[Federal Register Volume 80, Number 23 (Wednesday, February 4, 2015)]
[Notices]
[Pages 6148-6150]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-02105]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-74170; File No. SR-Phlx-2015-08]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend the
Exchange's Pricing Schedule Under Section VIII With Respect To
Execution and Routing of Orders in Securities Priced at $1 or More Per
Share
January 29, 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 16, 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.
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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 the Exchange's Pricing Schedule
under Section VIII, entitled ``NASDAQ OMX PSX FEES,'' with respect to
execution and routing of orders in securities priced at $1 or more per
share.
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.
[[Page 6149]]
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the proposed rule change is to amend the certain
fees and rebates for order execution and routing applicable to the use
of the order execution and routing services of the NASDAQ OMX PSX
System (``PSX'') by member organizations for all securities traded at
$1 or more per share.
Currently, for non-displayed orders the Exchange assesses a charge
of ``$0.0003 per share executed charge for a midpoint pegged order
(``midpoint order'')''. The Exchange proposes to delete this so that
the charge for orders with midpoint pegging to access liquidity will
revert to the $0.0024 per share executed charge currently assessed on
member organizations that enter orders that execute in PSX.
Additionally, the Exchange proposes to eliminate the $0.0003 per
share executed charge for orders that execute against resting midpoint
liquidity and add a $0.0010 per share credit for orders with midpoint
pegging that provide liquidity.
The current $0.0005 per share executed credit for other non-
displayed orders that provide liquidity will remain unchanged, but
within the Pricing Schedule it will follow the charge listed in the
paragraph immediately above for purposes of clarity. This makes it
clear that the word ``other'' in ``other non-displayed orders that
provide liquidity'' refers to orders other than ``orders with midpoint
pegging''.
2. Statutory Basis
The Exchange believes that its proposal to amend its Pricing
Schedule is consistent with Section 6(b) of the Act \3\ in general, and
furthers the objectives of Sections 6(b)(4) and (b)(5) of the Act \4\
in particular, in that it is an equitable allocation of reasonable fees
and other charges among Exchange members and other persons using its
facilities, and it does not unfairly discriminate between customers,
issuers, brokers or dealers. The proposed changes are reasonable
because they reflect the Exchange's need to adjust its credits and fees
in response to the costs and benefits provided. Credits provided by the
Exchange are given in lieu of assessing normal fees, and accordingly
provide incentives to market participants to enter such orders. The
proposed changes balance the Exchange's desire to provide certain
incentives to market participants with the costs the Exchange incurs in
providing such incentives.
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\3\ 15 U.S.C. 78f(b).
\4\ 15 U.S.C. 78f(b)(4) and (5).
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Thus, the proposed change with respect to the elimination of the
$0.0003 per share executed charge for a midpoint pegged order is
reasonable because by eliminating the charge within this part of the
Pricing Schedule, the charge will become the already existing current
charge of $0.0024 per share executed assessed on member organizations
that enter orders that execute in PSX, regardless of the listing venue
of the security. The Exchange also believes that the proposed change is
consistent with an equitable allocation of fees and is not unfairly
discriminatory because it applies to all member organizations that
enter orders that execute in PSX, regardless of the listing venue of
the security.
The Exchange believes that eliminating the $0.0003 per share
executed charge for orders that execute against resting midpoint
liquidity is reasonable for the reasons discussed above regarding the
Exchange's need to adjust its credits and fees. The Exchange also
believes that it is consistent with an equitable allocation of fees and
is not unfairly discriminatory because it applies to all market
participants.
The Exchange believes that adding a $0.0010 per share credit for
orders with midpoint pegging that provide liquidity is reasonable for
the reasons discussed above regarding the Exchange's need to adjust its
credits and fees. Specifically, the Exchange believes that the $0.0010
per share credit for orders with midpoint pegging will incentivize
market participants to add liquidity using orders with midpoint
pegging. The Exchange also believes that the $0.0010 per share credit
for orders with midpoint pegging is consistent with an equitable
allocation of fees and is not unfairly discriminatory because it
applies to all market participants that provide liquidity using orders
with midpoint pegging, regardless of the listing venue of the security
of the order.
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, as amended.\5\ The Exchange
notes that it operates in a highly competitive market in which market
participants can readily favor competing venues if they deem fee levels
at a particular venue to be excessive, or rebate opportunities
available at other venues to be more favorable. In such an environment,
the Exchange must continually adjust its fees to remain competitive
with other exchanges and with alternative trading systems that have
been exempted from compliance with the statutory standards applicable
to exchanges. Because competitors are free to modify their own fees in
response, and because market participants may readily adjust their
order routing practices, the Exchange believes that the degree to which
fee changes in this market may impose any burden on competition is
extremely limited. In this instance, the changes to the credits
provided and charges assessed are intended to reduce the Exchange's
costs, while still continuing to provide an incentive for members to
execute shares on PSX. Because there are numerous competitive
alternatives to PSX, it is likely the Exchange will lose market share
as a result of the changes if they are unattractive to market
participants. Accordingly, the Exchange does not believe the proposed
changes will impair the ability of members or competing order execution
venues to maintain their competitive standing in the financial markets.
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\5\ 15 U.S.C. 78f(b)(8).
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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
Pursuant to Section 19(b)(3)(A)(ii) of the Act,\6\ the Exchange has
designated this proposal as establishing or changing a due, fee, or
other charge imposed by the self-regulatory organization on any person,
whether or not the person is a member of the self-regulatory
organization, which renders the proposed rule change effective upon
filing.
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\6\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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.
[[Page 6150]]
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-2015-08 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-Phlx-2015-08. 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-2015-08 and should be
submitted on or before February 25, 2015.
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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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2015-02105 Filed 2-3-15; 8:45 am]
BILLING CODE 8011-01-P