Document ID: SEC-2009-0444-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX PHLX, Inc.
Posted Date: 2009-04-02T04:00Z

[Federal Register: April 2, 2009 (Volume 74, Number 62)]
[Notices]               
[Page 15024-15025]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02ap09-96]                         

[[Page 15024]]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59641; File No. SR-Phlx-2009-26]

 
Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by NASDAQ OMX PHLX, Inc. Relating 
to Permit Fees

March 27, 2009.
    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 24, 2009, 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to: (i) Increase the Order Flow Provider 
Permit fee to $500 and eliminate the distinctions related to trading 
venues; (ii) increase the Other Permit Holder fee to $500; and (iii) 
eliminate the Excess Permit Holder fee. Additionally, the Exchange 
proposes to delete immaterial language in endnotes related to permit 
fees.
    While changes to the Exchange's fee schedule pursuant to this 
proposal are effective upon filing, the Exchange has designated this 
proposal to be implemented beginning April 1, 2009.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://www.nasdaqtrader.com/micro.aspx?id=PHLXRulefilings, 
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 parts 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 simplify the Order 
Flow Provider Permit fee \3\ by eliminating the distinctions related to 
trading venues, which distinctions are no longer necessary as the 
Exchange will no longer assess permit fees based on the number of 
trading venues. Additionally, the Exchange proposes to increase both 
the Order Flow Provider Permit fee and the Other Permit Holders fee to 
$500. The Exchange believes that it can continue to attract business 
even with a modest increase, which should raise revenue.
---------------------------------------------------------------------------

    \3\ This fee applies to a permit holder who does not have 
physical access to the Exchange's trading floor, is not registered 
as a Floor Broker, Specialist or ROT (on any trading floor) or Off-
Floor Trader, and whose member organizations submits orders to the 
Exchange. See Exchange Rule 620.
---------------------------------------------------------------------------

    Currently, the Exchange assesses members who use an Order Flow 
Provider Permit fee to submit orders to the foreign currency options 
trading floor or options trading floor a fee of $200. A member who uses 
the Order Flow Provider Permit fee [sic] to submit orders to more than 
one trading venue is assessed a fee of $300. The Exchange proposes to 
increase the Order Flow Provider Permit fee to $500 for any order 
submitted regardless of the number of trading venues.
    The Exchange also proposes to increase the Other Permit Holder 
fee.\4\ The Other Permit Holder category was adopted for billing 
purposes to address the limited situation where permit holders did not 
fall under one of the existing permit fee categories. The Other Permit 
Holder Fee is currently $200. The Exchange proposes to similarly 
increase this fee to $500 to align this fee with the proposed increase 
to the Order Flow Permit fee.
---------------------------------------------------------------------------

    \4\ Status as an Other Permit Holder requires that a permit 
holder or the member organization for which they solely qualify has 
no transaction activity for the applicable monthly billing period. 
Should a permit holder actively transact business during a 
particular month, the highest applicable monthly permit fee will 
apply to such permit holder and the member organization for that 
monthly period. The ``other'' status only applies to permit holders 
who solely qualify their member organization, or in other words 
there is just one permit holder in that member organization. If 
there is more than one permit holder in a member organization and 
that permit holder does not fit within any of the existing permit 
fee categories, then this ``other'' category does not apply. Such 
permit holder or the member organization they solely qualify for 
must apply for such ``other'' status in writing to the Membership 
Department.
---------------------------------------------------------------------------

    The Exchange proposes to eliminate the Excess Permit Holders fee 
\5\ of $200, as the Exchange believes that this category of Excess 
Permit Holders is no longer necessary. The Excess Permit Holder 
category was intended to cover permit holders who did not fall within 
an existing category to ensure that each permit is subject to a permit 
fee. This separate category is no longer necessary as all members are 
currently captured by either the Order Flow Permit Fee or the Floor 
Broker, Specialist, ROT, Off-Floor Trader, or Market Maker Authorized 
Traders Permit Fee or Other Permit Fee categories.
---------------------------------------------------------------------------

    \5\ Permit holders are designated as ``excess'' permit holders 
in cases where the permit holders in the same organization, other 
than the permit holder who qualifies the member organization, are 
either (1) not Floor Brokers, Specialists or ROTs (on any trading 
floor) or Off-Floor Traders; or (2) not associated with a member 
organization that meets the definition of an order flow provider. 
The highest applicable permit fee will be assessed each month. 
Therefore, in the same month, if one was a floor broker and then 
became a clerk (and therefore, an ``excess'' permit holder, if one 
kept his or her permit) for the same member organization, such 
person would be charged the higher of the possible applicable fees.
---------------------------------------------------------------------------

    The Exchange proposes to delete the following immaterial language 
from both endnotes 45a and 45b ``[t]hese policies will be effective as 
of February 2, 2004.'' The Exchange believes that this statement, as to 
the effectiveness of the policies related to those endnotes, is 
irrelevant.
2. Statutory Basis
    The Exchange believes that its proposal to amend its schedule of 
fees 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 Exchange members. The Exchange believes that 
the above proposals are equitable in that they propose to assess the 
same fee on members who pay either the Order Flow Provider Permit Fee 
or the Other Permit Holders Fee. Additionally, the elimination of the 
Excess Permit Holder fees should not impact members. The Exchange 
believes that all members should be captured under a remaining permit 
fee category.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

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

[[Page 15025]]

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\ and paragraph (f)(2) of Rule 19b-4 \9\ 
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.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \9\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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-2009-26 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-2009-26. 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 inspection and 
copying 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 will also be available for 
inspection and copying at the principal office of the self-regulatory 
organization. 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-2009-26 and should be submitted on or before April 23, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-7409 Filed 4-1-09; 8:45 am]

BILLING CODE 8010-01-P