Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX PHLX, Inc.
Federal Register: February 26, 2010 (Volume 75, Number 38)
Notices
Page 9010-9012
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
DOCID:fr26fe10-136
SECURITIES AND EXCHANGE COMMISSION
Release No. 34-61558; File No. SR-Phlx-2010-16
Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Modification of Fees
February 22, 2010.
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 28, 2010, NASDAQ OMX PHLX, Inc. (``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 substantially 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.
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Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
The Exchange proposes to: (i) Amend its Monthly Cap on equity options transaction fees; (ii) amend the calculation of the Monthly
Cap; and (iii) amend the fee schedule to reflect current appeal fees and make other technical modifications.
While changes to the Exchange's Fee Schedule pursuant to this proposal are effective upon filing, the Exchange has designated this proposal to be operative for trades settling on or after February 1, 2010.
The text of the proposed rule change is available on the Exchange's
Web site at http://nasdaqtrader.com/micro.aspx?id=PHLXfilings, on the
Commission's Web site at http://www.sec.gov, at the principal office of the Exchange, and at the Commission's Public Reference Room.
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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.
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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 decrease the current
Monthly Cap on equity options transactions from $900,000 to $750,000.
The Monthly Cap is currently applicable to ROTs \3\ and specialists.\4\
The Exchange believes that by reducing the Monthly Cap, a greater number of members may benefit from the Monthly Cap and the Exchange will attract additional order flow.
\3\ A ROT is a regular member or a foreign currency options participant of the Exchange located on the trading floor who has received permission from the Exchange to trade in options for his own account.
\4\ This monthly cap is not applicable to electronic trading in
Standard and Poor's Depositary Receipts/SPDRs (``SPY''), PowerShares
QQQ Trust (``QQQQ'')[reg]; Ishares Russell 2000 (``IWM'') and
Citigroup Inc. (``C'').
Additionally, the Exchange proposes to amend the calculation of the
Monthly Cap by aggregating the trading activity of separate ROTs and specialist member organizations if there is at least 75% common ownership between the member organizations as reflected on each member organizations' Form BD, Schedule A. The Exchange believes that this aggregation will create an additional incentive for members to transact more business on the Exchange.
The Exchange also proposes to memorialize certain appeal fees on its Fee Schedule. Currently the Exchange assesses a forum fee of $100 pursuant to Exchange Rule 60, Commentary (a).06.\5\ This forum fee is assessed when a member contests a citation imposed pursuant to Rule 60 and the citation is upheld by the reviewing body. Additionally, the
Exchange assesses a $250 fee on members seeking a review of an Options
Exchange Official ruling pursuant to Exchange Rule 124.\6\
Specifically, a member or member organization seeking the Referee's review of a Floor Official ruling concerning the nullification or adjustment of a trade would be assessed a fee of $250 for each Floor
Official ruling they seek to have reviewed if the Referee upholds the
Floor Official decision. No fee would be assessed to the member or member organization seeking a review if the Floor Official decision is overturned or modified. These fees do not currently appear on the
Exchange's Fee Schedule. The Exchange proposes to list these fees, which are currently in effect, on the Fee Schedule in order to provide additional notice to members of these fees, which exist in the Exchange
Rules.
\5\ See Securities Exchange Act Release No. 61207 (December 18, 2009), 74 FR 69185 (December 30, 2009) (SR-Phlx-2009-84).
\6\ See Securities Exchange Act Release No. 53548 (March 24, 2006), 71 FR 16389 (March 31, 2006) (SR-Phlx-2005-42).
The Exchange also proposes to make a technical modification to the
Fee Schedule by moving the location of the Options Regulatory Fee on the Fee Schedule and creating a separate text box for that fee for purposes of clarity. The proposed changes to the Fee Schedule will be effective for transactions settling on or after February 1, 2010. 2. Statutory Basis
The Exchange believes that its proposal to amend its schedule of fees is consistent with Section 6(b) of the Act \7\ in general, and furthers the objectives of Section 6(b)(4) of the Act \8\ in particular, in that it is an equitable allocation of reasonable fees and other charges among Exchange members. The Exchange believes that members will benefit from the reduced Monthly Cap and the proposed amendment to the calculation of the monthly cap in that a greater number of members will be able to qualify for the Monthly Cap and this would decrease fees to members. Also, the addition of the appeal fees should provide additional notice to members of these fees.
\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(4).
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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.
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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.
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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 \9\ and paragraph (f)(2) of Rule 19b-4 \10\ thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate 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.
\9\ 15 U.S.C. 78s(b)(3)(A)(ii).
\10\ 17 CFR 240.19b-4(f)(2).
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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 e-mail to rule-comments@sec.gov. Please include
File Number SR-Phlx-2010-16 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-2010-16. This file number should be included on the subject line if e-mail 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
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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 a.m. and 3 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-2010-16 and should be submitted on or before March 19, 2010.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\11\
\11\ 17 CFR 200.30-3(a)(12).
Florence E. Harmon,
Deputy Secretary.
FR Doc. 2010-3947 Filed 2-25-10; 8:45 am
BILLING CODE 8011-01-P
