6426 Federal Register / Vol. 75, No. 26 / Tuesday, February 9, 2010 / Notices 

6 15 U.S.C. 78s(b)(3)(A)(i). 

7 17 CFR 240.19b–4(f)(1). 

8 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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 that is 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 solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The proposed rule change is effective 

upon filing pursuant to Section 

19(b)(3)(A)(i) of the Exchange Act 6 and 

Rule 19b–4(f)(1) thereunder,7 in that it 

constitutes a stated policy, practice, or 

interpretation with respect to the 

meaning, administration, or 

enforcement of an existing rule of the 

Exchange. At any time within 60 days 

of the filing of the proposed rule change, 

the Commission may summarily 

abrogate the rule change if it appears to 

the Commission that the action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or would otherwise further 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–NYSEAmex–2010–06 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–NYSEAmex–2010–06. 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 NYSE Amex’s principal 

office and on its Web site at 

www.nyse.com. 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 No. SR– 

NYSEAmex–2010–06 and should be 

submitted on or before March 2, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.8

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–2739 Filed 2–8–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61486; File No. SR–Phlx– 

2010–18] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX, Inc.; Notice of 

Filing of Proposed Rule Change To 

Codify Prices for Co-Location Services 

February 3, 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 January 

29, 2010, NASDAQ OMX PHLX (‘‘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 

substantially prepared by the Exchange. 

The Commission is publishing this 

notice to solicit comments on the 

proposed rule change from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

NASDAQ OMX PHLX is filing with 

the Securities and Exchange 

Commission (‘‘Commission’’) a proposed 

rule change to codify pricing for colocation services. The text of the 

proposed rule change is available at 

http://www.nasdaqtrader.com/ 

micro.aspx?id=PHLXRulefilings, on the 

Commission’s Web site at http:// 

www.sec.gov, at the Exchange’s 

principal office, and at the 

Commission’s Public Reference Room. 

The Exchange will implement the 

proposed rule change on the first day of 

the month immediately following 

Commission approval (or on the date of 

approval, if on the first business day of 

a month). 

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 is proposing to codify 

fees for its existing co-location services. 

Co-location services are a suite of 

hardware, power, telecommunication, 

and other ancillary products and 

services that allow market participants 

and vendors to place their trading and 

communications equipment in close 

physical proximity to the quoting and 

execution facilities of the Exchange. 

Phlx provides co-location services and 

imposes fees through Nasdaq 

Technology Services LLC and pursuant 

to agreements with the owner/operator 

of its data center where both the 

Exchange’s quoting and trading facilities 

and co-located customer equipment are 


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Federal Register / Vol. 75, No. 26 / Tuesday, February 9, 2010 / Notices 6427 

3Currently, the Exchange provides its current colocation services through data centers located in the 

New York City and Mid-Atlantic areas. 4NASDAQ OMX PHLX is implementing a 

Cabinet Proximity Option program where, for a 

monthly a fee, customers can obtain an option for 

future use on available currently-unused cabinet 

floor space in proximity to their existing 

equipment. Under the program, customers can 

reserve up to maximum of 20 cabinets which the 

Exchange will endeavor to provide as close as 

reasonably possible to the customer’s existing 

cabinet space, taking into consideration power 

availability within segments of the datacenter and 

the overall efficiency of use of datacenter resources 

as determined by the Exchange. Should reserved 

datacenter space be needed for use, the reserving 

customer will have three business days to formally 

contract with the Exchange for full payment for the 

reserved cabinet space in contention or it will be 

reassigned. In making determinations to require 

exercise or relinquishment of reserved space as 

among numerous customers, the Exchange will take 

into consideration several factors, including: 

Proximity between available reserved cabinet space 

and the existing space of a customer seeking 

additional space for actual cabinet usage; a 

customer’s ratio of cabinets in use to those reserved; 

the length of time that a particular reservation(s) 

has been in place; and any other factor that the 

Exchange deems relevant to ensure overall 

efficiency in use of the datacenter space. 

5These fees are for telecommunications 

connectivity only. Market Data fees are charged 

independently by NASDAQ OMX PHLX and other 

exchanges. 

6Currently, the Exchange makes available to colocated customers a 10Gb fiber connection. The 

Exchange will likewise make available a 10Gb fiber 

connection to other customers in the first quarter 

of 2010. The Exchange has not received any 

requests for 10Gb fiber connections from firms that 

are not co-located. 

7 15 U.S.C. 78f. 

8 15 U.S.C. 78f(b)(5). 

housed.3 Users of co-location services 

include private extranet providers, data 

vendors, as well as the Exchange 

members and non-members. The use of 

co-location services is entirely 

voluntary. 

As detailed in the proposed colocation fee schedule, the Exchange 

imposes a uniform, non-discriminatory 

set of fees for various co-location 

services, including: Fees for cabinet 

space usage, or options for future space 

usage 4; installation and related power 

provision for hosted equipment; 

connectivity among multiple cabinets 

being used by the same customer as well 

as customer connectivity to the 

Exchange and telecommunications 

providers 5; and related maintenance 

and consulting services. Fees related to 

cabinet and power usage are 

incremental, with additional charges 

being imposed based on higher levels of 

cabinet and/or power usage, the use of 

non-standard cabinet sizes or special 

cabinet cooling equipment, or the reselling of cabinet space. 

Co-location customers are not 

provided any separate or superior 

means of direct access to the Exchange 

quoting and trading facilities. Nor does 

the Exchange offer any separate or 

superior means of access to the 

Exchange quoting and trading facilities 

as among co-location customers 

themselves within in [sic] the 

datacenter. Likewise, the Exchange does 

not make available to co-located 

customers any market data or data feed 

product or service for data going into, or 

out of, the Exchange systems that is not 

likewise available to all the Exchange 

members.6 Finally, all orders sent to the 

Exchange market enter the marketplace 

through [sic] same central system quote 

and order gateway regardless of whether 

the sender is co-located in the Exchange 

data center or not. In short, the 

Exchange has created no special market 

technology or programming that is 

available only to co-located customers 

and the Exchange has organized its 

systems to minimize, to the greatest 

extent possible, any advantage for one 

customer versus another. 

Co-location services are generally 

available to all qualified market 

participants who desire them. With the 

exception of customers participating in 

the Cabinet Proximity Option program, 

the Exchange allocates cabinets and 

power on a first-come/first-serve basis. 

Should available cabinet inventory 

shrink to 40 cabinets or less, the 

Exchange will limit new cabinet orders 

to a maximum of 4 cabinets each, and 

all new cabinets will be limited to a 

maximum power level of 5kW. Should 

available cabinet inventory shrink to 

zero, the Exchange will place firms 

seeking services on a waiting list based 

on that the Exchange receives signed 

orders for the services from the firm. In 

order to be placed on the waiting list, 

a firm must have utilized all existing 

cabinets they already have in the 

datacenter. Once on the list, the firms, 

on a rolling basis, will allocated a single 

5kW cabinet each time one becomes 

available. After receiving a cabinet, the 

firm will move to the bottom of the 

waiting list. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6 of the Act,7

in general, and with Section 6(b)(5) of 

the Act,8 in particular, in that the 

proposal is designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, to foster cooperation 

and coordination with persons engaged 

in regulating, clearing, settling, 

processing information with respect to, 

and facilitating transactions in 

securities, 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. In 

particular, the filing codifies and makes 

transparent the uniform fees imposed by 

the Exchange’s technology subsidiary 

for co-location services. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will result in 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, as amended. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 35 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

A. by order approve such proposed 

rule change, or 

B. institute proceedings to determine 

whether the proposed rule change 

should be 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, as amended, 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–2010–18 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–2010–18. This file 

number should be included on the 


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6428 Federal Register / Vol. 75, No. 26 / Tuesday, February 9, 2010 / Notices 

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3An ROT is 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. 

4 In addition to the fees for QQQQ, IWN and C 

options, Non-Streaming ROTs will be assessed the 

fees applicable to Standard and Poor’s Depositary 

Receipts/SPDRs (‘‘SPY’’). See SR–Phlx–2009–116. 

5An SQT is an Exchange Registered Options 

Trader (‘‘ROT’’) who has received permission from 

the Exchange to generate and submit option 

quotations electronically through an electronic 

interface with AUTOM via an Exchange approved 

proprietary electronic quoting device in eligible 

options to which such SQT is assigned. See 

Exchange Rule 1014(b)(ii)(A). 

6An RSQT is 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. An RSQT 

may only submit such quotations electronically 

from off the floor of the Exchange. See Exchange 

Rule 1014(b)(ii)(B). 

7 ‘‘Directed Order’’ means any customer order 

(other than a stop or stop-limit order as defined in 

Rule 1066) to buy or sell which has been directed 

to a particular specialist, RSQT, or SQT by an Order 

Flow Provider, as defined below. To qualify as a 

Directed Order, an order must be delivered to the 

Exchange via AUTOM. 

8For the purposes of this fee, a Directed Customer 

is an order from a customer directed to a Directed 

Participant for execution. A Directed Participant is 

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– 

2010–18 and should be submitted on or 

before March 2, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–2787 Filed 2–8–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61480; File No. SR–Phlx– 

2010–14] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NASDAQ 

OMX PHLX, Inc. Relating to 

Transaction Fees and Rebates for 

Options 

February 3, 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 January 

26, 2010, NASDAQ OMX PHLX, Inc. 

(‘‘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 the 

Exchange’s Fee Schedule by adopting, 

on a pilot basis, per contract transaction 

fees for options overlying the 

PowerShares QQQ Trust (‘‘QQQQ’’)®; 

Ishares Russell 2000 (‘‘IWM’’) and 

Citigroup Inc. (‘‘C’’). The fees would 

apply to: (i) Transaction sides that 

remove liquidity from the Exchange’s 

disseminated market, and (ii) Firm and 

broker-dealer quotes and orders that are 

included in the Exchange’s 

disseminated market. 

Additionally, the Exchange proposes 

to offer a transaction rebate to certain 

liquidity providers, as described more 

fully below. 

While changes to the Exchange’s fee 

schedule pursuant to this proposal are 

effective upon filing, the Exchange has 

designated this proposal to be operative 

for trades settling on or after February 

1, 2010. The proposed changes to the fee 

schedule will be effective on a pilot 

basis, scheduled to expire March 2, 

2010. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http:// 

nasdaqomxphlx.cchwallstreet.com/ 

NASDAQOMXPHLX/Filings/, 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 purpose of the proposed rule 

change is to increase liquidity and to 

attract order flow in QQQQ, IWM and 

C options on the Exchange. 

Transaction Charges for Removing 

Liquidity 

The Exchange proposes to assess a 

per-contract transaction charge in 

QQQQ, IWM and C options on six 

different categories of market 

participants that submit orders and/or 

quotes that remove, or ‘‘take,’’ liquidity 

from the Exchange. The per-contract 

transaction charge would depend on the 

category of market participant 

submitting an order or quote to the 

Exchange that removes liquidity. 

The proposed amendments to the 

Exchange’s Fee Schedule would break 

down market participants by the 

following six categories: (i) Specialists, 

Registered Options Traders (‘‘ROTs’’) 3

that do not submit electronic quotations 

(‘‘Non-Streaming ROTs’’),4 Streaming 

Quote Traders (‘‘SQTs’’),5 and Remote 

Streaming Quote Traders (‘‘RSQTs’’),6

(ii) customers that submit orders that are 

not Directed Orders 7 (‘‘Non-Directed 

Customers’’); (iii) customers that submit 

Directed Orders (‘‘Directed 

Customers’’); 8 (iv) specialists, SQTs and 


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