Document ID: SEC-2010-0811-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX PHLX, Inc.
Posted Date: 2010-06-03T04:00Z

[Federal Register: June 3, 2010 (Volume 75, Number 106)]
[Notices]               
[Page 31499-31500]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03jn10-103]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62179; File No. SR-Phlx-2010-77]

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

 May 26, 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 25, 2010, NASDAQ OMX PHLX, Inc. (``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 existing NASDAQ OMX PHLX, Inc. 
Fee Schedule (``fee schedule'') solely to create a more user-friendly 
Fee Schedule.
    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 reformat the Fee 
Schedule to make it more user-friendly. The newly proposed Fee Schedule 
includes the current fees, which remain unchanged. In the process of 
reformatting the Fee Schedule, additional connecting language was added 
where appropriate to provide clarity to the end-user. The proposal 
eliminates the current endnotes. The Exchange believes that by placing 
the language that is currently contained in endnotes into the text of 
the fees better displays any exceptions or exclusions referenced in 
those endnotes by more prominently displaying them in the text.
Table of Contents
    The Exchange proposes to replace the descriptive term ``Category'' 
with a new term, ``Sections'', in the table of contents. This is being 
done solely to eliminate confusion in the use of the word ``category'' 
which is utilized in different ways by the Exchange in its fee 
proposals. The Exchange is also combining the Sector Index Options Fees 
and the U.S. Dollar-Settled Foreign Currency (``WCO'') Options Fees 
into one section on the Fee Schedule.
Equity Options Fees
    The Exchange converted the current equity options fees into a table 
format for ease of reference.\3\ Currently, the Exchange does not 
separately display an options transaction charge for penny pilot 
program options (``Penny Pilot'') \4\ and Non-Penny Pilot options for 
customers, professionals and firms. The Exchange is proposing to 
display the separate categories in this revised Fee Schedule although 
the fees remain unchanged. The Exchange's proposal displays a similar 
fee for Penny Pilot and non-Penny Pilot options transactions charges 
for customer, professionals and firms to make clear that there is no 
price distinction for those market participants between Penny and non-
Penny options. The Exchange is not proposing any amendments to its 
fees.
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    \3\ The Exchange also proposes removing all references to ``per 
contract'' after each fee in the table.
    \4\ The Penny Pilot was established in January 2007; and in 
October 2009, it was expanded and extended through December 31, 
2010. See Securities Exchange Act Release Nos. 55153 (January 23, 
2007), 72 FR 4553 (January 31, 2007) (SR-Phlx-2006-74) (approval 
order establishing Penny Pilot); 60873 (October 23, 2009), 74 FR 
56675 (November 2, 2009) (SR-Phlx-2009-91) (expanding and extending 
Penny Pilot); 60966 (November 9, 2009), 74 FR 59331 (November 17, 
2009) (SR-Phlx-2009-94) (adding seventy-five classes to Penny 
Pilot); and 61454 (February 1, 2010), 75 FR 6233 (February 8, 2010) 
(SR-Phlx-2010-12) (adding seventy-five options classes to the Penny 
Pilot). See also SR-Phlx-2010-65 (adding additional seventy-five 
option classes to the Penny Pilot). See also Exchange Rule 1034.
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    Additionally, the Exchange proposes to transplant endnotes (C) and 
(5) from the endnote section of the Fee Schedule, which the Exchange 
proposes to eliminate, into the Equity Options Fees section to clarify 
which notes apply to the displayed fees. The Exchange also proposes a 
similar change in the Payment for Order Flow Fees section of the Equity 
Option Fees with respect to endnotes (30) and (32). Additional non-
substantive language has been added where appropriate to indicate what 
section of the Fee Schedule the transplanted endnote refers to in the 
Fee Schedule. For example, the words ``Payment for Order Flow Fees will 
be'' was added to the beginning of endnote (30) to clarify the context 
of that transplanted endnote with respect to the Payment for Order Flow 
Fees. The Exchange added similar language to the beginning of endnotes 
throughout the Fee Schedule when transplanting that text to add 
reference for the reader and for purposes of clarity.
Sector Index Options Fees and U.S. Dollar-Settled Foreign Currency 
Options Fees
    The Exchange similarly converted the current fees into a table for 
ease of reference and combined the sector index and U.S. dollar-settled 
foreign currency option fees into the same section of the Fee Schedule.
Access Service, Cancellation, Membership, Regulatory and Other Fees
    The Exchange reformatted this section of the Fee Schedule to 
reorder these fees for ease of reference. The Options Regulatory Fee 
was relocated after the Real-Time Risk Management Fee with no changes. 
Next, all permit related fees were grouped together with the endnotes 
weaved into this section with the clarifying language added to each 
endnote as described herein. The Streaming Quote Trader and Remote 
Streaming Quote Trader Fees were

[[Page 31500]]

organized into tables with no changes to the text. The remainder of the 
fees in this section are rearranged in order to present the fees by 
topic. The endnotes were transplanted and words were added to indicate 
which fee the note references within the Fee Schedule. The Examinations 
Fee and FINRA fees remain the same.
Market Access Provider Subsidy, Options Floor Broker Subsidy, Routing 
Fees, Proprietary Data Feed Fees, NASDAQ OMX PSX
    The Exchange did not amend the following sections of the Fee 
Schedule: Market Access Provider Subsidy, Options Floor Broker Subsidy, 
Routing Fees, Proprietary Data Feed Fees and NASDAQ OMX PSX. As 
previously stated the Exchange eliminated the endnotes section and 
incorporated those endnotes into the Fee Schedule instead by 
transplanting them into the corresponding pages of the Fee Schedule. In 
addition, the Exchange also proposes to amend language in endnote 55 
which refers to the monthly charges for the fees for Trading Floor 
Personnel Registration Fee and the Fees for Certain Stock Exchange 
Clerks by removing the dollar amounts from that text.
    These proposed changes, as previously mentioned, are non-
substantive amendments and are added for the sole purpose of creating a 
simplified, easily readable format for displaying the various fees.
2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule 
is consistent with Section 6(b) of the Act \5\ in general, and furthers 
the objectives of Section 6(b)(4) of the Act \6\ in particular, in that 
it is an equitable allocation of reasonable fees and other charges 
among Exchange members. The Exchange believes that this proposal is 
both reasonable and equitable because providing the members with a more 
user-friendly Fee Schedule will better display the allocation of fees 
among Exchange members. The Exchange believes that this proposed format 
will provide additional transparency of Exchange fees.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4).
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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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \7\ and paragraph (f)(3) of Rule 19b-4 \8\ 
thereunder. At any time within 60 days of the filing of the 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 furtherance of the purposes of the Act.
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(3).
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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-2010-77 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-2010-77. 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-2010-77 and should be submitted on or before June 24, 2010.

    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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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-13337 Filed 6-2-10; 8:45 am]
BILLING CODE 8010-01-P