Document ID: SEC-2010-0297-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX PHLX, Inc.
Posted Date: 2010-02-26T05:00Z

[Federal Register: February 26, 2010 (Volume 75, Number 38)]
[Notices]               
[Page 9010-9012]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26fe10-136]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61558; File No. SR-Phlx-2010-16]

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

February 22, 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 January 28, 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 substantially 
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: (i) Amend its Monthly Cap on equity 
options transaction fees; (ii) amend the calculation of the Monthly 
Cap; and (iii) amend the fee schedule to reflect current appeal fees 
and make other technical modifications.
    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 February 1, 
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.

[[Page 9011]]

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 decrease the current 
Monthly Cap on equity options transactions from $900,000 to $750,000. 
The Monthly Cap is currently applicable to ROTs \3\ and specialists.\4\ 
The Exchange believes that by reducing the Monthly Cap, a greater 
number of members may benefit from the Monthly Cap and the Exchange 
will attract additional order flow.
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    \3\ A ROT is a regular member or a foreign currency options 
participant of the Exchange located on the trading floor who has 
received permission from the Exchange to trade in options for his 
own account.
    \4\ This monthly cap is not applicable to electronic trading in 
Standard and Poor's Depositary Receipts/SPDRs (``SPY''), PowerShares 
QQQ Trust (``QQQQ'')[reg]; Ishares Russell 2000 (``IWM'') and 
Citigroup Inc. (``C'').
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    Additionally, the Exchange proposes to amend the calculation of the 
Monthly Cap by aggregating the trading activity of separate ROTs and 
specialist member organizations if there is at least 75% common 
ownership between the member organizations as reflected on each member 
organizations' Form BD, Schedule A. The Exchange believes that this 
aggregation will create an additional incentive for members to transact 
more business on the Exchange.
    The Exchange also proposes to memorialize certain appeal fees on 
its Fee Schedule. Currently the Exchange assesses a forum fee of $100 
pursuant to Exchange Rule 60, Commentary (a).06.\5\ This forum fee is 
assessed when a member contests a citation imposed pursuant to Rule 60 
and the citation is upheld by the reviewing body. Additionally, the 
Exchange assesses a $250 fee on members seeking a review of an Options 
Exchange Official ruling pursuant to Exchange Rule 124.\6\ 
Specifically, a member or member organization seeking the Referee's 
review of a Floor Official ruling concerning the nullification or 
adjustment of a trade would be assessed a fee of $250 for each Floor 
Official ruling they seek to have reviewed if the Referee upholds the 
Floor Official decision. No fee would be assessed to the member or 
member organization seeking a review if the Floor Official decision is 
overturned or modified. These fees do not currently appear on the 
Exchange's Fee Schedule. The Exchange proposes to list these fees, 
which are currently in effect, on the Fee Schedule in order to provide 
additional notice to members of these fees, which exist in the Exchange 
Rules.
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    \5\ See Securities Exchange Act Release No. 61207 (December 18, 
2009), 74 FR 69185 (December 30, 2009) (SR-Phlx-2009-84).
    \6\ See Securities Exchange Act Release No. 53548 (March 24, 
2006), 71 FR 16389 (March 31, 2006) (SR-Phlx-2005-42).
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    The Exchange also proposes to make a technical modification to the 
Fee Schedule by moving the location of the Options Regulatory Fee on 
the Fee Schedule and creating a separate text box for that fee for 
purposes of clarity. The proposed changes to the Fee Schedule will be 
effective for transactions settling on or after February 1, 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 \7\ in general, and 
furthers the objectives of Section 6(b)(4) of the Act \8\ in 
particular, in that it is an equitable allocation of reasonable fees 
and other charges among Exchange members. The Exchange believes that 
members will benefit from the reduced Monthly Cap and the proposed 
amendment to the calculation of the monthly cap in that a greater 
number of members will be able to qualify for the Monthly Cap and this 
would decrease fees to members. Also, the addition of the appeal fees 
should provide additional notice to members of these fees.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 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)(ii) of the Act \9\ and paragraph (f)(2) of Rule 19b-4 \10\ 
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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    \9\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \10\ 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-2010-16 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-2010-16. 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

[[Page 9012]]

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 available publicly. All 
submissions should refer to File Number SR-Phlx-2010-16 and should be 
submitted on or before March 19, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-3947 Filed 2-25-10; 8:45 am]
BILLING CODE 8011-01-P