Document ID: SEC-2008-1404-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX PHLX, Inc.
Posted Date: 2008-10-09T04:00Z

[Federal Register: October 9, 2008 (Volume 73, Number 197)]
[Notices]               
[Page 59695-59696]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09oc08-154]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58728; File No. SR-Phlx-2008-70]

 
Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the NASDAQ OMX PHLX, Inc. 
Relating to an Order Entry Port Fee

October 3, 2008.
    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 September 24, 2008, the Philadelphia Stock Exchange, Inc. (``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 
Phlx. 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, pursuant to Section 19(b)(1) of the Act \3\ and Rule 
19b-4 thereunder,\4\ proposes to adopt a monthly order entry port fee 
of $250 assessed per member organization order entry mnemonic.\5\
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    \3\ 15 U.S.C. 78s(b)(1).
    \4\ 17 CFR 240.19b-4.
    \5\ For purposes of this proposal, order entry mnemonics are 
codes that identify member organization order entry ports. Member 
organizations send order flow to the Exchange via these order entry 
ports. A member organization may have more than one order entry 
port. To clarify, order entry mnemonics would not include those 
mnemonics entered through internal Exchange applications, such as 
the Floor Broker Management System, because the proposed fee is 
intended to help cover the costs of establishing and maintaining 
connectivity to the Exchange through external order entry ports. 
(See Exchange Rule 1063).
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    While changes to the Exchange's fee schedule pursuant to this 
proposal are effective upon filing, the Exchange has designated the 
proposed monthly $250 order entry port fee to be implemented beginning 
October 1, 2008.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://www.phlx.com/regulatory/reg_rulefilings.aspx.

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

[[Page 59696]]

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 adopting the proposed order entry port fee is to 
establish a connectivity fee in connection with routing orders to the 
Exchange. Member organizations access the Exchange's network through 
these order entry ports. Currently, member organizations do not pay for 
this service.\6\ The Exchange believes that it is appropriate for 
members to pay a uniform monthly fee to support the infrastructure 
associated with market access.
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    \6\ The proposed order entry port fee is different than the 
``SQF Port Fee and Corresponding Credit'' that appears on Appendix A 
of the Exchange's fee schedule. ``SQF'' stands for specialized quote 
feed and is a proprietary quoting system that allows specialists, 
streaming quote traders and remote streaming quote traders to 
connect and send quotes into Phlx XL, bypassing the Exchange's Auto-
Quote System. See Exchange Rule 1080, Commentary .01(b). Thus, the 
proposed order entry port fee would be assessed in connection with 
sending orders to the Exchange, while the SQF port fee is assessed 
in connection with sending quotes to the Exchange.
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    The $250 per month order entry port fee would be assessed per 
member organization order entry mnemonic. The $250 per month order 
entry port fee would be assessed on any order entry mnemonic that was 
active during that billing month.\7\
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    \7\ For purposes of this proposal, an order entry mnemonic would 
be considered active if a member organization sends at least one 
order to the Exchange using that order entry mnemonic during the 
applicable billing month.
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    The proposed monthly $250 order entry port fee is scheduled to be 
implemented beginning October 1, 2008.
2. Statutory Basis
    The Exchange believes that its proposal to amend its schedule of 
fees is consistent with Section 6(b) of the Act \8\ in general, and 
furthers the objectives of Section 6(b)(4) of the Act \9\ in 
particular, in that it is an equitable allocation of reasonable fees 
and other charges among Exchange member organizations. The Exchange 
believes that the proposed order entry port fee is reasonable and 
should allow member organizations to connect to the Exchange without 
being unduly financially burdensome. The Exchange believes that the 
proposal is an equitable allocation of reasonable fees among member 
organizations because the proposed order entry port fee would be 
assessed on those member organizations who send orders to the Exchange 
through these external order entry ports.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4).
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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 \10\ and paragraph (f)(2) of Rule 19b-4 \11\ 
thereunder. At any time within 60 days of the filing of the proposed 
rule change, the Commission may summarily abrogate 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.
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    \10\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \11\ 17 CFR 240.19b-4(f)(2).
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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-2008-70 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-Phlx-2008-70. 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 inspection and 
copying 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 will also be available for 
inspection and copying at the principal office of the self-regulatory 
organization. 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-2008-70 and should be submitted on or before October 30, 2008.

    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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Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-23940 Filed 10-8-08; 8:45 am]

BILLING CODE 8011-01-P