[Federal Register Volume 76, Number 10 (Friday, January 14, 2011)]
[Notices]
[Pages 2733-2734]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-716]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63679; File No. SR-Phlx-2010-187]
Self-Regulatory Organizations; NASDAQ OMX PHLX, LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Routing Fees
January 7, 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 December 29, 2010, NASDAQ OMX PHLX, Inc. [sic] (``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 governing pricing for
Exchange members using the Phlx XL II system,\3\ for routing
standardized equity and index option Customer and Professional orders
to away markets for execution.
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\3\ For a complete description of Phlx XL II, see Securities
Exchange Act Release No. 59995 (May 28, 2009), 74 FR 26750 (June 3,
2009) (SR-Phlx-2009-32). The instant proposed fees will apply only
to option orders entered into, and routed by, the Phlx XL II system.
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While fee changes pursuant to this proposal are effective upon
filing, the Exchange has designated these changes to be operative on
January 3, 2011.
The text of the proposed rule change is available on the Exchange's
Web site at http://www.nasdaqtrader.com/micro.aspx?id=PHLXRulefilings,
at the principal office of the Exchange, at the Commission's Public
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 recoup costs that the
Exchange incurs for routing and executing Customer and Professional
orders in equity and index options to the International Securities
Exchange LLC (``ISE'') in Select Symbols \4\ for orders of 100 or more
contracts. ISE recently amended its fees and the amendments proposed
herein reflect the proposed ISE amendments.\5\
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\4\ Select Symbols refer to the symbols which are subject to
ISE's Rebates and Fees for Adding and Removing Liquidity in Select
Symbols in ISE's Schedule of Fees.
\5\ See SR-ISE-2010-120.
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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.\6\ 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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\6\ 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 assesses a Routing Fee of $0.26 per
contract for Customer orders and $0.31 per contract for Professional
orders. The Exchange proposes to amend its Routing Fees for orders
routed to ISE in Select Symbols by assessing $0.18 per contract for
Customer orders and $0.34 per contract for Professional Orders.
The Exchange also proposes to remove a footnote reference to the
ISE Select Symbols which states ``[t]his fee applies to orders of 100
or more contracts.'' This proposal reflects recent amendments to ISE's
fees, which eliminate the fee differential between priority customers
with 100 or more contracts and priority customers with less than 100
contracts.\7\ All other orders that are routed to ISE, which are not in
the Select Symbols, would be assessed the rates labeled ``ISE''.
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\7\ See SR-ISE-2010-120. See also E-mail from Angela S. Dunn,
Assistant General Counsel, Phlx, to Johnna B. Dumler, Special
Counsel, Commission, dated January 5, 2011.
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The Exchange is proposing these fees to recoup the majority of
transaction and clearing costs associated with routing Customer and
Professional orders to ISE in Select Symbols. These proposed fees will
enable the Exchange to recover the transaction fees assessed by ISE,
where applicable, plus clearing fees for the execution of Customer and
Professional orders routed from the Phlx XL II system. As with all
fees, the Exchange may adjust these Routing Fees in response to
competitive conditions by filing a new proposed rule change.
While fee changes pursuant to this proposal are effective upon
filing, the Exchange has designated these changes 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. The Exchange believes that these fees are
reasonable because the Exchange is seeking to recoup costs that it
incurs when routing orders to ISE in Select Symbols on
[[Page 2734]]
behalf of its members. The Exchange believes that the proposed fee
amendments are equitable because these amendments mirror recent
proposed amendments to ISE's Schedule of Fees and are being uniformly
applied to the Exchange's 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 such 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-2010-187 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-2010-187. 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 No. SR-Phlx-2010-187 and should be
submitted on or before February 4, 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. 2011-716 Filed 1-13-11; 8:45 am]
BILLING CODE 8011-01-P