Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Order Entry Port Fee, 5848-5850 [2011-2227]
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5848
Federal Register / Vol. 76, No. 22 / Wednesday, February 2, 2011 / Notices
options transaction charges are waived
for members executing facilitation
orders 15 pursuant to Exchange Rule
1064 when such members are trading in
their own proprietary account.16
Additionally, dividend, merger and
short stock interest strategies are capped
at $25,000 per member organization per
month when such members are trading
in their own proprietary accounts.17
The Exchange operates in a highly
competitive market in which
sophisticated and knowledgeable
market participants can readily send
orders to buy and sell options to
competing venues if they deem fee
levels at a particular venue to be
excessive. The Exchange believes that
the proposed modification to the Firm
Related Equity Option Cap is necessary
to remain competitive with fees charged
by other venues and therefore continues
to be reasonable and equitably allocated
to those member organizations that opt
to direct orders to the Exchange rather
than competing venues.
The Exchange believes that its
proposal to expand the applicability of
the Cap for Active SQF Port Fees is both
reasonable and equitable because it
would allow members additional time
to transition from SQF 5.0 to SQF 6.0.
The Exchange believes that its various
proposals to amend the text of the Fee
Schedule to clarify the applicability of
certain fees, amend typographical errors
and remove irrelevant text is both
reasonable and equitable because
members would benefit from clear
guidance in the rule text describing the
manner in which the Exchange would
assess fees.
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.
srobinson on DSKHWCL6B1PROD with NOTICES
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.
15 A facilitation occurs when a floor broker holds
an options order for a public customer and a contraside order for the same option series and, after
providing an opportunity for all persons in the
trading crowd to participate in the transaction,
executes both orders as a facilitation cross. See
Exchange Rule 1064.
16 See Securities Exchange Act Release No. 60477
(August 11, 2009), 74 FR 41777 (August 18, 2009)
(SR–Phlx–2009–67).
17 See Securities Exchange Act Release Nos.
61115 (December 4, 2009), 74 FR 65571 (December
10, 2009) (SR–Phlx–2009–97) and 63712 (January
12, 2011) (SR–Phlx–2011–01).
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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.18 At any time
within 60 days of the filing of the
proposed rule change, the Commission
summarily may temporarily suspend
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. If the Commission
takes such action, the Commission shall
institute proceedings to determine
whether the proposed rule should be
approved or disapproved.
printing in the Commission’s Public
Reference Room. Copies of the 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–
2011–07 and should be submitted on or
before February 23, 2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011–2226 Filed 2–1–11; 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–2011–07 on the
subject line.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63781; File No. SR–Phlx–
2011–09]
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to the
Order Entry Port Fee
January 26, 2011.
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 January
21, 2011, NASDAQ OMX PHLX LLC
• Send paper comments in triplicate
(‘‘Phlx’’ or ‘‘Exchange’’) filed with the
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission
Securities and Exchange Commission,
(‘‘SEC’’ or ‘‘Commission’’) the proposed
100 F Street, NE., Washington, DC
rule change as described in Items I, II,
20549–1090.
and III, below, which Items have been
All submissions should refer to File
prepared by the Exchange. The
Number SR–Phlx–2011–07. This file
Commission is publishing this notice to
number should be included on the
solicit comments on the proposed rule
subject line if e-mail is used. To help the
change from interested persons.
Commission process and review your
I. Self-Regulatory Organization’s
comments more efficiently, please use
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 amend the
rules/sro.shtml). Copies of the
applicability of the Order Entry Port
submission, all subsequent
Fee.3 The text of the proposed rule
amendments, all written statements
change is available on the Exchange’s
with respect to the proposed rule
Web site at https://nasdaqtrader.com/
change that are filed with the
micro.aspx?id=PHLXfilings, at the
Commission, and all written
principal office of the Exchange, and at
communications relating to the
proposed rule change between the
19 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
Commission and any person, other than
2 17 CFR 240.19b-4.
those that may be withheld from the
3 The Order Entry Port Fee is a connectivity fee
public in accordance with the
assessed on members in connection with routing
provisions of 5 U.S.C. 552, will be
orders to the Exchange via an external order entry
available for Web site viewing and
port. Members access the Exchange’s network
18 15
PO 00000
U.S.C. 78s(b)(3)(A)(ii).
Frm 00071
Fmt 4703
Sfmt 4703
through order entry ports. A member organization
may have more than one order entry port.
E:\FR\FM\02FEN1.SGM
02FEN1
Federal Register / Vol. 76, No. 22 / Wednesday, February 2, 2011 / Notices
the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
srobinson on DSKHWCL6B1PROD with NOTICES
1. Purpose
The purpose of the proposed rule
change is to amend the applicability of
the Order Entry Port Fee. The Exchange
currently assesses an Order Entry Port
Fee per month per mnemonic 4 of $500.
This fee is assessed on members
regardless of whether the order entry
mnemonic is active 5 during the billing
month. The fee is assessed regardless of
usage, and solely on the number of
order entry ports assigned to each
member organization.
The Exchange is proposing to modify
the manner in which members are
assessed the Order Entry Port Fee as
related to complex order.6 The
Exchange proposes to waive the $500
per month per mnemonic Order Entry
Port Fee for mnemonics used
exclusively for complex orders where
one of the components of the complex
order is the underlying security.7
4 Order entry mnemonics are codes that identify
member organization order entry ports.
5 An order entry mnemonic is considered active
if a member organization sends at least one order
to the Exchange using that order entry mnemonic
during the applicable billing month. See Securities
Exchange Act Release No. 58728 (October 3, 2008),
73 FR 59695 (October 9, 2008) (SR–Phlx–2008–70).
6 A complex order is a spread, straddle,
combination, ratio or collar order, all of which
consist of more than one component, priced like a
single order at a net debit or credit based on the
prices of the individual components. See Exchange
Rule 1080, Commentary .08(a)(i).
7 The Exchange recently filed a proposed rule
change to add complex orders where one
component is the underlying stock or ETF to the
functionality on its electronic trading platform for
options, Phlx XL. The Exchange also amended its
definition of complex orders in Exchange Rule 1080
as follows: Complex Orders is any order involving
the simultaneous purchase and/or sale of two or
more different options series in the same
underlying security, priced at a net debit or credit
based on the relative prices of the individual
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The Exchange believes that members
who transact complex orders may
require an increased number of ports
due to the member’s stock clearance
arrangements, which may require
additional mnemonics. The Exchange is
proposing to limit the fees that would be
assessed on members requiring
additional ports to transact stock-option
orders.8
2. Statutory Basis
The Exchange believes that its
proposal to amend its Fee Schedule is
consistent with Section 6(b) of the Act 9
in general, and furthers the objectives of
Section 6(b)(4) of the Act 10 in
particular, in that it is an equitable
allocation of reasonable fees and other
charges among Exchange members and
other persons using its facilities. The
Exchange believes that the proposal is
equitable and reasonable because all
members would be able to limit fees
related to order entry ports for such
complex orders that are stock-option
orders, which may require additional
mnemonics.
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.11 At any time
within 60 days of the filing of the
proposed rule change, the Commission
summarily may temporarily suspend
such rule change if it appears to the
components, for the same account, for the purpose
of executing a particular investment strategy.
Furthermore, a Complex Order can also be a stockoption order, which is an order to buy or sell a
stated number of units of an underlying stock or
ETF coupled with the purchase or sale of options
contract(s). The Exchange also proposed to permit
complex orders consisting of up to six components.
See Securities Exchange Act Release No. 63509
(December 9, 2010), 76 FR 2733 (January 14, 2011)
(SR–Phlx–2010–157) [sic].
8 A complex order with one component that is the
underlying stock or Exchange Traded Fund Share
(‘‘ETF’’) is also referred to as a stock-option order.
9 15 U.S.C. 78f(b).
10 15 U.S.C. 78f(b)(4).
11 15 U.S.C. 78s(b)(3)(A)(ii).
PO 00000
Frm 00072
Fmt 4703
Sfmt 4703
5849
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. If the Commission
takes such action, the Commission shall
institute proceedings to determine
whether the proposed rule should be
approved or disapproved.
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
Number SR–Phlx–2011–09 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–2011–09. 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. Copies of the 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–
E:\FR\FM\02FEN1.SGM
02FEN1
5850
Federal Register / Vol. 76, No. 22 / Wednesday, February 2, 2011 / Notices
2011–09 and should be submitted on or
before February 23, 2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011–2227 Filed 2–1–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63784; File No. SR–FINRA–
2010–052]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Order Approving a
Proposed Rule Change Adopting
FINRA Rules Regarding Books and
Records in the Consolidated FINRA
Rulebook
January 27, 2011.
I. Introduction
On October 20, 2010, the Financial
Industry Regulatory Authority, Inc.
(‘‘FINRA’’) filed with the Securities and
Exchange Commission (‘‘SEC’’ or
‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Exchange Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change adopting FINRA rules regarding
books and records in the consolidated
FINRA Rulebook. The proposed rule
change was published for comment in
the Federal Register on November 1,
2010.3 The Commission received three
comments on the proposed rule
change.4 On January 13, 2011, FINRA
responded to the comments.5 This order
approves the proposed rule change.
12 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. 63181
(October 26, 2010), 75 FR 67155 (November 1,
2010).
4 See Letter from Holly H. Smith and Susan S.
Krawczyk, Sutherland Asbill & Brennan LLP, for
the Committee of Annuity Insurers, to Elizabeth M.
Murphy, Secretary, SEC, dated November 22, 2010
(‘‘CAI’’); Letter from William A. Jacobson, Associate
Clinical Professor of Law and Director, the Cornell
Securities Law Clinic, Cornell University Law
School, to Elizabeth M. Murphy, Secretary, SEC,
dated November 22, 2010 (‘‘Cornell’’); and Letter
from Melissa MacGregor, Managing Director and
Associate General Counsel, the Securities Industry
and Financial Markets Association, to Elizabeth M.
Murphy, Secretary, SEC, dated November 23, 2010
(‘‘SIFMA’’). (Available at https://www.sec.gov/
comments/sr-finra-2010–052/finra2010052.shtml).
5 See Letter from Afshin Atabaki, FINRA, to
Elizabeth M. Murphy, Secretary, SEC, dated January
13, 2011 (‘‘Response to Comments’’).
srobinson on DSKHWCL6B1PROD with NOTICES
1 15
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16:00 Feb 01, 2011
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II. Description of Proposed Rule Change
A. Background
FINRA is proposing to adopt certain
paragraphs, as specified below, of NASD
Rule 3110 (Books and Records), subject
to certain amendments, as FINRA Rules
in the consolidated FINRA rulebook and
to adopt Incorporated NYSE Rule
Interpretations 410/01 (Pre-Time
Stamping) and 410/02 (Allocations of
Block Orders), subject to certain
amendments, as FINRA Rules in the
consolidated FINRA rulebook.
The proposed rule change would
delete NASD IM–3110 (Customer
Account Information) and Incorporated
NYSE Rule 410 (Records of Orders). In
addition, the proposed rule change
would delete Incorporated NYSE Rule
440 (Books and Records), with the
exception of Incorporated NYSE Rules
440.10 (Periodic Security Counts,
Verifications, Comparisons, etc.) and
440.20 (Identification of Suspense
Accounts and Assignment of
Responsibility for General Ledger
Accounts) and NYSE Rule Interpretation
440.20/01 (Suspense Accounts).
The proposed rule change would
renumber NASD Rule 3110(a)
(Requirements) as FINRA Rule 4511
(General Requirements), NASD Rule
3110(c) (Customer Account Information)
as FINRA Rule 4512 (Customer Account
Information), NASD Rules 3110(d)
(Record of Written Complaints) and
3110(e) (‘‘Complaint’’ Defined) as FINRA
Rule 4513 (Records of Written Customer
Complaints), NASD Rule 3110(f)
(Requirements When Using Predispute
Arbitration Agreements for Customers
Accounts) as FINRA Rule 2268
(Requirements When Using Predispute
Arbitration Agreements for Customer
Accounts), NASD Rule 3110(g)
(Negotiable Instruments Drawn From A
Customer’s Account) as FINRA Rule
4514 (Authorization Records for
Negotiable Instruments Drawn From a
Customer’s Account), NASD Rule
3110(h) (Order Audit Trail System
Record Keeping Requirements) as
paragraph (a)(4) of FINRA Rule 7440
(Recording of Order Information) and
NASD Rule 3110(j) (Changes in Account
Name or Designation) as FINRA Rule
4515 (Approval and Documentation of
Changes in Account Name or
Designation) in the consolidated FINRA
rulebook. The proposed rule change also
would renumber NYSE Rule
Interpretation 410/01 as FINRA Rule
5340 (Pre-Time Stamping) and NYSE
Rule Interpretation 410/02 as FINRA
Rule 4515.01 (Allocations of Orders
Made by Investment Advisers).
1. Purpose
As part of the process of developing
a new consolidated rulebook
(‘‘Consolidated FINRA Rulebook’’),6
FINRA is proposing to adopt NASD
Rules 3110(a), 3110(c), 3110(d) and (e),
3110(f), 3110(g), 3110(h) and 3110(j) as
FINRA Rules 4511, 4512, 4513, 2268,
4514, 7440(a)(4) and 4515, respectively,
in the Consolidated FINRA Rulebook,
with certain changes as described
below.7 FINRA also is proposing to
adopt Incorporated NYSE Rule
Interpretations 410/01 and 410/02 as
FINRA Rules 5340 and 4515.01,8
respectively, in the Consolidated FINRA
Rulebook.9 FINRA is proposing to delete
NASD IM–3110 and NYSE Rules 410
and 440, provided, however, NYSE
Rules 440.10 and 440.20 and NYSE Rule
Interpretation 440.20/01 are being
addressed as part of a separate
proposal.10
Current NASD Rules and NYSE Rules
require members to make and preserve
PO 00000
Frm 00073
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Sfmt 4703
6 The current FINRA rulebook consists of (1)
FINRA Rules; (2) NASD Rules; and (3) rules
incorporated from NYSE (‘‘Incorporated NYSE
Rules’’) (together, the NASD Rules and Incorporated
NYSE Rules are referred to as the ‘‘Transitional
Rulebook’’). While the NASD Rules generally apply
to all FINRA members, the Incorporated NYSE
Rules apply only to those members of FINRA that
are also members of the NYSE (‘‘Dual Members’’).
The FINRA Rules apply to all FINRA members,
unless such rules have a more limited application
by their terms. For more information about the
rulebook consolidation process, see Information
Notice, March 12, 2008 (Rulebook Consolidation
Process).
7 NASD Rule 3110(b) (Marking of Customer Order
Tickets) requires that members indicate on the
order ticket for each transaction in a non-exchangelisted security the name of each dealer contacted
and the quotations received to determine the best
inter-dealer market as required by NASD Rule
2320(g) (commonly referred to as the ‘‘Three Quote
Rule’’), unless the member can establish and
document its reliance on the exclusions to the
Three Quote Rule. FINRA is proposing to replace
NASD Rule 3110(b) with a more general
documentation requirement in the supplementary
material to proposed FINRA Rule 5310. See
Regulatory Notice 08–80 (December 2008)
(Proposed FINRA Rule Addressing Best Execution).
NASD Rule 3110(i) (Holding of Customer Mail)
specifies the circumstances under which members
may hold mail for a customer. FINRA is proposing
that NASD Rule 3110(i) be rewritten as a standalone
rule and relocated to the supervision section of the
Consolidated FINRA Rulebook. See Regulatory
Notice 08–24 (May 2008) (Proposed Consolidated
FINRA Rules Governing Supervision and
Supervisory Controls).
8 For convenience, the Incorporated NYSE Rules
are referred to as the NYSE Rules.
9 NYSE Rule Interpretation 410(a)(ii)(5)/01 was
deleted as part of a prior rule change. See Securities
Exchange Act Release No. 61473 (February 2, 2010),
75 FR 6422 (February 9, 2010) (Order Approving
File No. SR–FINRA–2009–087).
10 See Regulatory Notice 09–03 (January 2009)
(Proposed Consolidated FINRA Rules Governing
Financial Responsibility and Operational
Requirements).
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02FEN1
]]>Agencies
[Federal Register Volume 76, Number 22 (Wednesday, February 2, 2011)]
[Notices]
[Pages 5848-5850]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-2227]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63781; File No. SR-Phlx-2011-09]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
the Order Entry Port Fee
January 26, 2011.
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 January 21, 2011, NASDAQ OMX PHLX LLC (``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 applicability of the Order Entry
Port Fee.\3\ 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, and
at
[[Page 5849]]
the Commission's Public Reference Room.
---------------------------------------------------------------------------
\3\ The Order Entry Port Fee is a connectivity fee assessed on
members in connection with routing orders to the Exchange via an
external order entry port. Members access the Exchange's network
through order entry ports. A member organization may have more than
one order entry port.
---------------------------------------------------------------------------
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 the Order Entry Port Fee. The Exchange currently
assesses an Order Entry Port Fee per month per mnemonic \4\ of $500.
This fee is assessed on members regardless of whether the order entry
mnemonic is active \5\ during the billing month. The fee is assessed
regardless of usage, and solely on the number of order entry ports
assigned to each member organization.
---------------------------------------------------------------------------
\4\ Order entry mnemonics are codes that identify member
organization order entry ports.
\5\ An order entry mnemonic is considered active if a member
organization sends at least one order to the Exchange using that
order entry mnemonic during the applicable billing month. See
Securities Exchange Act Release No. 58728 (October 3, 2008), 73 FR
59695 (October 9, 2008) (SR-Phlx-2008-70).
---------------------------------------------------------------------------
The Exchange is proposing to modify the manner in which members are
assessed the Order Entry Port Fee as related to complex order.\6\ The
Exchange proposes to waive the $500 per month per mnemonic Order Entry
Port Fee for mnemonics used exclusively for complex orders where one of
the components of the complex order is the underlying security.\7\
---------------------------------------------------------------------------
\6\ A complex order is a spread, straddle, combination, ratio or
collar order, all of which consist of more than one component,
priced like a single order at a net debit or credit based on the
prices of the individual components. See Exchange Rule 1080,
Commentary .08(a)(i).
\7\ The Exchange recently filed a proposed rule change to add
complex orders where one component is the underlying stock or ETF to
the functionality on its electronic trading platform for options,
Phlx XL. The Exchange also amended its definition of complex orders
in Exchange Rule 1080 as follows: Complex Orders is any order
involving the simultaneous purchase and/or sale of two or more
different options series in the same underlying security, priced at
a net debit or credit based on the relative prices of the individual
components, for the same account, for the purpose of executing a
particular investment strategy. Furthermore, a Complex Order can
also be a stock-option order, which is an order to buy or sell a
stated number of units of an underlying stock or ETF coupled with
the purchase or sale of options contract(s). The Exchange also
proposed to permit complex orders consisting of up to six
components. See Securities Exchange Act Release No. 63509 (December
9, 2010), 76 FR 2733 (January 14, 2011) (SR-Phlx-2010-157) [sic].
---------------------------------------------------------------------------
The Exchange believes that members who transact complex orders may
require an increased number of ports due to the member's stock
clearance arrangements, which may require additional mnemonics. The
Exchange is proposing to limit the fees that would be assessed on
members requiring additional ports to transact stock-option orders.\8\
---------------------------------------------------------------------------
\8\ A complex order with one component that is the underlying
stock or Exchange Traded Fund Share (``ETF'') is also referred to as
a stock-option order.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \9\ in general, and furthers
the objectives of Section 6(b)(4) of the Act \10\ in particular, in
that it is an equitable allocation of reasonable fees and other charges
among Exchange members and other persons using its facilities. The
Exchange believes that the proposal is equitable and reasonable because
all members would be able to limit fees related to order entry ports
for such complex orders that are stock-option orders, which may require
additional mnemonics.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(4).
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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.\11\ At any time within 60 days of the
filing of the proposed rule change, the Commission summarily may
temporarily suspend 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. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.
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\11\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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-2011-09 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-2011-09. 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. Copies of the
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-
[[Page 5850]]
2011-09 and should be submitted on or before February 23, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-2227 Filed 2-1-11; 8:45 am]
BILLING CODE 8011-01-P
