Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Active SQF Port Fee and the Order Entry Port Fee, 54279-54281 [2011-22219]
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Federal Register / Vol. 76, No. 169 / Wednesday, August 31, 2011 / Notices
pursuant to the Regulatory Contract,
however, BX retains ultimate
responsibility for enforcing its rules
with respect to NOS, except to the
extent they are covered by an agreement
with FINRA pursuant to Rule 17d–2
under the Act (‘‘17d–2 Agreement’’),19
in which case FINRA is allocated
regulatory responsibility.
• Second, FINRA and BX will
monitor NOS for compliance with the
Exchange’s trading rules, and will
collect and maintain certain related
information.20
• Third, FINRA will provide a report
to the BOXR’s chief regulatory officer
(‘‘CRO’’), on a quarterly basis, that: (i)
Quantifies all alerts (of which FINRA is
aware) that identify NES as a participant
that has potentially violated
Commission or Exchange rules, and (ii)
lists all investigations that identify NES
as a participant that has potentially
violated Commission or Exchange
rules.21
• Fourth, the Exchange has adopted
Chapter XXXIX, Section 2(c) of the
Grandfathered Rules of the Exchange,
which requires NASDAQ OMX, as the
holding company owning NOS and
affiliated with BOX through the
ownership of the Exchange, to establish
and maintain procedures and internal
controls reasonably designed to ensure
that NOS does not develop or
implement changes to its system, based
on non-public information obtained
regarding planned changes to the
Exchange’s systems as a result of its
affiliation with the Exchange, until such
information is available generally to
similarly situated Exchange members, in
connection with the provision of
inbound order routing to the
Exchange.22
• Fifth, NOS was authorized to route
NOM Exchange Direct Orders without
checking the NOM book, and orders in
NOM non-system securities, inbound to
the Exchange from NOM for a pilot
period of twelve months, which was
19 17
CFR 240.17d–2.
to the Regulatory Contract, both
FINRA and the Exchange will collect and maintain
all alerts, complaints, investigations and
enforcement actions in which NOS (in its capacity
as a facility of Nasdaq routing orders to BOX) is
identified as a participant that has potentially
violated applicable Commission or Exchange rules.
The Exchange and FINRA will retain these records
in an easily accessible manner in order to facilitate
any potential review conducted by the
Commission’s Office of Compliance Inspections and
Examinations. See Notice, 76 FR at 43741, n.10.
21 See id.
22 See chapter XXXIX, Section 2(c) of the
Grandfathered Rules of the Exchange. See also
Notice, 76 FR at 43741.
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20 Pursuant
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subsequently extended to September 15,
2011.23
The Exchange believes that by meeting
the above-listed conditions it has set up
mechanisms that protect the
independence of the Exchange’s
regulatory responsibility with respect to
NOS, and has demonstrated that NOS
cannot use any information advantage it
may have because of its affiliation with
the Exchange.24
In the past, the Commission has
expressed concern that the affiliation of
an exchange with one of its members
raises potential conflicts of interest, and
the potential for unfair competitive
advantage.25 Although the Commission
continues to be concerned about
potential unfair competition and
conflicts of interest between an
exchange’s self-regulatory obligations
and its commercial interest when the
exchange is affiliated with one of its
members, for the reasons discussed
below, the Commission believes that it
is consistent with the Act to permit NOS
to provide inbound routing to the
Exchange on a permanent basis instead
of a pilot basis, subject to the other
conditions described above.
The Exchange has proposed four
ongoing conditions applicable to NOS’s
routing activities, which are enumerated
above. The Commission believes that
these conditions mitigate its concerns
about potential conflicts of interest and
unfair competitive advantage. In
particular, the Commission believes that
FINRA’s oversight of NOS,26 combined
with FINRA’s monitoring of NOS’s
compliance with BOX’s rules and
quarterly reporting to the BOXR’s CRO,
23 See Notice, 76 FR at 43741. See also Securities
Exchange Act Release No. 65177 (August 19, 2011)
(SR–BX–2011–058). The Commission notes that the
original pilot period of twelve months began on
August 16, 2009, but was extended several times.
See Notice, 76 FR at 43740, n.5.; and SR–BX–2011–
058, supra.
24 See
BOX Routing Pilot Release, 76 FR at 43741.
e.g., Securities Exchange Act Release Nos.
54170 (July 18, 2006), 71 FR 42149 (July 25, 2006)
(SR–NASDAQ–2006–006) (order approving
Nasdaq’s proposal to adopt Nasdaq Rule 2140,
restricting affiliations between Nasdaq and its
members); 53382 (February 27, 2006), 71 FR 11251
(March 6, 2006) (SR–NYSE–2005–77) (order
approving the combination of the New York Stock
Exchange, Inc. and Archipelago Holdings, Inc.);
58673 (September 29, 2008), 73 FR 57707 (October
8, 2008) (SR–Amex–2008–62) (order approving the
combination of NYSE Euronext and the American
Stock Exchange LLC); 59135 (December 22, 2008),
73 FR 79954 (December 30, 2008) (SR–ISE–2009–
85) (order approving the purchase by ISE Holdings
of an ownership interest in DirectEdge Holdings
LLC); and 59281 (January 22, 2009), 74 FR 5014
(January 28, 2009) (SR–NYSE–2008–120) (order
approving a joint venture between NYSE and BIDS
Holdings L.P.).
26 This oversight will be accomplished through
the Regulatory Contract between the Exchange and
FINRA, and, as applicable, a 17d–2 Agreement.
25 See,
PO 00000
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Sfmt 4703
54279
will help to protect the independence of
the Exchange’s regulatory
responsibilities with respect to NOS.
The Commission also believes that
Chapter XXXIX, Section 2(c) of the
Exchange’s Grandfathered Rules is
designed to ensure that NOS cannot use
any information advantage it may have
because of its affiliation with the
Exchange.
IV. Conclusion
It Is Therefore Ordered, pursuant to
Section 19(b)(2) of the Act,27 that the
proposed rule change (SR–BX–2011–
045) be, and hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.28
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011–22221 Filed 8–30–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–65195; File No. SR–Phlx–
2011–117]
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to the
Active SQF Port Fee and the Order
Entry Port Fee
August 25, 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 August
12, 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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
Exchange’s Fee Schedule to reflect that
the Exchange will not assess a charge for
the use of additional Active Specialized
Quote Feed (‘‘SQF’’) Ports and Order
Entry Ports in limited circumstances.
The text of the proposed rule change
is available on the Exchange’s Web site
27 15
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
28 17
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31AUN1
54280
Federal Register / Vol. 76, No. 169 / Wednesday, August 31, 2011 / Notices
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.
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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 allow member
organizations to utilize additional
Active SQF Ports and Order Entry Ports
in very limited circumstances, at no
additional charge, to accommodate
member organizations that are
attempting to colocate or otherwise
change their technology and require
extra ports during these transitions.3
The Exchange is proposing this rule
change to offset costs for member
organizations that are transitioning
technology and require additional ports
as back-up ports only while the
transition is occurring.
Specifically, the Exchange would not
assess the Active SQF Port Fee or the
Order Entry Port Fee on member
organizations for the use of additional
Active SQF Ports and/or Order Entry
Ports for ten (10) business days in the
following limited circumstances where
a member organization is: (i) Colocating
to another facility; or (ii) changing
technology. The member organization
would be required to provide the
Exchange with written notification of
the date it would commence the
transition and the number of additional
Active SQF Ports and/or Order Entry
Ports that it would require during the
transition. The member organization
would not be assessed a fee for the use
of additional Active SQF Ports and/or
3 Members require extra ports during certain
technology transitions to ensure that they have
functioning ports if they experience difficulties
during the transition and need to send messages.
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Order Entry Ports for the ten business
days. If the member organization
required additional ports beyond the ten
business day period, it would be
assessed the applicable monthly fee for
the applicable ports.4 The member
organization would continue to be
assessed Active SQF Port Fees and
Order Entry Port Fees for the ports that
it requested, and the Exchange provided
to it, prior to the transition.5
For example, a member organization
that was utilizing three Order Entry
Ports on a monthly basis, notified the
Exchange that it would be updating its
technology and required use of four
additional Order Entry Ports for a ten
day period (from September 2, 2011,
through September 15, 2011), and
completed its transition in ten business
days (by September 15, 2011) would
only be assessed the Order Entry Port
Fee, as applicable, for three Order Entry
Ports. If the same member organization,
using the same facts, notified the
Exchange that it required use of the four
additional Order Entry Ports for more
than ten business days (beyond
September 15, 2011), the Exchange
would assess that member organization
the Order Entry Port Fee, as applicable,
for all seven ports, the three original
ports and the four additional ports.
The Exchange currently has a tiered
Active SQF Port Fee as follows:
affiliated with their member
organization.7
The Exchange currently assesses an
Order Entry Port Fee of $500 per month
per mnemonic.8 The Order Entry Port
Fee is a connectivity fee assessed on
member organizations in connection
with routing orders to the Exchange via
an external order entry port. Member
organizations access the Exchange’s
network through order entry ports. A
member organization may have more
than one order entry port.
The Exchange proposes to add text to
the Fee Schedule at Section VI entitled
‘‘Access Service, Cancellation,
Membership, Regulatory and Other
Fees’’ to indicate that: There will be no
cost for additional Active SQF Ports or
Order Entry Ports 9 acquired for ten
business days in connection with a
technology transition; notification is
required to the Exchange concerning the
transition; and the additional ports will
be removed from the system at the end
of the ten business days.
2. Statutory Basis
The Exchange believes that its
proposal to amend its Fee Schedule is
consistent with Section 6(b) of the Act 10
in general, and furthers the objectives of
Section 6(b)(4) of the Act 11 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 its
Cost per
Number of active SQF ports
port per
proposal to not assess an Active SQF
month
Port Fee or Order Entry Port Fee for ten
business days where a member
0–4 ................................................
$350
organization is transitioning technology
5–18 ..............................................
1,250
is reasonable because the Exchange is
19–40 ............................................
2,350
seeking to accommodate member
41 and over ..................................
3,000
organizations by not assessing fees for
additional ports related to the
Active SQF ports refer to ports that
technology transition. The Exchange
receive inbound quotes at any time
believes that ten days is ample time for
within that month. SQF is an interface
member organizations to receive
that enables specialists, Streaming
additional services at no cost. The
Quote Traders (‘‘SQTs’’) and Remote
Exchange believes this accommodation
Streaming Quote Traders (‘‘RSQTs’’) to
will assist member organizations in
connect and send quotes into Phlx XL.
7 Active SQF Port Fees are capped at $40,000 per
Active SQF Port Fees are capped at $500
month (‘‘Cap’’) until December 30, 2011 for all
per month for member organizations
that are (i) Phlx Only Members; 6 and (ii) member organizations other than those member
organizations who meet the requirements of the
have 50 or less SQT assignments
$500 per month cap.
4 Member
organizations would be required to
contact the Exchange to retain ports beyond the ten
business day period as the Exchange intends to
remove additional ports acquired at no cost once
the ten day business day period has ended.
5 A member organization is required to complete
a form in the manner prescribed by the Exchange
in order to acquire access to Active SQF Ports or
Order Entry Ports.
6 For purposes of the Active SQF Port Fee, a Phlx
Only Member is a Phlx member that is not a
member or member organization of another national
securities exchange.
PO 00000
Frm 00091
Fmt 4703
Sfmt 4703
8 The Order Entry Port Fee is waived for
mnemonics that are used exclusively for complex
orders where one of the components of the complex
order is the underlying security. The fee is assessed
regardless of usage, and solely on the number of
order entry ports assigned to each member
organization.
9 The additional ports refer to the ports that were
acquired at no cost for ten business days. As
previously mentioned, ports that were utilized by
the member organization prior to the transition will
continue to be assessed the current fees.
10 15 U.S.C. 78f(b).
11 15 U.S.C. 78f(b)(4).
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Federal Register / Vol. 76, No. 169 / Wednesday, August 31, 2011 / Notices
effectively and efficiently transitioning
technology and avoiding interruption to
their business, which in turn benefits
the market place.
The Exchange believes that this
proposal is equitable and not unfairly
discriminatory because the Exchange is
offering the additional ports at no
charge to all member organizations that
transition technology. These member
organizations who would receive the
additional ports at no costs are being
offered these services because they are
in a special circumstance, a transition of
technology, and this proposal would
prevent additional extraordinary costs
related to the transition.
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.12 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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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:
Number SR–Phlx–2011–117 on the
subject line.
SECURITIES AND EXCHANGE
COMMISSION
Paper Comments
[Release No. 34–65197; File No. SR–EDGX–
2011–27]
• 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–2011–117. 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–
2011–117 and should be submitted on
or before September 21, 2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011–22219 Filed 8–30–11; 8:45 am]
Self-Regulatory Organizations; EDGX
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend EDGX Rule
1.5(q)
August 25, 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 August
19, 2011, EDGX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘EDGX’’) filed with the
Securities and Exchange Commission
(‘‘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 comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
EDGX Exchange, Inc. (‘‘EDGX’’ or the
‘‘Exchange’’), proposes to amend EDGX
Rule 1.5(q) to change the starting time
of the Pre-Opening Session from 8 a.m.
Eastern Time (‘‘ET’’) to 7 a.m. E.T. The
text of the proposed rule change is
attached as Exhibit 5 and is available on
the Exchange’s Web site at https://
www.directedge.com, at the Exchange’s
principal office, and at the Public
Reference Room of the Commission.
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
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
BILLING CODE 8011–01–P
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
1. Purpose
The purpose of this filing is to amend
EDGX Rule 1.5(q) to change the starting
1 15
12 15
U.S.C. 78s(b)(3)(A)(ii).
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54281
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Sfmt 4703
2 17
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
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]]>Agencies
[Federal Register Volume 76, Number 169 (Wednesday, August 31, 2011)]
[Notices]
[Pages 54279-54281]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-22219]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-65195; File No. SR-Phlx-2011-117]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
the Active SQF Port Fee and the Order Entry Port Fee
August 25, 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 August 12, 2011, NASDAQ OMX PHLX LLC (``Phlx'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I, II, and III below, which Items have been prepared by the
Exchange. The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the Exchange's Fee Schedule to
reflect that the Exchange will not assess a charge for the use of
additional Active Specialized Quote Feed (``SQF'') Ports and Order
Entry Ports in limited circumstances.
The text of the proposed rule change is available on the Exchange's
Web site
[[Page 54280]]
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 allow member
organizations to utilize additional Active SQF Ports and Order Entry
Ports in very limited circumstances, at no additional charge, to
accommodate member organizations that are attempting to colocate or
otherwise change their technology and require extra ports during these
transitions.\3\ The Exchange is proposing this rule change to offset
costs for member organizations that are transitioning technology and
require additional ports as back-up ports only while the transition is
occurring.
---------------------------------------------------------------------------
\3\ Members require extra ports during certain technology
transitions to ensure that they have functioning ports if they
experience difficulties during the transition and need to send
messages.
---------------------------------------------------------------------------
Specifically, the Exchange would not assess the Active SQF Port Fee
or the Order Entry Port Fee on member organizations for the use of
additional Active SQF Ports and/or Order Entry Ports for ten (10)
business days in the following limited circumstances where a member
organization is: (i) Colocating to another facility; or (ii) changing
technology. The member organization would be required to provide the
Exchange with written notification of the date it would commence the
transition and the number of additional Active SQF Ports and/or Order
Entry Ports that it would require during the transition. The member
organization would not be assessed a fee for the use of additional
Active SQF Ports and/or Order Entry Ports for the ten business days. If
the member organization required additional ports beyond the ten
business day period, it would be assessed the applicable monthly fee
for the applicable ports.\4\ The member organization would continue to
be assessed Active SQF Port Fees and Order Entry Port Fees for the
ports that it requested, and the Exchange provided to it, prior to the
transition.\5\
---------------------------------------------------------------------------
\4\ Member organizations would be required to contact the
Exchange to retain ports beyond the ten business day period as the
Exchange intends to remove additional ports acquired at no cost once
the ten day business day period has ended.
\5\ A member organization is required to complete a form in the
manner prescribed by the Exchange in order to acquire access to
Active SQF Ports or Order Entry Ports.
---------------------------------------------------------------------------
For example, a member organization that was utilizing three Order
Entry Ports on a monthly basis, notified the Exchange that it would be
updating its technology and required use of four additional Order Entry
Ports for a ten day period (from September 2, 2011, through September
15, 2011), and completed its transition in ten business days (by
September 15, 2011) would only be assessed the Order Entry Port Fee, as
applicable, for three Order Entry Ports. If the same member
organization, using the same facts, notified the Exchange that it
required use of the four additional Order Entry Ports for more than ten
business days (beyond September 15, 2011), the Exchange would assess
that member organization the Order Entry Port Fee, as applicable, for
all seven ports, the three original ports and the four additional
ports.
The Exchange currently has a tiered Active SQF Port Fee as follows:
------------------------------------------------------------------------
Cost per
Number of active SQF ports port per
month
------------------------------------------------------------------------
0-4.......................................................... $350
5-18......................................................... 1,250
19-40........................................................ 2,350
41 and over.................................................. 3,000
------------------------------------------------------------------------
Active SQF ports refer to ports that receive inbound quotes at any
time within that month. SQF is an interface that enables specialists,
Streaming Quote Traders (``SQTs'') and Remote Streaming Quote Traders
(``RSQTs'') to connect and send quotes into Phlx XL. Active SQF Port
Fees are capped at $500 per month for member organizations that are (i)
Phlx Only Members; \6\ and (ii) have 50 or less SQT assignments
affiliated with their member organization.\7\
---------------------------------------------------------------------------
\6\ For purposes of the Active SQF Port Fee, a Phlx Only Member
is a Phlx member that is not a member or member organization of
another national securities exchange.
\7\ Active SQF Port Fees are capped at $40,000 per month
(``Cap'') until December 30, 2011 for all member organizations other
than those member organizations who meet the requirements of the
$500 per month cap.
---------------------------------------------------------------------------
The Exchange currently assesses an Order Entry Port Fee of $500 per
month per mnemonic.\8\ The Order Entry Port Fee is a connectivity fee
assessed on member organizations in connection with routing orders to
the Exchange via an external order entry port. Member organizations
access the Exchange's network through order entry ports. A member
organization may have more than one order entry port.
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\8\ The Order Entry Port Fee is waived for mnemonics that are
used exclusively for complex orders where one of the components of
the complex order is the underlying security. The fee is assessed
regardless of usage, and solely on the number of order entry ports
assigned to each member organization.
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The Exchange proposes to add text to the Fee Schedule at Section VI
entitled ``Access Service, Cancellation, Membership, Regulatory and
Other Fees'' to indicate that: There will be no cost for additional
Active SQF Ports or Order Entry Ports \9\ acquired for ten business
days in connection with a technology transition; notification is
required to the Exchange concerning the transition; and the additional
ports will be removed from the system at the end of the ten business
days.
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\9\ The additional ports refer to the ports that were acquired
at no cost for ten business days. As previously mentioned, ports
that were utilized by the member organization prior to the
transition will continue to be assessed the current fees.
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2. Statutory Basis
The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \10\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \11\ in
particular, in that it is an equitable allocation of reasonable fees
and other charges among Exchange members and other persons using its
facilities.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that its proposal to not assess an Active SQF
Port Fee or Order Entry Port Fee for ten business days where a member
organization is transitioning technology is reasonable because the
Exchange is seeking to accommodate member organizations by not
assessing fees for additional ports related to the technology
transition. The Exchange believes that ten days is ample time for
member organizations to receive additional services at no cost. The
Exchange believes this accommodation will assist member organizations
in
[[Page 54281]]
effectively and efficiently transitioning technology and avoiding
interruption to their business, which in turn benefits the market
place.
The Exchange believes that this proposal is equitable and not
unfairly discriminatory because the Exchange is offering the additional
ports at no charge to all member organizations that transition
technology. These member organizations who would receive the additional
ports at no costs are being offered these services because they are in
a special circumstance, a transition of technology, and this proposal
would prevent additional extraordinary costs related to the transition.
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.\12\ 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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\12\ 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-2011-117 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-2011-117. 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-2011-117 and should be
submitted on or before September 21, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-22219 Filed 8-30-11; 8:45 am]
BILLING CODE 8011-01-P
