[Federal Register Volume 80, Number 19 (Thursday, January 29, 2015)]
[Notices]
[Pages 4958-4960]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-01644]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-74125; File No. SR-PHLX-2015-05]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
MNX and NDX
January 23, 2015.
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 21, 2015, 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Section II \3\ of the Pricing
Schedule entitled ``Multiply Listed Options Fees'' to assess an
increased Options Surcharge in MNX \4\ and NDX.\5\
---------------------------------------------------------------------------
\3\ Section II of the Pricing Schedule includes options
overlying equities, ETFs, ETNs and indexes which are Multiply
Listed.
\4\ MNX represents options on the one-tenth value of the Nasdaq
100 Index traded under the symbol MNX (``MNX'').
\5\ NDX represents options on the Nasdaq 100 Index traded under
the symbol NDX (``NDX'').
---------------------------------------------------------------------------
While changes to the Pricing Schedule pursuant to this proposal are
effective upon filing, the Exchange has designated the proposed
amendment to be operative on February 2, 2015.
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
[[Page 4959]]
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 purpose of this filing is to amend Section II of the Pricing
Schedule entitled ``Multiply Listed Options Fees'' to increase the
Options Surcharge for transactions in MNX and NDX from $0.15 to $0.20
per contract for Professionals,\6\ Market Makers,\7\ Specialists,\8\
Broker-Dealers \9\ and Firms.\10\ As is the case today, Customers \11\
will not be assessed an Options Surcharge in MNX an NDX. The Options
Surcharge is assessed in addition to the Options Transactions Fees in
Section II of the Pricing Schedule. This rule change applies to both
electronic and floor transactions.
---------------------------------------------------------------------------
\6\ 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).
\7\ 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.
\8\ The term ``Specialist'' applies to transactions for the
account of a Specialist as defined in Exchange Rule 1020(a).
\9\ The term ``Broker-Dealer'' applies to any transaction which
is not subject to any of the other transaction fees applicable
within a particular category.
\10\ 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 (``OCC'').
\11\ The term ``Customer'' applies to any transaction that is
identified by a member or member organization for clearing in the
Customer range at OCC which is not for the account of a broker or
dealer or for the account of a ``Professional'' as that term is
defined in Rule 1000(b)(14).
---------------------------------------------------------------------------
The Exchange believes that these surcharges will assist the
Exchange in remaining competitive in these options by recouping certain
fees.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\12\ in general, and with
Section 6(b)(4) and 6(b)(5) of the Act,\13\ 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.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78f.
\13\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
The Exchange's proposal to increase the Options Surcharge for
transactions in MNX and NDX from $0.15 to $0.20 per contract for all
non-Customer market participants is reasonable because all non-Customer
market participants will continue to be assessed the same surcharge. As
is the case today, Customers will not be assessed an Options Surcharge.
Also, the Options Surcharge remains competitive with fees at other
options exchanges.\14\
---------------------------------------------------------------------------
\14\ See NYSE MKT LLC's (``NYSE AMEX'') Fee Schedule. NYSE AMEX
assesses a Royalty Fee of $0.22 per contract for transactions in MNX
and NDX. See also NYSE Arca Inc.'s (``NYSE Arca'') Fees and Charges.
NYSE Arca, Inc. assesses a Royalty Fee of $0.22 per contract for
transactions in MNX and NDX.
---------------------------------------------------------------------------
The Exchange's proposal to increase the Options Surcharge for
transactions in MNX and NDX from $0.15 to $0.20 per contract for all
non-Customer market participants is equitable and not unfairly
discriminatory because the Exchange will continue to assess all non-
Customer market participants a uniform Options Surcharge. Customers are
not assessed an Options Surcharge. Customer order flow is unique
because Customer liquidity benefits all market participants by
providing more trading opportunities, which attracts Specialists and
Market Makers. An increase in the activity of these market participants
in turn facilitates tighter spreads, which may cause an additional
corresponding increase in order flow from other market participants.
Finally, the Exchange believes that it is equitable and not unfairly
discriminatory for non-Customer market participants who trade these
products to pay the surcharge fee as the Exchange has entered into a
licensing agreement to obtain intellectual property rights to list
these products and seeks to recoup a portion of its costs.
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 because all non-Customer market
participants will continue to be assessed a uniform Options Surcharge
Fee for transactions in MNX and NDX, in addition to other transaction
fees. Customer liquidity benefits all market participants by providing
more trading opportunities, which attracts Specialists and Market
Makers. An increase in the activity of these market participants in
turn facilitates tighter spreads, which may cause an additional
corresponding increase in order flow from other market participants.
The Exchange operates in a highly competitive market, comprised of
twelve 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, as described in the proposal,
are influenced by these robust market forces and therefore must remain
competitive with fees charged 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
19(b)(3)(A)(ii) of the Act.\15\ 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.
---------------------------------------------------------------------------
\15\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------
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-2015-05 on the subject line.
[[Page 4960]]
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549.
All submissions should refer to File Number SR-PHLX-2015-05. 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-2015-05 and should be
submitted on or before February 19, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
---------------------------------------------------------------------------
\16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Brent J. Fields,
Secretary.
[FR Doc. 2015-01644 Filed 1-28-15; 8:45 am]
BILLING CODE 8011-01-P