Federal Register / Vol. 87, No. 56 / Wednesday, March 23, 2022 / Notices 16529 

7 15 U.S.C. 78s(b)(3)(A)(iii). 

8 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

the proposed rule change at least five business days 

prior to the date of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. The Exchange has satisfied this 

requirement. 

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

would remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system. 

For these reasons, the Exchange 

believes that the proposal is consistent 

with the Act. 

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. As it relates 

to the proposed changes to the appeal 

process under Options 3, Section 20(k), 

the changes are designed to provide 

greater harmonization among similar 

rules and processes across the 

Exchange’s affiliated options exchanges, 

resulting in more efficient regulatory 

compliance for common members. For 

these reasons, the Exchange believes 

that the proposed rule change reflects 

this competitive environment and does 

not impose any undue burden on 

intermarket competition. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A)(iii) of the Act 7 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.8

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

BX–2022–004 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–BX–2022–004. 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 website (https://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 website 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. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. 

You should submit only information 

that you wish to make available 

publicly. All submissions should refer 

to File Number SR–BX–2022–004 and 

should be submitted on or before April 

13, 2022. 

For the Commission, by the Division 

of Trading and Markets, pursuant to 

delegated authority.9

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–06101 Filed 3–22–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94453; File No. SR–Phlx– 

2022–10] 

Self-Regulatory Organizations; Nasdaq 

PHLX LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Open Outcry 

Options Transaction Charges 

March 17, 2022. 

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 March 10, 

2022, Nasdaq 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 

Phlx’s Pricing Schedule at Options 7, 

Section 4, ‘‘Multiply Listed Options 

Fees (Includes options overlying 

equities, ETFs, ETNs and indexes which 

are Multiply Listed) (Excludes SPY).’’ 

The Exchange originally filed the 

proposed pricing changes on March 1, 

2022 (SR–PHLX–2022–09). On March 

10, 2022, the Exchange withdrew that 

filing and submitted this filing. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/phlx/rules, 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 


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3 The term ‘‘Floor Lead Market Maker’’ is a 

member who is registered as an options Lead 

Market Maker pursuant to Options 2, Section 12(a) 

and has a physical presence on the Exchange’s 

Trading Floor. See Phlx’s Pricing Schedule at 

Options 7, Section 1(c). 4 The term ‘‘Floor Market Maker’’ is a Market 

Maker who is neither an SQT or an RSQT. A Floor 

Market Maker may provide a quote in open outcry. 

See Phlx’s Pricing Schedule at Options 7, Section 

1(c). 

The term ‘‘Streaming Quote Trader’’ or ‘‘SQT’’ is 

defined in Options 1, Section 1(b)(54) as a Market 

Maker who has received permission from the 

Exchange to generate and submit option quotations 

electronically in options to which such SQT is 

assigned. See Phlx’s Pricing Schedule at Options 7, 

Section 1(c). The term ‘‘Remote Streaming Quote 

Trader’’ or ‘‘RSQT’’ is defined in Options 1, Section 

1(b)(49) as a Market Maker that is a member 

affiliated with an RSQTO with no physical trading 

floor presence who has received permission from 

the Exchange to generate and submit option 

quotations electronically in options to which such 

RSQT has been assigned. A Remote Streaming 

Quote Trader Organization or ‘‘RSQTO,’’ which 

may also be referred to as a Remote Market Making 

Organization (‘‘RMO’’), is a member organization in 

good standing that satisfies the RSQTO readiness 

requirements in Options 2, Section 1(a). See Phlx’s 

Pricing Schedule at Options 7, Section 1(c). 

5 The term ‘‘floor transaction’’ is a transaction 

that is effected in open outcry on the Exchange’s 

Trading Floor. See Phlx’s Pricing Schedule at 

Options 7, Section 1(c). 

6 Floor transaction fees apply to any ‘‘as of’’ or 

‘‘reversal’’ adjustments for manually processed 

trades originally submitted electronically or 

through FBMS. See Phlx’s Pricing Schedule at 

Options 7, Section 4, footnote 8. 

The Floor Based Management System or ‘‘FBMS’’ 

is an order management system and the gateway for 

the electronic execution of equity, equity index and 

U.S. dollar-settled foreign currency option orders 

represented by Floor Brokers on the Exchange’s 

Options Floor. Floor Brokers contemporaneously 

upon receipt of an order and prior to the 

representation of such an order in the trading 

crowd, record all options orders represented by 

such Floor Broker to FBMS, which creates an 

electronic audit trail. The execution of orders to 

Phlx’s electronic trading system also occurs via 

FBMS. The FBMS application is available on handheld tablets and stationary desktops. 

7 The term ‘‘Floor Broker’’ means an individual 

who is registered with the Exchange for the 

purpose, while on the Options Floor, of accepting 

and handling options orders. See Phlx’s Pricing 

Schedule at Options 7, Section 1(c). 

8 Transactions in SPY originating on the 

Exchange floor will be subject to the Multiply 

Listed Options Fees (see Multiply Listed Options 

Fees in Options 7, Section 4). However, if one side 

of the transaction originates on the Exchange floor 

and any other side of the trade was the result of an 

electronically submitted order or a quote, then these 

fees will apply to the transactions which originated 

on the Exchange floor and contracts that are 

executed electronically on all sides of the 

transaction. The one side of the transaction which 

originates on the Exchange floor will count toward 

the volume which qualifies a participant for the 

Simple Order Rebate for Adding Liquidity for Lead 

Market Makers and Market Makers in SPY. See 

Options 7, Section 3, Part C. 

9 The term ‘‘Professional’’ applies to transactions 

for the accounts of Professionals, as defined in 

Options 1, Section 1(b)(45) 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 Phlx’s Pricing 

Schedule at Options 7, Section 1(c). 

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

transaction which is not subject to any of the other 

transaction fees applicable within a particular 

category. See Phlx’s Pricing Schedule at Options 7, 

Section 1(c). 

11 The term ‘‘Firm’’ applies to any transaction 

that is identified by a member or member 

organization for clearing in the Firm range at The 

Options Clearing Corporation (‘‘OCC’’). See Phlx’s 

Pricing Schedule at Options 7, Section 1(c). 

12 The term ‘‘Customer’’ applies to any 

transaction that is identified by a member or 

member organization for clearing in the Customer 

range at OCC which is not for the account of a 

broker or dealer or for the account of a 

‘‘Professional’’ (as that term is defined in Options 

1, Section 1(b)(45)). See Phlx’s Pricing Schedule at 

Options 7, Section 1(c). 

13 Today, Floor Brokers are not assessed any 

Options Transaction Charges. 

14 Singly Listed Options are subject to pricing 

within Options 7, Section 5C. 15 Index Options are subject to pricing within 

Options 7, Section 5A, and B. Today, Options 

Transaction Charges in non-Penny Options exclude 

NDX, NDXP and XND. 

16 FLEX Options are subject to pricing within 

Options 7, Section 6B. 

17 Strategy transactions include dividend, merger, 

short stock interest, reversal and conversion, jelly 

roll and box spread strategies as described within 

Options 7, Section 4. 

18 Floor Qualified Contingent Cross (‘‘QCC’’) 

Orders, as described within Options 8, Section 

30(e), are subject to pricing noted within Options 

7, Section 4. Floor QCC Orders do not qualify as 

floor transactions as they are not executed in open 

outcry. 

19 15 U.S.C. 78f(b). 

20 15 U.S.C. 78f(b)(4) and (5). 

21 Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) 

(‘‘Regulation NMS Adopting Release’’). 

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 

Phlx proposes to amend its Pricing 

Schedule within Options 7, Section 4, 

‘‘Multiply Listed Options Fees (Includes 

options overlying equities, ETFs, ETNs 

and indexes which are Multiply Listed) 

(Excludes SPY).’’ Specifically, Phlx 

proposes to increase the Lead Market 

Maker 3 and Market Maker 4 Floor 5

Options Transaction Charges 6 in 

multiply-listed Penny and non-Penny 

Symbols and pay a Floor Broker 7 a 

rebate when these parties are contra 

each other in certain open outcry 

transactions. 

Today, the Exchange assesses Options 

Transaction Charges in Multiply Listed 

options, including options overlying 

equities, ETFs, ETNs and indexes and 

excluding options in SPY.8 The 

Exchange currently assesses the 

following Floor Options Transaction 

Charges in multiply-listed Penny and 

non-Penny Symbols: $0.05 per contract 

for a Professional,9 $0.35 per contract 

for a Lead Market Maker and Market 

Maker, and $0.25 per contract for a 

Broker-Dealer 10 and Firm.11

Customers 12 are not assessed an 

Options Transaction Charge in multiplylisted Penny or non-Penny Symbols. 

The Exchange proposes to increase 

the Floor Lead Market Maker and Floor 

Market Maker Options Transaction 

Charges in Penny and non-Penny 

Symbols from $0.35 to $0.50 per 

contract and pay a Floor Broker 13 a new 

$0.15 per contract rebate when a Floor 

Broker executes an order contra a Floor 

Lead Marker Maker or Floor Market 

Maker in open outcry in multiply-listed 

Penny or non-Penny Symbols. The 

aforementioned pricing will not apply 

to singly listed options,14 index 

options,15 FLEX Options,16 strategy 

transactions,17 and Floor Qualified 

Contingent Cross Orders.18

The Exchange believes that assessing 

a Floor Lead Market Maker and a Floor 

Market Maker an increased fee of $0.15 

per contract (increase from $0.35 to 

$0.50 per contract) and paying a Floor 

Broker a rebate of $0.15 per contract 

will incentivize Floor Brokers to attract 

a greater number of orders to Phlx’s 

Trading Floor and allow Floor Lead 

Market Makers and Floor Market Makers 

to interact with those orders. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,19 in general, and furthers the 

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

of the Act,20 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, and is not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

The Commission and the courts have 

repeatedly expressed their preference 

for competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. In Regulation NMS, while 

adopting a series of steps to improve the 

current market model, the Commission 

highlighted the importance of market 

forces in determining prices and SRO 

revenues and, also, recognized that 

current regulation of the market system 

‘‘has been remarkably successful in 

promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 21


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22 NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 

2010). 

23 See NetCoalition, at 534–535. 

24 Id. at 537. 

25 Id. at 539 (quoting Securities Exchange Act 

Release No. 59039 (December 2, 2008), 73 FR 

74770, 74782–83 (December 9, 2008) (SR– 

NYSEArca-2006–21)). 

26 Today, BOX pays Floor Brokers a $0.075 per 

contract rebate for all Broker Dealer and Market 

Maker QOO Orders presented on the Trading Floor 

and a $0.05 per contract rebate for all Professional 

Customer QOO Orders presented on the Trading 

Floor. Unlike BOX who pays a $0.05 per contract 

rebate for both sides of the QOO Order, the 

Exchange would pay a Floor Broker a rebate of 

$0.15 per contract for orders in open outcry contra 

Floor Lead Market Makers and Floor Market Makers 

in multiply-listed Penny and non-Penny Symbols. 

See BOX’s Fee Schedule at Section III. BOX’s rebate 

does not apply to Public Customer executions, 

executions subject to the Strategy QOO Order Fee 

Cap, or Broker Dealer executions where the Broker 

Dealer is facilitating a Public Customer. See BOX’s 

Fee Schedule at Section II. 

27 BOX assesses its Market Makers a manual 

transaction fee of $0.35 per contract in Penny and 

Non-Penny Interval Classes. See BOX’s Fee 

Schedule at Section II. 

28 Participants who desire to have an order 

executed on Phlx’s Trading Floor would provide 

that order to a Floor Broker to be represented on 

the Trading Floor. 

Likewise, in NetCoalition v. Securities 

and Exchange Commission 22

(‘‘NetCoalition’’) the D.C. Circuit upheld 

the Commission’s use of a market-based 

approach in evaluating the fairness of 

market data fees against a challenge 

claiming that Congress mandated a costbased approach.23 As the court 

emphasized, the Commission ‘‘intended 

in Regulation NMS that ‘market forces, 

rather than regulatory requirements’ 

play a role in determining the market 

data . . . to be made available to 

investors and at what cost.’’ 24

Further, ‘‘[n]o one disputes that 

competition for order flow is ‘fierce.’ 

. . . As the SEC explained, ‘[i]n the U.S. 

national market system, buyers and 

sellers of securities, and the brokerdealers that act as their order-routing 

agents, have a wide range of choices of 

where to route orders for execution’; 

[and] ‘no exchange can afford to take its 

market share percentages for granted’ 

because ‘no exchange possesses a 

monopoly, regulatory or otherwise, in 

the execution of order flow from broker 

dealers’. . . .’’ 25 Although the court and 

the SEC were discussing the cash 

equities markets, the Exchange believes 

that these views apply with equal force 

to the options markets. 

The Exchange’s proposal to increase 

the Floor Lead Market Maker and the 

Floor Market Maker Options 

Transaction Charges in multiply-listed 

Penny and non-Penny Symbols from 

$0.35 to $0.50 per contract and pay a 

Floor Broker a new $0.15 per contract 

rebate when a Floor Broker executes an 

order contra a Floor Lead Marker Maker 

or a Floor Market Maker in open outcry 

in multiply-listed Penny or non-Penny 

Symbols is reasonable. The Exchange 

desires to offer a $0.15 per contract 

rebate to the executing Floor Broker to 

attract additional order flow to the Phlx 

Trading Floor. A similar flat rebate is 

offered to Floor Brokers on BOX 

Exchange LLC (‘‘BOX’’).26 The proposed 

rebate would be directed to the Floor 

Broker and not to the Floor Lead Market 

Maker or the Floor Market Maker who 

is assessed an Options Transaction 

Charge. In other words, the rebate is 

paid to the Floor Broker who executed 

the order in open outcry contra the 

Floor Lead Market Maker or the Floor 

Market Maker. The rebate would be paid 

from revenues obtained by assessing 

Floor Lead Market Makers and Floor 

Market Makers the proposed $0.50 per 

contract Options Transaction Charge 

instead of the current $0.35 per contract 

Options Transaction Charge.27 The 

Exchange believes it is reasonable to 

only apply the rebate to Floor Brokers 

and not to Floor Lead Market Makers 

and Floor Market Makers. Floor Lead 

Market Makers and Floor Market Makers 

only represent their own interest on the 

Trading Floor and therefore do not need 

a similar incentive. Unlike Floor Lead 

Market Makers and Floor Market 

Makers, Floor Brokers act as agents in 

representing orders on the Exchange’s 

Trading Floor. Participants who desire 

to have an order executed on Phlx’s 

Trading Floor would provide that order 

to a Floor Broker to be represented on 

the Trading Floor. Floor Lead Market 

Makers and Floor Market Makers may 

interact with orders represented by the 

Floor Broker in open outcry on the 

Trading Floor. Finally, Floor Lead 

Market Makers and Floor Market Makers 

may choose to conduct their business on 

a Trading Floor or in an electronic 

market, unlike Floor Brokers, who have 

a business model that is naturally tied 

to the physical trading space. While this 

proposal increases the Floor Options 

Transaction Charges for Floor Lead 

Market Makers and Floor Market Makers 

in open outcry in multiply-listed Penny 

or non-Penny Symbols when a Floor 

Broker executes an order contra a Floor 

Lead Market Maker or a Floor Market 

Maker, the Exchange believes that the 

ability to attract a greater amount of 

order flow on the Exchange’s Trading 

Floor will allow Floor Lead Market 

Makers and Floor Market Makers to 

participate in a greater number of open 

outcry transactions. 

Today, market participants may send 

order flow to the Trading Floor by either 

investing in technology, systems and 

personnel to participate on the Trading 

Floor, or utilizing the services of a Floor 

Broker. Offering the proposed rebate to 

Floor Brokers will allow Floor Brokers 

to price their services at a level that 

would enable them to attract additional 

order flow to the Exchange. To the 

extent Floor Brokers are able to attract 

additional orders; they will gain 

important information that would allow 

them to solicit future orders for 

participation in other trades. This will 

in turn, benefit other Exchange 

participants through additional liquidity 

on the Trading Floor with which they 

may interact. Finally, the Exchange 

believes that the rebate will promote 

competition by allowing Floor Brokers 

to competitively price their services and 

for the Exchange to remain competitive 

with other exchanges. 

The Exchange’s proposal to increase 

the Floor Lead Market Maker and the 

Floor Market Maker Options 

Transaction Charges in multiply-listed 

Penny and non-Penny Symbols from 

$0.35 to $0.50 per contract and pay a 

Floor Broker a new $0.15 per contract 

rebate when a Floor Broker executes an 

order contra a Floor Lead Marker Maker 

or a Floor Market Maker in open outcry 

in multiply-listed Penny or non-Penny 

Symbols is equitable and not unfairly 

discriminatory. The Exchange believes 

it is equitable and not unfairly 

discriminatory to only apply the rebate 

to Floor Brokers and not to Floor Lead 

Market Makers and Floor Market 

Makers. Floor Lead Market Makers and 

Floor Market Makers only represent 

their own interest on the Trading Floor 

and therefore do not need a similar 

incentive. Unlike Floor Lead Market 

Makers and Floor Market Makers, Floor 

Brokers act as agents in representing 

orders on the Exchange’s Trading Floor. 

They serve a valuable function in open 

outcry in allowing market participants 

to have their orders represented in this 

venue without the need to be a member 

of the Exchange.28 Further, Floor Lead 

Market Makers and Floor Market Makers 

benefit from having access to interact 

with orders that are made available in 

open outcry on the Trading Floor. Floor 

Lead Market Makers and Floor Market 

Makers may choose to conduct their 

business on a Trading Floor or in an 

electronic market, unlike Floor Brokers, 

who have a business model that is 

naturally tied to the physical trading 

space. The Exchange believes that it is 

equitable and not unfairly 

discriminatory to assess Floor Lead 

Market Makers and Floor Market Makers 

a higher Options Transaction Charge 

because they have the benefit of trading 


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29 15 U.S.C. 78s(b)(3)(A)(ii). 

on the Trading Floor or in an electronic 

venue if they so choose. The proposed 

$0.50 Options Transaction Charge for 

Floor Lead Market Makers and Floor 

Market Makers and the $0.15 per 

contract rebate for Floor Brokers will be 

uniformly assessed and paid, 

respectively, to all Floor Lead Market 

Makers, Floor Market Makers, and Floor 

Brokers participating in open outcry 

trades in multiply-listed Penny and 

non-Penny symbols. 

The Exchange believes that its 

proposal to not pay a rebate when an 

order is executed electronically or for 

orders that are singly listed options, 

index options, FLEX Options, strategy 

transactions, and Floor QCC Orders is 

reasonable, equitable and not unfairly 

discriminatory as pricing for these types 

of transactions are specified separately 

from Floor Options Transaction Charges 

within Options 7, Section 4 of 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. 

Inter-Market Competition 

The proposal does not impose an 

undue burden on inter-market 

competition. The Exchange believes its 

proposal remains competitive with 

other options markets and will offer 

market participants with another choice 

of where to transact options. The 

Exchange notes that it operates in a 

highly competitive market in which 

market participants can readily favor 

competing venues if they deem fee 

levels at a particular venue to be 

excessive, or rebate opportunities 

available at other venues to be more 

favorable. In such an environment, the 

Exchange must continually adjust its 

fees to remain competitive with other 

exchanges that have been exempted 

from compliance with the statutory 

standards applicable to exchanges. 

Because competitors are free to modify 

their own fees in response, and because 

market participants may readily adjust 

their order routing practices, the 

Exchange believes that the degree to 

which fee changes in this market may 

impose any burden on competition is 

extremely limited. 

Moreover, the proposal is designed to 

encourage Floor Brokers to attract a 

greater amount of order flow to Phlx’s 

Trading Floor. To the extent that the 

proposed change attracts additional 

order flow to Phlx’s Trading Floor, this 

increased order flow would continue to 

make the Exchange a more competitive 

venue for order execution. 

Intra-Market Competition 

The proposed amendments do not 

impose an undue burden on intramarket competition. 

The Exchange’s proposal to increase 

the Floor Lead Market Maker and the 

Floor Market Maker Options 

Transaction Charges in multiply-listed 

Penny and non-Penny Symbols from 

$0.35 to $0.50 per contract and pay a 

Floor Broker a new $0.15 per contract 

rebate when a Floor Broker executes an 

order contra a Floor Lead Marker Maker 

or a Floor Market Maker in open outcry 

in multiply-listed Penny or non-Penny 

Symbols does not impose an undue 

burden on competition. Only applying a 

rebate to Floor Brokers and not to Floor 

Lead Market Makers and Floor Market 

Makers does not impose an undue 

burden on competition because Floor 

Lead Market Makers and Floor Market 

Makers only represent their own interest 

on the Trading Floor and therefore do 

not need a similar incentive. Unlike 

Floor Lead Market Makers and Floor 

Market Makers, Floor Brokers act as 

agents in representing orders on the 

Exchange’s Trading Floor. They serve a 

valuable function in open outcry in 

allowing market participants to have 

their orders represented in this venue 

without the need to be a member of the 

Exchange. Further, Floor Lead Market 

Makers and Floor Market Makers benefit 

from having access to interact with 

orders that are made available in open 

outcry on the Trading Floor. Floor Lead 

Market Makers and Floor Market Makers 

may choose to conduct their business on 

the Trading Floor or in an electronic 

market, unlike Floor Brokers, who have 

a business model that is naturally tied 

to the physical trading space. The 

Exchange believes that assessing Floor 

Lead Market Makers and Floor Market 

Makers a higher Options Transaction 

Charge does not impose an undue 

burden on competition because they 

have the benefit of trading on a Trading 

Floor or in an electronic venue if they 

so choose. The proposed $0.50 Options 

Transaction Charge for Floor Lead 

Market Makers and Floor Market Makers 

and the $0.15 per contract rebate for 

Floor Brokers will be uniformly 

assessed and paid, respectively, to all 

Floor Lead Market Makers, Floor Market 

Makers, and Floor Brokers participating 

in open outcry trades in multiply-listed 

Penny and non-Penny symbols. 

The Exchange believes that its 

proposal to not pay a rebate when an 

order is executed electronically or for 

orders that are singly listed options, 

index options, FLEX Options, strategy 

transactions, and Floor QCC Orders 

does not impose an undue burden on 

competition as pricing for these types of 

transactions are specified separately 

from Floor Options Transaction Charges 

within Options 7, Section 4 of the 

Pricing Schedule. 

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.29

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: (i) Necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) 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–2022–10 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–2022–10. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 


jspears on DSK121TN23PROD with NOTICES1
Federal Register / Vol. 87, No. 56 / Wednesday, March 23, 2022 / Notices 16533 

30 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 See Phlx Options 3, Section 20(l). 

4 See Phlx Options 3, Section 20(l) for analogous 

language. 

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 website 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. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–Phlx–2022–10 and should 

be submitted on or before April 13, 

2022. 

For the Commission, by the Division 

of Trading and Markets, pursuant to 

delegated authority.30

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–06094 Filed 3–22–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94443; File No. SR–MRX– 

2022–03] 

Self-Regulatory Organizations; Nasdaq 

MRX, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Harmonize Various 

Processes Under Options 3, Section 20 

Across the Affiliated Nasdaq Options 

Exchanges 

March 17, 2022. 

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 March 8, 

2022, Nasdaq MRX, LLC (‘‘MRX’’ 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 harmonize 

various processes under Options 3, 

Section 20 across the affiliated Nasdaq 

options exchanges. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/mrx/rules, 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 Exchange proposes to harmonize 

its existing processes with those of its 

affiliate Nasdaq Phlx LLC (‘‘Phlx’’) 

concerning the review of decisions on 

appeal under Options 3, Section 20. The 

Exchange also proposes a number of 

non-substantive changes. Each change is 

discussed in detail below. 

Appeal 

Today, Options 3, Section 20(k) 

governs the appeal process for 

determinations by Exchange staff made 

under this Rule, including obvious error 

determinations. Specifically, if a 

Member affected by a determination 

under this Rule so requests within the 

permitted time period, an Exchange 

Review Council panel will review 

decisions made by the Official under 

Options 3, Section 20, including 

whether an obvious error occurred and 

whether the correct determination was 

made. A request for review on appeal 

must be made in writing via email or 

other electronic means specified from 

time to time by the Exchange in an 

Options Trader Alert distributed to 

Members within thirty (30) minutes 

after the party making the appeal is 

given notification of the initial 

determination being appealed. The 

Exchange Review Council panel shall 

review the facts and render a decision 

as soon as practicable, but generally on 

the same trading day as the execution(s) 

under review. On requests for appeal 

received after 3:00 p.m. Eastern Time, a 

decision will be rendered as soon as 

practicable, but in no case later than the 

trading day following the date of the 

execution under review. Furthermore, if 

the Exchange Review Council panel 

votes to uphold the decision made 

under this Rule, the Exchange will 

assess a fee (‘‘Appeal Fee’’) of $5,000 

against the Member(s) who initiated the 

request for appeal. 

The Exchange proposes generally to 

maintain its current appeal process with 

certain adjustments to harmonize its 

process with that of its affiliate, Phlx. 

First, while Phlx similarly requires the 

parties to submit a request for review 

within thirty (30) minutes of being 

notified of the determination being 

appealed, Phlx also provides parties 

with additional time to submit their 

request if the notification occurs later in 

the trading day. In particular, if the 

notification is made after 3:30 p.m. 

Eastern Time, either party has until 9:30 

a.m. Eastern Time on the next trading 

day to submit a request for review.3

Similar to Phlx, the Exchange believes 

that this flexibility will be helpful for 

Members in submitting their appeal 

requests in a timely manner, 

particularly where notification of the 

Official’s decision was received later in 

the trading day, and therefore proposes 

to adopt this provision in Options 3, 

Section 20(k)(2). 

Second, the Exchange proposes to 

amend its provisions for when the 

Exchange Review Council panel must 

render a decision on requests for appeal 

by harmonizing to Phlx’s process. 

Specifically, the Exchange proposes in 

Options 3, Section 20(k)(2) that the 

Exchange Review Council panel shall 

review the facts and render a decision 

on the day of the transaction, or the next 

trade day in the case where a request is 

properly made after 3:30 p.m. on the 

day of the transaction or where the 

request is properly made the next trade 

day.4 The proposed language modifies 

the current process by extending the 

current cutoff time from 3:00 to 3:30 

p.m. Eastern Time for the Exchange 

Review Council panel to render a 

decision on the next trading day, and by 


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