Federal Register / Vol. 77, No. 5 / Monday, January 9, 2012 / Notices 1103 

16 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The term ‘‘Professional Order’’ means an order 

that is for the account of a person or entity that is 

not a Priority Customer. See ISR Rule 100(a)(37C). 

4The term ‘‘Non-ISE Market Maker’’ means a 

market maker as defined in Section 3(a)(38) of the 

Securities Exchange Act of 1934 (the ‘‘Act’’) 

registered in the same options class on another 

options exchange. See Schedule of Fees, page 4. 

5The term ‘‘market makers’’ refers to 

‘‘Competitive Market Makers’’ and ‘‘Primary Market 

Makers’’ collectively. See ISE Rule 100(a)(25). 

6The Select Symbols are identified by their ticker 

symbol on the Exchange’s Schedule of Fees. 

7See Securities Exchange Act Release No. 65548 

(October 13, 2011), 76 FR 64980 (October 19, 2011) 

(SR–ISE–2011–39). 

8See Securities Exchange Act Release No. 65958 

(December 15, 2011) (SR–ISE–2011–81). 

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–C2– 

2011–041 and should be submitted on 

or before January 30, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–97 Filed 1–6–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66084; File No. SR–ISE– 

2011–84] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change Relating to Fees for Certain 

Complex Orders Executed on the 

Exchange 

January 3, 2012. 

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

Securities Exchange Act of 1934 (the 

‘‘Exchange Act’’ or the ‘‘Act’’) 1 and Rule 

19b–4 thereunder,2 notice is hereby 

given that, on December 20, 2011, the 

International Securities Exchange, LLC 

(the ‘‘Exchange’’ or the ‘‘ISE’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I and II 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 ISE is proposing to amend fees 

for certain complex orders executed on 

the Exchange. The text of the proposed 

rule change is available on the 

Exchange’s Web site (http:// 

www.ise.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 

self-regulatory organization 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 self-regulatory organization 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 proposed rule 

change is to amend fees charged by the 

Exchange for certain orders on two of 

the most actively-traded index option 

products, the NASDAQ 100 Index 

option (‘‘NDX’’) and the Russell 2000 

Index option (‘‘RUT’’). 

For trading in NDX and RUT, for both 

regular and complex orders, the 

Exchange currently charges $0.20 per 

contract for firm proprietary orders and 

Customer (Professional Orders), 3 and 

$0.45 per contract for Non-ISE Market 

Maker 4 orders. ISE market maker 

orders 5 in these two symbols are subject 

to a sliding scale, ranging from $0.01 per 

contract to $0.18 per contract, 

depending on the amount of overall 

volume traded by a market maker 

during a month. Market makers also 

currently pay a payment for order flow 

(PFOF) fee of $0.65 per contract when 

trading against Priority Customers. 

Priority Customer orders are not charged 

for trading in NDX and RUT. Options on 

NDX and RUT are traded on the 

Exchange pursuant to a license 

agreement entered into by the Exchange 

with index providers for NDX and RUT. 

In addition to the fees noted above, the 

Exchange currently charges ISE market 

maker orders, Non-ISE Market Maker 

orders and firm proprietary orders $0.22 

per contract and $0.15 per contract for 

NDX and RUT, respectively, to defray 

the licensing costs. Because of 

competitive pressures in the industry, 

certain customer orders are not charged 

this surcharge fee. The Exchange’s 

current fee schedule notes that Public 

Customer Orders are excluded from this 

surcharge fee. Historically, Public 

Customer orders were synonymous with 

retail customer orders. The Exchange 

now distinguishes retail customers from 

professional customers, the latter being 

professional traders who are not market 

makers or broker/dealers but behave the 

way that market makers and broker/ 

dealers do. Orders from these customers 

are identified on the Exchange as 

Professional Orders. Orders from retail 

customers are identified on the 

Exchange as Priority Customer orders. 

Thus, for the sake of clarity, the 

Exchange proposes to replace the words 

‘‘Public’’ with ‘‘Priority’’ for all the 

surcharge fees that appear on the 

Exchange’s fee schedule. Thus, Priority 

Customer orders will remain exempt 

from this fee, while Professional Orders 

will be subject to the fee. 

The Exchange currently assesses a per 

contract transaction fee to market 

participants that add or remove 

liquidity in the Complex Order Book 

(‘‘maker/taker fees’’) in symbols that are 

in the Penny Pilot program. Included 

therein is a subset of 103 symbols that 

are assessed a slightly higher taker fee 

(the ‘‘Select Symbols’’).6 Additionally, 

pursuant to SEC approval which allows 

market makers to enter quotations for 

complex order strategies in the Complex 

Order Book,7 the Exchange recently 

adopted maker/taker fees and rebates for 

orders in the following three symbols: 

XOP, XLB and EFA.8

The Exchange now proposes to extend 

its maker/taker fees and rebates to 

complex orders in NDX and RUT. 

Specifically, for Customer (Professional 

Orders), firm proprietary and ISE market 

maker orders, ISE proposes to adopt a 

‘‘make’’ fee of $0.25 per contract and a 

‘‘take’’ fee of $0.70 per contract. For 

Non-ISE Market Maker orders, ISE 

proposes to adopt a ‘‘make’’ fee of $0.25 

per contract and a ‘‘take’’ fee of $0.75 

per contract. For crossing complex 

orders in NDX and RUT, i.e., orders 

executed in the Exchange’s Facilitation 

Mechanism, Solicited Order 

Mechanism, Block Order Mechanism 

and Price Improvement Mechanism, and 


tkelley on DSK3SPTVN1PROD with NOTICES
1104 Federal Register / Vol. 77, No. 5 / Monday, January 9, 2012 / Notices 

9A response to a special order is any contra-side 

interest submitted after the commencement of an 

auction in the Exchange’s Facilitation Mechanism, 

Solicited Order Mechanism, Block Order 

Mechanism and Price Improvement Mechanism. 

This fee applies to Market Maker, Non-ISE Market 

Maker, Firm Proprietary and Customer 

(Professional) interest. 

10See Securities Exchange Act Release No. 64270 

(April 8, 2011), 76 FR 20754 (April 13, 2011) (SR– 

ISE–2011–13). 

11See Securities Exchange Act Release Nos. 

65087 (August 10, 2011), 76 FR 50783 (August 16, 

2011) (SR–ISE–2011–47); 65583 (October 18, 2011), 

76 FR 65555 (October 21, 2011) (SR–ISE–2011–68); 

65705 (November 8, 2011), 76 FR 70789 (November 

15, 2011) (SR–ISE–2011–70); and 65898 (December 

6, 2011), 76 FR 77279 (December 12, 2011) (SR– 

ISE–2011–78). 

12See Securities Exchange Act Release No. 65958 

(December 15, 2011) (SR–ISE–2011–81). 

13 15 U.S.C. 78f(b). 

14 15 U.S.C. 78f(b)(4). 

for Qualified Contingent Cross orders, 

the Exchange currently charges a fee of 

$0.20 per contract. The Exchange 

proposes to continue charging a fee of 

$0.20 per contract for crossing complex 

orders in NDX and RUT. The Exchange 

currently does not charge Priority 

Customers for crossing orders executed 

in NDX and RUT. The Exchange 

proposes to continue not charging 

Priority Customers for crossing orders 

executed in NDX and RUT. For 

responses to special orders,9 ISE 

proposes to adopt a fee of $0.70 per 

contract for Customer (Professional 

Orders), firm proprietary and ISE market 

maker orders. For Non-ISE Market 

Maker orders, ISE proposes to adopt a 

fee of $0.75 per contract for responses 

to special orders in NDX and RUT. 

Further, for Priority Customer 

complex orders in symbols that are in 

the Penny Pilot program, the Exchange 

currently provides a per contract rebate 

when these orders trade with noncustomer orders in the Complex Order 

Book. The Exchange proposes to extend 

this rebate incentive for NDX and RUT 

also. As such, the Exchange proposes to 

adopt a rebate of $0.50 per contract for 

Priority Customer complex orders in 

NDX and RUT when these orders trade 

with non-customer orders in the 

Complex Order Book. 

The Exchange currently provides ISE 

market makers with a two cent discount 

when trading against orders that are 

preferenced to them. The Exchange 

proposes to extend this discount for 

preferenced complex orders in NDX and 

RUT. Accordingly, ISE market makers 

who remove liquidity in NDX and RUT 

from the Complex Order Book will be 

charged $0.68 per contract when trading 

with orders that are preferenced to 

them. 

With the proposed migration of NDX 

and RUT to the Exchange’s complex 

order maker/taker pricing structure, the 

Exchange proposes to no longer charge 

a PFOF fee for complex orders in these 

two symbols. The cancellation fee, 

however, which only applies to Priority 

Customer orders, will continue to apply. 

As the Exchange is proposing to adopt 

a new table for this proposed fee 

change, the Exchange notes that: 

• Fees for orders in NDX and RUT 

executed in the Exchange’s Facilitation, 

Solicited Order, Price Improvement and 

Block Order Mechanisms are for 

contracts that are part of the originating 

or contra order. 

• Complex orders in NDX and RUT 

executed in the Facilitation and 

Solicited Order Mechanisms are charged 

fees only for the leg of the trade 

consisting of the most contracts. 

• As noted above, the PFOF fees will 

not be collected for complex orders in 

NDX and RUT. 

• As noted above, the cancellation 

fee, which only applies to Priority 

Customer orders, will continue to apply 

to NDX and RUT. 

• The Exchange currently has a fee 

cap, with certain exclusions, applicable 

to transactions executed in a member’s 

proprietary account. The cap also 

applies to crossing transactions for the 

account of entities affiliated with a 

member. The Exchange also has a 

service fee applicable to all QCC and 

non-QCC transactions that are eligible 

for the fee cap.10 This fee cap will 

continue to apply to executions of 

complex orders in NDX and RUT. 

• The Exchange currently has tiered 

rebates to encourage members to submit 

greater number [sic] of QCC orders and 

Solicitation orders to the Exchange. 

Once a member reaches a certain 

volume threshold in QCC orders and/or 

Solicitation orders during a month, the 

Exchange provides a rebate to that 

member for all of its QCC and 

Solicitation traded contracts for that 

month.11 These tiered rebates will 

continue to apply. 

• As noted above, the Exchange 

currently charges a license surcharge fee 

of $0.22 per contract and $0.15 per 

contract for trading in options on NDX 

and RUT, respectively. This license 

surcharge will continue to apply to all 

orders except for Priority Customer 

orders. 

With this proposed rule change, all 

non-customer orders will be assessed 

similar fees, thus eliminating the gap 

that currently exists between market 

makers and non-market makers when 

trading complex orders today. The 

proposed fees are consistent with the 

fees and rates of payment for order flow 

commonly applied to symbols that are 

not part of the Penny Pilot program. At 

the proposed levels, ISE market makers 

will in fact see their fees lowered 

compared to current levels, which 

include a transaction fee and a $0.65 per 

contract PFOF fee, while at the same 

time equitably distributing the costs of 

attracting complex orders. The 

Exchange’s maker/taker fees and rebates 

for complex orders in Penny Pilot 

symbols has proven to be an effective 

method of attracting order flow to the 

Exchange. The Exchange believes that 

extending its maker/taker fees and 

rebates for complex orders to NDX and 

RUT, which are two of the most 

actively-traded index option products, 

will assist the Exchange in recovering 

lost market share in these two products. 

The Exchange believes this proposed 

rule change will also serve to enhance 

the Exchange’s competitive position and 

enable it to attract additional complex 

order volume in these two symbols 

because both NDX and RUT are highpriced index options and a very 

substantial portion of the volume traded 

in high-priced index options occurs in 

complex orders. 

The Exchange also proposes to make 

a non-substantive, clarifying change in 

two footnotes on the Exchange’s 

Schedule of Fees. Specifically, the 

Exchange recently adopted language in 

footnotes 7 and 12 on pages 19 and 20 

of the Exchange’s current Schedule of 

Fees, respectively, related to rebates and 

fees for certain complex orders executed 

on the Exchange.12 The Exchange now 

proposes to add the words ‘Priority 

Customer’ in front of ‘orders’ to clarify 

that ISE market makers will receive a 

discounted rate when they trade against 

Priority Customer orders that are 

preferenced to them. 

The Exchange proposes to make these 

fee changes operative on January 3, 

2012. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its Schedule of Fees 

is consistent with Section 6(b) of the 

Act 13 in general, and furthers the 

objectives of Section 6(b)(4) of the Act 14

in particular, in that it is an equitable 

allocation of reasonable dues, fees and 

other charges among Exchange members 

and other persons using its facilities. 

The impact of the proposal upon the net 

fees paid by a particular market 

participant will depend on a number of 

variables, most important of which will 

be its propensity to add or remove 

liquidity in NDX and RUT in the 

Complex Order Book. 

The Exchange believes it is reasonable 

and equitable to charge all market 


tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 77, No. 5 / Monday, January 9, 2012 / Notices 1105 

15See Securities Exchange Act Release No. 65958 

(December 15, 2011) (SR–ISE–2011–81). 16See BOX Fee Schedule, Sections 4 and 7. 17 15 U.S.C. 78s(b)(3)(A)(ii). 

participants (except Priority Customers) 

trading in complex orders in NDX and 

RUT a standardized ‘make’ fee of $0.25 

per contract. The Exchange currently 

charges a standardized ‘make’ fee of 

$0.32 per contract for complex orders in 

certain symbols when these orders trade 

against Priority Customer orders.15 The 

Exchange further believes it is 

reasonable and equitable to charge ISE 

market maker, firm proprietary and 

Customer (Professional) orders a ‘take’ 

fee of $0.70 per contract ($0.75 per 

contract for Non-ISE Market Maker 

orders) for complex orders in NDX and 

RUT because the Exchange is seeking to 

recoup the cost associated with paying 

an increased rebate of $0.50 per contract 

to these market participants. The 

Exchange believes it is reasonable and 

equitable to charge ISE market maker, 

firm proprietary and Customer 

(Professional) orders a fee of $0.70 per 

contract ($0.75 per contract for Non-ISE 

Market Maker orders) when such 

members are responding to special 

orders because a response to a special 

order is akin to taking liquidity, thus the 

Exchange is proposing to adopt an 

identical fee for taking liquidity in these 

two symbols. The Exchange has 

historically maintained a differential in 

the fees it charges ISE market makers 

from those it charges to Non-ISE Market 

Makers. The Exchange believes it is 

reasonable and equitable to treat these 

two groups of market participants 

differently because each has different 

commitments and obligations to the 

Exchange. ISE market makers, in 

particular, have quoting obligations and 

pay the Exchange non-transaction fees. 

Non-ISE Market Makers do not have any 

such obligations or financial 

commitments. 

The Exchange further believes it is 

reasonable and equitable for the 

Exchange to charge a fee of $0.20 per 

contract for complex orders in NDX and 

RUT executed in the Exchange’s various 

auctions and for Qualified Contingent 

Cross orders because these fees are 

identical to the fees the Exchange 

currently charges for similar orders in 

the symbols that are subject to the 

Exchange’s maker/taker fees. 

Additionally, the Exchange believes 

its proposed fees remain competitive 

with fees charged by other exchanges 

and are therefore reasonable and 

equitably allocated to those members 

that opt to direct orders to the Exchange 

rather than to a competing exchange. 

For example, the $0.70 per contract 

complex order ‘take’ fee in NDX and 

RUT proposed by the Exchange for 

market maker, firm proprietary and 

Customer (Professional) orders remains 

lower than that charged by the Boston 

Options Exchange (‘‘BOX’’). For a 

similar order, BOX charges both a 

transaction fee, which ranges anywhere 

from $0.13 per contract to $0.25 per 

contract, and a fee for adding liquidity 

in non-Penny Pilot classes of $0.65 per 

contract, for an ‘all-in’ rate of $0.90 or 

more per contract.16

The Exchange believes that it is 

reasonable and equitable to provide a 

rebate for Priority Customer complex 

orders when these orders trade with 

non-customer orders in the Complex 

Order Book because paying a rebate 

would continue to attract additional 

order flow to the Exchange and create 

liquidity in the symbols that are subject 

to the rebate, which the Exchange 

believes ultimately will benefit all 

market participants who trade on ISE. 

The Exchange already provides this 

rebate and is now proposing to increase 

the rebate for NDX and RUT, which the 

Exchange believes will attract greater 

order flow of complex orders in these 

two symbols. 

The Exchange also believes that it is 

reasonable and equitable to provide a 

two cent discount to ISE market makers 

on preferenced orders because this will 

provide an incentive for market makers 

to quote in the Complex Order Book. 

The complex order pricing employed 

by the Exchange has proven to be an 

effective pricing mechanism and 

attractive to members and their 

customers. The Exchange believes that 

adopting maker/taker fees and rebates 

for complex orders in NDX and RUT 

will attract additional complex order 

business in these two symbols. The 

Exchange further believes that the 

proposed fees are not unfairly 

discriminatory because the fee structure 

is consistent with fee structures that 

exist today at other options exchanges. 

Additionally, the Exchange believes that 

the proposed fees are fair, equitable and 

not unfairly discriminatory because they 

are consistent with price differentiation 

that exists today at other option 

exchanges. The Exchange believes it 

remains an attractive venue for market 

participants to trade complex orders as 

its fees remain competitive with those 

charged by other exchanges for similar 

trading strategies. The Exchange 

operates in a highly competitive market 

in which market participants can 

readily direct order flow to another 

exchange if they deem fee levels at a 

particular exchange to be excessive. 

With this proposed fee change, the 

Exchange believes it remains an 

attractive venue for market participants 

to trade complex orders. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The proposed rule change does not 

impose any burden on competition that 

is not necessary or appropriate in 

furtherance of the purposes of the 

Exchange Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange has not solicited, and 

does not intend to solicit, comments on 

this proposed rule change. The 

Exchange has not received any 

unsolicited written comments from 

members or other interested parties. 

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 Exchange Act.17 At 

any time within 60 days of the filing of 

such 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 Exchange 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–ISE–2011–84 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. 


tkelley on DSK3SPTVN1PROD with NOTICES
1106 Federal Register / Vol. 77, No. 5 / Monday, January 9, 2012 / Notices 

18 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The term ‘‘Select Symbols’’ refers to the symbols 

which are subject to the Rebates and Fees for 

Adding and Removing Liquidity in Section I of the 

Exchange’s Fee Schedule. 

4Section II includes options overlying equities, 

ETFs, ETNs, indexes and HOLDRs which are 

Multiply Listed. 

5 15 U.S.C. 78f(b). 

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

All submissions should refer to File 

Number SR–ISE–2011–84. 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–ISE– 

2011–84 and should be submitted on or 

before January 30, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–99 Filed 1–6–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66085; File No. SR–Phlx– 

2011–180] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to the 

Rebates and Fees for Adding and 

Removing Liquidity in Select Symbols 

January 3, 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 December 

21, 2011, 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 amend 

Section I of the Exchange’s Fee 

Schedule titled ‘‘Rebates and Fees for 

Adding and Removing Liquidity in 

Select Symbols,’’ specifically to amend 

the Select Symbols.3

While changes to the Fee Schedule 

pursuant to this proposal are effective 

upon filing, the Exchange has 

designated these changes to be operative 

on January 3, 2011. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://nasdaqtrader.com/ 

micro.aspx?id=PHLXfilings, 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 purpose of the proposed rule 

change is to amend the list of Select 

Symbols in Section I of the Exchange’s 

Fee Schedule, entitled ‘‘Rebates and 

Fees for Adding and Removing 

Liquidity in Select Symbols’’ in order to 

attract additional order flow to the 

Exchange. 

The Exchange displays a list of Select 

Symbols in its Fee Schedule at Section 

I, ‘‘Rebates and Fees for Adding and 

Removing Liquidity in Select Symbols,’’ 

which are subject to the rebates and fees 

in that section. The Exchange is 

proposing to delete Market Vectors 

Semiconductor ET (‘‘SMH’’) from the 

list of Select Symbols. SMH would be 

subject to the rebates and fees in Section 

II of the Fee Schedule entitled ‘‘Equity 

Options Fees.’’ 4

While changes to the Fee Schedule 

pursuant to this proposal are effective 

upon filing, the Exchange has 

designated these changes to be operative 

on January 3, 2011. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its Fee Schedule is 

consistent with Section 6(b) of the Act 5

in general, and furthers the objectives of 

Section 6(b)(4) of the Act 6 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 remove SMH from its list 

of Select Symbols to attract additional 

order flow to the Exchange. The 

Exchange believes that applying the fees 

in Section II of the Fee Schedule to 

SMH, including the opportunity to 

receive payment for order flow, will 

attract order flow to the Exchange. 

The Exchange believes that it is 

equitable and not unfairly 

discriminatory to amend its list of Select 

Symbols to remove SMH because the 

list of Select Symbols would apply 

uniformly to all categories of 

participants in the same manner. All 

market participants who trade the Select 

Symbols would be subject to the rebates 

and fees in Section I of the Fee 

Schedule, which would not include 

SMH. Also, all market participants 

would be uniformly subject to the fees 

in Section II, which would include 

SMH. 

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. 


tkelley on DSK3SPTVN1PROD with NOTICES