Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating To the RSQT Fee, 65225-65228 [2011-27200]
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Federal Register / Vol. 76, No. 203 / Thursday, October 20, 2011 / Notices
and regulations thereunder applicable to
CME. Specifically, the Commission
finds that the proposed rule change is
consistent with Section 17A(b)(3)(F) of
Paper Comments
the Act which requires, among other
• Paper comments should be sent in
things, that the rules of a clearing
triplicate to Elizabeth M. Murphy,
agency be designed to promote the
Secretary, Securities and Exchange
prompt and accurate clearance and
Commission, 100 F Street, NE.,
settlement of derivative agreements,
Washington, DC, 20549–1090.
contracts, and transactions because it
All submissions should refer to File
should allow CME to enhance its
Number SR–CME–2011–10. This file
services in clearing interest rate swaps,
number should be included on the
subject line if e-mail is used. To help the thereby promoting the prompt and
accurate clearance and settlement of
Commission process and review your
derivative agreements, contracts, and
comments more efficiently, please use
only one method. The Commission will transactions.5
post all comments on the Commission’s
The Commission finds good cause for
Internet Web site (https://www.sec.gov/
accelerating approval because: (i) The
rules/sro.shtml). Copies of the
proposed rule change does not
submission, all subsequent
significantly affect any securities
amendments, all written statements
clearing operations of the clearing
with respect to the proposed rule
agency (whether in existence or
change that are filed with the
contemplated by its rules) or any related
Commission, and all written
rights or obligations of the clearing
communications relating to the
agency or persons using such service;
proposed rule change between the
(ii) CME has indicated that not
Commission and any person, other than
providing accelerated approval would
those that may be withheld from the
have a significant impact on the swap
public in accordance with the
clearing business of CME as a
provisions of 5 U.S.C. 552, will be
designated clearing organization; and
available for Web site viewing and
(iii) the activity relating to the nonprinting in the Commission’s Public
security clearing operations of the
Reference Room, 100 F Street, NE.,
clearing agency for which the clearing
Washington, DC 20549 on official
agency is seeking approval is subject to
business days between the hours of 10
regulation by another regulator.
a.m. and 3 p.m. Copies of such filing
also will be available for inspection and V. Conclusion
copying at the principal office of CME.
All comments received will be posted
It Is Therefore Ordered, pursuant to
without change; the Commission does
Section 19(b)(2) 6 of the Act, that the
not edit personal identifying
proposed rule change (SR–CME–2011–
information from submissions. You
10) is approved on an accelerated basis.
should submit only information that
For the Commission by the Division of
you wish to make available publicly. All
Trading and Markets, pursuant to delegated
submissions should refer to File
authority.7
Number SR–CME–2011–10 and should
be submitted on or before November 10, Elizabeth M. Murphy,
Secretary.
2011.
sroberts on DSK5SPTVN1PROD with NOTICES
an e-mail to rule-comments@sec.gov.
Please include File No. SR–CME–2011–
10 on the subject line.
IV. Commission’s Findings and Order
Granting Accelerated Approval of
Proposed Rule Change
Section 19(b) of the Act 3 directs the
Commission to approve a proposed rule
change of a self-regulatory organization
if it finds that such proposed rule
change is consistent with the
requirements of the Act and the rules
and regulations thereunder applicable to
such organization. The Commission
finds that the proposed rule change is
consistent with the requirements of the
Act, in particular the requirements of
Section 17A of the Act,4 and the rules
3 15
U.S.C. 78s(b).
U.S.C. 78q–1. In approving this proposed
rule change, the Commission has considered the
4 15
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[FR Doc. 2011–27201 Filed 10–19–11; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–65576; File No. SR–Phlx–
2011–133]
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating To the
RSQT Fee
October 14, 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 October
3, 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
Remote Streaming Quote Trader
(‘‘RSQT’’) 3 Fee in Section VI of the
Exchange’s Fee Schedule entitled
‘‘Access Service, Cancellation,
Membership, Regulatory and Other
Fees.’’
While changes to the Fee Schedule
pursuant to this proposal are effective
upon filing, the Exchange has
designated these changes to be operative
on November 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, on the
Commission’s Web site at https://
www.sec.gov/ 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
BILLING CODE 8011–01–P
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 A Registered Options Trader (‘‘ROT’’) includes
a Streaming Quote Trader (‘‘SQT’’), a Remote
Streaming Quote Trader (‘‘RSQT’’) and a Non-SQT
ROT, which by definition is neither a SQT or a
RSQT. A ROT is defined in Exchange Rule 1014(b)
as a regular member or a foreign currency options
participant of the Exchange located on the trading
floor who has received permission from the
Exchange to trade in options for his own account.
See Exchange Rule 1014 (b)(i) and (ii).
2 17
proposed rule’s impact on efficiency, competition,
and capital formation. 15 U.S.C. 78c(f).
5 15 U.S.C. 78q–1(b)(3)(F).
6 15 U.S.C. 78s(b)(2).
7 17 CFR 200.30–3(a)(12).
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Federal Register / Vol. 76, No. 203 / Thursday, October 20, 2011 / Notices
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 the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend the
RSQT Fee in Section VI of the
Exchange’s Fee Schedule, entitled
‘‘Access Service, Cancellation,
Membership, Regulatory and Other
Fees,’’ in order to simplify its RSQT Fee
and automate its billing of this fee.
An RSQT is an ROT that is a member
or member organization with no
physical trading floor presence who has
RSQT Category I .........................................................
RSQT Category II ........................................................
RSQT Category III .......................................................
RSQT Category IV .......................................................
RSQT Category V ........................................................
sroberts on DSK5SPTVN1PROD with NOTICES
RSQT Category VI .......................................................
RSQT Category VII ......................................................
4 A qualified RSQT may function as a Remote
Specialist upon Exchange approval.
5 See Exchange Rule 1014(b)(ii)(B). No person
who is either directly or indirectly affiliated with
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$1700.00 per calendar month.
RSQT is Eligible to trade:
• 1 issue selected from the top 5 national volume leaders.
• 1 issue selected from the 6th to 10th national volume leaders.
• 3 issues selected from the 11th to 25th national volume leaders.
• 4 issues selected from the 26th to 50th national volume leaders.
• 1 index issue.
• 190 other issues.
$3200.00 per calendar month.
RSQT is Eligible to trade:
• 2 issues selected from the top 5 national volume leaders.
• 2 issues selected from the 6th to 10th national volume leaders.
• 6 issues selected from the 11th to 25th national volume leaders.
• 8 issues selected from the 26th to 50th national volume leaders.
• 2 index issues.
• 380 other issues.
$4700.00 per calendar month.
RSQT is Eligible to trade:
• 3 issues selected from the top 5 national volume leaders.
• 3 issues selected from the 6th to 10th national volume leaders.
• 9 issues selected from the 11th to 25th national volume leaders.
• 12 issues selected from the 26th to 50th national volume leaders.
• 3 index issues.
• 570 other issues.
$6200.00 per calendar month.
RSQT is Eligible to trade:
• 4 issues selected from the top 5 national volume leaders.
• 4 issues selected from the 6th to 10th national volume leaders.
• 12 issues selected from the 11th to 25th national volume leaders.
• 16 issues selected from the 26th to 50th national volume leaders.
• 5 index issues.
• 759 other issues.
$7700.00 per calendar month.
RSQT is Eligible to trade:
• 5 issues selected from the top 5 national volume leaders.
• 5 issues selected from the 6th to 10th national volume leaders.
• 15 issues selected from the 11th to 25th national volume leaders.
• 20 issues selected from the 26th to 50th national volume leaders.
• 7 index issues.
• 948 other issues.
$9200.00 per calendar month.
RSQT is Eligible to trade:
• 5 issues selected from the top 5 national volume leaders.
• 5 issues selected from the 6th to 10th national volume leaders.
• 15 issues selected from the 11th to 25th national volume leaders.
• 25 issues selected from the 26th to 50th national volume leaders.
• 9 index issues.
• 1141 other issues.
$10,700.00 per calendar month.
RSQT is eligible to trade all equity option and index option issues.
an RSQT shall submit quotations as a specialist,
SQT, RSQT or non-SQT ROT in options in which
such affiliated RSQT is assigned. An RSQT may
only trade in a market making capacity in classes
PO 00000
received permission from the Exchange
to generate and submit option
quotations electronically in options to
which such RSQT has been assigned.4
An RSQT may only submit such
quotations electronically from off the
floor of the Exchange.5 An RSQT shall
not submit option quotations in eligible
options to which such RSQT is assigned
to the extent that the RSQT is also
approved as a Remote Specialist in the
same options.6
Currently, the Exchange assesses its
RSQT Fee in seven categories as
follows:
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of options in which he is assigned or approved as
a Remote Specialist.
6 See Exchange Rules 1014(b) and 507 for
qualifications relating to assignments.
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Federal Register / Vol. 76, No. 203 / Thursday, October 20, 2011 / Notices
Currently, each RSQT is assessed an
RSQT Fee based on the number and
type of option issues (as described
above) in which an RSQT is assigned.
The national volume leader calculations
are performed by the Exchange.7 Each
additional category is a progressively
higher fee for an RSQT to submit
quotations from off the floor of the
Exchange in a progressively greater
number of options in each
aforementioned national volume
grouping and in a greater number of
index options. Accordingly, in order to
submit electronic quotations from off
the floor of the Exchange in all options
traded on the Exchange, an RSQT would
be required to pay fees applicable to a
Category VII RSQT. The RSQT Fee is
assessed based on the highest RSQT
category level in which the RSQT was
65227
qualified to trade at any time during a
particular calendar month.8
The Exchange proposes to eliminate
the current RSQT Fee and instead adopt
a new RSQT Fee based solely on the
number of options assigned to a
particular RSQT. The Exchange
proposes to adopt the following
monthly RSQT Fee based on the
corresponding number of option class
assignments:9
Number of option class assignments
RSQT fee
Less than 100 classes ..............................................................................
More than 100 classes and less than 999 classes ..................................
1000 or more classes ...............................................................................
$5,000 per month.
$8,000 per month.
$11,000 per month.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
2. Statutory Basis
The Exchange believes that its
proposal to amend its Fee Schedule is
consistent with Section 6(b) of the Act 12
in general, and furthers the objectives of
Section 6(b)(4) of the Act 13 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 amendments to the RSQT Fee
are reasonable because the Exchange is
creating a simple method for calculating
the RSQT Fee. The proposal will
calculate the RSQT Fee on the number
of option assignments as compared to
the national volume for equity options
and options overlying Exchange-Traded
Fund Shares. This new calculation will
enable RSQTs to easily determine the
amount of option class assignments and
therefore the RSQT Fee on a monthly
basis without the need for a more
comprehensive calculation. The
Exchange believes that this revised form
of calculating the RSQT Fee will be
more transparent to members, create a
simple calculation of the fee based
solely on the number of option class
assignments and allow for ease of
automation of this fee.
The Exchange believes that the
proposed RSQT Fee is equitable and not
unfairly discriminatory because the
proposed fee is more representative of
system usage by RSQTs and costs to the
Exchange. While several factors
determine a particular RSQT’s Fee in
any given month, a comparison of the
current RSQT Fee and the proposal
which is based solely on option
assignments is not a fair determination
of the impact of this fee proposal. The
Exchange believes that a majority of
RSQTs will experience an increase or
decrease in the RSQT Fee of
approximately $300–$1800 a month
based on this proposal. The Exchange
has not increased this fee since it was
established in 2005 and believes that the
proposed fee is a fair representation of
the Exchange’s technology costs and the
increased amount of system usage
attributable to each RSQT.
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.
7 The Exchange calculates the national volume for
equity options and options overlying ExchangeTraded Fund Shares every six months, effective
from January 1 through June 30, and again from July
1 through December 31. The January–June national
volume rankings are based on the total national
volume for a particular option traded during the
previous month of October, as determined by The
Options Clearing Corporation (‘‘OCC’’); the July–
December national volume rankings will be based
on the total national volume for a particular option
traded during the previous month of May, as
determined by the OCC. See Securities Exchange
Act Release No. 51428 (March 24, 2005), 70 FR
16325 (March 30, 2005) (SR–Phlx–2005–12).
8 For example, if an RSQT is eligible to trade at
any time in a given calendar month as a Category
I RSQT, and sometime during that calendar month
becomes qualified and eligible to trade as a
Category II RSQT, the RSQT will be assessed the
fee applicable to a Category II RSQT, regardless of
when such RSQT became eligible to trade at the
Category II level, and regardless of whether or not,
during that calendar month, the RSQT resumed
eligibility as a Category I RSQT.
9 For purposes of this filing, the term ‘‘issues’’ and
‘‘classes’’ have the same meaning.
10 ETNs are also known as ‘‘Index-Linked
Securities,’’ which are designed for investors who
desire to participate in a specific market segment
by providing exposure to one or more identifiable
underlying securities, commodities, currencies,
derivative instruments or market indexes of the
foregoing. Index-Linked Securities are the nonconvertible debt of an issuer that have a term of at
least one (1) year but not greater than thirty (30)
years. Despite the fact that Index-Linked Securities
are linked to an underlying index, each trade as a
single, exchange-listed security. Accordingly, rules
pertaining to the listing and trading of standard
equity options apply to Index-Linked Securities.
11 HOLDRS are Holding Company Depository
Receipts.
12 15 U.S.C. 78f(b).
13 15 U.S.C. 78f(b)(4).
14 15 U.S.C. 78s(b)(3)(A)(ii).
sroberts on DSK5SPTVN1PROD with NOTICES
In calculating the RSQT Fee, the
Exchange will calculate the number of
option class assignments for equity
options including exchange-traded
funds (‘‘ETFs’’), exchange-traded notes
(‘‘ETNs’’) 10 and HOLDRS.11 The
Exchange will not include and therefore
not assess a fee for currencies or indexes
in calculating the number of option
class assignments.
While changes to the Fee Schedule
pursuant to this proposal are effective
upon filing, the Exchange has
designated these changes to be operative
on November 1, 2011.
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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
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Federal Register / Vol. 76, No. 203 / Thursday, October 20, 2011 / Notices
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:
• 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
No. SR–Phlx–2011–133 on the subject
line.
Paper Comments
sroberts on DSK5SPTVN1PROD with NOTICES
• 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 No.
SR–Phlx–2011–133. 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 such 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 No. SR–Phlx–2011–
133 and should be submitted on or
before November 10, 2011.
18:59 Oct 19, 2011
[FR Doc. 2011–27200 Filed 10–19–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
VerDate Mar<15>2010
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Elizabeth M. Murphy,
Secretary.
Jkt 226001
[Release No. 34–65574; File No. SR–Phlx–
2011–134]
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating To the
Permit Fee and the Inactive Nominee
Fee
October 14, 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 October
3, 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
applicability of the Permit Fee and also
proposes to amend the Inactive
Nominee Fee.
While changes to the Fee Schedule
pursuant to this proposal are effective
upon filing, the Exchange has
designated these changes to be operative
on November 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, on the
Commission’s Web site at https://
www.sec.gov/ 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
15 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
PO 00000
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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 the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of the proposed rule
change is to: (i) Amend the applicability
of the Permit Fee for members and
member organizations transacting an
options business; and (ii) amend the
Inactive Nominee Fee. The Exchange
desires to automate its billing processes
further and therefore proposes to require
members and member organizations to
transact business using an assigned Phlx
house account. In addition, the
Exchange proposes to allow affiliated
member organizations the opportunity
to benefit from each other’s transactions
for purposes of assessing the Permit Fee.
Also, the Exchange proposes to increase
the Inactive Nominee Fee from $500
each six months to $100 a month for the
applicable six month period. Assessing
the Inactive Nominee Fee on a monthly
basis enables member organizations the
ability to terminate an Inactive Nominee
prior to the six month period and avoid
paying the $100 for the remaining
months.
Permit Fee
Currently, the Exchange assesses a
Permit Fee of $1,100 for members and
member organizations who transact
business on the Exchange and $7,500 for
members and member organizations
who do not transact business on the
Exchange. Further, the $7,500 Permit
Fee is assessed only if that member is
(i) not a PSX 3 Only Participant; or (ii)
not engaged in an options business at
Phlx in a particular month.4
The Exchange proposes two
amendments to the eligibility of the
3 PSX is the Exchange’s cash equities market
electronic trading platform.
4 A member or member organization will pay an
additional permit fee for each sponsored options
participant. See Exchange Rule 1094 titled
Sponsored Participants. A Sponsored Participant
may obtain authorized access to the Exchange only
if such access is authorized in advance by one or
more Sponsoring Member Organizations. Sponsored
Participants must enter into and maintain
participant agreements with one or more
Sponsoring Member Organizations establishing a
proper relationship(s) and account(s) through
which the Sponsored Participant may trade on the
Exchange.
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]]>Agencies
[Federal Register Volume 76, Number 203 (Thursday, October 20, 2011)]
[Notices]
[Pages 65225-65228]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-27200]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-65576; File No. SR-Phlx-2011-133]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating To
the RSQT Fee
October 14, 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 October 3, 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 Remote Streaming Quote Trader
(``RSQT'') \3\ Fee in Section VI of the Exchange's Fee Schedule
entitled ``Access Service, Cancellation, Membership, Regulatory and
Other Fees.''
---------------------------------------------------------------------------
\3\ A Registered Options Trader (``ROT'') includes a Streaming
Quote Trader (``SQT''), a Remote Streaming Quote Trader (``RSQT'')
and a Non-SQT ROT, which by definition is neither a SQT or a RSQT. A
ROT is defined in Exchange Rule 1014(b) as a regular member or a
foreign currency options participant of the Exchange located on the
trading floor who has received permission from the Exchange to trade
in options for his own account. See Exchange Rule 1014 (b)(i) and
(ii).
---------------------------------------------------------------------------
While changes to the Fee Schedule pursuant to this proposal are
effective upon filing, the Exchange has designated these changes to be
operative on November 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, on the Commission's Web site at
https://www.sec.gov/ 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
[[Page 65226]]
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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend the RSQT Fee in Section VI of the
Exchange's Fee Schedule, entitled ``Access Service, Cancellation,
Membership, Regulatory and Other Fees,'' in order to simplify its RSQT
Fee and automate its billing of this fee.
An RSQT is an ROT that is a member or member organization with no
physical trading floor presence who has received permission from the
Exchange to generate and submit option quotations electronically in
options to which such RSQT has been assigned.\4\ An RSQT may only
submit such quotations electronically from off the floor of the
Exchange.\5\ An RSQT shall not submit option quotations in eligible
options to which such RSQT is assigned to the extent that the RSQT is
also approved as a Remote Specialist in the same options.\6\
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\4\ A qualified RSQT may function as a Remote Specialist upon
Exchange approval.
\5\ See Exchange Rule 1014(b)(ii)(B). No person who is either
directly or indirectly affiliated with an RSQT shall submit
quotations as a specialist, SQT, RSQT or non-SQT ROT in options in
which such affiliated RSQT is assigned. An RSQT may only trade in a
market making capacity in classes of options in which he is assigned
or approved as a Remote Specialist.
\6\ See Exchange Rules 1014(b) and 507 for qualifications
relating to assignments.
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Currently, the Exchange assesses its RSQT Fee in seven categories
as follows:
------------------------------------------------------------------------
------------------------------------------------------------------------
RSQT Category I........................ $1700.00 per calendar month.
RSQT is Eligible to trade:
1 issue selected
from the top 5 national volume
leaders.
1 issue selected
from the 6th to 10th national
volume leaders.
3 issues selected
from the 11th to 25th national
volume leaders.
4 issues selected
from the 26th to 50th national
volume leaders.
1 index issue.
190 other issues.
RSQT Category II....................... $3200.00 per calendar month.
RSQT is Eligible to trade:
2 issues selected
from the top 5 national volume
leaders.
2 issues selected
from the 6th to 10th national
volume leaders.
6 issues selected
from the 11th to 25th national
volume leaders.
8 issues selected
from the 26th to 50th national
volume leaders.
2 index issues.
380 other issues.
RSQT Category III...................... $4700.00 per calendar month.
RSQT is Eligible to trade:
3 issues selected
from the top 5 national volume
leaders.
3 issues selected
from the 6th to 10th national
volume leaders.
9 issues selected
from the 11th to 25th national
volume leaders.
12 issues selected
from the 26th to 50th national
volume leaders.
3 index issues.
570 other issues.
RSQT Category IV....................... $6200.00 per calendar month.
RSQT is Eligible to trade:
4 issues selected
from the top 5 national volume
leaders.
4 issues selected
from the 6th to 10th national
volume leaders.
12 issues selected
from the 11th to 25th national
volume leaders.
16 issues selected
from the 26th to 50th national
volume leaders.
5 index issues.
759 other issues.
RSQT Category V........................ $7700.00 per calendar month.
RSQT is Eligible to trade:
5 issues selected
from the top 5 national volume
leaders.
5 issues selected
from the 6th to 10th national
volume leaders.
15 issues selected
from the 11th to 25th national
volume leaders.
20 issues selected
from the 26th to 50th national
volume leaders.
7 index issues.
948 other issues.
RSQT Category VI....................... $9200.00 per calendar month.
RSQT is Eligible to trade:
5 issues selected
from the top 5 national volume
leaders.
5 issues selected
from the 6th to 10th national
volume leaders.
15 issues selected
from the 11th to 25th national
volume leaders.
25 issues selected
from the 26th to 50th national
volume leaders.
9 index issues.
1141 other issues.
RSQT Category VII...................... $10,700.00 per calendar month.
RSQT is eligible to trade all
equity option and index option
issues.
------------------------------------------------------------------------
[[Page 65227]]
Currently, each RSQT is assessed an RSQT Fee based on the number
and type of option issues (as described above) in which an RSQT is
assigned. The national volume leader calculations are performed by the
Exchange.\7\ Each additional category is a progressively higher fee for
an RSQT to submit quotations from off the floor of the Exchange in a
progressively greater number of options in each aforementioned national
volume grouping and in a greater number of index options. Accordingly,
in order to submit electronic quotations from off the floor of the
Exchange in all options traded on the Exchange, an RSQT would be
required to pay fees applicable to a Category VII RSQT. The RSQT Fee is
assessed based on the highest RSQT category level in which the RSQT was
qualified to trade at any time during a particular calendar month.\8\
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\7\ The Exchange calculates the national volume for equity
options and options overlying Exchange-Traded Fund Shares every six
months, effective from January 1 through June 30, and again from
July 1 through December 31. The January-June national volume
rankings are based on the total national volume for a particular
option traded during the previous month of October, as determined by
The Options Clearing Corporation (``OCC''); the July-December
national volume rankings will be based on the total national volume
for a particular option traded during the previous month of May, as
determined by the OCC. See Securities Exchange Act Release No. 51428
(March 24, 2005), 70 FR 16325 (March 30, 2005) (SR-Phlx-2005-12).
\8\ For example, if an RSQT is eligible to trade at any time in
a given calendar month as a Category I RSQT, and sometime during
that calendar month becomes qualified and eligible to trade as a
Category II RSQT, the RSQT will be assessed the fee applicable to a
Category II RSQT, regardless of when such RSQT became eligible to
trade at the Category II level, and regardless of whether or not,
during that calendar month, the RSQT resumed eligibility as a
Category I RSQT.
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The Exchange proposes to eliminate the current RSQT Fee and instead
adopt a new RSQT Fee based solely on the number of options assigned to
a particular RSQT. The Exchange proposes to adopt the following monthly
RSQT Fee based on the corresponding number of option class
assignments:\9\
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\9\ For purposes of this filing, the term ``issues'' and
``classes'' have the same meaning.
------------------------------------------------------------------------
Number of option class assignments RSQT fee
------------------------------------------------------------------------
Less than 100 classes.................. $5,000 per month.
More than 100 classes and less than 999 $8,000 per month.
classes.
1000 or more classes................... $11,000 per month.
------------------------------------------------------------------------
In calculating the RSQT Fee, the Exchange will calculate the number
of option class assignments for equity options including exchange-
traded funds (``ETFs''), exchange-traded notes (``ETNs'') \10\ and
HOLDRS.\11\ The Exchange will not include and therefore not assess a
fee for currencies or indexes in calculating the number of option class
assignments.
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\10\ ETNs are also known as ``Index-Linked Securities,'' which
are designed for investors who desire to participate in a specific
market segment by providing exposure to one or more identifiable
underlying securities, commodities, currencies, derivative
instruments or market indexes of the foregoing. Index-Linked
Securities are the non-convertible debt of an issuer that have a
term of at least one (1) year but not greater than thirty (30)
years. Despite the fact that Index-Linked Securities are linked to
an underlying index, each trade as a single, exchange-listed
security. Accordingly, rules pertaining to the listing and trading
of standard equity options apply to Index-Linked Securities.
\11\ HOLDRS are Holding Company Depository Receipts.
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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 November 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 \12\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \13\ 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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\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that the proposed amendments to the RSQT Fee
are reasonable because the Exchange is creating a simple method for
calculating the RSQT Fee. The proposal will calculate the RSQT Fee on
the number of option assignments as compared to the national volume for
equity options and options overlying Exchange-Traded Fund Shares. This
new calculation will enable RSQTs to easily determine the amount of
option class assignments and therefore the RSQT Fee on a monthly basis
without the need for a more comprehensive calculation. The Exchange
believes that this revised form of calculating the RSQT Fee will be
more transparent to members, create a simple calculation of the fee
based solely on the number of option class assignments and allow for
ease of automation of this fee.
The Exchange believes that the proposed RSQT Fee is equitable and
not unfairly discriminatory because the proposed fee is more
representative of system usage by RSQTs and costs to the Exchange.
While several factors determine a particular RSQT's Fee in any given
month, a comparison of the current RSQT Fee and the proposal which is
based solely on option assignments is not a fair determination of the
impact of this fee proposal. The Exchange believes that a majority of
RSQTs will experience an increase or decrease in the RSQT Fee of
approximately $300-$1800 a month based on this proposal. The Exchange
has not increased this fee since it was established in 2005 and
believes that the proposed fee is a fair representation of the
Exchange's technology costs and the increased amount of system usage
attributable to each RSQT.
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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[[Page 65228]]
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 No. SR-Phlx-2011-133 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 No. SR-Phlx-2011-133. 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 such 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 No. SR-Phlx-2011-133 and should be
submitted on or before November 10, 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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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-27200 Filed 10-19-11; 8:45 am]
BILLING CODE 8011-01-P
