[Federal Register Volume 76, Number 45 (Tuesday, March 8, 2011)]
[Notices]
[Pages 12780-12781]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-5142]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64010; File No. SR-Phlx-2011-26]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Inactive Nominee Fee
March 2, 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 February 22, 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 its Fee Schedule to memorialize its
Inactive Nominee \3\ Fee. 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, on
the Commission's Web site at http://www.sec.gov, and at the
Commission's Public Reference Room.
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\3\ The term ``inactive nominee'' means a natural person
associated with and designated as such by a member organization and
who has been approved for such status and is registered as such with
the Membership Department. An inactive nominee shall have no rights
or privileges under a permit unless and until said inactive nominee
becomes admitted as a member of the Exchange pursuant to the By-Laws
and Rules of the Exchange. An inactive nominee merely stands ready
to exercise rights under a permit upon notice by the member
organization to the Membership Department on an expedited basis. See
Exchange Rule 1(i).
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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 memorialize the
Inactive Nominee Fee in the Exchange's Fee Schedule.
The Exchange currently assesses a member organization an Inactive
Nominee Fee of $500 to maintain an individual's inactive nominee status
for a six month period, as provided for in Exchange By-Law Article XII,
Section 12-10.\4\ The member organization is required to pay a fee for
the privilege of maintaining the inactive nominee status of an
individual.\5\ An inactive nominee's status terminates after six months
unless it has been reaffirmed in writing by the Member Organization or
is terminated sooner.\6\ An inactive nominee is assessed the $500 fee
every time the status is reaffirmed.\7\
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\4\ Pursuant to Exchange By-Law Article XII, Section 12-10, a
member organization may designate an individual as an inactive
nominee. To be eligible to be an inactive nominee an individual must
be approved as eligible to hold a permit in accordance with the
Exchange's By-Laws and Rules. An inactive nominee has no rights and
privileges of a permit holder until the inactive nominee becomes an
effective permit holder and all applicable Exchange fees are paid.
See By-Law Article XII, Section 12-10.
\5\ See Securities Exchange Act Release No. 39851 (April 10,
1998), 63 FR 19282 (April 17, 1998) (SR-Phlx-97-35) (a rule change
which subjected inactive nominees to the membership application
process, including fees, including a fee for the privilege of
maintaining an inactive nominee status).
\6\ See By-Law Article XII, Section 12-10.
\7\ An inactive nominee is also assessed the Application and
Initiation Fees when such person applies to be an inactive nominee.
Such fees are reassessed if there is a lapse in the inactive
nominee's membership status. However, an inactive nominee would not
be assessed the Application and Initiation Fees if such inactive
nominee applied for membership without a lapse in that individual's
association with a particular member organization. See Securities
Exchange Act Release No. 63780 (January 26, 2011), 76 FR 5846
(February 2, 2011) (SR-Phlx-2011-07). See also By-Law Article XII,
Section 12-10.
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The Exchange has assessed the Inactive Nominee Fee of $500 since
the inception of the inactive nominee category.\8\ This fee was
administered pursuant to By-Law Article XII, Section 12-10, and never
appeared in the Exchange's Fee Schedule. In recent years, the Exchange
has memorialized additional fees within the Fee Schedule to create a
centralized location for fees. The Exchange desires to memorialize this
fee in the Fee Schedule and to make clear which membership fees an
Inactive Nominee Fee [sic] would be assessed and when an inactive
nominee would be assessed such fees by adding explanatory text to the
Fee Schedule.
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\8\ Originally, the inactive nominee was defined in Exchange
Rule 21, but the definition was later moved to the definitions
section in Rule 1.
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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.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that it is reasonable to memorialize the
Inactive Nominee Fee on the Exchange's Fee Schedule so the fee is
transparent to all members. While the Exchange has been assessing the
Inactive Nominee Fee since 1998, the fee was administered pursuant to
By-Law Article XII, Section 12-10 and was not located on the Fee
Schedule. The Exchange believes that placing the fee on the Fee
Schedule would summarize all the membership fees in one location and
clarify all the fees an individual is subject to for the privilege of
maintain [sic] an inactive nominee status.
The Exchange believes that it is equitable to place the Inactive
Nominee Fee on the Fee Schedule because it uniformly impacts all
inactive nominees as they are all subject to the Inactive Nominee Fee.
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.
[[Page 12781]]
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-2011-26 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-2011-26. 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-2011-26 and should be
submitted on or before March 29, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
Cathy H. Ahn,
Deputy Secretary.
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\12\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2011-5142 Filed 3-7-11; 8:45 am]
BILLING CODE 8011-01-P