Document ID: SEC-2013-0869-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX PHLX LLC
Posted Date: 2013-05-09T04:00Z

[Federal Register Volume 78, Number 90 (Thursday, May 9, 2013)]
[Notices]
[Pages 27267-27269]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-11001]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69509; File No. SR-Phlx-2013-44]

Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend 
Remote Streaming Quote Trader Fees and Reference a Remote Streaming 
Quote Trader Organization

May 3, 2013.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given 
that on April 29, 2013, NASDAQ OMX 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.
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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 amend the Exchange's Pricing Schedule to 
update the Preface section of the Pricing Schedule and Section VI, Part 
C to update references to Remote Streaming Quote Traders or RSQTs.
    The text of the proposed rule change is available on the Exchange's 
Web site

[[Page 27268]]

at http://nasdaqomxphlx.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 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 Exchange recently amended various Exchange Rules to establish 
that member organizations may qualify to be Remote Streaming Quote 
Traders Organizations (``RSQTOs'') with as many as three affiliated 
RSQTs.\3\ RSQTs are, along with Specialists,\4\ one of several types of 
Registered Option Traders (``ROTs'') \5\ on the Exchange. SR-Phlx-2013-
03 amended Rules 507 and 1014 to define an RSQTO, which may also be 
referred to as Remote Market Maker Organizations (``RMOs'').\6\ An 
RSQTO is a member organization in good standing that satisfies the 
RSQTO readiness requirements in Rule 507(a). Amended Rule 507(a) 
provides that ``. . . [a]s many as three RSQTs at any time may be 
identified by and affiliated with an RSQTO. Each of the affiliated 
RSQTs must be qualified as an ROT and must be in good standing.'' \7\
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    \3\ An RSQT is defined in Exchange Rule 1014(b)(ii)(B) as an 
Registered Options Trader that is a member affiliated with an RSQTO 
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. See 
Securities Exchange Act Release No. 68689 (January 18, 2013), 78 FR 
5518 (January 25, 2013) (SR-Phlx-2013-03) (a rule change which 
amended Phlx Rules 507 and 1014 to enable RSQTOs to affiliate with 
up to three RSQTs).
    \4\ A Specialist is an Exchange member who is registered as an 
options specialist pursuant to Rule 1020(a).
    \5\ A ROT includes a Streaming Quote Trader (``SQT''), a RSQT 
and a Non-SQT, which by definition is neither a SQT nor a RSQT. A 
ROT is defined in Exchange Rule 1014(b) as a regular member 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). Rule 1014 states that, in 
addition to other requirements, on a daily basis RSQTs and other 
SQTs are responsible to quote two-sided markets in not less than a 
specified percentage of options assigned by the Exchange at the 
request of such traders, unless specifically exempted from such 
quoting (market-making) responsibility.
    \6\ See Exchange Rule 507(a) and 1014(b)(ii)(B). See Securities 
Exchange Act Release No. 68689 (January 18, 2013), 78 FR 5518 
(January 25, 2013) (SR-Phlx-2013-03). This filing became effective 
on April 19, 2013.
    \7\ See Rule 507(a).
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    The Exchange is proposing to amend a reference in the Preface to 
the Pricing Schedule to reflect recent amendments to Exchange Rule 
1014(b)(ii)(B).\8\ Pursuant to the recent rule change, an RSQT is a 
member affiliated with an RSQTO. The member organization is the RSQTO 
with which as many as three RSQTs may be affiliated. The Exchange 
proposes to amend note 6 in the Preface to reflect that change and to 
also add language to that note to state that an RSQTO, which may also 
be referred to as an RMO, is a member organization in good standing 
that satisfies the RSQTO readiness requirements in Rule 507(a).
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    \8\ See Exchange Rule 507(a) and 1014(b)(ii)(B). See Securities 
Exchange Act Release No. 68689 (January 18, 2013), 78 FR 5518 
(January 25, 2013) (SR-Phlx-2013-03).
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    The Exchange also proposes to change references to the Remote 
Streaming Trader Fee in Section VI, entitled ``Membership Fees,'' at 
Part C from ``RSQTs'' to ``RSQTOs.'' This fee is assessed to the member 
organization and not the individual member. In order to continue to 
assess the member organization, as is the case today, the Exchange is 
proposing to update the Pricing Schedule to properly reflect the 
reference to the fee for RSQTOs.
2. Statutory Basis
    The Exchange believes that its proposal to amend its Pricing 
Schedule is consistent with Section 6(b) of the Act \9\ in general, and 
furthers the objectives of Section 6(b)(4) of the Act \10\ 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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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that the proposal to amend the Preface and 
Section VI, Part C of the Pricing Schedule to amend references from 
RSQT to RSQTO and redefine an RSQT in accordance with recent amendments 
to Rule 1014(b)(ii)(B) is reasonable because the Exchange is seeking to 
reflect the introduction of an RSQTO, which refers to the member 
organizations that must satisfy the requirements of Rule 507(a). 
Specifically, the Exchange is amending the Preface to identify the 
RSQTO and reference Rule 507(a) for purposes of defining RSQTOs. The 
Exchange is also amending the Preface to correctly refer to an RSQT as 
an individual for purposes of assessing fees. The amendment to Section 
IV also serves to properly identify RSQTOs and distinguish them from 
RSQTs. The Exchange believes that the amendments serve to properly 
reflect the distinction between RSQTs and RSQTOs to avoid confusion and 
reflect the correct permit holder that will be assessed certain fees. 
The Exchange also believes that the proposal is equitable and not 
unfairly discriminatory because the Exchange will continue to uniformly 
apply the new ``RSQTO Fees'' in the same manner as it does today, by 
assessing fees to the member organization.

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. The Exchange's proposal does 
not amend the manner in which current fees are assessed, but rather 
continues to assess remote streaming fees to the member organizations. 
The Exchange's proposal amends references to RSQTs and establishes the 
RSQTOs in the preface to distinguish individual members and member 
organizations to provide clarity to the Pricing Schedule and certainty 
with respect to billing.

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.\11\ 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

[[Page 27269]]

whether the proposed rule should be approved or disapproved.
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    \11\ 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 Number SR-Phlx-2013-44 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-2013-44. 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 Number SR-Phlx-2013-44 and should be 
submitted on or before May 30, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-11001 Filed 5-8-13; 8:45 am]
BILLING CODE 8011-01-P