Document ID: SEC-2012-0783-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX PHLX LLC
Posted Date: 2012-05-17T04:00Z

[Federal Register Volume 77, Number 96 (Thursday, May 17, 2012)]
[Notices]
[Pages 29440-29441]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-11915]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66967; File No. SR-Phlx-2012-60]

Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Establish 
the PHLX Depth of Market Data Product

May 11, 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 May 1, 2012, NASDAQ OMX 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 Substance 
of the Proposed Rule Change

    The Exchange proposes to establish a direct market data product, 
PHLX Depth of Market. PHLX Depth of Market is a data feed that will 
include full depth of quotes and orders, imbalance information and last 
sale data for options listed on PHLX.
    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 aspects of such 
statements.

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

1. Purpose
    The purpose of the proposed rule change is to establish the PHLX 
Depth of Market data product. PHLX Depth of Market is a data product 
that provides: (i) Order and quotation information for individual 
quotes and orders on the PHLX book; (ii) last sale information for 
trades executed on PHLX; and (iii) an Imbalance Message, as described 
below.
    The Imbalance Message includes the symbol, side of the market, size 
of matched contracts, size of the imbalance, and price of the affected 
series.\3\ The Imbalance Message should enable PHLX Depth of Market 
subscribers to participate effectively in the PHLX Opening Process \4\ 
by providing them with information during the Opening Process when 
there is an opening imbalance.\5\
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    \3\ See Exchange Rule 1017(l)(vi)(A).
    \4\ For a description of the Opening Process, see Exchange Rule 
1017(l).
    \5\ An opening ``imbalance'' occurs where there is unexecutable 
trading interest at a certain price. See Exchange Rule 
1017(l)(ii)(A).
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    PHLX Depth of Market is the equivalent of, and is based on, the 
NASDAQ ITCH to Trade Options or ``ITTO'' data feed that NASDAQ offers 
under NASDAQ Options Market (``NOM'') Rules, Chapter VI, Section 
1(a)(3)(A).\6\ As with ITTO, subscribers would use PHLX Depth of Market 
to ``build'' their view of the PHLX book by adding individual orders 
that appear on the feed, and subtracting individual orders that are 
executed.
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    \6\ See Securities Exchange Act Release No. 63983 (February 25, 
2011), 76 FR 12178 (March 4, 2011) (SR-NASDAQ-2011-032).
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    The Exchange will establish monthly fees for the PHLX Depth of 
Market data product by way of a separate proposed rule change, which 
the Exchange will submit after the PHLX Depth of Market product is 
established.
    PHLX Depth of Market provides data that should enhance the ability 
to analyze market conditions, and to create and test trading models and 
analytical strategies. The Exchange believes that PHLX Depth of Market 
is a valuable tool that can be used to gain comprehensive insight into 
the trading activity in a particular option series.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\7\ in general and with 
Section 6(b)(5) of the Act,\8\ in that it is designed to promote just 
and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in regulating, clearing, settling, 
processing information with respect to, and facilitating transactions 
in securities, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system, and, in general, to 
protect investors and the public interest, by establishing a market 
data product that enhances subscribers' ability to make decisions on 
trading strategy, and by providing data to facilitate such decisions in 
a timely manner.
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    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(5).
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    The Exchange represents that it will make the PHLX Depth of Market 
data product equally available to any market participant that wishes to 
subscribe to it.

[[Page 29441]]

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

    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: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days after the date of the filing, or such 
shorter time as the Commission may designate, it has become effective 
pursuant to 19(b)(3)(A) of the Act \9\ and Rule 19b-4(f)(6) \10\ 
thereunder.
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file 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 Commission notes that the Exchange has satisfied this 
requirement.
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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 public interest, for the protection of investors, or 
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 No. SR-Phlx-2012-60 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 No. SR-Phlx-2012-60. 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 
10:00 a.m. and 3:00 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 No. SR-Phlx-2012-60 and should be 
submitted on or before June 7, 2012.

    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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-11915 Filed 5-16-12; 8:45 am]
BILLING CODE 8011-01-P