29788 Federal Register / Vol. 75, No. 102 / Thursday, May 27, 2010 / Notices 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(2). 

5Category I also sets forth certain rebates for 

adding liquidity. The rebates apply as set forth 

within the various subcategories that also apply to 

fees within Category I. 

6Rule 1000(b)(14) provides in relevant part: ‘‘The 

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). 

7A Specialist is an Exchange member who is 

registered as an options specialist pursuant to Rule 

1020(a). 

8A Streaming Quote Trader is defined in 

Exchange Rule 1014(b)(ii)(A) as an ROT who has 

received permission from the Exchange to generate 

and submit option quotations electronically through 

AUTOM in eligible options to which such SQT is 

assigned. 

9A Remote Streaming Quote Trader is defined 

Exchange Rule in 1014(b)(ii)(B) as an ROT that is 

a member or member organization with no physical 

trading floor presence who has received permission 

from the Exchange to generate and submit option 

quotations electronically through AUTOM in 

eligible options to which such RSQT has been 

assigned. 

10An Order Flow Provider is defined in Exchange 

Rule 1080(l)(1)(B) as ‘‘any member or member 

organization that submits, as agent, customer orders 

to the Exchange.’’ 

11A ROT includes a SQT, a RSQT and a NonSQT, which by definition is neither a SQT nor a 

RSQT. See Exchange Rule 1014 (b)(i) and (ii). 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62140; File No. SR–Phlx– 

2010–69] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX, Inc.; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change Relating to 

the Applicability of Fees 

May 20, 2010. 

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 April 30, 

2010, NASDAQ OMX PHLX, Inc. 

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

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. Phlx has 

designated this proposal as one 

establishing or changing a member due, 

fee, or other charge imposed under 

Section 19(b)(3)(A)(ii) of the Act 3 and 

Rule 19b–4(f)(2) thereunder,4 which 

renders the proposal effective upon 

filing with the Commission. 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 its 

Fee Schedule by adding language at the 

beginning of the Fee Schedule to 

describe with more specificity the 

applicability of fees to transactions. It is 

also making certain additional wording 

changes to the Fee Schedule for 

purposes of clarity and to conform the 

Fee Schedule to the Exchange’s current 

billing practices. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://nasdaqtrader.com/ 

micro.aspx?id=PHLXfilings, at the 

principal office of the Exchange, at the 

Commission’s Public Reference Room, 

and on the Commission’s Web site at 

http://www.sec.gov. 

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 currently charges its 

members certain transaction-related fees 

for options trades. These fees are 

assessed at differing rates that depend 

on the option contract and on the 

characteristics of the particular trade. 

Category I of the Fee Schedule sets forth 

fees assessed in connection with rebates 

for adding and fees for removing 

liquidity in certain specific option 

contracts identified in the first bullet 

point of Category I.5 Category II 

identifies fees assessed with respect to 

transactions in the other equity options 

traded on the Exchange as well as ETFs, 

HOLDRS, RUT, RMN, MNX and NDX 

(together, these Category II fees are the 

‘‘Equity Options Fees’’). Categories III 

and IV set forth fees assessed with 

respect to transactions in the Exchange’s 

sector index options and U.S. dollarsettled foreign currency options, 

respectively. 

The six subcategories of transaction 

fees within Category I, the rebates for 

adding and fees for removing liquidity 

are (1) Customer, (2) Directed 

Participant, (3) Specialist, ROT, SQT 

and RSQT, (4) Firm, (5) Professional and 

(6) Broker-Dealer. Within Category II, 

there are five fee subcategories, 

identified as (1) Customer Executions, 

(2) Professional (3) Registered Options 

Traders (on-floor) and Specialists, (4) 

Firm, and (5) Broker-Dealer. Categories 

III and IV each contain the following six 

subcategories: (1) Customer Executions, 

(2) Professional (3) Registered Options 

Traders (on-floor), (4) Specialist, (5) 

Firm, and (6) Broker-Dealer. 

As a preliminary matter, the Exchange 

is deleting the word ‘‘Executions’’ from 

the caption of the ‘‘Customer 

Executions’’ subcategory within 

Categories II, III and IV of the Fee 

Schedule as unnecessary and 

potentially confusing. Hereafter, this 

proposed rule change will refer to the 

‘‘Customer Executions’’ subcategories as 

simply the ‘‘Customer’’ subcategories. 

Similarly, the Exchange is proposing to 

delete references to the term ‘‘Firm 

Proprietary’’ wherever they appear in 

Categories II, III and IV. Currently, the 

Fee Schedule uses the terms ‘‘Firm’’ and 

‘‘Firm Proprietary’’ to refer to the same 

types of transactions. The Exchange is 

proposing to delete the words ‘‘Firm 

Proprietary’’ and instead use the term 

‘‘Firm’’ consistently in the Fee Schedule. 

A conforming change is also made to 

endnote 5. 

The Exchange proposes to add 

language to the beginning of the Fee 

Schedule in a preface immediately 

preceding Category I to address the 

applicability of its fees to certain 

transactions. The Exchange is proposing 

to add this text to the Fee Schedule to 

clarify the below terms for purposes of 

assessing fees. 

The 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)).6

The term ‘‘Directed Participant’’ 

applies to transactions for the account of 

a Specialist, 7 Streaming Quote Trader 8

(an ‘‘SQT’’) or Remote Streaming Quote 

Trader 9 (an ‘‘RSQT’’) resulting from a 

Customer order that is (1) directed to it 

by an order flow provider, 10 and (2) 

executed by it electronically on Phlx XL 

II.11

The term ‘‘Specialist, ROT, SQT and 

RSQT’’ applies to transactions for the 

accounts of Specialists, Registered 


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Federal Register / Vol. 75, No. 102 / Thursday, May 27, 2010 / Notices 29789 

12A Registered Option Trader is defined in 

Exchange Rule 1014(b) as a regular member or a 

foreign currency options participant of the 

Exchange located on the trading floor who has 

received permission from the Exchange to trade in 

options for his own account. 

13 In addition, the current Fee Schedule states 

that ‘‘Customer, Professional, Directed Participant 

and Specialist, ROT, SQT and RSQT fees for 

removing liquidity will not apply to transactions 

resulting from electronic auctions. Electronic 

auctions include, without limitation, the Complex 

Order Live Auction (‘‘COLA’’), and Quote and 

Market Exhaust auctions. Firm and Broker-Dealer 

fees for removing liquidity will, however apply to 

transactions resulting from electronic auctions.’’ 

The Exchange proposes to make clear that a 

Specialist, ROT, SQT and RSQT do not receive a 

rebate for adding liquidity in an electronic auction. 

The Exchange proposes to file a separate 19b–4 to 

that effect shortly. See E-mail from Angela S. Dunn, 

Assistant General Counsel, Phlx, to Johnna B. 

Dumler, Special Counsel, Commission, and Andrew 

Madar, Special Counsel, Commission, dated May 

17, 2010. The exchange also requested that 

paragraph 17 of the 19b–4 and exhibit 1 to the 19b– 

4 be deleted because it was inadvertently included 

in the filing and was not applicable. See id. 

14 Id. 

15A ROT includes a SQT, a RSQT and a NonSQT, which by definition is neither a SQT or a 

RSQT. See Exchange Rule 1014 (b)(i) and (ii). 

16 15 U.S.C. 78f(b). 

17 15 U.S.C. 78f(b)(4). 

Option Traders 12 (‘‘ROTs’’), Streaming 

Quote Traders, and Remote Streaming 

Quote Traders, unless the Directed 

Participant transaction fee applies. 

The term ‘‘Firm’’ applies to any 

transaction that is identified by a 

member or member organization for 

clearing in the Firm range at OCC. For 

purposes of clarity, these trades are 

received by the Exchange with an origin 

type of ‘‘F’’ and are billed the Firm rate. 

The term ‘‘Professional’’ applies to 

transactions for the accounts of 

Professionals (as defined in Exchange 

Rule 1000(b)(14)). 

The term ‘‘Broker-Dealer’’ applies to 

any transaction which is not subject to 

any of the other transaction fees 

applicable within a particular category. 

Thus, for example, ‘‘Broker-Dealer’’ 

transaction fees do not apply to rebates 

and fees for adding and removing 

liquidity which are subject to 

‘‘Customer’’, ‘‘Directed Participant’’, 

‘‘Specialist, ROT, SQT and RSQT’’, 

‘‘Firm’’, or ‘‘Professional’’ transaction 

fees. For example, the Broker-Dealer fee 

would be applicable to transactions by 

away market makers or broker dealers 

clearing in the customer range. 

The Fee Schedule currently refers to 

‘‘Registered Options Traders (on floor) 

and Specialists’’ in Category II, the 

equity option fees. These fees, which are 

referred to as ‘‘Registered Options 

Traders (on floor) and Specialists’’, 

apply only to transactions for the 

accounts of ROTs and Specialists. 

Likewise the Fee Schedule refers to 

‘‘Registered Options Traders (on-floor)’’ 

in Categories III and IV, sector index 

options and U.S. dollar-settled options. 

These fees, which are referred to as 

‘‘Registered Options Traders (on-floor)’’, 

apply only to transactions for the 

accounts of ROTs. Finally the Fee 

Schedule refers to ‘‘Specialist’’ in 

Categories III and IV, sector index 

options and U.S. dollar-settled options. 

These fees, which are referred to as 

‘‘Specialist’’, apply only to transactions 

for the accounts of Specialists. The 

Exchange proposes to replace these 

three fee terms with the broader term 

‘‘Specialist, ROT, SQT and RSQT’’ for 

clarity. The Exchange defines a ROT as 

a SQT, a RSQT and a non-SQT. The 

Exchange is proposing to change the 

title of certain fees for ease of reference. 

This category is the Exchange’s market 

maker category and will not impact the 

fees as Specialists, ROTs, SQTs and 

RSQTs are charged the same rate. 

The Exchange is deleting the second 

bullet point under Category I as 

unnecessary and duplicative of language 

in the new Preface. Clarifying changes 

are made to the seventh and eight bullet 

points in Category I, the rebates for 

adding and fees for removing 

liquidity.13

Endnote (C) is proposed to be 

amended to more clearly identify the 

transaction charges that are subject to 

the cap described in that endnote. No 

change in meaning is intended. 

Additionally, the Exchange proposes 

to delete endnote (15) from the Fee 

Schedule. Currently, endnote (15) states 

that the Broker-Dealer ‘‘charge applies to 

members for transactions, received from 

other than the floor of the Exchange for 

any account (i) in which the holder of 

beneficial interest is a member or nonmember broker-dealer or (ii) in which 

the holder of beneficial interest is a 

person associated with or employed by 

a member or non-member broker-dealer. 

This includes transactions for the 

account of an ROT entered from off the 

floor. The Exchange proposes to delete 

endnote (15) and instead clarify what 

fees will be assessed to a broker-dealer 

utilizing the proposed new term 

‘‘Broker-Dealer’’ as set forth in the 

preface. The Exchange will continue to 

assess members as defined in (i) and (ii) 

of current endnote (15) fees applicable 

to a broker-dealer.14

With respect to the last sentence of 

endnote (15), the Exchange notes that 

ROTs entering into transactions from 

off-floor include RSQTs because RSQTs 

are a subset of ROTs by definition.15

The Exchange proposes to assess 

transactions for the account of a ROT 

entered from off-floor the fees 

applicable to Specialists, ROTs, SQTs 

and RSQTs, as to the rebates and fees for 

adding and removing liquidity. With 

respect to the equity options, RSQTs are 

currently assessed at the ‘‘Registered 

Options Traders (on-floor) and 

Specialists’’ rate. With respect to sector 

index options and U.S. dollar-settled 

index options, RSQTs are currently 

assessed at the ‘‘Registered Options 

Traders (on-floor)’’ rate. These fee 

subcategories apply to ROTs generally, 

regardless of whether they are RSQTs 

and therefore are streaming quotes from 

off the trading floor. An off-floor ROT 

will be assessed fees applicable to the 

newly termed Specialist, ROT, SQT and 

RSQT category as opposed to the broker 

dealer category as is currently stated in 

endnote (15). The elimination of 

endnote (15) and adoption of the 

language explaining how a Specialist, 

ROT, SQT and RSQT are billed will 

conform the text of the Fee Schedule to 

the current billing practice. 

Additionally, the Exchange proposes 

to amend endnote 5. The proposed 

language discussed above to be added as 

a preface to the Fee Schedule will 

supersede the first sentence of endnote 

5, which will therefore be deleted. The 

Exchange is also amending endnote 5 to 

replace current references to ‘‘Firm 

Proprietary Options Transaction Charge’’ 

with references to ‘‘Firm equity options 

charges’’. This change will not result in 

new or changed fees but is intended 

only to simplify the fee schedule by 

eliminating inconsistent references to 

the same fee. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its Fee Schedule is 

consistent with Section 6(b) of the Act 16

in general, and furthers the objectives of 

Section 6(b)(4) of the Act 17 in 

particular, in that it is an equitable 

allocation of reasonable fees and other 

charges among Exchange members and 

because it clarifies the applicability of 

various Exchange fees, to the benefit of 

market participants. Specifically, the 

Exchange believes that the added 

preface will provide its members 

guidance in understanding how the 

Exchange assesses fees. 

The Exchange is amending its 

assessment of fees to broker dealer 

transactions. Specifically, the Exchange 

believes that it is reasonable to assess 

off-floor ROTs in the newly termed 

Specialist, ROT, SQT, RSQT category 

because the Exchange is proposing to 

assess all ROTs, on-floor and off-floor, 

the same rate. The Exchange believes 

that it is equitable to assess all 

Specialists, ROTs, SQT and RSQTs the 

same rate. 


wwoods2 on DSK1DXX6B1PROD with NOTICES
29790 Federal Register / Vol. 75, No. 102 / Thursday, May 27, 2010 / Notices 

18 15 U.S.C. 78s(b)(3)(A)(ii). 19 17 CFR 240.19b–4(f)(2). 

20 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. 

4See Securities Exchange Act Release No. 61542 

(February 18, 2010), 75 FR 8768 (February 25, 2010) 

(order approving SR–FINRA–2009–093). 

Finally, the Exchange has made 

clarifying amendments to its 

terminology throughout the Fee 

Schedule to eliminate extraneous terms 

and outdated language. The Exchange 

believes that these amendments should 

simplify the Fee Schedule to the benefit 

of its members. 

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. 

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 18 and 

paragraph (f)(2) of Rule 19b–4 19

thereunder. At any time within 60 days 

of the filing of the proposed rule change, 

the Commission may summarily 

abrogate 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. 

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 e-mail to rulecomments@sec.gov. Please include File 

Number SR–Phlx–2010–69 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–Phlx–2010–69. This file 

number should be included on the 

subject line if e-mail is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street, NE, 

Washington, DC 20549, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of such filing 

also will be available for inspection and 

copying at the principal 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 

publicly available. All submissions 

should refer to File Number SR–Phlx– 

2010–69 and should be submitted on or 

before June 17, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–12694 Filed 5–26–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62143; File No. SR– 

NYSEAMEX–2010–45] 

Self-Regulatory Organizations; NYSE 

Amex LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Deleting Rule 413—NYSE Amex 

Equities To Correspond With Rule 

Changes Filed by the Financial 

Industry Regulatory Authority, Inc. 

May 20, 2010. 

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 May 12, 

2010, NYSE Amex LLC (the ‘‘Exchange’’ 

or ‘‘NYSE Amex’’) 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 delete Rule 

413—NYSE Amex Equities to 

correspond with rule changes filed by 

the Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) and approved 

by the Commission.4 The text of the 

proposed rule change is available at the 

Exchange, the Commission’s Public 

Reference Room, and http:// 

www.nyse.com. 

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 purpose of the proposed rule 

changes is to delete Rule 413—NYSE 

Amex Equities (Uniform Forms) to 

correspond with rule changes filed by 

FINRA and approved by the 

Commission. 

Background 

On July 30, 2007, FINRA’s 

predecessor, the National Association of 

Securities Dealers, Inc. (‘‘NASD’’), and 

NYSE Regulation, Inc. (‘‘NYSER’’) 

consolidated their member firm 

regulation operations into a combined 

organization, FINRA. Pursuant to Rule 

17d–2 under the Act, the New York 

Stock Exchange LLC (‘‘NYSE’’), NYSER 

and FINRA entered into an agreement 


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