Document ID: SEC-2011-0887-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX PHLX LLC
Posted Date: 2011-06-24T04:00Z

[Federal Register Volume 76, Number 122 (Friday, June 24, 2011)]
[Notices]
[Pages 37163-37165]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-15776]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64705; File No. SR-Phlx-2011-83]

Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by NASDAQ OMX PHLX LLC Relating 
to a Remote Specialist Fee

June 20, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934

[[Page 37164]]

(``Act'') \1\, and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on June 13, 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 adopt a new fee entitled ``Remote 
Specialist Fee.''
    While fee changes pursuant to this proposal are effective upon 
filing, the Exchange has designated these changes to be operative on 
July 2, 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, 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 recoup costs 
associated with maintaining a remote specialist post on the Exchange's 
trading floor.
    The Exchange recently amended Rule 501, Specialist Appointment, and 
Rule 1020, Registration and Functions of Options Specialists, to allow 
qualified Exchange members to act as off-floor specialists in one or 
more options classes (``Remote Specialist'').\3\ In conjunction with 
recent amendments, the Exchange will staff and administer 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 will require Exchange operations and 
regulatory staff to be present at this post. As such, the Exchange 
would incur additional operational and regulatory costs to maintain 
this post and seeks to defray such 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 is proposing to assess Remote Specialists a monthly 
fee of $50 per option allocation.\4\ The Exchange would cap the fee at 
$4,500 per month. The Exchange notes that the $4,500 proposed cap is 
equivalent to the Specialist Post Fee \5\ which is currently assessed 
on on-floor Specialists.\6\
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    \4\ 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.
    \5\ The Exchange assesses a Specialist Post fee of $1,125 per 
month for a quarter post and $4,500 per month for a full post with a 
maximum of $4,500 per month. See Exchange's Fee Schedule. The 
Specialist posts are designed to facilitate Specialist interaction 
with the trading crowd. See Securities Exchange Act Release No. 
59852 (April 30, 2009), 74 FR 21424 (May 7, 2009) (SR-Phlx-2009-39).
    \6\ Specialists are members who are registered as options 
specialists pursuant to Rule 1020(a). See Exchange Rule 1020.
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    While fee changes pursuant to this proposal are effective upon 
filing, the Exchange has designated these changes to be operative on 
July 2, 2011.
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.
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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 this Remote Specialist Fee is reasonable 
because it seeks 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 
cap the Remote Specialist Fee at $4,500 per month, which is equal to 
the maximum fees the Exchange assesses on-floor Specialists for the 
Specialist Post Fee.
    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.\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-2011-83 on the subject line.

[[Page 37165]]

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-2011-83. 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 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; 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-2011-83 and should be 
submitted on or before July 15, 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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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-15776 Filed 6-23-11; 8:45 am]
BILLING CODE 8011-01-P