Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Singly Listed Options, 16646-16650 [2011-6908]
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16646
Federal Register / Vol. 76, No. 57 / Thursday, March 24, 2011 / Notices
At times, changes in Commission
priorities require alterations in the
scheduling of meeting items.
For further information and to
ascertain what, if any, matters have been
added, deleted or postponed, please
contact:
The Office of the Secretary at (202)
551–5400.
Dated: March 22, 2011.
Elizabeth M. Murphy,
Secretary.
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meeting
Federal Register citation of previous
announcement: [76 FR 15352, March 21,
2011]
PLACE:
Closed Meeting.
100 F Street, NE., Washington,
DC.
DATE AND TIME OF PREVIOUSLY ANNOUNCED
MEETING: March 24, 2011 at 2 p.m.
Additional Item.
The following matter will also be
considered during the 2 p.m. Closed
Meeting scheduled for Thursday, March
24, 2011:
Consideration of amicus participation.
Commissioner Casey, as duty officer,
voted to consider the item listed for the
Closed Meeting in closed session, and
determined that no earlier notice thereof
was possible.
At times, changes in Commission
priorities require alterations in the
scheduling of meeting items. For further
information and to ascertain what, if
any, matters have been added, deleted
or postponed, please contact the Office
of the Secretary at (202) 551–5400.
CHANGE IN THE MEETING:
Dated: March 22, 2011.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011–7143 Filed 3–22–11; 4:15 pm]
BILLING CODE 8011–01–P
emcdonald on DSK2BSOYB1PROD with NOTICES
SECURITIES AND EXCHANGE
COMMISSION
[File No. 500–1]
[Release No. 34–64096; File No. SR–Phlx–
2011–34]
Circadian, Inc., Clean Energy
Combustion, Inc. (n/k/a Clean Energy
Combustion Systems, Inc.), Collectible
Concepts Group, Inc., Communitronics
of America, Inc. (n/k/a RPM Advantage,
Inc.), and ConSyGen, Inc., Order of
Suspension of Trading
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to
Singly Listed Options
March 22, 2011.
[FR Doc. 2011–7145 Filed 3–22–11; 4:15 pm]
STATUS:
SECURITIES AND EXCHANGE
COMMISSION
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Circadian,
Inc. because it has not filed any periodic
reports since the period ended
September 30, 1995.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Clean
Energy Combustion, Inc. (n/k/a Clean
Energy Combustion Systems, Inc.)
because it has not filed any periodic
reports since the period ended
September 30, 2004.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Collectible
Concepts Group, Inc. because it has not
filed any periodic reports since the
period ended November 30, 2007.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of
Communitronics of America, Inc.
(n/k/a RPM Advantage, Inc.) because it
has not filed any periodic reports since
the period ended June 30, 2006.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of ConSyGen,
Inc. because it has not filed any periodic
reports since the period ended
November 30, 2001.
The Commission is of the opinion that
the public interest and the protection of
investors require a suspension of trading
in the securities of the above-listed
companies.
Therefore, it is ordered, pursuant to
Section 12(k) of the Securities Exchange
Act of 1934, that trading in the
securities of the above-listed companies
is suspended for the period from 9:30
a.m. EDT on March 22, 2011, through
11:59 p.m. EDT on April 4, 2011.
By the Commission.
Jill M. Peterson,
Assistant Secretary.
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I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend its
Fee Schedule to replace its Sector Index
Options Fees and U.S. Dollar-Settled
Foreign Currency Option Fees, in
Section III of the Fee Schedule, with
Singly Listed Options 3 Fees. Also, the
Exchange is proposing to create new
fees for equities, exchange-traded funds
(‘‘ETFs’’) and Holding Company
Depository Receipts (‘‘HOLDRS’’) which
are not listed on another exchange.
While changes to the Fee Schedule
pursuant to this proposal are effective
upon filing, the Exchange has
designated these changes to be operative
on April 1, 2011.
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
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
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 For purposes of this filing, a Singly Listed
Option means an option that is only listed on the
Exchange and is not listed by any other national
securities exchange.
2 17
BILLING CODE 8011–01–P
16:17 Mar 23, 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 March 15,
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
[FR Doc. 2011–7069 Filed 3–22–11; 11:15 am]
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Federal Register / Vol. 76, No. 57 / Thursday, March 24, 2011 / Notices
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 create new fees titled
‘‘Singly Listed Options’’ to recoup the
increased costs associated with Singly
Listed options as compared with
Multiply Listed options.
The Exchange currently assesses fees
for equity options as specified in
Section II of the Fee Schedule titled
‘‘Equity Options Fees.’’ Section II
includes options overlying equities,
ETFs HOLDRS, BKX 4, RUT 5, RMN 6,
MNX 7 and NDX 8. The Exchange
currently assesses fees for sector index
options and U.S. Dollar-Settled foreign
currency options as specified in Section
III of the Exchange’s Fee Schedule titled
Customer
Options Transaction Charge ....................................................................
The Exchange would remove the
Sector Index Option Fees and the U.S.
Dollar-Settled Foreign Currency Options
Fees from Section III of the Exchange’s
Customer
Options Transaction Charge ....................................................................
In addition, the Exchange proposes to
assess Singly Listed equities, ETFs and
HOLDRS the proposed fees in Section
III.12 Singly listed equities, ETFs and
represents the KBW Bank Index.
represents the options on the Russell
2000® Index (the ‘‘Full Value Russell Index’’ or
‘‘RUT’’).
6 RMN represents options on the one-tenth value
Russell 2000® Index 6 (the ‘‘Reduced Value Russell
Index’’ or ‘‘RMN’’).
7 MNX represents options on the one-tenth value
of the Nasdaq 100 Index traded under the symbol
MNX (‘‘MNX’’).
8 NDX represents options on the Nasdaq 100
Index 8 traded under the symbol NDX (‘‘NDX’’).
9 The applicable U.S. dollar-settled foreign
currency options include XDB, XDE, XDN, XDS,
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5 RUT
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$.45
Brokerdealer
$.45
the sector index options are assessed the
following fees:
Professional
$.44
$.35
Firm
Specialist,
ROT, SQT
and RSQT
$.35
$.35
Firm
$.30
Brokerdealer
$.45
XDZ, XDC and XDV, are assessed the
following fees:
U.S. Dollar-Settled foreign currency
options, which include XDB, XDE,
XDN, XDS, XDA, XDM, XEH, XEV,
4 BKX
Specialist,
ROT, SQT
and RSQT
$.45
Fee Schedule. Sector index options and
U.S. Dollar-Settled foreign currency
options would be subject to the
proposed fees in Section III.11 Currently,
Options Transaction Charge ....................................................................
The Exchange is proposing to rename
Section III as ‘‘Singly Listed Options’’
and create fees, which would apply to
options overlying currencies,9 equities,
ETFs, indexes, and HOLDRS not listed
on another exchange.10 The proposed
fees are as follows:
Professional
$.35
Customer
‘‘Sector Index Options Fees and U.S.
Dollar-Settled Foreign Currency Option
Fees.’’
Professional
$.44
Specialist,
ROT, SQT
and RSQT
$.30
$.30
Firm
$.30
Brokerdealer
$.45
HOLDRS are currently subject to the
fees in Section II.13 The Exchange
currently assesses equity options,
including options overlying equities,
ETFs, HOLDRS, BKX, RUT, RMN, MNX
and NDX, the following fees which are
located in Section II of the Exchange’s
Fee Schedule:
XDA, XDM, XEH, XEV, XDZ, XDC and XDV
(‘‘Currencies’’).
10 The Exchange receives an overnight file from
The Options Clearing Corporation, the Data
Distribution Service feed, which provides the
Exchange a list of options which are Singly and
Multiply Listed. The Exchange provides its
members with a symbol directory that indicates
whether a security is Singly or Multiply Listed.
This information, which is available on the
exchange’s Web site, is updated daily. In the event
that a Singly Listed option becomes Multiply
Listed, the option would be assessed the fees in
Section II of the Fee Schedule.
11 The Exchange’s indexes and currencies, which
are subject to the fees in Section III, are only listed
on the Exchange and therefore Singly Listed.
12 This fee proposal would not impact any equity
options transacted in any of the symbols which are
listed in Section I of the Exchange’s Fee Schedule
titled ‘‘Rebates and Fees for Adding and Removing
Liquidity in Select Symbols.’’ The Exchange is not
amending Section I.
13 Multiply Listed options overlying equities,
ETFs, HOLDRS, BKX, RUT, RMN, MNX and NDX
would continue to be subject to the fees in Section
II. For purposes of this filing, a Multiply Listed
security means an option that is listed on more than
one exchange.
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Federal Register / Vol. 76, No. 57 / Thursday, March 24, 2011 / Notices
Specialist, ROT, SQT and
RSQT
Customer
Professional
Electronic
Options Transaction Charge (Penny
Pilot) .....................................................
Options Transaction Charge (non-Penny
Pilot) .....................................................
Options Surcharge in RUT, RMN, MNX
and NDX ...............................................
Options Surcharge in BKX .......................
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Nonelectronic
Firm
$.20
$.22
$.25
$.45
$.25
$.25
.20
.23
.25
.45
.25
.25
N/A
N/A
14 The proposed fees in Section III would apply
to Singly Listed options.
15 15 U.S.C. 78f(b).
16 15 U.S.C. 78f(b)(4).
17 By way of example, in analyzing an obvious
error, the Exchange would have additional data
points available in establishing a theoretical price
for a Multiply Listed option as compared to a Singly
Listed option, which requires additional analysis
and administrative time to comply with Exchange
rules to resolve an obvious error.
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Electronic
.00
2. Statutory Basis
The Exchange believes that its
proposal to amend its Fee Schedule is
consistent with Section 6(b) of the Act 15
in general, and furthers the objectives of
Section 6(b)(4) of the Act 16 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
proposed fees for Singly Listed Options
are equitable because the Exchange is
seeking to recoup the operational costs
for Singly Listed options, which costs
are higher than those for Multiply Listed
options.17 In addition, the Exchange
believes that the proposed fees for
Singly Listed options are equitable for
the reasons specified below.
Customers currently pay: (i) No
transaction fee for equity options; (ii) a
$.44 per contract fee for sector index
options; and (iii) a $.44 per contract fee
for U.S. Dollar-Settled foreign currency
16:17 Mar 23, 2011
Nonelectronic
$.00
The Exchange is proposing to amend
the Equity Options Fees in Section II by
adding the words ‘‘which are Multiply
Listed’’ to the title of Section II to clarify
that Section II fees apply to Multiply
Listed options.14 The Exchange also
proposes to amend this title consistently
throughout the Fee Schedule. The
Exchange also proposes to amend
Section IV of the Exchange’s Fee
Schedule, titled ‘‘PIXL Pricing,’’ to
replace references to ‘‘Sector Index
Options Fees and U.S. Dollar-Settled
Foreign Currency Options’’ with the
words ‘‘Singly Listed Options.’’ The
Exchange is also proposing to amend
the Table of Contents to reflect the
proposed title for Section III, ‘‘Singly
Listed Options.’’
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Broker-dealer
N/A
N/A
.15
.10
.15
.10
.15
.10
.15
.10
.15
.10
options. The Exchange is proposing to
assess a $.35 per contract fee to
Customers trading Singly Listed options
which includes Currencies, equities,
ETFs, Indexes and HOLDRS. Customers
transacting Multiply Listed equity
options, ETFs or HOLDRS are currently
assessed no transaction fee and this
would not change with this proposal.
Customers who currently transact
Singly Listed equity options, ETFs or
HOLDRS would now pay $.35 per
contract.18 The Exchange believes that
this fee increase is equitable because the
Exchange incurs a higher operational
cost on Singly Listed options as
compared to Multiply Listed options as
described above. The Exchange believes
that it is equitable to assess Customers
$.35 per contract to transact Currencies
and indexes, because today Customers
pay $.44 per contract to transact these
products. Customers would benefit from
the lower fee. The Exchange is able to
lower the fee by offsetting the costs with
the fee increase to Customers who
transact Singly Listed equity options,
ETFs and HOLDRS.
The Exchange believes that it is
equitable to assess Specialists,19
Registered Options Traders,20 SQTs,21
and RSQTs 22 a transaction fee of $.35
18 This excludes equity options which are subject
to Section I of the Fee Schedule titled ‘‘Fees and
Rebates for Adding and Removing Liquidity in
Select Symbols.’’
19 A Specialist is an Exchange member who is
registered as an options specialist pursuant to Rule
1020(a).
20 A Registered Options Trader (‘‘ROT’’) includes
a Streaming Quote Trader (‘‘SQT’’), a Remote
Streaming Quote Trader (‘‘RSQT’’) and a Non-SQT
ROT, which by definition is neither a SQT or a
RSQT. A ROT is defined in Exchange Rule 1014(b)
as a regular member or a foreign currency options
participant of the Exchange located on the trading
floor who has received permission from the
Exchange to trade in options for his own account.
See Exchange Rule 1014(b)(i) and (ii).
21 An SQT is defined in Exchange Rule
1014(b)(ii)(A) as an ROT who has received
permission from the Exchange to generate and
submit option quotations electronically in options
to which such SQT is assigned.
22 A RSQT is defined in Exchange Rule
1014(b)(ii)(B) as 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
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per contract to transact Singly Listed
Currencies, equities, ETFs, indexes and
HOLDRS. Market makers 23 today are
assessed Equity Options Fees for
transacting equity options, ETFs or
HOLDRS ranging from $.10–$.25 per
contract depending on whether the
transaction is electronic 24 or nonelectronic, a Penny Pilot 25 or a nonPenny Pilot option or an option
overlying RUT, RMN, MNX, NDX or
BKX.26 The Exchange believes that it is
equitable to assess market makers $.35
per contract for transacting Singly
Listed equities, ETFs and HOLDRs
pursuant to the proposed fees in Section
III, because such orders would not be
subject to payment for order flow.
Currently, equity option transactions,
including options overlying equities,
ETFs, HOLDRS, BKX, RUT, RMN, MNX
and NDX, are subject to certain payment
for order flow fees.27 The Exchange
assesses Payment for Order Flow Fees of
$.25 per contract for options trading in
the Penny Pilot Program and $.70 per
electronically in options to which such RSQT has
been assigned. An RSQT may only submit such
quotations electronically from off the floor of the
Exchange.
23 The Exchange market maker category includes
Specialists (see Rule 1020) and ROTs (Rule
1014(b)(i) and (ii), which includes SQTs (see Rule
1014(b)(ii)(A)) and RSQTs (see Rule 1014(b)(ii)(B)).
24 Electronically delivered orders do not include
orders delivered through the Floor Broker
Management System.
25 The Penny Pilot was established in January
2007; and in October 2009, it was expanded and
extended through December 31, 2010. See
Securities Exchange Act Release Nos. 55153
(January 23, 2007), 72 FR 4553 (January 31, 2007)
(SR–Phlx–2006–74) (approval order establishing
Penny Pilot); 60873 (October 23, 2009), 74 FR 56675
(November 2, 2009) (SR–Phlx–2009–91) (expanding
and extending Penny Pilot); 60966 (November 9,
2009), 74 FR 59331 (November 17, 2009) (SR–Phlx–
2009–94) (adding seventy-five classes to Penny
Pilot); and 61454 (February 1, 2010), 75 FR 6233
(February 8, 2010) (SR–Phlx–2010–12) (adding
seventy-five options classes to the Penny Pilot). See
also Exchange Rule 1034.
26 This excludes the symbols which are subject to
Section I of the Fee Schedule, titled ‘‘Fees and
Rebates for Adding and Removing Liquidity in
Select Symbols.’’
27 This excludes the symbols which are subject to
Section I of the Fee Schedule, titled ‘‘Fees and
Rebates for Adding and Removing Liquidity in
Select Symbols.’’
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Federal Register / Vol. 76, No. 57 / Thursday, March 24, 2011 / Notices
contract for all other equity options.28
The Exchange believes that it is
equitable to assess market makers a
higher rate for transacting Singly Listed
equities, ETFs or HOLDRS because
market makers would not be subject to
Payment for Order Fees, as they are
today and would continue to be under
this proposal, when transacting
Multiply Listed equities, ETFs or
HOLDRS. The Exchange believes that
increasing the fee assessed for indexes
and Currencies from $.30 to $.35 per
contract is equitable because as stated
previously, the Exchange is seeking to
recoup costs with respect to Singly
Listed products. Additionally, the
Exchange would be assessing the same
fee on indexes and Currencies.
The Exchange believes that it is
equitable to assess Professionals, Firms
and Broker-Dealers $.45 per contract to
transact Singly Listed options including
Currencies, equities, ETFs, indexes and
HOLDRS. Currently, Professionals pay
$.20 per contract to transact equities,
ETFs and HOLDRS, $.35 per contract to
transact indexes and $.30 per contract to
transact Currencies. The Exchange
believes that the proposed $.45 per
contract Professional fee would be
equitable because of the increased costs
associated with Singly Listed options as
explained above.
Broker-Dealers today are assessed
Equity Options Fees for transacting
equity options, ETFs or HOLDRS
ranging from $.10–$.45 per contract
depending on whether the transaction is
electronic or non-electronic, a Penny
Pilot or non-Penny Pilot option or an
option overlying RUT, RMN, MNX,
NDX or BKX. The Exchange believes
that the proposed Broker-Dealer fee of
$.45 per contract is equitable because it
is similar to the Exchange’s fees for
electronic transactions in Penny Pilot
and non-Penny Pilot options.29
Additionally, the Exchange believes that
the proposed fee for both indexes and
Currencies is equitable because the rates
would remain the same as today.
Finally, Firms today are assessed fees
for transacting equities, ETFs and
HOLDRS which range from $.10–$.25
per contract. The Exchange believes that
the proposed Firm fee of $.45 per
contract is equitable because of the
higher costs associated with Singly
Listed options as compared to Multiply
Listed options as explained above. The
Exchange believes that the increased
costs also form an equitable basis to
increase both the Broker-Dealer fees to
28 There are no Payment for Order Flow Fees on
trades that are not delivered electronically.
29 See Section II of the Exchange’s Fee Schedule.
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Jkt 223001
transact indexes and Currencies from
$.30 to $.45 per contract.
The Exchange believes that the
proposed fees are reasonable because
the fees are consistent with price
differentiation that exists today at all
option exchanges. Other exchanges
today charge different rates as between
Multiply Listed products and Singly
Listed products. For example, the
Internal Securities Exchange, LLC
(‘‘ISE’’) assesses different fees for
Customers who transact Multiply Listed
options, indexes, ETFs and FX Options
($.00) as compared to Customers who
transact Singly Listed indexes, ETFs and
FX Options ($.18).30
The Exchange believes that the
Customer rate of $.35 per contract for
Singly Listed Currencies, equities, ETFs
and HOLDRS is reasonable because it is
less than Customer rates assessed by
NYSE Arca, Inc. (‘‘NYSE Arca’’), where
a Customer electronically executing a
Penny Pilot option or a foreign currency
option is assessed a fee of $.45 per
contract.31 The Exchange believes that
the Customer rate of $.35 per contract
for Singly Listed indexes is reasonable
because it is less than the rate assessed
by ISE for SPX 32 of $.44 per contract.33
The Exchange believes that the
proposed rate of $.45 per contract for
Singly Listed Currencies, equities, ETFs,
indexes and HOLDRS for Professionals
and Firms is reasonable, because the
Exchange is proposing to assess Firms
and Professionals the same rate assessed
on Broker-Dealers today. NYSE Arca
assesses Firms that electronically
execute foreign currency options an
equity options transaction fee of $.45
plus a royalty fee of $.10 per contract.34
The Exchange believes it is reasonable
to assess a Professional a per contract
fee of $.45 per contract for transacting
Singly Listed Currencies because the
Exchange is assessing all market
participants, except Customers and
market makers, the same rate to transact
Singly Listed Currencies. The Exchange
believes that the price differentiation
between market makers as compared to
Firms, Broker-Dealers and Specialists is
justified because market makers have
obligations to the market, which do not
apply to Firms, Professionals and
Broker-Dealers.35 The Exchange believes
that assessing Customers a lower rate to
transact Singly Listed indexes is
30 See
ISE’s Schedule of Fees.
NYSE Arca’s Fee Schedule.
32 SPX refers to options on the Standard & Poor’s
500 Index.
33 See ISE’s Schedule of Fees.
34 See NYSE Arca’s Fee Schedule.
35 See Exchange Rule 1014 titled ‘‘Obligations and
Restrictions Applicable to Specialists and
Registered Options Traders.’’
31 See
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reasonable because all market
participants benefit from Customer
order flow.
The Exchange believes that its
proposed rate of $.45 per contract for
Singly Listed indexes is reasonable
because the Chicago Board Options
Exchange, Incorporated (‘‘CBOE’’)
assesses a Firm and a Professional $.40
per contract for trading SPX.36 The
Exchange believes that assessing Firms
and Professionals $.45 per contract in
Singly Listed equities, ETFs and
HOLDRs is reasonable because NYSE
Arca assesses Firms and Broker-Dealers
$.50 per contract for equities, ETFs and
HOLDRs that are not in the Penny
Pilot.37 The Exchange is not amending
the rates it assesses Broker-Dealers for
Singly Listed indexes and equities. The
rate for Singly Listed equities, ETFs and
HOLDRs is the same rate the Exchange
assesses Broker-Dealers transacting
electronic Penny Pilot and non-Penny
Pilot orders today.38 The Exchange
believes that assessing Customers a
lower rate to transact Singly Listed
indexes is reasonable because it would
increase Customer order flow to the
Exchange and such increased liquidity
would benefit all market participants.
Finally, the Exchange believes that
assessing market makers a fee of $.35
per contract for Singly Listed Currencies
is reasonable because it is lower than
the fee of $.45 plus a royalty fee of $.10
per contract that NYSE Arca assesses
market makers that electronically
execute foreign currency options.39 The
Exchange is not amending the fees
assessed on market makers transacting
Singly Listed indexes. The Exchange
believes that it is reasonable to assess
market makers a $.35 per contract fee for
equities, ETFs and HOLDRs because
NYSE Arca assesses market makers $.45
per contract to electronically execute
Penny Pilot options.40
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.
36 See CBOE’s Fees Schedule. CBOE also assesses
a surcharge fee of $0.10 for SPX which applies to
all non-public customer transactions, including
voluntary professionals, and professionals.
37 See NYSE Arca’s Fee Schedule. Presumably,
this includes options only listed on NYSE Arca.
38 See Section II of the Exchange’s Fee Schedule.
39 See NYSE Arca’s Fee Schedule.
40 See NYSE Arca’s Fee Schedule.
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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.41 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.
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:
emcdonald on DSK2BSOYB1PROD with NOTICES
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-2011–34 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–2011–34. 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 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 offices 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-2011–34, and should
be submitted on or before April 14,
2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.42
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011–6908 Filed 3–23–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–64097; File No. SR–BX–
2010–079]
Self-Regulatory Organizations;
NASDAQ OMX BX, Inc.; Order
Approving Proposed Rule Change To
Amend Chapter IV of the BOX Rules To
Allow Executing Participants To
Provide BOX a List of the Order Flow
Providers for Which the Executing
Participants Will Provide Directed
Order Services
March 18, 2011.
I. Introduction
On December 3, 2010, NASDAQ OMX
BX, Inc. (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 proposal to amend the
rules governing its Directed Order
process to: (i) Allow an Executing
Participant (‘‘EP’’) to provide BOX a list
of the Order Flow Providers (‘‘OFPs’’) for
which the EP will provide Directed
Order services and (ii) provide that BOX
would reveal to the EP the participant
ID of the OFP sending the Directed
42 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
41 15
U.S.C. 78s(b)(3)(A)(ii).
VerDate Mar<15>2010
16:17 Mar 23, 2011
Jkt 223001
PO 00000
Frm 00054
Fmt 4703
Sfmt 4703
Order.3 The proposed rule change was
published for comment in the Federal
Register on December 20, 2010.4 The
Commission received no comments on
the proposal. This order approves the
proposal.
II. Description of the Proposal
Under the BOX’s Directed Order
process, Market Makers on BOX are able
to handle orders on an agency basis
directed to them by OFPs. An OFP
sends a Directed Order to BOX with a
designation of the Market Maker to
whom the order is to be directed. BOX
then routes the Directed Order to the
appropriate Market Maker. Under
Chapter VI, Section 5(c)(ii) of the BOX
Rules, a Market Maker only has two
choices when receiving a Directed
Order: (1) Submit the order to the Price
Improvement Period auction process
(‘‘PIP’’); 5 or (2) send the order back to
BOX for placement onto the BOX Book.
A Market Maker who desires to accept
Directed Orders must systemically
indicate that it is an EP whenever the
Market Maker wishes to receive
Directed Orders from the BOX Trading
Host. If a Market Maker does not
systemically indicate that it is an EP,
then the BOX Trading Host will not
forward any Directed Orders to that
Market Maker. In such a case, the BOX
Trading Host will send the order
directly to the BOX Book. If a Market
Maker has systemically indicated that it
wishes to receive Directed Orders, it
shall not, under any circumstances,
reject the receipt of a Directed Order
from the BOX Trading Host nor reject
the Directed Order back to the OFP who
sent it.6
The Exchange proposes to amend
Chapter VI, Section 5(c)(i) of the BOX
Rules to allow EPs to provide BOX a list
of OFPs for which the EP will provide
Directed Order services. Under the
proposal, prior to accepting any
Directed Order through the Trading
Host, an EP must inform BOX of the
OFPs from whom it has agreed to accept
Directed Orders (‘‘Listed OFPs’’ or
‘‘LOFPs’’). The Trading Host will then
only send to the EP Directed Orders
from LOFPs. Further, under the
proposal, the BOX Trading Host would
3 Shortly after the filing of the proposed rule
change, the Exchange withdrew an earlier proposal
relating to the non-anonymity of Directed Orders
(SR–BSE–2005–52). See Securities Exchange Act
Release No. 53357 (February 23, 2006), 71 FR 10730
(March 2, 2006) (SR–BSE–2005–52).
4 See Securities Exchange Act Release No. 63539
(December 14, 2010), 75 FR 79429 (‘‘Notice’’).
5 See Chapter V, Section 18 of the BOX Rules.
6 See Chapter VI, Section 5(c)(i) of the BOX Rules.
E:\FR\FM\24MRN1.SGM
24MRN1
]]>Agencies
[Federal Register Volume 76, Number 57 (Thursday, March 24, 2011)]
[Notices]
[Pages 16646-16650]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-6908]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64096; File No. SR-Phlx-2011-34]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Singly Listed Options
March 18, 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 March 15, 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 its Fee Schedule to replace its
Sector Index Options Fees and U.S. Dollar-Settled Foreign Currency
Option Fees, in Section III of the Fee Schedule, with Singly Listed
Options \3\ Fees. Also, the Exchange is proposing to create new fees
for equities, exchange-traded funds (``ETFs'') and Holding Company
Depository Receipts (``HOLDRS'') which are not listed on another
exchange.
---------------------------------------------------------------------------
\3\ For purposes of this filing, a Singly Listed Option means an
option that is only listed on the Exchange and is not listed by any
other national securities exchange.
---------------------------------------------------------------------------
While changes to the Fee Schedule pursuant to this proposal are
effective upon filing, the Exchange has designated these changes to be
operative on April 1, 2011.
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 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
[[Page 16647]]
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 create new fees
titled ``Singly Listed Options'' to recoup the increased costs
associated with Singly Listed options as compared with Multiply Listed
options.
The Exchange currently assesses fees for equity options as
specified in Section II of the Fee Schedule titled ``Equity Options
Fees.'' Section II includes options overlying equities, ETFs HOLDRS,
BKX \4\, RUT \5\, RMN \6\, MNX \7\ and NDX \8\. The Exchange currently
assesses fees for sector index options and U.S. Dollar-Settled foreign
currency options as specified in Section III of the Exchange's Fee
Schedule titled ``Sector Index Options Fees and U.S. Dollar-Settled
Foreign Currency Option Fees.''
---------------------------------------------------------------------------
\4\ BKX represents the KBW Bank Index.
\5\ RUT represents the options on the Russell 2000[reg] Index
(the ``Full Value Russell Index'' or ``RUT'').
\6\ RMN represents options on the one-tenth value Russell
2000[reg] Index \6\ (the ``Reduced Value Russell Index'' or
``RMN'').
\7\ MNX represents options on the one-tenth value of the Nasdaq
100 Index traded under the symbol MNX (``MNX'').
\8\ NDX represents options on the Nasdaq 100 Index \8\ traded
under the symbol NDX (``NDX'').
---------------------------------------------------------------------------
The Exchange is proposing to rename Section III as ``Singly Listed
Options'' and create fees, which would apply to options overlying
currencies,\9\ equities, ETFs, indexes, and HOLDRS not listed on
another exchange.\10\ The proposed fees are as follows:
---------------------------------------------------------------------------
\9\ The applicable U.S. dollar-settled foreign currency options
include XDB, XDE, XDN, XDS, XDA, XDM, XEH, XEV, XDZ, XDC and XDV
(``Currencies'').
\10\ The Exchange receives an overnight file from The Options
Clearing Corporation, the Data Distribution Service feed, which
provides the Exchange a list of options which are Singly and
Multiply Listed. The Exchange provides its members with a symbol
directory that indicates whether a security is Singly or Multiply
Listed. This information, which is available on the exchange's Web
site, is updated daily. In the event that a Singly Listed option
becomes Multiply Listed, the option would be assessed the fees in
Section II of the Fee Schedule.
----------------------------------------------------------------------------------------------------------------
Specialist,
Customer Professional ROT, SQT Firm Broker-
and RSQT dealer
----------------------------------------------------------------------------------------------------------------
Options Transaction Charge.................... $.35 $.45 $.35 $.45 $.45
----------------------------------------------------------------------------------------------------------------
The Exchange would remove the Sector Index Option Fees and the U.S.
Dollar-Settled Foreign Currency Options Fees from Section III of the
Exchange's Fee Schedule. Sector index options and U.S. Dollar-Settled
foreign currency options would be subject to the proposed fees in
Section III.\11\ Currently, the sector index options are assessed the
following fees:
---------------------------------------------------------------------------
\11\ The Exchange's indexes and currencies, which are subject to
the fees in Section III, are only listed on the Exchange and
therefore Singly Listed.
----------------------------------------------------------------------------------------------------------------
Specialist,
Customer Professional ROT, SQT Firm Broker-
and RSQT dealer
----------------------------------------------------------------------------------------------------------------
Options Transaction Charge.................... $.44 $.35 $.35 $.30 $.45
----------------------------------------------------------------------------------------------------------------
U.S. Dollar-Settled foreign currency options, which include XDB,
XDE, XDN, XDS, XDA, XDM, XEH, XEV, XDZ, XDC and XDV, are assessed the
following fees:
----------------------------------------------------------------------------------------------------------------
Specialist,
Customer Professional ROT, SQT Firm Broker-
and RSQT dealer
----------------------------------------------------------------------------------------------------------------
Options Transaction Charge.................... $.44 $.30 $.30 $.30 $.45
----------------------------------------------------------------------------------------------------------------
In addition, the Exchange proposes to assess Singly Listed
equities, ETFs and HOLDRS the proposed fees in Section III.\12\ Singly
listed equities, ETFs and HOLDRS are currently subject to the fees in
Section II.\13\ The Exchange currently assesses equity options,
including options overlying equities, ETFs, HOLDRS, BKX, RUT, RMN, MNX
and NDX, the following fees which are located in Section II of the
Exchange's Fee Schedule:
---------------------------------------------------------------------------
\12\ This fee proposal would not impact any equity options
transacted in any of the symbols which are listed in Section I of
the Exchange's Fee Schedule titled ``Rebates and Fees for Adding and
Removing Liquidity in Select Symbols.'' The Exchange is not amending
Section I.
\13\ Multiply Listed options overlying equities, ETFs, HOLDRS,
BKX, RUT, RMN, MNX and NDX would continue to be subject to the fees
in Section II. For purposes of this filing, a Multiply Listed
security means an option that is listed on more than one exchange.
[[Page 16648]]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Specialist, ROT, SQT and Broker-dealer
RSQT --------------------------
Customer Professional -------------------------- Firm
Non- Electronic Non-
Electronic electronic electronic
--------------------------------------------------------------------------------------------------------------------------------------------------------
Options Transaction Charge (Penny Pilot).................... $.00 $.20 $.22 $.25 $.45 $.25 $.25
Options Transaction Charge (non-Penny Pilot)................ .00 .20 .23 .25 .45 .25 .25
Options Surcharge in RUT, RMN, MNX and NDX.................. N/A N/A .15 .15 .15 .15 .15
Options Surcharge in BKX.................................... N/A N/A .10 .10 .10 .10 .10
--------------------------------------------------------------------------------------------------------------------------------------------------------
The Exchange is proposing to amend the Equity Options Fees in
Section II by adding the words ``which are Multiply Listed'' to the
title of Section II to clarify that Section II fees apply to Multiply
Listed options.\14\ The Exchange also proposes to amend this title
consistently throughout the Fee Schedule. The Exchange also proposes to
amend Section IV of the Exchange's Fee Schedule, titled ``PIXL
Pricing,'' to replace references to ``Sector Index Options Fees and
U.S. Dollar-Settled Foreign Currency Options'' with the words ``Singly
Listed Options.'' The Exchange is also proposing to amend the Table of
Contents to reflect the proposed title for Section III, ``Singly Listed
Options.''
---------------------------------------------------------------------------
\14\ The proposed fees in Section III would apply to Singly
Listed options.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \15\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \16\ in
particular, in that it is an equitable allocation of reasonable fees
and other charges among Exchange members and other persons using its
facilities.
---------------------------------------------------------------------------
\15\ 15 U.S.C. 78f(b).
\16\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
The Exchange believes that the proposed fees for Singly Listed
Options are equitable because the Exchange is seeking to recoup the
operational costs for Singly Listed options, which costs are higher
than those for Multiply Listed options.\17\ In addition, the Exchange
believes that the proposed fees for Singly Listed options are equitable
for the reasons specified below.
---------------------------------------------------------------------------
\17\ By way of example, in analyzing an obvious error, the
Exchange would have additional data points available in establishing
a theoretical price for a Multiply Listed option as compared to a
Singly Listed option, which requires additional analysis and
administrative time to comply with Exchange rules to resolve an
obvious error.
---------------------------------------------------------------------------
Customers currently pay: (i) No transaction fee for equity options;
(ii) a $.44 per contract fee for sector index options; and (iii) a $.44
per contract fee for U.S. Dollar-Settled foreign currency options. The
Exchange is proposing to assess a $.35 per contract fee to Customers
trading Singly Listed options which includes Currencies, equities,
ETFs, Indexes and HOLDRS. Customers transacting Multiply Listed equity
options, ETFs or HOLDRS are currently assessed no transaction fee and
this would not change with this proposal. Customers who currently
transact Singly Listed equity options, ETFs or HOLDRS would now pay
$.35 per contract.\18\ The Exchange believes that this fee increase is
equitable because the Exchange incurs a higher operational cost on
Singly Listed options as compared to Multiply Listed options as
described above. The Exchange believes that it is equitable to assess
Customers $.35 per contract to transact Currencies and indexes, because
today Customers pay $.44 per contract to transact these products.
Customers would benefit from the lower fee. The Exchange is able to
lower the fee by offsetting the costs with the fee increase to
Customers who transact Singly Listed equity options, ETFs and HOLDRS.
---------------------------------------------------------------------------
\18\ This excludes equity options which are subject to Section I
of the Fee Schedule titled ``Fees and Rebates for Adding and
Removing Liquidity in Select Symbols.''
---------------------------------------------------------------------------
The Exchange believes that it is equitable to assess
Specialists,\19\ Registered Options Traders,\20\ SQTs,\21\ and RSQTs
\22\ a transaction fee of $.35 per contract to transact Singly Listed
Currencies, equities, ETFs, indexes and HOLDRS. Market makers \23\
today are assessed Equity Options Fees for transacting equity options,
ETFs or HOLDRS ranging from $.10-$.25 per contract depending on whether
the transaction is electronic \24\ or non-electronic, a Penny Pilot
\25\ or a non-Penny Pilot option or an option overlying RUT, RMN, MNX,
NDX or BKX.\26\ The Exchange believes that it is equitable to assess
market makers $.35 per contract for transacting Singly Listed equities,
ETFs and HOLDRs pursuant to the proposed fees in Section III, because
such orders would not be subject to payment for order flow. Currently,
equity option transactions, including options overlying equities, ETFs,
HOLDRS, BKX, RUT, RMN, MNX and NDX, are subject to certain payment for
order flow fees.\27\ The Exchange assesses Payment for Order Flow Fees
of $.25 per contract for options trading in the Penny Pilot Program and
$.70 per
[[Page 16649]]
contract for all other equity options.\28\ The Exchange believes that
it is equitable to assess market makers a higher rate for transacting
Singly Listed equities, ETFs or HOLDRS because market makers would not
be subject to Payment for Order Fees, as they are today and would
continue to be under this proposal, when transacting Multiply Listed
equities, ETFs or HOLDRS. The Exchange believes that increasing the fee
assessed for indexes and Currencies from $.30 to $.35 per contract is
equitable because as stated previously, the Exchange is seeking to
recoup costs with respect to Singly Listed products. Additionally, the
Exchange would be assessing the same fee on indexes and Currencies.
---------------------------------------------------------------------------
\19\ A Specialist is an Exchange member who is registered as an
options specialist pursuant to Rule 1020(a).
\20\ A Registered Options Trader (``ROT'') includes a Streaming
Quote Trader (``SQT''), a Remote Streaming Quote Trader (``RSQT'')
and a Non-SQT ROT, which by definition is neither a SQT or a RSQT. A
ROT is defined in Exchange Rule 1014(b) as a regular member or a
foreign currency options participant of the Exchange located on the
trading floor who has received permission from the Exchange to trade
in options for his own account. See Exchange Rule 1014(b)(i) and
(ii).
\21\ An SQT is defined in Exchange Rule 1014(b)(ii)(A) as an ROT
who has received permission from the Exchange to generate and submit
option quotations electronically in options to which such SQT is
assigned.
\22\ A RSQT is defined in Exchange Rule 1014(b)(ii)(B) as 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 in options to
which such RSQT has been assigned. An RSQT may only submit such
quotations electronically from off the floor of the Exchange.
\23\ The Exchange market maker category includes Specialists
(see Rule 1020) and ROTs (Rule 1014(b)(i) and (ii), which includes
SQTs (see Rule 1014(b)(ii)(A)) and RSQTs (see Rule 1014(b)(ii)(B)).
\24\ Electronically delivered orders do not include orders
delivered through the Floor Broker Management System.
\25\ The Penny Pilot was established in January 2007; and in
October 2009, it was expanded and extended through December 31,
2010. See Securities Exchange Act Release Nos. 55153 (January 23,
2007), 72 FR 4553 (January 31, 2007) (SR-Phlx-2006-74) (approval
order establishing Penny Pilot); 60873 (October 23, 2009), 74 FR
56675 (November 2, 2009) (SR-Phlx-2009-91) (expanding and extending
Penny Pilot); 60966 (November 9, 2009), 74 FR 59331 (November 17,
2009) (SR-Phlx-2009-94) (adding seventy-five classes to Penny
Pilot); and 61454 (February 1, 2010), 75 FR 6233 (February 8, 2010)
(SR-Phlx-2010-12) (adding seventy-five options classes to the Penny
Pilot). See also Exchange Rule 1034.
\26\ This excludes the symbols which are subject to Section I of
the Fee Schedule, titled ``Fees and Rebates for Adding and Removing
Liquidity in Select Symbols.''
\27\ This excludes the symbols which are subject to Section I of
the Fee Schedule, titled ``Fees and Rebates for Adding and Removing
Liquidity in Select Symbols.''
\28\ There are no Payment for Order Flow Fees on trades that are
not delivered electronically.
---------------------------------------------------------------------------
The Exchange believes that it is equitable to assess Professionals,
Firms and Broker-Dealers $.45 per contract to transact Singly Listed
options including Currencies, equities, ETFs, indexes and HOLDRS.
Currently, Professionals pay $.20 per contract to transact equities,
ETFs and HOLDRS, $.35 per contract to transact indexes and $.30 per
contract to transact Currencies. The Exchange believes that the
proposed $.45 per contract Professional fee would be equitable because
of the increased costs associated with Singly Listed options as
explained above.
Broker-Dealers today are assessed Equity Options Fees for
transacting equity options, ETFs or HOLDRS ranging from $.10-$.45 per
contract depending on whether the transaction is electronic or non-
electronic, a Penny Pilot or non-Penny Pilot option or an option
overlying RUT, RMN, MNX, NDX or BKX. The Exchange believes that the
proposed Broker-Dealer fee of $.45 per contract is equitable because it
is similar to the Exchange's fees for electronic transactions in Penny
Pilot and non-Penny Pilot options.\29\ Additionally, the Exchange
believes that the proposed fee for both indexes and Currencies is
equitable because the rates would remain the same as today.
---------------------------------------------------------------------------
\29\ See Section II of the Exchange's Fee Schedule.
---------------------------------------------------------------------------
Finally, Firms today are assessed fees for transacting equities,
ETFs and HOLDRS which range from $.10-$.25 per contract. The Exchange
believes that the proposed Firm fee of $.45 per contract is equitable
because of the higher costs associated with Singly Listed options as
compared to Multiply Listed options as explained above. The Exchange
believes that the increased costs also form an equitable basis to
increase both the Broker-Dealer fees to transact indexes and Currencies
from $.30 to $.45 per contract.
The Exchange believes that the proposed fees are reasonable because
the fees are consistent with price differentiation that exists today at
all option exchanges. Other exchanges today charge different rates as
between Multiply Listed products and Singly Listed products. For
example, the Internal Securities Exchange, LLC (``ISE'') assesses
different fees for Customers who transact Multiply Listed options,
indexes, ETFs and FX Options ($.00) as compared to Customers who
transact Singly Listed indexes, ETFs and FX Options ($.18).\30\
---------------------------------------------------------------------------
\30\ See ISE's Schedule of Fees.
---------------------------------------------------------------------------
The Exchange believes that the Customer rate of $.35 per contract
for Singly Listed Currencies, equities, ETFs and HOLDRS is reasonable
because it is less than Customer rates assessed by NYSE Arca, Inc.
(``NYSE Arca''), where a Customer electronically executing a Penny
Pilot option or a foreign currency option is assessed a fee of $.45 per
contract.\31\ The Exchange believes that the Customer rate of $.35 per
contract for Singly Listed indexes is reasonable because it is less
than the rate assessed by ISE for SPX \32\ of $.44 per contract.\33\
---------------------------------------------------------------------------
\31\ See NYSE Arca's Fee Schedule.
\32\ SPX refers to options on the Standard & Poor's 500 Index.
\33\ See ISE's Schedule of Fees.
---------------------------------------------------------------------------
The Exchange believes that the proposed rate of $.45 per contract
for Singly Listed Currencies, equities, ETFs, indexes and HOLDRS for
Professionals and Firms is reasonable, because the Exchange is
proposing to assess Firms and Professionals the same rate assessed on
Broker-Dealers today. NYSE Arca assesses Firms that electronically
execute foreign currency options an equity options transaction fee of
$.45 plus a royalty fee of $.10 per contract.\34\ The Exchange believes
it is reasonable to assess a Professional a per contract fee of $.45
per contract for transacting Singly Listed Currencies because the
Exchange is assessing all market participants, except Customers and
market makers, the same rate to transact Singly Listed Currencies. The
Exchange believes that the price differentiation between market makers
as compared to Firms, Broker-Dealers and Specialists is justified
because market makers have obligations to the market, which do not
apply to Firms, Professionals and Broker-Dealers.\35\ The Exchange
believes that assessing Customers a lower rate to transact Singly
Listed indexes is reasonable because all market participants benefit
from Customer order flow.
---------------------------------------------------------------------------
\34\ See NYSE Arca's Fee Schedule.
\35\ See Exchange Rule 1014 titled ``Obligations and
Restrictions Applicable to Specialists and Registered Options
Traders.''
---------------------------------------------------------------------------
The Exchange believes that its proposed rate of $.45 per contract
for Singly Listed indexes is reasonable because the Chicago Board
Options Exchange, Incorporated (``CBOE'') assesses a Firm and a
Professional $.40 per contract for trading SPX.\36\ The Exchange
believes that assessing Firms and Professionals $.45 per contract in
Singly Listed equities, ETFs and HOLDRs is reasonable because NYSE Arca
assesses Firms and Broker-Dealers $.50 per contract for equities, ETFs
and HOLDRs that are not in the Penny Pilot.\37\ The Exchange is not
amending the rates it assesses Broker-Dealers for Singly Listed indexes
and equities. The rate for Singly Listed equities, ETFs and HOLDRs is
the same rate the Exchange assesses Broker-Dealers transacting
electronic Penny Pilot and non-Penny Pilot orders today.\38\ The
Exchange believes that assessing Customers a lower rate to transact
Singly Listed indexes is reasonable because it would increase Customer
order flow to the Exchange and such increased liquidity would benefit
all market participants.
---------------------------------------------------------------------------
\36\ See CBOE's Fees Schedule. CBOE also assesses a surcharge
fee of $0.10 for SPX which applies to all non-public customer
transactions, including voluntary professionals, and professionals.
\37\ See NYSE Arca's Fee Schedule. Presumably, this includes
options only listed on NYSE Arca.
\38\ See Section II of the Exchange's Fee Schedule.
---------------------------------------------------------------------------
Finally, the Exchange believes that assessing market makers a fee
of $.35 per contract for Singly Listed Currencies is reasonable because
it is lower than the fee of $.45 plus a royalty fee of $.10 per
contract that NYSE Arca assesses market makers that electronically
execute foreign currency options.\39\ The Exchange is not amending the
fees assessed on market makers transacting Singly Listed indexes. The
Exchange believes that it is reasonable to assess market makers a $.35
per contract fee for equities, ETFs and HOLDRs because NYSE Arca
assesses market makers $.45 per contract to electronically execute
Penny Pilot options.\40\
---------------------------------------------------------------------------
\39\ See NYSE Arca's Fee Schedule.
\40\ See NYSE Arca's Fee Schedule.
---------------------------------------------------------------------------
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.
[[Page 16650]]
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.\41\ 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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\41\ 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-2011-34 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-2011-34. 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 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 offices
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-2011-34, and should be submitted on or before April 14, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\42\
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\42\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-6908 Filed 3-23-11; 8:45 am]
BILLING CODE 8011-01-P
