15166 Federal Register / Vol. 77, No. 50 / Wednesday, March 14, 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 changes apply to executions priced at $1 or 

more. Fees and rebates applicable to executions of 

securities priced below $1 remain unchanged. 

4Minimum life orders are orders that may not be 

cancelled for a period of 100 milliseconds following 

entry. 

5 15 U.S.C. 78f. 

6 15 U.S.C. 78f(b)(4) and (5). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–6186 Filed 3–13–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66543; File No. SR–Phlx– 

2012–25] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Modify Fees 

Applicable to the Trading of NMS 

Stocks Through NASDAQ OMX PSX 

March 8, 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 

27, 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, 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to modify the 

fees applicable to trading on the 

NASDAQ OMX PSX system (‘‘PSX’’). 

The text of the proposed rule change is 

available on the Exchange’s Web site at 

http://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 

Phlx is amending its fee and credit 

schedule for transaction executions on 

PSX. Specifically, Phlx is introducing 

reduced fees for accessing liquidity in 

securities listed on the New York Stock 

Exchange (‘‘Tape A Securities’’), along 

with correspondingly reduced rebates 

for liquidity provision in Tape A 

Securities.3 Currently, PSX charges 

$0.0027 per share executed to members 

accessing liquidity in any security 

traded by the Exchange. Under the 

proposed rule change, the fee will be 

reduced to $0.0019 per share executed 

for Tape A Securities. However, to keep 

the Exchange’s rebates for liquidity 

provision in line with the reduced fee 

to access liquidity, the Exchange will 

also make reductions in the rebates for 

Tape A Securities. Currently, the 

liquidity provider rebate is $0.0026 per 

share executed with respect to orders 

with an original displayed size of 2,000 

or more shares, and is also $0.0026 with 

respect to liquidity provided by 

minimum life orders.4 Under the 

proposed rule change, this rebate will be 

reduced to $0.0018 per share executed 

for Tape A Securities. The rebate for 

orders with an original displayed size of 

less than 2,000 shares is currently 

$0.0024 per share executed, and will be 

reduced to $0.0016 per share executed 

for Tape A Securities. The rebate for 

non-displayed orders is currently 

$0.0010 per share executed, and will be 

reduced to $0.0005 per share executed 

for Tape A Securities. 

The change is designed to encourage 

greater use of PSX for the purpose of 

trading Tape A Securities. Specifically, 

although PSX has market participants 

that post liquidity in Tape A Securities 

with regularity, Phlx believes that the 

extent to which market participants 

direct liquidity-seeking orders to PSX 

may be limited by its current fees. 

Accordingly, Phlx believes that a 

reduction in the fee to access liquidity 

will encourage more market participants 

to seek available liquidity at PSX. 

Moreover, Phlx further believes that any 

disincentive to post liquidity caused by 

a reduction in the rebates for Tape A 

Securities will be offset by a heightened 

expectation of prompt execution created 

by the reduced fee for liquidityaccessing orders. 

2. Statutory Basis 

Phlx believes that the proposed rule 

change is consistent with the provisions 

of Section 6 of the Act,5 in general, and 

with Sections 6(b)(4) and (5) of the Act,6

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 Phlx operates 

or controls, and is not designed to 

permit unfair discrimination between 

customers, issuers, brokers or dealers. 

All similarly situated members are 

subject to the same fee structure, and 

access to Phlx is offered on fair and nondiscriminatory terms. 

The proposed new fee and rebate 

structure for members that use Phlx to 

trade Tape A Securities is reasonable 

because it will result in a reduction of 

fees for members that access liquidity, 

which in turn will benefit members that 

post liquidity by providing greater 

certainty of execution for their posted 

orders. Phlx believes that this increased 

certainty of execution will continue to 

encourage members to post liquidity at 

PSX, notwithstanding the associated 

reduction in liquidity provider rebates. 

Moreover, because the fee charged to 

access liquidity funds the payment of a 

rebate to liquidity providers, Phlx does 

not believe that it would be reasonable 

to require an exchange that opts to 

reduce access fees to maintain preexisting higher rebates. 

Moreover, the proposed change is 

consistent with an equitable allocation 

of fees because it is designed to promote 

a more active market for Tape A 

Securities on PSX, thereby benefitting 

all members that seek to trade such 

securities through the Exchange. 

Specifically, the change is equitable to 

members that seek to access liquidity 

because it will reduce the fees that they 

pay, and equitable to members that 

provide liquidity because it will 

increase the likelihood of posted orders 

executing. Similarly, to the extent that 

the proposed change is successful in 

encouraging greater use of PSX for 

trading Tape A Securities, it will 

enhance market quality for all market 

participants. Finally, Phlx believes that 

the change is not unfairly 

discriminatory because the price 

reduction offered is available to all 

members that access liquidity in Tape A 

Securities. Similar pricing incentives 

that focus on securities listed on 

particular listing venues are not 


srobinson on DSK4SPTVN1PROD with NOTICES
Federal Register / Vol. 77, No. 50 / Wednesday, March 14, 2012 / Notices 15167 

7See, e.g., Securities Exchange Act Release No. 

66322 (February 3, 2012), 77 FR 6831 (February 9, 

2012) (SR–NASDAQ–2012–020) (pricing incentives 

focused on securities listed on exchanges other than 

The NASDAQ Stock Market or NYSE). 

8 15 U.S.C. 78s(b)(3)(A)(ii). 

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

uncommon,7 and provide means by 

which venues such as Phlx may 

compete more effectively with listing 

venues such as NYSE. 

Finally, Phlx 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. In such an environment, Phlx 

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. Phlx believes 

that the proposed rule change reflects 

this competitive environment because it 

is designed to create pricing incentives 

for trading Tape A Securities through 

PSX. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

Phlx does not believe that the 

proposed rule change will result in any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, as amended. 

Because the market for order execution 

is extremely competitive, members may 

readily opt to disfavor Phlx’s execution 

services if they believe that alternatives 

offer them better value. The proposed 

change is designed to enhance 

competition by using pricing incentives 

to encourage trading of Tape A 

Securities through PSX. 

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.8 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 

No. SR–Phlx–2012–25 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 No. 

SR–Phlx–2012–25. 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 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 No. SR–Phlx–2012– 

25 and should be submitted on or before 

April 4, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–6184 Filed 3–13–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66540; File No. SR– 

NASDAQ–2012–031] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Supplemental Orders 

March 8, 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 

27, 2012, The NASDAQ Stock Market 

LLC (‘‘NASDAQ’’ or ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

The Exchange proposes to introduce 

the ‘‘Supplemental Order’’ for use on 

NASDAQ. The text of the proposed rule 

change is available on the Exchange’s 

Web site at http:// 

nasdaq.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. 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. 


srobinson on DSK4SPTVN1PROD with NOTICES