Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Qualified Contingent Cross Rebates, 27968-27970 [2014-11154]
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27968
Federal Register / Vol. 79, No. 94 / Thursday, May 15, 2014 / Notices
subparagraph (f)(6) of Rule 19b–4
thereunder.13
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative for 30 days after the
date of filing.14 However, Rule 19b–
4(f)(6)(iii) permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest.15 The
Exchange has requested that the
Commission waive the 30-day operative
delay so that the Exchange can
implement the enhancements once they
are ready from a technology perspective.
The Commission believes that the
waiver of the 30-day operative delay is
consistent with the protection of
investors and the public interest
because the proposal only extends the
implementation date of the FBMS and
does not make any additional changes to
the FBMS itself. Therefore, the
Commission designates the proposal
operative upon filing.16
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act.17
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–2014–33 on the subject line.
Paper Comments
TKELLEY on DSK3SPTVN1PROD with NOTICES
• Send paper comments in triplicate
to Secretary, Securities and Exchange
13 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
the proposed rule change at least five business days
prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Exchange has satisfied this
requirement.
14 17 CFR 240.19b–4(f)(6)(iii).
15 Id.
16 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
17 15 U.S.C. 78s(b)(3)(C).
VerDate Mar<15>2010
18:18 May 14, 2014
Jkt 232001
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–Phlx–2014–33. 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–Phlx–
2014–33 and should be submitted on or
before June 5, 2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–11153 Filed 5–14–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–72136; File No. SR–Phlx–
2014–31]
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to
Qualified Contingent Cross Rebates
May 9, 2014.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
18 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
PO 00000
Frm 00132
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notice is hereby given that on April 30,
2014, 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 offer an
additional rebate applicable to Qualified
Contingent Cross (‘‘QCC’’) orders.
While the changes proposed herein
are effective upon filing, the Exchange
has designated that the amendments be
operative on May 1, 2014.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://nasdaqomxphlx.cchwall
street.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
The purpose of this filing is to offer
an additional rebate applicable to both
electronic QCC Orders (‘‘eQCC’’) 3 and
3 A QCC Order is comprised of an order to buy
or sell at least 1000 contracts that is identified as
being part of a qualified contingent trade, as that
term is defined in Rule 1080(o)(3), coupled with a
contra-side order to buy or sell an equal number of
contracts. The QCC Order must be executed at a
price at or between the National Best Bid and Offer
and be rejected if a Customer order is resting on the
Exchange book at the same price. A QCC Order
shall only be submitted electronically from off the
floor to the PHLX XL II System. See Rule 1080(o).
See also Securities Exchange Act Release No. 64249
(April 7, 2011), 76 FR 20773 (April 13, 2011) (SR–
Phlx–2011–47) (a rule change to establish a QCC
Order to facilitate the execution of stock/option
Qualified Contingent Trades (‘‘QCTs’’) that satisfy
E:\FR\FM\15MYN1.SGM
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Federal Register / Vol. 79, No. 94 / Thursday, May 15, 2014 / Notices
Floor QCC Orders 4 (collectively ‘‘QCC
Orders’’). The Exchange believes that
the proposed amendment to its pricing
for QCC Orders will enable the
Exchange to attract additional QCC
Orders by increasing the amount of
rebates paid for certain increased
thresholds.
27969
Today, the Exchange pays rebates on
QCC Orders based on the following five
tier rebate schedule:
QCC REBATE SCHEDULE
Tier
Tier
Tier
Tier
Tier
Tier
1
2
3
4
5
Rebate per
contract
Threshold
......................................................................
......................................................................
......................................................................
......................................................................
......................................................................
0 to 299,999 contracts in a month .................................................................
300,000 to 499,999 contracts in a month ......................................................
500,000 to 699,999 contracts in a month ......................................................
700,000 to 999,999 contracts in a month ......................................................
Over 1,000,000 contracts in a month .............................................................
$0.00
0.07
0.08
0.09
0.11
TKELLEY on DSK3SPTVN1PROD with NOTICES
Today, the Exchange pays a rebate on
all qualifying executed QCC Orders,
including eQCC Orders as defined in
Exchange Rule 1080(o) and Floor QCC
Orders, as defined in 1064(e), except
where the transaction is either: (i)
Customer-to-Customer; or (ii) a
dividend,5 merger,6 short stock interest 7
or reversal or conversion strategy 8
execution. Today, the maximum rebate
the Exchange will pay in a given month
for QCC Orders is $375,000. Today, QCC
Transaction Fees for a Specialist,9
Market Maker,10 Professional,11 Firm 12
and Broker-Dealer 13 are $0.20 per
contract.
The Exchange will continue to pay
rebates on QCC Orders as described
above. The Exchange proposes to amend
the QCC Rebate Schedule to offer an
additional rebate of $35,000 for that
month if the member organization
transacts 1,750,000 of qualifying QCC
contracts (‘‘QCC Bonus’’). The QCC
Bonus will only be available during the
month of May 2014 and will be in
addition to the maximum QCC Rebate of
$375,000, if the $375,000 maximum is
reached in May 2014. The QCC Bonus
will not count toward the maximum
QCC Rebate of $375,000.
2. Statutory Basis
The Exchange believes that its
proposal to amend its Pricing Schedule
is consistent with Section 6(b) of the
Act 14 in general, and furthers the
objectives of Section 6(b)(4) and (b)(5) of
the Act 15 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.
The Exchange believes that it is
reasonable to offer market participants a
QCC Bonus because the additional
incentive will further incentivize market
participants to transact a greater number
of QCC Orders on the Exchange during
the month of May 2014. With this
proposal, a market participant would be
entitled to the current QCC Rebates and
would have the ability to earn an even
greater rebate, during the month of May
2014, if the qualifying volume is
transacted.
The Exchange believes that the QCC
Bonus is equitable and not unfairly
discriminatory because all qualifying
market participants are entitled to the
added rebate if they transact a
qualifying number of QCC Orders
during the month of May 2014. All
market participants are eligible to
transact QCC Orders.
the requirements of the trade through exemption in
connection with Rule 611(d) of Regulation NMS).
4 A Floor QCC Order must: (i) Be for at least 1,000
contracts, (ii) meet the six requirements of Rule
1080(o)(3) which are modeled on the QCT
Exemption, (iii) be executed at a price at or between
the National Best Bid and Offer (‘‘NBBO’’); and (iv)
be rejected if a Customer order is resting on the
Exchange book at the same price. In order to satisfy
the 1,000-contract requirement, a Floor QCC Order
must be for 1,000 contracts and could not be, for
example, two 500-contract orders or two 500contract legs. See Rule 1064(e). See also Securities
Exchange Act Release No. 64688 (June 16, 2011), 76
FR 36606 (June 22, 2011) (SR–Phlx–2011–56).
5 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. See Section II of the Pricing Schedule.
6 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.
See Section II of the Pricing Schedule.
7 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. See
Section II of the Pricing Schedule.
8 Reversal and conversion strategies are types of
transactions that employ calls and puts of the same
strike price and the underlying stock. 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. Conversions employ
long positions in the underlying stock that
accompany long puts and short calls sharing the
same strike and expiration. See Section II of the
Pricing Schedule.
9 A ‘‘Specialist’’ is an Exchange member who is
registered as an options specialist pursuant to Rule
1020(a).
10 A ‘‘Market Maker’’ includes Registered Options
Traders (Rule 1014(b)(i) and (ii)), which includes
Streaming Quote Traders (see Rule 1014(b)(ii)(A))
and Remote Streaming Quote Traders (see Rule
1014(b)(ii)(B)). Directed Participants are also market
makers.
11 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).
12 The term ‘‘Firm’’ applies to any transaction that
is identified by a member or member organization
for clearing in the Firm range at OCC.
13 The term ‘‘Broker-Dealer’’ applies to any
transaction which is not subject to any of the other
transaction fees applicable within a particular
category.
14 15 U.S.C. 78f(b).
15 15 U.S.C. 78f(b)(4), (5).
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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. The
Exchange believes that its proposal to
offer the QCC Bonus does not impose a
burden on competition. The Exchange’s
proposal should continue to encourage
market participants to transact a greater
number of QCC Orders in order to
obtain the QCC Bonus during the month
of May 2014. All market participants are
eligible to transact QCC Orders.
The Exchange operates in a highly
competitive market, comprised of
twelve options exchanges, in which
market participants can easily and
readily direct order flow to competing
venues if they deem fee levels at a
particular venue to be excessive or
rebates to be inadequate. Accordingly,
the fees that are assessed and the rebates
paid by the Exchange described in the
E:\FR\FM\15MYN1.SGM
15MYN1
27970
Federal Register / Vol. 79, No. 94 / Thursday, May 15, 2014 / Notices
above proposal are influenced by these
robust market forces and therefore must
remain competitive with fees charged
and rebates paid by other venues and
therefore must continue to be reasonable
and equitably allocated to those
members that opt to direct orders to the
Exchange rather than competing venues.
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.
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:
TKELLEY on DSK3SPTVN1PROD with NOTICES
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–2014–31 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–Phlx–2014–31. 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
16 15
U.S.C. 78s(b)(3)(A)(ii).
VerDate Mar<15>2010
18:18 May 14, 2014
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of 10
a.m. and 3 p.m. Copies of such filing
also will be available for inspection and
copying at the principal 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–
2014–31, and should be submitted on or
before June 5, 2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–11154 Filed 5–14–14; 8:45 am]
(Catalog of Federal Domestic Assistance
Numbers 59002 and 59008)
James E. Rivera,
Associate Administrator for Disaster
Assistance.
[FR Doc. 2014–11200 Filed 5–14–14; 8:45 am]
BILLING CODE 8025–01–P
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration #13967 and #13968]
Alabama Disaster Number AL–00054
BILLING CODE 8011–01–P
SMALL BUSINESS ADMINISTRATION
U.S. Small Business
Administration.
ACTION: Amendment 1.
[Disaster Declaration #13967 and #13968]
SUMMARY:
AGENCY:
Alabama Disaster Number AL–00054
U.S. Small Business
Administration.
ACTION: Amendment 2.
AGENCY:
This is an amendment of the
Presidential declaration of a major
disaster for the State of Alabama
(FEMA–4176–DR), dated 05/02/2014.
Incident: Severe Storms, Tornadoes,
Straight-line Winds, and Flooding.
Incident Period: 04/28/2014 through
05/05/2014.
Effective Date: 05/08/2014.
Physical Loan Application Deadline
Date: 07/01/2014.
EIDL Loan Application Deadline Date:
02/02/2015.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
SUMMARY:
17 17
Jkt 232001
A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street SW., Suite 6050,
Washington, DC 20416.
SUPPLEMENTARY INFORMATION: The notice
of the Presidential disaster declaration
for the State of Alabama, dated 05/02/
2014 is hereby amended to include the
following areas as adversely affected by
the disaster:
Primary Counties: (Physical Damage and
Economic Injury Loans): Blount, De
Kalb, Etowah, Mobile, Tuscaloosa.
Contiguous Counties: (Economic Injury
Loans Only):
Alabama: Calhoun, Cherokee,
Cullman, Fayette, Greene, Hale,
Jackson, Marshall, Pickens.
Georgia: Chattooga, Dade, Walker.
Mississippi: George, Greene, Jackson.
All other information in the original
declaration remains unchanged.
FOR FURTHER INFORMATION CONTACT:
PO 00000
CFR 200.30–3(a)(12).
Frm 00134
Fmt 4703
Sfmt 4703
This is an amendment of the
Presidential declaration of a major
disaster for the State of Alabama
(FEMA–4176–DR), dated 05/02/2014.
Incident: Severe Storms, Tornadoes,
Straight-line Winds, and Flooding.
Incident Period: 04/28/2014 through
05/05/2014.
Effective Date: 05/05/2014.
Physical Loan Application Deadline
Date: 07/01/2014.
EIDL Loan Application Deadline Date:
02/02/2015.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street SW., Suite 6050,
Washington, DC 20416.
SUPPLEMENTARY INFORMATION: The notice
of the President’s major disaster
declaration for the State of Alabama,
E:\FR\FM\15MYN1.SGM
15MYN1
]]>Agencies
[Federal Register Volume 79, Number 94 (Thursday, May 15, 2014)]
[Notices]
[Pages 27968-27970]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-11154]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-72136; File No. SR-Phlx-2014-31]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Qualified Contingent Cross Rebates
May 9, 2014.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on April 30, 2014, 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 offer an additional rebate applicable to
Qualified Contingent Cross (``QCC'') orders.
While the changes proposed herein are effective upon filing, the
Exchange has designated that the amendments be operative on May 1,
2014.
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
The purpose of this filing is to offer an additional rebate
applicable to both electronic QCC Orders (``eQCC'') \3\ and
[[Page 27969]]
Floor QCC Orders \4\ (collectively ``QCC Orders''). The Exchange
believes that the proposed amendment to its pricing for QCC Orders will
enable the Exchange to attract additional QCC Orders by increasing the
amount of rebates paid for certain increased thresholds.
---------------------------------------------------------------------------
\3\ A QCC Order is comprised of an order to buy or sell at least
1000 contracts that is identified as being part of a qualified
contingent trade, as that term is defined in Rule 1080(o)(3),
coupled with a contra-side order to buy or sell an equal number of
contracts. The QCC Order must be executed at a price at or between
the National Best Bid and Offer and be rejected if a Customer order
is resting on the Exchange book at the same price. A QCC Order shall
only be submitted electronically from off the floor to the PHLX XL
II System. See Rule 1080(o). See also Securities Exchange Act
Release No. 64249 (April 7, 2011), 76 FR 20773 (April 13, 2011) (SR-
Phlx-2011-47) (a rule change to establish a QCC Order to facilitate
the execution of stock/option Qualified Contingent Trades (``QCTs'')
that satisfy the requirements of the trade through exemption in
connection with Rule 611(d) of Regulation NMS).
\4\ A Floor QCC Order must: (i) Be for at least 1,000 contracts,
(ii) meet the six requirements of Rule 1080(o)(3) which are modeled
on the QCT Exemption, (iii) be executed at a price at or between the
National Best Bid and Offer (``NBBO''); and (iv) be rejected if a
Customer order is resting on the Exchange book at the same price. In
order to satisfy the 1,000-contract requirement, a Floor QCC Order
must be for 1,000 contracts and could not be, for example, two 500-
contract orders or two 500-contract legs. See Rule 1064(e). See also
Securities Exchange Act Release No. 64688 (June 16, 2011), 76 FR
36606 (June 22, 2011) (SR-Phlx-2011-56).
---------------------------------------------------------------------------
Today, the Exchange pays rebates on QCC Orders based on the
following five tier rebate schedule:
QCC Rebate Schedule
------------------------------------------------------------------------
Rebate per
Tier Threshold contract
------------------------------------------------------------------------
Tier 1............................ 0 to 299,999 $0.00
contracts in a
month.
Tier 2............................ 300,000 to 499,999 0.07
contracts in a
month.
Tier 3............................ 500,000 to 699,999 0.08
contracts in a
month.
Tier 4............................ 700,000 to 999,999 0.09
contracts in a
month.
Tier 5............................ Over 1,000,000 0.11
contracts in a
month.
------------------------------------------------------------------------
Today, the Exchange pays a rebate on all qualifying executed QCC
Orders, including eQCC Orders as defined in Exchange Rule 1080(o) and
Floor QCC Orders, as defined in 1064(e), except where the transaction
is either: (i) Customer-to-Customer; or (ii) a dividend,\5\ merger,\6\
short stock interest \7\ or reversal or conversion strategy \8\
execution. Today, the maximum rebate the Exchange will pay in a given
month for QCC Orders is $375,000. Today, QCC Transaction Fees for a
Specialist,\9\ Market Maker,\10\ Professional,\11\ Firm \12\ and
Broker-Dealer \13\ are $0.20 per contract.
---------------------------------------------------------------------------
\5\ 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. See Section II of the Pricing Schedule.
\6\ 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. See Section II of the Pricing Schedule.
\7\ 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. See Section II of the Pricing Schedule.
\8\ Reversal and conversion strategies are types of transactions
that employ calls and puts of the same strike price and the
underlying stock. 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. Conversions employ long positions in
the underlying stock that accompany long puts and short calls
sharing the same strike and expiration. See Section II of the
Pricing Schedule.
\9\ A ``Specialist'' is an Exchange member who is registered as
an options specialist pursuant to Rule 1020(a).
\10\ A ``Market Maker'' includes Registered Options Traders
(Rule 1014(b)(i) and (ii)), which includes Streaming Quote Traders
(see Rule 1014(b)(ii)(A)) and Remote Streaming Quote Traders (see
Rule 1014(b)(ii)(B)). Directed Participants are also market makers.
\11\ 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).
\12\ The term ``Firm'' applies to any transaction that is
identified by a member or member organization for clearing in the
Firm range at OCC.
\13\ The term ``Broker-Dealer'' applies to any transaction which
is not subject to any of the other transaction fees applicable
within a particular category.
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The Exchange will continue to pay rebates on QCC Orders as
described above. The Exchange proposes to amend the QCC Rebate Schedule
to offer an additional rebate of $35,000 for that month if the member
organization transacts 1,750,000 of qualifying QCC contracts (``QCC
Bonus''). The QCC Bonus will only be available during the month of May
2014 and will be in addition to the maximum QCC Rebate of $375,000, if
the $375,000 maximum is reached in May 2014. The QCC Bonus will not
count toward the maximum QCC Rebate of $375,000.
2. Statutory Basis
The Exchange believes that its proposal to amend its Pricing
Schedule is consistent with Section 6(b) of the Act \14\ in general,
and furthers the objectives of Section 6(b)(4) and (b)(5) of the Act
\15\ 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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\14\ 15 U.S.C. 78f(b).
\15\ 15 U.S.C. 78f(b)(4), (5).
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The Exchange believes that it is reasonable to offer market
participants a QCC Bonus because the additional incentive will further
incentivize market participants to transact a greater number of QCC
Orders on the Exchange during the month of May 2014. With this
proposal, a market participant would be entitled to the current QCC
Rebates and would have the ability to earn an even greater rebate,
during the month of May 2014, if the qualifying volume is transacted.
The Exchange believes that the QCC Bonus is equitable and not
unfairly discriminatory because all qualifying market participants are
entitled to the added rebate if they transact a qualifying number of
QCC Orders during the month of May 2014. All market participants are
eligible to transact QCC Orders.
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. The Exchange believes that its
proposal to offer the QCC Bonus does not impose a burden on
competition. The Exchange's proposal should continue to encourage
market participants to transact a greater number of QCC Orders in order
to obtain the QCC Bonus during the month of May 2014. All market
participants are eligible to transact QCC Orders.
The Exchange operates in a highly competitive market, comprised of
twelve options exchanges, in which market participants can easily and
readily direct order flow to competing venues if they deem fee levels
at a particular venue to be excessive or rebates to be inadequate.
Accordingly, the fees that are assessed and the rebates paid by the
Exchange described in the
[[Page 27970]]
above proposal are influenced by these robust market forces and
therefore must remain competitive with fees charged and rebates paid by
other venues and therefore must continue to be reasonable and equitably
allocated to those members that opt to direct orders to the Exchange
rather than competing venues.
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-2014-31 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-Phlx-2014-31. 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
a.m. and 3 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-2014-31, and should be
submitted on or before June 5, 2014.
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. 2014-11154 Filed 5-14-14; 8:45 am]
BILLING CODE 8011-01-P
