Document ID: SEC-2010-1736-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX PHLX LLC
Posted Date: 2010-11-12T05:00Z

[Federal Register Volume 75, Number 218 (Friday, November 12, 2010)]
[Notices]
[Pages 69493-69494]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-28540]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63257; File No. SR-Phlx-2010-155]

Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend the 
Fees Assessed for Use of the Testing Facility

November 5, 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 October 29, 2010, NASDAQ OMX PHLX LLC (``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 prepared by PHLX. 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 the 
Substance of the Proposed Rule Change

    PHLX proposes to amend the fees assessed for use of the Testing 
Facility. PHLX will implement the proposed rule change on November 1, 
2010.
    The text of the proposed rule change is available on the Exchange's 
Web site, at the principal office of the Exchange, on the Commission's 
Web site at http://www.sec.gov, 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, PHLX 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. PHLX 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
    PHLX proposes to amend the fees assessed for use of the Testing 
Facility. The Testing Facility provides subscribers with a virtual PHLX 
System test environment that closely approximates the production 
environment, on which they may test their automated systems that 
integrate with PHLX. Subscribers may test upcoming PHLX releases and 
product enhancements, as well as test software prior to implementation. 
Currently, PHLX assesses a fee of $285 per hour for active connection 
testing using current PHLX access protocols during the normal operating 
hours, and $333 per hour for such testing after hours.
    PHLX does not currently assess a fee for idle test ports. 
Subscribers often have test ports assigned to them through which no 
testing is conducted for extended periods, yet PHLX must maintain and 
constantly monitor these idle testing ports for purposes of billing 
under the current rule. Such monitoring represents a cost to PHLX with 
no off-setting fee. Further, subscribers have no incentive to notify 
PHLX when they have completed testing and no longer require a test 
port. Accordingly, PHLX is proposing to eliminate the current hourly 
fee structure and assess a flat fee of $300 per test port, per month. 
This

[[Page 69494]]

fee will cover the cost of maintaining these test ports and provide an 
incentive to firms to cancel test ports when they have completed 
testing.
    PHLX notes that it will continue to allow new subscribers and 
existing subscribers to test new services and modifications initiated 
by PHLX, and to test new services not previously accessed for the first 
30 days at no cost pursuant to paragraph (c) of the Testing Facility 
rule. This 30-day fee waiver includes testing for subscribers that are 
accessing PHLX through a service bureau for the first time. Subscribers 
must cancel the test port prior to the expiration of the 30-day free 
period in order to avoid future charges for test ports under the new 
rule. In addition, current subscribers will be able to cancel their 
idle ports at no cost at any point during the first month that the fee 
is effective. Further, PHLX is eliminating the word ``hourly'' from 
paragraph (c) of the Testing Facility rule, since the fees for the 
Testing Facility no longer include hourly fees. Last, PHLX is 
eliminating language concerning market data feed testing from paragraph 
(c) of the Testing Facility rule, since it is superfluous given that 
the rule already references fees that include such testing.
2. Statutory Basis
    PHLX believes that the proposed rule change is consistent with the 
provisions of Section 6 of the Act, \3\ in general, and with Section 
6(b)(4) of the Act, \4\ 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. The amended fee schedule applies to 
all subscribers equally based on the number of test ports subscribed. 
This proposed charge would apply to both members that obtain test ports 
for direct access and non-member service bureaus that act as a conduit 
for orders entered by PHLX members that are their customers. The 
proposed fees will cover the costs associated with separately offering 
the service, responding to customer requests, configuring PHLX's 
systems, programming to user specifications, and administering the 
service, among other things, and may provide PHLX with a profit to the 
extent costs are covered. PHLX believes that the proposed fee structure 
strikes a balance between covering these costs, and providing 
incentives to subscribers to make efficient use of Test Facility ports.
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    \3\ 15 U.S.C. 78f.
    \4\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    PHLX 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 Regarding 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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act \5\ and subparagraph (f)(2) of Rule 19b-4 
thereunder.\6\ 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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    \5\ 15 U.S.C. 78s(b)(3)(a)(ii).
    \6\ 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-2010-155 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-2010-155. 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 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 publicly available. All submissions 
should refer to File Number SR-Phlx-2010-155 and should be submitted on 
or before December 3, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-28540 Filed 11-10-10; 8:45 am]
BILLING CODE 8011-01-P