Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Notices 20475 

24 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78a. 

2 17 CFR 240.19b–4. 

3The 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). 

4The 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). 

5Floor 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. 

6The 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 Options 8, Section 2(a)(3). 

7A 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 

Options 8, Section 2(a)(4). 

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). 

8The 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). 

9The term ‘‘Firm’’ applies to any transaction that 

is identified by a member or member organization 

for clearing in the Firm range at OCC. See Phlx’s 

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

10The 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 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). 

should be submitted on or before April 

28, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.24

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–07337 Filed 4–6–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94573; File No. SR–Phlx– 

2022–14] 

Self-Regulatory Organizations; Nasdaq 

PHLX LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Options 7, 

Section 4 of the Pricing Schedule 

April 1, 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 22, 

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).’’ 

Additionally, the Exchange proposes 

to make a technical amendment and add 

descriptions of three additional terms 

within Options 7, Section 1, General 

Provisions. 

The Exchange originally filed SR– 

Phlx–2022–08 on March 1, 2022. On 

March 10, 2022, the Exchange withdrew 

SR–Phlx–2022–08 and submitted SR– 

Phlx–2022–12. On March 22, 2022, the 

Exchange withdrew SR–Phlx–2022–12 

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 

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 decrease the Professional 3

Floor 4 Options Transaction Charges 5 in 

multiply-listed Penny and non-Penny 

Symbols. Additionally, the Exchange 

proposes amendments to Options 7, 

Section 1, General Provisions. Each 

change is described below. 

Options 7, Section 4 

Today, the Exchange assesses Options 

Transaction Charges in Multiply Listed 

options, including options overlying 

equities, ETFs, ETNs and indexes and 

excluding options in SPY. The 

Exchange currently assesses the 

following Floor Options Transaction 

Charges in multiply-listed Penny and 

non-Penny Symbols: $0.25 per contract 

for a Professional, $0.35 per contract for 

a Floor Lead Market Maker 6 and Floor 

Market Maker,7 and $0.25 per contract 

for a Broker-Dealer 8 and Firm.9

Customers 10 are not assessed an 

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

The Exchange proposes to decrease 

the Floor Options Transaction Charges 

for Professionals in multiply-listed 

Penny and non-Penny Symbols from 

$0.25 to $0.05 per contract. The 

Exchange believes the decreased 

Options Transaction Charges will attract 

a greater amount of Professional orders 

to Phlx’s Trading Floor. 

Options 7, Section 1 

The Exchange proposes to make a 

technical amendment within Options 7, 

Section 1, General Provisions. The 

Exchange proposes to remove the words 

‘‘on and’’ from description of ‘‘Market 

Maker’’ within Options 7, Section 1(c). 

Those words are not necessary. The 

amended description of Market Maker 

would state, ‘‘The term ‘Market Maker’ 

is defined in Options 1, Section 1(b)(28) 

as a member of the Exchange who is 

registered as an options Market Maker 

pursuant to Options 2, Section 12(a). A 

Market Maker includes SQTs and 

RSQTs as well as Floor Market Makers.’’ 

The Exchange proposes to add three 

additional descriptions to Options 7, 

Section 1(c). Specifically, the Exchange 


khammond on DSKJM1Z7X2PROD with NOTICES
20476 Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Notices 

11 15 U.S.C. 78f(b). 

12 15 U.S.C. 78f(b)(4) and (5). 

13Securities Exchange Act Release No. 51808 

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

(‘‘Regulation NMS Adopting Release’’). 

14NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 

2010). 

15See NetCoalition, at 534–535. 

16 Id. at 537. 

17 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)). 

18 In addition to the Professional fee of $0.10 per 

contract, BOX assesses the following Penny and 

Non-Penny Interval Classes manual transactions 

fees: $0.25 per contract to Broker Dealers and $0.35 

per contract to Market Makers. BOX does not assess 

Public Customers or Broker Dealers facilitating a 

Public Customer a Penny and Non-Penny Interval 

Classes manual transactions fee. See BOX’s Fee 

Schedule at Section II. 

proposes to define the terms ‘‘Floor 

Broker,’’ ‘‘Floor Lead Market Maker,’’ 

and ‘‘Floor Market Maker.’’ These terms 

are currently defined within Options 8, 

Section 2(a)(2)–(4). The Exchange 

proposes to add these terms to Options 

7, Section 1(c) for greater transparency 

when referencing the Pricing Schedule. 

• The Exchange proposes to define a 

‘‘Floor Broker’’ to mean an individual 

who is registered with the Exchange for 

the purpose, while on the Options 

Floor, of accepting and handling options 

orders. 

• The Exchange proposes to define a 

‘‘Floor Lead Market Maker’’ to mean 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. 

• The Exchange propose to define a 

‘‘Floor Market Maker’’ to mean a Market 

Maker who is neither an SQT or an 

RSQT. A Floor Market Maker may 

provide a quote in open outcry. 

The Exchange believes that these 

amendments to Options 7, Section 1 

will bring greater clarity to the Pricing 

Schedule. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,11 in general, and furthers the 

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

of the Act,12 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.’’ 13

Likewise, in NetCoalition v. Securities 

and Exchange Commission 14

(‘‘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.15 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.’’ 16

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’. . . .’’ 17 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. 

Options 7, Section 4 

The Exchange’s proposal to decrease 

the Floor Options Transaction Charges 

for Professionals in multiply-listed 

Penny and non-Penny Symbols from 

$0.25 to $0.05 per contract is reasonable 

because the decreased fee should attract 

a greater amount of Professional orders 

to Phlx’s Trading Floor. Today, BOX 

Exchange LLC (‘‘BOX’’) assesses a 

Professional Customer Fee of $0.10 per 

contract in Penny and Non-Penny 

Symbols for manual transactions.18 By 

decreasing its Professional Floor 

Options Transaction Charge, the 

Exchange believes it will be able to 

compete more effectively with BOX for 

options order flow because of the lower 

Professional fee. 

The Exchange’s proposal to decrease 

the current Floor Options Transaction 

Charges for Professionals in multiplylisted Penny and non-Penny Symbols 

from $0.25 to $0.05 per contract is 

equitable and not unfairly 

discriminatory. Today, Customers are 

not assessed an Options Transaction 

Charge in multiply-listed Penny or nonPenny Symbols because Customer order 

flow is unique. Customer liquidity 

benefits all market participants by 

providing more trading opportunities, 

which attracts Floor Lead Marker 

Makers and Floor 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 believes that lowering the 

Professional Floor Options Transaction 

Charges is similarly beneficial as the 

lower fees may cause market 

participants to select Phlx’s Trading 

Floor as a venue to send Professional 

order flow, which benefits all market 

participants by attracting valuable 

liquidity to the market and thereby 

enhancing the trading quality and 

efficiency for all market participants. 

Today, Floor Lead Market Makers and 

Floor Market Makers are assessed the 

highest Penny and non-Penny Options 

Transaction Charges. Customers are not 

assessed a Penny or non-Penny Options 

Transaction Charge. Today, 

Professionals, Broker-Dealers and Firms 

pay a Floor Options Transaction Charge 

of $0.25 per contract. With this 

proposal, Professionals would continue 

to be assessed a lower Options 

Transaction Charges in multiply-listed 

Penny and non-Penny Symbols as 

compared to Floor Lead Market Makers 

and Floor Market Makers. Floor Lead 

Market Makers and Floor Market Makers 

have a time and place advantage on the 

Trading Floor with respect to orders, 

unlike other market participants. A 

Professional, Broker-Dealer or a Firm 

would necessarily require a Floor 

Broker to represent their trading interest 

on the Trading Floor as compared to a 

Floor Lead Market Maker or Floor 

Market Maker that could directly 

transact such orders on the Trading 

Floor. Further, the Exchange believes 

that in order to attract orders from a 

Professionals, Broker-Dealers or a Firm, 

via a Floor Broker, the rates must be 

competitive with rates at other trading 

floors. With respect to Firms, the 

Exchange notes that Firms are subject to 

a Monthly Firm Fee Cap of $75,000. 

Firm Floor Option Transaction Charges 

along with Qualified Contingent Cross 

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 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Notices 20477 

19See Options 7, Section 4, which states, ‘‘Firms 

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 will 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 this Options 7, Section 4) 

will be excluded from the Monthly Firm Fee Cap. 

NDX, NDXP, and XND Options Transactions will be 

excluded from the Monthly Firm Fee Cap. Reversal 

and conversion, jelly roll and box spread strategy 

executions (as defined in this Options 7, Section 4) 

will be included in the Monthly Firm Fee Cap. QCC 

Transaction Fees are included in the calculation of 

the Monthly Firm Fee Cap. Member organizations 

must notify the Exchange in writing of all accounts 

in which the member is not trading in its own 

proprietary account. The Exchange will not make 

adjustments to billing invoices where transactions 

are commingled in accounts which are not subject 

to the Monthly Firm Fee Cap.’’ 

20See Options 7, Section 4, which states, ‘‘. . . 

In addition, the Broker-Dealer Floor Options 

Transaction Charge (including Cabinet Options 

Transaction Charges) will be waived for members 

executing facilitation orders pursuant to Options 8, 

Section 30 when such members would otherwise 

incur this charge for trading in their own 

proprietary account contra to a Customer (‘BDCustomer Facilitation’), if the member’s BDCustomer Facilitation average daily volume 

(including both FLEX and non-FLEX transactions) 

exceeds 10,000 contracts per day in a given month. 

NDX, NDXP, and XND Options Transactions will be 

excluded from each of the waivers set forth in the 

above paragraph.’’ 

21Customers are not assessed Options 

Transaction Charges for multiply-listed options in 

Penny and non-Penny Symbols. 

22A Professional by definition enters 390 orders 

per day on average over a calendar month which 

the Exchange believes exceeds the number of retail 

Customer orders in a single day. 

23The Exchange notes that BOX assesses the same 

fees for Professionals and Broker-Dealers for nonauction transactions within Section I, A of BOX’s 

Fee Schedule, PIP and COPIP transactions within 

Section I, B of BOX’s Fee Schedule, Facilitation and 

Solicitation transactions within Section I, C of 

BOX’s Fee Schedule, and Complex Orders within 

Section III, A of BOX’s Fee Schedule. See BOX’s 

Fee Schedule. BOX has stated in prior rule changes 

that, ‘‘Professional Customers, while Public 

Customers by virtue of not being Broker Dealers, 

generally engage in trading activity more similar to 

Broker Dealer proprietary trading accounts 

(submitting more than 390 standard orders per day 

on average).’’ See Securities Exchange Act Release 

No. 73547 (November 6, 2014), 79 FR 67520 at 

67523 (November 13, 2014) (SR–BOX–2014–25) 

(Notice of Filing and Immediate Effectiveness of a 

Proposed Rule Change To Amend the Fee Schedule 

on the BOX Market LLC (‘‘BOX’’) Options Facility). 

Notwithstanding this justification, BOX assesses 

lower Professional manual transactions as 

compared to Broker-Dealers and Market Makers. 

24BOX assess a Professional a manual fee of $0.10 

per contract in Penny and Non-Penny Interval 

Classes, while assessing $0.25 per contract to 

Broker Dealers and $0.35 per contract to Market 

Makers for manual transactions in Penny and NonPenny Interval Classes. See BOX’s Fee Schedule at 

Section II. 

25See Options 7, Section 4 which states, ‘‘QCC 

Transaction Fees for a Lead Market Maker, Market 

Maker, Firm and Broker-Dealer are $0.20 per 

contract. Customers and Professionals are not 

assessed a QCC Transaction Fee. QCC Transaction 

Fees apply to electronic QCC Orders, as defined in 

Options 3, Section 12, and Floor QCC Orders, as 

defined in Options 8, Section 30(e).’’ 

account.19 Finally, with respect to 

Broker-Dealers, today the Exchange 

waives the Floor Options Transaction 

Charge for Broker-Dealers executing 

facilitation orders pursuant to Options 

8, Section 30 when such members 

would otherwise incur this charge for 

trading in their own proprietary account 

contra to a Customer (‘‘BD-Customer 

Facilitation’’), if the member’s BDCustomer Facilitation average daily 

volume (including both FLEX and nonFLEX transactions) exceeds 10,000 

contracts per day in a given month.20

The Exchange notes that both Firms and 

Broker-Dealers have the ability to 

reduce their Options Transaction 

Charges as compared to Professionals. 

The Exchange believes it is equitable 

and not unfairly discriminatory to 

assess a Professional Floor Options 

Transaction Charge that is less favorable 

than Customers but more favorable than 

Firms, and Broker-Dealers and continue 

to assess a lower fee as compared to 

Floor Lead Market Makers, Floor Market 

Makers. Professionals have access to 

more information than Customers and 

therefore are being assessed a less 

favorable Options Transaction Charge 21

as compared to Customers. While 

Professionals may have the same 

technological and informational 

advantages as Broker-Dealers trading for 

their own account,22 the Exchange 

believes that lowering the current 

Professional Floor Options Transaction 

Charges to range between that of a 

Customer and other non-Customer 

participants (Floor Lead Market Makers, 

Floor Market Makers, Firms, and 

Broker-Dealers) is equitable and not 

unfairly discriminatory because the 

potential increased volume would 

create better trading opportunities that 

benefit all market participants.23

Specifically, greater volume and 

liquidity from increased order flow 

could create more trading opportunities 

and tighter spreads. Finally, assessing 

lower fees for Professional Customers 

compared to Floor Lead Market Makers, 

Floor Market Makers, Firms, and 

Broker-Dealers is not novel as BOX 

currently assesses lower fees for 

Professional Customers as compared to 

Broker Dealers and Market Makers.24

Additionally, with respect to Qualified 

Contingent Cross Fees, Phlx currently 

assesses Customers and Professional no 

fee, while a Lead Market Maker, Market 

Maker, Firm and Broker-Dealer are 

assessed $0.20 per contract.25

Options 7, Section 1 

The Exchange’s proposal to amend 

the description of ‘‘Market Maker’’ 

within Options 7, Section 1(c) is 

consistent with the Act. The proposed 

non-substantive amendment removes 

unnecessary words. 

The Exchange’s proposal to define the 

terms ‘‘Floor Broker,’’ ‘‘Floor Lead 

Market Maker,’’ and ‘‘Floor Market 

Maker’’ within Options 7, Section 1(c) is 

consistent with the Act. The addition of 

these terms, which are currently defined 

within Options 8, Section 2(a)(2)–(4), 

will bring greater transparency 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. 

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 market participants to 

execute a greater amount of Professional 

orders on Phlx’s Trading Floor. To the 

extent that the proposed change attracts 

additional Professional orders 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 decrease 

the Floor Options Transaction Charges 

for Professionals in multiply-listed 

Penny and non-Penny Symbols from 


khammond on DSKJM1Z7X2PROD with NOTICES
20478 Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Notices 

26See note 20 above. 

27See note 21 above. 

28See note 22 above. 

29See note 23 above. 

30See note 24 above. 

31See note 25 above. 

32See note 26 above. 

33 15 U.S.C. 78s(b)(3)(A)(ii). 

$0.25 to $0.05 per contract does not 

create an undue burden on competition. 

Today, Customers are not assessed an 

Options Transaction Charge in multiplylisted Penny or non-Penny Symbols 

because Customer order flow is unique. 

Customer liquidity benefits all market 

participants by providing more trading 

opportunities, which attracts Floor Lead 

Marker Makers and Floor 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 believes that 

lowering the Professional Floor Options 

Transaction Charges is similarly 

beneficial as the lower fees may cause 

market participants to select Phlx’s 

Trading Floor as a venue to send 

Professional order flow, which benefits 

all market participants by attracting 

valuable liquidity to the market and 

thereby enhancing the trading quality 

and efficiency for all market 

participants. 

Today, Floor Lead Market Makers and 

Floor Market Makers are assessed the 

highest Penny and non-Penny Options 

Transaction Charges. Customers are not 

assessed a Penny or non-Penny Options 

Transaction Charge. Today, 

Professionals, Broker-Dealers and Firms 

pay a Floor Options Transaction Charge 

of $0.25 per contract. With this 

proposal, Professionals would continue 

to be assessed a lower Options 

Transaction Charges in multiply-listed 

Penny and non-Penny Symbols as 

compared to Floor Lead Market Makers 

and Floor Market Makers. Floor Lead 

Market Makers and Floor Market Makers 

have a time and place advantage on the 

Trading Floor with respect to orders, 

unlike other market participants. A 

Professional, Broker-Dealer or a Firm 

would necessarily require a Floor 

Broker to represent their trading interest 

on the Trading Floor as compared to a 

Floor Lead Market Maker or Floor 

Market Maker that could directly 

transact such orders on the Trading 

Floor. Further, the Exchange believes 

that in order to attract orders from a 

Professionals, Broker-Dealers or a Firm, 

via a Floor Broker, the rates must be 

competitive with rates at other trading 

floors. With respect to Firms, the 

Exchange notes that Firms are subject to 

a Monthly Firm Fee Cap of $75,000. 

Firm Floor Option Transaction Charges 

along with Qualified Contingent Cross 

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.26 Finally, with respect to 

Broker-Dealers, today the Exchange 

waives the Floor Options Transaction 

Charge for Broker-Dealers executing 

facilitation orders pursuant to Options 

8, Section 30 when such members 

would otherwise incur this charge for 

trading in their own proprietary account 

contra to a Customer (‘‘BD-Customer 

Facilitation’’), if the member’s BDCustomer Facilitation average daily 

volume (including both FLEX and nonFLEX transactions) exceeds 10,000 

contracts per day in a given month.27

The Exchange notes that both Firms and 

Broker-Dealers have the ability to 

reduce their Options Transaction 

Charges as compared to Professionals. 

Assessing a Professional Floor 

Options Transaction Charge that is less 

favorable than Customers but more 

favorable than Firms, and BrokerDealers and continuing to assess a lower 

fee as compared to Floor Lead Market 

Makers, Floor Market Makers does not 

impose an undue burden on 

competition. Professionals have access 

to more information than Customers and 

therefore are being assessed a less 

favorable Options Transaction Charge 28

as compared to Customers. While 

Professionals may have the similar 

technological and informational 

advantages as Broker-Dealers trading for 

their own account,29 the Exchange 

believes that lowering the current 

Professional Floor Options Transaction 

Charges to range between that of a 

Customer and other non-Customer 

participants (Floor Lead Market Makers, 

Floor Market Makers, Firms, and 

Broker-Dealers) does not impose an 

undue burden on competition because 

the potential increased volume would 

create better trading opportunities that 

benefit all market participants.30

Specifically, greater volume and 

liquidity from increased order flow 

could create more trading opportunities 

and tighter spreads. Finally, assessing 

lower fees for Professional Customers 

compared to Floor Lead Market Makers, 

Floor Market Makers, Firms, and 

Broker-Dealers is not novel as BOX 

currently assesses lower fees for 

Professional Customers as compared to 

Broker Dealers and Market Makers.31

Additionally, with respect to Qualified 

Contingent Cross Fees, Phlx currently 

assesses Customers and Professional no 

fee, while a Lead Market Maker, Market 

Maker, Firm and Broker- Dealer are 

assessed $0.20 per contract.32

Options 7, Section 1 

The Exchange’s proposal to amend 

the description of ‘‘Market Maker’’ 

within Options 7, Section 1 does not 

impose an undue burden on 

competition. The proposed nonsubstantive amendment removes 

unnecessary words. 

The Exchange’s proposal to define the 

terms ‘‘Floor Broker,’’ ‘‘Floor Lead 

Market Maker,’’ and ‘‘Floor Market 

Maker’’ within Options 7, Section 1(c) 

does not impose an undue burden on 

competition. The addition of these 

terms, which are currently defined 

within Options 8, Section 2(a)(2)–(4), 

will bring greater transparency to 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.33

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–2022–14 on the subject line. 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Notices 20479 

34 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4Pursuant to Rule 7.1(e), the CEO notified the 

Board of Directors of the Exchange of this 

determination. The Exchange’s current rules 

establish how the Exchange will function fullyelectronically. The CEO also closed the NYSE 

American Options Trading Floor, which is located 

at the same 11 Wall Street facilities, and the NYSE 

Arca Options Trading Floor, which is located in 

San Francisco, CA. See Press Release, dated March 

18, 2020, available here: https://ir.theice.com/press/ 

press-releases/all-categories/2020/03-18-2020- 

204202110. 

5See Securities Exchange Act Release No. 88933 

(May 22, 2020), 85 FR 32059 (May 28, 2020) (SR– 

NYSE–2020–47) (Notice of filing and immediate 

effectiveness of proposed rule change). 

6See Securities Exchange Act Release No. 89086 

(June 17, 2020) (SR–NYSE–2020–52) (Notice of 

filing and immediate effectiveness of proposed rule 

change). 

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–2022–14. 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 

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–2022–14, and should 

be submitted on or before April 28, 

2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.34

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–07340 Filed 4–6–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94585; File No. SR–NYSE– 

2022–18] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Extend the 

Temporary Period for Specified 

Commentaries to Rules 7.35A and 

7.35C and Temporary Rule Relief in 

Rule 36.30 

April 1, 2022. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that on March 29, 

2022, New York Stock Exchange LLC 

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

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the self-regulatory 

organization. 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 extend the 

temporary period for specified 

Commentaries to Rules 7.35A and 7.35C 

and temporary rule relief in Rule 36.30, 

to end on the earlier of a full reopening 

of the Trading Floor facilities to DMMs 

or after the Exchange closes on July 31, 

2022. The proposed rule change is 

available on the Exchange’s website at 

www.nyse.com, at the principal office of 

the Exchange, and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of those 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 parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to extend the 

temporary period for specified 

Commentaries to Rules 7.35A and 7.35C 

and temporary rule relief to Rule 36.30 

to end on the earlier of a full reopening 

of the Trading Floor facilities to DMMs 

or after the Exchange closes on July 31, 

2022. The current temporary period that 

these Rules are in effect ends on the 

earlier of a full reopening of the Trading 

Floor facilities to DMMs or after the 

Exchange closes on March 31, 2022. 

Background 

To slow the spread of COVID–19 

through social-distancing measures, on 

March 18, 2020, the CEO of the 

Exchange made a determination under 

Rule 7.1(c)(3) that, beginning March 23, 

2020, the Trading Floor facilities located 

at 11 Wall Street in New York City 

would close and the Exchange would 

move, on a temporary basis, to fully 

electronic trading.4 On May 14, 2020, 

the CEO of the Exchange made a 

determination under Rule 7.1(c)(3) to 

reopen the Trading Floor on a limited 

basis on May 26, 2020 to a subset of 

Floor brokers, subject to safety measures 

designed to prevent the spread of 

COVID–19.5 On June 15, 2020, the CEO 

of the Exchange made a determination 

under Rule 7.1(c)(3) to begin the second 

phase of the Trading Floor reopening by 

allowing DMMs to return on June 17, 

2020, subject to safety measures 

designed to prevent the spread of 

COVID–19.6 Consistent with these 

safety measures, both DMMs and Floor 

broker firms continue to operate with 

reduced staff on the Trading Floor. 

Proposed Rule Change 

Beginning in March 2020, the 

Exchange modified its rules to add 

Commentaries to Rules 7.35, 7.35A, 


khammond on DSKJM1Z7X2PROD with NOTICES