Document ID: SEC-2012-0732-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX PHLX LLC
Posted Date: 2012-05-10T04:00Z

[Federal Register Volume 77, Number 91 (Thursday, May 10, 2012)]
[Notices]
[Pages 27526-27527]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-11257]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66925; File No. SR-Phlx-2012-53]

Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend the 
Exchange's Pricing Schedule

May 4, 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 April 25, 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 increase the Remote Specialist Fee from 
$50 per option allocation per month to $200 per option allocation per 
month. While fee changes pursuant to this proposal are effective upon 
filing, the Exchange has designated these changes to be operative on 
May 1, 2012.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://nasdaqtrader.com/micro.aspx?id=PHLXfilings, 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 amend the Exchange's 
Pricing Schedule at Section VI. C (Membership Fees) to increase the 
Exchange's Remote Specialist Fee to better account for and recoup costs 
associated with maintaining a remote specialist post on the Exchange's 
trading floor.
    Exchange Rule 501, Specialist Appointment, and Exchange Rule 1020, 
Registration and Functions of Options Specialists, allow qualified 
Exchange members to act as off-floor specialists in one or more options 
classes (``Remote Specialist'').\3\ The Exchange staffs and administers 
a physical location or post on the trading floor to provide on-floor 
market participants with a physical location to trade in options 
classes allocated to a Remote Specialist. This physical location on the 
Exchange's trading floor requires Exchange operations and regulatory 
staff to be present at this post. The Exchange incurs operational and 
regulatory costs to maintain this post and defrays such

[[Page 27527]]

costs by assessing a Remote Specialist Fee.
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    \3\ See Securities Exchange Act Release No. 64591 (June 8, 
2011), 76 FR 33383 (June 2, 2011) (SR-Phlx-2011-79). A Remote 
Specialist is an options specialist in one or more classes that may 
not have a physical presence on an Exchange floor and is approved by 
the Exchange pursuant to Rule 501.
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    The Exchange currently assesses Remote Specialists a monthly fee of 
$50 per option allocation.\4\ The Exchange caps the fee at $4,500 per 
month. The Exchange is now proposing to increase the Remote Specialist 
Fee monthly from $50 per option allocation to $200 per option 
allocation. The $4,500 cap would remain unchanged. The purpose of the 
increase is to enable the Exchange to better account for and defray the 
operational and regulatory costs of maintaining this post.
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    \4\ See Securities Exchange Act Release No. 64705 (June 20, 
2011), 76 FR 37163 (June 24, 2011) (SR-Phlx-2011-83). Pursuant to 
Rule 507, Application for Approval as an SQT or RSQT and Assignment 
in Options, a Remote Specialist must meet certain requirements to be 
approved as an RSQT. Rule 507(b)(i) describes the process for the 
assignment of options. See Exchange Rule 507. An RSQT is defined in 
Exchange Rule 1014(b)(ii)(B) as an ROT that is a member or member 
organization with no physical trading floor presence who has 
received permission from the Exchange to generate and submit option 
quotations electronically in options to which such RSQT has been 
assigned. An RSQT may only submit such quotations electronically 
from off the floor of the Exchange.
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2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule 
is consistent with Section 6(b) of the Act \5\ in general, and furthers 
the objectives of Section 6(b)(4) of the Act \6\ in particular, in that 
it is an equitable allocation of reasonable fees and other charges 
among Exchange members and other persons using its facilities.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that the proposed increase in the Remote 
Specialist Fee is reasonable because it will enhance the Exchange's 
ability to recoup costs that are incurred by the Exchange for 
maintaining a defined physical location or post on the Exchange's 
trading floor to facilitate interaction amongst market participants 
located on the Exchange's physical trading floor. The Exchange also 
believes the proposal is reasonable because the Exchange proposes to 
maintain the existing cap on the Remote Specialist Fee at $4,500 per 
month.
    The Exchange believes that the proposed Remote Specialist Fee is 
equitable because it would be uniformly applied to all Remote 
Specialists.

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.\7\ 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.
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    \7\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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 email to rule-comments@sec.gov. Please include 
File No. SR-Phlx-2012-53 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-2012-53. 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-2012-53 and should be 
submitted on or before May 31, 2012.
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    \8\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-11257 Filed 5-9-12; 8:45 am]
BILLING CODE 8011-01-P