Document ID: SEC-2010-0789-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX PHLX, Inc.
Posted Date: 2010-05-28T04:00Z

[Federal Register: May 28, 2010 (Volume 75, Number 103)]
[Notices]               
[Page 30081-30082]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28my10-144]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62155; File No. SR-Phlx-2010-67]

 
Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change Relating 
to the Risk Management Interface

May 24, 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 May 17, 2010, NASDAQ OMX PHLX, Inc. (``Phlx'' or ``Exchange'') filed 
with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II 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 effect an information-related enhancement 
to the current Risk Management Feed Interface in Phlx XL II. The 
Exchange is not proposing any rule changes.
    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, 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 propose a series of 
enhancements to the interface for receiving 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 The Options Clearing Corporation.
    The Exchange currently provides Exchange members with real-time 
clearing trade updates through a Risk Management Feed known as the 
``RMP''.\3\ The updates include the members clearing trade messages on 
a low latency, real-time basis. The trade messages are routed to a 
member's connection containing certain information.\4\ 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;\5\ and trading action messages to inform market participants 
when a specific option or strategy is halted or released for trading on 
the Exchange. This existing RMP interface will be retired in September 
2010.
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    \3\ The Exchange assesses its members a Real-time Risk 
Management Fee of $.003 per contract for receiving this information. 
The Exchange is not proposing to amend this fee.
    \4\ The information includes, among other things, the following: 
(i) The Clearing Member Trade Agreement or ``CMTA'' or The Options 
Clearing Corporation or ``OCC'' number; (ii) Exchange badge or house 
number; and (iii) the Exchange internal firm identifier.
    \5\ The information related to complex order strategy messages 
includes information that lists the legs and the leg ratios, which 
uniquely defines this strategy for an underlying.
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    In connection with these enhancements, the Exchange proposes to 
rename the RMP interface as the Clearing Trade Interface (``CTI''). 
This proposed interface will provide increased throughput and 
significantly lower latency for clearing trade updates.\6\ In addition, 
the new interface will contain an indicator which will distinguish 
electronic \7\ and non-electronically \8\ delivered orders.\9\ This 
information will be available to members on a real-time basis.
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    \6\ The Exchange will post the technical specifications on its 
Web site and testing will be available. The Exchange intends to send 
an Options Technical Update to notify members of the new interface 
and testing availability.
    \7\ Electronically delivered orders do not include orders 
delivered through the Floor Broker Management System, but rather are 
delivered utilizing PHLX XL II.
    \8\ An order that is represented on the trading floor by a floor 
broker. See Exchange Rule 1063.
    \9\ Members that apply for this interface will continue to 
receive only their own trade data and data for their customers. 
Members utilizing RMP only receive their own trade data and data for 
their customers.
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    The Exchange is proposing to continue to provide real-time clearing 
trade updates, referred to as CTI, with significantly lower latency as 
well as additional information, such as trade detail information that 
distinguishes electronically and non-electronically delivered orders. 
This new CTI will be made available to users promptly after successful 
testing with the Exchange. CTI will be available to all members.\10\ 
The Exchange is not proposing any rule changes.
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    \10\ The Exchange assesses a Real-Time Risk Management Fee of 
$.003 per contract to receive this information. Currently RMP is 
available to all members.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \11\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \12\ in particular, in that it is designed to 
promote just and equitable principles of trade, 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, by providing members more efficient real-time clearing trade 
updates. This proposal is not a burden on competition and serves to 
protect investors and the public interest, in that CTI is a tool for 
members to receive real-time trade details and utilize that information 
to

[[Page 30082]]

capture fees on a real-time basis and also receive information on 
whether the orders were electronically or non-electronically delivered. 
This information will provide members more transparency on the fees 
assessed on transactions. The clearing trade updates are and will 
continue to be available to all members.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
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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

    Because the foregoing proposed rule change does not: (1) 
Significantly affect the protection of investors or the public 
interest; (2) impose any significant burden on competition; and (3) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate if consistent with 
the protection of investors and the public interest, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \13\ and Rule 19b-
4(f)(6) thereunder.\14\
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(6). When filing a proposed rule change 
pursuant to Rule 19b-4(f)(6) under the Act, an Exchange is required 
to give the Commission written notice of its intent to file the 
proposed rule change, along with a brief description and text of the 
proposed rule change, at least five business days prior to the date 
of filing of the proposed rule change, or such shorter time as 
designated by the Commission. The Exchange has met this requirement.
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    Phlx has requested that the Commission waive the 30-day operative 
delay. The Commission hereby grants that request.\15\ The Commission 
believes that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest. The Commission notes 
that the Exchange proposes to allow members to test the CTI 
immediately, and to migrate to the CTI upon successful testing. The 
Exchange proposes to retire the RMP in September 2010. Waiving the 
operative delay will thus allow the Exchange to provide members an 
increased period of time to test and migrate to the CTI before the 
retirement of the RMP in September 2010.
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    \15\ For the purposes only of waiving the operative date of this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission may summarily abrogate 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 the furtherance of 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 rule-comments@sec.gov. Please include 
File Number SR-Phlx-2010-67 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-2010-67. 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 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-2010-67 and should be 
submitted on or before June 18, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-12873 Filed 5-27-10; 8:45 am]
BILLING CODE 8010-01-P