Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Customer Rebate Program, Multiply Listed Options, and Singly-Listed Options, 43151-43156 [2015-17754]
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Federal Register / Vol. 80, No. 139 / Tuesday, July 21, 2015 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.6
Robert W. Errett,
Deputy Secretary.
SECURITIES AND EXCHANGE
COMMISSION
[FR Doc. 2015–17758 Filed 7–20–15; 8:45 am]
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to
Customer Rebate Program, Multiply
Listed Options, and Singly-Listed
Options
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–75457; File No. SR–EDGX–
2015–08]
[Release No. 34–75455; File No. SR–Phlx–
2015–61]
July 15, 2015.
Self-Regulatory Organizations; EDGX
Exchange, Inc.; Notice of Withdrawal
of Proposed Rule Change, as Modified
by Amendment No. 1, To Amend Rules
11.6, 11.8, 11.9, 11.10 and 11.11 of
EDGX Exchange, Inc.
July 15, 2015.
On February 20, 2015, EDGX
Exchange, Inc. (‘‘Exchange’’ or ‘‘EDGX’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to amend Rules 11.6, 11.8, 11.9,
11.10 and 11.11 to clarify and to include
additional specificity regarding the
current functionality of the Exchange’s
system, including the operation of its
order types and order instructions. On
February 27, 2015, the Exchange filed
Amendment No. 1 to the proposal.3 The
proposed rule change, as modified by
Amendment No. 1, was published for
comment in the Federal Register on
March 10, 2015.4 On April 17, 2015, the
Commission extended the time period
in which to either approve or
disapprove the proposed rule change, as
modified by Amendment No. 1, to June
8, 2015.5 The Commission received no
comment letters on the proposed rule
change, as modified by Amendment No.
1. On June 5, 2015, EDGX withdrew the
proposed rule change, as modified by
Amendment No. 1 (SR–EDGX–2015–
08).
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.6
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015–17756 Filed 7–20–15; 8:45 am]
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BILLING CODE 8011–01–P
6 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 Amendment No. 1 replaced SR–EDGX–2015–08
and superseded such filing in its entirety.
4 See Securities Exchange Act Release No. 74439
(March 4, 2015), 80 FR 12666.
5 See Securities Exchange Act Release No. 74762
(April 17, 2015), 80 FR 22753 (April 23, 2015).
6 17 CFR 200.30–3(a)(12).
1 15
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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 July 1,
2015, 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 modify the
Phlx Pricing Schedule (‘‘Pricing
Schedule’’). Specifically, the Exchange
proposes to amend pricing in Section B,
entitled ‘‘Customer Rebate Program,’’ 3
Section II, entitled ‘‘Multiply Listed
Options Fees,’’ 4 and Section III, entitled
‘‘Singly Listed Options,’’ 5 of the Pricing
Schedule. The Exchange proposes these
amendments in order to: (i) Increase the
rebates specifically for Tier 4 and Tier
5 (Category B) electronic Complex 6 and
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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 This includes options overlying equities,
exchange traded funds (‘‘ETFs’’), exchange traded
notes (‘‘ETNs’’) and indexes which are Multiply
Listed.
5 This includes options overlying foreign
exchange (‘‘FX’’), equities, ETFs, ETNs, and indexes
not listed on another exchange.
6 A Complex Order is any order involving the
simultaneous purchase and/or sale of two or more
different options series in the same underlying
security, priced at a net debit or credit based on the
relative prices of the individual components, for the
same account, for the purpose of executing a
particular investment strategy. Furthermore, a
Complex Order can also be a stock-option order,
which is an order to buy or sell a stated number
of units of an underlying stock or ETF coupled with
the purchase or sale of options contract(s). See
Exchange Rule 1080, Commentary .07(a)(i).
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1 15
2 17
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43151
Complex PIXL 7 Orders 8; (ii) increase
the assessment of Multiply Listed
Options fees for non-Penny Pilot 9
Options for electronic Professional,10
Broker-Dealer,11 and Firm 12 orders; (iii)
delete Customer Rebate Tier 2 and Tier
3 from notes 13 [sic] and 14 dealing
with Common Ownership; 13 and (iv)
increase the assessment of Singly-Listed
FX options 14 fees for Professional,
Broker-Dealer, and Firm orders.
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
7 PIXLSM is the Exchange’s price improvement
mechanism known as Price Improvement XL or
PIXL. See Rule 1080(n).
8 A transaction resulting from an order that was
electronically delivered utilizes Phlx XL. See
Exchange Rules 1014 and 1080. Electronically
delivered orders do not include orders transacted
on the Exchange floor. A transaction resulting from
an order that is non-electronically-delivered is
represented on the trading floor by a floor broker.
See Exchange Rule 1063. All orders are either
electronically or non-electronically delivered.
9 The Penny Pilot was established in January 2007
and was last extended in 2015. See Securities
Exchange Act Release Nos. 55153 (January 23,
2007), 72 FR 4553 (January 31, 2007) (SR–Phlx–
2006–74) (notice of filing and approval order
establishing Penny Pilot); and 75286 (June 24, 2015)
(SR–Phlx–2015–54) (notice of filing and immediate
effectiveness extending the Penny Pilot through
June 30, 2016). Non-Penny Pilot Options are
options other than Penny Pilot Options listed on the
Exchange (e.g. AAPL, BAC, EEM, FB, FXI, IWM,
QQQ, TWTR, VXX and XLF), which can be found
at https://www.nasdaqtrader.com/
Micro.aspx?id=phlx.
10 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).
11 The term ‘‘Broker-Dealer’’ applies to any
transaction which is not subject to any of the other
transaction fees applicable within a particular
category.
12 The term ‘‘Firm’’ applies to any transaction that
is identified by a member or member organization
for clearing in the Firm range at The Options
Clearing Corporation.
13 The term ‘‘Common Ownership’’ means
members or member organizations under 75%
common ownership or control.
14 FX options include XDB, XDE, XDN, XDS,
XDA, XDM, XEH, XEV, XDZ, XDC, and XDV.
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Federal Register / Vol. 80, No. 139 / Tuesday, July 21, 2015 / Notices
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 modify
the Pricing Schedule to specifically
amend fees in Section B, entitled
‘‘Customer Rebate Program,’’ Section II,
entitled ‘‘Multiply Listed Options Fees,’’
and Section III, entitled ‘‘Singly Listed
Options.’’ The Exchange proposes these
amendments in order to: (i) Increase the
rebates specifically for Tier 4 and Tier
5 (Category B) electronic Complex and
Complex PIXL Orders; (ii) increase the
assessment of Multiply Listed Options
fees for non-Penny Pilot Options for
electronic Professional, Broker-Dealer,
and Firm orders; (iii) delete Customer
Rebate Tier 2 and Tier 3 from notes 13
[sic] and 14 dealing with Common
Ownership; and (iv) increase the
assessment of Singly-Listed FX options
fees for Professional, Broker-Dealer, and
Firm orders.
Section B—Customer Rebate Program
Currently, the Exchange has a
Customer Rebate Program consisting of
1
2
3
4
5
contracts per order for Simple PIXL
Orders.
Currently, a Category B rebate is paid
to members executing electronicallydelivered 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. Customer Complex PIXL
Orders that execute against a Complex
PIXL Initiating Order will not be paid a
rebate under any circumstances. The
Category B rebate will not be paid when
an electronically-delivered Customer
Complex Order, including a Customer
Complex PIXL Order, executes against
another electronically-delivered
Customer Complex Order. Rebates on
Customer PIXL Orders are capped at
4,000 contracts per order leg for
Complex PIXL Orders. Moreover, the
Exchange will pay a $0.02 per contract
Category A rebate and a $0.03 per
contract Category B rebate in addition to
the applicable Tier 2 and 3 rebate to a
Specialist or Market Maker or its
member or member organization
affiliate under Common Ownership
provided the Specialist or Market Maker
has reached the Monthly Market Maker
Cap, as defined in Section II.
Now, the rebates in all tiers (Category
A and Category B) are as follows:
Percentage thresholds of national customer volume in multiplylisted equity and ETF options classes, excluding spy options
(monthly)
Customer rebate tiers
Tier
Tier
Tier
Tier
Tier
five tiers that pays Customer Rebates on
two categories, A and B, of transactions.
A Phlx member qualifies for a certain
rebate tier based on the percentage of
total national customer volume in
Multiply Listed equity and ETFs options
classes, excluding SPY 15 options that it
transacts monthly on Phlx. The
Exchange calculates Customer volume
in Multiply Listed Options (including
SPY options) by totaling electronicallydelivered and executed volume,
excluding volume associated with
electronic Qualified Contingent Cross
(‘‘QCC’’) Orders,16 as defined in
Exchange Rule 1080(o).17 The Exchange
proposes, as discussed below, to
increase the Tier 4 and Tier 5 Complex
PIXL Orders (Category B) rebates.
Currently, a Category A rebate is paid
to members executing electronicallydelivered 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. In the
instance where member organizations
qualify for Tier 4 or higher in the
Customer Rebate Program, Customer
PIXL Orders that execute against a PIXL
Initiating Order are paid a rebate of
$0.14 per contract. Rebates on Customer
PIXL Orders will be capped at 4,000
...........................................................
...........................................................
...........................................................
...........................................................
...........................................................
0.00%–0.60% .................................................................................
Above 0.60–1.10 ............................................................................
Above 1.10–1.60 ............................................................................
Above 1.60–2.50 ............................................................................
Above 2.50 .....................................................................................
Category A
$0.00
*0.10
*0.12
0.16
0.17
Category B
$0.00
*0.17
*0.17
0.20
0.20
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The Exchange proposes to change the
Tier 4 Customer Rebate (Category B)
from $0.20 to $0.22. The Exchange also
proposes to change the Tier 5 Customer
Rebate (Category B) from $0.20 to
$0.22.18 The Exchange believes that the
proposed increased Category B rebates
will continue to encourage members to
send Customer liquidity to Phlx despite
the cap on PIXL Complex Order rebates
at the proposed 4,000 contracts per
order leg. The Exchange believes that
the proposed two cent increase is
reasonable. Moreover, the Exchange
believes that the resulting 5 cents
difference between Category B Tiers 3
and 4 ($0.17 and $0.22) is reasonable
and fair since, comparatively, the
current difference between Tiers 1 and
2 is 17 cents.
Section II—Multiply Listed Options
15 SPY is the SPDR® S&P 500® ETF Trust. S&P®,
S&P 500®, SPDR®, and Standard & Poor’s® are
registered trademarks of Standard & Poor’s®
Financial Services LLC.
16 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 the Regulation
NMS).
17 Members and member organizations under
common ownership may aggregate their Customer
volume for purposes of calculating the Customer
Rebate Tiers and receiving rebates. Common
ownership means members or member
organizations under 75% common ownership or
control.
18 This is similar to the Chicago Board Options
Exchange (‘‘CBOE’’). See CBOE’s Fee Schedule.
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Currently, the Exchange charges
Customers, Professionals, Specialists
and Market Makers, Broker-Dealers, and
Firms Options Transaction Fees for
Multiply Listed Options (including
options overlying equities, ETFs, ETNs,
and indexes which are Multiply Listed).
The fees are different for Penny Pilot
Options and non-Penny Pilot Options.
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43153
Federal Register / Vol. 80, No. 139 / Tuesday, July 21, 2015 / Notices
Now, the Multiply-Listed Options
fees, per contract, are as follows:
Professional
Specialist and market
maker
Customer
Electronic
Options
Options
Options
Options
Cabinet
Transaction Charge (Penny Pilot) ...................
Transaction Charge (non-Penny Pilot) ............
Surcharge in MNX and NDX ...........................
Surcharge in BKX ............................................
Options ............................................................
The Exchange offers a discount to
Professional, Broker-Dealer, and Firm
for certain orders. Today, notes 13 and
14 apply to fees assessed to a
Professional, Broker-Dealer, and Firm
for electronic orders in certain nonPenny Pilot Options. Note 13 states that
electronic Complex Orders will be
assessed $0.35 per contract. Note 14
states that any member or member
organization under Common Ownership
with another member or member
organization that qualifies for Customer
Rebate Tiers 2, 3, 4 or 5 in Section B of
the Pricing Schedule will be assessed
$0.60 per contract. In addition, note 12
applies to fees assessed to a Firm for
electronic orders in certain non-Penny
Pilot Options. Note 12 states that Firm
electronic simple orders in AAPL, BAC,
EEM, FB, FXI, IWM, QQQ, TWTR, VXX,
and XLF 19 will be assessed $0.34.
The Exchange proposes to amend the
discounted amount that is currently
assessed to a Professional, BrokerDealer, and Firm for electronic orders in
certain Multiply Listed non-Penny Pilot
Options. Whereas today the Exchange
assesses a Professional, Broker-Dealer,
and Firm each a $0.70 per contract
Options Transaction Charge for NonPenny Pilot Options, the Exchange
proposes to increase this fee to $0.75.
Despite the increase in the fee, the
Exchange believes that its fee structure
will continue to incentivize
Professionals, Firms, and Broker-Dealers
to transact electronic non-Penny Pilot
volume on the Exchange.
$0.00
0.00
N/A
N/A
0.00
Floor
13 $0.48
Electronic
$0.25
0.25
0.20
0.10
0.10
13 14 0.70
0.20
0.10
N/A
$0.22
15 0.25
0.20
0.10
N/A
The Exchange offers a discount to
Specialists and Market Makers for
certain orders. Today, note 15 applies to
a Specialist or Market Maker that
transacts electronic orders in non-Penny
Pilot Options. Note 15 states that any
member or member organization under
Common Ownership with another
member or member organization that
qualifies for Customer Rebate Tiers 2, 3,
4 or 5 in Section B of the Pricing
Schedule will be assessed $0.23 per
contract. The Exchange is proposing to
delete the reference to Customer Rebate
Tiers 2 and 3 in note 14 and note 15.
Thus, note 15 would continue to apply
to Specialists and Market Makers such
that after the proposal, per note 15 any
member or member organization under
Common Ownership with another
member or member organization that
qualifies for Customer Rebate Tiers 4 or
5 in Section B of the Pricing Schedule
will be assessed $0.23 per contract.
Today, note 14 applies to a
Professional, Broker-Dealer, or Firm that
transacts electronic orders in non-Penny
Pilot Options. Note 14 states that any
member or member organization under
Common Ownership with another
member or member organization that
qualifies for Customer Rebate Tiers 2, 3,
4 or 5 in Section B of the Pricing
Schedule will be assessed $0.60 per
contract. The Exchange is proposing to
delete the reference in note 14 to
Customer Rebate Tiers 2 and 3, just like
in note 15. Thus, note 14 would
continue to apply to Professionals,
Floor
Broker-dealer
Electronic
13 $0.48
$0.30
0.30
0.20
0.10
0.10
13 14 0.70
0.20
0.10
N/A
Floor
$0.25
0.25
0.20
0.10
0.10
Firm
Electronic
Floor
12 13 $0.48
$0.25
0.25
0.20
0.10
0.10
12 13 14 0.70
0.20
0.10
N/A
Broker-Dealers, and Firms such that
after the proposal, per note 14 any
member or member organization under
Common Ownership with another
member or member organization that
qualifies for Customer Rebate Tiers 4 or
5 in Section B of the Pricing Schedule
will be assessed $0.60 per contract. The
Exchange believes that the qualification
for Customer Rebate Tiers 2 or 3 is no
longer necessary for the discount
incentive in notes 14 and 15,
particularly where Professionals,
Broker-Dealers, Specialists and Market
Makers, and Firms can choose to earn
the discount by qualifying for Customer
Rebate Tiers 4 or 5 by bringing liquidity
to the Exchange.
Despite the proposed deletion of the
reference to Customer Rebate Tiers 2
and 3 in notes 14 and 15, the Exchange
believes that its fee structure will
continue to incentivize Professionals,
Firms, Broker-Dealers, and Specialists
and Market Makers to transact
electronic non-Penny Pilot Option
volume on the Exchange. The Exchange
believes that with the proposed deletion
of the reference to Customer Rebate
Tiers 2 and 3, the incentive remains to
bring more order flow to the Exchange
to earn the discount.
Section III—Singly Listed Options
Currently, fees for Singly Listed
Options are located in Section III of the
Pricing Schedule. The Singly-Listed
Options fees, per contract, are as
follows: 20
Customer
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Options Transaction Charge ................................................
Today, the Exchange assesses an
Options Transaction Charge for
Customers of $0.40 per contract, for
Professionals, Firms, and Broker-Dealers
of $0.70 per contract, and for Specialists
19 All
are currently in the Penny Pilot.
Singly-Listed Options fees also apply to
FX options, these fees are not proposed to be
20 While
Professional
Specialist and
market maker
Firm
Brokerdealer
$0.40
$0.70
$0.40
$0.70
$0.70
and Market Makers of $0.40 per
contract. These fees apply to options
overlying FX, equities, ETNs, ETFs, and
indexes not listed on another
exchange.21 The Exchange proposes to
increase the Professional, Broker-Dealer,
and Firm Options Transaction Charges
from $0.70 to $0.75 per contract for
Singly Listed Options.22 The increase
changed and therefore, for purposes of brevity, are
not reproduced here.
21 These Singly Listed Options include SOX,
HGX, and OSX.
22 The Exchange is not increasing the fees for
Customers and Specialists and Market Makers. As
discussed herein, Customer orders bring valuable
liquidity to the market, which liquidity benefits
Continued
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43154
Federal Register / Vol. 80, No. 139 / Tuesday, July 21, 2015 / Notices
aligns these fees with the abovedescribed proposed electronic nonPenny Pilot fees in Section II of the
Pricing Schedule.23 Despite the fee
increase, the proposal will allow the
Exchange to incentivize market
participants to transact Singly Listed
Options.
The Exchange believes that the fees
and rebates in its Pricing Schedule are
structured to attract liquidity. Tier 4 and
5 of the Customer Rebate Schedule in
Section B, for example, provide the
highest relative rebates in the five tier
Customer Rebate Program to those that
bring the most liquidity to the
Exchange, in particular where the
percentage thresholds of national
customer volume in multiply-listed
equity and ETF Options classes,
excluding SPY Options (monthly) are
also the highest. In making the proposed
changes to the Pricing Schedule, the
Exchange continues to incentivize
members to execute liquidity on the
Exchange.
2. Statutory Basis
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The Exchange believes that its
proposal to amend the Pricing Schedule
is consistent with Section 6(b) of the
Act 24 in general, and furthers the
objectives of Section 6(b)(4) and (b)(5) of
the Act 25 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 market
participants to whom the Exchange’s
fees and rebates are applicable.
Section B—Customer Rebates
The Exchange believes that its
proposal to change the Tier 4 Customer
Rebate (Category B) from $0.20 to $0.22,
and to change the Tier 5 Customer
Rebate (Category B) from $0.20 to $0.22,
is reasonable. These proposed changes
will allow the Exchange to continue to
attract Customer liquidity to the
Exchange. Customer orders bring
valuable liquidity to the market, which
liquidity benefits other market
participants. Customer liquidity benefits
all market participants by providing
more trading opportunities, which
attracts Specialists and Market Makers.
other market participants; and Specialists and
Market Makers have market obligations (e.g., to
make continuous markets) that other market
participants do not have.
23 Professionals, Broker-Dealers, and Firms are
proposed to be similarly assessed a $0.75 per
contract electronic Options Transaction Charge in
Multiply Listed [sic] Options.
24 15 U.S.C. 78f(b).
25 15 U.S.C. 78f(b)(4), (5).
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An increase in the activity of these
market participants in turn facilitates
tighter spreads, which may cause an
additional corresponding increase in
order flow from other market
participants. The Exchange believes that
the proposed increased Category B
rebates will continue to encourage
members to send Customer liquidity to
Phlx despite the cap on PIXL Complex
Order rebates at the proposed 4,000
contracts per order leg. The Exchange
believes that the proposed two cent
increase is reasonable. Additionally, the
CBOE has similar rebates.26
The Exchange believes that its
proposal to change the Tier 4 and Tier
5 Customer Rebate (Category B) from
$0.20 to $0.22 is equitable and not
unfairly discriminatory because these
amendments to Category B apply
uniformly to all market participants to
whom Category B applies. Moreover, the
Exchange believes that the resulting 5
cents difference between Category B
Tiers 3 and 4 ($0.17 and $0.22) is
reasonable and not unfair since,
comparatively, the current difference
between Tiers 1 and 2 is 17 cents.
Section II—Multiply Listed Options
The Exchange believes that increasing
from $0.70 to $0.75 the amount that is
currently assessed to a Professional,
Broker-Dealer, and Firm for electronic
orders in certain Multiply Listed nonPenny Pilot Options is reasonable.
Despite the increase in the fee, the
Exchange believes that its fee structure
will continue to incentivize
Professionals, Broker-Dealers, and Firms
to transact electronic non-Penny Pilot
volume on the Exchange. The Exchange
believes that the proposed fee, although
higher, will continue to incentivize
Professionals, Broker-Dealers, and Firms
to send order flow to the Exchange. In
addition, these modestly increased fees
are consistent with similarly increased
proposed fees for Singly Listed Options.
The Exchange believes that it is
reasonable for it to instill consistency in
its pricing as discussed.
The Exchange believes that increasing
from $0.70 to $0.75 the amount that is
currently assessed to a Professional,
Broker-Dealer, and Firm for electronic
orders in certain Multiply Listed nonPenny Pilot Options is equitable and not
unfairly discriminatory because it
26 CBOE’s VIP credit for certain orders in Tier 3
is $0.22 per contract. See CBOE’s Fees Schedule.
See also Securities Exchange Act Release No.
371588 (June 17, 2015), 80 FR 36021 (June 23, 2015)
(SR–CBOE–2015–058) (rule change increasing VIP
credit for certain orders in Tier 3 from $0.16 per
contract to $0.22 per contract, also in Tier 2 from
$0.16 per contract to $0.21 per contract and in Tier
4 from $0.17 per contract to $0.23 per contract).
PO 00000
Frm 00104
Fmt 4703
Sfmt 4703
applies uniformly to all. Further, the
proposed amendment will continue to
allow the Exchange to incentivize
Professionals, Broker-Dealers, and Firms
to send electronic order flow to the
Exchange for execution. The Exchange’s
fees will be competitive with fees at
other options markets. Although the
Exchange will still be assessing
Professionals, Broker-Dealers, and Firms
more than Customers (which do not pay
the Option Transaction Charge in Penny
Pilot or in non-Penny Pilot Options),
Customer order flow enhances liquidity
on the Exchange for the benefit of all
market participants and benefits all
market participants by providing more
trading opportunities, which attracts
Specialists and Market Makers. An
increase in the activity of these market
participants in turn facilitates tighter
spreads, which may cause an additional
corresponding increase in order flow
from other market participants.
Although Professionals, Broker-Dealers,
and Firms will still be charged more for
non-Penny Pilot Options than
Specialists and Market Makers, who are
charged $0.25 and $0.30, respectively,
Specialists and Market Makers have
obligations to the market and regulatory
requirements, which normally do not
apply to other market participants.27
Specialists and Markets have obligations
to make continuous markets, engage in
a course of dealings reasonably
calculated to contribute to the
maintenance of a fair and orderly
market, and not make bids or offers or
enter into transactions that are
inconsistent with a course of dealings.
The Exchange believes it is reasonable
to propose to delete the reference to
Customer Rebate Tiers 2 and 3 in notes
14 and 15. Thus, note 15 would
continue to apply to Specialists and
Market Makers and after the proposal
any member or member organization
under Common Ownership with
another member or member
organization that qualifies for Customer
Rebate Tiers 4 [sic] or 5 [sic] in Section
B of the Pricing Schedule will be
assessed $0.23 per contract. Similarly,
note 14 would continue to apply to
Professionals, Broker-Dealers, and Firms
and after the proposal any member or
member organization under Common
Ownership with another member or
member organization that qualifies for
Customer Rebate Tiers 4 or 5 in Section
B of the Pricing Schedule will be
assessed $0.60 per contract. The
Exchange believes that the qualification
for Customer Rebate Tiers 4 or 5 is no
27 See Rule 1014 titled ‘‘Obligations and
Restrictions Applicable to Specialists and
Registered Options Traders.’’
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Federal Register / Vol. 80, No. 139 / Tuesday, July 21, 2015 / Notices
longer necessary for the discount
incentive in notes 14 and 15,
particularly where Professionals,
Broker-Dealers, Specialists, and Market
Makers, and Firms can choose to earn
the discount by qualifying for Customer
Rebate Tiers 4 or 5 by bringing liquidity
to the Exchange. Despite the proposed
deletion of the reference to Customer
Rebate Tiers 2 and 3 in notes 14 and 15,
the Exchange believes that its fee
structure will continue to incentivize
Professionals, Firms, Broker-Dealers,
and Specialists and Market Makers to
transact electronic non-Penny Pilot
volume on the Exchange. The Exchange
believes that with the proposed deletion
of the reference to Customer Rebate
Tiers 2 and 3, the incentive remains to
bring more order flow to the Exchange
to earn the discount.
The Exchange believes it is equitable
and not unfairly discriminatory to
increase from $0.70 to $0.75 the
Multiply Listed non-Penny Pilot
Options fee, as well as to delete the
reference to Customer Rebate Tiers 2
and 3 in notes 14 and 15. The Exchange
believes that the proposed changes will
enable to Exchange to continue to
incentivize market participants to bring
non-Penny Pilot Customer liquidity to
the Exchange. Customer liquidity
benefits all market participants by
providing more trading opportunities,
which attracts Specialists and Market
Makers. An increase in the activity of
these market participants in turn
facilitates tighter spreads, which may
cause an additional corresponding
increase in order flow from other market
participants. Specialists and Market
Makers are assessed lower electronic
Options Transaction Charges in Penny
Pilot Options as compared to
Professionals, Broker-Dealers, and Firms
because they have obligations to the
market and regulatory requirements,
which normally do not apply to other
market participants.28 They have
obligations to make continuous markets,
engage in a course of dealings
reasonably calculated to contribute to
the maintenance of a fair and orderly
market, and not make bids or offers or
enter into transactions that are
inconsistent with a course of dealings.
The proposed differentiation as between
Customers and Specialists and Market
Makers and other market participants
(e.g., Professionals, Broker-Dealers, and
Firms) recognizes the differing
contributions made to the liquidity and
trading environment on the Exchange by
these market participants. Moreover, the
28 See Rule 1014 titled ‘‘Obligations and
Restrictions Applicable to Specialists and
Registered Options Traders.’’
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17:58 Jul 20, 2015
Jkt 235001
proposed changes to the fee structure
and rebate structure will be applied
uniformly to all.
Section III—Singly Listed Options
The Exchange believes that increasing
the Professional, Firm, and BrokerDealer Options Transaction Charges is
reasonable because the Exchange is
seeking to conform fees to electronic
Non-Penny Pilot Options 29 pricing for
Multiply Listed Options 30 in order to
recoup the operational costs 31 for
Singly Listed Options. Also, the
Exchange believes the fees are
reasonable because the proposed fees
are within the range of similar fees
assessed at other exchanges.32
The Exchange believes that increasing
the Professional, Firm, and BrokerDealer Options Transaction Charges is
equitable and not unfairly
discriminatory because the pricing will
be comparable among similar categories
of market participants, as is the case
today. Professionals, Firms, and BrokerDealers will be assessed the same rates
($0.70 [sic] per contract) and Customers
and Specialists and Market Makers will
continue to be assessed lower rates as
compared to other market participants.
Customer order flow is, as discussed
above, assessed the lowest fee because
incentivizing members to continue to
offer Customer trading opportunities in
Singly Listed Options benefits all
market participants through increased
liquidity. The Exchange notes that
Specialists and Market Makers are
assessed lower options transaction
charges as compared to other market
participants, except Customers, because
they have burdensome quoting
29 All Singly Listed Options are Non-Penny Pilot
Options.
30 See Section II of the Pricing Schedule.
31 By way of example, in analyzing an obvious
error, the Exchange would have additional data
points available in establishing a theoretical price
for a Multiply Listed Option as compared to a
Singly Listed Option, which requires additional
analysis and administrative time to comply with
Exchange rules to resolve an obvious error.
32 CBOE assesses an $0.80 per contract fee to
Customers, Broker-Dealers, Non-Trading Permit
Holder Market Makers and Professional, Voluntary
Professional and Joint Back-Office market
participants for SPX Range Options (SRO)
transactions, a proprietary index, in addition to a
surcharge fee. SPX refers to options on the Standard
& Poor’s 500 Index. See CBOE’s Fees Schedule. In
addition, NASDAQ Options Market LLC (‘‘NOM’’)
assesses Non-Penny Pilot Fees for Removing
Liquidity ranging from $0.85 to $0.89 per contract
depending on the market participant. See Chapter
XV, Section 2 of NOM’s Rules. The Exchange also
assesses a Professional, Broker-Dealer and Firm an
electronic options transaction charge (non-Penny
Pilot Options) of $0.70 per contract for transactions
in Multiply Listed Options. See Section II of the
Exchange’s Pricing Schedule.
PO 00000
Frm 00105
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43155
obligations 33 to the market which do
not apply to Customers, Professionals,
Firms, and Broker-Dealers. The
proposed differentiation as between
Customers and Specialists and Market
Makers as compared to Professionals,
Firms, and Broker-Dealers recognizes
the differing contributions made to the
liquidity and trading environment on
the Exchange by these market
participants. The proposed changes to
the Options Transactions Charge will be
applied uniformly to all.
The Exchange desires to continue to
incentivize members and member
organizations, through the Exchange’s
rebate and fee structure, to select Phlx
as a venue for bringing liquidity and
trading by offering competitive pricing.
Such competitive, differentiated pricing
exists today on other options exchanges.
The Exchange’s goal is creating and
increasing incentives to attract orders to
the Exchange that will, in turn, benefit
all market participants through
increased liquidity at the Exchange.
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 Customer Rebate Program
amendments in Section B of the Pricing
Schedule do not create an undue burden
on competition and, like all of the
amendments proposed by the Exchange,
will apply uniformly to all market
participants. Moreover, the Section B
amendments will enable the Exchange
to continue to attract liquidity, which
benefits all market participants by
providing more trading opportunities,
which attracts Specialists and Market
Makers. The Exchange’s proposal to
increase the assessment for Professional,
Broker-Dealer, and Firm Multiply-Listed
Options electronic Orders in certain
non-Penny options, and the deletion of
Customer Rebate Tiers 2 and 3 from
notes 14 and 15, does not place an
undue burden on competition, but
rather will similarly allow the Exchange
to continue to attract liquidity. In
addition, the proposed $0.75 fee in
Section II is consistent with what is
assessed by CBOE, as well as the
Exchange proposal in Section III to
increase the assessment applicable to
Professionals, Broker-Dealers, and Firms
that transact Singly-Listed. These
increases do not create an undue burden
on competition, but rather align the
33 See Rule 1014 titled ‘‘Obligations and
Restrictions Applicable to Specialists and
Registered Options Traders.’’
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Federal Register / Vol. 80, No. 139 / Tuesday, July 21, 2015 / Notices
proposed Singly-Listed Option fees in
Section III with the proposed non-Penny
Pilot Option fees in Section II of the
Pricing Schedule, as well as with other
exchanges. Despite these proposed fee
and rebate changes, the Exchange’s
proposal will allow it to continue to
incentivize market participants to bring
liquidity to the Exchange, as described
herein.
The Exchange operates in a highly
competitive market, comprised of
twelve 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, as described in the 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.
The proposed fees are designed to
ensure a fair and reasonable use of
Exchange resources by allowing the
Exchange to recoup costs while
continuing to attract liquidity and offer
connectivity at competitive rates to
Exchange members and member
organizations.
asabaliauskas on DSK5VPTVN1PROD 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
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Act.34 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
34 15
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–2015–61 on the
subject line.
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File
Number SR–Phlx–2015–61. 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–
2015–61 and should be submitted on or
before August 11, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.35
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015–17754 Filed 7–20–15; 8:45 am]
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African Growth and Opportunity Act:
Notice of Initiation of an Out-of-Cycle
Review of South Africa Eligibility for
Benefits; Scheduling of Hearing, and
Request for Public Comments
Office of the United States
Trade Representative.
ACTION: Notice of initiation of review;
notice of hearing and request for
comments.
AGENCY:
This notice announces the
initiation of an out-of-cycle review of
the eligibility of the Republic of South
Africa to receive the benefits of the
African Growth and Opportunity Act
(AGOA), as required by the Trade
Preferences Extension Act of 2015
(TPEA). The AGOA Implementation
Subcommittee of the Trade Policy Staff
Committee (Subcommittee) is requesting
written public comments for this out-ofcycle review and will conduct a public
hearing on this matter. The
Subcommittee will consider the written
comments, written testimony, and oral
testimony in developing
recommendations for the President on
South Africa’s AGOA eligibility. This
notice identifies the eligibility criteria
under AGOA that will be considered in
the review.
DATES: August 5, 2015: Deadline for
filing requests to appear at the August
7 public hearing, and for filing prehearing briefs, statements, or comments
on the Republic of South Africa’s AGOA
eligibility.
August 7, 2015: AGOA
Implementation Subcommittee of the
TPSC will convene a public hearing on
the Republic of South Africa’s AGOA
eligibility.
August 12, 2015: Deadline for filing
post-hearing briefs, statements, or
comments on the Republic of South
Africa’s AGOA eligibility.
ADDRESSES: USTR strongly prefers
electronic submissions made at https://
www.regulations.gov, docket number
USTR–2015–0009. See ‘‘Requirements
for Submission,’’ below. If you are
unable to make a submission at
www.regulations.gov, please contact
Yvonne Jamison, Trade Policy Staff
Committee, at (202) 395–9666 to make
other arrangements.
FOR FURTHER INFORMATION CONTACT: For
procedural questions, please contact
Yvonne Jamison, Office of the U.S.
Trade Representative, 600 17th Street
NW., Room F516, Washington, DC,
20508, at (202) 395–9666. All other
questions should be directed to Alan
Treat, Director, Office of African Affairs,
SUMMARY:
Paper Comments
U.S.C. 78s(b)(3)(A)(ii).
OFFICE OF THE UNITED STATES
TRADE REPRESENTATIVE
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]]>Agencies
[Federal Register Volume 80, Number 139 (Tuesday, July 21, 2015)]
[Notices]
[Pages 43151-43156]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-17754]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-75455; File No. SR-Phlx-2015-61]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Customer Rebate Program, Multiply Listed Options, and Singly-Listed
Options
July 15, 2015.
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 July 1, 2015, 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 modify the Phlx Pricing Schedule
(``Pricing Schedule''). Specifically, the Exchange proposes to amend
pricing in Section B, entitled ``Customer Rebate Program,'' \3\ Section
II, entitled ``Multiply Listed Options Fees,'' \4\ and Section III,
entitled ``Singly Listed Options,'' \5\ of the Pricing Schedule. The
Exchange proposes these amendments in order to: (i) Increase the
rebates specifically for Tier 4 and Tier 5 (Category B) electronic
Complex \6\ and Complex PIXL \7\ Orders \8\; (ii) increase the
assessment of Multiply Listed Options fees for non-Penny Pilot \9\
Options for electronic Professional,\10\ Broker-Dealer,\11\ and Firm
\12\ orders; (iii) delete Customer Rebate Tier 2 and Tier 3 from notes
13 [sic] and 14 dealing with Common Ownership; \13\ and (iv) increase
the assessment of Singly-Listed FX options \14\ fees for Professional,
Broker-Dealer, and Firm orders.
---------------------------------------------------------------------------
\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\ This includes options overlying equities, exchange traded
funds (``ETFs''), exchange traded notes (``ETNs'') and indexes which
are Multiply Listed.
\5\ This includes options overlying foreign exchange (``FX''),
equities, ETFs, ETNs, and indexes not listed on another exchange.
\6\ A Complex Order is any order involving the simultaneous
purchase and/or sale of two or more different options series in the
same underlying security, priced at a net debit or credit based on
the relative prices of the individual components, for the same
account, for the purpose of executing a particular investment
strategy. Furthermore, a Complex Order can also be a stock-option
order, which is an order to buy or sell a stated number of units of
an underlying stock or ETF coupled with the purchase or sale of
options contract(s). See Exchange Rule 1080, Commentary .07(a)(i).
\7\ PIXL\SM\ is the Exchange's price improvement mechanism known
as Price Improvement XL or PIXL. See Rule 1080(n).
\8\ A transaction resulting from an order that was
electronically delivered utilizes Phlx XL. See Exchange Rules 1014
and 1080. Electronically delivered orders do not include orders
transacted on the Exchange floor. A transaction resulting from an
order that is non-electronically-delivered is represented on the
trading floor by a floor broker. See Exchange Rule 1063. All orders
are either electronically or non-electronically delivered.
\9\ The Penny Pilot was established in January 2007 and was last
extended in 2015. See Securities Exchange Act Release Nos. 55153
(January 23, 2007), 72 FR 4553 (January 31, 2007) (SR-Phlx-2006-74)
(notice of filing and approval order establishing Penny Pilot); and
75286 (June 24, 2015) (SR-Phlx-2015-54) (notice of filing and
immediate effectiveness extending the Penny Pilot through June 30,
2016). Non-Penny Pilot Options are options other than Penny Pilot
Options listed on the Exchange (e.g. AAPL, BAC, EEM, FB, FXI, IWM,
QQQ, TWTR, VXX and XLF), which can be found at https://www.nasdaqtrader.com/Micro.aspx?id=phlx.
\10\ 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).
\11\ The term ``Broker-Dealer'' applies to any transaction which
is not subject to any of the other transaction fees applicable
within a particular category.
\12\ The term ``Firm'' applies to any transaction that is
identified by a member or member organization for clearing in the
Firm range at The Options Clearing Corporation.
\13\ The term ``Common Ownership'' means members or member
organizations under 75% common ownership or control.
\14\ FX options include XDB, XDE, XDN, XDS, XDA, XDM, XEH, XEV,
XDZ, XDC, and XDV.
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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
[[Page 43152]]
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 modify the Pricing Schedule to
specifically amend fees in Section B, entitled ``Customer Rebate
Program,'' Section II, entitled ``Multiply Listed Options Fees,'' and
Section III, entitled ``Singly Listed Options.'' The Exchange proposes
these amendments in order to: (i) Increase the rebates specifically for
Tier 4 and Tier 5 (Category B) electronic Complex and Complex PIXL
Orders; (ii) increase the assessment of Multiply Listed Options fees
for non-Penny Pilot Options for electronic Professional, Broker-Dealer,
and Firm orders; (iii) delete Customer Rebate Tier 2 and Tier 3 from
notes 13 [sic] and 14 dealing with Common Ownership; and (iv) increase
the assessment of Singly-Listed FX options fees for Professional,
Broker-Dealer, and Firm orders.
Section B--Customer Rebate Program
Currently, the Exchange has a Customer Rebate Program consisting of
five tiers that pays Customer Rebates on two categories, A and B, of
transactions. A Phlx member qualifies for a certain rebate tier based
on the percentage of total national customer volume in Multiply Listed
equity and ETFs options classes, excluding SPY \15\ options that it
transacts monthly on Phlx. The Exchange calculates Customer volume in
Multiply Listed Options (including SPY options) by totaling
electronically-delivered and executed volume, excluding volume
associated with electronic Qualified Contingent Cross (``QCC'')
Orders,\16\ as defined in Exchange Rule 1080(o).\17\ The Exchange
proposes, as discussed below, to increase the Tier 4 and Tier 5 Complex
PIXL Orders (Category B) rebates.
---------------------------------------------------------------------------
\15\ SPY is the SPDR[supreg] S&P 500[supreg] ETF Trust.
S&P[supreg], S&P 500[supreg], SPDR[supreg], and Standard &
Poor's[supreg] are registered trademarks of Standard &
Poor's[supreg] Financial Services LLC.
\16\ 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 the Regulation NMS).
\17\ Members and member organizations under common ownership may
aggregate their Customer volume for purposes of calculating the
Customer Rebate Tiers and receiving rebates. Common ownership means
members or member organizations under 75% common ownership or
control.
---------------------------------------------------------------------------
Currently, a Category A rebate is 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. In the instance
where member organizations qualify for Tier 4 or higher in the Customer
Rebate Program, Customer PIXL Orders that execute against a PIXL
Initiating Order are paid a rebate of $0.14 per contract. Rebates on
Customer PIXL Orders will be capped at 4,000 contracts per order for
Simple PIXL Orders.
Currently, a Category B rebate is 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. Customer Complex PIXL Orders that
execute against a Complex PIXL Initiating Order will not be paid a
rebate under any circumstances. The Category B rebate will not be paid
when an electronically-delivered Customer Complex Order, including a
Customer Complex PIXL Order, executes against another electronically-
delivered Customer Complex Order. Rebates on Customer PIXL Orders are
capped at 4,000 contracts per order leg for Complex PIXL Orders.
Moreover, the Exchange will pay a $0.02 per contract Category A rebate
and a $0.03 per contract Category B rebate in addition to the
applicable Tier 2 and 3 rebate to a Specialist or Market Maker or its
member or member organization affiliate under Common Ownership provided
the Specialist or Market Maker has reached the Monthly Market Maker
Cap, as defined in Section II.
Now, the rebates in all tiers (Category A and Category B) are as
follows:
----------------------------------------------------------------------------------------------------------------
Percentage thresholds of
national customer volume in
Customer rebate tiers multiply-listed equity and ETF Category A Category B
options classes, excluding spy
options (monthly)
----------------------------------------------------------------------------------------------------------------
Tier 1........................................ 0.00%-0.60%..................... $0.00 $0.00
Tier 2........................................ Above 0.60-1.10................. *0.10 *0.17
Tier 3........................................ Above 1.10-1.60................. *0.12 *0.17
Tier 4........................................ Above 1.60-2.50................. 0.16 0.20
Tier 5........................................ Above 2.50...................... 0.17 0.20
----------------------------------------------------------------------------------------------------------------
The Exchange proposes to change the Tier 4 Customer Rebate
(Category B) from $0.20 to $0.22. The Exchange also proposes to change
the Tier 5 Customer Rebate (Category B) from $0.20 to $0.22.\18\ The
Exchange believes that the proposed increased Category B rebates will
continue to encourage members to send Customer liquidity to Phlx
despite the cap on PIXL Complex Order rebates at the proposed 4,000
contracts per order leg. The Exchange believes that the proposed two
cent increase is reasonable. Moreover, the Exchange believes that the
resulting 5 cents difference between Category B Tiers 3 and 4 ($0.17
and $0.22) is reasonable and fair since, comparatively, the current
difference between Tiers 1 and 2 is 17 cents.
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\18\ This is similar to the Chicago Board Options Exchange
(``CBOE''). See CBOE's Fee Schedule.
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Section II--Multiply Listed Options
Currently, the Exchange charges Customers, Professionals,
Specialists and Market Makers, Broker-Dealers, and Firms Options
Transaction Fees for Multiply Listed Options (including options
overlying equities, ETFs, ETNs, and indexes which are Multiply Listed).
The fees are different for Penny Pilot Options and non-Penny Pilot
Options.
[[Page 43153]]
Now, the Multiply-Listed Options fees, per contract, are as
follows:
--------------------------------------------------------------------------------------------------------------------------------------------------------
Professional Specialist and Broker-dealer Firm
------------------------------------------------------ ---------------------- market maker -------------------------------------------
Customer ----------------------
Electronic Floor Electronic Floor Electronic Floor Electronic Floor
--------------------------------------------------------------------------------------------------------------------------------------------------------
Options Transaction Charge (Penny Pilot)............. $0.00 \13\ $0.48 $0.25 $0.22 $0.30 \13\ $0.48 $0.25 \12\ \13\ $0.25
$0.48
Options Transaction Charge (non-Penny Pilot)......... 0.00 \13\ \14\ 0.25 \15\ 0.25 0.30 \13\ \14\ 0.25 \12\ \13\ 0.25
0.70 0.70 \14\ 0.70
Options Surcharge in MNX and NDX..................... N/A 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20
Options Surcharge in BKX............................. N/A 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10
Cabinet Options...................................... 0.00 N/A 0.10 N/A 0.10 N/A 0.10 N/A 0.10
--------------------------------------------------------------------------------------------------------------------------------------------------------
The Exchange offers a discount to Professional, Broker-Dealer, and
Firm for certain orders. Today, notes 13 and 14 apply to fees assessed
to a Professional, Broker-Dealer, and Firm for electronic orders in
certain non-Penny Pilot Options. Note 13 states that electronic Complex
Orders will be assessed $0.35 per contract. Note 14 states that any
member or member organization under Common Ownership with another
member or member organization that qualifies for Customer Rebate Tiers
2, 3, 4 or 5 in Section B of the Pricing Schedule will be assessed
$0.60 per contract. In addition, note 12 applies to fees assessed to a
Firm for electronic orders in certain non-Penny Pilot Options. Note 12
states that Firm electronic simple orders in AAPL, BAC, EEM, FB, FXI,
IWM, QQQ, TWTR, VXX, and XLF \19\ will be assessed $0.34.
---------------------------------------------------------------------------
\19\ All are currently in the Penny Pilot.
---------------------------------------------------------------------------
The Exchange proposes to amend the discounted amount that is
currently assessed to a Professional, Broker- Dealer, and Firm for
electronic orders in certain Multiply Listed non-Penny Pilot Options.
Whereas today the Exchange assesses a Professional, Broker-Dealer, and
Firm each a $0.70 per contract Options Transaction Charge for Non-Penny
Pilot Options, the Exchange proposes to increase this fee to $0.75.
Despite the increase in the fee, the Exchange believes that its fee
structure will continue to incentivize Professionals, Firms, and
Broker-Dealers to transact electronic non-Penny Pilot volume on the
Exchange.
The Exchange offers a discount to Specialists and Market Makers for
certain orders. Today, note 15 applies to a Specialist or Market Maker
that transacts electronic orders in non-Penny Pilot Options. Note 15
states that any member or member organization under Common Ownership
with another member or member organization that qualifies for Customer
Rebate Tiers 2, 3, 4 or 5 in Section B of the Pricing Schedule will be
assessed $0.23 per contract. The Exchange is proposing to delete the
reference to Customer Rebate Tiers 2 and 3 in note 14 and note 15.
Thus, note 15 would continue to apply to Specialists and Market Makers
such that after the proposal, per note 15 any member or member
organization under Common Ownership with another member or member
organization that qualifies for Customer Rebate Tiers 4 or 5 in Section
B of the Pricing Schedule will be assessed $0.23 per contract.
Today, note 14 applies to a Professional, Broker-Dealer, or Firm
that transacts electronic orders in non-Penny Pilot Options. Note 14
states that any member or member organization under Common Ownership
with another member or member organization that qualifies for Customer
Rebate Tiers 2, 3, 4 or 5 in Section B of the Pricing Schedule will be
assessed $0.60 per contract. The Exchange is proposing to delete the
reference in note 14 to Customer Rebate Tiers 2 and 3, just like in
note 15. Thus, note 14 would continue to apply to Professionals,
Broker-Dealers, and Firms such that after the proposal, per note 14 any
member or member organization under Common Ownership with another
member or member organization that qualifies for Customer Rebate Tiers
4 or 5 in Section B of the Pricing Schedule will be assessed $0.60 per
contract. The Exchange believes that the qualification for Customer
Rebate Tiers 2 or 3 is no longer necessary for the discount incentive
in notes 14 and 15, particularly where Professionals, Broker-Dealers,
Specialists and Market Makers, and Firms can choose to earn the
discount by qualifying for Customer Rebate Tiers 4 or 5 by bringing
liquidity to the Exchange.
Despite the proposed deletion of the reference to Customer Rebate
Tiers 2 and 3 in notes 14 and 15, the Exchange believes that its fee
structure will continue to incentivize Professionals, Firms, Broker-
Dealers, and Specialists and Market Makers to transact electronic non-
Penny Pilot Option volume on the Exchange. The Exchange believes that
with the proposed deletion of the reference to Customer Rebate Tiers 2
and 3, the incentive remains to bring more order flow to the Exchange
to earn the discount.
Section III--Singly Listed Options
Currently, fees for Singly Listed Options are located in Section
III of the Pricing Schedule. The Singly-Listed Options fees, per
contract, are as follows: \20\
---------------------------------------------------------------------------
\20\ While Singly-Listed Options fees also apply to FX options,
these fees are not proposed to be changed and therefore, for
purposes of brevity, are not reproduced here.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Specialist and
Customer Professional market maker Firm Broker- dealer
--------------------------------------------------------------------------------------------------------------------------------------------------------
Options Transaction Charge......................................... $0.40 $0.70 $0.40 $0.70 $0.70
--------------------------------------------------------------------------------------------------------------------------------------------------------
Today, the Exchange assesses an Options Transaction Charge for
Customers of $0.40 per contract, for Professionals, Firms, and Broker-
Dealers of $0.70 per contract, and for Specialists and Market Makers of
$0.40 per contract. These fees apply to options overlying FX, equities,
ETNs, ETFs, and indexes not listed on another exchange.\21\ The
Exchange proposes to increase the Professional, Broker-Dealer, and Firm
Options Transaction Charges from $0.70 to $0.75 per contract for Singly
Listed Options.\22\ The increase
[[Page 43154]]
aligns these fees with the above-described proposed electronic non-
Penny Pilot fees in Section II of the Pricing Schedule.\23\ Despite the
fee increase, the proposal will allow the Exchange to incentivize
market participants to transact Singly Listed Options.
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\21\ These Singly Listed Options include SOX, HGX, and OSX.
\22\ The Exchange is not increasing the fees for Customers and
Specialists and Market Makers. As discussed herein, Customer orders
bring valuable liquidity to the market, which liquidity benefits
other market participants; and Specialists and Market Makers have
market obligations (e.g., to make continuous markets) that other
market participants do not have.
\23\ Professionals, Broker-Dealers, and Firms are proposed to be
similarly assessed a $0.75 per contract electronic Options
Transaction Charge in Multiply Listed [sic] Options.
---------------------------------------------------------------------------
The Exchange believes that the fees and rebates in its Pricing
Schedule are structured to attract liquidity. Tier 4 and 5 of the
Customer Rebate Schedule in Section B, for example, provide the highest
relative rebates in the five tier Customer Rebate Program to those that
bring the most liquidity to the Exchange, in particular where the
percentage thresholds of national customer volume in multiply-listed
equity and ETF Options classes, excluding SPY Options (monthly) are
also the highest. In making the proposed changes to the Pricing
Schedule, the Exchange continues to incentivize members to execute
liquidity on the Exchange.
2. Statutory Basis
The Exchange believes that its proposal to amend the Pricing
Schedule is consistent with Section 6(b) of the Act \24\ in general,
and furthers the objectives of Section 6(b)(4) and (b)(5) of the Act
\25\ 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
market participants to whom the Exchange's fees and rebates are
applicable.
---------------------------------------------------------------------------
\24\ 15 U.S.C. 78f(b).
\25\ 15 U.S.C. 78f(b)(4), (5).
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Section B--Customer Rebates
The Exchange believes that its proposal to change the Tier 4
Customer Rebate (Category B) from $0.20 to $0.22, and to change the
Tier 5 Customer Rebate (Category B) from $0.20 to $0.22, is reasonable.
These proposed changes will allow the Exchange to continue to attract
Customer liquidity to the Exchange. Customer orders bring valuable
liquidity to the market, which liquidity benefits other market
participants. Customer liquidity benefits all market participants by
providing more trading opportunities, which attracts Specialists and
Market Makers. An increase in the activity of these market participants
in turn facilitates tighter spreads, which may cause an additional
corresponding increase in order flow from other market participants.
The Exchange believes that the proposed increased Category B rebates
will continue to encourage members to send Customer liquidity to Phlx
despite the cap on PIXL Complex Order rebates at the proposed 4,000
contracts per order leg. The Exchange believes that the proposed two
cent increase is reasonable. Additionally, the CBOE has similar
rebates.\26\
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\26\ CBOE's VIP credit for certain orders in Tier 3 is $0.22 per
contract. See CBOE's Fees Schedule. See also Securities Exchange Act
Release No. 371588 (June 17, 2015), 80 FR 36021 (June 23, 2015) (SR-
CBOE-2015-058) (rule change increasing VIP credit for certain orders
in Tier 3 from $0.16 per contract to $0.22 per contract, also in
Tier 2 from $0.16 per contract to $0.21 per contract and in Tier 4
from $0.17 per contract to $0.23 per contract).
---------------------------------------------------------------------------
The Exchange believes that its proposal to change the Tier 4 and
Tier 5 Customer Rebate (Category B) from $0.20 to $0.22 is equitable
and not unfairly discriminatory because these amendments to Category B
apply uniformly to all market participants to whom Category B applies.
Moreover, the Exchange believes that the resulting 5 cents difference
between Category B Tiers 3 and 4 ($0.17 and $0.22) is reasonable and
not unfair since, comparatively, the current difference between Tiers 1
and 2 is 17 cents.
Section II--Multiply Listed Options
The Exchange believes that increasing from $0.70 to $0.75 the
amount that is currently assessed to a Professional, Broker-Dealer, and
Firm for electronic orders in certain Multiply Listed non-Penny Pilot
Options is reasonable. Despite the increase in the fee, the Exchange
believes that its fee structure will continue to incentivize
Professionals, Broker-Dealers, and Firms to transact electronic non-
Penny Pilot volume on the Exchange. The Exchange believes that the
proposed fee, although higher, will continue to incentivize
Professionals, Broker-Dealers, and Firms to send order flow to the
Exchange. In addition, these modestly increased fees are consistent
with similarly increased proposed fees for Singly Listed Options. The
Exchange believes that it is reasonable for it to instill consistency
in its pricing as discussed.
The Exchange believes that increasing from $0.70 to $0.75 the
amount that is currently assessed to a Professional, Broker-Dealer, and
Firm for electronic orders in certain Multiply Listed non-Penny Pilot
Options is equitable and not unfairly discriminatory because it applies
uniformly to all. Further, the proposed amendment will continue to
allow the Exchange to incentivize Professionals, Broker-Dealers, and
Firms to send electronic order flow to the Exchange for execution. The
Exchange's fees will be competitive with fees at other options markets.
Although the Exchange will still be assessing Professionals, Broker-
Dealers, and Firms more than Customers (which do not pay the Option
Transaction Charge in Penny Pilot or in non-Penny Pilot Options),
Customer order flow enhances liquidity on the Exchange for the benefit
of all market participants and benefits all market participants by
providing more trading opportunities, which attracts Specialists and
Market Makers. An increase in the activity of these market participants
in turn facilitates tighter spreads, which may cause an additional
corresponding increase in order flow from other market participants.
Although Professionals, Broker-Dealers, and Firms will still be charged
more for non-Penny Pilot Options than Specialists and Market Makers,
who are charged $0.25 and $0.30, respectively, Specialists and Market
Makers have obligations to the market and regulatory requirements,
which normally do not apply to other market participants.\27\
Specialists and Markets have obligations to make continuous markets,
engage in a course of dealings reasonably calculated to contribute to
the maintenance of a fair and orderly market, and not make bids or
offers or enter into transactions that are inconsistent with a course
of dealings.
---------------------------------------------------------------------------
\27\ See Rule 1014 titled ``Obligations and Restrictions
Applicable to Specialists and Registered Options Traders.''
---------------------------------------------------------------------------
The Exchange believes it is reasonable to propose to delete the
reference to Customer Rebate Tiers 2 and 3 in notes 14 and 15. Thus,
note 15 would continue to apply to Specialists and Market Makers and
after the proposal any member or member organization under Common
Ownership with another member or member organization that qualifies for
Customer Rebate Tiers 4 [sic] or 5 [sic] in Section B of the Pricing
Schedule will be assessed $0.23 per contract. Similarly, note 14 would
continue to apply to Professionals, Broker-Dealers, and Firms and after
the proposal any member or member organization under Common Ownership
with another member or member organization that qualifies for Customer
Rebate Tiers 4 or 5 in Section B of the Pricing Schedule will be
assessed $0.60 per contract. The Exchange believes that the
qualification for Customer Rebate Tiers 4 or 5 is no
[[Page 43155]]
longer necessary for the discount incentive in notes 14 and 15,
particularly where Professionals, Broker-Dealers, Specialists, and
Market Makers, and Firms can choose to earn the discount by qualifying
for Customer Rebate Tiers 4 or 5 by bringing liquidity to the Exchange.
Despite the proposed deletion of the reference to Customer Rebate Tiers
2 and 3 in notes 14 and 15, the Exchange believes that its fee
structure will continue to incentivize Professionals, Firms, Broker-
Dealers, and Specialists and Market Makers to transact electronic non-
Penny Pilot volume on the Exchange. The Exchange believes that with the
proposed deletion of the reference to Customer Rebate Tiers 2 and 3,
the incentive remains to bring more order flow to the Exchange to earn
the discount.
The Exchange believes it is equitable and not unfairly
discriminatory to increase from $0.70 to $0.75 the Multiply Listed non-
Penny Pilot Options fee, as well as to delete the reference to Customer
Rebate Tiers 2 and 3 in notes 14 and 15. The Exchange believes that the
proposed changes will enable to Exchange to continue to incentivize
market participants to bring non-Penny Pilot Customer liquidity to the
Exchange. Customer liquidity benefits all market participants by
providing more trading opportunities, which attracts Specialists and
Market Makers. An increase in the activity of these market participants
in turn facilitates tighter spreads, which may cause an additional
corresponding increase in order flow from other market participants.
Specialists and Market Makers are assessed lower electronic Options
Transaction Charges in Penny Pilot Options as compared to
Professionals, Broker-Dealers, and Firms because they have obligations
to the market and regulatory requirements, which normally do not apply
to other market participants.\28\ They have obligations to make
continuous markets, engage in a course of dealings reasonably
calculated to contribute to the maintenance of a fair and orderly
market, and not make bids or offers or enter into transactions that are
inconsistent with a course of dealings. The proposed differentiation as
between Customers and Specialists and Market Makers and other market
participants (e.g., Professionals, Broker-Dealers, and Firms)
recognizes the differing contributions made to the liquidity and
trading environment on the Exchange by these market participants.
Moreover, the proposed changes to the fee structure and rebate
structure will be applied uniformly to all.
---------------------------------------------------------------------------
\28\ See Rule 1014 titled ``Obligations and Restrictions
Applicable to Specialists and Registered Options Traders.''
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Section III--Singly Listed Options
The Exchange believes that increasing the Professional, Firm, and
Broker-Dealer Options Transaction Charges is reasonable because the
Exchange is seeking to conform fees to electronic Non-Penny Pilot
Options \29\ pricing for Multiply Listed Options \30\ in order to
recoup the operational costs \31\ for Singly Listed Options. Also, the
Exchange believes the fees are reasonable because the proposed fees are
within the range of similar fees assessed at other exchanges.\32\
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\29\ All Singly Listed Options are Non-Penny Pilot Options.
\30\ See Section II of the Pricing Schedule.
\31\ By way of example, in analyzing an obvious error, the
Exchange would have additional data points available in establishing
a theoretical price for a Multiply Listed Option as compared to a
Singly Listed Option, which requires additional analysis and
administrative time to comply with Exchange rules to resolve an
obvious error.
\32\ CBOE assesses an $0.80 per contract fee to Customers,
Broker-Dealers, Non-Trading Permit Holder Market Makers and
Professional, Voluntary Professional and Joint Back-Office market
participants for SPX Range Options (SRO) transactions, a proprietary
index, in addition to a surcharge fee. SPX refers to options on the
Standard & Poor's 500 Index. See CBOE's Fees Schedule. In addition,
NASDAQ Options Market LLC (``NOM'') assesses Non-Penny Pilot Fees
for Removing Liquidity ranging from $0.85 to $0.89 per contract
depending on the market participant. See Chapter XV, Section 2 of
NOM's Rules. The Exchange also assesses a Professional, Broker-
Dealer and Firm an electronic options transaction charge (non-Penny
Pilot Options) of $0.70 per contract for transactions in Multiply
Listed Options. See Section II of the Exchange's Pricing Schedule.
---------------------------------------------------------------------------
The Exchange believes that increasing the Professional, Firm, and
Broker-Dealer Options Transaction Charges is equitable and not unfairly
discriminatory because the pricing will be comparable among similar
categories of market participants, as is the case today. Professionals,
Firms, and Broker-Dealers will be assessed the same rates ($0.70 [sic]
per contract) and Customers and Specialists and Market Makers will
continue to be assessed lower rates as compared to other market
participants. Customer order flow is, as discussed above, assessed the
lowest fee because incentivizing members to continue to offer Customer
trading opportunities in Singly Listed Options benefits all market
participants through increased liquidity. The Exchange notes that
Specialists and Market Makers are assessed lower options transaction
charges as compared to other market participants, except Customers,
because they have burdensome quoting obligations \33\ to the market
which do not apply to Customers, Professionals, Firms, and Broker-
Dealers. The proposed differentiation as between Customers and
Specialists and Market Makers as compared to Professionals, Firms, and
Broker-Dealers recognizes the differing contributions made to the
liquidity and trading environment on the Exchange by these market
participants. The proposed changes to the Options Transactions Charge
will be applied uniformly to all.
---------------------------------------------------------------------------
\33\ See Rule 1014 titled ``Obligations and Restrictions
Applicable to Specialists and Registered Options Traders.''
---------------------------------------------------------------------------
The Exchange desires to continue to incentivize members and member
organizations, through the Exchange's rebate and fee structure, to
select Phlx as a venue for bringing liquidity and trading by offering
competitive pricing. Such competitive, differentiated pricing exists
today on other options exchanges. The Exchange's goal is creating and
increasing incentives to attract orders to the Exchange that will, in
turn, benefit all market participants through increased liquidity at
the Exchange.
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 Customer Rebate Program amendments in Section B of the Pricing
Schedule do not create an undue burden on competition and, like all of
the amendments proposed by the Exchange, will apply uniformly to all
market participants. Moreover, the Section B amendments will enable the
Exchange to continue to attract liquidity, which benefits all market
participants by providing more trading opportunities, which attracts
Specialists and Market Makers. The Exchange's proposal to increase the
assessment for Professional, Broker-Dealer, and Firm Multiply-Listed
Options electronic Orders in certain non-Penny options, and the
deletion of Customer Rebate Tiers 2 and 3 from notes 14 and 15, does
not place an undue burden on competition, but rather will similarly
allow the Exchange to continue to attract liquidity. In addition, the
proposed $0.75 fee in Section II is consistent with what is assessed by
CBOE, as well as the Exchange proposal in Section III to increase the
assessment applicable to Professionals, Broker-Dealers, and Firms that
transact Singly-Listed. These increases do not create an undue burden
on competition, but rather align the
[[Page 43156]]
proposed Singly-Listed Option fees in Section III with the proposed
non-Penny Pilot Option fees in Section II of the Pricing Schedule, as
well as with other exchanges. Despite these proposed fee and rebate
changes, the Exchange's proposal will allow it to continue to
incentivize market participants to bring liquidity to the Exchange, as
described herein.
The Exchange operates in a highly competitive market, comprised of
twelve 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, as described in the 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.
The proposed fees are designed to ensure a fair and reasonable use
of Exchange resources by allowing the Exchange to recoup costs while
continuing to attract liquidity and offer connectivity at competitive
rates to Exchange members and member organizations.
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.\34\ 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.
---------------------------------------------------------------------------
\34\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------
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-2015-61 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-Phlx-2015-61. 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-2015-61 and should be
submitted on or before August 11, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\35\
---------------------------------------------------------------------------
\35\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-17754 Filed 7-20-15; 8:45 am]
BILLING CODE 8011-01-P
