Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Pricing Schedule, 69963-69966 [2014-27710]
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Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Notices
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 will also be available for
inspection and copying at the NYSE’s
principal office and on its Internet Web
site at www.nyse.com. 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–
NYSEMKT–2014–96 and should be
submitted on or before December 15,
2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.20
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–27698 Filed 11–21–14; 8:45 am]
BILLING CODE 8011–01–P
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to the
Pricing Schedule
asabaliauskas on DSK5VPTVN1PROD with NOTICES
November 18, 2014.
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 14, 2014 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
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
VerDate Sep<11>2014
20:32 Nov 21, 2014
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The Exchange proposes to amend its
Pricing Schedule to conform certain
terminology to Rule 507, Application for
Approval as an SQT, RSQT, RSQTO and
Assignment in Options’’ as it relates to
Remote Market Makers or ‘‘RMMs.’’ The
Exchange also proposes to make other
clarifying and corrective amendments to
various sections of the Pricing Schedule.
The text of the proposed rule change
is set forth below. Proposed new
language is italicized; deleted text is in
brackets.
NASDAQ OMX PHLX LLC 1 PRICING
SCHEDULE
ALL BILLING DISPUTES MUST BE
SUBMITTED TO THE EXCHANGE IN
WRITING AND MUST BE
ACCOMPANIED BY SUPPORTING
DOCUMENTATION. ALL DISPUTES
MUST BE SUBMITTED NO LATER
THAN SIXTY (60) DAYS AFTER
RECEIPT OF A BILLING INVOICE,
EXCEPT FOR DISPUTES CONCERNING
NASDAQ OMX PSX FEES,
PROPRIETARY DATA FEED FEES AND
CO-LOCATION SERVICES FEES. AS OF
JANUARY 3, 2011, THE EXCHANGE
WILL CALCULATE FEES ON A TRADE
DATE BASIS.
*
[Release No. 34–73629; File No. SR–Phlx–
2014–75]
1 15
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
——————
1 PHLX® is a registered trademark of The
NASDAQ OMX Group, Inc.
SECURITIES AND EXCHANGE
COMMISSION
20 17
proposed rule change from interested
persons.
*
*
*
*
PREFACE
For purposes of assessing fees, the
following references should serve as
guidance.
The term ‘‘Customer’’ applies to any
transaction that is identified by a
member or member organization for
clearing in the Customer range at The
Options Clearing Corporation (‘‘OCC’’)
which is not for the account of a broker
or dealer or for the account of a
‘‘Professional’’ (as that term is defined
in Rule 1000(b)(14)). 2
The term ‘‘Specialist’’ applies to
transactions for the account of a
Specialist 3 (as defined in Exchange
Rule 1020(a)).
The term ‘‘ROT, SQT and RSQT’’
applies to transactions for the accounts
of Registered Option Traders4 (‘‘ROTs’’),
Streaming Quote Traders (‘‘SQTs’’),5
and Remote Streaming Quote Traders
(‘‘RSQTs’’). 6 For purposes of the Pricing
Schedule, the term ‘‘Market Maker’’ will
be utilized to describe fees and rebates
applicable to ROTs, SQTs and RSQTs.
PO 00000
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Sfmt 4703
69963
RSQTs may also be referred to as
Remote Market Markers (‘‘RMMs’’).
The term ‘‘Firm’’ applies to any
transaction that is identified by a
member or member organization for
clearing in the Firm range at OCC.
The term ‘‘Professional’’ applies to
transactions for the accounts of
Professionals (as defined in Exchange
Rule 1000(b)(14)).
The term ‘‘Broker-Dealer’’ applies to
any transaction which is not subject to
any of the other transaction fees
applicable within a particular category.
The term ‘‘Joint Back Office’’ or
‘‘JBO’’ 7 applies to any transaction that
is identified by a member or member
organization for clearing in the Firm
range at OCC and is identified with an
origin code as a JBO. A JBO will be
priced the same as a Broker-Dealer. [as
of September 1, 2014.]
The term ‘‘Common Ownership’’ shall
mean members or member organizations
under 75% common ownership or
control.
For purposes of determining average
daily volume or volume-based pricing
hereunder, any day that the market is
not open for the entire trading day will
be excluded from such calculation.
2 Rule 1000(b)(14) provides in relevant
part: ‘‘The term ‘‘professional’’ means any
person or entity that (i) is not a broker or
dealer in securities, and (ii) places more than
390 orders in listed options per day on
average during a calendar month for its own
beneficial account(s).
3 A Specialist is an Exchange member who
is registered as an options specialist pursuant
to Rule 1020(a). An options Specialist
includes a Remote Specialist which is [a]
defined as an options specialist in one or
more classes that does not have a physical
presence on an Exchange floor and is
approved by the Exchange pursuant to Rule
501.
4 A Registered Option Trader is defined in
Exchange Rule 1014(b) as a regular member
of the Exchange located on the trading floor
who has received permission from the
Exchange to trade in options for his own
account. A ROT includes SQTs and RSQTs
as well as on and off-floor ROTS.
5 A Streaming Quote Trader is defined in
Exchange Rule 1014(b)(ii)(A) as an ROT who
has received permission from the Exchange
to generate and submit option quotations
electronically in options to which such SQT
is assigned.
6 A Remote Streaming Quote Trader is
defined in Exchange Rule in 1014(b)(ii)(B) as
an ROT that is a member affiliated with an
RSQTO with no physical trading floor
presence who has received permission from
the Exchange to generate and submit option
quotations electronically in options to which
such RSQT has been assigned. A Remote
Streaming Quote Trader Organization or
‘‘RSQTO,’’ which may also be referred to as
a Remote Market Making Organization
(‘‘RMO’’), is a member organization in good
E:\FR\FM\24NON1.SGM
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Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Notices
standing that satisfies the RSQTO readiness
requirements in Rule 507(a).
7 A JBO participant is a member, member
organization or non-member organization
that maintains a JBO arrangement with a
clearing broker-dealer (‘‘JBO Broker’’) subject
to the requirements of Regulation T Section
220.7 of the Federal Reserve System as
further discussed at Exchange Rule 703.
*
*
*
*
*
Customer
Mini Options Transaction Fee—Electronic Adding Liquidity
Mini Options Transaction Fee—Electronic Removing Liquidity ...............................................................................
Mini Options Transaction Fee—Floor and QCC .................
For executions that occur as part of
PIXL, the following fees and rebates will
apply:
• Initiating Order: $0.015 per contract
• PIXL Order (Contra-party to the
Initiating Order): Customer is $0.00 and
all others will be assessed a transaction
fee of $0.03 per contract.
• PIXL Order (Contra-party to other
than the Initiating Order): Customer will
be assessed a transaction fee of $0.00
and all others will be assessed a
transaction fee of $0.03 per contract.
The contra-party will be assessed a
transaction fee of $0.03 per contract.
Payment for Order Flow fees will be
as follows:
• Penny Pilot Options: $0.02
1
2
3
4
5
................
................
................
................
................
The following fees will apply to Mini
Options as specified in Rule 1012,
Commentary .13.
[Mini Options symbols are AAPL7,
AMZN7, GLD7, GOLG7, SPY7]
Specialist
and market
maker
Broker-dealer
Firm
$0.00
$0.03
$0.02
$0.03
$0.03
0.00
0.00
0.09
0.09
0.04
0.09
0.09
0.09
0.09
0.09
• All Other Options: $0.06
QCC Transaction Fees and rebates
defined in Section II do not apply to
Mini Options. Routing Fees set forth in
Section V apply to Mini Options.
The Monthly Market Maker Cap and
the Monthly Firm Fee Cap set forth in
Section II as well as other options
transaction fee caps, discounts or
rebates will not apply to transactions in
Mini Options.
Mini Options volume will be
included in the calculations for the
Customer Rebate Program eligibility but
will not be eligible to receive the rebates
associated with the Customer Rebate
Program.
B. Customer Rebate Program
The Customer Rebate Tiers described
below will be calculated by totaling
Customer volume in Multiply Listed
Options (including SPY) that are
electronically-delivered and executed,
except volume associated with
electronic QCC Orders, as defined in
Exchange Rule 1080(o). Rebates will be
paid on Customer Rebate Tiers
according to the below categories.
Members and member organizations
under Common Ownership may
aggregate their Customer volume for
purposes of calculating the Customer
Rebate Tiers and receiving rebates.
Percentage thresholds of national customer volume in multiply-listed equity and ETF
options classes, excluding SPY options
(monthly)
Customer rebate
tiers
Tier
Tier
Tier
Tier
Tier
Professional
A. Mini Options Fees
Category
A
0.00%–0.60% ............................................................................................................................
Above 0.60%–1.10% ................................................................................................................
Above 1.10%–1.60% ................................................................................................................
Above 1.60%–2.50% ................................................................................................................
Above 2.50% ............................................................................................................................
Category
B
$0.00
*0.10
*0.12
0.16
0.17
$0.00
*0.17
*0.17
0.19
0.19
Category A: Rebate will be paid to members executing electronically-delivered Customer Simple Orders in Penny Pilot Options and Customer
Simple Orders in Non-Penny Pilot Options in Section II symbols. Rebate will be paid on Customer PIXL Orders in Section II symbols that execute against non-Initiating Order interest. In the instance where member organizations qualify for Tier 4 or higher in the Customer Rebate Program, Customer PIXL Orders that execute against a PIXL Initiating Order will be paid a rebate of $0.14 per contract.
Category B: Rebate will be paid to members executing electronically-delivered Customer Complex Orders in Penny Pilot Options and NonPenny Pilot Options in Section II symbols. Rebate will be paid on Customer PIXL Complex Orders in Section II symbols that execute against
non-Initiating Order interest. In the instance where member organizations qualify for Tier 4 or higher in the Customer Rebate Program, Customer
Complex PIXL Orders that execute against a Complex PIXL Initiating Order will be paid a rebate of $0.17 per contract. The Category B Rebate
will not be paid when an electronically-delivered Customer Complex Order, including Customer Complex PIXL Order, executes against another
electronically-delivered Customer Complex Order.
* The Exchange will pay a $0.02 per contract rebate in addition to the applicable Tier 2 and 3 rebate to a Specialist or Market Maker or its
member or member organization affiliate under Common Ownership provided the Specialist or Market Maker has reached the Monthly Market
Maker Cap, as defined in Section II.
*
*
*
*
*
VI. MEMBERSHIP FEES
asabaliauskas on DSK5VPTVN1PROD with NOTICES
*
*
*
*
*
B. STREAMING QUOTE TRADER (‘‘SQT’’) FEES
Number of Option Class Assignments 22
Tier
Tier
Tier
Tier
Tier
1:
2:
3:
4:
5:
Up
Up
Up
Up
Up
to
to
to
to
to
VerDate Sep<11>2014
SQT Fees
200 classes ......................................................................................................................................
400 classes ......................................................................................................................................
600 classes ......................................................................................................................................
800 classes ......................................................................................................................................
1000 classes ....................................................................................................................................
20:32 Nov 21, 2014
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$0.00 per calendar month.
$2,200 per calendar month.
$3200.00 per calendar month.
$4200.00 per calendar month.
$5200.00 per calendar month.
24NON1
69965
Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Notices
B. STREAMING QUOTE TRADER (‘‘SQT’’) FEES—Continued
Number of Option Class Assignments 22
SQT Fees
Tier 6: Up to 1200 classes ....................................................................................................................................
Tier 7: All equity issues .........................................................................................................................................
$6200.00 per calendar month.
$7,200 per calendar month.
22 In calculating the number of option class assignments, equity options including ETFs and ETNs will be counted. Currencies and indexes will
not be counted in the number of option class assignments.
C. [REMOTE STREAMING QUOTE TRADER ORGANIZATION (‘‘RSQTO’’) FEE] Remote Market Maker Organization (RMO)
Fee
Number of Option Class Assignments 23
[RSQTO]RMO Fee
Tier 1: less than 100 classes ................................................................................................................................
Tier 2: More than 100 classes and less than 999 classes ...................................................................................
Tier 3: 1000 or more classes ................................................................................................................................
Remote Specialist Fee 24 .......................................................................................................................................
$5,000 per month.
8,000 per month.
11,000 per month.
200 per option allocation per
month.
23 In calculating the number of option class assignments, equity options including ETFs and ETNs will be counted. Currencies and indexes will
not be counted in the number of option class assignments.
24 The Remote Specialist Fee will be capped at $4,500 per month.
*
*
*
*
*
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 Exchange is proposing to amend
various sections of the Pricing Schedule,
which applies to options, to add rule
text to clarify the Pricing Schedule.
Each change will be discussed in more
detail below.
asabaliauskas on DSK5VPTVN1PROD with NOTICES
Preface—Joint Back Office (‘‘JBO’’)
The Exchange notes in the Preface to
the Pricing Schedule that a JBO will be
priced the same as a Broker-Dealer. [sic]
as of September 1, 2014. The Exchange
believes that the date is no longer
necessary and proposes to remove this
reference.
Preface—RMM Amendment
The Exchange proposes to add a
sentence to the term ‘‘ROT, SQT and
RSQT’’ to state that ‘‘RSQTs may also be
referred to as Remote Market Makers
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20:32 Nov 21, 2014
Jkt 235001
(‘‘RMMs’’).’’ The Exchange already
includes this statement in note 6 of the
Preface. The Exchange proposes to add
this in the definition of the term for ease
of reference.
Chapter VI—RMO Amendment
The Exchange also proposes to utilize
this term to describe the fees at Chapter
VI, Membership Fees, Section C,
currently titled ‘‘Remote Streaming
Quote Trader Organization Fee.’’ The
Exchange believes that titling this fee as
‘‘Remote Market Maker Organization
(RMO) Fee’’ more specifically defines
the fee. The Exchange also proposes to
add the term ‘‘RMO’’ in place of
‘‘RSQTO’’ throughout Section C fee
table for consistency.
Chapter VI—Adding Tier Numbers
The Exchange proposes to amend
Chapter VI, Section B, Streaming Quote
Trader (‘‘SQT’’) Fees and Section C to
assign tier numbers before each tier in
each of those fees for ease of reference
in referring to the fees.
The Exchange believes that each of
the aforementioned amendments will
make the Pricing Schedule easier to
understand and reference.
Section A—Mini Options Symbols
The Exchange is also proposing to
delete the Mini Options symbols listed
in Section A, Mini Options Fees and
instead note that the pricing applies to
all Mini Options as specified in Rule
1012, Commentary .13. The Exchange
believes this will assist the Exchange in
maintaining a current, accurate Pricing
Schedule.
Section B—Customer Rebate Program
The Exchange is proposing to clarify
rule text in Section B, Customer Rebate
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Program, related to Category B rebates.
Currently the Category B rebate is paid
to members executing electronicallydelivered Customer Complex Orders in
Penny Pilot Options and Non-Penny
Pilot Options in Section II symbols. The
rebate will be paid on Customer PIXL
Complex Orders in Section II symbols
that execute against non-Initiating Order
interest. In the instance where member
organizations qualify for Tier 4 or higher
in the Customer Rebate Program,
Customer Complex PIXL Orders that
execute against a Complex PIXL
Initiating Order will be paid a rebate of
$0.17 per contract. The Category B
Rebate will not be paid when an
electronically-delivered Customer
Complex Order executes against another
electronically-delivered Customer
Complex Order. The Exchange proposes
to amend the last sentence to state, ‘‘The
Category B Rebate will not be paid when
an electronically-delivered Customer
Complex Order, including Customer
Complex PIXL Order, executes against
another electronically-delivered
Customer Complex Order.’’ The
Exchange believes that this sentence
helps further clarify the manner in
which the Category B rebate is applied
today.
The Exchange is also making other
clarifying amendments in the
definitions to correct typographical
errors.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act 3 in general, and furthers the
objectives of Section 6(b)(5) of the Act 4
3 15
4 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
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Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Notices
asabaliauskas on DSK5VPTVN1PROD with NOTICES
in particular, in that it is designed to
promote just and equitable principles of
trade, to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and, in general to protect
investors and the public interest, in that
the amendments will provide greater
clarity to the Pricing Schedule.
The Exchange believes that removing
the historical reference date to the JBO
definition in the Preface will provide
greater clarity to the Pricing Schedule.
The Exchange believes that the
amendments provide greater specificity
and conforms word usage with the
Rulebook with respect to the usage of
the terms RMM and RMO. Also, by
adding tier numbers, it will be easier to
reference the various streaming fees.
The Exchange believes that generally
referring to Mini Options as specified in
the Rulebook will assist the Exchange in
maintaining a current list of Mini
Options which are subject to Section A
pricing. The NASDAQ Options Market
LLC pricing for Mini Options does not
specifically reference the Mini Options
symbols.5
The Exchange believes that further
clarifying the manner in which a
Category B Customer Rebate is paid by
stating that a Customer Complex PIXL
Order is excluded in the same manner
as other Customer Complex Orders adds
further clarity to the rule text. The
Exchange excludes Customer Complex
PIXL Orders today from the Category B
rebate. The Exchange will not change
the manner in which the Exchange pays
a rebate as a result of this filing.
Customer Complex PIXL Orders will
continue to be excluded.
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. The
Exchange is merely seeking to add
greater clarity to the Pricing Schedule
by conforming the RMM and RMO
language to the current usage in Rule
507 of the Rulebook. The Exchange also
believes that the addition of tiers
provides greater clarity and
transparency to the Pricing Schedule
which benefits all market participants.
Generally citing to all Mini Options
provides greater accuracy to the Pricing
Schedule. Specifically stating that
Customer Complex PIXL Orders are
excluded in a manner similar to
Customer Complex Orders adds more
specificity to the manner in which the
Exchange pays the Category B Customer
Rebate. Finally, correcting typographical
errors and removing historical dates
avoid confusion.
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
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A)(ii) of the Act 6 and
subparagraph (f)(6) of Rule 19b–4
thereunder.7
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: (i) Necessary or appropriate in
the public interest; (ii) for the protection
of investors; or (iii) otherwise in
furtherance of the purposes of the Act.
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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
Phlx–2014–75 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File
Number SR–Phlx–2014–75. 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
6 15
5 See
Chapter XV, Section 2(4).
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20:32 Nov 21, 2014
7 17
Jkt 235001
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U.S.C. 78s(b)(3)(a)(ii).
CFR 240.19b–4(f)(6).
Frm 00145
Fmt 4703
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post all comments on the Commission’s
Internet Web site (https://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–
2014–75 and should be submitted on or
before December 15, 2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.8
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–27710 Filed 11–21–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–73630; File No. SR–
NASDAQ–2014–038]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Order
Granting Approval of a Proposed Rule
Change, as Modified by Amendments
No. 1 and No. 2 Thereto, Relating to the
Listing and Trading of the Shares of
the Reality Shares NASDAQ–100 DIVS
Index ETF Under Nasdaq Rule 5705
November 18, 2014.
I. Introduction
On April 10, 2014, The NASDAQ
Stock Market LLC (‘‘Exchange’’ or
‘‘NASDAQ’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and
8 17
1 15
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
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]]>Agencies
[Federal Register Volume 79, Number 226 (Monday, November 24, 2014)]
[Notices]
[Pages 69963-69966]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-27710]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-73629; File No. SR-Phlx-2014-75]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
the Pricing Schedule
November 18, 2014.
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 14, 2014 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 its Pricing Schedule to conform
certain terminology to Rule 507, Application for Approval as an SQT,
RSQT, RSQTO and Assignment in Options'' as it relates to Remote Market
Makers or ``RMMs.'' The Exchange also proposes to make other clarifying
and corrective amendments to various sections of the Pricing Schedule.
The text of the proposed rule change is set forth below. Proposed
new language is italicized; deleted text is in brackets.
NASDAQ OMX PHLX LLC \1\ PRICING SCHEDULE
ALL BILLING DISPUTES MUST BE SUBMITTED TO THE EXCHANGE IN WRITING AND
MUST BE ACCOMPANIED BY SUPPORTING DOCUMENTATION. ALL DISPUTES MUST BE
SUBMITTED NO LATER THAN SIXTY (60) DAYS AFTER RECEIPT OF A BILLING
INVOICE, EXCEPT FOR DISPUTES CONCERNING NASDAQ OMX PSX FEES,
PROPRIETARY DATA FEED FEES AND CO-LOCATION SERVICES FEES. AS OF JANUARY
3, 2011, THE EXCHANGE WILL CALCULATE FEES ON A TRADE DATE BASIS.
------------
\1\ PHLX[supreg] is a registered trademark of The NASDAQ OMX
Group, Inc.
* * * * *
PREFACE
For purposes of assessing fees, the following references should
serve as guidance.
The term ``Customer'' applies to any transaction that is identified
by a member or member organization for clearing in the Customer range
at The Options Clearing Corporation (``OCC'') which is not for the
account of a broker or dealer or for the account of a ``Professional''
(as that term is defined in Rule 1000(b)(14)). \2\
The term ``Specialist'' applies to transactions for the account of
a Specialist \3\ (as defined in Exchange Rule 1020(a)).
The term ``ROT, SQT and RSQT'' applies to transactions for the
accounts of Registered Option Traders\4\ (``ROTs''), Streaming Quote
Traders (``SQTs''),\5\ and Remote Streaming Quote Traders (``RSQTs'').
\6\ For purposes of the Pricing Schedule, the term ``Market Maker''
will be utilized to describe fees and rebates applicable to ROTs, SQTs
and RSQTs. RSQTs may also be referred to as Remote Market Markers
(``RMMs'').
The term ``Firm'' applies to any transaction that is identified by
a member or member organization for clearing in the Firm range at OCC.
The term ``Professional'' applies to transactions for the accounts
of Professionals (as defined in Exchange Rule 1000(b)(14)).
The term ``Broker-Dealer'' applies to any transaction which is not
subject to any of the other transaction fees applicable within a
particular category.
The term ``Joint Back Office'' or ``JBO'' \7\ applies to any
transaction that is identified by a member or member organization for
clearing in the Firm range at OCC and is identified with an origin code
as a JBO. A JBO will be priced the same as a Broker-Dealer. [as of
September 1, 2014.]
The term ``Common Ownership'' shall mean members or member
organizations under 75% common ownership or control.
For purposes of determining average daily volume or volume-based
pricing hereunder, any day that the market is not open for the entire
trading day will be excluded from such calculation.
\2\ Rule 1000(b)(14) provides in relevant part: ``The term
``professional'' means any person or entity that (i) is not a broker
or dealer in securities, and (ii) places more than 390 orders in
listed options per day on average during a calendar month for its
own beneficial account(s).
\3\ A Specialist is an Exchange member who is registered as an
options specialist pursuant to Rule 1020(a). An options Specialist
includes a Remote Specialist which is [a] defined as an options
specialist in one or more classes that does not have a physical
presence on an Exchange floor and is approved by the Exchange
pursuant to Rule 501.
\4\ A Registered Option Trader is defined in Exchange Rule
1014(b) as a regular member of the Exchange located on the trading
floor who has received permission from the Exchange to trade in
options for his own account. A ROT includes SQTs and RSQTs as well
as on and off-floor ROTS.
\5\ A Streaming Quote Trader is defined in Exchange Rule
1014(b)(ii)(A) as an ROT who has received permission from the
Exchange to generate and submit option quotations electronically in
options to which such SQT is assigned.
\6\ A Remote Streaming Quote Trader is defined in Exchange Rule
in 1014(b)(ii)(B) as an ROT that is a member affiliated with an
RSQTO with no physical trading floor presence who has received
permission from the Exchange to generate and submit option
quotations electronically in options to which such RSQT has been
assigned. A Remote Streaming Quote Trader Organization or ``RSQTO,''
which may also be referred to as a Remote Market Making Organization
(``RMO''), is a member organization in good
[[Page 69964]]
standing that satisfies the RSQTO readiness requirements in Rule
507(a).
\7\ A JBO participant is a member, member organization or non-
member organization that maintains a JBO arrangement with a clearing
broker-dealer (``JBO Broker'') subject to the requirements of
Regulation T Section 220.7 of the Federal Reserve System as further
discussed at Exchange Rule 703.
* * * * *
A. Mini Options Fees
The following fees will apply to Mini Options as specified in Rule
1012, Commentary .13.
[Mini Options symbols are AAPL7, AMZN7, GLD7, GOLG7, SPY7]
----------------------------------------------------------------------------------------------------------------
Specialist and
Customer Professional market maker Broker-dealer Firm
----------------------------------------------------------------------------------------------------------------
Mini Options Transaction Fee-- $0.00 $0.03 $0.02 $0.03 $0.03
Electronic Adding Liquidity....
Mini Options Transaction Fee-- 0.00 0.09 0.04 0.09 0.09
Electronic Removing Liquidity..
Mini Options Transaction Fee-- 0.00 0.09 0.09 0.09 0.09
Floor and QCC..................
----------------------------------------------------------------------------------------------------------------
For executions that occur as part of PIXL, the following fees and
rebates will apply:
Initiating Order: $0.015 per contract
PIXL Order (Contra-party to the Initiating Order):
Customer is $0.00 and all others will be assessed a transaction fee of
$0.03 per contract.
PIXL Order (Contra-party to other than the Initiating
Order): Customer will be assessed a transaction fee of $0.00 and all
others will be assessed a transaction fee of $0.03 per contract. The
contra-party will be assessed a transaction fee of $0.03 per contract.
Payment for Order Flow fees will be as follows:
Penny Pilot Options: $0.02
All Other Options: $0.06
QCC Transaction Fees and rebates defined in Section II do not apply
to Mini Options. Routing Fees set forth in Section V apply to Mini
Options.
The Monthly Market Maker Cap and the Monthly Firm Fee Cap set forth
in Section II as well as other options transaction fee caps, discounts
or rebates will not apply to transactions in Mini Options.
Mini Options volume will be included in the calculations for the
Customer Rebate Program eligibility but will not be eligible to receive
the rebates associated with the Customer Rebate Program.
B. Customer Rebate Program
The Customer Rebate Tiers described below will be calculated by
totaling Customer volume in Multiply Listed Options (including SPY)
that are electronically-delivered and executed, except volume
associated with electronic QCC Orders, as defined in Exchange Rule
1080(o). Rebates will be paid on Customer Rebate Tiers according to the
below categories. Members and member organizations under Common
Ownership may aggregate their Customer volume for purposes of
calculating the Customer Rebate Tiers and receiving rebates.
------------------------------------------------------------------------
Percentage Category Category
thresholds of -------------------------------
national
customer volume
in multiply-
Customer rebate tiers listed equity
and ETF options A B
classes,
excluding SPY
options
(monthly)
------------------------------------------------------------------------
Tier 1................ 0.00%-0.60%..... $0.00 $0.00
Tier 2................ Above 0.60%- *0.10 *0.17
1.10%.
Tier 3................ Above 1.10%- *0.12 *0.17
1.60%.
Tier 4................ Above 1.60%- 0.16 0.19
2.50%.
Tier 5................ Above 2.50%..... 0.17 0.19
------------------------------------------------------------------------
Category A: Rebate will be paid to members executing electronically-
delivered Customer Simple Orders in Penny Pilot Options and Customer
Simple Orders in Non-Penny Pilot Options in Section II symbols. Rebate
will be paid on Customer PIXL Orders in Section II symbols that
execute against non-Initiating Order interest. In the instance where
member organizations qualify for Tier 4 or higher in the Customer
Rebate Program, Customer PIXL Orders that execute against a PIXL
Initiating Order will be paid a rebate of $0.14 per contract.
Category B: Rebate will be paid to members executing electronically-
delivered Customer Complex Orders in Penny Pilot Options and Non-Penny
Pilot Options in Section II symbols. Rebate will be paid on Customer
PIXL Complex Orders in Section II symbols that execute against non-
Initiating Order interest. In the instance where member organizations
qualify for Tier 4 or higher in the Customer Rebate Program, Customer
Complex PIXL Orders that execute against a Complex PIXL Initiating
Order will be paid a rebate of $0.17 per contract. The Category B
Rebate will not be paid when an electronically-delivered Customer
Complex Order, including Customer Complex PIXL Order, executes against
another electronically-delivered Customer Complex Order.
* The Exchange will pay a $0.02 per contract rebate in addition to the
applicable Tier 2 and 3 rebate to a Specialist or Market Maker or its
member or member organization affiliate under Common Ownership
provided the Specialist or Market Maker has reached the Monthly Market
Maker Cap, as defined in Section II.
* * * * *
VI. MEMBERSHIP FEES
* * * * *
B. Streaming Quote Trader (``SQT'') Fees
------------------------------------------------------------------------
Number of Option Class
Assignments \22\ SQT Fees
------------------------------------------------------------------------
Tier 1: Up to 200 classes.... $0.00 per calendar month.
Tier 2: Up to 400 classes.... $2,200 per calendar month.
Tier 3: Up to 600 classes.... $3200.00 per calendar month.
Tier 4: Up to 800 classes.... $4200.00 per calendar month.
Tier 5: Up to 1000 classes... $5200.00 per calendar month.
[[Page 69965]]
Tier 6: Up to 1200 classes... $6200.00 per calendar month.
Tier 7: All equity issues.... $7,200 per calendar month.
------------------------------------------------------------------------
\22\ In calculating the number of option class assignments, equity
options including ETFs and ETNs will be counted. Currencies and
indexes will not be counted in the number of option class assignments.
C. [Remote Streaming Quote Trader Organization (``RSQTO'') Fee] Remote
Market Maker Organization (RMO) Fee
------------------------------------------------------------------------
Number of Option Class
Assignments \23\ [RSQTO]RMO Fee
------------------------------------------------------------------------
Tier 1: less than 100 classes $5,000 per month.
Tier 2: More than 100 classes 8,000 per month.
and less than 999 classes.
Tier 3: 1000 or more classes. 11,000 per month.
Remote Specialist Fee \24\... 200 per option allocation per month.
------------------------------------------------------------------------
\23\ In calculating the number of option class assignments, equity
options including ETFs and ETNs will be counted. Currencies and
indexes will not be counted in the number of option class assignments.
\24\ The Remote Specialist Fee will be capped at $4,500 per month.
* * * * *
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 Exchange is proposing to amend various sections of the Pricing
Schedule, which applies to options, to add rule text to clarify the
Pricing Schedule. Each change will be discussed in more detail below.
Preface--Joint Back Office (``JBO'')
The Exchange notes in the Preface to the Pricing Schedule that a
JBO will be priced the same as a Broker-Dealer. [sic] as of September
1, 2014. The Exchange believes that the date is no longer necessary and
proposes to remove this reference.
Preface--RMM Amendment
The Exchange proposes to add a sentence to the term ``ROT, SQT and
RSQT'' to state that ``RSQTs may also be referred to as Remote Market
Makers (``RMMs'').'' The Exchange already includes this statement in
note 6 of the Preface. The Exchange proposes to add this in the
definition of the term for ease of reference.
Chapter VI--RMO Amendment
The Exchange also proposes to utilize this term to describe the
fees at Chapter VI, Membership Fees, Section C, currently titled
``Remote Streaming Quote Trader Organization Fee.'' The Exchange
believes that titling this fee as ``Remote Market Maker Organization
(RMO) Fee'' more specifically defines the fee. The Exchange also
proposes to add the term ``RMO'' in place of ``RSQTO'' throughout
Section C fee table for consistency.
Chapter VI--Adding Tier Numbers
The Exchange proposes to amend Chapter VI, Section B, Streaming
Quote Trader (``SQT'') Fees and Section C to assign tier numbers before
each tier in each of those fees for ease of reference in referring to
the fees.
The Exchange believes that each of the aforementioned amendments
will make the Pricing Schedule easier to understand and reference.
Section A--Mini Options Symbols
The Exchange is also proposing to delete the Mini Options symbols
listed in Section A, Mini Options Fees and instead note that the
pricing applies to all Mini Options as specified in Rule 1012,
Commentary .13. The Exchange believes this will assist the Exchange in
maintaining a current, accurate Pricing Schedule.
Section B--Customer Rebate Program
The Exchange is proposing to clarify rule text in Section B,
Customer Rebate Program, related to Category B rebates. Currently the
Category B rebate is paid to members executing electronically-delivered
Customer Complex Orders in Penny Pilot Options and Non-Penny Pilot
Options in Section II symbols. The rebate will be paid on Customer PIXL
Complex Orders in Section II symbols that execute against non-
Initiating Order interest. In the instance where member organizations
qualify for Tier 4 or higher in the Customer Rebate Program, Customer
Complex PIXL Orders that execute against a Complex PIXL Initiating
Order will be paid a rebate of $0.17 per contract. The Category B
Rebate will not be paid when an electronically-delivered Customer
Complex Order executes against another electronically-delivered
Customer Complex Order. The Exchange proposes to amend the last
sentence to state, ``The Category B Rebate will not be paid when an
electronically-delivered Customer Complex Order, including Customer
Complex PIXL Order, executes against another electronically-delivered
Customer Complex Order.'' The Exchange believes that this sentence
helps further clarify the manner in which the Category B rebate is
applied today.
The Exchange is also making other clarifying amendments in the
definitions to correct typographical errors.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \3\ in general, and furthers the objectives of Section
6(b)(5) of the Act \4\
[[Page 69966]]
in particular, in that it is designed to promote just and equitable
principles of trade, to remove impediments to and perfect the mechanism
of a free and open market and a national market system, and, in general
to protect investors and the public interest, in that the amendments
will provide greater clarity to the Pricing Schedule.
---------------------------------------------------------------------------
\3\ 15 U.S.C. 78f(b).
\4\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange believes that removing the historical reference date
to the JBO definition in the Preface will provide greater clarity to
the Pricing Schedule.
The Exchange believes that the amendments provide greater
specificity and conforms word usage with the Rulebook with respect to
the usage of the terms RMM and RMO. Also, by adding tier numbers, it
will be easier to reference the various streaming fees.
The Exchange believes that generally referring to Mini Options as
specified in the Rulebook will assist the Exchange in maintaining a
current list of Mini Options which are subject to Section A pricing.
The NASDAQ Options Market LLC pricing for Mini Options does not
specifically reference the Mini Options symbols.\5\
---------------------------------------------------------------------------
\5\ See Chapter XV, Section 2(4).
---------------------------------------------------------------------------
The Exchange believes that further clarifying the manner in which a
Category B Customer Rebate is paid by stating that a Customer Complex
PIXL Order is excluded in the same manner as other Customer Complex
Orders adds further clarity to the rule text. The Exchange excludes
Customer Complex PIXL Orders today from the Category B rebate. The
Exchange will not change the manner in which the Exchange pays a rebate
as a result of this filing. Customer Complex PIXL Orders will continue
to be excluded.
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. The Exchange is merely seeking
to add greater clarity to the Pricing Schedule by conforming the RMM
and RMO language to the current usage in Rule 507 of the Rulebook. The
Exchange also believes that the addition of tiers provides greater
clarity and transparency to the Pricing Schedule which benefits all
market participants. Generally citing to all Mini Options provides
greater accuracy to the Pricing Schedule. Specifically stating that
Customer Complex PIXL Orders are excluded in a manner similar to
Customer Complex Orders adds more specificity to the manner in which
the Exchange pays the Category B Customer Rebate. Finally, correcting
typographical errors and removing historical dates avoid confusion.
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
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(ii) of the Act \6\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\7\
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78s(b)(3)(a)(ii).
\7\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
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: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) otherwise in furtherance of the
purposes of the Act.
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 (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-Phlx-2014-75 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-Phlx-2014-75. 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 (https://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-2014-75 and should be
submitted on or before December 15, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
---------------------------------------------------------------------------
\8\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-27710 Filed 11-21-14; 8:45 am]
BILLING CODE 8011-01-P
