Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Rebates for Adding and Removing Liquidity in SPY, 22034-22036 [2012-8781]
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22034
Federal Register / Vol. 77, No. 71 / Thursday, April 12, 2012 / Notices
mstockstill on DSK4VPTVN1PROD with NOTICES
III. Discussion and Commission
Findings
The Commission finds that the
proposed rule change is consistent with
the requirements of the Act and the
rules and regulations thereunder
applicable to a national securities
exchange.11 In particular, the
Commission believes that the proposed
rule change is consistent with Section
6(b)(5) of the Act 12 because expanding
the list of DMM obligations that are
subject to the Minor Rule Violation Plan
should afford the Exchange increased
flexibility in carrying out its supervisory
responsibilities, and, in doing so, help
to meet the aim of protecting investors
and the public interest.
The Commission also believes that the
proposed rule change is consistent with
Sections 6(b)(1) and 6(b)(6) of the Act,13
which require that an exchange enforce
compliance with, and have rules that
provide appropriate discipline for
violations of, the Act, the rules and
regulations thereunder, and Exchange
rules. As an initial matter, the proposed
rule change will further these objectives
through its clarification of the list of
Exchange rule violations that are subject
to NYSE Rule 476A by updating rule
titles and rule references, deleting
references to rules that have been
deleted, updating descriptions of rules
that have been amended, and fixing a
typographical error.
Further, the Commission recognizes
that the proposed rule change will
render violations of DMM obligations
under Rule 104 14 and Rule 123D that
were not previously on the Rule 476A
List as now eligible for treatment as
minor violations. However, the
Commission notes that designating a
rule as subject to the Minor Rule
Violation Plan does not signify that
violation of the rule will always be
deemed a minor violation. As noted by
the Exchange, Rule 476A preserves the
Exchange’s discretion to seek formal
discipline, as warranted, when
transgressions of rules designated as
eligible for the Minor Rule Violation
Plan are found to be more serious. Thus,
the Exchange will remain able to
require, on a case-by-case basis, formal
disciplinary action for any particular
violation. Therefore, the Commission
believes that the proposed rule change
will not compromise the Exchange’s
11 In approving this proposed rule change, the
Commission notes that it has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
12 15 U.S.C. 78f(b)(5).
13 15 U.S.C. 78f(b)(1) and 15 U.S.C. 78f(b)(6).
14 The Commission believes that it is appropriate
to include in NYSE Rule 476A references to rules
that are currently operating on a pilot basis.
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16:27 Apr 11, 2012
Jkt 226001
ability to seek more stringent sanctions
for the more serious violations of Rules
104 and 123D.
In addition, because NYSE Rule 476A
provides procedural rights to a person
fined under the rule, entitling the
person to contest the fine and receive a
full disciplinary proceeding,15 the
Commission believes that NYSE Rule
476A, as amended by this proposed rule
change, will provide a fair procedure for
the disciplining of Exchange members
and persons associated with members,
consistent with Sections 6(b)(7) and
6(d)(1) of the Act.16
Finally, the Commission finds that the
proposed rule change is consistent with
the public interest, the protection of
investors, or is otherwise in furtherance
of the purposes of the Act, as required
by Rule 19d–1(c)(2) under the Act,17
which governs minor rule violation
plans. The Commission believes that the
proposed changes to NYSE Rule 476A
will strengthen the Exchange’s ability to
carry out its oversight and enforcement
responsibilities as a self-regulatory
organization, in cases where full
disciplinary proceedings are unsuitable
in view of the nature of a particular
violation.
In approving this proposed rule
change, the Commission emphasizes
that in no way should the amendment
of the rule be seen as minimizing the
importance of compliance with NYSE
rules and all other rules subject to the
imposition of fines under NYSE Rule
476A. The Commission believes that the
violation of any self-regulatory
organization’s rules, as well as
Commission rules, is a serious matter.
However, NYSE Rule 476A provides a
reasonable means of addressing rule
violations that do not rise to the level of
requiring formal disciplinary
proceedings, while providing greater
flexibility in handling certain violations.
The Commission expects that the
Exchange will continue to conduct
surveillance with due diligence and
make a determination based on its
findings, on a case by-case basis, of
whether a violation requires formal
disciplinary action under Rule 476.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,18 that the
proposed rule change (SR–NYSE–2012–
05) be, and hereby is, approved.
15 See
NYSE Rule 476A(d).
U.S.C. 78f(b)(7) and 15 U.S.C. 78f(d)(1).
17 17 CFR 240.19d–1(c)(2).
18 15 U.S.C. 78s(b)(2).
16 15
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For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–8782 Filed 4–11–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–66757; File No. SR–Phlx–
2012–45]
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to
Rebates for Adding and Removing
Liquidity in SPY
April 6, 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 April 2,
2012, 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
Section I 3 of its Pricing Schedule to
further incentivize market participants
to transact SPDR S&P 500 (‘‘SPY’’) 4
options.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://nasdaqtrader.com/
micro.aspx?id=PHLXRulefilings, 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
19 17 CFR 200.30–3(a)(12); 17 CFR 200.30–
3(a)(44).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 Section I of the Exchange’s Pricing Schedule is
entitled ‘‘Rebates and Fees for Adding and
Removing Liquidity in Select Symbols.’’
4 SPY is one of the Select Symbols subject to the
rebates and fees in Section I. A complete list of
Select Symbols is included in Section I of the
Pricing Schedule.
E:\FR\FM\12APN1.SGM
12APN1
Federal Register / Vol. 77, No. 71 / Thursday, April 12, 2012 / Notices
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
mstockstill on DSK4VPTVN1PROD with NOTICES
1. Purpose
The Exchange proposes to further
incentivize Customers who transact
Complex Orders in SPY. The Exchange
currently pays a Customer Complex
Order Rebate for Adding Liquidity of
$0.32 per contract and a Customer
Complex Order Rebate for Removing
Liquidity of $0.06 per contract. The
Exchange is proposing to amend Section
I of the Pricing Schedule to specify that
the Exchange will increase the Customer
Complex Order Rebates for Adding and
Removing Liquidity by $0.01 per
contract for transactions in SPY.
Therefore, Customer Complex Orders
that add liquidity in SPY will receive a
rebate of $0.33 per contract and
Customer Complex Orders that remove
liquidity in SPY will receive a rebate of
$0.07 per contract.
2. Statutory Basis
The Exchange believes that its
proposal to amend its Pricing Schedule
is consistent with Section 6(b) of the
Act 5 in general, and furthers the
objectives of Section 6(b)(4) of the Act 6
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’s proposal to further
incentivize Customers who transact
Complex Orders in SPY is reasonable
because Customer Complex Orders are
becoming an increasingly important
segment of options trading. The
Exchange believes that it is reasonable
to further incentivize Customer
Complex Orders by offering a $0.01 per
contract incentive for SPY options in
addition to the Customer Complex
Order Rebates for Adding and Removing
Liquidity because the Exchange seeks to
incentivize market participants to direct
and transact a greater number of
Customer Complex Orders at the
Exchange, particularly in SPY. Creating
these incentives and attracting Customer
Complex Orders to the Exchange, in
7 For March 2012, SPY options accounted for
17.21% of the total listed equity and ETF options
volume traded in the U.S.
5 15
U.S.C. 78f(b).
6 15 U.S.C. 78f(b)(4).
VerDate Mar<15>2010
16:27 Apr 11, 2012
turn, benefits all market participants
through increased liquidity at the
Exchange. The Exchange’s proposal to
further incentivize Customers who
transact Complex Orders in SPY is
equitable and not unfairly
discriminatory because the Exchange
will uniformly pay an additional $0.01
per contract incentive in addition to the
Customer Complex Order Rebates for
Adding and Removing Liquidity to all
Customer Complex Orders in SPY that
receive the rebates.
Further, the Exchange also believes it
is reasonable, equitable and not unfairly
discriminatory to only offer rebates to
Customers and not other market
participants because Customer Complex
Order flow brings unique benefits to the
marketplace in terms of liquidity and
order interaction. It is an important
Exchange function to provide an
opportunity to all market participants to
trade against Customer Complex Orders.
In addition, the Exchange believes
that paying an additional $0.01 per
contract incentive in addition to the
Customer Complex Order Rebates for
Adding and Removing Liquidity in SPY,
as compared to other option symbols, is
reasonable, equitable and not unfairly
discriminatory because any market
participant is able to transact a
Customer Complex Order in SPY and
receive the additional rebate incentive
regardless of volume. There is no
requirement to transact a certain volume
of Customer Complex Orders to qualify
for the additional $0.01 per contract
rebate incentive. Further, options
overlying SPY are the most actively
traded equity and ETF option in the
United States (U.S.), accounting for
more than 15% of the total volume on
any given day.7 Because of the
substantial volume opportunity, the
Exchange believes this additional $0.01
per contract incentive for SPY, as
compared to other symbols, would
continue to attract volume to the
Exchange and benefit all market
participants.
The Exchange operates in a highly
competitive market, comprised of nine
exchanges, in which market participants
can easily and readily direct order flow
to competing venues if they deem fee
levels at a particular venue to be
excessive. Accordingly, the rebates paid
by the Exchange must remain
competitive with rebates offered by
other venues and therefore must
continue to be reasonable and equitably
allocated to those members that opt to
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22035
direct orders to the Exchange rather
than competing venues.
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.8 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:
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–2012–45 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–2012–45. This file number
should be included on the subject line
if email is used. To help the
Commission process and review your
8 15
E:\FR\FM\12APN1.SGM
U.S.C. 78s(b)(3)(A)(ii).
12APN1
22036
Federal Register / Vol. 77, No. 71 / Thursday, April 12, 2012 / Notices
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of 10
a.m. and 3 p.m. Copies of such filing
also will be available for inspection and
copying at the principal office of the
Exchange. All comments received will
be posted without change; the
Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File No. SR–Phlx–2012–
45 and should be submitted on or before
May 3, 2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.9
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–8781 Filed 4–11–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–66756; File No. SR–Phlx–
2012–43]
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to
Rebates and Fees for Adding and
Removing Liquidity in Select Symbols
mstockstill on DSK4VPTVN1PROD with NOTICES
April 6, 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 March 28,
2012, 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,
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 amend the list of Select
Symbols in Section I of the Exchange’s
Pricing Schedule, entitled ‘‘Rebates and
Fees for Adding and Removing
Liquidity in Select Symbols’’ in order to
attract additional order flow to the
Exchange.
The Exchange displays a list of Select
Symbols in its Pricing Schedule at
Section I, ‘‘Rebates and Fees for Adding
and Removing Liquidity in Select
Symbols,’’ which are subject to the
rebates and fees in that section. The
term ‘‘Select Symbols’’ refers to the symbols
which are subject to the Rebates and Fees for
Adding and Removing Liquidity in Section I of the
Exchange’s Pricing Schedule.
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
16:27 Apr 11, 2012
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Section I of the Exchange’s Pricing
Schedule entitled ‘‘Rebates and Fees for
Adding and Removing Liquidity in
Select Symbols,’’ specifically to remove
various Select Symbols.3
While changes to the Pricing
Schedule pursuant to this proposal are
effective upon filing, the Exchange has
designated these changes to be operative
on April 2, 2012.
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, and at
the Commission’s Public Reference
Room.
3 The
9 17
VerDate Mar<15>2010
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.
Jkt 226001
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Frm 00076
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Sfmt 4703
Exchange is proposing to delete the
following symbols from the list of Select
Symbols in Section I of the Pricing
Schedule: Apple Inc. (‘‘AAPL’’);
Citigroup, Inc. (‘C’’); JP Morgan Chase &
Co. (‘‘JPM’’); Amazon.com, Inc.
(‘‘AMZN’’); AT&T Inc. (‘‘T’’),
Caterpillar, Inc. (‘‘CAT’’); Exxon Mobil
Corporation Common (‘‘XOM’’);
International Business Machines
(‘‘IBM’’); and American Express
Company Common (‘‘AXP’’)
(collectively ‘‘Proposed Deleted
Symbols’’). These Proposed Deleted
Symbols would be subject to the rebates
and fees in Section II of the Pricing
Schedule entitled ‘‘Equity Options
Fees.’’ 4
While changes to the Pricing
Schedule pursuant to this proposal are
effective upon filing, the Exchange has
designated these changes to be operative
on April 2, 2012.
2. Statutory Basis
The Exchange believes that its
proposal to amend its Pricing Schedule
is consistent with Section 6(b) of the
Act 5 in general, and furthers the
objectives of Section 6(b)(4) of the Act 6
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 remove the Proposed
Deleted Symbols from its list of Select
Symbols to attract additional order flow
to the Exchange. The Exchange believes
that applying the fees in Section II of the
Pricing Schedule to the Proposed
Deleted Symbols, including the
opportunity to receive payment for
order flow, will attract order flow to the
Exchange.
The Exchange believes that it is
equitable and not unfairly
discriminatory to amend its list of Select
Symbols to remove the Proposed
Deleted Symbols because the list of
Select Symbols would apply uniformly
to all categories of participants in the
same manner. All market participants
who trade the Select Symbols would be
subject to the rebates and fees in Section
I of the Pricing Schedule, which would
not include the Proposed Deleted
Symbols. Also, all market participants
would be uniformly subject to the fees
in Section II, which would include the
Proposed Deleted Symbols.
4 Section II includes options overlying equities,
ETFs, ETNs, indexes and HOLDRs which are
Multiply Listed.
5 15 U.S.C. 78f(b).
6 15 U.S.C. 78f(b)(4).
E:\FR\FM\12APN1.SGM
12APN1
]]>Agencies
[Federal Register Volume 77, Number 71 (Thursday, April 12, 2012)]
[Notices]
[Pages 22034-22036]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-8781]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-66757; File No. SR-Phlx-2012-45]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Rebates for Adding and Removing Liquidity in SPY
April 6, 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 April 2, 2012, NASDAQ OMX PHLX LLC (``Phlx'' or ``Exchange'')
filed with the Securities and Exchange Commission (``SEC'' or
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Section I \3\ of its Pricing
Schedule to further incentivize market participants to transact SPDR
S&P 500 (``SPY'') \4\ options.
---------------------------------------------------------------------------
\3\ Section I of the Exchange's Pricing Schedule is entitled
``Rebates and Fees for Adding and Removing Liquidity in Select
Symbols.''
\4\ SPY is one of the Select Symbols subject to the rebates and
fees in Section I. A complete list of Select Symbols is included in
Section I of the Pricing Schedule.
---------------------------------------------------------------------------
The text of the proposed rule change is available on the Exchange's
Web site at https://nasdaqtrader.com/micro.aspx?id=PHLXRulefilings, 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
[[Page 22035]]
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 proposes to further incentivize Customers who transact
Complex Orders in SPY. The Exchange currently pays a Customer Complex
Order Rebate for Adding Liquidity of $0.32 per contract and a Customer
Complex Order Rebate for Removing Liquidity of $0.06 per contract. The
Exchange is proposing to amend Section I of the Pricing Schedule to
specify that the Exchange will increase the Customer Complex Order
Rebates for Adding and Removing Liquidity by $0.01 per contract for
transactions in SPY. Therefore, Customer Complex Orders that add
liquidity in SPY will receive a rebate of $0.33 per contract and
Customer Complex Orders that remove liquidity in SPY will receive a
rebate of $0.07 per contract.
2. Statutory Basis
The Exchange believes that its proposal to amend its Pricing
Schedule is consistent with Section 6(b) of the Act \5\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \6\ in
particular, in that it is an equitable allocation of reasonable fees
and other charges among Exchange members and other persons using its
facilities.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
The Exchange's proposal to further incentivize Customers who
transact Complex Orders in SPY is reasonable because Customer Complex
Orders are becoming an increasingly important segment of options
trading. The Exchange believes that it is reasonable to further
incentivize Customer Complex Orders by offering a $0.01 per contract
incentive for SPY options in addition to the Customer Complex Order
Rebates for Adding and Removing Liquidity because the Exchange seeks to
incentivize market participants to direct and transact a greater number
of Customer Complex Orders at the Exchange, particularly in SPY.
Creating these incentives and attracting Customer Complex Orders to the
Exchange, in turn, benefits all market participants through increased
liquidity at the Exchange. The Exchange's proposal to further
incentivize Customers who transact Complex Orders in SPY is equitable
and not unfairly discriminatory because the Exchange will uniformly pay
an additional $0.01 per contract incentive in addition to the Customer
Complex Order Rebates for Adding and Removing Liquidity to all Customer
Complex Orders in SPY that receive the rebates.
Further, the Exchange also believes it is reasonable, equitable and
not unfairly discriminatory to only offer rebates to Customers and not
other market participants because Customer Complex Order flow brings
unique benefits to the marketplace in terms of liquidity and order
interaction. It is an important Exchange function to provide an
opportunity to all market participants to trade against Customer
Complex Orders.
In addition, the Exchange believes that paying an additional $0.01
per contract incentive in addition to the Customer Complex Order
Rebates for Adding and Removing Liquidity in SPY, as compared to other
option symbols, is reasonable, equitable and not unfairly
discriminatory because any market participant is able to transact a
Customer Complex Order in SPY and receive the additional rebate
incentive regardless of volume. There is no requirement to transact a
certain volume of Customer Complex Orders to qualify for the additional
$0.01 per contract rebate incentive. Further, options overlying SPY are
the most actively traded equity and ETF option in the United States
(U.S.), accounting for more than 15% of the total volume on any given
day.\7\ Because of the substantial volume opportunity, the Exchange
believes this additional $0.01 per contract incentive for SPY, as
compared to other symbols, would continue to attract volume to the
Exchange and benefit all market participants.
---------------------------------------------------------------------------
\7\ For March 2012, SPY options accounted for 17.21% of the
total listed equity and ETF options volume traded in the U.S.
---------------------------------------------------------------------------
The Exchange operates in a highly competitive market, comprised of
nine exchanges, in which market participants can easily and readily
direct order flow to competing venues if they deem fee levels at a
particular venue to be excessive. Accordingly, the rebates paid by the
Exchange must remain competitive with rebates offered by other venues
and therefore must continue to be reasonable and equitably allocated to
those members that opt to direct orders to the Exchange rather than
competing venues.
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.\8\ At any time within 60 days of the filing
of the proposed rule change, the Commission summarily may temporarily
suspend such rule change if it appears to the Commission that such
action is necessary or appropriate in the public interest, for the
protection of investors, or otherwise in furtherance of the purposes of
the Act. If the Commission takes such action, the Commission shall
institute proceedings to determine whether the proposed rule should be
approved or disapproved.
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\8\ 15 U.S.C. 78s(b)(3)(A)(ii).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File No. SR-Phlx-2012-45 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-2012-45. This file
number should be included on the subject line if email is used. To help
the Commission process and review your
[[Page 22036]]
comments more efficiently, please use only one method. The Commission
will post all comments on the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent
amendments, all written statements with respect to the proposed rule
change that are filed with the Commission, and all written
communications relating to the proposed rule change between the
Commission and any person, other than those that may be withheld from
the public in accordance with the provisions of 5 U.S.C. 552, will be
available for Web site viewing and printing in the Commission's Public
Reference Room, 100 F Street NE., Washington, DC 20549, on official
business days between the hours of 10 a.m. and 3 p.m. Copies of such
filing also will be available for inspection and copying at the
principal office of the Exchange. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File No. SR-Phlx-2012-45 and should be submitted on or before May 3,
2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-8781 Filed 4-11-12; 8:45 am]
BILLING CODE 8011-01-P
