Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to a Service Fee on QCC Orders and Floor QCC Orders, 44640-44642 [2011-18822]

Download as PDF 44640 Federal Register / Vol. 76, No. 143 / Tuesday, July 26, 2011 / Notices specified in the Exchange’s Fee Schedule.13 As part of this filing, we propose to retain the Trade Processing Fee charged to Participants for the clearing submission service. (B) institute proceedings to determine whether the proposed rule change should be disapproved. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act in general,14 and furthers the objectives of Section 6(b)(5) in particular,15 in that it is designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transaction in securities, to remove impediments and perfect the mechanisms of a free and open market, and, in general, to protect investors and the public interest by setting forth the rules and principles governing the submission of clearing information to a Qualified Clearing Agency. By facilitating the submission for both CHX and non-CHX executed trades, the Exchange is providing a safe, reliable means of submitting such information to a Qualified Clearing Agency, responding to the preferences of certain Participants to have CHX make such clearing-related submissions, and introducing competition with other exchanges, such as Nasdaq, which provide similar services. 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: B. Self-Regulatory Organization’s Statement of Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. sroberts on DSK5SPTVN1PROD with NOTICES C. Self-Regulatory Organization’s Statement on Comments Regarding the Proposed Rule Changes Received From Members, Participants or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Changes and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or within such longer period up to 90 days (i) As the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) by order approve or disapprove the proposed rule change, or 13 Proposed Article 21, Rule 6(e). The Trade Processing Fees are specified in Section E.7. of the CHX Schedule of Fees and Assessments. 14 15 U.S.C. 78f(b). 15 15 U.S.C. 78f(b)(5). VerDate Mar<15>2010 16:12 Jul 25, 2011 Jkt 223001 IV. Solicitation of Comments 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–CHX–2011–17 on the subject line. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Elizabeth M. Murphy, Secretary. [FR Doc. 2011–18816 Filed 7–25–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–64938; File No. SR–Phlx– 2011–93] Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to a Service Fee on QCC Orders and Floor QCC Orders July 20, 2011. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1, and Rule 19b–42 thereunder, • Send paper comments in triplicate notice is hereby given that, on July 11, to Elizabeth M. Murphy, Secretary, 2011, NASDAQ OMX PHLX LLC Securities and Exchange Commission, (‘‘Phlx’’ or ‘‘Exchange’’) filed with the 100 F Street, NE., Washington, DC Securities and Exchange Commission 20549–1090. (‘‘SEC’’ or ‘‘Commission’’) the proposed All submissions should refer to File rule change as described in Items I, II, Number SR–CHX–2011–17. This file and III below, which Items have been number should be included on the prepared by the Exchange. The subject line if e-mail is used. To help the Commission is publishing this notice to Commission process and review your solicit comments on the proposed rule comments more efficiently, please use change from interested persons. only one method. The Commission will post all comments on the Commission’s I. Self-Regulatory Organization’s Statement of the Terms of Substance of Internet Web site (https://www.sec.gov/ the Proposed Rule Change rules/sro.shtml). Copies of the submission, all subsequent The Exchange proposes to amend its amendments, all written statements Fee Schedule to adopt a Service Fee of with respect to the proposed rule $0.05 per side for Qualified Contingent change that are filed with the Cross (‘‘QCC’’) Orders (electronic) 3 and Commission, and all written Floor QCC Orders.4 communications relating to the proposed rule change between the 16 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). Commission and any person, other than 2 17 CFR 240.19b–4. those that may be withheld from the 3 A QCC Order is comprised of an order to buy public in accordance with the or sell at least 1000 contracts that is identified as provisions of 5 U.S.C. 552, will be being part of a qualified contingent trade, as that available for Web site viewing and term is defined in Rule 1080(o)(3), coupled with a printing in the Commission’s Public contra-side order to buy or sell an equal number of contracts. The QCC Order must be executed at a Reference Room, 100 F Street, NE., price at or between the National Best Bid and Offer Washington, DC 20549, on official and be rejected if a Customer order is resting on the business days between the hours of 10 Exchange book at the same price. A QCC Order a.m. and 3 p.m. Copies of such filing shall only be submitted electronically from off the also will be available for inspection and floor to the PHLX XL II System. See Rule 1080(o). See also Securities Exchange Act Release No. 64249 copying at the principal office of CHX. (April 7, 2011), 76 FR 20773 (April 13, 2011) (SR– All comments received will be posted Phlx–2011–47) (a rule change to establish a QCC without change; the Commission does Order to facilitate the execution of stock/option Qualified Contingent Trades (‘‘QCTs’’) that satisfy not edit personal identifying the requirements of the trade through exemption in information from submissions. You connection with Rule 611(d) of the Regulation should submit only information that NMS). you wish to make publicly available. All 4 A Floor QCC Order must: (i) Be for at least 1,000 contracts, (ii) meet the six requirements of Rule submissions should refer to File 1080(o)(3) which are modeled on the QCT Number SR–CHX–2011–17 and should Exemption, (iii) be executed at a price at or between be submitted on or before August 16, the National Best Bid and Offer (‘‘NBBO’’); and (iv) 2011. be rejected if a Customer order is resting on the Paper Comments PO 00000 Frm 00071 Fmt 4703 Sfmt 4703 E:\FR\FM\26JYN1.SGM 26JYN1 Federal Register / Vol. 76, No. 143 / Tuesday, July 26, 2011 / Notices The text of the proposed rule change is available on the Exchange’s Web site at https://nasdaqtrader.com/ micro.aspx?id=PHLXRulefilings, at the principal office of the Exchange, at the Commission’s Public Reference Room, and on the Commission’s Web site at https://www.sec.gov. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose sroberts on DSK5SPTVN1PROD with NOTICES The purpose of the proposed rule change is to adopt a Service Fee for both QCC Orders (electronic) and Floor QCC Orders once a Firm reaches the Firm Related Equity Option Cap (‘‘Cap’’), which is described below. The Exchange proposes this Service Fee recognizing that the qualified contingent cross capability is a premium service offered by the Exchange. This Service Fee is proposed to recoup costs incurred by the Exchange to offer this capability including trade matching and processing, post trade allocation, submission for clearing and customer service activities related to trading activity on the Exchange. Firms are subject to a $75,000 Cap. Firm equity option transaction charges and QCC Transaction Fees, in the aggregate, for one billing month may not exceed the Cap per member organization when such members are trading in their own proprietary account. The Firm equity options transaction charges are waived for members executing facilitation orders pursuant to Exchange Rule 1064 when Exchange book at the same price. In order to satisfy the 1,000-contract requirement, a Floor QCC Order must be for 1,000 contracts and could not be, for example, two 500-contract orders or two 500contract legs. See Rule 1064(e). See also Securities Exchange Act Release No. 64688 (June 16, 2011), 76 FR 36606 (June 22, 2011) (SR–Phlx–2011–56) (a rule change to establish a qualified contingent cross order for execution on the floor of the Exchange). VerDate Mar<15>2010 16:12 Jul 25, 2011 Jkt 223001 such members are trading in their own proprietary account.5 The Exchange proposes to adopt a Service Fee of $0.05 per side once a Firm has reached the Cap. This $0.05 per side Service Fee will apply to every contract side of a QCC Order (electronic) and Floor QCC Order that is executed once a Firm has reached the Cap in a particular calendar month. A Firm that does not reach the Cap in a particular calendar month will not be assessed the Service Fee in that month. The Exchange proposes to add text to Section II of the Fee Schedule entitled ‘‘Equity Options Fees’’ to describe the Service Fee. The Exchange also proposes to add a clarifying sentence to Section II of the Fee Schedule to clarify that QCC Transaction Fees are included in the monthly calculation of the Cap.6 2. Statutory Basis The Exchange believes that its proposal to amend its Fee Schedule is consistent with Section 6(b) of the Act 7 in general, and furthers the objectives of Section 6(b)(4) of the Act 8 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 Service Fee is reasonable because Firms have the ability to cap fees and even with the added Service Fee, Firms should generally pay less once they reach the Cap because they will not pay the normally applicable transaction fees. This Service Fee would reduce the discrepancy that exists today between Firms and other market participants. For example, Firms who reach the Cap in a particular month would pay the Service Fee instead of other normally applicable transaction fees as a result of reaching the Cap. As stated in the filing, the Service Fee does not apply to Firms who did not reach the Cap. Also, the Exchange believes that the Service Fee is reasonable because the fee would allow the Exchange to defray costs incurred in 5 In addition, Firms that (i) Are on the contra-side of an electronically-delivered and executed Customer complex order; and (ii) have reached the Cap will be assessed a $0.05 per contract fee. See Section II of the Exchange’s Fee Schedule. 6 See Securities Exchange Act Release No. 64520 (May 19, 2011), 76 FR 30223 (May 24, 2011) (SR– Phlx–2011–66) (a rule change to adopt fees applicable to a Qualified Contingent Cross Order) and SR–Phlx–2011–84 (an immediately effective proposed rule change to adopt fees applicable to a Floor Qualified Contingent Cross order). QCC Transaction Fees are defined in Section II of the Fee Schedule as applicable to QCC Orders, as defined in Exchange Rule 1080(o), and Floor QCC Orders, as defined in 1064(e). 7 15 U.S.C. 78f(b). 8 15 U.S.C. 78f(b)(4). PO 00000 Frm 00072 Fmt 4703 Sfmt 4703 44641 providing the qualified contingent cross capability in the form of QCC Orders (electronic) and Floor QCC Orders. Specifically, the Exchange is providing trade matching and processing, post trade allocation, submission for clearing and customer service activities related to trading activity on the Exchange. The Exchange also believes that the Service Fee is reasonable because it is comparable to a fee assessed by the International Securities Exchange, LLC (‘‘ISE’’). ISE assesses a $0.05 per side service fee for qualified contingent cross volume once a member reaches the monthly fee cap.9 The Exchange believes that the proposed Service Fee is equitable and not unfairly discriminatory because it would be uniformly applied to Firms in the same way that the Cap is uniformly available to these Firms. 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.10 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. 9 See ISE’s Schedule of Fees. See also Securities Exchange Act Release No. 64270 (April 8, 2011), 76 FR 20754 (April 13, 2011) (SR–ISE–2011–13). 10 15 U.S.C. 78s(b)(3)(A)(ii). E:\FR\FM\26JYN1.SGM 26JYN1 44642 Federal Register / Vol. 76, No. 143 / Tuesday, July 26, 2011 / Notices Comments may be submitted by any of the following methods: SECURITIES AND EXCHANGE COMMISSION Electronic Comments [Release No. 34–64931; File No. SR–ISE– 2011–41] • 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–2011–93 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. Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Extension of the Price Improvement Mechanism Pilot Program July 20, 2011. sroberts on DSK5SPTVN1PROD with NOTICES 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 July 13, 2011, the International Securities Exchange, LLC (the ‘‘Exchange’’ or the All submissions should refer to File ‘‘ISE’’) filed with the Securities and Number SR–Phlx–2011–93. This file Exchange Commission the proposed number should be included on the subject line if e-mail is used. To help the rule change as described in Items I and II below, which items have been Commission process and review your prepared by the ISE. The ISE has comments more efficiently, please use only one method. The Commission will designated the proposed rule change as post all comments on the Commission’s a ‘‘non-controversial’’ rule change pursuant to Section 19(b)(3)(A) of the Internet Web site (https://www.sec.gov/ Act 3 and Rule 19b–4(f)(6) thereunder,4 rules/sro.shtml). Copies of the which renders the proposed rule change submission, all subsequent effective upon filing with the amendments, all written statements Commission. The Commission is with respect to the proposed rule publishing this notice to solicit change that are filed with the comments on the proposed rule change Commission, and all written from interested persons. communications relating to the proposed rule change between the I. Self-Regulatory Organization’s Commission and any person, other than Statement of the Terms of Substance of those that may be withheld from the the Proposed Rule Change public in accordance with the The Exchange is proposing to extend provisions of 5 U.S.C. 552, will be two pilot programs related to its Price available for Web site viewing and Improvement Mechanism (‘‘PIM’’). The printing in the Commission’s Public text of the proposed rule amendment is Reference Room, 100 F Street, NE., as follows, with proposed deletions in Washington, DC 20549, on official [brackets], and proposed additions in business days between the hours of 10 a.m. and 3 p.m. Copies of the filing also italics: will be available for inspection and Rule 723. Price Improvement Mechanism for Crossing Transactions copying at the principal office of the Exchange. All comments received will * * * * * be posted without change; the Supplementary Material to Rule 723 Commission does not edit personal .01–.02 No Change. identifying information from .03 Initially, and for at least a Pilot Period submissions. You should submit only expiring on July 18, 2012 [July 18, 2011], information that you wish to make there will be no minimum size requirements available publicly. All submissions for orders to be eligible for the Price should refer to File Number SR–Phlx– Improvement Mechanism. During the Pilot 2011–93 and should be submitted on or Period, the Exchange will submit certain data, periodically as required by the August 16, 2011. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.11 Elizabeth M. Murphy, Secretary. Commission, to provide supporting evidence that, among other things, there is meaningful competition for all size orders within the Price Improvement Mechanism, that there is significant price improvement for all orders executed through the Price Improvement [FR Doc. 2011–18822 Filed 7–25–11; 8:45 am] 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(6). BILLING CODE 8011–01–P 11 17 2 17 CFR 200.30–3(a)(12). VerDate Mar<15>2010 16:12 Jul 25, 2011 Jkt 223001 PO 00000 Frm 00073 Fmt 4703 Sfmt 4703 Mechanism, and that there is an active and liquid market functioning on the Exchange outside of the Price Improvement Mechanism. Any data which is submitted to the Commission will be provided on a confidential basis. .04 No Change. .05 Paragraphs (c)(5), (d)(5) and (d)(6) will be effective for a Pilot Period expiring on July 18, 2012 [July 18, 2011]. During the Pilot Period, the Exchange will submit certain data relating to the frequency with which the exposure period is terminated by unrelated orders. Any data which is submitted to the Commission will be provided on a confidential basis. .06–.07 No Change. * * * * * 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 self-regulatory organization 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 self-regulatory organization 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 Exchange currently has two pilot programs related to its PIM.5 The current pilot period provided in paragraphs .03 and .05 of the Supplementary Material to Rule 723 is 5 See Securities Exchange Act Release Nos. 50819 (December 8, 2004), 69 FR 75093 (December 15, 2004) (Approving the PIM pilot (the ‘‘Approval Order’’)); 52027 (July 13, 2005), 70 FR 41804 (July 20, 2005) Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to a One-Year Pilot Extension for the Price Improvement Mechanism); 54146 (July 14, 2006), 71 FR 41490 (July 21, 2006) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to a One-Year Pilot Extension Until July 18, 2007 for the Price Improvement Mechanism); 56106 (July 19, 2007), 72 FR 40914 (July 25, 2007) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to a One-Week Extension for the Price Improvement Mechanism Pilot Program); and 56156 (July 27, 2007), 72 FR 43305 (August 3, 2007) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to an Extension for the Price Improvement Mechanism Pilot Program); 58197 (July 18, 2008), 73 FR 43810 (July 28, 2008) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Extension of the Price Improvement Mechanism Pilot Program); and 60333 (July 17, 2009), 74 FR 36792 (July 24, 2009) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Extension of the Price Improvement Mechanism Pilot Program). E:\FR\FM\26JYN1.SGM 26JYN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 76, Number 143 (Tuesday, July 26, 2011)]
[Notices]
[Pages 44640-44642]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-18822]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64938; File No. SR-Phlx-2011-93]

Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
a Service Fee on QCC Orders and Floor QCC Orders

July 20, 2011.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\, and Rule 19b-4\2\ thereunder, notice is hereby given
that, on July 11, 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 adopt a Service
Fee of $0.05 per side for Qualified Contingent Cross (``QCC'') Orders
(electronic) \3\ and Floor QCC Orders.\4\
---------------------------------------------------------------------------

\3\ A QCC Order is comprised of an order to buy or sell at least
1000 contracts that is identified as being part of a qualified
contingent trade, as that term is defined in Rule 1080(o)(3),
coupled with a contra-side order to buy or sell an equal number of
contracts. The QCC Order must be executed at a price at or between
the National Best Bid and Offer and be rejected if a Customer order
is resting on the Exchange book at the same price. A QCC Order shall
only be submitted electronically from off the floor to the PHLX XL
II System. See Rule 1080(o). See also Securities Exchange Act
Release No. 64249 (April 7, 2011), 76 FR 20773 (April 13, 2011) (SR-
Phlx-2011-47) (a rule change to establish a QCC Order to facilitate
the execution of stock/option Qualified Contingent Trades (``QCTs'')
that satisfy the requirements of the trade through exemption in
connection with Rule 611(d) of the Regulation NMS).
\4\ A Floor QCC Order must: (i) Be for at least 1,000 contracts,
(ii) meet the six requirements of Rule 1080(o)(3) which are modeled
on the QCT Exemption, (iii) be executed at a price at or between the
National Best Bid and Offer (``NBBO''); and (iv) be rejected if a
Customer order is resting on the Exchange book at the same price. In
order to satisfy the 1,000-contract requirement, a Floor QCC Order
must be for 1,000 contracts and could not be, for example, two 500-
contract orders or two 500-contract legs. See Rule 1064(e). See also
Securities Exchange Act Release No. 64688 (June 16, 2011), 76 FR
36606 (June 22, 2011) (SR-Phlx-2011-56) (a rule change to establish
a qualified contingent cross order for execution on the floor of the
Exchange).

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[[Page 44641]]

The text of the proposed rule change is available on the Exchange's
Web site at https://nasdaqtrader.com/micro.aspx?id=PHLXRulefilings, at
the principal office of the Exchange, at the Commission's Public
Reference Room, and on the Commission's Web site at https://www.sec.gov.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
The purpose of the proposed rule change is to adopt a Service Fee
for both QCC Orders (electronic) and Floor QCC Orders once a Firm
reaches the Firm Related Equity Option Cap (``Cap''), which is
described below. The Exchange proposes this Service Fee recognizing
that the qualified contingent cross capability is a premium service
offered by the Exchange. This Service Fee is proposed to recoup costs
incurred by the Exchange to offer this capability including trade
matching and processing, post trade allocation, submission for clearing
and customer service activities related to trading activity on the
Exchange.
Firms are subject to a $75,000 Cap. Firm equity option transaction
charges and QCC Transaction Fees, in the aggregate, for one billing
month may not exceed the Cap per member organization when such members
are trading in their own proprietary account. The Firm equity options
transaction charges are waived for members executing facilitation
orders pursuant to Exchange Rule 1064 when such members are trading in
their own proprietary account.\5\
---------------------------------------------------------------------------

\5\ In addition, Firms that (i) Are on the contra-side of an
electronically-delivered and executed Customer complex order; and
(ii) have reached the Cap will be assessed a $0.05 per contract fee.
See Section II of the Exchange's Fee Schedule.
---------------------------------------------------------------------------

The Exchange proposes to adopt a Service Fee of $0.05 per side once
a Firm has reached the Cap. This $0.05 per side Service Fee will apply
to every contract side of a QCC Order (electronic) and Floor QCC Order
that is executed once a Firm has reached the Cap in a particular
calendar month. A Firm that does not reach the Cap in a particular
calendar month will not be assessed the Service Fee in that month. The
Exchange proposes to add text to Section II of the Fee Schedule
entitled ``Equity Options Fees'' to describe the Service Fee. The
Exchange also proposes to add a clarifying sentence to Section II of
the Fee Schedule to clarify that QCC Transaction Fees are included in
the monthly calculation of the Cap.\6\
---------------------------------------------------------------------------

\6\ See Securities Exchange Act Release No. 64520 (May 19,
2011), 76 FR 30223 (May 24, 2011) (SR-Phlx-2011-66) (a rule change
to adopt fees applicable to a Qualified Contingent Cross Order) and
SR-Phlx-2011-84 (an immediately effective proposed rule change to
adopt fees applicable to a Floor Qualified Contingent Cross order).
QCC Transaction Fees are defined in Section II of the Fee Schedule
as applicable to QCC Orders, as defined in Exchange Rule 1080(o),
and Floor QCC Orders, as defined in 1064(e).
---------------------------------------------------------------------------

2. Statutory Basis
The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \7\ in general, and furthers
the objectives of Section 6(b)(4) of the Act \8\ in particular, in that
it is an equitable allocation of reasonable fees and other charges
among Exchange members and other persons using its facilities.
---------------------------------------------------------------------------

\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

The Exchange believes that the proposed Service Fee is reasonable
because Firms have the ability to cap fees and even with the added
Service Fee, Firms should generally pay less once they reach the Cap
because they will not pay the normally applicable transaction fees.
This Service Fee would reduce the discrepancy that exists today between
Firms and other market participants. For example, Firms who reach the
Cap in a particular month would pay the Service Fee instead of other
normally applicable transaction fees as a result of reaching the Cap.
As stated in the filing, the Service Fee does not apply to Firms who
did not reach the Cap. Also, the Exchange believes that the Service Fee
is reasonable because the fee would allow the Exchange to defray costs
incurred in providing the qualified contingent cross capability in the
form of QCC Orders (electronic) and Floor QCC Orders. Specifically, the
Exchange is providing trade matching and processing, post trade
allocation, submission for clearing and customer service activities
related to trading activity on the Exchange. The Exchange also believes
that the Service Fee is reasonable because it is comparable to a fee
assessed by the International Securities Exchange, LLC (``ISE''). ISE
assesses a $0.05 per side service fee for qualified contingent cross
volume once a member reaches the monthly fee cap.\9\
---------------------------------------------------------------------------

\9\ See ISE's Schedule of Fees. See also Securities Exchange Act
Release No. 64270 (April 8, 2011), 76 FR 20754 (April 13, 2011) (SR-
ISE-2011-13).
---------------------------------------------------------------------------

The Exchange believes that the proposed Service Fee is equitable
and not unfairly discriminatory because it would be uniformly applied
to Firms in the same way that the Cap is uniformly available to these
Firms.

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.\10\ 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.
---------------------------------------------------------------------------

\10\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

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.

[[Page 44642]]

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-2011-93 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-2011-93. 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-2011-93 and should be
submitted on or August 16, 2011.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-18822 Filed 7-25-11; 8:45 am]
BILLING CODE 8011-01-P

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