Document ID: SEC-2010-1852-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX PHLX LLC
Posted Date: 2010-12-08T05:00Z

[Federal Register Volume 75, Number 235 (Wednesday, December 8, 2010)]
[Notices]
[Pages 76511-76512]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-30702]

[[Page 76511]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63406; File No. SR-Phlx-2010-165]

Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Relating to 
Transaction Billing and Other Clarifying Amendments

December 1, 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 November 23, 2010, 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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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: (i) Amend the 
calculation of transaction fees for billing purposes from a settlement 
date to trade date; and (ii) make other minor technical conforming 
amendments to the Fee Schedule.
    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 invoices received by members and member 
organizations for January 2011 monthly billing, except for the minor 
technical amendments, which are effective upon filing.
    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 amend the Exchange's 
Fee Schedule to include language to specify that the Exchange will 
calculate transaction fees on a calendar month trade date basis. The 
Exchange is proposing to enhance its billing system to be consistent 
with that of other NASDAQ OMX self-regulatory organizations.\3\
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    \3\ NASDAQ Stock Market LLC and the NASDAQ Options Market both 
utilize trade date billing.
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    Currently, the Exchange calculates its transaction fees, except the 
Options Regulatory Fee, on a settlement date basis.\4\ For example, a 
member or member organization who will receive a billing invoice for 
the month of November 2010 will be assessed fees for trades which 
settled on November 1, 2010 through November 30, 2010 (``settlement 
date billing''). In other words, the member is being assessed fees for 
trades that occurred on October 29, 2010 (trade date) through November 
29, 2010 (trade date).\5\ This is an example of the Exchange's current 
settlement date billing.
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    \4\ In the United States options settle on a trade date (``T'') 
+ 1 basis or one day after the trade took place.
    \5\ The Exchange invoices its members for fees on a monthly 
basis.
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    The Exchange is proposing to bill its members on a trade date basis 
beginning with the January monthly billing. The impact to members would 
be as follows for the December and January monthly billing periods. A 
member who receives an invoice for the month of December 2010 would be 
assessed fees from November 30, 2010 (trade date) through December 31, 
2010 (trade date) instead of through December 30, 2010 (trade date). A 
member who receives an invoice for the month of January 2011 would be 
assessed fees from January 3, 2010 (trade date) through January 31, 
2010 (trade date) (``trade date billing'') [sic].\6\ This January 
monthly invoice would include fees for trade date January 3, 2010. In 
the current billing system, the member would have been assessed fees 
for settlement date January 3, 2010 in the December billing invoice, 
but because of the conversion to trade date billing, the Exchange would 
assess fees for January 3, 2010 as trade date billing and include that 
day in the January monthly billing invoice. The Exchange would then 
continue to bill members for each month thereafter including in that 
month's invoice the first trade day of the month as the first billing 
date and the last trade day of that month as the last billing date for 
that monthly invoice.\7\
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    \6\ The Commission notes that the references in this sentence to 
2010 should be to 2011.
    \7\ The Exchange intends to issue an Options Trader Alert 
specifying the exact days that would be included in both the 
December 2010 and January 2011 billing cycles as notice to members.
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    Additionally, the Exchange intends to make a few minor technical 
conforming amendments to the Fee Schedule to reflect the Exchange's 
recent conversion to an LLC,\8\ recent amendments to Rule 1014 \9\ and 
recent amendments to Section II of the Fee Schedule.\10\
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    \8\ See Securities Exchange Act Release No. 62783 (August 27, 
2010), 75 FR 54204 (September 3, 2010) (SR-Phlx-2010-104) (a rule 
change to amend NASDAQ OMX PHLX from a Delaware corporation to a 
Delaware limited liability company).
    \9\ See Securities Exchange Act Release No. 63036 (October 4, 
2010), 75 FR 62621 (October 12, 2010) (SR-Phlx-2010-131) (a rule 
change to amend Exchange Rule 1014 to among other things amend the 
definitions of Streaming Quote Traders and Remote Streaming Quote 
Traders).
    \10\ See Securities Exchange Act Release No. 63252 (November 5, 
2010), 75 FR 69486 (November 12, 2010) (SR-Phlx-2010-150) (a rule 
change to add the KBW Bank Index (``BKX'') to the Equity Option 
Fees).
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    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 invoices received by members and member 
organizations for January 2011 monthly billing, except for the minor 
technical amendments, which are effective upon filing.
2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule 
is consistent with Section 6(b) of the Act \11\ in general, and 
furthers the objectives of Section 6(b)(4) of the Act \12\ in 
particular, in that it is an equitable allocation of reasonable fees 
and other charges among Exchange members and other persons using its 
facilities. The Exchange believes that the proposed conversion from 
settlement date billing to calendar month trade date billing is 
equitable because it would apply uniformly to all members. The Exchange 
also believes that the proposal is reasonable because other self-
regulatory organizations already assess transaction fees on a trade 
date basis.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(4).
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    The proposed technical conforming amendments to the Fee Schedule 
are minor in nature and provide clarity to

[[Page 76512]]

the Fee Schedule by conforming the text of the Fee Schedule to the 
other Rules of the Exchange.

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\13\ and paragraph (f)(2) of Rule 19b-4\14\ 
thereunder. 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.
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    \13\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \14\ 17 CFR 240.19b-4(f)(2).
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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 rule-comments@sec.gov. Please include 
File Number SR-Phlx-2010-165 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-2010-165. 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 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-2010-165 and should be 
submitted on or before December 29, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-30702 Filed 12-7-10; 8:45 am]
BILLING CODE 8011-01-P