Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NASDAQ OMX PHLX LLC Relating to the Options Floor Broker Subsidy, 42143-42145 [2011-17911]
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srobinson on DSK4SPTVN1PROD with NOTICES
Federal Register / Vol. 76, No. 137 / Monday, July 18, 2011 / Notices
disclosure contemplated by condition 2
below, by the initial shareholder(s)
before offering shares of the MultiManager Fund to the public.
2. Each Multi-Manager Fund relying
on the requested order will disclose in
its prospectus the existence, substance,
and effect of any order granted pursuant
to the application. In addition, each
Multi-Manager Fund will hold itself out
to the public as employing the manager
of managers structure described in the
application. The prospectus will
prominently disclose that the Adviser
has ultimate responsibility (subject to
oversight by the Board) to oversee SubAdvisers and recommend their hiring,
termination and replacement.
3. Within 90 days of the hiring of any
new Sub-Adviser, shareholders of the
affected Multi-Manager Fund will be
furnished all of the information about
the new Sub-Adviser that would be
included in a proxy statement. To meet
this obligation the Multi-Manager Fund
will, within 90 days of hiring a new
Sub-Adviser, provide shareholders of
the affected Multi-Manager Fund with
an information statement meeting the
requirements of Regulation 14C,
Schedule 14C and Item 22 of Schedule
14A under the Securities Exchange Act
of 1934, as amended.
4. The Adviser will not enter into a
sub-advisory agreement with any
Affiliated Sub-Adviser without such
agreement, including the compensation
to be paid thereunder, being approved
by the shareholders of the applicable
Multi-Manager Fund.
5. At all times, at least a majority of
the Board will be Independent Trustees,
and the nomination of new or additional
Independent Trustees will be at the
discretion of the then existing
Independent Trustees.
6. When a change of Sub-Adviser is
proposed for a Multi-Manager Fund
with an Affiliated Sub-Adviser, the
Board, including a majority of the
Independent Trustees, will make a
separate finding, reflected in the Board
minutes, that such change is in the best
interests of the Multi-Manager Fund and
its shareholders and does not involve a
conflict of interest from which the
Adviser or an Affiliated Sub-Adviser
derives an inappropriate advantage.
7. The Adviser will provide general
management services to each MultiManager Fund, including overall
supervisory responsibility for the
general management and investment of
the Multi-Manager Fund’s assets, and,
subject to review and approval by the
Board, will: (i) set the Multi-Manager
Fund’s overall investment strategies; (ii)
evaluate, select and recommend SubAdvisers to manage all or a part of the
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Multi-Manager Fund’s assets; (iii) when
appropriate, allocate and reallocate the
Multi-Manager Fund’s assets among
multiple Sub-Advisers; (iv) monitor and
evaluate the Sub-Advisers’ performance;
and (v) implement procedures
reasonably designed to ensure that the
Sub-Advisers comply with the MultiManager Fund’s investment objectives,
policies and restrictions.
8. No trustee or officer of a MultiManager Fund or director or officer of
the Adviser will own directly or
indirectly (other than through a pooled
investment vehicle that is not controlled
by such person) any interest in a SubAdviser, except for: (i) ownership of
interests in the Adviser or any entity
that controls, is controlled by or is
under common control with the
Adviser; or (ii) ownership of less than
1% of the outstanding securities of any
class of equity or debt of a publiclytraded company that is either a SubAdviser or an entity that controls, is
controlled by, or is under common
control with a Sub-Adviser.
9. In the event the Commission adopts
a rule under the Act providing
substantially similar relief to that in the
order requested in the application, the
requested order will expire on the
effective date of that rule.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011–17956 Filed 7–15–11; 8:45 am]
BILLING CODE 8011–01–P
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Sunshine Act Meeting
Federal Register Citation of Previous
Announcement: [76 FR 40948, July
12, 2011].
STATUS: Closed Meeting.
PLACE: 100 F Street, NW., Washington,
DC.
DATE AND TIME OF PREVIOUSLY ANNOUNCED
MEETING: July 14, 2011 at 2 p.m.
Deletion of
Items.
The following items will not be
considered during the Closed Meeting
on Thursday, July 14, 2011:
Adjudicatory Matters.
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:
PO 00000
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42143
Dated: July 14, 2011.
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011–18067 Filed 7–14–11; 11:15 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meeting
Federal Register Citation of Previous
Announcement: [76 FR 41534, July 14,
2011].
STATUS:
PLACE:
Open Meeting.
100 F Street, NE., Washington,
DC.
DATE AND TIME OF PREVIOUSLY ANNOUNCED
MEETING: Thursday, July 14, 2011.
Cancellation of
Meeting.
The Open Meeting scheduled for
Thursday, July 14, 2011 at 10 a.m. has
been cancelled.
For further information please contact
the Office of the Secretary at (202) 551–
5400.
CHANGE IN THE MEETING:
Dated: July 13, 2011.
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011–18051 Filed 7–14–11; 11:15 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–64863; File No. SR–Phlx–
2011–94]
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change by NASDAQ
OMX PHLX LLC Relating to the
Options Floor Broker Subsidy
July 12, 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 June 30,
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
2 17
E:\FR\FM\18JYN1.SGM
U.S.C. 78s(b)(1).
CFR 240.19b–4.
18JYN1
42144
Federal Register / Vol. 76, No. 137 / Monday, July 18, 2011 / Notices
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Section VII of its Fee Schedule entitled
the ‘‘Options Floor Broker Subsidy.’’
The Exchange also proposes to make
an amendment to Section III of the Fee
Schedule entitled ‘‘Singly Listed
Options.’’
While changes to the Fee Schedule
pursuant to this proposal are effective
upon filing, the Exchange has
designated these changes to be operative
on July 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
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 computation for
eligible contracts. The Exchange
proposes to amend the eligible contract
computation to limit the eligible
contracts where a Firm is also obtaining
the benefit of the Firm Related Equity
Option Cap (‘‘Cap’’).3 The Exchange
believes that the benefit of the Cap
should be taken into account in the
eligible contract computation.
The Exchange currently pays an
Options Floor Broker Subsidy
(‘‘Subsidy’’) to member organizations
with Exchange registered floor brokers
that enter eligible contracts into the
Exchange’s Floor Broker Management
System (‘‘FBMS’’).4 The Subsidy is paid
based on the contract volume on
Customer-to-non-Customer as well as
non-Customer-to-non-Customer
transactions for that month. Only the
volume from orders entered by floor
brokers into FBMS and subsequently
executed on the Exchange qualifies. The
Exchange pays a Subsidy based on a
monthly total of all eligible contracts as
follows:
PER ELIGIBLE CONTRACT MONTHLY VOLUME SUBSIDY PAYMENT
Tier I
Tier II
Tier III
Tier IV
0 to 1,250,000 ................................
$0.00 per contract ..........................
1,250,001 to 2,250,000 ................
$0.03 per contract ........................
2,250,001 to 5,250,000 ................
$0.05 per contract ........................
5,250,001 and greater.
$0.09 per contract.
srobinson on DSK4SPTVN1PROD with NOTICES
In computing the monthly eligible
contracts, the Exchange currently
excludes: (i) Customer-to-Customer
executions; (ii) dividend,5 merger 6 and
short stock interest 7 strategies; and (iii)
firm facilitation transactions.8 The
Subsidy applies to contracts that are
executed as part of a Complex Order.9
Where two or more member
organizations with Exchange registered
floor brokers each enter one side of a
transaction into FBMS, the executed
contracts are divided equally among
qualifying member organizations that
participate in that transaction.
The Exchange is proposing to amend
the computation of eligible contracts to
also exclude: (i) Firm-to-Customer
executions, where the Firm has reached
the Cap; and (ii) Firm-to-Firm
executions, where both sides have
reached the Cap. The Exchange also
proposes to amend Section VII to
capitalize the word ‘‘Customer’’ and
make other technical amendments.
Additionally, the Exchange is
proposing to amend Section III of the
Fee Schedule entitled ‘‘Singly Listed
Options.’’ Specifically, the Exchange
proposes to remove the list of Alpha
Index Options symbols (‘‘Alpha
Symbols’’). The Alpha Symbols are
subject to change.10 The Exchange
provides a list of Alpha Symbols, which
are subject to the Alpha Index Options
Fee, at https://
3 The Firm Related Equity Option Cap is currently
$75,000. Firm equity option transaction charges and
QCC Transaction Fees, in the aggregate, for one
billing month will not exceed the Firm Related
Equity Option Cap per member organization when
such members are trading in their own proprietary
account. The Firm equity options transaction
charges will be waived for members executing
facilitation orders pursuant to Exchange Rule 1064
when such members are trading in their own
proprietary account. Members and member
organizations must notify the Exchange in writing
of all accounts in which the member is not trading
in its own proprietary account. The Exchange will
not make adjustments to billing invoices where
transactions are commingled in accounts which are
not subject to the Firm Related Equity Option Cap.
In addition, Firms that (i) Are on the contra-side of
an electronically-delivered and executed Customer
complex order; and (ii) have reached the Firm
Related Equity Option Cap will be assessed a $0.05
per contract fee. See Section II of the Exchange’s
Fee Schedule.
4 FBMS is designed to enable floor brokers and/
or their employees to enter, route, and report
transactions stemming from options orders received
on the Exchange. FBMS also is designed to establish
an electronic audit trail for options orders
represented and executed by floor brokers on the
Exchange. See Exchange Rule 1080, commentary
.06.
5 A dividend strategy is defined as transactions
done to achieve a dividend arbitrage involving the
purchase, sale and exercise of in-the-money options
of the same class, executed the first business day
prior to the date on which the underlying stock goes
ex-dividend. See Section II of the Fee Schedule.
6 A merger strategy is defined as transactions
done to achieve a merger arbitrage involving the
purchase, sale and exercise of options of the same
class and expiration date, executed the first
business day prior to the date on which
shareholders of record are required to elect their
respective form of consideration, i.e., cash or stock.
See Section II of the Fee Schedule.
7 A short stock interest strategy is defined as
transactions done to achieve a short stock interest
arbitrage involving the purchase, sale and exercise
of in-the-money options of the same class. See
Section II of the Fee Schedule.
8 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.
9 A Complex Order 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). See
Exchange Rule 1080, Commentary .08(a)(i).
10 The Exchange would file a proposed rule
change with the Commission each time it proposes
to amend the Alpha Symbols which are subject to
the Alpha Index Options Fee in Section III of the
Fee Schedule.
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Federal Register / Vol. 76, No. 137 / Monday, July 18, 2011 / Notices
www.nasdaqomxtrader.com/
Micro.aspx?id=Alpha.
While changes to the Fee Schedule
pursuant to this proposal are effective
upon filing, the Exchange has
designated these changes to be operative
on July 1, 2011.
2. Statutory Basis
The Exchange believes that its
proposal to amend its Fee Schedule is
consistent with Section 6(b) of the Act 11
in general, and furthers the objectives of
Section 6(b)(4) of the Act 12 in
particular, in that it is an equitable
allocation of reasonable fees and other
charges among Exchange members.
The Exchange believes that the
proposed amendments to the Subsidy
are equitable and reasonable because
member organizations with Exchange
registered floor brokers would continue
to be provided an equal opportunity to
receive a Subsidy. The Exchange
believes that amending the computation
to exclude Firm-to-Customer executions
and Firm-to-Firm executions where the
Firm sides have reached the Cap is
reasonable because the Exchange would
not be paying a Subsidy on executions
that incur no transaction fees. In
addition, the Exchange believes that
amending the computation to exclude
Firm-to-Customer executions and Firmto-Firm executions where the Firm sides
have reached the Firm Related Equity
Option Cap is equitable because the
exclusions apply uniformly to all
member organizations. Finally, the
Exchange does not believe that this
Subsidy is unreasonable or
discriminatory because any floor broker
is afforded the opportunity of meeting
the volume criteria.
The Exchange believes that its
proposal to amend Section III of the Fee
Schedule to remove the list of Alpha
Symbols is both reasonable and
equitable because the list of symbols is
readily available on the Exchange’s Web
site. Since the Alpha Symbols are
subject to change, the Exchange believes
that the list of current symbols on the
Exchange’s Web site is the most
appropriate and current source of
information for the complete list of
Alpha Symbols subject to the Alpha
Index Options Fee.13
srobinson on DSK4SPTVN1PROD with NOTICES
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
11 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4).
13 This list is kept up to date and current with any
rule changes that are filed with the Commission.
12 15
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16:43 Jul 15, 2011
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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.14 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:
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–2011–94 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–2011–94. 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
PO 00000
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official
business days between the hours of
10 a.m. and 3 p.m. Copies of 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–2011–94 and should
be submitted on or before August 8,
2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011–17911 Filed 7–15–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–64861; File No. SR–ISE–
2011–38]
Self-Regulatory Organizations;
International Securities Exchange,
LLC; Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change Relating to a Market Maker
Incentive Plan for Foreign Currency
Options
July 12, 2011.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on June 30,
2011, the International Securities
Exchange, LLC (the ‘‘Exchange’’ or the
‘‘ISE’’) filed with the Securities and
Exchange Commission the proposed
rule change, as described in Items I and
II below, which items have been
prepared by the self-regulatory
organization. The Commission is
publishing this notice to solicit
15 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
14 15
U.S.C. 78s(b)(3)(A)(ii).
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Agencies
[Federal Register Volume 76, Number 137 (Monday, July 18, 2011)]
[Notices]
[Pages 42143-42145]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-17911]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64863; File No. SR-Phlx-2011-94]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by NASDAQ OMX PHLX LLC Relating
to the Options Floor Broker Subsidy
July 12, 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 June 30, 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.
---------------------------------------------------------------------------
[[Page 42144]]
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Section VII of its Fee Schedule
entitled the ``Options Floor Broker Subsidy.''
The Exchange also proposes to make an amendment to Section III of
the Fee Schedule entitled ``Singly Listed Options.''
While changes to the Fee Schedule pursuant to this proposal are
effective upon filing, the Exchange has designated these changes to be
operative on July 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 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 computation
for eligible contracts. The Exchange proposes to amend the eligible
contract computation to limit the eligible contracts where a Firm is
also obtaining the benefit of the Firm Related Equity Option Cap
(``Cap'').\3\ The Exchange believes that the benefit of the Cap should
be taken into account in the eligible contract computation.
---------------------------------------------------------------------------
\3\ The Firm Related Equity Option Cap is currently $75,000.
Firm equity option transaction charges and QCC Transaction Fees, in
the aggregate, for one billing month will not exceed the Firm
Related Equity Option Cap per member organization when such members
are trading in their own proprietary account. The Firm equity
options transaction charges will be waived for members executing
facilitation orders pursuant to Exchange Rule 1064 when such members
are trading in their own proprietary account. Members and member
organizations must notify the Exchange in writing of all accounts in
which the member is not trading in its own proprietary account. The
Exchange will not make adjustments to billing invoices where
transactions are commingled in accounts which are not subject to the
Firm Related Equity Option Cap. In addition, Firms that (i) Are on
the contra-side of an electronically-delivered and executed Customer
complex order; and (ii) have reached the Firm Related Equity Option
Cap will be assessed a $0.05 per contract fee. See Section II of the
Exchange's Fee Schedule.
---------------------------------------------------------------------------
The Exchange currently pays an Options Floor Broker Subsidy
(``Subsidy'') to member organizations with Exchange registered floor
brokers that enter eligible contracts into the Exchange's Floor Broker
Management System (``FBMS'').\4\ The Subsidy is paid based on the
contract volume on Customer-to-non-Customer as well as non-Customer-to-
non-Customer transactions for that month. Only the volume from orders
entered by floor brokers into FBMS and subsequently executed on the
Exchange qualifies. The Exchange pays a Subsidy based on a monthly
total of all eligible contracts as follows:
---------------------------------------------------------------------------
\4\ FBMS is designed to enable floor brokers and/or their
employees to enter, route, and report transactions stemming from
options orders received on the Exchange. FBMS also is designed to
establish an electronic audit trail for options orders represented
and executed by floor brokers on the Exchange. See Exchange Rule
1080, commentary .06.
Per Eligible Contract Monthly Volume Subsidy Payment
----------------------------------------------------------------------------------------------------------------
Tier I Tier II Tier III Tier IV
----------------------------------------------------------------------------------------------------------------
0 to 1,250,000....................... 1,250,001 to 2,250,000. 2,250,001 to 5,250,000. 5,250,001 and greater.
$0.00 per contract................... $0.03 per contract..... $0.05 per contract..... $0.09 per contract.
----------------------------------------------------------------------------------------------------------------
In computing the monthly eligible contracts, the Exchange currently
excludes: (i) Customer-to-Customer executions; (ii) dividend,\5\ merger
\6\ and short stock interest \7\ strategies; and (iii) firm
facilitation transactions.\8\ The Subsidy applies to contracts that are
executed as part of a Complex Order.\9\ Where two or more member
organizations with Exchange registered floor brokers each enter one
side of a transaction into FBMS, the executed contracts are divided
equally among qualifying member organizations that participate in that
transaction.
---------------------------------------------------------------------------
\5\ A dividend strategy is defined as transactions done to
achieve a dividend arbitrage involving the purchase, sale and
exercise of in-the-money options of the same class, executed the
first business day prior to the date on which the underlying stock
goes ex-dividend. See Section II of the Fee Schedule.
\6\ A merger strategy is defined as transactions done to achieve
a merger arbitrage involving the purchase, sale and exercise of
options of the same class and expiration date, executed the first
business day prior to the date on which shareholders of record are
required to elect their respective form of consideration, i.e., cash
or stock. See Section II of the Fee Schedule.
\7\ A short stock interest strategy is defined as transactions
done to achieve a short stock interest arbitrage involving the
purchase, sale and exercise of in-the-money options of the same
class. See Section II of the Fee Schedule.
\8\ A facilitation occurs when a floor broker holds an options
order for a public customer and a contra-side 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.
\9\ A Complex Order 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). See Exchange Rule 1080, Commentary .08(a)(i).
---------------------------------------------------------------------------
The Exchange is proposing to amend the computation of eligible
contracts to also exclude: (i) Firm-to-Customer executions, where the
Firm has reached the Cap; and (ii) Firm-to-Firm executions, where both
sides have reached the Cap. The Exchange also proposes to amend Section
VII to capitalize the word ``Customer'' and make other technical
amendments.
Additionally, the Exchange is proposing to amend Section III of the
Fee Schedule entitled ``Singly Listed Options.'' Specifically, the
Exchange proposes to remove the list of Alpha Index Options symbols
(``Alpha Symbols''). The Alpha Symbols are subject to change.\10\ The
Exchange provides a list of Alpha Symbols, which are subject to the
Alpha Index Options Fee, at https://
[[Page 42145]]
www.nasdaqomxtrader.com/Micro.aspx?id=Alpha.
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\10\ The Exchange would file a proposed rule change with the
Commission each time it proposes to amend the Alpha Symbols which
are subject to the Alpha Index Options Fee in Section III of the Fee
Schedule.
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While changes to the Fee Schedule pursuant to this proposal are
effective upon filing, the Exchange has designated these changes to be
operative on July 1, 2011.
2. Statutory Basis
The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \11\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \12\ in
particular, in that it is an equitable allocation of reasonable fees
and other charges among Exchange members.
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\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that the proposed amendments to the Subsidy
are equitable and reasonable because member organizations with Exchange
registered floor brokers would continue to be provided an equal
opportunity to receive a Subsidy. The Exchange believes that amending
the computation to exclude Firm-to-Customer executions and Firm-to-Firm
executions where the Firm sides have reached the Cap is reasonable
because the Exchange would not be paying a Subsidy on executions that
incur no transaction fees. In addition, the Exchange believes that
amending the computation to exclude Firm-to-Customer executions and
Firm-to-Firm executions where the Firm sides have reached the Firm
Related Equity Option Cap is equitable because the exclusions apply
uniformly to all member organizations. Finally, the Exchange does not
believe that this Subsidy is unreasonable or discriminatory because any
floor broker is afforded the opportunity of meeting the volume
criteria.
The Exchange believes that its proposal to amend Section III of the
Fee Schedule to remove the list of Alpha Symbols is both reasonable and
equitable because the list of symbols is readily available on the
Exchange's Web site. Since the Alpha Symbols are subject to change, the
Exchange believes that the list of current symbols on the Exchange's
Web site is the most appropriate and current source of information for
the complete list of Alpha Symbols subject to the Alpha Index Options
Fee.\13\
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\13\ This list is kept up to date and current with any rule
changes that are filed with the Commission.
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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.\14\ 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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\14\ 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-2011-94 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-2011-94. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of 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-2011-94 and
should be submitted on or before August 8, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-17911 Filed 7-15-11; 8:45 am]
BILLING CODE 8011-01-P