[Federal Register Volume 79, Number 28 (Tuesday, February 11, 2014)]
[Notices]
[Pages 8221-8223]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-02879]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-71491; File No. SR-Phlx-2014-06]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Pricing for SPY Options
February 5, 2014.
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 January 29, 2014, 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
[[Page 8222]]
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 the
Substance of the Proposed Rule Change
The Exchange proposes to amend the Exchange's Pricing Schedule to
amend Simple Order pricing in Section I, entitled Rebates and Fees for
Adding and Removing Liquidity in SPY.\3\
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\3\ Options overlying Standard and Poor's Depositary Receipts/
SPDRs (``SPY'') are based on the SPDR exchange-traded fund
(``ETF''), which is designed to track the performance of the S&P 500
Index.
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While the changes proposed herein are effective upon filing, the
Exchange has designated that the amendments be operative on February 3,
2014.
The text of the proposed rule change is available on the Exchange's
Web site at http://nasdaqomxphlx.cchwallstreet.com/, 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.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange is proposing to amend the Simple Order Fees for
Removing Liquidity in Section I applicable to transactions overlying
SPY. The Exchange currently assesses Customers, Specialists,\4\ Market
Makers,\5\ Firms,\6\ Broker-Dealers \7\ and Professionals \8\ a $0.45
per contract Fee for Removing Liquidity in SPY Simple Orders. The
Exchange is proposing to increase the Fee for Removing Liquidity in SPY
Simple Orders from $0.45 to $0.47 per contract for all market
participants. Despite the increased fees, the Exchange believes that
these fees remain competitive with other exchanges.
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\4\ A ``Specialist'' is an Exchange member who is registered as
an options specialist pursuant to Rule 1020(a).
\5\ A ``Market Maker'' includes Registered Options Traders (Rule
1014(b)(i) and (ii)), which includes Streaming Quote Traders (see
Rule 1014(b)(ii)(A)) and Remote Streaming Quote Traders (see Rule
1014(b)(ii)(B)). Directed Participants are also market makers.
\6\ The term ``Firm'' applies to any transaction that is
identified by a member or member organization for clearing in the
Firm range at The Options Clearing Corporation.
\7\ The term ``Broker-Dealer'' applies to any transaction which
is not subject to any of the other transaction fees applicable
within a particular category.
\8\ The term ``Professional'' means any person or entity that
(i) is not a broker or dealer in securities, and (ii) places more
than 390 orders in listed options per day on average during a
calendar month for its own beneficial account(s). See Rule
1000(b)(14).
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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,\9\ in general, and with
Section 6(b)(4) and 6(b)(5) of the Act,\10\ 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 the Exchange operates or controls, and is not
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\9\ 15 U.S.C. 78f.
\10\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange's proposal to increase the Fee for Removing Liquidity
in Simple Orders for options overlying SPY from $0.45 to $0.47 per
contract for all market participants is reasonable because the increase
is consistent with or less than rates assessed by other options
exchanges, such Topaz Exchange, LLC (``Gemini''), NYSE ARCA, Inc.
(``NYSE Arca''), BATS Exchange, Inc. (``BATS'') and NASDAQ Options
Market LLC (``NOM'').\11\ The Exchange believes that its Fees for
Removing Liquidity remain competitive with other options markets. While
the Exchange is increasing these fees, these transactions are included
in the calculation of Customer volume for purposes of qualifying for
Customer Rebates in Section B of the Pricing Schedule.
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\11\ See Gemini's Fee Schedule. Gemini assesses taker fees for
Priority Customer of $0.45 per contract and $0.48 per contract for
all market participants. See NYSE Arca fees Schedule. NYSE Arca
assesses all non-customer market participants a take liquidity fee
of $0.48 per contract. Customers are assessed $0.45 per contract for
removing liquidity. Gemini permits its members to lower certain of
these fees provided they meet certain criteria. See BATS BZX
Exchange Fee Schedule. BATS assesses a $0.48 charge per contract for
a Professional, Firm or Market Maker order that removes liquidity
and $0.47 per contract for a Customer order that removes liquidity.
BATS permits its members to lower certain of these fees provided
they meet certain criteria. See NOM Rules at Chapter XV, Section 2.
NOM assesses $0.45 per contract for a Customer to remove liquidity
and $0.49 per contract for all other market participants, except NOM
Market Makers who are assessed $0.48 per contract. NOM Participants
are provided the ability to reduce certain fees provided they add
requisite liquidity.
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The Exchange's proposal to increase the Fee for Removing Liquidity
in Simple Orders for options overlying SPY from $0.45 to $0.47 per
contract for all market participants is equitable and not unfairly
discriminatory because all market participants will be assessed a
uniform Fee for Removing Liquidity in Simple Orders for options
overlying SPY of $0.47 per contract. The Exchange is assessing all
market participants the same fee for removing liquidity in Simple
Orders in SPY.
B. Self-Regulatory Organization's Statement on Burden on Competition
Phlx does not believe that the proposed rule change will impose an
undue burden on competition not necessary or appropriate in furtherance
of the purposes of the Act. The Exchange believes that increasing the
SPY Simple Order Fees for Removing Liquidity for all market
participants does not impose a burden on competition, but rather that
the proposed rule change will continue to promote competition on the
Exchange. All market participants will be assessed the same fee to
remove SPY Simple Orders.
The Exchange operates in a highly competitive market, comprised of
twelve options exchanges, in which market participants can easily and
readily direct order flow to competing venues if they deem fee levels
at a particular venue to be excessive or rebates to be inadequate.
Accordingly, the fees that are assessed and the rebates paid by the
Exchange described in the above proposal are influenced by these robust
market forces and therefore must remain competitive with fees charged
and rebates paid by other venues and therefore must continue to be
reasonable and equitably allocated to those members that opt to direct
orders to the Exchange rather than competing venues.
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
[[Page 8223]]
19(b)(3)(A)(ii) of the Act.\12\ 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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\12\ 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 Number SR-Phlx-2014-06 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-2014-06. 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
10:00 a.m. and 3:00 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-2014-06, and should be
submitted on or before March 4, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-02879 Filed 2-10-14; 8:45 am]
BILLING CODE 8011-01-P