63878 Federal Register / Vol. 75, No. 200 / Monday, October 18, 2010 / Notices 

14The Exchange’s minor rule plan consists of 

options floor procedure advices (‘‘OFPAs’’ or 

‘‘Advices’’) with preset fines, pursuant to Rule 19d– 

1(c) under the Act. 17 CFR 240.19d–1(c). Most 

OFPAs have corresponding options rules. 

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

16 15 U.S.C. 78f(b)(5). 

17 15 U.S.C. 78s(b)(3)(A). 

18 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires the self-regulatory organization 

to submit to the Commission written notice of its 

intent to file the proposed rule change, along with 

a brief description and text of 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. 

19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

receipt. This technology was not 

previously available. 

The Exchange proposes this 

amendment to both Exchange Rule 1063 

as well as OFPA C–2, which is part of 

the minor rule plan.14

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 15 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 16

in particular, in that it is designed to 

promote just and equitable principles of 

trade, to remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system, and, in general to protect 

investors and the public interest, by 

requiring a floor broker to enter more 

specific information to identify trades. 

This proposal would enhance the 

Exchange’s audit trail. 

Further, the Exchange believes that 

amending the language concerning 

clearing information related to the 

contra-side of the trade to require the 

information to be entered into FBMS 

contemporaneously upon receipt on the 

Exchange is consistent with the 

language of other exchanges and still 

allows for the timely entry of 

information for clearing purposes. 

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 

Because the foregoing proposed rule 

change: (i) Does not significantly affect 

the protection of investors or the public 

interest; (ii) does not impose any 

significant burden on competition; and 

(iii) by its terms, does not become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, if 

consistent with the protection of 

investors and the public interest, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 17 and Rule 19b– 

4(f)(6) thereunder.18

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

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

rules/sro.shtml); or 

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

Number SR–Phlx–2010–139 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–Phlx–2010–139. 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 

available publicly. All submissions 

should refer to File Number SR–Phlx– 

2010–139 and should be submitted on 

or before November 8, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–26130 Filed 10–15–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63082; File No. SR–Phlx– 

2010–130] 

Self-Regulatory Organizations; SelfRegulatory Organizations; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change by NASDAQ 

OMX PHLX LLC Relating to PIXL Fees 

October 13, 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 

September 29, 2010, NASDAQ OMX 

PHLX LLC (‘‘Phlx’’ or the ‘‘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. 

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 to add pricing applicable 

to members utilizing the Exchange’s 

mstockstill on DSKH9S0YB1PROD with NOTICES

Federal Register / Vol. 75, No. 200 / Monday, October 18, 2010 / Notices 63879 

3SR–Phlx–2010–108 is a proposal to adopt Rule 

1080(n) to establish a price-improvement 

mechanism. 

4 ‘‘A member may electronically submit for 

execution an order it represents as agent on behalf 

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

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

against any other order (except as provided in subparagraph (n)(i)(E) below) it represents as agent 

(‘‘Initiating Order’’) provided it submits the PIXL 

order for electronic execution into the PIXL Auction 

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

Rule 1080(n) as proposed in SR–Phlx–2010–108. 

5See footnote 4. 

6See Exchange Rule 1080(l), ‘‘* * * The term 

‘Directed Specialist, RSQT, or SQT’ means a 

specialist, RSQT, or SQT that receives a Directed 

Order.’’ A Directed Participant has a higher quoting 

requirement as compared with a specialist, SQT or 

RSQT who is not acting as a Directed Participant. 

See Exchange Rule 1014. 

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. 

10The Fees and Rebates for Adding and 

Removing Liquidity in Select Symbols are listed in 

Section I of the Fee Schedule. 

11An equity option includes exchange-traded 

fund share (‘‘ETF’’), Holding Company Depositary 

Receipt (‘‘HOLDR’’), Russell 2000(R) Index (the ‘‘Full 

Value Russell Index’’ or ‘‘RUT’’), options on the onetenth value Russell 2000® Index (the ‘‘Reduced 

Value Russell Index’’ or ‘‘RMN’’), options on the 

Nasdaq 100 Index traded under the symbol NDX 

(‘‘NDX’’) and options on the one-tenth value of the 

Nasdaq 100 Index traded under the symbol MNX 

(‘‘MNX’’). 

12The symbols assessed fees according to Section 

III are BKX, FPX, HGX, OSX, SOX, UTY, and XAU 

(‘‘Sector Index Options’’) and U.S. Dollar-Settled 

Foreign Currency Options (‘‘WCOs’’). 

13This includes all Symbols that are not 

specifically Select Symbols as listed in Section I of 

the Fee Schedule. 

14SR–Phlx–2010–108 is a proposal to adopt Rule 

1080(n) to establish a price-improvement 

mechanism. 

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

16 15 U.S.C. 78f(b)(4). 

price improvement mechanism known 

as Price Improvement XL or (PIXLSM). 

While changes to the Fee Schedule 

pursuant to this proposal are effective 

upon filing, the Exchange has 

designated these changes to be operative 

upon the approval and effectiveness of 

SR–Phlx–2010–108.3

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, and at 

the Commission’s Public Reference 

Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of the proposed rule 

change is to assess fees for orders 

known as PIXL Orders 4 and Initiating 

Orders 5 according to the following 

categories: Customers, Directed 

Participants,6 Specialists,7 Streaming 

Quote Traders (‘‘SQT’’),8 Remote 

Streaming Quote Traders (‘‘RSQT’’),9

Firms and Broker-Dealers. All options 

traded on the Exchange are eligible for 

PIXL. 

Initiating Order Trades Against the PIXL 

Order 

The Exchange proposes to assess a fee 

of $0.05 per contract when an Initiating 

Order executes against a PIXL Order in 

the symbols listed in Section I, the Fees 

and Rebates for Adding and Removing 

Liquidity in Select Symbols 10 (known 

as ‘‘Select Symbols’’), and the symbols 

defined in Section II 11 (‘‘Section II 

Symbols’’). The Exchange proposes to 

only assess the fees listed in Section II 

of the Fee Schedule for the PIXL Order 

when the PIXL Order trades against the 

Initiating Order in Section II Symbols 

and the Select Symbols. For example, a 

member or member organization would 

be assessed $0.00 for Customer 

transactions. 

For the symbols assessed according to 

Section III 12 of the Fee Schedule, titled 

Sector Index Options Fees and U.S 

Dollar-Settled Foreign Currency 

(‘‘WCO’’) Options Fees, the transaction 

fees described in Section III would 

apply to both the Initiating Order and 

the PIXL Order for all executions. 

PIXL Order Fees When the PIXL Order 

Does Not Trade Against the Initiating 

Order Select Symbols 

Select Symbols: Section I 

With respect to executions in Select 

Symbols, where the PIXL Order is not 

trading against the Initiating Order, the 

PIXL Order would be assessed the Fee 

for Removing Liquidity when that order 

is executed against a resting contra-side 

order or quote that was present upon 

initial receipt of the PIXL Order. The 

resting contra-side order or quote would 

receive the Rebate for Adding Liquidity. 

Additionally, the PIXL Order would 

receive the Rebate for Adding Liquidity 

when that order is executed against 

contra-side order(s) that respond to the 

PIXL auction broadcast message, as well 

as when executed against contra-side 

quotes and unrelated orders on the 

PHLX book that arrived after the PIXL 

auction was initiated. The PIXL auction 

responders, contra-side order(s) and 

quote(s) would be assessed the Fee for 

Removing Liquidity. 

For the symbols assessed according to 

Section III of the Fee Schedule, titled 

Sector Index Options Fees and U.S 

Dollar-Settled Foreign Currency 

(‘‘WCO’’) Options Fees, the transaction 

fees described in Section III would 

apply to both the Initiating Order and 

the PIXL Order for all executions. 

Equity Options: Section II 

With respect to executions in Section 

II Equity Options,13 the PIXL Order 

would be assessed the appropriate 

Equity Option Fee in Section II of the 

Fee Schedule. The contra-side order or 

quote would be assessed the appropriate 

Equity Option Fee listed on the Fee 

Schedule as well. All other Equity 

Options Fees in Section II would apply 

as appropriate, including but not 

limited to Payment for Order Flow. 

Finally, the Exchange is proposing to 

relocate the Flex Equity Option Fees 

from Section IV, FLEX Equity Options, 

of the Fee Schedule to Section II, Equity 

Options, and consolidate those fee with 

other Equity Option Fees for the sake of 

clarity. Section IV will now contain the 

proposed PIXL fees and is proposed to 

be titled ‘‘PIXL Pricing.’’ 

While changes to the Fee Schedule 

pursuant to this proposal are effective 

upon filing, the Exchange has 

designated these changes to be operative 

upon the approval and effectiveness of 

SR–Phlx–2010–108.14

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its Fee Schedule is 

consistent with Section 6(b) of the Act 15

in general, and furthers the objectives of 

Section 6(b)(4) of the Act 16 in 

particular, in that it is an equitable 

allocation of reasonable fees and other 

charges among Exchange members. The 

Exchange believes that the fee proposal 

mstockstill on DSKH9S0YB1PROD with NOTICES

63880 Federal Register / Vol. 75, No. 200 / Monday, October 18, 2010 / Notices 

17See Securities and Exchange Act Release No. 

62632 (August 3, 2010), 75 FR 47869 (August 3, 

2010) (SR–BX–2010–049). 

18See the ISE schedule of fee as of August 2, 

2010. 

19 15 U.S.C. 78s(b)(3)(A)(ii). 

20The text of the proposed rule change is 

available on the Commission’s Web site at 

http://www.sec.gov/rules/sro.shtml. 

21 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 In Amendment No. 1, the Exchange provided 

additional basis for the proposed rule change in the 

Statutory Basis section. 

4 15 U.S.C. 78s(b)(3)(A)(ii). 

5 17 CFR 240.19b–4(f)(2). 

is both equitable and reasonable for the 

reasons listed hereafter. 

The proposed fees are consistent with 

the equitable price differentials that 

exist today at all option exchanges. For 

example, the fees and rebates assessed 

by the Exchange are similar, and in 

some cases less than, the fees and 

rebates assessed by the Boston Options 

Exchange Group, LLC (‘‘BOX’’) 17 and the 

International Securities Exchange 

(‘‘ISE’’) 18 for orders executed in a price 

improvement mechanism. For example 

a BOX participant could be assessed 

total fees of $0.35 per contract as the 

price improvement period (‘‘PIP’’) 

initiator and receive a rebate for their 

customer PIP order of $0.25 per contract 

(in this example the net fee charged the 

BOX participant would be $0.10), 

whereas the PIP responder could be 

assessed a fee of $0.50 per contract. This 

is a differential of $0.40 per contract 

between two BOX participants for 

participating in the PIP auction, which 

is equal to or less than the differentials 

that exist in the Exchange’s proposal. 

With respect to ISE, the Exchange pays 

a rebate for certain PIXL executions, 

which is similar to the $0.15 rebate ISE 

pays for its price improvement 

mechanism. 

The Exchange operates in a fiercely 

competitive market place in which 

Exchange members and member 

organizations are highly sophisticated 

and highly knowledgeable. As is the 

case, members and member 

organizations readily and swiftly direct 

order flow or post liquidity to 

competing venues if they deem fee 

levels at a particular options exchange 

to be excessive, unfair or unreasonable. 

The Exchange believes the proposal is 

an equitable allocation of fees and not 

unfairly discriminatory for the reasons 

stated above. 

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.19 At any time 

within 60 days of the filing of the 

proposed rule change, the Commission 

summarily may temporarily suspend 

such rule change if it appears to the 

Commission that such action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act. If the Commission 

takes such action, the Commission shall 

institute proceedings to determine 

whether the proposed rule should be 

approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

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

rules/sro.shtml); or 

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

Number SR–Phlx–2010–130 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–Phlx–2010–130. 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,20 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, on official business 

days between the hours of 10 a.m. and 

3 p.m. Copies of the filing also will be 

available for inspection and copying at 

the principal office of the Exchange. All 

comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File 

Number SR–Phlx–2010–130 and should 

be submitted on or before November 8, 

2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–26175 Filed 10–15–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63085; File No. SR–BATS– 

2010–026] 

Self-Regulatory Organizations; BATS 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change, as Modified by 

Amendment No. 1, Related to Fees for 

Use of BATS Exchange, Inc. 

October 13, 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 

September 30, 2010, BATS Exchange, 

Inc. (the ‘‘Exchange’’ or ‘‘BATS’’) 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. 

On October 12, 2010, the Exchange filed 

Amendment No. 1, which modified the 

original filing.3 BATS has designated 

the proposed rule change as one 

establishing or changing a member due, 

fee, or other charge imposed by the 

Exchange under Section 19(b)(3)(A)(ii) 

of the Act 4 and Rule 19b–4(f)(2) 

thereunder,5 which renders the 

mstockstill on DSKH9S0YB1PROD with NOTICES