Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Prohibit Options Specialist Commission Charges, 52283-52285 [E9-24355]
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Federal Register / Vol. 74, No. 195 / Friday, October 9, 2009 / Notices
Orders (‘‘P Orders’’) 15 sent to the
Exchange via Linkage pursuant to the
Linkage Plan 16 will remain in effect
until such time as all participant
exchanges to the Linkage Plan no longer
send Linkage P or P/A orders via the
Linkage Plan. At such time the
Exchange intends to file a proposed rule
change with the Commission to request
the discontinuation of that pilot as
well.17
2. Statutory Basis
The Exchange believes that its
proposal to amend its schedule of fees
is consistent with Section 6(b) of the
Act 18 in general, and furthers the
objectives of Section 6(b)(4) of the Act 19
in particular, in that it is an equitable
allocation of reasonable fees and other
charges among Exchange members. In
particular, the Exchange believes that
the pilot program is no longer necessary
because the specialists no longer utilize
Linkage to route trades.
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 that is not
necessary or appropriate in furtherance
of the purposes of the Exchange 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.
mstockstill on DSKH9S0YB1PROD with NOTICES
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing proposed rule change is
effective upon filing pursuant to Section
19(b)(3)(A)(ii) of the Act 20 and Rule
19b–4(f)(2) thereunder,21 because it
establishes or changes a due, fee, or
other charge applicable only to a
member imposed by the Exchange. At
any time within 60 days of the filing of
15 A principal Order is an order for the principal
account of an Eligible Market Maker and is not a
P/A Order. See Exchange Rule 1088.
16 See Securities Exchange Act Release No. 59891
(May 8, 2009), 74 FR 22990 (May 15, 2009) (SR–
Phlx–2009–24).
17 Currently, the Exchange has a temporary
linkage rule, Exchange Rule 1088, which provides
that the Exchange will continue to accept P and P/
A Orders from options exchanges that continue to
use such orders to address trade-throughs via the
existing linkage for a temporary period. See
Securities Exchange Act Release No. 60363 (July 22,
2009), 74 FR 37270 (July 28, 2009) (SR–Phlx–2009–
61). See also Exchange Rule 1088.
18 15 U.S.C. 78f(b).
19 15 U.S.C. 78f(b)(4).
20 15 U.S.C. 78s(b)(3)(A)(ii).
21 17 CFR 240.19b–4(f)(2).
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52283
85 and should be submitted on or before
October 30, 2009.
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.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.22
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–24352 Filed 10–8–09; 8:45 am]
IV. Solicitation of Comments
BILLING CODE 8011–01–P
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 rulecomments@sec.gov. Please include File
Number SR–Phlx-2009–85 on the
subject line.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–60784; File No. SR–Phlx–
2009–69]
Self-Regulatory Organizations;
NASDAQ OMX PHLX, Inc.; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Prohibit
Options Specialist Commission
Charges
October 2, 2009.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
Paper Comments
notice is hereby given that on October
1, 2009, NASDAQ OMX PHLX, Inc.
• Send paper comments in triplicate
(‘‘Phlx’’ or ‘‘Exchange’’) filed with the
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission
Securities and Exchange Commission,
(‘‘Commission’’) the proposed rule
100 F Street NE., Washington, DC
change as described in Items I, II, and
20549–1090.
III, below, which Items have been
All submissions should refer to File
prepared by the Exchange. The
Number SR–Phlx–2009–85. This file
Commission is publishing this notice to
number should be included on the
subject line if e-mail is used. To help the solicit comments on the proposed rule
change from interested persons.
Commission process and review your
comments more efficiently, please use
I. Self-Regulatory Organization’s
only one method. The Commission will Statement of the Terms of Substance of
post all comments on the Commission’s the Proposed Rule Change
Internet Web site (https://www.sec.gov/
The Exchange proposes to adopt Rule
rules/sro/shtml). Copies of the
1014, Commentary .10 to establish that
submission, all subsequent
options specialists on the Exchange are
amendments, all written statements
prohibited from charging commissions.
with respect to the proposed rule
The text of the proposed rule change
change that are filed with the
is available on the Exchange’s Web site
Commission, and all written
at https://www.nasdaqtrader.com/
communications relating to the
micro.aspx?id=PHLXRulefilings, at the
proposed rule change between the
principal office of the Exchange, and at
Commission and any person, other than the Commission’s Public Reference
those that may be withheld from the
Room.
public in accordance with the
II. Self-Regulatory Organization’s
provisions of 5 U.S.C. 552, will be
Statement of the Purpose of, and
available for inspection and copying in
Statutory Basis for, the Proposed Rule
the Commission’s Public Reference
Room, on official business days between Change
the hours of 10 a.m. and 3 p.m. Copies
In its filing with the Commission, the
of such filing will also be available for
Exchange included statements
inspection and copying at the principal
concerning the purpose of and basis for
office of the Exchange. All comments
the proposed rule change and discussed
received will be posted without change; any comments it received on the
the Commission does not edit personal
proposed rule change. The text of these
identifying information from
statements may be examined at the
submissions. You should submit only
information that you wish to make
22 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
available publicly. All submissions
2 17 CFR 240.19b–4.
should refer to File No. SR–Phlx–2009–
PO 00000
Frm 00110
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52284
Federal Register / Vol. 74, No. 195 / Friday, October 9, 2009 / Notices
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
mstockstill on DSKH9S0YB1PROD with NOTICES
1. Purpose
The purpose of the proposed rule
change is to eliminate arbitrary and
potentially excessive costs for trading
options on the Exchange. The Exchange
believes that this prohibition should
provide clarity to member organizations
and options investors on this topic by
stating the current position of the
Exchange. Specifically, the Exchange
proposes to adopt a rule prohibiting
specialist commission charges. In effect,
the rules prohibit the specialist 3 from
charging a commission for any trade in
which he participated, whether acting
as agent or principal. In addition, the
rules prohibit a specialist from charging
a commission or fee for the handling,
execution or processing of an order
delivered through the Exchange’s
automated trading system, Phlx XL II,4
whether the specialist is acting as
principal or agent for the order. The
agency responsibilities of a specialist
have virtually been eliminated, as the
Exchange’s trading systems have
become increasingly automated,
particularly with the completed roll-out
of Phlx XL II, the Exchange’s new,
enhanced options trading system.5
The Exchange’s By-Laws give broad
authority for the Exchange to impose
and regulate fees.6 Given market
developments and changes in market
structure, the Exchange believes that it
is inappropriate for specialists to be
charging commissions and fees;
specialists occupy an important status
in the Exchange’s options marketplace
and the Exchange believes that it is not
good market practice for specialists to
charge commissions in connection with
specialist functions. The Exchange feels
that it is necessary to file this proposed
rule change to eliminate any ambiguity
with respect to its position on the topic.
Adoption of this rule should not be
interpreted to mean that any specialist
fee or commission charged before the
adoption was valid or permitted.
3 The term ‘‘specialist’’ is used interchangeably
with ‘‘specialist unit.’’
4 See Rule 1080.
5 See e.g., Rule 1080(m), which covers the
Exchange’s routing of orders to other markets,
which was previously done by specialists.
6 See Exchange By-Law Article XIV, Section 14–
1(a) and Article XII, Section 12–6(b).
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16:05 Oct 08, 2009
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2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act 7 in general, and furthers the
objectives of Section 6(b)(5) of the Act 8
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,
because specialist commissions increase
the cost of doing business on the
Exchange, which, in turn, weakens the
Exchange’s competitive position and
potentially increase the cost of options
trading for investors. For these same
reasons, the Exchange also believes that
the proposed rule change is consistent
with Section 11(A)(a)(1)(C) of the Act,9
which states that it is in the public
interest and appropriate for the
protection of investors and the
maintenance of fair and orderly markets
to assure, among other things,
economically efficient execution of
securities transactions, and fair
competition among brokers and dealers,
among exchange markets, and between
exchange markets and markets other
than exchange markets.
In addition, the Exchange believes
that the proposal is consistent with
Section 6(e)(1) of the Act,10 because it
is not designed to permit unfair
discrimination between customers,
issuers, brokers and dealers, or to
impose any schedule or fix rates of
commissions, allowances, discounts, or
other fees to be charged by its members.
Section 6(e) of the Act 11 was adopted by
Congress in 1975 to statutorily prohibit
the fixed minimum commission rate
system. The fixed minimum
commission rate system allowed
exchanges to set minimum commission
rates that their members had to charge
their customers, but allowed members
to charge more. The Exchange’s
proposal, by contrast, does not establish
a minimum commission rate, but
instead prohibits the Exchange’s
specialists from charging a commission
for handling an order, as part of their
responsibilities as a specialist.
Accordingly, the Exchange does not
believe that this proposed rule
constitutes fixing commissions,
allowances, discounts, or other fees for
purposes of Section 6(e)(1) of the Act.12
Indeed, the Commission has previously
7 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
9 15 U.S.C. 78K–1(a)(1)(C).
10 15 U.S.C. 78f(e)(1).
11 15 U.S.C. 78f(e).
12 15 U.S.C. 78f(e)(1).
8 15
PO 00000
Frm 00111
Fmt 4703
Sfmt 4703
noted that limits on fees that specialists
may charge apply only to members who
choose to be specialists, and that, by
limiting fees, an exchange is merely
imposing a condition, which is
consistent with the Act, on a member’s
appointment as a specialist.13
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
Pursuant to Section 19(b)(3)(A) of the
Act 14 and Rule 19b–4(f)(6) 15
thereunder, the Exchange has
designated this proposal as one that
effects a change that: (i) Does not
significantly affect the protection of
investors or the public interest; (ii) does
not impose any significant burden on
competition; and (iii) by its terms, does
not become operative for 30 days after
the date of the filing, or such shorter
time as the Commission may designate
if consistent with the protection of
investors and the public interest.
Rule 19b–4(f)(6) requires a selfregulatory organization to give the
Commission written notice of its intent
to file the proposed rule change at least
five business days prior to the date of
filing of the proposed rule change, or
such shorter time as designated by the
Commission. The Exchange has satisfied
this requirement. Furthermore, a
proposed rule change filed pursuant to
Rule 19b–4(f)(6) under the Act 16
normally does not become operative for
30 days after the date of its filing.
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.
13 See text preceding note 27 in Securities
Exchange Act Release No. 55913 (June 15, 2007), 72
FR 34323 (June 21, 2007) (SR–Amex–2007–13).
14 15 U.S.C. 78s(b)(3)(A).
15 17 CFR 240.19b–4(f)(6).
16 17 CFR 240.19b–4(f)(6).
E:\FR\FM\09OCN1.SGM
09OCN1
Federal Register / Vol. 74, No. 195 / Friday, October 9, 2009 / Notices
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:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–24355 Filed 10–8–09; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
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–2009–69 on the
subject line.
Paper Comments
[Release No. 34–60766; File No. SR–
NYSEArca–2009–86]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Relating to Activity
Assessment Fees
October 1, 2009.
mstockstill on DSKH9S0YB1PROD with NOTICES
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Exchange Act’’) 1 and Rule 19b–4
thereunder,2 notice is hereby given that,
on September 28, 2009, NYSE Arca, Inc.
(‘‘NYSE Arca’’ or the ‘‘Exchange’’) filed
All submissions should refer to File
with the Securities and Exchange
Number SR–Phlx–2009–69. This file
Commission (the ‘‘Commission’’) the
number should be included on the
proposed rule change as described in
subject line if e-mail is used. To help the Items I and II below, which Items have
Commission process and review your
been prepared by the Exchange. NYSE
comments more efficiently, please use
Arca filed the proposed rule change as
only one method. The Commission will a ‘‘non-controversial’’ proposal pursuant
post all comments on the Commission’s to Section 19(b)(3)(A) of the Act 3 and
Internet Web site (https://www.sec.gov/
Rule 19b–4(f)(6) thereunder,4 which
rules/sro.shtml). Copies of the
renders the proposal effective upon
submission, all subsequent
filing with the Commission. The
amendments, all written statements
Commission is publishing this notice to
with respect to the proposed rule
solicit comments on the proposed rule
change that are filed with the
change from interested persons.
Commission, and all written
I. Self-Regulatory Organization’s
communications relating to the
Statement of the Terms of Substance of
proposed rule change between the
the Proposed Rule Change
Commission and any person, other than
NYSE Arca proposes to, among other
those that may be withheld from the
changes, (1) amend NYSE Arca Equities
public in accordance with the
Rule 2.17(a) to provide for an Activity
provisions of 5 U.S.C. 552, will be
Assessment Fee to be paid by ETP
available for inspection and copying in
Holders in connection with the
the Commission’s Public Reference
Exchange’s required payments to the
Room, 100 F Street, NE., Washington,
Commission under Section 31 of the
DC 20549, on official business days
Exchange Act; 5 (2) add Commentary .01
between the hours of 10 am and 3 pm.
to NYSE Arca Equities Rule 2.17 to
Copies of such filing also will be
allow ETP Holders to voluntarily submit
available for inspection and copying at
the principal office of the Exchange. All to the Exchange, on or before December
31, 2009, funds that may have been
comments received will be posted
previously accumulated by them to
without change; the Commission does
satisfy their, and subsequently NYSE
not edit personal identifying
Arca’s, obligation to remit Section 31information from submissions. You
related fees; and (3) amend NYSE Arca
should submit only information that
you wish to make available publicly. All Options Rule 2.18(a) to provide for an
Activity Assessment Fee to be paid by
submissions should refer to File
Number SR–Phlx–2009–69 and should
1 15 U.S.C. 78s(b)(1).
be submitted on or before October 30,
2 17 CFR 240.19b–4.
2009.
3 15 U.S.C. 78s(b)(3)(A).
4 17
17 17
CFR 200.30–3(a)(12).
VerDate Nov<24>2008
16:05 Oct 08, 2009
5 15
Jkt 220001
PO 00000
CFR 240.19b–4(f)(6).
U.S.C. 78ee.
Frm 00112
Fmt 4703
OTP Firms and Holders in connection
with the required payments to the
Commission under Section 31 of the
Exchange Act.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://www.nyse.com, at the
Exchange’s principal office and at the
Public Reference Room of the
Commission.
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
self-regulatory organization 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 those 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 parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Pursuant to Section 31 of the
Exchange Act and Rule 31 thereunder,6
national securities exchanges and
associations (collectively, ‘‘SROs’’) are
required to pay a transaction fee to the
SEC that is designed to recover the costs
related to the government’s supervision
and regulation of the securities markets
and securities professionals. To offset
this obligation, the ETP Holders (under
NYSE Arca Equities Rule 2.17) and OTP
Firms and OTP Holders (under NYSE
Arca Options Rule 2.18) are assessed
charges in connection with satisfaction
of the Exchange’s payment obligations
under Section 31. The Exchange
calculates such fees by multiplying the
aggregate dollar amount of ‘‘covered
sales’’ (as defined in Section 31 of the
Exchange Act) effected on the Exchange
during the appropriate period by the
Section 31(b) fee rate in effect during
that period. Clearing members may in
turn seek to charge a fee to their
customers or correspondent firms. Any
allocation of the fee between the
clearing member and its correspondent
firm or customer is the responsibility of
the clearing member.
NYSE Arca Equities Rule 2.17 and
NYSE Arca Options Rule 2.18 relate to
payment by ETP Holders (pursuant to
NYSE Arca Equities Rule 2.17) and by
6 17
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52285
E:\FR\FM\09OCN1.SGM
CFR 240.31.
09OCN1
]]>Agencies
[Federal Register Volume 74, Number 195 (Friday, October 9, 2009)]
[Notices]
[Pages 52283-52285]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-24355]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-60784; File No. SR-Phlx-2009-69]
Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Prohibit
Options Specialist Commission Charges
October 2, 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 October 1, 2009, NASDAQ OMX PHLX, Inc. (``Phlx'' or ``Exchange'')
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.
---------------------------------------------------------------------------
\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 adopt Rule 1014, Commentary .10 to
establish that options specialists on the Exchange are prohibited from
charging commissions.
The text of the proposed rule change is available on the Exchange's
Web site at https://www.nasdaqtrader.com/micro.aspx?id=PHLXRulefilings,
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
[[Page 52284]]
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 eliminate arbitrary
and potentially excessive costs for trading options on the Exchange.
The Exchange believes that this prohibition should provide clarity to
member organizations and options investors on this topic by stating the
current position of the Exchange. Specifically, the Exchange proposes
to adopt a rule prohibiting specialist commission charges. In effect,
the rules prohibit the specialist \3\ from charging a commission for
any trade in which he participated, whether acting as agent or
principal. In addition, the rules prohibit a specialist from charging a
commission or fee for the handling, execution or processing of an order
delivered through the Exchange's automated trading system, Phlx XL
II,\4\ whether the specialist is acting as principal or agent for the
order. The agency responsibilities of a specialist have virtually been
eliminated, as the Exchange's trading systems have become increasingly
automated, particularly with the completed roll-out of Phlx XL II, the
Exchange's new, enhanced options trading system.\5\
---------------------------------------------------------------------------
\3\ The term ``specialist'' is used interchangeably with
``specialist unit.''
\4\ See Rule 1080.
\5\ See e.g., Rule 1080(m), which covers the Exchange's routing
of orders to other markets, which was previously done by
specialists.
---------------------------------------------------------------------------
The Exchange's By-Laws give broad authority for the Exchange to
impose and regulate fees.\6\ Given market developments and changes in
market structure, the Exchange believes that it is inappropriate for
specialists to be charging commissions and fees; specialists occupy an
important status in the Exchange's options marketplace and the Exchange
believes that it is not good market practice for specialists to charge
commissions in connection with specialist functions. The Exchange feels
that it is necessary to file this proposed rule change to eliminate any
ambiguity with respect to its position on the topic. Adoption of this
rule should not be interpreted to mean that any specialist fee or
commission charged before the adoption was valid or permitted.
---------------------------------------------------------------------------
\6\ See Exchange By-Law Article XIV, Section 14-1(a) and Article
XII, Section 12-6(b).
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \7\ in general, and furthers the objectives of Section
6(b)(5) of the Act \8\ 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,
because specialist commissions increase the cost of doing business on
the Exchange, which, in turn, weakens the Exchange's competitive
position and potentially increase the cost of options trading for
investors. For these same reasons, the Exchange also believes that the
proposed rule change is consistent with Section 11(A)(a)(1)(C) of the
Act,\9\ which states that it is in the public interest and appropriate
for the protection of investors and the maintenance of fair and orderly
markets to assure, among other things, economically efficient execution
of securities transactions, and fair competition among brokers and
dealers, among exchange markets, and between exchange markets and
markets other than exchange markets.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
\9\ 15 U.S.C. 78K-1(a)(1)(C).
---------------------------------------------------------------------------
In addition, the Exchange believes that the proposal is consistent
with Section 6(e)(1) of the Act,\10\ because it is not designed to
permit unfair discrimination between customers, issuers, brokers and
dealers, or to impose any schedule or fix rates of commissions,
allowances, discounts, or other fees to be charged by its members.
Section 6(e) of the Act \11\ was adopted by Congress in 1975 to
statutorily prohibit the fixed minimum commission rate system. The
fixed minimum commission rate system allowed exchanges to set minimum
commission rates that their members had to charge their customers, but
allowed members to charge more. The Exchange's proposal, by contrast,
does not establish a minimum commission rate, but instead prohibits the
Exchange's specialists from charging a commission for handling an
order, as part of their responsibilities as a specialist. Accordingly,
the Exchange does not believe that this proposed rule constitutes
fixing commissions, allowances, discounts, or other fees for purposes
of Section 6(e)(1) of the Act.\12\ Indeed, the Commission has
previously noted that limits on fees that specialists may charge apply
only to members who choose to be specialists, and that, by limiting
fees, an exchange is merely imposing a condition, which is consistent
with the Act, on a member's appointment as a specialist.\13\
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78f(e)(1).
\11\ 15 U.S.C. 78f(e).
\12\ 15 U.S.C. 78f(e)(1).
\13\ See text preceding note 27 in Securities Exchange Act
Release No. 55913 (June 15, 2007), 72 FR 34323 (June 21, 2007) (SR-
Amex-2007-13).
---------------------------------------------------------------------------
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
Pursuant to Section 19(b)(3)(A) of the Act \14\ and Rule 19b-
4(f)(6) \15\ thereunder, the Exchange has designated this proposal as
one that effects a change that: (i) Does not significantly affect the
protection of investors or the public interest; (ii) does not impose
any significant burden on competition; and (iii) by its terms, does not
become operative for 30 days after the date of the filing, or such
shorter time as the Commission may designate if consistent with the
protection of investors and the public interest.
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\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 17 CFR 240.19b-4(f)(6).
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Rule 19b-4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file the proposed rule
change at least five business days prior to the date of filing of the
proposed rule change, or such shorter time as designated by the
Commission. The Exchange has satisfied this requirement. Furthermore, a
proposed rule change filed pursuant to Rule 19b-4(f)(6) under the Act
\16\ normally does not become operative for 30 days after the date of
its filing.
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\16\ 17 CFR 240.19b-4(f)(6).
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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.
[[Page 52285]]
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-2009-69 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-2009-69. 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, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
am and 3 pm. 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 Number SR-Phlx-2009-69 and should be
submitted on or before October 30, 2009.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-24355 Filed 10-8-09; 8:45 am]
BILLING CODE 8011-01-P
