Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use of BATS Exchange, Inc., 8310-8312 [2012-3332]

Download as PDF 8310 Federal Register / Vol. 77, No. 30 / Tuesday, February 14, 2012 / Notices Act 14 and Rule 19b–4(f)(6) 15 thereunder. The Exchange has requested that the Commission waive the 30-day operative delay. The Commission believes that waiver of the operative delay is consistent with the protection of investors and the public interest because the proposed rule change presents no novel issues, and the BX members are currently subject to FINRA Rule 4360. Therefore, the Commission designates the proposal operative upon filing.16 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. 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 Number SR– BX–2012–008 on the subject line. Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–BX–2012–008. 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 14 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. 16 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). mstockstill on DSK4VPTVN1PROD with NOTICES 15 17 VerDate Mar<15>2010 21:57 Feb 13, 2012 Jkt 226001 submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–BX– 2012–008 and should be submitted on or before March 6, 2012. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–3333 Filed 2–13–12; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–66358; File No. SR–BATS– 2012–006] Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use of BATS Exchange, Inc. February 8, 2012. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on February 1, 2012, BATS Exchange, Inc. (the ‘‘Exchange’’ or ‘‘BATS’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Exchange has designated the proposed rule change as one establishing or changing a member due, fee, or other charge imposed by the Exchange under 17 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00098 Fmt 4703 Sfmt 4703 Section 19(b)(3)(A)(ii) of the Act 3 and Rule 19b–4(f)(2) thereunder,4 which renders the proposed rule change effective upon filing with the Commission. 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 [sic] amend the fee schedule applicable to Members 5 and non-members of the Exchange pursuant to BATS Rules 15.1(a) and (c). Changes will become operative on February 1, 2012. The text of the proposed rule change is available at the Exchange’s Web site at https://www.batstrading.com, at the principal office of the Exchange, 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 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 modify the ‘‘Options Pricing’’ section of its fee schedule to change pricing with respect to orders routed to NASDAQ OMX PHLX LLC (‘‘PHLX’’). PHLX has recently introduced increases to its rates to remove liquidity in specified symbols 6 identified by the Exchange as 3 15 U.S.C. 78s(b)(3)(A)(ii). CFR 240.19b–4(f)(2). 5 A Member is any registered broker or dealer that has been admitted to membership in the Exchange. 6 See Securities Exchange Act Release No. 66100 (January 4, 2012), 77 FR 1532 (January 10, 2012) (SR–Phlx–2011–185) (notice of filing and immediate effectiveness of proposal to modify fees, including an increase to the Customer Fee for Removing Liquidity from $0.29 per contract to $0.31 per contract); Securities Exchange Act Release No. 65940 (December 12, 2011), 76 FR 78322 (December 16, 2011) (SR–Phlx–2011–162) (notice of filing and immediate effectiveness of proposal to modify fees, including an increase to the Customer 4 17 E:\FR\FM\14FEN1.SGM 14FEN1 Federal Register / Vol. 77, No. 30 / Tuesday, February 14, 2012 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES Make/Take issues (identified as ‘‘Select Symbols’’ at PHLX).7 Further, PHLX has recently announced an increase to its current fee of $0.31 per contract to $0.39 per contract for customer orders that remove liquidity in Make/Take issues.8 The Exchange currently charges certain flat rates for routing to other options exchanges that have been placed into three groups based on the approximate cost of routing to such venues. The grouping of away options exchanges is based on the cost of transaction fees assessed by each venue as well as costs to the Exchange for routing (i.e., clearing fees, infrastructure costs, etc.). The Exchange currently assesses fees of $0.30 per contract for Customer 9 orders and $0.55 per contract for Professional,10 Firm or Market Maker 11 orders routed to PHLX in Make/Take issues.12 At the current rates, the Exchange is not currently covering its costs on Customer orders routed to PHLX in Make/Take issues, based on the existing base rate of $0.31 per contract plus additional costs incurred by the Exchange. With the proposal by PHLX to increase fees for Customer orders that remove liquidity to $0.39 per share, the Exchange will be even further from the cost of routing customer orders to PHLX if the Exchange continues to charge $0.30 per contract. In order to better approximate the cost to the Exchange of routing Customer orders to PHLX, the Exchange proposes to place PHLX in the away options exchange grouping along with the Nasdaq Options Market (‘‘NOM’’), C2 Options Exchange, Fee for Removing Liquidity from $0.25 per contract to $0.29 per contract). 7 As defined on the fee schedule, Make/Take pricing refers to executions at the identified exchange under which ‘‘Post Liquidity’’ or ‘‘Maker’’ rebates (‘‘Make’’) are credited by that exchange and ‘‘Take Liquidity’’ or ‘‘Taker’’ fees (‘‘Take’’) are charged by that exchange. 8 See Options Trader Alert #2012–4, ‘‘PHLX and NOM Announce Updated Pricing for Customer Orders,’’ January 25, 2012. 9 As defined on the Exchange’s fee schedule, a Customer order refers to an order identified by a Member for clearing in the Customer range at the Options Clearing Corporation (‘‘OCC’’), excluding any transaction for a ‘‘Professional’’ as defined in Exchange Rule 16.1. 10 The term ‘‘Professional’’ is defined in Exchange Rule 16.1 to mean any person or entity that (A) is not a broker or dealer in securities, and (B) places more than 390 orders in listed options per day on average during a calendar month for its own beneficial account(s). 11 As defined on the Exchange’s fee schedule, the terms ‘‘Firm’’ and ‘‘Market Maker’’ apply to any transaction identified by a member for clearing in the Firm or Market Maker range, respectively, at the OCC. 12 As defined on the fee schedule, Make/Take pricing refers to executions at the identified exchange under which ‘‘Post Liquidity’’ or ‘‘Maker’’ rebates (‘‘Make’’) are credited by that exchange and ‘‘Take Liquidity’’ or ‘‘Taker’’ fees (‘‘Take’’) are charged by that exchange. VerDate Mar<15>2010 21:57 Feb 13, 2012 Jkt 226001 Incorporated (‘‘C2’’), and NYSE Arca Options (‘‘Arca’’) in Make/Take issues. Accordingly, the Exchange proposes to charge a fee of $0.50 per contract for Customer orders and to continue to charge $0.55 per contract for Professional, Firm, or Market Maker orders routed to and executed at PHLX. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6 of the Act.13 Specifically, the Exchange believes that the proposed rule change is consistent with Section 6(b)(4) of the Act,14 in that it provides for the equitable allocation of reasonable dues, fees and other charges among members and other persons using any facility or system which the Exchange operates or controls. The Exchange notes that it operates in a highly competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive. The Exchange also notes that with respect to the change proposed in this filing, although routing options are available to all Users, Users are not required to use the Exchange’s routing services, but instead, the Exchange’s routing services are completely optional. Members can manage their own routing to different options exchanges or can utilize a myriad of other routing solutions that are available to market participants. The Exchange believes that its proposal to modify routing fees to PHLX is reasonable because the modified fee is a better approximation of the cost to the Exchange for routing Customer orders to PHLX. The Exchange believes that its flat fee structure for orders routed to various venues is a fair and equitable approach to pricing, as it provides certainty with respect to execution fees at groups of away options exchanges. Under its flat fee structure, the Exchange has previously operated at a slight loss for Customer orders routed to and executed at PHLX. The Exchange believes that the proposed change will allow it to recoup and better cover its costs of providing routing services going forward. The Exchange also believes that the proposed fees for orders routed to and executed at PHLX are fair and equitable and not unreasonably discriminatory in that they apply equally to all Exchange Users. 13 15 14 15 PO 00000 U.S.C. 78f. U.S.C. 78f(b)(4). Frm 00099 Fmt 4703 B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change imposes any burden on competition. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Pursuant to Section 19(b)(3)(A)(ii) of the Act 15 and Rule 19b–4(f)(2) thereunder,16 the Exchange has designated this proposal as establishing or changing a due, fee, or other charge applicable to the Exchange’s Members and non-members, which renders the proposed rule change effective upon filing. 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. 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 Number SR–BATS–2012–006 on the subject line. Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–BATS–2012–006. 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 15 15 16 17 Sfmt 4703 8311 E:\FR\FM\14FEN1.SGM U.S.C. 78s(b)(3)(A)(ii). CFR 240.19b–4(f)(2). 14FEN1 8312 Federal Register / Vol. 77, No. 30 / Tuesday, February 14, 2012 / Notices 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 will also 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–BATS– 2012–006 and should be submitted on or before March 6, 2012. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–3332 Filed 2–13–12; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–66360; File No. SR– NASDAQ–2012–022] Self-Regulatory Organizations; NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Options Fees February 8, 2012. 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 January 31, 2012, The NASDAQ Stock Market LLC (‘‘NASDAQ’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by NASDAQ. 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 NASDAQ Stock Market LLC proposes to modify Chapter XV, entitled ‘‘Option Fees,’’ at Sec. 2 governing pricing for NASDAQ members using the NASDAQ Options Market (‘‘NOM’’), NASDAQ’s facility for executing and routing standardized equity and index options. Specifically, NOM proposes to amend the applicability of the Customer Rebate to Add Liquidity and Fee for Removing Liquidity for the Penny Pilot 3 Options (‘‘Penny Options’’). While changes to the Fee Schedule pursuant to this proposal are effective upon filing, the Exchange has designated these changes to be operative on February 1, 2012. The text of the proposed rule change is available on the Exchange’s Web site at https:// www.nasdaq.cchwallstreet.com, at the principal office of the Exchange, 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. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose NASDAQ proposes to modify Chapter XV, entitled ‘‘Option Fees,’’ at Sec. 2 governing the rebates and fees assessed for option orders entered into NOM. Specifically, the Exchange is proposing to modify the four tier structure for paying Customer Rebates to Add Liquidity in Penny Pilot Options. The Exchange proposes to increase the tiers to five tiers and further incentivize NOM Participants to route Customer orders to the Exchange by paying an additional rebate for certain orders after the NOM Participant has met a volume criteria. The Exchange believes that incentivizing NOM Participants to send additional Customer orders to the Exchange will benefit all market participants by adding liquidity to the market. Specifically, the Exchange currently pays a Customer Rebate to Add Liquidity in Penny Pilot Options based on the following tier structure: Rebate to add liquidity Monthly volume mstockstill on DSK4VPTVN1PROD with NOTICES Tier 1 ................. Tier 2 ................. Tier 3 a ............... Participant adds Customer liquidity of up to 49,999 contracts per day in a month ........................................ Participant adds Customer liquidity of 50,000 or more contracts per day in a month .................................... Participant adds (1) Customer liquidity of 100,000 or more contracts per day in a month, and (2) NOM Market Maker liquidity of 40,000 or more contracts per day in a month. 17 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 The Penny Pilot was established in March 2008 and in October 2009 was expanded and extended through June 30, 2012. See Securities Exchange Act Release Nos. 57579 (March 28, 2008), 73 FR 18587 (April 4, 2008) (SR–NASDAQ–2008–026) (notice of filing and immediate effectiveness establishing 1 15 VerDate Mar<15>2010 21:57 Feb 13, 2012 Jkt 226001 Penny Pilot); 60874 (October 23, 2009), 74 FR 56682 (November 2, 2009) (SR–NASDAQ–2009–091) (notice of filing and immediate effectiveness expanding and extending Penny Pilot); 60965 (November 9, 2009), 74 FR 59292 (November 17, 2009) (SR–NASDAQ–2009–097) (notice of filing and immediate effectiveness adding seventy-five classes to Penny Pilot); 61455 (February 1, 2010), 75 FR 6239 (February 8, 2010) (SR–NASDAQ– 2010–013) (notice of filing and immediate PO 00000 Frm 00100 Fmt 4703 Sfmt 4703 $0.26 0.42 0.43 effectiveness adding seventy-five classes to Penny Pilot); 62029 (May 4, 2010), 75 FR 25895 (May 10, 2010) (SR–NASDAQ–2010–053) (notice of filing and immediate effectiveness adding seventy-five classes to Penny Pilot); 65969 (December 15, 2011, 76 FR 79268 (December 21, 2011) (SR–NASDAQ– 2011–169) (notice of filing and immediate effectiveness extension and replacement of Penny Pilot). See also Exchange Rule Chapter VI, Section 5. E:\FR\FM\14FEN1.SGM 14FEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 77, Number 30 (Tuesday, February 14, 2012)]
[Notices]
[Pages 8310-8312]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-3332]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66358; File No. SR-BATS-2012-006]

Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change Related to
Fees for Use of BATS Exchange, Inc.

February 8, 2012.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on February 1, 2012, BATS Exchange, Inc. (the ``Exchange'' or
``BATS'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Exchange has designated the proposed rule change as one establishing or
changing a member due, fee, or other charge imposed by the Exchange
under Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2)
thereunder,\4\ which renders the proposed rule change effective upon
filing with the Commission. 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.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

The Exchange proposes [sic] amend the fee schedule applicable to
Members \5\ and non-members of the Exchange pursuant to BATS Rules
15.1(a) and (c). Changes will become operative on February 1, 2012.
---------------------------------------------------------------------------

\5\ A Member is any registered broker or dealer that has been
admitted to membership in the Exchange.
---------------------------------------------------------------------------

The text of the proposed rule change is available at the Exchange's
Web site at https://www.batstrading.com, at the principal office of the
Exchange, 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 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 modify the ``Options Pricing'' section of
its fee schedule to change pricing with respect to orders routed to
NASDAQ OMX PHLX LLC (``PHLX''). PHLX has recently introduced increases
to its rates to remove liquidity in specified symbols \6\ identified by
the Exchange as

[[Page 8311]]

Make/Take issues (identified as ``Select Symbols'' at PHLX).\7\
Further, PHLX has recently announced an increase to its current fee of
$0.31 per contract to $0.39 per contract for customer orders that
remove liquidity in Make/Take issues.\8\ The Exchange currently charges
certain flat rates for routing to other options exchanges that have
been placed into three groups based on the approximate cost of routing
to such venues. The grouping of away options exchanges is based on the
cost of transaction fees assessed by each venue as well as costs to the
Exchange for routing (i.e., clearing fees, infrastructure costs, etc.).
The Exchange currently assesses fees of $0.30 per contract for Customer
\9\ orders and $0.55 per contract for Professional,\10\ Firm or Market
Maker \11\ orders routed to PHLX in Make/Take issues.\12\ At the
current rates, the Exchange is not currently covering its costs on
Customer orders routed to PHLX in Make/Take issues, based on the
existing base rate of $0.31 per contract plus additional costs incurred
by the Exchange. With the proposal by PHLX to increase fees for
Customer orders that remove liquidity to $0.39 per share, the Exchange
will be even further from the cost of routing customer orders to PHLX
if the Exchange continues to charge $0.30 per contract. In order to
better approximate the cost to the Exchange of routing Customer orders
to PHLX, the Exchange proposes to place PHLX in the away options
exchange grouping along with the Nasdaq Options Market (``NOM''), C2
Options Exchange, Incorporated (``C2''), and NYSE Arca Options
(``Arca'') in Make/Take issues. Accordingly, the Exchange proposes to
charge a fee of $0.50 per contract for Customer orders and to continue
to charge $0.55 per contract for Professional, Firm, or Market Maker
orders routed to and executed at PHLX.
---------------------------------------------------------------------------

\6\ See Securities Exchange Act Release No. 66100 (January 4,
2012), 77 FR 1532 (January 10, 2012) (SR-Phlx-2011-185) (notice of
filing and immediate effectiveness of proposal to modify fees,
including an increase to the Customer Fee for Removing Liquidity
from $0.29 per contract to $0.31 per contract); Securities Exchange
Act Release No. 65940 (December 12, 2011), 76 FR 78322 (December 16,
2011) (SR-Phlx-2011-162) (notice of filing and immediate
effectiveness of proposal to modify fees, including an increase to
the Customer Fee for Removing Liquidity from $0.25 per contract to
$0.29 per contract).
\7\ As defined on the fee schedule, Make/Take pricing refers to
executions at the identified exchange under which ``Post Liquidity''
or ``Maker'' rebates (``Make'') are credited by that exchange and
``Take Liquidity'' or ``Taker'' fees (``Take'') are charged by that
exchange.
\8\ See Options Trader Alert 2012-4, ``PHLX and NOM
Announce Updated Pricing for Customer Orders,'' January 25, 2012.
\9\ As defined on the Exchange's fee schedule, a Customer order
refers to an order identified by a Member for clearing in the
Customer range at the Options Clearing Corporation (``OCC''),
excluding any transaction for a ``Professional'' as defined in
Exchange Rule 16.1.
\10\ The term ``Professional'' is defined in Exchange Rule 16.1
to mean any person or entity that (A) is not a broker or dealer in
securities, and (B) places more than 390 orders in listed options
per day on average during a calendar month for its own beneficial
account(s).
\11\ As defined on the Exchange's fee schedule, the terms
``Firm'' and ``Market Maker'' apply to any transaction identified by
a member for clearing in the Firm or Market Maker range,
respectively, at the OCC.
\12\ As defined on the fee schedule, Make/Take pricing refers to
executions at the identified exchange under which ``Post Liquidity''
or ``Maker'' rebates (``Make'') are credited by that exchange and
``Take Liquidity'' or ``Taker'' fees (``Take'') are charged by that
exchange.
---------------------------------------------------------------------------

2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder that are applicable to a national securities exchange, and,
in particular, with the requirements of Section 6 of the Act.\13\
Specifically, the Exchange believes that the proposed rule change is
consistent with Section 6(b)(4) of the Act,\14\ in that it provides for
the equitable allocation of reasonable dues, fees and other charges
among members and other persons using any facility or system which the
Exchange operates or controls. The Exchange notes that it operates in a
highly competitive market in which market participants can readily
direct order flow to competing venues if they deem fee levels at a
particular venue to be excessive. The Exchange also notes that with
respect to the change proposed in this filing, although routing options
are available to all Users, Users are not required to use the
Exchange's routing services, but instead, the Exchange's routing
services are completely optional. Members can manage their own routing
to different options exchanges or can utilize a myriad of other routing
solutions that are available to market participants.
---------------------------------------------------------------------------

\13\ 15 U.S.C. 78f.
\14\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

The Exchange believes that its proposal to modify routing fees to
PHLX is reasonable because the modified fee is a better approximation
of the cost to the Exchange for routing Customer orders to PHLX. The
Exchange believes that its flat fee structure for orders routed to
various venues is a fair and equitable approach to pricing, as it
provides certainty with respect to execution fees at groups of away
options exchanges. Under its flat fee structure, the Exchange has
previously operated at a slight loss for Customer orders routed to and
executed at PHLX. The Exchange believes that the proposed change will
allow it to recoup and better cover its costs of providing routing
services going forward. The Exchange also believes that the proposed
fees for orders routed to and executed at PHLX are fair and equitable
and not unreasonably discriminatory in that they apply equally to all
Exchange Users.

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

The Exchange does not believe that the proposed rule change imposes
any burden on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others

No written comments were solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

Pursuant to Section 19(b)(3)(A)(ii) of the Act \15\ and Rule 19b-
4(f)(2) thereunder,\16\ the Exchange has designated this proposal as
establishing or changing a due, fee, or other charge applicable to the
Exchange's Members and non-members, which renders the proposed rule
change effective upon filing.
---------------------------------------------------------------------------

\15\ 15 U.S.C. 78s(b)(3)(A)(ii).
\16\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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.

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 Number SR-BATS-2012-006 on the subject line.

Paper Comments

Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-BATS-2012-006. 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

[[Page 8312]]

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 will also 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-BATS-2012-006 and should be submitted on or before March 6,
2012.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
---------------------------------------------------------------------------

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

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-3332 Filed 2-13-12; 8:45 am]
BILLING CODE 8011-01-P

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.