Document ID: SEC-2011-1163-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX PHLX LLC
Posted Date: 2011-08-11T04:00Z

[Federal Register Volume 76, Number 155 (Thursday, August 11, 2011)]
[Notices]
[Pages 49821-49822]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-20387]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65046; File No. SR-Phlx-2011-105]

Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Relating to 
the Active SQF Port Fee

August 5, 2011.
    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 August 2, 2011, 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 the Exchange's Fee Schedule to 
extend the Active Specialized Quote Feed (``SQF'') Port Fee monthly cap 
from its current expiration of November 30, 2011 \3\ to December 30, 
2011.
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    \3\ See Securities Exchange Act Release No. 63780 (January 26, 
2011), 76 FR 5846 (February 2, 2011) (SR-Phlx-2011-07).
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    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 extend the timeframe 
for member organizations to cap their Active SQF Port Fees in order 
that they will have additional time to transition from SQF 5.0 to SQF 
6.0.\4\ Active SQF ports refer to ports that receive inbound quotes at 
any time within that month. 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.
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    \4\ The Exchange released SQF 6.0 on October 11, 2010. The 
Exchange anticipates that member organizations will utilize both SQF 
5.0 and SQF 6.0 for a period of time. SQF 6.0 will increase 
efficiency for interested participants by allowing them to access in 
a single feed available to all participants, rather than through 
accessing multiple feeds, information such as execution reports and 
other relevant data. In order for participants to access all of this 
information currently or for any that do not use SQF 6.0 in the 
future, they must rely on a risk management feed and the TOPO/TOPO 
Plus Orders Exchange interfaces. Non quoting firms that would like 
to receive the relevant information available over SQF will be 
allowed to connect to the SQF interface, but not send quotes. Data 
proposed for SQF 6.0 will initially include the following: (1) 
Options Auction Notifications (e.g., opening imbalance, market 
exhaust, PIXL or other information currently provided on SQF 5.0); 
(2) Options Symbol Directory Messages (currently provided on SQF 
5.0); (3) System Event Messages (e.g., start of messages, start of 
system hours, start of quoting, start of opening); (4) Complex Order 
Strategy Auction Notifications (COLA); (5) Complex Order Strategy 
messages; (6) Option Trading Action Messages (e.g., halts, resumes); 
and (7) Complex Strategy Trading Action Message (e.g., halts, 
resumes). See Securities Exchange Act Release No. 63034 (October 4, 
2010), 75 FR 62441 (October 8, 2010) (SR-Phlx-2010-124).
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    The Exchange currently has a tiered Active SQF Port Fee as follows:

------------------------------------------------------------------------
                                                       Cost Per Port Per
              Number of Active SQF Ports                     Month
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0-4..................................................                350
5-18.................................................              1,250
19-40................................................              2,350
41 and over..........................................              3,000
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    Active SQF Port Fees are capped at $500 per month for member 
organizations that are (i) Phlx Only Members; \5\ and (ii) have 50 or 
less SQT assignments affiliated with their member organization. 
Currently, Active SQF Port Fees are capped at $40,000 per month 
(``Cap'') until November 30, 2011 for all member organizations other 
than those member organizations who meet the requirements of the $500 
per month cap. The purpose of the Cap is to ensure member organizations 
are not assessed fees in excess of the Active SQF Port Fees.
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    \5\ For purposes of the Active SQF Port Fee, a Phlx Only Member 
is a Phlx member that is not a member or member organization of 
another national securities exchange.
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    The Exchange proposes to extend the Cap until December 30, 2011 
because the Exchange believes that member organizations would require 
additional time to properly transition to SQF 6.0 ports. On January 2, 
2012, there will no longer be a Cap in effect for the Active SQF Port 
Fee. No other changes are proposed with respect to Active SQF Port 
Fees.
2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule 
is consistent with Section 6(b) of the Act \6\ in general, and furthers 
the objectives of Section 6(b)(4) of the Act \7\ in particular, in that 
it is an equitable allocation of reasonable fees and other charges 
among

[[Page 49822]]

Exchange members and other persons using its facilities.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that its proposal to extend the applicability 
of the Cap for Active SQF Port Fees is both reasonable and equitable 
because it would allow member organizations additional time to 
transition from SQF 5.0 to SQF 6.0. The proposal is equitable and not 
unfairly discriminatory in that the Exchange is extending the Cap for 
all member organizations.

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.\8\ 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.
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    \8\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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-2011-105 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-2011-105. 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-2011-105 and should be 
submitted on or before September 1, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-20387 Filed 8-10-11; 8:45 am]
BILLING CODE 8011-01-P