1570 Federal Register / Vol. 80, No. 7 / Monday, January 12, 2015 / Notices 

19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Real-Time Risk Management Fee was 

adopted well over a decade ago for members 

receiving option trading information on-line (i.e., 

electronically) from the Exchange. See Securities 

Exchange Act Release No. 43719 (December 13, 

2000), 65 FR 80975 (December 22, 2000) (SR–Phlx– 

00–97) (notice of filing and immediate 

effectiveness). This fee is, as discussed, being 

deleted as the CTI Port Fee, which is also used on 

other exchanges, is added. 

4Mnemonics are codes that identify member 

organization order entry ports. 

5A Complex Order is any order involving the 

simultaneous purchase and/or sale of two or more 

different options series in the same underlying 

security, priced at a net debit or credit based on the 

relative prices of the individual components, for the 

same account, for the purpose of executing a 

particular investment strategy. Furthermore, a 

Complex Order can also be a stock-option order, 

which is an order to buy or sell a stated number 

of units of an underlying stock or exchange-traded 

fund (‘‘ETF’’) coupled with the purchase or sale of 

options contract(s). See Exchange Rule 1080, 

Commentary .08(a)(i). 

6Similarly, member organizations will continue 

to be required to provide the Exchange with written 

notification of the transition and all additional ports 

which were provided at no cost will be removed at 

the end of the ten business days. 

7See Securities Exchange Act Release No. 73843 

(December 16, 2014) (SR–NASDAQ–2014–122) (not 

yet published). 

8A ‘‘clearing firm’’ is a member organization that 

meets the requirements of Rule 165(c). 

9A ‘‘Specialist’’ is an Exchange member who is 

registered as an options specialist pursuant to Rule 

1020(a). 

10A ‘‘Market Maker’’ includes Registered Options 

Traders (Rule 1014(b)(i) and (ii)), which includes 

Streaming Quote Traders (Rule 1014(b)(ii)(A)) and 

Remote Streaming Quote Traders (Rule 

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

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 

10:00 a.m. and 3:00 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–NYSE– 

2014–73 and should be submitted on or 

before February 2, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–00222 Filed 1–9–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74000; File No. SR–Phlx– 

2014–83] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Port Fees 

January 6, 2015. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on December 

24, 2014, NASDAQ OMX 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 the Substance 

of the Proposed Rule Change 

The Exchange proposes to modify 

Section VII entitled ‘‘Other Member 

Fees’’ of the Phlx Pricing Schedule 

(‘‘Pricing Schedule’’). Specifically, the 

Exchange proposes to amend the Port 

Fees in Section VII of the Pricing 

Schedule in order to increase the Order 

Entry Port Fee, establish a CTI Port Fee, 

and delete the Real-Time Risk 

Management Fee. 

While the changes proposed herein 

are effective upon filing, the Exchange 

has designated that the amendments be 

operative on January 2, 2015. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://

nasdaqomxphlx.cchwallstreet.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 

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 this filing is to amend 

the Port Fees in Section VII of the 

Pricing Schedule in order to increase 

the Order Entry Port Fee, establish a CTI 

Port Fee, and remove the Real-Time 

Risk Management Fee.3

Today, all Port Fees on the Exchange 

are located in subsection B of Section 

VII of the Pricing Schedule. These Port 

Fees include Order Entry Port Fees, 

Real-time Risk Management Fees, and 

Active SQF Port Fees, which are not 

amended by this proposal. Each of the 

amended fees is discussed below. 

Order Entry Port Fee 

The Order Entry Port Fee is a 

connectivity fee related to routing 

orders to the Exchange via an external 

order entry port. Phlx members access 

the Exchange’s network through order 

entry ports. A Phlx member may have 

more than one order entry port. Today, 

the Exchange assesses members an 

Order Entry Port Fee of $550 per month, 

per mnemonic.4 The current practice 

will continue whereby the Order Entry 

Port Fee will be waived for mnemonics 

that are used exclusively for Complex 

Orders 5 where one of the components 

of the Complex Order is the underlying 

security. Member organizations will 

continue not being assessed an Order 

Entry Port Fee for additional ports 

acquired for only ten business days for 

the purpose of transitioning 

technology.6

The Exchange proposes to increase 

the Order Entry Port Fee of $550 per 

month, per mnemonic to $600 per 

month, per mnemonic, as described 

below. This is exactly the same as a rule 

change filed by NASDAQ Options 

Market (‘‘NOM’’) proposing to assess 

$600 for Order Entry Port Fees as of 

January 2, 2015.7

Real-Time Risk Management Fee 

The Exchange is eliminating the Realtime Risk Management Fee from 

subsection B of Section VII of the 

Pricing Schedule, entitled ‘‘Port Fees.’’ 

The proposal to delete the Real-Time 

Risk Management Fee results in a price 

reduction to member organizations and 

members (clearing firms,8 Specialists,9

and Market Makers 10), 


tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 7 / Monday, January 12, 2015 / Notices 1571 

11AUTOM, now known as Phlx XL, is the 

Exchange’s electronic order, execution, and trade 

system. 

12SQF is an interface that allows specialists, 

streaming quote traders and remote streaming quote 

traders to connect and send quotes into Phlx XL. 

SQF 6.0 allows participants to access information 

in a single feed available to all participants, rather 

than through accessing multiple feeds. The 

information available includes execution reports 

and other relevant data. Non quoting firms may also 

receive relevant information available over SQF by 

connecting to the SQF interface, but they may not 

send quotes. 

13See Securities Exchange Act Release No. 66208 

(January 20, 2012), 77 FR 4077 (January 26, 2012) 

(SR–Phlx–2012–06) (notice of filing and immediate 

effectiveness). 

14See, e.g., Securities Exchange Act Release No. 

68502 (December 20, 2012), 77 FR 76572 (December 

28, 2012) (SR–NASDAQ–2012–139) (notice of filing 

and immediate effectiveness). NOM does not, 

however, tier its CTI Port Fees, as proposed herein. 

This port fee will increase to $600 as of January 2, 

2015. 

15Today, members utilize CTI Ports at no cost. 

16The Pricing Schedule also notes an Active SQF 

Port Fee, which fee remains unchanged by this 

proposal. SQF is an interface that enables 

specialists, Streaming Quote Traders (‘‘SQTs’’) and 

Remote Streaming Quote Traders (‘‘RSQTs’’) to 

connect and send quotes into Phlx XL, the options 

trading system. Active SQF ports are ports that 

receive inbound quotes at any time within that 

month. SQTs and RSQTs are defined in Rule 

1014(b)(ii)(A) and Rule 1014(b)(ii)(B), respectively. 

17The Exchange does not, by this proposal, 

expect to fully offset the Real-Time Risk 

Management Fee. Rather, the goal of the Exchange 

is to eliminate the Real-Time Risk Management Fee 

and assess only port fees. Members and member 

organizations will be able to continue to obtain realtime information via CTI and SQF as discussed 

herein. 

18 15 U.S.C. 78f(b). 

19 15 U.S.C. 78f(b)(4), (5). 

20The Exchange has determined that the RealTime Risk Fee is no longer necessary in light of the 

new CTI Port Fee and the increased Order Entry 

Port Fee. 

which market participants are assessed 

the Real-Time Risk Management Fees. 

The Real-time Risk Management Fee 

was established more than a decade ago 

to assess a fee to members and member 

organizations that receive electronic 

option trading information on-line from 

the Exchange. The purpose of the fee 

was to provide members and member 

organizations (e.g. clearing firms, 

Specialists, and Market Makers) with 

option trade information, electronically, 

on a real-time basis. Members and 

member organizations were able to log 

on to an interface through AUTOM 11 to 

receive options (among other 

information) transaction information 

real-time. The Exchange limited the 

assessment of the Real-Time Risk 

Management Fee to two ports, a 

Specialized Quote Feed (‘‘SQF’’) 12 Port 

and a CTI Port. As the Exchange has 

previously noted,13 it was always the 

intent of the Exchange to limit the RealTime Risk Management Fee to the SQF 

and CTI ports, and this has been the 

practice of the Exchange. The Exchange 

is eliminating the Real-Time Risk 

Management Fee and will instead only 

assess port fees. 

CTI Port Fee 

The Exchange now proposes to 

establish a CTI Port Fee that is $600 per 

port, per month for each of the first 5 

CTI ports, and $100 per port for each 

port thereafter. The Exchange proposes 

to charge a smaller amount for the 

subsequent ports in order to continue to 

encourage use of ports on the Exchange. 

CTI offers real-time clearing trade 

updates. A real-time clearing trade 

update is a message that is sent to a 

member after an execution has occurred 

and contains trade details. The message 

containing the trade details is also 

simultaneously sent to The Options 

Clearing Corporation. The trade 

messages are routed to a member’s 

connection containing certain 

information. The administrative and 

market event messages include, but are 

not limited to: System event messages to 

communicate operational-related 

events; options directory messages to 

relay basic option symbol and contract 

information for options traded on the 

Exchange; complex strategy messages to 

relay information for those strategies 

traded on the Exchange; trading action 

messages to inform market participants 

when a specific option or strategy is 

halted or released for trading on the 

Exchange; and an indicator which 

distinguishes electronic and nonelectronically delivered orders. This 

information will be available to 

members on a real-time basis. 

The Exchange notes that the CTI Port 

Fee is currently available on NOM at 

$550 per port, per month.14 NOM 

assesses port fees for similar ports, 

namely the Order Entry and CTI Ports. 

The Exchange desires to continue 

assessing Order Entry Fees, and to 

access CTI Post [sic] Fees on Phlx in 

order to recoup costs associated with 

these ports while encouraging members 

to participate in the market. 

By increasing the Order Entry Port 

Fee and establishing a new CTI Port 

Fee,15 the Exchange will only assess 

port fees 16 and no longer assess other 

types of fees, such as the Real-Time Risk 

Management Fees. This proposal 

reflects a modest price increase to 

members and member organizations 

while allowing the Exchange to recoup 

a certain portion of costs associated 

with ports, namely the Order Entry Port 

and CTI Port.17

2. Statutory Basis 

The Exchange believes that its 

proposal to amend the Pricing Schedule 

is consistent with Section 6(b) of the 

Act 18 in general, and furthers the 

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

the Act 19 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 or system 

which Phlx operates or controls, and is 

not designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

The Exchange believes that 

eliminating the Real-Time Risk 

Management Fee and proposing a new 

CTI Port Fee on the Exchange 20 at $600 

per port per month for each of the first 

5 CTI ports, and $100 per port for each 

port thereafter, is reasonable because it 

would allow the Exchange to recoup 

costs associated with offering the CTI 

ports. The proposal to delete the RealTime Risk Management Fee results in a 

price reduction to member organizations 

and members (clearing firms, 

Specialists, and Market Makers), which 

market participants are assessed the 

Real-Time Risk Management Fee. By 

increasing the Order Entry Port Fee and 

establishing new CTI Port Fee, the 

Exchange will only assess port fees and 

no longer assess other types of fees, 

such as the Real-Time Risk Management 

Fee. This proposal reflects a modest 

price increase to members and member 

organizations while allowing the 

Exchange to recoup a certain portion of 

costs associated with ports, namely the 

Order Entry Port and CTI Port. The 

Exchange does not, by this proposal, 

expect to fully offset the Real-Time Risk 

Management Fee. Rather, the goal of the 

Exchange is to eliminate the Real-Time 

Risk Management Fee and apply only 

port fees. Members and member 

organizations will be able to obtain realtime information via CTI and SQF as 

discussed. 

As with other port fees in subsection 

B of Section VII of the Pricing Schedule, 

the CTI Port Fees reflect a portion of the 

costs that the Exchange bears with 

respect to offering and maintaining the 

CTI ports. The CTI Port Fees are 

reasonable because they enable the 

Exchange to offset, in part, its 

connectivity costs associated with 

making such ports available, including 

costs based on gateway software and 

hardware enhancements and resources 

dedicated to gateway development, 

quality assurance, and support. 

Charging less for additional fees is 

reasonable to continue to recoup costs 

while encouraging members to connect 

to the Exchange. 


tkelley on DSK3SPTVN1PROD with NOTICES
1572 Federal Register / Vol. 80, No. 7 / Monday, January 12, 2015 / Notices 

21 15 U.S.C. 78s(b)(3)(A)(ii). 

22 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. 

The Exchange believes that assessing 

CTI Port Fees for the CTI ports at $600 

per port per month for each of the first 

5 CTI ports, and $100 per port for each 

port thereafter, is equitable and not 

unfairly discriminatory because the 

Exchange will assess the same fees for 

all CTI ports to all members. 

The Exchange believes that 

continuing the Order Entry Port Fee at 

$600 per month, per mnemonic on the 

Exchange is reasonable because it will 

allow the Exchange to continue to 

recoup fees associated with offering the 

Order Entry Port. As with other port fees 

in subsection B of Section VII of the 

Pricing Schedule, including the CTI Port 

Fee, the Order Entry Port Fee reflects a 

portion of the costs that the Exchange 

bears with respect to offering and 

maintaining the Order Entry Ports. The 

Order Entry Port Fees are reasonable 

because they enable the Exchange to 

offset, in part, its connectivity costs 

associated with making such ports 

available, including costs based on 

gateway software and hardware 

enhancements and resources dedicated 

to gateway development, quality 

assurance, and support. 

The Exchange believes that Order 

Entry Fees for the Order Entry Ports at 

$600 per month, per mnemonic is 

equitable and not unfairly 

discriminatory because the Exchange 

will assess the same fees for all Order 

Entry Ports to all 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. The 

Exchange believes the proposed Order 

Entry Fees and CTI Port Fees are fair 

and equitable, and therefore, will not 

unduly burden any particular group of 

market participants trading on the 

Exchange. The Exchange’s proposal to 

adopt CTI Port and continue Order 

Entry Fees would be applied in a 

uniform manner to all Exchange 

members. The proposed fees are 

designed to ensure a fair and reasonable 

use of Exchange resources by allowing 

the Exchange to recoup a certain portion 

of connectivity costs, while continuing 

to offer connectivity at competitive rates 

to Exchange members. 

The Exchange will not assess the 

Real-Time Risk Management Fee with 

respect to any member. 

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.21 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 email to rule-comments@

sec.gov. Please include File Number SR– 

Phlx–2014–83 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–Phlx–2014–83. 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 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 

10:00 a.m. and 3:00 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– 

2014–83, and should be submitted on or 

before February 2, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–00225 Filed 1–9–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73997; File No. SR–NYSE– 

2014–70] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Amending Its 

Price List to Eliminate Transaction 

Fees for Midpoint Passive Liquidity 

Orders That Remove Liquidity From 

the Exchange and That Are Designated 

With a ‘‘Retail’’ Modifier as Defined in 

Rule 13 

January 6, 2015. 

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 December 

22, 2014, 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, II, and III below, which Items 

have been prepared by the selfregulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 


tkelley on DSK3SPTVN1PROD with NOTICES