[Federal Register Volume 76, Number 72 (Thursday, April 14, 2011)]
[Notices]
[Pages 21080-21081]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-8924]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64265; File No. SR-Phlx-2011-43]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by NASDAQ OMX PHLX LLC Relating
to Permit Fees
April 8, 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 April 1, 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the Exchange's Fee Schedule to waive
Permit Fees for existing Exchange members or member organizations that
cease to conduct an options business, but continue to conduct an
equities business.
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 extend the waiver of
Permit Fees to existing members or member organizations that cease to
conduct an options business on Phlx XL II,\3\ but continue to conduct
business on NASDAQ OMX PSX (``PSX'') \4\ under a market participant
identifier (``MPID'') \5\ registered to the member or member
organization. The Exchange is proposing this waiver to incentivize
existing members and member organizations to continue to transact an
equities business at the Exchange.
---------------------------------------------------------------------------
\3\ Phlx XL II is the Exchange's electronic options trading
platform.
\4\ PSX is the Exchange's cash equities market electronic
trading platform.
\5\ An MPID is a four-letter code used by a member to categorize
its trading activity for a specific purpose.
---------------------------------------------------------------------------
The Exchange currently assesses members and member organizations
who are transacting business on the Exchange a Permit Fee of $1,100 per
month. The Exchange assesses members and member organizations who are
not transacting business on the Exchange a Permit Fee of $7,500 per
month. A member or member organization would not be assessed the $7,500
Permit Fee for not transacting business on the Exchange if that member
is either: (i) Solely a PSX Participant or (ii) engaged in any options
business at the Exchange in a particular month. If the Exchange member
or member organization meets the exemption criteria related to the
$7,500 Permit Fee, the member or member organization would be assessed
the $1,100 Permit Fee. In addition, a member or member organization
that sponsors an options participant \6\ would pay an additional Permit
Fee for each sponsored options participant.\7\
---------------------------------------------------------------------------
\6\ See Exchange Rule 1094 titled Sponsored Participants. A
Sponsored Participant may obtain authorized access to the Exchange
only if such access is authorized in advance by one or more
Sponsoring Member Organizations. Sponsored Participants must enter
into and maintain participant agreements with one or more Sponsoring
Member Organizations establishing a proper relationship(s) and
account(s) through which the Sponsored Participant may trade on the
Exchange.
\7\ See Securities Exchange Act Release No. 63569 (December 17,
2010), 75 FR 81323 (December 27, 2010) (SR-Phlx-2010-178).
---------------------------------------------------------------------------
At the time PSX began operations in October 2010, the Exchange
filed a rule change to waive the Application Fee, Initiation Fee,
Permit Fee and Account Fee for applicants applying to participate in
PSX (``October 2010 Rule Change'').\8\ The October 2010 Rule Change
applied the waivers to new Exchange members applying solely to
participate in PSX.\9\ Also, the October 2010 Rule Change did not apply
the waivers to an applicant seeking approval to participate solely in
the options market, or to an applicant seeking to participate in both
the equities and the options markets.\10\ Finally, the October 2010
Rule Change did not apply the waivers to members or member
organizations that ceased their options operations, but remained solely
as PSX Participants.
---------------------------------------------------------------------------
\8\ See Securities Exchange Act Release No. 63351 (November 19,
2010), 75 FR 73140 (November 29, 2010) (SR-Phlx-2010-54).
\9\ See Securities Exchange Act Release No. 63351 (November 19,
2010), 75 FR 73140 (November 29, 2010) (SR-Phlx-2010-54).
\10\ See Securities Exchange Act Release No. 63351 (November 19,
2010), 75 FR 73140 (November 29, 2010) (SR-Phlx-2010-54).
---------------------------------------------------------------------------
This filing proposes to extend the October 2010 Rule Change waiver
of the Permit Fee to those Exchange members and member organizations
that cease an options business, but continue to conduct an equities
business.\11\
---------------------------------------------------------------------------
\11\ These members and member organizations would not be
assessed an Application Fee or Initiation Fee because they are
already Exchange members or member organizations and have previously
paid those fees. In addition, the monthly Account Fee would not be
applicable to PSX Participants as MPIDs are used to identify member
firms' participation, not account numbers.
---------------------------------------------------------------------------
[[Page 21081]]
2. Statutory Basis
The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \12\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \13\ in
particular, in that it is an equitable allocation of reasonable fees
and other charges among Exchange members and other persons using its
facilities.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
The Exchange believes that it is reasonable to lower fees as an
incentive for existing Exchange members and member organizations to
continue to transact business on PSX, even after closing their options
operations.
The Exchange believes that the proposal is equitable because the
waiver applies uniformly to any existing members and member
organizations that cease options trading on the Exchange, but determine
to remain active PSX Participants.
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.\14\ 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.
---------------------------------------------------------------------------
\14\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------
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-2011-43 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-2011-43. 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-2011-43 and should be
submitted on or before May 5, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
---------------------------------------------------------------------------
\15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-8924 Filed 4-13-11; 8:45 am]
BILLING CODE 8011-01-P