[Federal Register Volume 77, Number 10 (Tuesday, January 17, 2012)]
[Notices]
[Pages 2328-2329]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-637]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-66122; File No. SR-Phlx-2011-186]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Modify
Fees Applicable to the Trading of NMS Stocks Through NASDAQ OMX PSX
January 10, 2012.
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 28, 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 modify the fees applicable to trading on
the NASDAQ OMX PSX system (``PSX''). The text of the proposed rule
change is available on the Exchange's Web site at http://nasdaqomxphlx.cchwallstreet.com/NASDAQOMXPHLX/Filings/, at the
principal office of the Exchange, on the Commission's Web site at
http://www.sec.gov, 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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange is proposing to modify order routing fees applicable
to the use of PSX's PMOP routing strategy. PMOP is a routing option
under which an incoming order routes only to Protected Quotations (as
defined in SEC Rule 600 under Regulation NMS),\3\ and only for the
displayed size of such quotes. If shares remain unexecuted after
routing, they are posted to the PSX book and do not route out again.
Currently, the Exchange charges $0.0025 per share executed with respect
to PMOP orders that execute at the New York Stock Exchange (``NYSE'')
and $0.0035 per
[[Page 2329]]
share executed with respect to PMOP orders that execute at other
trading venues. The Exchange is proposing to reduce the fee for PMOP
orders that execute at other venues to $0.0031 per share executed.
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\3\ 17 CFR 242.600.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\4\ in general, and with
Sections 6(b)(4) of the Act,\5\ in particular, in that it provides for
the equitable allocation of reasonable dues, fees and other charges
among members and issuers and other persons using any facility or
system which Phlx operates or controls. In general, routing fees are
reasonable because they seek to recoup the cost of the execution on the
other venue, which is generally borne by the order router and,
ultimately, the routing exchange. The proposed change reflects a
reduction in fees in order to make the routing services of PSX more
attractive to potential customers.
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\4\ 15 U.S.C. 78f.
\5\ 15 U.S.C. 78f(b)(4).
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The Exchange also believes that the proposed change is equitable.
All similarly situated members are subject to the same fee structure,
and access to Phlx is offered on fair and non-discriminatory terms;
specifically, the same routing fee, credit or pass through fee applies
to any participant and does not differ based on user type (e.g.,
customer or broker-dealer). The Exchange further believes that the fee
for the PMOP routing strategy is equitable because PMOP is a complex
routing strategy that it involves ascertaining all venues displaying a
protected quote and the simultaneous routing of orders to the displayed
size of such quotes; accordingly, the Exchange believes that charging a
higher fee with respect to the strategy as compared with other
strategies is equitable. Nevertheless, the change will reduce the
difference between PMOP fees and fees for the use of other strategies,
thereby enhancing the competiveness of the Exchange's routing services.
Furthermore, the new routing fees are reasonable and equitable in
that the decision to send routable orders and to use PHLX as a router
is entirely voluntarily; members can avail themselves of numerous other
means of directing orders to other venues, including becoming members
of those markets or using any of a number of competitive routing
services offered by other exchanges and brokers.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act, as amended.
Because the market for order execution and routing is extremely
competitive, members may readily favor the Exchange's competitors in
making order routing decisions to the extent that they deem PSX's fees
to be excessive. Moreover, the Exchange believes that the proposal will
enhance competition through its use of reduced fees to draw greater
order flow to PSX.
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.\6\ 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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\6\ 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 email to [email protected]. Please include
File No. SR-Phlx-2011-186 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 No. SR-Phlx-2011-186. 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 (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 No. SR-Phlx-2011-186 and should be
submitted on or before February 7, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\7\
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\7\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-637 Filed 1-13-12; 8:45 am]
BILLING CODE 8011-01-P