Document ID: SEC-2021-0355-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Nasdaq PHLX, LLC
Posted Date: 2021-03-15T04:00Z

[Federal Register Volume 86, Number 48 (Monday, March 15, 2021)]
[Notices]
[Pages 14352-14355]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-05240]

[[Page 14352]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91285; File No. SR-Phlx-2021-12)

Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change to Proposed Rule 
Change To Amend Options 7, Section 3, ``Rebates and Fees for Adding and 
Removing Liquidity in SPY''

March 9, 2021.
    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 March 1, 2021, Nasdaq 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 the 
Substance of the Proposed Rule Change

    The Exchange proposes to amend Phlx's Pricing Schedule at Options 
7, Section 3, ``Rebates and Fees for Adding and Removing Liquidity in 
SPY.''
    The text of the proposed rule change is available on the Exchange's 
website at https://listingcenter.nasdaq.com/rulebook/phlx/rules, 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
    Phlx proposes to amend its pricing within Options 7, Section 3, 
``Rebates and Fees for Adding and Removing Liquidity in SPY.'' 
Specifically, the Exchange proposes to amend Options 7, Section 3, Part 
A, Simple Orders to: (1) Decrease the SPY Simple Order Customer Fee for 
Removing Liquidity; and (2) amend the SPY Lead Market Maker and Market 
Maker tier qualifications to earn a Simple Order Rebate for Adding 
Liquidity. Each change will be described below.
Fee for Removing Liquidity
    The Exchange proposes to decrease the current $0.42 per contract 
Customer Fee for Removing Liquidity in SPY to $0.38 per contract for 
Simple Orders. The Exchange believes decreasing this fee will 
incentivize market participants to send additional Customer Simple 
Orders to Phlx in SPY.
    The Exchange is not amending any other Fees for Removing Liquidity 
\3\ in SPY for Simple Orders. Customers will continue to pay the lowest 
Simple Order Fee for Removing Liquidity in SPY.
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    \3\ Today, all non-Customers pay a $0.48 per contract Fee for 
Removing Liquidity in SPY.
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Rebate for Adding Liquidity
    Today, Lead Market Makers and Market Makers are paid Simple Order 
Rebates for Adding Liquidity on electronically executed Simple Order 
contracts per day in a month when adding liquidity in SPY. The Simple 
Order Rebate for Adding Liquidity is determined by calculating the 
average daily volume of electronically executed Lead Market Maker and 
Market Maker Simple Order contracts per day in a month in SPY.\4\ 
Today, the applicable tier schedule is as follows:
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    \4\ This would include Lead Market Maker or Market Maker quotes 
or orders that were executed.

------------------------------------------------------------------------
                                                            Rebate for
           Tiers            Average daily volume ``ADV''      adding
                                                             liquidity
------------------------------------------------------------------------
1.........................  1 to 2,499..................           $0.12
2.........................  2,500 to 4,999..............            0.15
3.........................  5,000 to 19,999.............            0.18
4.........................  20,000 to 34,999............            0.24
5.........................  35,000 to 49,999............            0.27
6.........................  greater than 49,999.........            0.32
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    The Exchange proposes to amend the current tier schedule. Instead 
of utilizing average daily volume to qualify for a Lead Market Maker or 
Market Maker Simple Order Rebate to Add Liquidity when adding liquidity 
in SPY, the Exchange proposes to utilize a percentage of all cleared 
customer volume at The Options Clearing Corporation in Multiply Listed 
Equity Options and Exchange-Traded Products (``TCV''). Simple Order 
Rebates to Add Liquidity will continue to be paid on electronically 
executed Lead Market Maker and Market Maker Simple Order contracts per 
day in a month which add liquidity in SPY. The Exchange is not amending 
the Rebates for Adding Liquidity that are paid to Lead Market Makers 
and Market Makers for transacting Simple Orders in SPY. Lead Market 
Makers and Market Makers will be paid per the highest tier achieved 
pursuant to the below tier schedule:

------------------------------------------------------------------------
                                                            Rebate for
           Tiers             Adds liquidity in SPY as a       adding
                                  percentage of TCV          liquidity
------------------------------------------------------------------------
1.........................  up to 0.02%.................           $0.12
2.........................  up to 0.04%.................            0.15
3.........................  up to 0.10%.................            0.18
4.........................  up to 0.20%.................            0.24
5.........................  up to 0.40%.................            0.27
6.........................  greater than 0.40%..........            0.32
------------------------------------------------------------------------

    Specifically, the Exchange would pay a $0.12 per contract Lead 
Market Maker or Market Maker Simple Order Rebate to Add Liquidity for 
TCV up to 0.02% \5\ which adds [sic] in SPY. Today, the Exchange pays a 
$0.12 per contract Lead Market Maker or Market Maker Simple Order 
Rebate to Add Liquidity for average daily volume up to 2,499 contracts 
per day in a month which add liquidity in SPY.
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    \5\ 0.02% TCV is representative of approximately 5,000 contracts 
per day when TCV is 25,000,000 contracts per day.
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    The Exchange proposes to pay a $0.15 per contract Lead Market Maker 
or Market Maker Simple Order Rebate to Add Liquidity for TCV up to 
0.04% \6\ which adds liquidity in SPY. Today, the Exchange pays a $0.15 
per contract Lead Market Maker or Market Maker Simple Order Rebate to 
Add Liquidity for average daily volume from 2,500 to 4,999 contracts 
per day in a month which adds liquidity in SPY.
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    \6\ 0.04% TCV is representative of approximately 10,000 
contracts per day when TCV is 25,000,000 contracts per day.
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    The Exchange proposes to pay a $0.18 per contract Lead Market Maker 
or Market Maker Simple Order Rebate to Add Liquidity for TCV up to 
0.10% \7\ which adds liquidity in SPY. Today, the Exchange pays a $0.18 
per contract Lead Market Maker or Market Maker Simple Order Rebate to 
Add Liquidity for average daily volume from 5,000 to

[[Page 14353]]

19,999 contracts per day in a month which adds liquidity in SPY.
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    \7\ 0.10% TCV is representative of approximately 25,000 
contracts per day when TCV is 25,000,000 contracts per day.
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    The Exchange proposes to pay a $0.24 per contract Lead Market Maker 
or Market Maker Simple Order Rebate to Add Liquidity for TCV up to 
0.20% \8\ which adds liquidity in SPY. Today, the Exchange pays a $0.24 
per contract Lead Market Maker or Market Maker Simple Order Rebate to 
Add Liquidity for average daily volume from 20,000 to 34,999 contracts 
per day in a month which adds liquidity in SPY.
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    \8\ 0.20% TCV is representative of approximately 50,000 
contracts per day when TCV is 25,000,000 contracts per day.
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    The Exchange proposes to pay a $0.27 per contract Lead Market Maker 
or Market Maker Simple Order Rebate to Add Liquidity for TCV up to 
0.40% \9\ which adds liquidity in SPY. Today, the Exchange pays a $0.27 
per contract Lead Market Maker or Market Maker Simple Order Rebate to 
Add Liquidity for average daily volume from 35,000 to 49,999 contracts 
per day in a month which adds liquidity in SPY.
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    \9\ 0.40% TCV is representative of approximately 100,000 
contracts per day when TCV is 25,000,000 contracts per day.
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    The Exchange proposes to pay a $0.32 per contract Lead Market Maker 
or Market Maker Simple Order Rebate to Add Liquidity for TCV greater 
than 0.40% which adds liquidity in SPY. Today, the Exchange pays a 
$0.32 per contract Lead Market Maker or Market Maker Simple Order 
Rebate to Add Liquidity for average daily volume greater than 49,999 
contracts per day in a month which adds liquidity in SPY.
    As proposed, Lead Market Maker and Market Maker Simple Order 
Rebates to Add Liquidity in SPY would require an increased amount of 
electronically executed Lead Market Maker and Market Maker Simple Order 
contracts per day in a month which adds liquidity in SPY to qualify for 
the same tiers as members qualified in the past. For example, with this 
proposal, the Tier 1 Simple Order Rebate to Add Liquidity will continue 
to pay a $0.12 per contract Simple Order Lead Market Maker and Market 
Maker Rebates to Add Liquidity in SPY; however, instead of executing 
contracts which adds liquidity from 1 to 2,499 ADV to qualify for a 
Tier 1 rebate, a Participant that executes from 1 to approximately 
5,000 contracts in a day (which is the percentage of all cleared 
customer volume at The Options Clearing Corporation in Multiply Listed 
Equity Options and Exchange-Traded Products or ``TCV''), which adds 
liquidity, would now qualify for the Tier 1 $0.12 Simple Order Lead 
Market Maker and Market Maker Rebate to Add Liquidity in SPY. Today, 
Participants that execute 2,500 to 4,999 ADV of Simple Order Lead 
Market Maker and Market Maker contracts, which adds liquidity, would 
qualify for the Tier 2 Simple Order Lead Market Maker and Market Maker 
Rebate to Add Liquidity in SPY which pays $0.15 per contract. With this 
proposal, those Participants that previously qualified for the Tier 2 
rebate would now qualify for the Tier 1 Simple Order Lead Market Maker 
and Market Maker Rebate to Add Liquidity. Likewise, with this proposal 
the Tier 2 Simple Order Rebate to Add Liquidity will continue to pay a 
$0.15 per contract Simple Order Lead Market Maker and Market Maker 
Rebate to Add Liquidity in SPY; however, instead of executing contracts 
from 2,500 to 4,999 ADV, which adds liquidity, to qualify for a Tier 2 
rebate, a Participant that executes up to approximately 10,000 
contracts TCV in a day, which adds liquidity, would now qualify for the 
Tier 2 Simple Order Lead Market Maker and Market Maker Rebate to Add 
Liquidity which pays $0.15 per contract. Today, Participants who 
executed 5,000 to 19,999 ADV qualify for the higher Tier 3 Simple Order 
Lead Market Maker and Market Maker Rebate to Add Liquidity of $0.18 per 
contract. Each tier requirement has been increased and therefore 
Participants in Tiers 2-6 would have to execute a greater amount of 
Simple Order Lead Market Maker and Market Maker contracts which adds 
liquidity in SPY to earn the same rebate as they previously earned.
    With this proposal, all Simple Order Rebate to Add Liquidity tiers 
require a greater amount of executed contracts which add liquidity in 
SPY to qualify for the same tier, except for those Participants that 
today qualify for Tier 1.\10\ Phlx believes its proposal will continue 
to incentivize the submission of Lead Market Maker and Market Maker 
Simple Orders by continuing to offer rebates for the submission of 
these orders which add liquidity in SPY. Today, the Exchange only pays 
Simple Order Rebates to Add Liquidity in SPY for Lead Market Maker and 
Market Maker Simple Orders which add liquidity in SPY and this will 
remain the case.
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    \10\ Tier 1 continues to pay the same $0.12 per contract Simple 
Order Lead Market Maker and Market Maker Rebate to Add Liquidity for 
Participants who submit up to approximately 5,000 TCV contracts 
which add liquidity in SPY.
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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 
Sections 6(b)(4) and 6(b)(5) of the Act,\12\ 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, and is not designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange's proposed changes to its Pricing Schedule are 
reasonable in several respects. As a threshold matter, the Exchange is 
subject to significant competitive forces in the market for options 
securities transaction services that constrain its pricing 
determinations in that market. The fact that this market is competitive 
has long been recognized by the courts. In NetCoalition v. Securities 
and Exchange Commission, the D.C. Circuit stated as follows: ``[n]o one 
disputes that competition for order flow is `fierce.' . . . As the SEC 
explained, `[i]n the U.S. national market system, buyers and sellers of 
securities, and the broker-dealers that act as their order-routing 
agents, have a wide range of choices of where to route orders for 
execution'; [and] `no exchange can afford to take its market share 
percentages for granted' because `no exchange possesses a monopoly, 
regulatory or otherwise, in the execution of order flow from broker 
dealers'. . . .'' \13\
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    \13\ NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010) 
(quoting Securities Exchange Act Release No. 59039 (December 2, 
2008), 73 FR 74770, 74782-83 (December 9, 2008) (SR-NYSEArca-2006-
21)).
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    The Commission and the courts have repeatedly expressed their 
preference for competition over regulatory intervention in determining 
prices, products, and services in the securities markets. In Regulation 
NMS, while adopting a series of steps to improve the current market 
model, the Commission highlighted the importance of market forces in 
determining prices and SRO revenues and, also, recognized that current 
regulation of the market system ``has been remarkably successful in 
promoting market competition in its broader forms that are most 
important to investors and listed companies.'' \14\
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    \14\ Securities Exchange Act Release No. 51808 (June 9, 2005), 
70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting 
Release'').
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    Numerous indicia demonstrate the competitive nature of this market. 
For example, clear substitutes to the Exchange exist in the market for 
options security transaction services. The Exchange is only one of 
sixteen options exchanges to which market participants may direct their 
order flow. Within this environment, market participants can freely and 
often do shift their order flow among the Exchange and competing

[[Page 14354]]

venues in response to changes in their respective pricing schedules. As 
such, the proposal represents a reasonable attempt by the Exchange to 
increase its liquidity and market share relative to its competitors.
Fee for Removing Liquidity
    The Exchange's proposal to decrease the current $0.42 per contract 
Customer Fee for Removing Liquidity in SPY to $0.38 per contract for 
Simple Orders is reasonable. Decreasing the Simple Order Customer Fee 
for Removing Liquidity in SPY will incentivize market participants to 
send additional Customer SPY Simple Orders to Phlx. Customers will 
continue to pay the lowest Simple Order Fee for Removing Liquidity in 
SPY as compared to other market participants.\15\
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    \15\ See note 3 above.
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    The Exchange's proposal to decrease the current $0.42 per contract 
Customer Fee for Removing Liquidity in SPY to $0.38 per contract for 
Simple Orders is equitable and not unfairly discriminatory. Customers 
would continue to receive favorable pricing as compared to other market 
participants because Customer liquidity enhances liquidity on the 
Exchange for the benefit of all market participants. Specifically, 
Customer liquidity benefits all market participants by providing more 
trading opportunities which attracts market makers. An increase in the 
activity of these market participants (particularly in response to 
pricing) in turn facilitates tighter spreads which may cause an 
additional corresponding increase in order flow from other market 
participants.
Rebate for Adding Liquidity
    The Exchange's proposal to amend the current tier schedule to 
remove average daily volume as a tier qualifier for a Lead Market Maker 
or Market Maker Simple Order Rebate to Add Liquidity when adding 
liquidity in SPY and instead utilize a percentage of all cleared 
customer volume at The Options Clearing Corporation in Multiply Listed 
Equity Options and Exchange-Traded Products or ``TCV'' is reasonable, 
equitable and not unfairly discriminatory. The Exchange's proposal is 
intended to provide a measure for the amount of contracts that would be 
eligible to qualify a market participant submitting electronically 
executed Lead Market Maker and Market Maker Simple Order contracts per 
day in a month which add liquidity in SPY for a certain rebate. The 
greater the amount of contracts submitted by the member, the larger the 
Lead Market Maker or Market Maker Simple Order Rebate to Add Liquidity 
when adding liquidity in SPY. The Exchange believes that measuring the 
contracts as a percentage of TCV is a fair and equitable method for 
calculating Simple Order Customer volume executed on Phlx when adding 
liquidity in SPY. The Exchange would uniformly apply this measure to 
all eligible members to determine the corresponding rebate. Lead Market 
Makers and Market Makers will be paid per the highest tier achieved.
    The Exchange's proposal to amend the tier qualifications for Lead 
Market Maker or Market Maker Simple Order Rebates to Add Liquidity when 
adding liquidity in SPY is reasonable.\16\ As proposed, an increased 
amount of electronically executed Lead Market Maker and Market Maker 
Simple Order contracts per day in a month which add liquidity in SPY 
would need to be submitted to qualify for the same tiers as members 
qualified in the past with the exception of Tier 1.\17\ With this 
proposal, all Simple Order Rebate to Add Liquidity tiers require a 
greater amount of executed contracts which add liquidity in SPY to 
qualify for the same rebate as the Participant had previously qualified 
for prior to this proposal. Despite the increased volume 
qualifications, Phlx believes its proposal will continue to incentivize 
the submission of Lead Market Maker and Market Maker Simple Orders by 
continuing to offer rebates for the submission of these orders which 
add liquidity in SPY. Today, the Exchange only pays Simple Order 
Rebates to Add Liquidity in SPY for Lead Market Maker and Market Maker 
Simple Orders and this will remain the case. Lead Market Makers and 
Market Makers will be paid per the highest tier achieved.
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    \16\ With this proposal, Phlx would pay a $0.12 per contract 
Lead Market Maker or Market Maker Simple Order Rebate to Add 
Liquidity for TCV up to 0.02% which adds liquidity in SPY. Today, 
the Exchange pays a $0.12 per contract Lead Market Maker or Market 
Maker Simple Order Rebate to Add Liquidity for average daily volume 
up to 2,499 contracts per day in a month which adds liquidity in 
SPY. The Exchange proposes to pay a $0.15 per contract Lead Market 
Maker or Market Maker Simple Order Rebate to Add Liquidity for TCV 
up to 0.04% which adds liquidity in SPY. Today, the Exchange pays a 
$0.15 per contract Lead Market Maker or Market Maker Simple Order 
Rebate to Add Liquidity for average daily volume from 2,500 to 4,999 
contracts per day in a month which adds liquidity in SPY. The 
Exchange proposes to pay a $0.18 per contract Lead Market Maker or 
Market Maker Simple Order Rebate to Add Liquidity for TCV up to 
0.10% which adds in SPY. Today, the Exchange pays a $0.18 per 
contract Lead Market Maker or Market Maker Simple Order Rebate to 
Add Liquidity for average daily volume from 5,000 to 19,999 
contracts per day in a month which adds liquidity in SPY. The 
Exchange proposes to pay a $0.24 per contract Lead Market Maker or 
Market Maker Simple Order Rebate to Add Liquidity for TCV up to 
0.20% which adds liquidity in SPY. Today, the Exchange pays a $0.24 
per contract Lead Market Maker or Market Maker Simple Order Rebate 
to Add Liquidity for average daily volume from 20,000 to 34,999 
contracts per day in a month which adds liquidity in SPY. The 
Exchange proposes to pay a $0.27 per contract Lead Market Maker or 
Market Maker Simple Order Rebate to Add Liquidity for TCV up to 
0.40% which adds liquidity in SPY. Today, the Exchange pays a $0.27 
per contract Lead Market Maker or Market Maker Simple Order Rebate 
to Add Liquidity for average daily volume from 35,000 to 49,999 
contracts per day in a month which adds liquidity in SPY.
    The Exchange proposes to pay a $0.32 per contract Lead Market 
Maker or Market Maker Simple Order Rebate to Add Liquidity for TCV 
greater than 0.40% which adds liquidity in SPY. Today, the Exchange 
pays a $0.32 per contract Lead Market Maker or Market Maker Simple 
Order Rebate to Add Liquidity for average daily volume greater than 
49,999 contracts per day in a month which adds liquidity in SPY.
    \17\ Tier 1 continues to pay the same $0.12 per contract Simple 
Order Lead Market Maker and Market Maker Rebate to Add Liquidity for 
Participants who submit up to approximately 5,000 TCV contracts 
which add liquidity in SPY.
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    The Exchange's proposal to amend the tier qualifications for Lead 
Market Maker or Market Maker Simple Order Rebates to Add Liquidity in 
SPY is equitable and not unfairly discriminatory. Phlx Lead Market 
Makers and Market Makers add value through continuous quoting \18\ and 
are subject to additional requirements and obligations \19\ that other 
market participants are not. Incentivizing Lead Market Makers and 
Market Makers to provide greater liquidity benefits all market 
participants through the quality of order interaction.
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    \18\ See Options 2, Section 5.
    \19\ See Options 2, Section 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.
Inter-Market Competition
    The proposal does not impose an undue burden on intermarket 
competition. The Exchange believes its proposal remains competitive 
with other options markets and will offer market participants with 
another choice of where to transact options. The Exchange notes that it 
operates in a highly competitive market in which market participants 
can readily favor competing venues if they deem fee levels at a 
particular venue to be excessive, or rebate opportunities available at 
other venues to be more favorable. In such an environment, the Exchange 
must continually adjust its

[[Page 14355]]

fees to remain competitive with other exchanges that have been exempted 
from compliance with the statutory standards applicable to exchanges. 
Because competitors are free to modify their own fees in response, and 
because market participants may readily adjust their order routing 
practices, the Exchange believes that the degree to which fee changes 
in this market may impose any burden on competition is extremely 
limited.
Intra-Market Competition
Fee for Removing Liquidity
    The Exchange's proposal to decrease the current $0.42 per contract 
Customer Fee for Removing Liquidity in SPY to $0.38 per contract for 
Simple Orders does not impose an undue burden on competition. Customers 
would continue to receive favorable pricing as compared to other market 
participants because Customer liquidity enhances liquidity on the 
Exchange for the benefit of all market participants. Specifically, 
Customer liquidity benefits all market participants by providing more 
trading opportunities which attracts market makers. An increase in the 
activity of these market participants (particularly in response to 
pricing) in turn facilitates tighter spreads which may cause an 
additional corresponding increase in order flow from other market 
participants.
Rebate for Adding Liquidity
    The Exchange's proposal to amend the current tier schedule to 
remove average daily volume as a tier qualifier for a Lead Market Maker 
or Market Maker Simple Order Rebate to Add Liquidity when adding 
liquidity in SPY and instead utilize a percentage of all cleared 
customer volume at The Options Clearing Corporation in Multiply Listed 
Equity Options and Exchange-Traded Products or ``TCV'' does not impose 
an undue burden on competition. The Exchange's proposal is intended to 
provide a measure for the amount of contracts that would be eligible to 
qualify a market participant submitting electronically executed Lead 
Market Maker and Market Maker Simple Order contracts per day in a month 
which add liquidity in SPY for a certain rebate. The greater the amount 
of contracts submitted by the member, the larger the Lead Market Maker 
or Market Maker Simple Order Rebate to Add Liquidity in SPY. The 
Exchange believes that measuring the contracts as a percentage of TCV 
is a fair and equitable method for calculating Customer volume executed 
on Phlx when adding liquidity in SPY. The Exchange would uniformly 
apply this measure to all eligible members to determine the 
corresponding rebate. Lead Market Makers and Market Makers will be paid 
per the highest tier achieved.
    The Exchange's proposal to amend the tier qualifications for Lead 
Market Maker or Market Maker Simple Order Rebates to Add Liquidity in 
SPY does not impose an undue burden on competition. Phlx Lead Market 
Makers and Market Makers add value through continuous quoting \20\ and 
are subject to additional requirements and obligations \21\ that other 
market participants are not. Incentivizing Lead Market Makers and 
Market Makers to provide greater liquidity benefits all market 
participants through the quality of order interaction.
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    \20\ See Options 2, Section 5.
    \21\ See Options 2, Section 4.
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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.\22\
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    \22\ 15 U.S.C. 78s(b)(3)(A)(ii).
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    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: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) 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.

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 email to rule-comments@sec.gov. Please include 
File Number SR-PHLX-2021-12 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-PHLX-2021-12. This file 
number should be included on the subject line if email 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 website (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 website 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 10:00 a.m. and 
3:00 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. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-PHLX-2021-12 and should be submitted on 
or before April 5, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\23\
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    \23\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-05240 Filed 3-12-21; 8:45 am]
BILLING CODE 8011-01-P