15850 Federal Register / Vol. 80, No. 57 / Wednesday, March 25, 2015 / Notices 

21For purposes only of waiving the 30-day 

operative delay, the Commission has also 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 

22 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The term ‘‘Customer’’ applies to any transaction 

that is identified by a member or member 

organization for clearing in the Customer range at 

The Options Clearing Corporation (‘‘OCC’’) which 

is not for the account of broker or dealer or for the 

account of a ‘‘professional’’ (as that term is defined 

in Rule 1000(b)(14)). 

4PIXLSM is the Exchange’s price improvement 

mechanism known as Price Improvement XL or 

PIXL. See Rule 1080(n). 

5Options overlying Standard and Poor’s 

Depositary Receipts/SPDRs (‘‘SPY’’) are based on 

the SPDR exchange-traded fund, which is designed 

to track the performance of the S&P 500 Index. 

6The term ‘‘Firm’’ applies to any transaction that 

is identified by a member or member organization 

for clearing in the Firm range at OCC. 

7This includes options overlying equities, 

exchange traded funds (‘‘ETFs’’), exchange traded 

notes (‘‘ETNs’’) and indexes which are Multiply 

Listed. 

8A Specialist is an Exchange member who is 

registered as an options specialist pursuant to Rule 

1020(a). 

9A ‘‘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. 

proposed rule change to their short term 

option series programs. For this reason, 

the Commission believes that the 

proposed rule change presents no novel 

issues and that waiver of the 30-day 

operative delay is consistent with the 

protection of investors and the public 

interest. Therefore, the Commission 

designates the proposed rule change to 

be operative upon filing.21

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– 

NYSEMKT–2015–16 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–2015–16. 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 

10:00 a.m. and 3:00 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– 

NYSEMKT–2015–16 and should be 

submitted on or before April 15, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–06717 Filed 3–24–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74531; File No. SR–Phlx– 

2015–25] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to the 

Pricing Schedule’s Preface and 

Sections I, II and IV 

March 19, 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 March 11, 

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 the Substance 

of the Proposed Rule Change 

The Exchange proposes to modify the 

Phlx Pricing Schedule (‘‘Pricing 

Schedule’’). Specifically, the Exchange 

proposes to amend: (1) The Preface to 

the Pricing Schedule to include a 

reference to a Non-Customer; (2) amend 

the Customer 3 Simple Order Fee for 

Removing Liquidity in Section I, 

entitled ‘‘Rebates and Fees for Adding 

and Removing Liquidity in SPY’’ as well 

as certain PIXL 4 executions in options 

overlying SPY; 5 (3) amend a Firm 6 fee 

in Section II, entitled ‘‘Multiply Listed 

Options Fees,’’ 7 as well as certain 

pricing applicable to Specialists 8 and 

Market Makers; 9 (4) amend PIXL 

pricing in Section IV, Part A entitled 

‘‘PIXL Pricing,’’ and FLEX pricing in 

Section IV, Part B, entitled ‘‘FLEX 

Transaction Fees’’ of the Pricing 

Schedule. 

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. 


rljohnson on DSK3VPTVN1PROD with NOTICES
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10The term ‘‘professional’’ means any person or 

entity that (i) is not a broker or dealer in securities, 

and (ii) places more than 390 orders in listed 

options per day on average during a calendar month 

for its own beneficial account(s). See Rule 

1000(b)(14). 

11The term ‘‘Broker-Dealer’’ applies to any 

transaction which is not subject to any of the other 

transaction fees applicable within a particular 

category. 

12The term ‘‘Joint Back Office’’ or ‘‘JBO’’ applies 

to any transaction that is identified by a member or 

member organization for clearing in the Firm range 

at OCC and is identified with an origin code as a 

JBO. A JBO will be priced the same as a BrokerDealer. A JBO participant is a member, member 

organization or non-member organization that 

maintains a JBO arrangement with a clearing 

broker-dealer (‘‘JBO Broker’’) subject to the 

requirements of Regulation T Section 220.7 of the 

Federal Reserve System as further discussed at 

Exchange Rule 703. 

13A 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. 

14The Exchange offers Specialists and Maker 

Makers a $0.20 per contract Simple Order Rebate 

for Adding Liquidity in SPY. 

15The Penny Pilot was established in January 

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

Securities and Exchange Release No. 73688 

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

2014) (SR–Phlx–2014–77). 

16See Section II of the Pricing Schedule. AAPL, 

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

XLF are currently Penny Pilot Options (together 

‘‘certain Penny Options’’). The $0.34 per contract 

pricing proposed herein is symbol specific and will 

continue to apply to these symbols whether or not 

they are deleted from or added from the Penny Pilot 

Options Program. 

17QCC Orders are defined in Exchange Rule 

1080(o) and Floor QCC Orders are defined in 

1064(e)). 

18Common Ownership shall mean members or 

member organizations under 75% common 

ownership or control. 

19See descriptions of these strategies in Section 

II of the Pricing Schedule. 

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 modify 

the Pricing Schedule to specifically 

amend the Preface, Section I, entitled 

‘‘Rebates and Fees for Adding and 

Removing Liquidity in SPY,’’ Section II, 

entitled ‘‘Multiply Listed Options Fees,’’ 

and Section IV, Part A, entitled ‘‘PIXL 

Pricing’’ and Part B entitled ‘‘FLEX 

Transaction Fees.’’ The Exchange 

proposes various amendments to the 

Pricing Schedule as described below. 

Preface 

The Exchange proposes to amend the 

Preface of the Pricing Schedule to add 

a defined term, ‘‘Non-Customer.’’ The 

Exchange proposes to state that a NonCustomer refers to transactions for the 

accounts of Specialists, Market Makers, 

Firms, Professionals,10 Broker-Dealers 11

and JBOs.12 The Exchange believes that 

adding this reference to the Preface will 

assist members and member 

organizations to better understand 

references to the term ‘‘Non-Customer’’ 

in the Pricing Schedule when pricing is 

applied to market participants other 

than a Customer. 

Section I Rebates and Fees for Adding 

and Removing Liquidity in SPY 

The Exchange is proposing to amend 

the Customer Simple Order Fees for 

Removing Liquidity in Section I 

applicable to transactions overlying 

SPY. The Exchange currently assesses 

Customers a $0.43 per contract Fee for 

Removing Liquidity in SPY Simple 

Orders and Specialists, Market Makers, 

Firms, Broker-Dealers and Professionals 

are assessed a $0.49 per contract Fee for 

Removing Liquidity in SPY Simple 

Orders. The Exchange is proposing to 

increase the Customer Fee for Removing 

Liquidity in SPY Simple Orders from 

$0.43 to $0.44 per contract. Despite the 

increased fee, Customers will continue 

to be assessed a lower Fee for Removing 

Liquidity in SPY Simple Orders as 

compared to other market participants. 

The Exchange also proposes to amend 

PIXL fees in SPY in Section I of the 

Pricing Schedule. Today, when a PIXL 

Order is contra to other than the 

Initiating Order,13 the PIXL Order will 

be assessed $0.00 per contract, unless 

the order is a Customer, in which case 

the Customer will receive a rebate of 

$0.38 per contract. All other contra 

parties to the PIXL Order, other than the 

Initiating Order, will be assessed a Fee 

for Removing Liquidity of $0.38 per 

contract or will receive the Rebate for 

Adding Liquidity.14 The Exchange is 

proposing to increase the amount that 

all other contra parties to the PIXL 

Order, other than the Initiating Order, 

will be assessed to remove liquidity 

from $0.38 to $0.42 per contract. These 

contra parties will continue to be 

entitled to receive the Rebate for Adding 

Liquidity, as is the case today. Despite, 

the increase [the Exchange] believes that 

its current SPY PIXL fees remain 

competitive. 

For clarity, the Exchange is also 

proposing to add the word ‘‘NonCustomer’’ to the Pricing Schedule in 

Section I, when describing all other 

contra parties for purposes of the PIXL 

Order fees. 

Section II—Multiply Listed Options 

The Exchange proposes to continue 

provide a reduction to the Firm Options 

Transaction fee in Penny Pilot 

Options 15 and Non-Penny Pilot Options 

for electronic Simple Orders in Apple 

Inc. (‘‘AAPL’’), Bank of America 

Corporation (‘‘BAC’’), iShares MSCI 

Emerging Markets ETF (‘‘EEM’’), 

Facebook, Inc. (‘‘FB’’), iShares China 

Large-Cap ETF (‘‘FXI’’), iShares Russell 

2000 ETF (‘‘IWM’’), PowerShares QQQ 

Trust (‘‘QQQ’’), Twitter, Inc. (‘‘TWTR’’), 

iPath S&P 500 VIX Short-Term Futures 

ETF (‘‘VXX’’) and Financial Select 

Sector SPDR Fund (‘‘XLF’’). The current 

fee of $0.27 per contract, which is 

discounted as compared to the Options 

Transaction Fee in Section II, will be 

increased to $0.34 per contract. This 

proposed fee is lower than the $0.48 per 

contract fee Firm electronic Penny Pilot 

Options Transaction Charge in Section 

II of the Pricing Schedule.16 Despite the 

increase in this fee, the Exchange 

believes that Firms will continue to be 

incentivized to transact volume in these 

aforementioned symbols as the fee 

continues to be discounted. 

Currently, Specialists and Market 

Makers are subject to a ‘‘Monthly 

Market Maker Cap’’ of $500,000 for: (i) 

Electronic and floor Option Transaction 

Charges; and (ii) Qualified Contingent 

Cross or ‘‘QCC’’ Transaction Fees.17 The 

trading activity of separate Specialist 

and Market Maker member 

organizations are aggregated in 

calculating the Monthly Market Maker 

Cap if there is Common Ownership 18

between the member organizations. All 

dividend, merger, short stock interest, 

reversal and conversion, jelly roll and 

box spread strategy executions 19 are 

excluded from the Monthly Market 

Maker Cap. Today, 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 are currently assessed fees per 

contract as follows: $0.05 per contract 

Fee for Adding Liquidity in Penny Pilot 

Options; $0.17 per contract Fee for 

Removing Liquidity in Penny Pilot 

Options; $0.17 per contract in NonPenny Pilot Options; and $0.17 per 

contract in a non-Complex electronic 

auction, including the Quote Exhaust 

auction and, for purposes of this fee, the 

opening process. A Complex electronic 

auction includes, but is not limited to, 

the Complex Order Live Auction 


rljohnson on DSK3VPTVN1PROD with NOTICES
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20A Complex electronic auction includes, but is 

not limited to, the Complex Order Live Auction 

(‘‘COLA’’). 

21Specialists and Market Makers that do not meet 

the requirements specified herein are subject to the 

Options Transaction Charges in Section II of the 

Pricing Schedule. 

22Today, these market participants are assessed a 

$0.30 per contract Penny Pilot Option fee and a 

$0.38 per contract Non-Penny Pilot Option fee. 

23FLEX options are only executed on the 

Exchange’s trading floor and are not executed 

electronically on the Exchange. 

24FLEX Option fees today are not in addition to 

Options Transaction Charges. 

25Firms are subject to a maximum fee of $75,000 

(‘‘Monthly Firm Fee Cap’’). Firm Floor Option 

Transaction Charges and QCC Transaction Fees, as 

defined in this section above, in the aggregate, for 

one billing month may not exceed the Monthly 

Firm Fee Cap per member organization when such 

members are trading in their own proprietary 

account. All dividend, merger, and short stock 

interest strategy executions (as defined in Section 

II) are excluded from the Monthly Firm Fee Cap. 

Reversal and conversion strategy executions (as 

defined in Section II) are included in the Monthly 

Firm Fee Cap. QCC Transaction Fees are included 

in the calculation of the Monthly Firm Fee Cap. See 

Section II Pricing. 

26Today, the Exchange pays an Options 

Surcharge in BKX of $0.10 per contract for all 

market participants, except Customers. Also, the 

Exchange pays an Options Surcharge in MNX and 

NDX of $0.20 per contract for all market 

participants, except Customers. See Section II of the 

Pricing Schedule. 

27Section III pricing includes options overlying 

currencies, equities, ETFs, ETNs treasury securities 

and indexes not listed on another exchange. 

28 15 U.S.C. 78f(b). 

29 15 U.S.C. 78f(b)(4), (5). 

(‘‘COLA’’).20 Transactions which 

execute against an order for which the 

Exchange broadcast an order exposure 

alert are subject to this fee. 

The Exchange proposes to increase 

the $0.17 per contract Fee for Removing 

Liquidity in Penny Pilot Options to 

$0.18 per contract; the $0.17 per 

contract in Non-Penny Pilot Options to 

$0.18 per contract; and the $0.17 per 

contract in a non-Complex electronic 

auction to $0.18 per contract, provided 

a Specialist or Market Maker is on the 

contra-side of an electronicallydelivered and executed Customer order 

and has reached the Monthly Market 

Maker Cap. Despite these increases, the 

Exchange believes that Specialists and 

Market Makers will continue to be 

encouraged to transact orders on the 

market because the fees are still 

discounted.21

Section IV, Part A—PIXL Pricing 

PIXL pricing for Initiating Orders is 

located in subsection IV, Part A, entitled 

‘‘Other Transaction Fees’’ of the Pricing 

Schedule. Today, the Initiating Order 

Fee is $0.07 per contract. If the member 

or member organization qualifies for the 

Tier 4 or 5 Customer Rebate in Section 

B of the Pricing Schedule, the member 

or member organization will be assessed 

$0.05 per contract for Simple PIXL 

Orders and $0.03 per contract for 

Complex PIXL Orders. Any member or 

member organization under Common 

Ownership with another member or 

member organization that qualifies for a 

Customer Rebate Tier 4 or 5 discount in 

Section B of the Pricing Schedule will 

receive the PIXL Initiating Order 

discount. The Initiating Order Fee for 

Professional, Firm, Broker-Dealer, 

Specialist and Market Maker orders that 

are contra to a Customer PIXL Order is 

reduced to $0.00 if the Customer PIXL 

Order is greater than 399 contracts. 

Today, for PIXL Order Executions in 

Section II, Multiply Listed Options, 

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. 

The Exchange is proposing to amend 

fees when a PIXL Order is contra to a 

PIXL Auction Responder for Multiply 

Listed Options. A Customer PIXL Order 

will continue to be assessed $0.00 per 

contract and other market participants 

will continue to be assessed $0.30 per 

contract in Penny Pilot Options or $0.38 

per contract in Non-Penny Pilot Options 

in Multiply Listed Options. The 

Exchange proposes to continue to assess 

a Responder that is a Specialist or 

Market Maker a $0.30 per contract fee in 

Penny Pilot Options and an increased 

$0.40 per contract (today this fee is 

$0.38 per contract) fee in Non-Penny 

Pilot Options. Other Non-Customer 

Responders (Professionals, Firms and 

Broker-Dealers) will be assessed an 

increased fee in Penny Pilot Options of 

$0.48 per contract and an increased fee 

of $0.70 per contract in Non-Penny Pilot 

Options.22 A Responder that is a 

Customer will continue to be assessed 

$0.00 per contract in Penny and NonPenny Pilot Options. Despite the 

increases in certain PIXL fees, the 

Exchange believes that its fee remain 

competitive. 

The Exchange is also proposing to 

capitalize certain terms for consistency 

within the text of the Pricing Schedule 

and utilize the term ‘‘Non-Customer’’. 

Section IV, Part B—FLEX Transaction 

Fees 

The Exchange proposes to amend its 

FLEX Multiply Listed Options pricing 

in Section IV, Part B, entitled ‘‘FLEX 

Transaction Fees’’ of the Pricing 

Schedule. Customers will continue to be 

assessed no fee for transacting FLEX 

Options.23 Today, all other market 

participants, Professionals, Specialists, 

Market Makers, Broker-Dealers and 

Firms, or ‘‘Non-Customers,’’ are 

assessed a fee of $0.15 per contract 

when transacting FLEX Options.24 The 

Exchange is proposing to increase this 

fee from $0.15 to $0.25 contract. The 

Exchange will continue to apply the 

Monthly Firm Fee Cap,25 Monthly 

Market Maker Cap, and the Options 

Surcharge in PHLX/KBW Bank Index 

(‘‘BKX’’), options on the one-tenth value 

of the Nasdaq 100 Index traded under 

the symbol MNX (‘‘MNX’’) and options 

on the Nasdaq 100 Index traded under 

the symbol NDX (‘‘NDX’’) described in 

Section II.26 No other fees described in 

Section II apply to Section IV, B of the 

Pricing Schedule. The Exchange will 

continue to waive FLEX transaction fees 

for a Firm executing facilitation orders 

pursuant to Exchange Rule 1064 when 

such members are trading in their own 

proprietary account. The pricing in 

Section III, entitled ‘‘Singly Listed 

Options’’ will continue to apply to 

FLEX Singly Listed Options, as is the 

case today.27

2. Statutory Basis 

The Exchange believes that its 

proposal to amend the Pricing Schedule 

is consistent with Section 6(b) of the 

Act 28 in general, and furthers the 

objectives of Section 6(b)(4) and (b)(5) of 

the Act 29 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 market 

participants to whom the Exchange’s 

fees and rebates are applicable. 

Preface 

The Exchange’s proposal to amend 

the Preface of the Pricing Schedule to 

add a defined term, ‘‘Non-Customer’’ is 

reasonable because it makes clear what 

is meant by the term ‘‘Non-Customer,’’ 

which refers to transactions for the 

accounts of Specialists, Market Makers, 

Firms, Professionals, Broker-Dealers and 

JBOs. 

The Exchange’s proposal to amend 

the Preface of the Pricing Schedule to 

add a defined term, ‘‘Non-Customer’’ is 

equitable and not unfairly 

discriminatory because the addition of 

the term ‘‘Non-Customer’’ to the Preface 


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30See the NASDAQ Options Market LLC’s 

(‘‘NOM’’) pricing at Chapter XV of NOM’s 

Rulebook. 

31Other market participants are assessed a $0.49 

per contract Fees for Removing Liquidity in SPY 

Simple Orders. 

32See Section I of the Pricing Schedule. 

33See the NASDAQ Options Market LLC’s 

(‘‘NOM’’) pricing at Chapter XV of NOM’s 

Rulebook. See also NYSE Arca, Inc. (‘‘NYSE Arca’’) 

Fees and Charges. The non-customer remove fee for 

Penny Pilot issues is $0.49 per contract. 

34See International Securities Exchange LLC’s 

(‘‘ISE’’) Schedule of Fees. 

35Customers do not pay Options Transaction 

Charges in Multiply Listed Options. See Section II 

of the Pricing Schedule. 

36Specialists and Market Makers are assessed an 

electronic Penny Pilot Options Transaction Charge 

of $0.22 per contract. See Section II of the Pricing 

Schedule. 

37See Rule 1014 titled ‘‘Obligations and 

Restrictions Applicable to Specialists and 

Registered Options Traders.’’ 

38Professionals and Broker-Dealers are assessed a 

$0.48 per contract electronic Penny Pilot Options 

Transaction Charge, except for electronic Complex 

Orders, which are assessed $0.35 per contract. See 

Section II of the Pricing Schedule. 

39MIAX Options Exchange (‘‘MIAX’’) assesses 

non-member Broker-Dealers a $0.45 [sic] per 

contract standard options transaction fee and a Firm 

is assessed a $0.37 per contract standard options 

transaction fee. See MIAX’s Fee Schedule. 

will provide consistency to the meaning 

of the term as utilized throughout the 

Pricing Schedule. 

Section I—Rebates and Fees for Adding 

and Removing Liquidity in SPY 

The Exchange’s proposal to amend 

the Customer SPY Simple Order Fees 

for Removing Liquidity in Section I of 

the Pricing Schedule to increase the fee 

from $0.43 to $0.44 per contract is 

reasonable because, despite the 

increase, the Exchange believes the fee 

will continue to encourage a greater 

number of market participants to 

remove Customer liquidity in SPY on 

Phlx because the proposed rate of $0.44 

per contract is lower than transactions 

in SPY at some competitor or affiliated 

options exchanges.30 Customer orders 

bring valuable liquidity to the market 

which liquidity benefits other market 

participants. 

The Exchange’s proposal to amend 

the Customer SPY Simple Order Fees 

for Removing Liquidity in Section I of 

the Pricing Schedule to increase the fee 

from $0.43 to $0.44 per contract is 

equitable and not unfairly 

discriminatory because Customers will 

continue to be assessed the lowest Fees 

for Removing Liquidity in SPY Simple 

Orders.31 Customer liquidity benefits all 

market participants by providing more 

trading opportunities, which attracts 

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 

PIXL fees in SPY to increase the amount 

that all other Non-Customer contra 

parties to the PIXL Order, other than the 

Initiating Order, will be assessed to 

remove liquidity from $0.38 to $0.42 per 

contract is reasonable because despite 

the increase in the fee, the Exchange 

believes this pricing will continue to 

incentivize market participants to 

transact a greater number of SPY 

options. The Exchange will continue to 

assess no fee when a PIXL Order is 

contra to other than an Initiating Order 

in SPY. Customers will continue to 

receive a rebate of $0.38 per contract 

when the PIXL Order is contra to other 

than the Initiating Order. The Exchange 

is increasing the Fee for Removing 

Liquidity for Non-Customer contraparties to the PIXL Order in SPY, other 

than the Initiating Order, to $0.42 per 

contract, which is still lower than the 

$0.49 per contract Fee for Removing 

Liquidity that is assessed for Simple 

Orders in SPY.32 SPY options are 

currently the most actively traded 

options class and therefore the 

Exchange believes that incentivizing 

Non-Customers (Professionals, Firms, 

Broker-Dealers, Specialists and Market 

Makers) to remove liquidity in SPY 

options by offering a lower rate as 

compared to the $0.49 per contract 

Simple Order Fee for Removing 

Liquidity in SPY will benefit all market 

participants by providing incentives for 

price improvement, such as this 

reduction in the Fee for Removing 

Liquidity. 

The Exchange’s proposal to amend 

PIXL fees in SPY to increase the amount 

that all other contra parties to the PIXL 

Order, other than the Initiating Order, 

will be assessed to remove liquidity 

from $0.38 to $0.42 per contract is 

equitable and not unfairly 

discriminatory because the Exchange 

will be assessing the same Fees for 

Removing Liquidity for SPY PIXL 

options to all Non-Customer market 

participants provided they meet the 

aforementioned criteria. Customer 

liquidity benefits all market participants 

by providing more trading 

opportunities, which attracts Specialists 

and Market Makers. Creating incentives 

for Non-Customer market participants to 

remove liquidity benefits all market 

participants through increased liquidity 

at the Exchange. A higher percentage of 

SPY Orders in PIXL leads to increased 

auctions and better opportunities for 

price improvement. 

The Exchange believes that it is 

reasonable, equitable and not unfairly 

discriminatory to add clarifying rule 

text to the Pricing Schedule with respect 

to identifying Non-Customers. 

Section II—Multiply Listed Options 

The Exchange’s proposal to increase 

the Firm electronic Simple Order fee in 

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

TWTR, VXX and XLF from $0.27 to 

$0.34 per contract is reasonable because 

it will continue to incentivize Firms to 

send electronic Simple Orders in these 

symbols to the Exchange by offering a 

rate lower than at other options 

exchanges.33 Today Firms pay a 

discounted fee ($0.27 per contract 

compared to the Firm electronic 

Multiply Listed Options $0.48 per 

contract fee). Pricing by symbol is a 

common practice on many U.S. options 

exchanges as a means to incentive order 

flow to be sent to an exchange for 

execution.34

The Exchange’s proposal to increase 

the Firm electronic Simple Order fee in 

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

TWTR, VXX and XLF from $0.27 to 

$0.34 per contract is equitable and not 

unfairly discriminatory. The Exchange 

will continue to assess Firms higher fees 

as compared to Customers.35 Customer 

order flow enhances liquidity on the 

Exchange for the benefit of all market 

participants and benefits all market 

participants by providing more trading 

opportunities, which attracts 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. Firms will continue to 

assessed higher Options Transaction 

Charges as compared to Specialists and 

Market Makers,36 because Specialists 

and Market Makers have obligations to 

the market and regulatory requirements, 

which normally do not apply to other 

market participants.37 They have 

obligations to make continuous markets, 

engage in a course of dealings 

reasonably calculated to contribute to 

the maintenance of a fair and orderly 

market, and not make bids or offers or 

enter into transactions that are 

inconsistent with a course of dealings. 

Finally, as proposed, Firms will be 

assessed a $0.34 per contract electronic 

fee for electronic Simple Orders in these 

symbols, which is a lower fee as 

compared to Professionals and BrokerDealers.38 The Exchange believes that 

the proposed fee differential between 

Firms and Professionals and BrokerDealers is equitable and not unfairly 

discriminatory because it is similar to 

the pricing offered by another options 

exchange.39 Moreover, the proposed 


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15854 Federal Register / Vol. 80, No. 57 / Wednesday, March 25, 2015 / Notices 

40Firms are subject to a maximum fee of $75,000 

(‘‘Monthly Firm Fee Cap’’). Firm Floor Option 

Transaction Charges and QCC Transaction Fees, in 

the aggregate, for one billing month may not exceed 

the Monthly Firm Fee Cap per member organization 

when such members are trading in their own 

proprietary account. All dividend, merger, and 

short stock interest strategy executions (as defined 

in Section II of the Pricing Schedule) are excluded 

from the Monthly Firm Fee Cap. Reversal and 

conversion, jelly roll and box spread strategy 

executions (as defined in Section II) are included 

in the Monthly Firm Fee Cap. QCC Transaction 

Fees are included in the calculation of the Monthly 

Firm Fee Cap. See Section II of the Pricing 

Schedule. 

41CBOE assesses a reduced fee to Clearing 

Trading Permit Holder Proprietary (Clearing 

Trading Permit Holder Proprietary clears in the 

Firm range at The Options Clearing Corporation 

(‘‘OCC’’)) participants of $0.35 per contract for 

electronic Penny and Non-Penny Pilot options. 

CBOE assesses Broker-Dealers/Professionals/NonTrading Permit Holder Market Makers a $0.45 per 

contact fee for electronic Penny Pilot Options and 

a $0.65 per contract fee for electronic Non-Penny 

Pilot Options classes. See CBOE’s Fee Schedule. 

Specifically, see note 11 for clearing explanation 

and also Regulatory Circular RG13–038. 

42See CBOE’s Fees Schedule. 

43 Id. 

44See note 39 above. 

45See note 37. 

46The Payment for Order Flow (‘‘PFOF’’) Program 

assesses fees to Specialists and Market Makers 

resulting from Customer orders. Specialists and 

Market Makers pat [sic] a $0.25 per contract PFOF 

for Customer Penny Pilot Options orders. 

differential does not misalign pricing, in 

that Firms already benefit from certain 

pricing advantages that Professionals 

and Broker-Dealers do not also enjoy 

(for example, the Firm Monthly Fee 

Cap).40 The proposed fee reduction, 

which will apply to Firms, but not to 

Professionals and Broker-Dealers, is 

equitable and not unfairly 

discriminatory for the same reasons that 

the Firm Monthly Fee Cap which 

applies to Firms and not to 

Professionals and Broker-Dealers is 

equitable and not unfairly 

discriminatory. The fee reduction 

proposed herein, like the Monthly Firm 

Fee Cap, provides an incentive for Firms 

to transact order flow on the Exchange, 

which order flow brings increased 

liquidity to the Exchange for the benefit 

of all Exchange participants. To the 

extent the purpose of the proposed Firm 

fee reduction is achieved, all the 

Exchange’s market participants, 

including Professionals and BrokerDealers, should benefit from the 

improved market liquidity. Further, 

competitive forces are influencing the 

price reduction in these symbols for 

Firm orders. 

The Exchange desires to incentivize 

Firms that receive reduced rates at other 

options exchanges to select Phlx as a 

venue by offering competitive pricing to 

these market participants. Such 

competitive, differentiated pricing exists 

today on other options exchanges.41 The 

Chicago Board Options Exchange, 

Incorporated (‘‘CBOE’’) has a differential 

as between Clearing Trading Permit 

Holder Proprietary participants (the 

equivalent of Firm on Phlx) and other 

non-Customer, non-market maker 

participants of $0.10 per contract in 

electronic Penny Pilot Options and 

$0.25 [sic] per contract in Non-Penny 

Pilot Options.42 Further, CBOE assesses 

Broker-Dealers/Professionals/NonTrading Permit Holder Market Makers 

between $0.35–$0.44 per contract for 

SPX executions (a singly listed CBOE 

proprietary product) versus the Clearing 

Trading Permit Holder Proprietary (the 

equivalent of Firm on Phlx) who is 

assessed between $0.25–$0.01 per 

contract in SPX for a maximum 

differential of $0.43 per contract in a 

CBOE proprietary product.43 Phlx’s 

differential as between a Firm on the 

one hand and other non-Customer, nonSpecialist/Market Makers on the other is 

not as wide as CBOE’s pricing and 

moreover a competitive offering given 

current pricing differentials on other 

options exchange such as the MIAX 44

and CBOE. 

The Exchange believes there is 

nothing impermissible about Phlx 

offering a discount solely to a Firm, this 

practice is consistent with the above 

examples and longstanding differentials 

between Firms, other Broker-Dealers 

and Professionals. The options 

exchanges have differentiated between: 

Retail customers and professional 

customers; broker/dealers clearing in 

the ‘‘Firm’’ range at OCC and broker/

dealers registered as market makers and 

away market makers; early-adopting 

market makers; and many others. The 

Commission has also permitted price 

differentiation based on whether an 

order is processed manually versus 

electronically. The proposal is 

consistent with previously established 

pricing proposals accepted by the 

Commission. 

The Exchange believes that amending 

the fees assessed to Specialists and 

Market Makers that are on the contraside of an electronically-delivered and 

executed Customer order, excluding 

responses to a PIXL auction, and have 

reached the Monthly Market Maker Cap 

is reasonable because the Exchange 

desires to continue to incentivize 

Specialists and Market Makers by 

offering a discount once these 

conditions are met. While the Exchange 

is increasing the transaction fees which 

Specialists and Market Makers must pay 

if they are on the contra-side of an 

electronically-delivered and executed 

Customer order, excluding responses to 

a PIXL auction and have reached the 

Monthly Market Maker Cap from $0.17 

to $0.18 per contract for removing 

liquidity in Penny Pilot Options, NonPenny Pilot Options and in nonComplex electronic auctions, including 

the Quote Exhaust auction and the 

opening process, the Exchange 

continues to offer these market 

participants the ability to obtain these 

lower fees as compared to other market 

participants. 

The Exchange believes that amending 

the fees assessed to Specialists and 

Market Makers that are on the contraside of an electronically-delivered and 

executed Customer order, excluding 

responses to a PIXL auction; and have 

reached the Monthly Market Maker Cap 

is equitable and not unfairly 

discriminatory because Specialists and 

Market Makers serve an important role 

on the Exchange with regard to order 

interaction and they provide liquidity in 

the marketplace. Specialists and Market 

Makers have obligations to the market 

and regulatory requirements, which 

normally do not apply to other market 

participants.45 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 

electronically-delivered Customer order. 

Section IV, Part A—PIXL Pricing 

The Exchange believes it is 

reasonable, equitable and not unfairly 

discriminatory to amend the PIXL Fees 

in Section IV, Part A, when responding 

to a PIXL auction for the below reasons. 

First, with respect to Penny Pilot 

Options, Specialists and Market Makers 

Responders will continue to be assessed 

a $0.30 per contract fee in Penny Pilot 

Options. The Exchange is proposing to 

increase the fee from $0.30 to $0.48 per 

contract for other Non-Customers 

(Firms, Professionals and BrokerDealers) transacting Penny Pilot 

Options. The differential as between 

Specialists and Market Makers and 

other Non-Customers is reasonable 

because Specialists and Market Makers 

are assessed a $0.30 per contract 

Responder fee for Penny Pilot Options 

electronic transactions plus the Payment 

for Order Flow 46 for a total of fee of 

$0.55 per contract for responding to 

auctions involving a Customer. PFOF 

fees are not paid by other market 

participants. In addition, Specialists and 

Market Makers comprise the majority of 

PIXL Responders on Phlx. Other NonCustomer Responders (Firms, 

Professionals and Broker-Dealers) will 


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47See NYSE MKT Inc. (‘‘NYSE Amex’’) Fees and 

Charges. Specifically, the RFR Response Penny 

Pilot Option Fee (Non-Customer) is $0.55 per 

contract for the CUBE auction. CUBE is NYSE 

Amex’s electronic price improvement auction for 

options. This mechanism is similar to the PIXL 

auction. MIAX assesses a Responder to the Prime 

Auction a per contract Penny Pilot fee of $0.45 per 

contract to all market participants (including 

priority customer). PRIME is MIAX’s electronic 

price improvement auction for options. This 

mechanism is similar to the PIXL auction. 

48See note 37. 

49Specialists and Market Makers pay PFOF of 

$0.70 per contract for Non-Penny Pilot Options 

electronic Customer orders. See Section II of the 

Pricing Schedule. 

50See Section II in the Pricing Schedule. 

51See NYSE MKT Inc. (‘‘NYSE Amex’’) Fees and 

Charges. Specifically, the RFR Response Non-Penny 

Pilot Option Fee (Non-Customer) is $0.90 per 

contract for the CUBE auction. CUBE is NYSE 

Amex’s electronic price improvement auction for 

options. This mechanism is similar to the PIXL 

auction. MIAX assesses a Responder to the Prime 

Auction a per contract Non-Penny Pilot fee of $0.90 

per contract to all market participants (including 

priority customer). PRIME is MIAX’s electronic 

price improvement auction for options. This 

mechanism is similar to the PIXL auction. 

52See note 37. 

53 Id. 

54See Securities Exchange Act Release No. 72943 

(August 28, 2014), 79 FR 52785 (September 4, 2014) 

(SR–MIAX–2014–45). 

now be assessed an increased fee of 

$0.48 per contract rate in Penny Pilot 

Options (today they pay a $0.38 per 

contract fee) when contra to a PIXL 

Order. The Exchange believes that 

market participants will continue to be 

encouraged to respond to PIXL auctions, 

despite the increased fees, because the 

Exchange’s Penny Pilot Options fees for 

Responders remain competitive. The 

proposed Non-Customer fees are lower 

than fees assessed to Non-Customers by 

other options exchanges.47

The proposed increase of $0.18 per 

contract (current $0.30 fee, which is 

proposed to be increased to $0.48 per 

contract) for the Penny Pilot Option fee 

to respond to a PIXL auction for Firms, 

Professionals and Broker-Dealers is 

equitable and not unfairly 

discriminatory because all Firms, 

Professionals and Broker-Dealers are 

treated in a uniform manner. These 

participants will all be subject to this fee 

of $0.48 per contract. Customers will 

continue to be assessed no fee, as is the 

case today and Specialists and Market 

Makers will receive lower prices 

because they have obligations to the 

market and regulatory requirements, 

which normally do not apply to other 

market participants in the continuous 

market, and as such the Exchange 

continues to believe these market 

participants (Specialists and Market 

Makers) should receive certain 

discounts in auctions.48

Second, with respect to Non-Penny 

Pilot Options fees, while Specialists and 

Market Makers Responders will be 

assessed an increased fee of $0.40 per 

contract in Non-Penny Pilot Options 

(today the fee is $0.38 per contract), this 

$0.40 per contract fee will continue to 

be lower as compared to the proposed 

Non-Penny Pilot Options fee of $0.70 

per contract for other Non-Customer 

market participants (Firms, 

Professionals and Broker-Dealers). The 

differential as between Specialist and 

Market Makers and other NonCustomers is reasonable because 

Specialists and Market Makers are 

assessed the $0.40 per contract 

Responder fee for electronic Non-Penny 

Pilot Options transactions plus the 

PFOF 49 for a total fee of $1.10 for 

responding to auctions involving a 

Customer order. PFOF fees are not paid 

by other market participants. In 

addition, Specialists and Market Makers 

comprise the majority of PIXL 

Responders on Phlx. Other NonCustomer Responders (Firms, 

Professionals and Broker-Dealers) will 

now be assessed an increased fee of 

$0.70 per contract fee in Non-Penny 

Pilot Options (today they pay $0.38 per 

contract fee) when contra to a PIXL 

Order. These are the same fees that 

these market participants (Professionals, 

Firms and Broker-Dealers) are assessed 

today for transacting electronic orders in 

Multiply Listed Non-Penny Pilot 

Options.50 In addition, other options 

exchanges have much higher fees for 

auctions.51

The proposed increase of $0.32 per 

contract (current $0.38 fee, which is 

proposed to be $0.70 per contract) for 

the Non-Penny Pilot Option fee to 

respond to a PIXL auction for Firms, 

Professionals and Broker-Dealers is 

equitable and not unfairly 

discriminatory because all Firms, 

Professionals and Broker-Dealers are 

treated in a uniform manner. These 

market participants will all be subject to 

this fee of $0.70 per contract. Customers 

will continue to be assessed no fee, as 

is the case today and Specialists and 

Market Makers have obligations to the 

market and regulatory requirements, 

which normally do not apply to other 

market participants in the continuous 

market and as such the Exchange 

continues to believe these market 

participants (Specialists and Market 

Makers) should receive certain 

discounts in auctions.52 The proposed 

increased fee from $0.38 to $0.40 per 

contract for Specialists and Market 

Makers in Non-Penny Pilot Options 

when responding to a PIXL auction is 

equitable and not unfairly 

discriminatory because as noted these 

market participants have obligations to 

the marketplace.53

The Exchange believes that widening 

the differential as between the Initiating 

Order Fee and the Specialist or Market 

Maker contra party to the PIXL Order 

($0.07 (presuming no discount) vs. 

$0.40 per contract for Non-Penny Pilot 

Options) as compared to the cost to 

transact a PIXL Order today for a 

Specialist or Market Maker ($0.07 vs. 

$0.38 per contract) is equitable and not 

unfairly discriminatory for the reasons 

below. Similarly, the Exchange believes 

that widening the differential as 

between the Initiating Order Fee and the 

Professional, Firm or Broker-Dealer 

contra party to the PIXL Order ($0.07 

(presuming no discount) vs. $0.48 per 

contract for Penny Pilot Options and 

$0.70 per contract for Non-Penny Pilot 

Options) as compared to the cost to 

transact a PIXL Order today for a 

Specialist or Market Maker ($0.07 per 

contract vs. $0.38 per contract) [sic] is 

equitable and not unfairly 

discriminatory for the reasons below. 

Today, MIAX assesses a Responder to 

the Prime Auction a per contract Penny 

Pilot fee of $0.45 per contract to all 

market participants (including priority 

customer) and a Non-Penny Pilot fee of 

$0.90 per contract to all market 

participants (including priority 

customer). PRIME is MIAX’s electronic 

price improvement auction for 

options.54 This mechanism is similar to 

the PIXL auction. The differential for 

transactions on MIAX today is $0.05 for 

a Prime Order (similar to the Phlx 

Initiating Order) versus $0.45/$0.90 per 

contract for Penny/Non-Penny Pilot 

Options. MIAX’s differential is equal to 

or substantially greater than Phlx’s 

proposed differential in PIXL. 

While the proposed fees would 

increase the differential between NonCustomer market participants that 

initiated the PIXL auction and NonCustomer market participants 

responding to the PIXL auction, the 

Exchange believes that despite the fee 

differential market participants will 

continue to be encouraged to transact a 

greater number of PIXL Orders because 

the fees are competitive with or similar 

to those offered at competing options 

exchanges. The Exchange believes that 

it is reasonable, equitable and not 

unfairly discriminatory to add clarifying 

rule text to the Pricing Schedule with 

respect to identifying Non-Customers. 

Section IV, Part B—FLEX Transaction 

Fees 

The Exchange’s proposal to increase 

the FLEX Transaction Fees for Multiply 


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15856 Federal Register / Vol. 80, No. 57 / Wednesday, March 25, 2015 / Notices 

55Specialists and Market Makers are assessed 

$0.30 per contract for transactions executed on the 

trading floor, except in FLEX Options. 

Professionals, Broker-Dealers and Firms pay $0.25 

per contract floor Options Transaction Charges. See 

Section II of the Pricing Schedule. 

56See CBOE’s Fees Schedule. 

57See the NASDAQ Options Market LLC’s 

(‘‘NOM’’) pricing at Chapter XV of NOM’s 

Rulebook. 

58See note 37. 

59Professionals and Broker-Dealers are assessed a 

$0.48 per contract electronic Penny Pilot Options 

Transaction Charge, except for electronic Complex 

Orders, which are assessed $0.35 per contract. See 

Section II of the Pricing Schedule. 

60See note 39. 

61See Section II of the Pricing Schedule. 

62See note 37. 

Listed Options for Professionals, 

Specialists, Market Makers, BrokerDealers and Firms from $0.15 to $0.25 

per contract is reasonable because the 

proposed per contract fee would be the 

same as other fees assessed to NonCustomers, except Specialists and 

Market Makers, for transaction executed 

on the trading floor.55 FLEX Options are 

transacted on the Exchange’s trading 

floor and the process is not automated. 

Exchange staff processes requests for 

FLEX Orders and the costs associated 

with the Exchange’s trading floor have 

risen over the years. The Exchange 

believes that this increase will assist the 

Exchange in offsetting costs while 

keeping such costs competitive with 

other markets. Customers will continue 

to not be assessed a Flex Transaction 

Fee for transactions in Multiply Listed 

Options. 

The Exchange’s proposal to increase 

the FLEX Transaction Fees for Multiply 

Listed Options for Professionals, 

Specialists, Market Makers, BrokerDealers and Firms from $0.15 to $0.25 

per contract is equitable and not 

unfairly discriminatory because the 

Exchange is assessing the same fees for 

FLEX transactions in Multiply Listed 

Options to all market participants, 

except Customers. Customers 

traditionally are not assessed 

transaction fees because Customer 

orders bring valuable liquidity to the 

market. The Exchange believes that the 

cost to transact FLEX Options remains 

competitive with costs at other options 

Exchanges.56

The Exchange believes that utilizing 

the new term ‘‘Non-Customer’’ in the 

FLEX pricing as opposed to 

Professionals Specialists, Market 

Makers, Broker-Dealers and Firms is 

reasonable, equitable and not unfairly 

discriminatory because it adds greater 

clarity to the Pricing Schedule. 

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. The 

Exchange’s proposal to add the term 

‘‘Non-Customer’’ to the Preface of the 

Pricing Schedule does not impose an 

undue burden on competition. 

The Exchange’s proposal to increase 

the Simple Order Customer Fee for 

Removing Liquidity in SPY does not 

misalign the fees related to Customer as 

compared to Non-Customer orders. 

Today, Customers have lower fees 

because Customer liquidity benefits all 

market participants by providing more 

trading opportunities, which attracts 

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 SPY PIXL fees to increase the fees 

applicable to Non-Customers that are 

contra to a PIXL Order, other than the 

Initiating Order, when removing 

liquidity does not impose any undue 

burden on competition as all market 

participants, except Customers will be 

assessed the same increased fee. 

Customer orders bring valuable liquidity 

to the market. 

The Exchange’s proposal to increase 

the Firm electronic Simple Order fee 

from $0.27 to $0.34 per contract in 

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

TWTR, VXX and XLF will not impose 

an unnecessary or inappropriate burden 

on competition because the proposed 

$0.34 per contract fee assessed to Firms, 

which is lower than fees assessed 

Professionals and Broker-Dealers, is 

similar to rates offered by other options 

exchanges.57 Firms will continue to pay 

higher Options Transaction Charges as 

compared to Customers, who bring 

liquidity to the market, and Specialists 

and Market Makers, who have 

obligations.58 Finally, as proposed, 

Firms will be assessed a $0.34 per 

contract electronic fee for electronic 

Simple Orders in these symbols, which 

is a lower fee as compared to 

Professionals and Broker-Dealers.59 The 

Exchange believes that the proposed fee 

differential between Firms and 

Professionals and Broker-Dealers is 

equitable and not unfairly 

discriminatory because it is similar to 

the pricing offered by another options 

exchange.60 Moreover, the proposed 

differential does not misalign pricing 

with respect to Professionals and 

Broker-Dealers because Firms already 

benefit from certain pricing advantages 

that Professionals and Broker-Dealers do 

not also enjoy (for example, the Firm 

Monthly Fee Cap).61 The proposed fee 

reduction, which will apply to Firms, 

but not to Professionals and BrokerDealers, does not impose an undue 

burden on competition because the fee 

reduction provides an incentive for 

Firms to transact order flow on the 

Exchange, which order flow brings 

increased liquidity to the Exchange for 

the benefit of all Exchange participants. 

To the extent the purpose of the 

proposed Firm fee reduction is 

achieved, all the Exchange’s market 

participants, including Professionals 

and Broker-Dealers, should benefit from 

the improved market liquidity. Further, 

competitive forces are influencing the 

price reduction in these symbols for 

Firm orders. 

The Exchange’s proposal for 

Specialists and Market Makers to pay 

certain reduced fees after they have 

satisfied the obligations related to the 

Monthly Market Maker Cap, in all 

Penny Pilot Options, provided they 

have added liquidity, if they are on the 

contra-side of an electronicallydelivered and executed Customer order, 

excluding responses to a PIXL auction 

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.62 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. 

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’s proposal to increase 

PIXL Auction Responder fees for 

Specialists and Market Makers from 

$0.38 to $0.40 per contract in NonPenny Pilot Options and for 

Professionals, Firms and Broker-Dealers 

from $0.30 to $0.48 per contract in 

Penny Pilot Options and from $0.38 to 

$0.70 per contract in Non-Penny Pilot 

Options does not create an undue 

burden on competition because all 

Professionals, Broker-Dealers and Firms 

are being treated in a uniform manner 

and the proposed rates are lower than 

the fees assessed at MIAX and NYSE 


rljohnson on DSK3VPTVN1PROD with NOTICES
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63See notes 47 and 51. 

64See Section II of the Pricing Schedule. 65 15 U.S.C. 78s(b)(3)(A)(ii). 66 17 CFR 200.30–3(a)(12). 

Amex when responding to a price 

improvement auction.63 With respect to 

Specialists and Market Makers, these 

market participants are assessed PFOF 

when contra to an electronicallydelivered Customer order, while other 

market participants are not assessed 

such fees.64 The Exchange does not 

believe the pricing changes will provide 

a competitive advantage for Specialists 

and Market Makers as compared to 

other Non-Customer market participants 

(i.e., Professionals, Broker-Dealers and 

Firms), with respect to intra-market 

competition. Specialists and Markets 

would continue to be assessed lower 

rates as compared to these market 

participants. Further, with respect to 

inter-market competition, the Exchange 

believes that the proposed change will 

enhance the competiveness of the 

Exchange relative to other exchanges 

that offer their own electronic crossing 

mechanism. Other market participants 

will pay the same Options Transaction 

Charges as they pay today for all other 

Multiply Listed Options transactions 

that are not transacted within the PIXL 

auction. 

The Exchange’s proposal to increase 

the FLEX Transaction Fees for Multiply 

Listed Options for Professionals, 

Specialists, Market Makers, BrokerDealers and Firms from $0.15 to $0.25 

per contract does not create an undue 

burden on competition because the 

Exchange is assessing the same fees for 

FLEX transactions in Multiply Listed 

Options on all market participants, 

except Customers. Customers 

traditionally are not assessed 

transaction fees because Customer 

orders bring valuable liquidity to the 

market. 

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.65 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–2015–25 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–Phlx–2015–25. 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 

10:00 a.m. and 3:00 p.m. Copies of such 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–Phlx– 

2015–25, and should be submitted on or 

before April 15, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.66

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–06710 Filed 3–24–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meeting. 

Notice is hereby given, pursuant to 

the provisions of the Government in the 

Sunshine Act, Public Law 94–409, that 

the Securities and Exchange 

Commission will hold an Open Meeting 

on Wednesday, March 25, 2015 at 10:00 

a.m., in the Auditorium, Room L–002. 

The subject matter of the Open 

Meeting will be: 

• The Commission will consider 

whether to propose amendments to Rule 

15b9–1 (Exemption for Certain 

Exchange Members) under the 

Securities Exchange Act of 1934. 

• The Commission will consider 

whether to adopt rules and forms 

related to the offer and sale of securities 

pursuant to Section 3(b) of the 

Securities Act of 1933 to implement 

Section 401 of the Jumpstart Our 

Business Startups Act. 

The duty officer determined that no 

earlier notice thereof was possible. 

At times, changes in Commission 

priorities require alterations in the 

scheduling of meeting items. 

For further information and to 

ascertain what, if any, matters have been 

added, deleted, or postponed, please 

contact: 

The Office of the Secretary at (202) 

551–5400. 


rljohnson on DSK3VPTVN1PROD with NOTICES