Self-Regulatory Organizations; The NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Make a Minor Modification To Pricing Incentive Programs, 59738-59740 [2013-23540]
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59738
Federal Register / Vol. 78, No. 188 / Friday, September 27, 2013 / Notices
For the Commission, by the Division of
Investment Management, under delegated
authority.
Kevin M. O’Neill,
Deputy Secretary.
have been prepared by the Exchange.
The Commission is publishing this
notice to solicit comments on the
proposed rule change from interested
persons.
[FR Doc. 2013–23541 Filed 9–26–13; 8:45 am]
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Left Behind Games, Inc., File No. 500–
1; Order of Suspension of Trading
September 25, 2013.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Left Behind
Games, Inc. (‘‘Left Behind’’) because it
has not filed a periodic report since it
filed its Form 10–Q for the period
ending September 30, 2011, filed on
November 21, 2011.
The Commission is of the opinion that
the public interest and the protection of
investors require a suspension of trading
in the securities of Left Behind.
Therefore, it is ordered, pursuant to
Section 12(k) of the Securities Exchange
Act of 1934, that trading in the
securities of Left Behind is suspended
for the period from 9:30 a.m. EDT,
September 25, 2013 through 11:59 p.m.
EDT, on October 8, 2013.
By the Commission.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2013–23728 Filed 9–25–13; 11:15 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–70472; File No. SR–PHLX–
2013–93]
Self-Regulatory Organizations; The
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Make a
Minor Modification To Pricing Incentive
Programs
pmangrum on DSK3VPTVN1PROD with NOTICES
September 23, 2013.
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
September 10, 2013, 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 and II below, which Items
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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The Exchange proposes to make a
minor modification to pricing incentive
programs under PHLX’s schedule of fees
and credits applicable to options trading
on PHLX. Specifically, PHLX is
proposing to exclude from volumebased pricing calculations any trading
day on which PHLX is closed for trading
due to early closing or a market-wide
trading halt. This exclusion exists today
for the trading of equities on PSX, the
equities trading facility of PHLX.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://
nasdaqomxphlx.cchwallstreet.com, at
the principal office of the Exchange, and
at the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change 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
PSX, the PHLX facility for trading
equities, offers pricing for the trading of
equities that is based on average daily
volume of trading. The applicable fee
schedule for equities trading on PSX
contains language excluding from such
volume calculations any day on which
the market is not open the entire trading
day. PHLX Pricing Schedule, Section
VIII, entitled ‘‘Order Routing and
Execution,’’ footnote to subsection (a)(4)
states that ‘‘For purposes of determining
average daily volume hereunder, any
day that the market is not open for the
entire trading day will be excluded from
such calculation.’’ As a result, when
trading ends early, as for trading days
PO 00000
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Fmt 4703
Sfmt 4703
preceding certain federal holidays, or
when there is a material market-wide
disruption, PHLX excludes that day
from the calculation of average daily
volume.
The PHLX pricing schedule for
options also contains pricing programs
based on average daily volume. PHLX
has determined to make this practice
uniform for both equities and options
trading on PHLX by moving the relevant
language to the preamble of the PHLX
Fee Schedule. In other words, for
purposes of calculating any pricing
based on average daily volumes for both
equities and options trading any day
that the market is not open for the entire
trading day should be excluded from
such calculation. As it currently does
for equities, this formulation would
exclude days on which the market
closes early for holiday observance. It
would also exclude days where PHLX
declares a trading halt in all securities
or honors a market-wide trading halt
declared by another market. This would
apply to the market-wide trading halt of
approximately three hours on August
22, 2013, which PHLX plans to exclude
from Customer Rebate Tiers for the
month of August.
This change will affect several fees
described in PHLX Pricing Schedule,
Section B, which contains pricing
incentive programs that are designed to
encourage member participation in
PHLX options trading by increasing
rebates or reducing fees for firms that
trade on PHLX in increasingly higher
volumes. For example, PHLX currently
has four Customer Rebate Tiers by
which it determines the rebate per share
for Customer 3 orders in Multiply Listed
Options (including SPY) that are
electronically-delivered and executed.
The Customer Rebate Tier thresholds
are based upon a percentage of national
volume of Customer Orders in certain
options on a monthly basis. The rebates
range from $0.00 to $0.15 per contract
for Simple Orders 4 and from $0.00 to
3 The term ‘‘Customer’’ applies to any transaction
that is identified by a member or member
organization for clearing in the Customer range at
The Options Clearing Corporation (‘‘OCC’’) which
is not for the account of broker or dealer or for the
account of a ‘‘Professional’’ (as that term is defined
in Rule 1000(b)(14)).
4 These ‘‘Category A Rebates’’ are paid to
members executing electronically-delivered
Customer Simple Orders in Penny Pilot Options
and Customer Simple Orders in Non-Penny Pilot
Options in Section II symbols. Rebates are paid on
Customer PIXL Orders in Section II symbols that
execute against non-Initiating Order interest, except
in the case of Customer PIXL Orders that are greater
than 999 contracts. All Customer PIXL Orders that
are greater than 999 contracts will be paid a rebate
regardless of the contra-party to the transaction.
E:\FR\FM\27SEN1.SGM
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Federal Register / Vol. 78, No. 188 / Friday, September 27, 2013 / Notices
59739
$0.17 per contract for Complex Orders
as follows 5
Customer rebate tiers
Tier
Tier
Tier
Tier
1
2
3
4
Percentage thresholds of national customer volume in multiply-listed
equity and ETF options classes, excluding SPY options (monthly)
.............................................
.............................................
.............................................
.............................................
0.00–0.75 .............................................................................................
Above 0.75–1.60 ..................................................................................
Above 1.60–2.60 ..................................................................................
Above 2.60 ...........................................................................................
pmangrum on DSK3VPTVN1PROD with NOTICES
If the Exchange did not exclude
aberrant low volume days when
calculating ADV for the month, as a
result of the decreased trading volume,
the numerator for the calculation (e.g.,
trading volume) would be
correspondingly lower, but the
denominator for the threshold
calculations (e.g., the number of trading
days) would not be decreased. This
would result in an effective cost
increase.
[sic] Addition to the Customer Rebate
Tiers, the proposed change will also
impact additional volume based options
pricing related to the Electronic Firm
Fee Discount,6 the QCC Rebate
Schedule 7 and a discount related to
PIXL Initiating Orders (Section II) 8 The
proposed change does not impact the
calculation of fees and rebated [sic] set
forth under Section VIII., Order Routing
and Execution, subsection (a)(1); the
exclusion currently applies to those fees
and it will continue to apply
unchanged. Nor does the proposal does
not [sic] apply to other transaction fees
or rebates that do not include an average
daily volume component.
Absent the authority to exclude days
that the market is not open for the entire
trading day, members will experience
an effective increase in fees or decrease
in rebates. The artificially low volumes
of trading on such days reduce the
average daily activity of PHLX members
both daily and monthly. Accordingly,
excluding such days from the monthly
calculation will diminish the likelihood
of an effective increase in the cost of
trading on PHLX, a result that is
5 These ‘‘Category B Rebates’’ are paid to
members executing electronically-delivered
Customer Complex Orders in Penny Pilot Options
and Non-Penny Pilot Options in Section II symbols.
Rebates are paid on Customer PIXL Complex Orders
in Section II symbols that execute against nonInitiating Order interest, except in the case of
Customer PIXL Complex Orders that are greater
than 999 contracts. All Customer PIXL Complex
Orders that are greater than 999 contracts will be
paid a rebate regardless of the contra-party to the
transaction.
6 Firm electronic Options Transaction Charges in
Penny Pilot and non-Penny Pilot Options are
reduced to $0.17 per contract for a given month
provided that a Firm has volume greater than
500,000 electronically-delivered contracts in a
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14:21 Sep 26, 2013
Jkt 229001
unintended and undesirable to PHLX
and to PHLX members.
2. Statutory Basis
PHLX believes that the proposed rule
change is consistent with the provisions
of Section 6 of the Act,9 in general, and
with Sections 6(b)(4) and 6(b)(5) of the
Act,10 in particular, in that it provides
for the equitable allocation of reasonable
dues, fees and other charges among
members and issuers and other persons
using any facility or system which
PHLX operates or controls, and is not
designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers.
PHLX believes that the proposed
change provides for equitable and
reasonable allocation of fees because it
simply extends to options trading a rule
that currently applies in equities
trading. Moreover, it is equitable and
reasonable to eliminate from the
calculation days on which the market is
not open the entire trading day because
it preserves PHLX’s full intent behind
adopting volume-based pricing. The
proposed change is non-discriminatory
because it applies equally to all
members and to all volume tiers on all
asset classes traded on PHLX. PHLX
will continue to monitor the operation
of the proposed rule change and, in the
event that PHLX identifies a disparate
impact on one or another volume tier in
the future, PHLX may determine to
modify that volume tier via an
additional proposed rule change.
month (‘‘Electronic Firm Fee Discount’’). The
Electronic Firm Fee Discount applies per member
organization when such members are trading in
their own proprietary account.
7 The QCC Rebate Schedule comprises 5 tiers as
follows: Tier 1 (0 to 299,999 contracts in a month)
receives $0.00 rebate per contract; Tier 2 (300,000
to 499,999 contracts in a month) receives $0.07
rebate per contract; Tier 3 (500,000 to 699,999
contracts in a month) receives $0.08 rebate per
contract; Tier 4 (700,000 to 999,999 contracts in a
month) receives $0.09 rebate per contract; and Tier
5 (Over 1,000,000 contracts in a month) receives
$0.11 rebate per contract. The maximum QCC
Rebate to be paid in a given month will not exceed
$375,000.
PO 00000
Frm 00093
Fmt 4703
Sfmt 4703
Category A
$0.00
0.12
0.14
0.15
Category B
$0.00
0.17
0.17
0.17
B. Self-Regulatory Organization’s
Statement on Burden on Competition
PHLX does not believe that the
proposed rule change will result in any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act, as amended.
PHLX notes that it operates in a highly
competitive market in which market
participants can readily favor competing
venues if they deem fee levels at a
particular venue to be excessive, or
rebate opportunities available at other
venues to be more favorable. In such an
environment, PHLX must continually
adjust its fees to remain competitive
with other exchanges and with
alternative trading systems that have
been exempted from compliance with
the statutory standards applicable to
exchanges. Because competitors are free
to modify their own fees in response,
and because market participants may
readily adjust their order routing
practices, PHLX believes that the degree
to which fee changes in this market may
impose any burden on competition is
extremely limited.
PHLX does not believe the proposed
rule change will have an adverse impact
on competition because there has been
no adverse impact from imposing this
rule in the context of equities treading.
Moreover, in this instance, the proposed
rule change should not impact
competition because it merely preserves
the full intent of PHLX’s already-filed
prices, which have not been deemed
inconsistent with the Exchange Act or
been found to impose an undue burden
on competition. Moreover, the proposed
rule change regarding days on which the
8 The PIXL Initiating Order (Section II) pricing is
as follows: $0.07 per contract or $0.05 per contract
if Customer Rebate Program Threshold Volume
defined in Section B is greater than 100,000
contracts per day in a month. Any member or
member organization under Common Ownership
with another member or member organization that
qualifies for a Customer Rebate Tier discount in
Section B will receive the PIXL Initiating Order
discount as described above. The Initiating Order
Fee for Professional, Firm, Broker-Dealer, Specialist
and Market Maker orders that are contra to a
Customer PIXL Order will be reduced to $0.00 if the
Customer PIXL Order is greater than 999 contracts.
9 15 U.S.C. 78f.
10 15 U.S.C. 78f(b)(4) and (5).
E:\FR\FM\27SEN1.SGM
27SEN1
59740
Federal Register / Vol. 78, No. 188 / Friday, September 27, 2013 / Notices
market is not open the entire trading
day will result in an effective reduction
of fees or increase in rebates such that
the total cost of trading on PHLX should
decline. This is evidence that a
proposed rule change is pro-competitive
rather than anti-competitive.
pmangrum on DSK3VPTVN1PROD with NOTICES
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 11 and
subparagraph (f)(6) of Rule 19b–4
thereunder.12
A proposed rule change filed under
Rule 19b–4(f)(6) 13 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),14 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing. The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest. Waiver
will allow the Exchange to immediately
implement the proposed change,
thereby reducing the potential for
confusion among member organizations
and the public about how the Exchange
will calculate thresholds related to
billing for activity on the Exchange
during August 2013. Therefore, the
Commission hereby waives the 30-day
operative delay and designates the
proposal operative upon filing.15
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
11 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
13 17 CFR 240.19b–4(f)(6).
14 17 CFR 240.19b–4(f)(6)(iii).
15 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
12 17
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14:21 Sep 26, 2013
Jkt 229001
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
under Section 19(b)(2)(B) 16 of the Act to
determine whether the proposed rule
change 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 rule-comments@
sec.gov. Please include File Number SR–
PHLX–2013–93 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–2013–93. 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 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 offices 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–
2013–93, and should be submitted on or
before October 18, 2013.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–23540 Filed 9–26–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–70470; File No. SR–
NASDAQ–2013–117]
Self-Regulatory Organizations; the
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Make Minor
Modifications To Pricing Incentive
Programs Under NASDAQ’s Schedule
of Fees and Credits Applicable To
Trading on the NASDAQ Options
Market
September 23, 2013.
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
September 9, 2013, The NASDAQ Stock
Market LLC (‘‘NASDAQ’’ or the
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) a proposed rule change
as described in Items I and II 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 the Substance
of the Proposed Rule Change
NASDAQ is proposing to make minor
modifications to pricing incentive
programs under NASDAQ’s schedule of
fees and credits applicable to trading on
the NASDAQ Options Market (‘‘NOM’’).
Specifically, NASDAQ is proposing to
exclude from volume-based pricing
calculations any trading day on which
NOM is closed for trading due to early
closing or a market-wide trading halt.
This exclusion exists today for the
17 17
16 15
PO 00000
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
U.S.C. 78s(b)(2)(B).
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1 15
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E:\FR\FM\27SEN1.SGM
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]]>Agencies
[Federal Register Volume 78, Number 188 (Friday, September 27, 2013)]
[Notices]
[Pages 59738-59740]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-23540]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-70472; File No. SR-PHLX-2013-93]
Self-Regulatory Organizations; The NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Make a
Minor Modification To Pricing Incentive Programs
September 23, 2013.
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 September 10, 2013, 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 and II
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 the
Substance of the Proposed Rule Change
The Exchange proposes to make a minor modification to pricing
incentive programs under PHLX's schedule of fees and credits applicable
to options trading on PHLX. Specifically, PHLX is proposing to exclude
from volume-based pricing calculations any trading day on which PHLX is
closed for trading due to early closing or a market-wide trading halt.
This exclusion exists today for the trading of equities on PSX, the
equities trading facility of PHLX.
The text of the proposed rule change is available on the Exchange's
Web site at https://nasdaqomxphlx.cchwallstreet.com, at the principal
office of the Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change 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
PSX, the PHLX facility for trading equities, offers pricing for the
trading of equities that is based on average daily volume of trading.
The applicable fee schedule for equities trading on PSX contains
language excluding from such volume calculations any day on which the
market is not open the entire trading day. PHLX Pricing Schedule,
Section VIII, entitled ``Order Routing and Execution,'' footnote to
subsection (a)(4) states that ``For purposes of determining average
daily volume hereunder, any day that the market is not open for the
entire trading day will be excluded from such calculation.'' As a
result, when trading ends early, as for trading days preceding certain
federal holidays, or when there is a material market-wide disruption,
PHLX excludes that day from the calculation of average daily volume.
The PHLX pricing schedule for options also contains pricing
programs based on average daily volume. PHLX has determined to make
this practice uniform for both equities and options trading on PHLX by
moving the relevant language to the preamble of the PHLX Fee Schedule.
In other words, for purposes of calculating any pricing based on
average daily volumes for both equities and options trading any day
that the market is not open for the entire trading day should be
excluded from such calculation. As it currently does for equities, this
formulation would exclude days on which the market closes early for
holiday observance. It would also exclude days where PHLX declares a
trading halt in all securities or honors a market-wide trading halt
declared by another market. This would apply to the market-wide trading
halt of approximately three hours on August 22, 2013, which PHLX plans
to exclude from Customer Rebate Tiers for the month of August.
This change will affect several fees described in PHLX Pricing
Schedule, Section B, which contains pricing incentive programs that are
designed to encourage member participation in PHLX options trading by
increasing rebates or reducing fees for firms that trade on PHLX in
increasingly higher volumes. For example, PHLX currently has four
Customer Rebate Tiers by which it determines the rebate per share for
Customer \3\ orders in Multiply Listed Options (including SPY) that are
electronically-delivered and executed. The Customer Rebate Tier
thresholds are based upon a percentage of national volume of Customer
Orders in certain options on a monthly basis. The rebates range from
$0.00 to $0.15 per contract for Simple Orders \4\ and from $0.00 to
[[Page 59739]]
$0.17 per contract for Complex Orders as follows \5\
---------------------------------------------------------------------------
\3\ The term ``Customer'' applies to any transaction that is
identified by a member or member organization for clearing in the
Customer range at The Options Clearing Corporation (``OCC'') which
is not for the account of broker or dealer or for the account of a
``Professional'' (as that term is defined in Rule 1000(b)(14)).
\4\ These ``Category A Rebates'' are paid to members executing
electronically-delivered Customer Simple Orders in Penny Pilot
Options and Customer Simple Orders in Non-Penny Pilot Options in
Section II symbols. Rebates are paid on Customer PIXL Orders in
Section II symbols that execute against non-Initiating Order
interest, except in the case of Customer PIXL Orders that are
greater than 999 contracts. All Customer PIXL Orders that are
greater than 999 contracts will be paid a rebate regardless of the
contra-party to the transaction.
\5\ These ``Category B Rebates'' are paid to members executing
electronically-delivered Customer Complex Orders in Penny Pilot
Options and Non-Penny Pilot Options in Section II symbols. Rebates
are paid on Customer PIXL Complex Orders in Section II symbols that
execute against non-Initiating Order interest, except in the case of
Customer PIXL Complex Orders that are greater than 999 contracts.
All Customer PIXL Complex Orders that are greater than 999 contracts
will be paid a rebate regardless of the contra-party to the
transaction.
----------------------------------------------------------------------------------------------------------------
Percentage thresholds of national
customer volume in multiply-
Customer rebate tiers listed equity and ETF options Category A Category B
classes, excluding SPY options
(monthly)
----------------------------------------------------------------------------------------------------------------
Tier 1................................... 0.00-0.75........................ $0.00 $0.00
Tier 2................................... Above 0.75-1.60.................. 0.12 0.17
Tier 3................................... Above 1.60-2.60.................. 0.14 0.17
Tier 4................................... Above 2.60....................... 0.15 0.17
----------------------------------------------------------------------------------------------------------------
If the Exchange did not exclude aberrant low volume days when
calculating ADV for the month, as a result of the decreased trading
volume, the numerator for the calculation (e.g., trading volume) would
be correspondingly lower, but the denominator for the threshold
calculations (e.g., the number of trading days) would not be decreased.
This would result in an effective cost increase.
[sic] Addition to the Customer Rebate Tiers, the proposed change
will also impact additional volume based options pricing related to the
Electronic Firm Fee Discount,\6\ the QCC Rebate Schedule \7\ and a
discount related to PIXL Initiating Orders (Section II) \8\ The
proposed change does not impact the calculation of fees and rebated
[sic] set forth under Section VIII., Order Routing and Execution,
subsection (a)(1); the exclusion currently applies to those fees and it
will continue to apply unchanged. Nor does the proposal does not [sic]
apply to other transaction fees or rebates that do not include an
average daily volume component.
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\6\ Firm electronic Options Transaction Charges in Penny Pilot
and non-Penny Pilot Options are reduced to $0.17 per contract for a
given month provided that a Firm has volume greater than 500,000
electronically-delivered contracts in a month (``Electronic Firm Fee
Discount''). The Electronic Firm Fee Discount applies per member
organization when such members are trading in their own proprietary
account.
\7\ The QCC Rebate Schedule comprises 5 tiers as follows: Tier 1
(0 to 299,999 contracts in a month) receives $0.00 rebate per
contract; Tier 2 (300,000 to 499,999 contracts in a month) receives
$0.07 rebate per contract; Tier 3 (500,000 to 699,999 contracts in a
month) receives $0.08 rebate per contract; Tier 4 (700,000 to
999,999 contracts in a month) receives $0.09 rebate per contract;
and Tier 5 (Over 1,000,000 contracts in a month) receives $0.11
rebate per contract. The maximum QCC Rebate to be paid in a given
month will not exceed $375,000.
\8\ The PIXL Initiating Order (Section II) pricing is as
follows: $0.07 per contract or $0.05 per contract if Customer Rebate
Program Threshold Volume defined in Section B is greater than
100,000 contracts per day in a month. Any member or member
organization under Common Ownership with another member or member
organization that qualifies for a Customer Rebate Tier discount in
Section B will receive the PIXL Initiating Order discount as
described above. The Initiating Order Fee for Professional, Firm,
Broker-Dealer, Specialist and Market Maker orders that are contra to
a Customer PIXL Order will be reduced to $0.00 if the Customer PIXL
Order is greater than 999 contracts.
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Absent the authority to exclude days that the market is not open
for the entire trading day, members will experience an effective
increase in fees or decrease in rebates. The artificially low volumes
of trading on such days reduce the average daily activity of PHLX
members both daily and monthly. Accordingly, excluding such days from
the monthly calculation will diminish the likelihood of an effective
increase in the cost of trading on PHLX, a result that is unintended
and undesirable to PHLX and to PHLX members.
2. Statutory Basis
PHLX believes that the proposed rule change is consistent with the
provisions of Section 6 of the Act,\9\ in general, and with Sections
6(b)(4) and 6(b)(5) of the Act,\10\ in particular, in that it provides
for the equitable allocation of reasonable dues, fees and other charges
among members and issuers and other persons using any facility or
system which PHLX operates or controls, and is not designed to permit
unfair discrimination between customers, issuers, brokers, or dealers.
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\9\ 15 U.S.C. 78f.
\10\ 15 U.S.C. 78f(b)(4) and (5).
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PHLX believes that the proposed change provides for equitable and
reasonable allocation of fees because it simply extends to options
trading a rule that currently applies in equities trading. Moreover, it
is equitable and reasonable to eliminate from the calculation days on
which the market is not open the entire trading day because it
preserves PHLX's full intent behind adopting volume-based pricing. The
proposed change is non-discriminatory because it applies equally to all
members and to all volume tiers on all asset classes traded on PHLX.
PHLX will continue to monitor the operation of the proposed rule change
and, in the event that PHLX identifies a disparate impact on one or
another volume tier in the future, PHLX may determine to modify that
volume tier via an additional proposed rule change.
B. Self-Regulatory Organization's Statement on Burden on Competition
PHLX does not believe that the proposed rule change will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended. PHLX notes that it
operates in a highly competitive market in which market participants
can readily favor competing venues if they deem fee levels at a
particular venue to be excessive, or rebate opportunities available at
other venues to be more favorable. In such an environment, PHLX must
continually adjust its fees to remain competitive with other exchanges
and with alternative trading systems that have been exempted from
compliance with the statutory standards applicable to exchanges.
Because competitors are free to modify their own fees in response, and
because market participants may readily adjust their order routing
practices, PHLX believes that the degree to which fee changes in this
market may impose any burden on competition is extremely limited.
PHLX does not believe the proposed rule change will have an adverse
impact on competition because there has been no adverse impact from
imposing this rule in the context of equities treading. Moreover, in
this instance, the proposed rule change should not impact competition
because it merely preserves the full intent of PHLX's already-filed
prices, which have not been deemed inconsistent with the Exchange Act
or been found to impose an undue burden on competition. Moreover, the
proposed rule change regarding days on which the
[[Page 59740]]
market is not open the entire trading day will result in an effective
reduction of fees or increase in rebates such that the total cost of
trading on PHLX should decline. This is evidence that a proposed rule
change is pro-competitive rather than anti-competitive.
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
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \11\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\12\
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \13\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\14\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing. The Commission believes
that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest. Waiver will allow the
Exchange to immediately implement the proposed change, thereby reducing
the potential for confusion among member organizations and the public
about how the Exchange will calculate thresholds related to billing for
activity on the Exchange during August 2013. Therefore, the Commission
hereby waives the 30-day operative delay and designates the proposal
operative upon filing.\15\
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\13\ 17 CFR 240.19b-4(f)(6).
\14\ 17 CFR 240.19b-4(f)(6)(iii).
\15\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of such 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 under
Section 19(b)(2)(B) \16\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\16\ 15 U.S.C. 78s(b)(2)(B).
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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-2013-93 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-2013-93. 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 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 offices 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-2013-93, and should be submitted on or before
October 18, 2013.
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. 2013-23540 Filed 9-26-13; 8:45 am]
BILLING CODE 8011-01-P
