[Federal Register Volume 75, Number 78 (Friday, April 23, 2010)]
[Notices]
[Pages 21382-21384]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-9398]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61933; File No. SR-Phlx-2010-56]
Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Fees and Rebates for Adding and Removing Liquidity
April 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 April 1, 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 and rebates for adding and
removing liquidity by establishing that professional orders will not be
assessed a charge for electronic auctions.
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, at the Commission's Public Reference
Room, and at the Commission's Public
[[Page 21383]]
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 amend the fees and
rebates for adding and removing liquidity to clarify the applicability
of these fees to Professionals in an electronic auction.
The Exchange recently amended its rules to give certain non-broker-
dealer orders the same priority as broker-dealer orders.\3\ Also, the
Exchange recently filed a proposed rule change to amend its Fee
Schedule to adopt a new category of fees, ``professional.'' \4\
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\3\ See Securities Exchange Act Release No. 61802 (March 30,
2010) (SR-Phlx-2010-05).
\4\ See SR-Phlx-2010-51 and SR-Phlx-2010-55.
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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'').\5\
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\5\ A Professional will be treated in the same manner as an off-
floor broker-dealer for purposes of Rules 1014(g)(except with
respect to all-or-none orders, which will be treated like customer
orders), 1033(e), 1064.02 (except professional orders will be
considered customer orders subject to facilitation), and 1080.08 as
well as Options Floor Procedure Advices B-6, B-11 and F-5. Member
organizations must indicate whether orders are for professionals.
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The Exchange proposes to amend its fees and rebates for adding and
removing liquidity, known as a ``maker/taker'' model in order that
Professionals will not be assessed a charge for electronic auctions
which include, without limitation, the Complex Order Live Auction
(``COLA''), and Quote and Market Exhaust auctions. Currently,
electronic auctions are free to Customers, Directed Participants,
Specialists, ROTs, SQTs and RSQTs. Firms and broker-dealers are
assessed the appropriate charge for removing liquidity.
2. Statutory Basis
The Exchange believes that its proposal to amend its schedule of
fees 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
Professionals should not be assessed the fees and rebates for adding
and removing liquidity in electronic auctions as Specialists, ROTs,
SQTs and RSQTs are not assessed such fees in electronic auctions.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(4).
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The impact of the proposal upon the net fees paid by a particular
market participant will depend on a number of variables, most important
of which will be its propensity to add or remove liquidity in the
underlying symbols. The Exchange operates in a highly competitive
market in which market participants can readily direct order flow to
another exchange if they deem fee levels at a particular exchange to be
excessive. The Exchange believes that the proposed fees it charges for
options overlying the various symbols remain competitive with fees
charged by other exchanges and, therefore, continue to be reasonable
and equitably allocated to those members that opt to direct orders to
the Exchange rather than to a competing 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 \8\ and paragraph (f)(2) of Rule 19b-4 \9\
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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\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-2010-56 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-2010-56. 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
[[Page 21384]]
should refer to File Number SR-Phlx-2010-56 and should be submitted on
or before May 14, 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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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2010-9398 Filed 4-22-10; 8:45 am]
BILLING CODE 8011-01-P