3278 Federal Register / Vol. 80, No. 14 / Thursday, January 22, 2015 / Notices 

39For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 

40 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Specialists and Market Makers are subject to a 

‘‘Monthly Market Maker Cap’’ of $550,000 for: (i) 

Electronic and floor Option Transaction Charges; 

(ii) QCC Transaction Fees (as defined in Exchange 

Rule 1080(o) and Floor QCC Orders, as defined in 

1064(e)); and (iii) fees related to an order or quote 

that is contra to a PIXL Order or specifically 

responding to a PIXL auction. The trading activity 

of separate Specialist and Market Maker member 

organizations is aggregated in calculating the 

Monthly Market Maker Cap if there is Common 

Ownership between the member organizations. All 

dividend, merger, short stock interest, reversal and 

conversion, jelly roll and box spread strategy 

executions (as defined in Section II) are excluded 

from the Monthly Market Maker Cap. 

4A Specialist is an Exchange member who is 

registered as an options specialist pursuant to Rule 

1020(a). An options Specialist includes a Remote 

Specialist which is defined as an options specialist 

in one or more classes that does not have a physical 

presence on an Exchange floor and is approved by 

the Exchange pursuant to Rule 501. 

5A ‘‘market maker’’ includes Registered Options 

Traders (Rule 1014(b)(i) and (ii)), which includes 

Streaming Quote Traders (see Rule 1014(b)(ii)(A)) 

and Remote Streaming Quote Traders (see Rule 

1014(b)(ii)(B)). Directed Participants are also market 

makers. 

6This includes options overlying equities, ETFs, 

ETNs and indexes which are Multiply Listed. 

believes that waiver of the operative 

delay is consistent with investor 

protection and the public interest. 

Accordingly, the Commission hereby 

waives the 30-day operative delay and 

designates the proposal operative upon 

filing.39

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 

change 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 rule-comments@

sec.gov. Please include File Number SR– 

NYSEMKT–2015–02 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSEMKT–2015–02. 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 offices 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– 

NYSEMKT–2015–02, and should be 

submitted on or before February 12, 

2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.40

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–00967 Filed 1–21–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74062; File No. SR–Phlx– 

2015–06] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Amendments to Sections II and IV of 

the Pricing Schedule 

January 15, 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 

13, 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

Monthly Market Maker Cap 3 and 

certain transaction fees applicable to 

Specialists 4 and Market Makers 5 that 

have reached the Monthly Market Maker 

Cap, which are located in the 

Exchange’s Pricing Schedule at Section 

II, entitled ‘‘Multiply Listed Options.’’ 6

The Exchange also proposes to make 

conforming and clarifying amendments 

to Section IV, Part A of the Pricing 

Schedule entitled ‘‘PIXL Pricing.’’ 

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. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of this filing is to amend 

certain Specialist and Market Maker 

pricing located in the Exchange’s 

Pricing Schedule in Section II, entitled 

‘‘Multiply Listed Options’’ in order to 


tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 14 / Thursday, January 22, 2015 / Notices 3279 

7PIXL is the Exchange’s price improvement 

mechanism known as Price Improvement XL or 

(PIXLSM). See Rule 1080(n). 

8A member may electronically submit for 

execution an order it represents as agent on behalf 

of a public customer, broker-dealer, or any other 

entity (‘‘PIXL Order’’) against principal interest or 

against any other order (except as provided in Rule 

1080(n)(i)(E)) it represents as agent (‘‘Initiating 

Order’’) provided it submits the PIXL order for 

electronic execution into the PIXL Auction 

(‘‘Auction’’) pursuant to Rule 1080. See Exchange 

Rule 1080(n). Non-Initiating Order interest could be 

a PIXL Auction Responder or a resting order or 

quote that was on the Phlx book prior to the 

auction. 

9A transaction resulting from an order that was 

electronically delivered utilizes Phlx XL. See 

Exchange Rules 1014 and 1080. Electronically 

delivered orders do not include orders transacted 

on the Exchange floor. A transaction resulting from 

an order that is non-electronically-delivered is 

represented on the trading floor by a floor broker. 

See Exchange Rule 1063. All orders will be either 

electronically or non-electronically delivered. 

10The Penny Pilot was established in January 

2007 and was last extended in June 30, 2015. See 

Securities and Exchange Release No. 73688 

(November 25, 2014), 79 FR 71484 (December 2, 

2014) (SR–Phlx–2014–77). 

11Any member or member organization under 

Common Ownership with another member or 

member organization that qualifies for a Customer 

Rebate Tier discount in Section B receives the PIXL 

Initiating Order discount. 

12A Complex electronic auction includes, but is 

not limited to, the Complex Order Live Auction 

(‘‘COLA’’). 

continue to incentivize Specialists and 

Market Makers to transact a greater 

amount of volume on Phlx and bring 

additional liquidity to the Exchange. 

The pricing changes are described in 

further detail below. 

Today, Specialists and Market Makers 

are subject to a Monthly Market Maker 

Cap of $550,000 for: (i) Electronic and 

floor Option Transaction Charges; (ii) 

QCC Transaction Fees (as defined in 

Exchange Rule 1080(o) and Floor QCC 

Orders, as defined in 1064(e)); and (iii) 

fees related to an order or quote that is 

contra to a PIXL 7 Order or specifically 

responding to a PIXL auction.8 The 

trading activity of separate Specialist 

and Market Maker member 

organizations is aggregated in 

calculating the Monthly Market Maker 

Cap if there is Common Ownership 

between the member organizations. All 

dividend, merger, short stock interest, 

reversal and conversion, jelly roll and 

box spread strategy executions (as 

defined in Section II) are excluded from 

the Monthly Market Maker Cap. 

Specialists or Market Makers that (i) 

are on the contra-side of an 

electronically-delivered 9 and executed 

Customer order; and (ii) have reached 

the Monthly Market Maker Cap are 

assessed $0.00 per contract in the 

following symbols: AAPL, BAC, EEM, 

FB, FXI, IWM, QQQ, TWTR, VXX, and 

XLF and $0.17 per contract in Penny 

Pilot Options 10 and Non-Penny Pilot 

Options. 

The Exchange proposes to decrease 

the Monthly Market Maker Cap from 

$550,000 to $500,000 and amend the 

types of trades that qualify for the 

Monthly Market Maker Cap to exclude 

fees specifically responding to a PIXL 

auction. While the Exchange is 

excluding fees related to responding to 

a PIXL auction as eligible transactions to 

reach the Monthly Market Maker Cap, 

the Exchange believes that lowering the 

cap to $500,000 will continue to 

incentivize Specialists and Market 

Makers to transact greater displayed 

liquidity on the Exchange to be eligible 

for the Monthly Market Maker Cap and, 

in turn, will benefit Phlx members and 

the Phlx market. 

The Exchange is also proposing to 

amend the fees applicable to Specialists 

and Market Makers that (i) are on the 

contra-side of an electronicallydelivered and executed Customer order, 

and (ii) have reached the Monthly 

Market Maker Cap to assess: a $0.00 per 

contract Fee for Adding Liquidity in 

Penny Pilot Options; a $0.17 per 

contract Fee for Removing Liquidity in 

Penny Pilot Options; and a $0.17 per 

contract in Non-Penny Pilot Options. 

The Exchange is proposing to amend the 

language to state: ‘‘Specialists or Market 

Makers that (i) are on the contra-side of 

an electronically-delivered and 

executed Customer order, excluding 

responses to a PIXL auction and (ii) 

have reached the Monthly Market Maker 

Cap. . .’’ 

The Exchange would therefore 

exclude responses to a PIXL auction 

from the Monthly Market Maker Cap 

and those responses would be subject to 

the pricing in Section IV, A of the 

Pricing Schedule, as is the case today 

for all other Specialists and Market 

Makers that do not qualify for the 

Monthly Market Maker Cap, as well as 

all other market participants. Today, 

Specialists or Market Makers that are on 

the contra-side of an electronicallydelivered and executed Customer PIXL 

Order and have reached the Monthly 

Market Maker Cap are assessed $0.00 

per contract in the following symbols: 

AAPL, BAC, EEM, FB, FXI, IWM, QQQ, 

TWTR, VXX, and XLF and $0.17 per 

contract in Penny Pilot Options and 

Non-Penny Pilot Options. With this 

proposal, an Initiating Order would be 

assessed $0.07 per contract or $0.05 per 

contract if Customer Rebate Program 

Threshold Volume defined in Section B 

is greater than 100,000 contracts per day 

in a month.11 The Initiating Order Fee 

for Professional, Firm, Broker-Dealer, 

Specialist and Market Maker orders that 

are contra to a Customer PIXL Order 

will be reduced to $0.00 if the Customer 

PIXL Order is greater than 399 contracts. 

Also, with respect to executions in 

Multiply-Listed Options, when the PIXL 

Order is contra to the Initiating Order a 

Customer PIXL Order will be assessed 

$0.00 per contract and non-Customer 

PIXL Orders will be assessed $0.30 per 

contract. When a PIXL Order is contra 

to a PIXL Auction Responder, a 

Customer PIXL Order will be assessed 

$0.00 per contract, other market 

participants will be assessed $0.30 per 

contract in Penny Pilot Options or $0.38 

per contract in non-Penny Pilot Options. 

A Responder will be assessed $0.30 per 

contract in Penny Pilot Options or $0.38 

per contract in non-Penny Pilot Options, 

unless the Responder is a Customer, in 

which case the fee will be $0.00 per 

contract. When a PIXL Order is contra 

to a resting order or quote a Customer 

PIXL Order will be assessed $0.00 per 

contract, other market participants will 

be assessed $0.30 per contract and the 

resting order or quote will be assessed 

the appropriate Options Transaction 

Charge in Section II. All other fees 

discussed in Section II, including 

Payment for Order Flow and surcharges, 

will also apply as appropriate. The 

Exchange proposes to amend Section IV, 

A to indicate that the Monthly Market 

Maker Cap will no longer apply to PIXL 

Orders as noted above. The Exchange 

proposes to add the words ‘‘per 

contract’’ to Section IV, A where 

appropriate for clarity. 

The Exchange also proposes to 

expand and modify the $0.00 per 

contract pricing that today is available 

to Specialists and Market Makers that 

are on the contra-side of an 

electronically-delivered and executed 

Customer order and have reached the 

Monthly Market Maker Cap in the 

following symbols: AAPL, BAC, EEM, 

FB, FXI, IWM, QQQ, TWTR, VXX, and 

XLF to all Penny Pilot Options, 

provided the Specialist or Market Maker 

is adding liquidity. The Exchange will 

continue to assess a $0.17 per contract 

fee to Specialists and Market Makers 

that are on the contra-side of an 

electronically-delivered and executed 

Customer order and have reached the 

Monthly Market Maker Cap for Penny 

Pilot Options, when removing liquidity 

and for Non-Penny Pilot Options when 

either adding or removing liquidity. 

Finally, the Exchange would also assess 

$0.17 per contract in a non-Complex 

electronic auction, including the Quote 

Exhaust auction and, for purposes of 

this fee, the opening process.12

The Exchange believes that 

Specialists and Market Makers will 


tkelley on DSK3SPTVN1PROD with NOTICES
3280 Federal Register / Vol. 80, No. 14 / Thursday, January 22, 2015 / Notices 

13 15 U.S.C. 78f. 

14 15 U.S.C. 78f(b)(4) and (5). 

15See Rule 1014 titled ‘‘Obligations and 

Restrictions Applicable to Specialists and 

Registered Options Traders.’’ 

16Specialists and Market Makers, as compared to 

other market participants, are assessed PFOF when 

transacting Customer electronic orders. 

17See BOX Options Exchange LLC’s (‘‘BOX’’) Fee 

Schedule. Specifically, BOX’s auction transaction 

fees are those transactions executed through Price 

Improvement Period (‘‘PIP’’), the Complex Order 

Price Improvement Period (‘‘COPIP’’), the 

Solicitation Auction mechanism, and Facilitation 

Auction mechanism. 18See Section II of the Pricing Schedule. 

continue to be incentivized to transact 

a greater amount of liquidity on Phlx 

and to add and remove liquidity to the 

benefit of all other market participants. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6 of the Act,13

in general, and with Section 6(b)(4) and 

6(b)(5) of the Act,14 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 the Exchange operates or 

controls, and is not designed to permit 

unfair discrimination between 

customers, issuers, brokers, or dealers. 

The Exchange’s proposal to decrease 

the Monthly Market Maker Cap from 

$550,000 to $500,000 is reasonable 

because by lowering the cap, Specialists 

and Market Makers will be able to take 

advantage of lower fees presumably 

earlier in the month because the cap is 

lower. 

The Exchange’s proposal to decrease 

the Monthly Market Maker Cap from 

$550,000 to $500,000 is equitable and 

not unfairly discriminatory because this 

benefit would be uniformly applied to 

all Specialists and Market Makers that 

qualified for the Monthly Market Maker 

Cap. Specialists and Market Makers 

have burdensome quoting obligations 15

to the market that do not apply to 

Customers, Professionals, Firms and 

Broker-Dealers. Specialists and Market 

Makers serve an important role on the 

Exchange with regard to order 

interaction and they provide liquidity in 

the marketplace. Additionally, 

Specialists and Market Makers incur 

costs unlike other market participants 

including, but not limited to, Payment 

for Order Flow (‘‘PFOF’’) 16 and other 

costs associated with market making 

activities, which results in a higher 

average cost per execution as compared 

to Firms, Broker-Dealers and 

Professionals. The proposed 

differentiation as between Specialists 

and Market Makers as compared to 

other market participants recognizes the 

differing contributions made to the 

trading environment on the Exchange by 

these market participants. Customer 

liquidity benefits all market participants 

by providing more trading 

opportunities, which attract Specialists 

and Market Makers. An increase in the 

activity of these market participants in 

turn facilitates tighter spreads, which 

may cause an additional corresponding 

increase in order flow from other market 

participants. 

The Exchange’s proposal to amend 

the types of trades that qualify for the 

Monthly Market Maker Cap to exclude 

responses to a PIXL auction and assess 

Specialists and Market Makers the PIXL 

pricing located in Section IV, A of the 

Pricing Schedule is reasonable because 

all other market participants on Phlx, 

including Specialists and Market 

Makers that are not subject to the 

Monthly Market Maker Cap, are 

currently subject to the PIXL pricing 

located in Section IV, A of the Pricing 

Schedule. Pursuant to this proposal, all 

market participants will be uniformly 

assessed the same fees when responding 

to a PIXL auction. The Exchange 

believes that Specialists and Market 

Makers will continue to be incentivized 

to participate in PIXL, as is the case 

today with Specialists and Market 

Makers that do not qualify for the 

Monthly Market Maker Cap and are 

subject to Section IV, A pricing. 

The Exchange’s proposal to amend 

the types of trades that qualify for the 

Monthly Market Maker Cap to exclude 

fees related to responding to a PIXL 

auction and assess Specialists and 

Market Makers the PIXL pricing located 

in Section IV, A of the Pricing Schedule 

is equitable and not unfairly 

discriminatory because the Exchange is 

proposing to assess all market 

participants, including Specialists and 

Market Makers, the same PIXL pricing 

located in Section IV, A of the Pricing 

Schedule. 

The Exchange believes that the 

pricing in Section IV, A of the Pricing 

Schedule will continue to encourage 

market participants to transact a greater 

number of PIXL Orders. The proposed 

PIXL pricing is competitive with other 

rates assessed to Specialists and Market 

Makers to transact similar orders on 

other options exchanges with price 

improvement mechanisms.17 The 

Exchange will continue to offer 

competitive pricing, including Customer 

rebates in Section B of the Pricing 

Schedule. The Exchange’s current 

Pricing Schedule also offers to reduce 

the $0.07 per contract PIXL Initiating 

Order Fee to $0.05 per contract if the 

Customer Rebate Program Threshold 

Volume, defined in Section B of the 

Pricing Schedule, for that member is 

greater than 100,000 contracts per day 

in a month. Additionally, the Exchange 

offers a volume incentive for Specialist 

and Market Maker orders (as well as 

Professional, Firm and Broker-Dealer 

orders) that are contra to a Customer 

PIXL Order. In that situation, the 

Initiating Order fee is reduced to $0.00 

if the Customer PIXL Order is greater 

than 399 contracts. The PIXL Initiation 

Order Fee reduction to $0.00, when 

contra to a Customer PIXL Order, is 

similar to the Exchange’s assessment of 

fees for Firm Floor Facilitation orders. 

Today, the Exchange waives Firm Floor 

Options Transaction Charges 18 for 

members executing facilitation orders 

pursuant to Exchange Rule 1064 when 

such members are trading in their own 

proprietary account. The Exchange 

waives Firm Facilitation Fees because 

the waiver of such fees serves to 

encourage Firms to facilitate Customer 

order flow. Likewise, the Exchange 

seeks to similarly assess Specialist and 

Market Maker fees for PIXL orders, 

which are electronic orders, as 

compared to floor orders, by 

encouraging Specialists and Market 

Makers or other Broker-Dealer members 

to initiate PIXL Orders within the PIXL 

auction mechanism in an effort to lower 

execution charges by transacting with a 

Customer PIXL Order. When a Firm 

enters an Initiating Order, similar to 

Firm Facilitation orders on the 

Exchange floor, market participants are 

afforded an opportunity to respond to 

the order which should in turn generate 

additional responders to a PIXL auction. 

All market participants are eligible to 

respond to an Initiating PIXL Order. 

Therefore, offering all market 

participants an opportunity to deliver 

orders into the PIXL auction, for 

purposes of price improvement, benefits 

all market participants by incentivizing 

order interaction in PIXL. 

Further, the Exchange’s proposal to 

assess Specialists and Market Makers 

the PIXL pricing in Section IV, A 

provides market participants the 

opportunity to lower fees by transacting 

a greater number of Customer orders. 

When the PIXL Order is contra to the 

Initiating Order a Customer PIXL Order 

will be assessed $0.00 per contract and 

non-Customer PIXL Orders will be 

assessed $0.30 per contract. When a 

PIXL Order is contra to a PIXL Auction 

Responder, a Customer PIXL Order will 

be assessed $0.00 per contract, other 

market participants will be assessed 

$0.30 per contract in Penny Pilot 

Options or $0.38 per contract in nonVerDate Sep<11>2014 18:09 Jan 21, 2015 Jkt 235001 PO 00000 Frm 00068 Fmt 4703 Sfmt 4703 E:\FR\FM\22JAN1.SGM 22JAN1

tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 14 / Thursday, January 22, 2015 / Notices 3281 

19The symbols are: AAPL, BAC, EEM, FB, FXI, 

IWM, QQQ, TWTR, VXX, and XLF. 

20 Id. 

21See note 15. 

22See Section B of the Pricing Schedule. 

23See note 15. 

24See Section B of the Pricing Schedule. 

25See note 15. 

Penny Pilot Options. A Responder will 

be assessed $0.30 per contract in Penny 

Pilot Options or $0.38 per contract in 

non-Penny Pilot Options, unless the 

Responder is a Customer, in which case 

the fee will be $0.00 per contract. 

Finally, when a PIXL Order is contra to 

a resting order or quote a Customer PIXL 

Order will be assessed $0.00 per 

contract, other market participants will 

be assessed $0.30 per contract and the 

resting order or quote will be assessed 

the appropriate Options Transaction 

Charge in Section II. Customer PIXL 

Orders will remain free in all instances 

and all non-Customer market 

participant PIXL Orders will be assessed 

a fee of $0.30 per contract in Penny Pilot 

Options and $0.38 per contract in NonPenny Pilot Options fee uniformly. All 

non-Customers market participants are 

assessed the same fees with respect to 

Section II when a PIXL Order is contra 

to a resting order or quote. In this case 

the resting contra-side orders or quotes 

will continue to pay the appropriate 

Options Transaction Charges in Section 

II. For the reasons noted above, the 

Exchange believes that the PIXL pricing, 

which will be uniformly assessed to all 

market participants, is reasonable, 

equitable and not unfairly 

discriminatory. 

The Exchange’s proposal to expand 

the $0.00 per contract pricing that today 

is available to Specialists and Market 

Makers that are on the contra-side of an 

electronically-delivered and executed 

Customer order and have reached the 

Monthly Market Maker Cap in certain 

symbols 19 to all Penny Pilot Options 

provided the Specialist or Market Maker 

is adding liquidity is reasonable because 

the Exchange desires to expand this 

incentive to all Penny Pilot Options to 

enhance the displayed liquidity 

available on the Exchange to the benefit 

of investors and other market 

participants. Specialists and Market 

Makers will be able to benefit to a 

greater extent and be incentivized to 

add liquidity in all Penny Pilot Option 

symbols, provided they qualified for the 

Monthly Market Maker Cap. All market 

participants will benefit from the 

increased Customer liquidity brought to 

the Exchange by this displayed liquidity 

incentive. 

The Exchange’s proposal to expand 

the $0.00 per contract pricing that today 

is available to Specialists and Market 

Makers that are on the contra-side of an 

electronically-delivered and executed 

Customer order and have reached the 

Monthly Market Maker Cap in certain 

symbols 20 to all Penny Pilot Options 

provided the Specialist or Market Maker 

is adding liquidity is equitable and not 

unfairly discriminatory because 

Specialists and Market Makers have 

burdensome quoting obligations 21 to 

the market that do not apply to 

Customers, Professionals, Firms and 

Broker-Dealers. Specialists and Market 

Makers serve an important role on the 

Exchange with regard to order 

interaction and they provide liquidity in 

the marketplace. In addition, the 

proposed fees would apply only in 

certain circumstances where the Market 

Maker or Specialist is not otherwise 

subject to transaction fees (because the 

Monthly Market Maker Cap has been 

reached) and specifically on the contraside of an electronically-delivered 

Customer order. 

The Exchange’s proposal to continue 

to assess a $0.17 per contract fee to 

Specialists and Market Makers that are 

on the contra-side of an electronicallydelivered and executed Customer order 

and have reached the Monthly Market 

Maker Cap for Penny Pilot and NonPenny Pilot Options provided the 

Specialist or Market Maker is removing 

liquidity is reasonable because the 

Exchange will be assessing the same fee 

as today. The $0.17 per contract fee will 

continue to be assessed to remove 

liquidity. Further, this fee subsidizes 

Customer rebates offered by the 

Exchange.22

The Exchange’s proposal to continue 

to assess a $0.17 per contract fee to 

Specialists and Market Makers that are 

on the contra-side of an electronicallydelivered and executed Customer order 

and have reached the Monthly Market 

Maker Cap for Penny Pilot and NonPenny Pilot Options provided the 

Specialist or Market Maker is removing 

liquidity is equitable and not unfairly 

discriminatory because Specialists and 

Market Makers have burdensome 

quoting obligations 23 to the market that 

do not apply to Customers, 

Professionals, Firms and Broker-Dealers. 

Specialists and Market Makers serve an 

important role on the Exchange with 

regard to order interaction and they 

provide liquidity in the marketplace. In 

addition, the proposed fees would apply 

only in certain circumstances where the 

Market Maker or Specialist is not 

otherwise subject to transaction fees 

(because the Monthly Market Maker Cap 

has been reached) and specifically on 

the contra-side of an electronicallydelivered Customer order. 

The Exchange’s proposal to continue 

to assess a $0.17 per contract fee to 

Specialists and Market Makers that are 

on the contra-side of an electronicallydelivered and executed Customer order 

and have reached the Monthly Market 

Maker Cap in a non-Complex electronic 

auction, including the Quote Exhaust 

auction and, for purposes of this fee, the 

opening process is reasonable because 

the Exchange will be assessing the same 

fee as today. The $0.17 per contract fee 

will continue to be assessed to these 

auctions and the opening process. 

Further, this fee subsidizes Customer 

rebates offered by the Exchange.24

The Exchange’s proposal to add the 

words ‘‘per contract’’ in Section IV, A of 

the Pricing Schedule is reasonable, 

equitable and not unfairly 

discriminatory because the Exchange 

believes the addition of the words ‘‘per 

contract’’ will add clarity to the Pricing 

Schedule to avoid any confusion as to 

the fee. 

The Exchange’s proposal to continue 

to assess a $0.17 per contract fee to 

Specialists and Market Makers that are 

on the contra-side of an electronicallydelivered and executed Customer order 

and have reached the Monthly Market 

Maker Cap in a non-Complex electronic 

auction, including the Quote Exhaust 

auction and, for purposes of this fee, the 

opening process is equitable and not 

unfairly discriminatory because 

Specialists and Market Makers have 

burdensome quoting obligations 25 to 

the market that do not apply to 

Customers, Professionals, Firms and 

Broker-Dealers. Specialists and Market 

Makers serve an important role on the 

Exchange with regard to order 

interaction and they provide liquidity in 

the marketplace. In addition, the 

proposed fees would apply only in 

certain circumstances where the Market 

Maker or Specialist is not otherwise 

subject to transaction fees (because the 

Monthly Market Maker Cap has been 

reached) and specifically on the contraside of an electronically-delivered 

Customer 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 because 

Specialists and Market Makers will be 

offered the opportunity to cap certain 

transaction fees and pay lower 


tkelley on DSK3SPTVN1PROD with NOTICES
3282 Federal Register / Vol. 80, No. 14 / Thursday, January 22, 2015 / Notices 

26 Id. 27 15 U.S.C. 78s(b)(3)(A)(ii). 

28 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

transaction fees when they transact 

$500,000 versus $550,000 of qualifying 

transactions. Other market participants 

will continue to benefit from the order 

interaction and liquidity that Specialists 

and Market Markers provide to the 

marketplace. 

The Exchange does not believe that 

amending the types of trades that 

qualify for the Monthly Market Maker 

Cap by excluding certain transaction 

fees related to an order or quote that is 

contra to a PIXL Order or assessing 

Specialists and Market Makers the PIXL 

pricing located in Section IV, A of the 

Pricing Schedule will impose an undue 

burden on competition because the 

Exchange’s proposal results in all 

market participants on Phlx being 

assessed the same PIXL pricing. 

The Exchange’s proposal for 

Specialists and Market Makers to pay no 

fees after they have satisfied the 

obligations related to the Monthly 

Market Maker Cap, in all Penny Pilot 

Options, provided they have added 

liquidity, and to pay lower fees for all 

other types of transactions, including 

those transacted in auctions and during 

the opening process, also does not 

provide an undue burden on 

competition. As noted above Specialists 

and Market Makers have burdensome 

quoting obligations to the market that do 

not apply to Customers, Professionals, 

Firms and Broker-Dealers.26 Specialists 

and Market Makers serve an important 

role on the Exchange with regard to 

order interaction and they provide 

liquidity in the marketplace. The 

proposed differentiation as between 

Specialists and Market Makers as 

compared to other market participants 

recognizes the differing contributions 

made to the trading environment on the 

Exchange by these market participants. 

Customer liquidity benefits all market 

participants by providing more trading 

opportunities, which attract Specialists 

and Market Makers. An increase in the 

activity of these market participants in 

turn facilitates tighter spreads, which 

may cause an additional corresponding 

increase in order flow from other market 

participants. For these reasons noted 

above, the Exchange does not believe 

that offering Specialists and Market 

Makers the opportunity to cap fees in 

certain symbols imposes an undue 

burden on competition. 

The Exchange operates in a highly 

competitive market, comprised of 

twelve exchanges, in which market 

participants can easily and readily 

direct order flow to competing venues if 

they deem fee levels at a particular 

venue to be excessive or rebates to be 

inadequate. Accordingly, the fees that 

are assessed and the rebates paid by the 

Exchange, as described in the proposal, 

are influenced by these robust market 

forces and therefore must remain 

competitive with fees charged and 

rebates paid by other venues and 

therefore must continue to be reasonable 

and equitably allocated to those 

members that opt to direct orders to the 

Exchange rather than competing venues. 

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.27 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 rule-comments@

sec.gov. Please include File Number SR– 

Phlx–2015–06 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–Phlx–2015–06. 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– 

2015–06 and should be submitted on or 

before February 12, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.28

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–00971 Filed 1–21–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74072; File No. SR–EDGX– 

2015–02] 

Self-Regulatory Organizations; EDGX 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Clarify the Use of 

Certain Data Feeds 

January 15, 2015. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that, on January 

7, 2015, EDGX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘EDGX’’) 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 

by the self-regulatory organization. The 


tkelley on DSK3SPTVN1PROD with NOTICES