Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Fees and Rebates for Adding and Removing Liquidity, 13618-13620 [2010-6115]
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13618
Federal Register / Vol. 75, No. 54 / Monday, March 22, 2010 / Notices
composition and/or changes to the
Fund’s portfolio. Further, the
Commission notes that the Reporting
Authority that provides the Disclosed
Portfolio must implement and maintain,
or be subject to, procedures designed to
prevent the use and dissemination of
material non-public information
regarding the actual components of each
of the portfolios.22
The Exchange has represented that
the Shares are equity securities subject
to the Exchange’s rules governing the
trading of equity securities. In support
of this proposal, the Exchange has made
representations, including:
(1) The Shares will conform to the
initial and continued listing criteria
under NYSE Arca Equities Rule 8.600.
(2) The Exchange’s surveillance
procedures are adequate to properly
monitor Exchange trading of the Shares
in all trading sessions and to deter and
detect violations of Exchange rules and
applicable Federal securities laws.
(3) Prior to the commencement of
trading, the Exchange will inform its
ETP Holders in an Information Bulletin
of the special characteristics and risks
associated with trading the Shares.
Specifically, the Information Bulletin
will discuss the following: (a) The
procedures for purchases and
redemptions of Shares and that Shares
are not individually redeemable; (b)
NYSE Arca Equities Rule 9.2(a), which
imposes a duty of due diligence on its
ETP Holders to learn the essential facts
relating to every customer prior to
trading the Shares; (c) the risks involved
in trading the Shares during the
Opening and Late Trading Sessions
when an updated PIV will not be
calculated or publicly disseminated; (d)
how information regarding the PIV is
disseminated; (e) the requirement that
ETP Holders deliver a prospectus to
investors purchasing newly issued
Shares prior to or concurrently with the
confirmation of a transaction; and (f)
trading information.
(4) The Fund will be in compliance
with Rule 10A–3 under the Act.23
(5) The Fund and the Subsidiary will
not invest in non-U.S. equity securities,
except that the Fund will invest in
shares issued by the Subsidiary.
(6) The Fund’s investments in
Commodity-Linked Instruments will be
consistent with the Fund’s investment
objective and will not be used to
enhance leverage.
This approval order is based on the
Exchange’s representations.
For the foregoing reasons, the
Commission finds that the proposed
22 See
23 See
supra note 18.
supra note 8.
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rule change is consistent with the Act
and the rules and regulations
thereunder applicable to a national
securities exchange.
IV. Accelerated Approval
The Commission finds good cause,
pursuant to Section 19(b)(2) of the
Act,24 for approving the proposal prior
to the thirtieth day after the date of
publication of the Notice in the Federal
Register. The Commission notes that it
has approved the listing and trading on
the Exchange of shares of other actively
managed exchange-traded funds based
on a portfolio of securities, the
characteristics of which are similar to
those to be invested by the Fund.25 The
Commission also notes that it has not
received any comments regarding this
proposal. The Commission believes that
the proposal to list and trade the Shares
of the Fund do not raise any novel
regulatory issues and accelerating
approval of this proposal should benefit
investors by creating, without undue
delay, additional competition in the
market for Managed Fund Shares.
V. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,26 that the
proposed rule change (SR–NYSEArca–
2010–04) be, and it hereby is, approved
on an accelerated basis.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.27
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–6114 Filed 3–19–10; 8:45 am]
BILLING CODE 8011–01–P
24 15
U.S.C. 78s(b)(2).
e.g., Securities Exchange Act Release Nos.
57514 (March 17, 2008), 73 FR 15230 (March 21,
2008) (SR–Amex–2008–02) (approving the listing
and trading of shares of the Bear Stearns Current
Yield Fund); 57801 (May 8, 2008), 73 FR 27878
(May 14, 2008) (SR–NYSEArca–2008–31)
(approving the listing and trading of shares of
twelve actively-managed funds of the WisdomTree
Trust); 60981 (November 10, 2009), 74 FR 59594
(November 18, 2009) (SR–NYSEArca–2009–79)
(approving the listing and trading of shares of five
actively-managed fixed income funds of the PIMCO
ETF Trust); and 61365 (January 15, 2010), 75 FR
4124 (January 26, 2010) (SR–NYSEArca–2009–114)
(approving the listing and trading of shares of two
actively-managed funds of the Grail Advisors ETF
Trust).
26 15 U.S.C. 78s(b)(1).
27 17 CFR 200.30–3(a)(12).
25 See,
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–61699; File No. SR–Phlx–
2010–42]
Self-Regulatory Organizations;
NASDAQ OMX PHLX, Inc.; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change Relating to
Fees and Rebates for Adding and
Removing Liquidity
March 12, 2010.
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 March 1,
2010, 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. Phlx has designated
this proposal as one establishing or
changing a member due, fee, or other
charge imposed under Section
19(b)(3)(A)(ii) of the Act 3 and Rule 19b–
4(f)(2) thereunder,4 which renders the
proposal effective upon filing with the
Commission. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
applicability of Complex Orders to fees
and rebates for adding and removing
liquidity.
While changes to the Fee Schedule
pursuant to this proposal are effective
upon filing, the Exchange has
designated these changes to be operative
for transactions settling on or after
March 1, 2010.5
The text of the proposed rule change
is available on the Exchange’s Web site
at https://nasdaqtrader.com/
micro.aspx?id=PHLXfilings, at the
principal office of the Exchange, at the
Commission’s Public Reference Room,
and on the Commission’s Web site at
https://www.sec.gov.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(ii).
4 17 CFR 240.19b–4(f)(2).
5 The Commission notes that the fees in this
proposed rule change were effective upon filing on
March 1, 2010 and apply solely to trades effected
on or after that date.
2 17
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Federal Register / Vol. 75, No. 54 / Monday, March 22, 2010 / Notices
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
pwalker on DSK8KYBLC1PROD with NOTICES
1. Purpose
The purpose of the proposed rule
change is to amend the applicability of
Complex Orders to remain competitive.
The Exchange proposes modifying the
applicability of Complex Orders to the
fees and rebates for adding and
removing liquidity. Currently, single
contra-side orders that are executed
against the individual components of
Complex Orders will be charged under
the proposed Fee Schedule. The
individual components of such a
Complex Order will not be charged. The
Exchange proposes amending this
exception to state that individual
components of such a Complex Order
will be charged according to the fees
and rebates for adding and removing
liquidity. The Exchange is amending the
applicability of Complex Orders to the
fees described herein because the
Exchange no longer believes that this
incentive is necessary.
Currently, the Exchange assesses a
per-contract transaction charge in
Standard and Poor’s Depositary
Receipts/SPDRs (‘‘SPY’’) 6, the
PowerShares QQQ Trust (‘‘QQQQ’’)®;
Ishares Russell 2000 (‘‘IWM’’) and
Citigroup Inc. (‘‘C’’)options on five
different categories of market
participants that submit orders and/or
quotes that remove, or ‘‘take,’’ liquidity
from the Exchange. The per-contract
transaction charge depends on the
category of market participant
submitting an order or quote to the
Exchange that removes liquidity.7
The market participants are as
follows: (i) Specialists, Registered
Options Traders (‘‘ROTs’’), Streaming
6 SPY options are based on the SPDR exchangetraded fund (‘‘ETF’’), which is designed to track the
performance of the S&P 500 Index.
7 See SR–Phlx–2010–33.
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Quote Traders (‘‘SQTs’’) 8 and Remote
Streaming Quote Traders (‘‘RSQTs’’); 9
(ii) customers; 10 (iii) specialists, ROTs,
SQTs and RSQTs that receive Directed
Orders (‘‘Directed Participants’’ 11 or
‘‘Directed Specialists, RSQTs, or
SQTs’’ 12); (iv) Firms; and (v) brokerdealers.
The per-contract transaction charges
are assessed on participants who submit
proprietary quotes and/or orders that
remove liquidity from the Exchange’s
market in options listed on the Fee
Schedule. The Exchange also assesses a
transaction charge to Firms and brokerdealers that add liquidity.
Additionally, the Exchange has in
place a per-contract rebate relating to
transaction charges for orders or
quotations that add liquidity to the
Exchange’s market in options listed on
the fee schedule. The amount of the
rebate depends on the category of
participant whose order or quote was
executed as part of the Phlx
disseminated Best Bid and/or Offer.
2. Statutory Basis
The Exchange believes that its
proposal to amend its schedule of fees
is consistent with Section 6(b) of the
Act 13 in general, and furthers the
objectives of Section 6(b)(4) of the Act 14
in particular, in that it is an equitable
allocation of reasonable fees and other
charges among Exchange members. The
impact of the proposal upon the net fees
paid by a particular market participant
will depend on a number of variables,
including its monthly volumes, the
8 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).
9 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).
10 This applies to all customer orders, directed
and non-directed.
11 For purposes of this fee, a Directed Participant
is a Specialist, SQT, or RSQT that executes a
customer order that is directed to them by an Order
Flow Provider and is executed electronically on the
Exchange’s electronic trading platform for options,
PHLX XL II.
12 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.
13 15 U.S.C. 78f(b).
14 15 U.S.C. 78f(b)(4).
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13619
order types it uses, and the prices of its
quotes and orders (i.e., its propensity to
add or remove liquidity). The rate
increase to Firms for adding liquidity in
the various symbols including the
additional Symbols is the same rate that
is currently being assessed on BrokerDealers.
Specifically, the Exchange believes
that amending the applicability of the
complex orders to these fees is equitable
as that will apply equally to all
participants.
Accordingly, the Exchange also
believes that the addition of the options
to this portion of the Fee Schedule is
equitable in that it will apply to all
categories of participants in the same
manner.
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 15 and
paragraph (f)(2) of Rule 19b–4 16
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
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
15 15
16 17
E:\FR\FM\22MRN1.SGM
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
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Federal Register / Vol. 75, No. 54 / Monday, March 22, 2010 / Notices
Number SR–Phlx–2010–42 on the
subject line.
SECURITIES AND EXCHANGE
COMMISSION
Paper Comments
[Release No. 34–61703; File No. SR–
NASDAQ–2010–023]
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
Station Place, 100 F Street, NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–Phlx–2010–42. 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 Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official
business days between the hours of 10
a.m. and 3 p.m. Copies of such filing
also will be available for inspection and
copying at the principal office of the
Exchange. All comments received will
be posted without change; the
Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
publicly available. All submissions
should refer to File Number SR–Phlx–
2010–42 and should be submitted on or
before April 12, 2010.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–6115 Filed 3–19–10; 8:45 am]
pwalker on DSK8KYBLC1PROD with NOTICES
BILLING CODE 8011–01–P
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend
NASDAQ Rule 9520 Series Regarding
Eligibility Procedures for Persons
Subject to Certain Disqualifications
March 12, 2010.
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 February
19, 2010, The NASDAQ Stock Market
LLC (‘‘NASDAQ’’ 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 substantially prepared by
NASDAQ. NASDAQ has designated the
proposed rule change as constituting a
‘‘non-controversial’’ rule change under
paragraph (f)(6) of Section 19 under the
Act.3 The Commission is publishing this
notice to solicit comments on the
proposed rule change from interested
persons.
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
NASDAQ proposes to amend the
NASDAQ Rule 9520 Series regarding
eligibility procedures for persons
subject to certain disqualifications.
NASDAQ proposes to implement this
rule change immediately upon filing.
The text of the proposed rule change is
available at https://
nasdaqomx.cchwallstreet.com/, at
NASDAQ’s principal office, 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,
NASDAQ 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.
NASDAQ has prepared summaries, set
forth in Sections A, B, and C below, of
the most significant aspects of such
statements.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 17 CFR 240.19b–4(f)(6).
2 17
17 17
CFR 200.30–3(a)(12).
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16:41 Mar 19, 2010
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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
the NASDAQ Rule 9520 Series, the
Exchange’s eligibility proceedings
section, to conform to recent changes in
the rules of the Financial Industry
Regulatory Authority, Inc. (‘‘FINRA’’).4
The proposal also includes the proposed
Statutory Disqualification Regulatory
Alert (‘‘SD Regulatory Alert’’) that
outlines the applicable eligibility
procedures. The amended rules would
incorporate by reference the procedures
in the SD Regulatory Alert. As further
detailed in the SD Regulatory Alert, the
need for a member to file an application
with NASDAQ for approval,
notwithstanding the disqualification
would depend on: (1) The type of
disqualification; (2) the date of
disqualification; or (3) whether the firm
or individual is seeking admission,
readmission or continuation in the
securities industry.
FINRA recently revised its definition
of disqualification to incorporate three
additional categories of statutory
disqualification, including willful
violations of the Federal securities or
commodities laws, grounds for statutory
disqualification that were enacted in the
Sarbanes-Oxley Act, and associations
with certain other persons subject to a
disqualification. Although NASDAQ’s
definition has always included these
categories, Commission staff informed
NASDAQ at the time of its registration
as a national securities exchange that, in
light of NASDAQ’s origin as a
subsidiary of FINRA’s predecessor, the
National Association of Securities
Dealers, Inc., staff would not object if
NASDAQ applied FINRA’s then morelimited definition, pending adoption of
procedures by FINRA to process
disqualifications under these additional
categories.
The proposed rule change would
amend NASDAQ Rule 9522 to address
the initiation of eligibility proceedings
and the authority of NASDAQ’s
Department of Member Regulation
(‘‘NASDAQ Regulation’’ or ‘‘Member
Regulation’’) to approve applications
relating to a disqualification where the
disqualification arises from findings or
orders specified in Section 15(b)(4)(D),
(E) or (H) of the Act or that arise under
Section 3(a)(39)(E) of the Act (i.e., the
4 See Securities Exchange Act Release No. 59586
(March 17, 2009), 74 FR 12166 (March 23, 2009)
(SR–FINRA–2008–045); Securities Exchange Act
Release No. 59722 (April 7, 2009), (SR–FINRA–
2009–022).
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]]>Agencies
[Federal Register Volume 75, Number 54 (Monday, March 22, 2010)]
[Notices]
[Pages 13618-13620]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-6115]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61699; File No. SR-Phlx-2010-42]
Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change Relating
to Fees and Rebates for Adding and Removing Liquidity
March 12, 2010.
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 March 1, 2010, 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. Phlx has designated this
proposal as one establishing or changing a member due, fee, or other
charge imposed under Section 19(b)(3)(A)(ii) of the Act \3\ and Rule
19b-4(f)(2) thereunder,\4\ which renders the proposal effective upon
filing with the Commission. 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.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the applicability of Complex Orders
to fees and rebates for adding and removing liquidity.
While changes to the Fee Schedule pursuant to this proposal are
effective upon filing, the Exchange has designated these changes to be
operative for transactions settling on or after March 1, 2010.\5\
---------------------------------------------------------------------------
\5\ The Commission notes that the fees in this proposed rule
change were effective upon filing on March 1, 2010 and apply solely
to trades effected on or after that date.
---------------------------------------------------------------------------
The text of the proposed rule change is available on the Exchange's
Web site at https://nasdaqtrader.com/micro.aspx?id=PHLXfilings, at the
principal office of the Exchange, at the Commission's Public Reference
Room, and on the Commission's Web site at https://www.sec.gov.
[[Page 13619]]
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the proposed rule change is to amend the
applicability of Complex Orders to remain competitive.
The Exchange proposes modifying the applicability of Complex Orders
to the fees and rebates for adding and removing liquidity. Currently,
single contra-side orders that are executed against the individual
components of Complex Orders will be charged under the proposed Fee
Schedule. The individual components of such a Complex Order will not be
charged. The Exchange proposes amending this exception to state that
individual components of such a Complex Order will be charged according
to the fees and rebates for adding and removing liquidity. The Exchange
is amending the applicability of Complex Orders to the fees described
herein because the Exchange no longer believes that this incentive is
necessary.
Currently, the Exchange assesses a per-contract transaction charge
in Standard and Poor's Depositary Receipts/SPDRs (``SPY'') \6\, the
PowerShares QQQ Trust (``QQQQ'')[reg]; Ishares Russell 2000 (``IWM'')
and Citigroup Inc. (``C'')options on five different categories of
market participants that submit orders and/or quotes that remove, or
``take,'' liquidity from the Exchange. The per-contract transaction
charge depends on the category of market participant submitting an
order or quote to the Exchange that removes liquidity.\7\
---------------------------------------------------------------------------
\6\ SPY options are based on the SPDR exchange-traded fund
(``ETF''), which is designed to track the performance of the S&P 500
Index.
\7\ See SR-Phlx-2010-33.
---------------------------------------------------------------------------
The market participants are as follows: (i) Specialists, Registered
Options Traders (``ROTs''), Streaming Quote Traders (``SQTs'') \8\ and
Remote Streaming Quote Traders (``RSQTs''); \9\ (ii) customers; \10\
(iii) specialists, ROTs, SQTs and RSQTs that receive Directed Orders
(``Directed Participants'' \11\ or ``Directed Specialists, RSQTs, or
SQTs'' \12\); (iv) Firms; and (v) broker-dealers.
---------------------------------------------------------------------------
\8\ 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).
\9\ 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).
\10\ This applies to all customer orders, directed and non-
directed.
\11\ For purposes of this fee, a Directed Participant is a
Specialist, SQT, or RSQT that executes a customer order that is
directed to them by an Order Flow Provider and is executed
electronically on the Exchange's electronic trading platform for
options, PHLX XL II.
\12\ 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.
---------------------------------------------------------------------------
The per-contract transaction charges are assessed on participants
who submit proprietary quotes and/or orders that remove liquidity from
the Exchange's market in options listed on the Fee Schedule. The
Exchange also assesses a transaction charge to Firms and broker-dealers
that add liquidity.
Additionally, the Exchange has in place a per-contract rebate
relating to transaction charges for orders or quotations that add
liquidity to the Exchange's market in options listed on the fee
schedule. The amount of the rebate depends on the category of
participant whose order or quote was executed as part of the Phlx
disseminated Best Bid and/or Offer.
2. Statutory Basis
The Exchange believes that its proposal to amend its schedule of
fees is consistent with Section 6(b) of the Act \13\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \14\ in
particular, in that it is an equitable allocation of reasonable fees
and other charges among Exchange members. The impact of the proposal
upon the net fees paid by a particular market participant will depend
on a number of variables, including its monthly volumes, the order
types it uses, and the prices of its quotes and orders (i.e., its
propensity to add or remove liquidity). The rate increase to Firms for
adding liquidity in the various symbols including the additional
Symbols is the same rate that is currently being assessed on Broker-
Dealers.
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\13\ 15 U.S.C. 78f(b).
\14\ 15 U.S.C. 78f(b)(4).
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Specifically, the Exchange believes that amending the applicability
of the complex orders to these fees is equitable as that will apply
equally to all participants.
Accordingly, the Exchange also believes that the addition of the
options to this portion of the Fee Schedule is equitable in that it
will apply to all categories of participants in the same manner.
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 \15\ and paragraph (f)(2) of Rule 19b-4 \16\
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.
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\15\ 15 U.S.C. 78s(b)(3)(A)(ii).
\16\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File
[[Page 13620]]
Number SR-Phlx-2010-42 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-Phlx-2010-42. 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 Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make publicly available. All
submissions should refer to File Number SR-Phlx-2010-42 and should be
submitted on or before April 12, 2010.
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. 2010-6115 Filed 3-19-10; 8:45 am]
BILLING CODE 8011-01-P
