[Federal Register Volume 76, Number 3 (Wednesday, January 5, 2011)]
[Notices]
[Pages 614-615]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-33267]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63619; File No. SR-Phlx-2010-181]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change as Modified by Amendment No. 1
Thereto by NASDAQ OMX PHLX LLC Relating to Active SQF Port Fee
December 29, 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 16, 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
Exchange submitted an amendment to the proposed rule change on December
29, 2010 (``Amendment No. 1'') to clarify the purpose of the proposed
fee change. The Commission is publishing this notice to solicit
comments on the proposed rule change, as amended, 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 Active Specialized Quote Feed
(``SQF'') Port Fee to create a tiered schedule of fees.
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 trades occurring on and after January 3,
2011.
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 Active SQF
Port Fees to establish a tiered schedule of fees.\3\ SQF is an
interface that enables specialists, Streaming Quote Traders (``SQTs'')
and Remote Streaming Quote Traders (``RSQTs'') to connect and send
quotes into Phlx XL. The Exchange released SQF 6.0 on October 11,
2010.\4\ The Exchange anticipates that member organizations will
utilize both SQF 5.0 and SQF 6.0 for a period of time.
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\3\ Active SQF ports refer to ports that receive inbound quotes
at any time within that month.
\4\ See Securities Exchange Act Release No. 63034 (October 4,
2010), 75 FR 62441 (October 8, 2010) (SR-Phlx-2010-124).
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Currently, the Exchange assesses an Active SQF Port Fee of $500 per
month per port. The Exchange would propose to eliminate the $500 Active
Port Fee and instead assess members an Active Port Fee as follows:
[[Page 615]]
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Cost per port
Number of Active SQF Ports per month
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0-4..................................................... $350
5-18.................................................... 1,250
19-40................................................... 2,350
40 and over............................................. 3,000
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The Exchange proposes to cap the Active SQF Port Fees at $40,000
per month through March 31, 2011 (``Cap''). On April 1, 2011, there
will no longer be a Cap in effect for the Active SQF Port Fee. The
purpose of the Cap is to ensure member organizations are not assessed
fees in excess of the Active SQF Port fees, which fees would have been
charged under the fixed rate of $500 per month per port, during the
transition from SQF 5.0 to SQF 6.0.\5\ The Exchange believes that
member organizations will utilize less SQF 6.0 ports than SQF 5.0 ports
and that all member organizations should have transitioned to SQF 6.0
by March 31, 2011. The Exchange believes that the proposed tiered
Active SQF Port Fees will create a more efficient use of Exchange
resources by providing members an incentive to utilize the minimum
number of ports necessary for their business. The Exchange believes
that all members will benefit from a faster and more efficient system
if ports are efficiently utilized by members.\6\
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\5\ See Securities Exchange Act Release No. 63034 (October 4,
2010), 75 FR 62441 (October 8, 2010) (SR-Phlx-2010-124).
\6\ See Amendment No. 1 (adding the preceding two sentences).
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The Exchange will continue to account for the number of SQF
interfaces in order that member organizations are not assessed port
fees for use of the prior version of the interface (SQF 5.0) while
transitioning to (and paying for) the new version (SQF 6.0).\7\
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\7\ See Securities Exchange Act Release No. 63145 (October 21,
2010), 75 FR 66168 (October 21, 2010) (SR-Phlx-2010-143) (a proposal
to amend the Active SQF Port Fee so that member organizations are
not assessed a fee for use of SQF 5.0 active ports to the extent the
member is paying for the same (or greater) number of SQF 6.0 active
ports).
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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 on January 3, 2011.
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 and other persons using its facilities. The
Exchange believes that assessing fees at the aforementioned rates is
equitable because the fee would be applied equally to all members. The
Exchange also believes that the proposal is reasonable because through
the transition period the Exchange is proposing a Cap to ensure members
are not burdened by proposed tiered schedule of fees.
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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 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-2010-181 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-2010-181. 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-2010-181 and should be
submitted on or before January 26, 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. 2010-33267 Filed 1-4-11; 8:45 am]
BILLING CODE 8011-01-P