Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NASDAQ OMX PHLX, Inc. Relating to Standard and Poor's Depository Receipts/SPDRs (“SPY”) Equity Options, 46290-46291 [E9-21457]

Download as PDF 46290 Federal Register / Vol. 74, No. 172 / Tuesday, September 8, 2009 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–60589; File No. SR–CBOE– 2009–047] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Approving a Proposed Rule Change To Permit All CBSX Market-Makers To Operate From the CBSX Floor Post August 31, 2009. jlentini on DSKJ8SOYB1PROD with NOTICES On July 2, 2009, the Chicago Board Options Exchange, Incorporated (‘‘Exchange’’ or ‘‘CBOE’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to allow all CBSX Market-Maker types to operate from the Floor Post. The exchange filed Amendment No. 1 to the proposed rule change on July 23, 2009. The proposed rule change, as amended, was published for comment in the Federal Register on July 30, 2009.3 The Commission received no comment letters on the proposed rule change. This order approves the proposed rule change. CBSX is an all-electronic stock marketplace operated by the Exchange. The CBSX Floor Post is a location on the CBOE trading floor where marketmakers can be stationed to respond to stock price discovery requests from CBOE’s trading floor community. The Floor Post is a location for price discovery only; since CBSX is an electronic exchange, there is no openoutcry trading permitted, and any trades agreed to at the Floor Post must be entered into the CBSX system in accordance with the applicable rules.4 Currently, only members who serve as Designated Primary Market-Makers (‘‘DPMs’’) on CBSX may operate from the CBSX Floor Post.5 The Exchange now proposes to permit all CBSX Market-Makers types to operate from the Floor Post. The Floor Post will continue to restrict any sightlines to the equity options trading posts. After careful review, the Commission finds that the proposal is consistent with the Act and the rules and regulations thereunder applicable to a 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 60375 (July 23, 2009), 74 FR 38071. 4 See, e.g., CBOE Rule 52.11, Facilitation of Orders and Crossing Trades. 5 No CBSX DPMs are stationing personnel at the Floor Post at this time. 2 17 VerDate Nov<24>2008 17:32 Sep 04, 2009 Jkt 217001 national securities exchange.6 In particular, the Commission believes that the proposal is consistent with the requirements of Section 6(b)(5) of the Act 7—which requires, among other things, that the rules of a national securities exchange be designed to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts, 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—because it will promote additional price discovery at the CBSX Floor Post. It is therefore ordered, pursuant to Section 19(b)(2) of the Act, that the proposed rule change (SR–CBOE–2009– 047) be, and it hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.8 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–21583 Filed 9–4–09; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–60587; File No. SR–Phlx– 2009–73] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NASDAQ OMX PHLX, Inc. Relating to Standard and Poor’s Depository Receipts/ SPDRs (‘‘SPY’’) Equity Options August 28, 2009. 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 August 20, 2009, NASDAQ OMX PHLX, Inc. (‘‘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. 6 In approving this proposed rule change, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 7 15 U.S.C. 78f(b)(5). 8 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. PO 00000 Frm 00211 Fmt 4703 Sfmt 4703 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to assess a $.05 per contract fee for Standard and Poor’s Depositary Receipts/SPDRs (‘‘SPY’’)3 equity options that are directed to specialists, Streaming Quote Traders (‘‘SQTs’’)4 and Remote Streaming Quote Traders (‘‘RSQTs’’)5 by a member or member organization and are executed electronically in lieu of the existing specialist and Registered Options Trader (on-floor) equity options transaction fees. While changes to the Exchange’s fee schedule pursuant to this proposal are effective upon filing, the Exchange has designated this proposal to be effective for trades settling on or after August 25, 2009. The text of the proposed rule change is available on the Exchange’s Web site at https:// nasdaqomxphlx.cchwallstreet.com/ NASDAQOMXPHLX/Filings/, 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. 3 SPY options are based on the SPDR exchangetraded fund (‘‘ETF’’), which is designed to track the performance of the S&P 500 Index. 4 An SQT is an Exchange Registered Options Trader (‘‘ROT’’) who has received permission from the Exchange to generate and submit option quotations electronically through an electronic interface with AUTOM via an Exchange approved proprietary electronic quoting device in eligible options to which such SQT is assigned. See Exchange Rule 1014(b)(ii)(A). 5 An RSQT is an ROT that is a member or member organization with no physical trading floor presence who has received permission from the Exchange to generate and submit option quotations electronically through AUTOM in eligible options to which such RSQT has been assigned. An RSQT may only submit such quotations electronically from off the floor of the Exchange. See Exchange Rule 1014(b)(ii)(B). E:\FR\FM\08SEN1.SGM 08SEN1 Federal Register / Vol. 74, No. 172 / Tuesday, September 8, 2009 / Notices 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 create incentives for specialists, SQTs and RSQTs that receive directed order flow to provide liquidity in SPY equity options contracts sent to the Exchange for execution. The Exchange believes this incentive will allow the Exchange to remain competitive, while encouraging additional order flow in options overlaying SPY. The Exchange proposes to assess a $.05 per contract fee in SPY equity options that are directed to specialists, SQTs and RSQTs (‘‘Directed Participants’’ or ‘‘Directed Specialists, RSQTs, or SQTs’’6) by a member or member organization (‘‘Order Flow Provider’’ or ‘‘OFP’’)7, and executed electronically on the Exchange’s electronic trading platform for options, the Phlx XL II system. The $0.05 per contract rate would be assessed to the Direct Participants, in lieu of the equity options transactions fees of $.22 per contract side for Registered Option Traders (‘‘ROTs’’) (on-floor) and $.21 per contract side for specialists on contracts executed electronically. Customers who are on the contra-side of a trade involving Directed Orders would not be subject to a fee and will remain free of charge. The Exchange currently provides a discount for ROTs (on-floor) and specialists that exceed 4.5 million contracts in a given month (the ‘‘Volume Threshold’’) by assessing $ 0.01 per contract on contract volume above the Volume Threshold instead of the applicable options transaction charges. The Exchange aggregates the trading activity of separate ROTs (onfloor) and specialists for purposes of the Volume Threshold if there is at least 75% common ownership between the member organizations as reflected on each member organization’s Form BB, Schedule A. The Exchange proposes to assess a $0.01 per contract instead of a $0.05 per contract fee for SPY equity option transactions when the Directed Participant exceeds the 4.5 million contracts Volume Threshold in a given jlentini on DSKJ8SOYB1PROD with NOTICES 6 See Exchange Rule 1080(l), ‘‘…The term ‘Directed Specialist, RSQT, or SQT’ means a specialist, RSQT, or SQT that receives a Directed Order.’’ A Directed Participant has a higher quoting requirement as compared with a specialist, SQT or RSQT who is not acting as a Directed Participant. See Exchange Rule 1014. 7 See Exchange Rule 1080(l). ‘‘…The term ‘‘Order Flow Provider’’ (‘‘OFP’’) means any member or member organization that submits, as agent, customer orders to the Exchange.’’ VerDate Nov<24>2008 17:32 Sep 04, 2009 Jkt 217001 month. The contract volume associated with SPY equity options contracts, including the proposal to assess a $.05 per contract fee in SPY equity options, would therefore be included in the Volume Threshold calculation and the $0.01 per contract rate would apply in the event a Directed Participant reaches the 4.5 million contracts Volume Threshold. 2. Statutory Basis The Exchange believes that its proposal to amend its schedule of fees 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. Specifically, the Exchange believes that this proposal is equitable because it would apply evenly to specialists, SQTs and RSQTs transacting SPY equity options contracts sent to the Exchange for execution, in that any specialist, SQT or RSQT [sic] 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 and paragraph (f)(2) of Rule 19b–4 11 thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate 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. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule 8 15 U.S.C. 78f(b). U.S.C. 78f(b)(4). 10 15 U.S.C. 78s(b)(3)(A)(ii). 11 17 CFR 240.19b–4(f)(2). 9 15 PO 00000 Frm 00212 Fmt 4703 Sfmt 4703 46291 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 e-mail to rulecomments@sec.gov. Please include File Number SR–Phlx–2009–73 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–2009–73. 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 (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 inspection and copying in the Commission’s Public Reference Room 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 offices 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– 2009–73, and should be submitted on or before September 29, 2009. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–21457 Filed 9–4–09; 8:45 am] BILLING CODE 8010–01–P 12 17 E:\FR\FM\08SEN1.SGM CFR 200.30–3(a)(12). 08SEN1

Agencies

[Federal Register Volume 74, Number 172 (Tuesday, September 8, 2009)]
[Notices]
[Pages 46290-46291]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-21457]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60587; File No. SR-Phlx-2009-73]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by NASDAQ OMX PHLX, Inc. Relating 
to Standard and Poor's Depository Receipts/SPDRs (``SPY'') Equity 
Options

August 28, 2009.
    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 August 20, 2009, NASDAQ OMX PHLX, Inc. (``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 assess a $.05 per contract fee for 
Standard and Poor's Depositary Receipts/SPDRs (``SPY'')\3\ equity 
options that are directed to specialists, Streaming Quote Traders 
(``SQTs'')\4\ and Remote Streaming Quote Traders (``RSQTs'')\5\ by a 
member or member organization and are executed electronically in lieu 
of the existing specialist and Registered Options Trader (on-floor) 
equity options transaction fees.
---------------------------------------------------------------------------

    \3\ SPY options are based on the SPDR exchange-traded fund 
(``ETF''), which is designed to track the performance of the S&P 500 
Index.
    \4\ An SQT is an Exchange Registered Options Trader (``ROT'') 
who has received permission from the Exchange to generate and submit 
option quotations electronically through an electronic interface 
with AUTOM via an Exchange approved proprietary electronic quoting 
device in eligible options to which such SQT is assigned. See 
Exchange Rule 1014(b)(ii)(A).
    \5\ An RSQT is an ROT that is a member or member organization 
with no physical trading floor presence who has received permission 
from the Exchange to generate and submit option quotations 
electronically through AUTOM in eligible options to which such RSQT 
has been assigned. An RSQT may only submit such quotations 
electronically from off the floor of the Exchange. See Exchange Rule 
1014(b)(ii)(B).
---------------------------------------------------------------------------

    While changes to the Exchange's fee schedule pursuant to this 
proposal are effective upon filing, the Exchange has designated this 
proposal to be effective for trades settling on or after August 25, 
2009.
    The text of the proposed rule change is available on the Exchange's 
Web site at https://nasdaqomxphlx.cchwallstreet.com/NASDAQOMXPHLX/Filings/, 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.

[[Page 46291]]

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 create incentives for 
specialists, SQTs and RSQTs that receive directed order flow to provide 
liquidity in SPY equity options contracts sent to the Exchange for 
execution. The Exchange believes this incentive will allow the Exchange 
to remain competitive, while encouraging additional order flow in 
options overlaying SPY. The Exchange proposes to assess a $.05 per 
contract fee in SPY equity options that are directed to specialists, 
SQTs and RSQTs (``Directed Participants'' or ``Directed Specialists, 
RSQTs, or SQTs''\6\) by a member or member organization (``Order Flow 
Provider'' or ``OFP'')\7\, and executed electronically on the 
Exchange's electronic trading platform for options, the Phlx XL II 
system. The $0.05 per contract rate would be assessed to the Direct 
Participants, in lieu of the equity options transactions fees of $.22 
per contract side for Registered Option Traders (``ROTs'') (on-floor) 
and $.21 per contract side for specialists on contracts executed 
electronically. Customers who are on the contra-side of a trade 
involving Directed Orders would not be subject to a fee and will remain 
free of charge.
---------------------------------------------------------------------------

    \6\ See Exchange Rule 1080(l), ``[hellip]The term `Directed 
Specialist, RSQT, or SQT' means a specialist, RSQT, or SQT that 
receives a Directed Order.'' A Directed Participant has a higher 
quoting requirement as compared with a specialist, SQT or RSQT who 
is not acting as a Directed Participant. See Exchange Rule 1014.
    \7\ See Exchange Rule 1080(l). ``[hellip]The term ``Order Flow 
Provider'' (``OFP'') means any member or member organization that 
submits, as agent, customer orders to the Exchange.''
---------------------------------------------------------------------------

    The Exchange currently provides a discount for ROTs (on-floor) and 
specialists that exceed 4.5 million contracts in a given month (the 
``Volume Threshold'') by assessing $ 0.01 per contract on contract 
volume above the Volume Threshold instead of the applicable options 
transaction charges. The Exchange aggregates the trading activity of 
separate ROTs (on-floor) and specialists for purposes of the Volume 
Threshold if there is at least 75% common ownership between the member 
organizations as reflected on each member organization's Form BB, 
Schedule A. The Exchange proposes to assess a $0.01 per contract 
instead of a $0.05 per contract fee for SPY equity option transactions 
when the Directed Participant exceeds the 4.5 million contracts Volume 
Threshold in a given month. The contract volume associated with SPY 
equity options contracts, including the proposal to assess a $.05 per 
contract fee in SPY equity options, would therefore be included in the 
Volume Threshold calculation and the $0.01 per contract rate would 
apply in the event a Directed Participant reaches the 4.5 million 
contracts Volume Threshold.
2. Statutory Basis
    The Exchange believes that its proposal to amend its schedule of 
fees 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. Specifically, the Exchange 
believes that this proposal is equitable because it would apply evenly 
to specialists, SQTs and RSQTs transacting SPY equity options contracts 
sent to the Exchange for execution, in that any specialist, SQT or RSQT 
[sic]
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

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\ and paragraph (f)(2) of Rule 19b-4 \11\ 
thereunder. At any time within 60 days of the filing of the proposed 
rule change, the Commission may summarily abrogate 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.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \11\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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 e-mail to rule-comments@sec.gov. Please include 
File Number SR-Phlx-2009-73 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-2009-73. 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 (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 inspection and 
copying in the Commission's Public Reference Room 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 offices 
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-2009-73, and should be submitted on or before September 29, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

    \12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-21457 Filed 9-4-09; 8:45 am]
BILLING CODE 8010-01-P
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.