Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Phlx Pricing Schedule at Options 7, Section 8, Membership Fees and Options 7, Section 9, Other Member Fees, 36438-36442 [2020-12904]
Download as PDF
<![CDATA[
36438
Federal Register / Vol. 85, No. 116 / Tuesday, June 16, 2020 / Notices
media to provide notice to the public in
the area surrounding a licensee’s facility
of the licensee’s application and of the
Commission’s proposed determination
of NSHC. The Commission has provided
a reasonable opportunity for the public
to comment, using its best efforts to
make available to the public means of
communication for the public to
respond quickly, and in the case of
telephone comments, the comments
have been recorded or transcribed as
appropriate and the licensee has been
informed of the public comments.
In circumstances where failure to act
in a timely way would have resulted, for
example, in derating or shutdown of a
nuclear power plant or in prevention of
either resumption of operation or of
increase in power output up to the
plant’s licensed power level, the
Commission may not have had an
opportunity to provide for public
comment on its NSHC determination. In
such case, the license amendment has
been issued without opportunity for
comment. If there has been some time
for public comment but less than 30
days, the Commission may provide an
opportunity for public comment. If
comments have been requested, it is so
stated. In either event, the State has
been consulted by telephone whenever
possible.
Under its regulations, the Commission
may issue and make an amendment
immediately effective, notwithstanding
the pendency before it of a request for
a hearing from any person, in advance
of the holding and completion of any
required hearing, where it has
determined that NSHC is involved.
The Commission has applied the
standards of 10 CFR 50.92 and has made
a final determination that the
amendment involves NSHC. The basis
for this determination is contained in
the documents related to this action.
Accordingly, the amendments have
been issued and made effective as
indicated.
Unless otherwise indicated, the
Commission has determined that these
amendments satisfy the criteria for
categorical exclusion in accordance
with 10 CFR 51.22. Therefore, pursuant
to 10 CFR 51.22(b), no environmental
impact statement or environmental
assessment need be prepared for these
amendments. If the Commission has
prepared an environmental assessment
under the special circumstances
provision in 10 CFR 51.12(b) and has
made a determination based on that
assessment, it is so indicated.
For further details with respect to the
action see (1) the application for
amendment, (2) the amendment to
Facility Operating License or Combined
License, as applicable, and (3) the
Commission’s related letter, Safety
Evaluation and/or Environmental
Assessment, as indicated. All of these
items can be accessed as described in
the ‘‘Obtaining Information and
Submitting Comments’’ section of this
document.
STP Nuclear Operating Company; South Texas Project, Unit 1; Matagorda County, TX
Date of Amendment .......................................................
Brief Description of Amendment ....................................
ADAMS Accession No ...................................................
Amendment Nos .............................................................
Public Comments Requested as to Proposed NSHC
(Yes/No).
Docket Nos .....................................................................
Dated: June 3, 2020.
For the Nuclear Regulatory Commission.
Mohamed K. Shams,
Deputy Director, Division of Operating
Reactor Licensing, Office of Nuclear Reactor
Regulation.
[FR Doc. 2020–12410 Filed 6–15–20; 8:45 am]
Madeline Gonzalez, 202–606–2858, or
email pay-leave-policy@opm.gov.
Office of Personnel Management.
Alexys Stanley,
Regulatory Affairs Analyst.
SECURITIES AND EXCHANGE
COMMISSION
Federal Prevailing Rate Advisory
Committee; Cancellation of Upcoming
Meeting
Office of Personnel
Management.
ACTION: Notice.
AGENCY:
The Federal Prevailing Rate
Advisory Committee is issuing this
notice to cancel the June 18, 2020,
public meeting scheduled to be held in
Room 5A06A, Office of Personnel
Management Building, 1900 E Street
NW, Washington, DC. The original
Federal Register notice announcing this
meeting was published Monday,
December 23, 2019.
SUMMARY:
lotter on DSK30NT082PROD with NOTICES
FOR FURTHER INFORMATION CONTACT:
BILLING CODE 6325–49–P
OFFICE OF PERSONNEL
MANAGEMENT
18:13 Jun 15, 2020
50–498.
[FR Doc. 2020–12665 Filed 6–15–20; 8:45 am]
BILLING CODE 7590–01–P
VerDate Sep<11>2014
May 28, 2020.
The amendment modified Technical Specification 3/4.5.1, ‘‘Accumulators,’’ to allow Unit 1 to operate with all
three safety injection accumulators at reduced minimum pressure for the remainder of the current Unit 1
operating cycle, Cycle 23.
ML20141L612.
219.
Yes.
Jkt 250001
[Release No. 34–89041; File No. SR–Phlx–
2020–28]
Self-Regulatory Organizations; Nasdaq
PHLX LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend Phlx Pricing
Schedule at Options 7, Section 8,
Membership Fees and Options 7,
Section 9, Other Member Fees
June 10, 2020.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
1 15
2 17
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00066
Fmt 4703
Sfmt 4703
notice is hereby given that on May 28,
2020, Nasdaq PHLX LLC (‘‘Phlx’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘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
Phlx’s Pricing Schedule at Options 7,
Section 8, ‘‘Membership Fees’’ and
Options 7, Section 9, ‘‘Other Member
Fees.’’
While the changes proposed herein
are effective upon filing, the Exchange
has designated the amendments become
operative on June 1, 2020.
The text of the proposed rule change
is available on the Exchange’s website at
https://nasdaqphlx.cchwallstreet.com/,
at the principal office of the Exchange,
and at the Commission’s Public
Reference Room.
E:\FR\FM\16JNN1.SGM
16JNN1
36439
Federal Register / Vol. 85, No. 116 / Tuesday, June 16, 2020 / Notices
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
Phlx proposes to amend its pricing
within Options 7, Section 8,
‘‘Membership Fees’’ and Options 7,
Section 9, ‘‘Other Member Fees.’’ Each
change will be described below.
Credit
Phlx proposes to amend Options 7,
Section 8, ‘‘Membership Fees,’’ at Part
A, ‘‘Permit and Registration Fees,’’ to
offer a credit of $3,400, for the month
of June 2020, to any member or member
organization on the Trading Floor if that
member or member organization was
eligible for the $2,300 reduced Permit
Fee as a result of having executed at
least 100 options in a Phlx house
account for the months of February and
March 2020, and paid the $4,000 Permit
Fee in April and May 2020. Open outcry
on the Exchange’s Trading Floor was
closed on March 17, 2020 3 and will not
re-open until June 1, 2020.4 The
Exchange proposes to issue the $3,400
credit to those members or member
organizations on the Trading Floor who
demonstrated they did execute at least
100 options in a Phlx house account, for
the months of February and March
2020, in order to qualify for the reduced
Permit Fee of $2,300. The Exchange
believes that these members and
member organizations may have also
qualified for the credit in April or May
2020, if open outcry trading was
available.
The Exchange proposes to credit those
qualifying members and member
organizations the difference ($1,700 a
month) as between the $4,000 a month
Permit Fee and the reduced Permit Fee
of $2,300 a month, for the months of
April and May 2020 when open outcry
was not available, provided the member
or member organization is able to
demonstrate that they qualified for the
credit in February and March 2020.
This credit would not be offered to
Floor Brokers,5 Floor Lead Market
Makers, or Floor Market Makers,6 who
are not eligible today for a reduced
Permit Fee. Also, the credit would not
be offered to member organizations who
transact an electronic options business,
as those member organizations remain
able to transact at least 100 options in
a Phlx house account.7
Waivers
Today, the Exchange waives certain
fees related to the Phlx Trading Floor
within Options 7, Section 8.
Specifically, for the months of April and
May 2020, the Exchange waived the
Floor Broker Permit Fee of $4,000 per
month to Floor Brokers.8 The Exchange
also waived the Clerk Fee 9 of $100 per
month. Finally, the Exchange waived
the Streaming Quote Trader (‘‘SQT’’) 10
Fees within Options 8, Section 8B. The
SQT Fees are tiered fees.11 Phlx’s 7 tier
SQT Fees 12 are as follows:
Number of option class assignments
Tier
Tier
Tier
Tier
Tier
Tier
Tier
1:
2:
3:
4:
5:
6:
7:
Up to 200 classes ......................................................................................................................................
Up to 400 classes ......................................................................................................................................
Up to 600 classes ......................................................................................................................................
Up to 800 classes ......................................................................................................................................
Up to 1000 classes ....................................................................................................................................
Up to 1200 classes ....................................................................................................................................
All equity issues .........................................................................................................................................
The Exchange waived the Floor
Broker Permit Fee, the Clerk Fee and the
SQT Fees, during the months of April
and May 2020, to account for the
closure of open outcry trading. As noted
herein, the Trading Floor will remain
closed until June 1, 2020.13 The
Exchange proposes to continue to waive
these fees for the month of June 2020 to
account for the fact that the Trading
Floor has been closed since March 17,
3 See
Options Trader Alert #2020–07.
Options Trader Alert #2020–08.
5 See Options 7, Section 8A. Phlx assesses a Floor
Broker Permit Fee of $4,000 per month.
Additionally, the Exchange proposes to waive the
Floor Broker Permit Fee for the month of June 2020
as described below.
6 See Options 7, Section 8A. Phlx assesses a Floor
Lead Market Maker and Floor Market Maker Permit
Fee of $6,000 per month.
7 Remote Lead Market Makers and Remote Market
Makers access the market electronically and are
therefore excluded.
8 See Phlx Rules at Options 7, Section 8A.
9 The Clerk Fee is imposed on any registered onfloor person employed by or associated with a
4 See
lotter on DSK30NT082PROD with NOTICES
SQT Fees
VerDate Sep<11>2014
18:13 Jun 15, 2020
Jkt 250001
2020.14 Also, the Exchange proposes to
remove obsolete language, which was
relevant in April and May 2020
regarding a credit, which is no longer
being offered.
Options 7, Section 9
Today, the Exchange waives certain
fees related to the Phlx Trading Floor
within Options 7, Section 9.
Specifically, the Exchange waived the
member or member organization pursuant to
Options 3, Section 19, including Inactive Nominees
pursuant to Options 8, Section 7. The Clerk Fee is
not imposed on permit holders. See Phlx Rules at
Options 7, Section 8A.
10 The term ‘‘Streaming Quote Trader’’ is defined
in Options 1, Section 1(b)(54) as a Market Maker
who has received permission from the Exchange to
generate and submit option quotations
electronically in options to which such SQT is
assigned. See Options 7, Section 1. Further, Options
1, Section 1(b)(54) provides that an SQT means a
Market Maker who has received permission from
the Exchange to generate and submit option
quotations electronically in options to which such
SQT is assigned. An SQT may only submit such
PO 00000
Frm 00067
Fmt 4703
Sfmt 4703
$0.00 per calendar month.
2,200 per calendar month.
3,200.00 per calendar month.
4,200.00 per calendar month.
5,200.00 per calendar month.
6,200.00 per calendar month.
7,200 per calendar month.
Floor Facility Fee of $330 per month,
which is applicable Clerks (excluding
Inactive Nominees pursuant to Options
8, Section 7), Floor Brokers, Market
Makers (including SQTs) and individual
Lead Market Makers), for the months of
April and May 2020. The Exchange
proposes to continue to waive the Floor
Facility Fee for the month of June 2020
to account for the fact that the Trading
quotations while such SQT is physically present on
the trading floor of the Exchange. An SQT may only
submit quotes in classes of options in which the
SQT is assigned.
11 The Exchange notes, with respect to SQTs, that
these participants may only submit quotations
while physically present on the Trading Floor.
12 In calculating the number of option class
assignments for SQT Fees, equity options including
ETFs and ETNs are counted. Currencies and
indexes are not counted in the number of option
class assignments.
13 See note 4 above.
14 See note 3 above.
E:\FR\FM\16JNN1.SGM
16JNN1
36440
Federal Register / Vol. 85, No. 116 / Tuesday, June 16, 2020 / Notices
Floor has been closed since March 17,
2020.15
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,16 in general, and furthers the
objectives of Sections 6(b)(4) and 6(b)(5)
of the Act,17 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, 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, while
adopting a series of steps to improve the
current market model, the Commission
highlighted the importance of market
forces in determining prices and SRO
revenues and, also, recognized that
current regulation of the market system
‘‘has been remarkably successful in
promoting market competition in its
broader forms that are most important to
investors and listed companies.’’ 18
Likewise, in NetCoalition v. Securities
and Exchange Commission 19
(‘‘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.20 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.’’ 21
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
market share percentages for granted’
because ‘no exchange possesses a
monopoly, regulatory or otherwise, in
the execution of order flow from broker
15 Id.
lotter on DSK30NT082PROD with NOTICES
16 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4) and (5).
18 Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005)
(‘‘Regulation NMS Adopting Release’’).
19 NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir.
2010).
20 See NetCoalition, at 534–535.
21 Id. at 537.
17 15
VerDate Sep<11>2014
18:13 Jun 15, 2020
Jkt 250001
dealers’ . . . .’’ 22 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.
Options 7, Section 8
Phlx’s proposal to amend Options 7,
Section 8, ‘‘Membership Fees,’’ at Part
A, ‘‘Permit and Registration Fees,’’ to
offer a credit of $3,400, for the month
of June 2020, to any member or member
organization on the Trading Floor, if
that member or member organization
was eligible for the $2,300 reduced
Permit Fee as a result of having
executed at least 100 options in a Phlx
house account for the months of
February and March 2020, is reasonable.
Open outcry trading was closed on
March 17, 2020,23 and will not re-open
until June 1, 2020.24 The Exchange
proposes to issue the $3,400 credit to
those members or member organizations
on the Trading Floor who demonstrated
they executed at least 100 options in a
Phlx house account for the months of
February and March 2020, and paid the
$4,000 Permit Fee in April and May
2020, in order to qualify for the reduced
Permit Fee of $2,300. The Exchange
believes that these members and
member organizations may have also
qualified for the credit in April or May
2020, if open outcry trading were
available. The Exchange proposes to
credit those qualifying member and
member organizations on the Trading
Floor the difference ($1,700 per month)
as between the $4,000 a month Permit
Fee and the reduced Permit Fee of
$2,300 a month for the two full months
(April and May 2020) when open outcry
trading was closed. The Exchange
believes it is reasonable to pay the
difference based on whether the
member or member organization
qualified in both the two full prior
months, when open outcry trading was
unavailable. This credit would not
apply to Floor Brokers,25 Floor Lead
Market Makers, or Floor Market Makers,
as these members do not have the ability
to qualify for a reduced Permit Fee
today. The credit would also not apply
to members accessing Phlx
electronically.26
22 Id. at 539 (quoting Securities Exchange Act
Release No. 59039 (December 2, 2008), 73 FR
74770, 74782–83 (December 9, 2008) (SR–
NYSEArca–2006–21)).
23 See note 3 above.
24 See note 4 above.
25 The Floor Broker Permit Fee was waived in
April and May 2020. The Exchange proposes herein
to also waive that fee for June 2020.
26 Remote Lead Market Makers and Remote
Market Makers access the market electronically and
are therefore excluded.
PO 00000
Frm 00068
Fmt 4703
Sfmt 4703
Phlx’s proposal to amend Options 7,
Section 8, ‘‘Membership Fees,’’ at Part
A, ‘‘Permit and Registration Fees,’’ to
offer a credit of $3,400, for the month
of June 2020, to any member or member
organization on the Trading Floor, if
that member or member organization
was eligible for the $2,300 reduced
Permit Fee as a result of having
executed at least 100 options in a Phlx
house account for the months of
February and March 2020 and paid the
$4,000 Permit Fee in April and May
2020, is equitable and not unreasonably
discriminatory. The Exchange proposes
to uniformly offer all Trading Floor
members and member organizations
who currently pay the $4,000 Permit
Fee, a credit of $3,400, provided they
executed at least 100 options in a Phlx
house account for the months of
February and March 2020, and paid the
$4,000 Permit Fee in April and May
2020. The Exchange notes that it is
equitable and not unfairly
discriminatory to not offer the credit to
Floor Brokers, Floor Lead Market
Makers, or Floor Market Makers as these
members do not have the ability to
qualify for a reduced Permit Fee
today.27 Also, it is equitable and not
unfairly discriminatory to not offer the
credit to member organizations who
transact an electronic options business,
as those member organizations remain
able to transact at least 100 options in
a Phlx house account.28
Fee Waivers
The Exchange’s proposal to waive the
Floor Broker Permit Fee, the Clerk Fee,
SQT Fee and the Floor Facility Fee,
during the month of June 2020, is
reasonable as open outcry on the Phlx
Trading Floor has not been available
since March 17, 2020.29 The Exchange’s
proposal to waive these fees, which
apply to transacting an options business
on the Trading Floor, is intended to
alleviate costs for member organizations
in consideration of their inability to
transact options in open outcry on the
Phlx Trading Floor since March 17,
2020.
The Exchange’s proposal to waive the
Floor Broker Permit Fee, the Clerk Fee,
SQT Fee and the Floor Facility Fee,
during the month of June 2020, is
equitable and not unfairly
discriminatory as the Exchange will
apply these proposed waivers uniformly
to all member organizations on the
Trading Floor. Phlx continues to permit
27 The Floor Broker Permit Fee is proposed to be
waived for the month of June 2020.
28 Remote Lead Market Makers and Remote
Market Makers access the market electronically and
are therefore excluded.
29 See note 3 above.
E:\FR\FM\16JNN1.SGM
16JNN1
Federal Register / Vol. 85, No. 116 / Tuesday, June 16, 2020 / Notices
electronic trading and, therefore, fees
associated with electronic trading have
not been waived.
Obsolete Text
The Exchange’s proposal to remove
obsolete language from Options 7,
Section 8, related to an obsolete credit
is reasonable, equitable and not unfairly
discriminatory as the credit is no longer
applicable. No member or member
organization may obtain the credit.
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.
lotter on DSK30NT082PROD with NOTICES
Inter-Market Competition
The proposal does not impose an
undue burden on inter-market
competition. The Exchange believes its
proposal remains competitive with
other options markets and will offer
market participants with another choice
of where to transact options. 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 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.
Intra-Market Competition
Phlx’s proposal to amend Options 7,
Section 8, ‘‘Membership Fees,’’ at Part
A, ‘‘Permit and Registration Fees,’’ to
offer a credit of $3,400, for the month
of June 2020, to any member or member
organization on the Trading Floor, if
that member or member organization
was eligible for the $2,300 reduced
Permit Fee as a result of having
executed at least 100 options in a Phlx
house account for the months of
February and March 2020, and paid the
$4,000 Permit Fee in April and May
2020, does not impose an undue burden
on competition. The Exchange would
uniformly offer all Trading Floor
members and member organizations
VerDate Sep<11>2014
18:13 Jun 15, 2020
Jkt 250001
who currently pay the $4,000 Permit
Fee, a credit of $3,400, provided they
executed at least 100 options in a Phlx
house account for the months of
February and March 2020, and paid the
$4,000 Permit Fee in April and May
2020. The Exchange notes that it does
not impose an undue burden on
competition to not offer the credit to
Floor Brokers, Floor Lead Market
Makers, or Floor Market Makers as these
members do not have the ability to
qualify for a reduced Permit Fee
today.30 Also, it does not impose an
undue burden on competition to not
offer the credit to member organizations
who transact an electronic options
business, as those member organizations
remain able to transact at least 100
options in a Phlx house account.31
The Exchange’s proposal to waive the
Floor Broker Permit Fee, the Clerk Fee,
SQT Fee and the Floor Facility Fee
during the month of June 2020 does not
impose an undue burden on
competition as the Exchange will apply
these proposed waivers uniformly to all
member organizations on the Trading
Floor. Phlx continues to permit
electronic trading and therefore fees
associated with electronic trading have
not been waived.
The Exchange’s proposal to remove
obsolete language from Options 7,
Section 8, related to an obsolete credit,
does not impose an undue burden on
competition as the credit is no longer
applicable. No member or member
organization may obtain the credit.
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.32
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
30 The Floor Broker Permit Fee is proposed to be
waived for the month of June 2020.
31 Remote Lead Market Makers and Remote
Market Makers access the market electronically and
are therefore excluded.
32 15 U.S.C. 78s(b)(3)(A)(ii).
PO 00000
Frm 00069
Fmt 4703
Sfmt 4703
36441
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–2020–28 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–2020–28. 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 website (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 website 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.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–Phlx–2020–28 and should
be submitted on or before July 7, 2020.
E:\FR\FM\16JNN1.SGM
16JNN1
36442
Federal Register / Vol. 85, No. 116 / Tuesday, June 16, 2020 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.33
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–12904 Filed 6–15–20; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–89037; File No. SR–OCC–
2020–006]
Self-Regulatory Organizations; The
Options Clearing Corporation; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change To Make
Administrative Updates to The Options
Clearing Corporation’s Risk
Management Policies
June 10, 2020.
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 May 27,
2020, the Options Clearing Corporation
(‘‘OCC’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
the proposed rule change as described
in Items I, II, and III below, which Items
have been prepared by OCC. OCC filed
the proposed rule change pursuant to
Section 19(b)(3)(A)(iii) 3 of the Act and
Rule 19b–4(f)(6) 4 thereunder so that the
proposal was effective upon filing with
the Commission. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
lotter on DSK30NT082PROD with NOTICES
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
The proposed rule change by OCC
would make conforming edits to the
following policies: OCC’s Risk
Management Framework Policy, OCC’s
Default Management Policy and OCC’s
Clearing Fund Methodology Policy. In
each case, the conforming edits would
ensure that descriptions of OCC’s
process for replenishing operating
capital and OCC’s waterfall of default
resources are aligned with changes that
took effect with the approval of OCC’s
Capital Management Policy.5 Further
conforming edits to the Risk
Management Framework Policy would
establish that the Capital Management
Policy must detail the principles used to
33 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
5 Exchange Act Release No. 88029 (Jan. 24, 2020),
85 FR 5500 (Jan. 30, 2020) (SR–OCC–2019–007).
1 15
VerDate Sep<11>2014
18:13 Jun 15, 2020
Jkt 250001
determine, monitor, and measure OCC’s
capital levels such that OCC maintains
liquid net assets funded by equity
(‘‘LNAFBE’’) consistent with the
requirements of Rule 17Ad–22(e)(15),6
aligned with the current Capital
Management Policy.7 The proposed rule
change would also add one footnote to
the Clearing Fund Methodology Policy,
which would simply clarify that the
Capital Management Policy’s changes to
OCC’s waterfall of default resources
would not change OCC’s definition of
‘‘pre-funded financial resources,’’ as
used for purposes of the calculating
OCC’s Clearing Fund.
The Risk Management Framework
Policy, Default Management Policy and
Clearing Fund Methodology Policy are
included as confidential Exhibits 5A, 5B
and 5C, respectively. Material proposed
to be added is marked by underlining
and material proposed to be deleted is
marked by strikethrough text. The
proposed rule change is available on
OCC’s website at https://
www.theocc.com/about/publications/
bylaws.jsp. All terms with initial
capitalization that are not otherwise
defined herein have the same meaning
as set forth in the OCC By-Laws and
Rules.8
II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
In its filing with the Commission,
OCC 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. OCC has prepared
summaries, set forth in sections (A), (B),
and (C) below, of the most significant
aspects of these statements.
(A) Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
(1) Purpose
Background
On February 13, 2019, the
Commission disapproved OCC’s Capital
Plan.9 The Capital Plan had provided
for OCC’s operating capital structure
and had included a contingency for
replenishing OCC’s operating capital, if
necessary, by raising additional capital
from the options exchanges that have
6 17
CFR 240.17Ad–22(e)(15).
supra note 5.
8 OCC’s By-Laws and Rules can be found on
OCC’s public website: https://optionsclearing.com/
about/publications/bylaws.jsp.
9 Exchange Act Release No. 85121 (Feb. 13, 2019),
84 FR 5157 (Feb. 20, 2019) (SR–OCC–2015–02).
7 See
PO 00000
Frm 00070
Fmt 4703
Sfmt 4703
equity ownership interests in OCC.10 As
a result of the disapproval of the Capital
Plan, OCC subsequently proposed its
‘‘Capital Management Policy,’’ which
proposed a new operating capital
structure, a new process for
replenishing OCC’s operating capital
and certain changes to OCC’s ‘‘default
waterfall’’ (i.e., the resources available
to OCC in the event of a Clearing
Member’s suspension).11 On January 24,
2020, the Commission approved OCC’s
Capital Management Policy.12
OCC’s Risk Management Framework
Policy, Default Management Policy and
Clearing Fund Methodology Policy each
include discrete references to aspects of
the disapproved Capital Plan or to
OCC’s default waterfall prior to the
changes implemented by the Capital
Management Policy. Specifically, OCC’s
Risk Management Framework Policy
contains a paragraph summarizing the
disapproved Capital Plan and its
appendix includes two references to the
disapproved Capital Plan. OCC’s Default
Management Policy includes a summary
of the default waterfall predating the
approval of the Capital Management
Policy and a list of OCC’s ‘‘Recovery
Tools’’ for default scenarios, which
includes Replenishment Capital. OCC’s
Clearing Fund Methodology Policy
contains two paragraphs that summarize
OCC’s default waterfall as it existed
prior to the approval of the Capital
Management Policy. Each of these nowoutdated references needs to be revised
to conform to the changes implemented
by the Capital Management Policy.
Proposed Changes
Proposed Changes to the Risk
Management Framework Policy
OCC’s Risk Management Framework
Policy includes a paragraph
summarizing the disapproved Capital
Plan and its appendix includes two
references to the disapproved Capital
Plan. Accordingly, the disapproval of
the Capital Plan and adoption of the
Capital Management Policy requires that
conforming changes be made to OCC’s
Risk Management Framework Policy.
The proposed rule change would
effectively replace in its entirety a short
paragraph that summarizes the
disapproved Capital Plan with a short
paragraph summarizing the Capital
Management Policy. Specifically, the
10 Exchange Act Release No. 74452 (Mar. 6, 2015),
80 FR 13058 (Mar. 12, 2015) (SR–OCC–2015–02).
The contingency in the Capital Plan for
replenishing OCC’s operating capital was referred to
as ‘‘Replenishment Capital.’’
11 Exchange Act Release No. 86725 (Aug. 21,
2019), 84 FR 44944 (Aug. 27, 2019) (SR–OCC–2019–
007).
12 See supra note 5.
E:\FR\FM\16JNN1.SGM
16JNN1
]]>Agencies
[Federal Register Volume 85, Number 116 (Tuesday, June 16, 2020)]
[Notices]
[Pages 36438-36442]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-12904]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-89041; File No. SR-Phlx-2020-28]
Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Phlx
Pricing Schedule at Options 7, Section 8, Membership Fees and Options
7, Section 9, Other Member Fees
June 10, 2020.
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 May 28, 2020, Nasdaq PHLX LLC (``Phlx'' or ``Exchange'') filed with
the Securities and Exchange Commission (``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 Phlx's Pricing Schedule at Options
7, Section 8, ``Membership Fees'' and Options 7, Section 9, ``Other
Member Fees.''
While the changes proposed herein are effective upon filing, the
Exchange has designated the amendments become operative on June 1,
2020.
The text of the proposed rule change is available on the Exchange's
website at https://nasdaqphlx.cchwallstreet.com/, at the principal
office of the Exchange, and at the Commission's Public Reference Room.
[[Page 36439]]
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
Phlx proposes to amend its pricing within Options 7, Section 8,
``Membership Fees'' and Options 7, Section 9, ``Other Member Fees.''
Each change will be described below.
Credit
Phlx proposes to amend Options 7, Section 8, ``Membership Fees,''
at Part A, ``Permit and Registration Fees,'' to offer a credit of
$3,400, for the month of June 2020, to any member or member
organization on the Trading Floor if that member or member organization
was eligible for the $2,300 reduced Permit Fee as a result of having
executed at least 100 options in a Phlx house account for the months of
February and March 2020, and paid the $4,000 Permit Fee in April and
May 2020. Open outcry on the Exchange's Trading Floor was closed on
March 17, 2020 \3\ and will not re-open until June 1, 2020.\4\ The
Exchange proposes to issue the $3,400 credit to those members or member
organizations on the Trading Floor who demonstrated they did execute at
least 100 options in a Phlx house account, for the months of February
and March 2020, in order to qualify for the reduced Permit Fee of
$2,300. The Exchange believes that these members and member
organizations may have also qualified for the credit in April or May
2020, if open outcry trading was available.
---------------------------------------------------------------------------
\3\ See Options Trader Alert #2020-07.
\4\ See Options Trader Alert #2020-08.
---------------------------------------------------------------------------
The Exchange proposes to credit those qualifying members and member
organizations the difference ($1,700 a month) as between the $4,000 a
month Permit Fee and the reduced Permit Fee of $2,300 a month, for the
months of April and May 2020 when open outcry was not available,
provided the member or member organization is able to demonstrate that
they qualified for the credit in February and March 2020.
This credit would not be offered to Floor Brokers,\5\ Floor Lead
Market Makers, or Floor Market Makers,\6\ who are not eligible today
for a reduced Permit Fee. Also, the credit would not be offered to
member organizations who transact an electronic options business, as
those member organizations remain able to transact at least 100 options
in a Phlx house account.\7\
---------------------------------------------------------------------------
\5\ See Options 7, Section 8A. Phlx assesses a Floor Broker
Permit Fee of $4,000 per month. Additionally, the Exchange proposes
to waive the Floor Broker Permit Fee for the month of June 2020 as
described below.
\6\ See Options 7, Section 8A. Phlx assesses a Floor Lead Market
Maker and Floor Market Maker Permit Fee of $6,000 per month.
\7\ Remote Lead Market Makers and Remote Market Makers access
the market electronically and are therefore excluded.
---------------------------------------------------------------------------
Waivers
Today, the Exchange waives certain fees related to the Phlx Trading
Floor within Options 7, Section 8. Specifically, for the months of
April and May 2020, the Exchange waived the Floor Broker Permit Fee of
$4,000 per month to Floor Brokers.\8\ The Exchange also waived the
Clerk Fee \9\ of $100 per month. Finally, the Exchange waived the
Streaming Quote Trader (``SQT'') \10\ Fees within Options 8, Section
8B. The SQT Fees are tiered fees.\11\ Phlx's 7 tier SQT Fees \12\ are
as follows:
---------------------------------------------------------------------------
\8\ See Phlx Rules at Options 7, Section 8A.
\9\ The Clerk Fee is imposed on any registered on-floor person
employed by or associated with a member or member organization
pursuant to Options 3, Section 19, including Inactive Nominees
pursuant to Options 8, Section 7. The Clerk Fee is not imposed on
permit holders. See Phlx Rules at Options 7, Section 8A.
\10\ The term ``Streaming Quote Trader'' is defined in Options
1, Section 1(b)(54) as a Market Maker who has received permission
from the Exchange to generate and submit option quotations
electronically in options to which such SQT is assigned. See Options
7, Section 1. Further, Options 1, Section 1(b)(54) provides that an
SQT means a Market Maker who has received permission from the
Exchange to generate and submit option quotations electronically in
options to which such SQT is assigned. An SQT may only submit such
quotations while such SQT is physically present on the trading floor
of the Exchange. An SQT may only submit quotes in classes of options
in which the SQT is assigned.
\11\ The Exchange notes, with respect to SQTs, that these
participants may only submit quotations while physically present on
the Trading Floor.
\12\ In calculating the number of option class assignments for
SQT Fees, equity options including ETFs and ETNs are counted.
Currencies and indexes are not counted in the number of option class
assignments.
------------------------------------------------------------------------
Number of option class
assignments SQT Fees
------------------------------------------------------------------------
Tier 1: Up to 200 classes.... $0.00 per calendar month.
Tier 2: Up to 400 classes.... 2,200 per calendar month.
Tier 3: Up to 600 classes.... 3,200.00 per calendar month.
Tier 4: Up to 800 classes.... 4,200.00 per calendar month.
Tier 5: Up to 1000 classes... 5,200.00 per calendar month.
Tier 6: Up to 1200 classes... 6,200.00 per calendar month.
Tier 7: All equity issues.... 7,200 per calendar month.
------------------------------------------------------------------------
The Exchange waived the Floor Broker Permit Fee, the Clerk Fee and
the SQT Fees, during the months of April and May 2020, to account for
the closure of open outcry trading. As noted herein, the Trading Floor
will remain closed until June 1, 2020.\13\ The Exchange proposes to
continue to waive these fees for the month of June 2020 to account for
the fact that the Trading Floor has been closed since March 17,
2020.\14\ Also, the Exchange proposes to remove obsolete language,
which was relevant in April and May 2020 regarding a credit, which is
no longer being offered.
---------------------------------------------------------------------------
\13\ See note 4 above.
\14\ See note 3 above.
---------------------------------------------------------------------------
Options 7, Section 9
Today, the Exchange waives certain fees related to the Phlx Trading
Floor within Options 7, Section 9. Specifically, the Exchange waived
the Floor Facility Fee of $330 per month, which is applicable Clerks
(excluding Inactive Nominees pursuant to Options 8, Section 7), Floor
Brokers, Market Makers (including SQTs) and individual Lead Market
Makers), for the months of April and May 2020. The Exchange proposes to
continue to waive the Floor Facility Fee for the month of June 2020 to
account for the fact that the Trading
[[Page 36440]]
Floor has been closed since March 17, 2020.\15\
---------------------------------------------------------------------------
\15\ Id.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\16\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,\17\ 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, and is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------
\16\ 15 U.S.C. 78f(b).
\17\ 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, while adopting a series of steps to improve the current market
model, the Commission highlighted the importance of market forces in
determining prices and SRO revenues and, also, recognized that current
regulation of the market system ``has been remarkably successful in
promoting market competition in its broader forms that are most
important to investors and listed companies.'' \18\
---------------------------------------------------------------------------
\18\ Securities Exchange Act Release No. 51808 (June 9, 2005),
70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
---------------------------------------------------------------------------
Likewise, in NetCoalition v. Securities and Exchange Commission
\19\ (``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.\20\ 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.'' \21\
---------------------------------------------------------------------------
\19\ NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010).
\20\ See NetCoalition, at 534-535.
\21\ Id. at 537.
---------------------------------------------------------------------------
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' . . . .'' \22\ 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.
---------------------------------------------------------------------------
\22\ Id. at 539 (quoting Securities Exchange Act Release No.
59039 (December 2, 2008), 73 FR 74770, 74782-83 (December 9, 2008)
(SR-NYSEArca-2006-21)).
---------------------------------------------------------------------------
Options 7, Section 8
Phlx's proposal to amend Options 7, Section 8, ``Membership Fees,''
at Part A, ``Permit and Registration Fees,'' to offer a credit of
$3,400, for the month of June 2020, to any member or member
organization on the Trading Floor, if that member or member
organization was eligible for the $2,300 reduced Permit Fee as a result
of having executed at least 100 options in a Phlx house account for the
months of February and March 2020, is reasonable. Open outcry trading
was closed on March 17, 2020,\23\ and will not re-open until June 1,
2020.\24\ The Exchange proposes to issue the $3,400 credit to those
members or member organizations on the Trading Floor who demonstrated
they executed at least 100 options in a Phlx house account for the
months of February and March 2020, and paid the $4,000 Permit Fee in
April and May 2020, in order to qualify for the reduced Permit Fee of
$2,300. The Exchange believes that these members and member
organizations may have also qualified for the credit in April or May
2020, if open outcry trading were available. The Exchange proposes to
credit those qualifying member and member organizations on the Trading
Floor the difference ($1,700 per month) as between the $4,000 a month
Permit Fee and the reduced Permit Fee of $2,300 a month for the two
full months (April and May 2020) when open outcry trading was closed.
The Exchange believes it is reasonable to pay the difference based on
whether the member or member organization qualified in both the two
full prior months, when open outcry trading was unavailable. This
credit would not apply to Floor Brokers,\25\ Floor Lead Market Makers,
or Floor Market Makers, as these members do not have the ability to
qualify for a reduced Permit Fee today. The credit would also not apply
to members accessing Phlx electronically.\26\
---------------------------------------------------------------------------
\23\ See note 3 above.
\24\ See note 4 above.
\25\ The Floor Broker Permit Fee was waived in April and May
2020. The Exchange proposes herein to also waive that fee for June
2020.
\26\ Remote Lead Market Makers and Remote Market Makers access
the market electronically and are therefore excluded.
---------------------------------------------------------------------------
Phlx's proposal to amend Options 7, Section 8, ``Membership Fees,''
at Part A, ``Permit and Registration Fees,'' to offer a credit of
$3,400, for the month of June 2020, to any member or member
organization on the Trading Floor, if that member or member
organization was eligible for the $2,300 reduced Permit Fee as a result
of having executed at least 100 options in a Phlx house account for the
months of February and March 2020 and paid the $4,000 Permit Fee in
April and May 2020, is equitable and not unreasonably discriminatory.
The Exchange proposes to uniformly offer all Trading Floor members and
member organizations who currently pay the $4,000 Permit Fee, a credit
of $3,400, provided they executed at least 100 options in a Phlx house
account for the months of February and March 2020, and paid the $4,000
Permit Fee in April and May 2020. The Exchange notes that it is
equitable and not unfairly discriminatory to not offer the credit to
Floor Brokers, Floor Lead Market Makers, or Floor Market Makers as
these members do not have the ability to qualify for a reduced Permit
Fee today.\27\ Also, it is equitable and not unfairly discriminatory to
not offer the credit to member organizations who transact an electronic
options business, as those member organizations remain able to transact
at least 100 options in a Phlx house account.\28\
---------------------------------------------------------------------------
\27\ The Floor Broker Permit Fee is proposed to be waived for
the month of June 2020.
\28\ Remote Lead Market Makers and Remote Market Makers access
the market electronically and are therefore excluded.
---------------------------------------------------------------------------
Fee Waivers
The Exchange's proposal to waive the Floor Broker Permit Fee, the
Clerk Fee, SQT Fee and the Floor Facility Fee, during the month of June
2020, is reasonable as open outcry on the Phlx Trading Floor has not
been available since March 17, 2020.\29\ The Exchange's proposal to
waive these fees, which apply to transacting an options business on the
Trading Floor, is intended to alleviate costs for member organizations
in consideration of their inability to transact options in open outcry
on the Phlx Trading Floor since March 17, 2020.
---------------------------------------------------------------------------
\29\ See note 3 above.
---------------------------------------------------------------------------
The Exchange's proposal to waive the Floor Broker Permit Fee, the
Clerk Fee, SQT Fee and the Floor Facility Fee, during the month of June
2020, is equitable and not unfairly discriminatory as the Exchange will
apply these proposed waivers uniformly to all member organizations on
the Trading Floor. Phlx continues to permit
[[Page 36441]]
electronic trading and, therefore, fees associated with electronic
trading have not been waived.
Obsolete Text
The Exchange's proposal to remove obsolete language from Options 7,
Section 8, related to an obsolete credit is reasonable, equitable and
not unfairly discriminatory as the credit is no longer applicable. No
member or member organization may obtain the credit.
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.
Inter-Market Competition
The proposal does not impose an undue burden on inter-market
competition. The Exchange believes its proposal remains competitive
with other options markets and will offer market participants with
another choice of where to transact options. 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 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.
Intra-Market Competition
Phlx's proposal to amend Options 7, Section 8, ``Membership Fees,''
at Part A, ``Permit and Registration Fees,'' to offer a credit of
$3,400, for the month of June 2020, to any member or member
organization on the Trading Floor, if that member or member
organization was eligible for the $2,300 reduced Permit Fee as a result
of having executed at least 100 options in a Phlx house account for the
months of February and March 2020, and paid the $4,000 Permit Fee in
April and May 2020, does not impose an undue burden on competition. The
Exchange would uniformly offer all Trading Floor members and member
organizations who currently pay the $4,000 Permit Fee, a credit of
$3,400, provided they executed at least 100 options in a Phlx house
account for the months of February and March 2020, and paid the $4,000
Permit Fee in April and May 2020. The Exchange notes that it does not
impose an undue burden on competition to not offer the credit to Floor
Brokers, Floor Lead Market Makers, or Floor Market Makers as these
members do not have the ability to qualify for a reduced Permit Fee
today.\30\ Also, it does not impose an undue burden on competition to
not offer the credit to member organizations who transact an electronic
options business, as those member organizations remain able to transact
at least 100 options in a Phlx house account.\31\
---------------------------------------------------------------------------
\30\ The Floor Broker Permit Fee is proposed to be waived for
the month of June 2020.
\31\ Remote Lead Market Makers and Remote Market Makers access
the market electronically and are therefore excluded.
---------------------------------------------------------------------------
The Exchange's proposal to waive the Floor Broker Permit Fee, the
Clerk Fee, SQT Fee and the Floor Facility Fee during the month of June
2020 does not impose an undue burden on competition as the Exchange
will apply these proposed waivers uniformly to all member organizations
on the Trading Floor. Phlx continues to permit electronic trading and
therefore fees associated with electronic trading have not been waived.
The Exchange's proposal to remove obsolete language from Options 7,
Section 8, related to an obsolete credit, does not impose an undue
burden on competition as the credit is no longer applicable. No member
or member organization may obtain the credit.
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.\32\
---------------------------------------------------------------------------
\32\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------
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 [email protected]. Please include
File Number SR-Phlx-2020-28 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-2020-28. 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 website (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 website 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. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-Phlx-2020-28 and should be submitted on
or before July 7, 2020.
[[Page 36442]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\33\
---------------------------------------------------------------------------
\33\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-12904 Filed 6-15-20; 8:45 am]
BILLING CODE 8011-01-P
