Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Routing Fees to NOM, 63401-63404 [2012-25331]
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Federal Register / Vol. 77, No. 200 / Tuesday, October 16, 2012 / Notices
100 F Street NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–CBOE–2012–096. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 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 Number SR–CBOE–
2012–096 and should be submitted on
or before November 6, 2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.9
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–25333 Filed 10–15–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–68008; File No. SR-Phlx2012–120]
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to
Routing Fees to NOM
October 9, 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 October
1, 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 adopt
certain Routing Fees to recoup costs
incurred by the Exchange when routing
to the NASDAQ Options Market LLC
(‘‘NOM’’).
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
1 15
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9 17
CFR 200.30–3(a)(12).
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CFR 240.19b–4.
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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 this filing is to recoup
costs that the Exchange incurs for
routing and executing certain orders in
equity options to NOM in Non-Penny
Pilot Options.
The Exchange’s Pricing Schedule at
Section V currently includes the
following Routing Fees for routing
Customer, Professional,3 Firm, BrokerDealer, Market Maker 4 and Specialist 5
orders to away markets.
3 The term ‘‘professional’’ means 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). See Rule
1000(b)(14).
4 A ‘‘Market Maker’’ includes Registered Options
Traders (‘‘ROTs’’) (Rule 1014(b)(i) and (ii), which
include Streaming Quote Traders (‘‘SQTs’’) (See
Rule 1014(b)(ii)(A)) and Remote Streaming Quote
Traders (‘‘RSQTs’’) (See Rule 1014(b)(ii)(B)).
5 A Specialist is an Exchange member who is
registered as an options specialist pursuant to Rule
1020(a).
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Federal Register / Vol. 77, No. 200 / Tuesday, October 16, 2012 / Notices
Exchange
Customer
NYSE AMEX ..............................................................................................................
BATS Penny ..............................................................................................................
BATS non-Penny .......................................................................................................
BOX ...........................................................................................................................
BX Options .................................................................................................................
CBOE .........................................................................................................................
CBOE orders greater than 99 contracts in RUT, RMN, NDX, MNX, ETFs, ETNs
and HOLDRs ..........................................................................................................
C2 ..............................................................................................................................
ISE .............................................................................................................................
ISE Select Symbols 13 ...............................................................................................
NYSE ARCA (Penny Pilot) ........................................................................................
NYSE ARCA (Standard) ............................................................................................
NOM ...........................................................................................................................
NOM—MNX ...............................................................................................................
NOM—NDX ...............................................................................................................
NOM—FB, GOOG and GRPN ..................................................................................
Professional
Firm/broker-dealer/specialist/market maker
$0.11
0.55
0.86
0.11
0.11
0.11
$0.31
0.55
0.91
0.11
0.54
0.31
$0.55
0.55
0.91
0.55
0.54
0.55
0.29
0.55
0.11
0.31
0.55
0.11
0.54
0.56
0.11
0.86
0.31
0.56
0.29
0.39
0.55
0.11
0.54
0.56
0.81
0.91
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.81
0.91
13 These fees are applicable to orders routed to ISE that are subject to Rebates and Fees for Adding and Removing Liquidity in Select Symbols. See ISE’s Schedule of Fees for the complete list of symbols that are subject to these fees.
The Exchange proposes to adopt NOM
Routing Fees for Non-Penny Pilot
Options. NOM recently filed an
immediately effective rule change that
amended its Non-Penny Pilot Options
transaction fees in Section 2 of Chapter
XV to mirror the Fees for Removing
Liquidity for options overlying
Facebook, Inc. (‘‘FB’’), Google Inc.
(‘‘GOOG’’) and Groupon, Inc.
(‘‘GRPN’’).6 NOM eliminated pricing for
options overlying the Nasdaq 100 Index
traded under the symbol NDX (‘‘NDX’’)
and amended its pricing for Non-Penny
Pilot Options, which includes NDX.7
NOM also eliminated the FB, GOOG,
GRPN and MNX pricing in that filing.8
The Exchange proposes to rename the
current ‘‘NOM’’ Routing Fees as ‘‘NOM
Penny Pilot Options’’ to distinguish
those Routing Fees from the new
Routing Fees the Exchange is proposing
to adopt for Non-Penny Pilot Options.
The Exchange proposes to rename the
current ‘‘NOM—FB, GOOG and GRPN’’
Routing Fees as ‘‘NOM Non-Penny Pilot
Options’’ and not otherwise amend
those Routing Fees as they represent the
amended pricing for Non-Penny Pilot
Options as described below. This new
Exchange
category of Routing Fees would apply to
all Non-Penny Pilot Options which
would include NDX, FB, GOOG and
GRPN. Finally, NOM proposes to
eliminate the ‘‘NOM—NDX,’’ and
‘‘NOM—MNX’’ Routing Fees as the
NOM—NDX Routing Fees will be
replaced by the NOM Non-Penny Pilot
Options Routing Fees and the NOM—
MNX Routing Fees are no longer
necessary as NOM delisted those
options.9 The NOM Routing Fees would
therefore be as follows:
Customer
NYSE AMEX ..............................................................................................................
BATS Penny ..............................................................................................................
BATS non-Penny .......................................................................................................
BOX ...........................................................................................................................
BX Options .................................................................................................................
CBOE .........................................................................................................................
CBOE orders greater than 99 contracts in RUT, RMN, NDX, MNX, ETFs, ETNs
and HOLDRs ..........................................................................................................
C2 ..............................................................................................................................
ISE .............................................................................................................................
ISE Select Symbols 13 ...............................................................................................
NYSE ARCA (Penny Pilot) ........................................................................................
NYSE ARCA (Standard) ............................................................................................
NOM Penny Pilot Options .........................................................................................
NOM Non-Penny Pilot Options ..................................................................................
Professional
Firm/broker-dealer/specialist/market maker
$0.11
0.55
0.86
0.11
0.11
0.11
$0.31
0.55
0.91
0.11
0.54
0.31
$0.55
0.55
0.91
0.55
0.54
0.55
0.29
0.55
0.11
0.31
0.55
0.11
0.54
0.86
0.31
0.56
0.29
0.39
0.55
0.11
0.54
0.91
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.91
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13 These fees are applicable to orders routed to ISE that are subject to Rebates and Fees for Adding and Removing Liquidity in Select Symbols. See ISE’s Schedule of Fees for the complete list of symbols that are subject to these fees.
In May 2009, the Exchange adopted
Rule 1080(m)(iii)(A) to establish Nasdaq
Options Services LLC (‘‘NOS’’), a
member of the Exchange, as the
6 See SR–NASDAQ–2012–114 (not yet
published). This immediately effective rule filing
amended the NOM Non-Penny Pilot Fees for
Removing Liquidity to assess Customers and NOM
Marker Makers a $0.79 per contract fee and
Professionals, Firms and Non-NOM Marker Makers
a $0.85 per contract fee. NDX, FB, GOOG and GRPN
no longer have separate pricing, but rather are
assessed the fees for Non-Penny Pilot Options.
MNX pricing was also removed from the NOM’s
pricing in this rule change because MNX was
delisted on September 13, 2012.
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Exchange’s exclusive order router.10
NOS is utilized by the Exchange’s fully
7 Id.
8 Id.
9 NOM
delisted MNX on September 13, 2012.
Securities Exchange Act Release No. 59995
(May 28, 2009), 74 FR 26750 (June 3, 2009) (SR–
Phlx–2009–32).
10 See
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Federal Register / Vol. 77, No. 200 / Tuesday, October 16, 2012 / Notices
automated options trading system,
PHLX XL,11 to route orders in options
listed and open for trading on the PHLX
XL system to destination markets. Each
time NOS routes to away markets NOS
is charged a 0.06 clearing fee and, in the
case of certain exchanges, a transaction
fee is also charged in certain symbols,
which fees are passed through to the
Exchange. The Exchange currently
recoups clearing and transaction charges
incurred by the Exchange as well as
certain other costs incurred by the
Exchange when routing to away
markets, such as administrative and
technical costs associated with
operating NOS, membership fees at
away markets, and technical costs
associated with routing options.12
As with all fees, the Exchange may
adjust these Routing Fees in response to
competitive conditions by filing a new
proposed rule change.
2. Statutory Basis
The Exchange believes that its
proposal to amend its Pricing Schedule
is consistent with Section 6(b) of the
Act 13 in general, and furthers the
objectives of Section 6(b)(4) of the Act 14
in particular, in that it is an equitable
allocation of reasonable fees and other
charges among Exchange members.
The Exchange believes that the
proposed NOM Non-Penny Pilot
Options Routing Fees are reasonable
because they seek to recoup costs that
are incurred by the Exchange when
routing Customer, Professional, Firm,
Broker-Dealer, Specialist and Market
Maker orders to NOM on behalf of
tkelley on DSK3SPTVN1PROD with NOTICES
11 This
proposal refers to ‘‘PHLX XL’’ as the
Exchange’s automated options trading system. In
May 2009 the Exchange enhanced the system and
adopted corresponding rules referring to the system
as ‘‘Phlx XL II.’’ See Securities Exchange Act
Release No. 59995 (May 28, 2009), 74 FR 26750
(June 3, 2009) (SR–Phlx–2009–32). The Exchange
intends to submit a separate technical proposed
rule change that would change all references to the
system from ‘‘Phlx XL II’’ to ‘‘PHLX XL’’ for
branding purposes.
12 In addition to membership fees and transaction
fees, the Exchange also incurs an Options
Regulatory Fee when routing to an away market that
assesses that fee. The Exchange’s proposed Routing
Fees for NOM Non-Penny Pilot Options include
NOM’s Fees for Removing Liquidity of $0.79 per
contract fee for Customers and NOM Market Makers
and $0.85 per contract fee for Professionals, Firms
and Non-NOM Market Makers (which Fees for
Removing Liquidity were the same fees assessed for
FB, GOOG and GRPN), as well as a 0.06 clearing
cost and another 0.05 per contract fee associated
with administrative and technical costs for
operating NOS. At this time, the Exchange has
determined to assess a maximum fee of 0.91 per
contract for routing Non-Penny Pilot Options to
NOM. While this does not recover all of the
Exchange’s costs, the Exchange has determined at
this time to not assess more than a $0.91 per
contract Routing Fee.
13 15 U.S.C. 78f(b).
14 15 U.S.C. 78f(b)(4).
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members, respectively. Each destination
market’s transaction charge varies and
there is a standard clearing charge for
each transaction incurred by the
Exchange along with other
administrative and technical costs that
are incurred by the Exchange. The
Exchange believes that the proposed
Routing Fees would enable the
Exchange to recover the remove fees
assessed to market participants by NOM
when routing Non-Penny Pilot Options
(including NDX, FB, GOOG and GRPN),
plus clearing and other administrative
and technical fees for the execution of
Customer, Professional, Firm, BrokerDealer, Specialist and Market Maker
orders when routed to NOM. The
Exchange also believes that the
proposed NOM Non-Penny Pilot
Options Routing Fees are equitable and
not unfairly discriminatory because they
would be uniformly applied to all
Customer, Professional, Firm, BrokerDealer, Specialist and Market Maker
orders that are routed to NOM.
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. To the
contrary, Phlx Routing Fees seek to
recoup costs for Routing Orders to other
exchanges on behalf of its members.
Options Participants may choose to
mark the order as ineligible for routing
to avoid incurring these fees.15
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.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. If the Commission
takes such action, the Commission shall
institute proceedings to determine
15 See Rule 1066(h) (Certain Types of Orders
Defined) and 1080(b)(i)(A) (PHLX XL and PHLX XL
II).
16 15 U.S.C. 78s(b)(3)(A)(ii).
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63403
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–2012–120 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–2012–120. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 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–
2012–120 and should be submitted on
or before November 6, 2012.
E:\FR\FM\16OCN1.SGM
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63404
Federal Register / Vol. 77, No. 200 / Tuesday, October 16, 2012 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–25331 Filed 10–15–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–68017; File No. SR–NYSE–
2012–47]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend
Section 902.02 of the New York Stock
Exchange Listed Company Manual
Regarding Waivers for Certain Listing
Fees
October 9, 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
September 25, 2012, New York Stock
Exchange LLC (‘‘NYSE’’ or the
‘‘Exchange’’) filed with the Securities
and Exchange Commission (the
‘‘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 902.02 of the New York Stock
Exchange Listed Company Manual.
The text of the proposed rule change
is available on the Exchange’s Web site
at www.nyse.com, at the principal office
of the Exchange, and at the
Commission’s Public Reference Room.
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II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
17 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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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 the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend its
Listed Company Manual and to
implement the proposed changes
immediately upon filing.
The Exchange proposes to amend
Section 902.02 of the Listed Company
Manual, which currently provides, in
part, that Listing Fees are waived for
issuers (i) listing following emergence
from bankruptcy; (ii) listing a class of
stock that is not listed on a national
securities exchange but is registered
under the Securities Exchange Act of
1934 (the ‘‘Act’’); or (iii) transferring the
listing of any class of equity securities,
any structured product or any closedend fund from any other national
securities exchange.
The Exchange proposes to specify that
waiver (i) would only be applicable to
an issuer that is listing within 36
months following emergence from
bankruptcy and that has not had a
security listed on a national securities
exchange during such period. In
addition, the Exchange proposes to
specify that waiver (ii) would only be
applicable to an issuer that is relisting
a class of stock that is registered under
the Act that was delisted from a national
securities exchange and only if such
delisting was (a) within the previous 12
calendar months, and (b) due to the
issuer’s failure to file a required
periodic financial report with the
Commission or other appropriate
regulatory authority.3 In addition to the
substantive changes proposed herein for
Section 902.02 of the Listed Company
Manual, the Exchange also proposes
certain non-substantive changes.4
3 As a result, this waiver would no longer apply
to an issuer listing a class of stock that is registered
under the Act and (i) was delisted from a national
securities exchange within the previous 12 calendar
months for a non-financial-reporting reason, (ii) was
not listed on a national securities exchange within
the previous 12 calendar months, or (iii) is being
listed on a national securities exchange for the first
time. The Exchange notes that the NASDAQ Stock
Market LLC (‘‘NASDAQ’’) similarly waives the
‘‘entry’’ and ‘‘application’’ fees for issuers that were
suspended and/or delisted from NASDAQ solely for
their failure to file a required periodic financial
report with the Commission or other appropriate
regulatory authority. See NASDAQ IM–5900–5
(Waiver of Fees upon Relisting for Companies
Removed for Late Filings). The Exchange is not
proposing any changes to waiver (iii) to Listing
Fees.
4 First, the Exchange proposes to remove obsolete
text that provides that, with retroactive effect from
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The Exchange does not expect the
financial impact of this proposed rule
change to be material in terms of the
level of Listing Fees collected from
issuers on the Exchange. Specifically,
the Exchange anticipates that only a
very limited number of issuers will be
qualified and seek to list on the
Exchange that are eligible to qualify for
the waivers, as amended. Accordingly,
the Exchange believes that the proposed
rule change will not impact the
Exchange’s resource commitment to its
regulatory oversight of the listing
process or its regulatory programs.
2. Statutory Basis
The Exchange believes that the
proposed rule change 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, because it
provides for the equitable allocation of
reasonable dues, fees, and other charges
among its members, issuers and other
persons using its facilities and does not
unfairly discriminate between
customers, issuers, brokers, or dealers.
The Exchange believes that it is
reasonable to waive the Listing Fees for
an issuer within 36 months following
emergence from bankruptcy, so long as
such issuer has not had a security listed
January 1, 2008, issuers transferring the listing of
their primary class of common shares from NYSE
Alternext US (which is now known as NYSE MKT
LLC (‘‘NYSE MKT’’)) are not required to pay
Annual Fees with respect to that primary class of
common shares or any other class of securities
transferred in conjunction therewith for the
remainder of the calendar year in which the transfer
occurs. Instead, the Exchange proposes to include
the reference to NYSE MKT with an existing
reference to NYSE Arca, Inc. (‘‘NYSE Arca’’) that
similarly provides that issuers transferring the
listing of their primary class of common shares from
NYSE Arca are not required to pay Annual Fees
with respect to that primary class of common shares
or any other class of securities transferred in
conjunction therewith for the remainder of the
calendar year in which the transfer occurs. The
Exchange proposes to relocate the combined NYSE
Arca and NYSE MKT reference under the ‘‘Annual
Fees’’ subheading of Section 902.02 of the Listed
Company Manual, where it is more appropriate.
Second, the Exchange proposes that, instead of
using an asterisk to mark the text that provides that
none of the Listing Fee waivers are applicable to the
transfer of any class of securities if the issuer’s
primary class of common stock remains listed on
another national securities exchange, such text
would be moved within the main body of text
describing the waivers. Additionally, ‘‘transfer’’
would be changed to ‘‘listing,’’ which would more
accurately describe the process. Finally, the
Exchange proposes to correct a cross-reference to
the one-time special charge payable in connection
with the listing of any new class of common shares.
The reference currently states that the special
charge is $37,500, but the actual amount is $50,000,
as provided in Section 902.03, under ‘‘Listing Fee
Schedule.’’ See Securities Exchange Act Release No.
60868 (October 22, 2009), 74 FR 55883 (October 29,
2009) (SR–NYSE–2009–83).
5 15 U.S.C. 78f(b).
6 15 U.S.C. 78f(b)(4).
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]]>Agencies
[Federal Register Volume 77, Number 200 (Tuesday, October 16, 2012)]
[Notices]
[Pages 63401-63404]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-25331]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-68008; File No. SR-Phlx-2012-120]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Routing Fees to NOM
October 9, 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 October 1, 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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to adopt certain Routing Fees to recoup costs
incurred by the Exchange when routing to the NASDAQ Options Market LLC
(``NOM'').
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 this filing is to recoup costs that the Exchange
incurs for routing and executing certain orders in equity options to
NOM in Non-Penny Pilot Options.
The Exchange's Pricing Schedule at Section V currently includes the
following Routing Fees for routing Customer, Professional,\3\ Firm,
Broker-Dealer, Market Maker \4\ and Specialist \5\ orders to away
markets.
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\3\ The term ``professional'' means 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). See Rule
1000(b)(14).
\4\ A ``Market Maker'' includes Registered Options Traders
(``ROTs'') (Rule 1014(b)(i) and (ii), which include Streaming Quote
Traders (``SQTs'') (See Rule 1014(b)(ii)(A)) and Remote Streaming
Quote Traders (``RSQTs'') (See Rule 1014(b)(ii)(B)).
\5\ A Specialist is an Exchange member who is registered as an
options specialist pursuant to Rule 1020(a).
[[Page 63402]]
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Firm/broker-
Exchange Customer Professional dealer/specialist/
market maker
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NYSE AMEX.............................................. $0.11 $0.31 $0.55
BATS Penny............................................. 0.55 0.55 0.55
BATS non-Penny......................................... 0.86 0.91 0.91
BOX.................................................... 0.11 0.11 0.55
BX Options............................................. 0.11 0.54 0.54
CBOE................................................... 0.11 0.31 0.55
CBOE orders greater than 99 contracts in RUT, RMN, NDX, 0.29 0.31 0.55
MNX, ETFs, ETNs and HOLDRs............................
C2..................................................... 0.55 0.56 0.55
ISE.................................................... 0.11 0.29 0.55
ISE Select Symbols \13\................................ 0.31 0.39 0.55
NYSE ARCA (Penny Pilot)................................ 0.55 0.55 0.55
NYSE ARCA (Standard)................................... 0.11 0.11 0.55
NOM.................................................... 0.54 0.54 0.55
NOM--MNX............................................... 0.56 0.56 0.55
NOM--NDX............................................... 0.11 0.81 0.81
NOM--FB, GOOG and GRPN................................. 0.86 0.91 0.91
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\13\ These fees are applicable to orders routed to ISE that are subject to Rebates and Fees for Adding and
Removing Liquidity in Select Symbols. See ISE's Schedule of Fees for the complete list of symbols that are
subject to these fees.
The Exchange proposes to adopt NOM Routing Fees for Non-Penny Pilot
Options. NOM recently filed an immediately effective rule change that
amended its Non-Penny Pilot Options transaction fees in Section 2 of
Chapter XV to mirror the Fees for Removing Liquidity for options
overlying Facebook, Inc. (``FB''), Google Inc. (``GOOG'') and Groupon,
Inc. (``GRPN'').\6\ NOM eliminated pricing for options overlying the
Nasdaq 100 Index traded under the symbol NDX (``NDX'') and amended its
pricing for Non-Penny Pilot Options, which includes NDX.\7\ NOM also
eliminated the FB, GOOG, GRPN and MNX pricing in that filing.\8\ The
Exchange proposes to rename the current ``NOM'' Routing Fees as ``NOM
Penny Pilot Options'' to distinguish those Routing Fees from the new
Routing Fees the Exchange is proposing to adopt for Non-Penny Pilot
Options. The Exchange proposes to rename the current ``NOM--FB, GOOG
and GRPN'' Routing Fees as ``NOM Non-Penny Pilot Options'' and not
otherwise amend those Routing Fees as they represent the amended
pricing for Non-Penny Pilot Options as described below. This new
category of Routing Fees would apply to all Non-Penny Pilot Options
which would include NDX, FB, GOOG and GRPN. Finally, NOM proposes to
eliminate the ``NOM--NDX,'' and ``NOM--MNX'' Routing Fees as the NOM--
NDX Routing Fees will be replaced by the NOM Non-Penny Pilot Options
Routing Fees and the NOM--MNX Routing Fees are no longer necessary as
NOM delisted those options.\9\ The NOM Routing Fees would therefore be
as follows:
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\6\ See SR-NASDAQ-2012-114 (not yet published). This immediately
effective rule filing amended the NOM Non-Penny Pilot Fees for
Removing Liquidity to assess Customers and NOM Marker Makers a $0.79
per contract fee and Professionals, Firms and Non-NOM Marker Makers
a $0.85 per contract fee. NDX, FB, GOOG and GRPN no longer have
separate pricing, but rather are assessed the fees for Non-Penny
Pilot Options. MNX pricing was also removed from the NOM's pricing
in this rule change because MNX was delisted on September 13, 2012.
\7\ Id.
\8\ Id.
\9\ NOM delisted MNX on September 13, 2012.
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Firm/broker-
Exchange Customer Professional dealer/specialist/
market maker
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NYSE AMEX.............................................. $0.11 $0.31 $0.55
BATS Penny............................................. 0.55 0.55 0.55
BATS non-Penny......................................... 0.86 0.91 0.91
BOX.................................................... 0.11 0.11 0.55
BX Options............................................. 0.11 0.54 0.54
CBOE................................................... 0.11 0.31 0.55
CBOE orders greater than 99 contracts in RUT, RMN, NDX, 0.29 0.31 0.55
MNX, ETFs, ETNs and HOLDRs............................
C2..................................................... 0.55 0.56 0.55
ISE.................................................... 0.11 0.29 0.55
ISE Select Symbols \13\................................ 0.31 0.39 0.55
NYSE ARCA (Penny Pilot)................................ 0.55 0.55 0.55
NYSE ARCA (Standard)................................... 0.11 0.11 0.55
NOM Penny Pilot Options................................ 0.54 0.54 0.55
NOM Non-Penny Pilot Options............................ 0.86 0.91 0.91
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\13\ These fees are applicable to orders routed to ISE that are subject to Rebates and Fees for Adding and
Removing Liquidity in Select Symbols. See ISE's Schedule of Fees for the complete list of symbols that are
subject to these fees.
In May 2009, the Exchange adopted Rule 1080(m)(iii)(A) to establish
Nasdaq Options Services LLC (``NOS''), a member of the Exchange, as the
Exchange's exclusive order router.\10\ NOS is utilized by the
Exchange's fully
[[Page 63403]]
automated options trading system, PHLX XL,\11\ to route orders in
options listed and open for trading on the PHLX XL system to
destination markets. Each time NOS routes to away markets NOS is
charged a 0.06 clearing fee and, in the case of certain exchanges, a
transaction fee is also charged in certain symbols, which fees are
passed through to the Exchange. The Exchange currently recoups clearing
and transaction charges incurred by the Exchange as well as certain
other costs incurred by the Exchange when routing to away markets, such
as administrative and technical costs associated with operating NOS,
membership fees at away markets, and technical costs associated with
routing options.\12\
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\10\ See Securities Exchange Act Release No. 59995 (May 28,
2009), 74 FR 26750 (June 3, 2009) (SR-Phlx-2009-32).
\11\ This proposal refers to ``PHLX XL'' as the Exchange's
automated options trading system. In May 2009 the Exchange enhanced
the system and adopted corresponding rules referring to the system
as ``Phlx XL II.'' See Securities Exchange Act Release No. 59995
(May 28, 2009), 74 FR 26750 (June 3, 2009) (SR-Phlx-2009-32). The
Exchange intends to submit a separate technical proposed rule change
that would change all references to the system from ``Phlx XL II''
to ``PHLX XL'' for branding purposes.
\12\ In addition to membership fees and transaction fees, the
Exchange also incurs an Options Regulatory Fee when routing to an
away market that assesses that fee. The Exchange's proposed Routing
Fees for NOM Non-Penny Pilot Options include NOM's Fees for Removing
Liquidity of $0.79 per contract fee for Customers and NOM Market
Makers and $0.85 per contract fee for Professionals, Firms and Non-
NOM Market Makers (which Fees for Removing Liquidity were the same
fees assessed for FB, GOOG and GRPN), as well as a 0.06 clearing
cost and another 0.05 per contract fee associated with
administrative and technical costs for operating NOS. At this time,
the Exchange has determined to assess a maximum fee of 0.91 per
contract for routing Non-Penny Pilot Options to NOM. While this does
not recover all of the Exchange's costs, the Exchange has determined
at this time to not assess more than a $0.91 per contract Routing
Fee.
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As with all fees, the Exchange may adjust these Routing Fees in
response to competitive conditions by filing a new proposed rule
change.
2. Statutory Basis
The Exchange believes that its proposal to amend its Pricing
Schedule is consistent with Section 6(b) of the Act \13\ in general,
and furthers the objectives of Section 6(b)(4) of the Act \14\ in
particular, in that it is an equitable allocation of reasonable fees
and other charges among Exchange members.
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\13\ 15 U.S.C. 78f(b).
\14\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that the proposed NOM Non-Penny Pilot Options
Routing Fees are reasonable because they seek to recoup costs that are
incurred by the Exchange when routing Customer, Professional, Firm,
Broker-Dealer, Specialist and Market Maker orders to NOM on behalf of
members, respectively. Each destination market's transaction charge
varies and there is a standard clearing charge for each transaction
incurred by the Exchange along with other administrative and technical
costs that are incurred by the Exchange. The Exchange believes that the
proposed Routing Fees would enable the Exchange to recover the remove
fees assessed to market participants by NOM when routing Non-Penny
Pilot Options (including NDX, FB, GOOG and GRPN), plus clearing and
other administrative and technical fees for the execution of Customer,
Professional, Firm, Broker-Dealer, Specialist and Market Maker orders
when routed to NOM. The Exchange also believes that the proposed NOM
Non-Penny Pilot Options Routing Fees are equitable and not unfairly
discriminatory because they would be uniformly applied to all Customer,
Professional, Firm, Broker-Dealer, Specialist and Market Maker orders
that are routed to NOM.
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. To the contrary, Phlx Routing
Fees seek to recoup costs for Routing Orders to other exchanges on
behalf of its members. Options Participants may choose to mark the
order as ineligible for routing to avoid incurring these fees.\15\
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\15\ See Rule 1066(h) (Certain Types of Orders Defined) and
1080(b)(i)(A) (PHLX XL and PHLX XL II).
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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.\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. 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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\16\ 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-2012-120 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-2012-120. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 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-2012-120 and should be
submitted on or before November 6, 2012.
[[Page 63404]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-25331 Filed 10-15-12; 8:45 am]
BILLING CODE 8011-01-P
