[Federal Register Volume 76, Number 226 (Wednesday, November 23, 2011)]
[Notices]
[Pages 72480-72482]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-30201]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-65777; File No. SR-Phlx-2011-151]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
the Professional Routing Fee to the BATS Exchange, Inc.
November 17, 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 November 8, 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 Professional Routing Fee
governing pricing for Exchange members using the Phlx XL II system,\3\
for routing standardized equity and index option Professional orders to
the BATS Exchange, Inc. (``BATS'') 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 changes to the Fee Schedule pursuant to this proposal are
effective upon filing, the Exchange has designated these changes to be
operative on December 1, 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, on the Commission's Web site at
http://www.sec.gov/, 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
[[Page 72481]]
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 the
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 Professional orders in equity
and index options to BATS. The Exchange's Fee Schedule includes Routing
Fees for routing and executing Customer and Professional orders to away
markets. The Exchange currently assesses a Professional Routing Fee of
$0.36 per contract for option orders that are routed to BATS.\4\ BATS
recently adopted a definition for a professional and amended its Fee
Schedule to assess a fee of $.42 for professionals that remove
liquidity from BATS Options.\5\ The Exchange is proposing to amend its
Professional Routing Fee to BATS to recoup this fee.
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\4\ The Exchange currently assesses a Customer Routing Fee of
$0.36 per contract for option orders that are routed to BATS. This
fee will remain the same.
\5\ See Securities Exchange Act Release No. 65694 (November 4,
2011) (SR-BATS-2011-046).
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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. Each time NOS routes to
away markets NOS is charged a $0.06 clearing fee and, in the case of
certain exchanges, a transaction fee is also charged in certain
symbols, which fees are passed through to the Exchange. The Exchange is
proposing this amendment in order to recoup clearing and transaction
charges incurred by the Exchange when Professional orders are routed to
BATS.\7\ The Exchange proposes to recoup the $.42 per contract
professional taker fee for option orders that are routed to BATS along
with the $0.06 clearing fee which is incurred by the Exchange, as
explained herein.
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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).
\7\ The Exchange is proposing to recoup the $.42 per contract
professional transaction fee for orders routed to BATS along with
the $0.06 clearing fee which is incurred by the Exchange, as
explained above. See BATS Fees Schedule.
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As with all fees, the Exchange may adjust these Routing Fees in
response to competitive conditions by filing a new proposed rule
change.
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.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that this fee is reasonable because it seeks
to recoup costs that are incurred by the Exchange when routing
Professional orders to BATS on behalf of its members. Each destination
market's transaction charge varies and there is a standard clearing
charge for each transaction incurred by the Exchange. The Exchange
believes that the proposed Routing Fee would enable the Exchange to
recover the professional taker fee assessed by BATS, plus clearing fees
for the execution of Professional orders. The Exchange also believes
that the proposed Routing Fee is equitable and not unfairly
discriminatory because it would be uniformly applied to all
Professionals.
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\ 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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\10\ 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 email to [email protected]. Please include
File No. SR-Phlx-2011-151 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 No. SR-Phlx-2011-151. This file
number should be included on the subject line if email 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-2011-151 and should be
submitted on or before December 14, 2011.
[[Page 72482]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-30201 Filed 11-22-11; 8:45 am]
BILLING CODE 8011-01-P