Document ID: SEC-2010-1946-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX PHLX LLC
Posted Date: 2010-12-16T05:00Z

[Federal Register Volume 75, Number 241 (Thursday, December 16, 2010)]
[Notices]
[Pages 78797-78798]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-31630]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63522; File No. SR-Phlx-2010-175]

Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by NASDAQ OMX PHLX LLC To Change 
Implementation Date for Direct Access Fees

December 10, 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 December 9, 2010, NASDAQ OMX PHLX LLC (``Phlx'' or the ``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 self-regulatory organization. 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 a rule change to assess ``direct access'' 
fees on customers receiving Exchange data within the Exchange's co-
location facility beginning on January 1, 2011, rather than December 1, 
2010. Direct access fees applicable to such customers were Noticed 
[sic] in SR-PHLX-2010-170,\3\ immediately effective as of the filing on 
November 24, 2010, with an implementation date of December 1, 2010. In 
order to assure complete and clear prior notification to all affected 
customers, the Exchange is changing the implementation date of the fee 
schedule change to January 1, 2011.
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    \3\ Securities Exchange Act Release No. 63443 (December 6, 2010) 
(SR-Phlx-2010-170).
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    This change does not require a change in the language of the rule 
itself.

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
    In SR-PHLX-2010-170,\4\ the Exchange amended its fee schedule to 
correct an anomaly that effectively exempted certain customers residing 
within the Exchange's co-location facility from paying a monthly fee 
for direct access to Exchange data, while customers that receive data 
from an extranet and reside outside the co-location facility are 
assessed the fee. The inequity was a result of the definition of 
``direct access'' in the fee schedule, which did not by its terms 
clearly apply to data feeds provided to customers through distributors 
located within the co-located facility. That rule filing expanded the 
definition of ``direct access'' and operated to assess the same direct 
access fee on all firms that have access to the Exchange's raw data 
feeds, whether co-located or not.
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    \4\ Id.
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    The Notice of Filing and Immediate Effectiveness for this fee 
contained an implementation date of December 1, 2010. The effort to 
identify and notify all customers potentially affected by this rule 
change, however, has proven more time-consuming than expected. To 
assure that all customers that will be assessed the direct access fee 
have adequate prior notification, the Exchange is delaying 
implementation of the fee until January 1, 2011. None of the co-located 
customers that would have been newly subject to the direct access fee 
during December 2010 as a result of the fee amendment in SR-PHLX-2010-
170 will be charged this fee during December 2010.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\5\ in general, and with 
Sections 6(b)(5) of the Act,\6\ in particular. The proposal is designed 
to prevent fraudulent and manipulative acts and practices, 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. The filing ensures clear and 
complete prior notification to customers affected by a fee change that 
permits transparent, uniform fees for direct access to Exchange data 
for all customers, whether co-located or not.
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    \5\ 15 U.S.C. 78f.
    \6\ 15 U.S.C. 78f(b)(5).
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    In addition, 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)(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 [sic] Exchange operates or controls. The 
Exchange notes that delayed implementation of the amendment will best 
serve the interests of customers affected by the fee change.
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    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(4).

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[[Page 78798]]

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\ 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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    \9\ 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 e-mail to rule-comments@sec.gov. Please include 
File Number SR-Phlx-2010-175 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-2010-175. 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 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-2010-175 and should be 
submitted on or before January 6, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-31630 Filed 12-15-10; 8:45 am]
BILLING CODE 8011-01-P