[Federal Register Volume 79, Number 37 (Tuesday, February 25, 2014)]
[Notices]
[Pages 10593-10594]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-03969]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-71569; File No. SR-Phlx-2014-12]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
the Options Regulatory Fee
February 19, 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 February 11, 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 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 its Pricing Schedule to specify the
frequency with which the Exchange may change the Options Regulatory Fee
(``ORF'').
While the changes proposed herein are effective upon filing, the
Exchange has designated that the amendments be operative on March 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 proposes to amend its Pricing Schedule at Section IV,
Part D to specify the frequency with which the Exchange may change the
ORF. The ORF is assessed by the Exchange on each member for all options
transactions executed or cleared by the member that are cleared by The
Options Clearing Corporation (``OCC'') in the customer range (i.e.,
transactions that clear in the customer account of the member's
clearing firm at OCC) regardless of the exchange on which the
transaction occurs. The fee is collected indirectly from members
through their clearing firms by OCC on behalf of the Exchange. The dues
and fees paid by members go into the general funds of the Exchange, a
portion of which is used to help pay the costs of regulation.
In response to feedback from market participants requesting greater
certainty as to when ORF changes may occur, the Exchange proposes to
specify in the Pricing Schedule that the Exchange may only increase or
decrease the ORF semi-annually, and any such fee change will be
effective on the first business day of February or August.\3\ In
addition to submitting a proposed rule change to the Securities and
Exchange Commission (``Commission'') as required by the Act to increase
or decrease the ORF, the Exchange will notify participants via an
Options Trader Alert of any anticipated change in the amount of the fee
at least 30 calendar days prior to the effective date of the change.
The Exchange believes that by providing guidance on the timing of any
changes to the ORF, the Exchange would make it easier for market
participants to ensure their systems are configured to properly account
for the ORF.
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\3\ The Exchange monitors the amount of revenue collected from
the ORF so that it, in combination with its other regulatory fees
and fines, does not exceed regulatory costs. See, e.g.,Securities
Exchange Act Release Nos. 61133 (December 9, 2009), 74 FR 66715
(December 16, 2009) (SR-Phlx-2009-100); 61529 (February 17, 2010),
75 FR 8421 (February 24, 2010) (SR-Phlx-2010-17), 62619 (July 30,
2010), 75 FR 47874 (August 9, 2010) (SR-Phlx-2010-100); 63436
(December 6, 2010), 75 FR 77021 (December 10, 2010) (SR-Phlx-2010-
166); 65897 (December 6, 2011), 76 FR 77277 (December 12, 2011) (SR-
Phlx-2011-163) and 66664 (March 27, 2012), 77 FR 19743 (April 2,
2012).
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The proposed change is not intended to address any other issues,
and the Exchange is not aware of any problems that members would have
in complying with the proposed change.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\4\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\5\ in particular,
because it provides for the equitable allocation of reasonable dues,
fees, and other charges among its members, issuers and other persons
using its facilities and does not unfairly discriminate between
customers, issuers, brokers or dealers.
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\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange believes that the proposed change to limit changes to
the ORF to twice a year on specific dates with advance notice is
reasonable because it will give market participants certainty on the
timing of changes, if any, and better enable them to properly account
for ORF charges among their customers. The Exchange believes that the
proposed change is equitable and not unfairly discriminatory because it
will apply in the same manner to all members that are subject to the
ORF and provide them with additional advance notice of changes to that
fee.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange Exchange [sic] 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 proposed
change is not intended to address a competitive issue but rather to
provide members with better notice of any change that the Exchange may
make to the ORF. In any event, because competitors are free to modify
their own fees and credits in response, and because market participants
may readily adjust their trading practices, the Exchange believes that
the degree to which fee or credit changes in this market may impose any
burden on competition is extremely limited. As a result of all of these
considerations, the Exchange does not believe that the proposed change
will impair the ability of members, or competing order execution venues
to maintain their competitive standing in the financial markets.
[[Page 10594]]
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 Number SR-Phlx-2014-12 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-2014-12. 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-2014-12, and should be
submitted on or before March 18, 2014.
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. 2014-03969 Filed 2-24-14; 8:45 am]
BILLING CODE 8011-01-P