[Federal Register Volume 75, Number 246 (Thursday, December 23, 2010)]
[Notices]
[Pages 80869-80870]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-32222]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63562; File No. SR-Phlx-2010-177]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by NASDAQ OMX PHLX, Inc. Relating
to Options Overlying QNET
December 16, 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 December 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 for
Sector Index Options to expand the promotional pricing period for
options overlying the NASDAQ Internet Index (``QNET'').
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 Exchange previously filed a rule change to add additional
transaction fees to Category III of its Fee Schedule, titled Sector
Index Options, for options overlying QNET from trade date April 30,
2010 through trade date December 30, 2010.\3\ The purpose of the
promotional pricing is to assess a fixed rate across all market
participants for a specified period of time to incentivize members to
trade QNET.
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\3\ See Securities Exchange Act Release No. 61984 (April 26,
2010), 75 FR 23313 (May 3, 2010) (SR-Phlx-2010-60).
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The Exchange currently assesses a $.20 per contract transaction fee
for options overlying QNET for the following market participants:
Customers, registered options traders (on-floor), specialists,
professionals,\4\ firms and broker-dealers. Pursuant to the rule
change, on December 31, 2010, the Exchange will assess the options
transaction charges for sector index options as designated by category
of market participant on the Fee Schedule.\5\
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\4\ 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).
\5\ See footnote 3. The Exchange's filing eliminates the $.20
per contract transaction promotional pricing after December 30,
2010, and instead assesses members the applicable sector index
options transaction charges, by market participant, starting on
December 31, 2010. For example, for transactions in QNET sector
index options, a customer would no longer be assessed the $.20 per
contract on trade date December 31, 2010, but instead would be
assessed the option transaction charge, which is currently $.44 per
contract.
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The Exchange is proposing to expand the promotional pricing to
trade date December 31, 2010. This proposal would eliminate the $.20
per contract transaction promotional pricing after December 31, 2010,
and would instead cause members to be assessed the applicable sector
index options transaction charges, by market participant, starting on
January 3, 2011 (the next trade date). For example, for transactions in
QNET sector index options, a customer would no longer be assessed $.20
per contract on trade date January 3, 2011, but instead would be
assessed the option transaction charge, which is currently $.44 per
contract.
The Exchange recently filed a proposal to amend its calculation of
transaction fees for billing purposes from settlement date to trade
date billing.\6\ In that filing, the Exchange amended the billing cycle
so that a member who receives an invoice for the month of December 2010
will be assessed fees from November 30, 2010 (trade date) through
December 31, 2010 (trade date) instead of through December 30, 2010
(trade date).\7\ The Exchange is proposing to amend the QNET
promotional pricing to allow members to obtain the promotional pricing
through the end of the December billing period. The Exchange also
proposes amending the Fee Schedule to reflect this amendment of the
date for the QNET promotional period.
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\6\ See Securities Exchange Act Release No. 63406 (December 1,
2010), 75 FR 76511 (December 8, 2010) (SR-Phlx-2010-165).
\7\ See footnote 6.
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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 \8\ in general, and furthers
the objectives of Section 6(b)(4) of the Act \9\ in particular, in that
it is an equitable allocation of reasonable fees and other charges
among Exchange members. The Exchange believes that expanding the
promotional pricing for sector index option fees for QNET is equitable
because all market participants would be able to obtain the promotional
pricing for the extra day. The Exchange further believes that offering
the $.20 per contract fee for a specified promotional period and
thereafter assessing the standard sector index option transaction fees
is also equitable because it is intended to encourage trading in QNET.
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\8\ 15 U.S.C. 78f(b).
\9\ 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 \10\ and
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paragraph (f)(2) of Rule 19b-4 \11\ 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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\10\ 15 U.S.C. 78s(b)(3)(A)(ii).
\11\ 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-2010-177 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-2010-177. 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. 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-2010-177 and should be submitted on or before
January 13, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-32222 Filed 12-22-10; 8:45 am]
BILLING CODE 8011-01-P