Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify the Phlx Pricing Schedule, 55397-55399 [2015-23094]
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mstockstill on DSK4VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 178 / Tuesday, September 15, 2015 / Notices
Exhibits C and D is designed to help the
Commission make the determinations
required under Sections 6(b) and 19(a)
of the Exchange Act 22 with respect to
the application. The updated Exhibit C
and D information required under
Exchange Act Rule 6a–2 is designed to
help the Commission exercise its
oversight responsibilities with respect to
national securities exchanges.
Specifically, Exhibit D is designed to
provide the Commission with
information concerning the financial
status of an exchange and its affiliates
and subsidiaries,23 and Exhibit C is
designed to provide the Commission
with the names and organizational
documents of these affiliates and
subsidiaries.24 Such information is
designed to help the Commission
determine whether an applicant for
exchange registration would have, and a
national securities exchange continues
to have, the ability to carry out its
obligations under the Exchange Act.
Since the most recent amendments to
Form 1 in 1998,25 many national
securities exchanges that previously
were member-owned organizations with
few affiliated entities have
demutualized. Some of these
demutualized exchanges have
consolidated under holding companies
with numerous affiliates that, in some
cases, have only a limited and indirect
connection to the national securities
exchange, with no ability to influence
the management or policies of the
registered exchange, and no obligation
to fund, or to materially affect the
funding of, the registered exchange. The
Commission believes that, for these
affiliated entities, the information
required under Exhibits C and D would
have limited relevance to the
Commission’s review of an application
for exchange registration or to its
oversight of a registered exchange.
Based on the Applicant’s
representations, the indirect nature of
the relationship between the Applicant
and the Foreign Indirect Affiliates, and
the information that the Applicant will
provide with respect to the Foreign
Direct Affiliates and the Foreign Indirect
Affiliates, the Commission believes that
it will have sufficient information to
review the Applicant’s Form 1
application and to make the
determinations required under Sections
6(b) and 19(a) of the Exchange Act with
22 15
U.S.C. 78f(b) and 78s(a).
Securities Exchange Act Release No. 18843
(June 25, 1982), 47 FR 29259 (July 6, 1982)
(proposing amendments to Form 1); see also Form
1, 17 CFR 249.1, and supra Section II.A.
24 Form 1, 17 CFR 249.1. See also supra note 4.
25 See Regulation ATS Adopting Release, supra
note 8, at Section IV.C.
23 See
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respect to its application for registration
as a national securities exchange.26 The
Commission believes, further, that if the
Commission were to approve the
Applicant’s Form 1 application, it will
have the information necessary to
oversee the Applicant’s activities as a
national securities exchange. In
particular, the Commission notes that
the Applicant has represented that it
would have no direct connection to the
Foreign Indirect Affiliates, that the
Foreign Indirect Affiliates would have
no ability to influence the management
or policies of the Applicant, and that the
Foreign Indirect Affiliates would have
no obligation to fund, or ability to
materially affect the funding of, the
Applicant. In addition, the Commission
notes that the Applicant has represented
that: (1) The Foreign Indirect Affiliates
have no ownership interest in the
Applicant or in any of the controlling
equity holders of the Applicant; and (2)
there are no commercial dealings
between the Applicant and the Foreign
Indirect Affiliates.27
Given the limited and indirect
relationship between the Applicant and
the Foreign Indirect Affiliates, as
described above, the Commission
believes that the detailed corporate and
financial information required in
Exhibits C and D with respect to the
Foreign Indirect Affiliates is
unnecessary for the Commission’s
review of the Applicant’s Form 1
application and would be unnecessary
for the Commission’s oversight of the
Applicant as a registered national
securities exchange following any
Commission approval of its Form 1
application.
For the reasons discussed above, the
Commission finds that the conditional
exemptive relief requested by the
Applicant is appropriate in the public
interest and is consistent with the
protection of investors.
The Commission may modify by order
the terms, scope or conditions of this
exemption if it determines that such
modification is necessary or appropriate
in the public interest, or is consistent
with the protection of investors.
Furthermore, the Commission may
limit, suspend, or revoke this exemption
if it finds that the Applicant has failed
55397
to comply with, or is unable to comply
with, any of the conditions set forth in
this order, if such action is necessary or
appropriate in the public interest, or is
consistent with the protection of
investors.
It is ordered, pursuant to Section 36
of the Exchange Act,28 that the
Applicant is exempt from the
requirements to: (1) Include in its Form
1 application the information required
in Exhibits C and D to Form 1 with
respect to the Foreign Indirect Affiliates;
and (2) with respect to the Foreign
Indirect Affiliates, update the
information in Exhibits C and D to Form
1 as required by Exchange Act Rules 6a–
2(a)(2), 6a–2(b)(1), and 6a–2(c) subject to
the following conditions:
(i) The Applicant must provide a list
of the names of the Foreign Indirect
Affiliates;
(ii) the Applicant must provide an
organizational chart setting forth the
affiliation of the Foreign Indirect
Affiliates and the Foreign Direct
Affiliates and the Applicant; and
(iii) as part of Exhibit C to the
Applicant’s Form 1 Application, the
Applicant must provide a description of
the nature of the affiliation between the
Foreign Indirect Affiliates and the
Foreign Direct Affiliates and the
Applicant.
In addition, the Applicant must
provide amendments to the information
required under conditions (i) through
(iii) above on or before June 30th of each
year.
By the Commission.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015–23106 Filed 9–14–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–75866; File No. SR–Phlx–
2015–75]
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Modify the
Phlx Pricing Schedule
September 9, 2015.
26 15
U.S.C. 78f(b) and 78s(a). Section 6(b) of the
Exchange Act enumerates certain determinations
that the Commission must make with respect to an
exchange before granting the registration of the
exchange as a national securities exchange. The
Commission will not grant an exchange registration
as a national securities exchange unless the
Commission determines that the exchange meets
these requirements. See Regulation ATS Adopting
Release, supra note 8, at Section IV.B.
27 See Exemption Request, supra note 3, at 3;
supra note 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 August
27, 2015, NASDAQ OMX PHLX LLC
(‘‘Phlx’’ or ‘‘Exchange’’) filed with the
28 15
U.S.C. 78mm.
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
E:\FR\FM\15SEN1.SGM
15SEN1
55398
Federal Register / Vol. 80, No. 178 / Tuesday, September 15, 2015 / Notices
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 Section I, entitled
‘‘Rebates and Fees for Adding and
Removing Liquidity in SPY’’ by
assessing all market participants other
than Customers 3 a fee of $0.15 per
contract for executions against an order
for which the Exchange broadcasts an
order exposure alert in SPY.4
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
mstockstill on DSK4VPTVN1PROD with NOTICES
1. Purpose
The purpose of this filing is to modify
the Pricing Schedule by amending
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)). The term ‘‘Non-Customer’’
applies to transactions for the accounts of
Specialists, Market Makers, Firms, Professionals,
Broker-Dealers and JBOs.
4 Options overlying Standard and Poor’s
Depositary Receipts/SPDRs (‘‘SPY’’) are based on
the SPDR exchange-traded fund (‘‘ETF’’), which is
designed to track the performance of the S&P 500
Index.
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Section I, entitled ‘‘Rebates and Fees for
Adding and Removing Liquidity in
SPY.’’ Currently, Section 1 provides that
no fees will be assessed and no rebates
will be paid on transactions which
execute against an order for which the
Exchange broadcast (sic) 5 an order
exposure alert in SPY.6
The Exchange now proposes to assess
all market participants other than
Customers a fee of $0.15 per contract for
such executions. Thus, the fee for such
executions will apply to transactions for
the accounts of Specialists,7 Market
Makers,8 Firms,9 Professionals,10
Broker-Dealers 11 and JBOs 12
(collectively, ‘‘Non-Customers’’). The
Exchange is adopting this fee at this
time because it believes that the
associated revenue will allow the
Exchange to enhance its services and
that offering this service for free is no
longer a required incentive to remain
5 The Exchange is correcting the word
‘‘broadcast’’ to read ‘‘broadcasts’’.
6 Exchange Rule 1080(m) provides for the
broadcast of certain orders that are on the Phlx
Book. The Exchange broadcasts orders on the Phlx
Book by issuing order exposure alerts to all Phlx
market participants that subscribe to certain data
feeds. See Securities Exchange Act Release No.
68517 (December 21, 2012), 77 FR 77134 (December
31, 2012) (SR-Phlx-2012–136). When it adopted the
current pricing schedule provision which now is
proposed to be amended, the Exchange stated its
belief that not assessing fees (or paying a rebate)
when removing orders from the order book in SPY
where an order exposure alert was issued would
incentivize market participants to remove liquidity
from the Phlx Book. See Securities Exchange Act
Release No. 69768 (June 14, 2013), 78 FR 37250
(June 20, 2013) (SR–Phlx–2013–61).
7 A Specialist is an Exchange member who is
registered as an options specialist pursuant to Rule
1020(a).
8 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.
9 The term ‘‘Firm’’ applies to any transaction that
is identified by a member or member organization
for clearing in the Firm range at OCC.
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 ‘‘Joint Back Office’’ or ‘‘JBO’’ applies
to any transaction that is identified by a member or
member organization for clearing in the Firm range
at OCC and is identified with an origin code as a
JBO. A JBO will be priced the same as a BrokerDealer. A JBO participant is a member, member
organization or non-member organization that
maintains a JBO arrangement with a clearing
broker-dealer (‘‘JBO Broker’’) subject to the
requirements of Regulation T Section 220.7 of the
Federal Reserve System as further discussed at
Exchange Rule 703.
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Frm 00077
Fmt 4703
Sfmt 4703
competitive with other options
exchanges.
2. Statutory Basis
The Exchange believes that its
proposal to amend the Pricing Schedule
is consistent with Section 6(b) of the
Act 13 in general, and furthers the
objectives of Section 6(b)(4) and (b)(5) of
the Act 14 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.
The Exchange’s proposal is reasonable
because the proposed $0.15 fee is lower
than the standard fee for removing
liquidity in SPY and lower than fees
assessed for similar activities at other
options exchanges. For example, the
Chicago Board Options Exchange
(‘‘CBOE’’) assesses fees ranging from
$0.05 to $0.45 for executions in Equity
and ETF Options, including SPY, and
offers market makers a $0.05 rebate if
they meet certain quoting obligations for
executions in Hybrid Agency Liaison
(‘‘HAL’’). The Exchange’s order
exposure alert is similar to HAL and the
proposed rate is within the range of fees
CBOE assesses for executions in HAL. It
is also reasonable not to extend the new
fee to Customer transactions because
Customer orders bring valuable liquidity
to the market which 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’s proposal is equitable
and not unfairly discriminatory because
the Exchange will be assessing the same
new $0.15 fee on transactions by all
market participants (except Customers)
in the same manner. As stated above,
Customer liquidity benefits all market
participants by providing more trading
opportunities, which attracts Specialists
and Market Makers. It is therefore
equitable and not unfairly
discriminatory to not apply the new fee
to Customer transactions.
13 15
14 15
E:\FR\FM\15SEN1.SGM
U.S.C. 78f(b).
U.S.C. 78f(b)(4), (5).
15SEN1
Federal Register / Vol. 80, No. 178 / Tuesday, September 15, 2015 / Notices
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’s proposal to impose the new
$0.15 fee on executions other than
Customer executions does not misalign
the fees related to Customer as
compared to Non-Customer orders.
Today, Customers have lower fees
because 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 new
fee does not impose any undue burden
on competition as all market
participants, except Customers will be
assessed the same fee.
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, 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.
mstockstill on DSK4VPTVN1PROD 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.15
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: (i) Necessary or appropriate in
the public interest; (ii) for the protection
of investors; or (iii) otherwise in
furtherance of the purposes of the Act.
15 15
U.S.C. 78s(b)(3)(A)(ii).
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19:04 Sep 14, 2015
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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
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–2015–75 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–2015–75. 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–2015–75 and should
be submitted on or before October 6,
2015.
Frm 00078
Fmt 4703
Sfmt 4703
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015–23094 Filed 9–14–15; 8:45 am]
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:
PO 00000
55399
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
31807; 812–13995]
TIAA–CREF Funds, et al.; Notice of
Application
September 8, 2015.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice of application for an
order under sections 6(c) and 17(b) of
the Investment Company Act of 1940
(‘‘Act’’) for exemptions from section
17(a) of the Act, and under section 17(d)
of the Act and rule 17d–1 thereunder to
permit certain joint transactions.
AGENCY:
Applicants
requests an order that would permit
certain registered management
investment companies or series thereof
that are advised by Teachers Advisors,
Inc. (‘‘Advisors’’) to invest in a private
investment vehicle established by
Advisors to invest directly in real estate.
APPLICANTS: TIAA–CREF Funds (the
‘‘Trust’’), Advisors, TIAA–CREF Real
Property Fund LP (‘‘TCLP’’), TIAA–
CREF Real Property Fund GP LLC
(‘‘TCGP’’), and TIAA–CREF Real
Property Fund REIT LLC (‘‘TC REIT’’).
FILING DATES: The application was filed
on January 4, 2012, and amended on
June 25, 2012, December 3, 2012,
October 16, 2013, June 26, 2014, May 8,
2015, and September 4, 2015.
HEARING OR NOTIFICATION OF HEARING: An
order granting the requested relief will
be issued unless the Commission orders
a hearing. Interested persons may
request a hearing by writing to the
Commission’s Secretary and serving
Applicants with a copy of the request,
personally or by mail. Hearing requests
should be received by the Commission
by 5:30 p.m. on October 5, 2015, and
should be accompanied by proof of
service on Applicants, in the form of an
affidavit or, for lawyers, a certificate of
service. Pursuant to rule 0–5 of the Act,
hearing requests should state the nature
of the writer’s interest, any facts bearing
upon the desirability of a hearing on the
matter, the reason for the request, and
the issues contested. Persons who wish
SUMMARY OF APPLICATION:
16 17
E:\FR\FM\15SEN1.SGM
CFR 200.30–3(a)(12).
15SEN1
]]>Agencies
[Federal Register Volume 80, Number 178 (Tuesday, September 15, 2015)]
[Notices]
[Pages 55397-55399]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-23094]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-75866; File No. SR-Phlx-2015-75]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Modify
the Phlx Pricing Schedule
September 9, 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 August 27, 2015, NASDAQ OMX PHLX LLC (``Phlx'' or ``Exchange'')
filed with the
[[Page 55398]]
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
Section I, entitled ``Rebates and Fees for Adding and Removing
Liquidity in SPY'' by assessing all market participants other than
Customers \3\ a fee of $0.15 per contract for executions against an
order for which the Exchange broadcasts an order exposure alert in
SPY.\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)). The
term ``Non-Customer'' applies to transactions for the accounts of
Specialists, Market Makers, Firms, Professionals, Broker-Dealers and
JBOs.
\4\ Options overlying Standard and Poor's Depositary Receipts/
SPDRs (``SPY'') are based on the SPDR exchange-traded fund
(``ETF''), which is designed to track the performance of the S&P 500
Index.
---------------------------------------------------------------------------
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 modify the Pricing Schedule by
amending Section I, entitled ``Rebates and Fees for Adding and Removing
Liquidity in SPY.'' Currently, Section 1 provides that no fees will be
assessed and no rebates will be paid on transactions which execute
against an order for which the Exchange broadcast (sic) \5\ an order
exposure alert in SPY.\6\
---------------------------------------------------------------------------
\5\ The Exchange is correcting the word ``broadcast'' to read
``broadcasts''.
\6\ Exchange Rule 1080(m) provides for the broadcast of certain
orders that are on the Phlx Book. The Exchange broadcasts orders on
the Phlx Book by issuing order exposure alerts to all Phlx market
participants that subscribe to certain data feeds. See Securities
Exchange Act Release No. 68517 (December 21, 2012), 77 FR 77134
(December 31, 2012) (SR-Phlx-2012-136). When it adopted the current
pricing schedule provision which now is proposed to be amended, the
Exchange stated its belief that not assessing fees (or paying a
rebate) when removing orders from the order book in SPY where an
order exposure alert was issued would incentivize market
participants to remove liquidity from the Phlx Book. See Securities
Exchange Act Release No. 69768 (June 14, 2013), 78 FR 37250 (June
20, 2013) (SR-Phlx-2013-61).
---------------------------------------------------------------------------
The Exchange now proposes to assess all market participants other
than Customers a fee of $0.15 per contract for such executions. Thus,
the fee for such executions will apply to transactions for the accounts
of Specialists,\7\ Market Makers,\8\ Firms,\9\ Professionals,\10\
Broker-Dealers \11\ and JBOs \12\ (collectively, ``Non-Customers'').
The Exchange is adopting this fee at this time because it believes that
the associated revenue will allow the Exchange to enhance its services
and that offering this service for free is no longer a required
incentive to remain competitive with other options exchanges.
---------------------------------------------------------------------------
\7\ A Specialist is an Exchange member who is registered as an
options specialist pursuant to Rule 1020(a).
\8\ 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.
\9\ The term ``Firm'' applies to any transaction that is
identified by a member or member organization for clearing in the
Firm range at OCC.
\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 ``Joint Back Office'' or ``JBO'' applies to any
transaction that is identified by a member or member organization
for clearing in the Firm range at OCC and is identified with an
origin code as a JBO. A JBO will be priced the same as a Broker-
Dealer. A JBO participant is a member, member organization or non-
member organization that maintains a JBO arrangement with a clearing
broker-dealer (``JBO Broker'') subject to the requirements of
Regulation T Section 220.7 of the Federal Reserve System as further
discussed at Exchange Rule 703.
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2. Statutory Basis
The Exchange believes that its proposal to amend the Pricing
Schedule is consistent with Section 6(b) of the Act \13\ in general,
and furthers the objectives of Section 6(b)(4) and (b)(5) of the Act
\14\ 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.
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\13\ 15 U.S.C. 78f(b).
\14\ 15 U.S.C. 78f(b)(4), (5).
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The Exchange's proposal is reasonable because the proposed $0.15
fee is lower than the standard fee for removing liquidity in SPY and
lower than fees assessed for similar activities at other options
exchanges. For example, the Chicago Board Options Exchange (``CBOE'')
assesses fees ranging from $0.05 to $0.45 for executions in Equity and
ETF Options, including SPY, and offers market makers a $0.05 rebate if
they meet certain quoting obligations for executions in Hybrid Agency
Liaison (``HAL''). The Exchange's order exposure alert is similar to
HAL and the proposed rate is within the range of fees CBOE assesses for
executions in HAL. It is also reasonable not to extend the new fee to
Customer transactions because Customer orders bring valuable liquidity
to the market which 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's proposal is equitable and not unfairly
discriminatory because the Exchange will be assessing the same new
$0.15 fee on transactions by all market participants (except Customers)
in the same manner. As stated above, Customer liquidity benefits all
market participants by providing more trading opportunities, which
attracts Specialists and Market Makers. It is therefore equitable and
not unfairly discriminatory to not apply the new fee to Customer
transactions.
[[Page 55399]]
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's proposal to
impose the new $0.15 fee on executions other than Customer executions
does not misalign the fees related to Customer as compared to Non-
Customer orders. Today, Customers have lower fees because 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 new fee does not impose any undue burden on competition as all
market participants, except Customers will be assessed the same fee.
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, 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.
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.\15\
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\15\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-Phlx-2015-75 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-2015-75. 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-2015-75 and
should be submitted on or before October 6, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-23094 Filed 9-14-15; 8:45 am]
BILLING CODE 8011-01-P
