Document ID: SEC-2011-1639-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX PHLX LLC
Posted Date: 2011-10-24T04:00Z

[Federal Register Volume 76, Number 205 (Monday, October 24, 2011)]
[Notices]
[Pages 65767-65768]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-27378]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65586; File No. SR-Phlx-2011-135]

Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Relating to 
the Tether Monthly Service Fee

October 18, 2011.
    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 October 5, 2011, 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 eliminate the Tether Monthly Service Fee 
from the Fee Schedule. The Exchange also proposes to make other minor 
amendments to the Fee Schedule.
    While changes to the Fee Schedule pursuant to this proposal are 
effective upon filing, the Exchange has designated the elimination of 
the Tether Monthly Service Fee to be operative on November 1, 2011.
    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, on the Commission's Web site at 
http://www.sec.gov, 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposed rule change is to eliminate the Tether 
Monthly Service Fee. A tether is a hardwire connection to an existing 
Exchange communication network (local areas network) on the Exchange's 
options trading floor. It allows users on the options floor to connect 
their handheld devices to the existing Exchange communication network 
and thereby interface with member firm communication networks via a 
wireless network.
    The Exchange currently assesses Registered Options Traders \3\ and 
floor brokers on the options trading floor a Tether Monthly Service Fee 
of $150.\4\ The number of users of the tether service on the options 
trading floor has diminished significantly since the tethers were first 
put into place in 2001.\5\ While the Exchange will continue to offer 
its members the ability to use the tethers, it will no longer assess a 
fee as of November 1, 2011.
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    \3\ A Registered Options Trader (``ROT'') includes a SQT, a RSQT 
and a Non-SQT ROT, which by definition is neither a SQT nor a RSQT. 
A ROT is defined in Exchange Rule 1014(b) as 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. See Exchange Rule 1014(b)(i) and 
(ii).
    \4\ Specialists are not assessed this fee. The fee was initially 
assessed in 2001 and based on actual and estimated expenses incurred 
in installing and maintaining the tethered connections.
    \5\ See Securities Exchange Act Release No. 44963 (October 19, 
2001), 66 FR 54317 (October 19, 2011) (SR-Phlx-2001-84).
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    The Exchange also proposes an amendment to eliminate an unnecessary 
reference to the Market Access Provider Subsidy (``MAP''). The Exchange 
previously eliminated this subsidy from the Fee Schedule.\6\ The 
remaining reference to the MAP in Section I of the Fee Schedule, 
entitled ``Rebates and Fees for Adding and Removing Liquidity in Select 
Symbols'' is outdated. The Exchange also proposes to replace the word 
``charges'' in the Fee Schedule with the word ``fees'', in order to 
conform the verbiage in the Fee Schedule to maintain clarity.
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    \6\ See Securities Exchange Act Release No. 64539 (May 24, 
2011), 76 FR 31384 (May 31, 2011) (SR-Phlx-2011-68).
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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 \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 and other persons using its facilities.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that the proposed elimination of the Tether 
Monthly Service Fee is reasonable, equitable and not unfairly 
discriminatory because members will still have the ability to tether on 
the options trading floor, but will not be assessed a fee. In 2001, the 
Exchange installed tethers due to an increase in bandwidth demands and 
the use of applications by traders. All floor members will still have 
access to this service, however no member will be assessed a fee for 
this service.
    The Exchange believes that other proposed modifications to the Fee 
Schedule to eliminate outdated references in the Fee Schedule and amend 
certain verbiage are reasonable and equitable to clarify the Fee 
Schedule.

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

[[Page 65768]]

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-2011-135 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-2011-135. 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-2011-135 and should be 
submitted on or before November 14, 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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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-27378 Filed 10-21-11; 8:45 am]
BILLING CODE 8011-01-P