[Federal Register Volume 76, Number 22 (Wednesday, February 2, 2011)]
[Notices]
[Pages 5848-5850]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-2227]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63781; File No. SR-Phlx-2011-09]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
the Order Entry Port Fee
January 26, 2011.
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 January 21, 2011, 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 the applicability of the Order Entry
Port Fee.\3\ 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
[[Page 5849]]
the Commission's Public Reference Room.
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\3\ The Order Entry Port Fee is a connectivity fee assessed on
members in connection with routing orders to the Exchange via an
external order entry port. Members access the Exchange's network
through order entry ports. A member organization may have more than
one order entry port.
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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
applicability of the Order Entry Port Fee. The Exchange currently
assesses an Order Entry Port Fee per month per mnemonic \4\ of $500.
This fee is assessed on members regardless of whether the order entry
mnemonic is active \5\ during the billing month. The fee is assessed
regardless of usage, and solely on the number of order entry ports
assigned to each member organization.
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\4\ Order entry mnemonics are codes that identify member
organization order entry ports.
\5\ An order entry mnemonic is considered active if a member
organization sends at least one order to the Exchange using that
order entry mnemonic during the applicable billing month. See
Securities Exchange Act Release No. 58728 (October 3, 2008), 73 FR
59695 (October 9, 2008) (SR-Phlx-2008-70).
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The Exchange is proposing to modify the manner in which members are
assessed the Order Entry Port Fee as related to complex order.\6\ The
Exchange proposes to waive the $500 per month per mnemonic Order Entry
Port Fee for mnemonics used exclusively for complex orders where one of
the components of the complex order is the underlying security.\7\
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\6\ A complex order is a spread, straddle, combination, ratio or
collar order, all of which consist of more than one component,
priced like a single order at a net debit or credit based on the
prices of the individual components. See Exchange Rule 1080,
Commentary .08(a)(i).
\7\ The Exchange recently filed a proposed rule change to add
complex orders where one component is the underlying stock or ETF to
the functionality on its electronic trading platform for options,
Phlx XL. The Exchange also amended its definition of complex orders
in Exchange Rule 1080 as follows: Complex Orders is any order
involving the simultaneous purchase and/or sale of two or more
different options series in the same underlying security, priced at
a net debit or credit based on the relative prices of the individual
components, for the same account, for the purpose of executing a
particular investment strategy. Furthermore, a Complex Order can
also be a stock-option order, which is an order to buy or sell a
stated number of units of an underlying stock or ETF coupled with
the purchase or sale of options contract(s). The Exchange also
proposed to permit complex orders consisting of up to six
components. See Securities Exchange Act Release No. 63509 (December
9, 2010), 76 FR 2733 (January 14, 2011) (SR-Phlx-2010-157) [sic].
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The Exchange believes that members who transact complex orders may
require an increased number of ports due to the member's stock
clearance arrangements, which may require additional mnemonics. The
Exchange is proposing to limit the fees that would be assessed on
members requiring additional ports to transact stock-option orders.\8\
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\8\ A complex order with one component that is the underlying
stock or Exchange Traded Fund Share (``ETF'') is also referred to as
a stock-option order.
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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 \9\ in general, and furthers
the objectives of Section 6(b)(4) of the Act \10\ 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 proposal is equitable and reasonable because
all members would be able to limit fees related to order entry ports
for such complex orders that are stock-option orders, which may require
additional mnemonics.
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\9\ 15 U.S.C. 78f(b).
\10\ 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.\11\ 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. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.
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\11\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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-2011-09 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-2011-09. 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-
[[Page 5850]]
2011-09 and should be submitted on or before February 23, 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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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-2227 Filed 2-1-11; 8:45 am]
BILLING CODE 8011-01-P