[Federal Register Volume 77, Number 7 (Wednesday, January 11, 2012)]
[Notices]
[Pages 1764-1766]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-321]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66111; File No. SR-Phlx-2011-187]


Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Waive PSX 
Port Pair Fees for Certain Newly-Added Routable Port Pairs

January 5, 2012.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\

[[Page 1765]]

notice is hereby given that on December 28, 2011, NASDAQ OMX PHLX LLC 
(``Exchange'' or ``PHLX''), filed with the Securities and Exchange 
Commission (``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 offer a waiver of PSX Port Pair fees for 
certain newly-added routable port pairs during the months of January 
through March, 2012.
    The text of the proposed rule change is below. Proposed new 
language is italicized.

 VIII. NASDAQ OMX PSX FEES

Access Services Fees[dagger]

    The following charges are assessed by the Exchange for ports to 
establish connectivity to the NASDAQ OMX PSX market, as well as 
ports to receive data from the NASDAQ OMX PSX market: $400 per month 
for each port pair, other than Multicast ITCH[reg] data feed pairs, 
for which the fee is $1000 per month. The $400 port pair fee will be 
waived from January 2012 through March 2012 for a single port pair 
subscribed to by a member used for routing during this free period. 
To be eligible for the fee waiver, the member must increase the 
number of routable ports it has as of December 31, 2011 and must 
send routable order flow through the designated port pair at some 
point during the free period, otherwise the monthly fee will apply.
    An additional $200 per month for each Internet port that 
requires additional bandwidth.
* * * * *

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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange is amending its fee schedule to waive fees assessed on 
a single port pair used for routing orders from PSX, during the months 
of January through March, 2012. The Exchange recently began allowing 
orders placed on the Exchange to route away from PSX for execution.\3\ 
The Exchange is proposing to waive, for a limited time, the fee 
assessed for a single port pair under Chapter VIII of the NASDAQ OMX 
PHLX Fee Schedule, applicable to a member firm that adds an additional 
port and uses that port for routing on the PSX market during the months 
of January through March, 2012. The Exchange believes that waiving the 
port pair fee will encourage market participants to utilize the routing 
function of the market, and to take advantage of new routing strategies 
made available to market participants.\4\
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    \3\ See Securities Exchange Act Release No. 65469 (October 3, 
2011), 76 FR 62486 (October 7, 2011) (SR-Phlx-2011-108).
    \4\ Id.
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    A member is eligible to subscribe only one free port pair under the 
proposed fee waiver program and the port must be eligible for routing. 
The free port pair must be a newly-subscribed port pair and must be net 
additive to the number of port pairs a member firm is subscribed to as 
of December 31, 2011 (i.e., it cannot replace an existing port pair). 
Additional port pairs subscribed to by a member firm and used for 
routing purposes will not be eligible for the proposed fee waiver. A 
member firm may add a routable port pair that meets the requirements 
noted above at any point during the free period, and will not be 
assessed a fee for the port pair for the months remaining in the free 
period, so long as routable order flow is sent through the port pair at 
some point during the free period. If no routable order flow is sent 
through the designated port pair during the free period, the port pair 
fee will apply to all months the new port pair is subscribed to. For 
example, if on January 25, 2012, Firm ABCD adds a routable port on PSX, 
the port pair would be free for the duration of the free period, so 
long as the member firm sends routable order flow through the port pair 
at some point during the free period. At the end of the free period, 
the member will be assessed the normal monthly fee, beginning with 
April 2012. If the member firm does not send routable order flow 
through the newly-added port pair, the member firm would be assessed 
the full fee for each of the months that it had subscribed to the new 
port pair during the free period (in the example above, all three 
months of the free period). A member firm is under no obligation to 
continue subscription to the routable port pair at the end of the free 
period, and may cancel its subscription at any time prior to the 
expiration of the free period with no charge.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\5\ in general, and with 
Section 6(b)(4) of the Act,\6\ in particular, in that it provides for 
the equitable allocation of reasonable dues, fees and other charges 
among members and issuers and other persons using any facility or 
system which the Exchange operates or controls. The Exchange believes 
that the proposed fee waiver is reasonable as it is narrowly focused, 
of limited duration, and is designed to encourage PSX market 
participants to use the full functionality of the market, thereby 
increasing liquidity available to investors. The Exchange believes that 
the proposed fee waiver is equitable since it applies to any PSX 
participant that seeks to use the routing function of the market and 
subscribes a new port pair for routing during the free period. To date, 
no member firms have subscribed new port pairs for the purpose of 
routing from PSX. As noted, a member firm is not penalized for 
cancelling its routing port pair at the end of the free period.
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    \5\ 15 U.S.C. 78f.
    \6\ 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 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act, as amended.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor 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 \7\ and

[[Page 1766]]

subparagraph (f)(2) of Rule 19b-4 thereunder.\8\ 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
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    \7\ 15 U.S.C. 78s(b)(3)(a)(ii).
    \8\ 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 email to [email protected]. Please include 
File No. SR-Phlx-2011-187 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 No. SR-Phlx-2011-187. 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-2011-187 and should be 
submitted on or before February 1, 2012.
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    \9\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-321 Filed 1-10-12; 8:45 am]
BILLING CODE 8011-01-P