Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NASDAQ OMX PHLX Fee Schedule To Increase the Options Surcharge Fee for MNX and NDX, 116-118 [2015-32990]
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116
Federal Register / Vol. 81, No. 1 / Monday, January 4, 2016 / Notices
FOR FURTHER INFORMATION CONTACT:
Maria Votsch, 202–268–6525.
SUPPLEMENTARY INFORMATION: The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on December 23,
2015, it filed with the Postal Regulatory
Commission a Request of the United
States Postal Service to Add Priority
Mail Contract 175 to Competitive
Product List. Documents are available at
www.prc.gov, Docket Nos. MC2016–53,
CP2016–68.
Stanley F. Mires,
Attorney, Federal Compliance.
[FR Doc. 2015–33009 Filed 12–31–15; 8:45 am]
BILLING CODE 7710–12–P
Stanley F. Mires,
Attorney, Federal Compliance.
POSTAL SERVICE
[FR Doc. 2015–33007 Filed 12–31–15; 8:45 am]
Product Change—Priority Mail and
First-Class Package Service
Negotiated Service Agreement
BILLING CODE 7710–12–P
SECURITIES AND EXCHANGE
COMMISSION
Postal ServiceTM.
ACTION: Notice.
AGENCY:
[File No. 500–1]
The Postal Service gives
notice of filing a request with the Postal
Regulatory Commission to add a
domestic shipping services contract to
the list of Negotiated Service
Agreements in the Mail Classification
Schedule’s Competitive Products List.
DATES: Effective date: January 4, 2016.
FOR FURTHER INFORMATION CONTACT:
Valerie J. Pelton, 202–268–3049.
SUPPLEMENTARY INFORMATION: The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on December 23,
2015, it filed with the Postal Regulatory
Commission a Request of the United
States Postal Service to Add Priority
Mail & First-Class Package Service
Contract 10 to Competitive Product List.
Documents are available at
www.prc.gov, Docket Nos. MC2016–58,
CP2016–73.
SUMMARY:
Stanley F. Mires,
Attorney, Federal Compliance.
[FR Doc. 2015–33001 Filed 12–31–15; 8:45 am]
BILLING CODE 7710–12–P
POSTAL SERVICE
tkelley on DSK3SPTVN1PROD with NOTICES
Product Change—Priority Mail
Negotiated Service Agreement
Postal ServiceTM.
ACTION: Notice.
AGENCY:
The Postal Service gives
notice of filing a request with the Postal
Regulatory Commission to add a
domestic shipping services contract to
SUMMARY:
VerDate Sep<11>2014
16:43 Dec 31, 2015
the list of Negotiated Service
Agreements in the Mail Classification
Schedule’s Competitive Products List.
DATES: Effective date: January 4, 2016.
FOR FURTHER INFORMATION CONTACT:
Valerie J. Pelton, 202–268–3049.
SUPPLEMENTARY INFORMATION: The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on December 23,
2015, it filed with the Postal Regulatory
Commission a Request of the United
States Postal Service to Add Priority
Mail Contract 176 to Competitive
Product List. Documents are available at
www.prc.gov, Docket Nos. MC2016–54,
CP2016–69.
Jkt 238001
In the Matter of USA Graphite, Inc.,
Order of Suspension of Trading
December 30, 2015.
It appears to the Securities and
Exchange Commission (‘‘Commission’’)
that there is a lack of current and
accurate information concerning the
securities of USA Graphite, Inc.
(‘‘USGT 1’’) (CIK No. 1355420), a
revoked Nevada corporation whose
principal place of business is listed as
Kuala Lumpur, Malaysia because it is
delinquent in its periodic filings with
the Commission, having not filed any
periodic reports since it filed a Form
10–K for the period ended August 31,
2013. On April 22, 2015, the
Commission’s Division of Corporation
Finance sent a delinquency letter to
USGT at the address shown in its thenmost recent filing in the Commission’s
EDGAR system requesting compliance
with its periodic filing requirements,
which USGT received on April 25,
2015. To date, USGT has failed to cure
its delinquencies. As of December 15,
2015, the common stock of USGT was
quoted on OTC Link operated by OTC
Markets Group, Inc. (formerly ‘‘Pink
Sheets’’) had seven market makers and
was eligible for the ‘‘piggyback’’
exception of Exchange Act Rule 15c2–
11(f)(3).
The Commission is of the opinion that
the public interest and the protection of
investors require a suspension of trading
1 The short form of the issuer’s name is also its
ticker symbol.
PO 00000
Frm 00056
Fmt 4703
Sfmt 4703
in the securities of the above-listed
company. Therefore, it is ordered,
pursuant to Section 12(k) of the
Securities Exchange Act of 1934, that
trading in the securities of the abovelisted company is suspended for the
period from 9:30 a.m. EST on December
30, 2015, through 11:59 p.m. EST on
January 13, 2016.
By the Commission.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2015–33138 Filed 12–30–15; 4:15 pm]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–76780; File No. SR–Phlx–
2015–111]
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend the
NASDAQ OMX PHLX Fee Schedule To
Increase the Options Surcharge Fee
for MNX and NDX
December 28, 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 December
18, 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 amend the
Exchange’s Pricing Schedule at Section
II, entitled ‘‘Multiply Listed Options
Fees (Includes options overlying
equities, ETFs, ETNs and indexes which
are Multiply Listed).’’ 3 The Exchange
purposes to increase the Options
Surcharge in MNX 4 and NDX.5
While the changes proposed herein
are effective upon filing, the Exchange
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 The following symbols are assessed the fees in
Section III for Singly Listed Options: SOX, HGX and
OSX, and not Section II.
4 MNX represents options on the one-tenth value
of the Nasdaq 100 Index traded under the symbol
MNX (‘‘MNX’’).
5 NDX represents options on the Nasdaq 100
Index traded under the symbol NDX (‘‘NDX’’).
2 17
E:\FR\FM\04JAN1.SGM
04JAN1
Federal Register / Vol. 81, No. 1 / Monday, January 4, 2016 / Notices
has designated the amendments to
become operative on January 4, 2016.
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
tkelley on DSK3SPTVN1PROD with NOTICES
1. Purpose
The Exchange proposes to increase
the Options Surcharge for transactions
in MNX and NDX from $0.20 to $0.25
per contract for all non-Customers
(Professionals,6 Market Makers,7
Specialists,8 Broker-Dealers 9 and
Firms 10) in Section II of the Pricing
Schedule. Customers 11 will continue
not to be assessed an Options Surcharge
in MNX and NDX. The Options
Surcharge is assessed in addition to the
6 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).
7 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.
8 The term ‘‘Specialist’’ applies to transactions for
the account of a Specialist as defined in Exchange
Rule 1020(a).
9 The term ‘‘Broker-Dealer’’ applies to any
transaction that is not subject to any of the other
transaction fees applicable within a particular
category.
10 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.
11 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 and that
is not for the account of a broker or dealer or for
the account of a ‘‘Professional’’ as that term is
defined in Rule 1000(b)(14).
VerDate Sep<11>2014
16:43 Dec 31, 2015
Jkt 238001
Options Transactions Charges in Section
II of the Pricing Schedule. This rule
change applies to both electronic and
floor transactions.
The Exchange believes that these
surcharges will assist the Exchange in
remaining competitive in these options
by recouping certain fees.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act 12 in general, and furthers the
objectives of Sections 6(b)(4) and 6(b)(5)
of the Act 13 in particular, because 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 the Exchange operates or
controls, and is not designed to permit
unfair discrimination between
customers, issuers, brokers, or dealers.
The Commission and the courts have
repeatedly expressed their preference
for competition over regulatory
intervention in determining prices,
products, and services in the securities
markets. In Regulation NMS, for
example, the Commission indicated that
market forces should generally
determine the price of non-core market
data because national market system
regulation ‘‘has been remarkably
successful in promoting market
competition in its broader forms that are
most important to investors and listed
companies.’’ 14 Likewise, in
NetCoalition v. NYSE Arca, Inc.15
(‘‘NetCoalition’’) the D.C. Circuit upheld
the Commission’s use of a market-based
approach in evaluating the fairness of
market data fees against a challenge
claiming that Congress mandated a costbased approach.16 As the court
emphasized, the Commission ‘‘intended
in Regulation NMS that ‘market forces,
rather than regulatory requirements’
play a role in determining the market
data . . . to be made available to
investors and at what cost.’’ 17
Further, ‘‘[n]o one disputes that
competition for order flow is ‘fierce.’
. . . As the SEC explained, ‘[i]n the U.S.
national market system, buyers and
sellers of securities, and the brokerdealers that act as their order-routing
agents, have a wide range of choices of
where to route orders for execution’;
[and] ‘no exchange can afford to take its
12 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4) and (5).
14 Securities Exchange Act Release No. 51808 at
37499 [sic] (June 9, 2005) (‘‘Regulation NMS
Adopting Release’’).
15 NetCoalition v. NYSE Arca, Inc. 615 F.3d 525
(D.C. Cir. 2010).
16 See NetCoalition, at 534.
17 Id. at 537.
13 15
PO 00000
Frm 00057
Fmt 4703
Sfmt 4703
117
market share percentages for granted’
because ‘no exchange possesses a
monopoly, regulatory or otherwise, in
the execution of order flow from broker
dealers’. . . .’’ 18 Although the court
and the SEC were discussing the cash
equities markets, the Exchange believes
that these views apply with equal force
to the options markets.
The Exchange’s proposal to increase
the Options Surcharge for transactions
in MNX and NDX from $0.20 to $0.25
per contract for all non-Customer
market participants is reasonable
because all non-Customer market
participants will be assessed the same
increased Options Surcharge of $0.25
per contract. Customers will continue
not to be assessed an Options Surcharge.
Customer liquidity benefits the
Exchange in offering other market
participants an opportunity to interact
with this order flow on the Exchange.
Also, the Options Surcharge remains
competitive with fees at other options
exchanges.19
The Exchange’s proposal to increase
the Options Surcharge for transactions
in MNX and NDX from $0.20 to $0.25
per contract for all non-Customer
market participants is equitable and not
unfairly discriminatory because the
Exchange will continue to assess all
non-Customer market participants a
uniform Options Surcharge. Customers
are not assessed an Options Surcharge.
Customer order flow is unique 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. Finally, the Exchange
believes that it is equitable and not
unfairly discriminatory for nonCustomer market participants who trade
these products to pay the Options
Surcharge as the Exchange has entered
into a licensing agreement to obtain
intellectual property rights to list these
products and seeks to recoup a portion
of its costs.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
18 Id. at 539 (quoting ArcaBook Order, 73 FR at
74782–74783).
19 See NYSE MKT LLC’s (‘‘NYSE Amex’’) Fee
Schedule. NYSE Amex assesses a Royalty Fee of
$0.22 per contract for transactions in MNX and
NDX. See also NYSE Arca Inc.’s (‘‘NYSE Arca’’)
Fees and Charges. NYSE Arca, Inc. assesses a
Royalty Fee of $0.22 per contract for transactions
in MNX and NDX.
E:\FR\FM\04JAN1.SGM
04JAN1
118
Federal Register / Vol. 81, No. 1 / Monday, January 4, 2016 / Notices
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. In terms of
inter-market competition, the Exchange
notes that it operates in a highly
competitive market in which market
participants can readily favor competing
venues if they deem fee levels at a
particular venue to be excessive, or
rebate opportunities available at other
venues to be more favorable. In such an
environment, the Exchange must
continually adjust its fees to remain
competitive with other exchanges and
with alternative trading systems that
have been exempted from compliance
with the statutory standards applicable
to exchanges. Because competitors are
free to modify their own fees in
response, and because market
participants may readily adjust their
order routing practices, the Exchange
believes that the degree to which fee
changes in this market may impose any
burden on competition is extremely
limited.
The Exchange’s proposal to increase
the Options Surcharge for transactions
in MNX and NDX from $0.20 to $0.25
per contract for all non-Customer
market participants does not impose an
undue burden on intra-market
competition because all non-Customer
market participants will continue to be
assessed a uniform Options Surcharge
for transactions in MNX and NDX, in
addition to other transaction fees.
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.
tkelley on DSK3SPTVN1PROD 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.20
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
20 15
U.S.C. 78s(b)(3)(A)(ii).
VerDate Sep<11>2014
16:43 Dec 31, 2015
Jkt 238001
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.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.21
Jill M. Peterson,
Assistant Secretary.
IV. Solicitation of Comments
BILLING CODE 8011–01–P
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–2015–111 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–2015–111. 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–
2015–111 and should be submitted on
or before January 25, 2016.
PO 00000
Frm 00058
Fmt 4703
Sfmt 9990
[FR Doc. 2015–32990 Filed 12–31–15; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
[File No. 500–1]
In the Matter of Changda International
Holdings, Inc.: Order of Suspension of
Trading
December 29, 2015.
It appears to the Securities and
Exchange Commission (‘‘Commission’’)
that there is a lack of current and
accurate information concerning the
securities of Changda International
Holdings, Inc. (‘‘CIHD 1’’) (CIK No.
1417624), a revoked Nevada corporation
whose principal place of business is
listed as Weifang, Shandong, China
because it is delinquent in its periodic
filings with the Commission, having not
filed any periodic reports since it filed
a Form 10–Q for the period ended June
30, 2012. On April 28, 2015, the
Commission’s Division of Corporation
Finance sent a delinquency letter to
CIHD at the address shown in its thenmost recent filing in the Commission’s
EDGAR system requesting compliance
with its periodic filing requirements, .
To date, CIHD has failed to cure its
delinquencies. As of December 15, 2015,
the common stock of CIHD was quoted
on OTC Link operated by OTC Markets
Group, Inc. (formerly ‘‘Pink Sheets’’)
had seven market makers and was
eligible for the ‘‘piggyback’’ exception of
Exchange Act Rule 15c2–11(f)(3).
The Commission is of the opinion that
the public interest and the protection of
investors require a suspension of trading
in the securities of the above-listed
company. Therefore, it is ordered,
pursuant to Section 12(k) of the
Securities Exchange Act of 1934, that
trading in the securities of the abovelisted company is suspended for the
period from 9:30 a.m. EST on December
29, 2015, through 11:59 p.m. EST on
January 12, 2016.
By the Commission.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2015–33029 Filed 12–31–15; 8:45 am]
BILLING CODE 8011–01–P
21 17
CFR 200.30–3(a)(12).
short form of the issuer’s name is also its
ticker symbol.
1 The
E:\FR\FM\04JAN1.SGM
04JAN1
]]>Agencies
[Federal Register Volume 81, Number 1 (Monday, January 4, 2016)]
[Notices]
[Pages 116-118]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-32990]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-76780; File No. SR-Phlx-2015-111]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend the
NASDAQ OMX PHLX Fee Schedule To Increase the Options Surcharge Fee for
MNX and NDX
December 28, 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 December 18, 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 amend the Exchange's Pricing Schedule at
Section II, entitled ``Multiply Listed Options Fees (Includes options
overlying equities, ETFs, ETNs and indexes which are Multiply
Listed).'' \3\ The Exchange purposes to increase the Options Surcharge
in MNX \4\ and NDX.\5\
---------------------------------------------------------------------------
\3\ The following symbols are assessed the fees in Section III
for Singly Listed Options: SOX, HGX and OSX, and not Section II.
\4\ MNX represents options on the one-tenth value of the Nasdaq
100 Index traded under the symbol MNX (``MNX'').
\5\ NDX represents options on the Nasdaq 100 Index traded under
the symbol NDX (``NDX'').
---------------------------------------------------------------------------
While the changes proposed herein are effective upon filing, the
Exchange
[[Page 117]]
has designated the amendments to become operative on January 4, 2016.
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 Exchange proposes to increase the Options Surcharge for
transactions in MNX and NDX from $0.20 to $0.25 per contract for all
non-Customers (Professionals,\6\ Market Makers,\7\ Specialists,\8\
Broker-Dealers \9\ and Firms \10\) in Section II of the Pricing
Schedule. Customers \11\ will continue not to be assessed an Options
Surcharge in MNX and NDX. The Options Surcharge is assessed in addition
to the Options Transactions Charges in Section II of the Pricing
Schedule. This rule change applies to both electronic and floor
transactions.
---------------------------------------------------------------------------
\6\ 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).
\7\ 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.
\8\ The term ``Specialist'' applies to transactions for the
account of a Specialist as defined in Exchange Rule 1020(a).
\9\ The term ``Broker-Dealer'' applies to any transaction that
is not subject to any of the other transaction fees applicable
within a particular category.
\10\ 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.
\11\ 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 and that is not
for the account of a broker or dealer or for the account of a
``Professional'' as that term is defined in Rule 1000(b)(14).
---------------------------------------------------------------------------
The Exchange believes that these surcharges will assist the
Exchange in remaining competitive in these options by recouping certain
fees.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \12\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act \13\ in particular, because 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 the Exchange operates or controls, and is not
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
The Commission and the courts have repeatedly expressed their
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. In Regulation
NMS, for example, the Commission indicated that market forces should
generally determine the price of non-core market data because national
market system regulation ``has been remarkably successful in promoting
market competition in its broader forms that are most important to
investors and listed companies.'' \14\ Likewise, in NetCoalition v.
NYSE Arca, Inc.\15\ (``NetCoalition'') the D.C. Circuit upheld the
Commission's use of a market-based approach in evaluating the fairness
of market data fees against a challenge claiming that Congress mandated
a cost-based approach.\16\ As the court emphasized, the Commission
``intended in Regulation NMS that `market forces, rather than
regulatory requirements' play a role in determining the market data . .
. to be made available to investors and at what cost.'' \17\
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\14\ Securities Exchange Act Release No. 51808 at 37499 [sic]
(June 9, 2005) (``Regulation NMS Adopting Release'').
\15\ NetCoalition v. NYSE Arca, Inc. 615 F.3d 525 (D.C. Cir.
2010).
\16\ See NetCoalition, at 534.
\17\ Id. at 537.
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Further, ``[n]o one disputes that competition for order flow is
`fierce.' . . . As the SEC explained, `[i]n the U.S. national market
system, buyers and sellers of securities, and the broker-dealers that
act as their order-routing agents, have a wide range of choices of
where to route orders for execution'; [and] `no exchange can afford to
take its market share percentages for granted' because `no exchange
possesses a monopoly, regulatory or otherwise, in the execution of
order flow from broker dealers'. . . .'' \18\ Although the court and
the SEC were discussing the cash equities markets, the Exchange
believes that these views apply with equal force to the options
markets.
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\18\ Id. at 539 (quoting ArcaBook Order, 73 FR at 74782-74783).
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The Exchange's proposal to increase the Options Surcharge for
transactions in MNX and NDX from $0.20 to $0.25 per contract for all
non-Customer market participants is reasonable because all non-Customer
market participants will be assessed the same increased Options
Surcharge of $0.25 per contract. Customers will continue not to be
assessed an Options Surcharge. Customer liquidity benefits the Exchange
in offering other market participants an opportunity to interact with
this order flow on the Exchange. Also, the Options Surcharge remains
competitive with fees at other options exchanges.\19\
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\19\ See NYSE MKT LLC's (``NYSE Amex'') Fee Schedule. NYSE Amex
assesses a Royalty Fee of $0.22 per contract for transactions in MNX
and NDX. See also NYSE Arca Inc.'s (``NYSE Arca'') Fees and Charges.
NYSE Arca, Inc. assesses a Royalty Fee of $0.22 per contract for
transactions in MNX and NDX.
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The Exchange's proposal to increase the Options Surcharge for
transactions in MNX and NDX from $0.20 to $0.25 per contract for all
non-Customer market participants is equitable and not unfairly
discriminatory because the Exchange will continue to assess all non-
Customer market participants a uniform Options Surcharge. Customers are
not assessed an Options Surcharge. Customer order flow is unique
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.
Finally, the Exchange believes that it is equitable and not unfairly
discriminatory for non-Customer market participants who trade these
products to pay the Options Surcharge as the Exchange has entered into
a licensing agreement to obtain intellectual property rights to list
these products and seeks to recoup a portion of its costs.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose
[[Page 118]]
any burden on competition not necessary or appropriate in furtherance
of the purposes of the Act. In terms of inter-market competition, the
Exchange notes that it operates in a highly competitive market in which
market participants can readily favor competing venues if they deem fee
levels at a particular venue to be excessive, or rebate opportunities
available at other venues to be more favorable. In such an environment,
the Exchange must continually adjust its fees to remain competitive
with other exchanges and with alternative trading systems that have
been exempted from compliance with the statutory standards applicable
to exchanges. Because competitors are free to modify their own fees in
response, and because market participants may readily adjust their
order routing practices, the Exchange believes that the degree to which
fee changes in this market may impose any burden on competition is
extremely limited.
The Exchange's proposal to increase the Options Surcharge for
transactions in MNX and NDX from $0.20 to $0.25 per contract for all
non-Customer market participants does not impose an undue burden on
intra-market competition because all non-Customer market participants
will continue to be assessed a uniform Options Surcharge for
transactions in MNX and NDX, in addition to other transaction fees.
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.
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.\20\
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\20\ 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-2015-111 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-2015-111. 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-2015-111 and should be
submitted on or before January 25, 2016.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
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\21\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2015-32990 Filed 12-31-15; 8:45 am]
BILLING CODE 8011-01-P
