Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Reversal and Conversion Strategies, 32165-32167 [2012-13144]
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srobinson on DSK4SPTVN1PROD with NOTICES
Federal Register / Vol. 77, No. 105 / Thursday, May 31, 2012 / Notices
existing rules governing the trading of
equity securities. In support of this
proposal, the Exchange has made
representations, including:
(1) The Shares will be subject to
NYSE Arca Equities Rule 8.600, which
sets forth the initial and continued
listing criteria applicable to Managed
Fund Shares.
(2) The Exchange has appropriate
rules to facilitate transactions in the
Shares during all trading sessions.
(3) The Exchange’s surveillance
procedures applicable to derivative
products, which include Managed Fund
Shares, are adequate to properly
monitor Exchange trading of the Shares
in all trading sessions and to deter and
detect violations of Exchange rules and
applicable federal securities laws.
(4) Prior to the commencement of
trading, the Exchange will inform its
Equity Trading Permit Holders in an
Information Bulletin of the special
characteristics and risks associated with
trading the Shares. Specifically, the
Information Bulletin will discuss the
following: (a) The procedures for
purchases and redemptions of Shares in
Creation Unit aggregations (and that
Shares are not individually redeemable);
(b) NYSE Arca Equities Rule 9.2(a),
which imposes a duty of due diligence
on its Equity Trading Permit Holders to
learn the essential facts relating to every
customer prior to trading the Shares; (c)
the risks involved in trading the Shares
during the Opening and Late Trading
Sessions when an updated PIV will not
be calculated or publicly disseminated;
(d) how information regarding the PIV is
disseminated; (e) the requirement that
Equity Trading Permit Holders deliver a
prospectus to investors purchasing
newly issued Shares prior to or
concurrently with the confirmation of a
transaction; and (f) trading information.
(5) For initial and/or continued
listing, the Fund must be in compliance
with Rule 10A–3 under the Act,28 as
provided by NYSE Arca Equities Rule
5.3.
(6) The Fund may hold up to an
aggregate amount of 15% of its net
assets in: (a) Illiquid securities; (b) Rule
144A securities; and (c) loan interests
(such as loan participations and
assignments, but not including LPNs).
(7) The Fund expects that no more
than 30% of the value of the Fund’s net
assets will be invested in derivative
instruments, and such investments will
be consistent with the Fund’s
investment objective and will not be
used to enhance leverage.
(8) The Fund will not invest in nonU.S. equity securities.
28 See
17 CFR 240.10A–3.
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(9) A minimum of 100,000 Shares of
the Fund will be outstanding at the
commencement of trading on the
Exchange.
This approval order is based on all of
the Exchange’s representations.
For the foregoing reasons, the
Commission finds that the proposed
rule change is consistent with Section
6(b)(5) of the Act 29 and the rules and
regulations thereunder applicable to a
national securities exchange.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,30 that the
proposed rule change (SR–NYSEArca–
2012–25) be, and it hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.31
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–13145 Filed 5–30–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–67047; File No. SR–Phlx–
2012–70]
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to
Reversal and Conversion Strategies
May 23, 2012.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 2 thereunder,
notice is hereby given that, on May 16,
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 a
fee cap on equity options transactions
29 15
U.S.C. 78f(b)(5).
U.S.C. 78s(b)(2).
31 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
30 15
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32165
on certain reversals 3 and conversion 4
strategies in Section II, entitled ‘‘Equity
Options Fees.’’ 5 The Exchange also
proposes to make technical amendments
to the Pricing Schedule.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://www.nasdaqtrader.com/micro.
aspx?id=PHLXfilings, 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 aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of the proposed rule
change is to amend the applicability of
a fee cap relating to reversal and
conversion strategies in Section II of the
Pricing Schedule to conform the
applicability of that cap to that of the
dividend,6 merger 7 and short stock
interest 8 strategies cap. The Exchange
believes that all strategy caps should be
applied in the same manner, in this case
3 Reversals are established by combining a short
stock position with a short put and a long call
position that shares the same strike and expiration.
4 Conversions are established by combining a long
position in the underlying security with a long put
and a short call position that shares the same strike
and expiration.
5 Section II Equity Options Fees include options
overlying equities, ETFs, ETNs, indexes and
HOLDRS which are Multiply Listed.
6 A dividend strategy is defined as transactions
done to achieve a dividend arbitrage involving the
purchase, sale and exercise of in-the-money options
of the same class, executed the first business day
prior to the date on which the underlying stock goes
ex-dividend.
7 A merger strategy is defined as transactions
done to achieve a merger arbitrage involving the
purchase, sale and exercise of options of the same
class and expiration date, executed the first
business day prior to the date on which
shareholders of record are required to elect their
respective form of consideration, i.e., cash or stock.
8 A short stock interest strategy is defined as
transactions done to achieve a short stock interest
arbitrage involving the purchase, sale and exercise
of in-the-money options of the same class.
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32166
Federal Register / Vol. 77, No. 105 / Thursday, May 31, 2012 / Notices
srobinson on DSK4SPTVN1PROD with NOTICES
only when such members are trading in
their own proprietary accounts.
Currently, Market Maker,9
Professional,10 Firm and Broker-Dealer
equity option transaction fees are
capped at $1,000 for dividend, merger
and short stock interest strategies
executed on the same trading day in the
same options class when such members
are trading in their own proprietary
accounts.11 The Exchange also currently
has a cap for reversal and conversion
strategies wherein Market Maker,
Professional, Firm and Broker-Dealer
options transaction fees in Multiply
Listed Options are capped at $500 per
day for reversal and conversion
strategies executed on the same trading
day in the same options class (‘‘Reversal
and Conversion Cap’’).12 The Exchange
proposes to further qualify the Reversal
and Conversion Cap by applying the cap
only when such members are trading in
their own proprietary accounts, similar
to dividend, merger and short stock
interest strategies.
Additionally, the Exchange proposes
to make certain technical amendments
to the Pricing Schedule. The Exchange
recently amended the title of the Pricing
Schedule from a ‘‘Fee Schedule’’ to a
‘‘Pricing Schedule.’’ 13 There are a few
places in the Pricing Schedule, namely
in Section III, Part A (Other Transaction
Fees, PIXL Pricing) and Section VII
((NASDAQ OMX PSX Fees, Other
Requests for Data) that still refer to a Fee
Schedule. The Exchange is proposing to
amend those references from ‘‘Fee
Schedule’’ to a ‘‘Pricing Schedule.’’ The
Exchange is also proposing to remove a
reference in Section I (Rebates and Fees
for Adding and Removing Liquidity in
9 The Exchange market maker category includes
Specialists (see Rule 1020) and Registered Options
Traders (see Rule 1014(b)(i) and (ii), which includes
Streaming Quote Traders (‘‘SQTs’’) (see Rule
1014(b)(ii)(A)) and Remote Streaming Quote
Traders (‘‘RSQTs’’) (see Rule 1014(b)(ii)(B)). This
would also include Directed Participants. The term
‘‘Directed Participant’’ applies to transactions for
the account of a Specialist, SQT or RSQT resulting
from a Customer order that is (1) directed to it by
an order flow provider, and (2) executed by it
electronically on Phlx XL II.
10 The Exchange defines a ‘‘professional’’ as any
person or entity that (i) is not a broker or dealer in
securities, and (ii) places more than 390 orders in
listed options per day on average during a calendar
month for its own beneficial account(s) (hereinafter
‘‘Professional’’).
11 Equity option transaction fees for dividend,
merger and short stock interest strategies combined
will be further capped at the greater of $10,000 per
member or $25,000 per member organization.
12 The Reversal and Conversion Cap applies to
executions occurring on either of the two days
preceding the standard options expiration date,
which is typically the third Thursday and Friday
of every month.
13 See Securities Exchange Act Release No. 66668
(March 28, 2012), 77 FR 20090 (April 3, 2012) (SR–
PhlX–2012–35).
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Select Symbols) to the Market Exhaust
auction. The Exchange recently filed a
rule change to discontinue the Market
Exhaust functionality, a feature of the
Exchange’s PHLX XL® automated
trading system.14 The reference to
Market Exhaust was deleted from Rule
1080(c). This functionality was
discontinued as of January 31, 2012.
The Exchange proposes to remove a
reference to Market Exhaust in Section
I of the Pricing Schedule. Finally, the
Exchange purposes to replace certain
reference symbols with numbers for
clarity in various sections of the Pricing
Schedule.15
2. Statutory Basis
The Exchange believes that its
proposal to amend its Pricing Schedule
is consistent with Section 6(b) of the
Act 16 in general, and furthers the
objectives of Section 6(b)(4) of the Act 17
in particular, in that it is an equitable
allocation of reasonable fees and other
charges among Exchange members and
other persons using its facilities.
The Exchange believes that the
proposed amendment to the
applicability of the Reversal and
Conversion Cap is reasonable because
the Exchange is proposing to apply the
cap only when such members are
trading in their own proprietary
account, which is the case today for
dividend, merger and short stock
interest strategies. All members would
continue to be offered an opportunity to
reduce option transaction fees in
Multiply Listed options for reversals
and conversions.18 The Exchange also
believes that the proposed amendment
to the applicability of the Reversal and
Conversion Cap is equitable and not
unfairly discriminatory because the
Exchange would uniformly apply the
reversal cap to all members.
The Exchange believes that the
technical amendments are reasonable,
equitable and not unfairly
discriminatory because the Exchange
intends to amend the Pricing Schedule
to conform the text to recent rule
amendments which eliminated and/or
replaced certain references.
14 See Securities Exchange Act Release No. 66087
(January 3, 2012), 77 FR 1095 (January 9, 2012) (SR–
Phlx–2011–182).
15 For example, various symbols such as ‘‘∞,’’ ‘‘+’’
and other symbols that are non-numeric, while be
replaced with numbers.
16 15 U.S.C. 78f(b).
17 15 U.S.C. 78f(b)(4).
18 Customers are not subject to the Reversal and
Conversion Cap because they do not pay option
transaction charges for reversal and conversion
strategies.
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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.19 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
Number SR–Phlx–2012–70 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–Phlx–2012–70. 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
19 15
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U.S.C. 78s(b)(3)(A)(ii).
31MYN1
Federal Register / Vol. 77, No. 105 / Thursday, May 31, 2012 / Notices
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 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–Phlx–
2012–70 and should be submitted on or
before June 21, 2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.20
Elizabeth M. Murphy,
Secretary.
Dated: May 15, 2012.
Sean J. Greene,
Associate Administrator for Investment.
[FR Doc. 2012–13131 Filed 5–30–12; 8:45 am]
BILLING CODE 8025–01–P
SMALL BUSINESS ADMINISTRATION
Revocation of License of Small
Business Investment Company
Pursuant to the authority granted to
the United States Small Business
Administration by the Wind-Up Order
of the United States District Court for
the District of Columbia, dated
September 27, 2011, the United States
Small Business Administration hereby
revokes the license of Women’s Growth
Capital Fund I, LLLP, a Delaware
limited partnership, to function as a
small business investment company
under the Small Business Investment
Company License No. 03730213 issued
to Women’s Growth Capital Fund I,
LLLP, on June 17, 1998 and said license
is hereby declared null and void as of
September 27, 2011.
United States Small Business
Administration.
Dated: May 15, 2012.
Sean J. Greene,
Associate Administrator for Investment.
[FR Doc. 2012–13134 Filed 5–30–12; 8:45 am]
BILLING CODE 8025–01–P
[FR Doc. 2012–13144 Filed 5–30–12; 8:45 am]
BILLING CODE 8011–01–P
SMALL BUSINESS ADMINISTRATION
SMALL BUSINESS ADMINISTRATION
srobinson on DSK4SPTVN1PROD with NOTICES
Revocation of License of Small
Business Investment Company
Pursuant to the authority granted to
the United States Small Business
Administration by the Wind-Up Order
of the United States District Court for
the Southern District of New York,
dated June 8, 2011, the United States
Small Business Administration hereby
revokes the license of LV Equity
Partners SBIC, L.P. a Delaware limited
partnership, to function as a small
business investment company under the
Small Business Investment Company
License No. 02720594 issued to LV
Equity Partners SBIC, on August 25,
1999 and said license is hereby declared
null and void as of June 8, 2011.
United States Small Business
Administration.
20 17
Revocation of License of Small
Business Investment Company
Pursuant to the authority granted to
the United States Small Business
Administration under the Small
Business Investment Act of 1958, under
Section 309 of the Act and Section
107.1900 of the Small Business
Administration Rules And Regulations
(13 CFR 107.1900) to function as a small
business investment company under the
Small Business Investment Company
License No. 09/79–0399 issued to
Walden-SBIC, LP, said license is hereby
declared null and void.
United States Small Business
Administration.
Dated: May 15, 2012.
Sean J. Greene,
Associate Administrator for Investment.
[FR Doc. 2012–13133 Filed 5–30–12; 8:45 am]
BILLING CODE 8025–01–P
CFR 200.30–3(a)(12).
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32167
SMALL BUSINESS ADMINISTRATION
Surrender of License of Small
Business Investment Company
Pursuant to the authority granted to
the United States Small Business
Administration by the Wind-Up Order
of the United States District Court of the
Middle District Court of Tennessee,
Nashville Division, dated September 6,
2011 the United States Small Business
Administration hereby surrender the
license of Capital Across America, L.P.
a Delaware limited partnership, to
function as a small business investment
company under the Small Business
Investment Company License No.
04040273 issued to Capital Across
America, on June 17, 1998 and said
license is hereby declared null and void
as of December 5, 2011.
United States Small Business
Administration.
Dated: May 15, 2012.
Sean J. Greene,
Associate Administrator for Investment.
[FR Doc. 2012–13132 Filed 5–30–12; 8:45 am]
BILLING CODE 8025–01–P
DEPARTMENT OF STATE
[Public Notice 7903]
Notice of Renewal of Advisory
Committee on International Law
Charter
Summary: The Department of State
has renewed the Charter of the Advisory
Committee on International Law.
Through this Committee, the
Department of State will continue to
obtain the views and advice of a cross
section of the country’s outstanding
members of the legal profession on
significant issues of international law.
The Committee’s consideration of these
legal issues in the conduct of our foreign
affairs provides a unique contribution to
the creation and promotion of U.S.
foreign policy. The Under Secretary for
Management has determined the
Committee is necessary and in the
public interest.
The Committee is comprised of all
former Legal Advisers of the Department
of State and up to 25 individuals
appointed by the current Legal Adviser.
The Committee follows the procedures
prescribed by the Federal Advisory
Committee Act (FACA). Meetings will
be open to the public unless a
determination is made in accordance
with section 1 O(d) of the FACA and 5
U.S.C. 552b(c) that a meeting or portion
of the meeting should be closed to the
public. Notice of each meeting will be
E:\FR\FM\31MYN1.SGM
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]]>Agencies
[Federal Register Volume 77, Number 105 (Thursday, May 31, 2012)]
[Notices]
[Pages 32165-32167]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-13144]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-67047; File No. SR-Phlx-2012-70]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Reversal and Conversion Strategies
May 23, 2012.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given
that, on May 16, 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 a fee cap on equity options
transactions on certain reversals \3\ and conversion \4\ strategies in
Section II, entitled ``Equity Options Fees.'' \5\ The Exchange also
proposes to make technical amendments to the Pricing Schedule.
---------------------------------------------------------------------------
\3\ Reversals are established by combining a short stock
position with a short put and a long call position that shares the
same strike and expiration.
\4\ Conversions are established by combining a long position in
the underlying security with a long put and a short call position
that shares the same strike and expiration.
\5\ Section II Equity Options Fees include options overlying
equities, ETFs, ETNs, indexes and HOLDRS which are Multiply Listed.
---------------------------------------------------------------------------
The text of the proposed rule change is available on the Exchange's
Web site at https://www.nasdaqtrader.com/micro.aspx?id=PHLXfilings, 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 aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the proposed rule change is to amend the
applicability of a fee cap relating to reversal and conversion
strategies in Section II of the Pricing Schedule to conform the
applicability of that cap to that of the dividend,\6\ merger \7\ and
short stock interest \8\ strategies cap. The Exchange believes that all
strategy caps should be applied in the same manner, in this case
[[Page 32166]]
only when such members are trading in their own proprietary accounts.
---------------------------------------------------------------------------
\6\ A dividend strategy is defined as transactions done to
achieve a dividend arbitrage involving the purchase, sale and
exercise of in-the-money options of the same class, executed the
first business day prior to the date on which the underlying stock
goes ex-dividend.
\7\ A merger strategy is defined as transactions done to achieve
a merger arbitrage involving the purchase, sale and exercise of
options of the same class and expiration date, executed the first
business day prior to the date on which shareholders of record are
required to elect their respective form of consideration, i.e., cash
or stock.
\8\ A short stock interest strategy is defined as transactions
done to achieve a short stock interest arbitrage involving the
purchase, sale and exercise of in-the-money options of the same
class.
---------------------------------------------------------------------------
Currently, Market Maker,\9\ Professional,\10\ Firm and Broker-
Dealer equity option transaction fees are capped at $1,000 for
dividend, merger and short stock interest strategies executed on the
same trading day in the same options class when such members are
trading in their own proprietary accounts.\11\ The Exchange also
currently has a cap for reversal and conversion strategies wherein
Market Maker, Professional, Firm and Broker-Dealer options transaction
fees in Multiply Listed Options are capped at $500 per day for reversal
and conversion strategies executed on the same trading day in the same
options class (``Reversal and Conversion Cap'').\12\ The Exchange
proposes to further qualify the Reversal and Conversion Cap by applying
the cap only when such members are trading in their own proprietary
accounts, similar to dividend, merger and short stock interest
strategies.
---------------------------------------------------------------------------
\9\ The Exchange market maker category includes Specialists (see
Rule 1020) and Registered Options Traders (see Rule 1014(b)(i) and
(ii), which includes Streaming Quote Traders (``SQTs'') (see Rule
1014(b)(ii)(A)) and Remote Streaming Quote Traders (``RSQTs'') (see
Rule 1014(b)(ii)(B)). This would also include Directed Participants.
The term ``Directed Participant'' applies to transactions for the
account of a Specialist, SQT or RSQT resulting from a Customer order
that is (1) directed to it by an order flow provider, and (2)
executed by it electronically on Phlx XL II.
\10\ The Exchange defines a ``professional'' as any person or
entity that (i) is not a broker or dealer in securities, and (ii)
places more than 390 orders in listed options per day on average
during a calendar month for its own beneficial account(s)
(hereinafter ``Professional'').
\11\ Equity option transaction fees for dividend, merger and
short stock interest strategies combined will be further capped at
the greater of $10,000 per member or $25,000 per member
organization.
\12\ The Reversal and Conversion Cap applies to executions
occurring on either of the two days preceding the standard options
expiration date, which is typically the third Thursday and Friday of
every month.
---------------------------------------------------------------------------
Additionally, the Exchange proposes to make certain technical
amendments to the Pricing Schedule. The Exchange recently amended the
title of the Pricing Schedule from a ``Fee Schedule'' to a ``Pricing
Schedule.'' \13\ There are a few places in the Pricing Schedule, namely
in Section III, Part A (Other Transaction Fees, PIXL Pricing) and
Section VII ((NASDAQ OMX PSX Fees, Other Requests for Data) that still
refer to a Fee Schedule. The Exchange is proposing to amend those
references from ``Fee Schedule'' to a ``Pricing Schedule.'' The
Exchange is also proposing to remove a reference in Section I (Rebates
and Fees for Adding and Removing Liquidity in Select Symbols) to the
Market Exhaust auction. The Exchange recently filed a rule change to
discontinue the Market Exhaust functionality, a feature of the
Exchange's PHLX XL[supreg] automated trading system.\14\ The reference
to Market Exhaust was deleted from Rule 1080(c). This functionality was
discontinued as of January 31, 2012. The Exchange proposes to remove a
reference to Market Exhaust in Section I of the Pricing Schedule.
Finally, the Exchange purposes to replace certain reference symbols
with numbers for clarity in various sections of the Pricing
Schedule.\15\
---------------------------------------------------------------------------
\13\ See Securities Exchange Act Release No. 66668 (March 28,
2012), 77 FR 20090 (April 3, 2012) (SR-PhlX-2012-35).
\14\ See Securities Exchange Act Release No. 66087 (January 3,
2012), 77 FR 1095 (January 9, 2012) (SR-Phlx-2011-182).
\15\ For example, various symbols such as ``[infin],'' ``+'' and
other symbols that are non-numeric, while be replaced with numbers.
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2. Statutory Basis
The Exchange believes that its proposal to amend its Pricing
Schedule is consistent with Section 6(b) of the Act \16\ in general,
and furthers the objectives of Section 6(b)(4) of the Act \17\ in
particular, in that it is an equitable allocation of reasonable fees
and other charges among Exchange members and other persons using its
facilities.
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\16\ 15 U.S.C. 78f(b).
\17\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that the proposed amendment to the
applicability of the Reversal and Conversion Cap is reasonable because
the Exchange is proposing to apply the cap only when such members are
trading in their own proprietary account, which is the case today for
dividend, merger and short stock interest strategies. All members would
continue to be offered an opportunity to reduce option transaction fees
in Multiply Listed options for reversals and conversions.\18\ The
Exchange also believes that the proposed amendment to the applicability
of the Reversal and Conversion Cap is equitable and not unfairly
discriminatory because the Exchange would uniformly apply the reversal
cap to all members.
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\18\ Customers are not subject to the Reversal and Conversion
Cap because they do not pay option transaction charges for reversal
and conversion strategies.
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The Exchange believes that the technical amendments are reasonable,
equitable and not unfairly discriminatory because the Exchange intends
to amend the Pricing Schedule to conform the text to recent rule
amendments which eliminated and/or replaced certain references.
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.\19\ 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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\19\ 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 Number SR-Phlx-2012-70 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-Phlx-2012-70. 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
[[Page 32167]]
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 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-Phlx-2012-70 and should be submitted on
or before June 21, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
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\20\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2012-13144 Filed 5-30-12; 8:45 am]
BILLING CODE 8011-01-P
