[Federal Register Volume 77, Number 180 (Monday, September 17, 2012)]
[Notices]
[Pages 57169-57171]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-22789]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67830; File No. SR-Phlx-2012-112]


Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Relating to 
Rebates and Fees for Adding and Removing Liquidity in Select Symbols

September 11, 2012.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\, and Rule 19b-4 \2\ thereunder, notice is hereby given 
that, on August 31, 2012, 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

[[Page 57170]]

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 the Exchange's Pricing Schedule at 
Section I titled ``Rebates and Fees for Adding and Removing Liquidity 
in Select Symbols.'' \3\ Specifically, the Exchange proposes to amend 
certain Simple Order Fees for Removing Liquidity. The Exchange also 
proposes various technical amendments to the Pricing Schedule.
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    \3\ The rebates and fees in Section I apply to certain Select 
Symbols which are listed in Section I of the Pricing Schedule.
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    While changes to the Pricing Schedule pursuant to this proposal are 
effective upon filing, the Exchange has designated the proposed 
amendment to be operative on September 4, 2012.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://www.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 amend Section I of 
the Exchange's Pricing Schedule. Specifically, the Exchange is 
proposing to amend Section I of the Pricing Schedule to increase 
certain Simple Order Fees for Removing Liquidity. Despite the increase 
to these fees, the Exchange believes that the fees remain competitive 
with fees assessed by other options exchanges.
    The Exchange is also proposing to make technical amendments to 
Section I of the Pricing Schedule.
    The Exchange is proposing to amend Section I, Part A of the Pricing 
Schedule to increase the Simple Order Fees for Removing Liquidity for 
Customers from $0.39 per contract to $0.43 per contract and increase 
the Simple Order Fees for Removing Liquidity for Specialists \4\ and 
Market Makers \5\ from $0.39 to $0.45 per contract.
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    \4\ A Specialist is an Exchange member who is registered as an 
options specialist pursuant to Rule 1020(a).
    \5\ A ``Market Maker'' includes Registered Options Traders 
(``ROTs'') (Rule 1014(b)(i) and (ii), which include Streaming Quote 
Traders (``SQTs'') (See Rule 1014(b)(ii)(A)) and Remote Streaming 
Quote Traders (``RSQTs'') (See Rule 1014(b)(ii)(B)).
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    Also, the Exchange is proposing to make technical corrections in 
Section I, Part A by replacing ``$0.00'' with ``N/A'' for several 
categories. This is not a change to these fees, but a technical 
amendment since in these instances ``N/A'' better reflects that a fee 
is not relevant for this category rather than ``$0.00'' which simply 
reflects that no fee is currently being charged for this category.
2. Statutory Basis
    The Exchange believes that its proposal to amend its Pricing 
Schedule is consistent with Section 6(b) of the Act \6\ in general, and 
furthers the objectives of Section 6(b)(4) of the Act \7\ 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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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that its proposal to increase the Simple 
Order Fees for Removing Liquidity for Customers, from $0.39 to $0.43 
per contract, and the Simple Order Fees for Removing Liquidity for 
Specialists and Market Makers, from $0.39 to $0.45 per contract, is 
reasonable because the increases remain competitive with fees assessed 
by other options exchanges.\8\
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    \8\ NYSE Arca, Inc. assesses Customers, Firms, Broker-Dealers 
and Market Makers a $0.45 take fee. See NYSE Arca, Inc.'s Fee 
Schedule.
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    The Exchange believes that its proposal to increase the Simple 
Order Fees for Removing Liquidity for Customers, Specialists and Market 
Makers is equitable and not unfairly discriminatory because the 
Exchange would assess all market participants, except Customers, a 
$0.45 per contract Simple Order Fee for Removing Liquidity. The 
Exchange proposes to assess a lower Simple Order Fee for Removing 
Liquidity to Customers of $0.43 per contract as compared to $0.45 per 
contract for all other market participants because Customer order flow 
enhances liquidity on the Exchange for the benefit of all market 
participants.
    The Exchange believes that the technical amendments proposed to 
Section II, Part A are reasonable, equitable and not unfairly 
discriminatory because the amendments are not substantive but rather 
technical amendments to provide more detail in the Pricing Schedule for 
greater clarity.
    The Exchange operates in a highly competitive market, comprised of 
ten exchanges, in which market participants can easily and readily 
direct order flow to competing venues if they deem fee levels at a 
particular venue to be excessive or rebates to be inadequate. 
Accordingly, the fees that are assessed and the rebates paid by the 
Exchange must remain competitive with fees charged and rebates paid by 
other venues and therefore must continue to be reasonable and equitably 
allocated to those members that opt to direct orders to the Exchange 
rather than competing venues.

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.\9\ 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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    \9\ 15 U.S.C. 78s(b)(3)(A)(ii).

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[[Page 57171]]

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 Number SR-Phlx-2012-112 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-2012-112. 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 
10:00 a.m. and 3:00 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-2012-112 and should be 
submitted on or before October 9, 2012

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-22789 Filed 9-14-12; 8:45 am]
BILLING CODE 8011-01-P