[Federal Register Volume 77, Number 180 (Monday, September 17, 2012)]
[Notices]
[Page 57168]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-22785]
[[Page 57168]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-67825; SR-Phlx-2012-27; SR-Phlx-2012-54]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Designation of Longer Period for Commission Action on Proceedings To
Determine Whether To Approve or Disapprove Proposed Rule Relating to
Complex Order Fees and Rebates for Adding and Removing Liquidity in
Select Symbols
September 11, 2012.
On March 1, 2012 and April 23, 2012, NASDAQ OMX PHLX LLC (``Phlx''
or ``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ two
proposed rule changes relating to the transaction fees for certain
Complex Order transactions.\3\
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ A Complex Order is any order involving the simultaneous
purchase and/or sale of two or more different options series in the
same underlying security, priced at a net debit or credit based on
the relative prices of the individual components, for the same
account, for the purpose of executing a particular investment
strategy. A Complex Order may also be a stock-option order, which is
an order to buy or sell a stated number of units of an underlying
stock or exchange-traded fund (``ETF'') coupled with the purchase or
sale of options contract(s). See Exchange Rule 1080, Commentary
.08(a)(i).
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In SR-Phlx-2012-27 (filed on March 1, 2012), Phlx proposed to amend
the Exchange's Fee Schedule to increase the transaction fees and
rebates for certain Complex Order transactions and create a new rebate
for certain Complex Orders. The proposed rule change was immediately
effective upon filing with the Commission pursuant to Section
19(b)(3)(A) of the Act.\4\ Notice of filing of the proposed rule change
was published for comment in the Federal Register on March 15, 2012.\5\
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\4\ 15 U.S.C. 78s(b)(3)(A).
\5\ See Securities Exchange Act Release No. 66551 (March 9,
2012) 77 FR 15400.
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In SR-Phlx-2012-54 (filed on April 23, 2012), Phlx proposed to
replace a portion of SR-Phlx-2012-27 to provide additional information
concerning the Directed Participant and Market Maker fees for removing
liquidity in Complex orders (``Second Proposal,'' and, together with
SR-Phlx-2012-27, the ``Phlx Proposals''). The proposed rule change was
immediately effective upon filing with the Commission pursuant to
Section 19(b)(3)(A) of the Act.\6\ Notice of filing of the proposed
rule change was published for comment in the Federal Register on May 4,
2012. \7\
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\6\ 15 U.S.C. 78s(b)(3)(A).
\7\ See Securities Exchange Act Release No. 66883 (April 30,
2012) 77 FR 26591.
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The Commission received no comment letters on the Phlx Proposals.
On April 30, 2012, the Commission instituted proceedings to
determine whether to approve or disapprove the proposed rule
changes.\8\ Thereafter, NASDAQ OMX Group, Inc. submitted a response
letter in support of the Phlx Proposals on July 26, 2012.\9\
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\8\ See Securities Exchange Act Release No. 66884, 77 FR
26595(May 4, 2012) (``Order Instituting Proceedings'').
\9\ See Letter to Elizabeth M. Murphy, Secretary, Commission,
from Joan C. Conley, Senior Vice President & Corporate Secretary,
NASDAQ OMX Group, Inc., dated July 26, 2012.
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Section 19(b)(2) of the Act \10\ provides that, after initiating
disapproval proceedings, the Commission shall issue an order approving
or disapproving the proposed rule change not later than 180 days after
the date of publication of notice of the filing of the proposed rule
change. The Commission may extend the period for issuing an order
approving or disapproving the proposed rule change, however, by not
more than 60 days if the Commission determines that a longer period is
appropriate and publishes the reasons for such determination. The
proposed rule changes were published for notice and comment in the
Federal Register on March 15, 2012 and May 4, 2012, respectively.
September 11, 2012 is 180 days from March 15, 2012 and November 10,
2012 is an additional 60 days from that date.
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\10\ 15 U.S.C. 78s(b)(2).
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The Commission finds it appropriate to designate a longer period
within which to issue an order approving or disapproving the Phlx
Proposals so that it has sufficient time to consider the Phlx Proposals
and the issues raised by those proposals, and the Exchange's response
to such issues in its response letter.\11\ The Commission also finds it
appropriate to designate a longer period within which to issue an order
approving or disapproving the proposed rule changes so that it has
sufficient time to consider data that has been provided by the Exchange
in support of its proposals, including additional data that it
anticipates will be provided by the Exchange.\12\
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\11\ For example, in the order instituting proceedings to
determine whether to approve or disapprove the proposed rule
changes, the Commission sought comment on whether discrimination on
the basis of whether a market maker has an off-exchange arrangement
to pay an order flow provider to direct its orders to that market
maker is a ``fair'' basis for discrimination among exchange members
with respect to the fees charged by the exchange. The Commission
also sought comment on whether the Phlx Proposals adequately
addressed the reasonableness of the proposed fees (and thus the
proposed fee differential).
\12\ To date, the Exchange has provided data on price
improvement for directed customer complex orders, and the rates of
interaction with customer complex orders by types of market
participant, among other things.
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Accordingly, the Commission, pursuant to Section 19(b)(2) of the
Act,\13\ designates November 10, 2012, and December 30, 2012, as the
respective dates by which the Commission should either approve or
disapprove the proposed rule changes (SR-Phlx-2012-27 and SR-Phlx-2012-
54).
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\13\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(57).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-22785 Filed 9-14-12; 8:45 am]
BILLING CODE 8011-01-P