Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Order Approving a Proposed Rule Change Relating to Pricing for Direct Circuit Connections, 48391 [2010-19650]

Download as PDF Federal Register / Vol. 75, No. 153 / Tuesday, August 10, 2010 / Notices proposed rule change (SR–BX–2010– 043) be, and hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.9 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–19649 Filed 8–9–10; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–62639; File No. SR–Phlx– 2010–89] Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Order Approving a Proposed Rule Change Relating to Pricing for Direct Circuit Connections August 4, 2010. On June 24, 2010, NASDAQ OMX PHLX, Inc. (‘‘Phlx’’ or the ‘‘Exchange’’) 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 establish pricing for 10Gb direct circuit connections and codify pricing for 10Gb direct circuit connections for customers who are not co-located in Phlx’s datacenter. The proposed rule change was published for comment in the Federal Register on July 2, 2010.3 The Commission received no comment letters on the proposal. This order approves the proposed rule change. In its proposal, Phlx proposed to establish fees for direct 10Gb circuit connections, and codify fees for direct circuit connections capable of supporting up to 1Gb, for customers who are not co-located at the Exchange’s datacenter. Phlx represented that it already makes available to co-located customers a 10Gb circuit connection and charges for each a $1,000 initial installation charge as well as an ongoing monthly fee of $5,000. The Exchange proposed to establish the same fees for non-co-located customers with a 10Gb circuit connection.4 Phlx represented that it also already makes available to both co-located and 9 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. 62394 (July 2, 2010), 75 FR 38583 (‘‘Notice’’). 4 According to the Exchange, Phlx provides an additional 1Gb copper connection option for colocated customers. Phlx represented that, given the technological constraints of copper connections over longer distances, it does not offer a copper connection option to users outside of its datacenter. sroberts on DSKB9S0YB1PROD with NOTICES 1 15 VerDate Mar<15>2010 16:26 Aug 09, 2010 Jkt 220001 non-co-located customers direct connections capable of supporting up to 1Gb, with per connection monthly fees of $500 for co-located customers and $1000 for non co-located customers. According to the Exchange, monthly fees are higher for non-co-located customers because direct connections require Phlx to provide cabinet space and middleware for those customers’ third-party vendors to connect into the datacenter and, ultimately, to the trading system. Finally, the Exchange represented that for non-co-located customers, it charges an optional installation fee of $925 if the customer chooses to use an on-site router. After careful review, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.5 In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(4) of the Act,6 which requires that the rules of a national securities exchange provide for the equitable allocation of reasonable dues, fees and other charges among its members and issuers and other persons using its facilities, and with Section 6(b)(5) of the Act,7 which requires, among other things, that the rules of a national securities exchange be designed to promote just and equitable principles of trade, to 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, and not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. The Commission believes that the proposed fees for 10Gb and 1Gb direct circuit connections are reasonable and equitably allocated insofar as they are applied on the same terms to similarlysituated market participants. In addition, the Commission believes that the connectivity options described in the proposed rule change are not unfairly discriminatory because Phlx makes the 10Gb and 1Gb direct circuit connections uniformly available to all non-co-located customers who voluntarily request them and pay the fees as detailed in the proposal. As represented by Phlx, these fees are uniform for all such customers and are either the same as fees charged to colocated customers, or vary due to 5 In approving this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 6 15 U.S.C. 78f(b)(4). 7 15 U.S.C. 78f(b)(5). PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 48391 different costs incurred by Phlx associated with providing service to the two different customer types. Finally, the Commission believes that the proposal will further the protection of investors and the public interest because it will provide greater transparency regarding the connectivity options available to market participants. It is therefore ordered, pursuant to Section 19(b)(2) of the Act,8 that the proposed rule change (SR–Phlx–2010– 89) be, and hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.9 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–19650 Filed 8–9–10; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–62631; File No. SR–Phlx– 2010–102] Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Routing Fees August 3, 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 July 21, 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 its fees governing pricing for Exchange members using the Phlx XL II system,3 for routing standardized equity and index option customer and professional orders to away markets for execution. 8 15 U.S.C. 78s(b)(2). CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 For a complete description of Phlx XL II, see Securities Exchange Act Release No. 59995 (May 28, 2009), 74 FR 26750 (June 3, 2009) (SR–Phlx– 2009–32). The instant proposed fees will apply only to option orders entered into, and routed by, the Phlx XL II system. 9 17 E:\FR\FM\10AUN1.SGM 10AUN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 75, Number 153 (Tuesday, August 10, 2010)]
[Notices]
[Page 48391]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-19650]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62639; File No. SR-Phlx-2010-89]


Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Order 
Approving a Proposed Rule Change Relating to Pricing for Direct Circuit 
Connections

August 4, 2010.
    On June 24, 2010, NASDAQ OMX PHLX, Inc. (``Phlx'' or the 
``Exchange'') 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 establish pricing for 10Gb direct circuit 
connections and codify pricing for 10Gb direct circuit connections for 
customers who are not co-located in Phlx's datacenter. The proposed 
rule change was published for comment in the Federal Register on July 
2, 2010.\3\ The Commission received no comment letters on the proposal. 
This order approves the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 62394 (July 2, 
2010), 75 FR 38583 (``Notice'').
---------------------------------------------------------------------------

    In its proposal, Phlx proposed to establish fees for direct 10Gb 
circuit connections, and codify fees for direct circuit connections 
capable of supporting up to 1Gb, for customers who are not co-located 
at the Exchange's datacenter. Phlx represented that it already makes 
available to co-located customers a 10Gb circuit connection and charges 
for each a $1,000 initial installation charge as well as an ongoing 
monthly fee of $5,000. The Exchange proposed to establish the same fees 
for non-co-located customers with a 10Gb circuit connection.\4\
---------------------------------------------------------------------------

    \4\ According to the Exchange, Phlx provides an additional 1Gb 
copper connection option for co-located customers. Phlx represented 
that, given the technological constraints of copper connections over 
longer distances, it does not offer a copper connection option to 
users outside of its datacenter.
---------------------------------------------------------------------------

    Phlx represented that it also already makes available to both co-
located and non-co-located customers direct connections capable of 
supporting up to 1Gb, with per connection monthly fees of $500 for co-
located customers and $1000 for non co-located customers. According to 
the Exchange, monthly fees are higher for non-co-located customers 
because direct connections require Phlx to provide cabinet space and 
middleware for those customers' third-party vendors to connect into the 
datacenter and, ultimately, to the trading system. Finally, the 
Exchange represented that for non-co-located customers, it charges an 
optional installation fee of $925 if the customer chooses to use an on-
site router.
    After careful review, the Commission finds that the proposed rule 
change is consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national securities exchange.\5\ 
In particular, the Commission finds that the proposed rule change is 
consistent with Section 6(b)(4) of the Act,\6\ which requires that the 
rules of a national securities exchange provide for the equitable 
allocation of reasonable dues, fees and other charges among its members 
and issuers and other persons using its facilities, and with Section 
6(b)(5) of the Act,\7\ which requires, among other things, that the 
rules of a national securities exchange be designed to promote just and 
equitable principles of trade, to 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, and not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
---------------------------------------------------------------------------

    \5\ In approving this proposal, the Commission has considered 
the proposed rule's impact on efficiency, competition, and capital 
formation. See 15 U.S.C. 78c(f).
    \6\ 15 U.S.C. 78f(b)(4).
    \7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission believes that the proposed fees for 10Gb and 1Gb 
direct circuit connections are reasonable and equitably allocated 
insofar as they are applied on the same terms to similarly-situated 
market participants. In addition, the Commission believes that the 
connectivity options described in the proposed rule change are not 
unfairly discriminatory because Phlx makes the 10Gb and 1Gb direct 
circuit connections uniformly available to all non-co-located customers 
who voluntarily request them and pay the fees as detailed in the 
proposal. As represented by Phlx, these fees are uniform for all such 
customers and are either the same as fees charged to co-located 
customers, or vary due to different costs incurred by Phlx associated 
with providing service to the two different customer types. Finally, 
the Commission believes that the proposal will further the protection 
of investors and the public interest because it will provide greater 
transparency regarding the connectivity options available to market 
participants.
    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\8\ that the proposed rule change (SR-Phlx-2010-89) be, and hereby 
is, approved.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(2).
    \9\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-19650 Filed 8-9-10; 8:45 am]
BILLING CODE 8010-01-P

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