Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Rebates for Adding and Fees for Removing Liquidity, 32826-32828 [2010-13827]
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32826
Federal Register / Vol. 75, No. 110 / Wednesday, June 9, 2010 / Notices
pursuant to the advisory agreement of
any investment company in which the
Fund may invest.
Applicants’ Legal Analysis:
1. Section 12(d)(1)(A) of the Act
provides that no registered investment
company (‘‘acquiring company’’) may
acquire securities of another investment
company (‘‘acquired company’’) if such
securities represent more than 3% of the
acquired company’s outstanding voting
stock or more than 5% of the acquiring
company’s total assets, or if such
securities, together with the securities of
other investment companies, represent
more than 10% of the acquiring
company’s total assets. Section
12(d)(1)(B) of the Act provides that no
registered open-end investment
company may sell its securities to
another investment company if the sale
will cause the acquiring company to
own more than 3% of the acquired
company’s voting stock, or cause more
than 10% of the acquired company’s
voting stock to be owned by investment
companies and companies controlled by
them.
2. Section 12(d)(1)(G) of the Act
provides that section 12(d)(1) will not
apply to securities of an acquired
company purchased by an acquiring
company if: (a) The acquired company
and acquiring company are part of the
same group of investment companies;
(b) the acquiring company holds only
securities of acquired companies that
are part of the same group of investment
companies, government securities, and
short-term paper; (c) the aggregate sales
loads and distribution-related fees of the
acquiring company and the acquired
company are not excessive under rules
adopted pursuant to section 22(b) or
section 22(c) of the Act by a securities
association registered under section 15A
of the Exchange Act or by the
Commission; and (d) the acquired
company has a policy that prohibits it
from acquiring securities of registered
open-end investment companies or
registered unit investment trusts in
reliance on section 12(d)(1)(F) or (G) of
the Act.
3. Rule 12d1–2 under the Act permits
a registered open-end investment
company or a registered unit investment
trust that relies on section 12(d)(1)(G) of
the Act to acquire, in addition to
securities issued by another registered
investment company in the same group
of investment companies, government
securities, and short-term paper: (a)
Securities issued by an investment
company that is not in the same group
of investment companies, when the
acquisition is in reliance on section
12(d)(1)(A) or 12(d)(1)(F) of the Act; (b)
securities (other than securities issued
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by an investment company); and (c)
securities issued by a money market
fund, when the investment is in reliance
on rule 12d1–1 under the Act. For the
purposes of rule 12d1–2, ‘‘securities’’
means any security as defined in section
2(a)(36) of the Act.
4. Section 6(c) of the Act provides that
the Commission may exempt any
person, security, or transaction from any
provision of the Act, or from any rule
under the Act, if such exemption is
necessary or appropriate in the public
interest and consistent with the
protection of investors and the purposes
fairly intended by the policies and
provisions of the Act.
5. Applicants state that the proposed
arrangement would comply with the
provisions of rule 12d1–2 under the Act,
but for the fact that the Funds of Funds
may invest a portion of their assets in
Other Investments. Applicants request
an order under section 6(c) of the Act
for an exemption from rule 12d1–2(a) to
allow the Funds of Funds to invest in
Other Investments. Applicants assert
that permitting the Funds of Funds to
invest in Other Investments as described
in the application would not raise any
of the concerns that the requirements of
section 12(d)(1) were designed to
address.
Applicants’ Condition
Applicants agree that the order
granting the requested relief will be
subject to the following condition:
Applicants will comply with all
provisions of rule 12d1–2 under the Act,
except for paragraph (a)(2) to the extent
that it restricts any Fund of Funds from
investing in Other Investments as
described in the application.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–13822 Filed 6–8–10; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–62196; File No. SR–Phlx–
2010–73]
Self-Regulatory Organizations;
NASDAQ OMX PHLX, Inc.; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change Relating to
Rebates for Adding and Fees for
Removing Liquidity
June 1, 2010.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
PO 00000
Frm 00092
Fmt 4703
Sfmt 4703
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on May 20,
2010, 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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
Exchange’s Fee Schedule to increase the
number of options to be included in the
Exchange’s current rebates for adding,
and fees for removing, liquidity. In
addition, the Exchange proposes to
clarify its rebates for adding and fees for
removing liquidity, specifically the
applicability of fees to electronic
auctions.
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 June
1, 2010.
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.
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 [sic] The Exchange proposes
to increase liquidity and to attract order
1 15
2 17
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
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Federal Register / Vol. 75, No. 110 / Wednesday, June 9, 2010 / Notices
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flow by increasing the number of
options to be included in the Exchange’s
current rebates for adding and fees for
removing liquidity.
Specifically, the Exchange proposes to
add the following twenty-five options:
Ambac Financial Group, Inc. (‘‘ABK’’),
Barrick Gold Corporation (‘‘ABX’’),
Ariad Pharmaceuticals, Inc. (‘‘ARIA’’),
American Express Company (‘‘AXP’’),
Ciena Corp. (‘‘CIEN’’), Star Scientific,
Inc. (‘‘CIGX’’), Dendreon Corp.
(‘‘DNDN’’), eBay Inc. (‘‘EBAY’’), Corning
Inc. (‘‘GLW’’), Halliburton Company
(‘‘HAL’’), iShares Dow Jones US Real
Estate (‘‘IYR’’), Motorola, Inc., (‘‘MOT’’),
NVIDIA Corporation (‘‘NVDA’’), ON
Semiconductor Corp. (‘‘ONNN’’), Oracle
Corp. (‘‘ORCL’’), ProShares UltraShort,
QQQ (‘‘QID’’), Transocean Ltd. (‘‘RIG’’),
Rambus, Inc. (‘‘RMBS’’), ProShares
UltraShort S&P500 (‘‘SDS’’), ProShares
UltraShort 20+ Year Treasury (‘‘TBT’’),
Visa, Inc. (‘‘V’’), Vale S.A. (‘‘VALE’’),
SPDR S&P Homebuilders (‘‘XHB’’),
Xerox Corp. (‘‘XRX’’), Yahoo! Inc.
(‘‘YHOO’’) collectively (‘‘the options’’).
The options would be subject to the
rebates for adding and fees for removing
liquidity.
The Exchange currently assesses a
per-contract transaction charge in
various select symbols 3 (the ‘‘select
Symbols’’) on six different categories of
market participants that submit orders
and/or quotes that ‘‘take,’’ liquidity from
the Exchange: (i) Specialists, Registered
Options Traders (‘‘ROTs’’),4 Streaming
Quote Traders (‘‘SQTs’’) 5 and Remote
Streaming Quote Traders (‘‘RSQTs’’); 6
(ii) customers; 7 (iii) specialists, SQTs
and RSQTs that receive Directed Orders
3 The fees and rebates for adding and removing
liquidity are applicable to executions in options
overlying AA, AAPL, AIG, ALL, AMD, AMR,
AMZN, BAC, BRCD, C, CAT, CSCO, DELL, DIA,
DRYS, EK, F, FAS, FAZ, GDX, GE, GLD, GS, IBM,
INTC, IWM, JPM, LVS, MGM, MSFT, MU, NEM,
NOK, PALM, PFE, POT, QCOM, QQQQ, RIMM,
SBUX, SIRI, SKF, SLV, SMH, SNDK, SPY, T, TZA,
UAUA, UNG, USO, UYG, VZ, WYNN, X and XLF
(‘‘Symbols’’).
4 A ROT includes a SQT, a RSQT and a Non-SQT,
which by definition is neither a SQT or a RSQT.
See Exchange Rule 1014 (b)(i) and (ii).
5 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).
6 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).
7 This applies to all customer orders, directed and
non-directed.
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(‘‘Directed Participants’’ 8 or ‘‘Directed
Specialists, RSQTs, or SQTs’’ 9); (iv)
Firms; (v) broker-dealers; and (vi)
Professionals.10 The current percontract transaction charge depends on
the category of market participant
submit orders and/or quotes that ‘‘take,’’
liquidity from the Exchange.
The Exchange also currently assesses
a per-contract rebate of transaction
charges for orders or quotations that add
liquidity in the select Symbols. The
amount of the rebate depends on the
category of participant whose order or
quote was executed as part of the Phlx
Best Bid and Offer. The Exchange
proposes to add the twenty-five
additional options to the list of select
Symbols applicable to the rebates for
adding and fees for removing liquidity.
The Exchange also proposes to clarify
its rebates for adding and fees for
removing liquidity, specifically the
applicability of fees to electronic
auctions. Currently, the Exchange
describes the applicability of rebates for
adding liquidity and fees for removing
liquidity, in an electronic auction, as
follows: ‘‘Customer, Professional,
Directed Participant and Specialist,
ROT, SQT and RSQT fees for removing
liquidity will not apply to transactions
resulting from electronic auctions.
Electronic auctions include, without
limitation, the Complex Order Live
Auction (‘‘COLA’’), and Quote and
Market Exhaust auctions. Firm and
Broker-Dealer fees for removing
liquidity will, however apply to
transactions resulting from electronic
auctions.’’ The Exchange proposes to
make clear that a Specialist, ROT,
including an SQT and RSQT, would not
receive a rebate for adding liquidity in
an electronic auction.11 The Exchange
proposes to add language to the Fee
Schedule to clarify the applicability of
rebates for adding liquidity in an
electronic auction.
8 For purposes of the fees and rebates related to
adding and removing liquidity, 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 PHLX XL II.
9 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.
10 The Exchange defines a ‘‘professional’’ as any
person or entity that (i) is not a broker or dealer in
securities, and (ii) places more than 390 orders in
listed options per day on average during a calendar
month for its own beneficial account(s) (hereinafter
‘‘Professional’’). See Exchange Rule 1000(b)(14).
11 The Exchange is unable to calculate the rebates
for Specialists, ROTs, including SQTs and RSQTs,
in an electronic auction.
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32827
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 June
1, 2010.
2. Statutory Basis
The Exchange believes that its
proposal to amend its Fee Schedule is
consistent with Section 6(b) of the Act 12
in general, and furthers the objectives of
Section 6(b)(4) of the Act 13 in
particular, in that it is an equitable
allocation of reasonable fees and other
charges among Exchange members. The
Exchange believes that the addition of
the options to the rebates for adding and
fees for removing liquidity is reasonable
and equitable in that it will apply to all
categories of participants in the same
manner. The fees which are currently
applicable to each market participant
will continue to apply to the select
Symbols.
The Exchange believes that clarifying
the applicability of the rebates for
adding liquidity in an electronic auction
is reasonable because it clearly states
when the rebate is applicable to certain
transactions. The Exchange also believes
that the clarification is equitable
because it makes clear what fees will be
assessed to Specialists, ROTs, including
SQTs and RSQTs, in an electronic
auction. Currently, Specialists, ROTs,
including SQTs and RSQTs, do not
receive rebates for adding liquidity in an
electronic auction. The Exchange’s
proposal would add language to the Fee
Schedule to state that with respect to
electronic auctions, Specialists and
ROTs would not receive a rebate, which
language is consistent with the
Exchange’s current practice.
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
12 15
13 15
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U.S.C. 78f(b).
U.S.C. 78f(b)(4).
09JNN1
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Federal Register / Vol. 75, No. 110 / Wednesday, June 9, 2010 / Notices
19(b)(3)(A)(ii) of the Act 14 and
paragraph (f)(2) of Rule 19b–4 15
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:
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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–2010–73 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–2010–73. 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 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
14 15
15 17
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
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15:10 Jun 08, 2010
Jkt 220001
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–
2010–73 and should be submitted on or
before June 30, 2010.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2010–13827 Filed 6–8–10; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–62213; File No. SR–
NYSEArca–2010–22]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Order Granting Approval of
Proposed Rule Change Relating to
Listing of the Teucrium Corn Fund
June 3, 2010.
I. Introduction
On March 31, 2010, NYSE Arca, Inc.
(‘‘Exchange’’ or ‘‘NYSE Arca’’) 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 list and trade shares of the
Teucrium Corn Fund under NYSE Arca
Equities Rule 8.200. The proposed rule
change was published for comment in
the Federal Register on April 29, 2010.3
The Commission received no comments
on the proposal. This order grants
approval of the proposed rule change.
II. Description of the Proposal
The Exchange proposes to list and
trade shares (‘‘Shares’’) of the Teucrium
Corn Fund (‘‘Fund’’) pursuant to NYSE
Arca Equities Rule 8.200. NYSE Arca
Equities Rule 8.200, Commentary .02,
permits the trading of Trust Issued
Receipts either by listing or pursuant to
unlisted trading privileges.4
16 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 61954
(April 21, 2010), 75 FR 22663 (‘‘Notice’’).
4 Commentary .02 to NYSE Arca Equities Rule
8.200 applies to Trust Issued Receipts that invest
in ‘‘Financial Instruments.’’ The term ‘‘Financial
Instruments,’’ as defined in Commentary .02(b)(4) to
NYSE Arca Equities Rule 8.200, means any
combination of investments, including cash;
securities; options on securities and indices; futures
contracts; options on futures contracts; forward
1 15
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The Shares represent beneficial
ownership interests in the Fund, which
is a commodity pool that is a series of
the Teucrium Commodity Trust
(‘‘Trust’’), a Delaware statutory trust.5
The Fund is managed and controlled by
Teucrium Trading, LLC (‘‘Sponsor’’).
The Sponsor is a Delaware limited
liability company that is registered as a
commodity pool operator with the
Commodity Futures Trading
Commission (‘‘CFTC’’) and is a member
of the National Futures Association.
The investment objective of the Fund
is to have the daily changes in
percentage terms of the Fund’s net asset
value (‘‘NAV’’) per Share reflect the
daily changes in percentage terms of a
weighted average of the closing
settlement prices for three futures
contracts for corn (‘‘Corn Futures
Contracts’’) that are traded on the
Chicago Board of Trade (‘‘CBOT’’): (1)
The second-to-expire CBOT Corn
Futures Contract, weighted 35%; (2) the
third-to-expire CBOT Corn Futures
Contract, weighted 30%; and (3) the
CBOT Corn Futures Contract expiring in
the December following the expiration
month of the third-to-expire contract,
weighted 35%, less the Fund’s
expenses. This weighted average of the
three referenced Corn Futures Contracts
is referred to herein as the ‘‘Benchmark,’’
and the three Corn Futures Contracts
that at any given time make up the
Benchmark are referred to herein as the
‘‘Benchmark Component Futures
Contracts.’’ 6
The Fund seeks to achieve its
investment objective by investing under
normal market conditions in Benchmark
Component Futures Contracts or, in
certain circumstances, in other Corn
Futures Contracts traded on CBOT or on
foreign exchanges.7 In addition, and to
contracts; equity caps, collars and floors; and swap
agreements.
5 See Amendment No. 3 to the Registration
Statement on Form S–1 for the Trust, dated March
29, 2010 (File No. 333–162033) (‘‘Registration
Statement’’).
6 Corn Futures Contracts traded on CBOT expire
on a specified day in five different months: March,
May, July, September, and December. In terms of
the Benchmark, in June of a given year, the nextto-expire or ‘‘spot month’’ Corn Futures Contract
will expire in July of that year, and the Benchmark
Component Futures Contracts will be the contracts
expiring in September of that year (the second-toexpire contract), December of that year (the thirdto-expire contract), and December of the following
year. In November of a given year, the Benchmark
Component Futures Contracts will be the contracts
expiring in March, May, and December of the
following year.
7 Corn futures volume on CBOT for 2008 and
2009 (through November 30, 2009) was 59,934,739
contracts and 47,754,866 contracts, respectively. As
of March 16, 2010, CBOT open interest for corn
futures was 1,118,103 contracts, and open interest
for near-month futures was 447,554 contracts. The
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]]>Agencies
[Federal Register Volume 75, Number 110 (Wednesday, June 9, 2010)]
[Notices]
[Pages 32826-32828]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-13827]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62196; File No. SR-Phlx-2010-73]
Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change Relating
to Rebates for Adding and Fees for Removing Liquidity
June 1, 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 May 20, 2010, 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 amend the Exchange's Fee Schedule to
increase the number of options to be included in the Exchange's current
rebates for adding, and fees for removing, liquidity. In addition, the
Exchange proposes to clarify its rebates for adding and fees for
removing liquidity, specifically the applicability of fees to
electronic auctions.
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 June 1, 2010.
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.
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 [sic] The Exchange
proposes to increase liquidity and to attract order
[[Page 32827]]
flow by increasing the number of options to be included in the
Exchange's current rebates for adding and fees for removing liquidity.
Specifically, the Exchange proposes to add the following twenty-
five options: Ambac Financial Group, Inc. (``ABK''), Barrick Gold
Corporation (``ABX''), Ariad Pharmaceuticals, Inc. (``ARIA''), American
Express Company (``AXP''), Ciena Corp. (``CIEN''), Star Scientific,
Inc. (``CIGX''), Dendreon Corp. (``DNDN''), eBay Inc. (``EBAY''),
Corning Inc. (``GLW''), Halliburton Company (``HAL''), iShares Dow
Jones US Real Estate (``IYR''), Motorola, Inc., (``MOT''), NVIDIA
Corporation (``NVDA''), ON Semiconductor Corp. (``ONNN''), Oracle Corp.
(``ORCL''), ProShares UltraShort, QQQ (``QID''), Transocean Ltd.
(``RIG''), Rambus, Inc. (``RMBS''), ProShares UltraShort S&P500
(``SDS''), ProShares UltraShort 20+ Year Treasury (``TBT''), Visa, Inc.
(``V''), Vale S.A. (``VALE''), SPDR S&P Homebuilders (``XHB''), Xerox
Corp. (``XRX''), Yahoo! Inc. (``YHOO'') collectively (``the options'').
The options would be subject to the rebates for adding and fees for
removing liquidity.
The Exchange currently assesses a per-contract transaction charge
in various select symbols \3\ (the ``select Symbols'') on six different
categories of market participants that submit orders and/or quotes that
``take,'' liquidity from the Exchange: (i) Specialists, Registered
Options Traders (``ROTs''),\4\ Streaming Quote Traders (``SQTs'') \5\
and Remote Streaming Quote Traders (``RSQTs''); \6\ (ii) customers; \7\
(iii) specialists, SQTs and RSQTs that receive Directed Orders
(``Directed Participants'' \8\ or ``Directed Specialists, RSQTs, or
SQTs'' \9\); (iv) Firms; (v) broker-dealers; and (vi)
Professionals.\10\ The current per-contract transaction charge depends
on the category of market participant submit orders and/or quotes that
``take,'' liquidity from the Exchange.
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\3\ The fees and rebates for adding and removing liquidity are
applicable to executions in options overlying AA, AAPL, AIG, ALL,
AMD, AMR, AMZN, BAC, BRCD, C, CAT, CSCO, DELL, DIA, DRYS, EK, F,
FAS, FAZ, GDX, GE, GLD, GS, IBM, INTC, IWM, JPM, LVS, MGM, MSFT, MU,
NEM, NOK, PALM, PFE, POT, QCOM, QQQQ, RIMM, SBUX, SIRI, SKF, SLV,
SMH, SNDK, SPY, T, TZA, UAUA, UNG, USO, UYG, VZ, WYNN, X and XLF
(``Symbols'').
\4\ A ROT includes a SQT, a RSQT and a Non-SQT, which by
definition is neither a SQT or a RSQT. See Exchange Rule 1014 (b)(i)
and (ii).
\5\ 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).
\6\ 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).
\7\ This applies to all customer orders, directed and non-
directed.
\8\ For purposes of the fees and rebates related to adding and
removing liquidity, 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 PHLX XL II.
\9\ 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.
\10\ The Exchange defines a ``professional'' as any person or
entity that (i) is not a broker or dealer in securities, and (ii)
places more than 390 orders in listed options per day on average
during a calendar month for its own beneficial account(s)
(hereinafter ``Professional''). See Exchange Rule 1000(b)(14).
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The Exchange also currently assesses a per-contract rebate of
transaction charges for orders or quotations that add liquidity in the
select Symbols. The amount of the rebate depends on the category of
participant whose order or quote was executed as part of the Phlx Best
Bid and Offer. The Exchange proposes to add the twenty-five additional
options to the list of select Symbols applicable to the rebates for
adding and fees for removing liquidity.
The Exchange also proposes to clarify its rebates for adding and
fees for removing liquidity, specifically the applicability of fees to
electronic auctions. Currently, the Exchange describes the
applicability of rebates for adding liquidity and fees for removing
liquidity, in an electronic auction, as follows: ``Customer,
Professional, Directed Participant and Specialist, ROT, SQT and RSQT
fees for removing liquidity will not apply to transactions resulting
from electronic auctions. Electronic auctions include, without
limitation, the Complex Order Live Auction (``COLA''), and Quote and
Market Exhaust auctions. Firm and Broker-Dealer fees for removing
liquidity will, however apply to transactions resulting from electronic
auctions.'' The Exchange proposes to make clear that a Specialist, ROT,
including an SQT and RSQT, would not receive a rebate for adding
liquidity in an electronic auction.\11\ The Exchange proposes to add
language to the Fee Schedule to clarify the applicability of rebates
for adding liquidity in an electronic auction.
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\11\ The Exchange is unable to calculate the rebates for
Specialists, ROTs, including SQTs and RSQTs, in an electronic
auction.
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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 June 1, 2010.
2. Statutory Basis
The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \12\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \13\ in
particular, in that it is an equitable allocation of reasonable fees
and other charges among Exchange members. The Exchange believes that
the addition of the options to the rebates for adding and fees for
removing liquidity is reasonable and equitable in that it will apply to
all categories of participants in the same manner. The fees which are
currently applicable to each market participant will continue to apply
to the select Symbols.
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\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that clarifying the applicability of the
rebates for adding liquidity in an electronic auction is reasonable
because it clearly states when the rebate is applicable to certain
transactions. The Exchange also believes that the clarification is
equitable because it makes clear what fees will be assessed to
Specialists, ROTs, including SQTs and RSQTs, in an electronic auction.
Currently, Specialists, ROTs, including SQTs and RSQTs, do not receive
rebates for adding liquidity in an electronic auction. The Exchange's
proposal would add language to the Fee Schedule to state that with
respect to electronic auctions, Specialists and ROTs would not receive
a rebate, which language is consistent with the Exchange's current
practice.
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
[[Page 32828]]
19(b)(3)(A)(ii) of the Act \14\ and paragraph (f)(2) of Rule 19b-4 \15\
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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\14\ 15 U.S.C. 78s(b)(3)(A)(ii).
\15\ 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 Number SR-Phlx-2010-73 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-2010-73. 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 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-2010-73 and should be
submitted on or before June 30, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2010-13827 Filed 6-8-10; 8:45 am]
BILLING CODE 8010-01-P
