13162 Federal Register / Vol. 77, No. 43 / Monday, March 5, 2012 / Notices 

11 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A)(ii). 

4 17 CFR 240.19b–4(f)(2). 

5A Specialist is an Exchange member who is 

registered as an options specialist pursuant to Rule 

1020(a). 

the current rules that govern the topics 

currently identified in outdated rule 

references in the Minor Rule Violation 

Plan as well as adding additional 

elements of the rules governing DMM 

conduct. 

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 that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve or disapprove 

such proposed rule change, or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

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 rulecomments@sec.gov. Please include File 

Number SR–NYSEAmex–2012–10 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–NYSEAmex–2012–10. 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 

a.m. and 3 p.m. Copies of the 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– 

NYSEAmex–2012–10 and should be 

submitted on or before March 26, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–5205 Filed 3–2–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66484; File No. SR–Phlx– 

2012–24] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NASDAQ 

OMX PHLX LLC To Adopt an 

Administrative Fee for the Payment for 

Order Flow Program 

February 28, 2012. 

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 

21, 2012, 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 and 

II below, which Items have been 

prepared by the Exchange. The 

Exchange has designated this proposal 

as one establishing or changing a due, 

fee, or other charge imposed by Phlx 

under Section 19(b)(3)(A)(ii) of the Act 3

and Rule 19b–4(f)(2) thereunder,4 which 

renders the proposal effective upon 

filing with the Commission. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend its 

payment for order flow program. Phlx 

proposes to amend Section II of its Fee 

Schedule to adopt an administrative fee, 

as described further below. While 

changes to the Fee Schedule pursuant to 

this proposal are effective upon filing, 

the Exchange has designated these 

changes to be operative on March 1, 

2012. The text of the proposed rule 

change is available on the Exchange’s 

Web site at http:// 

www.nasdaqtrader.com/ 

micro.aspx?id=PHLXRulefilings, 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange currently has a 

payment-for-order-flow (‘‘PFOF’’) 

program that helps its Specialists 5 and 

Directed Registered Options Traders 


erowe on DSK2VPTVN1PROD with NOTICES
Federal Register / Vol. 77, No. 43 / Monday, March 5, 2012 / Notices 13163 

6A Registered Option Trader is defined in 

Exchange Rule 1014(b) as a regular member of the 

Exchange located on the trading floor who has 

received permission from the Exchange to trade in 

options for his own account. See Exchange Rule 

1014(b)(i) and (ii). A ‘‘Directed ROT’’ is an ROT 

who is a Directed Participant. The term ‘‘Directed 

Participant’’ applies to transactions for the account 

of a Specialist or ROT resulting from a customer 

order that is (1) directed to it by an order flow 

provider, and (2) executed by it electronically on 

Phlx XL II. 

7See Securities Exchange Act Release No. 59841 

(April 29, 2009), 74 FR 21035 (May 6, 2009) (SR– 

Phlx–2009–38). 

8 15 U.S.C. 78f(b). 

9 15 U.S.C. 78f(b)(4). 

10 15 U.S.C. 78s(b)(3)(A). 

11 17 CFR 240.19b–4(f)(2). 

(‘‘Directed ROTs’’) 6 establish PFOF 

arrangements with an order flow 

provider in exchange for that order flow 

provider directing some or all of its 

order flow to that Specialist or Directed 

ROT. This program is funded through 

fees paid by Registered Options Traders 

(‘‘ROTs’’), Specialists and Directed 

ROTs and assessed on transactions 

resulting from customer orders (the 

‘‘PFOF Fees’’).7

These PFOF Fees are available to be 

disbursed by the Exchange according to 

the instructions of the Specialist units/ 

Specialists or Directed ROTs to order 

flow providers who are members or 

member organizations who submit, as 

agent, customer orders to the Exchange 

through a member or member 

organization who is acting as agent for 

those customer orders. Any excess 

payment for order flow funds billed but 

not utilized by the Specialist or Directed 

ROT are carried forward unless the 

Directed ROT or Specialist elects to 

have those funds rebated to the 

applicable ROT, Directed ROT or 

Specialist on a pro rata basis, reflected 

as a credit on the monthly invoices. At 

the end of each calendar quarter, the 

Exchange calculates the amount of 

excess funds from the previous quarter 

and subsequently rebates excess funds 

on a pro-rata basis to the applicable 

ROT, Directed ROT or Specialist who 

paid into that pool of funds. 

The Exchange now proposes to adopt 

an administrative fee to offset its costs 

in administering the PFOF program. 

Specifically, Phlx proposes to assess an 

administrative fee of 0.45% of the total 

amount of PFOF Fees collected each 

month. Phlx will closely monitor the 

amount of funds raised by this 

administrative fee and amend the fee in 

the future if necessary, so that the fee 

provides sufficient funds to adequately 

offset Phlx’s costs in administering the 

PFOF program. 

Phlx proposes to implement this fee 

beginning on March 1, 2012. Phlx is not 

making any other changes to its PFOF 

program. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its Fee Schedule is 

consistent with Section 6(b) of the Act 8

in general, and furthers the objectives of 

Section 6(b)(4) of the Act 9 in particular, 

in that it is an equitable allocation of 

reasonable fees and other charges among 

Exchange members and other persons 

using its facilities. 

The Exchange believes that it is 

reasonable to assess the administrative 

fee in that it should permit the 

Exchange to offset its costs in 

administering the PFOF program. As 

noted above, the Exchange will closely 

monitor the amount of funds raised by 

this administrative fee and amend the 

fee in the future if necessary, so that the 

fee provides sufficient funds to 

adequately offset the Exchange’s costs in 

administering the PFOF program. 

The Exchange believes that it is 

equitable and not unfairly 

discriminatory to assess the 

administrative fee because it would 

apply uniformly to all funds collected 

under the PFOF program as a means to 

offset costs of collecting and 

administering such funds. 

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. 

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 

Because the foregoing proposed rule 

change establishes a due, fee, or other 

charge imposed by the Exchange, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 10 and 

subparagraph (f)(2) of Rule 19b–4 11

thereunder. 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. 

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 rulecomments@sec.gov. Please include File 

Number SR–Phlx–2012–24 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-2012–24. 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 

a.m. and 3 p.m. Copies of the 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– 

2012–24 and should be submitted on or 

before March 26, 2012. 


erowe on DSK2VPTVN1PROD with NOTICES
13164 Federal Register / Vol. 77, No. 43 / Monday, March 5, 2012 / Notices 

12 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3The Commission has modified the text of the 

summaries prepared by FICC. 

4The GSD rules define ‘‘Cap’’ as any Debit 

Forward Mark Adjustment Payment or Credit 

Forward Mark Adjustment Payment up to a dollar 

amount, as determined by FICC from time to time, 

that is automatically collected from or paid to the 

Repo Broker, as applicable. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–5206 Filed 3–2–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66485; File No. SR–FICC– 

2012–01] 

Self-Regulatory Organizations; Fixed 

Income Clearing Corporation; Notice of 

Filing of Proposed Rule Change To 

Make a Technical Correction to the 

Rule Relating to the Calculation of 

Funds-Only Settlement Amounts for 

Repo Brokers 

February 28, 2012. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 2 thereunder 

notice is hereby given that on February 

14, 2012, the Fixed Income Clearing 

Corporation (‘‘FICC’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

primarily by FICC. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The proposed rule change consists of 

modifications to Rule 19, Section 4 of 

the rules of the Government Securities 

Division (‘‘GSD’’) of FICC. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

FICC 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. FICC has prepared 

summaries, set forth in sections A, B, 

and C below, of the most significant 

aspects of such statements.3

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

The purpose of this filing is to make 

technical corrections to GSD Rule 19 

(Special Provisions For Brokered Repo 

Transactions), Section 4 (Calculations of 

Funds-Only Settlement Amounts for 

Repo Brokers) as described below. GSD 

Rule 19, Section 4 states that FICC may 

retain any amount of a Credit Forward 

Mark Adjustment Payment that is in 

excess of the Cap 4 and that interest 

earned on such amount shall be paid to 

the Repo Broker on the subsequent 

business day. The second part of this 

sentence is incorrectly stated because 

FICC pays interest to those who were 

debited forward mark adjustment 

amounts not those who were credited 

such amounts. On the following day 

(i.e., the day after the broker received 

the Credit Forward Mark Adjustment 

Payment) when the broker is debited the 

interest for the use of funds it received 

as a credit, the broker will be debited 

the interest on the amount that it 

actually received as a credit (i.e., it will 

not be debited interest for the amount of 

Credit payment withheld above the 

Cap). The rule is also revised to state 

that Repo Brokers with more than one 

Segregated Repo Account must 

aggregate Debit Forward Mark 

Adjustments and Credit Forward Mark 

Adjustment Payments in those accounts 

for purposes of the Cap. The Repo 

Brokers currently comply with this 

correction and the revision reflects 

current practice. 

FICC believes that the proposed rule 

change is consistent with Section 17A of 

the Act and the rules and regulations 

thereunder because it makes technical 

corrections to its rules to ensure that 

they are consistent and accurate. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

FICC does not believe that the 

proposed rule change will have any 

impact or impose any burden on 

competition. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments relating to the 

proposed rule change have not yet been 

solicited or received. FICC will notify 

the Commission of any written 

comments received by FICC. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the self- regulatory organization 

consents, the Commission will: 

(A) By order approve or disapprove 

the proposed rule change or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

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 rulecomments@sec.gov. Please include File 

Number SR–FICC–2012–01 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–FICC–2012–01. 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., 


erowe on DSK2VPTVN1PROD with NOTICES