Document ID: SEC-2012-0214-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX PHLX LLC
Posted Date: 2012-02-07T05:00Z

[Federal Register Volume 77, Number 25 (Tuesday, February 7, 2012)]
[Notices]
[Pages 6162-6164]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-2641]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66284; File No. SR-Phlx-2012-04]

Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Offer a 
New Product, TradeInfo PHLX, and Amend the Fee Schedule to Add a 
Related Subscription Fee

February 1, 2012.
    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 January 26, 2012, NASDAQ OMX PHLX LLC (``Exchange'' or 
``PHLX'') filed with the Securities and Exchange Commission (the 
``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 offer a new product, TradeInfo PHLX, to 
amend the fee schedule to add a related subscription fee.
    The text of the proposed rule change is available from the 
Exchange's Web site at http://nasdaqomxphlx.cchwallstreet.com/NASDAQOMXPHLX/Filings/, at the Exchange's principal office, 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.

[[Page 6163]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange is proposing to offer a new product, TradeInfo PHLX, 
and to amend its fee schedule to assess a fee of $95 per user, per 
month for subscription to the new product.\3\ Through a secure Web 
connection, TradeInfo PHLX will allow a subscribing member to scan for 
their orders submitted to PHLX. A subscribing member will be able to 
scan for all orders in a particular security or all orders of a 
particular type, regardless of their status (open, canceled, executed, 
etc.). A subscribing member will also be able to cancel open orders at 
the order, port or firm mnemonic level. For example, after scanning for 
open orders, a subscribing member is able to select an open order and 
cancel the order. TradeInfo PHLX will also allow a subscribing member 
to scan other order statuses, such as executed, cancelled, broken, 
rejected and suspended orders. A subscribing member will be able to 
generate reports of execution, order or cancel information, which can 
be exported into a spreadsheet for review. TradeInfo PHLX will also 
permit a subscribing member to manage their order flow and mitigate 
risk by giving them the ability to view their orders and executions, as 
well as the ability to perform cancels at the port level. Last, 
TradeInfo PHLX will allow a subscribing member to download records of 
their orders and executions for record-keeping purposes. The Exchange 
currently offers PSX TradeInfo data to subscribing members for a fee of 
$95 per user, per month for member's trading activity on the PSX 
equities market.\4\ Under the proposed rule change, TradeInfo PHLX will 
be available to PHLX members participating on the PHLX options market.
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    \3\ The Exchange is creating new Chapter XII ``PHLX Trading 
Application Services'' of the NASDAQ OMX PHLX LLC Fee Schedule under 
which it will place the proposed new fee.
    \4\ See NASDAQ OMX PHLX LLC Fee Schedule (January 5, 2012), 
Chapter VIII NASDAQ OMX PSX FEES, TradeInfo PSX, p. 23.
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    TradeInfo PHLX is similar to comparable products offered by the The 
Nasdaq Stock Market (``Nasdaq'') and NASDAQ OMX BX (``BX'').\5\ PHLX is 
proposing to offer the same functionality to its options participants 
in regard to their PHLX trade activity for the same fee assessed for 
the similar products offered by Nasdaq and BX.\6\
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    \5\ Securities Exchange Act Release No. 55135 (January 19, 
2007), 72 FR 3893 (January 26, 2007) (SR-NASDAQ-2006-062). See also 
Securities Exchange Act Release No. 60826 (October 14, 2009), 74 FR 
54605 (October 22, 2009) (SR-BX-2009-062).
    \6\ NASDAQ Rule 7015(f) and Chapter XV, Section 3(a) of the 
Nasdaq Options Rules each assess subscribing members a fee of $95 
per user, per month for TradeInfo if the subscribing member does not 
have a subscription to the Nasdaq Workstation (the Nasdaq 
Workstation includes access to TradeInfo). BX Rule 7015 assesses 
subscribing members a fee of $95 per user, per month for TradeInfo 
BX.
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2. Statutory Basis
    The Exchange believes that the proposed fee is consistent with the 
provisions of Section 6 of the Act,\7\ in general, and with Section 
6(b)(4) of the Act,\8\ 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 or system 
which the Exchange operates or controls. The Exchange believes that the 
fee is reasonable since the functionally identical product is currently 
offered for the same subscription fee to PSX participants, as well as 
Nasdaq and BX members. The Exchange believes that the fee is equitably 
allocated since subscription to the product is voluntary and the fee is 
assessed only upon members that elect to subscribe to the product. The 
fee is based on the number of subscriptions subscribed, so all 
similarly-situated member firms would be assessed the same amount.
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    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes the proposed rule change is consistent with 
Section 6(b)(5) of the Act,\9\ which requires that the rules of an 
exchange be designed to prevent fraudulent and manipulative acts and 
practices, promote just and equitable principles of trade, foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general, protect investors and the public interest. The 
Exchange believes the proposed rule change is consistent with these 
requirements because the TradeInfo PHLX offers a useful analytical tool 
with which PHLX members may access information concerning their order 
and trade activity occurring on PHLX, thus allowing such participants 
to make informed decisions concerning such activity. The Exchange notes 
that Nasdaq and BX offer the same type of product to their members. 
Affording PHLX participants access to the same functionality promotes 
the goal of perfecting the mechanism of a free and open market by 
providing a subscriber clearer picture of its market activity and 
providing it the ability to quickly cancel orders should the 
participant determine it necessary to do so.
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    \9\ 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 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act, as amended.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not significantly 
affect the protection of investors or the public interest, does not 
impose any significant burden on competition, and, by its terms, does 
not become operative for 30 days from the date on which it was filed, 
or such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-
4(f)(6) thereunder.\11\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the Exchange to give the Commission written notice of the 
Exchange's 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 satisfied the five-day prefiling requirement.
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    The Exchange has requested that the Commission waive the 30-day 
operative delay. The Commission believes that waiver of the operative 
delay is consistent with the protection of investors and the public 
interest because the proposal will provide a tool for Exchange members 
to assist them in the management of their Exchange orders and is 
substantially similar to those of other exchanges.\12\ Therefore, the 
Commission designates the proposal operative upon filing.\13\
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    \12\ See supra notes 4 and 5.
    \13\ For purposes only of waiving the 30-day operative delay, 
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 the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the

[[Page 6164]]

public interest, for the protection of investors, or otherwise in 
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 email to rule-comments@sec.gov. Please include 
File Number SR-Phlx-2012-04 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-2012-04. 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 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 
10a.m. and 3 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; 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-2012-04 and should be 
submitted on or before February 28, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-2641 Filed 2-6-12; 8:45 am]
BILLING CODE 8011-01-P