[Federal Register Volume 76, Number 116 (Thursday, June 16, 2011)]
[Notices]
[Pages 35256-35257]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-14903]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64645; File No. SR-Phlx-2011-81]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by NASDAQ OMX PHLX LLC Relating
to Routing Fees
June 10, 2011.
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 June 7, 2011, 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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend its Customer Routing Fee governing
pricing for Exchange members using the Phlx XL II system,\3\ for
routing standardized equity and index option Customer orders to the C2
Options Exchange, Inc. (``C2'') for execution.
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\3\ For a complete description of Phlx XL II, see Securities
Exchange Act Release No. 59995 (May 28, 2009), 74 FR 26750 (June 3,
2009) (SR-Phlx-2009-32). The instant proposed fees will apply only
to option orders entered into, and routed by, the Phlx XL II system.
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While fee changes pursuant to this proposal are effective upon
filing, the Exchange has designated these changes to be operative on
July 1, 2011.
The text of the proposed rule change is available on the Exchange's
Web site at http://nasdaqtrader.com/micro.aspx?id=PHLXfilings, at the
principal office of the Exchange, at the Commission's Public Reference
Room, and on the Commission's Web site at http://www.sec.gov.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the proposed rule change is to recoup costs that the
Exchange incurs for routing and executing Customer orders in equity and
index options to C2.
The Exchange's Fee Schedule includes Routing Fees for routing and
executing Customer and Professional orders to away markets. The
Exchange currently assesses a Customer Routing Fee of $0.21 per
contract for option orders that are routed to C2.
C2 recently amended its Fees Schedule to increase its public
customer taker fee from $.15 to $.25.\4\ The Exchange is proposing to
amend its Customer Routing Fee to C2 to account for this increase. The
Exchange proposes to amend its Fee Schedule to assess a Customer
Routing Fee of $0.31 per contract for option orders that are routed to
C2.
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\4\ See Securities Exchange Act Release No. 64390 (May 4, 2011),
76 FR 27117 (May 10, 2011) (SR-C2-2011-011).
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In May 2009, the Exchange adopted Rule 1080(m)(iii)(A) to establish
Nasdaq Options Services LLC (``NOS''), a member of the Exchange, as the
Exchange's exclusive order router.\5\ NOS is utilized by the Phlx XL II
system solely to route orders in options listed and open for trading on
the Phlx XL II system to destination markets. Each time NOS routes to
away markets NOS is charged a $0.06 clearing fee and, in the case of
certain exchanges, a transaction fee is also charged in certain
symbols, which fees are passed through to the Exchange. The Exchange is
proposing this amendment in order to recoup clearing and transaction
charges incurred by the Exchange when Customer orders are routed to
C2.\6\
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\5\ See Securities Exchange Act Release No. 59995 (May 28,
2009), 74 FR 26750 (June 3, 2009) (SR-Phlx-2009-32).
\6\ The Exchange is proposing to recoup the $.25 per contract
public customer transaction fee for orders routed to C2 along with
the $0.06 clearing fee which is incurred by the Exchange, as
explained above. See C2 Fees Schedule.
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As with all fees, the Exchange may adjust these Routing Fees in
response to competitive conditions by filing a new proposed rule
change. While fee changes pursuant to this proposal are effective upon
filing, the Exchange has designated these changes to be operative on
July 1, 2011.
2. Statutory Basis
The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \7\ in general, and furthers
the objectives of Section 6(b)(4) of the Act \8\ in particular, in that
it is an equitable allocation of reasonable fees and other charges
among Exchange members.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that this fee is reasonable because it seeks
to recoup costs that are incurred by the Exchange when routing Customer
orders to C2 on behalf of its members. Each destination market's
transaction charge varies and there is a standard clearing charge for
each transaction incurred by the
[[Page 35257]]
Exchange. The Exchange believes that the proposed Routing Fee would
enable the Exchange to recover the public customer transaction fee
assessed by C2, plus clearing fees for the execution of Customer
orders. The Exchange also believes that the proposed Routing Fee is
equitable because it would be uniformly applied to all Customers.
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.
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.\9\ At any time within 60 days of the filing
of the proposed rule change, the Commission summarily may temporarily
suspend such rule change if it appears to the Commission that such
action is necessary or appropriate in the public interest, for the
protection of investors, or otherwise in furtherance of the purposes of
the Act. If the Commission takes such action, the Commission shall
institute proceedings to determine whether the proposed rule should be
approved or disapproved.
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\9\ 15 U.S.C. 78s(b)(3)(A)(ii).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. Please include
File Number SR-Phlx-2011-81 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-Phlx-2011-81. This file
number should be included on the subject line if e-mail 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 (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal 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-2011-81 and should be
submitted on or before July 7, 2011.
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\10\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-14903 Filed 6-15-11; 8:45 am]
BILLING CODE 8011-01-P