[Federal Register Volume 75, Number 39 (Monday, March 1, 2010)]
[Notices]
[Pages 9273-9274]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-4135]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61570; File No. SR-Phlx-2010-19]
Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change, as Modified
by Amendment No. 1, Relating to Routing Fees
February 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 February 2, 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 substantially
prepared by the Exchange. On February 19, 2010, the Exchange filed
Amendment No. 1 to the proposed rule change.\3\ The Commission is
publishing this notice to solicit comments on the proposed rule change,
as modified by Amendment No. 1, from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Partial Amendment No. 1 includes minor clarifications to the
purpose section of the proposed rule change, and makes a non-
substantive change to the rule text itself.
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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 Routing Fees.
The text of the proposed rule change is available on the Exchange's
Web site at http://nasdaqtrader.com/micro.aspx?id=PHLXfilings, on the
Commission's Web site at http://www.sec.gov, 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.
[[Page 9274]]
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 orders in equity and
index options to certain better-priced 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 a Routing Fee of
$0.50 per contract side for customer orders routed to NYSE Arca, Inc.
(``NYSEArca'') in penny options for execution \5\ and a Routing Fee of
$.40 per contract side for orders routed to the NASDAQ Options Market
(``NOM'') in penny options for execution.\6\ The Exchange proposes
adding a Routing Fee of $.56 per contract side for customer orders
routed to NOM in the NASDAQ 100 Index Option (``NDX'') and the mini
NASDAQ 100 Index Option (``MNX'').\7\
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\5\ See Securities Exchange Act Release No. 61374 (January 19,
2010), 75 FR 4123 (January 26, 2010) (SR-PHLX-2010-01).
\6\ See SR-Phlx-2010-15.
\7\ See SR-NASDAQ-2010-06. The NASDAQ Stock Market LLC
(``NASDAQ'') recently established pricing for NDX and MNX.
Specifically, NASDAQ established a fee of $.50 per executed contract
for Customers, Firms, and Non-NOM Market Makers to remove liquidity
in NDX and MNX Options and a $.40 per executed contract for NOM
Market Makers to remove liquidity in NDX and MNX.
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There will be no Routing Fees for orders routed to away markets
other than NYSEArca and NOM in penny options. Also, except for NDX,
there will be no cost for executing orders at away markets in non-penny
classes. The Exchange is currently only proposing to assess a Routing
Fee in NDX and MNX for orders routed to NOM.
NOS incurs a cost of $.50 in routing to NOM in NDX and MNX.
Additionally, the Exchange incurs a clearing charge from the Options
Clearing Corporation. Accordingly, the Exchange is proposing this fee
to recoup transaction and clearing costs. The Exchange believes that
the routing fees proposed will enable the Exchange to recover these
costs.
2. Statutory Basis
The Exchange believes that its proposal to amend its schedule of
fees 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 because all members and member
organizations would be assessed the same fee for NDX and MNX orders
routed to and executed on NOM. The Exchange believes that this fee
would enable it to recoup costs associated with routing customer orders
on behalf of its members.
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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 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 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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\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-2010-19 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-2010-19. 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 Number SR-Phlx-2010-19 and should be
submitted on or before March 22, 2010.
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\12\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-4135 Filed 2-26-10; 8:45 am]
BILLING CODE 8011-01-P