[Federal Register Volume 77, Number 41 (Thursday, March 1, 2012)]
[Notices]
[Pages 12624-12626]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-4910]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-66451; File No. SR-Phlx-2012-19]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Routing Fees
February 23, 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 February 10, 2012, 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 and Professional
Routing Fees to recoup costs incurred by the Exchange in routing to
away markets.
While changes to the Fee Schedule pursuant to this proposal are
effective upon filing, the Exchange has designated these changes to be
operative on March 1, 2012.
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, 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.
[[Page 12625]]
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of this filing is to recoup costs that the Exchange
incurs for routing and executing Customer and Professional orders in
equity and index options. The Exchange's Fee Schedule includes Routing
Fees for routing Customer and Professional orders to away markets. The
Exchange currently assesses the following Routing Fees:
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Exchange Customer Professional
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NYSE AMEX........................... $0.06 $0.26
BATS................................ 0.50 0.50
BOX................................. 0.06 0.06
CBOE................................ 0.06 0.26
CBOE orders greater than 99 0.24 0.26
contracts in RUT, RMN, NDX, MNX,
ETFs, ETNs and HOLDRs..............
C2.................................. 0.50 0.51
ISE................................. 0.06 0.24
ISE Select Symbols *................ 0.18 0.34
NYSE ARCA (Penny Pilot)............. 0.50 0.50
NYSE ARCA (Standard)................ 0.06 0.06
NOM................................. 0.49 0.49
NOM (NDX and MNX)................... 0.56 0.56
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*These fees are applicable to orders routed to ISE that are subject to
Rebates and Fees for Adding and Removing Liquidity in Select Symbols.
See ISE's Schedule of Fees for the complete list of symbols that are
subject to these fees.
The Exchange proposes to amend its Routing Fees as follows:
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Exchange Customer Professional
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NYSE AMEX........................... $0.11 $0.31
BATS................................ 0.55 0.55
BOX................................. 0.11 0.11
CBOE................................ 0.11 0.31
CBOE orders greater than 99 0.29 0.31
contracts in RUT, RMN, NDX, MNX,
ETFs, ETNs and HOLDRs..............
C2.................................. 0.55 0.56
ISE................................. 0.11 0.29
ISE Select Symbols *................ 0.23 0.39
NYSE ARCA (Penny Pilot)............. 0.55 0.55
NYSE ARCA (Standard)................ 0.11 0.11
NOM................................. 0.54 0.54
NOM (NDX and MNX)................... 0.56 0.56
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* These fees are applicable to orders routed to ISE that are subject to
Rebates and Fees for Adding and Removing Liquidity in Select Symbols.
See ISE's Schedule of Fees for the complete list of symbols that are
subject to these fees.
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.\3\ 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
currently recoups clearing and transaction charges incurred by the
Exchange when Customer and Professional orders are routed to an away
market. At this time, the Exchange is proposing to recoup certain other
costs incurred by the Exchange when routing to away markets, such as
administrative and technical costs associated with operating NOS, the
Exchange's exclusive order router; the Exchange's membership fees at
away markets; and technical costs associated with routing. The Exchange
is proposing to increase all Customer and Professional Routing Fees
with the exception of routing orders in MNX \4\ and NDX \5\ to the
NASDAQ Options Market (``NOM''). The Exchange does not believe it is
necessary to increase those fees at this time.
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\3\ See Securities Exchange Act Release No. 59995 (May 28,
2009), 74 FR 26750 (June 3, 2009) (SR-Phlx-2009-32).
\4\ MNX represents options on the one-tenth value of the Nasdaq
100 Index traded under the symbol ``MNX.''
\5\ NDX represents options on the Nasdaq 100 Index traded under
the symbol NDX (``NDX'').
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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 changes to the Fee Schedule pursuant to this proposal are
effective upon filing, the Exchange has designated these changes to be
operative on March 1, 2012.
2. Statutory Basis
The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \6\ in general, and furthers
the objectives of Section 6(b)(4) of the Act \7\ in particular, in that
it is an equitable allocation of reasonable fees and other charges
among Exchange members.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that the proposed Routing Fees are reasonable
because the fees would allow the Exchange to recoup costs associated
[[Page 12626]]
with routing both Customer and Professional orders to away markets. The
Exchange believes that these fees will assist it in recouping costs the
Exchange incurs by utilizing NOS, in maintaining membership fees at
away markets and technical expenses associated with the routing
process. The proposed fees also continue to recoup transaction fees
assessed by the respective away market, which vary, and standard
clearing charges for each transaction, which fees are incurred by the
Exchange when routing to away markets.
The Exchange also believes that the proposed Routing Fees are
equitable and not unfairly discriminatory because the fees would be
uniformly applied to all Customers and Professionals. The Exchange's
proposed fees are calculated to distribute the costs associated with
routing among the various away markets. The Exchange determined not to
amend the Customer and Professional Routing Fees when routing orders in
MNX and NDX to NOM at this time because the Exchange determined that in
light of other fees, the current fees for routing to NOM in MNX and NDX
are currently within the range of fees that are proposed for other away
markets. The Exchange does not believe that it is necessary at this
time to assess additional fees to route to NOM in MNX and NDX above the
current $.56 per contract fee assessed for Customer and Professional
orders today.
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.\8\ 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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\8\ 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-2012-19 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-2012-19. 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-2012-19 and should be
submitted on or before March 22, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-4910 Filed 2-29-12; 8:45 am]
BILLING CODE 8011-01-P