
orders routed to ISE and $0.24 per contract for all other professional
orders routed to ISE, where those orders are not subject to the ISE's
Rebates and Fees for Adding and Removing Liquidity in Select Symbols or
the customer orders are for less than 100 contracts. The Exchange is
proposing to name these proposed fees ``ISE Select Symbols.'' The
Exchange also proposes to add a note to the Fee Schedule to indicate
that the fee for customer orders in ISE Select Symbols applies to
orders of 100 or more contracts. The Exchange is proposing this
amendment in order to recoup clearing and transaction charges incurred
by the Exchange when orders are routed to ISE in the ISE Select
Symbols, and in the case of customer orders for 100 or more contracts.
Each destination market's transaction charge varies and there is a
standard clearing charge for each transaction incurred by the Exchange.
The Exchange proposes this fee change to account for an increase in
cost for routing to ISE relative to the fees in the ISE Select
Symbols.\5\
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\5\ ISE assesses a taker fee of $0.20 for priority customer
orders of 100 or more contracts and taker fee of $.25 for Customer
(Professional) orders in its rebates and fees for adding and
removing liquidity in select symbols. See Securities Exchange Act
Release No. 61869 (April 7, 2010), 75 FR 19449 (April 14, 2010) (SR-
ISE-2010-25).
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2. Statutory Basis
The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \6\ in general, and furthers
the objectives of Section 6(b)(4) of the Act \7\ in particular, in that
it is an equitable allocation of reasonable fees and other charges
among Exchange members. The Exchange believes that this fee is
reasonable because it seeks to recoup costs that are incurred by the
Exchange when routing customer and professional orders to ISE in the
select symbols, and for customer orders when the orders are for 100 or
more contracts, on behalf of its members. The Exchange also believes
that the proposed fee change to both customers and professionals is
equitable because it will be uniformly applied to all customers and
professionals.
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\6\ 15 U.S.C. 78f(b).
\7\ 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 \8\ and paragraph (f)(2) of Rule 19b-4 \9\
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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\8\ 15 U.S.C. 78s(b)(3)(A)(ii).
\9\ 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-2010-102 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-2010-102. 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
[[Page 48393]]
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-2010-102 and should be
submitted on or before August 31, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-19716 Filed 8-9-10; 8:45 am]
BILLING CODE 8010-01-P