Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify Fees Applicable to the Trading of NMS Stocks Through NASDAQ OMX PSX, 82008-82009 [2011-33379]

Download as PDF 82008 Federal Register / Vol. 76, No. 250 / Thursday, December 29, 2011 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–66037; File No. SR–Phlx– 2011–177] Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify Fees Applicable to the Trading of NMS Stocks Through NASDAQ OMX PSX December 22, 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 December 16, 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 modify the fees applicable to trading of NMS stocks through NASDAQ OMX PSX (‘‘PSX’’). The text of the proposed rule change is available on the Exchange’s Web site at http://nasdaqomxphlx.cchwallstreet. com/NASDAQOMXPHLX/Filings/, at the principal office of the Exchange, on the Commission’s Web site at http:// www.sec.gov/, and at the Commission’s Public Reference Room. wreier-aviles on DSK3TPTVN1PROD with NOTICES 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. 1 15 2 17 15:12 Dec 28, 2011 1. Purpose The Exchange is proposing to modify order execution fees applicable to use of PSX. The Commission recently approved PSX’s new Minimum Life Order type,3 and this filing is designed to establish rebates applicable to its use. A Minimum Life Order is a Displayed Order that may not be cancelled for a period of 100 milliseconds following its entry. Because a party entering a Minimum Life Order incurs a degree of risk due to its inability to cancel the order for a period of time, the Exchange believes that it is appropriate to encourage use of the order through an enhanced liquidity provider rebate for such orders when they provide liquidity. The Exchange believes that it is appropriate to encourage use of the order type because it is intended to promote greater stability in the quotes available at PSX, thereby encouraging more market participants to direct orders to PSX in an effort to interact with its quotes. The Exchange thereby seeks to increase both its market share and its market quality. Currently, the Exchange offers a rebate of $0.0026 per share executed for Displayed Orders with an original order size of 2,000 or more shares, but only $0.0024 for Displayed Orders with an original order size of less than 2,000. The rebate for Non-Displayed Orders is $0.0010 per share executed. PSX proposes also to offer the higher rebate of $0.0026 per share executed to Minimum Life Orders that provide liquidity.4 PSX believes that the Minimum Life Order, with its goal of promoting more stable quotes, is complementary to PSX’s goal of encouraging quotes with greater displayed size. When a Minimum Life Order executes against an existing quote, rather than posting and providing liquidity, the market participant will pay the same fee ($0.0027 per share executed, or 0.20% of the total transaction cost for securities priced at less than $1 per share) that applies to all other liquidity-accessing orders. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with 3 See Securities Exchange Act Release No. 65926 (December 9, 2011), 76 FR 78057 (December 15, 2011) (SR–Phlx–2011–141). 4 As is the case with other liquidity-providing orders, no rebate is paid with respect to securities priced at less than $1 per share. U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Mar<15>2010 A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change Jkt 226001 PO 00000 Frm 00100 Fmt 4703 Sfmt 4703 the provisions of Section 6 of the Act,5 in general, and with Section 6(b)(4) of the Act,6 in particular, in that it provides for the equitable allocation of reasonable dues, fees and other charges among members and issuers and other persons using any facility or system which the Exchange operates or controls. Specifically, the Exchange believes that the proposed rebate for Minimum Life Orders is reasonable because it is set at a level comparable to the existing rebate for orders with an original displayed size of 2,000 or more shares. The Exchange further believes that the proposal reflects an equitable allocation of fees, as all similarly situated member organizations will be subject to the same fee structure, and access to the Exchange’s market is offered on fair and non-discriminatory terms. The Exchange further believes that it is equitable to pay a high rebate with respect to Minimum Life Orders, because (i) a market participant incurs a risk when it enters the order, which may not be cancelled for a period of time, and (ii) the Exchange expects that the higher rebate will promote its goal of encouraging display of more stable quotes that attract more order flow to the Exchange. The Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive. The Exchange believes that its fees continue to be reasonable and equitably allocated to members on the basis of whether they opt to direct orders to the Exchange and thereby make use of its order execution services. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended. Because the market for order execution and routing is extremely competitive, members may readily favor the Exchange’s competitors in making order routing decisions to the extent that they deem PSX’s fees to be excessive. Moreover, the Exchange believes that the proposal will enhance competition through its use of pricing incentives to draw greater order flow to PSX. 5 15 6 15 E:\FR\FM\29DEN1.SGM U.S.C. 78f. U.S.C. 78f(b)(4). 29DEN1 Federal Register / Vol. 76, No. 250 / Thursday, December 29, 2011 / Notices 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.7 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: wreier-aviles on DSK3TPTVN1PROD with NOTICES Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rulecomments@sec.gov. Please include File No. SR–Phlx–2011–177 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–2011–177. 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 (http://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 7 15 U.S.C. 78s(b)(3)(A)(ii). VerDate Mar<15>2010 15:12 Dec 28, 2011 Jkt 226001 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– 177 and should be submitted on or before January 19, 2012. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.8 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2011–33379 Filed 12–28–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–66032; File No. SR– NYSEAmex–2011–99] Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Supplementary Material .26 (Pegging for d-Quotes and e-Quotes) to NYSE Amex Equities Rule 70 December 22, 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 December 14, 2011, NYSE Amex LLC (the ‘‘Exchange’’ or ‘‘NYSE Amex’’) 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 Exchange. The Exchange filed the proposal as a ‘‘noncontroversial’’ proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 3 and Rule 19b–4(f)(6) thereunder.4 The Commission is publishing this notice to solicit 8 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(iii). 4 17 CFR 240.19b–4(f)(6). 1 15 PO 00000 Frm 00101 Fmt 4703 Sfmt 4703 82009 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 Supplementary Material .26 (Pegging for d-Quotes and e-Quotes) to NYSE Amex Equities Rule 70. The text of the proposed rule change is available at the Exchange, at www.nyse.com, the Commission’s Public Reference Room, and at 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 self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those 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 parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend Supplementary Material .26 (Pegging for d-Quotes and e-Quotes) to NYSE Amex Equities Rule 70. Paragraph (i) of Supplementary Material .26 states that an e-Quote may be set to provide that it will be available for execution at the national best bid (‘‘NBB’’) (for an e-Quote that represents a buy order) or at the national best offer (‘‘NBO’’) (for an e-Quote that represents a sell order) as the national best bid or offer (‘‘NBBO’’) changes, so long as the NBBO is at or within the e-Quote’s limit price. Paragraph (x) of Supplementary Material .26 further provides that, as long as the NBB or NBO is within the pegging price range selected by the Floor broker, the pegging e-Quote or dQuote will join the NBB or NBO as it is autoquoted. As such, pegging interest may peg to a price that may not be displayed at the Exchange. For example, if the NBB is $10.05 and the Exchange best bid is $10.04, a pegging e-Quote to buy will display at the Exchange at $10.05, thus creating a new Exchange best bid. Because pegging interest automatically pegs to the NBBO, under current rules and functionality, a E:\FR\FM\29DEN1.SGM 29DEN1

Agencies

[Federal Register Volume 76, Number 250 (Thursday, December 29, 2011)]
[Notices]
[Pages 82008-82009]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-33379]



[[Page 82008]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66037; File No. SR-Phlx-2011-177]


 Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Modify 
Fees Applicable to the Trading of NMS Stocks Through NASDAQ OMX PSX

December 22, 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 December 16, 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 modify the fees applicable to trading of 
NMS stocks through NASDAQ OMX PSX (``PSX''). The text of the proposed 
rule change is available on the Exchange's Web site at http://nasdaqomxphlx.cchwallstreet.com/NASDAQOMXPHLX/Filings/ com/NASDAQOMXPHLX/Filings/, at the 
principal office of the Exchange, on the Commission's Web site at 
http://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 Exchange is proposing to modify order execution fees applicable 
to use of PSX. The Commission recently approved PSX's new Minimum Life 
Order type,\3\ and this filing is designed to establish rebates 
applicable to its use. A Minimum Life Order is a Displayed Order that 
may not be cancelled for a period of 100 milliseconds following its 
entry. Because a party entering a Minimum Life Order incurs a degree of 
risk due to its inability to cancel the order for a period of time, the 
Exchange believes that it is appropriate to encourage use of the order 
through an enhanced liquidity provider rebate for such orders when they 
provide liquidity. The Exchange believes that it is appropriate to 
encourage use of the order type because it is intended to promote 
greater stability in the quotes available at PSX, thereby encouraging 
more market participants to direct orders to PSX in an effort to 
interact with its quotes. The Exchange thereby seeks to increase both 
its market share and its market quality.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 65926 (December 9, 
2011), 76 FR 78057 (December 15, 2011) (SR-Phlx-2011-141).
---------------------------------------------------------------------------

    Currently, the Exchange offers a rebate of $0.0026 per share 
executed for Displayed Orders with an original order size of 2,000 or 
more shares, but only $0.0024 for Displayed Orders with an original 
order size of less than 2,000. The rebate for Non-Displayed Orders is 
$0.0010 per share executed. PSX proposes also to offer the higher 
rebate of $0.0026 per share executed to Minimum Life Orders that 
provide liquidity.\4\ PSX believes that the Minimum Life Order, with 
its goal of promoting more stable quotes, is complementary to PSX's 
goal of encouraging quotes with greater displayed size.
---------------------------------------------------------------------------

    \4\ As is the case with other liquidity-providing orders, no 
rebate is paid with respect to securities priced at less than $1 per 
share.
---------------------------------------------------------------------------

    When a Minimum Life Order executes against an existing quote, 
rather than posting and providing liquidity, the market participant 
will pay the same fee ($0.0027 per share executed, or 0.20% of the 
total transaction cost for securities priced at less than $1 per share) 
that applies to all other liquidity-accessing orders.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\5\ in general, and with 
Section 6(b)(4) of the Act,\6\ in particular, in that it provides for 
the equitable allocation of reasonable dues, fees and other charges 
among members and issuers and other persons using any facility or 
system which the Exchange operates or controls. Specifically, the 
Exchange believes that the proposed rebate for Minimum Life Orders is 
reasonable because it is set at a level comparable to the existing 
rebate for orders with an original displayed size of 2,000 or more 
shares. The Exchange further believes that the proposal reflects an 
equitable allocation of fees, as all similarly situated member 
organizations will be subject to the same fee structure, and access to 
the Exchange's market is offered on fair and non-discriminatory terms. 
The Exchange further believes that it is equitable to pay a high rebate 
with respect to Minimum Life Orders, because (i) a market participant 
incurs a risk when it enters the order, which may not be cancelled for 
a period of time, and (ii) the Exchange expects that the higher rebate 
will promote its goal of encouraging display of more stable quotes that 
attract more order flow to the Exchange.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f.
    \6\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange notes that it operates in a highly competitive market 
in which market participants can readily favor competing venues if they 
deem fee levels at a particular venue to be excessive. The Exchange 
believes that its fees continue to be reasonable and equitably 
allocated to members on the basis of whether they opt to direct orders 
to the Exchange and thereby make use of its order execution services.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act, as amended. 
Because the market for order execution and routing is extremely 
competitive, members may readily favor the Exchange's competitors in 
making order routing decisions to the extent that they deem PSX's fees 
to be excessive. Moreover, the Exchange believes that the proposal will 
enhance competition through its use of pricing incentives to draw 
greater order flow to PSX.

[[Page 82009]]

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.\7\ 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\ 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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File No. SR-Phlx-2011-177 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-2011-177. 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 (http://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-2011-177 and should be 
submitted on or before January 19, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-33379 Filed 12-28-11; 8:45 am]
BILLING CODE 8011-01-P