Document ID: SEC-2017-1847-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Nasdaq PHLX LLC
Posted Date: 2017-11-13T05:00Z

[Federal Register Volume 82, Number 217 (Monday, November 13, 2017)]
[Notices]
[Pages 52340-52342]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-24439]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82019; File No. SR-Phlx-2017-91]

Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend Pricing 
Schedule Section II, Entitled Multiply Listed Options Fees

November 6, 2017.
    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 November 1, 2017, Nasdaq PHLX LLC (``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. The Commission is publishing 
this notice to solicit comments on the proposed rule change from 
interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the Pricing Schedule, Section II, 
entitled ``Multiply Listed Options Fees,'' \3\ as further discussed 
below.
---------------------------------------------------------------------------

    \3\ This includes options overlying equities, ETFs, ETNs and 
indexes which are multiply listed.
---------------------------------------------------------------------------

    The text of the proposed rule change is available on the Exchange's 
Web site at http://nasdaqphlx.cchwallstreet.com/, 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

[[Page 52341]]

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 amend Section II of 
the Exchange's Pricing Schedule to increase the assessment for select 
Firm \4\ electronic simple orders.
---------------------------------------------------------------------------

    \4\ The term ``Firm'' applies to any transaction that is 
identified by a member or member organization for clearing in the 
Firm range at OCC.
---------------------------------------------------------------------------

    As set forth in Section II of the Pricing Schedule, the Exchange 
currently charges a Penny Pilot Options Transaction Charge for 
electronic simple orders that is $0.48 per contract for 
Professional,\5\ Broker-Dealer \6\ and Firm orders, $0.22 per contract 
for Specialist \7\ and Market Maker \8\ orders, and $0.00 for Customer 
\9\ orders. In addition, the Exchange charges a reduced Penny Pilot 
Options Transaction Charge for Firm electronic simple orders in AAPL, 
BAC, EEM, FB, FXI, IWM, QQQ, TWTR, VXX and XLF (hereinafter, ``Select 
Symbols'') that is $0.37 per contract (reduced from $0.48 per 
contract).\10\ The reduced fee for Firm electronic simple orders in 
Select Symbols (such reduced fee, the ``Select Firm Fee'') is to 
incentivize Firms to transact more volume in Select Symbols, thereby 
attracting more order flow to the Exchange.
---------------------------------------------------------------------------

    \5\ The term ``Professional'' applies to transactions for the 
accounts of Professionals, as defined in Exchange Rule 1000(b)(14) 
means 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). See Pricing Schedule, Preface.
    \6\ The term ``Broker-Dealer'' applies to any transaction which 
is not subject to any of the other transaction fees applicable 
within a particular category. See Pricing Schedule, Preface.
    \7\ The term ``Specialist'' applies to transactions for the 
account of a Specialist (as defined in Exchange Rule 1020(a)). A 
Specialist is an Exchange member who is registered as an options 
specialist pursuant to Rule 1020(a). An options Specialist includes 
a Remote Specialist which is defined as an options specialist in one 
or more classes that does not have a physical presence on an 
Exchange floor and is approved by the Exchange pursuant to Rule 501. 
See Pricing Schedule, Preface.
    \8\ For purposes of the Pricing Schedule, the term ``Market 
Maker'' will be utilized to describe the fees and rebates applicable 
to Registered Options Traders (as defined in Exchange Rule 1014(b)), 
Streaming Quote Traders (as defined in Exchange Rule 1014(b)(ii)(A)) 
and Remote Streaming Quote Traders (as defined in Exchange Rule 
1014(b)(ii)(B)). See Pricing Schedule, Preface.
    \9\ The term ``Customer'' applies to any transaction that is 
identified by a member or member organization for clearing in the 
Customer range at The Options Clearing Corporation (``OCC'') which 
is not for the account of a broker or dealer or for the account of a 
``Professional'' (as that term is defined in Rule 1000(b)(14)). See 
Pricing Schedule, Preface.
    \10\ See note 1 in Section II of the Pricing Schedule. Select 
symbols represent high volume Penny Pilot options listed on the 
Exchange.
---------------------------------------------------------------------------

    The Exchange now proposes to increase the $0.37 per contract Select 
Firm Fee to raise revenue for the Exchange and help defray costs. As 
proposed, note 1 in Section II of the Pricing Schedule will read, 
``Firm electronic simple orders in AAPL, BAC, EEM, FB, FXI, IWM, QQQ, 
TWTR, VXX and XLF will be assessed $0.45 per contract.''

2. Statutory Basis

    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\11\ in general, and furthers the objectives of 
Sections 6(b)(4) and 6(b)(5) of the Act,\12\ 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, and is not designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange believes its proposal to increase the Select Firm Fee 
from $0.37 to $0.45 per contract is reasonable because the proposed 
increase will help defray costs, and remains lower than the $0.48 per 
contract Penny Pilot Options Transaction Charge assessed to all other 
Firm electronic simple orders.\13\ Furthermore, the Exchange notes that 
the proposed fee remains competitive with the fees of another options 
market.\14\ Accordingly, the Exchange believes that the proposed $0.45 
per contract fee for Firm electronic simple orders in Select Symbols, 
which represent high volume Penny Pilot options listed on the Exchange, 
will continue to be competitive and attract order flow to the Exchange, 
to the benefit of all market participants.
---------------------------------------------------------------------------

    \13\ See Pricing Schedule, Section II.
    \14\ See, e.g., MIAX Options Fee Schedule at: https://www.miaxoptions.com/sites/default/files/fee_schedule-files/MIAX_Options_Fee_Schedule_10112017.pdf.
---------------------------------------------------------------------------

    In addition, the Exchange believes the proposed $0.45 per contract 
Select Firm Fee is equitable and not unfairly discriminatory because 
the Exchange will apply the same fee to all similarly situated members. 
For the reasons discussed above, the proposed fee provides an incentive 
for Firms to transact order flow on the Exchange, which order flow 
brings increased liquidity to the Exchange for the benefit of all 
Exchange participants. To the extent the purpose of the proposed Select 
Firm Fee is achieved, all market participants should benefit from the 
improved market liquidity.

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. As discussed above, the 
Exchange believes that the proposed Select Firm Fee remains competitive 
and will continue to attract order flow to the Exchange. The Exchange 
notes that it operates in a highly competitive market in which market 
participants can readily favor competing venues if they deem fee levels 
at a particular venue to be excessive, or rebate opportunities 
available at other venues to be more favorable. In such an environment, 
the Exchange must continually adjust its fees to remain competitive 
with other exchanges. For the reasons described above, the Exchange 
believes that the proposed fee changes reflect this competitive 
environment.

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.\15\
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

    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: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) 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

[[Page 52342]]

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 [email protected]. Please include 
File Number SR-Phlx-2017-91 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-Phlx-2017-91. 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 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. Persons submitting 
comments are cautioned that we do not redact or edit personal 
identifying information from comment submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File Number SR-Phlx-2017-91 and should be 
submitted on or before December 4, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-24439 Filed 11-9-17; 8:45 am]
BILLING CODE 8011-01-P