Document ID: SEC-2010-0655-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX PHLX, Inc.
Posted Date: 2010-05-03T04:00Z

[Federal Register: May 3, 2010 (Volume 75, Number 84)]
[Notices]               
[Page 23313-23314]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03my10-97]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61984; File No. SR-Phlx-2010-60]

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

April 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 April 16, 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, II, and III, below, which 
Items have been prepared by the Exchange. Phlx has designated this 
proposal as one establishing or changing a due, fee, or other charge 
applicable only to a member under Section 19(b)(3)(A)(ii) of the 
Act,\3\ and Rule 19b-4(f)(2) thereunder,\4\ which renders the proposal 
effective upon filing with the Commission. The Commission is publishing 
this notice to solicit comments on the proposed rule change from 
interested persons.
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    \1\ 5 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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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 the Exchange's Fee Schedule for 
Sector Index Options by assessing a $.20 per contract transaction fee 
for options overlying the NASDAQ Internet Index (``QNET''). The 
Exchange also proposes making other technical clarifications.
    While changes to the Exchange's Fee Schedule pursuant to this 
proposal are effective upon filing, the Exchange has designated this 
proposal to be operative for trades settling on or after May 3, 2010.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://nasdaqtrader.com/micro.aspx?id=PHLXfilings, on the 
Commission's Web site at http://www.sec.gov, 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
    The Exchange proposes to add additional transaction fees to 
Category III of its Fee Schedule, titled Sector Index Options. The 
Exchange proposes to assess a $.20 per contract transaction fee for 
options overlying QNET for the following market participants: 
Customers, registered options traders (on-floor), specialists, 
professionals,\5\ firms and broker-dealers. The Exchange is proposing 
to assess the $.20 per contract fee from trade date April 30, 2010 
through trade date December 30, 2010. Thereafter, the Exchange proposes 
to assess the options transaction charges for sector index options as 
designated by category of market participant on the Fee Schedule, 
beginning on trade date December 31, 2010. In other words, the Exchange 
is proposing to eliminate the $.20 per contract transaction promotional 
pricing after December 30, 2010 and instead assess members the 
applicable sector index options transaction charges, by market 
participant, on December 31, 2010. For example, for transactions in 
QNET sector index options, a customer would no longer be assessed the 
$.20 per contract on trade date December 31, 2010, but instead would be 
assessed the option transaction charge, which is currently $.44 per 
contract.
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    \5\ The Exchange defines a ``professional'' as any person or 
entity that (i) is not a broker or dealer in securities, and (ii) 
places more than 390 orders in listed options per day on average 
during a calendar month for its own beneficial account(s).
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    The Exchange proposes to assess a fixed rate across all market 
participants for a specified period of time to incentivize members to 
trade QNET.
    The Exchange also proposes removing certain text from the Fee 
Schedule that was the result of an inadvertent error. The Exchange is 
proposing to delete the text, ``Subject to certain thresholds and per 
trade caps'' from Categories III and IV of the Fee Schedule as related 
to Registered Options Traders (on-floor) and Specialists in sector 
index options fees and U.S. dollar-settled foreign currency option 
fees. The Exchange indicated in a prior proposed rule change that the 
Firm Related Equity Option and Index Option Cap would no longer be 
applicable to sector index options \6\ and U.S. dollar-settled foreign 
currency options \7\ and the volume threshold.\8\
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    \6\ See Securities Exchange Act Release No. 59545 (March 9, 
2009), 74 FR 11158 (March 16, 2009) (SR-Phlx-2009-20).
    \7\ See Securities Exchange Act Release Nos. [sic] 59243 
(January 13, 2009), 74 FR 4272 (January 23, 2009) (SR-Phlx-2008-86).
    \8\ See Securities Exchange Act Release No. 61337 (January 12, 
2010), 75 FR 2905 (January 19, 2010) (SR-Phlx-2009-104).
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    While changes to the Exchange's Fee Schedule pursuant to this 
proposal are effective upon filing, the Exchange has designated this 
proposal to be operative for trades settling on or after May 3, 2010.
2. Statutory Basis
    The Exchange believes that its proposal to amend its schedule of 
fees is consistent with Section 6(b) of the Act \9\ in general, and 
furthers the objectives of Section 6(b)(4) of the Act \10\ in 
particular, in that it is an equitable allocation of reasonable fees 
and other charges among Exchange members. The Exchange believes that 
the proposed $.20 per contract sector index option fees for QNET is 
equitable because all market participants would be assessed the same 
fee. The Exchange further believes that offering the $.20 per contract 
fee for a specified promotional period and thereafter assessing the 
standard sector index option transaction fees is also equitable because 
it is intended to encourage trading in QNET. In addition, the removal 
of extraneous language in the Fee Schedule should provide clarity to 
members concerning fees.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(4).

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[[Page 23314]]

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)(ii) of the Act \11\ and paragraph (f)(2) of Rule 19b-4 \12\ 
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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    \11\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \12\ 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-2010-60 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-2010-60. 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 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 
available publicly. All submissions should refer to File Number SR-
Phlx-2010-60 and should be submitted on or before May 24, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-10211 Filed 4-30-10; 8:45 am]
BILLING CODE 8011-01-P