Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Permit Fee, 78055-78057 [2011-32139]

Download as PDF Federal Register / Vol. 76, No. 241 / Thursday, December 15, 2011 / Notices listed for the Closed Meeting in a closed session. The subject matter of the Closed Meeting scheduled for Monday, December 19, 2011 will be: Institution and settlement of injunctive actions; Institution and settlement of administrative proceedings; Other matters relating to enforcement proceedings; and An adjudicatory matter. At times, changes in Commission priorities require alterations in the scheduling of meeting items. For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact: The Office of the Secretary at (202) 551–5400. Dated: December 12, 2011. Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2011–32219 Filed 12–20–11; 11:15 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–65689A; File No. SR–Phlx– 2011–142] Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing of Proposed Rule Change To Modify Its Co-Location Fee Schedule Regarding Low Latency Network Connections; Correction Securities And Exchange Commission. AGENCY: ACTION: Notice; correction. The Securities and Exchange Commission published a document in the Federal Register of November 10, 2011 concerning a Proposed Rule Change by NASDAQ OMX PHLX LLC to Modify its Co-Location Fee Schedule Regarding Low Latency Network Connections; The document contained a typographical error in the heading. SUMMARY: mstockstill on DSK4VPTVN1PROD with NOTICES FOR FURTHER INFORMATION CONTACT: Daniel T. Gien, Special Counsel, Division of Trading and Markets, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549, (202) 551–5747. Correction: In the Federal Register of November 10, 2011, in FR Doc. 2011–29110, on page 70187, correct the heading to read as noted above. VerDate Mar<15>2010 16:49 Dec 14, 2011 Jkt 226001 Dated: December 9, 2011. Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2011–32132 Filed 12–14–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–65924; File No. SR–Phlx– 2011–167] Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Permit Fee December 9, 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 November 28, 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 waive Permit Fees for existing Exchange members or member organizations that were members on the Exchange prior to the initiation of PSX and have since determined to commence an equities business. 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 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 1 15 2 17 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00093 Fmt 4703 Sfmt 4703 78055 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 extend the waiver of Permit Fees to Exchange members or member organizations that were members on the Exchange prior to the initiation of PSX and have since determined to commence an equities business. The Exchange continues to seek to encourage members to trade on NASDAQ OMX PSX (‘‘PSX’’) 3 under a market participant identifier (‘‘MPID’’) 4 registered to the member or member organization. Currently, the Exchange assesses members and member organizations who are transacting business on the Exchange a Permit Fee of $1,100 per month.5 A member or member organization is assessed the $1,100 monthly Permit Fee if that member or member organization: (1) Transacts its option orders in its assigned Phlx house account in a particular month; (2) is a clearing member of The Options Clearing Corporation or a Floor Broker; or (3) for those member organizations which are under common ownership, transacts at least one options trade in a Phlx house account that is assigned to one of the member organizations under common ownership.6 Members who are not transacting business on the Exchange are assessed a Permit Fee of $7,500 per month. A member or member organization is assessed the $7,500 Permit Fee for not transacting business on the Exchange if that member is either: (i) Not a PSX Participant;7 or not engaged in an options business at the Exchange in a particular month. In 3 PSX is the Exchange’s cash equities market electronic trading platform. 4 An MPID is a four-letter code used by a member to categorize its trading activity for a specific purpose. 5 The Exchange recently filed to amend its Permit Fees to $2,000 for members transacting business on the Exchange. The rule text of Exhibit 5 reflects the text of that currently effective filing which will be operative on January 3, 2012, in part. See SR–Phlx– 2011–166. 6 For purposes of the Permit Fee, ‘‘common ownership’’ shall be defined as at least 75% common ownership between the member organizations. 7 Applicants that apply for membership solely to participate in the NASDAQ OMX PSX equities market are not assessed a Permit Fee, Application Fee, Initiation Fee, or Account Fee. See Securities Exchange Act Release No. 61863 (April 7, 2010), 75 FR 20021 (April 16, 2010) (SR–Phlx–2010–54). E:\FR\FM\15DEN1.SGM 15DEN1 78056 Federal Register / Vol. 76, No. 241 / Thursday, December 15, 2011 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES addition, a member or member organization that sponsors an options participant 8 would pay an additional Permit Fee for each sponsored options participant. If the Exchange member or member organization meets the exemption criteria related to the $7,500 Permit Fee, the member or member organization would be assessed the $1,100 Permit Fee or $2,000 as of January 3, 2012. At the time PSX began operations in October 2010, the Exchange filed a rule change to waive the Application Fee, Initiation Fee, Permit Fee and Account Fee for applicants applying to participate in PSX (‘‘October 2010 Rule Change’’).9 The October 2010 Rule Change applied the waivers to new Exchange members that solely participated in PSX.10 Also, the October 2010 Rule Change did not apply the waivers to an applicant seeking approval to participate solely in the options market, or to an applicant seeking to participate in both the equities and the options markets.11 Finally, the October 2010 Rule Change did not apply waivers to members or member organizations that cease their options operations, but remain as sole PSX Participants. The Exchange subsequently filed an amendment to allow existing members or member organizations that cease to conduct an options business on Phlx XL II,12 but continue to conduct business PSX, to receive a waiver of Permit Fee.13 This filing proposes to apply the waiver of the Permit Fee 14 to those Exchange members and member 8 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. 9 See Securities Exchange Act Release No. 63351 (November 19, 2010), 75 FR 73140 (November 29, 2010) (SR–Phlx–2010–54). 10 See Securities Exchange Act Release No. 63351 (November 19, 2010), 75 FR 73140 (November 29, 2010) (SR–Phlx–2010–54). 11 See Securities Exchange Act Release No. 63351 (November 19, 2010), 75 FR 73140 (November 29, 2010) (SR–Phlx–2010–54). 12 Phlx XL II is the Exchange’s electronic options trading platform. 13 See Securities Exchange Act Release No. 64265 (April 8, 2011), 76 FR 21080 (April 14, 2011) (SR– Phlx–2011–43). 14 These members and member organizations would not be assessed an Application Fee or Initiation Fee because they are already Exchange members or member organizations and have previously paid those fees. In addition, the monthly Account Fee would not be applicable to PSX Participants as MPIDs are used to identify member firms’ participation, not account numbers. VerDate Mar<15>2010 16:49 Dec 14, 2011 Jkt 226001 organizations that were members of the Exchange before the initiation of PSX, but were not conducting an options business, and thereafter commenced conducting an equities business. These members and member organizations were not considered ‘‘new’’ members and were therefore not subject to the waiver. The Exchange proposes to allow these members and member organizations to receive a waiver of the Permit Fee. These members and member organizations must not be conducting an options business to receive the waiver, but would be considered PSX only. 2. Statutory Basis The Exchange believes that its proposal to amend its Fee Schedule is consistent with Section 6(b) of the Act 15 in general, and furthers the objectives of Section 6(b)(4) of the Act 16 in particular, in that it is an equitable allocation of reasonable fees and other charges among Exchange members and other persons using its facilities. The Exchange believes that it is reasonable to waive fees as an incentive for existing Exchange members and member organizations to continue to transact business on PSX. The Exchange believes that the proposal is equitable and not unfairly discriminatory because the waiver applies uniformly to any members and member organizations that solely conduct an equities business on the Exchange. The fact that these members and member organizations were at the Exchange prior to the commencement of PSX should not prohibit them from receiving the same waiver as other equities members who are not conducting an options Exchange. 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.17 At any time 15 15 U.S.C. 78f(b). U.S.C. 78f(b)(4). 17 15 U.S.C. 78s(b)(3)(A)(ii). 16 15 PO 00000 Frm 00094 Fmt 4703 Sfmt 4703 within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rulecomments@sec.gov. Please include File No. SR–Phlx–2011–167 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–2011–167. This file number should be included on the subject line if email 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 E:\FR\FM\15DEN1.SGM 15DEN1 Federal Register / Vol. 76, No. 241 / Thursday, December 15, 2011 / Notices 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– 167 and should be submitted on or before January 5, 2012. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2011–32139 Filed 12–14–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–65926; File No. SR–Phlx– 2011–141] Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Order Granting Approval of Proposed Rule Change, as Modified by Amendment No. 1, To Introduce the Minimum Life Order as a New Order Type December 9, 2011. On October 12, 2011, NASDAQ OMX PHLX LLC (‘‘Exchange’’ or ‘‘Phlx’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to introduce the Minimum Life Order as new order type for use in the NASDAQ OMX PSX (‘‘PSX’’) system. The proposed rule change was published for comment in the Federal Register on October 28, 2011.3 On October 26, 2011, the Exchange filed Amendment No. 1 to the proposed rule change.4 The Commission has received one comment letter on the proposed rule change.5 The Exchange responded to the comment letter on November 28, 2011.6 This order approves the 18 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 65610 (October 24, 2011), 76 FR 67012 (‘‘Notice’’). 4 Amendment No. 1 to the proposed rule change reflects the October 19, 2011 approval of the proposed rule change by the Board of Directors of Phlx. This is a technical amendment and is not subject to notice and comment as it does not materially affect the substance of the filing. 5 See Letter dated November 1, 2011, from Sal Arnuk and Joe Saluzzi, Themis Trading, LLC, to Elizabeth M. Murphy, Secretary, Commission. 6 See Letter dated November 28, 2011, from John M. Yetter, Vice President & Deputy General Counsel, NASDAQ OMX, to Elizabeth M. Murphy, Secretary, Commission (‘‘Comment Response’’). mstockstill on DSK4VPTVN1PROD with NOTICES 1 15 VerDate Mar<15>2010 16:49 Dec 14, 2011 Jkt 226001 78057 proposed rule change, as modified by Amendment No. 1. The Exchange proposes, by amending its rules to add Rule 3301(f)(11), to introduce the Minimum Life Order as a new order type for use on PSX. A Minimum Life Order may not be cancelled by the entering participant for 100 milliseconds following receipt by the Exchange. If a market participant entering a Minimum Life Order submits a cancel message with respect to a Minimum Life Order at the same time as the order, or at any point during the ‘‘no cancel’’ window, the cancel message will not be rejected, but will be effected only following the expiration of the window (assuming the order has not already been executed). All Minimum Life Orders must be designated as Displayed Orders. The Commission received one comment letter, which was generally supportive of the proposed rule change.7 The commenter, however, expressed concern that predatory traders will be able to know when an order has a minimum life because there will be a new flag in the data feed.8 The commenter is concerned that predatory traders would be able to use such information to further model price behavior in the markets.9 The Exchange stated in its response to the commenter that Minimum Life Orders will not be distinguished from other Displayed Orders in any data that will be disseminated to market participants.10 The Exchange notes that the flag mentioned by the commenter will be used for order entry, but not for order display.11 After careful review, the Commission finds that the proposed rule change is consistent with the requirements of Section 6 of the Act 12 and the rules and regulations thereunder applicable to a national securities exchange.13 In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act,14 which requires, among other things, that the Exchange’s rules be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. The Exchange’s new Minimum Life Displayed Order type, which cannot be cancelled until after a 100 millisecond window has expired, allows market participants to elect to commit to trade for that time period and thus, according to the Exchange, is designed to encourage removers of liquidity to route orders to the Exchange in anticipation of receiving higher fill rates.15 The Commission believes that the Minimum Life Order could provide additional trading opportunities on the Exchange, consistent with just and equitable principles of trade, and is designed to encourage displayed liquidity and offer PSX market participants additional options when posting liquidity on PSX, consistent with removing impediments to and perfecting the mechanisms of a free and open market and a national market system, the protection of investors and the public interest. It is therefore ordered, pursuant to Section 19(b)(2) of the Act,16 that the proposed rule change (SR–Phlx–2011– 141), as amended, be, and hereby is, approved. 7 See supra note 5. However, the commenter does believe that, in order for the minimum order live to be truly effective, that it cannot be a voluntary order offered by just one exchange, but should apply to all orders. 8 Id. 9 Id. 10 See Comment Response, supra note 6. 11 Id. 12 15 U.S.C. 78f. 13 In approving this proposed rule change, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 14 15 U.S.C. 78f(b)(5). December 9, 2011. PO 00000 Frm 00095 Fmt 4703 Sfmt 4703 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2011–32141 Filed 12–14–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–65929; File No. SR– NASDAQ–2011–171] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Post-Only Order 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 December 6, 2011, The NASDAQ Stock Market LLC (the ‘‘Exchange’’ or ‘‘NASDAQ’’) 15 See Notice, supra note 3. U.S.C. 78s(b)(2). 17 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 16 15 E:\FR\FM\15DEN1.SGM 15DEN1

Agencies

[Federal Register Volume 76, Number 241 (Thursday, December 15, 2011)]
[Notices]
[Pages 78055-78057]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-32139]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65924; File No. SR-Phlx-2011-167]


Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Relating to 
the Permit Fee

December 9, 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 November 28, 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the Exchange's Fee Schedule to waive 
Permit Fees for existing Exchange members or member organizations that 
were members on the Exchange prior to the initiation of PSX and have 
since determined to commence an equities business.
    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 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 extend the waiver of 
Permit Fees to Exchange members or member organizations that were 
members on the Exchange prior to the initiation of PSX and have since 
determined to commence an equities business. The Exchange continues to 
seek to encourage members to trade on NASDAQ OMX PSX (``PSX'') \3\ 
under a market participant identifier (``MPID'') \4\ registered to the 
member or member organization.
---------------------------------------------------------------------------

    \3\ PSX is the Exchange's cash equities market electronic 
trading platform.
    \4\ An MPID is a four-letter code used by a member to categorize 
its trading activity for a specific purpose.
---------------------------------------------------------------------------

    Currently, the Exchange assesses members and member organizations 
who are transacting business on the Exchange a Permit Fee of $1,100 per 
month.\5\ A member or member organization is assessed the $1,100 
monthly Permit Fee if that member or member organization: (1) Transacts 
its option orders in its assigned Phlx house account in a particular 
month; (2) is a clearing member of The Options Clearing Corporation or 
a Floor Broker; or (3) for those member organizations which are under 
common ownership, transacts at least one options trade in a Phlx house 
account that is assigned to one of the member organizations under 
common ownership.\6\ Members who are not transacting business on the 
Exchange are assessed a Permit Fee of $7,500 per month. A member or 
member organization is assessed the $7,500 Permit Fee for not 
transacting business on the Exchange if that member is either: (i) Not 
a PSX Participant;\7\ or not engaged in an options business at the 
Exchange in a particular month. In

[[Page 78056]]

addition, a member or member organization that sponsors an options 
participant \8\ would pay an additional Permit Fee for each sponsored 
options participant. If the Exchange member or member organization 
meets the exemption criteria related to the $7,500 Permit Fee, the 
member or member organization would be assessed the $1,100 Permit Fee 
or $2,000 as of January 3, 2012.
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    \5\ The Exchange recently filed to amend its Permit Fees to 
$2,000 for members transacting business on the Exchange. The rule 
text of Exhibit 5 reflects the text of that currently effective 
filing which will be operative on January 3, 2012, in part. See SR-
Phlx-2011-166.
    \6\ For purposes of the Permit Fee, ``common ownership'' shall 
be defined as at least 75% common ownership between the member 
organizations.
    \7\ Applicants that apply for membership solely to participate 
in the NASDAQ OMX PSX equities market are not assessed a Permit Fee, 
Application Fee, Initiation Fee, or Account Fee. See Securities 
Exchange Act Release No. 61863 (April 7, 2010), 75 FR 20021 (April 
16, 2010) (SR-Phlx-2010-54).
    \8\ 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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    At the time PSX began operations in October 2010, the Exchange 
filed a rule change to waive the Application Fee, Initiation Fee, 
Permit Fee and Account Fee for applicants applying to participate in 
PSX (``October 2010 Rule Change'').\9\ The October 2010 Rule Change 
applied the waivers to new Exchange members that solely participated in 
PSX.\10\ Also, the October 2010 Rule Change did not apply the waivers 
to an applicant seeking approval to participate solely in the options 
market, or to an applicant seeking to participate in both the equities 
and the options markets.\11\ Finally, the October 2010 Rule Change did 
not apply waivers to members or member organizations that cease their 
options operations, but remain as sole PSX Participants. The Exchange 
subsequently filed an amendment to allow existing members or member 
organizations that cease to conduct an options business on Phlx XL 
II,\12\ but continue to conduct business PSX, to receive a waiver of 
Permit Fee.\13\
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    \9\ See Securities Exchange Act Release No. 63351 (November 19, 
2010), 75 FR 73140 (November 29, 2010) (SR-Phlx-2010-54).
    \10\ See Securities Exchange Act Release No. 63351 (November 19, 
2010), 75 FR 73140 (November 29, 2010) (SR-Phlx-2010-54).
    \11\ See Securities Exchange Act Release No. 63351 (November 19, 
2010), 75 FR 73140 (November 29, 2010) (SR-Phlx-2010-54).
    \12\ Phlx XL II is the Exchange's electronic options trading 
platform.
    \13\ See Securities Exchange Act Release No. 64265 (April 8, 
2011), 76 FR 21080 (April 14, 2011) (SR-Phlx-2011-43).
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    This filing proposes to apply the waiver of the Permit Fee \14\ to 
those Exchange members and member organizations that were members of 
the Exchange before the initiation of PSX, but were not conducting an 
options business, and thereafter commenced conducting an equities 
business. These members and member organizations were not considered 
``new'' members and were therefore not subject to the waiver. The 
Exchange proposes to allow these members and member organizations to 
receive a waiver of the Permit Fee. These members and member 
organizations must not be conducting an options business to receive the 
waiver, but would be considered PSX only.
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    \14\ These members and member organizations would not be 
assessed an Application Fee or Initiation Fee because they are 
already Exchange members or member organizations and have previously 
paid those fees. In addition, the monthly Account Fee would not be 
applicable to PSX Participants as MPIDs are used to identify member 
firms' participation, not account numbers.
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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 \15\ in general, and 
furthers the objectives of Section 6(b)(4) of the Act \16\ in 
particular, in that it is an equitable allocation of reasonable fees 
and other charges among Exchange members and other persons using its 
facilities.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78f(b).
    \16\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange believes that it is reasonable to waive fees as an 
incentive for existing Exchange members and member organizations to 
continue to transact business on PSX.
    The Exchange believes that the proposal is equitable and not 
unfairly discriminatory because the waiver applies uniformly to any 
members and member organizations that solely conduct an equities 
business on the Exchange. The fact that these members and member 
organizations were at the Exchange prior to the commencement of PSX 
should not prohibit them from receiving the same waiver as other 
equities members who are not conducting an options Exchange.

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.\17\ 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.
---------------------------------------------------------------------------

    \17\ 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. 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 email to rule-comments@sec.gov. Please include 
File No. SR-Phlx-2011-167 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-2011-167. This file 
number should be included on the subject line if email 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

[[Page 78057]]

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-
2011-167 and should be submitted on or before January 5, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-32139 Filed 12-14-11; 8:45 am]
BILLING CODE 8011-01-P
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