[Federal Register Volume 75, Number 235 (Wednesday, December 8, 2010)]
[Notices]
[Pages 76511-76512]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-30702]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63406; File No. SR-Phlx-2010-165]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Transaction Billing and Other Clarifying Amendments
December 1, 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 November 23, 2010, NASDAQ OMX PHLX LLC (``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 Fee Schedule to: (i) Amend the
calculation of transaction fees for billing purposes from a settlement
date to trade date; and (ii) make other minor technical conforming
amendments to the Fee Schedule.
While changes to the Exchange's Fee Schedule pursuant to this
proposal are effective upon filing, the Exchange has designated this
proposal to be operative for invoices received by members and member
organizations for January 2011 monthly billing, except for the minor
technical amendments, which are effective upon filing.
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, 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 purpose of the proposed rule change is to amend the Exchange's
Fee Schedule to include language to specify that the Exchange will
calculate transaction fees on a calendar month trade date basis. The
Exchange is proposing to enhance its billing system to be consistent
with that of other NASDAQ OMX self-regulatory organizations.\3\
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\3\ NASDAQ Stock Market LLC and the NASDAQ Options Market both
utilize trade date billing.
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Currently, the Exchange calculates its transaction fees, except the
Options Regulatory Fee, on a settlement date basis.\4\ For example, a
member or member organization who will receive a billing invoice for
the month of November 2010 will be assessed fees for trades which
settled on November 1, 2010 through November 30, 2010 (``settlement
date billing''). In other words, the member is being assessed fees for
trades that occurred on October 29, 2010 (trade date) through November
29, 2010 (trade date).\5\ This is an example of the Exchange's current
settlement date billing.
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\4\ In the United States options settle on a trade date (``T'')
+ 1 basis or one day after the trade took place.
\5\ The Exchange invoices its members for fees on a monthly
basis.
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The Exchange is proposing to bill its members on a trade date basis
beginning with the January monthly billing. The impact to members would
be as follows for the December and January monthly billing periods. A
member who receives an invoice for the month of December 2010 would be
assessed fees from November 30, 2010 (trade date) through December 31,
2010 (trade date) instead of through December 30, 2010 (trade date). A
member who receives an invoice for the month of January 2011 would be
assessed fees from January 3, 2010 (trade date) through January 31,
2010 (trade date) (``trade date billing'') [sic].\6\ This January
monthly invoice would include fees for trade date January 3, 2010. In
the current billing system, the member would have been assessed fees
for settlement date January 3, 2010 in the December billing invoice,
but because of the conversion to trade date billing, the Exchange would
assess fees for January 3, 2010 as trade date billing and include that
day in the January monthly billing invoice. The Exchange would then
continue to bill members for each month thereafter including in that
month's invoice the first trade day of the month as the first billing
date and the last trade day of that month as the last billing date for
that monthly invoice.\7\
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\6\ The Commission notes that the references in this sentence to
2010 should be to 2011.
\7\ The Exchange intends to issue an Options Trader Alert
specifying the exact days that would be included in both the
December 2010 and January 2011 billing cycles as notice to members.
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Additionally, the Exchange intends to make a few minor technical
conforming amendments to the Fee Schedule to reflect the Exchange's
recent conversion to an LLC,\8\ recent amendments to Rule 1014 \9\ and
recent amendments to Section II of the Fee Schedule.\10\
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\8\ See Securities Exchange Act Release No. 62783 (August 27,
2010), 75 FR 54204 (September 3, 2010) (SR-Phlx-2010-104) (a rule
change to amend NASDAQ OMX PHLX from a Delaware corporation to a
Delaware limited liability company).
\9\ See Securities Exchange Act Release No. 63036 (October 4,
2010), 75 FR 62621 (October 12, 2010) (SR-Phlx-2010-131) (a rule
change to amend Exchange Rule 1014 to among other things amend the
definitions of Streaming Quote Traders and Remote Streaming Quote
Traders).
\10\ See Securities Exchange Act Release No. 63252 (November 5,
2010), 75 FR 69486 (November 12, 2010) (SR-Phlx-2010-150) (a rule
change to add the KBW Bank Index (``BKX'') to the Equity Option
Fees).
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While changes to the Exchange's Fee Schedule pursuant to this
proposal are effective upon filing, the Exchange has designated this
proposal to be operative for invoices received by members and member
organizations for January 2011 monthly billing, except for the minor
technical amendments, which are effective upon filing.
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 and other persons using its
facilities. The Exchange believes that the proposed conversion from
settlement date billing to calendar month trade date billing is
equitable because it would apply uniformly to all members. The Exchange
also believes that the proposal is reasonable because other self-
regulatory organizations already assess transaction fees on a trade
date basis.
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\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(4).
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The proposed technical conforming amendments to the Fee Schedule
are minor in nature and provide clarity to
[[Page 76512]]
the Fee Schedule by conforming the text of the Fee Schedule to the
other Rules of the Exchange.
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 the proposed
rule change, the Commission summarily may temporarily suspend 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-2010-165 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-2010-165. 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 the 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 Number SR-Phlx-2010-165 and should be
submitted on or before December 29, 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. 2010-30702 Filed 12-7-10; 8:45 am]
BILLING CODE 8011-01-P